What’s Kenner French Thinking!

What’s Kenner French Thinking!

By R. Kenner French and VastSolutionsGroup.comBusinessEntrepreneurship
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What’s Kenner French Thinking! episodes

  • Tax Free Crypto - NICE!

    You can sum up the appeal of a Roth IRA in three words: federal tax benefit. Add on top of that the new potential of huge earnings in cryptocurrency and you have a powerful combination. Earnings in a Roth IRA grow tax free as long as the owner abides by the Internal Revenue Service (I.R.S.) rules, and withdrawals are federally tax free once you reach age 59½ and have held the Roth IRA for at least five years.1

    Unfortunately, some people make too much money to contribute to one. In 2021, joint filers with modified adjusted gross incomes (MAGI) of $206,000 or more and single filers with MAGI of $139,000 are not eligible for a ROTH IRA.

    There is a way for high earners to bypass these limits, however: the “backdoor” Roth IRA strategy.2

    High-income taxpayers may create Roth IRAs indirectly. This involves a little maneuvering, but may be of interest to certain investors — and also can also be invested in crypto nowadays.

    The “backdoor” IRA strategy typically starts with the creation of a traditional IRA. The contributions to this new IRA are usually non-deductible, because of the IRA owner’s high modified adjusted gross income. This new traditional IRA is fully or partly funded, and with a financial professional’s help, it is quickly converted to a Roth IRA, and any tax liability is paid.3 Sometimes finding an investment professional who has knowledge in cryptocurrency is a challenge but they are out there. Backdoor Roth IRAs are great potential environments for crypto.

    8 min
  • Looking for $100?

    If you email [email protected] and are the first to do so, you will get $100 with no strings attached.  Put "Anchor Offer" in the subject line of the email.  We want to do some research on the reach of Anchor.fm.  Good luck.

    1 min
  • A Crypto and Blockchain Q&A
    Years ago when I started investing in cryptocurrency I had seemingly millions of questions about it. Back then, there was nobody to turn to. It was the wild, wild west. People thought I was crazy for investing in virtual money that probably was going to go away like a ridiculous fad. Well, here we are years later and the same people who ridiculed me back then are asking me questions as they start to invest in crypto, NFTs, and the blockchain. Funny how things change. Anyway, I have compiled this list of questions and answers to make it easier to get started in such investments (by the way, no guarantees but I bet you will be happy if you invest in crypto, etc). Here goes…
    What is the “Blockchain?”
    Blockchain is a relatively new technology that has the potential to change the way we do business. It’s taking over in some areas, like finance and government services, but what is it? Blockchain can be defined as an online ledger of transactions that are secured by cryptography. It’s essentially a decentralized database with records organized into “blocks” which cannot be altered without changing all subsequent blocks. If you do a transaction, it is recorded forever and can not be redone.
    Is blockchain technology growing?
    Blockchain technology is growing at an exponential rate. It’s projected that blockchain will be worth $60 billion by 2024. That’s a huge jump from about $1 billion in 2017! If you’re not familiar with blockchain, it can be daunting to try and wrap your head around what blockchain is — let alone why it matters for the future of our society. Don’t worry, in the not too distant future, your everyday life will be somewhat based upon the blockchain. You will see.
    Are blockchain and cryptocurrency the same thing?
    Blockchain is a type of database that can store digital data in a way that makes it difficult for people to tamper with it. Cryptocurrency is money created by encryption techniques as opposed to being printed or minted like regular currency. For example, Bitcoin was the first blockchain-based cryptocurrency ever made. Crypto uses the blockchain as a foundation. Without the blockchain, there is no cryptocurrency, generally speaking.
    Can I get rich by investing in blockchain domains?
    Just like getting into real estate can get you rich, buying blockchain domains are a great way to get rich
    Blockchain domains are the newest form of asset available on the blockchain. Not only do blockchain domains potentially provide high financial returns, but they also provide high utility returns for blockchain application developers, blockchain service providers and blockchain project owners. The number of blockchain projects is expected to grow dramatically in 2022 with an expected increase of more than $9 trillion market capitalization in 2022. Blockchain domain investors will benefit from this massive growth in blockchain services because it creates demand for blockchain domain names much the same way that internet domains were all the rage in the 1990s. The result was that some investors made tremendous amounts of money. It is not too late to be before the crowd.
    15 min
  • Need Money for a Business? Use your 401(k) Money

    In today’s world it is tougher and tougher to find money to start businesses. One way you could do so in 2022 is to use your retirement assets. Yes, you can fund a business with your IRA dough.

    While most people are aware of the option of using their 401(k) to purchase a home, most are not aware that the option exists to use their 401(k) to fund a business. Let’s look at how you can do that.


    Here is the process to set it up:

    1. Set-up a C Corporation. You can do this yourself or hire an attorney. There is no shortage of information available online to guide you. Your C Corporation will need to create — but not issue — stock.
    2. Have the corporation adopt a 401(k) retirement plan. This retirement plan should be a profit-sharing plan that permits all of the plan assets to be invested in company stock.
    3. Rollover your 401(k) or IRA to the new 401(k) in your C Corporation. Keep in mind that you can have multiple sources and even multiple people involved. That includes your spouse or anyone else that’s interested.
    4. Issue stock and transfer it to the profit sharing plan. This is in exchange for the cash that was in the plan.


      5. You can then use this cash to go out and invest the money in your business. The process is simpler than it appears. You can do it with a little help. Some companies will set everything up for you for about $5,000. They will also administer the retirement plan for ~$800 / year.

      If you’re not already familiar with this process, it’s important to get professional help; the government dishes out penalties when errors are made with regards to retirement plans. So contact a professional that knows the details.

      What are the Potential Pitfalls?

      1. Lack of diversification. If you’re putting all of your retirement funds into one investment, you only need one investment to fail to potentially lose all of it. Ensure you know what you’re doing before you dedicate all of your funds to your business. It might be prudent to have other investments as well.
      2. Tax issues. The IRS expects you to operate the business on a daily basis. Absentee owners aren’t looked upon favorably from a tax standpoint. There are exemptions for investing in an operating company. It cannot be a hobby and you must be attempting to sell a product or service.
      3. Proper valuation of the investment. If you purchase a business and pay too much, you could be penalized if the business turns out to be worthless. For this reason, franchises tend to be popular because they’re easier to place a value upon.
      4. Your salary. There are two things to consider. The IRS expects you to pay a dividend of some sort. Also, you’re taking some risk if you pay yourself from the retirement money. If you’re paying yourself well and not paying a dividend, the IRS is going to look at you closely. Your salary should come from the income generated by your business.

        5. Now you have the nuts and bolts to at least get started. Your 401(k) can effectively be used to fund a business if you take the time to do it the right way.


        6 min
      5. What is a Blockchain Token? We have answers
        People are just becoming acquainted with the idea of digital money in the form of cryptocurrencies like bitcoin, where transactions are recorded on a secure distributed database called a blockchain. And now along comes a new concept: the blockchain-based token, which I’ve been following as a blockchain researcher and teacher of courses about cryptocurrency and blockchain tokens.
        In the last 18 months, digital developers have raised more than US$20 billion through a funding process called “initial coin offering” – many of which use tokens. There are two common categories of them: “utility” tokens and “security” tokens.
        Utility tokens
        Utility tokens are essentially cryptocurrencies that are used for a specific purpose, like buying a particular good or service. For example, if you want to store information online, the most common way today is to become a customer of a hosting service like Google Drive, Dropbox or Amazon Web Services. You reserve a certain amount of storage space on those companies’ servers and pay for it with dollars, euros, yen or other national currencies.
        Security tokens
        A security token, sometimes called a “tokenized security” or a “crypto-security,” is more than a currency – it often represents ownership in an underlying real-world asset. Like traditional stocks or bonds, they’re regulated by the U.S. Securities and Exchange Commission. Regular securities are tracked either on paper or – more likely these days – in a centralized database. Security tokens use a blockchain system – a decentralized database – to do the tracking of who owns which assets.
        8 min
      6. Should you invest in crypto (and get rich)?

        To answer: 

        Question #1: Bitcoin or Cryptos?

        The first question you should ask yourself is whether you want to invest in bitcoin directly or cryptos as an asset class? Did you know that there are over 2,000 cryptocurrencies besides bitcoin?

        Question #2: What About Inflation?

        When you invest in bitcoin or any other currency or commodity – including gold, oil or pork bellies – you are investing on the prospects of price appreciation alone. More specifically, you are investing on the prospects of the price of bitcoin rising relative to the U.S. dollar. And while the recent price surge makes inflation look silly, you should evaluate currencies and commodities with respect to inflation.

        Question #3: Can you Tolerate Extreme Volatility?

        The price appreciation of bitcoin in 2020 underscores the extreme ups and downs. Consider this:

        Bitcoin went from $7,300 to $29,000 in 2020. But it also dipped to about $5,000 in mid-March during the beginning of the pandemic.

        Bitcoin rocketed to a new all-time high of almost $42,000 on January 8th. But then it plunged to about $31,000 on January 11th.

        Question #4: Do You Really Understand It?

        This one requires you to be completely honest. Do you understand how cryptos work or even why bitcoin’s price has skyrocketed? Do you understand bitcoin mining and how it works? Can you explain it beyond the headlines or the 5-second stories?

        If you don’t really understand an investment, should you make it? And if you can’t explain an investment to a 5th grader, should it be one of your investments?

        Could bitcoin or cryptos make sense as an investment for you? Sure, it could. But you should strongly consider limiting your investment to an amount you can afford to lose and prepare yourself for a long and choppy ride.

        13 min
      7. Crypto liquidity, buying, selling and making money!
        Liquidity of Crypto
        Think about it - the Bitcoin system is capped at 21 million coins. Currently, there are roughly 18 million or so Bitcoin in circulation. What does that all mean? Lots. There is a lot of speculation about what will happen to the value when the 21 million-Bitcoin limit is reached, however this won’t happen until around the year 2140.
        In general, the US stock market is very liquid. You can quickly sell most stocks, bonds, or mutual fund shares at the going rate without concern. There’s always someone willing to buy from you or sell to you, provided the price is right.
        Selling crypto online:
        There are websites that offer direct trades. A few examples include Coinbase, Binance, and BitBargain. Most direct trade sites require you to register as a seller. This means you have to reveal your identity. The website will post your wish to sell your cryptos and buyers can accept your offer.
        Exchange trades are another way to sell your cryptos online. You’ll still have to identify yourself, but exchange trades require less work on your part. You list the number of cryptos you wish to sell and your desired price. When someone else places a purchase order that matches your requirements, the exchange will complete the transaction.
        How You Can Get Started
        Now that you know how to purchase and sell cryptos, you may wonder how to get started. There’s little to be done once you have the software on your electronic device. The software is referred to as a wallet.
        Get started with crypto in just a few minutes:
        Create a crypto wallet. There is a variety of wallets available for different platforms: mobile, web, and desktop. Different wallets have different features. Be certain to understand the features and choose your wallet wisely.
        Secure your wallet. It’s important to back up your wallet regularly. Remember, if the file is lost, your cryptos are lost forever, too.
        Encrypt your wallet. Encryption ensures that no one can use your wallet without knowing the password, including you. Use a password that you can remember.
        13 min
      8. Live outside of US borders now? You still have to deal with the IRS. Sorry.
        Out of the Country? Pay Tax!

        Income Tax Requirements When Living Out of the Country

        Living in a foreign country holds a lot of appeal. It gives an exotic impression and seems like a never-ending vacation. But it doesn’t matter where you go, because the US government still expects you to file a tax return and pay taxes. This is true even if you become a citizen of the other country and live there full time.

        The United States might be the only country in the world that does this.

        If you were a citizen of Italy but living and working in Argentina, Italy wouldn’t expect you to pay any taxes! You would have to pay them in Argentina, though. The US would expect you to pay both.

        For your peace of mind and to keep you out of jail, become familiar with the income tax rules that apply to you as a citizen of the United States living outside the country.

        Income tax rules for US citizens living abroad:

        1. No matter where you live, you must file a tax return. It’s entirely possible that you won’t owe any taxes, but you must file an income tax return each year.
        2. You’re still subjected to all US tax laws. This includes income tax rates and the same credits and deductions.
        3. There are 2 primary ways to reduce your taxes owed in the United States. The United States has a reputation for double taxation, but in practice that only applies above certain income limits.
          • Foreign tax credit: This credit is intended to protect American citizens from paying taxes twice on the same income. In essence, you can deduct any income taxes you’ve paid in the foreign country from your taxes owed in the US. There is a limit, however.
          • If you paid $12,000 in foreign taxes, you could reduce your US tax bill by $12,000. Simple enough.
          • Income exclusions: This is the other option. You can’t claim both. The income exclusion allows you to reduce your gross income by up to $97,600. You can also subtract housing costs up to a maximum amount.
          • As an example, if you earned $100,000 in a foreign country, your taxable income would be only $2,400. It would be even less after the housing cost credit.
          • The housing credit is equal to the cost of housing minus $15,216. The maximum is 30% of $97,600. If your housing costs were $25,000, you could claim an additional deduction of $9,784 from your gross income.
          • Self-employed folks are not eligible for this housing exclusion.
            • 7 min
          • Cryptocurrency and the Myths About All of Them
            Common (Totally Wrong) Myths About Cryptocurrencies! As with any other fringe product or service, there are many myths surrounding cryptocurrencies. Cryptocurrencies aren’t just for computer geeks and drug dealers trying to avoid the government. Relieving yourself of these myths will permit the formulation of a more accurate opinion. It’s easier to make informed decisions when your knowledge is sound.
            Myths regarding cryptocurrencies abound:
            Cryptocurrency is illegal. It depends on the country. It’s legal in the United States, but there are other countries, such as Russia, that have deemed it illegal. It’s unlikely the legal status will change anytime soon in the United States. It’s possible that it will become regulated, however.
            Bitcoin is the only relevant cryptocurrency. There are several other cryptocurrencies. All have their strengths and weaknesses. Bitcoin, released in 2009, is the oldest and most well-known of them. Most of the other cryptocurrencies are less than three years old:
            Auroracoin
            Blackcoin
            Dash
            Dogecoin
            DigitalNote
            Ethereum
            Litecoin
            Mastercoin
            There are several others.
            Only criminals have a use for cryptocurrencies. While cryptocurrencies continue to be used for illegal activity, cash is still king for illegal transactions. There are reputable retailers that accept cryptocurrencies, including Microsoft and Dell.
            I can get rich with cryptocurrency. The potential for profits does exist. People have gotten wealthy through increases in the value of cryptocurrencies. However, just as many people have lost a tremendous amount of money, too. It might happen, but you’re unlikely to retire on your cryptocurrency purchases.
            Cryptocurrencies are fiat currencies. Most of them are. That’s true. But so are the Euro and the US Dollar. All major world currencies have abandoned a gold standard. The US decoupled the value of gold and the US Dollar in 1933. The value of all fiat currency is based on the willingness of the public to agree that it possesses value.
            The government can shutdown cryptocurrencies. The government could make cryptocurrencies illegal, but shutting down the system would be next to impossible. There’s no central server or location that houses a cryptocurrency system. The information is stored on the computers of every user.
            Unless the government can find a way to shut down the internet, it would be challenging to put an end to cryptocurrencies.
            It’s easy to mine cryptocurrencies and make money. Entire companies have been built for the sole purpose of mining cryptocurrencies. It requires a tremendous amount of computer hardware and electricity to be successful. Unless you have several hundreds of thousands of dollars, you can’t even begin to compete.
            Cryptocurrencies are subject to hacking. Bitcoin merchants and wallets have been subject to hacking activities. However, Bitcoin itself has never been hacked. Other cryptocurrencies have similar security profiles. Insufficient security is always a potential problem with cryptocurrencies and cash. Protect your wallet and you should be fine.
            It’s impossible to trace cryptocurrency transactions. It’s not easy, but it can be done. Regarding Bitcoin, the blockchain ledger lists all the transactions that have ever occurred with Bitcoins. The challenging part is linking the wallet address with the owner.
            8 min

          About What’s Kenner French Thinking!

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          Hey, Mr or Ms Entrepreneur, trying to hear business secrets? Hear the entrepreneur secrets told by R. Kenner French on daily episodes dropping at 9am eastern. Get the secrets of tax, finance, AI, asset protection, and more with top-tier guests and actionable strategies. Be told the keys to explosive growth and leave your competitors in the dark.