How to Shelter 30% of Your Income Legally with a Private Family Foundation

Hello, I’m Tyler, the former financial advisor and portfolio manager. Now, I create financial content for free so that you don’t have to pay for it.

Step 1: Create a Private Family Foundation

First off, I would begin by creating a private family foundation. Yes, it’s going to be a headache and will require a lot of regulatory and legal oversight. But if I have millions of dollars, it’s not a problem.

Step 2: Contribute to the Foundation

Next, I would put 30% of my adjusted gross income into said foundation annually. This is 100% tax-free. So, imagine I have 10 million bucks in the foundation; there’s a $4 million tax break!

Step 3: Hire Family Members

Next, I would hire my two kids to run the foundation and pay them each $200,000 a year from the foundation’s tax-exempt assets.

Step 4: Understand the Payout Requirements

So what’s the catch? Each year, I’d need to pay out 5% of the foundation’s assets to charity.

Step 5: Creating Your Own Family Government

But guess what? Now, instead of giving my money to the government in the form of taxes, I’ve effectively created my own family government. I can distribute that money to my own friends who run charities, and I can and will benefit directly and indirectly with future influence.

Step 6: Long-Term Growth

Finally, since I only have to pay out 5% annually and the foundation’s assets are projected to grow at 7-8% annually, the foundation’s value will continue to grow. This allows me and my family to continue to use those assets to benefit myself, my family, and my friends forever. And if that doesn’t make you question why the rich and famous have private foundations, I don’t know what will.

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