How To Stop Paying Taxes (Legally) & Build Your Financial Freedom | Jaspreet Singh
Published: 2023-09-17
Status:
Available
|
Analyzed
Published: 2023-09-17
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Residential real estate properties can have their building value depreciated over 27.5 years, allowing for an annual tax deduction. For a $400,000 building value, this results in approximately $14,500 in annual tax write-offs.
"so now you take this four hundred thousand dollars and you're gonna divide it by 27.5 which equals about 14500 this this is how much you can write off your taxes every year just because your property is one year older"
Pending
Financing a real estate property with a mortgage, combined with depreciation deductions, can lead to a net taxable loss, even if the property is generating a positive cash flow.
"but if I bought this property with a mortgage now remember I only had a seven thousand dollar profit so seven thousand dollars worth of profit but then I get to deduct this fourteen thousand five hundred dollars so now I subtract is fourteen thousand five hundred dollars and I have this negative seven and a half thousand dollar plus I tell the IRS hey I lost money"
Pending
Individuals who qualify based on their income may be able to deduct losses from real estate investments against their ordinary income.
"now what you could potentially do if you qualify with your income this is not for everybody but some people are then gonna be able to take this loss and deduct it against their own income"
Pending
There are income limitations for deducting real estate losses against ordinary income. Those earning under $100,000 can deduct losses, with the deduction phasing out between $100,000 and $150,000. The maximum deductible loss is $25,000 per year.
"at the time I'll be recording this video in order for you to be able to deduct this loss against your ordinary income your income from your job you have to be making under a hundred thousand dollars a year and after a hundred thousand dollars a year the deduction gets faded out up until 150 000 a year and the maximum them that you can deduct is twenty five thousand dollars in one year"
Pending
A 1031 exchange allows real estate investors to defer paying taxes on profits from a sale if they reinvest those profits into a like-kind property.
"the third big tax break that you get is something called the 1031 exchange which says that you can sell your real estate for a profit and not have to pay any money on taxes if you take your profits and buy another property"
Pending
Capital losses from investments can be used to offset other types of income. Married individuals can deduct up to $3,000, while single filers can deduct $1,500.
"the general rule is that you can deduct up to three thousand dollars worth of capital losses against other types of income if you are married if you are single filing a single tax return that is fifteen hundred dollars"
Pending
Traditional 401(k)s and IRAs offer tax-deferred growth, meaning contributions are not taxed in the year they are made, and taxes are paid upon withdrawal in retirement.
"you can invest your money into these accounts tax-free meaning when you put your money in you don't have to pay taxes on the income so if you take five thousand dollars from your income and you put this money into your traditional 401k or your traditional IRA you don't have to pay any taxes on the five thousand dollars today"
Pending
Roth 401(k)s and IRAs involve paying taxes on contributions in the current year, but qualified withdrawals in retirement are tax-free, with tax-free growth.
"now if you use a Roth 401k or a Roth IRA now you're going to pay taxes when you put your money in so if you take that five thousand dollars and you put it into your Roth IRA or a Roth 401k you're going to pay taxes on the five thousand dollars today and then you'll have the after tax dollars actually being invested but now your money can grow tax-free and then when you pull your money out you can generate and put your money out tax-free as well"
Pending
A SEP IRA allows self-employed individuals or small business owners to contribute up to 25% of their net earnings, with a maximum contribution limit of $66,000.
"with a SEP IRA you can invest up to 25 percent of your net earnings from your business up to 66 000"
Pending
To be eligible for an HSA, individuals must have a High Deductible Health Plan (HDHP) with a minimum annual deductible of $1,500 for individuals and $3,000 for families.
"the minimum deductible you have to have on your health insurance to qualify for an HSA is fifteen hundred dollars for an individual or three thousand dollars as a family"
Pending
The Inflation Reduction Act provides a 30% tax credit for energy-efficient home improvements, available until 2032.
"this tax credit is available from now until 2032 and it gives you a 30 tax credit on energy efficient improvements on your home"
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The top tax rate for portfolio income (e.g., long-term capital gains) is approximately 20%.
"the top tax rate with portfolio income is right around 20 percent"
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The top tax rate for ordinary income (earned income from a job) is roughly double that of portfolio income, around 40%.
"the top tax rate when it comes to your ordinary income is about double that"
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Instead of financing a car with an average monthly payment of $717, investing that amount monthly into the stock market could potentially grow to nearly $2 million over 45 years, assuming a 7% annual return.
"the average new car payment at the time of me recording this video is 717 dollars a month now if instead of taking this new car payment and using it to buy a car that's losing value you took this 717 a month and you just put it into the stock market you put it into an ETF an exchange traded fund that's giving you exposure to the total stock market or the S P 500 you just put your money into there historically we have seen a seven to ten percent growth in the stock market a year over the long term"
Pending
The Section 179 deduction allows businesses to write off a significant portion of the cost of qualifying heavy vehicles purchased for business use.
"another popular deduction right now is the Section 179 deduction which is a heavy vehicle deduction essentially what it says is that if you need to buy a heavy vehicle for your business well then you can write off a big chunk of their vehicle right now like in 2022 my accountant called me and asked me despite what are your thoughts about a G-Wagon"
Pending
Travel expenses incurred for the purpose of inspecting potential real estate investments can be tax-deductible.
"another deduction that's been very popular amongst real estate people is travel deductions because now if you go fly to Florida or you fly to Hawaii and you go in there to look at some real estate even if you don't buy any well now you go in there with the intention of looking at real estate maybe with a real estate broker maybe a look at some properties well now if you do that if you go there with the intention to look at real estate well now that trip that little vacation that you had to Florida Hawaii is now a tax write-off"
Pending
Investing in real estate is treated as a business, allowing for deductions on expenses such as car usage, gas, cell phone bills, and meals, provided they are related to the business.
"businesses get to write off some of their business expenses what can some of these business expenses include well if you're investing in real estate you need a car to get to and from work you can potentially write off a piece of your car or the car value or your lease or your car payment you need gas you can write off some of your gas you need a cell phone to operate your business you can write off some your cell phone you might need meals you can write off some of these meals"
Pending
Engaging a CPA for tax planning, rather than just tax filing, is crucial for legally reducing tax liabilities by developing strategies for managing money.
"if all your CPA is doing is filing your taxes you are leaving a lot of money at the table tax planning is now where you work with the CPA you're working with the accountant to come up with a plan on different things that you can do with your money that way you can pay less money in taxes legally"
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The IRS tax code favors investors and business owners by allowing them to deduct business expenses before calculating taxable income, unlike W-2 employees who pay taxes on their income first.
"the IRS tax code essentially pass you on the back if you create your own income or if you are an investor so let me explain what this means if you are a W2 employee and all you earn income from is the job that you go to to get a paycheck for the work that you put in and you are a WTO employee then what happens is you make money from your job you're going to pay taxes and this is probably going to be automatically deducted out of your paycheck and then you get to spend whatever is left so now if you want a car you got to spend this money after tax dollars if you want a phone you got to spend these after tax dollars if you want to go to California you got to spend these after tax dollars if you create your own income so if you are a business owner you're a 1099 worker now you're creating your own income now it's a little bit different so I'll call this your own income now you're going to make money whether it's from your business or a 1099 income and then you get to spend this money because now you can have qualified business expenses"
Pending
The top tax rate on long-term capital gains (portfolio income held for over a year) is approximately 20%.
"the top tax rate with portfolio income is right around 20 percent"
Pending
The speaker's investment portfolio is structured with 75% in cash-flow producing assets (real estate, dividend stocks/ETFs), a smaller portion in non-dividend paying stocks, and 10-20% in speculative investments like startups and cryptocurrency.
"my Investment Portfolio looks like this which is 75 percent of my Investment Portfolio are cash flow producing assets this could be my physical real estate that pays me with cash flow this could be my stock ETFs that pay me with dividends and these could be actual stocks that pay me with dividends as well non-etf stocks so 75 of my portfolio are cash for producing assets then I have this smaller piece of my portfolio which are things like stocks that don't pay dividends and then I have this part which is somewhere between 10 to 15 maybe 20 of my portfolio depending on the day which is my speculative Investments these are things like the startups that I invest in these are things like my cryptocurrency investments"
Pending
To create an automatic passive investment, research various investment options (e.g., ETFs, index funds) and set up automatic transfers from your bank account to your investment portfolio.
"the easiest way to do that is just to do a quick Google search there are a lot of different options out there this is not even close to a comprehensive list but it's a way for you to start thinking about what it is that you want to invest in now when we talk about creating an automatic passive investment which it can do is say all right I want to take a piece or all of this Investment Portfolio that I have and now I want it to be automatically invested into my passive Investments"
Pending
ETFs provide exposure to various market segments, including the total stock market, the S&P 500, tech stocks, healthcare stocks, and real estate companies.
"you can invest into the total stock market there are funds that give you exposure to the total stock market there are funds that give you exposure to the largest 500 companies in the stock market this is called the S P 500 there are funds that give you exposure to tech stocks there are funds that give you exposure to Health Care stocks there are phones that give exposure to real estate companies"
Pending
M1 Finance is recommended as a platform for passive investing due to its simplicity and specialization in the area, with the speaker mentioning it as an affiliate.
"I use a platform called M1 Finance they are an affiliate for minority mindset they have been a previous sponsor for minority mindset meaning if you use them we will get compensated but for M1 Finance I have my link down in the description the reason why I like M1 Finance is just because it's so simple to use and because well they specialize in this type of passive investing"
Pending
Active investing involves researching and selecting individual investments (like specific stocks) to hold long-term, which carries higher risk but also potentially higher returns.
"when we talk about active investing I'm talking about investing money for the long term but now you're looking for individual Investments that you can invest in best now for your research that you want to hold on to for the long term now this could be stocks you're looking for the right company that you believe will be a good investment but this comes with higher risk"
Pending
Real estate investing offers three key benefits: cash flow from rent that covers expenses, significant tax breaks, and ownership of a hard asset whose value tends to appreciate over time.
"when I invest in real estate I'm getting three things Number one I can get cash flow because now I'm working to buy this property an apartment complex a home that way I can rent it out to somebody else now when I can do that I'm getting cash flow because now the rent that I'm getting should cover the expenses it should cover the property taxes the insurance the maintenance the management fees and the vacancy costs that way now every single month is put doing some money in my pocket that's why I like investing in real estate because it gives me that sort of cash flow"
Pending
Startup investing is high-risk, with an estimated 90% of startups failing. While most investments may go to zero, a successful startup can yield substantial returns.
"what you have to understand the startups is that 90 of startups will fail meaning most of your startup investments will go down to zero that's one of the pros and cons of startup investing is that you're probably going to lose money but if you hit your money on a good startup well now you can make all their money back plus more"
Pending
Paying down debt is considered an investment, as it provides a guaranteed return equivalent to the interest rate saved. For example, paying off a 6% mortgage yields a guaranteed 6% return.
"paying down your debt is an investment because it's going to give you a guaranteed return if you have a six percent mortgage rate and you take ten thousand dollars and you pay off this mortgage rate well you get a guaranteed six percent return on that money because that's six percent that you don't have to pay an interest on that principle"
Pending
An asset is defined as something that generates income or puts money into your pocket, whereas a liability is something that costs money and takes it away.
"an asset is something that puts money in your pocket something that you buy for the sole purpose of making money versus a liability is something that takes money away from you"
Pending
Cars are generally considered liabilities because they depreciate in value. Ideally, cars should be purchased with cash and affordably to avoid financing a depreciating asset.
"your car many times people talk about their car being an asset I don't know why but cars are known to be liabilities they lose value so if you're going to be buying a car you want to make sure you can buy a car that you can afford comfortably ideally with cash"
Pending
For most people, their primary residence is a liability (money pit) that incurs ongoing costs, rather than an asset, unless it can be sold for a profit.
"well in reality for the vast majority of people your house isn't an asset actually it's a money pit your house is only an asset if you can sell it for a profit"
Pending
Paying off credit card debt, with interest rates typically ranging from 12% to 25%, provides a higher guaranteed return than investing in the stock market, which historically averages 7-10%.
"if you have credit card debt you might be paying somewhere between I don't know 12 on the low end to let's say 25 on the high end for credit card debt well these numbers are bigger than these numbers meaning if you work to pay off your credit card debt that means you will get a faster and better rate of return than if you just invest your money in the stock market"
Pending
An emergency fund (savings fund) is intended to cover unexpected expenses like medical emergencies, property damage, or job loss, not for discretionary purchases.
"your savings fund is there to protect you against an emergency some people I know Dave Ramsey calls it an emergency fund this is cash you're going to put aside to protect you against an emergency your kid's arm breaks your window breaks your car breaks down something bad happens now you can tap into this savings fund"
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Investments are the primary driver of wealth creation, while savings serve as a safety net against financial hardships.
"your investments are there to actually make you wealthy your savings are just there to protect you and so you want to make sure you have this because then if you run into a financial hardship well you have cash to fall back on"
Pending
Selling unused items on platforms like Facebook Marketplace, Craigslist, eBay, or Amazon can generate extra cash.
"if you have something that doesn't have the sentimental value that's just sitting there collecting dust and you want to make some extra cash well you can turn that dust Into Cash by selling it go to Facebook Marketplace go to Craigslist go to eBay go to Amazon there are so many platforms online where you can now start selling your stuff"
Pending
Couples must be financially aligned, agreeing on spending, earning, and investing goals, to avoid conflict and work towards shared financial objectives.
"talk to your spouse you and your spouse have to be on the same page when it comes to money because if you're there you're cutting back on your expenses you're working to earn more money you're working to invest your money and then you go home and you see your spouse spending all this money on a bunch of things that you think are stupid well that's going to create a lot of fights and it's going to create a lot of tension"
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Pursuing business based on passion, purpose, and mission, rather than solely financial gain, can lead to greater success and resilience, even though some tasks may still feel like work.
"when you really chase that value you chase the purpose you chase the mission you can do a lot more and the reason why is because now when you're working you don't feel like working now that's very cliched and there's a lot of untruth to that because there's some things that you're going to do that just do feel at work like there's going to be days where it's going to be a grind there's going to be some things that don't you don't like doing"
Pending
Willingness to pivot and learn from failures is crucial for business success, as demonstrated by William Wrigley Jr., who changed his business focus multiple times to find what customers truly wanted.
"he found that product he kept pivoting and pivoting and pivoting instead of spending all of his time researching and thinking he just did it and when you do doing it you're learning as well sure you're taking risks yeah you will fail you will screw up but then you have to be able to Pivot because that's where you're going to find the new opportunities"
Pending
In the digital economy, attention is key; capturing the right audience's attention through social media platforms like TikTok, Instagram, and YouTube can lead to capturing their dollars.
"business revolves around attention if you can grasp somebody's attention you can also get somebody's dollar but the question is how do you get the right people's attention now with social media it's how to get someone's attention on tick tock on Instagram on YouTube on podcast on whatever social media platform is up and coming right now or out there right now"
Pending
Content creation is becoming increasingly vital for businesses, with a predicted future shift towards companies establishing direct media outlets to educate consumers about their products.
"content is the backbone for so many businesses now and going forward over the next number of decades I believe that we're gonna see a shift where most companies are going to have some sort of Direct Media Outlet as a piece of the business where a company is going to be working to create content as a way to educate their consumers directly about what their product is"
Pending
To gain followers and attention, it's essential to differentiate your brand by offering a unique vision and idea, rather than simply copying existing content.
"if you keep doing what everybody else is doing if you just copy other people's content there's no reason for somebody to follow you or listen to you or hear you because somebody else is already doing it and they're probably doing it better than you so now you have to come up with your own Vision your own idea and do something different"
Pending
William Wrigley Jr.'s success with gum began by investing in himself, being creative, and incentivizing customers with products like baking soda to buy his soap, ultimately pivoting to gum when he realized its greater market appeal.
"Wrigley took the money that he had and invested in himself because he knew that that was going to give him the best return and could provide him the most Financial Freedom possible and the way that he started was by learning he was creative he had to figure out a way to get people to buy his stuff over somebody else's stuff how could it be different he didn't start off by selling gum he started off by selling soap and then he offered people baking soda as a way to incentivize his customers to buy his soap"
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It is common for individuals in their 20s to spend their initial earnings on desired items and experiences like vacations and new possessions as they gain financial independence after education.
"your 20s are a time when you first start making money and it's very common and normal to be done with your money because well it's the first time you ever make money so now you want to go out and buy the nice things you want to start spending money you want to start going on vacation you want to start buying a nice apartment you want to get a nice car and you want us to start exploring and enjoying life because you're finally out of school and you're finally making some money"
Pending
Depreciation deductions reduce taxable income, allowing individuals to keep more money while paying less in taxes.
"you get to write off this depreciation against your taxes which means you get more money in your pocket while paying less money in taxes"
Pending
Tax-loss harvesting involves selling investments that have lost value to offset capital gains, thereby reducing overall taxable income.
"if you have losses you can use some of your losses to negate some of your wins when it comes to investing"
Pending
The US tax code provides advantages to individuals who create their own income streams or act as investors.
"the IRS tax code essentially pass you on the back if you create your own income or if you are an investor"
Pending
While savings are essential for emergencies, they lose purchasing power due to inflation. Investments, particularly in assets like real estate, are better suited for wealth creation and potentially hedging against inflation.
"your savings are losing buying power so why do we save money we save money to protect us against emergencies we don't save money to try to become wealthy that's what you have to understand about the savings now you should have a goal of how much money to save you want to save somewhere generally between three months and 12 months worth of expenses the amount of money is going to depend on where you are in life if you don't mind taking on higher risk if you don't have any financial responsibilities you don't have kids you don't have a spouse well then you might only want to save three months worth of expenses and invest the rest of the money"
Pending
Investment income (portfolio income) is taxed at a lower rate (around 20%) compared to ordinary income (earned income), which can be taxed at double that rate (around 40%).
"the top tax rate with portfolio income is right around 20 percent the top tax rate when it comes to your ordinary income is about double that"
Pending
Automating the investment process, where funds are regularly transferred from a checking account to an ETF portfolio, is a key strategy for passive wealth building.
"I have it so every week I have money leaving my checking account and it's automatically invested into my portfolio of ETFs that way now I have my passive investing system working to help build wealth on the side"
Pending
Prioritizing investments in business ideas or wealth-generating assets over luxury items like designer brands or expensive cars is crucial for building wealth.
"your Gucci isn't going to make you any money but your business idea can your BMW isn't going to make you rich but your Investments might"
Pending
Paying off debt, such as a mortgage with a 6% interest rate, provides a guaranteed 6% return by saving on interest payments.
"if you have a six percent mortgage rate and you take ten thousand dollars and you pay off this mortgage rate well you get a guaranteed six percent return on that money because that's six percent that you don't have to pay an interest on that principle"
Pending
A 'Rule of Five' suggests that if you cannot afford to buy five units of an item, you likely cannot afford to buy one unit. This is a tool for assessing affordability and avoiding overspending.
"if you can't buy five of them you can't afford one of them"
Pending
Real estate investments are known for providing significant tax advantages within the US tax code.
"real estate offers some of the biggest and best tax breaks that our tax code has to offer"
Pending
For long-term wealth building, it is advisable to invest in assets with lower speculation and more predictable long-term value, rather than chasing short-term gains in volatile markets.
"invest your money into something a little bit less speculative that's going to make you money over the long term"
Pending
Businesses can deduct a substantial portion of the cost of qualifying heavy vehicles purchased for business operations.
"if you need to buy a heavy vehicle for your business well then you can write off a big chunk of their vehicle right now"
Pending
The existing financial system and tax code are structured to provide advantages to investors and business owners.
"our system is designed to benefit the investor and the business owner"
Pending
Passively managed index funds, often managed by computers, typically have lower fees than actively managed mutual funds, which are managed by individuals.
"index funds are generally passively managed versus mutual funds are generally actively managed what that means is actively managed funds are managed by a person passively managed funds because they're managed by a computer are much lower fees meaning much cheaper to invest in than an actively managed fund"
Pending
William Wrigley Jr.'s business success was driven by a willingness to pivot and learn through action, rather than solely relying on research and planning.
"he found that product he kept pivoting and pivoting and pivoting instead of spending all of his time researching and thinking he just did it and when you do doing it you're learning as well"
Pending
The speaker's investment portfolio consists of 75% cash-flow producing assets (real estate, dividend stocks/ETFs), a portion of non-dividend stocks, and 10-20% in speculative investments like startups and cryptocurrency.
"my Investment Portfolio looks like this which is 75 percent of my Investment Portfolio are cash flow producing assets this could be my physical real estate that pays me with cash flow this could be my stock ETFs that pay me with dividends and these could be actual stocks that pay me with dividends as well non-etf stocks so 75 of my portfolio are cash for producing assets then I have this smaller piece of my portfolio which are things like stocks that don't pay dividends and then I have this part which is somewhere between 10 to 15 maybe 20 of my portfolio depending on the day which is my speculative Investments these are things like the startups that I invest in these are things like my cryptocurrency investments"
Pending
Depreciation deductions for real estate lower taxable income, resulting in more money in the investor's pocket and a reduced tax liability.
"you get to write off this depreciation against your taxes which means you get more money in your pocket while paying less money in taxes"
Pending
True wealth is built through long-term investing, not short-term trading, speculating, or gambling.
"because real wealth is built over the long term you don't build real wealth in the short term that's trading the speculating that's gambling I don't do that"
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Individuals who generate their own income through business or investments should work with a smart accountant to strategize and maximize tax deductions and write-offs legally.
"if you are creating your own income you're investing in real estate or doing other things like that it is very important for you to have a good and smart accountant on your side and even if you don't well an accountant can help you strategize your tax deductions and tax write-offs that way you can maximize your deductions while also making sure that you're following the rules"
Pending
The tax code provides benefits to those who create their own income streams or are investors.
"the IRS tax code essentially pass you on the back if you create your own income or if you are an investor"
Pending
Expenses must be demonstrably ordinary and necessary for a business to qualify for tax deductions, and an accountant can assist in this determination.
"you have to show that it's ordinary and necessary and this is where we're going to accountant can help with that"
Pending
Income is categorized by the IRS into three types: earned income (from jobs), portfolio income (from investments held over a year), and passive income (from rental properties).
"there are three General categories of income you have earned income this is the money you make from your job your W-2 income you have your portfolio income this is essentially your investment income if you buy a stock and sell it for profit more than a year later that's considered portfolio income and then you have passive income this is the income you get from your rental properties"
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A commercial building valued at $800,000 can be depreciated over 39 years, resulting in an annual tax write-off of over $20,000 due to the property aging by one year.
"you take the eight hundred thousand dollars you divide it by 89 which is just over twenty thousand dollars which means that now you get to take an additional twenty thousand dollar write-off just because now your building is one year older"
Pending
In 2022, business meals at restaurants were 100% deductible if consumed during business meetings with employees, partners, or clients, a provision related to the post-pandemic period. While still deductible, the deductibility may change in subsequent years.
"in 2022 there was a 100 meals deduction because we were just coming out of the pandemic which meant if you went out and ate at a restaurant and you had a business meeting if you were eating with your employees if you were eating with business partners if you're meeting with other clients well now these meals that you're eating at these restaurants are 100 right off now it's still a write-off but not a 100 write-off"
Pending
Savings are for protection against emergencies, while investments are the primary vehicle for wealth creation.
"your savings are just there to protect you your Investments are there to actually make you wealthy"
Pending
To improve financial health, individuals should track all income sources and expenses by categorizing them on paper or a spreadsheet, enabling optimization of financial habits.
"if you really don't want to be broke again there are 15 things I want you to do and I'll show you the first thing that I want you to do is grade your finances and the way that you do that is to take a piece of paper you can do this on a Google sheet an Excel sheet or whatever but you need to see where all your money is coming from and where all their money is going"
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Spending less than one earns is fundamental to building wealth, as it frees up capital for investment, savings, and charitable contributions.
"once you see how much money you brought in you cannot spend more than that money because if you don't have any money left over you can't invest your money to build wealth you can't save your money to protect you and you can't give any money back because you're spending all your money"
Pending
Wealthy individuals prioritize investing and saving their money first, then spending the remainder, contrasting with the common habit of spending first and saving/investing what's left.
"the biggest mistake the majority of people make when it comes to their money is they spend their money first and then they save and invest whatever's left but if you want to become wealthy and what wealthy people do is they invest and save their money first and then they spend whatever's left"
Pending
A 75/15/10 financial plan suggests allocating a maximum of 75% of earnings for spending, a minimum of 15% for investing, and a minimum of 10% for saving.
"the simplest way that you can do that is by following something like a 75 15 10 plan which says that for every dollar that you earn from here on out 75 cents is the maximum that you can spend 15 cents is the minimum that you invest 10 cents is the minimum that you save"
Pending
Saving should be strategic, aiming to accumulate 3 to 12 months of essential expenses, and then redirecting further savings towards investments for wealth growth.
"you don't want to just keep saving your money forever you want to save your money strategically and that means saving summer between 3 to 12 months worth of expenses"
Pending
Individuals struggling financially should avoid paying premiums for brand-name products that serve as advertising for the companies, as they are essentially acting as unpaid billboards.
"if you're broke if you're struggling with money you don't need to be paying a premium to be wearing these brand name products to advertise their stuff to walk around as a walking billboard when you're not getting paid to do that because now you're paying Nike you're paying Gucci to advertise their products"
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It is possible to increase annual income to a monthly income level, though it requires a significant shift in strategy and effort.
"you can turn your annual income some into your monthly income which means if you're making fifty thousand dollars a year right now guess what you can potentially turn this into fifty thousand dollars a month"
Pending
By foregoing a $717 monthly car payment and investing it in the stock market (e.g., S&P 500) for 40 years with a 7% annual return, one could accumulate nearly $2 million, compared to a car that depreciates to zero value.
"if instead of having a car payment you took the 717 dollars a month and you invested it and let's say you could get just a seven percent annual return on your money which is below the historical average if you just invested your money into say the S P 500 and you did this for I don't know 40 years well instead of having a car that's worth nothing in 40 years you would have almost 2 million dollars"
Pending
For sustainable wealth creation, it's recommended to invest in assets with long-term value and lower speculation, rather than chasing quick gains from popular or trending stocks.
"instead of looking for the next hot stock or the next hot thing invest your money into something a little bit less speculative that's going to make you money over the long term"
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Successful investing hinges on making decisions based on logic and strategy, free from emotional reactions like panic buying or selling, which enhances the ability to generate greater returns.
"the people that actually make money are the people that invest their money not on emotion and this is where if you can take the emotion out of the equation you will have the ability and the psychology to make way more money"
Pending
Avoid financing purchases that do not generate income, as affordability should be based on available funds, not financing options. The 'Rule of Five' is suggested as a guideline for determining true affordability.
"stop financing things that don't pay you just because you can buy something doesn't mean you can afford it if you have a hundred dollars in your bank account that doesn't mean that you can afford to buy a 200 pair of shoes just because you can Finance it"
Pending
Prioritizing the payoff of high-interest credit card debt is financially advantageous due to the guaranteed high return it provides, outperforming typical stock market returns.
"you should pay down your credit card debt before you go out and start investing your money because this money this interest is skinning you alive financially"
Pending
Creating a new income stream through business or entrepreneurship is a viable strategy to significantly increase earnings (potentially 10x).
"what can you do to create an income what can you do to build a business what can you do to create a new stream of income that can allow you to 10x how much money you're making"
Pending
Growing income at a faster rate than expenses is essential for increasing available capital for wealth-building and financial advancement.
"increase your income faster than you can increase your expenses now you will always have more money working to make you wealthier"
Pending
The speaker's investment portfolio is structured with 75% in cash-flow producing assets (real estate, dividend stocks/ETFs), a portion of non-dividend stocks, and 10-20% in speculative investments like startups and cryptocurrency.
"my Investment Portfolio looks like this which is 75 percent of my Investment Portfolio are cash flow producing assets this could be my physical real estate that pays me with cash flow this could be my stock ETFs that pay me with dividends and these could be actual stocks that pay me with dividends as well non-etf stocks so 75 of my portfolio are cash for producing assets then I have this smaller piece of my portfolio which are things like stocks that don't pay dividends and then I have this part which is somewhere between 10 to 15 maybe 20 of my portfolio depending on the day which is my speculative Investments these are things like the startups that I invest in these are things like my cryptocurrency investments"
Pending
Commercial buildings have a depreciation schedule of 39 years. For an $800,000 commercial building value, this results in an annual tax write-off of over $20,000.
"if you now buy a commercial building like this one is then you get to write off 139th of the value of the building so now we know that the value of this building is eight hundred thousand dollars you take the eight hundred thousand dollars you divide it by 89 which is just over twenty thousand dollars"
Pending
Real estate investments provide tax benefits beyond depreciation, as operating expenses like property management, utilities, maintenance, and vacancy costs can be deducted, reducing taxable income.
"now not all the income is going to be your taxable income because now you also have to take out your other deductions so we already took out the deductions for the building that's how you got this fifty thousand dollars worth of profit because maybe you generated two hundred thousand dollars of Revenue but then you have to pay for your property manager you have to pay for your water bill you have to pay for the utilities you have to pay for the maintenance which brought you down to fifty thousand dollars rough numbers"
Pending
Travel expenses incurred for the purpose of inspecting potential real estate investments are tax-deductible, even if no purchase is made, provided the intention was to view properties.
"if you go fly to Florida or you fly to Hawaii and you go in there to look at some real estate even if you don't buy any well now you go in there with the intention of looking at real estate maybe with a real estate broker maybe a look at some properties well now if you do that if you go there with the intention to look at real estate well now that trip that little vacation that you had to Florida Hawaii is now a tax write-off"
Pending
Commercial buildings can have 39-year straight-line depreciation, allowing a deduction of approximately $20,000 annually on an $800,000 building value.
"if you now buy a commercial building like this one is then you get to write off 139th of the value of the building so now we know that the value of this building is eight hundred thousand dollars you take the eight hundred thousand dollars you divide it by 89 which is just over twenty thousand dollars which means that now you get to take an additional twenty thousand dollar write-off just because now your building is one year older this is what's called a paper deduction"
Pending
A 1031 exchange allows for the deferral of taxes on real estate profits by reinvesting the proceeds into another property.
"you can sell your real estate for a profit and not have to pay any money on taxes if you take your profits and buy another property"
Pending
Up to $3,000 of capital losses can be deducted against other income for married filers, or $1,500 for single filers.
"the general rule is that you can deduct up to three thousand dollars worth of capital losses against other types of income if you are married if you are single filing a single tax return that is fifteen hundred dollars"
Pending
Traditional 401(k)s and IRAs allow contributions to be tax-deductible, deferring taxes until retirement.
"if you use a traditional 401k or a traditional IRA you can invest your money into these accounts tax-free meaning when you put your money in you don't have to pay taxes on the income so if you take five thousand dollars from your income and you put this money into your traditional 401k or your traditional IRA you don't have to pay any taxes on the five thousand dollars today"
Pending
HSAs allow for tax-free contributions that can be used for qualified medical expenses, offering a triple tax advantage.
"the way that hsas work is you can put a little bit of money aside tax-free into this account which then you can use to pay for things like deductibles or co-pays or some other qualified medical expenses that you have to pay out of pocket so now you can essentially pay for these expenses tax-free if you put this money into an HSA"
Pending
Homeowners can receive a 30% tax credit for energy-efficient home improvements from 2022 until 2032.
"this tax credit is available from now until 2032 and it gives you a 30 tax credit on energy efficient improvements on your home"
Pending
Long-term capital gains are taxed at a top rate of 20%, significantly lower than the top rate of approximately 40% for earned income.
"at the time of recording this video the top tax rates for long-term capital gains income is 20 percent while at the same time the top tax rate for now your earned income is closer to 40 percent"
Pending
The Section 179 deduction allows businesses to write off the full purchase price of qualifying equipment, including heavy vehicles, in the year they are placed in service.
"the Section 179 deduction which is a heavy vehicle deduction essentially what it says is that if you need to buy a heavy vehicle for your business well then you can write off a big chunk of their vehicle right now like in 2022 my accountant called me and asked me despite what are your thoughts about a G-Wagon"
Pending
Travel expenses for business purposes, such as scouting real estate in different locations, can be tax-deductible.
"another deduction that's been very popular amongst real estate people is travel deductions because now if you go fly to Florida or you fly to Hawaii and you go in there to look at some real estate even if you don't buy any well now you go in there with the intention of looking at real estate maybe with a real estate broker maybe a look at some properties well now if you do that if you go there with the intention to look at real estate well now that trip that little vacation that you had to Florida Hawaii is now a tax write-off because you're going there for business purposes"
Pending
Business owners can deduct car expenses if the vehicle is necessary for business operations, reducing taxable income.
"if you need to buy a car for your business I need to go to California to meet with some people for my business now you get to spend money here and then you pay taxes on whatever's left"
Pending
Investing in index funds, mutual funds, or ETFs provides diversified exposure to a basket of companies rather than individual stocks.
"instead of investing in individual companies you can invest in a fund there's a few different types of funds you have index funds mutual funds and ETFs index funds mutual funds and ETFs are three different types of funds that give you exposure not to one company but to a basket of companies"
Pending
ETFs offer greater trading flexibility, allowing buying and selling at any time during market hours, unlike most index funds and mutual funds.
"ETFs on the other hand don't have those restrictions you can buy or sell an ETF whenever you want as long as the market is open versus most index funds and mutual funds you cannot"
Pending
VTI is an ETF from Vanguard that provides exposure to the total US stock market.
"a couple examples something like vti this is an ETF created by an investment institution called Vanguard which gives you exposure to the entire stock market so we invest in vti you're investing in the total stock market"
Pending
QQQ is an ETF that tracks the performance of the Nasdaq-100 Index, which comprises the 100 largest non-financial companies listed on the Nasdaq stock market.
"you can also invest in the ETF like q q q q is an ETF that gives the exposure to the NASDAQ so now these are different types of ETFs that give exposure to different indexes"
Pending
Investing in rental properties can generate passive income through cash flow, where rental income covers expenses and provides profit.
"when I invest in real estate I'm getting three things number one I can get cash flow because now I'm working to buy this property an apartment complex a home that way I can rent it out to somebody else now when I can do that I'm getting cash flow because now the rent that I'm getting should cover the expenses"
Pending
Startup investing carries a high risk, with approximately 90% of startups failing, but offers the potential for significant rewards if successful.
"the startups is that 90 of startups will fail meaning most of your startup investments will go down to zero that's one of the pros and cons of startup investing is that you're probably going to lose money but if you hit your money on a good startup well now you can make all their money back plus more because you made a good investment so this type of startup investing is high risk high potential reward"
Pending
Paying off credit card debt with interest rates between 12-25% provides a higher guaranteed return than investing in the stock market, which has average returns of 7-10%.
"if you have credit card debt you might be paying somewhere between I don't know 12 on the low end to let's say 25 on the high end for credit card debt well these numbers are bigger than these numbers meaning if you work to pay off your credit card debt that means you will get a faster and better rate of return than if you just invest your money in the stock market"
Pending
An emergency fund should consist of 3 to 12 months of living expenses to cover unexpected events like job loss.
"some people I know Dave Ramsey calls it an emergency fund this is cash you're going to put aside to protect you against an emergency some people I know Dave Ramsey calls it an emergency fund this is cash you're going to put aside to protect you against an emergency how much money well like I said earlier somewhere between three months and 12 months worth of expenses"
Pending
Selling unused items through platforms like Facebook Marketplace, Craigslist, eBay, or Amazon can generate extra cash.
"if you have something that doesn't have the sentimental value that's just sitting there collecting dust and you want to make some extra cash well you can turn that dust Into Cash by selling it go to Facebook Marketplace go to Craigslist go to eBay go to Amazon there are so many platforms online where you can now start selling your stuff"
Pending
Shifting focus from chasing money to creating value and pursuing passions can lead to greater financial success.
"when I stopped chasing money I started making way more money and I know some people say this like in a real cliche way but I seriously did because when I first started trying to figure out how to make money I was doing it just to make money I started event planning and doing party promoting when I was in college because that's all I really knew and had access to"
Pending
William Wrigley Jr. successfully built his gum empire by pivoting his business strategy based on customer demand, starting with soap and then baking soda before focusing on gum.
"Wrigley took the money that he had and invested in himself because he knew that that was going to give him the best return and could provide him the most Financial Freedom possible and the way that he started was by learning he was creative he had to figure out a way to get people to buy his stuff over somebody else's stuff how could it be different he didn't start off by selling gum he started off by selling soap and then he offered people baking soda as a way to incentivize his customers to buy his soap"
Pending
Content creation is becoming increasingly vital for businesses, with companies likely to develop direct media outlets to educate consumers in the coming decades.
"for a long time I've been saying you know you don't have to create content you don't have to create your own content but really this is starting to become more and more important as I see this now because if you aren't entrepreneur content is the backbone for so many businesses now and going forward over the next number of decades I believe that we're gonna see a shift where most companies are going to have some sort of Direct Media Outlet as a piece of the business where a company is going to be working to create content"
Pending
A sock company achieved over $20,000 in sales within the first 30 days by building an Instagram presence and converting followers into email leads with a discount offer.
"when I first first starting off on the internet I started a sock company and the stock company had an Instagram page this is a number of years ago back when there was a lot of different tricks that you can use to get Instagram followers... and those followers that we got on my Instagram page for the sock company were then converted to email leads who we told would get a discount when our socks first launched and then we launched our socks we did just over twenty thousand dollars worth of sales in the first 30 days"
Pending
Willingness to pivot and learn from failures is crucial for business success, as initial ideas may not always work.
"you have to be willing to Pivot because your first idea might not work maybe your second idea won't work either maybe it won't be the third idea but if you keep trying you keep only to take risks you keep learning and you keep pivoting as you learn more about what customers want"
Pending
Avoiding a $717 average car payment and investing that amount annually at a 7% return could result in nearly $2 million over 40 years.
"the average new car payment in America right now is 717 dollars a month do you know what this means this means that if you're worried about gas prices you can't afford this new car payment 717 a month for a new car payment is the highest number we've ever seen If instead of having a car payment you took the 717 dollars a month and you invested it and let's say you could get just a seven percent annual return on your money... for 40 years well instead of having a car that's worth nothing in 40 years you would have almost 2 million dollars"
Pending
A recommended investment portfolio includes 75% in cash-flow producing assets (real estate, dividend stocks/ETFs), a smaller portion in non-dividend paying stocks, and 10-20% in speculative investments like startups or cryptocurrency.
"my Investment Portfolio looks like this which is 75 percent of my Investment Portfolio are cash flow producing assets this could be my physical real estate that pays me with cash flow this could be my stock ETFs that pay me with dividends and these could be actual stocks that pay me with dividends as well non-etf stocks so 75 of my portfolio are cash for producing assets then I have this smaller piece of my portfolio which are things like stocks that don't pay dividends and then I have this part which is somewhere between 10 to 15 maybe 20 of my portfolio depending on the day which is my speculative Investments these are things like the startups that I invest in these are things like my cryptocurrency investments"
Pending
To build wealth, increase income faster than expenses. This ensures that raises and income increases translate into actual wealth accumulation, rather than just appearing wealthier.
"if you want to increase your income faster than you can increase your expenses now you will always have more money working to make you wealthier and every time you get a raise you will actually become wealthier instead of just looking like you're richer"
Pending
A 'Rule of Five' suggests that if you cannot afford to buy five of an item, you likely cannot afford to buy one of it.
"if you can't buy five of them you can't afford one of them with this simple rule you will know whether or not you can afford something"
Pending