Podcasts about your cpa

Demystifying Taxes: Insights for Business Owners | The Mills Knows Bills Podcast Episode 43, Season 5 Link to video podcast episode: https://youtu.be/CykZRwgPKZQ Welcome to Season 5 of The MKB Podcast! Host Mills Bender, founder and CEO of Mills Knows Bills, discusses strategies for business owners and variable income earners to manage their finances effectively. Let's get to those burning financial questions! In this episode, Mills is joined by tax strategists Drew Clukey and Tyler Tebault of Clukey & Tebault to discuss crucial topics around tax planning and strategies for business owners. They explore the importance of proactive tax planning, differentiate between accountants and tax strategists, and debunk common tax myths. The guests also share personal anecdotes from their careers, provide advice for new business owners, and highlight the value of consistent communication with your tax professional. This episode is packed with expert insights to help you navigate your taxes more effectively and avoid common pitfalls. To connect with Tyler and Drew:  Website: https://www.clukeyandtebault.com/ Tel: (904) 679-3119 Email: Info@ClukeyAndTebault.com Do you have your own burning financial question for Mills or the MKB team? Email: info@MillsKnowsBills.com Website: https://MillsKnowsBills.com Instagram: https://instagram.com/@millsknowsbills LinkedIn: https://www.linkedin.com/company/mills-knows-bills Subscribe on YouTube for the latest from MKB @MillsKnowsBills 00:00 Introduction to Mills Knows Bills 00:53 Meet the Guests: Drew and Tyler 02:12 Nationwide Services and Common Tax Myths 02:55 Social Media Tax Advice: Myths and Realities 06:51 The Importance of Tax Planning 13:52 Understanding Tax Strategies vs. Accounting 17:29 Common Tax Questions and Misconceptions 22:49 Debunking the Myth: Is It Too Late to Establish an LLC? 23:19 S Corp vs. Other Business Structures: What You Need to Know 24:18 Common Misconceptions About Business Taxes 24:59 The Importance of Consistent Communication with Your CPA 26:05 Why Business Owners Hesitate to Reach Out to Their Accountants 28:14 Favorite Industries and Clients: A CPA's Perspective 31:13 Building Strong Client Relationships 36:11 Handling Tax Questions and Common Pitfalls 37:53 Biggest Challenges and Success Stories 41:52 Innovative Tools and Team Collaboration 43:30 Final Thoughts and Contact Information #millsknowsbills #financialpodcast #mkb #podcast #businesstaxes #businessowner #entrepreneurfinances #variableincome

Tiff and Britt give tangible tips for creating a wealth plan of action. They cover everything from knowing what your ideal work-life balance is, when you hope to retire, the right systems you can create now to set you on your path, and a ton more. Episode resources: Subscribe to The Dental A-Team podcast Join Dental A-Team Consulting Leave us a review Transcript: The Dental A Team (00:01.504) Hello, Dental A Team listeners and welcome back. I am here again with Miss Britt. Brilliant Brain Britt is what I've dubbed her today on some awesome business tips and insider tips, things that we've learned along the way, things that Britt has actually gone to school for. So welcome to that. Thank you, Britt.   Britt (00:19.787) Real life is cool, Cliff. Real life is cool, too.   The Dental A Team (00:25.935) Fair, fair. But I do love picking your brain for it on these pieces because little do many people know you do have a degree in healthcare management. I think it's really, really freaking cool. And not just any degree, like you have, you know, your master's degree in this and it's really freaking cool you guys because   It means not only do we have, you know, the knowledge that we've all picked up along the way and we've taken courses and CE and all these things and learned and learned how to use freaking Excel and things like that. But Britt also has that side of it that I get to pick her brain on things that just really, really helps you guys learn how to manage your business. So we all do have the real life training, but Britt, I think it's really cool when we get to utilize your degree and you get to utilize it in our company, I think.   I assume you do, but it's really cool when you get to do this stuff. So thank you for being here with me today, Britt, letting me pick that beautiful brain of yours. And just for always being here for us, you are an amazing human being and anything that I need, you're like, yep, we'll figure it out. So thank you for recording with me. How are you doing today, Britt?   Britt (01:15.638) Mm-hmm.   Britt (01:34.127) I'm doing well, thanks Tiff. These are fun combos because one, like we both have years of experience in dental and so, and worked with a lot of clients. So it's fun just to kind of talk about ideas and cool things we've seen and what we've learned along the way.   The Dental A Team (01:49.156) Yeah, I agree. I agree. And today is one of my favorite conversations. I love nothing more than to help a doctor and a business owner of any caliber and degree learn how to make their business work for them and then not spending so much time working for their business. Like you guys became business owners, you became practice owners so that you can have your own business, you could make your own hours and you get into it and you're like, gosh dang it.   Brit, this sucks, I'm working all the time. And it's like, yeah, you will do that for a little while for businesses and it'll come back around every now and again as well. But really looking at how we can plan and project for the future so that you can make that switch at some point and it flips to where the business really is creating the lifestyle of your dreams. And that's something that we work really hard at. I know we work with mostly entrepreneurs, which means.   We work with visionaries, we work with the people who have the big dreams, and then we get to help implementers, office managers typically, right? And doctors learn how to be an implementer from a visionary, but we get to work on the implementation side of really finding the strategies and keying in on the pieces that are going to help us get to that big vision that you want, doctors. So we have other podcasts, a ton of podcasts that'll talk about how we've helped other doctors do those things. I want you to listen to those. I want you to never feel like you're alone.   We are here for you today. I'm actually really excited about this one today strategic wealth management and really planning for that in the future. And Brett, this is going to be a lot of conversation from you. So I hope you're ready. I hope you've got all your words ready to be used today. I know I use a lot of words in a day and I feel like I never run out, but you might run out. I don't know. But I hope you're ready for this because this one is this one. I'm letting you take over quite a bit here on the strategic planning because   I think you do above and beyond look further than a lot of people even look, and look further than maybe some of our listeners are even thinking about. A lot of our doctors are younger, you know, they're 50 and under, and these generations right here, and these two, know, generations, the 30 to 50 generations, we're not always thinking of our retirement. I don't know what happened to us, but we kind of forgot that piece was going to come one day.   The Dental A Team (04:08.186) for a lot of us. So really looking and making sure that we're considering those pieces and you do that well. You go retirement, I think you go retirement first, like what's our retirement plan and then five to 10 years. so, Britt, take us through some of the pieces that you work with clients on and you've worked with, you know, clients even before you were with the Dental A Team. I'm really making sure that we're looking at our wealth management from a long-term and a short-term.   How do you help people prep for that? What's the first space you look for?   Britt (04:38.719) Yeah, this is always fun and that's why I love lately I've been on some of our free assessment calls right even with clients coming in to say like all right where are we at you know how can we help you and this is always an important thing that I want to know is right how long do they see themselves owning a business or doing dentistry both really because it just helps us to figure out   We talked about this already even with KPIs. I'm like, what's the future? And then I work my way back. So I'm like, all right, what's the long term? Where are we wanting to go? If it's like, I know I've got at least 15 years of me. Great. Awesome. Like that at least gives us a starting point of where we think we're going and how long we need this business to be producing or the value we need from it for how long you're going to be retired. And so that's where I start is thinking, okay.   So for those of you out there that don't know right now, number one action item, it doesn't have to be exact, right? You don't have to do it, but like, what would you love to be your age of retirement to where at least you're not sitting in the chair anymore doing dentistry? That's an important number. One, for you to know, and two, get a good financial advisor, because they need to know that number, because then you're going to work with them to figure out what lifestyle do you want? How long do we think you're going to, you know?   The Dental A Team (05:35.121) Thank   The Dental A Team (05:51.538) Thank   Britt (05:57.333) live on this great earth and live an awesome life and how much money is that gonna take? So we know, all right, what value do we need in investments, in an account, within your practice, because that's an asset for you as well. How much wealth do we need to build for you to be ready to retire by that point in time? And so, yes, even if we, whether a client says it or not, I'm always thinking about what's that ultimate point? What's the end point we're working towards and how are we gonna get there? Or at least I wanna get you in a position to where   The Dental A Team (05:59.314) Thank   Britt (06:27.317) you have the choice to do that, right? You don't have to, but I never want a client to get to the end to where they're like either physically can't do it or something else and they're not set up to be able to live a great life and enjoy it for the rest of their days. So always thinking that big and then thinking about like, all right, and kind of, there any milestones? Some doctors know right away, hey, I want to work down my clinical days and we'll spend more time with family.   The Dental A Team (06:29.009) Yeah.   The Dental A Team (06:51.955) you   Britt (06:52.423) Awesome. Let's figure that out. Some are like, no, I want to work and do you know, be in the chair. That's the part I love for as long as I can. Fantastic. That just kind of helps us to see what are the pieces we have. I love it. I think Kira was saying the other day.   life is ultimately just like a series of algebra equations, right? Like everything you look at, it's like, all right, I've got A and C, what B do I need to get to C type of a thing, right? So that's kind of how I look at this is, all right, where do we ultimately need to go? What do we need this asset, this practice to become to do its part in that grand scheme of things? So knowing that first, and then with the practice, it's like, all right, great.   The Dental A Team (07:12.253) Yeah.   The Dental A Team (07:19.111) Yeah.   Britt (07:35.687) Either, what do we need to build in value of building this up to where what's our EBITDA? What could I sell it for? Not saying you're going to sell it, but I always want it to be worth as much as possible.   And also like what do need to be making from that practice? Some people they need the full salary of doing the clinical and you know making a lot out of that practice for a certain amount of time and then even just knowing of like all right once I've done that for 10 years I don't have to I can but I don't have to I could always bring in an associate and make X amount off of you know profit from the practice You know based on kind of what we estimate there will be so that's kind of how I work it We've got to know the end   The Dental A Team (07:46.034) Agree.   Britt (08:15.769) goal, financial advisors, know dentist advisors are one of our favorites, but working with someone to help you see theoretically when you would retire, what amount do need by then, what current assets do you have, and then we help you on the practice part. What do we need that practice to be or what do we need your income to be from that practice to get you where you need to go. So there's my like long-winded explanation tip.   The Dental A Team (08:30.451) The Dental A Team (08:38.781) Yeah.   It was long way to do it short. You accomplished both. You accomplished both. So I agree with the retirement piece and I think I always look like five to 10 years, right? But you're right. That retirement piece is so important. I have had doctors that have come in maybe later in their career with Dental A Team and they're like, gosh, Dental A Team, I'm ready for you and guess what? I'm tired.   And it's like, okay, well, where are we? So now we're like trying to pick up steam towards the end of their career when they didn't see that coming. Or they had an injury or I had a doctor this year that had some really big health scares this year and he wasn't ready. He's like, I know that he's not ready to retire and he wasn't ready to start thinking about it, but he had to. He was forced into that space and that's so much harder and so much scarier than it needs to be.   if we just plan and project a little bit further. So it opened me up too. It opened my eyes up like, gosh dang it, we've got to be on this no matter what. Always be prepared to sell whether you think you're going to sell or not. Always have a business that's sellable and always have a plan for that retirement piece. I think on our side, the Dental A Team comes in for both. We come in for that strategy. We're like, gosh, what do we need that to look like? Where do we want to go? How are we going to get there? How can we?   build this out together? And then how do we get everything systematized to where it needs to be? Get your money coming in. So our side is like, how do we get the money? How do we get the profit? How do get you to be more profitable? How do we get EBITDA up? How do we do these pieces strategically to ensure that you're prepped and ready to go? And then on the financial advisor standpoint, they're going to look at what does it take to live your current lifestyle? Is that current lifestyle what you're going to want to sustain forever?   The Dental A Team (10:28.948) based on the rates of inflation, what will this look like year over year over year for how long, like Britt said, do we think you're going to, you know, what's your life expectancy, your projection, they're gonna go, they're gonna go as long as they think that they can for you. And then it tells us how much do we need to be pushing into your retirement all the time to get there. So the financial advisor helps with the logistics, they have these really cool, freaking systems behind the scenes that they just.   plug a couple numbers into and it tells this projection and I'm like, are you freaking kidding me? That is so beautiful. But that it helps us on our side to be able to pair those pieces together and say, okay, I had a doctor this year that he's like, Tiff, like, I'm getting tired and I need to speed this up. And I was like, well, get your financial advisor on the phone. Like, let's figure this out. And he's got to pump $12,000 a month into his retirement.   Britt (11:20.791) Mm-hmm.   The Dental A Team (11:20.801) That's into his retirement in order to be ready for the projection he just gave his FA, his financial advisor. That's a huge chunk. Like that's a drastic change from what we were doing before. I think we doubled it. He was at like six or eight thousand, depending on what the month looked like. We doubled that. So having those projections early on, that's the strategic wealth management, right? Like wealth management is current. Like what do want your life to look like now?   And what do want your life to look like for the rest of your life? Wealth management is let us help you bring the money in. Let us help you get the money, get profitable or be profitable where you're at, whether you use it only to or not. Like get profitable within your business and then manage where that's going thereafter. Investments and CDs or IRAs or whatever it is that you've got your retirement, your 401k is like.   Britt (12:02.059) Mm-hmm.   The Dental A Team (12:14.763) What do you have going on on the other side that's generating income off of that income so that you can keep up with the inflation? You can keep up with all of the pieces that you want your life to look like and combining those, I think is the superhuman power. And with the right systems in place, the right training, the right people behind the scenes, a lot of practices are experiencing turnover, right? The last, I'd say five years, we've seen more turnover than we ever had before. People are like,   I'm in dentistry for 17 years or I've been at this practice for 22 years. Like we don't see that anymore. But with those systems in place, that doesn't have to affect the profitability. And I think before we were seeing that that was affecting the profitability because we were losing people.   and we were so dependent on the people and their knowledge, it was negatively impacting your strategic wealth management. Like it was negatively impacting the projection for your retirement. And one thing that we've learned in the dental field in general is to not be people dependent. So we're taking those systems and those pieces and able to duplicate them, teaching you guys the business side that you've never learned and making sure that all of that combined   is strategizing, like you said, Brit, for forever. Like, this is not just for today or just till retirement, this is for forever. So I love it and I love this topic because I just, I want everyone to understand how important it is to have those conversations and like you said, work backwards. We kind of work, I think a lot of us work from like, here I am, where do I want to go? And so we think how do we stack on top of   where I'm at, but you're saying like flip that board upside down and say, I'm going here. How do I, how can I work backwards from where I want to be and strategize? And it's brilliant. Yeah.   Britt (14:08.031) and you can always add more on, right? But that's like, that's where I need to be. So no matter what, whatever we work towards, that's where we've got to hit. And it just also helps you to make smart decisions about your practice. I think that most doctors would agree. Every doctor has a sell the practice day from time to time where they're just like, can't do this anymore. It's like, it's okay.   The Dental A Team (14:27.521) Yeah. Today is the day. Yeah.   Britt (14:30.455) Wait a minute, it'll be fine. But in those moments, especially as you get more mature in your career, I just talked to recently a potential client and he's like, well, physically and all this, do I sell or if I'm going to stay, then I want to bring in an associate to not have to work as many days. I'm like,   we can absolutely help you if that's the direction you want to go. You need to know first what you need, right? Like that's, you need to know the need first. And then, cause chatting with you, I'm like, you, it sounds like you're ready to go like live the retired life, right? And enjoy your family and do all of those things, which if you can, then great, why not? Then you know, you can make that choice confidently and be prepared for it. But until you talk to someone for financial to see what's your plan for retirement.   The Dental A Team (14:57.741) Yeah.   The Dental A Team (15:05.239) Yeah.   The Dental A Team (15:10.466) Hmm.   Britt (15:19.191) What assets do you have? What does that look like? I'm like, I don't, can't, one, I can't advise you even on anything. Ultimately you're a choice, but I'm like, even knowing what direction to go, that's what you need to do first. And then from there.   Make the decision and you want to stay in there like then absolutely come to us. We'll help you grow. We'll help you bring out an associate. We'll help you make it something that's also going to be valuable to sell while keeping in mind like yeah, don't go if you don't need a bunch of equipment, don't go buy a bunch because maybe only need it for like five, 10 years and then you're going to be selling it. So it just helps us to make smarter decisions.   The Dental A Team (15:47.19) Yeah.   The Dental A Team (15:51.226) I totally agree. I totally agree. And I think at the beginning about you said like, you can add to it, like, don't think that because you set this, this star, this ladder, it's like, I have to do these things. It's not that rigid. It's flexible. The money side, the financial investing, the retirement. Yeah, for sure. Like your financial advisor is going to get you set up and he or she is going to take you the way like find, find someone you trust, find someone who knows the information, let them help you.   Britt (15:57.995) Yeah.   The Dental A Team (16:20.341) Also work closely. I always say work with your financial advisor and your CPA super closely. And even if they can communicate, it's really smart because your CPA is going to have a like right now mindset and your financial advisor's got to what's later look like and you've got to combine those. adding in your consultant piece is huge. I have a lot of clients that I'm talking to, both of them with them or getting information from my client that they're sending. Cause I'm like, cool, if your financial advisor wants us to do that.   This is how we're going to move that needle. Cool. Your CPA wants you to be prepped for those taxes. This is how we move that needle. Let's get this bucket going over here. Cause they're going to have some of those like obscure plans. They're like, do you need to do this? And then they're like, okay, have fun. Good luck. And then they're gone. But then you're sitting there like, okay, cool. But how am I supposed to get five, 10 % more profitable this year than I was last year? I can't just wish it into existence. So there's a few pieces there. It's ever changing.   Britt (17:19.297) Mm-hmm.   The Dental A Team (17:19.587) just like the world of finance is ever changing. So we can add to and we can subtract at any point and change the trajectory. That's the really fun part of the black and white side of watching your practice by numbers standpoint. We see those trends and we're like, great, let's move it a centimeter, right? Let's move it a millimeter and completely change it. I always tell doctors, if you torqued that implant,   a millimeter too short or a millimeter too far, right? You're gonna get a drastically different situation than if it was spot on. If you're like, I don't know if this is spot on, you go a little bit further, that millimeter counts. So thinking that we have to rehaul everything is like saying we have to rehaul the implant. No, you just need to torque it, right? So then we just gotta, we just gotta torque it another millimeter to see or back it off the millimeter to see where we're gonna take it next. And I do have a practice that,   The doctor when we first started was like, in 10 years I wanted to look like this, in five years I to look like this. Well, in three years, we're at three year mark, he's like, I actually don't want those things, Tiff. Cool, cool, that changes it then, right? That changes the trajectory. He's like, I actually want that money then to go to this. It's the same money, but we're putting it on a different focus because his agenda has lined up differently. The things he thought he wanted for his family three years ago.   are very different than the things he's realized he wants for his family now. So setting those sites, but knowing that they don't have to be rigid, they can be flexible. You've just got to be working with the right people. And Britt, you said it earlier, like making sure you've got somebody on the system side that's really helping implement and strategizing with you and making sure you've got somebody that's strategizing on the financial side as well. Britt, I love your brain. Thank you. Thank you.   Britt (19:06.871) It's fun to know a good amount about this too, right? So this is like the fun to see like both sides of it. And those, I don't know, it's part of the why, right? We care about our clients, why and their ultimate goal, right? And then as people as well, which I know you do big time. And I feel like that's   The Dental A Team (19:22.734) I think it's...   Britt (19:23.575) part of it that I'm like, do you, should be like, how do you want to enjoy life, especially like as you retire, being able to enjoy family and grandkids before you aren't physically as able to do things. So that's part, that's why it's part of it. Cause we care about you as people and we want to make sure that ultimately your business feeds that.   The Dental A Team (19:41.697) I totally agree. totally agree. Actual items are really easy, you guys, like for us. Actual items are easy for us. For you, you've got to start dreaming if you haven't dreamt yet. And you guys, I think most of us dream and we're like, this is the thing I want. And then we just kind of like sit on it because we don't know that we deserve it yet or that we've made it to that point. I've got a lot of younger doctors. They're like, I don't make enough to talk to a financial advisor. Yes, you do. Everyone at Dental Assistance listening today.   Britt (20:06.547) Uh-huh. Uh-huh.   The Dental A Team (20:09.808) Treatment coordinators listening today, you make enough to talk to a financial advisor. Everyone should be talking to someone who can help advise them and managing their money and doctors, you especially like, what is it going to look like? How can I make sure that my business is sellable and that I've got my life and my family's life, my kids lives ready to go, whatever that looks like. So step one, dream bigger, dream further, dream and plan for your retirement as weird as that might sound for.   our new grads, I want you to think about when you want to retire and maybe plan a couple years ahead of that even if you think you want to retire at 65 or 70 or whatever age that might be, maybe plan for retirement when you're super young to 60. Like give yourself that flexibility because why not? Then you've got the last five to 10 years to just be like, no, I'm selling today, right? So plan ahead. So think big, dream big, you guys. Come up with that projection. What's your age range?   Chat with your consultant. If you're already working with Dental A Team, you've got a consultant in your back pocket. Chat with one of us on how to get there. If you don't, give us a chat, like give us a call. We're doing these free assessment calls. and Kira and Shelby and the brains behind these things are huge. So you don't even have to be a client with us to help get some of that assessment going. And then three, make sure you've got a financial advisor and a plan for that strategic wealth management. Britt, is there anything you can think of that...   we've missed or you want to re-highlight or anything before we say goodbye.   Britt (21:36.381) The only thing is you start somewhere and then that's where you at least do a check-in at least every year with whoever's helping you with their finances to say on track off track anything change awesome keep going so that's only addition is it's not a set it and forget it it's a make sure at least every year minimum you're checking in on where your assets are at   The Dental A Team (21:56.285) Totally agree. I love it. Thank you, Britt. This has been so much fun. This is one of my favorite conversations as well. So I'm super glad that we got to have this today. You guys, you heard it here first, I hope, or second or 15th. I don't care. I hope something hit today that you're like, yes, I've got to go do that. I want you to prep. I want you to plan. I want you to talk to the right people. Let us know how we can help you reach out to your consultant. If you're already a client, if you're a future client, hop on for a free assessment call.   And if you're just someone who's like, I need an assessment, hop on a free assessment call, we're here for it. But reach out Hello@TheDentalATeam.com with questions, with comments, with feedback. We want to hear from you guys and we want to help you plan for your best and brightest futures. Thank you, Dental A Team listeners, and we'll catch you next time.

Cost segregation studies can significantly reduce taxable income by accelerating depreciation on rental properties. They reclassify certain property components, such as flooring and lighting, to shorter depreciation schedules (5, 7, or 15 years) instead of the standard 27.5 years for residential or 39 years for commercial properties.  This method can result in substantial tax savings. For example, a $510,000 duplex study yielded $131,000 in accelerated depreciation, potentially saving $40,000 in taxes at a 30% rate.  Although the percentage has been stepping down, it may be reinstated to 100% under the Trump administration. Initiate a cost segregation study estimate here to determine the potential tax savings.  GRE Free Investment Coaching: GREmarketplace.com/Coach For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Show Notes: GetRichEducation.com/537 Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, when you reduce your taxable income, that's a zero risk return on your investment. You'll learn how to do that today with any rental real estate that you own through what's known as a cost segregation study, even those without a giant portfolio can save 10s or hundreds of 1000s of dollars. An expert guests and I break it down with real life examples, see just how it can help you today. On get rich education   Speaker 1  0:34   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:19   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:35   Welcome to GRE from Berlin, Pennsylvania to Berlin, Germany and across 188 nations worldwide. I'm Keith Weinhold. You're listening to get rich education. And one way that I like to be positioned in real estate is the sense that I own it directly, yet I use a property manager so that I'm shielded from the day to day responsibility. I care, but I can still live my life now you might favor direct ownership like I do, yet choose to self manage your property instead. That's a viable way to do it. Self management is how I started out, but however you handle the management when you own directly, you can alter your effective post tax rate of return on your investment, and that's what we're talking about doing today with a cost segregation what this effectively does is increase your tax depreciation benefit. Though depreciation sounds bad as a word in the real estate world, even without spending any of your own money, it's still classified by the tax code as an expense that you can deduct from your taxable income. You don't want to reduce your income, only the taxable income reducing the portion that the IRS can get a piece of. Now, unless it's a condo, your rental property probably includes both a structure called the improvement and also the land. Now your improvement has components that wear out, and even the IRS knows that the land does not wear out yet. There are items on the land that you can get this accelerated depreciation on through a cost segregation, like fencing and lighting and carports. A lot of people don't know that, so there is therefore a land improvement segregation often on a 15 year schedule, but it's even more lucrative to get cost segregations applied to things inside your building or home that wear out faster, like countertops or flooring, as we'll see today, on shorter schedules, like five or seven years. Said another way what you're doing is that you are shielding more of your taxable income. And I'm going to ask today's Cost Segregation expert guest for an example near the start of our conversation, so he'll give us some numbers. And you want to listen to that part closely, and you might find yourself skipping back to re listen to some parts today as we give real life examples on how a cost seg works. Now, today is a Presidential Inauguration Day, so it's appropriate that we cover this today, because Trump is widely expected to reset 100% bonus depreciation, which, as you'll see, factors into our discussion today. And frequent GRE guest Tom wheelwright thinks that this is going to happen too this 100% bonus depreciation. What that means that, for example, all those land improvements that I mentioned on a 15 year depreciation schedule, where you could front load it and get it all in year one of your ownership and those components indoors. On shorter depreciation schedules, like five to seven years, you can get all those write offs in year one without waiting five to seven years. So that's. The sweetener that 100% bonus depreciation is, if Trump indeed brings that back, and you might say, wait a second, this sounds a little too good to be true. I mean, getting these amounts, you'll see they can be over 100k in tax savings, even for a small investor, that you can reduce your taxable income by Well, you know, it is just a little too good to be true, because when you sell the property down the road, you have to pay back 25% of what you wrote off this way in what's known as a depreciation recapture tax. So it's still worth doing. In a lot of cases, you would keep 75% of your benefit then, unless you do a tax deferred exchange on your sale, and then you could defer that 25% depreciation recapture tax. So yes, today's episode is deeper than most. And you know, being a Presidential Inauguration Day, and knowing that I like to drop a little levity here before we delve into deep topics, what does the outgoing presidential administration have to say about cost? Segregations get hot.   Speaker 2  6:13    I got Lana. I got hairy legs that turn that turnblonde in the sun, and the kids used to come up and reach in the pool and rub my leg down so it was trained, and then watch the hair come back up again.   Keith Weinhold  6:32   I don't know what just happened there. Let me just give him another chance to clear things up. I mean, you really can do a cost segregation,    Speaker 2  6:41   we have this notion that somehow, if you're poor, you cannot do it. Poor kids are just as bright and just as tall as white kids.    Keith Weinhold  6:51   Gosh, oh dear, I don't I don't know where to go with that. And hey, if you're a new listener, you know, over time, we poke a little fun at every president. We do with Trump as well. We do with Jerome Powell. No one is immune around here. Some people, hey, they might find it funny that a former real estate investor President like Trump wants to expand America's real estate portfolio by taking Canada and Greenland in the Panama Canal back too. Politics matter, but this is not a politically partisan platform in any way. What's politically partisan? It's saying that the economy is like absolutely awful, but then as soon as your guy gets sworn in, one hour later, you're willing to call that same economy. Now suddenly, a great economy. No, a national economy does not change in one hour. So free thinking and thinking for yourself beats polarizing political partisanship. That's a way it's been around here from day one. Yeah, a little levity, a good knee slapper now and then knee slapper coming up in future weeks on the show here, the real estate guys radio show host and a friend, Robert Helms, will be here to update us on what's happening in the short term rental market, mid term rental market and more. We'll also announce a big collaboration that he and I are going to do together this year, and you'll be invited to join us today, let's discuss cost segregation.   You can take your tax burden and put a huge dent in it by accelerating your real estate depreciation deduction with a cost segregation This could save you 1000s of dollars every year or more depending on the size of your real estate portfolio. We're talking about how to specifically do this with a cost seg expert. He's been a real estate investor for over 20 years. He builds new rentals to hold, and he and his son do that together. In fact, you're currently building a 24 unit complex now. But the reason he's here is because he started a specific cost segregation company in 2012 and he completes over 100 cost seg studies every year. So he's really the guy to talk to. Steve, welcome on to the show. Thanks for having me. I appreciate it. It's great to have an expert like you here and Steve, I think a lot of real estate investors, they're familiar with tax depreciation. That's where for rental property, with residential, there's a 27 and a half year schedule. And commercial has a 39 year schedule. We take the reciprocal of those numbers, and that means that, for example, in residential, you can write off about 3.6% of the improved property value every year. That's pretty nice on a 500k property that right there is 18k that can be sheltered from taxes annually. But most investors stop right there. So in a lot of cases, they aren't maximizing their tax benefit. You can write off substantially more than that, potentially. With a cost segregation. So tell us about it.    Steve Trussell  10:04   Cost Segregation. As you just mentioned, you have your regular depreciation, which most do take. Believe it or not, I've come across a few people that own property for a few years, and they're not taking it at all, which is, I don't understand that maybe they're doing on accounting, but we get them on track with that. But as you said, 27 and a half and 39 year depreciation, whether it's residential, 27 a half commercial, 39 that's all well and good, but there's a lot of money left on the table, because when you look at the the piece of real estate, there's a probably 22 to 32% of the asset itself, the depreciable asset that's shorter life, for example, cabinets, flooring, light fixtures, uh, outside the landscaping, retaining walls, things like that that are shorter life. So what we do in a cost segregation study, we go in and we rebuild the property through an engineered study, we pull out the five and the 15 year property and reclassified. And so usually you're going to wind up with about 70, 75% of it will stay on the schedule. It was on whether it be 27 and a half or 39 but then that 20 to 30% that we're going to bring forward is a huge number. So for example, I just recently did one. It was a duplex, $510,000 was the purchase 433, was the basis, after land, the depreciable basis. It was kicking out about 16,000 a year in regular depreciation. For the investor, which covered, you know, their cash flow and so forth, so forth. Most people know how that works. We were able to go back and accelerate it and get 131,000 or about 31% of it in 515, year property. So they had $131,000 depreciation amount sitting there. Then they still were able to write off the 302, that was left at 11,000 a year. So they're still getting their normal depreciation, a smaller number, but that 131,000 if they can use it with bonus depreciation, is $131,000 of money sitting there. They could offset $131,000 of income. That's a huge number. If they're not doing that now, they're leaving money on the table.   Keith Weinhold  12:01    Gosh, $131,000 of potential tax sheltering, which is, yeah, a huge number on a 500k duplex, like you described.   Steve Trussell  12:11   It's a substantial number. And if you're not doing cost segregation, then you're leaving a lot of money on the table, like I said. So then it comes down to it. It's a, I guess, cost versus benefits. So the first thing we do is, I get the data from your purchase of your piece of real estate or server, whatever it is, we put together an estimate of benefit to give you an idea of what that would look like for you, like in this example, that's what we produced. Was what we thought we could bring forward for this investor. And then at that point, once we determine that you look at 131,000 the cost of our study is $1,830 so 131 versus 1830 is a pretty good bargain. I believe. I mean, I know I'm selling my product, but that's a pretty good bargain. Yeah. And then the third part of it is, so we've established that it's probably makes sense. But then can you use it? If you're a real estate professional, if you're familiar with what that means, you can write that off against your active and passive income. If you're not, you're a w2 and you're not quite there. Yet it may be that you don't do it now. You do it in a couple of years, but either way, the process is there when you can use it. Probably 80% of my investors are able to use it the year we do it. And if you don't use all of it, you carry it forward. So it's makes sense, typically, to do a cost segregation study, but that's what we help you establish by one, the estimate, and two, discussing with you or with your CPA, does this fit you? Is this something you can use as from a tax standpoint?   Keith Weinhold  13:37   Yes, it was just a few episodes ago. I describe more about what real estate professional status is. The main thing is, typically, real estate needs to be you, the investor's principal activity. So it's not very likely that you're going to be a real estate professional if you still have a full time day job.   Steve Trussell  13:56   There are doctors and lawyers and people like that that have a full time job, and they just could not justify spending the amount of time and being a real estate professional. But sometimes their wife would be the candidate to be that. So their wife becomes or this, or the husband. If the wife is there's the breadwinner, becomes the real estate professional, and then they can take that and write it off against their active income. And I don't want to jump into the CPA side of this. That's more of a CPA question, but that's how I understand it works. And I've seen that happen before, where someone who has a full time job is able to bring their spouse in as their real estate professional, and they're able to use utilize it that way.   Keith Weinhold  14:34   Well, to talk more about this benefit of $131,000 on the duplex example that you gave, if all that is able to be deducted at a 30% income tax rate, that is 40k of savings. 40k is about 30% of this $131,000 number. So that's the money the increase in net income in your pocket.   Steve Trussell  15:00    yeah, which is substantial, and that's where you look at your individual tax break. I'm gonna save 40,000 in taxes, and I'm gonna spend $1,800 for the study. Makes sense to me to do that. It's pretty good return on your money, but it comes down to being able to use it. And so that's the things that we explore when I'm talking to a client.    Keith Weinhold  15:19   Now, Steve, I know in the past, I have talked to cost segregation engineers and their firms on the phone, where they've looked at some properties that I had, and I don't remember whether they charged me for this or not, but what I learned is it wouldn't be worth going ahead with a cost segregation study on and I'm thinking that they didn't charge me anything to tell me that, but really what I'm getting at is, can you tell us more about when it makes sense to do a cost seg on properties, and when it does not?    Steve Trussell  15:46   Well, there's okay if you're going to sell it the next few years, it does because you're going to recapture so you don't want to spend money for a study only to get the benefit for a year and then sell it and have to recapture it. Now, in my personal situation, I have done that because I bought more property and I was able to use the cost segregation to offset my gains versus a 1031 So by and large, it doesn't make sense. If you're going to sell it, that's number one. You may have owned it for eight or nine years, 10 years, maybe you've used a lot of your depreciation already. So that delta between the accelerated depreciation and which you've already taken may not be enough to make sense. It may be a property that's, you know, $80,000 probably doesn't make a lot of sense to spend the money. The mass just doesn't typically work there. I've done some as low as that because they wanted the tax benefit, and I'll do whatever the client wants me to do. But those are the three things that I would say probably would determine whether it makes sense or not. But that's where the estimate comes in. I mean, you bring me a property, and if it's $40,000 I'll tell you before I do anything, probably not worth messing with it. It's you're not gonna get much benefit. But if you bring me a property and it's $125,000 asset, we'll take a look at it. I'll do a quick estimate for you, no charge, and it'll either apply and make sense for you, or it won't. And I'll be the first to tell you, if it doesn't you know your individual tax situation, I'm just talking about the dollars that we create for you versus the cost. If it doesn't make sense, I'll tell you. I don't want you to waste your money doing a cost segregation study if you don't need it or can't use it.    Keith Weinhold  17:14   Okay, So there are a number of factors here, which could include how long the investors own the property, how soon they plan to sell the property. It sounds like there's generally a correlation here, with the larger the property, the more likely it is that it makes sense to do the study as well.   Steve Trussell  17:29   It does. I have a client that I'm working on right now. He has six properties, and I think they were 2021, acquisition. So that was it four years ago, and they're not on a depreciation schedule, he hasn't taken anything. So in this case, it's, you certainly would want to do a cost segregation study, and that you need to have your properties on a depreciation schedule anyway, for whatever reason they weren't there. So in this case, if you came across a client that had a property for 10 years or for some reason it was never on a depreciation schedule, which that's, I don't know how that would happen, but let's assume it did. In that case, you would make sense to do because you're going to catch up all that depreciation from back, from 10 years ago all the way through today, which would even be a larger number. So that happens occasionally, rarely it happens, but it does happen where someone has never depreciated a property.    Keith Weinhold  18:17   We're talking with a man that can greatly reduce your tax burden. I think for one thing, first, he's gonna check to make sure that you're taking the basic tax depreciation. But beyond that, as you can see here, there's a potential to do a lot more with a cost segregation. You're listening to get rich education more when we come back on cost seg studies, I'm your host. Keith Weinhold.    hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President CaeliRidge personally. Start now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com.   Oh geez, the initial average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself. Earn. And 10% like me and GRE listeners are. Text family to 66866, to learn about freedom, family investments, liquidity fund on your journey to financial freedom through passive income. Text family to 66866   Robert Helms  20:17    Hey everybody. It's Robert helms with the real estate guys radio program. So glad you found Keith whitehold and get rich education. Don't quit your Daydream.   Keith Weinhold  20:32   Welcome back to get rich education. I love talking about tax savings vehicles, because it's like a no risk instant ROI to you, that's what we're doing today, when we're talking about accelerating your depreciation and reducing your tax burden through a cost segregation. And Steve, in my experience, I know that you can't just ask anyone to go do this study, like your Slack John, uncle with a tape measure and sending him out there. It takes a person with a certain credential in a Cost Segregation engineering analysis. So can you tell us more about what physically needs to take place to have a cost seg done?   Steve Trussell  21:09   Yeah, you're right. People. You could try to do this yourself, but it probably wouldn't pass muster with the IRS if you were to, if they were to question the study. One thing that we do, and most firms like mine would do also, we do back up the study, and we do guarantee that we will defend the study on your behalf. If there's a question, very rarely does it come up, but if there's a question from the IRS, we step in in your place and defend the study and justify how we arrived at these and that's only through a call to an engineered study. So if you have your your uncle, as you mentioned, doing it, it doesn't follow the audit technique guide. Doesn't follow the guides that are required for cost segregation study. You're probably going to find it getting kicked out and wind up owing taxes and penalties. So you want to make sure you're someone who's qualified and they do an engineer study, same thing as a CPA. CPAs aren't qualified to do a cost segregation study because it is an engineered study. We're breaking down the entire property and rebuilding it with our software on commercial buildings. You'd mentioned. What do we do? Commercial building? We do a physical site visit. We actually go to the property. Those are more expensive because we're there at the property and travel time and so forth. That to do that with engineers on residential we have a unique program. We do a virtual site visit where I can do this or my desktop, and that's why I'm able to keep the cost down. But we still do a site visit, because there's so many tools available today to be able to do a virtual site visit, I mean, for anywhere in the United States. So we can do this anywhere in the United States, and I take the tools that we have, the data I get from the client, we can do a virtual site visit and create the study from that    Keith Weinhold  22:43   really what the IRS is doing, whether this probably isn't reality, but you're saying your property wears out completely in 27 and a half years. That means that you can take some portion of that and depreciate it each year, but with some of these components that you mentioned, like the flooring and like the bushes. I think even the landscaping is one of the components that you can do a cost seg on. Basically they're saying that wears out faster.    Steve Trussell  23:11   Correct. Pretty much everything outside the building is 15 year life, sometimes even shorter than that. But that's how it classes 15 year life. Like your driveway, your like I said earlier, your retaining walls, grass, landscaping, fences, things like that, outdoor lighting, stuff like that. The inside the building is the five year property, which is your countertops, your flooring, fixtures. Think of things. I mean, floor is going to wear out before 27 half years, you're going to be replaced. You do it in your own home. Typically, you know? Well, I would never keep it for 27 and a half years. I would I wouldn't thank him in my house, but because they do wear out sooner. Tile is a little different animal. There's some debate about that, but for the most part, it's components like that that we're able to reclass in a five year classification.    Keith Weinhold  23:54   That's pretty generous. Grass wears out in 15 years.   Steve Trussell  23:58   Well, it's a 15 year. Yeah, it dies. You know, things change landscape, things like that. So yeah, you do. Those can be classed at 15 years.    Keith Weinhold  24:08   All right, we've talked about the cost in terms of dollars a bit for what a cost segregation study might cost. How much time does it take from the time one is initiated?   Steve Trussell  24:16   It depends. We could typically work with your schedule. I get a lot of last minute folks that get with me in September and they need their October 15, or even this September 15 depends on what kind of entry Do you have it in. And so we can turn these as quickly as you need it, typically, if I have all the data and all the information, especially if it's a residential where I'm not having to travel, but by and large, I can turn these in less than 30 days back to you, and if you need it sooner, we'll burn the midnight oil and get it done for you. That's during crutch time for between January 1 and April 15. If you file early or on time, if you file in October and you extend your taxes and the automatic extension in April, you've got to have the study done before you file. Your taxes. So if you wanted it for 2024 you need to have a study completed by April 15 of 2025 if you're going to file it April 15, if you're gonna file in October, the automatic extension, you need to have it completed by then. So our busy season is January through April 15, and then probably starting July, August time frame through October 15. That's our busy season. So the point of it, if you're going to do a study and use it for your current tax year, it must be completed no matter when you purchased it, but it must be completed prior to you filing your taxes, so you can use it on that tax return.   Keith Weinhold  25:35   All right, so we're just getting into Steve's busy season. So if you think this can benefit you. You want to initiate that sooner rather than later. But Steve, when we talk more about the benefits, we've had a change in presidential administration. So tell us more about the bonus depreciation benefit.   Steve Trussell  25:53   Your bonus appreciation came out in the previous administration before this last one, Trump's first administration that came out of that. So the anything where you reclass is five, seven and 15, your property, but it's 100% bonus. In other words, if you go back to the 131,000 I mentioned on the duplex, all of that in between September 2017 through December 31 to 2022 you get 100% of that. It's starting in January of 2023 through the end of december 23 it went to 80% and the next year, 60, and in 2025 it's going to be 40. But there's been an extension that was passed last in 2024 in the house to go back to the 100% installed in the Senate. And we think with the new administration, we'll probably in the new tax cuts, we'll probably see this reinstated and go back to the 100% which is substantial. If you're getting, you know, 60% of the 131, what is that? 78,000 bucks, roughly, something like that. And if you're getting 100% that's a big difference. So we're hopeful that we'll see that sometime in the first quarter. And so even if you file your taxes in April and it hasn't passed yet and you've only gotten four, you only get 40% bonus depreciation. You'll get that extra 60 the next year. What's happening now, though, before it, if it without being stated, you're still getting a bigger benefit. Because, as I mentioned before, the 131 comes forward, and you get the percentage of that the 302 is left over. In that example I used earlier, you've got your regular 27 net fear depreciation, but that 131 is still five and 15 year property, so you're depreciating that much faster than you would on a 27 after your schedule. So you're still getting a benefit, just not as good as when you get 100% bonus depreciation.   Keith Weinhold  27:34   Okay. And again, when you're talking about five, seven and 15 year property, you're talking about those component lifespans, correct, where we reclass that bonus depreciation benefit started out at 100% a few years ago. It's been stepping down 20% each year, and that is set to most likely refresh here sometime this year, back to the full 100% bonus depreciation. And if that does indeed happening you the listener. You're going to be hearing about that from your real estate investor friends and your social media feed and everything else, and you're going to maybe be feeling left out of that unless you get on top of it and take part of this. That's exactly what we're talking about doing right now. Steve, why don't you talk to us about some of those other components that are included or excluded from a cost segregation study, whether that's lighting fixtures or parking lot asphalt, tell us more.   Steve Trussell  28:27   Exterior is the 15 year life we talked about, the parking lots, the big residential the driveways, the landscaping, the fencing, retaining walls, bushes, the things that are gonna be outside. Okay, everything outside is 15 years pretty much, yes. And then when you go inside, look at the things that you would typically change out. You're not gonna change your plumbing. It's in your foundation and your walls, unless it breaks. You're not gonna change your roof. Is also, even though you change it out, it's also a permanent part of the structure. The roof is but the inside the house you have your or even outside, you've got your brick on the outside of your siding, that's 27 half for your property inside the cabinets, your countertops, flooring, your decorative light fixtures, the your plumbing fixtures, things like that, glass mirrors, things like that, that are going to be naturally shorter life. And it's pretty easy to look at a piece of property and see what's permanent again, like I use the example, the foundation, the studs in the wall, the brick, the she rock on the wall, those things are permanent fixtures. It's the things that are movable parts, typically, that you could look at, and that makes up 22 to 32% I've had to go higher, but 22 to 32 is a good range of the asset from five year and 15 year.   Keith Weinhold  29:42   All right, so really, the dividing line for Cost Segregation is stated as what is a permanent fixture and what is not permanent.    Steve Trussell  29:50   Yeah, probably in the general sense, yeah, I would say that. Well, are there any   Keith Weinhold  29:53   other things that one should know about a cost segregation study, whether that's myths or misunderstandings that need. To be cleared up, or just anything else at all. One needs to know about a cost segregation study. A couple   Speaker 3  30:05   things. One, the myth is that a lot of people think that it triggers audits that you're changing your accounting or you're getting this big bonus depreciation that's in the tax law, and so you're just taking advantage of the same zero to depreciation. Putting depreciation on your schedule, on your tax return, doesn't trigger audits. I mean, that's just buying property and you're putting it on the return. Accelerated depreciation doesn't either, because you do an engineered study. So part of the myth people think that they're going to call it, it's going to trigger an audit. It doesn't. It's a standard practice that accepted by the IRS and the study. The only thing that might, that might trigger isn't the agent. If they're doing an audit of your taxes, they might look at the study and say, Why did you classify this as this but this amount? Well, we go back through our data and our study through our software, and we could prove out how we came up with that value, and that's what they would ask. Is something like that, but it doesn't trigger an audit necessarily, just because you do a study. Second thing I've said this, I'll save all my clients. I said a couple times here, it's important that you can use it, that you can use the benefit. It does not do any good to go spend money for a study and get $131,000 appreciation, like I mentioned earlier, and it just sits there your w2 income, and you can't use it towards that that's far exceeds what you're making on your property. There's still a point in doing that until you can use it. There are other companies out there. They won't discuss that with you. They'll just tell you, you know, let's do a cost segregation study, because you get all these great benefits, but it doesn't do any good if you can't use it. Like I said that 131 be sitting on your depreciation schedule. That's bonus depreciation, but you're not able to do anything with it. If you're a high earner and you're not a real estate professional, you can't use it. So just be aware of that. If anybody brings a cost segregation study to you, and they don't discuss with you how it benefits you, I just be aware of that it's got to benefit you. What's the point if it doesn't    Keith Weinhold  31:57   that's a really great reminder you want to have this done the right way with someone that knows it can benefit you and more than offset the cost of the study. Maybe I should just bring up one example here of maybe a common turnkey property that a listener might buy that's not very high cost. Say that someone buys a fully rehabilitated, just $180,000 rental single family home built in the 1970s two bed, one bath. I'm sure there are some. It depends factors, but in general, would that be a candidate for a Cost Segregation if that were a new purchase for an investor?   Steve Trussell  32:35   I do it all the time, because it doesn't matter how old the property is. What matters is when you purchases. That's when your start date hits and or when you sell it to start date for the next person as well. So yeah, in that case, you're going to take roughly 15% for land. We go to the county website and see what they're using for land, and if they're using 6% that's what we'll use. But 15% is acceptable by the IRS. So in that case, 15% is what $27,000 so your 147 I think, would be your depreciable amount in it, 25% of that is 25 and almost $40,000 of depreciation versus an $1,800 study. And so if you're in a third step bracket, you're gonna save 12,000 in taxes and spend 1800 to save it. I mean, I would swap 1800 for 12,000 Gosh, any time. So, yeah, it would work. But then that comes down to, you know, you individually. What do you do for a living? What's your income? Like it would what level of income you're at. But can you use the 40,000 and celebrate depreciation? And that can be determined between a conversation with me, you and probably your CPA, so they know your tax situation the best, and then I really like the CPA to be involved. It's up to the client, but I'd prefer them to be involved so they know exactly what we're doing. Some CPAs aren't that familiar with it, so we can help them with getting this on the tax schedule. If they need us to on depreciation schedule, they really want the CPA to be involved if the client is comfortable with it because they know your tax situation the best. I can create the benefit for you. They can help you determine if you can use it.   Keith Weinhold  34:08   That's a good point. I would imagine that there are some tax preparers that have never seen this on one of their clients returns before, so that's a great help. And that was an awesome breakdown of just how things might actually look for someone. It just kind of has that most basic, low cost, 180k turnkey property. Steve, before I ask you if you have any last thoughts or anything else that the listeners should know if you want to connect with Steve, do that in the same way that you learn about our properties and our providers at GRE marketplace.com, click in the coaching area, your investment coach is going to help connect you with Steve all of his resources and adjacent resources that are helpful with you. Steve, is there any last thing that someone ought to know?   Speaker 3  34:50   I just think if you own property at all, it makes sense to get an estimate for cost segregation. It doesn't cost you anything. And then we could decide to. Together Again, like I said, along with your CPA, here's my benefit. Can I use it? And they cost you nothing to do that. Your CPA may charge you some time, I'm not sure, but working with me to get through the estimate phase up to the benefit, what's gonna look like for you that we do that for free, and so if you own any property, it makes sense to take a look at it or just have a phone conversation, because if you call me, you tell me, I make $300,000 a year. I'm a engineer, doctor, whatever it happens to be, and I work full time. My wife works full time. I'm probably gonna tell you, you know, you're probably not a candidate right now, because, like, we'd be a great benefit, but you can't use this great benefit right now. Let's revisit it when maybe you can. So it's just worth a phone conversation and you get me the data that I need, which is pretty simple stuff. I could put together an estimate before you turn it around and you decide, what if it makes sense for you?    Keith Weinhold  35:48   Yeah, if you have that conversation with Steve and worst case scenario, you can't use it, you better believe you're going to come off being pretty well informed in knowing the next time that you can use it, perhaps on your next purchase. Well, this has been supremely helpful, Steve. A lot of people are going to benefit from it. It's been great having you here on the show to talk about cost segregation.   Steve Trussell  36:09   I appreciate you having me. Thank you very much.   Keith Weinhold  36:17   Like Steve said, it's about 22 to 32% of the depreciable assets value, which is that house or building, not the land, can be deducted at an accelerated depreciation rate, faster than the 27 and a half year residential or 39 year Commercial depreciation rate. And Steve told me that before some investors even buy property, they will ask him how it would look with a cost segregation and hold on the numbers, and that way you can use it for your pro forma ROI calculation. Yeah, before you've even purchased a property, like I said, you can't have your Slack John uncle do a cost seg study. Plus your uncle is in slack jawed. Anyway. In fact, I'm the only slack jaw you've ever known. Now, I personally plan to send Steve a copy of my depreciation schedule so he can tell me how things would look for my properties. He can do this for you just the same. There is no charge. It's best to submit everything by mid March at the latest, if you file your taxes in mid April. So we are now in their busy season at GRE marketplace, that's where you do more than connect with our investment coaches and properties. There are also service providers, including Steve. Our coaches are there to help you optimize your ROI. This is a type of thing where if you think it's a good idea, you know you're probably not going to pick this up later if you don't move at the speed of instruction now. So if you think that it can benefit you from GRE marketplace.com, click in the coaching area. Get that set up, and we'll connect you to Steve and help you with anything else that you might need in your real estate portfolio. Until next week, I'm your host, Keith Weinhold, don't quit your Daydream.   Speaker 4  38:13   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  38:41   The preceding program was brought to you by your home for wealth, building, getricheducation.com.

Dr. Shannon Bernard and Michelle Luquette, representatives of On Track by 5 Alliance for the Lafayette Parish Public School System, join Discover Lafayette to discuss their department's mission to improve the quality and access of early care and education for children from birth to age 5 years of age. The research is clear: 90% of brain development occurs before age 5. Great work is being done to improve early childhood educational options for young people which is being funded through School Readiness Tax Credits and the generosity of Lafayette businesses. You can actually designate up to $5,000.00 of your state tax dollars that are owed each year to go to On Track by 5 Alliance, and then get a refundable tax credit of that same amount. How does this work? In January of 2008, Louisiana established a package of refundable state tax credits for businesses designed to support quality child care pursuant to LA R. S. 47:6107. A business is defined as any for-profit or not for-profit entity, which includes sole proprietors, partnerships, limited liability corporations, and corporations. Your CPA can help you file for this refund if you give them a heads up before filing your tax documents. See below for Michelle Luquette's contact information to ask questions on this detail. How to Claim the School Readiness Tax Credit for Businesses? To file the SRTC for businesses: a) Filing Individually: complete tax form IT-540; b) Filing as a corporation or franchise: complete tax form CIFT-620; c) Filing for non-profit organization: complete tax form CIFT - 620. These tax credits provide businesses with a dollar-for-dollar credit of up to $5000 for donations made to Child Care Resource and Referral agencies that are contracted by the Department of Education. On Track by 5 Alliance is such an agency and your contributions go directly to benefit children that live in Lafayette Parish. You can make this designation each and every year, get a tax refund, and know that your money is being dedicated to early childhood educational efforts for our must vulnerable and in-need young people. Pictures above were taken when Ochsner's Lafayette General adopted Campbell Academy Childcare Center. Ochsner's Lafayette General participates in the School Readiness Tax Credit as a non-profit, giving OTb5 $5000 contribution per entity in its health system and in return Ochsner's entities get their contribution back with the dollar-for-dollar refundable tax credit program. These dollars are invested directly into our publicly funded childcare centers and Campbell Academy was able to get a Frog Street Pre-K curriculum. OTb5's mission is to have all children in Lafayette Parish kindergarten ready! Paul Molbert said this is part of their "Healthy State" initiative as education is one of the key components of improving the healthcare status of our citizens. The School Readiness Tax Credit and ON TRACK programs here in Lafayette are so special because they serve learning centers and programs only in Lafayette Parish. Lafayette applied to be a Childcare Resource and Referral Agency just for Lafayette parish, so businesses know their dollars are staying in the parish and serving local centers when they designate . This tax credit not only boosts the economy by investing money back into the parish, but also ensures that children will become contributing members of society. In Lafayette Parish there are 58 publicly funded centers (meaning they accept childcare tax dollar assistance) and over 100 centers total which service over 6,000 children. Some publicly funded centers include Gifted Early Learning Center, Little Blessings, Little Miracles, and LA 4 (a public pre-school). In a typical school day, children are learning through play, such as dramatic play, sensory play, and manipulatives. Manipulatives are tools like string beads for counting and puzzles which develop the child's fine motor skills.

In this episode, we uncover the tax secrets that could save you thousands of dollars! Your CPA might be missing crucial deductions that can reduce your tax bill. We dive into real-life case studies to show you what to look for on your own tax return. Learn how one client saved $37,000 by making smart adjustments and another avoided losing $111,000 by fixing mistakes. Discover the importance of regular conversations with your CPA and how to ask the right questions. Don't miss these valuable tips to ensure you're not overpaying on your taxes!   Next Steps:

Josh: A seasoned multifamily real estate investor and the host of the Forever Passive Income Maverick Mastermind, Partnering, and Coaching Program and Accelerated Real Estate Investor Podcast. With decades of experience in the industry, Josh has successfully invested in numerous multifamily properties and has a deep understanding of the ins and outs of the market. Episode Summary:In this episode, Josh Cantwell discusses the importance of building a strong network of professionals in the real estate industry. He emphasizes the need to connect with commercial real estate brokers, CPAs, property management companies, contractors, and other key players in order to succeed in the business. Josh shares his own experiences and provides valuable insights on how to find and network with these professionals. He also highlights the significance of scale and the importance of raising capital to expand one's real estate portfolio. Key Takeaways:Building a network of real estate professionals, including brokers, CPAs, property management companies, and contractors, is crucial for success in the industry.Commercial real estate brokers are key players in finding deals and analyzing markets. Networking with them can provide valuable insights and opportunities.CPAs and accountants specializing in real estate accounting are essential for tax planning and managing finances in the industry.Property management companies play a vital role in managing properties, handling tenant issues, and providing valuable insights on market trends.Contractors are necessary for property renovations and maintenance. Finding reliable and skilled contractors is essential for successful real estate projects. Notable Quotes: "The real estate brokers all know each other. And you know what? In the commercial world, because there's a lot less deals and the deals are so much bigger. The real estate brokers all know each." - Josh Cantwell "Your CPA should do tax planning. So as you get into Q four right now, it's September. So when you get into October, your CPA better be calling you and suggesting that you have a year-end tax planning meeting." - Josh Cantwell "The property management companies are already aligned with the real estate attorneys that can do all the notices that can do all the evictions." - Josh Cantwell Resources: Apply for coaching here https://bit.ly/2N7ivRm Subscribe to our YouTube Channel: http://www.youtube.com/user/SRECvideo?sub_confirmation=1

In this Episode of the Secure Your Retirement Podcast, Radon, Murs, and Taylor discuss navigating tax withholding for retirees. When you retire, you have various sources of income, and you can choose to either withhold the tax on them, make estimated tax payments throughout the year, or do a combination of both.Listen in to learn about your tax withholding options regarding your social security benefits, pension income, and IRA distributions. You will also learn about sources of income not eligible for tax withholding, plus how to avoid tax penalties after selling a highly appreciated asset.In this episode, find out:● Understanding tax withholding and how it differs from estimated tax payments throughout the year. ● The options you have when it comes to tax withholding on your social security benefits.● The process available and information needed for tax withholding on your pension income.● Understanding the default and other tax withholding options available to IRA distributions.● Sources of income not eligible for tax withholding and the tax options available for them.● Pay attention to the next estimated tax due date when you sell a highly appreciated asset to avoid penalties.● All the information we need to know to advise you accordingly and avoid any tax surprises during tax season.Tweetable Quotes:● "Paying estimated taxes periodically demands foresight and a significant time commitment. Your CPA can assist you in projecting the quarterly payments necessary."- Taylor Wolverton● "Upon retiring, there may be several years of transition as you establish diverse income streams, with social security being merely one aspect of this process."- Taylor WolvertonResources:If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!To access the course, simply visit POMWealth.net/podcast.

Episode 541: Shaan Puri (https://twitter.com/ShaanVP) and Sam Parr (https://twitter.com/theSamParr) are on a campaign to make sure no entrepreneur pays more taxes than absolutely necessary. They're joined by Ankur Nagpal, the founder of Teachable and resident tax genius, to share the 10 tax loopholes every founder should know.  No more small boy spreadsheets, build your business on the free HubSpot CRM: https://mfmpod.link/hrd — Show Notes: (0:00) Intro (3:00) Biggest secret to pay less in taxes (6:20) QSBS - the most generous tax break available (15:30) Do NOT move to Puerto Rico (20:00) There's no true alpha in investing (25:00) Sam's credit card tax hack (29:00) Solo 401(k) (33:30) Your CPA is not is not your tax strategist (41:30) Owning real estate to lower your tax bill (43:00) 4 triggers to happiness (47:30) Putting the Indian diet on blast — Links: • Ankur Nagpal Twitter - https://twitter.com/ankurnagpal • Teachable - https://teachable.com/ • Carry - http://carrymoney.com/ • Mo Points - https://mopoints.com/ • Points.me - http://points.me — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth Check Out Shaan's Stuff: • Try Shepherd Out - https://www.supportshepherd.com/ • Shaan's Personal Assistant System - http://shaanpuri.com/remoteassistant • Power Writing Course - https://maven.com/generalist/writing • Small Boy Newsletter - https://smallboy.co/ • Daily Newsletter - https://www.shaanpuri.com/ Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. — Other episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto • #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

Episode 73 – Your CPA and Bookkeeper Need to Break Up In episode #73, I address how your early-stage accounting team transitions. I see this over and over and eventually, you need to specialize. - Tax CPA - Bookkeeper Subscribe to Ben's SaaS newsletter: https://mailchi.mp/df1db6bf8bca/the-saas-cfo-sign-up-landing-page SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben's SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.linkedin.com/in/benrmurray

Christmas in July? Well, not exactly, but now that we're in the middle of summer, we're going to start preparing for tax season! The more time we have, the more likely we are to get it all right. Making sure everything is checked off the list will result in the least amount of taxes owed as possible. Get it done by December 31st – Your CPA will love you. Alan and Brian talk about maximum contributions to accounts, Donor Advised Funds, RMDs, and more.   Hosts: Alan Holman, CFP®, Wealth Advisor Brian Wiley, Financial Advisor   The Real Money Pros: https://www.therealmoneypros.com   ————————————————————— SPONSORS:   Academy Mortgage: https://academymortgage.com/?lo=dave-perry&utm_source=podcast&utm_medium=description&utm_campaign=show_sponsor   Lively (HSAs and FSAs) https://livelyme.com/pro   Tree City Advisors of Apollon: https://www.treecityadvisors.com   Apollon Wealth Management: https://apollonwealthmanagement.com/   Advisor Insurance Solutions: https://advisorinsurancesolutions.com/ —————————————————————

Are you looking to increase your financial freedom and build greater wealth? Your CPA can be a valuable resource in achieving these goals. In this video, we'll provide you with 5 key questions to ask your CPA that could lead to greater financial gains. CPAs are not just number-crunchers; they possess a wealth of data and strategies that can help you optimize your finances. By meeting with your CPA over coffee, lunch, or dinner, you can learn how to reduce your taxes, structure your business to pay less taxes, increase cash flow, and more. By asking the right questions, you can unlock valuable insights and strategies that will help you achieve your financial goals. Don't be afraid to tap into your CPA's expertise and experience to maximize your financial potential. Take action today by scheduling a meeting with your CPA and asking these game-changing questions. And don't forget to subscribe to our channel for more valuable financial advice and tips.

Looking for the perfect CPA for your nurse practitioner practice? This episode of the NP Business Matters podcast gives you tips and advice on finding the right professional to help you navigate the complex financial landscape of your practice, from choosing the right business structure to ensuring your taxes are filed correctly. Learn what to consider when selecting a CPA, including their experience working with medical practices, certifications, references, fees, and more. Discover what questions to ask during your initial consultation to determine if the CPA is a good fit for your needs, and how to make sure your financial information is secure. Your CPA is your partner in the financial health of your practice, so take the time to find the perfect fit.https://NPBusiness.org/70

Every day you are waking up and chaos seems to reign. Material delays. Pricing volatility. Subcontractors and vendors not pulling their weight. The labor pool seems to be vanishing, and recession is on our doorstep. Those aren't the greatest challenges, though.  We know what the greatest challenge is.  All of these elements are leading you to question whether or not you are even in the right business because as much as you try to be present at your daughter's softball game, or your son's soccer match, or simply focusing around the dinner table… you aren't present because the chaos is consuming you. You wonder, “how can I keep going if all I am doing is robbing Peter to pay Paul?” “How can I have plenty of work, but not plenty of cash?” “Why do those other contractors seem like they're crushing it while I'm wasting away, just trying to keep up.” Some of you, like TJ, have asked, “what happens to my business if something happens to me?” The professional chaos is taking a toll on your personal life.   That stops today. Most business owners are convinced they are not generating enough revenue.  In reality, that is usually not true… the cause of their cause stems not from the volume of revenue generated, but instead from the amount of that revenue that is retained and kept… the proverbial back door of profit is WIDE OPEN! Most career contractors do not have a revenue problem, although growth in revenue can be valuable.  Most career contractors have a numbers problem… in other words, you don't know your numbers day to day so your expenses creep up and up while revenue fluctuates up and down… and profit drips out.   We live from big receivable to big receivable, living life like a real-life roller coaster complete all the while feeling sick and green.  There are at least 3 techniques you can deploy to improve profits and margins.  The first technique to controlling your costs and knowing your numbers is to subdivide your bank accounts. When we first met Steve, he was running an $7mm custom homebuilding company in a prestigious market in California.   In the first week of 2020, he had $64,889.85…$65k to run $7mm worth of projects during a year where his local municipality would eventually shut down construction for 6 weeks due to COVID protocol. That same year, his volume contracted from $8mm to $7mm.  In other words, he would LOSE revenue in 2020, would LOSE six weeks worth of billing in 2020, and to make matters worse, of the $65k he had in his accounts… he only really had access to $32,720.14… the rest of it was already scheduled to be spent on subs, materials, and other payables. Steve was going into an already uphill year of 2020 armed with a water pistol and a kit kat bar for nourishment.  Needless to say, Steve was freaked. But one thing Steve now knew, that many of you don't, and it's leading to the chaos you feel. Steve KNEW how much he had available to pay his taxes, to pay his subs, to pay his team, and to pay himself. Most of you are looking at the money…and you are missing the true story…STEVE KNEW because Steve had a system. Steve made one decision, and this decision is spelled out beautifully in Mike Michalowicz's important book Profit First For Contractors.   In short, when a dollar comes into your business, immediately subdivide it so you know exactly where that dollar has to go…starting with yourself. There are four barriers you must overcome before you make this shift, and yet the shift will be SO worth it. The barriers are… Your own mindset Your bank who wants to charge you for multiple accounts  Your bookkeeper who is scrunching their nose saying, “this is too many transactions!!” Your CPA who is constantly lecturing you as to you how you can just do this and track it on a spreadsheet Ok… let's for a moment suspend our disbelief, and instead embrace the idea of subdividing bank accounts. Remember, not knowing your numbers is causing frustration and distance with those you love…so let's do something different.  The second technique to controlling your costs and knowing your numbers is to create a simple dashboard that tracks your cash each week. Steve said, “but my online bank statement tells me how much money I have in each account, and Quickbooks tells me how much I'm owed.” Yes, technically you are correct Steve…BUT… In order to understand your profit and your margins we need a means of tracking those numbers looooooong term.  It's nice to know your cash, or receivables, or payables, or Cost Of Goods on any given week…but it's even BETTER to know those each week over months and years where you can watch trends. We feel the same about the weather, that is why forecasters constantly tell us where today's weather compares with weather from the previous week, month, year, decade, and century…it gives context and helps us make decisions.  The Level Two Dashboard is a tool we have built and installed in hundreds of businesses around the world from Architects to Remodelers, to Plumbers, to Lawyers.  The truth is, a dollar is not a dollar…that dollar must be artificially subdivided so we know which part of that dollar is ours and which is not.  Steve trains Mindy on how to take 5 minutes each week and update the Level Two Dashboard, and each week the entire team knows… How much cash is available, to the penny, for profit, owner's compensation, quarterly tax liability, operating expenses, and all cost of goods sold. How much is needed to be paid out over the next 30 days. How much available cash the business has IF all payables were paid today. How much would be left if we grabbed our available cash (IN), grabbed our receivables (IN), paid our taxes (OUT), and paid our payables (OUT)...we call it an “All In/All Out” number. So far we've asked Steve to do two things; a) subdivide his bank accounts so that each dollar goes where it needs to and doesn't leak out, and b) track all of his cash, and any cash you owe or are owed. After following this for about 6 months Steve comes back and says this, “this is voodoo…How is that I generated less money than last year, but have more money? Simple…he made each dollar accountable to its destination.  The third technique is to KNOW your pricing and margin.  Most of you are guessing when you are pricing because there is no repetitive process to your pricing…it is as if you are re-creating your pricing wheel everytime and it is usually dependent on the amount of desperation you feel in the moment. We must stop guessing, and start KNOWING.   Remember this…pricing should always be based on VALUE.   Here is the same question asked two different ways… How much is this project going to cost? (money based question) How much would you pay if this project were done for you? (VALUE based question) There are two primary filters to run EVERY price through. First is your own pricing calculator.  Where is that tool in your estimating and bidding arsenal where you can plug consistent numbers in and get consistent numbers out based on PREDETERMINED percentages that are healthy and profitable? The second filter to run your pricing through is the filter of VALUE! Once you have a final number from your objective calculator, then take that number and run it through a subjective VALUE thought, “is it worth X to the client for this project to be completed in this amount of time?” One other thing Steve did when he put those money processes in place…he began predictably pricing jobs EVEN in the midst of price increases, and material delays. Three ways. He communicated the volatility to clients UP FRONT and throughout. Steve then RELENTLESSLY followed every dollar that funneled in and out of the job through a simple job costing spreadsheet.  Finally, he understood the difference between markup and margin.   Margin is what is leftover AFTER cost of goods and materials are removed from revenue.  That is NOT markup. When you markup is how much you increase a price to determine its final selling price so you can make a healthy margin.   When it comes to pricing, understand your markup, and you will earn a healthy margin. When you have a healthy margin, NOW you have options.   Three techniques that all require time and attention. First, subdivide your bank accounts. Second, create a simple, tracking dashboard. Third, price for value and not for time through predictable communication, giving a home to every dollar, and predetermining a healthy markup to provide a freedom-giving margin. 

Every day you are waking up and chaos seems to reign. Material delays. Pricing volatility. Subcontractors and vendors not pulling their weight. The labor pool seems to be vanishing, and recession is on our doorstep. Those aren't the greatest challenges though. We know what the greatest challenge is. All of these elements are leading you to question whether or not you are even in the right business because as much as you try to be present at your daughters softball game, or your son's soccer match, or simply focusing around the dinner table…you aren't present because the chaos is consuming you. You wonder, “how can I keep going if all I am doing is robbing Peter to pay Paul?” “How can I have plenty of work, but not plenty of cash?” “Why do those other contractors seem like they're crushing it while I'm wasting away, just trying to keep up.” Some of you, like TJ, have asked, “what happens to my business if something happens to me?” The professional chaos is taking a toll on your personal life.   That stops today. Most business owners are convinced they are not generating enough revenue. In reality, that is usually not true…the cause of their cause stems not from the volume of revenue generated, but instead from the amount of that revenue that is retained and kept…the proverbial back door of profit is WIDE OPEN! Most career contractors do not have a revenue problem, although growth in revenue can be valuable. Most career contractors have a numbers problem…in other words, you don't know your numbers day to day so your expenses creep up and up while revenue fluctuates up and down…and profit drips out. We live from big receivable to big receivable, living life like a real life roller coaster complete all the while feeling sick and green. There are at least 3 techniques you can deploy to improve profits and margins. The first technique to controlling your costs and knowing your numbers is to subdivide your bank accounts. When we first met Steve, he was running an $7mm custom homebuilding company in a prestigious market in California. The first week of 2020, he had $64,889.85…$65k to run $7mm worth of projects during a year where his local municipality would eventually shut down construction for 6 weeks due to COVID protocol. That same year, his volume contracted from $8mm to $7mm. In other words, he would LOSE revenue in 2020, would LOSE six weeks worth of billing in 2020, and to make matters worse, of the $65k he had in his accounts…he only really had access to $32,720.14…the rest of it was already scheduled to be spent on subs, materials, and other payables. Steve was going into an already uphill year of 2020 armed with a water pistol and a kit kat bar for nourishment. Needless to say, Steve was freaked. But one thing Steve now knew, that many of you don't, and it's leading to the chaos you feel. Steve KNEW how much he had available to pay his taxes, to pay his subs, to pay his team, and to pay himself. Most of you are looking at the money…and you are missing the true story…STEVE KNEW because Steve had a system. Steve made one decision, and this decision is spelled out beautifully in Mike Michalowicz's important book Profit First For Contractors. In short, when a dollar comes into your business, immediately subdivide it so you know exactly where that dollar has to go…starting with yourself. There are four barriers you must overcome before you make this shift, and yet the shift will be SO worth it. The barriers are… Your own mindset Your bank who wants to charge you for multiple accounts  Your bookkeeper who is scrunching their nose saying, “this is too many transactions!!” Your CPA who is constantly lecturing you as to you how you can just do this and track it on a spreadsheet Ok…let's for a moment suspend our disbelief, and instead embrace the idea of subdividing bank accounts. Remember, not knowing your numbers is causing frustration and distance with those you love…so let's do something different. The second technique to controlling your costs and knowing your numbers is to create a simple dashboard that tracks your cash each week. Steve said, “but my online bank statement tells me how much money I have in each account, and Quickbooks tells me how much I'm owed.” Yes, technically you are correct Steve…BUT… In order to understand your profit and your margins we need a means of tracking those numbers looooooong term. It's nice to know your cash, or receivables, or payables, or Cost Of Goods on any given week…but it's even BETTER to know those each week over months and years where you can watch trends. We feel the same about the weather, that is why forecasters constantly tell us where today's weather compares with weather from the previous week, month, year, decade, and century…it gives context and helps us make decisions. The Level Two Dashboard is a tool we have built and installed in hundreds of businesses around the world from Architects to Remodelers, to Plumbers, to Lawyers. The truth is, a dollar is not a dollar…that dollar must be artificially subdivided so we know which part of that dollar is ours and which is not. Steve trains Mindy on how to take 5 minutes each week and update the Level Two Dashboard, and each week the entire team knows… How much cash is available, to the penny, for profit, owner's compensation, quarterly tax liability, operating expenses, and all cost of goods sold. How much is needed to be paid out over the next 30 days. How much available cash the business has IF all payables were paid today. How much would be left if we grabbed our available cash (IN), grabbed our receivables (IN), paid our taxes (OUT), and paid our payables (OUT)...we call it an “All In/All Out” number. So far we've asked Steve to do two things; a) subdivide his bank accounts so that each dollar goes where it needs to and doesn't leak out, and b) track all of his cash, and any cash you owe or are owed. After following this for about 6 months Steve comes back and says this, “this is voodoo…How is that I generated less money than last year, but have more money? Simple…he made each dollar accountable to its destination. The third technique is to KNOW your pricing and margin. Most of you are guessing when you are pricing because there is no repetitive process to your pricing…it is as if you are re-creating your pricing wheel everytime and it is usually dependent on the amount of desperation you feel in the moment. We must stop guessing, and start KNOWING. Remember this…pricing should always be based on VALUE. Here is the same question asked two different ways… How much is this project going to cost? (money based question) How much would you pay if this project were done for you? (VALUE based question) There are two primary filters to run EVERY price through. First is your own pricing calculator. Where is that tool in your estimating and bidding arsenal where you can plug consistent numbers in and get consistent numbers out based on PREDETERMINED percentages that are healthy and profitable? The second filter to run your pricing through is the filter of VALUE! Once you have a final number from your objective calculator, then take that number and run it through a subjective VALUE thought, “is it worth X to the client for this project to be completed in this amount of time?” One other thing Steve did when he put those money processes in place…he began predictably pricing jobs EVEN in the midst of price increases, and material delays. Three ways. He communicated the volatility to clients UP FRONT and throughout. Steve then RELENTLESSLY followed every dollar that funneled in and out of the job through a simple job costing spreadsheet. Finally, he understood the difference between markup and margin. Margin is what is leftover AFTER cost of goods and materials are removed from revenue.  That is NOT markup. When you markup is how much you increase a price to determine its final selling price so you can make a healthy margin. When it comes to pricing, understand your markup, and you will earn a healthy margin. When you have a healthy margin, NOW you have options. Three techniques that all require time and attention. First, subdivide your bank accounts. Second, create a simple, tracking dashboard. Third, price for value and not for time through predictable communication, giving a home to every dollar, and predetermining a healthy markup to provide a freedom-giving margin.

In this episode:  The IRS will start using voicebots for incoming calls regarding collections with plans to expand its usage.  New Overtime Rules will potentially be released this fall. If cryptocurrency is being used it triggers a taxable event.  The IRS is cracking down on these transactions. We review new policy proposals from the Biden Administration.  Now is the time to organize your tax records and QuickBook files.  Your CPA will be able to help you with tax planning.  There's not much that can be done to reduce tax liability in February-April.  We also hear the story of James Duncan and his partner Hendrix Montecastro who convinced investors to invest in their real estate investment Ponzi scheme, leaving many of them in extreme debt and worse. 

Are you managing money in your wholesale business? Are you keeping track of your KPI's correctly? Well today, Chris Arnold has special guest Larry White to discuss the money side of wholesaling. Larry has some great tactics that will help you be more effective in terms of money management.   Key Takeaways CPA bookkeepers handle the numbers so your business can run efficiently. Cash is oxygen for your business. Keep 3 to 6 months of cash available for your business. Breakdown of how your business revenue should be used to cover marketing, payroll, etc. The major KPI you need to focus on and why they're important. Your CPA will help you plan for success.

SET UP YOUR BUSINESS PROPERLY EP 65 - Today's episode is one of several episodes about how to get started in business. Some of you might be working for someone now and thinking about going off on your own and some of you might just be entering the industry and doing so as an independent. If you are in either of these two categories or if you are someone that works with agents that are working independently, this episode is for you.  I started in this industry on the property and casualty side and quickly moved into commercial insurance when I started. Working with my dad, his personal lines clients were all starting their own businesses and they came to him for advice. We basically learned as we went along what we needed to do to help them. Fast forward 30 plus years, I've had many years of educating business owners about getting started. When I first started in sales, I got involved in teaching insurance to a local SCORE chapter. If you aren't familiar with SCORE, it's called Service Corp of Retired Executives. It's a division of SBA, the small business administration which is a wealth of information for business owners, new and experienced. If you aren't familiar with them, go to sba.gov to learn more. In this particular SCORE chapter, they did a 3 hour program for new business owners. The first hour was on accounting with a local CPA, the second hour was was legal, taught by a business attorney and the third hour was insurance, taught by yours truly!  The legal was mostly entity structures and contracts.  Since I went last, I always heard the lawyer's presentation which is how I learned so much! Fast forward 20 years, I started volunteering with the Maryland Women's Business Center and taught a class called The ABC's of Starting a Business. This class was 4 hours and went over why businesses fail, entity structures and then the next steps to get started in business.  I taught this program for over 5 years. It was my ‘give back' to the business community. I believe I educated over 500 new business owners in this program. The Women's Business Center is also a division of SBA, like SCORE, so we have to work within their guidelines.   Today I'm sharing a segment of that class, on entity structures. I see so many agents asking about them in the different groups I'm in and I want to clarify things about these entity structures that is essential to understand, especially if you are thinking about going the DIY route. I don't recommend DIYing this important segment of starting your business, but some people just want to save a few dollars and don't care about the rest.  Before getting started, my advice to people is to always talk to both your CPA and your attorney.  Why? - Your situation is different than mine as is your risk tolerance. I can't tell you what is right for you because I don't know your situation. So when you take advice from someone in a FB group or a stranger, you are creating potential problems for yourself! Your CPA can guide you better from a tax perspective. Understanding if it makes sense financially to set up one of these entities and getting guidance on how to do it properly from a tax perspective. Make sure your CPA has experience dealing with business owners as well. Some CPAs just do taxes or audits and aren't up on all the issues relating to business owners. You attorney will guide you from a legal perspective. Understanding the risks involved and how to create the proper documents, how to sign your contracts, how to handle multi states. All of these are essential if you are going to be in business for yourself. Make sure your attorney is a business attorney, not a criminal, divorce or personal injury attorney. Just like with the CPA, you want an attorney that focuses on working with business owners because they are usually more on top of the current laws around business owners and doing things properly. When I started in the business back in the 70's we basically had 3 different entity structures to choose from. You were a sole proprietor, partnership or corporation. In the mid 80's the LLC entity structure was beginning to emerge and it really began to pick up speed in the 90's. Now an LLC common place. There are some variations of different entity structures like a PLLC or an L3C or a B corporation. So, knowing which entity structure is right for you depends. For today, I'm only going to focus on the sole proprietor, LLC and corporation.  Let's start with sole proprietor - this is basically you the individual operating as a business owner. It's your name trading as (T/A) or doing business as (DBA) your insurance agency. My first insurance agency was Debbie DeChambeau t/a The DLD Group. I was a sole proprietor when I set up my first agency in 1990.  Being a sole proprietor allows you to deduct your business expenses at tax time, but it does not provide any person legal protection.  You'll get some protection from your general liability or your professional liability policies, but if you lose your case, you could also lose your house and all of your assets, depending on the court ruling. You'll want to check with your state, but most states require you to complete a form with the state that you have created your business and you'll want to get a tax ID number in the name of that business. Once you've done those two, then you go to the bank and open a business account and have all of your business income deposited into that account. You can have it deposited into your personal bank account, but that means you are mixing funds which can become an accounting problem, so it's best to keep them separate and pay yourself when you need to. Again, your accountant can guide you through this better but these are the basics. If you decide to create a corporation, also known as the letters INC, then you are basically setting up a separate entity. I like to think of it as another person, and that's the business. When set up and managed correctly, a corporation protects the personal assets of the stockholders, president, VP, etc, which is usually you, the business owner. When setting up a corporation, you create articles of incorporation, establish bylaws, appoint directors, have a shareholders agreement. These documents must be set up according to the laws of your state and include the right information about your business. When it comes to taxes, the corporation files it's own taxes then the stockholders use that information on their individual taxes. This has long been a complaint of corporations, having to do the business return, then do the individual return. It's where the term, ‘double taxation' is often used. You might have heard the term, don't pierce the corporate veil. This is a test if there is a lawsuit that would protect the stockholders and officers personally. It's essential that everything is done correctly for that protection to prevail.  If you are in the commercial / business side of insurance industry, this is something you probably know well., Those of you in other areas of insurance, might have heard this in passing but never really understood it. If you are going ot be in business this is the one of the most important pieces you should understand By everything I'm referring to contracts, agreements, processes, etc. This is where your attorney can fill you in better, but bottom line, if you are going through the expense of setting up a corporation then it's important to do everything correctly. Before I talk about a limited liability company, let's hear from our sponsor: This episode of the business of  insurance podcast is brought to you by insurancemailbox power.com Part of being a business owner is implementing systems and processes that can be automated as much as possible. Let's talk about onboarding new employees or team members, especially since we are talking about entity structures today.  In an era when a lot of business owners are struggling to find staff, how do you make a new employee feel welcome, make them glad they decided to work with you? Everyone wants to be recognized, so lets talk about how you could go above and beyond to make your employees really glad they are part of your organization.   Let's start with day one - what if you have a coffee mug with their name on it, a box with brownies and popcorn to get them through the first week.  Maybe week 3 you send the employee a water bottle with their name on it and a card letting them know that you are glad to have them on board.  From there, you could set up a system that something is mailed to your employee every month or every other month. Maybe you send a gift card, maybe you send a phone holder, coasters or or a personalized notebook  When you have an account with insurancemailboxpower.com you can set this up and let it run for as long as you want to delight your employees. If you want to learn more, go to insurancemailboxpower.com. Be sure to indicate Debbie DeChambeau sent you. When you sign up for a pro or executive account, I'll share some of my designs with you that have been generating results for me! Now, let's talk about LLC's An LLC is a limited liability company. Many people want to call it a corporation, but technically, it isn't.  As I mentioned earlier, there were very few LLC's prior to the mid 80's. When they were first created, many businesses were hesitant to set them up because the corporate veil hadn't been tested. Business owners were concerned if an LLC  would really protect them like a corporation. In the 90's more and more states allowed them and now they are fairly common place.  An LLC designed to provide the legal protections like a corporation but the tax structure is different with an LLC, it's similar to a sole proprietor.  An LLC can elect to be taxed as a sole proprietor, partnership, S corporation or C corporation. This is one of the reasons a lot of companies are attracted to the LLC. It's also why it is essential to talk to your CPA about this. Some people think an S Corporation is an entity structure….it's a type of tax filing! An LLC should have an operating agreement which states how the business is conducted and how management and ownership is structured.  Not all states allow single member LLC's so it's important to understand the rules in your state and the states that you operate in. It's also important to understand how to run and manage your LLC, not just from an accounting perspective but from a legal perspective. If you aren't looking to protect your personal assets, then consider being an LLC. This is a good reason to work with a business attorney and not DIY it! Understanding that most people set up an LLC or Corporation to protect their assets is one thing, but why go through the work of setting up the business if you don't do it properly. Basically, you'll have wasted a lot of time and money. So do it properly and protect yourself the right way. Work with an attorney and and accountant and understand your obligations and responsibilities with the entity structure you select. A lot of people starting out just set themselves up as a sole proprietorship. It's less expensive. It's when the business owner has assets to protect, having the proper entity structure is essential and managing that entity is imperative. I want to reiterate that I am not an attorney or an accountant. This information is intended to give you an overview of your options. To learn more, go to sba.gov for the best information, then seek out a business attorney and CPA for local guidance.  It's your business. Run it like a business, not a hobby. Do it right! Until next time, keep creating opportunities. ….and support our sponsor! CHECK OUT OUR SPONSOR: insurancemailboxpower.com This is a mailing service I've been using for over a year now and I love them.  I send all of my birthday cards, thank you cards and marketing post cards from this platform.  Check out Insurancemailboxpower.com and see how you can stay top of mind with your clients and referral partners. Tell them Debbie DeChambeau sent you! ABOUT THE HOST This episode of the Business of Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an entrepreneur, business advisor, insurance professional  and content creator. Her goal is to inspire you to think differently and explore ideas that disrupt the status quo.  Debbie has an extensive business and marketing background with a focus of helping insurance professionals be more successful.  She is the co-author of Renewable Referrals and produces two other podcasts, Divorce Exposed and Seniors We Love.  Connect with Debbie on LinkedIn, Twitter or Instagram.  

In today's episode, though I'm not a financial expert, I'm sharing my own insight into how to recession-proof your own income as the CEO of your small business, and why you need to make it a priority sooner rather than later. I've seen so many business owners over the years, investing in our programs, and fully committed to their success and growth, and struggling to pay themselves a decent income. I'm embarrassed to admit that I didn't pay myself as the owner of my dance studios for the first five years. Do not make this mistake. As the owner and CEO, you both need and deserve to experience financial security. Three key points I want you to take away from this episode: Simply start somewhere – commit to a designated amount that will be your salary. Do not let it be dependent upon the weekly or monthly business revenue. Make that amount non-negotiable. You can always change it in the future. Educate yourself on the options – The book Profit First was a game-changer for me. I highly recommend reading this and getting familiar with the ways in which this method will benefit your business and you as the CEO. Why this matters – your business and your family deserve financial security. It may not come naturally to prioritize your own income but it's really important. Your CPA or financial advisor can help you determine what works best for you. This content was featured in a recent Forbes article that you can find HERE. As I mentioned, this is not my area of expertise, but I've seen so many business owners struggling with this, I felt it's important to share what I know and recommend. Did you love today's episode? 1. Take a screenshot and share it to your IG stories. Tag me @stacytuschl! 2. Leave us a rating and review on Apple Podcasts! _______________ Ways to work with Stacy: WELL-OILED OPERATIONS: Learn how to remove yourself as the bottleneck of your successful growth and build a business that can run without you! www.welloiledoperations.com/register MASTERMIND: Check out the 4 inevitable stages of what it takes to become a powerhouse and successfully have your business work for you. Watch the FREE training here: https://stacytuschl.com/insider

My guest today is Joe Valley from Quiet Light Brokerage, who has had his hand in buying and selling—get this—over a billion dollars of businesses online. He's the author of The EXITpreneur's Playbook, and he joins me on this episode to discuss his journey with building up, buying, and selling businesses and how you can best set up and maintain your business so that when you're ready to exit, it's a very streamlined process. We start the episode with some info about the tradeshow experiences and workshops we've got coming up before diving into Joe's background as an entrepreneur, from his childhood business selling nightcrawlers to selling his last e-commerce business and joining Quiet Light. Then I ask Joe to explain how to begin thinking about whether your business is sellable, and he discusses the importance of setting goals for what you want out of selling your business and reverse engineering a path to those goals. He also talks us through The Four Pillars of Value, markers that potential buyers look at to figure out the value of your business, which will dramatically influence the offers you receive. We then turn to some more technical details of selling a business, with Joe explaining how to deal with discretionary earnings, the different types of buyers (including aggregators and private equity firms), and the benefits of setting SOPs. He also goes through some of the dirty tricks aggregators can pull and advises that having a trustworthy broker in place can help you avoid these and have a smoother exit. Then we wind things up by talking about the emotion involved in selling a business and how going through an honest and understanding broker like Quiet Light can help manage those emotions and expectations. And last but definitely not least, Joe shares how you can get your hands on a FREE digital copy of The EXITpreneur's Playbook. You can chat more about how to successfully manage your FBA business with the Amazon Files and Mommy Income community by joining our Facebook group with today's codeword EXIT, where you can learn more about bundling, ask questions, and participate in the conversation with other sellers. And if you're ready to take your business to a whole new level, visit MommyIncome.com/Coach to schedule your one-on-one coaching call today. This week on the Amazon Files: There are a few spots left in the tradeshow experience we have coming up in Grand Rapids Joe's first entrepreneurial experience How Joe broke into and got out of the e-commerce world Knowing your business is sellable and setting goals for the future The Four Pillars of Value in today's FBA business world Built-in paths to growth Risks for buyers Owner-operators and discretionary earnings The difference between aggregators, private equity firms, and private individuals as buyers The benefits of setting up SOPs The dirty tricks aggregators play and using brokers to avoid them Add-backs and the mistakes people make without representation The emotion of selling a business Quiet Light and honesty about the salability of a business Joe's book The EXITpreneur's Playbook and how to get your FREE digital copy “Always have your exit in mind because you just never know what's going to happen.” - Kristin Ostrander Quotes: “I've got a question for you. Are you selling wholesale? Have you had issues with wholesale? Are you scared? Are you nervous? Do you not know what the heck you're doing wholesale? If you answered 'yes' to any of those questions, I would love to help you navigate wholesale.” “This is where you want to be able to continually set up and maintain your business so that if and when you decide to exit, it can be a slam dunk for you.” “Came out of that five-year stretch, tired and worn out, woke up one day and said, 'I wonder if I can sell this thing?' Didn't plan it, necessarily, just woke up and needed to move on as an entrepreneur as we often do.” “Now we've got a team of fifteen advisors, about ten support staff, we closed just under $250 million in total transactions in 2020, all online business transactions.” “As entrepreneurs, we seem to have short attention spans, whether that's three years, five years, ten years. We're always wanting to pivot and change.” “Every business is sellable. It's just a matter of what it's worth to the buyer and what it's worth for you to go through that sale process.” “I mentioned documentation. If you want to reverse engineer the path to your goal, you have to figure out the value of your businesses today. If you do not have profit and loss statements with a monthly view, you're not even going to get out of the gate.” “Your CPA is a tax-mitigation specialist, and they file your tax returns. Don't let them be your bookkeeper, too, because they will just screw it up.” “Growth, they love to see growth trends and built-in paths to growth.” “When it comes to pure risk, the larger, more established businesses are less risky than the younger, smaller, less-established businesses.” “Risk, growth, transferability, and documentation is what buyers look at.” “The more they trust and like you and believe in you and what you've built, the better deal structure and the higher value of the company. So that's one reason to set up SOPs. The other is if you get hit by a bus, your spouse can take over or your employee fairly quickly. Or, you know, if you just want to go on vacation and not be bothered by anybody, not check email, SOPs are great.” “The aggregators are well-educated, charming, likable, they'll heap lots of praise on the brand that you've built in your business and say that they'll buy your business for all cash and close in thirty days and then they'll slide in there, ‘Avoid the broker fee.' If it sounds too good to be true, it probably is.” “The advisor is somebody that should be in the middle, helping you first understand the value of what you have, what levers to push and pull to increase the value of that. And then eventually, when you're ready, exit it for maximum value.” “We consider ourselves an education firm, first and foremost. And then we happen to do M&A deals as well.” “You need to be able to feel really comfortable about handing your baby off to someone else who's going to be able to take care of it. Regardless of the check that they wrote you, you still want to be able to feel comfortable and confident that what you've built isn't just being, you know, tossed to the wayside.” “These are very emotional processes. You're a week, two weeks away from life-changing money for the baby that you built, and you know, you need somebody on your side that's going to support you and help you through that process.” “If it's a situation where it's not sellable in its current environment or current state, we'll tell them why. And if it's a situation where it's a great business, but it's not sellable by us, then we'll tell them why.” “Let's be real, we all don't want to work for the rest of our lives forever, all the time. Retirement, whether it's at fifty or seventy or thirty-two, you want to be able to have a plan and be prepared, and this is the best way to get that done.” Related Content: 2022 Workshops - Coupon code: workshop50 Wholesale Bundle System Email questions Learn With Us Coaching The Amazon Files Hub Quiet Light homepage The EXITpreneur's Playbook on Amazon Get your FREE digital copy of The EXITpreneur's Playbook Grow Your Amazon Business! Thanks for tuning into this week's episode of The Amazon Files, the show to help Amazon sellers along their business journey one step at a time with Amazon expert and your host, Kristin Ostrander. If you enjoyed this episode, head over to Apple Podcasts, subscribe to the show, and leave us your honest review. Don't forget to share your favorite episodes with your friends on social media! Use the codeword EXIT to join us on Facebook. Each week, Kristin hosts a live discussion on how to grow your Amazon business. Don't forget to check out our website and subscribe to our mailing list for even more resources.

Congress is set to pass a large spending bill before the end of the year that will increase the tax bills of many. Tax planning is something every athlete deserves incorporated into their financial advice, yet few are actually getting.  An advisor that is making recommendations without looking at the tax impact is costing you money every single year. This is unnecessary wasted wealth that you can never get back. Tax planning is easily the most missed opportunity and it's up to clients to demand it.Tax loss harvesting, backdoor Roth conversions, avoiding unnecessary capital gains, accelerating, or deferring income, asset location, individual 401ks, and duty days are just some of the menus of options when it comes to managing your tax bill. If you ignore tax planning, you are choosing to pay unnecessary taxes. EPISODE HIGHLIGHTS:(0:51) News: Rivian went public at a targeted $54 billion valuation but due to strong demand debuted at a $91 billion valuation.(1:17) Pfizer has created an antiviral pill that reduces the risk of hospitalization from COVID and is pending FDA approval. (2:00) Economic data for the economy is slowing and Congress is debating Biden's Build Back Better Plan that will increase taxes and is an increase of around $2 billion in spending.(3:55) Backdoor Roth contributions have been talked about being eliminated. This has been a great tax planning strategy over the last decade for those that took advantage.(5:17) Tax planning and investments should go hand in hand. Wall Street brokers cannot legally give tax advice. (6:05) Tax loss harvesting and how it benefits the client. (7:30) Systematic planning over the long-term adds up to significant tax savings and large account balances.(8:28) Understanding tax planning when gifting can increase the impact for the charity and save taxes for the client.(9:00) Goldman Sachs gives zero thought to tax planning. Unnecessarily realizes gains to the detriment of the client. (9:45) Separation of duties doesn't work in the real world. Your CPA isn't checking the work of your investment advisor. Find an auditor if you want to catch fraud. (10:54) Chase Carlson and other fraud attorneys evaluate if you are being taken advantage of.(11:34) The wealthiest families have a multi-family office that integrates tax strategies and investments. (12:18) Even if you're not ultra-wealthy, an independent RIA that integrates tax planning will be to your benefit. 

Join the discussion on Facebook!TranscriptJonathan VanHorn:Hey everybody, Jonathan checking in here. And just so you know, this is a two-part episode. This is the second part of the episode. So if you've not listened to the first part yet, you want to go back and listen to it in the prior ways. We should have it labeled on the episode title, what part one is and part two is. So you should be able to listen to that in the ... See that in the title of the episode, what episode of episode it is. So thanks.Jonathan VanHorn:Welcome to the Tooth and Coin Podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones. Some of them are very specific, but we hope that these episodes help you along with your journey. Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan VanHorn:Another thing that you need to know is if you enjoyed today's content, join us on the Facebook group. We've got a Facebook group that is active with Dennis that is going to have content talking about what we're talking about today, to continue the discussion. Agree with us. Don't agree with us. Have a story to tell. Have something to share. Join us in the Facebook group. If you go to Facebook and you search for Tooth and Coin Podcast, click on it to join it and be able to join us there. Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion, to be able to help you a little bit more than what the content is doing. So if you'd like access to that, whenever it becomes ready, all you have to do is text the word ToothandCoin, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Again, that's ToothandCoin, all one word, no spaces, to 33444, reply with your email address. And we'll email you instructions on how to get into the Facebook group, as well as add you list to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you as well.Jonathan VanHorn:On to today's episode. Hope you enjoy it. How does someone define their intention? Because at the end of the day, we're doing budgeting for a reason. How does someone define their own intention? You have to have an intention, but what is intention for someone like us? What's the purpose of all this?Joseph Rugger:Sure. Well, I'll give you a couple of quotes from a couple of authors. One of the ones that I like to quote is Stephen Covey, who wrote The 7 Habits of Highly Effective People. And he said that we need to begin with the end in mind. That's one thing that I'll throw out. And then cautiously, I'll say the next quote is from a guy named Dave Ramsey, who has a tendency to get people all up in arms one way or the other. He has like this cult-like following. And then a lot of people don't like him. Anyways, he said that a budget is about you telling your money what to do, rather than it telling you what to do. So I think that's probably part of my thoughts on intention is, like beginning with the end in mind.Joseph Rugger:So, what is it that is the goal? That's probably a big, lofty thing to think about, well, where do you want to be in 40 years? I don't know. I just need to make sure that the kids get fed, put to bed, make it to school, they make A's and B's and everybody stays happy. So I think that you've got to think kind of long-term. So like maybe part of your long-term plan is that you want to have a vacation home. All right. Well, let's be intentional about that. We don't just wake up one day with a vacation home and an extra mortgage or pay cash for it. We got to put things in motion to help out with that. I think when I talk about intention, I talk about begin with the end in mind, like, what are some shorter range goals?Joseph Rugger:There are going to be some of our clients and some of the people listen to this that may have the short range goal of getting out of credit card debt. They ran up really large amounts of credit card debt. They're getting the practice started or getting through dental school or any of those things. That may be a big thing for them. There are some people that at 22 years old, they find out about an IRA and they want to save every penny they can for retirement so that they don't have to work until they're at whatever age. I think that beginning with the end in mind and just kind of thinking about what are some of your shorter term goals and some longer term goals.Joseph Rugger:Let's say that this idea of having an emergency fund is something that you've never thought of or you've thought about it, heard it was a good idea, but you've never set one up. So then the question to me is, okay, well, what do you want to define as an emergency fund? One month, three months, six months, 12 months? Whatever that emergency fund may be. Okay. Well, let's just say, just to use easy numbers, let's say that I've decided and determined through my own individual thoughts that $10,000 is what I need for an emergency fund. Okay. May sound like a lot. May not sound like a lot to others. Just to use it as an example. And I say, "You know what, within the next year, I really would like to have a $10,000 emergency fund." Okay. So let's back that up. All right.Joseph Rugger:So if we've got a year from now, how much do we need to save every single month? Well, 12 months, $10,000, whatever that is 8, $900 a month. So how do we be intentional about making sure that our budget and our money that's coming in, money that's going out, that we've got an extra eight or $900 a month that we can save to that emergency fund to get there? So I like short term goals. I like long-term goals. I like looking at the big picture and beginning with the end in mind and telling your money what to do. Because if you don't, if it just kind of flies in and flies out, one of the things that you mentioned, John, and I'd be interested kind of in your thoughts on this, when you brought it up, you brought up a life creep or lifestyle creep. So for people that may or may not understand what that term is, maybe kind of expand upon that for the people that are listening.Jonathan VanHorn:Yeah. So lifestyle creep is just whenever you're spending whatever you have. You live your life according to what you can afford. And then when you start making more money, you can afford more so you start doing more living than you are saving. So it's something that is very common inside of the dental industry. It's common in all industries where you have an increased amount of income very quickly, compared to what you had beforehand. It's just something that you have to be very aware of and you have to be prepared for and you have to actively fight against.Jonathan VanHorn:To touch on your point, the way that I did it, the reason I started doing the budgeting was because I'm a person that is very hard to define goals with because it kind of goes all over the place. So what I did is I said, I said, "Okay, here's what I want my life to look like in 10 years." And I actually pulled it up on my phone. It was in 2016 when I wrote it down the first time. And I separated the what in my life to look like from a monetary standpoint, from a work standpoint, and then from a relationship standpoint. And I found it was much easier for me to start budgeting if I did more than just the dollars amount parts of it, because to me, the numbers were important, but it was the other things that ended up making the exercise of budgeting more important, because I knew that if I didn't have the monetary element of it, that those other goals would be at much higher risk because of my lifestyle at the time.Jonathan VanHorn:I want my lifestyle to be a certain way. In order for my lifestyle to be a certain way, I know I need to have at least some type of these funds. And then that allowed me to then pull it back and be like, "Well, okay, if that's my goal in 10 years, what do I need to accomplish in five years? What do I need to accomplish in a year? And how do I get started on that now?" So that helped me with my intentionality, is writing down those goals, again, those monetary, relationships and work, how do I want that all three ... What are my goals for all of those things. What do I want to achieve also was in there. So that helped me with my intentionality as well. So I wanted to touch on that really quick.Jonathan VanHorn:But in terms of lifestyle creep, if budgeting is a way to hold yourself accountable, then that doesn't happen in my mind, because you can tell very quickly is my spending higher just because I have things that I want or is it because of things that I need. And this is something that is, I hope my wife never listens to this, but I've talked to her a bunch of times about what is want versus need. And we've had many arguments on what we need versus what we want. And it's something that, budgeting will allow you to do that. Whenever I'll look over that list of expenses every month, I kind of think of them as like subscriptions. How much am I spending on subscriptions to everything? Because when I think about it in those terms, it helps me decide like, here's what I'm going to stop the subscription of, or here's where I can lower the cost of the subscription in this way to be able to optimize this spend in a better pattern in some way.Jonathan VanHorn:So in terms of that budgeting, I guess if I'm putting a better, bigger bow on it, to me, budgeting is a component of goal setting in your personal life for the longer term aspect of it. So when you're being intentional with these things, and this is one of those things that someone could construe this as financial planning, talk to your financial planner about these types of things, I would say. These would be things that we would be able to have a conversation with you about, I would assume. And if you're having problems quantifying like a dollar amount and things like that, I think financial planner could probably help you with getting that number idea started. Your CPA might be a financial planner, but if your CPA is not a financial planner, this is not what CPAs typically do.Jonathan VanHorn:I want to just make sure that that's said just so that expectation is ... Your CPA may have some things to say about this, but this is 100% a financial planning thing that gets done here. So Joseph, if we came back to you, whenever you're being intentional with us, you're trying to find a home for all the money that's coming in and you're trying to put your money to work in the way that you want to be put to work. What are the components of that? We've talked about spending money, we've talked about income. How do you do something like that? I mean, is it ... Because debt is basically negative money. There's all different types of debt. Someone's decided, okay, I'm going to set goals. I'm going to be intentional. I'm going to budget. What do I do next? We talked about categorizing expenses and monthly expenses and variable and things like that. What about things like that? How does that go into this whole spectrum of budgeting?Joseph Rugger:Yeah. Good question. I think that you probably have heard the terms like good debt and bad debt. And this is going to be an oversimplification, but any kind of consumer debt, like money that you didn't really save up for it. And like all of a sudden I owe a whole bunch of money, that's consumer debt. Something like a credit card, like, oh, I ran up a $25,000 worth of credit cards and I can't pay it off. That's a consumer debt. I think that most people would classify that as bad debt. If you look at things that are typically classified as good debt, it would be in things that are going to have a higher return for you. So whenever you look at hopefully when you buy a home, you purchase the home for X amount of money. And between now and 30 years from now, the value of that home has increased. That would be a good debt. We have an increasing asset that's going to increase in value.Joseph Rugger:When we talk about the idea of you getting a chance to go to a school and have a higher education, you're investing money that you're going to get some future return, we hope so, from that education. So if you went to dental school, you know that that was very, very expensive. But as a result of taking on that debt, you have the ability to go out and earn a good living for you and your family or your future family. We're looking at business debt. We talk about our practice owners that are out there that they have a wing and a prayer and they start a practice from scratch, or they buy an existing practice. They oftentimes have to use debt to leverage themselves.Joseph Rugger:But hopefully what that's going to do is that's going to be an increasing value asset that's out there. So kind of where does debt fit in to this whole kind of budgeting piece? So you've got, again, your fixed expenses and your variable expenses. If you've got a payment on a piece of debt, that's going to be fixed. And then what you've got to decide is, do I want to get more aggressive in paying off this debt or do I want to do something different with this money each month? There's lots of different people that would tell you something different, but one of the things about debt is that it has a very emotional ring to it. And a lot of us have some kind of deep seated emotion around debt.Joseph Rugger:Maybe our parents constantly were living paycheck to paycheck or maybe our parents declared bankruptcy because they were had too much debt. If that happened to you in your formative years, then you're going to have a very different outlook in debt and if your parents were in the flipping a real estate. They're in flipping a real estate and they're constantly kind of back and forth and signing up for loans, you're going to have a very different emotional piece to debt. So I'd say that it certainly is different for each individual person. What I want you to do is be intentional with the money that's coming in so that if early debt pay down is your goal, then you've got money to do that. If instead of paying down debt early, you want to invest that money, or you want to save it to an emergency fund, or you want to save it for a car, or you want to do anything else, or you want to spend it, have a big blowout for your kids' summer birthday party, I just want you to be intentional about it.Joseph Rugger:So I think that debt has just a lot of very, very emotional ties to it for everybody. That's just a little bit different. So if early debt pay down is something that's part of your goal that you've determined with your financial planner, then I think that that's a good path to go down. If you want to kind of make the difference between good debt and bad debt. I mean, I don't think there's anybody that would tell you that it's a good idea to carry credit card debt at 24.5% interest. If you've got this big, huge, credit card balance, I think that most people would classify that as bad debt. So be intentional about living within your means.Joseph Rugger:There's only one way that you're going to get to the place where you're going to have freedom from having to work every day, if that's part of your goals. Maybe some people want to work until they can't work anymore. That may be part of it. I think most of our listeners probably at some point want to retire and put the handpiece down. Only way you're going to do that is if you spend less than you make. Pretty simple.Jonathan VanHorn:So what about the people that make money and there's no money leftover? They pay the minimum payments. They pay for all the necessities. And it's just barely getting, maybe they can save 1,000 bucks a month more than what they're spending. What are the solutions for them? What can they do?Joseph Rugger:Increase income, decrease expenses. I mean, as simplified as that is, that's really your two options. Go out and make more money or spend less. Where do we go for that? Where can you make extra money if that's what you want to do? If you're already working 85 hours a week and you're emotionally drained and you don't have anything left over for your family when you get home, working more hours is probably not the best solution. I think that to get a chance to go through expenses and see what's going on there, you may or may not be in too big of a house and too nice a house. You may or may not need to have a $60,000 car. You may could do just fine with a $15,000 car. So increase income decrease expenses, and where can that come from?Joseph Rugger:For most of the people that are going to listen to our podcast, if they want to change their equation that you just mentioned, it's going to be through a practice ownership that they own, that they're going to become more profitable as a business, which is one of the things that we hope you start out at a certain level and you hope that you invest your blood, sweat, and tears into this practice and it grows over time and it makes more money. There certainly are always expenses to cut. There's always additional side gigs to try and to do, but at the end of the day, if you can increase the value of the business and the cashflow of the business that you're pouring everything that you got into, I think that's probably going to be a big chunk of the things that the people that listen to this podcast will be able to do.Jonathan VanHorn:Yeah. It's hard sometimes to think about it in those terms of we'd love to be able to ... Well, we can do without Netflix and we'll save that $12 a month, all of our problems are solved. Wouldn't that be nice if that was all it took for all those problems to be solved? In terms of the dentists that I speak to almost every day, I see more and more are searching for that mix of lifestyle and financial independence. There's a term that I've heard called FIRE, Financial Independence Retire Early. And I think that's what that stands for. And I speak to more and more young dentists that are trying to reach that type of a lifestyle eventually. And I don't know.Jonathan VanHorn:And again, I'm not a financial planner at all by any shape, form or fashion, but I don't know the best way to reach FIPE for a dentist. I don't know if it is to keep seeking it out as an associate and just have the steady income or if it is to take on a lot more debt early on and to increase your earnings potential. It sure seems like based off of the clients that we have, that it's the latter. It's get your own business, increase your income capacity and a lot of those expenses and the Y that I was talking about before, not the W-H-Y, but like Y as in the variable and the spend, those numbers shrink down so much compared to your X. There's a lot of Z left over.Jonathan VanHorn:And this is anecdotal because I speak to people from all over the country. And I would say like an average associate pay for a GP is somewhere between 130 and $170,000 a year. And depending on the location of the practice that you're in, I would say that for a dental practice ... For that same associate owning a business is not easy, but many, many, many dentists can get to a double that average in take home income with what is perceived to be a small amount of effort compared to the associate gig. It sure is a lot more simple to, if you've got $10,000 of expenses a month, to pay for those expenses with $20,000 a month of income, compared to $11,000 a month in income. It's just a lot simpler to do that.Jonathan VanHorn:And then there's also the people that do even better than that, and you get to 3, 4, 5, 6, $700,000 of income and they all seem to be able to pay off their debts pretty quickly and then get to that financial independence pretty quickly as well. So I think that kind of depends on the person, of what they want to do. So we talked mostly in this episode or almost exclusively in this episode about the personal side and with the assumption that you're going to have a good understanding of how much money is coming in from a dollars and cents perspective, just on the personal side. So with that note, what do you tell people that have a variable amount of income coming in?Joseph Rugger:Well, I think that with a variable amount of income that's coming in, I think you've got to make adjustments to what you would call your cash cushion. If your monthly spend and your personal checking account is, I don't know, $8,000, just to use an easy number, we'd probably need ... If I were to say you need to have X amount of dollars in cash cushion in your account, somebody that's got variable income probably need to have a little bit more kind of in cushion so that we can ride those ups and ride those downs. I mean, you're always going to have your fixed expenses. We mentioned kind of your mortgage payment, your debt payment, lights, water, utility, X amount of dollars kind of as a baseline for food and clothing, that kind of thing. So those are things that as money comes in, those things all get taken care of first.Joseph Rugger:And then it's all of the extras or we were talking about the needs versus the wants. The wants come after the needs are met, kind of in that specific order. So I think that's probably the biggest thing that I would talk about, is just understanding like how much cash cushion do we need to have in the personal checking account to ride the highs and the lows. And then how do we make sure that we take care of the fixed things first, the kind of normal, regular routine, monthly pieces that you have. And then we make sure that the wants or the wants happen in the months in which we have more income than the months that are pretty skimpy on income.Jonathan VanHorn:Makes a lot of sense. The income being variable usually also comes from the business side of things. If you own a business, you can have a wage and you can have like a guaranteed payment or guaranteed draw or just like an automatic transfer of funds. It's a certain amount every month for your business or your personal account. But some months there may not be enough cash in the business to do that. So that's when the real variability can come into play and hopefully if you have a lot of success, that number, that variable is because it's a lot more every month that's coming in and then hopefully we'll have an intention of where that money can go to. Can you recap for us budgeting as a whole, the steps someone should take, if they've not done budgeting before, that is most likely to lead them to getting to the point of actually doing this exercise?Joseph Rugger:Budgeting is about understanding how much money comes in every month and how much money goes out every month and trying to be intentional about that so that you can begin with the end in mind, have short-term, long-term goals and make sure that you're meeting those goals at a high level. Some of the specific tools that we talked about, the simplest and easiest one is to figure out and pull out a bank statement and look and see how much cash came in, how much cash came out, pull three or four months worth of them and you'll get a pretty good idea of what's going on with your cashflow. There are lots of different tools that are out there to help you figure that out. You mentioned Mint. I've used Mint in the past. Probably a lot of people have heard of or are familiar with Mint and certainly has some positives and negatives along with that. Microsoft Excel is kind of my tried and true piece about that.Joseph Rugger:But I think just beginning to understand your financial picture as it comes in to make sure that life creep is not something that takes over and up-ends your stuff. I think those are kind of some of the top of mind things that I would have to chat about. Where's your money going? How intentional are you? Do you have a plan? Do you have a financial planner that's helping you get from where you're at to where you want to go? What's that look like? Are you tracking progress over time? Are there technology tools that are out there that can help you do that? I think those are all kind of different places to start. Pull out your credit card statement. You want to know where your money's going every month? Pull out your credit card statement and see. You mentioned subscriptions. We're kind of in this section of our economy right now where almost everything has moved to some sort of a subscription base, whether that's getting your news every month or getting your entertainment or-Jonathan VanHorn:Paying for your CPA.Joseph Rugger:Paying for your CPA. Right. All of these different pieces are all based on a subscription. You want to know where your money's going? Pull out your stuff and see. And as you mentioned, Jonathan, maybe you use it, maybe you don't. Do you use Amazon, Netflix, Hulu, Disney Plus, whatever the new discovery channel was? I forget, I saw that the other day that came out. Do you use all of those things? If you use them? Great. Is it worth it? Yeah. If you don't use it, is it worth it? Well, no, of course not. I think those are some pretty simple, basic places to start. And just start having conversations internally about it. If you're married, have it with your spouse and get on the same page and talk about intentionality and all these different pieces. That's kind of where I would start. What are your thoughts there?Jonathan VanHorn:I agree with everything you said. The one thing I would add is I would add preset when you're going to do this. If you're thinking about doing this right now, put on your calendar when the first time you're going to dedicate to doing this. It's incredibly hard for me as a person, I own a business, have three small kids. And like I said, we used to do it every Sunday night at like 8:30. Well, one of our kids, they don't sleep very well. So sometimes it's 10 o'clock before we even get away from kids at night. Those Sunday nights, sometimes that's we get behind on doing it. But if we're available at that time, that's the time that we're going to do it. So preset some time. Preset some regularity to it so that you can have some discipline and just knowing that, hey, this is what I'm going to do at this time. I promise you, you can DVR that episode of ... I don't even watch. Lost. I don't know. I don't know how long it's been since Lost has been out there-Joseph Rugger:That was like 10 years ago, dude.Jonathan VanHorn:Exactly.Joseph Rugger:How about Yellowstone? Yellowstone's going to come out soon.Jonathan VanHorn:Yellowstone. Everything else is on the streaming. So it's not like you have to be watching ABC, watching America's funniest home videos at night with Alfonso Ribeiro. I mean, you can find that time to do that. The other thing I would say is be reminded of the big picture consistently, whenever you do this. You don't have to do it every time. I find that when I pull out that list of, like I said, it's still on my phone from 2016. It's just in my notes, on my iPhone of everything that I wanted. Because it helps you remember why you're doing it. And then also have some way of visualizing if you're hitting those goals or not.Jonathan VanHorn:So whether it be if your goal is to get out of debt, make sure that you have something that says, "This is how much debt we have right now." If you do this once a month, if you do it every week, whenever you pull it up, make sure that's all in the thing that you're tracking. This is how much debt that we currently have. Are we making strides towards getting it gone getting it over? I think those are the things that will help with that intentionality that you're talking about. Or is it a more defined way of looking at that intentionality and a little bit of a hack on how to be disciplined to do it because that's the hardest thing for me, is to have the discipline to continually do it over and over again. Because there'll be stretches where I just won't do it for two months, three months, four months, five months. But I know for me personally, the longer I don't do it, the more stress it builds up for me. And then I go and do it. I'm like, oh, okay, yes. We're still doing. We haven't changed much.Jonathan VanHorn:My wife and I are not very extravagant people that go and do a whole lot of extra stuff. So it's not super hard for us to stay within those bounds of what it is. And over the last couple of years I've taught, I'll go in there, I'll be in the lab, so to speak, catching up and things like. April, whenever we talk about it and I'll say, "Well, yeah, we're fine. There's no issues. It's just, I want to make sure that nothing crazy is going on or something like that." But anyway, so that'd be my only thing to add, is create discipline around it by creating regularity, which is by prescheduling what it's going to be. And then be reminded of the big picture very consistently so you can know if you're on track or not, if something changes. Those are things you said, but just more specific ways of going about it. And the tool that I was talking about earlier was Clarity Money as well. I think it's a really good one that some people could use as well, too. So yeah, so I think that was a pretty, without being hyper specific to any case other than our own, is a pretty good overarching class on personal budgeting. Is there any other points or pieces that we need to discuss in that?Joseph Rugger:I think we got it, man. I think it's great.Jonathan VanHorn:Guys, if you are interested in talking more about budgeting, this is something that we do pretty regularly. If you want to share, if you've got a budgeting hack or something that you use to budget regularly, or if you just have a really cool way of doing it, make sure to go into the Facebook group, make a post about it. Tell us about it. We'd love to add that to our repertoire too. Appreciate everyone tuning in. This has been a fun episode. We're going to have another episode about business budgeting, which is a complete ... Well, a lot of people can play the tune to the same thing. They are completely different and there's different reasons of doing it, there's different methods of doing it and there's different purposes of doing it. So that's going to be a different episode. This is probably the second episode of this personal budgeting content. And we will see you guys in the next one. See you, Joseph.Joseph Rugger:Bye guys.Jonathan VanHorn:That's it for today, guys. I hope you enjoyed this episode of the Tooth and Coin Podcast. If you are going to be a practice owner or a new practice owner and you're interested in CPA services, head on over to ToothandCoin.com, where you can check out more about our CPA services. We have around 250 offices around the country and we'd love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners. So people that are about to be an owner of a practice they're requiring, about to be an owner of a practice they are starting up or has become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan VanHorn:And if you enjoyed today's episode, again, go to the Facebook group. Talk to us about what we've talked about, join in on the discussion and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive and better in the long term. Lastly, if you want access to those resources that we are currently building, just text the word ToothandCoin to 33444. That's ToothandCoin, no spaces. T-O-O-T-H-A-N-D-C-O-I-N to 33444. Apply with your email address. We're sending instructions in the Facebook group. We'll send you the resources when they're available and we will see you next week.

Connect with David Harris and his team: https://www.prosperident.com/Join the discussion on Facebook!TranscriptJonathan VanHorn:Welcome to the Tooth and Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones. Some of them are very specific, but we hope that these episodes help you along with your journey. Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors. We are not your CPA's. This is two CPA's talking about informational and educational content to help you along with your journey. A very important piece for you to understand.Jonathan VanHorn:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today, to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share? Join us in the Facebook group. If you go to Facebook and you search for Tooth and Coin podcast, click on it to join it and be able to join us there. Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion, to be able to help you a little bit more than what the content is doing. So if you'd like access to that whenever it becomes ready, all you have to do is text the word tooth and coin, T-O-O-T-H-A-N-D-C-O-I-N to 33444.Jonathan VanHorn:Again, that's toothandcoin, all one word, no spaces to 33444. Reply with your email address and we'll email you instructions on how to get into the Facebook group, as well as our digital list, to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you as well. So onto today's episode, hope you enjoy it.Jonathan VanHorn:Hello, ambitious dentists today on the Tooth and Coin podcast we have with us, an old friend of mine. It's one of the few people in dentistry I've actually physically met. And that is Mr. David Harris. He is with Prosperident. Basically, if you want to talk about dental fraud, he is the world's leading expert. If someone came up to me randomly on the street and said, "Hey, we're going to have a fight over dental fraud. You've got to pick your horse." David would be my horse. There wouldn't be any doubt about it.Jonathan VanHorn:And David, being a friend of the podcast, listen to our episode, I think it was episode number four. And he was like, "Hey, if you guys ever want to talk to someone who actually does fraud every day, multiple times a day and lives in this world, I'd be happy to have a conversation with you." Joseph and I said, "Of course." You're the best at it. We're going to talk to you about it. We're going to ask you questions. We're happy to have you on. So again, David Harris with Prosperident, dentalembezzlement.com. They are dentistry's embezzlement experts and we're really lucky to have him on the episode. So David, thanks so much for coming on.David Harris:Oh, great to be with you, Jonathan and great to see you again. I will make one clarification. You said I do fraud every day, that's not true. I investigate fraud everyday.Jonathan VanHorn:Okay.David Harris:Other people do it. I just keep score.Jonathan VanHorn:Well you're more involved in that world than we are. I'll say that much. So a big problem we're talking about today on the grand scale is fraud. We hope that we're going to be able to talk a little bit about the how, the why, and the what is being done in the fraud world right now, so that David can really give us in the trenches information about how to combat this and like why people steal money. For a lot of us out there, you don't really think about that being... I'm personally a very trusting person. I want to trust people as much as I can. And so that concept of someone else is willing to just take stuff from me is completely foreign, it's something that I almost just block out in my head because I want to trust people. So David, why don't we start with that? Like, why do people steal from dentist?David Harris:Well, you said a Jonathan, everybody wants to trust people. And just for this conversation, I'd like to be a little more precise in our terminology. You mentioned fraud a couple of times. What I really want to talk about is embezzlement. And embezzlement means somebody who's in a position of trust, like an office manager, or maybe a bookkeeper, possibly another dentist in the practice, stealing from the practice owner. So embezzlement is really the conversation. Your question was, why do people steal? And they steal for two reasons, which I'm going to call need and greed. So needy people have their backs against the wall financially. There's something going on in their life that has meant that there's more money going out of their household each month than coming in. And unless you're a government somewhere, you can't sustain that for very long.David Harris:And at some point they've borrowed all the money they can from friends and they're two months behind in their mortgage payment and the bank is about to kick them out and they steal. And they feel bad about it, but they just don't think they have any choice. And there could be a lot of causes. It might be somebody who's going through a divorce. It might be a situation where you have one spouse working in the dental practice and the other spouse has lost their job. Maybe there's an addiction, but there's something happening that's kind of upset the family finances and they're stealing to keep themselves afloat. And then you have the greedy people and they're a little bit different. They're really stealing to address an ego deficit more than a financial one. So they think basically that they're worth far more than what society thinks they're worth and they're stealing to make up what they perceive as that difference.David Harris:So this is the person who looks at their dentist as basically a high functioning moron with good hands and in their mind the only reason the dentist is successful is because this person keeps their chair full and then when their patients leave, collects the money. And some of them, Jonathan will even construct a partnership in their own heads between themselves and the dentist that doesn't exist anywhere else, but in their mind. And then they're not in their mind stealing, they're just taking what they think they should have in the first place.Jonathan VanHorn:You wouldn't have this money if I wasn't collecting it so I should obviously get 5% of it. Right.David Harris:Yeah. And when you talk about the fraud triangle, which I know you guys have covered previously, I mean the third leg of the triangle is rationalization. And rationalization is when you say to yourself, "I know that in general stealing is wrong. However, it's okay in this case, because..." And then whatever comes after that, because is the rationalization. And one of the rationalizations that we see is called the metaphor of the ledger. And what that says is my value to the practice is much higher than what the doctor's paying me so I'm entitled to the balance. And early in our careers, no, we've learned at age three that stealing is wrong. And rationalization is where you suspend reality for a minute when you say, but it's okay here, because.Jonathan VanHorn:So in terms of like you dealing with the people that have the need or the greed, I mean, is there a defining factor in these people that you guys catch?David Harris:Well, yes. It is the most trusted person in the office because people who you don't trust have a far more difficult time embezzling from you than somebody who you do trust. So Jonathan, if I'm working for you and my plan is to embezzle, I worm my way in your family. I'll be the staff member who will babysit your kids for you, or we'll run your personal errands on my lunch hour because what I want you to think is, "Gosh, I would be so screwed if Sally ever left." And you mentioned trust early on, let's circle back to trust for a minute because the way that humans handle trust is interesting. When you first meet somebody, you do this assessment process of can I trust them? And if the answer is yes, then you lock this away in a closet. You never revisit it.Jonathan VanHorn:It's true.David Harris:And in the world, in which I live trust needs to be a little more fluid concept. And we need to kind of pull that out of the closet periodically and say, okay, I know that I could trust this person two years ago, but are they still deserving of my trust? And it just isn't human nature to do that. And that's when people get into trouble. Dentists' are people of science and healers and altruists, and they really like you want to trust everybody. And unfortunately, I see the consequences of extending trust and never re-examining it.Jonathan VanHorn:How many people do you trust David? That's what I really want to know is how many that you trust.David Harris:Well, I used to trust my mother and my father, but my mother passed away so I'm down to one.Jonathan VanHorn:Hmm. That's funny. And I noticed you didn't mention marriage or anything like that [inaudible 00:09:03].David Harris:Well, I had this argument with somebody once and what I said to him was "Your mother will always be your mother, your spouse may not always be your spouse."Jonathan VanHorn:Do you ever find spouses stealing from dentists?David Harris:We do actually a lot more than you would expect. And usually of course, it's an antecedent to divorce. So I'm married to a dentist and I'm about to divorce them. And I go see one of those horrible creatures called a divorce attorney and the divorce attorney says, "Okay, David, where does your money come from?" And I say, "Well, I worked for my wife, the dentist, and she pays me a salary." And the attorney says to me, "Okay, so when you tell your wife that you're trading her in on a newer model, what do you think her response is going to be?"David Harris:And I say, "Well, I'll be careful to do it somewhere where there are no sharp objects around, but I guess after that she's probably going to take me off the payroll." And the attorney says, "Okay, David, so I'm not going to tell you how to do this, but I'm going to tell you what you have to do. You're going to need to find a new place to live. You're going to have to buy groceries and not least importantly, you're going to have to pay me your blood-sucking divorce attorney. So you need some money under the mattress." And you know how this story is going to end Jonathon.Jonathan VanHorn:Yeah. Well, here's a business bank account that's got $200,000 maybe I should move half of the money into account that's in my name or something like that because I know where the buttons are on the bank website.David Harris:We have broken the news to a number of dentists that your marriage is probably in trouble and here's how I know that. We've caught somebody with their hand in your cookie jar and you're married to them.Jonathan VanHorn:Yeah. Yeah. So we've talked a little bit about why people steal. Let's talk a bit more about real world we're coming in and you're a dentist and your a new practice ownerish, or you've been practicing for a little bit, or you're about to become a practice owner or whatever it may be. What are the risks associated with this? What happens in the real world whenever practices are embezzled from?David Harris:It's a little tough to give you precise numbers and here's why. There's a lot of under-reporting that happens. So there's some embezzlement that never gets detected and we can't quantify that. There's also some embezzlement that gets found by the doctor and it gets for whatever reason swept under the nearest carpet, it doesn't make its way into the statistics either. And again, we can't quantify that. When we look at what we do know the best numbers I can give you came from a study The American Dental Association did in 2018, and the results were published in 2019.David Harris:So what the ADA did was they asked 17,000 dentists, have you been embezzled? And of course this isn't a question that lends itself to absolutes. The good news is 53% of the respondents said, "I don't think so." So 47% had been embezzled. And then the next thing the ADA did was they went back and asked the 47%, "Okay. How many times?" And 27% of all the respondents, in other words about half the people who said yes, said "As far as I know, once." And the remainder were somewhere between two and more than four times. And if you did a interesting little exercise, I took 27% the number of who said yes, once that I know off times one and 11% had said two times that I know of so I multiplied 11 by two, and I think it was around 2% that said three times and so on. So I multiplied the percentage times the frequency and what you got was if you sat a hundred dentists in a room that group had already had 93 embezzlements.David Harris:The other unknown here is how many of the 53% who said, "No. As far as I know, I've never been embezzled", will get hit in the rest of their careers and you there's a pretty good chance that they will. Here's what your clients should take away from this. There's probably realistically an 80% chance that your client will at some point in their 30 odd year career gets stolen from them. The other question is how much money gets stolen? And the answers there come from our case files and the average amount in our case files is about $109,000.Jonathan VanHorn:So is that 109 or a 190?David Harris:One zero nine. One more thing before we leave that question. So I mentioned this study had its results released in 2019. In 2007, so 12 years earlier, the ADA did a very similar study. And in that survey, 35% of dentists reported being embezzled. So from 2007 to 2019, the number of dentists reporting embezzlement went up from 35% to 47%. In other words, it increased by about a third in a 12 year period.Jonathan VanHorn:What do you think led to the increase? Do you think it was-David Harris:More people stealing.Jonathan VanHorn:Okay, well that... People don't all of a sudden wake up and there's like a third more thieves than there was before. I do think it was like the financial crisis of 2008, the economic downturn. Do you see that more often in years where like... We're in boom economies right now, technically. Do you see fraud more prevalent in downturns versus... I mean you've been doing it long enough. Do you see a rhyme or reason to that? Or you just see it all the time, one way or the other?David Harris:There are probably a lot of reasons. First of all, I think that we've done a fair job of shouting from the rooftops and increasing awareness. So I think a higher percentage of the thieves are being caught now. And probably that unquantifiable group who I mentioned who steal and don't caught is getting a little bit smaller. And then yeah, you can point to a lot of events that prompt people to steal. And the other thing Jonathan, I think is that the financial operations of a dental practice are getting more complicated than they once were. Dentists if we're going to be really blunt about it, the control systems in most practices haven't changed fundamentally since the 1960's, which was before computerization, before practices took credit cards, before there was such a thing as an electronic funds transfer, and when probably most dental practices were managed by the doctor's spouse, as opposed to an arm's length employee. Okay. So all those changes that have happened since, I don't know, 1965 and yet the control systems fundamentally haven't changed.Jonathan VanHorn:Do you feel like the technology getting more... I don't know if automated is the right word, but being more efficient has helped or hurt dentists chances of being embezzled against?David Harris:Every technological change creates opportunities for thieves. One of the most successful thieves of the 20th century was a guy named Frank Abigail. And if you've seen or heard about the movie, Catch Me If You Can. That's his story. And Frank was predominantly a guy who passed worthless checks and monetized them. And he said a couple of years ago, if I were doing this today instead of in the sixties and seventies, the amount of money I could have stolen would have been much, much, much higher.Jonathan VanHorn:Yeah.David Harris:And I don't think he's commenting on the effect of inflation on dollars over time. He's simply saying I could do a lot more of this today. And the same comment applies to dentistry. Every innovation and one innovation I'll point to that opened some doors for thieves is a thing called a Square. And a Square is a little white plastic gizmo that plugs into the bottom of a smartphone and allows somebody to pay by credit card. I'm not going to map out the opportunities it creates, but I'll just point to that device and say if I were a thief, I would have a Square.Jonathan VanHorn:So I just gave an example that was too specific for David that happened in a real world situation. So we're not going to share that in case anyone who's listening and looking for opportunities. So we talked about the financial impact and the risk associated with doing this right or that dentists just implicitly take on by being a business owner today's environment in the dental world. A question that I've gotten in the past and whenever I get questions like this I always say in my experience... But I don't have much experience in this world so I'm just going to tell you as friendly information, just as anecdotal information, does fraud or embezzlement typically happen in smaller offices like three to seven employees, or does it typically happen in larger offices of like 20 to 30 plus employees? Again, another question of, do you have any data on this or just thoughts?David Harris:All kinds. What drives the probability of fraud or in this case embezzlement is really the probability of you hiring a dishonest person. And that has no relationship whatsoever to office size or whether you're a periodontist versus a prosthodontist or anything like that at all. The real probability we're dealing with is it somebody you hire maybe 20 years ago woke up this morning and said, "Yeah, today's the day I'm going to steal from my doctor." Statistically, Jonathan, this is a complete random walk. It doesn't depend on any factors relating to the doctor. I mean, another one that I will hear a lot from doctors is "Well, I pay my staff really well and therefore I'm purchasing their honesty and lessening the chance that they will steal from me." Okay. Well, let's go back to those ego-driven thieves.David Harris:The greedy ones that I talked about. These people are like bottomless pits. They overestimate their value by a multiple. In other words, they think you should be paying them three or five times what you are. That extra $2 that you pay your staff above kind of the local going rate, doesn't come close to scratching that edge. So no, there are no offices that are more or less vulnerable. People say my staff have been with me forever and therefore I'm not vulnerable, or I pay people really well or I live in a small town where all of the people I hire used to be my patients. And we see embezzlement that fits all of those profiles.Joseph Rugger:Let me ask you this, David. So when we talk about money in and money out, this is something that you referred to as the revenue side on the expense side. So whenever you're looking at all of the different embezzlements, what typically do you see? Is it majority revenue side stuff or is it majority expense side? And if you could maybe just kind of expand upon that, just for folks that aren't super savvy with accounting terms like revenue [crosstalk 00:20:17]-David Harris:Absolutely. And for the benefit of the non-accountants in the audience, what Joseph's asking about really is there are two ways that people could conceivably steal and he's wondering which of them is dominant. So by revenue side stealing, we mean somebody taking payments that come into the practice from either patients or insurance companies. And expense side stealing would be things like tampering with payroll or if the practice has a bonus plan trying to do things that will maximize the bonus. Or something we've been seeing a lot of lately is staff members making personal purchases because the practice has an Amazon account. So that's expense side stealing. Revenue side means patient or insurance payments. What we see Joseph is probably 80% revenue side theft and 20% expense side theft. So revenue is by far and away the dominant thing.David Harris:And if I'm the office manager and I want to steal on the expense side, it takes work. I have to do things to make that happen. And while I'm doing those things, people are putting $20 bills on my desk. So the temptation is much stronger on the revenue side. The other issue is this, let's say that I steal by inflating how much I get paid. There's a real limit to what I can do there, because at some point there's salary expense relative to revenue is going to climb to something that's extreme. And people like my CPA firm will say to the doctor, "Well, why is your expense ratio so high? Did you give all your staff a huge raise or something?" So it becomes conspicuous. Statistically, on the other hand, I can steal the same amount of money on the revenue side and it won't move any of the major key performance indicators enough to be conspicuous.David Harris:So if I'm a little bit analytical about it, I'm going to say I could easily take 5% of practice revenue without waving any particular red flags. On the other hand, if I took 5% of revenue in the form of salary it's certainly going to be noticed.Joseph Rugger:Had a practice owner the other day, brand new practice owner, he said, "Well, I feel like I'm doing a good thing here from a controls perspective. And we've gone cashless at our office, so we don't receive cash so that kind of inundates me from this revenue side." What would be maybe some of your thoughts on that? Certainly brand new practice owner, super great dentist, successful, does well but that was kind of one of his I'm preventing embezzlement because I'm not accepting cash at the window.David Harris:Yeah. First of all, I agree with his decision not to accept cash. It's a nuisance to handle it. It poses a lot of accounting challenges for practices. When they do things like take cash that came in and use it to pay off as expenses. I mean, you guys have both probably tried to work through the little accounting tornado that that can create. So I love the idea of being cashless. If I were an embezzler, would that stop me in my tracks, not a chance. It is much easier than most dentists realize to cash a check payable to them. And it is also not that hard to monetize a credit card payment, or even what's an ACH deposit. And for the benefit of the audience, ACH means automated clearinghouse. So that's when somebody like an insurance company, for example, deposits money directly into your bank account. As long as the thief is a little bit motivated and they normally are they will always find a way to monetize incoming money.David Harris:Again, I don't think we should take this out of context, Joseph. I think what your friend did was a good idea. However, it won't stop an embezzler. It will simply challenge channel them into some other way of stealing.Joseph Rugger:Whenever you look at the stuff that you've done and investigated, I'm sure that you guys come back and have a number of recommendations that you have. So to the extent that you feel comfortable sharing, what are maybe just some common steps that a practice owner might take to... I mean, I feel like you're not ever going to eliminate completely the embezzlement risk, right. You're going to do everything that you can to mitigate it. What are maybe some practical takeaways that they might be able to do to just help start to minimize that risk or minimize that opportunity?David Harris:Absolutely. Well, let's go right back to the very beginning to when dinosaurs roamed the earth. And the first thing I'll say about dentists is that they categorically hate the hiring process. And like any job you hate, mine is cleaning the garage, when a shortcut appears you tend to grab it. And a lot of dentists will take shortcuts in hiring. Shortcuts will include things like not calling former employers, not doing a criminal records check. It astounds me the low percentage of dentists who drug test applicants. I mean, I can't get a job at FedEx delivering the crap people buy on Amazon without a drug test. And yet I can work in a dental practice that can prescribe narcotics. That makes absolutely no sense. So the first thing is that dentists hire people knowing far less about them than they should and that's really easily correctable. So let's start there. We've got to do a better job of screening people before we hire them. I'll give you a sobering statistic. 70 million Americans so that is one in four adults has a criminal record.David Harris:And yet the majority of practices don't check criminal records before they hire. It's easy to do and they just don't. I wouldn't hire somebody today without looking a little bit at their social media activity, because you can learn a lot about people by the way they conduct themselves on Facebook or Instagram or whatever.Jonathan VanHorn:As a person who has a team of 16 people, I have gone through the hiring process many times I can tell you, yes, you can find out a lot with just a little bit of social media digging.David Harris:Yeah. It's even more basic than that, Jonathan. When I'm interviewing somebody face to face, one of the things I should say is I just need to check your eye identification so can you please show me your government issued photo ID and a couple of secondary pieces of identification. And the secondary stuff could be anything. I mean, a gym membership, a library card, a credit card, whatever, but I want to see one with a photo and two others with your name. Because if I have baggage and I'm applying for a job with you, one of the easiest ways to hide that baggage is to pretend to be somebody else like my brother.Jonathan VanHorn:That's a really good point. Yeah. That would be pretty simple to do. Just go by a different name everyday.David Harris:It's so simple. So Joseph, to answer your question, the first piece is hiring. The second piece is this and it's really simple. Your practice management software, every single day, will produce a report at the end of the day that says here's how much money you collected. And that should be the amount that gets deposited into your bank. There are two kinds of dentists. There are those who know how much money should go in the bank today and check their online banking to see if it happened and there are those who don't. The majority are in the second category. Again, I think this is probably 20% of doctors know how much the deposit should be and check it and 80% just kind of blindly hope that the amount of money that goes in is right. If you're in that 80%, you make it really easy for me to steal from you because I can simply partition the deposit into the part that I'm going to put it in your bank and the part I'm going to put it in mine.David Harris:If you check this, I can still steal from you, but now it gets a little tougher because what I have to do is I have to teach your practice management software how to lie to you about how much money came in. It's far from impossible. In fact, it's relatively easy in most software, but if you check one against the other immediately, you have ruled out the bottom core tile of thieves, right. The laziest, the least imaginative can't steal from you anymore. Okay. So if you don't check deposit against what goes in the bank, then the laziest, dumbest thief on the planet can successfully steal from you. Okay. So let's start there. It's easy in theory, the practice is a little more complicated because some of the money that comes into a practice arrives at a different time than when it's recognized by the practice management software.David Harris:So for example, if I go to your practice and I pay by credit card your practice management software records it today, but there's a processing lag of typically a couple of days before that same money hits your practice bank account. So it's a little bit challenging for a doctor. And it's one of the things often that I suggest they outsource to somebody, but if you're not doing that, as I say, you're vulnerable to very unimaginative stealing.Jonathan VanHorn:This is one of those areas that as CPA's, we run into a lot because we get a lot of on this. And one big misconception that we want to make sure is very clear in this episode is your CPA's job is not to help you with fraud. Your CPA's job is to create a reconciliation of your accounting if they're doing your bookkeeping and create financial statements. If you read any reports that come with financial statements being issued and any engagement letters, it's going to stay in there that we cannot catch fraud by doing those steps. That's not what we're doing. We're technically by compiling that information we're just technically putting on a piece of paper what your practice has told us has happened.Jonathan VanHorn:And so very often get people that speak to me and said, "Okay, so you're my CPA, and you're going to protect me against fraud." And you have to very quickly say, "No, that's not what the CPA does." I mean, the highest level engagement that a CPA typically in a public accounting firm does for small businesses is usually an audit. And in an audit you typically say an audit is not designed to catch fraud. It's supposed to help you determine how your internal controls are working. It's not there to catch fraud. And if there's fraud occurring, we may not even catch it if we do an audit, which is the highest level engagement that an attest service can be done for a public CPA firm. That is not engaging in something like forensic accounting or something along those lines. Right. And so-David Harris:Even there the majority of dental practices don't get an audit. They get a lower level of engagement with the accountants.Jonathan VanHorn:Exactly.David Harris:The chance of finding embezzlement goes down even more. Let's lay out the problem though, maybe in a little different way. Jonathan, let's say, I go to you as my CPA. And I say, "Jonathan, I'm so excited. I'm going to start a business." And you say, "That's great, David, how are you going to keep the books for your business?" And I say to you, "Jonathan, I've got this great idea. I'm going to have one piece of software track my revenue, and I'm going to have a totally different piece of software look after expenses. And Jonathan, here's the best part. These two aren't even going to talk to each other." You would say to me, "David, that's the stupidest idea I ever heard. I mean, there's no way that would work."Jonathan VanHorn:Yeah.David Harris:And yet that is every dental practice.Jonathan VanHorn:It drives me crazy that the practice management softwares do that. Open Dental talks to QuickBooks online, but it's such a shoddy like API grab thing. It doesn't really do anything.David Harris:Yeah.Jonathan VanHorn:So, yeah. It's frustrating.David Harris:But most businesses use a one piece of software that tracks both the revenue and the expenses and dentistry is different. It's a goofy, complicated system. And when accountants do their work... To do what they're mandated to do, which is as you say, produce financial statements and ultimately information for the IRS, they really don't even need to look at the practice management software to do that at all. I mean the other side, the expense side, is really all you need plus the bank statements. So most accountants don't even look at practice management software. And as you point out, they're not really paid to. And even if they were, then we get into the question of whether they have the expertise to make much sense of what's happening in that software. So the accounting processes is kind of an uncommon one for dentists.David Harris:And it really means that the chance of the CPA's finding the embezzlement is very low. And I'll give you some statistics on this. When we look at how embezzlement is found across all industries. So dentistry plus everything else, accountants find about 40%. When we narrow the focus to just dentistry, that number goes down to about 8%. And it's not because the accountants who deal with dentists are dumber than all the other accountants. I mean, that very clearly is not the case. In fact, I think you could argue the opposite. You guys aren't in a position to contest this point of mine, but it's that the accounting system in this divided fashion just really does not lend itself to somebody following the accounting process, identifying embezzlement.Jonathan VanHorn:Absolutely. Well, I tell doctors all the time, "Look we're not in your office every day. When you do that into the day close, we're not there with you. We can not tell you if that day sheet is correct or not. We will never know if that day she has deletions or adjustments or what they were for or why they were done." All that we can do is if you put a deposit into the accounting system or your office manager does, or whomever does, we can then tell you if it hit the bank account, that's all we can do. But we can't tell you if that piece of paper was right or not.David Harris:That's right. And to go back to Joseph's question about what a doctor can do, that's my next point. That day end report that your software produces needs to be something that you scrutinize. If you simply stick that in a drawer somewhere and don't look at it, then you're vulnerable to the other type of manipulation that somebody does. And as I say, if we're stealing on the revenue side, if you don't look at the deposit, I just partition the deposit. If you do look at the deposit, now I have to make practice management software misrepresent how much money you make. And the way I do that is I make deceptive entries in your software. So you need to look at that day end report and you also need to compare all of the day end reports that you have to a month end report printed on the same basis. In other words, if I have 20 reports from my business days in the practice, and they don't add up to the month end report, then something happened on a Saturday.Jonathan VanHorn:That's a great point. Yeah. And just to hammer this point in, this is from another consultant that was in the practice management world. They said one thing that happens that's really common on day sheets is that stuff doesn't get billed that was done during the day. And it's not because someone is stealing from you it's because they just forgot to put it on there. And so you should be doing this just from a revenue standpoint, one way or the other. Like there's no reason to not be doing this in other words. There's multiple reasons other than just than this to have that be a part of your business practice.David Harris:Early in my career, Jonathan, I was hired by a dentist who was convinced that his staff are stealing from him. And the basis really was that he just didn't see the amount of revenue that his level of activity would suggest. And I started digging in a little bit and what I saw was that the hygienists in the practice were not actually billing any x-rays. And I asked the doctor, "Well, is all the radiography done by your assistant and your own operatory?" And he said, "No, my hygienists do the films." What came out of this was a really stupid thing. Now this was back in the days of when x-rays were taken on film, not digital, the hygienists would take the x-rays and she would put them in the chart. She would give the chart to the front desk.David Harris:And her expectation was that the front desk would see the x-rays there bill a code. And the front desk people are saying, "I see an x-ray in there, but I don't know if it was taken today or last millennium. If you did something hygienist write it on the chart and then I'll bill it." So it was just a little communication thing, but it was costing the doctor about $80,000 a year.Jonathan VanHorn:Yeah.David Harris:And when I told him what the problem was, I said, "Okay, that's the kind of symptom. The real problem is you're not looking at the day end reports because if you did, you would notice that there's no possible way that a hygienist could see 12 patients today with no radiography." So your point is spot on, that this is your chance to miss or to spot where somebody made a clerical error and it could cost you $300 as well as looking for the stuff that is, as I say, deceptive kind of entries. So we need to look at day ends. Doctors think that month end is something the staff do that they don't really understand. And the final point Joseph is that if I'm a dentist and I own a practice, the reports that I review should be ones that I printed myself. As soon as I allow a staff member to print a report and hand it to me, I have no control over the assumptions used to generate that report. And if a staff member wants to hide stuff from me, that's a huge enabler.Jonathan VanHorn:So we get this question all the time. And it's one that I struggle with is I'm a new doctor, I don't even know what practice management software we use. How do I figure out how to print the reports out? It dumbfounds me that people don't get training... There's no training in this like dental school or something like that.David Harris:Well let's be honest. Nobody became a dentist because they had this burning desire to be a business owner. It's the nasty trick, Jonathan, that they spring on them in fourth year dental school when they say to them, "Oh, and by the way, you also have to run the place." And at that point, they owe $380,000 in student loans and it's just way too late to turn around and paint houses for a living. For every dentist I've ever met, the running of the practice is kind of the unwanted stepchild in the marriage. But let's call a spade, a spade here. Practice management software is not going to go away. It's going to be with you if you're a dentist for the rest of your career. And it is more important to your financial wellbeing than your hand pieces.David Harris:And yet they all know the hand piece, like it's their child, but when they get to practice management software it's like, "I don't want to touch it because I might break it." You started your sentence to me by saying, "When a dentist..." The one thing we know about dentists is that they can all learn to get into and then out of dental school, they had to do a lot of that. So the question is, where do you get the information? Every software company has trainers whether it's Eaglesoft or Dentrix or Orthotrac. They all have this whole army of trainers who would love to sit with a doctor for a couple of hours and say, "Okay, doctor, here are the reports that are going to be most valuable to you. And here's how you actually print them in your software."Jonathan VanHorn:And they're usually paying for that already, too with their monthly fee or whatever their fee is right?David Harris:Whether they are or they aren't, if you had to buy a couple of hours of a software trainer's time and it costs you $300, like the return on that investment is phenomenal.Jonathan VanHorn:True. So we've covered some really cool stuff today. David, is there anything else that you feel like needs to be covered in the realm of this conversation? There's probably dozens of hours worth of information we could probably be discussing right now, but in terms of what we talked about so far, is there anything that we missed or that we glossed over that you think needs to be reemphasized?David Harris:Dentists in general, aren't natural skeptics. As I said before, there are people who deal in a physical scientific world and they're used to linear problems with linear solutions. And it just doesn't come naturally to them when they're talking to somebody to ask themselves, what if this person has a hidden agenda. And when you think about how dentists relate to each other in a clinical sense, I mean, a general dentist sends a patient to an orthodontist for assessment and the orthodontist writes the general dentist back and says, "Yeah, I think this patient would benefit from treatment." There's an altruism involved. I mean, the general dentist is a hundred percent entitled to believe that the orthodontist is doing that because it's in the patient's best interest, not because the orthodontist is trying to buy a boat. That's the code that they have. And it serves them really well inside the clinical bubble and horribly outside of it. And when you're hiring somebody, which again, most dentists find a stressful and challenging process to step back a little bit when you're interviewing somebody and saying, "Well, what if, what they're telling me isn't completely true", is challenging.David Harris:But I've given this statistics, I've given the sad news that most of your clients sooner or later will be victims. And the biggest thing that you can do to prevent that is to be a little bit skeptical.Jonathan VanHorn:That's right. So if we have some people that are listening right now that are currently skeptical, how can they find you? What can they do to hear more about this topic or read more of your stuff or even connect with you or your company?David Harris:Absolutely. And I should start by saying, we provide really two distinct services. One thing that we do is when a dentist is suspicious or they've caught somebody, or the thought of somebody stealing their money just keeps them up at night we can do stealthy investigations. So staff don't even know that we're on the job. We can see if stealing is happening. And if it is help the doctor deal with the fallout that comes from that. The other thing that we do Jonathan, is that we work with dentists to help lower their risk. So we will teach them how to generate the reports they need and what to look for on those reports. And we even will look at things like hiring and security settings in their practice management software. So we will help somebody set up their control system so they're as protective as they can be. Those are the two things we do.David Harris:If somebody wants to reach us, they can call our toll free number, which is 888-398-2327 or they can reach us on our website. And once they hear it, they'll never forget it, www.dentalembezzlement.com.Jonathan VanHorn:Fantastic. Well, as always, it's a pleasure getting to reconnect to my friend. I urge anyone that is more interested in this topic it's absolutely fascinating... If you follow David on Facebook, he's put up posts about all these people that have been caught. It's really interesting to be a part of and to see a little bit of a glimpse into David's world. And I urge you to reach out to David. He's a fantastic resource to the dental community at large, and he helps put people that want to take advantage of the people that we care a lot about, which is are you guys the dentist behind bars and hold them accountable and take care of those things inside of this industry. So, David, thank you for what you do for the industry and everyone listening. I hope you have a great time, a great day, and we will see you on the next episode.Jonathan VanHorn:That's it for today, guys. I hope you enjoyed this episode of the Tooth and Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services head on over to toothandcoin.com. You can check out more about our CPA services. We help out around 250 offices around the country. I'd love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners so people that have are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or has become an owner in the past five years. That is our specialty. And we'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan VanHorn:And if you enjoy today's episode again, go to the Facebook group. Talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the longterm. Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Reply with your email address. We'll send you instructions on the Facebook group. We'll send you the resources when they're available and we will see you next week.

The Huddle Guys remind each of us to #payyourselffirst by reviewing the benefits of retirement accounts as a savings function and the differences you'll see amongst the plans. The Huddle Guys also talk about investments made by well-known investors and their outcomes…a conversation that lights a fire for Ignatius relative to how the information is reported by certain news publications. And Eric discusses hardships endured by his clients over the last year and the effects of the pandemic on small and large businesses. This information may be a part of your experience too or serve as watchouts to drive different decisions related to your savings and investments. As always, remember that having a good CPA in your corner is invaluable. Where your money is going and is it growing? Your CPA can help you to answer those questions. It's time to Huddle Up!

Join the discussion on Facebook!Full Transcript:Jonathan:Welcome to the Tooth and Coin podcast where we talk about your adventure of being a dental practice owner. In these episodes we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so you can get past this problem in your practice. Some of these concepts are really big ones, some of them are very specific but we hope that these episodes help you along with your journey.Jonathan:Now a very important piece for you to understand is that this is not paid financial advise. This is not paid task or legal advice. We are not your financial advisors, we are not your CPA's, this is two CPA's talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand. Another thing that you need to know is that if you enjoyed today's content, join us on the Facebook group. We've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share, join us on the Facebook group. If you go to Facebook and you search for Tooth and Coin podcast, click on it to join it and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering around our topics of discussion to be able to help you a little bit more than what the content is doing. If you'd like access to that whenever it becomes ready, all you have to do is text the word Tooth and Coin, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Again, that's Tooth and Coin, all one word, no spaces to 33444, reply with your email address and we'll email you instructions on how to get into the Facebook group as well as add you to the list to be able to send you those resources when they're available. If they're available, we'll go ahead and send them to you as well.Jonathan:Onto today's episode, hope you enjoy it. Hey there ambitious dentists, today on the Tooth and Coin podcast we're going to be talking about the number one most exciting thing in dentistry which is fraud. Everyone's afraid of it, everyone hates it, everyone hears this happening and thinks that it may happen to them. I've seen numbers from really smart people say that something like one out of every three, to one out of every two dentists will at some point in their career, be embezzled upon. It's a staggeringly high number of dentists may actually be effected by this in their practice. I get a lot of questions and a lot of confusion about, "Why does this happen? How does it happen? Is a CPA firm going to help me with this problem in my life?" And things like that.Jonathan:The answer is not... it's a nuanced answer like so many things are, it's not a one size fits all. Today's discussion we're going to be talking about the problem that is embezzlement in dental practices and I've already kind of highlighted what the problem is, people they can steal your money. To highlight that problem I'm going to be asking Joseph, Joseph has actually lectured on this topic before and then we're going to turn the tables around and Joseph's going to talk to me about in terms of the CPA firm helps with this problem inside of our clients and what our perspective is and how we view our service for our clients when it comes to this really nasty thing inside of not just dental practices, but all small businesses.Jonathan:Again, the main problem is that a lot of people are going to be embezzled upon, dental practices for some reason tend to be targeted a lot for embezzlement. Joseph, why don't you tell us why does fraud occur in small business, especially to dentists.Joseph:That number that you just spit out, that's nuts. I don't know that I've heard that. Somewhere between 30 to 50% of dentists get embezzled upon during their career. I guess if you look at the average dentist, we're talking about 30 plus years, we're talking most of them are going to own their own shop or at least the ones that are listening to our podcast are going to own their own shop at some point. I guess when you put it out that long, I guess that increases the odds. The Small Business Administration talks about the percentage of businesses that fail. Maybe dentists are so high because they're such a great business to be in and they've got such longevity with them, I don't know.Joseph:Man, that's a crazy stat for sure.Jonathan:It really is. I think the reason that is is because there's a lot of different forms of embezzlement, there's literally someone stealing tons and tons of money, and then there's people that are stealing supplies. Embezzlement has... or stealing hours even, just putting too many hours down compared to what they worked for. You may be one of those 50% but it may be that somebody padded hours for three months before you fired them. It doesn't necessarily mean that you're getting hundreds and hundreds of thousands of dollars stolen.Jonathan:Yeah, it's a big number and something you've got to be aware of. You've got to be on top of.Joseph:That'll wake you up in the morning. If you're listening to our podcast bright early in the morning, that should wake you up and get your attention.Jonathan:Oh yeah.Joseph:Jonathon, as CPA's we are specifically trained to think a certain way and you may think that this is right, you may think that this is wrong, but one of the things that they've just kind of ingrained in our brain is that everyone's going to steal from you given the right set of circumstances. That's kind of the way we're trained to think is, "How do we think about it in terms of those specific pieces?" Kind of the tried and true piece that we always point to in the CPA world is what's referred to as the fraud triangle. Do you remember the fraud triangle? Have you talked about the fraud triangle since you took the CPA exam?Joseph:Did you wake up in the morning, you're like, "Hey April, what's going on babe? Let's talk about the fraud triangle."Jonathan:The triangle that I usually refer to is the cheat, fast and quality, is that triangle. I don't usually talk about this triangle, the fraud triangle. Talk to me about the fraud triangle.Joseph:There's three sides to the fraud triangle, right? That's why we use a triangle, three sides. We've got three different pieces to fraud. The first part of the fraud triangle, and it doesn't really go in any specific order, but one of them is incentive. "Do I have an incentive to commit fraud?" I'm going to use your example. If I go and I pad my hours, in other words if I go out and I say, "I didn't work eight hours today, I worked eight and a half," but I actually only worked like seven in a half. That's padding my hours and I'm going to have a direct incentive from that.Joseph:Kind of the higher levels of financial management there is the incentive that if our PNL numbers look better, I'm going to get a higher bonus. If my overhead percentage stays under a point, then I'm going to get some sort of financial incentive. Incentive's the first piece of the fraud triangle, anything else that you might think of in the dental world that would be part of an incentive for fraud? Do we have any... I would imagine some of them. Go ahead.Jonathan:Yeah, there are tons of incentives for fraud in this world. There's tons of incentives for people to... really the main incentive that people have inside the dental world is usually just money. That's the incentive for people to try and take it. They want more money. Whether it's money that they deserve or not, that's what they are typically wanting.Joseph:Got it. Maybe you have a new patient bonus to where if you have X amount of new patients that are out there, and if you get those new patients numbers, that may be the incentive that somebody goes and then creates a new patient inside of the software, or something silly like that. Incentives the first piece of the fraud triangle.Joseph:The second piece of the fraud triangle is opportunity. Opportunity is probably the one that is easiest to understand so if I am working the front desk and somebody pays in cash and they give me $80 worth of cash. I have the opportunity to stick that cash right inside my pocket. I was just looking at some financials for one of our clients that has multiple employees that have the corporate credit card. If you're walking around with the corporate credit card in your wallet as an employee or team member of a dental practice, then you are presented every single day with the opportunity to whip that card out at wherever you want to and do that. Opportunity's the second piece.Joseph:The third piece that is I think the more psychological piece that's out there, is what's called rational. The rational basically is a way for our mind to justify that what I'm doing is okay. It may go something like this, "Well Mr and Mrs dentist is just doing so well, they're making all this money. I see all of these deposits come through. They pay me a pittance, I'm making minimum wage or not nearly enough." I've just rationalized in my head that it's okay to take money, to pad hours, to swipe the corporate credit card, to take any form of all these different pieces that are out there.Joseph:That's the three pieces of the fraud triangle that we were trained upon way back when inside of CPA land. Opportunity, incentive and then rational. What one kind of sticks out for you Jonathon?Jonathan:It's almost always opportunity to me is what it seems like to me in terms of why this happens. When it happens in this industry, I guess is a better way for me to say it. Usually it seems to be opportunity. Someone perceives a weakness in, this is CPA talk, internal controls which for everyone that's listening, internal controls are effectively like, "Hey, nobody's looking over my shoulder when I'm doing this, and I can just take that money if I want to. If you've ever seen Office Space, it's whenever they do the thing, they have this computer program that rounds it to the next penny and they're like, "No ones looking at this. All we have to do is round this fraction of a penny up and then put it into a different bank account and literally no one will ever figure it out because it's literally we're talking about hundreds of thousands of transactions. We're talking about a hundredth of a penny per transaction. That transaction will never be looked at or flagged so that money will just be in this bank account."Jonathan:It's opportunity is what typically happens in dental practices, is they think that, "Hey, I'm the only one who writes the checks. I'm the one who receives the inventory. I'm the one who pays the bill. I'm the one who signs the check. I'm the one who receives the patients money. I'm the one who enters it into the practice management software. I'm the one who takes it to the bank." There's no one really looking over their shoulder. Opportunity, usually to me I think is the first path towards... into the dental space of it, is they realize, "Hey, there's a little bit of an opportunity there."Jonathan:I'm fully, fully, fully, fully not going to downplay the fact that there's some type of motivation typically that makes them look for those types of things, but in dental practices, those opportunities seem to arise a lot. I think that's just due to the nature of it being in a smaller business. In your time as a CFO, did you ever have any moments there was the opportunity for fraud at your old place that you could... obviously if it's something that you're not allowed to talk about, don't talk about it but is there anything that you can think of that you've ran into in your career when it comes to fraud?Joseph:I think there are certainly things that as a CFO controller, as a business owner, there are certain steps that you take to try to prevent fraud. One of the things that you were just mentioning there was the same person that's opening the mail is making the deposits and entering stuff into the patient management software. One of the things that we talk about is an accounting term is segregation of duties. You don't want to have the same person that's doing all of those things.Joseph:One of the things that we had to always make sure was that every time a patient came in the door, it was a documented patient encounter that went into the patient management software. What that's going to do is that's going to generate the opportunity to create the coding for that specific encounter. What was the procedure that was done? What was the product that was delivered? Once that whole thing starts, then that really is a good catch about a bunch of different things.Joseph:If somebody came in for a pair of compression hose that were $80, that gets entered into the patient management software, that's then going to give them... they're going to have to pay the $80 because it wasn't covered by insurance. When you think about it in terms of that it's like, okay, if this $80 invoice gets generated, if the patient pays cash and the person that's taking the payment, the front desk person or the clinician or whoever it is, takes that $80 and puts it in their pocket rather than in the company deposit, what's going to happen is because it's in the patient management software, an invoice is going to get generated. Then the patient is going to go ahead and get a bill the next month. If you got a bill for something you already paid for Jonathon, what would be your first thought and what would you do next?Jonathan:If I got a bill for something I already paid for I'd say, "Hey, they've not processed your payment, we need to call the vendor and see what's going on."Joseph:Yeah. Not that that happened regularly, but that was just one specific piece that we had in place. I think the other stuff, I think that probably every CFO's big nightmare or controllers big nightmare is these company credit cards that are out there. Credit card companies make it really, really easy for you once you have a business credit card to order additional card holders and additional probably. I was always real hesitant to have somebody get added to the company credit card because it just creates this opportunity and if you take the opportunity and you take the rational, it may be one of those things where somebody's got the corporate credit card and it's time for them to go out to the lake and go fishing this weekend, and they just whip the company credit card out and fill their bass boat up with fuel on the company.Joseph:That's going to look like a charge to Exxon or Shell or Conoco, whoever it is, it's not going to be one of those things. Obviously if you've got somebody that's looking at all that stuff, they say, "Well typically the gas charge is $25, and all the sudden here's an $85 charge on Friday afternoon to Conoco," that may raise a red flag. I think that kind of goes back into the other piece of it is that if you do have a company credit card and you do have people that have those, you need to be reviewing those charges every single month. I don't want you to get carried away and review it daily and think that everybody's stealing from you but you definitely need to give it the old eyeball test.Joseph:Jonathon, I don't know if you're familiar with the formal term of eyeball test, but I was talking to a client about this the other day, I was like, "Man, you need to give it the eyeball test." He's like, "What's that?" I said, "Well, you just kind of take a look at it and see if things look out of whack." What I just mentioned is if typically your gas is $25, $30, $32 and then you have an $85 charge, that doesn't pass the eyeball test. That's something that you need to look into.Joseph:The other thing is that you've got... the IRS requires that you have documentation for every single thing that you're claiming as a business expense. If you've got these credit cards that are out running around, you've got to have some sort of system to collect the receipts and to document that and to say why it was an ordinary necessary business expense. If it comes under scrutiny, that's what the IRS is going to say. I was told by an IRS agent that whenever they presented proof that this was an ordinary necessary business expense, they pulled out the credit card statement and said, "Well, see right here it says Exxon Mobil $24," and they said, "A charge on a credit card statement is not enough documentation to prove that it's an ordinary necessary business expense.Joseph:Those are a couple of things that jump out. Having multiple people having dual controls and segregation of duties, those are big things. Making sure that every patient encounter is entered into your patient management software. One thing I was talking to a client about the other day was one of the things, if I'm sitting back in my CPA brain and I'm trying to invent ways to create fraud, is to review your adjustments report. Let's say, go back to this $80 compression hose, let's say that that patient comes in and they pay $80 and the person that's working the front gets really, really smart and they say, "Oh, we'll just put a patient credit adjust for $80," which means that that patient won't receive a bill and it'll show up as they had actually paid but the cash didn't make it to the company bank account.Joseph:That's something else that's out there. You need to be reviewing your adjustment reports. What would you think on adjustment reports? Is that something that we recommend that they do daily or weekly or monthly? What are your thoughts on those adjustment reports? We made our software so easy to just write balances off, I think somebody with some authority needs to be looking at those. What are your thoughts on that?Jonathan:There's a few. I don't know if it would be called an adjustment in whatever practice management software our clients are using, whether it be [inaudible 00:17:55] or [inaudible 00:17:56] dental, or soften, or whatever it is that they use. They all have the ability to do those types of things. One of the big dangers that a lot of these practice management softwares have 10 ways to do the same thing and really only one of them may be the right way. It will work on the surface but if you were to dig back the reason for doing it in a certain way, usually there's a reason you do it one of those 10 ways for whatever it was you were doing, and a lot of practices use practice management software incorrectly.Jonathan:One of the reasons we typically recommend having an office manager consultant person be able to come in and teach you how to do those the right way so that you are making sure everything goes in their correctly. In terms of the adjustment piece, yeah absolutely. One of the things that I tell people in regards to one of the best ways they can help prevent fraud, is to have a very solid end of day process in their practice. What I tell them is when I was in high school and college, I worked for what doesn't exist anymore, but a video rental store...[crosstalk 00:19:05]Joseph:You're dating yourself there.Jonathan:At the end of every night we had a countdown... yeah. At the end of every night we had to count down the registers which meant that you open the register, you printed out a report from the little software that was done in MS-DOS or some type of shell station. You print out this report, it comes out in that really big wide paper, it said, "This register had this much in cash. This much in checks, and these much in credit card payments go through this register." We had four registers and you had to countdown each register and make sure that every dollar was accounted for that went through that system.Jonathan:Then you had to, if it was cash you had to tie it up or put a rubber band around the cash and you had to put the checks, you had to have a ten key register printed out of that. You had all the credit card receipts, it's done together as well and you had to have it attached to that piece of paper that got printed out from that report and it had to go into the managers box every night.Jonathan:That was the first time I ever encountered something like this where you'd have two managers and they'd enter in an adjustment in a different way. Eventually one of those managers got in trouble because they weren't doing it the way that it needed to be done in order for the register at the end of the night to be accurately counting everything whenever it did the month end. It was one of those things where it worked for the day, but eventually it messed something up in the calculations down the road that that person didn't see until the manager was trying to do the month end closes and things like that.Jonathan:I tell people, one of the best things you can have in your small practice, because let's face it, a lot of people can't do segregation of duties. There's two people working in the front office and one of those might be the dentist in some of our practices. There's not much that they can do so what they do is it all gets housed under one persons hat. End of day process is really important and one of the things we tell the dentist they need to do everyday, or that we've heard from practice management consultants that are office people, have said that, "Have the dentist look at their day report everyday. Their day sheet and look at literally everything that came through the practice just to make sure that it makes sense."Jonathan:One of the things they said is to make sure that there's no adjustments to any patient accounts. There shouldn't be adjustments or deletions from patient accounts because if they're doing that then they've likely done something incorrectly. The way that it was explained to me, and again it depends on how your practice management softwares set up or whatever it is, is that there should be credits to accounts or there should be charges to accounts and then there should be write offs to accounts. There really shouldn't be adjustments to services after they've already been done unless there's a very valid reason. For example, "We accidentally billed this person for porcelain crown when it was a gold crown, so we had to take the porcelain crown off and add the gold crown charge in."Jonathan:There has to be a very specific reason, there should be an indication by each of those things done in that day sheet that you get that is a part of this. This is one of the things I also heard that you do whenever you're in a larger practice as well, if you're an associate for a larger practice you should be looking at your day sheet to make sure that you got credit for everything that you did that day. You didn't get put to the wrong provider, or you didn't... if you did something it actually got put onto the fee schedule so you actually got paid for it, so that the charge went to the patient account.Jonathan:That's something that I was told needs to be done on a daily basis as a part of that day end close process. That's one thing is the day sheet. The other thing is from the end of the day close, you should have what I mentioned for the video store rental place, you should have something from the practice management software saying, "We had this much in cash come in today, we had this much in checks come in today, we had this much in credit cards come in today." That should be tied together and there should be source documents there. There should be things showing you that those numbers are actually what happened.Jonathan:It gets a little bit complex in dental because you have all these insurance payments come in through electronic transactions. We get a letter in saying, "Hey, we're going to deposit this money into your account on the 24th of the month," and then it does get deposited on the 24th but it doesn't hit your bank account until the 25th. It's kind of hard to see how that happens because you enter it, you get that letter in a week in advance so the person in the front might be entering that notice into the system the week of when they get the letter, rather than the day it went into the account or even the day that it registered in the account.Jonathan:There's some complexities that can happen right there. Another really, really good reason to have a really good office manager type consultant, a person that we recommend a lot is Sandy Pardue, she's out of Louisiana. She's really, really great. There's also other programs out there that can help you with this if you're not familiar with how to do this. There are people that can help with this type of process and get this really set up strong for your office. Really important to have that. Really important to have that. That is not something that our office does. We are not practice management consultants.Jonathan:If you tell us what is happening in terms of the flow of the accounting dollars and cents that are coming into your office everyday, we can give you just a general understanding if we think that that's... where your areas of risk might be but that's really more of an informal feedback discussion between us than being a part of the service that we get paid for from our role as a CPA.Joseph:Interestingly enough, I'm sure that you get this all the time on sales calls but CPA's, we generally don't catch fraud. It's not something that's really a part of what it is that we do. I think the number one way that fraud is caught is by accident and not by something else. What are your thoughts Jonathon? As you get a chance to explain to clients what our role as CPA's is and fraud, what's a message that you're telling them as you kind of get that question, "Oh you guys are going to audit my books and catch fraud, right?" What's your message and what's your thoughts on the CPA's role in fraud?Jonathan:It's a really common misconception and I know that there are people out there that probably propagate that misconception in terms of CPA's that will say, "Oh yeah, we're going to catch that." The AICPA, the American Institute of Certified Public Accountants which for the dentists listening, that is like the American Dental Association for you guys. AICPA is the ADA for CPA's basically. The AICPA is very, very specific in how we as CPA's are to view ourselves in terms of audit, or in terms of fraud. That is basically to say that we're not here to catch fraud, that's not really our job. There are people that are CPA's that try to catch fraud, or to even be slightly more specific, they help track down how fraud was occurred after it's been discovered. Those are called forensic accountants.Jonathan:In general, fraudulent activity, there are very few services that CPA's offer that are actually designed to catch fraud. The most in depth service that CPA's offer small business, it's called an audit. There's actually a prescribed engagement called an audit under the AICPA guidelines and that audit even in that, it states in the engagement letter, or in the opinion letter that our services, even if we're doing an audit which is the most in depth thing, they're going to go top to bottom on your internal controls, and your processes and things like that. That audit will even say, "This is not meant to catch fraud." It's really just more to view how strong your internal controls are that could potentially lead to fraud.Jonathan:If they're very weak or if they're very strong, and as well as to give you an overall understanding of how your business operations are running from a business standpoint. That's the purpose of an audit. Even in the most in depth engagement, under the AICPA guidelines, it's still not designed to catch fraud. A CPA that's engaged with you to help with your tax compliance, tax planning, tax rejections, accounting services, management reports, things like that, those services are far, far, far, far less in depth than an audit would be. They are definitely not designed to catch fraud as well.Jonathan:The way that I tell people is that, "Has our firm caught fraud before? Yes, we have." We've seen credit card payments go into vendors that didn't exist. Someone had not in the office, gotten credit card information, was paying for stuff. We've seen... you and I were talking about this before, we had a client just this last weekend had a check that was written from their... this office was in California and the check was cashed in Florida with a different check number, different everything, it just happened to have their routing and account number on it. It's a $20,000 check that got cashed all the way across the country, it was just somebody had fraudulently found their information and put it down and made a fake check, and cashed this check for $20,000.Jonathan:That would be an example of something that our services are not designed to catch a fraud. One of the things that we do, is we ask our clients if we see a transaction that we don't know who the vendor is or who the payee is say, "Hey, what is this $20,000 for?" That would be an example of something that we would... I can't say that we would catch that as being fraud because what could have happened is we could ask the client, "Hey, who is Shelly Franklin and why did you write her a $20,000 check?" If for whatever reason the client had a mental lapse and just never replied to the email or said, "That was for equipment," maybe they paid Henry Shrine $20,000 and they just didn't connect the dots of being two different vendor names, then we would never know. That wouldn't change.Jonathan:That's a big example. $20,000 is a big number amount. What if it had been a $50 check? What if it had been an $80 check or something, a much smaller amount? The way our service is designed, if we don't know who the vendor is and there's no memo, there's nothing in the memo saying what it was for, then even on a smaller item like that we would ask the client who the vendor was and what the purpose was, but I know there's a lot of CPA firms out there that would just be like, "We'll just put that to contract labor. We'll put it to patient refunds," or something like that and just be done with it.Jonathan:Ours is specifically designed to ask that question the way that we do our stuff, but it's not designed to catch fraud, it's designed for us to ask questions about things that we aren't aware of. None of our services are designed to catch fraud, but it doesn't hurt to have somebody that is really familiar with the dental industry to know who the vendors are, to know, "Hey, Align Technology is a lab and A-L-I-G-N-E is not that same company." We need to make sure if a check gets written to A-L-I-G-N-E that we're going to ask, "Who is this person? Who is this vendor?" So you have that second set of eyes just kind of looking over those types of things.Jonathan:We do help. I interviewed multiple years back, and I've had dinner with him, really nice guy David Harris, he owns a company called Prosperident, it's the number one company in probably the world in finding embezzlement inside of dental practices. They help catch hundreds of people a year that have embezzled in dental practices, they're really, really good. He's a CPA, he's a CFE, he's all these things. He has way more letters behind his name then I'd ever care to have. I asked him I was like, "Hey, how can..." this was whenever we were starting the company I was like, "How can we help with this process of combating embezzlement in our practices?"Jonathan:He said, "Jonathon, we help out hundreds of practices a year catch embezzlement or to put these people behind bars if we can, or make them pay. Maybe one percent of the people that we find, the CPA ever even caught a sniffle of what they were doing." He said, "It's just because the services are not designed that way." It's a big misconception out there guys, but I want you to be certain to understand that just because you have a dental CPA does not mean you're fraud proof or you are embezzlement proof. It could mean that you have a little bit of help in someone else kind of keeping an eye on things for you, but at the end of the day, like Joseph had illustrated saying, "Hey, they used the company credit card for gas in the boat rather than gas in the car," if we asked the employee, "Usually it's a $30 gas charge, this time it was a $60 gas charge." And they say, "It was because I usually fill up when I'm at a half tank and this time I filled up... gas was expensive this week." Or, "Yeah, I ended up buying some stuff in the store," or something like that.Jonathan:We're not going to be able to tell if they're lying or not. We weren't' there. We're not going to go and put a dipstick into their gas tank and make sure that they're telling the truth about how much gas they got. You wouldn't want us to do that type of thing either because it would take us so much time you'd be paying us so much money to do that type of work that it would be a negative value consequence to you. It'd be a negative return on your dollars for doing that.Jonathan:To kind of recap that, we try to keep the episodes to 30 minutes length, the problem is a lot of dentists will get embezzlement done in some way. It occurs because of the triangle of fraud which was opportunity... tell me what they were. Opportunity...Joseph:Opportunity's one, incentive is one, like I'm incentivized to create fraudulent transactions, and then rational. "Poor little old me, I don't make enough money. I'm trying to feed my babies, I've got whatever reason, I'm trying to feed my cats. I don't have enough money because this penny pinching dentist doesn't pay me enough money." So the rational. Opportunity, incentive, and rational. The fraud triangle.Jonathan:Yeah, exactly. Those are the things you have to be watching out for. Your CPA can be helpful in this but they're not designed to be the person protecting you bar none from embezzlement. The only person who's going to be able to do that at the end of the day is going to be your internal controls in your practice, and yourself as the business owner. You're going to have to keep an open eye on what's happening. I don't want anybody out there to all the sudden start thinking that the girl in the front is this international person of mystery that's a spy that's going to be stealing all of your money. The way that you have to go about this is you need to have a lot of trust in the people that you hire, or else you hopefully wouldn't have hired them in the first place. You've got to have verification. You've got to have some tests that you'll put into place over time. Make sure that you have a super solid office set up to where you have a solid close. Make sure that you have a way that you're processing your payments to your vendors in a smart way.Jonathan:Don't give the person who's writing the checks a stamp to write your checks with. Don't...[crosstalk 00:34:58]Joseph:Signature stamps.Jonathan:Yeah. Exactly.Joseph:No, don't do that.Jonathan:Don't do that. Make sure that the person who's receiving the inventory is tying those inventories to... or having whatever's coming in also be verified so that you're getting what you're supposed to be getting, you're getting what you paid for. Make sure that your day sheets don't have too many adjustments on them. If they do have adjustments make sure they're totally verified. Make sure that you have a solid deposit set up going. There's a lot of things that you've got to have, make sure they're solid and strong and then the most important thing probably I would say to do at the end of all that is to randomly test those systems.Jonathan:Test them once a quarter will probably be fine, just pick five transactions to randomly test once a quarter, and you will probably be fine. Then outside of that look for weird behaviors from your employees. One of the more common ones that people talk about is there's that office manager that just they do everything, without them the system would fall over. Even the dentist doesn't know what she does. She's always the first one there and she's always the last one to leave, she never takes a vacation. If she does, she's really, really anxious about who's doing what in the office. That's kind of the tell tale sign of someone who has opportunity because they're the only person who knows what's going on. Doesn't mean that they're going to do it, but that is kind of the tell tale sign.Jonathan:Also, look at spending patterns, if you're paying your office manager $40, 50, 60,000 a year, and they always have a new vehicle and maybe they don't have a spouse or something like that, keep your eyes open on that. And keep an eye on your numbers, make sure that your ratios make sense. If they don't sometimes that can lead to it. This has been the episode on fraud, opportunities, how the CPA helps you and the misconceptions surrounding that, and a whole lot of information in the 36 minutes.Jonathan:Joseph, is there anything else that you wanted to state in terms of this topic?Joseph:Don't let your deposits have cash back on them. That's another one. That's a pretty simple step that you can take at the bank, that's one of the things I tell brand new practice owners. If you're not going to be the one taking the deposit to the bank, don't allow it to have cash back. "Oh, $10,000 deposits worth of checks and I get $8,000 back in cash." That's one thing I meant to mention earlier that I didn't. No cash back on deposits, set your accounts up that way.Jonathan:That's a good one. Yeah, that's a good one. Just as a quick story time in this one, I had an attorney call me and he was like, "Hey, we have a client that..." their controller was writing hot checks or something like that, the person that was inside of the business and they were doing something similar to that. They were like, "The CPA didn't catch it. The business owner took them 12 months to figure it out and the person who was doing it was sending the money overseas." The person ended up leaving the country before they realized what had happened.Jonathan:That's a really good example of after doing all the recording and stuff, there's also that step of getting it to the bank. That's definitely a real thing. Anyway, all right guys, we will see you next time on the Tooth and Coin podcast. This has been one about fraud, if you have any stories about fraud or any types of interesting situations that have happened with that, make sure to share it inside of the Facebook group and to share it with the community. We'd love to be able to hear more about it. We will see you guys next time.Joseph:Bye guys.Jonathan:That's it for today guys, I hope you enjoyed this episode of the Tooth and Coin podcast. If you are going to be a practice owner or a new practice owner and you're interested in CPA services, head on over to toothandcoin.com where you can check out more about our CPA services. We help out around 250 offices around the country and we'd love to be able to have the discussion about how we can help your new practice. We do specialize in new practice owners, so people who are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or has become an owner in the past five years. That is our specialty.Jonathan:I would love to be able to talk to you about how we could help you in your services with your tax and accounting services. And if you enjoyed today's episode, again go to the Facebook group. Talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the long term.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces. T-O-O-T-H-A-N-D-C-O-I-N to 33444, reply with your email address, we'll send you instructions to the Facebook group, we'll send you the resources when they're available, and we will see you next week. 

Your doctor will never be able to care more about the well being of your family than they do for their own. Your CPA cannot care more about your tax situation than you. The police will not care as much as you do about the safety of your family. The same goes for your financial planner or attorney. I'm not saying that this is a license for your advisors to be lazy. You need to take an active role in the process in order to keep your priorities top of mind for your team. Thanks to the death of private pensions, the devaluation of Social Security benefits and other undeniable retirement factors such as inflation and increased taxes, America is now in a retirement income crisis. Kraig Strom, the host of Personal Pension Radio, is focused on helping you pack your bags for both halves of the retirement journey.  Kraig's mission is help you build & protect your wealth and lifestyle today and generationally. Along the way, Kraig is ready to assist with all matters related to your financial wellbeing as well as your business and family legal needs.  Optimizing Retirement income and protecting your legacy does not happen with a product. You must have an integrated approach. DISCLOSURE:  KRAIG IS THE INCOME ENGINEER BUT HE IS NOT AN ATTORNEY OR A CPA. KRAIG STROM IS A CERTIFIED FINANCIAL PLANNER PROFESSIONAL AND A PARALEGAL. PLEASE DO NOT CONSIDER THINGS ON THIS SHOW AS ADVICE. PLEASE SPEAK WITH A QUALIFIED CERTIFIED FINANCIAL PLANNER OR LEGAL PROFESSIONAL BEFORE MAKING ANY FINANCIAL or LEGAL DECISIONS.

Today, I am so excited to welcome Tom Wheelwright! Tom is known as a tax and wealth expert, he is a CPA, and the CEO of WealthAbility®. He is the Best-Selling Author of Tax-Free Wealth (part of the Rich Dad Advisors Series). Tom is a speaker, entrepreneur, and host of two popular podcasts: The WealthAbility™ Show and The WealthAbility® for CPAs Show. He is a contributor to Entrepreneur magazine, and his work has been seen in Forbes, The Wall Street Journal, The Washington Post, FOX and Friends, and many other media outlets. We begin this episode, as we often do, with Tom's background. Tom began his career doing bookkeeping for his father's company. After getting his master's of Professional Accounting degree from the University of Texas, he managed and led the professional training for thousands of CPAs at Ernst & Young's National Tax Department in Washington, D.C. He was an in-house tax advisor for Pinnacle West Capital Corporation, at the time a Fortune 1000 company and he also served as an adjunct professor in the Masters of Tax program at Arizona State University for 14 years, where he created the course for teaching multi-state tax planning techniques. Tom now teaches the Rich Dad Education Advanced Tax and Asset Protection class and he is also currently building a network of CPA firms around the world in order to serve more people. We then talk about the importance of planning and thinking ahead when it comes to taxes. Having these discussions with your CPA early on in the tax year helps you to prepare properly. As a successful business owner, you need to know your numbers every single day. And when you know where you stand, it is much easier to plan out your taxes. We briefly touch on the differences between bookkeepers and CPAs. According to Tom, your bookkeeper is there to provide accurate records that help you make right decisions. Your CPA is there to analyze those records. The role of your bookkeeper is to keep you accountable, and it is that accountability that creates profitability. Tom then talks about buying and selling CPA firms, as well as creating them from scratch. He walks us through the process of turning around a CPA firm after the purchase. For Tom, it was all about building appropriate systems. For example, very few CPAs have a system for meeting with clients: when, how often, what is the goal, etc. Tom believes that systems are what creates value in a business, that they are the primary asset of the business. We then move on to talking about Tom's partnership with Robert Kiyosaki. The two met when Tom bought a CPA firm that had Robert as one of the clients. This just proves that you never know where your contacts can lead you. Tom goes into detail explaining how all the pieces came together at the right time and led to him becoming Robert's tax advisor. We then discuss the current political situation. We talk about how political changes affect us and what should we know from a small-business standpoint. Tom's estimate is that the taxes will probably go up in the next four years. The incentives will probably shift to clean, renewable energy. From a real-estate point of view, if you have a real estate with solar production or hydroelectric production, that will be a great source of cash-flow. These changes will require an adjustment to how we think when it comes to real estate. Lastly, we dive into the stimulus bill. Tom takes us through some of the most important parts of the bill as far as taxes are concerned: restaurant business meals (both takeout and dine-in) are 100% deductible for the next two years, extending the universal charitable deduction through 2021, and qualifying for PPP loans. Tom then goes on to explain PPP loans even further in regards to the new act. You do not want to miss this amazing and advice-packed episode of the Just Start Real Estate Podcast with the legendary tax expert, Tom Wheelwright! Notable Quotes: “One of the mistakes that new entrepreneurs, new investors get into is that they are catching up on their taxes, instead of staying ahead.” Tom Wheelwright “Good tax records and good tax practices are also good business practices.” Tom Wheelwright “If you are running a good, tight business and you know your numbers, tax season won't be so stressful because you will have the information available.” Mike Simmons “Your bookkeeper is there to create accuracy, accurate records that you can make good decisions from and your CPA should be there to analyze those records.” Tom Wheelwright “If you don't have the documentation, you don't get to deduct that expense.” Tom Wheelwright “What a system does is actually create value. Because if you don't have a system, really all you are doing is constantly selling. If you constantly have to sell, you don't really have a business, you have a job as a salesman. ” Tom Wheelwright “You can sell a business, but a business has to have assets and primary assets are going to be the systems of the business” Tom Wheelwright “A sellable business is also a well-run business.” Mike Simmons “Once you find the formula that you can repeat over and over again, all of a sudden business is easy. When you are making a new decision every day, that makes business hard.” Tom Wheelwright “I happen to believe that business produces income; workers are necessary but they are not the reason that business survives. The business survives because of the assets in the business.” Tom Wheelwright “Never turn down free money.” Tom Wheelwright “A tax strategy should be a long-term tax strategy.” Tom Wheelwright Links: Tom's Website Tom on Facebook Tom on LinkedIn WealthAbility Website WealthAbility on Facebook WealthAbility on Twitter WealthAbility on Instagram WealthAbility on LinkedIn Mike's FREE Coaching 7 Figure Flipping Return on Investments Just Start Real Estate JSRE on Facebook Mike on Facebook Mike on Instagram Mike on LinkedIn Mike on Twitter Level Jumping: How I Grew My Business to Over $1 Million in Profits in 12 Months

Great interview with Brooks O'Hearn Real Estate Investor, Real Estate Agent and Personal Coach Played the game "CashFlow" while on family vacations. His parents bought Rich Dad Poor Dad for the kids friends. He decided to get his education in real life real estate instead of traditional college. Started his real estate endeavors by coaching and then started investing with his family. Brooks decided to get his real estate license to gain more exposure to real estate and gain multiple streams of income. Brooks has done some wholesaling and mostly focused on fix and flips. Now he has been expanding into commercial properties using the BRRR method. He has been raising cash to take advantage of potential market changes and being more conservative with the ever changing real estate landscape. He has been focused on shorter hold times to reduce exposure. Keeps his eye on the political landscape. Coaching - Internet and lead generation, social media branding and having the right mindset to think for yourself. He helps remove the barriers that impede your growth. Secrets to his Success Having his real estate license opens doors through access to the MLS, networking with other realtors, gives you control over the buy/sale of your own property and adds credibility to his business. He uses a small community bank to reduce the season period from the conservative 6 months down to around 3 months, after getting tenants in the place. Get multiple bids to get the best price/quality on your project. Get a good team that consists of: 1. Buyers 2. Sellers. 3. Lenders. 4. Contractors. Contractors seem to be fluid, so always have good connections through having multiple bids. Your CPA is worth every penny you pay them. Lead generation, digital marketing, communication and negotiation. He is always learning and taking in new information and see how it can apply to what he is doing. He has a desire to help people succeed. Operates out of an abundance mindset. His favorite books are: He reads How to win friends friends and influence people by Dale Carnegie once a year. The 5 love languages - Applies to communication The 10x rule by Grant Cardone Crushing it with Gary Vaynerchuk. He likes Audio books, Video and Podcasts and loves to golf. Contact info: Brooks OHearn - On all social media sites.

Hello Private Lender Nation and welcome to episode 117 of the Private Lender Podcast and the first episode of the year 2021. I'm your host, Keith Baker and I'd like to thank you for sharing your time with me today, and I hope my voice finds you doing more than well.  If you're looking for practical tips and advice on Private Lending and how to keep your money safe then you are in the right place. But if you want to learn from my mistakes so you can avoid them, well then pull up a chair and pour yourself a drink my friend, because this podcast is just for you! This will be the first episode of 2021, and probably one of the least controversial. But before I say something to get me canceled, I would like to take a minute for some housekeeping: https://www.facebook.com/groups/674936429994760 (Private Lender Podcast Facebook Group) If you like the idea of private lending but find yourself a little hesitant to begin then click HERE to get your feet wet with the help of a professional Hard Money and Mortgage lender. www.privatelenderpodcast.com/ink My friend Paul Lamnatos is ready to answer any questions you may have and help you get started on your Private Lending journey. Click the link on the webpage and provide your email address and Paul will reach out to confirm a time when you can speak to him about Ink's lending criteria, their loan process, and how you can begin profiting from loans on properties located in the greater Houston area – in a very lender-friendly state!  2020 is now over, and we Private Lenders have some of our own housekeeping to perform.   The 1098 Even though the private loans I speak about are business loans, they are still considered a mortgage. Thus the lender is required to file IRS form 1098 and provide it to the borrower, indicating the amount of interest paid on the note over the course of the previous year.  ·        $600 or more of interest collected (including points charged). ·        Remember, points count towards the Usury limit in your state. 18% in TX ·        Must file and provide to the borrower no later than 31 January 2021 If you have your private loan serviced, which I strongly recommend you do, the note servicer/escrow company with do this for you and mail and/or electronically deliver the forms to you borrower. I personally have one legacy loan with my partner Landon that I didn't demand the use of an escrow/servicing company. Here are some options if you don't use a note servicer/escrow company: ·        Your CPA ·        Accounting software ·        Quickbooks or TurboTax ·        Online services I just found 8 websites from a Google search (excluding Quickbooks and TurboTax) The second order of housekeeping is the Fair Market Valuation for any investments, including notes, private entities, and real estate in your Self-Directed IRA.   1. Real Estate – Appraisal, Broker's Price Opinion (BPO), County Appraisal Value. 2. Note – If amortized, attach the amortization schedule. If interest only, simply state the current principal value in the “EOY 2020 Market Value” box and that the note is interest only in the “Comments” area. 3. Private Entity – A letter from a managing member on letterhead stating the value or a balance sheet reflecting the value of the partner's value. 4. Personal Property – Third-party valuation from a qualified professional. In my case, I logged on and was able to quickly provide the fair market value of my loans and my investments in the commercial and multi-family deals I recently invested in.  Notes/Private Loans The only loan that I don't use a note...

How do you know if an LLC is right for your business? I like to call an LLC a chameleon business entity. Because the IRS doesn't actually recognize the LLC structure, LLCs can be taxed as any one of the business types we discussed over the last few episodes. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/choosing-an-llc-6-things-to-consider/ --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

How do you know if a C corporation is right for your business? A C Corporation is the default corporation type. Many people consider C Corporations to be for big companies, but they can be beneficial for smaller businesses too. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/choosing-a-c-corp-6-things-to-consider/ --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

| Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/choosing-an-s-corp-6-things-to-consider/ --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

How do you know if a partnership is right for your business? A partnership is a default business entity - when more than one one person create a for-profit business together the business is automatically a partnership unless and until the owners decide to create a different business entity. However, it's still important to understand how choosing or defaulting to a partnership can affect your business. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/choosing-a-partnership-6-things-to-consider/ --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Building The Best TeamReal estate investing is a team sport. You don't have to look far to see that. Take buying an investment property for example. We'll walk step by step through the process and look at the team it requires to be a successful real estate investor. You, the investor, look for an investment property to purchase. Likely, that search isn't solo. You might enlist the help of a realtor to find on-market deals, or build a direct-to-seller campaign using the help of virtual assistants, local support, and many other creative ways to find those elusive off-market deals. Once you've found the perfect deal, the next step is to get it under contract. Your realtor can help with this process, or if you're more experienced you can navigate it on your own. Using your state's real estate commission approved real estate contract is usually a good approach. Next, it's time to get the financing process started. You'll need a good lender who is experienced with investment property loans. Your lender will be able to help you apply and qualify for a loan that fits your investment strategy. They will also help and guide you through the process of getting to the closing table with the title company, and preparing the loan documents needed to close. Behind the scenes, your title company is doing the heavy lifting, making sure the property has a clear title with no leans, encumbrances, etc. Your title company handles the transfer of the funds, working with your lender to transfer the funds to the seller, only after all the appropriate paperwork has been signed by both the buyer and seller. Finally, you'll close on the property, and this is just the beginning. Now you need a solid team to operate the property. You will typically enlist the help of a property manager unless you decide to self manage the property. The property manager will take care of the day-to-day activities from showing and leasing, to collecting rent, handling maintenance requests, and creating monthly P&L reports. Keeping an accurate record of your finances is crucial. These records will feed into your tax returns and future loan applications. Hiring a bookkeeper can be a huge help in this area. If you're just starting out, you may manage the bookkeeping on your own. I've found https://www.stessa.com/ (Stessa) to be a great asset management software that helps me manage the finances in my portfolio. Taxes are one of the five ways you're paid as a real estate investor, so it's important to make sure you're getting the most out of it as you can. Hiring a good CPA to handle your taxes is critical. Unless you're a CPA experienced with real estate investments, I suggest you get a good CPA on your team. They'll be worth their weight in gold, not to mention saving you a lot of liability when you file your taxes on your own. Your CPA will be able to help maximize your deductions, consult on different tax saving strategies, and so much more. Definitely hire a good CPA, and you won't regret it. Investing in real estate will sometimes require you to enlist legal assistance. From dealing with tenant/landlord suits to asset protection and corporate setup, specialized attorneys can be an asset on your team. There are many different areas of law, and finding an attorney who specialized in a specific area you need is important. Ask around for references and find an attorney who will fit well on your team when you need them. You can scale this team up or down to meet your needs. Each one of these team members will serve an important role on your team. But fortunately for you, this doesn't mean you have to hire a team of a dozen people full time sitting in your office. You can hire each of these people for a specific task, kind of like a consultant. Other team members you may consider, depending on your specific business, are: Partners Investors Syndication attorney Cost segregation consultant Property tax consultant Go Far Together“If you want to go...

How do you know if a sole proprietorship is right for your business? Honestly, most sole proprietorships are probably sole proprietorships by default. If you start a business as the sole owner and you don't form a formal business with the state, your business is a sole proprietorship. So even if you don't consciously choose a sole proprietorship, you still choose a sole proprietorship - you get me? | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/choosing-a-sole-proprietorship-6-things-to-consider/ --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

You hear it all of the time. "Form an LLC so you can get the tax benefits." But... what ARE the tax benefits?? The answer may actually surprise you. In this episode I explain how LLCs are taxed on federal tax returns. Visit the show notes to download my FREE LLC Tax Treatment Guide. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/what-are-the-tax-benefits-of-an-llc --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Quick question. Have you slid into the inbox of a tax pro and asked them to tell you whether you should create an LLC or an S-Corp for you new business? If so, you might have gotten answers like "it's hard to say", "it depends", or "book a consultation". It's probably the number one "quick question" I get. So today I'm sharing with you six things to consider when choosing a business entity. Writing down your thoughts to these 6 categories will make the conversation with a tax professional and lawyer much more focused and can help you easily weed out the structures that won't work for you. Make sure you check out the show notes to download your FREE workbook that you can use as you follow along with this episode. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/6-things-to-consider-when-choosing-a-business-entity --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

On August 8, 2020 President Trump signed an executive order and three executive memos related to Coronavirus Relief. One of the memos provided for a deferral of payroll taxes. In this episode, I discuss what I know so far about the deferral and how it can affect you as an employee, employer, or self employed taxpayer. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

My fellow tax pros and I get this question a lot: Should I form my business in Delaware? Nevada? In this episode, I talk about some of the reasons that people form their business out of state. I am not a lawyer, so please speak to your lawyer about all of the legal consequences of forming your business in another state before you make a decision. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/should-you-form-your-business-in-another-state/ --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

When you hire your kids in your business, what they do can help justify the wages that you pay them. If you hire your child to sweep floors, you probably can't justify paying them same as you would if you hired them to help source your products or find your next big idea. In this episode I talk about 5 jobs that you could pay your child to do in your business, which could be substantial enough to justify decent wages. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/5-jobs-you-can-hire-your-kids-to-do/ --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Your Financial Planner can give you investment strategies.  Your CPA can give you tax advice. But when your CPA is also a financial planner, you get Chris Fehr at Freedom Financial Group. Hear why Chris not only finds great results, but less taxes for his clients. See omnystudio.com/listener for privacy information.

Tax savings are great but they aren't the only benefit you and your kids will get when your hire them in your business. Today we discuss 4 non-tax benefits of hiring your kids in your business. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find episode show notes at: https://www.themillennialtaxpert.com/4-non-tax-benefits-of-hiring-your-children/ --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Hiring your children can definitely save you money but you want to make sure you do it correctly. In this episode, I discuss three mistakes that you should avoid when hiring your children. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find show notes at www.themillennialtaxpert.com/3-mistakes-to-avoid-when-hiring-your-children --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Thinking of hiring your children in your business? Here's know you need to know FIRST. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. Find show notes at www.themillennialtaxpert.com/what-you-need-to-know-before-hiring-your-children --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Author of "The Perfect Investment" we get to talk to Paul Moore this week. Paul specializes in the Commerical Real Estate specifically apartments buildings and self storage. Late spring 2020 Pauls book on self storage will be released through Bigger Pockets publishing. We talk a little about Pauls book where you can learn the secrets used by the super-wealthy to attain and maintain their wealth over generations (and why you're not invited to their party), why multifamily investing scored 460 percent better than the stock market on a key risk vs. reward ratio, why investing in flips, single family rentals, and small apartments is a not a path to multi-generational wealth for the vast majority of people, why US demographics, the economy, and the fallout from the last recession have caused the perfect storm for the success of this asset class and how multifamily investors "partner" with the IRS to reap significant profits while paying virtually no taxes (Your CPA may not know these tax codes, but you need to!). Click the link here to order "The Perfect investment": https://www.amazon.com/Perfect-Investment-Enduring-Historic-Multifamily/dp/153700395X/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1585434224&sr=8-1 Stay up to date with podcast episodes and everything real estate by following myself, Danté Belmonte on my instagram @dantebelmonte. I hope you enjoyed this episode and were able to take away some helpful information for your journey in Real Estate Investing!

One year ago we listed a business that created a massive amount of activity, garnering ten offers, many above asking price. As part of our incredible exit series, today we welcome a seller who has had some time to reflect on all the things he did right in his sale and share what he has been up to since. Paul Anderson started his career as an accountant, taking the safe path and spending ten years in corporate America. An increasing lack of passion led him to start to build his own lifeboat. He avidly studied Amazon FBA and learned by following experts in the e-commerce space. Although his first launch failed he carried on, honing his awareness of product opportunities out there and eventually he hit it big. Today Paul delves into the building of the business, the pillars of his success, and the components of his path to becoming an exitpreneur. Episode Highlights: Paul's first product's failure to launch and what he learned. How he sourced the second product and what happened in the last quarter of 2016. Funding subsequent stock and the challenges of inventory planning. How Paul stands on all four pillars of a successfully built business as well as that invisible fifth pillar. The scheduling and nitty gritty of the sale process. How the final buyer was chosen and the deciding factors for Paul. Why the highest bidder does not always win. The toughest challenges of running the business. Why Paul decided to sell. What he has been doing since the sale. Tips for building a successful content website. Transcription: Mark: So almost one year ago to the date of the recording of this episode of the podcast I was on a car ride with Joe; you Joe from where was it? It was from Dallas down to Houston and then Houston back up to Dallas. We were meeting with a good friend of ours that lived in Houston and while we were in that car ride you had launched a new listing that went absolutely berserk. And I've referenced this; I think we've actually talked about this on the podcast a few times, I've referenced this deal because it was one of these outlier deals that seem to check every single box and the result was just a massive amount of requests for phone calls and I believe 10 offers within a very short amount of time. And it's been a year since that launched and obviously, the deal closed which we're super happy about but now you finally get to have the seller on the podcast talking about all the things that he did right. Joe: Yeah it's a great time because it's a year out so he gets to look back. And over the years of doing this podcast the people listening have heard us talk about the four pillars; risk, growth, transferability, and documentation and someone might go yeah ok whatever, the reality is that they matter. Paul Anderson sold his business; 10 offers, he checked off every one of these pillars and the six little subtitles under each pillar and then the fifth one which I know Mark there's no fifth pillar, but the fifth one is the man or person or entrepreneur behind the business. Paul being a former CPA turned entrepreneur who outsourced his bookkeeping to a bookkeeper is just a super likable guy, stay at home dad, buttoned up in so many different ways. The end result is I had to clear his schedule; he basically had three conference calls with highly qualified buyers for five days in a row. He was exhausted from it because each one was… Joe: So you had 15 conference calls then. Paul: 15 conference calls. Joe: And I remember again we were in the car going back up to Dallas and you were on the phone pretty much constantly telling people okay let me see if I can arrange a time for you. So there was a lot more requests for conference calls on this deal. Paul: A lot more requests and we say we had 10 offers but finally a few people dropped out because they just didn't want to compete because they knew what it is going to be. And the funny thing is people get concerned about that and we always say right up front look don't get caught up in the hype of multiple offers, don't go beyond your comfort level, offer-wise. We want you to make an offer that works for you and hopefully will work for the seller as well because we want it to go all the way from letter of intent through to due diligence and that's exactly what we wound up with. And oddly enough Paul did not choose as we always say they don't necessarily choose the highest price. He didn't do that. He picked the offer that was best for him and I think it was somewhere $150,000 lower than the highest price. So we talked about a little bit of that process, what makes a good seller, a good buyer, and then we talked about what he's doing today which is really interesting as well so hopefully, everybody will enjoy this podcast. Joe: Absolutely. Paul: Let's go to it. Joe: Hey folks. Joe Valley here from the Quiet Light Podcast and today I have an Incredible Exits client on the phone with me. It's Paul Anderson. We sold Paul's business I think; when was it, Paul? Paul: March of last year, so a little under a year ago. Joe: Spring of 2019; so a little under a year ago. So we're going to talk about Paul's exit. We're going to talk about what Paul went through when he built the business, sold the business after he sold the business, and what he's doing now so we're going to get the full picture. Paul welcome to the Quiet Light Podcast. Paul: Thanks Joe, good to be here. Good to talk to you. Joe: So for the folks listening why don't you give a little bit of background on your professional pedigree and your entrepreneurial journey? Paul: Yeah, sure. So I actually studied accounting and followed that path. I was kind of one of those people that never really knew what I wanted to do. Like some people I think they're just like hey I want to be a TV news reporter or a journalist, I never really had that strong thing tapped me on the shoulder that said this is what you should do so I took a pretty safe practical path. I went into accounting and got my CPA. I spent about 10 years working in corporate America doing accounting and finance jobs and didn't really ever feel like that passion and eventually it started to kind of wear me down. I got to the point where I had to think of something else to do and try to build my own little lifeboat to escape from that because something inside me just didn't feel right anymore doing that. So that's kind of what led into starting a business. So that's in 2016. Somewhere; I don't even remember where I started to hear about Amazon FBA and I kind of consumed everything I could about it like podcasts, there's this guy Manny Coats inaudible[00:06:09.6] Helium10, he had a great podcast back then, Amazing Seller; there's all sorts of good stuff online about the model and that's kind of how it started and I started really small. We can get into it from there but that was kind of the first step, learning about it and seeing like oh I think I could do this. Joe: So you learned about it from podcasts; you didn't pay for a course or anything like that, you were absorbing free information from experts in the space. Paul: I never bought a single course it was all podcasts, Facebook groups, Reddit forums, and I was just… Joe: I love it. Paul: Yeah I can tell you about the first launch which was a total fail but that was like my training course like the very first launch because I learned. Joe: Failure is a great lesson. How much money did you pull together to launch the business and were you working at that point in the CPA business? Paul: Yeah I was still working. It was 2016, I put $5,000 in to do; most of it was an inventory buy so I was on Alibaba like at night trying to find my suppliers talking with China and I put in probably about 5,000 bucks to start on my first product. Joe: Okay. And you just mentioned Helium10; did you use Helium10 to help you find that first product? Paul: Yes. So it's funny like almost all the products I launched I've kind of like encountered in the real world somewhere and the product that turned out to be my big business was I kind of got onto it from a discussion with my parents. We're just having a casual discussion like you would have many times a day and they mentioned this particular thing and I would always in my iPhone put down; anything that seemed interesting I would just like log it in there and then I come back to it. So I had a list of 20 to 30 things going and I went back and started doing some research. I actually was using Jungle Scout back then and I switched over to Helium10 for everything now. Joe: Oh they're both great products; both of them. Manny and Greg have both been on the podcast; great guys. Paul: Yeah, for sure. So I kind of punched it in there and said like oh this looks like; the numbers look good and that's kind of how it started but it really was that conversation being like; I think if there's a lesson there it's being aware, we have so many kinds of filters and blinders on like if you really put yourself in the headspace of looking for opportunities you'd be surprised how many little things you read online or you hear about through friends like this is really popular; there's just all sorts of those little things that pop up that could turn out to be big businesses. Joe: So pay attention to your surroundings; the stuff that you use every day, emerging products in categories and niches and try to pay attention to and think is there an opportunity? Did you use any tools to see if a lot of people were selling in that particular category and that particular product? Paul: I mean Jungle Scout helps with that but mainly you can just go on and kind of assess like if page one everyone's got a thousand reviews and they're really well-known brands or something that's probably going to be a tough place to break into. Joe: Tough barrier; okay. So tell us about your first test, it was an epic fail? Paul: Yeah, so I was really pumped and thought like here it is, this is going to be like my ticket out of full-time work and it's going to be amazing and it was actually an accessory. Have you ever heard of pour-over coffee? Joe: Yeah. Paul: So that was kind of just bubbling up, seeming like oh this is really a trending product… Joe: Too much work; I never bought it because… Paul: Too much work, yeah, but there's a lot of people that are really into the craft obviously a coffee one and having some artisan experience. So I sourced these little wooden coffee stands that's basically used to make pour-over coffee. And it was kind of a cool thing but it turns out products made out of wood can crack and can break and have issues and I was not an expert at sourcing at that point in time so the long story short a lot of the products ended up cracking and breaking. And then once you start getting all these one-star reviews and returns; like my garage was full all around with carts of returned inventory and there wasn't that much demand I think. At the start, I was thinking oh you really got a niche down into this little tiny space and own that and there just wasn't quite enough demand in that space either. So I kind of learned to be a little smarter on sourcing and just to look for ways that things can go wrong inaudible[00:10:31.6] thing that's just so niche that like even if you execute and everything is great like you're going to be selling a couple of units a day. Joe: So how much money did you test and lose on that first product launch? Paul: So that was about 5,000 bucks in and I didn't take to bad a bee but I think I lost about a thousand dollars on it which isn't bad. Joe: Oh that's not bad. Paul: Yeah. Joe: Not enough to make you go away and say okay this didn't work I'm done; I'm going to go back to the corporate world. You got a taste for it and you said okay I just picked the wrong product. Paul: Exactly. And I mean I was still in the corporate world and like 5,000 bucks it's not like a lot of money at the time so it wasn't like I was; I'm like yeah whatever it doesn't matter. At that point, the stakes felt real and high. Joe: Yeah. Paul: Because it definitely was like I can see the power here on Amazon it's just like finding the right thing to really get this thing spinning. Joe: Okay. So you learned a lesson; you only lost 20% of your money but you get an excellent education from it better than any course you could have ever purchased. You went out there tried it, failed, learned, and didn't lose so much that you couldn't do it again. So you came up with another product niche and decided to go at it again? Paul: Exactly yes. So then I was actually going over to; are you familiar with the Canton Fair which is the big supplier…? Joe: Yeah. Paul: So I had a trip booked to go over there and kind of in-between going there… Joe: Just out of curiosity did you book it with a group or was it just you? Paul: Just me and my wife went over. Joe: Oh okay, because I was just talking to Athena from China Magic and they have a group of folks that go on a regular basis for those that are terrified to go alone. So you and your wife chose to book a flight to China and go to the Canton Fair alone. Paul: I loved it. It was really, really full out and I'm eager to go over there. Joe: Okay. Paul: I actually ended up finding my supplier on Alibaba before I went so I can't really say that the trip necessarily paid off in terms of like… Joe: Did you connect with him in person when you got to the Canton Fair? Paul: No because it was still too early and he was pretty far away from the Canton Fair. I think it helped me really see kind of like the culture of China and doing business with China and I think just a little savvier about how things work. So it was a great education for that and just like a lot of fun to check it out; I mean the place is just massive, like multiple football fields. Anything you want to ever source it would be out there so it was a super interesting spot. But anyway back to your second question so yes I stumbled upon this other product and started kind of the wheels turning in 2016 to source it. I got it on I think in the fall of 2016 and I remember that Q4 for Amazon or e-commerce is like the prime time and I remember just refreshing that seller app that Black Friday, Cyber Monday, like all through up until Christmas and it was just mind-blowing the sales that were coming in off this new product. Joe: What was it like your first day that you got a sale, how many sales did you have all together; do you remember? Paul: Oh I mean it started slow. The first thing was probably just two or three units. I mean it's really; it was in such a momentum game like when you have no momentum it's hard to keep momentum and then once you get this momentum going and the wheels start spinning it can blow your mind like the amount of sales that… Joe: And that actually blew our mind within the first month or in that first quarter like what did you wind up with on the biggest day within a couple of months of launching it in the Q4 of ‘16? Paul: I don't want to say maybe like $8,000 of sales there. Joe: Oh, wow. Paul: Something big like and then when you look at the profits from that it's like wow I made more money like on this one day than; and I had a pretty decent corporate job, I'm like this is crazy like the potential. So the hooks kind of got in me right there and then '16 was kind of just getting off the ground and then the next year is when the ball really started to roll. Joe: When you started to get revenue in the fourth quarter of 2016 and sales started to come in you had euphoria with the fact that you were getting that kind of revenue and making more money in one day than you made perhaps in a month in the corporate world but did you also have the fear of oh my God I'm going to run out of inventory? Paul: I did. Joe: Okay. Paul: Yeah, inventory is like not something glamorous to talk about and you don't really hear about it that much in podcasts or anything else but it's like running a physical products company doing an Amazon business like the inventory planning is so difficult because your sales can change on a dime. inaudible[00:15:20.7] your supplier 30 days early to make something and another 30 days to put them on a ship to get it over here. So you've got these difficult variables to manage that can leave you stocked out or even a little bit too much stuck so that's always a tough thing to manage. Joe: Awesome. I don't think I've ever met an Amazon seller or an e-commerce business person that's been growing rapidly that's not run out of inventory at one point or another. All right, so you started with $5,000, did a test, failed, how long between the first failed test and the second product that took off; how many months was it? Paul: That was about three months I think. Joe: Okay, and all the time you kept your day job which is fantastic. So you've got some revenue, you've got some money in the account that's transferred to your business account, at what point did you order more inventory with and did you just use that money or did you sit down and talk as a family and say okay this is a winner we need to take a home equity line of credit; how did you fund the rest of the inventory purchases? Paul: It was all really funded with profits. Joe: It was? Okay. Paul: Yeah, it was. Joe: And you didn't have to take any money out for living expenses because you had your day job so that's perfect. Paul: Yeah. If I wouldn't have my day job it would have made it much more difficult but luckily I had some steady income coming in on the day job and then I was able to just take the profits and reinvest them back in and just go from there. Joe: Fast forwarding you had an amazing 2017, an amazing 2018; strong year over year growth, like huge year over year growth. For those listening, Paul's business was listed again spring of 2019 and it's those perfect situation folks where we talk about the four pillars of a sellable business and that invisible fifth one which is the person behind the business and that's Paul. We have a 30-month-old Amazon business with an incredible brand that's growing rapidly year over year. The financials we're set up impeccably. Paul is a CPA but he did something incredible which was what? You outsourced the books to an e-commerce bookkeeper; brilliant by the way. So those of you that are out there saying oh I can do this I'm not going to pay a few hundred bucks to a bookkeeper we've got a CPA here that chose to outsource to an e-commerce bookkeeper because he can do better things than bookkeeping with his time like grow a multi-million dollar Amazon brand which is exactly what you did. Your business checks so many boxes. It was SBA eligible. You were the owner behind the business. You built trust. People believed in you. During the recorded video interview, you're the first person; and I keep asking people to do it now, you're the first person that ever sat in front of the camera, reached down picked up the product and demonstrated the product. You showed the new packaging that you had just done. It was beautiful and the end result was an overwhelming request to buy the business, conference calls where you had to clear your schedule for a week. I said Paul cancel everything, right? We had to clear it and we ended up with I think three calls with qualified buyers every day for five days. We wound up with 10 total offers. I think we were at; the top one was something like $150,000 over asking price. Paul: Yeah, I think that's right. Yeah. Joe: Yeah, and we say this all the time that it's not always the offer that comes in with the highest number, it's the right fit more than anything else. We had; of the 10 offers, I think we had maybe six that were SBA and four that were cash. You ended up choosing a cash buyer and not just because it was a cash buyer but also the person behind the business. We did video interviews between the buyer and seller. How much did that matter and how much of a difference did that make for you? Paul: The interviews mattered a ton. I mean that was the deciding factor because when I went into the process I just thought like well it's pretty simple, right? You take the highest number and the highest bidder wins but as you get into it and talk to different people it's like a huge diverse set of backgrounds that people are coming through Quiet Light looking to buy, right? Joe: Right. Paul: And some people I felt like wow I could just hand this to them and they could run with it immediately and do like as good or better a job with this than I ever could. And others are like hey I really like this person and their heart is in the right place but I feel like the transition might take a little bit longer and then what if somewhere they dropped the ball and things get sideways like I don't want that somehow to come back to me. I don't know if that's a rational way to think about it but if there was a lot of comfort like feeling this guy or these guys I feel like really got it, they get it, they know what to do, they will hit the ground running from day one so to me that mattered a whole lot. Joe: Yeah. And I think given the fact that we're in this remote world where your buyers and sellers are all over the world literally sometimes doing a video conference call for that initial call breaks the ice. You're not reading the client interview anymore, you're not just talking to somebody on the phone; you can see the whites of their eyes and anybody that wants to see Paul we're recording this both on Zoom with video and audio and it will be up on the YouTube page as well. He does not look like a buttoned-up CPA today and I was making fun of him when we first got on the call. You've always looked like that but today you know what you're a successful exitpreneur. You got the sweatshirt on, a little stubble, working from home; I love it. All right so I want to you ask a couple of things just for the audience purposes. Number one back to running the business what was the toughest challenge in running the business? Let's start with that. Go ahead. Paul: Yeah. I'd say even at the start this isn't even a tactical thing but the hardest thing was just getting the momentum going. Starting an Amazon business is not like hey I'm trying to create an electric car and beat Elon Musk but even me like I had a lot of doubts at the start like is this is going to work, am I going to lose all my money? All of these doubts kind of creep into your head so I remember really kind of struggling to pull the trigger in a way thinking like I just don't know is this supposed to be my pathway? So I think that was really hard to overcome and you just kind of keep going one foot in front of the other and once you get a little momentum it just like brings all this energy and life into you that you just feel so energized to just keep improving and add products and make your products better and make the packaging better. Getting that first momentum can feel elusive and challenging so I think that was like a big thing at the start. Joe: And you failed and then you stuck with it and then you succeeded. Paul: Yeah. And I was kind of at an inflection point like should I keep going or is this just not meant to be and then you know. Joe: This may be a dumb question but are you glad you kept going? Paul: I'm very glad. It changed my life that I kept going. I mean I'd still be sitting at a desk in corporate America right now I hadn't kept going and like we've got a three-year-old son at home like the physical time we will spend with him and then mentally my head is so much like the stress is away from me. So I was always stressed working in corporate America so it's been the biggest blessing ever to go out and do this. It's changed my whole family's life. Joe: Okay. So let me ask the question that all buyers ask, why did you sell the business? Paul: Yeah, it was a tough decision to sell because I was having so much fun running it. And I think the honest answer is the value of the business became such that it really could provide a lot of security for our family. And it felt like if I was 23 and single and didn't have kids I'll like alright instead of going for this I might have just keep on going and try to sell it for three times this or five times this or just keep going. But knowing Amazon can be volatile and like I had all my eggs in that basket so it just felt like the responsible thing is to take some chips off the table and let go of the business but it was really hard. Joe: The responsible thing; I like that, the responsible thing. Your CPA background is coming out now. That's good. Paul: Yeah. Joe: All right so what was the toughest part about going through the sales process and selling the business; what was the hardest part there? Paul: Picking a buyer was really tough. Joe: It's a good problem. That's a good problem to have. Paul: I mean just even knowing how to approach it and you really helped a ton Joe in that process. When it's your first time through and you already have kind of these emotions like you built this thing and now it's worth something that people want it, it's a weird feeling and like how to value it and how to find the right fit and thinking about SBA versus cash; there's just a lot of things that are spinning through your head at that time so I think just getting a clear head and trying to identify what the right fit was the toughest part. Joe: Okay. I think you again exception rather than really had 10 offers, I think maybe one or two might have come in slightly under asking price but the vast majority was above. I think 2019 the average offers that we had on any single listening was two and a half so you are five times that amount which is pretty exceptional. That goes to the brand that you built. It goes to the way that you set the business up with its own entity. You didn't come and go books. You're a CPA but you hired a professional bookkeeper. You instilled so much confidence in buyers. They clearly came out of the woodworks to buy your business. All right, the toughest part was choosing the buyer; that's amazing. It's not what I would've guessed you would have said. Sometimes it's due diligence but with you, it was choosing a buyer. All right so now there's life after the sale, you were in the corporate world working 40, 50 hours a week or sometimes more in tax season and then you're an entrepreneur working from home spending time with your son now what are you doing? You've sold the business nine months ago, what are you doing with your time? Paul: Yeah so it's been nice to have a little; in life usually you're just like chasing after the next thing and I've had just the time to step back and think really what I want to do and what I want my life to look like so it's been like a real luxury. So I'm going into; I'm building a website, it's called WealthFam.com. Joe: Fam like family? Okay. Paul: Yup like family. It's brand new but basically it sort of like combines my background and what I like to do. So it's all about building wealth; becoming financially independent, starting and running online businesses. Basically, it's how to be smarter with your money and use the money to help kind of enable the life that you want to live whether it's being with your kids or going on trips or whatever else. So it's a content site which is a super interesting thing. I thought a lot about going back and doing another Amazon business but I just didn't feel the same spark for like starting it and it takes a lot of energy and mental fortitude to take something from A to Z and you've got to really want it kind of every step of the way. So this just kind of really energized me and there's been some great stories like Ramon's story; you featured Ramon. It like blew my mind the… Joe: His content site, yeah. Paul: And that happened in the content space so that was really exciting to me. And on top of that I just like doing this stuff so it feels like the right sort of fit. Joe: So what kind of subjects are you going to cover on Wealth Fam? Paul: So it's broken down a couple of categories like making money, saving money, investing money, financial independence, and then some stuff like how money intersects with having a kid and being married or buying a house. So I'm trying to make it like a modern personal finance site that people in their teens, 20s, 30s, can find well like at least from my experience like education society; like our schools and in general, there's not a lot of like real training about… Joe: There's none of it. There's none of it, yeah. Paul: And there's even a lesson mode like starting an online business and like the potential kind of betting on yourself. Joe: It seems like a great idea because you're taking your educational experience along with your entrepreneurial experience and marrying them together with a content site which is great. I love content sites. We work with SaaS, content, and FBA and content is just fantastic. Scott Voelker is really, really focused on helping people go beyond FBA and build content sites and some of them have great success and its driving more traffic back to FBA and getting their business products sold. For those that aren't familiar with content site monetization, how do you plan to monetize the site? Paul: So there's a couple of traditional ways that people will do it. So, first of all, you have to have traffic. I mean if I have traffic inaudible[00:28:43.3] selling eyeballs like it's tough to; getting traffic is really hard and you're playing like this SEO game and it takes a long time to rank in Google. Then there's a couple of primary ways, the first is affiliate links like you could be selling a course or selling something on Amazon or selling; the Amazon FBA thing is a really interesting thing for Amazon sellers to marry their inaudible[00:29:04.9] business with content. I love that idea. I think that's really smart. There's brand sponsorships, other partnerships; but it's like advertising and affiliate income are kind of the two main plays for monetizing. Joe: I got you, okay. All right how's life at home; what do you do with your time? I mean you've you don't have a job. You're starting a content site which might take a little bit of your time. You've got a baby. Paul: It takes a lot of time. Joe: It takes a lot; the startup phase is always the hardest, isn't it? Paul: Inaudible[00:29:38.4] the thing I underestimated about content is that like writing is really hard. Joe: Yeah. Paul: I think oh I can write something about Amazon, that's easy, I know this. It takes a lot of time to really do a good job at clarifying your thoughts but overall I'm just trying to optimize my life for happiness and contentment and I get that right now being with my son and my wife. So I spend a lot of time with my family. We do a lot of cool stuff together. And I'm really liking; I do some Amazon consulting because I'm still at the Amazon blog and I like to be involved in it so I'm doing some of that for some local companies which I love doing.   Joe: Good. Paul: And then this content thing really is exciting and fun and I'm going to see where it can go and… Joe: So you didn't make enough on the sale of your business to never work again but enough to give you a pretty long runway and you're enjoying your expertise in the Amazon space and doing some consulting while you're building up another content or a content business? Paul: Yeah that's a fair way to… Joe: Does that sum it up? Paul: Yeah and I'd like to go up those kind of shift too, right? I'm not sure how in-tune you are with the financial independence world, all the people that want to retire early and be financially… Joe: Oh yeah, fire. Paul: So like if your burn rate or you can live on 40 grand a year once you stacked up a million bucks, in theory, you can quote-unquote retire. Joe: Sure. Paul: But as you think about education and college and healthcare and all these other things that number maybe gets a little bit… Joe: It gets blown out of the water. I have an 18-year-old and we're 14 days away from knowing what he's getting into which is schools and I'm rooting for the in-state schools; I'm not going to lie to you, I'm rooting for the in-state. Paul: Hey, I went to an in-state school and… Joe: Look at how it turned out; pretty damn good. Paul: Yeah. Joe: All right cool. Well, listen Paul I always tell the story about you and your brand and the fact that that fifth pillar makes a huge difference. It's the person behind the business that builds a great business with the next owner in mind. You kind of did that, I don't know if you did it intentionally or not but you said I'm going to build a great business. I want to put it all in a package that's going to help the new owner of the business do amazing things with it. And Matt the new owner of the business as you know is doing amazing things with it. And it pays off when you think about others exactly what you did that paid off for you, it paid off for your family, and now hopefully through Wealth Fam, it's going to pay off for a lot of other visitors to your website as well so people can start young and start smart and get on the right path financially. So listen man thanks for your time. I appreciate the business that you've built because it allows me to tell a story of how the person behind the business makes a tremendous difference so thank you and I appreciate you coming on the podcast today. Paul: You got it. Anytime. Thanks a lot, Joe. Links and Resources: Paul's Website Jungle Scout Helium 10

Once you decide you want to start a business, there are a lot of little steps to take before your launch date. In this episode, I discuss ten things you should do before your business goes live. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Your tax professional should know about the things going on in your life like your best friend does, and in some cases even more so. In this episode, I discuss 8 major life changes that should be discussed with your tax professional either before they happen or as soon as possible after. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

US citizens & residents are required go report and pay tax on all of their worldwide income, which could result in double taxation. In this episode, I discuss the Foreign Earned Income Exclusion. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

The IRS requires paid preparers to ask questions to make sure the information presented on the return is complete, correct, and consistent. In this episode I explain why we ask such probing questions. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

It's that time of year where Amazon releases its financial statements and everybody else gets angry at how much tax the company DIDN'T pay. In this episode I explain a few reasons why Amazon's tax bill might not be as big as you think it should. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Many married taxpayers choose to file their tax returns using the single or head of household filing statuses because their spouse has past due federal or state debt. In this episode, I explain the differences between the two married filing statuses, explain when you can use single or head of household when married, and what option you have when your spouse owes back taxes, child support, student loans, or other federal debt. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Tax season is a time to square up with the government for the prior year, not get an extra check. Sometimes you owe, sometimes you're owed. It's simple arithmetic. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

The Earned Income Credit is one of the nation's largest anti-poverty programs and the IRS side eyes Schedule Cs that put taxpayers within EIC range. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

One of the most common questions I get this time of year is “do I have to file my business income?”. In this episode I discuss the filing requirements for the different types of business entities. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

The IRS uses 9 factors to determine whether your “income producing activity” is a business or hobby. In this episode, I discuss the remaining four of those factors. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

The IRS uses 9 factors to determine whether your “income producing activity” is a business or hobby. In this episode, I discuss five of those factors. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

You've probably seen the posts on social media about starting a business to take advantage of deductions that can help offset your income and save money on your tax return. In this episode, I talk about three reasons why this isn't actually a good tax strategy. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

In this episode we discuss the importance of making sure you classify your workers correctly. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

It's usually pretty easy to determine what should be included in income. However, sometimes it's not so clear. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

In this episode I explain a little more about the strategy of hiring your children to shift your income from good higher tax bracket to their lower tax bracket. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

You've seen the memes & screenshots floating around social media about hiring your children in your business “tax free”. In this episode, I explain what it means to pay your child “tax free” and give five tips for hiring your child the right way. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Before you go take that advice from a random post you saw on the interwebs and start an LLC, listen to this podcast. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

If you're one of those people that wait until the last minute to file your tax return because you know you'll owe a lot of money... this episode is for you. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

In this episode I explain the importance of Forms W-9 & 1099-MISC | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

With the huge influx of new “tax professionals” it's important to know the difference between people DO taxes and people who KNOW taxes. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Anybody can be a tax preparer these days. The barrier to entry is low and the tax prep industry is highly unregulated. In this episode, I go over five red flags you should be looking out for when choosing a new preparer. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

The average IRS refund in 2019 was $2,725. What did you do with yours? Better yet, what are you planning to do with your tax refund this year? In this episode, I give you a few ideas of how we can spend your money. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

If you're using Cashapp, PayPal, Venmo or Facebook payments in your business to accept payments or pay vendors you need to do a few extra steps to make sure that you're properly reporting all of your income & expenses at tax time. | Quick disclaimer: I am a CPA but I'm probably not YOUR CPA. The information provided in this episode and every episode of tax talk is meant to be informational in nature and is not intended to be construed as tax or accounting advice. If you have questions about your specific tax situation, you can e-mail me at hello@themillennialtaxpert.com to become a client or reach out to your preferred professional so that they can answer your tax and accounting questions. --- Send in a voice message: https://anchor.fm/taxtalk/message Support this podcast: https://anchor.fm/taxtalk/support

Building the Best Team Real estate investing is a team sport. You don’t have to look far to see that. Take buying an investment property for example. We’ll walk step by step through the process and look at the team it requires to be a successful real estate investor. You, the investor, look for an investment property to purchase. Likely, that search isn’t solo. You might enlist the help of a realtor to find on-market deals, or build a direct-to-seller campaign using the help of virtual assistants, local support, and many other creative ways to find those elusive off-market deals. Once you’ve found the perfect deal, the next step is to get it under contract. Your realtor can help with this process, or if you’re more experienced you can navigate it on your own. Using your state’s real estate commission approved real estate contract is usually a good approach. Next, it’s time to get the financing process started. You’ll need a good lender who is experienced with investment property loans. Your lender will be able to help you apply and qualify for a loan that fits your investment strategy. They will also help and guide you through the process of getting to the closing table with the title company, and preparing the loan documents needed to close. Behind the scenes, your title company is doing the heavy lifting, making sure the property has a clear title with no leans, encumbrances, etc. Your title company handles the transfer of the funds, working with your lender to transfer the funds to the seller, only after all the appropriate paperwork has been signed by both the buyer and seller. Finally, you’ll close on the property, and this is just the beginning. Now you need a solid team to operate the property. You will typically enlist the help of a property manager unless you decide to self manage the property. The property manager will take care of the day-to-day activities from showing and leasing, to collecting rent, handling maintenance requests, and creating monthly P&L reports. Keeping an accurate record of your finances is crucial. These records will feed into your tax returns and future loan applications. Hiring a bookkeeper can be a huge help in this area. If you’re just starting out, you may manage the bookkeeping on your own. I’ve found https://www.stessa.com/ (Stessa) to be a great asset management software that helps me manage the finances in my portfolio. Taxes are one of the five ways you’re paid as a real estate investor, so it’s important to make sure you’re getting the most out of it as you can. Hiring a good CPA to handle your taxes is critical. Unless you’re a CPA experienced with real estate investments, I suggest you get a good CPA on your team. They’ll be worth their weight in gold, not to mention saving you a lot of liability when you file your taxes on your own. Your CPA will be able to help maximize your deductions, consult on different tax saving strategies, and so much more. Definitely hire a good CPA, and you won’t regret it. Investing in real estate will sometimes require you to enlist legal assistance. From dealing with tenant/landlord suits to asset protection and corporate setup, specialized attorneys can be an asset on your team. There are many different areas of law, and finding an attorney who specialized in a  specific area you need is important. Ask around for references and find an attorney who will fit well on your team when you need them. You can scale this team up or down to meet your needs. Each one of these team members will serve an important role on your team. But fortunately for you, this doesn’t mean you have to hire a team of a dozen people full time sitting in your office. You can hire each of these people for a specific task, kind of like a consultant. Other team members you may consider, depending on your specific business, are: Partners...

Podcast 77 In this week's episode of the working with Podcast I answer a question about getting clear about your goals. Links: Email Me | Twitter | Facebook | Website The Beginners Guide To Building Your Own COD System The Working With… Podcast Previous episodes page Carl Pullein Coaching Programmes The 2019 Edition of Your Digital Life 2.0  Script Hello and welcome to episode 77 of the Working With Podcast. A podcast created to answer all your questions about productivity, GTD, time management, self-development and goal planning. My name is Carl Pullein and I am your host for this show. This week, I have a wonderful question about really getting clear about your goals so the next steps become obvious. Before we get into this week's question, I would like to let you know I have taken 25% off my Email Mastery online course. I know many of you really struggle to get your email under control and even when you do finally achieve the fabled inbox zero, within a few minutes your inbox is filling up again.  This course will give you the tactics and know-how to get your email under control and to keep it that way with only a little daily maintenance. You were not employed to spend all your days answering email, and you don't have to.  Take the Email Mastery course and finally get away from having to deal with overloaded inboxes forever. Okay on to this week's question and that means it's time for me to hand you over to the mystery podcast voice for this week's question.  This week's question comes from Stephen. Stephen asks Carl I am really struggling to get started with my goals. I know what I want to do, but I am finding it really hard to get started. Do you have any tips that might help? Thank you, Stephen, for your question.  Now, goals are a very interesting thing to me. I was very fortunate when I was a teenager to be a track and field runner. I was lucky because I had some great coaches and at the end of every season I would sit down with my coach and discuss the season just finished. Look at my best times for the year and make a decision about what times I wanted to achieve next season and what races I wanted to do well in.  I remember well the end of the 1984 season when I finished with personal records of 2 minutes and 6 seconds for the 800 metres and 4 minutes 16 seconds for the 1,500 metres. My coach and I decided that 1985 would be the season I would break 2 minutes for the 800 and 4 minutes for the 1,500.  We then put together a winter training programme that would build my strength and head in to the spring training season where we would work on speed endurance training to get my fitness and strength up to the level so I could break those barriers.  That focus on a specific outcome—breaking 2 minutes and 4 minutes—was simple. I knew exactly what I wanted to achieve and it had a time line—by the end of September 1985—this meant that throughout the winter of 1984/85 I was focused on one goal - achieving what I called “the double sub”.  And that's how you need to be to achieve your goals too. What's the outcome and what do I need to do to achieve that outcome in a specific period of time.  Too often goals are too vague. Goals such as to loose weight, to run a faster 10k time or to get a promotion. These goals are not specific enough. How much weight do you want to lose and by when? What time do you want to run the 10K? Under 1 hour? What position do you want to be promoted to? It's this kind of specific you need to get to.  Let's take the promotion goal. I get this one quite a lot with my language students. I will ask a student what do you want to improve your English? And the reply is usually “So I can get a promotion”. Okay, so I've established that improving English is not the real goal here. Improving English is just a part of a bigger goal. When I ask the student what position do you want to be promoted to, they often don't know. They are just thinking in terms of the next step up. You see this does not work. The next step up is not ambitious enough for you to get truly motivated. Basically, if you do a reasonable job at your current level and don't make too many mistakes, you will eventually get that promotion. And deep down you know that.  What you need to be doing is thinking much farther ahead. Where do you really want to end up? What position do you want to be in in 10 years time? Let's say you are a junior finance administrator at your company today, but in ten years you want to be CFO. Great now that's a fantastic goal to go for.  Okay, so what do you need to become the CFO of your company? If you don't already have it, perhaps a degree in accountancy, Your CPA qualifications, maybe an MBA. And that's just the academic qualifications. What about the skills you will need. Leadership, strategic planning, management etc. There's a lot to figure out.  So let's look again at Stephen's question. How do you get started once you know what you want to achieve.  The first thing to do is to create a time line to success. Create a simple line across a piece of paper and on the right hand side write 2019. At the other end of the line write 2029. So now you have a line that represents ten years.  Now on that timeline write out what you have to do to achieve the position of CFO by 2029. Mark years off along the way. For example, by the end of 2020, you will have completed your degree in accountancy. Great. What do you need to do next? Perhaps get your CPA qualifications. Okay, get that on your timeline. Keep going until you have completed everything you decided needed to be done to achieve the CFO position.  Now, as we are currently in 2019, you need to expand on whatever needs to be achieved this year. If you really are just starting out, you may need to find a university to study your accountancy degree. You will need to apply to that university. You may need to decide whether to study full or part-time. A lot of decisions to make. These need to be made into a project and added to your to-do list manager.  There are no shortcuts. There's a lot of decisions to be made and a big goal like becoming your company's CFO in ten years time will need breaking down into it's component parts. Beginning the year by asking yourself what do I have to accomplish this year that will take me a step closer to becoming the CFO? That's where you start. Apply to universities to get enrolled into an accountancy course. Commit sufficient time each day / week to your studies and focus on completing that step. Once you have your degree, move on to the next step and keep going. Review, evaluate where to go next and get moving.  To achieve your big goals needs a lot of patience, action, consistency and time. (PACT) but before you get to building on these cornerstones you need to have a plan in place on a timeline. You need to know the steps to get there. Once you know the steps, you can then take the first step, break it down in to actionable tasks to perform so you have a place to start.  Back to my running story, because I had a very simple goal, that I gave a nickname to “The Double Sub” all that winter I trained very hard. I came in to the spring stronger, leaner and determined to hit my goal. By the end of June, I had run 1 minute 54 for the 800 and 4 minutes 3 seconds for the 1500. I was so close, and that gave me the determination to give it one more push. I worked so hard in July to improve my speed endurance so I could get under that elusive 4 minutes and at the end of July, I ran 3.58.9. By the end of the season, my times stood at 1.54.2 for the 800 and 3.54.8 for the 1500.  For me, the lesson I learnt in 1984 and 1985 has stayed with me ever since. All goals are achievable if you make them simple, clear and are determined enough to achieve them. As long as you stay focused on them, are will to do the work necessary to achieve them and are prepared to push that extra mile to get there you will get there.  But it always starts with that first step. You will achieve nothing unless you are willing to take that first step. Cemeteries are full of people with unrealised dreams and goals because they never took that first step. They never established what the first task was and they never went that extra mile to make it happen. Don't let that happen to you. Do the planning, create the time line and take the necessary action to make it happen.  This is where your to-do list comes in. Once you have done your planning, you need to take the first part of your goal and make it a project in your to-do list manager. Then create recurring tasks that will take you closer towards achieving the goal for the year. If you want to break 1 hour for a 10k make sure you have your daily training in your to-do list manager. If you want to finish your degree in accountancy, make sure you have your reading and studying tasks in your to-do list manager. Break everything down into daily tasks and make sure they are coming up on your daily to-do list every day. Only by taking action consistency over a period of time will you get to where you want to go.  I hope that has answered your question, Stephen. I know so many people really struggle with setting and achieving goals, but as I say, when you use a simple piece of paper and draw out a timeline, then turn you goals into small, daily activities, you will amaze yourself about what you can achieve.  Good luck and thank you. Thank you also to all of you for listening and don't forget, if you have a question you would like me to answer, then get in touch either by email or by DMing on Facebook or Twitter.  It just remains for me now to wish you all a very very productive week.   

If you've never built a team before, or if you're thinking of building or reshaping your team, you need to listen to this week's episode of The Flip King CEO. Joe Evangelisti breaks down accountability charts, a key tool for businesses so everyone is on the same page. The chart shows that everyone on a team has a certain process or activity they are responsible for, and a certain key performance indicator (KPI) that they have to bring to the team. If you've never heard of an accountability chart, or you're not quite sure if they're right for you, you need to listen to this week's episode. The difference between an org chart and an accountability chart As Joe says on this episode of The Flip King CEO, an accountability chart is not simply an org chart, showing a “chain of command” within the company. While there will, of course, be people at the top (maybe that's you as the CEO of your business), it's not built to simply show who answers to whom. But the chart isn't about showing who's at the bottom or at the top, it's about showing them they are responsible for something important, imbuing them with a sense of purpose and contribution. Ideally, the accountability chart will have some sort of metric to show just how much each person is contributing to the team. Really, this is a must for any team, and Joe breaks down a basic chart and the one he uses for his team on this episode. Breaking the accountability chart down into three parts A very simple accountability chart will have the CEO or visionary at the top, to provide the vision for the company. Below her or him will be the COO, who's actually implementing and managing all of the systems to achieve that vision. Below every COO will be a finance wing, an operations wing, and a marketing and sales wing. Almost every company will break down into these three components. That doesn't mean you have to have people filling up each wing: Your CPA could be your finance team if you're still a small operation. You might even be the one person in all of the boxes for now. What's important here is to visualize how your team would work, and Joe helps you do that this week. GWC: Gets it, wants it, has the capacity to do it One of the things you need to think about when you're hiring someone for your team, or moving someone into a new position, is the acronym GWC: Gets it, wants it, and has the capacity to do it. It's not just a buzzword, it's actually a way to hire and review employees. And GWC is a two-way street, sometimes people get it and want it, but don't have the capacity. Sometimes people get it and have the capacity, but don't want it. So being able to look at a team member through the GWC lens is actually a huge help to business owners, and Joe breaks it down even further on this week's Flip King CEO. Visualize growth If you want to grow your business, you have to envision what it's going to look like. And even if you're the only employee right now, you need to draw out what you think your business should be. And then you can take that, look at where you are weakest, and immediately identify your first hire. The accountability chart is such a crucial tool for visualizing and mapping your company, and for understanding how each and every team member is contributing to the business as a whole. If you're even thinking of expanding your team, you can't miss this episode of The Flip King CEO. Outline of This Episode [3:00] Why accountability charts are necessary [5:50] Basic accountability chart [11:00] GWC [15:30] How the accountability chart fuels the business [18:30] The magic of putting it on paper [21:30] Always room on your accountability chart Connect With Joe www.TheFlipKing.com On Periscope On Twitter On Facebook On Youtube

Download This Awesome Podcast: http://bit.ly/304QkIO Paul Moore is one of the hosts of "How to Lose Money" - a wealth building podcast dedicated to the honest lessons learned in business. Paul is also the author of "The Perfect Investment - Creating Enduring Wealth from the Historic Shift to Multifamily Housing." The Perfect Investment teaches you… -The secrets used by the super-wealthy to attain and maintain their wealth over generations (and why you're not invited to their party). -Why multifamily investing scored 460% better than the stock market on a key risk vs. reward ratio. -Why investing in flips, single family rentals, and small apartments is a not a path to multi-generational wealth for the vast majority of people. -Why US demographics, the economy, and the fallout from the last recession have caused the perfect storm for the success of this asset class. -How multifamily investors “partner” with the IRS to reap significant profits while paying virtually no taxes. (Your CPA may not know these tax codes, but you need to!) Wellings Capital - Paul's Investment Company - an income-focused multifamily real estate investment firm centered on providing stable, yield-producing investments. WHY MULTIFAMILY: "THE LARGEST RENTAL GROUP New households aged 18 to 30 are being driven by the second largest demographic wave in US history: the Echo Boomers. The 76 million children and grandchildren of the Baby Boomers. In addition to this demographic group's sheer size, Echo Boomers are disenfranchised with the concept of home ownership. 75% of them are more likely to rent than own. THE SECOND LARGEST RENTAL GROUP The largest demographic group in US history: the Baby Boomers at 78 million strong. As this group transitions from homeownership to renting, they are likely to never own again. Additionally, the average lifespan continues to increase, thus extending this generation's rental demands." THE NATIONAL HOME OWNERSHIP RATIO Home ownership has rapidly declined from 69.2% in 2004 towards the mean of approximately 64% today. This homeowner displacement has driven, and will continue to drive, households out of residential owner-occupied property to renter-occupied apartments. ECONOMIES OF SCALE GO BIG OR GO HOME!!! Economies of Scale start at a very high level. GO PRO. Large properties have access to professional property management firms on a different scale than smaller properties." PAUL'S GREAT LESSON: In my personal life I am all about swinging for the fences. I love to invest in my family. I love to invest in relationships. I talk really loudly to strangers. I really want to care about people. As far as investing is concerned: I don't want to swing for the fences anymore. I used to believe in the double or nothing thing... the problem with that is the law of risk is commonly believed: low risk - low return, high risk - high return. We want to believe that! The truth is it is LOW RISK - LOW RETURN, HIGH RISK - HIGH POTENTIAL RETURN... HIGH POTENTIAL LOSS..." PAUL'S BIG WHY: "I want to thwart human trafficking and I want to rescue its victims... If you took the record profits of Nike, GM, Starbucks and Apple... combined them together and doubled it... That is the approximate annual revenue from Human Trafficking worldwide." ORGANIZATIONS TO SUPPORT: http://exoduscry.com and https://harvesthome.org WORDS TO LIVE BY: "Investing should be like watching grass grow or watching paint dry." - Paul Samuelson "Don't swing for the fences." "Get EDUCATED" "Find a good Mentor." HOW TO FIND PAUL: https://www.wellingscapital.com paul@wellingscapital.com TO SUPPORT PAUL'S WORK AGAINST HUMAN TRAFFICKING http://exoduscry.com https://harvesthome.org http://nefariousdocumentary.com Thank you to Paul Moore. Thank you so much for listening. See acast.com/privacy for privacy and opt-out information.