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Book Summary - Loop Holes of the Rich - Written by Diane Kennedy and Robert Kiyosaki

January 18, 2012 | Comments: 0 | Views: 275

This book will help you keep more of your money. As you start generating cash, you need to protect it and shelter it legally. Statistics show that 34 cents of every dollar goes toward interest and 30 cents of every dollar goes toward taxes. These are hefty premiums to pay for success. It does not have to be that way.

Why is this important to me? This book is a great resource if you have decided to go into business yourself. You need to understand that there are risks that are EASILY mitigated if you take the time and set things up properly. Taxes can cost you up to 50% of your money. As you all know, our government agencies are efficient machines and spend our money wisely - NOT! One thing the government is smart about is setting up incentives for businesses. They do this because businesses create value and jobs. The key here is moving from "Earn-tax-spend" to "earn-spend-tax". This subtle difference makes a huge difference over time.

Lawsuits are a nightmare. Wealthy people get a bad rap sometimes but it is the bottom feeders that really need to be punished. It takes years to build up a reputation and ANYBODY can file a lawsuit and destroy it even if they are lying. There are more lawyers in law school than there are lawyers. These people need to make money somehow and this is why we are the most litigious country in the world.

This book is packed with a ton of information. For the sake of time, I will highlight some of the things that have helped me in my business career. Diane has worked with Robert Kiyosaki in the past as a Rich Dad Advisor. You will see that this book falls under Team and legal areas of the BI triangle.

1. Team - You need to have a good team. When you start making money in business do NOT trip over pennies and hire incompetent advisors. Remember that you get what you pay for. You need to have a good CPA, Lawyer and coach. One bad contract can cost you your business.

2. Business Entity - There are several types of business entitles but the one you do NOT want is a sole proprietor. Depending on your circumstances, you can use LLC's for real-estate, S Corporations for businesses and C Corporations for businesses. The C Corporation is unique in that the taxes do NOT flow through to you and you can setup off year ends. This timing function is critical for tax planning strategies. As you grow, you can use multiple entities to save money and create protection.

3. Asset Protection - "Call Mr. Lawyer today if you stubbed your toe!" You see these commercials all the time. The goal is to have you call. The lawyer on the phone will ask you questions and perhaps do some really quick searches based on the claim. If they run into road blocks then they will most likely not take the BS case. But if your entity structure is not setup correctly then they will proceed. Unfortunately there are people who have entitlement mentalities and if they can get something for nothing, they will. If you are a sole proprietor and own your real-estate building and your business like that then you are in trouble. If I slip and fall on your property, then I have a great chance of being a new business and real-estate owner and you get to go to the poor house.

Loop Holes of the Rich is an excellent resource and will help you setup your structures correctly. If you are meeting with advisors then I suggest you read this book first to get educated. The best way to flush out issues is to ask relevant questions. Diane's book will help you do that.

I hope you have found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days.

One thing you can take away from this book is don't be a sole proprietor. This is a horrible entity and you need to change it if you are serious about business and your financial future.

Joe Mosed invites you to subscribe to http://www.successprogress.com to receive free video book summaries. Our vision at Success Progress is to provide relevant & meaningful content to our user community. To view the video summary of this article please visit http://www.youtube.com/successprogress

(c) Copyright - Joe Mosed / Success Progress All Rights Reserved Worldwide.

Source: EzineArticles
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