Increase your wealth by reducing your taxes

Before giving a speech at Toastmasters
Before giving a speech at Toastmasters

In our journey to build wealth we are constantly looking for ways to increase revenues, reduce expenses and invest wisely.

If you earn more than $20,000 per year guess what is one of your biggest expenses…

Taxes!

In Canada, a person in a higher income bracket is already paying more than 50% of his income in taxes. If you add sales tax, property tax, gas tax, cigarette tax, alcohol tax, corporate tax, school tax, import duty, and all the other taxes I don’t even know about, high earners are getting a royal screw by the government and by the rest of us less well-off people.

Canada is a wonderful country. We have so many social programs which are the envy of so many other countries in the world. But, please people, be aware that all those social programs are not free. Someone is paying for all of them. I will take a second to express my gratitude to all the tax payers who support our social system. Thank you!

However, as much as a society  benefits from the tax revenues, it’s the responsibility of each individual to find legal ways to reduce his/her taxes.

Here are some tips to reduce the tax burden:

Funny
Funny

Change your source of income

For some reason, our government has decided to tax different sources of revenue in different manners. Employment income and interest revenues are taxed at a higher level than dividends and capital gains.

Let’s look at some examples. Assume that your tax bracket is 40%

If you earn $50,000 in salary, you pay $20,000 in taxes (ouch)
If you earn $50,000 in interest, you still pay $20,000 (ouch again)
If you earn $50,000 in capital gains, you will pay $10,000 (this is more humane)

So, the trick is to change your income as much as you can from salary and interest to capital gains.

In addition, the government has created special accounts which allow us to pay NO TAXES (such as the Tax Free Savings Account) or accounts which allow to defer taxes many years into the future ( Registered Retirement Savings Plan).

Pay your taxes decades later

How would you feel if you have a debt and your are allowed to pay it 10, 20, or 30 years later. Would you take it?

This is exactly what the government allows you to do when you open a Registered Retirement Savings Plan (RRSP) account. The taxes that you owe today could be paid decades from now.

Assume again that you earn $50,000. You can take $18,000 and deposit it in your RRSP account. Now your taxable income is $38,000. Your tax bracket is reduced. You pay a smaller percentage of taxes on a smaller amount of money. When you retire at age 65, you can withdraw your $18,000 plus whatever gain it made and you will pay regular income tax on that money.

Pay $0 taxes

This is the biggest gift the Canadian government has given to taxpayers. We are all allowed to open a Tax Free Savings Account (TFSA). Money in a TFSA can grow 100% tax free. The only drawback is that there is a limit in the amount of money we can deposit in a TFSA. For 2016 the limit is $5,500.

Conclusion

Tax reduction is the low hanging fruit. Very few of us use all the opportunities we have at our disposal to reduce our taxes and our expenses.

Many people consider tax self education very boring, but this kind of education can pay high dividends for the rest of your life and remember, dividends are taxed at a lower level.

Now (and always) is the worse time to invest in bonds

With friends on a rainy day
With friends on a rainy day

Anytime anyone goes to a financial adviser two things happen:

  1. The financial adviser will only recommend their “in house” products — you know, the ones that have 2-3% management expense fees.
  2. They will ask you your age and they will miraculously show you a fund that is tailored made for all people your age.

We have already spoken about point #1 in previous posts. For sure, financial advisers will ALWAYS offer you the funds with high expense fees, because they get paid kickbacks, called trailer fees. Those kickbacks represent the major portion of their income. But guess what? Those trailer fees come out of your pocket. It is to the advantage of the financial adviser to always recommend the products which pay the best commissions for him/her. There are hundreds of low cost index funds and ETFs which financial adviser will never recommend, because even if those low cost index funds and ETFs are the best products for their clients, there is no commission involved. The investment adviser’s job depends on your ignorance.

On point #2, they are equally inept. The typical formula to choose a portfolio of stocks and bonds distributed like this: 100% stocks minus your age. That means that if you are 30 years old, you should have a portfolio of 70% in stocks and 30% in bonds. If you are 50 years old, you should have 50% in stocks and 50% in bonds, and so on. Really? the major contributing factor is our age? How about if I am already a millionaire? How about if I can hardly pay my rent? How about if I am good health? How about if I am in bad health? It doesn’t matter, he/she will simply look at the table his employer gives him and plunk you into the bracket recommended in their sales manual.

Historically, stocks have always been a better investment than bonds, but investing in bonds has always provided a false sense of security. In fact, what they provide is reduced volatility. We should not confuse less volatility with less risk. On the long run, bonds ARE NOT less risky than stocks, they are less volatile.

The reality is that the more bonds you have in your portfolio, the more you are handicapping your growth potential. Why would anyone slow down their money earning potential only because they are older? When you are older, when you need your money the most, it is precisely at that moment when you would like to get the most out of your money.

Here is another thing that is killing me. Sure, we all have heard that no one can predict the market and that a diversification between stocks and bonds is the prudent thing to do. But there is a moment in time when you can put rules of thumb to the side and use your common sense.

This part is a bit technical but this is how bonds work:

If interest rates goes down, the value of bonds goes up. If interest rates goes up, the value of your bonds goes down.

At this moment, August 2016, interest rates are at a record low. They are about 1%. If Interest rates don’t have much room to go down, then the value of your bonds don’t have much room to go up.

However, interest rates have a lot of room to go up. If interest rates go up, you will lose money. The potential to lose lots of money is very high.

Knowing this,why would anyone put any percentage of their hard earned money in bonds? Your probabilities of winning are low and your probabilities of losing are high. You are better off keeping your money under your mattress.

Conclusion

  1. Look for a fee only financial adviser.Don’t get a financial adviser who makes his/her living out of commission, he/she will only offer you the products which give him/her the highest commission.
  2. Don’t have any bonds in your portfolio, especially now but ideally never. Why would you shortchange your return. Even after retirement, you still would like to see your money to grow.

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How to get the most happiness out of your money


How much is this moment worth?
How much is this moment worth?

Money can buy a lot of things, but to have a lot of money in your bank account should never be the main objective in your life. Once you have covered your basic needs of food and shelter, your most important objective should be to be happy. So how do you get the most happiness out of your money?

Here is what I have learned through reading and personal experiences.

Buy experiences, not things

I am a member of a club called McGill Toastmasters. It is a club devoted to learning speaking and leadership skills. We meet for two hours once per week and it costs me $12.50 per month ($1.56 per hour). In exchange I get a fantastic learning experience, I get lots of entertainment, and I get to network with many interesting people who have become close friends. The $12.50 I spend every month is one of the best purchases of happiness in my life.

I met my friend Cheryl about 10 years ago (2006). At that moment I discovered that she had been going to the same coffee shop every morning for many years. At that time I was reading The Automatic Millionaire. David Bach, the author, writes about “the latte factor.” He explains that if we save the amount that we spend on lattes, we can all become millionaires. When I explained this concept to Cheryl and suggested that she stop going to the coffee shop she was taken aback. She explained to me that it was not about the coffee, but about the experience of having a coffee in a place that provides so much happiness. For Cheryl, this is one of the most precious moments of her day. She is investing in an experience and she is getting a great return for her money.

You don’t have to spend much money to buy a beautiful experience. You can spend time with friends at the park, at the bar or at a restaurant. It’s those memories with your friends which will bring a smile to your face, not the latest gadget nor the latest clothing item.

Buy time

The glorification of “busy” is over. At one time I used to admire people who were always busy, now I admire friends who take time for themselves and for their friends. Many of my friends have packed agendas from the moment they wake up until they go to sleep. Many of these friends have high paying jobs. It is interesting to see how they have so many things but they don’t have time. Time to go to the gym, time to have a beer with a friend, time to sit down and watch a sunset.

At one time I was a workaholic. I used to work 10 hours a day, seven days a week. I had money but I didn’t have time. Now, I work part time. I read books at the park, I meet with friends on weekends or weekdays. For me time is more valuable than money.

If you have kids or a spouse that you love, the most valuable thing you can do for them and for you is to spend time together. Go out for a walk, to the park, to the beach, to a dance event. In short give up some of your working hours to spend time with the people you love.

Give

When my ex wife and I got divorced, I invited her to celebrate by going to Cuba. When my daughter got into a fight with her boyfriend, I invited her to Cancun. Giving to the people you love, is one of the most valuable sources of happiness. Don’t give because it’s Christmas or their birthday, give because giving is pleasurable.

Close your eyes, think about someone you love, or think about a cause worth giving to and show your generosity. You will thank yourself.

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Net worth statement, August 1st, $152,000

Net worth continues increasing.
Net worth continues increasing.

The worst month in a long time

Wow, I had such a challenging month. Here is a list of all the things that happened:

  1. One of my neighbors had bedbugs, so we all contributed for the exterminations and for the inspection of the whole building. $100
  2. I had to close one of my Airbnb units because the insurance company refused to insure the building as long as there is any Airbnb in the building. I lost a monthly income of $1,000 plus I have to pay about $3,000 in cancellation penalties.
  3. I had to change all the shock absorbers of my vehicle. $800
  4. I had to put new brakes in my vehicle. $300
  5. A refrigerator broke in one of the rental units. $500
  6. I had to pay for a yearly parking permit. $160

If during the previous month I was celebrating living out from my passive income, this month I am lamenting the end of my passive income. For the moment, to make ends meet, I started working for Uber.

beach
A day at the beach.

Any plans for the future?

I cried and felt sorry for myself for about two weeks, but then I realized how lucky I am. I had a great opportunity to make money from an Airbnb property for almost 2 years. I have a car which has been loyal to me for about two years, and now it helps me earn money through Uber. I have too many things to be thankful for. Life continues being generous to me. I have plenty of leisure time and great friends. All I have is gratitude for my present circumstances.

So here it goes. An overview of my financial affairs:

Date Cash Car Stocks R. estate Debt Total
August 1st 3,790 1,000 96,120 156,440 105,350 152,000
July 1st 3,578 1,250 95,645 155,527 105,000 151,000
June 1st 3,350 1,500 95,505 154,892 104,717 150,530
May 1st 3,249 1,750 95,029 153,408 101,808 151,628
  • Cash is increasing. I want to have enough cash to take a vacation during the winter.
  • My car continues losing value due to depreciation, but I am making $1,500 per month by using my car to drive for Uber.
  • Stocks are happily going up.
  • The mortgages continue getting paid.
  • And due to interest expenses, my debt continues to increase as well.

Goals for August

  • To increase my net worth to $153,000. This goal should be easily attainable.
  • My projection is that my portfolio will increase at the rate of 6% per year. This will be the equivalent of $5700/ year or $475/ month.
  • As for the real estate part, if my mortgage gets paid every month, my debt is reduced and my equity increase by about $500 per month.

Long term goals

My portfolio has finally reached $100,000. This has been a lifetime goal. Now, I have my sights on $200,000.

 

The first $100,000 is the hardest

Charlie Munger
Charlie Munger

Here is a quote by Charlie Munger, vice chairman of Berkshire Hathaway, Warren Buffett’s business partner.

“The first $100,000 is a bitch, but you gotta do it. I don’t care what you have to do—if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit.”

To have a portfolio of $100,000 has always been a professional goal. I have been in Canada for 18 years. The first 5 years don’t count as money making years because I was going to school, so it has taken me 13 years to go from $0 to $100K.

Most people, even those earning $100K per year, will never accumulate this amount of money. I feel extremely privileged to have arrived at this milestone.

How to accumulate $100K

The fast track: If you are a high earner or a successful small business owner, and you save 20% of your income or more, you could probably accumulate $100K in about 5 years or less.

Hanging out with friends
Hanging out with friends

The slow track: If you are a low earner, like me, you can only get there through a lot of discipline, sacrifices, perseverance, etc.

Since I arrived in Canada, I have been a janitor, a busboy, a waiter, an Uber driver, a cleaner, a dance teacher, an insurance salesman, and lately a money coach.

I buy most of my clothes at Walmart or any other discount store. I buy second-hand books and furniture. I buy automobiles which are 5 years old or older. I usually don’t go to bars. I mostly go to restaurants where the plates are $15 or less. I don’t consume much alcohol. I don’t smoke or have other expensive vices. My pleasures are simple. I like reading and writing, I like going to the park. I watch Netflix instead of going to the cinema. And specially, I like giving speaches at my local Toastmasters club.

In spite of my frugality, I live in a cool neighborhood (le plateau), I travel once per year,  I have an apartment which I love, I have a car, a windows laptop, and an android phone. And more important, I have a great community of friends. I have very little and yet I feel wealthy.

I am the kind of person who believes that wealth is available to all of us. If you want it, you can get it. Canada is full of opportunities. There are hundreds of courses a person can take, almost for free, on the Internet. Even a dance teacher like myself has the means to accumulate $100K

The next $100K

The next $100K
The next $100K

If I don’t do anything else to increase my wealth and if my investments grow at the rate of 8% per year, this is how long it will take me to get an additional $100K

To get from 100 to 200: 9 years
From 200 to 300: 5 years and 3 months
From 300 to 400: 3 years and 9 months
From 400 to 500: 2 years and 10 months

These are not real numbers because I have not included the effect of taxes, but you get the idea – money can work harder for me than I can work for myself.

Conclusion

The first step to accumulate wealth is to have a true desire to do it. Saying to yourself “it would be nice to have $100K” is not enough. Don’t listen to advertisers. Fight the urge to buy gadgets and expensive clothes, get a bicycle instead of a car, spend less on housing and frequent less expensive restaurants. If you set your mind to it, you can do it.

How to measure the stock market


bro“Today the market went up by 100 points.” This is a comment we hear in the financial news very often. But what does it mean?  What are they talking about? What are they referring to when they say “the market”?

They are talking about the average price of a group of stocks. Generally this group of stocks represents the economy of a particular country. For example, if we are in Canada and the newscaster says “The market went up by 100 points,” he is referring to the Toronto Stock Exchange index. If a newscaster says the same thing in the US, he’s referring to the Dow Jones Industrial Average (more on that later).

Let’s say that the whole financial market of an imaginary country is composed of only 10 companies. During the day some stock prices will go up, others will go down. At the end of the day the price of all those stocks is added and divided by 10. If the average is higher than the average of the previous day, the announcer would say that the market went up. If the average is lower, the announcer would say that the market went down.

Which indexes are the most relevant to us?
The Toronto Stock Exchange (TSX)

In Canada, the  most important index is the Toronto Stock Exchange (TSX). This exchange was created in 1852 and today is the 8th biggest exchange in the world. There are about 1,600 companies in the exchange and the price of the stocks represents the Canadian economy.

How would you make an investment that represents all the stocks on that index? You would buy an ETF which replicates the performance of the exchange. That ETF is XIU.

The Dow Jones Industrial Average (The Dow)

The Dow Jones Industrial Average is the best known and oldest average in the US. It was first published in 1896 and today is composed of the 30 biggest US companies.

The best way to invest in the Dow is by buying the ETF: DIA

The Standards and Poors 500 (S&P 500)

This index is composed of the largest 500 companies in the US. Because of the diversity of the companies held in this index, it’s considered to be the best representation of the US economy.

The best way to play the S&P 500 is through the following ETFs: IVV, SPY or VOO.

The Nasdaq

The Nasdaq is one of the major stock exchanges in the US. It is an important competitor of the New York Stock Exchange (NYSE). When it was created, all the transactions were done electronically while the NYSE was still taking orders by phone. The stock prices were quoted in the decimal system instead of the fractional system (for example $1 ⅛). And the stocks which trade in the Nasdaq are mostly information technology companies. The Nasdaq index is composed of over 3,000 companies and is now as well known as the Dow Jones and the S&P 500.

The best way to play the Nasdaq is through the ETF QQQ

Conclusion

In the future, when you hear in the press that the market has gone up 100 points, you will have a better idea of what they are talking about.

They say that diversification is the only free lunch in finance and diversification is very easy by investing in the indexes. If you are Canadian, a possibility for your portfolio would be to purchase a bit of the Canadian index, a bit of the S&P 500 and a bit of the international index (We will cover the international index in a future blog).

Bernard Baruch by James Grant: Book Review


How did I find this book about Bernard Baruch’s life

Book cover of Bernard BaruchAbout one year ago I read an excellent book: Reminiscences of a Stock Operator by Edwin Lefevre. So far, that book reminds me of my favorites of times – it is about the life of legendary trader Jesse Livermore. I cannot recommend that book enough.

A few months ago I was listening to a podcast created by  the newspaper Investor’s Business Daily and in the podcast the spokesperson was talking about lessons to learn from legendary traders. The spokesperson said that lessons taught by Bernard Baruch were as valuable as the lesson taught by Jesse Livermore. I had never heard of Bernard Baruch before. I looked him up in Amazon.com, I found the book and I put it on my wish list. A few weeks later, my business partner gave me that book as a birthday present.

I had great expectations when I received the book. My enthusiasm was high and I was eager to get started.

Big disappointment

Spending time with my brother, his wife and two daughters
Spending time with my brother, his wife and two daughters

When I finally got to the book I felt a great disappointment. I felt that I was losing minutes of my life every time I turned a page.

The author, James Grant goes into a lot of detail about the life of Baruch’s grandparents, then about his parents, and finally he starts writing about Baruch.

As he narrates the story, he goes into exact dates and practically all the address where Baruch lived and worked. I could never figure out how knowing the exact addresses of Baruch’s office helps the narration advance.

The subtitle of the book is: “The Adventure of a Wall Street Legend.” However, the content of the book devoted to Baruch’s life in Wall Street was less than 20%. The rest of the book was devoted to Baruch’s life in politics and other services which he performed for the US. The subtitle was totally misleading.

Overall, I was extremely disappointed with the content as well as the narration of the book.

My recommendation

My recommendation is not to waste even one minute of your life with this book. That is my job, to shuffle among many business related books, so that I can find and offer you the ones which are worth reading.

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The frugal birthday party

Hanging out with my friend Elijah
Hanging out with my friend Elijah

Elijah’s birthday party

A few weeks ago, my friend Elijah sent me a Facebook invitation to his birthday party. It was at La Fontaine Park, a 10-minute walk from my place. It was one of those potluck style celebrations. Everyone brought  a little something: Beer, snacks, fruit, vegetables, etc. I brought a six pack of beer ($10) and some fruit ($5).  The party started at about 4 pm and ended at about 11:00 pm. People arrived and left when it was convenient for them. They drifted from one group of people to the other conversing and getting to know each other. It was an inclusive atmosphere and the cost for the venue was $0. I had an amazing time.

Another friend’s birthday party

Birthday party at a restaurant. Big echo, loud music, lots of money, inability to mingle with other people
Birthday party at a restaurant. Big echo, loud music, lots of money, inability to mingle with other people

I hope she doesn’t read my blog. Sometime ago, a friend invited me to her birthday party. I had a crush on her, so I jumped on the occasion without hesitation. The restaurant was big and it was full. There were as many tables as the restaurant owner could fit into the building. The echo of everyone’s voices was overwhelming. I was seated next to and across from people who I didn’t know. One of the people next to me was busy chatting on Facebook. I felt trapped in my seat. There was loud techno music in the background and I had to scream to speak to the person next to me. My friend came to chat with me for a few minutes and then she went off to another table. The food was great, but I had a miserable time. The cost of food and drink was about $60.

Dave’s Birthday party

My friend Dave is a master at the BBQ. Free venue, lovely atmosphere, easy to talk to every one, affordable.
My friend Dave is a master at the BBQ. Free venue, lovely atmosphere, easy to talk to every one, affordable.

My friend Dave decided to celebrate his birthday at a small Indian restaurant. The place was small and the echo was not overwhelming. There was some background music but not too loud. I was sitting next to people who I knew and we were having nice conversations. I was able to speak to friends one table over. The cost for this celebration was about $15 per person.

The ingredients for a good birthday party

Let’s be honest, a restaurant bill of $60 or more is painful for many of us. If your friends have to pay this amount to spend a few hours with you, you are being inconsiderate with your friends. In addition, some of your friends may not come. I have refused birthday parties because I don’t like the price of the restaurant.

How to make an inclusive birthday party

This is just my point of view, feel free to disagree, but I like public venues. Parks are my favorite, but any place where you can get together for free is great. The other option is to rent space in a community center or any place where you can get a good deal. Finally, there are thousands of restaurants in a city. Choose a restaurant with a good ambiance and where the food is not expensive. My personal limit is $20.

I celebrate my birthday every year at La Fontaine Park. Usually, I have between 20 to 30 people attend. We talk, we eat, we drink and we dance from 2 pm to 10:00. All of that for free.

How do you celebrate your birthday?

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Net worth Statement July 1st, 2016. $151,000

Net worth
Net worth

Living out of passive income

Although my passive income has now surpassed my expenses, I still work the same amount of hours as I did the previous month. Money is not my major motivation – it’s the need to feel useful and having a purpose which keeps me going.

This year I met an Uber driver. He picked me up in a nice Cadillac. When we started a conversation, I discovered that he was a retired millionaire who works for Uber two hours every day to break the monotony of his millionaire life.

Going cycling with friends
Going cycling with friends

About a year ago I heard this saying: Those who want to retire can’t, and those who can retire don’t want to. The reason is simple: we all need to have a purpose in life, otherwise we die. Most millionaire/billionaires such as Warren Buffet, Oprah Winfrey and Bill Gates continue working even though they don’t need the money.

So what do I do with my time? I am ashamed to confess that I spend too much time on Facebook. But when I am not in Facebook, I correspond with my tenants, I prepare speeches for my social club McGill Toastmasters, I speculate in the stock market, I read, I study English & French, and I hang out with friends.

Any plans for the future?

If nothing changes in my life, I will be financially secure. But nothing in life is permanent. Life has a weird habit of throwing you a wrench when everything seems to be going fine. Right now, I live in fear of losing what I have accumulated and I am constantly thinking of ways to protect myself.

My life dream is to become a stock market speculator. I am working on my systems, studying everyday, paper trading utilizing different formulas. One day I will be able to come back to this blog and share my results.

So here it goes. An overview of my financial affairs:

  • Cash is increasing. I want to have enough cash to take a vacation during the winter.
  • My car continues losing value.
  • Stocks are happily going up.
  • The mortgages continue getting paid.
  • And due to interest expenses, my debt continues to increase as well.

Here is a breakdown of my net worth:

Date Cash Car Stocks R. estate Debt Total
July 1st 3,578 1,250 95,645 155,527 105,000 151,000
June 1st 3,350 1,500 95,505 154,892 104,717 150,530
May 1st 3,249 1,750 95,029 153,408 101,808 151,628

Goals for July

To increase my net worth to $152,000. This goal should be attainable, but a lot depends on the fluctuations of the stock market.

My projection is that my portfolio will increase at the rate of 6% per year. This will be the equivalent of $5700/ year or $475/ month.

As for the real estate part, if my mortgage gets paid every month, my debt is reduced and my equity increases by about $500 per month.

Long term goals

As soon as my stock portfolio reaches $100,000 I should concentrate on paying down my debt. I feel happy with a $100,000 portfolio. From this moment on, the wise thing will be to reduce leverage and go into a more secure situation.

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Wage Slavery Emancipation

Slave Venture Smith buys his freedom
If a slave in the 1700 can do it, we can do it as well

Slavery in the 1700s

During the late 1700s and early 1800s slaves were allowed to buy their own freedom. They earned money by doing work in excess of what was expected of them. Sometimes they worked for other masters on weekends or engaged in entrepreneurial activities such as fishing or farming.

When those slaves earned extra money, they could have easily spent it buying stuff, but they didn’t. They had a higher goal in mind. They wanted to buy their own freedom.

Here is the story of Venture Smith, a slave who at the age of 31 had saved enough money to buy his own freedom, and 10 years later he had saved enough to buy the freedom of his wife, his son and his two daughters.

Although self-purchase was rare, an 1839 census reveals that 42% of blacks in Cincinnati and Ohio had purchased their own freedom.

Wage Slavery
Alain Guillot and friends at the park
Against Wage Slavery. One of my favorite activities is to spend time at the park with friends. It’s fee and we have lots of fun

It is my belief that today most people live a similar slavery, a wage slavery. Sure, we don’t get beaten by our masters and we don’t suffer physical violence (but we can be put in jail by the tax authorities) but the feeling of slavery is way too similar.

Wage Slavery refers to the circumstances in which a person’s livelihood depends 100% on his salary.

As opposed to the 1700s slaves who were forced into slavery, today’s wage slaves fall into slavery by psychological manipulation. Today’s wage slaves are persuaded to spend money on frivolous things, to buy clothes every season, to buy gadgets every year, to eat in restaurants they can’t afford, to use brand names as a way to signal how unique they are, to buy new cars when an old one would do fine, to live in housing they can’t afford. Today’s slavery is self inflicted. We spend every dollar we earn and then borrow more, we belong to the credit card companies and to the government.

Save to buy our freedom

We are constantly bombarded with all kinds of advertising. We have to buy the new thing to feel unique and special, we deserve it because we are different. But if we take a moment to reflect, we could easily discover that we are being played by corporations and by our governments.

The way to get out of wage slavery is to consume less and invest the savings in a tax efficient manner. We can reduce the power of our two masters, the advertising machine and the government, by saving and investing.

When we reduce our spending and invest our savings, we shouldn’t  think of it as deprivation, we should think of it as a method to buy our own freedom.

When we invest our money, our money works for us. Therefore we are not 100% dependent on our salary. At the same time, we can invest it in a way that allows us to pay less taxes.

If slaves were able to buy their own freedom at the end of the 1700s, we can certainly buy our own freedom today.

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