I am so excited about our guest in this episode! You might know him from a little TV series called SHARK TANK, where he was one of the original SHARKS. He now has a new book coming out and we can’t wait to grab it off the shelves.
In this episode, Kevin opens up about how he got to where he is today with the help of his mentors and now he feels it right that he gives back and becomes a Mentor to young aspiring entrepreneurs. He also talks about his challenge with capital gains tax on the sale of highly appreciated public stock. He bought some stock at 24 cents a share and now it’s worth over $20 per share. Watch as Brett Swarts walks him through how the deferred sales trust can save him hundreds of thousands to millions of dollars in capital gains tax.
More about Kevin Harrington. He was the president of National Media and oversaw the launch of several successful infomercials himself. After leaving National Media in 1994, he formed a “joint venture company with The Home Shopping Network” and “co-founded HSN Direct International Inc. and served as its Chief Executive Officer (CEO) and President” between 1994 and 1998. In 2002, he became the President of Harrington Business Development Inc. and the Chairman of On TV, Inc. That same year, he became the Vice Chairman and Director of Thane International Inc. and the Director of Reliant International Inc., leaving both positions in 2003. In 2004, Harrington became the Chairman of Reliant Interactive Media Corp. and the CEO of ResponzeTV America, LLC.
Harrington was the Director of Infusion Brands International, Inc. from 2006 to 2008. In 2007, he became the Chief Executive Officer of ResponzeTV Plc and the Executive Director of ResponzeTV Plc, leaving both positions in 2008. Harrington was one of the original panel members and investors (“Sharks”) on the ABC TV series Shark Tank from its inception in 2009. He left in 2011 after two seasons of the show.
Harrington published his book, Act Now: How I Turn Ideas into Million-Dollar Products in 2009. He now has a New book on the way, it is called “Mentor to Millions”.
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Welcome to the capital gains tax solutions podcast where we believe most high net worth individuals and those who help them struggle with clarifying their capital gains tax deferral options, not having a clear plan is the enemy and using a proven Tax Deferral Strategy such as the Deferred Sales Trust is the best way for you to grow your wealth.
Hey, I’m your host, Brett Swartz. In each episode, I’m joined by some of the best real estate minds, financial minds, and passive income Wealth Advisors in the world where they share their ideas, deal stories, and inspiration. So together we can make complex tax deferral strategy simple and passive income plans achievable. Hey, I’m really excited about our next guest. He has launched over 20 businesses that have grown to over 100 million dollars in sales each has been involved in more than a dozen public companies and has launched over 500 products generating more than 5 billion in sales worldwide with iconic brands and celebrities such as Jack, Alene, Tony little George Foreman and the new igrow hair restoration product on QVC. As a successful entrepreneur over the last 40 years, he’s been involved in numerous projects, including being an original shark on the ABC hit, Emmy winning TV show Shark Tank, the inventor of infomercial commercial As Seen On TV pioneer, and also the co-founder of a few different
electronics Retailers Association and entrepreneurs organization. And so with that being said, I want you to welcome Kevin Harrington to the show. Hey, Kevin, how are you doing?
Hey, good to see you, man. You said a mouthful there, but that’s pretty good. Thank you, appreciate it.
Yeah, I appreciate that you’ve been on the show and there’s a lot there to dive into. But in the meantime, would you give our listeners who maybe who don’t quite know yet just a little bit about your background and then also dive into your current focus right now?
Okay, great. So I guess I could call myself a serial entrepreneur because I started my first business 43 years ago, I think it was okay. Maybe even longer. I give or take a long time and back in it was back in the early 70s. Okay, so I was in high school I started a driveway sealing business, but I’m one of six kids and my father was a bartender, and he saved up enough money to open up Harrington’s Irish pub, so I started working for him. And he mentored me to be an entrepreneur because I was making $1 an hour. And literally, I was working some 40 hour weeks. And it’s not a lot of money when you think about it, okay? And I said, Dad, When am I going to make the big money so you’ve got to own your own business. So from driveway sealing started a heating and air conditioning company and high end in college, and I had 25 employees doing millions of dollars a year. And you know, back in the early 70s, as an entrepreneur, but one day, I’d ordered cable TV, I’m watching like 30 channels, this is the early 80s now, and so when cable first hit today, you see hundreds of channels, way back, there were 30 channels, yet ESPN sports, HBO movies, MTV Music, CNN news, I got to channel 30. It was the Discovery Channel and it was blank. There was nothing there. I called the cable company and they said, Hey, I love this cable 29 great channels, but I’m paying you for 30 Where’s channel 30? They said, Oh, that’s our newest channel. It’s called Discovery Channel. It’s a brand new channel. They don’t have a budget for 24 hours a day. It’s an 18 hour a day channel. And that’s when the light bulb went off. They got six hours of nothing on. This is national television, by the way. So I said well, I might have some things for you to put on those six hours of unsold time. And I went down, met with them and cut a deal to start putting products on so we started in the kitchen area. And we were doing Ginsu knives and the Food Saver and the Jacqueline juicer and George Foreman and then we got into fitness with Tony little in the Jenners and then 50 cents headphones and, and all of a sudden we Billy Mays, we were doing hundreds and hundreds of products, billions in sales.
We went public on the New York Stock Exchange, we had a stock that went from $1 to $20 a share. So it was an amazing period of time for me as I was a young entrepreneur, getting into the public situation, you know, had a great exit. And that was my first wealth-building situation was the exit out of that public company. And now, fast forward, I’ve been involved with more than dozen-plus public companies that I’ve been involved in an equity substantial equity stake. You know, what am I excited about right now? You know, I got that phone call to go on Shark Tank then. And I did quite a few 175 segments over a number of years on Shark Tank and they all just keep rerunning on CNBC and around the world actually, because they’re now on the internet in many countries. So, so my business is it’s being an advisor and a mentor to individuals to entrepreneurs to public companies. I sit on a few public company boards, and I just love bringing value to a public company. So just one more story. And I’ll flip it back to you, because I know I’ve been talking quite a bit here. But so on that note, you know, I joined a public board, I sometimes invest in a good stock I get, you know, it could be founding stock or whatever it might be, but sometimes it’s just, it’s a pub CO and I’m, I’m getting involved, but generally, there’s some kind of advisory fees as well as stock compensation. But one of the companies I got involved with five years ago, a little public company, the stock was 10 cents a share went to 22 cents. And I said, Hey, I’m in, I’m going to jump into this. It was in a company called Celsius and it’s an energy drink. That is a healthy energy drink and so fast forward 22 cents a share when I jumped in, it hit $22 yesterday. So, you know, when you can take, you know, take the company with 10s of millions of shares. And we’re a billion and a half dollar company now. And so that is exciting to me as one of the founders of this company because this was a new regime that came in and took the company over and redirected the activity. So, but I have, you know, my original company went from $1 to $20. Another one, I had gone from $1 to $18, another one from four cents to $1 80. And so, I mean, these are the kinds of I like to see growth, I like to see a shareholder value increase. And I mean, I know we’re going to be talking about some money and some numbers and capital tax and gains and things like that. But you know, for me, it all starts with a solid business, a solid business plan, raising capital, and then executing on that plan and bringing growth to the company.
Absolutely love that. I love that full picture there. And you painted that so well. Before we dive into some of those, you know tactical things in some of the things that maybe perhaps you’re seeing in this new environment, with the economy and real estate, and then also we’ll touch on some capital gains tax deferral strategies as well. I’m curious though, I believe Kevin, we’ve all been given certain gifts in this life. I mean, I believe their God-given gifts and they’re given to us to make a difference and to bless other people. So I want you to go back you know, perhaps it was the days when you’re with your dad working, you know, for the dollar an hour and you’re just getting started? What was that gift that maybe that one or two gifts that you may be that you believe you can maybe identify that period of time, and how does that connect how you bless and help people today?
When I started in my dad’s restaurant, and bar, and I’ll never forget this. Yeah, making a buck an hour right working like crazy. I, you know, I had a shift where I went in with him on Saturday morning, and we had to get in by 11 o’clock to get ready for the lunch hour. And then we worked all the way through, closed the club down at 2:30 in the morning, so I worked from 11 AM to 2:30. But then we took an hour break, and then they had an after-party, all the entertainers in the city that went till 6 am and then I did a cleanup after that got out of there at 8 am. So it was like a 22-hour shift and I’m an 11-year-old kid. And so yes, I worked hard, okay, and I learned how to do barbacking serving helping this that whatever, but my dad would always show me and he’d say look that son I’m I don’t want you just to wash dishes. I want you to understand the business side of this now. I’m gonna let you know this beer truck guys delivering beers. You know, we got to shore up the invoices, you count how many kegs he brings, and I’ll be right back. I get to go out to the restaurant side of the business and so I’m counting this guy. He’s bringing it in, he brings in two on a dolly and then he takes a couple empties out and does more in and out and in and out. My dad comes walking through the kitchen, he says, Wait a minute, where are you the guy? Where are you going with those two Kegs? And he says I’m just bringing in fresh ones and taking the empties out of the truck. And my dad says wait, let me see that one underneath there. It was full. And so my dad pulled the empty off and the bottom one was full. He’s bringing in two empty, taking a full one and an empty one back to the truck. And I’m like this. He’s trying to get over on an 11-year-old kid but my dad’s like, no, he said you’re fired. But he says I’m calling your boss right now. And as again how’d you figure that out? I could see the sweat on that bottom barrel skyscraper.
stealing from us. Well, the chef was stealing steaks. And the bartenders, you know, I mean, everywhere across the board, he taught me the ins and outs of that business enough to know that I did not want to be in the restaurant business, okay. But at the end of the day, he would show me how he counted the money and I would go to pick up the liquor at the liquor store. And he introduced me to people. He was teaching me to be an entrepreneur, he was mentoring me. And that’s what I do for me. I have a new book, and I know we’re going to talk about it, but it’s, it’s called Mentor to Millions. And this is what I’ve been doing for years. I’ve mentored millions of people on building their business and becoming an entrepreneur and being more successful. So my father was my first mentor. I’ve got many, many, many more stories and more mentors I could talk about, but I believe if it weren’t for the mentors in my life, I wouldn’t be sitting here talking to you.
Right now because I only have a certain skill set, I think I told you upfront, you know, I’m not an I’m not a brilliant tax guy. I’m a marketing guy and how to ring the cash register. So that was the greatest. The greatest gift that I got was from my father teaching me how to be an entrepreneur.
Absolutely love and it is encapsulated, you know, who you are and your calling. And so let’s dive right into the book right now. So for those who are listening, maybe give us you know, what, what are the top steps, and because you already help ultra-successful people become successful. Right? And so walk us through what is the essence of the book and what are the top steps that you know folks can be taking either if they’re starting out, or you know, a lot of our listeners are already very successful. What’s that next legacy player, walk us through kind of what what what the books about and what you’re hoping to get out of it?
I appreciate it. So I mean, if I think, first of all, it’s a book about.
I’m the mentor and I have a mentee. So it’s about our journey. And, and so I met a gentleman by the name of Mark Tim and he is my co-author now. And so we wrote the book together because he came to me in a time of need. And then it’s about how we walk through this. And it’s not just about business, but it’s about family and other parts of your life. So I think the bottom line is, that is we were just talking about my father teaching me things as a mentor. I now as I mentor people, I also teach people how in the book, we talked about how to find mentors, where you get mentors, right. And because some people think, Well, wait a minute, how am I going to get somebody big and powerful to do all these amazing things for me, and they may not even charge me right like I do.
This for a lot of people myself and, and it’s just part of my giving back to the entrepreneurial community. Now, I also like, if I’m going to join a public company, yeah, I’m not doing that for free. It’s a public company, I get paid, I get stock and and and now I’m getting value out of the relationship, but it’s still similar. A Board of Directors, a board of advisors is similar to a mentoring kind of a relationship. So, you know, when people say to me, how do I get a mentor? Let me give you a couple of ideas. Okay. So when, when, when I was building my company, when we first started, we needed capital for inventory, because how are we going to go to hundreds of millions of dollars, if we don’t have inventory to ship what you get inventory, you got to pay for it, pay for it, you got to have cash. So I said to myself, we had grown rapidly using just the profits from the company but now we could go even on a 10x if we could go raise some capital, but I couldn’t get bank financing, because I didn’t know how to talk to the banks. So I ended up at a chamber of commerce meeting. And I was very active in networking and things. I got talking to some folks. And I said, if they could, if they could get me introduced to a few banking-type, mentor possibilities, somebody that could help me raise capital, so make a job, I’ll tell the story real quick. I get talking to this guy, and he says, Have you tried to raise money? So I’ve been to five banks and got turned down by all of them. And he said, and he asked me who they were. And he said, I’ll tell you what I got a great deal for you said, I’m going to raise you What do you want three, you returned to raise three to 5 million. He says I guarantee you because he knew enough about the business where we were the growth we have. We had sales and profits. He said you weren’t talking to them the right way. He says I’m gonna raise you three to 5 million not going to charge you a dime and I’m going to and I think it may even come from one of the people that have already turned you down he said so let me do that after that’s all said and done you’re gonna want to sit down with me and bring me in your company and make a deal. So I shook his hand and we started 90 days later I had 3 million bucks of loan sitting in my company account so that he got from a bank that it turned me down, which is a true story. So make a long story short, he then became my financial mentor. And, and I just want to say that came from a chamber of commerce, but if you want to go get other mentors, this is one other quick way Who do you write checks to if you’re in business, so I was in business, I was writing checks to fulfillment centers, to TV stations, to credit card clearing companies, to banks, to phone centers and import-export companies and etc, etc. So, everyone has these people been making money off me. So I say I was writing them a monthly check for services. So hey, if I reach out to them, I need somebody in this area, I need a mentor in finance or a mentor in digital marketing. And I’m, I’m giving these people capital as they’re, as I’m buying their services, they should be wanting to help me also. So when you start reaching out to people, you know, people you write checks to chambers of commerce, places that you network at, etc, etc. Most of these kinds of places are going to be fruitful in getting you some great ideas for who can become a mentor for your business.
And I imagine Kevin, a lot of people, you know, they’re like, Hey, Kevin, I want you to mentor me, right? And you’re like, yes, so do all of the other millions of people. That’s right, I’m writing this book and this is why I know, do these, you know, all of these things because I don’t have the time or the energy to mentor everybody. But curious Kevin for those that you actually have, I guess more of an intimate level or those who were a part of your company or part of your other companies, maybe talk about one or two of those, you know, the mentees that you mentored and, and, and what, you know, how do they connect with Kevin, you know, what was it a natural thing? Was it a formal thing? You know, walk us through that process.
Yeah. So, Mark, Tim is my mentee and mentor to millions he’s also my co-author. And so this is an amazing story. Back in the day, Zig Ziglar. You are familiar with Jake, a great motivator who wrote 38 books, secret to closing the sale, etc. So Zig was a mentor to me. And, and, and Zig was an unbelievable guy and helped me in many, many ways, automobile University, all the different things he was doing, but he also was a mentor to mark Tim. And so when Zig passed away about eight years ago now, the son in the family, a tom Ziegler, Julie Ziggler, I was talking to them, Mark simultaneously was talking to them, and they said, You know what, guys, we owe it to both of you on behalf of our father Zig to put you guys in touch because Mark needs a mentor. Kevin, you’re a mentor. And so Tom Ziegler introduced me to Mark and Mark had been very entrepreneurial, had built companies and built them, sold them, built them sold them, but he had never built a company beyond a $10 million deal. And when I sat down with Marcus and Mark, I’ve had 20 companies that have gone to over 100 million dollars in sales. Let’s focus on getting you 100 million dollar business so it’s, there’s a story and I forget it Zig taught it but he would, he would teach he would put it, you could put fleas in a little glass
If you put a tarp over it, they would try to jump and get out of there, right? And they, but they would just keep hitting the top that was in there, the fleece. So this is the $10 million business, you’re never getting above 10. Now if Funny thing is, even though you open this cover, the fleas still don’t jump any higher than where that cover was. They don’t know how to get to that hundred million. So if that cover was a $10 million cat, they’re just always going to go like that because they don’t know any better. So when I sat down with Mark and we strategized on exponential thinking, and not just additional things, adding on Martin, I can grow my business by adding more people, but that’s not exponential. So we went through the phases of exponential thinking and this is all in the book mentor to millions. And so from there, I had 100 million dollar business in the United States. Back in the early 90s, when I thought exponentially, I had this library of infomercials that had generated 100 million dollars in sales. Well, how do I build a bigger business? I need more products away, there’s, I can think of something different. Why don’t I take that library and go to Europe and go to Latin America and think exponentially? Well, boom, that’s what we did. We went to Asia, Latin America, the Middle East, and I’ve started meeting with all the TV guys all around the world. And we licensed our shows on a global basis, we went from 100 million to 500 million so this is the process of getting the right kind of mentor in your business. And for Mark, it’s a game-changer. He’s now on his way to his first hundred million dollar business.
Absolutely love that. That is so powerful, that cap of the fleece jumping right and after a while, they don’t know even if you take it away. It’s as if you need a mentor right to help exponentially, you know, expand your mind and your thinking so that you can get beyond yourself, right and a guide who’s a few steps ahead of you, and someone who’s already done it, of course, right. And I also think about the elephant, right, the elephant who’s stuck on a steak, right? And he’s been walking around for however long on that steak, well, you can take the steak out of the ground, and he’s not gonna leave from that area either. So that’s very, very powerful. Well, Kevin, with that, I’m curious. Now, we can shift a little bit from the book and dive into, you know, a little bit of finance or real estate or just values. I guess the first thought is just COVID-19. What opportunities do you see coming? How are you positioning yourself to help those who are hurting? Right and, you know, small businesses or those that are, you know, you’ve been affected by this, but also on the financial side, perhaps opportunities to buy more. What’s your take on just the overall state of economic forecasts in the next 12 months?
I’ll say this. I’ll never forget when I told my… I’m one of six kids, Cincinnati I may have mentioned but when I got to graduate high school and went to college and the University of Cincinnati, I was on the Dean’s list for two years and had great grades. But I wasn’t getting anything out of school Plus, I had a company with 25 employees in the heating and air conditioning business while I was going to school. So I started my senior year of high school going into college, and here I am six trucks going out every day. 25 employees, but I didn’t get to my office until two o’clock in the afternoon, they had to go to college. But finally, I said to my mom, I’m quitting, dropping out of college, I can’t do both. And shortly thereafter, I sold the heating and air conditioning business and got into this infomercial space. But so here in the early 80s, and I was I am I’ll never forget when I was first telling my mother and explaining to her so I’m going to be taking products, putting them on television, and selling them directly to the consumer. And she’s like, wait a minute, you mean that but there are stores out there that people go to buy these products from you know, the Walmarts and the CVS drugstores and Walgreens and Kroger’s. And well, you’re going to be competing against all of them? I’m like, Yes, because I have unique products. I’m going to find them and I’m going to produce TV commercials for them. And I’m going to put them on Discovery Channel and drive the sales and sell them straight to the public straight to the consumer. Now, this is the early 80s. It was 10 years before Amazon ever started way before QVC ever started. And I’m direct to the consumer business now. What is happening here with COVID retail is out. Okay, well, retail was out for me all the way back to the early 80s because I said directly to the consumer is what I want and that’s what Amazon developed. So one of the things that many companies did not do before COVID, they if you were a retailer, and you did not have a direct to consumer strategy, you’re probably closing down right now. So there are many chains that have been going out of business Brooks Brothers just filed in Sports Authority and all these different retail chains that are filing for bankruptcy from Kmart to Sears or whatever because they didn’t have a direct to the consumer strategy. My philosophy now is everybody needs to do this. I don’t care what business you’re in. I mean, you know, they’re even you know, it’s all about creating this direct to the consumer meaning you’re in the funeral business, you can create streams direct to the consumer that can’t get to the funeral because of COVID right. So every industry is being upended, and, and my firm belief is, as we put our powerful director, the consumer technologies, software funnels, Lead Generation Package customer acquisition tactics, this is the wave of the future. And if you haven’t learned all these things, that’s what you got to get yourself involved with right now is direct, you know his eCommerce and how to utilize that in your business.
And with that, I was on the SharkPreneur podcast, which you co-host with Seth Green, and that’s exactly what Seth Green specializes in right taking, taking a brand and going direct to consumer as well as exploding their marketing, right and looking at all these exponential ways to grow. So you’re it’s not just what you. It’s what you do, and it’s and it’s the team that you also have around you to do that. So make sure to reach out to them to shark printer, Seth Green, and Kevin Harrington on that. That being said, let’s talk quickly about tax deferral strategy, just curious on I know you’re not a CPA and you have some of the best that you hire, and the attorneys, right, but you mentioned that stock, and I couldn’t help it pass, you know, pass that up. Now, you bought a stock at 22 cents, right? And it’s 20 bucks. That’s insane, right? We’re doing a Tesla stock sale right now, if somebody bought Tesla, like 200 grand, and it’s worth a million, but when they go to sell it, they’re hit with this huge capital gains tax. So would you walk us through either the frustration or the challenge when it comes to selling, you know, buying something low or seeing something explode? And then you know, that 30 to 50% in tax? How do you approach that? What tax deferral strategies have you looked at have done, walk us through just your philosophy on that? And diversification, if that makes sense? That’s a big question.
I mean, I’m a firm believer in an amazing dream team. And so I’m involved with dozens of companies. And the one thing that I promised all my financial guys is I’m not going to meddle too much in these arenas. So normally, if I were answering questions about this, I would probably have one of my tax guys here, because yeah, I mean, I’m just going to say, I pay a lot of taxes. I mean, it’s, it’s crazy. The one thing that I try to do when it comes to capital gains is if, if there’s It all depends on on the classifications and so on it, if it’s a strength, I bought the stock and I’m selling the stock at a higher price on it that you know, sometimes you just have to, you just gotta pay the tax. But there are ways that if you take the tax, if you take the stock in a different form, sometimes you can have better outcomes on the tax side. So, I know that there’s consulting stock, there’s, there are other ways that you can position yourself inside some of these relationships. And some of them are hardcore if you’ve got the stock this way, you’re just going to be paying the tax. But, you know, we like to take a look at the most creative structures possible. And so, you know, I’m going to tell you that I use some really powerful guys to try to save as much money in taxes as I can, but I’ll tell you, I pay way too much probably so maybe, you know, let’s talk about it. Let’s talk about structures and, and ideas and maybe you can shed some light on for me too.
Yeah, you know, and that’s actually what why we started our company capital gains tax solutions, right because in the 2008 crash, a lot of my clients when I was at Marcus and Millichap selling highly appreciated, you know, multifamily properties Northern California, they had felt trapped and pressured and overpaid via the 1031 exchange. That’s the only thing they knew right. And they thought that was the only tool they could use to defer tax. And then everything stopped and I was in the 05′ 06′ market and 08′ hit and then they some have lost everything, someone lost half and then we found out about a thing called deferred sales trust, which goes back 25 years now thousands of closes, it’s been through the IRS, but it’s proprietary and it’s protected. And so we launched our company on basically that premise that there is a better way. It’s an alternative way. And it can actually work for not only real estate, but it works for primary homes. It works for business sales works for stock. And it’s, it’s had an amazing track record. But even the smartest folks either have heard about it or don’t quite know about it, because they think they know but they don’t. So talk to talk to us a little bit about the idea of bringing in new innovative ideas. And what’s the process in which you do due diligence on that. Because the biggest thing we get Kevin is, well, that must be too good to be true. My guys would have already known about it right? I have the best of the best, right? And then they go Wait, they don’t and then they end up joining us once they figure out how we do what we do and we, you know, sign the NDA and everything but walk us through just your due diligence and how are you vet different and it could be tax strategies. It could be a financial model, what is it about making sure that you go with the winners and say no to the ones that are risky or too dangerous.
Oh, so we have Joe two full-time lawyers but we use probably five or six other outside law firms for different advice and things because they’re specialized knowledge that we need in the different industries we’re in. So we need FDA counsel SEC counsel, we can’t afford to keep them full time inside the company. But we have really deal-making lawyers that are part of the internal team and so they have a little bit of knowledge in some of the tax arenas. But at the end of the day, we also have, I don’t know how many different accounting firms we use because, you know, again, I don’t control all the companies that I’m involved with. So I deal with, you know, dozens of different accounting firms because when we have I had my own personal accountants, but you know, the public company might have to be a different accounting because my accountants have to resign my personal account because they were taking on a corporate account and things like that, but I like to run. I mean, I don’t do anything without having my CPAs and my accounting firm, take a look at the structures. Let me ask you this. I mean, I played with real estate over the years, but I’m not you know, I haven’t done billions of dollars in real estate, but I have done billions of dollars in product sales. So I am a product marketing guy but I also let’s talk about public companies and stock. So because you mentioned you started off saying that the capital gains work for real estate. How do you do that when you buy stock and the stock is at this price, and then two years later, the stock is triple the price and you want to sell it? Are you telling me that you have a way to defer the tax situation there?
Yes, absolutely. Yes. And so the first one I was referring to is a 1031 exchange which only applies to investment real estate. The second one I’m referring to is called a deferred sales trust or works for primary homes. It works for investment real estate, which is highly appreciated public stock, it works for private stock. It works for collectibles artwork, it works for Bitcoin cryptocurrency, and it’s literally I think the best-kept secret and not only that it’s new to people, but it has a track record of thousands of closes now right? It’s over 25 years 15 times no change IRS audit, the biggest deal was a 120 5 million dollar deal. And one of the recent stock sales I think was for Netflix, and it was an over $5 million sale and they were able to defer the tax and it’s really simple actually, Kevin, it’s actually just a seller carry back. What you do is you sell the stock to the trust before you ultimately sell it to the ultimate buyer. And what you do is Kevin if you carry a paper you carry you become the lender. And so you say hey, look, I’m going to finance the trust 100% of what stock with steel, it’s a $5 million sale, and he immediately gets the $5 million buyer to buy it. And that’s kind of the simplified version of this. But because we do this, we do it in a certain way, you haven’t received what’s called constructive or actual receipt. And so they’re going to tax deferral state. So, yes, it absolutely works for public stock, private stock. It is a proprietary structure. But this is like it’s, we believe it’s the best-kept secret out and it really will change a lot of people’s lives because we’re looking at the largest wealth transfer in the history of the planet going on right now. And it’s not the baby boomers, and it’s 17 to $20 trillion. It’s going to pass with every single day, you know, 60 10,000 paper industry 65 and there’s 77 million in the US alone. And they’re looking for ways out of the toilet to trash liability out of their highly appreciated stock. They’ve had to imagine someone buying Apple 25 years ago, and basically, they’re kind of nervous to sell because they’re going. I don’t want to pay all this tax. I want to give all this wealth away. Now to a government that’ll probably waste away pretty quick, but now we can put it to the trash.
Now once it’s there, and it’s deferred, you can actually use the funds to invest into brand new real estate deals or brand new business deals, we call it the Go Fund yourself. Yeah, instead of having venture capital, it’s kinda like a self-directed IRS. So there’s, there’s a number of things that go through it. But yeah, the answer is, absolutely it works. And we’d love to show you and your tax
Let’s do this on, I’m out of time myself I gotta run, but let’s, let’s wrap up our or our podcast here and make it happen.
Where can they find you, Kevin?
Yeah. Where can they learn more about how you do it? I mean, I’ll say this. If you have something that can divert actions in the tailstock like you just mentioned, I want to introduce you to my top people. Maybe you can become what I call a dream team member on what we do because we’re buying and selling stocks, you know quite a bit on a weekly basis. And so, and we obviously, you know, knowing the hold of know when to fold them so that’s our goal but I’d like to follow up with you on that and hopefully anybody that’s out there that is interested in my new book, kevinmentor.com, is where they can find out about it comes out in a week, but there’s something amazing that I’ve done here for anybody that that doesn’t preorder on the book right now, we’re actually doing, and you get all these details with kevinmentor.com, we’re actually doing a 30-day free mentorship program, both myself and Mark Tim are going to mentor, those that have done a pre-purchase of the book it comes out. In September, and then so get in now get free mentoring, then your book will be ready in September and ready to roll. So I appreciate you letting me speak in the shop and enjoy the rest of your crowd out there. Hopefully, we had some fun and got some things moving here.
Thank you, Kevin, absolutely I’m going to sign up for that mentor to millions right now and get going on that and I appreciate your time and I encourage you to use the gifts and talents you’ve been given to bless other people like you’re doing and mentoring hopefully million people here more. Teaching financial freedom and leadership and everything about it. So thank you, Kevin, thank you, everyone, for being on the show with that, please rate review subscribe comment in here any questions you have. And we thank you so much for being a part of it.
I’ll see you. Bye.
An original “shark” on the hit TV show Shark Tank, the creator of the infomercial, pioneer of the As Seen on TV brand, and co-founding board member of the Entrepreneur’s Organization—Kevin Harrington has pushed past all the questions and excuses to repeatedly enjoy 100X success.
His legendary work behind-the-scenes of business ventures has produced well over $5 billion in global sales, the launch of more than 500 products, and the making dozens of millionaires.
Twenty of his companies have each topped $100 million in revenue.
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