Wealth Formula Podcast

My mission at Wealth Formula Podcast is to provide you with real financial education.

You may have heard of something called the Dunning-Kruger curve. In short, when you start learning something new, you know that you don’t know anything. That’s the safe zone.

The dangerous part is what I call the red zone—when you’ve learned just enough to think you know a lot, but really… you don’t. Then, eventually, if you keep learning, you get to the point where you finally realize how little you actually know—and how much more there is to understand.

That’s kind of where I am now.

And so, the only thing I can do—and the only thing I encourage you to do—is to keep learning more than we knew yesterday.

Take this week’s episode.

We’re talking about Employee Stock Ownership Plans, or ESOPs.

Until recently, I didn’t fully understand how they worked. And I’d bet most business owners don’t either.

Which is exactly why this episode matters.

Even if you don’t currently own a business or a practice, I still think it’s important to learn about strategies like this—because someday you might. And in the meantime, you’re expanding your financial vocabulary, which is always a good investment.

So, what is an ESOP?

At its core, an ESOP is a legal structure that allows you to sell your business to a trust set up for your employees—usually over time. It’s a way to cash out, preserve your legacy, stay involved if you want to, and unlock some massive tax advantages in the process.

But before we talk about all the bells and whistles, let’s address the number one question that confuses almost everyone—including me:

Where does the money come from?

If you’re selling your company to a trust, and your employees aren’t writing you a check… how the hell are you getting paid?

Here’s the answer:

You’re selling your business to an ESOP trust, which is a qualified retirement trust for the benefit of your employees. That trust becomes the buyer. But like any buyer, it needs money.

So how does it pay you?

There are two main sources:

Bank financing – Sometimes, the ESOP trust can borrow part of the purchase price from a lender.

Seller financing – And this is the big one. You finance your own sale by carrying a note.

That means you get paid over time, through scheduled payments—funded by the company’s future profits. The company continues to generate cash flow, and instead of paying it out to you as the owner, it pays off the loan owed to you as the seller.

So yes—it’s a structured, tax-advantaged way to convert your equity into liquidity using your company’s own future earnings. You’re not walking away with a check on Day 1—but you are pulling money out of the business steadily and predictably, often with interest that beats what a bank would offer.

And here’s the kicker:

If your company is an S-corp and becomes 100% ESOP-owned, it likely pays no federal income tax, and often no state income tax either. That means a lot more money stays in the business—available to fund your buyout faster.

If you’re a C-corp, you might even qualify for a 1042 exchange, which can defer or eliminate capital gains taxes entirely if you reinvest the proceeds in U.S. securities.

And here’s something the experts probably won’t say out loud—but I will:

This isn’t always about selling your business.

Sometimes, it’s just a very clever way to get money out of your business and pay less tax.

You’ll hear ESOP consultants talk about legacy and succession planning—and that’s all true and valuable. But in reality, some owners use ESOPs as a pure tax play.

They stay in control, they keep running the business, and they simply create a legal structure that lets them pull money out tax-efficiently while rewarding employees along the way.

Think of it less like a sale and more like a smart internal liquidity strategy.

You still own the culture. You still drive the direction.

But you’re also getting paid—often better than private equity would pay you—and doing it on your terms, with serious tax savings.

Now, what if you actually do want to exit and walk away?

That works too.

If you’ve built a solid leadership team, you can sell the company to the ESOP, step back, and let them run it. Or the ESOP trust can sell the company later to a third party.

In fact, ESOP-owned companies often become more attractive to buyers because they tend to be profitable and well-run.

So ESOPs don’t limit your exit—they give you more ways to exit. On your terms.

Today on the show, I speak with Matt Middendorp, Director of ESOP Consulting at Vision Point Capital.

He works with business owners across the country to help them figure out whether an ESOP is the right move—and walks us through how the whole thing actually works.

This is complex stuff. That’s why it’s so important to hear it from someone who does this every day.

Not long ago, I made the case that it’s not too late to buy Bitcoin—even after it crossed the $100,000 mark. Why? Because the nature of the opportunity has changed. When governments and institutions start stockpiling a finite asset, you’re no longer just betting on price—you’re watching a new system take shape.

And interestingly, a very similar story is unfolding not in financial markets, but in orbit.

For most of the last century, space was strictly the domain of governments. NASA, the Department of Defense, the Russian and Chinese space agencies—these were the only real players. Private capital didn’t have much of a role. That changed with SpaceX.

SpaceX didn’t just innovate—it obliterated the cost structure. In 2010, it cost about $50,000 to launch a kilogram into orbit. Today, thanks to the reusable Falcon 9, that cost has fallen to under $2,000—and Starship could bring it below $500. These aren’t marginal gains. These are cost reductions that unlock entirely new industries.

We’re now seeing an explosion of opportunity: satellite internet that connects the most remote parts of the globe, smartphones that communicate directly with orbiting satellites, and AI-enhanced imaging tools that monitor everything from crop health to military activity in real time.

Last year alone, space startups raised nearly $13 billion in private investment, even in a tighter funding environment. And Morgan Stanley projects the space economy could surpass $1 trillion by 2040—double its current size. Perhaps most surprising of all: over three-quarters of global space revenue today comes from commercial activity, not government programs.

This isn’t science fiction. It’s infrastructure. It’s logistics. It’s telecom. And yes—it’s investable. And that’s why we are talking about it on this week’s episode of Wealth Formula Podcast.

When I was a young surgeon just coming out of residency and finally started making some money, I had to do something I’d never done before: find someone to do my taxes.

Naturally, I asked around. I went to the older, more experienced surgeons in my group and said, “Who do you guys use?” A few names came up, but one firm kept coming up over and over. So, I figured it was probably a good idea to go with them.

One of the main things people said about this firm was that they were “conservative.” At the time, that sounded like a good thing. In hindsight, it absolutely wasn’t.

You see, the problem with how high-paid professionals—especially physicians—choose tax professionals is that we confuse what “conservative” means in different contexts.

As a surgeon, being conservative is a virtue. You don’t operate unless you absolutely need to. You’re cautious. That kind of conservatism saves lives.

But taxes? That’s a whole different game.

The vast majority of the tax code isn’t about when you have to pay taxes. It’s about when you don’t have to. It’s about the legal strategies and frameworks that allow you to keep more of what you earn. It’s not black and white—it’s grey. And to navigate the grey, you need someone who understands how to interpret the code, not just read it like a rulebook.

A “conservative” CPA, in that world, is someone who avoids the grey entirely. They stick to the simplest interpretations, ignore all the nuance, and frankly, don’t work that hard to save you money.

And that’s not what you want in a CPA.

I learned that the hard way. The first couple of years, I basically paid more than I should have because I didn’t know any better. Eventually, I figured it out.

Now, to be clear—there are CPAs out there who work hard, understand the tax code deeply, and can make a huge difference in your tax liability. But chances are, you don’t know them. Because you’re asking your colleagues. Or you’re using the same firm your parents used.

If that sounds like you, I’d encourage you to reconsider before you waste another year failing to optimize your taxes.

One of the guys I think does get it—who really understands how to interpret tax law and save people money—is Casey Meyeres. And he’ll be my guest on this week’s Wealth Formula Podcast and we will discuss the latest tax bill put out by congressional republicans.