|
Author: Loral Langemeier Article source: http://wealth.dinsolnet.com/. Used with author's permission.
The four main steps in building a wealth cycle foundation are:
· Pay yourself first
· Understand the legal entities available to you and the tax implications of each
· Determine whether to be an active or passive investor and using the appropriate strategies
· Develop and commit to your money rules
PAYING YOURSELF FIRST
Paying yourself first is a money rule. Can you imagine how much you would be worth if, from an early age, you had been conditioned to pay yourself first by depositing a portion of your earnings in a wealth account? Even if you only put in $1 per week, today you would probably be sitting pretty.
LEGAL ENTITIES / TAX IMPLICATIONS
In the United States, a number of legal structures, vehicles or entities may be used to hold and protect your wealth. These structures are separate and distinct from the taxpayers who form and/or own them. When you create any of these entities, it is assigned its own Employee Identification Number (EIN) number, which is separate from your social security number. Your legal entities are also taxed separately from you personally.
The legal protections and responsibilities differ for each of these vehicles, as do the tax implications. How you structure your investments, what legal entities you use, can have enormous tax and legal consequences.
Legal business entities are advantageous because they can:
· Protect your personal assets
· Protect you from being held personally liable for legal obligations
· Keep your finance and financial dealings private and
· Maximize your tax savings.
If you're operating a business and you want that business to be treated as your asset and/or you're continuing to grow that asset, the legal entity you select can:
· Protect the entity (i.e., your business)
· Protect your assets (i.e., your home and intellectual property such as trademarks, copyrights, patents and trade secrets).
The goal of asset protection is to minimize your risks and to help grow and maintain your asset base. The right legal entity will provide you with those benefits.
Under our U.S. tax laws, different structures exist for employees and corporations. Employees are taxed on the amounts they earn. Usually, taxes are withheld from employees' paychecks. Under the corporate tax structure, corporations deduct appropriate business deductions and pay taxes on whatever is left. Discuss with a tax professional to determine what deductions you may be entitled to.
ACTIVE OR PASSIVE INVESTING
Before you decide on the investment strategies you plan to follow, determine whether you want to be an active or passive investor. Active investors get directly involved in the investment. They may become general partners or take a role in the management of a business or particular venture. In contrast, a passive investor essentially only puts up money, sits back, lets others do the work and waits for profits to roll in.
YOUR MONEY RULES
We all have money rules, everyone of us! They dictate how we use credit cards, balance our checkbooks, pay off our lifestyle debt or pay ourselves first. They determine how we handle money, think about wealth and run our finances. Most of us didn't set our own money, we simply inherited or adopted them from others. Usually we integrated them without questioning because they came to us from people we loved and respected and because talking about money was taboo. If the concept of money rules is new to you, you may not have the requisite knowledge to make some of your rules non-negotiable at this time. However, you soon will if you continue to educate yourself on each of the investment strategies you're considering. If you stay focused on your goals and are flexible, your money rules will clearly evolve. Loral Langemeier, M.A. CPPC, empowers her clients to build wealth and achieve financial success. Combining her down-to-business candor with the personal accountability she has emerged as one of the most exciting business and motivational speakers. She is the author of the soon to be published book, Guerrilla Wealth, part of the best selling Jay Conrad Levinson Guerrilla Marketing series. For additional information: www.liveoutloud.com.
Hunting for Markets Over the Holidays
Chances are, you'll be busy over the next several weeks. Between
preparing for, celebrating, and unwinding from the holidays it may be
difficult to maintain y...
Free Anti Wrinkle Product - Staying Young is Much Easier Than It Looks
Going for botox, a chemical peel, laser treatments or injections may not always be the answer to younger looking skin. Sometimes it pays to take a look at some ...
Introduction to the The Enneagram as a Leadership Tool
The Enneagram is a fascinating tool of nine orientations that enables us to gain insight into the depths of our true potential. It seeks to provide insight int...
Creating Real Novel Characters - Go To The Dark Places
Too often, novelists protect their characters from acting too real. They feel uncomfortable getting into the issues that make their characters alive and vibrant...
Leave Your Buts Behind for Great Customer Service
Learn how leaving "but" out of your conversation to provide outstanding customer service.
Back to School for a Career Change
Q. I hate my job as a computer consultant. I am ready for a career change. The aptitude tests say I should be a recreation specialist. I like the idea but I dre...
Real Estate Investing By The Numbers
Learning about real estate investing is easy once you understand the four primary steps to success.
Personal Debt Reduction Practices
These debt reduction practices offer you a way to control your spending habits and achieve financial freedom.
How Yahoos Recent Facelift Can Mean More Traffic To Your Site
The type of surfer that would subscribe to your feed has pre-qualified themselves as a lead, with a certain level of understanding and interest in your topic, o...
The Disintermediation of Content
Are content brokers - publishers, distributors, and record companies - a thing of the past? In one word: disintermediation. The gradual removal of layers of...
More Complete Arthritis Supplement
People accept arthritic disease as a 'natural part of the aging process', but sometimes the pain from osteoarthritis, rheumatoid arthritis, and over 100 other f...
Polyphonic Ring Tones: Old-Fashioned?
The new wave in the world of mobile phone ringtones. The emerging trends.
The Quickly Changing Landscape Of The Job Market
The myth of working 20-30 years for the same company or even the same career are all but gone. So now what... Where is the future job market going?
What Is A Personal Trainer
Imagine stepping into the gym for the first time in your life. There are so many machines and gadgets. What do you do first? Is this one safe? Are you using it ...
Affiliate Marketing and MLM - Vive Le Difference
I have to start this particular article with this disclaimer. I have nothing against MLM (Multi-Level Marketing) or those who have found their niche within it, ...
Feng Shui Guidlines for Storage Spaces
Professional organizers and helpful-hint sources often recommend storage solutions such as shelves above doors and in corners, hooks on the backs of doors, and ...
What Is Reflexology?
An in-depth look at the ancient and effective practice of Reflexology for health and wellness.
Friendship Albums
Friendship albums are a fun craft for teens to display friends' photos and notes from friends.
How To Change Your Electric Guitar Strings
Many guitarists, especially beginners, struggle with changing electric guitar strings. But it really is a simple exercise. Here's a straightforward guide you ca...
Why You Must Use The Right Dumbbells For Your Workout
A dumbbell exercise program is effective with the right equipment These days, more so that in decades gone by, dumbbells are growing in popularity in fitness ce...
Pay-per-click – the Ultimate Tool to Boost Affiliate Sales
The old ways are not always the best ways. The traditional model of making money from affiliate products was simple. Create an interesting website geared to a ...
Depression Series (Part 2): My Antidepressant Doesn’t Work - What Can My Psychiatrist Do?
Maria has been increasingly depressed for the past few years. She has tried at least four newer antidepressants but so far, she doesn't seem to respond. Unable ...
Guidelines For Conducting A Good Meeting
Most people hate to attend meetings because they don't accomplish what they are set out to achieve. With this checklist, your carefully planned meeting will com...
Good Nutriton: Five Favorite Breakfasts on the Run
You can make breakfast a part of everyday life, easily and effortlessly.
|
Print this page