WEBVTT - How to build Generational Wealth w/ A. Donahue Baker 0:00:01.680 --> 0:00:05.480 Term sheets the Afro Tech Mini Cities available on YouTube. 0:00:05.480 --> 0:00:12.320 About venture capital in New York City, February. Richard Kirby 0:00:12.400 --> 0:00:15.520 is general partner at Equal Ventures, a VC firm based 0:00:15.520 --> 0:00:18.040 in New York City, and we're sitting on set discussing 0:00:18.079 --> 0:00:20.400 what it takes to not only be a VC, but 0:00:20.480 --> 0:00:24.239 what are the characteristics of a good VC. What is 0:00:24.280 --> 0:00:26.920 the makeup of a successful VC? And how do I 0:00:27.000 --> 0:00:29.920 know if the gig is a fit for my personality 0:00:29.960 --> 0:00:32.959 and profile? Yeah, I think the traits for an individual 0:00:33.080 --> 0:00:35.520 are just inherent in somebody else. It's not really about 0:00:35.520 --> 0:00:38.000 like what you studied in school. It's much more about 0:00:38.000 --> 0:00:41.360 like who you are as an individual. Are you intellectually curious? 0:00:41.680 --> 0:00:45.680 Are you um? Do you enjoy learning? It's about different things? 0:00:45.760 --> 0:00:49.280 And I guess lastly, do you enjoy helping others? Those 0:00:49.280 --> 0:00:51.440 are really three points that are you know, inherent to 0:00:51.440 --> 0:00:54.360 anybody that can make them inefficient or sorry except ventry 0:00:54.360 --> 0:00:57.160 capitalists because in the day, sourcing is a big piece 0:00:57.160 --> 0:00:59.880 of finding companies and that means do you get excited 0:00:59.880 --> 0:01:02.400 by finding new things? Like? Um, you can see that 0:01:02.400 --> 0:01:04.399 in any industry you can get except by finding the 0:01:04.480 --> 0:01:06.880 rare sneaker that you haven't seen him out yet, or 0:01:07.200 --> 0:01:09.080 that new track on spot By you haven't heard yet 0:01:09.120 --> 0:01:12.840 that excites people, and finding a new company excites venture capitalists. 0:01:13.160 --> 0:01:16.000 Um doing diligence, So, you know, diving deep forgot you know, 0:01:16.360 --> 0:01:18.840 what does company do? What space they in? How can 0:01:18.880 --> 0:01:21.440 this company get very, very large? That's just learning. If 0:01:21.480 --> 0:01:24.279 you enjoy learning, you'll enjoy diving deep on a company, 0:01:24.360 --> 0:01:26.679 understand how it works or the industry that operates in. 0:01:27.120 --> 0:01:29.040 And lastly, you know, when you're on a board of 0:01:29.080 --> 0:01:32.039 company or an investor, you're trying to do everything possible 0:01:32.160 --> 0:01:33.959 to help that company. You know, try to get me 0:01:33.959 --> 0:01:36.360 as many unfair banages as possible that the founder has 0:01:36.440 --> 0:01:38.200 less on their play, and they too in their play. 0:01:38.440 --> 0:01:39.840 That's all that is really is helping you. So if 0:01:39.880 --> 0:01:41.480 you enjoy helping you, well, that's a great way to 0:01:41.520 --> 0:01:44.959 kind of manifest that inherent trade yours to, you know, 0:01:45.000 --> 0:01:50.400 do good for a company. I'm Will Lucas, Mrs Black 0:01:50.400 --> 0:01:53.760 Tech your Money. I want to introduce you to some 0:01:53.800 --> 0:01:55.960 of the biggest names, some of the brightest minds and 0:01:56.080 --> 0:01:59.320 brilliant ideas. I feel black and building or simply using 0:01:59.320 --> 0:02:07.559 tech to secure your back. This podcast is for you, Hey, 0:02:07.640 --> 0:02:10.840 dommin You bankers co founder and CEO of money Avenue, 0:02:10.960 --> 0:02:14.000 which provides funding across a variety of products like residential 0:02:14.040 --> 0:02:17.480 home loans, investment property loans, business loans and lines of credit, 0:02:17.560 --> 0:02:21.600 and personal finance solutions. An emerging fintech company, they were 0:02:21.639 --> 0:02:24.040 ranked as one of the fastest growing companies in America 0:02:24.120 --> 0:02:27.720 by INC Magazine. We talk a lot about generational wealth 0:02:27.720 --> 0:02:30.160 in our community, but do all the people who talk 0:02:30.200 --> 0:02:32.320 about it really know what it is? Is it a 0:02:32.400 --> 0:02:34.880 dollar amount? How do I know if I've hit it? 0:02:35.080 --> 0:02:38.360 Or is it a system? So one of the things 0:02:38.360 --> 0:02:40.320 that that's that's a great question, But one of the 0:02:40.680 --> 0:02:46.080 misconceptions is generational wealth is just simply making sacrifices in 0:02:46.160 --> 0:02:50.400 your own personal life that will benefit the next generation. Right, Um, 0:02:50.480 --> 0:02:52.560 I'll tell you exactly what I did in my family. 0:02:52.680 --> 0:02:54.840 So I have a three year old son. His name 0:02:54.919 --> 0:02:57.600 is Legacy. But when he was two years old, I 0:02:57.720 --> 0:03:01.280 basically threw a trust was able to purchase six unior 0:03:01.360 --> 0:03:05.440 department building in North New Jersey. That apartment building is 0:03:05.480 --> 0:03:08.200 fully paid for and it's gonna do two big things 0:03:08.200 --> 0:03:11.120 for him. Number one, it's gonna pay for its college 0:03:11.200 --> 0:03:14.120 education completely at the time when he's ready to go 0:03:14.200 --> 0:03:16.440 to college. But number two, let's say he doesn't want 0:03:16.440 --> 0:03:18.680 to go to college or chooses not to go to college, 0:03:18.960 --> 0:03:22.600 he's gonna have a monthly income that he can use 0:03:22.680 --> 0:03:27.200 to subsidize his living expenses or pursue whatever endeavors, whatever 0:03:27.320 --> 0:03:30.160 has God given talents applied for it. So that's a 0:03:30.200 --> 0:03:33.600 sacrifice that I made that I can pass on to 0:03:33.760 --> 0:03:36.400 the next generation and hopefully he does the same. And 0:03:36.440 --> 0:03:39.280 that's generational wealth. And it doesn't take a whole bunch 0:03:39.320 --> 0:03:41.600 of money to do it. It really just takes a plan. 0:03:42.760 --> 0:03:46.800 So if I say I've built generational wealth, like at 0:03:46.840 --> 0:03:50.120 what number have I built generational wealth? Or is it 0:03:50.440 --> 0:03:53.320 an an actual number depending on my circumstances or is 0:03:53.320 --> 0:03:57.680 it a system. It's a system. It's really a system. 0:03:57.720 --> 0:04:01.040 So you know, taking taking my son, right it so, uh, 0:04:01.040 --> 0:04:04.480 he's six unit apartment building in North New Jersey. Each 0:04:04.600 --> 0:04:07.360 unit gets about fifteen hundred dollars per month, right and 0:04:07.480 --> 0:04:10.640 inflation and that's rents that haven't been raised through COVID. 0:04:10.920 --> 0:04:13.480 Rents are going up. But by the time he's eighteen 0:04:13.560 --> 0:04:16.640 years old, rents are gonna be even you know, higher 0:04:16.640 --> 0:04:19.240 than what they are now for sure, right not to 0:04:19.320 --> 0:04:22.400 mention the inflationary effects that's gonna take place. So it's 0:04:22.400 --> 0:04:25.600 a system that can be passed on. And that system 0:04:25.800 --> 0:04:29.200 really is done really only through two ways. Right. The 0:04:29.240 --> 0:04:31.440 first way that we just spoke about is real estate. 0:04:31.839 --> 0:04:35.679 That's one way. But also, uh, being an entrepreneur setting 0:04:35.760 --> 0:04:38.360 up a business doing something like that's that's a that's 0:04:38.360 --> 0:04:41.680 another system that we need more of. We need more creators, 0:04:41.680 --> 0:04:43.960 we need more entrepreneurs, and that's what we try to 0:04:44.000 --> 0:04:46.640 do it money. Yeah, focus on those two paths, the 0:04:46.720 --> 0:04:50.760 real estate path and the entrepreneurship path. So when I 0:04:50.839 --> 0:04:53.839 first started getting like super serious about my financials some 0:04:53.960 --> 0:04:56.320 years ago, you know, and especially like being a husband 0:04:56.360 --> 0:04:57.719 and being a father, you know, I started you know, 0:04:57.760 --> 0:05:00.400 asking people who do this, you know, how about how 0:05:00.480 --> 0:05:03.960 they do. And often you hear wealthy people talk about 0:05:04.080 --> 0:05:07.520 things like insurance and life insurance specifically, and you know, 0:05:07.560 --> 0:05:10.400 how most of us get introduced to insurance is like 0:05:10.480 --> 0:05:14.280 car insurance, and but there's you know, life insurance has 0:05:14.320 --> 0:05:16.719 like funding mechanisms to where you can actually use that 0:05:16.800 --> 0:05:20.160 money to do things. And I'm interested in your take 0:05:20.320 --> 0:05:23.320 on you know, so often we have these conversations about 0:05:23.320 --> 0:05:27.640 how to fund our business ideas and and get companies 0:05:27.680 --> 0:05:30.480 going in our community, and you know another communities they 0:05:30.480 --> 0:05:32.120 can talk about. You know, where you can go raise 0:05:33.240 --> 0:05:35.960 forty five now is from you know, friends and family 0:05:36.000 --> 0:05:37.839 and and I don't know where you come from, but 0:05:38.640 --> 0:05:40.279 I don't know a lot of people with families that 0:05:40.320 --> 0:05:43.400 can write, you know, those thousands and thousands of dollar checks. 0:05:43.400 --> 0:05:45.960 And so I wonder what your thoughts are on what 0:05:46.080 --> 0:05:49.320 are some less thought about sources of funding to start 0:05:49.400 --> 0:05:52.880 businesses that we may not consider often. Well. One of 0:05:52.920 --> 0:05:56.440 the ways that we really like to show creators how 0:05:56.480 --> 0:06:00.720 to fully become entrepreneurs and establishing businesses is leveraging their 0:06:00.760 --> 0:06:04.680 business credit. That's one of the ways that really underutilized. Right. 0:06:04.720 --> 0:06:07.520 So the example that I give is taking our our 0:06:07.600 --> 0:06:11.000 as president Donald Trump. So Donald Trump has over five 0:06:11.120 --> 0:06:14.359 hundred LLC's. One of the things that people do not 0:06:14.480 --> 0:06:18.920 realize is that in Donald Trump filed for bankruptcy. Uh 0:06:19.040 --> 0:06:21.080 he actually filed for banksy twice that we know of, 0:06:21.160 --> 0:06:23.719 the ninety two and ninety one. The same week that 0:06:23.800 --> 0:06:28.480 he did both bankruptcy filings, he established four new LLCs 0:06:28.520 --> 0:06:31.880 and leverage the business credit of those LLCs the same 0:06:31.920 --> 0:06:35.440 week heep filed from bankruptcy. Right. So the point that 0:06:35.480 --> 0:06:37.480 I'm trying to make with that is that a lot 0:06:37.520 --> 0:06:40.520 of people don't really understand the power of the LLC. 0:06:40.800 --> 0:06:43.479 And when you understand the power of the LLC, that 0:06:43.680 --> 0:06:46.919 as a separate legal entity, you're able to leverage the 0:06:47.000 --> 0:06:50.359 business credit of that LLC. So what we do is 0:06:50.360 --> 0:06:53.680 we help people to set up LLCs and do just 0:06:53.800 --> 0:06:57.359 that leverage their business credit. So for every LLC that 0:06:57.440 --> 0:06:59.920 you have, we basically help you get at least five 0:07:00.200 --> 0:07:03.520 thousand dollars of business credit that is not attached to 0:07:03.640 --> 0:07:08.440 your personal credit profile. Because most entrepreneurs the first thing 0:07:08.440 --> 0:07:10.760 they do is they leverage their personal credit. And we 0:07:10.840 --> 0:07:14.000 know that nine of businesses fail and that leads you 0:07:14.280 --> 0:07:17.480 in a worst state than before. So going back to 0:07:17.520 --> 0:07:20.480 the analogy, we just follow the same thing, the same 0:07:20.520 --> 0:07:23.120 path that Donald Trump has done. You know, we can 0:07:23.200 --> 0:07:26.560 also emulate a lot of those business practices, and I 0:07:26.600 --> 0:07:30.360 think that's gonna encourage more creators to really walk to 0:07:30.560 --> 0:07:34.760 entrepreneurship path, to take more risk start businesses, at least 0:07:35.080 --> 0:07:38.960 use the fifty dollars to prove the concept of the business. Right, 0:07:39.400 --> 0:07:43.200 that's really the key. Yeah, it's so interesting you say 0:07:43.240 --> 0:07:45.720 that because you know, for whatever you think about like 0:07:45.800 --> 0:07:48.240 Donald Trump and how he was as president, like he 0:07:48.440 --> 0:07:52.880 used the system that the United States has to his advantage. 0:07:52.920 --> 0:07:54.720 You know, whether that be you know, you think you're 0:07:54.720 --> 0:07:58.160 talking about companies like Amazon and Apple and others who 0:07:58.960 --> 0:08:01.120 you hear these stories about how they pay little to 0:08:01.160 --> 0:08:04.560 know taxes and you know, whatever Donald Trump did and 0:08:04.600 --> 0:08:07.040 whatever he paid or didn't pay in taxes and then 0:08:07.160 --> 0:08:11.280 using the advantages of ll c s or whatever. Um, 0:08:11.320 --> 0:08:13.920 you know, he used the system that we have in 0:08:13.960 --> 0:08:16.680 the United States to his benefit. And you know, our 0:08:16.720 --> 0:08:18.440 thing is like we wanted to make sure that people 0:08:18.440 --> 0:08:22.120 are knowledgeable to use the system to to their benefit 0:08:22.160 --> 0:08:27.280 because our country is set up for business. And so 0:08:27.600 --> 0:08:30.640 what do you say to that? You know, when you're 0:08:30.640 --> 0:08:33.520 when you're trying to get people to reframe in their mind, um, 0:08:33.600 --> 0:08:39.920 what they think about income and taxes and investments. No, absolutely, um. 0:08:39.920 --> 0:08:42.160 And one of the things almost with c p A, 0:08:42.559 --> 0:08:44.680 but one of the things that I've tried to build 0:08:44.760 --> 0:08:48.000 into our system is how do we really put ourselves 0:08:48.080 --> 0:08:52.600 to follow the best possible tax strategy? So, um, if 0:08:52.600 --> 0:08:55.800 you're not if you're not either a landowner which is 0:08:56.000 --> 0:08:59.360 richest real estate, or an entrepreneur. The system is not 0:08:59.440 --> 0:09:02.560 set up for you, right. The system is really set 0:09:02.640 --> 0:09:05.520 up to benefit those that own business owners. So you 0:09:05.640 --> 0:09:09.400 think about small business and big business. Amazon can make 0:09:09.440 --> 0:09:12.920 a billion dollars and pay note net taxes. Right. It's 0:09:12.960 --> 0:09:15.760 because the system, the i r S, the i r 0:09:15.880 --> 0:09:20.439 S code gives tremendous benefits for entrepreneurs and creators. Right. 0:09:20.679 --> 0:09:23.640 And also people that own real estate, they're the ones 0:09:23.880 --> 0:09:27.439 that really are can structure their path so that they 0:09:27.480 --> 0:09:31.760 have the minimal tax hit as possible. Right. So I'm 0:09:31.800 --> 0:09:34.640 in real estate myself. I'm a real estate developer. I 0:09:34.679 --> 0:09:38.480 own over five hundred units. I've reached a position that's 0:09:38.520 --> 0:09:42.439 called well, it's a classification, it's called real estate professional. 0:09:42.880 --> 0:09:46.160 Once you get to that level, a hundred percent of 0:09:46.200 --> 0:09:50.079 your expenses can be written off. Right. And and most people, 0:09:50.240 --> 0:09:54.640 to me, that's the nirvana of of tax strategy, because 0:09:54.840 --> 0:09:57.800 whatever I do, it's you know what, my whole lifestyle 0:09:57.840 --> 0:10:01.959 is structured around tax seables and whatever whatever expenses I 0:10:02.360 --> 0:10:05.959 get this offset against earned income, the rental income that 0:10:06.040 --> 0:10:08.880 comes in through my units. As a landlord. You know, 0:10:09.000 --> 0:10:12.199 I don't necessarily get taxed the same way that someone 0:10:12.280 --> 0:10:15.560 with W two income is taxed. So yeah, we gotta 0:10:15.640 --> 0:10:21.200 go in here because when I learned that employees pay 0:10:21.280 --> 0:10:26.080 taxes first and business owners pay taxes on what's left over, Like, 0:10:26.160 --> 0:10:30.000 the whole game changed for me because you know, like, yes, 0:10:30.080 --> 0:10:32.880 it's when you're an employee and you work for somebody 0:10:32.920 --> 0:10:35.120 and you get that check on Friday. Yes, it's a 0:10:35.160 --> 0:10:39.360 great day on Friday. But the government Uncle Sam already 0:10:39.360 --> 0:10:42.320 then took his out. You know, when I get paid 0:10:42.679 --> 0:10:45.440 or when you get paid a Donnie Hugh like you 0:10:45.520 --> 0:10:48.200 get you get the whole check, and then you gotta 0:10:48.320 --> 0:10:51.120 figure out, Okay, what am I gonna spend this on 0:10:51.720 --> 0:10:54.440 so that at the end of it I get the 0:10:54.520 --> 0:10:57.360 full benefit of it and I don't. Then I'm gonna 0:10:57.400 --> 0:11:02.440 pay Uncle Sam on whatever have left over after I've 0:11:02.480 --> 0:11:05.640 squeezed out as much as I legally care. Well, you 0:11:05.640 --> 0:11:08.400 you hit the nail right on that head with everything 0:11:08.440 --> 0:11:10.880 you just said, So I know, I know for uh, 0:11:11.040 --> 0:11:13.160 for example, you know you and one of the things 0:11:13.160 --> 0:11:16.280 that we do it in money apps give people the paradigm, right, 0:11:16.440 --> 0:11:17.880 but you you hit the nail on the head. So 0:11:17.960 --> 0:11:21.200 let me address for those individuals that are listening out there, 0:11:21.240 --> 0:11:24.800 how to really structure your business so that you have 0:11:24.960 --> 0:11:29.080 the minimum tax the minimum tax hit right. So number one, 0:11:29.120 --> 0:11:31.440 you need a bank account. Whenever you get a check. 0:11:31.480 --> 0:11:35.240 You should have a business whatever, whatever line of work 0:11:35.320 --> 0:11:39.679 that your in, start up nonstartup, technology, non technology, you 0:11:39.679 --> 0:11:42.440 should have a business account. Right now, money app we 0:11:42.440 --> 0:11:45.640 have free business accounts you can set up it. Really 0:11:45.679 --> 0:11:48.280 we're trying to disrupt the typical banks. You can set 0:11:48.360 --> 0:11:52.000 up a business banking account, but your check should come 0:11:52.000 --> 0:11:55.920 into that account, right, and then from that account you 0:11:55.960 --> 0:12:00.240 should have separately a personal bank account. So you have 0:12:00.280 --> 0:12:04.040 a business account, pay yourself first, personal put that from 0:12:04.080 --> 0:12:06.880 the business. The check comes into the business account. Then 0:12:06.920 --> 0:12:10.200 you pay the personal account. But also you should have 0:12:10.320 --> 0:12:13.760 a business tax account, right. You also should have a 0:12:13.840 --> 0:12:18.840 business operating account. It's important to separate these funnels of 0:12:19.040 --> 0:12:21.400 cash flow number one, so you can make it easier 0:12:21.480 --> 0:12:23.800 for your tax professional to do your taxes at the 0:12:23.880 --> 0:12:26.719 end of the year. But also this is the savings. Right. 0:12:26.760 --> 0:12:28.920 So let's say you get a check for ten thousand 0:12:28.960 --> 0:12:33.640 dollars goes into your business account. Normally putt of that, 0:12:33.760 --> 0:12:37.080 so three thousand goes into your tax account. Let's say 0:12:37.080 --> 0:12:39.839 you want you want to pay yourself, um, you know, 0:12:40.000 --> 0:12:44.280 ten fient whatever you need to live on. Two thousand 0:12:44.320 --> 0:12:48.000 goes into the personal account me personally, every LLC that 0:12:48.040 --> 0:12:50.680 I have. I also have an operating account, right, so 0:12:50.760 --> 0:12:53.480 I can track my my income, my my who am 0:12:53.520 --> 0:12:56.120 I paying? So I'm paying my bills on top my 0:12:56.200 --> 0:12:58.840 operating accounts account that I use day to day, and 0:12:58.840 --> 0:13:01.520 I can follow that leedsure and I can see, well this, 0:13:01.800 --> 0:13:03.840 you know, this is a vendor here. I don't know. 0:13:03.880 --> 0:13:06.080 I didn't pay that vendor. I can track fraud things 0:13:06.120 --> 0:13:09.600 like that, you know. So that's the structure, right. So basically, 0:13:09.640 --> 0:13:13.360 just in any any basic business, that's four accounts that 0:13:13.400 --> 0:13:16.400 I just mentioned, you should have the business account, which 0:13:16.440 --> 0:13:19.520 really shouldn't be forward facing. It should be a business 0:13:20.600 --> 0:13:23.319 that no one can sue. It could be a holding company, 0:13:23.679 --> 0:13:26.959 something that only you would know, and then pass when 0:13:26.960 --> 0:13:29.080 that when that check comes into that, we pass it 0:13:29.120 --> 0:13:32.160 to the personal account. We pay ourselves, right, then we 0:13:32.200 --> 0:13:34.560 pass it to a tax accounts when never and a 0:13:34.559 --> 0:13:36.960 lot of businesses pay on a quarterly basis, but we 0:13:37.000 --> 0:13:39.120 want to make sure that we fund that tax account 0:13:39.280 --> 0:13:41.520 so that we're not scrambling at the end of the 0:13:41.600 --> 0:13:43.800 year to pay a big tax bill. But if you 0:13:43.880 --> 0:13:45.719 do it right, it the way I said it, you're 0:13:45.760 --> 0:13:49.480 operating account. Hand that operating account over to your c 0:13:49.720 --> 0:13:52.200 p A or your tax professional, and they're gonna have 0:13:52.280 --> 0:13:55.160 an itemized list what you spend on and what can 0:13:55.160 --> 0:13:58.920 be deducted from the tax liability that you created each quarter. 0:13:59.200 --> 0:14:01.800 So if I didn't get to a depth, but that's 0:14:01.880 --> 0:14:04.640 that's the that's the that's the formula, you know. So 0:14:04.760 --> 0:14:08.000 there's so much here, so many different lanes we can 0:14:08.040 --> 0:14:10.120 go in. And I understand this is a podcast and 0:14:10.160 --> 0:14:12.680 not everything. We won't be able to go like super 0:14:12.760 --> 0:14:15.840 duper deep on every topic. So's it's so important that 0:14:16.040 --> 0:14:19.560 you know our audience UM is number one subscribe to 0:14:19.600 --> 0:14:22.880 the podcast, but number one following you so that they 0:14:22.880 --> 0:14:25.360 can go deeper on the topics that you're talking about. 0:14:25.400 --> 0:14:27.600 And so I will switch scares it a little bit 0:14:27.640 --> 0:14:31.560 because I'm interested in your conversation on you know, when 0:14:31.560 --> 0:14:34.440 I learned this principle, UM, it was later than I 0:14:34.520 --> 0:14:36.760 wish I would have learned it, but I did learn it, 0:14:36.800 --> 0:14:38.600 and some people still haven't learned it. So you're gonna 0:14:38.640 --> 0:14:43.320 learn it. Today, um this concept about reinvesting the profits, 0:14:43.360 --> 0:14:47.120 because you know what happens too often in our businesses 0:14:47.880 --> 0:14:49.880 is we will start a business. We will start a 0:14:49.920 --> 0:14:54.360 company and start you know, making some money, make some check, 0:14:54.440 --> 0:14:56.280 whether we're working a day job. And then when now 0:14:56.280 --> 0:14:58.520 we got this side hustle, we make money on that 0:14:58.600 --> 0:15:01.560 side household, make money on at you know, ten PM 0:15:01.680 --> 0:15:05.120 two a m business. And then we get that check 0:15:05.160 --> 0:15:08.480 and now we go spend it because we got money 0:15:08.480 --> 0:15:10.800 that we didn't have before. So now all of a 0:15:10.880 --> 0:15:13.640 sudden were buying advertisers. We didn't use to buy appetizers. 0:15:13.840 --> 0:15:16.080 You know, we went out to eat. All of a 0:15:16.120 --> 0:15:18.040 sudden you put in cheese on it. And so I 0:15:18.120 --> 0:15:22.960 wonder what is your take on this? This way of thinking, 0:15:23.440 --> 0:15:26.240 like every dollar you can afford to put back in 0:15:26.320 --> 0:15:30.640 the business helps you to grow the business and instead 0:15:31.720 --> 0:15:34.800 make sure that you are not um taking the money 0:15:34.840 --> 0:15:37.200 out when you should be. If you if you bought 0:15:37.200 --> 0:15:39.600 it for five dollars and you sold it for ten, 0:15:40.240 --> 0:15:43.360 put the five that you originally put in, put it 0:15:43.400 --> 0:15:46.640 back in, and then put the extra five that you earned, 0:15:46.880 --> 0:15:49.840 and now you've got ten dollars invested instead of five 0:15:49.840 --> 0:15:52.760 dollars invested and you can continue to grow and scale 0:15:52.800 --> 0:15:56.720 your business that way. That's super important really, and just 0:15:56.760 --> 0:16:00.960 as founders or entrepreneurs, we have to take the position 0:16:01.360 --> 0:16:04.360 that you know, every dollar that you pull out of 0:16:04.400 --> 0:16:07.600 your business, you're actually hurting your business. So you want 0:16:07.640 --> 0:16:10.480 more and more dollars to be in your business so 0:16:10.560 --> 0:16:14.200 that you could multiply them as fast as possible. Right, 0:16:14.240 --> 0:16:16.000 you want to get the maximum amount of r o 0:16:16.200 --> 0:16:21.080 Y business or entrepreneurship. It's better than and wealthy know this. 0:16:21.600 --> 0:16:23.640 They would rather not have money just sitting in the 0:16:23.680 --> 0:16:26.400 bank account. You want that money to be working for 0:16:26.480 --> 0:16:28.200 you and when you pull it out, like if you 0:16:28.280 --> 0:16:31.160 have a business describing that means you're probably getting a 0:16:31.200 --> 0:16:33.360 great r o Y on your money, better than you 0:16:33.360 --> 0:16:35.520 can get in the stock market, better than you can 0:16:35.560 --> 0:16:40.440 get by by investing in even you know, uh, aftermarket stocks. 0:16:40.760 --> 0:16:45.720 It's just a tremendous Entrepreneurship is the number one return, 0:16:45.800 --> 0:16:47.920 the number one r o Y that you're gonna get 0:16:47.960 --> 0:16:51.120 on your investment. You do not want to put pull 0:16:51.160 --> 0:16:53.800 money out of that. So that's what I tell my clients, 0:16:53.800 --> 0:16:56.160 and and and really at money you have, we want 0:16:56.200 --> 0:17:00.480 to help more creators understand that metric. That's one of 0:17:00.520 --> 0:17:02.880 the key metrics that are out there. So what we 0:17:02.960 --> 0:17:06.480 do is, let's say, after you've proven the concept of 0:17:06.520 --> 0:17:08.919 your business, one of the key things that you have 0:17:09.000 --> 0:17:12.679 to do is scale and you need capital to scale. 0:17:13.080 --> 0:17:16.320 But the best thing to do is have capital that 0:17:16.480 --> 0:17:20.200 is generated from your business. But most businesses that are 0:17:20.600 --> 0:17:23.280 that have the ability to have high growth, they need 0:17:23.400 --> 0:17:26.639 external investment. They need people from the outside to invest 0:17:26.720 --> 0:17:29.800 in them. That's that's one thing that we do that 0:17:29.840 --> 0:17:33.520 other financial institutions don't do. Businesses that are high growth, 0:17:33.760 --> 0:17:37.880 we get funding for you in terms of VC funding 0:17:38.160 --> 0:17:40.360 where we have the Angel Syndicate in which we will 0:17:40.480 --> 0:17:44.159 invest below two hundred and fifty thousand and businesses that 0:17:44.200 --> 0:17:46.840 can scale, But it's the same process. You would much 0:17:47.000 --> 0:17:50.879 rather um get the money that you need to scale 0:17:50.960 --> 0:17:55.240 and grow from the business itself. But most businesses, definitely 0:17:55.320 --> 0:17:58.960 the scale on a large level, need that external investment 0:17:59.119 --> 0:18:01.359 and we want to show people how to how to 0:18:01.400 --> 0:18:04.720 do it the best way possible. So what you just 0:18:04.760 --> 0:18:08.080 said was so important, And and here's what I hear. 0:18:08.119 --> 0:18:09.680 And when you when you talk about you know, having 0:18:09.760 --> 0:18:12.919 money sitting what I hear is what I hear is 0:18:14.240 --> 0:18:17.520 there is a such thing as having too much cash 0:18:17.560 --> 0:18:19.880 in the pain. There's the such thing as being too liquid. 0:18:20.480 --> 0:18:23.320 And when you think about um, because I mean all 0:18:23.320 --> 0:18:25.520 of us, you know, any of us would love to 0:18:25.720 --> 0:18:28.359 you know, see that statement. A lot of zeros, a 0:18:28.359 --> 0:18:31.960 lot of money sitting over there. And but that money 0:18:32.160 --> 0:18:36.280 is slowly dying number one. But it's stagnant at best. 0:18:36.359 --> 0:18:39.160 But it's slowly dying because of inflation and things like that. 0:18:39.560 --> 0:18:43.000 UM in in the reality of things, and so there 0:18:43.119 --> 0:18:45.360 is a such thing with as much as you love 0:18:45.440 --> 0:18:48.120 to see a lot of money sitting in your bank account, 0:18:48.520 --> 0:18:51.320 there is a such thing as having too much cash 0:18:51.359 --> 0:18:54.320 in the bank. So what do we do when we 0:18:54.440 --> 0:18:59.200 have um? Well, actually, at what point should we think, Hey, 0:18:59.240 --> 0:19:00.800 I got too much on you over here, I need 0:19:00.840 --> 0:19:03.280 to do something with it. And then what should I 0:19:03.359 --> 0:19:06.920 do with it to make sure it's working for me? Really, 0:19:06.960 --> 0:19:11.200 when you have cash sitting in an account that you 0:19:11.240 --> 0:19:15.520 can find a better use for it, that is safe. Right, 0:19:15.560 --> 0:19:19.480 So in my particular business, that operating account on a 0:19:19.560 --> 0:19:22.719 monthly basis, UM, and one of my projects, I may 0:19:22.840 --> 0:19:27.440 have a need for dollars. If let's say I'm I'm 0:19:27.480 --> 0:19:30.000 something great, I sold the asset. I have a big 0:19:30.080 --> 0:19:32.440 check coming in. I don't need a hundred two hundred 0:19:32.520 --> 0:19:35.520 three hundred thousand sitting in an account, right, That's just 0:19:35.720 --> 0:19:39.120 too much. That's that's being too liquid, right, unless I'm 0:19:39.400 --> 0:19:43.000 saving up for another move or another acquisition. But you 0:19:43.040 --> 0:19:45.080 want to you want to have enough cash that you 0:19:45.119 --> 0:19:48.840 can at least be operational for two to three months 0:19:49.080 --> 0:19:51.280 and then beyond all that. I think that you're at 0:19:51.400 --> 0:19:55.240 this threshold where you're not optimizing your cash value. So 0:19:55.359 --> 0:19:58.480 what I tell people to do, Number one is um 0:19:58.600 --> 0:20:02.360 once you understand the highest and best use of your 0:20:02.480 --> 0:20:05.119 r o Y, right, whether it's in your business or 0:20:05.160 --> 0:20:08.119 whether it's investing in other businesses. We have. We have 0:20:08.600 --> 0:20:10.119 r o Y and our business, but one of the 0:20:10.119 --> 0:20:12.119 great things that we like to do is invest in 0:20:12.240 --> 0:20:16.600 other business EXX capitals. We like to see those the 0:20:17.200 --> 0:20:19.720 new up and coming businesses that are on the horizon. 0:20:19.920 --> 0:20:23.080 How can we put a hundred thousand uh in in 0:20:23.080 --> 0:20:25.760 in their system to give them a greater r r 0:20:25.800 --> 0:20:28.360 o I which is gonna allow us to grow even more. Right, 0:20:28.680 --> 0:20:32.200 So it's really looking for those opportunities where you can 0:20:32.240 --> 0:20:35.439 get excess cash and put that cash to work. The 0:20:35.520 --> 0:20:39.040 wealthy do not have a whole bunch of cash sitting 0:20:39.080 --> 0:20:41.840 in a bank account, So we definitely don't want to 0:20:41.880 --> 0:20:45.479 do that. The reason why is very simple. When you 0:20:45.600 --> 0:20:48.439 have money sitting in a bank account, especially now that 0:20:48.480 --> 0:20:51.399 we just had a two trillion dollar stimulus that the 0:20:51.440 --> 0:20:54.199 stimmies that went out. Everyone's talking about the stimmies, but 0:20:54.720 --> 0:20:58.240 you know, the deflation, every effect of that is significant. 0:20:58.600 --> 0:21:01.720 So just having money sitting in an account, you're gonna 0:21:01.760 --> 0:21:03.639 be able to buy less and less for your dollar. 0:21:03.800 --> 0:21:07.040 And this is what's gonna happen going into the future. Um, 0:21:07.080 --> 0:21:08.840 we know that taxes are going to go up, the 0:21:08.880 --> 0:21:11.560 cost of living is going up in most cities in 0:21:11.600 --> 0:21:14.639 the US. So it's just something to be super cognizant of, 0:21:15.080 --> 0:21:19.800 if you know, if you if you're financially literate. So 0:21:19.840 --> 0:21:21.639 I want to translate what I hear you say, and 0:21:21.680 --> 0:21:23.800 you can correct me if I've gotten any of this wrong. 0:21:23.840 --> 0:21:26.679 But I want to be sure that we understand what 0:21:26.840 --> 0:21:29.760