Measure Your Wealth
Most of us try to ignore where our wealth is today, either because we’re nervous to really know what the situation is, or we don’t have the time to keep track and it gets pushed to the wayside for as long as possible.
Here’s a quick and simple way to get back on track, so you can start moving toward your goal of financial freedom.
- Add up your total income, either annual or monthly (or both)
- Add up your total expenses, annual and monthly
- Add up all of your assets from your house to your retirement accounts
- Add up all of your debts
To really get down to the granular level, measure these things on a monthly, or even weekly basis until you have a firm idea of where your money goes. This can be a great way to not only see exactly where your most unnecessary money drains are, and decrease your expenses but also start paying down some of those lingering, high-interest debts.
Use Your Taxes to Your Advantage
The tax code, believe it or not, is 99% about lowering your taxes. The purpose is to stimulate the economy the way the government sees fit based on current economic needs, which usually boils down to more jobs and more housing ie. business owners and real estate investors. That’s why, for example, we’re seeing so much low-income housing being built – there are tax incentives for this type of building because there is a growing economic need for it.
So, if your taxes are currently a drain on your wealth, it might be time to restructure so you can start to see them as a way to increase your cash flow instead. How is that? By finding the opportunities in the tax code that will work for your unique situation. In other words, doing exactly what the government wants you to do:
Reduce Your Taxes
Tax law is a very complex set of rules, which are all about stimulating the economy and as stated, this usually benefits business owners and real estate investors the most – not just for the United States, but for all developed countries. By remembering these two elements, you and your tax advisor can start looking for the right tax shields that would benefit your wealth strategy the most.