Business Innovators Radio - Interview with Ethan Heisey, CEO of Exponential Freedom Discussing Legal Tax Reduction for High Net Worth Individuals

Episode Date: September 16, 2025

Ethan is the CEO of Exponential Freedom, Ethan’s drive for leadership and financial freedom surpasses many other traditional approaches. He is a public speaker at many events, along with formulating a company of many employees who hold his trust. His consulting services have helped over 2,000 persons in the art of saving Tax, increasing their net worth, and driving business revenue.Learn more: https://theexponentialfreedom.com/The information provided during this appearance is for general informational purposes only and should not be considered personalized financial, tax, or investment advice. Each individual’s situation is unique, and viewers are encouraged to consult with a licensed financial professional before making any decisions. Exponential Freedom is a consulting and marketing firm—we do not offer financial advice or make recommendations. Instead, we connect clients with qualified, licensed professionals best suited to their specific needsInfluential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-ethan-heisey-ceo-of-exponential-freedom-discussing-legal-tax-reduction-for-high-net-worth-individuals

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with his Ethan Heise, who's the CEO of Exponential Freedom, and we'll be talking about navigating legal tax reductions. for high net worth individuals. Ethan, welcome back to the program. Thanks.

Well, happy Wednesday, everybody. Another good day to get things going. Yeah, it's another good day to have a great day. And I love this title, navigating legal tax reduction because I know a lot of people start going, wait. I mean, you're talking about this strategy or this, and that feels a little weird. Nope, it's legal. And then high net worth individuals.

So this is what we're going to talk about today is not for the person working down. the road at a fast food shop. This is for a high net worth individual. And let's start off with defining that. What is the definition of a high net worth individual? You're right. I do like that, what's it called? The title, legal. I would hope that we never recommend anything illegal. And I was joked like that because people, the number one thing I get from people is they always come to me and say, hey, this sounds too good to be true. This is, I've never heard of it. before. Like, why didn't my CPA tell me to do this? And he said

explained to him that the definition of a CPA is a certified public accountant. They're great. They're great at filing taxes, but oftentimes they're not really paid to build strategies for you. And that's why you might not have heard it. But yes, legality is always good and never do anything

that you don't have the confidence in a tax attorney CPA or helping you guide to do unless you have some sort of background. in this because you don't want to get in trouble with the IRS. Yeah, so, and I guess getting back to your question, Mike, I don't know, explain that. Ask that question more times.

Yeah, what's the definition of a high net worth individual? Definitely. So usually we work with people that are going to be making a 400K income or above, which is generally a $100,000 tax liability for the most part. The, the stock, the, whenever you work with people in the tax mitigation space, the code is, most always it leans toward higher net worth individuals. There's more things you can do for them than you can with people under that income mark. And it's not necessarily, you know, is it good or bad? That's just how the code is. But people in the, say, making 50 to 100,000 mark, there's,

there's only so much you can do. Your Mac's not your 401k. You're getting your deductions from homestead exemptions. You're doing all these other stuff. But that's really your limit. The people that we work with, there's other things open to them, but you have to be a lot of times considered a credited investor. And that's what a high net worth individual is to us.

Got it. Got it. That makes sense. Good. So how can these high net worth individuals then make sure that tax reduction strategies are, yeah, legal, like you mentioned, but effective? Because I think that's, you know, any, any, you want to bank off of what you just said about, you know, the higher net worth. If you were to throw out a number like 25%, well, 25% of 100,000 is 25,000, 25% of 1 million is 250,000, big, big changes there. So when you're talking about these tax reduction strategies for high net worth, there's some pretty big momentum you're able to create.

So how do you make sure that these individuals are feeling confident that, yes, they're effective and also legal? That's the number one. I spent my last few years building a business to where I had an offer that was so good. It was impossible to say no to. And that's what we've essentially done. because we spend our time speaking with attorneys, speaking with tax experts, speaking with consultants, CPAs, IRS agents, getting them all on the phone and figuring out what is it that the ultra wealthy uses for themselves?

And now that we have such great strategies for our clients, the number one objection that we get is I've never heard of this. How can I trust it? And I usually tell clients there's a few ways that we can help you feel comfortable. The first one is, hey, I'm we've been in business for quite some time and one, we wouldn't

be here if we were in the business to give illegal recommendations, but we'll come fly to see you, we'll handshake you and give you the comfort level. But on top of that, whenever you're working with a tax mitigation strategist, I always tell people to do the following. One, speak with

current clients to see what they've successfully done with them. Hopefully a client has been there for a few years, at least. Another thing is go consult an independent source. See what that other person says before you commit. Another one is go find opinion letters of other law firms stating this is a legit strategy. And then if you want on top of that, I think the best one is just looking at the strategy, seeing the historical performance.

Has it been around for many years? And has it been effective? Has it worked? Have there ever been any issues with it? And if you can check all those boxes, you can have 100% success or 100% confidence this is going to work for you. Because you are limited in what you know.

You don't sit there and study the tax code every day like the person you're talking to is. So you can do your check mark. You can check mark those boxes by doing your best do diligence and that's how you do diligence as a person seeking help in an area you don't quite know. You know, if you were listening to someone that was trying to promote something shady, you're not going to hear them say, here's many, many ways to verify this. So what you just said there is really powerful.

So it's like, yes, do the gut check, do the real checks, opinion letters, all of those things. That's awesome. You know, and a lot of times you watch Shark Tank and it's like, you know, oh, good, you're doing. all this great numbers and how much are you paying yourself? And they kind of stare at them and go, well, we kind of just dump it right back in the business. So how does reinvesting in a business compared to maybe a traditional tax payment strategy in terms of financial growth for a business? Yeah. I mean, it's, you ever just sat down and looked at a compounding interest calculator? You, you put it, if you can save yourself an extra 25% every year on taxes and they

go put that into an investment and then you're making your 10% growth in that S&P 500 fund or whatever you choose to do with it. That right there is a huge return on your money. That's an ROI to it itself. Tax savings, that's an ROI. But then where a lot of my business owners know is that their business oftentimes is going to make way more money than any insurance product or any in stock market investment because that's what got them to be successful.

They were getting 20 and 30 and 40% returns on their business every year, which is how they created to become a millionaire. So if you can save 25% of your taxes, oftentimes we can get clients to save upwards of 50 to 75% on a regular basis as much as even 90 at times. But if we can wipe out that tax bill, you then reinvest that back into your business or some sort of alternative investment,

all you're doing is exponentially growing your net worth. And I don't even tell you, but it's such a logical statement. And again, people don't ever say no to that. It's funny, Mike. When I tell them I can get them back on taxes, I've never had to know.

It's interesting. Well, it's funny. You mentioned about the compound interest calculator, and it reminded me, I'm sure I'll butcher the quote, but Albert Einstein is known for saying, you know, compound interest is one of the wonders of the world. And that sounds great to throw out those kinds of things.

But the person needs to be disciplined to actually take that savings and do all that good with it. Because the problem lies, and I'm sure you've heard of this or seen this before, the problem lies with, yay, you saved me X number of dollars. And now, poof, I just took nine more vacations and bought three more cars. You have to be disciplined to then put that back into the growth vehicles, whatever they may be, so that compounding can work for you. 100%. It is a wonder. The hard part with that compounding, though, I think, where there's a lot of people have is it's not overnight. But over a long period of time, it does add up and it does significantly grow.

I know they did a study on, you know, Warren Buffet. it over time. And it wasn't, for him, he really just focused and it just compoundingly grew over time. And then they compared him to someone else who was getting, I think it was like 200% returns in their business for 10 years in a row. And the reason Warren Buffett was so much more successful is he just had a longer time horizon. Yeah. But people oftentimes, even if the return isn't that exciting for what you're putting it into, your investment, your business. it's just the power of time that grows money. It's not necessarily the amount you put in.

You just have to stick out the course and know that it's going to be better over the years. You know, we could probably spend four more hours on that one thought that you just mentioned, which we will not. But the point is, you know, you didn't get into that amount of debt overnight, so you can't get out of it overnight. You didn't gain for, you know, 40 pounds overnight, so you're not going to lose 40 pounds overnight. So time has to work for you. And I think that, you know, yes, you can compress time to get some of those objectives, you know, business objectives and growth and scaling and all that. You can do that. But then when you're watching for results, give it a minute.

You know, give it some time. Have that longer horizon because if you can do that, your competitors typically are not and they're running fast and furious. and they're going to make a misstep, whereas you're not because you're being methodical. Mm-hmm. Mm-hmm. So what do you think about mindset? You know, since we're talking about mindset, how can people shift the mindset from viewing taxes as like a bill or a burden to maybe looking at it as an opportunity for some strategic financial growth and planning that way? Yeah.

It is every single day client comes to me and says, I just. And hate paying the government. I hate this tax bill at the end of the year. And, you know, the number one thing that I hear that they are, there are CPAs tell them is they always say, just be thankful that you're in the position that you are. And I think that's good to some extent. And maybe there is a reasonable argument to say it's good to pay some taxes. Because you want your kids to go to a nice school. You want the roads to be paid. So there's probably argument to pay some, but I don't want to fund society. That's not generally what my goal is to do. I also think there's, I probably have a, the private sector probably has a better idea to do what, where the money should go than the government itself, as we've seen with recent circumstances coming out, what the money has been spent on. And so it's really, is it a burden?

Maybe no for the fact of paying some. Don't think of it that way. You are privileged to be making the money. So do count what you have and be thankful for that. But then let's go to the tax code and see what we can do to eliminate the rest. Yeah. That's a good mindset shift because I remember literally when I first got out of college, this stuck with me. I don't even know why it did, but it was this flawed thinking.

And this friend of mine worked for a car dealer, and he said that his boss was complaining, just complaining that he had to write this huge commission check to one of their top salespeople. And I was like, yeah, but that means that this top salesperson sold a whole boatload of cars. So the dealership owner made a whole lot of money, and you had to pay out whatever percent that was so good that it's. a big number. Don't complain it's a big number because that represents huge volume. So to your point, hey, you have to pay some taxes. That means you got a lot going on. Now let's see what holes we can plug up. Absolutely. And you're right. You know, shifting the mindset, it does get you creative because the government does incentivize you to put your money in certain places like opportunity

zones and things that if you invest into, you get tax breaks, which are great. But it doesn't mean that you need to just because you're thankful the position doesn't mean you should pay all of your taxes. You're supposed to use the tax code to the full extent. Just again, don't evade the taxes. Don't do anything against the law to just

not pay. But you can follow the code to a to a T and if you do it right you can literally wipe out anywhere from 25% of what you owe to 90% oftentimes more. And that's

That's without even just having to go buy a, you know, a car that weighs a certain limit to deduct that. And should you do that because it's a depreciating asset? Well, it's probably not the wise move anyways to do that. Just for the purpose of saving taxes. It's almost like you're spending a bunch to save the oil tax. Does that make sense? Maybe not. You know, it's like those credit card commercials with Steve Martin and Martin Short that they're fighting over who's going to pay the bill because they get points.

And it's like, hold up. You still got to pay a big chunk of money to get a couple cents back in point. So, you know, I know the credit card companies are just trying to get people to use their card. But let's also go, Joe and Betty, you know, normal person. You need to think about things too. So that's a really good point about don't just go buy an asset just because you can write it off. Did you really need it? Is it depreciating?

So just like what we've said in several of our conversations, there's never one strategy that works for every single person, every single time. Let's just explore some things. You know, and it's been said, reminds me, I was going to ask, you know, when should a high net worth individual start doing all of this stuff? And it reminds me of like, you know, hey, this person sitting on a hot day going, boy, sun's beaten down to me. I wish I had a tree for shade. Well, it would have been great to have had someone planned it 30 years ago. So the tree would have been there, but when's the next best time today? So talk a little bit about the role of timing in implementing some of these strategies for the high

net worth individuals or business owners. Oftentimes where we start, Mike, is looking at their prior year taxes because it's the damage control. We're trying to see what we can do on top of what they've already written off or had their CPA help them with. And there's a lot of things we can still do to get them some money back. But the biggest thing is you're right. Once January 1st happens, you need to have a game plan that you know going into this year exactly where you're moving money and where it's supposed to go. You should be creating that plan sometime in November and December. That way, you can start that year off great.

You know how stressful it is? I had a meeting today. Literally, right before I spoke with you, the guy says, I only have four. five days left before September 15th to file my business taxes. What can you do for me? I'm sitting over here and like, it's our, it's our busy season. There's only, I don't, I don't know. I mean, he's like, I need to get this done.

And the stress that it creates, it's just not fun to go through. Right. Don't make your problem, my problem when you put it off. But let's, let's see what we can do. And I'm sure you're kind to him, but that puts you in a really bad spot. Yeah. Love the guy is a great guy. It's just, he's so busy making the money, but then now it's, okay, I got to do this and it's urgent.

But we're going to help him. We're going to get through it. It doesn't mean, still come to us, still go to someone if you got one day left. There's things you can do. But there's better things you can do if you have more time to build a strategy. That's all we're saying. There's more you can do because you're just, you're now, you have time to set up the right instruments, the right strategies to make it work. Simple.

Yep. Love it. So you mentioned many times, you know, hey, I was working with this one client. Has there been one like a high net worth individual or business owner that you can think of where a case study example of where they've put some things in place and really transformed, you know, their situation? And also in an intangible way, that peace of mind and that kind of hope that you're providing them really is a big factor as well as the numbers, right? Yeah, there's so many. and it's hard to say just one. We worked with a guy, we're working with a guy this week.

We're opening up him a specialized trust. It's under contract law. It's a trust that's been around since 1974, and it's even been audited one time. And the people who audited, after they audit it, the IRS agents ended up buying it for themselves. It was so funny. But so what they did with this strategy is

A lot of people have heard about trusts They don't maybe don't know what you know what the type of trust are What their benefits Most people go to an estate planner and open up a trust And the trust is going to be for if you pass away The money is going to avoid probate court and go to your errors And it's going to do things like that But they're not usually asking their estate planner

How do I set up my time? trust to also help me with my taxes. So what this particular client that we're working with is we're able to save him 90% of his entire tax bill every single year. What we did was we just set him up a specialized trust and he operates his entire business through the trust. And inside this particular one, you don't have to pay any taxes on the money that goes in, that flows into it.

which is great. Now, the catch with this particular trust is when you pull the money out, there is taxes on when you pull the money out of the trust, but at least you can have put the money in and you only take out what you need for maybe your food, fun, fashion, your bills, so you can only take out a few thousand a month to pay your bills. But he didn't even need. to worry about paying taxes on the money

you pull out of the trust because there's another strategy we use on top of that. So we layered in different things. One that we did was people might know this, but in the tax code, there's no taxes on loans.

So inside of the trust, we just built a little bit of money into a life insurance policy and then the rest of it, we just build out some, the actuary and attorney built out a a loan or a promissory document that you could then take the money out of your account with no taxes. There's some really neat things you can do in both high and ultra wealthy clients.

That's, again, legal, ethical, moral, it's been around for decades. And that's really what the, you ever Google, you know, Jeff Bezos, Elon Musk, how much do they pay in federal taxes? A lot of times they'll find out, just as, $0. And then you should actually head, how is the richest person in the world pay less and tax than me? But they're doing things like this.

This is how it works. And it's not a rocket science. I think it's like 70% of Congress has some sort of trust that they own for these types of strategies. It's a common thing. Again, just find someone who's doing it. Ask what they do and copy and paste it. Or go seek out a financial professional who specializes in tax production.

They can help you out. That would be the clue to say, hey, Ethan, take a look at my situation. What are some options? And if someone is thinking that, what's the best way they can reach out and connect with you? Yeah, we love for anyone to connect with our team. Our website is www. TheExpidentialfreedom.com. Excellent.

Well, Ethan, thank you so much for coming back on. It's been a real pleasure chatting with you again. Thank you, Mike. It's always a pleasure. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www.com.