📖 Tax-Free Wealth by Tom Wheelwright

Topic: Tax Strategy | Medium: Kindle | Rating: 5/5

Three keynotes

1. Tax law rewards entrepreneurs and investors

"Taxes will either make you rich or make you poor. The tax laws of all countries are written to encourage certain activities that benefit the economy and promote social policy." (Wheelwright 2018)

"So what does the government want? First, they want to create more jobs. Who creates jobs? Entrepreneurs. Therefore, entrepreneurs get all sorts of tax breaks that act as subsidies to encourage job creation. What else does the government want? Affordable housing. Real estate investors get all sorts of tax breaks that act as subsidies to encourage building of affordable housing." (Wheelwright 2018)

2. Implement tax strategies

"Instead of raising your tax rates, you permanently lower your tax rates; instead of losing control over your wealth, you increase your control over your wealth; rather than increasing your risk in the market, you reduce your risk; and by maintaining control over your wealth, you are able to increase your returns." (Wheelwright 2018)

Consider:

• Having a company allows you to deduct eligible expenses including travel, motor vehicle, meals, education, medical, etc.
• Consider using a combination of different entities. e.g. companies, trusts etc.
• Utilise different tax brackets (giving away portions to your family).
• Control salary/dividends and hence employment taxes.
• Estate planning.
• Property tax - challenge assessments.
• Operating in different states (different payroll tax-free thresholds).
• Remember to deduct start-up costs.
• Trade stocks under your super account (favourable capital gains treatment).
• Real estate - great tax shelter where you could never pay tax on cash flow and can get tax-free cash from your real estate by borrowing against it.
• Invest in industries with government concessions e.g. oil & gas.
• Seek the advice of a qualified lawyer and tax advisor.
• Maintain good recording keep, remain compliant and be audit-ready.

3. Create financial velocity

"The key to financial velocity is to keep your money moving." (Wheelwright 2018)

"Leverage is really just compound interest using someone else’s money. Velocity is a way to increase your leverage." (Wheelwright 2018)

Borrow. Invest pre-tax. Create wealth. Leverage tax-free. Repeat.