1512 – Our Responsibility is to Win with Tax Plan Expert’s David A. Perez

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0:54With us right now, David A. Perez. David, you are the founder and CEO of Tax Plan Experts, and you are found on the web at davidaperez.com. You're also the author of the book, Building Your Own Economy. David, thank you so much for being here. Hey, thanks for having me, man. This is exciting. Yes, absolutely. So, yeah. So, well, I want to ask you what you do, but tell me what it means to build your own economy. So building your own economy means taking back control from a world that is set up to prevent us from failing. I believe it's our responsibility to win. And that means taking back control of everything from our health to our finances, which is our wealth, creating core values that we can live by so that we can leave a legacy long beyond our existence.

1:44I'm feeling a smattering of Ayn Rand Atlas shrugged in there. You know, again, it's so easy to blame others, to blame the government, to blame politics, to blame the economy, when in fact, at the end of the day, you know, this is the big boy, big girls club when you're in business for yourself. And you do have control, right? And we all have obstacles. And some just suck. And it's unfortunate. I don't mean to steal your thunder. I feel like the opening band that just started playing one of your numbers. Tell us more, David, about your philosophy and your work. Well, you really are hitting the nail on the head.

2:36I believe everything. I think the result of our life is everything we have in life is the result of our best thinking. And because we've made these decisions, whatever they may be, and the thoughts that we put in action, we have to live with the consequences. And if we can make an acceptance statement that says, I accept where I am today because of the things that I've gone through and the places I've been, and I am now here, there's no going back. I can only go forward. So I have to make a decision. Do I want to harp on everything that's gone wrong? Or do I want to make a decision to just create and design and build my own economy so that nothing in the past will shake me and nothing in the future can shake me?

3:14Because we all know that there's a lot of unpredictable things that can happen to us each and every day. but if every statement that we make after an accident, after something going wrong is just, what can I learn from this? How did I cause this? What can I learn from this? These are two things I ask myself all the time. How did I cause this to happen? What can I learn from this experience? That really helps me become and build my own economy. There's something that I'm picking up from you. This is just an easy connection. I think when we truly carry this attitude. There's just an energy shift that I think other people feel and they know that you, like you've got the focus, right?

3:58And, you know, whether or not you kind of buy into it or not, you know, I think one line that I really appreciated from The Secret long ago was this line where he's saying, you know, people look at their current state of affairs and say, this is who I am. That's who you were. We're always living in this residual of, you know, kind of the summation of how we showed up and, you know, how we responded to certain environmental things. And that's not a bad thing. That's pretty good that, you know, that the stuff you do today, you know, we're not, it's like not instant results. Can you talk a little bit more about that?

4:36Well, I think if you really summarize it, it's like today in life, we can, in business and in life, right? We use financial statements or let's call it labs to determine health, financial statements to determine business health. Well, I can look at your whole past experiences in business. I can look at your profit and loss statements, your balance sheet, your cashflow projections. I can look at all that stuff. And it's still not a determinant of your success. It's just telling me based on your prior history, you've had to go through some experiences, either they were good or they were bad. But moving forward, we can always make a shift, right?

5:08There's always a change to be made in our business and in our life. But it all starts with accepting of where we are. Most people won't agree and say, well, everything that I have or everyone I've become, I mean, I love the statement. I don't know who said it, but it's everyone is self-made, but the successful are the only ones who admit it, right? Everyone is self-made. And if you get that, then you know what? I mean, you don't cry about a loss. You don't get scared or fearful of anything, you really just take everything head on. Like, I've got to figure out how to overcome this, because that's who I am.

5:45I'm the person who takes control of all things in life. Yeah. And so David, what are like, so you're working primarily then with leaders on their tax strategies, and kind of they're helping them make better financial decisions. Can you talk maybe a little bit more about how you engage? Well, this is actually the reason I talk primarily about taxes. I've been in the industry for going on 16 years, and we've prepared over 50 ,000 tax returns. And over the last four or five years, I've primarily worked with business owners, but high net worth or high income individuals who have had challenges when it comes to taxes, talent tax, not tax challenges, like they don't, they owe money to the IRS for back years, There's like tax challenges like, hey, I'm writing$300 ,000,$400 ,000 checks or even$50 ,000 checks to the IRS every year.

6:38And I don't see any benefit in this. Like, why am I supposed to pay taxes? And the majority of people will say, well, because, you know, I've been filing my return for several years. I've been writing checks. And I ask them, why have you been writing checks? And they say, well, my accountant said, because that's just the way it is. If you make money, you're supposed to pay your taxes. And in some respect, there is a truth to that. But for the majority of people today, they don't understand that the code was written to be able to use so that you don't have to pay as much or if any taxes. And if you know how to use that code, if you know how to play the rules, you can rule in the game.

7:13And so from an economy standpoint, the way I tie this all together is that I believe that the foundation of your life is health. And I believe the second thing is wealth. And wealth ties directly to the amount of money that you get to use to acquire assets. And if in life, the majority of our money will go to some form of taxation, actually about 30 to 40 % of our money goes to a taxable event in our life. Why can't I figure out a way to keep some of that 30 to 40%, maybe get it down to 20 or 15 or 10? And then what can I use that money for? So to give people advice on things is I'm an advocate for real estate.

7:50I believe real estate is the number one investment that you can make today. And I say that because it's tangible. It's appreciating in value. It's used as a tax deductible event for depreciation. It creates cash flow, which in turn builds wealth. And so I believe that helps you towards your economy. Yeah. At what point? So, you know, most folks that listen to the show are their founders and they might be looking at their current state of affairs and say, well, you know, look, we've got, you know, about a total of maybe$200 ,000 in debts that we're kind of slowly paying off. Cash flow is looking pretty good.

8:28We could invest, you know, kind of double down in our business and apply some more capital there. Maybe invest in growth. Or maybe it's not an or. and you're also talking about diversifying and investing in real estate. How do we know when we get the David A. Perez seal of approval kiss on the forehead that says, yes, you are ready to invest in real estate? This is a good question. I want to answer this really well, but what I'm going to do, just because I want to get this as a good video for us, is that when I talk to people about their investment strategy, what I'm really telling them is, look, if you have a business right now, that is going to produce the biggest cash flow.

9:17Just to be clear, that is where you would put your money if you want to get the biggest return. Most people would put their money in their business before they put it in anything else. Now, I agree with that 100%. If you have a good business, you can predict, a great business can predict the amount of revenue that would be generated by based on an input. If I make more calls, our sales go up. If I invest in more marketing, I generate more leads. So if you said, I have$100 ,000 to do something with today, what should I do with it? The first thing I'd say is, do you have a predictable outcome in your business?

9:51Can you put 100 ,000 into the business and make 400? And they're like, maybe. Well, then we got to stop because that's the first challenge you have. You actually have to be able to produce an outcome based on an input. And if you haven't figured out that system, that's the first thing you should be working on. not investing in real estate, not buying anything else, figure out how you turn your business into an ATM. Because then and only then when your business spits out cash flow, should you be investing in any other activity, you shouldn't start a second business, you shouldn't invest in real estate, you shouldn't go, you know, in IRAs or all that.

10:21No, your business needs to produce revenue for you, which then turns into cash flow for your pocket that you can invest in something. And so until that is done, I would not recommend to invest in anything else other than their business. Oh, well, yeah. I mean, how do, well, okay. So, you know, to maybe someone that might be a little earlier stage in business, are there ways, like, what would you, or how would you make those decisions? Like what goes into the decision-making process as to whether or not this is smart growth investment. Because I think there's a lot of opportunities out there. There's certainly a lot of people saying, give me your money and I'll help you grow.

11:09What goes into your like, okay, well, let's take a look at the merits of this and try to make a smart decision on behalf of my business. Well, are we talking about a marketing strategy? Are we talking about Maybe anything that's growth or revenue generating for sure. Well, I think there's a lot of merit behind what you're saying, because what I would say, first thing I do in any business, what we should be really understanding is who's my market. That's the first thing you need to understand. Is it starving? Does it have a big problem? So it's like, does my market have enough money to pay me what I deserve to get paid?

11:43Do they have a pain point that I definitely can solve and it's so strong that they're willing to pay to solve it? can I identify who they are, where they're located and what they do, right? And will they take action if I ask them to take action? So there's a lot of things you have to think about there. But to get to the point of like, what should I invest in? It's first understand if you actually have a great business that can grow, because a lot of businesses can't grow. That's the truth. And that's not to hurt somebody's feelings. It's, you know, we can row as hard as we want. But if you're not in the right boat, it's just going to be a lot of work for a little reward, right?

12:17You won't get very far. So we have to make sure that our boat is going in the right direction. That doesn't mean your business is bad. It's just pick one product that you know, you can knock it out of the park with because it has the right market. You can identify the market. They have money to pay you. If you can identify that one product, that's what you should put all your money into. And most business owners don't do that. What they do is they open one thing, like a line of business, for an example, in a business, they're like, we sell this one thing. And then like two weeks later, like, well, somebody else asked me for this one thing.

12:46Let's just do that, too. And then another month passes by and it's like, let's do this three. And then after, you know, six months, they've got seven things they've got to sell. And all seven of them make a little bit of money. None of them knock it out of the park when the truth is one of those is going to knock it out of the park for you. You're just you're just diversifying your time, which causes all things to be OK. You need to be really great at one thing before you can go strong at everything. I love that. That's that. Boom. There's your, there's your soundbite right there, team. That is good, good, good, good stuff.

13:25You're absolutely right. And sometimes it's a little bit of chasing a shiny object, but I think, again, you water it all down. You end up being mediocre in a lot of things, as opposed to being able to say, you know, we do this one very niche nerdy thing. And I'm probably one of the best on the planet at this thing. And I don't say that to brag. I just am so mediocre at most other things. I've just obsessed on this. But that's like, I remember that in the book, Now Discover Your Strengths. It's that same thing where it's like, look, most masters of the game of sports, experts um they're really just truly other world otherworldly talented at a particular aspect of the game so when the rest of the team knows hey you know here comes jordan because you know or here comes the opportunity we we know how this is going to play up we know who's going to take that you know we know who's going to make the shot who's taking the shot we know who's taking the shot that's right well a lot of i think i think there's a lot of i think there's a lot of confusion from business owners today that they need to be everything to everyone.

14:32And I think they need to be something to someone, right? Like, like just one thing to one person. If you figure that out, like you don't have to beg for money anymore. You don't have to go out and create all this other marketing strategies. Like truly the reason most people can't be known today or get their product or service to the marketplace is because they're like, they get a megaphone and they're like, I can help everyone with every problem anywhere, right? By any means with any price point, because I have all the solutions and everybody doesn't hear them because they're not speaking to anybody.

15:04They're speaking to everyone. You can't speak to everyone. You've got to walk into a room and say, I only want to talk to the people with red shirts. And now everybody who's got a red shirt turns around and now you've got an audience, if that makes sense. Yeah. Yeah, that is great. Hey, getting back to taxes, I want to address this just a little bit too. Some people might look at, you know, leveraging taxes and say, well, am I being, because you had mentioned this, right? Am I truly being fair with that? When in fact, the tax laws are designed very specifically. I know it's easy to get cynical and say, well, it's all just written by lobbyists.

15:47However, well, I'm not going to answer the rest of that. I'll let you answer that question. I'll kind of leave it there, leave it dangling there to let you take it up. Well, I don't think that if you can get to zero or pass zero, I think it's your responsibility to do it. I think the tax code was written for business owners and investors to maximize their opportunities, to take advantage of the system that was designed to incentivize them to do activities that our government and our lobbyists, if you will, want us to take. Most countries are developed because of entrepreneurs and investors, right?

16:22Business owners run the country. They're the ones who employ the people, develop the products, create the ideas, the inventions. They fund the system. And because of that, they are given favored advantages in the tax code. The challenge is that most people are taught from a young age, even business owners, as kids, we're taught that taxes are a requirement. CPAs think that they're enforcers of the collection process rather than they're advocates for their clients. There is this misconception that taxes are supposed to always just be paid. That's just the consequence of being successful. When the truth is, if you do the right activities, you are by definition taking advantage of a code that is incentivizing you to do an activity that benefits our economy.

17:07So it's either do you give money to a system through your tax payment that you don't know where it goes, know what is going to happen to it, like, you know, it probably funds a program that you have no alignment with, or could I be incentivized to keep more of my money and put it into low income housing or invested in energy or do something that would benefit our country rather than just, hey, here's a blank check or here's a check of a lot of money and you guys do whatever you want. And I think, I think we're better served to take advantage of the system so that we can do the good things in the world and be the, be the voice that we want to have.

17:40Yeah. David, your website is davidaperez.com. And can you share maybe just a bit about like ways, like how you engage, obviously, you know, a great way to start here is you do have a book, building your own economy. but how do you work and partner with people? Well, first off, if you're a high income earner probably making or owing more than$50 ,000 in taxes, I'm your guy. That's what I do. I specialize in that. If you want to get a free discovery call to see if we are a good fit to work together, you can actually go to taxplanexperts.com, taxplanexperts.com. Free discovery call, no charge, just to find out if we're a good fit.

18:23Now, if maybe you're not there yet, just to be clear. And I say yet, because if you have a tax liability of$50 ,000, you're making some money. Okay. And maybe you're on the journey. I want to help you get there. I'd love to give you a free copy of my book. Go to davidaperez.com. Grab a copy of my book called Building Your Own Economy. I do talk about diversification. I talk about wealth. I talk about health. I talk about core values. But more importantly, I talk about building and leaving a legacy and why that's so important. And maybe that'll fire you up to go make a bunch more money and do some big things so that we can work together.

18:55Yeah, it is. Having gotten sacked with big tax bills in the past, I know sometimes it's just really demoralizing. I remember one year we did, it was north of$50 ,000 and it was just like, oh man. And it kind of ruins all the fun of like all the stuff that you want to do. Yeah. But again, I will say, you know what? We didn't have David A. Perez back then. you know uh you have to think about the government or the irs as being your business partner that you have no control over they can take any portion of your money at any time by the change in the stroke of a pen for a law and so our job every year so a lot of people today will plan let's say for retirement not knowing what the tax code is going to be at that time so the the code's going to change obviously we know that the deficit is increasing so taxes will be ever changing.

19:48So you paying that bill today is probably better than you paying it in 20 years. And so that's kind of the strategy today is why are we waiting to pay for our taxes in 30 years when we know that the tax rate has to increase? And we're in a partnership. They get 37 % in most cases for high income earners of every dollar they make, regardless. And if Congress passes a law, it could be 50 next year, could be 90 at one point. You know what I'm getting at? So we have to be mindful of these things. And you saying that is like, hey, it makes you feel bad when you have to write the check. It makes you feel horrible because your bank account looks amazing until you write the check.

20:30Yeah. So David, again, let me just share your websites again, taxplanexperts.com if you're a high-income earner. By the way, if you're a high-income earner and you do not have the A team around you, I don't know what you're doing. You got to surround yourself with smart, smart people at that level so that you can do more good in the world. And of course, David, your website, davidaperez.com, get the book. It's called Building Your Own Economy. David, it's been great. Thank you so much for this conversation. Thank you so much for being a guest. Hey, thank you for having me.

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