Did you see last week that our Administration is claiming to reduce taxes for all people who make less than $400k per year and then plan to make up the loss of tax revenue by taxing the wealthy and businesses?
This is a failing strategy for several reasons but let me share a couple.
- This leads to all products and services going up in price. Businesses don’t just take a hit and move on. They raise prices and reduce expenses and that means gas, bread, iPhone, cars, etc. go up, and thus it’s an unseen tax on the people this administration claims are getting a reduction.
- All people are overtaxed as it is. The government needs to learn how to manage the money they have, and they would have more than enough if they could do so. They don’t know how to do this, and more money won’t solve their problems. Raising taxes only leads us into deeper water as a country.
Now that we know the government can’t save us, its time to strategize how to save ourselves.
The fastest way to make more money is to keep more of what you have already earned by reducing your tax liability.
A.K.A the amount of taxes you pay to the state and federal government.
I don’t mean by evading taxes.
That is illegal.
I mean you should study the legal ways the government incentivizes us for making certain financial decisions that ultimately end up benefiting the economy and thus, the government.
Much of the tax code is written to give deductions and credits for specific behavior.
The IRS knows that this behavior will be good for the economy and end up creating more tax revenue.
For example, if you buy a piece of equipment for your business, they will give you a deduction because they know your business will provide products or services that they can tax.
They also know that it will create more jobs because the equipment you are buying was created by someone who paid taxes on the wages they made while creating it.
See how this works.
They want more worker bees making more honey.
BTW….” equipment” can mean a lot of things.
My airplane and my new corvette are a piece of equipment and tax-deductible for two different businesses of mine.
I bet you like the sound of that!
I know I do!
These also happen to be assets and not liabilities like most “toys” are.
More on that another time.
The decisions that you can make will position you to pay less in taxes and build or acquire assets that make you more money.
When we look at investing, we usually look at what the percentage return on the investment we are making is.
If you are in the stock market you are looking at around 8% average returns.
But you get killed on the gains when you take them, and you get little to no tax deductions.
It’s not horrible to have some investments in the market but it’s not the most advantageous, either.
I like investments that can reduce my tax payment for the year, so that I immediately make more money, by paying less in taxes.
This is guaranteed money.
Guaranteed money equals NO risk.
So, part of the investment is no risk for me and makes me money and that leaves me analyzing the other part.
How fast will I have my original investment back and what are the chances the investment will fail.
Look, any investment you make with your cash has some inherent risk.
The stock market, 401k, real estate, crypto, or businesses, they all do.
Some much more than others.
But any investment that has more risk also has immediate tax benefits, that
automatically hedges the risk of the investment and puts guaranteed cash in your pocket.
That is how to win in investing.
That is how to build wealth.
Owning or investing in businesses, real estate or both is a great way to do this.
Another great advantage to these investment vehicles is you can use very little of your money to
get involved if you develop the right skills and are willing to manage the deal.
Banks love to lend money for these and people love to invest with others who will manage them.
Learn about taxes and learn about investing and you will have the tools to become more financially free.
Don’t follow the masses in believing we should all pay our fair share in taxes.
That’s what they want you to believe so they can keep abusing your hard-earned cash.
Most all income earners above the poverty line are paying more than they should.
Our country was founded around the idea of ZERO taxation.
Reducing your tax liability is what you should do to provide the most value to our country.
Freedom, Patriotism and Capitalism are all the American way and the foundation of why our country is great!
People who are educated on taxes and investing use their money to create businesses, make investments or buy products and services that all create jobs and pump up the economy.
You must learn how to use your money to make your city and state a better place to live and not rely on the government, who is proven to be as good of managing cash as a teenage kid.
Don’t get me entirely wrong here.
I believe paying taxes is a good thing and will provide for a more civilized society.
My issue is that it’s completely abused by politicians and because they can’t manage the revenue, they have coming in they continue to have to take more, and it becomes criminal-like.
Everyone at a high level in business knows this system is upside down and backwards and so they learn to play by the rules but reduce their tax liability each year.
Find these people and learn from them!
It could increase the amount of money you make this year by up to 30-40%.
Talk Soon,
Bobby