You know when you come across someone that’s not only smart but gets where you are coming from? Paris Dean gets it and gets me more than most of my friends that went to school with me lol. I reached out to him on Facebook August 26th, 2020 and said I love this posts, and would he be ok with me sharing EXACTLY what he wrote? He said yes. At this point, after reading this and several others, there’s no need for me to write something like this at this time. Have you ever come across something that was so perfectly written that you wish you wrote it yourself?
THIS IS IT.
Without futher ado.
Guide #1: How to Flip Money Like A Caucasian (and turn $5,000 into $25,000+ in one year)
Disclaimer: Reading this doesn’t guarantee you’re going to make money. This is for learning purposes only.
Social media has done a great job of exposing exactly how much people don’t know about money or how it works, and it explains why so many of us who have no reason to be poor are poor (which is a separate group from those who can’t graduate to the next socioeconomic level without a lot of external help).
There are people right now who routinely make and waste a useable amount of money ($5,000) on worthless material stuff when they could turn that $5,000 to $25,000+ in one year and use it to help not just themselves, but everyone in their circle.
But instead of bashing people and pointing out flaws, I’ll give everyone a plan they can use not now but right now to change their lives in one year:
1. Set up an LLC ($50) and use a registered agent ($100) — $150.
A limited liability company (LLC) is a business structure in the United States whereby the owners are not personally liable for the company’s debts or liabilities. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship.
What’s a registered agent? A registered agent is an individual or business entity that accepts tax and legal documents on behalf of your business. A registered agent is also known as a resident agent or statutory agent.
Most states require you to have an LLC registered agent. The agent can be a professional service, yourself, or a colleague given they meet the state’s criteria. I added this because everyone doesn’t know what a registered agent is.
2. Get an EIN/Tax ID. $0.
Your Employer Identification Number (EIN) is your federal tax ID. You need it to pay federal taxes, hire employees, open a bank account, and apply for business licenses and permits. It’s free to apply for an EIN, and you should do it right after you register your business.
3. Get Virtual Office. As little as $99/year.
A virtual office gives businesses a physical address and office-related services without the overhead of a long lease and administrative staff. With a virtual office, employees can work from anywhere but still have things like a mailing address, phone answering services, meeting rooms, and videoconferencing.
4. Get a DUNS Number. $0.
A DUNS number (Data Universal Numbering System), is a 9-digit code assigned to your business by Dun & Bradstreet, the world’s biggest business database. It works as an identifier to prove your financial credibility when applying for a loan or credit. This code allows investors, potential business partners, creditors, and lenders to view your business’s financial history to reassure the reliability and stability of your entity.
DUNS numbers are used by millions of companies worldwide, even the US government uses these codes for business. With a DUNS number, your company has an authorized business credit report.
When you’re applying for your DUNS number, use the virtual office address as your business instead of your home address because it gives lenders the illusion that you are a stable business.
Stability = trust = higher loans and lower interest (no more 34.99% APR chargers).
5. Verify your business with Google My Business.
Google My Business is a free tool provided by Google that allows business owners to set up a brief profile that displays their name, address, phone number, hours and website link in relevant search results like Google’s Local Map Pack, Local Finder, and organic rankings in general.
If lenders can Google your business and it shows up you have instant credibility.
6. Open a business bank account. $2,500.
Opening deposits start at $50 but you’ll get hit with a $15 monthly maintenance fee if your account doesn’t meet the minimum requirements. Usually the minimum daily balance to avoid a fee is $1,500 but you’ll start with $2,500 for reasons I’ll tell you about later.
(The opening deposit is still your money so it’s not an “expense” but it takes away from the original $5,000 so I’m classifying it as an expense.)
🥳 Congratulations. You now own a shell corporation.
7. Get 3 business trade lines. $500.
A business tradeline is an “account” between a business and vendor, like business credit cards, lines of credit, and phone bills.
Tradelines are important for building business credit because they show other companies how you’ve handled credit in the past. Without that information you won’t have a BUSINESS credit score.
Just like with personal credit, there are three main business credit bureaus: Experian Business, Equifax Small Business and Paydex (the global standard, maintained by DUNS & Bradstreet).
In order to generate a score, you’ll need three trade lines.
Me: Get it?
You: Got it.
8. Build transaction history. $0
Use your personal bank account to transfer money in and out of your business bank account. Transfer in $500 one day, take out $1,000 the next day, transfer in $2,000 the next day, etc. but never drop below the original $2,500.
If you look at your bank statement at the end of the month it now LOOKS like you have a successful business that made upwards of $10,000 that month with $2,500 net profit.
(Gross profit = total revenue. Net profit = revenue — expenses. When a business makes money it’s called revenue. When people make money it’s called income).
Now do that for the next two to three months.
(If you have Chase or any major bank, you can transfer money instantly using their app for free.)
This is important because there are lenders who will give you TRANSACTION (revenue) based LINES OF CREDIT of up to $250,000.
Remember that $2,500 you didn’t go under? Because that’s technically net profit, you’ll more likely than not get approved for a $5,000+ line of credit because the more net profit you have the more “debt” you can afford.
(A line of credit is not the same as a credit card. Basically a line of credit is money set aside by a bank that you can use as needed, but don’t have to because there’s no interest if you don’t use it. If your line of credit is $10,000 you can use $100 or all $10,000 and it won’t negatively affect your credit score like a credit card. When you use it, though, you’ll pay interest on the money you USE.)
9. Pull from your line of credit.
Transfer the whole balance to your business account and repeat step 8. When you pull from your LOC you’ll have minimum monthly payments. Pay them early. Early. Early. Say it with me. Early.
This has two main benefits:
The more you use your LOC and pay it back, the more it grows.
$5,000 can turn into $10,000 can turn into $25,000 can turn into $50,000.
Use it and pay it back.
Having the extra TRANSACTIONS (revenue) on your BUSINESS bank statements means you can now go and apply for more lines or credit and BUSINESS credit cards.
10. Apply for new LOCs and credit cards.
Lenders will pull your business credit and see that you have a “successful” business with tens of thousands of dollars in gross monthly revenue (with a decent net), growing lines of credit, and you pay your bills on time.
Congratulations. You’re in the big leagues now.
11. Go get that Charger 🏎💨
Because you have a strong financial business profile, you can now get real things in your business’s name.
Go to a dealership and tell them you want a corporate lease. They’re gonna look at you like you’re crazy, but fill out the application using your business information instead of your personal information. They’re gonna look up your business in every database they have, and they’re gonna find it. They’ll see that it’s registered to an address at an office building and they might call the number and ask to speak to you to catch you up. Your receptionist will answer and offer to transfer the call to your cell phone because you’re not there. She’ll transfer the call and your cell phone will ring.
“Hello, may I speak to Barbara?
Barbara, this is Shirley.
You might not know who I am,
But the reason I am calling you is because…”
No more 34.99% APR Chargers.
⭐️ BONUS ⭐️ Write everything off.
Businesses don’t pay taxes on the revenue they generate, but on the net profits. While paying taxes is supposed to be “good”, having to give up 30% of your money is like…a lot.
But to get around having to pay certain types of taxes and truly live like a caucasian, the government created these things called “Write Offs” (deductions).
Write offs are any business expenses that are deducted for tax purposes. Expenses are anything purchased in the course of running a business for profit. The cost of these items is deducted from profits in order to decrease the total taxable revenue.
More write offs = less profit = less taxes
Use your business credit card to pay for EVERYTHING so you can maximize your deductions. Virtual office? Write it off. Car lease? Write it off. Car insurance? Write it off. Car wash? Write it off. Gas? Write it off. Dinner with your gf? Sign the check…but write off. Hotel? Write it off. Clothes? Write it off as a uniform. School supplies? Use that Office Depot credit card (trade line) to build your business credit and write it off.
But this is what Jay Z meant when he said “I’m not a businessman; I’m a business, man.” This is (a simplified explanation) of how people like Jeff Bezos pay next to nothing in taxes (people pay taxes on income; corporations pay taxes on profits). This is how a group of people can “pull themselves up by the bootstraps”. You can use your LOCs to give your friends interest free loans, teach them to do the same thing and so on. Use those LOCs to buy real estate and use the rental income to make the monthly payments. Interest might get you the first go’round but now you have a revenue generating ASSET.
You don’t have to be old, rich or white to have a business, you just have to have the desire and the discipline to do more than you’ve seen your whole life.
Disclaimer: Reading this doesn’t guarantee you’re going to make money. This is for learning purposes only.