Living a Pre-Tax Life

Welcome to business brain, episode 458 for Casual Friday, June 16, 2023. Greetings folks and welcome to Business Brain, the show where we take different things and we run them through our collective business brain to learn more about them, to get a different perspective on them and have those things help us continue to lead or start to lead our charmed lives. Speaking of charmed lives, two sponsors that are going to help you out here. Number one is FactorMeals.com brain50 brain50 where you use code brain50 to get 50% off your first box of America's number one ready to eat meal kit. And also check her C-E-C-K R.com businessbrain. That's where you go to save 40 bucks off your first background check. We're going to talk more in depth about how to do all these things in a little bit. For now here in Durham, New Hampshire, I'm Dave Hamilton and I'm still out here in California.

I'm Shannon Jean.

Yeah, man, how you doing? I'm good. Happy Friday. I'm happy to be doing my best to use my business brain to live my pre tax life.

Yes.

I used to joke that, well, that my hobbies, I turn my hobbies into businesses because I'm a drummer, right. And I make money from that, which means I get to treat it like a business and I'm a computer nerd. And so like all the computery things that I like to buy, I get to like that's also my business. And so but I used to joke that because of that, everything I do is tax deductible. And in a sense that's not entirely wrong. It's not entirely true.

Hyperbole. But you're trying to get it across. And one of the things that, especially if you're an aspirational business owner or on the fence of starting a side hustle, this kind of thing, this is the episode for you because we're going to talk about all the benefits of not just making money, but spending less, paying less taxes and enriching your life in other ways by using what the federal government and your state government hopefully embrace to try to spur entrepreneurs to start companies.

Right? Yes. Yeah, yeah. We you found this thread from Tax Credit Hunter on Twitter, the Tax credit guy. They call themselves saying owning a small business is the best tax deal in America. And they continue with something I think is really important. Whether it's a 10k side hustle or a $10 million business, earning business income opens up amazing opportunities for tax Savings and wealth creation. It's true. Beautiful business expenses. Like I was talking about before, all the stuff I buy for the things that I like. If I buy drum heads, drumsticks, cymbals.

Correct.

It's tax deductible. I mean, people look at it and they say, is that legal? It's like, yes. I didn't write the laws. Like, I do use. I use this stuff. I mean, it's not like it sits here. And I never use it to. To earn money. I absolutely use it to earn money. I go out and I play gigs and I'm paid. And I have to. You know, that's a taxable event. I have to claim that income, but I also get to claim the expenses. Absolutely correct. I get to.

And you don't always.

Yeah, yeah, yeah.

You don't always have to offset some of those expenses. Sometimes you can have years that take a loss, perhaps take a loss, at least on paper. If you want to continue with your education and you need to pay dues or tuition to professional development. Yep, you got it. That's tax deductible as well. I imagine you have some sort of Internet service at your house that you would need to do.

My business has Internet service, which happens to be out of my house, Shannon, because you and I can't do this show without having Internet service.

That's correct. That's correct. I use my phone in various ways to take photos of products to, you know, answer emails, texts related to various businesses that I own. So my business pays for my phone and my phone bill, you know, so on and so forth, you know, and all of this is not only legal, but encouraged. You're encouraged to do these things. That's why those tax benefits are there. It's true. You know, it's. It's amazing. Especially if you're a. If you're a solopreneur, if you're on your own and you're starting out, there's so many opportunities to put aside any revenue that you make for future and save on taxes. You can pay your healthcare through your business and deduct that. There's just. I mean, there's so many ways that you can benefit this. I just can't stress enough. You could, you know, if you want to buy real estate and own it within your business and, you know, or own it personally and you can lease it to your business. You know, this is where a good accountant is worth their weight in gold. And I would argue that you need one that's comfortable. I don't want to Use pushing the envelope in a bad way.

But I always say that you need, I want an accountant whose tolerance for risk is one notch less than mine. Yeah. Because I, I, I, I don't want somebody that's five notches less than mine because that we're gonna, we're gonna clash too much. It's not gonna work. You know, I need to be able to function. But I also, I certainly don't want an accountant whose tolerance for risk is, you know, five notches ahead of mine either, because I need somebody to, you know, keep me reined in a little bit. Yeah. I want to know, like, hey, I have this crazy idea. What do you think about this? And have them say, okay, yeah, like that works. And me be able to trust. Okay, if they say, this is all right, I know I'm good. But I also need to make sure it's the type of person where sometimes when I throw them an idea, they're like, well, I don't know. And then we argue a little and I say, well, I'm going to do it anyway. And they're like, well, if you're going to do it anyway, do it this way. It's like, ah, that's what I need.

You know, the person and the framework that I like to think about is, you know, a business or a side hustle. It's, it's the world's best expense account. And it allows you to do things like we're talking about, you know, travel. If you need to go to Vegas for a convention and stay at a nice hotel and go out and entertain some guests and, you know, those things are, you know, allow you to lower that taxable income. And, you know, if you have a down year like we talked about last week, and you build up enough expenses and you've got a negative year, well, a lot of those deductions can be carried forward. When you buy real estate, there's all kinds of methods to accelerate depreciation, to write off the value of these things. There's tons in every year. There's tons of incentives for businesses.

Like, yeah, and even, like to the point that tax credit guy on Twitter said, you know, you don't need to be buying real estate to, to take advantage of this stuff. Like, it starts with the first dollar that you earn, or even if you haven't yet earned a dollar in your small business, like, it starts with the first dollar you spend is really where it begins. Yeah, yeah.

So just, I agree.

Just make sure you're like, if you're listening to this show, and you're part of what we're doing here. You're already thinking down the right path. You're already using your business brain for this stuff. And this is.

That's right.

We're all helping each other. Yeah.

Yeah. And if you want to talk more about this and, you know, feedback at BusinessBrain show, it's one of my favorite things to discuss when I'm explaining to people why, you know, I own four or five different businesses and why, yeah, each of each of our, you know, vacation rentals is owned by a separate llc. And why we have an S corp because we save money on this tax this way. I love it. And I've gotten lots of great advice because, you know, from good accountants over the years. And it is one of the keys to the kingdom. And building wealth includes minimizing your taxable income at all times.

All right, look, now that it's summer, you might be looking for wholesome, convenient meals for sunny, active days. Factor, our sponsor and America's number one ready to eat meal kit, can help you fuel up fast with flavorful and nutritious ready to eat meals delivered straight to your door. You'll save time, you'll eat well, and you'll stay on track. Lisa and I have used Factor a lot recently. It is fantastic because you get these meals that are good for you, but you get to skip the trip to the grocery store, skip the chopping, the prepping, the cleaning up too, while getting all the rest of that. Because factors fresh, never frozen meals are ready in just two minutes. Literally two minutes. All you have to do is heat and, and enjoy and then you can get back to whatever you're doing. Get back outside, soak up the warm weather. You can elevate what you're eating at home with new upscale things like surf and turf and surf and surf meal options like roasted garlic filet mignon and shrimp and Cajun spice shrimp and salmon. They've got over 34 chef prepared dietitian approved weekly options. You gotta go check this out. Head to FactorMeals.com/Brain50 and use code Brain50 to get 50% off your first box. That's code Brain50@FactOrMeals.com Brain50 to get 50% off YOUR first box. And our thanks to the folks at Factor for sponsoring this episode. And speaking of eating out, there are times where it makes sense to use your business brain to go eat at a restaurant. I like to meet with potential new hires for lunch. Watching them interact with the wait staff tells me what kind of person they are. Well, if meeting face to face isn't an option, you're hiring somebody remotely. Our sponsor, Checker is here for you. Because Checker provides fast and fair background checks and can help see the things that we can't. Checker makes it easy to get fast, comprehensive results so you can hire with confidence. Just sign up, select a package and start a background check. It's that simple. Simple. Checker's advanced tech and proprietary Data Network deliver 98% of nationwide criminal checks within one hour. And they've got built in tools to help you stay compliant with the FCRA and local laws. Best of all, Checkr is commitment free with affordable pay as you go pricing. I love this. It's super customizable to fit your small business's needs. Take the guesswork out of the hiring process. Sign up for Checkr today. Right now, Checker is offering our listeners $40 off your first background check. Visit our special URL to save $40. Checker.com businessbrain that's the word check. Then the letter r.com businessbrain C-H-E-C-K-R.com businessbrain and our thanks to the folks at Checker for sponsoring this episode. You know, Shannon, I was backstage speaking of my musical life. Backstage on Saturday night before we were gonna play G, you know, we were all set up, everything was good and we were just hanging out waiting for, you know, start time to come around, chit chatting back there. I was talking to my friend Fury who plays in Bitter Pill with us, with me. And they were saying, we were talking about Danny Elfman who was sort of the chief songwriter in a band called Oingo Boingo back in like the 80s. And, and then party, Dead Man's party. Right. But then, since then has done like, did the soundtracks for all the Tim Burton films, wrote the theme music for the Simpsons. Danny Elfman's done all kinds of stuff. Like his work is everywhere. And Fury, this is like Fury's favorite artist. And so Fury was saying one thing that I love about Danny Elfman is that he doesn't take no for an answer, even from himself. And I was like, whoa, I love that. So I took my phone out and I wrote it down and I said, this is definitely going to be a podcast, podcast topic. And Fury was like, oh yeah, I.

Listened to Gabe himself.

Yeah. Even from himself. Yeah. And I loved that. You know, we were talking about imposter syndrome earlier this week and that whole idea of like, I'm gonna, I'm gonna Say no to do this because I don't know how to do it. I'm not capable. It's not my thing. I've never done it before. And then when, you know, when Danny hears this, he says, well, it doesn't matter. I'm gonna do it anyway. I just loved that. That idea of not taking no for an answer from yourself, that's super powerful.

That is powerful. That's great. I love it. Yeah, I think that's great.

Yeah.

And he's got, you know, he's got the props to, you know, I'm sure pushed himself out. Didn't think that he was going to become this, you know, composer of, you know, the types of music and the movies and different things. So that's. That's awesome.

Yeah. Yeah, right. Yeah. No, it's worked out all right for him, clearly. But, yeah, I just love that idea that, you know, you gotta. Because as. As entrepreneurs, you learn to not take no for an answer from others or no as an answer from others.

Correct.

You have to sort of ignore the naysayers almost all of the time. Right. But that monologue, you know, that's the one that can also be perhaps even more impactful and influential than the external voices. So, yeah, you're in.

Your inner judge.

Your inner judge, definitely.

Absolutely.

Yeah.

My favorite. My favorite way that I kind of manifest that framework, because I've talked about it before. I love that Beck song, you know, Loser. And he. He talks. He, you know, says over and over, he uses the word I'm, but I cannot say that phrase. So I. When I sing along with that song, which I do all the. You know, whenever I hear it.

Yeah.

I always change the word I'm to your. So it's. You're a loser.

Not interesting.

The word I'm. And it's just a. I don't know what you want to call it. Affirmation. But I've been doing it for years, and I never really thought much about it until I had someone point it out, like, oh, I remember you, you know, told me this 10 years ago, because that song's been around forever and. And I was like, oh, that's interesting. So it's those little things, like, you know, that. That help you tame that inner judge and kind of push him back. And I think that, you know. Absolutely. Right.

I was reading that book, make Something Wonderful, which Steve Jobs.

Yeah.

Widow. Sort of spearheaded, putting together with a team of other people. And it's just a bunch of things that Steve said throughout his life organized into a nice. You Know, collection. But it really is just his words. You know, emails that he wrote, speeches that he gave, anything, you know, that. That they were able to sort of collect, and that's cool together. But one thing I noticed, and it was something I saw him do and knew that he did throughout his life, is he said, one thing I learned early on was to ask myself every morning, if I knew that today was my last day on Earth, if I knew that I was going to die tomorrow, would I do what I'm about to do today? And what he was famous for saying was, if the answer is no more than a few days in a row, I need to go make a change. Okay. So, like, and I love that sentiment, like, why would you do this? But here is a guy that if he did this, he woke up every day and said, if I die tomorrow. And, you know, did he. And then. And then he died far too young. Right? Like, from. And so, like, you know, like, you're. When you were sharing your. Your thing about Beck's song, it was like, you know, did. Did Steve. As I was reading this. This, I happened to read that. That segment of it this weekend on Sunday morning. I was just sitting and reading, and I was like, I don't know that that's a good idea to talk about dying tomorrow every day. I don't know. Like, I understand the perspective. I appreciate that greatly. But, yeah, maybe there's a better way.

There's a. I think you don't need to look at it that extreme, but you do need to recognize whatever. Say it, however it motivates you. Like, I have this big thing printed on the base of my monitor that says, you don't have much time. And I constantly remind myself of this because I know it's true.

Yeah.

Yeah. And so, you know, it's not as. As harsh as if you die tomorrow.

Right, Right.

Because if I die, if I knew I was gonna die tomorrow, I would immediately get on a plane and go see my kids.

Right?

And I mean, it's just every time.

Right. 100% of the time, that's what I would do. Same. Yeah, exactly.

But telling. Telling myself, I don't, you know, you don't have much time printing it. I have it printed out on this big label, and I stick it right on my. My right. Right next to my quartet or right behind my quartet glass board that I keep next to my keyboard. And I probably see it ten times a day. Sometimes it motivates me, sometimes it pisses me off. But, you know, it is. It is what it, it works. It works because it, it allows you. Allows me to realize that, oh, yeah, I need to maximize what I'm doing. And that could be relaxing, reading a book, whatever.

It doesn't mean you need to be flat out all the time. It means that time is a. At least as far as we humans experience it, time is a finite asset. That's right.

And it often ends. And it often ends way before you know it. And, you know, having some kind of legacy to me, as I've gotten older, it's become, you know, more and more important. It's one of the reasons why I do this show because I. I hope my kids listen occasionally and I'm hoping that they can keep these words long after I'm gone. To be able to hear me talk about things that are very important to me and giving back to people that are trying to do what I've done for the last 30 years. How crazy that may sound, but in the, in the end, it's. It's very, very. Yeah, it's what we do. Absolutely great.

Yeah, yeah, yeah.

It's a great way to wrap up the week. And, you know, we love having you here. Come back and tell us, you know, your stories, feedback at BusinessBrain Show. Tell us how you're saving on your taxes. What do we miss? What do we have wrong? Help keep our business brains finding out and learning new stuff.

Yeah, we're all here to tune, tune our business brains together. Feedbackusinessbrain Show. Like he said, do us a favor. Keep living that charmed life and hope you have a great weekend. See you next week.