Wealth by Design

As an entrepreneur or small business owner in today's world, making money is important to you. Having autonomy over your work and making your clients and customers happy is also important to you. But so is giving back. Maybe you donate a percent of your profits to a cause you love, or you volunteer at a charity close to your house. As your business grows, though, you may be wondering how you can give back even more. This has been a frequent topic of discussion among Worth It listeners, so we finally dove into it on this episode.

In this episode, we talk about the 3 ways you can give back and make an impact: donating cash, starting a donor-advised fund, or creating a private foundation.

03:20 The misconceptions about private foundations

04:11 What we learned about community funds from a luncheon

04:46 The idea of leaving a legacy that goes on long after you're gone

05:05 How to support your heirs and the community with your funds

07:30 3 different ways to give and have an impact

08:06 The easiest way to give back

10:17 How to participate in a donor-advised fund

11:30 Why community funds are becoming so popular

12:23 The downfall of creating donor-advised funds or private foundations

14:40 How a private foundation operates

17:30 What it takes to create (and run) a private foundation

19:08 The two types of private foundations

20:38 What it takes to donate to a donor-advised fund

22:44 The benefits of donating cash

This form of giving back involves simply donating money to a charity of your choice. If you're passionate about your local animal shelter or a national nonprofit like the American Cancer Society, donate! You can get a tax deduction for giving to charities if you itemized deductions, but you have to give enough to past the standard deduction to make itemizing worth it.

If you're a big cash donor, you might want to talk to your CPA or CERTIFIED FINANCIAL PLANNER™ to make sure you're accounting for those donations on your taxes. Other than that, cash donations are pretty straightforward and easy for anyone to do, regardless of their assets. Remember: even $5 can go a long way!

Have some cash to donate? This option might be best for you because it's:

• Hands-off
• Easy as pie
• Instant impact (you don't have to do anything)

A donor-advised fund is a charitable giving fund that is created to manage donations on behalf of an organization, family, or individual. Basically, a donor-advised fund is created by a person or business and donors then advise on how to donate the funds. Funders get some control over the money and how it is distributed to charities, but for the most part, it's a great way to give back to causes without investing a ton of time.

This is similar to the endowments you see with higher education; people can donate into an endowment, but then the school or organization can decide what to do with the money. Like the idea but want to keep it local? You can also start a community fund, which gives back to people and causes in your specific community but operates in a similar capacity to the donor-advised fund or endowment.

If you're wondering if a donor-advised fund is right for you, here are a few signs:

• You have a few thousand to start it off (you can open a donor-advised fund with any amount of money, but $5,000 to $10,000 is a good rule of thumb)
• You want some control to ensure your money goes to a general cause (the arts, animal welfare, etc.).
• You don't want to manage day-to-day operations or be heavily involved in the charities you support

There are two types of private foundations: operating foundations (you have an active part in the charities the foundation is supporting) and non-operating foundations (you're just dispersing funds to charitable organizations). When you think of private operating foundations, think of Oprah and Bill Gates. Their foundations do a lot of work and they're often the "figureheads" of the foundation — but you don't have to be. You can also start a non-operating foundation and be as hands-on or off as you want with the charities your foundation supports. However, you'll still likely need to be involved in the foundation in some capacity.

A lot of times, these private foundations are created after someone dies and their wealth is used to fund them, but you don't have to wait for that! It's possible to add to a private foundation over the course of your life, contributing to it until you are happy with the "starter funds" and can begin operating as a private foundation.

There are also tax benefits to starting private foundations, which can get a little confusing. Operating foundations can deduct up to 60% of their adjusted gross income, while non-operating foundations can deduct up to 30% of theirs. Of course, once you get to this level of giving back, you'll need a team of financial pros to help you with these tax strategies and decisions.

Is a private foundation right for you? It might be if:

• You have over $500,000 to start it off (as a general rule of thumb)

• You want complete control over where the assets go
• You want to manage it and be involved in day-to-day operations
• You're OK with distributing 5% of the total amount each year

Now that you know the 3 most common forms of giving back, we want to know: Which one is right for you? Hopefully, this episode of Worth It has highlighted the different ways you can give back in your personal life and business — plus the pros and cons to each option. Of course, it's not always cut and dry.

If you have questions about donating or setting up funds like this, you should definitely speak to a CERTIFIED FINANCIAL PLANNER™ who can help. And if you're not ready to give like this quite yet, just bookmark this episode so you can reference it later!

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We've all heard the importance of investing in ourselves. Whether it's investing in an executive coach, in the right clothes, or in your personal development, Dustin and Danielle have covered the gamut in past episodes. But on today's episode of Worth It, they're taking a different angle. In the Pitfall Series, they've been talking about the pitfalls of investing in the wrong arena and in the wrong advisory team, but today they're talking about the pitfalls of not investing in yourself (and your future).

Instead of talking about coaches or employees or "traditional" self investments, Dustin and Danielle are talking about investing in a backup life bank so you can take care of yourself and your loved ones, not just now but in the future.

[03:15] The importance of counterintuitive thoughts in life and investing

[05:04] What inversion means and how it can be a great skill

[07:03] What inversion has to do with escape pods

[07:32] How to figure out the bare bones of your income

[09:03] What your back-up 'life bank' and trapezes have in common

[11:08] The 4 ways to start building your 'life bank' today

[13:17] The formula to figure out how much you need in your 'life bank'

Charles Munger, Warren Buffett's right-hand man, once said:

"Invert, always invert: Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Where don't we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead - through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I'm going to die, that is, so I don't go there."

But what does that have to do with investing in yourself?

In the podcast, Dustin and Danielle break it down by explaining that investing in yourself isn't about just planning for (and investing in) things you want to improve. It's also about planning for (and investing in) things that could go sideways. This means getting disability and life insurance and saving up a "life bank" fund that allows you to keep the lights on and your business afloat should you fall ill or, worst case scenario, die.

Nobody really likes to think about their mortality and the risks of illness, but the reality is that not planning for the worst means you're not investing in yourself. So Dustin and Danielle are breaking down what it means to "invert" your self investments… and start planning for your life.

This short-and-sweet episode offers up some actionable advice if you want to invest yourself — your future self. In it, Dustin and Danielle recommend that you:

1. Get disability and life insurance. This protects you and your business, as well as your family so everyone is covered if something should happen to you.
2. Determine your minimum level of living. What do you need to live? This doesn't include fancy dinners out, vacations to the UK, or that splurge buy you have every few months. This is what you need to eat, sleep, and live. This may take some cutting out of your normal budget, so Dustin and Danielle recommend taking that time.
3. Do the math. To figure out how much you need to invest in your life — what Dustin and Danielle call your "life bank," you can multiply your yearly minimum level of living and multiply it by 25. That's the gross amount you need in liquid investments. They call this the Rule of 25.

For example, let's say you've figured out that you need $50,000/year. That formula is $50,000 x 25, which equals $1.25 mil in invested assets. But why do you need so much? Listen to the episode to find out.

4. Invest in a balanced portfolio. Of course, to get to that x25 number, you'll need to do more than save. You'll also need to diversify that money in different investments that can get you compound interest — and leave it in there. This "back up life bank," or BULB as they call it, isn't like your emergency fund. Instead, it's about investing in a long life and your future.

Want to hear more about how to get this "life bank" and how it can help you invest in yourself, your future, and your family? Check out the episode and, of course, share it in a friend so they can invest in themselves, too.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

• The Rule of 25, Episode 63
• All Hail the Counterfactual by Barry Ritholtz
• Inversion: The Critical Skill No One Taught You by James Clear
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As part of the Pitfalls Series, Dustin and Danielle are talking about investing in the wrong advisory team. When you start your business, you may hire an assistant, a graphic designer, or some other professional who helps you execute and deliver your daily work. Of course, these individuals are highly important to the success of your business. But that's not what Dustin and Danielle are talking about today. Instead, they're talking about the professional you choose to work with — and take advice from.

06:45 How your perception of money changes as you start earning more

08:13 Why your advisory team is just as important as your staff

08:43 One of the common mistakes we see regarding who entrepreneurs trust

09:40 Types of individuals on your advisory team

10:58 Why bookkeepers, coaches, CPAs, and attorneys are great… but not for everything

12:48 The limits of what to expect from other advisory team members

14:30 The risk of "conflict of interest" when it comes to taking advice from certain professionals

15:24 Hustlers and friends and how to spot them

16:28 Why you should be talking to other business owner and entrepreneur friends about their advisory team

19:24 Why CERTIFIED FINANCIAL PLANNER™ professionals are like quarterbacks

20:47 How to find the right advisory team for you

Because investments are still one of those "mysterious" topics that not a lot of people have exposure to, it can be really hard to know who to trust and whose advice to actually follow. When you have a cousin, friend, or fellow business owner who has made a series of investments and seen (or told you they've seen) great returns, it can be tempting to follow in their footsteps or take their experience as fact. But as Dustin and Danielle explain in this episode, that can be a huge mistake.

In general, entrepreneurs and business owners tend to have a number of professionals they rely on and trust. Your bookkeeper or Certified Public Accountant may help you manage your day-to-day business income, pay taxes, and even cut overhead costs. But none of that means they're qualified to give you investment advice.

Executive coaches can help you grow your business and even resolve some of your mindset blocks around money. But that doesn't mean they have experience with investments and, therefore, shouldn't be giving you investment advice. Attorneys are extremely useful, especially when it comes to helping you structure your business or apply for trademarks, like Joey Vitale of Indie Law can. But they're not experts in investments.

Insurance agents will help you protect your business, home, and life… but they're also not investment advisors. Friends and business owners who have a "great investment idea for you" are — you guessed it — not to be trusted for investment advice.

Of course, Dustin and Danielle aren't saying you should listen to these experts' opinions and experiences with investments. You just shouldn't take their advice as your own plan of action. Especially when these people benefit from your decisions. CPAs, for example, may only recommend investments that save you on taxes, which doesn't always benefit you in the long run. Attorneys may recommend investments with a certain professional with whom they have a referral agreement. Friends and business owners with investment ideas are usually just hoping to get money to support their business or ideas.

At the end of the day, it doesn't matter who these people are. If they're not qualified to offer investment advice, Dustin and Danielle recommend that you take what they say with a grain of salt. Then find a real professional who can offer you the guidance you need.

Dustin and Danielle break down your advisory team in this episode, explaining that each of the professionals above all play their own role. But sometimes, you don't have these roles filled yet. If that's the case, a CERTIFIED FINANCIAL PLANNER™ can serve as your advisory team's quarterback; they know about taxes, estate planning, insurance, etc. but they're looking at the high-level picture. Once they know the play, your CERTIFIED FINANCIAL PLANNER™ can pass the ball to other experts who can help make the most informed decisions that are right for you. A CERTIFIED FINANCIAL PLANNER™ can also tell you, based on your situation, which other members you need on your advisory team.

You've got your team in place when it comes to your staff and daily operations, but you need to make sure that you have the right experts on your side as well. Recruiting the wrong advisory team can be a lot more detrimental to your business (and yourself) than just hiring the wrong assistant, for example.

Tune into the full episode to hear how Dustin and Danielle explain why an advisory team is so important, who should be included (and excluded), and why investment advice is so valuable for you, your business, and your future.

If you're thinking about hiring a CERTIFIED FINANCIAL PLANNER™, you can take the quiz below to see if Toujours Planning is right for you.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

• Our Resource Vault
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In this new 3-part series, we're talking all about pitfalls in investing. Whether you're investing in actual investments, in a team for your business, or not investing in yourself, there are a number of "uh-oh's" we all encounter at some point. But Dustin and Danielle are hoping to raise some awareness of these pitfalls so that Worth It listeners don't have to encounter them.

In this first part of the series, Dustin and Danielle are talking about the pitfalls of investing in the wrong arena.

02:16 Why you're losing money if you're just saving

02:47 The reason real estate is a big pitfall

03:54 Danielle's horror story about a "property management" company

10:20 Why making money leads to fear

10:33 All about the "sharks" that come out when you start making money

11:25 The pitfalls of private equity

11:58 The hubris that sometimes comes with being successful in business

12:53 The similarities between Monopoly and real life

14:23 The real definition of speculation

16:29 Other ways you can contribute and give back

17:20 The downfall of collectibles (it's not just your Ty beanie babies)

20:04 Why you have to be careful about who you trust

22:24 What you can do to avoid these pitfalls

23:32 The benefits of public diversified funds

23:48 Why hands-off, passive investments are best for busy entrepreneurs

24:47 Why you should still pursue these other asset classes if you enjoy them

Do you think real estate is a good option for all that extra cash on hand? You're not alone. 85% of Millennials think investing in real estate is a smart option, and it may be… for some. Dustin and Danielle touch on the unexpected risks associated with real estate, including a horror story about a "property management company" that lost a couple multiple thousands of dollars and many months without a renter. While real estate can be a great option, especially if it's your business or your passion, it's not always the best choice for people who are new to investments and property management. Listen to the episode for a few alternatives and a few things to keep in mind if you're actually considering real estate as an investment.

Who doesn't love Shark Tank? A panel of venture capitalists basically offering thousands of dollars to back the next great thing. Unfortunately, though, people sometimes forget that Shark Tank is just good TV — real-life private equity isn't that easy or safe. In fact, the investors on that show are very strategic about their investments and have clear contracts stating how they can get their money back.

In the episode, Dustin and Danielle talk about how many entrepreneurs feel the call to "give back" or "share their knowledge" when it comes to building a successful business. But remember: just because you've had luck with your business doesn't mean that you're an expert in all businesses. They also note that, once people come into money and start having a lot of cash, other peoples and companies come out of the woodwork asking if they want to invest. This can feel like a song that you've officially made it, but it doesn't mean that it's a smart investment. Most venture capitalists know they're going to lose money on the majority of their investments (95% of them aren't profitable) and they've been doing this for years. If you're sinking all your cash into a company thinking you're going to be profitable in no time, you may be sorely surprised when you lose it all.

So… if real estate and private equity aren't your best bets, what is? In the episode, Dustin and Danielle talk about savings and investments — the stock market kind. Most people find the stock market to be risky, especially after 2008. But actually, there are a number of benefits to public diversified funds that you can't find with other types of investments:

• Low cost
• Low stress
• Low involvement (unlike real estate and private equity)
• Low research
• Low maintenance
• High liquidity

So when should you start investing in public diversified funds? Dustin and Danielle say to build up your 3 to 6-month emergency fund, then invest the rest. (If you're not sure how much cash you need on hand, check out Episode 69 and use the Cash on Hand Calculator). It's really easy to start investing — you can work with a financial planner or even "DIY it" online with tools like Vanguard, Charles Schwab, Swell, and more.

The big takeaway from this episode? Diversify. If you want, you can do real estate, invest in businesses, start a side hustle, whatever you want. You can also invest in stocks (some of which are actually real estate and startups!). If these asset classes really light you up and you love managing properties or helping businesses grow, do that. But invest in public diversified funds and also save liquid cash. Never put all your eggs in one basket; that's how you save for the future and make sure your wealth is secure.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

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In this episode of Worth It, Dustin and Danielle have a special guest: Joey Vitale. Joey is an attorney, speaker, and educator for entrepreneurs. He focuses on the legal aspects of creative businesses so the owners can focus on what's important — their work. On top of working with clients, Joey has also created an expert brand for himself with Indie Law, where he provides a ton of resources for creative entrepreneurs who are looking to either "DIY" their brand protections or work with his expert team.

During their chat, Dustin, Danielle, and Joey dig into what trademarking is, what it's not, and why it's so important for creatives and new business owners to really put on their "legal hat" when thinking about their business, their content, and the future.

06:20 Why niching down helped Joey's business

08:33 What it means to protect your brand

10:04 What you can do to "disaster-proof" your brand

12:24 Why that ™ designation doesn't mean as much as you thought it did

14:38 The two hurdles you have to get over to register your trademark

16:00 The importance of applying for a trademark before you launch

20:45 Why you should consider trademarking "catchphrases" as they come up

22:10 How the brand name "Elevator" has been "genericized"

23:12 The pros and cons of having an overly descriptive brand name

26:55 The current popularity of trademarking phrases

29:40 How a trademark attorney can help you understand your exact brand needs

32:06 What to consider if you're a handmade business owner

33:14 The dangers of choosing a cheaper, form-based trademark application tool

34:140 Why trademarks and copyrights aren't just a one-and-done thing

37:21 What you need to learn if you're going to do trademarking yourself

40:45 What business owners can do to start thinking about trademarks today

42:43 The one thing Joey recommends creative entrepreneurs do

44:25 Why connecting entrepreneurs to other experts is vital

This episode of Worth It answers a lot of the questions we all have about trademarking:

• What is it?
• Do you need it?
• Can you sue people for using your catchphrases or brand name?
• How do you pursue a trademark?
• What's the difference between ™ and ©?

Joey also sheds a little light on the importance of LLCs and incorporating your business so that you can better protect it against lawsuits, copyright infringements, and more. Of course, there's no one size fits all for every business or brand, but Joey dives into what a few scenarios could look like. He also shares a few resources that can help listeners either "DIY" their trademarking or enlist the support experts at Indie Law, so don't miss those.

Much of the episode is dedicated to talking about how to use business names properly, and Joey walks listeners through a few basics to make sure trademark law is a little clearer. He also talks about things like slogans, catchphrases, and even logos and how that falls under trademark and copyright law. When it comes to our current online landscape, it's important to know what you can take inspiration from, what's protected, and what's illegal.

Joey also explains the popularity of trademarking phrases, especially in the apparel and art world, and how that impacts content creators and business builders. If you've ever wondered if you can send a "Cease and Desist" letter to someone turning your tweets into memes, this is for you.

Like most creative entrepreneurs, Joey is about more than just trademark law. He's also building a community of experts who support entrepreneurs as they scale their businesses. He works with people to create contracts, establish LLCs or corporations, and (you guessed it) file for trademarks. Indie Law also offers a unique Trademark Watch service, which includes quarterly reports and monitoring for anyone who is creating something too similar to your name, branding, products, etc.

Indie Law and Joey also work with creative entrepreneurs to continually consider the trademark side of their slogans, new designs or logos, and products they create. This can all change as your business builds, so you may need to update trademarks, contracts, or legal coverage over time. He's also launching an online course for entrepreneurs who want to learn what trademarks are, what they protect, and how to do a proper search. Another program is also on the way, called LLC on the Weekend, so you can DIY your LLC if you want!

Follow Joey on Instagram @joeycvitale if you want to see more of his expertise (check out his IGTV videos) and to learn more about his upcoming courses and membership programs to really up your legal game.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

Joey Vitale is not affiliated with LPL Financial.

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There are plenty of "rules" out there about how much money you need to save up for a rainy day or an emergency, but how do you know what you need to save? This week on Worth It, Dustin and Danielle are digging into a simple formula that can help you answer that question, both for personal savings goals and for your business.

07:05 Why most Americans are not prepared for an emergency

07:33 Why cash is a parachute, not an airplane

09:49 How much cash should you have on hand?

10:34 How much cash you need on hand for the short-term

11:16 Why your business cash savings should mirror your personal savings

12:25 What you need cash on hand for in your business

13:20 What you need to save if you have a business that earns $1mil in revenue

17:15 Why you need to consider your aversion to risk before calculating cash

17:35 The role your business industry and stability plays on calculations

19:27 Why long-term strategies should be implemented with short-term savings

20:32: What are the types of investments you want for your intermediate bucket

22:58 Juggling different savings goals

When it comes to calculating what you need to save for an emergency — or to keep the lights on should your business hit some bumps — it helps to have a clear formula. That's exactly what Dustin and Danielle provide this week on Worth It.

In the episode, they talk about different elements of your "short-term savings bucket":

• Personal emergency funds. These are 3-6 months of expenses, including your rent/mortgage, utilities, food, transportation, etc. If you run your own business and rely on income from that, it's always best to err on the side of caution and focus on saving up at least 6 months' worth of expenses.
• Personal spending goals. These are goals you have the for the next 2-3 years, and include things like buying a house or that sweet Tesla Model X.
• Business operating cash. Just like your personal emergency fund, your business should have 3-6 mos of expenses saved up. This includes payroll, leases, monthly software charges, utilities, etc.
• Business investing cash. This cash fund will support any business investment goals you have over the next couple of years. This might include a new office, training, conferences, software, executive coaches, etc.

To make this a little clearer, Dustin and Danielle share an example in the podcast to demonstrate exactly how you should save. Let's say you make $1 million revenue from your business, and you spend $10,000 a month to keep your household running.

In this case, for a 3-month personal emergency fund, you'd need $30,000.

For 3 months of business operating cash, you'd need about $250,000.

How did Dustin and Danielle come up with those numbers? This simple formula:

Total monthly expenses x 3 = your bare minimum emergency fund

For larger funds or more volatile income, Dustin and Danielle recommend that you up the monthly multiplier to 6. The Cash on Hand Calculator inside of the Toujours Planning Resource Vault makes it even easier for you to find this magic number.

So what do you do with your money once you've got these short-term "savings buckets" filled up? You start with your intermediate and long-term savings goals. This is where you can start investing in less liquid assets that offer compound interest, but it's best to do that with the help of a CERTIFIED FINANCIAL PLANNER™.

If this is all overwhelming, seek help from a CERTIFIED FINANCIAL PLANNER™. And if you want help figuring out how much cash you need on hand and how much to invest, Toujours Planning may be able to help. Take our quiz to see if we're a good fit.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

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Now that April 15 has passed, you're probably over the idea of taxes. But taxes aren't just something you should think about when it comes time to file, especially if you're a business owner or entrepreneur. You should have some passing knowledge of taxes, new changes that affect your business, and how to leverage that knowledge so you don't pay more than you have to.

This week on Worth It, Dustin and Danielle are giving you a brief rundown of three tax topics they think every taxpayer should understand: new tax rules, ETF strategies, and capital gains and losses.

WHAT YOU'LL LEARN

01:15 Why you need to think about taxes year-round

3:00 New tax rules and what they mean for your tax return

4:05 How fewer taxes withheld is good for you

4:25 Why you should be contributing to retirement monthly

5:15 New maximum contributions for retirement and health savings accounts

8:00 How much you can contribute to your HSA

9:25 What an "ETF" is

10:40 How ETFs are different from other funds

11:05 What tax loss harvesting really is

15:05 The definition of capital gains and losses

15:20 Deductions for capital losses

16:55 Why it's important to have a team of financial professionals

NEW TAX RULES AND WHAT THEY MEAN FOR YOU

Keeping up with the tax code isn't your job, but understanding major changes is a huge benefit to you. To make this is a bit easier, Dustin and Danielle break it down for you. In the episode, they talk about new tax changes that are allowing taxpayers to bring home from their paychecks, but that also means they're not getting a refund. For many people who are accustomed to receiving a refund, this may come as a shock. But Dustin and Danielle explain this is actually good news: it means you're paying less in taxes upfront and keeping more throughout the year.

But for those who are used to using that big tax refund to roll into retirement or business profit, it can be a bummer. That's why Dustin and Danielle walk you through the importance of monthly retirement contributions. Tune in if you want to learn more about the tax benefits of contributing to your retirement accounts throughout the year.

They also talk about new maximums for retirement and health savings accounts. As of 2019, the new maximums are:

• Roth IRA and traditional IRA: $6,000
• SEP IRA: $56,000
• Simple IRA: $13,000
• HSA: $3,500 single, $7,000 married

As usual, Dustin and Danielle recommend maxing out your accounts so that you can build wealth, so keep these numbers in mind as you contribute throughout the year. If you are unsure about the difference between these retirement accounts, you can also check out Worth It Episode 62, where Dustin and Danielle break down the most common types of retirement accounts for business owners and self-employed individuals.

ETF STRATEGIES AND TAX LOSS HARVESTING

One element of taxes that many people don't know — or understand — is ETFs. ETFs stand for Exchange Traded Funds, and they're important to all of your taxable accounts (savings, investments, etc.). With ETFs, Dustin and Danielle explain, you don't have to pay out capital gains distributions each year. This means that you don't have to pay extra taxes.

But the main reason people should use ETFs, they explain, is because you can use tax loss harvesting. Tax loss harvesting is the selling of securities or investments at a loss to offset a capital gains tax liability. This is useful because, if you sell a fund for a gain, you have to pay taxes on that gain. These can be taxed at a very high rate. But with tax loss harvesting, you can sell ETFs that have collected losses to avoid paying those capital gains taxes. While this can be complicated, it's a useful tax strategy to keep in mind, especially when speaking to your tax professional or financial advisor. Ask your financial advisor if they know this strategy and, if they don't, move on to someone who does.

CAPITAL GAINS AND LOSSES

Capital gains are essentially a profit you make from the sale of an asset, such as a stock. A capital loss, on the other hand, is the loss you pay if you sell an asset for less than you purchased it. When you receive capital gains, you have to pay taxes on that, but when you collect a capital loss, you can deduct it. A lot of people don't know this, as Dustin and Danielle explain, so it goes unaccounted for on year-end taxes. But you can actually deduct up to $3,000 of capital losses each year on your taxes. In the episode, Dustin and Danielle talk about the importance of working with both a CERTIFIED FINANCIAL PLANNER™ professional and Certified Public Accountant to ensure that capital gains and losses are taken into account on your long-term investment strategy and your yearly tax filings. They also recommend that you look at all your capital gains and losses by November 30, which is something they do for all of their clients. This ensures that capital losses are properly accounted for and that you have a good picture of the taxes you will owe on capital gains and losses come April 15.

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Of course, if you're like most people, all of this tax information can be overwhelming. That's why Dustin and Danielle recommend having a team of financial professionals on your side. By understanding these tax rules and strategies, at least in theory, you can make sure to hire only the professionals who can leverage these strategies for your ultimate benefit.

If you're wondering where to find a CERTIFIED FINANCIAL PLANNER™ professional who can help, check out the quiz below to see if Toujours Planning is right for you.

• Tax Guide inside the Resource Vault
• Investopedia: tax loss harvesting
• The Toujours Planning Quiz — are we a good fit for your financial planning needs?
• Episode 62: Self Employment + Retirement: Savings Options
• Episode 48: How to Maximize Your HSA (Health Savings Account)

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When it comes to spending money, it's easy to see everything as an expense. Taxes cut out of your take-home pay, your car's tires eat into savings, and groceries just keep getting more expensive. But what you spend your money on can be more than just outgoing expenses; it can actually be seen as investments in yourself, your future, your business, and those around you.

On the Worth It podcast, Dustin and Danielle are discussing the investing vs. spending mindset and how it can be beneficial to view some spending through the lens of investments.

05:17 Why the Louisiana purchase was an illiquid asset

07:09 How to separate investment vs. spending in your life

07:20 The 25x Rule for saving, investing & giving

08:50 Why so many people are rethinking where they spend their money

09:52 Why taxes should be viewed as an investment

12:18 What you can do to focus on investing rather than spending

12:40 How Marie Kondo's "Does it spark joy" question can be applied to spending

12:59 Places where you're just spending (and not investing)

15:15 Why cutting costs isn't always the answer

16:25 How "spending" can help you uplevel your business

17:48 Why debt repayments aren't always better than spending or investing

18:25 Why time is critical for building on your investments

On a recent trip to the Cayman Islands, Dustin "invested" in a gold coin from a shipwreck. While there may not be an actual monetary resale value to the coin, it's an investment in Dustin's interest in history, his love of Louisiana (the coin was from a shipwreck right off the coast of New Orleans), and his memory of the family trip. Not everyone would view that coin purchase as an investment, but it's a good example of a time when the monetary cost of something provides an return that isn't necessarily quantifiable.

The same goes for other purchases, like clothes that make you feel great or help you land that new client, or an executive coach you need to build and grow your business. It can also be something as trivial as a coffee from your favorite shop every morning; it's an investment in your mood, your local economy, and your morning ritual. The most important thing, Dustin and Danielle say, is to know what brings you value, rather than what brings other people value.

Of course, there are always situations where your spending habits don't serve you — and it's usually when the money you spend doesn't bring you joy. Eating out for every meal but not feeling energetic? Cut out that part of your budget and start spending more money on healthy food you can cook at home. Have magazine subscriptions you throw away as soon as they come in? Stop wasting money and paper and instead spend that money on a New York Times online subscription. Whatever you spend your money on, it should "spark joy" as Marie Kondo says. If it doesn't, figure out where you can funnel that money that would actually spark joy. If you can't find a replacement, just save that money and cut out what wasn't working. In the episode, Dustin and Danielle give a list of examples to help jog your thoughts, so make sure to listen in.

Once you've got a good grasp on where you're spending your money just to spend it and where you're actually investing it, you can focus on saving money on things that just don't matter to you. All of this helps you invest in the more traditional sense — and prepares you for your future.

When you stop spending money on things that don't matter to you, you save money. When you invest in quality products, experiences, education, or even food, you invest in your future (and actually spend less over time). When you do both, you will be set up for success.

You'll be able to better plan for a work-optional lifestyle or retirement (Dustin and Danielle call it revivement) because, when you spend less on stuff that doesn't matter, you automatically start putting money in the right places. You'll also have more money to put to the 25x Rule (25% of your income should go to saving and giving).

But it all starts with knowing what you value — even if may seem like "just spending" to an outside observer. To hear Dustin and Danielle talk about the investment mindset and how you can adopt it to cut costs, save money, and invest in your future, check out this week's episode of Worth It.

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Mike Michalowicz, the author of Profit First, is unaffiliated with LPL Financial

The most liquid asset is cash, but what about other assets? And what does liquidity mean? On the Worth It podcast, we dive deep on what liquidity is (and is not) and what it can do for your finances.

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Which is easier to drink when you're thirsty: a block of ice or cold water straight from the tap? The tap water, right? It makes sense in this context, but many people — especially business owners — have a hard time understanding how this applies to their assets.

Liquid assets are the kind of assets that are easy to buy and sell without affecting the asset's price. This means that you, whether as an individual or as a business, can easily liquidate (sell) assets without worrying about delays in time or decreases in value. Think of the difference between selling some stock and selling a house; the stock has a very clear value assigned to it and you can sell it in a matter of minutes, while a house can take weeks to be valued, put under contract, and finally sold.

In this week's episode of Worth It, Dustin and Danielle are talking all about liquidity and why your business needs it to operate properly.

01:04 The definition of liquidity

01:25 Why liquid assets are easy to buy and sell

03:15 Why real estate non-liquidity was one of the main causes of the financial crisis

06:20 How flipping houses are just real estate speculation (and not liquid at all)

10:16 Why business owners especially need liquid assets

10:46 The negative results of illiquid assets in a business

11:50 The tendency to look at illiquid assets as "superior"

15:25 Why real estate may not be the best asset option (price drops)

16:43 People are always willing to take your money

18:12 How giving back and investing in others doesn't necessarily mean great ROI

20:13 Private equity and real estate investments aren't always in your best interest

21:45 X ways to become liquid

22:12 The difference between liquidity and speculation in your asset classes

23:02 How investing in public investments with a financial advisor can up your liquidity

As Dustin and Danielle explain in this week's episode, liquidity is kind of a big deal. One of the biggest reasons that the recession in 2008 hit so hard is the "illiquidity" (lack of liquidity) of real estate. The bubble burst and housing prices tanked; people didn't know the value of their house and they couldn't get a buyer. They either ended up being underwater (owing more than the house was worth) or they lost money on the sale of their house. If they didn't have enough liquid assets — like cash — their net worth was essentially wiped out.

Unfortunately, many people seem to have a short memory when it comes to the real estate and economic crisis of 2008.

More and more, people are choosing to invest in assets like real estate and other businesses to try and grow their wealth. But what many people may not realize is that these purchases are illiquid — they can't be bought or sold quickly, and the value of these investments can change from day to day.

As Dustin and Danielle explain, it's easy to see illiquid assets as more valuable than liquid assets because you can see them, touch them, use them, etc. It's hard to touch money or liquid assets because they're often in funds, ready to be bought or sold. However, it's hard to buy and sell illiquid assets, and it's also harder to know the value of them. Back to the crash of 2008; people often assumed their house was worth the same value as before, and they were taken by surprise when it came time to sell.

You don't want the same to happen with your personal or business finances, which is why it's important to focus on building liquid assets to counteract illiquid ones (after all, the majority of assets are illiquid, especially if you're a business). To do this, you'll need to know what really qualifies as a liquid asset.

When you have investable assets (money you want to invest) set aside, it can be tempting to consider real estate, tech, business, or other investment pitches that come your way. But real estate and private equity investments aren't liquid assets — they're speculative. Essentially, a speculative asset has a lot of risk involved in it, but it can also gain a lot of money. Think of fixing and flipping houses; that may seem like a liquid asset because you can sell the house as soon as you're done fixing it up. But the value of the house is not guaranteed — and you can't sell the asset as quickly as you'd think.

The same goes for other assets, such as private equity investments in startups or product inventions. Essentially, if there's a risk that you could lose all your money before you're able to cash out, it's a speculative investment rather than a liquid one. In the episode, Dustin and Danielle discuss why these different investments may not be the best option, especially if you're trying to up your liquid asset levels. They also talk about why investing in the stock market is one of the best ways to up your liquidity.

The stock market is composed of some of the most successful businesses in the world. Rather than investing in a single business with a high level of risk, or focusing on building a "fix-n-flip" real estate portfolio, why not look into the stock market? An investment portfolio will mix up a portfolio of stocks in a number of these businesses and will help you grow your liquid asset portfolios. A liquid portfolio can be easily sold in a matter of days to get you flush with cash, or you can keep letting these assets grow so that you have what you need to get kids through college, create your work-optional lifestyle, or weather a tragedy.

Investing in the stock market is less cost, less stress, and less overall risk than other investments or illiquid assets. It gives you peace of mind too, knowing that you'll have a liquid portfolio that can provide financial support in just a couple days. The best part? You can still start investing in these liquid portfolios without an advisor. There are a lot of great resources or you can even start an account online with any online investment firm.

If you are interested in working with a financial planner who can help you understand how much you need in liquid assets and which investments you should consider, contact Toujours Planning. You take the quiz to see if you'd be a good fit!

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

• Net Worth Worksheet inside our Resource Vault
• Investopedia: Liquidity
• Investopedia: Speculation
• The Toujours Planning Quiz — are we a good fit for your financial planning needs?

What's the first thing you think of when you hear the word "retirement"? For some, it conjures up images of golf courses, RVs, and days spent measuring blades of grass. And for many people, especially those from younger generations, those images are enough to keep them working forever.

But Dustin and Danielle don't think retirement has to be like that. In fact, on this week's episode of Worth It, they're asking listeners to reframe their definition of retirement altogether. Then, once you have a better idea of what retirement really looks like to you, you can plan for the future you really want.

02:57 The difference that Bill Gates has made

05:31 What Oprah is doing in retirement

08:42 Why you don't need to be a billionaire to make a difference

08:58 What life in retirement can look like for you

11:01 The misconceptions of retirement

11:44 How concerns over Social Security affect this generation's perception of retirement

15:32 What you can do to prepare for life in retirement

16:09 The definition of revivement (instead of retirement)

18:03 Why people are focusing on building a legacy now

18:50 How to lay the foundation for your revivement now

21:00 The importance of exploring your interests before your revivement

25:06 How to replace income in your revivement

25:38 The importance of starting to save now (not later)

28:14 The rule of thumb for retirement/revivement savings

While there are plenty of concerns about saving enough for retirement and the possible end to Social Security, most people today just don't view retirement the same way previous generations did. While older generations worked hard until retirement and then spent their time traveling or relaxing, younger generations are taking trips, start families later, and generally doing more of what they want now rather than later. Because of this, many Millennials aren't thinking of retirement (two-thirds have approximately 0% saved for retirement!), but Dustin and Danielle want to change that.

How? By changing how you review retirement. As Danielle puts it in the episode, "Don't think about it as retirement, think about it as revivement." In "revivement," you can:

• Explore new interests
• Make a difference in the lives of others
• Continue working if you want
• Stop working if you want
• Build a legacy

Essentially, you can do whatever you want when you hit retirement/revivement. With all that in mind, Dustin and Danielle then dive into how you can prepare for this phase of life.

In this episode, Dustin and Danielle explain the power of shifting your mindset from "doing nothing in retirement" to "doing whatever you want in revivement." But of course, doing whatever you want means that you'll need income to support your lifestyle. So how do you plan — and save — for that?

Dustin and Danielle dig into 3 ways to prepare for revivement:

• Change your definition of retirement. Really dig into what you think retirement will look like for you and what you want to do (the sky's the limit!).
• Start laying the foundation for your revivement. Explore what you want to do, try new things, learn as much as you can. (Dustin is a fan of juntos and finding your ikigai to help you build this foundation.)
• Figure out how to replace your income in revivement. This is where the math comes in, but don't worry! Dustin walks you through it in the episode.

If you're digging the idea of 'revivement,' you'll want to start planning for it. Savings and investments, business income, and even real estate may be able to help you collect what you need for your retirement/revivement, but there are a lot of variables that come into play. In the episode, Dustin shares his equation for finding your "revivement number" — or what you need to save up to live that work-optional lifestyle. But basically, it's:

Your Required Yearly Income x 25 = Revivement Number

For example, if you want to live on $100,000 a year in retirement/revivement, you'll need $2.5 million before you say "Adios" to work. Sound like a lot? It might be, but it's not impossible with the right plan.

Listen to this week's episode of Worth It to hear what Dustin and Danielle say about retirement, savings, and leaving a legacy. They give a few actionable tips to help you get the retirement/revivement ball rolling, as well as some things to think about for your own future.

If you want help preparing for your revivement, this is a great episode. And if you are curious about saving for "revivement" but don't know where to start, you can contact Toujours Planning. All you need to do is answer a few simple questions to see if we're a good fit for each other!

• Finding Your Ikigai
• Juntos
• 25x Rule of Thumb for retirement savings
• The Net Worth Worksheet inside our Resource Vault
• The Toujours Planning Quiz — are we a good fit for your financial planning needs?

• Ask your questions!
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