How To Build Personal Wealth In DTC

On today’s episode of Secrets to Scaling Your Ecommerce Brand, I got a chance to chat with an incredible CPA, Chase Insogna. All the way from down in the great state of Texas, we had such a good conversation. He is the points guru.

We talked all about how to leverage points to help sort of offset some of your personal wealth goals. We talked about building personal wealth and how that’s so different than building wealth with inside of your company. We talked about some strategies around that, just had a really good conversation.

If you were wanting to build up your personal wealth, this episode is for you. Hey guys, thanks again so much for tuning in today. I have something very special for you that you are going to want to know all about.

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Check it out now or down in the show notes. Hey guys, Jordan West back with another episode of Secrets to Scaling Your E-Commerce Brand. I’m really excited for this episode today because it goes with one of the passions that I have, is to see business owners actually thrive and actually be number one profitable and number two, actually build some wealth and maybe some actual generational wealth.

And Chase and I are going to be talking all about that today and some of the techniques that he helps people use and really looking forward to diving into this conversation today. So Chase, for people who don’t know anything about you, tell us just a little bit about who you are and what you do. Yeah, thank you for having me, Jordan.

So Chase Insogna licensed CPA in the state of Texas. We work with clients all over the country in the United States. A lot of people don’t realize that CPAs have reciprocity in every state, so we don’t have to be licensed in every state to work with you.

So we work with clients all over the country, but I have a team of 20 plus people currently and we’ve been in business since 2011. And we focus on kind of bridging the transactional side with the advisory coaching strategy side. And so keeping that all under one umbrella helps bridge that gap and to be on track for December 31st and making sure we’re capturing everything as possible.

So just really trying to help business owners, minimize taxes as much as possible and making sure they’re filing taxes correctly, just as with an S-Corp or partnership or whatever it may be. And then building wealth at the end of the day is what our ultimate goal is while you’re building your business. You know, there’s a stat out there from Forbes, like 85% of businesses never sell.

And a lot of people don’t realize like at the end of the rope, when you’re looking to sell or maybe you’re forced to sell, you might not get what you want. So we try to educate business owners on building it, building your own personal wealth while you’re growing your business. Yeah, awesome.

That was a big mistake that I made when I was first in business was really just reinvesting and re-plowing everything back into the business, right? And thinking, oh yeah, this is the right thing to do to grow the business. And then you realize you’re like, wait, we’re actually not doing much for ourselves here. And then when, an economic downturn happens and you realize, oh no, my business is no longer serving me, you don’t have anything, right? And so we made that mistake years ago, changed things.

But I’m really looking forward to having this conversation. Number one, for those of you who are listening to this, not watching this, Chase, I love your shirt. I’m billing you for this conversation.

I’d love to know where this tongue-in-cheek shirt came from because I… I actually found it online, but it’s our company shirt. So I got my logo on the side here. So, so why? Because there’s got to be a story behind this.

Because I’m thinking about my accountant. And interestingly, my accountant does not ever charge me for any conversations that I have. He does charge me a heck of a lot of money.

It’s funny, like way back in the day, I was actually going to tweet this yesterday. I totally forgot. Way back in the day, he used to charge me a thousand bucks a year for a corporate year end.

And I was like, ah, Eric, that’s not enough. He’s like, oh, don’t worry. This is like when I was like 22 or 23.

He’s like, don’t worry, I’ll get you eventually. Yeah. He got me.

He got me. Yeah. It derives from attorneys and CPAs, usually in social situations.

If you tell them what you do, they’re like, oh, let’s talk about taxes. So that’s where it comes from. My attorney friends, they might be like a water attorney, but they’re like, oh, I’m in a divorce or I have a family issue.

I don’t know about these things. That’s where the shirt derives from. Because if you tell them you’re an accountant and they’re like, we want to start talking to you about accounting stuff? Yeah.

Oh, I love it. I absolutely love it. Well, hey, let’s dive in.

You’re not billing me for this conversation. So let’s get in. I want to try to extract as much from that brain of yours as possible.

Let’s talk about the lowest hanging fruit of building wealth as you know, these are direct consumer owners that are listening to this conversation. We’ve got about, I would say about 30 to 40% of the people out there are also agency owners who listen to this podcast. Where is that first lowest hanging piece of fruit to start to actually build personal wealth and start to extract from your company? We kind of have four phases in a white paper blog we have put together.

So kind of the first phase, starting on your garage, maybe a room in your house and selling stuff under a hundred, maybe 200,000. Really when we can start contributing to wealth is when you’re profiting 50, 60 K plus after expenses and moving to an S-corp election. You know, that’s kind of a first level base point.

And then from there you should have reached a point where you can cashflow the entire 12 months. Maybe you’re cash flowing yourself or you’re borrowing money, but at the end of the day, cash is a little bit more stable. So we don’t recommend building wealth from day one because you’ve got to build up your short-term savings, especially if this is your only gig and you’re just working for yourself.

You know, we’re all about having buckets of money in different places. So short-term cash, making sure you cover yourself in case one of your big SKUs gets kicked off Amazon or something. You want to make sure you can pay the bills and keep cash moving without having to go borrow it expensively.

I just want you to stop right there for a sec, Chase. Sorry, this is classic. Everyone who listens to this podcast all the time knows.

I’m not going to let you finish your four points quite yet. I got to dig into one of these here. So when you talk about buckets of cash, right? Are we talking like, it’s interesting.

One of the best things that I ever did when I first started in business was profit first. One of the worst things I ever did in business was continue to run profit first as we got bigger and bigger. What a horrible way to run a business finances as you grow.

To me, this does not scale, but you’re talking about these buckets of cash. Are you talking like a semi-profit first kind of mentality with this or what does this look like? Yeah, good question. And I totally agree with you.

It’s not doable in business. Having 11 accounts and moving money around in different buckets is not advisable. But what I, just kind of personally like talking about just a spectrum of buckets of money, you’ve got short-term savings, you’ve got some IRA, you got 401k, you’ve got your business cash that you keep.

Like I have a bulk of cash I keep just as emergency in case I need to borrow against it or continue funding operations. And those are the buckets I’m referring to. And depending on what your business is, just the ultimate goal is avoid borrowing external money in an e-com business.

Obviously it’s necessary. And when you’re starting out, but at some level, our clients move out of that. They have enough cash.

They can borrow against themselves and leverage credit cards, pay them off every month. And that’s what we’re trying to move towards while we’re moving through these initial phases of e-com into kind of phase three, phase four. And so once you get to that point, certainly tax strategy comes in, saving for retirement, paying your spouse, paying your kids, et cetera.

Gotcha. Now this is something that you recommend. Let’s dive into the tax situation.

I think a lot of people that are listening to this podcast, they’re a little bit more sophisticated. Most of the people that reach out to me are doing kind of eight figures plus for the most part, probably agencies a little bit less, but agencies, again, a heck of a lot more profitable. You guys all know that.

That’s why I have brands and agencies in my portfolio because I just love them both. But I really like the cash that an agency provides. It’s a beautiful thing if run correctly.

What are some of these tax strategies that you start to talk about? You talked about putting, it’s interesting because I’m coming at this from, I own American companies as well, but also I’m coming at this from a Canadian perspective. And so we’ve got all sorts of interesting tax strategies that we use here, including trusts and all of that kind of stuff. Does that kind of go across the board or are we kind of country-specific when we’re talking here? More country-specific because Canada is different in the trust side where you can shelter tax savings.

Here in the US, not so much the case. Yeah. I mean, you guys have a bunch of other ways that you can shelter things, right? I’m mostly discussing US taxes strategy here.

Yeah. Awesome. And I would say about 80% of the people who listen to the podcast are based in the United States.

So this is very relevant for you. We were talking a little bit before about some strategies around extracting more of your company when it comes to points programs and all of this kind of stuff. Can you dive into that for me, Chase? Yeah, sure.

We mentioned before we started this call, I self-proclaimed points and miles expert, but I’ve been doing it for a long time. So I have millions of them, points and miles, but I travel. I like traveling the world.

My hobbies travel. I love traveling. So when I do it, it’s business first class, like five-star hotels, all in points.

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Let’s take a quick break. Hey guys, just a quick note from me. You know, if the beginning of this year has been absolutely brutal for ads, you are not alone.

There’s a lot of people out there that are absolutely struggling. Now, we have not been seeing nearly the carnage that a lot of you out there have been seeing at UpGrowth Commerce. And so I put together this master document.

It took me hours upon hours to put together for you guys, and I want to give it to you guys for absolutely free. And so this walks through the three big fixes that we’re seeing to fix your Facebook ad account in 2024. And I really do think that this is the way.

Again, we’re not seeing those issues, barely at all, in any of the accounts. And we handle a lot of accounts between the brands that I own, between everyone else that we work with at UpGrowth Commerce. We’re just not seeing those same issues that a lot of people are seeing.

And so I’ve identified these three huge buckets, and I’ve got a master document that walks through all of that. So if you guys want to go to www.upgrowthcommerce.com slash adproblems. That’s upgrowthcommerce.com slash adproblems.

And download the resource from there. I think that you guys are going to get a ton from this document and hopefully be able to turn your ad account around. Now, remember, if this is not an issue for you, that’s totally okay.

But if you are having issues with your ad account in 2024, I highly recommend going and downloading that resource. Again, upgrowthcommerce.com slash adproblems. Now, back to today’s episode.

Just a demo. I went to Bali for two weeks over the summer. I think I spent maybe like two grand in cash.

The rest of it was points, saying it. So you reach this Bali, which is not cheap. But anyways, yeah, we try to kind of a wealth building tool, especially with e-com.

You’re already spending the money. We try to get clients in the right credit cards, get them moving in the right direction on just accumulating points. And so programs like Chase here in the US, you have flexibility in what you want to use it with.

So people like cashback, buy gift cards, not recommended for me, but you can also transfer it to programs to pay for travel to get more value out of that if you’re doing hotels and airfare. So if you’re taking the family of four to Orlando for Disney, why do cashback and why pay for it after tax money when you’re already spending it in your business and you can use points and miles to send the whole family down there for virtually free? So is cashback, does like in the United States, does cashback come back to you and be taxed? Or is that all like anytime that you’re getting cashback from your credit card, is that an untaxable benefit? Good question. So two things there from a business card, yes, taxable.

From a personal card, no. So take it what you will. I can’t really give you advice there, but personal cards are more advantageous.

Gotcha. So those business cards can come back and actually be taxed as personal income or is that being taxed as corporate income? Corporate. As corporate income.

Okay. That is not the case in the great country of Canada. So guys come move on up where we’re looking for another couple million great people here.

Yeah. And that’s why we recommend programs like Chase or Capital One or Citi. Those are like flexible or Amex even.

Amex doesn’t do cashback, but Chase specifically because you can build up the points in their system and you don’t have to have cashback. You can use it for other things. You can pay for travel.

You can move it to your preferred travel partner and get value out of there. You can buy stuff on their portals. So that’s why we’re recommending those types of platforms to build upon with spending personal and business.

Gotcha. So Chase, you are the self-proclaimed points expert. Tell me what is the best hack that you have when it comes to building up points and then even like transferring within systems and all that kind of stuff.

On this podcast, we’re straight tactical. I just want the goods. I don’t want like a general idea.

I want you to tell me what to do. Yeah. I recommend starting with Chase business personal card.

Number one, if you’re married, never get joint credit because you miss out on the bonus. So each of you and your spouse should be getting the same cards, but over time so you can get the bonuses. And is that just a good principle in general to like not go joint on as much as you can? Yes.

Okay. Yes. Because when you go joint, the card shows up on both of your credit reports, even though it’s just one card in America.

So it’s better to have your own credit card and you’re getting the bonus. Number one. Number two, you’re not sharing credit lines on each of your credit reports.

And then mainly listen, Jake, sticking with one program to start is the easiest, just to kind of educate clients and get them using it. And then my wife always laughs at me because I like on my cards, I have typed out like what to use it for. So, this card, 2X spending this card, 5X dining and travel.

I kind of have it taped on there, but people laugh at me and that’s how I keep up with it. And then just using the right cards for the right spending, like MX, I have multiple cards, but over 5,000, I’m using the platinum card because you get one and a half times. One of the gold cards, I’m getting 4X on advertising and dining.

On the other card, I’m getting 4X for gas and social media. So just using the right cards for the right spending, it helps maximize the bonus points a lot faster. And so I don’t pay cash for anything.

Everything’s on a credit card. Even when I’m buying like $1.50 drink at the convenience store, it’s all credit for me. But the one rule here is it should be paid off every month.

Accruing balances on a points card is 25, 30%, and that’s something you should never do. Absolutely. That kind of negates the purpose of these cards, right? Is when you keep a balance accrued on 100%.

Chase, it’s super interesting. Is there a place where people like where you talk more about this kind of stuff? Like are you doing TikToks or reels or anything like that? No, but I should. Perfect.

Perfect. That’s all my consulting back to you, Chase. And I am billing you for this conversation.

So thank you. Thank you. Awesome.

What other tips and ways do you have for business owners to start to build real wealth outside of their main businesses and corps? I would just say, obviously, one is focusing on your own cashflow, but really drilling down on your own personal budget and figuring out what you can afford to put away, what your goals are in life, where you want to go. I mean, it doesn’t all have to be retirement accounts. It can be brokerage accounts too that are taxable and just starting to build that up.

And I manage my own portfolio. I do have dividend paying stocks and high yielding. So that’s what goal I’m working towards in early retirement.

But in general, take care of your family. Just make sure you have the right savings in the right places and always having something short term. I do have 15 rentals, but I’m not ultra leveraged if I have the cash to take care of it when I need it.

So come a financial crisis, I’m not the one that’s going to be out on the street. But being responsible with your money, managing your money properly, profit first mentality, as you mentioned, but not so much when you’re in the seven, eight figure range, things are a lot different. And you’re not enveloping $15,000, $20,000 savings a month.

You’re just putting it somewhere to earn interest. I still think I love for a while that I was following Dave Ramsey years ago. And I just remember the big business people always commenting on here.

And I’m like, guys, this isn’t for you. This is not for you. We all go through these phases just because people need to understand how to like literally envelope money, right? Like when you’re in this situation and you’re really bad with money, you have to figure that out at first.

And then eventually you grow and you figure out other ways to do it. Yeah. I’ve been doing it for over 25 years and 90% of people I’ve ever talked to should never have a credit card and our cash basis.

The other 10%, like your audience, it sounds like here is financially savvy. They can manage debt. They can leverage credit card points.

They can buy property with debt and invest their money properly to earn enough to pay the interest on it. So those are people we’re working with and moving towards those goals. Yeah.

Let’s talk about how people and families can protect themselves. What I’m trying to get at here is a lot of people treat their business, especially if they’re, say it’s them and their spouse or the primary shareholders or it’s a partnership or something like that. And they really treat that kind of like their own money.

And I think what can end up happening is those things can get very intertwined very fast. What do you recommend for people to be able to have a separation, especially for liability? Yeah. The key is if you’re an S-corp or a partnership, a corporation, it depends on what your structure is really.

Most of you work the S-corp tier. And so the biggest thing is just transferring the cash to your personal account and dealing with it in your personal accounts. That separates the liability from the business.

And we’re heavily instructing our clients when we’re seeing transactions come through to avoid all personal transactions in the business. And that separates the legal liability, usually, if you do it that way. A lot of people get in trouble because they’re paying their personal taxes with the business because they think it’s a business expense.

It’s not. It’s your personal taxes, unless you’re a C-corp. And so we advise to do it properly.

And here’s your payroll. Take the rest of it as owner draws. And that keeps it clean.

Yeah, I got you. What is your recommendation to clients when they’re like, hey, I can get this extra million of funding, but I’m going to have to give a personal guarantee? Where do you advise your clients on there? And I know this obviously isn’t black and white, but. I mean, it really boils down to kind of personal net wealth.

What do you have on your personal balance sheet? I mean, some people like to be over leveraged. I, CPA, I’m not an ultra leverage type guy, more conservative, just the nature of my, profession. But I try to advise clients to not go over leveraged and make sure there’s some type of cushion at the end of the day that if things went awry, they would still be okay and be able to live.

Yeah. I want to give a little personal example here of something without getting too deep into it here. But if something to really look out for guys and something that happened to me recently, not something I’m talking about a lot on social or anything like that, but I obviously own a bunch of different businesses had and lots of times I will sign things without looking when I trust people, which do not send me something to sign.

I’m not going to sign it. Okay. Just because you said that, but the lots of times I was busy threat that they’re like, Hey, here’s the contract.

This is what it’s for. So I guess I had done something like that and signed for some business card ended up being in my personal name. And I didn’t get paid for 19 months.

It was only a really small balance of like 200 bucks. I had no clue. I’ve never checked my personal credit in my life and went to go get a business loan.

And they said, Oh no, you don’t qualify. And I said, sorry, what, what do you mean? I don’t quite have like a $50,000 loan. And it was like one of the actually a guaranteed one through the Canadian government.

And they’re like, yeah, no, you don’t qualify. Your personal credit score is so bad. I’m like, Hey, talk about it.

I’ve never made a bill payment in my life. Like just don’t, I’ve never even carried a balance on a credit card. Never once in my life.

And they’re like, well, yeah, you’ve got this one that you haven’t paid for 19 months. Just think about that guys. Think about that, that this can happen so fast and ruin your personal.

So my personal credit, they said, look like somebody who had gone through a bankruptcy and it looked that bad. And so luckily we’re going to get it all dealt with and stuff, but this is a massive lot like that to me is like, luckily I don’t have any of our properties that I’m personally going to have to remortgage this year or anything. Otherwise it like absolutely been catastrophic.

So just wanted to throw that story out there since we’re talking about this kind of stuff and things to look out for chase, any other things to, with that story in mind, any other things to look out for to protect your personal net worth and your personal wealth? Yeah, no, that’s a great example. There’s so much fraud happening these days here in the U S you can get credit reports for free from each of the bureaus once a year. And so I would recommend every four months getting the different credit report and you get three a year, one for each of them.

So just checking it, if you’re doing that every four months, you would have caught it early, but that’s an advisable tool to, just make sure you’re protected because especially in business, your stuff’s floating around all the time and all different places, EIN numbers, socials, like it’s out there and getting credit cards here in America is fairly simple if you are stealing somebody’s personal data. And so just watching your own financial balance sheet and looking at your personal credit randomly will be helpful. Yeah.

Awesome. That’s great. Okay.

So I’ve got to ask you the question that I asked everybody who comes on the podcast. What is your secret to scaling? Good question for me, I’ve done it organically. You know, we could be hyper-scaling ourselves in our firm and take on leverage, but that’s not just never been my mindset.

So for me, it’s going organically, taking it in the slow route, some would say, but over time it’s paying off for me and we continue to build our team and continue scaling, having the right clients and just going through all those nuances of owning a business. But I would say everybody wants a lot of things quick. That’s never been my mindset.

I like slow is steady and I’m okay waiting five, 10 plus years for it to pay off. I mean, that’s kind of where we’re at today and building wealth. Awesome.

I absolutely love that. Sounds like wisdom to me, Chase. So thank you so much for coming on.

I do have three more questions for you. I hope you’re ready. Let’s do it.

Awesome. First question, favorite tool or app you’re using right now? Good question. I would say let’s just stick with points and miles and the Chase ultimate rewards out so I can transfer points.

Sweet. Okay. That’s great to know.

I think if anything, guys, if you take anything from this, look into that card. If you’re not using it, we do not have access to that card in Canada. I’m a big points guy to chase.

I’ll tell you, man, I haven’t paid for a vacation in years and we vacation all the time with my family. So I’ve always looked at all the chase stuff and I’m like, why don’t we get that? Awesome. Favorite podcast or audio book that you’re listening to right now? Well, obviously this podcast, that’s my number one.

I also listened to the compound and friends just because I like financial management and portfolios on like a financial side and listening about markets. But that one I listened to a lot. Cool.

Awesome. Chase, you just found out you have a year to live. What changes? Travel more.

This is what I love to do. So see more things, experience more things. That’s what I would do.

Awesome. Well, Hey, thanks so much for coming on the podcast. Chase, where can people connect with you and find out more about how you help people as a CPA? Yeah.

Thanks again for having me. You can hit us up on our website. It’s insomnia CPA.

It’s I N S O G N a CPA.com. And to reach out to us, happy to have a conversation. You know, my team is reaching out one couple of business days, if not the same day, and let’s just see if we can work together and we’re in the right bed. We don’t fear for everybody, but happy to have the conversation, see how we can help.

At the end of the day, we’re just trying to help people and bridge the gap between transactional and a bookkeeper accounting services with the controller advisory budget, forecasting cashflow, forecasting, coaching, do a lot of like operational coaching and what’s the right software to use to be efficient. And then taxes and tax planning and having a strategy there. So you’re on track for December 31st.

Awesome. What this sounds like to me guys is a lot of proactivity comparatively, like a lot of bookkeeping and accounting services are really backwards looking. Right.

And what this kind of sounds like to me is a lot more forward looking strategic and that’s how you get better. Right. And that’s how you can actually plan and help you sleep at night, in my opinion.

So Chase, thanks again so much for coming on the pod. Really appreciate you guys. Remember everything that Jason I talked about today will be down in the show notes.

We are religious with our show notes. So please, please, please check those out. I will have a link to follow Chase and to also check out the company as well.

So Chase, again, thank you so much for your time today. Thanks for having me. Hey guys, thanks again so much for listening to today’s episode.

You guys know how much I appreciate that so much. Again, I want you guys to be able to unlock the power of all of that data that you have with Salvat Advisors Leverage Playbook. Discover hidden wins and get a tailored pitch deck just for your brand.

Elevate your business now at salvat.com. That’s S-A-L-V-I-T.com. And remember everything that we’ve talked about, including the link to the Leverage Playbook is down in the show notes. Have a great day.