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| Step 6 - Implement Your Plan |
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| Create A Business Entity Now, probably the most important thing to know about wealthy, successful people is, whatever they do, they do through a business entity. Regardless of whether they are actors or lawyers, everything works through a business. What does this mean? Simply that they do not take on any venture, which requires any form of capital, if its not done through a business. Nothing is done in their own names or out of their own personal checking accounts. There are multiple reasons for that, but the most important ones are liabilities, taxes, and investments. Let me briefly explain the three I feel are most important. Liability: You certainly don’t want to lose all you worked for in a lawsuit, because somebody fell in your office/shop (as an oversimplified example). Liability claims can ruin you. So don’t put your personal property and belongings on the line, when there is even a remote chance you can lose it. Do your homework and find a reputable insurance company to cover you and your business against any potential harm. Remember that your company is a separate “person”, and should be treated as such. Taxes: You’ll also want to make use of all the tax advantages your government offers to local business entities. Many people don’t think about this, but taxes usually takes the biggest bite out of a paycheck. I’m not suggesting you don’t pay taxes, I’m suggesting you should learn about your tax system to see how the government favors businesses and how you can benefit from that. Investments: When it comes to investments, businesses have opportunities available to them that the average person doesn’t have. Investment vehicles designed by the rich for the rich, and the rich always use their businesses for this purpose. You’ll want to do your homework on this. This is by no means a complete list, and also not a sufficient discussion about any of these topics. Your best bet would be to make appointments with your legal and tax professionals, so that they can advise you on your needs. There are also many books and other resources available to learn how and when to use which form of business structure and what the advantages are of each structure. For now, just know that there are various types including, but not limited to: partnerships, corporations, companies and trusts. It will also differ, depending on your country and where you want to do business. If you forget everything else you’ve learned, |
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