What are your tax plans for when you exit your business? Do you have one? Our guest today is Brett Swarts, is a capital gains and exit tax planning expert.
TODAY'S WIN-WIN:
Write down what matters the most.
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- Connect with our guest on social:
- https://www.linkedin.com/in/brett-swarts/
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- https://www.youtube.com/@CapitalGainsTaxSolutions
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- instagram.com/brett_swarts/
ABOUT OUR GUEST:
Brett Swarts is a best-selling author of "Building a Capital Gains Tax Exit Plan”. He is host of the Build it to Billions & Capital Gains Tax Solutions Podcasts. His insights have been featured at the Best Ever Real Estate Conference, DLP Capital Conference, American Entrepreneur with Kevin Harrington from Shark Tank, and also seen on Fox Business Network. As a real estate broker, his expertise is one of the few in the world who has closed Deferred Sales Trust, Delaware Statutory Trust, and 1031 Exchanges. He is the Founder of Capital Gains Tax Solutions where he teaches purpose-driven entrepreneurs and investors to build their capital gains tax exit plan to multiply their freedom, wealth, and impact. He has closed over ½ Billion in Deferred Sales Trust and Real Estate Transactions and he was the first to help Bitcoin owners exit millions of gains and defer their capital gains tax using a Deferred Sales Trust.
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The information provided in this podcast is for informational and educational purposes only and should not be considered financial, legal, or professional advice. Always consult with a qualified professional before making any business decisions. The views and opinions expressed by guests are their own and do not necessarily reflect those of the host, Big Sky Franchise Team, or our affiliates. Additionally, this podcast may feature sponsors or advertisers, but any mention of products or services does not constitute an endorsement. Please do your own research before making any purchasing or business decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Tom DuFore (00:01):
Welcome to the Multiply your Success podcast,
where each week, we helpgrowth-minded entrepreneurs and
franchise leaders take the nextstep in their expansion journey.
I'm your host, tom Dufour, ceoof Big Sky Franchise Team, and
as we open today, I'm wonderingwhat are your tax plans for when
you exit your business?
Do you have one?
(00:21):
Have you even thought aboutthat?
Or maybe you've exited andthought, oh boy, I exited in the
past and tax obligations wereso high it wasn't even worth it,
or maybe you saw something likethat.
Well, our guest today is BrettSwartz, and he is a capital
gains and exit tax planningexpert.
Now, brett is a bestsellingauthor of Building a Capital
(00:42):
Gains Tax Exit Plan.
He's the host of the Build itto Billions and Capital Gains
Tax Solutions podcasts.
He's the founder of the CapitalGains Tax Solutions, where he
teaches purpose-drivenentrepreneurs and investors to
build their capital gains taxexit plan to multiply their
freedom, wealth and impact.
He's closed over half a billionin deferred sales trust and
(01:03):
real estate transactions, and hewas the first to help Bitcoin
owners exit millions of gainsinto further capital gains using
a deferred sales trust.
You're going to love thisinterview, so let's go ahead and
jump right into it.
Brett Swarts (01:15):
Tom grateful to be here.
Thank you for having me.
Brett Swartz, founder and CEOof Capital Gains Tax Solutions.
Tom DuFore (01:23):
I love your business name because it says what you
do and I really am lookingforward to our conversation, to
be talking about capital gainstax and to explain what it is,
how it works and start gettinginto some of these complexities
that I've seen business ownersover the years go through
transactions, sell business andhave capital gains tax and not
(01:44):
really know what they're doingor what they're getting into.
So I'd love for you just togive an overview and a starting
point for us.
Brett Swarts (01:52):
Absolutely Most purpose-driven entrepreneurs
when they're building theirbusinesses.
That's what they're focused on.
They spend 5, 10, 15, 20 yearsplus building it and then they
have this massive exit.
But they haven't been preparedor planned necessarily for the
exit and sometimes they getcaught with massive capital
gains tax when they could havedeferred it and compounded the
(02:13):
wealth.
And so we focus on that 20 to50% of every sale that's going
to be taxed and we build capitalgains tax exit plans to
continue the momentum right.
The worst thing you can do as abusiness owner is stop that
momentum.
We love momentum and momentumcontinues with tax, either in a
positive way, if you can deferit, or it goes negative if you
(02:35):
have to pay it.
And that's what we want to tryto help business owners do and
create passive wealth or go tothe next business venture.
It all just kind of depends onthe customized plan, but
ultimately that's what we do.
We've built a capital gains taxexit plan help them defer the
tax so they can multiply theirfreedom and impact.
Tom DuFore (02:53):
I think that sounds great, but I know, for me and
probably a bunch of other folksout there, my initial thought is
well, it's kind of the oldadage right, death and taxes are
two things that are certain,and so isn't it that when you
sell your business or an assetlike that, you just are stuck
with these taxes?
I mean, that's the mindset Ithink that I know I've had over
(03:15):
the years, and probably someonetuning in might have.
So help me better understandhow that might work.
Brett Swarts (03:20):
Yeah, you have an IRA 401k.
Maybe you've done a 1031exchange.
I have to use the analogy thatif a tree falls in a forest and
no one's around to hear to makeit sound, you know it didn't
make it sound.
We can debate that.
So the reality is the beauty ofa compounding effect of you
know what, the eighth wonder ofthe world.
If you can defer taxes and letit compound for decades and pass
(03:40):
it to your kids, let itcompound, guess what?
You're not paying taxes untilyou receive payment, okay.
So that's a key point here.
So think of our structurestrategy is an interest-free
loan for the government.
So, tom, if the government said, hey, on your, on your next $10
million exit, you would havepaid 4 million of tax, but we'll
give you a zero interest loanon that 4 million and you can go
(04:03):
invest it into other businessventures.
It can go into real estate, youcan put it in the stock market,
put it into Bitcoin.
In other words, you can investit into these other investments
or businesses and thosebusinesses can grow and you can
live off a cash flow.
When would you want to pay thatback?
Well, I can tell you the answerto the question it's the second
day to never right.
(04:23):
You're going to want to deferthat tax, compound that wealth,
make a bigger impact, and that'sthe beauty of what the US
government tax code has given tous.
Using IRC 453, which we'll getinto more, which doing an
installment sale with a trust isthe key can give you that
flexibility and the ability tocompound that wealth.
And the reality is most of ourclients really want this.
(04:45):
They want truly passive incomeand we believe that truly
passive income is to yourfreedom and impact, as
compounding interest is to yourmoney.
In other words, a lot of peoplestart at the business not only
to build the wealth, make animpact, but also to have a
retirement or have someadditional ability to get
revenue passively, eventually,if they can, either stepping
away from the business, sellingthe business, and so we just do
(05:06):
this in an all in one, all inone kind of exit.
You know when they, when theygo to exit and we let's say
there's 10 million you have thatyou would have had six Now we
invest, let's say we make eightor 9% net of net of, you know,
fees on a recurring basis.
You know it's an extra 800,just 800 to $900,000 of passive
income versus if you only had $6million, let's say, after a 40%
(05:27):
tax.
You can kind of do the math onthat, and so that's really the
focus here, and so most of ourclients like to compound wealth
versus paying the tax.
Tom DuFore (05:35):
I can't imagine any business owner or someone a
founder that's at that stagecoming in and saying, well, I
would really prefer to make allthose tax payments if I can
defer that and help.
Like you said, multiply thatthat would be certainly.
We love that word here onMultiply your Success podcast.
One of the things that it mademe think about is for someone
(05:56):
that's thinking of this, ormaybe they're just thinking of
it hearing this when shouldsomeone start this kind of
planning?
Is this something they startafter the sale has begun, or
when do you advise that?
Brett Swarts (06:07):
Yeah, once somebody start in a capital
gains tax exit plan, what Iwould say you know, really,
there's no, it's never too early, but it can be too late.
Right, it's too late if you'vealready sold the business, or if
the buyer has removed allcontingencies, or if you don't
have the language in thepurchase and sale agreement or
the APA, the SBA.
We want to get it as early asbetter, and the neat part about
(06:28):
working with us is we don'tcharge anything to do all the
planning.
I mean literally all theplanning, the trust work,
talking with your legal team,your CPA, getting everything in
place.
We do that purposely, becausethe IRS has a rule that when you
have what's called constructivereceipt, which basically means
you're bound to sell it to thebuyer, then it's too late and
it's going to be a taxable event.
And so in this situation welike to say be early.
(06:51):
Yeah, where do most people findus?
I would say six to 12 monthsbeforehand.
We have those that will find ussometimes 30 to 60 days, where
they're under contract and weare moving at a faster pace to
get to know, like and trust oneanother and make sure that we're
a good fit.
So the earlier the better forthe planning.
What?
Tom DuFore (07:06):
are some things maybe a founder, owner,
president or CEO of a companyshould be starting to think
about.
What are the kinds of thingsthat they might need to be
collecting or having availableto start discussing that with
someone like you and your team?
Brett Swarts (07:20):
Great question.
I think the number one mistakethat a lot of entrepreneurs or
business owners make is theydon't get really clear on their
perfect life metrics.
They also don't get reallyclear on their family mission,
vision values for their wealth.
And so we always start with themacro and say, hey, what are
your family mission, visionvalues, what is your wealth
legacy, generational stewardshipplan and how is your exit going
(07:44):
to be a big part of that?
Or how is maybe keeping thebusiness and maybe not selling
being a big part of that andfiguring that out?
And so, when they can getreally clear on that, we wanna
avoid the death, the divorce,the partnership separation, the
things that cause sales, toforce sales, and we really want
them to be in a proactive state.
As we were talking before theshow a couple of years ago,
(08:05):
there were probably a number offolks who wish they would have
sold when the multipliers werehigher, when debt was more
readily available for buyers andcapital was flowing a little
more.
They could have maybe exited abetter multiplier.
And that's what we want to do.
We want to focus on what's theoptimal timing.
So what's optimal for you, MrSeller, and your family, and how
(08:25):
does that fit into this largerplan of the exit.
And so the question we ask, andkind of the exercise that we
can help anyone today, is writedown what matters the most.
And that last piece is reallyimportant because there's a lot
of things that matter, Tom, Like, look, I want to defer my tax.
Look, I want to be able to exitat a high price.
Look, I want to be able to getme out of debt, be diversified,
provide for my family, haveasset protection, have
(08:46):
diversification, have someliquidity.
I mean, we can go down thelaundry list, but if you say
what matters the most to you, MrSeller, during this season of
the clients that we work with,what matters to them the most is
number one truly passive income.
(09:07):
How can they finally get tothat fourth quadrant of the rich
dad, poor dad, where theirmoney is giving them time right
Versus them trading their timefor their money?
And so we clear on the number10, 20, 30, 40, 50,000 per month
or somewhere around there.
They probably have some passiveincome here or there that's
trickling in, but it's notsubstantial enough for them to
walk away from their businessnecessarily, unless they can
(09:29):
sell their business to furthertax and convert that into a
truly passive income plan andagain, we believe truly passive
income is to your freedom andimpact is compounding.
Interest is to your money.
And then we just build thatplan.
We look at the ROE return onequity that's currently valued
at your business versus yourcurrent cash flow that's active,
by the way and then we look atthe ROT right, which is your
(09:52):
return on time right.
How much time, blood, sweat andtears are you pouring into it?
Now, here's the reality.
I'm an entrepreneur, Tom.
You're an entrepreneur.
We love and we're passionateabout what we do, but at a
certain point, are we ready totransition?
Here's the beauty about ourstructured strategy you don't
have to be passive.
In fact, we have lots of youngentrepreneurs that are looking
for their next chapter and theyuse the trust as a funding
(10:16):
source for their next vision ortheir next mountain to climb.
And so you can be anentrepreneur.
You can be passive, you can beretired, you can be active.
It's not a one size fits all.
In fact, I had a client, Warrenand Catherine.
They're real estateentrepreneurs.
They own an apartment complexbusiness in Sacramento,
California, and they sold forabout 2.5 million right at the
peak.
(10:36):
It was great.
We deferred all their tax.
Their NOI was about $120,000.
We increased it to about$190,000.
But the beauty is their ROTtheir return on time went
through the roof because they nolonger have to work on the
property.
And that's what leads into.
The last one I'll leave here isROI, which is not just a return
(10:56):
on investment, it's your returnon impact.
And the beauty of this is theyhad two young daughters that
were 10 years old and theywanted to maximize their time
with the kids before they're 18.
Did you know, Tom, that 85% ofthe time we spend with our kids
is before they're 18?
That's their whole lives.
Our 85% as parents is beforethey're 18.
So they wanted to maximize that.
Well, guess what?
What happens when the kids gooff to college and get married
(11:17):
and all that kind of thing?
Well, guess what?
They're probably going to beentrepreneurs again, and that's
the beauty.
You want a structure and astrategy that can flex with your
life right Back and forth.
So I'll pause there, but thoseare just some of the things that
we help our clients through.
Tom DuFore (11:31):
I'd love for you to expand on this idea of selling
five years earlier versus fiveyears later.
Brett Swarts (11:37):
Yeah, let's break it down with this whole exercise
.
Let's say 10 million is yourmagic number, right?
If you had 10 million, earningabout 8%, it's about $800,000 a
year.
That's about, you know, 65,000a month.
Just to keep it simple, let'ssay that was your truly passive
income number, and five yearsago, you know.
Let's say you're in New York,new Jersey, taxifornia, you're
(12:00):
in these higher tax states.
We'll use a number of about 35to 40 percent of your gain.
Well, five years ago you couldhave sold at 10 million, but the
challenge was you go well,brett, I really need 10 million,
net of taxes, net of closingcosts, net of m&a advisor fees,
all the different things, andthat equals about 65 000 a month
.
So I need to wait a few moreyears in order to achieve that.
I need to sell for about 15million, just to keep it simple,
to net about 10.
(12:21):
So I'm going to continue towork really hard and increase my
EBITDA and really, you know,you know, get all this thing
dialed in.
But thank you, mr MA advisor,for the evaluation at 10.
I'll wait till 15.
And so well, fast forward.
The market has shifted right.
Maybe values are no longer 10.
Maybe now, values are now eight, maybe values are seven, maybe
(12:42):
AI is now attacking your wholeentire ecosystem and you're
fastly bleeding in your EBITDA.
And so it's now.
You're not in optimal timing.
In fact, the market a few yearsago was optimal.
Now here's the beauty if youhad our structure, the beauty is
you could have sold at 10 andthe trust could have net at 10
and it could have invested andthen now started to produce all
(13:04):
of this passive cashflow, whichis what you really wanted.
Anyways.
The 15 number was really justan arbitrary number in the sense
that you didn't care about 15,you just cared about the net 10
to get you to the $65,000 amonth.
And so what we're talking abouthere is kind of the ROT again,
the return on time.
What if today you could sell,defer the tax?
And now it's like a timemachine All of a sudden.
(13:26):
I don't have to wait anotherfive years of my life.
I don't have to wait forunoptimal timing.
No one knew for sure what'sgoing to happen with these
interest rates, but here we areright.
So you want to strike when theiron's hot and you want to have
a team that helps you to be ableto strike on the irons hot.
Now here's the flip side too.
The funds could have been intothe trust.
You could have diversified andthen you could start investing
and buying back into companiesthat have either had been
(13:48):
devalued or dropped in value.
You know, we call this going onthe offense right.
Once you get in a spot whereyou're debt-free, tax-deferred,
diversified, the funds couldliterally sit in money market
accounts S&P 500, real estatedebt funds.
We had one client actually sella car wash business $13 million
in San Diego.
(14:09):
Deferred all their tax, theirbasis was about $4 million.
Well, they invested a largechunk of it into Bitcoin.
Guess what?
Bitcoin was at $40,000 a coinat that point.
Now it's close to over 120,000a coin.
You kind of do the math there.
And they went into real estatedebt funds.
They went into some stocks andthey've been waiting for this
market to shift.
And guess what?
The real estate market hastaken about three years to shift
(14:31):
and now they're seeing land ata discount and they're gonna
partner with the trust to be anentrepreneur again to go build
car washes.
And that's the point we want togive you, the entrepreneur, the
leverage of timing of sale andthe leverage of time to buy
investments when it's on yourterms, versus it being dictated
by a big tax bill.
Tom DuFore (14:52):
It got me thinking about this, saying well, if I'm
talking to clients and advisingpeople that I'm working with,
sometimes thinking about, well,maybe selling sooner rather than
later provides you either thesame or better opportunity,
because I bump into this a lotwith clients that think, oh, I
need to wait.
Brett Swarts (15:10):
I know my valuation is, to your example,
$10 million, but I got to waituntil I'm at $15 or $20 so that
I can get down to this point,but it might take another 10
years to get there 100%, and theone thing that we can never get
back is time right, the time tospend the time with either our
families or the next businessventure, or whatever it might be
making a big difference, makingan impact.
And so, yeah, that's why weexist to unlock capital, to
(15:32):
multiply freedom and impact.
And that capital, in fact, isabout $100 trillion is the
estimate over the next five to15 years.
That's gonna transfer mostlyfrom the baby boomers who have
built these big businesses, whoare huge, you know, built these
big franchises right and havemultiple locations, and they're
looking at this and maybe theson or the daughter is not ready
to take over, or the employeesare not ready to take over, and
(15:55):
they're looking at ways todiversify, ways to exit and to
build a legacy.
Every single day, 10,000 babyboomers are turning 65 years old
in the US alone and there'sabout 80 million in the US alone
.
And the total net worth inAmerica, tom, is around 50%.
It's tied to high-end primaryhomes, private equity, which is
businesses, and commercial realestate, and those three asset
(16:20):
classes represent 50% of thetotal net worth and they're
going to be trading hands andthey're going to be trading
hands and shifting, and so we'rein this battle.
It's no longer just about cashflow, it's about tax flow, and
you've got to have a mindsetshift on this, otherwise what
you've built will be crushed by20% to 50% in tax, or worse, you
won't sell at optimal timingand the market itself will drop
another 20%.
And now you're playing catch upand who knows, that's not a
(16:43):
great place to be in when you'rehaving to chase the market when
you could have sold at a nicetime.
Tom DuFore (16:48):
I think you summarized it very well it's not
just cashflow, it's taxflow,and for someone now that has
this tax flow thought in theirmind, how can someone find out
or connect with you?
Get connected, learn a littlebit more about what you're doing
and how you might be able tohelp them?
Brett Swarts (17:02):
Yeah, thanks, tom.
You can go tocapitalgainstaxsolutionscom.
You can schedule a no cost, noobligation time with myself, one
of my team members, to see ifyou can be a good fit.
You can apply for that.
We also have a book calledBuilding a Capital Gains Tax
Exit Plan.
We actually wrote it with KevinHarrington from Shark Tank,
which is pretty cool.
He's in the book and also TonyRobbins, cpa, is in the book,
and it's basically my journeyfrom being a multifamily Marcus
(17:24):
and Mila Chap broker helpingpeople buy and sell investment
real estate and not learningabout it in time and really
failing my clients because wedidn't know about this strategy.
And then the 2008 crash andfast forward, learning about it
and then giving business ownerslike you know who's listening
today and real estate owners andBitcoin owners the opportunity
to build a capital gains XXamount we have to say.
(17:45):
Tom, spend five hours with usand we'll give you an extra 20
to 50% working for you.
Also, we can eliminate estatetax, which is a powerful thing
as well for those who have ultrahigh net worth above 30 million
maybe 15 million single and wecan eliminate that estate tax.
So you just want to startplanning today.
Don't wait.
Go tocapitalgainstaxsolutionscom.
Tom DuFore (18:06):
Fantastic, and we'll make sure we include that in
the show notes and make it easyfor folks to connect with you
and learn here about what you'redoing.
Well, brett, this is a greattime in the show.
We ask every guest the samefour questions before they go,
and the first question we ask ishave you had a miss or two on
your journey and something youlearned from it?
Brett Swarts (18:22):
Absolutely so I'm newly married.
This is back kind of the 2008crash.
Maybe your listeners can relateFinancially, flat on my back
broke, we actually ran out ofmoney.
I'll never forget a lot of thefriends and some of the family
was saying, maybe go get a realjob at like a bank.
But I was an entrepreneur witha dream in my heart to be in
real estate and commercial realestate.
It's 100% commission, no salary, no benefits.
(18:44):
You're making these cold calls,think about like boiler room to
help people buy and sell realestate right.
That's where I was a broker inreal estate, investment real
estate.
Yeah, I wasn't making it and Iwas newly married, baby on the
way.
It was really tough financially.
So I did what every real estateentrepreneur or real
entrepreneur does you get a sidehustle, and my side hustle was
Cheesecake Factory, right, andso I was selling avocado egg
(19:07):
rolls by night and nights andweekends and by day I started
working at Marcus and Millichapto try to keep the dream alive.
So I was working these two 60,70 hour weeks.
Then I started adding on AAUbasketball tournaments.
So I was kind of the bouncerI'd take the cash, put the
wristband on.
Then I added a hot dog stand,with a smoothie stand and with
(19:28):
selling all the stuff fromCostco.
I was running these little minibusinesses, if you will, and
trying to just keep the wholething on, so we flat out ran out
of money $5,000 I had to borrowfrom my dad and we moved into
my brother to a small condo withour first baby daughter.
That was also a humblingexperience.
I did that for a two yearperiod of time, but guess what I
you know it actually solidifiedthe tenacity and the grit and
(19:51):
the resilience and what wasreally valuable for my wife and
I for our future, and so Ialways, always shared that story
.
That was a huge miss, hugechallenge, but it obviously
helped to create the grit neededto be an entrepreneur.
Tom DuFore (20:04):
So I also really see it as a make as well.
Oh, fantastic, thanks forsharing that story.
Wow, let's talk about a make ortwo, or a highlight you'd like
to share.
Brett Swarts (20:12):
Yeah, I would say the biggest thing would be going
national right and stoppingplaying so small, meaning just
locate all this, really the kindof the profit who wasn't
accepting his hometown.
I would cold call people andtell them about this tax
deferral strategy and they werelike, who are you?
You're just a real estatebroker.
Who are you Like?
You're not a CPA, like I don'tknow.
Call me when you close somedeals, I don't know if this is
going to work.
Too good to be true, lose mynumber hang up on me.
(20:34):
And then I just kept pressingthrough and I would get some
meetings and some success.
But it was very small and so itwas when we went to the podcast
actually YouTube and we wentnational with what we had and
all of a sudden we have clientsyou know, across the country now
, and so I would say the big,the big make, was the ability to
jump onto other people'spodcasts people who come on my
(20:55):
show and to really spread theinformation that can change
people's lives and focus ontransformation.
So I would say that wasdefinitely the big make.
And now we've closed, I think,over a half a billion dollars in
real estate and deferred salestrust transactions and we've
also done some Delawarestatutory trust and we just have
a big, amazing client base thatare like family, so that would
(21:17):
definitely be the biggest make.
Tom DuFore (21:19):
Let's talk about a multiplier.
The name of the show isMultiply your Success.
So have you used a multiplierto grow yourself, personally,
professionally, or any of thebusinesses you've run?
Brett Swarts (21:27):
Back to the kind of the concept of, you know,
truly passive income is to yourfreedom and impact is
compounding interest of yourmoney and the multiplying effect
of that.
So I would say the biggestthing personally that I did to
multiply was jumping into aactually a men's Bible study
when I was about 24 years oldand it was different than the
traditional Bible studies.
(21:48):
It was more like discipleship,leadership and the Bible and it
was the practical application.
It was about 25 guys and I wasthe youngest one and there was
attorneys, there wasentrepreneurs, there was doctors
, there was construction workersI mean anything you knew, name
it like all across and I wasthis new guy and I had a chance
to just be, you know, encouraged, prayed for, discipled, and I
(22:09):
did this for about a 10 yearperiod of time and this is where
I really feel like growing up,my parents were divorced so my
dad wasn't really around, didn'tpay child support.
It was tough.
He was still a greatentrepreneurial dad, taught me a
lot how to work hard.
I love my dad.
We're good things.
I love my dad, but he did somethings that weren't so great
right, and my mom, healthchallenges and all these
everything.
So finances and wealth arealways kind of a car.
(22:35):
You live with my grandma allthese things Again, both worlds.
And so I go to this men's Biblestudy.
It was cool because I had achance to.
I played sports in college,basketball in college and high
school football, all this stuff.
But this is a chance to reallydig in and I felt like I had
almost like 20 mentors all atonce all rooting for me, all
encouraging me.
This is before I was marriedand I feel like it was almost
(22:56):
like an initiation from likebeing like more of a boy
teenager into a man.
So I would say that was amultiplier effect.
Married now, 16 years, you knowthey helped me, encourage me to
get married at that point.
We have five children.
That's definitely been amultiplier, yeah, and now now
fast forward.
It's a God's blessing everysingle day.
I'm just so grateful for it.
Tom DuFore (23:17):
Wonderful.
Well, the final question we askevery guest is what does
success mean to you, Number?
Brett Swarts (23:23):
one is identifying your unique gift that's been
given to you, I believe, by God,and using that gift and, in a
sense, multiplying or maximizingthe potential of that gift.
So knowing the gift, believingin the gift and maximizing the
potential of that gift.
So, knowing the gift, believingin the gift and maximizing the
potential of the gift.
The next part of this successis impacting as many people's
(23:44):
lives as you can with the giftfor good right.
And then you take all of thatpiece, those three pieces, and
knowing and believing thatthere's a bigger purpose for
each of our lives and that youknow God's given this short time
on earth to make this impact.
To me that equals success.
But if you don't know the gifts, if you're not maximizing the
potential of the gifts, ifyou're not using it to maximize
(24:04):
the amount of people you canimpact and, lastly, if you're
not believing that it's here fora higher purpose, I think it's
very hard to find success.
To me, that's success.
Tom DuFore (24:12):
Wonderful, brett.
Thank you for sharing that and,as we bring this to a close, is
there anything you're hoping toshare or get across that you
haven't had a chance to yet?
Brett Swarts (24:22):
Not that we haven't already talked about.
I would just say, as anentrepreneur, you are the
backbone of the economy, of theUS economy, creating the jobs.
I'm always grateful to be ableto serve and be a part of the
entrepreneurial world, right andcommunity.
And so for what, tom, you'redoing, I'm just grateful for the
opportunity to share and maybebe a big or small part in
(24:44):
someone's journey on an exit ortheir entrepreneur journey to
grow.
So just grateful to be here.
Tom DuFore (24:51):
Brett, thank you so much for a fantastic interview
and let's go ahead and jump intotoday's three key takeaways.
Takeaway number one is when hesaid it's not just cash flow,
it's also tax flow.
I thought that was a fantasticsummary of how to start thinking
about tax and tax flowsituations at the time of exit.
(25:13):
Takeaway number two is thatwhen Brett talked about it's
never too early to start acapital gains tax exit plan In
fact, the sooner the better.
If you're thinking aboutselling in five years or 10
years and that is on the horizonstart thinking about it.
And I thought it wasinteresting Brett said he
doesn't charge his clients orprospective clients for the
(25:35):
planning that he helps them with.
Takeaway number three is whenBrett talked about, as an owner
and the founder, that you needto get really clear on what your
family mission, vision andvalues are post-exit, what is
most important to you, and getvery, very clear on that.
And now it's time for today'swin-win.
(25:58):
So today's win-win comes fromgetting clear on what you want.
And I really want to emphasizethis point again when Brett said
you have to get clear on whatmatters the most, and I put the
most in big, full capitalizedletters to say you have to get
clear on that.
What matters the most?
And I put the most in big, fullcapitalized letters to say you
(26:19):
have to get clear on that, whatmatters the most right now, so
that you know where to spendyour passive time, passive
income what are you doing thisfor?
So that you can look at yourreturn on time and you can look
at your return on equity and youcan look at your return on
impact.
Once you are clear on whatmatters the most, it is going to
(26:41):
help you better understand whatkind of income you actually
need, how to structure it, whereyou're going to spend that time
, money and resources, so thatyou can serve and support those
things that matter the most toyou.
And so that's the episode today.
Folks, Please make sure yousubscribe to the podcast and
give us a review.
And remember if you or anyoneyou know might be ready to
(27:02):
franchise their business or taketheir franchise company to the
next level, please connect withus at bigskyfranchiseteamcom
where you can schedule your free, no obligation consultation.
Thanks for tuning in and welook forward to having you back
next week.
Welcome to the Multiply your Success podcast,
where each week, we helpgrowth-minded entrepreneurs and
franchise leaders take the nextstep in their expansion journey.
I'm your host, tom Dufour, ceoof Big Sky Franchise Team, and
as we open today, I'm wonderingwhat are your tax plans for when
you exit your business?
Do you have one?
(00:21):
Have you even thought aboutthat?
Or maybe you've exited andthought, oh boy, I exited in the
past and tax obligations wereso high it wasn't even worth it,
or maybe you saw something likethat.
Well, our guest today is BrettSwartz, and he is a capital
gains and exit tax planningexpert.
Now, brett is a bestsellingauthor of Building a Capital
(00:42):
Gains Tax Exit Plan.
He's the host of the Build itto Billions and Capital Gains
Tax Solutions podcasts.
He's the founder of the CapitalGains Tax Solutions, where he
teaches purpose-drivenentrepreneurs and investors to
build their capital gains taxexit plan to multiply their
freedom, wealth and impact.
He's closed over half a billionin deferred sales trust and
(01:03):
real estate transactions, and hewas the first to help Bitcoin
owners exit millions of gainsinto further capital gains using
a deferred sales trust.
You're going to love thisinterview, so let's go ahead and
jump right into it.
Brett Swarts (01:15):
Tom grateful to be here.
Thank you for having me.
Brett Swartz, founder and CEOof Capital Gains Tax Solutions.
Tom DuFore (01:23):
I love your business name because it says what you
do and I really am lookingforward to our conversation, to
be talking about capital gainstax and to explain what it is,
how it works and start gettinginto some of these complexities
that I've seen business ownersover the years go through
transactions, sell business andhave capital gains tax and not
(01:44):
really know what they're doingor what they're getting into.
So I'd love for you just togive an overview and a starting
point for us.
Brett Swarts (01:52):
Absolutely Most purpose-driven entrepreneurs
when they're building theirbusinesses.
That's what they're focused on.
They spend 5, 10, 15, 20 yearsplus building it and then they
have this massive exit.
But they haven't been preparedor planned necessarily for the
exit and sometimes they getcaught with massive capital
gains tax when they could havedeferred it and compounded the
(02:13):
wealth.
And so we focus on that 20 to50% of every sale that's going
to be taxed and we build capitalgains tax exit plans to
continue the momentum right.
The worst thing you can do as abusiness owner is stop that
momentum.
We love momentum and momentumcontinues with tax, either in a
positive way, if you can deferit, or it goes negative if you
(02:35):
have to pay it.
And that's what we want to tryto help business owners do and
create passive wealth or go tothe next business venture.
It all just kind of depends onthe customized plan, but
ultimately that's what we do.
We've built a capital gains taxexit plan help them defer the
tax so they can multiply theirfreedom and impact.
Tom DuFore (02:53):
I think that sounds great, but I know, for me and
probably a bunch of other folksout there, my initial thought is
well, it's kind of the oldadage right, death and taxes are
two things that are certain,and so isn't it that when you
sell your business or an assetlike that, you just are stuck
with these taxes?
I mean, that's the mindset Ithink that I know I've had over
(03:15):
the years, and probably someonetuning in might have.
So help me better understandhow that might work.
Brett Swarts (03:20):
Yeah, you have an IRA 401k.
Maybe you've done a 1031exchange.
I have to use the analogy thatif a tree falls in a forest and
no one's around to hear to makeit sound, you know it didn't
make it sound.
We can debate that.
So the reality is the beauty ofa compounding effect of you
know what, the eighth wonder ofthe world.
If you can defer taxes and letit compound for decades and pass
(03:40):
it to your kids, let itcompound, guess what?
You're not paying taxes untilyou receive payment, okay.
So that's a key point here.
So think of our structurestrategy is an interest-free
loan for the government.
So, tom, if the government said, hey, on your, on your next $10
million exit, you would havepaid 4 million of tax, but we'll
give you a zero interest loanon that 4 million and you can go
(04:03):
invest it into other businessventures.
It can go into real estate, youcan put it in the stock market,
put it into Bitcoin.
In other words, you can investit into these other investments
or businesses and thosebusinesses can grow and you can
live off a cash flow.
When would you want to pay thatback?
Well, I can tell you the answerto the question it's the second
day to never right.
(04:23):
You're going to want to deferthat tax, compound that wealth,
make a bigger impact, and that'sthe beauty of what the US
government tax code has given tous.
Using IRC 453, which we'll getinto more, which doing an
installment sale with a trust isthe key can give you that
flexibility and the ability tocompound that wealth.
And the reality is most of ourclients really want this.
(04:45):
They want truly passive incomeand we believe that truly
passive income is to yourfreedom and impact, as
compounding interest is to yourmoney.
In other words, a lot of peoplestart at the business not only
to build the wealth, make animpact, but also to have a
retirement or have someadditional ability to get
revenue passively, eventually,if they can, either stepping
away from the business, sellingthe business, and so we just do
(05:06):
this in an all in one, all inone kind of exit.
You know when they, when theygo to exit and we let's say
there's 10 million you have thatyou would have had six Now we
invest, let's say we make eightor 9% net of net of, you know,
fees on a recurring basis.
You know it's an extra 800,just 800 to $900,000 of passive
income versus if you only had $6million, let's say, after a 40%
(05:27):
tax.
You can kind of do the math onthat, and so that's really the
focus here, and so most of ourclients like to compound wealth
versus paying the tax.
Tom DuFore (05:35):
I can't imagine any business owner or someone a
founder that's at that stagecoming in and saying, well, I
would really prefer to make allthose tax payments if I can
defer that and help.
Like you said, multiply thatthat would be certainly.
We love that word here onMultiply your Success podcast.
One of the things that it mademe think about is for someone
(05:56):
that's thinking of this, ormaybe they're just thinking of
it hearing this when shouldsomeone start this kind of
planning?
Is this something they startafter the sale has begun, or
when do you advise that?
Brett Swarts (06:07):
Yeah, once somebody start in a capital
gains tax exit plan, what Iwould say you know, really,
there's no, it's never too early, but it can be too late.
Right, it's too late if you'vealready sold the business, or if
the buyer has removed allcontingencies, or if you don't
have the language in thepurchase and sale agreement or
the APA, the SBA.
We want to get it as early asbetter, and the neat part about
(06:28):
working with us is we don'tcharge anything to do all the
planning.
I mean literally all theplanning, the trust work,
talking with your legal team,your CPA, getting everything in
place.
We do that purposely, becausethe IRS has a rule that when you
have what's called constructivereceipt, which basically means
you're bound to sell it to thebuyer, then it's too late and
it's going to be a taxable event.
And so in this situation welike to say be early.
(06:51):
Yeah, where do most people findus?
I would say six to 12 monthsbeforehand.
We have those that will find ussometimes 30 to 60 days, where
they're under contract and weare moving at a faster pace to
get to know, like and trust oneanother and make sure that we're
a good fit.
So the earlier the better forthe planning.
What?
Tom DuFore (07:06):
are some things maybe a founder, owner,
president or CEO of a companyshould be starting to think
about.
What are the kinds of thingsthat they might need to be
collecting or having availableto start discussing that with
someone like you and your team?
Brett Swarts (07:20):
Great question.
I think the number one mistakethat a lot of entrepreneurs or
business owners make is theydon't get really clear on their
perfect life metrics.
They also don't get reallyclear on their family mission,
vision values for their wealth.
And so we always start with themacro and say, hey, what are
your family mission, visionvalues, what is your wealth
legacy, generational stewardshipplan and how is your exit going
(07:44):
to be a big part of that?
Or how is maybe keeping thebusiness and maybe not selling
being a big part of that andfiguring that out?
And so, when they can getreally clear on that, we wanna
avoid the death, the divorce,the partnership separation, the
things that cause sales, toforce sales, and we really want
them to be in a proactive state.
As we were talking before theshow a couple of years ago,
(08:05):
there were probably a number offolks who wish they would have
sold when the multipliers werehigher, when debt was more
readily available for buyers andcapital was flowing a little
more.
They could have maybe exited abetter multiplier.
And that's what we want to do.
We want to focus on what's theoptimal timing.
So what's optimal for you, MrSeller, and your family, and how
(08:25):
does that fit into this largerplan of the exit.
And so the question we ask, andkind of the exercise that we
can help anyone today, is writedown what matters the most.
And that last piece is reallyimportant because there's a lot
of things that matter, Tom, Like, look, I want to defer my tax.
Look, I want to be able to exitat a high price.
Look, I want to be able to getme out of debt, be diversified,
provide for my family, haveasset protection, have
(08:46):
diversification, have someliquidity.
I mean, we can go down thelaundry list, but if you say
what matters the most to you, MrSeller, during this season of
the clients that we work with,what matters to them the most is
number one truly passive income.
(09:07):
How can they finally get tothat fourth quadrant of the rich
dad, poor dad, where theirmoney is giving them time right
Versus them trading their timefor their money?
And so we clear on the number10, 20, 30, 40, 50,000 per month
or somewhere around there.
They probably have some passiveincome here or there that's
trickling in, but it's notsubstantial enough for them to
walk away from their businessnecessarily, unless they can
(09:29):
sell their business to furthertax and convert that into a
truly passive income plan andagain, we believe truly passive
income is to your freedom andimpact is compounding.
Interest is to your money.
And then we just build thatplan.
We look at the ROE return onequity that's currently valued
at your business versus yourcurrent cash flow that's active,
by the way and then we look atthe ROT right, which is your
(09:52):
return on time right.
How much time, blood, sweat andtears are you pouring into it?
Now, here's the reality.
I'm an entrepreneur, Tom.
You're an entrepreneur.
We love and we're passionateabout what we do, but at a
certain point, are we ready totransition?
Here's the beauty about ourstructured strategy you don't
have to be passive.
In fact, we have lots of youngentrepreneurs that are looking
for their next chapter and theyuse the trust as a funding
(10:16):
source for their next vision ortheir next mountain to climb.
And so you can be anentrepreneur.
You can be passive, you can beretired, you can be active.
It's not a one size fits all.
In fact, I had a client, Warrenand Catherine.
They're real estateentrepreneurs.
They own an apartment complexbusiness in Sacramento,
California, and they sold forabout 2.5 million right at the
peak.
(10:36):
It was great.
We deferred all their tax.
Their NOI was about $120,000.
We increased it to about$190,000.
But the beauty is their ROTtheir return on time went
through the roof because they nolonger have to work on the
property.
And that's what leads into.
The last one I'll leave here isROI, which is not just a return
(10:56):
on investment, it's your returnon impact.
And the beauty of this is theyhad two young daughters that
were 10 years old and theywanted to maximize their time
with the kids before they're 18.
Did you know, Tom, that 85% ofthe time we spend with our kids
is before they're 18?
That's their whole lives.
Our 85% as parents is beforethey're 18.
So they wanted to maximize that.
Well, guess what?
What happens when the kids gooff to college and get married
(11:17):
and all that kind of thing?
Well, guess what?
They're probably going to beentrepreneurs again, and that's
the beauty.
You want a structure and astrategy that can flex with your
life right Back and forth.
So I'll pause there, but thoseare just some of the things that
we help our clients through.
Tom DuFore (11:31):
I'd love for you to expand on this idea of selling
five years earlier versus fiveyears later.
Brett Swarts (11:37):
Yeah, let's break it down with this whole exercise
.
Let's say 10 million is yourmagic number, right?
If you had 10 million, earningabout 8%, it's about $800,000 a
year.
That's about, you know, 65,000a month.
Just to keep it simple, let'ssay that was your truly passive
income number, and five yearsago, you know.
Let's say you're in New York,new Jersey, taxifornia, you're
(12:00):
in these higher tax states.
We'll use a number of about 35to 40 percent of your gain.
Well, five years ago you couldhave sold at 10 million, but the
challenge was you go well,brett, I really need 10 million,
net of taxes, net of closingcosts, net of m&a advisor fees,
all the different things, andthat equals about 65 000 a month
.
So I need to wait a few moreyears in order to achieve that.
I need to sell for about 15million, just to keep it simple,
to net about 10.
(12:21):
So I'm going to continue towork really hard and increase my
EBITDA and really, you know,you know, get all this thing
dialed in.
But thank you, mr MA advisor,for the evaluation at 10.
I'll wait till 15.
And so well, fast forward.
The market has shifted right.
Maybe values are no longer 10.
Maybe now, values are now eight, maybe values are seven, maybe
(12:42):
AI is now attacking your wholeentire ecosystem and you're
fastly bleeding in your EBITDA.
And so it's now.
You're not in optimal timing.
In fact, the market a few yearsago was optimal.
Now here's the beauty if youhad our structure, the beauty is
you could have sold at 10 andthe trust could have net at 10
and it could have invested andthen now started to produce all
(13:04):
of this passive cashflow, whichis what you really wanted.
Anyways.
The 15 number was really justan arbitrary number in the sense
that you didn't care about 15,you just cared about the net 10
to get you to the $65,000 amonth.
And so what we're talking abouthere is kind of the ROT again,
the return on time.
What if today you could sell,defer the tax?
And now it's like a timemachine All of a sudden.
(13:26):
I don't have to wait anotherfive years of my life.
I don't have to wait forunoptimal timing.
No one knew for sure what'sgoing to happen with these
interest rates, but here we areright.
So you want to strike when theiron's hot and you want to have
a team that helps you to be ableto strike on the irons hot.
Now here's the flip side too.
The funds could have been intothe trust.
You could have diversified andthen you could start investing
and buying back into companiesthat have either had been
(13:48):
devalued or dropped in value.
You know, we call this going onthe offense right.
Once you get in a spot whereyou're debt-free, tax-deferred,
diversified, the funds couldliterally sit in money market
accounts S&P 500, real estatedebt funds.
We had one client actually sella car wash business $13 million
in San Diego.
(14:09):
Deferred all their tax, theirbasis was about $4 million.
Well, they invested a largechunk of it into Bitcoin.
Guess what?
Bitcoin was at $40,000 a coinat that point.
Now it's close to over 120,000a coin.
You kind of do the math there.
And they went into real estatedebt funds.
They went into some stocks andthey've been waiting for this
market to shift.
And guess what?
The real estate market hastaken about three years to shift
(14:31):
and now they're seeing land ata discount and they're gonna
partner with the trust to be anentrepreneur again to go build
car washes.
And that's the point we want togive you, the entrepreneur, the
leverage of timing of sale andthe leverage of time to buy
investments when it's on yourterms, versus it being dictated
by a big tax bill.
Tom DuFore (14:52):
It got me thinking about this, saying well, if I'm
talking to clients and advisingpeople that I'm working with,
sometimes thinking about, well,maybe selling sooner rather than
later provides you either thesame or better opportunity,
because I bump into this a lotwith clients that think, oh, I
need to wait.
Brett Swarts (15:10):
I know my valuation is, to your example,
$10 million, but I got to waituntil I'm at $15 or $20 so that
I can get down to this point,but it might take another 10
years to get there 100%, and theone thing that we can never get
back is time right, the time tospend the time with either our
families or the next businessventure, or whatever it might be
making a big difference, makingan impact.
And so, yeah, that's why weexist to unlock capital, to
(15:32):
multiply freedom and impact.
And that capital, in fact, isabout $100 trillion is the
estimate over the next five to15 years.
That's gonna transfer mostlyfrom the baby boomers who have
built these big businesses, whoare huge, you know, built these
big franchises right and havemultiple locations, and they're
looking at this and maybe theson or the daughter is not ready
to take over, or the employeesare not ready to take over, and
(15:55):
they're looking at ways todiversify, ways to exit and to
build a legacy.
Every single day, 10,000 babyboomers are turning 65 years old
in the US alone and there'sabout 80 million in the US alone
.
And the total net worth inAmerica, tom, is around 50%.
It's tied to high-end primaryhomes, private equity, which is
businesses, and commercial realestate, and those three asset
(16:20):
classes represent 50% of thetotal net worth and they're
going to be trading hands andthey're going to be trading
hands and shifting, and so we'rein this battle.
It's no longer just about cashflow, it's about tax flow, and
you've got to have a mindsetshift on this, otherwise what
you've built will be crushed by20% to 50% in tax, or worse, you
won't sell at optimal timingand the market itself will drop
another 20%.
And now you're playing catch upand who knows, that's not a
(16:43):
great place to be in when you'rehaving to chase the market when
you could have sold at a nicetime.
Tom DuFore (16:48):
I think you summarized it very well it's not
just cashflow, it's taxflow,and for someone now that has
this tax flow thought in theirmind, how can someone find out
or connect with you?
Get connected, learn a littlebit more about what you're doing
and how you might be able tohelp them?
Brett Swarts (17:02):
Yeah, thanks, tom.
You can go tocapitalgainstaxsolutionscom.
You can schedule a no cost, noobligation time with myself, one
of my team members, to see ifyou can be a good fit.
You can apply for that.
We also have a book calledBuilding a Capital Gains Tax
Exit Plan.
We actually wrote it with KevinHarrington from Shark Tank,
which is pretty cool.
He's in the book and also TonyRobbins, cpa, is in the book,
and it's basically my journeyfrom being a multifamily Marcus
(17:24):
and Mila Chap broker helpingpeople buy and sell investment
real estate and not learningabout it in time and really
failing my clients because wedidn't know about this strategy.
And then the 2008 crash andfast forward, learning about it
and then giving business ownerslike you know who's listening
today and real estate owners andBitcoin owners the opportunity
to build a capital gains XXamount we have to say.
(17:45):
Tom, spend five hours with usand we'll give you an extra 20
to 50% working for you.
Also, we can eliminate estatetax, which is a powerful thing
as well for those who have ultrahigh net worth above 30 million
maybe 15 million single and wecan eliminate that estate tax.
So you just want to startplanning today.
Don't wait.
Go tocapitalgainstaxsolutionscom.
Tom DuFore (18:06):
Fantastic, and we'll make sure we include that in
the show notes and make it easyfor folks to connect with you
and learn here about what you'redoing.
Well, brett, this is a greattime in the show.
We ask every guest the samefour questions before they go,
and the first question we ask ishave you had a miss or two on
your journey and something youlearned from it?
Brett Swarts (18:22):
Absolutely so I'm newly married.
This is back kind of the 2008crash.
Maybe your listeners can relateFinancially, flat on my back
broke, we actually ran out ofmoney.
I'll never forget a lot of thefriends and some of the family
was saying, maybe go get a realjob at like a bank.
But I was an entrepreneur witha dream in my heart to be in
real estate and commercial realestate.
It's 100% commission, no salary, no benefits.
(18:44):
You're making these cold calls,think about like boiler room to
help people buy and sell realestate right.
That's where I was a broker inreal estate, investment real
estate.
Yeah, I wasn't making it and Iwas newly married, baby on the
way.
It was really tough financially.
So I did what every real estateentrepreneur or real
entrepreneur does you get a sidehustle, and my side hustle was
Cheesecake Factory, right, andso I was selling avocado egg
(19:07):
rolls by night and nights andweekends and by day I started
working at Marcus and Millichapto try to keep the dream alive.
So I was working these two 60,70 hour weeks.
Then I started adding on AAUbasketball tournaments.
So I was kind of the bouncerI'd take the cash, put the
wristband on.
Then I added a hot dog stand,with a smoothie stand and with
(19:28):
selling all the stuff fromCostco.
I was running these little minibusinesses, if you will, and
trying to just keep the wholething on, so we flat out ran out
of money $5,000 I had to borrowfrom my dad and we moved into
my brother to a small condo withour first baby daughter.
That was also a humblingexperience.
I did that for a two yearperiod of time, but guess what I
you know it actually solidifiedthe tenacity and the grit and
(19:51):
the resilience and what wasreally valuable for my wife and
I for our future, and so Ialways, always shared that story
.
That was a huge miss, hugechallenge, but it obviously
helped to create the grit neededto be an entrepreneur.
Tom DuFore (20:04):
So I also really see it as a make as well.
Oh, fantastic, thanks forsharing that story.
Wow, let's talk about a make ortwo, or a highlight you'd like
to share.
Brett Swarts (20:12):
Yeah, I would say the biggest thing would be going
national right and stoppingplaying so small, meaning just
locate all this, really the kindof the profit who wasn't
accepting his hometown.
I would cold call people andtell them about this tax
deferral strategy and they werelike, who are you?
You're just a real estatebroker.
Who are you Like?
You're not a CPA, like I don'tknow.
Call me when you close somedeals, I don't know if this is
going to work.
Too good to be true, lose mynumber hang up on me.
(20:34):
And then I just kept pressingthrough and I would get some
meetings and some success.
But it was very small and so itwas when we went to the podcast
actually YouTube and we wentnational with what we had and
all of a sudden we have clientsyou know, across the country now
, and so I would say the big,the big make, was the ability to
jump onto other people'spodcasts people who come on my
(20:55):
show and to really spread theinformation that can change
people's lives and focus ontransformation.
So I would say that wasdefinitely the big make.
And now we've closed, I think,over a half a billion dollars in
real estate and deferred salestrust transactions and we've
also done some Delawarestatutory trust and we just have
a big, amazing client base thatare like family, so that would
(21:17):
definitely be the biggest make.
Tom DuFore (21:19):
Let's talk about a multiplier.
The name of the show isMultiply your Success.
So have you used a multiplierto grow yourself, personally,
professionally, or any of thebusinesses you've run?
Brett Swarts (21:27):
Back to the kind of the concept of, you know,
truly passive income is to yourfreedom and impact is
compounding interest of yourmoney and the multiplying effect
of that.
So I would say the biggestthing personally that I did to
multiply was jumping into aactually a men's Bible study
when I was about 24 years oldand it was different than the
traditional Bible studies.
(21:48):
It was more like discipleship,leadership and the Bible and it
was the practical application.
It was about 25 guys and I wasthe youngest one and there was
attorneys, there wasentrepreneurs, there was doctors
, there was construction workersI mean anything you knew, name
it like all across and I wasthis new guy and I had a chance
to just be, you know, encouraged, prayed for, discipled, and I
(22:09):
did this for about a 10 yearperiod of time and this is where
I really feel like growing up,my parents were divorced so my
dad wasn't really around, didn'tpay child support.
It was tough.
He was still a greatentrepreneurial dad, taught me a
lot how to work hard.
I love my dad.
We're good things.
I love my dad, but he did somethings that weren't so great
right, and my mom, healthchallenges and all these
everything.
So finances and wealth arealways kind of a car.
(22:35):
You live with my grandma allthese things Again, both worlds.
And so I go to this men's Biblestudy.
It was cool because I had achance to.
I played sports in college,basketball in college and high
school football, all this stuff.
But this is a chance to reallydig in and I felt like I had
almost like 20 mentors all atonce all rooting for me, all
encouraging me.
This is before I was marriedand I feel like it was almost
(22:56):
like an initiation from likebeing like more of a boy
teenager into a man.
So I would say that was amultiplier effect.
Married now, 16 years, you knowthey helped me, encourage me to
get married at that point.
We have five children.
That's definitely been amultiplier, yeah, and now now
fast forward.
It's a God's blessing everysingle day.
I'm just so grateful for it.
Tom DuFore (23:17):
Wonderful.
Well, the final question we askevery guest is what does
success mean to you, Number?
Brett Swarts (23:23):
one is identifying your unique gift that's been
given to you, I believe, by God,and using that gift and, in a
sense, multiplying or maximizingthe potential of that gift.
So knowing the gift, believingin the gift and maximizing the
potential of that gift.
So, knowing the gift, believingin the gift and maximizing the
potential of the gift.
The next part of this successis impacting as many people's
(23:44):
lives as you can with the giftfor good right.
And then you take all of thatpiece, those three pieces, and
knowing and believing thatthere's a bigger purpose for
each of our lives and that youknow God's given this short time
on earth to make this impact.
To me that equals success.
But if you don't know the gifts, if you're not maximizing the
potential of the gifts, ifyou're not using it to maximize
(24:04):
the amount of people you canimpact and, lastly, if you're
not believing that it's here fora higher purpose, I think it's
very hard to find success.
To me, that's success.
Tom DuFore (24:12):
Wonderful, brett.
Thank you for sharing that and,as we bring this to a close, is
there anything you're hoping toshare or get across that you
haven't had a chance to yet?
Brett Swarts (24:22):
Not that we haven't already talked about.
I would just say, as anentrepreneur, you are the
backbone of the economy, of theUS economy, creating the jobs.
I'm always grateful to be ableto serve and be a part of the
entrepreneurial world, right andcommunity.
And so for what, tom, you'redoing, I'm just grateful for the
opportunity to share and maybebe a big or small part in
(24:44):
someone's journey on an exit ortheir entrepreneur journey to
grow.
So just grateful to be here.
Tom DuFore (24:51):
Brett, thank you so much for a fantastic interview
and let's go ahead and jump intotoday's three key takeaways.
Takeaway number one is when hesaid it's not just cash flow,
it's also tax flow.
I thought that was a fantasticsummary of how to start thinking
about tax and tax flowsituations at the time of exit.
(25:13):
Takeaway number two is thatwhen Brett talked about it's
never too early to start acapital gains tax exit plan In
fact, the sooner the better.
If you're thinking aboutselling in five years or 10
years and that is on the horizonstart thinking about it.
And I thought it wasinteresting Brett said he
doesn't charge his clients orprospective clients for the
(25:35):
planning that he helps them with.
Takeaway number three is whenBrett talked about, as an owner
and the founder, that you needto get really clear on what your
family mission, vision andvalues are post-exit, what is
most important to you, and getvery, very clear on that.
And now it's time for today'swin-win.
(25:58):
So today's win-win comes fromgetting clear on what you want.
And I really want to emphasizethis point again when Brett said
you have to get clear on whatmatters the most, and I put the
most in big, full capitalizedletters to say you have to get
clear on that.
What matters the most?
And I put the most in big, fullcapitalized letters to say you
(26:19):
have to get clear on that, whatmatters the most right now, so
that you know where to spendyour passive time, passive
income what are you doing thisfor?
So that you can look at yourreturn on time and you can look
at your return on equity and youcan look at your return on
impact.
Once you are clear on whatmatters the most, it is going to
(26:41):
help you better understand whatkind of income you actually
need, how to structure it, whereyou're going to spend that time
, money and resources, so thatyou can serve and support those
things that matter the most toyou.
And so that's the episode today.
Folks, Please make sure yousubscribe to the podcast and
give us a review.
And remember if you or anyoneyou know might be ready to
(27:02):
franchise their business or taketheir franchise company to the
next level, please connect withus at bigskyfranchiseteamcom
where you can schedule your free, no obligation consultation.
Thanks for tuning in and welook forward to having you back
next week.
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