On Thursday, July 30th, Dr. Jim White was featured on School for Startups Radio. The daily show, which is hosted by Jim Beach features authors and entrepreneurs in an effort to educate listeners on growing their own businesses. Beach, who firmly believes that entrepreneurship is not about creativity, risk, or passion is the founder of the Schools for Startups Online Entrepreneurship Program. On Thursday, Beach’s interview highlighted Dr. White, his fascinating career and his expertise on Qualified Opportunity Funds.
Opportunity Zones Podcast with Dr. Jim White
White, who is a self-confessed 71 year old going on 28, began his career with two tours in Vietnam, followed by a civil engineering degree from Georgia Tech. Over the next few decades, White would eventually buy and sell 23 businesses, generating 1.8 billion dollars in revenue. But before he began his business of buying failing businesses, restructuring them, and making them profitable, White had his first major success as a salesman for Ingersoll Rand in Saudi Arabia. White, who divulged to Beach that he was on fire and hungry, made $2.8 million in commissions in 1978 – a number that would land him the role of VP of Construction and Mining Group within the company.
“When you start making more money on commission than the chairman of the company, they gotta do something with you because they don’t want to continue to pay that amount of money.”
“When you start making more money on commission than the chairman of the company,” White joked to Beach, “they gotta do something with you because they don’t want to continue to pay that amount of money.”
Over the next ten years, White bought and sold 23 companies. “I don’t care what your company is or was,” he said, “If it’s got people involved, you’ve got the opportunity.” His last acquisition, a 100 year old manufacturing company in Belgium, grew from $25 million to $700 million in 7.5 years under White’s direction. After a short 24 hour retirement in California, White began getting numerous calls about the mechanics of his deal. “So that’s really when I realized I had another business and to make it, so I created a JL White International, which is a consulting company; it’s just me sitting at my kitchen table, and I openly grew it to 167 consultants around the world.”
As a consultant, White began his program, Circle Success, which he described as “the most intense one-year program you’ll ever attend.” During the program, White and his team go inside the organization, tear it apart, and put it back together. After turning 65, White looked to his new venture, which appeared on page 185, section 4 of the Tax Cuts and Jobs Act – Qualified Opportunity Zones.
“So what qualifies as a Qualified Opportunity Zone? It’s census tract, and it’s the average income of the census tract. If you fall below 50% of that average, then you qualify as a Qualified Opportunity Zone. There’s probably about 8,800 certified zones in the United States today. Now, why is that significant? There are 35 million Americans that live in these zones. Then here’s the magic sauce. The Treasury says we’re going to target capital gains.
“There’s approximately $6.6 trillion of capital gains unrealized, sitting on the sidelines. So if you put an incentive for capital gains, become into a qualified Opportunity Fund. There are tons of rules which would take hours and hours and hours to explain, but you’ve got to put your money into a fund and a fund must invest in a zone. If you are the investor, you put your money in the fund. If you keep it in the fund for five years, you can reduce your basis by 10% and you don’t have to pay taxes due until April 2027.
“So right now, the clock’s ticking. So if you want to get a reduction of 10%, you got to figure some funds that you’re interested in, an asset class that you’re interested in, and make an investment by December 2021 in order to be able to reduce the tax 10%. But if you missed it, that’s okay, you just missed the 10%. If you invest, say, a day after that, you still would not have to pay the taxes due on the capital gains until April 2027.”
White’s book, Opportunity Investing, goes in further detail on the mechanics of Qualified Opportunity Funds, and how to successfully invest in them. “So that’s it in a nutshell, the book is about, this is the rules. This is good, this is bad. Here’s a roadmap that you should take. So I wanted to put the book out there, so people would not have to guess.” White told Beach on Thursday. He also noted New Jersey developer Ron Beit and his Newark-based Teacher’s Village as a prime example of a successful opportunity zone investment. White, who is in the process of redeveloping his own opportunity zone in Salinas, California looks forward to creating more jobs while updating a necessary facility in a $160 million dollar project that would not be possible without the birth of opportunity zones.
At the end of the interview, Beach reminded White of his promise to reappear on the program once his forthcoming title Broken America is published in September 2020. Until then you can learn more about Jim White and Opportunity Investing at authorjimwhite.com or opportunityinvesting.com. To listen to Jim’s interview on School for Startups Radio click here.