The the rich get richer and the poor get poorer.
There are many financial instruments that help us as taxpayer to reduce our tax burden. The most common are IRA’s, 401k’s, 403b’s and a multitude of others. However, these all come with hefty penalties (if money is withdrawn-with few exceptions), limited investment options, and a handful of fees. Even though these products are great. As they are easy to start and they have no contribution requirements. They do have contribution limits. Below is a link which details these limits. They are not too clean cut since they vary by age, taxable income, employment status, and other requisites.
The difference between tax avoidance and tax evasion is the thickness of a prison wall.
Now the fun! First, we should ALWAYS pay all of our required taxes and comply with the tax laws. We can still work with the system and use it to our benefit. When investing in most financial instruments (outside of a retirement plan) one must generally pay taxes on the capital gain of the investment. That is, the sales price minus the basis (cost of asset+certain expenses) equals the taxable gain.
Example: If you hold the following investment for LESS than a year. That is, 365 days or less from the date of purchases.
Stock Basis (cost) Sale price Gain or loss
Apple $500 $600 $100
In that scenario, you would add the $100 to your ordinary income and pay the appropriate tax based on your tax bracket 10%-39.6%. Keep in mind that all the tax that you will have to pay is the income tax and not the social security and medicare tax. If this transaction occurs in a qualified retirement account, then there is no tax on that gain. If you hold the same investment for MORE than a year. That is, 365 days or more from the date of purchases.
Stock Basis (cost) Sale price Gain or loss
Apple $500 $600 $100
In that scenario, you would add the $100 to your capital gains and pay NO income tax if you fall below the 15% tax bracket. Any one who’s tax bracket is higher would pay the 15% - 20% long term capital gain tax. This is a great opportunity to grow your wealth with less tax. Even better, if you NEVER sell your investment, then you’ll never realize a gain and therefore never pay a tax.
This is what Warren Buffett and other famous investors do. They buy, rarely sale, and seldom have to pay the capital gains tax.
In part II, I will be covering additional and better ways of avoiding taxes.
The information in this website is not offered as legal or tax advice. Examples of tax benefits are based on the stated IRS Guidelines and on other assumptions which may not apply to your personal situation. We suggest that you seek the advice of your tax advisor, attorney, and/or financial planner to make certain choices for your personal circumstances. All material is presented solely as educational information and is not a solicitation or offer.
The holidays are here! This is a time of the year when we experience much mental pleasure.
For the many, the Christmas trees have been completed, the interior and exterior lights are up, and the gifts are beginning to crowd your living room space. In short overall happiness is high amongst many of us. This is largely due to the fact that we get to enjoy time with our friends and family while others take a break from work.
Well, I most of those situations don't apply to me. My house lacks a Christmas tree, my family invites me to their parties but I tend to show up after my meditation sessions and after most of my family members have left. I also, have not decided whether putting up Christmas lights is actually a good economic decision. I cannot figure out how many UTILS I will obtain per each individual light that is on. So I'll leave it there. Finally, I've been consumed by a property that I've recently acquired which has made me work through much of the holiday season.
With all of that being said, within our month or so.. We will be receiving most of the required forms which are needed to complete and pay (April 15th) our onerous income tax to Uncle Sam.
To some, this is a time in which their finances become more stable because they receive large refunds from the overpayment of taxes or from credits. Often, they are able to either pay off heavy debts or they add to their savings accounts. Both which I see as a great thing in one's personal finances.
To others, this is a time that brings much stress and anxiety because they must begin to prepare for the filing of their complex tax return. Below are some link which will help you in gathering the documents needed to begin to prepare for this tedious process.
Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.
Another simple concept that we can work on a few minutes a days is our perspective. This can be towards things that affect us directly, towards others, and towards life overall. By shifting our perspective in a direction in which we can allow for certain things to have a lesser effect in our life, we can make ourselves become a richer us.
For example, working on our perspective even for the small things, will have a great effect. When we allow the small things to remain small, we’ll allow for free ram space in our brains to process highly complex or highly important decisions in a much more efficient and effective way. This may then allow us some free time to be able to develop and improve our perspective in other things and the cycle continues, always compounding on itself.
“How can I clearly see what’s wrong with someone else, and then look at myself as though I’m standing in front of a fogged mirror?”
In a business book that I read several years back from Jim Collins titled “Good To Great” there was a chapter which has always stuck in my mind. This was Chapter 4: Confront the Brutal Facts (Yet Never Lose Faith). Some people live in a deep state of delusion in many aspects of their life. I too have been in this situation, and I often catch myself in it from time to time. It’s state of mind which aims at removing guilt from our lives, it helps us in dealing difficult things and allows for our mind to become distracted with things that simply aren’t true.
By accepting life’s brutal facts, which often include our flaws, we can begin to work on these. By working on these, we may become a better person overall. By not being in a delusional state of mind, we may also allow for our mind to remain at balance. This balanced state will help us make better decision making power because we can now see the issue for what it is and not for what we want it to be.
I hope that you all become to work on these immediate ways to become a wealthier you. I am quite sure that there are many more ways in which we all can become fuller human beings!
Importance of Chewing
A simple practice that doesn’t take much energy and that we can do continuously is to chew our food fully. When it relate to our health it’s not just what we eat but how we eat. Unknown to many, digestion begins in the mouth. Contact with our teeth and digestive enzymes in our saliva begin the breakdown of food much before the food touches our intestines. Our current fast paced life’s has ruined the whole eating experience. We hardly acknowledge what we’re putting in our mouths. We eat while distracted. Often, while we’re working, reading, talking and watching television. The leads us to swallowing our food practically whole. On average we chew each bite only eight times. It’s no wonder that many people have digestive problems.
There are many great reasons to slow down and actually chew your food.
This kind of quiet can be disconcerting at first, since we are used to a steady stream of distractions and demands from others. But as you create a new habit, you will begin to appreciate eating without rushing. You have to eat every day why not learn to savor and enjoy it?
Food To Try This Week: Quinoa
Consider eating some quinoa. This is a nutritional powerhouse with ancient origins. It was originally cultivated by the Incas more than 5,000 years ago; they referred to it as the “mother of all grains.” It contains all nine essential amino acids, making it a great source of protein. Quinoa is also high in magnesium, fiber, calcium, phosphorus, iron, copper, manganese, riboflavin and zinc.
While quinoa is widely considered a grain, it’s actually the seed of a plant called Chenopodium or Goosefoot, related to chard and spinach. Quinoa is a gluten-free seed and has a similar effect as other whole foods in helping to stabilize blood sugar. It has a waxy protective coating called saponin which can leave a bitter taste. For best results, rinse quinoa before you cook it or even soak it for a few hours or overnight. When cooked, it has a fluffy, slightly crunchy texture. Try it in soups, salads, as a breakfast or as its own side dish.
For quinoa, and whole grains in general, the majority of digestion occurs in the mouth through chewing and exposure to saliva. For optimal nutrition and assimilation, it is vital to chew your grains well and with awareness. A great meditation is to find a calm place, without distractions, to sit down for your meal. Make it a habit to chew each bite 20 times or more. See how this simple practice can help your digestion and overall focus for the rest of your day.
Recipe of the Week: Quinoa Pilaf
Prep Time: 3 minutes
Cooking Time: 30-40 minutes
1 cup quinoa
2 1/4 cups water or stock
1/2 cup dried cranberries
1/2 cup walnut pieces
1/4 cup chopped fresh parsley
pinch of salt
1. Rinse quinoa in a strainer.
2. Boil the water and add quinoa and salt, cover and reduce heat.
3. After 15 minutes add cranberries and walnuts to top; do not stir.
4. Cook 5 minutes more, until all the liquid is absorbed.
5. Remove from heat, add parsley and fluff with fork, cover and let sit for 3-5 minutes and serve.
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
We all have heard of the expression: "Rome wasn't built in a day." That statement is true, however in relative terms, it was dismantled in one day. Many may disagree with this, and argue that instead it fell overtime and that "it" was its own greatest enemy. For now, we’ll leave that debate to the historians. However, the collapse of this empire serves as a great analogy for our lives. I’ll use it in the aspect of our habits. Wise habits are difficult to create in one's life. If we refrain from continuously practicing certain actions with great volition, we can never develop such habits. And all the effort will be a sunk cost.
I hope that I have not disappointed you due to the catchy title and the difference in content. No, this post will not be about growing your bank balances, in a day. I don't sell that "JUICE" and I'm definitely not the Wolf of Waukegan. :)
Nevertheless, to quickly build wealth it necessitates virtually nothing. You merely have to pause your actions for a few minutes and breathe. Once you’re somewhat stationary, do your best to stay that way. In these minutes of physical calm, your mind will remain energetic and even more dynamic than ever before since the mind fears itself.
This is the time in which you may have a good potential to lead (not control) your mind in a direction which will help you build good habits of mind. Habits which will help you become a person of a well-developed character.
Gratitude unlocks the fullness of life. It turns what we have into enough, and more. It turns denial into acceptance, chaos to order, confusion to clarity. It can turn a meal into a feast, a house into a home, a stranger into a friend.
I believe that a person of character is one which has the ability to demonstrate great gratitude. Especially for the simplest of things. This can be towards life in general, towards others, etc. Being gracious doesn't require much energy. It simply requires a certain amount of mindfulness and openness to certain experience of life. But habitually, we're so occupied with making sure that we always remain occupied. I'm somewhat guilty of that.
Yet, if we become strong enough mentally. We may be allow ourselves a minute or two to develop the habit of being continuously gracious. From here, other good practices will follow. These may include one's generosity towards others, a more optimistic perspective on life, wiser conduct, etc. This will greatly vary on a case by case basis. Yet it will definitely have a great effect on our karma (actions). Our karma, in my opinion is all that we "have" in our temporary experience here.
Don't get me wrong, I admire elegance and have an appreciation of the finer things in life. But to me, beauty lies in simplicity.
In the identical manner that interest (financial) compounds over time if allowed to grow by not touching it, so will our good karma. When our levels of gratitude have been expanded we may cultivate great appreciation for ourselves and others. The consequence of this will definitely show in our states of mind which may also force us to value the most precious resource which is our time.
These better states of mind may very well lead us into seeking the following:
To be continued in part 2..
If you take action now and begin practicing the following simple principles, you may very well be on the path to less financial worries, more leisure, creating wealth, and contentment in your overall life.
Pay Yourself First
A fool and his money are soon parted. -Thomas Tusser *don't be that fool*
From every paycheck, similar to how you pay your taxes. Ask your employer (if possible) to deduct at least 10% of your gross paycheck and to deposit them on a savings account. Preferably one in which you will have a very difficult time accessing. For example, a small bank that has few branches and that is far from where you live. You can also add an additional barrier by putting a withdrawal limit. All of these steps will likely help you not touch the money.
Another great option is to begin a 401k with your employer if the offer it. Here you’ll have tax benefits, employer contribution benefits, and also some barriers (penalties) to limit you from touching it. An IRA is another option, that may help you lower your present tax burden now or later.
Use The Rule Of 72
Simplicity is the ultimate sophistication – Steve Jobs *let's always keep things clear and simple*
Hopefully within a year or two, you’ve accumulated some savings. For example $10,000 or any amount other than $0. At this point, depending on your income and other variables, you’ve realized that your lifestyle has not truly been affected by this easy form of saving.
However, the psychological benefits which you are now experiencing, are priceless. You no longer worry about most emergencies that may arise, your bills being paid late, etc. This along the understanding that savings is actually simple are priceless benefits.
Now or eventually when you do have savings, you can either waste it, leave it under the mattress where it will likely lose value due to inflation, or invest it wisely and see it grow.
I cannot give investing advice but let’s say that you’ve found a way to grow your $10,000 at a 10% rate per year. Well, at this rate you can use the rule of 72 to predict how many years it will take for your initial investment to double. That is 72/10% = 7 years 2 ½ months. Now that sounds like long time, and it is. However, the magic happens when the growth is compounded.
"SLOW DOWN, EVERYONE, YOU'RE MOVING TOO FAST"
Who doesn’t feel as if there aren’t enough hours in the day? We rush through the day, running here and there, and end up not only physically exhausted but also mentally. Somehow our days are constantly full of duties and obligations, this busyness has begun to build up and has now become our lives. We spend our time doing things that in a way, we are forced to engage in, things that deep down inside we don't want to do, yet feel like we should. We’ve come to believe that somehow being part of this rat race, will make us reach some sort of peace of mind or contentment.
Truth is, life on Earth is brief we are essentially expendable, and our time is too precious to be used as if life were a sprint. If we want our lives to be in a healthy state of balance. We need to lessen our load and increase our down time. This means planning less in a day, prioritizing those things that makes our life enjoyable and take the time to listen to our bodies and its essentials.
We need to learn how to disconnect from that fear that at times makes us believe that if we can't get something done, bad things will happen. At times stress will build up because we will feel unaccomplished and unsuccessful. Unfortunately these things will build up and ultimately decrease our quality of life and your true performance with your projects at hand. This stress will also debilitate other physical aspects of our lives. The nervous system will responds by releasing a flood of hormones, including adrenaline and cortisol, which will rouse the body for an emergency action. This also known as the flight or fight response. This natural protective mechanism is not a healthy way to approach most situations in our life’s, since we are no longer living in the jungle with tigers. However, when properly activated this mechanism will actually help us regain focus, increase energy and awareness under emergency situations. It is the response that may possibly save our life at times. But what happens when we encounter stress overload? Well our body has a hard time trying to interpret daily a stressor versus life threatening situation, so when we constantly experience high levels of stress without taking some time to evaluate the situation. It leads us to an array of physical and emotional problems such as:
I know this may be easier said than done, but it’s not impossible to do. The following are some tips that can help you slow down and alleviate that overwhelming feeling in your life.
Remember it takes discipline to break some deep rooted habits, so start slow, it’s not a sprint it’s more like a marathon. I hope that by reading this information and following this tips you may find some self-control in your life!
I'll leave you with this fun Kale recipe that I promised you and don't forget "the best workout starts in the kitchen"
Spicy Kale Chips
Wealth is the ability to fully experience life.
Henry David Thoreau
By now, hopefully we have taken a deeper look at our finances and our thoughts. Hopefully these two things may be leading us to be more mindful about our financial decisions. This, will helps us get things in order and under our control. Similarly we may finally have the ability live through life with less uncertainties and much more contentment.
At this point we may have the ability to develop a philosophy about money. My philosophy about money is simple. Money is just a tool, money leads to free time. And you don’t need much of it to live a very comfortable, rich life. Similar to a hammer with which you can build or destroy buildings. To build the most magnificent of structures. It requires blueprints, architects, time, patience, and a considerable amount of attention to detail. However, to destroy a similar building all that you need is a few tools, less time, and little to no thought. Focus on building not destroying.
Enjoy the Jon Jandai TedTalk - Life is easy. Why do we make it so hard?
HOW I LIVE
Greed is not a financial issue. It's a heart issue.
One of the main things that I have done in my life has been to minimize the things that I have. In the past three years, I have forced myself to only buy the things that I will use. Often, when I purchase a new item, I force myself to remove an item that I no longer value or need. This has had the following positive consequences:
So now that you have learned a little bit about the history of money, how to manage your money, how you can now begin to see money from a different perspective and hopefully you have become aware of the direct effect that your finances have on your health, in your psyche, and in your lifestyle!
It doesn't end here... Let’s not forget that we must always continue to seek further wisdom. By now, you should have the adequate time to do so. Keep life EASY! : )
Enjoy the Marty Stano Ted Talk - Adventures with Minimalism and Happiness
The Detox - By Jahaziel Rueda
What does the word Detox mean?...well let's see ...
Detox short for Detoxify means:
To free from an intoxicating or an addictive substance in the body, or from dependence on or addiction to such a substance.
The reason why I decided to write this is because... every day I see and hear people talking about some ridiculous crash diet or supplement that magically detoxifies the body and to be honest with you I believe that this is load of crap!! Excuse my French!!
We all know that the liver is an amazing organ. One of its primary roles is the detoxifying process which is done every day quite smoothly unless you don’t poop or pee!! lol! And trust me it does not need the help of some ridiculous pyramid scheme supplement or store bought supplement that has NO scientific base on detoxifying... Many of these unethical companies state that their product “works at cellular level." Well I’m here to deliver the good news that: Water ALSO works at a cellular level so does almost all of the things that we eat, irrespective of their nutritional value!
I need scientific proof (such as peer reviewed studies, double blind studies, etc..) that demonstrates that the product or diet actually works. This is why research in our field of nutrition is never ending. My role is not to provide people with a "silver bullet." Instead, I am here to educate and inspire people to adopt a healthy lifestyle. This can simply by eliminating the unhealthy foods and introducing nourishing foods back into their lives. I know it's easier said than done but with proper education, understanding and support you can accomplish these things and much more.
These detoxifying crazes tend to start at the end of a bad weekend or as a new year’s resolution. We tend to avoid things such as fat, sugar and alcohol and a few days later your back at it again. Most people believe that by avoiding all these things they’re undoing what they did a week or a month ago. However, their impermanent good behavior is NOT undoing all the terrible choices that have already occurred...
Many medical experts agree on the fact that most people fall for these things because of desperation and because detoxifying is something that is easy to grasp and comprehend. However, behind this industry and its products lies a lack of understanding of Human Physiology. To them, education and bio-individuality, is irrelevant, as their goal is to create a nice catchphrase for the masses to “understand” and a one size fits all product to sell to them. Remember.. it’s about the bottom-line.
For example let’s take a look at antioxidants or "Detox tonics" as they call them that which by the way have very limited and inconclusive results and never double blind studies, they often claim that they contain high level of antioxidants to help neutralize free radicals in your body. However, a high level of Free radicals is made in the body and can cause cell and DNA damage.
The body makes its own antioxidants using the food in our normal diet Additional antioxidant are remove by the kidney, in other words you end up with really expensive pee!
Again, I have little interest in what my client’s five day goals is, or how much weight has been lost due to calorie deficit diets. Instead, I am truly interested in what effect I may have on them for the following 30, 40, 50, or 60 years of their lives. This nation is on a crisis of obesity and other lifestyle causing diseases. So please stop tricking yourself into a false sense of security. This is a pattern of behavior that will never stop unless you face it head on!! You guys out there are amazing human beings that are able to do extraordinary things you just don’t know it yet! You simply have to dig deep and find your authentic self. We've become so accustom to the notion of the more is better, and hope. There are no more leaders, only followers waiting for the next big thing to be sold to them. I say that it’s better to stop hoping and instead to start taking action.
With that being said, please do following magically steps for optimal health:
-eat nutrient dense food
Everything will take care of itself. Remember the body IS programmed to heal itself.
MONEY A TOOL A brief history of money, our relationship to it, and why you're often BROKE! - by Hugo Rodriguez
The Purpose of this Post
The power to do good, is also the power to do harm.
In this post, we'll conduct and in depth examination of our relationship (mostly adverse) to money. We’ll focus on this aspect because this is where we may have a positive change in the life of certain people. Our ultimate goal is to find equanimity with our finances by trying to get the root causes of many of our financial woes.
Philosophy of Money
The lack of money is the root of all evil.
Countless people strongly believe that money is an evil or a filthy thing that must be hated, and avoided to some extent. Even though it’s not healthy for our psyche to cling to material objects because of their impermanent nature. I still strongly believe that it is a great idea to use one’s or the wisdom of others to understand the purpose and proper use of certain tools, in this case; money.
Very often our ignorance and lack of personal discipline that relates to our finances, is what disallows us to use it to our advantage. Hence the main cause for many to become financial and mental jailbirds to their never ending and often unrealistic desires. This is the idea that only material objects can fill our emotional emptiness. This is seldom true, at least in a permanent way.
Economically and emotionally speaking, this adverse relationship to money, has profound consequences in the short and in the long term. They also affect our mind, our body, and of course our bank balances.
History of Money
“The ascent of money has been essential to the ascent of man.”
- Niall Ferguson
First, we’ll investigate the history and ascent of money. According to the dictionary, money is: “the current medium of exchange in the form of coins and banknotes.” Historically, money has taken many forms. From gold coins, to feathers, to cigarettes, to paper, or even sea shells. Money is that necessary “evil’ element for economies to develop. Money has and will almost always facilitate trade, allow for wealth accumulation, and other vital roles within a society.
If you're interested in the Niall Ferguson's research into the history of money, watch this PBS series:
You can also buy his book here:
The Ascent of Money: A Financial History of the World
Psychology of Money
"Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants."
As I mentioned in the first paragraph, if you're seeking happiness in the accumulation or expenditure of money, than you've misunderstood the purpose for money. For example these:
Here's another great article that discusses how our brain operates when it comes to spending, saving, etc:
The Psychology of Money
The deeper one investigates, the more self-evident it becomes. This is, that one’s personal finances is often a psychological and not numerical issue.. This, I think is largely due to one's lack of intellectual self-defense and other accumulated ignorance.
We can no longer go a minute without constantly being bombarded with advertisements. These ads are often developed in a way to sell us some permanent or at least temporary “happiness.” And who doesn’t want to be happy? We all do, it’s a natural desire of every human being. Yet, permanent happiness is something that very, very few people have attained. These individuals seldom claim that it was due to the money that they have accumulated. Instead, it was due to non-sensible accomplishments. Now, temporary happiness or pleasure may be gained by the purchasing of certain items, this face we cannot deny. However, this is where we can begin to make a small difference in our life's. A difference which will have profound changes in our minds and hopefully in our long term financial well being.
How to develop our mental defenses. First, we must understand that some of the world’s best and highest paid psychologists work in the marketing departments of some of the world’s largest corporations. These psychologists, along with marketing geniuses, and tons of money use what are called logical fallacies to put our mind into a state of want. Here are a few of the most common logical fallacies used to get us to buy:
Logical Fallacies with Dr. Michael Labossiere
Another issue is what Buddhist teachings refer to as the monkey mind. This is simply one's mind jumping from one thought to another, and then another without ever even noticing this. This monkey disallows one to actually reason through a financial decision. This lack of reasoning will likely lead one to make terrible choices.
ENJOY THE HOPSIN SONG!
Personal Finances-Taking action-Mint.com
"Never spend your money before you have earned it."
For the common person, managing one’s finances doesn’t require much. The tools necessary are: a piece of paper, a pencil, a calculator (optional), and about an hour or two at the kitchen table. That’s it! The steps are also quite simple:
You can also use the sheet from the link below:
It may also be a great idea to start a Mint account. You may have to invest an hour or so to link all of your accounts, and then create a budget, but it's worth it! Mint will send you texts to make you aware that you have gone over the limits that you’ve set. This has a PROFOUND effect on your spending habits. For many of you, this will be the first time that you become MINDFUL of how much you’re spending in things that you probably don’t need. For some you, this may be the first time that you will realize that you have gone through your monthly’s income by the third week and why you’re reaching the limits on your credit cards, which is a main cause of stress for many people. This frank but necessary realization is what may begin a change in your life. I’ve used Mint for years now, and it’s definitely has an impact on my personal finances.
**If you need help with this, we can meet 1 on 1 and take care of this I have done it countless times** Simply schedule an appointment on here!
Jahaziel Rueda CHHC,CPT,CES AADP
-Expert in nutrition, basic anatomy and physiology.
-Owner/Trainer at Vita Nova Nutrition and Fitness