Jan 24, 2022
Alternative Investments, Crypto + Trusts & Asset Protection
- BRT S03 EP04 (103) 1-23-2022
What We Learned This Week
- Alternative Investments like Crypto, and techniques of Staking & Mining
- Real Estate Deals - AirBnB & BRBO, vacation rentals, use AirDNA site for info
- Asset Protection - defend vs lawsuits, creditor protection
- Deferred Sales Trust - Sec. 453 receive payments in installments to defer taxes
- Tax & Estate Planning (w/ exemption)
Guest: Denver
Nowicz, President - Wealth For
Life
https://wealthforlife.net/brt/
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’.
Notes:
Wealthy – Need to be careful, as to not lose wealth with potential opportunities that can be risky. With risk, always come potential for huge losses. How do you evaluate?
Build financial structure first – offense/defense, then you have money to invest that could be lost.
Crypto – learn about all types of asset classes, Crypto has bi opportunities with big risks, so do your homework first like any investment
Areas of Crypto that can be lucrative besides owning coins, like yield farming (loan $), staking (verify transactions) and mining for Crypto coins
Blockchain is a digital ledger (based on primary nodes), you can see the transactions, so it can be stable
Stocks are liquid, easy to get in & out, use exchanges and low fees.
Crypto is not as liquid, hard to get out. Fees can be high in crypto liquidity pools, farming, staking.
Coinbase – marketplace for Crypto that makes it easier to take possession, has more liquidity and can be exchanged to cash money USD.
Crypto uses a digital wallet to take possession (digital file) and complicated long passwords
Bitcoin – seen as digital energy, a store of value
Ethereum – has value in Ether coin plus technical use as a programming source use in blockchain utility.
Crypto is worth learning (especially staking and liquidity pools), but it is tough, so get a mentor
Framework – offense/defense
Exit strategy – sell business or get stock option
Cash flow producing real estate rental properties can be competitive with low yields in long term rentals
AirBnB and BRBO – short term rental setup, use website like Air DNA for research
Can own an Air BnB property and be active investor.
Passive Investor – invest in real estate deals, own multiple properties, also *get tax benefits of depreciation, more efficient
Vs. REIT – no tax advantages, and have yearly income that is taxed.
Syndicated Real Estate deals – passive deals to invest in big real estate deals as a group
Leverage – get the most of your money, use little of your $, but control a lot of assets, control dollars with pennies invested, understand Arbitrage opportunities (buy at low level, sell at higher level) and leverage
Business Ownership – many advantages with corporate structure for tax write offs
Understand tax brackets and tax buckets as a business owner and investor
Business owners can save money long term with proper retirement and income planning, plus tax planning.
Chasing Rate of Return - never going to get enough ROR to cover bad tax strategies at 35%.
Stop unnecessary losses with taxes, have a long term plan to lessen the tax blow, and even eliminate .
Guests: Ike Devji & Michael Ferrin of Davis Miles Law Firm
Ike’s expertise in the areas of asset protection, trusts, LLC,, off shore asset protection, and lawsuit protection strategies. Ike also covers areas business owners should consider when selling their business. He is an AZ resident for 40 years and graduated from University of Arizona who has spoken , taught classes and written numerous articles on asset protection.
Mike’s practice focuses on business and real estate transactions, business entity formation, business succession planning, contracts, estate planning and asset protection planning.
Notes:
Asset Protection – protect assets like real estate or business vs lawsuits and creditors
Estate Planning – protect personal assets and real estate, to leave to your heirs in orderly fashion, avoid probate or other legal issues with trusts, wills, and proper legal setup
Business Owners – if you plan to sell a business (exit strategy) or retire, plan early and have legal setup in order
Sale Transaction – receive lump sum of money, or payments, want a setup to protect proceeds from creditors or taxes (capital gains tax of 20%) to pass to heirs, amount taxed is based on basis, and purchase price vs gain on sale, like real estate – be aware of depreciation / amortization recapture
Good Team of Advisors – CPA, Legal, etc. to confirm the corporate structure is in order, especially if selling to partners
Distribution of Proceeds – think asset protection, can use a revocable trust for the proceeds
Deferred Sales Trust – has tax and estate protection, thru Sec 453 of the tax code / installment sale, take advantage of Sec 453 and receive installment payments over time vs. one lump sum.
Setup: Trust and 3rd party buyer to receive sale funds, then pay note to seller – defer payment of capital gains over time. , could be 10-20 year timeline for deferred sales trust.
Asset Protection / Misc. – other things to consider like insurance, umbrella policies, key-man insurance for top employees and mgrs, D&O insurance – director and officers insurance, IT security of internal docs, passwords
Business Documents like buy/sell agreement & operating agreement, financial and returns in order
*Buyers of Business would ask about all of these docs too
HNW Clients – Estate Tax Planning, and Crypto storage
Estate Tax Exemption – the amount of money in a person's estate that is exempt from being taxed by the federal government. It is adjusted annually for inflation. In 2022 the amount is $12.06 million for an individual and $24.12 million for a married couple; but may go from $12 million / year to $5 million / year, which means Assets over $5 million could cost 40% tax.
More Info on WFL and Tax Free Matching: HERE
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
‘Best Of’ Topic: https://brt-show.libsyn.com/category/Best+of+BRT
Investing Topic: https://brt-show.libsyn.com/category/Investing-Stocks-Bonds-Retirement
More 'Best of Investing': Here
Legal Topic: https://brt-show.libsyn.com/category/Legal-Asset+Protection-Estate+Planning
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