There are many proven strategies employed by the country’s wealthiest families and corporations to reduce taxes. And yet most people still don’t use them. The fact is probably the single most powerful way to explode your investment returns is to stop giving half of what you make away. We have been very busy this year helping clients set up platforms that allow them to defer and in some cases avoid paying taxes on their income or corporate profits. These are not questionable strategies that when the IRS comes looking will collapse and have you owing huge backtaxes. These strategies use specific sections of the tax code expressly written to provide these tax benefits. One of the strategies I’ll mention today is used by the majority of Fortune 500 companies and could be used by any profitable business. When you find out about this strategy you will wonder why on earth everyone doesn’t do it. For a business owner who is generating strong annual profits they can easily have to pay over 50% in taxes. This strategy allows the owner to dramatically reduce corporate taxes. Everyone is familiar with insurance and that premiums are a deductable expense. However did you know that there are specific sections of the Internal Revenue Code written that allow you to create your own captive reinsurance company that can sell insurance coverage to your primary business. Obviously there are well defined rules and laws that need to be followed. But imagine if you could take a substantial portion of your company earnings and pay a premium to another company you own to get valuable insurance. You can insure against risks that traditional companies wont cover such as the loss of revenue from a major referral source. Not only do you substantially reduce your taxes but you benefit from profits in the captive company you own. There are over 5000 captive insurance companies in existence. Fortune 500 companies and very wealthy families have accumulated millions in reserves and saved taxes. These savings and benefits could easily be enjoyed by small and medium sized businesses. There are many other strategies that can benefit individuals and companies in saving taxes. Like all financial strategies they are not a panacea, they work well given the right situation but all have pros and cons. But if you are not at least asking your advisors for ways that you can save or defer taxes you are leaving a lot of money on the table or more accurately allowing the IRS to take your money off the table when you don’t have to.

By Simon Leach

Mickelson Capital Consulting

PIPE (Private Investment In Public Equity) deals remind me of the NBA draft. Of course there is no David Stern, but there are plenty of tacky suits and talks of upside.

Optimism reigns and potential dominates substance. This isn’t necessarily bad. Take John Wall for example. He showed enough promise in one year at Kentucky to become the #1 pick of the 2010 NBA draft. Wall’s collegiate numbers were compelling but not off the charts. It’s what Wall will do in three years that causes scouts to drool. Similar to John Wall, many young companies want to cash in when expectations exceed past performance. Why not? Expectations play a huge role in determining the present value of companies.

From an investor standpoint, the big rewards don’t come from drafting the All-American in the lottery; the true spoils come from finding the player overlooked by all the experts who becomes an All-Star. Investment bankers and companies know this. They position companies as “diamonds in the rough.” Proud CEOs tout tantalizing projections and heroic expectations of market share. We investors get caught up too, but we have the balance the hopes of a 500X ROI against the possibility of losing our shirt. Similar to the NBA draft, there are some Hall of Famers who get picked in the second round but the majority don’t last more than a year in the league.

We investors should keep our eyes out for the 6’10” freshman with crazy hops who has yet to average more than 15 points a game, but we can’t lose sight of the role players, those yeomen who do the little things to bring a team over a top. Therefore, PIPE investors should allocate funds to a spectrum of companies with a wide range of return opportunities. Maybe that stable consumer products deal may not get you staggering returns, but it helps form the core of the portfolio that allows the more high flying investments to shine. The Lakers drafted Derrick Fisher the same year they signed Kobe Bryant.

Whether we’re drafting players or companies, we’re all geniuses in hindsight.

When you retired you learned about all of the benefits that accompany being a senior.  As a member of the Golden Years community, you have access to discounts that others wish for.  One benefit that makes the rest of the population envious is an alternative investment, Life Settlements.  With Life Settlements, you are able to get  cash from an insurance policy that you already have.  The money you paid into your policy was meant to benefit your family, but if you have a need for cash now or simply no longer wish to pay the expensive premiums this could be a very profitable solution.  Life Settlements do not require you to divulge the reason you need the money. A life insurance policy is your property and like real estate, stocks or any other asset you own you have the absolute right to sell it, no questions asked.