Section 1.1: Using Zero-Interest Loans as an Inflation Shield

If you maintain a good credit score, various traditional payment processors will present you with zero-interest, multi-month loans. For example, PayPal offers a financing option where you can avoid interest on any purchase exceeding $100 if you repay it within six months. Similarly, American Express features its Plan It program, enabling you to establish a zero-interest payment plan that can span years, depending on your purchase size.

Most individuals remain unaware of these services, which can serve as excellent safeguards against inflation. For instance, imagine you acquire an American Express Blue Cash Everyday Card, which rewards you with 3% cash back on all supermarket purchases in the U.S. Given the rising inflation concerns, you decide to purchase $1,000 worth of non-perishable groceries using your card.

Then, by utilizing the Plan It feature, you can split the $1,000 grocery expense into twelve monthly payments of $83.

In the following year, if grocery prices soar by 25%, you’ve effectively saved $250 while also earning a $30 cash-back bonus.

Section 1.2: Exploring Low-Risk Options Trading

Many affluent individuals significantly boost their cash flow by engaging in low-risk options trading, such as selling puts or covered calls against their stock holdings. Without delving too deeply into technicalities, this practice is accessible to anyone owning 100 shares of a company or possessing sufficient funds to purchase an equivalent amount of stock.

For example, in December when oil prices began to rise, I sold a put contract on Suncor Energy valued at $2,500. However, I didn’t actually pay that amount; the contract merely impacted my portfolio's value. I would only need to pay if Suncor Energy dropped below $25 per share by March 18th, which seemed unlikely due to the rising oil prices.

By selling the put, I received $250 for my contract, using part of that to purchase six shares of Suncor stock. Later, as the contract value decreased, I bought the put option back at $70. My profit totaled $180, all while collateralizing an imaginary $2,500.

Section 1.3: Starting a Small Business for Tax Benefits

Occasionally, certain billionaire families attract negative media attention, revealing their creative tax dodging tactics. Some of these strategies can be surprisingly innovative. For instance, a billionaire might purchase a property, establish a "non-profit" entity (which they control), then have the property appraised at double its purchase price before donating it to their non-profit, resulting in a substantial tax deduction.

Tax write-offs are not exclusive to the wealthy; they are legal and available to almost anyone. With professional guidance, you might create an LLC or sole proprietorship to reduce expenses. For example, if you are passionate about golf and start a blog or social media account focusing on the sport, you may be able to deduct a portion of your golf course membership fees, equipment purchases, and even part of your living space used for "business" purposes.