#116 with Kelly Erb - Tax Expert Breaks Down Trump Taxes and Big Businesses Ran by Few People

Yeah. I feel like I can rule the world, I know I can be what I want to I put my law in it like my day song On the roadless travel never looking back Okay, sweet. So I'm here with uh TaxGirl. I'm here with Kelly Herb.

Who has a great handle and domain. I gotta give you credit, you branded the hell out of yourself. So you have at TaxGirl on Twitter and you have taxgirl.com So already you're my kind of person for having this kind of pretty interesting uh Self branding plus Just being you know, most people who understand taxes don't understand social media and content, and you seem to do so. So

Am I am I right in in that assessment? I I hope so. Thank you. Uh for the way words. Yeah, no. I actually started out Uh, I think pretty early on in the uh kind of the tax writing business. I was an attorney. that just started writing about tax and at the time I think a lot of people were writing really technical pieces. And I didn't think that made sense. So I was trying to be more accessible. So that's kind of how that evolved.

And when I'm on your Twitter right now, it's showing me At tax mama and at tax tweet as people I may like. Are these your rivals? Are you is it tax girl versus tax mama? No, well, so first of all, Tex Mom is awesome. Um that's the reason she's amazing. Um No, actually what's really cool about Tex Twitter. Which is our our little sub Twitter is that they're really great people. So um we're not we're not so much rivals as we are colleagues. Great. Okay. I love it. And you had this

Forbes article go viral recently that was uh I'll read the title. It was The Ordinary Taxpayer's Guide to the Extraordinary Story of Trump's Tax Returns. And I was looking at Forbes and basically I would say like you've been a contributor and and I would say your your normal post will get, you know, thousands of of reads of views, I guess. Uh it shows it on the site. And This one has over 200,000 views. So this one definitely uh you know hit a nerve, which I'm guessing you kinda had an inkling it would, or did this exceed your expectations? So the thing about tax coverage that's really tricky is that when you talk about views,

If you were to look at my articles in March. Yeah, it it's not unusual for one to get A million or two views, right? But for this time of year, people don't talk about tax in September, just as a general rule. Like, you know, people are over it by now. Um, so that the coverage doesn't usually start up again until like December when people are thinking year end. So yeah, to have a lot of uh views on something that doesn't directly impact you as a text story um is is pretty uh unusual, I'd say. I did expect some

coverage of it. I think the thing that I got a lot of um impact on social media, because actually I think it's probably been shared more than it's been read. Um, is that people people were interested in the fact that my that particular article is more about the mechanics and not about the politics. And so I think that that was something that kind of um caught a lot of people's eye'cause I think right now A lot of people feel like the information that they're getting is just so filtered. that they sometimes just want to know the

You know, they just want to know the stuff. They don't want to know all the extra and they don't want this perspective. This wasn't Trump is evil or Trump is the best. This was hey, here's how you should think about this information that was released and what you can and can't draw from it, which I thought was a good kind of like Just the information part that you're talking about. Okay. So yeah, this got a bunch of views. It's like, you know, selling a Christmas tree in May. Uh you sold a lot of Christmas trees in May random. So I think that's the that's what's interesting about doing this article, not during tax season. So I think there's two things that I wanted to talk to you about. Number one was You know, y you say in this post you're like, you know, I'm not gonna kinda comment on

You know, this is not an opinion piece on you know, to give you my take on Trump's tax returns, because I haven't seen them. And you should go read the article. Uh so so I do want to get your opinion on it. Uh so even though in this thing you said you don't want to talk about it. I am curious, like what was your what was your personal reaction when you uh when you read the news? the the New York Times article.

So one of the things that's really interesting is if if you've been following the the Trump tech story at all, and I've actually written about it as far back as two thousand and like fifteen. Um You know, th a lot of this information is not new to us. I think the thing that's so extraordinary about what the Times did. Is they have packaged it. All at once, right? So I think a lot of the information we've been hearing bits of this for, you know, years. A page or two leaks out and somebody talks about it on Rachel Maddow or people of uh, you know, Michael Cohen talks about it in his book. I mean, a lot of this information that we're hearing isn't new.

Um, I think but again, I think what's extraordinary and what the Times did is they took Other information. And that's what I think sometimes we lack, right? As just readers. You don't know if somebody if I were to give you my 1040. And you would just look at it in a vacuum just for this year, you wouldn't really know A lot about me. You might could tell how many kids I have, where I live, like there are things you can glean from a tax return, but you might look at my business. What if my business last year was phenomenal and this year it's not? You're not going to know that from that one tax return. And so I think that what the Times did and looking at so many years, and then also looking at additional information and comparing it to FEC filings and SEC filings.

It was a lot of information that they digested for the reader, which I think is really something that we haven't seen before. Um and you know, to to the point about A lot of people have said, Well, why do we need to see it now? Um You know, I don't know that that's a personal decision on your part, but I I will say that usually when you are evaluating presidential candidates, you like to know what the economics and what the the finances are, not just in terms of are they successful or are they not, but you know, where are their business interests? What kinds of money do they owe? You know, who do they owe that money to? And um we've seen that from other candidates and we haven't seen it from this president. And so I think that's what's really

Um, you know, both interesting and extraordinary about what the times did. And were you surprised, okay, you know, the kind of the catchy headline was Trump paid seven hundred fifty bucks of federal income taxes or feder yeah, feder federal taxes in that year. I forgot which year it was twenty sixteen, maybe. Um twenty seventeen, something like that. Was that a surprise to you, or you were like, No, that's not shocking.

No, actually the only I will say the only thing that I've read That actually truly Triggered a And again, this is probably from a tax geek standpoint, but truly triggered a hmm from me is um you know we've known I mean the the business loss is nothing new, right? We've known this. Um good years, bad years, we've known this, we've known there's a lot of bad years. Um you know, no matter what has been portrayed, we knew there were a lot of bad years. Um, but I think what was really interesting to me is when you look at the refund piece, which is kind of what everybody's talking about right now, there was one year in particular where uh

The president was able to take advantage of Obama era. Um bailout provisions. To extend what's called carrybacks, which is where you can recover if you have like a really good year when you're and that you've had a couple of bad years. Um, you can balance those out so that you can either lower your tax bill going forward, or you can get a refund based on years previous.

The fact that he did that isn't the part that I found interesting. What I found interesting was um he was entitled to a large refund which she got in twenty ten, according to the times. What the seventy-two million dollar one. Yeah. Yeah. And so that's based on several years from uh he got a refund based on some losses to recover from years that he had done well on the apprentice. So he had paid some taxes in oh five, oh six, oh seven, oh eight, and then he has a bad year. He can he can kind of uh apply that bad year backwards and and get a refund. So

And and that part didn't didn't surprise me either, but the part that I found really extraordinary in the when I was reading is that um He uh that went to a joint committee for review because the number's so big. That's actually by statute. Once refunds hit over two million dollars, they go to a committee. So that people are like, hmm, let's look at this and make sure it's legit, right? So that's what happened. Um, and that was that was kind of the crux of the audit that the president kept talking about every year when he says he couldn't release his returns because they were on audit. Now we know that that's What triggered The audit was that that year.

Um, because that's separate from the piece about, you know, presidents get uh audited every year, because he wasn't president. Excellent. This is unrelated. Um But when you when you get audited

Uh you know, sometimes that can go on for a while. But it's extraordinary. For it to go on this long. And um according to the Times That's because

They were unable to reach a deal. And uh the president kept consenting to extend the time to assess, which is like a um a move that you know you can do for all kinds of reasons. But the thing that's interesting to me is they say that in twenty fourteen, at least the time says. But in twenty fourteen they were close to a settlement. And that's what I found extraordinary because as a business person and I run my own show as well. You know, you don't typically like to have that kind of uncertainty, especially on the on the financial side.

go on for that long, right? So it's it that was the piece I have to say out of the entire report and the follow up It wasn't the losses or the depreciation or any of that. It's the the idea that as a business person, you would be close to a settlement in twenty fourteen and then six years later still be hashing that out. And you know, we don't know why it fell apart. We don't know the details. I'm not gonna speculate, but I will just say again, as someone who runs my own show, If I knew that I might have to pay back a hundred million dollars.

Um, I think I would I think I'd want that resolved sooner rather than later. I see. Okay. Uh all right. So that's sort of sort of the Trump. Tax side of things. And Uh the other piece of this is just

We have a lot of people. Um that listen to this, they have their own businesses. That You know, taxes tends to be your biggest expense the more successful you get. Um Because it scales up with success in many ways. And uh I know for myself, I've spent the last six months trying to figure out.

How do I reduce my own tax burden? Um, because you know Uh it's it's large and I want to be smart about it. And I started from a place of completely zero education around it, and now I'm like, oh Can I go buy a building, put solar on the roof to get some credits, depreciate the bill? You know, I'm trying I'm trying to think through what are all my options here. Um You know, should I be living in the Caribbean type of thing. And um

And so I just wanted to get from you kind of like I don't know, is there a one oh one? Is there a dumbed down uh version of it that you could sort of walk people through of Things that they should be thinking about or looking at if you are a business owner, um And you're trying to to think about uh well trying to think about w tax strategies that you think work. uh work well.

So well, first of all, there's two things. So the first thing is that um I I kind of Just to tie back to the Trump piece as well. You know, as you mentioned, taxes are a big part of being a business owner. It's rare that you're gonna have a seven hundred fifty dollar tax bill. I mean, no matter what you do over and over and over. So I think the one thing people need to think about is not to compare their tax liability to other business owners because your circumstances are very different, right? Even if you have two website owners, there, it's still gonna be very, very different what you do, how successful you are, how you spend your money. So the first thing I would say is just be careful about comparisons. But then on one of the other things that you said, which I thought was really interesting, like you mentioned solar credits.

I'm like, yeah, like as you're talking, I'm like, absolutely, those are things you can do. Yeah, because there are definitely things that you can do depending on the kind of business that you have that will reduce your tax liability, but you shouldn't, as a business owner, be too quick. Two Focus on lowering your taxes because as a business owner, you want to maximize your profits, right? Not necessarily just focus on taxes. And a lot of times to lower taxes, you have to spend money. So you want it like those solar panels, right? So you need to figure out is that gonna be a return on investment that makes sense? Am I gonna earn enough tax credits? To make up for the outlay of the funds in the beginning. And I think that that's sometimes where people get stuck because they start thinking to themselves, I'm gonna buy.

a car for my business because somebody told me if I get a car, I can write it off. I'm gonna buy a new printer and a third monitor, and they start adding all these things because they're deductions. Expenses. Yeah. Yeah. And I'm if you could see me, I'm doing like little air quit. I'm like Um, but those are also spending money. So you shouldn't get so lost in the idea that you want to Lower your tax bill.

That you go down the road of spending money, what you should do, and this is I think where you were going, is that you should think of things that will make your business better. that are also tax beneficial. And that's where I think people get sometimes confused. You know, does a third monitor make your life easier? If it does, then that's a really smart expense because it helps you be a better business owner. And it's a deduction. So that's I think my my big takeaway would be to think of areas where Where if you spend the money to get the deduction or the credit. You're also getting a

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Okay, so uh if you like this, you can get more there. So um so I'm a big fan of this rule called the eighty twenty rule. And the eighty twenty rule, for those who don't know, is basically You know, how do I get eighty percent of the results with twenty percent of the effort? And if you look at Any project you do, it tends to be that eighty percent of the outcomes come from about twenty percent of the inputs. Um

It's this common pattern you'll see if you if you invest in your a venture capitalist, you invest in in uh portfolio companies, it will tend to be that 80% of your returns will come from 20% of the companies. So I'm curious, Kelly, is there a eighty twenty? If you were um If you're talking about, you know, if you're if you're somebody who's looking for What is the eighty twenty? What are the twenty percent of efforts I would take or

Um You know, what are the first few things that come to mind when you when you're talking to somebody about their tax strategy? that if you you can't learn the whole tax code book. But if you really just looked at these, if you focus on this f these handful of inputs, you can kind of get uh a reliably large chunk of results from it in terms of um You know, being smarter about your taxes. What comes to mind if you're talking to a business owner? What where do you point them to first? What's kind of one, two, and three?

So I think first is um business expenses, which is something that that people are talking more and more about right now. Um and they can be, you know, office supplies, they can be new cars. They can be lots of things. But I think that one of the things it's funny because when we when we talk about taxes, a lot of people assume that um you know people over deduct. This is I think a myth in especially amongst business owners. I find that business owners are so worried. about being audited. that they actually underded.

And and to qualify though, for business owner, you're referring to L C or can that include Uh C Corp as well. So I it all of them, I think. Um I think LLCs, I think but I I think especially on the LLC and the sole practitioner. So somebody who is filing like a schedule C on their tax returns. Because I think when you have a corporation and I have I have an actual corporation as well. Mine's an S, but still um when you have a corporation, I think that you you think about things a different way in terms of how you separate home and business. When you are a smaller entrepreneur, maybe you have an LLC or you're filing on a schedule C.

I think you the fear, at least amongst my clients, the fear is a lot greater because there's more it feels like there's more at risk, right? You can You could lose your house if something goes wrong, as opposed to just the assets inside the C corp. So I typically talk about um LLCs and pastors and then and schedule Cs'cause those are the most common probably And if you throw S Corpse in there about eighty percent.

But not a lot of people anymore do sea quartz just'cause of the um The uh There are actually tax disadvantages and more tax training required. If that makes sense. Yep. So but yeah, like a business person, I'm thinking somebody who owns their own company again, usually as an LLC, like they use it as password pass through because that's an easy way to do your taxes. And you talk about expenses, that's another example. Something if you're a a single member LLC, for example. Just by ticking a box, you can actually eliminate an entire tax return, which saves you money because you don't need

another, you know, step along the way. So you can eliminate An extra return. So I think a lot of times us business owners, again, especially smaller businesses, worry a lot more about because they're looking at the numbers a lot. I think that people who are more involved in the day to day, they're looking at the numbers more. Um, and so they're worried, they're they're they're the ones who are wondering whether or not that printer, because they also use it to print out their kids' homework, really was a business deduction, so they don't claim it. So in terms of what I would say yes to, I would say look at the ways you spend money and see if they could be recharacterized as business expenses, because I do think that. more people under deduct than over deduct. I would I would imagine and Sean, what do you think that most of the people listening are C core people.

Or it'll be a mix, right? So anybody who's kind of venture backed will be C Corp, but I think because of the the issues with transfer. Right. But I think for the majority of listeners, I mean, of course there are venture back founders listening to this, but I think the most most people are I own a roofing company, I'm a consultant, I have a agency, I Um, you know, whatever. Like I I have an e commerce store and those will not be C Corps. Typically. Yeah, so uh can you

Kinda quickly what the A you kinda gave a good eighty twenty I mean you basically you said that most people under Deduct. What about for C See folks.

Well thing is the the difference is, and again, this is uh some of its semantics, I understand, because it's really sort of all the same pot of money, although my Corporate lawyer husband might argue with that characterization. But when you have a C Corp, it the the difference in separation is a lot more, right? You typically don't use your personal credit card for your C corporation, you're gonna have the C corporation credit card. Um, even if it's in your name. So even if it says Kelly Herb and then it says Text Girl on the bottom, it's still probably registered through the corporation. It's a lot more tricky When it's an LLC that you run yourself, maybe you're paid as a consultant or a freelancer or gig economy, and the money comes to you directly. Um, I I think that that's where kind of the difference.

where you see the difference because it's a lot if you have an American Express card that you only use for your C corporation. You know, they're and you buy things in the name of the corporation. The separation is a lot more apparent. So when you go to put things on your tax return, you see, here's the credit card. Now I advise my other business clients who are in LLCs or schedule Cs, solo practitioners, all those folks, partnerships. To also keep things separate.

But I do think it becomes a lot more tricky, especially now in a COVID world, right? Because a lot of us are working from home. So all of a sudden, you know, I I have a a microphone set up in my office because that's the work that I do. My husband, however, hasn't been able to go into his office on a regular basis. So now he has one too, even though that wasn't his his deal. So that's where I think it gets tricky. I think it's where when things kind of overlap between home and business, you know, how do you how do you draw those lines? And I think that that's where when I say that I think C corporations probably deduct more reliably than other Kinds of businesses. I

I think that's sort of where where I'm going is that I I I I think it's that when there's not as clear a separation, it can sometimes be really easy to say, Oh, I I don't know. I I ride I I drive my car for home and business. I'm just gonna say it's personal rather than deducting those miles. But if the if the company was a company car Of course you're deducting it. So I think that that's where you see kind of the the shades of gray.

And um So Kelly, let's say uh Here's my experience. So I have uh I've had people who just kinda like do the company books. Uh have an accountant. who, you know, d helps me with my taxes every year. I've done TurboTax on my own in p in prior years.

Uh, what I really want is I want somebody who I could say, hey, I'm paying a million dollars in taxes in twenty nineteen. Um, how do I not pay a million dollars in taxes in twenty nineteen? And I want you know, who's Trump's guy? I want Trump's guy to come to me and basically be like, Oh, here's what you need to do. You need to, you know, blah, blah, blah, blah, establish some domicile somewhere else. You need to buy this piece of heavy machinery and you'll get paid for it every month, plus you're gonna be able to write it all off uh for this this year and next year we'll do something else. Where do I find that person? Is that a tax strategist? Is that uh a pipe dream and uh do I have to be ten times richer than I am today? What should I do? So so it could be your accountant, it could be a tax planner, it could be a tax attorney like me. Um, I I think that where people, especially in when you're getting started in business, kind of fall down on that is that you don't want to spend a lot of money, right? So you do the turbo tax, you do the accountant, and what you do is

You see that accountant one time a year. You see that accountant in March or April, and then you never see that person again. That's kinda like going to the doctor when you're sick. But then never going for anything else. Like you've had a you know, you're you've had a cough, but you didn't really want to look at it because it's not a full blown cough yet, and you're thinking you'll get it looked at eventually.

That someday isn't a good thing to do. It's the same kind of thing with business. You know, the the person who knows who sees your books. probably has a really good idea. Of areas that you could possibly get a better deduction, you could re-characterize into a credit, you might qualify for a deferral. They might have all kinds of suggestions for you. Um, but if you're only seeing them when you're handing over your data and signing your return.

You're not really getting the benefit of that. You should at a minimum be meeting with your tax person once a quarter. Um, and that let them look at your books and say, you know what? turns out that because of COVID and the CARES Act. You may qualify for P P P money.

Which is the paycheck uh paycheck protection program, which also not only for people that had employees, but also for self-employed persons was applicable. That money was a loan, but it was a forgivable loan. So it's tax free to you. So it's income tax free. You could have gotten paid To keep running your company during COVID.

and not have to pay that back. You might not have known that or whether you even qualified for it. without talking to your tax person because you're not gonna get that in turbulite tax. And so I think that when you say like Who's Trump's person? It's not that he has a person, it's that he has a team. He has accountants. He has an accounting firm. I think it's Masers. He also has uh tax attorneys. They um I happen to know one of them is.

William Nelson,'cause I always remember that his tax attorney was Willie Nelson. Um so there's there's lots of um you know he has people and uh I think that that's sometimes where business center skim. because they don't want to pay for people. But just like any other thing, like you talk about efficiencies and and how you can spend money to to get a benefit.

those that people, that team could maybe help you. Figure out strategies. Think about it actually to Sam's question earlier. Should I be a C or should I be an L C? Does it make sense to you know? Again, generally a C corporation is less tax advantageous, but the reason people do it is because they're uh like you mentioned venture, they're gonna sell or they have. Um, foreign investors like there's reasons why that might happen.

But if that's not you, if you're listening and you are the roofing company that you mentioned. Maybe you want the LLC. I mean have somebody give you that information. Sean, do you know what QSBS is? I do, but I love For Kelly to say it better than I will. Yeah. I would love that as well. Kelly, and here's how I

Uh I mean, this is how we've been thinking about it. Yeah, I mean basically uh you have uh as long as you own uh small business stock For four years. Five years. You You Don't have to pay federal

Uh capital gains tax up to ten million dollars. Uh of ten million of the gain. Correct? Well, I mean, sort of. Um, there's a lot of roles. Um and it's actually a relatively it's funny, it's uh in the in the tax world is actually a relatively new role. Um, because it's only been around since the nineties. So uh that that actually makes it a bit of a of a new role. Um, but yeah, so it basically allows you to re characterize

um stock that you have um so that you can get a tax benefit for it. And it only applies to small businesses. Um, the the QSBS part of it, obviously, is qualified small business stock. Um, so uh, but you have to be a C Corp. for that, which is I I guess where you're going with that. So there is uh ways to uh it is a way to reduce your tax liability if you want to go you know, down the C corporation route. Yep. I have friends who have uh

done this and it's amazing and you you just look up the rules of if you qualify or not. Uh you don't have to do anything in advance. I think you do it sort of at the end. Um when you do have that that those gains. The other thing I thought was interesting. There's the last thing I wanted to ask you about Um I had heard the story that Um there's this guy, Peter Teal, he was the first investor in Facebook. He was the former founder of PayPal. And that his investment he put five hundred K into Facebook and he put it in

through like an IRA or something like that. Like he's been investing out of a retirement account. Um so that his gains in Facebook were tax free, essentially. Um, do you know about this at time? Ax deferred. Uh yeah. Um so I've had people do that with our company.

Through IRAs. Yeah, so I think it was probably I'm guessing a self directed IRA is my is my guess. Um and yeah, so and there's actually it's interesting because I um I haven't done it as much right now because they those kinds of pl plans Have been under attack. from the IRA because a lot of the sorry IRS because a lot of them were um perhaps being used in ways that they weren't intended to be used. But I actually used to represent a lot of folks who did that with artwork.

Um they did um and real estate. That was also uh self-directed IRAs were being used. It was um art and and being funded by art and real estate. Um, but what you're talking about is when you have a retirement plan. Um and the reason I I jumped in and said tax deferred, not tax free. Um is because when you have a retirement plan, the growth inside the plan isn't taxable to you until you pull it out. Uh, and so you can absolutely put certain kinds of assets inside the plan that might be appreciating quickly. Um, and it doesn't even have to be your company. It could be something like Amazon, you know, if you had bought Amazon back in the day and it was in your

retirement account, it doesn't get text to you as it grows. It only gets text to you when you take it out. So it is a really uh good way to Invest long term. Now, where it gets tricky is like when you mentioned if you're gonna be there are there are rules and this is where the IR IRS uh is looking. Um, you know, there are rules about the kinds of assets that can be contributed, whether or not there are other people in your company and what kinds of contributions they're also making. Um and then you have to be careful about um exchanges, like whether or not you're exchanging one asset inside the plan for another. So there are a lot of rules that uh govern them. But yeah, they're absolutely people are also doing this with uh crypto, they're doing it with gold. Um there's a lot of you don't have to have a Vanguard account to to have a retirement account. There's absolutely ways that you can

Fund them on your own. And again, the the particular thing I think you're referring to is it's called a self directed IRA. Gotcha. Okay, well Kelly, this has been great. Uh appreciate you coming on and Drop in some tax wisdom on us. Uh as you can see, we are pretty novice. You know, what's b what's before a white belt. Like we're we're just f signing up for the free seminar right now. Uh we we don't even have our white belt yet. But uh I appreciate you coming on and I love, I love, I love that you took expertise in one place and then build an online presence around it. Like if if I was gonna learn one thing from this, it actually wouldn't be anything about tax. It would be about

Wow, look at this. A tax attorney created an online brand around tax girl. And I've seen doctors doing this too, and they're making YouTube channels breaking down sports injuries and getting millions of views. uh by being a doctor who creates content. And I think that there will be more content creators who are you know specialists and professionalists in other like verticals that that do this. And you're a great example of one. Thank you. Appreciate that. And if I could leave one piece of wisdom though, just uh would be absolutely kind of going back to the thing that you mentioned before, is just if you have tax questions, whether it is a website or whether you go to YouTube, um, it pays to get good information. Um and no matter how you consume it, because I do think that using those kinds of strategies,

is what can make you successful. Cause again, you don't want to focus on paying the least amount of taxes, you want to maximize your profits. Right. Yeah. And free tax advice is expensive. Absolutely. Okay, sounds good. All right, Kelly, thank you so much. Thank you.

Sean. Okay, I've got something I want to ask you about. Yeah. Okay, so I w was thinking about this

course thing we're putting together. There are a significant amount of companies that look like they are one thing on the outside, but behind it, it's just a bunch of people doing all the work. And I wanted to give you three examples. Go for it. The first is I found a website online that you pay a hundred and fifty dollars and you get a dog a a cartoon dog canvas.

And so what you do is it's like I've and I made a website to test it. All it is is you upload a photo of your dog, they send it out to like Fiverr.com. They get the the cartoon made. For five bucks and then you can get it put on campus for like twenty five dollars. They sell for a hundred and fifty.

The second one Is you know pitchbook.com pitchbook? Yep. Okay, they do like a hundred and fifty million a year in sales. A lot of their data they get because they hire these guys in India to like just go out and cold call people and ask for like that's all it is.

I mean At this point I think it's a little it's far more sophisticated than I'm dumbing it down to, but that's like I I believe how they made a significant amount of money. And the second one or the third one is summarizing books. So We are well, this is a two part one. We were talking about this company called Card Munch, and the way it started was this guy would he built this really simple app where he would take a picture of a business card and then On the back end there was human beings that would

transcribe that business card and upload it to your contacts. Same with summarizing books. So like okay Cupid started this way where they just outsourced it and they just had someone summarizing all these books for like so cheap, like fifty bucks. Okay. What do you mean? Sorry, um The guy who started OK Cupid had another company called Spark Notes. Okay, gotcha.

Yes, partness. Sorry, yeah. Anyway. What else have you heard of that was like that where it's Well we have a friend uh who did this in the textbook summary space. Yes. Um So he did the same thing. Um

One of the one of the I we'll ask him afterwards if we can run any of this. I'll cut it out otherwise. Um But one thing that you know, you go buy a textbook, you it's a math calculus book for your your college class, and then there's like at the end of every chapter, there's these like problems with um and they typically the textbook has like a solution at the back, right? You go look up the answer in the back, see if you got it right, but the answer is like one line. It's like, you know. The answer was C, but you don't know why it was C. You don't know how they arrived at C. And so he got a bunch of smart people in India to like go through and actually hand solve all the

All the Uh chapter one, two, three, four, five, all the questions in there with the actual show your work. And um people would buy these like course note solutions, basically court the textbook solutions. um that were actually like fully written out, which they could either use to just Like

fill in their homework without doing their homework, or to learn and be like, oh, that's how you actually solve that problem. Cool. This is like a tutor, but way cheaper. Um And so that was, I thought, a a really good hustler solution to to that problem. What I think someone can do. And I think I personally I don't want to do this. I think I could do this in a matter of thirty days is build a company by going to fiber.com.

Finding One of two things. One, the most impressive five dollar bit of work. Right. Something that like I would see this and be like

Are you kidding me? This is only five dollars. Right. Then I would make my own website and make it look amazing. And sell it at a massive Uh. tick and then just manage the contractors to get it done. Yeah. The second thing that I would do is find

talents on Fiver? Fiverr for those listening, it's a uh a marketplace for jobs that cost five dollars. Of course now they do like more than five dollars, but now nothing costs five dollars. Everything's twenty dollars. Right. So it's it it but it's like Like someone's like, Oh, I'll narrate your

Thirty second commercial. Right. Yeah, which is I think How this one was done. Um R first, maybe. But um

I would find a fiber job that was positioned poorly. And I would reposition it and market it just like that. So for example, I found this guy who would do cartoons I would just say oh I'm just gonna make it strictly Dog cartoons. Send me a picture of your dog like you know what I mean?

Or I will narrate This thing for you. I'm gonna turn it into like Custom voicemails by the guy who sounds like blink. Or like Donald Trump impression voicemails. Right. Yeah. You take impression guy who does a good Donald Trump impression, you're like, okay, cool, this is

Donald Trump wishing you happy birthday for thirty five dollars as a service. Exactly. And so you just Fix the positioning. Right. Um I'm looking through Fiverr right now and looking at the popular categories. So

Um a lot of them are on like Like basically some kind of either It's a lot of like creative art. So design. um music, video, things that people typically don't have the skill set to do themselves. So it could be like package like coming up with your brand packaging. Um fixing up your w personal website, your portfolio.

Um creating a logo for your brand, right? That's like one of the most common fiber jobs ever. And um So there's a bunch that are like that. There's like hand illustrated portraits of you. There's voiceovers, there's impressions, there's I think there's a lot of these. Somebody call this

I think productized services basically it's something that's traditionally done as a service, but You productize it so it seems like oh I click this button and I receive this product back. I received this end output. And underneath the hood, you you're farming it out to Fiverr and Upwork, and you're just connecting the dots for people that don't know that that's where they should go look. They don't want to take the time to go find the right person and write a brief and all that stuff. And you sort of automate that workflow. Yeah, and it's not like a scammy thing. I I I kinda presented it as a get rich quick kinda lazy way to do it. But of course there will be work. Like you have to vet the people. You have to make sure it gets done in a timely manner. If there's revisions, you've got to handle it.

Basically the but the vetting the part vetting the person. I remember Brian Bugelman was the first person who I heard talking about this. I forgot what he called it. Uh, but he had a great example. He had an example of some businesses doing like millions of dollars a year. That was literally just what you're talking about. I like

I didn't I oh I I definitely oversimplified pitch book, but I was like reading about it I'm pretty sure they just have a team of like literally three hundred guys in India. Who Are just scraping massive amounts of data. Right.

Scraping it by cold emailing and cult calling people and then like writing things down. And also probably just like aggregating. Scraping, yeah. Which is a technical skill, but yeah. Uh yeah, I actually I think scraping would be a great one for this, which is like, oh, I need a list of this number of I need leads about this. And it's just like cool. Um, just describe what you need.

And if you pay me two hundred dollars, I get you a list of hundred fifty people that are like that. Or if you want a thousand people that fit that criteria, great. And it's just basically saying, I can go scrape this for you. You don't know you don't know how to do web scraping, but I do. Um So you only have a few minutes, you said, right?

Yeah. So I was I I did something the other day I asked people how they would describe the podcast.

Um I on Twitter I said uh How I hate the name of my first million and how it's stupid. And how I hate Explaining to anyone who I don't know about what I do. And like how I co host this. Yeah.

But For the rare person who like is like you and I, it's like an addict thing. Which is what we hear consistently. Yeah. And I said, So how would you explain the podcast? And I got Maybe two hundred responses in a short amount of time.

And one bit of feedback you and I got. And I rarely give into this shit, but they are totally right, which is we have had almost all dudes on this podcast. Wait. Definitely need to get different types of people. Have you noticed that?

Um So yes, I've noticed that. That was feedback we got pretty early on. We made an effort to try to balance that out as best as we could, but also we Got rid of guests. I mean, literally on this episode we had a female guest. um from a totally different background, right? Tax tax attorney, very different. Um

So I don't know. I think Yes, the feedback is Valid But also yes, we're aware of it and have

Tried to make strides on it. And yes, we probably also have a long way to go. And yes, I also am kind of exhausted by it and don't even like having guests on anyways, so I don't know how I feel about it overall. I like having guests if they're like huge, interesting people. Like the Ty Lopez thing, like we got so much Can I read your uh conversation from this morning out of Slack?

This is this is the Sam Parr experience. Okay, so Sam goes Where is it? This is what it's like to work with Sam. Um So Abre you says, Good news.

We're about to sell out of ads, uh, for the rest of the year and into next year. Sam just goes. Well How much money? Also.

We need banger guests once a week, like the founder of Shopify, Google, famous people. And then a break says how much. And then says who's building it out. S. That's fucking bullshit. That's way too low.

No no solution offered. How are you? Well oh okay, also for guests we have the founder of Lambda School and the CO of Shopify coming on next week. Those those are getting interesting.

They'll have a bigger, like fucking Hillary Clinton. A period's like I don't know dude, talk to sales. I think the rate we're getting is pretty good. We just need to blah blah. Uh And then he says, By the way, today we have a tax lady on who's gonna talk about Trump's returns.

Ha ha ha. Oh, I just thought it was so funny. I was like, man, working with Sam is like It's like working with the weather. It's like some days it's sunny and bright and you're like, I love the weather. And then some days it's It's like a thunderstorm and you But you don't blame the weather. The weather's just the weather. You don't get angry at the weather. It's like

The thing about me though is like I'm not actually like I'm like one of those guys who I'll I'll yell. And then it's like You good? Yeah. What's going on. You know what I mean? Yeah, for sure. You're not actually uh angry at anybody. I just thought it was really funny the way uh that you reacted. Actually, let's bring a Bray you in. Uh what was that like to be on the receiving end of that of that response?

This is now an inter intervention for Sam. I'm surprised he brought it up'cause like I just thought that was like normal Sam. Like if he had responded a different way If he had responded a different way, I would have been surprised. No, I'm like yeah, this is the reaction you got. I know, but yes, this is this is the normal Sam, but is this the normal of what you are used to? Or do you like it? Do you dislike?'Cause some people might be like, Yeah, I'm fired up. I like that. Just straight talk.

And um Tell it like it is and don't, you know, don't don't sugarcoat it. Um, so wh where do you f where do you stand? How does it feel to be other personality? No, it feels it feels normal because I think I get Sam's personality. So like when he says that, I'm like, Yeah, it's normal. And I know how he would say it, I know how you'd react to it. So it's It's not like I'm not like oh Sam's yelling. I'm like oh yeah Sam We were recording this course yesterday. And like

Midway through I'm like I don't I don't fucking have it today. This is horrible. And so we just had to end it. So yeah, I would say

I'm I'm I have up and down. Ups and downs. Well it's very transparent how Sam feels. Like I don't like people who like kind of hide or like their personality changes. It's like you hate to guess how somebody's feeling about about something, about your work, about you, about whatever. And I would say Sam doesn't make you guess. Do you want to um I don't want to make this about me, but I'm not sure.

This is for anyone who's like crazy. So And I know you gotta go, so I'll make it quick. I'm hiring um what I call as a COO. In reality, this person's gonna be my CEO of the company. Yeah. Why don't you just call him CEO? I told him I go, I'm gonna call you C O O at first so I can fire you really easily if you suck. And then after a while we'll transition you to CEO. Frankly.

It's gonna be a CEO. And Um The job description says like don't take this if you and I like have like it's a the job the the job description is literally just a reasons why you should not take this job. And people have liked it. And one of the things that it ha it says is you just got to be like the straight woman or straight man to like me being nuts.

And This the whole interview I'm just like telling these people I'm like So I'm like kinda crazy and you're gonna have to like Just figure out how to handle that a little bit. And I was like, I'm not like actually like a an ass, or I'm not actually nuts, but like

I'm very creative and whatever. And so it's being very creative. I don't know, what do you want to call it? It's just like I'm just like high energy and very humble. Super good looking and I missed the best part of that Slack exchange, which is the picture that he posted on Twitter. Like right before you started reading the picture that he posted on Twitter. Oh

I thought he was gonna get roasted for that. I didn't even see this. Oh what is this? Who is this? What am I looking at? It's a photo from a confr so I had to fly somewhere to speak at a conference and it was like I it was across it was in a different country and I was exhausted in the morning and they're like, All right, come take your picture and I was like Uh, I don't wanna do this. And so they took a picture of me and I look like a grown up Bart Simpson. Okay, yeah. Okay, so yeah, there's a headshot of there's like a like a professionally done photo of of Zab. And then uh Brady says you look like a bootleg Carl Lentz.

And you're about to drop the worst gospel album of all time and then This is what I this is I missed this whole exchange. And then Sam posts a topless picture of Carl Lentz where he's just absolutely ripped. He's like you're you're right. Super similar.

Oh man, the whole Slack. People should pay to just be in the Slack. I think that's ultimately what Slack, I've decided is a cancer to my business. I hate Slack. I hope that's the thing. I hope they're not sponsoring it. Whatever. Sorry. Gets out of the bag. I think Slack is the worst. It has ruined my work life. Do you like Slack?

I love Slack. I think it's great. Oh my God, I don't want anyone talking to me. I have people who message me on Facebook Messenger. F Twitter DMs Text message, Slack.

Email. What else is there? That's it. It's the worst. It is the worst. It is horrible. I hate all these messages. And then Slack six.

Right. Well To the future CEO of the hustle. Good luck. Dude, we're interviewing a bunch of ballers. We're interviewing all these people and I'm like, why is this guy talking to me? That's great.

Uh love it. Okay, one last thing about CEO ship. Uh you saw this Coinbase letter memo that went out. What was your reaction to it? Totally. Okay, so so uh I'll explain it for those who didn't see it. So just go look up Coinbase Memo or something like that. You'll find it. The CEO of Coinbase basically emailed out like Kind of a confusing little email, but like what what he was basically saying was it was definitely poorly written.

It's poorly written, but it was like hey at work. Um Like Coinbase is not gonna like take political stands around causes and also like when you're at work, just be at work. We don't I don't wanna be debating politics and social issues. Um, like that's kind of a distraction from our mission. And if we do put resources and donations and we do care about causes, it's causes related to our mission.

Which is let's say, I don't know, like an open financial currency system or something financial system, which is like, you know, the crypto world. Um So like we're all about growing the crypto economy. That's what we're gonna focus on. That's what we're gonna do at work. That's what we're gonna talk about at work. Those are the causes we're gonna support. And everything else doesn't have a place here. If that's not a place you want to work at, like there's a meeting with your manager where you can go and get another job.

Um and so that's kinda what he said, and people were really split on this, totally polarized. So I would say like There was. Um Like Paul Graham and who's the you know founder of My Combinator was like anyone who's libertarian, like m probably me, definitely me, probably you. I don't I don't know what you consider yourself was like, Oh yeah, this guy's awesome. And then anyone who's

liberal or I'm generalizing was like um You know, how dare you not support X, Y, and Z. Right. Uh but there was like a you know a bunch of pr you know, prolific people chiming in and it was just interesting to see how split the opinions were. Um

You know, Dick Costello, the formal former CEO of Twitter, was like, This is not good leadership. This is like This is basically saying uh, you know, shut up and dribble to your employees. And um there was other people that were like Like, yeah, dude, I want work to be about work and I don't want it to be about all these other things. And I don't think that we should be taking these stands. And I also just I don't want that in it's already in my world everywhere else.

I don't want it infiltrating work and I want working about performance. Shut up and dribble analogy is actually stupid because He didn't say he doesn't want his employees to mention anything. He just said the company it like The company's gonna not stand for anything, but you can do whatever you want. And don't say don't talk about it at work.

Yeah. And so I don't think that's the same as Shut Up and Dribble because Um it's just says while you're on my time. Shut up and dribble while you're on your own time. I support you as a human, you can do whatever you want.

I think that my thinking is if you have shareholders other than one person. You should try to your only job is to make that share your shareholders wealthier. And all you should care about is business. And if you only care about business, you'll likely have happy employees because they'll feel like they're succeeding and things like that. If you own the whole company, I think you can you should make it as political as you want.

You know, like this could be your vehicle. This could be the Sean vehicle to do to do anything he wants. And so the the other argument is um No, we live in a society and uh like companies should basically be helping society and if there's societal issues, like we should have the courage, we should have the backbone to stand up and say when something's wrong. Um, kinda like that old quote. I I don't know the quote exactly, but it's sort of like You know, um They they came for the Jews, uh, but I you know, but I'm not Jewish, so I didn't say anything. They came for the

For the bankers, but I'm not a banker, so I didn't say anything. And it's like they came for me and there was nobody left to say anything. Uh it's sort of like that where If um If there are wrongs happening in a company's you know, if people and companies, people of power, which is in some ways organizations, um don't say anything, don't do anything, don't don't use their their platform and their influence. Then uh that's a shame, and I don't want to work at a place like that. That's that's another take that people have, and I think it's gonna get split. I think you're gonna get two types of companies. You're gonna get companies that

lean into the activism and people work there because they're like, yeah, that aligns with my values. And then you're gonna get other people who are like, I don't want my work life to be so political or like to to take a a social stance on everything. I want work to be about business and I want you know I want it to be about uh the the actual mission of the business. Um

And I think it's gonna get split and then people will self select where they wanna work, which is the thing. And by the way, I think that last argument you made is actually a really good argument. Because in my head I'm like well We would hopefully know like what's actually serious and what you should like say no to And then

maybe a lot of people will be like, Well, this is serious. Like why aren't you saying And I'm like uh that Yeah. I would have to actually walk through that exercise on how to figure that out. Right. And the other interesting thing was the the sort of rumor mill was basically because it was like why did you guys why'd you post this like really weird thing

Um It was it was sort of weird because it was like this is something he was saying to his company. But he published it and was like, I want other leaders to learn from how what we did. And everyone else was like, you know, so split that it wasn't like this great example of anything. Um And then s some uh some somebody on Twitter, and her name's Erica Joy. She's a black woman on Twitter, and she was basically saying

Uh, by the way, the inside scoop of this is that he was like, you know, his hand was being forced. The engineers walked out because he wasn't saying X, Y, and Z. He wasn't saying Black Lives Matter. He wasn't the company did nothing when all the other companies were standing up and saying something. Um And so he was being pushed and then this was his like tantrum back about like okay. Uh you forced me. three weeks ago, because the the weird thing is like three or four weeks ago, he posted on Twitter, I want to unequivocally say back Black Lives Matter and here's, you know, here's why that's here's here's what's wrong in the world and how we should work to fix it.

Um And so she was basically saying like he didn't want to say anything. He was being pushed to say it. Engineers walked out. So then he put that statement up, but this is like the retaliation weeks later of like Look, that's not gonna happen again. Like that's not how our company's gonna run. If that is true.

And I'm going on Glassdoor right now. I'm going to click on most recent. If that's true, then that's awesome. I think that's Baller. I think that like him? Yeah, of him. If like someone threatens you like you know if you don't do this, I'm out.

In most cases you should say All right, bye. Like just for that. I would say that's that's kind of the point I agree with you the most, which I think we both believe you should run your company the way you want. And then you should deal with the consequences of running your company that way.

rather than this general idea of everybody needs to run Every company the same way, which is the right way, as dictated by the mob of Twitter or the mob of you know X group. And um and then people doing shit that they don't actually even believe to be the right way to do things. It's not even actually what they want to do, but feeling like they're gonna get canceled or fired or whatever if they don't. Um so I think the the the better world is People do what they actually think they should do and then let the chips fall where they may. And then people will self-select around um around joining companies that that are the way they want to be, you know, the type of company they want to join.

And by the way, I don't entirely buy that story simply because I'm on Glassdoor is like the one of the best places to get information on and learn all about a company. Typically the reviews are too good or too bad, but you could so you gotta like divide by half to get the middle. And anyway.

I looked at the reviews, I don't see a thing on that. That is this is the a type of thing that uh employee would quit or get fired over and that's the first thing they would complain about. And I don't see one thing since um March that relates to that topic.

Well, I think some of it's definitely true. I think there definitely was a walk out. The question is, did he do this because He learned oh the company feels this way and this made it made some decisions or is it truly like a kind of a retaliation or response to to that. I don't know that part, but I think the the walkout part was sort of confirmed by lots of people who work there. Now I also would say you love glassdoor. I never use glassdoor. I don't know anybody who writes on Glassdoor. I'm sure obviously people do, but I don't know how on the pulse glass door is let's say. Uh I'm not sure it's like in the same way that I don't think Yelp is

I don't agree with Yelp most of the time. And I know what it's like in our company and I I don't know if I would agree with the Glassdoor reviews of it either. It's a signal. It's not the answer. It's a signal. Right. But what you're saying is if nothing's there. Then it's a lack of signal. Yeah. Yeah. I mean, like it it it's a signal. Like, for example, if something on Yelp has 10,000 reviews and they're all positive and something has only three reviews or rather ten thousand reviews and it's m only okay versus

Ten reviews and they're all Like perfect. You're like What's going on here? Like this ten thousand thing actually might be pretty good if it's so popular. You know what I mean? Like Yeah. you look at the a variety of factors and that's how I use Glassdoor and I think that it's like a l fantastic way to uh figure it out.

Very cool. Um all right, I gotta run, but Interesting episode. It's gonna be a differ d very different episode. We got the tax thing and then we got just kind of random shoot the shit at the end. So I think um I think we kinda crushed it in the last episode, although I didn't get a ton of feedback. It just went out today. Okay.

We're gonna get I haven't gotten any wap blow over, which is what I was expecting. Ha ha ha. Yeah, where are the tweets? Uh okay, I gotta go. See ya.

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