💰 Hire Your Kids & Legally Lower Your Taxes | The Money Game

0:09 sucks. You can hashland hashtag wland. but we are trying to I have no idea what he just said. What did he just say? >> What's up, guys? here live here on social media and glad to be back. This is the second time here. We go live every Wednesday here in my studio and try to teach financial types of educ education and if you if my guys can't if you get that board moving in the background. I think it's supposed to be scrolling a little bit if you can get it scrolling there. And so we got all kinds of things to go over. I go live one time a week, 52 weeks in a year and I cover all these different types of things. I'll cover whether it be talk about traditionals or Augustas or HSAs or reps or 529s or 122s, short-term rentals, how they work, grats, slats and cats, you name it on the board. We play a little game in here to help increase your financial education.

1:08 because remember your money is directly tied to your financial IQ. This is a fact of life. Okay? So higher the financial IQ, higher your money. Lower the financial IQ, lower the amount of money. Money is simply a byproduct of financial IQ. That's it. And a lot of times as entrepreneurs, I'm an entrepreneur. A lot of times as entrepreneurs, we switch financial IQ for business IQ. And we think that if we have a really high business IQ, that means that we're going to have a lot of money and we're if we make our business makes a lot, we'll we'll also have a lot of money. And it's not true. I cannot tell you the amount of times. again all I do is work with entrepreneurs at a very high level understanding wealth and and taxes and we own a family office here where I'm at. We do over $100 million a year in business. And the truth of the matter is when you're working with entrepreneurs, what happens to most entrepreneurs is you build your business and every year you go to zero. And if you if you just think about it last year, December, one of the things that you were trying to do was you were trying to go back down to zero again. And you would have worked your whole year of 2025, to make x amount of dollars in business.

2:17 And then in 2020, December of 2025, you made sure that you spent all that money and you went would go back down to zero again. and it's it's playing the game of money the wrong way. We got to figure out how can we create money, how can we keep the money, and then how can we multiply the money? Because if you can't keep any of the money through understanding how taxes works inside of America, there's no way for you to actually multiply that money because you could have some crazy investment that doesn't exist like a million% interest.

2:43 You could be making a million% interest, which isn't true, but let's just say you're making a million% interest but 0 times a million% is still zero freaking dollars. So, it's very important that we understand the three simple principles of money. We have to know how to create it. We have to know how to keep it. And we have to know how to multiply the money and keeping it is that hard part for a lot of entrepreneurs. Man, you guys are good at creating it. We're we have different businesses. You got social media businesses. you got marketing companies, you got construction companies, landscape companies, painting companies, you got all kinds of companies. it's not that we struggle with necessarily creating it. Sometimes we struggle with actually keeping what we create. And if we can't keep it, we can no longer multiply it. So the name of the game is multiplication of money. If you just stop and think about it, the name of the game is multiplication of money. How do you multiply your money? How do you take what the money you keep and multiply that money? That's really the name of the game. If I broke it down for you from a high level, you would simply say you would say that wealth is the best way to create wealth is nothing that I created. It's just understand this concept. It is the compounding of interest absent of taxation. So, if you want to create wealth in your life, okay, I have a daughter that's almost one years old and and when she was born, I opened her up a tax-free investment account for herself. I put money in that tax-free investment account for her. If you take a basic math of calculator of a compound interest calculator and you put $7,000 a year into that from the time she's one until the time she's 60 years old and you do a basic 10% which is the S&P has made 11% over the last 10 years in a row, it's averaged out 11%. Brookshire Hathaway has averaged at 19.6% since 1965. Okay. So, you put it in there and you make 10% a year compounding of interest absent of taxation. So, I open up her of a tax-free Roth account with the time she was born and I simply will do that over and over and over again. Put that money inside that account for her and watch what happens. The math is absolutely astronomical at 11% a year or I'm sorry, yeah, 11% a year which is the S&P has averaged out over the last 10 years.

4:54 and $7,000 or $7,500 a year which is what the max you could put a Roth that would equal out for her lifetime that would equal out $48 million 100% taxfree and all you had to do is put in $7,500 a year into the account. So understanding wealth in is created through compounding of interest absent of taxation is the secret to wealth. So on this game show here we have a little bit of a game show. We have fun. you guys can chat in the bar. I'll try to holler at you guys and talk to you as much as I can. My chat bar on my side over here is down. I don't if my guys can get my chat bar back up, but you guys feel free to chat with me. I'll try to answer as many questions as I can as we go through here as often as I can. So again, every single Wednesday I go live here with you guys. We'll play a fun game here. Understanding wealth, understanding money. Manish says, "I thought I was live." I am live, baby.

5:43 What do you think I am? I'm going to dance around for you. I'm going to get a poll in here soon for you guys so you guys can make sure I'm live on this stuff. let's see. Here we go. Jordan Flesher. Jordan, man. What's up, buddy? I haven't seen you in a long, long freaking time, man. That's like 200 years ago, man. so, let me see. Compound interest. The eighth. Yeah, it's true, man. compound of interest is the eighth wonder of the world. Like, when you understand compounding of interest is eighth wonder of the world. Very, very true. But you understand compounding of interest absent of taxation. And that gets stupid crazy, stupid crazy when you understand those different things here. Give me wide screen here. Give me wide screen on my guy my camera guys. behind me here you'll see a wall and it's just a moving wall of all the different place all the different types of things that we can do to create wealth in your life. And each of these boxes represent a different type of strategies or tax savings accounts that you guys can use inside of your life. Every week I go over one of these strategies with you guys. 52 weeks a year we go over I'll let you guys pick which one we go through. We'll spin the wheel here in a second. You guys can vote and we'll spin the wheel to see which one we go over and use through this process right here.

6:50 So, if you guys want to I'll get started here with you. we purchase a property for our shop. The shop is paying for it. How do we keep the taxes down? Yeah. Yeah. So, cool question, man. So, we we talk about a shop that you purchase. So, you're going to have a business there, right? You've got a business and your business purchased the shop. So, I guess you have to tell me who owns the shop first.

7:11 Okay. So, do you own the shop? Give me the question question bar back up. Do you own the shop or does someone else own the shop? Okay. So, if you have a business, your business is let's say it's a you know, it's a car automotive shop where you're doing repairs on cars or whatever it is. and you want to lease the shop back from yourself. Let me get the board over here. Give me the board on this side over here, my guys. So, if you come over here to the board, I'll draw it out for you. So, here is your let's call it LLC right here. And this is your main business. Okay? So, this is the shop that you're referring to. This is your business. This is your shop right here.

7:44 Okay. as a deduction now, what you could do is I say over here you have another LLC. So I have what I call a leasing LLC. Okay. So in my structure when I do business, there's different quadrants that I have that I do inside of it. But think about this as your your main business. right here, this one right here. This would be your main business that you're you call your shop in the questions there that you're doing. And then over here, this would be a leasing LLC. So, this would be another LLC. This would be a leasing LLC right here. And for clarity, I want you guys to understand for clarity, this leasing LLC right here, this leasing LLC, for if for the majority of people, when you structure this right here, that leasing LLC is known as a disregarded entity. Okay? So, when you open up and do the structure right here, I'm showing you guys, this would be known as a disregarded entity. Okay? So, inside of LLC's, you have different types. You have partnerships, you can tax tax them as S corps, you tax them as CC corps, and so forth. This one is called a disregarded entity. Okay, so this LLC is simply known, there's nothing special about it. It's just known as a disregarded entity. Okay, let me put it up here for you guys.

8:49 Disregarded entity. Okay, it just means it flows through to you basically. Okay, it goes through to you. Okay, so here's how if you ask the best structure what you're looking to do, this would be the best structure of how to do it. Now, it's not that the LLC, this is where we get confused as entrepreneurs. We think that the way that it works is that the LLC has to buy the the the business or whatever. Or we think that the that you you go get a car, right? So say sometimes you get a card, you write off a car or you write off equipment. We think that the LLC has to be able to afford as far as like the credit and so forth to be able to buy the car. And it doesn't work that way. Think about this.

9:25 The the the right the way to think about it for the most part would be this right here. The asset just simply needs to be the word that you're looking for is titled. It's titled. Okay, right here. It's titled inside the LLC. So, most of the time when entrepreneurs are doing this, you're still buying it, maybe using your credit, okay? You're still the person that's putting the guarantee on it. The car dealership, you go get a car, for the most part, is not just going to give an LLC, especially a brand new LLC with no credit history, no bank accounts or whatever. they're not going to give that LLC a $120,000 car loan or $80,000 car loan or in your example here to go buy a piece of real estate that your shop's going to use when you have no tax returns, no records. there's no money really inside of it. So, it's not that the LLC is buying it. You're still buying it.

10:11 Okay? but when you go to close it, you're going to title it in this other LLC's name over here. I call mine a leasing LLC. Like literally on the LLC, it's like my company name, leasing company. So, blank leasing company is what I refer to this company right here. so you can call it whatever you want to, okay? But it's just simply titled inside this LLC's name over here. If you've already bought it, so your question you may have is if you've already bought it, if you've already bought it, it's okay. You can still title it back into this LLC's name. So, sometimes you think you're too late to it. You're not too late. Just even if you've already bought it, go title it.

10:44 If it's real estate, most time you're going to use what's called a quit claim deed, and you can reded it into your LLC's name. But you can if it's a DMV, if it's a car or whatever, you got to go to DMV. You can tile it into the into your new LLC's name there. So, it's very important from a tax but also from an asset protection standpoint. Very, very important. Now, what happens now is simply this. So, a couple things to note here. If you're doing this type of strategy right here, the cool thing about it is this leasing company gets a 100% depending on again the rules and what you're doing here. This right here could get a 100% bonus depreciation. Okay. So, this LLC, let's say, again, if it's a car, this a little bit different from real estate, but say you're buying a car. The cool thing is you can take a 100% bonus depreciation of that car right there.

11:29 Real estate, you still get 100% bonus depreciation, but it's a little bit different because you got to subtract the land, you got to run a cost seg on it, and then you get 100% bonus depreciation. So, it's a little bit different between real estate 100% bonus depreciation. And it's confusing because we hear 100% bonus depreciation and we think, "Oh, I can write off all my real estate." is not how it works. Okay? certain things though to even make it more confusing are 100% straight up bonus depreciation. So for example, a car, a piece of equipment sometimes is 100%. You buy a car that's 100% for your business, right? It's not personal use.

12:02 Then that could be 100% bonus depreciation. You pay 80,000 for it. You can write off 80,000. whereas in real estate, if you buy the shop you're referring to, you doesn't mean that you're going to and you say you bought the shop for $800,000, you're not going to get a 100% bonus appreciation of $800,000. You got to subtract the land in real estate that first. Then you got to do a what's called a cost seg on the property.

12:24 they'll come back with a number for you and then you can bonus 100% bonus depreciate that number right there for you in a in a ballpark back the napkin math. depending on what this is over here, this normally will be about if it's in real estate somewhere between low-end 25%, high-end 40%. You kind of range in there depending on what type of what type of property is, how much stuff is involved inside of it. But it's really going to be 25% of what you paid for it to 40% what you paid for it.

12:51 Again, a lot of variables in there. That's why you have to have hire what's called a cost seg. That's not a me thing. That's the IRS thing. You got to hire a cost seg person to go do it. Once you do that, then you're gonna simply create a between these two companies right here, you're going to create a lease agreement. Okay? You're going to create a lease agreement between these two companies right here. So, one company which you own, which is this one right here, you're going to take this company and this company's going to create a lease agreement to this company here. So, this company creates a lease agreement to this company over here. Now, this lease company with this lease agreement, this is your business.

13:25 It's now going to send a check to this company over here. Okay? So, it's going to send a check. Let's say that make up the number. Let's say that the the amount is $3,000 a month. It's going to write off the $3,000 a month. Okay? So, the leasing company gets to take the 100% bonus depreciation year one. Then, every year after that, this LLC gets to track the $3,000 monthly payment that it sends over there. So, this is a way that you can kind of do it. And the main reason the main thing we do here is this is monthly $3,000 a month is writing off right here. The main reason you want to do this is because of the asset protection. It's less for taxes and really more for asset protection because you're creating separation between your different companies there, your different entities, how they operate and work is the real reason we're doing that. But from a to understand it from a tax perspective, this is what's really taking place. When you hear people that say, "I bought I own this business. I bought this shop.

14:20 How do I deduct it?" This is how you would do it. You would basically take a 100% bonus depreciation from a real estate perspective. And then you could add into it your monthly payments from your lease agreement from your S corporation. Let's say you have or whatever it is that's paying into this leasing agreement. over here, that's how people do it. I do this right here all the time. I have an entire leasing company. again, keep in mind like I said, our business does, you know, total between them all probably close to $100 million a year. So, but I have an entire leasing company, that owns a millions and millions of dollars worth of equipment, trucks, equipment, and so forth. that we lease back and forth to each other. We take a 100% bonus depreciation the year that we bought it and then we lease it back and forth. It also creates me asset protection as well because I'm separating myself from those assets that are involved right there as well. So, really cool question. Give me the chat bar. If you guys have any followup questions, let me know. I'm happy to jump in and help you out. Eli, what's up, my man? title that That's right, man. Title it, bro. it's just a title it inside of it is under the shop's name. Yeah. So, Emilio, you're asking, you're saying it's under the shop's name. So, you could still do it from a tax perspective. It's a little bit hairier, but you could still do it from a tax perspective. U, it doesn't help you with asset protection side of anything. If I was in your shoes, again, you know, you're not you're not really asking me what to do, but if I tell everybody, if it was me, I would separate those two. I would just simply go open up another LLC. All you got to do, go open up another LLC, and that LLC, make it a leasing company. Okay?

15:54 That way, you can use it for all your other leases. If you buy company cars or equipment or depending on what you do, you buy a giant printer, right? We bought a giant printer that was like $78,000. Okay? That's a piece of equipment. We put that inside of the leasing equipments information LLC. Okay, we tile it over there. therefore, we get a 100% bonus appreciation. It separates it from everything from it. So, we can use that for what we're doing inside of it. Okay. so, that's how it works inside of it. Okay. if you're doing the the the renting your own business or own equipment back from your shop, that's how you do it. Okay. What's up, Aspire fam? Nice to see you, Rich man.

16:33 Glad you're over here. yeah. I is this TL Furby? TL Furby. yeah, bro. We had a great event yesterday in at Aspire. we had probably close to 3,000 people live in Fort Lauderdale yesterday at a giant event. We had Kevin Olirri there speaking at it. We had who we had Wolf of Wall Street was there yesterday. We had Gary Vee was at it yesterday as well. so we had a bunch of other speakers there. We had a great day yesterday in Fort Lauderdale going live over there to you guys. They do it's the print shop. this is what we do is it's a print shop in Mckin, Texas. Yeah.

17:10 Yeah. So, totally fine how you're doing it. what you're trying to do in a print shop. You can totally do inside a print shop that that you're working on. Doesn't really matter what the business is in this example per se. but you can either keep them together or separate them out. Again, if I was you, I'd separate it out for asset protection side of things and it keeps it a little bit cleaner from an entrepreneur standpoint. Again, as an entrepreneur, we're not always great at bookkeeping and we're not always great. Not that we shouldn't be. You got to hire that out.

17:38 But if you look at it from the board is like it makes sense. It's like, oh, here's this one corporation I have. Here's this leasing corporation I have. I'm going to send the money literally. I'm going to send the money over here to this corporation. This corporation can deduct expenses. it's a disregarded entity that flows up to me. It's a LLC that creates separation and asset protection inside of it. no, Rich, yesterday wasn't virtually. Yesterday was live. yesterday was live. And oh, you're saying, can you still attend the 3-day event you're doing? virtually possibly. I believe the live one sold out. the live one I believe sold out.

18:10 so you can maybe attend it virtually if my team here if you guys have put in a chat bar maybe the the number for him to call to reach out to you guys could you could reach out to him, Rich, and see if there's any spots left. and I I like I said, I believe the the live 3-day class is sold out already. but you could see if you could jump in the virtual side of it and do that as well if you want to.

18:31 thank you. is it Mila? Is it Mila or Mila? Mila or Mila, I appreciate it. Yesterday was a really cool day for what we did here. So, let me get started here on the little game that we play and you guys can see what we're going to cover today inside here. So this is a this is the spinning wheel that we've created here in the studio and it has all the different types of strategies and accounts and someone a while ago mentioned the chat bar Augusta rule August rules on here is one of the things you can use all these right here are different strategies that as an entrepreneur which is what I am which is what you are you should be using all these different strategies that are up here. So, every freaking Wednesday at 3 p.m. I go live on all the accounts.

19:10 Hey, listen. Let me say this. If you want to go, if you want to see it widescreen, you can bounce over to YouTube. Okay? So, if you're on Instagram or Facebook or Tik Tok and you want to see it full screen, you can go to you YouTube. And if you bounce over to YouTube, we have the full screen setup over for you on YouTube if you want to do that. And again, if you're first time here, make sure you like and follow please. this is the second time I ever went live and so we're having a good time doing it. Build this whole process out to do this. So make sure you like and follow and subscribe on whatever platform you're on. I appreciate it as we're trying to build out a real way to help entrepreneurs inside their business and real way of how to understand the financial IQ that's out there and how taxes work inside of our businesses from one entrepreneur to another entrepreneur. I spend my life trying to help you guys inside of it. So here's the wheel here. we will spin it and see where it lands. Rob's R&D credits, family farming foundations, solos, traditional HSAs, accountable plans. We will spin the wheel and see where we land today for our live training inside of here. okay. today we're going to hit the hiring of your kids.

20:17 Hiring of your kids. This is January, so this is a really really good time to go do this. There's a couple major things you need to understand when you go to hire your kids. Okay? So I'm going to teach you how to hire your kids. One of the coolest things like there's certain things there's five strategies that I would do in taxes if I own a business which I do and I do these five things. There's five tax strategies that I would apply in a business before I did anything. before I took any distributions whatsoever. So before I took any money out of the company, there's five tax deduction things I would do because it's basically free money to you. It's just straight up free money that's given to you inside of it.

20:51 One of those five is hiring your kids. We're in January, so this is a really good time to cover with you guys on how how to hire your kids. I have a kid. she is 11 months old. Her name is Baby Georgia. I call her Baby G. And she is hired. she works for me. And yesterday, if you guys were at the live event, you would have seen Baby Georgia in full full in glory and all of her glory. at the live event there. I gave many many illustrations photos showing how to do the deals from a from a child's perspective how it all works out. And so we shot commercials for ads that we're shooting last weekend. We shot a whole series of new ads that we're running online with me and baby G. So I hire my kid even though she's 11 months old. you got to get creative to do it, but I hire my kid. So let me show you how to do it. When you talk about hiring your kid, what's the benefits for you? How does it help you?

21:42 what are things to watch out for so you don't get yourself in an audit. You're gonna hear a lot of people on social media. Talk about hiring your kids and and it's super easy. What I'm going to tell you is if you follow me on this live channel, I'm going to tell you this every single time. I want you to do this. I want you to follow the tax law. That's what I want you to do. I want you to follow the tax law. Listen to me. The tax law was created by the wealthy for the wealthy and passed in Congress by the wealthy. That's how it works. mine and your job as entrepreneurs is not to go around the tax law. Sometimes growing up not understanding it, you hear the word loopholes a lot like, "Hey, here's this tax loophole." There's no such thing as a tax loophole. It's just we say that because we don't understand the the the law of how it works. So, because we don't understand it, we're like, "Oh, there's this secret loophole." It's not a secret loophole. It's just something that you didn't understand. It's a tax law that you can use or IRS code that you can use inside of it. So, when we hire your kids or you hire your kids, it's very important to follow what the law says. That make sense to you. You don't make this stuff up. You don't wing it by the slight of your pants. You don't make it up as you go along. It's very important that you follow the tax law and everything that we teach inside of here as entrepreneurs. For hiring your kids, there's basically four main points and a little bonus section here I'll give you, but four main things I want to talk to you about when you go to hire your kids inside of your corporation. Okay? So number one, when you're a business owner, okay, and you hire your kids, number one, you want to keep it works best when your kids are 17 years and under. Okay? So 17 years and under is the prime process to do it.

23:17 Now, you can do it after that. Okay? So let me be clear. you can do it after 17. And turn my turn my questions on for me, please. If your kids's 18, 19, 20, you can still hire them. Okay? There's nothing wrong with hiring a kid 18, 19, 20. the difference is when your kid is 17 or under. Okay? Okay, so you can understand this. When your kid is 17 years or under and you pay them from your business, two things take place.

23:40 Number one, because they're considered a minor, when you pay the payroll on your side, set up out of the right company. It's going to be an LLC. Okay? So, I always recommend if you're an entrepreneur to have a family management LLC company. Okay? So, it's another type of LLC that I have. It's a disregarded entity. So, again, it's not this big tax. I got to file these tax returns in another company. Again, it's not as complicated as people are trying to make it, okay? It's a simple LLC. It's a disregarded entity, which just means it flows up to to me. I'm not finding a hold of their tax return again on this LLC. Okay? So, understand I'm going to have a family management LLC company.

24:18 This LLC company, I'm going to hire my children who are 17 and under. Because they're 17 and under, I can now I don't have to, as an employer, I don't have to pay all the payroll taxes and so forth, FICA and Medicaid, all that stuff. I don't have to pay all those taxes because they're 17 and under up to a certain amount. So, it's not unlimited. this year, I think it's in 2026, they just raised it to $16,100, is what you can pay. So, hear me out.

24:44 If your kids are 17 and under, and technically, just you guys can understand this. You could hire any kid and it would still apply the same way. Entrepreneurs, we get creative and we hire our own kid. But you could hire any kid. And as an employer, if you hired that kid and they were 17 and under and you're paying them and you're paying them under the limit of what they're allowed to make in a year, $16,100, your pay that you pay them, if it's coming out of a standard LLC, disregarded entity, not an S corp, okay?

25:11 Not taxed as an S corp or a CC corp. This is why you have a family management LLC company. Okay? So, a family management LLC company is not an S corp. It's not a CC corp. It's a disregarded entity. Disregarded entity is what's paying your kid. you get the tax write off. Okay? So, as a business owner, we get to write that thing off. We don't have to pay the taxes on that. Let's say in this example, $16,000. You might pay your kid 10,000 or 8,000 or 9 or $9,312.

25:35 Like, whatever the amount is is what the amount is. Okay? Just know if it goes above $16,100 in 2026. Okay? Above that, you'd have to start to pay taxes and your kid would have to pay taxes. But if your child is 17 or under or any kid, you pay them below $16,100 in 26, you don't have to pay taxes on your side and they don't have to pay taxes on their side. Okay? So, it's a great way that you as an parent, let's say, and a business owner, you get to deduct your expenses to an employee. So, you pay an employee $16,000, let's say, or $15,000 that year. You get the tax write off, but your kid gets the money. But your kid doesn't have to pay anything in taxes because they're under 17 years old or under. so they don't have to pay taxes on it either. So therefore, your kid gets tax-free money from you. You get the tax deduction on your side. It's a total win on both sides. Number two, we go here. Like I said, the amount is $16,100 per child per year. So if you got three kids, okay, so you have three kids, some you have five kids, seven kids. If you have three kids, you're basically deducting you could deduct up to what's that? 46 thou 47 $8,000 a year. $48,000 a year. Okay.

26:48 Now, let me let me be clear here. You'll see this mistake that entrepreneurs make. And I want you to be very very close attention to this. Okay? This isn't some gimmick or scam that you're running. I'm going get I'm going to get this in just a second. and and one piece I would tell you is do not, for the love of God, do not pay your kids $16,100 exactly. and let's say you have three kids, one's 16, one's 12, and one's seven. Don't pay each kid $16,100. That is a an immediate red flag to the IRS that you're saying that a 16-year-old, a a 12-year-old, and a and a sevenyear-old all just so happen magically works for your company, and all of them just so happen make $16,100 to the penny, which is the maximum level, $1 over that, and they got to start paying taxes on that amount above it. and all your kids make the exact same amount. Okay? I would just tell you that that is you're playing a game here that it's not going to work out well for you. Okay? You're allowed to hire your kid. There's nothing wrong with that.

27:49 But it has to be for a real job. It has to be for something real. Okay? So, one of the things I want to talk to you about is it has to be for a real job. If you're hiring your kid and he's not working for you or she's not working for you, it's not a real job. Okay? So, one thing that I always do is I treat when I hire my kid, I treat it the same way as I hired anybody. I would simply have an employee contract. So when you hire an employee, as an employer, you have some sort of employee agreement, employee contract, something that you're giving to them saying, "Here's your job title. Here's how much you're getting paid. Here's your responsibilities.

28:21 Here's your date of employment that it starts from." You would have some sort of paperwork, okay? Depending on how big of a company you are, more detailed, you have HR company that does it for you. But you got to have some sort of like employee employer agreement or a contract. So, one thing I tell you is you want to play the game the right way. I would try to make sure that my kids have a real job, that they're really responsible for things, and there's an employee agreement of how much I'm going to pay them, how I'm going to pay them, what the responsibilities are for inside of this job. It has to be real.

28:51 You see these entrepreneurs that at the end of the year, because they're trying to get to tax deductions, okay, they just simply pay their kids $16,000 at the end of the year. Look, I'm telling you that that's a very risky move to make just to get a tax deduction, and it's not worth the risk. So, this works really, really well to build deductions on your side, plus long-term tax-free generational wealth on their side, but it has to be done the right way. Okay? So, make sure that it's a real job. I'll give you some examples.

29:19 You have a business card that you wrote off, right? A lot of you have business cards that you write off, right? portions of it, all of it, whatever it is. You could hire your kids to clean your car for you. And every other day they got to go to the car and clean the car and vacuum out the car and get all the trash out of the car, get their get their stuff out of the car cuz it's a company car that you use it for a personal reason to go pick them up for school. Okay, so that was not deductible and you drove it to school. Now tomorrow you're going to be driving it. So you pay them to go get the stuff out of the car. You can get them to do things in the business even if you work from home.

29:51 They're allowed to do chores and they're allowed to do stuff at the house. That's your office, especially if you're using the accountable plan, which is another thing on the wheel that we got to learn about. But you can hire your kids to do things for you. The older they get, the more things they can do. I have a farm on about 126 acres over here in Florida. And my nephew can work for me. He can work on the farm. He's 7 years old. He can go work on the farm.

30:12 He can cut some grass. He can pull weeds in the garden. He can do things for me in the farm. And the farm can pay them the child because they're really doing real stuff. So, a couple things to note. Number one, it needs to be a real job that you're documenting it. It can be simple. Don't over complicate it, but also don't do anything. Number the last point here is it needs to be a W2. Okay?

30:30 So, you're going to hear a lot of sometimes hear different strategist, tax people tell you, just pay him a 1099. And I disagree. Okay? In my opinion, it needs to be a W2. Okay? Now, your kid could get a 1099 from someone else. I've done that before where, think about this, okay? my my daughter believe this or not absolutely stunning gorgeous. She's 11 months old. Beautiful. Absolutely incredible. According to Wland, that's what you said, Wland. So, beautiful girl. Okay. So, can someone hire my little baby girl when she was 6 months old to do a photo shoot? Yes. Are there real photo shoots? Yes. Is it a reasonably priced photo shoot? Okay.

31:06 Yes. Okay. They could hire her as a 1099 contractor and she goes and does contract work. Sure, that could happen. Okay. But if you're hiring them and you're paying them, then in my opinion, you should do that from a W2 standpoint. You should not do that from a 1099 standpoint if you're wanting to maximize all the things that is there. It's much much much safer in my opinion to do that as a W2. Like I said, do that out of over here. similar to the structure, you have a business LLC, you have a leasing LLC, let's say right here, and you would have another LLC right here. And this LLC right here could be a family management LLC. Again, in this family management LLC, it can be a same as up here. It can be a disregarded entity. Okay? So, it's a flowth through. It doesn't have to be you find this big tax return, all these different LLC's. You're overcomplicating. This is simply a disregarded entity. It flows up through you. So, you have your over here in this top you have your say your main business, which is your escorp. Over here you have your leasing LLC that holds all your different leasing equipment assets that you can bonus depreciate plus pay rent in into it for a lease. Then you have your family management LLC over here. This is an LLC on this side over here. It's a disregarded entity. Okay. From here is where I can pay my kids. So I I I hire my children under this one right here.

32:30 You you don't have to do it this way. You don't have to. You could hire your kids out of this escort right here. Okay? You could hire them out of there. There's nothing wrong with that. Okay? It's just that you're going to have to pay some taxes on your side. Okay? So, you can do that. They would still get it tax free as long as under the age of 17, you would have to pay some taxes on your side. So, if it's easier for you and you don't want to over complicate it, do it that way. Then, perfectly fine. You could pay them on the escort. Just know you have to pay some payroll taxes and so forth when you hire your kid out of the escort to really maximize it.

33:01 Especially if you have three, four children that you're that you're hiring. Let's say I would move into a family management LLC so that I don't I can get out of all the taxes that I'm having to pay on that side over there. My kids would still get it 100% tax-free from that side right there. Two pieces of advice for you for free if you want them would be now that the kid has this money, what can they do? So, one thing that could happen is your kids could if I was your shoes, which is what I did, I opened up two different types of accounts. One account was called a Roth account. You I go to a company called Equity Trust. You can go to them if you want to. I don't care where you go. I don't have a dog in the fight.

33:37 Okay. But there's a difference between Charles Schwab or Edward Jones which is more of a they manage the money for you. Equity trust is a self-directed account. Okay? So, if you follow me at all, you can understand the difference between managed money versus self-directed money. I am a huge component. All wealthy people self-direct their freaking money. You can bank on that because we're in charge of it. So, we we move the money. Okay? So, I open up an equity trust.

34:02 It's a self-directed account, Roth account for the kid. That's one account. The second account is called a UTMA, UTMA. I'll spill that out for you guys. The two accounts that I that I would look at opening if I was you and doing this right here. One would be a Roth IRA. Okay, Roth IRA to do that. Number two would be called a UTMA account. Okay, you can open those up online that UPMA UTMA account. An UMA account is just a parental custodial account that you can open up for your children that you have you control it until the time they're either like different states or different levels 18 21 here in Florida is 25 years old. I can control that account. When the kid turns 25, the kid gets the account and now they're in control over the account.

34:46 So I open up a Roth IRA for my baby girl and I opened up a UTMA account, UTMA account for my baby girl. I put when that happens is I pay her let's say let's just say you were paying her the full $16 000 let's say in this example down here in 2027 you could put $7500 a year into that account right there. $75 a year into that account and you can take the leftover amount of money and put it into this UPMA account. What is that? While in 178,500 $8,500 into this account right here and let that money grow for your children. if you do a compound interest calculator on that stuff and my team in the back, let's make sure that we have access to a compound calculator on the screen on our next live so I can walk through and show them how much money their children could be worth. if you just know this because I do the math all the time. If your child is one, you put $7,500 a year into that account, which you deducted from your business, which means you didn't even pay taxes on that $7500. Your kid got it and they didn't pay taxes on that money from the time they were one until the time they were 17 years old. If you put $7,500 a year in that account from the time they're one until the time they're 60 years old inside this Roth IRA account right here, and they made on average 11% a year. You say, "Why 11%?" it's simply because I just took the average of the S&P 500 over the last 10 years. It averaged out after all the fees to be 11%. I don't care what number you use. The 401k of the last 10 years average at 7%. You can use 7 8 9 10. Birkshshire Hathaway since 1965 have averaged out at 19 I think 6% rate of return since 1965. I don't care what number you use. That's between you and however you want to invest the money. I'm saying 11% because that's been the average of the S&P 500 over the last 10 years. So if you took this $7500 right here, if you got the 11% per year in the S&P 500 and you did it from the time that she was born one to the time that she was 60 years old and you compounded that absent of taxation, you compound the absent of taxation. What screen is it going to be on for me?

36:55 >> Give me the program. Give me the You need this code, Jordan. >> Okay. Absent of absent of so the big thing here is understanding compound of interest absent of taxation. Okay, compound of interest absent of taxation is the secret to freaking wealth. So here we go. If you guys can see this on the on the board right here, this is a a compound interest calculator that I created. There's many of them out there. You can go online and get one. If you want one of these, DM me. My team will send it to you. so you have a copy of it the one that I built, but you can use it yourself. You can get one online if you want to as well. I'm going to hook it up really quick. This is on me, not them, but I will fire them for this. 100% chance. I didn't tell them we're going to do the calculator, but I'm going to do the calculator now with But if you calculate this stuff out, again, if you want a copy of my calculator, just let me know. DM me. My team will send it out to you on a DM.

37:47 but you can get one online. You go to Google right now and download compound interest calculator and calculate it out. Well, I can tell you this. If you would calculate this out, $7,500 from the age of one to 60 at 11% which is what the 401k or the S&P 500 has made in the last 10 years. Do you know how wealthy your kid would be? Can I go live with it now, Jordan? >> Okay, so here we go. I'm going to go age one. If you guys can see this, if you guys see this, give me a fire emoji on your screen. If you guys can see the calculator, give me a fire emoji on your screen. I'm going to go to age one to age 60 right here. So, age one to age 60. Here's the calculator right here.

38:23 You're seeing me scroll on it right here. You get that wing? All right. Here's the calculator right there. All right. Again, you can get these online if you want mine personal one that I built. just hit up my team right there in a DM and you can get it right there. And also Jordan, baby love is calling. Baby love. We need to answer this right now. Jordan, we're gonna answer baby love from Jordan. Okay. Not sure that is, but I'm definitely interested in it now. Okay. Here we go. I'm going to type in right here $7,500 started and we'll do monthly contributions. Let's say that's going to be around let's call it $5.90 a month which equal that 70 about 7500. We'll type in 11% interest and we'll calculate that out. That right there is what your kid would be worth and you deducted the money from your business. So when when you hear people talk about I'm bu entrepreneurs, you hear entrepreneurs say I'm building generational wealth for my family. Listen, again, I work with entrepreneurs every single day of my life. I get a lot of a lot a lot of people to understand this process. If you understand generational wealth, generational wealth will not be built by your business. Your business, I'm telling you right now, you're looking for lightning in a bottle. If you think your business that you're building, your your company that you're making right now is generational wealth. Go study history. Go study history. The times that someone's business created generational wealth, very very rare.

39:50 Like you have the Marriott family, the Coca-Cola. Yes, they exist. Do you understand that millions of companies never made generational wealth? Millions upon millions upon millions of companies that were created have never created generational wealth. You only look at a few of them because we see them today. You think, "Oh, that's what I'm going to build." It's not how generational wealth works. If you just understand basic math of how this works right here, you could take hire your kids, pay them the the $16,000 a year if you want to or 14,000 or whatever they're worth. I can't tell you what that number is. I can tell the limits of what you can pay them, but whatever it is they're worth.

40:24 You take the $7,500 a year, put it inside the account on this side over here, and you calculate that out. Age one to age 60, $7,500. let's say you put in $75 a year on a monthly basis at 11% and calculated out, your kid would be worth $45 million. $45 million. You get that on the Tik Tok. $45 million, 100% taxfree. So, no taxes whatsoever inside of this. Your kids will retire at at at 60 years old with $45 million if they put in the S&P 500. This is the process. Absent of taxation, compound interest, absent of taxation is how this game is played. This is the way that you can legally hire your kids. Okay? I have I listen, I want you guys to understand this. When I teach this live thing right here, Jordan, put Q&A up if you can.

41:08 Back on the board for me. if you follow me on every Wednesday when I go live, okay? Every Wednesday I go live at 3:00. If you follow me, you'll understand. There's nothing that I'm going to teach you guys how to go do that I don't personally do. It doesn't exist. Okay? There's nothing that I'm going to tell you you should go do this. I don't do I don't teach you book knowledge. I'm an entrepreneur that does this just like you do this stuff so I can create generational wealth. I can teach you about child's trust, dynasty trust, slats, grats, whatever it is you brought. All of it I have all of it I do. Just to be clear with you guys, I have a a foundation attorney in my office. We have over 100 employees here.

41:42 I have my own personal CPA sits on the other side of this wall over here. I have attorneys, tax attorneys on staff. I have CPA on staff. I own a family office, okay? I'm not someone who lives in my mom's basement that has a good idea to go freaking live. I own a massive multi- multi-million dollar company. We do about $100 million a year in revenue right now inside of our business. Okay. I understand how the game is played. I help entrepreneurs just like you in real real life understand how taxes work. Let me hit some of you guys' question up so you guys can see this. Okay. scroll down here. Scroll down here, Jordan, for me.

42:13 Yeah, S&Ps is what I'm saying. I'm just saying the S&P because no one can say they can't do it. Okay. I'm not trying to give you some account that you can't go do. I'm just saying I don't care which account you put it in. I'm just saying anybody can go put it inside the S&P 500. You get a a Vanguard fund, an index fund, 11% the S&P has produced. Again, you could go, if I was in your shoes, I would look at going to Bergkshire Hathaway that that they produced 19% over since 1965. They averaged out at 19% at Brookshire Hathaway. Okay. So, I would probably go look at that if I was in your guys' shoes as well. All right. Any questions I can help you guys with? Any questions that Win on your side?

42:51 you got any questions? Why don't you holler at holler at me, boy, if you have one. >> yeah. >> Okay, cool. One years old. Yeah. Yeah. Baby's one years old. So, it's a question how to hire them as one year old. >> Oh, yeah. Okay. So, listen, the the question here is the baby's one years old and how to hire the baby, his child. I think his name is Jonathan at one years old. So, listen, until the kid gets around, I'm going to say seven.

43:20 around seven is much easier years old. This is my opinion, okay? From one years old to seven years old, you got to get way more creative and it's gonna have to fit because I don't want you to lie. I want you to follow the law, okay? But in my example, I I run real ads, not like I make a post with my child. I run ads and I spend a lot of money on Facebook ads and Instagram ads and so forth. Okay? So, I'm hiring her and she's part of the entire story. She's not sitting in it.

43:49 So, it makes logical sense why I'm hiring my kid cuz she is literally getting driven to my office by her mother who we are married to be clear. Driven to the office by her mother. sits there has outfits she wears changing of outfits. We do these whole back and forth trainings that we do where I'm teaching her using her and different ads. So, I hired him. So, between one and seven, I would say it's it's it's harder to hire your kid.

44:16 Let me show you what it's worth, though. Okay, watch this. This This is crazy. Jordan, can you give me the calculator one more time? This is crazy. And this is why I did it. Okay. Is it harder? Yes. Could you wait till you're seven? Sure. Would it be easier? Yes. But the difference the difference you got the phone the calculator for me? the difference between hiring my daughter at age one versus hiring my daughter age seven and paying them is astronaut. It's scary how different this is. Okay. It is scary the difference between one years old and seven years old hiring my daughter. Jordan, are we live on it? give me the calculator on the screen for me. There we go. Here's the calculator on the screen. Okay. Jonathan, make sure you can see this. All right. So, this right here is hiring her at age one on the screen. This is age one. She's 60 years old. when she retires, $7,500 into it, 11% annual calculated out, she's worth $45 million taxree, 100% taxree. you get the tax write off, which is even better for you because you didn't even pay taxes on it. Let's change this to one thing. So, keep the number in your head. 45 million dollars. Okay, I'm gonna change this right here, this number from one to seven. Okay, so we wait as a dad. I waited till she was seven. Okay, so I could do that. And people online will say, "Well, just wait till your daughter is seven." What does it matter, Drew? It matters because you have no financial IQ. That's what freaking matters here, cuz I'll show you the difference. Okay, you calculate it out. That's the difference. It's the difference of my daughter having an extra 20 say that $7 million.

45:48 That's the difference, you So when you people online say, "Well, Drew, just wait till she's seven." You can do whatever you want. It's your kid. I'm not telling you what to do. I'm just trying to show you how financial IQ freaking works. And the difference of one to seven years when you understand compound of interest absent of taxation is a difference between my daughter having $45 million or $23 million because I as a father decided to figure out a way how I could legally legally by the law hire my daughter. Remember I don't have to pay her $16,000.

46:20 I don't have to pay her $16,000. That's just the limit of which I could pay. I didn't say that I pay my daughter $16,000. I'm saying that I pay her enough that I can get the $7,500 a year into her account on this side over here. I got to get the money. I got to help her. I gotta hire her, okay, to get the $7,500 in this account right here. My advantage is I get a tax write off. Do I got to get do I got to Listen, this is a statement you guys got to understand. If you want wealth, money is earned. Wealth is engineered. So if you think that you're going to become wealthy and create generational wealth and you're not going to sit down with intent with purpose and engineer it to happen, you are sadly mistaken of how money actually works. Money can be earned. Wealth is engineered. For me to hire my daughter age one, Jonathan, for you to hire your daughter or I think you said daughter at age one or son at age one, yes, you will have to sit down.

47:10 You'll have to think. You have to figure it out. You have to make it happen. You're not It won't fall in place. But what's the difference? $23 million. It's It's not about $7,500. It's about $23 million. There's a big difference between financial literacy and people who do not have a high financial IQ. Remember, money is a byproduct of financial IQ. So, the higher the financial IQ, the more money you're going to have. The lower the financial IQ, the lower money you're going to have. That's a fact. It's it's the way it works. So, when someone says, "Don't hire your daughter till she's seven.

47:40 It'll make it easier for you." I would say, well, my daughter will be worth 27 million more dollars than your daughter is. And they can argue about that later. Okay? So, it's not even about the tax write-off. It's about understanding how to create generational long-term taxfree wealth, which is compounded interest absent of taxation. Everybody got it right there? You got another one? Hit me up, bro. Let's go. >> Who did? Greg. >> Blake. Blake. >> Yeah.

48:08 >> Yeah. So, you're going to open Normally the bank won't give you a child's savings account, a checking account. They'll normally give you a savings account when when you're they're young like that. They don't get a a checking. They get a savings account. So, you're you're very close. You would hire your kid to whatever job. Remember, it has to be a real job. Has to be something real. And and and you need to pay them as a W2. If they work out for someone else, they can have a 1099, but for you, it should be a W2. Okay? Maximum you could pay them taxfree is 16,100. But doesn't mean you have to pay this. You could pay them more than this. If you paid them more than this, what happens? The 16,100 is taxree. Above it, you would get taxed on. So if you paid them $18,400, they would get taxed on 184 minus 161, they would get taxed on that amount. The 161 taxree. If you paid them $10,312, what happens? The $10,312 is taxree. So you don't have to pay 161. That's just the number the IRS has set. It goes up every year. Last year was $15,500. So, you would hire your kid in a real job.

49:07 Pay them as a W2. My opinion from a family management LLC company. That's a disregarded entity. Okay? It's a disregarded entity. you're going to hire him, pay them, you would open up a normally the bank's going to give you a savings account. Open the savings account. Once you have that open, you could open up a custodial Roth account. You go wherever you want to go. You go to Charles Schwab. You can go to Edward Jones. You go to Fidelity. I go to Equity Trust. I get to self-direct that money. So, I get to put it in anything I want to put it into. Okay?

49:34 anything except for collectibles. The only thing I can invest in out of my custodial account is collectibles. You go wherever you want to. That's up to you how you want to invest. Okay. Now, you have the the Roth account opened up at whatever custodial company that you're using, investment firm that you're using. Okay? You pay the your child. So, I paid her that money goes in her checking account or savings account. Okay? I literally pay her a check. She gets from ADP. I have a payroll services. She has a check that she gets from ADP. Mom and her will go to the bank, let's say, and they'll deposit that into her savings account. Now, if the money's in her savings account, we then mom will take that money from her savings account, make a withdrawal, and send it to her Roth. That's called a contribution. The legal word there is contribution. So, baby G is through her mom and dad is just making a legal contribution as a minor to her Roth account. Now, that's in a Roth account, you pick out how do you want to invest it? Do you want to invest it in an index? If you're with Charles or Vanguard, you're going to pick what index fund you want to invest it in, if you will. If you're with Equity Trust, it's self-directed. You could pick the same investment there, or you could put it into Gold and Silver, you could put it buy a business with it. You could you can invest in crypto with it. You can invest in all kinds of stuff. It's self-directed at that point. That's it.

50:44 The money comes back in the Roth 100% taxree. If you do that one move right there, that's it. You do that one move, you'll create generational wealth. Your business is almost irrelevant to generational wealth, my friend. A W2 employee can create generational wealth sometimes easier than a business owner does because a business owner thinks that the business is the secret. And I'm here to tell you the business is badass. I have a business. I'm an entrepreneur. I've only been in business my my whole life basically. So it's all that I know. However, sometimes as entrepreneurs, we get confused by what really creates wealth. A W2 who's not distracted by a business could simply find a way to get their child paid.

51:24 Okay. And there's there's other ways to go about it. You could do a 529 backdoor 529 savings plan. Wait till your account is a little bit older. $35,000 be dropped in the Roth. You could also do a backdoor style through a 529 plan now as well. But a W2 could do this as well. Listen to me. The new Trump account that's going to come out is a hybrid of all of that because in the Trump account, you don't have to have the earned income. The Roth having to create the earned income and the new Trump account which you can have both.

51:50 It's a cool very very cool process. My daughter has seven different accounts. One of those being opened up will be the Trump account. When you when you open the Trump account up, the new one that just got released, it's basically a way that a W2 parent could participate inside of giving money to their kid. It's up to $5,000 per year they could put inside that account right there for the for the the child. It's already invested in an index fund already. when the child turns 18, they could convert that money to a Roth IRA if they wanted to. So then it becomes taxfree for the kid. So listen, the main point here is understanding how do you hire your kids? Make sure you hire your kids the right way. Follow the laws that are out there. Follow the processes out there inside of there.

52:32 Okay? So hope you guys enjoyed this. It's been almost an hour now. I love these Wednesdays going live. If you have questions, bring the questions in. I'm going to answer more and more questions with you guys. so bring the questions in. Every Wednesday, 3 p.m. I'm going to go live. I'm going to teach a new process, a new strategy. I'll show you see if I got some of the strategies up here. that's the family management LLC. I told you guys about you got to use a family management LLC if you don't want to pay tax inside of it. Here is all the different types of strategies that are out there that you guys can use that I'm going to teach on every single Wednesday. I'm going to teach a new strategy for you guys on how to create generational wealth using the American tax system following it straight by the law. Don't don't deviate. Don't listen to these people that are trying to live in the gray area. Screw that. Just follow the tax law and you can create generational wealth because it was created by the wealthy for the wealthy and passed in Congress by the wealthy. All we got to know is how to go play it and then follow that right there. Okay, you guys make sure you subscribe, like, follow, you guys share this. We're going to blow this thing up going live every single week. Eventually, I'm going to start bringing some guests on for you guys as well. Right now, I'm going to go live myself every Wednesday at 3 p.m. I'll bring some guests on later and we'll teach how to create generational wealth every single Wednesday. Wealthy Wednesdays is what we call it. I'll see you guys next Wednesday. 3 p.m. Eastern.

53:43 Like, follow, subscribe. I'll see you guys next Wednesday.