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

The First Step to Creating a Wealth Strategy

“I think it’s because many people think that their wealth vision is simply to have lots and lots of money, so defining it is a waste of time.”  

Where Will Your Wealth Take You?
Most people dream about being wealthy or play the lottery in hopes of winning millions, but few people actually have a strategy to achieve their dreams of wealth.

I hear many reasons why someone doesn’t have a wealth strategy:

– They don’t really know what a wealth strategy is.
– They don’t know how to get started.
– They think they need to wait to get started because they don’t have any money.
– They think they need to get out of debt before starting their wealth strategy.

A wealth strategy is a plan of action intended to achieve specific wealth goals.

The fact is, everyone needs a wealth strategy, regardless of goals, age, wealth, income or debt.

The First Step to Creating a Wealth Strategy
The first step to creating a successful wealth strategy is knowing where you are going. I call this Your Wealth Vision.

Your wealth vision is your picture of your ultimate lifestyle. Where do you live? How do you spend your time? What are the possibilities?

Now, we can all close our eyes for a few seconds and imagine the lifestyle of our dreams. But to truly define your wealth vision means being very detailed and specific.

For example, in just a few seconds time, we may imagine our ultimate lifestyle to include traveling. In those few seconds, we may imagine the excitement that goes with traveling, and a snapshot of a place we’d like to go, but the details probably aren’t more specific than that.

This is much different than someone who takes the time to specifically define how they see traveling in their wealth vision. For example,

– How often will they travel?
– Who will they travel with?
– Where will they travel to?
– How long will each trip be?
– Will they fly coach or first class?
– Will they stay at a hotel, rent a home or buy a home?
– What activities will do they do when they travel?

The more detailed and specific the wealth vision, the more likely it is to be reached.

Avoid This Mistake When Creating Your Wealth Strategy
Many people skip this first step.

I think it’s because many people think that their wealth vision is simply to have lots and lots of money, so defining it is a waste of time.

Plus, they are eager to move on to the next step. But, this first step is critical because you can’t get to where you’re going if you don’t know where it is you’re headed.

Once your wealth vision is defined, key pieces of your wealth strategy can come together.

For example, when you know your wealth vision, you can determine your target cash flow and your target net worth. These targets can be used to develop investment criteria so your investments work toward your wealth vision and not against it.

Your Wealth Vision
Really think about your wealth vision and the specific details. Then, put it in writing. This is the first step I always take with any wealth strategy I create.
Tom Wheelwright

Tax Strategy is Important for Building Wealth

Understanding how taxes work is critical to growing wealth. Rule #2 of the new rules of money: Keep more money. -Joshua Gamen
Forming Your Tax Strategy
There are two big obstacles most people run into when forming a tax strategy.

Obstacle #1: What is a tax strategy?

Obstacle #2: Where do you start?

What is a Tax Strategy?
Let’s break this term down and start with strategy.

A strategy is a systematic plan of action intended to accomplish a specific goal or purpose.

The specific goal or purpose is to permanently reduce your taxes.

So, a tax strategy is a plan of action to permanently reduce your taxes.

Of course, most people are all for permanently reducing their taxes. What is typically missing in their quest to do that is the strategy piece. And it’s the strategy piece that produces the maximum results.

The strategy piece helps focus our actions and thoughts every single day on permanently reducing taxes.

It doesn’t have to take hours every day to get maximum results from your tax strategy. Instead, your strategy becomes a part of your daily routine.

Every transaction you do can have an impact on your taxes. Your tax strategy helps you think about your daily transactions in a way that gets you to your goal of permanently reducing your taxes.

Where Do You Start?
Think about planning a vacation.

Let’s say you are going to Hawaii. When you go to book your ticket, you need to know where you are departing from, right? This is your starting point.

It is impossible for you to get to Hawaii unless you know where you are starting.

The same applies to a tax strategy. You must know where you are starting. In your tax strategy, this means you must know your current financial position.

Your current financial position includes:

Your Current Balance Sheet
Your current balance sheet tells you your current net worth. It’s calculated as follows:

Your Assets (what you own) – Your Liabilities (what you owe) = Your Net Worth

When you know your current net worth, you know the exact resources available to you to use in your tax strategy. Your specific assets and liabilities help create the best path for you in your tax strategy.

Your Current Statement of Cash Flows
Your current statement of cash flows tells you your net cash flow. It’s calculated as follows:

Your Income – Your Expenses = Your Net Cash Flow

Identifying your sources of income is the starting point of identifying how to reduce the tax on that income.

Identifying your expenses is the starting point of maximizing your deductions.

Get Started
The starting point to reducing your taxes and forming a tax strategy is understanding your current financial position.

If you haven’t created your tax strategy yet, start by updating your balance sheet and statement of cash flows.

If you already have your tax strategy in place, review your current financial position regularly to identify new opportunities for your tax strategy.

Your Tax Strategy and Your Wealth Strategy
If you are like most, the single biggest expense draining your cash flow is your taxes.

When you reduce your taxes, you immediately increase your cash flow. Increased cash flow can be used to create wealth. Your taxes are a powerful way to feed your wealth strategy!


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

Do you want to be rich or do you want to be wealthy?

The following was written by my tax advisor Tom Wheelwright. Tom is a CPA here in Tempe, AZ, but he is known around the world from his books. Tom has written a lot about the tax codes and has a keen understanding of why the tax code is set up the way it is, not only in America but in most every developed nation in the world.

There is a HUGE difference between being rich and being wealthy. There are many famous athletes and musicians, etc that make it RICH off of their talent. Talent can make you rich, but it takes a financial education to make someone WEALTHY. Wealth means not only do you have a lot of money, but you can continue to make more money when you need, and you have your assets protected. You can be rich from free parking(capital gains), OR.. you can be wealthy from cash flow!!!

I once heard it put this way, your wealth is the equivalent to the amount of time you could go without working and sustain the quality of life that you desire.



Written by: Tom Wheelwright

Do you know people who make lots of money but never seem to have any money? Or maybe they have luxurious homes and expensive cars, but they still have to go to work every day to make ends meet?

Those with lots of money may be rich, but they are not necessarily wealthy.  In fact, many people who have high income, often have very low wealth.

This is because making lots of money has nothing to do with how much wealth a person has.

I was talking with a new client recently who runs a very successful business. He makes hundreds of thousands of dollars each year, but has more liabilities than he has assets.  Plus, he has to be “in” his business in order for his business to sustain its success.

While he is well-educated, his education never taught him how to turn the money from his business into permanent wealth.  If he stops working, so does his business.

This client is rich, but he is not wealthy.

This is not a criticism of this client.  It is usually what we are taught (or rather what we are not taught).  Most people do not receive any education on how to be wealthy.

Rich Versus Wealthy
Being rich is different than being wealthy.  The difference is very simple:

It’s knowledge.

Rich people only have money and how long they have the money is unpredictable.

Wealthy people know how to make money and have sustainable wealth.

In other words, a wealthy person will always be wealthy, whereas someone who is merely rich will only be so for a short period of time until the money is gone.

Once you know how to make money, you can build sustainable wealth. The money never stops coming. If you have a reversal of fortune, it’s not a big deal. You just make it back.

You Can’t Simply Hand It Over and Forget About It
Most people are taught to turn their finances over to a financial advisor, and that taxes are too difficult so they need to hand them over to a tax advisor.

The problem with this is that many people think this is the end-all solution and once it is handed over, they can forget about it.

The idea of handing over your taxes and finances to someone else can be tempting.  But the reality is, the likelihood of getting the results you want is very slim when you hand over your taxes or your finances.

Even the best advisors cannot provide the best results if their clients are not involved in the process.

One key piece of knowledge the wealthy have is that they understand how their daily decisions and actions impact their wealth and taxes.  While they have a team who handles their wealth and taxes, they understand that they have a key role and they know when they need to get their team involved.

Here are a few examples of when your team needs to be involved:

– Before setting up a new entity
– Before any major purchase (real estate, equipment, vehicles)
– Before selling an investment
– Before taking on a new partner
– Before starting a new business

These are just a few examples, but they all start with BEFORE.

The new client I was talking with came to me AFTER a major purchase.  While we were able to do great things with his wealth and tax strategy, we could have done even better if we were involved before.

I’m not suggesting that you have to do all the work or become an expert.  There are experts that you should have on your team, who can do the work for you, but you have to have the knowledge to know when to get your advisors involved and the knowledge to understand how your actions impact your taxes and your finances.

Focus on your wealth!

Tom Wheelwright
Founder & CEO

How to pay less taxes – applicable(and easy) steps

This is from my CPA’s weekly newsletter. EVERYONE needs to be doing these easy things to keep more of the money they make for their own benefit.


By: Tom Wheelright

Taxes can be a powerful tool to build your wealth. View every day as an opportunity to reduce your taxes.

The general population views taxes as something you deal with once a year. I look at taxes differently. Taxes are a tool that can help you create wealth, and what better way to do this than every single day!

Every day you have opportunities to reduce your taxes.

When you are making money, there is an opportunity to reduce your taxes.

When you are spending money, there is an opportunity to reduce your taxes.

When you have a new investment, there is an opportunity to reduce your taxes.

When you make a new deal for your business, whether it’s with a vendor, a customer or an employee, there is an opportunity to reduce your taxes.

Making it a habit to look at every day as an opportunity to reduce your taxes will create the right habits to actually reduce your taxes.

What did you do today that may reduce your taxes?

– Did you buy breakfast, lunch or dinner?
– Did you drive your vehicle for your business or real estate investing?
– Did you go shopping?
– Did you attend a seminar?
– Did you get an early start on holiday gift buying?
– Did you make an investment today?
– Did you hire a new professional for your team?
– Did you sell an investment?
– Did you make travel plans (even if for the holidays)?
– Did you file (or throw away) receipts?

This is just a small list of what many of us do on a daily basis. All have the opportunity to reduce our taxes.

Make Tax Savings a Daily Habit
It really boils down to focusing on where your money comes from and where it goes.

When you make money, think about how the money will be taxed. Are there better ways to receive your money so it is taxed in more favorable ways?

When you spend money, consider how it can be a legitimate deduction for your business or investing activity. If it can, then be sure to keep the proper receipts and documentation. And, make sure your business or investing activity pays for the expense if you have separate entities for these activities.

Here’s a daily habit I have.

I carry my business credit card and a manila folder with me at all times. Having my business credit card on me makes it very easy to have my business pay for my business expenses.

When I use my business credit card, I write the business purpose and other notes on the receipt. These notes give me the proper documentation to support my expense as a business expense. Then I put the receipt in the folder. The next time I’m in the office, I hand over the receipts to my assistant who scans and files them.

With this habit, my business is properly paying for the expenses and I can easily pull up the documentation to support my expenses at any time. You may notice that this is not a fancy system. But it works, because I do it the same way every time. My receipts don’t get lost, I know exactly what they are for and my tax savings are protected.

Imagine how different this scenario would be if I tried to do the documentation and filing only once a year!

There are many opportunities available to business owners and investors in the tax law to reduce their taxes. Understanding how these rules apply to you will help you create the habits in your daily routine to reduce your taxes.

Get Started Now
As I have been sharing, the government wants you to reduce your taxes! The tax law is a series of stimulus packages for real estate investors and business owners.

Reduce your taxes now!

Tom Wheelwright