The 4 Principles of Wealth Part 2 – Protect

March 23, 2020

We’re currently in phase two of our 4 Core Principles breakdown, which is called Protect. In the previous episode of the Rise Up Live Free Podcast, Ryan and Brad talked about acquiring the producer mindset and investing in yourself. Today, the focus is shifting from creating wealth towards learning how to keep it safe.

Now that you know what you need to move forward, you need to learn how to protect what you were able to produce and provide your journey with structure and safety.

The first two principles are placed on opposite ends of the spectrum. Leaning too much on one of the sides will hinder your progress significantly. For instance, people who are focusing exclusively on producing value usually avoid the topic of how to protect your money because they either find it tedious or believe they’re not qualified enough to deal with the subject.

And across from the “avoiders,” you’ll find people who are obsessive protectors who are so deep into worrying about how to keep their money that they prevent themselves from making any significant progress.

So in today’s episode, you’re going to hear all about the different factors at play here and learn how to find that sweet spot that will optimize the pace of your journey.

From Producing Value to Creating Long-Term Abundance

By producing value and making money, you’re able to grow your wealth steadily. But everything that you make is being chipped away by all sorts of wealth destroyers. And if you’re taking half a step back with each step you make, your journey is going to be frustrating, stressful and you’ll be leaving a sizable chunk of money on the table. That money is rightfully yours, but you need to know how to protect it.

You’d be surprised to know how many people actually struggle with this step. In fact, Ryan, Jimmy, and Brad were shocked to learn that even the high-level entrepreneurs aren’t aware of the fact that they’re losing money they don’t have to every single day.

“The skillset of making money… is fundamentally different than the mentality and the skillset… to keep and protect that money.” – Bradley Gibb

Changing your focus from making money to figuring out how best to keep it can be hard. Still, it has to happen if you’re serious about creating long-term abundance and reaching financial freedom in 10 years or less. But the good news is, you don’t have to have a fancy degree to learn how it works. It’s not that difficult when you break it down.

How to Create a Tax Strategy That Protects Your Wealth

Protecting your money is not about hustling or opening up a secret offshore account in the Cayman Islands. You don’t need loopholes – you need structure.

Robert Kiyosaki, the author of Rich Dad Poor Dad, talks about the four critical quadrants from which you can make money.

  1. Employee (E)
  2. Self-employed (S)
  3. Business Owner (B)
  4. Investor (I)

Tax codes perfectly correspond with Kiyosaki’s ESBI framework. In other words, each of these quadrants falls under a specific set of tax rules and rates. The highest tax rates are in the E quadrant, and you should avoid it as soon as possible. If you follow specific guidelines, you can pay zero income tax if you’re making money inside of the I quadrant.

All you need to do is structure your business operations in a way that puts you into the quadrants with the lower tax rates. It’s that simple.

“If you walk like a duck, talk like a duck, look like a duck, you get taxed like a duck.” – Bradley Gibb

What you need is to create a tax strategy, and here, tax code is not your enemy. The whole point of tax codes is to incentivize certain types of behavior. If you’re able to analyze it from this perspective, you’ll understand what you need to do to get into a lower tax bracket. And in the CashFlow Tactics framework, you do that using a CashFlow Grid.

Putting a tax strategy into place will empower you to go out and make as much money because you’ll know how to keep as much as you can.

What Are the Four Wealth Destroyers

After you’ve successfully put your tax strategy into place and paying your taxes, you’ll be left with a certain amount of money. And what do all the goldfish advisors suggest you do with it? They say you should invest in a tax-deferred asset. And that’s just plain irresponsible. There’s no way of sugar-coating it.

“Rule number one – savers are losers.” – Ryan D. Lee

By investing in tax-deferred assets, all that you’re doing is pushing your greatest liability into the future. Alternatively, you can take control of the situation and make an investment that allows you to create a stream of income from it.

However, the money that you have at your disposal after you pay all of your taxes is still in danger. There are four wealth destroyers you need to look out for at this point:

  1. Additional Tax
  2. The Market
  3. Creditors and Predators
  4. Inflation

Inside the CashFlow Tactics framework, the way you protect yourself from these wealth destroyers is by creating a Vault. How to make a Vault is a topic for another episode, but for now, you should know that it’s the only place where you can simultaneously keep your money liquid, retain access to it and protect yourself from all four destroyers of wealth.

The CashFlow Tactics Game Plan will serve you as both a tool that can help you produce value and make more money, while also assisting you in creating a strategy to defend your earnings from the destroyers of wealth. If you’re ready to create your Game Plan, then check out CashFlow Tactics Freedom Fast Track. It is a unique offer that consists of a carefully picked out set of resources and tools that are going to help you fast track your Financial Freedom Game Plan. Sign up today and start rising up so you can live free!

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