Friday, February 17, 2012

How to Get Rich - Don't Work for Your Government

Most of us have started our working lives by working for an employer. It is the easiest and most common way to start earning an income to pay for our everyday needs.

Unfortunately, our governments also realize that most individuals earn their income in this way. As a result, they have targeted their tax collection efforts squarely at the employed worker. Average workers can pay up to half of their income in taxes, therefore, almost half of the year they are in essence working for their government.

Your job as a current employee and future investor should be  to do whatever you can to reduce the effect your government's tax collection efforts has on your bottom line. Everything that is legal of course.

What Can Be Done

Don't get me wrong, I believe everyone should pay their fair share of taxes to support the societies we live in.
The problem is though, there is nothing fair about most government tax structures today. They tax the masses and the wealthy get off paying much less.

What can you do to turn the tables on your government ? Quite simple -  Become wealthy yourself !

Start earning more of your income from sources other than your employment income. This means you must learn to save a portion of your employment income and invest it in a way to attract less tax on your earnings.

Many forms of investments attract much less tax. Dividends from Corporations often have tax breaks built in for the investors. Capital Gains ( if you sell something for more than you pay for it ) are often taxed at a much lower rate if not exempt altogether.

Get to know the different tax rates on the types of income in your area. Once you know this, start developing a plan to take advantage of the preferred rates as soon as possible. Now you can start working fewer days for your government and more days for yourself.

Not So Simple ?

I realize that what I have said may sound too simple.However, please remember it is the concept that is simple, the action plan for the concept may not be so simple. It will all depend on where it is you are starting from.

Once you have a solid financial foundation (as mentioned in a previous posting ) you will be in a much better position to attack your tax position and start working more for yourself and less for your government.

No Magic Pill

There is no magic pill for an easy way to become wealthy. There are, however, many techniques and strategies that can make the road to wealth creation easier and faster. The concept of working fewer days for your government is one of those strategies that combined with others will accelerate your growth.

A simple rule of thumb to take with you from this concept. Work More For Yourself and Work Less For Your Government. You owe it to yourself, your family and your future generations. They will all benefit.

As always, I welcome your comments and suggestions for future postings.

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