Is Your Thinking Keeping You Poor? Article 56: Combating the number one threat to your wealth
by Douglas Kruger
The rich combat the greatest threat to their wealth: Tax
Before you even get to touch it, the government takes some thirty per cent of your money. In some cases, it can be much more.
We tend not to think about it, because it’s automatic, and generally comes off a salary before we even receive our share. Tax has become a normal part of life, but it wasn’t always that way. There have been periods in human history in which governments did not tax their people. Tax is an invention, not a law of nature.
It is also negotiable.
We are all legally obliged to pay tax. That much can’t be avoided. But we certainly do not have to pay unnecessary or excessive amounts of it.
The rich realise that tax is a negotiable concept. They do not avoid paying it. Do that, and you might win yourself a romantic evening with a cellmate. But here is another fundamental difference between the way in which rich and poor people think. Poor people simply accept the highest tax rates imposed upon them. Rich people don’t. They find legal mechanisms by which to protect their wealth from excessive taxation.
At the simplest level, this might mean hiring an excellent tax consultant. Such a person can save you a great deal of money, simply by knowing how to find deductible costs and organise your income in ways that deflect tax gouging.
On the highest levels, the super-rich keep their assets tied up in things like corporations. They protect their wealth from tax by means of clever investments and knowing how to use the negotiable elements of taxation to their advantage.
I am not a financial advisor and I won’t tell you which specific things to do to protect your money from unnecessary taxation. But it is enough for our purposes here to know that you can and that you should.
Heavy tax is not an inevitability. It’s really only the poor who fail to protect themselves from this primary threat to their wealth. The rich know that the largest threat to their wealth is tax.
Poverty mindset: Tax is inevitable.
Wealth mindset: Tax is negotiable.
Douglas Kruger is a business author and professional speaker. See him in action, or read his articles, at www.douglaskruger.co.za. Douglas’s books, including ‘Is Your Thinking Keeping You Poor? 50 Ways the Rich Think Differently,’ are available at Exclusive Books, Estoril, CNA, and as ebooks from Amazon.com