P14 – Transcript – The Post Windfall Plan
0:00
All right. So, like I was just saying, then you have a big tax for imputed income.
0:04
Right, So, that’s probably the last thing you want is to have the IRS figure out that You took out a loan and then didn’t pay.
0:13
Didn’t make your payments and it’s going to classify that loan as a huge tax. You’re gonna have all kinds of penalties. So, definitely, you don’t want to do that especially at an audit.
0:24
But again, there’s no reason to be scared!
0:26
Just be pragmatic, OK. Just follow the rules is pretty simple. So you can borrow cash from your LLC to pass a mortgage. It’s a personal debt, so it’s going to be income.
0:34
But so if you’re, you want to, you want to do it in a way that’s going to be considered a refinance, so you’re really borrowing money to pay off alone.
0:42
You’re not just paying off the loan, so you get the final payout statement from your lender, and then within a reasonable time, or the time they give you on the notice, you remit the funds to paid off.
0:53
And then within, I would say, within 30 days, record another mortgage and I’m gonna get into that on how to do that. It’s actually quite simple, The mortgage could be unrecorded, there may be some reasons why you want to do that. I’m not gonna go into that too much.
1:05
Let’s just say you’re gonna do a standard transaction where you’re gonna refinance your mortgage with your own money.
1:11
really.
1:12
It’s the LLC’s money so you’re gonna pay off the mortgage with an LLC money. The LLC will become your new lender.
1:19
This is not a third party, this is just a document you’re creating using cash that was earned by your LLC, OK, so here’s what you do.
1:28
You need a mortgage form You need a way to record the instrument unless you want to work with an attorney or somebody that already has these things or you know an agent or somebody that wants to do this. It’s pretty easy to get your mortgage forms. You can get a standard government approved form at Freddie Mac.
1:42
So you can go, I’m gonna give you the entire URL here.
1:45
You can go to freddie, mac dot com slash uniform slash U N I F Security dot HTML I don’t think it’s necessary to go type in all that. Just search on Freddie, Mac, mortgage instruments.
2:03
Alright, and you’re gonna find, for every state, just pick your mortgage, o’kane, all these documents can be edited.
2:08
You have to save them on into a file, on your computer, and then you can open the file again, and then you’ll be able to edit the document.
2:15
So the way you edit it is you wouldn’t want to add in.
2:20
Well, you got the mortgage and you also need a note. So from this same website, you get a note to you do need a promissory note.
2:25
The Promissory Note is not going to be recorded, just the mortgage, or the trustee, or whatever state you’re in.
2:30
On the note, you’re going to actually have the payment amounts per month.
2:33
So, maybe it’s going to be a 20 or 30 year mortgage, it could be a two year mortgage. It could be whatever you want.
2:39
30 year mortgage gives you the lowest payments. Obviously, you want to go and only put the Lean for the value that you’re putting the Lean for. You don’t want to put it for more than the value your payments would be calculated using the amortization calculator. You would find on the Internet, there are many of those, maybe you already know how to do it on your calculator, you can figure that out.
2:59
All right, so when you’re gonna buy the house or buy anything, property asset reliability, OK, a house is a liability because you’re gonna live there.
3:10
So whenever you’re gonna buy something like that on a loan, you want to put the property title in your name, then the lender your company is going to be the lienholder.
3:21
So put the title of the house that you’re buying with the LLC as your lender with the LLC’s money, the crypto money, The Windfall you got.
3:30
Put that house in your name.
3:32
Likewise you would do the same for car. We’ll get. We’ll get into that in just a second.
3:35
So the way, the way you buy a house with cash, you could also do it like this. You could, well, I’m gonna go through this step by step.
3:43
So you want to isolate your crypto holdings in a wallet. So pick a paper wallet or treasure.
3:51
You. You make an offer assuming you’ve already made an offer really to to buy some property, let’s say buy a house to live in.
3:58
You’ve already made the offer the seller has accepted your offer.
4:01
You just offer the dollars you’re not trying to talk about.
4:04
Cryptographic currency. He doesn’t care about that.
4:07
So you made the offer, it’s been accepted.
4:09
You ever written agreement, isolate the crypto value that you want to spend so you can isolate the kryptos dollars, or you can do it in the wallet. You can do it in a bitcoin wallet, or litecoin wallet, whatever you want to do.
4:22
That’s when you go into opening a qualified escrow account so you go to qualified escrow, you can have your agent already chosen.
4:30
You can use bit pay, well you’ll see a couple of listed here with this video and then you go to qualified escrow.
4:37
Can you explain to the escrow agent that the owner of the or the buyer, OK the buyer is the one with the: the cryptographic currency wallet, the buyers’, the one, spending the money for the house, for the property, OK?
4:52
And you tell the agent who that is, it’s going to be your company name, your LLC’s name.
4:58
And it’s gonna you’re gonna give its EIN and you’re gonna give it to address. You’re gonna give that to the escrow agent. You’re not buying the house. Your company is buying the house in that, in that sense.
5:06
So, that’s, that’s how you would do it.
5:08
If you’re just using kryptos or cash to just simply buy the house and have no mortgage on it, you can go from your crypto account that where the LLC holds the money.
5:18
You can, you can put it in dollars, and then spend it to the new owner. The new owner cannot be yourself, because if it’s in your name, then it’s your money.
5:27
If the House is titled an LLC, then it’s just another company, so this is how you would do it.
5:33
If you’re just going to title the house, in another company, you would just use your crypto account in an isolated wallet or you would use cash from your LLC account, or the exchange.
5:44
You can then just transfer the funds over according to however the escrow agent wants you to do it. And you would use again, standard contracts, you’re closing, you’re just going to help you with that a little bit.
5:52
A real estate agent is going to help you with that a little bit, and then, of course, title of an LLC.
5:58
But if you’re going to do the loan, it’s pretty simple.
6:00
You can just simply, uh, transfer the funds.
6:05
Well, you transfer the funds, you isolate your kryptos, or you put them in dollars. How are you going to do it?
6:09
When you do the closing, you can put the property in your name, because you can use alone now to buy the property.
6:14
So, you put the property in your name, and then you transfer the funds and be sure that you name that company that’s lending the money, it’s going to be your LLC.
6:22
Make sure that that is identified on the all the paperwork to show that it’s, it’s the lender, same thing with buying a car.
6:29
So, I’m not going to use an escrow agent to buy a car, I’m just gonna go, I’m gonna get some dollars set aside from my my crypto account.
6:37
And this is simple version, just get some dollars set aside, then go make your deal. Get a written contract, find out what your bottom dollar prices, OK?
6:46
You’re drive off prices and then explain to the to the dealer that you already have a lender.
6:52
The lender is the company that you’ve chosen. It can be any company, really.
6:55
I would suggest on a car or a house. I would set up a different company if you want the company to be the owner.
7:02
And if you want the company to be the lender, I think that’s a better way to go. You could use one LLC, the same when you’re using it, your crypto account.
7:11
I think it’s a better practice to separate it out. It’s so simple just to register another one.
7:17
Especially for a large ticket item.
7:18
So you get the price, you go to the bank account, So you’ve already gotten review, soldier, kryptos, let’s say.
7:26
And you got cash and you move the cash to an account where you can go to the bank and ask for a certified check wherever, whatever bank that’s going to be, wherever the cash is going to be. So it’s your LLC account we’re talking about. So, you’ve already got your final price from the dealer.
7:39
You go to that bank where the cash is.
7:41
You get certified funds from the company, OK, this company is going to become the lender on the paperwork that the dealer is going to create.
7:50
So you give the dealer the name of the vendor, which is your LLC, you give its address and its EIN.
7:56
That dealer is going to send a certificate of title to that LLC.
7:59
It doesn’t even matter if it’s your home address. That’s all you want to do, is just give them that information.
8:04
He’s going to write up all the documents, is going to send a certificate of title, like he’s supposed to you, drive up with the car.
8:10
Now, there’s a, there’s a little, other thing I want to add here.
8:14
If you’re a kind of person that likes to get certain kinds of deals, just know that when you buy a car on credit, typically the dealership is not actually selling you the car, It’s actually selling the paper, the loan on the car, and it’s doing that at a discount. So, in some cases, probably a pretty steep discount depends on the volume that deals in.
8:33
So, if you understand that, maybe you might want to consider that your LLC lender, it’s not gonna buy the car, per se, but it’s gonna buy the paper from the dealer, and in that case, maybe the dealer will sell the paper for a better discount, or a discount just some kind of discount. Now, it’s not going to be 25%. Maybe it’s gonna be 3% or 5%, I don’t know, That’s just an idea if you want to think about it.
8:58
You can use your loan money to either buy the car and then take the title in your name, or you can use the loan money to buy the loan from the dealership at a discount, and put the title of the car in your name.
9:13
Now, of course, you can buy the car and put it in the name of the LLC. I don’t recommend that unless you’re really going to use it for the purposes of for which the LLC is formed.
9:22
Most of us are not doing that.
9:24
I just think it’s a better practice to keep it consistent.
9:27
I don’t know that you can explain how the car’s titled in an LLC, when there’s no real business purpose for it and you’re driving it personally.
9:33
So I mean, you could, but sometimes I do it as a holding company, or I do it because I carry my own car insurance. So there is a reason that way, but for most of us, we’re not going to be doing things like that.
9:45
So same thing for buying an asset. Now, an asset is not your house. An asset could be then house next door yours.
9:53
If you’re leasing it to your neighbor, it could be a laundromat, an asset could be some stock and a company, an asset typically is going to be something that’s going to pay you on a regular basis.
10:04
So, you can buy an asset.
10:07
Almost pretty much the same way you would buy a house, you would want to go through almost always a broker to buy another asset if it’s especially if it’s a business, you want to find a business broker.
10:19
And you definitely want to use escrow for the same reasons you would use escrow to buy a house that you’re going to live in.
10:25
Alright, so, I know we can get into more detail, and I will, I’m sure, create some more content, some more videos going into more specific transactions, but I think this covers most of what many of you want to know.
10:38
So, I just showed you where to get your loan documents.
10:41
A Promissory Note, I think you can find those at the same website.
10:44
I think you can also look on that was Freddie Mac. You can also look at Fannie Mae and I think Fannie Mae is the other one where you can find mortgage documents and promissory notes. Promissory notes are pretty easy to find their generic. I mean, you can get it for free if you have to combine for 10 bucks.
11:00
You know, on the internet legalzoom probably hasn’t probably your office supply store has them. It’s pretty easy to find those things.
11:06
Alright, so then there’s another thing that I get asked frequently, moving on to the next subject here, This is, um, what people would call gifting. All right.
11:14
Gifting, many of you want to do you want to, you know, make a lot of money and then be generous and give some money. So, there’s a couple of issues here. one is, how do you do it with the least tax consequence?
11:24
There are some statutory tax provisions you want to look at.
11:27
Like how much can you give somebody or anybody in total for a lifetime and how much can you do it per transaction? There’s some limits on that so you can look that up for yourself.
11:36
An accountant can tell you what the gifting rules are.
11:39
There is a way to do gifting without being considered a gift by IRS standards.
11:47
There’s a really good one, though. I like this one. Even though it’s all statutory.
11:50
It’s all No under the IRS provisions.
11:54
It’s still, I think it’s pretty solid.
11:55
If you want to do this, there’s a vehicle you can use for gifting a monist called.
12:01
The grantor, retained, annuity trust.
12:05
It’s a G R a T.
12:06
Is the abbreviation, OK?
12:08
I don’t do those.
12:09
You need an accountant who specializes in doing those. Don’t just pick anybody.
12:14
What you’re going to end up with is an S corp. It’s going to file a tax return.
12:18
So, you’ll want to have to move the money over there first to fund your company, your S corp, before you do this and it’s going to have an annuity with it. It’s an annuity contract. Alright.
12:29
So, it’s a little complex. You need some help with it.
12:31
It’s not something that I would recommend that you get some forms and fill them out yourself, Get someone to advise you properly.
12:37
Know the rules, OK, it is IRS, it’s all regulated by the IRS. So a grantor, retained annuity trust is really a nice way to go.
12:45
But keep this in mind before we go to these other methods are pretty simple.
12:48
Keep this in mind. Be careful about how you just give money away. It’s not always a good thing. Yeah. It’s nice to be a be able to pay off some bills and things. But I’ve seen a lot of problems result from just giving people money, especially people that don’t have any money or have never had a windfall just giving them money might be the coolest thing you’ve ever done to them.
13:08
In fact, I’ve seen, a lot of times, we’re giving people money. It turns them into an enemy and I don’t care who they were before. They could have been a family member or a spouse.
13:15
It’s really crazy how things happen.
13:17
So, just, just be aware that there, there are ways to give money.
13:23
And that’s why we even have college courses.
13:25
For philanthropic studies.
13:27
There’s actually, there are actually methods of giving money away.
13:31
There, there are methods of giving money away, make a note to myself here.
13:37
There’s their methods of giving money away to institutions that would actually make you money, They’re called endowments.
13:43
So if you want to give some money away for some reason, and you don’t have anybody like friends, or you’ve given enough money to your friends and family.
13:50
Look at possibly giving some money toward an endowment, but do some research on the endowment, find out what it’s all about.
13:58
And then if you choose an endowment fund, find out who else is involved with that endowment fund because you may not want to give money to an endowment that’s connected in with the JP Morgan or the Rockefellers or something like that. OK, so just keep that in mind.
14:14
Here’s another way.
14:15
Instead of taking dollars and giving it to somebody, why not just give someone access to a paper wallet?
14:20
It’s so easy, because no one ever knows.
14:24
It was never titled anywhere, right? You just hand it to somebody, and whatever he wants to do with it, it’s on him. Maybe you might have to show him how to use it.
14:30
You can also fund a company. You can register a company, open a bank account.
14:34
Yeah, you’ll be the signer, the person you’re gonna give them money to you can actually put the money in the company.
14:39
So now you’ve done the same thing like you did previously, OK? You’re not creating a tax situation.
14:43
Then that person has to do his own tax advisement, whatever he needs to do.
14:47
So funding a company is one way to do it, so it’s not really You’re not really giving money away in the under the criteria that the IRS regulates Giving someone a paper wallet Again, same thing. Another way to do it is to buy another asset.
15:02
So Maybe I’ll take my crypto windfall part of it and you know Open a Vault account with a Vault service and I’ll fund that I’ll just go buy gold and maybe some Occupants some kryptos, but maybe I’ll buy Gold and Silver or Platinum or whatever.
15:20
And then I just give access to that vault to the person I’m giving the money to.
15:25
So there’s another way to do it So that’s really off the grid. If you’d like things like that, and we can get into, we will get into more detail, I’m just gonna mention this two more things. Lease agreements are a way to establish a relationship with real estate.
15:37
So again, an example Let’s say I’ve got, I’m working with a couple that’s got a mortgage, it’s going to be there for a long time, and they just need some privacy. They want to change public records, so the public records show that they’re the title holder of the house.
15:50
Now, that doesn’t always mean the person lives there, Right? It could be an investment.
15:54
So, I will show it as an investment by creating a Lease Agreement for the couple, and I will do some other things and make it look like they moved, even though there’s a mortgage there.
16:03
And I can record a lease agreement on the county records, and that will establish a tenant at that property. So, I’m not saying this is the way to go.
16:11
I’m just saying, there are reasons and methods that you can use to establish a relationship with property.
16:18
The way you want it to look, like, is that you can especially do that with, with cash, right? So you’re buying things with cash, and you want to structure it, so that it appears a certain way, whether you want to do for privacy, or planning, or risk management, OK?
16:31
So, lease agreements are a clever way of establishing a relationship with actually vehicles and property like homes and land. Last thing.
16:42
If you have an asset with no title like a paper wallet, don’t put it in a title, don’t transfer it to a centralized exchange where you’re going to be your names connected to it. Everything else.
16:53
Now, yeah Then your name may be connected to it on the blockchain because of your ISP.
16:58
Know your IP address right through your ISP.
17:02
That’s not really a title and no one’s going to care unless there’s some investigation, right?
17:07
So if something’s not already title, don’t title it. If it’s gold.
17:11
I don’t care if it’s a no case of gold or gold coin, it doesn’t have a title.
17:16
It doesn’t really have a title until you go to sell it. If I sell that a **** shop is kinda gotta have a title because if the pawnshop pays me and I give them my name SSN say it’s mine, he’s probably going to send me a 1099 right.
17:29
But if I sell to my neighbor for cash, there’s no title there, no one’s gonna know and no one needs to know, right.
17:35
So don’t create one.
17:36
Same thing with no kryptos and cold storage.
17:40
Don’t go out of your way to create a title, wallets, paper wallets, private wallets, treasures, things like that, and, you know, you’re precious metals and so forth.
17:48
So just keep that in mind. It’s, it’s not titled, and it doesn’t need to be.
17:53
What’s more important in that case, is that you have good security.
17:57
So wherever you’re holding these assets, or these properties, are your treasure, just make sure you have good security.
18:03
That’s more important than having the proper title, What to do, generally when you take your profits, OK, So that makes sense, right?
18:10
We’re not going to title things that we that are, don’t already have a title.
18:13
So let’s get into generally what you want to start thinking about and this goes along with the post windfall plan. I’m sure many of you already have a copy of this, but I want to go into some more detail.
18:26
And I think I’m going to do an overview right now and then I will get into some more specifics as as I can as I, as I see more questions because as I talk to more people, I find people have more interest in certain areas and others.
18:42
So, anyways, let me just do an overview of the post windfall plan and I always call it a two stage profit taking.
18:48
So, two stages being how to get out of the asset I’m in. Like, it’s pretty easy when you make some money in the crypto right now. You can go into stable coin. That’s like the bare minimum, right?
18:58
And you just go into a stable coin and avoid the, the, the volatility of whatever you were in before, You can also go into dollars, you know, assuming that’s pretty stable.
19:09
And so you have a tool for doing that. But profit taking.
19:12
I have two stages here, so I want to get from whatever acid it was into something that’s really low risk and easy to do.
19:20
So a couple of things you wanna look at is precious metals, And there’s a list of things in my post one file plan, but you want to, you want to get into a position where you can get into other assets. So if it’s just cache, that might be fine, as long as it’s temporary.
19:37
I’m always mean, maybe I’ll change in a couple of years, but I’m pretty biased against the dollar.
19:42
So, if you want to sell kryptos, or whatever asset it is that gave you the windfall and get into cash, that’s fine.
19:48
Just have your asset plan ready. What you’re going to buy?
19:54
We’re gonna get into more on that. But let me just get into a little bit about privacy.
19:58
Some of the concerns people have are about what to do for privacy, because they think they realize they don’t have any privacy.
20:04
Or, maybe, they’re just, have a really big risk to someone realizing that they have some, you know, nice windfall or new wealth or something.
20:13
So, one of the things you may want to consider is, there’s a cheap way to go, which is use a mailbox service and route your mail to the mailbox and don’t don’t get mail at your house. Or at least don’t get mail at your house in your name or your legal name.
20:26
I haven’t go as far as to use a fictitious name, but I hardly ever get mail at my house.
20:30
I use a mailbox and a PO Box. Probably you should receive mail in your name anywhere.
20:35
I wouldn’t, especially with a high net worth, and you may consider having a law firm not represent you, but provide a service that will receive your mail and whatever name you want. Maybe it’s your legal name.
20:48
There’s a benefit to that because dealing with attorneys depending on your retainer agreement, you may get attorney client privilege not that you need it, but it might be something you want to consider.
20:57
I use that in some cases like if I’m going to help somebody did I know is going to be audited because he didn’t file for more than three years?
21:08
We’re going to use an attorney to avoid, having to give the IRS more than what’s on the tax return. So, that’s just one little thing I use it for. Attorney client privilege is really helpful.
21:19
There’s a nice service and having an attorney or his firm handle your mail in that sense. So, you know, it depends on it, how you want to spend your money, But I mean, think of it, having a law firm, receive your mail, is pretty cool.
21:31
And among other things, I mean, it can do other things to you for you, as well.
21:35
A law firm, think about like this, You could use a law firm to securely store one of your authorization devices for two or multi factor authentication.
21:46
Really two or yeah, 2 or 4 factor authentication.
21:49
If you have something really important and you need more than two factor authentication or are four factor multi factor authentication. You can have the attorney’s office storage device. It doesn’t even need to know what that device is. It’s just a place to store it, so I wanted to introduce that to you, that concept, to use attorneys for things like that.
22:07
I don’t like them, I don’t like to use them.
22:09
and, you know, for, for advancing a cause, I have, I wouldn’t mind using them for forums. References and services like this, you know, answering my Mail?
22:17
Not answering, but I’m receiving my mail.
22:20
Another thing that I get a question on is: Avoid talking about paying old debts.
22:24
And I always like to say, avoid paying all the old debts, and that may not be the case for everyone.
22:31
It may not be the best way to go for everyone, but there’s a reason why I say that, because it’s not that you want to avoid paying your debt, It’s probably a good idea to pay your debt, especially if it’s to a friend or family, right?
22:42
But if it’s to a bank, you know, it’s up to you. I don’t like them.
22:46
I would say, don’t pay him if you feel better paying them. What I would suggest is this. And it’s a good practice.
22:52
take your windfall, instead of paying off an old debt first.
22:56
Which is really an easy thing to do, Adopt a new habit and take that windfall and buy an asset.
23:01
Buy something that you can then use to pay off the debt over the term of the loan. Let’s say it’s your mortgage, for example.
23:09
So let’s say you get 100,000 left on your mortgage. You just had a nice windfall at $3 million.
23:14
And you take $500,000 of that and go invest it somewhere, or let’s say maybe you buy a duplex, and you get the rent money from it, and you take that rent money and apply it towards your mortgage to either offset your mortgage or pay in full over the time term of your mortgage. Why pay off your mortgage in one lump sum? Because if you pay off a debt in a lump sum, you’re giving the lender a higher way, higher net present value.
23:37
Why should you give the banking system a higher value in your money?
23:41
And you’re going to actually, It’ll work this way. It will counter-balance because you’ll lose the value of that money. Because you’re giving it that value, giving it to the bank.
23:50
Use an asset by asset, use it to pay off a liability over the term of the, the obligation you have on it, which is a mortgage or a dead or some kind of right. That’s a way better use it because once you’re done paying off the liability, you still have the asset, hopefully. Alright, so, you want to find assets that have cash flow. That’s easy enough. Use assets to pay for liabilities.
24:10
You can use assets to pay our personal debts. I look at a personal debt as a liability. A car is a personal debt, the house as a personal debt.
24:18
A credit card bill is a personal debt. OK, and mortgage personal debt, alone on a restaurant that’s making me 7%, is not a personal debt, it’s not a dead at all, it’s an asset because I’m netting 7%, even though I’m in debt. Maybe I have a $2 million loan on it, right, I’m still making money on it.
24:38
This is a lesson I learned a long time ago, Do not pay, for large ticket items with cash, you get all kinds of problems.
24:46
You might get a visit from the IRS or Financial Crimes network.
24:50
Not that you should be afraid of it, just being practical. Like I say, why, why invite those people into your life.
24:56
If you don’t have to Why?
24:57
Why go pay for a car with cash, when you can simply, just for the same energy use your windfall use, your lender? Use your company as a lender. What, why would you just go and pay for pay cash for a car?
25:10
Because now the dealer is going to make you thought additional forms, and he’s going to notify the IRS. Not that that’s a problem, but Washington to do that.
25:19
So, don’t use, uh, cash to pay for large ticket items, OK, use the loan strategy to do that.
25:26
Just make sure that when you set up the loan to pay for a large ticket item, make sure that you have the ability that means in the practice, the habit of making payments on that loan. And have a record of it. With a bank account. Now, there’s something I’m gonna get into in a separate segment, but I want to mention this. You can look this up.
25:43
I want you really, I’d advise you to void, having your name, if you’re a US citizen, to have your name on a foreign bank account, or have an interest in a foreign company.
25:54
Now, you want to look at, you do a keyword search on the internet for an IRS form 5, 471, it’s IRS Form 5, 471.
26:03
So, you can search on it by the keyword, IRS Form 5 471 PDF, and you want the one with instructions. So it’s about six pages long.
26:13
You want to read the instructions because then you will see what these guys created is an impossible quagmire that you’ll never comply with.
26:20
Even if you think you complied with it and you paid someone lots of money to help you fill out those forms just because you had a foreign bank account, your name is on it, the IRS can always say that you didn’t comply, and then what will happen is, if you didn’t comply according to what the IRS says, they can argue for the last 20 years and then go back, 50 years. You waive the statute of limitations, so it’s really good idea.
26:43
If you’re going to be offshore on something, just make sure that it’s not, you’re not being reported on as a US citizen. I have a strategy for that, so we’ll get into that in a separate segment.
26:51
So how do you determine what assets to buy?
26:55
Once you have your, your, your new westfall, and you’re starting to follow some sort of program method of taking profits, you can’t just take profits by putting cash in a box, in your house, you gotta put them in play, you gotta do something with them. Otherwise, we’re just going to diminish in value so we all know that. So even if it means we don’t have to work at the same job anymore, we still have a job, we have to manage that net worth.
27:18
So how do we do that?
27:19
I would recommend this invest in something that you know, and maybe you hate it.
27:24
So hopefully you don’t, but invest in something, you know. Or something close to? What you know enough to where you would like it. But. More importantly, invest in something that you really like?
27:34
Invest in something you love.
27:36
Maybe it’s a veterinarian clinic, alright.
27:38
Maybe it’s, you just want to have a landscaping service, I don’t know. Maybe you want to buy up all the landscaping services in your town.
27:44
So invest in what you love and try to invest and what you know. As a starting point at least.
27:50
If you don’t know anything and you don’t love anything, you can get away with real estate, and there’s like 20 different ways to get into real estate.
27:56
And the other thing is, I would recommend not relying on financial planners and wealth managers, people who call themselves, wealth managers usually are not rich, usually have no wealth.
28:08
So, people that you get the best information from are people that have a high net worth. If you have a high net worth, you talk to people that have a high net worth, Don’t talk to employees that have a job title that says Wealth Manager, OK, especially at a bank.
28:22
But always consider information, or consider advice.
28:26
Even if you think at the, at the beginning, at the onset that, it’s, it’s not worth your time, at least listen, because sometimes there is information that you can use, OK.
28:35
So don’t just discount something just because, on its face, you think it’s not going to help you, you can, you can figure it out later on, so there’s all kinds of types of assets to get into.
28:45
There’s, you know, real estate, real estate commodities property, there’s some things I like to get into, I like to invest in things that cause social change.
28:53
As you probably figured out, I could, I could probably invest in real estate securities, that would make me sick, I’m sure I can make some money in that. I don’t care.
29:03
I wanna invest in something that’s going to make a change, that maybe my children and their children can look back and say, Oh my, my dad did that and my grandfather did that, and we have this thing today, right?
29:11
So, that’s what I like to do. You can do what you want.
29:14
There’s another tool that I want to get into right now.
29:17
When you, when you’re investing, don’t think because you can pay cash for something that is always the best idea, Fine. If you want to pay cash for the next asset, see, want to buy a restaurant, You pay cash for it.
29:27
You should also have, in your plan how get financing for it, whether it’s whether it’s debt, financing, or equity financing, Whether you’re going to take on a partner equity, financing, or are you going to borrow money. So you get some of your cash back out of it, at least half of it, right?
29:41
So, for that, I would recommend, when you get into an asset, let’s say you’re gonna buy an apartment complex, nicely done the transaction, now you own it, and maybe it’s debt free, because you just paid cash because he has so much money right from kryptos, but you still want to put some dead on there. At least half.
29:57
You need to have something on there, like, maybe business credit, the company that owns the apartment complex, should go and establish business credit. So, there’s a couple of steps on how to do that. You don’t need cash to establish business credit.
30:09
You do not need good personal credit, either to establish good business credit.
30:13
So, what you do is, you want to start, well, first, you want to list the name of the company that you’ve chosen to own the asset.
30:21
You want to list it in the business directory.
30:24
So, it’s called the 411 Directory.
30:26
I believe you’ll see one on the Internet.
30:28
It’s called list yourself dot com.
30:30
So, I think list yourself dot com and ask you a few simple questions.
30:34
It takes about one minute to fill it out, and that’ll list your company as a business, and you want to use an address, that’s the business address. It should not be a home address, Which probably is a no-brainer, I’m sure you’re already understand that, especially if the company owns an apartment complex.
30:48
You’re just going to use the main office address as the address the business, the best time to borrow money, and the best time to use credit, because when you already have the money and you don’t need the credit, and you don’t need the loan, it’s just good use of money to use other people’s money, But, you don’t have to use all other people’s money for an asset. You can use half of it, right, a quarter of it, just something to get some of your cash back and put into another, another type of asset.
31:13
Once you do the 411 listing for your company, you want to start establishing that 30 counts.
31:18
So a lot of times, when you buy an existing business, let’s say, an apartment complex. It’s already, it’s already established.
31:25
It will already have suppliers. It’s going to have postal service.
31:29
It’s going to have FedEx, Whatever.
31:31
And a lot of the suppliers are going to be happy.
31:33
Having haven’t, will have binns selling products to the apartment complex on credit and the credit is known as net 30 terms.
31:43
So what that means is, let’s say, the apartment complex needs reams of paper for the printer, right? The office printer.
31:48
So whoever’s gonna responsible for buying is going to call up the supplier and say, Hey, we need another two cases of, uh, printer paper. So this person can say, fine.
31:59
He’ll ship them out. there, will be delivered in a week or whatever or a day or whatever that is.
32:03
And then, in a short time after that, there’ll be an invoice in the mail or e-mail, whatever, Then the business will pay the invoice. So what you want to do, what if it’s a new company, is you want to pay the invoice right away.
32:14
If this has already established, you’re just picking up, picking up as a supplier from an asset you just bought.
32:20
It’s already established. What you’re trying to do is establish credit in your new business name.
32:24
So you can easily make accommodations for that.
32:27
But, what I found is, you get better results. If you pay the invoice right away, like within five days, don’t wait, 30 days.
32:34
Don’t wait the whole term, the whole net 30 terms.
32:36
So, what will happen is, the supplier will report the payment, two, Dun and Bradstreet, your credit file, Dun and Bradstreet, which is actually your company’s file, that’s how you do it.
32:49
And then, at some point, after about 4 to 6 months, it’s not that long, you’ll need about 3 or 4 of those types of accounts, those Net 30 accounts.
32:57
Right about that time, you’ll be able to go into a bank.
32:59
Probably, the Bank where you’re already banking with the LLC, you’ll probably be able to open a line of credit without being the personal guarantor. That’s the key thing.
33:07
Don’t ever be the personal guarantor, I don’t care if it’s convenient, don’t do it.
33:12
Make sure that your your SSN and your date of birth and your name are not being used on any applications do not use them.
33:19
You should even writing your articles it’s not permitted. No. member can can guarantee anything for the company should put that in the articles.
33:27
All right, so that’s what you do so you end up with, you know, 23,000, $60,000 of unsecured credit and then you can start building from there.
33:34
And so, Just because you have the cash to pay for something, that’s not always a good idea to do it. Maybe you want to do, because it’s easier, but, in the long run, you want to have plans on getting financing.
33:45
Business credit is a great way to do it.
33:49
It has other uses.
33:51
There’s other types of financing though. You’re gonna find more useful like joint venturing. You want to be able to bring in a partner, someone who’s going to put in a million dollars, and he’s gonna get a percent back, and then he’s gonna, he’s going to be bought out.
34:03
Right. That’s really cool financing. You could do a lot of things with that. So, you’re gonna use other people’s money. You’ll see that you can do that quite easily, once you have a business up and running, or buy something that’s already going.
34:13
You can also use other people’s resources. Sometimes you don’t need money.
34:17
You just need to use maybe someone’s facility on his land, or, yeah, a tool, or some equipment, and you can set up terms for that.
34:26
So, anyways, we can get into more financing, but really, you want to keep in mind that just because you’re super-rich now, doesn’t mean that you should just pay cash for everything and leave it at that. I think you should have part as part of your plan. As part of your asset management or wealth management plan, you should have a way to get into debt using your company’s just without a personal guarantee.