It was late May of 2015 when a wayward accountant from the backwoods of Nowhere, Wisconsin traveled to Cascadia. Tucked away in the Washington State foothills stood the Rainbow Lodge where a nondescript gathering of devoted followers of the emerging Mustachian movement were preparing for Camp Mustache II. This was our hero’s destination.
The goal of our accountant was to meet the Great One, Mr. Money Mustache himself, Pete Adeney, and present him with a business offer.
The wayward accountant had a game plan. Since Pete had no idea who this crazy guy was he needed to build rapport before springing his devious plan on the unsuspecting celebrity. He had four days to build this rapport, present his offer and seal the deal. The pressure was on!
Since our hero was already attending the event he figured he could volunteer to give a short tax presentation. And wouldn’t you know it, the Big Guy attended the session and sat right in front of him, no more than five feet away!Read More
When the Western economic world collapsed in 2008 there was only one beacon of light: China.
For decades China has grown at nose-bleed speeds and looked like an unstoppable economic miracle. Now the foundations of that miracle are exposed and the house of cards is in peril. Shadow banks and ghost cities are only the tip of the ice berg.
Speculation over the years of fudged official economic numbers coming out of Beijing is starting to haunt the government there. As 2018 came to a close the government reported the slowest growth in 28 years. This was still a bit north of 6%.
Unfortunately, these slower growth numbers are probably a wildly exaggerated lie. Recently, a former chief economist for the Agricultural Bank of China mentioned a report that two recent studies show China’s economy growing at a mere 1.67% and another showing the economy actually declined.Read More
The IRS released final regulations on 199A. The Kiplinger Tax Letter said it best: “Final regulations provide limited guidance, but IRS gives a safe harbor.”
In this post we will discuss the safe harbor as it relates to “trade or business” with special emphasis on application with rental properties. The safe harbor doesn’t apply to all taxpayers and the trade or business designation is still possible without meeting the safe harbor parameters.
The final regulations run 248 pages. I will follow this post with a detailed post on 199A tiers with several decision trees. Due to the length and complexity of the regulations we are forced to remain focused on one aspect of 199A. Taxpayers with a sole proprietorship, partnership, S corporation or investment property may wish to seek the services of a competent tax professional until more clarification is reached through more regulations or from the Tax Court.
Links are provided at the end of this post to the entire 248 pages of regulations released and Notice 2019-07 (only 10 pages!) dealing with the trade or business safe harbor for real estate issues for your further research.Read More
Blogging is a business. Sometimes it’s hard to believe, but it is true. Along with podcasting, speaking and every other form of training and education, blogging is a business. Sometimes a really big business. And businesses take work to manage and grow.
It is easy to forget that those friendly bloggers you communicate with work some serious hours to bring you information and perhaps a laugh or two. Most people don’t realize bloggers are sweating it out at the keyboard in the wee hours of the morning to get a post out on schedule.
And then there is the invisible work. It seems like blogging is about the cheapest hobby going until you realize that every part of the platform demands a fee and usually loads of time. And that is where this blogger enters.
I originally planned a detailed post of the coming collapse of China when the IRS released another 249 pages of regulations on Section 199A. The ink wasn’t dry before the calls flooded in for a brief post on the IRS release. The good news is we finally have a definition for a trade or business as it applies to 199A. The bad news is those 249 pages contained a lot of material and one simple post wasn’t going to cut it. A series was in process before the next hammer fell.Read More
Retirement, or at least the ability to to live a hedonistic lifestyle, appeals to many people. Age has nothing to do with it. Punching a clock working for the man get old real fast when you don’t have perspective. Until you realize how useless life becomes when you spend each day creating no value and have no real reason to live. Then the job looks more appealing. Or starting a business. In either case you get real interaction with people on a similar mission and it brings the spice back to life. (Redditors, fire up your engines!)
But I contend, as I often have in this blog, that retirement had nothing to do with the FIRE movement. It was never about retirement; that was the dream sold to get victims in the door. FIRE has always been about wealth, about independence and freedom. People never wanted to be retired like and old worn out machine. They wanted meaningful activities. Financial independence allows the freedom to choose and that is what people really wanted all along.Read More
“Start a side hustle or small business” is a common refrain when working to reduce debt or retirement planning is involved. It all sounds easy on paper until you realize most businesses fail within a year or so.
The problems with starting a business are myriad. Most businesses fail because they either have too little or too much business and the problems begin with the price or fee charged the customer.
Yes, some businesses fail over financing and other financial issues, but price frequently is the destroyer of small businesses. Charge too little and you end up with too much work with no profits to show for the effort; charge too much and nobody will even waste their time kicking the tires to see how good you really are.Read More
My grandfather always had a saying that has stuck with me: Never take off the pile. Granddad was an old farm boy living the dream in the backwoods of Nowhere, Wisconsin. He lost the farm in the farm crisis of the early 1980s and then rebuilt his fortune doing nothing more than saving a serious portion of all his income. Most money was only deposited in bank accounts. And he still managed to re-grow his liquid net worth well into the seven figures starting over from an old age.
The corpus of your investments, that original seed money, is sacred. If you never touch the sacred you will always be safe! The income stream keeps growing larger with time. Dividends reinvest to earn more dividends. You don’t need a pension when you have one far safer.Read More
There are many forms of communication; none are as vital as the written word. It is the edited word which conveys more information than any other media. Sure, video is superior when showing majestic vistas, but words, when edited well, are the most powerful learning tool we have. There is a reason the written word has survived so long even with radio, television and YouTube desperate to overturn the monarchy.
Wealthy people the world over credit their success to reading. From Warren Buffett to Bill Gates to Elon Musk to Richard Branson to your favorite accountant, good books are part of the history of the people currently in the winner’s circle. Educated people possess the tools to create the future the rest of us are forced to live in. Most failures can be traced back to a lack of understanding or misunderstanding.
For these reasons I’ve been a dedicated reader since my late high school years. Before that I couldn’t get myself to read a book the the end and it showed. I struggled with direction in life until the magical day I picked up a book from the school library on weather. It was a mere 128 pages and there were a few drawings of clouds and cloud formations, but when I finished that book something clicked and I never looked back.Read More