Tax Planning for Student Athletes: NIL Has Changed the Game

Game on.

Game on.

I like it.

Guys, we're gonna be talking about you. Athletes out there, college athletes in particular, are having to learn how to deal with tax and legal planning while in college because you're starting to make some money.

You know, you know about this nil thing. Name, image, and likeness. Just be happy you have a name, image and likeness. People want to give you money for,

but it comes with some taxes. You know, more money, more problems. But, guys, we got solutions for you. That's what this show's about. You. You may be making money right now getting tax forms. What am I supposed to be doing? Who do I rely on? We're hitting that today. That's our goal in this podcast.

And there's a lot of wannabes out there that think they know these issues and they're not licensed professionals. I'm gonna. We got so many tips for you. I'm gonna leave with that one.

And let me just say, you know, your roommate that's a business major, that's not the guy to be talking to on this.

So we're both attorneys, tax lawyers. We help clients with financial and legal and tax advice around the country. We have a team of lawyers and accountants that are there for our clients everywhere. And we've had many, many professional athletes as clients, entertainers, subcontractors of any type of industry, and that's the easy part. And so I'm going to move to point number two. You do not need an agent. Do not get sucked into some big law firm, some big agency that wants 10% of whatever you do, because you're like, oh, my gosh. Someone called me on my. About my YouTube channel or my Instagram followers, and they want to sponsor me. Do I need an agent? No, you just need a decent business lawyer that understands taxes. This is not an infomercial for us. But we're simply an easy call to make because we know what we're doing. But you just. Just don't get sucked into one of these big machines.

Yeah, I think the first thing I want to say is think big picture. You are a business now, and your name, image and likeness being sold. You are a small business, okay? And you got to do what all small business owners do. You got to learn how to save on taxes. You don't want to overpay that. You got to make sure you're protected legally. You want to make sure this business can grow. It is more likely you are going to make money off your name, image, and likeness than you are as a salary or in winnings. Or whatever you may earn as a professional athlete later on possibly.

Man, I love what you said. And I'm going to reiterate this another way. When you see entertainers, sometimes they're put on a W2 from a production company when a movie's made or a show is launched. But a lot of entertainers are doing commercials and freelance work. That's their name, image and likeness. As an actor, we have influencers on obviously all the social media channels. Now they're making money. But whether you're a dentist, a doctor, a realtor, an engineer, an influencer, an athlete, an entertainer, you're all the same. We're all the same. Don't get again schmoozed by some lawyer like, why I represent athletes and I'm the only one in the world that knows what the hell you're doing and you got to pay me X BS get two or three separate opinions and be careful again, who you take advice from. But number two point, you are a business. You are a business.

You could happen to anybody. We just want to make sure you're getting good advice. Everyone knows professional athletes in particular are known for having big earnings and NBM broke. We do not want that. Let's think about it. Let's get engaged even here for you college athletes. But I have to say, it's a lot of times the people you put around yourself. So the one thing, and this is a sports metaphor, is build a good team. You need a good team from a tax and business standpoint. But don't feel like you need this big agent. Build the right team. Think of yourself. I'm a business. I need to build my team. So accountant, my lawyer, that's what you need.

Okay, now let me give you the roadmap for the rest of this podcast. And some of you may be catching this on YouTube. And we are going to hit several points. We want to talk about legal agreements just to make sure you have a framework for how to approach legal agreements. Also, basic finance skills, like, what should I be doing with my money? How much should I be saving for taxes? You're not getting a paycheck. No one's withholding from you. And the last thing you need is the IRS knocking on your door next year. And they will. And then next we want to go through some cool tax strategies. You need to incorporate yourself. We're going to talk about that process. What tax strategies should you be looking for? Credit card and banking issues. We're going to hit seven or eight items here. I think it's going to Be really, really powerful. I'm going to let you choose. Where do you want to go next?

LLC is a great start to that. Lots of things we can go off of that, but let's just start with getting an llc.

Yeah. And we're going to talk about receiving money, whether it's through Google, Amazon, YouTube, sponsorship fees, appearance fees, whatever you may go. Well, I didn't get a 1099. I just get to put that in my pocket. No, no. The IRS will figure out where that money goes. And so we're going to come back to some of that money flow issues. But here's the easy answer. Set up an LLC in the state where you reside. I've got freaking chapters. Look at this. The tax and legal playbook. You're an athlete. I got a playbook for you. You can get it on Amazon. Hundreds of five stars. It's for business owners like you. We have lawyers that can meet with you on the phone for not this stupid agency fee of a percent of whatever the hell you make. For under 1500 dollars, you can be spending several hours as needed in different packages. We have to help clients around the country. So you can call the law firm. I just want to give you a budget mindset here. But you shouldn't spend it. You should be spending anywhere around 1,000 to $1,500 at most to meet with a real lawyer. This is not going to LegalZoom and make a plan. And you need an LLC in the state where you live. Not Nevada, Wyoming. Don't get sucked into that crap. And you're going to get a tax ID number and a real LLC with an operating agreement, minutes, articles of organization, all the pieces and parts we give it to on a silver platter with a bank packet. Because you're going to go open a bank account now. That same tax ID number is going to be tied to your Apple Pay and your venmo and your PayPal. And any way people want to pay you, you're going to start setting up accounts under that LLC name. You are not getting paid anymore. Your LLC is. Let me repeat that. As a student athlete, you are shifting from a person to an entity. That llc, and we're going to talk about naming it here in a moment, that LLC becomes your representative. That's where all the money goes and all the money you get paid. And you're setting up on YouTube and everywhere else. You're going to set up that tax ID number and we'll give you the whole package so that you can just run with it and we don't get a percentage of what you make. We're not trying to be your business manager. I think that's a ripoff. Nine times out of 10, we're going to be there a la carte when you need us or whatever lawyer you choose to set up that llc, then go next level.

Now, what's going to happen in the process when someone's paying you is they're going to typically send you a W9. This is an IRS form that you fill out. Now when you have the llc, okay, you're starting to do this right. You're getting legit. You realize I'm a real business. You're not putting Matt Sorenson on there or whatever your entity name is, okay? You're putting Matt Sorenson LLC or Matt Sorenson Industries or Sorenson Industries or whatever you decided to call your LLC name and do whatever you want. You know, pick. Pick a name for your llc. That's who's getting paid. Then you put the tax ID number associated with that llc, not your personal Social Security number. And that's important because we want to start running the income into your LLC. Not to you personally, not a 1099 to you personally.

And don't freak out, especially you parents out there that might be watching this. If your kids have already been making some money and it's going to their social, that's okay. We have a certified tax advisor program where we train accountants around the country on how to deal with this. And any money your athlete is receiving personally, we are going to push into the entity. And the sooner you get the entity set up, the better. This is the kind of stuff we talk about in a consultation. We're like, well, I can set up an LLC for $200 online, blah, blah, blah, in the state of Ohio. Yeah. And then you're going to wake up the next morning and have 32 questions. This is what we knock out in a consult. How do I get the bank account going? How do I receive money? What happens if I receive money personally? You don't even know what to ask.

So just get some professional advice. Start with the llc. Okay, now we kind of hit about some tax stuff here.

I think we need to mention the S Corp at least.

Yeah. I think this is the perfect time to say there is something called an S Corporation, which you can turn your LLC into. You can do it right out of the gate if you wanted to, or you can later elect this S Corporation retroactively.

It's super expensive. Buckle up. We charge $200. I mean, I Know that sounds atrocious. I mean, but it saves you thousands. Yeah, I know there's some agency in Chicago that wants to take a 20 grand retainer to represent your little kid that can throw a basketball. But trust me, it doesn't have to be that expensive. So when you have an llc, you're going to start having quarterly and annual semiannual meetings with your advisor team and a good tax lawyer. Sorry, I'm pointing at myself for those. We were looking out for you. We have a fiduciary duty to do what's best for you. Then we're going to make the decision when the time's right to elect an S Corporation status. Few hundred bucks. Done. Typically that number when you're netting around 40 grand. So when you start making five grand a month off your YouTube channel through Instagram sponsorship, whatever you're doing, once you're making about 5k a month, that's when we're gonna pull the trigger and go S Corp. Now, this whole show could be about that, but I'm just, we're just planting the seed. I'm gonna put that as item four.

Yeah. And let me just say that if you're making 100 grand a year, the choice of doing an S Corporation could be saving you 8,000 bucks a year in taxes or more. So it's a big tax savings. We have separate podcasts on that. Mark's got a chapter in his book on it. Tons of content of. Why do you do an S Corporation? Lots of professional athletes do. It is the number one entity for small business owners, which that's what you are now.

But number five, get educated. See this, when you're an athlete, you got to know the playbook. You got to know the plays I got. You're watching film, you're studying every little aspect so that you can be the best athlete you can. Now guess what, you're a business now, knowing just enough so that you don't get taken advantage of by advisors financial, legal and tax wise. This is where you don't like my way of saying it. And my book, Tax and Legal Playbook, second edition, pretty awesome on Amazon. Find someone to follow. We have a weekly newsletter, we have a weekly podcast. We've got several books. The point is like this topic of the S Corp is a whole chapter. So for you parents out there, get the playbook. Start understanding. Oh, there's some estate planning issues. Maybe it's time to get a trust or a will in place. Oh, what are the write offs for Home office? What are the write Offs for auto. Are we going to buy our kid a car at college now? Can we write off the car? They're going to be. There are so many kick ass strategies here that just again, we just want to open that window. So get educated.

Yeah. Okay. So you get educated. All right, now we've got the entity, you've got the llc. You know when you might need to do the S Corporation, that's going to save you taxes. But we want to get into a couple other things. We're going to talk about taxes because we want to go over some common tax deductions. But before we get there, I just want to go over a process item that's important. You need a business bank account. That entity or LLC needs a bank account where you're going to start receiving the money. Well, you're also going to be spending and covering things that are expenses to earning this income. You're going to have expenses and things that are going to apply to this income that's going to reduce how much taxes you pay. But it first starts at a, at a business bank account. The reason this is important, the primary reason is it will be a nightmare to track all these expenses later. If it's in your personal bank account, it's in your Venmo, it's in a cash app, it's in all this. Trying to figure out what was income and what was expense is going to be a nightmare. Get discipline. And this is what all business owners have to do that are new. You need to get the discipline and using the business account to receive the income and pay out your expenses.

Okay, on that note, and boy, we've got some good write offs. And again, someone's in your ear going, yeah, but as an athlete you get special write offs for gear and training and we can, we know all that. We know that. You know this bozo that's trying to sell themselves is the expert of all experts for athletes. We got you. We're going to come to it. But I want to hit this too. Credit cards. Yeah, you really need a credit card. And I know some of you parents out there are like, I've never taught my kids about finances. They've been an athlete going to practice nine hours a day for now I got to give them a credit card. They're going to blow it. You know, they're going to, you know. Well, we listen to Dave Ramsey. We shouldn't have a credit card. No, you need a credit card. Now here are several reasons why there are going to be expenses. It's okay as Long as that credit cards paid off at the end of the month, treat it like a debit card. And it doesn't have to be in the name of the LLC dedicated to the business, even if it may be in your athlete's individual name. This is going to allow them to build credit because where are they going to take the money they're making as an athlete? They're going to want to buy real estate. Oh, and they're going to want to get an apartment or they're going to want to buy a rental property or an Airbnb. That's what athletes do. They invest in businesses and real estate. Well, if you have no credit score because Dave Ramsey got in your ear and said, credit's bad and bad credit is bad. But good credit, that builds you wealth, you got to have it. Get your athlete a credit card, start using it for the business, pay it off at the end of every month. Start teaching your kid about point tracking. I love the points guy dot com. Check him out. And let's start tracking points because your athlete's going to be traveling a lot. Those points can be paying for travel down the road tax free. There's so many little tricks to the trade here in this type of occupation.

Yeah. Now we're going to hit some legal things that we think are important, too.

Do you want to go there?

And some business management. Why do you want to fill out the tax side?

Should we fill these checks?

Fill the tax side. And then let's hit some of the legal considerations and finance and some finance. Just kind of some good business management stuff that we want to make sure we get in here, too. Because it's not all about the taxes, but taxes as a business owner, and now you're a business owner, remember, are the number one expenses you're going to have so you're successful. Okay? You're going to start making money. And you may not know this yet because you've been an athlete and you've been busting your butt through high school and now in college, you haven't really got a paycheck like people have had and had to file your tax returns. Well, this is going to be a rude awakening. But there's good news. The good news is there are tons of ways to save on taxes, okay? You just got to know the game. You got to know the tricks. You got to know what you can write off. That's we're trying to help clients every day do. That's what a good tax lawyer can save you 10 times what you pay

them I love that. And I know some of you athletes are like, all right, we're done with the puns, you know? No, guys, I wrote the book the Tackle Legal Playbook five years ago with the acronym at many of our conferences. Know the game. Where are the boundaries? How much time is on the clock? What can I deduct? What can't I? What are those rules? People, as a W2 employee, write off, suck. Now, as a business owner, oh, whole new world. It is exciting. And I want to hit. I want to hit withholding in a minute. But let's just say this, okay? There are certain exceptions in the tax code for entertainers, influencers, and athletes that Matt and I can't take. I cannot write off my gym membership. I know. I. I went to the gym this morning.

Oh, okay.

I can hear. I can just feel his eyes on me. You work out because you don't look like it. You know, I've been working out, okay, So I don't get to write off my gym membership. You as an athlete, you do. You get to write off trainers. You may even be able to write off clothing, makeup, hair, a lot of things. An entertainer or an influencer or an athlete. Because your body is your business, your Persona is your business. There's court cases on this. It's very well known and established. Not a lot of accountants know this because they don't have athletes and entertainers. We have. But be careful. Again, thinking you've got to work with a specialized firm that thinks they know it all here and charge you out the butt. See, so there's a balance here. So you parents, this is where you get to be discriminating and go, you know what? We know the rules. That's cool. We can maybe even still use your hometown accountant. Let's get them certified. Go to markjkohler.com and make sure they know what they're doing. Yeah, but anyway, so there's a lot of cool write offs there.

Yeah, lots of cool write offs there that are unique to you. So make sure you know that and are capturing that. And guys, this is not pulling up on TurboTax.

Okay?

These questions and prompts you are not going to solve in TurboTax. All right? You actually have a little bit of a complex situation now as a business owner. Now here's a lot of other things to be thinking about. What about my cell phone? Now, am I using that for my business? What about my laptop that I'm using? Is that in my business?

Every time you say something, I'm going

to go what are the cameras I'm using?

Yep.

Okay. The travel I'm taking. The business meetings I'm going to. Maybe your parents are helping in the business or on the board of advisors or board of directors of this company now. Okay. Maybe your travel now is going to be an expense as you're going to help support as part of the business.

Athlete needs an assistant.

Yes.

Security. Yeah, mom and dad are assistant security. Now you're getting a write off for mom and dad traveling with you. Yeah. There's so much, so much. Love it. And here's the thing again. Tracking everything is the first issue. Make sure your business pays for it. At the end of the year, your accountant can whittle off stuff like, no, we're not going to write off a Chicago dog or we're not going to write this off. But a lot of dining while you're traveling is going to be a write off. There's going to be all sorts of write offs. So when you don't know, let the business pay for it and then your accountant can whittle it off as a draw, meaning not an expense because the IRS may not validate that expense, but let the business pay for it. When in doubt. Okay, now I want to hit withholding. Some of you have already seen money hit your bank account, your YouTube channel, whatever you've got. You're. You're getting money. You're watching this because you may have already made some money. A good rule of thumb is open up a separate bank account and put 25% of whatever you receive in that account. Just out of sight, out of mind. I loved it. Was it Kevin Hart?

Yeah, it was Kevin Hart.

Oh, my gosh, I loved him.

He's like, he's like, okay, you made a million dollars. No, I didn't. I made 500,000. He's smart because he got behind in taxes and he's told this story publicly that he was. He finally started making money and he really busted his butt and he was spending it all and he got behind with the irs. And what happens when you do that is then you got to make more money, which you have to pay tax on that. And you got to go pay back what you owed the year before and the year before that.

With penalties and interest.

Yes, with penalties. It becomes this really vicious cycle, something very, very difficult to get out of. So focus on this. Don't feel like, oh, I'll worry about that next year. No, no, you got next year's taxes on top of that. So he just has this mindset of I made a million. No, I made 500,000. Set this aside, knows it's going to the IRS.

I love it. And it even gets better. I get challenge. All of you get over to YouTube and just type, Kevin Hart, IRS responsibility. There's a funny video in there and what's cool, he goes, I'm going to expand on a little more. He goes, I made a million dollars. No I didn't. I take 50%, put that in an account, know this is going to go the irs. It is not my money. Do not kid yourself. When you make a million dollars, it ain't yours. Take half of it off and peel it. Then he goes, hey, I made 500 grand. No, I didn't. Yeah. He goes further. He goes, now I take half of that and I set aside for investing. I go buy some real estate, I go buy some stock, I buy some ETFs, I buy some crypto. That half is for the future because I don't want to be that entertainer or athlete that's broke 10 years from now. So half of that I'm going to peel off now. I get to live on 250 grand. So when I see a million dollar paycheck to me, I get 25% of that and I create that mindset, that first 50% bank account.

Yeah.

Peel it out, put it over there. Name, individual likeness is paying for you now, but you got to pay the IRS too.

Yeah. And you know who else got to pay is your state. A lot of you live in a state that has state income tax, so you got to be careful about that. And in the state where you are physically residing, even in school, is where you're going to be responsible for that state income tax. You could even get sucked into another states depending on what you're doing and travel and you're appearing here, you're playing there for money. Or you know, so you could get sucked into some other states. So it might get a little complicated. I'm just warning you. But don't forget the states because they're super aggressive when you owe them money.

Yeah. And you may be thinking, well, mark, you said 25. Kevin Hart said 50. Let me point this out. Many of you are not making what Kevin Hart's making, okay? Plus he lives in California, so he's got the highest state tax rate, the highest federal rate, and 50% is a good number for him. For you starting out as athletes, just set aside 25%. It's a great starting point. Now as you start making more money and you do your first tax return and your second tax return, your account is going to go. Ain't got no. We need to put away 30% or 40% so you'll graduate into some different withholding positions. But I'm saying just out of the gate, 25%. Out of sight, out of mind. Again, on the tax strategies, we have lists and lists of those. This is why we want you to start listening to the podcast, getting educated, following us. We're going to give you more and more strategies. Do your initial consultation with one of our tax lawyers. Get your entity set up legal. Legal. Okay.

I think one of the common questions is, do I need a trademark? A trademark is something you might want to think about and typically people you might have a slogan you use. There's lots of athletes that have had disputes with trademark. If there's things in your business and things that you use in marketing that is making you money, a slogan like I have one, take control of your retirement. That's one of mine. That's trademark. Because I say that on my stuff. It's on my website, it's part of my slogan and my branding. If you have that, get a trademark that can protect you across all 50 states in the US no one else can use that trademark. You get to protect it and use it as your own as you're building that trademark and recognition.

Yeah, our trademark cost around 1000. Again, giving you perspective, people. Again, I cannot emphasize this enough. There are law firms that are going to see you coming. Now, I know that many of you don't believe lawyers are dirty rotten scoundrels. They're wonderful people and never overcharge. Sometimes they do. Now, on the legal too, I want to throw this out. You're going to be entered into a lot of contracts and as you enter those agreements, this is where your LLC comes into play. Again, you may want to have the LLC be your name. You may want the LLC to be Sorensen Enterprises. And then your. Your name, image and likeness could be trademark. There's a lot of ways to go at it. Have you set up a website for yourself? Sometimes your URL should be matching your llc. Now, why say all this is when you start to enter contracts, make sure that the LLC is the one entering into those agreements. And your contracts can be very simple. Be careful when someone makes a promise for you and then there's nothing in writing. Well, they said it in an email. Yeah, now you're getting stiffed. So as an athlete, again, you don't need a high powered, expensive agency to do this. A Reasonable. Even local or across the country. Whatever business lawyer that can look at your agreements and contracts and help draft some for you.

Let me say this another way. I'm just, I hate to say it, but you guys are going to get taken advantage of in your career. Someone is going to rip you off. It's gonna happen and we've seen it so many times, especially new business owners. I can just see it happening. A couple ways to protect yourself. One, dictate terms, get paid up front. Okay. If you're gonna do something, get paid, get paid up front. Two, only work with companies and brands that have reputation. And three, get a frickin contract. Get it in writing. That's what real businesses do. Anyone respectable that's gonna pay you real money, that's really going to follow through on it is going to be cool. Signing a contract.

Yeah. If they're not, then, if they're not,

you don't want to work with them.

Yep. So do not sign anything without reading it and understanding it. And sometimes you need a lawyer to interpret it, sometimes you don't. Yeah.

Yeah. Another thing, it's kind of on the legal side is making sure you start staking out your claim on the web. You might have social media accounts already, most college athletes do. But you might want to get to a website and get that URL that's associated with your name or wherever you're starting to go, brand yourself out there. Because remember, this is how you're going to start making money. If you think about this down the road. How can I make money? A website could be a good way depending on your sport and what you might plan to do in the future. And some of you may know, let me say this too. Some of you may be an athlete that might have a professional career and you may have a good, you might be on the bubble. Some of you are like, you know what, I actually have a following. I'm a college athlete. But there's, I'm not going to be a professional athlete that's going to make millions. I might have, you know, maybe you're in track and field, but there are businesses around them and there are a lot of great athletes who can build a pretty good business around their career, whether it's in college or not. And so be thinking of where you're wanting to go next. If you want to take that to the next level, you're starting to figure out how to make money.

Okay, number 10, you know we're going to finish with 10. This is so freaking awesome. I'm going to put this in an Article number 10, financial planning, financial advice, financial prowess, financial literacy, literacy. I mean, you've been an athlete. Do not beat yourself up. I know you may have imposter syndrome. Like, I've got this money now and I don't know what to do with it. The first thing, don't do anything until you. That's one of the first things. Just breathe. Don't go buy the new car. Buy this or buy that. Let's just take a breath and let's start doing some good financial advice. And I go back to Kevin Hart. That was the second step. Start taking a good chunk of your money, set it for taxes and then set aside a chunk and go, okay, I got to start funding an IRA with. As a small business owner, you can have your own 401k in your s Corp. Let's start funding retirement accounts. Let's start saving for the future. I know you think the money will never end. You're in your 20s and you're like, oh, I'm going to be a billionaire, I'm going to be the next guy on TED Talk or whatever. Sometimes that doesn't happen. This is your chance. You got to set aside some money for the future. And it could be a game changer 10, 20 years from now. So where do you start with the financial literacy?

There's so much to do, it's hard. I think you got to come learn a few things. One is have the discipline to save. You've got a business now, which is difficult in and of itself, but get your head around it. It's not complicated, but it does take a little bit of work to get that rolling. Getting the right routine and habits on how to set, spend the money, how to make it. Eventually get your contracts down, you just, you get that dialed in, then you're going to start with the money you're making. You got to learn to save. Don't be a spender. Don't be spending every dollar that comes in buying the next cool thing, you know? I know. I think we can see it in social media. You know, everybody does it and they want to look cool. But like, have some discipline about that.

Hold it. You don't have your Lamborghini?

I do not. Wow.

How can you be a self respecting influencer without a Lamborghini?

I can buy a lot of Lamborghinis, but why would I? Okay. I want assets that make me money, that don't cost me money.

That's a novel idea.

Okay, so let me make sure you understand what I mean. By that, okay, you want to accumulate assets, right? Let me say a Lamborghini. Is that an asset? That's a liability.

Yeah.

That is going to go down in value that costs you every month. That does not make you money. Okay. That's actually a liability. But what is an asset is rental property can go up in value, can cash flow, even a stock portfolio. You want things that are going to grow that make you money that don't cost you money.

Okay, let me give you a few other ones. Bling is not an asset. I don't care how much that gold chain was at Tiffany's. It ain't going to hold its value. If you want to buy bling, buy used because it'll be half the price of that. Cool. You know, go to Zales.

How many athletes at Tiffany's buying their bling? But keep going, buy yous go to the pawn shop.

Yeah, go to the pawn shop. There's plenty of. You know what? Go to where the poor athletes now are hawking the bling they were wearing 10 years ago. That's where you buy your bling.

And that's a great principle. Buy low, sell high. Okay, so when you're buying, you want to buy low.

Yeah. I mean, but there's a list goes on and on. You don't need to go buy the first shiny brand new car. I know that brand new car smell is so cool, but trust me, Matt and I have been down that path.

We have that for five bucks in an air freshener, we can stop at

the car wash. Can you detail this and make it smell like a new car? Yes, they can.

So just.

Oh, my gosh, the list goes on. So on the financial literacy, we love to talk about that on our podcast and our firm on a regular basis. We have a separate podcast called the Directed IRA Podcast where we show you how to take these retirement accounts you're funding and buying. Gold, silver, real estate. Invest in notes, invest in your best friend's business. A lot of athletes do invest in car dealerships and restaurants and other businesses. That's fine. Let's be smart with our money. Let's try to create cash flow. That's what the A listers are doing. They're taking their money and investing it. I know sometimes you're living month to month. Keep living like a college student so you can live like a pro down the road.

Oh, I love it. I love it. That's what I was told in law school. You know, if you live like a lawyer while you're in law school, you live Like a law student while you're a lawyer. So take that to heart. That's great advice. All right, well what I want to say is like take a step back. We've given a lot of things to think about but what you want to do is make a plan. Okay, Make a plan throughout the year. Right now I think the most important thing if you're starting to make money is get into an attorney, a good business lawyer. You might know one in your network or your friend group. KQS Lawyers is our law firm. We're helping clients across the country. We love doing it and we know these strategies. We know how to not you know how to do this in a cost effective way and to save you taxes and to protect you from legal problems. So get in with, with the lawyer, attorney, whoever.

You're an accountant.

An accountant. You're going to want accountant on your team too because what's going to come up next year, April 15, tax return

to report all this stuff and you say well I need a financial advisor. Not all financial advisors are going to recommend real estate. See this is another major topic that Tony Robbins, Warren Buffett. In my book the Financial Freedom Fiduciaries are only about 5% of financial advisors. Of all the financial advisors in the country, 5% are a fiduciary, which means they have a duty to recommend what's best for you not to just sell you a stock portfolio. And they're going to want to sell you insurance and they're going to want to bank on yourself and infinity banking and da da da da da. There's so many. Now sometimes those strategies work but we want to start with the basics. Okay, here's the 10. And this will be in an article down below for those that are catching this on YouTube later. Number one, I'll do the first five, then you can summarize. Okay. Number one, be careful who you take advice from and build a team. Number two, the mindset you're a business. Third, start with an LLC right now. Fourth, convert to an S corporation when the time is right. Number five, stay educated. It's not get educated. You are your first best advisor. Get and stay educated on business, finance and money skills.

Alright? You need a bank account, you need a credit card, you got to start building credit. You need to keep organized with a bank account. Next, withholding. This is also estimated tax payments is another way to say it. When you're self employed you need to start getting in the discipline and habit of paying the irs. Remember the Kevin Hart example there? What do we Got write offs. Oh, write offs. Oh, baby. We love a good write off. Tax sections, guys. Write offs, save you money. What we're doing there, we didn't state this and this might be new. Take for granted that college students don't know what that means. A write off means I'm reducing my income. Let's say I made 200 grand through the year, but I have 50,000 of expenses. When I go to the IRS to pay taxes, I only have to say I made 150 grand because I got to deduct and write off 50,000 in expenses. So I'm only taxed on the net there. So all these little things you can track and keep a record of that are write offs or expenses. Reduce how much income you have, which reduces the amount of tax you have to pay at the end of the day. So we love that. Of course, number nine, remember, you need to have good legal contracts. Remember, I'll give another little tip here on that just as we're closing out. You can have a great deal and a bad contract. Guys, that's not a good deal. If you have a bad contract, you actually have a bad deal. And we've seen this with clients all over the, all over the course of business, real estate, small business owners, entrepreneurs, big business. You can have an awesome deal and that contract can totally wreck it. So make sure your contracts are tight. And then last, finances. It's all about the money. Finances. Make sure you're taking care of it. Don't be stupid. You're in an amazing time right now to capitalize on the money you're making. Don't blow it, save it and invest it for the long haul. Have a long term mindset about this. Yep.

In summary, how exciting. You're an athlete. You parents that are listening to this, this is, and I like the way you just said that. You're in a wonderful time period where you've got to take advantage of this because I hate to tell you, it's not going to last forever. It's not. Not everybody is a Michael Jordan that's going to make, you know, break a billion on Air Jordan royalties this year. Whatever you've got. You've got to realize that there's a small window here. It may be one year, maybe five years if you're lucky. You could be 10 if you're off, you know, maybe the next Kardashian. But you've got to be mindful of this limited window. Let's do it right. Be careful of the wolves out there in sheep's clothing that want to see you coming and take advantage of you. I loved what was the movie with Will Smith and the Williams girls for tennis King Richard. What a great show. And you parents out there, that's a great show to watch too. I'd recommend King Richard, excellent show of the parenting that he did with Serena and Venus. It's just really inspiring too because it is a whole different game. And you got to know the rules. It's like, it's sad. You got to know the rules of the sport you're an expert in now. You got to know the rules of business because again, it could, you could get totally burned. So thanks everybody for listening, watching. We're excited to be here with you. You know, all of you nil athletes out there, we're one call away. Get a second opinion. We're not going to take a percentage of your deals. We're not that expensive. When you start going out there, you're going to your eyes are going to roll back in your head when you see all the zeros these damn advisors and managers want to charge you.

So get over to kqslawyers.com you can learn more about us and our law firm. Schedule an appointment online there, too to start working with someone on our team. And thanks for being with us this week. Interesting topic. We are excited to talk about it. We'll be back next week with another amazing episode of the Main Street Business Podcast.