Young Smart Money Transcripts: Legal Structures For Entrepreneurs with Scott Royal Smith

Please enjoy this transcript of my interview with attorney and CEO of Royal Legal Solutions, Scott Smith.

Meet Scott Royal Smith

Before opening Royal Legal Solutions, founder Scott Smith was an aggressive litigator who brought suit against major insurance. He knows first-hand the tactics that plantiff’s attorneys use to win law suits. He brings this knowledge to bear when setting up business structures to protect your assets.

We analyze your individual situation and put nuanced strategies into place that will not only protect your property to the greatest extent possible but also save you money in taxes and state fees. You don’t need to be a millionaire to benefit from the right system for acquiring property and protecting your assets. Our clients range from first time investors to seasoned real estate investors with a broad portfolio of properties.

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Scott Royal Smith
How do you know that somebody was successful? Because they did that or in spite of the fact that they did that. So it’s actually really helpful as the inquiry about like, what is it about that type of strategy or that way of thinking that I think can be useful or not. And you gauge that against your own experience to say, Hey, does that make sense?

Apple Crider
You’re listening to young smart money, a podcast that inspires young entrepreneurs to take their personal finances to the next level. My name is Apple Crider, and I am a huge personal finance nerd and entrepreneur who’s constantly looking for a better way. Whether it’s amassing millions of credit card points, learning which parts of the tax code can work to your advantage or just figuring out how to run your business as smart as possible. I am all about it. Join me as I sit down with some of the smartest financial planners and specialists for young entrepreneurs out there and extract the action steps you need to get the most bang for your buck from your business. Welcome back. With the show today we’re diving deep into legal structures. Now this might not be something that you’ve ever thought about at all for your business. Maybe you thought about it a little bit, maybe you hopped online, googled how to start an LLC, when on LegalZoom. And that was the extent of your legal planning. But regardless, it’s something it’s really important for entrepreneurs to consider whether you are large or small, finding ways to strategically structure your assets, structure your business so that things are protected. So things are where they should be. And so that taxes flow as efficiently as possible. Make sure that you’re not paying more in taxes than you need beat. So Scott royal Smith, he’s a pro. He is the CEO and founder of royal legal solutions. They do all kinds of stuff in the asset protection and legal structuring space. So I was super stoked to sit down with him and dive into the different options available for both the solopreneur and the entrepreneurs living farther along in terms of how they can legally structure their business to be the most tax efficient as possible, and to make sure that everything is where it should be everything is protected. And so we’re diving into all of the questions from the basic stuff surrounding like, what about business credit cards versus personal credit cards, we’re talking about separating bank accounts, we’re talking about all these different things that you might not think about, but can actually be really important, especially if you do end up in legal trouble at some point throughout your entrepreneurial career, which, as Scott mentioned, is actually a lot more common than most people would expect, especially young people and like, I’m not that person who expects anything to go wrong. When it comes to like the legal side of my business. I’m not just walking around thinking like, Oh my gosh, I might get sued today because like, you know, I do things over the table. I’m not doing anything sketchy, but I mean, you never know like stuff could happen and if stuff does happen, you do want to make sure that that people aren’t gonna be coming for your house gonna be coming for your car, like you got to make sure that the things are set up correctly, and there’s a couple small tweaks that can can really go a long way. Scott’s also going to dive into a few more advanced strategies as well, that the two LLC strategy is one that I think is you guys are going to benefit a lot from it’s not that complicated, but it can really end up saving you a lot of time and headache if something does happen to go wrong with your business, because you got things effectively separated. So I’m gonna stop talking, I’m gonna turn the mic over to Scott. So without further ado, sit back, relax and enjoy the episode. All right, Scott, welcome to young smart money. How are you doing today? I’m having a great day, brother. Thanks for having me on. Absolutely. So I want to kick it off, I want to dive right in right away, no need to waste any time. And so I I’m going to go out on a limb here and say that most of the listeners to young smart money are, are very, their level of concern with asset protection and just the legal structure of their business is not something that they have spent any more than a few hours thinking about throughout the course of doing business for potentially years. So I want dive in and kind of give us an idea of if you think that’s an issue? And if so, how that might be an issue down the line for some of these young entrepreneurs.

Scott Royal Smith
Yeah, so I tend the first thing you want to look at, you know, you’re looking all these things like who are the people that are really who the wealthiest people that you know in your life, right that I’ve actually built companies on their own from the ground up and try to model after the success that they’ve built. And that’s what I’ve done right so I’m 35 years old, I waited to start doing my entrepreneurial work in earnest and and I waited till after I was in my second year law school and that’s when I bought my first commercial property that also had an active transmission and auto repair business inside of it. And then we flipped that company and the building for me and my partner both graduated from law school without any debt, we were the first ones to ever do that from that school. And, and that’s like, you know, that first process, right, like where you’re, you don’t know what you’re doing, you’re just jumping into something you’re like, I can figure it out as I go along, and it’s gonna be really Hard in the very beginning, but I’ll figure it out. Right? So after that I continued to invest in real estate while I was working inside illegal as a litigation attorney, and I was making more money doing real estate and I was being an attorney. So I was like, getting a job is for suckers. So let’s just go back into just do the money hustle, you know, on real estate seems pretty cool. And I hit my financial freedom doing that where it’s like your passive income equals your, you know, expenses, which is something that I think is always your first target, or it should be your first target that you had to you know, everybody wants to be a billionaire right? But how about just get financially free first, but safe passive income would probably be pretty sweet thing to do. And, and then my life kind of turned on just helping other people do the same thing. So now my company we focus on how to how to build from zero dollars to 25 million net worth how to accomplish financial freedom, and what are the systems and processes that are really predictable? that I’ve been able to study over the last six years and like how do people actually do this? What makes this kind of unique is that we don’t just teach about it is that we actually do the implementation side of it, because we’re right. So we consult on the estate planning, the taxes, the asset protection and all those pieces. So anybody who tells you just to go out and get an LLC is just stupid, right? Because that’s just not smart advice. It’s just not helpful for people that sit and that are older than you or more experienced than you. And just like they’d actually tell you like, here’s what you need to go do. It’s not helpful for a couple of reasons is because one is like, How the hell do you know the difference? Right? How do you know that somebody was successful? Because they did that or in spite of the fact that they did that. So it’s actually really helpful as the inquiry about like, what is it about that type of strategy or that way of thinking that I think can be useful or not? And you gauge that against your own experience to say, Hey, does that make sense and that won’t always help you make the best decision. Like sometimes you’ll make the wrong decision, but it’ll be your decision that you’re learning from instead of just copying somebody else’s. Like didactic playbook, and you have to weigh that against what are the best practices and methods that are repeatable, right? And that’s what we kind of come into place is things like, Hey, you know, I think, I think very entrepreneurially very outside of the box very creatively, but at the same time, let’s always keep studying what are the best practices that people do? So forming just LLC for the sake of forming an LLC is stupid, forming an LLC, because you’re like, Well, I have things that I need to protect, even if I don’t have assets, I have a credit score, because I need access to cash, you know, and I want to be able to protect myself from the business. If something goes sideways, somebody gets pissed off, because there’s a lot of crazy people out there. Now, if you can take that one strategy and then stack it with another strategy now you’ve increased the lifetime value of the investment inside of an LLC. And so how would you do that? Well, the first thing that you would do is once you start making over $50,000 a year, you would take your LLC and then file an S corporation tax election to save on self employment tax, that’s going to be good up to you making 50 to $130,000 in net income like that. You’re Gonna report on your taxes. And there’s a ton of other stuff that you can be doing in between. But that’s really the first step. So, I’d say forming an LLC is dumb unless you can figure out why you need to form it. Right? Do you need to form it because you want to protect your credit score? Do you need to form it, because it’s a smart thing to do to be able to look to how you’re going to be growing your income, and you want those things in place to be able to save money on taxes. Now, the types of strategies layer on top of each other, the lifetime value of actually investing that money pays off multiple times over the course of your lifetime. And that’s how you can kind of cut costs justify some of these expenses.

Apple Crider
Sweet. Well, there was a ton there that I want to unpack. First of all, I’m sure most of our listeners have at least heard of an LLC before but can you kind of just give an overview of like, what are the tax implications of an LLC as compared to say a sole proprietorship?

Scott Royal Smith
Yeah, they’re exactly the same when its sole member, right, so, so remember, LLC s are actually treated exactly the same as sole proprietorships. for tax purposes. You don’t form an LLC for that purpose. Initially, right? When it’s sold member, you form it because you want protection from other people trying to sue you, your company and ultimately damaging your credit score. So in this country, all these companies, structures, limited liability companies, corporations, S corporations, etc. They’re all treated as different people, right? It’s as if a fictitious fake person lived. And they were named the name of whatever you named your LLC. Right. And that’s how it works in the eyes of the law. So if your LLC gets sued, or your business gets sued, it’s like as if somebody else got sued. And that’s the advantage of it, because they’re not suing you. They can only sue the company right? Now they can sue anybody technically right, but we’re worried about like lawsuits that will actually carry forward right that you don’t just simply get dismissed from, you know, at the first first sign of thing. So that’s LLC info,

Apple Crider
one on one. Sure. So it’s basically a tool to separate the assets, the credit score, the whatever else The business from your personal stuff. So that yeah, if something does go sideways with the business, you’re not personally on the line for that.

Scott Royal Smith
Yeah, 100% right. So what we’re trying to do is, is you the best ways of doing this stuff is that you should always be trying to compartmentalize all of your liability in one bucket, and have all of your assets everything that’s worth something and another bucket, right. So typically, we always using like a two LLC structure for all entrepreneur, all entrepreneurs and if this becomes exceptionally important after you get any appreciable net worth, that’s above six figures right now I’m talking about like total amount of cash that you have or assets that you have, in that six figure plus range. You need to be running this strategy where you have at least two companies. One company does all of the operations and does all of the active business. It’s the one that’s gonna be signing contracts and negotiate with contractors, you hire employees, everything through that one company. They have a completely separate LLC, right, which is almost its eyes law, right? It’s a completely separate person. That’s not you that owns all of your assets. And the reason why is because If somebody Sue’s you, we want to make you like rich people, rich people don’t own things, they don’t pay taxes, right? So the first thing we’re gonna do is not only thing, and the way that you do that is that everything is actually owned by your asset holding company. Second thing that rich people do is they, they remove all the liability possible they can from themselves. And the way they do that is through that second company that we talked about, that’s your operating company. It by design doesn’t have any assets. Typically, this referred to as like a shell company. And people like try to pretend Hollywood like shell companies or something like crazy and like, Oh my god, like it’s a shell company, you know, whatever. Now, it’s just an LLC that doesn’t have any assets. It’s not actually anything incredible. And everybody that’s sophisticated at all always operates through those types of companies for all their active operations. So all the money that’s made in that company is consistent, consistently bled off to the asset holding company or to the owner, which would be you and that company doesn’t ever owned anything, doesn’t ever accumulate cash, and it’s our fall guy. So if there’s ever a lawsuit, we just wind down the LLC and then we start up a new one. And we’re back in business on the next day.

Apple Crider
That was super, super valuable. And just to clarify for some of our listeners that are like, Wait, is that legal? Like, can you just like give us the quick like rundown of like, why why the government allows a person to do that.

Scott Royal Smith
Yeah, people created these laws because the government created these laws because they wanted you to be able to mitigate your risk. Like they create tax loopholes and tax strategies like tax strategies, because they want to be able to guide behaviors. That’s why these laws exist. Right? If the government wanted you to be liable for absolutely everything, they wouldn’t have created the laws, they want you to pay taxes on everything, they would just say we have 100% tax, and there’s there’s no stipulations on that. even understand that these systems that go into place are actually lawmakers creating laws because they want to drive behaviors of you like they create certain incentives for the way that wants you to act. So they actually want you to use these lol fees to be able to control your risk because when you can control your risk, they know that and this one area right They are going to be able to do better work and more creative work. And the other areas, right? It’s the same thing with like taxes, right? They don’t want to take 100% of your money, what they want you to do is to make decisions that they think are going to be better for the government better for the country by allowing certain behaviors to exist, right. Like, why do you think that we have tax laws that are so advantageous that Donald Trump got pushed through with for real estate investors? Well, they wanted to drive investment into real estate because they thought that that would be a bedrock of our economy, not investing in real estate then becomes really stupid. Because the tax advantages of investing in real estate now are so extreme that now everybody’s flocking to it. This is what actually causes the crazy. So you might see a symptom, right? called everybody’s going to real estate. Real Estate must be amazing. But what really happened is that there was a fundamental shift in tax policy, right? So you just have to think through these things a little bit deeper. Maybe. If you’re if that’s confusing to you about Like, why do certain things exist? And then it’ll become really evident to you upon little exploration of it. But if you’re not using the laws to your maximum advantage, you’re just not playing all the cards. I mean, you’re just holding yourself back.

Apple Crider
Totally agree. I mean, the government is incentivizing you to, to participate in certain behaviors. And so you’re not participating those is just leaving opportunity on the table. So I think that was very eloquently explained. I want to dive back in so you mentioned like the to LLC approach, which was super valuable in and of itself, when it comes to somebody who’s like a solopreneur. They’re just like running a side hustle there. They’re kind of getting started again, probably from that like zero to 50 or maybe zero, like $75,000 range. What are what are some of the different options available to them in terms of legal structure? I know you briefly mentioned the LLC and the S Corp. Can you kind of detail someone who’s just getting started they so far have said nothing in the way of legal structures. where’s where’s a good place to start?

Scott Royal Smith
Yeah, so even better For you, even when you’re say like, let’s say you’re making 40 grand a year, right? You would say like, well, there’s no tax advantages to me to form an LLC the LLC is going to treat it just like a sole proprietorship, I can still write off all my business expenses, and everything else is the same one way or the other. Why would an LLC The only reason to do that is to be is to say, I want that liability protection. If somebody Sue’s me they’re not damaged my credit score, because my credit scores my access to capital, right, I probably can’t venture VC money in right I probably, maybe I can get some money from MMA. You know, and Uncle Bob, you know, if I want to keep running, doing something, maybe no, but you’re for most people it’s their credit score isn’t gonna be able to is their access to capital to be able to get their business launched off the ground, right. So you need to protect that with an LLC. And then when you get above that $50,000 Mark, that’s when you start looking at Okay, what are the tax savings options that are available to me Okay, maybe I need to form a separate company now because I’m starting to acquire I have extra cash at the end of the year and I just burning through all my cash you You know, every year?

Apple Crider
Sure. And is that $50,000 Mark relevant? Because at that point, you’re you’re actually creating a decent amount of income, or is it because you’re retaining earnings? Or like, Why? Why $50,000

Scott Royal Smith
it’s the market, which that I value, what’s the cost of actually filing a separate tax return versus the amount of tax savings that you get. So there’s going to be an additional CPA cost and filing costs, you’re getting your taxes, when you save on self employment taxes. And usually it’s around 50 grand is like about where that value proposition starts to make sense.

Apple Crider
Okay, cool. Cool. That makes sense. Now, are things going to change once the person starts building a team? So once you have an employee or a contractor, whether it’s a 1099 or a W two, are things going to change in terms of what kind of legal structures they should be looking at now?

Scott Royal Smith
Okay. No, absolutely not. I mean, what you want to be doing I think, is you want to, when you get up to a certain size of your business, you need to have a few employees because IRS will say, well, you’re probably actually treating contractors like employees, and you’re going to get smashed with fines and all kinds of stuff. Right. So, but up and like when you’re, you know, just starting out and do it, my recommendation is to try to, you know, watch the laws that are around that IRS produces like a laundry list, I think it’s like 26 different items they use to evaluate whether somebody is actually being treated like a contractor employee, but you want to be structuring your business around contractors, not employees, because there’s all kinds of legal protections out there for employees that hamstrung you as a as a entrepreneur. And you need the flexibility contractors, mainly because you’re just not that smart yet. Right? You don’t have enough experience to really know how to hire very well. And to know, say, like, Okay, this is somebody I’m going to partner with for the next, you know, five years, right? I mean, that’s kind of a crazy thing to think of is this is like a total rabbit trail to this is that like, a lot of guys that I know anyway, they’ll be like, well, I’m going to go marry this chick. I mean, like you’re going to marry this chick for the rest of your life, but you You’re having struggling to be able to find out like who you want to hire as an employee that you think will last for two years. I mean, let’s reevaluate how well we are judging how good relationships are at different phases of our life, and how we see like how other people kind of make those kinds of decisions. And you know, just be smart about it. Personally, I assume that I’m not very good at anything, until I can prove to myself that I’m way better than everybody else that I know. And do it. I’m really trying to find the best people I can. And then I’ll be like, Alright, cool. I feel like I’m pretty confident on that. And then I’ll start locking things down a little bit more, but until then I’ll pay whatever it is, or do whatever it is I need to do to be able to have flexibility because I’m gonna assume I’m gonna screw it up.

Apple Crider
Yeah, I think that’s not a very common mindset among most people, especially in the United States. I think we definitely very much overestimate ourselves in virtually every area. So I think taking that humility and realizing like, Hey, I might not let’s just assume for a second that I’m not the best in the world, at hiring, for example, and not breeding those under those assumptions is probably nine times tend to get you better results than assuming you’re the best in the world at it.

Scott Royal Smith
Yeah, I mean, I mean, you can make the assumptions you want to I mean, I’ve just gotten burned. I mean, I’ve lost millions of dollars, I think I was better at stuff than I was, you know, just because I was having relative success. And that’s part of the problem, right, is that you start getting success and like one area, you know, and then you think that you’re great at all these areas, like now that just one area went really well, that one marketing campaign went really well, that doesn’t mean you’re good at hiring yet. You know, like the, you have to really try to, like, separate out those different kinds of information that you’re getting, and being like, Oh, just because you made a bunch of money last year, doesn’t actually mean that you’re really a great business person. That just means you hit like a really sweet marketing game, marketing and sales vein that could dry up at any moment, by the way, you know, so let’s be cognizant of these things and like, be optimistic and hopeful about the future and driving towards that, but at the same time, you know, really trying to read On saying, Okay, what are best practices? You know, can I find other people that have walked the same road that I did before? I’m walking right now? And can I connect with them to be able to find out? Like, what pitfalls that they wish that they would have learned along the way? And maybe I can learn from somebody else’s mistakes. And that’s what we do like royal legal solutions, right? I mean, that’s the name of our game is how do we connect up people to where they’re at in the journey? What’s going to be coming up next? What does that look like? so people don’t have to walk up before I mean, I’ve done that work, same kind of work with my podcast, real estate nerds podcast, with interviewing guys like Grant Cardone, and, you know, all these top flight, real estate investor types of people and talking to them about like, Okay, what are the best practices? Okay, so you’ve lost a ton of money. You know what happened in the times that you’ve lost a ton of money, and you start to learn that there’s a lot more to this game than what you can learn in books. There’s also like a mindset. There’s also like who you are actually showing up in the world has a huge impact on the kinds of levels area but grow to as a super deep game. That’s all entrepreneur game for sure. But I would just say to like, humility is probably pretty important because the big guys that are out there there have tons of money now have lost tons of money in their past. Like why do you think you’d be any different unless you’re learning from them so you can avoid the same thing. I couldn’t agree more

Apple Crider
now, outside of just having having some humility in what you’re doing. were some other areas that you see entrepreneurs, whether that be young entrepreneurs or older folks getting burned, especially on the legal side of things like where some some common pitfalls that you do see people falling into

Scott Royal Smith
and I see people being really loose like in their contracts with people you know, that being like a place that people can really focus in. So so we we’ve tried to tackle that problem by what we call is like a family office membership. So it’s like 97 bucks a month and you get like unlimited access to our team to be asked many questions just like we’re doing here on the podcast today, as well as like things that are really special cific, right, like, Hey, what about this contract and whatnot? Right? What happens is, is that you don’t know what you don’t know, right? And you don’t know best practices until you lived it or learned it. And contracts are one of those things that are foreign for most people, right? Yeah, like, even if you read a contract, and even assuming that you can actually understand everything that’s in there, you know, like, those are two big things. Most people don’t read them. And if they do read them, they don’t understand them. You also don’t know all the things that aren’t in that contract. Right? That could be in that contract that would otherwise serve to protect you. So the deal is, why do I say contracts are so important, is not just because, well, it’s really important from the legal side of things, which really is, but if you have to really think through a contract, that means you’re really super clear on exactly what it is you want. And that’s a hyper important thing to have as an entrepreneur. You need to frickin know exactly what it is you want and most in as much detail as possible. And I’ve seen this be a superpower for guys that I’ve interviewed on my show the real estate nerds. podcasts The reason why I think. And this is just pure, baseless speculation. Well, not totally baseless, but pretty baseless is that there is an element of your brain called the reticular activator. And when you can it’s like when you’re going for shopping for a car right? And there’s like, Hey, I’m looking for you know, XYZ type of car right? Let’s just call it like a, you know, silver Honda Civic or something like that. Yeah, pretty soon you start seeing silver Honda Civics everywhere, right? Well, the reason that is because as your reticular activator, you’ve told that part of your brain to be on the lookout for take for several Honda Civics and now you start to pick them up everywhere. The same thing happens in all these other areas your life? Well, you can get more clear on exactly what it is you want to the level of saying like I’m looking for a silver Honda Civic that looks like this, you know, even maybe in a particular model year, you start to see those every year. While the same thing happens with the type of people you want to attract or the types of opportunities that you want to attract. You know, all of that and contracts are another way of doing that in the business. A lot of it right. This is exactly the type of deal that I’m looking for. It’s gonna look like this. Hmm.

Apple Crider
So for a listener who is not at all familiar with contracts, what are what are some good? What are some good ways that they can they can start getting getting some knowledge in that area. Because for a lot of the young entrepreneurs that I talked to a lot of times when they need a contract, the first place they go is Google, and they just google contract template and they just kind of roll from there. So I’m in order horrible.

Scott Royal Smith
Yeah, better than some people, like some people would just like, sit there and just start hammering stuff out on their own keyboard. You know, but but the best way to do is actually steal other people’s stuff. All right, sorry, I should say model, right? That’s our, that’s our buzzword, right? You can’t steal things anymore. You have to model. But the best thing to do is actually just find other people that have done the work that you want to do and see what you got to do to be able to get their contracts, right. So I work with guys that are like that are at the next level for me, right? And so what I’ll do is I’ll go talk to them form relationships with them, and then, you know, they’ll talk to me about like, certainty. They did or whatever, right? And then I’ll just ask them, you know, like, Hey, can I, you know, I’m looking into that same type of deal and I’m struggling with you know, exactly what is the paperwork after look like to be able to do that kind of thing. I know, would you mind sharing with me, you know, one of the contracts you’ve done for like a deal that may already be expired, right, you know, maybe something that’s in the past that you know, something where they can feel safe about kind of giving me that information, right, because it’s, you know, out of the out of their current, whatever, yeah, sure, sure. But that’s what you want. You don’t you really don’t want to write it yourself. Look online is gonna use something generic, you’re not gonna know if that’s really good or not, but if you grab it from somebody else, that’s pretty successful. You can bet that they’ve especially if you ask them like Hey, did you pay other attorneys to write this for you? Have they are those other attorneys already better than, you know, what did you write this? What was the purpose of this contract? What was the you know, you ask them like the all of those questions, and that’s going to give you a good idea whether that document is one something you can rely on. In the vein of what do you need to do?

Apple Crider
Hmm, absolutely. And I totally agree. And that’s an area that I haven’t focused as much as I should have on just making sure that the contracts that I do send in the contracts that I do sign are as focused on the deal that I’m trying to create as they could be, because I think what you said about knowing exactly what kind of deal you want to get into is is not something that I personally do a lot. I generally have an idea of like, Okay, this is kind of the agreement that we’re getting into but it’s not it’s not as specific as it could be. So I think that is a very powerful takeaway is like know exactly what you’re looking for before you just sign a piece of paper.

Scott Royal Smith
Yeah, dude, that well, because you’re early stage, right? Yeah. Like, yeah, and that’s obviously it’s early stage because you don’t know what the hell is going on yet. You don’t really know your company as yet until you at least on it for a couple years, because you’re still just kind of figuring it out and you’re following the energy of what seems exciting. What do you think Mark product market fit is going to look like and what Right. But what you can do is actually invest more time into studying more people that have built similar companies with similar skill sets, right? It might not be your company, right, but a similar company into it. And that will help you guide with more detail about like, what, what you’re going to look for and to it. And you have to be ready for this about 90% of the time that the energy that you invest in these types of endeavors that I’m describing here are not going to be directly fruitful. I think we’re really accustomed to being able to Google stuff, being able to like listen to a particular podcast and say, like, Oh, that’s my prescription. And now I’m just gonna go do that. Right. Now the reality situation is, is that most of the most successful guys that I know spend way more time wasting time than I do, right? And I’m trying to get better at wasting time. By wasting time, I mean, going through that whole process of talking to tons of people looking at tons of stuff and then then Okay, I’m going to make that little decision now. to it, because the game is not how do you get from A to B as quick as possible? It’s how predictably can you get what you want? Right? Can I get financially free in five years? That’s pretty exciting. Right? You’ll see a lot of guys, it’ll be like an Instagram or whatever at the back. Oh, I did it, like in a year, whatever. Cool. Well, that might be like the 110 thousand case, right? That might be the only things that you see on social media. That shouldn’t be real, though. Right? You need to get real with like, how does it actually happen? How do I get predictably there is a downside is if it doesn’t happen in a year. And it doesn’t happen year 234 or five, your buddy just made it in your five right into it. And you might not ever make it unless you change the way you’re thinking or you’re five years behind now of where you could have been, if you would have just stick with one of the more predictable ways of actually growing your company, achieving your financial freedom growing your net worth building your business the right way from the ground up. Hmm.

Apple Crider
So you’ve mentioned a lot kind of modeling success. So can you share with us an example of some some way that you We were able to find someone who was a couple steps ahead of you model that and then use that as a way to predictably move forward along this path.

Scott Royal Smith
Yeah, so I mean, that’s one of the things that we work on with royal legal solutions. So we have our our Facebook group that we can introduce anybody to if they come to the website and just fill out anything, right, you’ll end up getting our weekly emails, we just send out like one email a week that says, here’s all the new stuff that we’re put out for this week. So it’s super lightweight in the inbox, and one of the things that we’re continually getting people to be more responsive to one of the things I’m committed to is our Facebook group that’s around that, because it’s a great place to source out people that are, you know, mentor light mentor ships, you know, everybody like has this fundamental need to want to help other people, especially ones that have had success. There’s a good chunk of the population that when they have success, they want to turn around and teach other people like how they did it, right. They want to be helpful. So you just have to find the right pod or group of people. That have that type of thinking that makes sense to you, you know, if you’re listening this podcast and you’re down, like down with the way that I think through things, or whatever this is like the, this is my group to go jump into it, you’d want to jump into our Facebook group, start interacting on there finding people start sharing some of the problems that you’re having some of the things you’re struggling with, and then wait to see your response to you. And then just follow up with those people and try to see if you can get them on the phone and then try to see like, hey, well, are they willing to talk to you like once a week or once a month or whatever, write a check in from somebody else, maybe you have four or five people that you do that with to get all these different mentorships and people just totally online. I do that with people and I’ve never even met him face to face into it, but I respect the shit out of the way that they think through problems and that the track record that they’ve done. And again, to get through to my top four or five people that I consult with, I’ve had to go through 50 or 60 to be able to have the ones that are there. So that’s what I mean by time wasters. You need to waste a bunch of time.

Apple Crider
Totally agree it’s not gonna fall in your lap. You gotta go find that yourself. Um, so So one thing that that I’m also curious about, and I’m sure our listeners are as well is like, with with legal structures, in particular, we get out of our contracts too. But like, when do you think and obviously, you might have a little bit of a biased opinion here, but like, when do you think that it is important for an individual to seek professional help with this stuff? Because like, obviously, if you’re just like, if you if you have a garage sale out front, like, you don’t need to form an LLC for that you don’t need to worry about protecting anything. And if you are running amazon.com, then you definitely do need to be thinking about this stuff and working with professionals. So we’re we’re in the middle Do you think that an individual should think about potentially working with with some kind of firm or working with an attorney or just seeking some kind of professional help?

Scott Royal Smith
Yeah, so I’ll tell you what I’ve done just that same question is that we created like the DIY options, right? So we create options in there to say like, okay, here’s a way that you can actually structure things on your own. For like, really levels that are going to be a little bit more expensive than Legal Zoom, but much more insightful. But the types of materials that are given through that, and the level strategies were able to do with that, right? Because we also include some light support with that into it. But I actually, that’s like a response of, here’s a new product I created great to be able to help service that person. But the real fundamental problem is that if you are that person, you don’t know if you need it or not, right? Like, when would I need it? Yeah, to it. And the answer to that, is that you won’t know. So just do what the best practices are. When you don’t know, if you don’t know what to do, follow best practice. If it looks like other people that are similarly situated to you that have built other companies are like doing that route, then just do that route. Whether you believe it or not, don’t think so hard, you know, like into it, and it’s not a life or death kind of decision. I mean, you’re maybe you’re Like under 1000 bucks, right to be able to get like everything, everything farmed up and all the other stuff going right? How much of your time are you going to spend to be able to fritter back and forth over whether you should spend 1000 bucks, you know, onto something that’s a fundamental building block your business? Well, like, all the time that you spend thinking about that, you’ll never get back. It’s just gone. You think time is free, but it’s actually the only resource that they’re not making any more of right. And it’s the one thing that you can control that will have the biggest impact on your overall success. So if it’s something that you’re thinking about, and that comes into your mind, mind and time and time again, about Hey, do I need to do this or I need to do that the answer in my mind is always just frickin go do it. So you can stop thinking about it and you can start focusing on the other things you need to be doing. This is something that net you never think about. And you’re like, Oh, this isn’t an issue for me at all cuz I never think about this thing. Well, it’s not costing you anything to be Having that, you know, virus in your mind, right? So, I don’t know if that’s necessarily helpful, but that’s the way I think about it. I’m always trying to clear cobwebs out of my head so I can single focus into it. And anything that like distracts me or comes into my head time and time again, I’m always thinking about like, I just gotta solve that problem, because it’s actually like a mental vampire that’s draining my energy just slowly throughout the days.

Apple Crider
I love that. I love that picture of a mental vampire. And I think that’s so it’s so applicable to my life and I’m sure it is for the listeners as well. I find it Yeah, if there is something that is coming up time and time again, in my mind, I have to tackle that because if you don’t, like you said it’s just sucking away your bandwidth every time you think about it, even when you’re not thinking about it. It’s still just in there like sucking away at your your energy. So I yeah, I have a habit of anytime I think of something at least like two three times. It’s getting written down on a list of things that I need to do and then I periodically just go through that list and like okay, this was something that I needed to do. I Get it done. So I think that’s applicable in so many areas, not not even just like legal structures, financial stuff, tax stuff, but just in so many areas of your life. Like if there are those things that keep coming up, there’s probably a reason that they keep coming up, and you should probably do something about it.

Scott Royal Smith
100% man, it’s all about being able to clear out the mental space and be able to focus on one thing, that’s why me that ultimately, that’s like, my goal with my company, right is that that’s what I think is actually cool. What’s really cool that I get to do is be able to figure out how can people outsource whole sections of their thinking and their life over to what I do the things that I’ve already figured out. And ultimately, to me, that’s impact, right? It’s really like a platform for being able to just offload stuff so that way people can focus on whatever it is going to be to their liking their business, creating more money or whether it’s going to be spending more time with their family, or going on more vacations or whatever that is or just being more at peace knowing that things are taking care of that they don’t really fully understand and that they’re worried about. Right? But I think that that says really comes down. Like the name of the game is like how clear can you get your mind to work, you know, with everything else that’s going on. And knowing that everything else will be designed around us as a society is actually designed to keep you from being able to do that. So good freaking luck.

Apple Crider
Exactly. It’s not the game is not set up in our favor, so you gotta get to work at that stuff.

Scott Royal Smith
You just got to be intentional about it. And you don’t actually have to get there very quick from what I found. You just need to be intentional.

Apple Crider
Sweet. So all right, Scott, I got I got three quick questions that I got from listeners when they heard we’re gonna be talking to you. So let’s just dive into those real quick and then we will call it a day. So the first thing that somebody’s curious about was in terms of actually like legally separating stuff with like an LLC, versus like the actual like practical separation of like having a business credit card and putting all your business expenses on there having like a business bank account, running All your transactions through there, like what is what is the importance here? And how, how does it impact like the legal side versus just like the actual like having these separate things and using them separately?

Scott Royal Smith
Yeah. So I mean, really, if you want the best takes on what to do for early entrepreneurship, you should read a book called profit first. We’re actually having Mike mccalla wits, the author of profit first on the podcast in a couple weeks. So listeners can stay tuned for that. But yeah, it’s a really, really high quality book. Oh, right. Awesome, man. Yeah, no, I mean, I think it’s a great thing to do. And then once you can get down like the right behaviors, and the legal structure of things is going to become really evident, you know, self evident to you about, like, what is it worth because it’s actually not a lot of complication on the legal side of pieces. be confused by that at all. Then, of course, just hit up our website. We got a ton of free info on there, but here’s the best practices of what you should be doing with it right. But at for early stage, especially when you’re younger, you need to be not so worried about technical pieces, you need to be a lot more worried about behavioral pieces, because it’s actually being able to train your brain, the right behaviors that are going to be the ones that are going to actually impact you long term.

Apple Crider
Totally agree. Next question we had was, am I likely to get sued? So in terms of just like running a small business, I mean, how likely do you think someone is to actually face a lawsuit?

Scott Royal Smith
Well, real estate investors have like a 95 95% chance over their lifetime of being sued. But that’s because, you know, they’re an active business with contracts and dealing with people all the time. So it really is going to vary by industry. But I always say it’s just stupid to play odds like that. Because the cost of being able to have the right protection and the right things in place are so below when you extrapolate them over the lifetime of your business. So why in the world wouldn’t you just do things right, so you don’t even have to worry about it.

Unknown Speaker
Totally agree. The The downside, there’s pretty significant.

Scott Royal Smith
Unlimited risk, right? And then like, even if it’s a 5% chance, but it’s unlimited risk that it can just wipe you completely out and destroy your credit score. Like why does How would you ever take that?

Unknown Speaker
Yeah, not not quite an appointment, solid risk to reward ratio there.

Apple Crider
All right last thing to close off on Do you have any ninja tips or strategies that listeners can walk away and implement or areas that you think it would be wise for them to dive deeper on as they continue on?

Scott Royal Smith
Yeah, I would say like one of the biggest things to do, as you turn on more and more to your business, is, you know, of course, you know, find people that have walked the path before connect with really high quality people that you think that you can respect their thought processes on that have made money the same way that you intend to make money. That’s probably the best thing that I could could offer. Everybody is like a ninja hack that people will seemingly don’t do. Right? And that you can never have too many of those people. So I’d say recruit more of those people in your life and get better at wasting a bunch more time.

Apple Crider
Words of wisdom, find people who have walked the walk and then be willing to wait Your time Scott, thank you so much for wasting your time here on young smart money. Do you have any last parting thoughts, words of wisdom or places where our listeners should follow up with you at?

Scott Royal Smith
Yeah, the best place to go is just go to the Royal legal solutions comm website. We kind of structure this website is like a choose your own adventure story. So you’re going to see all kinds of things in there about like generational wealth building entrepreneurial ism, real estate investing, you can kind of just click through From the homepage to be able to find out like what are our best strategies that we’ve seen people use that are in that vein over and over and over again. So it’s just the Royal legal solutions calm and or you can just Google my name Scott royal Smith, we should pop up.

Apple Crider
Sweet Sounds like a plan. Well, Scott, I’ll be sure to include links for that in the show notes for our listeners. It’s been an absolute pleasure having you on the podcast. Thank you so much for your time.

Scott Royal Smith
Yeah, I look forward to man, thank you so much for having me on. And I just as a special bonus for everybody on here. I’m going to make sure that we have Uploaded our entrepreneurial quickstart guide for, for businesses for the business operations, tax savings, banking, accounting, insurance, all those things that we’ve been putting together for small companies. We’ll have that up here on March 13. So if anybody comes to the website after March 13, you will be able to download a free copy of that.

Apple Crider
Sweet. Well, thank you so much, Scott. I really appreciate you doing that. And I’m sure it’s gonna be a really valuable resource for all the listeners. Awesome. Thanks. Bye. Have a great day. You too. that is a wrap. So I know I got a ton out of this conversation with Scott he brought a ton of value when it comes to legal structures. I got all my questions answered and I hope you did as well. If there are any questions that we didn’t answer that you wish to we did feel free to shoot me a DM on Instagram at Apple Crider official and I would love to help you out if at all possible. All of the links mentioned in this episode will be located either one inch above or one inch below where you’re listening to this podcast right now. So just scroll to where you need to find the show notes, and everything will be located right there. If you are interested in any of the resources we mentioned in this episode, head on over to Apple crater comm slash resources and that will hook you up with all of the good stuff from my favorite credit cards to the services that I use on an everyday basis. And lastly, if you do want to support the show at all, if you are enjoying what you are listening to here, if you’d like the new style of episodes, feel free to drop a review on your podcast listening platform of choice just kind of letting me know what do you think of the show? What are your favorite aspects? What are your least favorite aspects? What do you want to hear more about less about? I want to know what you are feeling. So head on over there and let me know. And I look forward to reading those. I do read each and every one. So I do value what y’all have to say about the show. And I really do take it to heart. So thank you very much for your time. Hope you have a wonderful day and I will see you in the next one.

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