Speaker 1: Welcome the Money in Wealth with John Hobriyant, a production
Speaker 1: of the Black Effect Podcast Network and iHeartRadio. Hey, Hey, Hey,
Speaker 1: it's John Hobriant, and this is money and Wealth, and
Speaker 1: I'm dealing with a trending topic. There's a young lady
Speaker 1: mother who is in the store with her child who
Speaker 1: really wants a toy. It appears and he wants her
Speaker 1: to buy it. And he's smart enough to know that
Speaker 1: Mom uses well her credit card. It appears all the time,
Speaker 1: and it's durable. You have to look at the clip.
Speaker 1: The kid is very, very smart and says, Mommy, whyt't
Speaker 1: you follow with your credit card? And she says, this
Speaker 1: is very telling. I don't have anything any room on
Speaker 1: any of my credit cards. Now, this is the state
Speaker 1: of America. Really. Credit card debt was just under a
Speaker 1: trillion dollars in twenty twenty two, I think that's right.
Speaker 1: By twenty twenty three, it was one point one trillion,
Speaker 1: actually one point one two nine trillion. Credit Card debt
Speaker 1: went up one hundred billion plus in the course of
Speaker 1: a year and in a quarter. In one quarter of
Speaker 1: a year, it went from one point zero seven nine
Speaker 1: trillion to one point one two nine trillion, which is,
Speaker 1: in short form, a lot of money. And why did
Speaker 1: it go up literally one hundred billion dollars in a
Speaker 1: quarter because people got used to the stimulus money. And
Speaker 1: I thought that was that party was going to live forever.
Speaker 1: And it's one of the reasons I bought I wrote
Speaker 1: the book which is now bestseller. Thank you very much.
Speaker 1: Why I wrote the book Financial Literacy for all, and
Speaker 1: why I want everybody to buy it and read it
Speaker 1: is and say it at your kitchen table and have
Speaker 1: a conversation with your children so they understand that, Hello,
Speaker 1: credit cards are not cash. It's not your money. You
Speaker 1: got to pay it back. You know, credit cards were
Speaker 1: only created in the later part of the twentieth century, MasterCard, Visa, Discover, etc. Etc.
Speaker 1: Those were so the pioneers and created the first credit
Speaker 1: cards was actually created as an offshoot of Bank of America.
Speaker 1: But it's not cash, you got to pay it back.
Speaker 1: And this was a teachable moment with the parent and
Speaker 1: the child. The mother missed an opportunity to educate her
Speaker 1: child that hey, baby, credit cards aren't cash. It is
Speaker 1: not my money, and I'm tapped out, like we can't
Speaker 1: live on credit cards and have a conversation. Actually open
Speaker 1: up your financial books and records, pull out the credit
Speaker 1: cards and show the kid kids obviously very smart, show
Speaker 1: the kid like, you know what happens if you're just
Speaker 1: paying interest? And how much interests are you paying on
Speaker 1: each credit card? And explain once versus needs and then
Speaker 1: let the kid make a decision with her about you know,
Speaker 1: do they want to buy some food and save for
Speaker 1: a vacation or something the kid would really want and
Speaker 1: pay for it six months or a year from now,
Speaker 1: or do you want this little toy right now? So
Speaker 1: go on your credit cards going to explode mom's budget,
Speaker 1: stress mom out and put mom in debt and the
Speaker 1: family and have a family conversation about it. I just
Speaker 1: think there was a moment, Like rainbows only follow storms.
Speaker 1: You cannot have a rainbow without a storm first. You
Speaker 1: can't growth without legitimate suffering. There was a moment. There
Speaker 1: was an opportunity here to turn the kid's turmoil in
Speaker 1: torture and not getting a toy into a teachable moment.
Speaker 1: Make the kid and a co investor in his own
Speaker 1: future and compassionate to mom and understanding of how hard
Speaker 1: mom's working. But this credit card debt is really a
Speaker 1: big deal, and we you know, it can't keep going
Speaker 1: up like this. It's approaching the level of student loan debt.
Speaker 1: It's dangerous. It will not go away. And it's super
Speaker 1: you know, well dangerous because you can swipe it, you know,
Speaker 1: in your pocket, and you tend to swipe it at
Speaker 1: times when you shouldn't because maybe you're depressed or angry
Speaker 1: or frustrated and you're doing shop therapy, shopping therapy to
Speaker 1: feel better for a moment. And if you're at a
Speaker 1: you know, a department store at shiny, credit card may
Speaker 1: have a twenty five twenty eight percent interest rate on it.
Speaker 1: So anyway, the point was that we came out of
Speaker 1: the pandemic. There's all the stimulus money. We adjusted our lifestyle,
Speaker 1: some of us for the stimulus money. We thought that
Speaker 1: was an income. It was not. It was temporary stimulus
Speaker 1: to try to you know, level set your loss of
Speaker 1: income and so on and so forth during that period of time.
Speaker 1: But some people thought, well, I'm rich now or whatever,
Speaker 1: and they just decided to live it up. And they're
Speaker 1: still trying to live it up. But you're living it
Speaker 1: up now because there's no stimulus money coming there's no
Speaker 1: stimulus money coming and not trying to live it up
Speaker 1: on borrowed time credit cards. And a Bastijung has this
Speaker 1: great quote to live in a system of free enterprise
Speaker 1: and not to understand the rules of free enterprise must
Speaker 1: be the very definition of slavery. At some point, you
Speaker 1: got to pay this stuff back. I've been there before.
Speaker 1: I know the feeling. It's easy to swipe and charge
Speaker 1: you know, three hundred bucks, and it's really hard to
Speaker 1: pay it off twenty five dollars minimum payment at a
Speaker 1: time when most of that twenty five dollars is going
Speaker 1: to interest. Okay, anyway, that's the trending topic for the moment.
Speaker 1: Let me know what you think. Let's have a conversation
Speaker 1: with family and friends. This was a moment for the
Speaker 1: mother to have an educational moment with her child about
Speaker 1: how much does it cost to run a household and
Speaker 1: she's tapped out. She was very brave of her to
Speaker 1: actually say I don't have any any limit left on
Speaker 1: any of my cards, which is going to also tank
Speaker 1: her credit score, by the way, because the most damaging
Speaker 1: part of your credit card sort of the most volatile
Speaker 1: part of your credit score is the part that's tied
Speaker 1: to consumer debt credit cards. The it's not about the
Speaker 1: limit being higher, it's the balance against that limit. So
Speaker 1: it doesn't matter whether you have one hundred thousand dollars
Speaker 1: limit or a thousand dollars limit. In fact, if you
Speaker 1: have a thousand dollars limit and you're using two hundred
Speaker 1: dollars of it, you're actually in much better shape than
Speaker 1: if you have one hundred thousand dollars limit and you're
Speaker 1: using ninety thousand dollars of it. I hope that that
Speaker 1: made some sense. All right, is John O? And this
Speaker 1: is a trending topic of the week. Okay, So I'm
Speaker 1: an entrepreneur and a business owner, and I'm gonna break
Speaker 1: something down that people, I'm sure are just curious about.
Speaker 1: They're people are most people are just too ashamed to say,
Speaker 1: I don't know. I don't understand the difference between a
Speaker 1: for profit corporation and a nonprofit entity and the rules
Speaker 1: that apply to that. I just talked to a very sophisticated,
Speaker 1: very successful friend recently and had to really advise him
Speaker 1: to like separate his for profit and nonprofit activities that
Speaker 1: you don't own the nonprofit of getting ahead of myself.
Speaker 1: But like you know, you're going to go to jail
Speaker 1: if you keep doing it. Doesn't matter if you have
Speaker 1: good intentions. If you mixing and mingling your for profit
Speaker 1: and your nonprofit entity, the story's going to end bad.
Speaker 1: I realized after talking to this very sophisticated, very successful
Speaker 1: person who was about to make a really bad mistake,
Speaker 1: I realized that I had to really lay out in
Speaker 1: some detail and very calmly, you know, not calmly, very
Speaker 1: simply the basics of corporate structure. This is one of
Speaker 1: these things of how stuff works right, And there's no
Speaker 1: shame in your game. There's no reason why you should
Speaker 1: be feeling bad because you don't understand this. Who taught you?
Speaker 1: Like who taught you how this stuff works. The bank
Speaker 1: that was charted to teach free slaves about money, the
Speaker 1: Freedman's Bank. If you're African American, this applies to you.
Speaker 1: That bank was gained by a guy named Henry Cook
Speaker 1: in eighteen sixty five ish after Lincoln's assassination. He went
Speaker 1: in and took three million dollars in money that wasn't
Speaker 1: his white man and well connected politically white man in Washington, DC.
Speaker 1: It could have been of any race, but in particularly case,
Speaker 1: he was a Caucasian man trying to run a black
Speaker 1: or a bank that was trying to teach black slaves
Speaker 1: formally enslaved people about money. Made it sort of a
Speaker 1: double insult, and he robbed the folks at three million
Speaker 1: dollars a bank. When bus Frederick Dunlas tried to run
Speaker 1: the bank and tried to keep it alive with even
Speaker 1: an investment of his own money, it failed on his watch.
Speaker 1: That's another podcast for another time. But interestingly enough, that
Speaker 1: was a corporation. People thought it was a government It wasn't.
Speaker 1: It was a privately chartered bank that had a state
Speaker 1: charter for the District of Columbia, which district is not
Speaker 1: technically a state, but you get what I was saying.
Speaker 1: It was chartered for the District of Columbia. And because
Speaker 1: the border directors it appears, were financially illiterate or corrupt
Speaker 1: or both. And the border directors was a group of
Speaker 1: mainstream i e. White overseers. So this you know, you
Speaker 1: can be successful and still be successful in mainstream and
Speaker 1: top of the market. Still missed everything around the facts.
Speaker 1: These folks ran this state chartered bank as if it
Speaker 1: was a national bank. It had offices ultimately, and I
Speaker 1: think it was seventeen states thirty eight offices, if I have
Speaker 1: that right by memory. But it really was not life
Speaker 1: and it was sort of the inference was that it
Speaker 1: was a government bank. It wasn't. It was a bank
Speaker 1: that was not insured by the federal government. It was
Speaker 1: inspired by the federal government and chartered by Congress, but
Speaker 1: not licensed in several states and not backed by as
Speaker 1: banks are today, the full faith and credit of the
Speaker 1: federal government through the FDIC and FDIC insurance. Let me know,
Speaker 1: by the way, if you want me to break down
Speaker 1: these bank terms and all these fancy terms, and I'll
Speaker 1: do that as a separate podcast. So let me tell
Speaker 1: you about the six type of corporate entities. And I
Speaker 1: don't care what your education level, your income level, your
Speaker 1: exposure level. Don't feel bad if you're sitting there with
Speaker 1: a piece of paper. I didn't know what I'm about
Speaker 1: to tell you. I had to figure it out as
Speaker 1: I went, and I now have had hundreds of corporate entities.
Speaker 1: And I'll tell you why. As an entrepreneur, I've had
Speaker 1: hundreds of corporate entities even though I've only created about
Speaker 1: fifty businesses recently, like real businesses. But I've had hundreds
Speaker 1: of entities, so that should strike you as odd. I'll
Speaker 1: explain to you how and why in this special podcast
Speaker 1: Safe series. Tell your friends that come up to the
Speaker 1: radio or talk to your phone and pull up a
Speaker 1: chair or sit on the couch or sit on the porch,
Speaker 1: pull out your pad and paper and write this down,
Speaker 1: because this is how we learn. God give you, as
Speaker 1: Quincy Jones told me, God give you two ears in
Speaker 1: one mouth, so you listen twice as much as you talk.
Speaker 1: It's time to be nosy about everything. Another Quincy Jones quote, learn, learn, learn,
Speaker 1: It's time to time to figure this out. There's a
Speaker 1: difference difference between business and business. So corporate entity, corporate approach,
Speaker 1: corporate entity number one, write this down now is a
Speaker 1: sole proprietor. This is what most people do. So there
Speaker 1: it's about unless my check, thirty plus million corporations in America,
Speaker 1: I mean, like real businesses operating entities. About ten percent
Speaker 1: of that so three point one million are African American businesses,
Speaker 1: and ninety six percent of those are sole proprietorships, which
Speaker 1: means you don't have any employees. It's I call it
Speaker 1: a self employment project. So the simplest form of business
Speaker 1: is a sole proprietorship and it's owned and operated by
Speaker 1: one person. There is no distribution between the business and
Speaker 1: the owner because it's the same thing. All profits and
Speaker 1: liabilities are personally attributed to the owner. And that's why
Speaker 1: I obsessed on your credit score, because you're going to
Speaker 1: get in a sole proprietorship your credit and the word
Speaker 1: credit comes from the Latin route word credit though, which
Speaker 1: means credibility, so credit has nothing to do with money.
Speaker 1: And the word capital comes from the Latin root word
Speaker 1: copyitass knowledge in the head and banks of trust business.
Speaker 1: So get back to this credibility. Your credit comes from
Speaker 1: a sol proprietorship, from your personal credibility, which is why
Speaker 1: your personal credit score is so videly important because you're
Speaker 1: going to be accessing in our likelihood capital or access
Speaker 1: to capital through your personal financial profile, not your business profile.
Speaker 1: And or put another way, your business profile with the
Speaker 1: sole proprietorship is in our likelihood your personal profile. So
Speaker 1: your personal balance sheet, your personal income statement, where do
Speaker 1: you make your money, where your assets, your personal liabilities,
Speaker 1: how do you pay your bills are all reflections or
Speaker 1: will be reflected upon, how much opportunity that business gets
Speaker 1: until the business grows in size in space. So most
Speaker 1: black businesses ninety six percent of SOL proprietorships no employees,
Speaker 1: which we need to change, by the way, because you
Speaker 1: make money during the day, and hopefully you start to
Speaker 1: finish the sentences that I'm telling you now, you make
Speaker 1: money during the day. But as my friend Tommy Restler
Speaker 1: reminded me two hundredth richest men in the world, you
Speaker 1: build wealth in your sleep. Okay, so number one, SOB
Speaker 1: proprietorships Number two. Partnerships. This involves two or more people
Speaker 1: who agree to share the profits or losses of a business,
Speaker 1: and there are several kinds of partnerships. Is a general
Speaker 1: partnership often referred to as a GP. I'm involved with
Speaker 1: several general partnerships. Each partner is equally involved in the
Speaker 1: operation in the business and equally liable for debts, by
Speaker 1: the way, except unless you have a side agreement. I
Speaker 1: had a business, one of my businesses I sold. I
Speaker 1: was the principal owner, I was the general partner, and
Speaker 1: I had limited partners and at closing, I was one
Speaker 1: hundred percent owner of the entity. But when I sold
Speaker 1: it into a joint venture entity, I ended up with
Speaker 1: new partners and we all became general partners in the
Speaker 1: new entity where I am, you know, a large the
Speaker 1: largest shareholder amongst other shareholders. But you know, I can't
Speaker 1: just make decisions on my own like I did before,
Speaker 1: because a cameo is a sort of a horse design
Speaker 1: by committee. You have several voices that you've got to respect.
Speaker 1: So general partnerships are a very common term, and I
Speaker 1: want you to understand when people say GP, that's what
Speaker 1: they mean shorthand for general partnership. Limited partnerships includes both
Speaker 1: general partners who manage the business and have unlimited libility,
Speaker 1: and limited partners who are investors with limited liability. Really
Speaker 1: important distinctioneer that if you go into a business with somebody,
Speaker 1: they want you to invest. If they're operating the business,
Speaker 1: and you are running your dental office or running your
Speaker 1: broker's firm, or you are a nurse, or you are
Speaker 1: a teacher, you have an occupation, but you have some
Speaker 1: investable money funds that you can invest into an enterprise,
Speaker 1: you in our likelihood, are a limited partner. In all
Speaker 1: likelihood they will know. They are the general partner, they're responsible,
Speaker 1: they have unlimited liability, as it should be. They're going
Speaker 1: to get a return for their sweat equity, if you will,
Speaker 1: their energy, and they're responsible for making this thing successful.
Speaker 1: And you're sort of a long for the ride. But
Speaker 1: because you're not running that business, you shouldn't have complete liability.
Speaker 1: That's why you should have limited liability in your ability.
Speaker 1: Your liability, in my opinion, you should be limited to
Speaker 1: the money that you put into the enterprise with all
Speaker 1: the stuff. You want to get your own legal counsel
Speaker 1: in an accountant to sort of look over this stuff
Speaker 1: before you sign on anybody's dot ed line. Limited liability
Speaker 1: partnerships LPs not to be confused with an LLC. That's
Speaker 1: my favorite entity. I'll come to that in a minute.
Speaker 1: A limited liability partnership is similar to an LP, but
Speaker 1: it offers all partners protection from certain liabilities and debts. Okay,
Speaker 1: we've made it to number two in the structure of corporations.
Speaker 1: I hope the.
Speaker 2: Pen or the iPad or the iPhone or the digital
Speaker 2: note taking app is really going here because this is
Speaker 2: really important stuff.
Speaker 1: When you're structuring your business. You've got to get this right.
Speaker 1: Number three corporations includes a C corp. It is probably
Speaker 1: the most common areas to assume all corporations, once you
Speaker 1: get into the corporate structure, are the same. They're not.
Speaker 1: There's a C corp. It is the first one to describe,
Speaker 1: and it's a complex business structure with shareholders, directors, and
Speaker 1: a director is a board member, and officers an officer,
Speaker 1: not an officer the military, and an officer of the
Speaker 1: corporation is somebody who runs the company. In the prior example,
Speaker 1: it would have been the general partner, So it's one.
Speaker 1: You know. Officers are people who hold an office, so
Speaker 1: the president, the CEO, the chief financial officer, the chief
Speaker 1: administrative officer, chief technology officer, general counsel, et cetera, teram.
Speaker 1: These are officers, but they may not be and in
Speaker 1: all likelihood will not be board members. Okay, hello, and
Speaker 1: probably or not whether they may be shareholders depending on
Speaker 1: what kind of compensation agreement they have. But the CEA
Speaker 1: corporation is the first level of a true entity that
Speaker 1: is its own person. Okay, I hope I'm not freaking
Speaker 1: you out now, But a corporation is a person. It's
Speaker 1: not a breathing human being. But it is a person.
Speaker 1: It is treated as it has a personality, it has
Speaker 1: a identity. It breeds, not human breasts, but it breeds.
Speaker 1: In fact, the first structure in America, in America was
Speaker 1: not government, It was a corporation. That's what started America
Speaker 1: was trading corporations, which ultimately ended up trading slaves, by
Speaker 1: the way, the whole another conversation, But they traded you know,
Speaker 1: grain and all kinds of other things. But these trading posts,
Speaker 1: these trading corporations were the first entities. And that's where
Speaker 1: we got our governance from our government structures. Is that
Speaker 1: you would take votes, and you would have opinions, and
Speaker 1: you would have interests that need to be protected. Into
Speaker 1: property rights, well back then it was just individual property rights.
Speaker 1: That was where it all came from. So America, that's
Speaker 1: why keep saying America is a capitalist democracy. Back to
Speaker 1: the structure. Okay, So the third structure that i've covered
Speaker 1: Number one sole proprietorship. Right that down, I covered number
Speaker 1: two partnerships right that down. I then went into the
Speaker 1: sub partnership structures that I just now have covered. Our
Speaker 1: covering structure. Number three corporation C corp a complex business
Speaker 1: structure with shareholders, directors, and officers. It is legally separate
Speaker 1: from its owners, providing limited liability protection, and has an
Speaker 1: independent life separate from its shareholders. Remember right now, I
Speaker 1: showed you or I said to you, it is a
Speaker 1: living into these sort of a freaky thing to think about.
Speaker 1: But a corporation has life and has hello rights. That's right.
Speaker 1: Corporations have their own you want to call it civil
Speaker 1: rights in that deep all right. Corporation Number four is
Speaker 1: an S corporation. This is the one you probably heard
Speaker 1: the most about. An S corp for in shorthand. It's
Speaker 1: similar to a C corp, but designed for smaller businesses.
Speaker 1: So a C corp is really you know, fortune five
Speaker 1: hundred companies. A lot of them are C corps. Okay,
Speaker 1: we have not got to my favorite structure yet, so
Speaker 1: hold on. But an ES corp is really a big
Speaker 1: business for small business and it's similar to a C corp,
Speaker 1: but designed for smaller businesses. Profit and losses can be
Speaker 1: passed through to shareholders personal tax returns, avoiding double taxation.
Speaker 1: It has restrictions on the number of shareholders, so see there.
Speaker 1: It's it's similar to a c corp. But the es
Speaker 1: corp it has ability to sort of slide entity inside
Speaker 1: of an entity. It's sort of like a parent in
Speaker 1: the child living the you know, the child being in
Speaker 1: the womb. Kids get a little freaky, maybe we should
Speaker 1: say that. But this is less of a totally bulky,
Speaker 1: strong structured entity as the Sea corp is. It still
Speaker 1: has a lot of the features, but you can pass
Speaker 1: through with an escorp. You can pass through some of
Speaker 1: the profits and loss benefits directly to shareholders, personal tax returns,
Speaker 1: making it easier to file taxes and all that kind
Speaker 1: of stuff, and again avoiding double taxation. You have a
Speaker 1: sea corporation. It has a life, and it has a
Speaker 1: tax tax life, and everybody else has a life. It
Speaker 1: has a tax life. So you may be paying double
Speaker 1: taxes in that situation, but you're making so much money
Speaker 1: in that situation the way it cares. But it does
Speaker 1: have an austritional number of shareholders and all that kind
Speaker 1: of stuff escort because it wasn't designed to be this
Speaker 1: big Harriet audacious think. Okay, Number five is probably my
Speaker 1: favorite structure. You might surprise because number six is the
Speaker 1: nonprofit corporate structure that is not my favorite, but it
Speaker 1: is more probably the most interesting. And I've run by
Speaker 1: the way all of these in my business life, and
Speaker 1: I do so in many cases today and again I
Speaker 1: still explain to you why I have hundreds of corporate entities,
Speaker 1: and I'll explain that because that's sort of interesting and fascinating.
Speaker 1: Number five is a limited liability corporation in the LLC,
Speaker 1: my absolute fan favorite. It combines a limited liability protection
Speaker 1: of a corporation with the tax benefits and operational flexibility
Speaker 1: of a partnership. Hello, it's very nimble. Owners are called members,
Speaker 1: and profits and losses can be passed through to their
Speaker 1: personal tax returns. See how elegant that is. And I
Speaker 1: love an LLC for many, many, many many reasons, not
Speaker 1: least in which you can wrap an LLC around almost anything.
Speaker 1: And it's perfect for, in my opinion, a single investment property.
Speaker 1: I had this entity that I owned as a general partner,
Speaker 1: the sole general partner for a period of time, and
Speaker 1: it became a joint venture. But let's stay focused on
Speaker 1: the relevancy of an LLC here. And I owned seven
Speaker 1: hundred homes, just under seven hundred homes. I was, and
Speaker 1: I believe still remain the largest minority owner of single
Speaker 1: family rental homes in America, and it was worth a
Speaker 1: couple hundred million dollars at some point, and sold the
Speaker 1: principal part of the company into a joint venture, which
Speaker 1: I'm now part of that joint venture. But at the
Speaker 1: time when I owned the company, I had to protect
Speaker 1: myself because these were separate in assets sprinkled all over
Speaker 1: a region of the If I just had a multifamily
Speaker 1: apartment building that I owned, there, maybe there'd be two
Speaker 1: or three l c's. Uh let's say, let's say it's
Speaker 1: a three hundred unit apartment building. Just for the sake
Speaker 1: of conversation, for you know, uh there maybe maybe there's
Speaker 1: a maintenance company, a management or maintenance company within that
Speaker 1: that would have been in the l C. Maybe there'd be
Speaker 1: a little cafe or restaurant within the apartment building that
Speaker 1: being its own limited liability corporation. Uh, maybe there was
Speaker 1: a janitorial service that would be its own limited liability corporation.
Speaker 1: So there'd be businesses within businesses, and that would be
Speaker 1: set up as its own limited liability corporation, so that
Speaker 1: what happened in the restaurant didn't make you liable as
Speaker 1: the owner of the of the apartment building. You may
Speaker 1: have had other investors in the apartment building had nothing
Speaker 1: to do with the restaurant. What happened in the management
Speaker 1: company might be separate investors and they don't have they
Speaker 1: you know, the owners of the apartment building of the
Speaker 1: restaurant shouldn't be held liable for what the property management
Speaker 1: company does, even though it's all part of a central investment.
Speaker 1: So that's why you might have in that example, limited
Speaker 1: liability corporations. I had hundreds of entities because I would
Speaker 1: buy sometimes one home at a time, it would be
Speaker 1: a separate LLC. I might buy twenty five or one
Speaker 1: hundred homes at a time through portfolio acquisitions. Write that
Speaker 1: down portfolio acquisitions a purchase of a portfolio of homes.
Speaker 1: All right, you have an investment portfolio in your stock account.
Speaker 1: Maybe you have an investment portfofolio in your mutual fund account.
Speaker 1: Maybe well, I had an investment portfolio of homes that
Speaker 1: I'd buy, and I might buy those as separate entities,
Speaker 1: separate homes or as a bucket in one LLC. Right,
Speaker 1: because maybe we're on the same block or whatever. Protected
Speaker 1: by that ONELC or I might have twenty five LC's.
Speaker 1: I remember sitting in several offices across the country having
Speaker 1: to sign you know, hundreds of grant deeds, trust deeds,
Speaker 1: and mortgages, individual transactions for all these individual homes and
Speaker 1: LLC's tied to same limited liability corporations. So that's why
Speaker 1: even though I only have fifty or sixty businesses that
Speaker 1: I stood up in my adult life, including my nonprofit
Speaker 1: businesses by the way, but I had hundreds of limited
Speaker 1: liability corporations that I had at one time for that reason,
Speaker 1: because I had these individual assets that had to have
Speaker 1: a life protections, investments, ins and outs. But whatever happened
Speaker 1: to that property stated that property. You couldn't trip and
Speaker 1: fall that property and then try to punch through that
Speaker 1: and get to me or my partners to you know,
Speaker 1: try to sue us for a zillion dollars just because oh,
Speaker 1: you know, John O'Brien owns that. So I'm coming up
Speaker 1: even though I just you know, my toe cost me
Speaker 1: one thousand dollars to get bandaged up, I'm willing to
Speaker 1: go after you know, five hundred million dollars whatever the
Speaker 1: number is, because well, I can just sue him into
Speaker 1: the chickens roosts or you know, end of time. No
Speaker 1: limited limited liability corporations are exactly as they sound there.
Speaker 1: They limit the liability of the asset owner. Uh okay,
Speaker 1: so now let's go to uh so that was a
Speaker 1: fifth end. That's my favorite. The LLC, you know, it's
Speaker 1: the most flexible, is the most I think useful. It's
Speaker 1: fairly inexpensive to get into. It's typically a couple of pages.
Speaker 1: It is very elegant, it's very flexible. Already mentioned that,
Speaker 1: and it has a lot of usefulness in US. Is
Speaker 1: the sixth kind of corporation is a nonprofit corporation, and
Speaker 1: most of you know me from that vantage point. It
Speaker 1: is my nonprofit, my lead one, although I have several nonprofits.
Speaker 1: Operation Hope, which is the largest financial literacy coaching organization
Speaker 1: in America, three hundred offices serving one thousand locations and
Speaker 1: forty plus states, with hundreds of funded and thousands of
Speaker 1: nonprofit partners. We've been in four thousand schools. We've invested
Speaker 1: through our operation over four and a half billion dollars,
Speaker 1: channeling our partner's capital and underserved communities. As you can
Speaker 1: tell from me talking about it. I'm so proud of it.
Speaker 1: But that's a five oh one C three nonprofit corporation.
Speaker 1: This is really important. By the way, there's a John Hope,
Speaker 1: Brian and Shaker Bryant Family Foundation. That's not what's called,
Speaker 1: but that's the function of it is. There are other
Speaker 1: nonprofits that have funds for my mother wanted to Smith,
Speaker 1: got rest her soul and Johnny Smith funds that come
Speaker 1: through the family Foundation. As people pass on, we create
Speaker 1: entities to honor them and that goes through the family Foundation.
Speaker 1: That's separate from the nonprofit Operation Hope. Okay, and also
Speaker 1: Operation Hope has nothing to do with my for profit
Speaker 1: activities at Brian Group Ventures. You have to keep these
Speaker 1: things separate unless you want to go to jail. You
Speaker 1: cannot mix these things together. So this is a really
Speaker 1: important point. Now, a nonprofit is a corporation, Yes, it is.
Speaker 1: It is a corporation like any other corporation right organized
Speaker 1: for public or charitable purposes. These entities don't pay income
Speaker 1: tax on money they earn related to their nonprofit purpose.
Speaker 1: They must adhere to specific management and reporting requirements. But
Speaker 1: please know, a nonprofit corporation is a corporation. Okay, it
Speaker 1: has shareholders. That shareholder is an American public it's not private shareholders.
Speaker 1: You don't own it. I control operation, hope, I found
Speaker 1: it as long as I'm working operating it ethically and
Speaker 1: within the limits of the law, and I don't or
Speaker 1: is an S corporation numbers five is an LLC My
Speaker 1: favorite structure of doing something in business because of it's
Speaker 1: so flexible and has so many things you can do
Speaker 1: with it, and it's inexpensive, and it's easy to start
Speaker 1: and you can wrap a lot of things around it,
Speaker 1: and it applies to most every place. And then of
Speaker 1: course the most noble of them is the nonprofit corporation,
Speaker 1: which is still a corporation. Is just the public is
Speaker 1: the shareholder, and I think you have a heightened responsibility.
Speaker 1: In fact, if you're running a nonprofit, you're running a
Speaker 1: public entity like it was like going public on Wall Street.
Speaker 1: All right, Okay, so that's that, and I hope you've
Speaker 1: enjoyed this. This is John O'Briant and this is the
Speaker 1: Money and Wealth series on the Black Effect Network. This
Speaker 1: is my podcast on the six types of corporate entities
Speaker 1: and the thousands, well hundreds of Kennedys that I have
Speaker 1: corporated these. I have run almost a thousand edies actually,
Speaker 1: and the purpose and reasons for each one of them,
Speaker 1: and hopefully took a lot of notes and hopefully you're
Speaker 1: smarter as a result of it. Let's make smart sexy.
Speaker 1: We've been making dumb sexy even way too long. We've
Speaker 1: dumbed down and celebrated. It is time to make smart
Speaker 1: sexy again. I'm out from Mike. And the question is
Speaker 1: what does it take to get over the fear of
Speaker 1: failure and the fear of success to push yourself to
Speaker 1: the next level. God bless you, Mike. That's a great
Speaker 1: question and it really ties into the purpose of life.
Speaker 1: You know, this is very going to be a very
Speaker 1: spiritual answer. Really, faith is what you do when you
Speaker 1: don't have all the facts, and success is going from
Speaker 1: failure to failure without loss of enthusiasm. And I take
Speaker 1: no for vitamins. I mean, I just get over and
Speaker 1: around it, through it. I'm going to get to it.
Speaker 1: No one's going to stop me from getting to where
Speaker 1: I want to be in my destiny. That God gave
Speaker 1: everybody their own fingerprints, no one has the fringer prints
Speaker 1: that you have. I'm God's child and there's a destiny
Speaker 1: for me. There's a meaning and a purpose of me,
Speaker 1: and I'm going to go find it. And I say
Speaker 1: in my book Love Leadership. I just wrote my sixth book,
Speaker 1: Financial Literacy for All, which is the bestseller and you
Speaker 1: should get it. It deals with a lot of issues
Speaker 1: of sort of ingrained confidence or acquire confidence. But my
Speaker 1: first book, I remember writing about courage and culture. I
Speaker 1: remember saying that courage is nothing more than your faith
Speaker 1: reaching through your fear, displaying it selfish action in your life.
Speaker 1: I talk a lot about self esteem on this podcast,
Speaker 1: and that wealth is a mindset, right, And there's three
Speaker 1: types of mindset. There's a surviving mindset, there's a thriving mindset,
Speaker 1: and there's a winning mindset, right, and winners are builders. Well.
Speaker 1: A surviving mindset means you're an expert at what you're against,
Speaker 1: not what you're for. Right, And you've got to closed
Speaker 1: fists versus an open hand, that you want to fight
Speaker 1: the shoulders down versus the neck up. And you're depressed probably,
Speaker 1: and you got to get your mind right. You got
Speaker 1: to start fighting from the neck up. You got to
Speaker 1: start being smart and you have to have self esteem,
Speaker 1: and so it's a journey in becoming over time just
Speaker 1: sort of comfortable, reasonably comfortable in your own skin and
Speaker 1: conquering your fears. The first play to cocker your fields
Speaker 1: is them that you've got them. And so while you
Speaker 1: just answering this question is very courageous and I'm very
Speaker 1: proud of you because that's the start. You got to
Speaker 1: acknowledge that you have fears, that you have insecurities, You
Speaker 1: got things to solve. There's three ways to live the suicide.
Speaker 1: Die physically, or you can die spiritually. You can be
Speaker 1: alive and dead. The most dangerous person is a person
Speaker 1: with no hope. Right. And then there's which is most
Speaker 1: people are doing. And then there's healing. And the fairy
Speaker 1: fact that you're asking this question says suggest that you're
Speaker 1: on a route to healing. Go to my instagram. I
Speaker 1: believe it was I did it on my Instagram where
Speaker 1: I talk about this comedian who was teased and harassed
Speaker 1: by people in his neighborhood. He grew up in a
Speaker 1: poor neighborhood and whenever he went there, it's just successful
Speaker 1: people who you think you are. You're trying to be
Speaker 1: white whatever that means, or you know, just sort of
Speaker 1: talk him down to him. But whenever he was on
Speaker 1: drugs or screwing up or falling down, all of a sudden,
Speaker 1: everybody wants to be his friend. They want to oh, yo, man,
Speaker 1: I got you, brother, We're gonna come up and get
Speaker 1: because they can relate to his failures, but they can't
Speaker 1: relate to his successes. Right, So everybody wants to get
Speaker 1: to heaven. Nobody wants to die to get there. People
Speaker 1: will admire eagles, but they also resent them. And the
Speaker 1: eagles don't fly in packs. You've never seen a flock
Speaker 1: of eagles, but you've seen buzzards. Buzzerds are low altitude birds,
Speaker 1: all shooting at eagles. And Turkey's got wings and can't fly. Okay,
Speaker 1: So you gotta watch your hang around and watch the
Speaker 1: toxicity that you allow yourself to be around. And remember,
Speaker 1: if you hang around nine broke people, you'll be the tenth.
Speaker 1: So everybody, you can't take everybody with you. You might
Speaker 1: find that when you become successful, you are alone. I
Speaker 1: often say that as my world has gotten bigger, my
Speaker 1: circle has gotten smaller. I've over answered the question, but
Speaker 1: it's a good one. Uh, just stay up might and
Speaker 1: stay on your stay on your grind, and stay focused
Speaker 1: and let and let the world come to you because
Speaker 1: they will. You've never seen an ugly billion there. People
Speaker 1: tease me when I was coming up. They're not teasing
Speaker 1: me anymore. They're asking me for jobs and contracts. Okay,
Speaker 1: John O'Brien. I'm out Money and Wealth with John O'Brien
Speaker 1: is a production of the Black Effect Podcast Network. For
Speaker 1: more podcasts from the Black Effect Podcast Network, visit the
Speaker 1: iHeartRadio app, Apple Podcasts, or wherever you listen to your
Speaker 1: favorite shows.