Module 1

The Truth About Taxes

Lesson 6
Patterns & Formulas

Transcript
I'm an accountant. As an accountant, I like to see the numbers. Because when it comes down to
it, it's all about the numbers. And I know some of you, not all that comfortable with numbers.
Well, we're gonna make you a lot more comfortable. We're gonna make the numbers real
simple. I just want you to focus on certain numbers. And when you get certain numbers, you
don't have to do the math. I'm gonna do the math for you, don't worry about that.

I want you to look at certain numbers though, and I want you ... Just take an example here.
Let's say that you have $10,000 to invest, and you invest that $10,000 at 10% for 30 years,
okay? 10% for 30 years. Let's look at the difference here between paying tax and not paying tax.

If you pay tax on the income, just on the income - we're not talking about paying tax on the
$10,000 - just on the income, and you reinvest that income after 30 years, you'll have $60,000.

Now, for most of you, you're going, "Wait, wait a minute, I thought my income ... It only
doubled every 24 years." We're giving you a better rate of return here, 10%, not 3%. So, at 10%
you'd have $60,000, you're going, "Wow, that is great! That's way better than I'm getting now."

But look at what happens if you don't pay tax. Look what happens if no longer have to pay tax.
You go to almost $200,000. $10,000 to $200,000, why? Because you didn't have to pay tax... on
the income and we're able to reinvest more of that income. Remember, it's Tax-Free Formula,
it's Tax-Free Wealth. We're talking about how to build massive amounts of wealth because you
have more money to invest, even if you don't change the way you invest. In this case, going
from 60,000 to 200,000, that's almost 3.5 x the return, remember? What has to happen in the
right education? Our returns have to go up. Our returns have to go up 3.5. That's a return going
up, simply because you don't pay taxes on it.

TaxFreeFormula.com
Now, just a little caution here. Some of you are thinking, "Well, wait a minute, I don't want to
get in trouble." Nothing we're going to talk about throughout Tax-Free Formula will ever get
you in trouble with the IRS, HMRC, whoever. Because everything we're talking about is
specifically within the law, specifically within the law. So, how do we do this in such a way that
we understand a context, in other words, we understand why this is happening? I'm a student
of tax law, but more than anything, I'm a student of education. And I love solving problems.
Here's what I've learned about solving problems. In order to solve a problem, we have to
recognize the patterns. We have to see what's going on, what's the pattern of what's
happening.

We have patterns in the environment, weather patterns ... predict the weather. The reason
meteorologists can do that is because they see the weather patterns. They can see what
happens, when one type of weather occurs, it creates another type of weather someplace else.
Those are patterns.

If you look at plants and animals, there are patterns in their behaviors. I love to watch the
whales in Hawaii, they come to Hawaii every year. That's a pattern. I know I can go to Hawaii in
February and see the whales. Why? Because there's a pattern. So, if I want to see the whales in
February, I don't go to Alaska. No whales in Alaska in February, they're in Hawaii. You recognize
the patterns. Once you recognize the patterns, it's fairly easy to come up with a solution. Most
people, though, stop right here. They develop a solution to their specific situation and they go
no further. The problem with that is that they have to come up with a new solution every time.
That takes a lot of time, and money, and effort to come up with a new solution every single
time. However, if you see how the patterns work in a more general context, what you can
develop is a formula. And that formula will work every single time.

So what you're going to discover over the next 7 modules is this formula, the Tax-Free Formula,
the formula to reducing and eliminating your taxes permanently right within the law, with
never having to worry, "Is the IRS going to come after me? Is CRA gonna come after me?" No.
Because this is the formula, this is the way it works. So we're gonna learn, how does the tax law
work, and why does it work that way? Once we do that, we've got a formula that we can apply
in any situation. Take a minute to discuss that, explain that to your partner, how recognizing
the patterns can not just help you develop a current solution, but a solution to every single
problem. Ready? Go.

So the first question is, how do you think about taxes? How do most people think about taxes?
They think, "Uck, that's so boring!" They go, "Oh, it's so difficult!" So here, here we go. Boring,

TaxFreeFormula.com
right? All right? I know, I know how most people think about it: boring, difficult, and confusing.
That's how most people think about taxes.

Not Tax-Free Formula! In Tax-Free Formula, taxes are fun, easy, and understandable. Now, I can
prove to you right now that they are fun. It is very simple. It goes like this: everybody loves a
refund. What we're going to do in Tax-Free Formula, is we're also going to make it easy and
very understandable. You know, Einstein was quoted once as saying, "The most difficult thing in
the world to understand is the income tax." Einstein just never had it explained to him. He also
said, by the way, that any 6 year old can explain something to a genius but it takes a genius to
explain something to a 6 year old.

Apparently, Einstein's accountant couldn't even explain it to a genius. What we're going to do,
though, is we're going to explain it in a fun, easy, and understandable way.

TaxFreeFormula.com