Podcast appearances and mentions of jeff they

What you'll learn in this episode:   How to know when to walk away from a purchase, and how to trust your intuition when buying Why you should always ask for a detailed receipt, even if it feels awkward Commonly misunderstood phrases dealers may use to confuse buyers How Jeff does due diligence before making a purchase How to navigate the many platforms where you can purchase jewelry today   About Jeff Russak Jeff Russak is principal of Lawrence Jeffrey Estate Jewelers. Jeff's expertise in antique and 20th century jewelry combined with an uncompromising attitude toward quality, condition, and style directs the acquisition process. His proficiency in signed pieces and hallmarks is especially useful in identifying and dating each piece. In demand as a speaker on antique jewelry at museums and shows, he also volunteers as a guest appraiser for charity.   Additional Resources: Website Facebook Instagram Twitter   Photos Available on TheJewelryJourney.com   Transcript:   When it comes to buying jewelry, nothing is more important than trust. That's why Jeff Russak, principal at Lawrence Jeffrey Estate Jewelers, won't hesitate to leave a purchase behind if his inner voice tells him something is wrong. He joined the Jewelry Journey Podcast to talk about how he vets his purchases and the dealers he works with; what red flags buyers should watch out for; and why a receipt is more powerful than you might think. Read the episode transcript here.    Sharon: Hello, everyone. Welcome to the Jewelry Journey Podcast. This is the first part of a two-part episode. Please make sure you subscribe so you can hear part two as soon as it's released later this week.    Today, my guest is Jeff Russak, one of the principals of Lawrence Jeffrey. They are estate dealers located in Litchfield, Connecticut. Jeff has had decades of experience buying and selling. He's also extremely knowledgeable about estate jewelry. Along the way, he has learned about what a good dealer should be doing and what you should know in order not to be taken advantage of. There are lots that dealers know about good dealers that the ordinary buyer doesn't know. He will fill us in on some of that today. Jeff, welcome to the podcast.    Jeff: Thank you for having me. I'm thrilled to be here.   Sharon: I'm so glad to have you. This is the second time you've been on. I'm glad you decided to come back.    I bought a diamond tennis bracelet several years ago—well, a long time ago—that I was told was Art Deco. Then, when I showed it to somebody else, they said, “That cut wasn't done until the 80s.” I still like the bracelet, but how could I have avoided that without knowing everything there is to know about diamonds?   Jeff: That's a really great question, and it's actually kind of a complicated one. The person who looked at it did something which is very basic. They looked at the cut of the diamonds. That's one of the things I do when I'm determining the age of any piece. We look at the stones. We have a good general idea of when different cuts, for diamonds or otherwise, were established.    The short answer is I think the only way you could have avoided that would have been to have a better handle on whether this dealer is expert enough to make that determination or not. That can be a hard thing to do. We've talked about how to buy, and a lot of how to buy is all about who you decide to trust. I think for the average buyer, figuring out who you trust and who you feel comfortable with is really the bottom line.   I'll tell a story about one of our better clients. We didn't know this for years, but they're people who have become friends. They started buying from us when we were very new to the business. They didn't buy just jewelry, but they bought decorative arts. We didn't know it, but every single piece they bought from us was going to one of the top appraisal firms in New York and being appraised and verified. After quite a number of years, they told us this. That that was one of the reasons why they kept coming back, because everything was O.K. We passed the test for authentication and for value. Perhaps that's a bit extreme for most people, but it's certainly one way.    I would say it's listening to that little voice in your head. I think today a lot of what I'd like to talk about is how I buy, because the way I buy is no different from the way I recommend that everybody buys. Of course, there are things I know that an average buyer is not going to know, but a lot of what I do is simply being a good detective and listening to that voice in my head. When the voice in my head says, “Don't buy something,” even a little bit, I just don't buy, or when the voice in my head says, “I don't know if this relationship is for me.” Maybe I think the person is a lot smarter than I am. That happens. So, how am I going to know I'm making the right connection, buying for the right price so I can present pieces to my clients for the right price? A lot of it is your instincts. Trust your instincts. It's so tempting to buy something that looks great or you've been told is great or you've been told is a good deal, but if you don't have that sense, that feeling you should, then you shouldn't.   Sharon: Is that how you buy all the time or most of the time?   Jeff: That is definitely part of what I do. It's a big part. We tend to make relationships, and we buy a lot from individual relationships. Some buyers are like bees who are busy pollinating every flower in the field. I think that's really funny. If that's your style, I think you should do it and you should enjoy it. That's a different risk level and a different set of rules. If find people who I really trust, people who are open and transparent with me, who answer my questions in a very forthright way, then those are the folks I go back to again and again. I have the same advice for anyone.   Sharon: Are they here or are they in Europe? Are they everywhere?   Jeff: They are everywhere. I have great contacts in the U.S., and I mean contacts from dealers that I might see in a flea market. I have a couple of local folks who run estate sales. One of them is the finest generalist I know. He is so incredibly smart and knowledgeable. I totally trust him. If I ask a question, he tells me what he knows and what he doesn't know.   Sharon: If he or one of these people that you trust called you up and said, “I have a piece I think you'll really like. I don't know anything about it, but I think you'll really like it,” and maybe they're far away or you don't want to go, will you buy it sight unseen?   Jeff: This goes back to what you and I discussed briefly. I think it's all about the return policy. Yes, I will agree to buy something, but I don't think it's sight unseen anymore. They're naturally going to send me a picture using smartphones. That technology is great, but the pictures don't always tell the whole story. Someone who's really honest doesn't have any fear of taking something back if it doesn't work for the client. I don't think there's anyone I deal with who won't take a piece back if it's not quite right for me.   Sharon: It's interesting you say that. It's probably true, but I hadn't thought about it. There probably isn't anything that's sight unseen anymore with the internet and everything.    We talked a little bit about receipts. Should we make sure we have the receipt?   Jeff: The rules for everyone are the same. There are a lot of laws in place, mostly federal laws. Some of them are laws that relate specifically to jewelry. There are several pages of regulations, and also there are laws that simply are contract law. Your receipt is your contract. You need to ask that every piece of information is included on the receipt.    Let's say you're buying a diamond ring and it's supposed to be by Cartier. You want to know that it's 18-karat gold. You want to know what the diamond grade is. You want to know about the color and clarity. I want to be clear that I'm not trying to create an environment that's very hidebound. We all understand that people do their best to approximate, but they need to be close, let's say. So, you're going to want the diamond colors and clarities, and then you're going to want it to say, “authentic Cartier” or “this ring is by Cartier.” Here's a little trick: if they say, “This ring is signed Cartier,” that doesn't mean it has to be made by Cartier.   Sharon: Who is it made by?   Jeff: It could be made by you and me and we got someone to engrave the word “Cartier” on it. Signed Cartier does not mean it is Cartier. It means they are guaranteeing that the word “Cartier” is on the piece. “Authentic” Cartier or “by Cartier” means that it is Cartier. There are quite a number of situations, especially online, where you do often see the phrasing “signed Tiffany,” “signed Cartier,” “signed Van Cleef & Arpels.” Now, they may fully mean that it is, but I've seen quite a number of situations where it was clear it wasn't.    Sharon: You're asking for a lot; maybe a lot that people don't put on the receipt normally. Have you had any push back? Were people getting annoyed with you?   Jeff: No, I think this is really simple. At my shop and at shows, I have definitely been asked to include all the information on my tag, which is all the information I've mentioned and more. People have said, “I would really like that on the receipt. Could you make sure it's on there?” I think if you get pushback, then I would decline to buy the piece no matter what. If they're someone who can't write that information on a receipt, for me, suddenly, there are alarm bells. Something is wrong. Now, maybe it's just a person who doesn't like doing that. That's possible, and they're a totally honest person, but if they don't want to put the information regarding the piece on the receipt, that's a problem. You have no recourse because your receipt does not state the proper information.    Here's the deal: that contract is forever. People will tell you you can't return things. People will tell you, “Oh, that was two years ago. That's expired.” If it says 10 carats of diamonds and it's only five carats, you can return it. You can return it tomorrow. You can return it in five years. Your grandchildren can return it in a hundred years. That's a contract that has to be accurate. It doesn't matter. It could be tractor parts.   Sharon: It's easier for you. If I see a piece and I have fallen in love with it—if you want it, you overlook a lot, whereas you can say no to a lot and pick out one where you think the person is trustworthy. Is it easier for you?   Jeff: I think you're making a good point. I made some notes before we started. Here's what I wrote about this: this is how I buy, but there are various rules. Let's just say we've discussed them. If I think I should start spouting the law, I remind myself to zip it and just move on. There's lots and lots to buy. It's not my job to tell people what the law is. It's not my job, except on this podcast.    The thing I'm not comfortable with is when someone skirts the law and won't make a proper contract. If you were buying a house and they refused to get a survey, I would say, “Hey, something's up.” I think it's reasonable to ask for a proper receipt, always, and it doesn't matter whether it's Walmart or Sotheby's or any number of famous dealers I can name all over the country. It's perfectly fine, and anyone who is selling things in an honest way won't have any problem with that. If it is what they say it is, why not write it? This shouldn't be any issue. I understand it's uncomfortable.   Sharon: I'd rather somebody tell me, “I don't know,” than guess and say, “I don't know what it is. I don't what it's made of,” that sort of thing.   Jeff: That's a great point. I would much rather people tell me, “I don't know.” But here's the thing: the “I don't know” price should be half of the “I think it's a sapphire” price, or maybe a quarter. “I don't know” means the price should be falling, falling, falling. If you say, “Oh, this is a beautiful turquoise necklace,” is it natural turquoise or is it reconstituted? Now, by law, they're required to tell you. If they say, “I don't know,” the law then requires you to insist they find out.    Once again, it's uncomfortable. If they say, “I don't know,” chances are you really should just walk away. Let's say this gorgeous turquoise necklace is gold. It's got all of these stones, and it's $12,000. Well, $12,000 is a lot in my world. Maybe it's not that much money to other people, but “I don't know” doesn't go together for me.   Sharon: That's interesting. I'm coming from the items I bought when I started getting into jewelry. Now I know a little bit more. For instance, there are people who seem to have a natural affinity for detail I don't have. They can tell. I'm thinking of a girlfriend who once said, “That's not an Art Deco. That's an Edwardian piece.” It was, and I thought it was Art Deco. I thought she was ridiculous.   Jeff: I think it's amazing when people know. There are lots of people who are so good at that. I think as a buyer, you should—I'll go back to what I said in the beginning. You find someone who you trust and who's going to explain to you what you're buying, and who will rely that on the receipt and who wants to have an ongoing relationship with you. If you have a problem, they will sort that problem out. Look, Jeff Russak at Lawrence Jeffrey is not made of sold gold. He does not have a brain the size of a Volkswagen. We make mistakes. When we make mistakes, we have to fix them. That's the way it is.    Sharon: I've heard the phrase, “Somebody has a dealer's eye.” Do you think there's such a thing as a dealer's eye?   Jeff: I think there is. I think what that refers to is someone who just knows when something is a good deal. I have a customer. When I get a piece I know is a good deal, that we bought well and the retail price is a great price, I tease her and say, “You're like a hound. You can smell the jewelry, that there's a deal.” I think that's totally true, absolutely.    Sharon: That's interesting. Well, I certainly don't have that. If a display case says that all the gems or stones inside are certified, what does that mean?   Jeff: That actually doesn't mean anything at all. It's meaningless. This is where we need to start being detectives. The question is certified by whom?   Sharon: Well, who can certify them?   Jeff: People often think it's a government agency, or they think, for instance, that it's a lab like the GIA, or they think the dealer is certifying. A dealer who's smart, who's on the up and up, isn't going to certify anything. Certifying means you agree that the information is true. Most appraisals, for instance, are very careful to have at the end something that says, “We've done our best job to approximate, to use our knowledge to establish what things are,” and then when they say, “I duly sign,” or “I hereby certify,” all they're certifying is that the signature is theirs. They're not certifying the information. They're saying, “We've done our best job.” They probably have, and the information is probably correct, but certifying is different.   Like at the GIA, when you study to become a gemologist, they wrap your knuckles with a ruler if you say certificate or certify. They don't certify things. They produce laboratory reports. It's a report, not a certificate. It doesn't certify anything. It is a laboratory process they have performed to the best of their abilities, which is pretty darn good.   Sharon: We will have photos posted on the website. Please head to TheJewelryJourney.com to check them out.

In this episode, Gina Cocking and Jeff Guylay conclude their discussion around the due diligence process related to the sale of a company. This episode is part of a four-episode series exploring the due diligence process that began with 003 on the business aspects of the due diligence process. EP003: Business aspects of due diligence EP004: Legal aspects of due diligence EP005: Accounting aspects of due diligence EP006: Technology aspects of due diligence Gina is again joined by our featured guest, Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS. Rob shares his insights as a buyer on technology issues that arise in diligence. Gina and Jeff’s discussion highlights four key questions related to the technology aspects of due diligence: 1) who is doing what (who is leading the tech team, who is on the tech team, and what aspects of technology are outsourced)? 2) Who controls the intellectual property? 3) How much has been spent, and how much needs to be spent over the next few years? 4) Is the technology scalable for growth? In this episode, Colonnade Advisors addresses the following questions as related to the technology aspects of due diligence: Are technology aspects of due diligence applicable even if the company is not a technology company? (1:00) Gina: “Every company is tech-enabled, so every company is going to have some element of technology that they utilize every day. Disclaimer, this is not for technology companies. This episode is not a deep dive on the due diligence that a buyer or investor would conduct on a technology-focused company but instead a more general review of what all companies should think about when they're preparing to take on capital or sell the company.” When answering the question about who is doing what, where does a company start? (2:25) Gina: “Start with the easiest thing, and that's an org chart. Is there a chief technology officer who reports to the chief technology officer? Is there a database administrator? What is outsourced? Is there even a CTO? Is some of it done by a consulting firm that comes in weekly, quarterly, just on call? Who is doing the development, and who has the rights?” Does a company need proprietary technology to raise capital or be sold? (3:26) Jeff: “The in-house versus outsourced piece is particularly interesting especially for some of the smaller companies we work with, because a small company obviously may not be able to afford a CTO. Many of the clients we work with use off-the-shelf technology platforms, standard email, and other operating systems. The important issue is scalability.” What do investors look at during due diligence as related to technology? (3:00) Jeff: “They're going to come in and look through the financials and see where the costs are. They’ll look at the org chart and see who's doing what with whom.” What areas of technology are investors assessing during due diligence? (3:15) Jeff: “Everything from the reliability of the systems, cybersecurity, disaster recovery, the policies and procedures in place, and whether or not you’ve had any data breaches.” What should a company put together prior to a capital raise or sale? (4:57) Gina: “A system diagram. A piece of paper with a bunch of boxes that show laptops, servers, internet/cloud form, e-commerce backbone, CRM, and where all the systems are located.” What else needs to be compiled and documented? (5:47) Gina: “What licenses do you have? What technology do you own, and who built it? What is your cybersecurity around all these different technologies? What are the processes and procedures as documented in manuals? Another big area when assessing the technology is disaster recovery. If the electricity were to go out for three hours and you had to bring everything back up, can you do it?” Does having proprietary technology make a company more valuable in a sale? (9:34) Gina: “One thing that we run into sometimes with companies that we're working with is they'll say, "I am different from my competitors because I have a better operating platform. We spent $4 million on it, and it is better than what my competitors are using. Is my company worth more?" That question always causes me to pause. It's great to have your own platform; it may make you more efficient, and we will want to explore and test whether or not it increases your efficiency as a company. But unless you can actually take that technology and sell it to other customers, it may not have intrinsic value unto itself.” Should I build proprietary technology prior to selling my company? (10:27) Jeff: “We encounter the buy versus build discussion all the time. It is challenging because entrepreneurs may be thinking in terms of an outlandish multiple. It depends on whether or not that technology is unique enough, flexible enough, adaptable, and scalable.” What are some of the scalability issues around technology in the sale of a company? (11:45) Gina: “Buyers will ask: "How much is it going to cost me to keep this up? When do we have to upgrade? How do we know you're keeping up with all the regulatory, compliance, latest and greatest in cybersecurity?” In middle market companies, these questions are hard to cover with a four-person tech department.” Does a company need to upgrade systems prior to a sale? (13:23) Jeff: “We're working with a client right now that has been on an older loan management platform for 25 years, and as part of the capital raise we're going to help work with them to upgrade systems. They're going to jump from one smaller universe loan management system to a more widely adopted one. The transition from one system to another is always tricky and expensive and takes longer than you think. There's business risk of moving from one platform to another. We've talked about in other podcasts the importance of hitting your numbers and focusing on your business. To layer on a systems transition or integration project at the same time is probably more than you want to bite off.” How are technology investments accounted for in valuing a business? (14:45) Gina: “When looking at the costs of technology, you look at the past investments and future investments. For past investments, we’ll look at: Was it properly accounted for? Were technology costs capitalized where they can be capitalized? Oftentimes we'll find that these expenses could have been capitalized. We’ll do a proforma adjustment to the financials to add back those costs. These costs will not count against you on your EBITDA, as it was a one-time charge. Then we'll look at future technology expenses and we will model that out in our forecasts.” How is technology when used as shared services between divisions or subsidiaries accounted for in a transaction? (16:27) Jeff: “Some of our clients, particularly larger corporate clients, are operating as divisions or subsidiaries of larger businesses. They share services with the parent organization. We go through the financials carefully to make sure that you have the right expenses associated with the business, you have the right licenses that can transfer with the business that you're selling, boxing the whole thing up to make sure that the package is complete.” Why is scalability a key issue in technology due diligence? (17:43) Gina: “When a buyer is evaluating a company, they are looking at future growth. A big part of that is how scalable is the technology.” What is typically more scalable, off-the-shelf technology or home-grown systems? (18:00) Gina: “Typically, off the shelf and web-based systems should be very scalable. You can get to two, 10, 20 times the current size, and the technology should be able to scale with you. When the technology is homegrown, there will be a deeper investigation into how scalable that technology is and what costs are involved with scaling that technology.” Why is a technology review important when selling a company? (19:10) Jeff: “It all comes back to valuation and the forecast that we present to the buyers. Even if these aren't technology companies, they're all tech-enabled, and you don't want them to be tech disabled. We absolutely have to be able to defend the diligence that the platforms and systems and policies and procedures we have in place can support the growth plan.” Gina invites Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS, who shares his perspective from the buy side of a transaction as related to technology due diligence. What exactly are you looking for in technology diligence? (21:45) Rob: “For us, it's not about whizzbang innovations; it's not about is it bigger, faster, better. Generally speaking, what we're looking for is sustainability. Is it secure? Is it written on a solid code base? Is it written on the right tech stack that we're going to be able to support long term?” Featured guest bio and contact information: Rob Humble Email: rhumble@iasdirect.com Rob Humble leads strategy and corporate development for IAS. Before coming to IAS, Rob held strategy and corporate development leadership roles with financial services firms NetSpend and Rent-A-Center. Prior to his time in financial services, Rob held strategy, finance, and operations roles at Fortune 500 companies spanning the automotive, defense & aerospace, and chemical industries. Rob earned his bachelor's degree in mechanical engineering from Washington U. in St. Louis, graduating magna cum laude. He also holds an MBA from Harvard Business School. Rob lives in Austin, TX with his wife and two young kids. He enjoys hanging out with his family, distance running, binge-watching the hottest TV shows, watching Oklahoma Sooners football, and indulging in random interests including knitting, furniture building, and home improvement. About Our Hosts Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Waukesha, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79 and 99 securities licenses. About Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm’s Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan’s Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University’s Kellogg Graduate School of Management and a Master of Engineering Management from the University’s McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth’s Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders’ take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million. If you enjoyed this episode, subscribe to the podcast, and please consider leaving us a short review. Learn more about Colonnade Advisors: https://coladv.com/ Follow us on LinkedIn: https://www.linkedin.com/company/colonnade-advisors-llc_2/

Jeff:Welcome to the VIP Home podcast where we talk about all things homeowners need to know. Today we're speaking with Pete and Megan from Powerhouse, which is a TV show produced with Alliant Energy. Welcome to you both.Caroline:Tell us a little bit about Powerhouse and how it started back in 1996. How did you guys get started?Pete:Well, thank you, Caroline and Jeff. It's great for Megan and myself to be with you guys today to talk about this. We're going to be coming up on 25 years for Powerhouse and Alliant Energy started this back in 1996, because it wanted really to educate its utility customers about the importance of energy conservation and safety, but also to help us save energy dollars. They started the Powerhouse program looking at energy efficiency. It's a 30 minute program that airs in six markets across the Alliant Energy service territory in the upper Midwest on Saturdays and Sundays. Megan and I are very fortunate to be hosting it for the past 24 years.Megan:I have a theater background. Pete is in broadcasting, so we kind of have different background experiences. The cool thing is, is that Pete and I have known each other almost all our lives. We grew up across the street from each other.Caroline:Wow. That is so awesome. No wonder why you guys work so well together.Pete:The number one question we get asked, because again, we know each other so well and play off of each other. They do think we're married. We're married, but not to each other. We're learning and that's the great thing about Powerhouse is that we're sharing the insight that we see in terms of helping customers be comfortable in their homes, be knowledgeable and save dollars and save energy and be more efficient when it comes to energy in the home.Megan:The interesting angle that Alliant has chosen to take it is that Pete and I are kind of speaking for the consumer. We're speaking for the customer. We ask the questions that our audience would want to hear. We don't present as though we know everything. We've learned a lot over the years through this process.Caroline:At VIP HomeLink, our goal is to make the homeowner's lives easier. Although we're homeowners, we don't know everything. That's why [inaudible 00:02:05] wonderful guests like yourselves is so wonderful for us and our bran and to just share knowledge of home ownership with everyone. We like to look into homeowner horror stories, sort of those stories that no one really wants to talk about, but maybe a few years down the road, you get a good laugh out of it or you're frightened to even think of that it might happen again. Do you guys have a story like that, that you could share with us?Pete:One of our first years here at the house that I live in, one of our segments was blowing in insulation up in the attic. Oftentimes, Megan and I, we have the do it yourself projects, and I was helping with our expert to blow in insulation up in my attic. I'm maybe not the most agile or gifted in terms of home projects and I stepped off one of the joists in the attic and put my foot through the ceiling in my house as I was blowing in insulation. I did get the insulation and my attic is much better insulated, but I had to repair the ceiling in one of the bedrooms because I was a goof and slipped off the joists and put my foot through the ceiling.Jeff:You pulled the Chevy Chase from Christmas vacation where he's up there [crosstalk 00:03:10] himself and he just....Pete:Absolutely. Yeah. I did that. That's a bit of my own horror story that I did on one of our shoots.Megan:The crew and I have gotten a lot of mileage out of that through the years. There's a, sometimes they put together a blooper reel and that's kind of fun. Maybe this is just a horror story to me, but they were trying to kind of figure out what the show was going to be and looking back, Pete and I did some things that I can't believe we did. Pete was in the shower for one episode. I was in a hot tub in a bathing suit for one episode.Jeff:Got to get those ratings. I mean, it's [crosstalk 00:03:50].Megan:Oh my gosh. To me, that's a horror story. Then there was another shoot that I remember where they shipped us off to Wisconsin for a catalog shoot. We had all these products that were for sale in helping you be more energy efficient. One section was all about grilling. Well, they do these things so far in advance. I think it was February in Wisconsin and Pete and I are wearing shorts and T-shirts and trying not to breathe so you couldn't see our breath. We were freezing. That was a horror story too.Caroline:I used to intern at a magazine. We did the reverse as well so we were doing Christmas in July and everyone was in [inaudible 00:04:30]. I remember all the models being like, "This is horrible." That is a horror story in my opinion because I [inaudible 00:04:37] serve chilli. No. No. Too much.Jeff:I actually do have a horror story. We bought a condo in Hoboken, fourth floor walkup. I decided, hey, I'm just going to replace the switch. How hard can that be? I watched YouTube videos. I thought I can do this. How hard can electrical work be really watch the video. I did it. I brought my wife in for the big reveal and I turned it on and then you just see like go up the wall and just like burn all the way up. I was like, "Oh my God." Yeah. From that point on, I was not allowed to do any DIY, especially electrical work. We had to do another chandelier in the dining room. I got my very smart, downstairs neighbor who had an engineering degree. He came in and he wired it all. I was just like, "Oh God." Horror stories abound when it comes to electrical work, I can only imagine.Caroline:I feel like that was such a good segue to start talking about how somebody could start their home energy efficiency journey.Pete:We talk about insulation and over the many years of Powerhouse, doing a home energy assessment, we've had professionals that come in and do it. You can also go around your own house and do an assessment. The whole thing about is, is keeping in the wintertime, keeping the warm air in your house and in the summertime, keeping the cool air in your house. Again, not allowing vice versa. Insulation is certainly a great place to start. Attic insulation is a great way to check and make sure you do have enough insulation above you because the warm air rises. If you don't have enough insulation in your attic, that's the first place. We always say, when you do that assessment, start there. Then your walls, making sure that you have enough insulation in the walls, which may be a little bit more difficult.Pete:Again, on Powerhouse, we have a the do it yourself projects, but we also, we'll bring in the experts and the true professionals. We are not the experts. We're sharing the insight and the knowledge. That's the fun part for us. I've learned so much about taking care of our home, being comfortable, energy efficiency. It's the insulation in the walls, making sure that you have enough there even around gaskets, your plugins, making sure that those, it really starts with the insulation in your attic, your walls and in the floors.Jeff:Installation, that sounds like a professional job. What about DIY? Are there simpler things that I can do that are just easy? I run to the hardware store and do myself.Pete:Yeah. You can spend maybe 50 to 75 to a hundred dollars caulking, weatherstripping, going around and checking windows because windows obviously are the biggest source where if you've got gaps in the framing, get a caulking tube and a caulking gun and seal around the windows, weather stripping on the floors. During the wintertime, keep the warm air in from getting outside. Those are very easy things that you can do yourself. We talk about that on Powerhouse. It seems like that's one of those shows every year that we get into, as we get into the winter season.Megan:Led light bulbs. That's newer technology, and those can make such a difference. We always encourage homeowners. It's a little bit more of an investment, but it really pays itself off. What you want to do is you want to take those few lights that you use most frequently, or that are hard to reach, those pain in the neck lights and replace those because they do last much, much longer.Jeff:The technology has gotten a lot better over the past decade I'd say. The one thing about led lights in the beginning was just the look of them. They had this like hospital quality to them, very I'm in an office and it starts flicking of that florescent. Nowadays, I mean, I replaced a lot of our lights, not all of them, but a lot of them with the Phillips hue so it's all smart connected. You can adjust the very, my wife has a very specific setting that she likes the kitchen on and it's called Mrs. White or whatever. It's very customizable and the quality of the light I feel has just completely changed over the years.Pete:The LEDs, the upfront costs are much more than the old incandescent bulbs, but LEDs and the thing that we, Megan and I, have stress on Powerhouse is again, how much longer they last in terms of years for a bulb. We often talk about putting LED bulbs, just start replacing the ones that you have to replace more often that are easy access. As you said, the design has gotten much more friendlier. The lighting's much better. LED bulbs, 95% of the energy goes into the lighting with LED bulbs, which is certainly much different than the old incandescent. Only 5% of a LED is going to energy usage. That's the big thing. It's longer lasting and much, much more energy efficient with LED bulbs.Jeff:We moved into the house and we had all ... all the ceilings were kind of the cheaper ... I don't know if they were LEDs, but they were a certain type of white that, like I said, it was like a hospital flicking on all the lights. I don't know if I'm light sensitive, but it was just like, they had to go. We put them all in a box and gave it back to the builder who redid the house and then made the investment in the smart LED bulbs. Because not only is it customizable, but you can put them on timers, you can reduce your energy consumption that way and make sure at the end of the day, they turn off all the lights and all the lights are off. You don't leave the one in the basement on by accident. I thought that was a really a plus, but downside, they are expensive.Caroline:Do lights on dimmers count, like if you dim your light, does that count as energy efficient? I mean, my fiance definitely has some bulbs that are the LED, but not all, but we have every one on a dimmer.Megan:My guess would be that it would be using less energy.Pete:I would think. The one thing that you do have to make sure that when you buy LEDs, that they do allow for dimming. I mean, you go to your hardware store, you do have to make sure that they are built for dimmers.Caroline:Can we touch a little bit on appliances and energy efficient appliances and how that affects your overall efficiency?Megan:When it comes to your appliances, there are a handful that you really need to maintain well and use appropriately because they use the bulk of your energy. That would be your refrigerator, your dishwasher, and your washer and dryer. Of course, maintenance is important on all three of those things. With your refrigerator, you want to keep the temperature at 40 degrees and the freezer at zero, that's going to be an energy efficient path and still get the job done. Also, I'm going to sound like your mother for a second, but you don't want to leave the doors open. Know what you want out of the refrigerator before you go in there. It takes a lot more energy then to re cool the unit if you stand there with the doors open. Don't forget about the vent and the coils down below the refrigerator. Every year, check that out and clean that out with your vacuum cleaner.Megan:Or if you have a pet, you'll want to do it more than once a year. Check that because that keeps the flow running efficiently. You also don't want to overcrowd your refrigerator. They're designed to basically be full, not jam packed because then the circulation doesn't work. When it comes to the dishwasher, there are a couple of things you can do. You can use the eco settings that are built right into the dishwashers that we buy today and only run it when it's full. Some people are in the habit of doing it every night, whether there are four cups in there or it's loaded and do wait until it's full because you're going to use not only less energy, but you're going to use less water. Another tip is to put it on the air-dry setting. That's going to save you energy too and rinse your dishes off.Megan:Even though the new dishwashers can sense how dirty your dishes are, but do yourself a favor and rinse them off because you're going to get a cleaner wash and it's going to require less energy to do that. To the point that I made about the dishwasher, you also want to take into account when it comes to your washer and dryer. Do full loads. Doing a couple shirts at a time is not going to save you any energy at all. Wait until you have an appropriate load and also use cold water. It'll get your clothes just as clean. Make sure that you clean out not only your lint catch, but also your dryer vent too. That can cause big problems. If you have anyone who is ill in your house, of course, you want to make sure that you put it on this sterilize setting.Pete:In normal times, we talk about washing with cold water, but if you do know that you've got some sick people in your home, in that instance, we do recommend washing with hot water during that time. Megan mentioned cleaning that lint filter in your dryer, but also the duct coming out of it. One of our viewers reached out to us after one of the shows we did and said that he got out his vac and cleaned up the vent coming out of his dryer. It was like a new dryer he said, because it actually dried the clothes much more efficiently. One of the common things that we talk about with your furnaces is changing that filter vent once a month. Most people don't. It's about making sure your furnace is running efficiently and if you've got a dirty filter, it's not going to run efficiently and you're going to use more energy and you're going to use more dollars to run that furnace.Pete:That's one of those things that I always stress. Keep track on your phone, hey it's time the first of the month to change my furnace filter. The other thing that we also recommend is having a service plan. Have your heating and cooling system checked once a year. That's a well worth it 50 to a hundred dollars service call, but to make sure that your furnace, that your air conditioner is running efficiently, again, we'll save over the years, save energy dollars for you and your home.Jeff:It's interesting you say that. VIP HomeLink is an app, and it's basically for people who they have a home, they want to stay on top of these things, but we all know it's easier said than done. You say, "Oh, I'm going to do this." Then life gets in the way. The app is there to actually send you reminders. You put the information in on exactly what your HVAC system is. You can log in your what filter you need, and it'll send you notifications every time you need to change the filter, every time you need it serviced. It'll actually keep you on point there, because like I said, it's one thing to say, "I'm going to do this." It's another thing to actually do it.Megan:A lot of times we tell our viewers, mark a day or think of a day on your calendar and do that monthly. Now, your app sounds luxurious, and I'll certainly look into that, but in a simple way, if you just think the first of the month, I'm going to check my filter.Pete:Probably the one thing that we've done over the years on Powerhouse is if people haven't, it's a programmable thermostat. I know on some of your other podcasts, you've had a smart home, the programmable thermostat. Maybe it's a Nest that you can control off your phone, which is so nice that you can set back at night, turn down that thermostat and save, turn it down 10 degrees. Over a year time and 10 hours, I think you can save something like 10% on your heating bill. There's really savings and again, that's what, here on Powerhouse, we're about. Saving energy, but also helping our customers and our consumers save energy dollars. Megan and I have put in more programmable thermostats over the years. That's another small investment. They can be as simple as maybe a 25 to a $50 investment. Again, you can go up and get Nest and have everything programmed off your iPhone, which is wonderful. That's significant savings in energy and energy dollars.Caroline:I know Ruth is a very smart home tech kind of guy.Jeff:I like the gadgets. When we moved in, that was the first thing I did was let's get the Nest thermostats. Let's get all the security stuff. Let's get all hooked up and you put eco mode on. It kind of just keeps it at a comfortable ... It's not blowing air on you, but Nest will remind me even when to change my HVAC filter, which I didn't know when I bought it. I mean, it's an amazing device.Pete:It really is. Again, I think that's one of the other things here on Powerhouse that Megan and I are very fortunate is to learn about the new technology all around our house. We've done shows on things in terms of reminders with a smart home, to change the filter, to setback your water heater. Some people might be away for a while and they can set back that. It is amazing the technology, the changes that we've seen over the past 24 years of Powerhouse. It all comes back again to helping that homeowner be more comfortable saving energy and saving energy dollars.Megan:Right now it's, we're approaching summer and here in the Midwest, it's really, really hot. That's another thing. If you can program that with your phone, program your air conditioning. You don't have to have it run all day with a programmable thermostat. You can set that to kick in before you get home from work, before you get back from vacation. One of the things that you can do to maintain your air conditioner is to clean it off. We had an episode where I got to do that, and I had no idea that I could do that myself. Of course, I had a professional walk me through it. You just go outside and you have your air conditioner, make sure that it's turned off at the electrical panel.Megan:Then you take your garden hose and you spray it all the debris off the outside and inside the compressor, spray the fins on the inside carefully, starting at the top down so you don't force any debris in there. That's something that you can do that's really, really simple. Another thing is to make sure that you've got airflow around your air conditioning compressor. A lot of people have landscaping and things like that because they want to hide it. Well make sure you keep it trimmed away so you have about a foot, at least a foot around there for circulation.Jeff:I thought I read that it's not a good idea to put a cover on an air conditioner because it can create mold problems or mildew or something like that. Dumb air conditioners, you can go and you can cover it with like an air conditioner cover, which they sell. I assume there's a need and a reason for that, but then I also read you don't want to cover it.Pete:You just got to make sure again, debris and everything's clear. To me that would be the benefit of having it covered, but then you also have to check to see if there's anything that may have crawled up or may have gotten on the fans. Just be aware of that.Jeff:Some resident chipmunks in there.Pete:Sure.Jeff:I did have a dryer vent [inaudible 00:18:54]. I think somebody moved the dryer and it popped out of the wall, but it's so big that we couldn't see behind it. You don't want to scratch the floors and all that. We only knew something was wrong because we'd run the dryer and then it would get really humid and the hallway started fogging up and it turned out that somebody must've moved it and it popped out off the wall. All the wet steam was basically not going where it should. It's just going into the room and we have a small room. That was an issue. We called the professional.Jeff:They came over and charged me four or five hundred bucks to really ... I mean, I was like, "Oh my God, is that really necessary? Can I not do this myself?" He had a whole thing, it goes all the way up to the roof, I guess. He had to put this thing together and clean the whole thing because I guess dryer vents are a big source of fires. There's something like 15,000 fires a year, the NFPA says are caused by dryer vents. It's a real problem. You got to stay up on top of it or else you can put your family at risk.Pete:I think that's a good point. Megan was mentioning cleaning the coils on your refrigerator. I mean, you don't need to do that, but once a year, but again, making sure that that vent is connected properly. That it is again, blowing that hot air and getting it out of your home. Making sure that the vent is clear there and then go on outside where that vent actually vents to the outside, making sure that's clean out there. I just last weekend went and checked mine. I wanted to make sure that I didn't have any issue, but you're right. A dryer vent fires, I hate to say, can be more common than you think, but a little bit of maintenance can help save from a fire. Also, just the overall, again, the efficiency of your dryer operating.Megan:Speaking of vents, I'm going to reverse the season, but if you have a gas fireplace, they vent outside. I know it's important to make sure that they are covered and that when you're not using it, the six months that you're not utilizing it, things can get in there. Animals can get in there. Debris, all of that kind of stuff so in reverse, that's something that you want to make sure that you check out and have a professional look at. Always. We always recommend a seasonal tune up on those appliances, on your air conditioner, as well as your fireplaces and your furnace. That's another vent issue, right?Jeff:I have a gas fireplace. That is definitely now on the top of my list because you know what? I was outside and I was trying to find the dryer vent exhaust, and the guy said it was on the roof. Then there's another vent. I was like, "What is this?" It's the gas fireplace vent. Now I know.Caroline:My parents had a horror story. They were using, I guess their fireplace once. I don't know. [inaudible 00:21:45] not really sure. Then one day there was this squirrel in the bedroom because I guess the fireplace vent wasn't closed all the way. It was just start of fall into winter. There was just a squirrel in the house. If that doesn't count as a horror story, I don't know what does.Jeff:A squirrel in the house counts as a horror story. I've had that in that apartment that I told you about in Hoboken. I had a squirrel. I was home and I walked into one room and my dogs are there and they just start going bananas. I go in the other room and the squirrel had come in the bathroom and walked into the bedroom and the dogs discovered that. It was just going around in a circle, just like on the ceiling. I literally just closed the door and then freaked out. Then I was like, "Okay, I got to do this. I'm not going to trap an animal right now at this point in time." I just opened the window and left. Then I came back like four hours later, just hoping it was gone. Thank God, it was gone, but not after peeing all over my head.Megan:I think I'd rather have a squirrel than bats.Pete:On Powerhouse, again, we've had episodes again, where chimney sweeps, the importance of making sure your chimney is clean and again, having a professional come out and clean your chimney. We've had episodes where they talked about the chimney sweep, talked about different animals that have been found and maybe have been dead there. That also takes me over to cleaning your ducts, your duct work in your house, occasionally is a good thing to do. If you have a lot of pets, it is worthwhile, but again, make sure your duct work is cleaned. It's about efficiency and making sure again, your appliances are operating efficiently. Just like we know with your car, you have an oil change and a checkup with your car. You need to have a checkup of your house system to making sure that it's operating properly and efficiently. Cleaning your ducts, D-U-C-T-S, and making sure that again, that it's functioning efficiently.Caroline:These are amazing tips. We were talking about outside home efficiency so can we just touch a little bit more kind of beyond the AC unit or whatever the real term is for that, and just kind of touch base on some other outdoor efficiencies that would help along your journey?Megan:Well, I think with landscaping, this goes back to the air conditioner, energy.gov says that you can save up to 50% of your energy if you shelter your air conditioner. Shade it with a bush, a tree, of course, distanced. If you think about it, we run more efficiently when we've got a little bit of shade when the heat is pouring down on us. Your air conditioner is no different. Call a professional, make sure that everything is operating smoothly and I will just reiterate what Pete said. The system of your house is designed to be efficient and all your appliances are designed to work well, but we have to do our part and take care of them as well.Pete:Plant that tree to shade your house, your overall house can make a difference. Just a little bit of shade on your house can cool the house so that the sun isn't beating down on it. That's another opportunity. Again, we've done that numerous times on Powerhouse. Come out and plant a tree and again, obviously again, think safety when you're going to plant a tree. Call to make sure you're not digging into a power line. Look up and make sure you're now also not going up into power lines above that might be up there. We always stress safety on any, do it yourself projects on Powerhouse.Caroline:People like Jeff Ruth here might take things into their own hands when they should be calling a pro.Jeff:Felled enough trees in my day that I know to call a pro.Megan:One thing that can make a real difference in your energy usage is how you plug in all of the things around your house. You think about all of the cell phone chargers that we have on the small end, but then we also have our home office. We have all kinds of little appliances, toasters, things like that, that we don't use all the time, but they are always drawing power. We call that phantom power. That phantom energy can really add up, up to 10% of your utility bill. That's huge. I have a prop for you. This is a smart strip. What this has is different plugs here that will remain on if necessary, like say your wifi router. You don't want that to go off. There's a designated place for those items, but for the things, video game systems, things like that, that you don't use all of the time, your DVD player, things like that you can put in here. Then it actually will sense when you're not using it and shut those things off.Caroline:That is an amazing product.Jeff:Yeah. We're going to definitely recommend because I need one. I'm going to find one, we're going to recommend it to the listeners and give some links out there so you can find the right one for you.Pete:With your ceiling fans during the summer, they are pushing the cool air down. You want to make sure it's spinning the right way to push down. In the winter months you want to pull the warmer air up. Remember when you're out of a room, I remind my family to turn off ceiling fans if you're not in the room.Jeff:Is that because money doesn't grow on trees?Caroline:You mentioned the right way. There's clearly a wrong way. Is the right way for cool air counterclockwise or clockwise or [crosstalk 00:27:25]?Pete:Well, again, making sure you can feel it when you turn it on. Is it pushing down? I mean, you can feel it pushing down. Make sure it's spinning that way. I'll let the listeners check themselves, okay?Caroline:Perfect. Perfect. Your website, discusses home energy assessments. What would that entail and how does a homeowner know that they're ready for such an assessment?Megan:On the Alliant Energy website, we offer an energy assessment and you enter all of your specific information in there, and it's really basically a checkup for your home. It offers recommendations of ways that you can improve and it's something that once you make those improvements, you can then watch your utility bill and see how things change after you do that. I would say every five years, you can revisit it too. If you've done any other home improvements, you can plug those in. It just kind of keeps things up to date. It's not unlike your app actually. You can keep all of that in one place as well.Jeff:We have a lot of things in common. I'm definitely excited to check out more about the Alliant Energy assessment. Can you tell us a little more about where to find that and how to, is it for just people in the service area or can anybody go and get tips there?Pete:Most utilities, again, I think around the country are offering that. I would always say to your listeners to check with your utilities for what kind of services they provide in terms of a home energy assessment. I think most energy companies today are trying to be good citizens of our Earth and are looking at ways to make sure your home is energy efficient and offering that. I would say check that. One of the things that we stress on Powerhouse is energy star rated appliances. When you're going out to look for new appliances, make sure they have that energy star on the product.Pete:Maybe you've got that second old sort of a beverage refrigerator or beer refrigerator that maybe is 20 years old, but it sure keeps those beverages cold. That's not always the best use of that old refrigerator because they really burn through energy. A fridge that's about 15, 18 years old, it might be time to look at a new refrigerator because they are so much more energy efficient here today than just 15, 20 years ago. You can save again, a lot of energy dollars that you're paying to keep those beverages cold.Megan:Another service that Alliant energy offers is a refrigerator recycling program. To Pete's point, you want to check with your utility company and see what services they offer, because you might be surprised.Caroline:Thank you for all these tips. I mean, I'm so enlightened. Knowledge is power they say.Megan:People are sheltering in place and their home a lot more. Their utility bills are creeping up because of that. With the use of the home office, kids playing video games, all kinds of things, homeschooling, using your computer more than you might have before. People are cooking a lot more. There are ways that you can use your kitchen a little bit more efficiently, and that is to scale down your appliances, especially as we're approaching summer. Grill outside. It's a common sense thing. Use your crock pot, a slow cooker, toaster oven, they use so much less energy than torquing up your oven.Megan:Also, you can scale down how you use your stove top as well. You want to make sure that you use your cookware appropriately by using the right pan size so you're not wasting energy by extra heat coming up. Also, put lids on things. That's going to speed up your cooking and it's going to use less energy too.Caroline:I know my fiance doesn't quite get the toaster oven versus the oven. I'm really trying to help him out there. It also got so warm that the toaster oven is, it seems a bit quicker, but it also doesn't make the whole place like it is outside.Jeff:I think one of the best wedding gifts that I ever got was the Breville toaster oven. It's like-Caroline:I just said that, for our wedding.Jeff:It's great. I mean, I use it every day.Megan:It's fast, quick, easy. You can watch it happen and it doesn't heat up the kitchen.Pete:Brilliant. Again, appreciate being able to, Caroline and Jeff, to talk with you guys and share tips with your listeners. As we like to say, always as we finish an episode of Powerhouse, with these tips and ideas and saving energy, we can make your house a power house.Megan:A powerhouse. Visit our website, Powerhousetv.com. There are loads of tips on there.Caroline:Thank you so much, Megan and Pete. It was so lovely to have you both. We hope that we can partner again soon. Our missions really align in that we really have a lot in common. We'd love to have you guys back on the show one day.Pete:Thank you.Megan:We would love it. Thank you.Jeff:Thanks guys. Have a good one.Caroline:Have a great day.Megan:Thanks. You too.Jeff:Bye.

How important is content marketing strategy to your e-commerce business? Crafting valuable content helps build brand trust with both existing and potential customers, allowing you to successfully grow your brand. Today we're talking all about content and smart ways to ramp up your strategy. Jeff Coyle is co-Founder and Chief Product Officer of MarketMuse. Coming from twenty years in the SEO and content strategy arena, Jeff's products use AI to accelerate content planning, creation, and optimization. With their spokes-of-a-wheel keyword approach, MarketMuse's content marketing strategy connects ideas, allowing clients to demonstrate product expertise. Episode Highlights: How content relates to growth and where to start assessing the need for your business. Strategies that help tell the story that you are trying to tell. How to gauge the success rate. Where the news dynamic fits into your content campaign. The breadth and depth of your content. Figuring out where the gaps are. When to hire an expert. How the Marketmuse suite of services help the writer. Using smart content to illustrate expertise. Why search volume is not the only strategy for content valuation. Some quick win strategies – aka one-page plans. Packages MM offers for different sized audiences. Tools and hacks Jeff recommends. Transcription: Mark: So there was a time early on in Quiet Light Brokerage when I was doing all of the Content Marketing for the firm and I was writing on average eight blog posts or articles per week averaging about 18,200 words in length. And I underestimated when I started on this kind of venture of can I do these eight to 10 per month; I underestimated how much work it was going to be and it was a lot of work because it's not just writing down your thoughts it's writing for the web and writing for SEO and understanding what do you write about next. It's amazing how quick the writer's block comes in. I know that you had a conversation with Jeff Coyle a mutual friend of ours from Rhodium and one of the founders of MarketMuse which is an awesome company; a great tool from an SEO and content marketing standpoint. You guys talked about everything content which is relevant to buyers, anyone looking to acquire a web-based business and grow it. I know it's been a huge part of our marketing plan. What are some of the things that you and Jeff talked about in this conversation? Chuck: It's quite great. I had a great conversation with Jeff and we're talking about if you've got a dollar spend where to spend it. Most people they're doing basic keyword research, they're looking for what's the keyword that's getting the most searches versus the keyword difficulty. And he takes it like way beyond that and they're looking at not just the specific keywords but what keywords are actually tied to other keywords that show that you're an expert in the topic. If I'm talking about like a specific thing but I fail to mention other words Google then thinks that I'm not an expert because anybody who's an expert would be using these other words or when you're just looking at keyword tools to look at the ones they're getting the most traffic you often miss the additional keywords that are in there. Mark: Right. And I know full disclosure I use MarketMuse with Quiet Light Brokerage and actually with my other company as well. I use their service and the general sales pitch is pretty simple. It's this idea of setting up pillar pages and having this kind of spokes on a wheel branch now so the example that they use I think in some of the marketing materials is if you're going to have a website on craft beer you should have a blog post on craft beer but you should also have an entire section on hops and an entire section on barley and malts and then even from there if you want to be all about hops and afford it to do a page on hops you should also have some satellite pages on imperial hops or these other types of varieties of hops and being able to have this kind of wheel with different spokes coming out. And you know what a bunch of SEO tools use this. Like I've been using Sight Bulb recently; a really cool software that diagrams out your site and the sort of hub sort of format. What MarketMuse does is they take a blog post and had topics so you say I want to focus on craft beer and they say okay if you want to really be known as an expert, make sure that you're talking about hops at least 10 or 15 times in this blog post. And make sure that you're also talking about different types of barley. And then you can use that and say well okay I'll talk about this in this blog post but what do I write on other blog post? It's made for me and I don't do a lot of the writing anymore but it makes the content creation process super easy; like the ideation part, I mean that's the hard part about all of this. How do you come up with new ideas on what you should write about? But I don't want people to think this is just a sales pitch for MarketMuse. It's a great piece of software, obviously, I believe in it from that standpoint. But I think from a buyer standpoint also from a seller standpoint having a solid content strategy is really really key. If you were to spend money; Chuck you've had a bunch of businesses in the past and I know you've used content, if you're going to spend your money somewhere for long term marketing dollar I'm kind of leading you to the answer here, where would you spend it? Would it be in the content marketing world or would it be PPC or what are the advantages in your opinion of this content marketing versus other types of marketing? Chuck: Yeah I mean it really depends I think on the type of business you have. Obviously, if you have a content-related business then you want to hop out as much quality content as you can. If you've got an e-commerce business there's different funnels and then buckets may be that you need to put your money in but you definitely need to be investing in content. Even on Amazon when you're thinking about like selling something on Amazon you go to some people's pages and the content is just horrible and it's so important. One of the things we didn't talk about but like when you're looking at Amazon you'll look at the questions people are asking and then answer those questions. So content is definitely important. We talked just a lot about what you should be writing about next. When you're looking at competitors sometimes you can actually see the direction they're going and then beat them and write a bunch of content. Actually, get in front of them because you look at their keyword list and you know the direction they're headed and you can actually get in front of them. Mark: Yeah for my money I think the two areas that are the most important for a marketing strategy at least long term return will be content marketing and CRO, conversion rate optimization. Those two things alone have such staying power where you invest now and you're going to benefit for years to come as opposed to PPC which is great because you can throttle PPCC; that's the reason people love it. You can throttle up and down. You can really find some gems and it's very immediate. But long term success I think is predicated on this content strategy frank that's something we've even bought a little bit at Quiet Light. I just got to give you a quick shot out Chuck because you are wearing a Quiet Light shirt. So for all those people that are watching on YouTube and I know it's not a ton of you that are watching on YouTube but those that are you can see that Chuck actually has a really cool shirt. I don't even have that shirt. Did you give me one? Chuck: I think I kind of bought Joe one but I didn't get you one so maybe I'll have to get you one as well. Mark: Okay, I think Brad gave me one and it was like enormous. I was swimming on the thing. Chuck: I think that's the one I have with Joe when I bought his it was too big for him so I have to get your size. Mark: Make sure you size it down and hey if we get a few extras of these maybe we can set up a contest for people that actually want a Quiet Light; I don't care what you do with it but it's kind of fun to give that away as a prize. Let's get into the episode. Content marketing is where I cut my teeth early in the Internet world. I love this topic. I think Jeff is one of the smartest people in the industry when it comes to content marketing [inaudible 00:07:02.0] good market views and this is definitely one to learn from. Chuck: Yeah absolutely and two things before we dive right into it; one they're giving a special discount. Again we're not trying to promote it. It's just a good product if you want it great but in the show notes, there's going to be a discount code to get a nice percentage off. And stay tuned to till the end of the video because I also asked Jeff for some additional tools that he likes to use. I always think it's fun to ask entrepreneurs what are some various tools that are unrelated to our discussion from what you're using so. Chuck: All right hi everybody Chuck Mullins here from Quiet Light Brokerage and today on the call we have Jeff Coyle the co-founder of MarketMuse and chief is it, product officer? Jeff: Yeah, Chief Product Officer, I manage the product data science and engineering teams as well as the marketing team at Marketing News. Chuck: Awesome. So I've known Jeff for a couple of years, we run in the same circles. I've been on the Internet world for quite a while. Jeff do you want to tell us a little bit about yourself? Jeff: Sure. I am as you mentioned the co-founder and chief product officer for MarketMuse. Prior to this, I've been in this space as Chuck mentioned for quite a long time; about 20 years as scary as that might sound in the search engine optimization content strategy game. I have generated like 50 million leads and not as an exaggeration for B2B technology primarily companies in the early part of my career. I worked as an early employee at a company called Knowledge Storm which sold to Tech Target which is also a great B2B publisher and an intent data and ABM platform for enterprise and mid-market B2B companies. I worked for them through their in-house team and in-house capabilities while I was there really focused on driving engaged users through content and content strategy. When I left Tech Target having already spoken with my co-founder about ways that we could grow MarketMuse I came on as a bit of a late co-founder and we've since grown the company to almost 50 people; really, really an amazing story about growth, building a new category about content strategy, what should you write next, what should you update or optimize next that's going to have the biggest impact on your business and everything that goes along with that from how do I assess my own authority, how do I understand where my gaps are, how do I know where my strengths are. And that's been the mission of our business is really to tell the story of I could spend a dollar on content; creating, optimizing, blah, blah, blah, tomorrow what should it be? And that's what MarketMuse is for; to tell that story. Chuck: Alright so kind of you alluded to it but today we'll get you on a call to talk about SEO and maybe more so how content is applicable to SEO. So maybe starting at the base when somebody either acquires a new site or maybe is looking at a site trying to think of how do I grow this site like where's my opportunity, what kind of analysis do you think somebody should start off with? Jeff: Well I think that traditionally the way that people have assessed sites for their strengths sometimes is only by looking at their current and existing rankings or their historical rankings. So it's a bit of you know kind of a tail wagging the dog assessment of where you're at, where you have been, but that as a starting point does provide some value as to where you are. It just doesn't tell typically the entire story about what it means to be about something. So when I'm looking at assessing a site for the merits of its; the collection of its content or its inventory of content, when I'm looking at is to say yes certainly I want to see performance. I want to look at also things that I might get out of my analytics package engagement. I have to understand the goals of the company the key performance indicators of the business. Am I driving those things? Can I peddle out of them? But divorcing those concepts for this point in discussion about conversion rate optimization and such from a search engine optimization or authority perspective I want to see where I've written great content so how much content have I created on core topics that I care about. When I do cover those topics how in-depth do I get and how successful does that; what kind of success does that yield when I write about a concept I care about when I get deep when I write high-quality content on concepts that I care about. Those two things really tell the story of your existing momentum on a concept. And so that when I'm assessing a site that's one thing I want to want to figure out is where do I have momentum? What concepts can I write about and I expect to be successful. And that's Stage 1. Chuck: Before we move on from that one how do we gauge that success rate; what do we think is successful, what are the indicators that say hey I'm already doing well here or I'm not doing well here? Jeff: Absolutely and that's the hardest part. And to run an effective content marketing team and a content production team for any company you've got to start at what are the key performance indicators? If I'm an e-commerce site the key metrics that I have is my average order size, it's my conversion rate close to a closed cart, it's my cart abandons, it's my total revenue. If I'm an affiliate site it might be an RPM metric and I have to be agnostic of and when I have agnostic a reference of affiliate and then I want specific combinations of affiliates because sometimes you can actually fake your books accidentally if you've got great affiliates on one page and not great affiliates on another. So it's really about I think engagement with affiliate opportunities in addition to revenue. You get a look at both of those things. If you are a publisher it's going to be RPM but also it's engagement with those pages. Because again how your ad server validates is do you have paid ads? So if you have a bunch of house ads and those have a different rate you want to always account for that because you might have great content this shooting off impressions engaged users clicks and such. So I always like to look at my current value per visit and then by the way from a B2B tech or something PI attorney; all these places are where MarketMuse does business so I like to kind of list a full fledge. I'm looking at my conversion to lead. I'm also looking at as far down the funnel as I can track and attribute. Every deal no matter what every situation you're looking at you always want to get it back to current value per visit and aspirational value per visit from a channel. In this case, let's say organic. So if I'm in a scenario I want to always be able to back that up. That's the only way I can truly define quantified value. And for MarketMuse obviously, that's the only way we can truly walk in the door and be confident in that ROI analysis. And that's why we've had to do this hundreds of times. When we talk to somebody it's to say how much do you really value each one of these visits? And if you can't answer that question it's okay, let's back into it, let's figure it out. How much is that truly about? Because then if you grow your traffic 20% you can say okay well that's worth this much to me. How much am I willing to invest in that? And that's how I define. So that's a long way of answering a short question that was actually really duped question. But the answer then is my quantified value metric. How much did I publish? How much did I update? How much do those act motions cost or those actions cost? And what was the efficiency rate on the content achieving some sort of baseline goal? I like to use recurring traffic from organic search as my goal. So I might get a boost from other channels and then it dies off. So I want recurring traffic at or above a particular baseline. So if I wrote 100 articles and 10 of them achieved my baseline of ongoing recurring traffic when I have 10 percent efficiency rate in that zone. If I updated 100 articles and 40 of them grew in traffic at or above a particular level. Then I've got a 40% efficiency rate on optimization. So when I talk about effectiveness of content I want to see how much should I publish, how much should I update and how often did that achieve my goals? I see ranges by the way just it scares the crap out of me sometimes, 1 to 2% of efficiency. Like I write 100 articles and only 2 get rankings. Quite often 40 and 45% at best practice that it's so wide. So you need to take stock today whomever you are and say how often did I write, how often did that yield recurring traffic; that's my efficiency rate. Am I in that 10 percent zone? I got some work to do. Am I above 20, 30, 40? I'm kicking butt. Now how do I take advantage of that? What do I do? No matter where you are there's always steps you can take to really maximize your earn. But it's a great question because so many people talk about ROI and they can't explain how they calculated. Chuck: Right. And it sounds like what you're saying is maybe like diving into your analytics but not looking at like how much traffic this page is doing but what is the segmented traffic; how much is coming from Google or Bing or whatever you're targeting. Maybe you're targeting link acquisition with an article then you got to figure out what's the value of a link that's coming in, how many did I get on this piece of content, and then maybe kind of summing up the value of all the different components. Like knowing what your KPIs are for the specific content. Jeff: Absolutely. And so the ways that I do that so it's manageable; there are ways where you can do that so it's manageable because [inaudible 00:16:38.2] I have thousands of pages or I published hundreds of pages how could I possibly do that? It's do it for the site level. Do it by site section; it's the way Google thinks about your site anyway. Do it by site section and then take your marquee pages and do a more thorough analysis of them. And marquee could mean your best pages that you feel are the best but they punch below their weight class, stuff that does really well, stuff that you invested a lot of money in. So build your plat; this is the stuff I'm going to do with deep dive but I'm also going to get my section level and sight levels metrics. An example might be that when Chuck writes an article he's on a 20% conversion rate to my effectiveness metric. But when Ron I don't know who Ron is but well just say Ron, when Ron writes an article he's 5%. So you're to get; you could do person level, you could do section level. You really want to get that slice and dice to know what's the thing that is causing success to happen or is it luck. A lot of sites a lot of B2B companies they rely on all of their authority for 5, 10 pages and they've got hundreds. Not only is it completely scary and unhealthy from a competitive space situation but if you're a Quiet Light listener it's an opportunity. I mean it's an opportunity to see a site that has a risk of ruin. It's an opportunity to see a site that has huge opportunity if they just publish the right content. So all of those things are what we're typically looking at. It's when I publish about Chevrolets it does real well when I publish about smart cars it doesn't. So when I get that site I'm shooting off about Ford and about gosh as my adjacent so I'm talking about; so it's really getting into when I get in how can I write about tangential or semantically related concepts, really expand my inventory in ways I know we'll have more success, and if I do want to cover other things. I think a reasonable expectation about investment need because I can't just go right kitty cats and crush it. But I know that if I cover what hubcaps should be on the PT Cruiser I can. And so those are the types of conceptual analysis, editorial content strategies I have been doing with years. Now you have data to support it. And that's where I think that the next phase of great Search Engine Optimization outcomes comes from this type of content strategy analysis for sure. Chuck: And one of the things I was reading the other day was just and I think everybody already knows this but they were talking about news websites and why don't news websites rank for everything. Like a news website gets all the links because everybody's linking to articles but yet they don't have the ability to rank for all topics, right? Certain news agencies actually get a lot more traffic for specific topics because that is maybe their topical relevance of their business. Jeff: Yeah. Oh, I mean news is so unique. The news algorithm has so many components and so from a Google news perspective and Google top stories there's components of real-time boosting. There's the concept of the fact that news articles appear in organic search. And they're coming from different channels of information. So they cross the chasm from just being news to being appropriate in search results. So then there's the dynamic of some of those items stay forever. Some of them are temporal and they're going to bounce out when that thing becomes less of a temporal story. We actually have a solution for that. MarketMuse allows you to analyze both serps and overlay analysis and it's called newsroom but that's neither here nor there. But the point of the message is what if you write news articles about this topic you care about but there's four to five aggressive publishers also publishing in that that have authority for news and you're just picking up the scraps. You can see that with solutions that are out there now. You're going to just see what those things are and then tracking that back to assessing performance. If I'm looking at my content items and I write 80 articles about some topic I get no news referrals and I get trickles in of organic and I'm writing it for the purposes of news, is that great? Let's say they get other KPIs, let's say they do gather links and they become powerful. But I'm not winning news, I'm not getting the organic search value that I think I should, how do I use that? How do I use the power that those pages are acquiring to my benefit? And most of the time when I see problematic content strategy; document the content strategy at a company they're not looking at their existing power pages. What content are they publishing that is gaining some value and how do we use that? Because I've got something that's a link magnet that every SEO in the world will go we need to do something with that but they don't necessarily know what that is. And a lot of times you see these link magnets and they're out there. They got a little bit of traffic upfront. They're not valuable enough to get recurrent traffic or it's not; it was a temporal staged story so they don't know what to do. And so weaving that article; weaving that item into some real good content strategy, that's the win. That's building my thought leadership, building my clusters of content, and hey this powerful battery. Plug the battery in here, plug the battery in here, and weave it in with internal link, weave it in with appropriate content, upgrade opportunities for conversions, there's so many things you can do to repurpose but when you get a winner use the winner. And we see that older people are scared to touch them because they're like it might break up. So these are the main dynamics that we run into with kind of the Assessment Authority and news as a special case. But it's so misunderstood what to do when you get a news winner. Because if you can predict that every time you publish a news story on Linux you're in the top three of Google top stories. Like, open that wallet every darn day. And I have clients that are in that scenario and we're like you must write about this every day and they cringe at first and I'm like here's the value that this produces; it's not just traffic. It's all the good stuff that comes as a result of that. It's also a long answer to a short question but I think that's usually a theme with me. Chuck: Alright, so number two you're about to say before I ask you a question? Jeff: Oh gosh I don't even remember what it was now. No, I'm just kidding. So it's kind of breadth and depth and then is the things that you see as being really high quality that you've written. These pillar pieces, the centers of the universe, the things that have acquired the KPI. How are those KPIs; they've acquired some metric that gives you that sense. So we've talked about how your existing momentum, well what are these cornerstone pieces, what are the center of the cluster pieces that exist and how are you using them today? Are you weaving them in? Are you using them to write then support pieces, etcetera? And how do you combine that with analysis of your target readership or user or buyer intent? So what's their purchase cycle; do you have coverage in the information phase, do you have coverage in the middle of funnel, do you have coverage late in the funnel, do you have post-purchase troubleshooting and adherence in ownership? So when you have a beacon of power really that's the time your mirror needs to be the most clear. I always say this. Like, stop tilting the mirror your way because you think you have success. The garbage in the game right now as I call it is people looking at search results and saying I need to write articles just like that search result item regardless of whether you want to argue differentiation it doesn't work. It only works if you have existing power to start to do things like that. What you have to do is just say with my site that I'm assessing, do I have coverage at all phases of the cycle that people would care about who are in this motion; I mean research, intent, decision, conversion, adherence, troubleshooting, whatever the metrics of the buy spying journey would be. And that comes to the why I say this way because the pragmatic approach is to say does this site truly represent my business as an authority and as an expert? What about this collection of pages or this content inventory tells a story that I actually am an expert? And so when you're looking at coverage, you're looking at momentum and what's been validated that I am an authority. But then it's also going to be like aspirationally if I truly were an expert what would I have covered? I can do that by doing competitive analysis or I can do that by doing semantic analysis and manual research. And so when you cross-reference; the punch line here is cross-reference the aspirational model against what you have and that's your gap analysis. So think about the outcomes there. I have gaps in this part of the bio journey. I have gaps, I have blind spots I don't ever cover these topics. I have blind spots here blah, blah, blah. I also have ranking gaps where I have striking distance keywords like I'm on page two that's that the SEO trick, right? Go tell them to update the pages where you're on page two and they'll go up a little and hey you did your job. So but if you weave that into this type of semantic analysis; this gap analysis, your content strategy becomes 2, 3, 10x more impactful overnight. And so compare that to keyword gap analysis, think about the outcomes. You get a word out of it. You get a word where you're ranking 12th and you think you should rank 5th. Well, now you know why. And then you know what you need to do. And that's the secret here. It's get yourself out of just keywords; get yourself into the content that's needed to plug the holes. Chuck: So we don't know what we don't know so how do we figure out what the gaps are? Are there tools you can recommend? How do we figure this out? Jeff: Yeah. Well I think that they're certainly on it and they're obviously not just the ones I present with MarketMuse but there are ways if you want to see. You want to be able to look at using your analytics, using any off the shelf Search Engine Optimization suite whether you are a higher-end person in a more enterprise or kind of using an [inaudible 00:27:29.2]. Looking at those pages; again all of your pages trying to organize them or you're looking at you don't want to buy those things, you've got analytics and you look at something that can crawl and analyze the structure of your site like a screening frog or a [inaudible 00:27:45.5] or a solution like that. Get a true understanding about your site and what it's about. What are the things where every time you publish it it's a winner or more of the time versus what's the stuff where you've been tilting at; aspirational goals. So looking at that or even looking at just traffic and revenue versions by section or by page type or by publish state because last year this was under this person's management this year this is under this person's management. Just a combination of this basic information from analytics and page-level data from a [inaudible 00:28:23.7] can get you at least started. And just to start thinking critically about your content inventory. A solution like the MarketMuse obviously is going to give you the sniper rifle to say go write this page, go fill this gap. But even if you if you're just looking to get kind of a basic understanding it can be easily put together to say gosh Chuck I don't know if we should publish any more articles about backgammon we're a chess site, it just hasn't extended. But when I write about you know particular defenses, we crush. Why don't we just lean into that? So you can make those types of decisions but then how do you get where we want to be a backgammon site. What are the ways that we can bridge the gap between chess and backgammon? How can we become more of an authority on strategic board games in general? So those are the types of questions that are out of this type of analysis, if you're real with yourself you stop publishing stuff that's not going to succeed. Try to figure out why it's not succeeding. That's where a person like a business like ours operates. But there's many out of an agency that knows the answer to these questions that can do that introspection that can do that analysis. But if you're analyzing your site I think it's truly to step back and say am I putting myself out there as an expert? Am I really showing it or was I chasing keywords? And it's always that oh man I haven't even thought about; I've just been looking up keywords, building lists, writing articles, keywords, lists, articles, keywords, lists, articles especially in the affiliate side not knocking always [inaudible 00:29:58.8] so much. It clearly comes out of a keyword list. And then I wrote the article some of them get linked together. Some of them don't. It's not leaving the web of somebody who actually knows their stuff. A great example of this; I've got uprise for every product in the world prices or reviews combination; bottom of funnel. That encompasses my contact strategy against this topic. It could have helped with that and then people wonder why they get hit when there's a quality change in the algorithm. It's because they're looking for that thing. They're looking for that stuff. You haven't told the story about buying that thing. Why are you the expert on pricing it? It doesn't make sense. And so that's the thing that; think about; get out of these search engine optimization shoes get into an editorial shoe. Hire an expert to say hey if you were writing an inventory of content about sound bafflers what would you cover; what are the things you need to know? And then cross-reference that against your stuff. Obviously, there's ways of doing both of those things taking technology like what we do. Chuck: So let's talk about that I know we don't want to like hardcore pitch your product but you have a great product that I think is a lot of value to a lot of people. So let's talk about like how your product can help and maybe even hit it as like these are the things that my product can do and some of the stuff people can do without the product so they could do it on their own but you're offering a service that makes it a lot easier. So let's talk about that. Jeff: So if I'm going to assess the value of a site; for example, if I want to see where there's areas of opportunity to create content or update content and be more successful. If I can get that hit list immediately and go execute on those plans; really move the needle quickly, that's a direct value of what one of the components of MarketMuse Suite. So MarketMuse Suite is a collection of; a combination of an automated content inventory and content auditing solution. We'll also take it to the next level and say after you build; after you say I want to create this page or update this page we'll build a comprehensive content brief for your writer. So it acts as a blueprint or an outline or a brief if you're familiar with what a brief looks like. And it tells a story so that the writer can be creative. So that the writer can research imagery; so the writer can research their sources and doesn't have to worry about is this thing going to have success after I hit publish. So many writers the anxiety they have; this is a huge pain point in the writing space is am I doing my keyword research correctly. Ask them. I mean that's the part I don't know. That's the part I really don't care about. I'm speaking from their standpoint. So take that mystery out of it. Take the SEO mystery out of it. Here's the outline we need you to follow. Be super creative. So we answer that question with that side of MarketMuse. We also have some point applications for doing competitive analysis so I can look at any search engine result page and understand who's got great content; high quality, who's got weak content, what are the gaps. And if I were going to put out true best in Class content on this specific intent, this specific topic what would it look like getting into the gritty details. Chuck: So what are some of those details? Jeff: Yeah. So what are the concepts that need to be included, what are the variants to consider, what are the questions to ask, what are the questions to answer, what are the internal linking; things you should do to internally link to other pages to tell the story that this isn't an orphan page on left field that actually weaves into your existing inventory and then grading your existing coverage and understanding how to interweave and to weave those things together. I have this great page; the one that you talked about, the news one, I want to make sure that it's linked. So all of those things we have point solutions so you can do a one-page analysis and get recommendations to improve it. You can get that one-page analysis and recommendations to make it equal to or better than your competitors every time and go head to head or against the whole field; questions and answers analysis, internal and external linking recommendations, and then we have for premium; one of our premium offerings is the newsroom solution specifically for Google News optimization. So basically the story is what should I write next, can you give me details as to how I would execute that so that you're getting me as close as you can to publishing? And then for all of my adjunct workflows; this specific analysis, this one-page analysis, we have applications to solve those specific goals to say okay why is Quiet Light Brokerage beating me for this topic? Is it because of quality; MarketMuse will tell you. Is it because of links and they have a worst page? Darn, they're more authoritative than me; what do I need to do? I need to go write a package of content. Tell me more of the story that I'm the expert because I don't have that off-page authority. So no matter where you sit it's giving you the advice as to what those next steps should be. And that's kind of the spirit of what we do. Chuck: So one of the examples I've heard you say before is like you're writing about a specific topic blue fuzzy widgets, everybody who writes about blue fuzzy widgets also includes pink monkeys and if you're not writing about pink monkeys then you clearly don't know about blue fuzzy widgets. You're not an expert. So maybe can you talk about that a little bit? Jeff: Sure. So our core technology is built on it. It's a topic modeling technology and it tells the story of what it means to be an expert on a concept. So it tells me by analyzing in some cases hundreds of thousands or millions of content items that people who know a lot about blue fuzzy widgets also know a lot about pink monkeys and so if you write about blue fuzzy widgets and you don't include pink monkeys you're not telling the story that you're an expert. So often in the market people have just looked at like the top 10 results to do this assessment. For so many reasons that I could get into there's a great article online called TFIDF is not the answer to your content and SEO problems and it goes into detail of each one of these logic challenges that exist. It's great for information retrieval. It's been around for 30 something years. Obviously, it's still being used. The challenge though is don't base your business content strategy and thousands of dollars of investment on that. And so what we were able to do is to say that but we're also then because we're analyzing so much data we're able to say that well guess what the top competitors aren't talking about orange donkeys and it's very relevant. That's a way for you to differentiate yourself. So you're covering the blue fuzzy widgets, your covering the pink monkeys but then you're going to differentiate yourself by also illustrating that you know all about those orange donkeys and that's what makes you special. And how does that drive back to true expertise? In this, we see constantly being successful with the best content strategies. They're writing about the table stakes content but they're also illustrating that they really know this stuff. And I always use more detailed examples but a cool one I always use for content marketing is a lot of people that write about content strategy don't talk about buyer personas. They don't talk about target audience. They don't talk about the roles on a content strategy team. Do you know why? Because they're chasing keywords. And if you can look at a search engine results page and go ooh, they're chasing keywords, there's my opportunity. Even if they're 9,000-word articles by HubSpot if you can find gaps in their game you can really take advantage of that and you can punch above your weight. And if you can pop a page that doesn't have as much traditional off-page authority link profile to build that beautiful cluster you can start ranking with undersized off-page pages and sections. And that's niche hunting. That's what the niche hunters talk about. That's what the UN fencers of the world; that's what they're really focusing on. How can I punch above my weight with undervalued off page sites? That's the way you get there; great content illustrates that you're an expert every time. Chuck: So we're thinking; traditional people when they're thinking about articles they're doing keyword research they're finding those low difficulty versus high search volume relative and then they're just going after that but what they're missing is just because people aren't searching for a specific word doesn't mean that it's not important. Jeff: You shouldn't have it in there. Chuck: Right. Jeff: Oh yeah. Chuck: Or specific words within content that you need to have to show you're in authority even though people; the average Joe may not be searching for that. Jeff: Exactly right. And that is the funniest thing about to watch the evolution in this market. When we first launched four years ago everyone when they would see a list of topics; this is the most interesting thing I'll say today, four years ago they used to look at that list and go why isn't it sorted by search point? And I said because that's irrelevant to what we're trying to do here. We're trying to tell you what it means to write that golden article to be an expert. Why does it matter what search volume is because you're so ingrained to use volume and PPC competition which that's another story for another day; crazy. Why don't do it? By the way, I'm not correlative to organic competition. I can get into that in a second but they're so ingrained; heavily so ingrained to use search volume as their North Star. They want everything to have search volume next to it so they can sort by it. So if we sort by that and then you discredit the stuff on the bottom, that's bananas. You're thinking about this from a content strategy perspective or from an expertise perspective. And that's what we see time and time again. Fun fact and I think you've heard me speak about this; it's totally exploitable. If you see competitors who clearly take topic lists and sorted by search volume you can; we usually call it chopping down a tree, you can chop down the tree. Every time it works because they have this strategy gap. You can predict what they're going to do. You can also chop down the tree in areas where they have blind spots. They will never fill them because they're using search point as a North Star. And so another way to say it is stop using that four square; that volume competition, you've all seen it. Alright, let's try to find those low competition high volume words. Sure those are great. Lean into those but that's not the whole picture of how you should write your content. Because the last thing I'll say about this is if you have no content at one stage of the purchase cycle and you think that you're not at risk with having content at another stage you've got another thing coming. It's going to catch up to you. Someone is going to fill that. Somebody is going to fill those intent gaps and crush you. It's just common. And we see it with publishers that have been resting on the laurels of their powerful content. They're just getting their tail handed to them by real content strategies every day. Chuck: So what are some quick wins you think people can have? Like okay, I have a let's say a site about; I don't know, let's just say a general content site, you pick the topic. What are some real quick wins I can get? Jeff: I like to call them one-page plans. So I'm going to find a page of interest. So something that's special about my site and maybe it's a small collection of pages. This is my page that's for some reason it's special. It's really long form, it's beautiful, it converts very well. Chuck: Are we defining special meaning like it's already getting traffic or I just think it's pretty? Jeff: I like it and it gets me some KPI that I think is legitimate and is giving me value. So it could be traffic already. It could be rankings that I am already getting; it ranks for lots of words. So that's a signal of comprehensiveness. A quick win could be to look at what that page is ranking for and pick out the words; this is using SEM Rush; using that to pick out the words in that list that the page doesn't actually satisfy the user intent for rewrite those pages; quickest win ever. So that one-page plan I rank this; I'll use a great example. Content Marketing Institute; I love that site, they have a wonderful page on LinkedIn profiles. It dominates LinkedIn profile marketing. They also rank for marketing profiles, not very good. And the site; the page just covers LinkedIn profiles. It doesn't cover generally marketing profiles. So they could beam their other zoom higher and now cover marketing profiles in general and write about other marketing profile presences as a cluster. All boats are going to rise. So you do that exercise, a quick win every time. You can find it. We call them content mismatches or unaddressed intent plants; always a win. You can always find one on your site because you've probably got pages that rank for hundreds of things. No one page can answer a hundred things beautifully. So when you go write that page people are like won't that cannibalize? No. I mean [inaudible 00:43:23.2]. Do I have to explain myself no? Chuck: So the key there is again you've got that one page; it's linking for a lot of words, you've got tons of words, you'll pick out the few that it's not ranking well for and then you'll link through that keyword to a new article that is specifically about that content? Jeff: Or expand it if it's a fit. If it's not a fit writing new but the key is it's not just that it's not ranking. I mean if it's not ranking for that's important but it could be ranking reasonably but not satisfying like user searches for that on Google and then they land on that page and like this sucks this isn't what I wanted. So if that intent mismatched so can you correct that and improve the page or do you need to do that in a new creation motion? So that is a tried and true technique. That's a recycle, recycle, recycle. Inside MarketMuse you just press a button and it tells you those plans which make life a lot easier obviously but you can do it. It's just that manual labor to use that one technique. And if you ask me for a quick one it's always a quick one. Look for that hundred word or more ranking page, find the word that this; read the page. You'd be surprised how many content strategists and CEOs don't actually read their sites; it's amazing. Read the page, know what value it has, and does this page get people to achieve that value. It can also be done on the back end. Andy Crestodina who works at Orbit Media; he is an expert in Google Analytics and content strategy. He wrote a book called Content Chemistry. Inside his analytics book; parts of the book, it shows you how to do this in Google Analytics by looking at exit rate and engagement gaps. So you can do it there or you can do it from keywords or any other ways but those are some quick ones. Look at your worst exit rates. So many people don't break those down by; they don't cross-reference those two things. So they've got a page, this thing is broken it's 90% in exit rate. Go back to the words that are driving the users to that page. What if all of them are out of alignment? You can just flash the content double engagement overnight. So there's so many wins that you can do with just a quick one-page plan analysis. I like to say pick one you like, get started, put few wins on the board, prove it out, and then decide is this something I want to get serious with and invest in technology that can support it. Chuck: I got you. Now when I started first looking at your product a couple of years ago and seeing kind of the wonderful amazing things you were doing, it was at a price point where I actually kind of like when high price points because it keeps; on really good things it keeps other people from being able to do it. But I guess you just launched a new price point for a self-service. Jeff: Yes. It's actually something we've been looking forward to doing. And we are a mid-market enterprise large publisher; people who have really invested in content that's traditionally been our target market. Chuck: Could you give an example of some big players that you work with? Jeff: Yeah sure. I'm trying to think of who's on this site. G2 Crowd is a customer and they're on there; we work with divisions of the Walmart Corporation, Home Depot, large e-commerce but also just great publishers. Business.com; love them so there's a lot of people who are publishing content. A lot of people I can't name and I wish I could. But if you type in MarketMuse case studies you can find a cool example from Tomorrow's Sleep on that one and how their site grew from 4,000 to 400,000 in a year with their agency that works with us. So that was always a big focus of ours. It was make sure that they can write content. Make sure that they can update content, that they've committed; they actually believe content can get them there because then life's going to be a lot easier for everybody. But we then also said let's look at the mirror. I'm always about looking in the mirror and look at the demand that we have. And so we really looked at who's coming in the front door saying we want to be MarketMuse customers. And right now having made that case internally or I just I'm not a profile of a customer that can spend tens or in some cases hundreds of thousands of dollars on software. And so what we did was we right-sized for a specific target market, we right-sized a self-serve offering. And there is also a trial experience that everyone who's listening can go to the site. Go to MarketMuse trial. Go to MarketMuse, see the trial and you'll get an experience with your data; we've actually set this up so you can use your site, optimize a page, create a content brief, update some existing content like I mentioned, get that content brief and then there's also a special workflow baked in there that'll amaze you that I'm not allowed to explain but you'll see it when you get there. But you can do a competitive analysis, you can update a page, you get a content brief; by the way, take that with you it's free and make that decision of whether you want to become a MarketMuse Pro customer which is our self-serve offering at 499 a month. Quiet Light Brokerage Podcast listeners have a promo which Chuck will include in his notes which gets you a discount there. Or if you're a larger team, if you have four writers, if you write 10, 15 articles a month it's going to make more sense for you to be in one of our other packages; a bronze, a silver, or a gold, or a higher offering. So it gives you an understanding about the value that we provide, the opportunity to buy, to see if that's a fit, or to immediately recognize oh gosh this is what I need for all of my content items. I need one of the larger offerings. So the experience we typically is that people find the right car on the lot. Or they begin using and saying oh wow I need more of this. I was successful with the first thing I did. I know this makes sense. Making your content higher quality, that's the fun part about being in Market Muse; it's you never look at it and you're like oh man I wish I hadn't made that page better. You're always on this ongoing quest to do a better job, write better content that resonates more with your audience. And that's what we do every day. Chuck: Awesome. So to wrap this up I always like to ask people could you give us a few random tools not really related to what we're talking about but just things you like to use in your daily work or just regular life. What are some of the hacks you may have? Jeff: Man, there's so many. I love this. So a couple that I use, when I had some personal time management issues I tried everything. I tried boards with; con bomb boards and everything. And one thing that helped me analyze where I was spending my time was called Tomecular and it looks like an eight-sided dice and you put stuff on it. And as you're working on stuff you move the dice around and it seems so; maybe it's because I like touching things like that but it really gave me an understanding about where I was spending my time and I fixed some stuff within MarketMuse like the business organizationally just from that information. So that's cool. I love Boomerang. I think it's a beautiful solution for making sure you don't forget stuff if you get a lot of e-mails. It's a really good productivity tool. Chuck: Before you move on from Boomerang I think Google now have something similar built-in where they have the… Jeff: They have don't let me forget this. Chuck: Yeah. It's like a little reminder you can set for different dates and it comes back in. Jeff: Yeah. Boomerang has some features that I'm so used to being able to set and forget things pause so I don't know if Google's ever going to pause Google so that's something that, but I like Boomerang. It's not that expensive. You do need to watch your SaaS subscriptions though. That's another story. Another one I love, love, love, love is Full Story. Full Story isn't; they keep going a little bit a little more expensive each time you look at them. Good for them. It's like having a DVR on every user that ever comes to your site. You can watch the experiences; obviously anonymized but you can watch their experiences, build pattern matching, look at segments, and really get an understanding about why people are doing things. I mean I think that that's really valuable. Chuck: It's kind of like what is it Crazy Egg? Jeff: It's similar to a Crazy Egg but it's more of like a heat map reporting. They've got this capability and a handful of other solutions that are out. I just think Full Story has this like really robust like I can go in and I can find users that went through this specific sequence and just watch all the sessions. I mean so many times. Just learn from that to really tell a story and it really is powerful when you are already doing a new multivariate testing to really catapult that into the next level. I mean if I told you what conversion rates we have you'd blow up. But yeah I mean you really have to think critically and fly the flag of your customers so that when you do get these solutions they don't just sit on the shelf. I mean my goal every day is to make sure that the next article that every one of my clients publish is more successful than it could have been without us. And I think that comes through in our online messaging. It's not just that we're this secret weapon of the elite agencies which I know for a while that's what we were. It's that if you use MarketMuse your stuff will do better more consistently and then I will be happy. And if it does not happen then I and our entire team will not be happy. And we hope that our messaging comes through and we couldn't do it without these other solutions that we work with Full Story, like Pendo; Pendo is a beautiful thing, and some other metrics, some other things we use to really dive deep into our customer experience. Chuck: Awesome well I appreciate you taking the time to talk with everybody today. Is there a way that people can reach out to you or the company? Jeff: Yeah, absolutely. So MarketMuse.com, Chuck's going to post a promo code that's for the MarketMuse Pro self-serve offering as a discount. You can email me directly Jeff@MarketMuse.com, Jeffrey_Coyle on Twitter. I'm pretty active. LinkedIn, please. I typically don't say no unless you've sent me a weirdo request that tells me in an unreal way that you like my profile and you'd love to connect. If it's clear that you bought or sold a website before in your life I'm probably going to connect with you and want to talk in any light. So yeah please reach out and go check it out. We have a lot of content. I have a lot of; this conversation is like this throughout the web that I think can really level up your game and give you the ability to assess deals quickly without just hunches. You got to go with your hunches but it's nice to have hunches and data. Chuck: Yeah for sure. And a quick pro tip from me, if you're trying to get somebody to accept your LinkedIn profile and they don't know who you are, write a message. Don't just send the like later. Personally, I feel like if I've LinkedIn with somebody and I'm connected then I'm somewhat vouching for them so I don't just accept random LinkedIns. Like, everybody, I've accepted for the most part are people I've actually met in person. But then we go to these conferences and somebody sent me a request and I don't remember them so it's like just send a little message with them, take the two seconds to write. Jeff: Yeah, and make it from the heart. We can smell of that. Come on. I think MarketMuse is cool. Oh really do you? I do too. So I guess we are connected I love the thing but you know. Chuck: There you go. All right well I appreciate your time and thank you, everybody, for taking the time to listen and see you soon.   Links and Resources: MarketMuse MarketMuse coupon code (mentioned in the podcast): QLBMM Email Jeff Twitter LinkedIn

My guest today is IT consultant and author Jeff Sussna. Jeff's liberal arts background has given him a unique perspective on digital transformation. In this episode, we explore the relevance of cybernetics to today's complex design and DevOps challenges. Listen to the full conversation https://theinformeddotlife.files.wordpress.com/2019/08/the-informed-life-episode-15-jeff-sussna.mp3 Show notes Sussna Associates @jeffsussna on Twitter Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation by Tim Brown Norbert Wiener Dark Hero of the Information Age: In Search of Norbert Wiener, The Father of Cybernetics by Flo Conway and Jim Siegelman Cybernetics: or Control and Communication in the Animal and the Machine by Norbert Wiener The Human Use of Human Beings: Cybernetics and Society by Norbert Wiener Lean startup Agile software development Mutual Causality in Buddhism and General Systems Theory: The Dharma of Natural Systems, by Joanna Macy Claude Shannon The Net of Indra Ranulph Glanville Designing Delivery: Rethinking IT in the Digital Service Economy by Jeff Sussna Read the full transcript Jorge: So Jeff, welcome to the show. Jeff: Thanks for having me. It's great to be here. Jorge: For folks who are not familiar with you and your work, how do you describe what you do? Jeff: Well on a basic mechanical level, I founded and lead a consulting agency in Minneapolis. Our focus is helping organizations learn how to move fast without breaking things, and we do that through the entire digital product lifecycle from design through product management all the way to development and operations. It's about bringing together agile and devops and design thinking. We do coaching. We do workshops. A lot of it is about helping people understand: what are we really trying to accomplish when we do things like agile? I go into a lot of organizations where they do scrum for example, and they may do it reasonably well, and they have a bunch of agile activities going on but they're not necessarily really getting where they want to go. And typically that's because they don't fully understand where are they supposed to be going and how is agile supposed to actually help them get there. And it's interesting because the way I got there was actually a somewhat unusual path and I think that that path and how it's gone along really informs my work and my approach to my work. Jorge: I am not familiar with your backstory, so you've said that and now I'm completely curious. Jeff: That was intentional. I figured I'd give you a chance rather than just rambling on for 20 minutes give you a chance to say, “Now would you like to ramble on for 20 minutes and tell us about your background?” Sure, so my background is actually liberal arts. I studied visual arts, anthropology, and political science in college and one day my advisor suggested that I should take a class that had absolutely nothing to do with what I was studying. And so I took an artificial intelligence programming class. This was back in the early 80s, the sort of first or maybe second golden age of AI. And I became captivated both by that but more so programming and and system programming. And I graduated from college and managed to worm my way into the software industry. I've been there for the last 30 years. I've built systems. I've led organizations across the entire development, QA, and operation spectrum. But I always had this background of being in artsy liberal arts person. And I found myself thinking about things a little bit differently and I can never put my finger on it until I read Tim Brown's Change by Design book, which is a popular introduction to design thinking and went, “Oh, that's it! That's me. That's how I naturally think about things.” At the same time, cloud computing was starting to come about. And when I put those two things together what I realized is that service — because we were talking about it as a service and software as a service and things like that — service and the human-centered design that's part of service is really at the heart of everything we do. And so that's really been behind my approach to my work ever since then. And one of the things that happened when I was in college and I was reading about artificial intelligence and playing with it was I read someone, some little paragraph somewhere, about some guy named Norbert Wiener who back in the '40s had invented something called control theory that was peripherally related to AI. And I kind of went okay, that's interesting and didn't make much of it and went about my business. And then about five or six years ago, I happened to be in the library one day and I saw a book called Dark Hero of the Information Age, which was a biography of Norbert Wiener. I thought, “Oh, I remember that guy, you know, I should check that out. I should find out more about him.” So I read it and I was instantly captivated. And I was introduced to this world of cybernetics, which was the thing that he was really responsible for. And cybernetics is really interesting because it was a very big deal in the '40s, '50s, and into the '60s. Wiener wrote a book about cybernetics, which is about 50% post grad level math, you literally can't read it unless you're unless you're a math major. But from what I've read apparently in the '50s every single college student in America was walking around with a copy of that book under their arm. So it was a very big deal and then for a variety of reasons it fell out of favor and disappeared and was completely forgotten. The irony is that anytime that you say a word that begins with cyber — you know cyber-terrorism, cyber-security, cyberspace — the cyber comes from cybernetics. And cybernetics is really at the heart and the origin of computing and actually the heart in the origin of information. When we talk about information architecture, information theory, we have to talk about cybernetics. And it gives kind of a different flavor to what information is and how we work with it. So what is cybernetics? Cybernetics is the idea that in complex systems — particularly the kinds of systems we find in the natural world and in the social world, whether it be cities or economies or companies or markets — that control has to be adaptive. It has to be based on listening and responding as well as just telling people or things what to do. If you think about the most basic cybernetic device, it's a thermostat. A thermostat doesn't actually control the temperature of the air in the room directly. What it does is it, you could say that it listens: it detects what the temperature is, and it detects the fact that the temperature isn't what it's supposed to be, and then it tells the furnace to do something about it. And so the furnace pumps warm air into the room the room warms up, the second law of thermodynamics kicks in the room starts to cool down again. The stat goes. “Uh oh, things aren't as they're supposed to be! We better do something about it.” So you could say that the thermostat in the furnace have actually no control whatsoever over the temperature of the air in the room. Only the second law of thermodynamics does that. But they're continually having a relationship where they're adjusting things. And the way that works is based on a principle that Wiener developed or identified called feedback. And we use that word all the time. But feedback has a very specific meaning which is information about the gap between actual and expected. So if the thermostat is set to 72 degrees and the temperature in the room is actually 71 degrees the thermostat gets some information that says well, it's one degree colder than its supposed to be. So we have a tendency to think about information as the thing, right? We architect it, we store it in databases, we pass it back and forth. But from a cybernetic perspective, information doesn't have any real meaning aside from the context in which it's happening. And its purpose is not just to be a thing its purpose is to help you understand what it is you need to do. One of the things that I learned from studying art and also to some degree from my own just kind of life is that mistakes happen. Things don't always go the way we expect them to. And that's perfectly fine. That doesn't prevent us from getting to a good place if we can have kind of a dance, and to some degree give up the idea that we're fully in control, and instead have a relationship with our world of, “What is it that you're telling me and what do I need to do based on that?” So it's much more relational. I think that companies are beginning to discover that. The reason they're reaching out for things like agile is that they're realizing that they can't control the markets anymore the way they used to, so they have to have the ability to understand and respond to situations — environments — over which they have less and less control and ability to predict. Jorge: You talked about Wiener's book and how fifty percent of it is college level math, and that brings to mind the the idea that some of this stuff can be complicated for folks. And hearing you describe it in this way, it sounds more accessible than other introductions I've heard before to the subject — and more relevant. I'm hearing you say that and thinking, “Yeah, definitely.” I mean that maps to my experience of reality; the fact that if you're going to act you have to get a read on your surroundings and then you must have some kind of model where there's an objective that you're going towards and you need to somehow compute at some level the difference between where you are and where you want to be and adjust your direction. So the question is, when presented at that level it is kind of obvious. Why do you think it fell out of favor? Jeff: Well, part of it was Wiener's fault. He was a very eccentric person. And well, let me take a step back first and say that that Wiener's first book was called Cybernetics: Communication and Control in the Machine and the Animal. That's the one that's full of math. He wrote another book called The Human Use of Humans, which is much more accessible and it presents the concepts of cybernetics in a much less technical way. The amazing thing about it is it also predicts many of the trends that we're seeing now in terms of the dangers of computer-centric society. It's quite an amazing book given that it was written something like 60 years ago. But aside from that, I think the reason it fell out of favor was to some degree because it's too simple and too elegant on a very simple level. I think that part of it is that basically what it's talking about is circular causality. If you really kind of go beyond the surface of just well, we have a thermostat, we want to control the air if we talked about your example of I have an objective and I need to make sure I get to my objective, the real implication of cybernetics is that you're also adjusting your objective. Right? If you look at things like Lean Startup and the whole idea of a pivot, right? Step one of Lean Startup is let's make sure that we're accurately getting where we want to go. But Step 2 of Lean Startup is let's make sure we're trying to get to the right place. That is not exactly a 20th century Western approach to thinking about things. There's been interesting things written about the relationship between cybernetics and systems thinking and more kind of Eastern philosophical approaches. So I think, to be honest to some degree, it just blew people's minds and the world wasn't ready for it. And what I'm seeing now is that maybe the world is starting to get ready for it. It is beginning to be sort of culturally resuscitated again and people are starting to become interested in it again and going, “Oh, maybe there's actually something here.” Jorge: I am very intrigued by this notion of the relationship between systems thinking and Eastern philosophy. You have written very compellingly about this, and I'm wondering if you can delve a bit more on that connection. Jeff: Well, that's a big one. Well, there's… I'll actually refer to a very interesting book by Joanna Macy called General Systems Theory. Now I'm not remembering the name; it's something like Buddhism and General Systems Theory. And she is a system thinking practitioner. She's also a Buddhist teacher and practitioner. And she talks a lot about the Buddhist view of interdependence, which on one level means that the reason that you and I are here now is because of a whole set of things that happen that brought us to this place. You know if if Wiener hadn't thought about feedback systems and if Claude Shannon hadn't figured out how do you transmit feedback reliably in a noisy channel there would be no such thing as information Theory there would be no such thing as computers. There were no such thing as binary logic there would be no such thing as Zoom you and I wouldn't be sitting in different cities talking to each other. So on one level it means that the causality behind what you and I are doing right now is much richer and much larger and much more complex and intertwined and tangled. So to some degree your karma and my karma and Norbert Wiener's and Claude Shannon's karma are all intertwined with each other. On another level and a deeper level what it means is that when I think about myself and who I am that is defined as much by my relationship to you and my relationship to Apple Computer who made the computer that I'm using as it is my idea of who I am internally separate from the world. That this whole idea of you and I and the other things that we see around us is being fundamentally separate from each other is according to Buddhism A) an illusion and B) the cause of suffering — because it is an illusion. So you could say that you caused my experience and I caused your experience as much as each of us causing our own experience. So there is a circularity to how and why things happen, which is a very Buddhist view which comes very much out of an Indian tradition and very compatible with a cybernetic view. Particularly when you go beyond this idea that cybernetics is just about, “How do I control things out there?” and the notion that what it's really about more fundamentally is, “How is it that I dance with this relationship that I have with the world where myself and my environment are creating and driving each other?” Jorge: The image that comes to my mind hearing you describe this, which is an image that I believe comes from the Buddhist tradition, is this notion of the Net of Indra, where there are jewels that are all interconnected and all the jewels reflect the other jewels and you can't intervene in one of them without impacting the others. And in this notion of systems thinking, one of the distinctions I make between that worldview and other approaches is that you're taking in a holistic perspective — as holistic a perspective of the situation as possible — whereas if you contrast it in a more reductionist approach, where we try to divide so we can control. It is a completely different approach, and I'm wondering — just because this subject can get fairly abstract fairly quickly — if there are ways that that impacts your approach both to how you do your work and perhaps the work that you do for clients? Jeff: Very much so. And it actually has very practical down-to-earth ramifications both for IT and also I think for design. One of the things that we've begun to learn in IT is that as we go to the cloud, the systems we manage become more complex. Which means that the parts become more and more intertwined with each other and I think actually the Net of Indra is a wonderful metaphor for that, where it's no longer possible to say, “Well there's a database over here, and there's a network over here, and we have an ERP application over here, and a website over there, and they're all independent from each other, and we can manage them separately.” It doesn't really work anymore; they all impact each other. And one of the practical ramifications of that is that when things break, what we typically try to do is to find the “root cause.” What is the one thing that was the original source of the problem? And in complex systems, you can't actually do that. What you find are contributing causes. That the problem happened because of A and B and C and D coming together. And if any one of them had not happened or happened differently or happened a little slowly or happened at a different time of day either the outage wouldn't have happened or it would have been more or less severe. And this perspective is actually really influenced by work that people have done in industrial safety systems, people who work on things like looking at airplane accidents, nuclear power plant meltdowns, that kind of thing. And they've been discovered for they've come to realization seems like this whole idea of identifying human error — the train conductor, the train driver fell asleep, that's why the train crashed therefore we need to automate the train and get rid of the drivers — that that doesn't actually work. That you need to take a much more holistic perspective on how all of the pieces fit together. Why did the train conductor fall asleep? Well, there are lots of technical reasons, there are political reasons, there are bureaucratic, financial, so on and so forth. And you have to look at them as a whole, and you have to understand that when you fix one thing, you cannot fully predict what changes will ripple through the system. So you might fix one thing a break another, and you there is no way to guarantee that you won't do that. I also think that has very profound implications for design right now, because design is going through this process of grappling with ethics. That we thought Facebook and Twitter would be the most wonderful thing in the world, and what's happening instead or in addition, perhaps, is that they are enabling manipulation of democratic processes and online hate and bullying and so on and so forth. And there's an idea that as designers, you have a responsibility to design systems that don't cause harm. The problem is that what you're trying to design are very, very complex systems and on some level, while it's important to think in terms of doing good and not doing harm, I think you also need to confront the inevitability that you will do harm on some level that there will be unintended consequences. And what's more interesting — and to me where the cybernetic approach comes in — is you could say that doing harm is is a very compelling version of there being a gap between actual and desired, right? We wanted to build a system that would help people collaborate better and instead we built a system that's starting to help people dislike each other more.Let's assume that's going to happen and let's look for it and let's design for it in a much more continuous way. Jorge: We're recording this in the second week of July. And I bring up that that time stamp because next week, we will be celebrating the 50th anniversary of the lunar landing, which in my mind is kind of the apex of big pre-planned projects. People refer to things that are hard to do as moonshots. Hard to do but achievable, right? And because this is happening next week I've been watching documentaries and reading books and listening to podcasts on the subject — I'm just fascinated by it. And one of the things that's come up over and over again is that the people who are a part of that project, many of them have expressed the belief that they would not have been able to successfully land people on the moon if Apollo 1 hadn't catastrophically burned in the launch pad. That accident was kind of a jolt that the program needed to bring up all these flaws that they had not accounted for. And they completely redesigned the command vehicle as a result of that happening. And unfortunately if three astronauts hadn't died in that accident, they probably wouldn't have had the shock to the system that the system needed in order to — pardon my French, to get their asses in gear, basically. Jeff: Well, that's a pretty provocative statement. Jorge: It's not mine. It's… I was very surprised to hear that, but it's a feeling that I've heard expressed several times by these folks that the accident is what actually got them to the Moon. Jeff: So that's a very interesting… It is a provocative statement, whether it's yours or not, and I'll give you a couple of responses to it. The first one is that one of the things that I think is mostly healthy — there is a little misunderstanding — is the whole idea of moving fast and breaking things is being met with new skepticism. Right? My business is predicated on the idea that it's possible to move fast without breaking things. And I teach people how to do that. I think the way that you do that is that you break things in much smaller units and much earlier in the process when it's safer to do it. I am certainly not recommending that doing things where people die as a learning mechanism is a good thing. However, I will go out on a limb. I had some things happen in my life when I was younger, which, looking back, felt like potentially large failures at the time. And when I look at what happened as a result, my life got tremendously better as a result. One of which was that I had cancer when I was 20 years old. I was at college, I'd been having my first year in college was sort of a mess. I'd gotten my act together; I was doing very well. I was very happy. I got very sick. I left college. I went home. I went through chemotherapy treatments — this was back in the early '80s when chemotherapy was really awful — I spent time in the oncology wing of the University of Pennsylvania hospital, watched a lot of people die from leukemia, face the prospect of my own death. It was the best thing that ever happened to me. It gave me a level of sort of resiliency in my life. And it's funny because you know at some point they said, “Okay, you're done with your treatment, you're in remission. Now, you can go on with your life.” Two weeks later, I was back in school. People were kind of freaked out like, “Who is this guy?” And, “He was gone and now he's back. And what does that mean?” But it was a it was a very positive thing for me and one of the things I've learned is that, you know, we have this idea of well, “Fail early, fail fast.” Is it really good? What we really want to do is learn. And it is true that what we really want to do is learn, but I think we have to deal with the fact that one of the ways we learn is by failing. By getting it wrong. Jorge: I hope my comment about the astronauts didn't come across as callous. I don't think that anyone involved in that program, from what I've heard them say, I don't think any of them wished for that to happen, much as what you are relating is an experience that fortunately, I've not had myself but I've read of folks saying, “You know, I almost died and it was the best thing that happened to me.” Because somehow it forces the… It's like a focusing force, right? And you're talking about learning, which as I understand it, an important part of systems thinking and cybernetics, right? This idea that you're adjusting based on feedback. There is implicit in that the idea that the system is somehow modified as a result of of the adjustment. And I'm wondering, just to bring this home to folks, if there are any mechanisms that you yourself use to either formalize that learning or to capture it or to integrate it into your life in a kind of a structured way? Jeff: I think it's a couple of things. One is I like to joke that I should offer a fixed fee consulting service where all I do is walk around your organization and say the same sentence over and over again, which is, “Make your work smaller.” Give yourself more opportunities to get feedback, to learn, to find out that you're wrong in smaller and safer ways. I think the other part of it — and this is one that I think that organizations that are trying to adopt agile and design thinking and DevOps and Lean Startup and so on and so forth really struggle with — is it requires a certain level of trust. Ranulph Glanville, who was a designer and a cyberneticist made a really fascinating comment when he said that the controller is controlled by the control. In other words, if you think you're in charge, if you think you're in control at whatever level, you're really not. And I think that the more that we can let go of thinking that we are and also thinking that we need to be, the more we can discover that we can actually get where we want to go in a way that feels sloppy but can be very efficient. I'll give you a straightforward example from my experience. The first time I worked with an offshore and group doing development, I was told by the US representative as I started the project, he said you have to give them a really good requirements. I said yeah, I'm good at that. I know I'm a good writer blah blah blah. And of course, I was way too busy, so I gave him really lousy requirements. Kind of poetic. And the initial version of the software they gave me was about 70 degrees off from what I wanted and I got really annoyed for about five minutes and then I realized you know, it's my own fault. You know, if you look at the requirements I gave them, you could imagine how they would get the result. So I sent them this long laundry list of everything that was wrong. And 48 hours, they came back with something that was 20 degrees off from what I wanted. So I sent another laundry list, 24 hours later it was about 3 degrees off. In other words, it was really good. And afterwards, I sat back and I thought, “Okay, well, how long did the process take? How much work did it take? And how good was the output?”” And I realized it was really good and it was really fast and it was really efficient. It felt very sloppy at the time but it actually was very precise. And I realized that this was a very powerful way of working and it was really at the heart of what agile was actually about: that you can get where you want to go if you have uncertainty about that in a way that feels very bumpy, but if you can relax into it, it can be extremely effective. I think the relaxing into it is really hard for all of us. Jorge: I agree … Jeff: So if you wanted to say it in a nutshell what cybernetics is about at its deepest heart. I think it's about working in smaller units and relaxing into it. Jorge: I love that Jeff. That's that's actually a great place to to wrap it up. We didn't get to your book, but I do want to call it out: you wrote a fantastic book for O'Reilly called Designing Delivery, which is about these subjects. And I am going to link it in the in the show notes. Where can folks follow up with you? What's the best place to send them to? Jeff: They can find me on Twitter at Jeff Sussna or they can find me on my company website at sussna-associates.com Jorge: Fantastic, so I'm going to include those in the show notes as well. I am thrilled that we had the opportunity to have this conversation. I think it's a very important subject and I hope it's not the last time that you and I get to catch up on this Jeff: Agreed, this has been great. It's been really enjoyable. Thanks a lot. Appreciate it.

The guys talk about the television they’ve been watching so far this summer, including American Ninja Warrior on NBC, FX’s Pose, American Masters: Terrence McNally: Every Act of Life on PBS, Grand Hotel on ABC, Good Trouble on Freeform and What/If on Netflix. Jeff reviews In Case You Forgot by Frederick Smith & Chaz Lamar. Jeff interviews Roan Parrish about Raze, the latest book in the Riven series. They talk about the research she did for the series, including going on tour with a band, as well as the eclectic music she enjoys. The origin of Roan’s collaboration with Avon Gale is also discussed along with what got Roan started with writing gay romance. Complete shownotes for episode 196 along with a transcript of the interview are at BigGayFictionPodcast.com. Interview Transcript - Roan Parrish This transcript was made possible by our community on Patreon. You can get information on how to join them at patreon.com/biggayfictionpodcast. Jeff: Welcome, Roan, to the podcast. It is so great to finally have you here. Roan: Thank you. I'm so happy to be here. Jeff: And it's a perfect opportunity because just last week, you released raise "Raze," just the third book in the "Riven" series. And for those who don't know, tell us about the series and, of course, this latest installment. Roan: Sure. So "Riven" starts out with the book, "Riven," also the series title. And it's kind of an anti-rock star romance. It's about Theo, who's the lead singer of the band, Riven. And they've suddenly hit it big and are super famous. And everyone in the band loves being famous and their success. And Theo hates it. He hates being famous. He hates being the center of attention. He hates, like, people knowing things about him or looking at him when he leaves the house. So he loves the music, but he finds fame, like, the worst thing ever. And so he's about to go off on a new leg of the tour and is sort of, like, wandering the streets of New York, feeling a little bit sorry for himself. When he hears this song coming from a bar, like, someone just strumming guitar, and it's one of the most beautiful things he's ever heard. So he goes in the bar to see who's playing this or what the song is. And he meets Caleb, who is the one playing the music. And Caleb, we learn later, has been a musician for a long time, a working musician, but has sort of gone away from the scene and hidden himself away in his uncle's house out of town because he's had some addiction issues, and he's trying to stay clean by staying away from everything that reminded him of the scene, including music. So they start to talk to each other and they bond over music. And then little by little, they fall in love. The problem being, of course, that for Theo being in the scene and being public is kind of part of his thing. And for Caleb, everything about that just brings back a lot of bad memories. So they have to sort of work together to figure out how that's gonna impact their relationship and if they can get through it. And then it kind of takes a hard left, I feel like this is the thing that I should say for people who haven't read the series, is that the series really does hang together. It has the same secondary characters. It deals with a lot of the same themes, like, the themes of ending up someplace that you never thought you would be. But then in book two, we met Reese, or we've met Reese in book one, but we have a book about Reese who was Caleb's best friend and Reese's husband, Matt. And Matt has nothing to do with the music scene. And the book is told from his perspective. So for people who go in expecting that the whole series is about music, it is in some ways, like, music as a through line. And certainly, this idea of fame and this idea of struggling with fame is a through line. But book one is sort of anti-rock star. And then book two is like working musician and person who's not involved with music at all. So I feel like that's the thing I should say. Jeff: Well, they it does hang together because you've got the working musician. Roan: Yeah, totally. And Reese, who is the working musician is someone who toured with Caleb when Caleb was still playing music. So the characters all hang together and the series hangs together, but it's not a kind of musician book, if that make sense. Jeff: Yeah, that makes sense. Roan: And then "Raze," which is book three, it also hangs together. "Raze," it's similarly about characters ending up someplace that they never thought they would be. And in this book we meet Huey, who was in the first two books, and has been a sort of a little bit of a shadowy figure who we never knew his backstory, we didn't know who he is, he just pops in and dispenses wisdom, and pops out again, he doesn't say much else. And so he was Caleb's sponsor in Narcotics Anonymous. And he's still been working as a sponsor. And he is so used to taking care of everyone else being a sponsor, helping people work through their own addiction issues, dealing with his own, that he doesn't really ever focus on his own life. He's built up this kind of wall of focusing on everyone else, so he never has to think about himself. And we meet Felix, who is doing the same thing, taking care of everyone else but him himself, but through his family instead of through NA. So he grew up and help take care of his younger brothers and sisters, and always helped his sister get whatever she wanted, and has now found himself as his sister goes off to do her music thing, found himself kind of like, "What the hell am I doing with my life? Who am I? I kind of forgot to ever notice what I wanted." And so the two of them come together. And two people who are so used to looking out for everyone except themselves, as you can imagine, when it comes down to trying to make a relationship, they kind of don't know how to do it. They don't know how to ask for what they want. They don't even know what they want from each other. And so feelings kinda bubble up and nobody knows what to do with them. And then it ends really happily. Jeff: As all romance must. Roan: That's a must. And there's even a kitten. So, yeah. Jeff: What attracted you to writing this series? Roan: I think that there's themes that go together. I love music. And I've always been a huge music fan. And one of the things that I've always thought was interesting is that music is so personal, to me, anyway. And I know for many other people, like, each of us, listens to music and feels something - has associations that are deeply personal. And something about the weirdness of something so personal, experienced on a large scale of fame has always struck me as really odd. So you can be at a concert with the band and have thousands and thousands of people there. And each person has been hit with his music in a really personal way. And yet, we're all there together in a super public space, having kind of a personal experience, like, smooshed up together with each other. And I've just always found that really strange. And I know for people who make music, the process of making music is really personal. And it's really different than the process of performing music. And so I think I was interested in what would it feel like to do something really personal in front of a lot of people and then watch as this thing that you've made gets loose on the world, and you no longer have any control over it or what people think of it. And to me being famous seems like absolutely the worst thing I can imagine outside of, like, actual torture. And I know that for some people, that's not the case. But, yeah. So I was interested in writing, like, the genre of rock star romance is a thing. And I was interested in looking at it from the perspective of what would a rock star romance look like, if instead of rock star being a desirable thing, it was a terrible thing or a thing that caused a lot of problems for the rock star. Jeff: What was the process around some of the research, because, like, you talk about this very personal thing. How do you research that? And then how do you try to read and put it in a book so everybody else gets it? Roan: You know, I mean, I don't know. I can't really claim that I did it correctly. I've never been a musician. I like singing karaoke to Paula Abdul once with five other people very drunk in college. And that's about my performance level. But my sister-in-law, my sister's wife is a musician. And she's very personal and writes very personal music and then performs it. And, you know, I've been to many of her shows, obviously. And I went on tour with her in Europe once, like, carrying her stuff and hanging on for the ride. And one thing that struck me was, like, people would come up to her after the show and tell her like, "Your music has meant so much to me. I was going through such a hard time and your music spoke to me in these really hard moments." And so I would see that and I know that people are having these personal responses and have personal relationships with the music. And I know that my sister-in-law does as well. And then, like, the moment that the two of them would be having together would be personal. But there was still this whole performance element that I kinda…yeah, just seems like a very strange crucible of the personal and the public smooshed together, and maybe the performativity of that, in some way, like, hides the personalness…or not hides necessarily, but, like, you need a little bit of distance, like, the lights and the smoke machine, and the darkness, and the space between the stage and the crowd to insulate you a little bit in order to take something that's so personal and project it out in public. Jeff: I love how you kinda had the personal research going on there that you actually went on this tour and got to see all of it kinda go down about as close to it as you could without being the actual performer. Roan: Yeah, yeah, which is awesome. And I mean, like, I've had many friends who do music. So I knew that if I had, like, specific questions, you know, I had some questions about, like, the studio stuff and how you laid out tracks that I was able to ask friends about. But I really do think it's, like, the feeling of performing that I was trying to capture and the sense of what it felt like to have something that was yours, like, the music, and then watch other people make it theirs. And although I've never been a performer in any way, I mean, that's a little bit, like, what happens with books is that I sit at home in my pajamas, like, with cat hair all over me, and I write these books. And then when they're published, it's not mine anymore, it belongs to the people who read it. And I don't really have any control over it. So that part was easy to kind of understand. Jeff: Of course, you mentioned your love of music. And your bio actually mentioned that you listen to torch songs and melodic death metal. Now, I get eccentricity because my playlists are, like, wildly, you know, strangely hooked together in some way. But these two seem very different. What attracts you to these two individual styles? Roan: I think I was trying to write my bio in a way that was, you know, like on dating sites, you wanna say the two things that seem most opposed. So you can be like, "Listen, this is what you're getting as a human being who is essentially at odds with himself," maybe that's just me. Anyway, yeah, I love both of those genres. I think they're both simultaneously really raw and really beautiful. Like, torch songs, I love because they are heartbroken, and tender, and they tell a story, and they're so vulnerable, and beautiful. And melodic death metal is like, doing the same thing, only it can't be vulnerable, or, like, it needs a really harsh bass riff, and loud guitar, and loud drums in order to do something that's that tender and that personal. And I find not like screamy death metal, but yeah, melodic death metal. I find it like one of those puppies that growls at you until you get a little bit closer, and then little by little it sorta lets you pet it. And then by the time you're petting it, it's like, "Oh, no, I really do love this. Please don't ever stop petting me," but then, like, someone else walks in the room and they're all growly again. Jeff: I love that analogy. So awesome. Jeff: Now, speaking of music, with the "Riven" series seems such an obvious thing to perhaps you write to music if you're a writer who does that. Was there a particular playlist that sort of pushed you along in the writing of the series? Roan: You know, I actually didn't listen to music at all writing the series, which is sort of strange when you say it like that. I go through phases of whether I like to write with music on or not. And there have been books that I've written where I listened to the same music over and over. Like, when I wrote...what book was it? Oh, "Out of Nowhere," which is the second book "In the Middle of Somewhere" series, I listened like obsessively to "The Civil Wars" just over, and over, and over. And for some reason, the mood of those albums was, like, exactly the mood that I needed to be in to write that book. But with the "Riven" series, I didn't listen to music at all. Jeff: Interesting. Okay. Roan: Yeah. And none of the music in the books is real. Like, I made up all the band names and all of the music. And I wonder if maybe part of it was like, I didn't want real music in my head because I was making it up. Jeff: That would make sense. Yeah. If you're having to write any kind of song lyrics or anything inside the book, I could see where you would wanna, like, accidentally just pick up something. Roan: Right. Well, it was super adorable actually because one of my best friends who reads all my stuff first is, like, she likes music a lot, but she's like a top 40 radio kind of tastes music person. And so she thought that all of the musical references in my books in the "Riven" series were real, because she knows that I like lots of different kinds of music, and she just didn't know that they were fake at all, which is totally adorable. Jeff: Oh, that's awesome. So you could have an extra career then as a songwriter if you're writing lyrics. Roan: Maybe a band-namer. I like the band names more. Jeff: So I have to ask for the audio book then that you've got song lyrics - does that mean your narrator is actually singing the lyrics? Did you make Iggy sing and Chris sing? Roan: No. And, you know, I don't think that I have a chunk of lyrics long enough to be sung. They're like a couple snippets. But I didn't even think about the fact that I could have written a song of it for the audio book. That would have been awesome. Too late. Jeff: Something to think about maybe for a future book or another installment in the series. Roan: Yeah, yeah. I could do it as like an extra or something, I guess. Jeff: And speaking of the series, is there more to come in this series? Roan: There's not. Like, The Good Place that we were talking about earlier, I have decided that book three is the end. Jeff: Okay. Time to wrap up that universe. Roan: Yeah. And, you know, I say that and obviously maybe I would go back in the future and write another one. But I think the fact that the last book is about a character whose story we've kinda been wondering about for the whole series, it felt like a good place to stop because it's sort of the wrap up of, like, solving the last interpersonal mystery. So that felt like the right place to stop. And there are definitely tendrils. Like, people who've read a bunch of my books will notice that Riven, the band, is mentioned in another book, and that some characters from the "Middle of Somewhere" series are briefly alluded to in "Riven." So there's, like, little Easter eggs for people who have read all the books because I sort of think of everything as being connected in that way. So it'll pop back up, I'm sure. Jeff: I love that. I love the broad interconnected universe thing. Roan: Yeah, yeah. Secretly in my head, all of the books are connected in lots of ways that I don't necessarily put on the page. But, like, I like to get a couple in there. Jeff: Nice. Now, you also co-write with Avon Gale. What got that collaboration going? Roan: You know, that collaboration happened completely by accident, or on a whim, I should say. And I'm so glad it did. So I was living in New Orleans a couple years ago. And Avon and I were friends on the internet. And she offered when I was moving back from New Orleans to Philadelphia, she was like, "I love a road trip. What if I fly to New Orleans and drive with you," because it's a many day drive and you have a cat. I had like my truck and then I had my car hitched to the back of the truck, and it was a whole big thing. So I was like, "Oh, great. This will be fun." So we started driving from Louisiana to Pennsylvania. And it was, like, a torrential downpour. And we couldn't hear the radio. We couldn't do anything. And so Avon was like, "Okay. Well, I'll just tell you about this book that I've been working on. And I am really stuck on it. I can't get the plot right." So I was like, "Okay." And I'm pretty introverted and Avon is very extroverted. And we going in... Jeff: And it's very true, she is. Roan: Yes. And, you know, I really just love a clear communicator, so I loved it. She was like, "Basically, I talk constantly. And if you want me to stop, you have to tell me to stop." And I was like, "Oh, that's amazing. I run out of steam socially in approximately two-and-a-half hours, and I'm still listening to you, but I won't respond." And she was like, "Okay, great." And thus, it was. And so she basically narrated to me the entire plot of this book that she was trying to write, and she was having trouble with it. And I kept doing this probably obnoxious thing where I was like, "Oh, what if you did this?" Or, "What if you did that?" Or, "Oh, my gosh, it's so funny, because if that were me, I would totally do this." And she, instead of being annoyed, was like, "Well, you should obviously write this book with me." And that book was what it turned into "Heart of the Steal," which is the first book we wrote together. And it was so fun because then as we were driving, we just plotted the whole book. And she had her little, like, computer that she was typing on while we drove. And I drove the truck the whole way. And so I would like yammer at her and she would take notes, and then in the hotel rooms at night, we would kinda hash it out. And so it happened on a total whim, and then turned out to be really fun. And so we planned it on that trip. And then I went and visited her months later, I guess. Yeah, some months later, and we actually wrote "Thrall," which was the second book that we co-wrote together, like, in the same place. So we wrote it, like, together, even though we don't live in the same place. So it was two very different writing experiences, but both equally awesome. Jeff: That's fantastic. And I have to imagine it's a nice way to kill the time in a road trip to just write a book. Roan: Oh, yeah, totally. And it's really fun because I don't know about you or about other writers in general, but, like, I find that traveling is one of the best, like, brain, what do you call it? Like, catalyzers, brain catalyzers, something about moving through space constantly, whether it's, like, on a train or just walking or whatever. It's, like, the rhythm of moving through space makes my brain also work in a forward rhythm. And I find myself, excuse me, getting so many ideas when I'm just, like, walking a long distance, or on a train, or on a bus, or something. And so something about driving and plotting the thing together was, like, super, some word… Jeff: Awesome. Roan: Yeah, awesome. Jeff: Probably better than awesome, but awesome was the first thing that popped into my head. Roan: Yeah, yeah. Jeff: And then I totally get what you're talking about there, too, because I've done a lot of plotting and some writing on planes. Because it's like, yeah, there's something about just that that just you've got the time, and, like, the brain is working, so use it. Roan: Yeah. And it's, like, looking out the window of something moving through that kinda space with everything passing so quickly, it almost feels like it changes the rhythm of thoughts or something. Jeff: Yeah. And kudos to Avon for being able to type in a moving vehicle because I don't know that I could do that. Roan: Oh, my God, she has, like, motion sickness proof. I swear to God. Jeff: That's just crazy. Roan: Oh, I know. Jeff: But we definitely got to talk a little bit about "Thrall." I reviewed it back in Episode 157. I was just blown away by it. For folks who don't know, tell us about what that book is and what in fact does make it so special? Roan: So "Thrall" is our modern "Dracula" retelling, basically. And for anyone who's read "Dracula," you'll remember that "Dracula," it's an epistolary novel, so it's told through letters, and diary entries, and, like, newspaper clippings, telegram, stuff like that. And so we did "Thrall" in the same way, we made it an epistolary novel. But since ours was modern, and that one was 19th century, instead of letters and journal entries, and stuff like that, we have emails, and g-chats, and tweets, and podcast descriptions, and stuff like that. So the whole thing is written in that way, this combination of different print media. So we have the main characters that people will recognize from "Dracula." And Mina, and Lucy, who are the two characters that people will know from "Dracula," in our version, have a podcast, a true crime podcast in New Orleans. And they get caught up in basically trying to solve the mystery of Lucy's brother who seems to have disappeared. And so in getting caught up in that mystery, they stumble upon this a role-playing game kind of thing, where they use an app, and they go to different places, and they try to solve clues, hoping that it will take them to Lucy's brother. And so in addition to it being an epistolary form in general for the whole book, then kind of within that epistolary form, there's this mystery that they're trying to solve on a computer, I mean, on a phone app. So it's like a game inside an epistolary novel that's an adaptation of another epistolary novel. Jeff: And epistolary just not something you see very much. At least I don't, especially in the romance genre that I tend to read in general. What was it like as a writer, and just plotting to take on such a different narrative format? Roan: Yeah, it was awesome. It was really, really cool. I love form, like, I'm super interested in what different things you can do with form. And one of the things that, like, when I'm reading other things I'm always interested in is what form did this author choose, whether it's something simple, like, short chapters, or long chapters, or, like, flashbacks versus telling everything in order, all of that stuff, I think, has such an impact on the way the story gets delivered. And so I was really excited to play with the form. And I think that with the genre of romance, one of the reasons why we don't see epistolary stuff so often is that it's, like, an additional level of remove between the two characters. And romance seems, to me, to be all about intimacy and connection. And sure, it can be really romantic or sexy to write a love letter or love email, I guess, in 2019. But there's still something where you're not in the moment. There's no, like, tracking a touch as it happens, or a kiss, or whatever it is. And so I think that going into "Thrall," we were like, "How the hell do we make a romance happen when the characters essentially are never in the same scene?" Like, in order to be texting each other, they probably aren't together. In order to be chatting each other, they're probably not together. And so any evidence of an encounter, which is all we could show, also demonstrated their distance. So that was a challenge. And we got around it in a couple of different ways, including characters literally writing out sex scenes that they wished would happen like fantasies, having chats that were more intimate. But yeah, the romance part, I think, was actually the hardest to portray via the epistolary form because it introduces that necessary distance, which is sort of the anti-romance. It was much easier, for example, for the mystery, or the suspense parts because those things can be portrayed that way no problem. But, yeah, the romance part was tricky. Jeff: Well, as I said the review, I think you guys pulled it off so amazingly. If people have not read "Thrall," they should really pick it up and give it a try. Roan: Oh, thanks. Jeff: Because maybe a little much to call it a breath of fresh air, but it's certainly gonna be something very different than what I think most people tend to read. Roan: Yeah, it definitely is different. And it's one of those books that Avon and I knew going in, but it's not everyone's cup of tea. It's an adaptation. It's an adaptation of "Dracula." It's an adaptation of "Dracula" without vampires. It's a romance where you don't ever see the characters touch necessarily. But like, I feel, like, for people who are interested in form for people who are interested in Dracula or interested in suspense, and all that stuff, we were really excited to just do something totally new for us. Jeff: Yeah. It was super cool. Please do more of that sometime. Roan: I would love too. Jeff: So laying a little bit of your origin story, how did you get involved in writing M/M romance? Roan: You know, at the risk of making, it sound completely accidental, it was kind of accidental. My good friend from graduate school, got a job in Phoenix, and didn't know very many people. She didn't have many friends. And she and I both started reading both young adult and M/M mysteries in grad school. And so I went to go visit her and she was having a hard time. Like, I said she didn't know very many people, didn't have any friends, and she just wanted like, escape reading. And we were, like, in the kitchen cooking dinner or something, and she was saying that she just wished that there was, like, a romance novel that she could read about someone who was in her situation. So someone who was a new professor in a new place, didn't know very many people and was kind of struggling to fit in. And because she's my friend and I wanted to make it all better, I was like, "Oh, no worries, I'll write you a story. Everything is gonna be okay." So on the plane home from Arizona, I wrote the first chapter of what would eventually be "In the Middle of Somewhere," my first book, thinking that, like, I would send it to my friend, and she would read it and be like, "You are such a nerd. I can't believe you actually wrote me this story. I was just complaining. You're weird." But instead, she read it and wrote back and was like, "Oh, a story. Oh, my gosh. What happens next?" And, of course, I didn't know what happened next because there was no next. I thought that it was going to be a little one-off thing. But then I wrote the next chapter and I emailed it to her, and she wrote back and was like, "What happens next?" And I actually wrote the whole first half of the book that way just chunking out a chapter, emailing it to my friend, and I was really writing it for her. I never thought I would show it to anyone. I never intended to send it to a publisher. I didn't even have a plot, I just was writing these little sections. And around halfway through the book, I suddenly realized that, like, it was getting kinda long, and I should probably figure out how it was gonna end. Otherwise, I would just end up writing this, like, email missive to my friend forever, which was really fun. But also, I thought she would get sick of it eventually. And then when I finished the book, I thought that was gonna be the end of it. And it was my friend who was like, "No, you should totally try to publish it." And I owe it all to her, I never occurred to me to send it to anyone. And I would never have done it if she hadn't made me. Jeff: Well, kudos to her for making that happen. And that's the best accident story ever. I mean, just amazing. Were you writing before that at all? Or was this just really like, "Hey, I could write. I'll write you something. No worries." Roan: Well, you know, I've always written different things. I was a poetry major in college of all the super useful things to pursue. And so I wrote poetry or some short fiction. And then I did my PhD in literature. So, you know, I wrote a dissertation, I wrote nonfiction for years, and years, and years. But I've always loved to write. And I love reading novels. And so sitting down to write a novel, I think it actually helps that I wasn't thinking of it as writing a novel. I just thought of it as writing the story for my friend. So I didn't have any of the self-consciousness or like that internal editorial voice that I'm sure if I had planned to send it out, would have like, killed me as I was trying to start. And in terms of, like, as we get back to your original question, which I don't know that I actually answered in terms of, like, why M/M romance specifically. I hate misogyny, and sexism, and can't deal with stories where I read female characters and feel intensely alienated from them. And I find often in romance, not all by any means, there are some amazing, amazing, like, revolutionary really amazing people writing romance with women, but I've often found that reading romance novels that are, like, heterosexual romance stories make me feel alienated, and angry, and the opposite of anything that I associate with romantic. And so, yeah. Jeff: Who are sort of your author influences? Roan: Oh, man. Well, you know, growing up, I read everything. I'm a real, like, moody reader. So I go through phases. And when I'm in that phase, that's all I read. So, like, when I was in elementary school, I was obsessed with S. E. Hinton Hinton, "The Outsiders" and "Rumble Fish," those books. And she writes with this very kind of, like, spare style, but lots of sensory detail. And I think that that's definitely something that I've always really admired was the ability to evoke feeling even while being very spare. And then when I was in middle school, I was obsessed with Anne Rice, obviously, because middle school. And I read her books over, and over, and over. And I think that she is like the master of the kind of Baroque sentence structure that when you're deep in, reading one of her books, you don't notice that she's, like, in a strange Yoda way, like, flipping a subject and predicate to make things sound, more flourishy and purple prosy. You don't notice it because you're so deep in it that, like, of course, that character would talk that way. But if you go and you read another author or another book, you realize suddenly what she was doing. And so I think from her, I got just, like, I really respected this immersive detail-rich all the senses engaged kind of writing. Also, I really love long books, and the ability to sustain a story over 800 pages, and keep going with this level of detail. I mean, I know it's not everyone's bag, like, some people really like a short one and done, but I mean, I will read a series that goes on forever if I'm still engaged. And I just think that she does that incredibly well. Then, oh, gosh, I'm taking you on a tour. I don't know if this is actually answering your question, but I do think... Jeff: It is actually. Yeah. Roan: Oh, okay, good. The real answer is, like, I learned things from every single author I read. And sometimes, it's things that I don't ever wanna do. And sometimes, it's things that my mind is blown because I'm like, "Holy crap, I didn't even know you could do that." Sometimes it's like I feel like I'm weak in one area at a moment. And so I wanna go read someone who I think does something really well and try to learn it. Oh, Francesca Lia Block was a huge influence when I was a teenager. She writes this kind of magical realism that is, like, very urban set - in LA, deals with real world problems, but has this, like, pink fog over the entire thing. And I was really, really taken by that. That way of combining urbanity with fantasy, and so that's definitely something that I took from her. I went through a really deep, like, epic historical fiction kick, which maybe is that same kind of, like, very immersive detail, huge cast of characters, all that stuff. And, oh, gosh, I'm totally blanking on her. Oh, Sharon Kay Penman is her name. Okay. Sorry, this is maybe a tangent. But this story blows my mind and is, like, one of the more impressive things I've ever heard in my life, if you'll indulge me for a moment. Jeff: Of course. Roan: So Sharon Kay Penman writes these, like, hugely epic, 1,000-page long, British Isles historical fiction. And she wrote this book called "The Sunne in Splendour," in, like, I wanna say the early 80s, maybe mid-80s. And the book is epically long, and just detail, and hundreds and hundreds of characters, and like tons of things translated into Welsh. It's about Welsh civil wars, or wars with England. Anyway, she wrote the book and, like, on a typewriter, and had it in one of those, you know, the boxes that reams of paper come in…you would put your manuscript in this box. So she was going to drive her book to her publisher. And she stopped at the bank to, like, deposit a check or something. And when she came back out, her car had been stolen with the copy of the book inside, the only copy of the book, which I don't even know how that happens. So the car stolen, she's just sure she's never gonna get it back. And whereas, like, I don't know, I would probably immediately go home and, like, order seven pizzas, and you wouldn't see me for a month. She drove home and started writing the book again. Jeff: Wow. I would have done the seven-pizza thing and then walked away for, like, at least a week. Roan: Yeah. Like, I would have told every single person who would listen that my life's work had been ripped from me. And it was the worst thing that ever happened to me and which, you know, I think that's actually speaking pretty well of my life that that would be the worst thing. But, yeah, I just, like, that level of tenacity and dedication to a project, it just blows my mind. Anyway, she's amazing. Jeff: Yeah, that's awesome. And just, like, I can't even imagine, it speaks so well to these days where we're like, "Did you back that up on Dropbox?" Roan: Yeah, at least someone's like, "Oh, man, I just spent, like, 20 minutes writing that email and it got wiped." And I'm like, "Sharon Kay Penman." Jeff: So what's coming up next for you? What's yet to come this year? Roan: Well, do wanna be the first person to know because I actually just found out yesterday? Jeff: Oh, breaking news. Roan: Breaking News. Yeah, I just sold a new book, which I'm pretty excited about. Okay. The concept is, there is a guy who has a bunch of animals. He's like, kind of antisocial, kind of pissed off at the world for reasons that I will not divulge yet. And he likes animals better than people. So he has all these rescue dogs and a bunch of cats that hang around. And basically, all he wants to do is take his dogs on these long rambling walks and think about how fucked up his life has gotten. It's the only thing keeping him sane, it's just, like, rambling walks with these dogs. And one night he is walking with the dogs and one of them starts chasing something. And he starts chasing the dog and falls down a hill and breaks his ankle. So all of a sudden, he can't do the one thing that he's liked, which is walk his dogs. So he goes online, and he finds this app that, like, match makes pet owners with people who wanna hang out with animals, but can't have pets of their own, because he's looking for someone who could help him walk his dogs, since he can't do it anymore. Then you have this other character, who's super shy lives with his grandma is, like, husband saving up to try to, like, get a new apartment so that he could have a dog. And then his grandfather dies, he has to move in with his grandmother, and he can't have an animal because she's desperately allergic. So he goes on the matchmaker app, and gets matched with this dude who needs someone to walk his dogs. And so the Meet Cute is a dog walking app, and a grouchy meets a shy guy, and lots of animals, and love. Jeff: Well, this sounds awesome. When do we get to see this? I'm guessing 2020 sometime? Roan: I think so. I don't have a date on it. I'll start working on it soon. But, yeah, I think it's gonna be, like, cute-ish in tone. And I don't know, I keep, like, accidentally writing animals into every single one of my books. And I don't even mean too. And this time. I was like, "Well, I mean, I keep doing it by accident. Maybe this time, I'll just, like, actually do it on purpose." Jeff: And what's the best way people can keep up with you online and find out when this next thing comes out? Roan: Well, they can check out my website, roanparrish.com, where I post all things that exist. And then in terms of social media, I've been very active on Instagram stories lately. I just bought a house, my first house, like the first non-one-bedroom apartment that I've been living in. And I've been doing all these, like, garden planting, and baking, and projects, and stuff. So I've been really liking Instagram stories. So people should follow me there and tell me all the things that I'm doing wrong in my garden. Jeff: They may not think you're doing wrong. Roan: I mean, it's my first time and I feel, like, I'm doing everything wrong. But we'll see, it might grow. Jeff: I bet it does. And congratulations on the first house. That's such a huge thing. Roan: Oh, thank you. I really went, like, in the space of one month from a person who thought that they would always live in one-bedroom apartments to a person who bought a house. And so it was very shocking for me. I keep wandering to the extra room and being, like, "What's gonna go in here? I don't know." Jeff: It's part of the fun of home-ownership. Roan: Yeah. Mostly, it's like my cat goes in there. And that's what happened. So I mean, I'm on all the social media things. I'm everywhere as Roan Parrish and people can find me. But Instagram stories is totally the most fun. And for people who, like, wanna know about when books are coming out, but don't dig the social media vibe, BookBub is a great place to find me because they'll just get emails when I have books coming out or on sale. Jeff: Fantastic. Well, we will link up to everything we talked about in the show notes. We wish you the best of luck with the release of "Raze." And thanks so much for hanging out with us. Roan: Oh, thanks so much. It was a blast. Book Reviews Here's the text of this week's book reviews: In Case You Forgot by Frederick Smith and Chaz Lamar. Reviewed by Jeff Frederick Smith and Chaz Lamar are new to me authors and I loved reading their first collaboration, In Case You Forgot. Frederic and Chaz are two black gay men writing about two black gay men living in West Hollywood. This year in the life story left me wanting sequels because I want to read even more about these two interesting characters. Zaire James and Kenny Kane are in similar positions. Coming up on his 30th birthday, Zaire decided it was time to separate from his husband, even though a lot of his family and his friends thought Mario was perfect for him. Kenny, approaching 40, was dumped by Brandon-Malik via text as he was en route to his mother’s funeral. Both of these guys need a reboot. For Zaire that means moving into WeHo--it happens that he moves in across the street from Kenny. He’s got a new job at a social media firm and he’s looking for what comes next. He’s got a family that wants him to find it too--the James Gang siblings--brother Harlem and sisters Langston and Savannah--are always on him to get his life together and find his happy. Kenny, on the other hand, is working on getting his consulting business off the ground since he’s recently finished his doctorate. He’s trying to mostly focus on the business, but he also wants to find Mr. Right. Kenny also carries the weight of having watched his first boyfriend, Jeremy, die after a stabbing. He’s working on his life with some therapy. So what happens in this book? Life. Kenny and Zaire, at times together and at others separate, look for a good date that may lead to more, celebrate birthdays, experience success and failures. The last line of the book’s description captures this perfectly: “...they hope new opportunities, energy, mindsets, and connection will reinvigorate what is missing in their lives--drama and all.” That’s exactly what I liked about In Cast Your Forgot, the slice of life feel. It’s happy, sad, angry, messy and full of great triumph and really bad mistakes. It takes a lot to make this kind of loose plot work, especially since the two lead characters aren’t always together as the year progresses. Frederick and Chaz made it work though. One of the reasons it works is the cast of supporting characters from family, friends, roommates and co-workers. Among my favorite parts of the book was the use of social media to plan their lives and sometimes even to stalk their exes, at times to the chagrin of the friends trying to help them move on. There’s also a Labor Day trip to Palm Springs that was one of my favorite parts of the book because of the realness of how it unfolded and how it tweaked Kenny and Zaire’s relationships. The characters reminded me of Noah’s Arc, a show I loved that ran on Logo in 2005 and then was a movie in 2008. The show focused on queer men of color in various states of life and relationships. Kenny and Zaire would fit right in there. I do want to set some expectations around this book. As you may have figured out, it’s not a romance. It’s categorized that way on the Bold Strokes Books site as well as at retailers. I think that’s wrong. It doesn’t have any of the typical romantic story beats and, most importantly while Kenny and Zaire date for a bit in the middle of the book they don’t get an HEA or HFN as a couple….although the book does end with both characters in good places. If you want a great look at a year-in-the-life of some terrific characters who are trying to get their lives together, I highly recommend In Case You Forgot. And I’d love to see sequels to this book. Frederick, Chaz, please write romances for these guys...

The guys talk about their past week as Jeff worked on revisions and they saw a production of Oklahoma, which they both enjoyed. They also welcomed the new listeners that have found the show during the past month. Jeff reviews Something Like Gravity by Amber Smith and Will reviews Annabeth Albert's Arctic Wild. Will and Jeff talk with Annabeth Albert about the Frozen Hearts series, including getting a sneak peek of Arctic Heat, which comes out in September. Annabeth also talks about the research that goes into the Frozen Hearts books, the latest in the Out of Uniform and Rainbow Cove series plus she discusses her next series about smoke jumpers. Complete shownotes for episode 195 along with a transcript of the interview are at BigGayFictionPodcast.com. Interview Transcript - Annabeth Albert This transcript was made possible by our community on Patreon. You can get information on how to join them at patreon.com/biggayfictionpodcast. Jeff: We are excited to welcome back to the show, Annabeth Albert. She was last here, way back in December 2017 in episode 115, talking about "Wheels Up". You have written so much since then. It's so great to have you back to catch up. Annabeth: Hi, happy to see you. Jeff: Now, the most recent thing you got out is the "Frozen Hearts" series. Tell us a little bit about this series and what its inspiration was. Annabeth: So I started reading in the late '80s, early '90s romance. And I love the Alaska set Debbie Macomber's and Nora Roberts. And so my inspiration for this series would be, what if we went back to that sort of setting but made it LGBTQ and fun and that big, sweeping feeling - the big scenery, big emotions, mountain men? I wanted to capture all that feeling of Alaska. And also all the Alaska shows that I like watching, "Man Versus Nature," all those sort of shows. And so I thought, let's bring that sort of big scenery to life in a series that also has LGBTQ characters. And so it was really fun for me to get to bring that to life. And it's a three book trilogy, and each book stands alone really well because we kind of did it so that there's very little overlap in the storylines for this particular trilogy. With "Out Of Uniform", they were a little more closely linked, you saw more secondary characters popping up, back and forth. And here, they stand alone a little bit more. Will: Aside from the inspiration itself, did you have any experience with Alaska? Have you ever been there? Annabeth: That's what's the funny part. No, I haven't actually been there. I feel guilty admitting that right now. But I have done a ton of research. And I also had Alaska beta readers for each of the books. I had people who actually live in the area in Alaska, who are able to give me feedback. "Oh, this is wrong. The coast is over here. This is..." But I did a ton of reading books set in Alaska and documentaries and message boards. And then like I said, using the beta and the sensitivity readers too from Alaska. Jeff: It's so good to have readers in your readership who can be those beta people when you need them. Annabeth: Yeah. I think that it's really important. In Book Two, I have a hero who's native Alaskan. And so it was really important to me to get a couple of beta readers and sensitivity readers who themselves identified as native Alaskans so I can have that perspective come in. And so that's really important to me. Sometimes it takes a while to find the right beta reader for that particular project. Like with book one, we had some alcoholism and some eating disorders being dealt with in that book. And so what I was able to do is get beta readers for that issue. Like I had an eating disorder beta reader, I had an alcoholism beta reader, I had some sensitivity readers kind of about trauma and stuff like that. So I tried to really bring in a lot of perspectives, so that it's both authentic and it feels true to the character, but also is sensitively done. Will: I agree with you about the sensitivity. I mean, because you're dealing with some pretty, you know, heavy, serious subjects. But they're handled in an intelligent and thoughtful way that doesn't make it like preachy or a downer. So I really enjoyed that in the first book. And I wanted to go back to the second book, "Arctic Wild", which I really, really loved. Can you talk to us a little bit about the ideas and inspiration behind that particular book? Especially the themes kind of like, you know, there's like hurt-comfort going on, there's kind of May-December going on with that particular book. What was the inspiration behind book two? Annabeth: So each of the books, I wanted a different fish out of water, so different characters kind of coming. And so I wanted to do a character who was a little bit older, more settled in his life, and confident in who he is. And so I knew he was going to be older, I knew he was going to be a lawyer, I knew he was going to be fairly well off. And I wanted to do a silver fox sort of character, but I call him my silver bear, because he's also a little bit of a larger guy. I wanted something a little outside the norm for him kind of...and then I was like, "Well, so who is he going to get paired with?" Well, obviously, he's got to get paired with someone who's fun and younger, and kind of his opposite in a lot of ways. But I knew that I wanted the hook that kind of bonds them together to be this plane crash, because I knew all along that book two was going to have a plane crash, because every book kind of has its own thing. And I knew that book two's thing was going to be bush pilot, an emergency situation, we've got a crash landing. How are these guys going to deal with it, and who is the most unsuitable guy I could put with the bush pilot in the wilderness having to deal with this emergency? So I did that. And so that was kind of the thing that kind of spurred the book forward from that point. But as I started plotting, I realized that the bulk of the book was going to come after the plane crash. Because at first I was like, maybe I'll do a really tight timeline, I'll get the whole book into a week. And that just wasn't working for these heroes. They really resisted a tight timeline. So I ended up expanding it and I was like, okay, they're going to have to deal with this aftermath together. And so because they have to deal with it together, they kind of bond in a deeper sort of way, spending the summer together as opposed to just 24 hours in the wilderness. And so to me, that was a real joy to watch them evolve and change. And it's my longest book to date. You can see how thick it is. It's a monster. But part of why it's so big is kind of the scope of it. I was able to bring in the secondary characters, Reuben's daughter, and then Toby's sister and father. I have a lot of secondary characters happening in this one. And it was just really fun for me to take that initial idea--there was going to be a plane crash with these opposites attract guys, and they're going to have to deal with it--to this more sweeping sort of story where it does become, like you said, a hurt-comfort story. How do we cope with the aftermath? And the changes that it brought within each of us. So I think that's kind of what I think the book ends up doing. Jeff: You mentioned the Native Alaskan aspect in book two. And before we hit record, you mentioned that book two is also the most research-heavy of these. What kind of research did you do to get it all to work out right? Because I imagine bush pilot, plane crashes, there's research to do there, too. Annabeth: Yeah, each element, like each sort of...and a lot of times what I do is I work in Scrivener. And in Scrivener I'll have notes for each chapter. And in a short story, like I might have like a line or two of notes per scene. In something like this, I'll have a long list and it'll have the research questions for each chapter that's going to come up. Like, okay, I need to know how a pilot would handle this sort of altitude disturbance in his thing. And what would that actually mean? What do the instruments look like? What sort of plane is he flying and what's the weather like? I have to do a lot of research into that. For that, I look at message boards, I look at small plane businesses, I look at write-ups of past disasters, news reporting. I look at a lot of stuff to kind of get that one detail. Like, I won't just, you know, get one thing. I'll look at a couple of different things to kind of get a couple of perspectives. And the same thing with the Native Alaskan details. Obviously, it's not my own lived experience and I'm really aware of that. So I had the two beta readers who were themselves identifying as Native Alaskan. I did a lot of research with blogs, blogs written by people who identify as Native Alaskans. Autobiographies, I did a couple of phone interviews, I really tried to get a variety of experiences so that I could bring Toby to life in a way that was both sensitive and well-rounded and that reflected a variety of sort of different opinions and different ways that sort of their lives end up unfolding. And so I'm very proud of the amount of research that went into both Toby and the book as a whole because like you said, the bush pilot, the plane crash. I had a floor plan at one point of their rental house, I have a floor plan drawn on my office wall of exactly what this rental house would look like, where it's located, what the driveway...all this stuff. Like, I really go into the minutia. Jeff: I like that attention to detail. Because as you said, it just brings everything more to life as it goes. Now you did mention it was a trilogy, and in September, it wraps up with "Arctic Heat". What's coming in that book and can you give us a little sneak peek? Annabeth: So I am so excited for this one. I love the whole trilogy, each book was its own sort of joy to write. But "Arctic Heat" is the one that I was probably most excited about. It's close proximity. We have a ranger who's handed this volunteer and who's going to be snowed in for the season. And this does happen actually. In Alaska, there are volunteer positions where you can basically go and stay in the State Park over winter. And so you're able to basically experience an Alaskan winter with a ranger. And it's kind of cool. So I was like, "Yeah." When I heard about this, I was like, "Oh, yeah. This has got to be a romance." And so the one hero who comes from California, he's kind of a free spirit and he has no idea what he's in for. Even though he's been around snow a little bit, but he has no idea what he's in for. And then we have the older cranky ranger who also is like, he's lost his longtime partner. She's gone on to be back in the city and he's really kind of cranky about this. And he's been handed this guy, and so they're going to spend the winter snowed in together. And along the way, they're going to catch some feelings, and it's going to be really fun. And so they meet each other at training. And they're really not sure about each other. We have Quill, who's the ranger and Owen, who's the younger guy from California. And Owen has a feeling about Quill kind of from the beginning. And he's got his number. And so they end up going out to dinner. And at this point, Quill doesn't know yet that they're going to be snowed in together all winter. So Quill is kind of in the dark about that. But Owen is sure about kind of, he likes Quill, and he likes Quill a lot. And so I was going to give you guys...now if you read "Arctic Wild" in the back of "Arctic Wild" there's the first scene for this one, for "Arctic Heat". So I didn't want to read to you from that scene, because if you read "Arctic Wild" you've seen it. So I'm going to give you a little snippet of their first kiss. And it just kind of shows they're dynamic. I think it's just a couple of paragraphs and I'm just going to read it to you. And I'm not as good as my narrators, I have awesome narrators but we're just going to see. So they're leaving a restaurant here. "They each paid their share and then headed outside. The light had started to fade, the midnight sun of the summer long past. The crisp bite to the air making Owen wished he had grabbed more than his hoodie. 'Cold?' Quill asked as Owen rubbed his arm. 'A little, yeah. Warm me up, please. I know a shortcut through the alleyways back to the hotel. Lead on.' Owen followed him as he ducked down the narrow alley, both of them walking too fast for much conversation. 'Whoa!' Quill's arm shot out holding Owen back as an SUV unexpectedly backed into the alley. Yanking Owen into a dark doorway with him, Quill frowned at the vehicle which took it sweet time vacating the alley, long enough for Owen to sense Quill's warmth and nearness. More of that classic intoxicating scent, the harshness of their breathing that much sexier in the close quarters. The charged air around them was made worse with every brush of their arms. "You sure there's nothing on your bucket list?" As the SUV finally moved on, Owen turned to block Quill from an easy exit. 'Nothing I could help with?' 'Not sure,' Quill hissed out of breath which was decidedly not a resounding no. So Owen moved closer. 'I am very open minded and discreet. You could tell me.' 'You're something else,' Quill whispered. But his tone was more awestruck than censuring. 'So I've been told.' Taking a chance, Owen put a hand at his shoulder and was relieved when Quill didn't immediately flinch away or tell him off. 'Come on. Take a chance. Nothing you're curious about?' 'Like what?' Owen's voice with a harsh whisper. 'Mmh.' Owen pretended to think as he leaned in close enough to brush his lips against Quill's neck. Quill was taller but not by so much that Owen had to overly stretch. His skin tasted good, warm, ever so slightly salty. 'This maybe,' he moved to flip Quill's ear lobe with his tongue, 'Or this, so many delicious possibilities.'" And that's the look at kind of what's happening between them when they get started. And you'll have to see the rest. But I loved writing Owen and Quill. They were so much fun, it takes place over a couple of months. So we get to kind of see their progression. It's a little bit of a slow burn, each of the books in the series has been a little more slow burn. But once they get going, there's a lot of heat. And so it was a really fun one for me. And I really enjoyed kind of, whereas "Arctic Wild" had the bigger cast of characters, this is mainly the two of them, dealing with the elements of nature, dealing with each other, dealing with roommates issues. It's kind of the 'Odd Couple' in Alaska. And so it was just a lot of fun. I can't wait for you guys to get to see this in September. Jeff: Have you pre-ordered this yet? Because that forced proximity is so your jam. Will: I have enjoyed each of the books up to this point. But book three hits pretty much everything that I'm looking for in a romance. I mean, listeners, longtime listeners know, forced proximity is my absolute most favorite thing ever. So yes, that reading you just did it's like, whew, I can't wait. Jeff: I think you mentioned that this is a real thing people can do to opt to go snowed-in with a ranger. Annabeth: Yeah, they do. Yeah. So there's volunteer positions all year long with the Alaska state parks. And with the National Parks too, though, those are a little more competitive. But you can go for the summer, you can go for the winter, and they have like little yurts or tiny cabins. Pretty rustic conditions but they're looking for volunteers to basically help the paid rangers out because without the volunteers, they couldn't get nearly as much done as they can. So basically, you become a winter caretaker or a summer caretaker at one of these parks. And you get to help the Ranger but you also get to spend winter in Alaska, with all the snow and a tiny yurt. So stuff like that. And each of the sites has its own housing situation. And so that was some of the research I had to do was figure out, what would the housing situation be like at this particular site, as opposed to other sites? How are they going to get their heat? How are they going to get electric? Do they have access to the internet? All those little questions come up? Jeff: It's fascinating. Would you ever consider doing such a thing? Annabeth: I have small kids. And so sometimes that seems really appealing. Like, "Oh, I could go for three months." And other times, it's like, "No, they'd miss me and I'd miss them and the dog would pine." Jeff: Research trip. Annabeth: I'm going to say my next series is back to Oregon. We're going to be back in Oregon but we're going to be in Central Oregon. And so we are actually taking a research trip as a family towards later in the summer. We're doing a research trip to go into Central Oregon to see some of the places that will be in that series. So I'm excited about that. Jeff: Oh, cool. Not quite the same as snow in a yurt. But, you know, research trip nonetheless. Annabeth: Yeah. Well, I get to bring the kids on that one. So it'll be fun. Jeff: They might enjoy snow in a yurt. I don't know. Annabeth: They would. They would. Yeah. Jeff: You've had a prolific year, even before the "Frozen Hearts" books started coming out. You had new stuff in the "Rainbow Cove" and "Out Of Uniform" series. Are there challenges working across so many series that are so close together in release times? Annabeth: So what I tend to do is I tend to write in blocks. So all three Alaska books were written back to back to back. But in between two of them, I took a little tiny "Rainbow Cove" break. I gave myself five days to write a novella. I was like, "Okay, I'm kind of burned on Alaska, just a little." And so I was like, "Okay, I'm just going to give myself five days because I'm supposed to be writing these books back to back and I'm going to write a "Rainbow Cove" novella. And I did. I wrote 20k in five days. And that became "Lumber Jacked". And obviously editing it and stuff took more than the five days. But I got the basic draft down and then I worked on the edits for that while I went on to Alaska three. And that's how I worked a "Rainbow Cove" in. Because it's not a full length, it's a novella. And then the "Out Of Uniform", that wrapped, actually wrote that last April. So I wrote it April 2018. Then I started Alaska after that. But then it didn't come out until January because that's how publisher schedules work. And so I wrote it as part of Camp NaNoWriMo 2018. It was really fun. Loved writing "Rough Terrain". So it coming out in January was just a joy. But that kind of wrapped up a period of finishing up "Out Of Uniform" and then moving into the Alaska universe. And so I kind of go from universe to universe. I try not to hop back and forth anymore, because I've done that in the past. And I ended up having to reread a lot of my stuff a lot more when I'm going back and forth between series. And so I think the biggest challenge for me has been working in time for "Rainbow Cove" because that one doesn't have publisher deadlines. And so I tend to be overly optimistic with my publisher deadlines, and I'm like, "Oh, I'll get this book done early." And then I'll get another "Rainbow Cove" in. And lately that has not been happening. The books have been going long and complicated. And I love that. I love writing long, I love writing complex books. But it has made it a challenge in terms of working more "Rainbow Cove" in. Jeff: What is going on in "Lumber Jacked", that people who are reading "Rainbow Cove" might want to check out? Annabeth: So that one, like "Rainbow Cove", is set on the Oregon coast, and all the books are. So it has a honest to goodness lumberjack as the hero. He makes a brief appearance in book two but this stands alone. If you haven't read book two, you're fine. And it's just 99 cents and it's also in KU. It's a fun little...it's under 30K because I ended up adding a little bonus epilogue to it. But so it has a lumberjack who is an amateur photographer on the side. He likes to take bondage pictures, and so like rope, like Shibari pictures. Like, there's some really neat artwork done with Shibari. And so he meets this makeup blogger, and the makeup blogger is like, "Maybe I would like to pose for one of these pictures." And so their courtship kind of unfurls from there with photos and lumberjack plaid. And it's a lot of fun. But I really liked the chance to write my makeup blogger hero because there's been so many amazing male makeup bloggers recently, becoming even the face of some major brands and stuff. And so I wanted to show that sort of side of masculinity as well. These guys have embraced more of the makeup loving, glitter loving sides of themselves. And so I wanted to do a hero on that sort of spectrum. And so that was really fun for me to get to do him and contrast him with our big burly, older lumberjack guy. And so it's fun. Jeff: That's cool. And for "Out Of Uniform", is "Rough Terrain" the end of the line for that series? Annabeth: Well, I never say never and I do have more military in Alaska. One of my guys is a former Air Force pilot. And in the 'Heart To Heart' charity anthology coming up this fall - I'll have a marine in that one. So I haven't left military romance completely. But I think "Rough Terrain" kind of brought "Out Of Uniform" full circle in a lot of ways. It felt like book seven, a natural sort of stopping point for this part of the series right now. But I'm not ruling out more SEALs in the future. We'll just have to see what the future brings. There's a lot of things I want to explore and a lot of series I want to do. And so, we'll just have to see. But I think fans that like the "Out Of Uniform" will really like something that's coming from me in 2020, which is going to be smoke jumpers. So I've got the band of brothers again, but they're firefighters. And they're in Central Oregon, like I said. They're in Central Oregon fighting forest fires. And it's going to be really...I'm looking forward to the research and I'm really looking forward to being back with a band of brothers kind of group of friend heroes. And it should be really interesting and fun. Jeff: Is that some of the research you're doing on the Oregon trip this time? Annabeth: Yeah. So we'll be actually going to some Oregon fire stations. We'll look at like both the little towns that they live in. We'll also go to some of the state forest areas there, see some actual forest damage and stuff. I've got some different things planned for us to kind of really...I want to really get my five senses into that area, because I live in Oregon, obviously. But I live more in the valley. And so I'm going more into that Central Oregon terrain, it is way different, like you said. It's way different terrain. And so I want to really immerse myself in that to really get that flavor for readers. Jeff: That's very exciting. You've hinted at some stuff in the future like with "The Smoke Jumpers". Of course, "Arctic Heat" comes out in the fall. Anything else you can tease out in the universe? Fill us with what's coming up. Annabeth: So I have a book coming...so "The Smoke Jumpers" will be coming summer 2020. And in between, "Arctic Heat" and "The Smoke Jumpers", I have my first book with Sourcebooks coming. And it is a YA-NA crossover, little bit lower heat, but a lot of the same fun and energy that a YA-NA...you'd expect in a YA-NA crossover. I think fans who have liked some of the lower heat ones that have been rising up the charts like "Red, White, and Royal Blue", that sort of book, I think they might like this sort of tone. And it's a road trip romance, which I love road trips. Like I just said, I love road trips. And so I'm really excited. It's a road trip romance with gamer guys. They're in college, and they're going to a big gaming convention. Like imagine ComicCon, but it's for a card game that they both play. Like, Magic The Gathering, but I kind of invented a fake card game for them. So they're like these gamer guys who have to make the convention on time to get their chance in the big tournament. And it's going to be a lot of fun. I don't think they've gone public with the title yet. But it is coming in April 2020. And so I can't wait to see the cover they're doing and it's going to be really fun. It's going to be in bookstores, which is...I'm really excited about. So it's going to be in the trade paperback. Jeff: Yeah, we were excited to see...I believe it was the first of the "Frozen Hearts" series that we found in our local Barnes and Noble. Annabeth: I know. I'm so stoked. Readers keep tagging me in pictures in the wild of these books. And it makes me so happy. And readers, if you see the books in the wild, take a picture for me. I do love seeing them, I love...and if you like your local bookstore carrying more LGBTQ fiction, let the bookstore know. Even if you're not buying a book that day, say, "Hey, I'd like to see more fiction like this." Not just mine, but a lot of other authors that are coming into mass market and stuff. The more appetite there is for that, I think the more we'll see that in bookstores and stuff and airport kiosks and stuff. And so I'm excited for that. Jeff: Yeah, it's an exciting time. And it feels like "Red, White, and Royal Blue" may lead some of that too. I know that's not a mass-market book. But the fact that they're getting picked up in Target is pretty exciting. So definitely ask for those books. Annabeth: Yeah. I think the more you see that and my...and Sourcebooks has a lot sort of planned around the release of this road trip romance. That should take it to a broader audience. So I'm really excited to see some of what they've got planned and coming. And so it's been really fun to work on that. And that may end up being a series. We just have to see. Jeff: Cool. I'm thinking on your backlist, is this kind of a first for YA for you? Annabeth: Well, they're college age. And so I've done college age with a high heat level in "Winning Bracket". And then I did college age with a lower heat level in one of my freebies, "First In Line", which is set in the same universe as "Winning Bracket". And so that's a sweeter one, it just has a kiss. The one that I'm talking about is somewhere in between there. There are some love scenes, they're just not quite as graphic. And so it was kind of fun to go back to the college universe and kind of...I love that age of hero and I really enjoyed kind of being in that universe with them and that age for a little bit. And so that was fun. But it's not like YA is typically considered senior in high school and older. So that's why they're calling this kind of a crossover because they are in college but upper YA readers will probably enjoy this. Jeff: Cool. Awesome. I'm excited for that one. Will: Yeah, that sounds... Jeff: I love YA new adult so much. So what's the best way for everyone to keep up with you online? Annabeth: So I'm on Facebook. I have Annabeth's Angels as our Facebook reader group. I welcome everyone into there, whether you've read me or not. If you want to talk about fun books, we welcome people in there. I'm also on Facebook myself. I welcome people to follow me on Facebook. I'm on Twitter and Instagram, little bit less than Facebook. Facebook's kind of my big addiction. But I am on Instagram and Twitter. And I also do playlists for all of my books on Spotify. So if you're on Spotify, you can follow me on Spotify and see kind of the music that's influencing the different books. Jeff: Fantastic. We will link up to all that stuff in the show notes. For sure. Thank you so much for hanging out with us. We wish you the best of luck with everything you've got coming out later this year and into 2020. Annabeth: Thank you. Book Reviews Here's the text of this week's book reviews: Something Like Gravity by Amber Smith. Reviewed by Jeff. This was the summer book I didn’t know I was looking for. Not only is it set during the summer, but--in the best way possible--it moves like a lazy summer, filled with all the best things. It’s hard to explain that aspect of it, but it’s one of the things I loved about this book with the feel that with everything else that happens there was the vibe of the lazy summer. Something Like Gravity opens as summer break from school begins. Chris has just arrived at his Aunt Isobel’s where he’ll stay as he tries to reset after being assaulted the year before as he came out as transgender. Meanwhile, Maia, who lives across the field, is still reeling from the death of her older sister. Over the course of the summer, Chris and Maia find comfort and love with each other, reveal their secrets and are able to heal--although it’s far from easy. The meet cute for Chris and Maia is nearly fatal and sets the tone for how their early relationship works--rather adversarial. Chris goes out for a drive with the car that he gets to use for the summer and he practically runs over Maia, who was stopped on her bicycle in the middle of the road. The two hardly speaking in the aftermath but after that gravity starts to pull them together. In the hands of a lesser writer, building a story of first love set amongst loss and trauma would likely be a disaster. Amber, however, crafts a story that I had a hard time putting down because I wanted to see how things would go--both the cringy difficult moments as well as the super sweet ones. I enjoyed both Maia and Chris’s journeys. Maia’s loss of her sister looms large over her family--Maia, her parents and even the family dog haven’t figured out the way forward. Maia tries to learn more about here sister by looking through all of the photographs and the places in them. Carrying her sister’s camera nearly constantly has many in the small town thinking that she’s trying to become her sister. It’s even something she lets Chris believe--that she is a photographer and has been taking pictures even though the camera has no film. Chris’s family is also under stress. His coming out didn’t go well. Not only was he assaulted, but his mom hasn’t adjusted well and his dad seems to be overcompensating for that. He’s come to Aunt Isobel’s to figure out what he wants to do for the next school year, to give his parents time and to find himself--including getting back to running which he enjoyed so much before the attack. He also has to decide what he wants to share with Maia. Chris and Maia have a lot of internal dialogue and it works so well. There’s a lot for them to work out for themselves and it’s some of the most powerful parts of the book. Some of the lazy summer vibe plays into the romance between Chris and Maia. Amber writes their falling for each other in such a wonderful way. There’s a perfect build up as they learn more about each other--at the same time it’s complicated by big secrets. The moments of meltdown and tremendous emotional stregnth provide significant growth moments for them. The way Amber resolves all plots--Chris and Maia’s relationship as well as between them and their parents--were so well done. I loved the meaningful talks the teens had with their parents over the span of a few days. There was much to handle and, like the rest of the story, the pacing was perfect. Chris and Maia end up in a good place too as they prepare for another year of school. I’d love to see more of these two and how their story continues. Arctic Wild by Annabeth Albert. Reviewed by Will. Buttoned up east coast lawyer Ruben is forced to take a vacation by himself in the wilds of Alaska. Needless to say, the prospect doesn’t thrill him, until he meets Toby, his handsome bush pilot tour guide. Toby has dealt with tough customers like Ruben before, and soon enough they’re enjoying each other’s company while exploring Alaska – until an unexpected storm sends their plane crashing into the remote wilderness. After they’re rescued, Toby needs time to heal from his injuries. Rueben comes up with the plan that he’ll stay in Alaska for the summer, rent a house for himself and his teenage daughter and have Toby stay with them. Ruben can care for Toby, while Toby can come up with activities than Rueben can use to reconnect with his daughter, Amelia. Amelia is no cutesy romance novel kid, she’s realistically surly and constantly annoyed by her dad – but she gradually begins to enjoy her vacation, just as her dad is enjoying all the time spent with Toby. Love is definitely in the air for our two heroes, but both are unwilling to admit that it’s more than just a fling – primarily because they’re both stubborn in their own ways, as well as an unending number of outside obstacles to their happily ever after. Both of them have complicated family and work situations to deal with. After weeks of nighttime cuddles and furtive blowjobs, Toby’s injuries are finally healed enough that he and Ruben can sleep together, it’s magical – and then, as it must in all romance novels, the black moment arrives. A serious issue with Toby’s dad forces him to take a look at his obligations – he wants happiness with Ruben and Amelia, but that doesn’t seem possible. It takes some serious soul searching until Toby finally realizes that he can’t let a misguided sense of pride keep him from accepting help when needed. By the same token, Ruben can’t swoop in and solve everyone’s problems with his money and influence. As with the previous book in this series, the author takes the time to let the story breathe – giving the characters time to know and like one another, before falling in love with each other. This extra time spent on the story also gives readers a chance to know and understand the unique and complicated situation our heroes find themselves in, primarily concerning their obligations to their respective families. Annabeth Albert has written yet another winner with Arctic Wild, giving us a terrific romance featuring two dynamic and interesting heroes that readers are sure to root for.

He's a libertarian, anarcho-capitalist. He hosts the biggest conference, Anarchapulco, for anarcho-capitalism. He's The Dollar Vigilante. Originally from Canada, hailing from Mexico. Jeff Berwick   Stefan: Ladies and gentlemen, welcome to the show, Respect The Grind, with Stefan Aarnio. This is the show where we interview people who achieve mastery and freedom through discipline. We interview entrepreneurs, athletes, authors, artists, real estate investors, anyone who has achieved mastery and examined what it took to get there. Today on the show, I have a very special guest out of the norm, Jeff Berwick. He's a libertarian, anarcho-capitalist. He hosts the biggest conference, Anarchapulco, for anarcho-capitalism. He's The Dollar Vigilante. Originally from Canada, hailing from Mexico. Jeff, good to have you on the show today. Respect The Grind, my friend. Jeff: It's a pleasure. Thank you. Stefan: Yeah. I really appreciate having a guest like you on the show, because we normally talk about like business and making money, and real estate. A lot of people listening to this show, they want financial freedom for themselves, and they're trying to make money. They're trying to invest, whatever that means. It's cool to have a guy like you on the show. We had a mutual friend of ours, John Sneisen, on the show a little while ago, and I love talking to guys like you, because we end up talking about the money system. We talk about freedom in the free world, free speech, all this kind of stuff. For the people at home who don't know you, Jeff, can you introduce yourself in your own words? Who are you, and why is this a relevant conversation for us to be speaking? Jeff: Sure. Yeah. Actually, it's a totally relevant conversation that's everything that I talk about. I've been doing that for about nine years now, since 2010, with The Dollar Vigilante, which is a anarcho-capitalist financial newsletter talking about how to free yourself. Not just financially, but in every way possible. Of course, for people that don't understand the word, "anarcho" means anarchy, of course, and that's a Greek word which means "an," without, "archy," ruler. I just believe that no one should have a ruler and no one should be a slave. I don't know why that's controversial at all, but that's the government indoctrination camps that people have had for about 12 years that most people have been forced into. Jeff: Then the capitalist part, a lot of people actually misunderstand that word, too. They think that what you have in the U.S. today is capitalism. There is a small part of capitalism still remaining, and that's why the U.S. is still standing, but it's mostly fascism, and crony capitalism, and what I call crapitalism. Really, when I say "capitalism," I just mean free market. I've been, and completely free market, so no government involvement whatsoever, no taxation, no regulation, no central banks, and no fiat currencies and things like that. I've been doing that for about nine years. Jeff: I also do a podcast called Anarchast. I've been doing that for about seven years, and it's grown quite a bit. It's nothing too huge, but it's actually spawned an entire conference now called Anarchapulco, as you mentioned. It's now the world's premier liberty and freedom event held in Acapulco, Mexico, every year. It's coming up in February 14th to 17th. We're expecting about 3,000 people, because the freedom, the idea of it is actually growing, believe it or not. I've been doing all that stuff for about, as I said, about eight or nine years now. Stefan: That's tremendous, Jeff. People like you, I really got to salute a guy like you, because it's not easy. It's not easy going against the grain. It's not easy speaking out about this stuff. It's not a popular table topic at the Thanksgiving table or the Christmas table. I remember when I was telling my family years ago about the money system at like at Christmas dinner or Thanksgiving dinner. Everybody got up and left. The average person doesn't want to hear about how they are enslaved. They don't want to hear about the money system. I remember years ago when I was 21, 22, I read a book called Atlas Shrugged by Ayn Rand, and that's the capitalist bible. The communists have Karl Marx, Das Kapital, and then the capitalists have Ayn Rand's Atlas Shrugged. It's number two most influential book in the United States. Stefan: Can you explain to the people at home, that's where I've first heard the word "libertarian." What's a libertarian? Because people, we're from Canada, or I'm from Canada, in Winnipeg, today, and people hear "libertarian," and they think libertarian is liberal, because it's L-I-B. They don't know the difference between the two words. What's a libertarian? Jeff: That's interesting you're up there in Winterpeg. I'm originally from what I call Deadmonton, so up in Canada. Stefan: Dude, that's the other Winnipeg. I'm giving that a gong. Bang. Just gonged it up. Deadmonton and Winterpeg. Jeff: Yeah, so the word "libertarian," I actually didn't even really know the word until about 15 years ago. It's become quite popular. It's become fairly popular since Ron Paul ran for president in 2008. Really, what the word means is, well, it's pretty simple word, "libertarianism." What it means is that if you're a libertarian, then you hold as one of your highest principles liberty or freedom. If you truly hold that as one of your highest principles, then you should actually be a anarchist, because an anarchist believes in complete freedom. It believes in the freedom of the individual that no one has the right to enslave and say they own another person. Of course, whenever you have a government, you're just born somewhere, and they go, "Well, you're ours now," especially in the U.S., where every baby born today in the U.S. has a quarter of a million U.S. dollars worth of debt and liabilities overhanging it from the government that it's supposed to pay off. Stefan: My God. Jeff: That's absolutely criminal and absolute tyranny and slavery. That's what we have in every country today, as well as Canada and every other country. A true libertarian truly believes that no one should be ruled or owned by anyone without their permission. Of course, there's a lot of people who don't mind being owned or being slaves. They're called statists, and if they want to do that, that's fine. I have no problem. As a libertarian or as an anarchist, do whatever you want. Just don't aggress against me. The only problem is, when they get these governments going, they always seem to include us and seem to think that, "Well, you are now owned by whichever government in whatever area you're in." I just completely disagree with that. Stefan: Yeah. I saw Jordan Peterson. You're probably familiar with Jordan Peterson, right? Jeff: Yeah. Stefan: I saw Jordan Peterson speak in the summer. He was speaking here in Winnipeg, Winterpeg, at the Burton Cummings Theatre, and he said something interesting that I thought something that I think people need to hear more often. He said, "The human race for most of history has lived under tyranny. We used to have monarchies. We used to have feudalism. For most, most of the human race, we've had tyranny, and for very brief times, we've had democracies or republics, but democracy lasts for about 250 years. Then it turns into a tyranny, usually, and then after that, turns back into a monarchy." Why do you think monarchies and tyrannies have existed throughout history, and why does it always seem to consolidate power like that? Why can't we just stay as a democracy or republic all the time? Jeff: Well, first of all, I'm not so sure about human history. I think most things we're told about history are lies, and so really, anything beyond a couple of hundred years ago, I really have doubts about what really happened. I really don't know what happened, but I don't trust anything that we're told by the media, or the governments, or the schools, which are all sort of the same sort of people running those sort of things, but what I understand happened is, a few hundred years ago, there was things like kings and queens, and they were doing that quite a bit. They were going around doing similar things that governments do today and say, "Hey, you were born here, so now you have to pay us a certain percentage of whatever you make," and that sort of a thing. Jeff: Really, a few hundred years ago, and it sort of seems to have happened in France, which is kind of interesting, because there's a bit of an uprising happening there again right now, is a lot of people said, "This is crazy. Just because you're born, this whole idea of kings and queens is so insane." I love the Monty Python, I think it was in the Holy Grail one, where the king's walking around, and he's like, "I'm your king." They're like, "You're who?" He's like, "I was born of this mother," and everyone's like, "What?" He's like, "I found a sword in the lake, and therefore I'm your king." They're like, "You're crazy," but for whatever reason, people kind of fell in line with that. Jeff: Of course, a lot of these monarchies were really tyrannical, and they would really, if you didn't pay them, they would kill you, that sort of a thing. That's very similar to governments. A few hundred years ago, people kind of woke up from it, and they said, "Well, this is stupid." The people who were in control at the time really realized they're going to lose a lot of power, and so they came up with an absolutely ingenious idea. That ingenious idea was democracy, which is a totally heinous, evil system of mob rule. If you have 51% of people decide that legally they can kill the other 49%, then everything's fine. Jeff: It's absolutely insane and just keeps people battling each other, but it's absolutely ingenious, because they've managed, through the government indoctrination camps, and through the media, the mainstream media, television, propaganda programming, to tell people that, "Oh, when you have a democracy, then you are the one who rules yourself, and you get to rule yourself by voting once every four or five years. You get to tick a box," and then some guy goes somewhere, and he makes decisions about what you're going to have to give up and how much they're going to extort you and things like that, but it's absolutely an ingenious idea. It's worked now for a few hundred years, and people have really fallen for it, but they're starting to wake up to it. That's what we're starting to see across the world, really. Jeff: We're starting to see that in France right now. Again, they're starting to realize, "This is absolutely insane that we have people ruling us without our permission, and taking our money, and things like that." Even Donald Trump, in the U.S., was to an extent an awakening of people going, "This system is horrible. We've got this total political class that is totally ruling us and just totally enslaving us." Jeff: What they thought was, "Well, we have democracy, thank God. We have democracy, so we can elect someone else," so they elected a kind of a bit of an outsider, Donald Trump, who's best friends with the Clintons and has been involved with central banks and with the Bush family for decades. His family's been very involved with the Bush family, so he's been very involved in the political class, but he came in as sort of an outsider, and you kind of see a lot of people saying, "Oh, he's an outsider, so he can fix things." He's not an outsider whatsoever. It's another sort of ruse in the whole democracy game, but really, that's what we've got today. Jeff: Now, what we've got at The Dollar Vigilante, I cover how bankrupt all these nation states are, how the central banks are printing money until we're going to be, hit hyperinflation very soon, so we're very near the end of this sort of system of these big nation states, of these big welfare states, warfare states, Big Brother nanny states, where everything is controlled, and regulated, and extorted, and taxed, and that sort of a thing. It's all going bankrupt right now, so even if people didn't wake up to what I'm talking about, we're still going to go through a massive amount of change in the next few years as all these systems all go down because they're all bankrupt. Stefan: Yeah. Well, there's a ... Man, Jeff, you said a mouthful there, man. I don't even know where to start, but I'm going to try to weigh in on what you said there at the end. Now, I wrote a book here called Hard Times Create Strong Men. I'm holding it up here for the camera for the people at home, and the cycles of history, as I understand it, goes like this. Hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times. That whole cycle takes about 80 years, and every 80 years, there's a major war, a major crisis, a major reset. 80 years ago was World War II. 80 years before that was American Civil War, and you can trace this back in history. 80 to 100 years, every 80 to 100 years, is a major reset. Now, if you trace that out to the future right now from World War II to now, 2020 is the next "hard times create strong men." Stefan: That's what the book's about is, the men are becoming weak. When men become weak, the backbone of society falls apart. The family falls apart. The churches and the freedom of that falls apart, and what we end up with is some sort of major crisis. Would you say something like that's coming up? Jeff: Oh, absolutely, and I think those cycles are very true. If you just look at anyone who's like a rich kid, so his father most likely worked really hard his entire life and amassed a fairly large fortune, and then the kid comes along, and he's just pampered, and he never does anything. He never learns how to do anything. He never has to learn anything about life, and they usually become idiots, and they actually end up usually wasting or losing most of their money. This is a very natural sort of a cycle that can happen if you're not smart, if, as a father, if you make a lot of money, you don't just give it to your kids. That's absolutely ridiculous. Talk about a really great way to destroy your children, but the big problem with that cycle that you just mentioned that's been going on now for centuries is the government. Jeff: When you get the government involved, it's not just people who are destroying themselves through the cycle of people having to have hard times to get better and actually learn skills and work hard, and then they get soft afterwards, and then their kids get really soft and that sort of thing. That happens all normally, but when you add the government into it, it gets way worse, because then what, that's exactly what we're seeing today in a place like the U.S., which used to be quite capitalist. It has been fully capitalist, really, since its inception. It hasn't been, definitely has not been capitalist since 1913 when they first put in the Federal Reserve and the income tax acts in the same year, which is no coincidence whatsoever. It's been kind of a mix of the socialism, and communism, and fascism since then. Jeff: About what you've seen because of the capitalism, because of the free markets, there was quite a bit of free markets in the U.S. There isn't any more, but there used to be quite a bit. You build up all this wealth, and when you have a government, it always seems to skew to these people going, "Well, now that we have quite a wealthy place, we should be quite giving." Yeah, that's great. Give, but what they're talking about is, the government should steal money from everyone, extort everybody, and then give some of it to some people, which is absolutely heinous, and evil, and destroys everything. Jeff: Even the welfare system destroys the people on welfare, but as I was mentioning, like that whole cycle would happen probably quite normally unless people start to wake up and realize what they're doing, but the fact that we have governments today makes it so much worse, because that's what we're seeing in the U.S. You even see communism is really catching on in the U.S., because you've got all these pampered little kids. They sit there on their MacBook Pro at Starbucks ranting about how evil capitalism is and saying they want communism, and they don't even look up the last 100 years of what communism has brought a lot of places, like the Soviet Union, or Cuba, or Venezuela, and places like that. Jeff: They just, because they're so soft, and they've never really done anything, that's why they call them little snowflakes and things like that, and they become social justice warriors. Really, they're just non-player characters, NPCs, but yeah, the big problem with that whole cycle is government. If we can get government out of the way, then you'd have families destroying themselves over time over and over and not realizing the problems that they keep creating for themselves, but they wouldn't force it all on the rest of us through government. Stefan: Yeah. Wow. I mean, this is some really good stuff, and the snowflake thing, the snowflakism's a reason why I wrote Hard Times, because I had some of these snowflakes in my company. I have a company. I got 13 employees, and these little snowflakes were crying, "Oh, you're mean, and I don't love this. This isn't my dream job, and you make me feel like a piece of shit," and I had people showing up late. Just snowflakism all day, and I said, "Where does this come from? Where does the snowflakism come from?" I started writing this book Hard Times, and it's interesting, because what you said is absolutely true. Stefan: We've had some communist subversion come in from the Cold War into our schools, into our churches, into our militaries, everything, and we got this virus in our brain that thinks that communism is going to save inequality, but in history, communism has never worked. It has never worked once. It ends in massive, massive killing and massive death. There's something like 100 million people slaughtered in the last 100 years with communism. It's something brutal. It's the biggest cause of unnatural death, and every 80 years, we think it's going to work somehow. Somebody somewhere's trying communism. Stefan: As an extension, I've been studying communism, I was watching a show with Stefan Molyneux on Freedomain Radio, and he was talking about how feminism actually spawned out of communism when they started talking about equality, and men and women are equal, and next thing you know, in communist Russia, in 1917, when they switched over to communism, you had all sorts of major problems, where there was one crazy stat was, more babies were aborted than were born. You think about that, it's just a big, crazy, evil system. Why do we get this idea that we think that communism's going to save us from our own poverty? Like why does that idea keep coming in every 80 years into different societies around the world? Jeff: Yeah. That's a good question. I wish I knew the real answer, because it makes no sense. Obviously, these people don't look at actual history. As you pointed out, there's never been one ... It's not like there's been one that really worked out well, and they're like, "Oh, we screwed it up a few times." It's like every single one turns into disaster. It actually makes total sense why, because of human nature. For someone like yourself who's read books by Ayn Rand, you kind of understand the individualist sort of a thing, and that people will always do what's in their best interest. That just makes total and normal sense as human being. When you have this system that comes in and you say, "Okay, the guy at the top decides everything that we're all going to do," you don't keep anything from your work, so that makes it so a lot of people don't really want to work anymore, because why would you work if all the incentives go away to ... Jeff: I don't know about you, but when I do work, it's because I know I'm going to get something from it. I'm not just doing it because for no reason whatsoever. A lot of these people, especially ... Well, what's really happened in the West is that they've really pumped it up in the government indoctrination camps. That's why I say to people, "Get your kids out of the government schools. There's nothing that can be worse than that than having government actually teaching you ... " Not teaching, actually indoctrinating your child for like 12 of its most important years of its building of its sense of self, of its intelligence, of everything. Even Vladimir Lenin, of all people, said, "Give me your child for four years and the seed I plant will never be uprooted." Jeff: It starts a lot there, and then you go home in places like the U.S., or Canada, or a lot of places, and you turn on the television programming, and it's called programming for a reason. You get pro-cops, and pro-presidents, and, "The government saved us today," and turn on the news, which is total fake news. It's just government propaganda, and they're like, "Well, we saved this today," and all that sort of stuff. With the cycles that you're talking about, and we're in the snowflake cycle now of sort of this millennials that have never seen anything hard their whole life. To them, the hard thing they've seen is like when there's a long line at Starbucks or something like that. Stefan: No Wi-Fi on the plane. There's no Wi-Fi on the plane today. Darn. Jeff: Yeah, like that's the hardest times they've seen. Because they've gone through this indoctrination and that they're really, I actually stay away from colleges and universities, because it freaks me out to hang around, like they're all zombies, and they're the stupidest people I've ever met in my life. They're all indoctrinated and programmed. You go there, and half the classes are talking about communism and socialism, so they've got them in this sort of thing, and they're all going out there now. We've seen that ... What's that, there's that U.S. politician, some young girl, is just complete and total moron who's just got selected or elected into Congress. It's called Congress because it's a con game, and it's called the Constitution because that's also a con, and all that sort of stuff. Jeff: You've got those people out there pushing this stuff, and these kids just go out, and they think, they don't know anything better. It's very unfortunate, but that's why it's really important that we continue to push out what we push out, which is more free market stuff. A lot of people do catch on to it. It's not as bad as it seems. The worst place that it really is in the world today is the U.S. They've got everyone ... Not everyone, but most people, they're so indoctrinated, and so brainwashed, and so propagandized, but you go to a lot of other places like Mexico here, and a lot of people are pretty free market. They don't like government and things like that. That's why they make Mexico look so bad on the news. That's on purpose, because it's a lot more free market down here. Stefan: It's amazing. I mean, you moved to Mexico. I have this prediction that Russia right now is a freedom-growing country. They're getting more freedom over there. It's like the 1950s U.S. over there, and then over here, it's like we're a freedom-losing country in Canada and the U.S. It's interesting with, you're talking about the universities being scary. When I get a stack of résumés, and I'm hiring, I throw the ones with degrees in the trash. Yeah, they don't- Jeff: Yeah, me too. Stefan: The people can't think for themselves. I remember I went out with this 18-year-old girl, and she wanted a job, so we went out for lunch, and I said, "Okay, look. What do you want to do?" She goes, "I want to start a social media company." I'm like, "Great. Start it." We're eating lunch. I said, "Great. Start it." She says, "Well, I'm in the business school, and I'm going to get my MBA, and I don't think I can start, because I don't know how," and I said, "Well, go google that. Just start." "Oh, I don't think I know how. I'm not qualified." The school system literally disabled her mind from figuring out how she could just start a social media company. Stefan: I mean, I got some guys running my social media. They're 18, 19 years old, and I just met them at a restaurant. Boom, they're banging out my social media like crazy, doing a great job, but this same girl in the government indoctrination camp, as you say, the universities and the schools, can't think for herself. I also think it's interesting in the colleges and universities right now, the number one read book on economics is Karl Marx. That's just like, that just doesn't make sense. Why don't you tell me a bit, Jeff, why does Karl Marx as the number one economics book not make sense? Jeff: Oh, my God. First of all, he knows nothing about economics. He was a homeless guy who had no money, and he wrote a ... If I was around when he wrote the book, I would have given it a few minutes, or even maybe a few days, maybe even a month or two, of thought, because it sounds really good. Right? Like what is the communist sort of slogan? It is, "Give to-" Stefan: Seize the means of production? Jeff: No, but they have this slogan like, "Someone's needs ... " Stefan: Oh, "To every man's need," or, "To the best of his ability and every man's need," or something like that. Jeff: Something, but basically what it's saying is ... See, that's how stupid it is. I don't even memorize the stupid quote, but basically, it sounds nice. It sounds like, "Yeah, if people can't do things, then you help them." It's like, "Yeah, sounds great," but the way they're talking about is, you have this giant government. They come around. They steal things from people, and they decide who gets your money, essentially, and things like that. Yeah, and it's shocking that ... It's really mostly caught on in the U.S. Like obviously, if you go to the ... You brought up Russia. If you go to Russia, no one wants to read Karl Marx. They'd probably burn that book if they saw it, just because they'd be so angry at it. Jeff: Anyone who's actually lived through communism, a lot of the old Soviet Union, the Eastern Bloc, Poland, and a lot of those places, even Germany to an extent, they still remember a lot of that. That's all you need to know about communism is live through it, and you realize it. That's one thing that I always thought that's funny is, you have all these people like Bernie Sanders and all these people, and they're so pro-communism and socialism and all these sort of things. It's like, have you ever even just gone to Venezuela even for a weekend? Because I was there like a year and a half ago, and it was pretty bad. Jeff: I remember being there about 15 years ago, and it was really nice. In fact, you can look up Venezuela back in the '60s and '70s. It looked just as nice as what you see in the videos of the U.S. People got around in nice cars, looking all nice. Everyone's looking good and happy, and they have lots of food and all that sort of stuff, and now it's just a complete and total disaster, so ... Yeah, you have some people still ... It's mostly in the U.S., though, I have to say [inaudible 00:23:04]. Jeff: I meet a lot of people from the U.S., and they say, "Man, this whole world's going to hell." It's like, actually, it's not too bad. Most of the world is pretty good. It's really the U.S. is like, and Canada is almost just as bad now, and when you go to the universities, as you pointed out, and I do the same thing, I have only hired one university graduate ever, and it turned into the biggest disaster I've ever had. He was actually a producer at CNBC, I hired him in 1999 to head up a video department of a internet company I had, and he was a total disaster. He was an MBA, and I had all the, all that stuff, and I ended up having to pay him out like two years' salary to get him to leave, that sort of- Stefan: Oh, my God. Jeff: But yeah, so I just stay away from the universities. As you pointed out, if I ... I've got a number of businesses myself, so if someone's interested in working with us, I'll ask them what they do, and if they go, "Well, I just spent the last eight years in university," I'm like, "Well, you don't make very good decisions, do you? You [inaudible 00:24:00]-" Stefan: Bro, I'm going to give you a gong for that. Boom. I want you to instant replay that for the kids at home. "If you're hanging out in university the last eight years, you don't make very good decisions, do you?" Tell me why that's a bad decision in 2019. Jeff: Well, I'm sure there's probably a couple courses you could take in college that make some sense somehow. I've never seen them, though, but I ... There must be a couple, but the reason that it makes no sense in 2018, 2019, is because we have the internet now, and all information is on the internet. You don't have to pay $100,000 a year to go sit in a room with probably a unionized teacher who's never done anything his whole life, that's why he's a teacher, he doesn't know anything, and sit there with a bunch of other idiots like you, because you don't know anything, they don't know anything, and learn about socialism-type stuff pumped into you. It's a complete and total waste of time. Really, the best- Stefan: You mean it's a virgin sex therapy class, so the guy teaching, it's a virgin, but he's teaching sex therapy to everybody? Jeff: Yeah, that's one good way to put it, but yeah. It's just a waste of time. I think trade schools or something, where if you're going to become a mechanic, so you have to work on cars, so you can't really do that over the internet, I think that makes some sense, but 90-percent-plus of what you go to college for is just a complete and total waste of time that you could just totally learn much better stuff on the internet. It actually just came out, I don't know if you heard this, but Google and Facebook just said that they've removed university education as one of the requirements to work there. I think they're really slow and late to do that, but I think they're starting to realize, it's like, "Man, the people we're getting from the schools are just brainwashed idiots, whereas the young guy who's sitting at home just hacking away, and going on the internet all day, and figuring everything out, those are the kind of guys you want." Stefan: Yeah. I got a policy in my office, and when people come to me and ask for stuff, I say, "Google it, or handle it." Those are the two things, handle it, google it. Google and ... I think it was Google, Apple, Facebook, they don't need degrees anymore. I think that's been going on for some time, but it's an official statement now. Right? That's like super, super official. Jeff, let's go back to collapse of society and things like that. One thing that's common in history, and I've studied it over and over again when these collapses happen, it's usually, the people can't buy bread. The nonsense can keep going on. The ... Stefan: I've got the numbers in my book here, Hard Times, about minimum wage, and minimum wage in 1968, indexed to gold, is 103,000 dollars U.S., so you work at McDonald's, you made one cheeseburger, one hamburger, French fries, Coke, and a milkshake, you made 103 grand in purchasing power back then, indexed to gold. Same guy today making a cheeseburger, hamburger, French fries, well, he has to make 150 items down at McDonald's. They got a crazy menu. Stefan: Same guy at McDonald's makes 13,000 a year, so he's lost 90% of his purchasing power indexed to gold, and this shenanigan with the money system where the banks and the government rob people through inflation every year, and then suddenly, at some point, it keeps going, going, going, going until the average man can't buy bread. That's when the Russian Revolution happens. That's when the French Revolution happens. Why does that pattern keep happening over and over again? Jeff: Well, first, let me just mention that the reason that these jobs have gone so far down in value is because of the central bank. It's because of money printing and inflation, and that's why you pointed out those numbers in inflation terms. You have a lot of people out there today who are like, "We need to raise the minimum wage," which is, what you're saying is, "We need these people who extort us, called the government, to go out with guns and force businesses to pay us more because we can't afford to live." Well, the reason you can't afford to live is because you've had most of your stuff stolen from you by the central bank, and the central bank, by the way, is a tenet of communism, and that's why I say the U.S. is nothing even close to capitalism today. Jeff: Actual communism has already destroyed most of these people. You ask about revolutions, and yeah, it seems that people, this is one thing you can say about anarchy, a lot of people think about anarchy, "Well, if there was not government, it'd just be chaos, and horrible, and everyone would just kill each other." It's actually not true. Your average person, and this relates to your question, your average person just really doesn't want to do too much. They want to have a nice little life. They want to have a family or whatever, or they don't, but they want something nice, and that's about it. They don't want to go out and rock the boat too much. Your average person just does not want to rock the boat, and that's what ... Jeff: That's one of the problems we have today is, we have the statist system, and most people are just too scared to change it, but it appears, at some point, when you finally run out of even just food, and you can't even eat anymore, that's when finally people start to wake up, and stand up, and demand some sort of change. When I say demand, the problem is, they're demanding from the government change. What they should really realize is, the government caused it, the central bank caused it, and just break away from this system and stand up and become their own person and not be a slave to the systems, but yeah, it's unfortunate that your average person, for whatever reason, will wait until they're basically starving before they actually face the real problems in the world. Stefan: It's interesting in history, I think Putin kicked out the central banks. Is that right? Jeff: I'm not sure if Putin did, but the ruble basically collapsed. I don't think they had a central bank, definitely, at the start there. Stefan: Well, I've heard Putin's kicked out the central banks. I think it's interesting is, Hitler did that back in the day. I guess Germany was so poor, and they were so messed up, and they couldn't make their war reparation payments. They just couldn't pay, and that's how World War II started is, a bunch of people, super poor, couldn't pay their payments, boom, world war starts. It's interesting, because somehow, in the system, the political system, they go right versus left, and the right versus the left, and the left versus the right. Really, it's the same kind of thing. Nobody points the finger at the central banks. Stefan: One thing I love about America that still stands is, there's 300 million guns in the States and 300 million people, and they keep that gun amendment in there because they know that tyranny's going to come at some point. They left that in there, and if people can't buy bread, or they're really hungry, that's where those 300 million people with guns are going to rise up. Do you think we're going to see something like that in our lifetimes? Jeff: Yeah, definitely, because the U.S. is going to collapse in the next few years. It's not going to be decades, because it's so bankrupt. We have 22 trillion dollars' worth of debt now, so we're basically ... I said when I started The Dollar Vigilante that the U.S. dollar will collapse by the end of this decade, so we've got about a year left. I think we're pretty close to on track. That's how close we are to the end of this system. Yeah, we're definitely going to see collapses anyway. As far as people in the U.S. having guns, I think all people should have the right to defend themselves, obviously. I don't think anyone should be able to say, "You can't have this," if you're not hurting anyone else, and that's what government does, of course. It's very good. That's the only thing left in the U.S. that is keeping it from being complete and total carnage is that the people still can protect themselves, so the government has to be very careful about how they enslave everyone, but they've done an incredibly good job of enslaving people. Jeff: When you think about how the U.S. started, it started over the Tea Party, where it was a tax from England on tea, and that was it. It wasn't a tax on everything else, income tax, and capital gains tax, and smoking tax, and hotel tax, and food tax, and all this sort of stuff. It was just a little tax on tea, and that started the so-called American Revolution. Now you have people in the U.S. today where you have taxes that are over 50%. It's probably closer to 60 or 70% when you add up all the taxes, because literally every single thing in the U.S. is taxed today, including death. Death has a tax, and so when you die you get taxed. You still don't have people wanting to revolt. It's because, again, people are fairly, if they have a decent life, they don't tend to want to change things too much. You look at the U.S. and your average person, even poor people have a television. They probably even have a car. Even poor people have cars in the U.S. Jeff: That's how much free markets, even the poorest people are still ahead of a lot of other people in the world, and so because of that, they don't really want to have a revolt or anything like that. Plus, they don't even ... Because of all the years of government indoctrination and all the war propaganda about how they're trying to save the world by spreading freedom by bombing the entire world in the War on Terror, war of terror. It's absolutely insane, but your average person just doesn't seem to want to even break out of this system. Jeff: What's going to probably happen is, that system's going to collapse on its own because of all the debt and go into hyperinflation. Then hopefully, and you brought up about how Russia's become much more free market now. That's what happens. The same cycles that you mentioned before when you have countries, they usually start off quite small and poor. Even the U.S. was like that when it first started. Because it had a lot of freedom, it becomes quite rich. Then they get soft because of that and because of government and statism, they start doing socialism and all these sort of things which start to destroy everything. They start putting kids into the government schools and all that, and they get worse and worse until they eventually totally collapse, like the Soviet Union. Once it has a total collapse, then you can actually have free markets again. The U.S. actually, once this collapse happens, and after a few weeks or months, and that's sort of what happened in the Soviet Union as well, it takes a little bit of time, like weeks or months, definitely not years, then you can start to rebuild immediately again with free markets. Jeff: We've seen how the free markets, if you just allow people to be free, you just have to look at places like Hong Kong. That was a fishing village like 200 years ago. Look at it now. I don't know if you've ever been there. It's amazing to even go there. Singapore, even 100 years ago, was a fishing village. It's now one of the most luxurious, wealthy places in the world. Dubai was just desert. They just started doing like low-tax, no-tax sort of stuff, and all of a sudden, there you got like indoor ski parks in the hot, 150-degree desert. Once you have like all this tyranny, it will eventually collapse. Then once it collapses, you have freedom again, and then things take off again. Jeff: Really, that's the whole point of what I do at The Dollar Vigilante is, that's our actual tagline, which is, "Helping you to survive and prosper during and after the dollar collapse," because if you can hold on to some of your assets, and if you can get through this collapse that's coming, we're going to go on to amazing, prosperous times again, but if you have no assets, you'll have to work a lot harder to get back up, but if you have kept some of your assets and things like precious metals or cryptocurrencies, once everyone else gets wiped out, and all the banks close, and the currency becomes worthless, you'll be one of the richest guys around, and then you can start rebuilding the new free market. Stefan: Yeah. There's two cycles that are coming to an end. I wrote about this in my book, Hard Times. One is the 2020, which is that 80-year cycle of war. That's an important one to watch. Hard Times Create Strong Men. Then the other one is the 250-year cycle of democracy. Democracies only last about 250 years, so if the U.S. was born in 1776, it's going to be dead by 2026, so somewhere between 2020 and 2026, we know there's probably going to be an end of democracy, probably usually goes democracy into tyranny, and then tyranny back into monarchy usually is what happens. We'll see something happen. Do you think it's going to go back to tyranny and monarchy, or do you think it's going to go just to open freedom? Jeff: Yeah. A really good question. I don't know how it's going to play out. I could definitely see the tyranny part coming after this. What will likely happen, and probably be Trump will be in, his regime will be in as this collapse happens. As everyone's gets wiped out, as the banks close, as it's complete, way worse than 1929, Great Depression, someone like Trump will become sort of like Hitler-like in that sense, in that he will be the strongman who will lead the country out of this. Because of that, we're going to need more laws, and of course, Trump has been pro-asset, civil forfeitures, having the police just take whatever they want. He even came out recently and said that he's okay if the cops go and just take everyone's guns and then figure out if they did the right thing afterwards and go to court in that afterwards, so no due process and things like that. Yeah, I could totally see that we have this collapse in the next couple years. Jeff: It leads into a very sort of like Nazi Germany like sort of like tyranny type thing, and perhaps war, because the U.S. does have a massive amount of military just sitting there, and of course, if you're desperate, and if you're broke, and if your people are all crying out for something to be done, and of course, what do they always say on the news, the television programming? "Well, it's always Russia. Russia's always messing with us." Russia's not doing anything to the U.S. whatsoever, but they've been putting this into place, and they also mention China a lot. Yeah, they'll probably go into some sort of major war at some point. The key for people like us will be to stay outside of it and let them all go through this, again, if they want to go through this again, which is unbelievable. Jeff: There's lots of stories of people surviving through all of these, World War II, World War I, the Great Depression, and coming out way ahead afterwards, and even surviving quite well through it. A lot of them would go to places like Argentina or whatever for a few years, wait till all the craziness dies down with their assets and things like that. That's really the key, and to me, it's, we can't change everyone else. I wish we could, but we can't. Jeff: Actually, I don't wish I could. That'd be a huge responsibility, to change everyone else, but I wish that they would be a bit more able to see what's going on, but if they can't, really all that's left for us to do is to take care of ourselves and to keep spreading this information the ways that we can do it, but if they're going to go ahead and destroy the whole world with their statism, and their craziness, and their communism, and socialism, and fascism again, then it's really just up to us to survive and prosper through it and then try to be there to help rebuild once they get through doing it all again. Stefan: There's two interesting things that come to mind when you say that. There's the Hitler-Trump connection, which I think is super interesting. There's two things I want to allude to. There's the Hitler-Trump connection, and then there's another one, an Abraham Lincoln and Trump connection. When you look back in history, so if we go back 80 years to World War II, Germany was one of the most advanced civilizations on the planet, probably actually was the most advanced in science and medicine. They were so broke, they were so poor, they were so hungry, they were so messed up that the Nazis became popular, because Hitler was offering them a better life. He said, "Look, here's a better life. We can have a better way." People got behind that, the most sophisticated, probably, society on the planet went into absolute terror at that time. Stefan: I think there's a similar thing going on in the U.S. You've got a huge amount of people on food stamps. People are poor. People are pissed off, so they elect a strong leader. It's not ... It's interesting, like if it wasn't Hitler back in World War II, it probably would have been somebody else leading them, because the people were so poor and so messed up ... I like what Jordan Peterson said in the summary. He said, "You don't have an idea. An idea has you." That idea had Nazi Germany. I think there's a similar idea in the Brexit right now. There's a similar idea in the United States, and then that's the 80-year cycle. Stefan: If you go back 80 years before, you got the Civil War, the American Civil War, and Abraham Lincoln got shot. It's interesting, because Lincoln was a guy that wasn't totally popular with half the country. He got assassinated, and those things are all kind of floating around. You got a Trump, Trump-Hitler-like ruler there. I mean, I actually like Trump, personally, but at the end of the day, there's a sentiment in the country and a feeling around that that's Hitler-like, and then there's also an Abraham Lincoln kind of feeling where do you think he could get assassinated? Jeff: Look, I think it's possible. I think most of those sort of things, they're all actually orchestrated. JFK, for example, I believe that was Lyndon B. Johnson and the CIA who took him out. Ronald Reagan, that was the first Bush, the one who just died, George W. Bush, or sorry, George Bush, who was behind the assassination attempt, so-called assassination attempt, on Ronald Reagan. It's usually like an inside sort of a thing. It's really controlled. It's really theater. They actually keep all these things, including Putin, including little Kim in North Korea. They're all controlled by the same people, and it's just this big theater to keep people just mesmerized and watching their CNN and, "Oh, what did Trump say today," and all that. It's just no different than people in North Korea like, "What did little Kim say today? What are we supposed to do today?" Jeff: That sort of a thing, but anything is possible, but it is pretty tough to assassinate the president, as an outsider, but as an insider, it's not that hard, but they also seem to have some sort of weird like almost like protection around them. Like even George W. Bush, when he was in Iraq and the guy stood up at the media thing, and he was very mad, because Bush had been destroying his country and killing his family and all that sort of stuff, and he threw one shoe, and Bush just did the little dodge and just missed him, and then threw another shoe, and he just ... It's like, I don't know what it is with these people. They're kind of like, I don't know what it is, but it seems like he can't really get to them that way, not physically violent sort of thing. I think the only way we get rid of all of this is for people to wake up and realize that these people don't own you, and start to move away from these systems, and these people just go away and have to get real jobs. Stefan: I think one of the problems with human nature and people, I mean, you were talking about human nature and communism, where human nature doesn't work inside of communism, and then there's also another side of human nature, which is, I think humans have a hero worship, innate hero worship ability where we see someone, we see a leader, and we just want to worship them, and we want them to handle our problems. We want to have a personal Jesus. We want to have somebody we can just give it all to. Somehow, that's going to be the easy button. It'll all be solved, and then we don't have to think or deal with anything. Would you say that's true? Jeff: Oh, absolutely. That's exactly what government, it really is. That's what government always does. You look at every election. They come up there, and they give all these promises. "I'm going to solve this for you. I'm going to solve that." They never solve anything. They're just extorting you and destroying everything in the process, and making everything worse in the process, but yeah. That's absolutely the case is, your average person just won't take responsibility for themselves and just say, "I don't need this person to run this entire country for me. I can run myself," and that sort of a thing. Of course, it gets a little interesting how that would all, we've been in statism now for hundreds of years, so to actually break away from it's going to be difficult. Jeff: That's actually why we're starting up numerous sort of countries across the world now, so we've started Liberland in Europe, which is near Croatia and Serbia, which is a new sort of anarcho-capitalist country that's just being started, and there's some few others working on buying some islands, and we're going to start some totally anarcho-capitalist free sort of places there. We're also seasteading, so we're trying to start up in the ocean, start up our own little, what you call countries. None of them are really like countries, because there's no real government, but it's a place that we're going to start up that it's going to be completely free. Then through that, hopefully we could show the world, because they've never really seen it, what life would be like in a true free market. Jeff: If, all evidence seems to point to when you have a totally free market that it's incredibly good for most people. It just increases the wealth dramatically, as we've seen, as I pointed out, in places like Hong Kong, Singapore, Dubai. Whenever you have a lot of freedom, everything gets a lot more prosperous. The only sort of question a lot of people have is, "What if you have total freedom? What would happen?" We don't really have any good examples for that yet, so we're hoping to start do that in the next couple of years and try to show the world the light that, really, this governmental sort of statism system with central banks, and all these sort of things, are just absolutely terrible. The best thing for all humanity is to get rid of those sort of things and not have a belief in their authority. Stefan: Sounds like a page out of Atlas Shrugged right now. You got all the productive smart people wanting to go start their own country or start their own island. This is, it's just human nature. It's all written down in the book. It's all happened before, and here's a thought, Jeff. I don't know if you thought about this. At some point, there probably was some nice, true freedom in the Wild West, maybe, Wild West America or some place, and then at some point, the people organized themselves. At some point, there's a government. At some point, there's a king. At some point, there's a good king. He dies, and then you got his son, the bad king. Stefan: Do you think we've had freedom in history at some point, like true freedom, and then it just got consolidated into power? Because it seems to me that whether you look at a market like a real estate market, or you look at a Monopoly board, or you look at anything in life with humans, it seems that there's like always a consolidation going on. There's a consolidation at some point where somebody just ends up taking over, and we just end up in that over and over again, and the dominoes fall down at some point. We reset. Do you think we can actually exist as free people, like truly, or do you think someone's going to seize power at some point? Jeff: Well, the thing is, if you have enough people who actually believe that freedom is the way to go, and they want to do that, then no one can seize power, because there's nothing there to seize. You pointed out rightly that over history, it appears that people have always been okay with giving away their power to someone else and hoping this guy takes care of them all, and that never works out for the best, just like communism, it just never works out well. Jeff: Yeah, that's actually been the case over time is that people seem to have always sort of gravitated into these sort of things, but at the same time, when you think about life even today, we actually live in a state of complete anarchy right now. It just so happens that there's a lot of governments on earth which you can just consider to be criminal organizations who are stealing and extorting people, and kidnapping people, and forcing them to do things they don't want to do, but we actually live in a state of anarchy. Jeff: Your average person, actually, every single day of their life, pretty much lives in anarchy. When you're in your home, or you're talking to your friends, or you go to work, that's just anarchy. That's just day-to-day life, and there's no one there telling you what to do, except for a street cop or whatever, a road pirate who might try to extort you if he thinks you're going a little too fast over a arbitrary speed limit or things like that, but generally kind of already live in anarchy. Really, the important thing to understand is that the word "government," what it really means, "govern" is, the word "govern" comes from the Latin [Latin 00:46:24] which means to control, which makes a lot of sense, and the word "ment." Jeff: There's a lot of different sort of where that came from, but I lived here in Mexico, Spanish, [Spanish 00:46:34] is mind, so really, government is mind control. It's controlling people's minds to make them believe that this thing has authority over them and that it's sort of taking care of them as well. This is where we get into Stockholm syndrome and things like that, where people actually begin to really adore their kidnapper, the person who has basically kept them enslaved. I see [inaudible 00:46:56]- Stefan: I wanted to give a gong. At some point, you got to stop for me to give you a gong. I didn't know that "government" meant mind control. It's really interesting, because if you control the information, you control the thoughts, and if you control the thoughts, you control the stories. You control the stories, you control the beliefs. If you control the beliefs, you control reality. It's almost like ... In Hard Times, I talk about we almost live in a 1984 future from George Orwell, and some of it's like Brave New World, Aldous Huxley, which was Orwell's mentor. We got half of our stuff is the American Aldous Huxley Brave New World future with orgies, and synthetic music, and all these women with narrow hips that don't bear children anymore, and we have alphas, and betas, and gammas, and deltas and all that stuff, and epsilons. Stefan: Then the other part of our world is like the 1984 future where there's three gigantic powers that are always at war with each other, and it's like a Stalinist future. What do you think about those two books right now, Jeff, like 1984, Brave New World, and what we got going on right now? Jeff: Yeah. Both those guys, both, I think they went, both went to Oxford or one of those major schools. They hung out with the same people like the Bush crime family and all those, so they hung out with what you could call the elites, or some people call them the Illuminati or whatever words you want to put to these sort of secret societies that mostly sort of are in these schools like Oxford and stuff like that. They were actually good friends, as you pointed out, and it's really amazing that that long ago, what is it, like 60, 70, 80 years ago, they wrote- Stefan: It was 1945- Jeff: ... these books. Stefan: ... I think. It was like right after World War II the books came out. Jeff: Yeah, so I can't do the math. I went to government schools, but 70 years ago, whatever it was, and they've really just roadmapped the exact both ways that we're going. Actually, they're both happening at the same time. The Aldous Huxley, Brave New World, that was a lot of bread and circuses. The people would be too dumbed down, which we're seeing, through fluoridization in the water, through all the government indoctrination camps, through the television programming, all that sort of stuff. People are just watching the Kardashians and all that. Jeff: The sports, so the sports ball games, and that sort of thing, so people, that's what Aldous Huxley was saying is, people would be too dumbed down and too into these things like sports and entertainment to even notice that they're enslaved. That's what we have today, especially in the U.S. Then on the other side, there was Orwell went the other way with a bit more it's like a hard, top-down dictatorship. You can't say anything. Everything's the opposite of what it means in political speak, which is what we have today. You brought up about how there's these certain sectors of the world that always at war. East Oceania's always at war with whatever the other one was. That's what we have today. It's like, who's at war with who? This War on Terror, it's a war on a feeling. It's a war on, it's like terror is a feeling. It's like, "I was terrified when I saw that. We need a war against that." It's like- Stefan: Well, we got the- Jeff: ... "Who are you [inaudible 00:49:47]" Stefan: ... War on Drugs which doesn't work. We got the War on Terror that doesn't work. You got the War on Cancer that doesn't work. You got all these wars. They keep just funneling money into a couple dudes' pockets, and the War on Drugs makes drugs worse. The War on Cancer makes cancer worse. The War on Terror makes terrorism worse. It's pretty scary how those things just simply don't work. Jeff: Yeah, and it's all by design, like the people who really do these things know this is what's going to happen. It's just sad that people keep falling for it, but people are slowly waking up thanks to the internet. Yeah, I even saw like, who's that blonde, fairly not attractive, woman on U.S. TV who's like a really mean, nasty sort of ... Anyway. She just came out, and she just said all these wars are just stupid. They're just like, like we shouldn't be doing them. She was like a total war sort of a person. This just came out. Jeff: People are starting to wake up, but the biggest issue is, they don't know what the answer is, and so that's why they keep going back to what you pointed out, which is this false left-right paradigm, which they tell everyone that's all there is. There's left or right or somewhere in the middle and there's nothing else, but that's a very narrow range of political spectrum. That's basically statism right there, and you can have left or right in statism, but there's a whole other spectrum of just not having governments whatsoever that could really free a lot of people. It's really growing, actually, like when we first started Anarchast, Anarchapulco, Anarchapulco started five years ago. It was 150 people. We're now expecting about 3,000 people. It's doubled every year. Stefan: Wow. Jeff: My show, Anarchast, a lot of people said no one had ever watched the show, but anarchy, that's crazy. They think anarchy is throwing bombs and all this sort of stuff, but it's catching on. People are catching on to a lot of this stuff now, so we're going to see what happens. We're at an amazing time in human history, because all these things are coming to a head all at the same time. All these governments are bankrupt. The central banks are about to go into hyperinflation. Then we have people waking up and starting to realize what's going on, and then you still have all these people in the universities who think that communism's the way out, so they'll probably try to push for that. Jeff: It's just amazing, incredible time, and there's going to be so much change in the next 10 years. I don't think anyone will believe what happens over the next 10 years. I couldn't even imagine what will happen, but I know it's going to be mind-blowing what happens. It's going to be that much change. Stefan: Yeah. It's unbelievable. Now, Jeff, I got to wrap up the show, but I want to ask you a couple questions I ask every guest, because I think they're cool. If you can go back in time to, let's say, 15-year-old Jeff and give yourself a piece of advice, what's a piece of advice you'd give yourself? Jeff: Oh, man. That's a good question. I would say work on yourself. I really just started working on myself over the last couple of years. I'm like 48 years old now, and it's changed my life dramatically. I didn't deal with a lot of my past issues, childhood issues, a lot of the programming that we get from our cult, our culture they call it, but our cult, through our younger years. That still stays in your head. I think if I would have, if I could go back, I'd say, "Buy Bitcoin as soon as you hear about it," and I'd- Stefan: [inaudible 00:52:55]. Jeff: ... say, "Work on yourself," like- Stefan: [inaudible 00:52:57] man. Jeff: I'd probably also say, "Don't go to the bars that much. Don't be having a lot of drunken sex. It's a total waste of time. Try to find a good girlfriend. Try to fix yourself and work on yourself more than anything." That's what I'd tell him. Stefan: Wow. Great answer. Top three books that changed your life. Jeff: A good question again. We talked about G. Edward Griffin earlier. The Creature from Jekyll Island was one of the first books that got me looking into all this stuff that I talk about today. That was a really important to my life. I'd say The Lord of the Rings is, I read it when I was very young. I used to love to read. I was probably like 12 or something. This giant book, it's even bigger than your book there. What I didn't realize about The Lord of the Rings that is interesting, I love the book, and I loved everything about it, and it wasn't until a couple years ago I realized that that ring of power was actually a metaphor for government power. I actually looked- Stefan: Wow. Jeff: ... into it a couple years ago, and J. R. R. Tolkien, who wrote the book, called himself an anarchist, so that entire book was an allegory about the problems caused by government. Those two books are pretty good. I guess the third book that I thought was really interesting, and it's like a pamphlet. You can read it in about two hours. It's called The Market for Liberty. You can actually find it online for free in PDF format, and it shows what the world could be like without government. When I read that book, it just blew my mind, because I'm sure if you even read it, you'd go, you'd be like me, you'd be like, "Wow, I never thought things could work that way or that ... " Jeff: They actually thought about how things would work without government, so there'd be like private security companies. Well, how would that work? Well, there'd be insurance as well, so the insurance companies ... For example, like people go, "Well, how would you put out fires without the government?" Which is kind of funny, because the government rarely puts out fires [inaudible 00:54:34]. Stefan: Fire insurance. Jeff: Yeah. Fire insurance, and then the insurance companies have all this insurance money, and they'll have to pay out a ton if there's a giant fire, so they actually put out fire stuff, and fire stations, and all that kind of stuff so it can all work in the free market. I think that book really, in just such a small amount of time, can really just show how the free market can handle everything. Stefan: Yeah. Well, that's great. I always, people say, "Well, who's going to pay for the roads?" Well, you just tax cars and gasoline. If you got a car and gas- Jeff: Not even tax, right, but like the businesses would own the roads. You would never put up ... Let's say you're Walmart, and you want to put up a Walmart somewhere and there's no road there. You're going to build the road, because you want people to get to your thing. Plus, not to mention there's already all roads. All roads that already exist. I don't know why people think they'll just disappear, but obviously like gas stations would have a giant interest to making sure there was roads, so they would probably do something. The gas stations would all work together and say, "Okay, let's take 10% of all of our money that we make every month and put it into maintaining the roads." Right? It's fairly basic sort of stuff. Stefan: Right. All right. Second last question today, Jeff. What's the one thing that young people need to succeed these days? Let's talk to the snowflakes. Let's talk to the millennials, the guy with the MacBook Pro at Starbucks. What's something you want to say to h

Jeff Neumeister, Founder and CEO of Neumeister & Associates, joins us today to talk about cryptocurrency taxes, a confounding area of tax law (what isn’t?) and one that you should master if you are an investor in digital currency. Because what you don’t know could have an adverse impact on your pocketbook. That’s what happened to one U.S. college student in 2017 who invested $5,000 in Ethereum and somehow would up owing the IRS $400,000 in taxes. Yes, you stand to benefit greatly from understanding how the IRS views crypto (Hint: It’s in the same category as your house). And you’ll learn the cardinal rule of crypto taxation: The buck stops with you.   This is specially important this year after the 2018 market crash since many investors are selling their cryptocurrency and fleeing the market, without full knowledge of the tsunami of capital gains liabilities that these transactions may be triggering.   A forensic accountant by trade, Jeff brings great credibility to the task of walking us through the minefields of crypto taxes. He offers practical tips on everything from what constitutes a taxable event to what makes crypto taxes so challenging and how mined coins are taxed. That’s just a few of the questions Jeff answers in this episode. You’ll come away feeling a lot more confident about understanding your tax burden as you stagger into your tax prep marathon.     Topics Covered in this Conversation with Jeff Neumeister   What makes crypto taxes so challenging. What constitutes a taxable event? What is the difference between short-term and long-term gains? How are mined coins taxed? What happens if I give some coins as a gift, or someone gives me crypto? Do I have to pay tax on coins that were hacked? What happens if I lose some coins? What are the acceptable ways to report coin gains? What are the biggest obstacles to easily filing crypto taxes? Increasingly, there are charities that accept crypto. Is that something that would be helpful at tax time?  How are exchanges doing in terms of making it easy for investors to file taxes? Can crypto losses be balanced against traditional fiat capital losses. What’s the craziest thing you’ve ever seen or heard with it comes to filing or not filing crypto taxes. Let’s step back a bit and look at the process involved - let’s look at two scenarios: Scenario A: Let’s say you are Sally Fey, a beginner investor in 2017 and you got all caught up in the buying and selling during the Bull Market and you didn’t track all the coins you traded across multiple exchanges nor did you jot down the buy/sell price  for each transaction. Now your taxes are looming and you have your head in your hands. How do you regroup? Scenario B: Unlike Sally Fey, you are Matt Jones -- a beginner investor in 2019 and it’s a Bear Market and you’ve been told now is the time to buy. You’re starting with a clean slate. You’ve set up your exchange accounts, you are ready to trade. What’s good tax hygiene you should follow from Day One and on to Day 365 to simplify your tax headache for the year? Can you get away with NOT paying crypto taxes? What are the penalties for non-compliance? Any closing thoughts on how to make our crypto tax lives easier?   Questions and Comments? chasingunicorns@gem.co   Guest Contact Information Jeff Neumeister Website | LinkedIn | Twitter Resource Links: 3 Ways the IRS Is Taxing Cryptocurrencies Taxes and crypto Turning your 2018 Bitcoin and Crypto Losses into Tax Savings What You Don’t Know About Crypto Taxes Can Hurt You Tax Nightmare: Student Invested $5k in Ethereum & Now Owes $400k in Taxes 4 things to know about your cryptocurrency at tax time Year-End Tax Tips And Strategies For Cryptocurrency Investors IRS Guidelines Transcript: Interview with Jeff Neumeister Interview Recorded On: November 12 Topic: Crypto Taxes Chitra: Hello, and welcome to Running with Unicorns, your portal to the world of cryptocurrency. I'm Chitra Ragavan, Chief Strategy Officer at Gem. It's that time of year again, and your crypto taxes are looming. Here's what you can do about it. Our guest today is going to walk us through the ins and outs of crypto tax filing. Jeff Neumeister is CEO and Founder of Neumeister & Associates, an LA-based tax advisory firm with a growing practice in crypto taxes.   Jeff, welcome to the program.   Jeff: Thank you.   Chitra: What makes filing crypto taxes so challenging?   Jeff: It'd be probably because there are so many different things that are happening in the crypto world. It's not just mining coins or just trading coins, but there are forks, airdrops. There's just a lot happening. Because it's a new space, it's a lot that the taxing authorities are still trying to wrap their heads around.   Chitra: Let's start with the basics. What constitutes a taxable event in cryptocurrency?   Jeff: A taxable event is anything that results in a tax obligation or a potential tax obligation. That could be selling something, it could be generating income, it could be incurring a expense.   Chitra: Is it different than in regular taxes? What are the differences and similarities?   Jeff: It's similar in concept, except with cryptos there's just, again, so much more going on. Normally, if someone is just, say, a W2 earner, they have a paycheck, and that's the sole source of income that is subject to tax. With cryptos, however, if you're mining and trading in the ICO world, there's so many things that are happening that you're constantly subjected to different types of taxes.   Chitra: One of the basic things one needs to know is short-term and long-term gains. How does that work?   Jeff: Short-term gains just refer to anything, anytime you hold an asset or a piece of property for less than 12 months. Long-term is anything above that. Now, they also come along with different taxable rates. With long-term capital gains, it could be anywhere from 0 to 20%, so much better than what most of us pay with taxes for our income earnings. For short-term gains, it's anywhere from 10 to 37%. Short-term capital gains are essentially the same as ordinary income tax rates.   Chitra: Let's look at different types of crypto and how they will be impacted by taxes. Let's start with if you're mining cryptocurrency. How do you account for those?   Jeff: Mining's interesting, because it's kind of two things at once. When you mine a coin, or a fraction of a fraction of a coin, you're generating ordinary income, so whatever the value of the mined coin was, or fraction of a coin was, you have to pay ordinary income taxes on that. Then, that also establishes your cost basis in the coin that you now hold. If you do something else with it later on, trade it or sell it, you'll have capital gains on top of that.   Chitra: Then, let's look at crypto gifts. If you get a gift of Bitcoin, or Ether, or EOS, how do you handle that when it comes to tax time?   Jeff: If you're the receiver of a gift, then you just need to be aware of what the holder's or the donor's cost basis was. If they acquired something for, say, $100 and gave it to you, you need to make sure that you have that down in your records that your cost basis is $100.   There's no tax owed on a gift received. However, if you're the gift giver, you might have to do a informational filing, a form 709. What that is is anytime you gift more, at least in 2018, more than $15,000, you have to file a form 709. You don't have to pay gift tax on that, but if you exceed your gift-giving of $5.6 million during the course of your lifetime, then you have to start paying gift taxes.   Chitra: If only we could all be so lucky.   Jeff: Right. Most of us will never have to worry about that, but make sure that you file a form 709, because there are penalties with not filing.   Chitra: Then, can you give crypto to charity? I see that increasingly, there are a lot of, even the Red Cross and other organizations accepting crypto. When that happens, is that a good thing to do, when it comes to tax time? Obviously, it's a good thing to do in any case, but it probably helps with taxes, doesn't it?   Jeff: Absolutely. It's just like any charitable contribution, except instead of giving clothes, or fiat, or artwork, or jewelry, you're giving cryptos, yeah.   Chitra: It's taxed similarly?   Jeff: Yes, mm-hmm (affirmative).   Chitra: Then, if you're hacked, what happens? You're losing a bunch of coins because you got hacked. Do you have to pay taxes on that?   Jeff: No, but you have to make sure that it's documented. It's the same thing as if someone came into your house and burglarized it, right? It's a casualty loss. That would be an itemized deduction. You have to make sure that you record those things. Chitra: What if you just lose your crypto? Like, they're on some exchange, you don't know where it is, or you've lost the password. Can they figure it out that you have this crypto? How do you account for the missing crypto?   Jeff: That's a little bit more challenging. If you no longer have access, say, to your key, and you'll never obtain access, then that could be construed as a casualty loss, as well. If you just say, "I don't know which exchange it's on," hopefully that won't come up if you're audited, yeah.   Chitra: And if you are?   Jeff: Then, as long as you show a good faith effort in being consistent and transparent with taxing authorities, and they could see that you're not trying to hide anything, then you should be okay.   Chitra: Do you hear of people that are trying to hide crypto by claiming losses, that they've lost it?   Jeff: Some folks, yeah, yeah. More egregious than that, though, we've had, there was one gentleman that was seeking out a CPA, who made a little over 2.5 million in cryptos, and said, "No, I'm just not going to file. If they want the money, they have to come after me."   Chitra: Did they?   Jeff: Well, that's what's going to happen over the next couple years, yeah. The IRS has started mounting a task force specialist specifically to investigate cryptocurrency filings.   Chitra: Is that going to be an easy task? Will they find people that are scofflaws?   Jeff: They will absolutely find people, right? It's going to be interesting in the tax world for the next couple of years, and tax courts, people fighting them.   Chitra: You're seeing a lot of new developments in tax filings, in tax law as a result of this?   Jeff: Not yet. Really, they're just kind of testing the waters, now. The last, about a year ago, they started issuing subpoenas to exchanges, and they were winning, to get transaction records from them, so they could see what people are trading and how much people are earning, so they could compare that with individual tax returns, to find evidence of those that are evading their taxes. They're just starting to institute those audits now and will be taking these folks to tax court as needed. There's a lot of things that will come out of it, but it hasn't happened yet.   Chitra: Because I think, particularly in the early days, there were probably a lot of people who weren't filing taxes. Is there like a statute of limitations, or does it matter if like 10 years ago you weren't filing taxes, and now the IRS is starting to think about this and starting to do these audits?   Jeff: There is a statute. It's, generally speaking, three years from the date of which a filing was due, but that's only if it was an innocent mistake. If you're intentionally evading, there's no statute on that.   Chitra: How do you report, typically, gains and losses? What's the process?   Jeff: The process is usually, you want to have everything calculated, all the transactions. Coin for coin, coin for fiat, and those will be itemized on a form 8949, and summarized on a schedule D, which are attached to the tax returns.   Chitra: Having done my crypto taxes this year, it's fairly complicated. It's just, you have to look at every single transaction. Talk a little bit about what that process is like. It's fascinating for me to see the level of detail and how you actually go about finding those records, if somebody hasn't kept those records, and being able to trace the flow of that currency from the exchange to your wallet, or if you're trading, you've got all of these multiple transactions that have taken place, hundreds, maybe thousands of them.   Jeff: Yeah, it could get very complicated. That's why a lot of our clients have come to us, to help them untangle these complex array of transactions, ranging from, if they have a few hundred coins that they're trading across multiple years, you can end up having thousands and thousands of cost pulls, because you have to trace every single transaction to its cost basis. Its cost basis depend on whether you used FIFO, LIFO, or HIFO.   Chitra: Explain that a little bit.   Jeff: Sure, yeah. Those are the manners in which you inventory the cells of different coins. LIFO, last in, first out, that's saying, when you sell a coin, you go to the last time that you had acquired that coin, and you sell it out of that pool. If you're buying and selling coins all day long, go across multiple months, you have many cost pulls, even thousands or tens of thousands of cost pulls.   FIFO, first in, first out, is where you sell your oldest coin. What that does is it will result in fewer long-term capital gains, but you're kind of eating up your tax obligation now, versus deferring it to later on.   Chitra: Let's say I'm trading, okay? I'm on exchanges, and I'm trading. I'm not really thinking about ... It's not something you think during your trading process, right? It's something you do after the fact. I'm not thinking LIFO and FIFO when I'm like, "Let me find what's my oldest Bitcoin, and let me trade that for Ether." I'm just like, trading. Am I doing the right thing? Is this something you go after the fact, and start to look through it and make those calculations?   Jeff: The easiest thing is to maintain good records, so that whoever, whether you're doing it yourself or outsourcing it to a professional like us, then they could go through those records a lot easier, because it does get complicated. As long as you have the information, it could be all untangled.   Chitra: What's the largest number of transactions you've done, filing taxes, that you've seen? Thousands, hundreds of thousands?   Jeff: Probably in the hundreds of thousands. I think our largest client had a little shy of 200,000 transactions across about 2.5 years. It was a lot. It took a massive amount of manpower, because there isn't a way to fully automate it, yet. We've established a proprietary method to semi-automate portions of it, but not the whole thing. There's still a lot of manual touches that have to be done to it.   Chitra: Were you able to do it?   Jeff: Yeah, yeah. We were able to untangle all of it. He had a massive tax obligation, but most importantly, it'll keep him compliant with the IRS. He had the cash, right? If you make a million dollars in cryptos, and if you have to pay a few hundred thousand in tax, you know, you're still coming out ahead.   Chitra: This is true. What are some of the biggest obstacles today for average investors, when it comes to filing taxes?   Jeff: I think having an understanding about how complex the tax aspect is with cryptos, if you're trading, mining, doing anything else. I think just being aware and mindful of that.   Chitra: There's also the issue of documentation, right? For example, different exchanges can give you different levels of information about your trades, so at the end of the year, some exchanges will give you a lot of information. Other exchanges give you virtually no information. How do you start to do the detective work to find all of your records?   Jeff: That's one of the tricky parts, yeah, because there isn't really any sort of regulation about what all the exchanges have to provide users. There's going to be, and it's moving that direction. For now, it's kind of up to the individual to maintain their own records. If the exchange only provides piecemeal stuff, or in the case of Bittrex that just up and deleted people's information, it's still your obligation to make sure that you're tracking things.   Chitra: What happened in that instance where the information was deleted?   Jeff: Well, they up and decided just to remove information.   Chitra: This was an exchange?   Jeff: Yeah, yeah, Bittrex. It's still the user's responsibility to maintain the records. The individuals that were subjected to that, had they downloaded their transactional information, let's say, every week or every month, they would have been okay, right, just in case something does happen to an exchange. That's something we advise our clients to do is don't wait till the end of the year to start pulling your information, even if you're using a CPA like us, right? Pull the information maybe once a month, just in case something happens.   Chitra: That's interesting. That's something I've never thought to do. It's kind of surprising that they're allowed to even delete information. Is that going to change, in the future?   Jeff: Yeah, there's definitely more pressure in regulation around what the exchanges are doing. Also, keep in mind that a lot of these are foreign exchanges, too, right? The IRS and the federal government only has so much control over what they do.   Chitra: Because this is such a global flow of money.   Jeff: Exactly. It's a global thing. Right.   Chitra: How does the US government, or how is the US government attempting to get a handle on this? Do you feel like the government is kind of playing catch up, now?   Jeff: A bit, yeah. I think there was too much downtime from 2014 to now. You know, the last time the IRS issued any formal guidance was in 2014.   Chitra: What was that initial guidance?   Jeff: It was maybe like a five-page notice, 2014-21, which pretty much just said that it's not legal tender, and to pay your tax on it. There really wasn't much guidance beyond that.   Chitra: What happened before then, like 2009 through '14? Was there any guidance?   Jeff: Nothing formal.   Chitra: What were people doing then?   Jeff: I think, at the time, IRS and other government agencies probably just assumed that this is just a fringe thing, it's a temporary thing, it's not going to last, but look at us now. There are industries being built around blockchain and crypto, and they realize that, now, and the amount of money that people have earned in the sector. They see it as, like, it's a huge nest egg waiting to be tapped.   Chitra: Build your highways and all of that stuff.   Jeff: Right, yeah.   Chitra: Now, when you're filing taxes, can your crypto losses or gains, be balanced against your traditional portfolio?   Jeff: Yes, yeah. The way it works is short-term gains and losses get netted against other short-term gains and losses, regardless of if they're crypto or not. Then, the same thing with long-term.   Chitra: Great. Now, what are the penalties for noncompliance?   Jeff: For failing to file a return, it's a flat 5% of whatever your tax obligation is. For not paying the total amount of taxes owed, it's one half of 1% per month. If it's just one month late, half of 1%, it's not a lot, but if a couple of years go by, a few years go by, it can add up really quick, plus interest.   Chitra: Can you go to jail?   Jeff: Absolutely, unfortunately. If it's deemed that it was tax evasion, like in the example that I gave you of the gentleman that was looking into using our service and decided, no, they can just come after me, a couple million dollars, if they find evidence of tax evasion, then it could be subjected to a felony, which leads up to up to five years in prison and up to a quarter million dollars in penalties.   Chitra: Now, there's a lot of money laundering also going on, right? Does that play a role at all in this?   Jeff: Not so much with the taxes, but it is something that they're mindful about, out there. I see that more in the banking sector, that being an issue. In fact, one of our clients in the crypto space, their bank account was just abruptly closed with no notice. They said, "You can't bank with us," because they are concerned about potential money laundering.   Chitra: What is their fear?   Jeff: I think because they don't know where the money is coming from, right? If you have crypto-related money, it's so easy for it to be maneuvered from overseas. I think that's the concern, because there isn't enough regulation out there yet, right? Some people are just distancing themselves.   Chitra: It seems like there's a whole bunch of areas in which the federal government and governments around the world are now grappling with, how do you make people accountable for all of this wealth that they're generating, and how do we get a piece of that action?   Jeff: Right, that's what it is. They want their cut. As long as you give them their cut, they're not going to bother you.   Chitra: Now, let's look at two scenarios. Let's say you're a Sally Fay, you're a woman investor. You're just starting out. You're super excited. It's 2017. The bull market is in full swing, and you've learned how to trade, and you're just buying and selling without any regard for keeping tabs on your cost basis or the proceeds that you're making. Then, come December, you're stuck with having done thousands of transactions, and you have no idea how to go about finding those records, because every trade that you've done is potentially taxable, correct?   Jeff: Correct.   Chitra: What do you do?   Jeff: In those kinds of situations, because it's a lot of cleanup, the best thing to do is consult with an expert like us, so we can get you cleaned up and caught up. Then, going forward, you're on the right path, right? And to be mindful just about all the tax consequences of all that trading activity.   Chitra: Do you just sort of systematically start to go back and look at every trade you've made?   Jeff: In order to calculate all the gains and losses, historically, yeah. We have to kind of start from inception. If someone started trading in 2014, right, we have to go back to square one.   Chitra: That's pretty daunting.   Jeff: It is, yeah, yeah. At least once we get you caught up, then you should be okay, right?   Chitra: Let's look at scenario B. Let's say that I am a young man, Matt Jones. I'm not in the crypto market yet. It's the bear market, and people are telling me, "Hey, now's the time to come in. Buy low, and you can sell high." I have a clean slate. I've set up my exchanges, but I haven't done any transactions. What are the kinds of things I need to put in place to have tax hygiene, so to speak?   Jeff: Some best practices.   Chitra: Yes.   Jeff: I'd say, first, be mindful that you do any sort of trade coin for coin, that's all going to be a taxable event. Have at it, but just be mindful that there could be a lot of tax compliance to deal with at the end of the year. That affects some people's volume activity.   Another thing, to make sure to pull their records on a consistent basis. We usually, we're advising our clients now to download their transactional history from each exchange they use about once a month. Just make it a month-end practice, just in case either they got locked out, the data is deleted, or something is hacked, just in case anything happens, at least you have the records.   Then, outside of transactions like that, if you're trading on an exchange, if you're gifting coins, jot down somewhere on a Excel sheet or a Word document who you gave it to, when you gave it to them, and how much you gave, right? Just in case if there's any gift tax compliance to do, we could do that as well.   Chitra: Is it advisable to have a notebook and a pen, and when you're making these trades, to actually just jot it down, or put it on an Excel sheet that on this date, I bought X amount of Bitcoin, or I sold X amount of Ether for X amount, and to have that? Is that going to be helpful at the end of the year?   Jeff: It could, but like all the transactional data within the exchanges usually is going to have all that information. If someone wants to just separately track it, and if they're not doing a lot of trades during the year, that could be just as efficient and make their process easier at the end.   Chitra: Now, tell us some war stories. What are some of the anecdotes that you tell people about folks having challenges in filing taxes, or cases that you've seen, or what the government is doing to come to terms with this new source of income?   Jeff: Sure. Probably a couple examples. We have clients that were trading back from, the oldest one is 2013, maybe about a little over $4 million, and of course, they never reported any of it. Thankfully, in contrast to the other individual I was referencing, he said, "You know what, I just want to be compliant, right?" He came to the table. We went through everything, all the records, and got him up to speed.   Going forward, if he's audited, or maybe I should say when, because it's a lot, a big amount, we have work papers in place that we could provide in response to an audit. 90% of the time, that'll just make it go away, almost immediately. As long as the IRS can see that you've made a good faith effort, that there's been due diligence in being compliant, and you have work papers and a CPA to back it up, the audit will go away, right?   Another example, well, with the IRS, it's not so much a war story, but it's come to my attention that they've selected around 1200 to 1300 cases already from the 2017 filings that they're going to move forward with audits. Now, I don't know which ones those are. That comes from a source I have within the audit community, but we suspect that those are probably the larger ones, mostly, people that have generated hundreds of thousands, if not millions.   Chitra: Is the IRS not only trying to get revenue back from these taxable events but also trying to set precedence in some way?   Jeff: Yeah. It serves both purposes, yeah. One, it's a huge amount of revenue just sitting there for the government that hasn't been tapped yet. The second is going through this process, and going through these audits, and taking some people to tax court will set precedence, so that it's clear to everyone else that, one, you need to be compliant. Don't play games with them. I wouldn't be surprised if they send at least a few people to jail over this that have evaded their taxes.   Also, it allows them to kind of establish authoritative guidance, because they're going to take everything they find. They will undoubtedly issue some pronouncements about, "Here's how you calculate this. Here's why you file things this way," which right now, we don't have.   Chitra: What about moving out of the US, like just moving abroad so you don't have to pay your taxes, or even moving to Puerto Rico. You hear a lot about that. Is that going to help you or hurt you, in the long run?   Jeff: I think for taxes, temporarily, it would help, right? But, do you really want to expatriate yourself, denounce the US, in order to just save some money temporarily on taxes? I don't know.   Chitra: Depends, I would say.   Jeff: It depends, yeah, yeah.   Chitra: On what the amount is. Are you hearing about people who are actually doing that?   Jeff: No one I know has actually done it. Some folks that we know have been debating it, and they asked to do some research on expatriation process.   Chitra: It's a fascinating area. When you're doing the forensic work, you've been asked to help, I think, with investigations and things like that. How do you go about collecting the forensic evidence on these cases?   Jeff: Really kind of the same way we do crypto calculations for our clients, right? We pull all the underlying third-party documents. In this case, transactional records. We get their narrative about what happened, hear the story, because any forensic case, anything that we do, it's not just the numbers. It's also the context. It's also what happened, the story, if you will.   With forensic cases, there's usually a lot of other moveable parts, as well, particularly like divorce cases, where people are sometimes hiding funds. Partnership disputes, where one partner is embezzling money. We see that kind of stuff a lot more often than what people realize.   Chitra: What happens in the case of a divorce? Who gets the crypto? How do you actually even split the proceeds, if that's what happens?   Jeff: Same thing with kind of like a house, right? If it was community property, assuming it's a community property state like California, then any assets would be split 50/50, unless it was bought with separate property. If you don't want to cash out the portfolio, then usually one partner would buy out the other half from the other partner, just like a house. If you don't want to literally split the house in half, one person wants to keep it, one partner would buy out the house from the other.   Chitra: Well, that actually raises an interesting question, because let's say one partner is very crypto-savvy and the other partner is not crypto-savvy. It probably is pretty easy to hide your assets in the form of crypto, because the other person has no way of finding out how much you have and where you have this.   Jeff: True. Yeah, there's an opportunity there for someone to try to take advantage. Part of the divorce proceedings process is to come to the table and be transparent with both partners. Usually, like, you're essentially signing off to the court that let the partner know 100% of the assets out there. To try to hide it is essentially perjuring with the court.   Chitra: Where do you see all of this going in the next few years, as more and more people get into the space? There is a prediction that you're going to have a billion new crypto investors, over the next five years, entering the market. Where do you see the field of taxation going?   Jeff: Yeah, definitely, I see a second adoption, as well, coming in the coming years. I think, by the time that happens, there'll be a little bit more infrastructure in place with the taxation piece. One, with the exchanges. They'll start being a little bit better about what they record for their clients and what they issue out at the end of the year. I think we'll get to a point where exchanges are very, very similar to brokerage accounts, where you just get a 1089 of, "Here's your cost basis, here's your proceeds, here's what you report on your tax," and make it much easier for folks.   Chitra: Just as the industry is growing up, the tax piece will grow up, as well.   Jeff: Yup.   Chitra: Yeah. Great. Is there anything I haven't asked or anything really important, closing thoughts?   Jeff: One closing thought, just, I think it's good for everyone to remember that almost everything is a taxable event. If the question is, "Do I have to pay tax on this?" 9 times out 10, it's yes.   Chitra: Sadly.   Jeff: Yes.   Chitra: Thank you so much for joining us. Where can people learn more about you and find out more about the work that you're doing?   Jeff: Sure. Our website is neumeistercpa.com, that's N-E-U-M-E-I-S-T-E-R-C-P-A.com. We're a full-service accounting consulting firm, but we specialize in things like cryptos.   Chitra: Great. Thanks so much for joining us.   Jeff: All right, thank you.   Chitra: That's all for now. Join us again next time for another edition of Running with Unicorns. Until then, enjoy your crypto journey, unicorns.  

Toby Mathis and Jeff Webb of Anderson Advisors are here to answer all sorts of tax-related questions that focus on everything from applications to forms and QuickBooks. Do you have a tax question? Submit it to Webinar@andersonadvisors.com. Highlights/Topics: Will income earned by lending money to real estate investors reduce Social Security benefits or increase taxes on them? Income vs. earned income; until full retirement age, benefits are reduced; when full retirement age, it doesn't matter what you make How do I get the 20% deduction from Trump's Tax Plan? The 199A Deduction is a 20% deduction on qualified business income, but you need a pass-through entity; QBI 20% deduction vs. 20% of taxable income are compared, and you get whichever is less When you make a contribution out of your own account to your LLC as a member, are you taxed on contributions? No. It’s a contribution to an entity that becomes your capital and money you can take back out tax-free, if you haven't used it to recognize losses What is the best business structure recommended against asset, structure, and personal protection? With any passive activity, use a passive entity - LLC taxed as a partnership/limited partner; whomever has control of entity decides what's distributed What is the best way to set up QuickBooks when I have a Wyoming Holding LLC and several other LLCs holding real estate in other states? Create one set of books with Wyoming LLC as the primary; do a classified income statement for other states What are the tax forms for 501c3? Use Form 1023 to apply to be an exempt charitable organization; yearly recording forms include 990-N If someone has rentals in their self-directed IRA, how are they impacted as UBIT - does it make a difference on the number/dollar amount? No UBIT, if it's a rental; UBIT is for an active business inside an IRA; passive income is almost always exempt Can I have recourse debt in a 401K or IRA? Can I have non-recourse debt? You can’t have recourse debt, but you can have recourse debt What are my options to re-distribute funds from one LLC in several entities to separate investments? You can always move it from one to another with no tax implication Can I write off costs for rehabbing out of the country? Yes. Worldwide profits; if it's income-producing property, you report it to the United States I lent money to a real estate flipper. She gave me a promissory note, but it wasn’t recorded with the deed of trust. Now, she is in default. Can I foreclose? Document it because you can’t foreclose until you file your secured interest Is there anything I can do to reduce my taxable income? Yes. There are lots of things you can do - make contributions to qualified retirement plans, charities, and C Corp I purchased a new computer that cost less than $2,500. Is that a straight expense in the current tax year or some weird depreciation thing? Section 179 deduction; you can buy up to $1 million and write it all off For all questions/answers discussed, sign up to be a Platinum member to view the replay! Resources U.S. Social Security Administration Trump’s Tax Plan 199A Deduction QuickBooks Tax-Wise Workshop 501c3 Unrelated Business Income Tax (UBIT) 990-T 990-N Section 179 Deduction 1244 Election Kiddie Tax Anderson Advisors Tax and Asset Prevention Event Toby Mathis Anderson Advisors   Full Episode Transcript: Toby: Hey, guys. This is Toby Mathis with Jeff Webb again. Jeff: Good afternoon. Toby: If you don't know, Jeff Webb's a tax manager here, and I am one of the partners. I'm not an accountant but I'm an attorney. Jeff is actually a CPA. This is Tax Tuesdays. If you've never been on Tax Tuesdays before, all we do is answer all sorts of questions. Let me see here whether I've got the right question field up. Look at that. We've got a bunch of people asking questions. Let's see. We'll get to all your questions, making sure you can hear us in the question and answer part. Just say, "Yes, I can hear you loud and clear," to make sure that we're getting through to everybody. If you do that, then we appreciate it. There we go. I'm getting a whole bunch of "loud and clear", "loud and clear", "loud and clear". All right, if you don't know the format if Tax Tuesday, it goes like this. We answer a whole bunch of questions. We answer the questions that people ask via the email that I'll be giving you at the end of the webinar, and we grab a whole bunch of them, and we just start answering them. If we can't answer the question or the question that you ask is too complicated, too specific, too long, then I grab it and kick it off to a staff or we answer it the following week, depending on how cool a question it is. That being kind of the overview, this is where we're at. We're going to go through these and we're going to make sure that we're answering all the questions. Let's see if I can actually make these slides advance. Look at that. That's weird. I didn't even know what that W there is. It's kind of cool. "Will the income I earned by lending my money to my real estate investors reduced my social security benefits or increased my taxes on them?" That's an interesting question. There's, "How do I get a 20% deduction?" I'm picking these literally from people's emails so don't yell at me for the typos. "When you make a contribution funds to your own account to your LLC as a member, are you taxed on contributions that you contribute to an LLC?" "What is the best structure–" and that is the weirdest thing I've ever had. "What is the best structure recommended against asset, structure and personal protection for a Multi-Family Home Investor acquiring and holding rental properties, especially if working–" and I'm going to go through each one of these. "What is the best way to set up QuickBooks when I have a Wyoming Holding LLC and several other LLCs holding real estate in various other states?" Those are our opening questions. We have a few more. We're going to go through a ton of them, and I'm already getting a bunch of questions on the Q&A portion. We will get to those but, first, we're going to knock these ones out. The first question: "Will the income earned by lending money to real estate investors reduce my Social Security benefits or increase my taxes on them?" The first thing is there's the benefit itself. In this particular question, I looked it up and I believe there were 61, so they're receiving Social Security benefits before they reach the full retirement age. Full retirement age varies between 65 and 67. The reason this is important is because, once you reach that age, it doesn't matter what you make. Until you reach that age, you will have your benefits reduced on what you're receiving. When you're pulling out Social Security early, 50 cents on the dollar once you get over $17,080.Of course, it's indexed for inflation, but it's a little bit over $17,000. I think this year it's $17,080 or something like that. What that means is, if you are lending money, then that would be counted as income. However, if you're under the full retirement age, they only count earned income. The question here is, "Until you're at full retirement age, will the income earned by lending money to real estate investors reduce my Social Security benefits or increase my taxes on them?" The answer is a big, resounding, "No." This will not hurt you in any way. Once you hit full retirement age, now we have to be worried about how much of your social security becomes taxable. When they look at your tax ability of the benefit, now we're looking at all sorts of income, everything that you make, and it's going to push it up. That's the one where it's not that you reduce the benefit but it becomes taxable. Jeff: Fairly quickly, additional income starts making your Social Security benefits taxable. They're never going to be more than–85% of your benefits are never going to be taxable. I'm saying this totally backwards. Toby: What it means is that the most they're ever going to tax your benefits is 85% of them. If you're getting $20,000 of benefit, the most you'll ever pay tax on is $17,000. You'll still get $3,000, tax-free. The sad part is you didn't get, really, a deduction when they took it out the first place. That's the old double tax that you hear about with Social Security. Anything else you want jumped into? This is kind of stuff. It makes your brain go numb so you're doing it right. You're actually asking good questions. Jeff: Just the matter of when you should take Social Security is such a huge question. Toby: Because you can start taking it. When is the earliest, is it 64? Jeff: I'm going to say 62, but maybe it's earlier depending on their age. Toby: It does depend on their age. There is a before-a-threshold and after-a-threshold. Now, I forget what the threshold is. What you do is you go to the Social Security Administration and you run your scenarios and they'll give them all to you, or you can contact us. We have folks we could send you out to that have software because it is complicated. Depending on what month you were born in and all that stuff, how many days–all of this gets factored in as to what's the earliest you could start receiving benefits. Once you start receiving the benefit, they let you receive that benefit only so long as your income is low and it's your earned income. If you're trying to get the benefit when you're 62 and you make too much money, you're going to lose a bunch of the benefits. If you start making–if you're 62, start pulling out the benefit and you have passive income, not that big of a deal; it doesn't reduce it so that's really cool. Enough of that. It makes my head hurt, Social Security. Do not rely on Social Security. There, I said it. Yeah, Social Security is one of those things that, when it was set up, the average life expectancy of people on Social Security was two years. It was really there to catch you if you're really old and didn't have any other benefits. Now, we use it almost like it's a retirement plan that's not what it was intended for. That's why it doesn't work to do it. Here's the next one. "How do I get the 20% deduction from Trump's Tax Plan?" First off, it's not Trump's Tax Plan. It's the Tax Cut and Jobs Act and it was passed by our wonderful Congress because, technically–though, they seem to forget this–Presidents don't write laws. Now that we got that out of the way, they did put this thing called a 199A Deduction, which is a 20% deduction on qualified business income from pass-through entities. Follow me here. The first thing we need to have–and I'm going to write these up–is we need to have a pass-through entity, and you can be an LLC taxed as–this is a 1065 that's partnership, a sole proprietor or as an S Corp. Those are your choices. Technically, it could also be a trust. Then, you look at other entities, S Corps and just flat out partnerships, including limited partnerships, all that fun stuff. It's passing through; it doesn't pay its own tax. Then, you need qualified business income. I'm just going to call it QBI, which just means income. Generally speaking, it's active income, but they also include real estate, if you are making money on real estate in which you participate in some fashion. The only type of real estate that's not included as far as we can tell–because they're still giving us regulations on it, but the proposed regulations make clear that real estate, rental real estates included, is if you have a commercial building and triple-net leases that you're giving out where you're not really taking on much of the risk, then they're not going to let you have the qualified business income. Then, they compare that qualified business income 20% deduction versus 20% of your taxable income, whichever is less. Why is this important? Because if I'm a sole proprietor–let's say I have $50,000 that I'm making–that I would get a $10,000-deduction under the QBI. Let's say that I take and contribute into my retirement plan–a husband-and-wife sole proprietor is still the same thing, and they both put in–what's a good number–let's just say $10,000. Then, my taxable income is actually $40,000 because I rode off–I made tax-deductible contributions into my IRA of $10,000 so I would take the lesser of that. Then, they do this wonderful thing, is they then say, "Well, if it's a special service company, we're going to put a cap on how much QBI you can actually make." It's not really QBI; it's actually your taxable income, and they say, "We'll only let you ride off so long as your taxable income is below a threshold." If you're single, that threshold is $157,500, and there's a phase-out for the next $50,000. To make your head spin, it goes from $157,000 to $207,500. That's the easiest way to look at it. If you're married, filing jointly, those numbers are $315,000 to $415,000. Jeff: What's an example of a special service? Toby: Special services are something that it is you and your skill that makes the money, and they use–it's going to be doctors, lawyers, accountants, engineers, real estate agents who are solo, somebody who–it's their skill so like a carpenter who doesn't have a bunch of staff. That's going to be a special service. If you get above those thresholds, you are done. Somebody's asking a question which is pretty interesting. A single-member LLC counts. You have a flow under you so that's when you're sole proprietor or just going under your tax return that's passed through entity so you're fine. The interesting here is that you can control your taxable income. Even on those thresholds–and when we teach this in the class, we actually go through a learning chart where we say, "If this, then this. If this, then this." If you're a special service, we just need to make sure that we can control your income, and the way you control your income is by splitting it with tax-free, tax-exempt or separately-taxable entities. Let me give you an example. If I have a C Corp and it makes a bunch of money, great, that's not income to me. I don't want to pay myself a whole bunch of money and make whatever my other business is that is or where I'm going to meet the threshold taxable because I'm losing that 20% deduction. Let's say I have $200,000 coming in. As an individual, I can get some donations and deductions into a retirement plan and I get myself underneath that $157,000 and I have another $200,000 in C Corp that I pay myself. If I leave the $157,000 as is and I don't take any money out of the C Corp, I'm going to get a 30-something thousand dollar deduction. It's just going to come off the top. It's a 20% deduction so almost like I spent. If I took the money out of the C Corp–and, by the way, that C Corp is a flat 21% tax rate now so it's going to pay 21% so it's not horrific. If I paid myself that money, I push my taxable income over the threshold, now I get 0 deduction on my qualified business income. That's why it's important. If it is not a special service, then those thresholds trigger something else. It takes us to an area where we can write off up to 50% of the W2 income or 25% of the W2 income for the business plus 2.5% of the assets. Jeff: No, you're right. I'm just jumping ahead of you. Toby: Yeah, so what we're looking at, then, is you better have a regular business that actually has salaries. If you, for example, as a sole proprietor, single, are making–what would be a good example–$200,000 and you're over the threshold, you're phasing out, you'd have to go to the second test. You're over the 157 and the second test is now pushing you at 50% of W2 wages, and you have zero so your deduction is going to be zero. You're going to get literally nothing. You might get a few dollars because you're not quite at the 207, which is the top line of the actual phase-out so you'd be phased out about 90% plus of the benefit. Now, let's say you converted that sole proprietorship to an S Corp and, instead, you paid yourself a salary, so same situation, $200,000. Let's say I paid you $75,000 of salary. Then, the QBI or the monies that's flowing through is actually the net income and net profit, so you'd subtract the 75 off. It would be $125,000. You compare 20% of that number, which I should grab the calculator, whatever that number is. Jeff: It'd be 25,000. Toby: Yeah, 25,000, and we would compare it to one-half of the W2 income, which would be 37,500. You'd get the lesser of the two. You'd get a $25,000-deduction just because of the type of entity. That's the one I have to do. Somebody just said, "I have almost 300K in real estate and other income. Is there anything I can do?" A single person? Yeah, there's something you can do because, remember, it depends on whether you're special service and then it depends on the business, and there's one last thing: It always comes down to your taxable income. "What other ways can I use to control my taxable income?" The most obvious is I split it with a C Corp, I give it to charity–and it could be my charity–or I deduct it by putting it into a tax-deferred retirement plan. For example, same situation, I'll use the $200,000 and they do a 401K. They put a husband and wife each–they're under 50. They each contribute 18,500–or, actually, the example I used was a single person so I would have to say I put 18,500 and in, and they get a 25% deduction on the 75,000. They would put in–again, I'm using crazy numbers so what would that be? About $18,750 or whatever that is–around under $19,000. I can put, in essence, about $37,000 right into the 401K, and that reduces my taxable income. The taxable income goes from 200 down to almost the threshold, and now I don't have to worry about it. It makes my life so much easier. I'm just going to get a nice big, fat deduction and I'm happy as a clam. That's how this stuff works, but if you don't do it before the year ends, you're toast. This is going to be my–this is why you need to have some sort of somebody doing tax planning. How do I get the 20% deduction from the new tax act? Very deliberately. You make sure that you have the income flowing under your return and then you make sure that, if there's a disqualifying factor that would cause you to lose it, that you look and say, "What's better? To just walk away from it and not worry about it or would I be better to take a couple of actions to allow myself to take advantage of the deduction?" It's a freebie, guys. If I make $20,000 in real estate, that rental real estate–that's my net after all my depreciation–I get a $4,000-deduction. I'm only recognizing 16,000 under this taxable income so that's a nice little benefit especially if I'm a high-income person so that's what I'd be looking at. Jeff, do you want to do this one because I'm […] barding the answers again? Jeff: No, that's alright. "When you make a contribution out of your own account to your LLC as a member, are you taxed on contributions that you contribute to the LLC?" No, actually, you're not. That is a contribution to an entity that becomes your capital, your owner's equity–we can call it a lot of things–your owner's capital in that company. That's actually money that you can take back out also tax-free assuming that you haven't used it up to recognize losses or maybe other things like that. Toby: We get that a lot. I'll give you a real-life example. Some guys were doing a syndication on apartment buildings and they were telling people, "Hey, we're going to return your capital out of the profits and you're not going to have to pay any tax on the money that you receive up to your investment." I said, "Hey, that's not really the case." Here's how it works: I can always get back my contribution, and it's tax-neutral; it means nothing. If the company makes zero, no profit, it can always give me back my money and I pay no tax, but if the company makes money, I'm taxed on my portion of that gain no matter what even if they're giving me extra. I was like–what they were doing was they were saying, "Here's a little thing. We'll make some profit. We'll just give you your money back. You want to pay tax on it?" I was like, "No, that's not how it works. You actually have to pay tax on the profit in proportion to your ownership, and it's a little bit funky." Jeff: This is a case that, sometimes, we see where a client will tell us, "I had deposits of $100,000 into my business," and what they fail to tell us is that 50,000 of it was their own money. We want to make sure that we're able to differentiate what the owners are putting into the company versus what income they're making in the company. Toby: There's a couple of questions. Somebody says, "My head is spinning." We do record this. If you're platinum, you're going to get a recording of it in your little platinum area. Somebody asks, "Is this pre-recorded?" No, it's not. We're doing it live but I'm answering the questions that people have emailed me first and, yes, we have about 50 questions that are in the queue that we're going to go through here in a second. Jeff: We don't have a three-second delay or anything? Toby: No, I don't think so. I could give you a 10-second delay. All right, "What is the best business structure recommended against asset, structure and personal protection?" I don't know what that means. I'm going to assume they mean to protect the business–for a Multi-Family Home Investor acquiring and holding rental properties, especially if working as a team member with other investors? Here's what I'm going to say: Anytime you have a passive activity–that is, when you buy the property or the cash flow and the appreciation–you're going to want to use a passive entity, meaning an LLC taxed as a partnership or a limited partner. Don't do anything else. That's it. There's maybe some really weird exceptions but I'm going to say, 99% of the time, you're going to end up using an LLC, and it's either going to be disregarded even if you have other people in or it's going to be a partnership. If anybody does anything differently, they're doing some weird stuff. If you have other investors, then it depends on your relationship with those investors. I'm not going to going to get into securities, Reg Ds and all that but, generally speaking, you're going to have it taxed as a partnership, but the most important consideration is always going to be control, who has control of that entity, because that's who decides what's distributed. That partnership agreement or the operating agreement of the LLC is really going to be important. You do not want to do this stuff half-arsed. You want to make sure that you're actually really addressing this stuff. At Anderson, we tend to be very protective of the manager, meaning we want you to have control. If it's your project, we don't want people to force you to do stuff and, on the flip side, if you're investing and you're a client, we're always going to say, "You don't want to be forced to kick in more capital against your will." Those are the things we always look at. Where does that one go? Here we go. "What is the best way to set up QuickBooks when I have a Wyoming–" and this is going to be so you, Jeff, because Jeff loves QuickBooks. "What is the best way to set up QuickBooks when I have a Wyoming Holding LLC with several other LLCs holding real estate in various other states?" I'm going to draw this. There's my Wyoming LLC. It's either going to be a 1065 or disregarded, and it holds all these cute little LLCs in other states. Let's say this is Texas LLC, Washington LLC, Nevada LLC, Georgia LLC, and they're all going to flow up to that Wyoming. I want to keep my books straight because, if you know QuickBooks, they will sell you QuickBooks for this one, this one and this one. You'll end up with four sets of QuickBooks and you'll drive yourself crazy. What do you do, Jeff? Jeff: Here's what we like to do: We like to create one set of books with the Wyoming LLC at the top being the primary set of books. Then, what we do is what we call a classified income statement where each of these four LLCs below the Georgia, Nevada, Washington and Texas where they're all kind of their own set of books within your Wyoming LLC books. All this income is going to flow from those bottom four up to the top one anyway and, while we need to keep the entities separate so we can report them that way, ultimately, what we're reporting is what's coming through the whole kit and caboodle. Toby: Yeah, we only need to worry about setting up QuickBooks for this guy right here, and then we set up these guys as classes. All that means is we have one set of books. Jeff: Yeah. You can still pull an income statement for your Georgia LLC or your Texas LLC to see what's just in that but, all in all, you still have one set of books. It makes it easier and you don't have all these inter-company transfers that you have to track. Toby: Oh my god. I'll tell you, we're horrible on that. He's giving me the look. See, here's the problem, is if you have different companies with different sets of books, you've got to close out the previous sets of books and then open up the new company. It's a process and it takes a few minutes and it's really annoying when you're trying to enter stuff into it. It's going to save you a whole bunch of time to use one set. Jeff: Yeah, then you don't run into things like, "Well, I transferred money from Georgia, the taxes that I did it, I record it in both companies." When you record them on one, you end up re-recording it in both. Toby: Yeah, and there's some fun stuff. Some of them just ask for a basic QuickBooks question, jump in the line. It's hard to set up classes in QuickBooks, not horribly, but if you don’t want to learn–QuickBooks is one of those things where you're going to spend some time with it. You just have a bookkeeper do it. Anderson does that if you want. All right. If you have questions–you guys, I know you do because there's a ton of them already in the little queue here. Here's how it works: If you want to ask a more detailed question, if you have a question that you didn't hear answered on the webinar, you can just email them on in to webinar@andersonadvisors.com, and, that way, we can put it in that queue and we can answer it just like we just did. We're going to break those out. Those will be separate little videos, each one of those, so that you get your answer. Somebody was saying, "My head was spinning about 199A." You can go back and listen to that. Better yet, you can come to some of our other webinars or come, actually, to the Tax-Wise Workshop and we go through this stuff. Spend some time with us. If you invest a little bit of time in taxes, it will pay off in spades. Other questions–some people just answered this stuff. "Can you go over the tax forms for 501c3? Jeff: There's a couple of forms for the 501c3. To apply the BF 5O1c3, there's what's called the Form 1023. It's the application to be an exempt charitable organization. Then, there's several different yearly recording forms. The 990 is the primary one where you report, among other things, what your income was, what your balance sheet looks like, your plan, your purpose, who you've dealt with. What were you going to say? Come on. Toby: Basically, if you're making less than $50,000 in your 501c3, you're doing a 990 post-note card. You're just doing a real basic here. Literally, it looks like a postcard. Jeff: They don't do that anymore. Toby: I thought they're still– Jeff: All these old people still call it postcards, but it's a… Toby: They do that in the 10… Jeff: But it's a 990N and it's filed electronically. Toby: Yeah, I know but it's the same thing. Jeff: It's still close. Okay. Toby: It's a postcard. Oh, my god. Yeah, you do it electronically now but it's really simple. You go above that, then you're going to be filing a little more detail. You get about 250, you're filing very detailed. Never do it yourself. Just hire an accountant to do it, and those guys–we do them. They're not horrifically complicated unless you have a huge void that everybody's taking money. You go American Red Cross, you can go look at the actual tax forms that everybody files because they're all public record. You can go in there and take a look at anybody and see just how complicated it is. What you'll realize is that the more the stuff they're doing, the more complicated it gets, and not doing ton it is pretty simple. We have ones that are $5 million non-profits and it's a few pages. Then, you have ones that are $1 million but they've got everybody and their mother with their hands in the thing, and you're doing a lot of reporting. That one might be more complicated. If you're a church, you don't file anything. If you're religious and you're a religious organization, you don't file anything; you file zero tax forms. Jeff: When you have an accountant do these 990s for you, they're going to ask you a lot of questions because there's a lot of questions on the form that they don't have the answer to, basically about what it is the non-profit does and things like that. Toby: All right. "If someone has rentals in their–" basically, again, if you have those tax forms, this is one other thing, is that's the tax compliance on an annual basis. If you're setting up a 501c3, you are doing–more than likely, 501c3 is an application called a 1023. If you're doing a 501C6 or some of these others, that's a 1024. Jeff: Wow, I'm impressed. Toby: Yeah, sorry. It's stuck in my head. Those are the applications for exempt status. Your business, your non-profit, is in existence and it's considered exempt from Day 1. Even though you haven't gotten your exemption approved, you actually have 28 or 29 months to get approved, and it relates back to the day that you started. You can actually do a 501c3 and be up and running in a matter of weeks if you want to. All right, from Lisa: "If someone has rentals in their self-directed IRA, how is it impacted as far as unrelated business income tax (UBIT) and does it make a difference on the number or dollar amount?" You want to do this one or would you like me to? Jeff: Why don't you do this one? Toby: All right. Self-directed IRA and it has real estate? You have no UBIT if it's just rental. That's not unrelated business income tax. Unrelated business income tax is when you're doing an active business inside an exempt organization, inside an IRA, or church, or something else, and you're running a mini-mart then they tax you on it because it's unrelated business income so not related to your exempt purpose so they tax you on it. Passive income's always going to be–I shouldn't say "always"; it's almost always exempt. I guess there's possible–if you have some royalty stuff, it's possible, if you're advertising, that the exempt organization tax, but for your IRA for rentals, don't worry about it. Here's what you worry about when you're doing an IRA with rentals: It's usually the case–this is what we've seen–is that people will oftentimes want to lever that real estate. In an IRA, you have something called–I'm just going to blank on it–unrelated debt financed income. There we go, UDFI. Unrelated debt financed income means–or just call it debt finance income–the portion of the profits that are coming from the debt. If I have a piece of property, I have a 50% loan on it, then 50% of its income is going to be taxable to the IRA. It's not allowed to have that type of loan and not pay tax on it. A 401K is allowed to have that type of loan, and it doesn't pay tax on it. It's one of those weird things where you're like, "Hey, should I be an IRA or 401K?" More often than not in our world, you're going to want to be the 401K. It has different rules, and one of the big ones is the ability to use debt. Now, here's something for you. I think I had poll questions on this. This is fun. I'm going to send a poll out to see whether you guys are listening. You guys can answer this, and what it is, "Can I have recourse debt in a 401K or IRA?" Let's see about that. Isn't this kind of cool? Jeff: It is cool. Toby: We're going to see whether or not you can have recourse debt in a 401K or IRA. For those of you who don't know what recourse debt, recourse means, "I can go after you. I have recourse, and I can go–" basically, a personal guarantee, personal guarantor. We got a lot of people voting. I will share the results with you once we're there. Jeff: What if Lisa is flipping instead of renting in an IRA? Toby: Then, we don't have any cases on it. Jeff: Great. Toby: What we always say is do five at a max. Here's the thing: If you disqualify an IRA, the whole thing's disqualified. What I want to do is if I'm flipping in a self-directed IRA, I want to make sure only that money is in that IRA so if I have a disqualifying event, it's only for that one little IRA. So, I may have two or three IRAs. Good news: People are listening. That's always good news. We have about–50% of you guys voted. I'm going to go ahead and close this thing in about a few seconds. Let's see. There, I closed it and now I'm going to share it with you. Do you want me to tell you the answer? You cannot have recourse debt. 36% of you guys just disqualified your plans, and you have a 10% penalty plus it's all taxable. Sorry to say that you just destroyed your plan, but you cannot have recourse. This is half the fun. What's the next question I could ask you? I could throw up another poll at you. Let's see. Get out of there. Let me see if I can do this. All right, what's the next one? Here's a better one: Now that you know you can't have recourse debt, I'm going to launch a new poll. "Can I have non-recourse debt in an IRA or 401K?" This is where accountants and tax lawyers have– Jeff: Disagreements? Toby: No, this is where it's so much fun. Are you kidding? Let's see. Somebody's saying, "No." What is non-recourse? Non-recourse means you can't hold the person responsible. There's no personal guarantor. You can only go after the property so the property is truly asset-based lending. There's nobody on the hook for that loan if it goes south. A typical non-recourse loan in a plan–this is kind of cheap because it's going to give you the answer–is they're going to look at the other plan assets and so they're going to secure the other plan assets. They're going to make sure that they're not over-leveraged. In other words, they're not going to give you a 99% loan to value; they're going to give you a 60% loan to value or 50% loan to value. We'll see if you guys still get the answer even though I just basically gave it to you. This is fun. I'm just going to stop this one and I'm going to share it because the numbers are pretty done. It looks like 86% of you said, "Yes." Can I have non-recourse debt? 86% of you are correct. You can have recourse debt. Here's the trick: In an IRA, that non-recourse debt creates debt finance income so you have to pay tax on the portion that you're making but it doesn't disqualify your plan. In a 401K, you do not pay the debt finance income, and some of you guys are not too pleased with me for that, but I'm getting giggles out of it. That's enough with polls. I could have polls all day long and we would have a lot of fun. Last one: "I hold some assets in LLC–"and, by the way, this is the last one from people that have shot it in but it says, "You don't pay tax until withdrawal, correct?" No, if you have debt finance income, you're paying it in the year in which the debt finance income–you actually file a 990 T. You actually have to report it. "I have some assets in an LLC that is a day-trading entity." You're brave. "If this generates sizable profits–" I just love traders. "What options are out there to re-distribute funds from one LLC in several entities to the separate investments?" You can always move–if it's yours, it's like–an LLC is a safe so I can always move it from one safe to another, no tax implication. This is one of the questions we had earlier. I can always put money in, take it out. Somebody was talking about an opportunity zone. The opportunity zone's awesome. It's where you take capital gains and invest them in the opportunity zone. It's actually called the growth opportunity zone, and you defer the tax on that income. The max amount you can defer that tax is until 2025 right now. Then, you get a portion of that as non-taxable. Then, the growth–if you leave it in the opportunity zone for 10 years, all that growth and the gains on the investment itself are tax-free, and that's pretty interesting. Growth opportunities, we'll be talking about that as they give us more information. Somebody says, "Can you take the poll down?" I thought I did. I'll make sure polls, hide. There we go. Sorry about that, guys. Everybody's telling me, "Flip off the poll." I'm flipping it off. I like your opportunity zone discussion, and think about a bank, and loan out funds to other LLCs you use. You could do that. Then, it's interest unless it's all you. In which case, you don't charge yourself interests. "I am told that funds in an LLC are much like funds in a savings account. I pay taxes on the gains my funds make, and funds can be withdrawn at any time." That is true as long as it's disregarded or taxed as a partnership. I want to make sure that we're very clear. LLCs that are partnerships are disregarded. Yes, you can do that. If it's an LLC taxed as a corporation or LLC taxes in S Corp, little bit different. An S Corp probably has a huge difference. Jeff: Yeah. You can even pull securities out–even if it's a partnership–pull securities out and put them somewhere else. Like what Toby's saying, if it's an S Corporation or corporation, if you pull securities out of a corporation, you have to recognize gain immediately. Toby: It sucks. Appreciated assets is considered wages, right? Use an example here. Jeff: We had a client who had a couple of $100,000 of securities in a corporation, wanted to move it somewhere else, and we tried to explain to him that if he pulls securities out that are now worth 250 and he's only got a basis of $100,000, he's going to have capital gains of $125,000 in that corporation. The corporation will pay gains and then, for you to take it out, that's got to come from somewhere else, so either a salary, roan repayments or dividends. It doesn't work out well. Toby: No Bueno. The other one is people that real estate in an S Corp and then they need to take it out to refile it or something. All that appreciation is wages. It's horrific and so we have oftentimes say, "Hey, if you're going to do this S Corp, it's cool." The capital gains still flow down to you; it's just that you can't take it out. You've got to leave it in there. Jeff: Can we  re-running into that more and more where the banks are running to take it out of the LLCs and stuff? Toby: They got horribly hosed during the downturn of people doing weird stuff. What happened is I would do a financing in an entity. Say I'm the owner, and then I would sell Jeff my ownership and the entity and the bank had no idea that I'm no longer the guy that they were dealing with that they gave the loan to in their mind and had sold his interests. They had no idea. One day, Jeff comes back in and says, "By the way, I'm the owner of this LLC, not the guy that you loaned the money to." No Bueno. They don't like that. All right, we got a lot of questions to go through so if you have questions, you can always email them in. I'm going to start going out through these things, and we have questions from almost an hour ago. People were asking questions before we even started. "I did a cash-out refinance from my residence to invest in private lending or to buy rentals. California only allows 150,000 to deduct interest expense for residence." That's actually the new federal rule. "For the portion that is more than 750, can I deduct the interest as investment expense?" All right, so here's the rule–and, Jeff, I'm [...] barding, but I deal with this stuff all the time. Your new limit is–unless you owned your house prior to–during 27 and perhaps during the first quarter of 2018 if your loan was already in process before December 15th of 2017, don't try to remember this stuff; just know that if you're in that weird period, you may qualify, then you're up to a million, but it has to be for acquisition indebtedness. Acquisition indebtedness means, "I bought the house," or, "I improved the house." That's for the mortgage person to be deductible on your Schedule A, which is your itemized deduction. If you're using the money for something else, then it has to be deductible on that something else. For example, if I am buying rental real estate, then the interest–you'd be writing off the interest on your Schedule A, essentially, against the income from that rental real estate. You are no longer writing off your mortgage interest personally as the individual residing in it; you are now writing it off as part of an investment. Anything you wanted to add on that? Jeff: No. If we're talking about buying a piece of investment property like you're just going out and buying more land, hoping that it'll go up in value, then it would be considered investment interests and go back on Schedule A. Typically, we want to keep it–if it's in a business interest or rental property, something like that, we want to keep it there. Toby: Again, the Canadians have been dealing with this for a lot longer than us guys. You cannot write off interest if it's not for your home in Canada unless it was used for an investment. People actually have to go re-file their houses, they get all the cash they could, pay down their house, re-file it so they could show that they used it for an investment so they could actually write off the interest. I think it was called Scotts transactions. It's weird. Hey, I'm not Canadian. This is another question: "Say I deducted a newsletter subscription in 2017 but received a refund for it in 2018. Do I need to add this back as income in 2018 or no?" If you wrote it off and it means your basis is zero, give you the money back, what does that sound like? Jeff: Income. Toby: Income. It is income. At the same time, I see people saying, "Hey, what if I reimburse myself from my cell phone out of two companies?" Now, each reimbursement represents–I said, "Well, you can reimburse yourself up to your expense. Anything above that is income so it becomes taxable." Fun stuff. Yes, you would report it, but only–your cash basis tax first. You report it in the year that you received the money back. "You've saved me so much money. I call y'all my friends." I love that when I get stuff like that. That's not really a question but I'm going to repeat it because it's better than, "Flip off the poll." Not that I had too many of those, but I had a few. "Can I write off costs for rehabbing out of the country?" This sounds like something for Jeff. Can you write off? US taxes. Jeff: Yeah, you do have investment in another country. Toby: Worldwide profits, baby. Yes. Jeff: If it's income-producing property, you're going to be reporting that to the United States. Any expenses you have on that property will go towards that also. Toby: If you're rehabbing a property, it sounds like dealer activity and active business. I may be little interest–I probably want to be looking at structures in the Bahamas if that's where it is. I'd be looking at something that's taxable there so you don't get into treaties and all sorts of fun stuff. "Do I have to pay $800 off the top to the franchise tax board when we start our corporation?" Jeff: No, California has an exemption to corporations that are first year only. Toby: Yeah, and that $800–this is, if you like tax cases, there's Veritas 1, there's Veritas 2, there's Northwest Energetic Services, there's Bakersfield Mall, and they're all versus your friendly–what is it called? Not the franchise tax. No, it's whatever. I forget what they're called. Jeff: We know what it's called. Toby: Yeah. Anyway, I'll remember it as soon as I could. I'm trying to think about it, but they keep suing the Board of Equalization, the BoE. It's $800 and they say that's the minimum tax, but they say, really, it's a fee because if it was a tax, then it'd be an unconstitutional tax because it's not attached to the income. They keep trying to call it a fee. They lose and then they change it a little bit and they lose again. That's just an aside. California is kind of evil. "We live in Washington. We have a Nevada C Corp which fully owns a watch and LLC and employs the kids. What are the recommended strategies to optimize for college tuition?" Wow, so you're doing a great thing. You are going to run them through payroll. When you're applying for things like scholarships, if it's going to be based on income, you're going to show that income. You're going to show those returns, but those kids should–most of that income is going to probably be underneath the standard deduction. Right now, it's $12,000. They're going to pay zero and they're going to pay very little on any amount over that. Plus, if you're smart, you're putting some of that money in a Roth IRA and they're never going to pay tax on that. It's smart to do this with your kids. If I paid tuition out of my tax bracket, it's coming out of my highest tax bracket. If I'm in the highest tax bracket, that's 37%. If my kids pay for their tuition and are working for the company, and they have to do something, then they pay at a third tax bracket, which, quite often, is zero. I do this with my own daughter. Last year, I think we paid $500 in taxes total for the year when it cost me $8,000 if I was doing it, but she has to do something. She has to actually work for the company and do stuff for the company. Other stuff you could do to optimize is dump it into–defer it into a retirement plan. If you want to do a 401K, they can put the first 18,500 of their income and they can defer it. You're still reporting it. I'm not sure it'll have an impact on scholarships or not. I have not seen it have much of an impact, but that's what I'd be doing, is the benefits far outweigh anything with this on the scholarship side. It is huge. Here's one: "I lent money to a real estate flipper. She gave me a promissory note, but it was not recorded with the deed of trust. Now, she is in default. Can I foreclose?" When you loan money to a flipper with no deed of trust, that's called a gift. I'm just kidding. You need to make sure that you're documenting it. You cannot foreclose until you actually file your secured interest. You got to have it filed and then, yes, you can actually start foreclosure proceedings if you want, if they don't pay it. You definitely want to make sure that, when you're giving notes–there's something called "first in time, first in right". You want to make sure you know it's recorded and you have your deed of trust against that house. Otherwise, somebody else could go slap theirs on first. There's also places where they get priority. In Nevada, for example, the HoAs get super liens. They actually step in front of the primary lender. It sounds weird but it's true. You want to make sure that you're documenting your loan and covering yourself as best you can, make sure that you're getting a personal guarantee and, if they have any other assets, you may want to slap a lien on those, too. All right, "With a new company, there's quite a lot of expense reimbursements. Since I don't have a lot of revenue yet, I haven't paid it back. Is it okay to carry it over a year or should I go ahead and pay it back even though I'm still in the red?" Jeff, this sounds like you unless you're zoning out there. She has a new company, she has lots of expenses, she doesn't have any money that she's made yet, so should they pay it back, carry it forward? "Can I pay myself, reimburse myself in the future year?" The answer is yes, you could reimburse yourself whenever. The question really becomes, "Do I want to capture all my startup expenses in the first year?" Jeff: Yeah, I think you do. You want to capture as many expenses as possible even if you're not getting directly reimbursed right away. Toby: Yeah, you have two choices whenever you fund a company. You can fund it with your cash and then it's going to have a loss and it's going to carry that loss forward if it's a C Corp. If it's an S Corp, you can actually take that loss. I've contributed $20,000. That's my basis and it loses 20,000 and, technically, I'd have a $20,000-loss with an S Corp. Usually, we're seeing this in C Corps, and you just carry it is a payable and a receivable. It's payable to you, you would say, "Hey, it owes me some money. It's kind of like this." I always use Krispy Kreme in my examples. I go out for Anderson and I bring in 12 dozen Krispy Kreme for a meeting or something, and the others say, "Hey, I'll pay you back but we don't have the money right now." It doesn't mean that it goes away; it means that I'm sitting there, waiting for them to pay me back. If they pay me back in two years, all it means is they can't write that off as a deduction until they pay me back so they're not going to have a loss if I'm carrying it as an IOU. If I give them the money to buy the doughnuts and they buy the doughnuts, they get the loss right away even though they haven't returned my money to me. They could return that money to me at any time. For me, it's always going to be tax-neutral. "Do I need to be on payroll with my real estate income or can I just take distributions from my LLC?" This is regarding Trump's 20% deduction on the plan. If it's investment real estate, you never have to take a seller as long as it's rental real estate. If it's flipping and it's in an S Corp, then you would have to take some salary if you're taking distributions. I don’t want to twist it. This sounds like it's just an LLC with rental property. You do not have to take it. The 20% is for 2018 onwards. If they think that it has a sunset clause, the end of 2025. Is it the end of 2025 that it ends? Jeff: Yeah. Toby: Yeah, so 2025. Here's a really long one. Boy, this is a really long one. Let me see if I can condense this. "I have a Wyoming LLC that is the sole member of a second LLC that is disregarded entity. I funded the Wyoming with 8,500 and the Wyoming funded the other bookkeeping QuickBooks balance sheet shows an owner equity 100% of 16,500. This is offset a balance sheet with capital contribution. While this does end up with net equity of 85, it gives the impression of the equity, which is incorrect. Is there a different way of handling?" Do you see what they're doing? Jeff: This is what we call–anytime you have combined financials or tax returns, you're going to have a–you may have a payable from one to the other where you've lent money to the other company, but when you do the combined financial or tax return, this is what you call an eliminating entry. If you lent $8,500 to one, those two entries are going to offset each other and it's going to be zero on your tax return. Toby: He's looking at it and saying, "Hey, they took the eight that I put into the second and added it to the 8,500 that I put in the first," and it's only 8,500 and then 8 went to the second LLC. Jeff: Yeah, I think you just need to clarify that it was the same money that– Toby: We're doing it and we'll take a look at it. We'll grab that name and, when we can, I'll print this out. "Can SMLLC, single-member LLC, disregard an entity under an MMLLC, which is a multi-member LLC taxed as a partnership, be converted to a single, multi-member LLC taxed as if–" you guys are killing me, "And would the tax changes be implemented?" What you're really saying, Billy, is, "Can I spin off a single-member LLC, make it into a multi-member LLC and change it to an S Corp?" The answer is yes. We just have to make sure that we follow the S Corp rules, which means there's got to be natural persons owning it, resident aliens–if it's somebody from out of the country, that they reside in the United States in certain trusts and even certain single-member LLCs. All right, to the question about–this refers to qualified business income. Sorry for lack of a better–no, Janet, you've already got it. "Since rental real estate is included for the 20%, are you also required to be a rep for that to be true?" No. You automatically get it. "High-tech network engineer, does it qualify as special services?" If you're not a network engineer and it's just you, then I would say probably yes. If you have a company and it's not so much you but your company has its own–like it's lots of people and it's just known, then the answer is no. Then, you're not. Jeff: Yeah, there were some specific carve-outs. I think the architects got a carve-out of this, but there's a few industries that have been specifically exempted from those specialized industries. Toby: I'm not sure but software engineer–I would say that if it's just you, chances are going to be under the special services. "When I file taxes, the taxes for the rental property show up on my tax showing a schedule form that is Schedule E. I almost $300,000 with my real estate and other income as a single woman." I think we already talked about this one. "Is there anything I can do to reduce my taxable income?" Yes, Janet, you can make contributions to qualified retirement plans. You can make contributions to charities, including your own. You can make contributions to C Corp if it has a business relationship. There are lots of things you can do or, if you have anybody that you need to pay salaries to like kids or somebody that's working with you, that would be something else you could do to lower the taxable income. "If you were writing out another slide, it's not showing up on my computer." Sorry, Sir. I think that's where all they go. "What about an IOL as a tax-deferred compensation for my property management income?" That would not work. An IOL is tax-neutral although you can do tax-deferred compensation where it's taxable to the entity and it's not taxable to you under certain circumstances. If I do tax-deferred income like, "Hey, I'm taking deferred compensation," I need to be at a losing. Usually, non-compete is going to be the thing that makes it work. We use these especially in the non-profit world where somebody says, "I don't want to be paid; I want to work, but I do want to get paid eventually for all the work I'm doing now. Rather than pay me this year, pay me when I'm 65 and maybe I wipe it out or not, but as long as I have a non-compete with that–" it's saying, "Hey, basically, if you go work for somebody else in a competing industry, you lose all that deferred compensation." You should be good. "I purchased a new computer that cost less than $2,500. Is that a straight expense in the current tax year or some weird depreciation thing?" Dean, it's called a Section 179 deduction. You can buy up to $1 million, you're good. You can write it all off. Otherwise, that would be depreciated. They also have 100% bonus depreciation, so we're going to catch it no matter what. Bonus depreciation is, if it's less than a 15-year property, you can write it off this year. You're not required to. Somebody says, "Is 199A or that 20% a 20% tax deduction or a 20% reduction?" No, it's a 20% deduction against your qualified business income. The net effect could be much more than 20% depending on your tax bracket. If you're not in a high tax bracket, then the net effect won't be huge. If I'm in the highest tax bracket in a state that's taxing me where I'm at 50%, that 20% deduction could be worth a ton. It could be worth significant amounts especially if I'm in a company that's not a specialized service and I meet the requirements. I could have hundreds and thousands of dollars of qualified business income being exempted, and that could be worth hundreds and thousands of dollars to me from a tax standpoint. We already did this one. Somebody who had their spinning left. You can go in bite-sized pieces, guys. We're going to break these things down, and I understand that we're going through fast, but that's half the fun. We're not dwindling around here. "My self-directed IRA received a K1 for net rental loss for a passive investment of $50,000. Do I need to file a 990 T to show loss? Does the IRA custodian sign the return or can I sign?" Jeff: Here's what happens: If your IRA is a partner in a partnership, that partnership is required to issue a K1 to all of its partners. That doesn't mean you have to do anything with the K1 in your IRA. You're not going to recognize any taxable income until you actually start taking money out of the IRA, especially since this is a rental property we're talking about. Toby: Cool. Hey, this is a really good one. By the way, if you ever do a 990 T and it says self-directed IRA, your custodian does have to sign, and they like to charge you for that. "401K, 401K." "I have a C Corp with accumulated losses and would rather close it than repurpose it. Is there a way to direct the loss of my personal taxes? Is it possible?" The answer is yes. It's called a 1244 election. It should have been made when you issued your stock. If Anderson did your C Corp, we already did that because I do it with every single corporation. You can then write off as a single person up to $50,000 or up to $100,000 if married, filing jointly, and then it could be used to offset even your W2 income. Jeff: Going back to one of the earlier questions, this is one reason we want to start recognizing reimbursements and stuff as early as possible to establish those debts to you early on. Toby: Yeah, I had this happen and we actually had–the one time this was ever audited was because this accountant refused to give him a $67,000-deduction. It was one of our clients who was a trader who was ready to launch and go into his business and then his employer made him an offer he couldn't refuse and gave him a whole bunch of our money. He took a $67,000-loss. He had never made a dollar in the corporation. We went under audit. We won. Yay. It took two seconds because it was a single letter and we gave him the law, and it's a statute. The IRS is just a policing agency. If there's a statute that's clear, they don't sit there and fight with it. I think it was a $38,000-reimbursement–what do you call it–refund. Awesome first-timer. We love first-timers. Thank you for joining us. "I want to receive an invite, a reminder to a different email." We can give you that. You can always use this when you register for the Tax Tuesday. Just put in your other email. "Interested doing sandwich lease options. What is the best business structure and what document can you provide to protect myself from sellers suing me if a tenant or buyer stops paying rent or if a tenant or buyer trashes the home?" That's a tough one. You're literally leasing it and then re-leasing it with the right to buy. Let me think about this one. How am I going to do this? I'm going to be doing that through an entity. The way you protect yourself is to keep very little amounts of asset in that entity so that if you're sued, it's not you; it's the entity itself, and the entity doesn't have much to lose. That's a tough one. I tend to stay away from stuff like that. I want to buy the property and then you do a lease option in an LLC. Jeff: Make sure you have insurance. Toby: Yup, make sure you have insurance, too. That could happen so the tenant trashes the place and somebody else says, "Hey, wait a second." That's why there's always risk. What you do is you just keep it to a low. "Is it hard to set up classes in QuickBooks? Does Anderson do this?" It's not hard and, yes, we do it. "How long does it take to set up a class in QuickBooks?" Jeff: No, you'd have to ask bookkeepers. Toby: Jeff's such an accountant. Yes, it's actually very easy. Jeff: Actually, the bookkeepers are really good at it. They do it all the time. Toby: It's literally all you're doing, is setting up another class. It's almost like a revenue class so you might have revenue that comes in from plumbing and then selling products in your plumbing business and then, "Hey, I have one that's a consulting," and that might be another class. It literally takes two seconds. "What if the Wyoming LLC owns a C Corp which owns an LLC?" I don't know what that means, but what we mean is–I imagine for the 199A. We're just going to look at it is the C Corp owns an LLC that's not going to be qualified for the 20% deduction. The LLC that owns the C Corp, if it's doing other activities, might qualify for the deduction. Here's the problem: In the qualified business, the part I didn't tell you about is what is qualified business income. Dividends, interest, capital gains are not included in that definition so if you're issuing interest from a C Corp to the LLC that flows under your return, you're not going to be getting the 20%. "If you set up QuickBooks with a single entity and use class as a separate income, can you also print a balance sheet by class?" Jeff: Yes, you can do it if the balance sheet is also classified. Toby: Okay. See, we're good. We're getting there. We only have about 200 more questions to go. I'm just teasing you. We've gone through about three-quarters of them. "What is Jeff's last name?" Webb. "I have a rental company. This will be my first year doing taxes. What can I expect to pay on my capital gains? What are some determining factors?" Isaac, if you're a rental company and you're selling–like if you have capital gains, it's going to be depending on whether you sold it within a year or after a year. If it's less than a year, it's going to be ordinary income to you. If it's over a year, it's going to be taxed with either 0%, 15% or 20%. If you make over 250,000, you're going to get to add no another 3.8% and then whatever your state tax is. What are the determining factors? How much you make. If you're married, filing jointly less than 77,000, your capital gains rate is zero. All those things come into it. You can always write us at webinar@andersonadvisors if you want to ask specific questions. "I'm in the process of setting up QuickBooks account for my C Corp. I have a construction business and a hair salon that are DPA-ed as C Corp. I am flipping single-family residents in Wyoming LLC? I have sub-expense and sub-income accounts for those." This is getting long. This one, we may want to answer next week because this is kind of cool. It's talking about sub-accounts. I'm just going to table that one unless you want to jump on it. Jeff: No, I think there were a couple of issues in there. Toby: Yup, "But you don't pay tax until the withdrawal, correct? That was just with regards to the IRA." Steve, you do need an account and, yes, you don't pay the tax until you withdraw, add up in IRA. If you have unrelated business income tax or debt finance income out of an IRA, you'd pay it in the year that it was generated. "Can I set up an entity to receive W2 income and max out top […]?" Yes, but you can't do it out of a self-directed IRA. The reason being is that you are a disqualified person so you cannot do that unless you do something called a ROBS transaction, and that's going to be a major topic for another day. That's if your IRA invests in a C Corp that you set up and there are ways to do it and then you could actually pay yourself, so there. "I recently rolled over a 401K to equity trust IRA account, lending funds to other investors charging interest. Is interest income taxable to the IRA?" No, you can do that all day long, and equity trust is having to sign all your docs. My recommendation would be to set up your own 401K so you can sign the loan documents. Somebody says, "How many times a year can you roll over from 401K to IRA or reverse rollover?" It depends on whether you're doing a direct rollover. Jeff: You can do a trustee to trustee every day if you want, meaning you're going from TDM trade to Bank of America. You can do those as long as it's directly being transferred. You can pull the money out once to yourself once every 12 months, and it's a rolling 12-month period. If I pulled it out today, then I wouldn't be able to do it again until next October. Toby: Somebody asks, "Can I roll individual stock holding into Roth trading account if the current value is under the 550 limit, and how?" The answer would be, really, no; you're going to have to liquidate the holdings, open up a new account in the Roth IRA and then contribute the 5,500. It's a pain in the butt, I know, but I don't make the rules. It's this whole Bank Secrecy Act and all this stuff since they flew planes into trade centers. "Is the old rule dead on personal residences two out of five years?" No, that's still the rule, and we still use it like crazy. That's exception 121. Jeff: Yeah, they were talking about making it five out of eight years, and that got thrown out so it's still the old two-out-of-five rule. Toby: Yup. "Do my startup costs carry over two years if my net was negative?" It's actually 20-something years. Jeff: 15 years. Toby: 15 years now? Nate, you can carry forward your startup costs. Is it 15? Jeff::Yeah. Toby:  "Hey, wait a second. I have an S Corp. They keep charging me the 800 fee ever