Pay No Taxes Like Donald Trump

I was talking to my brother-in-law about getting started investing in stocks and he asked me about how taxes would be treated. He understands the benefits of using pre-tax money in his 401(k) but wasn’t sure how taxes would work on after-tax money that he may decide to invest in the stock market.

Which made me think about taxes.

And after these elections, I’ve been thinking about how to pay no taxes like Donald Trump! I wanted to write some quick tips on avoiding a high tax burden. I have had an effective tax rate in the low single digits for the past couple years and thought I would share some thoughts on how I do it.

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401(k) Discussion

I was recently talking to my older brother about investing in our 401(k) and was hoping to encourage him to invest more in it. I am a finance blogger and employed in the field of finance so I figured I could offer some thoughts from the things I’d been writing about recently and convince him to increase his savings.

I didn’t realize that he would actually be the one encouraging me!

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September Index Update

I have returned! Yes I know I have taken a few months off from posting content but duty calls! The new job has been a great challenge and we have been having wonderful family time lately with our immediate family and with extended family. Trips to Florida, Ohio, and the Carolinas have been great.

Thankfully we missed Hurricane Hermine and ended up having a great week at the beach which included tremendous waves. I never get tired of the Outer Banks of North Carolina.

But now for an update of my Net Worth Index!

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Allocation Shift

I wanted to give a quick update on some things I discussed in the post where I discussed my net worth goal. If you remember, I didn’t reveal the dollar amount of my net worth goal but rather created an index to measure the change in my net worth. This will allow me to share my goal and progress without having to reveal the details of the actual dollar amounts.

I also discussed in that post my net worth allocation. I don’t always see other net worth posts reveal this so hopefully that will be an interesting thing to read about as well. Looking forward to the feedback on that.

I wanted to talk about the allocation in today’s post.

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Advice I Wish I Had When I was 18

I am currently on vacation in and was discussing my blog with some family and friends. One of the questions that came up as we were discussing personal finance and investing was, “what is the advice you would have wanted to hear when you were 18?”

This is a really great question. I think there is a big opportunity for those of us who have experience investing to share what we have learned and the painful experiences we’ve gained with the younger generation.

In fact, about five years ago I had an older and wiser person share with me some concepts from Dave Ramsey that were extremely helpful to me.  Even as a CPA, I benefitted from getting an understanding of the value of living debt-free and the value of being disciplined with my finances.

So here are the pieces of advice I wish had been shared with me!

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Why Only a Million?

Years ago I read a very helpful article about financial goals and the author said that focusing arbitrarily on saving one million dollars was ridiculous. What? Isn’t that the goal of everyone who is saving and investing? Most of the financial literature we read is geared towards saving a million!

But why?

The author’s point was to actually think about what things make you happy and how much money you would need to buy or maintain those things.  You then add it all up and that is your financial goal. This may only add up to $700,000 or even less if all your debt is paid off.

But I actually want to take a different approach.

Why Only One Million?

If one million is good why not shoot for more? The longer you invest and the more disciplined you are the more likely you are to reach much more than one million dollars.

And to me that makes a lot of sense. The one million dollar goal is more suited to getting you out of a job that you don’t like. That seems to be the big fad right now. But there is a better way!

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