Wealth Building- Tax Reduction Secrets of the Wealthy Exposed by djsgjg0045


									The word "Tax" seems inherently dull and bothersome. However, in my view tax is
the secret weapon of wealth creation. It should be a cornerstone in your financial
planning. One fell swoop of a pen on some documents backed up by some clever tax
planning can create instantaneous wealth. This is what the wealthy have known for
years. Usually, people think about tax as separate to their wealth building activities.
This is a huge mistake and will cost you thousands if not millions over time in
unnecessary tax liabilities.
  How the Wealthy Save Money on Taxes It's often reported in the media that the
wealthy pay little or no taxes. Now, this is not actually true but they do pay a lot less
tax as a percentage of their income than a single person earning $80,000 a year as an
employee does. Rather than complaining about the injustices of society or the tax
system, I say why not figure out how the wealthy pay less tax.
  Here's how they do it: They invest with pre-tax money and when they cash-in their
investments they look for ways to minimise their capital gains tax. Investing with
pre-tax money and then allowing your wealth to grow tax-deferred is the weapon of
choice for wealthy folk. In addition, they legitimately use a multitude of other ways to
dodge tax bullets! The following are just some examples:
  How to Save Money on Tax #1: Corporate Structures Wealthy businessmen
understand that their business-activity related taxes and their personal net worth are
intrinsically connected. They don't mess around with sole proprietorships but instead
set up incorporated structures to minimize their tax liabilities.
  How to Save Money on Tax #2: Pension Trust Funds This is one of the most
common methods used by the rich is to set-up a pension trust fund with which to draw
money out of their companies in a pre-tax manner and then avail of tax-deferred
wealth building by making investments from this fund.
  How to Save Money on Tax #3: Tax-advantaged Investments Wealthy people often
make specific investments because of the tax advantages they provide. Tax-free bonds,
variable annuities and some real-estate investments are examples of tax-advantaged
investments. Oil and Gas Drilling projects in the US come with great tax breaks.
Retirement plans like a 401(k) or an Individual Retirement Account (IRA) are useful
and used by the moderately wealthy.
  How to Save Money on Tax #4: Income Splitting This involves drawing income
from a multitude of corporations and trusts and sheltering as much of that income as
possible. Since corporate tax rates are a lot lower than income tax rates it makes sense
to divert additional incomes streams into different entities.
  How to Save Money on Tax #5: Offsetting Capital Losses Offsetting capital losses
from one investment against future capital gains in another is another common
"strategy" of the wealthy and rich. Popular with mutual funds, by exchanging a loss
making fund with hopefully profit-making fund (holding the same stocks), you can
realize a capital loss for tax reasons without necessarily incurring a long term
investment loss.
  You Gotta Pay Tax but There's No Need to Leave a Tip
  Someone once remarked, "Next to being shot at and missed, nothing is quite so
satisfying as an income tax refund." Even better than a refund is not paying more tax
than you should do in the first place. The way I see it, paying more tax than you need
to is pure folly and financial nonchalance. If your income is being taxed at the higher
tax band rates than you should seriously consider paying for some professional tax
advice. It may cost you thousands but could literally save you millions. The first
question I suggest you ask your tax advisor is "How can I legitimately pay almost
zero tax from now on?" This throws down the gauntlet to your tax advisor. It may not
be possible to pay zero tax but I bet you can reduce your taxes significantly. It will
require your new best friend i.e. your tax advisor, to find new and creative ways of
minimising your taxes whilst simultaneously growing your wealth.
  P.S. These tried and tested wealth building strategies can help you grow your wealth
and speed up the process of real wealth creation. Why not sign up NOW for more
insider secrets on Wealth Building at Millionaire Mindset Secrets for FREE. In
addition, you'll discover more about personal and business success secrets, wealth
building and how to get rich at MillionaireMindsetSecrets.com for FREE.

To top