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I saw Kerry’s sequence immediately. We needed to fix her entities structure and then make sure that her Cash
Machine was making enough money to feed her Wealth Cycle.

Gap Analysis Financial Baseline Freedom Day

Entities Forecasting Cash Machine Wealth Account Assets Debt Management
Leadership + Conditioning + Teamwork

Kerry Kingsley’s Wealth Plan

With the essential information laid out in front of us, we were ready to engage Kerry’s Wealth Cycle Process. The
Gap Analysis made clear that Kerry was very good at making money, but she just wasn’t great at keeping it. What
jumped out at me from Kerry’s Financial Baseline was the amount of income she had in relation to her assets. She
needed a better way to make money and structure her assets.
In terms of identifying a Freedom Day , Kerry’s goal was to triple her income, which meant $45,000 each month
in cash flow. By restructuring her entities and shoring up her Cash Machine, Kerry could keep more of her revenue,
build her business, and ensure her mother’s care.
Kerry’s Entities needed immediate attention. Although Kerry was smart enough to put her real estate holdings in
a corporate structure, she’d chosen the wrong entities. While one S corporation is a good idea for Kerry’s business,
she needed an LLC for her real estate to protect her against liability. Additionally, because Kerry made so much
money from her Cash Machine, she was getting clobbered every year on the taxes that passed through the S
corporations at the end of each year. A good accountant would have explained the importance of creating a C
corporation for one of her companies, for example, the search firm, and maintaining an S corporation for the other,
the staffing firm.
In a C corporation (a corporation that has elected to be taxed under Subchapter C of the Internal Revenue Code),
the company’s income and expenses stick with the company. Kerry would earn money either from a salary paid by
the company or from a dividend or distribution that the company paid to her. Thus Kerry’s search firm, which has
assets and employees, could engage in certain tax strategies not available to an S corporation. The C corporation
could also market, manage, and provide the services, operations, and distribution of products of her S corporation.
The fees the C corporation would charge would then come out of the S corporation’s pretax dollars. The C