Larry has over three combined decades of award-winning franchise and business ownership, managerial development and advisory expertise, Larry has helped 1000s of people self-fund, manage and strategically exit their business. Larry is the recipient of international and national awards, including Entrepreneur of the Year Award. He has been a frequent speaker, instructor and trainer for numerous organizations, including universities and associations with their respective seminars and conferences. He is one of our go-to people for funding a new business, a new franchise, and for a good exit strategy.
Larry’s background is in accounting and finance, he has owned several businesses himself, in this new economy, Larry says: I believe there’s a major paradigm shift happening. It’s not enough to build wealth. Nowadays, the successful entrepreneur has to understand how to accumulate, accelerate, protect wealth, and mitigate taxes. And if you don’t use the tax code, and wealth protection strategies to do that, in this new economy, even if you’ve accumulated a lot of wealth, that wealth can be taken from you with health care, liability, risk and other things. And so, I believe the best long-term strategy for a successful entrepreneur is to use the tax code. And these strategies to help you do that, if you want to be successful, do what successful people do. Wealthy people have the advantage of hiring people to tell them things and give them access to programs that most Americans don’t have access to. And so, the reason Greg and I work together is we’re focused on not just helping somebody get into a business, but helping them understand how to structure a business, so that when they exit the business, they’re not giving decades of wealth to some tax collector or some creditor, and that’s what we’re here to discuss today.
Larry often encourages a combination of programs. You’ve got to work with somebody that you know has several options to help customize a program to maximize your ability to get the necessary capital to acquire the type of business you want, but at the same time, minimize your exposure to overhead and other things. At Benetrends they use an assessment program to determine what your financial reach is. They look at things like your credit score and your post close liquidity, that’s a major issue with lenders today, do you have enough money after the business is up and running to pay for personal living expenses, out of pocket expenses, not just to pay for your rent and utilities, but also run the business with working capital?
Larry and Benetrends are a one stop funding resource. They do all kinds of funding, SBA micro loans, unsecured back lending, ROBs (rollover for business), RAPs (Roth advantage plan). People are very excited about programs that allows them to use their retirement funds penalty free. You can use those funds either alone or in combination with an SBA loan. The Robs and the Raps programs now have become the fastest growing forms of funding in the country. There are two programs. One is called Rob’s program or the Rainmaker plan. The that was introduced, actually in 1982. In the late 1990s, and in the last 20 years, a new product, called the Rap or Roth Advantage Plan has exploded in popularity, it’s preferred up to 10 to one by CPAs over the Rob program. This program has a very distinct benefit. With the Rob’s program, you’re able to use your retirement funds, let’s say you’ve got $100,000 in your retirement funds, you can use that money tax penalty debt free to buy a business in either alone or in combination with an SBA loan. The Rap program converts the money to a Roth vehicle. You create a Roth vehicle where the business is owned by the Roth retirement plan.
Traditional IRA is only protected to 72 years of age. At 72 years of age, we have to do what’s called a required minimum distribution RMD. When that happens, the money is forced out of the protection of the retirement plan into an unprotected checking or savings account. Larry’s concern with that is that it’s going to happen sometime in the future when tax rates may be higher. And it’s also happening at the very decade of your life, where your health care costs could literally increase tenfold.
So, at a time of your life where these risks are growing exponentially, traditional IRAs don’t provide the long-term protection that a Roth does. And the other benefit for all us parents out there. If you have a traditional IRA, and something happens to you, according to payscale.com, children are often at their peak income, their peak tax rates, when the parents pass away, they may inherit a million dollars from their parents, you’ve literally pushed your kids into the highest tax bracket, they can lose half of their inheritance. But money in a Roth is not only protect you from future creditors, but it goes directly to the children and bypasses federal and state tax collectors, the children often end up with double the net inheritance.
A lot to consider, I know! I used the ROB’s program to start my business. Please reach out to me for an introduction to Larry and the ROB’s and RAP’s programs.
Greg Mohr is the Wall Street Journal Best Selling author of “Real Freedom, Why Franchises Are Worth Considering and How They Can Be Used For Building Wealth”, and has managed restaurants, been a micro-electric circuit engineer, owned and operated dry cleaners, storage units, rental properties, and franchises. Greg has helped hundreds of people invest in a few hundred franchise units. Greg is also the podcast host of the Franchise Maven Podcast. Contact Greg at 361-772-6401 or greg@franchisemaven.com