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The two most significant wealth thieves a person will encounter are tax deductions and lawsuits. Taxes work against you by chipping away at your wealth. These incorporate federal earnings taxes (deducting up to 39% of your revenue), state taxes (deducting up to 9.6%), and self employment or social safety (more than 15.five %.). The typical American is paying 42-55% in taxes. Ironically, the wealthiest men and women in the U.S. are paying only single digits taxes. Rest assured, simply because there is some thing you can do about this, and it wont cost you the $500/hr that these wealthy folks are paying for tax tips from their specialists.

Subsequent, lawsuits are the other evil. This is not the slow reduction of your wealth as with taxes. It is the sudden confiscation of the income you worked tough to construct. You can literally fall from the top of the totem pole to the bottom of the barrel overnight. I believe there are no winners in lawsuits because even winning a lawsuit takes up time and income that will set you back. Once once more, you can protect oneself by understanding how to structure yourself appropriately. You can "bullet-proof" your assets. You can even stay away from lawsuits all with each other.

Essential to understanding these tactics is differentiating the ideas of asset and liability. Ask yourself the following: Is a actual estate investment an asset or a liability? You could be thinking, It generates income and gives equity therefore, it has to be an asset.

Nevertheless, the answer is much more complex. You must look at how you hold title to that property. If you own it incorrectly and are not properly structured, you could be placing your self at risk. If you have your property, your auto, your bank accounts all lumped with each other, someone can take them all away in a single sweep. Consequently, you should learn how entity structure. roger