Investing is the science of “money making money.” This involves
strategies and formulas which use the creative right-brain side.
3.
Understanding markets
Understanding markets is the science of supply and demand. You
need to know the technical aspects of the market, which are
emotion-driven, in addition to the fundamental or economic aspects
of an investment. Does an investment make sense or does it not
make sense based on current market conditions?
4.
The law
A corporation wrapped around the technical skills of accounting,
investing, and markets can contribute to explosive growth. A
person who understands the tax advantages and protections
provided by a corporation can get rich so much faster than someone
who is an employee or a small-business sole proprietor. It’s like the
difference between someone walking and someone flying. The
difference is profound when it comes to long-term wealth.
• Tax advantages
A corporation can do many things that an employee cannot, like
pay expenses before paying taxes. That is a whole area of
expertise that is very exciting. Employees earn and get taxed,
and they try to live on what is left. A corporation earns, spends
everything it can, and is taxed on anything that is left. It’s one
of the biggest legal tax loopholes that the rich use. They’re easy
to set up and are not expensive if you own investments that are
producing good cashflow. For example, by owning your own
corporation, your vacations can be board meetings in Hawaii.
Car payments, insurance, repairs, and health-club memberships
are company expenses. Most restaurant meals are partial
expenses, and on and on. But it’s done legally with pre-tax
dollars.
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