One of the most common scenarios I come across is the struggle many people have to create permanent wealth.  And most times it is not for lack of hard work.  When I dig into the situation, I find that many of the people fit into the following:

– They spend most of their time at work.

– They go to work in hopes they can “get ahead.”

– They spend 8, 10, or even 12 hours each day working hard for money.

– They spent anywhere from 12 to 20 years or more in school preparing for their profession.

And yet, the bottom line is they are not ahead at all.  

They may have a few dollars set aside for a rainy day, and have an investment here and there, but they aren’t creating any permanent wealth or making significant strides towards their dreams …even though they are working hard enough that they deserve to create some wealth.

Why Everyone Needs a Wealth Strategy
A wealth strategy puts you on the right path to building wealth – one that creates permanent wealth.  This is the purpose of a wealth strategy – it connects the action needed today in order to achieve the desired results in the future.  

Wealth creation is not solely about hard work. It’s also a matter of knowing how to make money. A wealth strategy is heavily focused on increasing your knowledge about how to make money in assets that will work for you.

What Action Will You Take?
Taking action is great, but it needs to be the right action – otherwise the results will be disappointing.  The wrong action is what creates the scenario shared at the beginning.

If you did something every day that positively impacted your wealth, how much wealth could you build in the next 30 days? In the next 60 days? In the next year?

Set aside an hour to identify the action you should take.  And if you aren’t sure what action you should take, then your first action should be to develop your wealth strategy.

Even if you are not ready to retire yet, it’s never too early to start thinking about your retirement years. Here are some simple ways you can start making strides toward preparing for retirement, even if it is far down the road.

1. Don’t rely solely on Social Security. Since social security won’t be sufficient to pay for life’s necessities – look for other options (investing) to help cover essential costs.  The present day retirees 2 greatest financial concerns are covering health care costs and running out of money before running out of breath.

2. Control spending.  If you’re living beyond your means before retiring, you are likely to continue in retirement until you don’t have enough to cover your needs.

3. Get a handle on procrastination and inconsistency. These are two of the biggest enemies of financial success.  Get started saving today and do it on a consistent basis.  Use payroll deductions and programmed bank withdrawals.  Investing whether the market is up or down is important.

4. Plan for healthcare. The Employee Benefit Research Institute estimates that the average couple can expect to spend $261,000 of their own money to achieve a 90% certainty of meeting their health care needs.  In addition to Medicare, have a supplemental policy and long term care might be a good idea.  Insurance may seem expensive, but not having it could be more expensive.

If you’re not planning on retiring for many years to come, you don’t have to have every retirement detail in place yet, but it’s never too early to start thinking about some of these issues and beginning to make some initial plans.

Practice 1: View every day as an opportunity to reduce your taxes

When you are making money, there is an opportunity to reduce your taxes. When you are spending money, there is an opportunity to reduce your taxes. When you have a new investment, there is an opportunity to reduce your taxes. When you make a new deal for your business, whether it’s with a vendor, a customer or an employee, there is an opportunity to reduce your taxes.

Making it a habit to look at every day as an opportunity to reduce your taxes will create the right habits to actually reduce your taxes.

Practice 2: Don’t put off until tomorrow what you can do today.

It is crazy to put off anything you can do today to reduce your taxes. Every day you delay your tax planning represents money you are unnecessarily giving to the government that you could be putting in your pocket.

Do something today to help your tax strategy!

For example, spend 15 minutes scanning and filing your receipts. Those who stay organized throughout the year are better able to capture all of their expenses, whereas those who only do it once a year usually miss several expenses.

Practice 3: Track where your cash goes. 

Little expenses can add up to big tax savings. Track where your cash goes. Cash is one of the biggest offenders when it comes to missed deductions – business lunches, tips, other incidentals. It’s easy to spend cash, and then forget where it was spent. This means the deduction gets missed.

A few dollars here and there adds up. Let’s say a person spends $20 cash every day on business expenses. That’s over $7,000 a year in missed expenses that can result in an overpayment of taxes of over $2,500.

Practice 4: Stick to your tax strategy.

Most tax advice is geared towards those who are not business owners or investors which is why you want to make sure you stick to your tax strategy.

Business owners and investors have much better opportunities available to them in the tax law to reduce their taxes. Often times, the tax saving opportunities available to business owners and investors create permanent tax savings (this means the tax is eliminated) while the tax saving opportunities available to the general population create temporary tax savings (this means the tax is just deferred until a later year).

Practice 5: Stick to your wealth strategy.

I regularly have people share with me that they bought or invested in something for tax benefits and then ask me if that was a good idea. I always answer the same way.  If it is part of your wealth strategy, yes!  If you have not considered how it fits in your wealth tax strategy yet, you definitely want to do that first.
 If you want to learn more about how to take advantage of these tax strategies; sign up on our email list or call us for an appointment to get started today

Clients have been have been asking for investment services! We heard you.

Vanderbilt CPA Group now has an independent professional in our office location who can provide these services. It is a natural fit as many investment choices often are related to tax and accounting matters. Many of you already know Bill Kossen from our office; he will now be providing investment services to clients.

Transamerica Financial Advisor’s Registered Representative, William R. Kossen, welcomes the opportunity to review/discuss investment opportunities that make sense to you. “I enjoy helping my clients prepare for the future by getting to know them and their needs. I enjoy working with Vanderbilt CPA Group because they work hard to take care of their clients’ complete financial needs.”

Request your free investment (portfolio) review today as an annual financial check-up. Are your retirement investments doing as you expected? It could be costing you valuable retirement income.

Bill Kossen is a Registered Representative and Investment Advisor with, and Securities offered through Transamerica Financial Advisors, Inc. (TFA) member FINRA, SIPC. Non-securities products and services are not offered through TFA. Vanderbilt CPA Group is not affiliated with TFA. Neither TFA nor its representatives provide tax or accounting advice. Persons who provide such advice do so in a capacity other than as a representative of TFA.

To schedule an appointment, contact William R. Kossen or Janice S. Vanderbilt at 616.954.9254