Average Joe Millionaire

Warning: This advice may be shocking.

“If you cant afford to pay it off in 15 years then you cant afford it.”  Advice given to me by one of my advisors.  Before I bought my first property I talked to lots of people about my options.  This included many close friends and relatives.  One of them had great advice.  That advice was, if you cant afford to pay it off in 15 years you cant afford it.

This simple piece of advice will save you thousands of dollars, it will save you hundreds of thousands of dollars in interest payments. Read more…

Rules of the Rich

The Poor pay taxes then pay their bills with what is left over.  The Rich pay their bills and then pay taxes on what is left over.

Knowing the significance of this is HUGE!  If your income at your Job is $50,000 you will pay around $10,000 in federal taxes.   Yes there are deductions that lower that amount but for simplicities sake we will stick with these numbers.  That means you take home $40,000 before  state taxes and bills.

What can a business save you?

The Rich own businesses that makes $50,000 a year and they pay all their bills
Cell Phone $1200 a year
Auto $3600 a year
Insurance $3000 a year
Food $5000 a year
Office Supplies $500 a year
Computer $1000 a year
Internet $600 a year
TOTAL $14,900

Many other things can be expensed but we will stick with these items for now.  Many of these have limits set by the IRS.  These numbers are for example purpose only.

So we have a business that makes $50,000 – $14,900 in expenses = $35,100 profit (this may bump you to a lower tax bracket but I will use 20%)

Total taxes owed by the business before any allowable deductions is $7,020.  That is a tax savings of about $3,000!

That is a 6% raise!

$3000 is just the beginning there are many other expenses from your daily life that if you were in business could possibly transition into business expenses.  Plus there are all kinds of tax credits and deductions that change almost every year.  Currently you can get special credits for adding “green” options to your business.  You can get credit for buying a Hybrid vehicle for business use.  There are all kinds of great tax benefits of owning your own business.

So far we have covered a huge amount of information I thought it would be a good idea to do a quick recap.

1. Be Happy- Rarely do people get rich doing things they hate.  You are much more likely to get rich doing something you feel passionate about.

2. Financial education is priceless.  The saying goes “Insanity is doing the same thing over and over and expecting different results.”  If you are not making financial progress educate yourself and change your actions to get different reactions.

3. Debt is not always bad.  Bad debt holds you down, good debt puts cash in your pocket.

4. Protect your money.  No matter how much you have keeping track of exactly where it is and where its going is crucial.

5.  Two dollars is all it takes to start building your wealth.  See article for more information.