Sector 3:  The Business Owner

I’m going to differentiate the business owner from the self-employed in the following way: he/she is not required for the business’ daily operations.  Your tax benefits are still the same as the self-employed, but your tax deductions are increased due to factors such as employee salaries, cost of operations or increased working space.  You do not have to be in the office from 9 to 5, but rather have a stream of income that generates through out the day without the need for you at its beck and call.  This leaves you free to pursue other interests or spend more time with your loved ones – and after all, time is money!

Sector 4:  The Investor

This is the category with the most benefits and if played well the most income prosperity for the least amount of time and effort.  The investor is the one that has the best economic benefits when it comes to taxation.  Rather than accumulating wealth through income alone, profit for the investor can come as either ‘income’ (the stream of money) or ‘capital gains’ (the increase in the value of the investment).  The government only requires you to pay taxes on half of your capital gains.  So, taxable income generates a profit prior to taxation and only a portion of this profit is taxed!

‘The rich get richer’ is not just a saying, but an actuality of our tax system.  The more benefits you receive free of charge and the less taxes you pay, the more efficiently your wealth is working for you.  It doesn’t mean we should all go out and quit our day jobs though!  The best strategy is to spread yourself across multiple categories.  Money isn’t everything in the world, but making the most of what you earn will increase your standard of living in the present and help you save for the future.

– Gajanan Kuganesan

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