All Forum Posts by: Nancy Bachety

Here's what I would think about: Do only 1 529 and if one goes to school and one doesn't you're ok. How do you know for sure they'll both attend school or they won't get a great scholarship or they choose to stay close to home? You get a limited tax savings in the 529 (in NY it's 6 % I think up to $10K/year. Not much. Consider more cash flow now and wealth accumulation as well as your phantom deductions with properties. I would taper off with your aggressive 529 contributions. You'll want to keep it in conservative funds as your children approach college age anyway, reducing growth.

@Patrick Connell is right-on. 

Roth 401k/IRA - pay your taxes today, give up your money for decades.

deferred 401k/IRA - give up your money for decades, pay your taxes tomorrow.

@Rich Hupper you are very wise to be asking these questions. There is another thread in this forum asking a similar question.  You may want to check it out.

Let us know what you decide.

@Nghi Le

Great idea. I teach financial literacy to 11-13 year olds. On Monday, I asked my kids if they thought they could learn about money from adults. They all said YES, from mistakes to good money management. Next I asked: do we learn from them? They said NO. Not only that, when they ask about money, they are told it's none of your business, it's private, enough to feed you, not enough. I use a wonderful FREE resource that comes with great resources, lesson plans and it's comprehensive. You workshop will be hands on (this is tech-driven) however the curriculum guide is invaluable and free. Everfi Vault is for middle school, Future Smarts is for older and they have younger too. At the very least, you can gather an agenda and a scope and sequence. I'd love to help you if I can.

@Scott Trench

I would lose my job if taught to this philosophy (quicker than if I taught about abstinence or condoms). Ironic as it is.

"People need to have it drilled into their heads that working for money for their whole careers is a bad financial plan, and that they should instead be working as hard as possible for money to invest or to build assets so that they can get on the other side."

Great thread and answers. The reason it's non-traditional to invest in buy n holds vs 401k is because there are no 'got real estate' commercials but plenty of banks, brokerages and financial advisors marketing endlessly. They are the middle-men who stand to profit. No middle-man in REI, no media attention, and little-to-none mainstream news coverage.

Therefore, that makes it appealing to the masses who think and are led to believe it's the only way to exist in retirement.

The turning point for me to stop contributing the max of my own money to my poor 403b plan just happened this year (in the land of public education, we have to use the equivalent of a 401k called a 403k plan. These plans were just exposed in a 4 -part series by the New York Times in June by Tara Siegle Bernard about the excessive fees and expenses). 

REI have known this for years and it's no secret: Your buy n holds generate income streams tax free potentially and you're left with an asset. Your Roth 401k/IRA is obtained with the same after-tax monies and passes tax free but you are not making passive income over the years, you have very limited options, and control.

From what I see, REI can offset income with RE expenses and thereby get the same if not better tax-saving benefits as with a deferred tax savings account.

Thank you for your answers. So far, so good. Except now my question is "Should I expect to pay the self employment taxes, even though I'm employed full time and get a w2? Can I offset that somehow?

Hi - this is a forum I just discovered.

We're about to buy our first flip and expect gains this year, over and above our two W-2's. Can anyone speak of the losses doing a flip can use to minimize the tax consequences? I want to factor that in to the deal analyzer. 

 I know they'll want to tax it at the higher capital gains rate as opposed to the lower rate in a buy and hold scenario. 

Thanks for any advice. We haven't used a business entity as a tax saving vehicle until now.

Hi @John Cohen

Please add me to the list. Can you update this meetup on the metup forum for others to see? 

Thanks.

nbachety@yahoo.com

@Maxwell Howard

Since you are open to house or condo and open to NY (big state with price points across the board) and NJ. you might want to rent first. Too big of a deal to lock yourself down after visiting for a week unless you are very familiar with the tristate area and know what you want, imo. Closing costs are ridiculous here too, maybe like CA, idk though. Good luck. 

@Shawn Ackerman

As a wholesaler in from Long Island, do you wholesale in Milwaukee AND NY? or do you just invest in Milwaukee while wholesaling in NY? 

@Steven C. Suarez

You can do both. First it's a mindset, (goal) then almost by nature, every step you take takes you to it. My mindset is minimalist. Therefore, we downsized, gave away/sold/threw away lots and lots of good 'stuff'. Reminding yourself that you didn't waste money when you threw it away but when you bought it helps you with that. We have no consumable debt and haven't for years. Enter Real Estate Investments. After reading up on Rich Dad's philosophy that W-2's like me support the govt. with all my taxes, my mindset kicks in here and makes me focus on keeping my hard-earned tax money as MINIMAL as possible. I can't do that with a W-2 or my retirement accounts. 

What I don't read enough about here is just this idea: RE allows for deductions and expenses that are antagonistic to 'the less expenses the better' mindset. That has changed once I understood Robert Kiyosaki's perspective and rationale.   

The ironic part is I have to BORROW $ from my retirement account now so I can begin to really invest in RE and grow tax-free passive income. 

Great question, Steven. I'm a fan of Mr Money Mustache's ideas too. Reducing spending doesn't necessarily reduce you taxes though. Real estate does.

@Dave Van Horn

Is there a short answer to what are performance notes and how they fit into a REI portfolio?