GMB Ep #86: Buying the Building Your Business Will Operate In With Justin Smith

Commercial real estate is something many investors seem to be interested in both as an asset class as well as a place for operating their businesses. Justin Smith, a broker, industrial advisor, and author, joins us today to talk about investing in commercial real estate. Throughout today’s episode, we explore what investing in commercial real estate is like as an asset class and what business owners who are considering buying buildings for their own businesses need to consider prior to day one and from day one to the day that the business no longer occupies the building. Stay tuned until the end of the episode, where Justin shares some strategies that help real estate investors with taxation.

 

 

Show Notes

[2:50] Justin’s Background – Justin has been working at Lee and Associates for 17 years, focusing primarily on industrial property. We talk about how Justin got into the real estate industry and what he learned through his long career.

[9:40] Buying a Building – Justin explains where to start if you’re looking for a building to buy and how the process differs according to the type of business, type of property, and whether it’s a lease or ownership.

[20:05] Transition From Tenant to Owner – Switching roles from the tenant to owner often calls for some construction work. Justin explains what potential property owners should know about working with contractors and other parties and maintaining compliance.

[26:55] Selling the Current Building and Purchasing the Next – What business owners need to think about when selling their current building to move to another and how their options differ based on liquidity, capacity, and capital.

[34:41] Potential Property – What makes a potential property or building an attractive investment in a portfolio, and what to look for in a potential real estate investment in terms of its cash flow.

[42:45] 1031 Exchange – Justin shares his thoughts on the future of the 1031 exchange, which gives business owners an option to avoid paying capital gains taxes when selling a property and reinvesting in similar properties.

[46:30] Tips for Pure Investors – Justin shares some tax strategies for people who are looking at real estate as a pure investment.

[49:00] Industrial Intelligence – Justin’s book, Industrial Intelligence: The Executive’s Guide for Making Informed Commercial Real Estate Decisions, came out last April. We talk about what he covers in the book and how it helps investors make smarter decisions for real estate investments.

Resources

Industrial Intelligence: The Executive’s Guide for Making Informed Commercial Real Estate Decisions: amazon.com/Industrial-Intelligence-Executives-Commercial-Decisions

Connect with Justin Smith

LinkedIn: linkedin.com/in/justinbsmith

Website: smithcre.com

GMB Ep #79: The Sacramento Startup Climate With Cameron Law

In recent years interest in entrepreneurship has been steadily increasing around Sacramento and around the country, leading younger generations to explore self-employment as a career option.  In today’s episode, we have a distinguished guest who specializes in educating entrepreneurs and guiding them toward success. Cameron Law, Executive Director of the Carlsen Center For Innovation & Entrepreneurship in Sacramento, joins us today to talk about the startup climate in the region. Throughout the episode, we dive into how Cameron’s organization helps entrepreneurs, common mistakes entrepreneurs make, trends in the startup arena, and what entrepreneurs should know about creating successful business ventures. 

 

 

Show Notes

[01:40] Cameron’s Background in Startups – Cameron shares how he got into the business world, his work in the venture capital arena, and his contribution to helping entrepreneurs thrive. 

[06:18] Cameron’s Organization – Cameron dives into the mission of his organization, Carlsen Center for Innovation and Entrepreneurship. 

[10:50] Generating Interest – Cameron’s organization works with students and people who are already in business. He talks about what his organization is doing to generate interest in entrepreneurship and to make its programs more accessible in the region. 

[15:30] Evolution of Entrepreneurship – How the mindset of entrepreneurship has evolved over the years in the region and how recent trends in the markets and technologies have influenced it. 

[28:48] Avoiding Mistakes – Common mistakes Cameron sees entrepreneurs make in their startups and bits of advice Cameron has for entrepreneurs to help them avoid their mistakes. 

[35:39] Taking Risks – Entrepreneurs often have to take risks to make their new products or services successful. Cameron shares his take on what entrepreneurs should keep in mind about creating solutions that successfully solve a problem. 

[38:11] Blockchain – Cameron shares his take on how cryptocurrencies and blockchain technology are being adopted in the region. 

[46:05] Sports – Both Grant and Cameron were baseball players in college. They talk about how sports fit into their lives and how experiences from sports have influenced their professional skills. 

[52:47] Get Involved – Cameron shares how you can get involved in entrepreneurial communities in your region and how you can utilize the resources available at the Carlsen Center for Innovation and Entrepreneurship. 

 

Resources

Connect with the Carlsen Center for Innovation and Entrepreneurship: 

Website: www.csus.edu/center/carlsen
LinkedIn: linkedin.com/company/carlsencenter 

GMB Ep #76: Business Succession Planning With M&A Expert Michael Vann

The succession of a business or exiting from a business is an important and intimate event most business owners will have to plan at some point in their journey. We dedicated today’s episode to exploring what business owners should think about when planning their succession or exit, even if they don’t anticipate it anytime soon. Today, our guest is Michael Vann, an author, certified scale architect, and the president of The Vann Group LLC. Throughout the episode, we explore the process of succession, how relationships and emotions come into play, how taxation applies to succession, and what Michael has learned through his extensive experience in the mergers and acquisitions market.

 

 

Show Notes

[01:35] Michael’s Background – We start the conversation with a brief review of Michael’s background, from being in the corporate environment to working on his father’s business. 

[04:51] Acquisitions – While working in the corporate world, Michael gained lots of experience in acquisitions. He shares some of the important strategic planning points of acquisitions for buyers. 

[10:21] Family Business – Once Michael left his corporate job, he started working on his father’s business. Michael talks about the work he did there and how the business evolved under his influence. 

[15:44] Business Transitions – Michael’s family business has been going through a phase of transition from his father to Michael and his siblings. Michael dives deep into the process of transitioning and the emotional aspect of it. 

[18:02] Process of Successions – The typical flow of business succession, deciding between different options for succession, and managing financial matters. 

[23:38] Relationship Dynamics – Business transitions may get a bit more complex when they’re between family members or people with close personal relationships. Michael talks about some of the obstacles that may come up in these sorts of transitions and how to overcome them. 

[27:12] COVID and the Industry – How the pandemic impacted Michael’s line of business and the new trends that emerged from it.  

[33:19] Taxation – Michael shares his take on how the newly proposed tax reforms may affect buyers and sellers in the mergers and acquisitions arena. 

[39:11] Michael’s Vision for Future – Michael dives into some of the possible avenues for his business to expand and grow, and some of the interesting concepts covered in the book Michael coauthored with his father. 

 

Resources

Michael’s Book: amazon.com/Buying-Out-Boss-Successors-Succession

Website: vann-group.com
LinkedIn: linkedin.com/in/michaelvann 

 

Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #67: How & Why to Employ Your Kids In Your Small Business

 
This week on Grow Money Business we talk about a powerful long-term tax planning opportunity available to business owners. Employing your kids in your business gives you and your kids numerous benefits in terms of taxation and retirement savings. Throughout this episode, Grant dives into what these benefits are, how you can contribute to your kids’ retirement savings, and some tax planning opportunities related to employing your kids.

We’re planning to post another mailbag episode in the next few weeks. If you have specific questions you’d like Grant to answer in an upcoming episode, visit growmoneybusiness.com, and drop your questions in the Mailbag section.Continue reading

Market Update Q1 2021

Market Update: Q1 2021

We’re now nearly a full month into 2021, and stocks, bonds, and virtually all other asset classes continue to post excellent returns.  The question is…..why?  We’re at a point where the market seems to be impervious to bad news.  Meanwhile bitcoin and cryptocurrencies continue to post new highs, and college students are even becoming famous for posting their trading strategies on social media.  As easy money central bank policies abound across the globe there is a lot of market froth out there.  We’re starting to see all the classic signs of a bubble.

Interestingly, equities in small cap and value shares led the pack in the fourth quarter of 2020.  This is the first quarter that’s happened for quite a while, but both areas have a lot more ground to cover if they’re to make up for the last decade.

Here’s this quarter’s market update.

Market Update Q1 2021

Market Update Q1 2021

Market Update Q1 2021

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Everything You Need to Know About the New Stimulus Bill

New Stimulus Checks & PPP 2.0! Everything You Need to Know About the New Stimulus Bill

It’s easy to forget, with everything happening in Washington D.C. in the last week, that we have a new stimulus package.  After sitting on the bill for about a week, President Trump signed the Consolidated Appropriations Act into law in the late hours of December 27th.

It was a massive bill, with many sections other coronavirus related stimulus.  I haven’t read the entire Act, and hope that I never do.  I have read the sections related to stimulus checks, the paycheck protection program and a few others though, as they relate directly to many of our clients.

This post will cover what you need to know about those sections: whether you’re entitled to a stimulus check and/or PPP loan, when you might receive one, and other relevant details.

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Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #57: A Breakdown of the New Stimulus Bill, Including PPP 2.0!


 

A couple of days ago, President Trump signed into law a second stimulus package for COVID relief. This legislation includes $600 stimulus checks, more funding for the Paycheck Protection Program, along with some updates to the rules, changes to the regulations related to loan forgiveness, tax deferrals, healthcare, and more. Throughout the episode, Grant dives into what these new updates are, how they relate to individuals, business owners, employees, and how you can take advantage of the provisions in the new stimulus package.Continue reading

Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #52: Top Year End Tax Planning Moves with Biden in the White House


 

After weeks of delay caused by legal battles surrounding the election, at this point, all signs point to the fact that Joe Biden will be inaugurated as the President of the United States of America. As we discussed in detail in a previous episode, Joe Biden’s tax plan contains tax reforms that affect taxpayers in numerous ways. In today’s episode, Grant dives into some of the tax planning opportunities you should consider in the coming months.Continue reading

How & Why to Open a Roth IRA For Your Kids

How & Why to Open a Roth IRA For Your Kids

One thing all parents have in common is wanting what’s best for their kids.  We all want to give our kids ample opportunities for success.  We all want to keep them rooted in family values.  And we all want them to have a fair shot at life.

When it comes to money, we typically want to give our kids ample support without spoiling them too much.  Most of us don’t want our kids to win the lottery, though.  We’d much rather our kids build some character through struggle and sweat equity.  Nothing gives young people an appreciation for higher education than working a few arduous, low paying jobs.

From a financial perspective it’s difficult balancing these objectives.  How do I help my kids financially without spoiling them?  How do I teach them fiscal responsibility?  How can I show them the power of long term tax advantaged compounding?

These a few questions our clients at the financial planning firm often ask.  The answer is often the Roth IRA.

This post covers why that’s the case, how you can set one up for your kids, and when & how to contribute to one.

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How & Why Asset Classes Compete With Each Other

How & Why Asset Classes Compete With Each Other

Diversification is one of the first things most people learn about investing.  The phrase “don’t put all your eggs in one basket” probably sounds familiar.

At its core, diversification means that when we build a portfolio we want to dump in a bunch of different investments with different risk profiles.  That way they’re not all likely to fall in value at the same time.  They work “together” to reduce risk.

Think of it like baking a cake.  Dumping a bunch of flour in a cake pan and tossing it in the oven probably won’t turn out very good.  But when you add sugar, milk, and eggs in the proper ratio, you’re a lot more likely to get a desirable result.

Typically, investors accomplish this by investing in two primary assets classes: stocks and bonds.  Stocks and bonds are very different animals, which is really the whole point.  In most circumstances one goes up when the other tends to go down, and vice versa.

There’s an interesting phenomenon that’s often overlooked when we view our investments this way though.  While we like to think that stocks and bonds “work together” to reduce risk, they actually compete against each other in the capital markets.  This behavior is a major reason we’ve seen such strong equity returns over the last few years, and will likely help to explain what kind of returns we see over the next 5-10 years & beyond.

This post will dive into this concept, what’s currently driving stock prices, and what’s likely to happen next.

Checking In On Market Valuations

Long term real S&P Composite price index vs. earnings. Source: Robert Shiller’s Online Database: http://www.econ.yale.edu/~shiller/data.htm

 

Checking In On Market Valuations

Long term CAPE vs. long term U.S. interest rates. Source: Robert Shiller’s Online Database: http://www.econ.yale.edu/~shiller/data.htm

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