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Old 04-02-2008, 04:57 PM
 
402 posts, read 937,773 times
Reputation: 117

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When you mention cost basis what do you mean? I hope Im not asking too many questions, but you seem to want to help pple in this area...

As to the millionaire next door...I read that book and then I read the book millionaire women next door and the first example of a millionaire in that book was a women that was a liberian....she became a millionaire from just being a liberian! It talked more about her spending habits and her investments. So, this can be achieved and it depends on how you spend your money today vs saving. AS we know many americans are in debt and living paycheck to paycheck...I don't believe in excuses as you have shown you can make it earning less than $100k per yr. Geeez, Warren Buffet lives in the house that he bought over 60 years ago...I am using him as an example because most milionaires in the US are not driving these luxery cars. What I have learned is that its not really how much you make, but how much you save, no matter what your income is. Sure, I can go out and buy a (you can too) $100k on a car if I want too, but what does that do to my net worth. Knowledge is power...I hope that some pple that are reading this can gain from your exp. For example, spend more time reading, CPA, CFP rather than a pair of shoes.

And, BTW the $100k that we can spend on a car did not come overnight. I would love to buy a home that have has everything, but I choose to live a moderate lifestyle considering retirement and having enough buffer for emergencies. You may not have a million dollars by the time you retire, but you certainly can retire comfortably the way you are living now...

I have to say though that I have a shoe fetish...so do I have splurges yes, but only after my son left home and I can afford it....

I am not saying these things to offend anyone, but hope that they will gain some knowledge as retirment is a reality that I had to face, which is not fun, but a necessity...
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Old 04-02-2008, 05:02 PM
 
26,591 posts, read 52,323,935 times
Reputation: 20438
Don't forget the folks that own several rental homes and are now moving back for 2 years and then selling and pay no tax on gains up to 500k..

I have two very good friends that have been doing this... they move into one of their rentals about every 3 years and then sell and move into the next one... he told me that he has 3 to go... and so far it has netted him over 1.5m tax free...
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Old 04-02-2008, 06:07 PM
 
402 posts, read 937,773 times
Reputation: 117
Quote:
Originally Posted by Ultrarunner View Post
Don't forget the folks that own several rental homes and are now moving back for 2 years and then selling and pay no tax on gains up to 500k..

I have two very good friends that have been doing this... they move into one of their rentals about every 3 years and then sell and move into the next one... he told me that he has 3 to go... and so far it has netted him over 1.5m tax free...
Yes!!!!! CPA told me that today!!!! And if you have two homes as long as you can prove that you live in one for over 6 months then you file tax in that state (great for pple that work out of their hse). For example, I live in NY, but I file my taxes in TX...is it worth buying a small unit for the tax implications of living in NYC? I say absolutly yes!

These are all advantages that you can take! I would love to hear more.

I have friends that own rental units in 3 states or more and that they like to visit...their travel expense....they file...as a business expense...not personal travel.

I bought a home for my child that is in college...rather than pying rent....his condo i purchased for less than $80k...well worth. many loopholes...i would love to hear more about how we can save in taxes....!!!!! HELP!!!!
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Old 04-02-2008, 06:20 PM
 
402 posts, read 937,773 times
Reputation: 117
Quote:
Originally Posted by Lakewooder View Post
This is the way - I bought a duplex in 1983, rented it out and lived with my parents (I was 23-24) then later I moved into it -- bought another home every 2-3 years and now I have 13. I put nearly all of them on short notes, 5-7 years (killer payments) and now I am 50 and the last two will be paid off in 3 1/2 years. I have another one with 14 months left. The key was that I bought in an area I knew would come back and appreciate.

I had to make some sacrifices, always moving to the worst or most-trashed out house, doing without central air - or sometimes even adequate heat, dishwashers, washer and dryer, nice appliances (my tenants had those) etc.

I thank God for my Depression-era parents who taught me the value of a dollar. I have not had a completely ascetic life, I go on cheap air tickets (AA Netsavers i.e.) for mostly weekend vacations.

I drive a 1995 Ford F-150 pickup which was paid off in 1999. BTW it is the "Millionaire Next Door" vehicle of choice!

I can retire from 'the real job' at any time, but I think I will probably work until 55. Hey you can't ever have enough, right (BTW I am maxing out the 401k, have been for 20 years) ? The question is - when time grows shorter than your desire to work...
....as I am tired of those that look down on me because I don't own the beautiful home or car....but my net worth is much more than them. BTW, I do okay...in the home area...as I bought a home that no one wanted because the home was considered not livable, but is in one of the best areas here with a millione dollar view! It is taking some work...do the work as much as I can on my own. In other words think on dollars rather than materialism. I spend over $1k on my CPA because its well worth gaining knowledge to leverage where you want to be. As I tell my son I am not Paris Hilton....j/k

I am not saying that everyone is like this, but what I have learned is that when I was in my earlier years I would never think about how I could leverage my money until I learned that knowledge was power. If you have $10k in the bank you can turn that into much more...more power than you think. A book should be written about this....

It's the fault of society....they should be teaching this in school...hmmm...another thought.
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Old 04-02-2008, 07:23 PM
 
444 posts, read 824,266 times
Reputation: 654
Quote:
Originally Posted by forest beekeeper View Post
There is no method in existence, to give 100% of all USA residents high-quality, cradle-to-grave, complete coverage, free medical care.

I have lived in other nations where they do operate nationalized medical coverage. The old are only given pain killers, no surgeries and no life-saving procedures are allowed. Everyone else is treated like cattle. Good doctors who have valuable skills leave those countries and go elsewhere so they can earn high incomes; leaving the mediorce doctors there on the government's salary.
In Canada, my mom had to wait two months from the onset of her initial symptoms to get the cat scan that showed she had a malignant brain tumor. The radiology techs were on strike.

I have a friend in Canada whose father was diagnosed with prostate cancer, but was put on a looooong waiting list for treatment because his was a "low-priority cancer".

If you are in immediate danger of dying (like in the next few minutes), you go to the top of the list for treatment. That's socialized medicine...bare bones. It works just fine as long as you're healthy.
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Old 04-02-2008, 07:30 PM
 
402 posts, read 937,773 times
Reputation: 117
Quote:
Originally Posted by txmom View Post
In Canada, my mom had to wait two months from the onset of her initial symptoms to get the cat scan that showed she had a malignant brain tumor. The radiology techs were on strike.

I have a friend in Canada whose father was diagnosed with prostate cancer, but was put on a looooong waiting list for treatment because his was a "low-priority cancer".

If you are in immediate danger of dying (like in the next few minutes), you go to the top of the list for treatment. That's socialized medicine...bare bones. It works just fine as long as you're healthy.
Yes, this is true...I have talked pple that lived in Russia and etc...
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Old 04-02-2008, 07:31 PM
 
Location: southern california
55,668 posts, read 74,646,551 times
Reputation: 48185
yes. FYI 38% of adults under 30 live with parents. 31% of grandkids live with grandparent (aarp) there appears to be no finish line for many.
the lost boys of never never land that never grew up, kidults.
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Old 04-02-2008, 07:53 PM
 
Location: Forests of Maine
30,687 posts, read 49,469,539 times
Reputation: 19134
Quote:
Originally Posted by NYLifes2shrt View Post
When you mention cost basis what do you mean? I hope Im not asking too many questions, but you seem to want to help pple in this area...
You buy a property for $1,000, that is your cost-basis, how much you have in it.

Then it depreciates and loses $100, you have suffered a $100 loss against your taxes and that $100 needs to be subtracted from the cost-basis; leaving your property worth $900.

If it continues to depreciate $100 each year, then after 10 years it's worth will reach zero.

It you then sold it for $500, you have made $500 profit, because you sold an item worth zero for $500. You made a taxable profit.

But lets say that each year, as an item depreciates down, that you also find ways to put money back into it. Making improvements, you put $20 here and $40 there. If you put $100 back into that item each year, then it's cost-basis goes up by $100.

So depreciation [which is required by law] brings the cost-basis of property down each year, and is a tax write-off.

And improvements bring the cost-basis back up once again [and are also tax write-offs].

That $1,000 item can depreciate each year, and you can put capital back into it each year. You can drive it's cost-basis up or you can let it go down, or you can maintain it at about level.

When you sell that item, if you sell it for more than it's cost-basis then you made a profit that might be taxable. If you sell if for less than it's cost-basis then you show a loss.

Residential Rental depreciates straight-line method over 27.5 years. With no capital improvements after those years it's cost-basis would be zero. You could sell it for exactly the same price that you originally paid, and it would show a profit.

Or You could have driven the cost-basis up each year, perhaps doubling it's cost-basis, so that when you sell it at twice it's original price, you actually do not show a profit [because you sold it for exactly it's cost-basis].

Depreciation is a write-off. Repairs are write-offs. Improvements are write-offs.




auribus teneo lupum
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Old 04-02-2008, 07:56 PM
 
Location: Forests of Maine
30,687 posts, read 49,469,539 times
Reputation: 19134
Quote:
Originally Posted by NYLifes2shrt View Post
... As to the millionaire next door...I read that book and then I read the book millionaire women next door and the first example of a millionaire in that book was a women that was a liberian....she became a millionaire from just being a liberian! It talked more about her spending habits and her investments. So, this can be achieved and it depends on how you spend your money today vs saving. AS we know many americans are in debt and living paycheck to paycheck...I don't believe in excuses as you have shown you can make it earning less than $100k per yr. Geeez, Warren Buffet lives in the house that he bought over 60 years ago...I am using him as an example because most milionaires in the US are not driving these luxery cars. What I have learned is that its not really how much you make, but how much you save, no matter what your income is. Sure, I can go out and buy a (you can too) $100k on a car if I want too, but what does that do to my net worth. Knowledge is power...I hope that some pple that are reading this can gain from your exp. For example, spend more time reading, CPA, CFP rather than a pair of shoes.

And, BTW the $100k that we can spend on a car did not come overnight. I would love to buy a home that have has everything, but I choose to live a moderate lifestyle considering retirement and having enough buffer for emergencies. You may not have a million dollars by the time you retire, but you certainly can retire comfortably the way you are living now...

I have to say though that I have a shoe fetish...so do I have splurges yes, but only after my son left home and I can afford it....

I am not saying these things to offend anyone, but hope that they will gain some knowledge as retirment is a reality that I had to face, which is not fun, but a necessity...

Well said
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Old 04-02-2008, 07:59 PM
 
Location: Forests of Maine
30,687 posts, read 49,469,539 times
Reputation: 19134
Quote:
Originally Posted by Ultrarunner View Post
Don't forget the folks that own several rental homes and are now moving back for 2 years and then selling and pay no tax on gains up to 500k..

I have two very good friends that have been doing this... they move into one of their rentals about every 3 years and then sell and move into the next one... he told me that he has 3 to go... and so far it has netted him over 1.5m tax free...
To 'convert' rental property only requires 181 days.

I have done so a few times.

Also there is a 1995 law that a conversion will wipe away for you.

Also you can refinance a rental, use the money for purchasing a retirement home and then sell the property at a loss, and Ooops not pay taxes.
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