Do you think making more money means having more wealth? Many people do because it seems logical that high income would translate to high wealth.

This is not true!

Do you know people who make a lot of money from their business or their job but never seem to have any money? Or maybe they have money, a luxurious house and fancy toys, like expensive cars and boats, but they still have to go to work every day to make ends meet?

While these people have high income, they have very low wealth. When speaking with prospective clients or people at a seminar, I keep running into this situation and I always come to the same conclusion:

Making a lot of money has nothing to do with wealth.

Just this week, I was talking to a new client who runs a very successful business. He makes hundreds of thousands of dollars each year, but has more liabilities than he has assets. The reason seems to be that while he has made incredible efforts to make his business successful, he has never devoted the time or energy to learn how to make his investing successful.

This is not a criticism of this client. It is usually what we are taught.

We are often taught to work hard at our job or our business and to turn our finances over to a financial advisor who may or may not know what he or she is doing.

In addition, this client was given some poor advice regarding his taxes, so now he has to work even harder to pay back taxes that proper tax planning may have prevented.

Like our finances, we are often taught that taxes are too difficult so we need to “hand them over” to a tax advisor who may or may not know what he or she is doing.

In reality, you cannot “hand over” your taxes to a tax advisor. You have to learn enough of the rules to know when to go to your tax advisor for advice.

- Increasing Knowledge = Increasing Wealth -

The answer, no matter what your level of income or wealth, is the same. It takes knowledge to be financially (and tax) free. If you ask a highly successful millionaire or billionaire, they will tell you one of their essential secrets is possessing a diverse, cross section of knowledge in ALL areas of business. And they never stop learning!

Original article: Taxes in Spain

Up to 2008 all property owners in Spain were liable for two separate taxes every year, income tax and wealth tax. The good news is that the Wealth tax has been suppressed this year and therefore from 2009 on, both residents and non residents just have to pay income tax. In effect, any non-resident individual with a property in his/her name is subject to an Income Tax of 24% of 2 percent (or 1.1% if the cadastral value has been revised after 1994) of the valor catastral, the official rated value of their property.

The deadline for this tax is the 31st December of each year. It is important to be up to date in the payment of this tax since if you do not pay this tax (plus wealth tax up to 2.008), the tax authorities may check it when you sell your property and deduct from the excess of the capital gains tax retained in the sale, the amount you should have paid plus interests plus a fine.

SPANISH WILLS

Legally it is not absolutely necessary to make a Spanish will to dispose of your assets in Spain but if you want to avoid time consuming and expensive legal fees for your heirs you should make a Spanish will disposing of your Spanish assets. In effect, if you have a foreign will, that will is valid in Spain but so the will is declared effective to dispose of your Spanish assets a number of steps must take place before:

a certified copy of your will must be legalized by a notary this certified copy must be also legalized by the entity in charge of the Hague Apostille in your country The will have to be translated into Spanish by a registered/official translator. Your heirs may have to get a certificate of law affirming that you had the legal capacity to make a will, that the will is valid, that the law of your country permits free disposal of your estate, that the will has been duly proved and that the trustees named have the correct legal powers to administer the estate.

It is a complicated, time-consuming and expensive process that may take months and would not allow your heirs to sell the property if they needed to do it. If you do not even have a will in your country it is strongly advisable to make either a Spanish will or a foreign will since this process is then much more complicated and may take even one year.

This information was supplied by

Nuria Bergillos

Abogado (Col. 6757 ICAMA)

of

CN ABOGADOS

Pº Jesus Santos Rein nº2

Edificio Ofisol 3º A

Fuengirola

Tlf: (+ 34) 951 702 651

Fax: (+34) 952 479 040