The 4 Biggest Wealth Destroyers


When you’re building your wealth, it’s easy to look at only one side of the coin. You want to grow, grow, grow, but you might not be considering all of the things that eat away at that growth. In order to build and protect your wealth, you must know the associated risks. Only then can you optimize your cash flows.

Here are four of the top wealth destroyers that exist, and how to leverage them to your advantage with a little financial judo.

1.  Taxes

This is a point we’ve covered before, but is one of the most significant threats to your wealth: taxes. It’s not difficult to understand why.

The way we approach taxes is a bit different. Taxes, at the root, are a series of incentives that rewards certain behaviors. So if you capitalize on the incentives put forth by the Federal Government, you’re going to get rewarded. For an entrepreneur, the incentive is to put money back into your business. The more you invest in your business, and thereby other businesses, the more you’re rewarded.

You could also consider these incentives as a rule book for how to play the “game of money.” If you play the game by the rules, and you play it well by capitalizing on these incentives, you’ll do well. The reward for doing well? You’ll get to keep and use a lot of the money that you produce.

Let’s break it down. As an entrepreneur, you’re in the business of solving problems. Maybe that problem is housing, and as a real estate investor you’re able to provide quality housing where it’s needed. There are large tax advantages in the real estate business because the Federal Government isn’t interested in being a landlord. So if you can be the one to provide affordable, quality housing, the government wants to encourage you.

Other businesses work the same way. The Federal Government can’t do it all, so they look to entrepreneurs and business owners who are solving problems, and they incentivize them. Everyone benefits from these businesses—the owners create and produce solutions for the marketplace, and they keep the economy moving. Businesses create jobs, and businesses spend money to maintain their own production. It’s a system that feeds itself, and feeds the economy.

So how do you play the game most effectively? Start by recruiting a tax ninja to your team: someone who knows the rules to the game, and can help you with better strategies. When it comes to taxes, it’s hard to know all the rules. You’ve likely got your head in other places, and having a good tax strategist or advisor is an amazing investment. The return you’ll see over 5-, 10-, 15-years and beyond is going to be worth every penny. These professionals will ensure that you’re at the top of your game, because when you don’t play by the rules, or you don’t capitalize on these incentives, you’ll be penalized.

2.  Inflation

This is the silent tax. In order to keep things very simple, we’ll define it as such: when the money supply in a society expands, prices will increase (or inflate) as a result. That’s the most basic definition, though it’s important to note that there are different types of inflation.

Because the government has printed a ton of money, there’s more money in supply and that money devalues over time. The money supply from 1913, when the Federal Reserve was created, compared to today’s money supply is astronomically small. As a result, the value of a single dollar has decreased—in 1913 a single dollar had a much more impactful purchasing power than a single dollar today.

The biggest problem with inflation is that we don’t see it coming. Prices creep up very slowly, and it’s not until years have passed that the difference becomes significantly noticeable. That’s why it’s called the silent tax.

Like regular taxes, there’s a way to work inflation to your benefit (remember when I said there were different types of inflation?). The very wealthy actually benefit from inflation, because they can experience asset inflation. Say an investor owns a hard asset, like real estate. Prices for goods and services go up, and rent also increases. So the owner of the apartment building will benefit, and a business owner will likewise benefit on the increased price of goods.

The middle class also receives some benefit from inflation, because the price of their primary residence will increase over time, and their mortgage will not. They’ll also see an increase in their retirement accounts, which will make them feel rich. Those benefits are superficial, however, because everything else is inflating at the same time.

Inflation hits the poor the hardest, because they’re seeing the price of rent, food, and clothing skyrocket. That’s just the cold, hard truth.

The takeaway from inflation is to learn how to position yourself accordingly. Throw in a little judo move, and work the situation to your favor instead of being the victim of inflation.

3.  Debt and Interest Paid on Debt

We’ve covered debt before, so I’m sure you know by now that there’s good and bad debt. Much like the other points on this list, there’s a way to position yourself in a favorable way as long as you know the difference.

You can again use a high-level strategy, a judo-move, and use debt to become financially free and even make money. Or you could rack up bad debt that eats you alive. Just thinking about the amount of bad debt people have, and the interest they’re paying on that debt, is nauseating.

The important step is to learn how to leverage your good debt, and get rid of your bad debt.

4.  Retirement Accounts

This is probably the one on the list that will turn the most heads. People love to love their retirement accounts, but don’t understand all of the underlying fees and taxes that absolutely eat away at their retirement money.

Tony Robbins has talked about this in his book MONEY Master the Game. It’s something he is very passionate about, and it woke a lot of people up to the hidden fees in their accounts. Amongst those hidden fees is even one called the 12B fee, which is a baked-in marketing fee. Hopefully that illustrates just how insane those fees can be.

You have to understand that these qualified plans are one of the biggest vehicles for institutional theft that I’ve seen. You need to know and understand how they work. Yes, there are ways you can position it. Self-directed vehicles especially, give you more control and reduce the fees. Just like the other wealth destroyers on this list, you can gain the upper hand with a little judo-move.

Hopefully, this list gives you some ideas on how to better protect your wealth, and where to focus your strategies. Sometimes, that means building a team of ninjas who can help you with taxes, and sometimes that means doing a cold, hard assessment of your debt. Nothing is a one-size-fits-all strategy, but the wealth-destroyers on this list do effect everyone.

You can listen to my new podcast, Cashflow Investing Secrets here.

Live your Freedom, Live Your Legacy, On Your Own Terms,


M.C. Laubscher is a husband, dad, podcaster & Cashflow Specialist. He helps business owners and investors create, recover, warehouse & multiply cashflow. You can learn more about exclusive cash flow strategies in M.C.’s new video series at

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