Protect Your Wealth: Tax Secrets Every Entrepreneur Must Know | Edward Collins DSH #1254

Speaker 1 Like wars throughout history. And he would basically say that the start of every war was because of the have-nots winning what the haves-have.
But the same thing happens in business, right?

Speaker 1 The have-nots want what you have, right? There's individuals like creditors, litigants, opportunists, right?

Speaker 1 They're at any moment in time, they're ready to pounce to take their fair share, if you will, of your pot. Oh, yeah.
Right.

Speaker 2 All right, guys, got Edward Collins here. We are in Las Vegas for funnel hacking live.
He will will be speaking. Thanks for coming on, man.

Speaker 1 Absolutely. It's a pleasure.

Speaker 2 Absolutely.

Speaker 2 What are you going to talk about?

Speaker 1 Russell has asked me to essentially host a roundtable because Russell spends a lot of his time teaching business owners how to make money. I teach them how to protect it.

Speaker 2 And that's important. And I feel like a lot of people are good at making money, but not protecting it.

Speaker 1 Most people don't know how to protect it.

Speaker 1 We don't learn a lot of things from a financial literacy standpoint in school. So

Speaker 1 you sort of like wing your way at making the dollars, but but you have to hope and pray that you get to keep it.

Speaker 2 Right. I mean, the challenge.
Yeah. You learn pretty much nothing when it comes to

Speaker 2 protecting it. And I went to business school too for a little bit and I don't remember a single topic or class about it.
So very valuable thing to know, right?

Speaker 1 I try.

Speaker 1 It's important. When you look at life, right? It's like I talk about the things that are like really important to fight for.

Speaker 1 Like financial freedom is the most important freedom to fight for in life because it leads to all of the freedoms.

Speaker 1 It leads to freedom of education, freedom of healthcare, freedom of mobility, freedom of security, the freedom of choice. So if you're going to fight for anything, you want to become financially free.

Speaker 1 But the problem is we're not set up to get that outcome, right?

Speaker 1 Like in school, they spend all their time, effort, and energy just trying to teach you to memorize certain things to make you productive and manipulate it within society, right?

Speaker 1 Like you follow the rules so that you essentially can do the things that the society needs you to get done, but that's not necessarily what you would want to do if you had the choice.

Speaker 1 The choice is about having actual freedom. And the only thing that makes makes that possible is financial freedom.

Speaker 2 And you had to do a lot of school as a lawyer.

Speaker 1 Well, yeah, I mean,

Speaker 1 don't get me wrong. There are certain things about education that are important and critical,

Speaker 1 but it's what you do in the confrontation of education that actually gets you to fine-tune your knowledge base.

Speaker 1 It's like, how do you, how do you, how do you cut a diamond? You need another diamond, right?

Speaker 1 So typically you want to go out and get experience through other people, like mentorship, individuals who've been through it. It's only so much you can learn from the book.

Speaker 1 It's the application of that knowledge in the real world that makes the difference.

Speaker 2 Absolutely. Did you know what type of lawyer you wanted to be prior to law school?

Speaker 1 No, I mean, I had always had an interest in finance, like even from a young age, but I didn't come from money. So pretty much everything I learned about money happened after the fact.
Like

Speaker 1 my family, like we had to struggle really hard just to get up to the poverty line. Yeah.
So pretty much everything I learned was wrong about money. Money is simply a tool.

Speaker 1 But once I learned how money actually works, I could put it to work in the real world.

Speaker 1 But it definitely wasn't easy. I made a lot of mistakes year after year as I was getting started.

Speaker 2 I bet. Yeah.
Cause a lot of people are stuck in that lower middle class. And they just, I feel like a lot of them don't have the education around money.
And that's why they're stuck, right?

Speaker 1 Yeah. I mean, there are a lot of things that hold people back.

Speaker 1 Ignorance is probably the biggest thing. And I mean that in the genuine sense of the word, just not having the information, right? And there's two different versions of ignorance.

Speaker 1 You have ignorance of not knowing something, but you also have the version of ignorance where you know something, but it's just not true. Right.
And that's obviously the worst one, right?

Speaker 1 Because you believe something so wholeheartedly that you, it's very difficult to be persuaded elsewhere, right? Like you, you're so set that, that money is a limited commodity.

Speaker 1 The reality is all money follows value creation. And if you go out in the world and create value, that means there's no limit to the amount of money you can actually get.

Speaker 1 But we're not taught those types of things in school. You're taught about like, how do I follow the rules? And

Speaker 1 how do I spend the next 32 minutes going through a particular course, wait for the bell to ring, get up from the class and move on to the next thing?

Speaker 1 Because whatever I was working on is not as important as moving on to the next thing that the system wants you to move on to.

Speaker 2 Yeah, I love that. Value creation.
That's important. People should focus on that.
Yeah, absolutely. Because they teach you to get a high-paying job, but what's the skill that's getting you that job?

Speaker 1 Well, I'd even argue that they don't teach you how to get a high-paying job, right? They sort of hold that out as the carrot, the thing to motivate you, because they think

Speaker 1 they help to instill that that's the thing that brings you joy and will bring you happiness.

Speaker 1 But it's very rare that money itself brings you happiness. It's learning what to do with money, right? Because money doesn't solve all problems, but it definitely solves money problems.
A lot.

Speaker 1 So if you think about like, how do you utilize money in such a way to bring on the opportunity for fulfillment, that's the big difference because happiness is an emotion and that means it's fleeting.

Speaker 1 If you're going to strive for something, you want to strive for fulfillment, that sense of completeness. Agreed.

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Speaker 2 When you wanted to become a lawyer, was that heavily due to money?

Speaker 1 It really wasn't.

Speaker 1 As a kid, I was sort of like inspired by the concepts of law, right? I had gotten involved in like mock trial in high school, and I just enjoyed that aspect of things, the whole debate concept of it.

Speaker 1 And when I actually went out into the world, I didn't start going into law as a beginning. Like, I actually started working on the dark side.
So I worked for the government for a bit. Really?

Speaker 1 Yeah, I worked for the United States Department of Justice. I got to see behind the curtain because I was misguided.

Speaker 1 I had believed that that was what you would do as a citizen to really show your patriotism, right? Work for the government.

Speaker 1 But when I saw behind the scenes, behind the curtain, I learned that I actually hate the government.

Speaker 1 And like, I say that, and some people will take me the wrong way when I say it, right? Because I genuinely mean it. I actually hate the government.
I love America.

Speaker 1 because I think America is the land of the free and it gives you the opportunity to actually excel. But that's that's not what government is.

Speaker 1 Government is a structured system that is not necessarily designed for the well-being of the one.

Speaker 1 It's oriented, and I'm not necessarily saying design, but oriented towards the well-being of the collective. But the challenge with that is it often leaves behind those who wish to excel.

Speaker 1 Because Excel and collective don't really go together.

Speaker 1 So if you sit back and you look at how the government is structured, there's so many opportunities for mismanagement,

Speaker 1 fraud, abuse, you name it, just general corruption.

Speaker 2 I mean, you're seeing it now with the USAID.

Speaker 1 Oh, my goodness. Like everything that's being now brought to the light is, like I sit back, I was having a conversation with a bunch of business owners just recently.

Speaker 1 We were talking about just the nuance of the stuff that's coming out with what Doge is reporting.

Speaker 1 Again, a lot alleged at the moment, but even in the alleged state, it's now coming to light that there's been significant opportunities for mismanagement of resources.

Speaker 1 I can't understand why more business owners are not absolutely livid, right? Like if you think about the average business owner forks over 20 to 30% of every dollar that they make to the government

Speaker 1 with this belief, at least in the beginning, that those dollars are going to go for good works.

Speaker 1 But they're not in any way contemplating that it's going to go for some of the ridiculousness that's come to light as to where those dollars have been spent and spent without necessarily any oversight.

Speaker 1 I mean, there's supposed to be oversight in the government, right? But where is it? Like, and where's the accountability?

Speaker 1 And that's, that's what I think that once this starts to really flush out, I think that's where a lot of business owners specifically are going to sit back and say, well, why am I, why am I sending a single dollar to the IRS?

Speaker 1 Right. Right.
And that's where I come in.

Speaker 1 Like, I, I teach business owners how to essentially learn how to legally and ethically keep more of every dollar that's being made Because I genuinely believe that the entrepreneur is the one who actually changes the world.

Speaker 1 Not the government, not the government. Like, think about it.
Like if you had to rely on the government to fix a pothole or an entrepreneur to do it, who would you trust?

Speaker 2 Entrepreneur all day.

Speaker 1 100%, right? Why?

Speaker 1 Because the entrepreneur is going to use their dollars the best they possibly can, the most efficiently and effectively to get the outcome, which is a paved road so they can sell their goods and services.

Speaker 1 Now, don't get me wrong, there are certain things the government does really well. Like, well, should do really well, should do really well, like protecting our sovereignty.

Speaker 1 I think that that is something the government should be responsible for. Protecting you and I, as citizens, right? Protecting our lives, right?

Speaker 1 The government should be set up to do that, protecting our property. But beyond that, now we get into a challenge, right? Because think about it.
Like,

Speaker 1 imagine for a moment that you love chocolate and that I hate it, right? Don't get me wrong, I love chocolate.

Speaker 1 So, so I'm actually playing devil's advocate here, but you love chocolate, I hate chocolate.

Speaker 1 Why is it just in any sense of the word for you to take my money to give to someone else so they can have chocolate?

Speaker 1 Not just someone else, someone who's not even in our country so that they can have chocolate. How's that just?

Speaker 1 Now, reality is if you love chocolate that much and you want that to happen, there are mechanisms where you personally can make it happen.

Speaker 1 The government doesn't have to step in to take my money to make it happen.

Speaker 1 You as an individual can say, let's go to a charity that provides chocolate to other individuals, or you can set up your own charity, right?

Speaker 1 There's mechanisms by which people can accomplish the nuanced goals and objectives they have. I just don't think it's right for the government to force me to do it.

Speaker 2 Yeah, I'd rather send money to charity than IRS. Absolutely.
I mean, that's actually doing some great things for people.

Speaker 1 Well, depending on the charity,

Speaker 1 right? There's mismanagement everywhere, but at least with a charity, there's much more transparency opportunity.

Speaker 1 Like they can't even account for the billions of dollars that have gone to undisclosed recipients, right? Like think about that. Like the government, I was watching this interview.

Speaker 1 I don't remember who it was, but it was just recent where they were talking about

Speaker 1 spending under the Pentagon.

Speaker 1 And the person being interviewed was essentially arguing that just the fact that they have not passed an audit does not necessarily mean that there's fraud, waste, and abuse that has occurred.

Speaker 1 But that's absolutely the case. Like, if you can't tell where a dollar has gone,

Speaker 1 how is anyone expected to believe that it wasn't utilized in ways that shouldn't have been utilized?

Speaker 1 If you can't just follow the money, that's a problem.

Speaker 2 And that's not a small amount of money.

Speaker 1 No, we're talking about billions of dollars. Like again, a lot of people don't have context because it's very hard to put those numbers into something that's like reasonable.

Speaker 1 So the way I try to do it with the business owners that I mentor is I try to put it into context you can understand. Like as an example,

Speaker 1 how many dollars would you have

Speaker 1 if a million seconds have passed and you got a dollar for every second? A million, right? You'd have a million dollars, right? But how long would it take you to get to that million?

Speaker 1 How long would it take you to get to a million dollars if you got a $1 per second?

Speaker 1 It's tough because then you got to calculate it.

Speaker 2 About 12 days.

Speaker 1 12 days? Yeah.

Speaker 1 How long would it take you to get a billion dollars if you got a dollar per second?

Speaker 2 That'd be 12 times, what, 100?

Speaker 1 About 32 years. 32 years.
Right. That's the difference between a million and a billion.
And a trillion would take you 32,000 years to get to a trillion dollars. And our government.

Speaker 1 I mean, we spend on average about $7 trillion a year. Holy crap.
Right. As just a function.
And we collect about $5 trillion of taxes. So we borrow the rest, right?

Speaker 1 But every dollar that the government spends is taxation. Like every dollar it spends, because government doesn't make money.
It takes money and redistributes it.

Speaker 1 And I have big problems with how it chooses to redistribute most of the time. Yeah.
Right. That's my personal opinion.
But the reality is that's what they engage in.

Speaker 1 But every dollar they spend is a taxed dollar. Now, you may say, well, Edward, didn't you just say we only raise $5 trillion, but we spend seven?

Speaker 1 So that the other two is not taxes well it is because that borrowed dollar creates inflation and inflation is a tax right it's just one that hasn't been voted on that that happens via policy these are the things that get me fired up so yeah no that's fascinating so basically if we're collecting five trillion a year with the irs and trump's saying he wants to remove the irs yeah i don't i don't think it's actually going to happen that way.

Speaker 1 I love where he's going with it, but the reality is in order to accomplish something like that, you'd have to get enough buy-in from the legislative branch in order to eliminate that agency.

Speaker 1 And I just don't think that there's enough momentum currently within the political landscape to make that happen.

Speaker 1 But I love where he's going with it because it's sort of like the art of the deal, right?

Speaker 1 You state something that's so drastically disruptive. Anything short of that is still beneficial,

Speaker 1 but looks really good

Speaker 1 comparatively speaking. Like, think about like the issues with the tariffs as of late, right? So, let's tariff

Speaker 1 Canada, let's tariff Mexico. Now, is the reality that that tariff is going to come to fruition? Well, no, I mean, we have already seen it.
It's on pause now for another 30 days. Why?

Speaker 1 Because that is a dramatic, disruptive type of concept. Whereas the things that happen now just short of that look really good in comparison, but are much more likely to happen.
Yeah.

Speaker 1 It inspires the conversation to get to an actual result.

Speaker 1 So saying that we're going to eliminate the IRS is extremely dramatically disruptive, but it could lead to us making major reform, which is already starting to come out.

Speaker 1 Trump has announced his policies with regard to what he would love to happen with regard to the tax code.

Speaker 1 Obviously, a lot of stuff has not even gone into committee yet to discuss, but the things he's looking for, like no taxation on tips, no taxation on overtime, let's get rid of some of the high-level loopholes that some billionaires are utilizing exclusively.

Speaker 1 And those are very much manageable. Let's grandfather in, or at least redeem, if you will, the cuts that happened under his first administration.
Let's make them permanent.

Speaker 1 Like all of those things are short of eliminate the IRS, very doable with regard to the existing legislative branch and are still really good, right?

Speaker 1 They're stimulative and it actually has a benefit to the middle portion of our American ecosystem, right?

Speaker 1 So if you look at middle America with regard to the middle class environment, all of those types of reforms, quote unquote reforms and revisions to the code would actually be stimulative to that segment.

Speaker 1 But media, at least traditional media, tends to focus on the hyperbole that happens.

Speaker 1 And that's where it depends on where you get your information from as to what spin you're hearing.

Speaker 1 That's why I think a lot of people are unfortunately not served by our education system because our education system doesn't teach you how to go out into the marketplace and do your own research.

Speaker 2 Right. Well, the education system, at least at our college level, is very liberal.

Speaker 1 Oh, yeah. There's, well, liberal is just one aspect of it.
But I think, again, it's not aimed at trying to teach you to be independent from a thinking standpoint.

Speaker 1 It's teaching you how to memorize so that you can answer the questions through the design with which they want you to answer the question.

Speaker 1 Don't get me wrong, it's very interesting to learn the Pythagorean Pythagorean theorem, right? But how often are you going to actually apply that in your real life? Yeah.

Speaker 1 But here's something to contrast it with. Like, think about it.
Like every person in the United States that earns money. at some point in time is going to be required to file a tax return, right?

Speaker 1 Like if you earn money, you have to file a tax return. Why don't they teach you how to file your taxes in school?

Speaker 2 They don't.

Speaker 1 But why not? Like that's something you're required to do. Not everyone's going to be required to solve a theorem, right? But you're going to have to file your taxes.

Speaker 1 So that just goes to show you the difference of the challenges that exist within our ecosystem that is education that doesn't really teach people how to be independent, how to be, to not just survive in life, but to thrive through it.

Speaker 1 Yeah. That's why I spend most of my time trying to help business owners learn these systems, to learn the real rules of the game so you can actually be playing to win.

Speaker 2 There were so many mistakes I made my first year of filing. First of all, I didn't even know you had to because I was a 19-year-old kid and no one taught, like you said.

Speaker 2 Second of all, my state LLC was based in New Jersey. So that's 7% for no reason.
I could have made it in Delaware. And third of all, I already spent most of the money.

Speaker 2 So pretty much all the money I left went to the IRS.

Speaker 1 Well, from a structural standpoint, there is a difference between understanding your legal structure and your tax situation, right? Because those are two different things.

Speaker 1 A lot of people, like, again, I had a conversation with a business owner just a few weeks ago. They were talking to me.
They said, Edward, I want to save money on taxes. So where should I open my LLC?

Speaker 1 Well, that is not the question, right? Like saving money on taxes has nothing to do with your legal structure. Your legal structure is about asset protection.

Speaker 1 Your tax regime is about how do you organize your business? How do you operate it? Where is it operating, right?

Speaker 1 Because if you live in New Jersey, but open up a company in Delaware, that doesn't mean you escape the New Jersey income tax system, right?

Speaker 1 Because if you're operating out of your home office in New Jersey, you're still going to be liable for New Jersey taxes. Interesting.

Speaker 1 So your structure and your tax environment are two different things. They are related and they should be contemplated together when you're designing something, but they are different decisions.

Speaker 1 Does that make sense? Yeah, it does.

Speaker 2 What if you have an office, like a virtual agent or whatever?

Speaker 1 Yeah, having a virtual office doesn't mean you're doing business actually at that virtual office location. Like you could set up a virtual office in Wyoming as an example.

Speaker 1 right? But that doesn't mean you're actually doing business in Wyoming. If you're operating out of your home office in Florida, you're doing business in Florida.

Speaker 1 And even if you register your business in Wyoming, it still has to then register as a foreign entity doing business in Florida.

Speaker 1 Now, Florida doesn't have a Florida level income taxation, but New Jersey does. California does.

Speaker 1 Like there are a lot of states that are not necessarily tax friendly, but there are still ways to reduce your tax burden, right? Legally, right?

Speaker 1 There are legal and ethical methodologies by which you can keep more of every single dollar you make. It's just, again, these are not things that you're taught in school.

Speaker 1 In fact, a lot of accountants don't even follow these precepts because most accountants are taught to be compliance experts, which is essentially a glorified historian.

Speaker 1 They spend most of their time, their effort, and their energy just trying to figure out how to best tell the IRS what already happened. It's a yesterday job.

Speaker 1 Tax strategies about what do I do next week, next month, next quarter to ensure that next year my tax burden is lowered. It's a process, right? It's a methodology by which you're proactive.

Speaker 1 But again, most of the supposed professionals that are out and about in the ecosystem, they're not even doing it themselves, right?

Speaker 1 That's where I get into a lot of battles with most, like most of my social media commentary is me talking,

Speaker 1 really reacting to the financial commentary that others are making. right like i'll one of the viewers will send my team a post my team will put it on a phone they'll hit record on the camera.

Speaker 1 I'll hit play. They'll record me watching it for the first time.
And then I put the phone down and I just react and I talk about whether or not what I just watched was legitimate or not legitimate.

Speaker 1 Is this something you should follow or shouldn't follow? And regardless, how can I add value to what was just being shared? Right.

Speaker 2 Because that's how you glow about financial literacy. Yeah, you gained a million followers in 10 months that way, right?

Speaker 1 Yeah. I mean, we went from a little less than 6,000 followers in

Speaker 1 April of 2023

Speaker 1 to we're about 3.2 million followers. Holy crap.
All organic.

Speaker 2 Wow. Yeah.
I saw you on Russell's show and you were at a million, but that was a year ago. So you grew another two mill cents.

Speaker 1 Yeah. So across all of our socials.
So we're on Instagram, we're like 1.2 million.

Speaker 1 Facebook, about 1 million.

Speaker 1 On TikTok, about 600,000. Nice.
YouTube is our newest channel. We just passed

Speaker 1 116,000, I think.

Speaker 2 Oh, got the silver plaque coming.

Speaker 1 Yeah. Well, yeah, we managed to.
Oh, yeah. So it's interesting.
That's a big one. But so here's the thing.
All of that is a vanity metric. So So that doesn't really matter to me.

Speaker 1 What really matters to me is the amount of people who actually put into practice the things that I share. Like, because it's more important not just to get information, right?

Speaker 1 Because information leads to education, but education by itself doesn't lead to transformation. Facts.
The only thing that leads to transformation is taking action.

Speaker 1 Like you have to act on the information you get in order to get outcome, right? All outcome requires action first. And that's what I focus on.
That's why like we've created like private community.

Speaker 1 We've created opportunity for actual mentorship programs, coaching programs. Like that, that's our methodology by which we actually helped business owners actually transform their life.
Right.

Speaker 1 Because transformation is what people really want.

Speaker 1 You want, you want outcome. It's not enough to just sit back and like go through a course or read a book.
Like how do you put it into practice? Yeah. It's not just what to do, but how to do it.

Speaker 2 That's what matters. Do you find a lot of misinformation videos in your space on social media? A lot.
Because I see, I seek some wild ones about like infinite banking, about trusts.

Speaker 1 Yeah, I mean,

Speaker 1 there's a lot of individuals who know sound bites right but the problem is if you just get into understanding how the things really work you recognize that they don't really know what they're talking about like um the biggest commentary that happens like towards the end of the year you'll see a ton of social media influencers talking about like buy by a g wagon right the tax right off section 179 deductions well in reality it's two different sections of the code right 70 179 and 168k right there's two different sections that have to be used for that the other thing is why spend a dollar simply to get 30 cents in savings?

Speaker 1 Like, that's not smart. Like, that's not a prudent approach.

Speaker 1 Like, I don't, I never want a business owner to spend a dollar to get 30 cents in savings unless that dollar would have been spent otherwise. Like, you would have spent it either way.

Speaker 1 Well, then, yes, let's obviously capture as much deductions as we possibly can. Let's make it the most productive utilization of the dollar.
Right. But you don't just spend money to get a deduction.

Speaker 1 That seems to me very, very silly. Then you have a lot of social media influencers talking about how to essentially get credit and use credit

Speaker 1 as a business. Yeah.
Right. That's not a business.
Like borrowing money through credit cards to go out and buy the car of your dreams. That's not actually prudent at all.
Right.

Speaker 1 In fact, that's probably fraud. There's a variety of things that happen on social media that you should definitely not listen to.
And in fact, you shouldn't necessarily listen to my stuff too, right?

Speaker 1 Like everything I share, you should question.

Speaker 1 Everything anyone shares, you should question. Ask lots of questions.
Ask, well, how would I apply it in my situation?

Speaker 1 How do I actually get the outcomes that you're espousing by actually putting into practice X, Y, or Z? Yeah.

Speaker 1 That should be the process of actually getting the outcome.

Speaker 2 Yeah, I love that framework. Whenever I'm making an important decision, I get multiple opinions.
I don't get one opinion. Yeah.

Speaker 1 Well, getting one opinion is a way to essentially lock into an opportunity for a mistake. Right.
Right. Because if you only have one path to follow, if that path is littered with potholes,

Speaker 1 after a rain, you're going to have a lot of wet shoes. Right.
So at the end of the day, having multiple paths to go down and having someone to guide you through it, that's the best course, right?

Speaker 1 Find a mentor who's actually achieved the outcome that you wish to have, then reverse engineer the steps to get there.

Speaker 1 Because, again, the fastest path to that shortcut is someone who has been there and can point out the things to avoid along that journey. 100%.

Speaker 2 Have you ever reacted to a video that went viral and then the guy hit you up asking to debate or something?

Speaker 1 Yeah, we've had a couple of that, not debate. Usually, it's like

Speaker 1 protest in the form of that's not what what I meant, right? Well, again, my reactions are always authentic. Like I don't see the stuff in advance.
Like the, and then we don't source the videos.

Speaker 1 Like all of our community sends videos in and whatever has the most videos is what we'll react to, like most submissions, I should say.

Speaker 1 So from time to time, we'll get someone reaching back saying, well, that's not what I actually meant. And that's perfectly fine.
My commentary is never against a person.

Speaker 1 It's about what's being shared. I love it.
Because I've made thousands upon thousands of mistakes in my life.

Speaker 1 So I never want to attack the individual, but the information that's being shared should be challenged if it's inaccurate.

Speaker 1 And what I try to do is I try to point out where the inaccuracies occur and how someone could actually improve their situation.

Speaker 1 Like, what should you be doing or should you be considering with regard to the outcome?

Speaker 2 Yeah. Yeah.
Giving financial advice is all over social media, man. It's dangerous.

Speaker 1 It is. And again, the algorithm is going to send you the information that you've been interested in.

Speaker 1 So someone who's only like looking at like knitting content, I could not necessarily see about deducting a G-Wagon, but depending on what your personal interests are, yeah, you'll get shown commentary and

Speaker 1 content that is aimed in that direction. But the real challenge is being able to filter through the junk and get the actual value.
Yeah.

Speaker 2 Well, some of them go mega viral. When Grant Cardone bought the jet, I mean, that was everywhere.

Speaker 2 I'm sure you got sent that one, right?

Speaker 1 Yeah. I mean, again,

Speaker 1 can you get significant deductions from the purchase of business equipment? Absolutely. Is that the most productive use of most people's dollars?

Speaker 2 Probably not. Unless you were already going to buy a jet.

Speaker 1 Yeah, if you were already going to buy a jet, well, then, yeah, we want to maximize what is the best opportunity. I was talking with another business owner who's about to buy a jet.

Speaker 1 We were talking about the different opportunities, whether it's buying a jet as a whole jet, buying a fractal share, buying a jet card.

Speaker 1 I mean, there's different aspects of that, and they all have different impact to your actual tax code,

Speaker 1 to your taxes, to your tax return. And when you look at making the best choice, it's going to be dependent upon what's actually going on in your life.

Speaker 1 Like what one person does is not necessarily what the next person should do, right? In order to get the best outcome. Yep.

Speaker 2 When Trump released his tax returns the first time he was running for president and it said $0,

Speaker 2 how shocked were you?

Speaker 1 Not at all. I mean, when you have money, you can afford the best advisors, right?

Speaker 1 I've spent the past 30 years of my life diving deep into the tax code and learning how it is is simply a recipe book, right?

Speaker 1 And understanding that it is

Speaker 1 an incentive system, right? A lot of people think of the tax code as an ability for the government to raise revenue.

Speaker 1 But we just talked about the fact that it doesn't even raise enough revenue for the amount of money we spend.

Speaker 1 So the real reason behind the tax code is to incentivize you to do certain things and not do other things. And it does that through three carrots.

Speaker 1 deductions, credits, and the most beautiful word in the tax code, exclusions, right?

Speaker 1 And when you learn how those operate, then you could start to say, well, how can I apply those three things in my business so that I get to keep more of every dollar I make?

Speaker 1 Now, you have to marry that approach with understanding what are your long-term objectives.

Speaker 1 Because in year one, your objective may be, I just want to keep more of every single dollar so that I can stockpile dollars.

Speaker 1 I call that storage of capital because I'm eventually going to buy, let's say, investment real estate as an example.

Speaker 1 So in year two, I have to plan ahead because in year two, I may be looking at getting financing.

Speaker 1 So I may not be in a position where I can necessarily drive my income down to close to zero because I want to be able to prove to a lender that I have revenue upon which they'll lend me money.

Speaker 1 So I have to marry different strategies at different stages of my objectives. Yeah.
Right. And that's where a lot of people make major issues.

Speaker 1 I was talking with someone actually last year at the same time at Funnel Hiking Live.

Speaker 1 I was in a group of business owners and I can remember, I can't remember her name, but I can remember her talking like in the group saying about the fact that she was denied.

Speaker 1 She was trying to get, she was trying to buy a multifamily property, but the bank denied her loan application.

Speaker 1 She was making a lot of money, but on paper, she wasn't showing any of it because she had, she had utilized different strategies to drive her revenue really, really low.

Speaker 1 And the bank denied her, which is understandable. Now, in her situation, what I shared with her is that there are different types of loans, right?

Speaker 1 There are loans that are traditional in nature, but there are also loans that are a little bit more on the the creative side of the spectrum for instance statement loans which are oriented more along the lines of you provide the bank with 12 to 24 months of your bank statements and that's what they're really leveraging not your tax return so looking at your bank statements to show what is your reasonable net cash flow that could potentially be available to support debt reservice right debt servicing um and that was an alternative for her but but for that the other strategy would be to really change what you're doing year after year based on what your ultimate objectives are.

Speaker 1 Certain years, your objectives may be storage of capitals. Other years may be acquisition of assets, which would require potentially financing.

Speaker 1 So you really have to work with the right strategist who understands how to maneuver things in such a way to help you get to the outcome.

Speaker 2 Absolutely. It really helped me with my home buying process, having someone in my corner, because similar to that woman, I didn't have the tax returns to get a good house.

Speaker 2 I had to use a bank statement loan. Yeah.

Speaker 1 So there are tools and resources that are available, but you have to be in the know. And when you have financial wherewithal, you have the ability to hire the experts who actually are in the know.

Speaker 1 Like you don't have to personally, you personally don't have to necessarily become the expert, but you have to know enough to be able to hire the expert.

Speaker 1 You have to have the financial wherewithal to be able to hire the expert. And sometimes you have to stretch.

Speaker 1 Like sometimes you may not be necessarily in a position right now to hire the best possible person that could help you, but maybe you can hire the next best. And even then, it may be a stretch.

Speaker 1 But then you have to ask yourself, well, what is the best use of my capital today? Is it to get the best possible advice that I could start applying today?

Speaker 1 Because the compound effect of that over the next 10 years is dramatically better than waiting another year, waiting another two years before you could quote unquote afford it.

Speaker 2 Oh, I had a stretch, believe me.

Speaker 1 But you got the outcome.

Speaker 2 I got the outcome.

Speaker 2 Here was my philosophy going into it. So I pay my advisor 72K a year, but I wanted to protect myself legally.
I've been dealing with some nasty lawsuits the past few years as I get bigger.

Speaker 2 And in my head, I was like, wait, this will save me way more than 72K if I can pull that off.

Speaker 1 When you make money, you become a target.

Speaker 1 There are enemies at the gate, right? So I had this professor in high school. His name was Mr.
Mann. He used to teach history and he would teach

Speaker 1 like wars throughout history. And he would basically say that the start of every war was because of the have-nots wanting what the haves have.
But the same thing happens in business, right?

Speaker 1 The have-nots want what you have, right? There's individuals like creditors, litigants, opportunists, right?

Speaker 1 They're at any moment in time, they're ready to pounce to take their fair share, if you will, of your pot. Oh, yeah, right.

Speaker 2 They weren't hitting me up when I was broke.

Speaker 1 No, no,

Speaker 1 but neither was the IRS, right? So the IRS is sort of like that, that partner that everyone hates because they're only in it when times are good, right?

Speaker 1 They're absolutely interested in being your partner when you're making money. But when you're not making money, they're not coming up to the plate to help out.

Speaker 1 So that's why I see that as a very unfair situation. It's unjust.
Like I I believe that the IRS is essentially legalized mafia, right? And taxation is not theft.

Speaker 1 It's extortion because the IRS has guns.

Speaker 2 There's consequences. Now they do, yeah.
Yeah.

Speaker 1 Consequences to not doing what you're quote unquote supposed to do. So what I do, again, is I help business owners learn how to outsmart them, right?

Speaker 1 Like how to take what the code says, apply it in such a way where the result is you keep more of your own dollars. And then you get to decide, right?

Speaker 1 You can, again, if you are charitable in nature, like be charitable.

Speaker 1 why give it to the government to be charitable yeah that just doesn't make any sense to me well there's a lot of benefits to the charity stuff too i heard there can be right again that's a lot of misunderstanding yeah yeah how that works as well right because there you have limitations with regard to what you can contribute to get a tax deduction like you can you can contribute 100 of your money right you can do that but that does not necessarily mean you reduce all of your taxable income to zero right because you're limited with regard to your adjusted gross income relative to the amount you can give away whether you're talking about cash assets or or physical property let's say like if you wanted to donate a car or a house or something like that like there's limitations on how much you can give away that results in a tax benefit that doesn't mean there's a limitation with how much you can give away you can give away 100 of what you have right there's no one's going to stop you from doing that but if you want the tax benefit of giving it away well then there are limitations so you have to understand what the rules say with regard to what you want to achieve yeah so i don't know if you saw when oprah got the money from kamala but it was sent to her charity right yeah was that because she wanted to keep more?

Speaker 1 Or how does that work? So again, the, there's a lot of things that the ultra wealthy will do with charitable entities

Speaker 1 that don't necessarily result in immediate charitable benefit. Like, so as an example, you can create a foundation

Speaker 1 and you're only required to give away 5% of that foundation's assets in a given year.

Speaker 1 So if you donated a hundred thousand dollars to the foundation, you essentially only have to spend from that foundation in a charitable way, $5,000 of those dollars.

Speaker 1 That's limitation. And what many individuals will do is they will hire individuals in their family to run certain aspects of the foundation, to do certain things on behalf.

Speaker 1 And those individual family members can draw then a salary from there. Got it.
And that is a form of income shifting, right? So if you are a very

Speaker 1 successful entrepreneur, you're generating significant financial resources on an annual basis, your effective tax rate may be at X percent, whereas maybe your children or your brother or your nephew may be at Y percent.

Speaker 1 So if you were to donate money into your foundation, create a pool of resources, whereas other family members could work for your private foundation and draw a salary from it, their effective tax rate would be lower than yours.

Speaker 1 And that is a way where you can get a deduction for making a charitable contribution and shift that money to their tax bracket, getting getting a tax deduction by doing it, et cetera.

Speaker 1 But I believe that a lot of the ways this is shared on social media is shared only

Speaker 1 in like a fraction of exactly how you're supposed to do it. So it sounds extremely enticing, right? Like it sounds really good to look at like a

Speaker 1 picture of a chocolate cake on social media, right? On

Speaker 1 Instagram or in Snapchat or whatever it is, right? It looks really enticing.

Speaker 1 But when you start to really read into like all the ramifications of what that chocolate cake are, like how unhealthy it potentially is for you, like these are the same things with regards to tax strategies.

Speaker 1 You only see a snapshot of it.

Speaker 1 Understanding how you actually apply it

Speaker 1 could be good, could be challenging, right? And a lot of people just don't know how to apply it correctly. Because again, the

Speaker 1 60 to 90 seconds of information you get on an Instagram post or on a TikTok or whatever it may be, that's nowhere near the amount of actual information you need to apply that strategy the correct correct way within your life.

Speaker 1 And even figure out whether or not it's a legitimate strategy in the first place, because there's a lot of stuff that's going on social media that is complete junk.

Speaker 1 Like it's not, it's not even close to true.

Speaker 2 Have you seen the Dubai strategy?

Speaker 1 Yeah, I mean, so if you're a U.S. citizen,

Speaker 1 there are ways to reduce your income taxes by moving abroad, right? You can do that.

Speaker 1 Like that would typically involve having setting up a foreign corporation and getting a compensation from that foreign corporation because you can exclude a little over $100,000 of salary paid to you from a foreign corporation when you live outside of the United States.

Speaker 1 But as a U.S. citizen, you are taxed on your global income, right? But for that particular aspect of reducing your exposure to taxes, you are taxed on your global income.

Speaker 1 So simply relocating is not necessarily going to eliminate all of your tax burden. There are other things that would be required, like giving up your citizenship.
And I'm like,

Speaker 1 again, I hate the government, but I love America.

Speaker 2 I know one guy that did that.

Speaker 1 I was like, dude, that was I just don't understand it. Like, not worth it.
Of all of the countries that exist in the world,

Speaker 1 America is by far the best. Again, I'm very unhappy about a lot of stuff that happens here.

Speaker 1 But like, compared to what? Like, like, what else, what other country is going to give you the same opportunities that the United States is going to give you? Like, genuinely.

Speaker 1 What other country is going to give you the same opportunity for getting access to cutting edge technology, cutting-edge healthcare, cutting-edge opportunities for advancement?

Speaker 2 Yeah, Yeah, credit cards, loans, you could get all that.

Speaker 1 Like the United States is by far the leader. That's why everyone wants to come here,

Speaker 1 with obviously some exceptions. But the reality is a lot of people fight to get in here.
Not a lot of people fight to go other places.

Speaker 1 Not a lot of people would go through the effort and energy to get to other countries that people go through to get to here,

Speaker 1 both legally and illegally.

Speaker 1 But either way, it's a struggle to come in the United States if you were not born here. But people still do it, right?

Speaker 1 People still go through that struggle to get here. Why? Because America is the land of opportunity.

Speaker 1 But again,

Speaker 1 your ability to accomplish those objectives, those outcomes, those are really a component of a variety of variables. One, you have to have dedication.
You have to have commitment.

Speaker 1 You have to have grit, right? You have to be resilient in your

Speaker 1 focus with regard to getting to the outcomes you desire. But it's also important to have the right information.
Yeah. Right.
And that's why mentorship is so important.

Speaker 1 Finding someone who actually achieved achieved what you wish to achieve and then simply just reverse engineer the steps to get there.

Speaker 1 That's the cheat code. And

Speaker 1 that should be taught in school. It should be.
Like you should be able to go to an eighth grader and say, hey, listen, whatever you want to accomplish, if it is possible, then you can accomplish it.

Speaker 1 If it's possible, because all you need to do is find someone who's done it. Because that's the measure of whether or not something is possible.
Someone who has done it.

Speaker 1 Once you find that person, then all, then it's just about creativity. Can I reverse engineer the steps that they took to get there and figure out whether or not I could take similar steps? Right.
Now,

Speaker 1 it is possible to become an NBA star. It's possible.
A lot of people do it. But there's also a lot of things that required for me physically to be able to have that happen.

Speaker 1 I'm not going to be an NBA star. You could be.
You're like, you're like 19 feet tall.

Speaker 1 But at the end of the day, it's both aptitude and opportunity.

Speaker 1 But here's the funny thing about opportunity. It's always around you.
It's just most people aren't looking for it.

Speaker 1 Like, like, think about it. Like,

Speaker 1 I was talking with, I can't remember who this was. I was with another group of people and we were talking about like seeing opportunities as they arise.
Yeah.

Speaker 1 And we were talking about the analogy I gave is I asked them, how many people did you see wearing a baseball hat coming into the event today? And like, like only a couple hands went up.

Speaker 1 Like I saw like three people, I saw four people. I said, well, what if I would have called you yesterday and I would have told you for every person you saw wearing a hat, I would give you $100.

Speaker 1 How many people's hands would go up if I say, did you see someone with a hat? Everyone. Everyone would, right? Because they would be looking for it.

Speaker 2 Opportunity is the same way.

Speaker 1 Opportunities are always around you. It's just very rarely are we actually looking for them actively.

Speaker 1 But if you look for opportunities actively, you can then take advantage of those opportunities when they come your way. Absolutely.
And we're not taught that in school.

Speaker 1 We're not taught to actively seek out opportunity. Nope.
Right.

Speaker 1 but that is a component of success right getting to those outcomes are first and foremost you seeing the opportunity then you have to actually seize upon it you have to take action and that's where most people won't like yeah most people will complain about not getting something or not achieving something or not having something but very few are willing to actually do the work to get it no i see that all the time especially on social media but yeah i love what you said about mentorship when i started the podcast i studied the top five shows and reverse engineered what they did right that's what you got to do

Speaker 1 You're doing phenomenal.

Speaker 2 Yeah. But whatever industry you're in, that's possible.
And I was a huge introvert when I started.

Speaker 2 Like, there's no reason I should have been good at podcasting, but, you know, through repetitions and the right people, you got to put yourself out there and seek those opportunities.

Speaker 1 Yeah.

Speaker 2 You know, that was my issue growing up. I didn't seek opportunities.
I thought it would just come to me.

Speaker 1 I'd be curious to like, have you ever polled your audience to ask them like, what are the things that they think from a perception standpoint are holding them back versus the things that are actually holding them back.

Speaker 2 No, I should do that. That'd be interesting.

Speaker 1 Because I think a lot of people will push on to external forces, things that are holding them back. Yeah, like the reality of themselves.

Speaker 2 Yeah, it's easy to blame others.

Speaker 1 Yeah. All limitations are self-imposed.

Speaker 2 You think so? Like all of them.

Speaker 1 Every limitation you have is self-imposed. Wow.
Because think about it. Like, even someone with debilitating physical ailments, right?

Speaker 1 There are examples of those individuals exceling.

Speaker 2 Stephen Hawkin.

Speaker 1 Think about it. Like, every single thing that you perceive as a limitation is a perception.

Speaker 1 Right. And if you just choose to operate in a different discourse with yourself, you can get different outcomes.
Yeah.

Speaker 2 Mind is powerful.

Speaker 1 Yeah.

Speaker 2 Yeah. People underestimate the power of the mind.
There is this growing movement. I forgot to ask this earlier about a flat tax.
Have you seen this?

Speaker 1 Yeah. I mean,

Speaker 1 so again, What I look at is what is probabilistic. I don't think there's enough momentum in the legislative body to make that an outcome.
There's a lot of reasons for that.

Speaker 1 I think a lot of them are not necessarily good reasons because when there is this ecosystem the way the tax code is now, the government has a pretty interesting way that it can inspire certain outcomes, right?

Speaker 1 On a flat tax environment, it's hard to motivate people to do X, Y, or Z. But if I say, okay, as a government, we are not

Speaker 1 we're not good at creating housing for people. So let's create a system where we'll reward real estate investors, right? How do we do that?

Speaker 1 Well, we create the system of depreciation and not just that, accelerated depreciation so that a real estate investor can get a significant tax benefit by essentially creating housing opportunities for others.

Speaker 1 And that's the way the government incentivizes real estate investment.

Speaker 1 It's very hard to do that on a flat tax environment. because you get rid of all of those opportunities for benefits in the form of incentives through deductions, credits, and exclusions.

Speaker 1 So I just don't think that there's enough momentum legislatively for that outcome to actually come to fruition. I love the concept because that brings a sense of,

Speaker 1 I hesitate to say the word, but fairness within the tax code, right? Because again,

Speaker 1 fair is such a subjective word. So I don't like using it, but it's...

Speaker 1 probably the most accurate way to depict what a flat tax would look like because everyone is treated essentially the same relatively from a percentage standpoint. Now, you can have some nuance, right?

Speaker 1 You could say at a certain income threshold, maybe it's a little bit higher of an uptick and a certain income threshold below that, there's zero taxation, right?

Speaker 1 You could create a parameter that's like that.

Speaker 1 But again, that doesn't necessarily go as far as what I think the government wants to go with regard to creating opportunities for them to craft within the code incentivization systems to get you to do certain things or not do certain things.

Speaker 2 Do you believe the code should be simplified, shortened?

Speaker 1 I definitely think it should be. I just don't think it will.

Speaker 2 It's so long, I know.

Speaker 1 I mean, you have, you have thousands and thousands of pages that go into the tax code,

Speaker 1 not to mention like all of the other ancillary things, right? So this is another area where people just don't understand it. There's the law, right? So that's what.

Speaker 1 the the Congress actually creates, which is the law around taxation. Then an agency in the form of the Internal Revenue Service, right, codifies that law into regulation.
That's the tax code.

Speaker 1 That's not law, that's the code. Then on top of that are things like court cases,

Speaker 1 private letter rulings, notices, all of those sorts of things. That collective body of information is what we colloquially reference as tax law, right? But it's all of that stuff.

Speaker 1 And you're talking about tens of thousands of pages of information that someone would have to sift through in order to understand it.

Speaker 1 Now, the majority of that, what I just talked about, the majority of that is oriented towards business ownership. Why?

Speaker 1 Because the government understands that the real driver of everything that happens is business, right? So if you look at the majority of the tax code, it's oriented towards business ownership.

Speaker 1 Real estate, when done correctly, is business. That's a component of it.

Speaker 1 So if you learn to read the tax code through that lens, then you could start to

Speaker 1 reorient your thinking and your mindset around how can I leverage this to get positive outcomes for me now a lot of people have problems with that like i'm an unapologetic capitalist

Speaker 1 i'm going to do what's best for me first because it's just like when you're on a plane you put your own oxygen mask on before helping another why because if you are not financially free it's hard for you to help the others around you but when you are financially free everyone around you benefits your family benefits your employees benefit, your customers benefit, your community benefits, right?

Speaker 1 Entrepreneurism is the best way to change society for the better. So that's why I focus so much of my effort and energy trying to teach entrepreneurs how to be amazing stewards of their wealth.

Speaker 1 Because again, I don't trust the government. I just don't think they're coming to save us.
I don't care who's in office. It doesn't matter.
They're not

Speaker 1 fine. I used to work in it.
I saw behind the scenes. I saw the corruption that exists there.
So if you really want to change society for the better, like entrepreneurism is the way.

Speaker 1 If you can learn how to be an amazing steward of your wealth, the outcomes that you get are amazing.

Speaker 2 Absolutely. Edward, it's been a pleasure, man.
Where can people potentially become a client of yours?

Speaker 1 Well, we actually have an opportunity for people to jump in. I would say just go into our Instagram first and foremost.
DM me the word apply.

Speaker 1 My team would send you information on whether or not we would be a fit. Because I'm not a fit for it.
I have very strong opinions on a lot of things and I'm not ashamed to share them.

Speaker 1 But yeah, just jump into our Instagram, EdwardCollins underscore up level. DM me the word apply and my team will send you an application to see whether or not we'd be a fit.

Speaker 3 Perfect. We'll link below.
Thanks for phenomenal.

Speaker 1 100%.

Speaker 3 Yeah, good luck, FHL. See you guys next time.