7 Strategies the Rich Use that You Don’t (But Should)

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After reading all the hoopla about Mitt Romney’s tax returns (I think it would be fascinating to read his returns just to see what sorts of loopholes and tricks his accounting/tax team uses… I don’t begrudge him for doing exactly what I’d do – minimize tax payments by following the rules as written), I start doing a little research into the sorts of strategies the rich use to avoid as much income tax as possible. When the wealth have marginal tax rates north of 30%, it’s amazing how much low tax rate income they must have to bring that number down into the low teens.
Here are a handful of strategies that they use that, while not always 100% accessible to the average person, are at least within the realm of possibility: (i.e. you won’t see carried interest mentioned once!)

Build a strong network

I wanted to start the list off with something that anyone can do but that the wealthy, especially those who derived their wealth in business, do very well – networking. One thing you’ll recognize very quickly is that the most successful individuals often know the most number of people. While it may appear that it has to do with the wealth they’ve generated, that’s often the result of the network itself. Think about some of the more successful people in your workplace, the people who can “get things done” and a lot of it has to do with the other people in the organization that they know. When I worked at large companies, some people were able to circumvent the arduous process cycles to get their work at the head of the line or completed with extra attention to minimize errors. It’s entirely based on networking (read: friendships).
And networking is a delicate process. We all know about the guy who introduces himself and within minutes has his business card in your hand. Or the friend who just joined a multi-level marketing “business” and wants you to buy [insert products here]. Networking is about being a nice person, finding out what other people do, and then, at some later time, figuring out if you can work together. You have to build a network before you need it because rushing the process will turn people off. (what this really means is just be nice to people and don’t think about networking as building a network, think of it more like making a lot of friends that you hope, one day, you can help somehow in a tangible way)  (more)