Transcription
In today's video, I'm going to break down the five ways, in fact, the only five ways, the wealthy may use an LLC to protect their assets and maybe save some taxes. I'm a registered CPA, attorney, best-selling author, and owner of multiple tax and legal businesses.
In today's video, I'm going to show you exactly where the LLC makes sense and is absolutely critical for you to succeed in business and build your American Dream. The problem is, business owners misinterpret what an LLC is for and it's supposed to be used. And by doing so, they actually pay more in taxes. Like I said at the beginning, I really believe there's only five ways the ultra-wealthy, the successful business owners, may use an LLC. There might be an ancillary small strategy out there, that's fine, but these are the five main uses, 99% of the time, of an LLC.
Now, the best way to explain where an LLC is best used and where it fits into your plan, and I'm going to show you the exact way to use it, is to introduce you to the trifecta. The trifecta is my invention of how to make sense of this complex, seemingly complex tax and legal structure. And young and old, rich or poor, every client that I work with, that our team works with, we introduce the concept of the trifecta, and it's going to blow your mind. You're going to love this, and it's going to help you better understand and how to use these LLCs.
Now, the trifecta obviously is made up of three parts, and these three parts are the foundation of how the ultra-wealthy build wealth and keep it. Now, the base of this is going to be a trust, a revocable living trust. That has nothing to do with an LLC. A trust is built for estate planning, and I've got other videos and articles and books on this. But the revocable living trust is that foundation of the trifecta, and is also kind of where your 1040 lies. This is where all the money comes down to is your 1040 tax return that you're going to file every year. Every American has to file that.
Now, on the left side, we're going to put operations. This is where you're making money to pay the bills and live life. These are my operational income and operational expenses. On the right side is where we're going to put our assets or our investments. On the right side here, as well, is where we create passive income. This is coming into play as we talk about these five LLCs. On the left side, with operations, we're going to create ordinary income. Now, I can already ask you the question, which one do you think is taxed more? That's right, ordinary. So we want to do the best tax planning we can on the left side when we bring this all together.
Now, the left side is going to be maybe a day job, a W2. Maybe your married partner has a W2. Maybe you have a little side hustle over here. All right, that's cool. But ultimately, as you expand your side hustle, your side gig, you have a main operation, you're going to have an operational entity that's going to be owned by your trust. And all the profits of this business are going to come down to your 1040. And I'm going to talk to you about how you pay yourself. How does this work? We're going to get into it.
On the right side, you might have an entity, very simply, that owns your investments or your assets. Think of this like a rental property. You might have an LLC, a little spoiler alert over here, owning an LLC. And oh, you may have an operational online business. Maybe you do some freelancing, to sell a product or service. Oh, that might be an LLC, but they're different. This is where you're going to create operational income. I'll put ops. And over here, we're creating this passive income. So this is the trifecta. We have an entity on the left, an entity meaning a business structure, and we have an entity on the right. Now, we might have multiple operational pieces of income, and we might have multiple rentals, but we still at this structure level have just two entities. And this builds our trifecta, one, two, three. All of this wealth comes down in as potentially taxed at our 1040. And we want to build a structure to save taxes, create asset protection, and leave a legacy. This trifecta is magic, and it's going to help you better succeed.
Now that we have the basic trifecta on the table, let's talk about these five different LLCs and who they're best for, and if it's a good idea for you. Sometimes I have clients that are using all five. It just depends. Everybody's different. So let's get our trifecta back on the table. We have ops over here, we have assets over here, here we have our estate down here, or our 1040. Right? So this is it. This is for everybody. Love it.
So, the number one reason for an LLC, or where they're used primarily, the most, is a holding company. This is number one. You're going to have an LLC to hold a rental property, or maybe some investments, maybe some Bitcoin, maybe a note, some sort of passive investment where you've put money in, and your money is doing the work, not you. That's the first place an LLC is going to be used.
Now, why do we do this? It's to create protection. Either there could be a lawsuit that could arise with that rental property, and we don't want them getting at us. Or we can design the right type of LLC, depending on the situation, where if you get into a car accident, texting and driving, and we don't want some creditor to come after you, your assets. So if they come, I should say, if they do come after you, they can't get up into the LLC and what it's owned. Now, that can get a little complex on the where we set up the LLC, how we maintain it, and what it owns. But the concept here is that we want this LLC as a holding company. This LLC is going to help us protect assets or protect us from operations in that holding company. Very common.
And what you would typically do is, once you form the LLC in the proper state, and I'll give an example here in a moment, you would open a bank account with the EIN, the electronic identification number. The LLC would be on title for the rental property, or the one opening up the wallet or the investment account. The LLC is the one holding the money or the asset, not you. And then, as you make money, you can transfer that money down to yourself. It's called a draw or a distribution. But if you respect the LLC, and you do an annual meeting, pay your annual fees to the state, respect the bank account, and it's the LLC doing business, not you, this LLC can become unstoppable. And this is what the wealthy do. We might start setting up more LLCs. An LLC for two rentals over in Minnesota. Another LLC over here in Nevada for an investment of some sort. An LLC in this state or whatever. We could have multiple LLCs depending on how many assets you have. And it's going to vary. And we don't want to overdo it. We want to make sure that we're very, very careful and targeted here. And it's important that we don't get sold something we don't need. But if you own a rental property, if you have assets that you're worried about maybe losing in a potential lawsuit, we want to have an LLC to help protect you or those assets. That's the number one reason for an LLC.
Now, an example. I'm a realtor. I live in California and I bought a rental property in Tennessee. Okay, well, a California LLC is not going to help me because I don't have a rental in California. I have a rental in Tennessee. Now, we're not talking about operational business yet. But over here, I have a rental property, and I got a tenant in Tennessee, and I don't want that tenant suing me and taking away my assets. And I want to have that LLC maybe provide a little privacy for me. I don't want my name on title. I want the LLC on title. I'm going to have a bank account, a property manager, all those things that come with a rental property. So what do I do? I set up an LLC in Tennessee for that rental property. That is an example of LLC number one. And if you want to build wealth and protect it and do what the wealthy do, that's when you use LLC number one.
Now, I did say the word holding company, right? Well, that's just a term of art. A holding company is an LLC. It's nothing different than that. It's just kind of a term that helps you understand that this LLC is not doing business, it's holding something. So that's why I use the word holding company. We're going to talk about operational companies over here in a minute, but this is a holding type entity.
Now, the cost to set up an LLC can vary depending on your expertise and what you're needing. On the low end, you might go to an online type service and set up an LLC. You could spend $400, $500, maybe $600. Now, so I know some of you are going, "Uh, Mark, the filing fees is only $50." Yeah, you do one sheet of paper, that's not an LLC. You need all the pieces and parts. So if you go to an online service, you need to be checking the boxes for an operating agreement and minutes and membership certificates and EIN. And a lot of people cut corners, and they think they have an LLC, and they don't. So don't try to go on the cheap DIY side unless you know what you're doing. Typically, using a lawyer, and our law firm helps clients all over the country with this, you're going to be between $800 to $1,200, depending on how much involvement you want with the attorney. But the beauty of using a lawyer is they're going to do it right, and they're going to answer questions about how you're going to maintain this and move forward with it. So I think you should have a budget, and you got a filing fee with the state and all that, but I think you could budget anywhere from $1,000 to $1,300 or $1,400 on the highest end to set up an LLC holding company in this range. And you're going to keep it forever. You could use it over and over again. You could put multiple rentals in it. You're going to have those sorts of questions in a conversation with the lawyer that helps you set it up. And the last way I could say it that might be helpful is using the word holding company is kind of letting yourself, your family, your planners know how you're using the LLC. I'm going to use this LLC for holding things, so I'm going to call it a holding company.
Okay, number two. The second most common reason for an LLC, and where they're great, is for an operational business. So it's an operational company, but it's an LLC again at its foundation. So let's go to the whiteboard, and we'll show this distinction. Over here is our holding company we talked about just a moment ago. Now we're going to have an operational LLC. This could be doing online sales, it could be doing a service, it could be doing a product, uh, it could be doing a lot of different things. And for millions of Americans that have a side hustle or a side gig, this is the beginning of that process, that journey. So I'll put side hustle over here. We're going to have this, this little LLC over here, and we're going to start respecting it and using it for operations over here. Again, holding over here, ops. There's a reason we're going to keep these separate. First and foremost, I want a wall of protection. This wall is very important in our trifecta. Anything that goes wrong over here, I don't want them getting at your assets. It's a very important concept in asset protection. Also, ordinary income. Remember we talked about that a minute ago? Is the worst for tax purposes. Now, it's not a bad thing. I want you to make money. I want you to create lots of ordinary income, but we got to know that it's going to be taxed differently, and we're going to use it, an operational LLC, to protect the tax rate, to protect how much we're paying in taxes. And this LLC is the beginning of that process.
So, an example over here. Uh, let's go back to our realtor. I said we had a realtor in California that owns a rental property in Tennessee. So we have this little Tennessee LLC over here. Now, we're going to have a California LLC for their realtor business. The broker is going to pay them a 1099 for their services as a realtor. They're going to have a separate bank account for this LLC, a separate EIN, a separate name of the LLC. These are two separate companies, and we're going to use them for their individual purpose: holding or operations.
Now, an important point here. This LLC does not save taxes. This LLC is the beginning of a process where you're going to start using this LLC for the collecting of the revenue, paying expenses, auto and home office and la la la la la, and whatever we make, we're going to take a draw or a distribution. That's great. But the LLC itself did not save taxes. This is the number two reason for an LLC, and we're going to start to show how it can save taxes with the third type of LLC.
Now, number three. Let's go back to our trifecta and let's clean this up a little bit. It's getting messy, right? So over here are our assets, and we've got our, in our example, we have our little Tennessee LLC and we have a rental property. Okay, number one reason for an LLC, it's a holding company, holding assets. Over here, we have our little LLC for our new business or side hustle. This new realtor that's out in California has this LLC and they're starting to respect it and use it in the bank and build credit and just understand how to operate as a small business. Any profits they take out and they pay for expenses out of that LLC. Over here, we're collecting rent, we're paying expenses over here, and we're taking profit over here. Two different businesses, two different purposes. We do not want the same LLC doing both because we want a wall down the middle. We want protection.
Now, what's going to happen over here that's a problem is this. I'm going to use the letter, the color red here. Is what's going to happen here is this LLC is going to start making money, and the owner, this realtor, is going to pay self-employment tax, 15.3%, on all the profit. And you're like, "Well, I set up an LLC, I should be saving taxes." No, you're not saving tax with that LLC. That LLC is for holding the business operations, but you get all the same write-offs you would even if you didn't have an LLC. So this number two LLC can seem like a problem. You're like, "Well, what's the solution?" We're going to convert this LLC into the number three type, and that is an LLC taxed as an S Corp. That process is very simple and affordable, about $250, maybe $300 at most. That's about what we charge, and we keep it very simple. And we can backdate this LLC to an S Corp to the beginning of the year when it makes sense. So if I'm going through, let's say, 2024, and I'm starting to make more and more money, and I notice that I'm going to have a huge tax bill, you call your mom. "Mom, I'm making more money." And then you call our firm and go, "Help me out. I got to get this S Corp thing going." And you, and you call, and we're like, "Okay." And then you say, "Can you remind me why?" Here's why. When you start to make money in this S Corp, there's no self-employment tax. And even though it's a corporation, there's no corporate tax. What's super cool, right? Well, there's a catch. You do have to take a salary. But we do also create a lot of savings. That's the main reason for this type of LLC is so that we can save on the self-employment tax.
Now, let's unpack this a little bit. I know that sounded like a lot, and it could be, you know, be a little, a little overwhelming. So let's just do a comparison. Let's compare a regular operational LLC, that number two version, with an LLC taxed as an S Corp, that third version. When a business owner starts to make more and more money, we want to convert them to the S Corp strategy. And again, here's why. Let's say you bring in $100,000, you spend $25,000 on expenses, and you net $75,000. All right, that's cool. Well, apples to apples, over in this LLC, you make the same $100,000, you get the same write-offs, $25,000 worth of expenses, and you net $75,000. Over here, you're going to pay that 15.3% right out of the gate, and that's going to be around $10,000 in self-employment tax. Then you pay state tax, if you live in a state with state tax, and federal. So you're getting hit three times. And all of a sudden, you realize, "What the hell, this number two type of LLC is not helping me." So we switch over to the S Corp. Here's what we do. We take that same $75,000 in profit. You're taking that money all the time. And by the way, I have other videos on how to use the S corporation. We can spend a lot of time on this, but I'm just going to hit the surface-level issues here. So $75,000 on profit, I'm going to split that up. I'm going to take maybe $25,000 in salary, and I'm going to pay my fair share of self-employment tax. I'm going to pay my FICA over here. And then the other $50,000 on paper, I'm going to call pass-through. Now, it's super easy to pay yourself in both situations. Whenever you want money, just take it. Take a draw, take the money out of the bank account. I do not care. But on paper, on a quarterly basis, your accountant's going to file a 941 with the IRS, and you're going to go through kind of a payroll procedure. You'll learn more about this if you embark on this. You're going to do this $25,000 in salary and this $50,000 in pass-through or K1 or profit. On paper, it's just on paper. This is going to take more work. It's not complex. And once you get through your first couple quarters doing this, you're like, "Oh my gosh, is that why every realtor, dentist, doctor, lawyer, accountant, landscaper, plumber, electrician use S Corps?" Yeah, that's why we do it. Because soon as you start to make more than $50,000 a year net, net down here at the net after all your expenses, when you start to make $50,000 or more, that's when you call your mom and then call me. And that's when we want to convert you to LLC number three. At the foundation, it's the same name, same EIN, same bank account, but behind the scenes, we've changed its type. So now we go from a holding LLC to an operational LLC to an S Corp LLC. And not everybody needs it. You may stay here in LLC number two for years. Some of you needed LLC number three six months ago. So start to look at your numbers, start to figure out how 2024 is playing out. And this is how the wealthy save taxes because they want to get to that S Corp. That unlocks a lot of other strategies, and especially it helps you on saving on FICA.
Okay, now, a side note for any of you accountants out there, enrolled agents, CPAs, helping clients prepare their taxes. When I said reasonable comp of $25,000 here, you know those words. You're like, "Mark, Mark, that's way too aggressive." Let me just say, in 20-plus years of helping clients around the country, we have never, ever had a client audited for taking too low of salary. I go to every reasonable comp CE, I read every case on reasonable comp, I teach continuing education on reasonable comp. If you're a tax professional, let me tell you, my mission is to help every small business owner in America build their business, live their dream, and save taxes along the way. Reasonable comp is something that can be addressed and more strategically attacked. I would love to help you build your tax advisory business, become a tax advisor. You're going to hear more about it in this video, but please take the time to do a demo and even learn about my Main Street Tax Pro advisory program. We have a tribe and a community carrying out this mission and purpose, helping thousands of business owners around the country and elevating their practice at the same time. If that's already exciting you and you're a tax professional, please click the link below and check out the Main Street Tax Pro program.
Now, we've covered three types of LLCs. It may be a little overwhelming, a little daunting. Some of you like, "Mark, tell me something I don't know. I got four and five." Hang tight. But if any of you feel a little overwhelmed or need a little support through this process, let me make a couple suggestions. The first one, my tax law firm, incredible team, 12 lawyers helping clients daily on Zoom around the country. I don't care what state you're in. Get a review, get a comprehensive consultation around, I don't know, $150, $600, $100. You can have a lawyer look at your situation and decide if you really need an LLC. We could include setting up an LLC in that consultation and build a trifecta for you. Very affordable, simple, and it can give you an action plan for 2024 and '25 and beyond. Number two, if you're like, "Mark, I'm okay with that, but I need a tax advisor. I really want a tax advisor to help prepare my returns and help guide me through what I'm already doing." Check out my Tax Pro Network. That's at MarkJaco.com. Click on the Tax Pro Network, and you can find a CPA or enrolled agent, an accounting firm around the country, young or old, big or small, West Coast, East Coast, does not matter. Find something that, find someone that can speak to you, to your language, that you can relate to, and they can help implement your strategy, whether it's LLC 1, 2, or 3. So I have support for you. I have a network of accountants around the country. We've got our tax law firm. We're helping clients every day, and we've been doing it for 20-plus years. We've got the resources if you need that help. And my link to the law firm and the Tax Advisor Network are down below. Check it out, you won't be disappointed.
Now, LLC number four and five. Trust me, the first three probably 80% of LLCs are in those first three. Now we get to option four and five. Number four, one word: Partnerships. If you're going to partner with someone in an operational business or a holding company, either one, if you've got a partner, you have a new relationship, and that relationship has to be defined. You do not want a lawsuit later because everybody did it on a napkin at Denny's. What you need is an LLC, a partnership LLC. So let's look at the trifecta. Where might this be? So boom, let's look at the asset side for a minute. So you're over here, and you've got this LLC with your little rental property in it, and you're, it's owned by your trust, and all the profits are going down to your 1040. You get it. It's all good. It's great. And then, oh, your best friend from college calls you up and says, "Mark, oh my gosh, you got to go buy a rental property together." Oh, tell me about it. They talk you into it, and you're like, "Oh, that's a great deal." All right, could be a duplex, fourplex, an apartment building, something like that, whatever. And they call you up, and you go, "Let's partner." Well, you do not want to do this on a handshake. You want to have protection from any action of your partner. Because if you don't have an LLC and you shake hands in your partnership, that's a general partnership, and you're subject to the general liability, the vicarious liability of whatever your partner does. We don't want that. And we want to define our relationship.
So what we do is form a new LLC. This is number four. It's a partnership LLC. And in this partnership, we're going to have an operating agreement. This little operating agreement is going to define who does what, who gets what, what the percentage of ownership is. And you might be 50/50. All right, that's cool. The LLC is going to define it. It's going to have its own bank account, its own EIN. It's going to have the project, whatever it is that you're partnering on. Your partner might have an LLC, maybe they just have another trust. It doesn't matter. That's their world. But in your world, we're either going to have your holding company own it, or your trust own it. And this LLC is going to continue to make money and build wealth. And when you partner, it can be a phenomenal thing. I love partnerships. You're synergy together, providing additional cash or resources or ideas or hard work can be amazing. You might have a partner that has no money, but they do all the work. You may do all the work and have a partner that has the money. You might have multiple partners. I don't know. But a partnership LLC is critical, and this is what the wealthy use to make more and more money because they start partnering with others on deals.
Now, on an operational side, and I'm going to share with you my structure here in a little bit, and you're going to see how it works. But let's say you've got your S Corp LLC, and you're out there cranking. Um, and let's maybe go back to our example, our realtor in California. And someone calls him up, an old friend, and says, "Hey, Susie, let's go out and do some property management together. Oh my gosh, it is such a great market for that." A lot of realtors get into property management. So let's go out there and do that. You keep doing what you're doing, selling property and getting 1099s and doing your thing. But let's partner in a new operation. In this new operation, we're going to create a property management company. Oh, wow, that's cool. We got to define it. We got to protect you from your partner. We want the rules, the operational guidelines, and we need a bank account and we need to get this thing off to the races legitimately. Your partner might just be an individual. They might have their own S Corp. They might have their own LLC. Again, that's their structure. But on your side, this is critical. I want your S Corp to own it because I want all that profit to go through here and get filtered so it does not pay self-employment tax. If you own it individually, you're going to pay self-employment tax, just like we talked about a while ago in LLC number two. If it goes straight to you, you're paying tax. We do not want that. So we want to clean the money. We want to funnel that profit through an S Corp. And you already have one. You only have one S Corp. That's what you need. I'm going to show you here in a minute. I only have one S Corp in my life for a reason. So this money comes funneling down through the S Corp. You take your W2 salary, you do your reasonable comp. You got your strategy figured out with your tax advisor. You got a lawyer that knows what they're doing, setting it up properly and maintaining it affordably. And now your S Corp is a partner in a new partnership. That is partnership number four. Right? Same type of LLC. This LLC is for holding assets. LLC is for operations. But with a partner, we've changed the type of LLC. There you go. That's it. That is LLC type number four when you partner with someone else.
Now, as an aside, I know that this topic itself can be a little daunting. Oh, how do I find the right partner? How do I build this relationship with a partner? Yada, yada. Big topic, right? I just did a podcast on this. I have an amazing podcast called The Main Street Business Podcast, over 500 episodes, millions of downloads. And it's because it speaks simply, real language, real understanding to the listener on these complex topics. You'll love it. So get into the feed on that. There's a link below to the podcast, and listen to the podcast on partnering. I've got podcasts on all sorts of these topics and more. You're going to love that podcast. And where do you find it? Apple or Spotify, wherever everybody else goes. It's mainstream podcasting at its best. You're going to love it.
Finally, number five LLC. This is going to, as you can imagine, these are getting a little more special, a little more unique. But the fifth type of LLC, we call a special purpose LLC or an IRA LLC. Huh, what is that? Well, let's go to the trifecta. So in an IRA LLC, and let's build the table here. We've got our LLC with a rental property. We've got our partnership LLC with another rental property. So this was number one. This was number four. Then over here, we have our little side hustle LLC. Maybe that's number two. And then, oh, many of you are going to graduate to the S Corp. So you've got your number three LLC. Okay, everything's going well. And oh, all of a sudden, the sun rises in the East, and you learn about self-directing investing your Roth IRA, your traditional IRA, your 401k, your health savings account, investing it in what you know, where you can get an incredible rate of return because you're not just maybe buying stocks, bonds, and mutual funds. You're investing in local businesses, real estate, notes, syndications, oil and gas, things that you know. And you want to invest in. Well, you get to do that. And Wall Street does not tell you this. I've been preaching this from the rooftops for 20 years. Wall Street wants to manage your money. I want you to invest your money in what you know best. It's called self-directing.
Now, the Directed IRA podcast, another one of my podcasts, and our Directed IRA Trust Company, links down below, will help you learn about the strategy and understand it. But this, my friends, is what the ultra-wealthy do. They take their IRA and invest in what they know best. Now, what does it look like? That brings us to LLC number five. So over here, you might have created a little solo 401k. Maybe you have a Roth IRA. Maybe you have a traditional IRA. Maybe you have a health savings account. And you take one or all of these, and you create an LLC. And you get to be the manager of that LLC. And you literally have a checkbook with your retirement accounts. And you go out and make freaking money. And again, you get to choose what you want to do. Again, it could be a small business down the street. It could be real estate. It could be notes. Could be crypto. Anything that you feel confident in doing your due diligence. Certainly, certainly there's a risk. You're going to invest this money. You got to know what you're doing. But you're going to do your best and tend to get, we see it every day, better rates of return than just 5, 6, 7% in some stock brokerage account. Now, I'm not saying Wall Street's bad. I'm not saying stock brokers are bad or whatever. I'm just saying, if you know that there's a great deal and you can get 10, 15, 20% returns, why not? This is how Peter Thiel, owner of PayPal and Facebook, and the list goes on and on, has a $6 billion net worth. And he started with $5,000 back in 1999, just like the rest of us. And over the last 25 years, he's invested it in startups and venture capital, and it is now worth $5 billion. But every year, he gets to put in his $5,000 or $6,000. Yay. You can do the same thing. You can invest in whatever you want to know. So this, my friends, is number five, a special purpose, we call it an IRA LLC.
Now, your cost to set up an LLC like this will be a little bit more. This is more complex. But I'm talking maybe $1,500 to $2,000 with a real lawyer designing it, teaching you how to do it. We stand behind the strategy. It's very well-known, very common. And at directedira.com, you can get started moving your retirement accounts there to prepare for the LLC. And then you call the law firm and meet with a lawyer, and boom, you're off to the races with a special purpose IRA LLC. Very common and exciting to really exponentially grow your wealth inside your retirement accounts.
Now, if you'd allow me to, I'd like to share my story a little bit because I, I think you might relate with the same journey we're all on trying to live our American Dream. Formed my first company back in 1996. I know I look a little younger than that, but no, that was a joke. But I, I've always been an entrepreneur. I was a kid always with the lemonade stand. And to get through college, the only thing I knew how to do was be a janitor. I used to clean my dad's offices in high school and on the weekends with my mom and my brother and sister. And I thought, "Hey, when I get to college, I'm going to open my own little janitorial business." And I did. And, man, it was hard. For seven years, I cried when I fired my first employee. I mean, I was learning all the hard knocks of small business ownership. And I'd sometimes work through the night cleaning restaurants or buildings and learning how to hire and fire employees, and then go to class at 8:00 AM. But I was committed to entrepreneurship. And I wanted to be an accountant or, and ultimately a lawyer. I caught that vision along the way. And I wanted to help other small business owners. And I got passionate about helping the Main Street small business owner. I didn't want to go work in a big city law firm or corporate building. I wanted to be on them, on the streets, on Main Street, working in a van down by the river. And so, as I worked through college, building my small business and learning about small business, I really felt like I was on that same path of you are, where you're living month to month, and it's tough sometimes. You're putting the next business expense on a credit card to pay employees or whatever the case may be. I've been there. But don't give up. You can do this. And if it's helpful, if you allow me, I want to share my trifecta today because it took me 25, 30 years to get where I'm at. And it doesn't happen overnight. I love getting rich slow. I don't need to get rich quick. And when we have that mentality, we start to not compare ourselves to others. But here's my, you know, path and where I'm at now. So my trifecta, sometimes my family's like, "Really? You're going to share that out there?" Well, I'm not going to give you my address or anything. But, so I have one S Corp in my life, and I teach that to a lot of clients. This is the first company I formed back in 1996, and I've had it ever since. I maintain it. I keep it strong and healthy. And this little S Corp partners with any other structure that's ordinary income. We talked about that. So this could be the law firm, it could be a real estate deal, uh, it could be, uh, my Main Street Tax Pros. And then if I make money on online, or I go to a speaking event, or I, uh, have sell books, or anything, I'll put an event here. Anything I'm going to make that's operational, I push into my S Corp. I take a salary, and everything else is profit. Same thing you're doing. If I'm going to go create an operational entity, I don't use LLC number two anymore. I don't, I don't need this little LLC on the side. I let my S Corp own it. And that's how you'll expand. I probably have three or four LLCs owned by my S Corp. Then over on my operational side, I've got multiple rentals. I've got a couple of Airbnbs. I've got a low-income housing deal in, in Chicago area. I've got a rental property in Utah and Idaho. I probably have, let's say, two or three LLCs that own rental property. And I've got probably two or three partnerships where we own rental property. I like rental property. It's a cool deal. And what owns all of those LLCs? My trust. All goes into my trust. Now, what's fun is over in this area. Oh, I'm going to expand that. So let's say, say we expand that section. I have multiple LLCs that are owned by my Roth IRAs or my health savings account. I have a health savings account that owns an LLC that owns a rental property. I have an LLC owned by my Roth and my kids' Roth. That's not Kid Rock, love Kid Rock, but my kids' Roth IRAs, and we do crypto mining, and it's, it's been super cool to be out there in the crypto space with Roth IRAs. I have another 401k IRA LLC over here that's doing, I know this sounds funny, but raw land and investing. And, uh, I owned some cows in my LLC at one point. I've sold those, looking at the next deal for next year. But the fun part here is that these different LLCs encompass this self-directing space. And I learned this from wealthy clients. I was just plugging along, buying a rental property here and there, and I was building my operational business over here. And I had more and more wealthy clients come in and say, "Mark, I need an LLC because I'm going to go invest in this and this and syndicate and crypto and blah, blah, blah." And I'm like, "Oh my gosh, I got to be doing that too." And that's where these special purpose LLCs come in.
So, you know, I just want to say that this trifecta, this picture, is really a manifestation of where I want to go. I love drawing out my trifecta. I carry it with me. It's on my laptop, and I like to look at it because I can, I can get a feel of where I'm going. I would love you all to have a trifecta. I would like you all to manifest where you're going with your American Dream, which LLCs you need, which ones are going to be coming up, which ones you need to get rid of. It's an ongoing process. Don't beat yourself up. And just realize sometimes you got to pay a dollar to make five. My wealthy clients pay for good tax advisors. They pay for good lawyers. They don't overpay, but they have regular meetings trying to build their structure and their plan. So today, as I talk about these five LLCs, these are building blocks. They're building blocks that the wealthy use to make and build wealth and save taxes. And you can be on that same journey. And I've got the resources. I mentioned them throughout this video down below. And I hope that you felt inspired to click on some of those resources because it's going to help you on your journey.
Now, in summary, I hope you've realized and found out you could be using five different LLCs. Isn't it exciting? And, uh, if you didn't catch that vision or that point, go back and watch this again. Um, and I really tried to deliver the details, the actionable items. There's, this is not just raw, you know, rah rah rah or blah blah blah. This is, this is really the secrets that the wealthy use and what I use. And it's, it's not a get-rich-quick scheme, it's a get-rich-slow scheme, and you can do it, and it's super powerful. So please take action today. Do a demo if you're interested in becoming a tax advisor. Get help at the law firm if you need to take your retirement account and control it and continue to build wealth. Get the consultations you need. Get the new tax advisor out of my network and level up. I'm going to be there right with you. The tribe and community that I have loved to build over my career is only getting bigger, and I'm not going anywhere, and I'm going to help you live your dream too.
And one other resource I haven't mentioned yet is my Tax and Legal Playbook. This is a best-selling book, second edition, breaking down the LLC strategies and more. This will become your guidebook on your journey to build your American Dream. Check out the Amazon link below.