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If you want to generate passive income through investing, one crucial factor to consider is how much you’re required to pay in taxes.
“Taxes are your largest single expense.” – Robert Kiyosaki
Here’s something you might not know about tax free wealth when it comes to investing – the taxes you pay vary from one asset class to another. In this race, multifamily is the clear winner.
There are tax benefits for investing in apartment buildings.
The government actually encourages Americans to start businesses and invest in real estate. Entrepreneurs and Investors get the breaks because business owners create jobs, and real estate investors create housing.
For real estate investors, depreciation allows you to deduct the costs of buying and improving a property from your taxes, lowering your taxable income. And multifamily investors get the sweetest deal, because we are allowed to accelerate depreciation, itemizing each component of our buildings separately via a cost segregation analysis.
It goes without saying, the less you pay in taxes, the more money you have. Wealthy people generate passive income. This income, which is the result of cash-flowing assets, is taxed less.
3 Benefits of Tax Free Wealth
Stop trading your time for money.
It really is that simple. The more tax-free income you have, the more freedom you have. You can unchain yourself from sitting at a desk from 9-5 every day and work in a way that is more fulfilling and has a greater return.
Do more of what you love.
Freedom means more time to spend doing the things you love to do with the people you love. Tax free wealth allows you to channel your energy toward your passions and values. You can start to make a difference not only in your life, but in the lives of other people.
Save more for the future.
When you have the income to serve your basic needs, you can put your attention toward the future. The money you save compounds to substantial wealth over time, so tax free income allows you to build generational wealth.
You’re not only thinking about the present, you're planning for the potential of the future. You have the freedom to set goals for the years to come.
Why NOW is the time to think about your wealth
These are uncertain times. As we all ride the sudden and unexpected economic tides, your tax free income protects you against market volatility. Instead of remaining vulnerable to the whims of the stock market, you can put your money to work for you. By taking control of your financial future – you’re in control of your money, not the other way around.
The tax code is written to help investors legally reduce their tax burden. If you’re not taking advantage of tax breaks, you’re literally taking money from yourself, your family, and your financial future.
