Key Tax Strategies for Millennial Investors

Aug 12, 2024

Advanced Lessons in Millennial Money - Part Two

Presenters:

  • Robert Kiyosaki
  • Tom Wheelwright

Key Concepts Discussed:

1. Three Important Accounting Terms:

  • Amortization:

    • Paying down debt with money from business operations (e.g., hamburger business paying for debt).
    • Concept that amortization can be tax-free when applied correctly to business operations.

  • Appreciation:

    • Increase in value of assets, particularly real estate.
    • Benefit of owning appreciating assets while using the bank’s money (debt).
    • Leverage allows appreciation on both owner’s and bank’s investments.

  • Depreciation:

    • Tax deduction that reduces taxable income without affecting cash flow.
    • Powerful tool for reducing taxes and increasing net income.
    • Allows business owners to keep income that would otherwise go to taxes, boosting cash flow.

2. Real Estate Investment and Taxes:

  • Investment in real estate (not personal residence) is incentivized by the government.
  • Depreciation is a key tax advantage in real estate, allowing for deductions on property value.
  • The concept of "phantom income" refers to income that appears due to depreciation tax benefits without actual cash expenses.

3. Financial Education:

  • Importance of understanding and utilizing financial tools like amortization, appreciation, and depreciation.
  • Emphasis on investing money rather than spending it to grow wealth.

4. Government as a Partner:

  • Government encourages certain investments (real estate, energy, food, water) by offering tax benefits.
  • Depreciation is likened to the government's contribution to real estate investments.

5. Conclusion and Takeaway:

  • The session underlines the importance of financial education to leverage tax laws for better wealth management.
  • Encouragement for viewers to invest wisely, understanding how to utilize tax incentives effectively.

Viewer Interaction:

  • Encouragement to like, comment, and subscribe to the channel for more insights and discussions.

Additional Notes:

  • Video ends with a light-hearted tone and reminders of the importance of financial literacy.