Tom's Blog

Every day I speak to people who want to know how to permanently reduce their taxes. This makes sense, since I am a CPA and I have spent 30 years showing business owners and investors how to permanently reduce their taxes by 10-40%.

Sometime during my conversation with them about taxes, invariably they ask me about how to build long-term wealth. They think I must also know about this because I'm a CPA. The good news is that I do know how to do this. But not because I'm a CPA. Most CPA's I know, in fact, know very little about how to build wealth. I know because I have done it myself.

The reality is that most people are 3-6 months away from bankruptcy and some are only a couple of weeks away. If you lost your job, how long could you live without a paycheck? If it's not at least one year, you are in bondage to your job. As the economy continues to weaken, you are more and more at risk for losing your job, your home and your ability to put food on the table.

Sounds pretty bleak, doesn't it? But I am here to tell you some GOOD NEWS! The American dream is alive and well and will live on throughout any recession or depression we might encounter. During the Great Depression, there were thousands of people who made lots of money and became millionaires. How did they do it?

They had a clear Wealth Strategy. They had built a business around their investing and continued to make money in the worst economy this country had ever seen. They were truly FINANCIALLY FREE! They didn't have to worry about a job, whether they could pay their mortgage, or if they would be able to take a vacation. Because asset values, such as real estate, plummeted, they made even more money than they had before the depression.

YOU CAN TOO!!! But you need a solid Wealth Strategy and a great Wealth Team. How do you develop a Wealth Strategy and a Wealth Team? Let ProVision show you how. We are about to launch our School of Wealth Strategy. Each month, you will learn key concepts about wealth, including leverage, velocity, tax strategy, business, team building and systems. I have taught thousands of people how to do this and how to make more money with less risk than they can with the typical financial advisor.

So join me in our School of Wealth Strategy and learn how to build Permanent Wealth. Coming soon to http://www.provisionwealth.com. Remember that Financial Freedom is Closer Than You Think. You just have to learn the rules.

Warmest regards,

Tom

I was sitting in church the other day and the speaker was talking about budgeting and otherwise watching what you spend so you don't get into financial difficulty. He was suggesting that we can never be truly financially free unless we have control over our spending habits.

This started me thinking about the relationship between spending habits and eating habits. As many of you know, a few years ago I reduced my weight by over 20%. I had tried losing weight before, but had never been totally successful. I love to work out and had always figured that if I worked out enough (i.e., used enough calories), then I could pretty much eat what I wanted. After all, this theory worked well in high school when I was on the swim team. The problem, of course, is that unless you are working out 8-10 hours a day, you can never work out enough to overcome bad eating habits.

So, this last time, I followed the WeightWatchers program and changed my eating habits. I started eating less, including less fat, while increasing my fiber intake and making sure I was getting lots of protein. The result was pretty dramatic. In six months, I lost over 40 pounds. But what has been even more dramatic is that I have kept the weight off for over 2 years. Statistically, only 3% of the population has ever lost 20% of their body weight and kept it off for more than 2 years.

So what made this time different? Simply, I finally got the message that good exercise habits cannot compensate for poor eating habits.

What does this have to do with building wealth? There is a direct corollary between eating habits and spending habits. Just as you cannot exercise enough to overcome poor eating habits, so you can never make enough money to overcome poor spending habits? Want proof? Just ask M.C. Hammer, Scottie Pippin or dozens of other celebrities who have made millions and spent every penny of it.

So, while our goal is to create enough wealth to live our ultimate lifestyle and while we always want to focus on our wants, not just our needs, we still need to learn to manage our spending. We need to set aside funds every month to go into our wealth building. We need to set aside funds every month to donate to good causes. The rest we can spend. But spend wisely, whether you are in your wealth building years or whether you have achieved your ultimate lifestyle. For more on building wealth and achieving your ultimate lifestyle, visit our School of Wealth Strategy, coming soon to http://www.provisionwealth.com.

Warmest regards,

Tom

Do you know people who make lots of money from their job or their business but never seem to have any money? Or maybe they have money now, but they don't have any assets other than their home, their cars and their boat?

I keep running into this situation and I always come to the same conclusion. Making lots of money has nothing to do with wealth. Nor does it seem to have much to do with financial knowledge or wisdom.

Just this week, I was talking to a new client who runs a very successful business. He makes hundreds of thousands of dollars each year, but has more liabilities than he has assets. The reason seems to be that while he has made incredible efforts to make his business successful, he has never devoted the time or energy to learn how to make his investing successful. This is not a criticism of this client. It is a part of our society. We are taught to work hard at our job or our business and to turn our finances over to some financial advisor who may or may not know what he or she is doing.

In addition, this client was given some poor advice regarding his taxes, so he is in deep doodoo (yes, that's a technical term) with the IRS. Now, he has to work even harder to pay back taxes that with proper planning may not have been owed at all. Again, our society teaches us that taxes are too difficult so we need to "hand them over" to some tax advisor who probably only knows a little more than his client. In reality, you cannot "hand over" your taxes to a tax advisor. You have to learn enough of the rules to know when to go to your tax advisor for advice. He or she cannot be with you every minute of the day.

The answer for all of these high-income, low-wealth people is the same. It takes knowledge to be financially (and tax) free. That's why, at ProVision, we have created a brand new course to teach investors of all income levels how to create permanent wealth. I'm off to Minnesota today to introduce this product to a group of Internet marketers. You can get this education too, by enrolling in our School of Wealth Strategy, coming soon to our website at http://www.provisionwealth.com/products.

Remember - Financial Freedom is Closer than you Think - but only if you have the knowledge to obtain it.

Warmest regards,

Tom

I'm speaking to a group of about 600 people at T. Harv Eker's Extreme Wealth yesterday about how to create their own personal wealth strategy and I'm sure many of them were wondering if this really works to speed up the growth of a person's wealth. After all, I showed them how you could turn a 5% appreciation on an investment into a 60% return just by using the concepts of leverage, velocity and tax savings.

Sounds too good to be true, right? While it may sound too good to be true, the numbers speak for themselves. I give a demonstration of this on our free cd download at http://www.provisionwealth.com/wealthcd.

The truth is that very few people will ever reach their financial dreams unless that have a wealth strategy and a proven system for building and implementing that strategy. My partner, Ann, and I have been using our system for over 6 years and it has proven to do three things:

1. Increase our returns on our investments by 2-3 times
2. Reduce our risk
3. Allow us to control our investments while spending very little time on them

If you don't have a wealth strategy or you think your strategy could use some improvements, call us at 866.467.5809. Our mission is to bring financial freedom to the world. That's why I am traveling all over the world (Las Vegas today, Canada in two weeks and Australia in November).

Remember that financial freedom is closer than you think! You just need a good strategy.

Warmest regards,

Tom

Debbie from our School of Wealth Strategy asks the following question:

Q: My life partner and I purchased two single family homes this year as rental properties and see advice as to what entity should be established to take full tax advantage/asset protection. One of these properties is in the Go Zone and we seek advice as to allowable depreciation on this property.

A: Seems like a simple question, doesn't it? As simple as it seems, we actually have multiple questions and sub-questions. Let me address them one at a time. The first question is which entity is best for tax purposes. This, of course, depends on your ultimate strategy and where you live and where you invest. In most states, we recommend forming an LLC that is taxed as a partnership. Especially because you are not married, we suggest you have an attorney draft an operating agreement for the LLC. We also suggest you get with your Tax Strategist make the most of the tax benefits of the LLC. If you don't already have a good Tax Strategist, please call our office at 866.467.5809 and we will be happy to get you lined up with a qualified Tax Strategist.

The second question is closely related to the first and this is the asset protection question. Again, in most states we would recommend an LLC, but ALWAYS recommend you speak to a qualified asset protection attorney. If you don't know one, call us at we will recommend one that will meet your requirements.

The third question is about the depreciation. And this has a couple of sub-questions. If you qualify for the GoZone depreciation, you can take 50% of the cost of the property, not including land, plus ordinary depreciation on the remaining 50%. But even if you qualify for the GoZone depreciation, you may be limited as to how much you can take this year, depending on whether you are passive or active in the real estate, your adjusted gross income, and whether you qualify as a real estate professional. For answers to all of these sub-questions, I recommend you go to our website at http://www.provisionwealth.com/products and subscribe to our School of Tax Strategy where you will get a new course on a specific tax strategy each month, including a course on making the most of your real estate tax benefits and one on depreciation.

It sounds like what you really need is a good Tax Strategy. For this, I strongly recommend you speak to my assistant, Beth Rojas, at 866.467.5809 and set up an appointment with one of our Tax Strategies to determine the best approach for you.

Warmest regards,

Tom

Jerry, one of our new School of Wealth Strategy students, asks the following question about buying an aged company for credit purposes:

Q: Hello Tom I was on the Oct Wealth Strategy call, had signed up just the week before!, and now am doing all my homework for the Dec Massive Passive call. I am also currently 4 weeks into the Chris Wise Credit program with 4 more weeks to go. Just wanted to bring you up to speed on where I stand. My question is regarding the purchase of an aged company. My goal is to purchase an aged company sooner than later so that I can access a business line of credit soon. The next step is to use that capital to purchase more growth assets and sources of passive income. I plan on the company ultimately being a real estate investment business but not for holding the actual properties. Therefore, should I purchase an LLC, S-corp or C-corp? I do not plan on employees and I have no kids (only a dog!). I will want to be able to maximize all the tax benefits of the corporation. Hopefully this is sufficient info. Thanks for your time and reply Jerry Durham.

A: There are two issues here. The first is which type of entity is best from a credit standpoint. I will refer you back to Chris for this part of the question. (Alwaystake maximm advantage of your mentors for their expertise.) The second question is a tax question and the answer to all tax questions is, "It depends." Tax planning depends largely on your long-term wealth strategy. And the best answers always come from the most information.

However, there is an entity that will give you the flexibility you need until you have your wealth strategy in place. This is an LLC, or limited liability company. LLC's can be taxed any way you want them to be taxed. Just be sure when you purchase the LLC, that an entity election has not already been made for the company. Also, I would suggest that you also set up a holding company to own the purchased LLC. The reason for this is that purchased companies always come with skeletons. You don't want to purchase assets inside of a company that already has a history, included potential lawsuits.

Instead of making your investments directly from the purchased company, make them from a sister company that you have set up. For more information on entity set up, please see our School of Tax Strategy modules on Entity Fundamentals and Building Your Perfect Foundation at http://www.provisionwealth.com/products.

Warmest regards,

Tom

Here is another question from one of my Aussie friends, Anita:

Q: Dear Tom, I need to be financially self-sufficient in 2 years so that I can retire and live a fulfilling life style. My husband and I currently have Real Estate to the value of approx. AUS$1,700,000. $650,000 of that is our family home. $920,000 is owed to the bank, monthly interest is $6,000 and rental income is $3,500/m. Credit card debt is $60,000 some of which is at 20%(Yeah I can hear you gasping) I have now been pre-approved for a further loan of $460,000 @ 7.14%. Question: How best can I use this money on the 30% strategy you talked about when you came to Australia? This loan must repay itself and more.(My preference is for Real Estate.) Extra Question: How can I get a goal plan worked out such as the example of the woman which you demonstrated. P.S. Will your tax tutorials be relevant to Australia, what is an IRA?

A: First thing you do with the $460,000 is pay down that $60,000 of credit card debt that is at 20%. Next thing you do is to get your spending under control so you are not racking up additional credit card debt. After that, you need to create your wealth strategy that builds so much wealth you can spend whatever you want without worrying about credit card or other debt.

Begin by going through the 17 Secrets course you acquired at the Chris Howard seminar in Sydney. This is the same material that others can acquire (though without all of the bonuses) through our School of Wealth Strategy at http://www.provisionwealth.com/products. Once you have been through the materials, consider hiring a ProVision Strategic Wealth Coach. A ProVision wealth coach will give you advice that is relevant to your specific situation, will hold you accountable, and will help you build the team and the systems that will allow you to achieve your 30% investment returns.

Remember, that the key is not the investment, but rather the method of investing. This is what we teach in our School of Wealth Strategy at http//www.provisionwealth.com/products. Be sure to ask any questions you have either through the AskTom link or in our monthly coaching calls. I would suggest waiting to borrow the $460,000 until after you have developed your wealth strategy, unless you can borrow it as a line of credit that allows you to draw down only the amount you need at any one time, in which case I would suggest you obtain the line as soon as possible to pay down your expensive credit card debt.

Again, please feel free to ask these and any other questions on our monthly coaching calls. The next call is tomorrow at 7:00p.m. MST, 6:00p.m. PST. I believe this is in the middle of your day in Australia.

Warmest regards,

Tom

P.S. - See tomorrow's blog for the answer to your question about the tax planning bonus course you are getting with the 17 Secrets course.

I am so glad to be getting questions from my new friends in Australia. Let's start with a question from Maya.

Q: How different is your U.S taxation system to Australias,and will these differences be taken into account during the coaching programme when it commences? Eg How does your IRA differ to our Australian Superannuation?

A: Australia and most other countries, including the U.S., have net income tax systems. This means that you are taxed on your income, less any income that is specifically nontaxable (excluded) and less deductions. While the exclusions and deductions will be different from country to country, many of the basic principals remain the same. These are the principals we talk about in our bonus course on tax planning that comes with our course on Wealth Strategy.

For example, in the U.S., we have individual retirement accounts (IRAs), profit sharing plans, SEP's and pension plans. All of these are ways to defer income from today until some later year. In Australia, you have your Super and in Canada they have their RSSSP. All of these plans effectively function the same, in that the government controls how much and who can contribute to the plan, how the plan can invest its assets, when you can take money out of the plan and how the money you take out is taxed.

As we discuss in our bonus course on tax planning, most individuals rely heavily on these plans for retirement planning and tax planning. At ProVision, we believe there is a better way. That way is to create a Tax Strategy that produces permanent tax savings. Again, all countries have tax credits, income exclusions and deductions. While they may be different from country to country, the principals are the same in all countries. These are the principals we discuss in our bonus session on tax planning.

Of course, we recommend you find an experienced, creative tax strategist local to your country to be on your wealth team. Our course on Building Your Wealth Team that comes as part of our School of Wealth Strategy (http://www.provisionwealth.com/products and that was included in the course you purchased at the Chris Howard seminar teaches you how to find the right people for your team. When it comes to a tax professional, however, one thing you need to be sure of is that your tax strategist looks at taxes from a big picture, strategic point of view and focues on permanent, rather than temporary tax savings.

The value of such a tax professional in incalculable. You can save thousands of dollars in taxes that you will never have to repay that can be used to create millions of dollars in wealth and passive income.

I look forward to having you on our monthly coaching calls. Please be sure to ask lots of questions during those calls as well. I'm sure you are not the only person with your specific questions, so your questions help everyone.

Warmest regards,

Tom

We had a great call last night. Thanks to all who were on the phone last night. We had great questions and input from several people. It really helps everyone when you ask your questions, as others will have the same questions.

One of the questions that came up was how to decide on what type of investing to do. How do you choose the category that is right for you? In our course materials, I say repeatedly that you can make money in any type of asset and that what works for one person will not work for another.

The choice of investment is a very important decision. After all, you will be spending years devoting yourself to this specific type of investing, whether it be the stock market, real estate or a business. There are three ways to choose.

First, you can choose the way most people do it. We call this the DWEED process or "Do What Everybody Else Does." Most people choose there investments based on a random recommendation from a friend, advisor, or cab driver. This is why most people are scared to death of the current global economy. They have no strategy and no idea of what they are doing with their money. And they probably lost a lot of money when the markets went down.

Better is to evaluate what you enjoy doing. In our course called, "Massive Passive Income," we go through this decision-making process. We focus on a list of personal investment preferences in the workbook. By going through this evaluation process, you can get a pretty good idea of what type of investment will be right for you. Remember, that you will be most successful doing something you enjoy doing.

The best way to choose your investment category is to consult with a qualified Strategic Wealth Coach. A qualified coach, like those at ProVision, will start by listening to your concerns and your goals. Then, they will ask you probing questions to find out what you enjoy. Because of their vast experience with hundreds of other investors, they can quickly help you identify which type of investing will be most enjoyable for you. Our ProVision coaches also use an online tool that helps identify your natural instincts. Knowing your natural instincts quickly narrows the role you should take in your investing and the type of investing that will be most comfortable for you.

Feel free to call us anytime at 866.467.5809 or visit our website at http://www.provisionwealth.com to learn more about ProVision Strategic Wealth Coaching. We are here for you and your family, so be sure to call.

Remember that when you are investing the right way (the ProVision way) and in the type of assets that you enjoy, you will be wildly successful and you will always be able to sleep at night because you know that "your financial freedom is closer than you think."

Warmest regards,

Tom

I have been asked to speak to several church groups over the next two months on the topic of financial preparedness (ward conferences for you LDS folks out there). So I have been preparing my talk these past couple of weeks. I have 10 minutes to speak, so I have to make it count. So I'm wondering would could provide the greatest benefit to these people in that short of a time?

When I have heard similar talks about financial preparedness in the past, the focus has always been on budgeting your expenses and making sure you live within your means and save money. Not only is this boring, it is extremely negative and pretty much worthless. I want to inspire people and I don't think anyone is inspired by the thought of depriving themselves of what they want and need through the idea of a budget. Both "budget" and "save" are negative terms that are all about scarcity.

Instead, I have decided to talk about creating a wealth plan, or strategy. See, if we focus on a plan, we have something positive to look forward to. As I mentioned the other day, the first step of a plan is to determine your goal. And the first step of forming a goal is to decide how you are going to celebrate when you reach the goal. So, by focusing on a strategy, we are now talking about the most positive topic possible - celebrating!!!

I would encourage all of our readers to get rid of your budget, stop saving, and start planning for a great celebration when you reach your goals. Instead of saving, begin by investing but go the next step, as we discuss in our School of Wealth Strategy (http://www.provisionwealth.com/products, i.e., creating a wealth business. Doesn't having your own wealth business sound a whole lot better than saving money and budgeting? Not only is it more positive, it is the ONLY WAY TO BUILD PERMANENT WEALTH. All great wealth has been created through business.

And it's really not very difficult once you have a system or recipe to do it and especially not if you have a great Strategic Wealth Coach to guide you through. For more information on ProVision Strategic Wealth Coaching, go to our website at http://provisionwealth.com or sign up for our School of Wealth Strategy at http://www.provisionwealth.com/products.

And wish me luck in my presentation this Sunday. I can use your good vibes. I will be speaking at 11:00a.m. MST on Sunday.

Thanks for all of your positive energy.

Your financial freedom is closer than you think.

Warmest regards,

Tom

I blew it and I'm sorry. My resolution was to blog every week day and I missed yesterday. But here's the thing about resolutions. The tendency is to drop them if we goof. Instead, I prefer to admit I made a mistake and keep going. So, I'm going to keep blogging every day even though I'm already not perfect this year.

Today's question comes from one of our School of Wealth Strategy members. Jerry has a tax question. This is totally appropriate since taxes have such a huge impact on wealth building.

Q: Do the S-Corp minutes need to declare a per-share dividend in order to take quarterly distributions? If so, do I need to hold quarterly meetings to declare them or can I make a blanket declaration for the year? Thanks for your help and the great courses and workbooks. I’ve learned a lot and am applying it as I go.

A: You do need to declare quarterly distributions in an S corporation. The key is to act as if you are a regular corporation, like IBM. Each quarter you hold a meeting to declare the dividend and then you pay the dividend. Of course, you may want to hold your meeting with your spouse at a nice restaurant and make the meal deductible. But you do need to maintain minutes of your meeting and keep them in your corporate book. For more about how to handle S corporations, meals & entertainment and corporate formalities, I suggest you subscribe to our School of Tax Strategy (http://www.provisionwealth.com/products)where, just like the School of Wealth Strategy, each month you will receive a new course on a different tax strategy topic. All three of these topics are complex enough that we have created a separate course for each of them.

Thanks for being patient with my goof yesterday. Keep reading and feel free to send the link to my blog to your friends.

Warmest regards,

Tom

Debbie from our School of Wealth Strategy asks the following question:

Q: Tom, what do you mean when you say we should build a business around our investing?

A: This is the question of all questions and gets to the core of ProVision and what we are all about. Let's start with a little background.

Historically, all great fortunes have been built in business. Whether it was Andrew Carnegie, John D. Rockefeller, Bill Gates or Warren Buffett, all great fortunes have business as their foundation. You really don't hear about great fortunes being made by investors. Ever wonder why? It's because business done right provides the most leverage, greatest velocity, and least amount of risk of any money-making activity.

I come from a long line of entrepreneurs. My father owned a printing company, his father owned an insurance agency. I learned early on in my life what it was like to run a business. But my father, while a great printer and a wonderful person, was not a great businessman. So I have spent my life learning what makes the difference between a great business and an average business. Why do some businesses grow and grow while others seem to hit a ceiling past which they can't grow?

The answer to this question lies in the foundation of the business. Small businesses stay small when the owner spends his or her time running the business. Effectively, these people own their job. They have no time to work on the business because they are always working in the business. The key is how to get the owner out of the business operations and focused on the business growth. The answer is for the business to create a strategy and a set of systems that implement that strategy. Then, and only then, will the business owner have time to grow the business. When the strategy and systems are in place, the owner only has to manage the systems, not the people. The owner isn't doing the work, the employees and other team members are doing the work.

In case you think this is a fantasy, let me explain that I have done this with my accounting firm. My partner, Ann, is a systems genius. My expertise is in strategy. So once I created the strategy for the firm, Ann created the systems. The result is that Ann doesn't spend any time at all on the accounting firm and I spend about 3 hours a week. If it can be done with a professional services firm, it can be done with any business.

So, back to Debbie's question. What does this have to do with investing? I have discovered that the business principles of strategy and systems can be applied to investing. Investors who create a business of investing, by developing a strategy and implementing systems, can enjoy the same results enjoyed by a successful business owner, i.e., higher profits, more growth, less time spent on investing, total control over their investing and less risk.

These are the principles I teach on T. Harv Eker's stage, Chris Howard's stage and Robert Kiyosaki's stage. These are the principles I have followed to create an accounting firm where I only spend 3 hours a week managing the firm. And these are the principles I follow in my real estate investing.

The good news is that Ann and I have decided to share all of our strategies and systems with you. And we have made it as inexpensive as possible. How? Through our School of Wealth Strategy and our School of Tax Strategy; two inexpensive subscriptions that each include hours of training materials and a monthly coaching call with me. To sign up, simply go to http://www.provisionwealth.com/products. It's fast and it's easy.

We want to share more of our strategies and systems, so we are continually adding more sessions to our Schools. The response from our current members has been fantastic.

Thanks to Debbie for asking this question.

Warmest regards,

Tom

Last night, I had the great privilege of being a guest on Kim Kiyosaki's webinar that she does each quarter for PBS. The topic centered around our current economy and whether this is an adversity or an opportunity. Kim asked me a very important question:

Q: What are you recommending to clients in this current economy about how to deal with financial challenges?

A: Education, education, education. I explained that as our knowledge about finance and investing increases, two things happen. First, our risk goes down. The more we know about any investment, the lower the risk because we know how to invest. Second, investment returns go up. We are able to take advantage of better investments when we know how to deal with them and how to find them.

I went on to say that after knowledge, the next key is FOCUS. It's critical that you focus on a single type of investing activity. I was very clear that the idea of multiple streams of income from multiple types of investing as recommended by several of the "gurus" is garbage. It simply doesn't work. In fact, it cannot possibly work. How can you possibly master multiple investment strategies?

We teach our clients how to determine the right investment category for them and how to create a strategy that will be successful for them in our School of Wealth Strategy. If you haven't had a chance to review this wonderful educational product, please go to http://www.provisionwealth.com/products and check it out.

In reality, the only way to solve your current economic situation is to get educated in a new way to look at wealth. The old ways simply don't work anymore. Come visit us and let me know what you think.

Warmest regards,

Tom

I was reading my scriptures this morning and came across a passage that really struck home. The verse says, "I know that he (God) granteth unto men acccording to their desire...; yea, I know that he allotteth unto men...according to their wills...." What struck me was the relationship between desire and will.

How many of us have heard the idea that if we desire something, it will happen? We read this in several great books, including, "As a Man Thinketh," and "Think and Grow Rich." And, of course, the recent phenom, "The Secret." There is no question that our desires play a major role in what we receive (especially our subconscious desires).

What I find is that the desire has to be so strong that, like this scripture explains, it becomes our will. Let me give you an example in my own life. I have long had a bad habit of biting my fingernails. Not a major challenge, perhaps, but not exactly socially approved. Not only do the fingernails look bad, there are the hangnails and other unsightly and uncomfortable results from this habit.

I tried for years to break the habit. And I have been unsuccessful until now. I set a new resolution this year to not just not bite my fingernails, but to keep my hands entirely away from my face. Unbelievably difficult. So far, though, so good. (Actually, of my 5 New Year's resolutions, this is the only one I've been close to perfect on.) I haven't bitten a fingernail in three months. I actually have fingernails that are all the same length. Amazing. I've even been thinking about getting a manicure. (Question to the guys who read this blog) - Do I lose my Guy Card if I get a manicure?)

So what's the difference this time around? It comes back to that scripture. Not only do I desire not to bite my fingernails, it has become my will. This principal doesn't just work for fingernails; it also works for all of the bad financial habits you may have. Do you spend impulsively? Do you put off your bookkeeping? Worse, do you put off your tax return filings until you are late?

All of these bad habits can be overcome if you desire it AND it becomes your will. You must will it. It has to be so important to you that you think about it not just occasionally, but ALL THE TIME. Remember, Napoleon Hill did not say, "Think once in awhile and grow rich." He said, "Think and Grow Rich." This means all of the time. It has to become your will.

As the old say goes, "where there's a will, there's a way." The converse is also true, "without a will, there's no way it will happen." (This last quote is mine.)

Focus, focus, focus on your wealth and make it your will and it WILL happen. Then and only then will your financial future be closer than you think.

Warmest regards,

Tom

I had the opportunity to speak to the MAP trading group yesterday in Sacramento. These people are serious about trading in the stock market. 40 of their roughly 100 members gathered to participate in 3 hours of discussion regarding how to reduce their taxes. Of the 40, 4 decided to go to the next step of joining our School of Tax Strategy to continue their efforts to reduce their taxes.

These numbers are instructional. Of the 100 members, only 40 of them were willing to spend 3-4 hours learning how to reduce their taxes on their trading income. Of the 40, 4 were willing to spend a couple of hours a month and a few hundred dollars to continue learning how to reduce their taxes. So about 4% of the membership was willing to take serious steps to reduce their taxes, the single biggest expense they have and a potentially huge burden on their trading profits.

Interestingly, these numbers are about average for people who attend seminars. About 5% actually take action. Why is that? I suggest it's because reaching our dreams is hard work. As my friend Greg Habstritt says, "building wealth is simple, but it's not easy."

How dedicated are we to reaching our dreams? What will we give (see "sacrifice") in order to win? Robert Kiyosaki explained at the Rich Dad Tuesday meeting recently (go to www.richdad.com to sign up for Rich Dad Insiders to participate via the Web in these meetings) that at any given time, we have a choice between winning and being comfortable.

This really struck me as I was flying home last night. I will admit that I frequently take the comfortable route. What about you? Are you winning? Will you make the extraordinary effort it takes to be the best? Think about Olympic athletes and their mindset. It's all about winning!

Every minute of every day we are making this choice. Just remember that. And here's to winning whatever it is you seek!

When you dedicate yourself to winning, your financial freedom is closer than you think.

Tom

Here is a question that a lot of our readers can relate to coming from one of our School of Wealth Strategy students:

Q: Hi Tom Regarding the Velocity principle - What would you suggest regarding pulling equity out of the real estate investment. An equity line or a refinanace? it appears that Eq line terms are shorter duration now, and you still need to pay back principle so it would seem to me a refinanace would be in order. Best Regards!

A: First of all, congratulations of having equity in your real estate. Not too many people can say that right now. Second, I would suggest sitting down with your Wealth Coach to examine the terms that you are getting from your Bank on both the fixed-term and variable term loans.

My preference generally is more flexibility. This leans towards a HELOC. There are times that a fixed loan is preferable. If you have immediate use for all of the funds, a fixed loan is great. It's better from a credit score standpoint and you can structure it so you have a fixed rate of interest. In these times of low interest, this is particulaly advantageous.

The challenge comes if you don't have an immediate need for the money or if you want to use the money sporadically. Once you take out a fixed loan, you are paying interest on it continually until it is paid off. And once you pay down the principle, you can't go back and take it out.

If you do choose a fixed loan, be sure to build a complete wealth strategy before taking out the loan. Design your strategy so your loan is used productively all of the time. That means that when you aren't using the money for more real estate or more of your primary strategy, that you have an outlet for it, such as a hard money loan. Check with my friend, Wayne Palmer, who handles hard money loans professionally to see if he won't invest it for you on a temporary basis when you aren't using it.

If you don't have a Wealth Coach yet, contact our office at 866.467.5809 and set up an appointment with one of our Weatlh Advisors to determine what level of Strategic Wealth Coaching is most appropriate for your situation.

When you have a strong, complete, Wealth Strategy, your financial freedom will be closer than you think.

Warmest regards,

Tom

Nick asks the following question:

Q: Tom, You recommended my wife reading "The Creature from Jekyll Island" for a history of banks and the Fed Reserve. I've read "GRUNCH of Giants" as well. Are there any other recommended readings dealing with the history of finance and money?

A: The two books you mention are great books and I highly recommend them to anyone who wants to understand the current economy and where it's going. In addition, I recommend "The Dollar Crisis" and "The Trillion Dollar Meltdown." I also suggest Robert Kiyosaki's newest book, "Conspiracy of the Rich."

Let me know what you think about them after you have read these books. The importance of reading books like these is so we know what to expect and how to behave in our own financial situation. As I always say, "Knowledge is the surest way to reduce Risk."

Warmest regards,

Tom

Recently, David, one of our School of Wealth Strategy students, asked about using Quickbooks versus using some other accounting software. Is Quickbooks really that much better?

Interesting timing on this question, as I evaluated a new software, Working Point, just yesterday. What I found was that Working Point has several features not included in Quickbooks, most notably that it is an online solution and Quickbooks' online solution is not very good.

However, Working Point did not include several of the excellent features found in Quickbooks. For example, Quickbooks allows you to enter checks and deposits directly into the check register just like you would if you were doing it manually with an old style checkbook. This is a great feature because it really speeds up the time for entering data. Working Point does not have this feature. Also, Working Point does not allow you to write and print checks. Quickbooks does.

Quickbooks also has several reporting features, such as budgets and forecasts that aren't available to Working Point. And, you can do your payroll very easily through Quickbooks.

Quickbooks is far from perfect and there may be a better system out there. I just haven't found it yet. When evaluating bookkeeping software, make sure you get full reporting, including balance sheet, income statement and statement of cash flows and look for ease of reporting. Also, make sure it allows you to do online banking as this is a great time saver.

Most investors and emerging entrepreneurs can easily do their own bookkeeping in an hour or two a week with good software and using online banking. We have two excellent courses on bookkeeping, one is the Basics of Bookkeeping and the other is the Basics of Using Quickbooks. You can find these courses in our online book store at http://www.wealthstrategyuproducts.com.

Let me know if you find bookkeeping software that has the good features of Quickbooks and that you like better than Quickbooks. Especially if you find a good software that is online instead of having to load it on your computer.

Warmest regards,

Tom

My friend, Corey, recently asked me the following question:

Q: Tom, I was wondering if there is a formula or rule of thumb that you use in order to figure out how much of a down payment should be applied when buying rental property?

A: Corey, I'm a big believer in cash flow. So, I only want to buy real estate rentals that will produce positive cash flow. Of course, you can always produce positive cash flow from any real estate if you put enough down of your own money. I have a client whose retirement is from several condos that they own outright (no bank loan). Of course, this doesn't produce the highest overall returns.

In order to produce the highest returns, you want the most leverage. So here is what I do. I look at what would my downpayment have to be in order to create some positive cash flow. Then, I calculate what my overall return will be, including cash flow and appreciation (and tax benefits, of course). If that return matches the criteria I have set up in my wealth strategy, then I buy the property. If not, I pass on the property.

So once again, it's all about your wealth strategy. For more about creating your personal wealth strategy, call us toll-free at 866.467.5809 or send an email to cs@provisionwealth.com.

Warmest regards,

Tom

My friend, Mike, from Canada, asks the following question about investing in the U.S.:

Q: Apart from seller financing, are there other sources of financing available to foreign investors?

A: Yes. There are many sources of financing available to those who cannot go straight to a bank for their real estate financing. Let's look at a couple of these.

1. Using Business Credit - The easiest form of financing is to get financing in your business. My friend, Chris Wise, specializes in getting this type of financing. In fact, we just did a webinar about this a few days ago. For more information, go to http://www.creditlinemillionaire.com.

2. Investor Financing - There are many investors who are willing to lend based primarily on property value. You may not get the same level of leverage that a bank would give you or the same rates, but these lenders are plentiful.

3. Raising Capital - Similar to investor financing, there are many people who are looking for a good investment but have no idea where to find it. Anyone can raise capital for a real estate project. The project has to be a really good one and you need to have all of your ducks in a row, including good experience in real estate. If you don't have experience in real estate, I suggest you get experience by investing in your community where you can get bank financing. You also need to learn how to sell. I would recommend my friend, Blair Singer's course, for learning how to sell. You can reach Blair at http://www.salesdogs.com.

4. Partners - There are lots of people who will get the financing for properties if you are willing to do the work of finding the properties and getting them fixed up. The reality is that there are several types of capital. Two of these are financial capital, which you need, and time capital, which you may have.

5. Credit Partners - There are many people with good credit who don't know how to find, fix up and rent properties. They frequently are willing to allow you to use their credit if you do all of the work. This works especially well if you live outside of the country you are investing in and your credit partners live inside the country. Chris Wise can also help with this.

The key to all of this is experience and education. Rich Dad has an excellent course on creative financing. Just go to http://richdad.com.

Warmest regards,

Tom

My friend, Helena, asks the following question that I'm sure many of you are wondering about in these days of strict lending standards from banks.

Q: What's the best way to leverage assets if you don't have a job? For example, if I have a rental property with $50,000 in equity, how do I get access to that equity so that I can purchase another asset? In the current economy, HELOC's are hard to get, and a traditional 2nd Mortgage requires verification of income. What options can I take advantage of (instead of working an 8 to 5 job) so that I can keep investing in real estate?

A: First, I would refer everyone to my blog from yesterday to Mike in Canada about creative financing. This applies to those who don't have a job as well as to those out of the U.S.

Second, I would suggest looking to investors who would be willing to lend you money secured by a second mortgage on your property. Just like banks, you will pay a higher rate than a first mortgage, but that doesn't matter if you have a good use for the money. Investors like this come in many forms, including friends and family, business associates, and former business associates.

The issue most people have raising capital is that they won't ask for it. This is just head trash. If you don't think it's a good enough deal to ask someone for the money, what are you doing making the investment?!! I suggest everyone take Blair Singer's sales training at http://www.salesdogs.com. Blair is a terrific trainer and great salesman.

Of course, if you are married, you can use the income and credit of your spouse. This is the easiest way to get the equity out of your property.

I would also suggest you begin developing a banking relationship, preferably with a smaller, local bank who you can get to know and can give you help getting the financing you need and deserve.

It's critical that you use your money and keep it moving to build your wealth. This is called velocity and is the only way to build wealth quickly and permanently. With velocity, along with leverage and minimizing your taxes, your financial freedom is closer than you think.

Warmest regards,

Tom

One of the most powerful tools you can have in your personal investment toolbox is your personal set of investment criteria. Once you have decided on the type of growth assets you will be using in your personal investment strategy, then the next step is to determine the investment criteria you will use to carry out that strategy.

Investment criteria are simple both in description and application. These are the rules you live by while you invest. Think about a simple real estate investment. You want to buy a single family home. You look at house after house after house. What is it that is going to make you want to buy it?

Of course, your decision will be quite different if you are buying it for your personal residence. In that case, you will look at the design and the neighborhood and the floor plan. You may even look at the school district if you have kids and how close it is to your work.

When you buy an investment property, the criteria will be quite different. You are interested in cash flow and appreciation. That's it. So, you look at how it will rent compared to it's purchase price. And you will look at the expected appreciation in the neighborhood.

Just like everyone has different criteria for purchasing their personal residence, so different investors will have different investment criteria. Some investors want more cash flow, some want more appreciation and others want more leverage. How to choose your investment criteria is the focus of one of our courses in our School of Wealth Strategy entitled, "Your Wealth Strategy." In this course, we teach our students how to develop their own personal set of criteria.

For those of you who purchased our 51 Secrets package at the recent Rich Dad Annual Forum in Orlando, this course came with your purchase. You received an email immediately after returning from the Forum telling you how to access all of the 12 courses included in the 51 Secrets package on line. Last week or the week before, you should have received the hard copy of all of the cd's, dvd's and workbooks that are included in this package. If you didn't receive this, please call our office at 866.467.5809 and ask for Jessie and she will track down your packages for you.

For those of you who did not purchase our 51 Secrets package, you can purchases the individual course, "Your Wealth Vision" online at http://www.wealthstrategyuproducts.com.

We can talk more about your investment criteria in an upcoming telecoaching call. Thanks to Helena for asking this question today. Remember that when you create your personal investment criteria, you will speed up your investing, increase your cash flow and build your wealth faster than you thought possible.

Warmest regards,

Tom

In our last School of Wealth Strategy call, we talked about building your wealth team. Afterwards, Michael asked the following question about building a team in a state where you don’t reside.

Q: How do I build a wealth team if I want to invest in a different state than where I live? How can I identify good team members if I don’t live there or is it better to primarily try to invest in your local area only? Can it be a good strategy to have rentals in different geographical states if they are managed well and cash flowing?

A: Building a great team is never easy. You have to find team members who you can trust and build a relationship with. This is true whether the team member is local or in another state. The single most important team member is your wealth coach. And your wealth coach can help you find team members anywhere. That is one of their primary functions.

It can be a good strategy to have properties in different states. For example, when I saw the Arizona market heating up a few years ago, I decided to start investing outside of Arizona. I chose Utah because it wasn’t overheating. What a great decision that turned out to be. Arizona has gone down in value and in rents and my Utah properties continue to do well.

I don’t suggest investing in just any state, however. Choose a state you are familiar with and even locations you understand. Make sure you do your due diligence on the market. Remember that becoming an expert at your investing is crucial to your success. It’s very difficult to be an expert in lots of different markets. I chose Utah because I grew up there and knew the market well. Work with your Wealth Coach on choosing your markets as well as your team.

If you would like more information on building a wealth team or finding a great wealth coach, contact us at 866.467.5809 or cs@provisionwealth.com

Warmest regards,

Tom

Here is a question that was asked recently by Vita about Social Security benefits:

Q: For those 65 and older and eligible for social security, are they still able to earn something (and if so, what is the annual limit)? How does having an IRA or an employer pension plan affect their eligibility for social security? Thank you!

A: Let's start but recognizing how absurd it is that the government punishes people for working. That's right. If you work "too much" you don't get all (or in some cases, any) of your social security payments. Still, the rules are not nearly as bad as they used to be. In fact, if you wait until your "full retirement age" then you can earn all you want and not lose any of your benefits. For those who were born between 1943 and 1955, full retirement age is 66.

If you take social security payments before you reach full retirement age, then your benefits are reduce by $1 for every $3 you earn in excess of $37,860 until you reach full retirement age. If you lose benefits because of your earnings, then your benefits will increase when you reach full retirement age to start paying you back for your lost benefits.

Only earned income counts. So, investment income, passive income and retirement income from pensions and annuities don't count and you can earn all you want of these types of income. So having an IRA or pension plan doesn't have any effect on your Social Security benefits.

For more about these and other social security questions, go to http://www.ssa.gov.

Warmest regards,

Tom

I often tell my students to focus on one single asset class for building their wealth. Many students focus on paper assets, such as option trading, or real estate. Some, like Brian, want to focus on business. Business is perhaps the most difficult asset class and yet, it is clearly the one with the most potential and the fastest way to build wealth (and my personal favorite). Brian asks the following questions about building his businesses.

Q: I want to build multiple businesses and either grow them myself or earn a royalty from inventions. I assume that building scalelable businesses from stratch is the best way to achieve my cash flow goal of $14,000,000 per year or $280,000,000 in net worth. However, what should I do with my businesses to achieve that amount of cashflow? Would it be most feasible to licence out my businesses, sell them privately, or would I need to do an IPO? Do you think I have time to focus on another asset class, or should I just remain focused on one given growth asset to achieve my cashflow goal and just take the excessive cash and invest in high leveraged real estate as well as build controlling interests in established small to midsized growth companies? How do companies compensate their controlling shareholders if they aren't paying out dividends?

A: I agree that building scaleable businesses are the best way to achieve your aggressive cash flow goals. Business has the most leverage of any of the asset classes and the best tax benefits for velocity. In order to achieve high cash flow, you must first, achieve maximum tax reduction (since taxes are the biggest drain on business cash flow) and then you must achieve maximum velocity of the cash flow.

I suggest you begin with a business and tax strategy. You need a plan to build your business and keep your cash flow moving while continually lowering your taxes. This plan will include the answers to whether you license out your business ideas, franchise them, or do an IPO. It will also address the quesiton of how to compensate your shareholders and what to do with the excess cash flow.

For more information on developing a tax and business strategy, visit our website at http://www.ProVisionWealth.com or contact Gennifer at my office at 866.467.5809 and she can set up an appointment for you with one of our business and wealth strategists.

Warmest regards,

Tom

Any of you who have heard me speak about building wealth or purchased our educational course entitled, "Creating Massive Passive Income," realize that I am adamant about focusing on a single asset category, such as business or real estate or paper assets. I use the examples of Bill Gates and Donald Trump to show that this is the true way to build substantial wealth.

One of our students, Bill, has a question about this. I'm going to paraphrase his question, as it is quite lengthy. Here it is:

Q: Mr. Wheelwright, I am working through module 2 "Creating Massive Passive Income", and I here you specifically state that we should focus on just one asset class and maybe two asset classes, but no more. I think I should be investing in all of the asset categories, especially since I have considerable training in finance and business. What are your thoughts about my situation? Even Donald Trump invests in entertainment besides investing in real estate.

A: Bill, I am going to stick to my guns on this. I, too, have considerable training in finance and business, having created my own successful business from scratch and built considerable wealth. If it's okay, I would like to share my personal experiences and failings to help you understand why I feel so strongly about this.

I view investing in asset classes outside those of your true expertise as an unnecessary and significant distraction. Nobody can be good at everything. I, myself, learned this the hard way. Every time I have tried something outside of my true expertise, I have paid the price. Let me refer you to one of my favorite authors, Malcolm Gladwell.

In his book, Outliers, Gladwell explained that those who have truly excelled in their field beyond the ordinary success all shared certain commonalities. The one common attribute they all shared that is within everyone's control is that they all had 10,000 hours or more of dedicated experience in their field of success. This includes the Beatles, Bill Gates, and every other person Mr. Gladwell researched.

My own experience tells me that Mr. Gladwell is correct in this assessment. If you want to be truly great at business, you must stick to your business. If you want to be truly great at real estate, focus on real estate.

I'm not saying that you cannot be moderately successful investing in all asset categories. I'm saying that to be absolutely the best and to build the most wealth in the fastest way, you must focus on a single asset category.

You are certainly welcome to try your method of working in several different asset categories at the same time. I wish you the best of luck. This simply is not my personal recommendation. As for Donald Trump, I have to believe he would be more successful at his real estate business if he spent less time at the Miss USA pageant. Of course, this could really just be a hobby for him and I am not one to criticize anyone for their hobbies, especially those that involve evaluating hundreds of beautiful women.

Warmest regards,

Tom

In this economy, lots of people are getting laid off. Good people who work hard and are dedicated to their employer. One of these, Savas, sent in the following terrific question about his situation.

Q: Dear Tom, My name is Savas and I would like to ask you a rather complicated question. I had an food import and distribution business since 1999 up to 2008 which was closed due to lack of financial intelligence and bad advising, and I then worked as an employee in a toy company for 1,5 years, from I was fired last month due to the recession (I doubled checked with them, I always went the extra mile). So, when the problems started in my business I came across Robert Kiyosaki's and philosophy and I recently attended a seminar you had. So my question is what kind of advice would you give in a person like me, to start over and create wealth? Everybody says to continue be an employee, pay my debts , and climb the corporate ladder, however this is not me. What would you do if you had no funds to invest? How would you start? Thank you so much, Seeking desperately for advice, Savas

A: I have been in this situation before, Savas. I worked for a company that was a good company and laid off many employees who were good employees simply because the economy lagged at the time. I myself was fired from another company. Let me share a few thoughts with you.

The challenge I have with being an employee is that you are at so much risk all the time. You really have no control over your life. You cannot even earn more money by working more if you are salaried. I like the idea of having multiple customers, not just one (employer). That’s why I started my company. After I lost my job, I was concerned about my family and what would happen if I continued to look for jobs and then be at risk.

Also, it sounds like you enjoyed being an entrepreneur. That’s very important. I’m like that. After my first year in business, I told my wife that I would never go back to being an employee, no matter how difficult it became financially. Making this strong of a decision was important, so I wouldn’t look back and wonder. And I love being an entrepreneur. The control over your life, the amount you can contribute to other’s lives, and the lower risk by having multiple customers is great.

I suggest you go through our Strategic Wealth Coaching program. It is designed to get our clients who want to be entrepreneurs into the right business for them and then get them in a position where they are always improving their business and their life. Call Gennifer at 866.467.5809 and she will set up a time for us to talk.

Warmest regards,

Tom

One of my favorite types of investing is Angel Investing. With Angel Investing, you invest in a start up company with huge potential and with good management. Our question today comes from Brian, who is interested in investing in other companies in a significant way. Here is his question:

Q: I am currently focusing on building green technology and environmentally friendly companies as a repeat business builder. However, after about 10 years, I would like to settle down to my life's wealth vision. I see myself operating a private investment business remotely from my caribbean home and yacht. I have control over when I want to invest my money to build my wealth further, so I can pick up anytime and spend time exploring the globe with family and friends. My question is related to the private equity and venture capital firms vs. how I desire investing. I want to invest in energy technology companies and nonprofit companies in all stages of growth with a diversified portfolio within green technology and and non-profit with regards to capitalization of the companies, but always investing to take a minimum of 10% interest in the company of interest and continue to build my position overtime as the company grows. Can I do this remotely via technology and decide when I want to invest without operating an active private equity fund or venture capital fund, but still build a team of advisors to help me make informed decisions? I guess I am trying to wrap my head around the technicalities of investing at this level and in a more passive than active role considering I want controlling interest in the companies I fund. Also, would you comment on whether this would be considered business or paper, since I will be a passive private investor and dealing with stocks, debt, and derivatives to acquire the companies? Thanks for you help in clarifying my expectations and vision. It get more exciting everyday with focus.

A: So, Brian, you want to control companies without working in them on a day-to-day basis. Sounds like you would like to be a VC (Venture Capitalist). VC’s always want to control the companies they invest in. VC’s normally come into a start up not only with capital but also with management expertise. They want to turn around a company, build it and sell it. They put in lots of hours to do so.

I wonder, though, whether you want a controlling interest in a company you are not working. As the majority owner, you will be at the most risk for the company’s success. Personally, I would rather look at investing in more companies as an Angel investor if I were not wanting to be actively involved in the company. This spreads out the risk.

You will want to be certain that each company has excellent systems and reporting set up, including internal controls and accounting systems. For more on this, see our series of wealth strategy courses at www.provisionwealth.com/products.

This would also be an interesting question to discuss on one of our monthly calls, so feel free to bring it up on our next call as well.

Warmest regards,

Tom