Build Wealth Before You Step Away with John Steiger

Reece sits down with John Steiger of Wealth Planning Resources to talk about a problem a lot of builders avoid until it gets urgent: how to build real wealth outside the business before it is time to step away. For owners thinking about succession, retirement, or simply getting their financial house in order, this conversation is a practical look at what needs to happen long before an exit is on the table.

They cover grooming the next generation, why business development matters more than most owners realize, how phantom ownership can prepare future leaders, and why buying trucks just to save on taxes is not the same as building wealth. This episode will help builders think more clearly about profit, assets, succession, and what it takes to create options later. Check the links to connect with John and follow more Builders, Budgets, & Beers conversations.

https://www.wprplanning.com
email: john@wprplanning.com

Show Notes:
00:42 Show Intro
01:45 Meet John Steiger
05:35 Why Exit Planning Matters
07:32 Financial House First
16:44 Build Assets Outside
20:03 Start Planning Early
22:14 Phantom Ownership Explained
25:34 Teach Business Development
29:36 Retirement Plans That Work
37:24 Stop Buying Deductions
41:15 Make Planning Simple

Find Our Hosts:
Reece Barnes
Matt Calvano

Podcast  Produced By:
Motif Media

Transcript

0:00

Be good business owners and do the right thing and build assets and reward your people and have plants and have your advisors in place like you do that early on, and it's going to pay off. Welcome to builders budgets and beers. I'm Reece Barnes and I started this podcast to have real conversations about money in the building industry, the wins, the mistakes and everything in between, I believe builders deserve to feel confident about their finances, and that starts by hearing from others who've been through it too. This industry can be slow to change, but the right stories and the right tools can make profitability feel possible. Let's get into it. Do all right, Johnny, mics are hot. We're rolling. All right, here. How are we doing? Hey, I got one question before we start. What are the beers coming, dude? I you we talk about beers at all. Okay, I love beer. I love beer. And it's actually, honestly, I just need to get, I just need to get, like a, like a, like a case, and stick it in the fridge here at the office. But it's, it's honestly just logistics. I just never think to have them. And, like, you started this whole thing out with builders budgets and beers, and we did, like the first three episodes, and like the first three guests we have didn't drink. So then it was like shit, like, what do we do? And now here we are, and it's just kind of falling off. But, well, do beers later. I appreciate you coming on. Yeah, okay, beautiful. Well, let's, let's kick this thing off as we do, and give the audience who you are, where you're located, what you do, just some of the basics, sure, sure. So John Steiger, my firm's wealth planning resources, we're located in Waltham, Massachusetts, just outside of Boston. I work with clients locally, but we do have clients kind of around the country. So my firm. I started back in 1993 so I've been at this thing 33 years as of this month, awesome. And the basis of the of the practice were financial planners, advisors. But pretty early on in my career, I honed in on working with business owners, helping them finding solutions to save on taxes, build up retirement outside or assets outside their companies have them think about their key employees, get their house in order. And so there was a lot of opportunity. There it came. We grew up in a family business out in Western Mass that lasted for over 100 years. And my father was a CFO. They sold it in 1994 to their big department stores, and they sold it to a big conglomerate, awesome department store. And he said to me pretty early on, he said, Go talk to business. Make sure they're saving their money, protecting their business. Think about rainy days and how they're eventually going to get out of it, because it's what you think is going to happen. Doesn't always happen. Muro is kind of the classic case that came out fine, but they could have done a lot more planning early on. And he said that totally so anyway, so that's what we do. We're finding we work and we work with companies on their foreign K plans, and then all this kind of personal planning and business owner, totally so. And I have a team of five or six people that have been with me for that's awesome. That's beautiful. But So you found quite a little, little niche. You found some success working with contractors. Is that right? Yes, yeah. So, gosh, it's got to be 20 years ago. I just was kind of out there, doing your thing and doing my thing, meeting business owners, getting connected and met, you know, a really influential landscape architect who introduced me to landscape construction companies, and then that morphed into working with builders. We had so really nice kind of seminar to help people figure out how to exit and protect their business. And I approach Builders Association that's local here, that's part of the National Association of builders, and they, you know, welcome me to do an education. I got really involved with them, and it was just kind of a little bit, you know, was a sort of a niche that I fell into, but really enjoyed the people I was working with, kind of spoke the same language, and, you know, artwork and people and it just yeah, just blossomed into kind of a totally continue to work 100% so you and when did this start? Did you say it was about 20 years ago when you were like, yeah, it's probably 20 years ago. Maybe more where I kind of made that. Made. Mind that my home is my kind of, yeah, okay, great. So, yeah, like, in a lot so before, oh, wait, yeah, dude, okay, so what was that like? Oh, it was, it was, it was insane. I mean, it was just sort of, I mean, not only the markets were going crazy, but you know that whole kind of discretionary income to build homes, you know, remodeling just kind of went away, and it was really, really hard time. And, you know, a lot of companies didn't make through it, and those that did blossomed. But it was, yeah, it was wild. It was a scary time, and it took years to kind of for everything totally, totally, and it's always, it's always a yeah, hopefully we never go through one again. Yeah, God, God willing. But no, I think that's great. And the reason I asked because, like, I the reason I wanted to have you on the podcast was, I mean, that the conversation of transitioning business owners, right, is very much at the forefront of contractors today, right? Yeah, I should have the stop pulled up. I could probably pull it, but it's, there's, like, some insane percentage of of business owners in construction are over the age of 55 and they're gonna be retiring in like, the next 10 years. Yeah, right. So yeah. And I would tell you, in the design, architect design, it's probably more, you know, it's, that's a that's part of that kind of industry that is has a huge totally so like, when you think about that, it's like, okay, we've got all of these business owners that have made incredible livings doing what they love, which is building, being contractors, right? Helping their communities, growing their businesses. Right? Now, they're looking at this, and they're looking at business a little bit differently, right? Differently, right? It's like, usually it's like, the first, you know, 1020, 30 years of their career, they're like, grow, grow, grow. They go through all of these different economic climates with like, recessions and make these huge booms after covid and all these scale things and but now they're starting to look at it like, I'm not going to be able to do this forever. Like, I'm looking at a labor shortage, right? People aren't flooding right of this industry. Like, no, yeah. What do I do to flip my business right? So I think, like, yeah, we can talk about that a little bit. But generally, like, I want to hear what your take is, just with nearly 20 years of working with contractors. Like, what are some of the biggest red flags that you see contractors doing that they could, like, easily circumnavigate with just some healthy wealth management and planning in their businesses? Yeah, yeah. I think the there's lots of reasons why I think owner of a contractor business spend. And we're talking about businesses that are kind of like that, two to 25 right? They have a good, solid business. They got a good bunch of employees, but they're not these massive, big builders that could get bought by another, right builder, right? That's not what we're talking about, because that, by the way, that's a there's lots of decisions to made around that type of business, but we're talking about these kind of profitable remodel or builder types, and the starting is they just kind of don't, don't know kind of their financial House, to be honest. They don't have that income plan. How am I going to get out? Have I saved enough? And maybe it's not on their forefront, but it's back of their mind that they're sitting there going, well, where my where's my income going to come from? Can I just shut the doors? I love what I do? What else am I going to do? And I think that's part of it too. It's like they just don't have that next stage of life. Maybe they'll have a lot of hobbies, and they're just kind of like, well, what am I going to do if I'm doing this? But I think it's understand their personal financial situation. The other thing too, I think it's who's going to take over. So let's assume a majority of these are going to be transition internally. Maybe there's a strategic merger with another local firm or but I would say a majority of our it's internal, or it's a family member or key employee or group employees, and it's identifying it. And I think when, when bringing in kind of key people, are they grooming them to be owners. And think like owners, are they trained to do business development, trained to manage, trained to be a future owner? And I, in this, not me, kind of making a blanket statement. A lot of them have have thought about that, and are thinking about that. But I think, like those two major things, like, certainly, if you got to try to get out in two years, that's harder thing to do. But if you're kind of like, at a 10 year run, or, you know, maybe seven years is to really think about, like, all right, how am I grooming the next generation of owners and finding the next generation of owners, teaching them? Everything that I need to do, right? And you've had other podcasts I've listened to that talk about that, like, they talk about, like, kind of those key people that you have to keep in the business and teach them the business, and then getting their own personal house in order. And I do meet a lot of builders, I've done some planning, but not in the relation of their adventure, right? And how to kind of set yourself up so that you can easily exit. And there are lots of stories of contracts to make that transition to key employees and rely 100% on the future cash flows of that business to buy them out. That's kind of like, I say, a recipe for disaster, but can do a struggle, you know? And if the next generation isn't bringing enough business, and they're paying the old owner off, and it's too high of a valuation, it just doesn't set that future generation up to be successful. So it's, you know, that's where that kind of building assets outside, I know a lot of them have real estate holdings and other sources of income, and you just have to kind of get your get that stuff in order so you can easily exit without putting huge strain on that's beautiful. And there's so there's a lot to unpack there. So like, the first, like, the two primary things are, is, like, from a business owner standpoint, that owns a construction company doing two to 25 million call, it is like, first, like, have your financial house in order, right? And then that breaks down into the other buckets of, like, have assets outside of the business, right? A part of that is like, actually knowing what the business is generating, know what that's going to be valued at, right? But then also that's where it kind of splits into the second is like, like, start grooming the next generation of people that you're going to want to exit this thing to, and then that comes into like skill development, right? Like you've identified them as individuals, I think, why is that important? Why did you identify them? What skills do they have? What do they need developed? But then I think another one that I'm interested in, and frankly, I want kind of like tacticalness on all those threads. Yeah, but the third piece is, like you hear it time and time again is, let's say you stand up $10 million for simple math construction company, right? Do you actually, do you know the valuation on like, What a $10 million construction company should be like? What the multiple? So a lot of yeah, a lot of them comes down to EBA, right? Which are EBA and a recurring revenue business that we see landscape companies that landscape with service contracts have done quite well. It's a lot of roll ups, and there's continued been roll ups with that. There's one roll up in private equity, right? Private equity, yeah, it's, it's there because it's service contracts, right? Those are, typically, you're seeing four times EBITDA, maybe more, depending on profitable is if you, if you don't have that recurring revenue, you may only be one time to two exactly, maybe, right? So it's not like, it just depends on your pipeline. It depends on, like, what a lot of these more high end builders doing, the building maintenance companies along with them that we have maintenance contracts. I think that's for the high end luxury home builder. That is the future, totally agree, for future buyout, right? That is the key, key thing is just recurring revenue. Know, it's there. Well, yeah, so, I so, yeah. I mean, I think it's, it's a, it's a lower number than, well, and I would, I would agree with, like, the service, like, obviously, like the service side, the service, and just for the listeners not to like, be like, dumb this down too much, but the service is, like, the recurring side, like, quite literally, think about, like, when you say landscapers, right? Like, this is, like, there's obviously other applications of this. But think of like, someone who mows yards, right? You get a client, you get them on a recurring schedule to mow the yard once every week, every two weeks, whatever it is, right? And then you build that client base, and then that's recurring revenue every two weeks. You know what's going to be coming in. It's repeatable. It's forecastable. That's where you get that bigger valuation, right, right? But then when we're starting to talk about like, even in, like the home building side, or the high end luxury, like the remodeling and the home building side, like these people that are building 345, $10 million homes, they don't want to stay on top of keeping, like air filters changed and soft or water softeners. If that's even a thing in the East Coast, I know it is in the Midwest, right? But the point is is, like maintaining the home, right? It's like, that's reputable. I know every month I'm gonna go out and do something, or every quarter I'm gonna go out and do something. You get them on that contract, yep, cues, and make them profitable Exactly. So, like, I think it's more so, like, for the listeners, standpoint, is think about your business and the recurring revenue potential that you have in what you're providing, because, to your point, John is like, it's extremely popular right now for this home services side, but there are so many other ways to do this and ways to think about revenue and service that you provide, and how do you bill for it? How can you add that as value to your customer base? Yeah, yeah. To bring. This all back full circle. The reason I was asking is because the the nightmare story is when I've spent 3040, years building a construction company, and I've identified the people that I want to pass it over to, and now we get to the ledge, and we start pushing people over it to that, that or that acquisition right, they don't have the capital to do it right. Or we're talking about terms a lot of, yeah, a lot of, a lot of them don't right and right, and you're relying on cash flow of business, right? And maybe, maybe they thought way ahead and they created a sinking fund. Or that individual has been groomed over the years, and, you know, they've paid them bonus to say, save this for future buy but a lot of times it is just pure cash flow. I mean, you can use, we didn't go down this rabbit hole, but people go ESOP and some of these other tools that you can use, but that doesn't solve the problem of that's still a cash flow solution, right? You have to have the business growing, producing income to buy you out. And, yeah, that's, that's typically how with that point is like, and that's what I want to touch on with, like, the grooming concept, because I think it's like you can set anyone up with the skill, right? Maybe not anybody, but you get what I'm saying, right? It's like you've got the skill. They like, you're comfortable that they would be able to take the business over, be able to run it and grow it and do like, well, by the business and the community, yeah. But what are some of the pieces that you you mentioned, like a sync fund, and you mentioned, like, paying them bonuses to say, like, hey, like, hold on to this, because this is the, this is the strategic plan. What do you see tactically, or that you would just, like, generally advise people to consider as they're on this path to acquisition, like, what is well, I yeah, I mean, it starts with the owner, right? The owner has control that revenue, how they pay their people, how they bonus their people, how they retain their people, right? And I, I say the owner. It's up to the owner first to get again, what we talked about in the beginning, get your house in order. So would you earn profits in the business? Are you just rolling it back in or are you doing something else with it? Make your business secure, but are you doing something else with it, buying the building you're in, or buying another piece of real estate that's going to generate rate income, maximizing all the retirement plans available that the IRS gives us. It's a gift to put money into these plans and a lot of money, so do that over long enough that can add up to heavy seven digits if you put the time in, that's your asset as well. Would you what you don't want to do is say, Oh, I'm going to go buy a piece of another I need to take a tax need to take a tax deduction. I buy another piece of equipment just to get that tax deduction like that doesn't that doesn't build wealth, right, right? So it's, it's thinking about, okay, I need to, I need to protect myself, my family and my business by doing these things on the outside while keeping my business healthy. So then I get to the point where it's like, okay, now I want to exit. I got these great people I'd groomed. They got the management skills and the business development skills, hopefully, because right is key. We could touch more on that, but so I see that as a big hole. But anyway, now, okay, guys or ladies, let's figure out, you know, what this thing is worth, what this thing generates? We'll start you with a certain amount of shares, right, or certain amount of ownership, and maybe they form another corporation. We say that often, but you're starting with this kind of engine that's going to produce, and then you're going to pay me over a number of years. And, you know, there's a lot of discussion about how long that should last and whatever. But if you're rely again, if you're relying 100% on that, that's a lot of pressure. You have these other totally outs. What are you saying about sinking funds and other things? Yeah, you can, you can help those key employees with bonuses, bonus structure, and help them build their wealth outside to say, Hey, you're going to turn around and buy me out. That takes a lot of planning and a lot of foresight to do that. It takes a lot of discipline of that one person. So that conversation, I was what I was just saying about how to kind of make this whole thing happen. I kind of see that build out wealth outside. Don't rely 100% on your company. Make sure you have the key people inside that can do business development and can manage this thing so it can can pay you out over time. But for a big windfall, you know, that's, that's a hard, I think, a harder thing to kind of put together for a, you know,$15 million dollar a year, $20 million contractor. I think that's a harder thing to do for a big windfall. You know, does somebody take on a lot of debt, and where are they willing to do that, or have their own totally, totally well. And I think, like, what is so two questions is, first, like, timeline, okay, like, how long should contract? Builders be thinking like, how much runway should they give themselves? Should it be? I think any 10 years, it's like 10 years is kind of like ideal when you know if you read that email book, right, right? If you read that book, it tells you, from day one you should be thinking, right, right? Any venture capital PE firms always like, buy a business. How are we going to get out right so? But you know, that doesn't always happen. It's harder to do because you're just building this thing, hopefully from ground up, but 10 years is kind of key. Now. Can it be done sooner? Sure, especially if you have the assets outside. But that aside, you it takes, takes a while to grow people right and find the right person. And so 10 years ideal, but certainly can be done at five. Just seen a shorter time frame, different circumstances, but buy the book. Best practice. Give it a decade, yeah, give it a decade. Then you then you got time to accumulate if you need to catch up on that. You know, build assets outside, groom your people, make sure the right get the right coaching in place for sales, development, management, communication issues that may come up. All of it totally, so that's that's kind of totally, totally well. And so even, like, on the second side is, like, I'm thinking, even from like, the people that are getting groomed for this conversation, right? Because, like, they're like, even, it's kind of even like the inverse. Now I feel like, like the younger generation, like, they understand the like, really get to true wealth is to own the business, or a part of the business. So it's like, now you start to get people coming into the business, wanting that as a part of offers, right? And I had, as a buddy of mine, runs a contracting company, a roofing contracting company, down in Arizona, and he had a situation like this to where he was, like, he had a guy comes in barking for, like, equity in the business, and he, like, rolled out a zebadon. He was like, All right, like, where's my check? Like, if you want to, like, you want to come to this party and you want to bark for equity in the company, like, pay me, right? Like, but then the guy didn't have any of the capital, so it's like, how do you get it? Like, let's say again, just for simple math, like, a $10 million company, how much would someone need to come to the table with to successfully run that play, to buy out the company? Yeah, I don't know. I mean, I think, like, I think it'd be hard. I'm just thinking about the contract side worth, right? That, that if someone came in said, I want to be an owner from day one, buy into this thing. They're not really built that way, right? Because it's, it's such a hands on business. Yeah, I do think, though, to your point, I'm working with this, this architecture design firm who straight out was like, Okay, we want to bring people in. We want to have them under ownership, yep. And so they created a phantom plan, right, okay, and so you can create these kind of phantom ownerships. And again, when I was getting weeds of it being great, these phantom ownership plans so they participate on the upside, and they know what it feels like to be an owner, and you get them involved so that over time that owners exit, new owners come in, they've already had a taste of it. How it all works. So yeah, to your point, I think younger people get that. They want to be a part of it. I think it's, I certainly wouldn't advise one of my clients to take someone new and give them actual ownership it's, if you want to build an ownership plan through a phantom plan, it's so much better. So, yeah, can you not, can you dig in on the Phantom plan a little bit? Yeah? So, like, go, like, just generally, like Phantom, I imagine this is just like, like you're emulating the experience, like you cut them in at a degree, but they don't get the full, yeah. So you just basically create a plan that is, we would call synthetic stock, right? And looks and smells like stock, in the sense that I'll make more if a company does well and I get a certain part of the profit, but I don't have any voting rights. Makes sense. You can make it up wherever you want, like if it's sold, and maybe I get a piece of it. I forfeit if I leave, I can't vote. I don't have liabilities. It's just a pretty slick way to give that ownership without actually giving ownership. I mean, that's like, directly in line with, like the second arm, or rather the first arm of this, right, which is like, grooming your employees like, I think that's just like, that should just be like the default, right? Yeah, I think so. I think so. I mean, certainly they have to show ownership on entrepreneurial qualities, right? Of course, yeah. Think like that, yeah, but yeah, I think it's a really kind of progressive way to run your business with future in mind, future ownership in mind, as opposed to just like I'm gonna start with the saying hire a bunch of employees. And you know, maybe it'll be an owner or not? Well, if you can get them involved in it pretty early on, and talking like and thinking like an owner, yeah. And I think your future as far as exit goes, is going to be a lot easier, totally, totally Yeah. And this isn't just to say that, like you run these like concepts or plans just totally willy nilly, like it all needs to be like, well thought out. And we can touch into this. You mentioned that you mentioned that you want to talk about business development, but it's like, like, where do you see, like, the biggest opportunity for business owners to start grooming their employees? Let's talk about business development. Like, why do you say that that's an area that's like, Well, yeah. I mean, I think it's where does the business come from? Yeah, right. And I may be a great worker, great project manager, and know the business, I'm a craftsman. I can manage people, but if I'm not willing to go have coffee with an art local architect or developer, or, you know, a bunch of Country Club people that have the discretionary, I'm sorry to pick on Country Club people. I belong to Country Club, but, you know, like, hang out with people that have means, right? Yeah, people have means. I have this one builder. He tries to meet as many private equity people as possible. Yeah, he does. He goes beautiful. He's getting tons of business from wealthy people because he's built relationship with private equity. And he's out shaking hands. So, like you, some people are totally uncomfortable with that, and I get that, and it doesn't mean you have to have that skill to be an owner, right? You may have someone that's really good at managing that's a big part, but someone's got it. Someone's got to be a rainmaker at some level, right? Yeah, the reason why a lot of business owners, and we just call them builders, build these great businesses, because they can do everything. They can do business. They know how to build, they know how to manage, they know how to get business. They just kind of know how to do everything right. So totally, and you can't always replace yourself with one person, yeah, so you have to find a group of people, but understand business development's got to be a huge, huge piece of it, totally. And I think that's even the part that, like having your financial house in order is like so many, I'm not even gonna say contractors, just people that want to be in the business world or want to be entrepreneurial, fail to forgive us, like it doesn't matter if you're building a house or if you're building a piece of software, yeah, right? Like you're building a product that you're selling to the market, and if you don't know how to generate interest and revenue, yeah, to that product, then it's not really a business, right? Right, yeah. And maybe you have this amazing marketing machine and all, I don't know, the end of the day, I think specifically in the high end remodel and luxury home building, yeah, they're as much as they're buying the craftsman, they're out hiring the people, right? You have an intimate relationship with them over a period of time. And you got to want trust them, have them hear you. So you have to have those, you got to have those skills, you know. And if you do that really well, they're going to refer you to other people. So don't think you can't, can't discount that training in that you know that skill development among the next generation. Think it's huge. So, totally, totally, okay, so that's, I think, like, yes, like the business development side, and that kind of, like, even goes into, like, the EBITDA, right? And the valuations of these things. But I think even more so, like talking about the asset building outside of the business? Yeah, I really want to hear some like, just like the tactical things that you would want to share with this audience, sure, right? Of like, where they should be looking and what they should be considering, because it is so common. I literally just did a podcast a few weeks ago with a young couple. They're down in Louisiana, awesome people, and they're in the mode right now to where everything goes back into the business, yeah, right? And like, that's just like, that's a part of their journey. And they're in that path the early days. Like, it makes a ton of sense, but then I think people can kind of fall into that trap, right? And it's just the classic, you nailed it on the head of, like, oh, like, we got to get rid of some profits, and we don't have a bunch of taxes, like, go buy a truck, right? Yeah. And it's like, I'm gonna go buy this equipment, because if I buy this equipment that I don't have to rent it, or I can rent it back for myself, right? All this stuff, where are some, like, maybe not, as direct contractor buckets, as I'll call them, like, buying the truck or buying the machinery I'm buying. I'm a wealth management 401, K person, right, yeah, but, but if you if I had a CPA next to me that really understood, yeah, they would say the same thing is that the IRS gives us these qualified retirement plans that we can use in our business. The maximum amounts are huge, yeah, the taxes. Incentives are huge. And in fact, I'm always surprised when I meet builders that don't have a 401 k plan. Well, if you live, if you have a business, start a business in the State of California or state of Connecticut, you're required to have a qualified retirement plan in your business or some sort of payroll deduction savings plan that was part of the secure act 2.0 okay? And by the way, if you don't have a retirement plan and you want to start one, well, the government will basically give you tax credits to cover your entire cost for, like, three years. So it's pretty significant. Like, why wouldn't you do that? No, you got to have cash flow. But right? It's like, almost seems too simple, really simple. And there's lots of programs to use to help you do that. But like, I mean, I listen, I have direct examples. I work with companies for 20 years. They started these things. They funded. They funded it like crazy, paid their people well. They did everything they want to do to grow their business, and meanwhile, they're leaving their business with heavy seven digit accounts by just grinding away every single year. Make it a priority, make it a bill. Don't stop. Go back to Oh, eight contractors that were doing okay, and they funded it during the OA crisis, and that money triple, doubled, Trump quadrupled over and over and over again because they bought on the low part of the market, yeah? So that's a really, really simple way. I mean, you gotta, again, have cash flow to do it. But, like, Yeah, but like, what's the barrier to entry? Like, how much cash flow do you actually need? It's a, you know, it's not a lot, right? It's borrowing a, what, 24 grand a year, plus a catch you off a match. I mean, you can get in just pretty sophisticated plans putting a couple $100,000 but yeah, our contracts aren't doing that. They have basic for 1k plans with matches to reward their people, and they are committed to it and putting maybe a profit sharing plan on top of it. Yeah, that's just one piece of what you can do, right? And yeah, and a lot of our contracts are buying, you know, buying buildings along with it, right? They're doing a bunch of different things, but not all of them. I was just using the retirement plan as a way, a means, to just build it up, yeah, just, and just paying attention to it as part of it's a bill, and you make it a bill, yeah? No, I think that's like, I think that's like, I think that's the takeaway. Is like, I think like making it a bill, right? Is just essentially, like, making it a priority, right? Like, it's got to be important to you, yeah, yeah. And I would also Yeah. And I will say, from a compensation standpoint, again, this is, this is me talking, you know, obviously biased, because we do this type of work. But a CPA would say the same thing, I think, and that is, you can reward your employees through these plans, and nobody's paying taxes, and you're saving a workman comp premiums, and just it's all very and it builds longevity, right? Again, one builder has been so committed to it for, I don't know how many years now they're just like we take care of our people, and this is how we take care of them. Yeah, and if you don't know a lot about it's intimidating, but, you know, once you kind of figure it out it's it's a super easy way to build assets, take care of people, save on taxes. I don't know that seems like pretty basic, basic planning to me, you know, that's what I'm saying, and that's where I think, I just think that, like, this is, like, just generally good practice. Now, what would you say keeps people from doing this? I guess maybe, like, just take a step back. How many contractors, builders would you say do this? If you said, like, I mean, everybody, all in work, all I work with, have them. But like, of course, we're able to, kind of because it's public information, I'm able to kind of look at builders in my area that, you know that, that I can see if they have a plan or not, because it's public information, and when they don't, I'm like, Oh, I kind of scratched my head like, Okay, what's going on there, right? I don't know. I think it's kind of fear unknown for your expense. Don't want to be committed to it. And, you know, frankly, some people don't have a lot of faith in the public markets. So that's another side of it, you know. And that is what it is. I mean, I'm not, I'm not here to convince people otherwise. This is what it is. I mean, if you look at a short enough timeline, sure, right? Yeah, how do you look at like, how do you look at the s, p, over the last 20 years and say, I agree. I agree. I mean, listen, it seems simple math to me, but then again, okay, if you don't want to go down that road, you better find, to me, you have to find another way to build assets outside your company. Yeah, so that it's easier for you to exit and it's good for your future generation to buy. And also, you know, we can get into this, but if you're gonna sell it to a third party, right? Yeah, you have to show profits. You have to show good cash flow. You have to, we can't just be kind of reinvesting and showing nobody wants to pay taxes, right? So you. Yeah, in order to be profitable, you have to pay taxes. So you have to, that's where you got to be. If you want to sell it to a third party or third party to come in and buy, you have to have strong, even in numbers, good cash flow. So yeah, I heard this. I heard in regards to taxes, I heard this piece of advice when I was young, and it just stuck with me, right? I was like, when I say young, I was like, young, young, yeah, and someone was telling me it was like, it was like, they were sitting down with their CPA and they were going over, like, all their taxes, and it was like a year where they're like, holy shit, this is like, we're gonna pay a lot in taxes. And their and their tax advisor was like, You know what? Like, if you're worried about paying taxes, you're worried about the wrong thing. You should be worried about making more money, right, right? It's like, you shouldn't be worried about, how do I save more on taxes, as much as you should be like, how do I say, How do I make more money? What's your take on that? I mean, I agree. I think, like, you know, if you're paying more and more taxes every year, well, good for you. You're making more and more money, right? That's just kind of that's just part of the deal. But if we're not taking advantage of all the things you can do, and you don't have a good tax person that's proactive with you, like taking advantage of these plans or other sort of deductions as a contractor or as a real estate owner, you're kind of missing the boat too, right? So you can be profitable and do all these techniques. And, yeah, you're still gonna pay taxes, but maybe not as much, but yeah, I mean, I don't know. It's like, we all pay a lot of taxes, hopefully we're paying taxes, we're making money. That's the whole idea, totally well. And it's this, like, that comment isn't certainly to be, like, negligent and like, tax strategy, right? And like, how to like, how to like, do this tactically and strategically, right, to avoid paying taxes. But it's like, Dude, come on. Like, you can't, like, you can't roll everything back into the business to avoid showing profit, just to avoid taxes. Yeah, right. Yeah, exactly. Yeah. So it's about and some of the things you can do, like, qualified plans, yeah, it's a tax deduction, but it's still considered profit. So if you were to have a third party come in and say, Oh, they fund their retirement plan with$500,000 a year, wow, that's fantastic. They have cash flow to do it. You know, it's still me paying less taxes, but it's a that's a that makes the business very valuable when you do that. So, yeah, totally, totally one piece. And you might not have a lot on this, but I'm curious to know if you, if you do have insight on this, we know talking about, like, having the financial side of the house taken care of. Like, we can talk about cost and income, right? And like, making sure that you are showing profit. But where do you see builders like losing the most or, like, what like, like, if you're reviewing financial statements right, and you're going over this with builders like, what are just some of the nightmares that you open up when you look at these businesses and you're just like, Dude, this is just, these are botched financials. Or do you I yeah, I mean, I get too heavy into that. I say the accounts, but again, where I see it's, you know, again, spending money on depreciating assets period, because you got to get real profit. I mean, that's the very coming. No, everybody's got to buy a new truck and new equipment. I'm not saying you should do that. And, yeah, that's good. Like, stay ahead of maintenance and get good deals. But to do it, just to do it crazy, I don't know, right? Yeah. And also, I think, like, as as an egg, as you, as you plan your exit, you do have to calculate how much of the business is funding your personal life. Like, like, I own a business, like, put my card through it, put my phone through it, put whatever I can to get those tax deduction to fund my personal life. That's within the IRS guidelines. You have to take that in account when you leave, those go away, right? So, how are you gonna fund that? And you know, I'm sure future owners are gonna be cool to help you out, but not forever. So, yeah, you know, so like spending too much money on that stuff with that, like, that doesn't, yeah, it's a tax deduction, but doesn't build wealth. That doesn't build value, yeah, per se, you know, it's, yeah, smart tax planning, but doesn't, doesn't move the doesn't move the line up when it comes to to net worth and value. Totally, totally. I love it. Um, okay, so John, this was great. I mean, obviously you know what you're talking about. How do the listeners find you? Yeah, pretty easy. So our website is WPR planning.com What does WPR stand for? Wealth, planning resources, WPR, WPR planning.com Okay, and then my email is John at WPR planning. Dot com, both ways that you go to our website, you can, you know, get in touch with us that way, but email is always good. And you guys are putting a lot into social media too, aren't you? Yeah, social media for sure, like wealth planning resources, our LinkedIn account, my LinkedIn, we're always pumping out information are, you know, we have a great new person doing our social media on Instagram, wealth planning resources, and it's varied information, right? It's about business owner stuff, personal stuff, keep it practical. We push out a newsletter once a month to business owners, individuals, and it's curated for that demographic or that perfect situation. It's not a hodgepodge of financial stuff. It's very specific. We hold webinars, yeah? So we stay pretty active and educate. You know, it's like there's a ton of financial information on there. It's out there, and it's, frankly, very confusing. Our industry is done a good job of getting it out there, poor job of confusing everybody, yeah? So we just try to simplify as much as possible. Totally, yeah. I think, I think, just like, generally, after this conversation, like, I think, like, to your point of like, maybe doing a poor job at confusing or an exceptional job at confusing, right? I don't know how you split that, but the point is, is this episode is broken down to be super simple. I mean, I don't think this doesn't sound like rocket science. It seems like making good decisions. Yeah, it's making a decision, and it's, and it's like, it's, you know, we all fight inertia, right? Yeah, that's human behavior. I get to it later. I'm in. I'm doing my thing every single day, yeah? And I need to carve out time to actually do this work. And I think that's the hardest thing for people to do anything, whether it's going to the gym or eating good foods or, yeah, you know, going to church or whatever you do. Yeah. Planning is, is, you know, nerve wracking and scary, and how do I get it started? And I would say that's, you know, yeah, that's the biggest setting battle for everybody is just spending the time to do it and, and you don't want to do when it's panic time, right? Oh my gosh. I want to be out in two years, whatever we do it, so you just got to carve out a little bit of time. Give it 10 years. Yeah, give it. Give it 10 years. And that's the thing. We just, we try to spoon feed our clients and just one thing, one thing at a time, one solution at a time, make it easy as much as possible, and just spoon feed it, because it is a lot, yeah? And you got to have a good team, right? You got to have a good, concise control system. You got to have a good CPA, wealth advisor, attorney, everybody's talking to each other, working as a team. You bring in, like, we get an exit situation. So, like, wow, okay, it's clear that this the way you should exit. But you guys, you can't communicate, or there's some sort of issue with management. Yeah. So let's bring in someone that can counsel you on how to build systems or get through these conflicts so that you can move forward. Yeah. And I've been in situations where I kind of had to back out because we had to have a coach to come in, you know, lack of a better word, consultant to come in to, like, solve some internal issues so they can move forward. Yeah. And those that don't do that never get to the end line, right? You got to solve those internal issues totally. That's a big part of it. I mean, then this is just like, the similarities, just across the board, with talking about, you know, exiting your company, wealth management, planning and building a repeatable motion in the business, right? And it's like, it's all about alignment, and like, you can't stop and think, as a business owner, that, like, Okay, I've got my team here, and they're working on, chugging along, and it's done. It's like, okay, that's like, step one, right, right? That's like, we should be focusing on, how do we repeatedly and reliably net the most high value revenue as we can year over year over year. And then once that's a machine, and you run that, and you grow with that, and you mold that for 2030, years, the next 10 is going to be, how do I get the right people in place to start talking about bringing this up? Got this machine that's moving over here now, I've got this machine that I'm building and working over here to start talking about exits and making smart decisions and getting my team and the right positions in place. So I think it's great, yeah, and I think, you know, we talked to a lot of just kind of upstart, newer companies, and it's just like getting the things in place, not really talking about exit, like, let's just be good business owners and do the right thing, and build assets and reward your people, and have plants and have your advisors in place like you do that early on, and it's going to pay off long run. So this isn't just for people that 10 years it's people that are just starting out. Maybe, you know, and we work a lot of those kind of we love them, like the startup contractors. It's, it's the best, you know, they're. Hungry for information. And, yeah, it's, it's, it's rewarding, for sure, totally, totally. Well, I love it. I appreciate it. John, thank you so much for having me. Of course, of course, we'll be in touch. And are you a Foley's guy? No, I want to go there. What do you mean? You want to go there? I want to go there, there. I'm right there. But you know, you're my you're we live closer. We'll make it happen. We'll make it happen. I love Foleys. We'll go. We'll get the gals together. Yeah, we'll go get some pints. We'll go have some beers at Foley's. I cannot believe you haven't been to full I know everybody talks about I drive by, I don't, like, tons a day, so dude, it's awesome. And I will say the last piece here, so Foley's is blown up. And, like, literally, since we moved here, because we moved in September, right? Yeah. And then we found this place, we were like, kind of, like, trying to find our, like, our watering hole or whatever, yeah. And we go to Foley's, we're like, oh, God, this place rocks. And then, like, all of a sudden they blow up on Instagram. They get deemed, like, the best pint of Guinness in America, Irish influencer, yeah. And now it's absolutely banana. So you kind of got to, like, know when to go. But it's owned by the Foleys. Like, they're all Foleys, like, Mike, and then Mike, and Mike's son is Mike, and then their brother Jeremiah, and, like, their brother Tony works there. They're all Foleys. Oh, wow, absolute class act. Well, the most unsuspecting part of Boston, I would say, yeah, exactly. The South End, fully South End, absolute class act over there. Okay, cool. Well, we'll get beers lined up. I appreciate you. I'll let you get back to your day. Awesome. Thanks, man. Cool. See John.