Guest Speaker: Mark Kohler

The Business Owner’s Guide To Financial Freedom

Mark J. Kohler, M.Pr.A., C.P.A., J.D., is a best-selling author, national speaker, radio show host, writer and video personality for, real estate investor, senior partner in the law firm Kyler, Kohler, Ostermiller & Sorensen, and the accounting firm of Kohler & Eyre, CPAs. Mark is a personal and small business tax and legal expert who helps clients build and protect wealth through wealth management strategies, as well as business and tax remedies often overlooked in this challenging, ever-changing economic climate. His seminars have helped tens of thousands of individuals and small business owners navigate the maze of legal, regulatory and financial laws to achieve greater success and wealth.  In his newest release and #1 bestseller, The Business Owners Guide To Financial Freedom: What Wall Street Isn’t Telling You, Mark reveals the secrets behind successfully investing in his business while bypassing Wall Street-influenced financial planners.


What you’ll learn in this episode:

*Mark explains that at heart, he’s an entrepreneur, who as a kid had a lemonade stand on the corner and hired kids to paint white fences. He had small businesses in high school and college. He went on to become a CPA and tax attorney. His ultimate goal was to help Main Street America.

*He’s a partner in a law firm, partner in an accounting firm and in a trust company directed IRA. When he’s on a panel talking about tax strategies, he’s the guy speaking plain English that everyone understands.

*His bestselling book The Business Owners Guide to Financial Freedom grew out of people asking him what they should do with their money as a small business owner – and the fact that their financial advisers, beholden to Wall Street, only talked about stocks, bonds and mutual funds. He would tell his clients what his other successful clients were doing with their money. He wrote the book in response to their questions, like How do I sell my business? How do I get my family catch the vision of entrepreneurship? How do I pass on my real estate to my children?

*People tend to put their money back into their businesses. But it can be dangerous if there is any change in the industry, embezzlement, health problems or a problem with the business itself. So the question is, “Where have you deployed your other profits?” A good place to start is a self-directed retirement account that allows you to invest where you want.

*Mark explains the concept of the “financial landscape.” It’s this gate you’re going to walk through in your landscape, getting education under your belt and building up your portfolio so that you become fit and healthy enough to double down and invest more. Your landscape can look very different from someone else’s. To determine this, you should look at your own future and ask some questions: Are you married or single? Young or old? What are you good at? What do you love doing? What do you really want? “The landscape is kind of a fun concept,” Mark says.

*Mark explains the strategy of the Backdoor 401k. 401k doesn’t mean stocks, bonds and mutual funds, it is a vehicle. It could be real estate, cryptocurrency, mutual funds, a racehorse, farmland, raw land or a small business down the street. When a stockbroker tells you not to self-direct, Mark says, you should not let him drive the car. “The reality of self-directing your 401k isn’t that you can’t do it. It’s that your Wall Street machine doesn’t want you to know about it. I want you to start driving the car and invest in what you know best.”

*A group 401k can still be self-directed. If you have no employees, you have more flexibility and can set up a solo 401k; you can give those options to your employees to do the Wall Street thing or self-direct. A solo 401k says that a small business owner can get a tax deduction funding their own 401k with either Roth money or by traditional means.

*You can’t fund a 401k with passive income, say, from an apartment building. But there’s a backdoor method. If you don’t have a 401k at your day job or you day job is managing passive rentals, you can create a little management company and pay that company/little corporation a management feel to manage your own rentals. You pay a management fee just enough to fund the 401k. while the sister company you created has zero taxable profit. You get a write off in your passive business of real state and can backdoor yourself into having a 401k where there can be matching or zeroing out the sister company. Now you’ve got money in another bucket and the 401k is completely asset protected. You’ve got a 401k with money that can go out and buy other real estate. It’s also a tax write off.

*Every November, his law firm conducts a special deal ($400-800) for attorney supported consultation on 401k’s from start to finish. You can get a free consultation for 20 minutes. “You can create the structure now. Get the write off in 2019. You don’t even have to fund the 401k until as late as September next year, even though you just manufactured the write off now.”

*All CPAs working in this area for small business owners know that they can push the contribution out any time in the next year with extensions and be fine.

*Mark does the intricate math to explain the limitations arguments in the $25,000 example he and Lance discuss. The key is looking for the sweet spot, where you can control the salary level, around $25-30,000 in payroll with a 25 percent match. He explains how he and his wife got a $50,000 deduction that they can pay next September.” Mark explains this in more detail on a YouTube video you can access by searching “Mark Kohler, sweet spot 401k.”

*Mark explains how you don’t have to wait until July to take a $50,000 position with your 401k in that new LLC. You can get a write off to buy more real estate that grows tax free inside your 401k.

*Mark says that you should ask your CPA for tips once in a while. Ask him/her where you should buy rentals. The follow up questions should be, Where do you travel? Where does grandma live? Where are the kids going to college?

*Mark relates an example of buying a duplex near his mother in law’s house. Every November he would take his kids and employees up to work on the rental property and take a tax write off from the travel. It was a good way to teach his kids about real estate. He explains to them the value of investing in small apartments. “You really want to think about our investment strategy and tax strategy when we bring this real estate investing together.”

*He joyfully explains why he enjoys involving his kids in real estate. One of the advantages is taking a write off from paying their family numbers for being in the business. “Let’s buy real estate where we travel and make it a holistic approach.”

*On December 7, he will conduct his ninth annual business owners workshop, which includes investors. If you invest in property, you’re a business owner. The single day event is $200 and includes lunch. It’s a good quality 9 to 4 session that takes place in Orange County, CA. If you can’t come in person, you can stream it on your TV. It includes a PDF of the workbook and a live chat throughout. They discuss: year end tax planning, a legal asset protection and structuring your estate plan.

*Mark has a podcast called “Refresh Your Wealth.” He also has done a weekly newsletter for the last 11 years, featuring a YouTube video and some articles. He says that the next time you see your CPA, you should tell him/her that you have taken his seminar and start asking the hard questions.

*Mark offers a final tip on how, depending on your business structure, you can make your car part of an overall strategy and write off all or part of it when you do your taxes.



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