Financial Freedom NOW

Aviva (00:01.174)
This week's Listener of the Week is TinyTownTim06. Tim, thank you for leaving us a five-star review. And for those of you listening, if you leave us a review, a five-star review, not just any review, you might be next week's Listener of the Week, week, week. This week, our podcast guest is a gentleman by the name of Scott Smith. Scott, tuning in from Quray. I don't even know how to pronounce it and I live in this state, Colorado. Scott, thank you so much for being on the show today.

scott royal smith (00:34.553)
Oh, that's awesome, awesome to be here with you.

Aviva (00:38.206)
Well, here, so close, but so far. So Scott, tell us, tell the listeners who you are, what you do, and why we're talking today.

scott royal smith (00:49.449)
Yeah. So, my name is Scott real Smith. I'm actually, um, an attorney real estate investor. Um, I actually bought my first property when I was in law school. It was a transmission auto repair shop that I bought for like 10 K thought I was going to flip it for like 15, make a quick five, call it good and get some beer money, we're going to go party this weekend. But I ended up running it, and rehabbing it and then ended up flipping it to pay for my law school. So I didn't graduate from law school without any debt and continue to invest in real estate. And,

Then hit what I wanted to with my financial freedom, like with buying single family homes. And then I was climbing Mount Kilimanjaro, was traveling around the world, written money was great. And then all of a sudden, a friend hit me up and was like, hey dude, I'm getting sued for 3 million bucks. And remember that thing I told you about insurance being enough to protect you? It turns out they're not gonna cover me because it was a breach of contract issue. It was a deal that he had to pull out of. So he lost $3 million from a single lawsuit.

And that's when I was like, oh, it is not enough to just get financially free. I actually gotta bulletproof this thing.

And then I got to think about how's it going to go to my family if something happens to me or whenever something happens to me. It seems to be pretty inevitable that none of us make it out of this journey alive. So we got to think about what's going to happen. And also like about taxes and like what are the next deals I have to get into when I run out of depreciation. And that's what my company, Royal Legal Solutions, actually turned out to be. It was just an extension of everything I needed to build for myself to live a more free lifestyle. And right now I'm in Ure, Colorado for two months, ice climbing.

I might be back in southern Utah after that or in Austin. I don't really know, but it's important, I think. It's the most important thing we can do is to get financially free because I didn't know that life actually really starts after you're not worried about survival anymore. You feel safe and you can start to explore what it is that you really want, what's that going to look like.

Aviva (02:42.014)
Wow. You know, I find the topic of real estate to be honestly over a lot of people's heads, right? Like when I hopped onto the internet, I started talking to the general public about real estate. I had somebody comment on a post, something along the lines of...

Aviva (03:01.898)
wait, you can rent out a house and make money from it. And that one comment hit me over the head like a ton of bricks. I grew up in a real estate family where this is all we ever talked about. But.

What I learned from that comment is that real estate is over a lot of people's heads. Okay, obviously the people listening to this podcast right now, these are not those people, right? These are people who understand real estate. However, tax strategies in real estate is another level of complexity of this industry. Can you tell us what your...

day-to-day looks like for your average customer in a simplified way, mostly for me. Yeah.

scott royal smith (03:51.117)
Sure. Yeah, so over the last, I'd say, 12 years, we've helped about 2,000 clients in all 50 states with their asset protection, which is how you protect yourself from lawsuits, your estate planning, protect yourself, protect your family from things going into probate court, protect yourself from the government, which is taxes, and then protect yourself from just being a dumb-dumb and not having a portfolio that's optimized to help you make more money easier. And then the biggest single thing you can do.

And there's a reason why rich people are actually so interested in tax, is because tax is the only guaranteed investment you can make that should pay you somewhere between a 50% to 100% annual return. It's the only investment that exists that's like that. And so when you invest in good tax strategy, that's why all rich people are like, hey, how do I save money on taxes here? Do I save money on taxes there? It's because it's such a baller investment to save money from the government.

And in that vein, there's a lot of things people should do. Typically, our target client makes over $200,000 a year in household income. We say, if you're making over $200,000 a year in household income, we should save you enough money on tax that it should pay for everything we do and should return somewhere for you a 50% to 100% return.

And so that's why we look as a company that's like, we're not really a law firm or a tax firm. We are as a partner that says, we'll actually build you more money. We'll create ROI for you by helping you strategize things. In the meantime, we're going to take care of a bunch of stuff in your life, like making sure you're protected from lawsuits, make sure your family's protected. But have you ever heard of a private foundation, Aviva? Yeah? Okay. As a lot of people,

Aviva (05:28.59)
Sure.

scott royal smith (05:33.745)
I don't know that whether you're W-2, 1099, or self-employed, that you can take 30% of your income and place it into a private foundation.

And essentially, it can grow just like a retirement account would. All the gains that are made inside of it grow tax free. You can invest in just about anything you want. But unlike a retirement account, you're able to draw a salary from it any time that you want to. So it becomes this awesome financial freedom vehicle because it grows tax free until you say, cool, I'm ready to go hang out with Scott and Ure and go ice climbing and start living this kind of life. And I'll say, dude, come on. We've got an extra bedroom right here in the Airbnb. And I want to see you out here on the ice with me.

And I said, great, well, all I'm just going to do is just have some money comes in from my investments and it's just going to pay me a wage outside of my private foundation as a director. And it can be any reasonable wage, which is totally undefined. So it can basically be almost any amount that you need in your investments that are inside of there, just keep kicking off money. You never pay in tax on that money. You didn't pay tax on all the money that flowed in at the beginning of it.

Aviva (06:37.006)
I feel like our connecting is very fortuitous because I find that when I put questions out into the universe, they come back to me. And the quest, I know, I know, I know.

scott royal smith (06:44.809)
Strange. Oh my god, it's so crazy! It's almost like it always happens and everybody's been telling us that for thousands of years that this is the way it works!

Aviva (06:56.562)
But I, having my own success, dealing with a lot of successful people, that's a huge benefit of working in commercial real estate. I'm asking all the time.

I see these tax strategies. I know the uber wealthy have family offices and people whose entire nine to five is devoted to saving them money. But what about the person like you're saying who makes 200,000 a year, 300,000 a year, and they want to protect their losses? It almost feels like there's nowhere to go. Suddenly, I meet Scott Smith,

You have a company that is literally the solution for those individuals.

scott royal smith (07:47.765)
that's literally what it's built for. So it's like everybody that's above 50 million net worth, they can afford to have a bunch of full-time people that work for them. And then there's all the people that are kind of just figuring it out on their own. And they're typically in that like bottom-ish range. And then there's like a big gap of everybody that's in between. Where they can't really find the right professionals, the people, and they can't really afford all of the stuff that the uber wealthy people can afford.

And I think that's the gap that we cover. It's almost like a fractional family office, where all the teams that I need to build for myself, right? Remember, this is all about me. This is about me living a great life, right? And so I had to build the teams, the systems, the processes, the strategies, the meeting structure, the reporting, to essentially do this thing called, like, build a wealth building company that I could be a CEO of, that I had all this team that would run.

Aviva (08:39.735)
Mm-hmm.

scott royal smith (08:43.445)
just like my law firm runs. And we have teams of like attorney CPAs, MBAs, CFOs, CFAs, paralegals, et cetera, that all work inside of the firm. But, and that's actually why wealth is so hard. It's because a lot of people think wealth is a side hustle and it's actually a second business. It's just like you're an entrepreneur and that's why you're not very good at it. It's because you're pro, is because it's starting a new business and you're also doing a job and doing a business, another business probably, and doing a family. And so how good would anybody in the world ever do

If you're doing all of that and you're like, would you also like to start a whole new startup? You need to build a tax division, an illegal division, an investment pipeline. You need reporting. You need meeting structures. You need all of this stuff. And you'd be like, oh my god, there's no way that can be successful. And that's actually where most people are at. And that's why it feels so frustrating and confusing. It feels like it's a never-ending well of stuff to do.

Aviva (09:18.338)
Right.

scott royal smith (09:39.929)
And that's why my company exists now. That's why I say, great, six weeks, if you work with us, we'll actually build everything for you. We'll do all the strategies. And then over the course of the year, we essentially train you into it, to essentially train you into our team as you're the CEO of a wealth building company that we build for you. And then we help you manage.

Aviva (09:57.174)
Wow. So, and then just out of curiosity, you get paid based on a percentage of what you save or are you on a retainer or how does that work? Okay.

scott royal smith (10:08.349)
Now, we just do it as like a flat fee, right? So we say, cool, we'll take a flat fee. And there's like a few thousand dollars a year that typically goes into like maintaining everything and having like the meeting structure with the professional team. But we do it as a flat fee upfront. And then some people will say, cool, I saved $20,000 in taxes this year. Some people save $250,000 in taxes. And we say, great, the only way for us to play this game and make it fair as if it's a flat fee structure and we take you from A to Z. Otherwise,

Aviva (10:17.166)
Sure.

scott royal smith (10:36.449)
There's a whole game that gets played about billable hours. And there's a whole game about all this other stuff of can you really trust, you know, the advice that's like really being given. And we're more interested in making our lives really easy. We make enough money to have everybody get paid and do the things they need to do. And it makes our life really easy if we just do a flat fee structure with it. And then we just guarantee the results. So if we don't deliver on exactly what it is, we'll just give you your money back. We're really selective on who we take in on the front end because of that kind of guarantee.

that we had offer with it. And the biggest problem we actually run into is people say, it's actually way too good to be true. This is really impossible. How come I've never heard about this stuff before? Yada, yada, yada. And that's why we have on the front page of the website just oceans of testimonials of people talking about, this is a real experience and this is how much money I saved. And if you go through and meet with our team, they'll show you even more details about like specific amounts of dollars so that people have saved working with us and everything. So, I don't know, that's that.

Aviva (11:35.758)
So it's funny, I had this conversation in the past week. My mom, who, great lady, she's a dentist, probably should stick to dental and not financial advice. Right. Was always like, you need to max out your Roth IRA, you need to get a Vanguard account. And so that's what I have been doing. It's like, oh, SEP Roth.

scott royal smith (11:45.533)
Lover. Amazing. Salt of the earth. Who doesn't love their mother? You know?

scott royal smith (11:57.265)
Oh, beautiful. Yeah.

Aviva (12:04.202)
Vanguard and it literally within the past week came to me that maybe that's not the most effective strategy or maybe can you talk to me about IRAs the misconceptions and maybe Yeah, how the public could gain from information on IRAs because just like What I was saying there's like it's very hard to figure out what makes the most sense and even if those make the most sense

So I think the really important piece to remember about IRA accounts is you have to remember, like, what is the point? And the point, if we really sit down and think about it, I believe you run into is the fact that, like, I'm going to die.

scott royal smith (15:43.8)
And the only thing that matters actually is my life experience. What happened before then? Nothing we're going to do is actually going to exist beyond us very much. Like how often do you think about people that lived, that died more than five years ago? You probably don't. Why would you assume that you're any different? So if that's the case, then we're actually just free to be able to say, well, what is the life experience I want? Now that is going to be a much more difficult question for you. And this is what I call typically is like step two.

Step one is how to get financially free. Step two is actually figuring out all of this other stuff. The good news is, is how to do all of that is actually really well figured out, right? So you're not alone how to do that. There's nothing to be afraid of on how to do that. So my personal view on it is that retirement is a fool's errand. You don't even know if you're gonna make it to retirement. And that the real point is to really say is, how quickly can I get into the life experiences most aligned and most true with me as quick as possible? How do I do that?

scott royal smith (16:40.48)
And that's the real question. And the question to that is almost never let me slave away for another 20 years until I retire. So we should design our investing and our money in such that to be able to go towards that question if you believe in that philosophy.

Aviva (16:58.534)
Okay, so kick the IRAs or use the IRAs differently? Because I know, kick them, okay.

scott royal smith (17:04.7)
I just kick them. I would just kick them. I would just kick them because you don't need them. Yeah, I mean, between the private foundation is something where you can take 30% of your income and pull it into that. You should be able to have enough deductions to be able to offset a bunch of stuff from your home office deduction, auto deductions, Augusta rule, all of those pieces that come with it.

And then what you really want to be doing is looking for the right kinds of investments to be able to get your taxes down to zero. So if you can qualify as a real estate professional, most of the time that's going to be looking at investments that give you 200 bonus percent depreciation plus some type of annualized return about 30% a year. Oil and gas will give you about 90-ish percent depreciation of whatever you invest in it and return to you somewhere between like 60 to 25.

You can do algorithmic trading on top of this for a section of your portfolio, which will pay you out somewhere between three to 5% a month, right? And so there's just enough money and enough tax advantages to be made where money can just flow to you easily that you don't need to play this scaredy cat game that everybody plays, which is I'm too scared to learn. So what I'm gonna do is just do this thing that they made really easy for me, right? And then I can say, I did the good thing about avoiding taxes.

Aviva (18:17.144)
Wow.

scott royal smith (18:21.388)
And I was like, yeah, but you missed the whole point. So that's why, I mean, in Royal Legal Solutions, like on our website, in the top right hand corner, I have something called the Vault, where I give access to it for everybody. And it's like a, I don't know, if I had to price it, it's like a $5,000 training program. I got like 11 eBooks in there, hundreds of hours of videos, and I train everybody how to do all of this stuff, absolutely for free. And then the only way my company makes money is if you say, you want us to build everything for you, and you want the whole team and everything. But to learn how to do all of it,

scott royal smith (18:50.68)
That's free to everybody at Royal Legal Solutions in the vault in the top right hand corner of the page.

Aviva (18:56.982)
That's cool.

scott royal smith (18:57.9)
So that's my answer to your IRA question. Well, honestly, I think a lot of the stuff is that we just don't know what we don't know and the question is, is who do we learn from? And most of the people we learn from don't really know either. So it's kind of like all of us are just stumbling around in the dark. The only way I learned is because I spent essentially 10 years.

Aviva (19:00.91)
Okay, I'm gonna go. Mom's about to get an earful. Tell her to stick to dentistry.

scott royal smith (19:25.772)
of like sneaking into high net worth groups like Co-Bundance and Tiger 21 and you know, little white lies about what my net worth was at the time to go sit in like those conference rooms and the hot tubs and talk to people and read all the books, but also, you know, talking to the professionals and also helping clients at the same time so I could see behind the scenes of how things work. Who else has opportunity to do that, right? And so that's, there's a way in which I feel like it's my responsibility now to be able to share.

Here's what I learned. This is what it all looks like. I produced into things I don't really talk to anybody anymore. You only will talk to my staff that I train and the course materials, because I like to learn stuff and then pass it on, and then I'm off to learn a new thing, like ice climbing, for example. That's just the way I operate it. That's what my intention is, is to just be able to have that resource. There's no more guesswork.

scott royal smith (20:22.208)
about how do you become financially free. It's already really well understood actually. Like there's nothing else to know or to learn really.

Aviva (20:31.242)
I think it's brilliant. I think we're gonna bring, I genuinely wouldn't say this if I didn't feel this way. I think this will bring a lot of value to our listeners, which is dope because they deserve it. Yes. Scott, I wanna ask you, this is a little different, but I ask everybody in every podcast this question. What in real estate is currently making you happy right now?

scott royal smith (20:42.949)
dopest.

scott royal smith (20:58.376)
Oh, my happiness doesn't come from real estate. So nothing. But inside of real estate, I do a lot of work with LP interests inside of syndications, especially inside of self-storage units and that kind of thing. I mean, that's the section of my portfolio between that and some multifamily pieces that I invest in. But these days, all my investments are all LP stuff with people that are much better investors than I am.

scott royal smith (21:27.756)
you know, as what they do, right? I just surf on the wake of really great people that they wanna make a bunch of money if this whole thing, you know, by making this whole thing work. And then I join in with a bunch of other men and women as a small fish to deploy capital behind these great people that are amazing investors and know how to run this active business called self-storage units or apartments or like whatever it is, because it's not just an asset, it's a business with it. So you're really...

betting the jockey in a number of ways. It's not like you're buying gold and holding on to it. All these are actual businesses.

Aviva (22:00.13)
Hot. Buh.

So for the listeners, just to refresh your memory, an LP is a limited partner. An LP gives a check to a GP, a general partner, and then they get a check back every quarter, biannually, annually. Scott, how do you find your GPs?

scott royal smith (22:25.948)
I get them all through those networking groups. So the really good GPs are never public. Mostly. They're mostly never public. Because when you have to deal, if you're a GP, who's the worst person in your life that you have to deal with? It's just some random person. And where do they come into your life? They just came in off the street and was like, I have money. And then you're like, OK, well, I really want your money. Which you're really in the way to what

So the really good GPs are actually people that only work with selective investors, because they say that actually makes my life easier. So I can focus more on the project. And I don't have to deal with a bunch of people that actually don't know how to act right in this type of GPLP relationship. Because that's really the big concern. So inside of the investing groups that I belong to, they're all paid groups. Spend maybe like $50,000 a year just on being able to have access. Then this is where I go to meet.

other people and of those other people that are worth way more money than I am, then I hang out with them and then cool, I try to like surf in their wake of where are they deploying money and how are they vetting different GPs and it's wherever they're pushing money after I like look at it with them. So I'm this small fish investing with a bunch of other people that have way more experience investing than I do, would know way more about how to vet the GP than I do and I'm just there trying to learn and then deploying capital along with them.

And that's what we offer inside of Royal Legal Solutions. I actually open up to any of our clients that are like our premier clients to say, here's all of the operators and the deals that I invest in. You don't have to pay me anything for this knowledge, but here's all the people that I know, that I trust. And then with that information, you can do whatever you want.

Aviva (24:10.686)
It's such a smart strategy to just follow what more successful people are doing and where they're putting their money. It's, uh, I don't want to say every, you know, 10 out of 10, but nine times out of 10. Genius. So.

scott royal smith (24:24.236)
it will always be better than what I can do. The thing is, if your expectation is going to work out 100% of the time, you're crazy. But all you're trying to do is say, how can I do better than I could do on my own? That's really the only, that's the real measure, not that's absolute perfection of something that happens there. And then, yeah, that's kind of what the company has turned into, is they're like, cool, I had to go do all of this stuff for all these years, and now if you, Aviva,

Aviva (24:27.143)
Yeah.

scott royal smith (24:52.52)
want to come in and join in with my group, then you get to basically accelerate through all the hard work that I had to do. And I'm still out there going to all the stuff to go maintain the relationships and keep the deal pipeline flowing and make sure that we have the right attorneys and the training and all that kind of stuff. And that's really the lever. Because ultimately what I want to see is that more people can become financially free faster. So I have more people to go play with. That'll be fun.

Aviva (25:18.718)
More friends.

scott royal smith (25:21.704)
Yeah, let's go play, let's have fun. This whole thing is supposed to be fun. What if at the end of life, they looked at you, you know? You're there at the pearly gates and they're like, well did you have a good time? You're like, what, I was supposed to be having a good time this whole time?

Aviva (25:22.031)
I love it.

Aviva (25:37.482)
Yeah, that's a nightmare. That is truly my biggest fear. Well, it's not a fear, but that would be my nightmare.

scott royal smith (25:43.46)
I mean, but what about if that's what it is, man? And why can't it be? Why can't we just make it where the whole thing is easy? Instead of trying to make it so hard.

Aviva (25:55.286)
Well, it starts from here, but a lot of people, for whatever reason, can't get there, or don't know how to, or, yeah.

scott royal smith (26:03.572)
Yeah, and you know, it's definitely, it's definitely like what's in the head and the mind. And what I find is that if you can, if you can assuage or soften the survival instinct that we have about like, am I gonna have enough or me and my family gonna be taken care of if something terrible gonna happen to us and I'm gonna be on the street. If you can get your finances and you're that part of your life bulletproofed where we're like, oh, we're actually all gonna be okay. It will actually take you time to actually, even after it's all fine and it's all set up.

you will take you time to even adjust to the fact that actually I'm safe and things are okay because most of us are subtly afraid of not being okay all the time. And then once you're there, then the next piece can like kick off. And you're like, oh cool, I can like that part of my mind settles down. I can become living more in the moment. All those things that everybody talks about, they're like, you should just do this. And I was like, well, all right, how am I gonna do that? You know?

Aviva (26:56.937)
Thank you for that advice. I'll just go back to work now.

scott royal smith (27:00.245)
Thank you for that Instagram post that totally changed my life. You know? Because I had never heard that before and now that I have everything is different. Yeah, I mean it's silly, right? And that's why you gotta attack the stuff at the root. And the best way that I've found to be able to attack it for people that I've helped in life is first getting the finances and then, okay, now you've created enough mental energetic space that you can start to work on like the next layer of stuff. But until then, you know, like, it's freaking damn near impossible.

Aviva (27:08.484)
today.

Aviva (27:27.87)
Yeah, it's so interesting. This has been a really awesome convo, really, really valuable podcast. For the listeners, Scott, how can they find you, find where you are, and find, it's Scott, it's Royal Smith, where can they find your website and company?

scott royal smith (27:46.944)
Yeah, so my name is Scott Royal-Smith. The website is royallegalsolutions.com And then everybody should just go into the vault on the top right-hand corner of the page and start looking at those resources. You should definitely also check out the home page video. It explains how all of this stuff works, right? To say, here's the scope of everything that you're actually going to need to create.

to be able to become financially free in the way this durable financial freedom, what does that look like, where you only have to manage your money for three hours every quarter, which is how long I spend managing my investments through my team. And then we have a ton of testimonials to check out. And there's a way you can book a time there with the team and everything too. So you can check out the testimonials, know it's real. You can get information of here's the system process meeting structure and all the things you're going to need.

on the homepage video and that if you want to really nerd out into the details of how do the individual asset protection, tax strategies, et cetera work, that's all on the vault. So go check all that out and get in touch with us soon. No charge to have a conversation, you know? So I would say have a conversation and the team, no matter what level you're at, will be able to say, this is where you should start. And it might just be like, you don't have enough money for us to really work with right now. Here's a really simple thing you might want to do. And you know.

Here's like a simple LLC that you might want to create and by the way go spend the time in the vault and here's the Targets that you should be going for try to get your income up to like this by doing XYZ things

Aviva (29:10.526)
Wow, amazing. Scott, thank you so much for being on the show. And for those of you listening, we'll see y'all next week.