EP30 - Spiderwick - Skeptics Scowl - myths and misconceptions of ESOPs

Hey everyone, this is the ESOP Guide. This is Journey to an ESOP and so excited to have you on the podcast or listening to the podcast today. Um, I'm so excited because this has been a phenomenal year. We are in our season two of this podcast and um continually get to meet new people, like almost every week, I think I'm, I'm meeting new people that are thinking about an employee stock ownership plan as a possibility. And whether it's this resource or Uh, NCEO or ESOP Association or or anybody that's, that's willing to talk about ESOPs. I'm, I'm just thankful. And so I think people are getting the, the word is getting out and people are definitely seeing this as, as a possibility. So it's been, it's been a great privilege of mine to be part of the podcast and be able to do this. So for those that are new to the, to this podcast, what it really is, is just, it's just a resource, um, we go by topics, we kind of take one topic at a time. And I call it journey to an ESOP because it's really about, mostly about the um process of, of not being an ESOP yet, but thinking about becoming an ESOP company. All the things you might want to know before you get there. And so we do it by topic. So all of those are, are broken down to each individual podcast made available to you through our website at journey to ESOP.com. So that's my intro, sticking to it. Thank you again, thank you again for joining today. Let's start with this. I'm so busy. Wait, wait, don't go out there. They'll see you unless wait, are you with them or with me? Whose side are you on? Stay your side. Use your side. Then we must shake on our alliance. What? It's good. R, I am hogsqueal, and I am here on a mission to destroy the ogre mugger rat who killed my family. Can you help me save my brother? Please Yeah, sure, I was gonna suggest that right after you let me out of this cage, so. So, um, hops School, we're gonna get back to this in a second because it's kind of interesting. Um, what's interesting about this is, this is from a movie called Spider We Chronicles. Um, I don't do a lot of family movies on the podcast, but this is definitely one I've really enjoyed. Um, the title of this podcast today is gonna be called Spiderwick The Skeptics Scowl. So I hope you like that and I hope you appreciate the alliteration there. So what this is all about today and as you evaluate whether or not you want to continue to listen to this episode is those folks that are skeptical about an ESOP. So if this is, this is you, and, and what I mean when I say skeptical, please don't take that as negative. I think skepticism is a good thing. Um, I think you need to be a little skeptical about everything in, in the sense of, um. You know, in your business, if you're making business decisions, you need to really do your homework. So skepticism can lead to really understanding what ESOPs are all about. Um, I'm choosing Spider because there's a, there's a sense in the Spider web chronicles about people can either see this or they can't see it, and you know, we'll, we'll talk a little bit about that as we go through the episode. Um, but I, I think one of the biggest things I want to accomplish in this episode is to is to think about the myths and the misconceptions behind ESOPs. So what we're gonna do is we're gonna cover the most common ones that you run into. Um, I'm really hoping I hit the one you're thinking about if you're listening. Um, they, they exist, they exist in our professional communities, they exist in the business communities, um, they exist with it with your advisors, with people that have heard something or, or maybe they, they thought they knew something about about ESOPs and the reason I'm doing this episode is Because I think part of um the idea behind this is, is these are maybe obstacles for some people to say no, ESO's not right for me. I'm gonna go this direction and I'm I'm hoping to really nail down maybe some of those um that that might be obstacles for you if you're thinking about that and they truly are. We're talking about like a misconception if you really knew that that wasn't true. Then now that that's a game changer for you and like, all right, I'm, I'm back in. I'm gonna keep um going forward on my journey to an ESOP. So that's what this is all about today. Um, if you think it is, um, appropriate, you may even share it with your shareholders or partners, be like, hey, you know, my partner doesn't really get this. Maybe they should listen to this episode. Um, now for some of you people, and I'm just gonna say this too, you may not even want to listen to this because you love ESOPs and you're like I already get it. I already know the myth. I already know where these guys going with this, but um I'm already in all in, so I'm, I'm more listening to the podcast to find out things I don't know. Um, so, you know, either way, um, I think it's a help, it'll be a help for podcast, you know, as we go through the process. As always, if you like what you hear, please subscribe to the podcast and it may be helpful for somebody you know, so share it with one of your friends, um, share it with somebody that you don't like too if you think it'd be helpful for them. I don't know, but That's just me. All right, so now, what are we doing? Now, the movie, as we go into the podcast episode. It's really an excellent family movie, as I said before. It's about um some, some kids. So there's two twins and a sister, and they discover a world that others cannot see. Now, in the movie, And we're going to come back to it in a second because I, I don't ever do this, but this is such a good part. In the movie, one of the brothers discovers this world by finding this little circle rock, and the circle rock, when he looks through it, he can see things. So in the part that I was playing, he sees this creature called a hopsneel. Now listen to this next part as we go through it. I to keep your mouth shut. OK, here's our plan. I will find a safe position over there and create a distraction with my stick. Then you leap out with your knife and finish the beast yourself. I like that plan. That's a good. What? What beast? The ogre, of course, Mulgar. I just want to save my brother again with the brother. OK, fine. If we kill them, saving him will be much easier. Trust me. Now drop that stone. You'll need both hands to choke a goblin. How do I see? All right, so it's so cool. He just spits right in the kid's eye and um of course that's not hygienic, and we shouldn't do that, but this hopsneel guy has like this magic spit and it makes the kid be able to see the world all the time, so he doesn't need the circle rock anymore. And if you think about this. This, this is so like I'm, I'm excited, maybe I'm too excited about this. If you think about this, that's the podcast. My podcast is like the circle Rock, and if you listen to this long enough, it's kind of like spit in your face and then you suddenly can see ESOs and say, oh, I get it now, I get it. And um, similarly, the boy can now see into this world and go in and help save his brother. So, That's really, um, hopefully I'm not, I'm just like excited about that idea, but anyway, so when we think about the ESOP world, many people are skeptical and they can't really see because they're being blocked by the myths that they believe. And so all we want to do is we want to kind of make sure that if they are thinking the wrong way, um, that we would help them to think the right way. So my own ESOP experience as I, as I think about it. Um, I've been, I've been in so many different meetings over the, you know, so many different years with people and having all these discussions with all sorts of, of, you know, comments and questions and things. So over a period of time you start kind of like thinking about those meetings and the trends of of of questions or people asking you certain things. And You know, there, there, as we, as we think about that, that just kind of makes me start thinking about um this idea that especially if you're going into this, into the ESOP possibility. Um, and I, and as a business person, I, I wonder if this happens to you, but sometimes when we, we're, we're all done with the day, we kind of go to bed and we're like sitting there or we're laying there thinking, um, our minds just starts running around thinking about things, issues that we have and we have all kinds of issues and then you start thinking. Negatively like oh man, what happens if, if we don't get this figured out? What happens if we don't get that figured out? And then suddenly we're not sleeping, which is not good. And so what I don't want to happen is, is you to have that issue when it comes to your ESOP. And so sometimes when we do this, we can talk through issues like that. Um, maybe it'll it'll start to help people sleep better at night. And inevitably, in, in ESOP cases, um, I get into this room with people and it might be a virtual room or it might be an actual room depending on, on where everybody and how we're meeting, but, um, I'm, I'm gonna usually be met with um the people that maybe are thinking they don't want. to do this and they have all these questions and um and then I'm faced with what I would call um people that, you know, really do want to do the right thing, but, but it's kind of like what I call the skeptic scow. So this is where the title comes from. And it could be from, you know, the company has advisors maybe on the CPA side or the attorneys or bankers. And those guys just don't really understand the, the process of doing an ESOP. And so in that room, I'm kind of going through each one of these questions in different ways. So that's kind of where we are with, with, you know, answering some of these. So the skeptics scow starts with this, um, employees get to know everything about the business. OK, so that's something that people might believe in an ESOP because we say an employee owned company. Well, it's an employee owned company. But the reality of this is that the employees of an ESOP are what we call beneficial owners. They don't have the right to see the financial statements. They don't have the right to see confidential information. So things that, that, um, we may, prior to being an ESOP company would be really guarded against if you think now suddenly becomes you become an ESOP company, now you're gonna like, hey, I got to share all the information with my employees. That's simply not true. Because the stock of the company that's being owned in the employee's accounts is being, is being purchased by the trust, the employee stock ownership Trust, and held for them, and then it's, and then it's put in their accounts over a period of time and those accounts. And that trust are really working as a retirement benefit for those employees and they have this, this long term prospect of the company gaining more value and those and that stock being worth more. So being beneficial owners just really means being uh having a retirement account of those privately held shares. Now, let me say this about this one question in this, the idea of employees knowing everything about the business. There are phenomenal business models that have management principles that were called, we called open book management, and they love sharing all the information with their employees, and that's a cultural choice. There are also phenomenal business models that don't do that. And that's a phenomenal choice. And it really just comes down, comes down to culture. ESOPs do not. Um, automatically trigger you to have to, you know, open up your books to everybody. And so just kind of making that point, I don't wanna also, I didn't want to say anything negative about the open book management people because they have, it works for them and, and there's just different ways to do that, so. Sick in in my skeptics meeting and OK now executive decisions are diluted by being employee owned. OK, so imagine this, imagine you have to make a quick decision, um, you're running the business and you have to, you have to hire a strategic person that maybe um is gonna help, you know, round out your business development team or a key vice president and now suddenly, um, you've got to go run this down to all your employees and say, can you prove this before we mis miss this opportunity or You can buy a bunch of inventory at a discount or you can buy, you know, a specific piece of machinery, you know, all the strategic decisions that you have to make in running a business and, and suddenly, you know, you've lost the opportunity because the employees had to vote for it. OK, so simply not true, right? This is not gonna happen because the employees aren't gonna vote on anything. The company is gonna be, um, they're not gonna vote on, on something like that, right? They're only gonna vote in the event that the company has to. Um, goes through a sale and even that goes through a trustee. So the only possibility here is that it's not gonna happen. You're gonna be able to make those decisions that, that actually the momentum of the business can actually improve in terms of efficiency because it's gonna be um more streamlined in some sense in terms of, of how decisions are made and, and who's doing what right right people, right seats kind of thing. At least that's the way I, I see, um, ESOPs being, you know, set up in the right, in the right fashion. So, um, if you're afraid of the an ESOP because you think you will lose executive power where decisions are gummed up, um, this is simply not the case. There's not a bureaucracy that's created like in the government, um, there's not a, like, you know, this, this committee that can just outvote everybody from a, you know, like a union-based thing where it's gonna, you know, freeze up production. Um, as I said, employees are of an ESOP are beneficial owners, and they, they will continue to do the jobs they were hired to do before. They can be fired if they don't do their job. Um, again, they're just really owning parts of this company, um, uh, you know, shares of this company in a retirement account. And the reality is, is that the existing management team is gonna continue to make day to day operational decisions and all that's gonna be about the same as it was before. Um, this is similar, but it's different. I will lose control of my company. So remember that ownership, um, does not equal control, um, while in a non-public ESOP voting, um, company's voting rights on shares allocated to ESOP accounts must be passed through to ESOP participants. So again, voting, um, when it comes to uh major matters like selling the company, um, but losing control also is, is connotated to the idea of Of what is gonna happen with me now having to have a trustee coming into my business. Um, so the trustee manages the, the trust, right? They manage the employee stock ownership trust and most of the time when you do an ESOP transaction, you're gonna hire an independent trustee because of fiduciary responsibility. So in some cases, you know, or in discussions with clients over all these years or prospective ESOP companies. The the the question here is like, hey, I'm gonna do this now. I was used to doing my thing. Now I don't have to deal, I don't wanna have to deal with the trustee. Um, so this is one of the myths of that in the sense that it's not, it's not that you're not gonna have to deal with the trustee, you are gonna have to deal with the trustee, but it's the idea that how much is that gonna affect the, the loss of control of your business and really um what they want to happen. is they want the company to run successfully like it has before in the past, so they're gonna get out of your way. Um, they're gonna do their job. Now, what is their job? Their job is to monitor the board at a, at a higher level. They should go to at least one board meeting a year just to see what's happening. Um, but relative to what's going on in the ESOP, so they want the company to run like it was before. So there isn't gonna be this, this loss of control and a trustee saying, hey, you can't, you shouldn't do that from a business perspective. Um, Now, practically, you know, one of the things I, and this might be helpful too is is episode in season one, episode 44, um, I did an interview with a trustee and that's really all we talked about is, is what's the, what's gonna happen from a control standpoint. So if you're interested in this topic further, go to that episode and and it really goes into the details, but just know. That this is definitely a misconception and, and really the reality and the practicality is, um, in my experience, the trustees don't pretty much call as much as they should call um their ESOP companies because they're super busy and they, they should be more involved, but they're really not more involved, you know, that's, that's just my opinion, so. Don't worry about that one. So, now, next question, I will lose my bonding and banking relationship or my bonding and banking relationship will be impaired and it will hurt my business. OK, the, the origin of this idea is that Bonding companies hate ESOPs or my bank hates my, you know, hates the idea of an ESOP. Now, I can't tell you whether or not they do or don't, um, but the reality is, is that putting an ESOP deal together incorporates the bonding and the banking relationships as part of the planning first off. Um, one of the ways we do this is we, we really evaluate. The working capital requirement of the company which both bank and bonding company care about, and we wanna make sure we keep um the balance sheet intact so that we have the, the wherewithal to do the things we need to do in business, which is what banks and bonding companies care about. Um, one of the, one of the issues in this is whether or not the you know the individual owner who's owning and selling their, their shares to the ESOP is going to have to continue. To support the banking and bonding relationship when it comes to their personal guarantee or personal indemnity. And so ideally, we wanna, we want that if it's an exit, we wanna, we wanna move that along and move the risk of the company back to the company and separate those personal guarantees and personal indemnities. Now, we might just have to extend that if we have if we have that as an issue, um. So for the most part, if you're doing good planning, you're not gonna hurt the banking bonding relationship. In fact, you're gonna make it better. And the way you're gonna make it better, and that sounds like me just being arrogant, um, in the sense, hey, we're gonna, we're gonna throw a bunch of debt on the balance sheet and we're gonna make it, we're gonna make it better. Um. The reality is that the seller note on the bond in an ESOP deal is going to be subordinate to the bank and the bonding company. #1, that's why I'm not that worried about doing the acquisition debt. Number 2, we're going to have, if we're assuming like the tax benefits of an ESOP, um, an S corporation, we're going to have the IRS tax payments that we're going out to pay the tax payments to coming back in the cash flow model to pay the acquisition debt. So from a cash flow standpoint, um, it's possible that we, we're not gonna really affect cash flow that negatively. Um, then on the planning side, it may be that we decide to do partial ESOPs, you know, and then work our way into, um, 100% ESOP. Now that again supports good planning in collaboration with the bank and the bonding company. Now, if it's a bank finance transaction, the reality is to possibly you're gonna change your banking relationship and the whole banking relationship is gonna now be geared around an ESOP company. And so now we have an ESOP bank coming in and that could actually improve the banking relationship. So, I think you would hurt your bonding and banking relationship on this. This could be true if you didn't do very good planning. And so that might be because you didn't, um, plan and have the right advisors, which, which is more other, which is other podcasts you can listen to. So, um, so I'm pretty, I'm pretty confident on this as we talk about it, um, that, that this is a no big deal deal and we just have to do good planning and make sure we're, we're, we're, we're bringing the bank and the bonding company in early in the process. An ESOP must buy, moving on to the next one, an ESOP must buy at least 30% of a company, and this is only this, this really what this comes from is, now, let me just say first off, there are a lot of ESOP deals that are way less than 30%, so this is not true. Um, but what this comes from is being a Um, having to use the 1042. And so as a 1042, you are gonna have, uh, to be a C corporation and you're gonna have to do at least 30% in order to get the um capital gains tax exemption or the tax um deferral on a 1042. Um, so if you don't use that, then you can do a smaller ESOP if you want. Now there are many reasons to do a smaller ESOP than 30%. Some of it is, um, planning exactly how the structure of the of what the ownership is gonna look like in the future. Some of it may be, as we talked about before, the bond bonding and banking company maybe we want to do something less than that as we step our way in. We may want to, we may have wanted to do a non-leverage ESOP and just you know do a a contribution of something, you know, way smaller than 30%. But clearly you can do um any percentage of the company you want. There are some cost benefit ratios and you start thinking about how much money do I spend on the transaction, um, but I'll tell you, on the cost side, I'm definitely going to be doing an episode this season about cost of ESOPs because there is so much confusion, um, about the cost of an ESOP that it's gonna be, it's definitely one of the myths as well, the miss and myths and misconceptions and And I would, and I would, I'm gonna frame it out here, but I, I think it's gonna warrant, um, sorry to use that word warrant, um, it's going to necessitate me doing a whole episode on cost of the transaction because I think there's so much confusing, confusion in the marketplace with when it comes to that. So, um, so might as well hit that one now just for purposes of, of running through this episode. This, this ESOP is going to cost me too much money, so I can't do it. Now, um, there are ESOPs that I've heard of that are extremely expensive, and I'm absolutely shocked when I actually look at the details and say, wow, the amount of money that was spent on that ESOP was way more than it should have been. And the reason is is because When we get into this concept, it's like um the people that, the way that they structured it and the and the people they hired to put the ESOP together, um, were charging way too much for it. Um, now, take that aside and as we start thinking about um what we're, what we're really talking about is, is the cost of the transaction. Now, if you're gonna have from a cost standpoint, a cost of a, of a normal transaction which is selling your company, um, you're always gonna have the cost of an attorney. You know, we can't get away from the attorneys. I'm just kidding. I, I love the attorneys, but you're always gonna have the cost of attorneys because attorneys um are gonna have to do documents, right? You can't have a transaction without documents. And if you do have a transaction without documents, Then you, you probably, um, are not doing a good transaction. So you have to have documents and so you're gonna have purchase and sale agreements, um, you might have employment agreements and all that has to be generated. Um, if you have a transaction where you're selling your company and you're using somebody to to help provide advice whether that to be a broker, um, you're gonna have costs related to that. Um, so, so really the cost of, of an ESOP transaction is probably not much different, so. You know, being it, you know, if you say that it's too expensive, one of the things about ESOP transactions. That's different than other trans like normal transactions is you can actually um absorb some of the costs with tax planning and so an example of that would be I can actually plan in my tax in my transaction year some type of prepayment of the ESOP, some type of um accrual or contribution. to the ESOP in that plan year. That's gonna go in that plan year against my ordinary income tax, um, and so that will reduce your ordinary income tax and free up some money to actually pay for the transaction and you don't have that with other things. So, so that's one of the misconceptions. Um, here's one, ESOPs can't pay the same price as other buyers. Now, inherent in this is that I'm not gonna get it, I'm not gonna get paid um for my company fairly. Now, let's just say As we go through this, the, the statement across the board, and I, and I know we all in the ESOP community have, you know, different things that we talk about valuation, but, but everybody's gonna agree on we, the ESOP pays fair market value for your business, period. OK. How you get the fair market value is, is a question, you know, but it's not, it shouldn't be a big. Variance question which is, hey, they came up with this and this guy came up with that and we have some big, big deltas. Um, the methodology is pretty clear. Um, I've done some valuation episodes. I think those are important to listen to, um, but spend time asking questions about the methodology, but when you get down to it, everybody in the ESAP community absolutely should agree. We, we may not agree on cost, but we should all agree on that ESOP pays fair market value for those shares. Now. Comparatively, if you're gonna sell your business to a strategic buyer, um, and somebody that is maybe private equity fund or somebody that has, you know, a, a reason, a strategic reason to buy your business. An ESOP is a um a trust of an ESOP. A trustee of an ESOP is a financial buyer. Fair market value is is a financial evaluation. A strategic evaluation incorporates, um, things that are behind the curtain. Um, strategically I need that geographic region to to, to round out this as a private equity group, so I'm gonna pay a premium in order to roll this all up. So there's, there's a lot of reasons that, um, those can differ, but the, the key element here is that you are not selling for less. Then fair market value and if you are. On an ESOP then you probably again when you go back to talk about the evaluation side again. Oh, here's one, ESOPs are difficult for employees to understand and appreciate. I'm sorry. I, I didn't want to, um, anyway, so the point of that is that ESOPs, um, Yes, it is, it is gonna take time for your employees to understand them, but they're not difficult to understand and there's a lot of resources that help, you know, help us educate the employees and um The employees will appreciate it, but I will, I will give you a realistic scenario of this. It's gonna take a couple of years. It's gonna take the the employees understanding the, the way that this works as a retirement account, um, so you're gonna have some meetings and you're gonna need to hire people, um, or have an ESOP committee or you're gonna need to have a communication team that kind of moves that message along continually so it's, it's happening and some, some companies have really benefited from having a third party help them with this. Um, but once the employees start seeing this from like in, in 1 year, 2 year, 3 year, and they see I have this many shares, this is the value of those shares, this is as simple as it gets, right? The next year, these are many shares, this is the value of those shares, and the next year this many shares is the value of the shares. Realistically, what, what you hope to happen is, is that, that account is growing in value. They will understand that when they get those statements. So, um, that is. Absolutely not true. ESOPs are, um, it, it takes time to do it, but it's not difficult for people to understand. They can understand their 401k account. They can understand an ESOP. Um, so again, having the right people behind you is important for that. My company is not the right entity type to be an ESOP. OK, so this is a real simple, um, you as an ESOP, whether you are, you could be an LLC right now, you could be, um, some other type of entity, most of the time what's happening is in the process of doing an ESOP we're doing some type of entity entity transition. That I would say 99% of the time it's tax-free. There's no tax issues with it. It's just we gotta, we gotta transact that ease up in an S corp or a C corp. And many times we're, we're gonna put companies together we have like this merger and so we'll, we'll, we'll put, you know, um, multiple entities together and we'll issue shares there's some, there's some capital capitalization of um cap tables that have to be done where you have this many shares and all that, but most of the time that's pretty normal, um, so you don't have to worry about that. Your company can be transacted as an SRC. It's just, it's just maybe steps to get there. Um, Basically, I talked about the, the cost, which I'm gonna come back to. Um, I wanted to say that um. One of the, one of the issues that you come up with or people say is that um my employees don't have the money to buy the company's stock, so that might be something that um people really when they really say that they, they don't understand the way fundamentally the way ESOPs work. So one of the first things I say when I do a kickoff meeting to a company and I, and I'm talking about. To their employees. This is the first time the employees have heard about it. Um, usually what happens is the company announces the ESOP and says, Hey guys, guess what? We sold your company. We sold the company, and guess what? We sold it to who we sold it to, and they basically say, uh, we sold it to you, ha ha, and then I stand up and this, this guy's gonna stand up, the ESOP guy is gonna stand up and explain what we just did. So that's my job. So I stand up. And I say, hey guys, guess what? Good news is that you bought the company. The the better news is that you didn't pay any money for it. And so fundamental to an ESOP is that your employees um are not paying anything out of their own pockets for the ESOP, and they're gonna get the benefit of this over a period of time. So, um, That's the bottom line there. So you're, you don't have to like tell your employees or sell it, you're not selling it to your employees directly, you're selling it to a trust and the trust is using the company's cash flow to secure bank financing or seller financing to pay for pay for the, for the acquisition debt. And then we're ultimately using the tax benefits to pay for it as we go on the, the delta of the of the cash flow from prior years to the future years. Um, here's one, my employees don't have, won't have the security of diversification in their retirement accounts and so I don't want to do an ESOP because I'll, they'll be at risk. Now, one of the things about this is important and it really is gonna be about where these companies are in development. Now, most of the time. The companies that we deal with have an existing 401k account. And most of the time that 401k account has already been diversified across all types of investments, mutual funds and whatever, um, assuming they have a good 401k and they have good planners there, then they already have a retirement account that has diversification in it. Now ESOPs primarily, you know, we're targeting this to be, um, the privately held company stock. So that's part of it. Now, ESOPs are not required to invest exclusively in company stock. They could have other investments like cash and other securities. So it's not true that it won't be able to be diversified. It could be, um, but I think initially one of the things we do think about is matching up the employees for existing 401k, now we have this ESOP. Now, One of the things about um of of the focused. You know, company and growing in value is the actual benefit of that to them is they've still built some retirement in their 401k, which they can still continue to contribute to. But over here they have a possibility of a of an appreciable asset from a, from a small closely held company stock that grows in value over 10 or 20 years. That part of their retirement account. Um, statistically is gonna, is going to outperform the 401k. So even though they're, you know, you might have a concentration in your retirement over a longer period of time, you're still gonna have diversification of the 401k and you're gonna have the benefit, as an employee to grow your wealth much more than you could with just a 401k. I think the statistic is, is that, um, Employees on an ESOP have within their retirement account double the amount that employees have in a non-ESOP account. And so, I think there's, there is a sense for um a lack of diversification, but there's definitely an opportunity there as well. Now, one of the things I'll say about this is that there is a specific ESOP laws under ERISA that as, as folks approach retirement age, they're allowed to diversify up to 50% of their ESOP stock accounts. So, and I think. The age is 55 right off the top of my head. So as you get closer to 55 or once you hit 55, you have the right then to start um diversifying what you have in that account. And so then you're, you're not really tied, you're you're not obligated to stay in it. Now if your company is doing really well, some people in their 55s, you know, are gonna be like, I'm not, I'm just gonna hold on to it. So a lot of that being said. So anyway, those are, those are the most common ones that I've run into, um, in terms of, of planning, you know, ESOPs and just thinking about what, what sort of myths and skepticism exist and misconceptions. So with all of that, I think it helps hopefully to um shed some light on the truth of it and understand that there probably are are others that I haven't addressed. Um, we certainly all have more time down the road with more podcasts. So as we, as we think of more, we'll do more and, and really the goal of this today was to open your eyes, hopefully to what the truth is, um, but I think let's not stop there. If you do have ones. You're like, yeah, you didn't address that. Let's ask those questions. You can always do that on my website at journey to an ESOP.com and there's a little section that says, hey, how can we help? Um, you know, ask me directly and we can always maybe even turn that into um an episode if it's not, if it's not been addressed here. So with all that, have a great day and again, thank you for listening to this, this episode of the ESOP Guide journey to an ESOP. Uh, we'll see you on our next step.