today we talking taxes and we're talking taxes because taxes are my favorite subject they became my favorite subject when i paid way too much in tax when i sold my company and i was so happy and so sad at the same time today's guest had the same problem he sold teachable for over two hundred million dollars and then decided you know what he's gonna go on a renegade to make sure that no entrepreneur pays more taxes than i need to we basically invited him here and he was like you i could talk my story i could talk about my life we were like gotta dude talk about taxes i feel like i could rule to world i know i could be what i want to from at all in and like a days off on a less track welcome to the show man and it's a long time coming yeah i'm excited to be here it's weird how have now accumulated a lot of specific knowledge and this one kind of very narrow topic and i'm excited to shared and the summary of your story and we'll talk about a little bit later in the episode we wanna talk about tactics summary of your story is prodigy entrepreneur new had a bunch of stuff started in college you started a company called teachable sold it for two hundred fifty million dollars when you were thirty one that was like a courses business now you've got a new thing was called carrie now oh no what's called now called carrie and it's like a four zero one like a subject four zero one k thing yeah absolutely it's basically the bigger vision is how do we help people build wealth by saving money on taxes and the solo four zero one k is our first product but yeah that's the story the quick sort of other bit is i did not grew up in america so i knew nothing about the us financial system yeah the country i grew up and never had taxes taxes were just not a thing that existed in oman where i grew up so the first time i heard about taxes but i was twenty one years old i was wow you actually have to give money that you earn this is crazy but yeah you got most of this story by the way before we talk to taxes i know we're supposed to start with the taxes thing yeah you you you've earned your seat on my first mail you made your first million bucks when you were like twenty years old right with something heard funny what can you tell that story can you tell the fast version of that story yeah absolutely i was in i was in college at berkeley and at the time facebook release the facebook platforms so you could you know send gifts to people answering quizzes and all of that and i built these viral facebook applications starting from when i was eighteen all the way to twenty and it was really fun i mean you know we created a personality quizzes like you could answer a few questions and find out how good a kiss you are or which friends character you're most like if if you have to take a facebook quiz to figure out you're a good kiss here you're probably a ben kiss right well the the funny thing is i'm not i'm not gonna name nathan what of the facebook founder has actually took that quiz multiple times and i know that because you get their facebook user id and the database so user id number not gonna tell you which number it is is was in our database and we're like wow this person really wanted to know but anyways yeah so we created these personality quizzes and then friend quizzes and stuff and yeah i'd you know millions of daily users was able to make a million dollars before us twenty one which is pretty cool yeah that's amazing so you've you've earned your your street credit here for us on my first alright so let's talk let's talk taxes if i'm an entrepreneur what are the biggest things that i need to know about taxes one of the things i should be knowledgeable of and doing in order to save money cool the first thing i think everyone should know even people who are not entrepreneurs yet is the us tax code is rigged in favor of business owners it's very intentional but you can look at a country's tax code and learn a lot about what it stands for and in america two things stand out the tax code is rigged in favor of people involved in real estate it's the most tax managed asset class and two people who start businesses so the first thing i tell someone is if you are a full time they'll to employee somewhere if you are not yet a business owner consider becoming a business owner since it is the single biggest thing you can do to optimize your taxes like that is just written into the dna of this country and it's something that i never realized until started digging and was like wow there's the playbook for what you can do to pay less taxes is ten times bigger if you are a business owner so it's rigged in favor business owners and real estate and most people kind of ignore this i would say like the advice i got growing up was you know you go to a good school so you can get a good job that's what winning was and and even the advice around money which was kinda like you know you know try to try to get like a a raise maybe ten percent you know try to save but the hard part about saving is that your biggest expenses taxes right your your your taxes might be thirty to fifty percent depending on where you live and and how what bracket you're in that's your biggest expense and that's every single year off every dollar you make unless you're able to shield it with some of these these things you're need talk about i think i i don't know if you remember but warren buffett back in the day had a famous quote where he's like my secretary pays a higher tax rate than than than i do right yeah what an asshole you're insane i think i think the issue though it's not an issue just it is what it is if you have w two income i'm almost positive there's close to no way that you can reduce that your tax liability other than maybe like minor percentage points you're like the the you can do crazy stuff by using your spouse you can have your spouse become a real estate professional so then you as a couple can write it right off real estate depreciation but you have to get pretty fancy to do things with w to this you're right there is a universe of things just much smaller and then like let's say i make a million dollars a year as a a business owner like i i i actually don't know what the savings can be i know with qs bs i saved a huge sum but i don't know why i could reduce my my taxable and buy as a business owner but i know it's a lot whereas the w two it ain't well let's tell the w two story real quick because i know people in san francisco they have high paying jobs at like in a a facebook or google and you know they're marrying somebody and they're like hey guess what honey you're a real estate broker now they're like what i don't wanna do real estate you want you're a real estate professional now it's like they have to get get the status and then they're buying airbnb b's in order to offset their their w w two income we literally say that like tongue in cheek right we have a presentation on like how do you lower your taxable as a adobe two professional point number three is marry a real estate professional like it it's like tongue in cheek but it actually it actually one of the very few things you can do as they'll to professional but i don't think anyone pays more in taxes than highly paid tech employees like in terms of tax bracket that's about as bad as you can get you know two people in san francisco making four hundred thousand dollars a year together cool you're paying half of fifty taxes yeah and it's before it even comes to you it's just taken out of your paycheck before you even get it alright so let's say we are an entrepreneur sam mentioned usps i'm guessing that's gonna be number one on your list because it's such a huge advantage explain what it is and then explain the kind of beginner level and then the advanced level version of doing it cool so four big letters in the us tax this may be the single most generous tax break available today it's called qs bs qualified small business stock this is insane so when you look at all these tech companies being built and sold the reality is most of them are going to have shareholders that pay very little in taxes and that's because of what's called q sbs which roughly says if you hold shares in a c corporation for five years you pay no taxes on up to ten million dollars in gains it applies to founders it applies to employees it also applies to investors and it's such a generous tax you're getting to up to ten million or ten times your basis whichever is point it's a great point it's either ten million dollars or ten times what you pay for the shares as a founder it's most likely going to be ten million since you buy your shares for almost nothing but this is this is massive like when i sold my company i live in new york state and in new york state even new york state doesn't charge you taxes so i only had to pay new york city taxes on the first ten million dollars in gains and this is just by size of benefit it's absurd right because you think about w two employee is getting taxed so heavily and here you have startup up founders employees investors paying nothing on ten million dollars when they sell the company sean i think california is the only state that doesn't recognize qs usps there's six there's actually six or seven states there's a couple that parts don't recognize it forty three don't forty three you'd pay no state taxes as well if you're not paying any taxes on ten million dollars in gains you would normally otherwise pay long term capital gains which would be roughly twenty percent plus there's like a three point six percent something extra fee so it's like you know basically two point three million is what you get net extra correct that's that's the actual in your pocket new york substantially more don't forget there's another million plus in new york taxes that i'm not paying okay cool so and then yeah so for california you'll pay another thirteen percent on top if new york if you're in one of the to sbs you know free states then you're saving another let's say million to one point three million in in additional state taxes so about two and a half to three and a half million dollars in your pocket yep or or i've got a friend who had a company who is it's i won't say publicly but an you and i are very close friend him who had a company that was i think an s corp he converted to a c corp at a thirty million dollar valuation and so eventually when he sells it will be ten times thirty so three hundred million dollars so that that difference which is i can't do the math but two two two hundred seventy million dollars gain that will be the tax free portion i was i was saving that for the advanced strategies but yeah there's a there's a lot you can do to truly like multiply this benefit so i heard about the ten million thing and i was like wow this is insane like really really cool but then i found out that the limit is per shareholder per company so where this gets interesting is if i give some shares to my mom my brother my dad each of us now have our own ten million dollar limit so it's a family we have a forty million dollar limit or if you go down the estate planning rabbit hole which it's a little complicated but a certain point you know hire an attorney figure it out you can set up trust i set up trust for of my future children trust for charity and each of these trusts get their own ten million dollar benefit which multiplies this theoretically as many times as possible personally so what happens if you what if you set up for three feature kids and you only have one feature kit you can basically set up like the so what i did for instance alright i have no kids is you can set it up for future beneficiaries as well so it's any of my future children are entitled to to have the trust what's important is it's an irr irreversible gift you can't take it back your yourself table lens if you don't have kids now it has to go to either my parents my brother i've named a bunch of different beneficiaries so there's like a line if there's like a there's like a order order bunch of corporations yeah yeah you're like the only brown parents who are like oh i'm it's okay if you don't have children it's okay as long as you're happy as long as you're happy it's is i wish i wish honestly that would be it would be worth the ten million dollars to not be harassed by my parents so and so this is called like stack trust right like this this called usps stacking so couple of things i didn't realize the first time around that i'm doing differently this time the first time around i was the only person to hit the holding threshold because i didn't realize how this works but this time around i've given all my early team members shares instead of options so they can start their clock ticking that's a really important thing that a lot of people don't realize is you have to own the shares for five years not options the way that companies get around this right is you do the eighty three b election right or you basically buy your shares at the super low price mh we should to explain how archaic the irs is so there's this thing called the eighty three b which i don't exactly know what it means but it's basically you may whenever i start a company i have got write check to myself for a hundred dollars or i write from sam to the name of the company inc and i have to mail it to the irs and i like hand right on it and i write a letter to them and i say this is sam par i'm writing you one check for one hundred dollars and i'm literally running this up by hand will you please send this stamped envelope back to me that has proof that you received this is literally like the tooth fairy dude yeah it's like the tooth fairy and you write the eye when you write the address and you just write like irs like i put forgot word it is it's california and by the way you have to do this three weeks i think or ninety days days thirty days thirty days thirty days after you do this they have to get it and so right when you file the company you've gotta run to the convenience so i get your stamp envelope bit hurry up to do that you write this out and somehow this works and what's even crazier is the irs won't check on you to make sure that you did this right unless you get in trouble and you have like save this like envelope like gotcha you bitch i got the envelope i filed it away like it's crazy how this works and if you don't do it you have to pay millions of dollars in taxes like it's a very hundreds a millions yeah it's a very high stakes document yeah it's a high stakes document and you're like have to write it i remember like faking like i gotta make sure my seven is perfectly clear so that's not a t or like it's like a very stressed thing you had to write it it up by hand it's crazy how like cake it is i i didn't understand this rule but our cfo was like hey did you do your eighty three b and i'm like no i was be before like no no you have to do it thirty days and is i was like okay well can you just like you know where's is the form case can send me the link she's like no you have to print this out you gotta go take it to the post office and i was like oh man and she looked at and she's like you don't do those types of things i like no i don't run errands and it's like that i got i just simply don't i'm out of the postal system like i don't mail things i don't check my mail like i'm out of that whole system in general yeah you're like i'm gonna say do i like fifty forty what or do i lick it's i'm like licking the form and i'm like i i i finally have it and i realized i'm on day thirty seven and so for the next five years it just haunted me i was like i didn't do that goddamn form and then when my company finally basically failed i was like they matter i was like it didn't come back to bite me because i was for five years had been dread that my lack of you know belief in doing shit like doing annoying paperwork things was gonna bite me and i was so happy be when that one entity failed and that the other entity was the one that's sold i was like this is this is amazing but here's the crazy part is you can claim you did it in time right so technically what the document means is it says i am like tax me on what the value is today i'm choosing to be taxed upfront speed but if not for signing this anytime your company grows in valuation you could theoretically be liable for taxes can you imagine what a nightmare that is like let's say you raised a series a a series b a series c yeah you wouldn't not you wouldn't have money you wouldn't have money but you'd have a tax bill it's like really really bad so there's a dark side to this which is that sometimes if you join a company later like i think bolt got was pretty popular this happened at bolt so bolt was like hey we are lending our our employees money to buy their shares that was such a shit show had they like five billion or ten billion dollar valuation and they were like see this is great because now they're gonna start their clock of owning the shares but people were like okay so what happens if the valuation goes down and they're like now not only do my shares become worthless i owe the money for those shares at that premium valuation and people were like this is not gonna end well the full story hasn't played out you know bolt is is it's still going so it's it's unclear exactly what's gonna happen with that that's trending in the direction like that was a bad idea i think it's undoubtedly be a bad idea it was a twenty twenty one valuation like tens of billions of dollars like it's it it's not good and people saw it coming and it's it's really bad when you now like i'm i'm hoping they forgive those loans because otherwise you have not only you're making nothing in equity you have you owe eighty hundred thousand dollars just for working there at our company our investor was like here's the promissory note you don't have to come up with the cash and we'll forgive this if this ever happens i was like can you write that they're like no we can't write that down as like you know just trust us i'm like okay i do trust you and they did didn't if they if they were to write it down it's taxed to you as income so that's why he's exactly right that right yeah yeah alright i wanna go to the counter so we got friends who you know they're like oh the number one thing get out of california ish sc come to come to texas no no forget texas you're still in the federal paying federal tax come to puerto rico i'll go you think about that should you should i move to puerto rico to save money in taxes according to so so to me this gets to the meta level right like why do we have money what is the point of money and i think there's two camps of people camp one is like they look at their life as as this vessel to make as much money as possible and other people look at money as a tool to live the life you want so i very firmly fit into the ladder camp where money enables me to live the life i want yes i don't wanna pay more in taxes than i have to and you know game find the tax system is also fun just because like i'm a hustle and it's kinda of fun to do but i wanna live the life i want and to me that means living where you want so i i would i would personally never ever move somewhere just save on taxes well you've done the exact opposite you you you live currently and you live in the highest tax place in america i believe correct and i'm totally fine with that because again like money names me to give the wifi i want i just tend to think and it's ironic because you know running a company that helps people save money and taxes the kinds of people who spend all their life worrying about taxes or some of the happiest people i know so i don't ever wanna get to that point and sometimes when you move to like you know a utopia with zero taxes you're surrounded with everyone else that move there for that reason that's your group your friends are other people who hate taxes it i don't know if if you know that's the social circle i won dude we had john du on the pod do you remember this sean and we were talking about taxes and he was like bragging about how he moved to puerto rico or something like that dude he was glowing i thought he was pregnant i was like wow this guys so happy he moved to puerto rico and he was so happy about it and anyway and then he started making his front of meat that i didn't live in puerto rico do you remember that he was like salty me and i was like john we're not close to up you can make fun of me that hard and it's a podcast you know i think that the thing you know a lot of people who listens podcast i said how we all share one goal probably we've we've made different goals one we share is we all want financial freedom and most people think financial freedom is oh i'm free to buy what i want do what i want is the financial leather jacket you're a financial badass now alright cool but i think the real financial freedom is when money doesn't have a hold on you so it's not about exactly you being able to buy and do certain things is that money no longer dictates your decisions money does not control you or or make you do things that you don't wanna do and so it's it's more of freedom from money not freedom to spend money you had a point on on this thing i want you to explain and it's really a direct attack at sam you said the point of having money is to not worry about money if you're wealthy but still stressed about money which i see all the time you're missing the point alright sam look this man in the eye and anchor tell them i don't i don't blame i don't blame him if if it's him or anyone else because these are beliefs we form very young in life like at to some degree they're not even fully conscious beliefs so if they're not conscious beliefs you try and sort of program it but yeah i have so many like super wealthy friends friends you know with hundreds of millions of dollars who are stressed about the pursuit of more money they are a hundred million who want to be billionaires or something and and again like you said it really well right the whole point of money is to be free from it and and do what you want like to me the best thing i bought with money was being able to say no to a job that would have paid me tens of millions of dollars in equity because guess what i don't need it anymore sean so look i let me defend myself i came on here and i express my belief on money and how i'm i'm fearful of it and how i wanted to make me happy it doesn't but you did camp m mfa you told me out joe gu joe has worth ten billion dollars and you told me this crazy story to blew my mind about how happy is and everything this and so i radically changed my opinion on money and happiness and now i realize i just need ten billion to be happy then that's all i need is ten billion so like my opinion has been changed it's no long about scarcity mindset that if i have ted billion i will be happy there you we go i'm glad go i'm glad you we go you've been in enlightened alright longer give me a couple other quick hot takes before you you're gonna make fun of sean now which is there's no true alpha yeah let's frame it you said there's no true alpha in investing i realized that sort of a fool game that's why instead i realize i can i can optimize my tax setup and make more money that way than try to beat the market as a guy who has been attempting to beat the market for quite some time now successfully how's was happening going yeah wait answer the question what are the wins and what are the losses and we're not talking about private we're talking about have you been trying have you did you try to beat the market in terms of public too he looks kinda sheep she looks how sheep she's he's like that we're trying to make me cry what's happened to here so no no no i i i don't know i actually don't know if you pick and choose stocks i know you pick and choose private companies but that was like your job i agree that most people cannot beat the market i do not agree that nobody can beat the market over it's a great time i know that that's an unpopular opinion and i know that you know the famous warren buffet bet i know all those things i just refuse to believe that it's it's not a bell curve so i think the people that beat the market spend all their lives doing that with their own capital right like think about jim simmons right this hedge fund is returned like forty percent on average they're not taking outside capital what i think is a little bit of a scam is a lot of the financial services industry that tries to promise hue outs size returns who promises that like like like what's that ser hedge funds because i i've never met a financial adviser that be dumb enough to promise i any actively manage fund right so yes hedge funds are a big big sort of thing any active stock picking fund i mean there's a lot of stock picking funds that charge you one to to one percent a year and their portfolio they say will outperform or whatever so does every real estate fund venture fund basically like anything that charges outs outside fees anything that charges more than a vanguard on that's crazy that that people like buy into that though correct so our our thesis is always like okay fine i do think better tax strategy can actually create alpha alpha as a you know finance term for like you will outperform and using that tax alpha to just put more dollars in the market i think is a smarter approach and the approach i like and you know i'm taking with my money as well out of a hundred percent of your net worth is one hundred percent of it in the p index or so not like i have i have a lot of it not in the s p index but that's my fun money i think there's a good chance i don't outperform and a lot of it isn't private private investing which are funds that i own but i think i'm the only person i know who has a fund as big as mine and charges no management fees the average venture fund charges twenty to twenty five percent just in management fees and the average person does not realize that we charge zero percent sean do you know how i tell tell you that i don't buy individual stocks yeah i real i would looked at my portfolio the other day it the first time in a year i looked at it and i realized i was wrong i've done it twice or three times the company that i did it on what's play playboy i had read i read their annual report yeah you can't just control their magazine their annual report dude that's all their monthly calendar yeah but yeah actually they're annual report they have lot of photos yeah and oh jenny oh jenny mccarthy picture holding up the balance sheet that's nice i i did that because i was like oh look like they're prop their their their real estate ass is worth more than what they're trying to sell the company for and i was like that's smart i'll do that did not win on that one so loss on that one also did coinbase at the ipo oh go and then i sold it two weeks before it popped like three months ago or whatever whenever it was like four hundred so i've i've done i've i've done two no you've also done i with hubspot you got hubspot stock you could have sold it diversified you decided to hold that is a decision to buy that's correct i and and with airbnb yeah correct the two biggest holdings in your portfolio so you do it too we all know those aren't my those aren't my two biggest holdings the my index funds are significantly larger but yeah i have done it so i've done it as well so i like on i have my fun money thing it's just that i happen to have a fun money stash that's eighty percent instead of twenty percent yeah i way look at the end of the day as long as we realize we're doing it's fine right like i i i think we also learn this lesson ourselves in twenty twenty one i thought i was a damn genius i was like these index funds are stupid my portfolio is i'll like three hundred percent i should just be a stock picker for life and yeah then you come back to reality and didn't realize what was the was was there a day where you're like ugh that was the way it was many because again if you remember there such an insane run up for a while you couldn't lose every company was up a hundred percent day on date it was when investing was the most fun it should not be that fun and then yeah there were numerous days of like cool i've lost three hundred thousand dollars today cooled down half a million dollars today cool and just that happening happening repeatedly while the s and p five hundred kind of just kept chipping away and growing and you know nvidia comes out of nowhere and all these stocks that i only held because it had an index fund otherwise i had no exposure sean let me and let me tell you this crazy story about a tax stuff that i learned this is like one of those tax hacks i'm not the biggest fan of tax hacks yeah this is actually a good one i met this lady she was speaking at one of our events and i don't wanna say her name of her company but she was on the commercial for this credit card company because she loved the credit card so much and her business was doing let's say fifty million a year and she was putting a lot of of it on a credit card and it was giving her three hundred thousand dollars a year of either points or cash back mh and according to the irs a cash cash back from a credit card is considered a rebate correct and i believe you get up to i don't remember what it i don't know what it is now but three years ago when she told me this she said it's three hundred thousand dollars a year of of rebates you is that do you know what it is nowadays is it same something like that depends on the card itself but yeah oh i i thought it was by the government i thought it was limited to the government it must been limited to the credit card she was getting three hundred thousand dollars a year of cash back of which she was like that's my salary i don't take a salary or i take a meaningful salary for my company and i'm living off my credit card points and that was pretty wild did you know you could actually pay your taxes at a credit card and it's for some people actually like arbitrage that where again this is insane i would never do it but it's just i just found an interesting you can pay your tax in the credit card there's not a very high extra fee and then in a lot of cases you can actually end up slightly better it's a very painful thing to david can david house did it david h sold his company grasshopper i think for two hundred million dollars and he paid his taxes on his am and he called am and he told him one he was gonna do and so i don't know i don't remember what the bill is but let's say twenty or thirty million dollars of a tax bill he paid that on his am and he goes yeah i've got i just got you know a couple decades worth of flights that's that's but that's that's the other thing with credit card points is once you learn how to use them for travel the cash back feels less good like yes the cash back has a theoretical value but there's so much more valuable applied to travel once you kinda learn how the game works what's the smart way to do it okay so the thing you always wanna avoid is never spend the points on your credit card website that is the thing almost everyone does and you lose a ton of value there i do that yeah so what you wanna do instead is create an account within an airline like i do it emirates it's a lot because i fly internationally or with air france k the international airlines are the best look up a flight on their loyalty program do the transfer it takes like thirty seconds and you'll probably save seventy percent points right there no way seventy percent yeah i've i've tested this a lot because what these you don't like to do it says transfer like there's a tiny link that says transfer partners and you have to that's where you send your points you never spend it in the thing gonna save so i've spent i've spent hundreds of thousands of dollars on flights over the past ten years through chase might chase my his card i i found this out two years ago life changing yeah absolutely well got you got hose bro that it's so bad to it sean yeah i paid this guy moe points he's like this guy who call you he'll teach you about credit card points or like he'll he'll just be like what's your situation here's what your credit card setup up should be and here's how to use it and so he showed it to me and i was like wow that was like the best three hundred dollars i've ever spent because that one session which i thought three hundred bucks to do this call that's kind of a lot of course i mean the the savings and just understanding how to book the flights better because he's like this is luxury travel you you you wanna travel first class all around the world here's what you need to do and from for me i have a e comm business so we're spending millions of of a year in ads so he's like you need this am x gold because it gives you four x on every facebook point that you every dollar you spend on facebook or google and so you're getting four x multiplier he's like but then you gotta transfer it out and then you gotta use this website a website like points at me or whatever to be able to search for points across all the airlines yeah i think just transferring out to the eighty twenty if you wanna tell someone in one sentence how to do better transfer your points out do you have any more of those little little tricks what else you got your hat come on pulls stuff that's what awesome solo four one k so that's the one that you have on here that i don't know anything about what is a solo four one k so solo four zero one k this is the first product we built and i had an llc for a while i was earning some you know some random money and i saw i found this account called solo four zero one k which is like your own like your corporate four zero one k but it exists exclusively for you and with that you can do a really cool thing so one you can put in up to sixty nine thousand dollars a year typically if your max out your corporate account it's very hard to hit the max because your company match is not enough but with the solo four zero one k you can put in sixty nine thousand dollars a year get that as a tax deduction the second thing is you could do the whole thing as a broth contribution so if you're read about peter t and how he grew as you know billion dollar roth ira traditionally with the roth ira you can only put in seven thousand dollars can you just tell peter to story real quick how did he use a roth ira to make billions oh man this was both genius and kind of possibly illegal but what he did is he bought his founder shares at paypal with his roth ira so he spent like two thousand dollars to buy paypal shares that became worth twenty seven million dollars when paypal soul and then he had twenty seven million dollars to just make all kinds of investments he allegedly bought his like facebook shares ten percent facebook from his roth ira so he gonna turn fifty nine and a half in a year and he's gonna have five billion dollars tax free which is pretty wild the wild part about that what you just said is that peter t only made twenty seven million dollars selling paypal yeah yeah i can i realize it me and peter taylor sort of we're sort of you know apples and apples i guess yeah you know alright sam like but the muscle and paypal netted the boundaries very similar amounts of money that's kind of amazing well what what we don't know is if peter t had other shares not in his roth ira which is quite possible actually not damn knew too gonna be true what's just staying y'all probably not he's gonna show that to me for me to change my opinion yeah yeah yeah i'm not gonna let facts get the way of being beating peter deal yeah what about a can a person have more than one four zero one k yeah so that's what's cool is if you have a full time job any a side hustle you can have a solo four zero one k for your business while it's still contributing to your employer four zero one k but because it's your own four zero one k you can invest it in anything right your employer four zero one k has like a list of very specific assets with a solo four zero one k you can invest it however you want if you need liquidity you could borrow up to fifty thousand dollars from it it's simply the most powerful retirement account in america but it's not available unless you have your own business isn't the normal four one k kind of a racket like the thing where they're like you can only buy these these funds using our four one is that because they get a lot of the half fees no it comes from the four zero one k provider the long answer is corporate four zero one k plants are subject to laws like employment retirement investment something at and those those acts are just there to protect employees but as a result employers can do things that help them like their limits on how much you can contribute to yourself if your employees are part of the same plan limit investments but if there's no employees go crazy so the solo four one k you could put that because you like put in real could you put in anything is it like just if yeah the only thing you can't do which is where the whole peter feels thing may be slightly illegal is you can't have a self dealing transaction so i can't invest in my startup up i can invest in sam startup that's totally fine but i can't invest in my own company i can't invest in my house but i can do commercial real estate gotcha okay that's self dealing for him is it if you that's just a a major angel investment he was the founder or two which is why it's sketch he was the founder of paypal remember if he was just an angel investor fine he was was too much he he might you know we might might be an accident for it say you keep talking like this out loud he's got five billion dollars writing on nobody paying too much attention to this yeah i mean look so people because know people ask us all the time can i do what peter t field did and i was like look it it may be fine if you don't own over fifty percent i wouldn't because again like the thing with the irs is a lot of these things are not clear rules there are rules written in a certain way someone interprets them somehow the irs challenges it sometimes the irs loses in court and that's how loopholes are established right so so like the problem that i have with my my personal bookkeeper or accountants my cpa like they're pretty reactionary so it's like at the end of the year like we are dealing the problems and then everyone makes the same thing where they say next year i'm doing this right but i'll worry about it like two or three months and then two or three months becomes like wait later the real new year's resolution to be honest is the three weeks after tax after you file your taxes is the the real new year's resolution to be honest candidly that's the problem we're having because right now we're realizing we have to educate the cps a lot and almost everyone that comes to us it's the buy sample they do not like their cpa and we don't do that yet right like maybe there's a world but who do you have like do you hire like a tax strategist who is like more offensive and do do they would they work in tandem with your cpa what do you do so for me personally once have you know gone down this rabbit hole we're doing this internally we have a program where we help people with a tax strategy part we don't do tax filing i'm basically using our our own services but yeah there's a big part that's tax strategy that is not the person signing off your tax return should they be separate the way the world is written today the like just laws and stuff it is because the person filing your taxes typically doesn't do that much strategy it's sort of just why like even if let's you wanna set up a trust you need a state attorney who is different from your financial adviser who's different from your accountant and to the average person you're like why why can't one person do this and those are the kinds of things worth thinking a lot about like how do we product this in some way shape or form while still being compliant because compliance is a big big big part anytime you try and build these kinds of businesses so i was so you know stressed out last tax season you know then i was like okay how am i gonna do things differently this year so i i was like i'm gonna treat this like it's it's my own business it's its own product it's its own company i'm starting and so i was like i'm gonna go on a road show and i'm gonna go and basically see who's out there for you know go give me your best pitch and i created a data room i was like this is my tax setup but i put all the time like here's a flow chart here's my prior year's returns here's what here's what i paid in taxes here's what my expectation is for next year i was like here's a turnkey data room so i don't even have to have a phone call with you i'm like i have the phone call and i on the phone call i tell them exactly what i want because for some reason i would like to go to these tax and i think it's a insecurity it's like because i don't know as much about taxes as you i kinda defer everything and i almost become like i work for you and then i'm like like splash water in my i'm like don't know i'm paying you hold on wait this is backwards yeah you work for me i forgot yeah why am i pretending like i i i have to tip toe around even asking you for what i want and so i go in and i'm like i felt this way i never wanna feel this way again i want somebody who's gonna take care of everything i you know everything from him i want you to literally i want you to be able to pay bills if i need you to up to filing my my returns for all of these you know i got twelve entities all twelve entities and i need you to do strategy and i need you to be coming to me every you know every quarter with proactive suggestions about what i should be doing that's what i want who can provide me that and i went on tour basically and it's such a better way than i was doing before i highly recommend this for anybody who's like has enough income and kind of business value where that makes sense to do which i don't know what that number is probably different for a lot of people it wouldn't have made sense sense for me three years ago to do that it's like whatever you're paying you know a couple hundred k taxes or you know even a million dollars in taxes probably not worth that much effort to go do but as you scale i think it's important to do that i'm realizing now yep and i also think it has to be a collaboration it's very hard a lot of people are like oh if i had a tax guy that would solve all my issues but a lot of the best strategies they're like long term lip say you want to start a business to get acquired five years later that's the kind of stuff that you like need a partnership to be discussing and have someone you're working with somewhat least quarterly right because there's a lot of this stuff that like this the more you know the more you'll push them the better the things you'll achieve i'm actually gonna do that data room that's the second thing that you've said in the last few months that it's like gonna have a change in my life that's really smart the first thing or we talk twice a week on this podcast that's the second thing in months year that was good yeah yeah well the well like a lot of the stuff you say i'm like i'm either already doing that or i don't wanna do that or like i'm not sure if you're right or that's only okay but the you said that data room big is actually a really wise i was wise way to look at it the other thing that you said it was it hit me i was like that's brilliant and it was when you were selling one your your house in san francisco you so like i forget what real estate agents bake six percent but you're like but six percent is per not the that the difference of between two million and two point two million is like six percent isn't that meaningful for the realtor but it's really meaningful for me as the owner that's a six figure difference so i'll just give you my real estate agent i'll tell you hey if you get anything above my asking price of like two point one which is my happy number but if you get anything above that like two point two i'll actually give you like thirty percent of the fee so i'm selling a piece of property now and that's what i told my i i just right after of the the pod i wouldn't and call it right away go hey how about this yeah i didn't do thirty percent that's crazy but i did more i i did more than the six so you you messed that one up a little bit but that's okay well but but but the thing is like even i i don't remember what think you said like additional dollar right each additional dollar passed that is like yeah you said like ten percent i think you even said like you would buy this person a broke bag you said something like crazy i a negative at like two no no i said and if you don't get me the the price that you comp me when you when you won this listing okay there has to be some incentive or dis if you don't live up to your word what real estate agents do is on the way in they're like will you oh we're gonna this will be great i've done such similar sales i think we can get you what do what price do you think oh yeah i think we can get you that price and then afterwards two weeks later they're like oh just the market is so you know right now you know the thing is blah blah blah and then then then they're just nagging you and they're trying reduce your expectations so that when an offer comes in you'll take it whatever it is because they just wanna turn the deal over yeah right because they're they're getting three percent on two million bucks they don't really care if it's two point if it's two million and fifty thousand or two million i they'd rather just get the deal done and so i knew that they do that naked so up upfront i said when he's promising me the world i said alright cool but if you don't do it you gotta buy my wife this bag and he was like laughing and i was like i let it sit there for a second he's like oh you're for real i was like yeah he's like okay deal and then literally when we were going we were coming to do the deal he's like i really don't wanna buy her wipe that bag let me go back to them and see if i get more and he got an extra like thirty thousand dollars after that you know that last comment sorry appreciate so the reason why i broke my frame was because these are like a realtor is like you you think like well for some reason you think this is just the law or like there is no negotiating like this is how it's always been done and i must do it this way i'm just and and when i was thinking about i was like no that the way that he actually said is one hundred percent better i didn't realize that i could like question them right you know what i mean and there's actually like what's crazy is there's people who do that with the irs as well so for example sean parker i believe is the guy who created either created or he was important with helping create it with opportunity opportunity zones in real estate yep and like i remember like reading about opportunity zones and i just be like oh sean parker created it i'm like wait what and i guess like the story is that he was young he was still in his twenties and he convinced the government that it's wise to invest into opportunity zones which is real estate that's in areas that are impoverished or or we want them to be better and i'm like how balls of that kid to go and convince the irs or the government that this is the right move and and i love like stories like that and that that was it was a wild story let's do a couple more before we before we finish so you said owning real estate with your business what's this one yeah so another great example right so sam said okay what if i have a million dollars in business profits like what can i do to lower my taxable bill just buying your office building or if you have a physical building connected to anything you're doing whether it's your office whether you have a retail location you own that real estate you can use depreciation to offset twenty thirty percent of the purchase price as a business loss that year so which is why you'll see a lot of old school businesses actually own their properties they're not just renting since you just save so much money people take this you can also do this with cars and you know buy a vehicle attached your business you have the whole like insanity where you can actually depreciate more of the purchase price if your car weighs over six thousand pounds which is insane and why you have the whole like g packs write off me but yeah only real if their business is massive that's like the classic like immigrant story which is like a mom and pop like came here from vietnam and then they bought they just they eventually bought their corner store building and then they the the building becomes worth significantly more than the corner store and then they bought their new wagon and the g wagon and yeah it's like again tight like business owners were already very favored as we're real realistic estate developers but when trump was in office he actually took it to the next level with the tax cuts and jobs act that basically doubled those benefits a given an extra benefit to business owners where they get to deduct twenty percent of their income called qualified business income deduction and it allowed real estate developers and and you're boy nick k talks about all the time to do what's called bonus depreciation and depreciate twenty to thirty percent of the purchase price upfront so even though the code is already written this way there's always new incentives to further make it even better for business owners and real estate developers let's do some of these other things you you you had a good thing i'm happiness i wanna read it to you yeah basically you were like happiness it's not that complicated what is the kind of what are the four things that that actually matter when it comes to happiness yeah i mean look after i sold my company i spent two years traveling chilling you know was like wow you know we spent all our lives waiting to like retire what if i just lived the retired life now and a lot of it was like okay fine what are my happiness triggers and i found for me was very very simple the two two like critical things for like my environment or plenty of time outdoors ideally with sunlight like constant movement like sam didn't believing me when i told him i walk twenty thousand steps a day to produce receipts doing worse worst this for the insane amount but isn't insane amount three and a half years it's just it's just what keeps me it keeps me making my my trailing ninety days because we had the baby was thirty one hundred steps a day yeah that me that's misery like i i just need to i need to be in motion what do you do to get those twenty thousand steps like do you have did you like replace meetings with walking meetings or something like what what did you do in your walking meetings phone calls like a big part of my routine playing sports every day but again like it's winter here and that's why i hate winter because like now i'm not getting my outdoor time and my walking has come down a lot but yeah so happiness triggers movement being able to spend time outdoors having a higher purpose for me that's work with meaning but for other people you know religion and it's just something that is like bigger than themselves and four is like relationships that count i can like simplify my life to these four components and like like that's all it takes for at least made to just be very very happy are you dating anyone no right now you probably crush it though in that department right yeah i look i beat again i i enjoy i enjoy being single but at the same time look i'm thirty four years old and the parental pressure is ramping up we'll we'll see how it goes you're like i can defeat the irs but not not the parental pressure yeah how old were you sam when you when you and sarah got together she was twenty two and i was twenty five a damn you were young it didn't feel that way because i went pretty crazy between like nineteen and twenty four and like i i i i did some fun things yeah i mean yeah i've actually drank a beer with you there's not a lot of people at this chapter of your life that have done that but yeah yeah that's true yeah that's true and i had a lot of fun i did this cross country tree motor cycle trip and after i just sold a and i didn't sell for a lot of money i had like fifty thousand dollars in my bank account but i was like twenty three riding my motorcycle cross country telling people i just sold my company on tinder was this apartment close or whatever yeah yeah yeah yeah it was two apartment list yeah and and i and and and i just hosted a conference so i had money and like it was i was the coolest guy ever for like eight weeks and then i met my wife like right when i got home yeah but yeah we've been together for a while it's honestly awesome i like i i don't even like talking about this because i remember when we got married we had to go to like and talk to a priest because we got married in catholic church and i was like telling her i like telling the priest i was yeah we you know we're a good partnership we talk about like business and stuff all the time he's like well what about love and so like i don't even like mentioning this but yeah like basically dating someone who is smart and you eventually wanna marry it's actually makes you more money that's not the most important thing but i think like what i've learned is having a good relationship i think actually was the greatest financial decision i made it i mean you're not you're probably less distracted right like people in people with relationships are like eventually like once are kind of more stable i think i remember when i was when i was selling my business i was negotiating with the the dude who like runs general big big private and equity fund and it's like an old school guy it's like are you married i was like no kids no like i don't like that i can't trust single people you have nothing to lose i i don't like it i would feel much better about this deal if you were married and had a family because you're scared you'd be more nervous more scared of stuff you're like for for two fifty million dollars i can get a thirty day fiance right now sir what what do you need yeah yeah so sean when your wife goes out of town are you like me where you're like what the hell am i supposed to do like what do i do what do i do it's three hours of heaven but anything beyond three hours i'm like this boring like this is the sucks things so quiet in here like i started walking around circles like my dog or something i i don't know what to do i wanna talk about one more thing but we have a large indian listeners shit you're welcome yeah thank you sean i feel like everyone in my life is is like all my best friends are indian you're like going on a tear on social media saying like particularly you're like you know east asian people we've got the stereotype of of us not having a lot of muscle in reality it's just because we eat like shit or what what did you say the indian diet is it's just by default not great for building strength for staying in shape and things are really bad right now like an indian person living in north america right we have the same exact like upbringing whatever is anywhere between four to six times more likely to have heart disease diabetes like it's just it's real bad and now that i guess i have more of a voice on social media and people are listening i feel like it's something worth talking about since i don't know like if if if i could have some impact over the next ten twenty thirty years to change that that would go a long way but the hardest part is there's this like cultural like you know ability where i mean people get really mad when you tell them that if every even even now i mean you know if you try tweeting out damien diet is like traditionally unhealthy or something who can all these people in india like getting super super angry about it but ask anyone who's ever i don't know do you ever count macro sam or sean yeah i i i used my fitness every day for like the past four years okay cool so there's not one person who's ever counted macros who will fight the die as healthy like not one it's impossible it is acting actually impossible should track it to to see it yet it produces this passionate response i mean i ended up commenting on an indian cricket is zeke and in indian newspaper the hindu times the ram this like article about we think indian american entrepreneur fat chains like cricket and i had to like turn off my instagram because i got a hundreds thousands of comments like just attacking me my family and everything i stood for because i'm not being like you know a proud indian or whatever so that's hilarious ben of the i went to an indian grocer sam probably don't know this there's actually just like indian grocery shops we have our own separate ceo i go home okay so most of i don't really realize this but if you walk in every single aisle literally is the shit food that you could possibly eat and i went in there and i was like you know jim carrey the truman show when he's like wait this guy is actually like a wall like what what is this what what's happening get here yeah and i was literally like running down there was like what's happening in here this is fried it's all fried why is everything fried literally not one thing and and no protein right it's like fried and zero protein it's fried carbohydrates with some fat and like that's everything and you just see the moms just putting things in there for their kids i'm like no don't do this shit man this is so bad is literally so bad and to the point where i was like should someone create like a just done better for you eating indian fruit that goes into the indian grocery so the you're the only skew in the store that is not like deep fried terrible everything or like you know just canned gl on something like this terrible terrible food yeah and that's not even like the home food that's like the grocery store right so if you're in that's like garbage in garbage out it's like if your inputs are all terrible then the outfits are also gonna be terrible why that they just don't care it's not part of the it's just not part of the culture protein is just not really deeply embedded in in indian food and it it is it isn't small parts but it's just not really a big deal and it's compounded when you live in america i think about it this way i joked about this but like i think the spelling bee is the only time i see indian people on espn obviously an exaggeration it's ultimate bit burned dude that's so good yeah i mean look well i as first that i can say i don't think you can say sam you'd get canceled but yeah like it's it it it's it's really not good what i think is optimistic my generation we're seeing people being aware of this where we're seeing this changing a lot of south asian people right they're always like even like biology was on a podcast he's like oh yeah i did like as well as i could for my south salvation genetics i actually think that's kind of bullshit i think salvation genetics are honestly not bad at all for people who work out and and kinda eat clean and whatever i mean all the indian friends i have that have i've put in the effort have seen results but the whole stereotype i think starts because the diet yeah i've been on an indian food kick lately and it's been all like coconut milk and so i've just not been using that her coconut it's just all creamy shrimp yeah and and and it tastes so good going in but it just feel wonderful and indian parents when they feed you because i'll i'll be like mom why did you give us this and she's like it's is good for you i'm like why is this good for you and she'll be like gives you energy and i think they literally took the idea of calories as like you know calories is like a measure of energy it's like yeah they were like gives you energy this carbohydrate you're gonna have so much energy and i'm like not that's not how it works and then even though they're like oh dal dal has tons of protein it's like know lentils basically it's like yeah but has like you know the macros dollar like twenty grams of protein thirty five grams of of carbs and then you add butter g and like oil to the thing to make it taste good it's like well that's not really gonna help then right like that and dal is your protein in the rest of your meal right all this other stuff and you're like oh four protein have the that's a great example and yeah like any indian people will like the indian express actually ran an article being like yep we thought all had a lot of protein to like the awareness is freezing now but it's it's pretty slow i went to a i don't what's it called the is it a holly or holy a whole a holy celebration and it was non with g is is a guy so like that clear clear butter and then tons of buttered butter chicken but instead of chicken it was cheese okay and then it was like a and then it was like the dessert was fried dough and maple syrup what do you guys called that job with you club job but it's delicious but it's delicious so i don't yeah it yeah yeah yeah it's good for you because it made me smile smiling it's good for you but it it didn't feel great two hours later yeah and here's what's changing though is now indian people are really wealthy there's four million indian people have an average and income of a hundred thousand dollars the wealthiest ethnic group so i do think things will change like you not be a very viable market but now there's a lot of us and it's a very big market so i think all of these business also make good commercial sense if you read in our comment section on youtube the most recurring comment is sean you look great sean or you losing weight sean that beard looks wonderful so sean gonna be a sex ten dollars on iv you can get that anybody can get it that for you you you should go pay five go pay on five you can get people saying how you do look on youtube everyone's commenting sean flex i except like they'll either they'll make fun of his outfit because he wears like a mickey mouse t shirt or they'll be like sean your workout program it's working so well like people are just suck it up film so much well yep thank you and where should people find you where how do they get go and use your product that helps them with taxes yeah absolutely we're called carrie we're at carrie money dot com and if anyone wants to set up a solo four zero one k or just get better at what they pay in taxes check us out appreciate you thank you alright thanks for coming man hey man this is fun i feel like i could rude world i know i could be what i want to from at all in in like a day's off on a travel never looking back