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SNM281 Love Your Assets with Scott Royal Smith

• Jonathan Green : Bestselling Author, Tropical Island Entrepreneur, 7-Figure Blogger • Season 1 • Episode 281

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Welcome to the Serve No Master Podcast! This podcast is aimed at helping you find ways to create new revenue streams or make money online without dealing with an underpaid or underappreciated job. Our host is best-selling author, Jonathan Green.

Today's guest is Scott Royal Smith is a real estate investor and entrepreneur who learned the importance of asset protection through personal experience. After a friend lost over $5,000,000 in a lawsuit due to owning assets in his personal name, Scott realized the limitations of insurance coverage. Drawing from his background in litigation, Scott understands that lawsuits can arise from various situations, such as car accidents or breach of contract actions. To safeguard his own assets, Scott utilizes anonymous asset holding companies to ensure he doesn't personally own anything. His goal is to help others become "bulletproof" by educating them on the importance of proper asset protection.

In this episode Scott Royal Smith shares his expertise on creating separate LLCs for business operations and asset holding, as well as the benefits of using a Series LLC. He emphasizes the importance of compartmentalizing assets, managing books and banking, and hiring professionals as your wealth grows. The discussion also touches on the power of anonymous trusts, tax optimization, and the need for proper risk management.

Notable Quotes

- "I think that's where I see people get messed up as they think that, like, they can cut the corners of the ways that people have always done it." - [Scott Royal Smith]

-"The taxes actually end up becoming the best asset people have that gives them a 50 to a 100 percent annual return for what it costs to do good tax planning if you're making over $152,100 a year typically where we see that."- [Scott Royal Smith]

-  "If you do all of your business operations and through operating companies, make it where you operate like rich people do where you don't own anything, but you have companies and those companies own those things and you control them, then that's how you set yourself up to win the game." - [Jonathan Green]

-  "You really do have to do the stuff from the beginning, like separate your personal and business bank account." - [Jonathan Green]

Connect with Scott Royal Smith

Website: https://royallegalsolutions.com/
LinkedIn: https://www.linkedin.com/in/scott-royal-smith/
Twitter: https://twitter.com/royal_legal_law
Facebook: https://www.facebook.com/ScottRoyalSmithRLS
Instagram: https://www.instagram.com/royal.legal.solutions/
YouTube:

Connect with Jonathan Green

Jonathan Green: How about your assets with today's special guest, Scott Royal Smith?

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Are you tired of dealing with your boss? Do you feel underpaid and underappreciated? If you want to make it online, fire your boss and start living your retirement dreams now. then you've come to the right place. Welcome to Serve No Master podcast, where you'll learn how to open new revenue streams and make money while you sleep. Presented live from a tropical island in the South Pacific by best selling author, Jonathan Green. Now here's your host.

Jonathan Green: Now I'm really interested in kind of the legal and tax world that a lot of people that become entrepreneurs never think about until it's too late. And I've saw in some of your content you mentioned that people in real estate always end up getting sued. Like, 95% of people end up in lawsuits. Can you tell me a little bit about why that happens? And is it because they're all making mistakes, or is it just what makes it so inevitable?

Scott Royal Smith: I mean, with everything here got really clear from you when I friend that lost over $5,000,000 from a single lawsuit. And he was an entrepreneur, and it was a real estate investor, but he owned all of his assets in his personal name And so then he had a deal that went sideways that he was working on, ended up in a lawsuit. And he thought, like, oh, my insurance is gonna cover me from protect me from these you know, from lawsuits and stuff. And nobody didn't know as an insurance never covers you from anything that's at a, like, breach of contract action or anything like that. It only covers you from really basic accidents. And because he had all his assets in his own name, they knew that he was, like, a perfect contact to, like, sue. and then boom. Then I gotta, like, lost 1,000,000 of dollars essentially overnight from a lawsuit. And this is really typical, actually. For my background working on litigation, I was suing insurance companies before I got into, like, wealth building through real estate that you find that, like, insurance is a great 1st line of defense, but It it's really just a partial defense to what you really need if you wanna become bulletproof and that honest people get sued all the time. Because what happens is somebody gets hurt, they wanna blame somebody else. And so what everybody lies. It's just the nature of the game. Right? That's why everybody hates lawyers, but it's the system. The system is built up for everybody to lie about everything. And so you can't depend on people being honest. It doesn't matter if you're honest. Really, all that matters is did you do the preparation to make sure that you're covered in case something happens? So what are the most common reasons that people end up in lawsuits? Is it just because of a deal doesn't work out, or are there other things that cause it? mean, lawsuit's gonna happen for a lot of reasons. Right? Like, we have some people that'll come in place that end up with a car accident that exceeds the limit's liabilities of their car insurance policies because they just wanna the absolute cheapest insurance. And then boom. Now they're in a lawsuit. Right? And how they have all their assets and their personal name, and so now everything they own is subject to being taken from them from the law It can happen because, like, any contract that you have, whether it's with, like, a tenant in the real estate space or any of your business contracts, even things down to, like, simple, like, text messages and emails, right, hiring contractors to work on your house. All of these things, if you're doing them inside of your personal name, any of them can pop up. to be a lawsuit. So the the game isn't how can you control what's gonna happen if a lawsuit's gonna happen because lawsuits can come from anywhere in life. Right? You you never see them coming. They hit hit you from the side. What you can control, though, is what is the system that you operate in? So if you use, like, anonymous asset holding companies to make it where you don't own anything, and then it's all held anonymously. If you do all of your business operations and through operating companies, make it where you operate like rich people do where you don't own anything, but you have companies and those companies own those things and you control them, then that's how you set yourself up to win the game. really, in an area where you can't control the inputs. You gotta control the outputs.

Jonathan Green: I think a lot of people have this perception. Like, oh, I'll do that stuff when I have enough money or when it's worth it. What Like, what does it cost for someone who's starting out and going, okay. I wanna put some protections in place. I mean, I know so many people they don't even do an LLC. Right? But to get, like, protections in place where they say, okay. I'm gonna set up a holding company. I'm gonna set up my first anonymous asset company. How much money is all of that for initial setup gonna cost for somebody who's, like, just entering this idea?

Scott Royal Smith: I mean, it it really can depend, right, on a number of factors. I would say that everybody should set up an LLC, especially if you're making over $50,000 a year. if you're making over $50,000 a year, you should have that LLC taxes and S Corporation and save yourself unemployment tax. And then the next question you have to ask yourself is, like, is it the right time for me to set up holding companies. And the answer is, do you care if the stuff that you have right now gets taken from you? because if you do, then you need an asset holding company. If you don't, you don't need one. Right? because you're gonna really, the question is you're saying, is life still gonna be okay if this kind of scenario happens? And if you're saying, no, life is gonna actually be really brutal if scenario happens. And I'd say, great. Well, then let's do some preparation work. It's, like, the reasons why we buy insurance for, like, our automobiles and stuff like that is the same reasons why we should be thinking about legal protection and other protections. Now for our clients that are making good income, like, typically making over 200 k a year, when they come in and being able to see what it is that we're able to do, like, on the tax side of the fence for them. But we're saving people over 20, $25,000 in taxes every year from using, like, private foundations retirement, advanced retirement planning options, like, really making sure they're maximizing the deductions, etcetera. And those get really expensive. Right? Those are, like, 20,000 plus relationships for us, but it's because we're saving so much money on the taxes. Right? So the taxes actually end up becoming, like, the best asset people have that gives them a 50 to a 100 percent annual return for what it costs to do good tax planning if you're making over a 152100 k a year typically where we see that. But if you're, like, making less money than that, then it's keep it simple. Like, an LLC to hold your assets, separate LLC, taxes an s corporation to save money on self employment tax, and just keep it there. If you're making more money, then you need more tax planning and some more sophistication is really gonna help you.

Jonathan Green: So let's talk about that because that's very interesting to me because a lot of people I've been involved in a lot of LLCs, and people always do, like, my first business partner, open an LLC, with a bank that was, like, 9 hours away from either of us. I was like, why did you because it was like he's like, I'll save an extra 1% on taxes. And I was like, I don't know about that. It's, like, too much complex. I wanna be able to go to the bank. Right? There was no branch in either of our cities. And he was like and a lot of people, like, think they have to set up their LLC in Las Vegas. I know it has some tax benefits and stuff, but there's other complexities there. As in there's cost, you have to have a location or pay for the office and all of those things. But I've never heard about this idea of having 2 LSCs, and this is interesting. I wanna get into this. So someone's starting out. A lot of people think it's expensive to start an LLC. Right? They think, oh, but you could do it yourself. cost that much money. I think it's a couple $100 at most. So you set up 2. Right? One LLC is the business and 1 LLC is your stuff. So your car, your house, That kind of stuff belongs to the second LLC. How do you firewall the 2?

Scott Royal Smith: Yeah. It has to do with, like, how do you operate. Right? So what you're gonna do is you're gonna hold all the assets Either you wanna create these LLCs in Delaware, Texas, Nevada, Wyoming, and states that have strong charging order protection. All of those, I really like Texas because it doesn't have any annual fees. But Wyoming is by far the popular. Nevada and Delaware are can be expensive for the reason. And so you would then set up 2 LLCs. I like for my asset holding company. I like to use a Series LLC if I'm located in the state besides California. The Series LLC allows me to create one company that to form, one company to maintain 1 EIN number 1 set of accounting books. But a series of LLC allows me to create an infinite number of LLCs essentially for free. Right? So that becomes really baller if you're making, like, investments inside of syndications, you're owning real estate or other hard assets because you can compartmentalize every single asset freeze if there's a lawsuit who gets one asset. Like, grandma slips and falls on one of your rental properties. She can't come after any of your other properties. She can't come after you, she can't come after your businesses. It's all compartmentalized. And then for your operating company, it's a completely separate just traditional LLC. And if you have, like, brick and mortar store, then you have to form in the state. where you're located. Right? If you don't have a brick and mortar, then sometimes there can be options of forming in a state where it's really cheap and easy for compliance purposes. And then to just use that LLC as the front facing name for for the front facing company that you're doing business through. So it's 2 company structures, absolutely essential, and then you have to just manage the the books and the banking of those as if they're separate entities. and make sure that your asset holding company is not directly doing business with anyone because you don't want that company directly doing business with anybody because then now all of a sudden that company has liability. So you wanna keep that the thing that holds all the assets having the least amount of potential lawsuits that can come against it as you possibly can. And then you operate. Right? And then there's more complexity on to this too, right, where it comes in like, well, how do you wanna layer in your tax saving vehicles? How do you integrate all of your estate planning that comes with that? And how do your insurances have to work? And that's where, like, firms come in handy. because if you just need, like, a basic, like, LLC, like, those are people have really figured out how to do that, like, really cheaply. Right? And if you're at that level, you're like, god. I gotta save every cent that comes into it, then you should just do that and do the absolute basics. You're starting to make some make serious money, making over a 150 a k, you're starting to have, like, over half a $1,000,000 in assets. This is where it starts to make sense to start hiring professionals to look over your shoulder because now you have some stuff worth like, if you lose, you're gonna be sad, or you're gonna lose money on taxes because you're not tax Optum.

Jonathan Green: Yeah. I think what you're talking about for the beginners is so important because a lot of people think, oh, I don't do anything until I make in the 200 k. Right? And then they then sometimes something happens before they hit there. And what you mentioned about one asset per LLC inside the series is so important. I was studying this thing about Masterworks. Everyone's like, oh, I can mess in art now. And what Masterworks does is every single art piece. Every painting has its own LSD. So they're all firewalled, and it's exactly the same thing. So each painting is its own company. So if there's a problem with 1, the other ones don't get affected, and that's really important because sometimes people you hide all of your you put all of your assets in one company, but something happens in one asset. Like, yeah, your car is owned by the same company as your house still end up being in the same problem. Right? If it's in the same LLC, your car accident could still affect the house.

Scott Royal Smith: That's right. That's why you needed to compartmentalize everything. And then we like to hide everything behind anonymous trust as well because we know it's, like, really good to have the the compartmentalization saves you if you're sued, you can only lose that one thing. But the anonymous trust layer on top too, it makes it wear, like, that one of those sharky litigation attorneys, you know, you get into that car accident. It's a bad car accident. People get really hurt. You know, four people in a car. Like, you're talking 1,000,000 of dollars in medical bills and all pain and suffering and all that stuff, and your car insurance policy might only cover up 5.50 to $250,000 depending upon what policy. So what you wanna do is you wanna take all of your then is then hide them behind revocable grantor trusts, which are just anonymous trusts. They just screen the name of the entity and your name off of the public record, and then you can use an attorney to be able to be the person connected to that trust with, like, their name and their address. So that way, all of the information is further protected by the attorney client privilege. your name doesn't hit anything on the public records. It's hidden behind these anonymous trusts, and then it's compartmentalized. You'd be surprised how affordable this stuff is. It doesn't complicate your life at all. It all runs in the background and provides same levels of protection because it makes it look like you qualify for food stamps if anybody ever looks to after you and people that look like they don't have anything, just don't get sued. And then you're also able to integrate in these additional protections. And I always tell people I was like, you're better off. doing things like the right way, but just at a very small level. Right? But do things the right way. Just do it in a small level because then you're learning systems and processes instead of saying like, well, at some point in the future that I don't even know when that I'm gonna take some action. That that's something never happened. You just keep kicking it down the road for forever.

Jonathan Green: Yeah. That's why I like talking about the beginner face stuff because I met people who their home address is still their business address that happened with someone I was working with last year. I was like, are you crazy? you know, this app early days when people would set up websites, it would list your home address for anyone who looked up your website's DNS before they made it to anonymize that, which is crazy because I knew people who heads a customer or some visited their blog, then came to their house. You have to have a business address that's not your home address for sure. And it's, like, really basic things and, like, oh, I can use my Social Security number as my LLC number. Right? Like, people learn that trick. It's like, no. You want a separate EIA. It's not expensive. If you go I went through it. Like, I talked to accountant once, and he was like, it was very expensive per LLC number. I was like, well, I can just do it myself for $50 because I've got I did it for my first 2. So I think that's important for people to see in that you really do have to do the stuff from the beginning, like separate your personal and business bank account. And that's what I wanna dive into next because this is interesting to me. Very because have to do a whole bunch of stuff after this call because I gotta get more sophisticated as what about your bank accounts? If all of your bank accounts are under your LLC, does the the asset holding 1? Do you have bank accounts over there? is that where you move your money to?

Scott Royal Smith: Yeah. So what you wanna do is you wanna take in all of your money through your operating company. Because that's your front facing company. And then after the money gets taken from the operating company, it gets shifted over to your asset holding company, and that's where you're, like, long term cash storage is. And that's where you're gonna be pulling stuff out of to make investments with or whatever. Right? And then at the end of the year, then that money that you have that you wanna take in as, like, profits to you gets distributed from your asset holding company into you. likely, all these things are gonna be all disregarded entities or it's gonna be disregarded entities from the asset holding side. Right? And then your s corporation will have, like, an employee, a w 2 wage that pays to you and also dividend income. So you'll have 2 tax returns at this point. You'll have 2 bank accounts. You'll have accounting records that show here is the income, and income and expenses for each asset if there is separate in income expenses for each asset inside of your asset holding company. if you have, like, a series LLC, that would be the case. And it's really, really simple to to navigate. I think we have, like, 11 ebooks 2000 hours of optional videos over at the royallegalsolutions.com website that walks everybody through here is exactly how it works. So our goal was to always give away all the info for free, and then people that wanna hire us, get great. If not, then if they're if they're on the DIY stuff, like like, you or Jonathan on it. I'm like, hey. I can just set this up. It's like, well, we wanna get make sure you have the best information actually do it. Right? because most people don't. Right? But it's possible to do it if you are diligent and detail oriented and have some great training out there about what that looks like at a high level. So but that's how that works. Did I answer your question about the banking?

Jonathan Green: Yeah. That's really good because that's something that I think that people sometimes forget money as an asset. they're just named up putting their car or their house or rental property, but you want your money behind that wall too because that's the first thing they go after I knew someone he got sued, and the lawyer didn't go to court that day. And the they just pulled the money out of his account. He just went he looked in the account, and there was just the money was because that's what the government can do. And it's just like you don't realize all it takes is one mistake. I guess if your lawyer forgets to show up, like, that's obviously a pretty big mistake on their but I remember I was there that day working with him, and he was like, $75 is gone just like that because it wasn't that account. It, like, happens out of nowhere. Right? It's just like, now all of a sudden, now, like, the money's gone. that's why people don't understand about, like, the power of, like, lawsuits is that you can get sued for an unlimited amount of money, and then they can just start taking your stuff, right, into it. It's wild. There's this perception that if I'm honest, everyone else will be honest, and no one will ever sue me, and nothing bad will ever happen that kind of and it's the same thing I see when people, like, get like, get accused of a crime, they go, well, I'll just be honest, and I don't need a lawyer and everything will work out, and it never does. Right? Always ends up terribly for them. So it's interesting. There's these 2 systems. Right? There's the system how things really work, and then there's a belief that if I'm just a good enough person, no one will ever assume we know and will ever be bad, no business partner, and do they shady to me. But the protections are really critical, and I think it's something that we think that it's only for rich people. Right? We think, oh, I only need to do that when I'm thinking about Pat. inheritance stuff or passing assets to my kids, but things can happen before then. There's so many surprises in life. What are some of the most common mistakes people make, and additional ones you've already talked about, that people make when they're starting their businesses or their early days of their business. I think, especially, there's this thing now where Owen calls their business a side hustle, which I hate because it means they don't take it seriously, and which means that those of you who definitely aren't doing LSCs are, like, putting the structures in place because they're still just dabbling. What are some really big mistakes people are making in that phase? Like, maybe in the 1st 2 to 3 years of their business?

Scott Royal Smith: It's a really good quick great question. Right? And especially around my point of, like, when do you supposed to set the up. Our average client is typically between the ages of 35 60. They're males. They you typically make over a $150,000 a year. and they haven't done a whole lot in the past. Or they if they have, they've done it on their own, and they're looking to step it up to the next level of, like, okay. How do I make sure all of my estate planning is really right with all my LLC and how do I make sure I'm paying the minimum in tax. And most of them don't know that, like, as w two wage earners even that you can still do stuff to protect yourself taxes using private foundations and cool stuff that's out there. Like, they're like, oh, no. I don't have my own business, so I can't. It's like, no. Absolutely. You can. And if you have a really sophisticated tax adviser like we are, then These are the the types of things you should be paying less than 10% in total tax and your effective tax rate. You don't know what your effective tax rate is? you figure that out because if you're paying over 10%, you're overpaying from what we see is, like, typical into it. And the real the reality situation is is that a lot of times, it's like that people we will really screw up is that they try to cut so many corners. Right? Business is really done. Business is people are I I feel like. Don't tell me if you have feelings differently about this. But I feel like businesses and how the business runs and how wealth gets created is supposed to be boring. Right? It's supposed to be, like, a very formulaic like, step by step. I come in here. I turn these cranks, and then this is, like, the outcome. And that's what they call, like, best practices. And when you operate by best practices, that's how it The part of what your product is and how you're innovating to be able to help somebody, that's the creative side. But that's the product. It's different than your business. It's different than wealth. Right? Like, you're not supposed to go out there and invest in super shiny objects are gonna blow up by 10,000%. Your wealth is supposed to create, like, a formulaic predictable way. I think that's where I see people get messed up as they think that, like, they can cut the corners of the ways that people have always done it. That's the most effective way to repeatable result into it. And then what happens is, like, something blows up. Right? It's going well for a while. They're like, quite, I need an LLC. just gonna run and gut it like my own name because I didn't wanna spend the money and have to figure out how LLCs work on bank accounts or whatever, and it goes really well for two and a half years. And then one thing happens and then boom, their business is gone because they didn't set up an LLC. Right? That's dramatic. Right? But it's the same thing, right, of, like, if you say, well, if you just follow the basic practices of what's the best principle here that thing would have never happened to you, but you would had to go, like, a minutiae level slower in the short term to just do things the right way.

Jonathan Green: Yeah. I see that a lot of people get caught by the Flash. Right? Like, we see all of these investment platforms that, like, guarantee a 10% or 20% return. And, like, they said there's no risk. Right? And all of these, like, that's how everyone got excited by crypto. And what happens? It turns out that there was something shady going on that's only great returns that are unmatched Right? You can't create a 30% return without any risk. There's not low risk and high return. It's one or the other. And I see that same idea, right, is that people go high risk because they get it's really exciting. One of the biggest lessons I ever learned was when someone in real estate said, every deal you look at the downside, not the upside. because it's easy to get emotional about a deal that can change your life, but it why that's why most people a lot of people in real estate. Right? One bad deal takes them out because they didn't look at the risk. they don't look at the risk profile. That's a huge part of my business when I get approached with a project as I look at how much risk I have in my business right now. Right? project pays me up front, that's a no risk. If it pays me based on results, that's a high risk. And I look at that because especially if there's a component outside my control. Like, if they have sell the product or release it, that's high risk. And a lot of people don't think about risk profiles, and it's the same way that all of these, like, Instagram ads and promises of you can make massive wealth by putting all your money here and there. And it's you're right that the most boring stuff is the most effective. The most Boring part of my business is my systems. And every time I work on systems, my revenue goes up a lot. And more than anything else, working on project management software, working on spreadsheets, Every time I improve that part of my business, everything else gets better. And it's not the fun part. It's the least fun part. Right? Everyone hates spreadsheets. I certainly do. So I think this is Then this reason I had you on is because it's important. Sometimes we wanna talk about the fun stuff, but then it's not the most important stuff. And I really like talking about this because I always learn things that could help me continue to improve and continue to improve the way I approach the business and the way I do the numbers and the way I create protections as I have 4 kids, and we have a very specific things we're trying to create for them. And there's I think my one of my great regrets is that we got rid of financial education in America. Like, they used to have home ec, which everyone thinks was cooking. It was like, no. It's home economics. When I graduated high school, I didn't know the difference in AP why an APR, right, like a credit card and a bank account. Like, one gives you money and one takes you money. Right? Interest rates, and we don't understand that stuff. And there's really, really poor financial literacy in America, which surprising. But most people don't know what they do. They've seen an S Corp and a C Corp and an LLC and a sole proprietor, and they think sole proprietor is a great idea, but that's the most vulnerable. So This is, like, really critical education that's just so lacking. Like, a lot of people don't understand banks at all. Right? Like, where did the fees come from I moved to a lower cost fee in one of the trade offs, and that's so important. So when someone is transitioning from working for someone else to working for themselves, there's a lot of changes. Right? Like, you're used to working on other people and now you're by yourself. Like, the way I work is high risk because it's all on me. Right? if you work for a large company, you don't do a good job. You get paid either way if you work your hours, whereas you've burned yourself. If you don't perform, then the money's not there. What can someone who's in that transition phase, what are the kind of ways they can manage their risk profile and limit risky behavior? Because there's a lot of information, and it's not always good information.

Scott Royal Smith: I mean, yeah, I think it's really just about following a best practice. Right? If you just follow best practice, typically, what you're gonna find is that's the right balance between the amount of risk to take, and that's inside of a a solution. Right? The the the thing that it comes to before, right, is where it's saying it's like, well, where does it with the way that we tried to solve this problem is by offering free education for everything that we right? What we know is that the more people that become wealthy, alright, or the poor people that get on the path to actually just doing some of the right things will eventually turn into customer support in the long So that's why we committed to this way we commit to having thousands of hours of, like, video instructionals out and books to be able to talk about this stuff because the reality is that it's always worse to not follow a best practice game plan. Right? And if you're making the transition to say, there's really clear benchmarks. Right? I'm making the transition to if I'm still a w 2, then I need to set up a private foundation. I need to start making oil and gas machinery and construction machinery type investments that will apply against my w 2 income to be able to lower my tax rates. Great. Now that I have enough money doing this, then great. Now I'm gonna go stake off of my own because I have enough of a runway, and I have enough of investment that I can make start my side hustle. It'll just start my own business. You start making that business. You say, great. I'm gonna put it inside of an LLC because inside of that LLC is where I know that if any of my clients something goes wrong with one of my clients and they sue me. They can't come after all my personal assets and limit my liability in doing that. Once I start making over $50,000 a year, then I'm gonna say, great. I'm gonna take that LLC, and I'm gonna have elected to have a Texas NEST Corporation. I'm a split the dividend the income between dividend income and w 2 income from my own company that I have there. I'm a save on self employment tax, and I'm gonna keep going. for that. As I start making more money, then this is where I'm gonna still keep pushing money into the private foundation that I had already set up that protects 30% of my AGI, and also gonna start looking at asset holding companies because now I'm starting to have maybe a 100, a $150,200,000, like, stacked away, and then I wanna have pushed it to investments in the market or incisal alternative investments storage units, real estate pieces, the host of other things that we help clients connect with, but you can really invest in whatever you want to. Right? you'd be doing an asset holding company once you start having, especially 6 figures being pushed into inside of assets. And then you continue to grow. And after that, but really all turns into as an investment in tax gain is understanding what are the finances in my life, how do those flow through to help me save the most money I can on taxes for me to control my expenses and to push as much money I can into investments that generate me passive income because with asset based passive income, that's actually how I become financially free. My business is not safe enough for me to become financially free because businesses go up and down in cycles, products change. AI comes to the market to blow up the whole thing. if you really wanna say, like, cool. I'm financially free. Only people that are actually financially free are the ones that have asset based financial freedom number because, like, your apartment checks that come in from owning your apartment, those come in every month because people gotta live. Right? You need stuff that's like that. That's the boring side of life, but it's also the exciting side of life. Because if you follow, like, this, the game plan that I teach about, how do you get from the very beginning? The big game plan I just gave you the 10 thousand foot up overview. Your wealth and your financial freedom is guaranteed It's the speed of it is just gonna be what's the speed of your execution. How sophisticated can you get on your financial education? Because everybody has pretty terrible financial education. coming in. And then, also, it's how well do you actually understand the way that your business works to increase your top line revenue. You need to understand how your taxes work to make sure the government doesn't from you, from taxes, and that you don't lose it from a lawsuit, and then you need a deal network that says, well, actually, we're gonna push this income into. And is it possible for me to get 10, 15 plus percent cash flowing types of investments to me, and how does that work? And how does that play out for me long term? So, like, getting wealthy and getting financially free isn't easy, but it's understood. Right? All of this stuff is very well understood. on how to do it. It's just about putting in the time to do it. If you don't do it, you may never get there. If you do it, I can guarantee it's easier.

Jonathan Green: There's a lot of, like, all these things online that are, like, 4 business here, 4 business there, and they charge these huge fees, and they set you up, like, with a remote office. And A lot of people get pulled in by these things and they spend 3 or $5000 just sending them an LLC, not because they don't know you do yourself. Like, when I filed my first Trade mark. When I found my first trademark, I got all these letters from Laura saying, hey. You totally messed up. You just gotta help out. Pass a huge feat. We'll fix it. And I was like, no. I think I did it. Right? And my trademark got approved, but there was so much, I guess, as soon as you submit your information, like, they auto email you and send letters and stuff saying and I've already gotten letters now because I just have I'm up for my renewals. It's been 5 years, but it's like, there's this We're convinced that things are so hard that we need to pay really expensive services for the basic stuff. And then what happens is when someone needs a service like later on, and they're like, well, I got burned the first time. I'm afraid to use a better service. So what are some things that people can do when they're looking at their options and they're looking for, like, how to form an in different companies. What are, like, red flags that, like, it's a shady company or that they're massively overcharging? because I run into this in multiple things. The same thing happened when I was marrying my wife all the paperwork for the Vysics. They live in another country. All these lawyers it's like, over a couple of $1000 will help you. And I was like, I did it myself, and it cost $200, and we got everything worked on the first try. So it's not always as hard as we think it is, right, at some level. So what are the red flags to look for when someone's, like, looking for setting up an LLC or a remote office or a remote mailbox or these different services. Like, what are the things that, like, you definitely tell people watch away watch out for those because you're just overpaying or getting get it burned.

Scott Royal Smith: Yeah. I feel like this is, like, one of those conversations that comes in where it's like it was my first guy that was trying to hire me to be sales coach. And I was like, why don't I need to use sales coach? I'm locking down sales. And now to convert, I can run you through, like, a slide deck and a script. And, like, I can convert you all day. Right? And he's like, yeah. But he says, what happens? Like, if all of a sudden you stop converting, do you have anybody that's helping you coach through what happens change scenario? Or is your conversion rate as good as it could be into it, or is it just working? And how do you know it's really working the way it should be? Right? Maybe it's way better. into it? And how is that gonna fit into the other parts? So there's, like, all these questions that came up to it. Right? It's there's a difference between making that something works and then something works well. that comes into it. But so the question, I think, really boils down into is how do you actually know what's quality and what's not. Right? Yes. So anybody who's quality is gonna charge you money do it, but they should be able to show you some stuff that you don't understand. Right? Like, the people that I've met in my life that I, like, spend money on, and I spend a ton of money on coaches and professionals that I work with. Right? And I have a deep ass network of ballers that I know just from me being my entrepreneurial experience, being an investor, being an attorney, I'm always looking for is people will be able to tell me concepts they don't really understand yet. Right? Like, you need to be able to tell me something that's possible that I don't necessarily believe is possible. need to be able to explain to me how is that possible coming into it. And then and then I wanna dig in to let the education behind it. So that's what we've endeavored to do. I mean, we're a legal solutions as a team of 30 for attorneys, big team of paralegals who operate nationwide. And the big piece of it is I said, all of our education is gonna be free, and we offer weekly group coaching for all of our clients coming in, which is forty people every single week that come into it. And that we give away as people come in as their first point of contact to us will say, well, what are you where are you working with right now? And whatever the thing is they're working on, whatever problem they come in with, like, we immediately start to experiment. Like, here's our best education materials that are about that subject because we know that, like, education is really, like, where it's at. That's our first, you gotta get educated before people can take action because we're the the lowest price of the top end providers. Right? We're never gonna compete with, like, legal Zoom on LLCs. Right? So what do we have to be able to deliver to people is gonna be something that says we actually we understand better how all the things have to work inside of a system because it's not just an LLC. It's like the LLC that really and how it is related to your state planning. How does the LLC relate to your asset holding Has the LLC relate to your taxes? All of those pieces that have to come into it, that's what you're supposed to pay professionals for. It's not forming the LLC. The LLC is easy. Right? Of course. But it's how does the whole business have to operate is where you want to be looking for who do you hire professionals, whether you work with us or somebody else. Right? that's the pieces. And when you're trying to look at who how do you my my personal opinion. You're looking to qualify professionals. That's what I wanna see. So all your education upfront, is it free? Do you hide things behind pay walls? if you do, then you're always playing a game with me that says that you're gonna be trying to monetize information, like, in an inappropriate way. You should be monetizing action, not information. And then 2, who can I meet of your of, like, you've helped so far? Can I talk to them about what the actual process is like? And, 3, are you telling me some concepts I don't really understand? And I think that, like, most people that hearing the concepts that I broke down about, like, here's how it shifts from private foundations and how you tree scale up between, like, your first LLC to your asset holding company to estate planning and all those pieces work together. That's what I'm trying to do right now. Let's be like, hey. Are these concepts and ideas that are already super fluent for you? because if they are, you're an absolute animal, and I wanna talk to you about how and the hell you learned that because it took me 8 years to figure all this out. And if it those are new things for you, then I'm like, great. Well, come get more educated. Right? And then if you get more educated, then I'm potentially being willing to work with you as a client, but I'm not gonna work with anybody that's not educated because it's too difficult to work with them because they don't understand. like, what how things are supposed to be working there. I I think this is where I'm trying to hit. And, Jonathan, you can tell me, man. I mean, I'd love to have some feedback, but that's exactly the line I'm trying to ride, which is, how in the world do we possibly vet high level professionals in our lives? because if you can't know exactly what it is they do, what are all the context clues. about whose quality.

Jonathan Green: Yeah. I always look for that because in every industry, right, there's always, like, a bunch of coaches pop up, like, everything. You're like, oh, there's I'm a script writing coach. How many movies have you made? None. I just coach. Well, wait a minute. Like, I always look at that stuff, and For me, I write a lot of books, and sometimes editor I had an editor company. She's like, I'll re edit your book for $17,000. I was like, my book's number 2. It's like outselling Harry Potter right now. What are you gonna do for it? And she's like, well, I'll fix all the mistakes. And I was like, yeah. But it's got 505 star reviews. What are you gonna do? And she I was like she's like, well, I'll make it perfect, Graham. And I said, let me ask you how many of your clients are best selling authors? She got real mad. And I said, uh-oh. That's because I said that's what I care about. Like, for me, I if my book has a ton of mistakes, but it's the best selling book in the world. And I've got 5,000,000 new customers. Like, I'm okay with that. Like, that's and so I always look for people who their decision making calculus matches mine because some people, like, they want is not what I want. Like, I don't care. I had employee ones who was, like, really obsessed with reach. And I said, yeah. I don't care about that metric. That's imaginary. I care about dollars. Like, reaches how many friends you could have had. Like, for me, reaches In high school, I could have had 500 friends because 500 other guys went to my high school. That was my reach. I didn't have 500 friends. So that's why I hate that metric. So I always look for people that can talk about concrete metrics. And people again, I do hate when people hide the basic stuff behind a paywall. There's always things. Like, I can explain exactly what I do. Anyone asks me, Give me 2 hours. I can explain my entire process for planning at road mapping writing book, making a best seller. It doesn't mean you can do it. Right? But I'll explain it to you. And that's the thing. Sometimes people hide the information. I used to be that way too. Oh, I'm a writer. So if you want my words, you gotta pay for them. And we think that if I hide the words so people pay for it, I'll see more valuable. But, actually, what people think is, wow. This is the free stuff. The paid stuff must be amazing. And so, actually, the more you give away, the more that people trust you and are will invest larger money with you. And that's how you go from exactly selling the $97 LLC package to the $50,000 setting up 7 trust package, and it's, like, which markets you wanna be in? Like, charging for information or charging like you said fractions. So Those are the things I look for. Like, I get approached, as you can imagine, constantly with offers to promote to my audience and also constantly with different types of coaching things. And I'm like, do you know something I don't know or I always look for, like, oh, is what you're doing now working? What if it stops working? Well, then maybe I'll talk to you. Right? Like, that's a weird pitch. I wouldn't respond to that, but there is and it's the thing is there's remoras in every market. Right? Like, what happened in 2008? The market went down. Everyone became a realtor. In 2020, we had other lockdowns. Everyone suddenly was a coach. And I met never forget. Someone one time I said to someone one time, who was, like, suddenly a coach. I said, well, why are you a coach? I said, he goes, I'm not a coach by choice. the people demanded it. I was like, yeah. But I know you don't have any clients, so that's definitely not true. So, like like, it's like That one was like, oh, wait a minute. Because the people aren't demanding and clamoring for it. Right? Like, the people are demanding it is different. And it's that's the thing is that It's so murky because entrepreneurs because there's no financial literacy. It's very easy to prey on people. Right? Because we don't know. How do you what should LLC cost? I remember when I'm someone was like, oh, it cost me, like, a $1000 system in LLC for you. I was like, wait. What? Like, it doesn't. it just doesn't cost that. Right? because it's a I know what it costs. But if you don't know what it costs, then you don't know when someone is overcharge you, and that's, like, where things get tricky. And so that's why getting that's why, like, When I pick guests for the show, I look for people that can teach me things I don't know and can teach my audience things they don't know. And there's especially in areas where the information is very like, there's just so much information out there about what you should do. If you google form an LLC, it's a nightmare. Like, It's a nightmare of information that's, like, all these different things. Like, oh, I need to have my LSCs in different states from each other, and I need to have different mailing things. And I know people who, like, you you can't send them letters because their way their may their thing is set up. Like, their address isn't real, or they have a p like, common mistake I know about is you set up a PO box because I don't have a PO box. Well, guess what? So many forms say no PO box allowed. Right? And so you can't use that. And that's, like, it's weird because you can't use a PO box for stuff with the government for half your stuff. Right? And that when you send in your taxes, you send that to a PO box. So these little things that we think we're the right way. Like, I made a mistake. I wish when I had sent out my mailing stuff, I do the ones with services that will scan and send me the letter when I wanna see it. Instead, I have to have them send it to my mom's house, and she tells me what and scans it. That was what I was saying. I mean, 12 years ago. Right? Like, whoops. But that address is on my driver's license and everything. To go back to America and change, it would take 2 months because everything is pointing to that address, all my bank accounts and everything, but we're always gonna make takes, but the important thing and this is why I'm really glad I had in the show is to see that you can always make it better and that you can't predict when bad things are gonna happen. Nobody was predicting lockdowns. Nobody was predicting 2008 economic downturn. Most of the time when bad stuff happens, it's not your fault. Like, you said, a lot of people they do everything right and still someone says, oh, here's an opportunity here because they haven't done their finances right, might as well sue them. Maisel PullLip and fall.

Scott Royal Smith: And I think that's, like no. My question comes from my the the always is for me is about, like, what makes life more durable. Right? If I can't control actually what's gonna happen in life, what are all the things that I can control that help me set up to be able to say I can take as many risks off the table. Right? So it's like, cool. I got LO that they're those are gonna protect me from lawsuits. Right? And then I have my business. And then I was like, great. Well, I'm gonna grow my business from having a high ticket offer here that I'm gonna promote because that's gonna let me bring in more cash, and I can accelerate the growth of my business by cash. But I'm also gonna have some really bang in as subscription services that I know are gonna be cheap. And but they're gonna be super high value, and now that turns into, like, my steady revenue generation. So I derisk my business. And then my profits, I take those and I invest them inside of stuff that's gonna double my money each like, 5 ish years. Right? Like, with through some real estate stuff, through storage units and apartments and those kind of things because that's how I derisk my assets. into it. And I have, like, cash flow that comes in through that. And then I'm looking at, like, well, great. What are the other just simple wins that I can make? And it's almost always in tax. Right? It's in tax and using private foundations and using the right kinds of investments, whether between real estate or, like, oil and gas machinery types of investments. that pay me good returns and then help me get, like, lower inside of my tax. But everywhere along the way in my life, it's always about creating stability, like, as much possible stability as I can because life, for me, actually, is okay as long as it always keeps getting better. Right? And so a life that is always better the next day than it was the day before because of the way that I'm growing. It says, regardless of what happens the rest of the world, there's, like, a lawsuit or an economic downturn or I get sick or whatever, and life actually still continues to be okay. To me, that's what it's all about. Right? And if I can just take all these risks off the table that make life spike down, right, then I'll avoid that stuff that makes people aged 10 years in a year. Right? So that's the way I think about it. And too, I don't know if you think about it differently.

Jonathan Green: No. I like I mentioned earlier, I think that risk management is such an important part of business because we get caught up in the growth. And so we take any job, any prospect. Like, early on, you're like, I'll take any client no matter what. You take on the client. It takes up all your time, and then you take the higher paying client. Like, the best client I ever had early days was like, look. My time is worth so much more than yours, calling you on the phone is losing me money. I'll just send you the money every single month You send in one email a month. Someone on my team will read it, and I'm never gonna talk to you again. I spoke to him the day he hired me in the day I closed that business down. I was moving in another direction. And it was like, that's the client you want, not the one who's calling you every single day because it's our last $500 a month. And that's part of risk management is that going, oh, this isn't the right thing to do. And we think about risk there, but it's also important to think about how my I worked hard to make this money. How can I protect it? I was telling my wife earlier today, like, maybe it's so much easier to not spend a dollar and save a dollar than it is for me to make it. And it's like we some like, many people get really rich is controlling the money out more than controlling the money in because it money is exciting with the money out is, like, how can I control the cost on this? How can I get a discount? I'm always asking my kids to school. I was like, hey, guys. If I pay a different way, can I get a little bit of a discount? because it adds up, and that's really the difference. So I think derisking is such a critical topic because we don't talk about it because it's scary. Right? Like, my friend, one time was sick, is like, I don't wanna go to the doctor because I don't wanna find out if I have something. I think that's why people don't look at their taxes, don't look at their books. Certainly, I'm guilty of that many times in the past, and it always ends up becoming a problem. So this has been really great episode. I appreciate you giving me so much of your time. What's the best place where you will find you? Where can they start finding all this free information to start figuring out how to set up their first how to set up their 1st series LLC and get started on this journey.

Scott Royal Smith: Yeah. Best thing to do is actually just go to our homepage, royallegalsolutions.com. on there, it has all of the the prompts. So there's a badass, like, video that I have in there that's super educational. It's about 30 minutes long. There's a ton of client testimonials to see on there to see, like, hey. Do you fit? real estate investor or other type of investor. And then you'll see that there's other, like, links on the at the top of the page to get into, like, our mighty networks. What we call is our is that we host all of our content on Mighty Networks. And so that's the place where our community is interacting with each other. That's the way you can sign up for all, like, the free week of coaching that we do about creating wealth protecting it as all the estate planning, the investing, all of those pieces that come in. So we're a huge community, actually, of entrepreneurs that happen to also be investors. And we're everybody's shooting to be able to get to that 5 or 25,000,000 net worth mark and get to their cash flow right to be able to have durable financial freedom. So we our belief is you need to be 5,000,000 net worth to be able to say, like, cool. I can have asset base, 5,000,000 invest appropriately, and then you should be, like, out of the if you're interested about how to accelerate your path to that 5,000,000 or if you're stretching up to get to that next level of lifestyle at 25,000,000, then have to royallegalsolutions.com and to start clicking on things until I get involved.

Jonathan Green: Thank you so much. This has been amazing. Thank you again, Scott Royal Smith. from Royal Legal Solutions.

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