Category: Insights

The rich play the game of money very differently. The rich know that the real way to wealth is via cash flow, and if managed properly, cash flow can be both substantial and tax-free. -Robert Kiyosaki

We’re talking smart tax-planning this week. And it all starts with understanding the true nature of the US tax code.

Simply put, the tax code was designed to help entrepreneurs and investors minimize their tax liability. I know that’s not what we’re led to believe in school. But it’s clear as day.

Consider this – the federal tax code consists of over 70,000 pages. Yet, less than five percent of those pages are about paying taxes. The other 95 percent are all about how to avoid paying the taxes that the first five percent says we owe.

This is what Kiyosaki’s quote above speaks to. If we understand the tax code, there are countless ways to reduce our taxable income.

Continue reading “The Deepest Secrets of the US Tax Code”

Autumn continues to descend upon us up here in the Virginia highlands.

Temperatures dropped down into the 40’s for the first time this past weekend. It was a blustery Saturday morning.

From the comfort of our great room we sat and watched many leaves pull free from their trees and gradually flutter to the ground. To me, no television show could ever match that level of entertainment.

This image tracks Fall’s progression up here. The picture from the left is from last week. The one on the right is from yesterday.

We should see peak foliage within the next few weeks. Stay tuned for that.

Shifting gears back to finance…

Continue reading “The Power of Tax Write-Offs”

It’s not what you make, it’s what you keep.

I stumbled upon this old adage many years ago. It’s a simple thing. But it’s always kept me focused on what’s truly important when it comes to money and investing—the bottom line.

This saying means that financial success isn’t just about how much money you earn. It’s about how much of it you are able to keep after taxes and other expenses.

If you want to build wealth over time, you must maximize your after-tax income. That’s the name of the game.

Fortunately, the U.S. tax code makes this easy to do. There are endless deductions we can take. That is, if we’re investing in the right assets and doing things the right way.

Deductions, also known as tax write-offs, reduce our taxable income. They enable us to lower our tax bill by subtracting eligible expenses from our total income. The more deductions we can qualify for, the less taxes we’ll owe.

For example, suppose you earn $100,000 this year. Given current tax rates, you’ll owe $17,400 in federal income taxes. Ignoring state and local taxes for simplicity, this gives you a net income of $82,600. That’s what you keep.

Now, let’s suppose you can qualify for $35,000 in tax write-offs.

Continue reading “It’s not what you make…”

Serious talk today…

I’ve been sharing stories and pictures of Fall descending upon us up here in the mountains all week. This is my favorite time of the year. But only because I’m now in a position to enjoy it. I wasn’t always…

I don’t talk about this often, but I’m a reformed corporate banker.

I say “reformed” because even though I’ve studied money my entire adult life…

I made every mistake in the book when it comes to building wealth. For example:

I once watched a stock go from $7 to $80 a share… only to ride the elevator all the way back down to $10 per share again – erasing all my gains. 

I’ve even had to pull money out of an IRA early – only to be on the hook for taxes and the 10% penalty. Ouch.

I once poured $10,000 into a small-cap stock – only to watch this “sure thing” go absolutely nowhere. 

I blew tens of thousands of dollars trying out “new” trading systems. I might as well have set that money on fire for all the good it did me.

I learned the hard way – “piecemeal” investing just doesn’t work.

Continue reading “Don’t make the same mistakes I did”

Dad, this year for my birthday I want a real laser. Like something that can cut through things. Then I can help you cut the grass…

That was my boy’s birthday request this year. I thanked him for his desire to help his dad out… but I pointed out that such a strong laser may be dangerous. What if it cut the wrong things?

Don’t worry Dad, I’ll only use it on things you say are okay.

You have to love the imagination of a child.

My guy just turned five… and he’s an absolute tornado of energy. It’s such a joy to watch him grow and explore the world. Here he is blowing out his candles:

In our household, we have one overarching rule: treat others as you would like to be treated yourself.

Nice and simple. Everything else flows from this one principle. A wise man once called it the Golden Rule.

The kids know very well that I expect them to diligently follow this Golden Rule—especially as they get older. With growth comes expectations… there are no excuses.

And I think a similar dynamic holds true in the world of finance and investing.

Continue reading “Growth and Expectations”

Fall continues to close in on us up here in the Virginia highlands.

The leaves continue to brighten. The morning fog thickens. What a joy it is to experience the changing of the seasons.

The following pictures bring these words to life. I posted the first in one of my missives last week. The second is from yesterday.

In the book of Ecclesiastes it says “for everything there is a season”. One doesn’t have to be Christian to appreciate the wisdom in those words.

And what’s true of nature is just as true of life. We all go through seasons.

Birth… growth… play… work… and eventually we each become just like that leaf falling from the tree. Once robust and beautiful, we each will one day become but a memory.

Perhaps that comes across as a downer. But I don’t mean it to be.

To my way of thinking, it all comes down to a single question: what will we do with this incredible energy while we have it?

Continue reading “For everything there is a season”

This past Saturday was the annual “Fall Fun Day” up here in the mountains of Virginia.

Each year in October – just as the humidity disappears and the leaves start to turn – we get together for a day of food, fun, and fellowship. I didn’t count, but I believe we had eight or nine families and eleven or twelve kids running around this year.

The activities consisted of old-fashioned potato sack races, a candy corn relay for the kids, and a Saran Wrap gift ball chocked full of neat prizes.

In total I think we spent seven hours at the event—all of them outside. I can’t help but think that the old-world harvest festivals may have borne some resemblance to this.

And for the sake of memories, everyone was asked to leave their handprint on a tapestry in paint. Here it is:

The older I get, the more I realize that it truly is the simple things that mean the most in life. And I think the same holds true in the world of finance and investing.

Continue reading “It’s the simple things – in life and in finance…”

Fall has descended upon us up here in the mountains of Virginia.

Every day a few more leaves turn yellow, orange, and red… and every day the morning fog seems to be a little thicker. I love it.

For some reason I always think of the frontier days during this time of year.

We are way up in the Appalachian mountains. The population here has always been sparse—and that’s accentuated now that the nearby towns have lost roughly 50% of their population over the last several decades.

Apparently this area was predominantly settled by the Scotch-Irish back in the 18^th century. They must have been the only ones crazy enough to think they could farm such a rugged, mountainous landscape.

It’s also well-documented that several of the prominent American founders made the trek to these lands once a year back then. Both George Washington and Thomas Jefferson were known to visit this area often. They came specifically to bathe in the hot springs which are prevalent up here.

The springs were considered to have healing properties back then. If you ask the local resort, they’ll tell you the springs still do.

I don’t know. Maybe they know what they are talking about. This is the same resort that was around back then. It was founded in 1766. Both Washington and Jefferson would stay there when they visited.

This kind of history fascinates me. But then my gaze shifts…

Continue reading “Through the eyes of a child…”

Fall is upon us up here in the mountains of Virginia. This is by far my favorite time of year.

Humidity has disappeared. Mist slowly rolls across the mountains each morning. A cool breeze blows from the west. The leaves are beginning to turn yellow, orange, and red—one by one.

It’s simply amazing. And invigorating. Every day I say a silent prayer of thankfulness. I’m thankful to be here in this place at this time.

This is my first note to you in over a week. We’ve been busy putting together our first real marketing campaign for our trail-blazing investment membership The Phoenician League. Amidst the hustle and bustle I just haven’t found time to write.

That’s on me. But I’m happy to say that I’ve learned some valuable lessons these past few weeks. The biggest of which is this…

Continue reading “Fall is upon us in the mountains…”

We’ve been talking all week about the need to shift our approach to personal finance and retirement planning. The Age of Paper Wealth has ended… and what worked reasonably well the last forty years is not likely to work well going forward.

Yesterday, we dived deep into the art of asset allocation. And we pointed out that if we want true financial security, a robust asset allocation model is how we get it.

If that narrative shifted your perspective, brace yourself, because today we’ll be challenging a deep-seated notion even further. The entire idea of retirement.

When we say ‘retirement plan’, what’s the first thing that comes to mind?

For most, it’s a magic number. Maybe it’s $1 million. Maybe it’s $5 million. Maybe even more…

We’ve been conditioned to believe that if we can just hit our number, we’ll be able to retire early and finally be free from the job. We can hit the golf course in the morning and lounge by the pool in the evening.

But I have to ask… Have we ever stopped to question the very foundation of this idea? Is it really necessary to compartmentalize our life like this?

Let’s consider Mike W. for a minute. Mike was the very first member of our investment membership The Phoenician League. In fact, Mike helped me pioneer the approach we advocate within the membership.

Starting from nothing, Mike built a passive income stream of over $4,000 monthly. All in just a few years—using our approach to “retirement”.

Translate that into a yearly figure, and we’re looking at over $48,000. That’s not eye-popping. But it’s nothing to sneeze at either. Who wouldn’t want an extra $48k coming at them every year?

Plus, Mike’s just getting started. He will continue to grow his passive income year after year after year.

Now, if Mike had utilized Retirement Inc.’s magic number approach, where would he be today?

That of course would depend on how his financial portfolio performed—which we can’t possibly know. But what we can know for sure is this: with their approach Mike would have no passive income today.

Then if Mike needed to tap into his retirement funds, he would have to sell some assets and pay taxes on the proceeds. Talk about a fragile model. You can only do this so many times before you’re out of money. Then everything you spent your life working for is gone.

But with passive income streams, the concept of ‘running out’ becomes obsolete. As does the entire idea of retirement.

This isn’t just theory. It’s a revolution in financial planning.

The concept of retirement is rooted in an era gone by. It’s based on a time when pensions and fixed incomes were the norm. What’s more, it was designed to kick old people out of the work force to make way for the next generation of workers.

In our current economic climate, with its uncertainties and volatility, wouldn’t it be wiser to aim for continuous streams of income, rather than banking on a lump sum that might or might not last you through your sunset years?

That’s not to diminish the importance of savings. But imagine a scenario where instead of chasing a magic number, you cultivated multiple streams of passive income. In this narrative, ‘retirement’ isn’t an end-goal but rather an ongoing journey of financial stability and growth.

It’s about changing gears from saving for retirement to investing for income. With passive income, the concept of retirement fades away. Instead, we witness the dawning of financial freedom, where you’re not bound by age or a set figure in your bank or brokerage account.

Now, this shift in mindset doesn’t come without its challenges. It requires guidance, mentorship, a network, and above all, action. This is where The Phoenician League shines.

We’re not just about information; we’re about transformation. And implementation. Our model helps members transition from the conventional to the revolutionary. Our network and community provide the tools and support to make this shift seamless and profitable.

Remember, many of our members, like Mike W., have started building passive income within just a month or two of implementing our approach. You could be one of them.

As we gear up to open our doors to the wider public next month, a window of opportunity presents itself for those who seek a different path—one where retirement isn’t the destination, but financial freedom is. If you want to be part of this revolution, now’s the time.

Join our waitlist today at The Phoenician League Membership Platform to lock in today’s rates. We’ll be in touch very soon.

-Joe Withrow