Podcast #56 Show Notes: An Interview with Mike Piper from the Oblivious Investor
In this episode Dr. Dahle interviews Mike Piper, CPA and author of the Oblivious Investor blog, who gave the two highest ranked talks at the entire WCI conference in March. They discuss the 199A deduction for physicians, how to make the decision concerning when to take social security, the LLC vs S Corp vs C Corp decision, and frequent tax issues that high income professionals face. You can listen to the podcast here or it is available via the traditional podcast outlets, ITunes, Overcast, Stitcher, Google Play. Or ask Alexa to play it for you. Enjoy!
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Quote of the Day[00:01:15]”I think the harder part is having the discipline to save. So my tip is: save now or pay later. Far too many people wake up in their sixties and realize they don’t have enough money. I say, let go of the mentality of spending money for immediate gratification to protect yourself in the long-term.” -Jeannette Bajalia
Intro[00:01:39] If you have an Echo Dot or other Alexa device you should be able to just ask it to play the White Coat Investor Podcast now. [00:03:03] The video of the WCICon2018 is available now. This is an online course that includes all the lectures and the blogger panel from the Physician Wellness and Financial Literacy Conference that we held in Park City back in March. This is your chance to attend if you missed out on it. Up until Sunday at midnight you can get it for 33 percent off. It is 100 dollars off its regular price of 299. You get 13 hours of great stuff from some of the greatest experts in the field of physician personal finance and investing.
Main Topic[00:06:07] Mike tells us a little bit about himself. What made him want to get a CPA, start a blog, become an author, and how exactly he makes a living. books he has written, basically Cliff notes on many finance and investing topics. He is currently updating all the books related to taxes after the changes to the tax laws this year. [00:13:49] Mike shares his thoughts on the White Coat Investor conference, what he liked about it, and what surprised him. [00:16:11] He explains the 199A deduction and what misconceptions he is seeing about it and what ways he has heard of people restructuring their practices and their businesses to try to take advantage of it. [00:29:27] We discuss some specific physicians situations and how this deduction will affect their taxes. [00:31:01] We discuss the LLC versus S Corp versus C corp decision. [00:35:37] Talk a little bit about the taxation options for an LLC. [00:39:08] We talk about Social Security and what the biggest mistakes Mike sees people making when claiming Social Security. [00:50:13] Social Security also provides a form of life insurance and a form of disability insurance. We talk a little bit about these aspects of Social Security and how to incorporate these into your financial planning. [00:55:49] Question from Twitter: What does your personal portfolio look like these days? [00:56:40] Talk a little bit about some of the frequent tax issues that Mike hears about from high income professionals like solo 401Ks and tax efficient investing. [01:02:36] Mike shares his thoughts on doctors doing their own taxes.
Endingvideo course of the WCICon2018 is available now. And until Sunday at midnight you can get it for 33% off. And go read more from Mike Piper at the Oblivious Investor blog.
Intro: [00:00:00] This is the white coat investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high income professionals stop doing dumb things with their money since 2011. Here's your host Dr. Jim Dahle.
Dr. Dahle: [00:00:20] welcome To podcast number 56 an interview with Mike Piper. This podcast is sponsored by CommonBond. If you’re like many of your peers, your heart probably drops each time you see how much you owe in medical school loans. But, it doesn’t have to be this way. You don’t have to live life with high payments or high interest. By simplifying all of their student loans into one loan at a lower rate, Doctors save $50,615 on average—and CommonBond is here to help you do it. With a straight-forward, commitment free application, you’ll get your new interest rate in two minutes. CommonBond is also the leader in borrower protections versus other options, because they know how unpredictable life is. And, their award-winning service team has your back every step of the way. As a member of the WCI community, you’ll get a $500 bonus when you refinance with CommonBond. Apply today at Commonbond to lock in your rates before they go up. CommonBond is a licensed lender. NMLS number 1175900
Dr. Dahle: [00:01:15] Welcome Back to the podcast. Our quote of the day today comes from Jeanette Bajalia I hope I pronounced that right. Who said I think the harder part is having the discipline to save. So my tip is save now or pay later. Far too many people wake up in their 60s and realize they don't have enough money. I say let go of the mentality of spending money for immediate gratification to protect yourself in the long term.
Dr. Dahle: [00:01:39] Well Two things I wanted to plug today before we get into our interview with Mike. The first is our cool new feature that we've got enabled on these cool devices. You know all these what we call these things echoes the Echo Dot Echo Dot. If you haven't played with these voice activated systems they're pretty cool but we have enabled a white coat investor skill. So you can talk to your echo dot and get them to play the white coat investor for you. For example if you say to it Alexa enable white co-investor you were previously listening to the podcast titled asset protection. Would you like to continue where you left off? No thank you. Then it'll bring you right into the White coat investor podcast here. Thank you. Pretty cool feature. We've been learning how to use that all week. My kids all have it down but we're still learning how to use it ourselves. But at any rate if you listen to anything on Alexa than you can get them to play the podcast for you just need to enable white coat investor and that should bring the skill right up. Also in case you missed the short promotional podcast we did earlier this week that little bonus one we had on Monday. This is the promotional week for the video version of WCIcon 18.
Dr. Dahle: [00:03:03] This is a an online course basically that includes all the lectures and the blogger panel from the physician wellness and financial literacy conference that we hold in Park City back in March. And this is your chance to attend if you missed out on it if you didn't get in in those six days when the conference filled if you weren't taken off the wait list. This is your chance to get this conference. It really turned into a slick production it incorporates their slides into the presentation. It also has each of the speakers or audio or video slides etc. including the blogger panel. So it's really a fantastic production. We're very proud of it. It took us a lot of work to put it together. In fact we initially had some problems with it that we thought maybe we weren't going to do it at all but we managed to figure out how to clean up the audio and make it something we're proud of. But up until Sunday night midnight you can get it for 33 percent off. It is 100 dollars off its regular price of 299 for just one ninety nine. You get 13 hours of great stuff from some of the greatest experts in the field of physician personal finance and investing. That's almost twice as much material as you get in the first online course we did the fire your financial adviser course. But it also is at a cheaper price for you know during the promotional period. It's 40 percent of the price for twice as much material. You can't beat that.
Dr. Dahle: [00:04:35] All Right let's move into our interview with Mike Piper.
Dr. Dahle: [00:04:39] All Right we've got a special guest on the podcast today. I'd like to introduce CPA Mike Piper the creator of the oblivious investor blog and the author of nine invest in nine financial books really not all on investing. His writing has been featured in The Wall Street Journal Forbes and Morningstar among other places. I first met him in person at a bogle heads conference a few years ago. But I've known him virtually for many years. In fact what many of you may not know is that Mike was a major inspiration in my starting the white coat investor. So if the White coat investors done anything good for you be sure to think Mike. I'm honored that he agreed to come on the podcast today. And I'm also super pleased that he came and spoke at the conference we had in Park City in March where he gave the two highest ranked talks at the entire conference. In The Post conference survey asked attendees to rate each speaker one of four categories. Definitely keep, worth retaining, indifferent, or please replace and 91 percent of the attendees ranked Mike Definitely keep and 9 percent drink to you as worth retaining for basically 100 percent positive rating. I asked them to place each presentation to one of three categories a top three presentation, worth keeping, and please replace. And 53 percent of the attendees thought your presentation on decreasing physician tax burdens and structuring your practice was a top 3 presentation and 45 percent more thought it was worth keeping says basically a 98 percent positive rating which was significantly higher than both of my talks. So Mike welcome to the podcast. I'm happy to have you here.
Mike Piper: [00:06:05] It's Great to be here.
Dr. Dahle: [00:06:07] Well Tell us a little bit about yourself. What made you get a CPA start a blog become an author. How exactly do you make a living. Can you explain that to the listeners.
Mike Piper: [00:06:17] Sure. My business model is very straightforward. So I am a CPA but I don't do any client work and haven't for I guess about a decade now. My business model is entirely rapid and her book sales. So I write articles on my blog and the blog brings in traffic from Google and portion of visitors then head to Amazon and buy them books. Of course plenty of people find the books on Amazon and just buy it that way. And that is it. Revenue from book sales that is how I've made a living for I guess since November 2008. Almost 10 years.
Dr. Dahle: [00:06:54] So How come you got a CPA? where did the interest in accounting come from?
Mike Piper: [00:06:58] Well I started going to school for marketing I guess in undergrad and pretty quickly realized that accounting was interesting to me and something I was pretty good at so I just ended up getting my degree in accounting instead and really getting a CPA certification is a pretty natural path to follow. Once you have an you know a bachelors in accounting. Not everyone does it but it's certainly not uncommon, it's just something that makes sense to do with increasing your earnings potential it provides you with a broad background on a lot of accounting topics so it makes you more useful to employers or to clients.
Dr. Dahle: [00:07:39] Now When did you start the oblivious investor blog?
Mike Piper: [00:07:44] I guess Fall 2008 Fall 2008.
Dr. Dahle: [00:07:47] That's An interesting time to start any sort of a financial enterprise.
Mike Piper: [00:07:52] Yeah It wasn't an accident. That was not not a coincidence. The whole point was things were starting to blow up basically and I wanted to start writing in a way to encourage people to not panic. That's what the idea of oblivious investor was about was trying to state a little bit oblivious if you can do all the craziness that's going on in the market.
Dr. Dahle: [00:08:16] Now on that blog you preach a message of simplicity. More so than I think anybody else on the Internet. And why is it that you think keeping things simple is so important.
Mike Piper: [00:08:29] Well A lot of reasons. Number one it just makes things easier. It takes less of your time. That's a benefit no matter what line of work you are in and another reason is it makes it less likely that you'll make mistakes. Right. If you're managing I mean many of us these days kind of without having a say in the matter we have accounts at a lot of different places you have a 401k with your employer maybe your spouse has a 401k with their employer and you have a Roth IRA and traditional IRA and your spouse has the same things as a taxable account. And so you've got you. You can't avoid having a lot of different accounts in many cases. So if each of those accounts also have as a whole bunch of different holdings while things get complicated really quickly. And so it's easier to let your asset allocation get out of whack without realizing it and perhaps be taking on more risk in your portfolio than you realize. Things like that. And so if you keep things simple it's just easier to to know where your money is to know how your money is invested. It's easier to keep tabs on your asset allocation.
Dr. Dahle: [00:09:33] Very Cool. Now you've written nine books now revising them frequently actually it seems like some of them you're revising nearly every year.
Mike Piper: [00:09:41] Yes Well the tax the tax ones have to be updated pretty regularly just to make sure they're not out of date really.
Dr. Dahle: [00:09:48] Can you tell the listeners about the books?
Mike Piper: [00:09:50] Sure. They're basically they're kind of like Cliff Notes for personal finance topics really. So for instance on the topic of retirement planning there are an assortment of great books out there both Bogleheads guides retirement planning that's a great one. It's reasonably thorough discussions of an assortment of retirement planning related topics. And if that's something that sounds interesting to you. Great. Go get that book. But if you think that if you bought that book you wouldn't that actually take the time to read it and it would just sit on your coffee table or on a bookshelf. Well then that's where my book on retirement planning might be a better fit. All my books are designed to be the sort of thing that you can read in just one afternoon really to sit down and read right through it. Or you know maybe a couple afternoons. So are for people who want to know something about the topic but who don't want to spend a ton of time really digging very deep into the weeds this kind of getting the high level information really.
Dr. Dahle: [00:10:58] Now They're also dirt cheap. I mean the paperbacks are 14 ninety nine. The Kindle versions are four ninety nine. I'm amazed that you can make your living as an author selling five dollar books. You must sell a lot of these.
Mike Piper: [00:11:12] Yes. Really. Yes. That's the answer. A lot of people buy them.
Dr. Dahle: [00:11:16] Which Is which of these books sells the best.
Mike Piper: [00:11:19] I'm Actually the one that sells the best accounting made simple. It's one of the ones that's not about personal finance Particularly. many undergrad students who are going to school for various business degrees but who when you're going to school for a business degree you have to take and pass accounting courses. But many people you know if you're going to school marketing or management maybe you don't have the skill set that makes accounting super easy naturally. So this book kind of helps a lot of students to get through that course.
Dr. Dahle: [00:11:55] Now You're married right.
Mike Piper: [00:11:56] Yes.
Dr. Dahle: [00:11:56] Any Children.
Mike Piper: [00:11:58] No No children.
Dr. Dahle: [00:11:59] And Is your wife working?
Mike Piper: [00:12:01] Yes. She's a software developer for the Federal Reserve Bank of St. Louis.
Dr. Dahle: [00:12:06] Very Cool. And what what did she think when you said I'm just going to write books and sell them on my blog and that's what I'm going to do for a living.
Mike Piper: [00:12:17] That's An interesting question. Really it wasn't it wasn't it didn't go quite like that. I was working as a tax accountant doing I guess tax returns for a large real estate company basically that had about 300 different entities that all needed various returns filed every year. So internal tax accounting is what I was doing and I just started as a hobby just writing about taxes and other personal finance topics.
Mike Piper: [00:12:47] I didn't have any idea I'd be doing it for a living. Not so long after that. But as it turned out it started bringing in a significant amount of income. And that really hadn't been part of the plan at all. And within about I guess was about a year and a half later that I quit my job to do this full time. But by the time I quit my job it was already pretty clear that it was going to be a sufficient level of income. So it wasn't.
Dr. Dahle: [00:13:17] Didn't Feel like a huge risk then?
Mike Piper: [00:13:19] No. No.
Dr. Dahle: [00:13:21] So What's next? You got another book planned?
Mike Piper: [00:13:25] Well Right now I'm as a result of the tax law that was passed at the end of last year six of my nine books have needed pretty major updates and five of those updates are finished and the sixth one is probably 80 percent of the way finished. So I'm looking forward to being completely finished with this project.
Dr. Dahle: [00:13:45] That Sounds like a busy spring.
Mike Piper: [00:13:47] Yeah It has been.
Dr. Dahle: [00:13:49] Well Thank you so much for making time to come out to Park City and talk to. You know at the white coat Investor Conference. What are your thoughts about that? What do you like about it? what surprised you there?
Mike Piper: [00:14:01] Well I didn't really have any idea what to expect. So it's hard to say that I was surprised. As such it was a whole lot of fun. And it was it was interesting. That's the group of attendees had a very wide range of preexisting levels of expertise some of the questions I got you can tell that this person really knows their stuff already. They have done on research before coming up to me and asking this question and then some of the other questions were I mean the most basic things that the person can really ask you know just asking about very basic terminology with regard to investing or very basic tax rules like what's the difference between a Roth IRA or a traditional IRA stuff like that. So a wide range of attendees in terms of their knowledge level. So that kind of made it fun and that every person that comes out to you never quite know you know what you're going to get here. You never know where this conversation is about to go. But the one thing that everyone had in common is boy they were excited, they were excited to be there. They were super excited to be learning about this stuff. And that made it a whole lot of fun really just to have a group of people who are so excited to learn.
Dr. Dahle: [00:15:28] Yeah It's interesting one of the complaints we got was that basically there weren't a bunch of empty seats in the conference room. I'm like well you can't have it both ways either you get it come or we have empty seats. So we basically sold out every seat. And if you didn't arrive early you might have been standing in the back. So. Well that was unfortunate. I guess the alternative would have been to turn even more people down and keep them from coming home. But it was interesting that every session was packed or as you go to a typical you know continuing education conference and it's not like that you know people bug out to go do different things or they're in different sessions. But this one every one of them was full and the listeners were engaged and it was really really enjoyable I thought.
Dr. Dahle: [00:16:11] Now Let's let's get into some more kind of technical questions and this is really where your expertise is and everyone's always so impressed. my wife the other day mentioned that Mike Piper he knows a lot of stuff. And I think There's a lot of truth to that. So let's get into some of the stuff you know. And that could be useful for our listeners. So let's start out with this new deduction we've got this year that everyone still kind of wrapping their heads around this one ninety nine a deduction. Yeah. Can you explain what this is to the listeners and what misconceptions you're seeing out there about it and what ways you're hearing about people restructuring their practices and their businesses to try to take advantage of it and so on and so forth.
Mike Piper: [00:16:56] Yeah I guess the shortest explanation is that this is a new deduction for up to 20 percent of the profit that you are getting from passed through businesses and passed through businesses that includes a sole proprietorship or a partnership or an S corporation or an LLC tax as any of those things. So an LLC taxed as a sole proprietorship, partnership, or S corporation. And again the deduction is for up to 20 percent a profit that you're getting from one of those types of businesses.
Mike Piper: [00:17:35] But there are an assortment of limitations that can kick in to reduce the amount of that deduction Basically. And as far as misconceptions I can't say that I've seen a whole lot lately. More of what I've seen is just people who are just confused about the whole thing from start to finish. Because the unfortunate truth is that this is a very complicated tax provision and it's a complicated thing that's going to affect a whole lot of people. So that's that's unfortunate frankly that a whole lot of people's taxation is going to get a lot more complicated starting this year. So that's the basics. We can dig into the different limitations if you want.
Dr. Dahle: [00:18:26] Yeah Let's just cover each of them briefly. There's there's at least three or four that I think are pretty significant that people need to know about what's at least cover those.
Mike Piper: [00:18:35] OK. So the first one that doctors definitely will want to know about is that if your business is a specified service business then there is a phase out for this deduction and the specified service business includes whole lot of different types of businesses but it includes anything in the field of medicine. So certainly most self-employed doctors are going to find that their businesses are a specified service businesses. And if your business is a specified service business then as your taxable income crosses a certain threshold and then proceeds through a phase out range then the amount of this deduction that you get is reduced and eventually eliminated. So for a single person that threshold is one hundred fifty seven thousand five hundred dollars for somebody who is married filing jointly. It is twice that amount.
Mike Piper: [00:19:39] So three hundred fifteen thousand dollars. So again once your taxable income exceeds that threshold if your business has a specified service business then the amount of this deduction that you get will start to be reduced. That's basically the gist of it.
Dr. Dahle: [00:19:56] Now This is interesting that it's based on taxable income. It's not based on your total income. It's not based on your adjusted gross income. Like most income tax phase outs are it's on your taxable income. Why do you suppose that is and what difference does that make.
Mike Piper: [00:20:13] Well Why that is I don't have any idea. And I don't want to try to guess what they were thinking frankly. But it's a big deal as far as tax planning because it means that really any type of deduction that you can get can help to keep your income under this applicable threshold or make your taxable income lower such that your it's not as far through the phase out range basically so any type of deduction that you can qualify for can increase the amount of this deduction this deduction per pass through business income. So additional deductions for your business if you happen to notice there's something that you weren't deducting that you could be deducting or if you are a sole proprietor for instance contributing additional funds to a solo 401k could reduce your taxable income it could help increase the amount of deduction you get for past their business income.
Mike Piper: [00:21:22] Additional so if you itemized deductions and of course fewer people are going to be itemizing this year than in previous years then if you do itemize charitable contributions would qualify not only for their normal deductability but would reduce your taxable income and therefore help to increase the amount of deduction you get for past your business income. So you hit on a really key point here that anything that reduces your taxable income could potentially increase the amount of your deduction for pass through business income.
Dr. Dahle: [00:21:55] You Know it's really interesting to think if you're really close to that threshold giving some money away to a charity could actually result in you getting a very large deduction even giving just a small amount to a charity.
Mike Piper: [00:22:09] Yes But it's not crossing that threshold isn't a disaster immediately because after that threshold then there's a phase out range and the deduction is phased out gradually over that range. So it's not as if when you're under the threshold you get the whole deduction and then if you were you know a dollar over the threshold you'd lose the deduction completely. So it won't be. It's not the sort of thing where a person has to make absolutely sure to stay right under that threshold if they're a little bit past the threshold. They'll still get most of their deduction.
Dr. Dahle: [00:22:45] Good Point. And thankfully tax software should be able to figure out the phase out amount because it looks like a fairly complex calculations are going to be coming our way to try to sort that these out.
Mike Piper: [00:22:54] Absolutely. Doing this by hand is not something I would suggest. Turbo Tax or something similar is going to be super helpful. And that's and frankly I I do this all the time not just for this new deduction but for things in general where you test. OK. Well what if I contributed an extra thousand dollars to a retirement account or a tax deferred account or what if we made an extra thousand dollar charitable contribution. What happens? How does our total tax bill change. And frequently the answer will surprise you. I mean you might say oh I'm in the you know such and such tax bracket. But that's not the only thing that's changing. You might find the next one thousand dollar deduction helps you stay under some particular threshold. Now you qualify for a credit or a deduction that you didn't qualify for otherwise. So doing what if tax planning that something like Turbo Tax is super useful. I mean all the time and it's this is another way in which it will be useful but that's something that's helpful for really anybody.
Dr. Dahle: [00:24:00] Excellent Point. Now on this on this particular limitation on the deduction I'm starting to get questions now from doctors asking about this topic. They have a practice that is a specified service business. You know it's a medical practice. But there are portions of it. They're wondering if they can split out into a separate business and then qualify for this deduction for the split out portions of the business. For example a common one is they want to have a separate business that then rents some of the equipment in their practice to the specified service business. Have you any thoughts about that or other schemes that you're starting to see people try to do to try to take advantage of this law even though you know their physicians or dentists or something like that.
Mike Piper: [00:24:47] Yeah Absolutely splitting income out can can in some cases be effective. And exactly the way that you've described it is an assortment of other things that can come into play here. For instance in addition to that the phase out that we discussed her specified service businesses. There's also a limit with regard to the wages that the business is paying. And essentially though the greater the amount of wages that the business pays the greater the amount of deduction that you can qualify for. So this is something again that you'll either want to do what tax planning with Turbo Tax or talk to an accountant about. But in some cases increasing the amount of weight is that you're paying possibly to yourself or possibly to other employees can reduce your tax bill. Now in ways that might not have been so obvious because they increase the amount of this deduction that you qualify for. There's also going to be some uncommon cases in which filing separately for married people might be made somewhat more advantageous than it would have been before. It's still definitely going to be the case that most married couples are going to benefit from filing jointly but in some cases you might find that filing separately can increase the amount of this past your business income that that one spouse can get. And as a result it might on the whole reduce the couple's told tax bill.
Dr. Dahle: [00:26:28] It's Really an interesting aspect that this is supposed to be you know a business related deduction but two doctors for instance with the exact same business two partners in a business one of them could get the deduction and the other one not simply because of what their spouse does for a living.
Mike Piper: [00:26:47] Yeah. Absolutely.
Dr. Dahle: [00:26:49] Little bit little bit unfair there when you think about it that way although I'm not sure how exactly they would have written the law to avoid that problem.
Mike Piper: [00:26:56] Yeah I mean there's there's a whole lot of cases like that where it doesn't necessarily the outcome doesn't necessarily make sense.
Dr. Dahle: [00:27:05] What What other significant limitations on this on this deduction would affect physicians?
Mike Piper: [00:27:13] So in addition to the phase out for specified service businesses I briefly mentioned that there is a wage related limit and the way this is the way this limit works is if your income again this is your taxable income if it is in the same range. So if it's over those same thresholds that we discussed earlier then your deduction can be limited to half of the wages that the business is paying. Or if this is greater than a quarter of the wages that the business is paying plus two and a half percent of the basis that the business has in qualified property sold things like depreciable tangible property. So basically the key point here is again if your business is paying wages you might have incentive to increase those wages. And number one that might be paying other employees but the other big takeaway is that if your business is currently a sole proprietorship or a partnership meaning that you are not currently an employee of the business you now might have an incentive or an additional incentive to elect s corp tax treatment for your business so that you would be an employee of the business.
Mike Piper: [00:28:36] And now you're your business would be paying wages to yourself basically and therefore increase the amount of pass through income pass through business income deduction for which you qualify. So again the math gets pretty messy pretty quickly unfortunately. So again it's the sort of thing we're discussing your personal situation with a tax professional is likely to be advantageous. But this is at least something that you might want to ask them about. Again if your business is currently a partnership or a sole proprietorship you would at least want to look into how things would change if you elected s corporation tax treatments and how the business will be paying wages to you and therefore potentially increase the amount of your through past your business income reduction.
Dr. Dahle: [00:29:27] For Sure it can definitely get complicated. Let's try boiling it down just for a minute. Let's say we've got a hospitalist a married hospitalist makes two hundred thousand dollars practicing medicine as an independent contractor. let's say structured as a sole proprietorship. Is he going to qualify for that deduction?
Mike Piper: [00:29:47] Is he married?
Dr. Dahle: [00:29:48] Married making 200000 dollars.
Mike Piper: [00:29:50] OK. And how much does his or her earned and how much does his spouse make.
Dr. Dahle: [00:29:55] Let's Assume the spouse makes nothing. Just keeps it simple.
Mike Piper: [00:29:58] Ok Then he's under this threshold. Since he's married if they're filing jointly the threshold is three hundred fifteen thousand dollars a tax income. Well under that that income limit. So he would qualify for the full deduction.
Dr. Dahle: [00:30:12] He's Not limited by the 50 percent of wages limits.
Mike Piper: [00:30:18] Right. Correct. The that wage the 50 percent of wages limitation kicks in over the exact same phase out range as the phase out for specified service businesses. So there's still this threshold of 157500 if you're single or twice that amount.
Mike Piper: [00:30:37] So 315000 if you're married filing jointly. So if this particular doctor is married and their household income is two hundred thousand dollars they're well below the 315000 dollar threshold. So they will get the full amount but deductions .
Dr. Dahle: [00:30:52] that Could be a pretty huge deduction for somebody making 200000 dollars.
Mike Piper: [00:30:56] Absolutely. And then 20 percent of the business income basically.
Dr. Dahle: [00:31:01] I Mean that might knock 20 grand off their taxes. That's pretty cool. OK let's move on a little bit to another subject. Let's talk about something you've written an entire book on. The L.L.C. versus S CORP versus C corp decision. I have a lot of people come to me and say Should I be a sole proprietor should I be LLC should I be an S corp C corp etcetera. I know there's obviously there's entire book worth of material on this. But what are some of the things people should be thinking about as they look at those decisions on how to structure their business.
Mike Piper: [00:31:38] There's Two big questions really. Number one is you need to be thinking about liability. And number two is you need to be thinking about taxes and with regard to liability. Being a sole proprietorship or a partnership. Those are definitely the highest risk choices. Forming an LLC or a corporation can reduce liability in some ways. The specifics are going to vary by state. So it is hard to say anything super definitive about how much a person's liability risk would be reduced by forming an LLC or a corporation. But in almost every case there will be some degree of production.
Mike Piper: [00:32:21] In Regards to taxes Your default structure is if you're the only owner of the business by default it's going to be a sole proprietorship and if there are multiple owners by default that's going to be a partnership. And then if you want you can elect instead to have S corporate or C corp taxation and you can do that by forming a corporation or by forming an LLC and then choosing to have it taxed as S corp or C Corp and the very short version is that C corp taxation is not usually a tax saving tool. Often seek Corp taxation is something that's imposed upon you rather than something that you elected for tax savings purposes. And the reason for that is that the business itself has to pay income tax on its profit and then when it distributes that profit to shareholders that payments known as a dividend and the shareholders have to pay tax again. So basically you're looking at two levels of taxation and as a result of that the specifics have changed this year relative to last year. But the overall outcome is still that C corp taxation is not usually a tax saving tool. In contrast s corporate taxation often doesn't result in tax savings. And the reason for that is that owners of an S corporation do not have to pay self employment tax on their allocated share of the business as profit. So let's say you've got you're making 200 thousand dollars of income and you're a sole proprietor. Well normally if you're a sole proprietor you're going to be paying regular income tax on that. Two hundred thousand dollars of income and you're also going to have to pay self employment tax so it's regular income tax and self employment tax if you're a sole proprietor.
Mike Piper: [00:34:34] If you instead elect S CORP tax treatment. Now the business will have to pay you a certain amount of wages and it's a reasonable amount of wages. And so that's going to vary depending on the type of work you're in and where you live and how much experience you have and so on and so forth. But to just make up a number let's say than a hundred and fifty thousand dollars would be a reasonable amount of wages. Well now that 150000 dollars you'll still have to pay income tax on that and because it's wages you'll have to be paying Social Security and Medicare taxes but that fifty thousand dollars of profit that's left over you won't have to pay self employment tax on it. You would also to pay income tax but not the employment tax so that's where the tax savings kicks in. Basically to summarize again S corp tax treatment can save you money if the businesses are earning enough money to pay you a reasonable amount of wages and still have profit left over because that leftover profit won't be subject to self-employed tax.
Dr. Dahle: [00:35:37] It's Very helpful. Thank you. Now I see a lot of confusion with regards to LLC and how they are taxed. Can you talk a little bit about the taxation options for an LLC.
Mike Piper: [00:35:49] Sure. By default an LLC is just going to be disregarded. So what that means is that if you are the only owner of your business and it's currently taxes and sole proprietorship and then you form an LLC and keep conducting business while it's going to keep being taxed as a sole proprietorship. Unless you elect a different type of tax treatment so you can intentionally elect S Corp or C corp tax treatment for your LLC. And if you are one of multiple owners that your business. So it's currently a partnership and you form an LLC. By default it's going to be continued. It's going to continue to be taxed as a partnership. But again you could then elect S corporate or C corp tax treatment.
Dr. Dahle: [00:36:36] Now I've heard a lot of people say an LLC electing to be an S corp for tax purposes is kind of the best of both worlds. You get the simplicity of the LLC and you get the liability protection that the LLC provides but you get to save some of the hassles of being a corporation. What do you think about that approach.
Mike Piper: [00:36:55] Yeah I think that's a good assessment. Again things are going to vary somewhat from state to state in terms of exactly the degree of liability protection offered by an LLC as opposed to an S corp. In some states there might be one or the other that has a certain higher level of protection. And different states have different rules about who is allowed to form an LLC or who's allowed to form a corporation. So in certain states. Doctors or other professionals so accountants also lawyers and so on might be required to form a special type of LLC or a special type of corporation which is subjected to additional regulations. So there is some degree of state specific rules that need to be paying attention to.
Mike Piper: [00:37:48] So talking to a local attorney and hope you can research it on your own but make sure that you're looking for information that's specific to your state. With regard to liability topics.
Dr. Dahle: [00:37:58] Are there states that don't allow an LLC to be taxed as an S corp?
Mike Piper: [00:38:03] No That's that's all that law that's a federal. Yeah exactly.
Dr. Dahle: [00:38:08] OK. Very cool. Another thing I think a lot of doctors don't realize is there you know when they think about liability what they're thinking about is malpractice right. And they don't realize that neither an LLC nor a corporation shields them from malpractice whatsoever. It's always a personal tort. And so I think a lot of people are you know they don't even care so much about the tax benefits they're try and reduce their malpractice risk. And it's really kind of kind of a waste of time and money to do it for that reason.
Mike Piper: [00:38:39] It Might be and it might not be. It's not going to protect you from your own malpractice but if you have employees having an LLC or an S corp could prevent you from having personal liability for their malpractice.
Dr. Dahle: [00:38:53] It's A good point.
Mike Piper: [00:38:54] The Employee would still have personal liability for their own malpractice and your business would still have liability for the employee's malpractice. But you might not have personal liability for the employee's malpractice.
Dr. Dahle: [00:39:08] Very Cool. Thank you for them. Look let's turn to another one of your favorite subjects. In fact I was reviewing the white coat Investor Conference because we're getting ready to put it on video here soon. And you mentioned that you love talking about Social Security which might put you in a very small club. But let's talk a little bit about Social Security what is what are the biggest mistakes you see with people claiming Social Security.
Mike Piper: [00:39:35] Boy There's a lot of them. Not paying attention to their own personal circumstances is one of them. Another one would be only thinking about themselves rather than thinking about themselves as a couple. If they're married. So I see this a lot where let's say you've got a husband and a wife and one of them earned considerably more than the other one over the course of their career. So you've got a higher and a lower earner and the higher earner It turns out is in very poor health. So they have a short life expectancy. So they claim Social Security early thinking Oh I'll take the money now because I don't know how long I'll be alive to collect it. But that's a big mistake because when that higher earner delays or when a higher earner claims benefits early it reduces the amount of survivor benefits that that lower earner is going to get for their whole rest of their life. So if they had been thinking about as the higher end or what they actually want to be thinking about is the couple's joint second to die life expectancy which even if one person has a short life expectancy a joint life expectancy is going to be quite long. And so really in almost every case if you're a married couple the higher earner should be waiting until 70 or at least close to 70 somewhere near that out of the spectrum maybe sixty eight and a half or 69 in a few months or something like that. But the higher earners should almost never be filing early.
Mike Piper: [00:41:05] The math is almost never going to work out in favor of doing that. Conversely the exact opposite mistake can happen. So the lower earner might say Oh well I'm in great health so I'm going to wait but if the higher earners is in poor health then what the lower earner should be thinking about is the couples first that life expectancy which just shortened because one person's poor health. So really the key point to take away here is that if you're a couple you need to be thinking about both of you and the higher earner should always be thinking about the couples second to die Life expectancy and lower earner should always be think about the couples first to die. Life expectancy. So you always have to be thinking about both people because if you're only thinking about one the mistakes are very very likely.
Mike Piper: [00:42:02] Another mistake that I see all the time is both people filing at their full retirement age or close to it that's almost never going to be the ideal solution. Because when the higher earned delays taking benefits it increases the amount that the couple receives as long as either of the two people is still alive. And conversely when the lower earner delays taking benefits it only increases the amount that the couple receives as long as both people are still alive. So as a couple you get more from every month that the higher the delays than for every month that the lower earner delays. So it doesn't make any sense for the two people to do the same amount of waiting.
Mike Piper: [00:42:47] You want the higher earner to do more waiting and the lower end or to do less waiting because you get more out of every month that the higher earner waits. So both people claiming you know around their full retirement age are around the same age as each other is. It's pretty uncommon that that's going to be a very good solution.
Dr. Dahle: [00:43:06] Excellent Point. Now you kind of fall in the camp that most financial authorities authors gurus fall in which is generally you should be trying to delay to age 70 before you take your Social Security even though that's a minority of people that actually do it. Yeah but there's a decided minority of people out there that think you should take the money early and invest it. Now you just published a post on your blog today maybe even in the last few days that talks about what that means. To take it early and invest whether that's a good idea or not. Can you talk about that and what things people should consider if they're actually thinking maybe they want to try to do that.
Mike Piper: [00:43:50] Sure. Really that's that's what the analysis always should be. You should always be weighing take the money now and invest it as opposed to filing later. You should always say that. But if you claim benefits early you're going to invest them because you might as well or even if even if you're claiming benefits early and you're spending that money well now that means that you don't have to spend down your portfolio as quickly. So part of your portfolio gets to stay invested and earn a rate of return.
Mike Piper: [00:44:20] So if you're going to do the analysis properly you have to assume that if you claim benefits early you're going to invest the money and the big question then is what rate of return should I assume that I'm going to earn and in my opinion the most appropriate rate of return to look at is the rate of return from tips that's Treasury Inflation Protected Securities. So those are Treasury bonds that pay a certain after inflation interest rate. So right now for instance 20 year TIPS have an interest rate of almost exactly one percent. So that means that they promise to pay you inflation plus 1 percent over that 20 year period of time. And the reason that tips are the in my opinion appropriate investment to look at to look at the rate of return you'd be earning is that they're the investment that has the most similar level of risk to Social Security because both of those things are backed by the federal government and they're both inflation adjusted so they are more similar to each other than Social Security is to any other investment. Now some people might say OK fine so that's most similar. But I'm still going to take the money early because I'm going to take it and invested in stocks and that's going to earn a higher rate of return. OK fine. But what you still have to be looking at is is this person's portfolio exclusively invested in stocks or do they still have some bond holdings as well.
Mike Piper: [00:46:02] Because if they do then what they probably should have done is spend down those bond holdings to delay Social Security because the rate of return you can be expected to get from delaying social security is generally greater than the rate of return that you can expect from bonds with interest rates where they are today. So most people are going to benefit by spending down their bonds to delay Social Security because a it results in on average or higher a higher rate of return and b it offsets longevity risk. It helps protect you in the event that you live for a very very long retirement which turns out to be very expensive because Social Security will keep paying for that entire period of time. So really again the rate of return that you should be assuming is basically the rate of return from the safest investments in your portfolio. That's where you should be looking at.
Dr. Dahle: [00:47:02] What is the ballpark rate of return you've got to get to come out ahead investing the money instead of you know instead of delaying age 70?
Mike Piper: [00:47:13] Yeah for an unmarried male the rate of return that you would have to get in order to make it as good claimed 62 as it would be to claim that 70 would be about one point seven percent above inflation. for an unmarried female They'd have to get about two point nine percent above inflation. And you know if you look at interest rates right now there's as plain as they that there's simply no way to get those rates of return in a safe way. It just that's not available today with today's interest rate market. For a married couple it's going to be different and it's going to depend on the difference in the two spouse's earnings history and on their difference in age.
Mike Piper: [00:48:01] But the big takeaway is that for the higher earner the rate of return that they would need to earn in order for it to make sense of benefits at 62 would be super high high enough that it's not going to happen basically which is at least not it's not going to happen in any remotely low risk way which is why experts just almost unanimously recommend the higher earner married couple wait until 70 in most cases or wait until close to 70. Conversely the rate of return necessary for it to make sense for the lower earner to file early is lower than it would be for an unmarried person. So it's it's not at all out of the question for it to make sense for a lower earner to the lower earner and a married couple to file for benefits early and invest the money. In many cases that's a perfectly reasonable thing to do. It just doesn't usually make sense for a higher earner to file early and invest the money. That's almost never mathematically advantageous.
Dr. Dahle: [00:49:11] Now You mentioned two point nine percent plus inflation for an unmarried female. I mean that's a 3 percent inflation environment. That's a five point nine percent guaranteed return. You know that's indexed to inflation. So it takes into account that inflation risk gets awfully attractive guaranteed return these days.
Mike Piper: [00:49:31] Yeah. It's not quite a guaranteed return. That's the that's the expected return. Because you can't actually calculate the rate of return that actually ends up happening until we know what date the person's going to die. It's an excellent buy by which point it's too late to make any useful decisions. But. But 2.5 percent above inflation is the expected return. And it's again it's a very low risk because this is backed by the federal government it's inflation adjusted. So I mean boy that's a heck of a lot better than the expected return you're going to get on any sort of fixed income investment these days aside from I mean maybe the most speculative of bonds.
Dr. Dahle: [00:50:13] Thanks For addressing that. What do we think about Social Security most of the time we're thinking about these retirement benefits. But that's really not all that social security does. In a couple of respects Social Security also provides in some ways a form of life insurance in some ways a form of disability insurance. Can you talk a little bit about those aspects of Social Security and how to incorporate those into your financial planning.
Mike Piper: [00:50:37] Sure. So Social Security provides a degree of disability insurance and life insurance and that it if you die and you have minor children they can receive a benefit based on your work history essentially is roughly the way it works. So it's a degree of life insurance and that certainly has a value. And so it's important to keep that in mind when you're paying your Social Security taxes. Remember that part of the value you're getting from this is the life insurance and the disability insurance that you get. It's not just the retirement benefits you're going to get down the line. But it's also important to recognize that those levels of life insurance and disability insurance are just not sufficient. You need additional life insurance if you are out of sight. If you have people depending on you for income you need additional life insurance. Absolutely. Same thing with regard to disability insurance because with Social Security disability it's a very restrictive definition of disabled.
Mike Piper: [00:51:55] So if you've been working as a doctor making a very high income and now you get sick in some way or have some injury in some way that you're no longer able to do that but you are able to work in some much lower earning capacity. Well Social Security is not going to consider you disabled in those cases. So it's not going to provide a level of protection that you probably want. So most likely doctors are going to want to get a an actual disability insurance policy through you know an actual insurance company with an owner occupation definition which says that you're disabled that you can no longer perform your own occupation. So again Social Security has definitely a valuable degree of life insurance and disability insurance. But for most people especially higher earners you're going to want to supplement those with insurance policies that you purchased your own.
Dr. Dahle: [00:52:51] You Know I agree with that. I also was surprised though to see especially if you have small children at home and will for a number of years just how much that survivor benefit would be I think I looked at mine if I died today that survivor benefit for a number of years until those kids got older I think it was four or five thousand dollars a month. I mean it was not an insignificant benefit at all.
Mike Piper: [00:53:14] No. Yeah it's not insignificant at all. It's it's it's very meaningful. People often. I mean that's getting political that people frequently say oh Social Security is a bad deal. They're doing their math. They're only looking at a retirement but ultimately going to get whereas a significant amount of the money they're paying is paying for this disability insurance and life insurance. And it's still not as if you're getting up you know a high rate of return on the money on the taxes that you're paying here. But it's it's a lot better than if you completely ignore those types of insurance that you are getting.
Dr. Dahle: [00:53:49] Now The rate of return actually varies quite a bit. An interesting when you really dive into the weeds on this and you start learning about the two bend points. Social Security really up to the first reason the second bend point the rate of return really isn't too bad. Can you talk a little bit about that rate of return up to those bend points.
Mike Piper: [00:54:10] Well Again to calculate an actual rate of return we have to know how long the person's going to live. But as far as financial planning that we can do in advance and a real life scenario of the way the rate in which your retirement benefit grows as you accumulate more and more earnings history over your working years it grows at a reasonably fast rate for a short period of time and then it grows at a slower rate for a fairly extended period of time and then it slows down again to grow at an even slower rate. So basically really the big takeaway here is if you are a higher earner so somebody earning over the maximum amount that Social Security is going to tax in a given year. So roughly a hundred twenty eight thousand dollars per year in today's dollars.
Mike Piper: [00:55:08] If you're earning at that level the payback you're ultimately expected to get from Social Security for your first 20 years of earnings is pretty good. It's not you know not off the charts or anything but it's it's pretty deep. That's pretty good. However after that it falls off a cliff basically. And so additional years of earnings won't do nearly as much to increase your ultimate retirement benefit after you've got about 20 years of maximum earnings.
Dr. Dahle: [00:55:42] Sounds like a you know a pretty good argument to be thinking about retirement around 50 as a doctor.
Mike Piper: [00:55:48] Yeah Exactly right.
Dr. Dahle: [00:55:49] Interesting. Let's move off Social Security now and let's just pause for a second. I asked people an hour or two ago on Twitter whether they had any questions for you. They wanted me to ask them a podcast and I got one from Dr. grump who says I should tell you you're doing a great job. He's been following your posts for years but that's a question for you. What does your personal portfolio look like these days.
Mike Piper: [00:56:11] Well It's the same thing it's been for the last several years. And it's as simple as you could possibly get the entirety of our retirement savings are in the vanguard like strategy Growth Fund. So all our solo401K accounts both mine and my wife's Roth IRA and traditional IRA all of it's just in this one fund. So very straightforward very simple. And then we just have checking accounts just basic plain old checking house. That's it.
Dr. Dahle: [00:56:40] Like I said he's a huge advocate for simplicity one mutual fund. Three accounts pretty awesome. All right. Let's talk a little bit about about some of the frequent tax issues that you hear about from for high income professionals. Maybe some of the issues people asked you about the Park City conference or elsewhere. What do you hear about from Docs what are they asking about when it comes to tax issues.
Mike Piper: [00:57:04] Certainly One that's a popular topic among the attendees at that conference was solo 401K . People really want to know about that and how much they can contribute and where they should open an account. And you actually probably know more about all the different places where a person might open a solo 401K. You've probably looked into it more than I have. But from what I've learned Vanguard is a great place in that they offer the option for Roth contributions as well as regular contributions. But one downside is that they don't allow for rollovers incoming rollovers so often if somebody is planning to back a Roth IRA strategy they want to take any pre-tax amounts that they have in their traditional IRAs and move it into a 401k and having a solo 401K can be a way to do that. But it doesn't work if your 401K doesn't accept incoming roll overs. OK. That's kind of one reason why Vanguard is not as good of a fit and that. I gather that Fidelity does offer that. So that's an advantage of fidelity. The downside of fidelity is that they don't offer Roth contributions. So you tell me you know who offers both of those options Roth contributions and incoming rollovers while still having low costs and no administrative costs good investment options.
Dr. Dahle: [00:58:30] You Know I'm incredibly frustrated by the soul of 401k offerings out there. I have yet to find one that's perfect. You know as you mentioned the Vanguard one has a limitation that it doesn't take IRA rollovers it'll take 401k rollovers but not IRA rollovers which is interest. They also force you to use their slightly more expensive investor's shares instead of the Admiral. So those are kind of the downsides of the Vanguard product. fidelity as you mentioned has some limitations as well. I think if I were doing it all again I might go to Etrade because they allow you a Roth option, they allow you loans from the 401k which got a little bit better this year with the tax reform that you don't pay them back quite so quickly if you separate from the employer. They also offer you know IRA rollovers the if you want to buy Vanguard funds you can you have to buy their ETF. And of course there is a small commission for that. So if you're doing a lot of transactions maybe they're not ideal either but that's probably I think the best general option. There's a few people out there that are actually hiring TPA to design their own solo 401k so they can have their own you know put the features in it that they want to but obviously that adds another layer of expense and hassle. So I wish I could just say go to Vanguard you know which is an easy thing to do for like a Roth IRA. But I don't think I can quite endorse them. You know as wholeheartedly as I have for a lot of other things.
Mike Piper: [01:00:03] OK. Thanks. It's good to know.
Dr. Dahle: [01:00:05] What other what other tax issues do you hear about from from the docs at the conference or elsewhere?
Mike Piper: [01:00:12] Well one thing that we talked about at the conference and that many people have questions about was tax efficient investing. So once you've maxed out your retirement accounts and you're investing in taxable brokerage accounts how can you reduce the tax costs that you're paying on an annual basis. And there's a few strategies we can take into that as much or as little as you like.
Dr. Dahle: [01:00:33] Sure. Let's hit the major points anyway. I think that is a common topic I hear about.
Mike Piper: [01:00:37] OK. I think the single biggest thing you can do is just try to avoid owning very tax inefficient assets and your taxable brokerage accounts. So personally I'm a fan of index funds rather than actively managed funds. But if you're going to own actively managed funds you generally don't want to own them in a taxable account because they have a lot of turnover which means they're buying and selling their holdings on a regular basis. And what that means is that you as a shareholder are going to be having to pay more capital gains taxes per year and the capital gains that are going to be paying taxes on are likely to be short term capital gains tax that your regular income tax rate as opposed to long term capital gains tax and a lower tax rate. So again if you want to own actively managed mutual funds you want to make sure to own them in a retirement account rather than your taxable brokerage account. Same thing with REITS. Real estate investment trusts or mutual funds that invest in real estate investment trusts.
Mike Piper: [01:01:42] They pay a high level of income and a fair bit of it is taxed as ordinary income. So again if you want to own those make sure that they're in a retirement account and then the third thing that's in that category is high yield bonds or junk bonds. They pay a high level of income and it is taxable in ordinary income. So if you want to own those make sure it's in a retirement account rather than a taxable brokerage account in my opinion that's the most important thing to do. It's also the easiest thing you can do. There's also strategies like tax loss harvesting which can provide some benefits they take more ongoing work. But this strategy of just making sure that your assets that have the highest tax cost per year make sure that you don't have them in a taxable account. It's super easy to do. You only have to make that decision one time and you don't have to fiddle with it. It's easy to do and it will reduce your taxes.
Dr. Dahle: [01:02:36] Very Cool. Thank you. Speaking of taxes what do you think about a doctor preparing his or her own taxes.
Mike Piper: [01:02:43] I Think if it sounds fun to you by all means go for it. You.
Dr. Dahle: [01:02:49] That's A pretty it's a pretty small percentage that are going to think it's funny.
Mike Piper: [01:02:53] I Think OK well I mean if you don't think it's fun then you probably shouldn't be doing it. I mean it doesn't cost all that much to have somebody else do it for you. But if it does sound like something that will be interesting because you know you find all this personal finance stuff to be very interesting and then go for it. You're going to learn some things in the process if you've never done it before. I mean you're definitely going to learn some things. It's going to take time. You wouldn't want to wait until April 10th and then start doing your return especially if you've never done one before. But yeah go for it. I don't think there's anything wrong with doing your own tax return. I would certainly encourage the use of tax software Turbo Tax or something similar. Yes if you want to do it go for it. .
Dr. Dahle: [01:03:42] A Lot of docs are afraid of making a mistake. Should they be afraid of making a mistake on their taxes.
Mike Piper: [01:03:49] Well It's certainly not out of the question that you might make a mistake of using tax software can reduce that likelihood. But it doesn't eliminate it. I mean tax software basically they guarantee you that they're going to do the math appropriately but they can't guarantee that you're going to put all of your information appropriately. So mistakes can happen. You could find a tax professional to check over your return. If you wanted but usually a mistake is not going to be it's not going to be a disaster. You're not going to go to jail for a tax mistake it's going to be you know I'll send you a letter and they'll say hey we looked at your return and we think you owe this amount of additional taxes and you look at that letter and you look at your return and you figure out whether you agree with them or not.
Mike Piper: [01:04:38] And if you do agree you just write a check and there's going to be some some interest there. You know for having underpaid taxes. But it's not the solid credit card rates of interest that's based on Treasury bonds so it's a low rate of interest per year. So yes mistakes can happen. And you should not you should be ready for that. You know as if you've never done it before it's not out of the question at all. You might make a mistake but it's not usually going to be any super disastrous if you do make a mistake people make mistakes on their tax returns. It happens all the time. .
Dr. Dahle: [01:05:18] Very Cool. Well we're getting along here so I think we'd better wrap this up but I sure appreciate your time coming on the podcast today Mike.
Mike Piper: [01:05:25] Thanks. That was fun.
Dr. Dahle: [01:05:26] For Those who want to learn more from Mike. You can find his blog at oblivious investor dot com. You can find his books at Amazon. These include accounting Made Simple, Taxes Made Simple, LLC versus S Corp versus C Corp, Social Security made simple, independent contractors sole proprietor and LLC taxes, Investing Made Simple, microeconomics made simple. You're kind of getting the theme here. But you get him on Kindle for 4.99. You get them you know written if you're on Amazon Prime in your mailbox in 48 hours for just 14.99. So be sure to check those out as well. Thank you Mike.
Mike Piper: [01:06:03] Thank You.
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Dr. Dahle: [01:06:36] Head Up shoulders back. You've got this we can help. Remember you've only got three more days to get this special 33 percent off offer on the video version of the WCI conference. You can find that through the links on the Web site or in the show notes or by going to the White Coat investor school at teachable dot com.