Financial Freedom and Tax Strategies With CPA Shane Clark

this $600,000 salary they make evaporates pretty quick when you've got a lifestyle like that. If you are just a W2 employee to max out your 401k, that's it. And stop trying to figure out other ways. That's kind of what you got to do. I still have my same little goals that I printed out when I was, you know, 18 years old and they're still in my wallet. I've accomplished all of those goals, every one of them, and you know, before I was at the age of 35. Welcome back to Ambition Aligned. Today we're talking about one of the most common

questions I get from high earners, entrepreneurs, and anyone chasing freedom. How do I actually keep more of what I earn and build a life that lets me be present, not just profitable? My guest today is my good friend and longtime mentor, Shane Clark, a CPA who walked away from burnout and 75-hour work weeks to build a thriving family- centered tax practice in Los Angeles. In this episode, Shane breaks down what really matters when it comes to financial freedom. Why starting your own business is a tax strategy most W2 earners never consider. How lifestyle creep, not taxes, is often your biggest

hidden expense. We also talk about the practical steps to building your own version of enough without sacrificing impact, income, or your time with your kids. This conversation is practical, tactical, and loaded with wisdom from someone who's done it the right way without chasing headline or hype. Let's dive in. Hey, so we're on. So, hey Shane, it's great to see you, man. Thanks for taking the time to do this with me. I mean, we've known each other for over 10 years now, and I broke you into talking on this podcast, so I appreciate it. All right. Well, it's great to see you, too, Devin. I know it's been a minute, but it's always a pleasure, and you know, you're a you're

a great guy. So, of course, and do anything that you want me to do. Oh, I appreciate it. I'm looking forward to coming down, too, in uh in a few weeks. Hopefully, we can find some time when I'm down in LA. But I'm curious. I think everyone on the on the show is going to really appreciate your background and your story uh because you've done it. I mean, you we could go a lot of different directions, but it's really fascinating. You you run a tax practice um over in the Los Angeles area, but you came from a bigger firm and I know there's always a lot of people looking at do they go the corporate route or going

entrepreneurship or starting their own practice and what that looks like and it'd be fun if you shared your journey a little bit for everyone. So, what was that? What was that? What what got you going into and as a CPA first of all and and going to the firm? Yeah. You know, I thought to myself, all right, you know, when I was graduating high school, I was trying to figure out, you know, what do you want to do with your life, right? And uh I wrote down all my goals. I kind of mapped out what I imagined my life would be like and what I could accomplish by the age of 35, which is

great we're having this today because I, you know, I am 35 now and it's, you know, nice to kind of look back and see how things went and did I do what I wanted to do or not do. But, you know, I always wanted to, you know, invest in real estate. That was what I initially wanted to do. You know, when I was graduating high school, you know, you read books and like, oh, how do you get wealthy and but not work that hard? Well, it'd be cool if you own a bunch of rental properties, right? So, that's kind of where I started. It's like, okay, that's my goal. And, you know, what's a good way to get there? Well,

how can I learn a lot about the real estate industry, you know, while having a good profession that earns good money that teaches you good skills to be better? Uh, you know, and I thought to myself like, well, who are the different advisors to real estate professionals, right? There's, you know, you've got attorneys, maybe you've got like real estate agents, you know, you've obviously got a lot of tax implications to being, you know, a real estate professional. So, I thought if I could slot myself in as one of those, you know, advisors to a real estate professional and learn some stuff along

the way and have a good job, you know, that would be a good foundation to what, you know, I wanted to do. So, that's kind of the starting point. Uh I went to Cal State Northridge for college, graduated in 2012, you know, and from there I did pretty well and I had a number of offers from different firms, you know, I had offers from big four firms, you know, and smaller firms, but ultimately, you know, I decided that the best education that I could get in the area that I wanted would be a midsize firm because the type of clients that

they would have are the type of person that I, you know, thought I wanted to be in the future. So that's kind of where I started. So I started a firm called RDZ which has since merged with Armenino and I started working in the real estate department there and you know I worked there for about three and a half years and uh you know I worked really hard many many hours a lot of 75hour weeks and I was commuting you know an hour an hour and a half each way just cuz like traffic is so terrible. Uh and uh after doing that for a while, you

just got really burned out. You know, it's like I'm sure you're well aware of how many hours you have to work at these big accounting firms and you know how stressful it could be. So, you know, after that, uh I went to another more local firm to where I lived, you know, co-res, so another midsize firm. Uh you know, and at that I I decided I didn't necessarily need to do the the real estate thing. You know, it was interesting. you know, I learned some things, but it wasn't necessarily my goal at that point anymore. I just wanted to affirm that, you know, I could

be more comfortable at, you know, not have to work as crazy hours. And I think that it wasn't so much that the firm was putting pressure on you to work a lot of hours. Although there is some aspect of that, I think it's a pressure that I put upon myself to work as hard as I could just cuz I was ambitious and wanted to get promoted early and do all these things. You know, when you're in college, you say, "Oh, yeah. I'm not afraid to work hard. I could work 75 hours a week, you know, no problem. I'm going to do whatever it takes, you know, get ahead and do good in my job, in my

life, and be successful. And then the reality of working, you know, multiple 75 hours a week for like months at a time is a lot different than, you know, what you imagine it to be. I could do anything. Well, you can, but you know, it takes a toll. Then you're stressed, then you don't sleep well and you don't do anything fun and it's like, what's the point of all that, you know? So, so after I left Haradino and I started working at Cone Reszi, a different attitude I felt like where, you know, I'm going to go in there, I'm going to do a good job, but I'm going to put boundaries up and I'm not going to try

and take on all these extra projects to do good or to, you know, make myself seem like I'm more valuable or whatever it would be. You know, ultimately I found that you when you take on less projects and you do a better job on the projects that you do have, you end up performing better than just doing as much as you possibly can. So, you know, I had a I had a good time at Tone Resnick. I worked there for another, you know, about four years where I was a manager. And then after that, uh, my dad

has a small tax firm in Burbank. It's called H&R Clark, which is where I work now. uh and you know he was looking to slow down and you know eventually retire. So I came in there and started working with him and I've been there for I think five years now and uh you know I do more than half the clients within the firm. you know, we've been growing. Um, and it's it's kind of even a better work life balance than I had, you know, at co-resnik. You could determine your own

hours, which clients you want to take. And our firm specializes in individuals in the entertainment industry. I would say we're a high volume, relatively lowcost firm, which is great because there's not a lot of other firms that service individuals like that. There's a lot of big firms who can certainly do a good job, but they're going to charge you an arm and a leg. And there are some very small inexpensive firms who, you know, may charge less but would almost surely do a worse job than what we do. So I feel like we have a very good nice lynch in our in our area, you know,

individuals in the entertainment industry, many many clients at a reasonable fee and we give a good a good product and a a good advice and you know most people normal people with normal jobs, you know, maybe a house and some kids, you know, they need the help and we're there to help them. And I think we do a good job and everyone's very appreciative of it. So I guess that's in a nutshell the story of you know graduating college until present of where I'm at now and uh and I like it. I

would say my life is very good and I'm very content and and happy with where things ended up so far. Yeah. So it was so interesting. I'm curious what what was a triggering event from going from the firm to going to you know to it's a smaller you know starting your own thing or working with your working with your dad which is essentially starting your own thing in a lot of ways right it's it's much more entrepreneurial than taking the solid path and making partner at a conresic or a deote or a KPMG

yeah I don't think there was any like certain you know point or anything like that I just thought I thought thought it was time I thought I was prepared you I thought I was ready, you know, to do my own thing. Um, you know, and what's nice about being in a smaller firm is you get to, you know, actually help people. You know, when you work at a large firm and you, you know, uh, help these large, you know, do taxes for large companies, you know, you're providing a little bit of value, you know, but you're not necessarily working with the owners, you know, you're working with the CFOs and you're kind of doing their taxes in a

timely manner and doing the correct thing, but you're not necessarily helping people. And and that's one thing that I really like burn and what I do now is that you actually feel like you're helping people. You know, every single day when I talk to people, they say, "Wow, thanks Shane. You know, I really appreciate what you're doing. I had never thought about that before. You know, thanks for helping me save a little bit of money." And it's, you know, a good feeling to have someone say, "Hey, thanks. Good job. I appreciate you, you know, on a on a daily basis." So, um, yeah, I like it. I'm happy there. wasn't necessarily some

triggering event that made me switch over, but uh it's it's a good place to be and and since I, you know, started working at Ancient Arts, you know, we've done a lot of great things, too. You know, my dad was kind of stuck in 20th century for the 20 19th. No, yeah, the 20th century. We're in the 20th century. I hope not the 19th. Imagine like the big quills and you know but you know we've done a lot of good things you know we switched our phone

systems have you board rules we're not allowed to like a paper office anymore we do a lot more things remotely which allow us to be more they should kind of restructure all the you know employees in the office and what everybody does um you know in a way that I think I think everybody's happy we provide a good service and uh you know we've grown the business quite a bit uh you know in the last few years And um from here, you know, we'll continue to grow it. Uh but I think the the goal at this stage is just to kind of continue on with what

we're doing. You know, we don't have a lot of aspirations to open up multiple offices, you know, or anything like that. Just you continue on, keep doing a good job and uh you know, keep going, keep pushing forward. Yeah, that's great. Well, something that I love about your story is it seems everything had intention. And something I remember when you were my mentor back in college forever ago, it feels like was you had something you showed me where you showed me like, hey, and and then advice you gave me of you you like, hey, if you have a goal, write it down

and keep it in your wallet or keep it in your pocket or something to that effect and keep looking at it. and you and you had a similar goal of like you're going to get a house and you wind up buying a house in Northridge pretty early on and be and because you had that constant reminder and that kind of visualization. Same thing throughout your career. It sounds like you intentionally went into accounting because you wanted you wanted to pursue this real estate advisor path then as you realized you're okay passing on that but still doing it maybe for fun or for personal lifestyle that you

wanted to be a good accountant. So you chose a firm that would match that for you to serve people instead of just businesses. Like if you went to a big firm, you would have been in stuck in corporate tax forever. And then and then you had that plan overall. So when it was time to transition, you made that you made that step kind of seamlessly rather than having an existential crisis that a lot of people would have when they kind of go get derailed from a big corporate event. And so what what taught you that intentionality, Shane? Where'd you pick that up from? I

don't know. I that's a good question. I think in high school I took this class called like a it was called like investments in investing or something like that and you know he encouraged us to read you know all the you know rich dad poor and all those kind of self-help type books and you know it just motivated me to have a direction. I think I've always had some kind of a direction and motivation. Um, you know, I kind of started out my journey just deciding, you know, what type of lifestyle do you want to live and what do you need to do to get there?

You know, many of my friends, you know, from high school and beyond would say, "Oh, I'm interested in, you know, art history, so I'm going to get a degree in art history." Or, you know, I really liked my sociology class. I'm going to major in sociology. But I never I never thought about it that way. I always thought, okay, what's my goal? Well, I'd love to have a comfortable lifestyle where I could have a family and I could have a reasonably nice house, not be worried about money, be able to save for retirement, you know, support my kids,

have kids one day, you know, pay for their college, you know, not worry about the little things, go on vacations and do all those sorts of things. And if ideally have a relatively good work life balance at the same time. And if you start with those goals in mind, then you just kind of work backwards on what's the career that's going to get you there and you know what do you need to do to accomplish those goals and then you know do it one little baby step at a time and you mentioned that I had my little goals in my wallet. I don't have my wall in front of me but it's a little reminder

checked off you know which ones that I've met. you know, initially many of them were like, I'm going to own five rental properties, you know, so I don't have five rental properties, but you know, the other things about um you know, being a a partner at a firm or uh having a certain dollar amount of net assets or a certain dollar amount that I'm you know, earning per year. Um I've accomplished all of those goals, you know, every one of them. And you know, before I was at the age of 35. I think that having your goals, it only

couldn't possibly hurt you. And if you break them up and like, you know, one little step at a time, you're like, "Okay, when I'm 18, I'm going to do this and I'm going to go to college. I'm going to get this kind of GPA, you know, how can I ensure that I get a good job out of college while I get a good GPA?" you know, as you were I was too. You know, we both became presidents of business honors association at Sea Sun, which I'm very proud of, but I I think you were very proud of as well. Yeah. Well, I love that season. Yeah. So, it was just like little little steps along the way. It's like, okay, I'm in

college, you know, what can I do to do better and get where I want to be? You know, once I have good grades and I have all these offers on the table, which one are you going to accept? you know, you went to Deote, you went to a big four firm, you know, I had offers from big four firms which I turned down to go to a firm that I thought would closely align with my goals in the long run, you know, and I think it all worked out well because if I had gone to a big four, even if I specialize in real estate, it would be like giant REITs and you how much of that knowledge is going to translate here to my own, you know,

knowledge and my own real estate investing that I could, you know, use in my own life. And I didn't think that there would be enough of a connection there. So, I chose, you know, a less prestigious firm to learn what I wanted to learn to then help further accomplish my goals. And now, as I sit here at 35, I I really feel like I've accomplished everything that I wanted to at this stage. And from here on out, you know, I won't have another set of 15 years worth of goals. I don't plan on, you know, becoming a billionaire or opening up like 25 new offices and grow

us as much as we possibly can. this stage, my goal is to uh you know, enjoy my life, spend time with my kids. I've got a four-year-old and a six-year-old, and uh you know, everyone always says this is the the time of your life where you're going to enjoy it, and you want to spend the most time and build those memories with your kids. And that's what I do. I'm here for dinner every single day. I mean, my home office, 5:00, hits, I just turn my computer off and we go have dinner. We might go in the pool afterwards or play in the backyard, you know, give the kids a bath, put them to

bed every single day. And um my wife is a nurse just like you. Yeah. So we have a lot in common. I got a lot in common in Devon. And uh you know, she works three 12-hour shifts every single week. Uh so essentially 3 days a week, you know, I'm a single parent. You know, I get the kids she leaves before the kids get up and she gets home after the kids go to bed. And uh and I I enjoy the time that I have with them, you know, just with me me and the kids. You know, if it's a weekend, every single weekend on a Saturday or Sunday, I'm going to find

something for us to do. We're going to go to the zoo or we're going to go to the aquarium or we're going to, you know, schedule some playins with some other kids or we're going to go out and play basketball. You know, every single weekend, I'm intentionally doing everything I can to to spend as much time with my kids as I can. So Deon, why don't you tell me a little bit about uh about you and you know you you recently uh had some changes in your life and what was the impetus to that because I' I'd be interested to hear your side. Yeah. No, I'll definitely tell you. Yeah. And thanks for the

question too, man. Um, and something just to call out there is something I've always respected you for and something that we were one of the few people I think I can count them on one or two hands where I've like you've been really remarkably consistent over the last 10 years of our friendship of you've always just been a great friend but you've always just you stuck through to your goals but without sacrificing your values of taking care of your family taking care of your friends making time for others mentoring others and just utmost respect for you in that and I think everyone can learn from that that setting that go those goals and the intention are so important and it's part but partly has inspired me of going out

to do my own thing, leaving Google to go be in a consulting firm. I'll be joining this consulting firm, Principal Consulting Group, and uh and specifically focusing on adding value to founders and CEOs and CFOs, like real people, rather than making Google a couple more billion dollars. Like I was I I remember I got uh I saved Google like maybe $400 million on one of their processes and I got a you know $1,000 check for it because 400 million doesn't matter. It doesn't matter. It's Google. They just like, "Thanks, buddy." You

know, um, but the bureaucracy in those is, it's crazy. You can save a company like that 400 million and get a small check. But if you save if you help someone like a CEO that you might know or even just a regular person on financial coaching or strategic advisory work or business coaching, you you could get like save them a couple thousand bucks a month. It's life-changing. like that's like, "Oh, now I can afford to take my kids to college or now I can actually buy the house or hey, now I like I was able to figure out how to make my team stronger because of you or

all of those things are more rewarding. So, I'm entering that season of life of I'm not chased in the titles or I I got the experience that I wanted to get and now I just want to have an impact and and also have that flexibility to do similar to you. Like I want to be present with my daughter. She's turning five this week and I really want to have the next 10 years of work close into her teenage years and her adulthood. I want I want to always be that present figure while and I think you can still have a fulfilling and fruitful career while you do that. You don't need to burn the

candle at both ends and also I'll also be something I think you both and I are both passionate about. And if you're ever up here, I wish I was down there. I'll be teaching. I'll be at uh teaching at high uh uh local high schools and community colleges to give back because I'm such an avid believer as I know you are of community college and state college systems and good high school education. Education doesn't have to be as expensive as people make it out to be and you can still have great careers is worth testament to both testament testimonies too. Right. Yeah. Something you know you were talking about respect

for me Deon but you know I always say you know only the utmost respect for you. you know, you say, "Well, well, I'm consistent over here, you know, and I know you don't ever talk about yourself in that way, but you know, look, look at you, man. You know, look at what you've done. You, you know, from where you started, you know, and where you're at now, it's just like extraordinary what what you what you've done." And you've been extremely consistent as well. And, uh, you know, I think a lot of what you you know, you had goals and, you know, I feel like you've accomplished those goals, too. And

um you know you say that I was your mentor you know which I is is flattering to me and and us being you know the same age and I only graduated college like a couple of years before you um you know is flattering but I will say that you know anything that I've done for my side you you've just done better and improved on. You know, I I I think back of my times when you're I was a business honors association president, which is like a extremely fond of my life, but I had a great time doing it. And then you come up a couple of years later and you're just like, you do even better.

You know, you're you're just the man, Devin. You know, you you've accomplished so much and you know, it's you great. So, you should Oh, that's so nice. I still remember going to your place. It was so nerve-wracking to me because I was like I literally came out of homelessness and I was in complete poverty and now trying to do this college thing. And I remember like, "Oh, there's this guy who was the president of an organization." And then you were the I reached out to all the presidents, pre previous presidents, and you were the only one like, "Come over to my house. Just come over to my house and talk to me about what you're thinking about." I went to your house in Northridge and I showed you some of like

the tutoring videos I was trying to do. That's now the YouTube channel that I get like 50,000 views a month now, which is insane. They still don't pay me anything, but it was still cool, like a cool number to talk about. Um, but I showed it to you and you're like, "Yeah, let's just do it, man." and you used to show me the goals in your wallet and it was just really impactful and it became like you become such a good friend even though we don't live close together. It's always just I'm always like yeah I'm going down I'm going to get a key chain and the the kids are going to get together at the same age. It's it's really cool man. Um I would love to talk about I'm sure everyone on the podcast is going to be really interested and

fast forward to the session of it'd be really helpful if you talked about a little on pack strategies especially for people making most of the people here making some money. Um, there's going to be some people who are in my situation and kind of working their way up. But there's a lot of people here or I get a lot of phone calls from my we have a mutual friend who called me recently and like, "Hey, I'm making over 200,000 $300,000 a year in W2 income now. How do I pay less taxes?" And and um I think you're the guy to

tell that to give the give the honest truthful answer here in in a way with integrity, right? So yeah. Yeah. And it's not it's not that the IRS is not going to be defunded, right? It's not that's not the answer. Yeah. Oh, yeah. You know, just don't pay any taxes. You know, you could be a sovereign citizen and just don't do it, you know. Uh but uh uh well, I'm kind of the guy to talk to on that because this is, you know, the same questions I get every single day, you know, in and out. got, you know, in our practice, we've got like 1,800, you know, relatively small

individual clients and, you know, another 300 or so, you know, corporations or or business owners. And um I'll give you a couple of, you know, let's let's give an example. Somebody's making $300,000 a year and they're a W2 employee and uh let's just say in this example, they don't own a house or they and they live in California. Frankly, there's not going to be a ton of options that this person could do. You know, at the very least, let's talk about the low and fruit. They could max out their company 401 to you know, you're allowed to do if you're under 50, which I

believe this person were talking about is, you know, for 2025, they're allowed to put $23,500 into their 401k, which to, you know, federal and state, that's probably going to save them, you know, 35 cents on the dollar for whatever they whatever they put into that account. So, you know, that's that's some real money. Um, aside from that, as a W2 person, that's pretty much all they can do. Their company offers like a a mega backdoor Roth, which you know, some bigger companies offer something like that, you know, not going to save you any taxes,

but at least you could put some more money away for retirement. When you do retire one day, you'll have a pretty good Roth account set up. Uh, you know, if we take it one step further and we say, okay, the same person, but they do own a house, so at least they're, you know, itemizing their deductions. Um, from there, yeah, still not a whole lot of options. As a W2 person, you could probably give a little more money to charity. That would be helpful. Uh, there certainly every dollar that you're going to put into charity is not going to translate to, you know, more than a dollar in tax savings. It'll always only be a percentage. So, it's always nice to

be charitable, but I wouldn't necessarily go out and give money to charity just for the tax savings. If you're going to give it anyway, then, you know, so be it. Um, you know, if you're barely itemizing your deductions or you're not quite there yet, uh, you know, you could consider giving to charity every other year and then double up your deductions and that it might actually give you some benefit. Whereas, if you do it every year, it could not kind of depends on the circumstances and where your income is on. Where it where it really gets interesting is if you are a business owner. Well, oh, so let's let's I want to get there in a second and I think

that so I I think I think really good call out because I I think we skimming through it really fast, but if you are just a W2 employee max out your 401k, that's it. And stop trying to figure out other ways. That's kind of what you got to do. There's not much else you can do. And too many people kind of hyperfocus on that. And then the second piece that I want to be clear with the audience too is just because you get tax advantages for owning a home doesn't mean that it actually makes economic sense. Like there's sometimes where the tax

advantage if you get tax advantages on a $15,000 a month mortgage but your rent could be $3,000 a month. Like don't you're not going to get enough tax advantages to make up for the difference between the mortgage and the rent. And so there's a ways to think through. Um so yes you agree first. Do you agree with those two sentiments? Am I missing anything so far? Yeah. No, that sounds good so far. Yeah. Okay. And then and then so now we're getting to like, okay, what can you at some point maybe it makes less sense to continue to

go up the W2 chain. I mean, always making more money is more money, but at some point you're at an effective tax rate of almost 40 50%. And there's other ways that you can start structuring your life to make more money that have are not taxed at those ways. And that the most common way is to go start your own business, right? And so I think that's what we're going into what you can advise on next. Yeah. Yeah. Sure. So let's say you know if you're like a a single owner, you know, single owner business, then your options really open up and what you could do to save

yourself some taxes. Um so what's extremely common for our clients, we've got like loan out corps. So, you're a you're you're in the entertainment industry. You're like a producer or you're a director or a writer, you know, and these big productions are going to they'd be willing to pay you, you know, as a corporation or as a W2. And in some instances, it's very beneficial to be a corporation. And there's a handful of reasons for that. Number one, where I just said a minute ago, you know, as an employee, you're allowed to make a

$23,500 401k contribution if you're under the age of 50. when you're self-employed, uh you could have a 401k and depending on if you have employees or not employees, uh you know, you could do up to $70,000 in your account. So, you you know, you more than doubled how much you could put into retirement, you know, which will save you a pretty significant amount of money right there. um above and beyond that. If you're like really making some good money, you're making like, you know, more than let's say $500,000 a year and you want to put

away even more than 70 grand into your 401k, then you could pump up to something called a defined benefit plan or a cash balance plan, you know, and I'm not going to say disguise the limit, but you could contribute a lot into one of those plans. And really depending on how old you are and if you have employees or don't have employees, you know, I've got some clients that are able to contribute, you know, over $500,000 a year into a into a defined benefit plan. Not forever, but you know, typically these people have a really good few years and then, you know,

retire. It'll go down. Um, but you potentially could put in hundreds of thousands of dollars into a plan like that. And then, you know, of course, if you're making, you know, a few million dollars and you could put $500,000 in your retirement account, it's effective. you're going to save you, you know, $250,000 in tax almost of whatever you put in the account, you know, could end up saving you also. Yeah. And and let's be the if you don't mind me pausing there. The real like one of the real advantages about that is that when you retire, your income is going to likely drop a lot when you're from when you're

working and then you can smooth out when you're taking out those distributions once you access those account that even if you're doing like a 401k pre-tax instead of a Roth and people watching this can look that up. But um you can choose when you're doing your distributions and though when you're doing those distributions you can kind of control your taxable income a lot easier than you can when you're like when you're actually W2 employee. Am I speaking about this right? Yeah. Yeah. Definitely. You know, I would say to an

extent, um, you know, if you're making a million dollars, you know, and you're in California, you know, you're going to be spending almost half of taxes. And who knows what the future will hold, but very likely, you know, if you're a high earning type of person, you know, in your 50s or so, someday you're going to retire. Let's say it's 70, you know, and you're retired. Well, that million dollars you used to make every single year, you're not making that anymore. So, you're not in a 50% tax break. So, I get to save 50% today to then pay a

lower tax rate in the future when I do retire. You know, what a lot of people do is they'll move to Tennessee or they'll move to Florida or Nevada and there's no state income tax and right off the bat they chopped off, you know, 10 to 14% of their taxes just because they moved to another state. Um, you know, when when you do put a lot of money into your retirement account for many many many years, uh, and then you reach by the time, you know, if you're not very close to retirement now, you'll be 75 before you're required to start

taking the minimum distributions on those accounts. Um, you know, who knows what the tax rules will be like at that point in time, but you know, if you for sure are going to save almost 50% today and very likely pay a much lower percentage of that in retirement, then it absolutely makes an enormous amount of sense to put money into your 401k. And you know there's there's all these good tax savings things you could do which I could talk about all day long but you know what I would like to impart on you know your audience is uh many

people view saving for your retirement as if I have any money left over then I'll save a ton. They say, "Okay, I bought this house that I really liked, and I have a, you know, a Mercedes, which I like, you know, and I can afford it, so I'm going to have it. And you know what? This school district I'm in is okay, but I want the best kids. I'm going to put my kids in front of school." And you know what? I like buying designer clothes occasionally, right? And we go out to nice dares

because I have to whine and dine my friends. and you know this $600,000 salary they make evaporates pretty quick when you've got a lifestyle like that. Um so what I try to tell people what I do myself and Dean I think you do the same thing which is why you know I I look up to you too is that I I try and tell people to save for their retirement before they do those other things. So, you know, don't don't come to the end of the year on regular taxes. And I have to tell you, you owe $100,000. And also,

while you're at it, let's put $50,000 into your retirement account. So, you know, you need to come up with $150,000 now. And it's absolutely a good tax. But I'm telling you, at the end of the year, you know, you need to come up with 150 grand. And somebody makes $500,000 a year and has a lifestyle like that, they probably don't have it. And they don't have the money to save for their retirement. and then they have to pay more in tax because they just don't have the cash when the time has come to to pay it. So they leave a lot of tax savings on the table because of it. So

you know what I try and tell those people is, you know, save for retirement first. Set your taxes aside first and then look at your budget after you've already accounted for those things. And then, you know, should you buy that Mercedes? Maybe. Should you put your kids in that private school? Should you on expensive vacation? Do you really need to wind your dime and get clients like every single day or week, you know? And uh I think that that's the financially smart thing to do and and you'll actually get to retire someday if

you do that. You don't have this large lifestyle inflation. And if you've already saved for your taxes and I've already saved as much money as I possibly can, I'm going to max out my retirement account. Maybe I already gave a little bit of money to charity and I still have extra money, you know, left over after all this. There's other things you could do too before you buy a luxury apartment. You could put money into your kids uh college savings account like a 529 plan, you know, which is effectively uh you get to defer any you don't get to pay tax on any account.

So, I personally put started out putting like $15,000 into each of my kids 529 plan when they were like just born and by the time they are ready to go to college, you know, that'll be worth and I contribute a little bit more as we go along. But, uh, you know, I'll probably have $100,000 in each of their retirement account in their college savings accounts to pay for their education and I'll not have to pay tax on the gains in that account. And if I did it 18 years before they went to

college, the gains are going to be quite significant. So, you know, you you save for your taxes, you save for your retirement, you put money into your kids 52 plan, you increase your savings, and you do all those things before you, you know, start splurging on those, you know, things that aren't necessary. And you're going to find out that maybe you shouldn't be buying those expensive cars and maybe you shouldn't buy that really expensive house that you're really stretching to afford. And if you just, you know, bring down your lifestyle a little bit, whether or not you feel you

deserve it is really in the long run going to be much much better for you. And then you have the option to retire early. Maybe instead of working till you're 75 and grinding away and you know being completely absorbed in your life, maybe you get to retire at 60 or 50, you know, wouldn't that be nice? Or even if you don't want to retire at that point, at least you you have the choice. And just having the choice of retiring or working or leaving Google or doing whatever you're going to do it it brings down the stress in your life and and

everything is better. You could say no to clients. You could fire clients that are annoying, you know, and that you don't like because you don't need them. I'm okay. I'm gonna be all right, you know, and and you know, there's the short-term benefit of having, you know, a nice car or a bigger, more expensive house, but the the long-term peace of mind that you get from having this safety net and all this money saved up is, in my mind, far more valid so much wisdom for everybody. And I'll recap it, right? And you tell me if

I'm off base, but first off, hey, maximize your 401k and maximize your retirement accounts. And if you have your own business, you can even do that more and you have more flexibility with what you can play with there. And just to validate, I know a lot of people at Google who are multi-millionaires and their 30s and it's not because of the Google income. It's partially it's mainly because most of them started saving for retirements in their 20s and maxing out their 401ks. If they max out their 401ks in their 20s steadily throughout their entire life,

by the time they're in their late 30s, early 40s, they're all multi-millionaires. That's the main reason. That's the main driver for the wealth. The extra income helps, but normally like to your next point is then you can maximize other tax things. You got your HSA, you got your 529, you got all that fun stuff. But at the end of the day, you can't be lifestyle creep. Like even if you save money, even if you run it through a business and you can take some tax off of it, at the end of the day, it's still only a portion of the expense. If you manage your expenses and manage your lifestyle, that's going to be the biggest win in the long run.

And yeah, like to your do you need the $100 bottle of wine or can you drink the $20 bottle of wine? And can you really tell the difference? Can you really? I was in a wine tasting the other week where That's not me. Yeah. No, I don't know anyone who can. I have a friend who does blind tastings who does um like he'll bring a $20 bottle, a $50 bottle, a $100 bottle, a $5 bottle, and then one of these times he brought a $10,000 bottle to chalk everybody. And he didn't tell anyone. No one knew. No one knew. And I thought it was the worst tasting bottle in the batch. Like it doesn't

matter. Like none of this stuff. He could show off in the ego and everything, but at the end of the day, like you said, having the peace of mind to I don't know, people say f you money where you can just retire early. I don't really believe in that. It's more like, can you just say no to things in confidence without having to be worried about like not going to a nice dinner that night or not paying the bills that week? As long as you can say no by having a few years of savings, you're you're okay. You know, that that gives you so much power. Yeah. Absolutely. And then, you know, aside from that, there's other good tax things you could you

could do when you uh build your own business. Um there's in 2018 when they did the Tax Cuts and Jobs Act, it effectively eliminated your ability to to write off your state income tax, right? So, it may, you know, change with the new tax bill. You know, we'll see. Uh but uh there's an election you can make if you've got your own, you know, escorp or you know multimember LLC um where you can elect to pay your state taxes at the

corporate level instead of at the personal level thereby allowing you to deduct them for this federal return. There's other nice things uh BI qualified business income deduction. You just get a a free deduction because you got your own business, you know. So, uh, and they put that in place, I believe, because they they cut the corporate tax rate kind of and they wanted to make it fair for people who didn't have a, you know, a Ccorporation. So, there's another little benefit. Um, you know, maybe you've got some write-offs. You know, in our industry, you could have an

actor's very common example. They've got an agent, they got a manager, and they got an attorney. And those people are going to take 25% of whatever they make. And if you get paid on a W2, those are called unreimbured employee business expenses. And guess what? They're not deductible on the federal tax return. You can still take them on the state, but not the feds. Congratulations, you made $75,000, but you get to be taxed on $100,000, right? Doesn't quite seem fair, but uh you know, they could have a corporation be a loan out corporation, and now they can write those things off.

So uh you know if you're a employee but you've got a lot of expenses legitimate expenses I would hope like this on it then corporation you know or a business would allow you to write those up where otherwise you would not be allowed to write those things. So you know it allows you to write off more stuff put more money into your retirement account you know some extra deductions for your state income tax you know among some other you know small minor tax savings things. But, you know, if you are in a position to where I could be a highly

compensated W2 employee or I could be, you know, my own business owner, you think you could be successful and make the same amount of money at it. Certainly, there are are a lot of good tax savings things you can do once you're a business owners. If you have that option, I I would encourage you to do it. You know, if you feel like you could you could handle it and do your own thing. And you know, I've got plenty of clients who do that and then they've been used to having all their taxes taken out of their paycheck this entire time and then we come around at tax

time. They didn't put any money away. They didn't save for retirement and they allow this big tax bill and uh you know they're not ready for it and now they're late with the IRS and they got to get out payment plans. And so I wouldn't necessarily say it's for everybody, but hopefully your audience is is conscious and budgeting and keeping track of these things and those are the type of people that I think it it would and could be good for. Well, I think I think that you great call out. So, first off, this isn't for hobbies. It's not for like,

hey, I want to start I'm not doing this for a podcast. Yeah. It's not if you're just starting a nonprofitable podcast. You have no business doing it. You can't write off your you have and you're have no income associated with it. Don't write off your camera. This would be to your taxes next year. Yeah. Yeah. Exactly. Exactly. But if you have a business, you could write off the computer, right? Like if you actually and you're making income. So, first if you have a business, make sure the business has income. Like don't go to a tax guy and be like, "Hey, I have a business and it has a $50,000 loss and

it turns out to be a bunch of like strip club tickets and, you know, and uh and camera equipment." You don't want you don't want that. um uh you'll get flagged as a voyer too. You might have to report it. But the the other the other side is if you are actually making money as a business, there are legitimate ways to write it off if you structure it correctly. But work with a tax professional and that and at a certain income it makes sense to start having those discussions. And that's what I do. It's like can you not be a W2 employee? Can you go into consulting and and or being

an owner who can take that money legitimately following the laws and everything, but being an owner so that you can structure like if you have a high cost business where you do actually need a car where you do actually need to go entertain clients where you are spending on marketing and and investing in the business then this is there's some great ways that you can actually lower your tax bill and you might unnecessarily be paying for it in W2. And I I hear people be like, "Well, don't you pay double tax as a W2? Don't you have the social get hit twice on

social security?" But Shane, I'm sure you know the creative ways through the EC Corp and other corporations to minimize that, but also the savings you could have definitely can outweigh it if you do it right. Yeah. Yeah. I literally didn't get into the nuances of uh you know what specifically you're going to do when you record, but if you want to you know be a client of ours and that's interested and you know I'd be happy to talk to anybody about it for you know a few minutes here and there. But um I want to go back to something you said cuz you know of course millions of

people are going to be watching this episode just to you know get a glimpse of how handsome that we both are. Um exactly nothing else but um don't get your tax advice from Tik Tok please. It's like I can't tell you, you know, once somebody calling me up and they're like, "Hey, Shane, like I'm going to hire my kids." I'm like, "Okay, okay. How will your kids?" Yeah, there's three and five. And I'm like, "Okay, what is your three-year-old going to be doing in your in your business?" You know? Well,

they're just going to pay them and we're going to write it off. It's like, "Okay, guys." Tik Tok said it responds. Anyway, don't do that. And don't get your advice for for Tik Tok. you know, there's there's usually a grain of truth in a in a in a sand dude of misinformation. So, uh, you know, talk to your tax professional. You can certainly always ask them. I get the question all the time. And, you know, I I try to set everybody straight. Um, you know, if you do want to hire your kid and they're 16 years old, do you want to have them do final in your tax office?

You you pay them an hourly rate. You put them on a time sheet. You you pay them a normal rate for what they do. and they have to show up and actually do the work and you have to actually pay them. So, you know, don't think if I go form an LLC, I'm allowed to write off whatever I want, you know, which is another one I get, you know, probably once a week. But I have an LLC, so I can write off whatever I want. No, no, you can't write off Netflix. Yeah, exactly. That makes money, you know, as knows.

Yeah. No, that's great. I I I appreciate that, man. Thank you for the Well, thanks for the great advice. I know everyone can go in, you can go into a ton of detail in each way and we don't have the time today and if people are more interested maybe we could have another conversation but I will encourage everyone I'll link your you know link your business profile and everyone just reach out to Shane he's the he's my tax expert he's a good friend of mine and someone you could really trust that wedge who can actually help you with strategic planning not just um doing your you know you don't want to come to him just at the end of tax season with a rush order you want to

come to him and engage him early and with strategic planning and pay him a he he's worth every single dollar, right? It's much better than H&R Block, hence the clerk. Yeah. You know, you could this is, you know, unofficial bottoms. You could you could pay you could pay less and get less, you know, or you could pay more and get less. So, we try to fill this little niche where, you know, you pay, you know, not too much, but you get you get bucks. We like to think. Yeah. Yeah. You can get better. Well, I I appreciate Shane. And

I want to be respectful of your time. I know you got to pick up um the kiddo. So I got to play one game with you. I have to edit with everybody at the end. Just a rapid fire. Um three questions I Well, three or three to five questions I ask everyone depending on the answer. So first off, sweet or savory? Sweet. Okay. Then what's your favorite dessert? Okay, that's a good question. I'm not a big dessert kind of a guy. Um, but you like sweets. Yeah, sure. I guess you

know I'm I found it and I don't know if you're this way and now we're getting back off topic here, but I just uh feel like some people have like a strong drive to eat sweets or other things and I just it's like the same difference to me. I could eat an apple or I could eat a candy bar. It wouldn't wouldn't make any difference to me. I Yeah. So, let's say sweet. Uh, what's my favorite dessert? I don't know. Like a how about a chocolate lava cake? Those are pretty good. Okay. Okay. But I think the truthful answer there is the real no

food desire. Nothing's going to get you excited. It's Yeah. You know, doesn't matter much to me. Yeah. Yeah. Okay. Okay. Um Good. What's your What's your book? What book are you reading right now? What book am I reading right now? Uh it is called It's a a Brandon Sanderson book. It's the uh it's like the Way of Kings book series. The new one that just came out. Oh, you're reading number four. Are you reading number four also? Yeah. I think it's like the sixth book. I think the sixth one just came out the week. Is it this? Oh, man. Is it really six? Yeah. And it's like, okay, I'm

reading it with you, man. I'm reading the same one. Are you so Yeah. Yeah. Yeah. That's so funny, man. What? Great. You introduced me to him and it's great. Yeah. The most recent one, man. He never stopped. It's like multi,000 page book. Like two books a year. I don't get He's like you, Devin. You you could like, oh, I'm just getting my masters on the side and I also have a kid and I also work at Google and I also teach on the side and I also do a podcast. Like I don't I don't get how you do it, man. You know, you you don't sleep or you don't get to watch any TV or anything cuz you you just do it all. And that's that's what I

look up to you. You know, you say I bur, but you know, if I think to myself, you know, if I really wanted to be efficient and ambitious and take over the world and do everything I possibly could, who's the guy that I would try and emulate? It would be you. Oh, I mean that that means a lot, man. That means a lot. I got one more question for you. Just that was a great club, but I got one more. What's your least favorite piece of advice that everyone asks or everyone gives? The least favorite piece of advice that everybody

gives. Well, I mean, we kind of already mentioned it that that oh, go form an LLC and you can write off whatever you want. Yeah, that's my favorite. Okay. Okay. And too many people give it. That's good. Hey. Hey. Yeah, Shane, I appreciate it, man. This was a lot of fun. I hope you had a good time, too. And I'm looking forward. I got to tell you when I'm getting down. I'll be down in LA, I think, next week. So, I'll give you some dates and hopefully we can find some overlap. All right. Sounds good. Well, I you know, good seeing you too, Devon. And it's always a pleasure. And

uh if I'm up in San Francisco, I'll let you know. Appreciate it, brother. You have a great day. All right. All right. You take it easy. Okay.