Tax Intelligence
WARREN BLACK: Yes! How are you al
Who thinks tax is boring? Come on, b this is probably going to be the most bo whole room, come on, put your hand u your pillow? Anyone ready for a nap?
Well I'll tell you one thing, you're abou something totally amazing. You're abou awakened up to what really tax and ass we have to do it; what we're about here Let the games begin.
Our mission is to educate you to keep teach you to make, help you to make. N important? You can come to this semin amazing amount of information. You ca business on eBay, you can learn how to can learn how to invest in shares, you c accelerate yourself into a multimillion d but I'll tell you something, if your found is going to happen? It will collapse.
As a lawyer, my main task is actually f come to see me who have got cancer a how to prevent getting business cance
fixing problems when people come to see me. By and nd they want me to cure it. Really what I am going to r, financial cancer and how to be structured.
any people will spend thousands of dollars to come t nto wealth creation. But when it comes to spending
or $30,000 to start trading options, "Oh, crikey, I could ke money and you could lose it just like that.
I tried many times to get him into a trust. He kept sa on in one month in a freak run on the stock market;
MEET WARREN BLACK
Warren Black
Tax Intelligence
He suddenly came to me and said "Can you put this money into a trust, I've realised I've got a big tax problem?" What was my answer to him? Too late.
So by him not spending a couple of thousand dollars probably cost him 50 to $100,000 later on.
How good is your foundation? More wealth brings more responsibility. If your assets aren't properly protected it means if something goes wrong, guess what? Someone can sue you. So you can learn all the strategies at your seminar,
everything you want to learn, and just like that, you could lose it all.
But if you've got the protection in place, minimising tax and you've set up right from the beginning, you build your house right from the beginning because a sure foundation, guess what, you can make wealth and security moving forward knowing that you've got a foundation.
There is a little Bible passage I put here "My people are destroyed for lack of knowledge because you have rejected knowledge, I've rejected you". Many of us reject knowledge. We just choose to ignore it. Rejection can be just as much choosing to ignore, making a choice to put that aside for now, as compared to actually learning knowledge.
We are destroyed through ignorance. "You shall know the truth and it is the truth that will see you free". Alfred the Great, a great King of England in 1800 or so, AD, said "How knowledge liberates, knowledge is power". So essentially knowledge is what makes us powerful. Knowledge is what gives us - it's the ones who have knowledge who have power, who have dominion and who are not subordinate.
The reason why Nik Halik and others are speaking at this seminar today is they have knowledge, that knowledge has created wealth, that wealth has created power. Very simple.
Okay, what we're going to cover today in the time we've got, we're going to cover how much tax do you pay? Just a brief introduction to how our taxation system actually does work in Australia. Some secrets of the rich that will excite you.
Stuff which the rich people know and are applying in their business, in their wealth creation life, and which essentially many of you would know very basically or not even know at all.
Secrets of the rich in business, for those of you who want to do eBay, who want to invest in a new business, who want to go into franchising, who want to do internet business. Some secrets there that will help you moving forward. Secrets of the rich for trading, investing. Secrets of the rich, going overseas. The world is going more global. Markets are opening 24/7. Things are happening faster and faster at virtually the speed of light at the moment. The world is moving quickly and if we don't start to get a global mindset, not just about wealth creation but with our structuring and how we think, we're not going to be able to move with what's coming.
Warren Black
Tax Intelligence
Estate planning. When you die, what is going to happen to your wealth? Is your loved ones properly protected? Come on, let's be honest, who's got a will here? Who hasn't? Probably half of you - probably quite a few of you not being honest, but anyway, we normally find about 30 or 40 per cent of people just don't have a will.
Tax in the 21st century and a little bit about moving forward.
How much tax do you pay? Australia is one of the highest taxed nations in the world. Now who thinks that we pay a reasonably high amount of tax in Australia? We do. The average small business they say, spends one day a week, one day a week, just on compliance issues alone. How's that? Just simply complying with government paperwork and
requirements.
So how can we think we can ignore our tax and asset protection issues? As a lawyer I regularly have people come to me and believe me on thing, let me tell you something, if the tax office comes to audit your affairs they're not going to look at your intention and what you believed you were doing right. They're going to objectively look at what documentation, what structuring you've got in place and guess what, if it doesn't stand up what's going to happen? You're going to be in trouble.
I've sat there representing clients in tax audits before the ATO, I've been an auditor for the ATO and audited people and believe me, when you're auditing someone in hindsight you're only there for one purpose, to go strictly through the books and see if everything has been done correctly. If it hasn't, not only do you have to pay back taxes but there are nice little penalties and interest waiting for you which usually means effectively double your tax bill, because normally an audit happens a few years later and more and more frequently audits are happening.
In Australia we have a progressive rate of income tax which simply means the more you earn, the higher your tax rate goes up. One of the things the rich know is how to circumvent that to some degree and in some cases to an extraordinary degree.
Do you want to take proactive choice to do something about this? Who wants to be proactive about this? It's about choice. As Kurek Ashley said earlier, it's all about your choice, it's about being responsible, it's about being empowered and it's about being empowered in dealing with government, it's about being empowered with your tax affairs.
It's about being empowered to say "I'm going to be wealthy, and because I am so convinced and my vision and my certainty of wealth is so great, I know that I am going to put the extra money in today to properly structure myself, to build my foundation secure as well as to be educated to make money. I am going to do the two in perfect harmony. As I get my greater knowledge on how to make more money I am going to get more knowledge on how to structure".
Warren Black
Tax Intelligence
Because the more money you make and the more assets you've got, the more responsibility, the more you need to be properly structured in your affairs. Do you think someone who's got $20 million and five world-wide businesses has got more structuring knowledge needed than somebody who just runs a small business down the street? -- Yes.
Absolutely. Your wealth creation knowledge must grow along with your tax, business asset protection knowledge.
You see, Australians are generating wealth at an increasing rate but others want that wealth, let's face it. The Tall Poppy syndrome. As you get wealthy, there are others who are going to want their share: governments, people who want to sue you, who don't like the fact that you've got money when they don't, that's a fact of life.
New South Wales is the third most litigious State in the world per capita right now. Who knew that one? I wouldn't say that many. What are you doing about it?
Are you serious about knowing and applying the secrets of the rich? If you don't know about companies and trusts, chances are, you're not getting the maximum tax benefits and asset protection. The secrets of the rich: companies and trusts.
Who is excited? -- Yeah.
Who thinks it's the best session yet? Absolutely! The rich know how to make money but they also know they need to have a good system. Rich people know that as well as making money they must save and properly protect their assets.
Kerry Packer, there was a beautiful little story about Kerry, about how the tax office apparently decided they were going to chase down his trusts and apparently to cut a long story short, they ended up in New Zealand, then they ended up in the Cook Islands and each time they got to a new jurisdiction the trusts had moved and ended up coming all the way back and ending up back in Australia again, in a big circle.
They have actually passed special laws because they were so annoyed with him in 1999 to deal with it, but because they affected unintended people they changed them again, but it just goes to show, somebody who is empowered, what they can do.
Matthew 24 to 27 in the Bible says that a wise man builds his house upon a rock. Who knows this one? Who went to Sunday school, anyone? A wise man builds his house upon a rock, a good foundation. The foolish man said "I want to build mine on the sand". We just heard John Chapman do a property presentation. Rick Otton is going to be doing one tomorrow. Just imagine buying a property and saying "We're not going to worry about the foundation, we're going to save some costs here, let's just build it down on the swamp". What's going to happen to your house? That's what it's saying.
Warren Black
Tax Intelligence
So very simply, if you're going to build your tax and asset protection foundation on a poor foundation, on sand, on swamp, guess what's going to happen? One day all that wealth you spent years building will just be gone, just like that.
Believe me it will.
Companies and trusts are the vehicles that the rich use. Robert Kiyosaki says you need to know not just how to make money, you need to know about companies and trusts. You need to know about how the rich make money through them. You need to know about marketing, you need to know how to sell. The reason why people are successful in business is they know how to sell themselves. Believe me, I am sure there are better lawyers out there than me, but guess what, I am a very good lawyer but I also have the ability to have value in what I do and present it. And that's like Nik Halik, I'm sure there is probably people out there who've got more trading knowledge and more business knowledge, like anyone, but it's the ability to not just be good in your field but also to present and have a balance.
That's what makes you wealthy, being excellent in your field but also knowing marketing, understanding how to sell, how to present value in what you do and also to know asset protection, companies and trusts, how to build a secure foundation.
Who is starting to see the picture? Who thinks it's a whole lot of rubbish? Let's look at asset protection. Why do we need to protect our assets? Well law suits are increasing daily. Now here's a few little funny anecdotes, true stories though. A woman slipped on a beverage in McDonald's, some coffee. She sued and won. The problem was she threw it at her boyfriend 30 seconds earlier in an argument.
What about the woman who tripped over a rampant toddler in a furniture store and sued the owners? Do you blame him for being surprised, considering that it was her own son? And what about the man even in Perth, about six years ago, sued a pub because he was drunk and went out and sued them for not taking his keys off him and guess what, he won.
In other words, law suits are about "I'm not responsible". It is about breaking down responsibility and wealthy people who sustain their wealth take responsibility. They make choice, they make empowered choices and they do something about it and that's what we're really about anything else, to take responsibility. Don't just say "I'm leaving it in my accountant's and lawyer's hands". Get empowered, know your stuff, make sure that you challenge your lawyer. I shouldn’t be saying this but make sure you challenge them, make sure they know what they're doing. Make sure you know if you've got a good accountant or a good lawyer because if you don't, guess what, the tax law does not say "You get let off because you had a bad accountant or lawyer". You still are fully liable. Who knew that? A hundred per cent liable.
You can sue your accountant and lawyer but after you've spent 50 to $100,000 going through the Courts and spending a couple of years of your life it becomes less appealing. So be empowered. If you did nothing else today, be empowered to keep the money that you make and be properly structured from the beginning. Be empowered, because it is the question of empowerment and responsibility, nothing else. Are you going to take responsibility for your wealth?
Warren Black
Tax Intelligence
Insurance may not cover you. Many people say "I'm insured", well we've known insurers to not cover you, that happens.
Creditors and taxes may plunder you. You can be liable for the debts of others in business. You can be liable for back taxes. Who got caught in those forestation and tea tree oil plantation schemes, anyone? Yes, you would understand exactly what I mean how the government can arbitrarily change a law or change a policy and just like that, a 200 grand bill turns up on your doorstep and you have to either go to Court or pay it.
Man of straw. Very important, now this is just - to make this very simple in asset protection try and think "MAN OF STRAW, PERSON OF SUBSTANCE", particularly if you're in a situation where you've got one of you - like, in a business partnership or in a marriage - which is in business and at risk of being sued and one of you which is not.
The man of straw is at risk of attack and signs his name to everything; the person of substance is not at risk of anything.
So in other words, they control the assets but not at risk, so in other words they sign nothing, own everything. The man of straw signs everything, owns nothing.
E.g. John is a doctor and Jenny stays at home because there's 19 children; a reasonably fulltime job. Just a few more than we've got. John is the one at risk of being sued, not Jenny. So who should be the straw man? John. He is the one at risk. Who should be the one who controls the assets? -- Jenny.
That's right, Jenny should be very, very rich; John should be very, very poor and all the people of substance here said
"Yes". What are you doing about your asset protection?
Now let's look at companies. So we're going to look now at companies and trusts. Now who's getting excited? Are you falling asleep yet? Do we need to do a massage or star jump? -- No.
Okay. So what is a company? Now a company exists in the realm of fiction. Nik talked this morning about when the Federal Reserve Bank - about the whole money situation, it's an illusion, and it’s a fiction. Well, guess what, a company is your vehicle into the matrix in the world of fiction. Who has seen The Matrix?
A company is a fictitious entity. If I said to you "I want to go visit BHP Proprietary Limited tomorrow" what would you say to me? If I said "No, I want to meet BHP himself", what would you say to me? "You're living in a fiction". BHP is only represented by physical people and assets or whatever upon a tangible earth. A company is just a fictitious entity, that's all it is. It exists in a fiction world. It is your vehicle into the matrix to get a nice share of the wealth that's out there in the matrix.
Companies are taxed at 30 per cent. The reason why people like companies and why the rich use companies is because shareholders are only responsible to pay amounts for owning their shares. Directors of companies have some protection, they go to arms' length from people they're dealing with.
Warren Black
Tax Intelligence
So in business when you're dealing with BHP there's an arms' length between the directors and the people they're doing business with. If Warren Black has a company called W Black Proprietary Limited and you do business with W Black Proprietary Limited then you have - I have a firewall between myself and you. So if you're going to sue me, you're going to have to come first through my firewall, my fiction entity, to get to the real person and that's the beauty of it, the rich know this.
Now I might add, and I am going to cover this later on, asset protection is not about being morally irresponsible. That doesn't empower you. That will sabotage your wealth in other forms. Asset protection, and hear this carefully, is about you being empowered to make the choice as to whether you're morally responsible and not somebody else. Who likes
Now I might add, and I am going to cover this later on, asset protection is not about being morally irresponsible. That doesn't empower you. That will sabotage your wealth in other forms. Asset protection, and hear this carefully, is about you being empowered to make the choice as to whether you're morally responsible and not somebody else. Who likes