If you have a small business that is structured as an LLC or corporation (including 1-person LLC and S-Corps), you likely need to file a new report with the government about who owns the business. Basically, they are worried about money laundering and want to know more about the “beneficial owner” behind these entities. Here’s the more specific language:

Your company may need to report information about its beneficial owners if it is:

1. a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or

2. a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.

A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report.

Embedded above is a hokey intro video. You can find more info and file at www.fincen.gov/boi. FinCEN stands for Financial Crimes Enforcement Network, part of the U.S. Treasury Department.

I had no idea about this until my payroll company, Gusto, alerted me and offered to file on my behalf for an extra $49. I did some quick research and was able to do it directly through the official FinCEN.gov website for free. Took about 15 minutes; I don’t remember needing anything hard to obtain beyond your EIN.

I imagine that there are probably many other single-person LLCs that don’t know about this requirement, since they have minimal paperwork and often don’t even need to run payroll. The deadline is coming up on January 1, 2025, assuming your business was formed prior to this year. For new businesses, you only have 90 days after notice of creation. The penalties for not filing can be quite steep. From their FAQ:

As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ, this amount is $591.

A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.

For many people, Warren Buffett is that “rich stock-picker guy”. But if you read any of his multiple biographies, you would know that he was a very precocious kid that was obsessed with getting rich from an early age. Instead of trying to make the travel team for soccer or hockey, he was constantly learning and trying new ways to make money.

The CNBC article “Here’s how Warren Buffett hustled to make $53,000 as a teenager” lists several of his entrepreneurial projects, from delivering newspapers to running his own pinball machines. They organized them into this infographic:

He also added that extra bit of cleverness. From The Alchemy of Money:

“He also sold calendars to his newspaper customers, and he developed another sideline too. He asked all his customers for their old magazines as scrap paper for the war effort. Then he would check the labels on the magazines to figure out when the subscriptions were expiring, using a code book he had gotten from Moore-Cottrell, the publishing powerhouse that had hired him as an agent to sell magazines. He made a card file of subscribers, and before their subscriptions expired, Warren would be knocking at their door, selling them a new magazine.”

He understood the power of compounding and even bought a much smaller first home than he could afford in order to keep more to invest. Everything just kept building from there. There’s a reason his biography was called The Snowball. Even then, he didn’t become a billionaire until his mid-50s.

Listening to the old Berkshire Hathaway shareholder meetings in podcast format is a form of treasure hunting. Much of it is familiar and repetitive, but every so often there is a little bit that is new.

This week’s tiny gold nugget is that Buffett quotes a book that found that one of the best indicators of future financial success is the age at which the child started their first business. Of course, this was perfect for Warren Buffett who was already buying a six-pack of Coke for 25 cents and selling each bottle for 5 cents as a pre-teen. He delivered newspapers himself, making the equivalent of a $1,000 a month in today’s dollars, all before he started school each morning. Of course, he then quickly moved on to “owning” newspaper routes but farming out the work to other kids. He owned pinball machines. I’m sure there is more.

Around 2011, Buffett helped create a cartoon for kids called Secret Millionaire Club in which he was the mentor of kids learning life lessons through entrepreneurship. You can watch the episodes on YouTube. Back in 2015, I even reviewed a copy of the companion book How To Start Your Very First Business.

The difference today is that my kids are nearly getting to the age where people advise you to start teaching them about money. I’m still not really convinced by the “bend the rules to give your 9-year-old some earned income and put it a Roth IRA” strategy. However, I can get on board with having them start a business. If they happen to earn some income, great. But even if they don’t, consider what they could learn in the process:

• Reliability
• Honesty
• Social skills
• Attention to detail
• Patience and tolerance
• Failure and perseverance

Sounds like an excellent ROI to me.

How’s this for a different path to entrepreneurship: Don’t have fun. Don’t pursue your passion. Don’t try to change the world. This Medium article profiles Nick Huber, founder of The Sweaty Startup is basically the opposite of the Silicon Valley story that you see everywhere else:

“The Sweaty Startup,” on the other hand, is all about achievability: Create a service business. Do it better than competitors. Make a couple hundred thousand a year, work 40 hours a week or so, and leave plenty of time for family, friends, and hobbies. […] “It’s get-rich-slow,” says Huber, who cautions against following your passion when creating a business. “You gotta do something not-fun for five years to make this work.”

Why? It all comes down to competition. If it’s fun, the competition is too intense and as a result the margins will be too slim. You have to find the stuff that nobody else really wants to do, searching the “inefficient markets”, and do it better than the (limited) competition.

His point: there’s too much competition for the fun stuff — so go for the scut work. “People don’t want to hear this stuff,” Huber says.

“Let’s think about who’s making really good money by not being very good businessmen, and go compete with them.”

Not Fun = Good (Less Competition)

• Plumbing
• Pest Control
• Lawn Care
• Firewood delivery
• Maid services
• Water damage removal

Fun = Bad (Too Much Competition)

• Smartphone App that goes viral
• Bakery
• Designing jewelry
• Cute stuff on Etsy
• YouTube/Instagram influencer
• Life coaching

As with many things this is all easier said than done, but I’m sure some folks will happen to have the personality and knack for this type of thing – which is also perfectly compatible with financial independence. Create your own six-figure job, save a large percentage of it for years, and when you’re close to being done, the best part is that you also own a valuable asset. You can now sell that small business for a multiple of the annual revenue. (Compare this against a franchise, where if you don’t do it right, you are simply “buying a job”. Read this Hustle article about Subway franchises.)

I became curious about early retirement after I couldn’t think of any job where I’d say “Wow, I love doing this so much, I’ll work until I die”. Some people truly love their work. I know that now. However, other people are built to “suck it up” for a while and then get the heck out. With this concept, you can sell your job when you’re done, and sail off into the sunset.