Tax Planning

What makes a great tax plan? How do we set up a tax plan, and how do we measure its effectiveness? What are the biggest mistakes when trying to create one? Any plan must be clear, measurable, and aligned with our overall financial goals.

We need to define our overall goal by determining where we want to be in the future. Everyone has different goals—some common ones I see include making a significant amount of money to achieve maximum freedom, retiring early, or creating something to pass down to their children. You must decide on your path, whatever it may be, before you can create any kind of plan, including a tax plan.

Many people jump straight into real estate because of the exceptional tax savings it offers. However, if you do not understand real estate, you can easily lose your investment, no matter how safe you think it is. The key is to focus on what you know, which greatly reduces the risk of losing your money.

In summary, the first step is to set your long-term financial goals. Secondly, find a tax savings vehicle to help you achieve them. Third, assess the risk of your plan costing you more than it will save.