Ep#139: How entrepreneurship is extremely rewarding...but challenging with Brain Basinger

 For the last 12 years, Brian has been helping entrepreneur clients lower their taxes and achieve financial freedom and security, without pinching pennies. After a seven-figure exit from my firm in 2021, he founded Contigo Advisors with the goal of sharing his financial and tax framework with all business owners-not just those with deep pockets.

In today's episode, we talked all about some of the key strategies you could use to create proactive financial plans, lower taxes, and increase your financial security.

Where to find Brian:
Website: www.contigoadvisors.com
Facebook: https://www.facebook.com/brianbasingercpa
Instagram:https://www.instagram.com/brianbasinger_cpa/

Transcript

0:02

Welcome back to another episode of the Hello CS Dorsey podcast. I have Brian here today on the podcast. How are you doing today? I'm doing great, Candace. How are you? I'm doing well. So tell everyone who you are and what you do. My name is Brian Inger. I am a C P a. I have owned my own accounting firm now. Part-time all the way back since 2011, but went full-time in 2015. And then I ended up building and selling that firm about a year and a half ago. And now I've started a new project trying to educate and help newer entrepreneurs get the basics down on their finances and taxes so that they don't hit some of those road bumps that so many of us hit early on in our journeys. So let's talk about the inspiration behind you starting your business. What was that like for you? Yeah, so originally I probably, like a lot of people just started doing stuff on the side. So I had a friend and then a brother-in-law and people who were starting businesses, and I did accounting and kind of started helping them. Little by little I went through my own journey in the corporate world and. More and more realized that that wasn't really what I was passionate about, that I really enjoyed helping individuals and real people with real businesses. And in 2015, I was part of a company that got acquired by another company and the finance department ended up getting bid farewell in that process and found myself in that spot where I, it was. I didn't have a job. I had a little bit of severance. I knew that I wanted to be out on my own anyway, and it was one of those things where it's like, if I don't, if I don't do it now, I'm never gonna, I'm never actually gonna do it. So I took the leap in 2015, started my firm, and just kind of grew it painfully, gradually and then, and then eventually successfully from there. That's just definitely been a a consistent topic here lately on my podcast. Yeah, I think once you get down the road a little bit and have the benefit of hindsight, probably for a lot of us, it, it doesn't mean that it has been easy. In fact it's the opposite. It's probably one of the more difficult things that we do. But then as you get down the road a little bit, it's those really, really difficult, challenging things that end us end up bringing us the most satisfaction and feeling of, reward and benefit. Can you remember a time in your business when you started out or right in your business where you had a hello moment? The one that comes to mind was actually a time when I was feeling pretty low. I had been really, really struggling. To try and grow the business and achieve the goals, and I kind of perpetually felt like I was failing to hit the marks that I wanted to hit and just beating up on myself a lot and having kind of a tough, you know, a tough go of it. And I was driving home. I remember, remember the route I was on and you know, I was driving home and kind of had this moment of clarity where I was just sitting in the car by myself and, and going through it and realized that it, once I zoomed out and stopped focusing on what was right in front of me and the goals that I didn't feel like I was hitting there in that moment, but when I zoomed out, I was doing it. I, I, I had a business. It was stable. I was supporting my family. I was able to pay the mortgage and put food on the table, and things were okay, and, and it was growing and it was getting better little by little. And it just reframed the whole situation for me, from one of feeling like I was falling short to looking at it just from a different angle and realizing that no, this is a process and it. It can be difficult and challenging at times, but, but it's something that as we do for ourselves, we own it. And so, however, whatever progress we make, then we can build on that progress and build a little bit more the next day and build a little bit more the next day. And it's this constant thing where we're building a life and a lifestyle and it. Isn't about getting there in a year, and it isn't about getting there in two years. It's about pushing ourselves and growing. And at the end of the day, that's, I, I think that's what life is about. And, and that was probably my hello moment is just that, I guess that process of realizing that even falling short of goals, because this is something that I. That I own and that is part of my life that like the journey is the destination in a, I guess kind of a metaphorical way. No, that's actually really good. I'm happy that you pointed that out because sometimes we set these goals for ourselves that we think this is supposed to be the goals, or we see other peers or people online have. These big numbers and we are like, yeah, we're gonna set those high goals. And then we put a lot of pressure on ourselves to actually reach those goals when we don't know or realize that we are actually being successful in the moment in the process. Like you stated, and it's like, I think we put too much pressure on ourself because of what we see, especially online. Absolutely. What's that quote? Comparison is the thief of joy. Oh, yes, it is. It is like, you know, as long as I'm making enough money to put food on the table and like you say, pay the mortgage, hey, we're good. You know, we could just climb from there. Yeah. And it doesn't mean we have to be satisfied with that, but just, just remembering that this is something where you've gotta, you've gotta build it up mm-hmm. Layer by layer and I think when we see, when we see other people that, from our outside perspective, it looks like they are on top of the world or, or that their businesses maybe just took off in a flash, generally speaking. And now I have the, also the advantage of being able to watch. You know, dozens and hundreds of, of other entrepreneurs through their journeys, like that's not normal. What's normal is that there are several years of going through this developmental process and laying that foundation, and then all of a sudden, a couple years down the road, then things really start to happen and maybe happen quickly. But not many people are there to see those first. Those first couple of years where you're, you're building that foundation and it doesn't look like much from the outside and it can be, can feel pretty frustrating and like things are going slowly. But that is the process and that is what allows you then later to start, you know, reaching up to the, reaching up to the sky because of that foundation that you laid early on. Yes. Yes. And it's a lot of things that, you know, they don't talk about either. So I'm really happy that we're discussing it today because we always see the success, but we don't see the foundation and how they got there. So really happy that we're talking about it on today. So let's talk about entrepreneurship is extremely rewarding, but challenging. Yeah. One of the things that I think that a lot of entrepreneurs don't realize is that we have the unique ability to create a lifestyle for ourselves in a much shorter period of time. Than what we've been taught to traditionally think about. And it's funny that this comes right on the heels of us just saying it goes a little bit slower than you think. But it actually, it reminds me of another quote, I think it's the, the Bill Gates quote. We tend to overestimate what we can do in a year and underestimate what we can do in 10 years. And that really is the, that's really the heart of, of this whole message. I, I went and looked at, For our average client, which is I don't mean this in like a self-promotional way. I mean it more of like a sampling of entrepreneurs. The average entrepreneur that we looked at the numbers for was able to go from just starting out to seven figure net worth in 7.91 years, so less than eight years going on that whole journey. But for most of them, the vast majority of that happened in years four or five, six and seven. And so it's that, that can be really, really difficult in those first couple of years. But the rewards are absolutely there. And this idea of financial freedom and of financial independence and of breaking outta that cycle of working every single day. To make a living, to pay for our expenses for the next couple of decades while we try and, and put some money into retirement so that in 30 or 40 years we can, we can then be financially free. That just isn't the math for entrepreneurs, and we should be thinking about that timeline in the much more near term and using the tools available to us both. Some tax advantages and things like that, but also just the value of the businesses that we're building to set our sights on that, on that more near term goal. Instead of settling for kind of what we've been taught is the traditional path of just stick some money away little by little. Let it season a couple of decades, and then by the time you're 60, maybe you can have enough money to retire. So what would you, what advice would you give an entrepreneur starting out freelancing everything? Notice I'm kinda like pinpointing myself, but I'm just slipping myself on in there. But what would you what advice would you give someone to starting out on like what to focus on as far as, you know? I wouldn't say necessarily investment, but as far as like. Putting the important things away. You get what I'm saying? I, I think so. The most basic advice that I would give to a new entrepreneur who's just really getting started in this is understand that your business that you're building is an asset. So if you need to not put money into a 4 0 1 K or you know, retirement account for a little bit while you build this asset, that's okay. And give yourself permission to do that and to focus your investment into that business so that you can give it everything you have, because that is going to give you returns that are. So much higher than anything you would get by throwing something into a mutual fund that you have no control over, you have no expertise in, and no ability to to, you know, manage it and, and, and make it grow. But your business, you have all those things. And when we talk about going from just getting started to having seven figure wealth inside of 10 years, that hinges a lot on. Having an actual business that has its own value, and that doesn't even mean selling the business in 10 years, but just understanding that this is an asset that you're growing. So that's one thing. The other thing would be to almost anyone, don't wait to get some basic tax. Education or financial education. There are some really good resources out there that are, I mean, we have some, but I don't, again, I'm not really here to try and promote that. There are so many good resources. There's a really good book called Profit First, and there are like even just as simple as forming an L L C so that you can use an SS Corp to help lower your taxes. That's something that it's one of the most common. Mistakes that we see is entrepreneurs are just going over these first few years and then they have that year where they actually start to put things together and then they'll just get slammed with a tax bill that's like$10,000 or$15,000 and it just takes all the air out of the sales for the entrepreneur. You're not expecting it and it's pretty preventable if you. Just try and understand some of the basic financial knowledge and tools. And if you do that, what you'll do is put in a little bit of effort so you can take some ownership over those things, and you'll be able to see obstacles coming that might otherwise blindside you. And if you can do that just to get those obstacles outta the way, then you can really put your time and attention and focus on what your passion is and build your business without worrying about accidentally stepping in some trap that you didn't. That you didn't know about. Just remember S-corp, if you have an L L C. So an L L C is A is the legal entity, right? And then when you start to make even just a little bit of money, so if you're gonna make even. You know, even 20 to$30,000 in like taxable income, you don't want to have that taxed as a sole proprietor'cause you're gonna end up paying self-employment tax, which is 15% right off the top before you even get to income tax. And again, just on$30,000, that's, that's$4,500 in self-employment tax. And we haven't even talked about income tax yet. So that, Is this penalty that sneaks up on entrepreneurs when you're, when you're thinking about tax, you're thinking, oh, I'll set aside 20% or 25%. Well, that covers income tax, but not this self-employment tax. So I, I want to go all the way down this rabbit hole that's probably hard to follow for, for listeners, but, but that tax. Really, like, I can't overemphasize this enough, that self-employment tax is like this shark swimming under the water that's just waiting to get new entrepreneurs who don't know about it. And most entrepreneurs wait until the year after they get really nailed with it. So they make$50,000 or something. And now we've got a, this$7,500 tax, extra tax on top, which is a lot of money, especially for, for newer entrepreneurs. And they'll wait until the year after they get nailed with that tax to say, oh, I've gotta figure something out. So you can save yourself a lot of heartache by just opening the L L C because that gives you the option. I, I always like think about the L L C as like a bucket. It's just a legal entity. It's just a bucket. And it's like you put your money in that bucket and that's your business. Now you have like a physical thing. Your, that represents your business and you can always go back and just slap that. S corp. It's like a, think of it like a sticker that you slap on the front of the bucket. You don't have to do that from day one. Just having the bucket gives you the, gives you the opportunity to later go back and say, oh yeah, hey, this bucket that I had that should have been taxed as an S-corp. So any last minute advice you have for our listeners out there? I don't think so, really. That's, I, I, I always recommend for entrepreneurs. Open an L L C. Open a separate bank account so that you can keep all your finances separate for the business. If you have a separate bank account, separate credit card, and an L L C, you've got the basics covered and you, what you do there is again, just give yourself all the tools and kind of the structure that you need so that down the road as you start to make. As you start to really get traction and, and get the business going, you have the basics covered. You're not going back and trying to sort through your personal finances and split out which expense was for the business and which one was for groceries. It's all separated and it's all clean. And again, having that l l C in place gives you options to help avoid some of those tax traps. So where can everyone find you? So I am on Instagram at Brian Bessinger cpa. That's where I am the most active. But also we have a weekly live training that we do. We teach on different topics, or I should say I teach on different topics every single week and just sometimes financial, sometimes organizational, sometimes tax related. And if you. Go to our website or you know, we always post it on Instagram as well. But you can join that and if, even if you can't attend live, you can get copies of those recordings. It's completely free. Just trying to get financial information out there for newer entrepreneurs. Awesome. And we'll definitely link that up into the show notes. So Brian, thank you so much for coming on the show. It's been really informative and really enjoy having you on. Yeah, thanks for having me. Had fun.