The Secret of the Rich

Welcome to Mastering Business Basics. Today, we have a very special guest, Sally Gimon, and she's going to teach us a few things that even in the 24 years I've been doing taxes, I had not learned. And I love learning about new things, and I love saving people money. So this is going to be, I think, a very interesting conversation if you are tired of handing over so much of your hard earned money to the federal and state governments.

There is a reason the uber-rich pay so little in taxes and you are about to find out.

Here is the special link I mentioned in the podcast that could change your future: https://thetrustisyou.com/?rf=XUtkxzRw0d9ArcOtvnpD

Transcript

The Secret of the Rich w/ Sally Gimon

Roger: Welcome to Mastering Business Basics. Today, we have a very special guest, Sally Gimon and she's going to teach us a few things that even in the 24 years I've been doing taxes, I had not learned. And I love learning about new things, and I love saving people money. So this is going to be, I think, a very interesting conversation.

Roger: Welcome, Sally.

www.SallyGimon.com: Thank you for having me, Roger. I appreciate it.

Roger: Good to have you here. You want to tell us a little bit about your background and how you got to the point where you are now? And I always ask people, as they're going through their business journey, some of the mistakes that they made along the way also, and what they learned from them that brought them to where they are now.

www.SallyGimon.com: I appreciate it. I became a real estate investor in late 2018 when my mom got sick 2000 miles away from home. She got septic to the blood. She was on a ventilator for 13 months and in the hospital for 15 months. Thank God she got better. It was a trying time for us all. In 2019, my mentor helped me wholesale seven bank properties nationwide. I don't know if you realize banks can't hold properties, so they were some ugly properties, but I made a quite, I paid off $184,000 in debt and I had $50,000 in my bank account for short-term capital gains. I was a rock star in my real estate group.

My mom, who's from Ireland, we canceled a St. Patrick's Day party in 2020 because of COVID.  April 1st, 2020, my three properties did not pay me, so I had no money coming in. And then April 4th, my CPA called me to congratulate me. He actually said, congratulations, which cracks me up. My tax bracket went from 22% to 24%, and I owed the federal government $94,000 in short term capital gains. I went to bed crying that night 'cause where am I gonna get an extra $24,000? Have you ever heard of an older book called The Power of Your Subconscious Mind by Joseph Murphy? 

Roger: I've heard of that one

www.SallyGimon.com: it's from the 1930s, so some of his examples are a little bit old, but you know that if you put a thought in your head and when you sleep on it, you come up with a solution. So on April 5th, I wake up at 5:00 AM in the morning. I knew I was gonna take a HELOC off my paid off house, which defeats the purpose of being paid off. And I had a copy of a book called What the Rockefellers Do. A gentleman in my national real estate group, Garrett Gunderson, wrote the book, it's now called What the Billionaires Do. But I had read it and I'm like, the Rockefeller Spend Thrift Trust is called The Office. Let me start researching the Spend Thrift Trust. It took me five months. I started both my business trust and my beneficial. 

The law firm I now represent and I started doing a mastermind in my real estate group to teach other investors how to stop paying taxes on all their profits.  And unfortunately the gentleman who ran the group, he got the trust, but he didn't shut down his S corp. I don't know what happened at the S corp, but he got sued for a million dollars. He's like, I have the trust. I'm like, no, no, no, no. They sued the S corp, not your trust. And the real estate group disbanded and I started my own company in March of 2022, and I get to help business owners and investors all over the country save very nice numbers and taxes.

Roger: Wow, that is great. What is-- I mean, I would assume that a business would have to make a certain amount of money before this really does them any good.

www.SallyGimon.com: Correct. My tagline is, business owners, entrepreneurs and franchisee owners, and 1099 income owners who make at least a hundred thousand dollars gross per year before they take anything out will save five figures in taxes every single year, year after year, generation after generation. The Rockefeller spend thrift trust is seven generations old and has over 400 people under the same EIN or employee identification number. And, now, learn from my $94,000 tax bill, my five months of research. I just wanna help other people learn how to save taxes too. 

Roger: Now, when you say $100,000 gross, the thing that comes to my mind is, well, a lot of businesses starting out, you're more concerned about the net amount of profit. I mean, you can make $100,000 of gross and have $100,000 worth of expenses, so you're really not making any money coming out of the gate.

www.SallyGimon.com: Correct. To give you an example, this actually was a phone call. He got on my Zoom, January 3rd, 2025, Virginia 1099 salesman.  He was in the military. He's a defense contractor, um, salesman. He knew in 2024 he made $150,000.  He drove a 10-year-old car, lived in an apartment with two roommates and had nothing to show for it. So, he thought he was gonna make more money in 2025, but we used it $150,000, 90% on federal taxes.  It's $25,962. And then Virginia State income taxes, I think they're 5.75 if I remember correctly. He also had an additional $8,625, so for the full year, he got to save $34,587. He can use his money to buy a new car, to take his family on vacation, give to his favorite charity, save for retirement. What John's gonna do, he's gonna take that money and put it on a down payment on a townhouse in Northern Virginia this year, and he'll never have to pay it back.

Roger: Wow, that sounds pretty good. The thing I guess that's wondering me is how you set it up from a legal standpoint. I mean, I know all the different legal formats for businesses, but I've never really heard of a trust being set up to run a business before that. I guess that's what I'm trying to wrap my head around.

www.SallyGimon.com:Correct. Basically, you don't need to change the paperwork, you know, the, the headings or anything else. Keep your business name. The only thing you're gonna change is you're gonna open up, when you start a business trust, you're gonna set up the name. We're gonna give you a letter to go to the bank.  I'm with Wells Fargo because when I started this, I had family living all over the world. They're all my beneficiaries.  Your receivables are gonna go into the new bank account. Your deductibles could come outta the old bank account and come April 15th, 2027, instead of filing a 1040 tax return, you're gonna file a 1041 tax return.

And we introduce you to the CPA who will do it for you. And I mean, Last year, I was in North Carolina. I saved 92% in federal taxes. I did not pay North Carolina state income taxes. I did pay 8% to the federal government. Happy to pay the 8%, but I still pay food tax. I still pay gas tax. Literally, uh, week before Christmas, I stopped at Chick-fil-A, got four sandwiches and four crisscross fries, and I'm like, boy, that bill was expensive. They charged me $12 and 95 cents for takeout. And I'm like, oh, no, no, no, no. Now after that. We're going to eat at Chick-fil-A. We're not, no. No longer taking takeout, but, so I still pay taxes, but I get to save so much in my federal and state income taxes.

Roger: That's incredible. I mean, if you're in a high-tax state like California, that'd really make a big difference

www.SallyGimon.com: Correct. I'm working with a gentleman right now who's making $140,000 in California. He's gonna save 90% in federal taxes, but his California state income taxes 10.1%. That's huge. I mean, and he's just like, I didn't know I paid that much in taxes. And I'm like, oh yeah.

Roger: Most people really don't realize how much taxes they pay, and that's one of the things I'm always teaching people. I-- You know, I have people come to the tax desk and especially when they're starting out in business, and they'll be like a sole proprietor, which is the majority of small businesses in this country.  And, you know, the first time I have to show them that they're paying between twenty-five and fifty percent of their net profit in taxes, it just really freaks them out. And the thing about it is that we don't really have a whole lot of business education in this country, in our school systems or anywhere else, not even in colleges for that matter, from some of the business majors I've talked to.

And a lot of businesses are lost and a lot of dreams are dashed because people don't know. They just don't know. And I definitely want to learn more about the Spend Thrift Trust because I can put this in my arsenal of helping people. I think that would be great.

www.SallyGimon.com: Exactly. And the other thing that happens when someone sells a business, I dealt with a gentleman up in Maine who was selling his printing shop. He took depreciation on all the, I'm gonna call it equipment he had. When you sell it, sell a business, you're gonna pay long-term capital gains, either 15 or 20%. He sold his business for $3 million and his CPAs saying, you're gonna have to pay, pay back all the depreciation. I'm like, no, no, no, no.

With the spend thrift trust, he puts the business into the trust before he sells it. 15%, he got to save, um, $450,000 at 20%. He got to save $600,000 and then he will not have to pay back any of the depreciation he took on those machines over the year after year and his accountant's like, I can't believe this is, this is true.

And, you know, I set him up with a, a conversation with my contact at the law firm and he's just like, I need to tell more of my clients about this. So, I'm not trying to crow. It's just the secret of the rich. And so few people know about it. Do you, do you realize,  I don't know if you remember this. 12 years, 13 years ago when Hillary Clinton was debating Donald Trump and she accused him of not paying taxes, and he said, because I'm smart. His father, Frank Trump, started both the business and beneficial trust in 1972 when Frank and Donald Trump got sued by the city of New York for discrimination. And Frank Trump, there's a New York Times article about it, said he will never be sued again rest of his life. So with the trust, you're gonna save taxes, gonna keep your information completely private.

40% of LLCs, S-corp and C-corp, that's state law gets sued every year. And third way you save. I can't stop you from being sued, but all lawsuits become frivolous and go away. One of my clients who has a beneficial trust, he has a hundred doors in Chicago. I have never seen his RV, but he has a Rolex watch and a big diamond ring.  You know, Patrick has money. He caused an accident with his RV.  He hit the car in front of him that pushed her car in, into the car in front of her. You know, his insurance card showed the trust name. Patrick's Illinois driver's license showed Patrick's home address. We can't change that. Four weeks after the accident, he got $800,000 pain and suffering lawsuit from the woman who got squished. His insurance is probably gonna go up. I can't stop that. But all he had to do was send the first page of the trust to her attorney saying, this is what I have. You can't get blood from a stone. And Patrick's like, you just saved me $800,000. I'm like, I'm also saving you thousands in rental income taxes too, at the same time.

Roger: So when you have a business, you don't really change the structure. It's just the... You sell it basically to the trust.

www.SallyGimon.com: Correct, correct. So, one of my clients I did a pitch off down in St. Petersburg, Florida back in October. I came in fourth out of a hundred people, which is pretty good.But, one of the judges pulled me aside and he goes, I have 92 different businesses. And I'm like, you're gonna have one EIN number. but you're going open up different, the EIN number's gonna be up here and then open up different bank accounts under that EIN number. So what he's doing is he's transferring two businesses per week into the trust and you'll. He's got a personal banker at Chase, you know, a private banker at Chase who's setting this up for him. we figured when I did this in October of 2025, we were gonna save him over $92 million in taxes. He's, um, Florida doesn't have state income taxes, but all his businesses are based outta Florida.  And he's just like, I can open up three more businesses. I'm like, you could do whatever you want with that money you're gonna save.

Roger: Wow, that's incredible.

www.SallyGimon.com: Correct. And you know, unfortunately, so few people have heard of this and cPAs who tell me it's not true, but CPAs don't go to law school.

There are a hundred, uh, there's a million active attorneys in the United States right now, and only 4% are trust attorneys. A textbook they study in law school is called Scott and Asher on Trust Fifth Edition. There's a whole chapter on the spend thrift trust. And then if you're near a law library, blacks uh, law dictionary also talks about the spend thrift trust and, you know. The law firm I worked for on behalf of, um, Paul Benson, who was a Harvard law professor who wrote these trusts 78 years ago. Now, his grandson and great-grandson run the law firm. And in 78 years, not a single trust has been audited. One trust was questioned by a senior IRS agent because he said you, they couldn't claim dividend income taxes. He went down to Texas, spent five hours in the boardroom, he approved the trust, and literally two weeks later he sent an unsolicited letter back to the law firm saying this is how he approved it. And if anyone needs a copy of that, they just need to reach out to me and I'll send it to 'em by email.

Roger: I'm really surprised more people don't do this, but, but this is what the rich people do

www.SallyGimon.com: Exactly. I mean, you know. Super rich people have this. I'm in a, um, I don't know if you've heard of a group called JV Directory? One of the gentleman who runs JV Directory, his girlfriend works for a Manhattan law firm that won't talk to anyone unless they're worth $8 million. I try to keep the trust in my national Real Estate Group. Yhe average person joining is a 56-year-old gentleman trying to do a few real estate deals before they retire, before they hit 65. My first deal in the trust was a bank owned reverse mortgage. I bought for $20,000 that was gonna go to auction for $50,000 when COVID restrictions got lifted. When it finally went to auction, I bought in July of 2020, didn't go to auction until August 28th, 2021. The final bid was $64,000. without lifting' a hammer, I made $44,000 on that deal. At 24% tax bracket, I got to save $10,360 that I'll never have to pay back to the federal government. If someone's tax bracket's higher than that, there's seven different tax brackets and four ways to file your taxes. You save even more money.

Roger: I guess I've never considered trust in this area because generally trust tax rates are higher than most personal tax rates. So I guess that's where I'm a bit confused

www.SallyGimon.com: Well, 97% of the trusts sold in the United States. Our is called the Family Trust or the Living Trust.

My mom and dad had that. Um, were real original. They called the Gimon Family Trust. Avoided probate. But after we sold their house, I didn't have my trust yet. And when my brothers and I sold their house in Goodyear, Arizona, the state, thank God we made money on the house because we had to pay the taxes on it because none of us were on the title of the house.  My mom had a 401k that got split between the three of us. I had to pay taxes on her. I took the money out of her 401k and because I'm under 50, was it 59 and a half or something? to pay and I'm like, if I knew that I would, it was a major mistake on my part.

Roger: Got socked with the extra 10% for being under 59 and a half. So why would the tax rates be lower in the spend thrift trust than a regular trust?

www.SallyGimon.com: Well, the spend thrift trust, the full name is Irrevocable Complex Discretionary Non-Grantor Spend Thrift Trust. There is a memo out there dated August 3rd, 2013 where the IRS literally wrote a memo saying they do not like tax code 643B, and they do not like the Irrevocable Complex Discretionary Non-Grantor Spend Thrift Trust. a five page memo and on every bottom page it says, this is not tax information. I can't tell you how many people send me this, and I'm like, that's a memo. The tax code is 643B - memo versus tax code. Tax code always wins, if that makes sense.

Roger: Absolutely. So these particular types of trust have a different tax structure than a grantor trust, for instance.

www.SallyGimon.com: Correct. So, my mom and dad start the Gimon Family Trust, they were the grantors or the settlers. When they both pass away, that trust ended. When you start the spend thrift trust, it's non-grantor. You're gonna have someone who will never be a beneficiary. Someone who will never be a trustee sign up to be this, uh, settler. And then there's another page that they sign themselves away. So I used a family friend, his name was Roy. He signed up and signed himself away. All he knew was the trust was based in Texas. That's where the law firm is. And he goes, I know you're a real estate investor, but I don't know what you do.  And unfortunately, Roy has passed away since I started my trust. But, nobody, it, it's Super private, if that makes sense.

Roger: Is it then considered a irrevocable trust?

www.SallyGimon.com: Correct. Irrevocable. That means it goes from generation to generation. So since I've had this trust, I've wholesale 28 properties. I do it here in North Carolina. Um, we have a very odd rule here called upset bids. They don't allow us to use LLCs, S-Corp, C Corps or my trust. So I just signed my name, Sally Gimon, TTE, trustee of the trust. That gets it into the trust. And then when I turn around,  now I'm doing seller financing where I'm putting people into the home, but everything is in the trust and, um. You know it, I don't have to pay capital gains.

One house, I got a tax lien. It was less than $7,000. I paid a handyman to paint the inside and outside. Two bedroom, one bath house. I put it on the market for $243,000 and didn't pay any capital gains on that.

Roger: That's insane. That's absolutely insane

www.SallyGimon.com: it, it, it, it's insane, but it's, I mean. I'm, I'm using the trust for myself, but I wanna teach other people how they can use it too.

Roger: I think that's great. That is absolutely great. I mean, there's not enough education about taxes in the country the way it is, and businesses don't realize that taxes are normally the number one expense of a business if they're profitable. And to be able to get that down, well, there'd probably be a lot less businesses going out of business.

www.SallyGimon.com: 100%. And say, um, I can't help W2 income earners because they get their taxes taken out before they get their paycheck on Friday. But Google says 60% of W2 income earners have a side hustle, or they're doing something, you know, maybe they're an MLM or TikTok shop or an Amazon shop that's usually 1099 income. So someone like that, they would still file a 1040 tax return for their W2 income, and then they would file a 1041 tax return for their 1099 income and it's taken out.  So like, let's say someone's making $150,000 at their W2 income, they're at 24% or 32% tax bracket, but they're making $70,000 over here. It's not affecting them to go up a higher tax bracket.

Roger: You know, that got me to thinking because one of the things that I've been considering lately, being a senior citizen, is that I have no dependents to give whatever I have away when I'm no longer here. I have no children or anything. So I was thinking of setting up something that would go to charities instead in that I do have residual income.

And if I could do that in a way that the government doesn't take any part of that money before it goes to them, that would be awesome.

www.SallyGimon.com: One of the things, um, are you in Medicare yet?

Roger: Uh, yes, I am

www.SallyGimon.com: Okay. They say 3.5 million people on Medicare make too much money. They what they do every October. The IRS goes back two years. So October, 2025, they went back to anyone who filed a 1040 tax return in 2023. add up how much you get from Social Security, how much you get from pensions, how much you make in wages, how much you take in 401k withdrawals or SEP withdrawals, capital gains interest income, dividend income, rental income and royalty income taxes. So if you're single, if you make more than $106,000, or if you're married more than $212,000, you pay, it's called an Irma surcharge on parts B and d of Medicare. 'cause a trust file is a 1041 tax return, you no longer have to worry about that surcharge. One of, one of my, couple, uh, to it. I'm gonna save them $72,000 in dividends. The husband was a financial planner. He was unaware. His wife said they were paying over $800 per person per month on Medicare. They still, I got them down. They still have to pay the $185 per person that everybody on Medicare pays, but she's just like, you're gonna save us an extra $1,400 in Medicare. On top of your dividends, savings. And the husband's like, we were paying how much? And I'm like, don't worry. You're you won't be paying this anymore.

Roger: I've had a lot of people at tax desks suddenly make a lot of money one year, and then they get their Medicare statement the next year. They're just-- they're amazed at how much it's bumped up for that year. I usually have to calm them down and say, "It's, it's all right. It's gonna be readjusted next year, but it's because you made all this money the last couple years."  It happens all the time.

www.SallyGimon.com: Exactly.Well, one, one of my, um. Uh, clients who has a beneficial trust. Kind of a sad story. He lives in Oregon. He went to a party or a potluck or whatever and someone had deviled eggs and it got too hot. His kidney shut down When they went to go check how much money he made, because you have to, because he's under 40, uh, he's under 65, he's gonna be on Medicaid or whatever the state of Oregon calls it. He didn't know he had all this real estate because it was in the trust and unfortunately he has to get direct dialysis three times a week and he's on trying to get a kidney replacement, but if they looked at everything else, he said it would cost him over $1,400 every time he went to for dialysis that he now doesn't have to worry about.

Roger: So it not only helps you on taxes, it can actually also help you on other things too.

www.SallyGimon.com: Exactly. I mean, you know, because I do everything in both my trusts, um. I don't have to file a 10 40 return, but I have my, you, a tax preparer, right?

Roger: That's correct

www.SallyGimon.com: You need 10 years of making money. I've, I've got that because I started my trust when I was 53 years old and you know, I. When I graduated high school, 1984, last graduating class of my of my class. Ronald Reagan's financial planner, I forget his name, came in and he said, all you sophomores out there, all you juniors, all your seniors, when you turn 65, there might not be social security for you.  It's scared. It scared me. I mean, 'cause everyone talks about it, you know, the government might be shutting down again, and my brother, who's a secret service agent, didn't get paid the last time. I mean, he was taking money from his 401k. He's like, I got three kids I have to feed.

Roger: And they've been doing that scare tactic for many decades now, and it could still be true. You don't know. I mean, I don't, I don't really trust the government to do what's in the best interest for the rest of us.

www.SallyGimon.com: Exactly.

Roger: Well, this has been a fascinating conversation. And Sally, I've got a lot more education to do myself, which you've pointed out, and I really appreciate you coming on today and letting me know about it.

www.SallyGimon.com: Well, the, the reason I have my name is www.sallygimon.com. It's a free class on the Great Discovery. Have you heard about the Great Discovery?

Roger: I have not

www.SallyGimon.com: Do you know six Sigma? My brother's a Six Sigma Black belt. Um. It's consulting, a consulting thing. They just put it out there. translate to 165 different languages. Uh, this is a true story. A couple who are in San Francisco, their first language is Korean. I don't speak any Korean. They watch my class in Korean. Three laundromats. And, they got their son on my zoom, you know, to talk about things.

And the father's like, this is how much we made last year. And I'm like. And, you know, I showed them the formula and, you know, in front of them on Zoom we got to save them $82,000 in California and federal taxes. And the son's like, how do you find out about this? I'm like, he watched the class in Korean, you know that that was his first language.

So when you go out to my free class on the great discovery, sign up as a free learner, you're gonna get a presentation. Three articles from Forbes Magazine. I did not write. pages of case law, so you can research this to your heart's content. And then you also see clients saving thousands and thousands of dollars.

Roger: So everybody go out and check out Sally if you've got a business because I think you'll learn some things that'll help you out. I really appreciate you coming out today. Do you have any final words you'd like to say?

www.SallyGimon.com: I love the podcast that you're doing because people need to know about things and I appreciate you having me on. Roger. Thank you for letting me tell a few stories here.

Roger: You are certainly welcome. Bye-bye

www.SallyGimon.com: bye.

I hope you've enjoyed today's episode of Mastering Business Basics. If you'd like to learn more about what Sally teaches, and I think you should, after all, we all should know the secret of the rich, you will find a special link in the show notes that'll take you right to the information you need to know.  Link: https://thetrustisyou.com/?rf=XUtkxzRw0d9ArcOtvnpD