Wealth creating strategies

[Ramonjp]

I would like to know about what strategies can be used to create wealth.

 

[travelover]

I would like to know about what strategies can be used to create wealth.

Live below your means and invest in stock index funds steadily for 30 years.

Oh, did you mean like, right way?

 

[Ramonjp]

Legal of coarse.

 

[ejman]

Take 10 to 20% of your income invest into stock index funds ( preferably into a Roth to the allowed max) regular taxable funds otherwise. Use any available 401K particularly if there is an employer match (free money) keep it up for 30 years - you be done. That's what I did (except for the Roth's not available at my time) worked so I could ER at 52.

 

[exnavynuke]

Have money, invest it wisely, rinse and repeat.

 

[rodi]

Save as much as you can and invest it in life expense funds. Keep adding to it. Compounding is your friend.

 

[Ramonjp]

That's pretty much what I'm doing right now. I'm shifting my income by using the extra money from my paycheck that i get from adjusting my w4. That put me in a lower tax bracket. I'm using that money to pay off key debt and fix my credit.

 

[jazz4cash]

That's pretty much what I'm doing right now. I'm shifting my income by using the extra money from my paycheck that i get from adjusting my w4. That put me in a lower tax bracket. I'm using that money to pay off key debt and fix my credit.

Uhhhh....no, that's not quite how it works. Reduce expenses to pay down debt faster. Adjusting w4 does not change your tax bracket.

 

[COcheesehead]

Open a business.
Open an eBay account to sell.
Save more than feels comfortable.

 

[Ramonjp]

Well that's exactly what I did. I went from paying $120+ in federal tax and now I've gotten it down to as low as $0.00.

 

[jazz4cash]

When I had a lot of debt, I never stopped saving...ever. I maintained decent credit by shifting the debt to very low interest rates and continued to invest in low cost index funds. Many believe it is necessary to pay down debt before saving but I felt empowered knowing I was still saving. I didn't try to time the market (except maybe one time) and I budgeted carefully. LBYM.

 

[Ramonjp]

My plan is to hit my freedom goal within the next 10yrs

 

[target2019]

1. Avoid borrowing
2. Continue growth and education
3. Find a good mate

I don't think we've created as much wealth as we could have, because I was not really ambitious about the money side. Trying to pass some of this wealth to the next generation, but who knows what might happen?

 

[Gumby]

Well that's exactly what I did. I went from paying $120+ in federal tax and now I've gotten it down to as low as $0.00.

If I understand you correctly, you increased your exemptions on your W-4 so that you would have less tax withheld from each paycheck. You do know that you'll have to pay all that tax when you file next April, don't you? And you'll probably face an under-withholding penalty.

 

[Ramonjp]

I've learned that the best way is to pay of the debt with the highest interest rate first.

 

[Ramonjp]

As a home based business owner ill be able to combat any liabilities through my tax write-offs

 

[COcheesehead]

Well that's exactly what I did. I went from paying $120+ in federal tax and now I've gotten it down to as low as $0.00.

Uncle Sam may bite you at tax time.

 

[COcheesehead]

As a home based business owner ill be able to combat any liabilities through my tax write-offs

Good luck.

 

[Gumby]

As a home based business owner ill be able to combat any liabilities through my tax write-offs

Where does the W-4 come from?

 

[Ramonjp]

I'm investing that into my business. So it becomes a business expense

 

[COcheesehead]

I'm investing that into my business. So it becomes a business expense

Asset investment and expenses are sort of different. You know that, right?

 

[Gumby]

I'm not a business owner and I'm hoping someone who is will step in with better information, but it seems to me that the tax "write-offs" you expect are taken at the entity level. If you are paying yourself a salary (and hence have a w-4 for withholding) then you owe taxes on that salary.

I'm having difficulty understanding your set up. Are you employed by someone else who is paying you wages or a salary under a W-2? Are you a 1099 independent contractor? A sole proprietorship or an S-Corp?

 

[Ramonjp]

I am a w2 employee and I have a HBB. I am a sole proprietor for a financial success company.

 

[Ramonjp]

No employees no inventory no storefront but a an HBB owner I get the same tax incentives as someone who owns a business.

 

[COcheesehead]

I'm not a business owner and I'm hoping someone who is will step in with better information, but it seems to me that the tax "write-offs" you expect are taken at the entity level. If you are paying yourself a salary (and hence have a w-4 for withholding) then you owe taxes on that salary.

I'm having difficulty understanding your set up. Are you employed by someone else who is paying you wages or a salary under a W-2? Are you a 1099 independent contractor? A sole proprietorship or an S-Corp?

You are correct. Taxes are due at the corporate and individual level. Expenses may or may not apply at each point.