SUMMARY
Tom explained how important it is to have a professional that knows more about the tax law when you’re an entrepreneur or even if you’re just about to start a business.
Listen to the podcast here:
Podcast highlights:
01:45 – About Tom Wheelwright
04:00 – Taxes are FUN
05:43 – Building Your Wealth
07:33 – Handling your Own Audit
08:41 – Understanding your Incentives
Tom Wheelwright – Tax and Wealth
Tax for the Entrepreneur and Entertainment Industry: How to build your wealth like the professionals
BIO
TOM WHEELWRIGHT, is a CPA, CEO of Tax-Free Wealth CPAs (CPA firm in Tempe, Arizona), Best-Selling Author of Tax-Free Wealth, and Founder of ProVision. Wheelwright is a leading wealth and tax expert, global speaker, and Entrepreneur Magazine Contributor. Tom is best known for making taxes fun, easy and understandable, and specializes in helping entrepreneurs and investors build wealth through practical and strategic ways that permanently reduce taxes. As a Rich Dad Advisor to Robert Kiyosaki (Rich Dad Poor Dad), Tom frequently speaks at conferences worldwide to entrepreneurs on these topics. His work has been featured in The Wall Street Journal, Forbes, Accounting Today, Investor’s Business Daily, Consumer Reports, USA TODAY, FOX & Friends, CBS 5 News Phoenix, ABC News Radio, NPR, and many more media.
[Transcription]
Michael Silvers: This is Michael Silvers. I wanted to welcome you to the show today. As everybody knows, and I’ve said this on the other podcast, there’s a big difference between coaching and mentoring, and today we’re looking at the mentoring side, and remember, I’m going to make this very simple. The coach is the one who kicks you behind and gets you where you need to go. The mentor is already there, does not have to be already where you want to be in your field. The mentor can be then another field, but you’re going to learn something about and you’re going to use it towards Your Business and being an entrepreneur. The more mentors you have in your stable, the quicker you’ll get to where you want to go. Now, quick remembers a relative term because you want to enjoy the journey. So remember, enjoy the journey. So this gentleman on today is actually one of one of my mentors.
Michael Silvers [00:44] : This is somebody that when it comes to the field, he’s in tax and really wealth creation is who’s one of the top in his field is brilliant. And you’re gonna. Listen to this show as we always do, being open and ready for the information to pour in. And I will say something every time I hear the word tax right, I started to like, I close off and I stopped thinking and this is one of the first people I’ve ever worked with that it actually sounds like it could be fun in some way and that I’m open to it and realizing how little I know until you know what you don’t know. And this will be great. So I wanted to introduce everybody to this amazing gentleman I have on the phone with me, Mr Tom Wheelwright. Hi Tom.
Tom Wheelwright [01:23] : Hey Michael. It’s always good to be with you pal.
Michael Silvers [01:27] : Oh, it’s amazing. And by the way, for those, he’ll tell you a little [inaudible] right but Tom is not only been on, I can’t tell you how many webcasts, podcasts, tours around the world, he’s been onstage around the world, but he’s also been on safaris and one day we’ll talk about that story. So, so much to tell us a little bit about yourself.
Tom Wheelwright [01:45] : Well, thanks Michael. I went to the University of Utah, have a degree in accounting from the University of Utah and then went to the University of Texas where I have a master’s degree in professional accounting with specialization in tax. I spent my first seven years with Ernst and Young, including three years in the national tax office. I’m actually the last time we had a major tax legislation was 1986 and I was in the national tax office. So I get to see two of these in my lifetime, which is amazing. And I hope to live to see a third, but it’s pretty amazing. I was there like you said, 1986. I was teaching. I was actually creating courses and teaching courses for the Ernst and young CPA’s. I spent four years as an in-house tax advisor for fortune 500 company and started my own firm about 25 years ago. And now I spend my time teaching entrepreneurs, investors around the world how to permanently reduce their taxes by 10 to 40 percent and less than three months.
Michael Silvers [02:52] : Wow. That’s, and I will say that I’ve learned a lot from you and everything that I’ve done really, you know, again comes with advice because we try to do things on our own all the time and boy, we can make a mess of things as entrepreneurs. And you’ve worked with entrepreneurs for how long now?
Tom Wheelwright [03:10] : Oh, 35 years,
Michael Silvers [03:12] : Right. That’s what I thought. And I know a lot of people listening to this call, you’ll come from different walks of life. You’re going to be, whether it’s, I want to speak on stage or I’m in the entertainment field. I’m creating my own business, network marketing. Wherever you come from. There is that point of being an entrepreneur where it is so important to have mentors like Tom in your camp. And this is a great way to do it. Tom’s also gonna actually help us as faculty on the Mentor Studio and really be there for our students in many different ways. So Tom, if you really took a look at words to live by and we think of the end is the beginning. You sort of have to look way out. What would you say is one of your mottos or phrases that best captures what you’ve done with your life?
Tom Wheelwright [04:00] : Taxes are fun, easy and understandable, and that’s really it. You know, taxes, they’re fun because everybody likes a refund and they’re really easy. Once you understand the tax law in every country is fundamentally a series of incentives and you just have to look for how do I get those incentives and primarily there for entrepreneurs. I mean, the great thing about, you know, being on this, this call is that, this, that the target audience of the United States Congress is entrepreneurs. OK? So, so everybody on this call is the target audience. And what the government wants you to do is they want you to, you know, build businesses. They want to create housing. We want to do certain things and they give tax incentives in order to do that. So it’s really very easy to understand. It’s very understandable. You don’t have to know all the details. So that’s what people like me or for OK, you do have to understand what do you do on a daily basis to reduce taxes because let’s face it, taxes are your single biggest expense.
Michael Silvers [05:06] : I hear this all the time because we do talk to a lot of entrepreneurs. There are two things I hear all the time. It is I’m paying way too much tax and sometimes I say, does that mean you’re also making more money, but then you need to find an expert, but you know, I‘m paying too much tax and how can I create, how do I create wealth if I’m paying all this tax? Those are things we hear all the time.
Tom Wheelwright [05:28] : And those are the two things you know, I do for a living quite frankly, is we actually discovered when we were helping people reduce their taxes in our, in our CPA firm, that a lot of people had no idea how they were going to build their wealth. And the reality is until we understand, until we can understand how you’re going to build your wealth, we really don’t know what to do from a tax standpoint because you don’t want the tax tail the investment dog. So speak. You always want to make sure that you’re building wealth the way professional investors build wealth. And that’s basically what we teach is what’s the difference between an amateur investor in a professional investor? How do you create that plan of action so that you’re really doing those things that reduce your risks at the same time, increasing your rate of return and reducing your taxes.
Michael Silvers [06:20] : And this is going to be one of those. This is a really hard one for everybody listening out there. And again, I think it’s by education, but I’m going to let you, the expert. How do I as a new entrepreneur, somebody who’s getting out there, how do I not sort of bury my head in, let tax scare me.
Tom Wheelwright [06:38] : I just hear the term. So here, here’s the first thing. So everybody should write this down. And Michael, you just repeat after me. I will never, I will never speak to speak to the IRS.
Michael Silvers [06:52] : The IRS.
Tom Wheelwright [06:54] : And that’s really how not to be afraid. It’s not your job to speak to the IRS. That’s my job, to speak to the IRS. You know, you talked about at the beginning, you have mentors, you have people on your team that do those things, that they’re the expert, you know, it’s their expertise, so you don’t need to be worried about the IRS, but you have to have as a tax advisor, OK, a CPA who will understand the tax law and help you understand what you need to know about the tax law, the simple things that you can do every day to reduce your taxes, how to maintain your documentation, what to do in preparation for your tax return will go off and prepare your own tax turncoat. Don’t go off and handle your own IRS audit. That’s what makes people afraid is because you know, if you compare the average entrepreneur to the IRS, who knows more about taxes will the IRS does. But if you compare the IRS to a really good tax advisor who knows more about tax, all the good tax advisor. So it’s just a matter of putting up the professional, you know, and that’s what you gotta do you gotta put a professional with a professional.
Michael Silvers [08:01] : Yeah, that’s actually really great advice because it’s a nervous piece. The minute they hear that and people actually then do, let’s be honest, they do stupid things. They do things that they normally wouldn’t have done because they get into an area of fear.
Tom Wheelwright [08:17] : And they say stupid things, you know. So two things that people do, when they talk to the IRS, they stay stupid things to the IRS, you know, gets them in trouble. But the other thing is they go, they’re afraid of it. And so they feel like, well if I’m gonna I’m just going to have to cheat. You know, I just, if I cut a corner here and I cut a corner there, but here’s the thing, you don’t have to cheat on your taxes to reduce your taxes. What you have to do is understand which incentives you’re entitled to because the government wants you to do certain things. You will. The way I look at is you’re a partner. We’re all partners with the government, right? I mean they take portion of our paycheck or our business income or investment income there are partner, OK, well we can either have them be a good partner or bad partner. We can be a good partner or we can be a bad partner, right? So it’s just understanding how do you work well, how do you make them a good partner? How do you work in such a way so that you’re doing what they want you to do and pay less tax by doing so.
Michael Silvers [09:21] : You know, for you, you know, again is you. If you’ve created what you have, what would you say is one of the biggest failure is good as an entrepreneur. By the way, everyone, the more you fail, it means you’re moving forward. The more you fail, it means you’re, sometimes you’re taking a chance, but you can take structures, chances. But it’s only feedback. What is, what’d you say, one of the biggest challenges, obstacles or failures you’ve had and how did you overcome that?
Tom Wheelwright [09:44] : I actually think the biggest failure I’ve had is admitting mistakes. You know, I’m, I’m a dreaded a student, you know, I mean, I did well in school, so. Oh, I didn’t make mistakes and I was very good at not making mistakes and, you know, it’s, it’s like you say, as an entrepreneur, not only do you need to fail off often, you need to fail fast. OK? Because the faster you’ll fail and the faster you admit that you failed. OK? You know, the faster you can recover, right? So, like in my entire life, I got fired once by an employer. That was price waterhouse fired me after seven months. It took me years before I would even admit that I’d been fired. Right? I’d screw it on dance around it, you know, but, buckminster fuller, who’s a, you know, one was a great genius of our time.
Tom Wheelwright [10:33] : He once said that a mistake is only a sin when it’s not admitted. OK? So once you admit that you made the mistake, I mean, if you look at our presidents and our politicians in the past, what have they got in trouble when they don’t admit they make a mistake? So, you know, I make mistakes. I made a mistake taking jobs pricewaterhouse, but I made mistakes along the way. You know, I’ve made tons of mistakes in business. I’d say the biggest mistakes I’ve made or with partners, OK, in that I have not, I’ve really, I think the mistake I’ve made is not being generous enough with people on the other side of the table from, or even people on the same side of the table. And I’ve learned that over the years and now I’m very generous, you know, with people I’m partnering with. I want to make sure that they’re taken care of. Because when people do something to you, it’s because they feel you’ve done something to them. So they won’t do, they won’t, they won’t create a challenge for you unless they feel justified in doing so.
Tom Wheelwright [11:44] : Right. And so, I mean, I remember very clearly, I am a partner years ago who he was, he said, OK, so if we go along and, you know, we’d been partners for several years and we’d go along and you know, you say you want all this to happen in the next six months and it doesn’t what happens? And I said, well then, you know, basically we’re not partners anymore. So what he did was he did a preemptive strike, right? And you went out and tried to steal my business because he didn’t believe that we could get it done in six months and he didn’t want, you know. And so all I had to say, well, you know what, here’s what we’ll do. Let’s figure out if this doesn’t happen in six months, let’s figure something out now. So that six months down the road, you’re not feeling, you know, what’s, you know, what’s going to happen here.
Tom Wheelwright [12:33] : So I really think it’s a matter of the mistake I learned is that while I may have been right in our agreement, I’ve been may have been right in, you know, justified in really what I did. I mean, I, you know, clearly contractually it was in the right, it doesn’t mean that it was the best way to behave. And when you’re an entrepreneur, when you’re a business owner, what you learn is, is that you know, what’s right isn’t always the best way to do things. What the best way to do things is to take care of, make sure everybody gets their piece of the pie and is comfortable with what’s going on.
Michael Silvers [13:09] : I agree with you actually because, you know, that’s part of what we teach to all the time is that win-win situation. But that’s great because that, you know, it comes up with entrepreneurs all the time. This whole thing about that failure piece. So that was great. That was fantastic. How do you keep that momentum? How do you keep growing? How do you keep just going on?
Tom Wheelwright [13:29] : You know, I really think you have to keep looking forward. Right? Best compliment I ever got as an employer was from actually somebody who is a currently a partner of mine and when she came to us right out of school and she said, I asked her what’s different about us and then what she was expecting. She said, well, I never thought I’d work at a CPA firm that focused on the future of the clients as opposed to the past of the clients. And I think that what gives us energy and what gives us drive is looking forward. OK. You know, some people call it hope, right? I mean that’s, that’s why religions are so successful because there’s hope for future even if not this life, it’s the next life. Right. So that whole, I think looking towards the future, enjoying the, like you say, enjoying the ride is very, very important.
Tom Wheelwright [14:20] : It’s also important though, to have something to look forward to besides what you’re doing right now because then you can look at, OK, how do I, how do I grow, how do I get better? How do I improve, how do I serve more people? Right? And another of my favourite, a bucky fuller quotes is the more people I serve, the more effective I become. So, you know, one of our jobs as entrepreneurs is to serve more people and frankly one of our jobs is to make, are actually bring our prices down. You know, if you look this whole thing of inflation, what’s inflation? And they go, well, an iPad doesn’t cost as much as it used to and I’m going, well yeah, but how many iPads do you have? Right? But at the same time, that’s true. If you look at technology, technology is always doing more and costing less. I mean, you consider that our phones now are more powerful than the most powerful supercomputer 20 years ago. Right? And so that’s our job, our job is to do, is to actually create more and always be looking at how do I make it a better experience for the customer, how do I make it a better experience for our partners? How do I make it a better experience for my vendors, my service providers, how do I make life better for everybody else? To me, that’s what being an entrepreneur is all about.
Michael Silvers [15:35] : That’s great. That’s fantastic. That’s like the perfect place to wrap this because it’s going to say we’re getting close to the end and it is about making a better world is making a difference with everything we do because we all stopped about right, of contribution of how do you contribute and you know, really be there for other people. So that, that was great. I was don’t need end to anywhere else. What would you say, just we’ll do the one last, who in your life because you have spoken on stage with some of the greatest people in the world, some of the thought leaders. But what does that best piece of advice you were ever given? Maybe again in your career or being next to somebody on stage that you just live in,
Tom Wheelwright [16:21] : Be generous. It was interesting. I can actually pinpoint where it was. I was speaking with Robert Kiyosaki in us in Sydney, Australia and we were doing a three day event on investing and he was talking to them about how to raise money and he said, the way to raise money is to be generous with your investors and I had never thought of it that way at the time. I thought that is brilliant. That was great, but I will tell you actually the best, the absolute best piece of advice I’ve ever received, and it was actually from a colleague was when I was a tax advisor for fortune 500 company and he said, time, you tend to do too much yourself. He said, if somebody else can do it eighty percent as well as you can, then you need to let them do it.
Tom Wheelwright [17:08] : And that is the that I would say that is the number one piece of advice that I’ve ever gotten for being an entrepreneur and it’s why I can. I mean, I, people ask me all the time, how do you get so much done? Well, I don’t do it. OK. I just don’t do it. I, you know, it’s not going to be as well as I do it. I mean, there are certain things that only I can do and those are the only things that I do and then everything else that somebody else can absolutely do. I let them do because if they can do it if they need to eighty percent as well as I can, my guess is it’s probably going to be better than what my competition does. So I’m OK with eighty percent, right? I just can’t, I can’t get lower than eighty percent and it’s OK. I’d love to see a higher than eighty percent, but I really do look at that on every single thing I do. If somebody else can do a percent as well as I can, I let them handle it.
Michael Silvers [18:00] : I want to thank you for being on the show today. This has been. Get it, that that’s a great piece of advice that will leave it with, and I think the thing that you had me repeat about, no talking to the IRS that is also going to change a lot of lives out there and sort of we can relax a little bit as we move forward and create our wealth around our tax. I think that’s another brilliant concept. Thank you for being. Go ahead.
Tom Wheelwright [18:25] : Well, so that is actually the thing. I mean if you look at how much wealth you would build if you didn’t have to donate to the government, it’s astounding. I mean we took, we took, for example, if you just add a $10,000 investment that was making 10 percent a year for 30 years and it’s just the earnings to earnings, they’re being taxed or they’re not being taxed and you’re reinvesting the earnings, right? Compound interest. If you’re being taxed at 40 percent and reinvest in the difference every year, then after 30 years you end up with about $60,000, which you go, that’s great. We’ll go from 10,000 to $60,000. That’s amazing if you’re not paying tax on that, on that income, it’s $200,000 so you literally cannot get where you want to go, paying high taxes. So it is really the number one thing you have to get in control of. You got to get control of your cash flow, which is the income and the expense and your biggest expense is taxes. Got It.
Michael Silvers [19:33] : Thank you so much for this. And I know you’ll be teaching much more on that because that concept you just laid out there for a second. Is that wealth building right there? That’s wealth building and production that most people just, they don’t think about. And we’ll talk more about it through the shows and obviously those who really, again, take a look at the mentor studio and the message. I got too many things, but take a look at really what we’re doing with the mentor studio and how we’re moving that forward in how we’re driving people to that different mind concept. And again, working with someone like Tom on there, you’re going to have access to people normally you wouldn’t really at this point. We’re there to give back where there to give back where we can really make a difference in people’s lives. Tom, thank you for being on the show today. It’s been wonderful. Thank you for all the information. Any last words before we let you go
Tom Wheelwright [20:18] : Know it’s all good. I, I like what you said at the beginning, you know, enjoy the ride, enjoy the journey. I can’t think of a better way to spend my day than being an entrepreneur. I in and people talk about retirement and going, why would I ever want to stop doing this? I mean, it is just so much fun because there’s always something new, always something different and you never know what to expect, you know, is going to. [20:42] You never know what’s going to happen during the day. And what a great writer
Michael Silvers [20:47] : Really is the best there is out there. So thank you Tom so much. Thank you everybody for being on the show today. Wherever you are in the world, have amazing morning, afternoon, or evening. Goodbye everyone.