There are a few steps to building and maintaining wealth. They must be followed to achieve financial success for you, your family and your heirs. The following gems will help you build wealth and keep it for your lifetime, and for your family’s.
Spend less than you earn
I have seen people who earn $100,000 a year and spend $110,000. They will never build wealth. I have seen people worth over $5 million spend much, much more than they earn and lose everything.
I have seen people earn $60,000 a year, but save $10,000 a year. They are on the path to building wealth (although at an admittedly slow pace.)
Give the IRS as little as possible
Utilize all tax saving techniques available. This is difficult, because most accountants are not familiar with unique tax saving strategies like cash balance plans, K plans, and dash plans, which substantially reduce income taxes while building money for the future.
Many frustrated taxpayers have expressed the opinion accountants are working for the IRS. Most accountants deny this and would argue they represent their clients and are not servants of the IRS.
However, the government has been relentlessly extending varied tax penalty provisions applicable to accountants and advisors to the point where advisors and accountants are caught in a dilemma.
Overly aggressive representation of clients can easily put an accountant or advisor into a position where they can be subject to varied penalties, which might even result in the loss of their license to practice law or accounting in addition to some significant financial penalties.
Develop and follow a sound long-term investment strategy. Too many people invest based on what they have read or who they have talked to recently.
They often sell out of the stock market after it has dropped. They purchase real estate after the market has gone up for years. They invest in the latest get-rich-quick strategy they saw on an infomercial.
Find ways to reduce taxes and insurance costs with health savings accounts and the insurance swapout process IM. Investigate senior settlements as a way to sell existing life insurance policies and make a substantial profit.
Once you have acquired wealth, pass it to the next generation with trust-owned premium-financed life insurance; A great way to pay for substantial amounts of life insurance at a huge discount.
A 70-year-old male in average health can purchase $2,000,000 of permanent cash value life insurance with an approximate out-of-pocket outlay of about $10,000 per year. If done properly, the proceeds are income and estate tax free.