The secret to improving your wealth and fixing your personal economy is found in 3 steps. Once you take those steps you will find the prosperity and lifestyle so many only dream of. So let’s get started!
Step 1: Reduce Debt
One of the biggest obstacles that hinders your prosperity is debt. Debt is the #1 cause of bankruptcy, and it disrupts savings and investing. So let’s use a simple but powerful strategy that can help you reduce your debt faster than usual.
This strategy is called “debt stacking” or “snowballing”. It uses the concept of stacking payments to counteract compound interest.
Here’s how it works:
- Make a list of all your debt accounts that have a balance. Do not include accounts that can never be paid off, such as utilities.
- Next, sort them in order from the smallest balance to the largest. Typically, your mortgage would be at the bottom of the list.
- Make the minimum payment on all accounts. This step is very important at this stage.
- When the first account at the top of the list (smallest balance) is paid off, use the payments you were making on that account to add to the next account on the list.
Example: You were making a minimum payment of $30 monthly on the first account and $50 on the second account. When the first account is paid off, add the $30 payment to the second account ($30 + $50 = $80 payment to second account).
Continue down the list until all accounts are paid in full! WOW, you are now debt free!
Note: Any extra money paid should be directed to the account with the lowest balance. Spreading extra money across multiple accounts renders this technique ineffective.
Step 2: Increase Income
There are several different ways you can increase your income, but we will focus on business ownership in this section. There are 3 options to consider when it comes to starting a business. First, you could build a brick and mortar business from the ground up. However, many traditional businesses fail for a great many reasons ranging from insufficient capital to lack of knowledge. But if you have enough capital and know-how, you can be successful.
Second, you can buy a franchise. There is a wide variety of franchises in many sectors of the market and your choices range from restaurants to repair shops. One of the major setbacks to this option is the fact that it may require a huge initial investment, and more often than not there is a reoccurring franchise fee that comes with the privilege of having a recognized brand. Very few people can afford this option, but it is still a good option.
The third option is a home-based business, which is one of the biggest trends in our economy today. There are many businesses to choose from in just about every industry, and the best part is that most can be started for less than $1,000! In some cases you can even get started for less than $500! If you choose the right one, you could have a full support system at your disposal. A home-based business is by far the best option for the average person to make a huge and positive impact on their finances.
Step 3: Reduce Taxes
After you start your home-based business, the advantages really begin. Uncle Sam will help you by allowing you to have some incredible deductions! Any expense you incur because of your business that you would not have incurred if you didn’t have a business is probably deductible.
What Deductions May Be Allowed
The cost of starting up your business, promotional materials, product samples, internet access, fax lines, lead lists, website fees, printing costs, briefcases, laptops, business cards, and home office furnishings all can be 100% deductible if they are used 100% for business.
The benefits of owning a home-based business doesn’t stop there. There are also car allowances if you keep good logs of the primary purposes of your trips.
Did I mention healthcare costs can also be tax deductible? Well, they can be!
The fact is Uncle Sam wants to help you run your own home-based business and will provide you with the deductions you need to help you lower your taxes. In fact, there are so many deductions you could actually start your business for FREE, depending on your start up costs and eligible deductions! ***Please see a tax professional to get more detailed information.
What are you waiting for? Every day you delay in starting your own business you are throwing away money in overpaid taxes. The only way to stop it legally is to start your own business now!
Fighting the evil forces of poverty – both yours and mine!