Alex Hormozi: I paid 0% tax on 56% of my income...here's how..

The video is about Alex Hormozi sharing his knowledge and experience on how to save taxes, including the four beliefs about taxes that have improved his life and the three primary costs that people do not account for when using tax shelters.

This video by Alex Hormozi was published on Jan 27, 2022.
Video length: 35:21.

In this video, Alex Hormozi shares his knowledge and experience on how to save taxes.

He talks about his personal journey of spending over $1.6 million in legal and accounting fees to figure out the best tax structure and paying over $30 million in taxes in the last five years. He shares his four beliefs about taxes that have improved his life and made him a lot of money. He also explains the three primary costs that people do not account for when considering tax shelters and provides tips on how to save taxes.

At the end of the video, he gives six consolidated takeaways that viewers can use to save themselves taxes and make more money.

• Alex Hormozi shares his knowledge and experience on how to save taxes.
• He paid 0% tax on 56% of his income.
• He paid over 30 million dollars in taxes in the last five years.
• He spent roughly 1.6 million dollars in legal and accounting fees to figure out the structure that he has today.
• Tax shelters cost more than they save you.
• The cost of discovery, conversion, and upkeep outweigh the tax savings.
• Big wins, not tax shelters, drive net worth the most.
• Wealth comes from the appreciation of equities, not income.
• Orders of magnitude, not incremental thinking, is the key to building wealth.

I paid 0% tax on 56% of my income...here's how.. - YouTube

Introduction

• Alex Hormozi shares his knowledge and experience on how to save taxes.
• He paid 0% tax on 56% of his income.
• He paid over 30 million dollars in taxes in the last five years.
• He spent roughly 1.6 million dollars in legal and accounting fees to figure out the structure that he has today.
• He will share his beliefs about taxes that have improved his life and the three primary costs that people do not account for when using tax shelters.

Four Beliefs About Taxes

• Tax shelters cost more than they save you.
• Tax shelters decrease your net worth.
• Tax shelters diminish your life.
• Tax relators don't make you a better person.
• What tax shelters save you, they cost you more in other resources.

Three Primary Costs of Tax Shelters

• The cost of discovery and conversion.
• The cost of upkeep.
• The cost of unwinding.
• 95% of solutions are swampland and 5% are legit.
• The cost of discovery is the cost of the time and the attention that it takes you to sift through all the crap to figure out the one out of 20 that is actually worth it.

I paid 0% tax on 56% of my income...here's how.. - YouTube

Six Consolidated Takeaways

• Pay your taxes.
• Focus on making more money.
• Invest in yourself.
• Be careful who you take advice from.
• Don't let taxes dictate your life.
• Don't be afraid to pay for good advice.

Bonus Set of Beliefs

• Believe in yourself.
• Believe in your ability to make money.
• Believe in your ability to solve problems.
• Believe in your ability to create value.
• Believe in your ability to learn.
• Believe in your ability to adapt.

The Cost of Tax Shelters

• Tax shelters cost more than they save in the long run.
• The cost of discovery, conversion, and upkeep outweigh the tax savings.
• The cost of unwinding and fines can be significant.
• The IRS is often three to five years behind in closing loopholes.
• Using tax structures for purposes other than intended can result in fines and legal costs.

Tax Shelters Do Not Increase Net Worth

• Simply moving to a tax-friendly area does not increase net worth.
• Surrounding oneself with people who obsess over tax savings can lead to thinking in increments rather than orders of magnitude.
• The big wins, not the small tax savings, drive net worth.

The Three Primary Costs of Tax Shelters

• The people: the richest people in the world often live in high-tax areas.
• The thinking process: obsessing over tax savings can lead to thinking in increments rather than orders of magnitude.
• How fortunes are built: focusing on big wins, not small tax savings, drives net worth.

The Four Beliefs About Taxes

• Taxes are a necessary part of society.
• Taxes are an incentive system.
• Taxes are a reflection of one's success.
• Taxes are a reflection of one's values.

The Importance of Building Net Worth

• Big wins, not tax shelters, drive net worth the most.
• People disproportionately focus on tax savings instead of building net worth.
• Surrounding yourself with people obsessed with tax savings is not the best way to build a fortune.
• Building a fortune requires thinking in orders of magnitude, not increments.
• Fortunes are made by taking a lot of risk with a little bit of money and maintained by taking small amounts of risk with a lot of money.

The Role of Equities in Building Wealth

• Wealth comes from the appreciation of equities, not income.
• 94 out of the top 100 growth came from appreciation, not income.
• Net worth is built by what you build, not what you make.
• Increasing the value of your business is more important than the income you derive from it.
• Appreciation of equities is the primary driver of building net worth.

The Math Behind Tax Savings

• Increasing the value of your business is more important than the income you derive from it.
• Net worth increase is based on the appreciation of equities, not income.
• 56% of net worth increase is tax-free.
• Increasing the value of your business is the primary driver of building net worth.
• Tax shelters do not increase net worth as much as people make it seem.

The Importance of Thinking in Orders of Magnitude

• Manufacturing fortunes requires a massive multiplier on equities.
• Increasing the value of your business is more important than the income you derive from it.
• Letting the value of your business compound is more important than tax savings.
• Orders of magnitude, not incremental thinking, is the key to building wealth.
• Tax shelters do not improve your life as much as people make it seem.

Inverted Priority

• Putting the means of achieving the goal above the goal itself.
• Creating a reinforcing cycle of conditional behavior.
• Forgetting why we started doing the work.
• Claiming that work is the goal.
• Flipping the priorities and sacrificing freedom to get more means.

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I paid 0% tax on 56% of my income...here's how.. - YouTube