There’s just one thing that will cost you more than anything else over the course of your lifetime. It will cost you more than your housing and rent, food, kids, debts, healthcare, food, cars, college or any other big expense you commonly think about.
You will pay more in taxes than any other single expense throughout your life. Such is the world we live in.
This means you need to get good at taxes.
When I was a young man in my early 20’s, since I didn’t go to college (because it’s become a useless rip-off in 95% of cases), I had to educate myself. From age 17 to about age 25, I read over 600 books on success, business, customer service, investing, people skills, and numerous other things, including taxes.
Taxes? Yeah, because I knew taxes were going to be the biggest expense of my life. I had to get good at paying the legal minimum of taxes.
So do you.
One of your goals should be to understand how to save the largest amount of taxes and pay the absolute legal minimum you can possibly pay. This is much easier if you’re self-employed, since because we live in a corporatist society, 95% of tax law is written for companies, not individuals. However, even if you’re an employee, there are some things you can do to reduce your taxes.
There are lots of resources, but the best/easiest one is to get this book, read it, and make a plan. Every year, he comes out with a new version, so if you’re serious about this, you should re-buy the book every few years, if not every year. I do.
One emotional hurdle you may have in this big government, corporatist, quasi-socialist world we live in is a thought that goes something like this: “Yeah, no one likes to pay taxes, but hey, government is important, and we need to fund it to make sure poor people get food to eat and that we have roads and libraries and stuff. I don’t know… trying to pay the minimum of taxes, even if it’s legal, seems kind of shitty.”
As I’ve shown here, the percentage of tax dollars that actually go to needed services, like roads, is friggin’ microscopic. In many cases, it’s around 2%. The VAST majority of your tax dollars collected go to things like paying old people, paying lazy unemployed people, bombing civilians in distant countries who’ve never attacked you, paying off wealthy bankers, buying perks for politicians and their cronies, paying interest on debt that should have never been incurred in the first place, and crap like that.
And don’t get me started on how much money your government flat-out wastes, regardless of what country you live in. Easily 40% of tax dollars collected are wasted via fraud, waste, and abuse. Many think that the 40% figure is conservative.
So please, for the love of Christ, don’t have any moral compunction about paying the legal minimum of taxes. Your government either wastes your money or puts it toward things you disagree with. Again, I’m talking about the legal minimum. Do not break the law. Trust me, there are so many legal things you can do to reduce your taxes that you won’t have to.
In my seminars, I talk about the percentage of my total income that I actually pay in taxes. I’m not going to publicly state it here, but it’s very small; guys are always shocked when I reveal it. As compared to the typical guy who makes my income, I pay a small fraction in terms of annual taxes. And it’s all legal.
So stop wasting money. Get that book and figure out how to start paying fewer taxes legally. There’s no reason not to.
UPDATE/EDIT: I’m getting a lot of questions about this, so to clarify:
1. Botkin’s book I recommended is for US citizens only. If you live outside of the US, it can help you, but only in very general terms, thus I can only half-recommend it.
2. I have no books or resources I can recommend for you if you are not a US citizen. I’m sorry. You’ll have to use Google, Amazon, and other resources, do some research, and find something. Consider that one of your key projects. I’m sure there are similar resources for every Western country.