“The avoidance of taxes is the only intellectual pursuit that carries any reward”– John Maynard Keynes, nobel prize winning economics.
There are numerous self-help, motivational and inspirational programs, such as “The
Secret”, that promise to change many people’s lives. Many of these programs attract thousands of participants yet almost none of these programs address the importance of tax planning.
A few years ago, some author noted that about 65% of personal bankruptcies could be eliminated if these same folks just earned an extra $300 per month. Maybe today that number would be a bit higher such as $500 per month.
If everyone understood what my Tax Strategies program or my book “Lower Your Taxes: Big Time” could do for them with a valid home based business on the side, most personal bankruptcies in the US could potentially be eliminated! How’s that for changing lives.
I should note that I am NOT against people paying taxes. I am not some tax nut. I am only against overpaying taxes above what taxpayers legally may owe.
Here are some interesting statistics that I found. For the average american:
30-45% of their gross income goes to taxes (note: Tax rates are scheduled to increase in 2011)
25% of their gross income goes to housing and utilities
20% of their gross income goes to food
10% of their gross income goes to transportation
Thus, many Americans only have 15% of their gross income for everything else; such as debts, education, insurance, gifts, entertainment, clothing, etc. If they want to save money, they have two options: increase their income or find expenditures that they can cut. Taxes, being the biggest bite on gross income, would seem to be the most logical choice to try to reduce.
Taxes are the biggest expenses for most Americans. In fact, it may surprise you to learn that taxes almost exceed what we pay for food, clothing, lodging and transportation combined! However, few do anything to try and avoid overpaying their taxes, or try to find legal ways to reduce this huge bite, which puts them in severe debt and forces many people to borrow even more money for college costs and weddings. Understanding tax planning can get you out of debt much quicker than you ever realized. It could provide a savings account for your kids wedding and college. In short: it could change the lives of most Americans. If you go to the calculator portion of my web site Calculators and plug in what an extra $500 per month would be worth to you over a 40 year lifetime of investments with a mutual fund, you would find that it would be worth (I am not kidding) between $900,000 and $1,600,000 extra at retirement depending on your return. Thus, my material, used properly, can make the average person a millionaire at retirement…… Think about it.
In short, I can’t help remembering the famous quote by Arthur Godfrey who said, “I am proud of being an American and paying taxes. However, I can be just as proud at half the price.”