How To Build WEALTH In An Election Year

so I want to say this in today's economic climate there are 5 to 10 things you can do and we're going to go through those here and this is why we're talking about this and I want to say this should be not just an election year I don't care if it's a good economic climate or a bad economic climate these are things we should be doing anyway I think a lot of people are like what should I be doing differently you know this is an election year if so and so wins it's going to go the stock market and the economy is going to go on fire if someone so loses it's going to be chaos and the country's going to and I need to move to another you know like I need to move to Canada it's like okay all right you need to have a plan yeah it's not always going to be sunshines and Roses you know you've got to have a plan so we're going to present that plan [Music] today welcome everyone to the Main Street business podcast this is Matt sson I am sitting next to the Great and Powerful Mark J ker we are so stoked to be with you today talking about what Mark well it's a somber topic it is serious it's what to do maybe right now in this economic climate and also does the election year impact it we're getting a lot of comments in social media hey what are you guys are doing or recommending does matter if it's going to be red or blue and you know what's going on with Trump versus Biden and Nikki Haley is that going to should I change my investment strategy what should I do fair questions we've got some I think some very helpful answers but most importantly there's millions and millions of Americans that are feeling the pinch it is bad people are using credit cards to pay for groceries they're not sure what things are going to be looking like the cost of living is off the chart for a lot of people in certain brackets of income it's very very challenging out there and we re we understand that we're about Main Street America uh Matt and I both grew up in uh simple homes with hardworking parents I grew up on a farm Matt was in the suburbs both of our parents were business owners and Real Estate Investors also had W2s at times and we just really have a lot of life history too that we hope will impact this but lots to share on this yeah I think we're in the trenches too as business owners and just how they're trying to make good decisions but we've also had the thousands of consults with clients seen what works and what doesn't and also been through some years where it's been tough you know and had some uh scars ourselves and some lessons we've learned there so let me hit the first thing though about the election year thing cuz I just have an opinion about that you know there's differences of opinion about this when you bring up election obviously yeah I have some good political debates by the way not that I mean I think we're both business owners and we like good business policy but we'll leave it at that but yeah the the politics of it yeah I think a lot of people are like what should I be doing differently you know this is an election year if so and so wins it's going to go the stock market and the economy is going to go on fire if so and so loses it's going to be chaos and the country's gonna and I need to move to another country you know like I need to move to Canada it's like okay all right now Peter maluk someone I listened to on this stuff very smart award-winning investment adviser he's done all the statistical research on it he said it makes zero difference whatever party's in power he says every year election year and this guy's been doing it for 30 years my clients berserk and my message to them what are we going to do in an election year the same thing we did the year before it doesn't move the needle and so um the focus on it I think is a lot of wasted energy there's different policy things we care about as Americans that get us excited one way or the other on what's going to happen on Election Day but from a financial standpoint um don't create more chaos in your life by making poor decisions or emotional decisions knee-jerk decisions or political decisions I should say too and some people like I'm going to leave the country you know okay come on all right settle down all right and I got those I've had those conversations with clients um you know I need to give up my US citizenship can you guys help me with that okay slow down so the first thing my message is going to be let's not overreact now there's a lot of things in this climate it's a weird economy right now I think there's been some winners and losers obviously um it's a strong economy but there's definitely been pressures in certain areas and a lot of people have certainly felt it yeah and we've got a list of probably 10 different things here we're coming to we got to get this kind of this right out of the gate so I want to repeat that name Peter maluk very he's got great book he's co-authored with Tony Robbins as well um please do some Amazon uh book searches pick up his book I think it would be it's it's it's very sound good policy reading and you know what his message is very similar to the Warren buffets the Tony Robbins the uh Dave Ramsay uh just The Wolf of Wall Street that was interviewed recently on what program he just he who was out there on the extremes is now back I you quote him I'm always like wait what yeah well he's out there saying here's what I learned don't do what I did for those years and and it's all back to sound quality long-term investing be careful now I've got an example for you this is good okay everybody this is this is super good because sometimes when the storm clouds come we can make knee-jerk reactions that just really can destroy everything we've been building for years two words Waste Management now okay for some of you that may have been following the news two weeks ago in Phoenix was the Phoenix Open Waste Management now this has been around since 1937 and they the Thunderbird Club is the one that established it has had a lot of success over the years with this really cool golf tournament and corporations come around from around the country around the world to Shmo and have fun and this is one of the more party type PGA events some of the players don't even like coming here cuz it's nuts on the 16th hole yach but it's been a lot of fun the last couple years this just been a great experience well what happened this year so in the middle of this weeklong event essentially I won't get into too many details Phoenix it is like you know Garden of Eden in February but not this year the storm clouds came now again this could be some economic let's look at the metaphor here it could be some economic challenges it could be an election year but the storm clouds came and and it if you want to start reading the news Clips they were actually interviewed the president of Thunderbird uh yesterday and he said everything's on the table he goes it was a disaster so here's what happened knee-jerk reaction Wednesday rain clouds come Court you were there on Wednesday I was there on Friday yeah the rain clowns claimed they postponed the course it was mud and water and everywhere and people and corporations had spent thousands and thousands of dollars to be there and it was a disaster and so need yourk reaction do we give people money back what do we do they didn't have a plan and they said oh we'll just let them come back tomorrow okay that was their Theory we don't want to give them their money back millions of dollars in corporate sponsorship and tickets sold we're just going to you know what we'll spread them out over Thursday and Friday and they can they can come back you know we'll let them come back and so I was there Friday it was like Disney's land times three it was insane it always is chaos and busy there yeah it was next level and so what happened though on Thursday and Friday intermittent weather continued knee-jerk reaction got to solve the problem got to make major changes not stick to the tried andrue procedures Saturday by 9:00 a.m. they just opened the doors they just said everybody come in you know let just come have a great time we don't want to give money back you know it just come and they estimate over 30,000 people that weren't even ticket holders because everybody was calling their friends get over here the doors are open they estimate over 500,000 people on the course and it got chaotic I had some kids that were there I didn't go Saturday I was there Friday they said it was apocalyptic it was you could they thought it was almost like CGI how do you get that many people in that small a space and what is everybody doing they're drinking they're pissed I can't see golf it's nuts and it was a lot of those sponsorships is free alcohol it was off the chart now see you were like I got to get on you I got to read on this but um in the moral the story ends where at 2:00 the cop said this is going to turn into something very very bad and the police chief said I don't want to be the next res you know first next one to resign says no more alcohol so they shut all the bar bars from corporate to all the booths everything said no more alcohol at 2:00 and the fire chief was in on this and they said that'll get rid of everybody and it did every like I can't get a drink I'm not here for golf I'm out of here and so by 5:00 it started to dissipate and they said no one else can come in well I have a friend that was flew in a client on a private jet that day for the event they had spent thousands of dollars to take him to the corporate booth for the Saturday afternoon big deal we're getting to the you know the final pieces of this tournament and couldn't even get in and they' spent thousands so you have corporate sponsors that are now blocked from coming in people you know you watch the Youtube video sliding in mud and jumping in the lake I mean it was chaos and so but the moral you know Sony we're going to see what's going to happen there's going to be some Fallout but the moral of theory story is and I love thanks for letting me explain this cuz I really is going to set the stage for our list is you don't overreact you don't kneejerk you have a plan and that's what this podcast is about I hope that was somewhat interesting but it it's just been fascinating how you need to have a plan yeah it's not always going to be sunshines and Roses you know and and you've got to have a plan and that so we're going to present that plan today but I I like that but I I don't know who said it but it's always great to have a plan until you get punched in the face everybody's got plan until they get punched in the face then what am I doing you know I don't know if the Thunderbirds had a plan there something out they definitely got punched in the face on Wednesday and it was chaos throughout the week but all right well I like that I like the um but let's give you some things to make a plan and like start thinking about this and be ready um we got the first five who says uh I think he says um be ready so you don't have to get ready just be ready you know all right be ready everyone all right so first one we want to hit is Bud I know it's boring oh that's that's okay I've got that as number three oh what was number one for you number just do a p&l well that's how you get to the budget well fair enough but some people you know okay may I two for two for one here on on the budget and p&l okay know where your income and expenses are you know what I need to rephrase that do a balance sheet that's really what I meant oh okay okay fair enough I I own that I own that when I was saying I was like why is he going there Ian we're writing this down going because we've done some similar podcast on this and we really wanted to fine-tune something for today no do a balance sheet like just what do you got yeah what's your inventory your assets and also your liabilities your debt yeah yeah what where's my debt what do I have how you know and that should give you your net worth number to know where am I at right now a good plan is has to First identify where you at then you want identify of course where you're going I like to do it in 10e chunks and work backwards but let's figure out where you're at right now from assets and liabilities that's your balance sheet and I think even before you get to that budget you approach debt and I like the way you talked about approaching debt it's not just get out of debt yeah yeah Mark said let's just say let's get out of debt and I'm like let's be strategic about debt every like get out of debt well duh but how do I get there and be strategic about and there's different examples of this for example should I to take out a home equity line of credit when you look at my balance sheet it shows that I have equity in my house should I use that equity and leverage that to pay off high interest credit cards should I use that Equity to start the small business should I use that you know what I mean like let's be strategic about it should I stop should I not pay off my student loans cuz they're in deferment and I think if Biden gets reelected again talk go back to election it could be forgiven you know like these are strategic debt decisions where am I allocating my income which gets to your budget here in a second to get to tackle this debt that's on my balance sheet yeah I I like doing that balance sheet number one and having a plan for your debt which doesn't mean always a debt snowball but I will say this if there's some bad debt and we've had had shows on good debt versus bad debt please go back and listen to those but if you've got some exposure there subscribe to Dave Ramsey I can't I can't say it any better the guy is the goat on getting out of debt and now he's going to take a hard line he's going to want you to get out of every possible debt out there now we differ in the fact that we like good debt that makes you money whether it's business debt or real estate debt that creates cash flow so keep that in mind don't buy all in on that but there's so much Consumer Debt that need we need to get rid he's got great approaches to student debt how to build a debt snowball we have resources on our site for that too but I like what Matt said we we can't go in at wholesale all debts bad yeah we got to be smart so that's number two now budget may I Turn You Loose yes what do you like about budget what I like about budget I think I mean obviously budget let's just be clear about this we're talking about where's your income sources of income and what are your expenses every month what do you got to cover every month in your budget but you should also be including in your budget one thing I want to make sure everybody's doing is what am I putting aside I'm not talking about getting by I want to make progress and and that progress could be paying off debt as we just talked about putting maxing out retirement accounts you know we want to be the crowd of people who maximize our retirement accounts not our credit cards you know what I mean so am I maximizing my retirement account contributions am I buying the rental property a year am I investing in my small business to try and grow it or or the side hustle am I investing in my career if that's my focus and and and getting better skills that are giving me better earning income power so don't just think of it as my food my travel my auto my my rent and everything like that I want to get a little next level on your budget about increasing that income side yeah I love it now my take on this and I want to repeat this for everybody we know it's it's tough out there uh we've got family members that we're helping get through this difficult times ourselves we're making adjustments and so I want to say this in today's economic climate there are 5 to 10 things you can do and we're going to go through those here and this is why we're talking about this and I want to say this should be not just an election year I don't care if it's a good economic climate or a bad economic climate these are things we should be doing anyway and so I'm going to repeat them number one at least know what you've got in the bank what are your assets what are your liabilities number two should you have a strategic approach to some of that debt number three and I I sometimes I hate the b word the budget word i' like just track it at least tell me what what's coming in what's going out it's so hard for so many people to get on a budget but at least pencil out what is my net cash flow every month and hopefully it's positive then number four and I like this lead leans towards Matt is taking some of that money if you have a little excess and building some cash reserves this is Dave's Ramsey 101 as well is that crap's going to happen and you're going to get back into credit card debt if you don't have a cash reserve for when things go bad and in this economic climate they could get worse so once you get your balance sheet you got your debt plan you're tracking where your money is going have that cash cash reserve and I love what Matt said make sure you're still building for the future for that next purchase that retirement account and that's where that tracking and budgeting is all about we don't want it to be miserable you can say I can do a thousand a month I can set it aside for cash and then for my IRA or whatever it would be and and I think those are the first four we got more those are the first four core to to deal with this current economic climate we're in yeah and I think tracking is so critical you think of any business that's not tracking their income and expenses how the heck do you expect that business to succeed there be total chaos yet so many individuals do that so many individuals that their personal budget just don't track it and they're they're not thinking about that and being strategic and having a plan yep Waste Management Open which brings us to number five liability and there may can be some Li lawsuits so who knows uh that example um number five do a legal review as well if we're going into an election year that could be precarious fair enough there's a lot of people out there that do feel it could be precarious in an economic climate that's unpredictable be ready I loved how Matt said that are your entities all in place we've got this new Boi reporting for finson are there entities you need to get rid of do you have an estate plan the last thing you need is a lawsuit right now are you up to date on your minutes and your corporate structure and legal structure do you have rental properties and Investments that need more protection I'm going right now through some insurance adjustments from one state to another do I have the right insurance policies I'm over am I overpaying for insurance that's part of that legal review am I lean mean and this is a circle to freaking wagons Circle them yeah all right beneficiaries up to date on those insurance policies or bank accounts or retirement accounts have had Life Changes like that do I have an estate plan do I got minor kids and all these things these give you certainty and peace of mind too that when you're in a world of uncertainty can give you a little bit of peace and comfort I think I think your state plan is one of those things that's been on people's list for a long time that they're just like put it off put it off put it off no this is one of those areas that's going to give you some certainty and planning and so I I like that the other thing that's really unique for 2024 for any business owners Real Estate Investors with entities is you have to comply with the new finsen rule the Boi business owner information report every LLC S corporation entity out there you're going to have to comply with this there's a fi Federal filing you got to file we're helping clients in the law firm and our business Main Street Business Services where we help clients maintain their entities and we have 10,000 plus clients we do that for that's Mainstreet business.com but that is another thing you need to add your list that's the government put this on your list for 2024 whether you like it or not yep I love it now these are down in the description there's our five now we get into the next five and these are business related now some of you like well I don't own a business or I don't want to go there okay let me try to educate you on a few points first of all a side Hustle is a small business if you're getting a$ 1099 for doing anything and right now estimates are that well over 40% of working Americans have a side gig they got a 1099 company it could be driving Uber on the weekend it could be selling something on eBay some sort of Internet Commerce it could be a Consulting gig get any other income you're getting outside of a W2 relationship that's a small business if you have a rental property that's a small business you're creating income not as a wage earner that's first of all many of you are like oh I'm already there yeah we got five tips for you but my first one is of these five is if you don't start creating another source of income to rely on and if you do have a gig or a small business start creating more sources of income within that business the and being smart going I hey I got to I got to create more income here because I need more to fall back on if I have problems personally and in your business that side hustle that side gig those extra sources of of income so so much so so important uh as a business owner and as an individual yeah and I think for any of you that do have the business or the side hustle this could be your main gig this could be the side hustle gig is I think the number one thing that Savvy business owners do is they are focused on the services and products they're delivering and the pricing as the world's changing around you you need to be making changes in your business if we've had inflation over the past four years that's been on a straight up trajectory have you changed your pricing all of your other your customers are used to paying more everywhere else for what services they're getting maybe this is why you're feeling the pinch is you haven't addressed your pricing are you in a competitive business space where there's lots more competition now do you need to be enhancing your services and offering more and trying to distinguish yourself from your competition so I want people everybody to look at their services they're offering and also the pricing of those Services I think there's a lot of you business owners that are underpricing your services your customers are used to paying more and would pay more so long as your services are excellent and your delivering I love it you promise yeah and Matt hit um seven and eight I want to repeat number six in our top 10 list is now shifting to creating more sources of income individually or Revenue within your business how could you create more and I like what M said number seven pricing really looking at the quality of your services and looking hard at it nothing's off the table I likeed how that president of Thunderbird said too hey we hit a crisis everything's up for talk you know and and don't protective or emotional about well we've always done this service or we've always done that it could be a loss well we're going to come to that on number nine but look at your pricing in product mix and which and product mix was number eight being diverse could you provide different services or more services for some of you like well I don't have that big a business let me give you some examples are you driving Uber should you pick up some door Dash and GrubHub with that should you be doing lift and Uber simultaneously I've heard a lot of people saying hey when there's not an Uber ride I'm picking up a GrubHub oh when I'm not doing GrubHub I'm over here at door Dash oh when I'm not on lift I'm over on Uber and see now you're diversifying even as a solar preneur you're just like where can I create additional Revenue next are you using turo do you have an extra car laying around that you're like hey I don't even use my car on the weekends or during the week I commute in with public transportation put your car on turo could you be making money with an asset that's just sitting there waiver uh not Waverly outdoorsy could you put your RV there's estimated over 20 million RVs out there in America right now sitting on the side of someone's house could you clean that up and put it on Waverly and create some income with your RV are you doing an IID accessory dwelling unit Adu do could you have something you could add to your space where you live to create some extra Revenue do you want to rent out your basement do you want to rent out another room see that's getting creative and with in a sense pricing diversification and extra Revenue yeah I think a lot of times it's just working with what you already have you know working with that property you could add the Adu maybe doing a pad split on a property that's a more beneficial way to get income maybe going to a midterm rental instead of doing long-term or short-term maybe that's the right price point where you can maximize this is getting creative with a lot of the things you already have and I'll add to that this is for everybody increase your skills and knowledge this SC kind of goes without saying but and that might take some investment actually that might take some money that may take some chur certification and some training you need to invest in yourself to increase your skills so you're more valuable to then go earn more money and have more income power that you can use to acquire more assets so you don't have to work at some point and was one of my most successful friends was a medical doctor and I remember him telling me he said this is how you get rich he's retired okay he's my age it drives me bonkers but he's like learn a valuable skill go work hard and charge people for it and use that money to buy income producing assets that's it that's all it is everybody's got you got to earn the money first to be able have money to invest then you got to be laser focused and and work hard to do the work together then you got to invest it in income producing assets that eventually produce more than you working in your limited amount of hours you can do in a day there's no more hours in a day that's the one bad thing about being a lawyer you can only Bill an hour in an hour you well for for some lawyers divorce lawyers they've got a different approach yeah so you can cap out anybody in a service business you know what I mean how did you work 32 hours in one day but that's it and I think it goes back to that very first step of increasing your skills which increases your earning power and your value to any company or whether you're owning your own small business or you're working in a business that will let you have more income to acquire income producing assets I love I combined pricing and diversification and product development I put that all under number seven I created number eight more education and I want to add to more education that doesn't mean always go signing up for a class or a course or a college class heaven forbid I don't know I I love college and university I've spent years there but is that going to move the needle next month in my income and so you got to be careful of what education you choose but some of it is just being on some good podcasts get signing up for some online courses that could be a few hundred getting in some communities whether it's a closed Facebook group Discord whatever and what what are you trying to learn about and instead of going home life sucks you know I'm not making ends me life sucks stop on the way home get a sixpack of beer and snug snuggle up to Netflix or prime that's not increasing your education and I think it doesn't have to be a big deal number nine and 10 I'm going to say these are kind of The Cutting piece see before it was like let's generate more now you got to make some hard decisions and so I'm going to say number nine is maybe getting rid of some things that are low margin they're not making you money come to find out driving lift is not as good as Uber I'm going to go back to Uber I'm going to or Uber is not as good as LIF I'm going to go over there or maybe I've got a product in my landscaping business that's a waste of time doing fertilizing over here is not good so you're going to do that family or friends you've been a customer of yours for years that you're charging that old price and you grandfathered them in stop yep yep I love it and and let's unpack that as and number 10 is just cutting costs there may need to be some employees that need to go there may be additional software how many of you have gone and looked at what's hitting your credit card on a regular month of annual or quarterly or monthly fees for software and this that or another and just showing some austerity and that means getting rid of expenses I don't need and assets see we go back to the original balance sheet are you sitting on two four-wheelers or a jet ski or a boat that you use two weeks out of the year holy crap and a climate like right now maybe it's time to sell that and turn it into some incom producing small business or another asset so I I just put so tell me your thoughts on kind of low margin again and cutting cost I just wanted to get those out and yeah the one thing on kind of the low margin this is a corollary to to that um or ancillary ancillary to that adjacent to sitting next to related to that is some of you might need to hire an assistant some of you have low margin work that you're doing in your business that needs to be done but your time could be better used providing the services getting sales marketing whatever those things may be and so hiring the people in your business to take things off of your plate that gives you more earning power to provide the services that have a higher return on your time wow wow low margin activity low margin activity I like that I'm got to write that down that's like that's a when you come into work tomorrow I'll be like I ain't doing any low margin activity today yeah I'm worth more than that yeah yeah oh my gosh that is so good low more gen activity I just want to say we don't want to let the pendulum swing too far either sometimes people just go a little too far they start cutting costs that are actually watering down the soup um Steven cvy in his first book um seven habits was told a number of stories were really exemplary of small business and an example was a restaurant that wanted to increase margins they were in a tight situation they had a door line out the door every day and the owner said well I need to increase profit so I'm going to water down the soup a little bit and for a month or two profit soared cost of food uh food cost went down profit went up then the line started to shorten and shorten and pretty soon the business was gone because he had watered down the soup and so we you have whatever you're doing in cutting costs it's it's about reallocating as well and looking at am I pricing diversification product development and not sacrificing your core value yeah I love it that's a great example let's end with soup okay I love soup all right I am hungry all right well thanks everybody for being here hopefully this helps 10 tips to survive this economic climate and an election year and I think the first main theme of this was have a plan get ready no knee-jerk reactions you know let's see it coming yeah I love the planning part have a plan I like writing down the plan by the way sticking to the plan checking on the plan updating the plan Mark and I both carry our own strategic plans for our businesses and individually like mine's in my bag that goes with me when I travel or whatever it's one of my favorite things to do is check in an inventory I'm on a plane or I got a moment to look in on things on how things are going make a plan be intentional about what's happening in your life and I think getting a plan on this can give you peace of mind so whatever chaos is going on outside of you in the world you at least have a plan for what you're doing perfect well thanks everybody for sharing your time with us very valuable time we hope this is part of your number eight on your list and that's staying educated and getting better and better at what you're trying to do the American dream is alive and real and I'm just going to say this this isn't the first time we've had these challenges do we need to go back to 2008 the tech crisis around 2000 the we go back I mean just there mortgage how many recessions have there been life goes on you know how many world wars how many you know you just go back hundred years go go interview your grandma go interview your dad and say how you know how bad you don't have it man I'll tell you how bad is that'll make you feel good yeah that'll make you're like oh okay you know and uh so um I think looking at the the history will also tell you that you know the sky is not falling it's not great but um we can learn from the past as well yeah all right see you next time guys [Music] thanks

Channel: Mark J Kohler

Views: 14,845

Keywords: tax, legal, entrepreneur, asset protection, wealth building, cpa, attorney, lawfirm, Mark J Kohler, Mark Kohler

Id: XOwT8310DQQ

Length: 29min 44sec (1784 seconds)

Published: Tue Feb 27 2024