Finding the right tax strategy can take time, but according to “Rich Dad, Poor Dad” author Robert Kiyosaki, learning how to use the tax code to your advantage can help you be an above-average investor.
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In a recent article, Kiyosaki shared advice from Tom Wheelwright, an author with expertise in three investment areas that provide tax benefits. These sectors include real estate, oil and gas, and agriculture.
Seasoned investors considering investing in these economic sectors should consult with an accountant first to understand how to invest in these markets and take advantage of the tax benefits that come with it.
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Real Estate
Kiyosaki explained that in order to make real estate as profitable as possible, it’s important to understand how the tax code can benefit you. He encouraged his followers to use debt to their advantage.
With real estate, for example, investors can borrow money from the bank to purchase cash-flowing real estate. Then, because of depreciation, it’s possible to own a cash-generating property, but show tax losses.
This technique, like many Kiyosaki recommends, is for investors who are comfortable working closely with accountants who can ensure they choose the right property that makes the most financial sense.
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Oil and Gas
According to Kiyosaki, investing in oil and gas comes with tax advantages. The reason, according to author, tax expert and “Rich Dad” advisor Tom Wheelwright, is that the United States wants to reduce dependence on foreign oil. Therefore, the government provides tax benefits to those who invest in U.S.-based oil and gas projects.
A licensed accountant can provide individual advice on how much of your initial oil and gas investment you can deduct.
Agriculture
The article explained that many different countries offer tax breaks for agricultural businesses. That’s because agriculture is central to a thriving economy. In the U.S., farmers can deduct 100% of the “ordinary and necessary” costs of running a farm (seeds, feed, and more) when it’s purchased. This isn’t the case in other types of businesses, and has significant tax advantages.
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This article originally appeared on GOBankingRates.com: 3 Ways To Not Be Average When Investing, According To Robert Kiyosaki