After a lifetime of hard work and study, you made it. You’ve graduated from high school or college and are heading out into the world. This is a momentous achievement, and you should feel very proud.
Unfortunately, there are some things I’m afraid you haven’t learned. You see, the education system generally does a lousy job of teaching people how to manage their finances and an even worse job of empowering them to make smart decisions about lowering taxes and building wealth. You deserve to keep as much of your hard-earned money as possible.
Before you get your first paycheck (and notice that all taxes are being withheld), there are four ideas I’d like to share at the start of your career. These are ideas formed in my experience as a CPA and somehow appear in the pages of a new book I’ve written.
1. There is power in understanding the truth about taxes.
Most people misunderstand tax law. They see it as a painful litany of ways the government seeks to get you – hidden traps to snag more of your paycheck.
In fact, the tax law is quite simple. It establishes a framework for determining what kind of money is taxed and at what rate. And, contrary to popular opinion, the frame is exactly right. Two people doing exactly the same thing, in exactly the same way, will pay the same amount of tax.
Tax law only gets complex when it comes to all the ways you can not pay taxes. The government wants tax revenue, but it also wants businesses and individuals to do things that help society as a whole, such as:
- Create jobs
- Build housing
- Invest in new energy sources
- Develop new technologies
- And much more
The government offers tax incentives to achieve these goals – giving up some tax revenue in exchange for companies and people who take on these tasks. These incentives make up the bulk of tax law, making it the ultimate guide on how to lower your taxes.
2. Everyone should give serious thought to starting a business.
The government knows that small businesses are the engine of the economy, which is why it offers many tax incentives to encourage business investment. This means that as a business owner, you will likely be able to keep more of the money you earn. When you keep more of what you earn, you tend to build wealth much faster.
You don’t have to get started as an entrepreneur right away. But early in your career, look for small business opportunities. You could start a side hustle alongside your day job. You could invest in real estate. Or, you can buy an established business that already has a team to handle operations.
Having your own business is a great way to create an additional stream of income. On the tax side, this opens up:
- Tax credits, such as the employee retention tax credit and work opportunity tax credit
- Tax deductions, such as for your home office, business travel, insurance, etc.
- Lower tax rates on investment income than on wage income
Of course, owning a business is not the only type of investment favored by governments. Take the time to learn about tax-efficient investment strategies that work around the world and create a win-win situation for investors and for society. Understanding both how and why these strategies work will help you design your financial future.
3. You have to put a good team around you.
The DIY approach to money management is all the rage right now, but I implore you not to base your wealth and tax strategy solely on the advice you get from someone standing in front of a car. luxury on YouTube or TikTok.
When there is something wrong with your car, you visit a mechanic. When you have a toothache, you see a dentist. When you need wealth or tax advice, talk to an expert.
Look for a CPA and other finance professionals who use a proven strategy to get results. You don’t need to find the smartest adviser; you want to work with someone who uses the best system to reliably produce the best results.
4. Although you may focus on finances, don’t lose sight of your passion.
Your wealth and tax strategies are there for a reason: to help you lead the life you want. Do not lose sight of this objective.
It’s one of the most exciting times in all of human history to take the next step in your career. Never before have individuals had such easy access to knowledge and technology at their fingertips. The possibilities are limitless.
In the beginning, stay open-minded and curious. Don’t be afraid to think differently and try new things. You will achieve great things.
The information provided here is not investment, tax or financial advice. You should consult a licensed professional for advice regarding your specific situation.