Jun 28, 2021
Puzzled by Business & Retirement? We Explore Both
- BRT S02 EP26 (73) 6-27-2021
Things We Learned This Week
Guest: Brian Thomas & Alania Cater of Completing the Puzzle
Brian and Alania talk about their business that was started during the Pandemic – Completing the Puzzle, the Netflix (think DVD shipping) of puzzles. You join the club and can get puzzles sent to you on a regular basis, do the puzzle and ship it back. This is the classic startup story of 2 people working in the corporate world, that started their own business, worked it as a 2nd job, until they could quit their jobs and operate it full time.
The founders come from the online world, so they have a background in web design, software design, E-Commerce, product launches and marketing. These skills were used to get this new opportunity off the ground. The business was originally worked out from their garage, and now it is a warehouse operation entertaining, and serving the Puzzle community on Facebook and beyond.
Monthly Puzzle subscriptions with options. Puzzles come delivered thru the mail. After you are done, you return it for a new Puzzle. Niche business with fan following on Facebook & Pinterest.
Nowicz, President - Wealth For Life
Denver is an advisor with nearly 20 years experience working with clients in investments and insurance, designing retirement plans with a combo of both. He takes us through different strategies for clients to get the best allocations for their money over the long term. It is the Combo Strategy of both Offense and Defense, the synergy of the mix, not ‘All or Nothing’.
Today we talk about Executives, and what strategies can they use to handle taxes, investments, & retirement. The standard retirement plans (IRA, Roth IRA, 401K), what is a 401K, and the deferred tax setup in the plan (and recs take company match on 401K). We shift to why business owners have more options and benefits and what are they (Acquire assets, stocks, real estate, invest in business).
The 3 Tax Buckets – income, tax deferred, tax free, and understanding the 3, and tax protection – move more $ to the tax free position. When you have Assets – rental real estate, cash flowing business, IUL, you can use them for tax benefits. Create your own Exit Strategy as if you sold the biz you worked for, and get the benefits of 3 to 1 Lender Match. What is the strategy of Elon Musk or Jeff Bezos with Tax Free Loans?
Executive and W2 employees make $100 K + and get W2 income taxes put money into 401K, tax deferred saves money in taxes now, but costs later.
Own business-get deductions, less taxes
Real estate- get deductions, depreciation less taxes
Capital Gains at 15-20%, better than 30% + income taxes.
Top 10% earners pay 70% taxes
Roth IRA – pay tax first, growth is tax free. Caps out at certain income, circa $180K.
Most advisors suggest 401K, because instant tax savings, but do not discuss taxes later, because pay taxes in retirement
Should ask if you want to pay taxes now (Roth) or later (401K). If they asked that question, more people would choose Roth. Then you know the Government is out of the picture.
Government is your partner always, and IRS takes their cut.
Better to know your tax rate now and pay now
Not all insurance strategies are good, not all are bad, just like stocks or real estate – some are good.
IUL – have caps on upside, get uncapped. Expenses go down over time. Max fund, and get 8-10% per year and NO market risk. Add financial leverage with 3 total and asset grows bigger – use loans like real estate ex. Use call options, no losses. Create $1 million tax free asset growing
*Loans are the gateway to tax free money.
Reduce risk and put yourself in better position. Wealthy people use OPM – not only their own money.
Use options strategy, not in market but linked to the market, capture gains, but not the losses.
Avoid market roller coaster - gain money, lose money, repeat. Instead with options strategy – lock in gains, no losses. - Market down 25%, need 50% gain to get even.
3 to 1 matching program with loans. No loan docs or guarantees, asset is collateral, bank loans on policy.
No limit, you put in $500K, bank matches with $1.5 million (3 to 1)
Link to Taxes Show on 10/31/2021 w/ Denver: Here
Link to Offense / Defense Show on 6/6/2021 w/ Denver: Here
Link to Shows, Denver was a Guest: Here
Thanks for Listening.
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Business Roundtable with Matt Battaglia
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