Floating Credit & Wealth Building

Learn how you can use credit to achieve more and avoid paying interest…

 

In the current economy many who have excellent credit or good to excellent credit are utilizing the credit system to float credit in a way that best serves their financial goal(s) and not the goal(s) of creditors.

 

Many “baby boomers” may remember floating checks for a number of days (for their benefit) in the past due to the slow processing of checks by the banking industry several decades ago. Fortunately, gen x (those born after the baby boomers), gen y ( millennials) and gen z (those who followed the millennials) don’t have to contend with the slow processing of the past as many financial transactions seem to happen instantly.

 

However, the opportunity to float credit (for your benefit) is available to you and all who have the desire to do so in the current economy.

 

In this discussion The Wealth Increaser.com will look at a number of ways that you can use credit to your advantage (float credit) so that you can avoid paying interest, gain rewards that fit your lifestyle—and use the card to make purchases that you normally make anyway—to achieve more credit wise—and in the management of your overall finances.

 

Avoid Paying Interest

 

If you have excellent credit you can use zero percent credit cards (many are available that provide up to 18 months of zero percent interest) to make purchases on grocery, lifestyle purchases, clothing and other purchases you normally make on a monthly basis.

 

In some instances credit cards can be used in ways you don’t normally use credit such as tuition and related fees, monthly utility payments and the like.

 

As long as you have the monthly income (discretionary income), a properly funded emergency fund and the mastery of your credit  at your disposal—you can use your credit card(s) to manage your finances to your benefit and pay zero percent interest as long as you pay off the balance within the promotional period (i.e. the 18 month period).  Keep in mind that you will have to make a “minimum payment” during the promotional period based on your balance.

 

Alternatively, you can use your credit card that does not have a zero percent promotion to charge in the same manner discussed above, however to avoid interest you would have to pay off your balance monthly (usually within 30 days).

 

You can also use your creativity to come up with other ways that you can avoid paying interest by effectively using credit—based on your unique financial position and your future goals.

 

For example, if your goal was to purchase a vehicle, house or other major purchase you might want to do that first—then start avoiding the payment of interest based on the above strategies.  In short, it all depends on your outlook for your future and how you want to go about achieving your future goals.

 

Use Reward Cards More Effectively

 

If you have excellent credit you can use reward cards to reward yourself for utilizing the card and get the perks that you desire or may find to be of benefit to you and your family.

 

If you are a frequent flyer you can find a number of reward cards (including many that are issued by the airliner) that will assist you. If you like to eat out a lot, purchase grocery, gas, household goods, furniture and the like—you can find reward cards that will reward you at various levels when you use them.

 

We all have a purpose for our life and the direction that we all take will differ.  Many credit card issuers recognize this reality and offer perks or rewards in many forms that are designed to entice you to make purchases with their card.  As long as you are wise in your approach and you have a handle on your finances–you can make reward cards work for you and not against you during your lifetime.

 

Manage Your Credit & Finances on Purchases You Normally Make

 

You can use zero percent cards, reward cards and make the decision to manage your credit more efficiently by utilizing your credit in a wise manner.

 

You already know that you must eat on a daily basis, take transportation or travel to various destinations, purchase household items etcetera—so why not do that and at the same time avoid paying interest and make one (or a few depending on how many credit cards you use) monthly payment(s) for all of those items at one time—thus helping you manage your finances more efficiently and in many cases more effectively.

 

You can also use this approach to see where you are spending on various categories on a monthly basis as many credit card issuers will provide you a breakdown of where spending on the credit card went.

 

In addition to a helpful monthly breakdown of your credit activity by category many credit card issuers will also provide you a helpful chart and possibly tips and other promotions based on your spending habits.

 

You can use this information for budgeting and planning your future in a more precise manner.  This information can help you get on a serious path to managing your finances more comprehensively throughout your lifetime if you are not doing so at this time.

 

Conclusion

 

If you have excellent credit and a meaningful understanding and handle on your current finances you can use many strategies to get out in front of your credit usage.  It is imperative that you have analyzed your cash flow, established a sufficient emergency fund and analyzed your credit and finances  in a comprehensive manner prior to using the “floating credit” strategy mentioned in this discussion.

 

You can choose to float credit and build wealth more efficiently as one of many strategies in the overall planning of your financial future.

 

If you are one who likes to avoid the use of credit at all costs—you can continue to do so !    If you now have no credit card debt or you can pay off your credit cards (if you find yourself in the unfortunate position of owing credit card companies at this time) and then stop using credit–you can put yourself in position to get ahead financially!

 

However, if you desire to “float credit” in an effort to achieve more financially—it is ” the hope of TheWealthIncreaser.com that this discussion has given you some insight on how you can get it all started or continue to use credit to your advantage throughout your lifetime.

 

You don’t want to get in a position where creditors are in control and you are paying them interest on a monthly basis at anywhere from 10% to 25% by “carrying a balance” and not paying off the debt in a timely manner! 

 

You must avoid that scenario or put together a plan to get out of that scenario at the earliest time possible!

 

If you decide to apply for a zero percent interest card or a reward card be sure that you always pay on time  and you must be keenly aware of the effect that a new card will have on your credit utilization, credit time length, credit type and inquiries as a “hard pull” by creditor’s can pull your score downward some for a certain time period and negatively affect your credit file(s).  

 

Therefore, you want to use your best judgment if you anticipate a major purchase where your credit will be utilized in the near future as your credit and credit score may affect your ability to qualify for the loan or line of credit.

 

You may also not know your “credit limit” (the total amount of credit available for use on your card) until the hard pull of your credit is done and the card is granted to you in almost all cases.

 

Also, be aware of processing fees, convenience fees and other fees when you use your card in a non-traditional way such as at a public or private university, governmental agency, quasi-governmental agencies and the like as those fees can eat away at your zero percent interest and/or rewards in a way that makes paying with credit less appealing when the fee(s) are factored in.

 

In addition, look for the opportunity to “triple dip” by finding a card that offers zero percent for a time period certain, rewards and the ability to help you manage your credit more effectively and efficiently by providing you the monthly breakdown of your spending activity and possibly your credit score—all with one card.

 

However, if you now owe credit card companies you must come up with a pay off or pay down plan so that you can use credit to your advantage by “floating credit” or “not utilizing credit” because you have the cash flow and/or net worth that allows you to make the decision to utilize or not to utilize credit—your choice—not creditor’s!

 

Or another way of looking at it is “you” are in control of your credit and financial future!

 

To keep it short and sweet, you have learned how to use credit cards in an intelligent, consistent and proactive manner so that you can achieve more throughout your lifetime and you now know how to make credit work for you and not against you and you are now on your way to managing your finances more responsibly by seeing your future with more clarity.

 

In addition, if your credit is not where you want or need it to be “at this time” you can start now on moving toward excellent credit by frequenting this site.

 

By doing so you can start on a real path to getting your credit right.

 

Isn’t it time you approach your credit in an intelligent, consistent and proactive manner so that you can achieve more throughout your lifetime.

 

All the best toward your “floating credit” success….

 

All About Credit

Credit Resources

Credit Improvement

Credit Card Payoff

More on Reward Cards

The Three Step Structured Approach

 

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Reward Cards & Your Success

Credit Management

College Graduates & Credit

College Graduates & Wealth Building

All About Credit

Credit & Insurance

The 3 Step Structured Approach to Managing Your Finances

Credit Improvement

 

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Cash Flow & Investing in Your Future

Learn how you can invest and build wealth more efficiently in the current economy by knowing where your money goes on a monthly basis…

 

It is important that you have a workable understanding of how your monthly cash flow will affect your future outcomes.

 

In this discussion TheWealthIncreaser.com will look at ways that you can effectively manage your cash flow in the current economy, as you age–and during your retirement years.

 

By knowing this information at this time (right now) you can more effectively plan your and your family’s future so that you can take the vacations that you desire, do more on a monthly basis with your kids and grand-kids, donate time and money to your favorite charitable organization(s), enjoy entertainment in a way that makes your life more meaningful and pursue other goals that are dear to you and your family.

 

There is nothing that you can do to change certain things in your life that may have happened to you in the past.

 

However, if you make the decision at this time to look at your finances and your future in a more intelligent, consistent and proactive manner you CAN change the outcome of your investments and live the type of retirement that you desire.

 

You Must Know Your Current Cash Flow

 

It is imperative that you at this time take a serious look at your monthly inflows and outflows of income and expenses from all sources.

 

Does your income exceed your expenses on a monthly basis or is there a shortfall? 

 

This is something that you must know so that you can build wealth and invest in your future in a way that will ensure that you will attain realistic results.

 

You must at this time define your monthly income, gather your monthly expenses and determine if you have discretionary income that you can use to save more efficiently or pursue other goals that you may have.

 

With your knowledge and understanding of just this information you will put yourself well ahead of those in the general population and you will be showing a serious intent to improve your living condition for yourself and your family.

 

You Must Know Your Cash Flow at the Various Stages in Your Life

 

Now that you have a handle on your current financial condition as it relates to your monthly cash flow, you can now plan for your future.

 

Will you make a serious commitment to know where your monthly income and expenses are at this time–or will you procrastinate?

 

You can now pay off or pay down your debt, make the decision to get more income, increase your retirement contributions, and make other adjustments based on your lifestyle and where you want to go in your future.

 

You Must Know Your Cash Flow During Your Retirement Years

 

After you have invested in your future in a way that would take you toward your retirement number you must know your income from all sources along with your monthly expenses during your retirement years.

 

Did you plan appropriately and in a manner that allows your monthly income from all sources to pay your monthly expenses for the next 20 to 30 years (your remaining life expectancy) or is it likely there will be a shortfall that would force you to continue working?

 

Will you have a substantial excess that will allow you to leave a legacy for your heirs?

 

Those and other probing type questions are what you must ask yourself and answer appropriately during this time so that you won’t have to look back in regret during your retirement time.

 

Conclusion

 

It is imperative that you have an overview of your life stages at this time so that you can invest in a wise manner at the various stages in your life.

 

It is also important that you measure the success that you achieve at the various stages in your life on your ability to pay your monthly expenses during your retirement years in a manner that allows you to do just that—and have money left over for the enjoyment of life that you desire during your retirement years.

 

Will you have the monthly income from all sources (social security, 401k, pension income, investments and other sources) that will allow you to live at a comfortable level after the payment of all of your mandatory monthly expenses?

 

If you don’t see it happening after sincerely analyzing your finances at this time—NOW is the time to alter your planning to make it happen!

 

In addition to aiming for your “retirement number” be sure to also aim for your “ability to pay your monthly bills” and have cash left over for the enjoyment of life on a monthly basis.

 

Your “retirement number” is a lofty goal, however it may not bring you the monthly income that you need to pay your expenses and live at the level that you desire during your retirement years or your remaining years on earth based on your life expectancy.

 

Be sure to look at your finances in a comprehensive manner at this time so that you will minimize or reduce any future surprise as it relates to your inflow and outflow of cash on a monthly basis.

 

If your monthly income does not look like it will cover your monthly expenses based on your analysis at this time, it is your responsibility to come up with more income or pay off or pay down your debt so that you can get your debt to a level that allows you to get the numbers on a monthly basis—as far as your income and expenses—to turn in your favor.

 

Will you need 60%, 75% or 85% of your current income to live at the level that you desire?

 

It is up to you at this time to determine the path that you will take as far as making your retirement years a more pleasurable experience as you complete your journey on planet earth.

 

Always remember that joy and confusion cannot live in the same house!  Make the decision now to see your retirement years with clarity by investing the time NOW to achieve and live the way that you desire LATER (during your retirement years).

 

Now is the time that you go after what you desire with real zest.

Now is the time that you give it your best.

 

You must at this time know–your cash flow!

You must at this time decide to pursue results that will show!

It is up to you to aim high or low!

Now is the time that you reap what you sow by planting (planning) in advance so “you” will know!

 

All the best to your cash flow and retirement success as you pursue your future with more zest…

 

Go to Calcutlator.net to calculate your current monthly cash flow number…

Go to T Rowe Price for free 30 second retirement projection calculator…

Go to Kiplinger.com for your retirement number calculator,,,

Go to 100 money saving tips that can help improve your cash flow…

Go to Net Worth & Wealth Building page on this site to learn about your Net Worth and how it relates to your Cash Flow,,,

 

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Net Worth & Wealth Building

Learn why it is imperative that you know your net worth as you pursue your wealth building efforts…

 

In the current economic environment there are many who are trying to get ahead financially.

 

Although that is a lofty goal, many have no clue or are totally unaware of where they now stand financially as it relates to their finances and particularly their net worth as they attempt to build wealth.

 

In this discussion TheWealthIncreaser.com will integrate your understanding of how you can manage your finances on a daily basis with the knowledge that you need to know that can help you  “increase of your net worth” and ultimately your wealth–so that you can live in a manner that will bring you the joy that you desire on a continuous basis!

 

It is very important that you have a real understanding of what you own (your current assets) and what you owe (your current liabilities) as that is a critical factor as you move forward in your financial life.  It is also very important that you at this time come to the full realization that your “Self Worth” is far more important than your “Net Worth” as you build wealth!

 

In simple form, theory and practice you can determine your net worth by creating a personal balance sheet so that you will know what you own and what you owe (assets minus liabilities equal net worth) and create a level of comfort or discomfort within your mind–depending on the “outcome of the number that you come up with”–as it relates to your net worth at this time.

 

However, even if the number that you come up with is not of your liking, you can change all of that by making the decision to do so and then putting an action plan in place that will take you to where you need or desire to be.

 

If your net worth is not at an acceptable level, you can take real steps that can assure that you will get your finances to an acceptable level or to the level that will make life more meaningful and enjoyable for you and your family!

 

If your net worth is at an acceptable level you can continue to make good decisions as it relates to your finances and build the type of wealth that will take you toward the net worth that you desire or toward  the net worth that will make life “more enjoyable” for you and your family.

 

You can start on a journey of improving your net worth so that you can do what you really desire to do during your lifetime by taking several important steps:

 

1)      Know how to use personal financial statements to your advantage

If you approach your finances with the creation and understanding of a personal budget or cash flow statement you can put yourself in position to make the right–or at a minimum a good decision as it relates to your financial future.

 

You also need to create a personal income statement if you desire even more clarity about where you are headed as far as your finances are concerned.  You can look at your personal income statement in the same manner as your cash flow statement—however it is on a 12 month or annual basis, whereas your cash flow statement or budget is on a monthly basis.

 

In addition, a personal balance sheet will provide you the knowledge of where you stand financially as far as your net worth is concerned.

 

The higher your net worth, the better off you are doing financially.  You can purchase Managing & Improving Your Credit & Finances for this Millennium and learn about ways that you can attack your net worth before and after you retire in ways you may have never imagined.

 

You can go to Kiplinger.com, right now to see where you now stand as far as your net worth is concerned.  Be sure you have accurate numbers as it relates to your assets and liabilities.

 

By doing so you can put yourself in better position to achieve the goals that you desire to attain during your lifetime.

 

2)      Know how to manage your credit effectively throughout your lifetime

It is important that you skillfully manage your credit affairs and you don’t let creditor’s skillfully manage you where you operate from a disadvantage.

 

Why should you operate from a vantage point of disadvantage when you can have creditor’s operate from a point of disadvantage—if you gain and utilize the right knowledge.

 

By mastering what it takes to manage your credit effectively throughout your lifetime you put yourself in position to achieve at an optimal level throughout your lifetime and at the same time put yourself in position to use credit wisely or in a manner where you come out ahead!

 

3)      Know all areas of your finances that you must address—and then address those areas appropriately

By knowing and understanding your personal financial statements, knowing how to skillfully manage your credit and having a real understanding of where you want to take your future you are now ready to look at your finances in a comprehensive manner and make moves based on that analysis that will help further increase your net worth as you build wealth.

 

By knowing all areas of your finances that you must address and acting in a positive way on that knowledge you can put yourself in position to attain many of the goals that you may have thought about—but never thought you would achieve during your lifetime.

 

At this stage you would put together written plans that would lead you toward reaching your goals in a realistic manner.

 

Conclusion:

 

By using financial statements to your advantage by reviewing your current cash flow and making improvements where needed, cutting your expenses and getting more income (if you need to do so) you are getting on a real path toward increasing your net worth.

 

However, you can’t stop there!

 

You must know what you own (your assets) and what you owe (your liabilities) so that you can readily determine your net worth.

 

Your goal on an annual basis is to always increase your net worth!

 

In reality, there may be setbacks along the way and that is why you must also properly establish an emergency fund if you have not already done so.

 

In addition,  you must manage your credit optimally and not let your credit manage you (pull you in directions that are not of “your” choosing).  You must further look at ways that you can manage your insurance, investments, taxes, education funding, estate planning/wills and retirement planning in a way that will take you toward your goals in a more effective and efficient manner.

 

It is in your best short and long term interest to know your net worth at the earliest stage possible and to make plans to improve your net worth at the earliest time possible.

 

It is your responsibility to know where you stand financially and it is your responsibility to put in place a plan that will reduce or eliminate your debt so that you can start on a serious journey to building wealth and increasing your net worth.

 

Your sincere approach to eliminating debt, increasing your income and building wealth in a manner that truly serves your best interest is a major factor in helping you get on a fast track path to making life more enjoyable for you, your loved ones—and others as you navigate through life on planet earth.

 

Always remember that the more focused you are toward improving your net worththe more mental energy you can pull up from inside your mind  that can take you toward your goals more efficiently.

 

Be sure to put your goals in writing to help clarify your intent so that you can focus your resources (financial and non-financial) on things that really matter in your life.  By doing so you will increase your net worth and build your wealth more efficiently over the coming years.

 

All the best to your new net worth success…

 

Calculate your net worth now at Kiplinger.com net worth page…

Learn how to invest in a wiser manner so that you can get the returns that you desire…

Learn why your “Self Worth” is far more important than your “Net Worth” as you build wealth…

 

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aGES, sTAGES & wEALTH bUILDING

Ages, Stages & Wealth Building

 

Learn how you can achieve financial success regardless of your age or where you now are at in your life stage…

 

Although TheWealthIncreaser.com started this topic and realized after entering the title that it was done so with the CAPS LOCK on, it was decided in humorous fashion to go along with the topic as entered.  Even so it is important that you realize that managing your finances at the various stages in your life is no laughing manner.  It is imperative that you realize that the sooner you get started on your wealth building and money management efforts–the more you can achieve at the various stages throughout your life.

 

It is important that you have an effective system that allows you to manage your finances regardless of your age or where you are now at in your life stage. 

 

Over the years many visitors have asked, why don’t you create a book aimed at helping kids understand personal finance better?  Why don’t you create a book addressed to senior citizens?

 

My answer then, as well as now is that the systems already presented provides just that—as kids and those who are elderly are equipped to learn the systems and approaches on this site and our companion sites in the same manner as others–although they may have to elevate their level of thinking some or look at their finances in a new or better way.

 

Kids, the elderly and all those in between alike possess the potential inside to elevate their mind to a higher level and achieve the type of success that will put them on a path toward reaching the goals that they truly desire or need to attain.

 

In this discussion TheWealthIncreaser.com will discuss ways that those who are young and just gaining a knowledge of personal finance as well as the elderly and all of those in between—can learn highly effective ways to better manage their finances in the current economic climate.

 

In many cases, consumers approach their finances in the wrong manner, regardless of age.

 

Whether you are young and new to personal finance and wealth building, middle aged or you are elderly and have been managing your finances for years—effective and results oriented success seems to elude far too many.

 

Regardless of your money management personality and age or where you are in your life stage—you can grasp the material on this site and achieve success at a very high level and you must have the mindset and belief that you can do so.

 

As far as your teen years go (which we recommend you start your wealth building efforts at) you can put yourself in position to make the right decisions as you start working and making income.  You can decide now that you want to have a money management system that you can use effectively once you get into the job market that allows you to reach your goals more efficiently.

 

If you are in your 20’s or a college graduate you too must put yourself in position where you will make the right decisions on a consistent basis as it relates to your wealth building and future success in all areas of your life!

 

Regardless of your age or your life stage you must have an empowering overview of what you can do to make your dreams come true.  You must understand the following four life stages so that you can see your future in clear terms and achieve more during your lifetime.

 

Stage 1

Formative Years Ages: birth to early 20’s

This is a time for those who may not have a clue about finances and how to effectively comprehend personal finance get a real jump by getting out in front of their finances in a proactive manner.  During this stage it is your parents, your inner drive to learn from various sources,  your school district, the effort of others and the larger society all help to get you on a positive path to understanding at  least the basics of personal finance and effective money management.

 

Stage 2

Growth Years Ages: 20 plus to mid 40’s or early 50’s

This is a time that you are working and attempting to strive to reach the goals that you set and at the same time possibly start a family.  This is the stage that you must begin to show real responsibility (even if you did not do so during your formative years) as you must at this stage get an effective and highly beneficial understanding of how credit and finance really works and how you can use that understanding to better serve your interests and that of your family’s.

 

Stage 3

Conservation/Protection Years Ages:  late 30’s to 40’s up until you retire or scale back on working

Once you have accumulated assets such as cd’s, stocks, bonds, retirement accounts, insurance policies, personal residence and vehicles etcetera–you must conserve and protect them and not go backward.  If you get this stage right you can put yourself in a highly favorable position as you navigate the next stage.

 

Stage 4

Gifting Distribution Years Ages:  40 plus, particularly if you have planned right early in your life

You at this stage can truly be a blessing to others as you may have accumulated more than you can utilize during your lifetime.  At this stage you would see your finances outlasting your remaining years on earth.  You could possibly pay for your grandkids education, travel more extravagantly, and help others achieve success in a manner where your living standard would not be diminished.  You would be in position to leave a legacy for your heirs and enjoy your years on earth in a style and manner that you desire.

 

 Analysis that you must do at one or all of the above stages:

 

1) Determine where you now stand financially

2) Determine if you have an effective credit management system that you can use at the time of your choosing

3) Determine if you have a comprehensive understanding of your finances and how to make improvements where needed

 

By doing the above analysis in a “sincere manner” at any stage you can put yourself and your family in a winning position where the success–and goals that you desire will be the ultimate outcome.

 

Conclusion

The creator of TheWealthIncreaser.com has seen many visitors to this and our other sites achieve major success by committing their mind to learn and apply the various systems and approaches that can be found on this site, our other sites and by utilizing books and e-books–and you can do the same.

 

Keep in mind that depending on where you are financially and what stage you are in your life you can make the decision to utilize what you feel will work for you to work toward making your dreams come true and achieve at a higher level throughout your lifetime.

 

It is important that you understand that the  3 steps that you can or have the opportunity to take at the above stage or stagescan put you far ahead of those who procrastinate and those in the general population in general (no pun intended) who fail to address their finances appropriately due to various reasons–mainly excuses.

 

Always realize that ages and stages overlap and/or you can be in more than one stage at the same time!

 

Regardless of your age or where you now are at in your life stage it is the desire of TheWealthIncreaser.com that your heart will rage and lead you toward turning a page that will lead to your success that will put you in a new cage (where you really want to take your life) as you utilize a new gauge (a new way to look at your personal finances and life).

 

Your determination and commitment to attack your finances and your determination to learn how to manage your finances more effectively at an early age will serve as the catalyst for you to achieve more throughout your lifetime.

 

For those who start late for varying reasons, you too can achieve success if you remain focused and you put in place a realistic plan that can take you to where you need to be.

 

In closing, regardless of your age you must realize that effective financial management must start within you and it is up to you at this time to decide what age you will start—and what stage you will strive to reach the goals that you desire in a manner where the success that you achieve will never diminish.

 

You must have the mindset that you are responsible for what happens in your financial life–even though you may be around others on a daily basis who are irresponsible in their financial life.  You must realize that if you “really” want to reach your financial and life goals–you must know deep inside that you “can” do it.

 

Your financial education at the various ages and stages during your lifetime is key and critical for your continuous success during your lifetime and even after you transition.

 

The earlier in your life stage that you realize this–the better for your long-term success.  However, you can achieve success at any stage if you make a real commitment to do so.

 

Be sure to focus on your strength, work on your weaknesses, put yourself out there and make a real commitment to achieve more throughout your lifetime.

 

All the best to your wealth building success as we all mature at different ages and different life stages…

 

Learn whether you have the “mental fortitude” that is needed to achieve success on a daily basis by going to this helpful page…

 

 

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Timing & Wealth Building in the Current Economy

Learn why the effective use of your time is critical for your long-term wealth building success…

 

It is important that you take a sincere look at how you manage your time as it relates to your finances and all areas of your life.

 

It is also important that you realize that the time aspect of wealth building can be looked at from a number of different angles.  In this discussion TheWealthIncreaser.com will look at a few ways that you can use time to build wealth more efficiently in the current economy.

 

You cannot waste time daily by not knowing where you stand financially, not understanding how credit affects your overall finances and not having a comprehensive overview of how to manage your finances effectively in all areas!

 

It is the desire of TheWealthIncreaser.com that this discussion will show you the importance of time management and further direct you toward ways that you can actually use the management of your time to achieve more throughout your lifetime in ways you may have never imagined.

 

Over the years TheWealthIncreaser.com has seen many who managed their time effectively and also those who did not manage their time effectively.

 

By managing your time in as effective a manner as possible you can put yourself and your family in position to achieve much more (including goals that you may now feel are impossible to attain) in a more efficient manner.

 

In the following paragraphs you will learn 3 highly effective ways that will allow you to make better use of your time and achieve more throughout your lifetime.

 

1)   Manage Your Time Better By Knowing Your Current Financial Condition

If you are at this time serious about the management of your time as you build wealth you must know your current financial condition or your current financial strength (or weakness).

 

Do you have adequate income at this time that will allow you to achieve your future goals or do you need to get more income and/or cut expenses?

 

By creating a budget or cash flow statement you can put yourself in position to know what you can do on a monthly basis in “concrete terms” and know what you will have left (discretionary income) to pursue other areas of concern that you may have financially.

 

Even though it will take time to create and analyze a cash flow statement, you will save far more time in the long run because a budget or cash flow statement will help give you the direction that you can (or need to) go in a much clearer manner.

 

2)   Manage Your Time Better by Managing Your Credit Optimally

Once you know where you stand financially you must put together a plan to eliminate your debt and particularly your credit card debt (if you have any) to a manageable level or to a level where you are in control—and not keep your balance(s) at a level where creditors control you!

 

You must also learn how to master the 5 credit factors so that you can control your credit throughout your lifetime.

 

Even though it may take mental energy and time to learn and effectively apply your mastery of the credit factors—you will put yourself in position to manage your credit throughout your lifetime in a manner that will get you real results in a time-efficient manner and in a manner that can put you on a track to attaining the goals that you desire or need to attain throughout your lifetime and even after you transition.

 

3)   Manage Your Time Better by Having a Comprehensive Overview of Your Overall Finances

By knowing your current financial condition and having mastery over your credit you are now ready to analyze and approach your finances from all angles!

 

You are ready to look at your insurance, investments, taxes, emergency fund, education planning, estate planning/wills and retirement planning in a more confident manner.

 

You are ready to use your time effectively because you know the importance of living your life in a manner where you don’t leave doing what needs to be done for others to do.

 

You are now seeing your future more vividly and with more focus because you know that you can achieve the goals that you desire if you stick to the plan that you  (or your financial planner) create based on the analysis of your unique financial position that you spent the time to analyze.

 

At this time you know that achieving financial freedom is your mission and you have no intention on stopping until it is done, or you are in a much better financial position!

 

Conclusion

 

The effective management of your time may initially seem very difficult to you and that is not uncommon.

 

However, once you start applying what you have learned in this discussion on a consistent basis your understanding and application of the process will be made easier and you will eventually save much more time in comparison to the effort that you expend upfront when you look back upon your life!

 

Even though financial mishaps and correcting mistakes due to carelessness and not knowing what might (or is happening) will occur during your life, they will be reduced, eliminated or made less relevant in your life because you will have an effective system that you carry within your mind throughout your life that allows you to achieve more in less time.

 

Even though you may have to exert more mental energy than you or your peers are accustomed to on the front end—you will ultimately get to a point where managing your finances and your time becomes second nature to you—if you are sincere in making your dreams come true.

 

You will become very efficient in managing your finances and you will achieve more throughout your lifetime and it will be due in large part to the commitment that you made at this time to build your wealth in a more engaging way as far as exerting more mental energy on the front end in a real effort to achieve or reach your goal(s) in a timelier manner!

 

Also, if you are like most visitors to this site, you will want to know the time frame in which you will reach your goals—the answer will vary from person to person and your objective(s) or where you want to go financially.  Your goals and objectives will differ from others as everyone has a unique financial position and goals that differ in all cases.

 

Let something original work its truth in your life.  Equip your mind for lasting success, do good work that will lead you on a real path toward reaching your goals and use a comprehensive approach to manage your finances that will force you to make better use of your time on a consistent basis!

 

In this discussion you have learned that the time to start effectively managing your finances is now, the process of achieving your goals will take time and the reaching of your ultimate goals will vary from person to person and family to family and the time factor will be unknown in many cases unless you put in place a written plan based on your unique financial position that will effectively guide you to your destination—if you are willing to follow that written plan in a sincere manner.

 

By doing so you are equipping yourself for the continuous financial success that you desire and deserve in the current financial and political environment—or any environment—now or in your future.

 

Your knowledge alone of this discussion is not enough—action toward reaching YOUR GOALS is what really counts at this time.

 

Those who truly desire success prepare for the consequences or outcomes that they desire in a proactive manner and also have a plan if the outcomes differ from what they desired.  They always respond positively to adversity and have an action-oriented mindset!

 

Transforming your finances from where they are at this time to where you need (or desire) them to be is normally a process (time is involved) and not an event (I can do it today and I am through) and it is imperative that you prepare your mind for the journey at this time with realistic timelines as the blueprint within your mind and a written plan that will provide you the needed direction!

 

All the best toward your timely wealth building success…

 

More on how you can use the time factor to achieve more throughout your lifetime:

 

How to Use Your Knowledge of the “Types of Income” to Save Time

How to Use “Compounding” to Achieve More Over Time

Learn Why “The Time Length” of Your Credit Accounts Are so Important

Timing & Wealth Building

Timing & Personal Finance

Responsibility & Personal Finance

Financially Alert Mind & Personal Finance

Financially Alert Mind & Financial Success

The 3 Step Structured Approach to Managing Your Finances

 

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Retirement Cautions & Wealth Building

 

Learn what you need to know as you approach your retirement years and the taxation of your income that can prevent you from making the wrong moves…

 

Did you know that there are a number of concerns that you should have as you approach retirement age?

 

Hopefully you have managed your credit and finances effectively prior to your retirement years and you are in position now (if you are currently retired) to take advantage in ways that will better serve your retirement years.

 

Whether you are or are not retired be sure to focus in on what can help you achieve more at this time and throughout your lifetime.  By doing so you will put yourself far ahead of those who enter retirement without doing the preparation that is necessary that could guide them toward a more enjoyable retirement journey.

 

In this discussion TheWealthIncreaser.com will show you ways that you can make your retirement years more enjoyable and put you on path to making the retirement that you desire have less roadblocks for you and your loved ones.

 

First and foremost you must realize that you want to address your retirement related financial activity in a manner where you will have no surprises as it relates to your taxes as many who retire often have no clue how their tax position will impact their retirement years.

 

You must be aware of how the taxation of your IRA’s and 401k’s etcetera, social security benefits, w-2 income (if you work part-time during your retirement years), investment income, self-employed income or other pass through income and earned pension income–will all affect your tax position.

 

If you don’t withhold enough income or pay estimated taxes at the right amount with your IRA’s and 401k’s etcetera, social security benefits, w-2 income (if you work part-time during your retirement years), investment income, self-employed income or other pass through income and earned pension income when you receive those income streams you could be in for an unpleasant tax surprise if you have not planned ahead and gotten at least a cursory overview of how taxes will affect your income streams during your retirement years.

 

  • IRA’s, 401k’s and other retirement plans

IRA’s, 401k’s and other retirement plans may require that you begin taking distributions at age 70 1/2 even if you have no need for the funds.  You must plan for the tax consequences of these withdrawals at the federal and state level (if applicable) and know where you will fall based on your unique tax position.

 

  • Social Security benefits

Your social security benefits may or may not be taxable depending on your unique tax position.  However, there is the potential that your taxes could be 85% on your social security income.  You can elect to receive your social security at various times after you turn age 62 and you must determine if taking early payments or waiting is the best move for you and your family from a tax point of view based on your overall finances and future plans.

 

  • W-2 income

If you work part-time during your retirement years you may find that it will affect the taxation of your IRA’s and other retirement accounts, social security income, investment income and your pension income.

 

  • Investment Income

Your investment income will also be taxed during your retirement years and you must know the rate that you will pay during your (and your spouse if married) retirement years based on your annual income and filing status.  There are various thresholds and depending where you fall in those thresholds you could pay 0% up to 20% depending on the type of investment, your income and your filing status.

 

  • Self-employed income and/or other pass through income

If you decide to work for yourself or you receive pass through income from a partnership or S corporation there will be tax consequences and they will vary based on your income from self-employment, other pass through income and all of your other sources of income and your filing status.

 

  • Earned Pension Income

If you have worked for an employer and they had a pension plan you would receive a 1099R and you would be taxed on that pension income at the Federal level in almost all cases.  The question then becomes did you have enough withholding or did you pay enough in estimated taxes to offset the taxes that you would owe.

 

At the state level you would also be taxed but the rate varies from state to state and many states offer you the opportunity to exclude certain retirement and other income from your taxes if you meet the states requirement.  In a few states there are no state income taxes at all, and if you live in one of those states that is even better.

 

Conclusion

 

It is imperative that you look at the tax consequences of the various income that you will receive during your retirement years.  It might be helpful to get professional projections of the taxes that you may owe under various situations from your CPA or other financial professional(s) so that you can know what to expect during your retirement years.

 

Did you seriously consider the tax ramifications of receiving income from IRA’s and 401k’s etcetera, social security benefits, w-2 income (if you work part-time during your retirement years), investment income, self-employed income or other pass through income and earned pension income?

 

It is important to look at this information in isolation and in combination as you plan out your retirement year’s income streams. 

 

Did you analyze and determine that you will have the income that you need to live at the level that you desire after your retirement years after the payment of taxes from your various sources of income?

 

These—and more are the types of questions that you must answer prior to retirement so that you don’t enter your retirement years with an unrealistic expectation of how you can enjoy life.

 

You must fervently pursue your retirement goals, effectively utilize this page and site, make yourself available to learn more about retirement and taxes from other sources and make the right financial moves in a proactive manner throughout your life.

 

By doing so you will put yourself in position where you won’t have to FEAR your financial or retirement future—whether it be the tax implication or any other concern.

 

All the best as you work toward your retirement success…

 

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Bountiful Harvest & Wealth Building

Learn why now is the time to plant your seed (gain a solid financial  foundation) in fertile soil so that you can have a bountiful harvest (achieve your  financial and life goals)…

 

With April roaring in and many parts of the world  “sowing the ground” in an effort to bring in a bountiful harvest in due time as the goal–TheWealthIncreaser.com thought that the topic of reaping what you sow was an appropriate topic to focus on as far as improving your finances and building wealth was concerned.

 

Just as those who plant various fruits and vegetables in fertile soil and work the land–so too must you gain a solid foundation and work toward reaching the goals that you desire or the goals that you need to attain.  You must not let unpredictable weather patterns (adversity) negatively affect your output as that should be expected if you are  sincere about reaching your goals.

 

By planting thoughts of success in your heart and mind (planting seed in fertile soil) and putting together a plan that can get you the results that you desire  you can have a bountiful harvest (reach your financial goals) if you take the right action on a consistent basis along the way.

 

You must prepare your mind for the financial success that you desire and you must have the mindset that you will reach higher.

 

• Do I have a “meaningful understanding” of personal financial statements 

 

You must create a personal cash flow statement to see where you now stand financially.  It is akin to taking a soil sample to see what you are working with as far as the fertility of the ground is concerned.

 

Are you operating in good soil (visualizing clearly how you handle your income and expenses on a monthly basis) or do you need to amend the soil so that you can have a more bountiful harvest (move closer toward reaching your goals by getting more income, cutting expenses or doing a combination of the two) by having the discretionary income on a monthly basis that you desire to make life more enjoyable and meaningful for you and your family?

 

Do I fully understand the “factors” that affect my credit scores—including the ratios?

 

By understanding the factors that affect your credit you are in effect helping to control the weather patterns (so you can sit out in the sun) as opposed to having the weather patterns control you (running you inside your house due to inclement weather).

 

You must know how a Positive payment history, how you Utilize your credit, the Time length of your credit, the Type of credit that you have and Inquiries affect your credit and ultimately your financial future.

 

• Do I know all areas of my finances that I “must” address? 

 

By planting in fertile soil you will begin to see your harvest blossom in ways you never imagined.  Also by seeing your finances in a comprehensive way–you can achieve goals that you may have never thought possible.

 

You must know that you must address your insurance, investments, taxes, emergency fund, education planning, estate planning/wills and retirement planning in as effective a manner as possible if you desire to achieve more during your lifetime.

 

Conclusion:

 

When it comes to your finances you must  know where you are now at and where you are going!  You must encourage and inspire your loved ones and others to reach higher as well.  You have the power to change the trajectory of your financial future!  Your application of what you are learning on this page and site must  be balanced with the future goals that you desire or need to achieve.

 

It is important that you realize that what you “learn, know and apply” empowers you to take more effective action as it relates to reaching your goals.  You can make your road to success easier by applying the right principles at the right time during your life.

 

You can achieve many of your financial goals that may look impossible at this time if you pause and put together an effective plan that will take you to where you need or desire to be.   Leave your baggage (weeds) that is holding you back behind—turn something old into something new and better.  Do something fresh today–respond to adversity in a strong fashion on a consistent basis. 

 

Why you must do what needs to be done now–without procrastination…

 

You can prevent the weeds from growing (avoid making mistakes) so that you won’t have to repair the soil (waste valuable time and money when you could have avoided it).

 

You must realize that you are challenged and charged (by TheWealthIncreaser.com) to do far more than you are doing at this time!

 

You must stick to it and move your PEN so you can WIN!

 

Let something original (a new rain cloud followed by unlimited sunshine) work its way into your life.  Equip your mind for lasting success by gaining the skills that are needed to reach your future goals and use a comprehensive approach to manage your finances. 

 

By doing so you are helping to ensure that you are equipped for the continuous financial success that you desire and deserve. 

 

Be sure to apply what you learn in your everyday life.  Your goal must be to be–and to do—not just know what to do and let what you know sit idly in your mind.

 

Your knowledge of the above material alone is not enough—action is what really counts.

 

By sowing your seed in a fertile environment you are helping to ensure that you do all that you need to do—and more as you move toward your financial goals.  You are helping your financial growth process and at the same time ensuring that a bountiful harvest is in your and your family’s future.  

 

You are on a real path to reaping what you sow because you have taken the time to gain the preparation and knowledge that can make your future glow–and more importantly put you in the know–as far as putting you on a path to obtaining financial results that will show!

 

You are on a path toward attaining a Financially Alert Mind (as opposed to just Financial Literacy) that will allow you to weather the elements as you reach toward your goals throughout your lifetime.

 

Always remember that you will be known not only for the impact that you have in your own life but also the impact that you have on others.  By making a serious commitment today you can have a positive impact on others and also reach the goals that you desire as well!

 

It is the desire of TheWealthIncreaser.com that you are now in better position to Sow the Financial Future that You Desire and receive a Bountiful Harvest…

 

Now is the time to plant what you desire in fertile soil so that you can have a bountiful harvest…

 

All the best to your future success…

 

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Managing Your Finances & Wealth Building

Learn how you can “Manage Your Finances & Build Your Wealth” in an intelligent, consistent & proactive manner so that you can achieve more throughout your lifetime…

 

In the current economy it is very important that you have a systematic approach to the management of your finances.  Whether you are a millennial, gen x, gen y or baby boomer effective management of your finances must be a part of your mindset if you desire to achieve more from this point forward.

 

In this discussion TheWealthIncreaser.com will look at highly effective ways that you can use to move forward in an efficient manner as you manage your finances and build wealth.

 

Those who manage their finances at an optimal level always seem to have a system that allows them to live within their means and save at a level that allows them to get ahead financially.

 

You must know how to analyze your cash flow and know what you will have left on a monthly basis after you pay your rent or mortgage, health care, cell phone bills, cable TV and other costs that you have on a monthly basis that allows you to live at the level that you desire.

 

Although the process of analyzing your finances on a monthly basis may appear daunting–you can do so and also save for your future if you have the right approach and you are committed to putting that approach into action on a consistent basis.

 

By knowing where your money goes on a monthly basis you will feel more in control of your finances and your future!  Why stress about what you can do in the future when you have the ability to take control of your finances and achieve more during your lifetime?

 

You must have an understanding of your fixed and variable expenses on a monthly basis so that you will know your “discretionary income” that is available that will allow you to do other things.

 

You must then look at ways that you can reduce or eliminate the fixed and variable expenses that you can avoid, are not comfortable with or are a drag on your monthly finances.

 

3 Steps that Will Allow You to Control Your Finances & Financial Future

 

  • You must budget and plan for your future

 

It is very important that you create a budget or monthly cash flow statement in order to determine where you are financially.  That will allow you to plan your financial future more effectively.

 

You will put yourself in position to create a properly funded emergency fund and build your wealth more efficiently.

 

To gain even more control over your financial future you need to eventually create a personal income statement and balance sheet so that you will know your net worth.

 

  • You must effectively manage your credit

 

Whether you are new to credit or you have been managing your credit for years it is imperative that you “understand credit” and you have an effective system that allows you to manage your credit.

 

You don’t want to put yourself in position where there is confusion (within your mind) or other distractions as it relates to the management of your credit.

 

  • You must know all areas of your finances that you must address and then you must put a plan in place to address those areas

 

It is your responsibility to know all areas of finance that you must address during your lifetime.  Another way of stating that is you must have a “comprehensive approach” in the management of your finances if you desire to achieve at an optimal level.

 

You must know “immediately” and at “all times”  that you have to address your insurance needs, your investment goals, your tax situation, your emergency fund, your education planning, your estate planning/wills and your retirement planning.  By doing so you add “clarity of thought” to your life and your future will take on a new (and brighter) meaning.

 

Conclusion

 

You must have an approach to your financial future that “sticks to your mind” and allows you the ability to manage your financial future with clarity.  You must have strategies that you can carry within your mind and that you can apply at the time of “your” choosing.

 

By gaining a real understanding of the 3 steps mentioned above and applying them on a consistent basis throughout your lifetime you will help insure a more prosperous future for yourself and your family.

 

You will put yourself in position to set real concrete goals that you can see clearly” rather than “generalize your future” and move toward your goals with an unclear focus.

 

Keep in mind that you can do the above steps at a pace that you are comfortable with, however they must be done–if your desire to achieve more financially during your lifetime.

 

What do you value?  Determine what you value most and make it a priority in your life at this time.   Make the decision not to procrastinate at this time!

 

Will there be setbacks as you move toward your financial goals?  Absolutely, however by applying what you have just learned on a consistent basis you will put yourself in position to rebound from those setbacks and achieve the type of success that you desire throughout your lifetime.

 

Be sure to use automatic savings tools  where appropriate and maximize your retirement savings in a manner that will allow you to reach your retirement number and live the lifestyle that you desire during your retirement years.

 

All the best as you apply the “3 steps” toward your success…

 

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Other Helpful Budgeting & Finance Sites:

 

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The New Tax Law & Wealth Building

Understanding the New Tax Law & Wealth Building

 

Learn how you can use the recent United States tax cuts and job act law changes to maximize your 2018 and future tax filings…

 

With the new tax bill out and anxiety in the air among many taxpayers the creator of TheWealthIncreaser.com had no choice but to review the new tax bill to help alleviate the fears of many and help those who desire greater success build wealth more efficiently in the coming years.

 

Even the creator of TheWealthIncreaser.com found navigating the bill of several hundred pages to be boring and cumbersome—however key aspects that could possibly benefit you and others were focused on and analyzed.

 

In the following paragraphs highlights of the bill will be analyzed and presented in a manner that could possibly help you build wealth in 2018 and beyond in a more efficient manner.

 

Even though the new tax law will reduce the taxes for millions, that does not mean that you will be included among the millions as personal taxes are unique and vary from person to person and family to family.

 

The good and bad news is that tax rates were lowered across the board but are scheduled to expire in 2025 unless congress decides to make them permanent.

 

To keep this discussion logical and concise the order of presentation will try to keep the format of the 1040 long format as the blueprint or guideline for discussion.

 

Personal Exemptions Are Now Gone

 

You can no longer claim your children or other dependents and get a personal exemption for them—or yourself and your spouse if married.

 

Those exemptions that you have become accustomed to getting have been replaced with higher standard deductions, lower tax rates, increased child tax credits, and a dependency credit for other dependents of $500.

 

Whether the new tax changes will be of more benefit to you depends on the age of your dependents, your income level, your family size, your above the line (page 1 of form 1040) and below the line deductions (page 2 of form 1040) ,  your tax withholdings and many other factors that may be unique to you and your family.

 

Standard Deductions Are Increased Substantially

 

Standard Deductions are now $12,000 for single up from $6,350, $18,000 for head of household up from $9,350 and $24,000 for  married filing jointly up from $12,700.

 

Be aware that claiming the higher federal standard deduction may not be a wise move in some cases.   It depends on a number of factors, including the amount of your itemized deductions and your state income tax filing standard deduction (if applicable)–among other factors.

 

Child Tax Credit Increases

 

The child tax credit increased from $1,000 to $2,000 so if you have a child under age 17 you would more than likely be eligible for the credit.  The income limits for phaseouts also increased as you can now earn up to $400,000 (AGI–line 37 of form 1040) and still take the credit (up from $110,000 in 2017).  In addition, $1,400 of the credit is refundable meaning even if you owe no taxes you are entitled to the refund.

 

To claim the credit your child dependent must live with you at least half a year and you must provide over half the cost of support for the child in order for you to claim the child tax credit—similar to when exemptions were claimed in past years.

 

The EIC or Earned Income Credit remains as well—meaning those with modest income and a family of 4 with kids under 17 could see a possible increase in the amount of the refund they will receive on their 2018 tax filing.

 

Those over age 17 whom you provide support such as college students, parents and others will provide you the opportunity to claim a $500 tax credit in the filing of your taxes if they meet the guidelines for dependents under the tax law.

 

The Marriage Penalty is Finally Eliminated or at Least Made Less Relevant for Most

 

Under the new law the tax bracket for married couples are almost double that of a single person in most instances.  If you have been avoiding matrimony due to the tax code or financial concerns—you can now breathe easier.

 

If you make $500,000 or more (which is a good problem to have) the marriage penalty again starts to rear its ugly head—If you make over $500,000 and plan on getting married soon—consult your tax professional before making the hitch as there may be ways that you can reduce the tax bite.

 

Alimony is also affected by the new tax law as you can no longer deduct alimony if you pay alimony and you don’t have to include alimony as income if you receive alimony (must be after December 31, 2018 otherwise old rules apply).

 

Education Deductions Remain in Place

 

Although TheWealthIncreaser.com did not initially take the news of eliminating the student loan interest deduction seriously—due in large part to the number of student loans outstanding and the hardship that the payments continue to cause for many—there were serious efforts to eliminate this helpful above the line deduction.

 

Fortunately, those in congress used their better judgment and the deduction for up to $2,500 worth of interest on student loans remain!

 

Tuition waivers and discounts by graduate students also remain tax-free.

 

The AOTC or American Opportunity Tax Credit worth up to $2,500 per undergraduate student (MAGI of $80,000 single and $160,000 married) survived the new tax bill.

 

The Lifelong Learning Credit also survived the new tax bill and it is worth up to $2,000, or 20 percent of the first $10,000 spent in a year (MAGI of $56,000 single and $112,000 married).

 

The $2,000 limit is per household with the Lifelong Learning Credit but the American Opportunity Tax Credit applies per student and could be more valuable to you if you have several kids in college.  Your overall credit would be higher, thus your tax bill would be lower or your tax refund would be higher!

 

529 college savings plans are now eligible to be used for k through 12 grades at private or parochial schools—in addition to colleges and universities.

 

Coverdell accounts remain although it appears they will be phased out and the cap remains at $2,000 annually, however you can now roll them over into a 529 plan tax free.

 

Always keep in mind the fact that many states also sweeten the pot—as you can deduct 529 contributions in many states.  And with the limits on property taxes (discussed later) that could be significant for those affected by the limitations.

 

ABLE accounts now are available for setup for a disabled beneficiary and can be legally rolled over from a 529 plan.  The benefit of doing so includes the tax-free use of funds for a variety of purposes—not just college, private or parochial school.

 

Assets up to $100,000 don’t count toward the $2,000 limit for SSI benefits.  Contribution limits are capped at $15,000 in 2018 and your rollover from the 529 plan would count toward that cap if you were to roll over a 529 plan into an ABLE account.

 

Educator expenses continue to be deductible (up to $250) by teachers who come “out of pocket” to purchase classroom material and supplies.

 

Most Retirement Plans Are Not Affected by the New Law

 

With the new tax law a change in your withhholdings may occur.  If you are in a strong financial position consider using the additional amount that you may see on your check to save more for retirement to help lower your taxable income and build wealth more efficiently.

 

IRA to a ROTH  conversions also see limits.  In the past you could undo the conversion and avoid the tax bite by re-characterizing the conversion by October 15 of the following year.   Now once you convert, it is permanent as far as the tax bite is concerned.

 

However, if you feel that a conversion is more beneficial for you and your family and you have the funds to handle the tax bite that could still be an effective strategy.  In addition, you could convert yearly a certain amount to lessen the tax sting.

 

Real Estate Takes a Hit with the New Law

 

Many residents of high cost cities where housing costs are high are crying foul over a number of provisions in the new tax.  The new law limits how much mortgage interest you can deduct.  The limit is now $750,000 (primary and vacation homes) down from 1 million.

 

Home Equity debt (home equity loan and home equity line of credit) interest is no longer deductible unless the money from the loan is used to improve your home.

 

Property tax deductions on your schedule A are capped!  The new law limits the amount that you can deduct in state income and property taxes at $10,000.

 

Like Kind Exchanges under Section 1031 of the Internal Revenue Code are now limited.  Like-kind exchanges of Real Property survived the new tax bill, however like-kind exchanges no longer apply to any other property–including personal property associated with real property.

 

Capital Gain Tax Rates are Preserved

 

Capital gain rates remain the same but the calculation formula now differs from using the tax brackets as in the past to using income thresholds.

 

If your income is less than $38,600 single or $77,200 joint you are at the 0% rate based on your income threshold.

 

If your income is between $38,600 to $425,800 single or $77,200  to $479,000 joint you are at the 15% rate based on your income threshold.

 

If you are in the ideal position of having even higher income your capital gains rate would be 20%.

 

The above capital gain tax rates apply to long-term capital gains (assets held over a year) and if you were to sell capital assets held less than one year you would pay tax at your ordinary income rate.

 

The “so called” kiddie tax that you would normally pay also has a change in the way that it is calculated.

 

Charitable Giving May Take a Hit Due to the Higher Standard Deduction Amounts

 

Charitable organizations were not pleased by the changes in the new tax law.  Even though charitable deductions are still deductible on the 1040 long form the likelihood of many using the long form has decreased due to the elimination of personal exemptions and the increase in the standard deduction.

 

Although many give generously out of the goodness of their heart, they still enjoyed the knowledge and annual application of a tax break.    That tax break that many have been accustomed to utilizing for years will be eliminated for some taxpayers due to the increased standard deduction which effectively wipes away their ability to itemize and claim their charitable giving.

 

Self-Employed & Those Who Have Pass Through Income Will See a Benefit

 

If you are self-employed or make additional income from a side job you could possibly benefit significantly from the new tax bill.  Many self-employed businesses will be allowed to deduct 20% of “qualifying” income from their taxable income.  Even so, there may be limitations depending on your business type and income thresholds.

 

Qualifying income is what the new law states that it is and can be a gray area, so consult your tax professional.

 

Entertainment expenses will no longer be deductible,  however meals will continue to be deductible (50% limit).

 

Medical Deductions Ceiling Reduced From 10% to 7.5%

 

At least for 2017 and 2018 you can deduct medical expenses on schedule A and have a 7.5% floor as opposed to 10% under the old rules.  The lower the floor the better–as it allows you to deduct more medical expenses on your schedule A.

 

The ceiling returns to 10% in 2019 so don’t get too excited.  Hopefully congress will make the 7.5% floor permanent or at least extend the deadline as baby boomers will find a real benefit as they age and get out of the employment population and experience increased medical expenses.

 

2% Miscellaneous Deduction Including Unreimbursed Employee Expenses Take a Major Hit

 

Moving expenses have been eliminated unless you  are an “active” member of the U.S. armed forces.  Tax preparation, unreimbursed employee expenses (mileage, travel, home office expenses etc.), investment advisory fees and casualty losses other than those declared as a presidential disaster area have all been eliminated.

 

Look for shockwaves to run through certain industries where they have high “unreimbursed” expenses when they file their 2018 tax return as those who work in the affected industries will in some cases experience a substantial increase in their tax bill.

 

Corporations & Pass Through Entities Receive the Majority of Windfalls with New Tax Bill

 

With a major tax rate reduction to 21%–down from 35%–many corporations will receive a significant financial windfall due to the reduction in their tax rates as well as other perks offered in the new tax law.

 

Depreciation write offs and 179 deductions could possibly be of greater benefit to you if you purchase equipment that qualifies.  However, there are no guarantee that they will continue indefinitely.

 

However, for the time being many corporations will benefit–and you too may be able to benefit as well if you are proactive and not reactive in looking at ways that you can better utilize the new provisions that are now available to corporations and pass-through entities.

 

Self-employed businesses, partnerships, S-corporations and C-corporations will all see a reduction in their tax rates and it is up to you to look at ways that you can use this new rate change to your and your family’s advantage by now getting in the game or playing the game more successfully by taking beneficial steps toward your goals at this time.

 

 W-4 Table for Exemptions No Longer Apply

 

The withholding based on exemptions are a thing of the past and new tables for withholding are in the process of being created.  It is important that you have your tax professional provide you projections based on your current withhholdings and the new rates and filing status to help plan for your 2018 tax filing in a more intelligent manner.

 

AMT & Estate Tax Remain

 

The Alternative Minimum Tax remains.  However, the exemption has been increased to $500,000 for single taxpayers and $1 million for couples.  This change is expected to result in fewer taxpayers being hit by the AMT tax.

 

The new tax law doubles the estate tax exemption to $11.2 million for single filers and $22.4 million for joint filers. This change will only affect a small percentage of the American population  as effective estate planning and the increased exemption will leave a very small percentage of taxpayers paying this tax.

 

Affordable Care Act Individual Mandate Gone

 

In 2019 the tax (individual health mandate penalty tax) that was imposed for healthcare under the Affordable Care Act (often called, “Obamacare”) will be eliminated.

 

Conclusion

 

Be sure you understand the difference between a tax credit and a tax deduction as a credit is a dollar-for-dollar reduction and a deduction is based on your tax rate or a percentage of your taxable income.

 

Even though the new tax bill appears to overwhelmingly benefit corporations and those who are well established financially–you too can benefit!   Be aware that much of the new tax bill was unfunded and will pass the cost on to others in an “irresponsible” way.

 

However, you can benefit now and in the future if you take the right steps to make the law work better for you and your family.

 

The new law provides the opportunity for those who are astute and who are willing to pause and take effective steps to use the new law to their advantage by asking and answering the right questions the ability to achieve at a higher level in the coming years.

 

How can “I” more effectively benefit from the various changes in the law during the various phases in my life?

 

How can I manage my finances at this time so that I can put myself in position to take advantage of the various changes in the law?

 

What can I do to avoid changes in the law that will negatively affect me?

 

These (and more) are the types of questions that you must ask yourself—and answer appropriately if you are one who desire to take advantage of the new changes in the tax law as opposed to having the new changes in the tax law take advantage of you!

 

It is the desire of TheWealthIncreaser.com that this discussion has at least got you started on a path to doing what you need to do to make the new tax law work better for you.

 

All the best as you pursue tax success…

 

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Financial Security & Wealth Building

Learn why planning, discipline and patience is critical for your financial success…

 

After recently returning from Las Vegas, Nevada and having a great time, the creator of TheWealthIncreaser.com thought that the topic of not gambling on your future was a timely topic.  Although investing in the financial markets are somewhat of a gamble, it is important that you plan for long-term success or any success in an appropriate manner.

 

In this discussion TheWealthIncreaser.com will discuss why planning for your future, having the required discipline–and patience are the cornerstone for you to attain financial success in your future.

 

You Must Plan for Success

 

You must plan for your future and that includes knowing where you now stand as far as your finances are concerned.  A monthly cash flow statement will put you in position to know just that.  In addition,  you must know how your credit score is calculated whether it is your  FICO score by Fair Isaac & Company or your Vantagescore by the 3 credit bureaus.

 

Your financial success also depends on you obtaining the financial knowledge and preparation that is needed on the front end–not “after” you encounter financial difficulty.  It is imperative that you obtain a financially alert mind and not just “financial literacy” at this time if you desire to achieve at your highest levels throughout your lifetime.

 

You Must Have a Disciplined Approach Toward the Success that You Desire

 

You must understand that it is your responsibility to do what needs to be done financially throughout your lifetime.

 

By consistently doing what you need to do you will achieve your goals more efficiently and you will be rewarded for your discipline in the future by having your investments grow and also be able to enjoy life on your terms along the way.  You can reach your “retirement number” and achieve other goals along the way as long as you remain focused and disciplined on a consistent basis.

 

Above All You Must Have Patience

 

It is important that you realize that many of your goals will not occur overnight as they will often take time to reach.  This is where your patience will come in as you must use the planning stage to determine the time frame on when your various goals will be reached.  Whether you have short-term, intermediate or long-term goals, you must prepare your mind mentally for the time period that it will take to reach your various goals.

 

You must not do like others who give up to soon, or lack the mental fortitude to stick it out and make their dreams come true.  By having patience and knowing inside that you will truly reach your goals if you stick to your written plan–you bring comfort, peace of mind and joy–inside of your heart and mind.

 

Conclusion

 

By planning for your future, showing discipline on a consistent basis and having the needed patience to reach your various goals you put yourself in a much better position for reaching the success that you desire or the success that you need to attain throughout your lifetime.  You are displaying a serious commitment to improve the living conditions for yourself and your family and you are showing that you are accountable for your future.

 

In short, you are approaching your future with the attitude of a winner and joy will be in your heart in an everlasting way as you will see success in all that you do.  Will there be setbacks? Absolutely!  However, by taking initiative at this time by planning for your future, showing discipline on a consistent basis and having the needed patience to reach your various goals–success lies in the horizon.

 

By doing so you are gravitating toward the goals that you see as opposed to remaining where you are, moving slowly toward your goals or worse of all–moving away from what you desire.

 

In the end (and beginning) you must realize that achieving financial security and effectively building wealth in large part depends on your current and future mindset being in the place where success lives.

 

All the best as you plan for success in a disciplined and highly effective way as you now have the ability to change your mindset (and future) in a highly beneficial way…

 

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