Make no mistake, my friend, it takes more than money to make men rich.
— A. P. Gouthey
I recently had a call with an investor that paid over $600,000 in taxes in 2024.
That’s a lot of money!
Which means, of course, they’re making a lot of money.
In a lot of ways, that’s a good problem to have.
You make a lot of money, so you have to pay a lot in taxes.
But I still feel sad about it, because it doesn’t have to be that way.
There are three killers that can attack your wealth:
Inflation, taxes, and fees.
Today, I’m getting into what to look out for and how you can protect yourself.
Let’s go!
1. Taxes
You can position yourself in investments that give you an unfair advantage
I know real estate investors who pay almost no taxes.
For most high earners, taxes are the number one expense they have.
I worked with a couple of physicians who made over $2 million a year and they’re paying up to 60% in taxes.
If you studied Robert Kiyosaki’s Cashflow Quadrant, you know there are four quadrants to keep in mind.
If you’re an employee, you’re typically paying up to 40% in taxes.
When I was an employee making $250,000 a year, I had about a 25% tax rate.
Since I left and became a real estate professional, I am paying 1%.
It would be zero, but I live in California.
On the other hand, if you’re a highly paid self-employed person, which is what my physician friends are, you’re paying close to 60%.
That usually breaks down to 40% for federal, plus state taxes.
If you live in California, state taxes can be up to 14%.
You’re also paying the self-employment tax, which is what can jack that number up to 60%.
That’s pretty crazy!
This is why reducing taxes is so important.
Find a strategy that works for you to tackle taxes head-on.
2. Inflation
Inflation is also a huge wealth killer.
If you’re just putting money in the bank during inflation, you’re only saving money, which can be good.
Overall, though, savers are losers.
I don’t mean “loser” as in you don’t have bright prospects.
If you only put money into savings, you’re losing money during times of inflation.
Currently, the U.S. Bureau of Labor Statistics says inflation is hovering around 2% to 3% with most items.1
It feels like a lot more.
If I go to the store, the food is twice as much.
Gas is twice as much.
Everything is twice as much.
Inflation is a huge killer if you only have cash or assets that don’t appreciate.
Saving money is not a virtue anymore.
Saving and investing are both virtues that go hand-in-hand.
Find your perfect balance so you can hedge against inflation.
3. Fees
In his book, Money: Master the Game, Tony Robbins says there are a lot of fees in Wall Street people don’t legally have to disclose.
This is true even for mutual funds and retirement accounts.
Those fees can total around 3.2%.
Plus, you’ll have a 2% fee from your advisor if you have one.
You’ll think you’re only paying an advisor, but then the hidden fees will kick in.
When you add everything together, you could be paying an extra 5.2%!
How is even that possible?
Returns for the stock market are typically about 6% to 8% per year.
When you average out the highs and the lows, a big chunk of your money goes to those fees.
That’s why I’m on a mission to get people out of Wall Street and get them into Main Street.
Not only do you have to deal with exorbitant fees, but there are also other risks.
These risks can include: supply and demand, cycle fluctuation, changing achievements of the marketed companies, excessive speculation, and illegal operations.2
4. How to Move Forward
I want to talk to you about how I’m positioning myself to deal with these wealth killers.
I’m a passive investor.
My company partners with other investors and operates different kinds of deals.
For example, we have 2,500 multifamily units.
Real estate is great for the tax benefits.
It’s great for the inflation hedge.
Unfortunately, it’s not great for cash flow right now.
If you’re someone that needs cash flow, consider private lending.
I know a lot of people who are trying to quit their job and fire themselves.
You need cashflow to do that.
A lot of money someday won’t help you if you’re looking to leave your job.
Investments to help you do that would be things like oil and gas and private businesses.
There are also debt funds on the real estate side, where you become the bank.
We offer all those things.
Oil and gas is amazing because 85% of the costs will be reimbursable in year one against ordinary income.
It’s kind of the magic silver bullet.
For years, it’s been that way in the tax code.
If someone makes $200,000 a year and put $100,000 into one of these deals in year one, they’ll reduce their taxable income to around $120,000.
The savings on an $85,000 income could be up to $40,000.
You’re saving money on the front end, and then you also get some back end when the investment starts producing cash.
We also love private businesses because the cash flow is so strong.
Now I want to hear from you!
What investments are you doing to protect your wealth?
Let us know in the comments.
Before you leave, make sure to check out our special report about inflation investing. It shares the best choices to invest during an inflationary environment.
If you are interested in investing with us, we are happy to answer any questions that you may have. Join our investment club today and we will be in touch.
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Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific tax or investment advice on what you can do. For this, seek professional help. I am simply giving my opinions.
Works Cited
1. “Consumer Price Index.” U.S. Bureau of Labor Statistics. Accessed June 2, 2025. https://www.bls.gov/cpi/.
2. Cao Liang-l. “A Discussion on the Market Risk of Stock Investment.” Journal of Chongqing Petroleum College (2001).
