Hello, hello everyone, you are very lucky to see today's show. Because after reading this content, you will know how to keep more money than before. If you search the Web for this kind of information, you'll pop up a lot of suggestions that will make you the most money with your might. But that's not what you're looking for, right? Albert Einstein once said that the hardest thing for me to understand in the world is the income tax, and the rich hire very expensive accountants to help them minimize the taxes they pay. As long as you immerse yourself in research, carefully understand this field, and continue to accumulate experience and skills, you can accelerate the growth of your wealth. So grab your little notebook and start taking notes. Sooner or later, this knowledge will come in handy on your way to riches. Of course, this is not a financial advice, but we have observed the rich over the years and found that they will use the tools to increase their wealth. This information is something we have summed up and is very useful to you. So pay attention to listening, if you like our content, remember to like, follow me. 15 ways to make the taxes paid by the rich minuscule, let's get started now.
First, it's all about investing, and unless there's a special purpose, the rich don't sit back with a lot of cash. From a tax perspective, the Golden Rule is that profits used for reinvestment are not taxed. If your company is expected to make a profit of $5 million. Before the end of the fiscal year, you can reinvest that $5 million in the company to further grow the company. Then you don't have to pay taxes on the 5 million, which is how to make the company grow quickly. As the owner of this business, your net worth will continue to soar, and you will have to pay almost no taxes.
Second, all your food, clothing, housing, and travel are owned by the company. The second golden rule for optimizing taxation is to deduct everything that can be deducted. The principle of this is that as long as it is what the business needs to run, the money spent on these things is not taxed. Do you want to buy yourself a new car? The company also needs a car, so buy it in the name of the company with the company's assets. That way you can still have the right to use it because it's what you need to run your business. Below we list some of the things that the wealthy will deduct from their taxes. For example, all the technology products, such as hardware and software, these laptops, smart phones, all kinds of miscellaneous items, they are all business needs of business, travel, hotels and air tickets are the home office and equipment required for business travel. For example, the cost of online health insurance, even eating out is a fee that can be reduced. The more items you can deduct, the less income you'll have to pay taxes.
Third, move to areas where taxes are preferential or even non-taxable. People often underestimate moving to areas with tax incentives. It has an impact on your life, but it's been around for a long time, you can move to Monaco, the Cayman Islands or the Bahamas to become a resident there. Because these countries don't have income tax, they won't require you to pay taxes on the money you earn. But there's also the problem, and that's how expensive it is to move there. This is why the rich gain a unique advantage in life. The cost of living in Monaco is horribly high, but that doesn't stop the enthusiasm of the rich.
Fourth, overseasly registered companies Facebook, Google, and Apple do just that. Because Ireland's tax policies for businesses are very friendly, they all set up companies there that own intellectual property, and U.S. companies need to pay annual licensing fees to Irish companies to continue to develop and sell products in the United States. This creates a fee for these U.S. companies that can be legally deducted. Through this strategy, they withdrew the funds from the United States and transferred them to Ireland. In Ireland, they end up paying only 1% tax. If you optimize it further, you can even pay a 1% tax. If you're in a low-income tax country, you can create a local company to serve and invoice your U.S. subsidiary. This minimizes the tax burden in the United States, where mega companies like tech giants would rather pay fines than pay their taxes in full. If you think about it, isn't a fine exactly the tax you pay for doing something wrong? Taxes, on the other hand, are fines that have to be paid for doing the right thing.
Fifth, the fifth rule of the charitable donation tax money donated to charity is tax-free. That's why every rich person runs some type of fund. But of course, they will always argue that the fund is run because the state simply cannot manage money, and countless lessons have proved this. So instead of giving all the money to the government and letting them do whatever they want, it's better to create a charitable fund yourself so that you can make sure that your money can have a positive impact on society. But interestingly, even those tax-exempt funds will also have deductible fees, and their operation must have a certain material basis. You can even donate land vehicles and other types of assets to charitable funds you own, which can also count as charitable donations. And as the head of the charity, you can still use the vehicle that has been nominally donated.
Sixth, they do not receive salaries, but share capital. Like the bios said, pay me with stocks. There are 2 reasons for this, one of which is that over time, the shares will continue to increase in value. Second, as long as you don't sell your shares, you don't have to pay taxes. That's the secret of Elon Musk getting rich quickly. You may not believe it, Musk's annual salary is between zero dollars and 23,000 US dollars. Yes, this is the money yilong earns every year as Tesla CEO, and based on the company's performance, Yilong will also get newly issued shares. As we all know, Tesla is a public company, and with the rapid development of the company, their net asset value is also exploding. That's how Yilong became the richest man in the world.
Seventh, buy art. It's a secret that only the rich will know. The art trade is the last large unregulated market. If you buy a work of art, the money spent will be counted as a fee. As we said earlier, most of the expenses can be deducted from taxable income. Let's say you made $1 million this year, and you decide to spend that money on a $1 million painting. Because your expenses are equal to your income, your taxable income is zero yuan. Three years on, the value of the painting you own has now risen to 6 million. That's what professional appraisers say anyway. But instead of selling it, you decide to donate it to a museum, or better yet, to your art foundation, which means you get a $6 million tax exemption. If you still make $1 million a year, you're saving an additional $5 million in tax-free income, all of which is legal. And if you want, you can do another round. Let's say you decide to sell the painting for $6 million, you make $5 million in profit. That's usually taxable, right? But once again the government sided with the super-rich, and once helped. If you take all this money you get from selling paintings, all $6 million goes to buy art. Then all the gains made in this transaction do not need to pay any taxes, which is why the rich are addicted to buying art.
Eighth, multiple nationalities without a fixed place of residence are probably the most incomprehensible. But when it comes to paying taxes, people around the world have successfully implemented this approach. In your country of residence, in your home country, you have to pay taxes. But if you don't have the so-called motherland, although the assets of the rich people are all over the world, many, many super-rich people choose not to have the so-called motherland. When various agencies ask them to provide proof of address, they provide proof of address for properties they own in Thailand or not only. Because of the language barrier, the government will not scrutinize the matter, and it will pass it by, and will not ask them to provide further information. Still others will buy a large yacht and use it as their main residence. Today you ran to international waters on the coast of Monaco for the second year, so that you still don't have to pay taxes. Of course, although we recommend that you can obtain multiple nationalities at the same time. This way you can enjoy the benefits of a multinational passport. But we also believe that complete disengagement from all state networks is not a long-term solution.
Ninth, give the money out, do you know that the gifts you give to others do not have to pay taxes? Isn't that crazy? Although there is a ceiling on the value of this gift, that is, $15,000. If the value of the gift is less than $15,000, you don't need to file it with the IRS, which is directly classified as a tax exemption. You might think that's cool. But the show is about the people who are really rich and how they optimize their taxable income to get the most out of the $15,000. It's barely enough to buy a Rolex, and it's true, $15,000 alone may not sound like a lot, but there's still a lot of room for maneuver. As of 2021, in the United States, lifetime gift relief caps $11.7 million as long as each gift is worth less than $15,000. The $11.7 million tax exemption brings a lot of money, and you can buy a lot of Rolex.
Tenth, hold cryptocurrencies, which are changing the whole game of wealth transfer and wealth security. You can now even put $1 billion in a small thing, put it in your pocket, and fly it to Singapore, which is amazing. Virtual currencies such as Bitcoin and Ethereum are already heavily regulated, and many steps have been taken around the world to ensure their transparency. By binding the wallet where these virtual currencies are stored to individuals, we ensure that everyone is paying their due money. By the way, in most countries the profits from the sale of cryptocurrencies are only taxed by 10%. Given the continued appreciation of virtual currencies in the sector, this is still an investment with a higher rate of return than many other assets.
Eleventh, you don't have money, but you have assets that you can borrow money from. Let's talk about why most rich people are super rich but don't have cash. If you're going to withdraw cash from your business, you'll need to pay taxes on that money. As a result, the rich choose never to withdraw their money. It's just held in the form of stocks and assets, but there will always be cases where cash needs to be used, and that's when your relationship with the bank comes into play. Rich people will walk into the bank and say, you see I have a lot of things, like cars, assets, stocks, I can get cash when necessary. So please grant me a loan and the bank will look at their portfolio and make sure that the rich people get it right away when they need it. Technically, they just get a sum of money through a loan, and that money isn't their own, so they don't have to pay taxes for it. As long as it can be returned in time. If these were operated in the name of the company, not in the name of the individual, this cooperative and mutually beneficial relationship could last a long time.
Twelfth, filing for bankruptcy, filing for bankruptcy is an expensive, tedious and complicated job. But if you're super-rich and you know how to overcome these difficulties, it's a different story, and the process is like this, assuming you're a pretty good lawyer with an annual salary of $250,000, you own a $1 million house and manage to save another $1 million. You're going to do business, so you decide to spend $10 million on an office building. Because office buildings make you a lot of money, you go to the bank and make your $1 million down payment, and then after getting a $9 million loan, you buy an office building. A year later, the pandemic struck, all your tenants moved out, and you owed the bank $9 million. To make matters worse, the building you bought is now worth only $5 million because it's a seller's market and no one wants to buy an office building. Since the office building is held in the name of a company, our lawyers can file for bankruptcy now. Although the office building could not be saved, the iron would be taken away by the bank, and it would be difficult for him to cooperate with the bank. But at least the bankruptcy law wouldn't let the bank confiscate his house. Or take a cut from his salary. There is a difference between being poor and going bankrupt, and the rich can go bankrupt, which means that in theory their net worth may be zero or even negative, but they will never get poor. And if you don't need a bank, you can also pay for this financial loss in full cash, and you can also get tax relief. This means that until you reach the amount of money you lose, you won't have to pay taxes on your hands for many years to come.
Thirteenth, use your yacht as your second home. There is an interesting phenomenon about taxes, that is, the government likes homeowners the most. For those rich people who like to splurge, the government hates it to the teeth and hates that it cannot tax these people who live every day in Versailles. In fact, the topic of taxing the wealthy has spread across the Internet. So how do the rich cope? They use yachts as their second home to get better tax rates. At the end of the day, there's nothing wrong with saying that. They do use the yacht as a holiday home when they go to Mykonos Duca in the summer, and as long as there is a place to sleep on the ship, cooking and toilets, the IRS can use the ship as a second home. The same is true for motorhomes, but how many super-rich people buy a home today?
Fourteenth, use trusts to evade inheritance taxes. There is an interesting saying among the rich that a person does not know that he should be grateful until he starts paying taxes for it. Some troubles are only worthy of the rich and the oily. For example, if you are rich, when you die, the government will impose a tax of up to 45% on the wealth you have bequeathed to your children, which is called inheritance tax.
By the way. There is also an important message here, in the United States worth more than $11.7 million, is considered rich, below this figure will not be charged inheritance tax. Or relatively speaking, it's a much lower $11.7 million. It can be a lot of money for the average person. But we live in the world of billionaires, and in our lifetimes, we even have the opportunity to see trillionaires emerge, and rich people abound. It is even said that under the influence of inflation, everyone will eventually become a millionaire. So how can the wealthy get their inheritance offloaded by having to pay the hefty estate taxes? They will use trusts, and if you put assets into trusts, they will no longer be counted as your assets as long as certain conditions are met. So it doesn't count as something you passed on to your child. Once the property becomes an asset kept by the trust, it does not belong to anyone's estate and can no longer be taxed on it.
It also prevents you from putting all your wealth in your child's name. That way, if they want to, they can easily splurge. A trust guarantees that while you are alive, you still have control of your assets. You can also set up smart contract rules that allow your child to gradually acquire assets in the trust under certain conditions. For example, when they turn 25 or after college.
Fifteenth, depreciated assets on the books are greater than cash income. Accounting is the language of money. So if you want to get rich, you'd better learn how to use it, or be able to understand it. Simply put, depreciation is a discount that enables businesses to write off money from their purchase of equipment, such as cars, machinery, etc. It is spread throughout the life cycle of an investment, and the reason for the diversifying deduction of asset costs is to enable companies to replace assets in a timely manner at the end of their life cycle. Now suppose you spent $10 million on a factory that you intend to use to make protective face shields over the next decade.
From an accounting perspective, the value of the plant would be depreciated by $1 million per year. If you don't make more than $1 million a year from your mask, you won't have any remaining profits to pay taxes on. Equipment, vehicles, and even offices are depreciable, so you can constantly reduce the taxes you have to pay. If people know how to optimize their money, their businesses will grow faster, hire more people, and create better products. You don't have to pay more taxes than is required by law. The purpose of taxation is to help the poor, but since everything is privatized, everything is constantly optimized for the service of profit. He didn't function the way he was supposed to. We have a lot of audiences from all over the world, so we'd love to know what the tax rate is in your country. Let us know in the comments and let's discuss it. Since everyone is with us, at the end, now give you a little reward. The reason for the excessive taxation is inefficiency.
In reality, everyone wants to pay their share of what they owe. Fairness is the relentless pursuit of people. issue. A change in the management of these taxes and the terms of how much people should pay. If the government's taxes are not taken from the people, for the people, you will not be willing to pay taxes, which is one of the reasons why the Swiss people have no opinion on the high taxes they pay. Because the welfare education provided by the government is free and has quality assurance. Medical care is free, advanced equipment, beautiful environment, people's life is happy. By contrast, the way corrupt governments spend money makes people feel devastated and feel like they've been played, and indeed that's the case. Now that it's 2022 and the technology is so cool, why can't we decide where our money is going to be spent through on-screen apps? Of course, some of it needs to be used for military security and health care, but where is the bulk of it used? Why you can't choose to take your own profile.
Tilt to schools in your neighborhood, or fix roads in your city. So we believe that blockchain will have a huge impact on society, eliminating the need for middlemen to make decisions on your behalf, how much money your government is wasting, and how many civil servants are doing meaningless work. What we need is smart leadership and transparent technology, not politicians and governments. Well, that's the end of our show today, thanks for your liking and attention, and we'll see you next time.