Making money in cattle!

[Warren Allison]

Not even close to the same.😄

It is exactly the same. Cows, social media sites, widgets...you do not risk your money speculating on widgets. It is like gambling. anyone who is not a fool, takes a certain amount tot he casino. Say you want to limit your spending for the weekend to $1000. So, you get $100k worth of chips to bet with. Black jack, roulette, poker, what ever. Put then in your left pocket and pull them out to place a bet. While you play, anything you win....those chips go in your right pocket and do NOT come back out. Ever. When that $1k is gone, you walk away...don't care if you have $50k in winnings, you NEVER pull it out and gamble with it. The most you can lose is $1k.

Same thing. You put up $1k, $10k, whatever amount, to start Widgets, INC. an S -corp. Inome from S corps [asses through to the stock holders. My S corps all have 1 stock holder that owns 100% of the shares. Whatever profit the S corp makes each year, transfers to Warren Allison. If that Corp needs money...for expansion, capital ..whatever, you do NOT pull your money out and put it back in the S corp. You borrow what you need. and never put the money you have made at risk.

 

[GoWyo]

Warren - I think the same applies to a person's home. I have known folks who mortgaged their home in the finance package to buy income producing property (usually ag land). Then some upset happened and they got foreclosed on and lost not only the property that was supposed to produce the income, but their home as well. My theory is keep the residence property as a surveyed lot and on a separate note (residential loans usually have a way more favorable interest rate as well) and never pledge it as collateral on the ranch or farm or operating line.

 

[Warren Allison]

. Warren - I think the same applies to a person's home. I have known folks who mortgaged their home in the finance package to buy income producing property (usually ag land). Then some upset happened and they got foreclosed on and lost not only the property that was supposed to produce the income, but their home as well. My theory is keep the residence property as a surveyed lot and on a separate note (residential loans usually have a way more favorable interest rate as well) and never pledge it as collateral on the ranch or farm or operating line.

True, though I have used HELOCs in the early 2000's when I was in the high-end LQ trailers business. I would use a HELOC when I had a trailer ready to ship to me, and pay it back once I got the trailer here and the buyer paid me for it. Back then the rate was about 3%.

 

[libertygarden]

@Warren Allison regarding the S-Corp, it requieres a board of directors, how do you meet that requirement? And why not do an LLC instead? It seems less complex and you still have the benefit of not risking your money.

Thanks.

 

[wbvs58]

I owe so much money people gotta be nice to me….. 😂

Paid for this fall with a few hundred cows left here

So true Dave, I don't have an account at the local farm store, I pay up front with my credit card as I do with anything I buy and pay my monthly card bill before it accrues any interest. The owner of the store can't even remember my name and I am sure people with a monthly account get a better deal than me. I see people come in to the store who do have an account and staff come running to them from all directions calling them by their first name. The owner never forgets their name and gushes over them, if he sees me he looks the other direction as he can't remember my name, if our eyes do meet he calls me "mate", I'm not his mate.

Ken

 

[PBAngusOkie]

It is exactly the same. Cows, social media sites, widgets...you do not risk your money speculating on widgets. It is like gambling. anyone who is not a fool, takes a certain amount tot he casino. Say you want to limit your spending for the weekend to $1000. So, you get $100k worth of chips to bet with. Black jack, roulette, poker, what ever. Put then in your left pocket and pull them out to place a bet. While you play, anything you win....those chips go in your right pocket and do NOT come back out. Ever. When that $1k is gone, you walk away...don't care if you have $50k in winnings, you NEVER pull it out and gamble with it. The most you can lose is $1k.

Same thing. You put up $1k, $10k, whatever amount, to start Widgets, INC. an S -corp. Inome from S corps [asses through to the stock holders. My S corps all have 1 stock holder that owns 100% of the shares. Whatever profit the S corp makes each year, transfers to Warren Allison. If that Corp needs money...for expansion, capital ..whatever, you do NOT pull your money out and put it back in the S corp. You borrow what you need. and never put the money you have made at risk.

Why you get $100k worth of chips to bet with if you are never touch

 

[PBAngusOkie]

Why would you get $100k worth of chips to bet with if you are never going to touch $99k? Why not just walk in with $1000?

 

[GoWyo]

@Warren Allison regarding the S-Corp, it requieres a board of directors, how do you meet that requirement? And why not do an LLC instead? It seems less complex and you still have the benefit of not risking your money.

Thanks.

Some states (probably most) you can form a closely held corporation with a single shareholder who is president, secretary, treasurer and designated director. The subchapter S status is a federal tax designation. Wyoming allows single member LLCs. I don't think that a single member LLC is less complex than a single shareholder closely held S corporation. I have different businesses in each form. They both provide the corporate veil of protection against liability and pass through taxation for income tax purposes.

 

[Warren Allison]

@Warren Allison regarding the S-Corp, it requieres a board of directors, how do you meet that requirement? And why not do an LLC instead? It seems less complex and you still have the benefit of not risking your money.

Thanks.

If there is one stock holder, then the board of directors is one person. Most of mine were set up in the 90's, before LLC became a thing. Another S or C corp can be a stock holder in an S corp, where as LLC owners have to be a legal US citizen. If I needed to create another in the future, I would probably do an LLC , depending on what it was for, what the income source was, whether or not assets were gonna be real and/or personal property...lots of factors. A big factor in the past, and no longer a factor since I am on Medicare now, was health insurance. One of my S-corps provided employee maj medical , dental and gtl for its employees ( me). It also had a medical reimbursement plan for all employees ( me) that pays them back for all out-of-pocket costs like co-pays, deductibles and co-insurance. I had to pay myself a salary....30 hours a week at minimum wage. WHen I turned 65, I dropped medical benefits for employees, and retired from that company. I didn't want that salary to interfere with my SS and Medicare benefits, etc. So yes, now I would be just as well off if it were an LLC.
Instead, Jan 1st I "sold" 100% of the stock in that particular S corp to my fiance, gf, whatever. She will be 60 next month. This one carries a huge loss on the books, and I never let it make any real money, so she will get the loss for 2023, and it will off-set the taxes she has to pay from her job.

 

[Warren Allison]

Why would you get $100k worth of chips to bet with if you are never going to touch $99k? Why not just walk in with $1000?

Mis type. Should have been $1000 or $1k worth of chips.

 

[Warren Allison]

Some states (probably most) you can form a closely held corporation with a single shareholder who is president, secretary, treasurer and designated director. The subchapter S status is a federal tax designation. Wyoming allows single member LLCs. I don't think that a single member LLC is less complex than a single shareholder closely held S corporation. I have different businesses in each form. They both provide the corporate veil of protection against liability and pass through taxation for income tax purposes.

Yes. an LLC is a method of operating a business, where as an S-corp is a tax strategy. An LLC can file for S Corp status! When I first starting seeing LLCs crop up was in the 0-'s. Big buildin boom going on here back then, and every one and his brother became a contractor. If a builder was developing a sub-division, he would form an LLC for each house, and kill it after the house sold. Lots of subs and/or suppliers got screwed if they were still owed money.

 

[Brute 23]

Some states (probably most) you can form a closely held corporation with a single shareholder who is president, secretary, treasurer and designated director. The subchapter S status is a federal tax designation. Wyoming allows single member LLCs. I don't think that a single member LLC is less complex than a single shareholder closely held S corporation. I have different businesses in each form. They both provide the corporate veil of protection against liability and pass through taxation for income tax purposes.

That is where I belive Mr Warren needs to discuss his liabilities with a professional. Although he may be protected as a share holder, it is my understanding, he is not as a one man band operating as the pres, sec, tres, ect.

If you think you can drain a company, file bankruptcy, and completely walk away... you are going to be sadly disappointed... in my experience.

 

[Warren Allison]

That is where I belive Mr Warren needs to discuss his liabilities with a professional. Although he may be protected as a share holder, it is my understanding, he is not as a one man band operating as the pres, sec, tres, ect.

If you think you can drain a company, file bankruptcy, and completely walk away... you are going to be sadly disappointed... in my experience.

As a ChFC and CFP, I have set up 100's of these for clients. Yes, an S-corp can have 1 stock holder, thus a 1 person BOD and board chair. You just have to have a Pres and a Sec for an S corp, and they can be the same person as well. And no, if a company goes belly up, the stock holders' personal assets can not be taken. by creditors.

 

[GoWyo]

As a ChFC and CFP, I have set up 100's of these for clients. Yes, an S-corp can have 1 stock holder, thus a 1 person BOD and board chair. You just have to have a Pres and a Sec for an S corp, and they can be the same person as well. And no, if a company goes belly up, the stock holders' personal assets can not be taken. by creditors.

Unless a court holds that your corp or LLC is your alter ego and then your corporate veil can be pierced. It is difficult to pierce the corporate veil though if the business follows normal minimal corporate formalities.

 

[Warren Allison]

Unless a court holds that your corp or LLC is your alter ego and then your corporate veil can be pierced. It is difficult to pierce the corporate veil though if the business follows normal minimal corporate formalities.

True. The ways I have seen this happen is usually co-mingling of funds. Using the corp checks or cards for personal use. like buying a vehicle and titling it to you instead of the corp, cashing checks made out to the corporation, Like you said, if one follows the guidelines and uses GAAP in their book=keeping, you will be ok.

 

[Lucky]

Another thing to remember is that the Government can't tax debt or borrowed money.

 

[Travlr]

Another thing to remember is that the Government can't tax debt or borrowed money.

The government doesn't tax "owned" money either.

 

[Otha]

The government doesn't tax "owned" money either.

Wouldn't you have paid tax on that money in the year it was earned? You also "pay" inflation on your money if it's sitting in the bank.
I certainly think there's a time and place for both your money and OPM. The more risk the more i'd want to be using OPM.

 

[Brute 23]

People should have to pass a reading comprehension test to join this forum.

 

[Brute 23]

Wouldn't you have paid tax on that money in the year it was earned? You also "pay" inflation on your money if it's sitting in the bank.
I certainly think there's a time and place for both your money and OPM. The more risk the more i'd want to be using OPM.

This makes no sense at all.