Episode 81: Looking After Your LLC with Wendy Byford

Wendy: Being in business actually isn’t about the money. The money will come. It’s about being in service to people and doing something that you think has impact.

Michelle: Welcome to “The InFLOW Podcast.” I am your host, Michelle Bosch. I see a gaping hole across society that focuses on the outer work and forgets about the inner work. And what we really need is to bridge the gap between prosperity and spirituality to live a life in flow, with inflows of light, inflows of cash, inflows of creativity, inflows of grace in our lives. Each week, join me for powerful messages and interviews that will leave you inspired and ready to step into flow in your higher work. So, now, let’s go.

Welcome to “The InFLOW Podcast.” I’m your host, Michelle Bosch. I’m super excited to have with me today a guest. Her name is Wendy Byford. Wendy is the CEO and owner of BizEngaged, LLC. I’ve known Wendy for many, many years. And she and her husband definitely are responsible for keeping us on the right side with anything relating to LLCs and incorporation and entities. And so I wanna give you a warm welcome, Wendy, to “The InFLOW Podcast.”

Wendy: Thank you. I’m really, really thrilled to be here. Very excited to talk to your audience.

Michelle: Thank you so much for making the time to be with us. Because I think it’s something important, we deal with a lot of beginning investors. And just so you guys know a little bit about Wendy. You know, Wendy has been doing this now for quite a bit of time. She used to work for corporate America, then she got into real estate investing. So, she totally understands us as real estate investors, you know, what we’re trying to achieve and accomplish. She’s set up over 30,000 entities. She’s serviced, you know, 25,000 clients. And now through BizEngaged, LLC as well, she is now educating and coaching, you know, entrepreneurs on how to make sure that, you know, their understanding at the setup, you know, the balance that they have to play between liability and taxes in terms of what entity they’re gonna end up incorporating with or selecting to be taxed as either an S, a C, and so on and so forth. And she also is an adamant educator about us actually maintaining our books because there’s no point in setting up an LLC if you’re not gonna be treating that entity like an entity so that both the IRS and any court, you know, can never come back and say, “Hey, you’re not treating this like a proper business. And therefore, you know, it’s not giving you the protections that you thought it was gonna give you.” So, thank you so much, Wendy, for coming.

Can we start perhaps at the beginning? So, I know, you know, you were in corporate America, and then you’re in real estate. And then how do you decide that corporations? I mean, I’m excited that you’re excited about that, but, you know, it’s not the very first thing that I would have thought of.

Wendy: Well, actually, it wasn’t the very first thing that I thought of either, to be perfectly honest. When I went to university, I was educated in Canada not in the U.S. And I went to university to get an education not to learn something that I could use to make a living.

Michelle: Yeah.

Wendy: In my mind, you went to get educated, and then after that, you started your life and you worked and all, but not necessarily in what you studied. So, I studied history. And did extremely well in it. But I missed the class where they said old historians become attorneys. I don’t know where I was, but I missed that class. And I was studying things like, you know, English, legal and constitutional history and all of this stuff, you know, where people have their eyes rolled back in their heads and they fall off their chairs, right?

Michelle: Yeah.

Wendy: But to me, it was fascinating. It was absolutely fascinating how our legal system had come into being. So, fast-forward, number of years, I left corporate America, and where I had dealt with contracts and some other legal stuff, but mostly dealing with clients who wanted to put computers into war zones and that sort of stuff. So, I left corporate America and became an entrepreneur. And someone had said, “Look, if you’re going to own properties, then you really need to have LLCs.” So, I said, “Fine.” Got hold of an attorney, came back a couple weeks later and he gave me a single piece of paper, charged me a fortune for a single piece of paper. And I said, “Is this all I get?” And he said, “Go online, get yourself a federal tax ID.” And I said, “Well, what about an operating agreement?” I knew enough to ask. And he said, “Well, I’m not gonna do an operating agreement.” After an hour literally of arguing with him, I said, “You give me an operating agreement or I will go into your desk and get one.” And so he said, “Look, I did this for somebody else. Here, fine.” So, I changed the stuff I needed to change and thought, “This sucks.” Right?

Next one wasn’t much better. And I thought, “There’s gotta be a better way to do this.” But by then, I was in… I had already bought some properties and I thought, “Well, I need to know more about this.” So, I was taking some training and the guys on the stage were saying, “Oh, LLCs you don’t have look after. You don’t worry about them. They’re fine.” And so I thought, “Great, I don’t have to do anything with this.” Well, I was kind of growing around me a group of, you know, attorneys and CPAs and financial planners and whatnot. So, I was telling them how excited I was that I had this entity I didn’t have to look after. I won’t show you the look that they gave me, but you know the look, right, when people know that what you’re saying is garbage but they’re too polite to tell you to your face that you’re an idiot. Right.

So, it’s really… It was hysterical. So, what they did is said, “Look, you need a lot more education on this. So, go read some stuff. Here are some things that you can do.” So, I started to dig and say, “Okay. Well, if I’ve got this entity, what is it I’m really supposed to do?” So, I started to look at all of the things that you’re responsible for. And the more I found, actually, the more surprised I was. I started talking to a lot of attorneys about, you know, how your corporate veil gets pierced and talking to Warren and other CPAs about, you know, what the IRS does when they audit you, and all of these things. And finally, over the years came to a really good understanding of what you needed to do to look after this company.

Well, in this period, I was taking a course… And I had never, never in my million years would I ever have thought that I would end up with an entity that actually set up LLCs. And because I knew so much, people kept creeping to the front of the class when the instructor was talking about entities and saying, “Well, is this true?” And I would say, “Well, you could do that, or you could do this, or you could do that.” Anyway, this went on for an hour, literally, people creeping like…because I was sitting at the front of the class and this was getting really embarrassing. And I’m kind of hunched down by Tara going, “Please don’t see this.” Anyway, when we took a break, she came over and she said, “You know a lot about this.” And I said, “Well, yeah, I’ve been studying it for a while.” And I’d also, by this point, had taken a paralegal certificate. So, she said, “So, do you wanna form a company?” And I’m like, “No. Sorry. There are other things to do. I don’t really want to do this.”

Michelle: Oh, wow. So, you’re a totally accidental entrepreneur then?

Wendy: Oh, absolutely. Absolutely. Well, as it turns out, Gary took the next class and she backed him into a corner and he called me, like, “What do I do? What do I say?” And I said finally, “Okay. Tell her I’ll think about it.” Then he called me back and he said, “I think we’re in trouble.” And I said, “Why are we in trouble?” And he said, “Because she’s talking to one of the other coaches at the front of the class laughing and hugging him.” And I thought, “Yeah, we’re in trouble.” So, we set up this company, which became very successful. Set up 30,000 clients or 30,000 entities for about 25,000 clients. And learned a lot in that process about what people knew and didn’t know.

Our love was coaching and training. I love dealing with people, explaining things to them, helping them figure stuff out. And what ended up happening is we agreed to set up the company with the idea, we’ll do mostly coaching and training. And we ended up with a contract that didn’t give us time to do that. We had just so many people coming in all the time to set up entities that we just literally had no time. So, we basically did a lot of videos and put that in the back office and said, “Okay. When you work with us, then here, you get training and you need to go watch these videos.” And what we found was that people, some of them did that, they watched some of the videos. Nobody watched all of them. Nobody went through everything that we had. And we started to update them and formed BizEngaged because our idea was that, well, people need to know how to look after this more than they need me to set this up.

Michelle: Yeah, absolutely.

Wendy: Lots of people couldn’t set this up. Almost nobody teaches you what to do with it when you got it.

Michelle: And once you have it. Yeah. Now, if you’re a beginning investor, Wendy, and somebody is listening to this, and, for example, a lot of my audience, of course, is, you know, flipping land, what are the major considerations? And I think I alluded to them. There’s a liability aspect and there’s a tax aspect. Can you elaborate a little bit on those two and then perhaps we can, you know, talk a little bit about the major entities that would be suitable for them. And then maybe we can talk about the biggest mistakes that you see, you know, people that now are armed with these and that, you know, give them…make them be exposed, like you said, to their corporate veils being pierced or, you know, an audit from the IRS. So, let’s start at the beginning, maybe explaining, you know, the two major dilemmas that you’re trying to accommodate. And it’s not gonna be the same for everyone because everything depends on the person, on the individual, on what you have already. So, I’ll let you go.

Wendy: Okay. So, people who are just starting out, I always look at this as anything that you start is an experiment, right? Because you wanna make sure that whatever business you’re going to be in where you’re putting your blood, sweat, and tears into this business, and most importantly, your time, your life, you wanna make sure that it’s something that speaks to your soul.

Michelle: Yeah.

Wendy: So, when you start sometimes you don’t know that. Sometimes you do. I mean, sometimes, I know you go into Michelle’s class and you’re like, “This is it. This is what I’ve been looking for my entire life. It’s why I’m on planet Earth. This is what I wanna do.” And you’re off and running. And sometimes people are saying, “Well, I’m not really sure. Maybe I’ll try it. Whatever.” So, generally, what we tell people is never put a golden saddle on a donkey. Okay?

Michelle: I like that.

Wendy: You don’t set up this huge structure of entities because you don’t know if this is going to be what makes your soul sing. Right?

Michelle: Yeah.

Wendy: So, you’re gonna try it. So, you start with one entity. If you’re in the U.S., that’s gonna be just a standard LLC, just garden variety LLC. The bells and the whistles, fine. Right? Because you’re trying it out. But you want that protection. So, put it in an LLC and you try it out. If you’re in Canada, for example, or in Germany or someplace, that is probably going to be a C corp, but still, same thing. You’re trying it out. It’s one entity and not this whole ginormous structure that sometimes people wanna sell you and you’re thinking, “Oh, yeah. Look at this. I can get three LLCs and an S corp and a C corp. And I can get a trust, and it’s all for this packaged price of $30,000.” What? Do you know what you could do with $30,000 other than this?

Michelle: Yes.

Wendy: Don’t do that. Don’t do that. One entity. That’s really what you want. And if you’ve got issues where you’re really concerned about privacy or whatnot, then we can talk about those because quite honestly, unless you’ve got a madman chasing you with a machete, you probably don’t need as much privacy as you think you do and you’re probably not gonna get it because of the internet anyway. Right? The internet knows everything. I’m always astonished, though, how much people know before they even talk to you. So, if you’ve got considerations, so you’ve got, you know, high net worth or something else, then there are things that you can do that make sense.

Michelle: Yeah. For the liability protection point of view, yeah. It’s basically what you’re addressing. Yeah, I totally see that.

Wendy: So, there are things that you can do if you’re in those categories, but most people aren’t when they’re starting out. Single entity. Okay? Taxed as a flow down, right? Sole proprietor if it’s single member, partnership if it’s multiple members. Nothing fancy. You don’t need the all-singing all-dancing version. Just there is…

Michelle: Now, in general, what is the difference between a C corp and an S?

Wendy: Okay. So, the main difference between your C corp and your S corp is that a C corp pays taxes under its own name and an S is a flow through. Now, you’re still gonna file a tax return for each of them on 1120 for a C corp and 1120-S for an S. But with the S, even though you’re filing, that tax return is not paying any taxes, it gets attached onto your tax return and you pay your taxes personally. It flows down to you. And one of the big fallacies that people think is, “Well, I only pay taxes on the money if I take it out of the bank.” Right? So, if I’m making, like, you know, $600,000, but I only pull out $100,000, then I’m not paying taxes on that $500,000 until I pull it out of the bank. No. You look at the profit and loss statement. You’re gonna pay taxes on that profit. They don’t care where the profit is. So, as you make profit, that’s what’s gonna happen.

Michelle: Yeah, yeah. Yeah, I know that one of our LLCs in our conglomerate when we started… Well, now it’s a conglomerate of LLCs, but when we started we started with just very, you know, few. And the biggest advantage for us as a C corp was being able to, you know, shelter X amount of income at a much lower tax break, but that coming with the caveats of not being able to take out some of that money in the form of a distribution and having to do that in the form of a loan, and so on and so forth. So, these are all things that, you know, you have to keep in mind when deciding, you know, how the LLC that you set up is gonna be taxed because the essence in C designation is just for taxing purposes, but from a liability standpoint, an LLC is an LLC, period. Now, can you… So, you mentioned as you were talking about at the beginning about, you know, operating agreements being a one thing that you definitely wanna do, wanna have along with your LLC, you know, and keeping up with probably notes and which, oh, my God, you know, we have work to do on that department as well so that your corporate veil isn’t pierced, you said. Can you explain to someone that has never heard about that what exactly that means?

Wendy: Okay. So, a lot of people think that all you have to do is set up an LLC, throw the documents in a drawer and you’ve got protection. Not the way it works. So, think about your LLC like a vault. Okay? Think vault, steel walls, right? Close the doors in with the file. That’s it.

Michelle: I like the analogy.

Wendy: Okay. So, inside that vault are your client list and properties that you’re working on, and all of those things, all of your intellectual property, anything that you’ve got inside the vault. Okay? Everything else, personal property outside the vault. So, that’s your house, your car, your savings accounts, your investments, all of that stuff outside. Okay? So, inside the vault is your business. So, let’s say that… Look, think of the people who are suing you. Let’s say that a deal goes bad and you get sued. You can get sued for anything. It doesn’t necessarily mean you did anything wrong. Someone just gets mad and decides to sue you. So, think of the people who are suing you like bank robbers. They parachute into the vault. Okay? Don’t worry about how they got there. They’re inside.

Michelle: I’m having a mission impossible, you know, image in my head.

Wendy: So, they’re inside the vault and they’re looking around at everything you’ve got. “Oh, look at that. There’s a piece of land, and then there’s a piece of land, and oh, there’s some money over there. Oh, really cool. Okay, fine. This is stuff we can get.” They have in mind a much greater judgment, that’s if you lose the lawsuit what you have to pay the other side. They’ve got a much bigger judgment in mind. And even if we took all of this, it’s not gonna add up to what we’re thinking. So, how do we get more money? So, with their X-ray eyes, they look outside the walls of the vault. “And look, oh, there’s a nice house. Oh, there’s a nice car. Oh, look at those savings accounts and those investments. Aren’t they great? Okay. How do we get to them?” Because I’ve got the steel wall in this vault. How am I going to get to all of those goodies outside? So, I run over to the judge and I say, “Mr. Judge, I’ve looked at the way this person is running their company. And they’re running it as if the LLC doesn’t exist. They’re running it any way they want. They’ve got no documentation. They’ve got no financial standards. They’ve got no accounting software for their books, they’ve got nothing.”

Michelle: No individual or separate business account, you know, which is so, so important, no commingling of the funds, you know, between personal funds and business funds. Yeah, absolutely.

Wendy: All this stuff, nothing. They’ve got no documentation on their decisions. They’ve got… They even signed their contract with their own name instead of the name of the LLC, all this stuff. So, if we win, I wanna get a blowtorch and pierce that wall so I can get to their other assets. And the judge looks at all of this stuff and says, “Okay.” So, if you lose the lawsuit, they can then take their blowtorch, cut a hole in the steel wall, climb through, and now get to everything you own to pay that judgment.

Michelle: Yeah, I see.

Wendy: So, now everything that you’ve got, that lifestyle that you’ve built up is at risk because you didn’t do some simple things to look after your LLC. That’s called piercing your corporate veil.

Michelle: Yeah, exactly. And that’s beautifully explained. When we started, Wendy, I have to admit, we started doing and putting deals into our own name, at least our first five to seven deals. Because when we started we had nothing to lose. It would have been like squeezing water from a stone. But if you are coming to the situation of, you know, land flipping with some actual assets to your name, you definitely, you know, want to very quickly as soon as possible, you know, start an actual entity, an LLC and do business inside of that LLC and follow all the recommendations that somebody like Wendy would educate you on to make sure that, you know, from a liability standpoint you’re getting the protection that you need with the entity that you choose, but also from a taxing perspective that based on your age, you know, your other assets, other business, you know, income in general. What combination will be the best for your particular situation, for sure? And I know that you work very closely together, for example, with our CPA, Warren Taro, in making sure that from a taxing point of view that, you know, those considerations are being brought to the table as well, which is fantastic, you know, because there’s a lot of people out there that claim I know about this, but without having the real professional CPA there really understanding their particular situation as well. I think it’s a mistake to only bring one person or one expertise to the table.

I remember we were doing…we were actually redoing our estate planning a few years back and it was with our attorney because we had done many more things since when we had created that back in the day. And we needed to kind of like, you know, bring it up to, you know, all the other things and messes that we…I’m like messes where we made money, at least. And all the other activities that we were now doing, you know what I mean? And it was so, so important to not just have, you know, the legal perspective, but also having the tax perspective as well. And that is something that I always love about, you know, you guys with BizEngaged is that you bring those two things to the table, so that it’s a really very, you know, bulletproof, educated decision and entity setup, the one that is being done and delivered for you. Now, can you tell us a little bit about…because everyone is like, “Oh, my God, should I get a Nevada LLC, or a Delaware LLC, and all of these things?” What are the considerations there?

Wendy: So, it really goes back to some common sense questions.

Michelle: Yeah.

Wendy: If you’re in a class, and I’m thankful to say that Jack and Michelle are the real deal. As Michelle said, we’ve known them a long time. We’ve watched them a long time. They’re very good with all of you. If any of you have been in other courses, you may find that somebody on stage, say, “Oh, you have to set up, you know, X, Y, Z in Nevada. Or, it’s got to be in Wyoming, or it’s gotta be here, or it’s gotta be there.” The person on stage is in a different snack bracket from you. He doesn’t know your situation. He doesn’t know other things that you’re doing. He doesn’t know where you live. I mean, he doesn’t know anything about you. So, kind of take that with a grain of salt, put it in the back of your mind, and, you know, go and investigate. Because when you’re just starting out, typically, you’re going to set up the LLC where you’re doing business. Now, does that mean you can only do business in that state? Of course, not. Right? So, if the main place that you’re doing business is Arizona, for example, does that mean that you can’t do business in Texas? Of course not. You can do what’s called a foreign registration, which means that you say, “Hi, Texas, I’ve got this Arizona LLC. Can I do business with my Arizona LLC in Texas?” And Texas will say, “Sure. Just register here, pay the fees and you’re in.”

Michelle: Yeah. Yeah.

Wendy: So, now you’ve got one LLC registered in two states. So, why do people keep saying Nevada or Wyoming? Because the laws in those two states are very, very, very strong and it is really, really hard to pierce the corporate veil in Nevada, especially, but also in Wyoming. So, if you’ve got high net worth, then it might be worth your while to set up in Nevada and foreign register into the states where you’re doing business, bearing in mind that the only way that Nevada law can cover you is if all of your contracts reference Nevada law and the people who are signing those contracts agree to Nevada law.

Michelle: Yeah, yeah, yeah. Absolutely. We are actually now incorporated in Nevada for us and made absolute and complete sense to be actually incorporated here in Arizona. And that’s exactly what we do. We go into a new state, into a new county, and actually, we go to the extent of actually testing counties and seeing, “Am I gonna even get deals here? And if I’m gonna get deals, am I gonna be able to sell them?” And once we’ve established that, that we’ve sold the very first deal and that’s been a good county and a good state to continue to pursue, at that point then we’ve gone and said, “Okay. Let’s register now in that state because I know I will continue doing business there.” It’s kind of like you saying at the beginning, you know, you don’t want to set up like a $30,000 LLC package when you don’t even know if it’s gonna… You know what I mean? Exactly. If you’re not gonna pursue this 100%. So, that’s something on registrations that is something to consider, especially in your testing phase, you know, when you’re testing counties in different states is, don’t pay them money until you know for sure that that’s what you’re gonna…a state that you’re gonna continue to work. Absolutely.

Wendy: Yeah. And you can always ask the title company wherever it is that you are if you’re using them to do your transfers, whether or not you have to register because in some states you can’t close the deal if you don’t register.

Michelle: Okay.

Wendy: Like New York is one of those states that gets really crispy about this stuff. Some states do. Some states get really nasty about it and some states don’t care. Nevada. “Do whatever you want. We don’t care.” But some other states get really a little bit upset about it. So, if you’re using a title company or an attorney, you can always ask…

Michelle: They’ll definitely let you know. Yeah, yeah.

Wendy: They’ll let you know if you have to free your first deal. Otherwise, just go test the waters. So, you don’t have to set up, you know, huge structures, like if you say, “I think I’m gonna go into Ohio, so I need to register there.” Well, at least get your deal before you go register because you don’t actually know. You can always do a deal in the name of your LLC even if it’s not registered in that state. And then if they say, “Well, it needs to be registered here.” You can say, “Well, I’m in process.” And then go get somebody to help you do your foreign registration.

Michelle: Yeah, yeah. Absolutely.

Wendy: So, you don’t have to do silly things in advance. Right? Just make sure that you’re cautious as you go forward.

Michelle: Yeah. Now that you mentioned title companies, you know, something that a title company will always ask us, we see it sometimes being asked inside of our Facebook community, you know, the Land Profit Generator community, you know, a title company is asking me for operating agreements. Operating agreements is something that, for example, if you were to be set up by Wendy and Gary, that they will deliver for you and that is normal standard procedure, basically, where the title company wants to see what is your relationship within that LLC? Is it member managed? Is it manager managed? And are you authorized to actually be a signer, you know, for that LLC? So, that is something that is completely, you know, normal. And I know it’s been asked a lot inside of our group, I’m like, “Can I show this?” And I’m like, “Yes, absolutely. This is something that is standard procedure, standard practice.”

Wendy: Absolutely. And in fact, when we set up LLCs, what we do is we actually send you an electronic copy of your operating agreement before your hardcopy arrives that you can sign electronically, so you can email it to a title company.

Michelle: Yeah. Perfect.

Wendy: So, it kind of helps you not having to stand there and scan in 35 pages because I don’t have the patience for that. I don’t expect you to have the patience for that. So, we try to do things that kind of help people out that way. But the thing is, don’t be afraid to ask. When you’ve got your LLC, don’t be afraid to extend yourself a little bit. One of the questions that we get a lot, though, kind of going forward with the structure is people will say, “Well, my CPA,” hopefully, Warren has said, “Well, you know, you need to be taxed under Subchapter S because you’re making enough money to do that and it would really help save on taxes.” And they say, “Well, can I just change this LLC to a Subchapter S?” And the answer is, I’m gonna sound like an economist and I apologize, it depends. Right? So, if you’re doing a lot of deals, then doing all those deals in one LLC may not make sense because then you’re accelerating the risk factor. Right? If I’m doing five deals in the same LLC all the time, then there’s always a risk one of those is gonna go wrong and everything else is at risk. So, you might wanna start separating those out into different LLCs. So, maybe you want a couple of LLCs or maybe three, depending, and they may be set up in different states, depends on where you’re doing the business. Now, if in the aggregate what all of those LLCs is producing has caused your CPA to say, “Hey, you should be under Subchapter S.” Sometimes they say, “Well, I’ll just change all of them to an S.” Doesn’t make sense because then you’re filing three 1120-S tax returns. So, what you do is, and this actually helps from a risk standpoint as well, you set up an S corp or an LLC taxed as an S corp, the IRS gives them exactly the same, no difference. You set up the entity, and you have it own those two or three different LLCs. All the profits flow up to that LLC, which has never done a deal, is absolutely pristine, and there’s no reason for anybody to sue it. Because if you take an LLC that you’ve already been using or there’s a possibility somebody will come back and sue it, then everything that that LLC owns is at risk.

Michelle: It has done, and is at risk. Yeah. And now, in terms of mitigating risks, this is something, actually a wonderful shift in the conversation in that, you know, we also get asked the question of, like, how many properties should I have? And in the traditional, you know, house flipping world, there’s always this rule of thumb that, you know, one house, one LLC. And for us, you know, it’s a matter of liability or risk tolerance towards liability. So, for us, we feel comfortable with having, in value, about $500,000 worth of value in each LLC. And that could be, you know, 5 properties of $100,000 each or it could be, you know, 10 properties of $50,000 each. It doesn’t matter. And it’s up to you to decide, basically, once you are doing this, actually, professionally and you have figured out, like Wendy said, that you are committing to this for the long haul, you know, at that point deciding, “Okay. I will need to extend, you know, beyond my initial LLC to have maybe other disregarded entities that roll up to that LLC, but they give me the liability protection that I’m looking based on the value of, you know, the inventory that you have sitting in each of those.” Or is there a different way to think about that?

Wendy: No. So, it always goes back to what lets you sleep at night?

Michelle: Yeah, absolutely.

Wendy: Regardless of what type of real estate you’re doing.

Michelle: Yeah.

Wendy: So, if you’re doing buy and hold properties and you always look at how many front doors do I have and how much equity do I have? Right? So, you might say that, “My LLC is full when I have 4 front doors or $100,000 in equity.” That’s what lets you sleep at night. I had a guy who said, “I’m not risking more than $1 million,” because he bought apartment buildings. Right? And so he’d fill up his LLCs and save $1 million in equity. We’re done. So, it depends what lets you sleep at night. So, if you thought properties sitting in your LLC and you’ve got, you know, $50,000 in those properties, right? And you say, “Well, if I start adding more, I’m going to be uneasy,” then stop. Right? That’s your tolerance. That’s what lets you sleep at night. So, as you grow, as your net worth grows, as you become better at what you’re doing, then you’re going to find that your risk tolerance will grow.

Michelle: Absolutely.

Wendy: Of course. Right? Look at Michelle.

Michelle: Yeah, your confidence grows. Absolutely. We talk constantly about the four season. You iterate in zeros and, you know, you start getting more confident with more zeros at the end, and therefore with, you know, risks that are higher, of course.

Wendy: Right. But you don’t have to do one property per LLC. I mean, somebody once told me, “I wanna set up an entity so that I have zero risk.” And I told them, “Then you’re not doing real estate. I’m sorry. There’s no such thing as zero risk.” So, what you wanna do is to do simple things, smart things that mitigate your risk and let you sleep at night. So, just figure out what your tolerance is, what that level is, and then re-evaluate it every year. As you’re growing, say, “Okay. Well, I’ve been doing this now for five years. My tolerance has gone from 10,000 to half a million.” And that’s fine. Right? It’s up to you. There is no hard and fast rule. The IRS isn’t going to sweep in and say that, you know, “You’re not running your business properly because your tolerance is too high.” It’s got nothing to do with that. It’s whatever lets you sleep at night.

Michelle: Yeah, absolutely. Yeah. I love that. And in talking to clients, I’m sure, you know, a lot of these conversations of risk tolerance, you know, come up in terms of coming up with a plan for, you know, setting up entities. What are some of the most common considerations that you see people making, you know, when they’re starting? And I know everyone is different, but the ones that you see, like, big brushstroke of biggest considerations, you know, when they’re setting up.

Wendy: The biggest consideration I see that causes real diversity is when people are starting, do they already have some net worth or they don’t have net worth?

Michelle: Okay.

Wendy: And so if they have net worth, of course, their panic that they could lose their house, their car, all of that wonderful stuff. And if they have considerable net worth, there are some really good asset protection strategies. In fact, if you go to the summit, and Michelle is a speaker, so you absolutely wanna go to the summit, because…

Michelle: Yeah. We actually wanna talk about your summit because Wendy is having a summit that is coming up right now I think October 26, if I’m not mistaken.

Wendy: Yeah, 26, 27, 28. Michelle is gonna be on the 27th. You really wanna hear her. On the same day as Michelle there’s gonna be somebody else who’s called Chase Larkin. He’s an asset protection attorney, SEC attorney. Runs the asset protection branch of Shumway Van law firm. Very powerful man. Just salt of the earth kind of guy. He’s gonna be talking about some really neat asset protection strategies. So, if you’ve got net worth, there are things that you can do that will let you sleep at night while you’re learning to do real estate without thinking that, “Oh, my goodness, I’m gonna lose everything.”

Michelle: Yeah, absolutely.

Wendy: If you’re just starting out, you don’t have a lot of net worth, don’t worry about it. Do not lose sleep over it. Get started. Right? Do your first deal. Start your LLC. Do your first deal. Get in there and start making it a business. Then you can start thinking about all the other stuff. But if you don’t have anything, then don’t obsess over the fact of whether you should be in Arizona or Nevada. It doesn’t matter. Do your first deal.

Michelle: Absolutely. Absolutely. Yeah. Totally on board with that one. Now, where can… If someone is interested, you know, on the summit and learning more, where can they go to register?

Wendy: Okay. So, registration is really easy. There’s gonna be a link with this podcast.

Michelle: Okay.

Wendy: You just click the link. It’s gonna take you over to the registration page, and then you register.

Michelle: Yeah. It’s gonna be probably in our notes. It’s usually on the notes on the bottom in the show notes. You guys can probably, you know, just click on the link and it will bring you there. And yeah, that’s gonna… We’re actually teaching that same week. We’re also teaching a masterclass ourselves, so, I’m gonna be like, in and out, in and out.

Wendy: I’ve got the perfect solution because I want people listening to your masterclass. Okay? So, for all of you in the masterclass, do not divert your attention. You can certainly go to the summit free of charge. There’s no charge. The days will… You’ll get an email saying how to get to each day of the three days that the summit is running. And you can watch the eight speakers every day. But don’t take your time away from the masterclass. There is a VIP pass which gives you unlimited access to watch those…

Michelle: How beautiful, the replays.

Wendy: …interviews, all the 24 of them, whenever you want. So, you can go to the masterclass, get all of that really juicy material, and then come and watch all the interviews later.

Michelle: Sounds perfect, perfect, perfect. It’s gonna be awesome. Yeah. I wanna go and check out, you know, the rest of the speakers that you have lined up because I know… I mean, you’ve been doing this for quite a bit now. You’re incredibly knowledgeable and the people that you partner and that you bring, you know, are just as knowledgeable as well. And there’s always, you know, room to grow for all of us, for sure, when it comes to saving on taxes through, you know, the correct entity setup and restructuring and in liability protection as well as you continue, like you said, to grow your net worth. I always ask all of my guests on “InFLOW” Wendy… And we didn’t talk about how did you grow up around money, but what are you doing on a daily basis to make sure and ensure, or how to cultivate that, you know, inflows of money, inflows of ease, and inflows of grace in your life? What are you doing on a daily basis?

Wendy: Okay. My husband and I meditate twice a day in the morning and in the evening. And this is what keeps us grounded. Because in any business that you do, the most important thing is that you’re of service to the people that you’re dealing with. Being in business actually isn’t about the money. The money will come. It’s about being in service to people and doing something that you think has impact, or us keeping people safe, helping them to understand what they have, how to use it, how to grow with it, how to keep themselves safe, and how to progress. That’s enormously important to us. And we know that if we do that well, then the money will come.

Michelle: Yeah, absolutely.

Wendy: So, our practice is in the morning for as long as we can, which sometimes isn’t very long, but we try. Usually, though, if we can do an hour, then we try and in the evening an hour. And that…

Michelle: How did you come to meditation?

Wendy: I’ve been meditating a long time. When I was in university my friends were Indian. And their mothers meditated. Right? And so when other people were going out and reading, you know, novels and whatnot, I was in the library reading the Upanishads, and Mahabharata, and…

Michelle: A lot of Eastern philosophy. Yeah, absolutely. I’m very familiar. I’m a fellow yoga lover myself as well.

Wendy: There you go. And so I knew this. And so what I did was, as I became older, I did more research because learning to meditate to me was tremendously important. And I came across a book that actually helped me a lot. And I started to meditate. And I had an experience. And to me, meditation isn’t for calming the mind or whatever. Meditation for me is to find God.

Michelle: Yeah, absolutely.

Wendy: You can call it whatever you want.

Michelle: To have a communion, a moment of communion. Yeah, absolutely.

Wendy: Right. So, that’s why. And so I had an experience that I couldn’t explain that blew me out of the water and I thought, “Oh, my goodness, [inaudible 00:40:54].” As life progresses, I was in a very high-pressure job in corporate America. I was on a plane and on Monday morning coming back some Friday. Gary was a bachelor all those years [inaudible 00:41:09], because if he hadn’t watered the plants or taken things to the dry cleaners, nothing would have gotten done because I was never home. And then, as we got a little older, we actually came across somebody that made a lot of sense because I don’t know if this has ever happened. I don’t wanna talk about this. I don’t know if this has ever happened to any of the people who are listening, but I had what I call a… I had an out with God one day, like, you know, “I wanna know about the man Jesus. I don’t wanna know what they taught me in Sunday school. I wanna know about the man. And if you’re not gonna help me, then I’m done.” Now, this isn’t something that you actually wanna say to God, right?

Michelle: Yeah.

Wendy: I don’t recommend this to anybody. This was just frustration that was like at this level and it was like, “I am done. We can’t find this.” Well, I found a book. And the reason why I hadn’t had the help all those years is because the book hadn’t been published yet.

Michelle: Well, yeah.

Wendy: How to…

Michelle: Whenever you are ready, you know, the teacher will arise and…

Wendy: Right. And this book was written by someone that I thought this is somebody who knows God. This is somebody who has experience with God.

Michelle: Has had access and is harnessing and cultivating that relationship.

Wendy: That’s right. And so I went to find that person from reading that book. And so when we followed his teachings, he said, “I don’t care what religion you are. I don’t care if you’re Muslim, Hindu, Jewish, Christian. I don’t care. You can be anybody. It doesn’t make any difference. I’m gonna teach you how to find God.”

Michelle: Yeah.

Wendy: And so in following his teachings, what he was saying was correct. I mean, he was absolutely dead-on. And somebody said to me, “So, did you ever find God?” When you have an experience of God, you know exactly what it is, you know it isn’t about anything else, you know you’re not…

Michelle: And that’s the beginning of an amazing personal relationship, you know, that you just continue cultivating and fostering.

Wendy: Absolutely.

Michelle: And that’s why you go back and sit, you know, for those 20 minutes in the morning again, and go back every morning, and go back every morning to continue cultivating that. Yes.

Wendy: We absolutely do because it’s your grounding. And it makes you also understand what’s important in life. Right?

Michelle: It gives you perspective. Absolutely, for sure. Especially when, you know, everyone, myself included, you know, it’s a human experience that you sometimes get overwhelmed by just, you know, the complexities of life and you don’t wanna sink in them, but you wanna be able to stay above them. And in order to do and see them as just clouds passing by, you have to have a little bit of perspective. And if you don’t have any moment of reflection ever in your life or during your day, you know, it’s kind of hard to do that. Yeah, for sure. Yeah, absolutely.

Wendy: I do. So, it grounds you. So, if you’ve got… It doesn’t matter what your practice is. I mean, somebody told me that no one in her family had ever meditated, but her grandmother used to go out on the porch every night and rock. And I said, “Do you understand that’s a form of meditation?”

Michelle: Yeah, absolutely.

Wendy: Just like walking a labyrinth is a form of meditation. It’s a walking meditation. Whatever it is that you do that feeds your soul, that’s the important thing. You need to do something in some part of your day that fills your soul and keeps you grounded.

Michelle: That’s beautiful. I love that. Now, my final question is, if you were to leave a woman, you know, whether beginning investor, or already in the trenches, or entrepreneurial woman with three pieces of advice, what would those be?

Wendy: Keep your faith. So, sometimes people try to knock you down and you don’t know why. Just keep your faith. They’ve got their own issues. Just ignore them. Build around you the best team that you possibly can. Never say that you can’t afford it. Just build around you the best team that you possibly can. And don’t be afraid of expanding yourself, we may get into our comfort zones. And when that intuition, that little niggling that you have inside you… Women are very good at this. Right? So, you get that little niggling inside you that says, “Gee, I really should do this, but then, you know, it’s kind of outside my comfort zone and I can’t do this.” Listen to your intuition. Do your research. Don’t do things stupidly. Do your research, but follow that intuition because your energy knows things far better than your brain does. Right? So, listen to that energy and then follow it. See where it leads because life is an adventure.

Michelle: Yeah. So, it’s about staying curious. I had a guest speaker the other day talk about, you know, curiosity can feel a lot like anxiety. In the body, it could feel the same way, but if you reframe it, you know, to look at it as an adventure, it’s actually exciting. Curiosity is the same as excitement as an adventure. It’s just that it feels the same way as anxiety sometimes, but, you know, we wanna reframe it.

Wendy: Absolutely. Many, many years ago, Bob Proctor used to teach something called the terror barrier that people would get really, really, really, really close to success, and they would stop. And he said, research showed that they weren’t stopping because they were afraid of being unsuccessful or not doing it or not making it or whatever. They stopped because they were terrified that if they went through that barrier, everything would change.

Michelle: Oh, my goodness.

Wendy: And so literally inches from success they would stop so that everything would stay the same.

Michelle: Don’t give up 3 feet from gold. Absolutely. That’s beautiful. Thank you so much, Wendy. It’s been such a pleasure, you know, talking about faith, God, LLCs, taxes, legal structures. That’s what it’s all about. Life is one big full life. It’s not just this or that. We bring our entire selves, you know, to whatever it is that we’re embarking on. So, thank you so much. I am super excited. Please make sure that you guys go to the show notes and, you know, click on that link, register for the summit. You guys are gonna be in such good hands with Wendy and Gary and all the speakers during the summit. Yeah. She’s one that I can 100% say I endorse and that she’s gonna, you know, take care of you like this on a silver platter and really make sure that whatever you decide to go with in terms of entity structure and setup that it really applies to you and you alone, that it’s not just some, like you said, package that is being sold, you know, to someone, but it actually serves a purpose for where you’re at today. And that’s most important. And then she can continue to see you grow, you know, and help you as you grow, for sure. So, thank you so much, Wendy. It has been a pleasure. Thank you for you for letting us in, you know, into your space and spending the last hour with us. I just realized we almost spend an hour talking. I can continue talking to you forever. Thank you so much, Wendy. Take care.

Wendy: Thank you. Bye-bye.

Michelle: I hope this episode left you feeling inspired and ready to get inflows of cash, inflows of light, and inflows of faith in your life. I welcome your reviews on iTunes. Please leave me a review and help me create an amazing community of women inflow. Thank you, as always, for sharing your voice by going to michellebosch.com and joining the conversation about this show. And while you’re there, grab a copy of my “Ten Commandments to Living a Life Inflow.” You can also follow me on Facebook at Michelle Bosch and on Instagram @michelleboschofficial. Thank you very much, and until the next one.