Just gave govt. a pair of work wheels!
Joined: May 2002
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From: Somewhere in NJ
Originally Posted by LubedKoala,Apr 24 2009, 01:19 PM
Simple scenario:
Buy a yacht and make it into a party yacht. People can rent it out and have crazy parties, or use it for travel or whatever. The profits will be used to pay off the loan on the yacht, and the maintenence and gas and all of that would all become business expenses, which in turn become tax deductibles. I now have something I can throw my money at so that I don't have to pay the government, and better yet, I now have a yacht instead of nothing!
You just need an asset, any kind of asset, to invest your money into. Buy a small home and rent it out to people, open a bar, rent out jet ski's near the lake, start a business from your home, buy and sell used cars, etc.
Buy a yacht and make it into a party yacht. People can rent it out and have crazy parties, or use it for travel or whatever. The profits will be used to pay off the loan on the yacht, and the maintenence and gas and all of that would all become business expenses, which in turn become tax deductibles. I now have something I can throw my money at so that I don't have to pay the government, and better yet, I now have a yacht instead of nothing!
You just need an asset, any kind of asset, to invest your money into. Buy a small home and rent it out to people, open a bar, rent out jet ski's near the lake, start a business from your home, buy and sell used cars, etc.
Also, don't forget there is a very different workstyle and lifestyle for owning a business vs. being like the 90% (I couldn't find a real %) of the other people in this country that work for someone/something else.
For many of us, there is a simple view that while I don't reap the rewards of my company, I, personally am also not subject to the risk. (I realize, layoffs, reductions, re-orgs, M&A, etc... are all possible). When I own my own company, I assume all upside benefits, but also all downside risk. For many of us with solid, stable, decent or well paying jobs, that may not be something we're willing to take on.
Owning a small business is not an easy answer. You assume an awfully large amount of debt and liability that needs to be dealt with. Saving 1/4 of your tax burden by taking out $100K, $200K or more in additional debt isn't necessarily a good choice all the time. Only about 1/3 of small businesses every turn a profit, and another 1/3 break even. Only ~1/3 survive past 7 years. (http://www.score.org/small_biz_stats.html).
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Originally Posted by s2000raj,Apr 24 2009, 04:07 PM
I pay enough taxes to support octomom's kids.
MDs get it terrible on taxes over the lifetime--the income structure is about as tax-unfriendly as it comes. (My wife graduates next month.)
You go into debt for 8 years, then make just enough to eat and pay interest on your loans for the next 3-9 years. Then your investment starts to pay off, and you are instantly in the top bracket the rest of your life paying 40% instead of 25%. Thanks for single-handedly supporting our poor and homeless.
Too bad you don't get any time averaging or tax credits for the 10 or 15 years you were investing in your career and living on a student's budget.
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