The Weight of Inheritance


Chapter 17: 

Frey’s boots echoed sharply against the worn stone of the road. The narrow street twisted behind him, the crooked skyline of Auld Haven shrinking with every step. The cold pressed against his skin, thin and biting.

The weight of all he’d learned pressed against his chest. You can’t change the system by playing by its rules.

Frey’s pace quickened. The road straightened ahead, curving toward the city’s edge, where the stone gave way to open fields. Dark hills loomed in the distance, silent and imposing.

Now heavy in his hands, the ledger pressed against his side as though it were more than just a book. It felt like a presence, a pulse.

Inside it, Heka.

Frey could feel him, always there, his essence tethered to the pages. Heka’s influence was never far. Sometimes, he spoke only in whispers; other times, he would manifest in a more tangible form. Frey knew the being could materialize at any moment; his power was anchored to the book but untethered to any one place, and it gave him chills.

Frey slowed, sensing the change in the air. The subtle pressure of Heka’s presence grew, and the world around him seemed quieter, as though waiting for something.

And then, there he was.

Heka appeared before him, stepping out of the shadows between the pages of the ledger. His tall figure took form in the fading light. His deep, dark cloak swirled as if the wind followed his movements, the gold threads at the edges gleaming even in the dimness adored beneath the hood. He held eyes that glinted with ancient knowledge; his face was eyes that always seemed to be watching, waiting.

“You made a choice,” Heka said, his powerful and calm voice resonating in

Frey stopped, the weight of the ledger pressing against his chest as he looked up at Heka. His heart still raced from the encounter with Covey, the tension of the decisions he’d just made still thrumming in his veins. “Did I?” he asked, his voice rough.

Heka’s gaze sharpened. “You didn’t destroy the ledger. You rewrote it.”

Frey’s jaw tightened. “And you knew I would.”

“You could have walked away,” Heka said, his tone almost reproachful. He took a step closer, and the air around them seemed to shift with him, heavy with unspoken truths. “You could have left the system intact, taken your freedom, and left the others chained.”

Frey’s hands clenched around the ledger, the cold leather pressing into his palms. “That was never an option.”

“No,” Heka agreed, his lips curling into a slight, knowing smile. “It wasn’t.“

Frey’s chest tightened as he stepped forward. “What now?”

After walking as far as he could from Auld Haven, as if running from what he had just experienced, Heka’s eyes drifted toward the horizon. The sky darkened with the weight of the coming night. A single carriage cut through the distant road, its wheels grinding against loose gravel, but it was already fading from view. The world felt empty yet filled with potential.

Frey’s breath caught in his throat as he thought of the ledger. The others’ names were marked in red, the ones the system sought to collect.

“The House of Auld Haven was not finished,” Frey said, his voice low, heavy with the burden of the truth he now carried.

“No,” Heka replied. “But neither are you.”

Frey’s eyes darkened, his gaze flickering back to the ledger. His hand tightened around it as if the very act of holding it was a vow. The bloodline’s debts were now his to pay, but what could he do with the knowledge he’d just gained? How could he escape the system that had controlled generations before him?

He looked at Heka. “How do I break the chain?”

Heka’s face remained unreadable. “You can’t.“

Frey’s heart dropped in his chest. “Then why?”

“You can’t break the chain,” Heka interrupted, his voice growing sharper, colder. “But you can change who holds it.”

The words cut through Frey like a sharp knife. The truth hit him all at once. The cursed ledger was not a prison to destroy but a weapon to wield. It was a tool to change the system that had enslaved his ancestors.

There is a difference between being owned and being the owner, between submission and control, between being the puppet and pulling the strings.

Frey’s hands clenched into fists, the weight of the decision bearing down on him. “This is too much.”

Heka’s form shifted slightly, his cloak stirring in the invisible wind. His gaze never left Frey’s face, unwavering. “Then you leave the ledger for someone else to find. And the cycle continues.”

The road ahead narrowed toward the hills, and Frey could see the faint silhouette of the carriage once more, but it was already fading into the distance, swallowed by the darkening world.

Frey’s gaze dropped to the ledger, the book now a part of him. His choices would haunt him, but they were also his path to power. He could feel the weight of the system’s watchful eyes, of those who would hunt him for the ledger, for what he knew, for what he now controlled.

Frey stopped and turned towards Heka. “Then I rewrite it,” Frey said, his voice resolute.

Heka’s eyes gleamed with approval. “Good.”

Frey turned, the wind tugging at his cloak as he looked toward the road ahead. The path before him was steep and winding, the hills dark and foreboding, but he was no longer afraid. He had the power now, the ledger, the pen, and the ability to rewrite the rules. The system that had bound his ancestors and controlled his life was no longer the ruler. It was now a tool he would master.

But there would be consequences. They would try to take the ledger and end his life before he could finish what he had started. But Frey was ready. He had rewritten the terms of his fate.

Frey continued to walk the path ahead with one last look over at Heka, who had already begun to fade back into the pages of the ledger. The road was long. The danger was real. But now, it was his to navigate.

Frey’s Journal: Cycle 9, Phase 1, Solar Arc 218

What Are Taxes?

Taxes are mandatory payments by local, regional, or federal governments to individuals and businesses. The funds are allocated to essential programs, including Social Security, Medicare, public infrastructure, education, defense, and social welfare.

Entry: Cycle 9, Phase 1, Solar Arc 218

Economic Perspective: Taxes ultimately fall on the shoulders of the individual or entity that bears the cost, whether directly (as with income taxes) or indirectly (as higher consumer prices from corporate taxes).

Accounting Perspective: Taxes must be considered in financial planning to understand their impact on net income, savings, and investments. For businesses, taxes also influence pricing strategies, payroll, and profitability.

Understanding the primary types of taxes can clarify how they affect financial decisions:

Income Tax

A portion of an individual’s or a business’s income is paid to the government.

Instance:
Employees earning $70,000 annually may owe 22% in federal income tax plus any applicable state income tax.

Take advantage of deductions (student loan interest, mortgage interest) and credits (child tax credit) to reduce taxable income.

Payroll Tax

Deducted directly from employee wages to fund Social Security and Medicare. Employers also contribute matching amounts.

Instance:
For an annual salary of $50,000, an individual contributes 6.2% to Social Security and 1.45% to Medicare.

Self-employed individuals must account for employee and employer portions of payroll taxes, making it crucial to budget accordingly.

Corporate Tax

Levied on corporate profits, helping fund government programs. Rates vary by jurisdiction.

Instance:
A corporation with a $1 million profit may pay 21% federal corporate tax plus state taxes.

Businesses can reduce taxable income through operating expenses, charitable contributions, and investment in research and development.

Sales Tax

A tax on goods and services, varying by location and product type.

Instance:
A shopper in Texas might pay an 8.25% sales tax on a $100 purchase.

Track sales tax for significant expenses like vehicles or home goods, as these may qualify for deductions in certain states.

Property Tax

Based on the assessed value of real estate. Funds are used for schools, infrastructure, and local services.

Instance:
A homeowner with a $300,000 property may pay $3,750 in property taxes annually, which is 1.25% of the property’s value.

Consider property taxes when evaluating home affordability, and use homestead exemptions where available.

Tariffs (Customs Duty)

Taxes on imported goods are used to protect domestic industries.

Instance:
A U.S. importer of luxury goods from Europe may pay a 10% tariff.

For businesses that rely on imports, assess how tariffs affect product pricing and explore domestic sourcing options.

Estate Tax

Applied to the value of an estate upon the owner’s death if it exceeds state or federal thresholds. Only the portion above the exemption is taxed.

Instance:
In 2024, the federal estate tax applies to estates exceeding $13.61 million per individual. Portability allows married couples to be exempt up to $27.22 million. Amounts above the threshold are taxed at rates ranging from 18% to 40%. Some states also impose their own estate or inheritance taxes.

Utilize estate planning tools, such as trusts and gifting, to minimize taxable estate values.

Taxes directly and indirectly shape personal and business financial strategies. Understanding these implications can help you make better decisions.

Personal Financial Planning

– Budgeting: Know how much of your income goes to taxes to allocate funds effectively for savings, investments, and expenses.

– Retirement Savings: Contributions to accounts like a 401(k) or IRA often reduce taxable income, offering dual benefits.

– Tax-Efficient Investments: Long-term investments in tax-advantaged accounts, such as Roth IRAs or municipal bonds, can help minimize tax liabilities.

Instance:
Alex earns $80,000 annually and contributes $6,000 to a traditional IRA. This reduces his taxable income to $74,000, saving him hundreds in taxes.

Borrowing Against Life Insurance Instead of Bank Loans (Infinite Banking Concept) 

Instead of taking traditional loans, you can use a properly structured whole life insurance policy to borrow from yourself. The policy continues compounding interest, even on borrowed funds, allowing you to pay yourself interest instead of a bank.

Instance:
Emily has funded a high-cash-value whole-life policy for several years. She takes a policy loan instead of a bank loan when she needs $50,000 for a real estate investment. Her policy continues to grow tax-free, and she repays the loan at her own pace, with the interest being reinvested in her policy rather than paid to a bank. This allows her to control her banking system while growing wealth tax-free.

Take Advantage of Tax Deductions and Credits

– Deductions: Lower your taxable income (mortgage interest, medical expenses).

– Credits: Directly reduce the amount of tax owed (education credits, renewable energy credits).

Instance:
A family installs solar panels, earning a 30% federal tax credit on the installation cost, saving $6,000 on a $20,000 project.

Understand State and Local Tax Variations

Some states, such as Florida and Texas, have no income tax but higher sales or property taxes. These factors should be considered when making relocation decisions or planning business expansions.

Instance:
When choosing between states for a new office, a company assesses corporate and property tax rates to determine the most cost-effective location.

I believe accounts like 401(k)s are beneficial, and that’s what they recommend, but we have to take a closer look. Over the past two decades, the average annual return for 401(k) plans has hovered around 4.1% to 4.2%.
While that might seem reasonable, consider this: the U.S inflation rate in 2024 was about 4.2%.

Your retirement savings are barely keeping pace with inflation.
In some years, especially after factoring in plan fees, administrative costs, and market volatility, your 401(k) could be losing ground. Your account balance is increasing, but the value of your money isn’t growing because everything around you is becoming more expensive at the same rate (or even faster).

And there’s another catch:

– Most 401(k) plans offer limited investment options, heavily tilted toward mutual funds that charge management fees.

– Access to your money is restricted; early withdrawals often come with a 10% penalty plus taxes.

In short, while a 401(k) can be a helpful tool, it isn’t designed to build real, lasting wealth.

Now, let’s discuss why real estate has historically generated more millionaires than any other investment class.

1. Appreciation Potential

Home values in the United States have increased by 42.5% over the past five years, reaching an average price of $431,078 as of early 2025.
Unlike stocks or bonds, real estate benefits from:

– Forced appreciation (through upgrades and renovations)

– Natural market appreciation (as supply-demand dynamics drive up prices)

When you own property, you’re not just holding an asset but building wealth on autopilot as your home value rises.

2. Tax Advantages

Real estate comes with some of the most aggressive tax benefits available to investors:

– Depreciation: You can deduct a portion of the property’s value yearly, even if its price increases.

– Mortgage Interest Deduction: You write off the interest paid on your mortgage.

– Operating Expense Write-offs: Property management, repairs, insurance, and even travel expenses to manage your property can all be deducted when it comes time to rent your home, allowing you to generate even more revenue.
(Note: There are risks with everything you do, from getting the wrong tenants and them messing up your property, to getting bad food and getting food poisoning. Some risks are worth it; you must eat, so you try again. You must provide for your family, so you do what you must. You decide for yourself.)

– 1031 Exchange: You can swap one property for another and defer paying capital gains taxes indefinitely. (a provision in the U.S. tax code that allows investors to defer capital gains taxes when selling an investment property and reinvesting the proceeds into a “like-kind” property.)

Compared to a 401(k), real estate often outperforms when it comes to shielding wealth from taxes.

3. Leverage and Equity Building

One of real estate’s most significant advantages is the ability to leverage.
You can control a $300,000 property with far less down with 100s of different agencies, allowing your returns to multiply dramatically as long as the market moves in your favor. And over the past 20 years, the U.S. housing market has surged. In 2005, the median home price was approximately $200,000. By 2025, this figure had risen to roughly $431,078, a roughly 115% increase over the previous two decades.

Meanwhile, as tenants pay your mortgage, you’re steadily building equity, ownership in a valuable asset. That’s growing equity, which isn’t just wealth on paper;
It provides you with real-world borrowing power to finance additional investments, expand your portfolio, or access cash when needed.

4. Inflation Hedge

Unlike a 401(k), real estate tends to appreciate with inflation.
When the cost of living goes up:

– Home values go up

– Rental income goes up

This keeps your wealth aligned with the real-world economy, rather than being locked into the limited returns of an investment vehicle that barely keeps pace with inflation.

While a 401(k) might help you save for retirement, it’s not a wealth strategy; it’s a savings plan.
If you want to grow, protect, and leverage your wealth, real estate offers far more powerful tools:

Investors often focus on portfolio growth and returns but may overlook the impact of taxes on their investment gains. If not adequately managed, taxes can significantly reduce overall returns. An active tax management strategy can help minimize tax liabilities while optimizing investment returns.

Use Tax-Aware Asset Location

Tax-aware asset location involves strategically placing investments in accounts that consider their tax implications. Taxable, tax-deferred, or tax-exempt account types offer varying tax benefits that can impact overall returns.

Taxable Accounts are ideal for tax-efficient investments, such as municipal bonds, ETFs, or index funds. Municipal bonds, for instance, are often exempt from federal and state taxes, making them suitable for tax-advantaged accounts.

Tax-Deferred Accounts: Use for investments that generate significant taxable income, such as REITs (Real Estate Investment Trusts) or high-yield bonds. Contributions to these accounts, like traditional IRAs and 401(k)s, grow tax-deferred, postponing your tax liability.

Tax-Exempt Accounts: Roth IRAs or 401(k)s are ideal for long-term growth investments. Since withdrawals from these accounts are tax-free in retirement, they benefit from investments with high potential for appreciation.

Instance:
An investor places dividend-paying stocks in a tax-deferred account to avoid annual dividend tax and keeps municipal bonds in a taxable account for their tax-free interest.

You can collaborate with a financial advisor and tax professional to create an asset location plan tailored to your tax situation and goals.

 

Consider Tax-Favorable Investment Solutions

Certain investments inherently offer tax advantages, helping reduce tax liabilities while meeting financial objectives. Municipal Bonds are exempt from federal and often state and local taxes if purchased in your home state, making them attractive for high-income earners. Tax-managed funds are actively managed to minimize taxable distributions. They focus on long-term growth while minimizing short-term gains.

– Indexed Universal Life Insurance (IUL): Provides tax-advantaged growth and distributions for individuals seeking life insurance and tax benefits.

Instance:
A high-income earner investing in municipal bonds avoids taxes on interest income, effectively increasing their after-tax yield.

When selecting investments, consider both their growth potential and tax implications to strike a balance between performance and tax efficiency.

Taxes fuel everything from roads and schools to defense and social programs, but nobody wakes up excited to send a chunk of their paycheck to Uncle Sam. In the country’s early days, the idea of a federal income tax was heresy. Most Americans and their leaders thought the new federal government should raise money only through tariffs (taxes on imported goods) or a small fee on whiskey. Anything that poked directly into your paycheck was seen as a step toward tyranny.

Why “No Federal Income Tax” Was the Default

Founding-era distrust of strong central power
After fighting a war to escape a king who taxed them mercilessly, the colonies did not want a powerful tax-levying government at home.

Constitutional limits
The original Constitution required that any direct tax be apportioned according to state populations, an impractical hurdle for a modern income tax.

Early reliance on “sin taxes” and tariffs
Whiskey, tobacco, imported tea, and textiles… those “indirect” taxes were easier to pass and more complicated for everyday folks to revolt over.

 The Civil War & the 16th Amendment

Civil War necessity (1861–1865)
The federal government imposed a temporary income tax to help fund the Union army. It was wildly unpopular, but desperate times called for desperate measures. After the war, it lapsed.

16th Amendment (ratified in 1913)
This changed the rules. Congress could now levy an income tax, and suddenly, a permanent federal income tax was legal, even though many people still hated it.

Progressive rates for “the rich.”
– Early brackets only hit high earners, so most Americans didn’t feel the pinch. This helped normalize the concept.

World War I & II expansions
– As wars got bigger and pricier, federal income tax rates climbed, and more of the middle class got swept in. Paying income tax became just part of “doing your civic duty.”

Payroll withholding (1943)
– Having your employer automatically pull taxes from your paycheck turned a nerve-wracking annual bill into a dull, routine deduction. You hardly noticed.

Civic-service framing
The narrative shifted: taxes weren’t a sinister grab; they were how we paid for roads, schools, Social Security, defense, disaster relief, and more. Withholding made it invisible. Most folks never saw the full cost at once, so resentment faded.

Where We Are Now

Nearly every working American pays income tax, payroll tax, or both.

Federal tax receipts fund a wide range of programs, including NASA, national parks, scientific research, and the military.

Protests still flare up (Tea Party, anti-tax rallies), but universal acceptance is the norm: if you earn money, Uncle Sam gets a slice. Over more than 150 years, what started as an emergency measure no one liked has become a routine part of American life, mainly because it became tied to services people value and because the mechanics of collection made it nearly invisible.

Entry: Cycle 9, Phase 1, Solar Arc 218

Some chains are broken. Others are passed down.

Match your taxable income to your filing status to find your marginal rate. Remember: You pay the rate for the income in that bracket.

The weight of Frey’s choices settled upon him like a cloak woven from shadows. With each step he took, the path before him narrowed, closing in around his fate. The ledger in his hands was no longer just a book; it was a living force, its ink pulsating with the weight of generations of debt, power, and secrets. Every decision he made would either strengthen the chains of the old world or tear them apart, and now, with Heka’s ominous guidance, Frey understood the actual cost of freedom.

But freedom was not a gift. It was a battle.
As the world around him grew darker, a storm of challenges brewed on the horizon. Some would stop at nothing to reclaim the ledger and, with it, the power to control the fates of countless others.
Frey could feel them closing in, their eyes upon him, hungry for the knowledge, power, and control the ledger promised.
He had rewritten the rules, but the game was far from over.
The path ahead would be filled with trials, some of his own making, others beyond his control. Every step would take him deeper into a labyrinth of deception, power struggles, and enemies he had yet to face. With the ledger at his side, Frey was no longer the hunted. He had become the hunter. But in this world, hunters were often prey.