I am reading a book by Tom Wheelwright called Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes (Rich Dad Advisors) and trying to figure out how to reduce taxes. Many of the strategies are a bit too complicated and risky for many people, including myself.
For example, in chapter nineteen on “The Magic of Real Estate,” the author suggests that you find a Walgreens to buy. You buy Walgreens property, they find the land, build the building, sell the land and building to the investor, and lease them back for 30 years. Okay, so now, you as the investor pay the mortgage. Then Walgreens sends you a check that you deposit in your account. “So you don’t have to do anything. You travel all over the world with the investment income for your Walgreen’s property til a ripe old age.”
The next paragraph goes into how one can use depreciation deductions to further shelter your taxes. All this “sounds” easy, right? Wrong, not to me anyway. You need accountants that are hard to get in touch with, constant documentation, and tax planning that sounds pretty complicated. In addition, I thought there was a depreciation recapture which means some of the money will have to be paid back at some point if you sell it. It sounds like a headache. And what if Walgreens goes bankrupt? What do you do then? Books like these always make it sound like nothing will go wrong.
Don’t get me wrong, the book is good, interesting and makes some good points about how to save on taxes but dealing with so many professionals, their costs and all of the accounting really sounds time consuming and if time is money, as the book mentions, aren’t you just trading one form of work for another?
If you have some simple tax saving strategies, please share them below (legal ones please!).