Creating a Will & Wealth Building

Learn why it is imperative that you create or update your will so that you can achieve your goals after you transition…

 

In today’s economy it is more important than ever that you create a will and/or have an estate plan in place.

 

In this discussion TheWealthIncreaser.com will discuss the importance of why creating a plan that considers what happens to your assets after you transition is a vital step for you to take at the earliest time possible in your life stage.

 

Even if you currently have an estate plan or will in place, you want to review and possibly update at this time due to not only recent changes in your family situation, but also recent changes in the tax law and increased exemption and gift tax amounts.

 

 

 

 

If you have recently married or divorced, have children that have now aged or you have a change in outlook on who you would like to leave your assets to, now is the time to review and possibly make the needed changes.

 

Your estate may face taxation at the federal and state level, and it is important that you realize that your estate consists of:

 

 

 

 

 

The amount of each of the above can be significantly more than you think, therefore it is important that you get out in front of your estate and address what needs to be addressed at this time.

 

If you have an estate valued over $1 million when the value of your house, retirement accounts and life insurance proceeds are totaled, it is important that you talk to an estate planning attorney to discuss how you can protect your assets and possibly lower your taxes for estate planning and tax purposes.

 

You may need to use creative strategies such as paying your taxes now so your heirs can avoid future taxes if it is more advantageous to do so.

 

However, you may need to talk with legal and tax professionals based on your unique financial position, to determine the best or more advantageous route for you to take as some assets that you may own may receive favorable “stepped up basis” treatment.

 

In addition to a will/trust, you may also need to create a durable power of attorney to give others the power to handle your affairs, create a healthcare proxy to serve as your healthcare advocate if you are unable to do so–and create an advance directive which outlines your wishes if you are involved in a medical emergency and are not able to speak up for yourself and handle your affairs.

 

You will want to gather certain information whether you decide to utilize an attorney or do it yourself.

 

Regardless of your choice, you will want to take the following 10 steps and gather the needed information to smooth out the process:

 

  1. name and contact information of all you plan on including in your will/trust
  2. the name of beneficiaries of all of your accounts and policies
  3. the person(s) that you would like to be executor of your estate
  4. all statements from your banks/brokerage and retirement accounts including pensions
  5. all life insurance policies
  6. all real estate including mortgages and estimated value
  7. all businesses that you have an interest in
  8. any inheritance that you are expecting
  9. any charities that you are considering to leave a bequest to
  10. any other document(s) that you feel is important

 

Always realize that the beneficiaries that you name on your accounts and policies will get the proceeds–not who you state in your will, therefore you may need to update your beneficiaries as well as create or update your will at this time.

 

If an ex-spouse or anyone else that you desire to be removed from any of your policies or accounts who are now named as beneficiary need to be removed–now may be the time to remove them and name another beneficiary(s)–if you have not done so.

 

You also want to choose trusted family members or friends who could act as executor, a healthcare proxy (you may need them to fill out a healthcare proxy form) and HIPAA form in case of a medical emergency.

 

The procedures for doing the above could vary by state so be sure you are aware of the procedures in your state.

 

Conclusion

 

 

It is important that you realize at the earliest time possible that creating or updating your will is an important step toward the building of wealth and the generating of generational wealth (pun intended) and it is very important that you get out front and seriously address this area of your personal finances.

 

Keep in mind that you can choose to complete your estate planning/wills documents online (freewill, legalzoom, nolo etcetera) or schedule a meeting(s) with an attorney–depending on the size of your estate.

 

If your net worth is $500,000 or more, you definitely want to seriously consider talking with a highly competent estate planning attorney in your state.

 

Whether you choose an attorney or a do-it-yourself format–your finalized documents must be signed by you, witnessed by two people who won’t inherit anything in the will and be notarized to make it legal and binding!

 

You will also want to keep your documents secure, therefore you want to store the original in a fireproof safe and tell your executor(s) and other trusted family members where it is and how they can access those documents.

 

You will also want to give an appropriate copy to the following designated parties:

 

  • durable power of attorney to who will handle your affairs
  • a healthcare proxy (also file with your primary physician’s office) to who you choose as your healthcare advocate if you are unable to do so and,
  • an advance directive (also file with your primary physician’s office) to who you wish to handle your affairs if you are in a medical emergency

 

Also consider giving a backup copy to someone else you trust in case the executor you choose is unavailable (out of state/country or is otherwise unable to be reached in an emergency).

 

Be sure you make key family members aware of who your executor(s) are!

 

If you choose an attorney they should keep a file at the office and it is your responsibility to make sure they do.  You also want to let the executor(s) and trusted family members know who the attorney is and provide contact information to them so that they can contact the attorney when needed.

 

If documents are stored online or in the cloud, you may want to provide that info as well and how to access the account!

 

By preparing an estate plan/will at this time you will be using good judgment and not only will your assets go where you intend that they go–you will greatly reduce the possibility of family squabbles and undue burdens and hardships that could be placed on family members and other loved ones during a high stress and grieving time period.

 

Isn’t it time that you put time aside and gather all of the necessary documents so that you can live out your remaining years on earth in a manner where joy lies at the center of your daily activities and not let anxiety and uncertainty have an undue and unnecessary influence in your life?

 

All the best to your estate planning/wills success and the passing on of your assets in a manner that will truly allow you to rest…

 

NOTE: This discussion on estate planning/wills is not intended to be legal advice and is provided so that you are aware of what is available as far as wills and estate planning is concerned.

 

Estate Planning/Wills GLOSSARY

 

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Starting a Business & Wealth Building

Learn about the types of business formations that are available when you decide to start your business…

 

If you are considering starting a business, it is important that you know the types of business formations available along with what will truly be expected of you as you endeavor on your entrepreneurial pursuits.  In this discussion TheWealthIncreaser.com will discuss the various types of business structures available and the requirements that you will be expected to meet as you pursue your entrepreneurial dreams.

 

Although the creator of TheWealthIncreaser.com has not written an article in over a month and is dusting off rust to a degree, this discussion will be presented from an angle that you can hopefully readily understand and will hopefully help ensure a more prosperous PATH toward your wealth building goals as you form your new business.

 

Keep in mind that this blog post is longer than most created by TheWealthIncreaser.com, so be sure you have at least 20 to 30 minutes set aside so that you can interpret and comprehend this discussion at your highest level–as by doing so you can put yourself and your family in better position for long-term wealth building success.

 

Sole Proprietor

A sole proprietorship is the simplest business formation and is a form of ownership where you act as the sole-owner.  You would file your business return on schedule C on your personal tax return if you found it more advantageous to do so or you wanted convenience and simplicity in filing your return.

 

In essence your net income or loss would pass through to your personal tax return from the schedule C and you would be taxed at the appropriate rate depending on where you fall in the tax brackets (can range from zero to thirty-seven percent generally speaking).

 

NOTE: For tax year 2022, the top tax rate remains 37% and all of the rates are based on your Adjusted Gross Income (AGI) and not your Gross Income:

 

Marginal Rates:

  • Tax brackets for income earned in 2022

    • 37% for incomes over $539,900 ($647,850 for married couples filing jointly)
    • 35% for incomes over $215,950 ($431,900 for married couples filing jointly)
    • 32% for incomes over $170,050 ($340,100 for married couples filing jointly)
    • 24% for incomes over $89,075 ($178,150 for married couples filing jointly)
    • 22% for incomes over $41,775 ($83,550 for married couples filing jointly)
    • 12% for incomes over $10,275 ($20,550 for married couples filing jointly)
    • 10% for incomes of $10,275 or less ($20,550 for married couples filing jointly

     

Married filing separately pay at the same rate as unmarried.  Source IRS

 

As a pass-through entity you would be eligible for the 20% exclusion of income (Qualified Business Income) that was passed in the tax cuts and jobs act of 2017.

 

You would report the income that you earn directly from your business activities on the schedule C, including income that you earn from 1099 income.  You would also pay self-employment taxes if your earnings exceeded $400.  You would pay 15.3 percent in self-employment taxes and you would be able to deduct 7.65 percent or one half of your self employment taxes on your personal tax return–thus bringing your effective self-employment tax rate down to 7.65% of your earnings from your business.  Your self employment taxes that you pay would be a part of your social security contributions.

 

The major disadvantage of a sole proprietorship is that you would have unlimited personal liability as the owner–and depending on your tax bracket and your net income possibly pay more in taxes than you would as a corporation.

 

If you desire to form a business utilizing rental properties you cannot utilize schedule E where you act as the sole-owner of actively managed real estate where you provide “substantial services” as you would have to include that income on schedule C of your 1040.  You would file your business return on schedule C on your personal tax return if you had rental properties and you offered substantial services beyond what is normal such as electric, gas, trash and the like.  If you offered breakfast and cleaning services on a regular basis you would possibly be offering substantial services and you would need to file schedule C instead of schedule E.

 

If you are considering rental activity as a business you want to be aware of what to expect on the front end.  Schedule E and Schedule C is often used to report rental income and expenses at the individual level.

 

Schedule E is also used to report income for individual partners in a partnership and for owners of S corporations. The income of the business for the year is calculated and the profits or losses are distributed to the owners in the form of a Schedule K-1.  This information on the individual owner’s income or loss is included in Part II of Schedule E.

 

However, Schedule E is not used to report rental real estate activities for partnerships and S corporations.  Instead, partnerships or S corporations would use IRS Form 8825 to report rental real estate income and expenses and the income and expenses would pass through from the form 8825 to the partners and owners.

 

In short, individually a partner or shareholder would use  schedule E Part II, however for the partnership form 1065 and form 8825 would be used and for the S corp form 1120S and form 8825 would be used to report real estate income and expenses (along with k-1s).

 

Providing substantial services and being considered a business owner also means you must pay self-employment taxes on income that is earned from the rental activity!

 

If you are running a  home-sharing business with no substantial services provided, you would use Schedule E to report your rental income and expenses.  If your home sharing type business involves substantial services (like breakfast or transportation), it would normally be taxed as a business, using a business tax form depending on your business type.

 

In many cases it can be difficult to determine the status of an individual tax situation where rental activities are involved as each individuals situation is unique.  If you are starting in a business involving residential real estate or a home sharing type of business, get advice from your tax professional, CPA or tax attorney about your tax status.

 

If you had rental property and did not offer substantial services, your net income or loss would flow from the schedule E on  your personal tax return and you would be taxed at the appropriate rate.

 

By using a schedule E or schedule C you could hold assets and deduct expenses on your personal tax return.

 

Always realize that there  are two versions of Schedule K-1: Schedule K-1 (Form 1065) for Partner’s share of income, deductions, credits, etcetera, and Schedule K-1 (Form 1120-S) for Shareholder’s share of income, deductions, credits, etcetera.  It is important that you are able to distinguish between the two versions–depending on your current business type or anticipated business type.

 

If you decided to start a farm, you could file on schedule F on your personal tax return, or you could elect to choose a business structure listed below.  In general, the same concepts as discussed above for filing a schedule C would apply to your farm income if you filed a schedule F, however there are some differences (advantages and disadvantages) that you would want to educate yourself on if you have a farm or anticipate creating one in your future and you are considering filing as a sole proprietorship or other business form.

 

In closing, sole proprietorship is the simplest structure for a one-owner business, as there are very few regulatory issues and you can exert direct control and discretion in many facets of the business.

 

As a sole-owner there’s no legal liability limits between the business’s assets, debts and other liabilities and those of the owner–therefore you would or could directly be liable for any legal or financial failures of the business (you would have unlimited personal liability as the owner).

 

Partnership

Partnerships file an information return 1065 to report their income, gains, losses, deductions, credits, etcetera.

 

If you were an employee of a partnership, you would personally pay half of the 15.3% in payroll taxes, a small FUTA tax, and personal income taxes on that salary.  Your business pays the other 7.65% in payroll taxes which can then be written off as a tax deduction by the business.  The rest of the company profits you earn could be taken as “distributions” which aren’t subject to payroll taxes.

What are distributions you ask?

 

Distributions are money that you personally take out of your business by cutting yourself a check or transferring money to your personal account.

 

Your distributions aren’t treated like self-employment income!

 

Another thing to consider is that when you have a partnership, the tax filing deadline is March 15, not April 15, and the penalties are much higher if you do not file your tax return on time.

 

When it comes to liabilities and taxes partnerships are similar to sole proprietors, mentioned above.  As a partner of a “general partnership” you would report your share of income, expenses, credits, profits and losses on your personal tax return.

 

You would pay taxes at your personal income tax rate and have exposure of the business’s liability(s) as personal liability(s).

 

Also similar to sole proprietors, as a partner you must pay a self-employment tax, where applicable, on all gains without the benefit of separately categorized distributions that could possibly go un-taxed if you were to form an LLC and you elected S corp taxation.

 

A limited partnership (LP) or limited liability partnership (LLP) may be considered depending on the industry and other specifics of your business and they would provide you protection against your personal assets.

 

If you decide to file as a partnership, it is “very important” that you create a Partnership Agreement to set out the formalities of the business.

 

A partnership can be set up as a “general partnership” or a “limited partnership” and the taxes would pass through from the 1065 and schedule k to the partners so that the income or losses could be reported on the personal tax returns of the partners so that taxation could occur based on the marginal tax rate of each partner.

 

If the partnership suffered a loss during the tax year the losses would flow to each partner based on their partnership interest.

 

In essence, the net income or loss from the partnership would pass through to your personal tax return if you decided to form a partnership (along with your  tax partner(s) tax return) and you and your partner(s) would be taxed at the appropriate rate depending on where you fall in the tax brackets (can range from zero to thirty-seven percent of your AGI, generally speaking).

 

And similar to a sole-proprietor, as a pass-through entity you would be eligible for the 20% exclusion (QBI deduction) that was passed in the tax cuts and jobs act of 2017.

 

You would report your portion of the pass-through income from your k-1 on the schedule E .  You would also pay self-employment taxes if your earnings exceeded $400 and pay 15.3 percent in self employment income tax and you would be able to deduct 7.65 percent or one half of your self-employment taxes on your personal tax return–thus bringing your effective self-employment tax rate down to 7.65% of your earnings over $400.  Your self-employment taxes would be credited toward your social security contributions.

 

Limited Liability Company

  • Forming an LLC gives legal protection to your personal assets and doesn’t affect your taxes if you file as a corporation compared with operating as an individual or independent contractor.
  • Electing S Corp taxation could reduce the amount of income you pay self-employment tax on.

 

The formation of a Limited Liability Company, or LLC, can in many cases be a great way to organize your company and protect yourself from liability.  The key question that you need to ask when considering an LLC  is how you would pay yourself if you were to choose an LLC as a form of ownership?

 

The two most common options for paying yourself are to treat yourself as an employee with wages, or to treat yourself as an LLC member and receive distribution from the profits.

 

When there are multiple owners, if all of the LLC members participate equally in the operation of the business, you can’t pay one a salary and not the others.

 

However, if you are the only member that has a management role, you can pay yourself a salary without setting up salaries for the other participating LLC members!

 

Related: (Starting a Limited Liability Company Online)

 

 

1) Paying Yourself as an Employee with Wages

Employee wages are considered operating expenses for the LLC and would be deducted from your  LLC’s profits.

 

The Internal Revenue Service (IRS) only allows reasonable wages as a deduction, so be sure any salary you pay yourself is within industry norms.

 

You can also issue bonuses to LLC members who are employees, including yourself.  Bonuses must also be reasonable and related to the salary being paid.

 

You’ll need to file IRS Form W-4 to determine the amount of payroll withholding from each paycheck you receive.

 

The LLC will pay you as a W-2 employee and will withhold income and employment taxes from your paycheck.  You will pay income tax on your wages earned.  You will in almost all cases need to have a payroll company manage your payroll so that you can free yourself up to run the business more effectively–and efficiently.  The W-2 income that you receive would be deductible by the LLC on your personal tax return on schedule C.

 

You can use the employee option if you are a sole proprietor, partnership, S corporation or C corporation.

 

 

2) Receiving Distributions from LLC Profits

You also have another option for how to pay yourself in an LLC and that option is to receive distributions of profits from your LLC each year.

 

In general, if you have a multiple member LLC, each member owns a percentage of the LLC, called the “capital account” that can be drawn from.

 

Year-end profit distributions are made based on that percentage.

 

Let’s say that the LLC that you create had $100,000 in profit and you had one other member, you would each own 50%, therefore, you can each receive $50,000.

 

You also could set up a draw to receive ongoing payments as a draw against the year-end profit.

 

If you expect your percentage of the year-end profit to be $24,000, you could set up a draw to receive $1,000 each month along with $1,000 for the other member assuming they owned 50%.

 

The total of all the draws throughout the year are deducted from the total year-end profit!

 

So if your draw for the year totaled $12,000, but your share of the profit ends up being $15,000, then you would receive $3,000 at the end of the year.

 

If you are the only member of the LLC, you will pay income tax on “your distributions” and you will file Schedule C to report the profits and losses of the LLC with your personal tax return.

 

If there is more than one member, the IRS generally treats the LLC as a partnership and each member would report their share of the profit and pay income tax and self-employment tax on that profit.

 

The LLC will file IRS Form 1065 (information return) to report how profits are divided among the members and individual members would receive a schedule k.

.

NOTE: It’s important to note that receiving a salary and receiving year-end distributions are not mutually exclusive. If you get a paycheck, you’re still a member of the LLC and you are entitled to your year-end distribution.

 

Work as an Independent Contractor

Another potential option for paying yourself is to hire yourself as an independent contractor, doing work for the LLC that you also own.

 

Let’s say you are a member of an LLC that offer a food service, you can hire yourself as an independent contractor to provide the service.  This type of arrangement may not offer as many benefits, though–so use caution.

 

If you choose to pay yourself as a contractor, you need to file IRS Form W-9 with the LLC and the LLC will file an IRS Form 1099-MISC or 1099 NEC at the end of the year and you would receive a copy during the tax season–usually by January 31st.

 

You will be responsible for paying federal, state (if applicable) and self-employment taxes on the amount earned.

 

Choose Not to Receive Payments

You also have the option to not pay yourself anything and to leave the profits in the LLC.

 

You still need to pay income tax on the profit earned, since the profits from your LLC pass through to your personal tax return or would be included on your corporate return if you elected to be taxed as a corporation.

 

How to Form an LLC

To form an LLC, you need to name your limited liability company, selecting a name that is not in use by another business in your state.

 

The secretary of state website in your state will generally link to the database where you can search names.

 

Once you’ve chosen a name, you can start an LLC by designating a registered agent, a person or company that is authorized to do business in your state.

 

The registered agent is who will receive legal notices such as service of process and tax forms on behalf of your LLC.

 

You can designate yourself in some states, but it is generally best to choose a company that specializes in providing this service.

 

You must also file a formation document with your state, typically called “articles of organization” and pay a fee.

 

Once your state accepts your articles of organization, you have officially formed an LLC and you want to be prepared to pay an annual fee in order to keep your LLC in good standing with the state and the public on a year-to-year basis or for the life of your LLC. 

 

In Summary:

a Limited Liability Company (LLC) is a business structure allowed by state statute.

 

Each state may use different regulations, you should check with your state if you are interested in starting a Limited Liability Company.

 

Owners of an LLC are called members and most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities.

 

There are no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner.

 

A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for further information.

 

Always realize that there are special rules for foreign LLCs.

 

Taxation of LLC’s can be as a sole-proprietor (default), partnership (agreement and/or default), S corporation (election) or C corporation (election).

 

C Corp or S Corp

As an LLC you can choose to identify as either an S corporation  or a C corporation.

 

S corporation 

If you select an S corporation, income is reported by the LLC but is passed through to you and other shareholders as owners.  You report that income but do not pay self-employment tax as a partnership or sole-proprietor would.

 

You want to ensure on the front end that you are eligible for S corp election!

 

A single-member LLC taxed as an S Corp splits up that income and tax burden.  As an S Corp owner, you must pay yourself a salary, which has to be “reasonable compensation,” – similar to what you’d make as an employee performing the same job.

 

Other key aspects of an S corp:

 

What is the S Corp tax rate?

An S corp would file 1120S information return.  As a pass-through entity your share of income would flow from the 1120S to you and you would pay taxes based on your marginal tax rate that was discussed above.  An S Corp does not have a separate income tax rate like a C corporation as it is considered a pass-through entity, meaning profits are passed through to the owner (possibly you if you elected this type of business formation) and taxed as personal income based on the owner’s tax bracket, thereby qualifying you for the QBI deduction if you were otherwise eligible.

 

Does an S Corp file a tax return?

Yes, information return on Form 1120S would be filed.

 
A corporation must file Form 1120-S if it elected to be an S corporation by filing Form 2553, and the Internal Revenue Service (IRS) accepted the election.  The IRS uses the ownership percentage detailed in Form 1120-S to allocate how much profit and loss should be assigned to an individual shareholder.
Even though the S corporation does not pay income tax, it has a responsibility to file an annual tax return on Form 1120S. This tax form is for informational purposes only and provides the IRS with an aggregate view of the business’ earnings and expenses.

 

Can I change from an LLC to an S Corp?

In order to receive S Corp tax status you must first form an LLC and later determine if S corp election is an option for you–and if so consider the pros and cons based on your business type and expected earnings.

 

The S corp election process varies from state to state, but involves:

 

  1. selecting a business name
  2. filing an articles of organization
  3. selecting a registered agent, and
  4. creating an operating agreement.

 

There also may be associated fees, such as the articles of incorporation fee if you were to elect to be taxed as a corporation.

 

After incorporation as an LLC and you meet the requirements (such as having less than 100 shareholders) you can then file form 2553, “Election by a Small Business Corporation” and if accepted would allow you to be taxed as an S corp for tax purposes with the IRS.

 

The process is fairly efficient and in most cases can be completed in a few business days.

 

Once your business receives S Corp status, you can continue to enjoy the benefits of the owner of an LLC such as “limited liability protection” with the potential  added tax benefits of an S corporation.

 

Again, S-corps are exempt from a federal corporate income tax!  You file 1120S for informational purposes (the IRS wants to know who to expect tax payments from and at what amount).

 

In summary, S-corp taxation isn’t just for corporations as LLCs that meet eligibility requirements can also elect to be taxed as an S-corp.

 

By default, LLCs are taxed like sole proprietorships or partnerships, meaning the owners are considered self-employed and pay self-employment tax on all business profits.

 

S-corp shareholders can be company employees (rather than self-employed), reporting both a salary and distributions (draws that were discussed earlier) from company profits.

 

S-corp shareholders only pay self-employment tax on the salary component of income, while distribution income isn’t subject to self-employment taxes.

 

Keep in mind that if you elect S-corp status, you may receive extra scrutiny from the IRS, especially when it comes to the allocation of income between distribution and salary.

 

Salaries paid to S-corp shareholders must be reasonable, and not lower than the average or norm for the industry in order to avoid taxes.  Be sure you keep good records.

 

C corporation

As a C corporation you will also file corporate tax returns.  You will also personally file taxes and pay tax on your dividends, which are not tax-deductible for the LLC, so you end up paying a double tax on that income (once as the LLC on corporate return and once on dividends on your personal tax return).

 

To contrast with an S-corp, C-corp shareholders are not allowed to write off corporate losses to offset other income on their personal income tax return

 

These shareholders still pay personal income tax on dividends taken home (at their own bracket’s marginal rate) but only after the corporation’s gains have been taxed at the corporate income tax rate (currently 21%).  This arrangement is referred to as “double taxation” and you may be aware of the phrase.  Double taxation has historically been viewed as the price to pay for a corporation’s limited liability advantages that they have enjoyed for years.

 

As far as the complexity spectrum goes, C Corps have the most filing and maintenance restrictions, LLCs the least.

 

While S-corps and C-corps are usually not any different under state corporation laws, the important differences lie in federal tax law.

 

With a C-corp, a corporate income tax is paid first with a federal return (Form 1120) required by the IRS.

 

Shareholders must then pay taxes on personal income at the individual level for any gains from dividends.  In exchange for this less favorable double taxation, C-corporations enjoy an absence of restrictions on who can own shares.

 

Unlike S-corps, C-corps can have an unlimited number of shareholders and can include businesses and entities both inside and outside the United States.

 

If you choose to start or change your business to a C corp, you must file Articles of Incorporation.

 

By contrast, if you choose to establish an LLC, instead of filing Articles of Incorporation like a corporation, you must file Articles of Organization with whatever state agency manages business registration.

 

And similar to an LLC, a C corporation must also list a registered agent.

 

About Form 1120, U.S. Corporation Income Tax Return | Internal Revenue Service (irs.gov)

 

Form 1120

 

Can I Consider a Single Member LLC, even if I am Married

The money earned from an LLC flows through 100% to your personal return where you and your spouse (if you are married) file jointly, therefore it is sometimes easier to just form an LLC using just one spouse in the marriage in a “single-member LLC” where only one spouse would be credited with self-employment tax payments.

 

A single-member LLC is taxed as a sole proprietorship, unless an election is made!

 

That means you pay a 15.3% FICA tax –commonly referred to as self-employment tax – on all the taxable income you earn from your business.

 

You also pay personal income tax at a rate determined by your tax bracket..

 

Generally the IRS considers married couples in an LLC to be a partnership. 

 

By forming a business with your spouse you could potentially open up other potential tax-saving opportunities.

 

For example, you and your spouse may then be able to contribute more toward retirement, through the payment of self-employment taxes and other tax favored accounts.  Other additional expenses that you may now take for granted can also possibly be deducted as business expenses.

 

Also, forming a business with a spouse could possibly open the door for the business to take advantage of several government programs aimed at helping protected classes of individuals.

 

If a single-member LLC does not elect to be treated as a corporation, the LLC is a “disregarded entity,” and the LLC’s activities should be reflected on its owner’s federal tax return.  If the owner is an individual, the activities of the LLC will generally be reflected on:

 

 

An individual owner of a single-member LLC that operates a trade or business is subject to the tax on net earnings from self employment in the same manner as a sole proprietorship.

 

If the single-member LLC is owned by a corporation or partnership, the LLC should be reflected on its owner’s federal tax return as a division of the corporation or partnership.

 

 

State of Georgia LLC Formation  (Check with Your State for Requirements)

Advantages & Disadvantages of an LLC:

 

Limitation of Liability

LLC advantages: LLC owners, also called members, are not personally liable for the debts of the business, including debts from most lawsuits against the company. A creditor of the business cannot go after a member’s personal assets (home, car, bank accounts, etc.).

 

A corporation and a limited liability limited partnership (LLLP) also afford limited liability, but the LLC has other advantages that will be discussed below.

 

A limited partnership (LP) protects the limited partners, but not general partners who create and run the business.

 

Sole proprietors or partners in a “general partnership” have no protection from business debts!

 

Tax treatment

LLC advantages: For federal tax purposes, an LLC has the most flexibility as to how it’s taxed.

 

1) A single-member LLC can choose to be taxed as a sole proprietorship, an S corporation, or a C corporation.

2) An LLC with two or more members (a multiple-member LLC) can choose to be taxed as a partnership, an S corporation, or a C corporation.

 

The best choice for you is best made in consultation with a tax expert, CPA and/or tax attorney!

 

A sole proprietorship or any version of a partnership has no taxation options unless an election is made:

 

The taxation would be on your personal tax return–schedule C.

 

A corporation only has two choices:

 

1) S corporation or

2) C corporation

 

S corp election

Unless C corporation treatment is elected, all Georgia LLC profits are passed through to the members. The members pay federal income and self-employment tax on their share of the profits, even if they do not actually receive any profits.

 

An LLC electing C corporation taxation pays federal corporate income tax, and the members pay tax on any profits (dividends) that are actually distributed to them—this is commonly known as double taxation.

 

Registered Agent

A registered agent is a person or company that is designated to receive official legal documents for a business, such as lawsuit papers, subpoenas, and wage garnishments.

Hiring an outside registered agent will generally cost from $100 to $500 per year, depending upon the agent you hire.

A registered agent is also required for corporations, LPs, and LLLPs.  There is generally no advantage to having a registered agent, although it may be a convenient way to be sure legal documents are received and handled properly.

An LLC is more expensive than a sole proprietorship or general partnership, since neither of these other types of businesses is required to register.

Unlike a sole proprietorship or general partnership, an LLC is required to have a registered agent in a similar manner as a corporation.

 

Ability to Raise Capital

LLC advantages: A n LLC may find it easier to raise investment capital than if it were structured as a sole proprietorship or general partnership.

 

Neither of these other forms of business can take on investors without making them a partner, but it is possible for an LLC to add new members without giving them a full role in management.

 

LLC disadvantages: If an LLC elects C corporation or S corporation taxation, it will be subject to both Georgia’s corporate income tax and net worth tax.

 

The corporate Georgia LLC tax rate is six percent of Georgia taxable income.

 

It is payable by the LLC if C corporation status is elected, and by the members if S corporation status is elected.

 

The net worth tax is also assessed, if the net worth of the LLC is more than $100,000.

 

LLC disadvantages: Registration costs An LLC involves more complexity than a sole proprietorship or general partnership, neither of which are subject to state registration requirements.

 

The Georgia LLC registration cost is $100 for the first year, and $50 per year thereafter, the same as for a corporation, LP, or LLLP.

 

Unlike a corporation, an LLC cannot issue shares of stock.  Any new investor would need to become a member of the LLC, which is more complicated.

 

Furthermore, many outside investors consider LLCs risky, and prefer to invest in corporations!

Also, banks and other lenders may be more reluctant to loan directly to an LLC than they would to a corporation!

 

Members of the LLC may be required to personally guarantee a loan, which eliminates the personal asset protection as to such loans. However, lenders may also require a personal guarantee from the owners of a small start-up corporation.

 

The Georgia Secretary of State corporations website provides additional information that may help you determine the best structure for your company. Also, to ensure a smooth registration process, you may want to consider having the assistance of an online services provider and if you are in another state or Country check with your government corporation website.

Flexible Ownership

LLC advantages: There are no restrictions on the number of members of an LLC, whereas an S corporation is limited to 100 members.

 

A C corporation can have more members, but will be subject to double taxation and more regulation regarding its operations.

 

An LLC is more expensive than a sole proprietorship or general partnership, since neither of these other types of businesses is required to register.

Complexity

LLC advantages: A C corporation has a three-tiered management structure, with:

 

  1. shareholders
  2. a board of directors, and
  3. officers

 

An LLC may be managed by its members, or by managers selected to run the day-to-day operations.

 

Corporations must hold an annual meeting of the shareholders, hold board meetings, and keep minutes of those meetings.

 

There is no requirement for the members of an LLC to conduct meetings and maintain minutes.

 

LLC disadvantages:  An LLC involves more complexity than a sole proprietorship or general partnership, neither of which are subject to state registration requirements.

 

Other Key Issues When Forming an LLC

Classifications

Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”).

 

Specifically, a domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and affirmatively elects to be treated as a corporation.

 

For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and elects to be treated as a corporation. However, for purposes of employment tax and certain excise taxes, an LLC with only one member is still considered a separate entity.

 

Effective Date of Election

An LLC that does not want to accept its default federal tax classification, or that wishes to change its classification, uses Form 8832, Entity Classification Election, to elect how it will be classified for federal tax purposes. Generally, an election specifying an LLC’s classification cannot take effect more than 75 days prior to the date the election is filed, nor can it take effect later than 12 months after the date the election is filed.

 

An LLC may be eligible for late election relief in certain circumstances. See About Form 8832, Entity Classification Election for more information.

 

If an LLC is owned by a husband and wife in a non-community property state the LLC should file as a partnership.

 

However, in community property states you can have your multi-member (husband and wife owners) and that LLC can get treated as a SMLLC for tax purposes.

 

If you are married and live in one of the nine current community property states: Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico and Wisconsin.  Within these states the law states that all property acquired by a married individual is owned in common with the individual’s spouse.

 

These very same laws can be extended to profits from an LLC that is owned solely by two people married to each other.

 

Taxpayer Identification Number

For federal income tax purposes, a single-member LLC classified as a disregarded entity generally must use the owner’s social security number (SSN) or employer identification number (EIN) for all information returns and reporting related to income tax.

 

For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN.

 

For certain Employment Tax and Excise Tax requirements discussed below, the EIN of the LLC must be used. An LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN.

 

An LLC applies for an EIN by filing Form SS-4, Application for Employer Identification Number. See Form SS-4 for information on applying for an EIN.

 

A single-member LLC that is a disregarded entity that does not have employees and does not have an excise tax liability does not need an EIN. It should use the name and TIN of the single member owner for federal tax purposes.

 

However, if a single-member LLC, whose taxable income and loss will be reported by the single member owner needs an EIN to open a bank account or if state tax law requires the single-member LLC to have a federal EIN, then the LLC can apply for and obtain an EIN.

 

Employment Tax and Certain Excise Tax Requirements

In August, 2007, final regulations (T.D. 9356)  were issued requiring disregarded LLCs to be treated as the taxpayer for certain excise taxes accruing on or after January 1, 2008 and employment taxes accruing on or after January 1, 2009. Single-member disregarded LLCs will continue to be disregarded for other federal tax purposes.

 

A single-member LLC that is classified as a disregarded entity for income tax purposes is treated as a separate entity for purposes of employment tax and certain excise taxes. For wages paid after January 1, 2009, the single-member LLC is required to use its name and employer identification number (EIN) for reporting and payment of employment taxes. A single-member LLC is also required to use its name and EIN to register for excise tax activities on Form 637; pay and report excise taxes reported on Forms 720, 730, 2290, and 11-C; and claim any refunds, credits and payments on Form 8849. See employment and excise tax returns for more information.

 

Note: If an LLC is owned by husband and wife in a non-community property state, the LLC should file as a partnership.  LLCs owned by a husband and wife are not eligible to be “qualified joint ventures” (which can elect not be treated as partnerships) because they are state law entities. However, one spouse can form an LLC and be treated as a sole owner or elect to be treated as a corporation.  For more information see Election for Husband and Wife Unincorporated Businesses.

 

Since Limited Liability Companies have exploded over the last 30 years or so, it has been covered in more detail in this discussion than other business formation types due to its popularity among start-up companies and small businesses.

 

The key aspects of an LLC include:

 

  • Shields you from debts and liabilities of your business—liabilities limited to assets within the company
  • LLCs and S-corps avoid double taxation and pass-thru taxation—flow from the business to your personal taxes
  • LLC can be used to hold assets or run a business
  • LLC is created by secretary of states office

 

1) statement of formation—select officers, president, vice-president, treasurer, secretary and define members ownership percentage—if you do business in another state you will need to register in that state

2) Steps vary by state

3) you must keep information and payments current with your state and some states require that you file annual reports

LLCs have members and managers

Aways make it a priority to stay in “Good Standing” as businesses and individuals will check before doing business with you

4) Operating Agreements formalize and sign—governs purpose, management, decision making, capital contributions and profits and losses of the company—how to transfer and add members would also be addressed here—along with what happens at death of a member and dissolution of the company (LLC).

Be sure to include: purpose, address of LLC, state where formed, address of company and address of registered agent

 

Term—30 years in GA-other states vary or you set—must dissolve with state otherwise you may owe fees and be in violation of mandated filing requirements

Management—member managed—actions taken by formal resolution and run by majority vote of members versus manager managed by management team—each manager can bind the LLC

Members & Membership Provisions—titles and ownership percentage listed here—how new members join—how transfers occur—state that members will not be liable for the debts and liabilities of the LLC in the due course of business—state what members are not allowed to do with money and property of LLC

Enter into contracts, convey, sell, assign contracts, transfer, pledge or encumber property or Intellectual Property of LLC

Accumulate debt or make promise to pay creditors

Approve or enter into a judgement on behalf of LLC

Borrow money in the name of the LLC

 

5 Steps that You can Take when Forming Your LLC (You May Need an Attorney or other Professionals to Assist You):

 

1) Step One: Determine Ownership Percentages

 

2) Step Two: Designate Rights, Responsibilities, and Compensation Details

 

3) Step Three: Define Terms of Joining or Leaving the LLC

 

4) Step Four: Create Dissolution Terms

 

5) Step Five: Insert a Severability Clause

 

Be sure to determine the following prior to creation:

 

Capital Contributions—how much each member will contribute

Allocation of profits and losses:

How calculated—when distributed—what happens in event of losses—how allocated

Accounting—when taxable year ends—cash or accrual –taxed as a partnership or corp.—elect S-corp or C corp review

Dissolution—finite or open ended—capital distributed according to operating agreement after death dissolution

Must be a separate entity—you cannot commingle funds with your personal accounts

Adequate assets—must fund appropriately—fund should be contributed to start-up capital

Separate Assets—own LLC bank account—hold title to assets in own name—can’t use to pay personal expenses or investments of members—TRANSFER OF CASH SHOULD ONLY BE FOR REASONABLE COMPENSATION BY MEMBERS THAT HAVE BEEN AGREED UPON IN ADVANCE—FOR REIMBURSEMENT FOR REASONABLE EXPENSES INCURRED ON BEHALF OF THE LLC AND DISTRIBUTIONS ALLOWED UNDER THE terms of the operating agreement. 

 

For Example, a distribution to a member to pay income taxes or designation that a member can lease an office or equipment and should be written into lease.

 

Separate Operations:

  • Do not commingle your personal accounts with your business account of the LLC
  • Keep member accounts and personal transactions separate from the LLC

 

Taxation:

  • Disregarded Entity pass thru is default—pay is reasonable value of your services
  • form 2553 s corp election you would have payroll earnings—not pass thru
  • form 8832 entity classification then form 2253

  

Relevant Forms & Documents that You May Need to Start Your Business 

 

EIN—a number that you get as a new business owner after you form a company

I-9—established the independent contractor’s ability to be hired in the United States

W-9—Social Security Number or Tax ID number needed so that vendor or business can report your income that you receive as an independent contractor to the IRS or if you are paying a vendor over $600 for the year you will want to get a completed W-9 so that you can file payments over $600 to the IRS

1099—shows the amount of compensation paid to the independent contractor that you pay or that is paid to you if you are acting as an independent contractor

1096—You or your business would group all of your 1099 payments to independent contractors or vendors on this form and submit to the IRS so that you can stay in good standing with the IRS (your records of payment to independent contractors/vendors and the IRS records would be in congruence)

W-4—Determines the amount of allowances that are selected for tax withholding purposes for employees of your business–allowances are generally based on filing status, number of dependents and anticipated tax credits and deductions

W-4p—Retirees who worked at your company would receive this for income tax reporting purposes

W-2—shows and reports to IRS employee income for the year and taxes withheld

DUNS # (Dun & Bradstreet)–will help with business credit, financing and vendor relations

 

Payroll–You will need to select a company to handle your payroll if you hire employees

Considerations:

Hourly versus salary

Taxes

Social Security & Medicare (FICA)

FUTA Federal Unemployment Taxes—6% on the first $7,000

SUTA—State Unemployment Taxes varies by state—paid every time you run payroll

State Sales Tax–depends on your business

 

Insurance--you will need to select a company to handle your insurance needs

Considerations:

Crisis Insurance—stand alone policy or add-on on E & O or Liability policy

Professional Liability Insurance (Malpractice, Errors & Omissions etc.)

Liability Insurance

Business Insurance

Business Interruption Insurance

Workers Comp–Pays for medical bills and wage replacement for a worker who is injured on the job

SUTA–Unemployment Insurance—state fund that employer’s pay into through payroll

FUTA–Unemployment Insurance—Federal fund that employer’s pay into through payroll

Disability Insurance—many employer’s provide or you can purchase a policy yourself if you are an employee

Key Person Insurance—basically life-insurance that would benefit your company for continued operation (the company is the named beneficiary on the policy)

 

Legal Protection

Copyright, Patent, Intellectual Property and other legal protections of your works, products or services may be needed

Copyright.gov-life of author plus 30 years–$35 per work submitted—can register multiple works if created at same time

If your business has patents, intellectual property etcetera, it is best to consult with an attorney

 

Conclusion

 

 

 

It is important that you realize that starting a business regardless of the formation type is a serious endeavor and you must be aware on the front end of what is required of you.  By gaining an understanding of the various business formation types at this time you can plan better and ensure proactively that you have all of your I’s and dots covered–so to speak.

 

Starting a business is a major decision and one that should not be entered into without having an understanding of the topics that were discussed above prior to going into business.  By proactively gaining a business mindset you can help ensure that you are making the right or at a minimum good decision as you pursue your dream of business ownership.

 

Many small business owners choose LLCs for simplicity and flexibility and eventually elect S-corp status or C-corp status once their earnings improve, rather than first registering as a corporation.

 

In addition, if you are properly funded and operate the right business you can form your business out the gate as an S corporation or a C corporation if you and your professional team see it more advantageous to do so.

 

There is no one best option among the possible business structures and tax treatments as each business will have a unique profile.  Your choice should be based on the specific situation of your business and projected earnings.

 

As a potential business owner you should consult with legal and tax professionals during the business formation process!

 

Regardless of your business formation, it’s important to have a basic understanding of your options upfront and you must also remember that many businesses evolve from one business structure to the next as they grow over time.

 

You now know that in order to establish an LLC, instead of filing Articles of Incorporation like a corporation, you must file Articles of Organization with whatever state agency manages business registration in your state.

 

And just like a corporation, an LLC must also list a registered agent.

 

Always make it a point to operate your business regardless of formation type with integrity (ensure that your behavior matches your beliefs) as by doing so you will make your companies continued growth much more likely to occur.

 

Your PATH to business and wealth building success requires that you participate in the right activities, associate with the right people, think about the right things and form the right habits that are necessary so that you can achieve on a consistent basis so that you can finish among the top in all of your races.

 

Always realize that you can always change your PATH toward the success that you desire–and you can always reach higher!

 

All the best to starting your business and continuing on a path to achieving a lifetime of success…

 

Note: This page is not to be interpreted as legal advice by the author but is presented primarily so that you are aware of legal structures that are available when you contemplate forming a business entity.

 

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Deadlines & Wealth Building

Learn how planning for success with time lines provides  you the opportunity to avoid  explosive mines…

 

As the 2021 tax season came to an end the creator of TheWealthIncreaser.com realized that increased productivity occurred in the area of tax preparation when making excuses or procrastination was absolutely not an option as clients had to get what they wanted (the completion of their tax return) prior to the April 18, 2022 deadline.

 

By kicking activity into a higher gear and making a sincere effort to meet the deadline, the acceleration of tax return preparation was done in a more intense and all-consuming manner in an effort to meet the deadline and help clients avoid the late filing fees and failure to file fees.  It then occurred to the creator of TheWealthIncreaser.com that by setting a deadline and having every intention on reaching that deadline, you can do more and achieve more.

 

In this discussion TheWealthIncreaser.com will discuss the importance of why you must formulate goals and have a deadline for achievement so that you can achieve more and at the same time open a new door.

 

 

It is important that you realize that the timing to do what needs to be done will never be just right

 

In life there will be many obstacles, even so you want to set goals that can benefit you and your family that can make your life more rewarding and enjoyable while you are here on earth.

 

As difficult as it can be to move forward efficiently you must not let procrastination get the best of you!

 

The time to do what needs to be done in your life that can transform your future to that of major success will never be to your liking.  You must make it a priority to give it your best so that you can achieve a higher level of success.

 

The time for you to do just that is NOW–put a serious plan in place now so that you can achieve your credit and financial goals so that you can later say–WOW!

 

By continuing to read this page  and site you will learn how!

 

It is important that “you” formulate goals that are realistic and you believe in

 

You must have a big imagination and  move toward what you truly desire and you must AIM higher so that you can achieve the goals that you truly desire.  Why dream small or not dream at all when you can dream big with something that you are passionate about and pursue what you want with more clout!

 

By dreaming big you open up the possibility to let inspiration in–so that you can win.  By formulating goals that you believe in you are putting your mind and heart “into the mix” and you open up unlimited possibilities to achieve optimally as you move about daily toward the goals and expectations that are uniquely your own.

 

It is important that you have every intention on achieving your goals in an efficient and effective manner

 

It is imperative that you never quit, and by setting deadlines you put yourself in position to give it your all–all the way to the finish line (no pun intended) and achieve goals that are deep inside your heart and mind and in many cases divine.

 

You must know what you want to achieve financially and otherwise while here on earth and you must have the focus, commitment and dedication that is necessary to achieve what you desire in an efficient and highly effective manner and setting deadlines will assist you greatly in achieving that task.

 

Conclusion

 

The key point of this discussion is for you to realize that you should aspire to build wealth and live a more joyous life and by setting deadlines it will force you to activate your mind and heart at a higher level and operate daily at a higher level as you move toward the goals that are most important to you and the goals that are the ones that you really want to see come true.

 

You must realize that you can do what you want to do when you want to do so and possibly achieve your goals or you can choose to set deadlines for accomplishment and leave procrastination in your past.  You must have a “sincere desire” to achieve what you “truly want to see come true” and by putting a timetable for achieving what you desire to achieve on a clock–you can avoid financial shock.

 

By setting deadlines and putting your plan for success in writing you can operate in a more intense manner and the success that you desire can be reached in a shorter time frame!

 

If you set a deadline to set up a budget or cash flow statement, set a deadline to master your understanding of credit and set a deadline to learn how to comprehensively manage all areas of your finances you can achieve far more while here on planet earth for this relatively brief time.

 

By doing so you will pay off or pay down your debt and build your wealth in a way that is more comfortable for you–and worry, anxiety, fear, frustration, lack of effort and excuses will be a thing of your past–as you embark on a new way to take off that will surely be a blast.

 

Isn’t it time that you use the “power of now” to do something significant in your life that really matters!

 

You must leave “procrastination at bay” use your “inspiration to find a better way” and improve your financial condition and move to improve any other situation you face–starting today.

 

Now is the time that you flip the hourglass and transform potential into reality so that you can use your time wisely now–or more appropriately right now to build wealth more efficiently and more effectively!

 

And just as the creator of TheWealthIncreaser.com was forced or activated by a deadline to achieve more–so too can you achieve more in the area that you choose to by setting deadlines for achievement and having every intention on achieving what you desire.

 

All the best to your timely wealth building success…

 

Learn how you can use humor to reach your deadlines more efficiently…

 

 

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Credit Management & Wealth Building During COVID-19

Learn why it is imperative that “you manage your credit effectively yourself” in any economic environment…

 

When it comes to credit management it is important that you realize that it is your responsibility to manage your credit effectively in a proactive manner and not depend on credit repair and other credit improvement companies–when you have the opportunity to do what needs to be done on the front end.

 

Effective credit management (even during the COVID-19 Era) is not as hard as you may think if you make the commitment to get out in front of your credit transactions and learn wise credit and money management strategies on the front end.

 

Even if you have made credit mistakes in your past you can now start on a more effective path as it relates to the management of your credit!

 

In this discussion you will learn how you can take control of your credit management and manage your credit effectively throughout your lifetime, or during the period in your life that you desire to use credit.

 

By learning and applying the following principles, you will have no problem effectively managing your credit from this day forward–thereby ensuring a more prosperous future for yourself, your family, your loved ones and the society at large in which you live.

 

  • You must have a basic understanding of credit

It is important to realize that you don’t have to be a credit expert to manage your credit at a more beneficial level, however you must have a basic understanding of how credit works so that you can make credit work for you as opposed to against you!

 

You must know why you are using credit and you must know the purpose of credit so that you can use credit wisely and achieve more during your lifetime.

 

  • You must know when to use credit

It is important that you realize that whether you have poor credit or great credit you will be bombarded by creditors, advertisers, marketers and others who will promote products and services that may or may not be beneficial to you and your family from a credit perspective.

 

Therefore, you must know when to use credit and how to select the credit that will be in your and your family’s best interest!

 

The key types of questions that you must ask are: 

 

If I make a major purchase using credit cards and purchase a car (financing involved) at this time–what effect will that have “credit wise” on my intention to purchase my first home 18 months from now?

 

If I use credit to make a major purchase, do I know the time frame that I intend to pay off the creditor?

 

If I choose to pay off my current creditor with a “zero promotion” offer from another creditor, have I run the numbers to determine my real savings and my real advantage of doing so “prior to” the balance transfer and payoff–not after?

 

Those, and other relevant questions must be asked and answered appropriately up front–not after the fact!

 

  • You must have an effective payoff plan in place “prior to” your credit use

If you use credit in an advantageous way–you will position your finances in a manner where you can pay off your credit debt on a monthly basis and in the case of balance transfers and promotional offers that you may sign up for–during the promotional period or the zero percent interest period so that you can avoid or eliminate interest or other fees.

 

By having a payoff plan “prior to” your purchase and by adhering to that plan you put yourself in position for more effective credit management as well as maintaining or improving your credit position and hence credit score.

 

  • You must know how the credit scoring system works

It is important to know that there are two scoring systems that are in wide usage (FICO and VantageScore) and others that are used by credit bureaus to a lesser degree.

 

It is important that you learn about the credit scoring system in as relaxed a manner as possible. 

 

While learning you don’t want to be stressed, worried or otherwise distracted as the answer to your concerns could lie in front of you.

 

Although there are differences and similarities in many of them–the key is to know how to keep Negative information off your report, Utilize your credit appropriately, keep older accounts open as Time length is important, have different Types of credit and keep Inquiries (hard pull of your credit) at a low level  and you will have no problem managing and/or improving your credit–regardless of the version or model that is being used!

 

Keep in mind that when it comes to credit scoring models, there are industry specific versions, newer versions, older versions, in-house versions and other versions all on the market at the same time–the key for you is to know which version your creditor (or potential creditor) uses–and then proactively know what is in that version (your score or relevant score range) prior to formally applying for credit.

 

Conclusion

 

Your effective use of credit can be made easier if you have a basic understanding of credit, you know how to use credit wisely, you have a realistic payoff plan in advance and you know how the credit scoring system works and how it will affect your usage of credit.

 

You don’t have to be overly concerned about the scoring models as long as you pay on time, you use your credit sparingly (particularly your revolving debt), you pay off your debt in a timely manner, you have a good credit mix or different types of credit–and you keep your inquiries low.

 

By gaining a basic level of credit understanding at this time you put yourself well ahead of those in the general population and your effective credit management will now be made easier if you apply the concepts in this discussion and you are one who desire to manage your credit effectively from this day forward and throughout your lifetime, or the period that you desire to use credit during your lifetime.

 

By responsibly doing what you need to do on a consistent basis your credit score will reflect that responsible use over time and will put you in position to attain your credit goals and what you expect to happen at the various stages of your life.

 

Effective credit management starts with a thought by you, that you really want to manage your credit better and a real desire (by you) to find the best or appropriate way to do just that in a manner and style where excuses are a thing of your past!

 

All the best to your credit management success during COVID-19 and during tougher times ahead that are yet unseen…

 

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Comfort & Wealth Building

Learn why a certain level of discomfort (and comfort) is to be expected as you build wealth….

 

It is important that you make a serious commitment to build wealth in effective a manner as possible so that you can truly reach the goals and expectations that are uniquely your own.

 

As you embark on your wealth building journey you must prepare your mind for a certain level of discomfort and yet you must still have confidence that the wealth building goals that you are pursuing will come into fruition in a time efficient manner–if you put in place a highly efficient plan that can take you toward your goals.

 

In this discussion TheWealthIncreaser.com will attempt to broaden your perspective on how you can achieve wealth building success in a more comfortable manner and in a manner that is more favorable for you and your family.

 

1) Confront Your Finances

It is important that you ask yourself, what can I do to make my life better or easier as it relates to the management of my finances.  The first and often the most uncomfortable time is coming to the conclusion within your mind that you sincerely desire to build your wealth more efficiently and you are determined to do so.

 

Do you find “answers to your financial concerns” worth being discovered?

 

If you do, you are well on your way to confronting your finances in a way that will be uncomfortable in the beginning but will make your journey on earth “more comfortable in the long run” as far as your wealth building and money management activities are concerned.

 

By confronting your financial condition, you are consciously and unconsciously comforting your finances and by “starting the process” you can ultimately turn your financial journey into a trip that allows you to give it your best–and reach a higher level of success!

 

2) Manage Your Credit Effectively

Many consumers find credit management to be difficult and overbearing when in actuality the process of effective credit management is quite simple.

 

The key is that you must get “out in front” of your credit management or another way of looking at it is you must proactively manage your credit.

 

You can do so by experiencing a certain level of discomfort at this time by mastering the 5 credit factors so that you can comfortably manage your credit effectively during your life at a later time.

 

3) Manage Your Overall Finances Effectively

Once you confront your finances and learn how to manage your credit in ways that are more advantageous for you and your family–you are now in position to confront and manage your overall finances in a more effective and comfortable manner.

 

By managing your insurance, investments, taxes, education planning. estate planning/wills and retirement planning at a level that is your absolute best, you put in place what is necessary for you to reach a much higher level of success!

 

Your clear understanding of how your finances interconnect in all areas is a major key to effective management of your finances throughout your lifetime and that understanding can provide you a level of comfort that is immeasurable!

 

Conclusion

If you are one who desire to transform your finances and your future, it is important that you realize that you will experience a certain level of discomfort on the front end before you get to a certain level of comfort on the back-end!

 

Your commitment to stay the course and do what needs to be done even at times when you are not feeling your best is a major key to unlocking new doors of success.

 

By following the three steps above and properly establishing an emergency fund at the earliest time possible you can enjoy life more, reach your retirement goals, take the vacations that you desire and “develop the mindset” to always reach higher.

 

Your effective money management should be a comfortable experience and it is the hope of the creator of TheWealthIncreaser.com that this discussion on wealth building will help make your life more enjoyable, more comfortable and more successful and will sincerely take you to where you desire or need to be in a manner that gives you the clarity that you need–so that you can truly suceed!

 

Isn’t it time you get out of your comfort zone and pursue what you truly desire with the passion, intensity and urgency that is needed that will provide you and your family the wealth building success that can be passed along to future generations!

 

All the best as you enjoy your wealth building activities at a level of comfort that allows you to achieve at a level that will lead you toward unlimited success….

 

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Expectations & Wealth Building

Learn why you must expect wealth building success and have a real commitment to put forward the needed effort at a level that is your absolute best…

 

In the current economy many are letting anxiety and uncertainty about their future lead them toward unhealthy behavior and behavior that may not be in their best interest in the short, intermediate and long-term–in many instances.

 

In this discussion TheWealthIncreaser.com will discuss the importance of why you must expect success, be willing to move to action at a level that is your absolute best–and permanently put the notion of failure to rest!

 

 

When it comes to building wealth your confidence in yourself and your commitment to action is critical.  And as stated in the most recent post that has fast become a blog favorite–you must enthusiastically pursue your wealth building goals at a level that is your absolute best.

 

You must expect positive outcomes in any economic environment, and you must put an effective plan in place to achieve those outcomes.

 

Your knowledge and understanding of how you manage your cash flow, how you manage your credit and how you manage all areas of your finances will to a large degree determine your wealth building future and can realistically provide you a blueprint of how you can achieve your goals efficiently and provide you the clarity in your mind that can convince you that you can meet or exceed your expectations in your future–if you take the right action–consistently!

 

In the following paragraphs TheWealthIncreaser.com will discuss these topics in more detail in an effort to provide you meaningful direction–so that you won’t fail–as you learn what sincerely pursuing your wealth building goals entail.

 

You must realize that it is YOU who lie at the center of achieving real success and it is YOU who truly control actually making your dreams come TRUE!

 

1) Cash Flow Management

Your ability to manage your cash flow on a monthly and annual basis is of paramount importance and if you do it right consistently you can set yourself and your family up for untold success.

 

The yearly vacations that you desire, your membership at your favorite athletic club, your dream car that you always saw yourself driving, that vacation home that you always wanted, your volunteering for and contributing to your favorite cause(s)–and many other goals that you desire can be brought into clear focus if you manage your cash flow effectively and you have an expectation of doing so on a daily basis from this day forward.

 

Do you currently have an effective cash flow management system in place or are you taking whatever life dishes out at you?

 

Effective management of your finances can lead you toward what you want to happen in your future and help ensure a more rewarding and enjoyable future for you and your loved ones–so that you don’t have to do heavy lifting by the tons–as your wealth building success rotates around the suns!

 

2) Credit Management

As you enter the various stages of your life credit advertisements that try to sway you will come on a consistent basis and at many stages of your life you will be bombarded by credit experts (or advertisers and marketers) who are determined to get you to sign up and use credit services.

 

In many instances they may not be in your or your family’s best interest!

 

Do you have a system or the knowledge of how to know when credit will work best for you and do you know how to use credit in a manner that works best for you and your family?

 

If not, are you actively pursuing the knowledge of how you can manage your credit more effectively and are you putting that knowledge into action with the expectation that your credit management will take you toward the goals that you desire in an efficient manner and in a manner that is more favorable for you and your family–not creditors or others who have no real concern for you or your wealth building future?

 

3) Overall Management of Your Finances

Do you have a system that allows you to know at the drop of a hat what you must address effectively in all areas of your financial life–or are you headed toward financial strife by not having the knowledge that is necessary to take you where you need or want to be as far as your wealth building success is concerned–during your life?

 

It is important that you ask yourself the right questions and seek the right answers as you build wealth! 

 

If you don’t know what areas of your finances that you must address–you are adding stress to your life in ways that you may have never imagined and you make reaching your goals far more difficult than it should (or have) to be.

 

Your effective management of your insurance, investments, taxes, education funding, estate planning/wills and retirement planning along with properly establishing an emergency fund at the earliest time possible is a surefire way for you to attain success and attaining that success must be your expectation from this day forward.

 

Conclusion

In this economy or any economy, you must have an expectation of success.

 

Even though COVID-19 remains a major concern, housing prices and interest rates continue to rise in many areas and inflation and gas prices are on the rise in many countries and with news of wars and rumors of war that have created anxiety and disrupted the usual happenings for many in various parts of the world–along with many other downward spiraling activities that occur at a personal level–and can be disheartening to a large extent–it is still important that you have a vision of success and an expectation of success–if you are one who is truly determined and willing to give it your best to achieve that success.

 

You must expect success at this time, and you must be willing to do what needs to be done on a consistent basis!

 

It is important that you realize that your determination at this time to follow the three steps mentioned above has the potential to change your life for the better in a major way!

 

However, potential means that you have not done it, however by “expecting success” and taking the action steps that are relevant for improving your credit and finances whether by utilizing this site or any other source that works for you–you can turn potential into real results that can propel your and your family’s future for generations to come.

 

It is important that you prepare your mind with the right knowledge that can lead you toward what you desire in the most efficient manner possible!

 

You can choose to make a conscious, deliberate decision at this time and not only create a meaningful path toward the future that you desire–you can also travel on that path in the most efficient manner possible–thereby achieving what you expected to achieve–because by mastering the three steps above–you now truly believe!

 

Throughout your life you must “expect success” and you must know how to manage your money effectively, know how to avoid common wealth building mistakes, know how to manage you credit wisely throughout your lifetime or period that you desire to use credit, know how to avoid common home buying mistakes and know how to manage all areas of your finances effectively and efficiently–as you build wealth.

 

By frequenting this site and knowing your wealth building responsibilities (and acting on those responsibilities in a sincere way) you can change your future for the better–starting today!

 

All the best to your future success as you should “expect” nothing less…

 

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Enthusiasm & Wealth Building in the COVID-19 ERA

Learn why you must have fire in your heart if you are now ready to start building wealth effectively in a manner that will truly set you apart…

 

In the current economy with COVID-19 wreaking havoc, rising prices on many goods and services and other happenings at the local and global level it can be difficult for some to rise above the anxiety that could be inside of their mind and heart and move forward in a manner that can truly take them where they need or want to be as far as reaching wealth building goals that will serve a greater purpose in their life.

 

Even if others don’t want success, you can approach your wealth building efforts with more confidence and that begins by you having a true desire for wealth building success from this day forward–and throughout your lifetime!

 

Even though the creator of TheWealthIncreaser.com has been fighting through the COVID-19 virus over the past few weeks and has been less active in all areas–and enthusiasm or fire for life has been taken down several notches–this discussion is designed not only for you to achieve optimally but also to help the creator of TheWealthIncreaser.com gain back the “enthusiasm” and momentum that was recently taken away, and also to get you and others on a more determined and definite path toward lasting success as you build wealth.

 

By taking to heart the following “3 points” and determining where you can make improvements in your life you can move toward achieving your wealth building goals in a manner that makes more sense, makes your journey less intense and formulating and achieving what you truly desire will be made more relevant.

 

1) Your enthusiasm begins inside of you

It is important that you have a certain level of ambition or true desire to reach your wealth building goals.

 

Your goal is to set yourself apart from the crowd and pursue your wealth building goals with a high level of discipline, commitment and purpose (DCP–yeah you know me) as by doing so you put yourself in a better position for lasting success that allows you to live at a level that is your absolute best.

 

Your action on a daily basis in a disciplined manner, your commitment to action on a daily basis and knowing why you are doing what you are doing lies at the heart of your wealth building success–if you are now determined to give it your absolute best.

 

2) Your enthusiasm must be directed toward a specific goal(s)

As you build wealth it is important that you set meaningful goals that you have every intention on achieving.

 

By doing so you energize your mind and heart to operate at a higher level on a daily basis so that you can WIN the majority of your races!

 

By having a high level of enthusiasm toward paying off your debt, managing your credit optimally and looking at  and addressing your finances in a comprehensive manner,  you put yourself in position to attain successand build wealth in the COVID-19 ERA or any ERA.

 

By setting meaningful goals and pursuing them at your highest level–you position yourself to excel and not fall downward into a never ending well.

 

By reaching higher, you put yourself on a more positive path toward achieving the goals that “you” require and you exponentially increase the odds of achieving what you desire and avoid finding yourself in a financial quagmire that makes your outlook for success–dire!

 

3) Your enthusiasm must never die out

You must pursue the success that you desire with enthusiasm and vigor.  You must see beyond the right now to see what is truly possible if you do what you need to do!

 

And just as the creator of TheWealthIncreaser.com will move forward in 2022 with more enthusiasm and focus in spite of starting 2022 in the worst way possible since being on planet earth due to COVID-19 that slowed down progress and delayed meaningful goals that were set for well over a month–so too must you not let adversity, distractions, emergencies, worry, anxiety, fear, frustration, excuses and not putting forth the required effort hold you back in not only 2022–but the remainder of your existence while here on planet earth.

 

Your mindset must be to “expect success” and “pursue that success” at a level that is your absolute best and permanently put the notion of failure to rest!

 

You must always realize that you have the power within to operate at a higher level and control the direction and outcomes of your future if you are willing to put in the effort and develop a never quit type of attitude that will never die out.

 

Conclusion

Your enthusiasm or “fire on the inside” that you have can be used effectively as you build wealth if you have the right approach.  It is imperative that you pursue your wealth building goals in a disciplined, committed and purposeful manner (remember DCP) if you are one who desire to achieve at your highest level of excellence.

 

Improving your cash flow position, managing your credit effectively and managing all areas of your finances effectively throughout your life can be made easier and more rewarding if you put both your heart and mind into the effort and you “sincerely desire” to achieve the goals that you are pursuing–regardless of what they may be.

 

Always realize that it is easier to change your financial behavior than it is to change your attitude–however, if you are disciplined, truly committed and you know your purpose for life–you can do both and permanently change the trajectory of your future in the strongest way possible.

 

You and your family deserve nothing less!

 

All the best to enthusiastically pursuing your wealth building success in a manner that will allow you to live your life at a level that is your absolute best…

 

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Vision & Wealth Building During COVID-19

Learn why you must see the wealth building success that you desire–so that you can reach higher…

 

It is important that whatever your wealth building goals are–you have a vision of those goals and a clear vision about how you will go about achieving those goals–now during COVID-19 and throughout your lifetime.

 

Whether you desire to pay off your current burdensome debt, create that emergency fund that you know you need and deserve, plan for success by using a blueprint for success that includes creating a cash flow statement, creating an income statement, creating a balance sheet, knowing your net worth in terms certain, mastering your credit and attacking your finances in a comprehensive manneryou must have a vision of it happening–and you must know the steps that you need to take to make it happen!

 

If you have a vision of buying real estate and using the property for rental income or quick turning the property for a profit–you need to see it happening and know how it will happen.

 

You must ask yourself pertinent questions such as does the property that I am considering require repairs and if so how extensive–and what will the cost of doing so be?  When do I expect to finish the project and be on target to rent or sell (holding period) the property?  What is the “average number of days to sell” in the area that I am considering for purchase?  Will I be purchasing in an area with strong schools?

 

Will I be financing or will I make a cash offer?  What is my entry point as far as purchase price?

 

In short, what can I afford–acquisition wise and construction/renovation wise and what do I realistically expect to happen after I make this purchase?

 

Do I have a contingency fund (10% or more over what I expect to spend on repairs/renovations) in case there are costs that are not anticipated?

 

Unforeseen and unexpected renovation costs–usually have a cost associated with them and you want to know and plan for this on the front end!

 

Always consider your timeline of ownership as a factor as holding period can eat into your expected return.  Will outside forces slow you down or do you have a contingency plan?

 

Are you pursuing a 30% return or a 20% return?  It is important that you know what return you want and can realistically get–on the front end!

 

You also want to know what is going on in the neighborhood so that you can avoid the pitfalls that have negatively affected many home buyers.  It is important that you use your common sense on what needs to be repaired on the front end–and be aware of contractors and others who may be out to get you–financially speaking!

 

By looking at the property and doing a walk-through–you want to know whether window replacement, garage door replacement, roof replacement, hardwood floor repairs or replacement (in other words you need to know the basics) and other concerns need to be made “prior to making an offer” on the home that you intend to purchase for rental purposes, quick turn for a profit or even if you plan on using as your personal residence!

 

In short you must have a “vision of what must be done” to the property and a vision of how you will acquire the property!

 

Likewise, you must also have a vision of what needs to be done in all areas of your finances if you are to achieve at your highest level of excellence while here on planet earth.

 

Conclusion

Regardless of what you visualize to achieve–you don’t want to make mistakes on the front end if you can avoid them.  You can reduce your odds of making mistakes by frequenting this site, other helpful sites and proactively approaching your finances by having a yearning for success–and by getting out in front of your finances and not seeking knowledge after you have made a bad choice or decision!

 

Your vision of success must start by seeing the light–and the first step toward lasting success is to get your credit and finances right–whether during daylight–or at night!

 

By doing so you enhance the probability of success in your wealth building efforts and in ALL endeavors that you will pursue–including those goals named above that you may have or other goals that are particular to your and your family’s future success and desires.

 

Whether you have a vision of improving your insurance position, investment position, tax position, education planning position, estate planning/wills position and/or retirement planning position–it is important that you align with someone who provides a blueprint for success so that you can avoid common mistakes that are all too common (no pun intended)!

 

Where appropriate, you also want to select professionals of high integrity who can further assist you when and where necessary.

 

Although you may be one who likes to do it yourself in other areas of your life–your finances in many areas can also be done by you–if you learn in advance what you need to do.

 

However, in some areas professional advice may be warranted as some areas of finance are nuanced–and if managed effectively may have the potential to provide you additional and more beneficial success opportunities throughout your life–therefore it may be crucial that you get it right so that you can avoid financial strife!

.

Unforeseen, unexpected and unexplained events that you did not plan for will occur throughout your lifetime and it is important that you prepare for those events in advance.  Even so, you still want to plan appropriately so that you can still attain your vision and do what you need to do so you can achieve if you take consistent action over a number of years.

 

Your vision of success means that you will not make excuses and you will proactively attack your finances so that even when adversity occurs–there can be no other outcome other than the success that you desire–whether in the COVID-19 environment–or any environment.

 

Ultimate success must be a part of your process or theme as you reach higher to achieve your dream!

 

You must have a back-up plan in case your vision needs adjusting–and your drive toward your vision must be a true thing!

 

You truly are the determining factor for achieving the vision that you see–and being who you were truly put on earth and meant to be.

 

All the best to your vision of success as you now should expect nothing less if you are at this time willing to give it your absolute best…

 

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Retirement Planning & Wealth Building

Learn the importance of properly preparing for your retirement years so that you can build wealth more effectively…

 

It is important that you plan for a prosperous retirement at the earliest time possible.  In addition to knowing your cash flow position at this time and how you can use financial statements to achieve more–you also need to have an awareness of your “financial retirement number” that you will need to reach at a later time so that you can live out your retirement years in a dignified manner.

 

Regardless of whether you contribute to a 401k, 403b, thrift plan, railroad retirement plan, social security, IRA’s or other retirement funding vehicles, you must have a target amount that you need to hit to make your retirement years enjoyable and more beneficial.

 

There are a number of retirement funding vehicles and strategies that you can use to reach your “retirement number” once you get a handle on what that number is!

 

If you are conservative, and you desire to create a diversified portfolio, you can use a United States total market index fund, a United States total market bond fund, and a broad-based international fund.

 

You can simplify your choices even more by selecting a balanced fund or target date funds to reach your goals.  If you are more riskier, you can use Exchange Traded Funds, Mutual Funds, Stock Portfolios and other more exotic investment vehicles to reach your goals.

 

The key is you must have a plan at some level–and the sooner you get started–the better the odds are that you can reach your retirement number and live out your retirement years in the manner that is best for you and your family!

 

In this discussion TheWealthIncreaser.com will discuss the importance of planning appropriately for your retirement years so that you can “achieve your goals” and live out your retirement in the manner that you choose so that you can have more enjoyment during your golden years.

 

It is imperative that you have a basic understanding of retirement planning at a minimum and you have a willingness to learn more as you approach your retirement years.

 

Common Types of Income During Your Retirement Years

 

Social Security

In retirement you will have social security if you reside in the U.S. and worked and contributed at a level that allows you to collect benefits during your retirement years.  You can generally start receiving social security in your mid 60’s and the payments would continue throughout your lifetime.

 

Pension

Although pensions are a distant memory and thing of the past for most, some companies still provide them and if you now receive one or are on track to receive pension income in the future you must know what to expect and when to expect this stream of income.  There are also 401k ROTHs, Simplified Employee Pensions, solo 401ks and other retirement products on the market that may be appropriate for you–depending on your unique financial position.

 

401k, 403B, Thrift Plans and others

By contributing to retirement plans during your working years you can use pre-tax contributions to build your retirement nest egg in a more efficient manner.  There may be an employer match component to the plan and if so, you can use effective investing to achieve your goals even more efficiently.

 

IRA’s

You may be able to contribute to IRA’s (Traditional or ROTH) if you qualify and build a sizable nest egg that you can have available to fund your living conditions during your retirement years if you contribute to the max “and” you have a decent rate of return and choose a fund with low management fees.

 

There are tax and compounding advantages of using these retirement vehicles and they are worth real consideration if you qualify.

 

Railroad Retirement Benefits

If you work for the railroad system in the United States you could be eligible for a retirement plan that is generally more generous than that of the social security system.

 

Home Sale, Refinance, Home Equity Loan or Reverse Mortgage

If you were to sell your personal residence and downsize you could possibly be eligible for a $250,000 exclusion on the gain if you were single and you otherwise qualified–or $500,000 if you were married and otherwise qualified.  You can also refinance your personal residence (or your rental properties if you had any) to pull money out, get a home equity loan or home equity line of credit–or if your situation was dire (you failed to save appropriately during your working years) and you exhausted all other possibilities–possibly a reverse mortgage.

 

Keep in mind that when using any of the above approaches–you must do so strategically as your financial position is uniquely your own and what may be effective for others–may not be effective for you.

 

Investment Income

If you invested during your working years outside of your retirement accounts and reinvested you could have also possibly built a large nest egg that could be used during your retirement years to help fund your lifestyle.

 

Keep in mind an Exchange Traded Fund is more efficient for investing than a mutual fund when you are investing outside of your retirement as you will not have capital gains that would be taxable on an annual basis.  Other investments held outside of your retirement accounts may or may not be taxable.  Municipal bonds, individual stocks that are not sold may avoid or defer the payment of taxes.

 

Conclusion

You have the option of planning now for a more effective and rewarding retirement regardless of the life stage that you are now in.  Whether you invest in a traditional manner or you invest in cryptocurrency and other more exotic investment vehicles–you must have a plan to reach a level of success that allows you to not outlive your income sources–but also live comfortably and possibly leave something behind for your heirs or other causes that are dear to your heart.

 

When investing for your retirement years there are a number of key concerns that you should be aware of and you want to avoid common mistakes that many have made in the past by being aware on the front end and not being complacent during your working years.

 

You particularly want to be aware of fees that you pay and you want to minimize those fees on the front end because at retirement time it would be too late!  Look for no-load funds that don’t charge a percentage of your upfront investment.  Also choose a fund with a low expense ratio, which includes management fees and other costs of running the fund.

 

You can generally find this information on the funds website or in advertising brochures.

 

It is not uncommon to see retirees who invest $100,000 over a 30-year period with high fees end up with tens of thousands less than those who invest in funds with a low expense ratio.

 

You can change the direction that you are now on to that of real success if you now decide to plan appropriately–and give it your best.

 

You must analyze the sale of your home and the tax consequences (basis, depreciation, exclusion from taxes on gain must be analyzed) prior to and after you retire on the front end to ensure that you make the best decision for the short and long run regardless of where you are now at in your life stage.

 

Even if you have to pay for good advice, the value will more than likely be greater than the cost as you can avoid costly mistakes at the wrong time that have held so many back as they were building wealth.

 

It is important that you do all that you can to fund your retirement so that you can reach your retirement number and live at a level of comfort that you desire or need to live at.  Also keep in mind that with many retirement vehicles you will have mandatory withdrawals beginning at age 72.

 

If you project monthly income of $8,000 and monthly expenses of $5,000 and you are age 65 and you plan on living until at least age 95 you must hit the target number that will allow you to have “for a 30 year period” the $8,000 monthly income when all sources are added up.  You also want to know the tax implications and the effects of inflation on your retirement income so that you are “not surprised” during your retirement years.

 

Isn’t it time you try a new informative, powerful, revolutionary and results oriented approach to wealth building as opposed to the same tired approach that has been presented by many others in the finance industry over the years?

 

When it comes to retirement planning and wealth building  reaching your retirement number and having streams of income that are stable, reliable and predictable during your retirement years should be your primary goal.

 

When you combine your social security benefits, pension, other retirement income and all other sources of income during your retirement years, will it provide you with what you need to live out your retirement years in comfort?

 

By being particular, precise, clear and concise–about what you expect to happen during your retirement years–you set yourself up to avoid financial fears and eliminate financial tears during your golden years!

 

All the best to your retirement wellness and a lifetime of success as you are now in position to proactively give it your absolute best…

 

 

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Estate Planning/Wills & Wealth Building

Learn why you must look out into the future and plan for your loved ones and what will happen after you no longer inhabit planet earth…

 

It is important that you plan effectively for your future and planning for your heirs after you are no longer here on planet earth is at the top of the list when it comes to effective financial planning.

 

Although we all like to live as long as possible, the hard reality is that we will all transition at some point.  Therefore you want to address how your affairs will be handled at this time as best you can–so that YOU can determine what happens after your transition.

 

At the time of this discussion the creator of TheWealthIncreaser.com is battling COVID-19, and the topic of Estate Planning/Wills is a topic of real concern.   Regardless of where you are now at in your life stage, you want to take a serious look at your current estate and determine ways that you can transfer your assets more appropriately.

 

Furthermore, with this week being the one year mark since the transition of the mother of the creator of TheWealthIncreaser.com and one week since the creator of TheWealthIncreaser.com recovered (ok, partially recovered) from COVID-19, the topic of estate planning is more important than ever for not only the creator of TheWealthIncreaser.com, but also you and your family if you have not addressed what will happen with your finances and assets after you transition.

 

Know your financial standing at this time

A basic starting point for improving your finances is to determine where you are now at on a monthly and annual basis so that you can determine your net worth and determine the best type of asset transfer approach that is the best for you and your family.

 

At a minimum (regardless of your net worth) you want to create a will and if you have a high net worth a trust and more sophisticated planning may be necessary.

 

Determine the best products that will serve your and your family before and after your transition

There are a number of estate planning products and services that are available to help you as you go about your affairs in life.

 

Without getting into the practice of law, a number of concerns will be outlined below that could help you plan better and help you strategically manage your estate during your lifetime–and even after you transition.

 

1) beneficiary/deed designation

2) will

3)  power of attorney

4) health care directive

5) trust

6) insurance/annuities

7) other (products unique to your financial and life situation)

 

Review and update as necessary at the various stages of your life

Throughout your life changes will occur, whether it is the birth of a child, the transition of family members, job loss, various emergencies and adversity that was not planned for and other happenings, therefore you want to remain flexible and update your documents as necessary.

 

However, depending on your unique financial position and changes that occur during your lifetime, there may be much more to include in your estate planning to make certain all of your assets are transferred seamlessly to your heirs upon your death to help ensure that your intended wishes are carried out.

 

Conclusion

 

Planning for what will happen after you are no longer here on earth must be addressed with the utmost care and concern.  It is important that you contact an attorney and/or at a minimum create a will so that you can have peace of mind at this time and not have your loved ones quarrel after you transition and cause undue stress and hardship for your family.

 

By creating a will you can name a personal representative of your choice to represent your estate after your transition and that representative would file a final tax return on your behalf and the refund if any could be payable to the estate (legatee or beneficiary would receive).  Your personal representative that you designate would go to the courthouse after your transition and would get “letters of administration” giving the personal representative that you designate the legal authority to file your tax return and inquire about life insurance proceeds.

 

By taking the time now to address your finances in a comprehensive manner you are putting yourself and your family on a more successful track whether you have a low net worth or you are worth millions.  Your family will be in a better position for success after you transition and family disputes can be minimized–in large part due to your planning at this time–so that your intended wishes will materialize at a future time.

 

When it comes to estate planning/wills you want to look at all of your options on the front end–not after you transition–because it is impossible to do so at that time!

 

All the best to longevity and strategically planning your future in a way that will lead to your absolute success…

 

 

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