Tax-Free Wealth Book Summary - Tax-Free Wealth Book explained in key points
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Tax-Free Wealth summary

Tom Wheelwright

How to Build Massive Wealth by Permanently Lowering Your Taxes

4.3 (425 ratings)
15 mins

Brief summary

Tax-Free Wealth by Tom Wheelwright is a finance book that teaches how to legally reduce taxes. It provides strategies to increase wealth by using tax laws, maximizing deductions, and creating a personal tax-free plan.

Table of Contents

    Tax-Free Wealth
    Summary of 5 key ideas

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    Key idea 1 of 5

    Make sure you’re earning the right type of income.

    Did you use to earn pocket money as a kid? Maybe you got money from your parents for shoveling snow, or cleaning the windows. Chances are, you didn’t really care where the money came from – you were just happy to have it and spend it.

    Well, you’re not a kid anymore, and you’re probably looking to earn a lot more than pocket change. There are different ways you can get money, and they are not taxed equally.

    There are four types of earners: employees working for a salary, the self-employed, big business owners, and investors. It’s these last two – businesses and investors – that are taxed at the lowest rate.

    Think about it. What does the government want? More jobs are good for the economy. New jobs are created by businesses and entrepreneurs, so the government rewards these people by lowering their taxes.

    What else does the government want? Affordable housing. Once again, governments offer huge tax breaks to real estate investors, because they want to encourage that sort of behavior.

    You may be thinking, That’s great, but what if you’re on the employee or self-employed side of the spectrum? It’s simple: if you want to get the tax benefits, you’re going to have to shift your income into one of the other areas. It’s not as hard as it seems – thousands of people all over the world take courses in business or investment and change the way they earn.

    Now let’s look at the different ways you can receive income. Think of your income as if it were filling up one of five buckets – each with a different amount of holes through which money can be lost to tax.

    The first bucket is earned income. This one has the most holes in it – you're going to lose a lot of money to income and employment taxes. Try to stay away from this bucket.

    Let’s call the next one your ordinary income bucket. This is income you might be getting from your pension or retirement plan, or whatever income won’t fit into the other buckets. This still receives the highest income tax, but it doesn’t get the employment tax like the first bucket.

    The next bucket is for investment income – things like capital gains, interest, and dividends. This income is taxed at a much lower rate, and in some cases, not at all!

    The fourth bucket is for gifts or inheritance. In most countries, the tax is paid on the side of the person giving the money, so nothing is lost when it lands in your bucket.

    Finally, you have the passive income bucket. This is money that you receive from a business or investment which isn’t managed by you personally. This is taxed at a regular rate, but there are many ways to reduce this amount.

    That brings us to the topic of the next section – how to patch the holes in those buckets using a miraculous little thing called deductions.

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    What is Tax-Free Wealth about?

    Tax-Free Wealth (2012) takes the mystery out of taxes. It offers priceless insights on taxes and tax planning that you can use to ultimately build your wealth. Drawing from professional experience and a deep understanding of tax law, it breaks down the principles and rules underlying the best financial planning, and shows you how the laws are there to help you save your money.

    Tax-Free Wealth Review

    Tax-Free Wealth (2012) by Tom Wheelwright explores the power of tax planning and how it can help individuals and businesses legally reduce their taxes. Here's why this book is worth reading:

    • By providing practical strategies for minimizing tax liabilities, the book empowers readers to save more money and increase their wealth.
    • Through real-life examples and case studies, Wheelwright demystifies tax laws and breaks down complex concepts, making it accessible and easy to understand.
    • The book goes beyond tax tips and offers a holistic wealth-building framework that encompasses entrepreneurship, investing, and maximizing deductions and credits.

    Who should read Tax-Free Wealth?

    • Business owners and investors who are frustrated to see their income lost to taxes
    • Tax haters who find themselves dreading tax season every year
    • The financially ambitious who want to earn a lot – and save a lot more

    About the Author

    Tom Wheelwright is the founder and CEO of ProVision, the world’s premier Certified Public Accountant firm. He is the leading expert on partnerships and corporate tax strategies, and has created innovative tax, business, and wealth consulting services. Apart from writing several articles for professional journals, he has also contributed to the books The Real Book of Real Estate, Who Took My Money?, and Unfair Advantage.

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    Tax-Free Wealth FAQs 

    What is the main message of Tax-Free Wealth?

    The main message of Tax-Free Wealth is to understand the tax laws and use them to your advantage.

    How long does it take to read Tax-Free Wealth?

    Reading time for Tax-Free Wealth varies, but the Blinkist summary can be read in just 15 minutes.

    Is Tax-Free Wealth a good book? Is it worth reading?

    Tax-Free Wealth is worth reading because it provides valuable insights on minimizing taxes and maximizing wealth.

    Who is the author of Tax-Free Wealth?

    Tom Wheelwright is the author of Tax-Free Wealth.

    What to read after Tax-Free Wealth?

    If you're wondering what to read next after Tax-Free Wealth, here are some recommendations we suggest:
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    • Dropshipping by James Moore
    • Quit Like a Millionaire by Kristy Shen and Bryce Leung
    • Rich Dad, Poor Dad by Robert T. Kiyosaki
    • The Value of Debt in Building Wealth by Thomas J. Anderson
    • The Unemployed Millionaire by Matt Morris
    • The Science of Getting Rich by Wallace D. Wattles
    • Playing with FIRE (Financial Independence Retire Early) by Scott Rieckens