How to Escape the Rat Race
Page 12
The United States has 5% of the world’s population and:
· 70% of the world’s attorneys 94% of world’s lawsuits
· 80,000 law school graduates annually 100,000,000 cases per year a new lawsuit filed every 30 seconds Each American bears a 1 in 3 chance of being sued
· More law students than lawyers
With that in mind, it is suspect that asset protection is not a big part of the education of the middle class, while the wealthy have been using asset protection strategies since the early 1900s and before.
When someone dies and has a few assets that they thought were going to be given to their loved ones, the loved ones are in for a shock if the proper steps have not been taken to protect the assets. For instance, the average time to probate an estate is about fifteen months; because lawyers or trustees get involved and sometimes draw the process out, the average loss to an estate is 30%. This means that if someone left $100,000 to split between four people, and did not take proper asset protection steps, each heir will get only $17,500 instead of $25,000, which would make a difference for anyone in the middle class! The probate business generates $25 billion annually, but as we educate ourselves on proper asset protection, that amount will shrink significantly.
Have you ever wondered why the Rockefeller and Carnegie families have had land and other wealth for hundreds of years, while your family members die and leave bills? Have you ever wondered why the Kennedys never lose a law suit?
Wealthy people use business structures (trusts, limited liability companies, foundations, and international business corporations) to protect their assets from lawsuits, divorce, and other factors that may interfere with the perpetuity of their family legacies. Although that discussion is beyond the scope of this book, suffice it to say that when you get out of debt and start to invest, you will want to research these important ways to keep what you earn, protect it, and make it grow.
How to have your money work for you so that you don’t have to work for money.
· We are not taught to become knowledgeable investors because many of the wealthy want to keep these secrets for themselves. Consequently, these strategies are rarely taught, even at the university level.
· We are not taught to create passive income streams, one of the main things we need to learn in order to have our money earn money. We can get involved in businesses that will generate passive income streams and invest in profitable ventures. We will discuss this area shortly. We are not taught to create profitable systems or follow profitable systems that are already in place. A profitable system is one which, once set up, requires little oversight and maintenance, so that you can go on vacation and the system will continue to work in your absence.
A good example of a profitable system is the restaurant franchise system. When you purchase a Chick-fil-A franchise, you receive unchangeable rules and regulations.
Their system has proven to be profitable; even if you take a month long sabbatical, you will still expect to earn profits in your absence. This scenario is not so when you have a job, or when you work for yourself.
Once we study and find the profitable systems that suit our personalities, skills, time, and lifestyles we will be another step closer to escaping the rat race.
Proper Business Structuring
Managing a business and having a job are truly like night and day. When a person has a job or is self-employed (1099), he/she will be expected to pay lots of taxes. So, that cycle goes like this:
EARN — TAX — SPEND.
However, when a small business or corporation makes money there is a different outcome. They spend the money first, on ordinary and necessary business expenses, and anything left over is taxed. For example, a corporation will have expenses such as the company car, company travel, and paying the manager’s mother to answer the phone for extra income.
Businesses have been utilizing these strategies for decades, while the middle class pays out everything and is broke at the end of each month. As you start your business, you must first structure it so that you own nothing and control everything as the Rockefellers do, and so that you know how to add other structures (Limited Liability Companies, trusts, foundations, and international business corporations), as we discussed earlier. As your businesses grow and you utilize these complex business structures, you will be in the winner’s circle.
Diversification for Safety
Once or twice a year, I used to attend international conferences where wealthy people do their continuing education. Wealthy people learn from other wealthy people, and now middle class people are beginning to attend these wealth symposiums and glean from them.
One speaker gave a good presentation on diversification for safety. In our previous section, we talked about these stair steps to wealth: insurance and assurance, emergency funds, and capital guaranteed investments. When you become wealthy, you can invest in the speculative investments that are high yield but also high risk. This gentleman gave us the chart that you see below:
Silver & Gold—30%
Cash—10%
Low Yield Investments—25%
Profitable Real Estate—25%
(Maybe in other countries)
High Yield Investments—10%
(Oil, Water, Agriculture)
He became wealthy by diversifying his assets in the manner shown above. If you notice, he has very little in cash, because the US dollar is steadily losing its value all over the world.
In a global economy, we need to think about wealth from a global prospective and make sure we have access to silver, gold, and other currencies. Low yield investments and real estate were his next most important investments, and the high yield investments were last; tied with cash. This worked for him and many others, and it can work for you as you become disciplined and start to implement the strategy.
High Yield Investments
There are many high yield investments out there that do pay off. Just because the middle class is not told about them, or just because they always hear about the investments that go belly up does not mean that the high yield market is not making other people millions of dollars each year. Some of these investments earn 100% per year; however, I hope that you follow the strategies mentioned earlier and walk, don’t run when your goal is to invest. If you take it slow and safe, the safe investments will pay off and you will eventually have extra money to try some of the high yield investments.
So what specifics can I give you on asset protection and investing?
I wished I could, but because I am not licensed I can’t go into detail about the wonderful investment opportunities that I have been privy to examine. If you contact me after you complete this book, I will be happy to share information with you about places to explore asset protection, investing, and international real estate.
So, How Do The Wealthy Stay Wealthy?
· They invest in gold, silver and other precious metals.
· They invest in foreign exchange markets.
· They buy prime real estate in profitable U.S. markets.
· They buy international real estate.
· They start international Internet businesses.
· They invest in emerging technology off-shore.
· They broker goods and services worldwide.
· They invest in their health (eat well, alternative medicine).
· They take advantage of exclusive SEC investments.
· They invest in oil and gasoline, solar, and wind power.
· They invest in water wells and water desalination.
· They invest in agricultural land.
· They invest in businesses with high profit potential.
CONCLUSION
We’ve reached the end of the book, so in closing, I will reveal to you your recipe for financial freedom:
Your Recipe for Financial Freedom
· Eliminate Debt
· Reduce Taxes
· Reduce Major Expenses Like Your Mortgage
· Crea
te Wealth through International and Domestic Investments
· Protect Your Assets through Proper Structuring
· Increase Your Income to Match Your Goals
· Sustain Your Commitment to Personal Growth
I created this book because I see the middle class suffering, and I always have a problem with injustice. It is not fair for the wealthy to keep the secrets to themselves and leave scraps for the middle class. Now the middle class can access the same wealth strategies. If you are disciplined, patient, and willing to learn and implement the strategies discussed in this book, you can be on your way up the off ramp and out of the rat race!
Two Possible Futures
Here are two scenarios for you to ponder:
The Future of the General Population
James and Beverly were finally on their way to achieve their life goals. Their new home was beautiful; it costs them $360,000 but was well worth it. Though James would have to work two jobs and Beverly would have to keep her full-time job, they were finally part of the “in crowd.” Beverly would pay the BMW lease, James would pay the Lexus note, and they would split the $3,700 per month mortgage payment. They had to accept a higher interest rate because they did not have perfect credit.
After 7 months in the house, James was downsized from his information technology job. His entire department was eliminated and the jobs were contracted out to a company in India. James set out to get another job, but he couldn’t find one that would pay what he was making on his full time job. He still had his part-time job, but after searching for six months, he ended up having to take a full time job making half of what his IT job paid.
James kept looking for that higher paying job on the weekends because there was no time to look for a job during the week. The jobs he had did not allow any off days because there were plenty of other people waiting in line to take those jobs if anyone wanted “special privileges.”
James and Beverly borrowed from friends and relatives, hoping that he would soon find a better paying full-time job, but weeks turned into months and there was still no job paying the amount needed to keep the finances afloat.
The BMW went back first, as they could not make the payments any longer; Beverly had to take a bus and train to work. James couldn’t do without a car because he had to get back and forth between two jobs. There was a steep penalty for turning the BMW in before the lease was up, which the couple borrowed money to pay.
Even after turning in the BMW, all the bills and expenses were much more than the money they brought in from all three jobs. As this crisis escalated, the couple noticed for the first time how much income taxes they paid, and realized that over 30% of their hard earned resources were taken before it hit their hands!
Then the couple’s finances collapsed. One year from James’ job loss, the house was in foreclosure.
How many people do you know who are just like this couple? How many of them will be able to overcome that situation? They are the typical American general public, in debt up to their ears with little or nothing in savings. The all mighty VISA is used for any unplanned situations, with little thought of the future.
No economy or individual can absorb forever the amount of debt that our economy is experiencing. The country is deeper in debt than ever, yet we continue to go on as if everything is A OKAY.
The government’s multi-trillion dollar debt is set, unless Congress takes drastic measures (not happening). The congressmen making the decisions are wealthy for life; they have six figure salaries, hefty retirement packages, and health care plans different from the ones that government mandated for the public. These congress people have trusts and foundations that are often “blind” to the public eye.
It’s the general public that’s in trouble, swept away by the current of the falling dollar, the tanking stock market, and the losing housing market. As people lose their jobs and are unable to pay their bills, the foreclosure rate has doubled. Those with money are buying property for cents on the dollar, and as they do, former homeowners are forced to rent them. A little known fact is that many foreigners, mostly Chinese, are buying up U.S. real estate like it’s going out of style. Research the implications of that trend if you will.
Those who lose homes are flocking to apartments. The suicide and homicide rates are drastically increasing. If you don’t believe this, look at what happened in Argentina in the early 1970s and what’s happening there and in other countries now. The debt has outpaced the gross national product and they had to print more money to pay the debt. Eventually their currency was worth less than the paper it was printed on.
Zimbabwe actually printed ten million dollar bills when the economy collapsed in 2008. In the U.S., it is now against the law for people to melt down pennies and nickels. People found out that pennies and nickels were worth more melted down than in their coined state, and people were actually melting and selling them! To be sure, the economic meltdown has already started!
The point to this story is for you to figure out if this depicts you, and make you understand that you can and must do something about it. Time is of the essence.
The Future of the Financially Sound
You have this book to learn how to avoid the situation I just described, which is a classic tale of a family in the rat race.
Now you’ve learned how to become part of the group that is financially sound. When the economy sinks to a critically low point, if you have taken advantage of the strategies that you have learned in this book, you will be able to step over that dung pile and move on with your family intact.
You will understand the true definition of assets, and you will be able to buy James and Beverly’s $360,000 home for $130,000, rent it out for monthly income, hold it until prices rise and make a huge profit, or you will be able to buy a condo in Costa Rica and stay there until the U.S. economy gets back on its feet!
If you use the knowledge that you learned in this book, you will be able to help others. If the home you live in is paid off, you can help your children and your grandchildren with college expenses and with setting up their homes and their financial fortresses. This is what the wealthy do.
You will be able to teach others how to take advantage of wealth building and asset protection strategies, have fun with it, and earn while enjoying it.
I do not intend to scare anyone with this book; I only want to let you know the severity of the problem. The economy will fail—sooner or later—but it will fail.
What position will you hold?
The position of the general population, or the financially sound?
You CAN ESCAPE THE RAT RACE!
Let’s get started!!!
START A HOME-BASED BUSINESS!
For a Free Coaching Session on How To Start a Successful
Home-Based Business
Call:
Start Your Business
And Exit the Rat Race!
Check Out Sherry Peel Jackson’s Other Books And Products:
How To Escape The Rat Race: Four Keys To Acquire The Life Of Your Dreams
This audio series and workbook will jumpstart your race to wealth by giving you detailed and in-depth practical knowledge and examples to use for debt elimination, income generation and wealth creation. This series will put you on the exit ramp so that you can leave the rat race forever!
Basic Financial Survival: Learning To Survive Then Thrive In Any Economy.
This book and workbook teaches the basics of managing finances and shows you ways to create wealth. The set gives you actual forms to copy and complete for your debt-elimination, budgeting and financial management plan!
How To Stick It To The IRS: Confessions From a Former Insider.
This book lets you inside the Internal Revenue Service and shows you what they do to individuals and businesses all in the name of patriotism. You will learn how to arrange your business and personal finances so that you won’t be devastated during an audit.
How To Stick It To The IRS: Confessions From
a Former Insider.
This audio series takes you through in-depth strategies and steps to help you win an audit or at least reduce the amount you give the IRS. It includes a PDF file with the actual Initial Interview questions and Indirect Methods used by revenue agents and auditors to calculate additional income tax on you and your business!
Appropriate Church Finances and Policy
This audio series/workbook, produced using Sherry’s decades of working with church finances, explains the proper method of managing church finances and the do’s and don’ts of church policies and procedures!
Church Strategic Planning and Growth
This audio series/workbook, developed using Sherry’s practical and formal training, teaches you how to strategically plan for church expansions whether you have a building campaign or an evangelism campaign. It also shows you how to acquire and keep loyal members and grow them into disciples!
Pastors and Ministers IRS Audits
This audio series/workbook, based on Sherry’s experience auditing ministers while at the IRS, reveals the methods that the IRS uses to find and audit ministers and includes real stories from real audits and solutions to help pastors avoid or reduce entanglement with the IRS.