Do THIS To Afford Your Luxury Purchases
Published: 2024-03-09
Status:
Available
|
Analyzed
Published: 2024-03-09
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Purchases that are tax-deductible for entrepreneurs effectively cost less than non-deductible purchases because taxes are paid after the deduction.
"if it is a tax deduction that means I make money I spend money and then I pay taxes if it's not a tax deduction that means I make money I pay taxes and then I can spend money so it cost more money to spend money after taxes than it does before taxes"
Pending
Business travel can be justified if it's tax-deductible and can be paid for in cash without incurring debt.
"if you can get a business deduction that makes it a little bit easier to justify but I could also afford this travel meaning I didn't have to go into debt to pay for this travel I was very comfortably able to pay for this travel with cash and not have to worry about the price"
Pending
Purchasing a business asset solely for a tax deduction without the financial means to do so is a poor financial decision.
"if you don't have the money to buy this if you're not going into debt stretch yourself thin to buy this just for the tax deduction well now you're paying the price for something justifying it through the tax reduction"
Pending
Travel to locations like San Diego, Los Angeles, Chicago, New York, and Europe can be considered a business expense if the primary purpose is networking, collaborating with other creators, or appearing on podcasts, even if personal enjoyment is also a benefit.
"we had the opportunity to spend some time in SoCal San Diego in Los Angeles Chicago New York and even Europe and spend some time there because well it was a business expense I got to go there with my business partner who was my wife we got to stay in some nice airbnbs see some really cool places but I'm there for work I'm there networking with people going on other people's podcasts having people on my show and just networking and meeting other cool business people and so now it's a business expense because the purpose of the travel was business"
Pending
Purchasing expensive vehicles like a G-wagon solely for tax deductions may not be beneficial if the vehicle doesn't add significant value to the business.
"It's very interesting to me when you'll hear people who are influencers go out and buy something like a G wagon or a very heavy and expensive car because it's a tax deduction and they'll say I'm buying this because I'm getting a tax right off so I'm spending this $150,000 on this car car yeah you got the tax reduction but how much additional value is that thing really adding to your business"
Pending
Individuals with credit card debt or less than $2,000 in savings must prioritize financial discipline and avoid splurging to exit this phase quickly.
"if you have credit card debt or if you do not have $2,000 saved up this is where you got to be extremely careful with how you spend your money because you got to get past this phase one as fast as possible"
Pending
An emergency fund of 3-12 months of living expenses should be saved for unexpected events, not for major purchases like cars or homes.
"you want to have somewhere between 3 months to a year worth of savings put aside to protect you against an emergency again this is not savings to buy a car or a down payment on a home this is savings to protect you in case something were to go wrong"
Pending
A foundational step in wealth building is to save an initial $2,000 in a savings account for emergency protection.
"you got to start by saving a little bit of money you got to have the first $2,000 in the bank to protect you against an emergency there's not $2,000 in the stock market there a $2,000 in a savings account that's there to protect you against an emergency"
Pending
A maximum of 75% of one's income should be spent to achieve wealth.
"75 cents of every dollar that you earn 75% of your income is the maximum that you can spend"
Pending
Individuals with credit card debt or less than $2,000 in savings should refrain from spending on non-essentials until these financial obligations are addressed.
"you were to pay down your credit card debt in this phase one you are not allowed to go out and spend money and Splurge at all if you have credit card debt or if you do not have $2,000 saved up"
Pending
The 'rule of five' suggests that to afford a luxury item, one must be able to purchase five of them with available cash reserves, meaning a $10,000 Rolex requires $50,000 in savings.
"if I can't buy five of them I can't afford one of them especially in this phase now that's tough if I want to buy a $10,000 Rolex that means I got to have at least $50,000 put aside in cash before I can go out and afford that $10,000 Rolex"
Pending
To achieve wealth, one must spend less than they earn, ideally putting at least 25% of income towards savings and investments. This may require learning from frugal lifestyles or increasing earning potential through education or career changes.
"if you want to become wealthy you cannot spend 100% of your income period And I know this is going to be tough but if you really can't figure out how to spend less than what you make you're going to have to do two things number one figure out how immigrants live because immigrants can live off of very little money and then number two figure out how you can earn more money maybe that means you got to take this money investment money to figure out how you can get a new certificate get a new job get a new career this way you can go out and get more money because you got to have the ability to spend less than what you make and you don't want to be spending 100% of what you make you want to at least be putting a quarter of every dollar that you earn aside to make you wealthy"
Pending
Achieving significant financial change requires a 'decade of sacrifice' focused on spending less, earning more, and investing aggressively.
"I call it a decade of sacrifice the things that I'm talking about are not things you're going to do overnight or things you're going doing 6 months a decade of sacrifice is you're putting in a decade to spend less and earn more so you can invest like crazy"
Pending
When considering a non-essential luxury purchase, the 'rule of five' suggests that one can only afford an item if they have enough cash saved to buy five of them. For a $10,000 Rolex, this means having $50,000 in savings.
"the way that I did it for myself is I follow the rule of five which is if I can't buy five of them I can't afford one of them especially in this phase now that's tough if I want to buy a $10,000 Rolex that means I got to have at least $50,000 put aside in cash before I can go out and afford that $10,000 Rolex"
Pending
Prioritizing used, more affordable vehicles over financing luxury cars frees up capital for investment.
"you might be driving around in a used Toyota Camry or a used Toyota Corolla or a used Honda Accord even they used to financing a BMW 4 Series that is very difficult but if you can do that well that's more money for you to be investing your money"
Pending
To prioritize investment, it's recommended to purchase cars with cash, potentially opting for used models like a Toyota Camry, Corolla, or Honda Accord, rather than financing luxury vehicles.
"if you want to buy a car fine buy a car that you can afford with cash which means you know what for the next few years you might be driving around in a used Toyota Camry or a used Toyota Corolla or a used Honda Accord even they used to financing a BMW 4 Series that is very difficult but if you can do that well that's more money for you to be investing your money"
Pending
Dividend income from stock market investments should be reinvested until the cash flow generated can cover basic living expenses.
"you're generating dividends every 3 months you're getting this cash deposited into your account these Dividends are getting deposited in your account which are constantly going to be reinvested until this cash flow is enough to cover your basic living expenses"
Pending
When investment-generated cash flow surpasses basic living expenses, it can supplement income from a job or business, and aggressive reinvestment can be reduced.
"once this cash flow that you're generating is exceeding your expenses now you can take your foot off of the gas pedal and you don't have to keep reinvesting so aggressively in this because now this cash FL can cover your expenses and the money that you're generating from your job from your business everything else well now this is just supplemental"
Pending
Once investments generate enough cash flow to cover expenses, luxury items like a $10,000 Rolex or a BMW can be purchased using this 'easier earned' money rather than hard-earned income.
"now at this point when you can buy the things that you want you want to buy that $10,000 Rolex you want to buy a nice BMW you want to buy whatever this nice expensive thing but you can pay for it from your cash flow from your Investments well now you can afford it because it's not coming out of your hard-earned money"
Pending
Rental properties can be a source of cash flow for wealth building.
"you can also get this cash flow from Real Estate you go out and you invest in rental properties that are cash flowing"
Pending
When investment cash flow exceeds expenses, one can reduce aggressive reinvestment and begin using the excess cash flow.
"once this cash flow that you're generating is exceeding your expenses now you can take your foot off of the gas pedal and you don't have to keep reinvesting so aggressively in this because now this cash FL can cover your expenses"
Pending
While 0% APR financing might seem appealing for spreading out payments, it can lead to overspending because the immediate cost is reduced, making it easier to buy multiple items and potentially exceeding what would be spent if paying the full price upfront.
"the whole Allure with 0% APR is you spend less money today you want to go out and buy $5,000 sofa today well instead of paying $5,000 down today you just make 12 smaller monthly payments and if you make 12 smaller monthly payments you have more money in your pocket today which allows you not just to buy the sofa today but also buy the big TV today and maybe you go and upgrade to the nicer refrigerator today as well and now you do this with the 0% APR 0% APR 0% APR and now you can go out and buy more things and maybe you have the cash in your bank account but when you don't have to pay the full price you don't feel the full pain and you might be thinking but do 0% APR doesn't cost me anything the cost isn't that you're borrowing money for free the cost is that you're going to go out and spend way more money than you would have if you didn't have to pay with 0% APR"
Pending
The key determinants of wealth accumulation are the duration of investments, the rate of return, and the amount of capital invested.
"The three factors that will determine how wealthy you'll become and when you're going to reach that wealth number it's how long is your money going to be invested for how fast can you grow your money and how much money are you investing"
Pending
Purchases of luxury items become affordable when funded by investment cash flow, as this money is 'easier earned' than income from direct labor.
"now at this point when you can buy the things that you want you want to buy that $10,000 Rolex you want to buy a nice BMW you want to buy whatever this nice expensive thing but you can pay for it from your cash flow from your Investments well now you can afford it because it's not coming out of your hard-earned money"
Pending
Avoid financing purchases like cars or furniture if they do not generate income; opt to buy them with cash instead.
"do not Finance it if it's not putting any money in your pocket which is why I don't Finance cars which is why I'm not going to go out and finance the sofa that I want go out and buy these things with cash"
Pending
The key determinants of wealth accumulation are the duration of investment, the rate of return, and the amount invested.
"the three factors that will determine how wealthy you'll become and when you're going to reach that wealth number it's how long is your money going to be invested for how fast can you grow your money and how much money are you investing"
Pending