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Hello, and welcome to the trusted podcast. I’m Blake Johnson, your host. And today we’ve got a great program. We’re going to be talking about some financial planning and especially as it relates to business owners, and I’ve got landed, man, uh, on the call with us today. So Lana, thank you for joining us and having a great Trusts Attorney Las Vegas service.
Thanks for having me, Blake. Good to see you old friend. Yeah.
And I think everybody’s waiting to get out and have more social interaction. So at least it’s nice to talk almost face to face.
Yeah, definitely. Definitely looking forward to our next lunch. Cause I think it’s on you so
Well, cool. Um, give me a little bit of background about yourself, Landon, about your, your company and you know, what makes you an expert in the field of financial planning, especially as it relates to business owners?
Yeah, sure, absolutely. Um, so I’m, I’m a financial planner and um, you know, we, we offer financial planning through Lincoln financial advisors, which is a broker-dealer and a registered investment advisor. And, um, my practice, uh, actually just got a little, um, this got a little, uh, update, we’ll call it a makeover if you will. And, uh, we, we went from operating as man’s wealth management to your future planning partners. And we now are exclusively focused on serving private business owners. Um, and really I got into that, um, because well, it started a long, long time ago when I was a kid. Uh, when I was about five years old, I, um, was approached by my grandfather and he said, Hey, if you can save up 250 bucks, I will, uh, I’ll match it. So I’ll triple it. I’ll give you 500 bucks. And so I said, okay we are the best Trusts Attorney Las Vegas so now what?.
So I went out and I picked lemons off of our trees and I sold lemons and I mowed lawns and, and I did everything. I could raise that money and sure enough, he matched it. And, uh, that was a lesson that really stuck with me, um, for my entire life and kind of had a lot to do with why I got into financial planning and also why I got into serving private business owners. He was a, um, really successful entrepreneur. He was an inventor, he was a real estate guy. So he did all kinds of stuff. And my dad’s a 40-year entrepreneur, you know, mostly in the real estate industry. My older sister owns a successful women’s clothing boutique out of long beach California. So when I say that it runs in our, in our DNA, um, it really does when you are the top Trusts Attorney Las Vegas.
Awesome. Um, so let’s just jump right in and talk about investing. What are some of the biggest mistakes that you see people make when they’re trying to get into investing? Are they the mistakes they make when they start investing?
Yeah, so I would say the biggest thing that we see and we see it, um, I mean, so far in my short 10-year career, I’ve seen it 100 out of 100 times with business owners and it’s, it’s a lack of coordination. Uh, business owners set up different accounts at different times with different advisors, with different objectives, which really results in this, in this lack of coordination. And, um, and I think that has to do with several different, you know, reasons. I think, um, business owners typically don’t seek out, you know, an advisor kind of like myself that really focuses on all the different facets, not, not only in their personal life but also in there, in their business lives. So, uh, they end up getting sold stuff throughout, you know, throughout the years because what happens is a problem arises or a suggestion is made or a life event happens. And so they, they go out and they address that particular issue one by one, which really results in them, just having a hodgepodge of different stuff. And there’s just no coordination between any of them.
Okay. Um, what about, um, and what about when the people are trying to go and find, um, find the right person or the right investment? What are the issues that you see are mistakes you see there when people are trying to find a certain investment or, um, find what’s going to be the best way for them to invest?
Yeah, so I think that’s, um, I think that translates right over from what I was just saying. And, um, you know, when they’re, when they’re trying to go out and find the right strategy or the right solution, a lot of times it’s based, you know, it’s based solely on a, um, an immediate need or, or desire or fear, you know, because something has happened and now they, they feel like they need to protect themselves or they need to diversify out of the business or they need to do whatever they need to do because of a, uh, an, uh, an issue or something that has happened in there, you know, currently in there, in their life. And so they go out and they try to solve that one particular problem, uh, by buying a life insurance policy or by buying an undo, an annuity or whatever the case may be. But when they do that, um, by thinking they’re solving one problem, a lot of times it’s creating one, two or three additional problems on the back end, just because there’s that huge, that huge lack of, of coordination with solid Trusts Attorney Las Vegas services.
Gotcha. Okay. Um, so, um, let’s talk about really, what, what, what areas where, or were, do business owners get confused and, um, no, but what am I trying to say here? Um, let’s back it, let’s talk about, um, COVID-19, let’s talk about how business owners can, um, protect themselves financially and, um, you kind of prepare and make sure that if something like COVID-19 happens again, um, that they have that financial stability, they can weather a storm like this. So I think that is, you know, this is really unprecedented where something such an outside force has the ability to shut down businesses and people wasn’t prepared for it.
Yeah, definitely. Yeah. I mean, you know, the word unprecedented gets has been thrown around a lot, but really there is not another word to describe what we are all, you know, going through. And, um, a lot of business owners, some that we serve and some that we’ve had conversations with or that we interact with, they have literally, you know, looked at us across the table and said, you know, our business is recession-proof. You know, we, we, we are not worried about, you know, what may happen in the future because we’ve weathered all the storms and then COBIT strikes and businesses are just stopped dead in their tracks and businesses that were thriving on all different levels when it comes to our Trusts Attorney Las Vegas services. You know, some have gone from X amount of revenue to zero, you know, I have several clients who have very healthy, successful businesses and they literally have zero revenue.
And not only do they have zero revenue, but they are processing, um, refunds, right? So there, they’re literally negative cashflow. So it’s just a really interesting time. And to, to answer your question, um, some things that they can do is, and this isn’t, this isn’t going to be new to anybody, but, you know, you’ve probably heard this a million times, but having a healthy cash reserve right now, but that goes more than just a that’s more than just being applicable to your business. Right? So typically in your business, you want to have somewhere between, you know a better Trusts Attorney Las Vegas, two or three months on the low end, up to maybe four or five months on the high end of cash that covers your all in the monthly nut. So payroll fixed expenses, you know, an estimate of your variable expenses. So that if something like this happens that you can still operate as-is for a minimum of several months, you know, without having to tap into other reserves, but also, um, not just having a healthy cash reserve in the business, but also having a healthy cash reserve or a healthy amount of your wealth that you built up outside the business.
For example, um, we have a client that we serve, and, uh, they’ve got a really successful business that’s in the travel industry. And as we all know, that industry has essentially gone to zero right now, more or less. And, and, um, over the last couple of years, we were able to, uh, move, you know, a significant amount of her wealth from the business onto her personal balance sheet. And so what’s happened now is that even though her the business has dried up, um, you know, she’s in a position where she has all these other accounts and sources of cash that she can tap into outside of the business if she should so choose to. So it’s important to have that cash reserve in the business, but it’s also important to have, you know, a sufficient amount of cash outside the business, because it just, it just gives you options. And during times like this, having a lot of options is, is certainly a positive.
Yeah, definitely. Um, and the thing is, like you said, it’s not new, this is something we’ve been told over and over again. I think it’s just one of those. This is one of those experiences that drives it home. And I think business owners, um, and even individuals are never going to be the same, you know, just like, uh, I think about my grandparents and they lived through, um, you know, the great depression and so everything they did was the result of the experience they went through, you know, not wasting any food, eating at home all the time, cooking their own stuff, conserving everything, never spending, you know, luxuriously. Um, and you know, it’s sad that we had to go through this, but I think in the long run, it might be better for us as a society to get that those habits back of setting things aside, making sure we have those cashiers there. So hopefully that’s one of the positive things we can take out of this big negative situation.
Yeah, definitely. And also for, for private business owners now is probably, you know, especially for business owners that are in the later stages of their business, you know, in their fifties, sixties and seventies now is the absolute crucial time for them to start looking at their business and to start understanding what their succession plan is going to look like. Because you know, this may be setting business owners back to five, 10 years from, you know, transitioning out of their business into a different stage of their life because of how they’re getting affected. So it’s just a really unique opportunity for business owners to really start understanding what their exit options are and how that impacts their, you know, their personal financial situations.
Uh, w why don’t you speak to that a little bit more, let’s talk about exiting. What, what are some things that business owners should be looking at from a financial perspective when they are looking to exit their business with a good Trusts Attorney Las Vegas service?
Yeah, definitely. So not, not saying that our process is the be all end all, but, um, you know, because our process is strictly focused on serving private business owners. Now, the first thing that you have to do is you have to do a personal and business valuation, right? You have to understand what your business is worth. You have to understand what somebody would be willing to pay for it because every business has a range of value and for smaller private businesses, if they don’t have a significant amount of assets, you know, machinery equipment, stuff like that, their range of value for their business could literally be zero to X million dollars, because you could have a really successful business. But if you can’t find somebody to buy your business, your business is worth nothing, right? So that’s a big challenge is, you know, you’ve got to understand, you know, what your business is potentially worth it with our Trusts Attorney Las Vegas.
You gotta do a valuation of your personal assets, right? Because then you can kind of back into what we call filling your value gap, right? So this is where somebody is today. This is what somebody’s business might be worth in the future. You know, what is that gap that they need to get from their business, whether from a sale or from accumulating resources, so that when they are no longer owning or operating or working in their business, they’re pretty confident that they’re going to have enough money to support them and their families for the rest of the time. You know, that, uh, that they are on this, you know, on this earth and also getting an understanding of the different exit options and how they impact you financially, because if I’ve got a business Blake and, um, um, I do, you know, I said, I sell widgets and I want to sell my business to you as an attorney.
There’s, there’s no synergistic, you know, value there. So you’re just going to pay me probably strictly based on the cash flow of the business. Whereas if I go out and I find another, you know, um, uh, another business that does plastic widgets, and maybe they can use my wooden mold, you know, uh, my, my wooden molds to better build their widgets. So there’s some synergistic value there. So I might be able to get a lot more money for my business if I find a synergistic buyer, as opposed to just a financial buyer. And then it goes even further to, well, what if I don’t want to sell it to an outside party? I want to transfer my business to the family, or I want to transfer it to employees or my management team. All those different approaches have significantly different financial values. So it’s, it’s just about getting an understanding of what those value, what those values look like to you, understanding, you know, what a business owner’s objectives are, and then, you know, trying to match them up with the most successful, uh, you know, potential exit with a new Trusts Attorney Las Vegas solutions.
Um, let’s talk about differences in investing with just a regular individual investor versus a business owner. What, what are the main differences there? Do they invest the same way or is it, um, you know, very different in that regard?
Yeah, that’s a, that’s a great question. So my answer is yes and no. And then, yes, the business owners want to invest like nonbusiness owners more on their personal balance sheets, right? So sometimes it’s difficult to, um, in FYS or, uh, I guess I’ll use the word, you know, persuade a business owner to invest outside of their business. That’s why, as you very well know Blake, cause I know you have a lot of business owner clients that they have a significant, you know, they typically have a significant amount of their wealth tied up in their business because if, if you’re a business owner of Blake and I’m trying to convince you that it’s important to have some wealth outside of your business. And I say, Hey, let’s, let’s build you a traditional investment portfolio. We’ve got some stocks, some bonds, some, you know, whatever in it.
And I say, you know, hypothetically, you know, Blake, we’re going to, we’re going to, we’re going to seek a return, a longterm return of, you know, six or 7%, you know, hypothetically and you say, okay, well that, that sounds fine, Landon. But if I reinvest my money into my business, I can make 20, 30, 40% because that’s what I’ve been doing in my business every year for the last five or six or 10 years when it comes to your Trusts Attorney Las Vegas. So that conversation can be difficult to have with business owners to help them understand why it’s important to shift some of the wealth from their business to their personal balance sheet. But, but hopefully, this whole COVID madness has, uh, you know, help them to understand that importance a little bit more. But, um, so yes, it’s definitely important to invest like a non, uh, a nonbusiness owner to have that, you know, well-diversified, you know, uh, portfolio on your personal balance sheet, but, but also, um, um, it is important for business owners to be investing back into their business because some business owners, they are, you know, they’re stuck in their businesses, dry of cash because they’re taking all the cash out to support their, their personal lifestyles.
So you gotta, you gotta help them help business owners find that you know, find that right balance of, you know, keeping money and investing in the business, but also taking some chips off the table so that you’ve got some, some personal wealth, um, as just an additional bucket too, to have.
Yeah, I think that’s important. I think that’s one thing that really distinguishes, you know, a business financial planner versus somebody who just deals with individuals. They’re not going to recognize that some of the cash does need to go back into the business or that they need even keep, you know, like you said, the six months in the business in cash, you know, most traditional buyers are gonna say, Oh, you got all this cash over here. Let’s take that out and invest it. And that’s not necessarily the best strategy. So it really is coming down to someone who understands how the business operates and, and all that. So I appreciate that point for sure with a good Trusts Attorney Las Vegas. Um, so I, you know, you are, um, you know, we’ve worked together a long time, so you’re one of a part of the trusted network. So what, um, what does it take for somebody to find a qualified business, financial planner? You know, what things should they look for when they’re interviewing people? What are some red flags they should be on the lookout for those kinds of issues?
Yeah. Yeah. Thanks for that question, Blake. I love that. Um, so when, when a business owner is looking for, um, an advisor, you know, they need to, they need to ensure that that particular advisor has a deep understanding and experience working with private business owners, right? Because somebody that understands all the different facets of a business owner’s business and also their personal life, that is somebody that is going to be able to serve a business owner, um, effectively. Um, also you got to understand what the business model of the advisors that you’re looking into looks like, right? Because if, and that, and that starts with, that starts with just asking good questions to the advisors that you’re, you know, interviewing, um, if an advisor, if they, if their practice is, is the majority of the revenue comes from selling life insurance or annuities, which a lot of advisors, that’s kind of what they do, they call themselves financial planners, financial advisors, but all they do is go out and sell life insurance or annuities because those are the high ticket items.
If that’s what they do. Um, then the business owner needs to just understand that because what’s going to happen is these advisers are going to use those as a solution to all the problems that a business owner has. Right? So they’re going to, they’re going to kind of get, you know, rabbit hole because, you know, that’s how the advisor gets paid. So therefore that’s going to be the solution to the business owners’ problems. So it’s important to find, you know, an advisor that works in a comprehensive manner, um, that that is not just focused on investing your money, but is really focused on understanding how your business is intertwined into your, you know, your personal lives, your family lies, you know, your legacy, you know, um, your estate planning as you very well know. So it’s just, it’s, it’s important to ask good questions, to get an understanding of how an advisor operates, how they get paid, what what’s their clientele kind of look like? What’s the makeup of their clientele? Cause that’ll give you a pretty good understanding of, uh, how well that they may be able to, uh, to serve you with our new Trusts Attorney Las Vegas.
Yeah. And then I would just add, um, you know, we do this with pretty much all, everybody who’s been on, the trusted podcast is, you know, ask around if you’re a business owner, most likely you’re going to know other business owners ask them who they’re dealing with, ask your attorney, asked you your CPA. Chances are, they’re going to know somebody who does this, um, or at least point you in the right direction. And, you know, word of mouth definitely goes a long way. Cause you can get a lot more information from the person they’re experienced instead of directly from the person that you’re trying to, to hire for our Trusts Attorney Las Vegas services.
Yeah. And I’ll add one other thing real quick. Um, collaboration. I think that collaboration is so important when it comes to serving private business owners, right? So if I’m a business owners advisor, you know, and you are, and they’ve got another insurance person and they’ve got maybe a, uh, uh, uh, you know, a corporate attorney or whatever, you know, to be able to get all of those advisors together in the same room or nowadays, and on the same, you know, WebEx and it, it just needs to happen, you know, one time per year typically, but collaborative collaboration amongst, uh, business owners, advisors, I just cannot stress how important that is. I can tell you every single time that I am on a phone call with a client’s CPA attorney insurance person, maybe it’s there, you know, their CFO or their, you know, their key people in their business.
Every single time I’ve ever been on a collaboration call like that, there is something positive that comes out of it that none of us would have been able to do or identify on our own. So I just think that that is so huge. And unfortunately, it just doesn’t happen enough for whatever reason, but collaboration amongst business owners, advisors. I just can’t, I can’t tell you how imperative that is because it just, it, it solves problems that identify issues. It gets people on the same page. It’s just a lot of positive stuff that comes out of, you know, collaboration. Yeah. I agree.
Wholeheartedly. I think if you got advisors, you know, maybe that’s a part of your interview process, you know, if they’re not willing to get on the phone with your CPA or, you know, your other trusted advisors, then, then that’s probably not the right person. Because, you know, for me, I have to be able to talk to the CPA to see how the things we’re doing are going to affect their taxes, both on an income side and on the estate tax planning side. And then I need to talk to the financial planner like yourself to make sure that what I’m doing is not contradicting the plan that you guys are putting in place. And so that collaboration is definitely key and making sure that we serve the client the best way with our new Trusts Attorney Las Vegas services.
Yeah. Well said. Alright.
Anything else that we missed that you feel is super important that we need to tell the listeners about business financial planning?
Um, I don’t think so. Um, I don’t think there’s anything else that really comes to mind. I feel like we’ve, we’ve covered it pretty well, but again, it’s just, um, you know, it’s doing, you’re doing your homework, you know, before you, you know, before you go out and hire, you know, not, not just a, you know, a business financial advisor, but you know, an attorney, a CPA, any advisor that you plan to have served you for hopefully a long period of time, it’s just, it’s important to compile a list of good questions that are going to you, uh, you know, give the business owner a really a strong, you know, feeling and a conviction that, that, that person is the right one for them. And, and that just has to start with, with compiling a list of good questions so that, uh, the business owner can ensure that the advisor that they’re hiring is, um, is, is right for them at the stage that they are in, in there, in their business with great Trusts Attorney Las Vegas services.
Well, thank you for being on the show. How can the listeners get in touch with you, uh, if they have questions or want to look into hiring you?
Yeah. Well, thanks for having me Blake appreciate it. Um, I would say that the easiest way to track me now would probably be our website. So we just went through a, total rebrand and we now operate as your future planning partners. And our website is your future planning.com. You can find me on the LinkedIn land advance, uh, we’re on Facebook and Instagram as well. Those are probably the easiest ways to find me. And also one thing I’ll just throw out as an offer to any business owners that listen to this. We have a tool that we use. It’s pretty cool. It’s called the business exit readiness index, and it essentially understands your financial and mental readiness when it comes to preparing to transition out of your business. So any business owners that want to track me down, I will provide that tool to them at no cost, and it only takes five or 10 minutes to complete it’s, it’s pretty neat with our great Trusts Attorney Las Vegas services.
Awesome. That’s great. Yeah. And I’ll make sure I put a link to the website in the show notes, so our listeners can click on that and find you, uh, thank you again for coming lots of great information today. So thank you.
Yeah. Thanks a lot. Appreciate it,
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