The Truth Behind Business Banking - LLC Bank Accounts

Welcome, everybody. My name is Mark Kohler. Let's talk banking, let's do the trifecta. And here's how it works. Here's your trust for privacy. You're going to have a revocable living trust that you're going to build to hold your assets, hold your businesses, single or married, young or old, yada yada. You got to have a revocable living trust at your foundation. This is where your 1040 tax return is, and I'm going to put it in red. This is where your personal bank account is going to go. All right, so there's your personal bank account, your tax return and your trust. That's your foundation. Then from there, we're going to split your life in half. Boom. And we're going to put your LLC over here with your rental property, cryptocurrency, investments, gold, whatever you want. And over here is going to be your side gig or your full time small business. That'll be an llc. Maybe initially, but we know in the long run we want the S Corp. If you're making more than 40 grand a year net, here is your day job. Now, if you're married or have a partner or something, over here is the day job. That's the W2. That's help paying the bills, keeping maybe some benefits on the table, creating stability so you can blow this side gig up. I want this side gig to create that extra wealth so, so we can drive that money over here to your IRAs, like a Roth. And we're going to use that extra money to build our LLC and our investments outside of our retirement accounts. See, so I have my personal investments, maybe an Airbnb I can visit and work on rental property where mom and dad live or where the kids are going to college. I got my Roth IRA. I may even have a day job, 401k. Can you have both? Can you have a day job, 401k and a Roth IRA on the side? Yes. Yes, you can. And then your trust owns your LLC and your trust owns your S Corp. That is the trifecta, my friends, investments, operations, all flowing down to your trust, your 1040 and your personal bank account. Now you may say, mark, what does this have to do with business banking? It has a freaking lot to do with your banking, because banking is what makes this all flow smoothly. Example, let's say you're like a regular teenager that freaking doesn't put their clothes in the drawers or hang them up in the closet and you walk into a teenager's bedroom and there's crap everywhere right now. As you get older, you realize it's not too efficient. You can't find your shirt, you can't find your jeans, your socks, your shoes. It's a mess. And you're always losing everything. Once you figure out the drawers are actually kind of cool. You have a drawer for underwear, a drawer for the T shirts. You're hanging up clothes, you're putting drawers together for socks and all these things. The drawers make your life easier. And when that clips, oftentimes in your late teens or early 20s, you're like, hey, having furniture actually makes my life easier. Having bank accounts makes your life easier. Those are the drawers of your financial life. And the more you can keep them organized and it actually makes life simpler. Some people like, if I open up my app for my bank, I probably have 20 bank accounts. And I'll scroll through them and show people sometimes, you know, just quickly. I don't want everybody to see my bank accounts. I don't want you to see my dirty laundry. Get it? There's little. Anyway, okay, thank you. Appreciate that. Okay, so here's the deal. When you scroll through my little app for my bank, you may go, 20 bank accounts. I'll go, those are 20 drawers. I know where everything's at. So let's use red. And let's stick with this for a minute. I want you to have a bank account for your side gig. So we have bank account. We're going to call this bank account number one down here for your personal banking. Bank account number two is for your operational side gig or business. Bank account number three is for your LLC with rentals. Now, some you say, well, Mark, that makes it's crazy because what happens if I need money from this business over here? Just transfer it. It's okay. You can move socks from the sock drawer over to the underwear drawer if you need to. Okay, that's not commingling. That does not ruin the corporate veil. What ruins the corporate veil is if I use this bank account to pay for groceries. See, I need to pay for expenses from these accounts that relate to that operation. But I can move money anytime I want. So let's look at personal Is going to pay for clothes and groceries and golf clubs. There's three examples. Let's just say we're not going to be able to write this stuff off because it's personal. But what I want to do over here is I'm going to pay for Home Depot for my tools for my rental, and I may pay for the mortgage payment on my rental what else would be a good one? Landscaping for my rental. All right, so I've got three different tools. I mean, three different places. I might write off tools or expenses. I was thinking of Harbor Freight, to be honest. I was kind of. I love Harbor Freight. If you don't have a Harbor. Harbor Freight around, it's like white trash Disneyland, people. It's pretty sweet. Go in there, you can get all sorts of tools so cheap. Okay, now over here in this business, we might write off expenses to, let's say Apple Store, or I might be writing off dining or my auto. And I could do a little home office here on this side, and I could do home office on this side. What's the other? The store where you buy all the electronics that I'm thinking of. Seriously, you're throwing out Radio Shack? What are you, from the 1980s? What are you been wanting to come Best Buy, Radio Shack? What the hell? What kind of operation are we running in here? I've only seen a Radio Shack on Stranger Things, and so I'm just going to leave that. Okay, so that's. That's where what's his name worked, Fiona? Wynonna Ryder's boyfriend in Stranger Things worked at Radio Shack. Sean Astin. See, I can throw down. All right, okay, now here's the point, people. Let your business bank account pay for business stuff. Let your rental property business account pay for rental property stuff. Let your personal account pay for personal stuff. It keeps life organized. All right? Now why would I say, be careful trusting your banker, because when you go to open up your basic business bank account, they are going to drive you insane. You're going to walk in and go, hey, I need a business bank account. They're going to go, we need your operating agreement, we need your articles, we need the ein. We need your blood test, your Covid post results, your vaccine, you know, you know, statement that you've been back. They give you everything. They're just. They drive you nuts. Now let me say this, everybody. This is so important. This happened to me the other day, and I'll give an example. Bankers are a service provider. What they say is not gospel. It's how they run their bank. If you don't like the services they're providing, go somewhere else. You're the customer. So many people walk into banks and they get intimidated. And for the banker says, this is the way it is. They sound really convincing, but it's bs. You can go to another bank down the street and get a different answer. You can go to a credit. Credit Union, Heaven forbid. And now there's online banking services that are amazing, that make life so much freaking easier. So when you walk into one of the big banks and they give you crap, say thank you so much, but do you really want my business? Because you're making this overly complicated. Can I talk to your manager? Be nice, be respectful. But remember, you're the customer, you're the one in charge. So when it comes to business banking, be respectful. But just realize that you don't have to work with them. Okay, example, I went to an unnamed big bank a couple weeks ago to open two bank accounts. And let me tell you what I was doing. This is kind of fun. This gets you guys juices flowing. Was setting up my LLC for my crypto mining rig. That's right. I look like an old guy, but I'm freaking crypto mining. So here's my trust down here. And I have, in my structure, I have a Roth IRA. Now I've got, I could expand. I've got multiple IRAs and my kids. And I'm not a billionaire, you know, but our structures, my structure is very similar to many of my clients. But in this little example, I have a Roth IRA that owns an LLC, 100%. This LLC is what holds my cryptocurrency. It's a holding company for crypto. That's the only purpose it has. I can look on my app right now as to what my LLC is worth with my crypto wallet. So I have set up a wallet for this llc, but I didn't stop there. This LLC opened another LLC that purchased my crypto mining rig. This has its own wallet as well. So I'm going to call this a little wallet and I'll set up a little wallet over here. Now where is this wallet located? This wallet is in Nicehash. And I can go over to my little Nicehash wallet. There it is. It's yellow. And then it goes over here. I gotta be careful because you can see my bitcoin, my nice hash gets paid in bitcoin. And I can look at my portfolio right inside my nice hash wallet that's owned by this llc. Now, for privacy, I'm not going to tell you the name of my trust. I'm not going to tell you the name of my LLC that holds my crypto. And I'm not going to tell you the name of my LLC that holds my rig. That's a privacy strategy. Now if you want to do business with me, I'll tell you the name of my S corp. All Day long. It's Marc J. Kohler, Inc. Call me. I'll also tell you the name of our law firm, KQS Lawyers. I'll tell you the name of this. See, these are operational businesses and I don't want profit privacy over here. I want you to know where we're doing business. I want to brand those, I want to trademark them, I want to make money. But they don't hold my assets. These bank accounts have merchant accounts. I go to the bank, I open a bank account, I tie my merchant account. Maybe a shopping cart. I was wanting to think of shopping cart in my website. They're all intertwined. I can do PayPal, I can do Venmo, I can do Apple Pay. I want to make it easy for you to pay me and find me to do business, but I don't want you to find my assets. See how I'm combining banking with tax planning with business privacy, asset protection. That's what tax attorneys do. And we don't charge an arm and legging to do this. We can build your diagram in an hour, make a plan for you and tell you what some other surfaces might cost a month because clients have figured out we're kind of a fun little secret out there. So we're excited, but. But today it's free. I'm trying to teach you as much as I can. So I've got an LLC owned by my Roth. This LLC owns this LLC 100%. I'm doing crypto mining up here. So I've got a mining rig with three graphics cards. Bing, bing. So 1, 2, 3. And I'm earning bitcoin that goes into my nice hash wallet. Now I've got other videos on this. You can go to YouTube and type Roth crypto mining. My video will be right up there in the top two or three. Please watch it, you'll love it. I teach more how to do this. But what's the point I'm trying to bring up here? The point I'm trying to bring up here is banking. You can't do this without banking. And if I think about this, if I walk into a bank and go, I need a bank account for my LLC owned by my Roth, and it's going to own crypto. The bankers heads gonna spin and then shoot off and explode, right? They're gonna be like, what the. You know, they're gonna run out screaming out the door. Bankers don't get this. I'm sorry. So you've gotta. I feel like a jerk saying all this, but you gotta dumb it Down. They're on a need to know basis. You're the customer. So you're gonna go into the bank and keep it simple. Don't walk in and go, I'm setting up a property, I'm setting up a family management company to hire my kids. I. Their brain's going to go. You don't say, I'm setting up a Roth IRA LLC to go mining rig, you know, build crypto. And they're going to go, so what did I do? I, Mark Kohler screwed up. I went in there and thought I could talk to this person like a human being. So I went in there, I had my articles. So you're going to have your articles of organization. This is, let me give you the list you're going to go into nine times out of 10, once you get through all the crap at a bank or a credit union or an online banking system. And I'm going to give you some references for some sweet online banks in the notes below. Hang tight. When you go to do this, you're going to need your articles. If you're doing an llc, they're called Articles of organization. If you're doing an inc, they're called Articles of Incorporation. If you're doing a partnership, it's called Certificate of partnership. This is what's recorded with the state. So you have to show up with that. Okay, then they're going to want to see the SS4. SS4 is what gives you your EIN. That's your electronic identification number. That's all you need. Now you probably need your driver's license to prove who you are, but that's all a bank really needs is article and ein. That's it. But they're going to want more stuff because they're a banker and they freak out if they don't know everything. But you're going to keep it simple. But here's what Mark Kohler did. I went in and said, hey, I'm setting up an llc. It's owned by my Roth. And this LLC is also owned by this LLC, is owned by this LLC. I need two bank accounts. Here's my articles in EIN. Here's my articles in Ein. Let's go. The 20 something year old, which is what you're always going to get on the front desk level. He looked at it and I swear his ears started to bleed. And he goes, and he's called Chicago. And I'm like, oh no. And he starts calling his manager and the Reed, hey, I'm trying to set up an LLC owned by a Roth. Ira, you could hear that person's brain explode. And then, I don't know. Let me transfer you. Then another brain was exploding. I don't know what to do. And then I need your articles. And we're going to have to look at the opera grading program. It's going to be three or four days. I said, Stop, stop. I was into this 15 minutes. And the kid's name, his name was Jeff. I said, hey, Jeff. Jeff, stop. Hang up the phone. Please hang up the phone. Okay, let's start over, Jeff, you know you want my business. I've got 20 freaking bank accounts here. You can see them. Jeff, before this gets ugly, let's start over. Let's say I came in, Jeff, and said that I own an LLC, 100% me, I'm the manager, and I have another LLC owned by me, 100% and I'm the manager. Could you just set up those bank accounts quickly if you just had articles and eins? And he goes, yes. And I tried to be funny. I stood up, turned around and said, hey, Jeff, could you set up two bank accounts for me? Articles, articles. He goes, sure, Mark, let's do it now. We were done in 15 minutes. I had two bank accounts ready to go and I was out the door. Did I lie to him? No. A Roth IRA is beneficially owned by me, the beneficiary and owner of the Roth account. I didn't lie to him. I really owned it. Was I the manager of both these LLCs? Yes. And I can be the manager of an LLC owned by my Roth ira, and I'm building cryptocurrency tax free. I had my bank accounts, I kept them on a need to know basis and I kept it simple. Don't go into the bank and start telling them your life story. It over complicates it. I don't know. Was that helpful? We wanted to talk about that so I could keep going on and on. But I get calls from clients all the time that are at the bank and the banker's freaking out. So keep it simple. Tell them you're the owner and just set up the gosh darn account. Now, I don't want you to go in and start laundering money and lying about who owns what and all that. I'm not saying that, but if you're ultimately the owner anyway, you can generally keep it simple. Now Jack here said he had the same problem with the same guy at the same bank the other day. And he said, mark, I walked out and he went down the street to a credit Union, and they just rolled out the red carpet, and they were simple and easy to set up his LLC bank account. Cool. You can go to a big bank and have a good experience. You can go to a credit union, and they're going to want to draw your blood. So, again, shop around. You're the customer, and you get to choose where you bank. Now, in general, I like all my banking at one place because then I can do online transfers. I can look at all of my accounts really quickly on my app. So I don't want to have accounts at a, you know, at a bank. Big bank here and credit union there and online bank there. I want to keep them organized for me in one spot. But other people say, mark, I want diversification for privacy and all these other reasons. So to each their own. There's no right way and wrong way to do this. So I have a bank account here. So let's go back here. You may have an llc. Let's use black here so that it looks uniform. You may have another bank account here. Number four, that's another LLC bank account that's owned by your Roth. Now, a couple other bank accounts I like to set up is an emergency account. And this is a Dave Ramsey and Mark Kohler strategy emergency account. And what I want in there is $1,000. And I also want a kind of a fallback account just in case something big happens that's bad. In this fallback account, I want three months of your living expenses. So let's say around 15 grand, just to be safe. Maybe 10 to 15, depending on what's going on in your life. So Now I've got 1, 2, 3, 4, 5, and 6. Six bank accounts. But look at their drawers. To keep your underwear and socks and T shirts separate. Other bank accounts I might have. I have investment accounts at Acorns. I love the Acorns app. I can swipe up here, face ID go boom. And right here, I have my Acorns account. I love Acorns. And I can see right now what's in my Acorn savings account. I actually have two parts to my Acorns, a short term and a long term. I teach that as well. That's a type of bank account, but it's investing. And I'm going to use this to fund my Roth ira. My kids have bank accounts. You and your spouse may have different bank accounts. So don't stress out about having bank accounts. Treat them like drawers. Now, Jack made a good point the other day. Some of these big banks, they're nailing you 5, 10, 15 bucks in account fees if you don't have certain balances. Talk to them about that right out of the gate. Am I going to have bank fees for a certain minimum balance? I heard Chase is now a thousand. They want $1,000 as a minimum balance or they charge you 10 bucks. Wells Fargo, 100. 500. Shop around. Credit unions. Okay, now, okay, mortgage. All right, last example. And then I'm going to answer Q and A from all you guys. So this happens all the time. Jack, you don't mind if I share your experience? Okay, so my daughter and Jack here, they went out and purchased recently a duplex that they've been able to convert to a triplex threeplex. They're going to probably bring in a couple grand in month with rent and be able to live there for in the third unit. Huge. And they got a sweet mortgage with three and a half percent down. Now it's easy to say what they got. You know, that's really cool. Oh my gosh. They got a three plex under 200 grand and they're going to create 2,000 in rent and live in the third unit for free. I love them. I get excited hearing that story. And I had a duplex when I was in college and I learned how to be a landlord and I was a freaking idiot. Now they're doing a better job than me. Now here's the interesting point. Jack and Allison. My daughter Alison has been hearing me for her whole life. Buy a rental property. Buy a rental property. Buy your first home. Could be a duplex. You should have a basement rental. So when her and Jack got married a couple of years ago, they started saving their money so they could buy a rental. They walked into an unnamed big bank about six months ago. When this process was ready to get going, they had saved up 10 to $15,000. They were ready to go. I told them about the rural development loan, which is oftentimes 0% down. There's also the FHA first time home buyer. Based on your income, you might be able to get as low as 3%. Okay. So they walked into a big bank. Within 10 minutes they said, oh, you can't get a loan. You won't qualify your college students? No good. Maybe come back in two years. That's literally what they said. They walked out demoralized. They were like, what the freak has Mark Kohler been talking about? I thought we could get a loan. I thought we could buy our first little home and buy a little duplex. And they came home pretty dejected and I said, well, tell me about the story. And they, and I said, let's talk about banks. And they got the same speech that I'm giving you right now. And they're like, you mean every bank is different? And I said, yes, let's go to a different bank tomorrow. And I said, dress up nice, I'm not going to go with you. Take your two years tax returns. They'd already been working on their credit score. They had money in the bank saved. And I said, go into a different bank. And they did. They went into a different bank the next day. And the banker said, we'd love to give you a loan. And you know what, I think we can get you into a 3% and let's run an app right now. And they ran the numbers. He's like, here's what your down payment would need to be and here's what your mortgage payment might be. Let's pre qualify you go shopping. Within two to three weeks, they had made a couple offers and it was a lot of work to close the deal because they wanted an FHA loan and they had to do some repairs before they could even close because you had an FHA inspector. But in the end of the day, they shopped around and they, they kept bugging him. See, the squeaky wheel gets the grease. When you work with banks, don't give up. Go to bank number one, go down the next door. Bank number two. I didn't get the answer. I like bank number three. What's the interest rate? I don't like that interest rate. Bank number four, you are the customer. You're the captain of your ship. And if you don't like the bank you're working with, throw them off the ship and find a freaking new one. It's your world, it's your American dream. It's your side gig, it's your rental, it's your home. The bank is a resource. And if you don't like that resource, go to another one. Now sometimes you're asking the impossible and you might get five answers that say no, maybe you need to change the equation and get to work on whatever the problem is. But sometimes you can find an answer. So here's what happened. Actually, that's just the last note. So they went to the second bank, got pre approved, went out and made the offer. And then when they went to that same bank to pursue the loan, they ran into some problems. And I said, well, that's a weird problem. And so I called a friend at a bank and I said, can you help him out, and he's like, yeah, that's weird. They don't know what they're doing there. So the first bank was really bad. The second bank was okay. The third bank actually closed the loan, and they ended up shopping, actually a couple banks. But essentially the third or fourth bank was able to close the loan. So they went from okay to better to great. And so again, you might use multiple banks in the process to get what you want. Okay. All right, that's my speech, and I hope that helps some of you. This is your life. You're in control. Don't get frustrated. Change your mindset. Be positive. If there's a will, there's a way. Don't give up. You freaking keep knocking on doors. Be respectful. Be respectful. Don't be a jerk. Honey always gets a better answer than a baseball bat, and it works out great. Okay. All right. I'm just going to start answering some questions from YouTube and Facebook, and I want to tell all of you, thanks for being here. I love this. I'm having a good time. And if I'm going to read these questions from a few feet away, got to put on some glasses. Okay? Okay. All right. Oh, and before I forget, make sure, please, if you haven't subscribed to my YouTube channel, just search Mark J. Kohler. I shoot videos every week. All the content there is packed with info that is free, of course. And whenever I go live, you'll get a little ping to let you know I'm out there live. And I really appreciate you sharing the videos or anything.