Throughout the book, you will see the stories of different clients unfold. You may find that you have similarities to one of these clients. The clients are actually amalgams of real-life examples. Everything you will read about these clients and their personal experiences has happened to someone. The examples are real, but specific details have been changed. Plus, of course, the names have been changed.

For example, Ted and Ellen are based on the characters of people I have known for a long time. (In fact, I had gone to school with someone like Ellen.) They got trapped in the middle-class nightmare—working hard, not home much with their two children, and tired most of the time. They were looking for a way out. They weren’t afraid to try some-thing new, and they were bright, hardworking people. But they didn’t want to risk their family’s security along the way.

The people you read about are in very different situations with unique issues, but you may find elements in your own situation. Every client of mine has had many learning experiences along the way to their business success. My hope is that you can learn from these experiences as you read about them. Every lesson you learn from someone else and apply is one fewer lesson you won’t have to learn the hard way. I don’t know about you, but that sounds a whole lot easier to me!

Interspersed throughout the narrative, you will find other explanations and many forms. I encourage you to complete the forms and questionnaires that are applicable to your situation. These are tools that I use in my certified public accountant (CPA) practice with clients every day. My sincere wish is that you will have the same good results our clients have experienced. Above all, I wish you success and happiness in your business ventures, and, in fact, in all of life’s adventures.

Loopholes are government incentives to promote public policy. They aren’t something shady or shifty. In fact, the government wants you to

take advantage of the legal tax loopholes that the tax law provides. So where are the loopholes? You’ll find most of the loopholes in the two areas that most support the economy—businesses and real estate investing. Businesses, and particularly small businesses, provide stimulus to the economy. A growing business employs people, hires consultants, invests in equipment, and just generally kick-starts a struggling economy. In fact, look at recent tax legislation. Does it seem like the tax cuts are un-fair? They are! That’s because the government wants to create a change in the economy and knows that the best way to do that is by creating opportunities for businesses to grow.

Real estate loopholes are another important part of public policy. Real estate investors provide housing for people who don’t currently own their own homes. The government has tried to provide that same kind of housing (called public housing), and the result is decaying tenements where no one wants to live. In fact, while property values have generally appreciated (when taking the long-range view), public housing values have generally gone down. The government therefore provides the loopholes in order to encourage real estate investors.

The first edition of Loopholes of the Rich was published in 2001. Since then, I’ve heard from thousands of people about how they have made more money and reduced their taxes by taking advantage of the tax loopholes that the government wants you to use. The loopholes are there! The government puts them there for us to use, but it’s up to us to find them.