Speaker 1: Term sheets the Afro Tech Mini Cities available on YouTube.
Speaker 1: About venture capital in New York City, February. Richard Kirby
Speaker 1: is general partner at Equal Ventures, a VC firm based
Speaker 1: in New York City, and we're sitting on set discussing
Speaker 1: what it takes to not only be a VC, but
Speaker 1: what are the characteristics of a good VC. What is
Speaker 1: the makeup of a successful VC? And how do I
Speaker 1: know if the gig is a fit for my personality
Speaker 1: and profile? Yeah, I think the traits for an individual
Speaker 1: are just inherent in somebody else. It's not really about
Speaker 1: like what you studied in school. It's much more about
Speaker 1: like who you are as an individual. Are you intellectually curious?
Speaker 1: Are you um? Do you enjoy learning? It's about different things?
Speaker 1: And I guess lastly, do you enjoy helping others? Those
Speaker 1: are really three points that are you know, inherent to
Speaker 1: anybody that can make them inefficient or sorry except ventry
Speaker 1: capitalists because in the day, sourcing is a big piece
Speaker 1: of finding companies and that means do you get excited
Speaker 1: by finding new things? Like? Um, you can see that
Speaker 1: in any industry you can get except by finding the
Speaker 1: rare sneaker that you haven't seen him out yet, or
Speaker 1: that new track on spot By you haven't heard yet
Speaker 1: that excites people, and finding a new company excites venture capitalists.
Speaker 1: Um doing diligence, So, you know, diving deep forgot you know,
Speaker 1: what does company do? What space they in? How can
Speaker 1: this company get very, very large? That's just learning. If
Speaker 1: you enjoy learning, you'll enjoy diving deep on a company,
Speaker 1: understand how it works or the industry that operates in.
Speaker 1: And lastly, you know, when you're on a board of
Speaker 1: company or an investor, you're trying to do everything possible
Speaker 1: to help that company. You know, try to get me
Speaker 1: as many unfair banages as possible that the founder has
Speaker 1: less on their play, and they too in their play.
Speaker 1: That's all that is really is helping you. So if
Speaker 1: you enjoy helping you, well, that's a great way to
Speaker 1: kind of manifest that inherent trade yours to, you know,
Speaker 1: do good for a company. I'm Will Lucas, Mrs Black
Speaker 1: Tech your Money. I want to introduce you to some
Speaker 1: of the biggest names, some of the brightest minds and
Speaker 1: brilliant ideas. I feel black and building or simply using
Speaker 1: tech to secure your back. This podcast is for you, Hey,
Speaker 1: dommin You bankers co founder and CEO of money Avenue,
Speaker 1: which provides funding across a variety of products like residential
Speaker 1: home loans, investment property loans, business loans and lines of credit,
Speaker 1: and personal finance solutions. An emerging fintech company, they were
Speaker 1: ranked as one of the fastest growing companies in America
Speaker 1: by INC Magazine. We talk a lot about generational wealth
Speaker 1: in our community, but do all the people who talk
Speaker 1: about it really know what it is? Is it a
Speaker 1: dollar amount? How do I know if I've hit it?
Speaker 1: Or is it a system? So one of the things
Speaker 1: that that's that's a great question, But one of the
Speaker 1: misconceptions is generational wealth is just simply making sacrifices in
Speaker 1: your own personal life that will benefit the next generation. Right, Um,
Speaker 1: I'll tell you exactly what I did in my family.
Speaker 1: So I have a three year old son. His name
Speaker 1: is Legacy. But when he was two years old, I
Speaker 1: basically threw a trust was able to purchase six unior
Speaker 1: department building in North New Jersey. That apartment building is
Speaker 1: fully paid for and it's gonna do two big things
Speaker 1: for him. Number one, it's gonna pay for its college
Speaker 1: education completely at the time when he's ready to go
Speaker 1: to college. But number two, let's say he doesn't want
Speaker 1: to go to college or chooses not to go to college,
Speaker 1: he's gonna have a monthly income that he can use
Speaker 1: to subsidize his living expenses or pursue whatever endeavors, whatever
Speaker 1: has God given talents applied for it. So that's a
Speaker 1: sacrifice that I made that I can pass on to
Speaker 1: the next generation and hopefully he does the same. And
Speaker 1: that's generational wealth. And it doesn't take a whole bunch
Speaker 1: of money to do it. It really just takes a plan.
Speaker 1: So if I say I've built generational wealth, like at
Speaker 1: what number have I built generational wealth? Or is it
Speaker 1: an an actual number depending on my circumstances or is
Speaker 1: it a system. It's a system. It's really a system.
Speaker 1: So you know, taking taking my son, right it so, uh,
Speaker 1: he's six unit apartment building in North New Jersey. Each
Speaker 1: unit gets about fifteen hundred dollars per month, right and
Speaker 1: inflation and that's rents that haven't been raised through COVID.
Speaker 1: Rents are going up. But by the time he's eighteen
Speaker 1: years old, rents are gonna be even you know, higher
Speaker 1: than what they are now for sure, right not to
Speaker 1: mention the inflationary effects that's gonna take place. So it's
Speaker 1: a system that can be passed on. And that system
Speaker 1: really is done really only through two ways. Right. The
Speaker 1: first way that we just spoke about is real estate.
Speaker 1: That's one way. But also, uh, being an entrepreneur setting
Speaker 1: up a business doing something like that's that's a that's
Speaker 1: another system that we need more of. We need more creators,
Speaker 1: we need more entrepreneurs, and that's what we try to
Speaker 1: do it money. Yeah, focus on those two paths, the
Speaker 1: real estate path and the entrepreneurship path. So when I
Speaker 1: first started getting like super serious about my financials some
Speaker 1: years ago, you know, and especially like being a husband
Speaker 1: and being a father, you know, I started you know,
Speaker 1: asking people who do this, you know, how about how
Speaker 1: they do. And often you hear wealthy people talk about
Speaker 1: things like insurance and life insurance specifically, and you know,
Speaker 1: how most of us get introduced to insurance is like
Speaker 1: car insurance, and but there's you know, life insurance has
Speaker 1: like funding mechanisms to where you can actually use that
Speaker 1: money to do things. And I'm interested in your take
Speaker 1: on you know, so often we have these conversations about
Speaker 1: how to fund our business ideas and and get companies
Speaker 1: going in our community, and you know another communities they
Speaker 1: can talk about. You know, where you can go raise
Speaker 1: forty five now is from you know, friends and family
Speaker 1: and and I don't know where you come from, but
Speaker 1: I don't know a lot of people with families that
Speaker 1: can write, you know, those thousands and thousands of dollar checks.
Speaker 1: And so I wonder what your thoughts are on what
Speaker 1: are some less thought about sources of funding to start
Speaker 1: businesses that we may not consider often. Well. One of
Speaker 1: the ways that we really like to show creators how
Speaker 1: to fully become entrepreneurs and establishing businesses is leveraging their
Speaker 1: business credit. That's one of the ways that really underutilized. Right.
Speaker 1: So the example that I give is taking our our
Speaker 1: as president Donald Trump. So Donald Trump has over five
Speaker 1: hundred LLC's. One of the things that people do not
Speaker 1: realize is that in Donald Trump filed for bankruptcy. Uh
Speaker 1: he actually filed for banksy twice that we know of,
Speaker 1: the ninety two and ninety one. The same week that
Speaker 1: he did both bankruptcy filings, he established four new LLCs
Speaker 1: and leverage the business credit of those LLCs the same
Speaker 1: week heep filed from bankruptcy. Right. So the point that
Speaker 1: I'm trying to make with that is that a lot
Speaker 1: of people don't really understand the power of the LLC.
Speaker 1: And when you understand the power of the LLC, that
Speaker 1: as a separate legal entity, you're able to leverage the
Speaker 1: business credit of that LLC. So what we do is
Speaker 1: we help people to set up LLCs and do just
Speaker 1: that leverage their business credit. So for every LLC that
Speaker 1: you have, we basically help you get at least five
Speaker 1: thousand dollars of business credit that is not attached to
Speaker 1: your personal credit profile. Because most entrepreneurs the first thing
Speaker 1: they do is they leverage their personal credit. And we
Speaker 1: know that nine of businesses fail and that leads you
Speaker 1: in a worst state than before. So going back to
Speaker 1: the analogy, we just follow the same thing, the same
Speaker 1: path that Donald Trump has done. You know, we can
Speaker 1: also emulate a lot of those business practices, and I
Speaker 1: think that's gonna encourage more creators to really walk to
Speaker 1: entrepreneurship path, to take more risk start businesses, at least
Speaker 1: use the fifty dollars to prove the concept of the business. Right,
Speaker 1: that's really the key. Yeah, it's so interesting you say
Speaker 1: that because you know, for whatever you think about like
Speaker 1: Donald Trump and how he was as president, like he
Speaker 1: used the system that the United States has to his advantage.
Speaker 1: You know, whether that be you know, you think you're
Speaker 1: talking about companies like Amazon and Apple and others who
Speaker 1: you hear these stories about how they pay little to
Speaker 1: know taxes and you know, whatever Donald Trump did and
Speaker 1: whatever he paid or didn't pay in taxes and then
Speaker 1: using the advantages of ll c s or whatever. Um,
Speaker 1: you know, he used the system that we have in
Speaker 1: the United States to his benefit. And you know, our
Speaker 1: thing is like we wanted to make sure that people
Speaker 1: are knowledgeable to use the system to to their benefit
Speaker 1: because our country is set up for business. And so
Speaker 1: what do you say to that? You know, when you're
Speaker 1: when you're trying to get people to reframe in their mind, um,
Speaker 1: what they think about income and taxes and investments. No, absolutely, um.
Speaker 1: And one of the things almost with c p A,
Speaker 1: but one of the things that I've tried to build
Speaker 1: into our system is how do we really put ourselves
Speaker 1: to follow the best possible tax strategy? So, um, if
Speaker 1: you're not if you're not either a landowner which is
Speaker 1: richest real estate, or an entrepreneur. The system is not
Speaker 1: set up for you, right. The system is really set
Speaker 1: up to benefit those that own business owners. So you
Speaker 1: think about small business and big business. Amazon can make
Speaker 1: a billion dollars and pay note net taxes. Right. It's
Speaker 1: because the system, the i r S, the i r
Speaker 1: S code gives tremendous benefits for entrepreneurs and creators. Right.
Speaker 1: And also people that own real estate, they're the ones
Speaker 1: that really are can structure their path so that they
Speaker 1: have the minimal tax hit as possible. Right. So I'm
Speaker 1: in real estate myself. I'm a real estate developer. I
Speaker 1: own over five hundred units. I've reached a position that's
Speaker 1: called well, it's a classification, it's called real estate professional.
Speaker 1: Once you get to that level, a hundred percent of
Speaker 1: your expenses can be written off. Right. And and most people,
Speaker 1: to me, that's the nirvana of of tax strategy, because
Speaker 1: whatever I do, it's you know what, my whole lifestyle
Speaker 1: is structured around tax seables and whatever whatever expenses I
Speaker 1: get this offset against earned income, the rental income that
Speaker 1: comes in through my units. As a landlord. You know,
Speaker 1: I don't necessarily get taxed the same way that someone
Speaker 1: with W two income is taxed. So yeah, we gotta
Speaker 1: go in here because when I learned that employees pay
Speaker 1: taxes first and business owners pay taxes on what's left over, Like,
Speaker 1: the whole game changed for me because you know, like, yes,
Speaker 1: it's when you're an employee and you work for somebody
Speaker 1: and you get that check on Friday. Yes, it's a
Speaker 1: great day on Friday. But the government Uncle Sam already
Speaker 1: then took his out. You know, when I get paid
Speaker 1: or when you get paid a Donnie Hugh like you
Speaker 1: get you get the whole check, and then you gotta
Speaker 1: figure out, Okay, what am I gonna spend this on
Speaker 1: so that at the end of it I get the
Speaker 1: full benefit of it and I don't. Then I'm gonna
Speaker 1: pay Uncle Sam on whatever have left over after I've
Speaker 1: squeezed out as much as I legally care. Well, you
Speaker 1: you hit the nail right on that head with everything
Speaker 1: you just said, So I know, I know for uh,
Speaker 1: for example, you know you and one of the things
Speaker 1: that we do it in money apps give people the paradigm, right,
Speaker 1: but you you hit the nail on the head. So
Speaker 1: let me address for those individuals that are listening out there,
Speaker 1: how to really structure your business so that you have
Speaker 1: the minimum tax the minimum tax hit right. So number one,
Speaker 1: you need a bank account. Whenever you get a check.
Speaker 1: You should have a business whatever, whatever line of work
Speaker 1: that your in, start up nonstartup, technology, non technology, you
Speaker 1: should have a business account. Right now, money app we
Speaker 1: have free business accounts you can set up it. Really
Speaker 1: we're trying to disrupt the typical banks. You can set
Speaker 1: up a business banking account, but your check should come
Speaker 1: into that account, right, and then from that account you
Speaker 1: should have separately a personal bank account. So you have
Speaker 1: a business account, pay yourself first, personal put that from
Speaker 1: the business. The check comes into the business account. Then
Speaker 1: you pay the personal account. But also you should have
Speaker 1: a business tax account, right. You also should have a
Speaker 1: business operating account. It's important to separate these funnels of
Speaker 1: cash flow number one, so you can make it easier
Speaker 1: for your tax professional to do your taxes at the
Speaker 1: end of the year. But also this is the savings. Right.
Speaker 1: So let's say you get a check for ten thousand
Speaker 1: dollars goes into your business account. Normally putt of that,
Speaker 1: so three thousand goes into your tax account. Let's say
Speaker 1: you want you want to pay yourself, um, you know,
Speaker 1: ten fient whatever you need to live on. Two thousand
Speaker 1: goes into the personal account me personally, every LLC that
Speaker 1: I have. I also have an operating account, right, so
Speaker 1: I can track my my income, my my who am
Speaker 1: I paying? So I'm paying my bills on top my
Speaker 1: operating accounts account that I use day to day, and
Speaker 1: I can follow that leedsure and I can see, well this,
Speaker 1: you know, this is a vendor here. I don't know.
Speaker 1: I didn't pay that vendor. I can track fraud things
Speaker 1: like that, you know. So that's the structure, right. So basically,
Speaker 1: just in any any basic business, that's four accounts that
Speaker 1: I just mentioned, you should have the business account, which
Speaker 1: really shouldn't be forward facing. It should be a business
Speaker 1: that no one can sue. It could be a holding company,
Speaker 1: something that only you would know, and then pass when
Speaker 1: that when that check comes into that, we pass it
Speaker 1: to the personal account. We pay ourselves, right, then we
Speaker 1: pass it to a tax accounts when never and a
Speaker 1: lot of businesses pay on a quarterly basis, but we
Speaker 1: want to make sure that we fund that tax account
Speaker 1: so that we're not scrambling at the end of the
Speaker 1: year to pay a big tax bill. But if you
Speaker 1: do it right, it the way I said it, you're
Speaker 1: operating account. Hand that operating account over to your c
Speaker 1: p A or your tax professional, and they're gonna have
Speaker 1: an itemized list what you spend on and what can
Speaker 1: be deducted from the tax liability that you created each quarter.
Speaker 1: So if I didn't get to a depth, but that's
Speaker 1: that's the that's the that's the formula, you know. So
Speaker 1: there's so much here, so many different lanes we can
Speaker 1: go in. And I understand this is a podcast and
Speaker 1: not everything. We won't be able to go like super
Speaker 1: duper deep on every topic. So's it's so important that
Speaker 1: you know our audience UM is number one subscribe to
Speaker 1: the podcast, but number one following you so that they
Speaker 1: can go deeper on the topics that you're talking about.
Speaker 1: And so I will switch scares it a little bit
Speaker 1: because I'm interested in your conversation on you know, when
Speaker 1: I learned this principle, UM, it was later than I
Speaker 1: wish I would have learned it, but I did learn it,
Speaker 1: and some people still haven't learned it. So you're gonna
Speaker 1: learn it. Today, um this concept about reinvesting the profits,
Speaker 1: because you know what happens too often in our businesses
Speaker 1: is we will start a business. We will start a
Speaker 1: company and start you know, making some money, make some check,
Speaker 1: whether we're working a day job. And then when now
Speaker 1: we got this side hustle, we make money on that
Speaker 1: side household, make money on at you know, ten PM
Speaker 1: two a m business. And then we get that check
Speaker 1: and now we go spend it because we got money
Speaker 1: that we didn't have before. So now all of a
Speaker 1: sudden were buying advertisers. We didn't use to buy appetizers.
Speaker 1: You know, we went out to eat. All of a
Speaker 1: sudden you put in cheese on it. And so I
Speaker 1: wonder what is your take on this? This way of thinking,
Speaker 1: like every dollar you can afford to put back in
Speaker 1: the business helps you to grow the business and instead
Speaker 1: make sure that you are not um taking the money
Speaker 1: out when you should be. If you if you bought
Speaker 1: it for five dollars and you sold it for ten,
Speaker 1: put the five that you originally put in, put it
Speaker 1: back in, and then put the extra five that you earned,
Speaker 1: and now you've got ten dollars invested instead of five
Speaker 1: dollars invested and you can continue to grow and scale
Speaker 1: your business that way. That's super important really, and just
Speaker 1: as founders or entrepreneurs, we have to take the position
Speaker 1: that you know, every dollar that you pull out of
Speaker 1: your business, you're actually hurting your business. So you want
Speaker 1: more and more dollars to be in your business so
Speaker 1: that you could multiply them as fast as possible. Right,
Speaker 1: you want to get the maximum amount of r o
Speaker 1: Y business or entrepreneurship. It's better than and wealthy know this.
Speaker 1: They would rather not have money just sitting in the
Speaker 1: bank account. You want that money to be working for
Speaker 1: you and when you pull it out, like if you
Speaker 1: have a business describing that means you're probably getting a
Speaker 1: great r o Y on your money, better than you
Speaker 1: can get in the stock market, better than you can
Speaker 1: get by by investing in even you know, uh, aftermarket stocks.
Speaker 1: It's just a tremendous Entrepreneurship is the number one return,
Speaker 1: the number one r o Y that you're gonna get
Speaker 1: on your investment. You do not want to put pull
Speaker 1: money out of that. So that's what I tell my clients,
Speaker 1: and and and really at money you have, we want
Speaker 1: to help more creators understand that metric. That's one of
Speaker 1: the key metrics that are out there. So what we
Speaker 1: do is, let's say, after you've proven the concept of
Speaker 1: your business, one of the key things that you have
Speaker 1: to do is scale and you need capital to scale.
Speaker 1: But the best thing to do is have capital that
Speaker 1: is generated from your business. But most businesses that are
Speaker 1: that have the ability to have high growth, they need
Speaker 1: external investment. They need people from the outside to invest
Speaker 1: in them. That's that's one thing that we do that
Speaker 1: other financial institutions don't do. Businesses that are high growth,
Speaker 1: we get funding for you in terms of VC funding
Speaker 1: where we have the Angel Syndicate in which we will
Speaker 1: invest below two hundred and fifty thousand and businesses that
Speaker 1: can scale, But it's the same process. You would much
Speaker 1: rather um get the money that you need to scale
Speaker 1: and grow from the business itself. But most businesses, definitely
Speaker 1: the scale on a large level, need that external investment
Speaker 1: and we want to show people how to how to
Speaker 1: do it the best way possible. So what you just
Speaker 1: said was so important, And and here's what I hear.
Speaker 1: And when you when you talk about you know, having
Speaker 1: money sitting what I hear is what I hear is
Speaker 1: there is a such thing as having too much cash
Speaker 1: in the pain. There's the such thing as being too liquid.
Speaker 1: And when you think about um, because I mean all
Speaker 1: of us, you know, any of us would love to
Speaker 1: you know, see that statement. A lot of zeros, a
Speaker 1: lot of money sitting over there. And but that money
Speaker 1: is slowly dying number one. But it's stagnant at best.
Speaker 1: But it's slowly dying because of inflation and things like that.
Speaker 1: UM in in the reality of things, and so there
Speaker 1: is a such thing with as much as you love
Speaker 1: to see a lot of money sitting in your bank account,
Speaker 1: there is a such thing as having too much cash
Speaker 1: in the bank. So what do we do when we
Speaker 1: have um? Well, actually, at what point should we think, Hey,
Speaker 1: I got too much on you over here, I need
Speaker 1: to do something with it. And then what should I
Speaker 1: do with it to make sure it's working for me? Really,
Speaker 1: when you have cash sitting in an account that you
Speaker 1: can find a better use for it, that is safe. Right,
Speaker 1: So in my particular business, that operating account on a
Speaker 1: monthly basis, UM, and one of my projects, I may
Speaker 1: have a need for dollars. If let's say I'm I'm
Speaker 1: something great, I sold the asset. I have a big
Speaker 1: check coming in. I don't need a hundred two hundred
Speaker 1: three hundred thousand sitting in an account, right, That's just
Speaker 1: too much. That's that's being too liquid, right, unless I'm
Speaker 1: saving up for another move or another acquisition. But you
Speaker 1: want to you want to have enough cash that you
Speaker 1: can at least be operational for two to three months
Speaker 1: and then beyond all that. I think that you're at
Speaker 1: this threshold where you're not optimizing your cash value. So
Speaker 1: what I tell people to do, Number one is um
Speaker 1: once you understand the highest and best use of your
Speaker 1: r o Y, right, whether it's in your business or
Speaker 1: whether it's investing in other businesses. We have. We have
Speaker 1: r o Y and our business, but one of the
Speaker 1: great things that we like to do is invest in
Speaker 1: other business EXX capitals. We like to see those the
Speaker 1: new up and coming businesses that are on the horizon.
Speaker 1: How can we put a hundred thousand uh in in
Speaker 1: in their system to give them a greater r r
Speaker 1: o I which is gonna allow us to grow even more. Right,
Speaker 1: So it's really looking for those opportunities where you can
Speaker 1: get excess cash and put that cash to work. The
Speaker 1: wealthy do not have a whole bunch of cash sitting
Speaker 1: in a bank account, So we definitely don't want to
Speaker 1: do that. The reason why is very simple. When you
Speaker 1: have money sitting in a bank account, especially now that
Speaker 1: we just had a two trillion dollar stimulus that the
Speaker 1: stimmies that went out. Everyone's talking about the stimmies, but
Speaker 1: you know, the deflation, every effect of that is significant.
Speaker 1: So just having money sitting in an account, you're gonna
Speaker 1: be able to buy less and less for your dollar.
Speaker 1: And this is what's gonna happen going into the future. Um,
Speaker 1: we know that taxes are going to go up, the
Speaker 1: cost of living is going up in most cities in
Speaker 1: the US. So it's just something to be super cognizant of,
Speaker 1: if you know, if you if you're financially literate. So
Speaker 1: I want to translate what I hear you say, and
Speaker 1: you can correct me if I've gotten any of this wrong.
Speaker 1: But I want to be sure that we understand what
Speaker 1: you're advising here. So you're saying, you know, if I
Speaker 1: have you know, two to three months UM worth of
Speaker 1: runway sitting in the bank account, that way I can
Speaker 1: cover any you know, household operational expenses or business expenses
Speaker 1: to just make sure my life is good, you know,
Speaker 1: two to three months out at all times. UM, then
Speaker 1: that's enough money, you know, in the general sense to
Speaker 1: UM just have sitting in the bank account. But far
Speaker 1: above that, I should probably be thinking about safe ways
Speaker 1: to put that money to work so that UM is
Speaker 1: not again, you know, slowly dying in a bank account,
Speaker 1: or you know, at best just being stagnant and not
Speaker 1: you know, generating any real returns. Absolutely well, you hit
Speaker 1: the nail on the head one of the things. And
Speaker 1: I'll tell you what we're really big into right now
Speaker 1: is the defile space that we're working on a number
Speaker 1: of different protocols that's going to allow people to get
Speaker 1: an incredible return compared to the bank. Right we know
Speaker 1: that the bank doesn't pay a great amount of interests UM.
Speaker 1: If you get one percent, you're super lucky. But we're
Speaker 1: looking through defile. We're UM and developing smart chaing UM,
Speaker 1: developing smart contracts on the blockchain. We're gonna be able
Speaker 1: to get people a higher rate of return for their interests.
Speaker 1: For those people that are closer to retirement that don't
Speaker 1: want to take as much risk, we have a low
Speaker 1: risk uh vehicle that's coming up and you know, we'll
Speaker 1: stay tuned for that too. But I'm excited about it.
Speaker 1: But that's exactly when you have excess cash you can do.
Speaker 1: You need to think of things like that and and
Speaker 1: that's being an innovator. That's what we're looking to do,
Speaker 1: is is innovator. So this is a live conversation. We're
Speaker 1: having a lunch table shout to everybody watching on lunch
Speaker 1: table in or Facebook Live. And we do have a conversation.
Speaker 1: A question I'm sorry that came in on Facebook and
Speaker 1: it asks what industries are most primed to take advantage
Speaker 1: of for new enterprise. If I wanted to start a
Speaker 1: business and I don't know where I should be looking
Speaker 1: for a lot of fresh opportunity, where should I be
Speaker 1: looking any business? First of all, if you have a
Speaker 1: business and you do not have the technology business. One
Speaker 1: of the things about Afro Texts is that you know,
Speaker 1: our community, we're so creative, right. So one of the
Speaker 1: things that I love doing is talking to entrepreneurs and
Speaker 1: and just telling them, you know, they're getting them to
Speaker 1: think global instead of thinking locally. Like you may have
Speaker 1: a regional business, but in this day and age. If
Speaker 1: you do not have a technology business, a busines is
Speaker 1: that scalable a business that you can create a business
Speaker 1: model in one city, let's say New York, and scale
Speaker 1: that out to the rest of the country or possibly
Speaker 1: the globe. You're in a business that's gonna lose eventually
Speaker 1: because um, the way that we're positioning. If you if
Speaker 1: you don't have that component, you don't have that technology component,
Speaker 1: you're gonna it's gonna be big fish eat little fish.
Speaker 1: And what's going on right now in this country is
Speaker 1: there we're experiencing one of the greatest procedures or processes
Speaker 1: of wealth creation. What's happening in Silicon Valley is you know,
Speaker 1: do you have people that are coming from the ideation
Speaker 1: stage just that just having an idea and in three,
Speaker 1: four or five years they're becoming billionaires, right And it's
Speaker 1: just that many of them have executable ideas. For many
Speaker 1: of them, depending on the circles, just ideas are getting
Speaker 1: funded and that's creating these huge valuations. And we need
Speaker 1: to the Afro Tech Fair and everyone else and our
Speaker 1: two community, they need to tap into that. And that's
Speaker 1: what we want to do. Provide access to capital, helping
Speaker 1: them get there, bringing them through the different stages. UM.
Speaker 1: You know that that's that's key, that's part of our
Speaker 1: mission and our core values. We got another one in
Speaker 1: from Facebook and it says, what about retirement accounts for
Speaker 1: entrepreneurs or employees with no four oh one K? It
Speaker 1: seems as if you're without a four oh one K,
Speaker 1: you're screwed in terms of the limited amount you can
Speaker 1: fund an i ra A. That is true. So you know,
Speaker 1: many people that are a lot more mature, older sixty
Speaker 1: years old, you know, looking at retirement right now, are
Speaker 1: looking for these vehicles that they can get in and
Speaker 1: get a less risk averse return right something that basically
Speaker 1: allows them to just get income to live off of.
Speaker 1: I love the defied space, and that's what we're gonna
Speaker 1: go in through you. I know you wanted to talk
Speaker 1: about crypto. I just think that the space is changing
Speaker 1: so many different It's going so fast that from the
Speaker 1: first introduction of bitcoin in in two thousand and nine
Speaker 1: to where we are now, we're at a point in
Speaker 1: time where it's mature enough where I think that those
Speaker 1: going into retirement that that can um maybe have a
Speaker 1: small full one K, can sit back and possibly get
Speaker 1: somewhere between ten percent of low risk return, and a
Speaker 1: lot of people can live off that. You know, you
Speaker 1: take your I RA, or you take the house, or
Speaker 1: you take a second home that you probably can't rent
Speaker 1: and get a decent I R O ion and convert
Speaker 1: that into these low risk, high yield investments and you
Speaker 1: can you can walk right into retirement comfortably. So I'm
Speaker 1: excited about that space. It's still early, there's more developments
Speaker 1: coming on, but I guarantee you in the next year
Speaker 1: we're gonna see some incredible products on the marketplace. So
Speaker 1: you mentioned something earlier I wanted to make sure I
Speaker 1: came back to, and that is about crypto, and I
Speaker 1: wanted to make sure we got into this, particularly because
Speaker 1: you're a c p A and you're deep into educating
Speaker 1: our community on you know, opportunities for for wealth generation,
Speaker 1: and so I want to talk about you know, so
Speaker 1: for folks who are listening to this and they are
Speaker 1: new to the conversation of crypto, they may have heard
Speaker 1: about it here a lot about it probably but still
Speaker 1: don't really understand, um what it is, how to get
Speaker 1: involved safely, and um perhaps still have a lot of
Speaker 1: skepticism about crypto, Um, if you could as best you
Speaker 1: can give kind of like a you know, a mini
Speaker 1: one oh one for folks who are layman and they're
Speaker 1: not super sophisticated with regards to cryptocurrency, not just Bitcoin,
Speaker 1: but also like lightcoin, foul coin, um, you know, ethereum,
Speaker 1: things like that. How what should we understand before we
Speaker 1: get in, you know, too deep? What should we understand
Speaker 1: about what cryptocurrency is and what should we just in general,
Speaker 1: whether or not we're going to invest, How should we
Speaker 1: understand what cryptocurrency means to the future of wealth creation
Speaker 1: and transactions? Period? Absolutely so, Um, crypto is just another
Speaker 1: asset class, right, So a lot of people, a lot
Speaker 1: of people hit me, be like, I don't like bitcoin
Speaker 1: the or theorem or you know these other coins because
Speaker 1: I can't spend it. I can't go into a store
Speaker 1: and spending. That's the total wrong way to look at it. Um.
Speaker 1: You need to look at it the same way you
Speaker 1: would look at any other stock. It's just the asset
Speaker 1: class or golds. Um, it's really a hedge against inflation,
Speaker 1: right and uh, it's a it's an asset class that
Speaker 1: is potentially on the precipice of disrupting all all economies
Speaker 1: as we know it, right, So we don't. It's it's
Speaker 1: you know, you can take bitcoin, which is you know,
Speaker 1: I'm not a huge investor in bitcoin. I like uh
Speaker 1: theoryum mainly because there's application to it, right there's it's
Speaker 1: linked to a blockchain that has open source coding and
Speaker 1: allows for a number of derivative products that going into
Speaker 1: this next year, you're gonna see everything about to be tokenized.
Speaker 1: So for the lay person, I think that it's important
Speaker 1: to day if you're not into bitcoin, please don't be
Speaker 1: disillusion and stop there. Dive a little deeper and look
Speaker 1: at some of these other currencies that are out there.
Speaker 1: And I don't know why we call them currencies, they're
Speaker 1: just different asset classes that if you find something that's
Speaker 1: interesting to you, dig a little deeper. There's lots of
Speaker 1: scams out there too, and people create these coins and
Speaker 1: then over and you know, overnight, something that happens um
Speaker 1: and and and you know, we've seen that, so we
Speaker 1: wanna we want to avoid that. But I want people
Speaker 1: to realize that is an other source of wealth creation.
Speaker 1: So do some do some research into it? All right,
Speaker 1: So somebody in the chat I wants you to define
Speaker 1: because you said this word a few times, defy if
Speaker 1: you can define defy for our listening audience. But I'm
Speaker 1: also gonna add some things to that UM, because I
Speaker 1: want to understand and I want to make sure our
Speaker 1: audience understands, like the potential tax implications of UM realizing
Speaker 1: and upside with regards to crypto So if I put in,
Speaker 1: you know, a thousand dollars in bitcoin last year and
Speaker 1: I don't know what is whatever is up to now,
Speaker 1: let's say let's say forty dollars and UM, so I've
Speaker 1: had some gains perhaps, UM, what are the tax and
Speaker 1: what are the tax implications of when I go to
Speaker 1: withdraw that money? What does it mean? Like? How how
Speaker 1: do I know what I'm supposed to pay in taxes?
Speaker 1: Do I have to pay taxes at all? Is this
Speaker 1: something I can just you know, keep it moving, know
Speaker 1: it explain to us the tax implications of realizing and
Speaker 1: upside with regards to cryptocurrency investments. Yep, I do it
Speaker 1: real quick. First of all, we'll start with defied. DeFi
Speaker 1: is just short for decentralized finance. Basically, it's it's a
Speaker 1: system that is gonna revolutionize finance as we know it.
Speaker 1: How you borrow, how you lend um, how you get
Speaker 1: derivative products. All of that is in the ecosystem of defies.
Speaker 1: Basically a way in which you can get a contract
Speaker 1: we call smart contracts with someone that's on the blockchain,
Speaker 1: so that allows you to to The blockchain is just
Speaker 1: a ledger of transaction that's on a bunch of it.
Speaker 1: It's it's decentralized, so it's on a bunch of computers,
Speaker 1: meaning that whatever should something happen to one computer, you're
Speaker 1: able to see this record and everyone is able to
Speaker 1: verify it. So that's that's it in a nutshell. Now,
Speaker 1: as far as the tax implications of investing in cryptocurrencies,
Speaker 1: my strategy is if you have UH, if you hold,
Speaker 1: if you have a holding for greater than one year,
Speaker 1: you get taxed less. You get taxed at a lower
Speaker 1: rate than if you have a lot of people are
Speaker 1: in and out of cryptos right, so if you're in
Speaker 1: for less than a year, you get taxed at your
Speaker 1: normal tax rate, which tends to be a lot higher.
Speaker 1: But if you hold it for greater than a year,
Speaker 1: you're taxed at the capital gains tax rate. Which is
Speaker 1: a lot lower right, and then the new Biden administration,
Speaker 1: he's trying to rage it a little bit. I'm not
Speaker 1: a fan of it. I don't think it's gonna pass
Speaker 1: um Congress. But ultimately I think that um, that's the
Speaker 1: way you want to think about crypto. You want to
Speaker 1: think about it as a long term gain. And then
Speaker 1: going back to what we said before, how you structure
Speaker 1: your accounts. If you purchase crypto under a business and
Speaker 1: you know it's set up the right way, you can
Speaker 1: also the gains can be offset by a lot of
Speaker 1: other things that you're doing right, a lot of operational
Speaker 1: expenses or other losses, because if you're investment, just like
Speaker 1: you're in the stock market, some years you may take
Speaker 1: a loss and you can write that off if if
Speaker 1: you know, if you have that long term perspective. Black
Speaker 1: Tech Green Money is a production to Black of the
Speaker 1: Afro Tech on the Black Effect podcast Network and Ihearted Media.
Speaker 1: Is produced by Morgan Dubon and me Well Lucas, with
Speaker 1: additional production supported by Love Beach and Marissa Lewis. Special
Speaker 1: thank you to Michael Davis since the cars of on
Speaker 1: Yon you know, like the wine. Yes, that's his real name.
Speaker 1: Learn more about my guess and other tech that drop
Speaker 1: is the innovators at afro tech dot com and the
Speaker 1: video version of this episode would drop the Black Tech
Speaker 1: Green Money on YouTube next week, so tap in. Enjoying
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Speaker 1: Gonna get your money, Peace and love the