Episode #10: Obtaining a Mortgage as a Business Owner with Maggie Hopkins

In today’s episode of Grow Money Business Maggie Hopkins joins us to talk about all things mortgages.  Maggie is a well-experienced mortgage broker in Sacramento and she shares her wisdom about what business owners, especially those who do not pay themselves a consistent W2 salary, should consider when they plan to buy a house.  Toward the end of the episode she shares some of her best mortgage tips and a few things she wishes people knew about the mortgage and home buying processes.  

[02:04] Maggie’s story – Maggie tells her story of how she got into the mortgage industry. 

[03:18] Mortgage process – Maggie walks you through what the process looks like when someone wants to get money from a bank to buy a house. 

[04:40] When you lack a consistent W2 income – Maggie explains what options you have when you don’t have a consistent W2 or self-employment income history. 

[06:42] Rates and down payments – Grant and Maggie discuss the available options and rates for interest and down payments. 

[08:32] Mortgage process in detail – Maggie gets to the nuts & bolts of how the approval process works. 

[10:22] Quality mortgage – Maggie explains what’s considered a ‘Quality Mortgage’ and how the DTI, aka Debt to Income Ratio comes into play. 

[12:19] “Locking the rate” – Maggie talks about the next step of the process, reserving money at the bank for a short time once you find a property to buy. 

[16:25] How selling mortgages work – Maggie explains how your mortgage provider can sell your mortgage to another party and who to contact when you want to refinance. 

[22:33] How lenders have changed – Grant & Maggie talk about how the lenders have changed in terms of leniency over the past decade. 

[28:27] Mortgage misconceptions – Maggie debunks some of the misconceptions she has seen over her long career in the mortgage industry. 

[36:41] Tips for specific cases – Maggie shares some useful mortgage tips for specific scenarios related to small business owners. 

[44:06] What’s going on in the housing market – Maggie’s take on the current market status in Sacramento and her predictions for the next couple of years. 

Resources: 

Maggie’s website: maggiebhomes.com 

Mortgage basics: consumerfinance.gov 

About Form W-2: irs.gov 

A Consumer’s Guide to Mortgage Refinancing: federalreserve.gov 

Debt to Income Ratio: consumerfinance.gov 

Episode #9: Smart Beta & Top Investing Strategies for 2020

Today we have a solo episode, where Grant shares his thoughts on an array of investment products that have come to market over the last decade. Grant covers index funds, smart beta, factor investing, and shares his favorite investment strategies for 2020.

The product options investors have available to them have grown dramatically over the last decade. We now have thousands of mutual funds and exchange traded funds available at very little cost, and in today’s episode Grant discusses some of these newer investment options. Focusing on Smart Beta Funds, Grant explains how they can contribute to positive investment returns when deployed thoughtfully. And towards the end of the episode Grant shares a few of his favorite investment strategies for 2020.  

[01:29] History of Index Investing – Grant briefly walks you through the early days of index investment and how the Capital Asset Pricing Model was developed.

[03:52] Alpha Versus Beta – Grant talks about the main differences between the two investment strategies.

[08:03] Which one performs better? – Grant explains how one of these strategies outperform the other in terms of producing consistently positive returns.

[11:46] Smart Beta Funds - Special features of Smart Beta Funds (Factor Funds) and why there’s been a lot of headlines about them.

[13:35] S&P 500 and Market Capitalization – Before getting deep into smart beta funds, Grant gives a brief explanation of how the market capitalization and S&P 500 index works.

[15:28] Value & Growth – Grant talks about how value and growth come into play in terms of categorizing stocks.

[20:08] How value stocks favor beta portfolios – Grant explains the reasons behind the recent popularity of smart beta funds and how it connects to the value and growth spectrum.

[25:32] Factors involved in Smart Beta Funds – Grant talks about what factors are considered to weight stocks when it comes to smart beta funds and what are the factors actually work.

[29:19] Current market trends – Grant’s tale on how the market behaved since the last financial crisis and what might happen in case of another recession or a massive market correction.

[34:45] Investment strategies for 2020 – Grant shares his top tips on what to consider when planning your investment strategy in the year 2020.

Resources:

Index fund basics: investor.gov

Smart Beta Funds: investor.gov

Capital Asset Pricing Model: psc.ky.gov

S&P 500 Index: investopedia.com

Market Capitalization: investopedia.com

Episode #8: How the SECURE Act of 2019 Impacts Your Retirement

The SECURE act created quite a buzz in the financial news in the last few weeks. In today’s episode of Grow Money Business, Grant talks all about this new piece of legislation and how it impacts the retirement planning landscape. The Setting Every Community Up for Retirement Enhancement Act of 2019, aka the SECURE act, was signed into law in December 2019. This episode is dedicated to giving you an overview of the SECURE act and Grant’s thoughts on how it will impact your retirement in the long run as well as the short term. [02:15] - Impact on IRAs – Grant talks about how the SECURE act changes the age to start mandatory distribution.

[05:59] – Inheritance of an IRA – The secure act made changes to what happens when you inherit an IRA from somebody. Grant talks about what changed and how it affects you. [12:05] – Early withdrawal penalty – Grant talks about a couple of new changes that allow you to get around the early withdrawal penalties in case you needed to take money out of your retirement funds a little early.

[15:36] – Safe harbor for lifetime income annuities – Grant explains how the SECURE act has options to take the risks associated with lifetime income annuities off the table.

[19:31] – Tax credit for 401K plans – Grant breaks down the numbers how the SECURE act expands the incentive tax credit you get for the first three years of a 401K plan.

[26:23] – Withdrawals for disasters – The SECURE act adds the option to withdraw money from retirement funds in the event of a national disaster. Grant explains the way it works.

[28:10] – Tax-free withdrawals for educational purposes – With the SECURE act, you can withdraw from retirement funds for qualified educational purposes. Grant explains this option and its limitations.

[31:50] – Don’t miss mandatory distributions – Grant explains why it’s important to do the mandatory distributions without a delay and the penalties associated with them.

Resources: The SECURE act: congress.gov Highlights of the SECURE act: bit.ly/2RxAi6L IRA – Individual Retirement Arrangements: irs.gov 401K Plans: irs.gov Early Withdrawals: irs.gov

Episode #7: What Small Businesses Need to Know About Trademarks, Patents, and Copyrights With Devin Miller

Our guest in today’s episode is Devin Miller. Devin is an intellectual property attorney based in Utah and the founder of Miller IP Law. Miller is also an electrical engineer, a startup founder, and a small business owner.  

With Devin’s experience in wearing lots of hats, he shares valuable information on obtaining and protecting patents, trademarks and copyrights. Towards the end of the episode, he shares some of the biggest IP related mistakes he has seen in small businesses.  

Show Notes

[02:20] Devin’s Story – Devin shares his background in business administration, how he got into the legal aspect of the startup world and his experience of starting a law firm. 

[05:56] 3 Main categories of Intellectual property – Devin gives an introduction to patents, trademarks, and copyrights along with some interesting stories of some popular brands. 

[11:53] Official requirements for a patent or a trademark - What does the US Patent & Trademark Office looks at when deciding whether to approve an application. 

[14:51] Novelty and Obviousness – Devin talks about the two main standards relevant to the patent approval process. 

[20:39] Formal search before applying for trademark – Devin explains why it’s important to do good research about your prospective brand or trademark before you apply. 

[28:31] Federal Registration versus Common Law Rights – How to determine whether you want trademark protection in all 50 states or just your local area. 

[33:00] What to do if someone infringes your rights – Devin talks about what actions a small business owner can take in case of an IP rights violation. 

[37:00] Approaching conflicts with larger businesses – What options does a small business have if they are competing against a larger company on a matter of intellectual property. 

[44:13] Copyrights in web & blog content – What to do if someone rips off stuff from your website. 

[50:32] Biggest IP mistakes in the small business arena – Devin shares some of the biggest mistakes he has seen in small businesses, what causes them and how to avoid those mistakes. 

Resources: 

US Patent & Trademark Office: www.uspto.gov 

US Copyright office: www.copyright.gov 

General information Concerning Patents: bit.ly/3a4M1SI 

Trademark Basics: bit.ly/2uCRdwR 

Copyrights in General: bit.ly/35H0DEw 

Devin’s website: milleripl.com 

Episode #6: Letting the Markets Do the Work For You With Kelly Klingaman

In episode #6 of Grow Money Business, Kelly Klingaman joins us to talk about investing.  Kelly is a regional director at Dimensional Fund Advisors. Her firm is one of the investment management giants in the USA and also a pioneer in incorporating empirical evidence and research in investment philosophy, strategies and execution. In this episode, Grant and Kelly talk about investment strategies, domestic versus international investments, sustainable investments and much more.

[02:45] Kelly’s background and her role at DFA -  Kelly talks about how she got into the field of investment management and her current work with financial advisors.

[04:50] DFA’s unique investment – Kelly explains why DFA does not offer mutual funds directly to the public and why they go through the financial advisor channel only.

[13:40] Story of Dimensional Fund Advisors – Kelly talks about the firm’s history and growth over almost four decades.

[16:35] Identifying better performing securities – Grant and Kelly talk about using historical data analysis of different types of stocks and markets to identify characteristics of securities that tend to outperform others.

[26:45] Being right consistently – Kelly describes what factors contribute to their investment decision making.

[34:01] Value of not being specific – Kelly explains how lots of people are specific on the companies they want to buy and how they could have had better opportunities had they been open to more options.

[41:14] International investing – Kelly and Grant talk about the value of diversifying investments in international markets.

[46:47] DFA’s approach to securities lending – Kelly explains how her firm participates in securities lending.

[53:45] Nobel prize-winning work of Eugene Fama – Kelly talks about how DFA’s involvement with the creators of the Fama and French three-factor model.

[1:00:17] Fixed income securities – Kelly explains what fixed income securities and what goes in to decision making around them.

[1:11:12] Sustainable and socially conscious investing – DFA’s constantly evolving approach to screening and rating investments based on how companies are affecting the environment.

Resources:

DFA’s website: us.dimensional.com

Fama and French Three Factor Model: bit.ly/2sGu64a

Fixed-Income Security: bit.ly/35nylyz

Episode #5: How to Determine Whether You Have Enough Saved to Retire

In today’s episode of Grow Money Business Grant covers the genesis of the 4% retirement spending rule and whether it still applies today.  We dive into updates to the initial research surrounding the 4% rule, how well the rule has held up over time, and what you might want to consider as you approach your own transition into retirement.

[02:15] Bill Bengen's 4% Rule - Grant talks about one of the earliest research papers published on this matter.

[04:12] The origins of the 4% retirement rule – How Bill Bengen came up with the 4% rule and nuts & bolts of the research.

[08:47] Updates to the 4% rule – The author, Bill Bengen made several revisions to his paper to include the effects of recent developments in the economy. Grant discusses what lead to these revisions.

[13:15] Michael Kitces on the 4% rule – Michael Kitces is another financial planner who carried out extensive research on the 4% rule with data going all the way back to 1870. Grant talks about the findings of this newer research.

[22.45] Guyton & Klinger's Dynamic Spending in Retirement – Jonathan Guyton and William Klinger published another research paper on this with a somewhat different approach. Grant discusses their dynamic adjustments concept in detail.

[29:20] Poking holes in your theories -  Wade Pfau is another researcher who approached this matter differently. Grant discusses his findings and differences between the other researches.

[32:02] Final thoughts – Grant talks about what you can take away from all these researches and some key points to help you make wise investment decisions.  

 Links & Resources:

Bill Bengen’s 4% rule: bit.ly/2M6gghU

Michael Kitces on the 4% rule: bit.ly/35yZYWp

The 4% Rule And The Search For A Safe Withdrawal Rate (Wade Pfau): bit.ly/2YY7dVm

Guyton & Klinger's Dynamic Spending in Retirement (Guardrails): bit.ly/2M5aZa9

Episode #4: Cash Flow For Business Owners: How to Tell How Much You’re Really Making

Welcome back to Grow Money Business Podcast with Grant Bledsoe. Today we have a solo episode and Grant is here to talk about cash flow. Cash flow related issues are very common among business owners and it’s something Grant hears about over and over again from clients, prospective clients and people in general.

If you are a business owner, at some point in your business journey you probably have come across one of those moments when your business is going really well, generating revenue and reaching growth targets but you don’t have a clear idea of how much to pull out of your business and pay yourself. This is where you’ll need a better way to manage your cash flow and know how much you’re making. So, in today’s episode Grant shares a framework that he uses to help his clients think about this.

[01:53] Keep track of your revenues and expenses – Grant explains why you should make use of modern tools for bookkeeping.

[02:38] Dedicated bank account for business transactions – It’s not mandatory but it’ll make your life a lot easier.

[04:29] Taxation and business entity types – Grant describes how taxes come in to play for different business entities; Sole proprietorships, LLCs, S-Corps, C-Corps.

[09:43] How much cash to keep in your business - Grant shares a few tricks about deciding how much cash you should keep in your business bank account.

[16:15] Managing savings – How to balance savings for short term and long term goals and keeping a cash reserve for a rainy day.

[21:15] Investment options – Grant talks about a few ways you can invest your profits including CDs, Mutual Funds, and how taxes come in to play when you invest.

[32:30] Hierarchy of incoming cash – Grant shares his wisdom on how to prioritize what to do with your money when you’re having a good month.

Links & Resources

Business Structures : irs.gov

Certificate of Deposit (CD): bit.ly/36lwUBA

Mutual Funds: bit.ly/2RCivgm

QuickBooks Accounting Software: quickbooks.intuit.com

FreshBooks: freshbooks.com

Episode #3: How Business Owners Can Reduce their Tax Liability with Dorothea Silva

In the 3rd episode of the Grow Money Business podcast, Grant interviews Dorothea Silva, a CPA and Principal at Avaunt Ltd Sacramento. Dorothea and her firm helps small businesses with tax compliance, tax returns and business consulting. On today’s episode, Dorothea share valuable insights on how business owners can reduce their tax liability. She walks you through some small business type tax deductions, qualified business deduction and several other tips & tricks.

[02:10] Dorothea’s background – Dorothea shares her 20-year journey in the field of accounting.

[05:20] Story of Avaunt Ltd – How Dorothea’s firm started, their role in business and their plans for the future.

[07:56] Process of tax planning – Dorothea shares how they approach tax planning with their clients and what the process looks like and the coaching aspect of working with clients.

[15:05] Home office deduction – Dorothea explains the 2 basic requirements for home office deduction, what qualifies and what does not.

[22:10] Business use of an automobile – How you can get a tax deduction on your vehicle used for business purposes and how to make use of apps to track mileage.

[27:46] Family members as employees – What taxes are involved in when you bring a family member as an employee on your small business.

[35:16] Best practices with family members as employees – Documentation, HR aspect and other things to keep in mind when you bring in a family member as an employee.

[42:54] Dealing with grey areas – Dorothea explains the guidance they have one the unclear areas that appear with ever evolving tax legislations.

[45:00] 20% deduction for pass-through businesses – Who qualifies and how to make the best of it.

[50:53] Building a team of support – Dorothea describes how busy business owners may not have strong relationships with CPAs, financial planners and attorneys and how to overcome this issue.

[56:14] Other opportunities – Wrapping up, Dorothea talks about a few more ways you can pay less in taxes.

Links & Resources

Avaunt Ltd official website: https://avauntltd.com/

Reach out to Dorothea via email: dorothea@avauntltd.com

Home office deduction: http://bit.ly/2rV39sz

Business use of an automobile: http://bit.ly/2sKdKHb

Family members as employees: http://bit.ly/2rf5y1h

20% deduction for pass-through businesses: http://bit.ly/2DKZsZ0

Track My Drive App: https://apple.co/2LnRf17

Mile IQ App:

Apple : https://apple.co/2YjSeog

Android : http://bit.ly/360IX7t

Episode #2: An Overview of SBA Lending With Joe McClure & Chris Boessenecker

In today’s episode if the Grow Money Business podcast, we have 2 guests from Golden Pacific Bank. Chris Boessenecker, the Branch Manager at Golden Pacific’s Downtown Sacramento branch and Joe McClure, Chief Banking Officer. Today’s episode is all about SBA Lending. Chris and Joe share their experience on the SBA system and some tips for making the process smoother. If you’re curious about whether SBA Lending is a good fit for your business as a way to obtain financing, stay tuned till the end of the episode.

[02:05] Chris & Joe share their background – Golden Pacific Bank’s nature of work, Chris’s background and Joe’s amazing journey to be the Chief Banking Officer.

[06:12] Creativity at work – Joe shares a story of how he had to get creative to serve one of their clients at Golden Pacific.

[09:36] SBA system in a nutshell – How it works, how the Small Business Administration shares the high risk of small business loans.  

[12:41] Value of experience – Joe describes how they look for behind the counter experience in a particular field and knowing nuances of running a business when it comes to loans.

[14:02] How SBA program started – Chris walks you through a brief history of the SBA program and how it works as more than just a loan mechanism.

[18:25] Eligibility for a SBA Loan – Joe describes the requirements for the SBA loan program and some situations you can make use of the SBA loans.

[26:24] Legislative background of the SBA – SBA’s connection with the cabinet and its role in administration.

[34:16] Nuts & bolts of SBA loans -  Interest rates, premiums and other logistics & parameters.

[38:26] Guarantees – What sort of a guarantee you’ll need for a SBA loan.

[40:52] Defaults – Joe shares a couple industries that they see higher default rates.

[43:30] In case of a recession – Joe’s thoughts on when things might fall apart again and how to be prepared.

[55:34] Tips & tricks – Joe shares a few tips for preparing for a SBA loan.

Resources & Links

SBA Official Website: https://www.sba.gov/
SBA Lending Info: http://bit.ly/34V0g9O
Golden Pacific Bank: https://www.goldenpacificbank.com/

Episode #1: What Small Businesses Need to Know about 401(k) Plans with Matt Harrington

In the very first episode of the Grow Money Business podcast, Grant interviews Matt Harrington, the President & CEO of Benefit Resources.  Benefit Resources is a third party administration firm. They help businesses create and maintain qualified retirement plans, including 401k, cash balance, and defined benefit pension plans. In today’s podcast Matt and Grant talk retirement plans and what every business owner should know about them.

[03:58] Matt’s Background – Matt talks about his professional work and how he got the opportunity to take over the family business and what they do at Benefit Resources.

[08:22] Qualified retirement plans - Matt describes the nature of qualified plans and some other available options.

[17:04] Setting up retirement plan packages -  Matt talks about how different businesses have different objectives and strategies and setting up retirement plans that suits the objectives of a business.

[18:47] Safe Harbor 401k – What is it, what are the differences and what business owners should keep in mind about it. 

[25:21] ACP & ADP tests – Matt discusses the two major tests related to the compliance of retirement programs, Actual Contribution Percentage test and Actual Deferral Percentage test.

[32:24] Cash Balance plans – Grant and Matt compare & contrast more simplistic plans such as SEP-IRA & solo 401k and why cash balance plans are beneficial.

[48:26] Matt’s business structure – Matt talks about how they have structured his firm and the way they handle retirement plans.

[55:00] Matt’s goals – Matt talks about their growth objectives for his firm in the next year.   

[1:01:00] Matt’s transition - Matt talks about the transition to being the CEO of Benefit Resources in a succession from his mother, Beth Harrington.

Resources & Links

Benefit Resources Website :  https://www.benefit-resources.com/

Vistage CEO Community: https://www.vistage.com/

Welcome to Grow Money Business

Welcome to Grow Money Business with Grant Bledsoe, the podcast dedicated to helping business owners grow their wealth and business on their own terms.

Grant is a CERTIFIED FINANCIAL PLANNER™ who helps business owners optimize & align their personal finances, business, and values. He’s the founder of Three Oaks Capital Management, a registered investment advisory (RIA) firm. Throughout this podcast Grant will bring you valuable ideas to help you grow your business & wealth.

Grow money business is focused on personal finance for business owners. It’ll be a mix of monologues from Grant and guest interviews from entrepreneurs and business professionals. Our conversations will cover a wide range of topics such as buying & building businesses, tax planning & management, and also some more mainstream issues like investing, retirement and many more.  

If you enjoy the podcast, be sure to subscribe and leave a review on Apple Podcasts, Google Podcasts, Spotify or wherever you digest your podcasts.