Workforce
“A person will sometimes devote all his life to the development of one part of his body - the wishbone.” – Robert Frost
As the year starts to kick in with putting my work goals in order, I’m reminded of something that Robert Kiyosaki rants about in his book, Rich Dad Poor Dad. If you are gainfully employed in this country then, “You work for the government. The government takes its share from your paycheck before you even see it. By working harder, you simply increase the amount of taxes taken by the government - most people work from January to May just for the government.”
His conclusion assumes a 40% tax bracket. But even if we take the more common 30-35% view, then this is still January to April – a third of the year where we work just to pay our share to the government. I find this to be sobering news. Peter Sander offers some common ways to reduce income taxes. “One way is to start a legitimate business. There are tough tests for a legitimate business, but if you can build a good business, many related expenses for home, travel, etc. become eligible for deduction.”
It goes back to Kiyosaki’s belief that people need to make more money by generating income outside of their normal employment. He suggests buying businesses or buying income producing rental properties.
Madame X at My Open Wallet wrote a good post yesterday about up and coming personal finance bestsellers. She mentioned Loral Langemeier and her book, The Millionaire Maker. “She thinks entrepreneurship is the way to go and wants people to quit their jobs, start small businesses and buy income-producing rental properties with their savings. She does not focus on cutting expenses or getting out of debt. ‘Millionaires don't worry about a latte a day, you know,’ she says.”
I tend to agree with the “saving money” thing has little impact. Jeanine and I are keeping track of our expenses (down to the penny) for the first two months of the year and after the first week we both laughed because we hardly spent any money aside from the $108 at the grocery store that week. I work at home so unless I’m traveling, there is little chance for those impulse/affordable luxury buys. Even when I’m on the expense account, I still can’t bring myself to spend the company’s money for a $3 latte, when the regular drip Grande is what I would normally order on my own dime. I’m cheap by nature and not a consumer. Sure, we could probably cut here and there… obviously from yesterday’s post, you all know that we’re suckers for premium cable (Showtime, Logo, etc). But that falls under entertainment and in the big scheme of things, our entertainment is not extravagant either.
The big difference is generating that additional income stream. I’ve focused the last few years on rental properties but I agree with Ms. Langemeier that owning a business is also the way to go. I’ve dabbled with the idea of buying a franchise, but to be honest, aside from Quizno’s (love those subs!) nothing really excites me. And even then, Jeanine always asks if I really want to be making sandwiches all day. You know, franchises do better when they are owner-operated.
I guess as long I continue to add value as an “individual contributor” in the software industry, then I should focus my efforts on buying more real estate and other smart investments with my earnings. But I still wonder about the sandwich path…
As the year starts to kick in with putting my work goals in order, I’m reminded of something that Robert Kiyosaki rants about in his book, Rich Dad Poor Dad. If you are gainfully employed in this country then, “You work for the government. The government takes its share from your paycheck before you even see it. By working harder, you simply increase the amount of taxes taken by the government - most people work from January to May just for the government.”
His conclusion assumes a 40% tax bracket. But even if we take the more common 30-35% view, then this is still January to April – a third of the year where we work just to pay our share to the government. I find this to be sobering news. Peter Sander offers some common ways to reduce income taxes. “One way is to start a legitimate business. There are tough tests for a legitimate business, but if you can build a good business, many related expenses for home, travel, etc. become eligible for deduction.”
It goes back to Kiyosaki’s belief that people need to make more money by generating income outside of their normal employment. He suggests buying businesses or buying income producing rental properties.
Madame X at My Open Wallet wrote a good post yesterday about up and coming personal finance bestsellers. She mentioned Loral Langemeier and her book, The Millionaire Maker. “She thinks entrepreneurship is the way to go and wants people to quit their jobs, start small businesses and buy income-producing rental properties with their savings. She does not focus on cutting expenses or getting out of debt. ‘Millionaires don't worry about a latte a day, you know,’ she says.”
I tend to agree with the “saving money” thing has little impact. Jeanine and I are keeping track of our expenses (down to the penny) for the first two months of the year and after the first week we both laughed because we hardly spent any money aside from the $108 at the grocery store that week. I work at home so unless I’m traveling, there is little chance for those impulse/affordable luxury buys. Even when I’m on the expense account, I still can’t bring myself to spend the company’s money for a $3 latte, when the regular drip Grande is what I would normally order on my own dime. I’m cheap by nature and not a consumer. Sure, we could probably cut here and there… obviously from yesterday’s post, you all know that we’re suckers for premium cable (Showtime, Logo, etc). But that falls under entertainment and in the big scheme of things, our entertainment is not extravagant either.
The big difference is generating that additional income stream. I’ve focused the last few years on rental properties but I agree with Ms. Langemeier that owning a business is also the way to go. I’ve dabbled with the idea of buying a franchise, but to be honest, aside from Quizno’s (love those subs!) nothing really excites me. And even then, Jeanine always asks if I really want to be making sandwiches all day. You know, franchises do better when they are owner-operated.
I guess as long I continue to add value as an “individual contributor” in the software industry, then I should focus my efforts on buying more real estate and other smart investments with my earnings. But I still wonder about the sandwich path…
posted by Nina Smith at 6:40 AM
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