The Win-Win Wealth Strategy: 7 Investments the Government Will Pay You to Make by Tom Wheelwright

The Win-Win Wealth Strategy: 7 Investments the Government Will Pay You to Make by Tom Wheelwright

Chapter 1
Partnering with the Government
“Play by the rules but be ferocious.”
—Phil Knight
My first full-time job was with Ernst & Whinney (today Ernst & Young) in
its Salt Lake City office. With a master's degree from the University of
Texas in hand, I soon learned that even in accounting firms, there were
office politics. I was an extremely ambitious young accountant, and if there
were office politics in play, then I was going to win. I didn't like office
politics or make the rules of the game, but everyone was in the game,
whether they wanted to play, or not.
I remember telling my manager at the time, “If I have to play the game, I
might as well win it.” Within two years, I joined the firm's prestigious
National Tax Department in Washington, DC. Thousands had applied, but
they only selected five of us to play. I had played the game well and won.
The game of taxes
The game of taxes is like my career at Ernst & Young. While nobody really
chooses to “play” the tax game or has much if any control over the rules of
the game, we are in the game. It's all about how we'll play the game and
whether we will win or lose. Since we must play the game, we can choose
what kind of player we'll be. Will we be a bench player or an amateur like
most taxpayers, or will we be professionals and dominate the field like the
rich?
Another way to look at the relationship between taxpayers and the
government is as partners. Like it or not, we are all partners with our
government. We share a portion of our income in return for services
provided. Every time we receive a paycheck, the government takes a
portion in taxes. While it's not really a voluntary partnership, it is one
nonetheless. There is a famous scene from the sitcom Friends where the
character Rachel receives her first paycheck. “Isn't this exciting?” she says.
“I earned this! I wiped tables for it, I steamed milk for it, and it was totally
… not worth it. Who's FICA? Why's he getting all my money?”1
The government doesn't really care what kind of partner we are. As a silent
partner, we pay our full taxes at the highest rate possible, typically up to 40
percent or more. As an active partner, while doing what the government
wants us to do, we can pay very little tax and build massive amounts of
wealth at the same time. The government is very keen on encouraging
investment in government-favored activities through tax breaks in exchange
for us taking the risk of the investment.
To win the game of taxes while participating in socially beneficial activities,
you must understand the rules of the game. While some may bend the rules,
any professional athlete knows that the best way to be successful on the
field is to understand the rules completely and discipline yourself enough to
play the game to the best of your ability within the rules.
Few people understand the rules of the tax game. Even the rich don't
necessarily understand them. They simply have advisors who do —
advisors who know the Tax Code inside and out. They do what these
advisors tell them, and they win. The average taxpayers cannot afford such
advisors. They must learn the game on their own, and because of this, they
start out at a disadvantage. The government, who creates the tax game, also
makes the rules, and knows them well. They have the advantage of a huge
team of agents defending the rules and practically unlimited resources to
enforce them.
The object of the game of taxes
If you want to win the game of taxes, you need to understand the object of
the game. The object is not merely to reduce taxes. It's to build wealth
that will never be taxed.
By the end of this book, you will clearly understand that building wealth is
not something frowned upon by the government. In fact, the government
encourages wealth building so long as the wealth is used for government-

sponsored activities. The best path to building generational, tax-free wealth
is understanding how to best partner with the government. Believe it or not,

The Win-Win Wealth Strategy: 7 Investments the Government Will Pay You to Make by Tom Wheelwright