Hello,
Has anyone read any of the 'Rich Dad Poor Dad' books where he talks about using corporations in his ownership structure? He talks about the order in which people earn, spend and pay tax: i.e.
POOR PEOPLE: earning a salary > then pay tax on the salary > THEN spending what's left over on toys etc, whereas:
THE RICH: earn income (from investments/business usually) into a corporation > spend some of it on toys (via the corporation) > AND THEN FINALLY pay tax on what's leftover.
A great system if you ask me; and sort of what we can do in NZ with things like: using your car for inspections, purchasing office equipment, employing your kids to mow lawns, having some of your home expenses claimed as a business. As long as it's used to earn an income.
But my question is this: Can corporations be used in NZ to purchase 'proper' toys like cars, boats, light plane etc. (In the book, he talks about the corporation buying assets for the benefit of the employees?). Obviously, a property investor doesn't need a boat, car or light plane outright. But maybe a property investor could use his plane or flash new car to search and inspect properties right? I assume we can claim part expenses for this anyway, but what about 100% purchase of a car, or a boat into the corporation?
Is a corporation (as talked about in the book) the same thing as a company (LAQC if involved in property) as we refer to in NZ? And how could this be structured in NZ...legally.
I'm not after anything dodgy of course, nor structuring my affairs purely to avoid tax (illegal anyway) but a legitimate means of increasing my wealth.
For anyone interested, the book is called 'Cashflow Quadrant' part of the purple 'Rich Dad Poor Dad' series of books - I highly recommend it (probably a taxable expense too).
Thanks,
Chief Wigum (stupid name I know but it keeps me anomonous)
Has anyone read any of the 'Rich Dad Poor Dad' books where he talks about using corporations in his ownership structure? He talks about the order in which people earn, spend and pay tax: i.e.
POOR PEOPLE: earning a salary > then pay tax on the salary > THEN spending what's left over on toys etc, whereas:
THE RICH: earn income (from investments/business usually) into a corporation > spend some of it on toys (via the corporation) > AND THEN FINALLY pay tax on what's leftover.
A great system if you ask me; and sort of what we can do in NZ with things like: using your car for inspections, purchasing office equipment, employing your kids to mow lawns, having some of your home expenses claimed as a business. As long as it's used to earn an income.
But my question is this: Can corporations be used in NZ to purchase 'proper' toys like cars, boats, light plane etc. (In the book, he talks about the corporation buying assets for the benefit of the employees?). Obviously, a property investor doesn't need a boat, car or light plane outright. But maybe a property investor could use his plane or flash new car to search and inspect properties right? I assume we can claim part expenses for this anyway, but what about 100% purchase of a car, or a boat into the corporation?
Is a corporation (as talked about in the book) the same thing as a company (LAQC if involved in property) as we refer to in NZ? And how could this be structured in NZ...legally.
I'm not after anything dodgy of course, nor structuring my affairs purely to avoid tax (illegal anyway) but a legitimate means of increasing my wealth.
For anyone interested, the book is called 'Cashflow Quadrant' part of the purple 'Rich Dad Poor Dad' series of books - I highly recommend it (probably a taxable expense too).
Thanks,
Chief Wigum (stupid name I know but it keeps me anomonous)
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