Get Your Personal Financial Budget Statement Here:

https://s3.us-central-1.wasabisys.com/40webinars/personal-financial-statement.xlsx

BriarCliff Crest is an exclusive, invite-only opportunity for select traders looking to elevate their strategies. The only way to secure a chance for an invitation is to email the contact info provided on this podcast.

Links from Today’s Episode

For Public Housing Residents That Deaunna Mentioned at the beginning of the episode.

hud.gov

Special Application Center for HUD

312-353-6236

https://www.hud.gov/program_offices/public_indian_housing/centers/sac/homeownership

https://www.endslaverynow.org/learn/slavery-today/bonded-labor

Bonded labor, also known as debt bondage and peonage, happens when people give themselves into slavery as security against a loan or when they inherit a debt from a relative. It can be made to look like an employment agreement but one where the worker starts with a debt to repay – usually in brutal conditions – only to find that repayment of the loan is impossible. Then, their enslavement becomes permanent.

Show Notes

Introduction

• Podcast: Drink, Smoke, Stocks, Crypto Podcast
• Host: Antonio
• Guests: Kenneth, Otis, Deanna, Grace
• Topic: Real estate and stock trading discussions

Beverages Discussion

• Antonio's drink:
• Starbucks black hazelnut
• Butterscotch (like grandma candy)
• No vodka because it’s 11:02 a.m. and not on the breakfast menu
• Deanna's drink:
• Folgers Classic Roast with caramel macchiato creamer
• Otis' drink:
• Black Crown Smooth and Coke (what he would like to say)
• Reality: Sweet tea (day drinking not on the breakfast menu)
• Ken's drink:
• Water
• Last night: Hot toddy
• Grace's drink:
• Nothing currently, under the weather (cough drops)

Institutional Precision Intraday Trading Advisor

• Development update:
• Antonio finalized the code for his Institutional Precision Intraday Trading Advisor on October 17th
• The tool is private, for invite-only stock students
• Link in show notes for those interested in stock class and advisor access
• The tool answers all trading-related questions and provides status updates
• Antonio's employees:
• 40 employees, with this trading advisor being one of them
• Future plans: Employees that will trade automatically for the users (still in development)
• Testing feedback:
• Grace has tested the advisor and successfully received answers to her questions
• Otis hasn't tested yet but plans to

Question: Should We Create a Business for Our Investments?

• Grace’s question:
• Should an investment firm be created to align with the five tiers from the credit and business funding class?
• How does this align with a holding company and trust?
• Should it be a specialty LLC or operational?

Detailed Answer

• Otis’ response:
• If you create a business for investments, you’d be considered a professional trader.
• Requirements: Maintain at least $25,000 in your account at all times to hold this designation.
• There's significant paperwork involved.
• Benefits: You can write off many expenses related to trading, such as:
• Cable subscriptions (if used for market research)
• Magazine subscriptions related to investments

Additional Comments

• Antonio’s note: He plans to expand on Otis’ answer with additional insights from his experience

Business Setup and Financial Strategy

• Software costs:
• Software for trading and business can be expensive but offers benefits in the long run.
• Time is required to meet the qualifications for professional trading or business setup.
• Recommendation: Start personal trading until you reach a minimum of $25,000, ideally $30,000, before considering business formation.
• Income allocation:
• Push income from trading towards real estate investments once you've built sufficient capital.

Understanding Money Laundering (Three Phases)

1. Phase One: Acquisition and Infusion

• Most risky phase of money laundering.
• Example: Acquiring illegal funds and infusing them into legitimate systems (e.g., Al Capone's laundromat).
• The initial transaction of receiving the illegal money is the most traceable and where legal protections focus.

1. Phase Two: Changing Hands

• Shift the responsibility of the money from one person to another.
• Example: Otis receives $10,000 and is asked to send $600 to a third party (driver) to disperse the money and reduce the risk.
• This step is crucial for distancing the original transaction from the illegal source.

1. Phase Three: Legalizing the Money

• Multiple movements and transactions to legitimize the funds.
• Example: Splitting money, sending portions to different people, and turning it into legitimate income.
• The money eventually comes back as legally clean, with taxes paid and a new transaction trail.

Practical Example: Stock Trading and Income Shifting

• Scam example:
• Spam emails requesting to transfer money through PayPal or cash a check are forms of money laundering.
• Personal example: Antonio couldn’t get a Wells Fargo account due to being scammed as a teenager.
• Steps in the laundering process:
• Step One: Acquire illegal funds and infuse them into the system (high risk).
• Step Two: Shift responsibility by changing hands, moving the money to different accounts or people.
• Step Three: Push the money into an ecosystem where it becomes legitimate, legal, and clean.

Capitalism and Money Laundering

• Wealth-building analogy:
• Every investment strategy is similar to money laundering—legally turning one form of capital into another income-producing asset.
• Step One: Acquire stock money and income from trading.
• Step Two: Infuse the stock money into real estate or other investments quickly to avoid heavy tax liabilities.
• Capitalist perspective:
• Taxes on income are seen as a "penalty" on wealth accumulation. The goal is to minimize tax exposure by shifting income to assets like real estate or other investments.

Practical Application to Stock Trading and Investments

• Trading taxes:
• Stock income is taxable, and the tax liability rests on the individual (e.g., 15%–45% tax rate depending on circumstances).
• Action: Move stock money out of accounts immediately after cashing out to avoid heavy taxation and reinvest quickly.
• Example with Otis:
• Long-term trader can leave funds in stocks as long as needed (still in Phase One).
• Upon cashing out, funds should immediately be moved into another asset (Phase Two).

Capitalism and Income Taxes

• Antonio's belief:
• Earning income through labor and taxable sources is seen as economically disadvantageous.
• Trading time for money or earning taxable income at high rates (15%–45%) is compared to being "illegal" within a capitalist framework.
• Advice:
• Shift money earned from stocks or labor into income-producing assets like real estate to legally minimize tax liabilities and increase wealth.
• General statement:
• The process of acquiring, shifting, and legitimizing income (through investments like stocks or real estate) is key to financial success and reducing tax exposure.

Tax and Income Strategy

• Antonio's stance on taxes:
• Advises listeners to stop paying excessive taxes.
• Income tax: Antonio often emphasizes the burden of income tax and how it impacts wealth.
• Example with stock market income:
• Deanna’s stock market earnings are considered income, which is subject to income tax.
• The government taxes income heavily because it views it as the primary source of revenue.

Process of Obtaining Income

1. Personal Income Process:

• Ken (hypothetical example): To obtain income, Ken must fill out numerous forms (job applications, IRS forms, etc.).
• Details required: Name, social security, address, job history, GPA, dependents, and more data points.

1. Business Income Process:

• Otis (hypothetical example): For business income, the process is much simpler—answering a few questions about the business’s EIN, name, and state of incorporation.
• The system requires far less oversight for generating business income compared to personal income.

Asset Rich, Cash Poor

• Capitalism's setup:
• The system aims to keep individuals either asset-rich or cash-poor, but never both.
• If individuals have cash, they won’t have assets and vice versa.
• Example: If given cash, individuals can’t have assets unless they pay for them with the cash, leaving them without liquidity.

Stock Trading Strategy and Tax Implications

• Otis' strategy:
• Currently holding options that expire in March 2025.
• Plans to close the position on the first working day of January to avoid 2025 taxes.
• Currently up 414% on his investment.
• Tax avoidance:
• Antonio advises against paying excessive taxes and suggests that Otis "launder" his income by reinvesting it into income-producing assets.

Money Laundering as a Wealth Strategy

• Money laundering analogy:
• Antonio emphasizes that wealth-building strategies in capitalism mirror the steps of money laundering.
• Step One: Acquisition and infusion of money (e.g., acquiring illegal funds or stock income).
• Step Two: Changing hands of the money (e.g., investing in real estate or assets to shift tax liability).
• Step Three: Legitimizing the money (e.g., turning it into legally clean money with taxes paid and no further liability).

Legalization of Formerly Illegal Practices

• Antonio’s example:
• Drugs: Selling drugs (illegal) becomes legitimate if done through pharmacies with proper certifications.
• PhD (Phenomenal Drug Dealer): Antonio humorously explains that doctors with prescriptions are essentially "legal drug dealers."
• Wealth-building analogy:
• Congress has legalized what was once illegal (e.g., drug dealing, money laundering) under different names and regulations.
• Wealth-building is just a legal form of money laundering when it comes through Congress.

Earning Income vs. Building Wealth

• Earning income is penalized:
• Income from labor is taxed heavily (15% to 45%).
• Antonio views earning income through labor as financially disadvantageous in capitalism.
• Wealth-building strategies:
• Take income from trading and immediately shift it into assets to avoid high taxation.
• Real estate and stocks are examples of income-producing assets that can shield individuals from excessive taxes.

Becoming a Professional Investor

• Professional trader requirements:
• Otis considers becoming a professional investor to maintain $25,000 in his account.
• Antonio explains that this would allow Otis to start money laundering from the beginning through an investment firm, which allows for different tax treatments.

Business Income vs. Personal Income

• Investment firms:
• Starting an investment firm allows individuals to shift responsibility for taxes to the business, reducing personal tax liability.
• This mirrors the money laundering process by allowing income to be shielded and reinvested legally.
• Business setup advice:
• Antonio recommends setting up an investment firm to shield income from heavy taxation.
• This strategy eliminates Step One of money laundering (the risky part) and allows income to flow into assets more easily.
• Capitalism’s design:
• The system is designed to protect businesses and penalize individuals through heavy taxation on income.