Zero To A Hundred – Episode 7: Protecting Your Business And Legacy With Jason Gills!

Accelerators! 🚀Want to learn how to protect your business and build a lasting legacy? In this episode of “Zero to a Hundred,” finance expert Jason Gills dives into crucial strategies like buy-sell agreements and using life insurance as a powerful tool for business planning. Whether you’re an entrepreneur looking to safeguard your success or build long-term wealth, this episode is packed with actionable insights.💡

🔹What’s on the Menu:

• Key insights on buy-sell agreements for business stability. 🔑 
• Leveraging life insurance in your business strategy. 🛡️
• How to use your investment portfoliZTHWio for capital and growth. 💼 

🔥Why Tune In?

• Jason provides expert advice on creating a rock-solid foundation for your business and family. Don’t miss these essential tips for long-term success.

💬 Gem from Jason: “Don’t mistake the beginning for the end—stay focused until your legacy is bulletproof.”

📞Get in Touch with Jason: 

📧 jkgills@gmail.com | Instagram: @Jason__Gills

Don’t miss out—hit that subscribe button and let’s elevate your business from zero to a hundred! 💥

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Protecting Your Business And Legacy With Jason Gills!

In this episode, I’d like to welcome Jason Gills. He’s a twenty-year finance expert. He has worked with business owners like you, helping them build very robust portfolios. As a FINRA-licensed advisor, he has over 150 agents that are working at his firm. We’re going to cover some key topics that will help accelerate your business, such as buy-sell agreements, key man policies and how they can save your butt at the end of the day, using life insurance as a tool to go out and get debt, as well as how to leverage your personal investment portfolio to get more capital. Ladies and gentlemen, let’s accelerate together.

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Jason, we’re very excited to have you on.

Thank you. I am very glad to be here with you. It’s exciting. I’m honored to be here. I’m looking forward to bringing some value to your audience.

Forming Partnerships

I know that our audience is going to get a ton of value out of this because you are going to give some very important insights on structuring business and how those structures impact profitability and overall operations over the long term of building something successful. One of the things that I want to dive into first is talking about partnerships.

What I’d love for you to share with the audience is what are some of the key factors you should be looking at when forming a partnership, whether it’s early on in a business or you’re at a point in your business where it’s growing and you and your partner sit down and go, “We have a great relationship and things are working, but we need to solidify what our partnership is in writing.”

First of all, it’s a lot easier if this is done on the front end. That can save you some headaches down the road. I believe very much in the concept of alignment over assignment. One of the big things is being in partnership with the right people and picking the right people based on core values alignment, character things, visions, and how you want to do things. If a lot of that is discussed and in place, we can figure out the whats, hows, and stuff. That’s the first place I would start.

Buy And Sell Agreements

Talk to me about a topic you and I had addressed in the past. That is buy and sell agreements, which are important for partners to hash out at the beginning of their partnership process.

A buy-sell agreement is a legal contract, talking about how the business can be set up and valued, and in particular, if you have multiple partners and God forbid one were to pass away, become disabled, or decide they’re out. On the front end, it is having that done legally in place or a contract in place to where we know, “If I want to exit or, more importantly, God forbid, something happens to me, what is that going to look like? What are we agreeing upfront and less agreeing on some sort of mechanism for a valuation that’s fair to all parties involved?”

If you look at the valuing of the business, which is key, wherever you are in terms of a partnership and wherever you are in terms of operating a business, what are some of the techniques that you would employ to go out and value a business if you’re working with a business owner?

Different industries are going to be different. I would advise people to seek legal counsel. I’m not a business attorney, but people should seek counsel. They should do their due diligence in their industry. A lot of times, it’s a multiple of revenue, net profits, EBITDA, or whatever it is. The biggest thing is coming up with a clear understanding and agreement on how we’re going to value this business. That way, if something happens like one’s looking to exit or one passes away, there’s a clear, defined amount that can save you a lot of headaches and lawsuits down the road. God forbid if a partner passes away, their heirs, spouse, or children start getting involved. You don’t want there to be a huge discrepancy over what the business is worth at that time.

Can you share a story with the audience where you’ve seen things go catastrophically wrong for partners who didn’t have the right processes in place?

I’ve seen multiple ways. One is you have a partner in an agreement that maybe they’re not pulling their weight on the financial side. Maybe there are financial obligations and one’s not able to live up to that. In that situation, how does that change things? This person’s been footing 85% of the bill or coming up with the capital, which initially, was supposed to be 50/50 but challenges arose down the road. When there are profits of the business, how is that going to be dispersed? Initially, it was supposed to be 50/50 but one starts putting a lot more in. I’ve seen that run into headaches.

Another big example I saw is one I think particularly about in the construction world specifically. One partner was more on the admin side. The other one would go out. The company exploded and blew up. There are multimillion-dollar contracts and stuff coming in. Eventually, it came to where that one partner was doing something that they could have hired an accountant or somebody like that to do. If you could have some foresight on the front end to think about those kinds of things, that can save you a lot of headaches down the road.

I’m going to have to agree with you. It was something I’ve learned in business that is very important, especially when you are forming a partnership. It is that no partnership is ever created equal. What does that mean? That means you need to be open and honest with the individual that you’re getting in bed to with what you think and have the capability to bring to the table in the current market and over the long-term of that relationship and partnership. Also, that gives you the ability to negotiate on things like ownership interest or profit distributions based on what someone is bringing to the table.

The individual who’s typically bringing the most money has more of the pie because you need the money to operate the business. Things can also change over a period of time. You can be creative where the split could be 70/30 in favor of the individual who brings the investment capital. Over the long-term, as the other individual who has 30% and who’s the boots on the ground generates more wealth and more money, they can then replace that individual’s capital and gain more interest in the company.

You can work through things where it doesn’t have to be black and white and set in stone for the life of the contract. Be creative with your partner, but be honest going in. That’s where you get the rifts in the relationships. It’s when at the end of the day, somebody feels like they’re not paid enough or the other person’s being paid too much, etc. That can cause a business to crumble. I agree with you. It’s something you’ve got to deal with on the front end.

It is being fluid with it, coming back periodically, renegotiating, and revisiting. If it’s okay, there is one more thing worth noting. I’ve seen this a couple of times happen. One situation was two partners and one passed. The partner who passed had five kids. Those five kids collectively have 50% undivided interest. They had a lot of different ideas of how things should be done. A couple of them were, “I want to sell.” That ran into a lot of problems for years.

Also, one more situation was very similar. Somebody passed, and the spouse was the half-owner at that time. The problem was the spouse had never worked in the business. They didn’t understand it and didn’t bring any value. They were thinking, “I’m entitled to 50% of all the profits here,” but they’re not bringing in any value and weight there. A structure in the business to a buy-sell agreement earlier and having that in place up front is critical. 

Insurance

As you peel back the layers of the onion, it’s interesting to listen to the story’s compound and all of the things that could happen. Call it Murphy’s Law or whatever you want to call it. Things do happen. You have to prepare yourself for it. Can you give a little bit of insight on how to put insurance in place around a business and a partnership to protect the partners?

To make it simple, let’s say hypothetically, you and I own a business together. We’re 50/50 partners. Let’s say we value the business at $1 million, to keep it simple. A buy-sell agreement may say, “It’s worth $500,000 each.” If I pass away, you can acquire my half for $500,000. What I’ve seen businesses do is they will take out a life insurance policy, particularly a term life insurance policy. The business is probably going to own those policies, pay for them, and put them as a business expense.

What happens is let’s say I pass away. To avoid that situation we were talking about earlier where you’re in business with my spouse and kids, we have agreed on the front end that if I pass away, that life insurance is going to go, in this situation, to my spouse and you would obtain my portion of the company. You have 100% ownership. The life insurance portion bought out my interest from my spouse in that situation.

Let me be super clear. You can integrate into your structure of business insurance like term life insurance. If one of the partners passes away, whatever the value of that policy is can pay to buy out the other partner’s interest and go directly towards their family.

100%. 

If it’s a life insurance policy, that life insurance policy is not taxed. Correct me if I’m wrong.

Correct. For life insurance, in most situations, it’s not. When a beneficiary is listed and they get that money, it is not. That’s why it’s always important to list a beneficiary. For example, if you leave it to the estate, the estate has to go through probate. I’m not a tax attorney, accountant, or anything. I’m more of a financial guy.

Also, in that situation, I would advise them to seek legal counsel or their CPA in the business because it’s not taxable if that partner or the business got the money. Let’s say that was tax-free to them, but then when they turned around and paid that family or paid that spouse, that could be taxable from the sale of the business. I would think most likely would be in that situation. That gets a little bit more convoluted if that spouse wasn’t listed as the beneficiary on the front end.

If you set up that term life insurance policy, the spouse is listed as the beneficiary. It goes to the spouse upon the passing. That 50% interest of the partnership goes to the other partner, so they own 100%. The spouse who received that $1 million in term life insurance policy is in a way better position, and correct me if I’m wrong, than if they were to sell the business or the other partner had to buy them out because then they’re going to have to pay taxes on that as income. Correct?

Yeah. For partner A and partner B, their ownership is $1 million each, let’s say. Partner A’s ownership may be worth $1 million, but that wouldn’t mean that my partner has $1 million cash to buy the widow out, if that makes sense.

That makes sense.

That’s important to understand with life insurance, especially term. You can buy a term policy for pennies on the dollar compared to what it pays out. It’s a lot easier for you to come up with a small monthly premium that the business is paying for versus trying to come up with $1 million in that scenario to buy that spouse out.

What’s interesting since we’re down this deep, dark hole of despair in terms of insurance and the importance of insurance and business planning is there are other things that you also have to look at when you’re planning for business beyond someone potentially passing away, a partner, for instance. There’s disability insurance. There’s keyman insurance. Can you talk about those two aspects of structuring that into your business how to do it and how it would benefit you if something were to happen? 

That’s a good one. It’s a very good transition. Typically, if you think about a key person, it could be an owner, an executive, or a valuable salesperson. It is somebody who is an integral part of the business. They bring a lot of value to the business. If you think about that key person, God forbid something happened in their absence, what would the monetary impact of that be to that business? That’s where a key person’s life insurance policy could come into play.

What are your thoughts on disability insurance? Someone becomes incapacitated and they can’t perform the business for a period of time or a long period of time. What are your thoughts on also implementing disability insurance?

I’m not an expert in that field. I’m not as versed in that, to be 100% transparent, but I see the value. I like the idea of it. Maybe you don’t pass away, but you become disabled. It’s a similar concept to having a key person life insurance policy. Having some disability on those key people, I could see that being a very valuable tool because there is the possibility that maybe that key person doesn’t pass away in the event of a life insurance policy to be paid out, but if they become disabled, it is having something in place to help replace the revenue or the value they bring. We could expound on that if you’d like. 

I’ll give an example. Back when I brokered for many years, I had a large disability insurance policy because if I couldn’t walk around, I couldn’t do my job. That would be a total loss of income for me or nearly a total loss of income for me. Let’s take it if somebody is a contractor or subcontractor and they fall off of a ladder. Their business is completely impacted. They can’t run and operate the business. They’re not able to oversee things because they’re bedridden or they have a back injury and they can’t do the same level of work.

That disability insurance is going to cover your lifestyle, which is one of the biggest things. People are more likely to get injured on the job than there to be a death on the job. We’re not trying to be dark here. We’re having a real conversation about if you are a business owner, the things that you should be able to do.

If you are a chef and you’re making food every day, and all of a sudden, you get in a motorcycle accident and you can’t use your hands. It’s like a surgeon. That’s your art form. You can’t do your business. You can’t sustain anymore. You won’t have a livelihood. Disability insurance is another thing that is important.

The deeper I’ve gotten into business and operating my business at a higher level because it’s a higher level business, I’ve realized that these key tools protect you. They’re worth the money, even though sometimes it’s stroking the check like, “I don’t want to do this,” if anything ever happens. That’s one of the key things. You always need to budget for it. Once you have that insurance in place, how can you best use that insurance to benefit you in other ways? How do you use it as a tool, for instance, to get credit? 

Other Benefits Of Insurance

That is a great point to use that. If you don’t mind, before we move on, it’s worth noting that when you’re looking at a keyman policy, maybe you have a salesperson or something responsible for 50% of the business’s revenue. Maybe you have somebody that has some super duper special talent, body of knowledge, or skills that without that knowledge, without those skills, or without that salesperson and their network and them generating that, that could be devastating to the company, whether it’s the life insurance or the disability.

I see people a lot of times buy a term life policy on those key people. What that allows you to do is if something happens to that key person, it can buy the business time so they don’t go under. It buys you time to find the right people, train the right people, and develop the right skillsets, whether it’s a salesperson and getting them in and creating some new accounts. It could save your business. Term life insurance is an extremely low-cost efficient way to buy life insurance and protect the key people in your business. It could save the business from ruin if something were to tragically happen.

You asked a question about Fusion Life Insurance. I have a client who does real estate. He does multifamily, flips, and different stuff. He was trying to get a decent loan from his local credit union, and they allowed him. It’s a collateral assignment. I’ll talk about the difference in collateral assignment versus naming the lenders the beneficiary and why that’s significant.

What a collateral assignment allows you to do is go to that lender and say, “I have life insurance. God forbid something happens to me, you know the balance of this loan is going to be paid off.” I have seen lenders that will not loan without having that life insurance in place. If they don’t have enough other liquid assets to put up as collateral, they can use the proceeds of life insurance in that situation.

That’s a good point because if you can structure using that life insurance policy as collateral and you don’t have to necessarily have cash on hand, the cash on hand that you would typically have, you can invest in a high-quality policy that you can use to collateralize your lending in the future. It then becomes a win-win. You’ve got this life insurance policy in place that when it’s paid out, it’s tax-free. You’ve got an asset that you can use to borrow against or collateralize getting that loan and building your business. I’ve never thought of it that way. That’s a creative way of using life insurance as a tool.

To differentiate why I would recommend the collateral assignment, what that is doing is let’s say you borrow $250,000 from the lender and you have a $500,000 or $1 million policy and you’re taking out a $250,000 loan. You don’t want to list them as even a 25% beneficiary because let’s say you get the bulk of that loan paid off. They’re still listed as the beneficiary. The collateral assignment is saying, “Whatever the outstanding balance of the loan is when a death occurred, they would get that.” The rest would go to the other beneficiary. Typically, that’s the spouse, the children, or whoever they have listed. 

There’s something important for entrepreneurs and business owners to understand. Because of the role that you play in your business, you are not replaceable. If you get to the level of Jeff Bezos, you could potentially be replaceable because there are other people that you can hire who are experts in their domain.

As small and mid-sized business owner-operators, you are not replaceable, so you do need to have the proper insurance in place to secure your business, whether that’s key person, disability, or term life insurance. They can assure that your business can continue to run and operate smoothly if something were to happen to you and you’re incapacitated, you have a disability, or if you were to pass for that business to at least be able to pay out properly. A partner or a family member can continue to operate the business. Those are truly key when you are a small to mid-sized business having insurance in place. 

Access To Capital

I would like to shift to maybe a more positive note since we dealt with a lot of risk mitigation, and that’s what insurance is all about. Talk a little bit about our business owners because a lot of our audience are existing business owners. They might have real estate assets. They might have a 401(k) or a self-directed IRA. How do you advise that these business owners use their investment accounts as tools to get access to capital? 

This is through years of personal research and looking at acquiring capital myself, whether it’s buying a house or whatever that may be. That’s what’s crazy about this stuff. There are so many things out there and so many tools available. There’s so much knowledge or strategies that we could all benefit from, but we don’t know what we don’t know. That’s why I love what you’re doing with this show right here. You’re bringing these nuggets and pearls of wisdom that can be life-changing.

Through exploring different ways to get funding myself, I used to think you take a loan or you use all your capital. Let’s face it. As a business owner. You may be generating a lot of revenue. There are a lot of write-offs and stuff. I’m not giving tax advice. I’m not a tax attorney or anything. What your personal return says is your income. You then go to get a loan and there’s no room to add more debt there.

Technically, I don’t qualify for much. Let’s put it that way. I’ll leave it right there.

You have to put in a tax strategist, tax attorney, and stuff. You may not qualify for a whole lot of lending. What I learned is you don’t have to use your capital. There are different types of investment accounts, different investment companies, and stuff that will allow you to take a loan. Let’s take $1 million, for an easy example. You have $1 million invested. You say, “I don’t want to take my money out. It’s doing good. It’s averaging good returns and stuff in how it’s invested, but I need this loan,” or “I want this loan.” People can do the research or seek out their financial advisor. If you google it, you could probably find this.

What a lot of them allow you to do in short is you got $1 million. They will allow you to get a loan for a certain percentage of however much you have invested with them, depending on the type of account and different stuff. I’ve seen 60% or 70%-ish. Let’s say you had $1 million and they allowed 70%. You could borrow up to $700,000 at a very reasonable rate. It varies, depending on what the going rates are and stuff. I’ve seen ones that will do up to a 30-year amortization. In that case, I was talking about how your $1 million is still invested in whatever you have it invested in. It’s still growing and compounding. You have the loan over here to use. As long as you’re paying that loan back, your money is still invested. Plus, you have the loan dollars doing whatever you need them to do. 

Augusta Rule

That is a very good tip for the audience. I want to transition over to real estate a little bit. First of all, do you know anything about the Augusta Rule? 

Yes.

Walk the audience through it. This is something I’ve learned over the last few years. I know I didn’t prep you that we were going to have this discussion, but it’s fascinating to me. You go to the Hamptons. You go to one of these exclusive areas and see these ridiculous houses. There are so many people who are using their homes as tax write-offs. You don’t necessarily have to have a $100 million mansion to do that. Walk us through how a business owner could engage in some other tax efficiencies. I know you’re not a tax expert, so they can see a tax expert. Walk us through some of the other things like the Augusta Rule that could benefit a business owner.

I’m going to tell you what I know about this. We’re sharing knowledge. That’s why I love this. I’m sharing knowledge and sharing what I know. Making people aware of putting things on their radar is fantastic to where people maybe are encouraged. This conversation right here may spark somebody. I was talking to a good friend of mine. That’s why they say, “Your network determines your net worth. Show me your friends and I’ll show you your future.”

I was with a buddy who’s a business owner. He asked that exact question that you asked. He said, “Have you ever heard of the Augusta Rule?” I’m like, “No. What is that?” I started looking into it. From what I gathered, in the Augusta golf tournament, these people who have these mansions and stuff on the golf course can rent the house out for so many days each year. The income that they receive from renting that out, they don’t have to pay taxes on that.

What I realize is that some business owners will have the business rent their house out for parties, business functions, hosting things, doing events, and dinners. I’ve seen people do it for book releases and all kinds of things like that. It’s a business expense, a write-off, for the business. It is like you’re renting office space or hotel space to do an event or an Airbnb for an incentive trip but you’re renting it from yourself.

Don’t quote me on this. I believe it’s fourteen days a year that you can rent your house out and you don’t have to pay income tax. To recap, it’s an expense for the business. It’s a tax deduction. If it’s your house, you don’t have to show that as income as long as it’s a fair price within those days that’s allotted to be able to do that. The Auguste Rule is a cool concept. I encourage business owners to do their own research or talk to their tax advisors, attorneys, and CPAs. That could be a good one right there. 

It’s interesting. Do you remember back in the day when they would have Tupperware parties and sell Tupperware? A group of people get together, have wine, and sell Tupperware. 

My mom used to do that stuff. I remember being a kid with everybody at the house. 

Here’s what I’ve realized. The Augusta Rule could work in a suburban community. If you have your Tupperware business as an LLC or it’s its own business, it can expense the cost of renting out your space. You pay yourself. It’s a business expense. You’re making that income that could pay for your homeowner’s insurance for the year. It has to be a certain number of days.

It doesn’t have to be exclusive to somebody who has an $80 million mansion. It could be somebody who lives in a $400,000 home. These little tactics that you have where you think it’s secrets of the rich, it has no income restriction to it. These are secrets on how you create more tax efficiency to generate more revenue and keep more profit in your pocket so you as a business owner can capitalize on the assets that you have as well.

You’re right. Initially, I asked my tax repair or tax strategist. When I asked him about it, he was like, “Yeah,” but his nonverbals were saying he wasn’t super aware of it. He didn’t understand the ins and outs of how it worked. He started doing some research. I’m not talking about somebody who will file your taxes for you or a CPA. I’m talking about an actual tax strategist or seeking legal advice. That’s always what I encourage people to do. A lot of times, we don’t know what we don’t know, and it costs us a lot of money, unfortunately, to be that ignorant.

Three Things To Check

The ignorance tax is quite expensive. You work with individuals and business owners, and you have done so for twenty-plus years. You truly are an expert in your domain. When you have someone come to you and they sit down and say, “I want to structure something where I’m creating capital efficiency, I make sure I have the right insurance in place, and I make sure that my business is running in tip-top shape,” what are three of the things that the individuals who are sitting in front of you should be looking at that are key to assure that their business will be safe and continue to grow?

We could go a lot of directions on that, but one of the biggest things, and we didn’t get into this, is having the right type of investment set up from a tax strategy standpoint depending on the type of business, whether it’s 401(k), nonprofit, or a 403(b). There are different products for small businesses, simple IRAs, and stuff like that.

Without getting too detailed, there are a lot of tax advantages to explore and look into. One of the questions I would ask is, “What are we looking for? Are we looking for tax efficiency or tax deduction?” Employees could help with retention and stuff by having a plan set up like that. You work hard to get good people. You develop them. You don’t want to train the competition. Having certain plans like that in place and offering them to your people could be of a big benefit. I look at those types of plans.

The next thing I would look at is whether they have a buy-sell agreement in place. If so, do they have life insurance that could be the funding for that? That is coupled with whether they have any key integral people in your business that if something happened to them, we need to look at those key man policies. Especially a lot of mom-and-pops or solopreneurs, if you will, where it’s just them, it could be the wife. Maybe she’s rock and roll, kicking butt, taking names, and making a couple hundred thousand a year. The spouse is making $50,000 a year. If that family’s living off $250,000 a year but mom’s $200,000 of it, God forbid something happened tomorrow and mom’s gone, could that spouse and those kids maintain that $250,000 a month lifestyle with a $50,000 income? Probably not.

Typically, what you’re going to see what’s recommended is the 10X Rule or 10 times your annual income. I’ve seen different experts say 8 to 12. I’ll chalk it up and say ten times your annual income. If you do that in that situation where the wife has a $2 million policy and something God forbid happens, and the dad, the kid, or whoever is the beneficiary, they could take that $2 million and invest the bulk of it. We can’t replace Mom in that situation, but at least we could replace the income.

Think about if you lost a spouse or you lost a parent. The emotional devastation of that is nearly unbearable, but what if that’s compounded with financial devastation and they start losing the house, losing cars, and kids having to change schools in the midst of all the emotional trauma going on? I encourage people to use life insurance as an income replacement tool to buy themselves time until they create an actual estate.

If you think about it, that’s what life insurance is. It’s an instant estate until you’ve had enough time or enough years to create an actual estate. I tell people, “If that family had a few million dollars invested, the house is paid for free and clear, and the kids are grown and gone, maybe in that situation they don’t need life insurance or nearly as much.” That is something I would talk to them about on the personal side, protecting that income for their loved ones.

One of the things that I’ve seen with life insurance for the breadwinner of the family is that they will get that 10x life insurance policy. It could be a term. It could be a whole life. It could be a combination of the two. We didn’t talk about the differentiation between the two. We can always talk about that in a future segment.

If the spouse were to pass away, it goes into a trust, and then the trust has a very specific buy box of how that money could be spent. I’ve seen it dictated that money could only be invested in certain types of vehicles that return a 6%, 8%, or 10% return. That $200,000 in income that was lost and you’ve got a $2 million policy, and that policy is to be invested at 8%, that’s $160,000 that’s coming in in income. One of the challenges is if you’re dealing with someone who doesn’t have the financial savvy, getting a $2 million check when someone passes away is a very bad thing. Sometimes, you have to protect people from themselves, and you set up a structure to make sure the family is taken care of in perpetuity. 

Kiddie trust is another thing. In my situation, I have five kids. We’re repopulating the earth over here. Four are still 15 and under. I say that to say, would I want to leave millions of dollars to children? Absolutely not. Even when they turn eighteen, would I want them to inherit or receive millions of dollars? No. That would be disastrous.

You could set it up. I don’t know the technical legal name, but it’s called a kiddie trust. While as a parent and you’re alive, you could set it up to say, “It’s going to give them so much payout for a year for them to be taken care of. They can use it to help with college or a first vehicle, or they can get a certain percentage when they turn 25.” There are a gazillion ways you could structure it. A trust is a legal contract. An attorney could help walk you through how to structure that where you could spread it out over time to where somebody couldn’t get it.

The last thing about that is what I always tell people that I work with is, “God forbid we hope you buy the policy and never need it, but God forbid you do, if you will allow us to, we will be there to guide you through making sound long-term financial decisions. That way, the money is not spent and blown on silly stuff.” I always encourage people to take the bulk of that life insurance.

A lot of people honestly think, “Let’s pay off the mortgage. Let’s pay off this.” If you got a mortgage of 3% or 4%, and you can invest it doing better, you got this goose over here, the investment that’s going to continue paying interest and dividends. That’s the golden egg that’s going to pay down the mortgage and build equity in that property. Eventually, you’re going to have a house paid for and you still got all your investment assets over here.

It is having the right financial team around you or people you can trust that you feel have your best interest at heart and that know what they’re talking about to help you properly set this up. That way, the money does what it’s intended to do. You protect it if you pass too soon, but you’re also investing in building toward financial independence if you live a long time. That way, you’re protected at both ends of the spectrum.

What you said is brilliant. With the example of paying off the mortgage, you’re already getting a deduction for your mortgage when it’s your personal property. Even if it’s an investment property, you have certain deductions you can take and depreciation that you can take. The reality in taking the proceeds from that life insurance policy is it’s so much better if that gets invested and starts becoming an income-producing asset for you if it’s set up in some type of a vehicle like a trust. There is something incredibly important for business owners.

Rapid Fire Round

You do not have a choice. You must have a financial and planning services team around you that is setting you up to make sure that you have success in your financial management from a tax standpoint, an estate planning standpoint, and an insurance standpoint. That is going to make sure that everything you are working your butt off for is worth it at the end of the day and you can leave some type of legacy for your family. Here’s what we’re going to do. We’re going to do a Rapid-fire round. You don’t know these questions but you have to answer them quickly, and then we’ll wrap up the segment. pH balanced water or diet Coke?

Water. 

Cats or dogs?

Dogs.

For a favorite cuddly teddy bear, Care Bears, or Cabbage Patch kids? 

My wife.

She’s cuddly. I love her. That answer is amazing. It’s a zombie apocalypse. You’ve got your wife and your five kids and you got to protect them. What is the one weapon of choice that you’re taking out onto the battlefield?

A pump shotgun probably.

What is one of your favorite quotes?

One of my favorite quotes is, “Be the thermostat, not the thermometer.” Meaning, when you walk into a room, you set the temperature. We teach this to our kids. When you walk into the room, the atmosphere gets elevated. Does that make sense? The energy got elevated. The excellence was elevated. We are not going to adjust who we are by outside circumstances and respond to that. We’re going to set the tone, the temperature, and the environment, and we’re going to make sure it’s always better because we were there.

I love it. That’s awesome. Tonight at 8:30 your time, which is central time, if you had the choice of anyone to have dinner with, who would it be? 

I would like to invite three people to this dinner if that’s okay. 

I will give you grace because you gave so many good answers.

I would say Jesus Christ. I have a lot of questions I would love to ask him. I would say a homeless person, honestly, and Michael Jordan.

I love it. That will make for a very dynamic dinner. Two more questions to answer. You are a business owner. You have $10 million in revenue. I show up with a $300,000 check and say, “Mr. And Mrs. Business Owner, here’s $300,000.” How would you advise that they invest that so they can grow their business and their revenue?

It would depend on their business. I would have to ask a few questions there. Probably one of the first things is that I would find out some personal developments, some knowledge gaps, and some skillset gaps that could be filled and invested in themself. The best investment we can make is in ourselves. Next behind that would be investing in having maybe the right person around you to help shore up some shortfalls.

The concept is we should be operating in our best and highest use. If I’m doing a lot of tasks that are not in my best and highest use and that’s not the 20% of the things that add 80% of the value to my business, then I’ve got to find a way to get some of that off my plate. A lot of times, particularly small business owners, we want to hold on or clench our fists to every little dollar, but a lot of times, it’s opening that up and spending a little bit to hire a personal assistant or hire somebody to help do this, that, or the other, whatever it is. When we open our hands up, a lot more money can start flowing into our hands.

It may be a systems thing. It could be some technology they could buy depending on the type of their business. I know you said three things, but it’s a loaded question. It would be very contingent upon what their business is, where they’re at, what their are strengths, and what are some deficiencies. Maybe we could do a little bit of a SWOT analysis or something there. Hopefully, a couple of those ideas made sense, 

Personal development and hiring people who you can delegate those menial tasks are very important. Last and most important question, what is the biggest obstacle you have had to overcome in your personal business that has helped you grow as a father, a businessman, and a husband? 

I would say mistaking the beginning for the end.

Talk me through that process for you. I had to sit back on that one. Keep going.

I’ve learned this a couple of times the hard way, mistaking the beginning for the end. That means you get some momentum and you get some things going. Imagine you’re going up a hill. You may be flying up that hill fast and seeing a peak. The problem is we let off. Consequently, what happens? We fall back to the hill.

I’ve seen that happen time and time again. You get some momentum. You bring some champions into your organization who are crushing it and showing a lot of good signs. What happens is we think, “Finally, I can take a break. We got some dogs in here. They’re going to go do their thing. I can finally work on the business, not in the business.” We get out of the business too fast and turn it over to people who don’t love it like you. They don’t care about it like you. There are a lot of ways you can mistake the beginning for the end.

One more key critical example of that is there are times when you’re going to have a harvest season in your business. You’re making it rain. The money is flowing. Sometimes, as business owners, we get delusional to think, “It’s going to go up and up from here. We have to stay positive. We have to be optimistic. We’re believing. We’re affirming. We got the faith. This thing is going to keep rocking and rolling and compounding.” Sometimes, that’s the case, but often, it’s not.

We spend that money and adjust our lifestyle. We think we’ve arrived, made it, and were over that hump, but we weren’t. God forbid something happens and there’s a reduction in income and stuff like that for whatever reason, you’re in a panic mode. You’ve all altered your lifestyle. You’ve overspent, undersaved, and invested. You’re in a stressful hardship.

If your income got cut in half, you could easily maintain your lifestyle and even keep investing, giving, and doing all that. When you have momentum and you think you’re there, keep going harder, and keep running while you have that wind at your back. Make sure you’re over the heel before you even think about taking your foot off the gas. Don’t mistake the beginning for the end. Stay focused until you’re done or until you’re like, “We’re financially independent. We’re bulletproof.” Don’t even think about letting up or retracting until then.

On that note, where can the audience reach you if they want to have a great conversation like what we’re having?

I appreciate that. I’d be more than happy. This is very informative and educational. I enjoyed this. If people want to have more specific questions and want to dial into their specific situation, they can reach out to me directly on my cell phone, to be honest, or email me. My email is JKGills@gmail.com. That’s a great way to get a hold of me. My Instagram is Jason Gills. You can find me there. I believe it’s @Jason__Gills. You can find me there. I would love to connect with your audience, add any value I can, answer any questions, and hopefully be a value-added resource. If I don’t have the answers, worst-case, we can point them in the right direction.

Thank you for joining us on the show. This was incredibly informative. I know the audience has a lot to take away from here.

Thank you so much. It was a pleasure and an honor.

Important Links

• JKGills@gmail.com
• @Jason__Gills – Instagram

About Jason Gills

Father to 5 sons, Married for 18 years, Graduated with my Masters in Business from LSUS in 2004. Started my financial services company in June of 2004. So 20 years in Financial Services business. I am licensed in Investments & Insurance. (Investments licenses: series 6, 63, 65, & 26) Our firm has 150 licensed agents in total with 8 different Regional Vice Presidents running their own office.