Going on your own? — Remember the Tale and Pay It Forward

I recently celebrated the Fisher Law Office’s 10th anniversary. For me, it was one of those “Gee, we are still here; the lights are still on, the doors are still open. We must be doing something right” moments.

A lot of writers have written about the act of starting and owning your own business. Author Norman Vincent Peale is often quoted with this one, “Those who are fired with an enthusiastic idea and who allow it to take hold and dominate their thoughts find that new worlds open for them.” A lot of people help along the way as well. So many that you aren’t able to repay them or even thank them. The best thing to do is pay it forward.

There are countless reasons to start your own business. You may think this is your chance to live the American Dream; you may be tired of working for someone else; you may have no other options. these motivations create entrepreneurship and success. But owning any business takes work and lots of it.

In my own story, it was crossing to the other side out of necessity. The business I worked for ran into financial difficulties and out of a survival mode, started letting people go. I was one of them. To make matters worse the economy was shifting nationally throwing a lot of “Me’s” in to the employment market along with the steady stream of young 20-year old’s coming out of college.

Don’t Hurt Yourself Diving Into the Pool
All business owners have a story. Some ran away from a terrible boss. Others were looking for a new spark in life on the long road to self-employment. But what successful business owners have in common is a motivation to succeed.

I am often reminded of my explaining my choices to fellow Texas Tech Law School alum Wade Shelton that I viewed it as crossing a river. Wade told me how courageous he thought it was that I went out on my own leaving the corporate world behind (he was just being supportive — he has been out on his own as managing partner of his own firm since a couple of years after law school). My comeback was simple, “if the forest is on fire behind you (the world of competing with young 20-year old’s) and now the bridge is burning (the unemployment checks are running out) it’s not hard to get motivated to get across to the other side, even if you don’t know what’s there.” As I said, we all have our starting points.

According to the Small Business Association, (“SBA”) the most important thing to know is where to start, and why you’re starting there. A common setback the SBA reports is that aspiring business owners sometimes go into business for all the wrong reasons. “The grass isn’t always greener on the other side of the fence,” the SBA said in order to illustrate the difference in mindsets between running away from a bad situation and running towards a better one.

Starting a business as a “plan B” usually shows those at the helm are less committed than those who decide to go into business with all they have. And that kind of commitment, the SBA said, trickles on down from management all the way through and staff and onto the customers.

In my own case, my mentor’s one warning to me when I opened the firm’s doors was this. “I only ask that if you do this, you be committed to jump off the high dive. I guarantee you there is water in the pool. But if you are still looking for work from someone else you are leaving one foot on the board. All you are going to do is hurt yourself.” I’ve never been one who could dive that well. That image stuck from day one.

Know What Motivates You; Use It
If you have a good grip on your identity and what you have to offer, you will have a much easier time delivering. The prize here should not be income. Instead, it should be the whole package. The income will follow.

Inc.com said that money, as appealing as it might be, is not as gratifying as many might think. The true gratification comes from believing what you are doing and doing it with your all.

So while finances might be the barebones motivation behind being your own boss, the end goal should be to reach financial stability so that work feels more like play. And the best way to get there, Inc.com said, is to stick with what motivates you.

Fear of Failure
Being your own boss is a sexy phrase. Nobody would scoff if you told them you were quitting to start an online business. So why doesn’t everyone do that?

Fear.

We all have to fight through an inherent urge for turning business ideas into financial independence that becomes dampened by a perceived sobering reality that forces us to give up. Have you ever seen the financial planner commercial where the young boy keeps asking his father “why not” on a series of questions about how is father is treated by the financial planner. The more the boy asks, the more concerned the father becomes. The father never says the fateful words “I don’t know.” He has the look of being frozen. Fear of “is he doing the right thing?”

Our fear is what stops us. I know that fear. Every business owner knows it. I never started my business until I had to. But when I had to start it, the fear of starting became replaced by the fear of failure. Most of the time, that fear is a docile beast. Sometimes it keeps me up at night. But when it does, I sometimes do my best work the next day. Remember, it’s not about luck and it’s not about favors. I remind Wade when I get the chance to see him it’s about being too stubborn to fail.

Learn From Those Who Do What You Want To Do
When I knew I wanted to start, my first step was to ask for a meeting with someone who does what I do. My friend, Charles S. Walsh, of Annapolis, introduced me to his law school roommate, Martin Snider, a solo practitioner in Annapolis. He is the one that taught me about the diving board. He also sent me on a trail to meet others I needed to meet. Sometimes I hit gold and gained multiple introductions to others that could help. Sometimes I had an interesting meeting or a stark rejection. But I never wasted my time.

And as unappealing as it might sound, the additional suggestion I make is do not be afraid to subject yourself to the other side—the side you are trying to avoid. Re-examine the past. Visit the past. You may scare yourself into avoiding the exact same life you set out to avoid at all costs.

Keep It Simple
The steps to owning and starting a successful business are simple, as long as you keep your motivation at the forefront. But that message can very easily become diluted and lost over time. Keep your heart and your brain running towards the same goals and do what drives you. It is difficult to fail when you believe in what you are doing and do it carefully, but not too careful so as to avoid the occasional risk.

And if you need help, there are a lot of great lawyers that can help you with these decisions. If you live near us, give us a call. We would love a chance to work with you. If you don’t live near us, give us a call anyway and we will route you to some very good people.

Until then, good luck and good hunting.

Randy

__________________________________________

Related articles

MD Slayer’s Law: Murderer Cannot Inherit from Victim
When to Update Your Estate Plan
The Gun Trust Loophole Exposed by Christopher Dorner
The Fisher Law Office is known for its experience in estate planning, probate administration, asset protection, and business development. Annapolis attorney Randall D. Fisher has practiced for over 20 years, maintains the highest peer review rating for ethics (AV Preeminent) by Martindale-Hubbell, and is a sucker for long walks on the fairways.

Find out how to reach Randy via TheFisherLawOffice.com or find him at Facebook.com/FisherLawOffice, on Twitter @thefisherlawoffice, or at LinkedIn.com/in/FisherLawOffice.

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A West County Chamber Update — Widening of Maryland 175

OK, it is no secret that I am on the Board of Directors of the West Anne Arundel County Chamber of Commerce. So that means I pay attention to what is going on out there because changes in economic impact affect my clients.

On Monday morning, West County got a special surprise: the announcement of $30M in state highway funds to match the $10M provided by a federal TIGER grant to widen MD175 between Reece and Disney roads. This area, which some refer to as the “soda straw,” is the limiting factor preventing the region from benefiting from the widening that has already occurred north of Rockenbach Road, as 6 lanes becomes 2 lanes before again widening to 5. With this announcement, the project is fully funded for design through construction, and is expected to be under construction by 2016, well ahead of the state’s original schedule.

The West County Chamber has long advocated for the widening of MD175 to be expedited in response to the significant growth at Ft. Meade, and we were recognized at the ceremony as a key advocate on behalf of West County, Fort Meade, and the Odenton Town Center by numerous speakers. According to Sen. Mikulski, this project would not have been funded without the support of the local business community.

Why it matters: Everyone in West County is impacted by congestion on MD175 in one way or another. Whether it’s small businesses whose customers can’t reach them, larger businesses whose employees are late to work because of backups near Fort Meade, or the tens of thousands of commuters who pass down MD175 on their way to work or to the MARC station, it’s a crucial throughway whose improvement is long overdue.

So I take this as good work on the part of the West County Chamber. Keep that in mind the next time someone talks to you about joining the Chamber. It is truly not your simple networking group.

As always, good luck and good hunting.

Randy

__________________________________________

Related articles

MD Slayer’s Law: Murderer Cannot Inherit from Victim
When to Update Your Estate Plan
The Gun Trust Loophole Exposed by Christopher Dorner
The Fisher Law Office is known for its experience in estate planning, probate administration, asset protection, and business development. Annapolis attorney Randall D. Fisher has practiced for over 20 years, maintains the highest peer review rating for ethics (AV Preeminent) by Martindale-Hubbell, and is a sucker for long walks on the fairways.

Find out how to reach Randy via TheFisherLawOffice.com or find him at Facebook.com/FisherLawOffice, on Twitter @thefisherlawoffice, or at LinkedIn.com/in/FisherLawOffice.

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Need a lawyer? Five things to remember….

We get it. No one wants to talk to lawyers. But there comes a time in everyone’s life—whether it be good news (Marriage), bad news (Divorce/Estate Administration) or something in the middle (Estate Planning, Asset Protection or Business Acquisitions/Sales)—when you’ll need to consult with a lawyer. And when that time comes, there are a few tips you should consider to make the legal process a whole lot easier and less painful for both you and your lawyer.

But wait! You may be thinking, “Isn’t that what I pay my lawyer for?” Not quite. Consider this: Imagine having a toothache (ouch). Naturally, you’d go to your dentist, who would ask a couple of standard questions like, “Where does it hurt?” or “What medications have you been using to reduce the pain?” Now, imagine if you simply said, “I don’t know” to all those questions. It may sound strange but lawyers are like dentists. Or, in fact, like any professionals who try to help you help yourself. They can only do so much without your guidance. It takes teamwork.

Though lawyers, by definition, are well-versed in the landscape of law, you need to provide background information (details, first-hand accounts, documents, etc.) so they can smoothly steer through the long and winding legal road without making anyone nauseous along the way.

So are you ready to talk to your lawyer? Here are five helpful tips to ensure a pleasant experience and (hopefully) a successful outcome.

1. Get organized. Try to create a clear, comprehensive story of your situation. For example, if it’s an event-related incident (e.g. traffic ticket), you should make sure you write down everything that took place, from start to finish, in chronological order. Create a folder of relevant legal documents. Get a contact list of the witnesses on the scene. Just don’t dump an overload of scattered information on your poor lawyer to sort out themselves.

2. Be detailed. Seemingly frivolous details like the weather may, at first, seem dismissible. But in the eyes of the law, every detail matters; every variable has the potential to help your case. And since your lawyer doesn’t follow your every move (we certainly hope not!), it’s your responsibility to be your lawyer’s eyes and ears so they are looking at the whole (and most importantly, accurate) picture. Give specifics (names, dates, and exact incidents) and factual information to produce that crystal clear view.

3. Be honest. Plain and simple: Don’t lie. Remember that you and your lawyer are on the same team. Your lawyer cannot share confidential information with anyone, unless you give them permission to do so. When you start omitting relevant facts or adding fictitious information to your story, it’ll only hurt you in the end. Be prepared to explain everything to your lawyer—the good and the bad. This will help them give you the right advice and guidance to ensure the best possible outcome.

4. Ask to clarify. If you find yourself confused by all the legal jargon you hear, that’s okay. The law can get confusing, and this is not the time to guess at meanings or pretend to understand legalese. Just let your lawyer know, and they should do their best to explain things in layman’s terms. Getting a clarification or two may go a long way toward putting your mind at ease—and help your lawyer do a better job of handling your case. It’s both you and your lawyer’s job to fully comprehend your legal situation.

5. Keep them informed. Things are bound to change. And when they do, it’s imperative to update your lawyer. Each small detail or development can dramatically change your legal situation—for better or for worse. Some legal situations may take a longer time to resolve so it’s best to keep in contact with your lawyer as new relevant updates pop up.

There are a lot of great lawyers that can help you with these decisions. If you live near us, give us a call. We would love a chance to work with you. If you don’t live near us, give us a call anyway and we will route you to some very good people.

Until then, good luck and good hunting.

Randy

__________________________________________

Related articles

MD Slayer’s Law: Murderer Cannot Inherit from Victim
When to Update Your Estate Plan
The Gun Trust Loophole Exposed by Christopher Dorner
The Fisher Law Office is known for its experience in estate planning, probate administration, asset protection, and business development. Annapolis attorney Randall D. Fisher has practiced for over 20 years, maintains the highest peer review rating for ethics (AV Preeminent) by Martindale-Hubbell, and is a sucker for long walks on the fairways.

Find out how to reach Randy via TheFisherLawOffice.com or find him at Facebook.com/FisherLawOffice, on Twitter @thefisherlawoffice, or at LinkedIn.com/in/FisherLawOffice.

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Use of LLCs for holding real estate: Pros and Cons

Use Liability Insurance or Use an LLC?
Although there are many benefits to holding real property assets through an LLC, a limited liability company may not be the best holding vehicle for every property owner. For many real estate investors, the trouble of forming and maintaining a company isn’t worth protection from the theoretical threat of a lawsuit, particularly when affordable liability insurance is available.

That said, real estate investors that rely solely on insurance as a means of protection from personal liability take a significant risk. Liability policies typically have limits, exceptions and carve-outs. While the chance of a loss that exceeds policy limits may be remote, if it happens, the consequences can be devastating. If one is evaluating the difference, you have to carefully examine what an insurance policy will and will not pay.

Limit Your Personal Liability
LLCs will limit personal vulnerability to potential lawsuits related to the property. When an owner of an investment property leases it to a tenant who decides to throw a big party, what happens if one of the tenant’s guests falls over a balcony? In today’s legal climate, it is quite possible that the injured guest would pursue a claim based on the “unsafe condition” of the rental dwelling. More often than not, the owner would be named in any lawsuit resulting from the incident.

If that rental property were owned by a real estate investor individually, he or she would be named in the lawsuit and would have to defend his or her personal assets from the plaintiff’s claims. In contrast, if that property were owned by an LLC, the owner’s risk exposure would be insulated by the protection of the company, leaving only the assets owned by the LLC (as opposed to all of the owner’s personal assets) exposed to potential lawsuits.

Pass-Through Taxation
Under the default tax classification rules, the IRS classifies a real estate holding company with one owner as they would a sole proprietorship, namely as a “disregarded entity.” As a result, income and capital gains from the LLC pass through directly to the owner, who would only have to pay taxes as an individual, while still enjoying the protections offered by the LLC liability shield.

Since there is no separate LLC tax, the owner can avoid double taxation on both the rental income generated by the property and the appreciation in value of the property upon disposition. Moreover, the owner of a single-member LLC can deduct mortgage interest similar to a sole proprietor based on current IRS rules.

Real estate holding companies that have several owners are known as “multimember” LLCs and are generally taxed by the IRS like partnerships, meaning that the LLC files an “informational” tax return, but does not actually pay taxes itself.

Multimember LLCs also enjoy the benefits of pass-through taxation as the LLC passes its profits and losses through to its members, who report their portion of the LLC’s business income or losses on either a Schedule C, K or Form 1065 with their individual income tax returns. This means that both single member and multimember LLCs offer the benefits of pass-through taxation of profits and losses and limited liability and personal protection for the owners.

The Right Entity Can Make Things Easier
The correct entity offers  benefits relative to other forms that aren’t necessarily unique t0 the use of LLCs to hold real estate investments.

  • They have much greater flexibility delegating responsibility than either a corporation or partnership. Corporations are statutorily required to have officers and directors; LLCs can be managed by owners or third-party managers.
  • LLCs may pay lower state registration and maintenance fees than corporations.
  • LLCs can take advantage of flexibility in distribution of profits, per the LLC’s operating agreement. Cash flow distributions do not have to be pro rata according to ownership like an S corporation; Owners may reward “sweat equity” effort of select members through appropriate distributions of available cash flow.
  • Unlike an S corporation, foreign ownership and investment in U.S. real estate is possible through an LLC.
  • LLC owners may transfer their ownership in real estate holdings by proactively gifting the company’s membership interests to their heirs each year. Over time, it is entirely possible to effectively pass ownership of real estate owned by an LLC to loved ones without ever having to formally execute and record a new deed. This enables property owners to avoid transfer and recording taxes and fees, which can be substantial in many states.

Don’t Rush; Explore Your Options
A  properly formed and operated LLC does limit the personal liability of the owners, as much as U.S. law allows, by affording the owners no personal risk above and beyond their investment in the company—but, in many instances, so do corporations and certain partnerships. There is simply no way to eliminate all the risks associated with starting a real estate investment business, but you can easily improve your chances of success by complying with the corporate formalities required by applicable laws, even though these steps may seem tedious and somewhat confusing.

It is much easier to purchase the property through the LLC to begin with, as opposed to trying to transfer the real estate to an entity at a later date where a lender might have to consent to the transaction. An LLC may not offer any more or less protection from outside lawsuits than a properly formed and operated corporation or limited liability partnership, but it does offer many other advantages that make it the most desirable form of entity in many cases, particularly with respect to real estate holding companies.  

There are a lot of great lawyers that can help you with these decisions. If you live near us, give us a call. We would love a chance to work with you. If you don’t live near us, give us a call anyway and we will route you to some very good people.

Until then, good luck and good hunting.

Randy

__________________________________________

Related articles

The Fisher Law Office is known for its experience in estate planning, probate administration, asset protection, and business development. Annapolis attorney Randall D. Fisher has practiced for over 20 years, maintains the highest peer review rating for ethics (AV Preeminent) by Martindale-Hubbell, and is a sucker for long walks on the fairways.

Find out how to reach Randy via TheFisherLawOffice.com or find him at Facebook.com/FisherLawOffice, on Twitter @thefisherlawoffice, or at LinkedIn.com/in/FisherLawOffice.

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Aging in America: Stuck in the middle

CBS’s Sunday Morning had a very thoughtful piece on Aging in America. The point of discussion was parents who run out of money before they die and the impact of the life change that this situation brings to the whole family.

I overheard the piece this morning and thought it worthy of further discussion. Tonight I am just putting the link here for those who missed it. We’ll discuss the impacts here further at a later date.

Aging in America: Stuck in the middle

http://www.cbsnews.com/news/aging-in-america-stuck-in-the-middle

Given that it is Sunday and the rituals of football have finished playing out, I can’t help myself from commenting on the Washington Redskins. For those of you hiding off the grid and away from televisions, you don’t know that the team’s third string quarterback, Colt McCoy came off the bench in the second half and played well enough to engineer a team win. Mr. McCoy is a graduate of the University of Texas, as am I. His doing well created a nice warm spot in my heart as I like to see all of my fellow alums do well — even those who play for the Pittsburgh Steelers.

But what I really loved about the day was the reaction of someone in the Washington media who immediately tweeted the following.

“Bench him immediately and trade him for two second round draft picks!”

It just reminded me of the old story of the journalists in the Ivory Tower who watched the battle rage down below and then rode down the hill to shoot the wounded!

Every one have a great week and, as always,

Good luck and good hunting!

 

Randy

__________________________________________

Related articles

MD Slayer’s Law: Murderer Cannot Inherit from Victim
When to Update Your Estate Plan
The Gun Trust Loophole Exposed by Christopher Dorner
The Fisher Law Office is known for its experience in estate planning, probate administration, asset protection, and business development. Annapolis attorney Randall D. Fisher has practiced for over 20 years, maintains the highest peer review rating for ethics (AV Preeminent) by Martindale-Hubbell, and is a sucker for long walks on the fairways.

Find out how to reach Randy via TheFisherLawOffice.com or find him at Facebook.com/FisherLawOffice, on Twitter @thefisherlawoffice, or at LinkedIn.com/in/FisherLawOffice.

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