finance

Start Selling Shovels

Has the current economy caused you to start panicking a bit? I know that we’ve all been hearing about recessions, experiencing inflation, and living in a world that is more confusing than ever. It’s easy to see why some of us may be uneasy, or even fearful, when discussing financial security. But preparation is always the best antidote to fear, and this post will (hopefully) give you ideas for how to create more security and stability in your finances.

It is never too late to start creating financial freedom. It’s always never too late to adjust current behaviors in order to be more resilient in times of financial difficulty. That being said, you can do one thing, today, to ensure that you have more financial flexibility in the future.

Start selling shovels.

I don’t mean that literally, of course. I mean that you should look at examples of exemplary people who thrived in the past, and use those examples as models for your business and success. The shovels metaphor refers specifically to the California gold rush of the late 1840s. If you recall from history, you realize many of the gold miners actually never got rich. But there was one group that made lots of money, and had no problem securing their financial futures . . .

It was the shovel salesmen. It actually goes beyond the shovel sales, though: anyone that offered secondary or tertiary goods and services to the gold rush hopefuls thrived during this period. Levi’s jeans can still be found in big box retail stores, despite Levi Strauss being deceased for over 100 years. The first shop opened by Strauss in California was in 1853, two years before the gold rush ended. His shop was under the umbrella of the shop his family owned in New York, but he moved to San Francisco in order to provide goods to the thousands of people that relocated in hopes of finding gold.

Strauss found gold without striking one shovel against dirt nor panning in rivers. The gold was in the shoppers, not in the mines. He provided tents, blue jeans (though this particular invention really didn’t hit its stride until the 1870s, 20 years after the end of the rush), bedding, as well as unlikely luxuries, like handkerchiefs and purses. An under-served but eager group of buyers were women, who, moving to California with husbands or male relatives, missed the comforts of their homes. There were also women who moved to California with the hopes of landing a wealthy husband that could provide the comfort and luxury they desired. So, while the miners may have been men, there were other customers that needed to be served.

Sometimes, you have to sell a purse along with a shovel.

What does all of this mean for you, dear reader? You aren’t living in the 1840s, or 1870s. You can get shovels, purses, and blue jeans from Amazon, or, if you’re feeling adventurous, a local in-person retailer. So, what can you do with this story?

Look for the gold rushes, then serve the hopefuls. Start by looking at the “hottest” ways to make money, and come up with businesses and solutions that serve the people that aspire to be the “Next Great” whatever. Give them the goods and services they need, and they’ll make you rich. I’d also advise to lean more toward services, since goods are often easier to find and harder to price competitively without taking a loss initially. But, if your heart is set on offering goods, then do what you must.

No matter whether you focus on goods, services, or a combination, find the shovels you need to offer, and start making money. You can do it!

That’s it for today. Please let me know if this helped, or if you have any questions or ideas that you’d like to flesh out with me. Take care, and I’ll talk to you all soon!

Why Recessions Are NOTHING To Fear

Last week, President Biden announced that we are not in a recession, though the data indicates that we have experienced two consecutive quarters of declining economic activity. There have been many discussions surrounding the topic of recessions, and since I’m not an economist, I won’t pretend to be an expert in this topic AT ALL. However, I will share my thoughts as someone that reads regularly, and that has lived through several decades and seen a thing or two.

Practically every decade since the 1920s has experienced recessions. For those that don’t know, the 1970s was marked by record-high stagflation, which has a combination of recession and inflation that put economists in a quandary (proposals to correct one element – either the recession or the inflation – could negatively impact the other element). People have weathered tougher economic times. Of course, not everyone survives severe financial hardship – indeed, the most vulnerable populations offer suffer the greatest – and this post isn’t designed to make light of that. It’s a warning to those that have ears to hear.

In each decade, there have been people who won BIG and set themselves and future generations up for financial ease and freedom. They had a host of varying advantages and disadvantages, but every person that has WON in previous periods of recession had one thing in common: a will to act. Staying paralyzed in fear over possible things to come is a surefire way to remain stuck or to regress.

There is absolutely nothing to fear, if you’re wise, strategic and prepared.

Be wise – Continue to live within your means and reduce extraneous expenses. Live with moderate conservation as your guiding energy: conserve energy, conserve resources, conserve time, all in a moderate way. Excess or gluttony is no one’s friend in these times. Remember to act wisely with what you have and to treat your resources with reverence, neither being indiscriminate nor anxious.

Be strategic – Plan to grow your resources: expanding your financial kingdom, adding valuable individuals to your personal network, cultivating healthy, reciprocal relationships, and positioning yourself to be in communities that are vibrant and abundant. Master multiple skills so that you offer a plethora of value to your networks. Never stop learning: your skills may open doors for you that you didn’t know were possible. Explore as much free online learning as you can. Never forget that resources go beyond cash and tangible assets: PEOPLE are resources, ENVIRONMENTS are resources, OPPORTUNITIES are resources. Expand all of your resources for the best outcome.

Be prepared – I don’t like to post alarmist content, so please take this with the reasonable grain of salt that is intended. Stockpile resources that you suspect may drastically increase in price in coming months (within reason: hoarding is dysfunctional and should be avoided!). Learn practical skills that can help you reduce expenses or that can be traded for other resources within your network. Learn the full benefits of the physical and digital tools you possess, and start leveraging those tools to your advantage. Inventory assets that you have, so that you can have a record of the items of value you possess, in case you decide to trade or sell these to purchase something of exceeding value. And it should go without saying that bug out bags, fully fueled vehicles, and maintaining a full supply of emergency items should be non-negotiable.

You have nothing to fear: you are closer to financial freedom than you know. A few good choices today can mean abundance and ease for years to come. If you aren’t sure where to shore up your defenses, I’ll be offering consultations on my Services page (I’m currently updating it, but it should be live at the time of this posting). Take care, and please let me know the ways that you have been preparing for an upcoming recession!

3 Things to Do in August for Financial Health

One of the things that my friends regularly do is ask me about what they can do to turn their money around. Most of them have lots of money coming in, but they are unclear about how to invest for growth. Or, they are living well under their means but they want more fun in their finances (less austerity, more joy). Still, some don’t have enough money but they are open to making changes that will allow them to increase their income, decrease their expenses, and start living the life they desire.

For that reason, I’m going to start sharing monthly tips to help with financial health. These are things that I’ve done, or that I’ve recommended, that have helped my friends to get more bang for their bucks, as well as created opportunities for them to grow their finances. For the month of August, I’m focusing on stopping the leaks, or reducing the unnecessary outflow of money. If you can stop costly expenses, then you can save more money and (hopefully!) create the kind of wealth that supports the lifestyle you desire. On that note, let’s look at three things you can do in August for your financial health:

  • Review your withholdings and make appropriate adjustments. If you are a W-2 employee or 1099 recipient that has withholding calculated by the payer, then review your withholdings and see if you need to adjust them. If you tend to owe taxes when you file, then consider holding out a little more money as a pre-payment toward your tax liability. However, if you tend to get a refund (especially if it’s a large refund every year), consider having less money taken out of every check, so you end up having access to more of your money as you earn it. If you want some additional clarity on how to do this, I can make a guide for your convenience (just let me know in the comments below!)
  • Request lowered interest rates on current lines of credit. You may be surprised at what your creditors will do for you, especially if you have a great payment history. Requesting lowered interest can mean more money in your pocket, so ask!
  • Eliminate one (or more!) unused or underused subscription or membership. Last week’s post mentioned one way to save money on memberships, but if you have unused or underused subscriptions or memberships that you’re paying for, the best thing you can do is cancel them and save your money. But, along with canceling those subscriptions or memberships, immediately make a plan for what you’ll do with the money saved. If you don’t, that money will likely still be wasted.

A key point that is often missed when talking about saving money is finding the best way to use those savings. Most of the time, we think we will put that money into a savings account, which may grow and eventually offer a bit of a financial cushion. But the truth is, the money that is freed up by making small adjustments is often squandered. As soon as you know how much money you will save by making small changes, you should quickly designate where that money will go, and put that money where it needs to be without haste Will you put it into a savings account that has a higher yield? Get a clear focus for what that account is for, so that you aren’t tempted to spend the money whenever you’re feeling bored or frustrated. Will you put it in an investment account? Make it an account that makes it a little difficult for you to make frivolous withdrawals. Will you use it to reduce debt? Set up or modify your auto-payment, and increase your current payment account by the amount you’re saving by trimming expenses elsewhere.

Those are three tips (and actually, a fourth tip, too, if you include the savings designation idea!) that can be done during the month, to bring you a little closer to the financial condition you desire. Have a great day, and look out for more tips in the months to come!

Take Advantage of the Summer Slowdown – Major Money Tips

Hello friends! We are roughly 6 weeks post June 15th, the most recent major IRS deadline for a large group of taxpayers. This time of year is generally among the slowest for tax professionals, and the perfect time for taking a well-earned vacation. Likewise, many business owners that have non-seasonal businesses may experience a slump in activity, as well.

Aside from going somewhere lovely for a vacay, there are a few other ways to take advantage of the summer slowdown. When enjoying this downtime, it’s easy to forget that there are things that can be done now, in order to make the remainder of the year a bit easier on you. If you’re lucky, taking action now may create some additional pockets of downtime even during the busier seasons! Here are some things both tax practitioners as well as taxpayers can do during this quiet period:

  • Start compiling the documents needed to complete the next scheduled quarterly estimated tax payment (for people that do not pay taxes through wages – the next quarterly due date is September 15, 2022)
  • Contact any clients that have filed extensions, and provide a quick checklist of documents to have before completing their returns. If they need to request missing documents, this is a perfect time to do so. If you’re not a practitioner, then reviewing IRS’s records for your most recent tax year is also a good idea: as a taxpayer, it’s helpful to know what figures and income statements IRS has, so that you can ensure that you have all of the documents reported under your tax ID number.
  • Conduct a review of 2022 business activities up to this point, and identify 1-3 areas for improvement. Come up with one small, concrete step that can be taken today, to move toward that improvement.
  • Reach out to clients to express appreciation for continued support (this applies to tax practitioners as well as individuals that have goods- or service-based businesses).
  • Start and finish reading one book related to your area of expertise. Select another book or two to read during the last 4 months of the year.
  • Digitize any paper records that have been missed, and save these documents in secure ways.
  • Find one thing to outsource either for the summer or the upcoming fall and winter seasons. Set up a payment arrangement to cover the outsourced service until the end of the year.
  • Set your remainder of the year goals (September to December goals). Get a head-start on some of those goals now.
  • Review your paper calendars (or digital calendars) for the past three months. Complete anything that was inadvertently missed.
  • Create a business vision board (I’ll be upgrading mine and sharing it in a future post).
  • Write out your business vision for 2023, and use the remainder of the summer, as well as the upcoming seasons, to arrange your affairs for a smooth transition into your vision.
  • Check on the completion status for required continuing professional education courses (CPE). Schedule and take those necessary CPEs while you have free time.
  • Review your current memberships and affiliations to see if you’re taking advantage of all of the benefits of being a member. If not, start using those perks today. If the organizations you’ve joined aren’t providing enough benefit, reconsider whether you should remain a member (cancel memberships if appropriate).

I am already scheduling most of these activities for myself, because these are tasks that I have been neglecting for a while now, and I know my life and business will improve drastically once I work on these. If you’re doing any of the things listed above, let me know about it in the comments below! I’d love to hear about your plans.

Tax Changes May Be Coming – The Inflation Reduction Act of 2022

Hey dear readers! I hadn’t planned to post anything else this week, but when there’s breaking news, I have to share it!

I recently learned that the Inflation Reduction Act of 2022 is gaining traction, and Senators Chuck Shumer and Charles Manchin reached an agreement on the terms of this bill. That is exciting news, considering how Manchin had originally pushed for limited terms. Manchin’s decision to back the bill – without limiting it to the areas of concern, namely, pharmaceutical prices and continued health care subsidization – was unexpected, but an exciting turn that means this bill will be moving forward sooner than expected.

For those that are curious, there are tax implications in this bill (I mean, why else would I be posting about it?). For starters, $124 billion is set aside to fund increased tax enforcement. This means that, if the bill is passed, there will be enhanced enforcement, starting with a little over $3 billion for taxpayer services, $45.6 billion for enforcement (think revenue agents and officers, auditors and specialists, attorneys, and appeals unit employees and resources to support all of the functions), $25 billion for operations support (the other employees that work behind the scenes outside of the enforcement functions), and $4.75 billion for business systems modernization, among other things. The funding is designed to cover 10 years, so the financial gravity of these provisions can be staggered over time.

For taxpayers (individuals) this means that IRS may be getting more help in the months and years to come (the bill provides for more “direct hire authority” capabilities, meaning faster hires). This also means that the previous weakened collection and enforcement function will be beefed up, so the scams and schemes that may have slipped through the cracks before may be identified and examined faster and more efficiently (in other words, wrap up your scams now, if you have some!) For tax practitioners, prepare for more clients that want to clean up their tax records before the enforcement units have the staff and resources to pursue collections on more individuals. There is also an opportunity to offer modernization services and products once various IRS contracts become available.

Now, the bill, as it’s written, indicates that the increased funding isn’t designed to target anyone that earns less than $400,000 annually. However, I think that some taxpayers that earn under the $400K amount may end up getting caught up in the random audits, especially when the more specialized agents and officers are hired and assigned to higher dollar cases, freeing up the overall caseload for less technical (but still effective) specialists and auditors. This will all take a bit of time, of course, but it’s something to look for on the horizon.

The other tax implication discussed in this bill is enforcing a minimum corporate tax of 15% for companies that have over $1 billion in profits. The actual corporate tax rate is a statutory 21%, but these highly profitable companies often pay far less than the proposed 15% amount, because they have the best attorneys and accountants that exploit all of the loopholes currently in the tax code (which is EXACTLY what good practitioners are supposed to do on behalf of their clients, and within the confines of the law). With these new proposals, corporations that qualify will have to pay no less than 15% tax on profits. According to the bill, the minimum corporate tax rate would go into effect after December 31, 2022.

This may sound like a groundbreaking move, but to be clear, the minimum corporate tax rate was a standard issued by the OECD at the last G20 summit (October 2021), and already standard tax practice in multiple other countries. The 15% minimum rate was proposed as part of the two-pillar plan to address digital economies and the tax avoidance that is prevalent in that realm. This segment of the Inflation Reduction Act of 2022 is simply mirroring the accepted standards already in place in other OECD member countries.

Also, the minimum corporate tax rate would only affect 200 companies. So the targeted parties are small in number but account for billions of dollars in the economy. For this reason, there is already criticism from some representatives, regarding the fact that this could affect jobs. Indeed, billion-dollar companies usually employ a lot of people, so there is a possibility that the workforce may be affected. Time will tell what the overall effect will be once the most profitable companies are forced to fork over a minimum amount of their earnings.

Whew, that’s it for today! I hope this got you all caught up on the latest tax happenings, and I’ll be sure to share more of my thoughts as the situation develops. Take care, and I’ll talk to you all soon!

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Articles reviewed: Yahoo, OECD, Business Insider

Weathering Tough Times – Financial Advice

Happy Tuesday, friends! I thought this post would be ready by last Friday, but COVID-19 seized my home, and every project I had was delayed. My apologies for the premature posting!

However, I’m feeling better after a weekend of rest and intense self-care. And now, I can share this great information that I got from one of my new contacts, Lawrence V. Roberts.

Lawrence is a financial advisor for New York Life, and he has kindly shared with me an easy checklist for ensuring that you cover your financial bases. Below, you can see the tips that he provided.

The takeaways from the list that Lawrence provided all speak to one thing: preparation can take care of a lot of things, but you can’t control all of life’s curve balls. So, having consultants can help tremendously in helping you to pivot when you hit a rough patch. There are as many strategies as there are consultants available to assist you, but reviewing this list can help you identify the “holes” in your strategy, and which things you can address, as well as what things you can outsource to a consultant.

If you’re interested in Lawrence’s services, you can reach out to him using the information shown on the flyer. He can help you with planning and preparing for emergencies, especially when it comes to life insurance options. Insurance is KEY for protecting your income in case of emergency and unexpected events.

I’ll be back in a few days to go over some more tips and strategies that I hope you will be helpful to you all. I’m currently researching a few things related to the metaverse, NFTs, and other developments in the digital space. So look out for that soon!

Welcome to 2022! What Will You Create This Year?

Hi everyone! Welcome to 2022!

I hope you all have been safe and blessed this past year, and I wish upon you more safety, good health, love and wealth in the year to come.

I had every intention of posting more throughout 2021, but there were a lot of changes in my offline life that made that difficult. That main change was this –

I didn’t know if I wanted to offer financial advice anymore.

In hindsight, I realize that was a bit absurd: even if I didn’t offer my musings online, my offline family and friends would still ask me money questions, I would still take continuing education courses to maintain my license(s), and I’d still be fascinated by the worlds of money, tax and wealth. So, for me, there was no way to avoid being part of this world.

Yet, I still questioned whether this is what I wanted long-term. I had originally structured this space for coaching and consulting, but I realized that the coaching options were not my ideal setup, and consulting still didn’t resonate. Now I understand that I don’t have to do either one: I can simply share tips here and there, offer some advice, and if it feels inspired, offer options that allow a deeper dive into certain concepts.

So I’m back – on my terms, and in my power. And I’m excited to share the things that I’ve learned over the past several years with you all: I’ve got some tips for wealth creation that will be mind-blowing! I’ll resume with my posts next week, and we’ll take this dive into the world of money together.

I hope you all will join me on this journey: I’d love to share it with you all! Until then, have a great weekend, take care, and I’ll talk to you all soon!

This Week in Tax & Finance

Here’s a quick rundown of the most interesting tax and finance articles I’ve read this week:

Special taxes for soda? Well, Mexico implemented a 10% soda tax, which meant that any sugary, carbonated beverages costs consumers more than the price of a bottled water. According to the article posted by Wired, the US could learn something from how the Mexican soda tax was implemented. Berkeley, California already has a version of this tax, but, without nationwide uniformity, the effects of a soda tax are limited. The researchers remain hopeful about the US implementing something similar, but I remain a skeptic. I know how Americans, in general, feel about any tax. They also believe it is their right to guzzle toxic products, so long as said toxic product tastes good.

The takeaway? A soda tax is highly unlikely in the US, where personal freedom reigns over collective wellbeing.

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Kids are benefiting from “drugs” (marijuana sales) in Colorado. The Cannabist reports that the 2015 excise taxes collected on marijuana sales totals $3.5 million so far, with numbers expected to increase over the upcoming months. The funds are being used for school construction. There is some additional proposed legislation that will help facilitate the continued use of the excise taxes for school, but it’s very likely that the proposition will pass.

The takeaway? Since marijuana purchases in Colorado mean school funding, purchasing cannabis is now a civic duty.

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Do you find that, at the end of the month, you always end up with more month than money? Well, that seems to be a national epidemic, as the federal government managed to overspend its tax revenue by $313 billion dollars. According to CNS News, the feds collected nearly $2.5 trillion dollars in tax revenue over the past 9 months, and still managed to overspend. The largest tax collected came from individual income taxes, followed by payroll (Social Security and Medicare) taxes, then corporate taxes. Despite so many tax streams, the government still spends too much. Let’s hope that this fiscal mismanagement gets under control.

The takeaway? Bouncing checks is a national trait, and it’s detrimental on any level.

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That’s all for this week. Look out for another post this week!

A New Way to Approach Your Finances

I’ve met a lot of people that had varying financial circumstances. One of the greatest perks of working as an International Tax Specialist was that I got to see how people around the world financed their lifestyles. With the experience I got working at IRS, I found that the biggest thing keeping people from their lifestyles is their own limiting belief systems. They honestly believe that they cannot afford the life that they desire because of cost. Remember, I saw people living abroad and doing very well, earning much less than many folks here in the US.

To be honest, MOST people can live extremely comfortable lifestyles for far less than they think. The main thing that you will need is a new mindset, or a new way to approach your finances. I will write a few posts about this, as I think that it’s important for everyone to understand my personal beliefs as it pertains to finance, and how I guide my clients’ financial plans. I’m not going to spout a bunch of feel-good theory, but I will share how I approach personal finance when speaking to clients.

First, if you want to live a more quality life, you have to really examine your wants and make them high priority. The key is:

**Redefine your Wants as Needs and You Will Increase the Likelihood of Attaining Those Things**

The problem with most people is that they place their strongest desires in the Wants category, which significantly decreases their importance. I propose that instead of classifying a non-immediate goal as a Want, try classifying it as a Need. When you change how you state your biggest goals, it will tell your subconscious mind that your goals are necessary to your survival and, as with anything needed for survival, your mind will work overtime to find a way to secure whatever survival goal you desire. Here are some examples of Wants redefined as Needs.

*I want a new career
versus
*I need a career that will use my talents to the full and keep me inspired.

*I want financial security
versus
*I need to generate enough passive and earned income so that, even during tough economic times, I may continue to live my fullest life.

*I want to travel internationally
versus
*I need to explore the world, because this feeds my soul and keeps me intellectually stimulated.

When Wants are redefined as Needs, it forces your mind to devote more resources and energy to achieving that redefined goal. I think that any long-term desire can be redefined as a Need. When you make your goals a priority, you will see opportunities that may not have been obvious before; you will also find that you’re subconsciously arranging your life to work in harmony with your Needs.

Writing down your redefined Wants is extremely important. The process of writing takes an idea and makes it something more concrete, tangible, and realistic than when the thought resided in your head. I’d also suggest that every time you take an action toward a goal, make notes of things that worked and things that didn’t. You are apt to repeat a successful experience if you can replicate it.

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Please check back in the upcoming weeks for more tips on finance, as well as some very special updates from me!

The 3 Pillars of Financial Success

As a rule, I like to keep things simple. One of the principles I share with my clients is that there are 3 things- and ONLY 3 things- that need to be implemented in order to ensure financial success. These 3 pillars are the basis for every budget, long term retirement plan, and customized Prosperity Plan that I create. Would you like to know more? (I see you nodding!) Here is what you need to be financially successful:

Reduce Debt

This isn’t a discussion about good debt vs. bad debt. As far as I’m concerned, ALL debt should be eliminated as soon as you possibly can. Debt that isn’t tied to appreciable assets (like land, businesses, or even education credentials) is especially repulsive. Always aim to pay things off, pay on time, and avoid taking on debt unless it’s for something that retains its value.

So long as you are paying money to others, you will find it hard to have money for yourself and for the things that make your heart sing. Debt reduction is critical to financial success. Less debt is always the better choice.

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Earn More

There are lots of arguments made against earning more money. But, those arguments invariably come from people that complain about not having enough money. Not only do those underfunded folks bash those that earn more, but they justify their own scarcity so that they won’t have to make any changes or possibly TAKE ACTION to alleviate their monetary discomfort.

As a general rule, more income, whether it comes from wages, self employment income, or passive income streams, is a good thing. If you have enough money coming in, you automatically have access to more options. OPTIONS are all about freedom: if you have more money, then you are free to choose the things that YOU want, without fearing that you will go lacking in other areas of your life.

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Save More

This is, oddly enough, the hardest part of financial success. Putting money aside and resisting the urge to spend it has to be one of the most challenging parts of becoming financially successful. It seems that whenever someone finally gets a nice little nest egg put away, sudden “emergencies” appear, which whittle down those savings to nothingness. It’s depressing and demotivating when those “emergencies” happen, which is why some people seem to always have no “rainy day” money. They are discouraged from saving again, lest those “emergencies” deplete that nest egg once more.

My best suggestion is to put the money in an account that requires an unusual amount of effort to do withdrawal. My federal job has the option for thrift savings accounts, and it takes quite a bit of paperwork in order to do a withdrawal. That, in my opinion, is enough of a deterrent to keep me from going in and recklessly spending my retirement savings.

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Those are my top tips for achieving financial success. These are recommendations that I’ve personally implemented successfully. What are some of your favorite financial strategies/tips?