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See if your company qualifies for this special offer@oracle.com strategic that's oracle.com strategic in a world of economic uncertainty and workplace transformation, learn to lead by example from visionary C Suite executives like Shannon Schuyler of PwC and Will Pearson of iHeartMedia, the Good Teacher explains the great teacher inspires. Don't always leave your team to do the work. That's been the most important part of how to lead by example. Listen to leading by Example executives making an impact on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Mark Seale. And I'm Nathan King. This is Leave the Gun, Take the Cannoli. The five families did not want us to shoot that picture. This podcast is based on my co host Mark Seale's best selling book of the same title. Leave the Gun, Take the Cannoli features new and archival interviews with Francis Ford Coppola, Robert Evans, James Caan, Talia Shire, and many others. Yes, that was a real horse's head. Listen and subscribe to Leave the Gun, Take the Cannoli on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. The OGs of uncensored motherhood are back and badder than ever. I'm Erica. And I'm Mila and we're the hosts of the Good Moms Bad Choices podcast brought to you by the Black Effect Podcast Network every Wednesday. Yeah, we're moms, but not your mommy. Historically, men talk too much and women have quite quietly listen. And all that stops here. If you like witty women, then this Is your tribe. Listen to the Good Mom's Bad Choices podcast every Wednesday on the Black Effect podcast network, the iHeartRadio app, Apple podcast, or wherever you go to find your podcast. Welcome to Money and Wealth with John Hope Bryant, a production of the Black Effect podcast network and iHeartRadio. Hey, hey. This is John Hope Bryant and this is money. And we. I am honored to bring to you a special segment breaking down contracts in taxes. This is something that is fundamental to your success in business, in life, even your personal life. I'll cover all of this over the next 45 minutes or so. This was inspired in part by the artist Jelly Roll and a clip that he did on social media, which I then turned into a piece of my Straight Talk Live series on my platforms where he talked about contracts in the music business and he broke down how artists get in a bad spot. I'm not going to say taken advantage of because as I will describe here, in most cases, they're not being activ. Actively taking advantage of. They're just not actively paying attention to the thing that matters most. It's the music business in that example, it's the business of music. And to think about it in any other ways is not to understand what you're doing. Or to quote my dear friend, my dearly departed friend, Quincy Jones, he says, if you think you're in the music business and you don't own music rights, publishing rights, licensing rights, some kind of rights, writing rights, you're actually not in the music business. You're a temporary performer. Drop the mic statement by Quincy Jones. So Jelly Roll goes into this thing and you can look at it. The clip on my social media platforms at John Bryant, everywhere, wherever you platform you, you choose to. To focus on, Instagram's probably easier. I break this down in great detail, but the key part of this is he explains that when you owe a million dollars, you've been given an advance. Let me make this clear. You've been given an advance for a million dollars. You don't realize that you owe that money back. It's not a payment. And you know, oh, that's all good. Next item. It is an advance against revenue. And the way that works is you, you extract things. They give you a million dollars. It's supposed to pay for productions of your albums and your videos and your business expenses. Oftentimes people go start raving mad and start spending money on stuff, you know, cars for their friends and jewelry and travel and all of that, and then they run out of money and they go back and they may ask for some more and that's, you know, they think they're getting some more money in payment. Really, you're really just increasing your internal credit line. And the way that the record company gets that back is, is they've got a contract with you in this example. And it's. In his example was 70, 30. He, he thought that was a really great deal. Some artists are 80, 20, some artists are 95, 5. Meaning, meaning the record company in this example. And don't get mad. Business as a capitalism is a, is, is just a, it's just not emotional business is a, is a gladiator sport. It's a non emotional situation. It's not meant for it to be personal. They just, it is what it is. So again be careful the contracts that you sign. But in this and fair exchange is no robbery. So in this example he owned 30% of his revenue. They owned 70% of every dollar that was made until he paid the advance back. Let's use a million dollars as an easy number. So until he, so they got for every dollar that of new album sales to make this easy, the record company got 70 cents and he got 30 cents or paid back at the rate of the deal. Which means that out of his 30 cents the million dollars he was advanced gets paid back and he keeps paying that million dollars back from his 30% while the record company is getting their 70% until he repays the million dollars in total in which case he then starts recouping 30% to his pocket, paid back at the rate of the deal. Which means that the record company, the financier, the venture capitalist, the one who's backing you here, the one who's taking the most risk may earn a million dollars before you even get your first cents of your 30 cents. In fact they will make earn a million dollars. They're going to get their million dollars back but they may earn another million dollars or $700,000 or it depends on how this gets calculated but they may earn a million dollars back on top of your, on top of your million that you reimbursed them before you make a dime because they're making a 7030 split, they can actually do better than that in that example. Unfair exchanges, no robbery. So just, just watch the contracts you sign because if it's a 95, 5 contract, which some artists do sign it, I mean that's really painful. They make 95 cents of every dollar that comes in. You make 5 cents and you're going to pay them out of your 5 cents the million dollars back. Right. And yeah, we only want to do that calculation. So let's get into the positives here, because these contracts don't have to be ankles around your weights, around your ankle or some kind of a negative situation. They can be quite empowering. They've been for me in most of my business experience. But actually, I've had some bad experiences, too. I've written some bad contracts. I've had some bad agreements. I've had run ins with the IRS and Franchise Tax Board in California. We'll get into that. But let's talk about contracts and taxes as a foundation for your financial success. Let's now start with my own personal story. And I described this in my book, Financial Literacy for All, which is a bestseller, been a bestseller for the last year. I encourage you to go get your copy. And when I was in business, I wasn't paying attention to paying taxes because my view was the company wasn't making money. So why should I worry about it, and I'll worry about it when I become profitable. I actually made two mistakes. I hadn't paid. I hadn't filed personal tax returns for about six years in a row. Yes, me, this is one of my teens. I was homeless during the time. I was homeless for six months of my life. So I guess you'll understand some of that. I was just rolling really fast, trying to hustle. You can all relate to that. But no excuses. I should have filed my taxes. Well, that wasn't the worst part, the fact that I hadn't paid my taxes, because that was not. I hadn't filed taxes. So I didn't owe any taxes, but I hadn't filed them. So once I did file them, I owed penalties. And the IRS is extraordinarily punitive lender. So you don't you want to owe money to anybody but the irs. And they didn't come after me. They didn't threaten me. I was a small fish, not making a lot of money at the time. But I finally found them all at one time before they came to me. I came to them, which I'm encouraging you to do. And I just paid the penalty through a payment agreement. Over time, the way they hit me was later on when I was making a little money through the business. Well, the business was not profitable. I had a lot of cash flowing through the business, and I had employees I was paying. I was not paying withholdings out of the employee's paycheck. So when your Employees are a W2 employee, they're a salaried or hourly employee, you've got to pay withholdings out of that. Well, again, I figured the business wasn't profitable. I wasn't profitable. Why should I do that? I just write them a straight check for what I owe them. The Franchise Tax Board, the state of California, got wind of that, and they literally put up a cash register in my lobby, and they wanted their pound of flesh. They would take every receipt, every check that came in that front door until they got paid back. The taxes, plus the penalties and interest that I owed them from the employee withholdings that I stole from them. I didn't steal it, but I borrowed it. And it was very painful. We're talking about. It was, as I recall, about $40,000 in total. And back then, that was a death knell for me. And I had to hustle and take care of them and take care of my responsibilities at the same time. And I learned a very valuable lesson from that experience and those two experiences, which is just treat the IRS as your business partner and file your tax returns. Look, you cannot run your life without. This whole country runs on taxes being paid. Your police are being paid by taxes. Your schools are being paid by taxes. The roads and gutters and the maintenance, the building of bridges, light street lights, sanitation services. I mean, all the infrastructure for the city you live in and the country you live in is paid through taxes or as a. To paint is really plain. Even if you want to distribute money like a socialist, you have to first collect it like a capitalist. All this is connected. And folks say, well, I don't, you know, I don't want to be a capitalist. I want to work for a nonprofit. Well, nonprofit's money comes from, in this case, the government. And the government gets that money from taxes. Or if you get your money from charitable contributions from wealthy individuals, those individuals are getting a tax break because they're making a charitable contribution to you which affects, hello, their taxes. Al Capone, the famed gangster, did not get taken into prison, arrested, and then put ultimately into prison because of rape, murder, mayhem, all of which he, on some level, was guilty of, but was never convicted, indicted, but never convicted. He just got away with it all. But when the IRS came up to him for. When the federal government came up to him for tax evasion, boom. Like, they're like, the government was gangster. They're like, you can make all this money illegally if you want to, and we can't prove you made it legally, but your lifestyle is such that you can't do that without making X kind of money and you didn't pay taxes on that. So it's ill gotten gains. We want our share. And they put him and they locked him up and he died a very painful death. After that it was over. So pay your taxes. So you're going to understand the basis of contracts and taxes. You're going to learn how to protect themselves, yourselves from unscrupulous people and protect your businesses. You're going to get best practices for wealth safety and well, building wealth safely and legally and sustaining it, retaining it. Okay, so a contract is just simply an agreement. Just start with the basics. A contract is simply an agreement, but it's only as good as its enforceability and it's only as good as the people, I might also add, who are signing the contracts. If you have two unethical people on two sides of a signing of a contract, the contract is useless because it's only as good as the full faith and credibility of the people signing it. But let's assume the people are honorable. Every major deal, partnership or investment should have a contract. I love limited liability contracts. LLCs are simple, they're elegant and they're easy for anybody to understand. I have a ton of LLC agreements. When I had the Promise Homes company, I since sold most of the company. But when I had that company, we had just, I mean, I think it was hundreds of LLC agreements. The ideal situation, we owned 700 homes just under that. The ideal situation would have been to have each one of the 700 homes in its own limited liability corporation, its own LLC. I think we bought the homes in bunches so we would have a group of homes in one limited liability corporation. So if somebody tripped, fell, fake, faked an injury or whatever on a house, or wanted to sue because they realized I owned it or whatever, you could only sue the asset or assets that were in that bucket of assets in that llc. Limited liability Corporation. You couldn't punch through the LLC and get to me or my family or my other companies or all that kind of stuff because you're greedy and unethical in that situation. I'm not suggesting somebody's greedy and unethical, but limited liability LLCs really help in that regard. So key contract clauses and what they mean payment terms. Avoid getting paid late or being paid not at all by having payment terms. What's the scope of work? It prevents misunderstandings about the responsibilities that you have in a contract or someone else. What's a termination cloth is what happens if you, if things don't work out in an agreement. So how do you basically how you get out of the agreement. By the way, I'm gonna just throw one in here in perpetuity, right? That means that I just. I love that phrase. I was with Cam and Cam Newton, the NFL star. We did a podcast together on his show Funky Fridays. You'll. They'll be. You'll be hearing that soon and was great, great interview with him. He's a great guy. And he learned the phrase in his contract negotiations in perpetuity. Negotiating on his media company after his football career. He learned that lesson and it stuck in his head. That means it goes on forever, right? Whatever you're signing in perpetuity means you're giving rights forever in perpetuity. These things really. Okay, business leaders, are you playing defense or are you on the offense? Are you just. Excuse me. Hey, I'm trying to talk business here. As I was saying, are you here just to play or are you playing to win? If you're in it to win. Meet your next MVP NetSuite by Oracle NetSuite is your full business management system in one suite. With NetSuite, you're running your accounting, your financials, HR, E commerce, and more, all from your online dashboard. One source of truth means every department's working from the same numbers with no data delays. And with AI embedded throughout, you're automating manual tasks plus getting fast insights for your next move. Whether you're competing on your home turf or looking to Conquer International Markets, NetSuite helps you get the W. Over 40,000 businesses have already made the move to NetSuite, the number one Cloud ERP right now. Get the CFO's guide to AI and machine learning at netsuite.com stereo get this free guide at netsuite.com stereo okay, guys, welcome to my legacy. I'm Martin Luther King III and together with my wife, Andrea Waters King, and our dear friends Mark and Craig Kilburger, we explore the personal journeys that shape extraordinary lives. Each week, we'll sit down with inspiring figures like David Oyelo, Mel Robbins, Martin Sheen, Dr. Sanjay Gupta, and Billy Porter and their plus one, their ride or die as they share stories never heard before about their remarkable journey. Listen to my legacy on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. This is my legacy. What if you ask two different people the same set of questions? Even if the questions are the same, our experiences can lead us to drastically different answers. I'm Minidriver and I set out to explore this idea in my podcast Mini Questions over the years we have had some incredible guests. People like Courteney Cox, star of the infinitely beloved sitcom Friends, EGOT winner Viola Davis and former prime minister of the UK Tony Blair. And now Mini Questions is returning for another season. We've asked an entirely new set of guests asked seven questions including Jane Lynch, Delaney Rowe and Cord Jefferson. Each episode is a new person's story with new lessons, new memories and new connections to show us how we're both similar and unique. Listen to Mini questions on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts. Seven questions, limitless answers. Hey, this is Mel Reid, LPGA Tour winner and six time Ladies European Tour winner and Kyra K. Dixon, NBC Sports reporter and host. You forgot to say warm and Miss America, by the way. And we've got a new podcast, Quiet Please with Mel and Kira. We are bringing you spicy takes on sports and pop culture, some golf haps and interviews with incredible people who have figured out how to make golf their superpower or just people we like. Plus tales from the road and everything in between. By the way, golf isn't just for the dads, Brads and Chads. Yeah, it's. It's actually life's cheat code and we're not going to be quiet about it on or off the course. We're bringing on some of our friends like Michelle We, Heather McMahon, Amanda Baliotis. So if you want to keep up with us, and here is yap, tune into our new podcast, listen to Quiet Please with Mel and Kira, an iHeart women's sports production in partnership with Deep Blue Sports and Entertainment. You can find us on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts. Presented by Capital One, founding partner of iHeart Women's Sports. What's a non compete and confidentiality? It's protecting your ideas and your businesses, essentially. Non compete agreement and a confidentiality agreement. Let me talk to you about a lesson I learned in a contract I had done a deal with. Well, let me tell you a bad situation first and I'll tell you a good one. So when I was coming up in business, Bryant Group Companies, I believe it was W. I forget the name of the end of the thing. It's Brian Companies and WTC Funding Corporation. I was like 19, 20, 21 years old when I ran this business in LA Los Angeles and we were in an office building, the Westwood Gateway Complex at Santa Monica in La Cienega and my assistant, now my chief of staff, Rachel Duff, I'd ask her to go Downstairs every day pretty much, and get myself a sandwich or whatever. And I would just work through lunch. And I was so focused on working and hustling and whatever that I created my own terms for how I was going to pay that bill, I guess. And I had failed to pay the cafe bill downstairs. It wasn't much. It was 800 bucks or something. But even worse. And that guy sued me. I have not been sued by anything important. Like no, no big. No anything important. I've taken care of all my big deals, all mortgages, contracts. My credit score is like cool. It's all but this one situation, these small ones. I let these things slip. I didn't sign. I didn't have a contract with the cafe owner. They let me slide basically on having an informal situation. And they took me to court, small claims court. And it was very easy for them to get a judgment against me in that case. I didn't show up. So the judge just hit me with a default judgment. It was a default judgment because I didn't show up. So if you don't show up for court, you will get a default judgment against you. And it's very painful because it's a one sided conversation and you can't argue about it. And I ended up owing this guy. It wasn't a lot much. It was, you know, $800,000. But back then it was a lot of money for me. And the more painful ones, I had a guy, Jimmy was his name, and it was Jimmy's car detailing. I remember Jimmy. And Jimmy would wash my car. And it was a Mercedes, I think, 420s SL SEL. And I love the car. And he would wash the car once a week. And Jimmy had a contract. Jimmy didn't have a high school education, right? Jimmy didn't have good teeth, but Jimmy had good sense. And Jimmy on his bill that I or my assistant would sign every time he finished washing the car. We'd sign an invoice. It said at the bottom, 10% fee, compounded with penalties for all unpaid balances. Where this whole thing was an unpaid balance. And this dude ultimately took me to court. I thought he was a friend. He was like, no, I'm a businessman. Or as Jay Z would say, I'm not a businessman. I'm a businessman and homeboy with no teeth, no tooth assistance, who I thought was my buddy who was washing my car and returning back to the hood while I was at Westwood Gateway complex in West LA in that marble office building, trying to be important. He took me to court and won because he had contract agreement with me and I didn't pay attention. And he was right. He had me, my signature on all these invoices. And it said clear as day that I would pay a 10% fee on the unpaid balance. It was all an unpaid balance. And I'd pay penalties and interest on top of that. I had no choice but to pay him. And I was, I was honored to do it. He, he earned it. All that and I actually felt very bad about it. Lesson learned later on in. Later on meaning, like recently I signed recently, last 10 years, I signed a major contract with a couple friends to start a business and it was a general partnership and I had a majority of ownership and my two partners, investors had. They owned 40% and I own 60%. And there was different kinds of shares. I, I had essentially common shares and they had preferred shares. And it is what it sounds like. Their shares were preferred at a preferred position and preferred in rights. Right. Than my shares. My common shares were as it sounds common. And like I didn't have common sense to pay attention to this. It turned out just fine. By the way, these are great guys. But I thought, I assumed because I own 60% of the company, that that just meant I had a majority vote, a majority view, I'd run it the way I wanted, want to. And I was naive because these were the money guys and they knew what the heck they were talking about. I was a thousand there, but they were billionaires, at least 100 millionaires. And well, I wasn't a thousandaire, but you get the point. I was outmatched on the finance understanding side of this equation. These guys were geniuses in what they do. And even though I own the majority, their attorney explained to me one day when I was pushing a narrative, pushing what I wanted to do. John, you own a majority of the ownership, but they control a majority of the company through their preferred shares. I'm going to go off on a tangent here just to tell you there are things like there's poison pills you can put in a stock agreement. Like I believe Mark Zuckerberg, who I know at Facebook. Now, Meta has a poison pill that no matter how much the stock gets diluted, he controls the company. There are founders who put these poison pills in there. I don't know if that'd be the absolute case firms at Meta, but I'm pretty sure it is. These contracts where they found a company and they will structure it through the governance agreement and their rights, where they're shocked their stock has outsized weight to Other shareholders, irrespective of how much they get. Diluted. Diluted means diluted is the opposite of concentrated. Concentrated is strong and rigid and intense. And diluted is what it sounds like. You dilute a drink at a club, you know what that means, right? They gave you some cheap drinks. You dilute your interest, you have less power. So that's an aside. If you want me to go into that, put that in Comments. When you see this online, I'm happy to go into greater detail and explain what the poison pills and all that means and stands for, but I want to get to a lot of content here in a very short period of time. So back to the. The basic premise that I had basically synthetic equity at common shares and they had preferred shares with rights and privileges that were brilliantly crafted and they didn't do me no wrong. I saw it was all there for me to view. I was casual about it because I knew them. And although I probably wouldn't have changed much actually, but the attorney explained to me, because they put up the money, they had more rights and they were right. And so I could not just do as I like. We end up working it out where I did as I preferred. But I had to consult with my partners. I did not have the contractual right to do that. They had to give me the right to do that. And over time, as I proved myself, they loosened the grip on the contractual rights. And at the end of the term, at the end of the day, I was actually running it exactly the way I wanted to. But I honored my agreement with my partners and they left that deal very happy. Let me tell you about negotiations, which is not part of a contract per se, but if you leave a slight. Every good negotiation means you leave the negotiation, but everybody in it leaves slightly irritated. Okay? If you have a good negotiation, you leave the table, everybody slightly irritated, slightly annoyed, because no one got everything they wanted, but you got what you needed. Let me tell you some high profile entertainers and athletes who signed bad contracts. Some examples, there's the group tlc. Love their music. They signed an unfair deal. Or some people, some people might call an unfair deal with LaFace Records. Now, I'm saying this in particular because there's a lot of people running around talking about my Jewish brothers and sisters and how somehow they've ruined the music business. And I don't know why people are picking on Jews. There are black people. This is LaFace Records, there's Motown Records. There's a bunch of black people in music. There's a bunch of white people in music. There's a bunch of Asian people in music, a bunch of Latino. Everybody's in music. I don't know why they're picking on one group, but it's just wrong to point out that, oh, this contract is unethical. No, the contract is a legal contract. You just don't like it because you don't like the terms and how they got a better negotiation than you because they were paying attention to the dollars and you're paying attention to the music notes. And in this One example, it's LaFace. We need to knock that off. We need to stop all this haterade. And hate is hate. We just need to stop it. We need to stop blaming people because they're successful or more successful for us. Maybe we're jealous and maybe we don't understand. Don't hate somebody. Try to learn from somebody. Try to understand how they've mastered the game and you can master it too. They want to be a great singer, a great dancer, in this example. And you are a great, whatever, ball player, whatever. And you want to be a better business person. Michael Jordan. Michael Jordan. Magic Johnson used to use his celebrity status to go approach the folks on the front row of his of the basketball games at the Lakers and go to lunch with them. These were the people who bought the best seats. And he wanted to trade lunch for business knowledge. Really smart. What is Magic Johnson today? Not just an NBA great, he's a great businessman. So TLC signed a bad deal with LaFace Records. They thought it was a bad deal. I wasn't in it. I'm sure LaFace Records thought it was a great deal when they wrote it. And I'm sure they'd say, well, the people didn't pay attention. Just like everybody else would say people didn't pay attention. By the way, in a negotiation, the table is the bartering place. And one person is trying to extract as much from you as they can while paying you the least. Right? That's their job. The other person's job is to give you the least value while getting the most money. So both folks in that example are getting what are doing their job. One person's trying to extract while giving you the lease. The other person is trying to give you the least while getting the most. And that is called a negotiation. Hello. So capitalism is a gladiator sport. As I said, don't take it personal. It's just business. Don't get mad, just get smart. And so with this LaFace deal, they paid them only a fraction of Album sales. So the lesson here is always understand your royalty structure and seek legal advice before signing a contract. Don't be cheap and don't think that contracts don't matter. Contracts absolutely do matter, and I don't want you finding out the wrong way that they matter the most in these situations. The music business. In this example, Megan Thee, Stallion filed a legal battle with 1501 Entertainment over a restrictive contract. The lesson here is a new artist should get an independent legal counsel, not just a label provided lawyer. So if the lawyer they're giving you is from the label, they probably have an interest. Or as my friend President Bill Clinton would say, it's hard to get somebody to agree to the truth when the liar is paying their paycheck. Hello, I'll repeat that again. President Bill Clinton said, it's hard to get someone to agree to the truth when the lie is paying their paycheck. Or as I would say, to rationalize is to tell rational lies. So if you are getting paid by the record label to be an attorney, guess whose interest you're most interested in? It's not the artist that you're in the room with, it's the person that you're aligned with. I did a deal recently where, and I knew what was going on. I did a deal recently where I had contracts, I let my partner draw up contracts and it was sort of two against one, so to speak. And I knew that the contract would be imbalanced, as I would say. But I made sure the things that were most important to me were handled and I let them get away with the things that were less important to me because I didn't want to win the battle and lose the war. The spirit of that partnership and where we were going next was more important to me than fighting over the details that they were fighting over. That's another conversation. That's a more sophisticated situation. In order to play that game, you have to know the game you're playing. It's got to be chess. And not, you know, some people are playing chess, some people are saying, checkers, I'm playing chess. Lil Wayne, he struggled with the Cash Money Records deal for years. The lesson was always have an exit clause and dispute resolution terms in your contract. It's easy to get married, it's hard to get divorced. Scottie Pippen, the NBA signed a long term deal with the Chicago Bulls that severely undervalued him in his opinion. I sort of agree, but again, it's just business. It's not the Chicago Bulls job to pay you top Dollar pay you every dollar they can pay you. Their job is not to give you to empty their pockets, to give you everything they got. Their job is to give you as least that they can get away with getting you without having you be unhappy. So what's the lesson here? Consider how contracts evolve over time and inflation is a factor in a long term contract. And consider all that before locking in long term deal terms. You can do contracts in phases or have them have renewal clauses and have sort of check in points in a contract. So the best practice for smart, for smart contracting, get it in writing. A handshake is not a contract. Hello. Hello. Hello. People like, I don't remember that. You remember that. I don't know. I don't know. People get a get amnesia when they don't like a situation, right? And read before you sign what is the fine print. And if you don't like fine print, get somebody with glasses who's an accountant and a lawyer who love fine print. By the way, your accountant, your lawyer should not be at the club hanging out with you people. If folks, if you're, if your professionals are hanging out with you at the club, they may be the wrong people. You want boring people. You want people who don't want to go to bed at 8:00, at 10:00 at night, right? You don't want people out whose Evening starts at 1 in the morning talking about they're your attorney, they your lawyer, they're your accountant. That is just not my suggestion. You want left brain analytical people who are absolutely as obsessed with accounting and numbers and all that stuff as you're obsessed with music and notes and all that stuff if you're in the music business. So the fine print is really, really important. They can get you on the fine print. Somebody can get you on the interpretation of five words that look common sense to you. But an attorney will understand that gets, you know, that needs to be treated in a very special way. But only an attorney would know that. Hire an attorney when it's serious. Don't do a DIY contract when the stakes are high. In other words, don't do a do it yourself contract when the stakes are right. Let me go on to YouTube talking about I'm a lawyer now because I watched the YouTube video. You get clocked. So common mistakes that can cost you. Not defining clear payment terms, signing something without understanding all the terms. This is a common mistake in the music business, not having a contract at all. Verbal agreements, equal risk. Okay, how to play the game and win right let's now talk about the tax system. Tax laws favor business owners and investors over employees. It's just the way a TI is. Business owners like me and investors have lobbyists, and they spend a lot of time in Washington, D.C. trying to get terms that benefit them. So don't, don't get mad at the game. Just understand it. But also, business owners and investors take more risk than employees. So there you go. And an employee has a W2 relationship, so the chances in sort of taxes are sort of predefined in that situation. So, you know, as long as you understand it, you should be okay. It's more dynamic for a business owner entrepreneur like me. But understanding your tax strategy can help you legally and contractually more than you can truly appreciate. For instance, Warren Buffett said, famously, a secretary pays more taxes than I do. People got all upset about that. Well, it's true, because Warren Buffett is not a W2 employee, meaning he doesn't take a salary or he doesn't take a paycheck. If you don't have a paycheck every week, every month, then you don't have taxes taken out of it. His secretary was a W2 employee. Warren Buffett was compensated through capital gains when he sold stock, when he sold a business, when he liquidated a business, then he got a capital gains tax obligation. And the taxes from W2s are 30%, 35%, 40%, 50%, sometimes depending on federal, state taxes, so and so forth. But capital gains taxes is 21%, 20%, depending on where you are. Hello. So I love capital gains. And that's what happens when you take more risk and you, you sell some real estate, you sell a business, or you sell some stock. That's a capital gain, a gain on your capital. It's a different tax structure. So Warren Buffett paid a crapload of taxes. He didn't pay any income tax. He paid capital gains tax. You didn't pay traditional income tax. Most of the taxes actually paid in this country are paid by the wealthy. So anybody. No need to hate on the wealthy. Y'all not paying your taxes. They do. We, I guess we do pay the majority of taxes in this country, so feel good about that. It's just a different kind of taxes. Maybe I'll come do another if you want me to do another video on this. Sorry. Another podcast on this to go deeper. I'll be, I will be happy to. Just, just, just tell me in the comments when you see this on a video roll or on a social media clip. And I'll be happy to take note of that. Let me tell you some high profile entertainers and athletes who struggle with taxes. Wesley Snipes, an actor, served time, federal time for tax evasion. Yes. Went to prison. The movie star. What's the lesson? Always file your taxes, even if you dispute the amount. A friend of mine called me recently because he was about to have his taxes, his income tax, his income, his paycheck, taken from him because the federal government had reached in his bank with an employer and garnished it. And he was days away from having a paycheck go from $20,000 or $10,000, whatever it was, down to literally 150 bucks. He told me. I was able to make a phone call, get him connected with some folks and he was able to make payment arrangements with the irs. And they don't want you to go to prison. They don't want to take your money. They want their money. So they made a painting arrangements and it was fair exchanges, no robbery. Both people walked away slightly irritated but happy. Some entertainers, some creative people don't think that taxes are legal or whatever. Look, don't make that, don't do that, don't do that. Don't start fighting with the federal government after you've made a lot of money. The federal government's not real. Tax structure is not real. No, no, no. That's a philosophical argument. You will lose it. Right again. I'd rather owe money to my mother, God rest her soul, than the federal government. Pay your taxes, file your returns. If you wanted to fight a legal battle or a philosophical battle, separate from that, knock yourself out. But not after you owe some money, after you made some money and then you decide you don't want to pay it. That is a bad move. Welcome to my legacy. I'm Martin Luther King III and together with my wife, Andrea Waters King and our dear friends Mark and Craig Kilburger, we explore the personal journeys that shape extraordinary lives. Each week we'll sit down with inspiring figures like David Oyelowo, Mel Robbins, Martin Sheen, Dr. Sanjay Gupta and Billy Porter and their plus one, their ride or die as they share stories never heard before about their remarkable journey. Listen to my legacy on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts. This is my legacy. Hey, this is Mel Reed, LPGA tour winner and six time ladies European tour winner and Kyra K. Dixon, NBC sports reporter and host. You forgot to say all my Miss America, by the way. And we've got new podcast quad. Quiet please. With Mel and Kira, we are bringing you spicy takes on sports and pop culture, some golf haps, and interviews with incredible people who have figured out how to make golf their superpower. Or just people we like, plus tales from the road and everything in between. By the way, golf isn't just for the dads, Brads and chads. Yeah, it's actually life's cheat code and we're not going to be quiet about it on or off the course. We're bringing on some of our friends like Michelle We, Heather McMahon, Amanda Baliotis. So if you want to keep up with us and here is yap, tune into our new podcast Listen to Quiet Please with Mel and Kira, an iHeart women's sports production in partnership with Deep Blue Sports and Entertainment. You can find us on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of iHeart Women's Sports, I'm Mary Kay McBrayer, host of the podcast the Greatest True Crime Stories Ever Told. Join me every week as I tell some of the most enthralling true crime stories about women who are not just victims, but heroes or villains, or often somewhere in between. Listen to the greatest true crime stories ever told on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. What if you ask two different people the same set of questions? Even if the questions are the same, our experiences can lead us to drastically different answers. I'm Minnie Driver and I set out to explore this idea in my podcast Mini Questions. Over the years we have had some incredible guests. People like Courteney Cox, star of the infinitely beloved sitcom Friends, EGOT winner Viola Davis and former Prime Minister of the uk Tony Blair. And now Mini Questions is returning for another season. We've asked an entirely new set of guests our seven questions, including Jane Lynch, Delaney Rowe and Cord Jefferson. Each episode is a new person story with new lessons, new memories and new connections to show us how we're both similar and unique. Listen to Mini questions on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts. Seven questions limitless answers Lauryn Hill, the singer went to prison for unpaid taxes. Did you hear me? Hello? Hello? Lauryn Hill and Wesley Snipes went to prison for unpaid taxes. Lesson Never ignore IRS notices. Work out a payment plan if needed. Give them the respect of a partner of a general partner. Allen Iverson, NBA star blew through millions, was saved by a trust fund. Lesson Set aside money for taxes and long term security. Fat Joe, the Rapper face jail time for failing to pay millions in taxes. Lesson have a trusted CPA or tax attorney to keep you compliant. I have a tax pro here in Atlanta, one of the big four firms here in Atlanta, big six firms, Aprio. I use them. I think they're fantastic. And I have a, let me see. I have an accountant, I have a bookkeeper, I have a controller. I have a chief financial officer. I have an auditor. I have a chief accountant. Outside accountant. Then I have an auditor. All have different functions. I make sure that I take. I make sure to make that money straight. I was born at night, not last night. You know, catch me slipping if I can at all afford it avoided. And when you pay your taxes, by the way, you pay attention to public services. I paid $800,000 in state taxes one year in Georgia. Yes, the federal tax bill was much, much larger. And I drove down the street and ran over a pothole. Do you know I would like went back home and wrote a letter to the mayor and the city council people and the county officials and the state transportation officials and the governor's office. Hey, you need to fix these potholes, like immediately. Like paid $800,000 in state taxes. This is, I'm literally, that's literally my business. Right? Did you know they paid it? You know, they filled that pothole and quick. I'm a taxpayer. And conversely, nobody washes rental cars. Hello. If you drive a rental car around, you don't own it. What do you do? You drive it until the wheels fall off. The dirty as all get up two weeks, take it back, it's filthy. You can be a saint and you don't wash the car. It's a very rare person that washes a rental car because you don't own it. There is something that happens with you when you own something. When you own a house, it's amazing that when you rent the house, the lawn is up to your eyeballs. When you own the house, well, the lawn gets cut. Somehow. Dmx, the rapper, he owed millions to the irs. Lesson taxes are not optional. If you earn money, plan for what you owe. Understanding the basics income tax versus capital gains tax. So you know, as I've said, investments are taxed differently and you're taking more risk. It's a more complicated explanation, but essentially, capital gains is a better deal. If you ever get to a point where. But again, you're taking risk and lose everything. There's no guarantee with an investment that's going to pay off and you're not getting a regular paycheck so the American capitalist system rewards you a little bit by charging you a reduced tax amount, but it's still a lot of money if you're making, if you're talking about over a million dollars, talking about 10, 20, $50 million, 20% is a lot of money, right? Write offs and deductions. The government wants businesses to reinvest. So use that to your advantage. If you have a business expense, a proper legitimate business expense, you can write. Check with your tax pro and what those look like. Talk to my Hope Financial coaches. They'll walk you through that. I'm going to just take a moment here to talk about earned income tax credit. If you have a tax pro or if you don't, I want you to look into the earned income tax credit. I've said this a million times. I'll say it again now. You make less than $65,000 a year. The government owes you a check for working. It's not a handout, it's a bonus for working. You get a bonus on Wall street from your employer at the end of the after a good year, you get a bonus from the government. This is bipartisan legislation. It's been around since the 70s. I believe it's the earned income tax credit. It's EITC. $20 billion goes back to the federal government every year because we don't ask for the money that we're owed. Hooked you up with some free games. Jay Z would say, I'm giving you a million dollars worth of game for $9.99. This is no. 99 because you're not even paying for the subscription to this podcast. So if you're making less than $65,000 a year and you earn money legitimately, the government owes you a check. Now I'm going to do a sweet spot here. You make $38,000 a year. You have three children. The government owes you approximately 6,500, $7,500, give or take. And if you've never filed for EITC, if you have no idea what I'm talking about, congratulations, it's retroactive for three years. So if you make $38,000 a year and you get a check for three times $7,000, just do an average. That's about, give or take, $20,000. That's more money than you'd ever see at one time in your life. Pay off your car note, pay down your credit cards and pay them off. Put a down payment for your own house. Start a business, start an investment account. There's no restrictions on the money. It's your money. And it's not a tax break. It's a check. Like you get it wired to you when you modify or file your tax returns. And this is transformational in your life. So check with my people at Opera. Show up about the earned income tax credit. Back to understanding the basics. LLCs, S Corps and 1099 income. And by the way, I talk about corporate entities on my season one podcast for money. For money and wealth. So go back and watch or listen to that podcast. Structuring yourself properly to minimize taxes is tied to which kind of entity you select. So limited liability corporations, an S Corp or C corp, all these different corporations. And 1099 income, which is contract income versus W2 income, which is salaried former employee income. I'm not going too fast. I'm just covering a lot of time and I've always hit it at 999. I would try to rap like Jay Z in one in one podcast. Trying to get a lot in in an hour. I said it was gonna be 45 minutes, but this is gonna go over a little bit so I can cover everything. Keep your records. This is top, top tax strategies for individuals and entrepreneurs. Keep receipts and track expenses. Right? This is why bookkeeping really matters, right? And understanding prop and understanding proper terms. My people at Operational can help you with this. I remember it was a former drug dealer who came to Operation Hope starting a restaurant and he'd already bought the restaurant equipment, at least the building, all this stuff. And he came to us for some business coaching and I ran into him and I said, well, can you show me your balance sheet? And he said, what's that? He was a smart guy, but no one ever taught him the basics about a balance sheet. An income statement, a net worth statement, a budget. Everybody needs a budget. I have a budget. Everybody needs a budget. That's a different podcast for another day. I'll go through budgets for you, by the way. Tell me the topics that you want me to break down and I'll be happy to break those down too. Keep receipts and track expenses. Use business deductions wisely. What the I use basically get only what the IRS allows. If you overreach, if you play games, the IRS is going to slap you upside the head and it won't be nice and they're going to hit you with penalties. So just use proper business deductions. By the way, if you have an office in your house, as I do, you can deduct expenses tied to that office. Hello. But talk to your tax pro about that. You can't deduct the whole house, just the part that you use for business plan for tax payments. Avoid the April surprise by setting aside money quarterly or at least have a plan for how you're going to pay these taxes or work out a payment arrangement, but just don't ignore it. Common tax pitfalls and how to avoid them not filing taxes on time is just, again, that was my mistake. And penalties add up fast. I mean, the IRS charges an incredible excruciating amount of interest because they don't want you owing them money. They want you to get out of debt from them as soon as you can, as fast as you can. They don't care who you are. One of my famous friends, I won't mention his name, but he called me and he had this problem with the irs and he was a household name. And I called for him and got him connected with people and it took months to get that situated. There was this lady who made, I don't know, $62,000 a year who was completely in control of this guy's life. And she didn't care for his confidence and she made it extraordinarily painful for him, but she was in charge of everything. We finally got her moved out of the after months and months and months, but this guy couldn't sleep for a while because she basically could have, she could have ruined his whole life. And so, you know, just be, just do it right the first time. So file on time. Mixing personal and business expenses. A. No, no. Get separate accounts. Separate accounts for business, separate accounts for personal. In my opinion, ignoring tax planning. Another no, no. The wealthy use tax strategies before tax season, not after. Including me. I'm working on my tax strategy all year round. Here's some takeaways. Contracts are about clarity and protection. Never enter a business or financial agreement without a contract. Someone in my life, a loved one, wanted to borrow some money recently for a business. People know, my family know not to come. John Bryan Sideways asking for money. I cover this with the, with, with Cam again, Cam Newton. When I was with him on my podcast with him, we had a lot of fun together, talking about family coming to us, asking us crazy stuff. People don't come to me asking crazy stuff anymore because they know I'm going to respond. So they, they're prepared. So somebody had a business idea. They knew the revenue was coming in, so they knew they could say, hey, this money, this checks coming in, it's just delayed. Can I get, can you basically factor this? Can you as they call it, factory. Can you bridge this for me? So I gave them a small loan and they were going to pay me back in 30 days. They signed a contract. It was a simple contract, one pager, but they signed it. And I know these people very well, I love them, but this is business. And they needed a 30 day extension, which I gave them. But I got my money. Hello. You know, people get amnesia, particularly when you know them. They're really nice when they want to borrow the money, when you want it back. What you sweating me about that for? Because it's my money and you want it. You weren't paid. You didn't have an attitude when you borrowed the money from me, right, People. Funny, okay. Taxes are part of the game, people. Learn how to play it legally and to maximize your wealth. Be proactive, not reactive. By the way, I had one investment that wasn't paying off for me the way I thought. And I was sort of upset about that until those losses from that investment helped to defer a tax obligation, turn a tax obligation to a tax refund. So even though I lost money on the business, on revenue, there's two ways to make money. Make more or spend less. And again, once you gain some wealth, gain some traction, you're going to have a tax obligation every year. And legitimate business expenses and legitimate tax write offs all qualify. You have a commercial real estate building, this doesn't work for your primary residence, but commercial real estate as an example, or income producing real estate, you can have depreciation, which is a tax write off, a tax benefit. Anyway, I want you to learn all this stuff, but step by step. Be proactive, not reactive. A smart contract and tax strategies can save you money, stress and legal trouble and jail time. Wealth is not just about making money, it's about keeping it and protecting it. Take a step today. Review a contract you've got. Talk to a tax professional that you know, find a pro, find, build a team, right? And set up a financial system for your future. Like get Quicken Quicken or QuickBooks or get Excel spreadsheet or Money, I think they call, I think Apple calls it iOS calls. There's money or numbers, I think they call it numbers, which is the. And Microsoft calls in Excel. Use a spreadsheet or use a financial app. There's no excuse in this technology world not to get it right. And I want you to follow me on money and wealth and tell your friends to do the same and get the book Financial Literacy for all and go to Operation Hope and tell them I sent you, they'll give you, because I sent you, they'll give you a $1,000 financial coaching scholarship at Operation Hope, good for a year to help you get through your credit score and get through your initial budgeting and review where you are on all your books and your records and talk to them about taxes and talk to them about your contracting. And then from there you might graduate to our business courses and a more detailed financial coaching opportunity through operational. But we're going to give you this thousand dollar scholarship on me for coaching and counseling. That's the value of it, because you listen to money and wealth and you're part of the civil rights movement. From civil rights to civil rights, from the streets to cutting deals in the suites, from protesting in the suites to getting a seat in the business suite, this is the new movement. This is real world transformational change. Because you get in game. You are gaining your financial literacy, which I believe is a civil rights issue of this generation. Actually, I think it's a civil rights issue of this generation. I think that AI literacy is a civil rights issue of this generation. And I want you to follow all of Operation Hope's work, follow all of John Hope Bryant, my work on all accounts. Get the book Financial Literacy for all. Tell your friends to listen to this podcast, have a meeting with your friends, meeting with your family on contract. By the way, I hate to break this to you, but marriage is a form of a contract. You don't think it's a contract? Try to get divorced and see what happens. Right? And California is a community property state, which is different from Georgia. That's a fairness state. And you know, you got to know all this stuff because it affects you. Like, seriously, I was talking to Cam Newton and he was like, do you realize that when you're working for the NFL, you're an employee. You're a W2 employee. So you can't be signing, though, talking about, I want to just pay me and pay my LLC and I'll pay my own taxes. You are an employee. They're giving you health benefits and they're taking the entrepreneurial risk and you pay taxes per game, per city, per state. If you're in the NFL now get that one. All right, this is dropping the mic with John Hope Bryant. I hope you love the light. I hope you saw the light. I hope that you get some light and don't think light and think lightly of this and end up having to stare down the desk of an IRS agent who is not so friendly. I want you or a legal contractor or court because you didn't pay attention to a contract you sign, or arguing with somebody over who got you good because they paid attention to a contract and you didn't. And again, don't be emotional about this. This is just business. Capitalism is a gladiator sport and you can master it. You've been doing so much with so little for so long, you can almost do anything with nothing. God made you to succeed. He made you great. Now go find your greatness. This is John O'Brien. This has been Money and Wealth. Foreign wealth with John O'Brien is a production of the Black Effect Podcast Network. For more podcasts from the Black Effect Podcast network, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows. In a world of economic uncertainty and workplace transformation, learn to lead by example from visionary C Suite executives like Shannon Schuyler of PwC and Will Pearson of iHeartMedia. The good teacher explains the Great Teacher inspires. Don't always leave your team to do the work. That's been the most important part of how to lead by example. Listen to Leading by Example executives making an impact on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Mark Seale. And I'm Nathan King. This is Leave the Gun, Take the Cannoli. The five families did not want us to shoot that picture. This podcast is based on my co host Mark Seals best selling book of the same title. Leave the Gun, Take the Cannoli features new and archival interviews with Francis Ford Coppola, Robert Evans, James Caan, Talia Shire and many others. Yes, that was a real horse's head. Listen and subscribe to Leave the Gun, Take the Cannoli on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. The OGs of uncensored motherhood are back and badder than ever. I'm Erica. And I'm Mila and we're the host of the Good Moms Bad Choices Podcast brought to you by the Black Effect Podcast Network every Wednesday. Yeah, we're moms, but not your mommy. Historically, men talk too much and women have quietly listened. And all that stops here. If you like witty women, then this is your try. Listen to the Good Moms Bad Choices Podcast every Wednesday on the Black Effect podcast network, the iHeartRadio app, Apple podcast, or wherever you go to find your podcast. The more you listen to your kids, the closer you'll be. So we asked kids, what do you want your parents to hear? I feel sometimes that I'm not listened to. I would just want you to listen to me more often and evaluate situations with me and lead me towards success. Listening is a form of love. Find resources to help you support your kids and their emotional well being@sounditouttogether.org that's sounditouttogether.org brought to you by the Ad Council and pivotal.