Important Year End Tax Moves To Make

Year End Tax Moves SunsetThe good thing about having multiple income streams is the financial security it provides. The bad thing about having multiple sources of income is a much more complicated tax structure. With 70,000+ pages to the tax code, things can get confusing.

My income sources come from investment income, rental income, W2 income, deferred income, K1s, and 1099 income. My goal is to shield as much income from taxes as legally possible and keep Adjusted Gross Income to no greater than $250,000 a year due to AMT and deduction phaseouts that completely go away after this level.

But as my online business grows, it gets harder to shield income. For example, one can only contribute so much to a 401K and SEP IRA. Meanwhile, I can’t eat $300 business steak dinners every night with clients nor am I willing to buy a luxury car to write off or pay 4X the price for first class flights. Maximizing ROI and minimizing waste is the way I like to run my business and my personal finances.

The majority of actions to reduce your taxes must take place during the calendar year unless you’re filing as a business entity on a fiscal year. So if you want to pay less taxes, it’s worth setting aside some time during the holidays to wrestle this beast to the ground.

Do You Feel It’s Our Duty To Help If We Can?

A helping hand Financial SamuraiI’d like to be fabulously wealthy. So wealthy that I wouldn’t think twice about taking a taxi home or booking a first class ticket to Europe on my next adventure. Alas, I still ride coach with terrific strangers who take both arm rests even though I’m sitting in the middle. It would be nice not to have to pontificate for years whether or not I should finally buy a new car. It would be lovely not to get upset about speeding or parking tickets.

To the mansion, Alfred!” would be a fun phrase to say once in a while.

But I’m happy because the journey is a riot. To be able to share stories with all of you makes life so much more fun. I swear, if I wasn’t already writing for free online, I’d consider paying Al Gore, the creator of the Internet, the right to continue publishing online every month!

So I got to thinking during hot tub time one day whether we all have the duty to help if we can help.

Candid Reasons Why You Didn’t Get The Job According To HR

Rejected From A Job

Rejection

There’s too much demand for any one job position. It doesn’t matter whether you are applying for a job as a barista at Starbucks, or as a marketing director at a tech company. If you get the job, it’s like winning the lottery. When demand is too great, companies deploy very quick and easy screening mechanisms to whittle down the pool. At Goldman, unless you were the son or daughter of a client or high level employee, you had to have at least an A- GPA to be considered for an interview. At least that was the case with my class in 1999.

Goldman hired roughly 60 Equities financial analysts total around the world my year. Somewhere around 8,000 candidates applied. By screening schools, GPA, and legacy, HR told me they culled the pool down to about 600 potential candidates for phone interviews, alumni interviews, and Super Day in NYC. Without screening mechanisms, the hiring process would take even longer than it already takes (my interview process took eight months).

Given the post, “Why It’s So Hard To Get A Mortgage According To A Loan Officer” was such a hit, I’d like to share with you some candid feedback I’ve received from several HR managers during my time.

Be Careful Justifying Your Spending As An Investment

Lambo Huracan For $237,000

The Lambo Huracan For $237K: Because You’re Worth It

One of my readers on The Spending / Savings Balance post asked why I should feel bad spending money on remodeling my house when it should be considered an investment, so long as I don’t go over board. The truth is that when I was cutting multi-thousand dollar checks every week, I was telling myself that all this spending was indeed an investment to make myself feel better about going outside my spending comfort zone.

But now that I’ve taken a hiatus from spending for a couple months, given it takes time to get my drawings approved by the San Francisco Planning Department, I’ve come to realize how dangerous it is to justify every single dollar spent as an investment. An investment has an implicit assumption that it may provide a return some time in the future. The reality is that there are no guarantees, except for the guarantee you no longer have the money you spent!

My hope is that by spending around $100,000 on my home, I’ll provide at least $200,000 in value at some point in the near future. Given I was so focused on this type of “investment return,” I cut checks with ease for the first $60,000. Now that I’ve taken a break and only have $40,000 left in my budget to spend, I’m going to be as scrupulous and strict as possible to make sure the contractors do an amazing job within budget. If I didn’t take a break from remodeling, I’m pretty sure I’d go over my budget by at least $20,000.

Is There A Natural Spending / Savings Balance?

Balanced Spending by Andrew MacGill Flickr Creative commonsFor the past several months, I’ve been spending tens of thousands of dollars remodeling my new old house. I’m only its second owner in the house’s 68 year old history and it needs a lot of work as a result. For example, I just spent $9,000 painting the exterior, the fence, the windows, and all the metal fixtures. The painter estimated the house hadn’t been painted in 25 years! He mentioned that his crew normally uses two gallons of spackle to fix stucco cracks on a house my size, but they used eight gallons to smooth everything out.

Even though I budgeted extra money to bring the house up to date, I still feel dirty spending so much money. It makes me wonder whether we all have some type of self-correcting overspending limit, just like we all have this self-correcting over-eating limit. If we didn’t, we’d all be obese and broke. Nobody I know wants to work forever and feel the constant stress of having no money.

If the average desire to spend is a 5 out of a 1-10 point scale, I’m about a 3. But for the past several months, I’ve been spending at an uncomfortable 9. I’m curious to know where would you rank yourself on the spending scale?

Some of us might have to hit rock bottom before we find our happy spending / saving balance, but at least that makes future spending and savings habits that much stronger.