Every American Building Wealth NEEDS to Know The Trifecta - 10 Reasons Why

everyone i want to take a few minutes and teach you about what i think is the most revolutionary way to organize your tax legal and personal matters it's called the trifecta check this out now some of you may already know this but i want to introduce myself on why i feel qualified to talk about the trifecta because it's really bringing together several multiple pieces of our personal and business lives into one structure i'm a cpa an attorney an author i've been podcasting and blogging for years i'm also an entrepreneur i've always had a small business i had a lemonade stand as a kid i also own rental real estate i'm a partner minority as well as a majority partner in different businesses because of this life experience and although many of you think hey this guy's a millennial how much does he really know i know i look young but i'm really okay that was a joke too but the point is this life experience has allowed me to create this diagram this trifecta type of organization over time and fine-tune it not only for myself but for thousands of clients through all the writing and speaking i've done over the years all of our attorneys and cpas and our firms teach this concept and i think you're going to love it so let me break it down quite quickly now as i diagram this out i'm going to visually represent it and then i'm going to give you 10 reasons why you should implement the trifecta and it will be a benefit to you the foundation starts with your revocable living trust revocable living trust now this revocable living trust often times known as rlt is the foundation that's going to own all of your assets also at our foundation is our 1040 tax return joint married single head of household doesn't matter and the reason why i put this here as well as your personal bank account is because water runs downhill money flows down into this structure this is your foundation that's gonna hold your trifecta as we start to split your life into two sides so the foundation is the first piece of this trifecta and all of your wealth your money your ownership flows down into your 1040 tax return or personal bank account okay so what's on the left side the left side is your operations your short term income your ordinary income it's anything that happens within less than 12 months think of a fix and flip or a rehab or if you're selling a product or service throughout the day it's something that's transactional it's operations in its ordinary income now i'm going to further divide this into three pieces but this left side is your in fact i'm going to erase that because i don't want to go there dividing it up further let's keep it simple at this point now the right side is our asset side it's the long-term side things we're going to hold for longer than 12 months this is going to be passive income related to our assets all right now in a simple way this is where you would think of here's the restaurant here's the building so over here i have my rental income over here i have my operations and so this might be an s corp which is typical now hang tight something you're like i don't need an s corp i gotcha we're going to break it down into some other options here but this will hopefully quickly explain the trifecta my s corp is creating income and paying me a living wage or a draw or distribution whole other topic but my trust owns my s corp the llc holds my rental income or investment income and the rental is owned through an llc which is owned by my trust so i've got this trifecta i've got my operations here holdings here trust at the bottom boom boom boom if i'm a realtor this is my 1099 realtor income this is my rental if i'm an engineer this is my escort for consulting here's my duplex here's my trust if i just have rental property and no s corp that's okay because over here we're going to bring in another piece and that's your day job your w-2 day job is part of the operational side not everybody has a full-time entrepreneurship business a rental income and a foundation that owns all these different entities it's okay we can build the trifecta over time but we have a visual representation that gives us a roadmap it helps us build our wealth and organize it for 10 important reasons now before i go further and divide this up into its pieces and parts let me erase these two sections to really further exemplify the power of this as you build your future wealth so to provide a little more detail i'm going to divide the left side into three pieces and the right side into three pieces all right so over here i'm gonna have on the left side a day job some of you may be single with a day job and a side hustle one in three americans now have a side hustle to make ends meet and also have started on the gateway drug to entrepreneurship a side hustle is a great way to make some extra money and something to fall back on if we lose our day job due to a worldwide pandemic hello so side hustle is a good thing which may start out as a simple little llc or sole proprietorship but this llc is owned by our trust the day job may be me or my spouse or both of us and this is helping give us income to survive and pay the bills and to cover our monthly nut all the expenses we have so we can then use this money to go invest in other assets if our side hustle takes off and some of you may already be there you might have a full-time business a full-time operational s corporation any client of mine that's making more than 50 grand a year and a small business is going to be an s corp no fans or butts i don't care if it's california to delaware to florida to alaska we're going to look at an s corp watch some of my other videos on that so the s corp which could be an llc tax does an s corp so this llc might evolve this s corp is going to be owned by my trust now other videos and sections of my books and writings talk about partnerships that might be llc's that flow into my s corp so this s corp is a parent company where it's going to be our brand or our trademark for building wealth in a public way but on the asset side i don't may not want people to know what the name of my entity is because i'm going to start bringing in privacy and i might have llcs that are built for rental properties with after tax money i've already paid taxes and i'm going to move money from my operation side to build wealth over here into little rental properties or maybe investment accounts uh brokerage accounts crypto gold silver who knows what these are my investments that i can live off the income if i want but do you own these llc's are you is it your name on the brokerage accounts nope it is your trust i want the trust to own all of your assets here as if anything happens to you all the crossroads lead down into your point that looks ugly i got to clean that up let's clean that up a little bit i want this to look pretty this is a work of art when anybody meets with our attorneys at our office even for a simple estate plan we're going to build you a diagram so every year we can review it together and go through i want you to share this with your insurance agents your accountants your financial advisors your family and your all these little investment entities or llc's are going to be owned by your trust now what's this big blank area over here this is your tax-free or pre-tax section and this is going to be stuff like a group 401k that you might have at work and so this day job may be over here and you're contributing and doing a match into your group 401k but it doesn't end there i want everybody to have maybe an hsa and certainly a roth ira maybe one for you your spouse your kids your mom your dad maybe we're going to do a cupboard ale for a niece a nephew or a kid a child of yours a coverdale is an educational ira and we may even set up what's called a solo 401k and if you don't have other employees in your s corp and you're the only w-2 employee that's full-time we might be funding a solo 401k you can do all these you can have a group 401k a solo 401k a roth in hsa at any income level that's right we're going to take a multi-faceted approach of building up these buckets so we can live tax-free as much as possible in our lives so what's the last piece here and of course look at all these retirement accounts the beneficiaries your spouse and then your trust over here the trust is also going to own your home the rv the motorcycles the toys the ranch the farm anything that's an asset over here that you're going to keep throughout the rest of your life or for a few years and then upgrade and it's not income producing it may be wealth building but it's there as a personal asset and this land or this home of yours is going to be owned by your trust now if there's asset protection needs or there's income producing going on we're going to move it up to this section of after tax investing so i'm going to put investments well anyway this my friends is the trifecta isn't this cool all right now i want to give you my 10 reasons why this is awesome number one asset protection i want a firewall right here down the middle i want this to be shell entities creating income paying the bills and keeping enough in the bank account for cash flow purposes to run the business and then out i'm going to move that money down to my personal bank account or i'm going to move it over here and invest i want to be building rental properties investment accounts paying off my home maybe i have some toys some land to farm a beach house a second home a cabin who knows what and then here are my retirement accounts that i'm going to be building up as well in a tax-free format as much as possible and what i love the mega backdoor roth the roth all those structures so number one is asset protection number two is tax planning see this side is ordinary income this tax this income on this side is going to get taxed at the highest levels or the highest rates and so i want to keep income over here and maximize my write-offs and keep passive income or tax-free income over here by having it in buckets or in different areas i can save taxes and do more specific targeted tax planning number three audit protection a lot of people say well all these entities and all this i'm going to get audited no you actually reduce your chances of an audit 90 of audits are very targeted in nature they're going to audit this entity or this company or this account or this piece of your 1040 and they're going to look at something that's out of whack they're not going to audit all these other pieces unless they smell blood in the water for some crazy reason so by actually having more entities and different structures going on you're separating assets and income from an audit risk of all being in the same bucket so i gotta love that i want audit protection number four is we're defining bookkeeping i love to have clear bookkeeping and money movement i'm gonna put this in red someone asked the other day well how do i get money from this side over here or how do i get money from over here over here guys this is a beautiful way to stay organized because money can move around in different ways i i like this um analogy of a of a bedroom with no chest of drawers if you try to just organize all your socks and underwear and jeans and t-shirts on the floor it's going to be a disaster some people go well all these bank accounts was a mess no it set you free all the organization of having these different bank accounts so if i'm making money in my side hustle i can move that money down to my personal bank account and then my personal bank account could do home improvements i can take money from my s corp and immediately fund a solo 401k or a roth or an hsa which would be different accounts i may even take this s corp and drive money down into my personal account and move it back over here to fund an llc for a rental property or uh a brokerage account or a wallet to buy cryptocurrency or hold another structure for gold or silver or something and what's cool here is all these different accounts would maybe have their own bank account in an llc where i can do self-directing so i can actually have checkbook control of my different retirement accounts to invest in what i know best so i love the bookkeeping as a benefit next and i wrote these down in a podcast that we did matt sorenson and i so i've got a link here in an art to an article and a podcast where you might be able to enjoy more discussion or elaboration on this trifecta the next one is performance evaluation by having operations in different buckets i can better evaluate their performance their success am i losing money here making money here if everything's in one big bucket or disorganized it's hard to make sense of anything and to make management decisions and wealth building decisions next i want to look at relieving stress and providing organization a lot of people think oh mark that just looks stressful to me it looks less stressful because i want you to feel like you can get on your app at your bank and look at all the accounts i can do performance analysis i can feel more comfortable that i have better asset protection better tax plan planning less audit risk and so a structure like this should actually set you free rather than making you feel uh overwhelmed with complexity organization will set you free the next thing is estate planning because someday you're gonna die someday you might be in a car accident someone may have to make health care or financial decisions for you but if you're six feet under i want all of your assets owned by a trust that defines where they go assuming you go well i don't have a lot of wealth do you have life insurance do you have a hsa do you have a ira do you have a retirement account you have a side hustle you've got stuff who's gonna get it your brother your sister your mom dad niece nephew spouse sometimes people are like well i don't have much and i'm single that's the biggest concern i'm like where is the stuff going to go that little life insurance policy that you have at work where's it go it's going to be go through probate it could go through court we want to create some organization so you leave a legacy and that's where the estate planning structure comes in we have an estate plan special every year we're right in the middle of it now at memorial day if you're watching this video later in the year our prices are some of the best in the country to just get organized to have a will trust powers of attorney all in a binder with your color diagram on top we're gonna build a little diagram for you with your estate plan so check out we're at 1500 bucks for any person married or single in any state with a well organized estate plan and a consult with an attorney i just throw that out so you can price check and go out and find someone else that can bring it all together that's great but just get it done the next piece is privacy i love the reason of privacy because what i can use is a revocable living trust that doesn't have my name in it blue sky trust green tree trust uh uh blue ocean trust blue horseshoe purple rain whatever you want to call it go with some fun names and name your trust so that when people go on public record to see who owns these entities or this property or your home your name doesn't pop up we want to try to create as much privacy as we can depending on what jurisdiction in what state there's some strategies that go that could be a little different based on the where you live in the country i also am going to use privacy for naming my llc's over here but have very pub public trademark naming over here i have mark j kohler inc look it up find me i got great stuff i want to sell it to you i want to help you i want to teach you but over here good luck finding my rental properties or my land or my assets so i'm going to use privacy wherever possible even mail forwarding where my personal address isn't out in public domain number nine understanding and clarity i've had clients that are just getting started in life and some that are worth 10 million or more and they come after a meeting of just an hour just an hour we build a diagram and they go oh my gosh this makes so much sense i've been where have you been mark where's your team been i've been trying to get an understanding of my future plans my organization my bookkeeping my structure hell it i i've just been lost even though i've been building stuff it's just in a drawer i want to get it and out and build that erector set so i have something to look at that makes sense and number 10 the number 10 reason to build a trifecta in a diagram for yourself and review it every year is to save money think of all the money you're going to save not having to re-explain your mess to every new accountant you meet with every new insurance agent every lawyer every financial advisor your family your loved ones that i want on a board of directors in your entities so that you can get help and pass on literacy financial literacy to your family and loved ones even if it's just that best friend of yours and you've got a lifelong relationship with someone show them what you're doing they can pick up the baton and keep running if something happens to you and all of that saves money when it's organized you don't have to pay people for more time you're not going to set up entities you don't need you're going to be much more targeted in your decision making because you have a structure in summary take the time to build a structure that you can build upon once it's done you can carry it with you everywhere you go i've got my diagram right here in my annual planner i carry around my mark cooler monthly planner with my strat plan my business plan my calendar i'm not going to show you my pass i'm going to take a picture and book but it's private it's it's a way that i feel like i'm making progress and it inspires me that could be one of these other 10 reasons it gives me a plan for the future so no matter who you work with whatever professional where you may be a professional yourself in these types of areas sit down and take the time to do this for you for your clients for your loved ones and build a trifecta that will help you build that structure to better live your american dream thanks

Channel: Mark J Kohler

Views: 36,489

Keywords: tax, legal, entrepreneur, asset protection, wealth building, cpa, attorney, lawfirm, most amazing top 10, top 10, Trifecta, mark j kohler, podcast, Ten reasons why, Tax planning, perfect legal structure, operational and passive income, business owners, organized, you need the Trifecta, mark kohler, kohlercare, Mark J Kohler, Mark Kohler, Mat Sorensen, Mat, MArk, KKOS Lawyers, s-corp, LLC, estate plan, revocable living trust, income tax, taxes, taxation, tax refund 2021, Legal, Perfection

Id: kXWLsoxDknU

Length: 19min 49sec (1189 seconds)

Published: Sat May 29 2021