How to Not Be Owned by Your Practice with Garrett Gunderson
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Bulletproof Dental Practice Podcast Episode 61
Hosts: Dr. Peter Boulden & Dr. Craig Spodak
Guest: Garrett Gunderson, author & founder of Wealth Factory
Key Takeaways:
- Wealth Factory is a personal wealth management company with a specialized focus for entrepreneurs in dentistry.
- Garrett co-authored a new book, called “5 Day Weekend.” Look for it on shelves everywhere!
- “The 4 Hour Workweek” is more about outsourcing and frugality. “5 Day Weekend” focuses more on keeping more of the money you make, learning to make more money as an individual, growing your money, and investing back in yourself.
- Dentists got screwed with the new tax change because they’re service-based professionals. Dentists won’t get the pass-through deduction.
- Two major things when it comes to taxes:
- You should have an accountant to get tax deductions. The biggest way to save tax is to reclassify your income which comes from attorneys. If your attorney isn’t a tax attorney, you will be spending too much money.
- Every three years you should get a different set of eyes on your taxes. You have three years to amend.
- If you’ve done any R&D or domestic production. This includes CEREC manufacturing, training, software research, etc. These deductions are additional money you could be leaving on the table.
- Do a cost segregation on any property you own.
- Saving tens of thousands of dollars on taxes is like ten years of investing.
- The two main factors of income reclassification are:
- How can you take your active income and classify it as passive income?
- You’ve created unique processes and intellectual property. Set up a separate company as an intellectual property company. Then pay that company 15% to use that proprietary intellectual property.
- How do you take ordinary income and classify it as capital gains income?
- Create captive insurance agencies. If you do it right, you can put money in pre-tax and create various insurance protections to sell back to your practice. The money taken out is considered capital gains and has better tax benefits.
- You can ensure actual business risks. If you can’t sock away $300,000 it’s not worth doing.
- You can drop your tax rate to 4% if you choose to live in Puerto Rico for at least 4 months of the year and be outside the US for at least 6 months.
- If you have a company event at your home or personal property you can pay yourself rent without claiming it as income.
- LLC’s that hold real estate that is rented out to your practice count as reclassification of income and have valuable tax incentives.
- There’s no reason to be overpaying on taxes when it’s legal and ethical to avoid paying certain things.
- Wealth Factory acts as your personal financial quarterback, and 93% of their clients save significant amounts of money by working with them.
- Two ideas about 401k’s:
- Everyone should look at a charitable remainder trust. You can create tax deductions when you sell assets.
- Even better, look at converting 401k’s to a Roth plan. You have to pay tax when you convert, but if you use a structured annuity where it’s valued at half of the actual 401k. You’ll get a guaranteed future income stream.
- Make sure you build up enough liquidity. People overemphasize investing and underemphasize saving.
- You’ll be ahead of 90% of other dentists by learning how to hire bad-ass people, building liquidity, and owning a building.
- How can you take your active income and classify it as passive income?
References:
5 Day Weekend by By Nik Halik & Garrett Gunderson
Killing Sacred Cows by Garrett Gunderson
The 4-Hour Workweek by Tim Ferriss
Tweetables:
Automatically save and deliberately invest. – Garrett Gunderson
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