Gas prices and the middle class

I have noticed lately it seems gas is most expensive in Ritzville and in the Hood. Life seems to be the same way – the rich and the poor stimulate the economy. Rather ..the rich and the poor are the economy, or so it seems. And the middle class always seems to find a way to separate themselves from it just a simple observation today..

Okay I’m not saying the middle class are not actuall part of the economy honestly that would be foolish. I’m just saying it seems that the rich buy the asset that the poor spend money on which are liabilities to the poor. The middle-class, the real middle-class, which is greatly shrinking and for the reasons I am talking about here(that and they are at or approaching retirement), stash their cash and avoid paying interest. In an economy that is entirely built on debt, very little is contributed financially outside of the fractional reserve dollars that they create by holding their money in savings. However, the real value created by these people is usually very high when you look at the quality of workmanship they produce in the small business sector. The rich and the government however beat the hell out of them. We have been seeing this especially in recent years with this bloodbath of the middle class.

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How Your Taxes Can Help Build Your Wealth

Taxes are most people’s biggest expense. Therefore reducing that amount means more money immediately available to invest. The tax law is a series of stimulus packages for real estate investors and business owners.“- 

How Your Taxes Can Help Build Your Wealth
Most people view taxes as a drain on their wealth. If it weren’t for their taxes, they would have more money in their pocket, would finally be able to get ahead and could start investing.

I look at taxes very differently. I look at taxes as a way to increase cash flow. The tax law provides tons of opportunity to reduce your taxes. When you reduce your taxes, you increase your cash flow (often immediately) which can be used to increase your wealth.

Reducing your taxes goes hand-in-hand with your wealth strategy. For most people, taxes are their single biggest expense. This means that reducing their taxes results in instantly increasing the amount they have available to invest.

The Government Wants You to Reduce Your Taxes
The tax law is a series of stimulus packages for real estate investors and business owners. This is true in all developed countries.

The government wants to provide jobs and housing. To encourage others to do this for them, the government provides tremendous tax benefits to those who provide jobs (business owners) and those who provide housing (real estate investors).

Your Tax Strategy is Part of Your Wealth Strategy
Once you understand what the government wants you to do in order to reduce your taxes, you can use this information in your wealth strategy to invest in assets that not only fit with your wealth goals but also produce tax savings.

This is a powerful formula and one that can be used over and over and over again because many of the tax benefits for entrepreneurs and real estate investors produce annual tax savings.

Then, as your wealth grows, so do the opportunities for tax savings, which means not only does the cycle continue every year, it grows every year as well so your tax savings are more, your increase in cash flow is more and your wealth increases even more.

Do you see why I am so passionate about taxes? Taxes are a tremendous tool to build your wealth.

Tom Wheelwright

Are You Living On Financial Edge?

             Are You Living on the Edge without a Financial Education?

Posted on: Tuesday, January 24, 2012|Written by: Robert Kiyosaki

When I was a young boy, the path to retirement was simpler. For the most part, if you saved your money regularly, paid your mortgage off, and lived modestly, you could retire well. This was partly because inflation was low since the dollar was pegged to gold and also because most employees could expect a company pension and health benefits until the day they died. It did not take much intelligence to have a secure, financial future.

Today, we live in a world that requires an extremely high, financial intelligence to retire well.

It is no longer enough to save money, as higher inflation and taxes wipe out your earnings. You can’t rely on a company pension because most companies don’t offer one. Instead, it is expected that you contribute to a 401(k) plan that may or may not provide you a secure retirement and that is simply a glorified, tax-deferred savings account that benefits the rich, not you.

These changes are because of two actions by the U.S. government that I’ve written extensively about, most notably in my book Conspiracy of the Rich. In 1971, Nixon took the dollar off the gold standard, making the dollar a currency instead of money. And in 1974, the Employee Retirement Income Security Act was passed, paving the way for 401(k) plans, forcing uneducated workers into the stock market, and creating the financial services industry.

It’s taken about three decades, but we’re seeing the devastating effects of those actions today as individuals and countries are living on the edge of financial disaster.

On an individual level, take for instance a young friend of mine’s father whose dad worked his whole life in an old-world industrial plant. Every time my friend talked with his dad, his dad would mention how long it was until his retirement, where he’d collect a pension and health benefits and enjoy golf a few times a week and sports on TV. There were no savings to speak of, some stock options decimated by the economic downturn, much debt, and no other plan. Unfortunately, only a few months before my friend’s dad hit the minimum retirement age, the plant went for sale, found no buyers, and closed. Now he, along with hundreds of others at that plant, cannot find a new job, have no savings, and are looking at a very insecure, financial future. For him, it may be too late.

On a national level, look at the Euro Zone. According to The Wall Street Journal, “The global economy faces a depression-era collapse in demand if Europe doesn’t quickly act to dramatically boost the size of its debt-crisis firewall, implement pro-growth policies and further integrate the euro zone, the head of the International Monetary Fund warned Monday.”

As IMF Managing Director Christine Lagarde remarked over the weekend, the Euro Zone’s efforts to stymie debt problems “is about avoiding a 1930s moment, in which inaction, insularity, and rigid ideology combine to cause a collapse in global demand… A moment, ultimately, leading to a downward spiral that could engulf the entire world.” If Europe collapses, the world goes down with it — and the jury is still out on what will happen. But the world’s financial experts are sending out the warning cry.

As you read these stories above, they probably sound vaguely familiar, have little emotional impact on you, and you may have even skipped over them.

Why?

These stories echo stories that have been shared for many years now. The news is filled with stories of people living in countries on the edge of financial collapse, and then buffered by good news here and there to keep us all from falling into complete despair.

The reality is that we have become used to living on the edge, and we’re forgetting what it means to live comfortably inland. This is not all bad, if you have the right mindset.

Living on the Edge Requires a Financial Education

Living on the edge requires alertness and intelligence, you cannot give up or be lulled or else you will fall. Each step must be calculated and taken carefully, but confidently, to get to safety. The only other option is to do nothing and hope someone will save you —which is akin to suicide.

It’s for times like these that the Rich Dad Company was formed. This website, our books and DVDs, our coaching, and financial education all exist to help equip you for the perils of our modern economy so that you can be sure to have the knowledge and practical application required to survive and thrive while others fail and fall.

For many, there is no choice about living on the edge. The die has been cast for us by people much more powerful and influential than us. But we can control our actions on the edge. It’s my hope you’ll step forward confidently and smartly, equipped with as much financial knowledge and courage as you can gain and muster. It sure beats the alternative.

To increase your financial education now, click here to find out about our free resources and online community.

How To Legally Reduce Your Taxes

If You Want to Change Your Tax, Change Your Facts
I am regularly asked how someone can reduce their taxes – legally, of course.

My answer: Change your facts

One of the most powerful ways to make the tax rules work for you is to change your facts. This concept applies in most developed countries because the tax law is written to favor specific facts.

Do you know someone who is always sharing the write-off of their most recent meal (trip, vehicle, cell phone, gadget, etc.)? Do you wonder if what they are doing is cheating or legal?

With the right set of facts, any of those items can be legal tax deductions.

That’s why when I meet with a new client, I want to know their facts first. Then, I can determine how to change their facts to reduce their tax.

What are these facts?
The facts I’m referring to here are usually surrounding where your money comes from and where it goes.

– Do you own a business?
– Do you own investment real estate?
– Are you an employee?
– Are you self-employed?
– How much time do you spend in your business?
– How much time do you spend in your investing?
– What is your role in your business?
– What is your role in your investing?
– What investments do you have?
– What expenses do you pay personally?
– What expenses are paid by your business or investing activity?

What is deductible for one person may not be deductible for another person. This is because one person’s facts can support a particular deduction whereas another person’s may not.

If you don’t like your tax, change your facts
A few years ago, a client asked me if he could deduct his travel to a particular state. He and his family enjoyed spending time and traveling there frequently. At that time, he didn’t have a business reason to travel to that state and his business was not set up to conduct business in that particular area.

I went over the specific rules with my client that covered what he needed to do in order to meet the requirements to deduct the travel in his business. I also shared with him how he could deduct the travel expenses for his spouse and children.

A few months later, my client tells me about a very profitable deal he now has in the state and he provided me with all of the documentation we discussed to support his deductions.

My client jumped in and changed his facts. It led to increasing his deductions, reducing his taxes and making more money! In order to meet the rules, he had to conduct legitimate business in the state. He did and he was very successful at it.

How can you change your facts?
Any time you have cash come in or go out, there’s an opportunity to change your facts.

Should you receive the income personally or should your business receive the income?

Are your investments helping your tax situation or should you explore new investment strategies?

Are your expenses personal or do they meet the rules specific to your situation that make them deductible?

Are you willing to change your facts?
Discuss your facts with your tax advisor and ask how changing your facts could change your tax. Then, be ready to take action.
Tom Wheelwright

Maximizing Travel Deductions

5 Tips to Planning Your Holiday Travel with Your Tax Strategy in Mind
With the holiday season here, many people will be traveling so it is a great time to review a few tips on how your travel can help your tax strategy.

The tips I share here are specific to the U.S. tax law. The key is understanding the rules in your country and using them to your benefit in your tax strategy.

Tip #1
When traveling, spend more than 50% of your time each day on business activities and you can deduct 100% of your travel expenses. Plan your business and other activities so you can easily meet this requirement.
Tip #2
Travel expenses for your spouse and your children are 100% deductible if your spouse and children are involved in your business and spend more than 50% of each day on business activities. Planning is the key here. Plan your business and other activities so your family meets this requirement.
Tip #3
Create a reason that is great for your business to travel to your desired location. This is my favorite tip because I find when I create a great business reason to travel, my business benefits in a way that it wouldn’t have without the travel.

I have many friends and family members in Utah that I like to visit as often as I can. I decided to take a business trip there several years ago to explore the possible expansion of my rental real estate business into Utah. I spent more than 50% of each day on business activities and then I also had some personal time to visit with friends and family. My rental real estate business in Utah has doubled since then and my continued travel there is a legitimate business deduction.

Tip #4
If your travel is for personal reasons – treat it as personal and don’t deduct it. If one of your goals for a particular trip is to take a break from business, then treat that trip as personal. Trying to claim that as business travel could draw a lot of scrutiny to your legitimate business travel expenses.

Or, if your spouse and children don’t participate in the business, treat their portion of the travel expenses as personal – trying to deduct their expenses could jeopardize your portion that is legitimate.

Tip #5
Travel outside of the U.S. has a completely different set of rules. Be sure to discuss this with your tax advisor before you travel.
Use Your Travel in Your Tax Strategy
Travel is one of my favorite deductions because it is one of those expenses that most of us already have, and when planned properly, it gives us the opportunity to increase our business’ bottom line while decreasing our tax liability.
                                                                                                                  
Tom Wheelwright

5 Myths about Tax Preparation

Use taxes to your advantage as a way to increase your wealth! -Joshua Gamen
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5 Myths About Tax Preparation
I’ve been involved in the tax return preparation process for 30 years. During those years, I’ve come across many myths that people believe about tax preparation.

Today, I’ll share the top 5 myths I hear about tax return preparation and why they are not true.

Myth #1: A Refund is Great News
You’ve probably heard some tax preparation firms brag about how many of their customers receive refunds, or the average size of their customers’ refunds.

Isn’t this great news? I’m not so sure it is.

A refund can seem like great news, especially if it isn’t expected, but it usually indicates a lack of tax planning. With proper planning, that refund can be received a whole lot earlier. While most people don’t want to owe tax when they file their return, they also don’t like to part with their money any earlier than they have to and that is exactly what a refund reflects.

Myth #2: Filing an Extension is Bad
Many taxpayers are hesitant to file extensions for their business or personal tax returns for fear that there are hidden disadvantages to doing so. This is not true. In fact, extending your tax return can be a great tool in your tax strategy.

Extensions are helpful to avoid having to file amended returns. Sometimes the forms or information you receive from others to complete your tax return may be amended. If you receive an amended form and you’ve already filed your return, then you must amend your tax return.

Other times, the information you need from others to complete your tax return may be late. Filing an extension provides you with the time to gather this information and accurately report it on your tax return.

Remember: An extension does not mean you are off the hook when it comes to gathering your tax information timely. It is still important to gather all of your tax information timely so the extension can be prepared with the best information available.

Also, an extension does not extend the due date of any taxes due with the return. Any tax liability due with the return is due on the original due date.

Myth #3: Tax Return Preparation is a Cash Outflow
Tax return preparation fees can vary dramatically. This makes it extremely important to look at the big picture rather than just the cash outflow.

Let me give you an example. Suppose you have a choice of paying $500 for your tax return to be prepared or $2,000. All things being equal, anyone would choose to pay the lesser amount.

But, what if all things are not equal? What if the $500 gets you an adequate, accurate return but the $2,000 would get you a return where you legally pay $5,000 less in tax? Which is the better deal? In one, you are out $500. In the other, you are ahead a net of $3,000.

Before you have your next tax return prepared, review your own tax situation and the advice you are receiving from your tax preparer. Are you getting the return on investment you want? Are you getting the planning ideas you need? Are your taxes going down or do they continue to increase?

Myth #4: Accurate Returns Are All The Same
In all the firms and companies at which I have worked, the basic accuracy of tax return preparation was excellent. I find this also to be the case on returns that I see from clients who are new to ProVision. It’s rare that I find a flagrant error in a return.

But, does that mean that these firms all produce the same quality of tax return? The clear answer in my experience is a resounding “NO!”

Accuracy in a tax return simply means that the information provided by the client was reflected on the tax return. It does not mean that the tax return was prepared in the best way it could have been prepared. In fact, I rarely see a tax return from a new client that was prepared the way we would prepare it at ProVision.

For example, certain deductions can be classified in different ways. While each way is technically accurate, the tax impact of each can vary dramatically.

It’s not safe to assume your tax preparer (or tax software) knows the difference.

Never use a tax preparer who isn’t also your tax advisor. You may otherwise get great advice that is never used and lose out on great tax savings.

Myth #5: The Software Does All The Work
Whether you do your tax return yourself or hire someone to prepare it, most likely there is tax software involved. Many people make the assumption that the tax software does all the work.

While the tax software performs the calculations (usually quite accurately), it’s easy to get into trouble if the input going in is incorrect.

The true work and expertise – and resulting tax savings – is in the knowledge of the tax preparer.

                                                                                                                          

                   Written by: Tom Wheelwright

Tom Wheelwright

Using Your Retirement Plan in Your Wealth Strategy

Your wealth strategy and your retirement plan are one in the same. Don’t just hand your money to someone else to do what’s in your best interest for you and your family’s future. If it is up to be, it is up to you! -Joshua Gamen

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Using Your Retirement Plan in Your Wealth Strategy
One of the most popular questions I receive about a wealth strategy is this:I want to use the money in my retirement plan for a specific investment. Should I make the investment inside my retirement plan or should I distribute the money from my retirement plan and make the investment outside of my retirement plan?

My answer (of course) is it depends. It depends on your specific facts and circumstances.

Today, I’ll share some of the key factors to consider to help make this decision.

Factor #1: What Investment Options Are Available in Your Retirement Plan?
The term “retirement plan” covers a huge range of retirement plans – each of which has their own specific set of rules.You will first want to determine what your investment options are in your retirement plan. Some retirement plans, like an employer sponsored retirement plan, limit your investment options. Other retirement plans offer a broader range of investment options.

Factor #2: Are the Distributions Subject to Penalties?
While the rules vary by the specific type of retirement plan, in general, if money is distributed from a retirement plan early, meaning before the date allowed by the government and/or employer rules, then the distribution will most likely be subject to penalties.Penalties don’t rule out distributing the money, they just need to be factored in to your analysis.

Factor #3: Are the Distributions Subject to Income Tax
Depending on the type of retirement plan or when the distribution is taken, retirement plan distributions may be subject to income tax.Like penalties, just because the distributions may be taxed doesn’t rule out distributing the money – it just needs to be factored into your analysis.

Factor #4: What is Your Personal Situation?
Your personal situation plays a big role here. For example:– Is your tax bracket low or high?
– When can you take distributions from your retirement plan without penalty?
– What is your expected return on investment inside of your retirement plan?
– What is your expected return on investment outside of your retirement plan?
– What will you do with the investment long term?

Factor #5: What Type of Income Will Your Investment Produce?
Investments can produce different types of income including ordinary income, interest income, dividend income, rental income and capital gain. Some income types work very well inside a retirement plan, and others may cause your retirement plan to pay tax.
Factor #6: Does Your Investment Involve Leverage (Debt)?
If your investment involves debt, then this is a critical factor to understand.In some retirement plans, the tax implications of debt can be significant. For example, income generated from the debt can be taxable. Or, if you guarantee the debt personally, there could be tax consequences.

It’s important to not only understand the tax implication of using debt in your retirement plan, but also to understand how it can impact your investing. Many lenders are not willing to make a loan to a retirement plan without a personal guarantee. However, a personal guarantee, as noted above, could trigger tax. Lenders who are willing to lend to a retirement plan without a guarantee are usually not willing to lend as much as they would if there were a guarantee and the rate is usually higher.

It is extremely important to understand your leverage options inside and outside of your retirement plan before moving forward with your investment.

Factor #7: What Tax Benefits Will Your Investment Generate?
While retirement plans are often viewed as a great tax deferral vehicle, many tax benefits can be lost in retirement plans.For example, if a distribution is taxable from a retirement plan, it is generally taxable at ordinary income tax rates. This is true even if the income inside the retirement plan was capital gain income – which outside of a retirement plan has lower preferred tax rates. The tax benefit of the lower rate is lost.

Another example is investments that create losses for tax purposes. Some investments, like rental real estate or oil and gas, often create losses for tax purposes even though they generate positive cash flow. Losses inside a retirement plan are typically lost because the retirement plan usually doesn’t have any tax for the losses to offset.

Your Retirement Plan and Your Wealth Strategy
Your retirement plan can give your wealth strategy a tremendous boost. The key is understanding the best way to integrate your retirement plan into your overall wealth strategy.

Written by: Tom Wheelwright

Tom Wheelwright

Essential Qualities of an Entrepreneur: Strength of Character

A couple weeks ago, I wrote about something hopeful I see in America, the rise of young people interested in entrepreneurship (“There’s Hope Yet”). More than ever, the upcoming generation wants to start businesses and pursue their passions by starting companies that will not only take care of them and their family, but also benefit society as a whole. I applaud this.

I recently released my newest book, The Midas Touch: Why Some Entrepreneurs Get Rich and Others Don’t, with my good friend, Donald Trump. This is a book on entrepreneurship for entrepreneurs—something both Donald and I are extremely passionate about.

The reason Donald and I wrote this book is because we’ve learned the hard way that there are five, essential qualities entrepreneurs need to have in order to succeed. These qualities aren’t a guarantee for success, but not having them is a guarantee for failure. And we want you to succeed.

So, over the next few weeks, I’ll briefly share some thoughts on each quality. For more on each quality, I encourage you to purchase a copy of Midas Touch.

Strength of Character

As a young man, I started a successful Velcro wallet business. This was in the early 1980’s and MTV was just starting to take off. My partners and I had the foresight to take advantage of the wave of rock bands coming out of MTV, and we licensed band names and logos to place on our wallets.

For a while, business boomed. We had thousands of distributors around the world shipping our wallets for us, and we had millions in sales. The problem is that we didn’t really know what we were doing. As a result, many of our sales partners were 120 or more days late on paying us or had skipped out entirely. Because of this, we couldn’t pay our vendors, didn’t have the materials to continue production, and were in danger of not paying our employees and our taxes. We were in a cash crunch.

I’ll never forget sitting down for lunch with my rich dad to go over my financials for the company. Looking over the financial state of my company he said to me, “Your company has financial cancer. You’ve mismanaged a company that could have been successful. You need to look at reality and admit you’re incompetent and that your business is a failure.”

It was a hard word to hear. Up till that point, we tried to hold on, thinking the next big break would come. But it never did, and things were going from bad to worse.

After that conversation, I went back to my partners, and we did the right thing. We liquidated our inventory, paid our employees what was due to them, and set aside enough money to pay our taxes. The company was finished, but at least we weren’t crooks.

That was my first major failure as an entrepreneur. But it wasn’t my last. And if there’s anything I’ve learned after 30+ years as an entrepreneur, it’s that you will fail. The question is not whether you’ll fall; it’s how many times will you stand up?

The #1 essential quality of an entrepreneur is Strength of Character.

In order to succeed, you must first have integrity to do the right thing, and second, have the fortitude to continue moving forward even in the face of failure. Those who lack strength of character quit in the face of failure. Those who have strength of character get stronger in the face of failure by learning and adapting for the next opportunity.

How strong is your character?

I leave you with one of my favorite commercials of all-time.

Written By: Robert Kiyosaki

Making Your Tax Savings a Reality

No tax strategy is bad and will cost you a lot of money that you never even knew you had – Joshua Gamen
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Last week I shared a few tips about forming your tax strategy.

A tax strategy is a step-by-step action plan that ensures you are paying the least amount of tax allowable by law, regardless of your business or investment situation.

A tax strategy is comprehensive. It considers:

– Your personal and financial goals and dreams
– Your business, your investments and your family situation
– How your businesses and investments are owned
– The appropriate entity structure for your business and investments
– Your current situation to uncover deductions and other permanent tax saving opportunities

Those who are most successfully in their tax strategy make it a part of their every day activities. To them, a tax strategy is not a one-time event. Rather, it is something that becomes part of their routine.

A tax strategy helps you to view your every day activities in a different way – one that works toward the goal of permanently reducing your taxes.

The reality is that just about everything you do can have an impact on your taxes. So, why not make sure that impact is a positive one?

Here are a few examples of every day activities that can impact your taxes:
– Paying expenses
– Receiving money from an entity you own
– Putting money into an entity you own
– Having a meeting with partners, vendors or advisors
– Buying or selling investments
– Having an important discussion about your business or investments

The above items are activities you probably already do on a regular basis. By keeping your tax strategy in mind while doing these activities, you can improve the results of your tax strategy – all without having to do anything out of the ordinary.

Paying your expenses
When you pay your expenses, who is paying for that expense? Is it you personally? Should it be your entity instead? What type of documentation do you need to keep for your tax strategy?

Unless you have your tax strategy in mind, it is easy for this ordinary transaction to have a negative impact on your taxes.

You may pay for business expenses personally and forget to have your business reimburse you – this means the expense gets missed as a tax deduction.

When you keep your tax strategy in mind, it will be routine to have your business reimburse you. Or, even better, it will feel wrong to not have your business pay for the expenses in the first place.

Receiving money from an entity you own
Every payment you receive from your entity can have an impact on your taxes. This may include salary, distributions, expense reimbursements or other forms of payments.

Your tax strategy maps out the best way to take money out of your entity. Making sure those payments are treated as they are supposed to be, should be part of your every day activities.

For example, if you are receiving a salary, it should look like salary. This means it’s paid on a set schedule (weekly, bi-weekly, bi-monthly, monthly, etc.) and the proper taxes are withheld.

Similarly, if you are taking a distribution, it should look like a distribution. Distributions are usually not paid more frequently than quarterly. Also, distributions are usually not a set amount as they are typically tied to the profitability of the entity. If your distribution is paid every two week, it looks more like a salary and this can have a negative impact on your tax strategy.

Keeping this in mind, as you receive payments from your entity, helps the success of your tax strategy.

Having a meeting with partners, vendors or advisors
If you are meeting with a partner, vendor or advisor, odds are you are discussing items that impact your tax strategy. These meetings likely cover topics important to your tax strategy, like investments, new opportunities, strategic decisions or major purchases.

All of these are great to have documented in the form of meeting minutes. Meeting minutes provide tremendous support for deductions, investments and business purpose – all of which help the success of your tax strategy.

Your Tax Strategy
Those who are most successful in their tax strategy are those who have incorporated it into their routine. When reaching for a credit card to pay for lunch, they are asking themselves, “Should I pay with the business card or my personal card?”

It is the every day activities that make tax savings a reality.

                                                                                                                                            
Tom Wheelwright

From Tom Wheelwright: The Power of Systems in your wealth strategy

I’m constantly asked how to use leverage in different ways in a wealth strategy – and I’m glad people are asking because leverage plays a huge role in every successful wealth strategy.

Leverage is simply doing more with less.

Here are 3 of my favorite forms of leverage.

#1: Systems
I think systems are one of the most important and powerful features of a wealth strategy.

Systems are simply the process or procedures to complete specific tasks. Systems provide the detail of the who, what, when, where and how something will be done.

Think about a franchise. One of the greatest values a franchise offers is its systems. The systems provide all the details about how to market, sell, fulfill and everything else involved in operating that franchise. A franchisee simply has to follow the systems.

Let’s say you invest in rental real estate. You should have systems for:

– Identifying the property to buy
– Purchasing / financing the property
– Renting the property
– Maintaining the property
– Reviewing the performance of the property

Systems don’t have to be complicated. They just need to document what needs to be done in a clear manner. Systems can be as simple as a checklist.

If you are just starting your wealth strategy, you may wonder why you need systems if you are doing everything.

Here’s 2 reasons why you need systems:

Reason #1
Your systems are the place to document the specific details of what needs to be done. They are also the place to document your best practices – your trade secrets. As you learn better ways to do things, document that in your systems.

Your systems enable you to leverage your time by making you more efficient while still getting the results you desire.

Reason #2
Many people start off doing everything themselves, but they usually have a goal to grow their wealth and hire others do the work. If you want to do this successfully, systems are imperative. Systems communicate your specific expectations without you having to be there.

Many people have wealth strategies that never reach their full potential because they are not able to give up control.

With systems, you don’t have to give up control. You’re giving up the specific tasks, but you are still in control. You control the systems.

When your systems are created, used and monitored properly, they will tell you when things are working and when they aren’t working. This allows you to focus your attention where it is most needed – this is a huge form of leverage in a wealth strategy.

#2: Your Wealth Team
Systems definitely take time to create. You don’t have do it all yourself though. This is where your wealth team comes in to play.

One of the best examples of leverage in a wealth strategy, and also one of my favorites, is a wealth team.

A wealth team is a group of advisors, coaches, mentors, employees, vendors and other contacts who assist you in building your wealth.

With a wealth team, you can leverage your time by hiring advisors, coaches, mentors, employees and/or vendors. But the leverage doesn’t stop there. This is just the beginning. You can also leverage your wealth team’s contacts, their resources, their knowledge – the list goes on and on.

Use your wealth team to help you create your systems. Leverage their resources and expertise to add value to your systems.

Once you’ve created your systems, share them with your team members so they can be part of the systems and contribute to the success of your wealth strategy.

#3: Software
Software is a wonderful form of leverage. Software allows us to do more with less every day.

Software can be an integral part of effective systems. When used properly, software can streamline many tasks while providing better information and results.

Software can be the driving force behind the systems. It can notify the who about the what, when, where and how. And, it can provide real time reports about how the systems are working. These reports are what help you stay in control.

How do you know what software to use?
Leverage your team’s knowledge – ask them what software you should be using. And, if you truly want to leverage your software with your systems, have a team member who is committed to integrating the two.

Using Leverage in Your Wealth Strategy
Think about how you use these 3 forms of leverage in your wealth strategy and identify ways that you can leverage them even more.

Focus on your wealth!

Tom Wheelwright
Founder & CEO