Bring your CPA and financial planning team together

Source transcript, with paragraph breaks added for readability. Speaker identities have not been inferred. Verify quotations against the recording.

I know the CPAs are going to hate me for this, but they can't technically because they know I'm right. That most CPAs actually cost business owners multiple six figures a year by just what they don't know. 90% of my guys are following the CPA advice right now. And the reason they're actually even coming to me is because they're frustrated from that advice. I just met a doctor the other day and he was paying almost a half a million in taxes and he's making like 1.5 million. It's like it hurts to see that. If you're paying about 200k in taxes and it's pretty consistent, you could expect to work with maybe once every two years and you would be fine. What was the before and after? Taxes are less than $100,000 a year and they were in the category of paying at least a million dollar a year that there's always a way to reduce your taxation. There's always a way. I know people say that, oh, I've done everything. Nope. No, you haven't. There's 18,000

tax strategies out there. So, welcome to Beyond Online. I'm your host, Joey Alon, and each week I sit down with elite experts working with top business owners and ultra wealthy families to reveal practical strategies that business owners can use right now to keep more of what they earn and pay less in taxes legally. So my guest today is Ait Core, an investment adviser, author and founder of fractional family office and global investment capital who helps entrepreneurs build family office structures with bespoke tax strategies. A is driven by legacy not just for her clients but as a mother building generational wealth and she's known for helping business owners do something that most CPAs can't which is turn tax payments into net worth through strategic investment planning. So welcome to the show. What a mouthful right? I'm so happy to be here. Thank you for that amazing introduction. Um, it's actually been a beautiful journey and I'm really happy to discover strategies today for your audience. For sure. I mean, if you're a US business owner watching

this, I think you're in for a treat. And I want to start with an opening question, which is something that you told me when we first got in touch together, and it's something pretty provocative, and I think it's going to open the ears and the mind of the the the guest watching this show right now. So, and you I remember you told me that expecting business owners expecting CPAs to understand their investments is a fool's errand and that most CPAs actually cost business owners multiple six figures a year by just what they don't know. And that's a pretty strong statement. So, I want you to kind of dig deeper into what do you mean by that and how did you discover this blind spot? So, it's a I know the CPAs are going to hate me for this, but they can't technically because they know I'm right because they're they constantly say no to their clients on like, hey, that's not my job. And uh I've been in the industry about 10 years now to

understand what's happening to the CPA and it's not fair to them either. Um it's not their fault. The industry was set up like that. Financial services are siloed industries. Um so, a CPA's job is to actually look at you retroactively, see your activity, and then report to the IRS. Their job is not to tell you what exactly to do in advance to take care of taxes in the future. So that and where do I, you know, where do I get off making these bold claims? It's because of my licensing. Um, I have a series 65 which helps me run my wealth management. I have a real estate license which helps me do commercial and real estate deals on the floor. And I also have an insurance license which I understand the insurance companies. Um, and all of these licenses gave me the ability to give CPAs CPE credits based on the strategies that I was telling them. So that's how I ended up in the industry about 12 years ago where I I was looking

for products for myself and I understood, wait a minute, my CPA and my advisor are not talking, but I am actually bridging the gap in the middle myself kind of making decisions in a vacuum. So it um it was an urge from the inside where I had to get licensed myself to understand the product. It's the chase of transparency. Um so then I started talking to CPAs and giving them continuing education credits and seminars and showing them tax strategies that included investment products like market products like your cash balance plans, like your life insurance, like your annuity products, even real estate um within retirement plans where you can actually defer your current income tax. So that blew my mind and I was like, wait, you know, business owners don't understand this and it's unfortunate because they're not asking the right questions or they're not aware that this can be done and the retirement plan community kind of starts at a 401k and kind of ends at a cash balance. But there is a whole wide

world past that situation for S corporations. And I think people are getting smarter and smarter with Chad GBT and they can verify these types of claims that I'm making now that a simple plan like a 412E uh or um a cash balance plan if you understand that thread will offset a significant amount of your taxation and that's just a deferral category. So there are other categories within the taxation world that can actually help your investments return better returns just by saving taxes. Um, and that's the industry that I ended up in 12 years ago, and I've just been fine-tuning it. I I call it a ven diagram of strategies where it starts with investments. It includes taxes and it also includes succession uh and philanthropy. And once we get into that sweet ven diagram, it's very easy to kind of mix and match our investments to our taxes to our goals. And that's kind of my my job as a strategist. Very interesting. And there's a lot of different paths that I can take right

now, but I think the one I'm most curious on is uh because you obviously meet with a lot of business owners every single day um doing what you just said. Um how much what's the percentage of business owners that you meet uh that you that you think of that they come to you and their entire investment or tax strategy is based out of what their CPA told them. Yeah. Yeah. I would say I would say 90% of my guys at are following the CPA advice right now. Some are and the reason they're actually even coming to me is because they're frustrated from that advice and they've kind of done the level one strategy. So I divide tax strategies into three levels. Um and this helps my audience also understand and the client to understand how to break down. The first level is that structuring LLC, S corporation, uh your retirement plans, your basic real estate investments, those that is your level one. Um, and a lot of uh people have actually crossed a million dollars,

done the level one, and they don't they've maxed that advice out. So, the CPA said, "Go buy more real estate." You know, it's going to help you. Okay, done. I have a couple of homes already that are investment properties. I have a 401k. I have a cash balance plan and all the level one strategies are burnt out. Now, what? So, this basic level one stuff is showing up and being helpful for even under under 2 million of income. But it's it's becoming very evident that once your gross revenue is passing that 2 million consistently and especially if you're around 10 million, it is it is a pain point. It's a sore point. So the the frustration level is quite high right now. And I think most of these guys are actually problem solving with Chad CBT and doing really well with that level one advice. No, I get that cuz obviously you can go like CPAs are doing a great job. Like that's what we always say. we're not just uh like stepping on CPA

like they're they're just one part of the team and most like if we look at like a football team they're kind of expecting your CPA to be the quarterback uh the the first line of defense the offense the kicker like every single position when in fact you should have specialists in different areas right which is where perhaps family offices come into play but my objection when I think of family offices might be like all right well I'm making a couple millions a year family offices are for hundreds of millions a year, right? Businesses, business owner making all that money, billions of dollars. So, who am I to think I need a family office? What do you think about that? Do you think there's a level of entry or anyone can need it? I love that topic. That's such a great question and I love to pounce on that question right away because that is actually the key. You like nail on the head. Um the the convoluted space of family office is um only there

because it's not regulated quite well yet. So, it's not your fault either as an audience to not understand what a family office is and to only know the institutional side of it. The institutional side is what you're hearing about those 100 million and up guys that are being chased around by, you know, say Credit Swiss, UBS, Goldman Sachs, um because they have big money managers. They have full on maybe even concier services attached to it. They might even look at your how are you going to realize your investments and that version of taxation. They might even show you some tax strategies. So, um I actually if you look at their websites, you'll see that they currently have family office sections uh for those ultra high net worth clients that are above 100 million. And that's been traditional. Um and I could attribute that to the Rockefeller family because when they first started, they kind of really retailed the model from like the kings and queens to down to the billionaires of today. Built their internal

teams because they're not going out and working with an agent here or CPA there and a financial adviser there. They're hosting their team, paying their salaries, and their entire job is to take care of the family, right? So, everything that takes care of the family. So, what I wanted to do as a I'm not going to say I'm a Rockefeller, but you know, on the fractional side, I wanted to retail that model for guys that are under 100 million. And I would rather even say they're faster investors and and understand that they want to get to that next 100 million to 200 million net worth and even maybe even a billion. Um, and those guys don't have enough tools. Um, and because I'm in California, it became rather easy to bump into these guys who are just 10 millionish, maybe just had an exit, looking for the ne next investments, high-tech employees, um, that make a few million a year W2 income. They just can't get away from these horrifying taxes. That's where I come

in and say, "Okay, let's offset how to do this offset." And the model is still the same. The model is still the family office. Got to have my advisors on one platform, but you want to fractionalize it, right? So you want you don't want them to be you don't want to be paying a couple of million in salaries. You want to be able to tap in, understand, strategize yourself until you get to that point where you need full-time employees. So what happens to that market? There's a big gap. Um and that's the market we're typing, you know, tapping into and and looking at private markets. So this is the private market side, the non-institutional side because the institutions are not really able to charge these guys a couple million bucks in fees. So they're rather less interested in what they do. You might get some vanilla advice at that level, but you're not really getting customized fingerprint advice and strategy so that you can really build it and systemize it into your family. You know,

generation one makes it, generation 2 usually loses it and that's the real pain point. So that's what I was trying to address and uh that's how I ended up in the family office space. So when you think about family office, think about these questions. Is this an institutional family office? Is this a family office that is run by just one single founder and it's only about their mission? So that's the single family office side. The multif family office side is rather different. It could be like five 10 families and friends that are got together and made an investment pot and they invest together. Those people they those will not usually let you work with them, right? Because they already have their group of trusted trusted people. And then there's the service side of family office. It's the same thing that the institutions are giving to these high ultra high net worth families but the service side has now become even fractionalized. So now you can see registered investment advisors offering these services. You can see

awesome uh um you know financial adviserss looking into more than just one service. So that side has become the service side of the family offices that are actually providing ultra high net worth um level services. So understanding the space is convoluted because it's rather new and uh only about 15 years old. So I expect a lot of regulatory changes and how you can protect yourself is to identify who you're talking to. So ask for licensing, ask for investments, ask for what what is your mandate? Are you a single family office? Are you multif family office? Are you service provider? Are you an investor? Th those are the questions you want to ask and then then understand in which category are you dealing with. So for business owners, it's rather easy to build the similar type of little trusted team of advisors if just because they're under 100 million doesn't mean they can't have a family office. It's a very long answer, but to understand the family office space, you just kind of have to understand

a little bit the history of where it came from. No, that's very interesting. And uh like just to again give you a bit of context our our audience obviously there's a lot of people making more than eight figures even some nine figures people that come to our and to our our channel and and and and share with us but the majority of our of our of our business owners I'd say are paying let's say between 50 to $250,000 a year in taxes right and this I think this is the market where they still they started with their CPA and then they kind of rode with it until they're paying that amount of taxes. and now they're at a point where they're like, "Yeah, I don't want to keep paying six figures a year in taxes." Um, do you think that's a good moment to kind of explore a fractional family office? Like, what's the next step? Once you feel like you're capped out with your CPA and you're looking, you know, there's more out there,

you're making a couple seven, maybe eight figures, um, and just want to maximize your tax strategy. What's the next step? Yeah, I would actually give that a two-step solution for that. So, you might not want to leave your CPA. might want to keep your CPA in house. Um you but you should look at a strategy play rather than just uh moving your CPA play. So if if you're capped out, you're paying like 100,000 200 in taxes, you you definitely are at a point where you could have a good understanding with like a strategist like me who sits down, has a conversation with you, you know, plans out with you what your goals are and then works on the strategy and tells you like the next 10 steps. Then it's a DIY. You take that plan, you work it out with their CPA, and you're by yourself. I've done a lot of that work. Um, in fact, if you're paying about 200k in taxes, and it's pretty consistent, you could expect to work with me maybe

once every two years, and you would be fine. You wouldn't need like that consistent service or a hands-on thing. Um, especially if you have a good steady team that you trust and you know that they are educated enough to be able to follow your five, six, you know, seven steps. and you might just need a few transactions or maybe you want a charitable setup or maybe you need to understand a philanthropy play. Um, so you it's it's more I would say a one or two time thing until you understand the strategies that you want to do and you're off to the races. Now, if you're paying a million dollars or more in taxes, that is a little bit more complicated. That is not usually a one-year engagement. That's usually a couple of years. We're trying to bring you slowly down. The worst thing you can do for the IRS is create this complex strategy that you know onetime easement sign off to somebody for a million dollars to offset your taxes. It's a red flag.

That's what you want to stay away from. So in cases with a million dollars or more in taxes, we're talking about efficiency check. Like you got to check your efficiencies across the table on something's wrong. Um because what the IRS is telling you with that amount of taxes is that you need to reinvest either in your business or you need to find investments that are suitable for you. And you're not doing that. That's why you have that problem. So million and up usually you need to be engaged for a couple of years to actually set the strategies to make movements to actually do the transactions to be able to bring those taxes down. But it's rather like a step down process. You want to not knock out more than a quarter mill to a half a million a year. Even that's pretty aggressive depending on which way you're going. But the intention here is not to pay zero taxes. The intention here is that you have other investments and other plans and other ways to

enhance your business um and reinvest in the economy. The intention is not that you're going to actually take all this money and go to Vegas, right? That's not going to happen. So we when we talk about tax strategies, one of the biggest thing to understand is yes, we can help you bring down your taxes, but that doesn't mean the money comes home to you. That means that you have to find another way to invest that money back into the economy or give it to the IRS and that's their job. They're going to invest it for you. Literally that's the point of taxation. Invest in the economy this way or that way. Yeah. No, exactly. And I think once like my biggest take away from what you said is and that's what we trying to preach a bit more on on this channel is it's the first thing is education, right? Like we don't get this type of education in school, in university or at all. You got to go get it yourself. And thanks God

that today it's a lot more accessible with things like Chad GPT or YouTube channels or everything that's online. But the first step is just getting educated because one thing I've learned through meeting with with experts like you and and and and all the network that I've been able to build with financial advisors and stuff is that most of the tax code were actually built for business owners if they actually know how to use it. There's like section uh like 162, section 412E, like those sections uh were made for people that makes a lot of money that h that to have that freedom to decide what to do with their tax dollars, right? and and you talk about a core concept about deploying those tax dollars into your own net worth or having more freedom about where those tax dollars go. Again, it's not about paying zero taxes. It's about deciding where those tax dollars go. Can you explain more about what you mean by deploying your tax dollars into your own net worth and how

can you get control back with the amount of money you give to the IRS? Absolutely. So the IRS is basically saying here are all the codes in all the ways you can plug and play and invest in the economy. So a 401k is actually a a section code in the IRS and it's telling you how the money should go in and should get invested so that you can get that tax break. All of these codes that you just mentioned plus things like 179 where you go buy a car, right? uh cost segregation like these are all IRS related codes that they have provided to business owners. You're absolutely right. W2s actually get hurt the most which is why the onus lays on them but with business owners it's much easier. You know the code is much easier. It's more flexibility. But once you have a W2, yes, you get kind of stuck. So that's why it's so important to build your own business on the side. Um but yeah, the IRS has basically given us

these section codes to be able to maximize investment in our economy. And if we don't understand that, it's kind of um it's kind of just blindly signing check blank checks to people and saying, "Yeah, do what do do what you may." And for some people that might be okay if you really don't know what to do with your money and you don't know how to invest it back into yourself. For example, a 401k um account balance plans. These are all just tax strategies. Um they're level one, but they exist and they're meant to do this. So, for example, if you are a business owner, you are looking to buy more equipment. You might be looking to buy out the building you're in. You might be looking to expand your uh e-commerce presence, right? There are so many versions of that acceptable expenditure that goes back into your business and actually draws down your taxes. That's just a very simple way of understanding is like how can I expand my business and if I'm expanding my

business, how can I invest more money? So, if I'm grossing 2, three million a year and I'm paying Uncle Sam about a million bucks, um, I'm going to be like, "Wait a minute, what what else can I do in my business? Can I buy real estate? Can I uh enhance my internal services? Do I need a better tech stack? Do I need to hire more employees?" All of those are actual tax strategies. They're built into the code to enhance your business. Um, and and it could be any asset class. It doesn't have to be a 401k. What if you're a business owner that doesn't enjoy the whole set it and forget it plan, right? Then then we got to understand that and plan accordingly. So that means you might want to actually buy business real estate assets because it aligns better with your goals. So that's why I'm very um shy in recommending people to a typical financial adviser or a CPA or you know as a problem solver and and I really am pushing

on building more strategists that understand that okay it is not just set it and forget it. uh if you want to make real wealth in the world, right? Uh if you do set it and forget it, there's no harm, no foul. You're giving the money to the IRS and they will do it for you. That's literally what's happening. Yeah. And and then correct me if I'm wrong, but what I've what I think I've learned with like the 401k, it's the basic advice like the number one probably strategy that you learn as a business owner, just a regular person that gets into the adult world and start paying taxes. Okay, put in your 401k and you're going to pay less taxes. But what I've learned is that as a business owner, we often often times we think we're going to make more money in the future than what we're making now. Right? So if that's the case, we we're going to be in a higher tax bracket in 20 30 years. And it's not taxfree the

401k. Again, correct me if I'm wrong, but the 401k you're going to pay taxes once you withdraw it in retirement. And if you're in a higher tax bracket, you're going to pay taxes on all the gains you made during those 20 30 years. So like it might not be the best strategy for everybody obviously has a unique situation but it might not be the best strategy for those business owners. They might look into life insurance for example which is taxfree vehicles or uh real estate for example as well which are things that your CPA can't recommend because they're not licensed for right what do you think about that? Yeah you're nail on the head again. That's a great question. In fact, um I've had many other podcasts that I've talked about how 401k is my last last um choice to invest. Yeah. And it's and it doesn't make sense because you're right, business owners have so much more that they can do with that money rather than just lock it off into a 401k. If

you're hemorrhaging money, you don't know what to do with it, you're just like, I don't have the capacity and I forgot to plan. Like, go for it. you know, do that as a saving grace, as a Hail Mary, but there are so many better plans for you than a 401k. And I'm saying that as a as a financial adviser myself. I have a wealth management firm. I host 401ks. Um, and yet I I tell my entrepreneurs like, are we sure we want to do this? Do you want to contribute to this? You like the set it and forget it and you understand you're going to pay taxes in the future. if you don't um and and most business owners, you're right, they're not going to be making less than what they're making today because if you do it right, then you should not, right? Your assets should be more, your passive income should be more. Um and and let me track back to like when they actually took away the pensions and and actually put

401k in place. So, the idea was that the onus lies on the employee, not the employer anymore. And that's why the 401k came around. That's why it gets offered to you because uh it's replacing that old pension program. So if you don't contribute to your 401k as an employee, the employer has no liability. They don't need to contribute either. Um and so the onus actually lies on you. If you are a W2 employee, you're kind of stuck and you probably have to do a 401k because there are not as many options. But then you want to look at u things like backdoor Roth. You want to take advantage of getting into the Roth side as much as possible as well. And some employers now offer Roth 401ks. Um and that's a lot better in your post investment years, right? So when the money is coming back to you, you actually want to look at taxes in three different silos. One is that you get taxed today. Like if I buy real estate today, if I

sell real estate today, I will pay my capital gains today, right? So that's tax now category. Then there's the tax deferral, which is that 401k, SE IRA, you know, 529 type of category. Um which is like I will get taxed later. the deferral, even the cash balance plan, any type of retirement plans fit in this category usually. Yeah. And then the tax never category is what you talked about the, you know, uh the life insurance category, the Roth category in which municipal bonds still kind of fit there. I mean, you shouldn't invest in it. It's not investment advice, but there are better other options. they're only providing a percent return, not even keeping up with inflation. But that's the category where you also want experience um and and exposure because people like Peter Theo um invested in things like Facebook from that and became multi multi-billionaires. And guess what? It's a very tax efficient vehicle. They're not going to be paying much tax at all. In fact, there's no income tax on watch products and

life insurance is completely income taxree. So how you look at being taxed now and how you see tax in the future is very important for business owners because the traditional advice does not apply to us. We are not looking to make less in the future. In fact, if you are looking to make less in the future so that you're taxed in the lesser category, we might want to talk about not retiring in the US because it would be very expensive for you to retire in the US if you're planning to just live off your 401k and social security and thinking that you're going to make no income. Um, our inflation in California alone is 8%. So, I don't know how how you're gonna plan for that. So, don't plan to lose, plan to win, right? Yeah. Yeah. And I think as business owners, we're more kind of riskaverse and more, I guess, confident in our abilities to make more in the future. So, if that's the case, then we should also make our tax strategy

and and financial planning in that in in that thinking as well. But just in terms of making what you said actionable like what I'm taking away from it is basically just making sure we educate ourselves about what's out there. I think that's the biggest gap is that we rely on one person which most of the time it's our CPA and we don't make the research herself that hey there's a ton of other things that you could do that perhaps your CPA is not licensed to tell you that's why you're not knowing about it but that you can implement and it's if you're worried about fees like the amount of tax you'll you you'll save like it's not it's not something you necessarily spend right because it's just money you just transfer and you you're able to redistribute that another place. So I think that's the the the the essential of it you know. Absolutely. In fact what happens is that people get jarred by when I say oh um for advisory only I will not

do transactions. I will not tell you to move your CPA you know for advisory only I'll have a certain amount of fee for their environment. Um and I call it an investment because once you get educated in that in that strategy that works for you and you see it implemented and you see the effect of it. I have not just educated you. I've educated your generations ahead. So, you're talking about a real investment in education. So, that's why I'm very very passionate about that part when you said education. It's 100% correct. This is the time to ask the right questions, do your research. In fact, I just met a doctor another day and um he he was paying I think at least almost a half a million in taxes and he's making like one and a half million. And it's like it hurts to see that. he's already done more than enough in level one strategies himself and he's like I don't know what other questions to ask because you ran out of questions and

that's why we talk about educating yourself in the strategies world so that you can then mix and match and plan for the future. So yeah, if you if you're going to pay $150,000 for that Harvard degree and then go hunting for a job uh in this economy because your area is not relevant anymore, you know, because that's happening. um then you could spend you know 10 20 30,000 in fixing your tax returns and not paying six, seven, eight figures in taxation. I mean it's a very small investment for a very large return. The ROI alone is here you can see it in your taxes the first year. Yeah. No, 100%. And that's what we're seeing a lot with with all the professionals I'm able to speak with. So, you're spot on on this and you talk about that, doctor, but I'm curious to see, do you have a case study that comes to mind about like a a a strategy or business owner that was able to turn those tax bills into more net worth

for himself or more freedom? Uh, what was the before and after? Yeah, I can tell you about a very young doctor case again because those guys I feel like are are suffering. I'm Indian and I end up with a lot of Indian doctor friends and family. So it's just kind of a natural even high-tech engineers it works for kind of uh those people who are stuck in that 1099 W2 option. Um so very simple case study guys making a couple both doctors in different fields um just out of you know just picking up 1099 type of positions and have options to take on W2. I have this case study from eight years ago actually almost my first few years um and it's beautiful to see it. We ended up saving them a quarter million in taxes every year. They were paying about three 300 um a quarter million in tax savings every single year uh through a retirement plan that included market products and insured products including life insurance because they have two young kids

uh under five minors. So it matters, right? Your risk matters. Um and they're able to put away uh between five products about a quart million dollars a year and knock out their taxation. and and now their taxation is like 50 60k a year every single year. Every time they come up on a new lump sum, it's because we organized them correctly. We set them up a proper structure. We gave them the right right advice at the right time. Um which type of W2 to accept and which type of 1099 and how to process them in the corporation structure. Um uh the product we ended up using was a 412 E3C specifically for those guys who are going to you know chads even see this. Um and that product can be as big or as small as you want. That was one of my first cases that left such a lasting impression because that retirement plan today is over five million. Um, and it's doing great. It's thriving and they don't touch it, right? The market's

going crazy. It's doing whatever the hell it's doing, but they have the small decent exposure divided up against insurance products that have the words like guarantees. Plus, they have tax savings year. So, I'm I'm happy for that couple. I would say this is a very good case uh for most of the general public around under 5 million. Um, and I can also share a case uh for a for a larger um he ended up as a doctor, but he's not practicing. He just had a company that he ended up selling during COVID. Um, $40 million a year type of gains for five years, doing great. Um, so we had to set up a trust, a charitable uh philanthropy angle for him, private foundation. Of course, we got businesses going. We bought real estate. Taxes are less than $100,000 a year. and they were in the category of paying at least at least a million dollars a year. Um so that that big jump didn't happen overnight. It took a while to get there. Um it

was actually exactly five years for us to actually manage those taxation down slowly because all of these products cannot be implemented together. Uh like I was it's a red flag. So but but it's about maintenance. So they don't need us anymore. We set up systems for them. They have their own internal team now. So, they only come up uh when they're making new investment decisions and when they're making new strategic moves and when they have new life events, that's when they come back to us and they need another, as I call it, a tuneup. Yeah. No, 100%. No, that's very valuable and thank you for your transparency there. I think like it couldn't be more tactical than what you just said. like you just gave an example of a doctor making couple seven figures a year that just implemented the next level of of of wealth vehicle and taxical which in this case was a a sort of well the 4123 uh and then a big case right so it works at every level u

but if we were to get a bit more tactical I know that for us what we talk a lot about is the 162 and the 423 could you explain both different like codes and how it applies how would it apply to a business to make you a couple of seven figures a year uh as like one of the main thing that they could implement uh to make the biggest impact in their tax strategy. I am biased towards the 412E. It's not that we can't touch other codes. It's just I'm so biased towards it because it's so flexible. Um so I like that for business owners because then they're not just tied into only the cash balance side or only the market side, but they can actually um mix and match their plan and actually have insurance products. Because for um ultra high net worth investors, you would understand the Rockefeller theory why they're doing so well is it's actually life insurance. Um and I can add life insurance to a 412 E3 along with an

annuity. And that's your stable product like the set it and forget it. You don't touch it. Um and when the product comes out, it's actually really tax favorable too. So, I like the market exposure along with the insurance exposure for the business owner because you should be getting life insurance as fast as you know you can basic because the younger you are the better it is for you. Um, and I'm not talking about just a term insurance. I'm talking about a whole life insurance or an index universal policy. Uh, a whole life actually gives you better tax deductions within this 412 E3 product. And it also had a guaranteed 4% return which is beautiful. So for for business owners that are busy doing their daily tasks and they know that they got to put away their money in their retirement products and they're going to need life insurance anyways, why would you do that post tax? You should be doing that pre-tax, right? Your business is paying for you, so you should do that. I'm

not against the 401k, but it just needs to be a fatter product, which is a cash balance. Um, and if you know the nuances of cash balance, that cash cannot earn you more money than what the actuary told it to make, right? So if you you're stuck at a cash balance plan at 5%, you cannot make more. If you make more, the next year you can't put in more money. So the the cash balance plan is kind of set it and forget it in the market in the in the uh in the way that the insurance is also set it and forget it. So I like that exposure. And some of my business owners don't want market exposure at all. They would rather just go very heavy on the insurance side because they're offsetting the risk on their other real assets. So I'll give you an example on this. This is um a truck stop business owner and I'm you know my family's Punjabi so we know a lot of uh liquor stores, gas stations,

hotels um a lot of these first generation guys who came in and set up these the wealth is over $und00 million by now but they've never really institutionalized. They still hang on to real assets fully paid. They don't take any kind of risk but their second generation is bringing us in to say hey what how do I plan from here? So when I look at them the the parents never did any kind of defined benefit 412e nothing for them but then we structure it in such a way that the kids insuranceances are going to be valuable even when the parents pass. So the succession part also kicks into the 412e it's a very deep product um and the flexibility is I think something that any business owner would enjoy. So it's very customizable as well. Um so yeah I'm definitely very biased towards the 412 product. Yeah. No that's good. And I look so right now like we've covered that one of the biggest biggest problem or gap that business owners face regarding not keeping

enough of what they earn is one relying too much on their CPA when they're not licensed for a lot of the most favorable tax strategies that they can access. The second would be the education. So educating themsel on all those codes or or finding the people the resources to help them with those education. Now the next step would be well all right how do we find those people that uh can help me with those uh with with those strategies and I know we touched a little bit about that but I want to kind of dig deeper into this which is your your sector what's the minimum profile the business owner needs to have to really benefit from a family office style uh and those tax investment strategies yeah I I would divide it into two groups um you know again those guys who kind of need only the strategy and um the implementation can be done with within us and it's a one-time setup thing. So those guys usually come in and engage at about

a one-year process with us. So it's like okay I have this half a million and under in taxation. I'm okay with a retirement plan. We talk about these guys as an implementation team only. So you're coming in. just layering my services or somebody similar to me that understands tax strategies and can bring these types of services to you and plugandplay with your existing team that is your CPA. So what you're doing is you're implementing transacting for that year and then it's a set it and forget it, right? Like you only needed a 412E plan because you're half a million in taxes. We could set up a fantastic plan for you. So no problem. You did that but then you don't need the services consistently after that. You're done. So until you have another tax problem, you're not going to need my services on that. So, we talk about these guys as a as a one-time kind of a setup, but then the guys who are paying over a million and it's a consistent issue. Um,

and every time they invest in something temporary like oil and gas or an easement, um, it's not or setting up a DAFF product, you know, those are donor advisory funds and they don't find that as a very long-term plan for them. Those are the guys that will have like a a few years of implementation. So, the types of teams you're looking at is you got to first evaluate where you are. Do you like your CPA? Do you have a good financial advisor? Uh do you have um access to tax strategies through your banks? I mean, depending on how much you're hosting with them, you might Yeah, I would start there first. First, work with the team you already have and see what the real problems look like. And if it's just education and it's just tax strategies, then you can actually even talk to tax attorneys and they might be able to solve your problem very quickly, right? Financial advisors, tax attorneys that understand tax strategy at at the next level. They are your guys.

One time execute and you're done. But then the guys who are like, "Ah, I need to get out. I need to set a new system. My CPA is not understanding. I'm out growing." Those are the more long-term. So, you want to shop, you want to shop that. You want to talk to registered investment advisors. You want to talk to people, anyone that's offering more than just that one layer of service. Um, so I'll give you good examples. Uh, besides me, obviously, there are people like Crescent Capital. They do fantastic work. I know them personally. Padstone do great, great work. Um, but their minimums are about 100 million and up usually. So, my minimums go to on total net investable assets of 5 million. I'm looking for qualified investors to make the most difference. Um, it's not that guys who are making less than that can't make that difference. It's just a faster engagement. It's just a faster solution. Um, and you don't need that consistent help. Um but everybody that's in the qualified investor and

growing fast usually needs um you know twice a year, four times a year touch points, more execution team on their side. They're not able to DIY because they don't have the time to DIY. Um and that's that's where I come in. So yeah, I mean it's it's all about first understanding where you are because a lot of people will come in and say, "Oh yeah, I need this and I need that." And then I'm like, "Okay, well I have a CPA ready. I have a guy on my team. I have an attorney ready. I have a guy on my team. Oh, but my dad's CPA is so cool. He's been in the industry for like 50 years and he's still my guy. And I'm like, no problem, but let's first address that. You already have a team. You already have people you trust so that we can fill in those um missing pieces, right? So that we can maximize the efficiency of your team first. So, I don't want to replace your guys. I just

want to enhance them and and make sure that we're all on the same page for you. And that's a big misconception I think a lot of business owners I had myself is that like, okay, well, I love my CPA. like I've been I've been with him for a long time. I don't want to get him replaced or just hurt his feelings, right? Or just make sure or so the good professionals will enhance you just you said it perfectly will enhance his work and they're great CPAs will actually appreciate that because they will they will appreciate the education right that they can use for their other clients. I think that's what you were saying that you're even sometime able to expand your CPA's capabilities and even revenue opportunities uh through like partnership models and stuff. So h how does that work? I'm curious about that as well. Yeah, actually that's how I got into the industry. I was very back office. I I don't like dealing with clients first, you know. So it took me a

while to understand that. Okay, fine. What's my client profile? Who would I like to work with first? Um but I've been working with CBAs for 15 years. Um and the idea was to understand where they're at. So you'll have two types of CPAs. One that is growth mode and one that's kind of set it and forget it. I don't want to add more skills because I'm kind of done with the industry, right? So if you have that growth mode type of a CPA who likes to listen to you, who likes to understand your concerns and has some kind of a relationship with you, I would like to add on to them. So how I've worked with the CPAs and other actually financial adviserss too is after they've already leveled out and said, "Okay, I've maxed out with this client, but he needs more." Then I become their back office and provide them back office services so that we become a family office for them exclusively and then all their clients nest with us when it

comes to any other problems. And we have a revenue share platform for them. We have a commission platform which can also do uh licensing help. So say for example you're a young CPA, you just started and you're looking to build your book of business in this type of a field where you're doing more than that tax work. That's actually a perfect CPA to partner up with us because what we're trying to do is help them learn, give them CPE credits while they are learning all these tax strategies and they are facing the clients and they can actually tackle them themselves. The idea is that the CPA should say you need one, two, three, four, five strategies. Go to Avi, she'll take care of the implementation because they can implement them, right? So they they can at least give you that strategy. So those are the CPAs I've been partnering up with. In fact, in Southern California, I have five partners already. I lean on these people, both guys and girls. They uh they have front-facing

clients. Like, they are dealing with these problems. They usually have a niche. So, it could be a very heavy real estate guy who who loves his own real estate portfolio, also does taxes, and is an entrepreneur CPA himself. Um, I also have a team of CPAs that are actually international. So six different locations are available across the globe where we can do your taxes compliance and that's a partner of mine too. So how we started to plug in place every CPA has their own niche and they're really good at what they do. So we just want to kind of bring in the team around them. So we're not trying to replace them. The idea is that how do we build with them and that also serves you long term because then you don't need my presence 100% all the time. Then you and your team just continue to plug and play as and when needed and when the problems come up you call me. But that's it. That's the intention. Same exact process for the

financial advisors because those guys also need licensing. They also need to have they can implement a whole bunch of things. They also see clients with a lot of tax issues. So they have also become a great referral partner as well as um um somebody who likes to keep their clients in the family office environment. That means they can tap into um any service that their client needs and lead the initiative for their client. It's not just a referral. So it's like you still control your client. You are still the face of it, but you only depend on your advanced planning team, which is us. Yeah. No, that's great. That makes total sense. That's very smart. Um so hopefully if there's CPAs watching this, then they can understand that better as well. And it's not it's not against them. It's it's how can we work with them. Uh that's great. And I also want to touch on another thing you said and I think one thing that I've personally took away from that again is uh

like again I I'm a business owner. I got my C corp in the US and I'm busy all the time. So one of the big misconception that I have is like I don't want to spend hours and hours or like multiple meetings to set up those strategies like the 412 E3 and all that stuff. And from what you said is that this is a like most if you're if you're paying six figures a year in taxes, uh, most of the time it's it's like some one like one time set up and then forget it, right? And then that's already doing the 8020. It's more when you're in the millions of taxes a year that obviously now it makes sense to to seek greater help and stack on multiple strategies. But the fact that for most of the people watching this pay spending50 to $250,000 a year, it's a once and forget. Like with a good adviser, a good professional, he knows what you're doing and like, "All right, cool. You just got to do this,

this, this, and you're good." And that's already your 8020. Um, that's really good to hear, right? So, I think that's one really good thing that business owners watching this should take away from. Yeah, I think it's it's very valuable, too, because business owners might freak out thinking like, "Oh, I don't understand this product." Yeah. But you don't have to worry about it. It's very industry specific. There's a lot of information available online. Um, and yes, once you set it and forget it, you're not going to see us until you know there's another tax problem, which is a good thing for you. That means you're making more income. Um, and that means there's going to be another layer on top, right? So layers is exactly how we want to describe it. It's like a cake. Um, and my when I was little, I still remember a lot of people used to use this phrase, you can't have your cake and eat it too. And I was like, but then what's the point of having the cake,

right? So, so in this case, you, you know, you're kind of layering everything up just like a cake and then you get to eat it too because it's yours. Um, and it's a sweet reward because you're building your net worth with the dollars that were going to go to the IRS, right? Um, and when you start taking that money out in your retirement years, you understand you're still going to be paying taxes, but at least you multiplied and diversified your taxation angles, right? So in that 412, yes you could do market, yes you could do life insurance and yes you could do annuities. So those in itself are treated differently in taxation. So you get to have the access to different tax buckets and I think it's really exciting for that industry to like you know quickly educate their audience and and be able to finish these transactions and get you on the road. Yeah, 100%. Um, so other than what we said, what do you think are the biggest misconceptions that business owners have

about family offices or advanced tax investment strategies? I think most people think that it's too complicated to understand. Um, and actually what happens is that when you have that first conversation, it does sound overwhelming. So I want you to understand that at no point should you feel that there's an emergency of doing anything, right? One of the biggest things that I want to separate is that this is this is a transactiondriven tax strategy. Basically, you are going to have to do some transaction. I don't know which one, right? That's what's we're going to figure out, but you're going to make some transaction and that's going to offset your taxation, right? You're not going to take that money home. So, so from my perspective, when I when I talk to people, I want to have them think that yes, it's like drinking from the fire hose the first few times, but the onus lies on you. If you don't educate yourself and you don't ask the right questions and you don't participate, like there's nothing I

can do. I can only bring a horse to the water. I can't make make it drink it, you know? So, like the onus does lies lie on you and and take it as slow or as fast as you want. You're already doing the thing that you're doing. What's the rush? You know, maybe you'll do it for one more year, but that's the cost of education. Uh and take it like that and and next year you'll do better. So, don't just say it's too complicated. Shut your eyes and walk away from it. uh but rather uh lean in and and say, "Okay, I I really don't understand it." And from my perspective, even as an investment advisor, I can show you strategies that make you money, but like I'm not going to be making you 40% in anything. And neither am I going to promise you that, right? Yeah, you could invest in SpaceX and things like that. And yeah, you could have that Facebook experience, but I'm never going to promise you those types of

returns. No investment advisor would. But on the taxation side, that 40% is what you're paying out your taxes. So what what are we doing? I'm I'm giving away like more than almost half of my earnings and then I'm I'm expecting to make 10% in the market, 12%. Like I can't offset that giant hole unless you participate in it. So like you got to be willing to go through, you know, like a kindergarten experience with a family office. I think you can get that experience more, but you might not get that experience with like uh a retail house right now. I don't know, maybe they'll change. Yeah, 100%. No, that's good. That's a good answer. And if you could change just like one thing about how business owners think about their relationship with their CPA, their financial advisor, and their tax bill, what would it be that they are actually all your strategists? Um, and they need to be in that mind frame, too, or you really should talk about changing them. Unfortunately, they they're if

they're all not growthminded, um, then unfortunately you will suffer the consequences of it. So, be be aware of of, you know, how are these people educating themselves? How are they keeping a breast of the law changes, investment changes? um it is their job to stay up with you know the investment strategies on both ends on the advisory side as well as the the tax side but it is not not you know the on the CPA side it's not his job to implement anything and on the financial advisor side it's not his job to file your tax returns so you you are making that vacuum happen so the less of that vacuum you can bridge the better the better bridge you can connect between these two guys the better for you basically so you know the the advisor is very important Um, and I also like to throw in real estate advisor. So, you want to bring in your investment real estate advisor, too. Uh, between uh insurance, real estate, wealth advisory, and taxes. Um, you're

you're in a good spot. That's the I would call it the mentorship team that you should have to get you to that next level. And yeah, that connects what we were talking a bit before we we press record, which is the the silos, right? and and to fill that gap between the communication of your CPA, your adviser, your real estate adviser. So, find a way to have all of them communicate together and get the best of both world while bringing that synergy, right, which is which is the hard part, but there is solutions out there for you to get there. Definitely, there are a lot of uh adviserss nowadays that are understanding this and with AI stepping in, they're realizing that they're going to have to answer more questions than just what their silo was before. So that's why you see all these RAS doing tax services and all these investment advisor doing tax services, you know, uh or tax services offering other types of advice like real estate advice and insurance services. That's why

this is happening in the industry. That's why people are doing more than one thing because it's all related. Um and life is not just silos, right? Exactly. No, that's great. Well, Anthony, that was a very great conversation. I want to ask you a final question, which is the question we asked all the guests to finish it off. uh which is obviously you're driven by legacy, right? You're a mother, uh you're a strategist. If this episode outlives all of us, right? What's one lesson about tax and investment strategy that you want every business owner to remember? That there's always a way to reduce your taxation. There's always a way. I know people say that, "Oh, I've done everything." Nope. No, you haven't. 18,000 tax strategies out there. I'm sure something fits you. Never just take no for an answer. Basically, that's the bottom line. That's amazing. That's a great answer. Well, thank you so much, ANET, for your time. It was a pleasure. I'm sure you have a lot more to share. Maybe we'll catch each

other again for another episode later down the road, but I want to say thank you for your time. That was amazing value. Thank you so much for hosting me and listening to my my conversations in my head that I have every day. I really appreciate your time. Thank you. Awesome. Very good. So, well, if you enjoyed this video, all we're asking is that you subscribe to the channel and share it with another business owner that might benefit from also hearing what Anne was saying today. And hopefully you enjoyed and we'll catch you guys on the next one.