All Forum Posts by: Derrick Camber

Thanks @Mark Nolan, I appreciate the info! That is what I most likely will do.  I am going to work 6 nights as a server and work 60plus hours unerring a week to have a ton of income come in at first to build my savings.  With that new 1099 source of income at about $800 - $1k a week in income, I know I will be hit with taxes and rather fund retirement to use for rentals. 

Thanks Dmitriy! That pretty much answers my multiple questions!  I am putting the cart before the horse, and should just continue to save earned income to buy the property as my main focus instead of trying to save on the little taxes I do pay now! 

Hi Everyone,

I was reading Amanda Han's great tax strategy book and was thinking along the lines of the Solo 401(k) to put my money to get a tax deduction and use to fund deals. I am currently a W2 Wage Earner in So Cal. working as a server 5 nights a week. They offer a 401(k) and I was invested in it. I recently stopped because like most I dislike mutual funds and since I keep my tips nightly, I make so much compared to the minimum wage bi-weekly paychecks, that they had not enough money to withhold my taxes above my 10% contribution. My only reason why I was using the 401k was to get the deduction and to take a loan against my 401k in the near future for a down payment on my first property. So now I have this account sitting there for the past 2 months and need to move it somewhere. I am going to start Uber on the side so I will then also be 1099'd self-employed contracted to work for them. The main focus is I am opening a Property Management Company in my area that I use to have with a partner. I know once I do that I can do open a solo(k), what are my options right now besides the rollover IRA, or ROTH Conversion? Remember, I make $80k a year W2 as a server and have no properties yet! I do not want to invest in stocks and rather pay a penalty to close the 401k and get cash to put in a boring savings to use for my first down payment, rather than invest in stocks and potentially lose my money. I also get no employee match at work! Thanks

@Pete Perez thanks Pete! I do like your spreadsheet and method.  Since I make my money daily, I budget weekly and sometimes would get too motivated and pay certain debts off that week just so a zero balance faster and then go to low funds in the checking and have to scramble to make my income again to make the next regular bills do.   I since have now kept a cash cushion of $1k in each account and focus on one item at a time since my debt are old items with no monthly installments. 

Thanks @Meagan Ruxer, I also read that Robert Allen book, great book.  Luckily I make fast cash at work, so I am back on track.  Being a perfectionist is the hardest for us, we need to let the process take its time!  I also use the coupons at CVS next to my house, how funny.  I am looking to purchase a foreclosed duplex or 4plex within the next year in Southern California.  

The first step I would take AFTER the current amount of knowledge you have is to reach out to Dave Van Horn's team PPR.  They will fill you in on the next steps and you won't have to reinvent the wheel.  I love notes as well and PPR educated me on the process especially on my favorite the 2nd non-performing.  A better vehicle on not only the cash flow but getting at a discount and reaping the big gain on a sale. 

@Zach Fairfield, I love mint!  Been using it for 5 years!  You can change the expense "budget" items under budget.  For instance I have Food and Dining:  Fast Food, Restaurants, Groceries so I can better track where my money is going.  A word of caution, less is more!  I rather have only 5 budget items then 25 so easier to track and see the big picture instead of getting stuck in the small stuff.  So now I just have it say Food and Dining since I budget a certain dollar amount across the board.  

@Igor Messano, very true.  I use mint.com and now keep $1k in my checking as ODP and $3k in my savings for E-Fund for now.  I have a $3k in Lending Club with notes that pay interest that I just leave there.  I make fast cash nightly in tips so I always know ok I will make $1k this weekend so I already plan on where it is going before I get it!  I see the  money in the E-Fund, then I use it because I want the feeling of no debt, then I realize, crap, no E-Fund!  A repetitive circle lol.  Now what I do is have a online savings with weekly auto transfers and don't look at that account or use it.  That way the E-Fund can accumulate while I keep the $1k in the checking as $0 in my head.  I think marginal gains with weekly payments to debts one at a time until paid to now stay focused.  IN the meantime, I am constantly getting educated with 1 hour daily on this site, reading for 1 hour and listening to the podcast at the gym.  I appreciate all the advice! Great community on here!

@Zach Fairfield I agree 110%.  I will utilize debt for leverage in the near future.  My problem was my FICO score was very low from a bad past that put me behind on bills that only hurt your score like collections and a tax lien.  All of those were cause by not paying on time and letting things go.  So since then I have increased my credit score from a 495 (didn't know that existed!) to a 650 within the last 5 months.  I also rebuilt the credit by adding 2 new credit cards and an installment loan.  So for me I didn't care if the rate was 30%, I just needed to start rebuilding the credit to eventually get the low interest rates.  So in the transition part from fixing the past, is the hard part.  I am super excited to do what you are doing and use the leverage once I have the great fico score to bring in better returns to pay off any new debt which is used for investments with the tenants money.  Sometimes we just want to hear it from other people that its ok if your not putting every last dollar to some type of debt that will increase your credit score when you are also trying to save for reserves and pay your normal bills monthly besides living.  

I have made drastic progress and I know it will be paid off within the next 6 months, I am just discouraged probably because I didn't tackle all of this earlier and I think every time I pay something off, and I research the next item on the list, the amount is more or it takes longer and that gets me discouraged.  

Action is everything.  We all know how to do it, we read the books, but we just wish the action was faster, or at least I do, in the mean time!  I love this website to hear others. 

@Tony H Truong, I feel you on that!  Luckily, I work at night to make cash tips as a server, so I can afford most of my monthly bills within one week of work.  I want a clean slate as fast as I can and sometimes I overdue it and then have nothing left for me.  Paying off debt is slow boring and very depressing because you get no shiny object or interest to show the accomplishment.  It would be great if you got something for it.  So now I reward myself with a small gift to myself after each debt is paid.  It makes it more like a game now.  As soon as I pay off debt A, I get a new desk chair!  woohoo!!!