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This business coaching lesson teaches individuals tips on how to gain financial independence.

Results-Focused Training, Tools, and Workshops from Expert Business Coaches.

Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Lesson Nugget: There are many creative ways to get the things you need so that you can have more money to spend on the things that you want.
  • Lesson Reminder: Invest in what you know!
  • Lesson Nugget: How you manage money affects every part of your life; take time to learn how to manage it properly.
  • Lesson Nugget: Most people end up retiring with no money. NOT investing in something that can make your money work for you means you will probably end up like them.

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OK, so how do we do-- what am I saying right now if I have furniture, Braxton, and I'm like, I just love buying furniture. What would you say to me if I want to move from the liability? How do I get into the asset column here?

-Well, I mean, you want to sit somewhere, so it's not like it's, it's not a sin to buy furniture. But just keep it real. I mean, look what you're doing or watch what you're doing. There's nothing wrong or shameful about going on Craigslist or going to a garage sale and finding something that's quality and not just going straight to the retail store.

Keep your furniture at a level that isn't extravagant. And just figure out ways to cut costs in the liability area so you can have more money to invest in good ideas.

Invest in people. Invest in yourself, and things that are going to make you money.

CLAY CLARK: Now, I want to throw out a real thing for you. This is a little bit terrible, but it's OK. Again, we talked about the vast majority of people when they approach retirement have no money. And Warren Buffett says, be greedy when the market is fearful.

And what I've found is if somebody's going through a divorce, that's a great time to buy their couch, because they're like, we don't care. Just get it out of our life. We want to sell it.

So what you do is you buy a car from somebody who's going through an emotional time or somebody who's being fearful, someone who needs to sell it. Somebody who's moving, somebody who's being transferred, somebody who has to get rid of it will sell it to you cheap. So the key is to buy stuff half off all the time. So that's a key.

If I want to buy a few assets, are there some assets? We have cash. Would you recommend I invest in my own business? If I'm somebody who wants to get ahead, should I-- would you invest in your-- Is that a--

-That's the most ideal scenario. If you have cash in the bank, too much of it, you've got to figure out a way to invest in yourself and your own business or somebody that you trust. Somebody that's doing something well.

CLAY CLARK: So invest in a business. Now, the big thing I want to tell you, some of you are watching this and you're saying, I don't know if I want to invest. Isn't that risky? I'm going to throw it out for you.

90% of you will definitely retire with a negative net worth unless you buy a business.

So it's actually risky not to, because worst case scenario, your the 90%. So it's kind of a deal where, I mean, it's not actually risky. It's actually risky to not do it. So I'm just throwing that out for you.

And if you're going, I don't know what kind of business I would start. A franchise is a good idea. You could invest in a friend of yours who has a business that's profitable. Just look for opportunities to put your money into something that actually pays you as opposed to something that costs you.

- And I'll say this. Stocks are assets, but if you don't know much about the stock market, you're investing in something you really don't know. Now, there's some good and fairly safe investments out there. But if you have somebody that you know that you trust or preferably yourself, that is a better asset in my mind than in investing in stocks if that's not your normal business.

CLAY CLARK: Yeah. Now, I'm going to throw this out here for you. It says, most people don't know how to manage their money because it's not taught in school. And parents don't know.

I'm not faulting anybody, but I grew up in a home where we didn't have a ton of money. And my dad's an awesome guy. But we just didn't know these financial success tips.

So I think it would be hard for my parents to teach them if they didn't know them themselves. But why is it not taught in school? Why is the teacher, the average college professor, the average teacher, why are they not teaching these principles about financial management and how to buy assets in college or high school?

-I mean, well, we just have this culture of standardization where it's really we're just going to teach to the, you know, no person left behind. And I understand why people get into that and all that. But you've got to take action with your kids and with yourself figuring out ways to teach them stuff that are not being taught in schools.

Personal financial planning, what are some of the biggest issues in people's lives? It's just the way that they manage money. It causes stress. It causes fights. It causes all kinds of stuff.

So to me, teaching yourself personal financial planning is more important than teaching yourself calculus unless you're a calculus guru.

CLAY CLARK: So moving on to principle Number 10 in this business education training. Pay the tax man, but not too much. I think there's a certain, almost like, unpatriotic idea that people have their mind about taxes. Like, you're not being patriotic if you don't pay taxes. We're not talking about not paying taxes.

But we do want to make sure you're aware of how many taxes you do pay. The principle is, you want to pay the tax man, but not too much. So we don't want to underpay.

And I have been audited before, so I can tell you what that's like from firsthand experience. And Yujinae, my incredible IRS agent, I want to thank you for every moment I got to spend with you. It was a special time.

Featured Coaching Excerpt - Notes & Transcript, Part 2
  • Lesson Nugget: Bigger cities typically have bigger tax rates for property taxes. If you live JUST outside the county lines of that bigger city, you probably will pay less in property taxes.

[MUSIC PLAYING]

-A higher income alone does not mean that we're going to get ahead of-- that we'll get out of the financial burdens than most people are in. We're basically stuck in this rat race, because a lot of people-- they make an income, let's say of $50,000 per year. And they believe that they can live on a lifestyle of $50,000 a year.

BRAXTON FEARS: Yeah.

-But after taxes-- I want to throw this out for you. The average American right now, if you take-- equals-- your take-- on pay. So $50,000 times 0.5. So 50% is your take home pay. Think about that. So the average American, after taxes, if you make $50,000, after taxes, you actually only have $25,000.

Uh-oh. Could you imagine if you went out there and had budgeted based on $50,000, but you only actually had $25,000? And some of you watching this right now-- by some of you, I mean all of you, are saying, "That's not true. I only pay 8.75%, or I only pay 18%, or I live in Florida. I don't have any taxes at all for my income."

But you, my friend, are wrong. And I will prove to now, so here we go. So here's the thing. $50,000. We have income tax. So with income tax-- what, Florida, Texas don't have income tax, but everybody else does, right?

BRAXTON FEARS: Yeah.

CLAY CLARK: Then we have property tax. Braxton, do you have any idea what your property tax is? I don't know if I know what mine is right now. But do you know what yours is?

-Mine's very low, because I've moved to a location that is purposely very low. I just live on the other side of the county line, so that's another tip there, if you can do that. But for my typical house that I had, a $300,000 house in Tulsa County, it was $4,000 a year.

-What?

BRAXTON FEARS: Yeah.

-OK, so just real quick. Property tax. We don't know what yours would be, but I want you to look at your next-- if you have a mortgage, look at this, figure this out. Your property tax.

Then you have sales tax. Now, every time-- I don't know about you, but every time I go to the store, and I go to buy batteries for like $1, I get a bill for like $1.10. And I'm like, "What! I thought I was only-- is it $0.99? You guys said, for under--" Or when I get my cell phone, they say for $59.99, you can have unlimited. But my bill's like $74. So sales tax will get you.

BRAXTON FEARS: Yup.

-Then-- we're moving on here. We have luxury tax. What is an example of a luxury tax? Like, if I buy a boat-- I think if I buy a boat, I have a luxury tax, right? I think if I do-- Airfare now. If you fly on a plane, there's a new tax for that. So if you do anything that's like, because you're just a greedy person who wants to go on an airplane, then you're going to pay a luxury tax for that, right?

BRAXTON FEARS: Yeah.

-Then we have-- like if you smoke. So basically, if you smoke-- you know, it might be offensive. That's OK, deal with it. But if you smoke, or if you buy lottery tickets, or if you-- I guess, smoking would be one. I guess lottery tickets would be excluded. But smoking, alcohol has a tax associated with it. Any kind of behavior that might be bad. Rather than the government saying, "You cannot smoke," we just tax you more.

BRAXTON FEARS: Right.

-Makes sense? If there's anything that's like-- drinking, there's a tax on it. So if I go buy a vodka, I'm going to pay a tax on that. So then we have permits.

BRAXTON FEARS: Permits, yup.

CLAY CLARK: What if you go fishing? You're just wanting to take your kids fishing, Braxton. You ever taken your kids fishing and had to pay a tax on that?

-I don't know if I've ever done-- yeah, fishing, or hunting. Or, I mean, you get into business, you got tons of permits, or building a house, if you're doing construction at all, you've got permits that are [INAUDIBLE].

CLAY CLARK: Now this is the kind of thing you won't hear anywhere else, but I'm going to tell you this, on record. Go ahead, it's fine. I like to go ahead and build first, and pay fines later, because it avoids permitting. So what I would encourage you, is if you own a business, find out what the fine is, and then find out what the permit is. And usually it takes about six months to get a permit, and it takes about a day to get a fine.

So if you just build, then get a fine, and you just pay that fine immediately and you're good, whereas a permit you have to wait. And for me, time is money, and I'm only going to live once, so I like to pay fines rather than get permits. Some people would rather get permits. But the point is, either way the incredible government gets paid.

BRAXTON FEARS: Yeah.

-And I am so excited about the quality of my roads, and so I just want to pay as much as possible.

-Yeah, that's the raw and the real, right there.

[LAUGHTER]

Yeah. You gotta do to go do. But, yeah, regardless, one way or the other, you're going to pay permits, unless you're my man Clay over here. But that's a good move.

-Yeah, that's a move I endorse. I build first, apologize later. And if you're watching this and you work for the government, you're probably on the wrong website, because it's called Thrive, not just survive. If we were at survive.com, this would be a great site for you. So here we go-- moving on.

[MUSIC PLAYING]

CLAY CLARK: Now we have tollbooth Willie. Toll booths. Uh-oh. Toll booths. Now, if you go through by a tollbooth, that's not a tax, right? I mean, we go through the tollbooth.

BRAXTON FEARS: No, it's a tax.

-Come on. It's a fee, it's not a tax.

-No, well, OK, it's going to the government, so it's a tax.

CLAY CLARK: OK, so it's a tax. You convinced me. OK.

Featured Coaching Excerpt - Notes & Transcript, Part 3
  • Lesson Nugget: Paying a tax professional will help you save money and ensure that your taxes are being filed correctly.

[MUSIC PLAYING]

PRESENTER: So, now we move on. Now we go into a franchise tax. This is my favorite tax. This is the tax that I-- I didn't go to church and really ask for. I didn't do a special prayer of thankfulness for this particular tax, but I got close. It was the deal where I felt special when I paid this tax. I remember my first year in our business once we hit, like, a million dollars of revenue, I got a bill that says my franchise tax. And it's 1% of the value of all the stuff I own, just because. [LAUGHTER]

I was like, this is a new tax that I am thankful for, and I just want to thank whoever came up with this for this great way-- because I love our government and I love our roads, and I just want to pay more. So you have the franchise tax, right?

Then we have a cellphone. We talked about it a little bit. We have a cellphone usage tax. Have you looked at your cellphone usage tax?

BRAXTON FEARS: I don't even look at my cell phone bill anymore.

CLAY CLARK: You need to look at that.

-I just have to pay that thing.

CLAY CLARK: No, this will make you happy. If you feel sad--

BRAXTON FEARS: All those extra fees, yeah.

CLAY CLARK: This will take your frown and turn it upside down, if you just look at that cellphone tax.

-It's one of those things I can't control, so I just don't look at it.

-OK, well, you're missing out on joy. I'm just going to take then you have travel tax, talked about gas tax. Now this is something that will blow your mind. Anybody here who's into the Illuminati, the end times, the conspiracy, the black helicopters, that whole deal, just look up how much money you spend on gas tax. It'll blow your mind. You'll be more upset about that than any black helicopters. Trust me, you'd rather have government officials tapping your phones than paying gas tax. Like half of the cost of gas is tax. So, gas tax is absolutely, absolutely monumental here.

Then we move into vehicle tagging. And, Braxton, do you remember when you paid for that sweet Suburban in cash? And then remember paying for that sweet, sweet--

-Oh, yeah.

CLAY CLARK: You remember that feeling?

-You've got to go to stand in that line at the DMV, and you've got to pay that tax and that tag. It's not fun.

-I can practically hear the National Anthem in my mind, just playing as I pay that tax, because of my patriotic, just civic, ugh! I felt so good when I paid that tag.

-Now, other taxes. Is there any taxes I'm not thinking of, that I'm not aware of?

-Man, you're covering pretty much all of them, I think.

-I've got a few more that I wanted to throw out, because I just thought of them. Now, they're not coming out of a place of bitterness. This is happiness. I love paying these taxes.

We have Medicare, right? And I think, by the way, I think that the government's ability to manage their budget shows that we should give them more money. So they can keep a balanced budget, so I just want to keep giving them more and more. But Medicare tax-- we have social security, which if you guys get a chance to see what our national debt is right now-- I'm pretty sure it's zero-- but social security is a great thing to invest in. I love that one.

And then we have-- what else? I think-- well, I think that's about it.

BRAXTON FEARS: Yeah, there's more, but I don't, you know--

-The point is, you're going to go from $50,000 to $25,000, and you just need to just hug an American flag and say thank you for all the taxes you get to pay. But it could be a problem if you're budgeting based on that.

BRAXTON FEARS: Yeah.

-Now the only way that I know to reduce your tax liability is to own a business.

BRAXTON FEARS: Yeah.

-I mean, right? That's it.

BRAXTON FEARS: Yeah.

-So we'll have other episodes about this. You can check out Thrive and look all these things up. But if you own a business, there's certain write-offs you can take, because the theory is if you're an employer, you'll probably hire more people than an employee.

So there's probably a dude right now at Best Buy who maybe brings a team of employees with him every day. But as a general rule, employers hire more people than employees. And thus, they're going to give you a little bit of a tax write-off off there. So you might only have to pay, instead of $25,000 in tax, you might only have to pay-- let's say-- $15,000 of tax. So you can pay less tax if you own a business.

BRAXTON FEARS: And I think it's important to note that if you're a business owner, it's very important to budget this way. But it's also worth your money to hire somebody that's a good tax professional. It's going to be much cheaper for you in the long run. You might say, man, I'm paying this person, whatever, $600 a year to do my taxes or more, whatever it is.

But it's worth it, because you just sort of go I'm not going to focus on so much the stuff that I can't really control. I'm going to let them do it. I'm going to let them do it well. I'm going to let them save me some money and get me through what is legal to get through to get that tax liability down.

-And I will say this. On Thrive, we have some accountants that will be on the shows, different episodes. Like Marvin Morris will be on here, and he'll teach you some great things. We are not tax professionals. But what we can say, is that we all know we do pay a lot of taxes. And I 100% agree with what Braxton just said.

It's super important that you start to view paying a tax professional as an asset, because it helps you save money, as opposed to a liability where you're just trying to hack your way through taxes. Because I have been audited before, and even though that created a unique opportunity for the IRS agent, Eugenia, for her and I to bond in a special way, I would recommend you want to avoid that by paying a tax professional.

-Yeah. I have an accounting degree. That was my degree in college, and I worked for Ernst & Young, one of the large accounting firms in the country. And I still pay a tax professional. I do not do my own taxes, because they can save me more money. It's not my core business. And it takes the burden off of me. I'd rather focus on things that I can control, things that I'm good at, and it's worth it in the end.

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