Richard

Want to grow your small business? Acquisitions can help you efficiently break into new markets, expand your customer base, and increase your offerings without building them yourself. It helps diversify your portfolio of products or services, which reduces risk and helps your company be more resilient to economic uncertainty.

But there are risks, too. There may not be a cultural fit between the two companies. The due-diligence process may not reveal potential problems, including legal, regulatory compliance, and financial issues. The acquisition may be poorly executed, leading to operational problems and the loss of key personnel. The purchase may be expensive, leaving the acquiring company with excessive debt.

Robyn Streisand, CEO of The Mixx, a strategic creative agency, began growing by acquiring complementary businesses. She reduced her risk by purchasing companies she had worked with for years. Creative Captain Group was her second acquisition.

Version 1.0 Of The Mixx: A Strategic Creative Agency Is Born And Focused On DEI

Back in 1997, long before others realized that a strategic creative agency could build a business by strategically connecting brands with diversity, equity, and inclusion (DEI), Streisand did. Interest in DEI grew, as did The Mixx.

Interestingly, Streisand thought certification as a woman-owned business was for office furniture and IT staffing companies, not creative businesses. “[Back then,] there weren’t a lot of companies that knew what certification was or meant, especially in the marketing media and communication space,” she said. But her client, Greta Davis at Time Warner, for whom she was developing its first-ever supplier-diversity program, asked her to get certified. So she did.

Version 2.0 of The Mixx: Growth Through WBENC And NGLCC Certification

Since then, she’s become a huge proponent of certification. You have to get to the table to be considered for a contract with a large company, and that’s just not happening enough for lesbian, gay, bisexual, transgender, queer or questioning, intersex, asexual, and more (LGBTQIA+)-, minority- and women-owned businesses. Corporate America and government have a significant role to play in helping underrepresented entrepreneurs grow their businesses.

Growth through certification became Streisand’s 2.0 version of The Mixx.

“The Mixx’s core competency is serving underrepresented communities, whether it’s women, LGBTQ, African American, Asian, Hispanic,” said Streisand. Campaigns can be aimed at internal or external audiences. The Mixx builds the bridge from the brand to the target market by diving deep into research to reveal new insights into what and how to communicate. The Mixx then quantifies the return on investment (ROI) on the campaign.

Version 3.0 of The Mixx: Growth Through Strategic Alliances

In 2014, Streisand launched the first-ever collective of certified LGBTQ-, minority-, and women-owned businesses called Titanium Worldwide. Titanium was created as a growth strategy for The Mixx. “We were being asked to compete for RFP opportunities and getting eliminated in the first round because we were too small,” said Streisand. The collective was version 3.0 of The Mixx.

Agencies are certified-diverse with Women’s Business Enterprise National Council (WBENC), National Minority Supplier Development Council (NMSDC), or National Gay & Lesbian Chamber of Commerce (NGLCC), and any spend counts towards a corporation’s supplier-diversity objectives. Capabilities include consulting, strategy, marketing, communications, creative, execution, media, engagement, technology, and analytics. Each agency operates with a shared mindset and a common way of working together.

“For the first three or four years, we were the shiny toy,” said Streisand. “RFPs were coming in left and right.” Brands were focused on multicultural marketing. Before you knew it, Titanium had under its umbrella 23 agencies that are all independently owned and operated. A few years later, Titanium won its first agency of record (AOR).

Now corporations want their agencies to be streamlined, more cost-effective, agile, and nimble. From an operations perspective, doing this with independent companies took much work. Streisand began to understand why creative agencies buy other agencies.

Version 4.0 of The Mixx: Growth Through Acquisition

The Mixx and Captain Creative Group were doing a ton of work together. “We are two agencies that put relationships first,” said Streisand. “For 26 years, The Mixx has been working to help create the world we want to live in–to help brands realize that DEI isn’t just a moment in time, but a movement. Captain Creative’s founder and CEO Lisa Foti and I have been lifelong friends and collaborators in inclusivity and creativity.”

Captain Creative brings industry experience in experiential events, marketing communications, and production design for life sciences, technology, and consumer brands. Both agencies take an audience-centric, human-focused approach to marketing.

Streisand is the visionary. Her talent is seeing what’s down the road. Foti’s core competencies are operations, resourcing, setting up teams, and scaling. “We were doing so much work together, and it just became the natural evolution of our relationship.”

“Robyn came to me at the end of last year and said it just makes sense for us to work more closely together,” said Foti. “I was basically working half-time for my company and half-time for Titanium and The Mixx. It is an opportunity to work together to create something bigger.”

“I love working with the Mixx team and Titanium members,” said Foti. “It is a match made in heaven.” They each get to do what they love doing and are good at. And the icing on the cake is that it is an opportunity to collaborate with like-minded people, people you know and trust. “I trusted bringing my clients and team to The Mixx,” she said.

Integrating the systems and technology of two different companies takes work. But they are not even six months into the merger and are about 85% there.

How are you growing your business?

So, the day has come to finally figure out how much your rental property income will affect your child support payment. You won’t be surprised that many states consider that pretty penny a critical component when calculating these payments.

As with any financial analysis, it’s essential to understand how to break down the numbers, especially regarding child support. In most cases, parental income is calculated in its entirety. You’re going to have to provide proof of all of your finances. For rental property owners, the court will pay particular attention to the total net income of your rental.

So, how is rental income calculated, and how does that play into child support payments? We’ll give you the low-down on figuring out your rental income so that you can prepare yourself somewhat for the road ahead.

What Gets Calculated in Child Support Payments

The main factor that gets calculated in child support payments is parental income—the total amount of any salary or wages. This salary includes both taxable and non-taxable income.

The formula for calculating child support payments can vary depending on your state. When determining gross income, many factors can come into play besides salary. These factors may include:

• Rental income
• Business income
• Work bonuses
• Pensions
• Investments

One thing to note is that many states allow for deductions from gross income for things like:

• Property taxes
• Union dues

Aside from monetary obligations, some states also factor in the following:

• How much time the child spends with each parent
• Costs associated with health insurance
• The age of the child
• Childcare costs

How To Calculate Rental Income For Child Support

If you’re wondering how to calculate total rental income for child support purposes, the payments are based on several factors, but in a nutshell, here are the top three steps that should take place.

Determine gross income

First, how much cash is the rental property bringing in? Let’s use $1,000 in rent for each month as an example. At the end of the year, we have a total of $12,000 in gross rental income. We’ll remember this number as we move on to the next step.

Factor In deductible expenses

Yes, you can factor expenses into the equation. To make things simple, let’s consider the following expenses:

• Rental property taxes: $500
• Repairs and maintenance costs: $1,000
• Utilities: $1,200
• Property management fees: $2,500

In this case, the total allowable expenses are $5,200. However, there are still some expenses associated with the property that you can deduct from your gross income, such as your mortgage’s tax and interest. Let’s hold on to that $5,200 as we move on to the next step.

Calculate net rental income

You want to deduct the total allowable expenses from the gross rental income to determine your net rental income. Based on the examples above, we would use the $12,000 gross rental income minus $5,200 of total allowable expenses, equaling $6,800 in net rental income. So, the $6,800 would be used in the calculation to determine the child support amount.

Remember that the amount of child support will vary based on your state. It’s always a good idea to consult with a family law attorney or child support professional for guidance on accurately calculating rental income and child support payments.

Check Your Local And State Laws

Child support will be calculated differently depending on the state where you live. Often, states will provide child support calculators, which are a great starting tool for those strictly looking for an estimation; these calculators tend not to get into the nitty-gritty of finances, however, as they don’t factor in your specific circumstances. When looking into your local and state laws, here are a few formulas or models that you might see:

The Income Shares Model

Forty-one states use the income shares model. So, think of this model as the financial life a child would receive had the parents stayed together. For this, you’ll use both parents’ incomes.

The Melson Formula

Three states use this model: Delaware, Hawaii, and Montana. Think of this as a more extreme version of the income shares model. This formula incorporates additional factors and expenses, many designed to consider parents’ financial needs.

The Percentage of Income Model

Last but not least, six states (Alaska, Mississippi, Nevada, North Dakota, Texas, and Wisconsin) use the percentage of income model. This is a flat or adjusted percentage of the non-custodial parent’s income.

Rental Income And Child Support Payments FAQs

Here are people’s top questions when calculating rental income and child support payments.

Does child support count as income for renting?

It depends. This is an ongoing debate amongst landlords because there is a risk of the recipient of the child support not being paid at all—it happens quite a bit.

If you are a landlord considering counting child support as income, you want to look at the things like the court order and when payments are received. When it comes down to it, let’s say that the child support income is less reliable than you initially thought, and you decide to evict a tenant and collect the balance due. Will the state allow you to garnish the amount as normal income?

Since the Internal Revenue Service (IRS) doesn’t consider child support taxable income, I would not consider it in the rent calculation unless you have a HUD-specific home.

According to hud.gov, “[rental property] owners must count alimony or child support amounts awarded by the court unless the applicant certifies that payments are not being made and that he or she has taken all reasonable legal actions to collect amounts due, including filing with the appropriate courts or agencies responsible for enforcing payment.”

So, does child support count as income for renting? It depends on the situation and, if not required, the risk the landlord is willing to take.

What income is counted for child support?

The income counted toward child support can exceed just your salary. In some cases, gross income can include recurring capital gains or unrealized income, winnings from a day of gambling, rental income, and sometimes even interest earned on retirement accounts. Typically, any additional income outside of salary is considered.

Sometimes if C-corporations or S-corporations hold your rental properties, the court may even decide that the retained earnings are subject to child support calculations. If, for some reason, you disagree with the court’s order, perhaps you think an income source shouldn’t have been included, you can elect to go to the court of appeals to review the record. The review is to see if a legal mistake was made and if that mistake affected the overall outcome of the trial court case.

Is money from rental properties considered income?

Sure is, but only the net income from a rental property. So, what does that mean? The term “rental income” doesn’t necessarily mean you go off the total amount of rent payments coming in. You can deduct allowable property expenses from that amount, which will help you calculate net rental income.

This is because the “cash flow” is the amount received in rent minus what is being paid out, including the interest part of the mortgage payment, property taxes, insurance, and maintenance costs. Not all things you consider an expense are honored by the court.

For example, in a Colorado Court of Appeals case, “the trial court found that the principal portion of the mortgage payments did not qualify as ordinary and necessary expenses for purposes of calculating child support.”

It’s All In The Numbers

According to the Census Bureau, “Parents who received regular child support payments received a monthly average of $604 and a monthly median of $396 in 2017.” Although there hasn’t been substantial growth in the average year after year, the number does seem to increase continuously.

If you own a rental property and, for whatever reason, are going your separate ways with a spouse, make sure you truly pay attention to all of the numbers, especially your total allowable expenses. Those expenses are crucial in determining your overall rental income and the amount calculated into a child support payment.

Join the Community

Our massive community of over 2+ million members makes BiggerPockets the largest online community of real estate investors, ever. Learn about investment strategies, analyze properties, and connect with a community that will help you achieve your goals. Join FREE. What are you waiting for?

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

When asked about the source of his genius, Albert Einstein had no doubts. ‘I believe in intuitions and inspirations. I sometimes feel that I am right. I do not know that I am,’ he told The Saturday Evening Post in 1929. As entrepreneurs, a lot of what you deal with is unknown. You need to make hundreds of small decisions every day and every now and then, big decisions. Sometimes, the research data, although insightful, does not provide the exact answer on which decision to make. So, how do you decide? Well, you need to trust your ‘gut feeling’ or intuition. So, what is that and can you develop your intuition?

The scientific understanding of intuition begins with a laboratory game known as the Iowa Gambling Task. Participants were presented with four stacks of cards on a computer screen. Each time they turned a card, they would receive either a monetary reward or a penalty. Two of the decks tended to offer relatively large rewards, but even bigger penalties – meaning that, over many turns, they will lead to a loss. The other two decks provided relatively small rewards but even smaller penalties, meaning that they are the safer option. The participants aren’t told which decks are going to be profitable, but after about 40 attempts, many people start to form a hunch of which ones will lead to bigger wins. This ‘hunch’ is actually happening on a subconscious level. How?

Researchers at Leeds University analyzed a quite a few studies and research papers on intuition. They concluded that intuition is a very real psychological process where the brain uses past experiences and cues from the self and the environment to make a decision. The decision happens so quickly that it doesn’t register on a conscious level. The human brain has two ‘operating systems when it comes to making decisions.’ The first is quick, instinctual and effortless. This is where our intuition lies. Intuition works by drawing on patterns collected by our experience and when we have to make a quick decision about whether something is real, fake, feels good, feels bad, right or wrong, we draw on these patterns. It all happens ‘offline’, outside our conscious awareness. The second operating system is slower to respond. It’s more analytical and deliberate and it’s conscious.

So, the good news is that every person on the planet has intuition but not every person chooses to develop or even listen to it. Here are some insights to better develop your intuition as an entrepreneur.

Listen quietly. It’s sounds simple enough and it is. No tricks here. Your intuition can’t talk to you if you’re not listening. When you start to take notice, good things will happen. Just try it and listen quietly to your own instinct about a potential decision.

Trust your gut. When a word like ‘gut’ teams up with a word like ‘feeling’, you know there has to be a good reason. And there is. Research suggests that emotion and intuition have a physical presence in our gut. The gut is lined with a network of neurons and is often referred to as the ‘second brain.’ It’s known as the enteric nervous system (ENS) and it contains about 100 million neurons, which is more than the spinal cord and peripheral nervous system but less than the brain. This is why we get ‘sick’ about having to make a tough decision or knowing we’ve made a bad one.

Train your intuition. It’s hard to make big decisions without the practice of making little ones to hone your gut instinct. So, trust yourself on little decisions, try and predict little things, like the car ahead is going to turn left, the person next to will order dessert and so on. As you start making small decisions in your company based on your gut instinct, it will help you make the bigger decisions with confidence.

Trust the Feeling. You’ll know your intuition is there because you’ll be able to feel it. You’ll feel it in your belly and it will goosebump your skin, send a shiver down your spine, race your heart and quicken your breath. Sometimes it’s even more subtle and the only way to describe it is as a ‘knowing’. You’ll feel when something is right and you’ll feel when something is off. Start trusting the feeling.

Lose negative thoughts quickly. Negative emotions will cloud your intuition, which is why when you’re angry or depressed, bad decisions can happen so easily. Research has backed this, finding that people made better intuitive choices when they were in a positive mood as compared to when they were in a negative mood.

Surround yourself with great people. If you have people around you that just drain your energy, they will add to the noise and make it more difficult to hear what your intuition wants you to hear. Chances are that you already know who they are. Keep people who enrich and empower you and walk away from those who drain you.

Pay attention. Start being more aware of your surroundings. Go for walks with no headset or Air Pods. Really talk to people. Have open interesting conversations. Read more. Be more curious. The more information you are able to gather from the world around you, the more the intuitive, subconscious part of your brain has to work with, the more accurately it will inform your decisions.

Connect with experts. You will never know everything. A better approach to learning is to acquire the knowledge and experience that experts can provide. Experts have also had to make lots of decisions and can share their failures and wins. They can tell you the little things they learned to trust their gut. All of that information can be synthesized into your ‘intuition’ to help fine tune your future decision making.

Sleep well. We all need to dream. Dreams are the brain’s way of processing information that’s left over from the day or even our aspirations. They are rich with valuable data, experiences, memories, and learnings so they can work hard if we let them. Paying attention to dreams can provide information that we may not have access to when we are awake. Before you fall asleep, turn your thoughts to any unresolved issues or problems but in a positive way. Think about possible options or resolutions as you’re falling asleep. You might be surprised what you remember when you wake up.

Custom building a home is a dream many homeowners share. Being able to design your home exactly to your preferences is an exciting but time-consuming endeavor. 

So, how long does it take to build a home? Building a custom home can take as little as a year to upwards of three years. The reason it’s so hard to nail down an average time estimate for completion? The average time for how long it takes to build a house can vary widely due to the scope of the project, weather-related delays, and how readily available supplies and labor are. Getting permits and completing inspections can also extend this timeline if those processes are difficult to schedule. 

The Average Time Building a House Takes

The timeline of building a home is influenced by the type of home you choose to build. Custom builds require more build time as they are designed and built to your precise specifications. A non-custom build, on the other hand, is generally faster as it uses pre-designed plans and standard layouts. According to the 2019 Survey of Construction (SOC) from the Census Bureau, it takes around eight months to build a single-family home on average. 

How Long Each Type of Home Takes to Build

How long it takes to build a house can vary depending on several factors, including the type of home, the size, the complexity of the design, the availability of labor and materials, and the efficiency of the construction process. 

• Prefabricated or modular homes: Workers construct these homes off-site in a factory and then transport the home to the building site for assembly. Typically, you can build prefabricated or modular homes in a shorter time than traditional construction methods. The on-site assembly can take anywhere from a few days to a few weeks, depending on the complexity and size of the home.
• Custom or traditional stick-built homes: A construction team builds this style of home on-site using traditional construction methods, where they assemble the structure piece by piece. Building a custom or stick-built home generally takes longer compared to prefabricated homes. The construction process can take several months to a year, depending on the size and complexity of the home, weather conditions, and availability of labor and materials.
• Production or tract homes: Large-scale builders construct these homes using standardized designs and materials, often in a planned community or subdivision. Production of tract homes is generally efficient, and the building process is relatively quick. Construction timeframes can range from a few months to six months, depending on the home’s size and features.

Are Custom Builds Slower? Why Is This?

Custom-built houses often take longer than buying a pre-designed home in a planned community because of the additional planning and customization required. The project’s scope and unique features, fixtures, and finishes affect how long it takes to complete. Because custom homes are built to the client’s specifications, you may need additional time to finalize plans and design elements. It’s common to see delays during the building process due to design changes or unexpected issues. 

Non-Custom Builds May Be Faster Than Custom

If you’re looking to build a house that falls within the standard range of production homes, you can expect the construction process to go much faster. These types of homes often have pre-set plans, limiting your customization. Most homes are still customizable (tile, flooring, and paint colors), but planning is easier since you work within given boundaries.

What You Need to Know Before You Start Building That House

Before embarking on your construction journey, you need to consider several factors. The first thing to decide is the type of home you want to build. Will it be a custom or production home? You should also incorporate your family’s unique needs into your home’s design and layout.

Another crucial detail is the type of lot you’ll build a house on. The terrain and size of the lot can directly impact build time, costs, and even the design and layout of your home. Securing financing and finding the right general contractor for the job should also be taken seriously. Choosing the right contractor is critical to achieving your desired outcome on build time and within budget, so do your due diligence.

Main Issues That Can Impact the Timeline

Numerous issues can impact the timeline of building a custom home, with the weather being one of the most significant to influence construction time. Various permits and authorizations, such as inspection and building permits, can also impact how long it takes to build a home. One way to ensure a smooth timeline is by carefully planning and scheduling each phase of the home-building process.

Saving Time During the Building Process

To save time during the construction of your new home, you first need to have a clear understanding of the next construction timeline itself. Ensure your desired schedule can be accommodated and planned, including any additional time required for permits, inspections, or other issues.

It’s also important to ensure that all materials required for your home are acquired beforehand, ensuring the construction period can continue without interruptions or delays.

Permits and Authorizations: What You Need to Know

To construct a new dream home, you must acquire permits from municipal departments such as the building or zoning department. These permits and authorizations help ensure that building construction adheres to standard building codes, restricting the possibility of home construction defects and related problems.

The Style and Scale of Your New House

The style and size of your new house can significantly impact the timeline of constructing your new home. Larger homes will often take longer to build than smaller homes due to the increased work required and the need to secure many more building materials.

The Timeline of a Typical Home Construction

The actual construction timeline for constructing a typical home can vary depending on the location and complexity of the building plans. Here is a rough construction timeline for building a typical home:

Week 1: Prepping and planning

To kick off a custom build, you must tackle site preparation, obtaining permits, setting up equipment, establishing a construction schedule, and planning the rigorous building process.

Weeks 2-5: Framing and home foundations

Once your contractor is ready to break ground on the home-building project, their team will need to complete the foundation and framing work, including framing the walls and roof of the first-floor plan and house. After framing, a structural inspection ensures all work is up to code.

Weeks 6-7: Mechanical elements

It’s time to get down to basics and start installing plumbing, electrical systems, ductwork, and heating and cooling systems.

Weeks 7-8: Drywall and other insulation

Usually, about seven to eight weeks in, you’ll install insulation to help regulate the temperature inside your home and drywall to close up the interior walls.

Weeks 9-11: Painting and flooring

Prepare for the fun stuff—painting the interior and installing floorings such as tile, hardwood, or carpet.

Weeks 12-13: Exterior elements and finishes

Once you complete a decent chunk of the interior work, it’s time to head outside and install exterior doors and garage doors, building walkways, roofing, and gutters.

Week 14: Finishing off the interior

After you finish the base of the home, the finishing touches occur, like installing cabinetry, appliances, and lighting fixtures.

Week 15: Finishing off your driveways and walkways

About four months in, the build team must complete exterior elements such as your driveway, walkways, and landscaping features.

Week 16: Final finishing touches and clean up

As the project starts to close, it’s necessary to clean up the construction site, check the building site for any remaining issues and ensure everything is up to code.

Week 17: Landscaping and gardening

During week 17, the home builders will start to finalize the exterior appearance of your new home, including planting trees and shrubs.

Week 18: Inspection of the finished home

If all goes well, you’ll complete a final inspection by a municipal inspector to ensure everything in the home is up to code. This is a key step for safety. 

Week 19: Final home walkthrough of property

The final home-walk through is a really exciting time in any custom build. The homeowner and builder conduct a final walkthrough to ensure everything is working.

Week 20: Closing on the new home construction

To wrap things up, at about week 20, the homeowner signs documents to complete the home purchase and officially takes ownership.

Some Final Elements to Consider When Building Your New House

Unfortunately, the costs don’t stop once you’re done building the home. You must also plan for mortgage and escrow costs to build a custom home. 

Costs, mortgage, and escrow

When it comes to building a new custom house, there are a few final elements to consider to ensure that you are fully prepared for everything the process entails. One of the most important things to keep in mind is the cost of a mortgage. While you may know what you can afford to spend each month, speaking with a mortgage broker or lender is essential before beginning your build to give you a clear idea of your budget and help you avoid surprises. Using a mortgage calculator can make it easier to determine what your monthly payments will look like. 

Additionally, it’s important to consider the costs of escrow—the money you will need to set aside for expenses such as property taxes, insurance, and maintenance. Create a separate account for these expenses and contribute a set amount each month to ensure that you are prepared for any unexpected expenses that may arise.

Find an Agent in Minutes

Match with an investor-friendly agent who can help you find, analyze, and close your next deal.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Douglas Elliman CEO Scott Durkin joins ‘Squawk on the Street’ to discuss the health of luxury real estate and more.

When you consider the challenges facing the world, the temptation to become depressed, apathetic, and cynical is great. These problems are so complicated, how can they possibly be solved? Who among us is daring enough to try? We need leaders who are unafraid to question the status quo.

The good news is, a pathway for nurturing these leaders exists and is already growing nationwide — it’s called invention education.

ADVERTISEMENT

Invention education is different from other educational frameworks that support innovation, like STEM, because it puts the student in the proverbial driver’s seat. Instead of being assigned a problem and instructed how to solve it, it’s up to the student to identify a problem they want to design a solution for. As they research the problem of their choice and begin developing potential solutions, the student is asked to consider the experiences of others, which focuses their empathy. As part of their curriculum, students hone their ability to communicate their ideas clearly and convincingly.

If all invention education did was teach students how to be inventive, that would be significant. But its benefits extend far beyond inventions. Learning how to identify and solve problems is an antidote to powerlessness. It embeds within young people the notion that problems are worthy of being solved and in fact can be solved. It teaches them how to approach others for help, expanding their capacity to make progress in every arena of their lives.

The teenage inventors I’ve had the privilege of interviewing are confident and highly capable. They’re leading now, not future leaders.

Here’s a snapshot into their lives as young inventors.

ADVERTISEMENT

Samaira Mehta

Samaira Mehta is a 15-year-old entrepreneur and STEM advocate from the Bay Area who designed and commercialized her first product — a board game that teaches coding concepts to children — before middle school.

The game was a solution to a problem she faced as a 6-year-old, which was that her friends didn’t think coding was fun or interesting. Could she convince them otherwise? Creating a physical game based on a digital process is unusual, Mehta points out.

ADVERTISEMENT

“As a child working in the space of innovation, one of the biggest advantages we have is that our brains are not confined to possibilities. We can think of stuff that may or may not be possible,” she explains.

She began thinking of herself as an inventor and a CEO when she realized she was creating a solution that was going to impact people. Today, she estimates that the three board games she’s brought to market — all of which simplify complex concepts — have reached more than 25,000 students. Now her goal is to help one billion kids learn to code, because she believes it’s an essential skill. To that end, she launched “Coding As Easy As 1234” last year, an online program that uses game play to introduce AI and coding.

As of late, she’s been applying her strengths as an innovator to the field of medical research. Her creation of a platform to aid in the diagnosis of ovarian cancer — which uses artificial intelligence and machine learning — won first place in the California state science fair in 2022.

ADVERTISEMENT

According to the Ovarian Cancer Research Alliance, while ovarian cancer is the 11th most common cancer among women, it is the fifth-leading cause of all cancer-related death among women. Mehta was inspired to focus on this issue after the loss of her science teacher’s mother to ovarian cancer and her discovery that ovarian cancer has been overlooked among the medical community.

“When I saw a problem and that there was absolutely no good solution for it in the world today, I decided, well, what if I just create the solution?” Mehta explains. “Sometimes, the best solutions may come from children and from teens and from our generation. So, we should be taught how to save our ideas and really call them our own.”

Mehta encourages young inventors to start slow, build up momentum around their work, and then, when the timing is right, go big. She is currently working on a graphic novel for middle schoolers about a coding club with MIT Kids Press.

ADVERTISEMENT

Aum Dhruv and Nick Harty

As juniors enrolled in International Baccalaureate programs at Fort Myers High School in Florida and Harrison High School in New York, Aum Dhruv and Nick Harty co-invented Vision Bound, a low-cost tool for diagnosing diabetic retinopathy. Diabetic retinopathy affects over 90 million people worldwide and can cause blindness when left undiagnosed and untreated, which is often the case in low-income and middle-income countries.

They describe their fully functioning prototype as “a solution to bridge the gap between preventable retinal diseases and technology.” Their invention, which capitalized on earlier experiences with FIRST Robotics, evolved out of a desire to develop medical software for a point-of-care device. Fleshing out their initial concept required them to conduct original research using the algorithms of neural networks, cold email local ophthalmologists and a university researcher, and learn how to 3D print.

ADVERTISEMENT

Last year, they teamed up to compete and ultimately win a first-place prize in the annual Invention Convention competition held at The Henry Ford Museum in part because their skills complimented each other. Harty had developed a background in computer science through robotics competitions, STEM educators, and MIT’s Scratch, whereas Dhruv has honed his interest in the sciences and business through HOSA and DECA. Their interest in STEM was sparked in middle school through competitions they thrived in, including math team and science fair.

Ultimately, Dhruv describes the experience of designing an entire research project by themselves, start to finish, as “life-changing.” They’re both confident they want to continue developing their own ideas into businesses.

“Inventing is what we love,” explained Dhruv simply.

Harty encourages teens who are interested in inventing to find a team of people they can work well with who have skills that are impactful towards the project they want to focus on.

ADVERTISEMENT

“If you want to make something but you don’t know how to use CAD or 3D print, you need to reach out to someone,” he said. “Try to find a schoolmate or a teacher who knows how to use CAD.”

Dhruv encourages young inventors to ask a lot of questions and be unafraid to approach adults.

“When you’re young, people don’t really judge you for making a mistake,” Dhruv explained. “And you need to make mistakes in order to learn and truly grow.”

Ways To Help Young People Embrace Their Inner Inventor

Inventing comes naturally to humans, stressed Britt Magneson during a Zoom interview. As the executive vice-president of the National Inventors Hall of Fame, she oversees educational programs for youth that merge creativity and play with STEM concepts. Parents don’t need to purchase a special kit or toy to spark the spirit of inventiveness within their children, because it already exists, she says. Instead, she recommends asking open-ended questions and providing a large volume of open-ended materials for children to experiment with as they explore the question, “What if?” These materials can be simple, everyday items.

ADVERTISEMENT

Juli Shively is a longtime invention education advocate who founded a quarterly, free 24-hour online event for young innovators to present their ideas in March of 2020. Since then, Global Innovation Field Trip has provided students from more than 60 countries with a platform to connect, share, and collaborate — an experience she has dubbed “world learning.” She describes her website, Innovation World, as a “one-shop stop” for resources related to the youth innovation space.

In a Zoom interview, she emphasized the importance of seeking out learner-directed programs instead of programs that teach a general process. It doesn’t matter what the program is centered around, per se, she said — it could be coding, art, music, or innovation. The important part is that the young person is actually excited about what they’re going to do because they have a hand in determining that. This teaches them that their direction is important, whilst giving them the support they need to thrive.

ADVERTISEMENT

Shively also recommended helping children meet people who can be role models. As an example, she told the story of a 9-year-old GIFT presenter who she and her cofounder encouraged to write to Neil DeGrasse Tyson, the student’s dream lunch date. The six-page handwritten letter ultimately turned into an invitation for the student to meet Tyson backstage at a local event happening later that year.

“These people want to inspire young people to follow in their footsteps or to do better than them and to go farther. It’s worth asking,” Shively explained. “It might not work, but it might, and how cool is that?”

In my experience, people who have succeeded creatively are very willing to help mentor the next generation.

An important final note. Invention education is particularly well-suited to engage at-risk youth, including neurodivergent children, for whom thinking differently is second nature.

ADVERTISEMENT

Looking for an invention education program for a student in your life this summer? Check out the National Inventor Hall of Fame’s Camp Invention — there are more than 1,000 programs running nationwide.

Did you know you can buy real estate in your IRA or 401(k)? Most real estate entrepreneurs are unaware of how easy it is to buy real estate in these accounts. 

Welcome to the world of Real Estate IRAs.

1. What is a Real Estate IRA?

A real estate IRA is a supercharged IRA that enables you to invest your retirement money directly into real estate such as multi-family, commercial, land, fix-and-flips, tax liens, and more. It has the same tax benefits as a regular IRA and can be set up as a Traditional, Roth, or SEP Real Estate IRA. 

A Real Estate IRA is also known as a Self-Directed IRA.

2. How Does it Work?

Opening a Real Estate IRA can be done in three simple steps: open, fund, and invest! 

Step 1: Open: You select a Self-Directed IRA Custodian and open your account by completing their online application. 

Step 2: Fund: To fund your account, you transfer or rollover all, or a portion of, an existing IRA, 401(k), or other retirement accounts or by making an initial contribution. 

Step 3: Invest: You instruct your Self-Directed IRA Custodian to send your retirement funds to your real estate investment. 

The process, from start to finish, is typically 1-3 weeks.

You may want to consider upgrading to a Checkbook IRA—which will enable you to manage your IRA without the need to contact your Self-Directed IRA Custodian for everyday transactions—thus saving you time and money.

3. Real Estate IRA Do’s and Don’ts   

So, what can and can’t you do with real estate in your IRA?

Since your IRA is intended to provide benefit for you in retirement, not today, there are a few rules in place that ensure all benefit is preserved for the future—when you retire.

Rule #1: You and your immediate family members, such as your spouse, your parents and grandparents, children and grandchildren, and their spouses, as well as the entities they own—collectively known as “Disqualified People”, cannot benefit from your IRA today.

The most popular question we get is, “Can I live or vacation in a property owned by my IRA?” Unfortunately, you cannot until you retire and withdraw the property from your IRA. Many people, therefore, buy a property now, rent it out, then at retirement withdraw the property and live in it.

Rule #2: The same group of “Disqualified People” cannot transact with your IRA.

The second most popular question we get is, “Can my IRA purchase a property that I currently own?” Unfortunately, not. This is because if a Disqualified Person transacts with your IRA, it is considered “Self-Dealing” and is not allowed. All transactions with your IRA must be at arm’s length with a non-related third party.

Another popular question we get is, “Who can and who can’t perform work on the property?”

The answer is that all work done on the property must be done by unrelated third parties. 

The last question for now “How about if I do the work but don’t get paid for it?” 

That would be considered “sweat equity,” which would be a non-cash contribution to your IRA—and, unfortunately, is not allowed. You can, however, perform “desk work” such as hiring contractors and subs, paying the bills, collecting the rent, overseeing the property, etc. 

Rule #3: All income and expenses must flow directly into and out of your IRA. Always remember that you and your IRA are separate entities.

4. Non-Recourse Financing for Your IRA    

There’s always more real estate to buy than there is cash on hand. That’s why most savvy real estate investors use leverage to grow their portfolios.

When using leverage in an IRA, there are a few things you need to know.

Firstly, you cannot borrow money from “Disqualified People” (the immediate family members listed above)—you can only borrow from unrelated third parties.

Secondly, you cannot personally guarantee the loan. It must be a non-recourse loan.

Thirdly, when an IRA borrows money, the net income attributable to the loan is known as UDFI, Unrelated Debt Financed Income, and is subject to a tax. Although nobody likes to pay taxes—especially in an IRA—when you do the math, it’s almost always worthwhile because, at the end of the day, you are left with more money than if you did not take out the loan. Your Self-Directed IRA Custodian can walk you through the math if you’d like.  

5. Upgrading to a Checkbook IRA   

You may want to consider upgrading your Self-Directed IRA to a Self-Directed IRA with Checkbook Control. This will enable you to manage your IRA without the need to contact your Self-Directed IRA Custodian for everyday transactions—thus saving you time and money. 

Checkbook Control is very appropriate for investments like real estate that have a lot of transactions—or if you are holding many investments in your IRA. 

Upgrading to Checkbook Control only adds one extra step to the process!

How does it work? It’s typically a simple four-step process—open, fund, create, and invest!  

Step 1: Open: You open your account as described above. 

Step 2: Fund: You fund your account as described above. 

Step 3: Create: Your Self-Directed IRA Custodian establishes a new LLC or Trust for your IRA—which will serve as your IRA’s self-directed investing platform. You are appointed as its manager or trustee, authorized to make all investment decisions. At your direction, your Self-Directed IRA Custodian will fund your IRA LLC or Trust at the bank of your choosing. 

Step 4: Invest: You can begin placing investments by simply writing a check or sending a wire.  

The process, from start to finish, is typically 2-3 weeks.

6. Airbnb and Vrbo in Your IRA

“Can my IRA invest in an Airbnb or Vrbo?”

Yes, it can, but here is why it’s even a question. As a relatively new asset class, it is not referenced in the Internal Revenue Code. It falls somewhere between a typical rental property and a hotel.  

A typical rental property is considered a “passive” investment and is non-taxable. A hotel, on the other hand, is considered an “active” investment—and if held in an IRA, would trigger a tax known as UBIT, Unrelated Business Income Tax.

So, the question is: What is Airbnb or Vrbo considered? And is it subject to UBIT?

The IRS has not issued clear guidance on this. So, what do you do?

Here’s the general guidance we’ve received—so long as you don’t provide daily maid service, breakfast, or other personal services that a hotel offers, it is likely not considered “active,” and UBIT would not be applicable. If Airbnb or Vrbo is part of your strategy, you should consult your tax advisor.

7. Fix-and-Flips in Your IRA

When buying a property in an IRA to fix-and-flip, there are two main considerations you need to be aware of: 

1. UBIT, Unrelated Business Income Tax, and 
2. Who can and who can’t perform the actual renovations

When you purchase a property in an IRA and rent it out—it is considered a “passive” investment, and the income is non-taxable. When you fix-and-flip properties in an IRA—it may be considered an “active” investment—and may be subject to UBIT, Unrelated Business Income Tax. The IRS has not issued clear guidance on this. So, what do you do? The general guidance we’ve received is that if you flip multiple properties, two or more, within a short period of time, less than 12 months, you’re likely subject to UBIT. Less than that, or over a longer time frame, you’re likely not. If fixing-and-flipping is part of your strategy, you should consult your tax advisor.

The second consideration is “Who can and who can’t perform work on the property?”

The answer is that all work done on the property must be done by unrelated third parties. 

“How about if I do the work but don’t get paid for it?” 

Once again, that would be considered “sweat equity,” which would be a non-cash contribution to your IRA—and, unfortunately, is not allowed.

8. Land in Your IRA

Land is a very popular Self-Directed IRA investment choice. IRA Investors typically buy and hold land because, historically, it appreciates over time, which is ideal for an IRA’s long-term investment horizon. The main thing you need to know about buying land in your IRA is that all expenses—such as the real estate taxes—must be paid by your IRA and not by you personally.

Additionally, you cannot pay the expenses personally and then get reimbursed from your IRA. Your IRA must pay them directly—or through a third party, such as a management company.

9. Tax Liens in Your IRA

Bidding on tax liens is a time-sensitive investment that requires you to have funds immediately available when bidding. This is where the power of a Self-Directed IRA with Checkbook Control comes into play. Whether in person or online, you always have instant access to your IRA funds enabling you to purchase the tax liens without having to go through your IRA Custodian.     

10. How do I Choose the Right Self-Directed IRA Custodian?

There are three factors to consider when selecting a Self-Directed IRA Custodian—customer service, reviews, and fees.

You want to choose a trusted company that has a knowledgeable and friendly staff based in the U.S. who answers the phone without making you wait. They should have thousands of 5-star reviews across multiple online platforms such as Google, Yelp, BBB, and Facebook. 

Self-Directed IRA Custodians structure their fees as either flat-rate or asset-based. Flat-rate is when the fee is fixed regardless of the value of your account. Asset-based is when the fees are based on the value of your account. The larger your account, the larger the fees. You want to choose a trust company that offers a flat-fee structure, so you pay less in fees.

This article is presented by Madison Trust

Madison Trust Company has been a regulated trust company and industry leader since 2014.  Together with their sister company, Broad Financial, they have more than 20,000 clients spread across all 50 states.  Their friendly and knowledgeable staff—based in New Jersey and South Dakota—provide incredible client support.  They have thousands of 5-star reviews online and their fees are fixed at a low-rate.

Learn more about Real Estate IRAs and Madison Trust Company by going to: www.madisontrust.com/biggerpockets

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Zillow’s Skylar Olsen and Deutsche Bank’s Joe Ahlersmeyer join ‘Power Lunch’ to discuss the U.S. housing market with a 7 percent mortgage rate putting pressure on the sector.

Many customers are suffering right now with high inflation and interest rates.

Now, while that is easy to say and observe, it’s often hard to quantify what that means, in practice, and how many customers are being materially affected.

However, over the last couple of years, Financial Conduct Authority (FCA) here in the UK has been tracking consumer financial vulnerability.

Their research found that in May 2022, nearly 13 million or 24% of all UK adults had what they term ‘low financial resilience’, which they describe as being in a state where if they suffered a sudden change in their personal financial circumstances, then they would struggle to pay their domestic bills and meet their credit commitments.

ADVERTISEMENT

Alarmingly, this number has increased by over 2 million adults since their February 2020 Financial Lives survey.

This is not surprising, given the effects of the pandemic and the significant increases that we have seen in the cost of living over the course of 2021, 2022 and through into this year.

But, these numbers only account for those customers that are financially vulnerable. If we take into account the FCA’s four drivers of vulnerability (poor health, recent negative life events, financial resilience and low capability), then the number of vulnerable UK adults rises to nearly 25 million or 47% of the adult population.

That’s a big number.

In response to this and what is being labelled as “one of the biggest-ever shake-ups of consumer finance in the UK”, the FCA is introducing on the 31st July of this year new rules and guidance (Consumer Duty) for banks, building societies, insurers, investment firms, and many other businesses that fall under its purview.

ADVERTISEMENT

These rules will require firms to act to deliver good outcomes for retail customers covering products and services, price and value, customer understanding and customer support.

Moreover, the FCA’s new rules will “require firms to consider the needs, characteristics and objectives of their customers – including those with characteristics of vulnerability – and how they behave, at every stage of the customer journey. As well as acting to deliver good customer outcomes, firms will need to understand and evidence whether those outcomes are being met.”

So, what does that mean for customers?

Well, let’s say, for example, a customer wants to switch to a new product but faces a large exit fee if they do so. That fee would now fall foul of the FCA’s new rules.

ADVERTISEMENT

Or, for example, let’s say a customer wants to cancel a product but is told that to do they have to physically go into a branch. That requirement would now also breach the FCA’s new rules.

In addition, customers can also complain if they think they have not been fairly treated under the new rules. And, if the FCA finds that there was unfair treatment or risk of harm to a customer, then the offending firm can expect robust action in the form of interventions, investigations or possible disciplinary sanctions.

It’s not yet clear what those interventions or sanctions may look like, but to give some context, the FCA has levied nearly GBP1.5 billion ($1.87 billion) in fines over the last five years, with the largest fine for one single organization being in excess of GBP260 million ($324 million).

But, it’s not just the customer’s responsibility to point out where they may have been mistreated. The FCA will also require firms to monitor and report on customer outcomes.

Now, if you consider the number of interactions (calls, emails and messages etc) that a bank or other financial service institution will have with their customers on a daily, weekly or monthly basis, then monitoring and assessing all of those interactions is a massive job.

ADVERTISEMENT

I spoke to Darren Rushworth, President of NICE International, to better understand what this means for financial service organisations.

He told me that traditionally when new regulations come into place, firms often rely on employees, consultancies or suppliers, employing hundreds of people, to go through all of their calls to assess whether they have adhered to the guidelines or not and if any remedial action needs to be taken.

That is a very costly exercise, which, in itself, is often a real disincentive against any meaningful change with some firms often happier to pay fines rather than make any changes to the way they do business.

ADVERTISEMENT

But, when it comes to the new FCA regulations, Rushworth believes things are different and that “It’s actually going to be very, very difficult for organizations to implement these regulations, especially when it is people that are involved in deciding whether something is compliant or non-compliant.”

He illustrated this using an example of a UK insurance firm who, relying on their own practices and best efforts, were only able to identify 20% of the customers who would be considered vulnerable according to the FCA’s new consumer duty of care.

In response to these changing requirements, NICE have developed and built into their Enlighten AI analytics platform a series of analytical models that have been trained and tuned specifically to analyse and highlight interactions with vulnerable customers.

ADVERTISEMENT

This allows them to automatically score and classify every interaction, better understand where action needs to be taken to ensure compliance, provide real-time guidance for agents when dealing with customers and uncover underlying product, process or skill-based issues that are drivers of vulnerability and complaints.

The previously cited insurance company have recently implemented NICE’s Enlighten AI for Vulnerable Customers analytics solution and, over the course of just a few weeks, they have increased their ability to identify vulnerable customers from 20% to 80%. Moreover, that number is improving all of the time, and they are now only deploying human beings now to look at the most serious cases.

The moral of the story, according to Rushworth, is that “treating your consumers with a fair and reasonable duty of care is impossible to do with any level of confidence without technology.”