FINANCIAL TIPS

Unlike non-home-based businesses and the Stock Market, home-based business owners have several advantages. The most obvious one is the office space in your home; since you are already paying a mortgage or leasing your home, you do not incur additional costs for this expense. Other home expenses such as utilities, internet service, mortgage interest, property taxes, home repairs, and other expenses are also deductible.

Home-Base Business

Non-Home-Based Business

Stock Market

Low startup costs

Capital intense – High startup costs to lease building, purchasing of equipment, labor

Need investment dollars

No additional costs to lease an office space

Must either lease or purchase office space

Can deduct the portion of your home office and all expenses associated with your office such as a portion of your:

Utilities, mortgage interest or rent, property taxes, homeowners’ insurance,
HOA dues, Repairs, etc.

Let’s look at an example: Lisa, a single mom of one child, invested $500 in startup costs on a home-based business (website, marketing materials, etc.). Lisa’s in-home office space represents 10% of the total square feet of her home. After calculating her office space expenses and other operational expenses, Lisa’s total business expenses totaled $15,027. Remember, her actual expenses are $500, not $15,027. Lisa is merely converting some of her personal expenses into business expenses).

Based on her business expense amount of $15,027, Lisa not only reduced her tax liability to zero, she is owed a refund of $3,240 from the IRS. So, what is her return on her $500 investment? If you said 648%, you would be correct!

Had Lisa invested the $500 in the Stock Market at an ROI of 20%, her investment would have grown to $600. As long as Lisa stays in business, she will realize a 600% or more return on her investment year after year.

Lisa’s example shows that it is not a question of, if you should have a home-based business, the question should be how quickly should I start one? Wealth Creation 2000 was created to help people who desires to improve their personal finances do just that.

Do you or someone you know would like to increase your cash-flow, reduce your taxes, eliminate debt, and start investing? If yes, then have them contact your sponsor or visit https://wc2000.biz/ to start their journey to improving their finances.

Did you know that people with high credit scores pay less for everything than people with low or poor credit scores? Yes, it is true. As you know, your credit score is used as the principal determinant in your getting approved for various loans such as auto, mortgages, personal loans, and credit cards.

However, your credit scores go beyond loan approvals. They are also used by the following entities:

  • Employers
  • Insurance companies (auto & homeowners coverage)
  • Landlords
  • Cellphone companies
  • Utilities (water, electric, etc.

A good or excellent credit score will allow you to save a lot of money over your lifetime. For instance, you could save $140,000 in interest on a $350,000 mortgage with a credit score of 760 or above compared with someone with a credit score of 620-639 for a 30-year fixed-rate loan in November 2023. Had you invested the $140K at an annual rate of investment of 6.5%, for 30 years, it would have grown to $926,000.

Building Credit

If you currently don’t have credit, there are two ways of building credit:

  • Apply for a credit-builder loan. This type of loan deposits the money you borrow into a CD (certificate of deposit) or savings account that you can claim after you make 12 monthly payments.
  • Apply for a secured credit card. A secured credit card gives you a credit line that is equal to the amount you deposit with the issuing bank.

Improving your Credit Score

There are several ways to boost your credit scores, below are a few primary ways:

  • Paying your bills on time. Missed a payment and your score could drop 75-100 points.
  • Use your credit card(s) regularly. However, make sure you know your credit limit and avoid using over 30% of your limit.
  • While you may not be able to pay-off the account balance each month, be sure to pay-off the statement balance. This will ensure you do not pay any interest; thereby using the credit card for free.
  • Never close credit card accounts, especially accounts with high credit limits as it will negatively impact your scores.

Since credit scores play such an integral role in our financial lives, it is vital that we keep track of our scores and understand how our actions impact the numbers.

Ever wondered why some people have a larger nest egg than others? The reason might surprise you. It is not based on who was born into wealth, earned more, or got lucky with their investments. The people who amass the most wealth are the people who pay themselves first.

Most people pay bills and everyone else first then try to save the money that is left over. The problem is, there is always something else to spend the money on! They pay themselves last, which is why it is next to impossible to grow wealth.

The phrase “pay yourself first” (PYF) originated in the 1920s with George Samuel Clason, an American entrepreneur and map maker. Clason’s book, The Richest Man in Babylon, popularized the idea of saving money before paying bills. 

PYF is a budgeting strategy that involves setting aside a portion of your paycheck for savings before spending it on other expenses. PYF can help you build up savings, create an emergency fund, and save for long-term goals. It can also help you develop habits that lead to financial peace of mind. 

To ensure you pay yourself first, you must automate the process. Set up automatic payments from your paycheck into a savings account or investment account. If you work for an employer who offers 401(k) savings, allocate a percentage of your paycheck to be automatically deducted each pay period.

When your savings are taken right off the top of your earnings, it forces you to live on the balance; out of sight, out of mind, goes the old adage.

How much should you save?

How much you save depends on your starting point, your age, and your goals. Someone in their 20’s should save 10% or 12%. Someone in their 30’s or 40’s should save 15% or 20%. If you are starting your wealth journey in your 50’s, don’t be discouraged, you still have 10-15 years to make a significant impact.

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