Our recent message “A ratio that can make us rich” reveals a scientific study of Warren Buffet’s investing patterns and a ratio of leverage he uses to accumulate incredible wealth.
That study also uncovered another strategy that Buffett uses to assure his wealth. The study says: “Buffett’s company has financed part of its capital expenditure using tax deductions for accelerated depreciation of property, plant and equipment as provided for under the IRS rules.”
The research showed that Berkshire had reported $28 billion of deferred tax liabilities in the year reviewed.
The papers conclusion was: Accelerating depreciation is similar to an interest free loan in the sense that Berkshire enjoys a tax saving earlier than it otherwise would have and the dollar amount of the tax when it is paid in the future is the same as the earlier savings since the tax liability does not accrue interest or compound.
This is why I want you to read 7 Secrets to Paying Less Tax for the One-Owner Business by Conrad Oertwig.
The report begins: “There is only one secret to paying less tax and that is knowledge.
“One hard fact of life is that taxes are cash. It’s a mistake to think of taxes as taxes. If you want to create more net worth, you need to think of taxes as cash.
“How much tax cash are you leaving on the table? Thousands? Tens of thousands?
“So, let’s explore 7 secrets (great pieces of knowledge) that will enable you to pay less tax, have more cash, and build net worth. I know that’s why you are here, so let’s get started.”