Latest / Only Fee-Only / #80 - Demystifying Tax Planning and the Art of Social Media Engagement - Aaron Krafft

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#80 - Demystifying Tax Planning and the Art of Social Media Engagement - Aaron Krafft · Only Fee-Only

• 0:05
  Speaker 1: What's up everybody?
• 0:06
  Speaker 1: Welcome back to the only fee only podcast.
• 0:08
  Speaker 1: We're so glad you could be here.
• 0:10
  Speaker 1: In this episode we talked to Aaron Kraft, who you might have seen because he's absolutely been killing the illustrations and the content game on LinkedIn.
• 0:21
  Speaker 1: You might have also seen his brother, andy Kraft, who was on the podcast before, but today we are talking all about Aaron, who is the CPA.
• 0:30
  Speaker 1: He manages the CPA portion of luminary wealth management and this was absolutely a fantastic conversation.
• 0:38
  Speaker 1: We got into all kinds of things from you know, managing taxes for entrepreneurs, things that people think about, some of the common misconceptions that business owners have about what they can do, what they can't do and, overall, how he fits into the overall mold of the fee only financial planning practice that is Luminary wealth.
• 1:00
  Speaker 1: So, without further ado, check out this episode with Aaron Kraft on the only fee only podcast.
• 1:10
  Speaker 2: What's up everyone.
• 1:11
  Speaker 2: Welcome to another episode of the only fee only podcast.
• 1:14
  Speaker 2: I'm Peter Travelo.
• 1:16
  Speaker 2: I'm here at my co-host, brock buckles.
• 1:18
  Speaker 1: How's it going today, brock doing well, man, good to be here with you.
• 1:22
  Speaker 2: Love it, man.
• 1:23
  Speaker 2: And today we have the other half of luminary on.
• 1:26
  Speaker 2: Really excited to have Aaron Kraft on from luminary, really looking forward to sharing his background Along with how he got into business with his brother.
• 1:39
  Speaker 2: You're one of the few Pairs or brothers that we know that are in the business.
• 1:45
  Speaker 2: You know, just off the top of my head, I mean, I know it's you guys always come to mind and then the zizzy brothers that are out of the Pittsburgh area.
• 1:53
  Speaker 2: But welcome to the show man.
• 1:55
  Speaker 3: Yeah, yeah, thank you very much.
• 1:56
  Speaker 3: Thanks for having me on.
• 1:57
  Speaker 3: We get mixed up a lot.
• 1:59
  Speaker 3: We're both on on LinkedIn, on Instagram, and People are like wait, like they'll see a post by one of them you know the other brother and they're like wait, didn't I just see a post by you?
• 2:11
  Speaker 3: Or like didn't you, weren't you just talking about this?
• 2:12
  Speaker 3: And it's like oh wait, there's two of you and there's only so much confusion between the two of us, or three years apart.
• 2:18
  Speaker 3: So we're not like you know Same age, but we look similar enough.
• 2:22
  Speaker 2: We sound identical to where people get pretty mixed up, so we get get some confusion in the two a's Right in the air and I have some good friends, they're Elliott and Evan but I'm sure, to an extent, you know, you guys coming together, which we'll get into, as you know, really helps grow the brand.
• 2:43
  Speaker 2: I mean I see you guys as content all day long on Twitter and LinkedIn, so we'll get into that.
• 2:50
  Speaker 2: But before we even get started, I mean just for a quick background, you want to just kind of let the listeners know, like where you're located, maybe where you went to college, and we can go from there.
• 3:00
  Speaker 3: Yeah, yeah.
• 3:01
  Speaker 3: so I CPA out of Purdue University in Indiana and Started on my lawyer like many CPAs at a big four accounting, was at Ernst Young for a couple of years and then After that I did a few years as an analyst and then the opportunity came to be to start my own CPA firm here.
• 3:23
  Speaker 3: So I transitioned into that about.
• 3:25
  Speaker 3: We're on our second year of the, the CPA firm.
• 3:28
  Speaker 3: So we're in the Indianapolis area and we do tax planning, tax preparation for Generally service-based business owners.
• 3:38
  Speaker 3: So you know, real estate professionals, content creators, a lot of people in the health and wellness space, that's kind of the the people we cater to is more like service-based businesses.
• 3:50
  Speaker 3: But tax planning, tax preparation, advisory, all that.
• 3:55
  Speaker 1: I mean, I think the coolest thing is it going back to the social media for a second is that there's twice the amount of craft posts.
• 4:03
  Speaker 3: So it gives you more exposure.
• 4:05
  Speaker 3: I love it does.
• 4:06
  Speaker 3: Yeah, yeah, we obviously we think until we start both posts and it's like you know him being an Advisor, me being in a CPA on the tax side, we have people Share referrals back and forth, so it's people that needs an advisor.
• 4:22
  Speaker 3: It's like, oh yeah, I know a guy for you.
• 4:23
  Speaker 3: Yeah, there's a lot of a shared you know Strategy there with building and it's kind of unexpected that we kind of plan it to be that way.
• 4:31
  Speaker 3: But it's been.
• 4:31
  Speaker 3: It's been a great perk to have both the posting on there.
• 4:36
  Speaker 1: I know, I know a guy and he's gonna do a good job for you, because if he doesn't, I'll see him at Thanksgiving.
• 4:42
  Speaker 3: Exactly.
• 4:45
  Speaker 1: That's awesome.
• 4:46
  Speaker 1: So obviously you had the big.
• 4:48
  Speaker 1: You had the big you said Ernst and young, right, the big kind of accounting for experience, yep.
• 4:53
  Speaker 1: So when you were at EY, obviously you probably learned some things that you appreciate now.
• 4:58
  Speaker 1: So what were some of those things that you're like?
• 5:01
  Speaker 1: Okay, although I don't want to do this forever, being at a larger company that has some structure right out of school Kind of gave me some of these perspectives.
• 5:10
  Speaker 3: Yeah, I mean that I wouldn't say there's anything like from a technical perspective.
• 5:14
  Speaker 3: That was like, oh, I died, you know I wasn't.
• 5:17
  Speaker 3: I wasn't auditing on at the accounting firm there, so I wasn't in tax.
• 5:23
  Speaker 3: Even so, it was kind of not necessarily from a technical perspective, but a lot of just high level takeaways from it.
• 5:30
  Speaker 3: One just like being able just to bunker down and work hard Because, like, as a lot of people know, when you're at that firm in public accounting you're working 80 hour weeks and it's a grind, it's a sacrifice, you're giving up a lot but you're learning a lot at the same time.
• 5:45
  Speaker 3: So I think just that aspect of just putting your head down and getting the work done, that's definitely one thing that has carried over.
• 5:52
  Speaker 3: I didn't have that 40 hour a week cushy job where you're just working nine to five, you get a nice paycheck and you move on, because it's hard to go from that to an entrepreneurship lifestyle where you are working weekends and you're working around the clock, as in those early years of the business.
• 6:11
  Speaker 3: So just that perspective I've definitely brought over.
• 6:15
  Speaker 3: And then there are various things, because we worked in a lot of different industries.
• 6:18
  Speaker 3: With public accounting you're kind of placed on various clients.
• 6:22
  Speaker 3: So I worked in pharmaceutical real estate and manufacturing we're kind of the three big clients I had.
• 6:30
  Speaker 3: So just being able to flip your brain between those different concepts like high level and really adapt and learn quickly, that's huge for foretax planning.
• 6:42
  Speaker 3: You're dealing with a real estate agent in one scenario and then a doctor in another scenario and you have completely different situations, but you can gather all of the different tax strategies that are available and apply them to each situation.
• 6:56
  Speaker 3: So I think that's a huge thing just adaptability and being able to piece together different things from different situations and applying it to one specific client.
• 7:06
  Speaker 2: So what first started your interest in taxes and accounting?
• 7:11
  Speaker 2: Did you think that you would start out at a big firm like Ernst and Young?
• 7:17
  Speaker 2: Was that the goal?
• 7:18
  Speaker 2: And then, when you were there, did it satisfy that need at the time?
• 7:23
  Speaker 2: And then, what was your transition?
• 7:25
  Speaker 2: Just from a high level career side?
• 7:27
  Speaker 2: Because you're on the younger side, we're both in our 20s, at the end of our 20s, brock's in 30.
• 7:33
  Speaker 2: And we're fortunate to be able to get over to this entrepreneurial side.
• 7:37
  Speaker 2: But you want to just elaborate on it because people they really want to glamorize being an entrepreneur.
• 7:43
  Speaker 2: But, as you've indicated already, hey, you can't just start here.
• 7:48
  Speaker 2: Yeah, I mean you can, but the likelihood of you succeeding is less.
• 7:53
  Speaker 3: Yeah, now you're definitely having the background is a huge stepping stone for this.
• 7:58
  Speaker 3: Like sure you can start just with doing your own thing right out of, I mean, in high school.
• 8:03
  Speaker 3: People are doing it now and it can be done.
• 8:05
  Speaker 3: It's definitely more challenging.
• 8:06
  Speaker 3: But I didn't have surprisingly a path planned out for what I wanted to do and, like I knew, I wanted to get core, foundational understanding of my career field in public accounting.
• 8:22
  Speaker 3: That's you, just, it's like a fire hose there.
• 8:24
  Speaker 3: You're taught a lot in those early years but, to be honest, I didn't know what I wanted to do after that.
• 8:30
  Speaker 3: I wasn't sure what my career path wanted to be.
• 8:34
  Speaker 3: I always did have this mindset of I guess not it's an entrepreneurial mindset, but I don't think I viewed it at that, like that at the time, of this idea of seeing something that's broken and wanting to fix it, wanting to create something better out of it.
• 8:48
  Speaker 3: I've always had that mindset since a kid and I don't think I tie that to like that's the entrepreneurial mindset seeing something that can be improved and creating something better and delivering it as a service.
• 8:59
  Speaker 3: So as I went through my first two jobs at EY and then as an analyst in healthcare, those are like the things that were turning in my head.
• 9:09
  Speaker 3: I always saw processes that could have been improved or things we were serving the client in a specific way that could have been improved.
• 9:16
  Speaker 3: But there are such big companies where it's like I'm just, I've been here for two, three years, like they're not going to listen to me.
• 9:24
  Speaker 2: So you know, here they're moving mountains.
• 9:27
  Speaker 3: Yeah, exactly.
• 9:27
  Speaker 3: So there was no.
• 9:29
  Speaker 3: From that perspective, there was really no growth there for me.
• 9:34
  Speaker 3: I'm sure I could climb the corporate ladder and you know, if you do things according to the rulebook, it's like you're going to, you're going to climb the ladder, you're going to make good money, it's going to be, it's going to be a good career for you.
• 9:44
  Speaker 3: But I wanted to do something where I could use kind of the creativity that I have and making something that I think is broken and building it to be better.
• 9:53
  Speaker 3: So this building the CPA firm is something that kind of fell into my lap that I was not expecting.
• 10:00
  Speaker 3: So, as you guys have mentioned, my brother is a financial advisor.
• 10:06
  Speaker 3: So a little background here is that my dad owns a financial advisory firm.
• 10:10
  Speaker 3: My brother works together with him there and I was not a part of that at all.
• 10:15
  Speaker 3: But they were wanting to add on like a CPA component and add on tax advisory and tax playing services for their clients there, which is a lot of advisors have started doing this and they had an individual or a connection who was doing this sort of as a side project for them and it was a luminary.
• 10:36
  Speaker 3: Cpa is what he created a more of a smaller, you know side tax practice that was growing and the individual who was running at the time just didn't have the capacity to continue growing it.
• 10:49
  Speaker 3: So that's where kind of it came into.
• 10:52
  Speaker 3: My lap is like I was given this opportunity.
• 10:54
  Speaker 3: Hey, there's a very small tax practice here that has the opportunity to be built and, as somebody who has that mindset of wanting to create something and make it better, it was the perfect opportunity for that, especially given my background as a CPA having some experience with taxation.
• 11:12
  Speaker 3: So that fell into my lap about two years ago and the first few months were just evaluating what the current business model was and making it more modernized.
• 11:23
  Speaker 3: I guess it was a more traditional CPA firm where things are.
• 11:26
  Speaker 3: It's your face-to-face meetings you're signing with a physical pen and paper, handing off shoeboxes of tax return, of tax documents.
• 11:36
  Speaker 3: So it's kind of the old school way of operating a CPA firm and somebody who's much more tech driven.
• 11:44
  Speaker 3: I knew there were ways to improve that experience from a client's perspective and from our perspective as the owners of the firm, and so I spent about three months or so just basically creating the processes, creating what the workflows look like, creating what the client deliverables were going to look like, and so last tax season was officially the first full tax season that I was operating the CPA firm and it was a really great experience.
• 12:14
  Speaker 3: It went as well as a first year of tax can go.
• 12:18
  Speaker 3: It was fairly smooth in the grand scheme of things.
• 12:21
  Speaker 3: I'm really excited.
• 12:22
  Speaker 3: It's tax season's kicking off here in a couple of days actually, so really excited to get back into that and start a second year of it.
• 12:32
  Speaker 1: I mean, I'm just like picturing your dad and your brother in a conference room together.
• 12:37
  Speaker 1: Like listen, this advisory business, we don't have the capacity, it must be a craft.
• 12:42
  Speaker 1: And then they call you and you're like Aaron, to the rescue.
• 12:46
  Speaker 3: I am yeah.
• 12:48
  Speaker 1: No, that's cool man.
• 12:49
  Speaker 1: Yeah, it's been really interesting to kind of see what the dynamic is of you guys and how you guys kind of play off of each other.
• 12:56
  Speaker 1: What do you feel like?
• 12:57
  Speaker 1: Because I think people that know you both will find this interesting.
• 12:59
  Speaker 1: What is the difference between?
• 13:01
  Speaker 1: I'm curious myself.
• 13:02
  Speaker 1: Obviously you guys both make phenomenal content.
• 13:05
  Speaker 1: I'm always looking forward to seeing you guys post.
• 13:07
  Speaker 1: But what are some of the differences between Aaron and your brother?
• 13:12
  Speaker 3: Yeah, yeah, I don't know, it probably doesn't show through as much in our content, but I think our Andy brings maybe this comes out a little bit from time to time but a humorous side to himself that is much different.
• 13:27
  Speaker 3: I think we're both have a kind of a quirky, humorous side to us that people don't really see on social media.
• 13:34
  Speaker 3: But he's a character off screen.
• 13:38
  Speaker 3: He's a lot of fun to be around.
• 13:40
  Speaker 3: I think he brings aside, I guess, lightheartedness and fun to the room when all of our family is around.
• 13:49
  Speaker 3: Again, I don't think that really probably shows through in his content.
• 13:53
  Speaker 3: I think probably both of us are a little bit more serious on screen, which, as most people are, it's a professional setting.
• 14:00
  Speaker 3: But yeah, now he's a lot of fun and it's been such a fun time to really build a business together.
• 14:07
  Speaker 3: That's something we never imagined doing, kind of growing up through college.
• 14:11
  Speaker 3: We both worked at Ernest and Young.
• 14:13
  Speaker 3: Actually we just never thought that this is where the path would lead us to.
• 14:18
  Speaker 3: It's always so crazy to look back just like three years ago, and see where your life was, where you thought it was going to be and where it actually is today.
• 14:26
  Speaker 3: It's been really fun the past two years building with him and excited to continue doing that.
• 14:34
  Speaker 2: He's humor does show a little bit on those Tik Tok reaction videos.
• 14:38
  Speaker 3: I will say I do watch them.
• 14:40
  Speaker 2: And it's pretty funny when he's just sitting there staring into the screen like, okay, chump.
• 14:45
  Speaker 3: Like let's keep it alive and warm, yeah.
• 14:50
  Speaker 1: It'll be like a not true, and then he'll go into a spiel about like well, I'm like yes dude, because that's where the worst thing is the misinformation on Tik Tok man.
• 15:03
  Speaker 3: I know I joke that I need to charge clients a fee if they come to me and say hey, I sell us some social media.
• 15:08
  Speaker 3: I need a surcharge to those people, tik.
• 15:11
  Speaker 2: Tok.
• 15:13
  Speaker 3: I say that as a joke, but there are so many questions I get from Tik Tok videos and just I think the expectations of people's tax savings are so overblown by social media so they'll come to me with a tax strategy and think it's going to save them $20,000 and it saves them $200 and they're disappointed.
• 15:33
  Speaker 3: It's like well, you're watching stuff that's way overblown on social media.
• 15:36
  Speaker 3: It's only a part of the pie and it's been kind of.
• 15:40
  Speaker 3: That's probably been my biggest frustration with all of this over the past two years is trying to navigate those waters and all the crazy things you see on social media.
• 15:50
  Speaker 2: Yeah, yeah.
• 15:51
  Speaker 2: So let's like just dive into a couple like high-level points like that, like what you're seeing from you know Peers, even young business owners, right like our age, right that they've.
• 16:03
  Speaker 2: You know, you might see a little bit of early success.
• 16:05
  Speaker 2: You might be getting a little cocky.
• 16:07
  Speaker 2: You're making some money.
• 16:08
  Speaker 2: You don't need someone to tell you what to do.
• 16:11
  Speaker 2: Right, you're successful in your own business.
• 16:13
  Speaker 2: Right, you can ride off a car because you heard it somewhere.
• 16:16
  Speaker 2: You know you should be buying Rentals and doing short-term rentals and do all these different LLCs and not the da, da, da.
• 16:24
  Speaker 2: You know like what are some of these common things they hear over and over.
• 16:28
  Speaker 2: That's like a broken record and like it's just not true.
• 16:31
  Speaker 2: I mean, they're just lies.
• 16:33
  Speaker 3: Yeah, you know.
• 16:34
  Speaker 3: Well, I think a lot of the problem is that you, we see these things on social media and we, we do think, just because you've, you've see it, you know, I mean, with the algorithm You're showing the same thing over and over, more or less.
• 16:44
  Speaker 3: So you think everybody's doing these things, but in reality it's like very few people are, especially the people who are actually you know why is and know what they're doing, probably aren't doing these things.
• 16:54
  Speaker 3: But the ones that come to mind and they're not all wrong Like they when you, when you lay it out with all of the facts, it their legit strategies and and they are great in certain situations Like that, the few that come to mind is the Augusta rule, where you rent your home to yourself as a business owner.
• 17:13
  Speaker 3: Hiring your kids is one that frequently comes to mind, because there's a tax that if you, if you're a parent of a Either a partnership or a sole proprietorship, you hire your child who's under 18, the business gets a tax deduction, the child gets a tax deduction up to the standard deduction, plus they are exempt from payroll taxes.
• 17:31
  Speaker 3: So it's, it is a great strategy In certain scenarios.
• 17:35
  Speaker 3: I'm trying to think of another one.
• 17:38
  Speaker 3: Oh, you're the cars, right?
• 17:41
  Speaker 2: off car.
• 17:41
  Speaker 3: G wagon, right after G wagon.
• 17:43
  Speaker 3: The short-term rental loophole just buy, you know, every year buy a new rental property and you'll be rich by the time you're, you know, in 10 years from now.
• 17:50
  Speaker 3: And just these are unrealistic in the grand scheme of things and they don't necessarily apply to certain people and the the one thing I just did a post on this, the yesterday or the day before about.
• 18:01
  Speaker 3: When it comes to tax strategies and this doesn't you know I'm kind of talking down my industry because it is a lot of people will do things with the tax specific, the tax savings in mind, instead of doing like what's your, what's your ultimate outcome.
• 18:16
  Speaker 3: Like tax savings is Secondary, I guess, much as I hate to say that because that's my job is to help people with taxes, but that really is like secondary to being in a business owner, like as a business owner.
• 18:27
  Speaker 3: Step one is to like okay, what's what is my goal?
• 18:29
  Speaker 3: Like, what do I want to achieve and what's the best way I can I can get my job done and what's the best way I can I can get there.
• 18:36
  Speaker 3: Taxes are secondary to that and a lot of people will put taxes above that and the phrase we use is don't don't let the tax tail wag the dog.
• 18:45
  Speaker 3: And I see this all the time like especially just December, as the tax year is coming to an end.
• 18:52
  Speaker 3: I had a lot of clients kind of a saying hey, I'm, it looks like I'm gonna be in a lot of taxes.
• 18:55
  Speaker 3: It's like, yeah, you, you are gonna know a lot of taxes.
• 18:57
  Speaker 3: Well, how do I, how do I pay less?
• 18:59
  Speaker 3: It's like we, we have implemented all the strategies we can to this point.
• 19:03
  Speaker 3: So, aside from spending a bunch of money, you're gonna just those are the taxes you're gonna and like, some people will spend the money to pay less taxes, and it's that's like the whole purpose of a business expense is to grow the business.
• 19:17
  Speaker 3: Once you start spending money to Save money quote, unquote say that you're not actually saving.
• 19:22
  Speaker 3: That's when things, that's when things go bad.
• 19:25
  Speaker 1: So a dangerous cycle man.
• 19:28
  Speaker 2: Well, taxes deal a lot with people's morals too.
• 19:31
  Speaker 2: You know, like there, I'm sure there might be some people who come in the door and you guys just miss a line and you're like yo, that's all good till there's an audit.
• 19:39
  Speaker 2: No right so you might have to turn clients away, right, I'm sure it might have happened a couple of times.
• 19:45
  Speaker 2: You're like, hey, we just don't align on these values, taxes or taxes you got to pay him.
• 19:51
  Speaker 2: You know you can't be avoiding them.
• 19:53
  Speaker 2: You know, and today is estimated tax day, right for quarterly, um, so I'm sure you're a busy last week, you know, knocking people over the head if it's not automatically set up yet, you get stuff taken care of.
• 20:06
  Speaker 2: So like as a service, like working with young business owners and accounting, like you're doing bookkeeping, tax prep, filing the whole nine yards right.
• 20:15
  Speaker 2: So like how big is just?
• 20:18
  Speaker 2: Like Accountability, like in the sense of like helping your clients actually get this stuff set up.
• 20:24
  Speaker 2: You know, like where do you really find most of your value and like what your clients are looking for.
• 21:03
  Speaker 3: Yeah, I think it's a little bit different for everybody.
• 21:06
  Speaker 3: People who you know do that need the bookkeeping, or people just want the tax strategies.
• 21:11
  Speaker 3: But All in all, like I try to, the whole goal of the service I offer to clients is for them to not have to think about taxes, just add off throughout the year.
• 21:21
  Speaker 3: Ideally it's it's off their mind, it's out of sight, out of mind, but they still know that they're getting Everything is being taken advantage of that they can every tax Production, every tax credit that they can take advantage of.
• 21:33
  Speaker 3: They are, but it's I want that stress to be out of, out of their minds and on my mind instead.
• 21:39
  Speaker 3: So that's really, I guess, from an accountability perspective, is like we don't want them to think about, like I mean, we want they have the freedom to reach out if something arises, if they have a question.
• 21:50
  Speaker 3: It's like we don't want them to have to think about it.
• 21:52
  Speaker 3: Ask us if you have a question, we'll take care of it.
• 21:55
  Speaker 3: We'll analyze the situation, see what the best path forward is.
• 22:00
  Speaker 3: So Same thing with, like you know, when they do owe taxes, quarterly taxes will send them out reminders for that.
• 22:07
  Speaker 3: Get them.
• 22:08
  Speaker 3: You can.
• 22:09
  Speaker 3: You can't schedule those out, which we recommend people do.
• 22:12
  Speaker 3: That way.
• 22:12
  Speaker 3: It is off of your mind.
• 22:13
  Speaker 3: You're not thinking about having to make that manual payment, scheduling those out, and then you With our tax plan we do.
• 22:20
  Speaker 3: We do like two tax plans a year, so we'll do an initial tax plan generally after tax preparations wrapped up in, and the springtime usually late April, mid-may is when we do like our first tax plans and then November, december to do our finishing touches as things have changed throughout the year.
• 22:40
  Speaker 3: But all in all, we just want things to be off off the client's mind, not have to think about it, not stress about it, and Us to take care of everything for them from a tax perspective.
• 22:51
  Speaker 1: I love that man because you can tell by the way you're talking about it that you've brought some serious Creativity, which is not usually a word associated with accountant.
• 23:01
  Speaker 1: So congratulations To, to luminary and what's going on there?
• 23:06
  Speaker 1: Have you guys, as kind of affirm your dad and obviously Andy, being the person that he is and building the business Been able to kind of bounce ideas off of each other to be able to implement any other side of the business?
• 23:17
  Speaker 1: She's like Andy.
• 23:18
  Speaker 1: What are you talking about, dude?
• 23:19
  Speaker 1: It's called Calendly, just happy we'll sign up for a meeting through it.
• 23:22
  Speaker 1: Has there been moments like that for you guys?
• 23:25
  Speaker 1: Or you guys kind of get to work and In conjunction with one another?
• 23:30
  Speaker 3: Yeah, yeah, I think there's.
• 23:31
  Speaker 3: I think there's actually pros and cons to that, because we definitely I mean, every time this is kind of the downside to every time we are all together, it's like talk kind of immediately goes to business, to work, which is it just great, something that we can have that, but at the same time it's like it's nice to step away from it.
• 23:45
  Speaker 3: But yeah, all the time we're always talking about different, different ways to improve our practices, different tools we're using.
• 23:54
  Speaker 3: You know, obviously different like social media strategies, all of that always bouncing off of each other, comparing notes, so that I mean that's a huge, huge perk to have, because, especially as you're starting it's, you have so many questions and just on the basics of how to start a firm, how to run a firm, manage a firm efficiently, and it's nice to have peers in the industry who you can ask those quick questions to.
• 24:19
  Speaker 3: So, fortunately, we've had each other with that.
• 24:22
  Speaker 3: I mean obviously among other professionals too in the industry, but having your own family in that situation is has been really helpful.
• 24:30
  Speaker 3: Yeah for sure.
• 24:32
  Speaker 1: Yeah, I, I could see you guys again at the Thanksgiving table and everybody that's not in luminary.
• 24:36
  Speaker 1: Maybe some of you guys are like Snowball effect go ahead.
• 24:45
  Speaker 1: Yeah definitely.
• 24:46
  Speaker 2: Yeah.
• 24:47
  Speaker 2: So I mean like with the business and everything, and you're two years in now.
• 24:52
  Speaker 2: You know we hear a lot of Other RIAs.
• 24:57
  Speaker 2: You know who are fee only, who you know they have thought or they're thinking of Bringing on accounting services to their business.
• 25:05
  Speaker 2: You know, knowing what you know now, and like your function within the business, like what are some things that you just have to keep in mind, and you know, like how many of the financial planning Clients end up coming over to the tax prep side, right, like a lot of people they want to run the numbers and they're like, okay, well, we think we can get a third of these people to start using us.
• 25:26
  Speaker 1: You know like what are some of the.
• 25:28
  Speaker 2: You know just from your experience what you've seen like just at a high level, like what would you say to people?
• 25:34
  Speaker 3: Yeah, that's a good question.
• 25:35
  Speaker 3: I think it totally depends on the advisory firm because From our experience of what I've seen, other RIAs how a different just threshold of the kind of the service they provide.
• 25:46
  Speaker 3: Some do include like full-on tax planning in their services.
• 25:50
  Speaker 3: Others Others do push their clients to use a CPA and aren't doing as much hands-on tax playing.
• 25:56
  Speaker 3: So I think I've noticed a difference in that the people who do full-on tax playing the advisors who do more comprehensive tax planning, I think are less.
• 26:05
  Speaker 3: Maybe I mean I guess it'd be helpful to outsource it from a time perspective, but they don't necessarily Less of a need to have that expertise if they have it themselves.
• 26:15
  Speaker 3: Like Andy, andy's also a CPA, so he does have that tax background as a well.
• 26:21
  Speaker 3: So he is.
• 26:23
  Speaker 3: He's in a good position where he is able to do tax strategy for his clients as well.
• 26:27
  Speaker 3: It helps that I'm there because it takes stuff off of his plate so he can do stuff that he is more attuned to.
• 26:35
  Speaker 3: But I think it depends on just on the background of the advisor.
• 26:38
  Speaker 3: If they're an advisor without any tax experience, then Having a dedicated CPA in-house could be an excellent idea if your firm is big enough.
• 26:49
  Speaker 3: I think that kind of the stepping stone we see is that the ones who have a smaller our RIA, where it's wouldn't necessarily be cost-effective to do it in-house, they just partner with a CPA firm or they have a network of CPAs where they know maybe four or five different CPAs who are experienced in different areas and they have a partnership with them in an informal partnership where they know that this is a trusted CPA.
• 27:13
  Speaker 3: They have, let's say, someone with 10 rental properties.
• 27:17
  Speaker 3: They know the CPA is attuned in rentals so they send them there.
• 27:21
  Speaker 3: So I think, early on, just having having a network of CPAs is is huge, it's very important.
• 27:28
  Speaker 3: I think a network with all professionals at lawyers, cpas, anything like any other professional designation that you need to know your clients need going to need to work with.
• 27:38
  Speaker 3: I think for a financial planner to have that network built out is is very important.
• 27:43
  Speaker 3: And then as you grow, as you are more Significant RIA where you have additional resources and you can bring it in-house and it's not going to cost you or it's not going to hurt you financially.
• 27:55
  Speaker 3: I we've seen successful situations of that where it works very well.
• 28:00
  Speaker 3: So Totally depends on the size of situation, but I think generally it's a stepping stone from having a network of people to eventually bring it in-house.
• 28:10
  Speaker 1: Yeah.
• 28:13
  Speaker 2: Yeah, points for marketing, you know, and being two years in, like, what have you seen?
• 28:20
  Speaker 2: That's working, what's not?
• 28:21
  Speaker 2: Like have you seen real traction yet on your videos?
• 28:24
  Speaker 2: You know, I mean, if like is there, like the wave has it come yet?
• 28:28
  Speaker 2: You know, because it does take a while to build an audience and for people to start knowing, liking and trusting you.
• 28:35
  Speaker 3: Yeah, no, it definitely takes time.
• 28:37
  Speaker 3: It's.
• 28:37
  Speaker 3: It's definitely a long game with social media and I don't particularly love being on social media all day, but it's hard to not be when that's kind of your work now.
• 28:48
  Speaker 3: But I started.
• 28:51
  Speaker 3: thank you appreciate it.
• 28:52
  Speaker 3: You're welcome.
• 28:54
  Speaker 3: I started consistently.
• 28:56
  Speaker 3: I was posting here and there for a while, but obviously you need to be pretty consistent for it to have any type of traction.
• 29:02
  Speaker 3: So I started May of this past year, of 2023, on LinkedIn and then a couple of months later I started on Instagram.
• 29:10
  Speaker 3: So definitely seen traction on both of those platforms not blowing up by any means, but lots of referrals do come through there.
• 29:21
  Speaker 3: I'd say more than half of our prospects come from social media now, which beforehand it was mainly my mainly referrals is how they all came in.
• 29:31
  Speaker 3: Now I'd say 60% from social media.
• 29:34
  Speaker 3: The other 40% is probably from referrals.
• 29:37
  Speaker 3: At this point, so just being consistent with that and it's a lot of trial and error and still lots of trial and error to this day, it's going to.
• 29:49
  Speaker 3: I think that's the picture for a lot of people figuring out what works, what doesn't work, what do you actually enjoy doing.
• 29:54
  Speaker 3: I think that's one big component of this being in the long game, maybe you find something that works well, but you just hate the process.
• 30:04
  Speaker 3: On Instagram, I've noticed reaction videos.
• 30:06
  Speaker 3: They do do very well, especially on TikTok and Instagram.
• 30:09
  Speaker 3: Those are reaction videos.
• 30:11
  Speaker 3: They get a lot of views.
• 30:12
  Speaker 3: I don't particularly love doing those, more than there's some other types of content I prefer doing over those.
• 30:19
  Speaker 3: So I do sprinkle those in, but I don't want, just because that gets views or that takes off, I don't want that to be my thing because I don't enjoy it.
• 30:29
  Speaker 3: This is going to be something I'm going to be doing for the next foreseeable future, so kind of trying to balance what does well, what brings people in the door, what provides value to others and what do I actually enjoy doing.
• 30:41
  Speaker 3: I think it's kind of a balancing act of all of those things.
• 30:46
  Speaker 1: Yeah, no doubt, man.
• 30:47
  Speaker 1: I mean, it's in any business, and especially in the beginning you're like where do I even start?
• 30:51
  Speaker 1: How do I spend my day, what do I do with my time, and how many is it?
• 30:55
  Speaker 1: You, your dad and your brother?
• 30:56
  Speaker 1: Do you guys have any admin or any kind of assistance or people in different parts of the business, or is it you three right now?
• 31:04
  Speaker 3: Yeah, so at Luminary CPA during busy season we have an admin and then they have some outsourced administrative work at the other side.
• 31:14
  Speaker 3: So you're here and there.
• 31:17
  Speaker 1: Where do you I mean, where do you guys see it going?
• 31:19
  Speaker 1: Or have you talked about it?
• 31:20
  Speaker 1: If you can talk about it, don't feel like you're just closing the family business here, but have you thought about it?
• 31:26
  Speaker 1: Like here's kind of the direction I think we want to be.
• 31:28
  Speaker 1: If we're talking about kind of five, 10 years down the road, you know, is it kind of grow it out and get more boutique, that six to 12 employees?
• 31:37
  Speaker 1: Is it luminaries going nationwide?
• 31:39
  Speaker 1: Baby, we're going to the moon.
• 31:41
  Speaker 1: Or is it like we really like our lifestyles where we're at, how we feel about everything?
• 31:44
  Speaker 1: We're gonna stay right here.
• 31:46
  Speaker 3: Yeah, yeah, lots of talk about that, and I think it's gonna be somewhere in the middle is where we want to end up being.
• 31:54
  Speaker 3: Like Andy and I, and obviously our dad, we all value, we value family.
• 31:59
  Speaker 3: We value health and wellness, like that's.
• 32:01
  Speaker 3: We love those things.
• 32:02
  Speaker 3: We value that over work.
• 32:04
  Speaker 3: Like our family, our own health, we put that above work.
• 32:09
  Speaker 3: So when you do that though it's I mean any massive company, you see, you know the Elon Musk's, the Jeff Bezos, like they're all everything outside of work is doesn't look to be doing too great, and I think it's hard to have extreme success without giving up big parts of your life.
• 32:27
  Speaker 3: So I think you need to know, going into what are you willing to give up and what are you willing to give up, and these are areas of life we're not willing to give up our health.
• 32:35
  Speaker 3: We're not willing to give up our family, and that means the business is not gonna grow to be this nationwide thing that we're gonna sell for hundreds of millions of dollars, like that's just not realistic, sure.
• 32:45
  Speaker 3: So I think knowing kind of your values ahead of time really helps you shape what you want the business to be, but at the same time, I don't think we want it to be just this I guess lifestyle practice, if you want to use those terms of it being just us.
• 32:58
  Speaker 3: We do want to grow it.
• 32:59
  Speaker 3: We have ambitions to have it be bigger, to have more employees and to be more well known across the United States.
• 33:09
  Speaker 3: So I think that's kind of the future of where it's gonna go.
• 33:12
  Speaker 3: Obviously, we have kind of like mapped out, planned out year by year, of what we think that will actually be logistically.
• 33:19
  Speaker 3: But adding more people on is definitely in the plans.
• 33:24
  Speaker 2: Good love it, man.
• 33:25
  Speaker 2: Well, thank you so much for coming on today and sharing all your insights.
• 33:29
  Speaker 2: For those who want to follow along, maybe reach out, what's the best way that they can follow the luminary story?
• 33:37
  Speaker 3: Yeah, Andy and I are both on probably most prominent on LinkedIn and Perfect.
• 33:45
  Speaker 3: No go ahead.
• 33:48
  Speaker 3: He's great and I cut out there for a second, andy and I are both on LinkedIn, instagram, andycraft aircraft on both, and I think Andy's on TikTok as well, on YouTube.
• 33:59
  Speaker 3: I don't hang out there, I try to avoid TikTok and I don't want to go down that path.
• 34:04
  Speaker 3: But Instagram, and then our website, luminarycpailluminarywealthcom.
• 34:11
  Speaker 2: Awesome.
• 34:11
  Speaker 2: Well, Aaron, thank you so much for coming on, man, we really appreciate it.
• 34:15
  Speaker 3: Yep, thanks, peter and Brock really appreciate it.
• 34:17
  Speaker 1: Take it easy, man.
• 34:19
  Speaker 3: See ya.