Saturday, April 28, 2012

Military – Taxes



Great News!  This was my 3rd year doing taxes for military members and I must say I have seen big improvements.  I’m not sure if people are getting smarter about their finances or what, but I am very pleased.  I have seen more people with rental properties and interest than the prior two years.   Most of them out of necessity more than likely, but having a rental property is an important step in becoming wealthy.

If you have read the book the millionaire next door it talks all about millionaires.  Their buying habits, jobs, and a few other areas.  Another real estate investor Dolf de Roo who spent significant time researching millionaires stated that almost all millionaires either created their wealth or hold their wealth in real estate.

It is my opinion that most investing should be done at the local level.  I am not a big fan of throwing my money to Wall Street.  I do not know those people, and to be honest, it really doesn’t benefit anyone but myself.  Much of the trading on Wall Street is what is known as the secondary market.  Meaning...the company doesn't get a dime from you when you invest (unless they happen to be selling Treasury Stock).  It is a selfish way to invest.  As a military member or civilian...service before self is a well known concept.  This is true for investing.  If you haven’t heard that owners are the last ones to get paid…it is true.  As an owner of a business everyone else gets paid first.  If not, the business will not be successful.  As an owner you pay vendors, employees, expenses, taxes, banks, creditors, and then as an owner you might get paid.  However, even then the owner may not get paid.  Why?  Retained earning!  Most businesses requires cash to expand the business.  Taking on debt adds risk of default or failure of the business.  One way that business owners expand the business is by taking profits and plowing the money back into the business.

When you think about investing, think about how you can help make your community better.  A great way to do this is figure out something you like doing, and determine if you can make money doing it.  At the same time think about who can benefit.  For example…I have a friend Jamie who is very knowledgeable about bike parts.  He finds people selling bike parts, buys them, and sells them to a group of enthusiasts.  Everyone wins in this instance.
Something that I personally am interested in is trash.  Trash is everywhere.  The old saying is someone’s trash is someone's treasure.  This is very true, and I have thought about starting a niche trash business.  I want a business that my kids can learn how to do, isn’t difficult, and will make the community better.  On our family walks or when we are out and about we always look for aluminum cans or metal that people drop on the ground.  Each can I estimate is worth about $0.02.  Not very much money, but if we are out for a walk or bike ride around our neighborhood we can usually collect about $0.25 worth.

Keeping the cash in your local community is a key factor to growing a city.  Cash flow makes or breaks a city, business, and personal finances.   Several ways exist to invest in your community.  I am confident, that if most businesses were run and owned by local people they could gain market share.  It is all about what you want to do in your part time.  Feel free to share your ideas!

2 comments:

  1. I agree that cash flow is one of the keys to a successful business. I get extra cash flow from buying and selling bike parts.

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