19 Steps to Protect Your Money and Build More Wealth!

Dec 12

Image sourced by Amy Hirschi @amyhirschi

Last week, my former neighbor Allen called me. Everyone calls him ‘Al’.

A month earlier, he said he sold his consulting firm for nice money.

Al asked me if I could implement some structures and programs that would help him save income taxes and capital gains taxes.

A professional advisor can make or break the bank!

Be sure to choose your professional advisors wisely.

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For example. . .

Perhaps you contribute money to a Traditional 401k plan or 403b plan through payroll deductions. Up to certain dollar limits, your contributions are tax-deductible. Your contributions reduce your taxable income so you save taxes. In other words, by taking specific action, you save taxes. The Government gives us this tax benefit to incentivize us to save money for retirement.

Electric Vehicles (EVs) and Solar Energy. You may have received a tax credit by purchasing an electric vehicle (EV) or installing solar panels on your roof (solar energy).

Another example is when the Internal Revenue Code (IRC) offers businesses a tax credit or accelerated depreciation for purchasing new equipment.

The Government offers the tax incentives and tax credits because it wants to encourage businesses to purchase new equipment, which they believe will stimulate the economy and increase production and productivity and reduce our reliance on fossil fuels. No tricks, just trade.

Depending on the business activities of a company and facts and circumstances relating to a business transaction or deal, it may be possible to structure things in a way that saves taxes.

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In Al’s case. . .The deal terms and conditions and deal structure were finalized. The documents were signed. And money changed hands.

Truth be told, there are more opportunities to save taxes Before you ‘close the deal’ rather than after the train left the station.

I’m not an ‘I told you so’ person but I just had to ask Al whether he had an accountant.

Al said, “Yes. But my accountant never brought up the topic of saving taxes on my business or restructuring my business in order to save taxes. He never suggested anything and I didn’t think to ask.”

Ouch!

Sometimes tax-saving techniques can be implemented that could help you save taxes on your business and personal taxes too.

And these tax-saving ideas and tax-saving strategies are imbedded in the Internal Revenue Code (IRC).

Tax-saving strategies are not necessarily risky. It depends on the facts and circumstances surrounding your financial situation, business, job, income, the parties involved and more.

I don’t know how much money Al left on the table – lost – and I don’t want to know. But, too much! A dollar was probably too much!

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Looking to build outrageous wealth and live your dream life?

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Follow these 19 ways to protect your money and build wealth:

Gain a thorough understanding of your financial situation and the surrounding facts and circumstances and the opportunities and pitfalls that are at hand and which may be coming your way.
Review your current personal financial situation and your business organization and operations at least once a quarter. And whenever a material event happens or is about to happen. And whenever a law or regulation that impacts you is going to change or has changed.
Start Planning Early – before you sell your business; before you open a new office; etc.!
Figure out what you’re trying to accomplish.
Then, write everything down, a roadmap.
Engage high-quality professional advisors with experience and knowledge in the particular situation.
Never select a professional advisor solely based on price. Whether that’s an attorney, accountant, CPA, financial advisor, doctor, coach, etc. Get a solid understanding of each professional advisor’s knowledge, capabilities and relevant experience! Select your professional advisors carefully!

The old adage, “You get what you pay for.” is not always true; but often it is. . .
Sometimes saving a few dollars in professional fees now could result in losing big money later and missing out on some fantastic opportunities. Like my friend Al.
My Dad used to say “Pennywise, Pound Foolish.”
A ‘Penny’ and a ‘Pound’ are units of British currency. One penny (the plural is pence) is a relatively small unit of British currency. And one 100 pence equal one pound.
In other words, you save a penny but lose a pound!

So it goes. . .

Sign a confidentiality agreement or nondisclosure agreement with your advisors.

Even though it’s likely the professional advisors will keep your confidential information private and confidential, a well-drafted, executed (signed) confidentiality letter emphasizes the importance of keeping personal, private and sensitive information confidential!
To me, anyone that refuses to sign a reasonably drafted (written) confidentiality agreement or nondisclosure agreement, is risky. I would Run Away, Fast! And never look back.

Before you meet with your professional advisors, prepare for each meeting. Write down on paper or keyboard the facts and circumstances and goals and objectives relating to the matter.
Reveal everything! This will help you get the best advice and the best or optimal results.
Find out the available options and alternatives.

Are there ways to improve your economics and profits?
Are there ways to save taxes?
Are there ways to capture additional benefits?

Evaluate your professional advisors’ recommendations carefully.
Ask good questions, probing questions.

Go wide.
Even if you think your questions are off base or seem off the wall.

Determine and agree on the scope of the engagement (work).
Draft an engagement letter (contract) which clearly specifies the work (tasks) to be done and the services to be provided and the corresponding fees. Include milestones and specific deliverables.
Make sure you understand everything – every term and condition AND the risks and rewards associated with each option and alternative.
Make important decisions thoughtfully and slowly.
Monitor your results along the way.
Modify your actions to improve your results.

Take these steps to help you protect your money and build wealth.

See you next week.

Arthur VanDam

To 10X your success. Click here.

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Disclaimer: OH and Please Remember, we are Not financial advisors, financial planners, attorneys or accountants and are Not providing any specific financial, tax, accounting or legal advice here. Be sure to conduct your own due diligence and consult your own professional advisors to get sound professional advice that’s specific to your financial and personal circumstances, risk tolerance, time horizon and investment goals and objectives among other key factors!