Hey there! Welcome to the Independent Money newsletter 👋 We’ll be exploring the latest financial news and discussing how it affects entrepreneurs like you. Plus, we'll share some awesome wealth creation insights from successful entrepreneurs that you won't find anywhere else.

Let’s dive in! 🏊‍♂️

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In this week’s newsletter, we’ll discuss:

• Financial Tips and Tricks: Learn about the tax strategy that could have saved one solopreneur $40,000 on taxes last year.

• Entrepreneur’s Corner: This successful solopreneur shares his secret to generating exponential growth (hint: it’s not starting another business).

• Entrepreneur’s Journey: Learn how real estate investor, Chris Powers, built a company that has invested over $2.1 billion in real estate. He also shares how long it took him to start earning an income and some hard financial setbacks.

Financial Tips and Tricks 💰

S-Corp vs. LLC: How an S-Corp Might Save You On Taxes

There's been some chatter on Twitter about the benefits of creating an S-corp rather than an LLC as a solopreneur.

So how can you save money on taxes as an S-Corp?

Unlike an LLC, an S-Corp allows you to classify a portion of your income as salary and the other portion as distribution.

By lowering your salary and increasing your distributions, you can significantly reduce self-employment taxes. You will still have to pay income taxes on the distribution portions, but you won't have to pay self-employment taxes on the distribution portion.

That said, there are some downsides to an s-corp.

First, the IRS monitors s-corps closely as they know this strategy can be abused, and they may crack down if your salary is too low. Additionally, some states require S-corps to pay additional fees and taxes.

So talk to a professional before making any decisions, but it's definitely something to consider as you scale your business.

Entrepreneur’s Corner 📚

Today’s quote comes from a thread written by solopreneur, Justin Welsh

Most entrepreneurs struggle with shiny object syndrome and jump from one idea to another before any of them off of the ground. This lack of focus is probably one of the biggest challenges that prevents many solopreneurs from achieving their goals.

So instead of building many businesses and acquiring many different skills, think about leveraging just one skill to generate multiple income streams.

Justin Welsh took his one skill (building a personal brand online) and monetized it with courses, coaching, affiliate sponsorships, subscriptions, and sponsors. In fact, here's his 2022 revenue breakdown😀 

So next time you're tempted to start another business, ask yourself: Does this income stream leverage and complement my existing skill set?

Entrepreneur’s Journey 💬

Chris Powers is a serial entrepreneur with more than 18 years of real estate development and investment experience. He founded Fort Capital and to date, the company has invested over $2.1B in Class B industrial, commercial, multifamily, student housing, and land development projects throughout the state of Texas and the Sunbelt.

He’s also the host of the FORT podcast, where he and his guests have raw conversations about business and entrepreneurship.

What’s one piece of advice you have for anyone looking to start investing in real estate?

Pick a submarket in a city and get to know everything you can about that market. Specifically, you should learn:

• What properties sell for and rent for

• The best locations in that market

• Future development or growth in the area.

• The businesses in the area or businesses moving to the area.

Becoming a master of submarket will give you an edge in knowing what to invest in.

How long did it take you to start earning income or seeing profits from your first real estate investment property? 

I bought a rental property in May 2005 for myself and my roommates in college. I renovated it over the summer, and we all moved in August. I turned a 3 bed 1.5 bath into a 4 bed 2.5 bath. Rent started in August and that’s when we began making a profit.

Have you faced any significant financial setbacks or challenges in the past, and how did you overcome them?

Early on when I bought my first property, I didn’t have any money. I called around until I learned about the FHA program which allowed me to put 3.5% down on my first property (as long as it was owner occupied). This is how I overcame a financial hurdle.

Where can our readers follow you to learn more?

Twitter: @fortworthchris or on my podcast – The Fort w/ Chris Powers

What’s Happening at Carry?

Here’s what you can expect in the coming weeks

See the full list of events here. ⏰

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If you want more resources on building wealth as an solopreneur/entrepreneur, check these out:

• The Solo 401k handbook 

• What is a Solo 401k?

• How to Open a Solo 401k

• Common Solo 401k FAQs

• Solo 401k Contribution Calculator