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Paden Squires on Transforming Your Business Through Smart Tax Strategies on the KLP #84

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00:00:00 Matthew Kuehlhorn
So if I’m running a profitable trades company and at the end of the year I’m showing that I have high income. Therefore I want to divest some of the TAC exposure like the typical play is for a contractor.

00:00:15 Paden Squires
Go buy a new truck.

00:00:17 Matthew Kuehlhorn
Or a new tool, go buy the backhoe, put in an asset and that’s cool. That is probably. I’m testing this with you paid in like the strategy one O 1, and there’s probably strategy 203 hundred 405 hundred level.

00:00:33 Paden Squires
Oh, sure, sure. Yeah. And like that’s not a bad strategy. You know, like if there’s if there are legitimate pieces of equipment that are going to improve future profitability, great, you know, but but the issue is a lot of people buy that piece of equipment just to save money on taxes and it’s not necessarily a big boost to the business. And that’s that’s silly in my opinion.

00:00:58 Paden Squires
You know, you’re going to spend a dollar to save $0.30 in taxes. It has to be a good use of the dollar, right? You can’t just throw that dollar away to save $0.30 or I mean that. That would be a stupid myth.

00:01:10 Matthew Kuehlhorn
Welcome to the Kooler Lifestyle Podcast. I’m your host, Matt Kuehlhorn, and I’m excited to have you join me as I interview community members and business leaders from the communities in which I live, work and serve through my business, Kooler Garage Doors. We’re going to bring you highlights on characters in our communities. Why? Because community matters, and I want to know more about who is behind our business and leadership in order to understand and support the community fabric that our relationships make up.

00:01:38 Matthew Kuehlhorn
And collectively, we can build stronger communities that support our lifestyles, our youth and our health. Ladies and gentlemen, welcome to the Kooler Lifestyle Podcast. I’m your host, Matt Kuehlhorn. Today I am sitting down with a good friend, Paden Squires, who is owner, one of the owners of WR Tax Planners and he’s also a fellow king as a Mastermind affiliate with Gathering the Kings. That’s where you and I have met Paden, and I’m super excited for today’s conversation.

00:02:15 Matthew Kuehlhorn
You know, just looking in your background, you’ve got your Bachelors of Science, your MBA, all around business accounting numbers, your numbers guy.

00:02:26 Paden Squires
I am, you know, I at least that’s the track I went down. You know, if you, you actually look into some of the personality tests, maybe I’m not as detailed maybe most accounts, but I am a numbers guy like I like. The interesting thing is why I’m an accountant and and and work with numbers all the time. I’m actually more of a big picture guy. Like I like the strategy of like taxes and numbers and stuff and not actually the numbers themselves.

00:02:52 Matthew Kuehlhorn
Yeah, no, I I dig that and and I’m excited to explore some of that and extract some knowledge and information for listeners before we get into some of this around taxes and strategy, just give a little context, where did Paden grow up?

00:03:08 Paden Squires
Yeah, that’s a that’s a great question. Paden is speak to myself in the third person. I agree. I grew up rural, rural Central Missouri. So tiny, tiny little towns grew up on the Missouri River.

00:03:24 Paden Squires
Right. Right. Kind of right. You know, I’m currently currently located in Columbia, where, you know, it’s the town has the University of Missouri. So I’ve lived in the general area of Columbia the vast majority of the life.

00:03:38 Paden Squires
But yeah, I mean very rural. Like I went to, I went to a very small Catholic grade school. From there I went to a high school. I mean, I graduated with like 20-8 other people in my high school class. So very very.

00:03:53 Matthew Kuehlhorn
Rural, very small and.

00:03:55 Paden Squires
That’s that’s a lot of my background for sure.

00:03:59 Matthew Kuehlhorn
Yeah. What was what was childhood like? Or was it like freedom running through the woods? Huck Finn Kind of style adventures.

00:04:07 Paden Squires
You know, yes and no. You know, and both, both my grandparents certainly certainly had farms and you know I was out on the farms doing fishing in ponds and and different things like that and it. But you know that really never was that attractive to me, even as a young kid. You know I was really into really into sports more than than than even outdoors. But it’s it’s, yeah, running around, you know, like as a kid, you know, it’s interesting enough being being a little bit older now, which is weird to say, yeah, I I grew up a single mom household and like, she was working a lot to provide for me and my sister.

00:04:46 Paden Squires
And man, I don’t think anybody knew where I was at, what I was doing or you know, it was like I could have disappeared for days and almost maybe, no, not that my, I don’t have a good mother, but it was just like it was a little different times for sure.

00:05:02 Matthew Kuehlhorn
No, I totally get it. I mean, people reference that as latchkey, right? And and there’s some truth to that. Like I I was a latchkey kid as soon as I got into small town, Traverse City, MI. Like, I had freedom.

00:05:15 Matthew Kuehlhorn
Yeah, that was.

00:05:16 Paden Squires
That was a crazy thing. You know, we, you know, I, I grew up on a like in in a small town and grew up on the street. There was three or four guys my age right there on the street. I mean, we’d run through creeks, ride bikes around, played a whole lot of basketball and just getting in a little bit of trouble occasionally doing doing some silly stuff. But you know, it was it was kind of a safe environment to do that in though too.

00:05:40 Matthew Kuehlhorn
Yeah, yeah, it’s interesting. Time shifts and.

00:05:44 Paden Squires
Yeah, I mean, some of it makes me think now like as a parent, I’m like, man, I’d probably go to jail like if I didn’t know where my kids were, rub it off or doing something that, yeah, it’s just very different, you know? Yeah, just very different culture around that. Now I’m really in the United States.

00:06:01 Matthew Kuehlhorn
It’s interesting. All right. Well, well, track US forward. So growing up rural Missouri and you start getting into college age, how do you really land into the realm of business counting like what was the inspiration there and and what what what was the hook?

00:06:21 Paden Squires
Yeah, man, that’s that’s a that’s a great question. You know, like I’ve I’ve always been interested in money. That’s kind of always been, I don’t know, some some sort of attraction to me. So I grew, I grew up, you know, like I said earlier, in a single mom household. And while we weren’t like the poorest people in the world or destitute or what have you there, I mean it was I I definitely, it was a perception of mine as a kid, like we had certainly less than others.

00:06:49 Paden Squires
Like I said, millions of people have way worse experiences than I did. But it was still, I mean, it was still very real to me, right. So, you know, growing up, I I clearly remember a conversation of my grandma and mom having and you know, my mom was basically the sole provider and she lost her job. And I remember them clearly talking about that, having like conversations about what, you know, what’s going to happen. And it’s weirdly enough, that’s, you know, that’s one memory that’s really stuck with me.

00:07:20 Paden Squires
And I think from that out of that I I had never wanted to be poor and that kind of started my lifelong study of money and and then ultimately into business and and all the things that kind of come along with that. But it really, really comes up from my background as a kid thinking, man, I don’t want to be poor, which.

00:07:44 Matthew Kuehlhorn
You know.

00:07:45 Paden Squires
Kind of interesting. You know that that can be a that can be a really good motivator for quite a while, but then you hit a certain point where you know, maybe fear’s not the best motivator anymore.

00:07:58 Matthew Kuehlhorn
Yeah, talk about that a little bit. So that shift has happened for you.

00:08:03 Paden Squires
In a lot of ways, yeah, yeah, definitely. You know, especially in the last, I would say three or four years where, you know, my motivation has always been to I guess get money out of like scarcity, you know, trying to protect myself and and running, I guess running away, you know, it’s it was so much more of a fear base. Running away from run away from those feelings or trying to avoid those feelings. Know now and especially as you kind of climb up, you know what, you know, I’m not like the most crazy successful person in the world, but I’ve had some level of success. And as you, as you climb up, climb up, I guess those those ladder steps, you know that that fear I guess even becomes less real or even less rational, right?

00:08:48 Paden Squires
As in, you know, having that fear of poverty becomes it just becomes less real in your life. And now it’s like finding that that new motivation I, you know, wanting to run towards something, wanting to build something instead of running away from something, I think is, is is a whole lot more healthy, at least. You know, fear is a great motivator and like you should definitely use it from time to time. But like you know, using that all the time, that’s certainly a recipe for for burnout in my opinion.

00:09:23 Matthew Kuehlhorn
All right, so here’s the question. Which one’s real?

00:09:27 Paden Squires
What do you mean by that? Which? Which one’s real?

00:09:31 Matthew Kuehlhorn
What do I mean by that? So I’m I’m hearing yet and and I would agree on on both levels like we can use different things to motivate us. And I think it’s almost a level of maturity to recognize that we can actually get pulled and it’s going through our life journey and some of it is getting rid of layers of baggage if you will and that could be scarce minded thinking. And then all of a sudden we get to this point where whether the external there is really there. Like if I have a certain amount of quote UN quote success and I’ve defined it of being OK, I don’t have to be scarce anymore.

00:10:15 Matthew Kuehlhorn
Like is that really real or is that just a meaning I’m making right. And then you know for for being pulled forward or pushing away from something. I think it’s Tony Robbins that they’re probably put this in my mind as somewhere like 2 motivators. One, we’re either moving away from something or we’re moving towards something. A matter of perspective.

00:10:40 Matthew Kuehlhorn
Yeah. And it’s. So I’m just asking from your perspective now that you’ve been experienced by both, I’m hearing that you’re getting pulled forward now and I’m going to ask you what that pulling forward is in a moment. But in the past you were like moving away and and moving away from scarcity and and that might of thing like is either one real or what is real out of either.

00:11:03 Paden Squires
And if that’s that’s a that’s a big question for sure. And like you know and I totally agree like you know I think we can create almost any story we want and and and and and really take that story and believe it whether it’s I’m running away from fear or I’m running towards this thing I’m building. You know I to me I find the the running towards something I think a little more inspirational and a little more bigger than me I guess. So I I think I enjoy that a lot more than trying to want run away from my past or scarcity or or what have you. But but you’re right.

00:11:45 Paden Squires
Like what is real Like I think I think that your underlying actions are the only thing that matters how you you know, it’s like are you doing the things to get the thing done. That’s the really thing that that the only thing that actually matters for the outcomes. How you feel about it doesn’t really matter other than how it’s going to make you feel about it if that kind of makes sense. It’s like the underlying actions are really the only thing that matters for the outcomes, but trying to find a good mindset that brings you peace and and motivates you is. I think it just makes the Trinity a whole lot more palatable.

00:12:24 Paden Squires

00:12:26 Matthew Kuehlhorn
Yeah, yeah. Pleasure and pain. Running towards pleasure or running away from?

00:12:31 Paden Squires
Carrots and sticks, right? And you could jab with a stick or lading with carrots.

00:12:36 Matthew Kuehlhorn
Yeah, yeah. So what does inspire you these days? What? What are you waking up for?

00:12:43 Paden Squires
Yeah, that’s a great question. You know, I’ve, you know a lot of my career has been fairly solo or or just a couple employees where I’ve, you know, I’ve kind of grown my my different, you know my tax practice and financial practice. I’ve done that pretty in isolation or a lot in isolation. What what really motivates me now is growing A-Team and being more of a leader of a team. You know I think I convinced myself earlier in my career that I wanted to work on solo and I was better by myself and but I and I and I think that was just a lot of I don’t know insecurities or different things or I was afraid to I don’t know put myself out there I guess.

00:13:27 Paden Squires
But it it my biggest motivation now is really growing A-Team and like I’ve learned so much more about myself that I’m I’m way I’m way more productive being like a leader of the team than trying to do the work solo. I knowing my like culture index profile that helps open up eyes of like this is what you’re really good at and it’s it’s being kind of the glue of a team And yes I you know I have the ability to to lead the team and I I, you know I’ll kind of have that flexibility personality but being being the team rallier is is what I’m what I’m really good at and it’s cool to see that and I love feeding I love feeding into my team and watching them grow and you know we we have we’ve grown our business to the level where like people in my team are starting to get real opportunities to grow and you know make their lives better financially and and all kinds. So that’s that’s really cool when it starts to get a lot bigger than your scarcity mindset that you had through a lot of the journey.

00:14:35 Matthew Kuehlhorn
Yeah. Yeah, beautiful. Love that. All right, so before I hit record, I told you I’d grill you on taxes. The truth is, paid in, I don’t know a ton about taxes nor tax strategy yet to truly grill you.

00:14:50 Matthew Kuehlhorn
But let’s try to get some Nuggets out for listeners. I’m curious, like, open the conversation. What do most small business owners maybe not know, maybe not even recognize or be aware of when it comes to to taxes? Like just to put it the same context too, I’d love to dispel a little bit of a myth. Like I think taxes in and of itself could be like this loaded stigma type of word.

00:15:20 Matthew Kuehlhorn
Like it’s it’s dirty. Like we don’t like paying taxes. It’s part of the game. Let’s just look at it as part of the game. There’s strategies in the game.

00:15:30 Matthew Kuehlhorn
What do most people don’t even recognize? What’s some low hanging stuff?

00:15:35 Paden Squires
The biggest thing I would point out, and it’s it’s a real problem with the industry in general for myriad reasons. But there’s a huge difference between tax preparation and tax planning. You can have a tax preparer and then you can have a tax planner. Those are two totally different roles. The industry has so much issues because there there’s there’s not enough Cpas, there’s not enough accountants, you know, way more are retiring every year than are getting produced and things aren’t getting less complicated when it comes to regulation compliance.

00:16:14 Paden Squires
So almost every, you know, almost every firm in this country is way overloaded with compliance work and has zero time and flexibility to actually proactively plan right with our clients. The, you know, in the, when I go back to the difference between tax preparation and tax planning, tax preparation is like compliance work. Yes, you got to fill out the paperwork and give it to the Gov, but there’s there’s what value is there in that for the business owner? Yes, you’ve complied. That’s great, check the box.

00:16:44 Paden Squires
But the actual value that a good accountant can bring you is the proactive strategy of making the moves before it’s too late, right. You know, the typical experience with like an accountant is, here’s all my paperwork, we have zero conversation after I prep the taxes. You give it back to you and I tell you how much you owe. And that is like the entire experience. And people get frustrated with that because they’re looking for that proactive person.

00:17:16 Paden Squires
But you’re going that it’s just not possible in the industry. And and things got to change. The different models have to be built because that doesn’t really help people that much.

00:17:29 Matthew Kuehlhorn
Well, what’s available when we start getting into real planning? What are What are some of the benefits?

00:17:35 Paden Squires
Yeah, I mean it’s just optimizing, you know, like it’s really just optimizing your situation. You know you you you have the ability to kind of order your affairs and the most tax efficient in the way that makes the most sense for you and your business. I mean you you have the right to do that. And yeah, you know there there’s just the system is so overly complicated at this point and there’s so many pitfalls in the system. But at the same time, especially as you go up, go up the ladder of success and and and there there’s there’s so many opportunities to be able to change how you go about business to to be more efficient from a tax front.

00:18:15 Paden Squires
And now, you know, being more efficient tax front gives you more money, allows you to reinvest in your people, reinvest in your business, reinvest in your local community, accomplish whatever, you know, whatever gold you you want. And that’s that’s really the the the big thing that I kind of get excited about and helping people pull off.

00:18:36 Matthew Kuehlhorn
What I’m intuiting is that there’s more opportunity, more strategies if there’s real planning involved. And so if I’m running a profitable trades company and at the end of the year I’m showing that I have high income, therefore I want to divest some of the TAC exposure like the typical play is for a contractor go buy a new.

00:19:01 Paden Squires

00:19:03 Matthew Kuehlhorn
Or a new tool, go buy the backhoe, put in an asset and that’s cool. That is probably I’m testing this with you paid in like the strategy 101 and there’s probably Strategy 203 hundred 405 hundred.

00:19:18 Paden Squires
Level. Oh, sure, sure. Yeah. And like, that’s not a bad strategy. You know, like if there’s if there are legitimate pieces of equipment that are going to improve future profitability, great, you know, but.

00:19:33 Paden Squires
But the issue is a a lot of people buy that piece of equipment just to save money on taxes and it’s not necessarily a big boost to the business. And that’s that’s silly in my opinion. You know you’re going to spend a dollar to save $0.30 in taxes. It has to be a good use of a dollar, right? You can’t just throw that dollar away to save $0.30 or I mean that that would be a stupid myth.

00:19:56 Paden Squires
But yeah, I mean, especially as you go up the income ladder, there’s there’s always opportunities. There’s always different types of things you can do with with money to to divest it to to avoid income taxes And there’s there’s lots of different, I mean there’s millions of different ways to do that. It just kind of depends on finding the right one for your situation and and kind of for your. Where you want to put money and what what what makes the most sense and and for a lot of entrepreneurs putting their money back in their business is is the best thing for them because it’ll give them the best return on their capital. But at at at the same time you know business owners can get themselves in trouble where literally all their net worth is tied up business and and you know entrepreneurs like they’re they’re big risk takers and I love that and I love that Gene.

00:20:48 Paden Squires
But you know if you know you have a multi $1,000,000 net worth and it’s all tied up on one business and you haven’t done anything to peel some of that net worth off and maybe put it in some other great places, you’re setting yourself up where one big thing could do large damage to to your financial situation. So you know while I’m I’m big at going all in and like you know I’m you know I’m big. Like Warren Buffett says you know wait wait for a fat wait for your pitch and then swing big. I’m I’m all about that. There’s also like you can do that and still also diversify to to some degree which I think that’s a bit more optimal situation.

00:21:30 Paden Squires
I if anything just brings the risk level down a little bit in my opinion.

00:21:35 Matthew Kuehlhorn
Yeah, I I love a couple of things that you said and I’m glad you mentioned the component about you know buying a a truck or an asset, it’s the way you did, you know, spend a dollar to save $0.30, ’cause I think a lot of times from my observation and from the information I got from some of my advisors early on, it seemed more reactionary of like here’s a here’s a winning year go buy this so you don’t have to pay this. And it wasn’t incorporated in the whole strategic moves of.

00:22:11 Paden Squires
That company.

00:22:12 Matthew Kuehlhorn
And I think potentially some of the challenge there is for listeners, entrepreneurs to know their end game and it’s not just not wanting to pay taxes. It is like, how does this go into this long term game and what you’re talking about when you open up the conversation of net worth is that long game? Yeah. And I really would encourage everybody listening to, you know, identify the long net worth game and where do we ultimately want to go, ’cause that can bring in the really cool strategic moves that that you’re referencing here. Paid in.

00:22:55 Matthew Kuehlhorn
Yeah, And I think.

00:22:56 Paden Squires
Not to cut you off, Matt, but I think having that clear long term game, you just create so much less confusion for for yourself and you you have that road map of does this fit into what I’m trying to accomplish or not. You know if you haven’t thought out past this year or or whatever, right you have this big year, you may make some moves just to save money on taxes and realize that actually didn’t move you closer to whatever the heck you’re trying to accomplish here. So it’s it’s always important like you can’t ever you know we we teach a lot especially when I’m working with clients we kind of have like a pyramid and on the bottom and has all these different things of like you know what’s your asset allocation and insurance and all these different things. But like you can’t build that bottom level of the pyramid or unless you know like what is the ultimate goal right. You know Stephen Covey you know talks about beginning Stephen Covey begin with the end in mind right.

00:23:55 Paden Squires
Or 77 habits with highly effective people like which is stop running in a direction we we all want to climb the ladder real fast without realizing is maybe that’s not even the right ladder. I mean you’re running and running and realizing man I’ve gone a long ways but man that might even been shit. So it’s it’s it’s really interesting and it’s really hard to get off track. I mean it’s really easy to get off track and distracted by stuff if you really don’t have that, that North Star. And I’m I’m as guilty as ever and most entrepreneurs fall into that trap.

00:24:30 Paden Squires
You know we get all excited about the next shiny thing, but maybe that’s the complete opposite of what you actually want. Could be a great opportunity, but it’s not one of.

00:24:44 Matthew Kuehlhorn
Right, right. All right. I’ve got 22 burning questions. I’ll start putting bow ties on the conversation. When you talk about net worth building net worth, what are some of your?

00:24:58 Matthew Kuehlhorn
I don’t know if it’s.

00:24:59 Paden Squires
Safe to say like.

00:25:00 Matthew Kuehlhorn
Favorite strategies for building net worth? What are? What are some of the components that maybe just agitate some of the listeners into being like? Oh yeah, I’ve never really thought.

00:25:11 Paden Squires
About that.

00:25:11 Matthew Kuehlhorn

00:25:12 Paden Squires
And you know and.

00:25:13 Matthew Kuehlhorn
Charging on my business.

00:25:15 Paden Squires
Yeah, I mean in in it’s you know any specific type of you know strategy or whatever obviously is is very personal and you know something that you know you need to get personal advice for it. But what I would say the the the the overarching overarching concept is you know what you track and measure grows. So if you don’t know what your net worth is like and you don’t track it, that’s the number one place to begin. You need, you know, if that’s important to you and it, you know, maybe it’s not. But if it is, tracking it and measuring it in a consistent fashion, that alone is probably going to trick you into growing it.

00:26:06 Paden Squires
You know, all the things being equal, right? Because you’re going to want to see that number growing. It’s constantly in front of you, so you’ll subconsciously start making decisions to to make that number better is is what I would say.

00:26:19 Matthew Kuehlhorn
Yeah, beautiful. And I know that we’ll share your contact here in just a minute, but for folks that are listening, whether they’re wherever they’re at, how do we go about finding a tax planner? You mentioned that the system’s clogged in with compliance, and how might we sift through that and find a planner?

00:26:41 Paden Squires
You know it’s it’s extremely tough and this is a problem I’m currently trying to solve and and trying to position my firm into solving that problem and and we’re almost there we we’ve got a lot of peace in place. But it’s it you know from a from a you know a nationwide perspective it it’s man it’s really tough what you know what I would challenge people is yes you got to get your taxes done. But you know you need to look for a pro that you know proactive type of advisor or consultant for your business that one that’s well versed in in taxes that that can help you. But at the same time you won’t have to pay for that, right. Like you.

00:27:28 Paden Squires
It’s not you know if you’re used to paying a few 100 bucks for somebody to do your taxes that’s great. But don’t expect to get like great advice on top of that, right. Like you’re you’re just not you’re you’re paying for tax preparation, you’re not paying for you know this high level, high level buys. So it’s man there there’s there’s there’s some good ones out there they’re they’re they’re few and far between. But I would be looking for people speaking about tax planning and not you know look at their market and see if they’re speaking about tax planning and then see if they’ve actually done that.

00:28:02 Paden Squires
If there’s actually people that can say yes, they you know they’ve actually tax plan for me and are proactive people. So it’s just getting, it’s tough you sift through a lot of it and it they’re they’re few and far between but the good ones are the good ones are going to bring you more value than they cost. You know it’s it’s I never want to work with anybody that I can’t show you how what you paid me is some smaller percentage of what value I’ve given you, right. And that’s that’s really how I feel like that should be every economic transaction. We’re both.

00:28:38 Paden Squires
It’s a win win, right. Everybody gets more value than what they put in and that’s kind of what makes makes the world go around. But yeah, I I would be just look, look for people that are speaking about tax planning and then try to confirm that that’s what that’s what I would say.

00:28:55 Matthew Kuehlhorn
Yeah, take that. You know, that’s good, man. How do folks interested in learning from you, working with you, connecting with you, get in touch with you?

00:29:05 Paden Squires
Yeah. So I would say the best place. You know I’m I’m on a lot of social media platforms and it’s it’s really just kind of a personal personal brand page. So you just search Paden Squires PADEN Squires you’ll find me Facebook Tiktok, Instagram all those cool places recently launched the podcast behind their success and getting that up and going we’re having some cool conversations with entrepreneurs so that’s really cool and exciting. I I’m really excited about that.

00:29:34 Paden Squires
But yeah, just search for my name on the Internet. You’re going to, you’re going to find me, I’d say just follow me on something and connect. You know we really try to share a lot of this kind of good tips and practical things, especially for people that really have no idea what they’re doing. Just kind of some real tickle little steps that can start getting you, getting you in the right direction.

00:29:57 Matthew Kuehlhorn
Beautiful, man. I’m sure that listeners will be reaching out. I’m going to encourage listeners to reach out. I’m going to stay connected with you. I’m excited to learn from you and follow your journey.

00:30:07 Matthew Kuehlhorn
And man, I just appreciate you. I appreciate how you show up in in life. And thanks for this conversation.

00:30:14 Paden Squires
Absolutely mad buddy. I appreciate you, man. Getting to know you is has been awesome. You know, knowing your art and how much you care, man. It’s it’s awesome.

00:30:23 Paden Squires

00:30:26 Matthew Kuehlhorn
Yeah. Here you’re appreciate that beta. We’ll talk soon. Thanks, Matt.