Episode 079 – STRR – Interview w/Attorney Carolita Oliveros on LLC Protection – P2

We continue our amazing interview with attorney, Carolita Oliveros, where Michelle and Carolita discuss LLCs and most of the questions you could have in regards to LLCs.  What are the advantages of having an LLC, especially in regards to Real Estate?

 

 

Transcript of this Episode:

Hi, this is Michelle, the master of money mindset, and you are listening to BNB dash boss podcast.

 

And in today's podcast, it's Friday, which means it's a replay of the short-term rental revenue podcast. And we are listening to part two of Kara Leda Alavarez interview, where she describes to us LLCs and care is an attorney down in Tucson and a very dear friend of mine. So let's take a listen. I'm going to pop in maybe at the end of these episodes right now.

I just want you to enjoy, we're going to continue. Our interview with Kara Leda. Alverez my friend and attorney who is telling us the amazing things about LLCs and the advantages of LLCs, especially when it comes to real estate. Also going to be talking about other legal entities, like multi series, LLCs, corporations, partnerships, nonprofit, corporations, trust, living trusts.

I mean, she's going to go into all of it in this part of the interview. So if you listened to the first part of the interview, go ahead and fast forward through the next couple of minutes, because I'm going to reintroduce Carol Lida, and I'm also going to go through the legal disclosures. And if you've already heard that you don't need to hear it again, but if you want to listen to it, go ahead and listen to it.

Otherwise you can just fast forward a little bit and let's get started on. The advantages of LLCs, especially when it comes to real estate and all the other types of legal entities in this part of the interview. So not only is Kara Leda, my friend, my mentor. And a business partner we've been in businesses together, but she is an author speaker international business attorney.

She focuses on work with clients and international businesses. E-commerce international manufacturing, distribution, marketing, marketing of products and services. I mean, she's huge just in the technology and intellectual property. And real estate investments, of course, asset protection. So Karoleena holds a bachelor's degree from the university of Florida, a master's degree from the university of Texas at Austin and a Juris doctor from the university of Arizona college of law.

She's amazing. I mean, during the past 30 years, she's done so much. She's been a faculty member for the American law Institute, the American bar association, distribution and marketing seminar. She's been a faculty instructor in the Maguire entrepreneurship program at Thunderbird, the American graduate school of international management, a faculty member in the best brilliant ideas, business plan, contest, and author of courses on leading a nonprofit organization, instructor and coauthor of the rich dad, personal finance courses, which she also co-authored for the rich dad.

And she's the founder and author and developer of seminars, workshops, educational material, coaching programs, recession proof, financial strategies, recession proof, investment strategies. She's vice chair of the Southern Arizona district export council. It's an appointment of the U S secretary of commerce and she is past chair of the Arizona world trade fair and past chair of the Tucson metropolitan chamber of commerce international trig.

She consults with numerous investors and companies on establishing foreign entities and begging relationships, asset protection, residencies, citizenships, international distribution channels for products and services, business development, technology, and intellectual property protection, real estate, and other legal matters.

And she is frequently a speaker in conferences, seminars, and webinars. So this is my friend, my dear friend, and mentor Carlita for the listening audience. This is not legal advice. This program is for education purposes and to kind of give you some ideas and some guidance on how you can proceed, what your options are, but every situation is an individual situation, you know, regardless of what the textbooks tell you.

I can tell you from 35 years of experience, that every situation is a custom situation in one way or another. So you really do need to seek good help, good legal help, good financial help. Take the information that Michelle and I will give you today and put that in your toolbox and use it as part of your tools so that you will be guided to know where you need to proceed to next and how you need to present.

But this is not a legal solution for whatever your individual problem is. Right. You know, people say, I can't afford to hire an attorney or I can't afford to do this. And my answer is you can't afford not to. Yeah, you really can't. You need to do it. There's some things you need to pay for and it will pay for itself over and over again.

And that, that is definitely legal advice. Good legal advice like is that I'm like, Ooh, well, precede that with good legal advice. Oh, look. Advantages of the LLC, especially in real estate investments. There's a ton like, go ahead, hit on those because holy cow, wow. Well having LLCs and I love how easy they are.

Well, first for me, they seem easier than almost any other. Any other way to protect myself. Obviously I have insurance and I buy really great insurance and I don't just lean and rely on Airbnb's liability insurance. Their million dollar liability insurance is just that. And liability insurance is only for liability guys.

And that means that if something happens to somebody else, it's going to cover that. And the liability you have towards them if they got hurt or something, but not necessarily you. So if your house burns down, good luck with that. Good luck with that, because that is not covered under liability insurance, unless somebody got harmed doing that.

And God forbid that would happen. But having the advantages of having an LLC, what, what are some real estate advantages? Well, Michelle, I mean, look at it from a business point of view, you're running a business. Right. Whatever you're doing with the real estate, it's a business. So you're getting all of the deductions, you know, I know I'm just sitting there going.

Yes. And, and they're even more now. I mean, you know, politics aside. Okay. Because we're not talking about politics here, we're talking about what does the tax code say? And after the new amendments to the tax code, there are even more advantages that you can do. And to consideration for tax deductions, but you run it like a business.

I mean, the LLC can pay for you. Health insurance, it can pay for your car insurance, it get paid for your car. It can pay for your car. I mean, my, my company owns my car. I don't own anything. Which is part of the reason that you set yourself up in a particular way. Exactly. Because you don't want to own anything in this house that I'm renting.

Yeah. I mean, you know, you're writing off part of it. Exactly. So. Uh, there are, I don't even know that we've got enough time to list all of the advantages, but if you are doing it right and you're running it like a business, then you're getting all of the tax advantages that are in the IRS, the internal revenue code for business deduction.

Absolutely. And if you have like a partner or a spouse who is an attorney or a doctor, somebody with a higher income, an above average income, their tax at an incredible tax rate, when you make that much money guys, and if you have one, just one of the partnership, just you, you know, if your spouse is a doctor, my husband's a doctor.

And so me being real estate professional. I bring our taxes down. There are times where we're paying instead of the, you know, above 30% tax rate for him, my taxes because of my real estate properties, we'll bring them down to 12%, 10%. And I remember one year we even hit 8% because we had so many properties that we were writing off all the deductions for, and it's legal, it's legal to do it.

They're taking them. They're depreciating every single thing in those properties that you're holding for two years in. And you can write them all off and lower your tax bracket. And that is exactly right. And it's not tax evasion. No, it's not tax avoidance. Nope. It's legal tax deductions written into the internal revenue code.

So there's absolutely no reason why you shouldn't be taking advantage of that. That's what the code is there for. Right. The reason why they write these tax codes or the reason why I'm Kiyosaki used to explain to us was look, the government needs you to do things that it can't do. And that's, you know, things like providing jobs with businesses or providing housing.

And so they create these, these incentives so that you will do what needs to be done in a community. And so you're just doing what they need you to do. You're you're serving people. And when you're serving them, you get these tax advantages. Well, and you know, Michelle, I don't know whether you're doing it now.

I think you were doing it at one time, but if you've got children, you can hire your children. To work in the LLC. Now they have to have a real job. I mean, they can be filing or they can be cleaning up there on the cleanup crew for your BnBs or, yeah, we had painters. We had, um, we had them stuffing envelopes that when we were doing all our marketing's up, I mean, my kids have done pretty much everything inside of a business.

And even my granddaughter. I had, when she was an infant, we took pictures of her and used her pictures for promotional reasons and paid her for allowing us to photograph her at well. And it's true. And that's valid and you keep records of that. And you have the promotional literature that shows exactly.

Absolutely. Absolutely. You know, I mean, everything is documented. You're not trying to pull the wool over anybody's eyes. No. And you've got a job description. For your kids, for whatever jobs they're performing and they're getting paid for. So you're actually, again, being able to take illegal deduction for paying somebody, to perform a service for the LLC, which is a tax deductible item.

And that's another way that you're bringing down the tax burden because those are deductions. So they come off the bottom line. And completely legitimate, completely plus, and the other thing, and I don't ever wish losses on anybody, but, you know, startup companies in particular may or may not make a profit.

I mean, some startups are lucky to break. Even at the beginning of the first year, most startup companies have a bit of a loss of one kind or another mainly because they underestimate. All of their costs are going to be when they do their projected budget, they don't budget enough. And they aren't many times they're not capitalized sufficiently to have enough money to cover all of the costs, but you can get nickeled and dimed to death.

If you're just starting out on something and you don't know the ropes of exactly how to do it in the most, cost-effective. So if you take a little bit of a loss and it's in an LLC, that loss is eligible to be written off against all other income that you've got. So your husband's income that loss can be written off again.

Exactly. Not interest from bank accounts or dividends or whatever. You can write off that loss against all other income, which let me tell you, sometimes it turns out to be a huge boat. Yes, it has saved us thousands and thousands in taxes and theirs. And I love it when I, you know, when it's in a program and you can take it off and you go look what happens when I take the properties off, but the properties back in, but.

Hello, real estate. It's literally my favorite thing. Well, let's see. Let's see. Let's go on to like the different types of legal entities, um, that protect our assets, you know, like multi series LLCs and things like that. Do you want to cover those? Oh yeah. I love multi series, LLC. I'd love. You're the one who taught me about those.

And I know, I remember, I remember sitting there and I still have, well now I can't find it because of all the moving boxes, but I still have somewhere in one of these boxes, the original, I think, napkin that I drew

all the little squares, little squares that you had me draw for this. And I was like, okay. And you're like, okay, now do it like this. So you want to explain. Sure. Sure. Not all states have a multi series law. I let's just start from there. Okay. More states now I think, I think we may be up to 16 and to be honest with you, I forgot to check that number before we started this broadcast.

It was nine, but I think that it's now up to about 16, but in any event, that'll just give you an idea that not all states have it. Arizona has just implemented while there I'm going to it. Seminar next week to learn all about the new LLC law in the state of Arizona, because it's been amended. And even though Arizona's not going to have series LLCs as part of the entities that you can set up in this state, they do have now a whole provision in our LLC law that says, okay, if you come in from Nevada, for example, which does.

Uh, multicell LLC or Delaware, which does have a multi-center LLC, if you, if you're buying property in the state of Arizona, for example, through one of your series. Okay. And I call them baby, baby LLCs, you know, it's too bad. We don't have a graphic on here. Michelle, maybe we can send out one or you can post I'll do a PDF for everybody to know.

So you've got a parent up at the top of the. Graph you've, you've got a big box that your parent, LLC, and then you draw a little line down from that and then a straight line horizontally across, because those are going to be all your little baby LLCs coming down from that horizontal line. And you can have one, you can have 10, you can, I mean, I've not run into a law yet that had a limit on how many you can have.

I think from a practical point of view, you don't want to have all that. Multicell trees. You may want to break it out and set up different multi series to take care of different types of investments, for example. Right. But let's just say that you've got a parent LLC and you've got three or four or five little multi series underneath it.

If one of those multi series wants to come to Arizona and invest in short-term rentals, then you register that, that one. Little baby, LLC. You register that in Arizona as a foreign LLC doing business here. And you can do all of your investments or if you're not buying property here, that's, if you've got money and you've, and the property resides here, I mean, technically if you're doing short term rentals, depending on how you're framing those contracts, you might even be able to do that from Nevada and not even have to register it as a foreign entity.

You know, we'd have to take a look at that on a case by case basis. But so that's what you can do with those little multi series. And they're all independent. They don't bleed through to each other in terms of liability, or even in terms of taxation. Each one of those can be taxed separately. They have their own liability, which means you can set up your own insurance scheme for each one.

But it's all part of this holding company. If you will, if you want to look at it that way, or if you want to put a name on it, then that parent, LLC, maybe you could call that the holding company and the holding company has all of these baby LLCs under it. They're all independent. They're all operating in some way.

They're all holding various investments, real estate investments of one kind or another. I mean, maybe you've got up a couple of apartment complexes, right? One of the series LLCs and you call them series ABCD or one, two, three, four, or you name them according to the name of the property that's in them.

I mean, there's, there's no restriction on how you can term it. Great about this, especially with, especially with something like short-term rentals, you can have. The property is being held in one, you know, one LLC, you can have properties that you rent in another business of another LLC. You can have the cleaning company that you run that services, these LLCs.

I mean, these, all these companies will be different and yet working extremely well together. Right. But if somebody does of. You know, um, that that would hold the company liable. It could only touch that part of the company. Do you understand? Yeah, that's a good visualization. And then you can have all of these other little things underneath them all.

I mean, with the examples that Michelle just gave you, the interesting thing about that. That if you've got one of, one of those LLC set up as a cleaning company, that's providing a service to maybe two or three of your other LLCs, and it's a way to shift income so that you can expense out, you know, because maybe the, the, yes, maintenance company has a lot more expenses than some of these others.

And so you're shifting the income over to where it can be even doubt so that, yeah, so you're not paying a bunch of tax. So I, there are all kinds of strategies that you can use. You know, that's the fun thing about all of this, and I love getting onto a white board with a magic marker, all these little pictures out, because it's just so interesting.

It's strategic, it's all strategic, various fatigue. So you have corporations for profits. Yup. And then non-profits I, well, I made a distinction with for-profit corporations because obviously that's a legal entity. Well like Pepsi co or like any fortune 500 company. I mean, even small companies, you know, when I first started out right after law school, I, I was working for a manufacturing company that manufactured electronic chip.

Which they sold worldwide. And eventually those companies, those for-profit companies, I know you, all of you have heard about IPO's initial public offerings. You know, you can go from a private, Uber just did yesterday or something. Right, exactly. Yeah. You know, I mean, eventually you build up the business to a point where you can do an initial public offering because you've got enough sales or whatever, you know, you've got enough.

Where you've got people who are willing to underwrite the public offering and want to become shareholders and, you know, and that happens with rates. It happens with all kinds of real estate entities. The, the one thing about corporations is that you do have shareholders, not members. So there's a difference between LLCs and corporations.

Corporations with regard to real estate. If the corporation owns the real estate, then the corporation gets the depreciation, not the shareholders, which is different than an LLC, because if an LLC owns the properties, then the depreciation can be flowed down through the member, to the members on a pro-rata basis, depending on what their membership interests.

So the members get the benefit of the depreciation and that says instance, but in a corporation, you don't, the corporation gets the benefit of the depreciation members get paid, maybe some dividends. If the corporation is making enough money, the corporation might pay dividends. Like all, you know, just about every fortune 500, I guess it's fair to say.

Every fortune 500 company pays dividends to their shareholders. Now w you got LLC, is corporations profit or a for profit and non-profit. And did we touch on partnerships? Um, we've, we've talked about them sort of only from a tax perspective, a partnership is a separate type of illegal entity, and most states, including Arizona have partnership rules, they have a, a partnership act and.

I believe technically you register your partnership with the secretary of state, but don't hold me to that. I'd need to look it up again. It's been a while since I've done it. Okay. You don't register your partnerships with the Arizona corporation commission because technically a partnership is not a corporation or an LLC.

Okay. But they're limited partnerships and general partnerships. The general partner is the one with all of the liability. And then the limited partners, if it's set up that way with a general partner, which many, many huge real estate developments are set up that way, they've got a general partner and then they've got a bunch of limited partners that have funded the development, you know, like Rancho Visto.

So for example, as a whole series of general partnerships. Okay, well, I know Rancho Visto, so is I was thinking about either rubs and communities or, um, sunset. Or something like that. Those also may be set up as general, a number of different general partnerships with limited partners under them to fund various sectors, because what happens is they sell off huge plots of those lands and then various construction companies come in, or our general partners come in and build out a particular section of the development.

But that just means that the general partner has all of the liability. The limited partners only have liability to the extent that they have put in whatever their contribution is, their investment dollars. Now, where I learned to play with trust, when I was out in Florida for awhile, there was a real estate, uh, Rhea, you know how we have our as Rhea out here, they had a RIA out there and this gentleman named Larry horrible came out and he started talking about.

And how you can do land trust and how I was just going to ask you if it was land trust. Yeah. It was land trust, and he was, he was like, amazing. First of all, because he was like a negotiator. Like crazy person. Like he was just amazing. And he was coming up with all these really unique ways to create offers and everything.

But then when he sat us all down at lunch, one time, he was telling us about how to structure things in trust, like living trusts and land trust. You know, the difference between custodians and beneficiaries. How you could pretty much hide your identity and never be seen again. And he was like, and here you just have to have an attorney you trust.

And I'm like, I have an attorney. I dress,

this is awesome. So what is the difference between like a trust and LLCs and corporations and, and what is a land trust and who did that and why did that. Well land trust, again, not all states, as far as I know, I've run into a few states that that don't have land trust, but it is a way to hold properties so that you don't show up as the beneficial owner of the property.

And that's really in truly what happens with almost any kind of a trial. Well, maybe with the exception of living trust, because living trust are a little bit different animal, but a trust in general is a legal entity. Okay. It's a formal entity. It has, um, a trust document that sets up exactly what the trust is for and who the beneficiaries of the trust are.

And the interesting thing about trust is that they're not registered anywhere. So if you set up a trust for asset protection purposes, for example, to hold properties in or to hold LLCs, a trust can own LLCs. It can own properties. It can own corporations. And my advice is don't put your name on the trust, right?

Call it something else. It's not like the, the living trust that we have for our houses, for, you know, as a married couple, you're like, okay, this is a trust that holds your house documents. In case you pass away, you can just hand this briefcase of a trust this entity over to the next custodian. Correct.

And then any of the money goes to the beneficiary. Correct? Yes. Right. So everything, it goes outside of probate, which is why you want to have a living trust. Living trust are not exempt from lawsuits. Somebody can Sue a living trust, but it doesn't go through probate. So whatever properties, bank accounts, cars, houses, whatever you got in there.

I mean, this could have saved the American farmer. Exactly. That's literally what happened to the American farmers. It was crazy what probates did to farmers back in the day. Um, remember what was that? Remember? They had farm aid. Remember when it was like, it was really happening. There was like a big breakdown in the American farm Institute.

Well, they did because they didn't have the exempt, the, uh, exempt state tax. Limits set high enough that farms could pass to the children without having to pay 55% estate tax. Yeah. So for instance, guys, imagine your grant, your great, great grandfather bought a thousand acres or more, you know, 10,000 acres of farm land in the middle of Iowa someplace.

And he paid a dollar, an acre. And then he lived to a ripe old age and then when he died and he passed away. Now that 10,000 acres was worth a hundred thousand acre and the government wants 50 cents on the dollar. So what happens and that's literally what happened. Right. People were like, how the hell are we going to pay this?

We're just poor farmers. But the land was worth so much money that these bankers and all these, um, basically, yeah, the big conglomerates came in. They came in and just took over the farm land because, but all they would have had to have was a trust. One, one trust would have helped them out when even a living trust.

Correct. It didn't have to be a land trust. Living trust would have helped them. Yeah. Or they could have put it in an asset protection trust, which would have been even better. Yeah. Um, but yeah, I mean that's, and that's exactly what happened in the kids. The farmers, children wound up having to sell off the land just to pay the, the estate tax on it.

Just the federal state tax burden. Yep. So, but now the estate taxes. Now the limit, I think it's 5.2, 5 million now, um, that is exempt. And then you pay over that. So at least it's a little more reasonable. Yeah. They've helped them out a lot because of lands is really gone up, but I love trust and I love international trust.

And so when we talk about international on a future at a future time, we can talk about international trust and how that. Are helping to protect as well. Um, definitely writing this down cause I'm like, Ooh, international trust. I don't know about those yet, but there I, you know, trust are a great vehicle and it's just a shame that more people don't know about them.

I have to say, though, if you've got certain kinds of an asset protection trust, I mean, if you've got a dynasty trust or something like that, you need to have a certain amount of assets in the trust to make. Worthwhile to have it because you know, there are fees involved, right? Maintenance fees to keep the trust up.

I mean, the trust still has to pay taxes and you need to have a trustee. Who's probably, if it's a really big trust, who's probably going to charge you something, charge you a fee for that. But the other thing Michelle is which we didn't have on here. And sometime this'll probably be a good time to talk about it at a different time as well.

And that is family offices. For example, getting involved with a multifamily office, if you don't have enough money to set up your, a family office of your own. Although small family offices, they're all over the place and their investment vehicles, and they do a lot of real estate investing. Oh, cool. Now I don't know about small family offices.

Well, you and I will have an off off-camera discussion about it and we can do a different podcast on that sometime. Okay. I love that. I love learning about new stuff because then Ben, it goes off in this like, okay. Time to play. I'm playing. I just, one of my corporate clients is doing, uh, we're we've been involved for about the last six or seven months on doing a corporate raise for the company because they're an expansion.

And we just got a family office to invest in my corporate client to put up some money for my corporate clients. So, I mean, there's a, there is so much money out there, Michelle. I mean, we talk about IRAs because that's something that most people have and they have some money in there, which they want to use for real estate investing because putting it in the stock market may or may not be a good thing depending on what the stock market is doing.

But if you've got. Self-directed IRA. Then you can put your IRA money into a real estate investment or go in with several other IRAs and form an LLC that all those IRAs are members of and buy property. Yeah. They always, when you go to equity trust, and they're teaching you about that, they always have REITs and people who are forming a bunch of those where everybody can take them draw from there.

There's a self-directed IRA into them, but family offices are a. Or a different type of a vehicle and there are. Trillions of dollars and family. Oh, worldwide. I'm telling you it's getting easier and easier to borrow money and to find people to invest. And I know, I mean, people will think that, oh, well, you're just, you've been doing it a long time and I'm like, no, seriously, like you can go online.

You can find websites. And all you have to do is put your business plans up there and people are willing to invest money in you. There is a crazy, because here's the deal, you know, how to invest and you know how to do something they don't. So we were talking about Stansberry before it remember, and their emails that were making us crazy.

And one of the things I love about Stansberry is I don't know anything about stocks. I mean, very, very little about stocks and holds and puts and calls and things like that. It's just, it's another, you, you do what you know, most of the time, but I do know that I need to diversify. And most people, when they start earning money, they know they need to diversify.

And if they don't know about something, they're willing to invest in people who do. So, if they don't know about real estate and you're doing something and you show them that you've got a proven track record to make money out of it, a real estate investment, this is what you've done before. And now we've got another operation.

And you show them that they're like, great. I know nothing about real estate, but I need to have my money someplace else too. You know, I don't want all my eggs in one basket. This is great. So, I mean, in this small family, um, the small family offices sounds like another great opportunity to, to borrow money, especially because, yeah, I mean guys, when you're, when you start to multiply, there comes a time where.

You're going to run out of money and you're going to have to use other people's money. You, you know, you you'll be moving too fast. And then how do you explain that? And Carolina, you know what I'm talking about? Oh yeah. And then you get into, yeah, it's crazy because you'll be using your own money for a long time.

And then one opportunity comes, another comes, another comes and now you're a super cash shy, but you, because you got the majority of your money in this and you're fixing up this and. Honestly, that is when the flood gates of opportunity open to you and another opportunity. And you're like, damn, you have no cash in my account right now.

But you're like, oh my gosh, this is a great opportunity. And that's when you learn. Those opportunities. Don't stop coming to you because you're out of cash. You need to use other people's money. And so, I mean, don't be afraid because especially when you're starting to expand, it's our, it's our limited mindset that really keeps us moving in small, small units.

And you've got to realize that. Business opportunities or business opportunities for everybody that's like with the IPO, you were saying Carolina, right? People want a piece of this. They will want a piece of your company, and they'll be willing to give you money to have a piece of your knowledge and a piece of your profits.

And so. I mean, it's just, it's it, it is right now, it's getting so easy to find people to invest in stuff that I'm just like, I'm flabbergasted. I'm like, where were all these people? Well, here, you know, here's the reality. The reality is that we've got lots and lots of people because of the worldwide political environment, because of what's the ups and downs and the volatility of what's going on around the world.

Yeah, well, her holding onto cash. Yes. Lots of people are holding onto cash. I have people tell me that almost every week that they don't know where to put some investment money. They need to get it out of the bank because we all know it's not safe in the bank. Nope. Or you want to get it out, but let me just.

Throw a seed for thought out there. And that is that when you put together your little business plan, however, formal and sophisticated or unsophisticated, that might be, I want you to write down on there, networking Bo yes. Putting down, getting into all these groups of where you find these people. Okay. If, you know, you want to get involved with family offices?

Well, there are three or four major family office organizations just in the United States that all these guys belong to. If you want to get involved with them overseas, they're even bigger overseas because family offices were born outside the United States and, you know, came that money came here. So. If you want to know how to get involved with IRAs, there are all kinds like well interest and the companies that act as IRA, administrators, they all do seminars.

You, you start going to those seminars and networking with all of those people and building relationships because they will come to you and say, you know, I've I like you. I like what you're doing. I've gotten to know you at these meetings. And I just happened to have 150,000 sitting in the bank that I don't know what to do with.

Wow. And that's it. I'm telling you everybody. Everybody that I've ever done deals with was I met through some kind of someone else that, you know what I mean? Like, I mean, and we talked about this and when we started this years ago with Tony Robbins and we still know people that we went to that first event with, and we networked with these people who met, you know, who introduced us to these people.

I mean, it's just, this huge is a very, very small world. And like you said, they really want to invest with. And we're willing. Number one, number one, do not throw up ever, do not ever throw away your Rolodex, do not ever take a card out of it and throw it away. Or out of your address book on your phone or your computer.

I am warning you, you will regret it. You have business cards from years ago, with little notes about the people behind them, because anytime I met somebody, I would write on the back. This is what we discussed and that literally triggers in my mind. I can almost see the person, almost always that information is gold and it will pay dividends.

If you start mining that gold. And like you said, more and more, not what is the us right now is making 1,700 new millionaires every single day. Guess who's beating up. Who is the next biggest capitalist next to the United States. And most people, it shocked the shit out of them. I'd say China. Yeah. That's what China is.

They are more capitalist than, than California or California is more common in the valley. I don't know about the rest of California, but Silicon valley. Yeah. But they have lifted more people out of poverty and into the middle-class. Then I think it was like more than 50, some percent of their people.

They realized that we have to work like capitalists. And so now. They're creating, not just millionaires every single day, like the United States, every five days, they create a new billionaire in China, a new billionaire. And I mean, they are running their government, like the old America, they based it on our capitalist society and said, look, we have to embrace this entrepreneurial.

Love and this gift and allow people to, you know, make money and own businesses and run them like capitalists. And that is why their economy is booming. That is why they're booming. And, and we need to take back our reins and take care of our middle-class and bring them back up because what happens when we lean more, the other way, as we smashed that down.

Next month, I'm giving a whole webinar on what happens. You've got the history of money. One that I did well, part two of that is. What's happening to the, to the middle-class and it's all over the world. I mean, it's not just in the U S but it's everywhere. I'm going to do a whole webinar on it because it's, we're at crisis point.

Oh. And that was in, you saw that before we went to Venezuela before they fell before all of that happened and there was no middle class left and Venezuela, it was incredibly poor people living on those mountains in those huts. And then it was the incredibly wealthy, there was no middle-class and you've got to think of it this way.

How many beds can one rich person buy for their home? They, they only need one bed guys. It can be a really expensive bed, but they only need one. In order for commerce to work, you need people spending money and that's your middle. Yeah. And that is the only thing that keeps America afloat is the middle-class.

And while we are in this crisis losing more and more, that's why we need more and more jobs and the jobs need to pay more and more, and why we need to have more and more opportunities for businesses to thrive in the United States, because we have to save our middle class. We have to save them because if we don't, we will end up just like Venice.

Yeah. I mean, otherwise Michelle and I will be doing the next podcast from off shore somewhere.

There was a couple times where I was like, looking at America, going I'm packing my bags right now. This is not working. I was ready to leave a couple of times. But that's what they forget that you go, oh, we're going to tax people's 70%. And you're like, yeah, how long is that going to last? It's like, I'm waiting for the city of New York to figure that out.

I mean, this one's like guys, rich people can move and they do. And they do Francis already illustrated that France instituted a 75% wealth tax on the wealthy and France and within five months, A hundred and some thousand wealthy people who were subject to the seventy-five percent tax moved to other countries.

Yeah. We moved out of France completely. They will. And you know, people keep, you know, they'll say stuff and they'll go, are you willing to give up your citizenship? Uh, yeah. As a matter of fact. Yeah. It's like if it came down to it and it all went that way. Yes, yes. That's what they do. Chicago has a huge mass Exodus going on and Illinois, because they raised all the taxes for the wealthy there.

So all the wealthy people are moving out and when they do. You know, middle-class with a tax burden that they can not carry. Right. They just can not carry it. And it's, it's sad. Cause they're, you know, trying to do. From Peter to pay Paul and it's not working because Peter packed his bags and he's gone.

And he took his money with him, Florida. He took his money with him. He did. He went to Texas where they have no, no personal income tax. Exactly. Exactly. Well, we've got okay. So let's see. We're we're we were talking about sole proprietors versus LLCs. Is that where we left off. Yeah. Okay, cool. So a sole proprietorship would be somebody like Kevin, right.

With a business like, uh, an eye doctor or somebody? Yeah, absolutely. Absolutely. Or, or even, I mean, it could even, it can be anything Michelle. I mean, uh, you know, a mechanic who runs his own little auto shop, any type of an entrepreneur can be a sole proprietor. Well, one of the typical ones and it happens every time that the market changes, you know, either people lose their jobs or they quit their jobs and they become consultants.

Well, that's another type of a sole proprietor entrepreneur, you know, unless they set up an LLC to wrap themselves up in some protection for liability. If they're just out there practicing whatever their skill is, selling products or making things. Um, yeah, one of my friends is an incredible artist, incredible artist, and she does a silk screening.

Ooh. You know, and she sells all of her stuff all over the world off of her Facebook page. She's an entrepreneur and she's a sole proprietor. I keep telling her, I said, look, I won't even charge you for the dad. Got my LLC. Let me just set you up an LLC. You've got to have an LLC. You can't sell. Why not make sure she has a business page and she's not doing it off of her personal page.

She has a business page. It's gotta be a business page on, on Facebook or they will shut her down. Yeah, no, it's a, it's a business page, but she is selling all over the. Wow. All her silk screening and she does, you know, incredible work and it's just gone like hotcakes, but under the protected is w so what's the difference between the sole proprietor and an LLC?

Well, the sole proprietor is, I think I mentioned a little earlier in this presentation is that, you know, they are 100% personally liable. There you go. Something goes wrong. All of their assets. Everything, their bank accounts, their cars, their houses, whatever it is, they own the, you know, the equipment that they use to do their business with.

It's all up for grabs. If somebody were to Sue them, or if they missed a couple of payments at the bank or whatever, and the bank came in and foreclosed on their, you know, on a loan and took, put a lien on all of their properties. I mean, it's all personal. You lose everything personally. Wow. So it's not a good position to be in.

I mean, I know that PR sole proprietors were at one time, the backbone of our country, Sprite, little Lola mom and pop everything drugstores and, and just the, all the stores and all those things were. But we're a very litigious society now and have been for a number of years and it just does not pay, especially if you can file for $50.

And I go, Hey, and set yourself up with some protection around you and get, you know, have the LLC pay for all of the expenses for your business. I mean, it's just, it seems to me. From my perspective, which may be different than other people's. But from my perspective, it seems to me a no brainer. Why wouldn't you?

Exactly. All right. I'm going to stop care leaders interview right there. Because when we come back, we're going to talk about sole proprietorships versus LLCs. And then we're going to look at the big picture about estate planning and protection of your assets through trusts and things like that. So when it comes to.

Retiring those types of things that we're going to save that for the next episode. So I want you to please, please tune in. And I also want to thank you for listening today. Hey, you can get the show notes by going to bnb-boss.com and clicking on these three episodes. The last episode with Carolita was 77.

Then this is 79 and next week we'll finish it up at episode 81. She can get all three of the show notes, all three of the papers that will kind of highlight everything that Carolina has talked about in this episode, by just going to our website. And there's a lot of extra free tools there for you to use.

Thanks so much for listening.