5 Secrets to Keeping More of the Money Your Business Makes

So many people and companies made lots of money, but don’t know where it went, and then had to start over or worse.

Don’t let that happen to you. Learn and implement these longstanding financial truths that are secrets to so many.

1. Make sure your business enhances your life

 2. Make sure your business model makes financial sense

3. Know where your Business is Going

4. Use the numbers to help run your business

5. Be Financially efficient with your business and your life

I challenge you to learn and implement these ideas. Avoid the mistakes that my clients and I have made.

Whether you are just starting your business, or adding to an existing one, you can keep more of what you make and build a business that improves your life, builds your financial freedom, and leaves a legacy.

But you must become financially literate, and implement these ideas.

Good Luck, I hope that this will improve you as an entrepreneur, as well as your life and the lives of those that work/depend on you.

  Lindsey Torbett


With more than 30 years’ experience in accounting, tax planning, financial and business consulting, Lindsey Torbett has developed a unique set of financial and entrepreneurial skills. He has helped launch more than 20 companies, including a community bank with more than $1.4 billion in assets, and is an active real estate, venture capital and common stock investor. Torbett has been involved as a coach or adviser in business deals and investments totaling more than $500 million. A CPA and Certified Financial Planner, Torbett has 15 years’ experience as a bank board director and audit committee chair. In the last few years, he has focused on assisting clients build and maintain financial independence, and has guided many entrepreneurs to successful business ownership and management. He recently authored the book, “Five Steps to Financial Freedom — A Guide to Leading a Financially-Fulfilled Life “, available at



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Who’s Managing Your Financial Affairs

I have an important financial question for you to consider today. Who is in charge of your money? Now I’m sure you’ve got a CPA, a stockbroker or two, a couple of insurance agents, and an attorney that does work for you from time to time, but who is really in charge of your financial affairs?  I began to consider the importance of this question after I started thinking about how time-consuming taking care of my own financial affairs can be. And I know what I’m doing, I’ve got employees to work on it, I’ve got good software, and I’ve got access to support. I don’t know that my affairs are any more complicated than yours, but I’m currently managing eight houses, a rental condo in Florida, a couple of commercial buildings, and I manage my father’s financial affairs, taking care of everything for him, like many of us aging Baby Boomers do. I also manage a stock portfolio that has done very well, and I have some private equity investments. I’m the co-founder of a community bank, and I serve on the board there. So, you know, that takes up a lot of my time, and sometimes I even wonder if I ought to spend even more time on it. So anyway, that makes me wonder what you’re doing.  In your busy life as a lawyer, doctor, or entrepreneur or whatever, I wonder who is coordinating your financial and wealth issues.

I also wonder if your financial affairs on the top of those people’s lists or if you’re just one of 100, 200, or 500 clients that they respond to when you bring them something? For years I worked as a CPA like that, and I have nothing against those folks. I mean, people would bring me their tax returns, and I would consistently give them good results.  But that’s a transactional relationship. What I’m wondering is who’s actually managing that for you. I think you need to do it, or at least be in charge of it. I don’t think there’s any question, no matter who else is helping you; you should be in charge because it’s more important to you than to them.

Now some people are very concerned with what you do, but you may not like the reason for their concern. The reason is that what you do is how they get paid! If they can get you to do something like buy this or sell that, they make more money.  And that’s okay, but you need to be aware of their motivation. You need to be aware of how your various folks get paid, why they get paid paid, and when they get paid. Are they paid when they add value for you, when they do things that make them money, or do they just get a percentage of your invested assets year after year?  Those are questions that you need to be thinking about.

Another element to consider when determining who controls your finances is second opinions. Are you getting those?  You need outside, unbiased advice from somebody that doesn’t make money depending on their answer to your question. You know, if you ask people whether you should pay off your house or invest your money with them, that’s a pretty easy answer for them.  The answer’s not a lot different than the answer you might get if you ask your barber if you need a haircut. Warren Buffett says, “Never ask your barber if you need a haircut,” meaning that people who stand to benefit financially from one of your options will urge you to pick that option. So it’s important that you see where you’re getting your advice. And maybe that isn’t very important on the smallest decisions, but on the big decisions it’s vital that you have outside, unbiased advice.

How much are your investments costing you? What are the fees on your investment? And what percentage of your return or your net worth are those fees?  You know, in a year, it doesn’t affect you too much if the fees are too high.  But in 20, 40, or 60 years, those fees have cost you an enormous amount.  I find that very few people can tell me what they’re really paying. You need to figure that out and be aware of that.

If you’re in any sort of bond fund, you might find that up to one-third or one-half of your return is going to other folks.  And right now, as you well know, you don’t have much return. And when those interest rates go up, bonds and bond funds are going to really decline in value.  If you know that and you’re properly positioned for that, you may be all right.  But if you’re not, you probably won’t be. What worries me is that a lot of people don’t know that. They think bonds are safe and stocks are risky, and that is not the entire truth. In fact, right now I think that stocks and bonds are even in market risk. But there are other risks that you should be considering, such as the risk of inflation and the risk of outliving your money.

You’ve also got to consider the big picture. What is the tax cost of your investments? Is somebody aware of your tax cost when you buy things or sell things or where you put which asset? Is anyone considering that? You’ve got a CPA and a few brokers, but probably none of them are seeing the big picture.  Some of them may be doing a good job, but unless they’re seeing the big picture, how do they know? Instead of diversifying, they may be making things worse.

So that brings me to the next question, do your investments fit you? I’m not asking if they fit the average person on the street. I always tell my clients to ignore financial noise, whether it’s in Money magazine, on CNBC, or in what the broker is trying to push you to do. My premise is that most of those things don’t fit you.  They might fit somebody, but that somebody isn’t necessarily you. Maybe they fit the 80-year-old widow. If that’s you, well that’s great. But if you’re 40 years old and trying to acquire assets, that advice doesn’t fit, and vice versa.

The last thing I want you to consider is whether you understand your investments and why you have them.  If you don’t, my premise is that you shouldn’t have them. And if it’s an acronym that neither you nor your broker can explain, then that’s probably an investment that made your broker and the people packaging that investment lots of money.  My bet is that investment may be good for them, but it isn’t very good for you. You know, I have people ask me all the time about this acronym or that acronym. The truth is, I usually don’t know what they’re talking about! That used to bother me, but now what bothers me is that they’re about to get ripped off by some packaged investment. There’s no need to package investments like that, except for the fact that it benefits the people doing the packaging and selling.  I don’t know of any benefit it provides to the client, but I know of millions of dollars of benefit that it provides to the folks doing it.

So that’s just a few questions for you to consider as you’re beginning the year and gathering your tax information. I hope you’ll consider these questions and ensure that you are the one in control of your finances. I invite you to go to and get my free report: “The Five Steps to Financial Independence.” I’ve also got some other tips on my site concerning investment and building net worth that may be of benefit to you. Here’s to you as you begin building your independence!

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My Take on Warren Buffett’s Shareholder Report dated March 4, 2014

I was excited to read Warren Buffett’s shareholder letter that he recently released. He issues these shareholder letters once a year, typically on the first Saturday of March. These letters are worth their weight in gold to anyone who is an investor or is interested in learning about investing. I really feel that this year’s letter contains some great information, and I am excited to share my thoughts about it. I broke the letter down into five main categories that I think Warren Buffett really speaks truth about. Buffett covers some investing basics and investing rules, he validates the principle of buy and hold, he castigates Wall Street, and he briefly speaks about America’s long-term future.
Buffett first defines the “what” and “when” of investing. The “what” is to own a cross-section of good businesses. The “when” is to buy at the right time. Don’t enter the market at a time of exuberance; rather, invest over time if the price is really high. Just make sure that you don’t sell at a time of bad news or when the stock is way down.
Next in his letter Buffett explains several rules of investing. Primarily, make sure you buy at a fair price. Remember that any company’s value is based on its future productivity, its earnings, and not on the current price of its stock. The goal of an investor is to buy low and to sell high. Regretfully, too many investors do exactly the opposite of this. In Buffett’s letter, he tells great stories about buying a farm and buying real estate, and he then explains that he looks at those two things exactly the same way as he does buying stocks. Investing is investing. Buffett reminds his shareholders, though, to stay in their circles of competence. Stay in areas in which you can value the company and have a good feel for what future earnings are. I personally think, looking at the prices of some companies, that it’s hard to explain their high prices as anything other than irrational exuberance. That’s why it’s important to stay in your circle of competence and value companies based on their future earnings. These truths apply whether you’re buying a farm, a company, or stock in a company. You need to evaluate whether whatever you’re buying will be making money five, ten, or twenty years in the future.
I also think that Buffett validates buy and hold through his shareholder letter. Buying and holding basically just means to buy good companies at a low (or at least a fair) price and hold on to those companies for a long time. Buffett distinguishes this method from the method of the traders who are buying and selling every day because they think they know what will happen in the short term. He makes the point that even he doesn’t know what will happen in the short term. If he doesn’t know, I know that I don’t know, and you probably don’t know either! This is why its important to buy stock at a fair price and then hold on to it for a long time. Nobody really knows what is going to happen in the short term.
Buffett also talks about the harms caused by Wall Street and by stockbrokers. He makes the point that you and I and everyone need to ignore the noise and the market fluctuations. He makes the point that a “flash crash” doesn’t harm a long-term investor. (Again, this is another reason to hold onto your stock!) He also argues that you need to minimize your investment costs by watching “frictional costs” and complexity. The people that are pushing you to make a lot of actions and to invest in complex companies are the people who will most benefit by you doing so. They’re working for their best interest – not for yours! Don’t lose heart at this, though, for Buffett also offers the encouragement that you don’t have to be an expert in order to achieve satisfactory investment returns. He asserts that an investor who is not a professional or a speculator is not at any disadvantage. The professionals and the speculators are buying based on all the Wall Street noise, but all you have to do is buy good companies and hold on to them through thick and thin. Ultimately, you’ll do much better that way.
The final point that Buffett makes in his shareholder pertains to America’s positive long-term future. He says, and I certainly agree, “American business has done wonderfully over time and will continue to do so.” He’s talking about long periods of time, not what might happen this week, this month, or even this year. He’s talking about twenty or fifty years from now. That’s why I think it’s so important that you buy good companies, and hold them as long as they continue to be good companies. (Some companies were good twenty or fifty years ago and aren’t even around today, so you need to watch that.) With these truths that Buffett talks about, you can minimize your cost and even minimize the amount of time that you spend investing – it’s really not that complicated.
So that’s how I categorize Buffett’s annual letter. If you’d like to read it yourself, all of his shareholder letters are posted at
I also invite you to go to and get my free report: “The Five Steps to Financial Independence.” I’ve got some additional tips on my site concerning investment and building net worth that may be of benefit to you. I look forward to helping you become both a better investor and, as a result of your investing, more financially independent.

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5 Steps to a Financially Fulfilled Life


a short 2 minute video summarizing the 5 steps you can take to move toward a Financially Fulfilled life.



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Memorial Day Tribute

Leave a memorial for your family and country by taking charge of your finances.

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Facebook IPO vs building your financially fulfilled life


A 2 minute video discussing the noise around Facebook’s recent IPO vs what you can do to improve your financial life.

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Berkshire Hathaway 2012 Annual Meeting- The Wisdom of Warren Buffett and Charlie Munger

I was not able to make the trek to Omaha this year, but wanted to list a few of the investing gems that Warren and Charlie passed along.

Common sense advice from great investors, My investments, net worth and children have benefited greatly.
(I need it this year, the reason I didn’t make my third Omaha trip was my daughter’s wedding.)

Berkshire Hathaway Annual meeting 5/5/12

Warren Buffett
We’ll never risk what we have for what we don’t have and don’t need

Buffett’s comment that bonds are more like “return-free risk” than risk-free return

If you buy businesses for less than they are worth, you’re going to make money.
If you know which businesses you can and cannot value, you’re going to make money.

The beauty of stocks is they do sell at silly prices sometimes.
That’s how Charlie and I got rich.

Don’t select your investments based on politics.

Then I would turn to something much more interesting: buying businesses to keep.
I don’t want to be buying and selling businesses.

You don’t have to do anything to make money in the stock market.
Stick with businesses that you think you can value. It’s a marvelous game.

The mistakes we’ve made are where I misjudged the competitive position of the business.

In 53 years, I don’t think that Charlie and I have talked about macro effects
(when deciding whether to buy or sell a business).
When we find an attractively priced business that we understand, we buy it

Charlie and I think about worst cases all the time

Thinks an appropriate multiple for a business with strong competitive advantages
is probably 9 or 10 times pre-tax earnings

EBITDA is NOT equivalent to pre-tax earnings. It’s just nonsense.
But it works for the people that sell businesses.

It’s very hard for an unproductive investment to be a productive investment
over a long period of time.

We try to stay away from things that we don’t understand.
It isn’t that I don’t understand what the business does –I mean I don’t have a
reasonable fix on what the earnings power and competitive position will be in five years.

You have thousands of opportunities in stocks all over the world.
It doesn’t make any sense to spend five seconds thinking about new issues (IPOs).

Apple makes brilliant products, I just don’t know how to value it

We’ve looked at forest products companies. We’ve looked at several.
never found any that met our criteria. Easy to understand the business,
but the math has escaped us in terms of being compelling

Won’t take a risk (even a favorable one) if the downside means that Berkshire will go broke.
We’ll never risk what we have and need for things we don’t have and don’t need.

Charlie and I don’t need the money, why do we do what we do?
We jump out of bed excited every day. We get the opportunity
to paint our own painting every day. And it’s a painting that will never be finished

I would avoid medium-term or long-term government bonds. I think that’s the obvious answer

Charlie Munger:
“Everyone wants fiscal virtue — but not quite yet.”

Favorite risk control example: young employee was fired once ‘how can you fire me –
I’m one of your top producers?’… answer: I’m old and rich and you make me nervous

When you used the word EBITDA, I thought to myself, I don’t even like hearing the word

How do these super-smart people do really dumb things?
It’s explainable by the old proverb that ‘give a man with a hammer and he’ll assume the problem is a nail’

I wouldn’t worry… Mr Market will look after the share price over time

What we’ve done is learn enough from other people’s mistakes –
it’s a much more pleasant way to learn your lessons

Warren’s position on taxing for the rich has decreased my popularity in my country club.


For more great info, read Warren’s annual shareholder letters:

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Avoid the Financial Noise

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A 3 minute audio recording suggesting how you can minimize any impact of the Government stand-off, Euro problems and credit rating downgrade.

Focus on your financial goals and what you can control.

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5 Secrets to Financial Freedom

5 Secrets to Financial Freedom

These are the financial truths that I have learned over 30+ years from experience, clients and successful investors.  I hope that they will help you become a Millionaire Next Door”and to begin to learn the tactics of great investors like Warren Buffett.

It is a great time to begin, I will be posting further details and tactics over the next few weeks.

Lindsey Torbett, CPA, CFP

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2010 Resolutions

Like most of you, I have been considering my 2010 resolutions. You know the routine…shed a few pounds, be consistent with an exercise program, and work on my spirituality…

But I also have financial resolutions and they apply to all of us:

Begin taking control of your finances
Spend less than you make
Buy at least 1 asset in 2010
Manage your investment costs
Develop and implement a tax plan
I will be blogging on these in the next few weeks. I hope you will learn and implement them in 2010. They are a good start on achieving financial independence for you!


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