127 | The $100K Mistake Your Accountant Is Letting You Make with Chris Papin

Patrick: [00:00:00] What if the biggest opportunities to grow your wealth and reduce your taxes aren’t found in what you’re doing today, but in what you’re not even aware is possible yet? Welcome back to another episode of the Vital Wealth Strategies Podcast. I’m your host, Patrick Lonergan, and today we’re diving into a conversation that has the potential to completely shift.
Patrick: How you think about strategy, structure, and long-term wealth building. I’m joined by Chris Ppen, a true triple threat advisor, a licensed attorney, CPA, and insurance producer who brings a rare forward-looking perspective to help business owners navigate complex financial landscapes. Chris combines deep technical expertise with strategic advisory, helping entrepreneurs not just stay compliant, but actually use the system to their advantage.
Patrick: In this episode, we unpacked how high level. Planning really works when you zoom out and connect the dots between tax strategy, legal structure, and risk management. Chris shares insights that most business owners never hear. But once you do, [00:01:00] you start to realize how much opportunity is sitting right in front of you.
Patrick: If you’ve ever felt like you’re working hard, but not optimizing everything available to you, this conversation is going to open some doors. And if you’re listening to this and thinking, I need more of this. I need to actually implement these strategies, I want to point you to a place where we’ve compiled exactly that.
Patrick: Head over to vital wealth.com/resource. Where we’ve built out a vault of tools, guides, and frameworks designed to help you take action on the exact strategies we’re talking about here today. Again, that’s vital wealth.com/resources. It’s one of the best ways to start turning these ideas into real results in your business.
Patrick: As always, if you find value in this episode, it would mean a lot if you took a minute to leave a review. It helps us reach more business owners who are looking for this kind of strategic guidance. Alright, let’s get into it.
Patrick: Welcome. I’m excited about today’s episode. We’ve got Chris Papin on the show, and we’re gonna dig in with Chris. He is, uh, multi-talented. Uh, he’s a CPA, he’s an attorney, [00:02:00] uh, works with entrepreneurs, uh, really helps understand a, a holistic approach with, uh, uh, with planning and tax strategy and, and all of those things.
Patrick: So, uh, Chris, thanks for for joining us here today.
Christopher C. Papin: Certainly, I appreciate the opportunity and look forward to hopefully sharing something good with the listeners.
Patrick: Yeah, this is, uh, this is gonna be exciting ’cause I, I think about the problem that, that our clients come to us with in general, and they, they have this fragmented approach. You know, their, their CPAs focused on the compliance, the attorneys, uh, focused on legal protections, uh, insurance. Advisors are, are working on, you know, something else, maybe altogether.
Patrick: And, and these things aren’t all brought together into one coordinated strategy. Uh, they’re also feeling uncertain. Uh, is there missed opportunities? Why do I have to, you know, manage all of these different pieces of the puzzle? And, uh, they’re, they’re concerned in general about, man is my, uh, ’cause so much of legal structure and tax strategy fits together.
Patrick: And, uh, [00:03:00] do I, do I have all of this? The legal structure was dictated by the tax people, you know, I could have protection holes in the, the, the mix if my. The legal team’s deciding the strategy on the, the entity structure. I could have tax holes in my, my planning. And so, uh, it’s, it’s really nice that there’s, there’s an opportunity to bring it all together.
Patrick: And then philosophically, we just feel like successful entrepreneurs shouldn’t have to piece together these, these critical financial strategies from a, a siloed approach with their advisors. So they deserve a unified. Proactive approach. So Chris, I’m excited to, to get into this conversation. I’m also looking forward to, uh, getting into, um, the 168 hours, uh, book that, uh, uh, you’re a part of and, uh, dig into that concept as well.
Patrick: But, uh, before we do any of that, can you give us a little bit of your, your background?
Christopher C. Papin: So cliff notes and we’ll expand where necessary, but, uh, grew up to two entrepreneurs and [00:04:00] my parents. Uh, father untimely passed, brother took over family business, so lived succession planning somewhere in there. Uh. Education background, you know, took me accounting first law school second. But it all boils back down to I represent small businesses and small business owners. Um, typically we’re kind of in a transactional land. Sometimes people hear attorney and think courtroom not my style. I do it right, you never go to the c.
Patrick: Yeah.
Christopher C. Papin: Um, you know, it’s one of the most expensive things that a business is, uh, experiences along
Patrick: Mm-hmm.
Christopher C. Papin: but it’s really sitting down next to folks and kind of being a board of directors member, them make decisions, um, see the different pieces.
Christopher C. Papin: And, and you said something kind of in this opening, and I’m gonna poke a little fun at it, just ’cause hopefully
Patrick: Let’s do it.
Christopher C. Papin: but you ask the question, why does the business owner have to do all the things because they own the business. It’s [00:05:00] theirs. No one else owns it. But secondarily, they should have advisors around them that are helping them brainstorm.
Christopher C. Papin: You’re spot on in that sense. They don’t have to do it all, at the end of the day, they are the stakeholder, the constituent that needs to make an informed decision and execute towards whatever the goal is. So you gotta strike the balance between the two.
Patrick: Yeah. No, I, I, I think that’s, uh, that’s fantastic and, and we’re, we’re big believers in Yes, the, the buck stops at the entrepreneur, but we’re also big believers in if you really want to grow and scale your business, you need to bring. Different who’s into your business that know how to do things versus you learning how to do it all.
Patrick: If you, if you try to do all of the work like it, there’s, there’s clearly a ceiling to, uh, your growth level there. So it’s like bring in the, the people that are uniquely skilled to, to help us get to that next level. And thinking about, you know, that that board of advisors, as you, as you call it, I think is a, is a, is a wise move.
Patrick: It’s like ultimately you can make the decision, but here’s all of the context and if [00:06:00] you need to dive deep on that, you know. Somebody like yourself can, can help, uh, give the context needed to be like, here’s why we’re doing the thing we’re doing. So, uh, yeah, this is, uh,
Christopher C. Papin: man.
Patrick: this, this is, this is really good. Um, yeah, I, I think it’s interesting.
Patrick: Uh, you know, I, my, my dad was a, a small town attorney and, uh, I actually had a full scholarship to law school. I went for a short period of time, uh, before I. Got distracted by some entrepreneurial adventures. But, um, uh, my dad was like, Hey, be mindful of the, the law that you’re practicing. Um, there’s, there’s really two camps you can fall into.
Patrick: There’s, put it together, law, you know, which is like corporate law and being a deal maker and, you know, helping with entity structure, trust structure, like making things like just run smoothly or there’s take it apart law. And this is, this is litigation, this is, uh, divorce, this is, you know, some of those other things.
Patrick: Generally you’re, you’re dealing with unhappy people through the process. And so, uh, he was [00:07:00] like, if anything, lean towards the, put it together law versus the take it apart law. And it, uh, it sounds like, uh, you’ve, you’ve decided to set yourself on that path as well, just in regards to, uh, you know, if you’re interacting with me, hopefully we never end up in a courtroom because, uh, we’re, uh, we’re on the, the happy loss side of things, so, uh,
Christopher C. Papin: In a caveat here, um, it doesn’t mean it always goes
Patrick: Right. Yep.
Christopher C. Papin: means we pre-negotiated the exit.
Patrick: Yep. One thing, one thing I learned in in law school is I can sue anybody at any time for anything. Doesn’t mean I have a legitimate case, but like, that doesn’t protect me. You know, I can still be brought into a lawsuit, uh, even if I’ve done everything, uh, properly and protected myself. So, uh, yep, that’s, uh.
Patrick: Uh, that’s good. So I’m, I’m just thinking through this, Chris, and just thinking about, you know, the, the entrepreneur that, that, that comes into your, your office and is, is looking for, uh, some of this help, like bringing it all together. Uh, do you have a, do you have a spot? You start with [00:08:00] people just going, okay, hey, here’s, here’s how we’re gonna, uh, here’s how we’re gonna start this engagement to make sure that we’re, we’re setting off on the right path.
Christopher C. Papin: So I’m gonna answer and leave a, an awkward pause on purpose. We start the end, we think about the exit and why of people kind of Hang on. Wait, don’t you start at the beginning. Well, yes, but I describe it as step zero as I have to know where we’re headed, and that’s kinda what the exit is all about.
Christopher C. Papin: Whether that’s, I’m gonna sell to. IPOs on the stock market or maybe private equity or to my junior associate, or maybe I’m never gonna sell. I’m just gonna extract business as I go and close the doors. helpful to have a perspective about the way people see the evolution of the future, and sometimes there is no evolution of the future.
Christopher C. Papin: It’s just, you know what? This is what I’m doing today. I always like to ask the question [00:09:00] and, and we’re kind of teasing in a pre-recording a little about this, but the analogy I like to use is, is Google Maps or Apple Maps, whatever it is. Um, you know, if, if Patrick goes north and Chris goes south, we will get to the same spot, but somebody’s gonna take a whole lot longer to get
Patrick: Right. Yeah.
Christopher C. Papin: And, and those are the scenarios we both need to be side by side and executing. So what do we take a detour? The blue line on the Google map is gonna reallocate us to the right direction. We’ll be shoulder to shoulder while we do it. That’s why I want to know the end first. If you’ve got perspective there, then you can start to set up the decision making process of what entity or things like that.
Christopher C. Papin: But it, it kind of starts with what is the customer’s vision. And that sometimes that’s hard to get out, but you get to help paint that picture too.
Patrick: Yeah. No, I, I love that Oftentimes people can want a, uh, they can want a tactic like, Hey, I heard this thing and let’s, let’s go, let’s, let’s, let’s do this. And, uh, uh, [00:10:00] I, I agree with you a hundred percent. We always like to take a step back and go, okay, we have an unlimited number of, of planning strategies we can, we can help people execute on, you know, there’s, there’s entity structure, there’s tax strategy, there’s investment opportunities, you know.
Patrick: It’s all this stuff. And so, uh, if we don’t step back and go, okay, where, where are we going? Like, I love your analogy with the maps, right? If we don’t get our destination plugged in, um, it’s really hard to build a plan to get there. And so it, uh, it, it makes a lot of sense to step back and go, okay, yep, I, I see the path we’re on, and, um, this is, this is gonna be the best way to, to get there.
Patrick: This is. Uh, this is great. Um, I, I really like the, the idea of thinking about the end in mind and whether that’s selling the business, transitioning the business to the next generation, uh, whether that’s in my family or next generation of leaders in the company. Uh, I think that that’s, um, uh, that’s, that’s fantastic.
Patrick: And, and one thing that we’ve, we’ve heard, and I think this is gonna, uh, be a good part of this conversation, is. [00:11:00] Whether you’re selling the business or not, like your, your financial infrastructure should be positioned, uh, like you are selling it. It’s, it’s just gonna extract maximum value out of the company.
Patrick: Right. And, and you know, because you’re, you’re gonna run it cleanly, efficiently. You’re gonna be able to look at your financials and go, ’cause that, that’s one thing we see with our clients that are exiting. Good, clean financials are so important, you know, if the, the prospective buyer’s looking at those and they’re, they’re murky and they can’t tell what, you know, like what’s going on with add backs and all this other stuff that’s, that’s going on on in there.
Patrick: It, um, it’s, it’s challenging. And so, um, can you talk a little bit about just customer financials and, you know, how important putting together a, a clean. Um, I don’t know, p and l balance sheet is for, uh, potentially exiting at, at some point in the future.
Christopher C. Papin: Yeah, it’s. For me, it kind of breaks down into three or four categories and I’m, I’m not grouping things [00:12:00] in like a, a accounting standards book engagement letter or anything like that. I’m just gonna
Patrick: I.
Christopher C. Papin: client side stuff for a minute. CPAs have to get it into that other format. But clients look through, I think, initially as I’m gonna call it maintenance work.
Christopher C. Papin: So whether it’s filing a tax return or doing monthly books or payroll or perhaps, you know, annual entity filings with the state, it’s, it’s stuff I have to do that regulations make me do. And it’s a cost that we try to minimize. So the, the mental starts there and trust me, I understand it. I’ve been in that position too.
Christopher C. Papin: I need to minimize my cost to get started. Give me the thing that gives me enough information so that I can execute forward. Unfortunately, in that grouping, I think there’s two groups of people. There’s some that will do it at least at a minimum standard, so they kind of have some information to go forward, and then you got these people that do it [00:13:00] after the fact and this after the fact game. Uh, candidly is, is guessing. You know, you think you know what went on based on the checking account, but that’s not accounting. So that’s your minimum, and you really need to stay out of that after the fact stuff because it’s actually more costly at the end by the time you factor in taxes and some other things that can play a role. You know, my sarcasm to clients says, last year you paid your accountant $140,000, and they’re like, no, I didn’t. I paid ’em 10. Like, yeah, but you paid 130 in extra tax that you should have.
Patrick: Yeah.
Christopher C. Papin: Oh, we don’t think of it in those terms.
Patrick: Yep.
Christopher C. Papin: What I try to get people to is this medium level place that gives you good enough financials that if a potential suitor
Patrick: Yep.
Christopher C. Papin: or auditor
Patrick: Yeah.
Christopher C. Papin: looked at you, we want an audit proof set
Patrick: Mm-hmm.
Christopher C. Papin: is maybe not, you know, March 26th, three time, within a reasonable window, 30, 45 days, real time, [00:14:00] pretty
Patrick: Yep. Yeah. Yeah.
Christopher C. Papin: Then you can get to higher level, which are. Usually more, uh, prescriptive in nature. You’re watching financial trends. I deployed a strategy. My cashflow resulted in 90 days as a plus or a minus. Because of that strategy, each of these groupings of, of types of accounting have a cost to them. Obviously the more touches, the more cost. But if you’re informed and the the best business owners that I work with use these indicators, think medicine, they know a certain number of visits in a day are going to yield a rough amount of revenue. That’s not a hard metric to track If you have the basics in place,
Patrick: Yeah. Yeah. And I think,
Christopher C. Papin: owners
Patrick: sorry.
Christopher C. Papin: flounder have that.
Christopher C. Papin: They just don’t.
Patrick: yeah, yeah. And I think you’re, you’re, you’re pointing out a really important [00:15:00] point and it’s, uh. The, the story is your, your financials need to mature as your business matures, right? And, and we need to start off with a baseline level of, um, and the best time to start it is when you get started, uh, you know, we, we, we preach good financials.
Patrick: We’re constantly trying to help our, our clients get clearer, cleaner data that they can. Uh, access some, some come with very sophisticated levels of, um, you know, financial insight. Others, uh, we’ve seen them evolve as time goes on. Others are really messy. You know, they, they’ve, you know, step one of a business we need to not forget this is go generate some revenue.
Patrick: Go, make, go, go sell something. Go, go bring some money in the door. Um, and then step two is figure out how to optimize that revenue, right? So we, we can put money to the bottom line in the form of profit. And, uh, uh, early on, we don’t, we don’t have much, uh, you know, we don’t have a ton of employees. We don’t, we, it’s pretty easy to, to [00:16:00] keep track of, but as, as the, the organization starts to grow, uh, the, the more complex our, our financial infrastructure needs to become.
Patrick: And I, I think that needs to happen for two reasons, like a. I, I love what you’re talking about on the, the forecasting piece. Like, Hey, we’re gonna, we’re gonna make this investment and we think this is what it’s going to look like, uh, or we’re gonna make these hires and this is what we, you know, we think our, our financials are gonna look like for the next 12 months based on those hires and our growth trends.
Patrick: And then you can, you can start to measure off of those, oh, hey, we’re not quite on target. We should maybe adjust our next hire. You know, let’s push it out. Or we need to make it sooner because we’re ahead of target. Um, uh, all of those things I think are good. So. What’s that? Sorry.
Christopher C. Papin: I don’t mean to interrupt,
Patrick: Yep.
Christopher C. Papin: you need to change the
Patrick: Yeah,
Christopher C. Papin: a lot of that stuff
Patrick: yeah,
Christopher C. Papin: is an assumption. It’s a
Patrick: absolutely.
Christopher C. Papin: You don’t know.
Patrick: Yep, yep. And, and I think there’s also something, uh, I’d like to get your perspective on, on, like, um, I’ll, I’ll give you extreme example. If I have [00:17:00] one income source, one expense item, my bottom line is very easy to see. Um, let’s say I sell one product, it, you know, I’ve got some, you know, I had it manufactured.
Patrick: And I bought it from the manufacturer and sold it. Uh, that, that’s pretty simple. But as, as time goes on and I start adding more and more employees and I have more people plugged into my financials, I maybe have somebody running my payroll for me. Um, I I, I need to start building some levels of security around my, my financials.
Patrick: It’s actually shocking to see I’ve had, um. Close experience with friends that, uh, people that have worked for them for 10, 15, 20 years have stolen, uh, high six figures, uh, from the business. Um, and they trusted these people. They considered ’em family, and, uh. Uh, I’m, I’m just thinking about safeguards that we, we need to, to put into place to make sure, uh, ’cause payroll’s actually a pretty sneaky place to like, uh, go steal money if, uh, if you know what you’re doing over there.
Patrick: And so, uh, I’m curious your perspective on what, what kind of [00:18:00] safeguards do I need as my, my business continues to grow to make sure that I’m, I’m staying away from, uh, these scenarios where, uh, somebody has access to the financials and then all of a sudden it. It becomes like easy to start siphoning off a few dollars, and then it becomes a a massive problem.
Christopher C. Papin: It’s, it’s funny for, for the listeners, I’m laughing as he is telling the story. Don’t know what the story is because I know right where he is going. I mean, any account warrant their salt sees this, there, there, there’s what’s called a fraud triangle. There’s motivation, opportunity, and, and rationalization and blah, blah, blah, blah, blah, right? Accountants live in that world of here are the things we’ve gotta do, but this is nothing more than, um, think through like face ID or text codes, multifactor authentication and, and what Patrick was alluding to with the, um, with payroll. We’ve watched scenarios where people manipulate sales numbers. So the sales numbers look like they’re generating a [00:19:00] bonus.
Christopher C. Papin: You click bonus once payroll runs, that’s legit. And because there wasn’t a gatekeeping function on the sales numbers or maybe we, we did it on sales, but we didn’t focus on collections or something along those lines. So I always look through. To me it needs to be a two step process. I, they, they would say ideally there’s three.
Christopher C. Papin: But I think small business owners, you get lost in this, larger organizations, you know, if you’ve got C-E-O-C-F-O and maybe a controller or something like that, you can achieve it, but shouldn’t just let somebody blindly run your payroll. Now, I’m sure a listener’s sitting there going, well, I know my payroll’s gonna be roughly $45,000 each pay period.
Christopher C. Papin: I saw $45,000 come out. Maybe that’s all the check you need. looked at your bank account, you saw the payroll reports. Stuff looked good enough, is what I like to call those. So be it. But I’m telling you guys, too many people see that. Start doing that. [00:20:00] Then they get busy four months later, oh yeah, I gotta check that.
Christopher C. Papin: Hmm? Why is it 47,000 this month? And in that window of four months, a thousand dollars can go each pay period. You know, that’s two, maybe three payrolls a month. you’re bleeding five, six, $7,000 for no
Patrick: Yeah, yeah, yeah. No, absolutely.
Christopher C. Papin: There has to be that check in accountability. And if you’re not the guy or girl, delegate that there, there should be somebody that’s responsible to validate what happened each
Patrick: Right. Right. And, and I think it gets even more challenging as your, let’s, let’s think of our payroll, if it’s, um, hourly employees. Like there could be, there could be huge fluctuations if everybody’s salary. Sure. I, I, I get it. Uh, but even then, you know, our organization grows to 200, 300, $500,000 payrolls.
Patrick: We’ve got people being hired and fired regularly, like. I’m not gonna notice. I might have $10,000 swings, and if that’s the case, [00:21:00] like somebody could be taking $10,000 of payroll outta the system and, uh, it, it’s gonna be hard for me to just eyeball it and, and, and look and see if that’s, uh, uh, the way it’s supposed to be.
Christopher C. Papin: Add to this thought, ’cause I’m sure somebody out there is gonna say, oh, I got an accountant. They’re paying attention to that. Explain to me how, I know how many hours your people worked.
Patrick: Mm-hmm.
Christopher C. Papin: Because in my scenario, I don’t actually go to a lot of my client’s offices. I don’t see the hourly
Patrick: Yeah.
Christopher C. Papin: don’t even know if they’re in the
Patrick: Yeah,
Christopher C. Papin: remote
Patrick: sure.
Christopher C. Papin: and then amplify that with volatility of revenue streams.
Christopher C. Papin: Sometimes clients spend money up front. Professional services do this all the time. They pay their people live, but they don’t collect for 30, 60, 90 days. there’s such a disassociation with the trends. How are we supposed to know that until after the fact? It’s hard, but that’s why you’re building these structures and expectations and partnering with people that can help you see these trends.
Patrick: Yeah, I, I think this is great. And, and [00:22:00] Chris, I just think about the work you’re doing on not just the tax and accounting, but also entity structure and how, how critical that is for, uh, again, having, having the right hand know what the left hand’s doing, I think is, is, is so, uh, so important.
Patrick: I wanna pause for a second so we can hear from you. One of the biggest goals of this podcast is to make sure we’re not just talking about what we think matters, but what you actually need help with in your business, the questions you’re asking, the challenges you’re facing, and the strategies you’re trying to figure out.
Patrick: So, if there’s something from this episode that sparked a question or there’s a topic you’ve been wanting us to break down, head over to vital strategies.com/questions and let us know. We’re actively using your input to shape future episodes and bring on the right experts to go deep into topics that are most relevant right now for you.
Patrick: We’re also answering these questions in our newsletter. Again, that’s vital strategies.com/questions. Go drop your questions there. We’d love to hear from you and possibly feature it on a future episode. [00:23:00] Wonderful.
Patrick: If it’s okay, I’d like to transition and talk about, uh, 168 hours and, and if you could give us a, an.
Patrick: You’re, you’re thinking about the book and, and what the 168 hours represents, and then, uh, I, I think this is gonna tie to this conversation nicely.
Christopher C. Papin: Yeah, so, so the book is, I mean, yeah, its in the background too. It’s up here too. But 168 hours, a startup business guide that respects your time. I built it out of experiences with clients. you haven’t put the math together yet, the 168 is a function of a week. That’s the number of hours in a week, and I’ve kind of distilled this down because we all get the same time. Everybody. best of the best and, and you’re making the most money in the world. To those that aren’t. Um, but then you break that down into basically three components inside of it, and there’s a work element, [00:24:00] there is a rest element, and then there is a family and recreation element, and everybody is gonna have different components of each of those three things. But what’s important for me is think of this like a pie chart that’s broken into thirds if you slide one because you spend two or three extra hours with family. your rest or work has to slide two. And, and that’s the way life works. Everybody does it every day. So I want it to be a realist approach inside of here and somebody that would look at this would probably look at the components and say something like, well, this looks awful lot like a business plan.
Christopher C. Papin: Well, it kind of is built on the principles of a business plan. at the end of the day, what I want people taking away is. are in control of your 168 hours. It’s your business, it’s your life, it’s your structure. you laid out the goals and objectives for whatever it is you’re trying [00:25:00] to achieve? And then if so, are you accountable to yourself and executing on the steps that get you to those objectives? So to, to say it in a quick story, but I want to generate more revenue. Okay. You want to generate more revenue? Let’s pretend we’re a dentist for a few minutes. I want to generate more revenue. So that means you probably need to see more patients or you need to do higher margin jobs. Well, every dentist I know works four days a week. A lot of those dentists, the first thing outta my mouth is like, why don’t you open up Friday morning and bring in a few of the emergency patients throughout the week that are in a hurry, or pick up the phone and say, Hey, I’ve got an opening. Can you come in?
Christopher C. Papin: Oh no, I don’t want to give away my time with my family. And that’s fine. I’m not judging that they are taking their time away from their family, but I now, I’ve locked on two things. Now we’ve gotta figure out which recipe we’re gonna tinker with. Maybe the family time is more [00:26:00] valuable than another thousand or a hundred thousand or a million a month.
Christopher C. Papin: That’s your decision to make. And that’s my point in all of this.
Patrick: Yeah. I, and I think this is so, so important, and, and I think one of the things that you’re, you’re getting to, and we, we talk a lot about this on the podcast, is if I want to grow, you just gave me a recipe for growing, right? Like, I can go, Hey, family, sorry, I’m not gonna make it home for dinner. I’m deciding I’m gonna work two more hours every day to, uh.
Patrick: Shove more money into the, the pipeline. So that that’s, that’s one way to grow. Um, that’s not scalable, right? Because eventually I don’t get to spend any time with my mu my family and I don’t get to sleep and I’ve run out of time, right? Like if, if the, if the equation is I put, put in a a, an hour to earn a dollar, like, uh, I run out of time in that, that scenario.
Patrick: My 1 68, uh, ends, I can’t, I can’t expand it to one 70. So. Um, so that, that’s, that’s one way, another way to grow, [00:27:00] and, and this is where it leads us to scaling, is leverage, right? Like, I’m gonna leverage systems, processes, people, uh, that now I can work the same amount of time and get different outputs, you know, and, and let’s use Jeff Bezos, right?
Patrick: Jeff, Jeff’s one of the, uh, wealthiest people on the planet. He’s not Elon. Wealthy. But, uh, we, we could use Elon too, but, uh, Jeff, let’s say Jeff is running amazon.com, right? And he’s, he, he may have started this way, you know, I’m, I’m firing up my website and now I sell a book. Now Jeff’s gotta go package the book up and, you know, get it to the mailbox so I can get shipped out to the person.
Patrick: There’s clearly a limit on, on how much, you know, uh, Amazon’s gonna grow if it’s, if, if it’s all left to Jeff. Uh. Doing everything from, you know, building the website to pushing the orders out to the mailbox. So, um, we, we have to start leveraging our time, our energy, our resources, and then, then we start thinking about, [00:28:00] you know, the distribution models, like the complexity on our, our leverage just continues to, to grow.
Patrick: And, and he’s figured that out and I think that’s, that’s what you’re getting to, right? Um, do you, do you wanna talk a little bit more about, you know, how, how I can grow without just spending more time, uh, in the business?
Christopher C. Papin: I, and I like the way you set this up in particular. I mean, it’s almost like you’ve thought through this before. I mean, spoiler alert, he’s done this a ton, but, um, in this, yeah, I mean, you, you identify the, the three components, um. It’s easy to equate dollars and hours. You know that math is direct, it’s super easy to manipulate, but you’re correct in the sense that, I am time limited. So you can look at systems, you can look at other personnel, you can look at other investments. Uh, what I think business owners are super curious about are how can I benefit myself? A common one that we have conversations with [00:29:00] people about is rather than paying a landlord, maybe you should pay yourself rent. You’re paying rent one way or the other, who’s gonna benefit from it? In some scenarios, the recipe makes sense to be owner, occupant and others, it doesn’t. And, and again, it’s somewhat focused on goals that clients enumerate to us, but there’s other elements that are kind of, um, for lack of better terms, time, value, and money. What a lot of people want is all the things right after they graduate from school. guess what? You don’t even have an income stream, so you have to start somewhere. And every bank I’ve ever talked to wants a down payment, which is a healthy thing. So, okay, how do I get to the down payment point? And I’m gonna tell a little bit of a story, but I think it’ll, it’ll really hit with the audience, but. I was having a conversation with, with a small business owner, uh, medical profession. He and his family had some experiences that they wanted [00:30:00] to embrace while they had young children. One of those experiences was visiting a lot of the national parks, so they were gonna buy an rv, do all the things. you know, we’re not talking about like, Hey, let me pay cash for an rv. This was the big, fancy, sexy thing that everybody wants. As we had the discussion, I mentioned loan to value, and you could just see his face like, huh? I was like, if you buy the rv, it impacts your ability to have this building that you’re trying to achieve because your loan to value is going to be distorted in the bank’s eyes. Cliff notes means if you buy the rv, you’re gonna have to put more money down on the. Building. So we did the math, and ironically the math played out however much the RV cost was, the additional down payment on the building. And his wife said something like, why would we do that? That’s sacrificing our long-term future. And then awkward pause. And they [00:31:00] recognized, we brought this up, not Chris, but it’s a, it’s a case study exactly about what you’re talking about. the systems are CRMs, sometimes the systems are money. You have to have risk and capital deployed to achieve the goals. And again, that, you know, yes, I’m self-promoting, but at the same time, folks don’t understand how these different things play, especially over a multi-year duration. your point about Amazon. You know, they were laughed at years ago because there were this online book thing, losing all the money and look at ’em now.
Patrick: Yep. Yep.
Christopher C. Papin: So they saw something different and and executed on something different than anybody else saw.
Patrick: Yep.
Christopher C. Papin: And small business owners need their own version of that. And it could simply be, I just want a rental building. That way I can sell it or let the junior in it from me and that’ll be my income stream in the future. It could be that simple. Maybe it’s more than [00:32:00] that. Maybe you want seven locations and you’re gonna sell the locations to some sort of, of group, and then you’re gonna hold those rental
Patrick: Yeah,
Christopher C. Papin: So those phases matter. And capital available is gonna impact that.
Patrick: yeah. I, I, I love this. And, and if I, if it’s okay, I’m gonna, I’m gonna take this to extreme levels, and, and I, I think it’ll be, it’ll be kind of fun. So, on, on one hand, if I. If I suck every dollar out of the business, right, it, there’s, I’m, I’m absolutely limiting my ability to grow like I am. Uh, I’m taking all the cash flow and I’m just consuming it in my lifestyle.
Patrick: Uh, I’m not redeploying any of that capital back into, uh, growing my, my net worth. I’m not. Growing the business, I’m not growing my cash flow. And that may put me in a position where I need to own and operate and run this business at the same level, uh, for the rest of my life. ’cause I have no financial future built out.
Patrick: The other side of that coin is I could. Uh, [00:33:00] I could live in a tent, right? And I could redeploy all of my capital to wealth building and, uh, grow my network tremendously. And, uh, there’s a, there’s an acronym we like, uh, called Reach, and it’s the most valuable things in life. And in the scenario I’m, I’m describing where I, I live very, very modestly and I’m, I’m redeploying all of my capital.
Patrick: Like I’m gonna have a fantastic balance sheet. It’s gonna look incredible. But what is the point of all the money, you know, is, is a question we like to ask and talk about with our clients. And the acronym REACH stands for, S for relationships, E for experiences, A for advancement and growth, CS for contribution.
Patrick: And H is our health and that’s our, our physical health, our emotional health, and our spiritual health. And so. Um, you know, to some level like, yes, wealth building is, is so important, but the thing I love about what you’re doing is you didn’t make the decision for anybody. You just said, Hey, let’s be conscious of what this decision that we make, what the impact’s going to be.
Patrick: And, and I think there is a sweet spot in the [00:34:00] middle there, right? It’s like, we need, we do need to. Utilize our dollars to enjoy life a little bit, uh, to, to spend time with the people that we care about, to, to do things that we’re interested in, to rest, uh, uh, to grow. Uh, and growth I think, happens on lots of levels.
Patrick: I think we need to bring our kids along and help them grow and people in our organization and help them grow. And so, uh, I I, I see what you’re, you’re talking about here and how it fits into that equation. And I think it’s, uh, it’s beautiful ’cause it, it gives people. Most people are just making sort of these, unfortunately, they’re, they’re, they’re decisions aren’t fully conscious, but they’re like, oh, I want this thing.
Patrick: I’m gonna go buy this thing. And it’s like, let’s step back for a second and look at the, all of the, the impact that this decision makes and make sure that we’re okay with that because we, we don’t, we don’t like unintended consequences, so we don’t like to have a plan to buy the building. And then the RV screws that up and, and maybe if we just flip the order around for 12 months, it.
Patrick: It works. You know, we buy the building and then we go get the rv. You know, it, it might be the perfect, [00:35:00] uh, strategy to get that done. So I don’t know if you have anything to add to that, but as you were just talking through this, I’m like, this is, uh, this is so good. So.
Christopher C. Papin: This, the, the reach infrastructure. I mean, I think it speaks to the reality of people’s lives and obviously we’re being much more intentional than actual life. And you know, I’m sure you guys have figured out, I like stories, I like scenarios, but all day, every day people figure out these shortcuts or these hacks or whatever it is. But then when we sit down and we, and we do some sort of financial planning, it’s so linear. And you know, I tease people all the time. I’m like, Hey, if you got young kids at home and you’re going to buy milk or formula or whatever it is, you’re gonna go buy at the grocery store one aisle is closed, I’m pretty sure you’re not just gonna go home because that one thing didn’t work. You’ll either go to another store or you’ll go a different aisle. Like you’ll figure out the objective. So recognize that sometimes finance and business is not first to nature [00:36:00] for folks. But, you know, uh, athletic analogies shine really, really, really bright here in the sense of a lot of teams lose the title before they win the title. Okay? So what, in business, you don’t have to be perfect every single time. That’s not what it’s about. gonna be failures, there are ups, there are downs. So what keep executing towards the plan and then most importantly. The plan can change. just gotta inform everybody about it. So, you know, the, the, the reality, and I go back to this, it’s, it ends up so linear, what I run into with people, real conversation this week, Chris, I don’t understand why you can’t project my 2026 tax liability. I just did based on IRS rules. I used 2025. Because I’m able to use last year’s number because your estimates are based on last year’s tax liability. Well, [00:37:00] Chris, that’s unrealistic. That’s not the amount of money we’re gonna make this year. I understand that. Show me where you provided me with 2020 six’s revenue stream. And, and this is rigidity, because there’s an estimate. Voucher. I’m supposed to predict the future about a business that you run. There’s a disconnect, this is a super close client, so I’m not this harsh with them, but the reality is in there is there’s a budgeting conversation. There’s different metrics we need to talk our way through. So what I did say was, how much money do you think you’re gonna make in 2026? Um, I’m making up revenue
Patrick: Yeah, sure, sure. Sure.
Christopher C. Papin: but let’s say it was 2 million on my projection. They told me four. I said, cool. Let’s double all your tax estimates. They about puked.
Patrick: Yeah. Yeah.
Christopher C. Papin: they understood what was going on.
Christopher C. Papin: I have to be reasonable because we can’t make it up on wishes
Patrick: Yep. Right,
Christopher C. Papin: and, and there’s [00:38:00] this reach game all about all over again because it wasn’t solely about the business. When I asked ’em to cough up the extra money, they couldn’t pay for their kids’ education. They couldn’t fund their
Patrick: right,
Christopher C. Papin: They, don’t wanna
Patrick: right.
Christopher C. Papin: I know that.
Patrick: Yep.
Christopher C. Papin: So you’ve gotta bring all of these factors together, which seems overwhelming. And the first conversation can be, it’s hard because there’s not a traditional structure
Patrick: Yeah.
Christopher C. Papin: but you start to talk it out and you start to figure out, just like you said a minute ago, Hey, I want to generate an extra thousand bucks, two hours a day a little bit of time.
Christopher C. Papin: Cool. Generate the thousand. I wanna generate a million. Two hours a day is not gonna get you there. So what’s the tool you’re gonna implement to get you there? Do that rather than the extra time. That’s simple and that’s stuff people can do. have a lot of clients in this, just so everybody hears this, right? That say, I’m happy with my business, I just want more time. Cool. Then end your day at four and take a little bit less in revenue. Who
Patrick: Yeah. Yeah.
Christopher C. Papin: [00:39:00] It’s that
Patrick: Mm-hmm. Yeah, I, I love it. And I also, I, I also think about the entrepreneur and I’m a part of what’s called Strategic Coach where. Uh, they, they encourage you to take 150 free days a year. And the thing I love about that mental exercise, ’cause let’s just, let’s just think about what that means for a second.
Patrick: And a free day is, means I am not looking at my phone. I’m not responding to an email. I’m not doing any client work. I am like resting. Okay? So it’s 365 days in the year, 150 free days. So if I just take the weekends, right? And I take both days on the weekends off, I’ve got 52 day, 52 weeks. There’s 104 days right there.
Patrick: Okay? So that leaves me with, let’s add a few holidays in there. Let’s put 10 more days of holidays in. So now I’m at 115 days of, uh, time off. Uh, so that means I have 35 more days that need to be accounted for, and I’ve already taken the weekends. That’s seven more weeks that I need to take off. [00:40:00] Okay. And you’re like, oh my gosh, I could never take that much time out of my business.
Patrick: But the thing that starts happening when you start considering this, uh, and, and I love how you’re getting people thinking about time with the 168 hours is. I now have to figure out how to apply leverage to my business. I have to figure out how to delegate. I have to start thinking about what is the absolute best use of my time, my unique ability, leaning into that and start, and start pushing off all the rest of the tasks to people that, that can handle those that are, um, you know, maybe, um.
Patrick: Aren’t able to do the thing that I’m best at that’s gonna generate the most revenue for the business. So if I decide to take off at four, uh, like right now, I’m, my daughter’s a high jumper. Uh, she’s a good high jumper. I’m her HighJump coach. I’m not the reason. She’s a good high jumper. She has like a. Uh, another coach that’s really good.
Patrick: Uh, I just kind of get her pointed in the right direction at the meets. Um, but, uh, I’m, I’m done. I, I’ve got track practice, we got track [00:41:00] meets, you know, all of those things. And so during this time of the year, it’s like our business doesn’t slow down. I just figure out how to apply leverage and make sure that I’m focused on the most important activities, uh, during the day when I’m working and some of those other things that maybe aren’t quite.
Patrick: Quite as critical. They, they get a, they get to wait, uh, they get to wait a minute, or somebody else gets to handle those that are, uh, making a different hourly rate than I do. So, um, yeah, I, I love the way you’re, you’re sort of getting people thinking about, okay, how do I, how do I leverage my time to, um, you know, it’s, it’s maximum capabilities, uh, for
Christopher C. Papin: people to feel like they have permission to do it because I, I’m guilty of
Patrick: mm-hmm.
Christopher C. Papin: I mean. Tax season, you know, it’s busy. Everybody’s notorious for the, for extra hours and this and that, and we try not to be the firm that’s doing 80
Patrick: Yep.
Christopher C. Papin: we really
Patrick: Yep.
Christopher C. Papin: But that said, there’s an
Patrick: Mm-hmm.
Christopher C. Papin: so we have to shift our lifecycle around to accommodate those things that are
Patrick: Yep.
Christopher C. Papin: But that means you [00:42:00] have permission perhaps on a Sunday to literally put it
Patrick: Mm-hmm. Yep.
Christopher C. Papin: And it’s okay because if you don’t, now you’re sacrificing the, the 150 days that you’re supposed to, like, you’re supposed to truly unplug, not work on three returns in the morning and then unplug. So there’s, there’s a, um, a psychology exercise, and I’m not qualified here, but my mom has all of the counseling
Patrick: Yeah.
Christopher C. Papin: so we’re gonna lean on her LPC in trainings, but. Humans. Were trained to interface with humans. That’s how biology works. And we fight that in our days off because we start engaging technology to stay connected to the office. And that cannibalizes your, your natural human repair, psychology, brain, rest, all those different components that are at play. Again, let somebody else tell you all the technical there. Just recognize. You’re doing yourself more harm by actually doing [00:43:00] the thing that we’re telling you not to do. When you feel like in the moment, eh, I really need to handle this. You don’t, it’ll still be there in the morning.
Patrick: Yeah, that’s so true. And, uh, I, I think there’s, there’s so much good evidence out there on rest and what it, what it does for us, like when we’re truly unplugged, when we come back, we’re, uh. We’re ready to take on the day where if we keep doing a little bit of work, uh, all weekend long, like we we’re, we’re not as rested as we need to be, and we’re, we’re actually less productive.
Patrick: Uh, so, um, I love that that highlight, and you’re right, technology is a, is a wonderful tool, but if, if we’re not careful, uh, there’s, there’s a bunch of good information out there on, uh, sort of the impact that that technology can have on us and work on our, you know, um. On our minds in a way that we don’t even understand and, uh, influence us in ways that, uh, is, is not healthy.
Patrick: So, um, that’s, that’s great. Um, [00:44:00] Chris, we, I feel like we could, we could cover ground for hours. Uh, we could be talking about business growth and tax and legal structures and, uh, business exits and employee compensation and all those other fun things. Um, but I, I, I’d love to. Talk about how people can get plugged into you, because I think there’s, there’s a couple ways.
Patrick: Um, when I, when I think about your, your firm, um, papin cpa.com, we’ll have links to that in the show notes. Um. I think, I think that’s where people should, should start. And, uh, uh, you, you, you’re happy to have a free consultation with folks and your number’s on the website and they can, they can schedule online as well.
Patrick: So, um, I think that’s great. And then I also love how you’re just a thought leader in this space and, uh, papin speaks.com, uh, we have link to to that as well. You can get the book there if you wanna have Chris come talk to your, uh, organization or, or be on, you know, your podcast like he is here. Uh, that’s a, that’s also a great place to start.
Patrick: So, um, [00:45:00] anything else that, if people want to learn more about, uh, the things you’re, you’re thinking about or doing or get plugged in with, with you and your firm, is there anything else they should, uh, be checking out that we didn’t discuss?
Christopher C. Papin: First, thank you for the opportunity on both of
Patrick: Mm-hmm.
Christopher C. Papin: Um, it is a true opportunity to be heard and seen, but we, we welcome to connect with folks. Um, to answer your question, LinkedIn’s another great place. If you look for Chris Papin, P-A-P-I-N, We post all kinds of freebie stuff, tips and tricks, idea starters. Um, sometimes it’s not really about gaining a client, it’s just about helping people, and that’s really kind of what the LinkedIn component was about. Just can I get stuff out there that can get people some value or start to think about things differently? Whether you’re working with me or anybody else, does not matter.
Patrick: Yeah, I, I love it. And, and let’s just talk about the stakes for a second, right? Like the, if we, if we don’t take action on, on this, uh, the, the listener is gonna [00:46:00] continue overpaying in taxes. They’re gonna leave themselves exposed legally, in, in different ways. They’re gonna miss opportunities to scale their business, uh, efficiently and effectively, and sort of stay stuck in a, uh, what I’ll call a reactive.
Patrick: Uh, advisory model and you, you brought that up saying, you know, you paid your account in 140,000. I’m like, no, I didn’t. I paid ’em 10. Well, you did because you weren’t proactive in your planning and you, you had $130,000 tax bill you shouldn’t have had. So, uh, I think about what that costs people and then, you know, flip it around on the other side, taking action, you know, you create a coordinated strategy.
Patrick: Tax, legal risk profile. I think that’s all super important. You gain confidence and clarity in your decision making. You’re not laying in bed at night and going, geez, you know, is there some something I haven’t thought about out, you know, my second job with managing all my financial infrastructure. Um, and, and then we just think about the preservation and growing our wealth more efficiently and effectively and, and having a, a structure thinking about the end in mind.
Patrick: Right. I’ve got a structure that [00:47:00] supports me to my end goals. And so, uh, I think this is, uh, this is great how you’re, you’re helping people put together a cohesive financial architecture. So, uh, Chris, I appreciate all the good work. Is there, is there any last points before we, before we wrap up?
Christopher C. Papin: Yeah, I always like to offer a challenge. Um, and, and Patrick, you do a great job setting this up. Up.
Patrick: No.
Christopher C. Papin: is for, for business owners, we get scattered and we talked about all kinds of cool stuff, but they’ve got 30 minutes. They’ve got an hour. So it matters not what you do. It matters that you do it. the thing that you think is gonna help the most and sit down and do that. That’s all you gotta do today, and then do it again tomorrow. In each of those incremental improvements, get this kind of change that you want, and hopefully create a habit towards that change as you go. So doesn’t have to be a lot of time, but please do
Patrick: Yeah. I love it. Chris, thank you so much for, uh, all the good work you’re doing, and I, I appreciate the fact that you’re here square in the middle of [00:48:00] taxi season, uh, talking to us about all these things. I know you’re, you’re a busy man, so, uh, thank you so much.
Christopher C. Papin: Appreciate the opportunity. Uh, really liked your insights along the way and, and look forward to what’s next.
Patrick: good. Thanks, Chris.
Patrick: All right. That’s a wrap on today’s episode. Thank you so much for tuning in. I truly appreciate you spending part of your day with us. If you got value from this conversation, I’d encourage you to share with someone in your network who could benefit from hearing this. These are the kinds of insights that can really change the trajectory of a business when applied the right way.
Patrick: And if you’re ready to go deeper and actually start implementing what we talked about today, make sure you visit vital wealth.com/resources. We’ve built out a vault of tools, guides, and strategies designed specifically to help you minimize taxes and build real lasting wealth. Again, that’s vital wealth.com/resources.
Patrick: Go check it out and start putting these strategies into action. Also, if you haven’t already, take a quick minute to leave us a review. It helps us reach more entrepreneurs just like you, who are looking for better strategies and [00:49:00] better outcomes. And remember, you’re a vital entrepreneur. You’re vital because you’re the backbone of our economy.
Patrick: Creating opportunities, driving growth and making an impact. You’re vital to your family creating abundance in every aspect of life, and you’re vital to me because you’re committed to growing your wealth, leading with purpose, and creating something truly great. Thank you for being a part of this incredible community of vital entrepreneurs.
Patrick: I appreciate you and I look forward to having you back here next week on the Vital Wealth Strategies Podcast, where we help entrepreneurs minimize their taxes, match their wealth, and optimize their lives. All right.