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What do I love about: The Tax-Free Wealth?
I love the simplicity and generalization of the book. Despite the fact that the book was written by an American author, the author provides tax scenarios applicable to every major developed economy. You will realize that most economies leverage the same tax laws with nuisances which include but not limited to the naming convention. The author makes a case for why the reader should be aware of the tax law and he provides insights into how different types of business, business expenses, real estate, stocks, tax audit etc. can impact your overall wealth
I particularly like the fact that this book was endorsed by Robert Kiyosaki and it references his work on cashflow quadrant.
What do I not love about: The Tax-Free Wealth?
Zilch
Who should read: The Tax-Free Wealth?
If you live in a developed country where taxes are the bane of your existence and you are passionate about growing wealth while reducing your taxes and keeping more for you and your loved ones then this book is for you.
Who should not read: The Tax-Free Wealth?
If you do not live in a developed country where taxes are the bane of your existence.
Notes on The Tax-Free Wealth
- There are two constants in life, death and taxes
- I am convinced that the French invented the seven-course meal so that they would have plenty of time to argue without their food getting cold
- Taxes are your largest single expense – Robert Kiyosaki
- Taxes don’t just take your money- they steal your time-because money is time
- Remember it is not what you make that matters, it is what you keep. When you keep taxes in mind as you invest, you end up keeping more money and make better investment decisions
- The hardest thing to understand in the world is income taxes- Albert Einstein
- Worldwide the average person pays 30 to 50 percent or more of their hard earned income in taxes, either through income, sales, value-added, payroll, estate, or property taxes
- Invest where you travel. Do you have a favorite destination? Consider investing in the area. It gives you a great reason to keep returning and you turn the travel expenses you already have into deductible expenses, keeping more money in your pocket
- Any travel can be deductible by making it a business or investment expense
- 0.5 percent of the tax code is devoted to raising taxes, and the remaining 99.5 percent exists solely for the purpose of saving your money
- You and only you have the power and the control over your money and your taxes. Nobody else. This includes your tax preparer and your tax advisor. They cannot reduce your taxes. They can only help equip you to do so
- To deduct your meal, the expense must have a business purpose, must be ordinary, and must be necessary
- Business expense are the best kind of deductions. Real estates are the next best
- The good news is that you don’t have to quit your job. You just have to start acting like an entrepreneur or an investor
- Passive income is income that comes from dividends, rents, and business. It is taxed at a much lower rate than earned income
- Depreciation is free money from the government. In some countries it is called Capital Cost Allowance (CCA)
- Losses from passive investments in business and real estate can only offset income from those same or similar investments.
- Pay attention when you get your property tax bill, even if your mortgage company or bank pays your property tax. Only you can protest the value they put on your property
- 3 steps to successful estate planning: Placing assets in trusts, creating a will, avoid the estate tax
- You got to be careful if you don’t know where you are going, because you might not get there- Yogi Berra
- The reality is that if you are going to have as much money when you retire as you do now, then you probably will be in a higher tax bracket than you are today
- LLC are the absolute best way to protect your business and investments assets from lawsuits
- You should be willing to sell your company in exchange for stock in the public company. After all capital gains tax rate are much lower
- Real estate is such a good TAX shelter that a serious real estate investor should never have to pay tax on their cashflow or on the gain from the sale of their real estate
- When you refinance, you get your cash in the form of a tax free loan and get to keep your asset
- Capital losses in most countries can offset capital gains. If you do not have enough capital gains to offset, then the capital losses carry forward to future years
- If you invest right, you can deduct losses from oil and gas against ordinary income, even though your investment is entirely passive
- Day in and day out, your tax accountant can make or lose you more money than any single person in your life, with the exception of your kids
- No one would remember the good Samaritan if he had only good intentions- he had money too- former British prime minister Margaret Thatcher
- The key to financial velocity is to keep your money moving
- Leverage is really just compound interest using someone else’s money
- Velocity is a way to increase your leverage
- The more you leverage and the faster you employ your money, the faster you will build your wealth
The 21 rules of tax free wealth
Rule 1: It is your money, not the governments
Rule 2: The tax law is written primarily to reduce your taxes
Rule 3: The fastest way to put money in your pocket is to reduce your taxes
Rule 4: Everything you do either increases or lowers your taxes
Rule 5: The tax laws is a series of incentives for entrepreneurs and investors
Rule 6: You can deduct almost everything given the right circumstance
Rule 7: It is not how much you own that matters, it is how much you control
Rule 8: Treat your business just as you would if it were a big public company
Rule 9: All tax planning must have a business purpose other than reducing taxes
Rule 10: When you want to reduce a tax, reduce the base on which it is measured
Rule 11: Every location has different tax rules and paying tax in several locations can result in paying less total taxes than you would if you did business in only one location
Rule 12: To receive the foreign tax credit, the same taxpayer (entity) who pays the tax in a foreign country has to report the income in the home country
Rule 13: Taxpayers with long term flexible tax strategies will always pay less tax than those without strategies
Rule 14: You must maintain control of your assets at all times and in all circumstances
Rule 15: Never ever put a tax shelter investment inside another tax shelter
Rule 16: The single best tax shelter in most countries is investing in real estate
Rule 17: Mutual funds are one of the few places where you can lose money and still owe tax on your investment
Rule 18 The better the tax benefits, the more complicated the rules
Rule 19: You can eliminate your fear of a tax audit simply by being prepared
Rule 20: Never try to handle a tax audit yourself. Always enlist the assistance of your tax advisor
Rule 21: The more passionate you and your tax advisor are about reducing your taxes, the lower your taxes will be
Rule 22: It’s not how much your tax preparer charges you that matters; it is how much your tax preparer costs you