Professional Equities - March 2020

Insider Passive Residual Income THEULTIMATEPASSIVERESIDUAL INCOME TM March2020 The


Bill Moist


Introduction – Dan Kennedy has been teaching business owners for years that the fastest way to increase profits is to increase prices. This is often met with resistance by owners and managers. We’ve been taught in business school that our price should be some markup from cost. And that we should be competitively priced. However, increasing prices has two great benefits – one for the customer and one for the business. For the customer, the higher sales prices allow businesses to provide better service, better quality, and better value. For the business, raising the lifetime value of a customer allows it to spend more money to get and keep that customer.

DEDUCTING TO ZERO How to Thrive This Tax Season

If you’re a small-business owner, tax seasonmay feel daunting. The federal tax code and supporting documents are nearly 70,000 pages long, and you just want tomake sure you’re saving as muchmoney as possible. But how likely is it that you’ll do so? Over 93% of small-business owners overpaid their taxes in the past decade, according to Forbes. “The best taxes are the ones you don’t have to pay,”writes Garrett B. Gunderson, the financial advisor who reported the statistic. Most small-business owners are unaware of the many deductibles and strategies they can use to make the most of their money this year. KEEP EVERY RECEIPT During the year, receipts can create clutter and disorganization, which discourages most people from keeping track of them. However, you can earn plenty of deductibles by keeping each and every receipt, whether personal or business. Without spending any extra money, you canmake sure the savings you’ve already earned don’t vanish. The app 1tap receipts makes it incredibly easy. Just take photos of your receipts (even if they’re double-sided!), and it’ll automatically import the information to the app. It can sync with most bookkeeping and tax-filing software and makes your life incredibly easy during tax season. DEDUCT, DEDUCT, DEDUCT Are you aware of all your available tax deductions? All of the following are 100% tax-deductible: salaries and benefits, telephone and internet expenses, education, depreciation, home office, interest, legal and professional feeds, moving expenses, rent expenses, business meals, business insurance, business interest and bank fees, business use of your car, and advertising and promotion. Finally, any personal expenses you can link to your business can also be deducted.

My friend, Mike Crow, is a business coach to home inspectors and has successfully started and sold

several. Mike is one of the higher priced home inspection companies in Dallas/

Fort Worth, but he offers services and value to the customer that far exceed the price differential. His competitors are unable to meet the value of his service.

Conclusion – Studies have shown only 20% of our purchase decisions are based only on price. Yet, it seems that 80% of marketing is based primarily on price. Businesses are wise to consider increasing prices to increase profits.

–Bill Moist

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an expert can easily help you file for typical costs associated with setting up a business.

Nowadays, getting locked out of your Facebook account often means losing access to your Spotify, Tinder, or any of the other sites you can sign into through Facebook. The amount of personal data social media has access to grows all the time, and it can affect your private and professional network. Thankfully, a few tech CEOs, such as Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey, believe social media decentralization could give users greater control over their personal information. Social media decentralization was once a pipe dream for activists, but Dorsey has recently revealed his hopes for redesigning his social media software to put the power back in the users’ hands. Zuckerberg also admitted in a Harvard interview that decentralized software is “quite attractive.” Keep inmind that there are certain conditions for accounting things like business meals. You can only deduct 50% of the cost from regular meals, while you can deduct 100% fromoffice parties. While it may take extra time to calculate every deductible, tax software canmake it easy. It’s in your best interest to take no shortcuts. All these small savings can put more money in your pocket for the upcoming quarter. DON’T SELL UNUSED PROPERTY Do you have old equipment that’s not providing ROI to the business anymore? You should weigh your options. Donating it, so long as you’ve owned it for over a year, is fully deductible. Selling it wouldmake it a capital loss, which is not deductible. Find your property classification under Section 1231 of the federal tax code to help you determine the largest savings option. DEDUCT STARTUP COSTS As long as you created your business, any expenses tied to starting your company can be deducted up to $5,000 along with up to $5,000 in organizational costs—but only if your total startup costs are $50,000 or less. Tax software or

nearly impossible to audit or manage, which makes falsified information and propaganda infamously easy to pass around. This anarchy also makes it much easier to conceal illegal activity. In an age where identity theft, financial fraud, and selling user information are more digital than ever, it’s important that users and businesses alike have full confidence in the security of their online pages where clients interact with them— especially if information, goods, or services are exchanged. A decentralized system could split the massive, unregulated wilderness of Facebook and Twitter into user-managed “neighborhoods.” Rather than relying on one centralized server that holds over 2.45 billion users, businesses and individuals could host their information on their own computer. This would give businesses and individuals much greater control over their information and how they share it. SPENDMONEY TO SAVE MONEY Within the right profit margin, spendingmoney on your business can reduce your taxes to zero. It’s not news tomost entrepreneurs, but the more you spend on the business, the more tax deductions you earn. Don’t spend $10 to save $3, but don’t be too stringent on savings; keep inmind that buying new equipment, hiring new employees, creating an advertising campaign, andmore can lead to cheaper taxes. TRACK CARRYOVER TAX DEDUCTIONS Don’t forget to keep tabs on past capital losses, net operating losses, home office deductions, or large charitable donations. If these deductions aren’t fully used in one year, they can carry over and apply to the next. REMEMBER THE TAX CUTS AND JOBS ACT OF 2018 While this act did cut out deductibles available in previous years, such as travel expenses, you can still benefit from the change inmany ways. If you

file as a pass-through entity for your business, youmay already be aware that your standard deduction has been doubled. This can even mitigate the benefit of keeping track of your receipts if your spending was modest in the past year. However, this is only if your business taxes are filed individually. Be sure to double-check the recent changes before filing tomake the most of your deductions. Without spending any extra money, you can track all your deductibles and tie any personal income or home office expenses to your business to save as a small-business owner. If you do spend extra money—with tactful awareness of the profit margin—you can still make your tax season easier and less stressful.

BREAKING DOWN FACEBOOK What Is ‘Decentralization’ and How Will It Change Social Media?

That’s not to say there aren’t risks associated with decentralization. If unprepared, private hosts could be left defenseless against hackers. Some critics even suggest that a push to decentralize could just be an attempt by Twitter and Facebook to dodge responsibility by moving data off of their own servers. While decentralization offers solutions to some of the problems of social media, it’s an approach that requires cautious implementation. Only time will tell if decentralization’s benefits outweigh its risks.

Currently, Facebook and Twitter live in relative anarchy. Their sheer size makes them

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GIVING BACK TO LOCAL COMPANIES On National Mom and Pop Business Owners Day

In addition to the economic boost, products from small businesses are usually higher quality, which makes them a better value for your dollar. Take this day to shop for birthday and holiday gifts for your loved ones that will bring them great joy and last a lifetime.

March 29 is National Mom and Pop Business Owners Day, which is huge for small businesses everywhere. Mom-and-pop businesses are the backbone of the U.S. economy; Small Business Trends reports that mom-and-pop businesses account for 64% of gross domestic product (GDP) and generate 78% of all new jobs. Furthermore, no matter what turns the economy takes, small-business owners are less likely to lay off their employees than big corporations. Mom-and-pop businesses support all communities, and you can support them by celebrating this unofficial holiday! Shopping locally has a massive impact on your community. Local businesses return three times the amount of money to the local economy than larger corporations do. With that big of a returned investment, your community can support even more small businesses that generate a wealth of jobs and keep the cycle going. GIVE YOUR LOCAL ECONOMY A BOOST!


While small businesses utilize every form of marketing available, social media is essential for their success and growth. After shopping at your favorite mom-and-pop business, share that experience on your social media! When you write a post on Facebook or take a picture for Instagram, be sure to tag the business and use relevant hashtags so your friends, family, and everyone else in your community can shop there too. Writing reviews on Google Reviews and Yelp helps establish validity for the company. When another potential customer looks for reviews,

they know they’re getting quality products and services from a well-established pillar of the community. The local businesses that are active on social media may post deals and sales for that day only, so keep your eyes peeled and be sure to follow all your favorite businesses!

Take a Break!

Inspired by


Brighten up after a cold, dark winter with this fresh and flavorful springtime dish.



1. In a large ovenproof skillet over

2 1/2 tbsp olive oil, divided 4 boneless and skinless chicken breasts, pounded to a 1-inch thickness Salt and pepper to taste 1/4 cup whole- wheat panko 2 tbsp Parmesan cheese 1 tbsp unsalted butter, melted 2 cups cherry tomatoes 1 garlic clove, thinly sliced 1 tsp red wine vinegar 6 tbsp spinach pesto

medium-high heat, add 1 tbsp olive oil. 2. Season chicken with salt and pepper, and add it to pan. Cook chicken for 5 minutes on each side, then remove pan from heat. 3. In a bowl, combine panko, Parmesan cheese, and butter. 4. Spread pesto over chicken and top with panko mixture. 5. Broil chicken for 2 minutes on high heat until browned. 6. In a skillet, heat remaining oil over medium-high heat. 7. Add tomatoes and cook for 6 minutes. 8. Add garlic and cook for 30 seconds, stirring constantly. 9. Season tomato mixture with salt and pepper, and add red wine vinegar. 10. Serve tomatoes with broiled chicken.

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INSIDE THIS ISSUE From the Desk of Bill PAGE 1 Making the Most of Small-Business Tax Deductions PAGE 1 ‘Decentralization’ in Social Media PAGE 2 Celebrating National Mom and Pop Business Owners Day PAGE 3 Take a Break PAGE 3 Pesto ChickenWith Blistered Tomatoes PAGE 3 The Science Behind Gut Feelings PAGE 4 Professional Equities, Inc. BILLMOIST'S



401 N. Carroll Avenue Ste. 166 Southlake, TX 76092 (817) 657-4080


a conscious decision that agrees with the subconscious solution of your basal ganglia, your brain gives off a subtle reward. The decision doesn’t have to be logical to feel right — that’s your gut feeling. However, if the conscious and subconscious parts of your brain don’t agree, your insula detects the discrepancy and registers a threat. It’s the “I have a bad feeling about this” response. Fabritius and Hagemann note that gut feelings “represent the most efficient use of your accumulated experience.” According to the authors, flipping a coin is the best way to really listen to your basal ganglia and insula. Your subconscious brain has already made a decision; flipping a coin helps you test your intuition about each option.

You have two options in front of you. They both sound great, are backed by research, and could transform your business for the better, but you can only choose one. Which do you commit to? When you’re faced with two equally worthwhile options, science says the best way to make a decision is to flip a coin. When you flip a coin, you’re not really leaving the decision up to chance; you’re actually calling on your intuition to guide you. The practice is often regarded as unscientific, but there’s a lot of research to support making intuitive decisions. Friederike Fabritius and Hans W. Hagemann, authors of “The Leading Brain: Neuroscience Hacks to Work Smarter, Better, Happier,” explain how we develop that “gut feeling.” Intuitive decisions are driven by two structures in your brain: the basal ganglia and the insula. The basal ganglia are connected to movement and building habits. The insula, part of the cerebral cortex, becomes engaged when you experience pain, feel love, listen to music, or even enjoy a piece of chocolate. Neuroscientists believe the insula is responsible for self- awareness, particularly for recognizing changes in your body.

If the coin lands on heads and you feel relieved, then heads is the right choice. However,

if the coin lands on tails and you’re uncertain or want to flip again, then that’s your intuition saying the other option is the better choice. So, the next time you’re caught in a pickle, grab the nearest quarter and put your intuition to the test.

When you have to solve a problem, your basal ganglia start working on a solution, even if you aren’t consciously thinking about it. If you make

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