Sample Monthly Tax Lien and Investing Newsletter
Business or Investing?
It seems a little strange to focus on the topic of business when maybe
all you really want to do is invest your money and receive a decent
return. Fair enough, but let me point out one thing about investing.
Whenever you step outside the boundaries of being merely an employee
with a fixed paycheck and perhaps a mutual fund or two in a retirement
account, then you are entering the world of business whether you want
to or not.
So let’s talk about this concept.
Whether it’s real estate, stocks, gold coins, or tax liens, investing is both a business and an investment.
When I first began real estate investing I purchased a few
informational products and I read as many books as I could find on the
subject. From Carelton Sheets to Robert Allen, I read and learned from
the experts. However, as I started actually buying properties I quickly
realized that this thing called “Real Estate Investing” is actually a
business. I had to keep track of expenses, such as mileage, training,
books, repairs and management. Soon thereafter I even started to think
about marketing myself with business cards and advertisements. Now, if
that only sounds like investing and not running a business, then I
guess I don’t know what business is all about.
For business training, I had to go beyond the real estate and stock
market investing gurus and look to business training experts. One
expert who built up a multi-million dollar business with over 500,000
customers and clients was the late Charles Givens. His organization
taught me to think about practical personal tips that are at the very
core of business, such as maintaining a proper filing system.
recently I have immersed myself in Dan Kennedy books, which focus on
marketing but also include tips on running a business. And as I
recently wrote about, I consider Bill Bartman an outstanding business
coach and mentor.
If you haven’t already
ventured beyond real estate or stock investing books, I challenge you
to learn from other experts who have created businesses. And if you
haven’t already noticed, the richest people in the world who haven’t
inherited money are almost always business owners. Even stock market
investor Warren Buffett actually runs and owns a business called
Berkshire Hathaway. His product is selling shares of his company to the
public and his service is buying large pieces of other companies at
undervalued prices. In my mind, Warren Buffett is a business genius
first and a stock investing genius second.
As well, “The Don” (Donald Trump) is really much more of a business
owner than a real estate investor. Many of Donald Trump’s ventures fall
well outside of real estate (e.g., The Apprentice). I also think if you
look at his expertise in real estate it is concentrated primarily in
Manhattan. Outside of Manhattan, most of his deals are joint ventures
or selling his name to help promote other projects or developments.
Again, he is a business expert first and a real estate expert second.
My point is this:
What we mistake as a great investor is really more of a great business owner.
Consequently, I want you to become a great business owner!
When you first start out with your concept of making money, whether
that’s real estate, stocks, network marketing, lawn maintenance,
daycare, or your own unique idea, you will be classified as a sole
proprietor. What that means is you are the same as your business. You
can name your business practically any name as long as it does not
include “LLC,” “Inc.,” “Corp.,” “Ltd,” etc. Those terms are designated
for formal business structures. You can even visit your local bank and
fill out “doing business as (DBA)” paperwork on your existing bank
account, which will allow you to accept payments in the name of your
There are millions of sole proprietorships set up each year and you
really don’t have to do that much other than file your personal taxes
and include your income and expenses of your sole proprietorship. You
will be taxed at your personal income tax rate. And, as long as you are
trying to make money, under the U.S. tax code you can file a loss and
take a tax deduction in 3 out of 5 years.
Formal Business Structures
If this is so easy, then why create a business? The main purpose of a
business structure is to protect your personal liability. When you
operate as a sole proprietor, you and your business are the same and
your personal assets are at risk.
However, before rushing out to your attorney, please consider the most important tenant of business:
If you are not trying to make money, then you are operating a hobby, not a business.
Therefore, it is more important to test out your business ideas(s),
real estate project, etc. and make sure it is viable. If so, you can
set up a business and switch from a sole proprietorship to a business
structure, like an LLC. In the mean time, please consult with an
insurance agent and strongly consider purchasing umbrella liability
insurance or specific insurance riders. Of course, if you are
purchasing real estate, you will want to purchase insurance for each
Please don’t get me wrong. I am not suggesting that you take on risk. I
only want you to remember that you can get so caught up in setting up a
business that you forget to make money and enjoy the benefits of having
your own business.
If your business has a service component, you may want to consider a
corporation (S or C). An S corp. is a flow-through business like an
LLC. That is, the profits and losses will flow through to the owners.
As your business matures and takes on many employees, most experts
recommend setting up or switching to a formal corporation status, known
as a C corp.
I have set up numerous LLCs, an S corp. and a C corp. Although I am not
an accountant or attorney, I would be happy to help you through the
decision process of setting up your business during one of our training
sessions this year. Please note that we do not have many workshops or
seminars because we are on the front lines buying real estate,
developing properties and managing rentals.
Also, I will go through how to create a winning business plan that will
get noticed. If you have the right business concept, I will even put
you in touch with private investors who have millions of dollars of
funding available. Of course, I can’t guarantee that your business plan
will be accepted by these investors, but I can tell you that I have
personally raised millions of dollars using the template that I will
Cheers to your business.
Rogue Investor Membership
Now is the time to become an active Rogue Investor.
P.S. You get 3 full years of membership by purchasing the Rogue Real Estate Investor Collection:
For more information, visit this page:
Rogue Real Estate Investor Collection.
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