Live a great life on less than $200K/yr?

[Russ H]

Can't wait for this one! I just recently purchased a home with a detached apartment that is going to pay the mortgage so I am now hooked on the idea of trying to live for "free". It opens up so many doors to pursue something you have a passion for.

Yeah. Kinda surprised we didn't get more input on this thread.

Where are all the Lambo-wanna-owners out there?

What is YOUR PLAN to own your Lambo?

Just planning to pay cash for it? :smxE:

How silly is that, when you could have one of your companies buy it for you? Or lease it?

-Russ H.

 

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[CommonCents]

Global, is there a rule of thumb or hard rules on how much business can be done in the US (either amount or %) by an IBC in Belize to fit the legal status of an IBC? thanks.

My buddy works for a hedge fund. Many hedge funds are domiciled in the Caymans, pay little or no tax except when the money repatriated to the states.

 

[CommonCents]

In general, all the spending by the US govt and imminent higher tax threats will give a big push to the tax planning/legal offshore planning area.

I have read a few articles on the sovereign society site. They are out to sell seminars, newsletters etc but seem to have some good info. Anyone have other good sites for good tax planning/legal offshore tax planning information?

 

[GlobalWealth]

Global, is there a rule of thumb or hard rules on how much business can be done in the US (either amount or %) by an IBC in Belize to fit the legal status of an IBC? thanks.

My buddy works for a hedge fund. Many hedge funds are domiciled in the Caymans, pay little or no tax except when the money repatriated to the states.

Honestly, there isn't really a rule of thumb here. I will say you don't want to own physical assets like RE in the US if you are trying to defer taxation. If you have large RE holdings a PPLI could be a huge benefit though if properly structured.

For the Belize IBC, you just want to make sure you aren't pulling a trick and you are really following all the rules. This takes careful planning. It is not easy or cheap to do, but if your income is high enough, it can be hugely beneficial.

 

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[GlobalWealth]

In general, all the spending by the US govt and imminent higher tax threats will give a big push to the tax planning/legal offshore planning area.

I have read a few articles on the sovereign society site. They are out to sell seminars, newsletters etc but seem to have some good info. Anyone have other good sites for good tax planning/legal offshore tax planning information?

I agree with your first comment as I have seen an increase in calls lately. Just closed 3 new clients this week with rather complex strategies, 2 of them were Americans. So it isn't just Americans at risk. The other was from Europe.

The sovereign society is a good resource. There are some interesting articles on there and they seem pretty well versed in this. I subscribe to one of their newsletters. Escape Artist is also another good site, but as a matter of disclosure, I am media partner with them.

There is an enormous amount of info out there about this subject, most of it wrong or incomplete information. So be cautious. With the complexities of US tax law, it is nearly impossible to offer a 100% solution. One of the accounting firms we work with will even tell you that he can only give you his opinion about the law because it is so complex it is impossible to be 100% compliant unless you are a simple wage earner who doesnt itemize deductions and doesn't own any assets.

 

[CommonCents]

Yep, forgot about the escape artist, thanks! I agree, its a very misunderstood area and full of land mines. That spells out opportunity! I don't have the expertise myself but was thinking it would be a good gig to be a US based agent representing a competent offshore team. I can speak the language to biz owners.

I'm thinkin of an IBC for a new online biz idea when I find the right biz. I think if you start offshore from the get go you'd be more off the radar rather and less risk of audit as opposed to an already profitable online biz suddenly lowering its tax liability would probably trigger some audit flags. Not that it isn't a good idea and legal but audits are no fun.

I think its pretty standard for multinational companies to break down their business units and offshore them for tax purposes, leaving minimal operations in the US.

I went through an audit after I sold my company to a fortune 200. I'm sure they were connected and triggered it to get a good scrubbing by Uncle Sam on their new acquisition, on my dime LOL.

 

[onmyway]

Yeah. Kinda surprised we didn't get more input on this thread.

Where are all the Lambo-wanna-owners out there?

What is YOUR PLAN to own your Lambo?

Just planning to pay cash for it? :smxE:

How silly is that, when you could have one of your companies buy it for you? Or lease it?

-Russ H.

So would that is be another example of own nothing but control everything?

 

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[tchandy]

Bump.

 

[PaulRobert]

So would that is be another example of own nothing but control everything?

Simple. If I am wrong, please correct. Instead of spending $300K of your own cash on the Lambo, you have your company buy the Lambo. Instead of having the car in your name, it is in your company's name. There are probably more ways to do this also.

 

[Russ H]

Simple. If I am wrong, please correct. Instead of spending $300K of your own cash on the Lambo, you have your company buy the Lambo. Instead of having the car in your name, it is in your company's name. There are probably more ways to do this also.

Yes, but in this particular case, your company pays taxes on cash expenditure for the Lambo (since cars are not 100% expensible, unless they meet very limited criteria).

HOWEVER, your company could LEASE the lambo, and if it was used just for company events, the lease payments would be 100% deductible.

This is an example of using your PRETAX business income to control something you use.

Repairs/maintenance are also expensible.

But bear in mind-- this could only be used for business purposes. So you really need to be careful about that. For some, that means the car stays parked in a garage AT THEIR BUSINESS-- it's never at home.

-Russ H.

 

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[Cat Man Du]

Yes, but in this particular case, your company pays taxes on cash expenditure for the Lambo (since cars are not 100% expensible, unless they meet very limited criteria).

HOWEVER, your company could LEASE the lambo, and if it was used just for company events, the lease payments would be 100% deductible.

This is an example of using your PRETAX business income to control something you use.

Repairs/maintenance are also expensible.

But bear in mind-- this could only be used for business purposes. So you really need to be careful about that. For some, that means the car stays parked in a garage AT THEIR BUSINESS-- it's never at home.

-Russ H.

Not entirely true...............You can lease under your own name and allocate a % to business and a % to personal. Say 90% business and 10% personal, therefore you can claim 90% of cost to business. The best of both worlds.! :smxA:

 

[LagunaLauren]

Lots of legal ways to live well on less/"control everything, own nothing" with leverage. For example, a friend of mine bought a commercial property (office space) with one of his companies for just over $7Million. His monthly payment is just under $50k a month. Another one of his companies leases it from his other company for $92K a month. (And he has another tenant in part of the space paying rent as well). He can balance/change profits and losses from one company to another. It's probably worth about $15Million now too, so as an option, he could re-fi it and pull out a few Million in non-taxed money as well, since it is re-fi'd money and not income. And yes, his various companies own his cars (including an Aston Martin DB9 convertible and a Bentley GT Convertible) and his homes. He does everything by the book, but he does it all intelligently.

Another trick he taught me early on about leverage is to up your credit card limits by $50,000 (or as much as you can) every 6 months. Show your bank statement to your credit card company when you have a nice chunk of $ in it (like after you sold or re-fi'd a property). Ask for huge increases every 6 months. When you have big 6-figure limits on all your cards (that have goodies tied to it like airline miles), buy everything with it, including cars (if the dealer lets you) and 6-figure cash advances for property down payments. Pay the balance immediately when the bill comes to avoid paying interest, but rack up the miles and bonuses. He flies his family and friends around the world First Cass for free, including to Bali, Maui and Switzerland having used this tactic.

Tim Ferris' book, "The 4-hour work week" has some great ways to travel and live well on very little $ if I remember correctly also...

 

[Russ H]

Another trick he taught me early on about leverage is to up your credit card limits by $50,000 (or as much as you can) every 6 months. Show your bank statement to your credit card company when you have a nice chunk of $ in it (like after you sold or re-fi'd a property). Ask for huge increases every 6 months. When you have big 6-figure limits on all your cards (that have goodies tied to it like airline miles), buy everything with it, including cars (if the dealer lets you) and 6-figure cash advances for property down payments. Pay the balance immediately when the bill comes to avoid paying interest, but rack up the miles and bonuses. He flies his family and friends around the world First Cass for free, including to Bali, Maui and Switzerland having used this tactic.

Tim Ferris' book, "The 4-hour work week" has some great ways to travel and live well on very little $ if I remember correctly also...

Great post, LL. Rep speed!

Legend has it that, way back when, when Amex first introduced their frequent flyer miles program (every dollar spent earned a flyer mile on an airline-- I forget which), it had no limits.

Program had just gone into effect days earlier when a wealthy man, at an art auction, was about to sign a check for the $4,000,000 painting he'd just bought.

His friend said, "Hey, don't do that! Put it on your Amex-- you'll get the flyer miles!".

So he did. Got millions of flyer miles.

Flew that friend-- and several others--- first class to Europe to celebrate.

Amex changed their rules quickly.

-Russ H.

 

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[LagunaLauren]

Haha. Great story Russ! Years ago I got a huge chunk of change from a property I re-fi'd and wanted another convertible Mercedes. I went to the dealership and tried to put the whole car on my AmEx or my Visa for the miles. The dealer wouldn't do it (of course, they have to pay a % from me using the card which cuts into their profits), so I wrote a big fat check instead. But that would have been sweet to get the miles!

I know of a guy a long time ago (trust fund baby) who wanted a ferrari. His trust fund manager said no cause he just bought a rolls royce. He went to the ferrari dealership and bought it anyway on his AmEx. The trust fund manager had little choice but to pay the AmEx bill when it came in.

fftopic:

 

[MJ DeMarco]

I tried to buy my second Lambo on my black Amex, the dealer wouldn't allow it unless I paid for the fees. In fact, anytime I've ever tried to buy a car on a credit card, I've been rebuffed by the dealer -- even a Lexus.

 

[Cat Man Du]

Lots of legal ways to live well on less/"control everything, own nothing" with leverage. For example, a friend of mine bought a commercial property (office space) with one of his companies for just over $7Million. His monthly payment is just under $50k a month. Another one of his companies leases it from his other company for $92K a month. (And he has another tenant in part of the space paying rent as well). He can balance/change profits and losses from one company to another. It's probably worth about $15Million now too, so as an option, he could re-fi it and pull out a few Million in non-taxed money as well, since it is re-fi'd money and not income. And yes, his various companies own his cars (including an

Aston Martin DB9 convertible...... since this is used by now ..he prolly needs a new one..I'll take it off his hands.

and a Bentley GT Convertible) and his homes. He does everything by the book, but he does it all intelligently.

Another trick he taught me early on about leverage is to up your credit card limits by $50,000 (or as much as you can) every 6 months.

Show your bank statement to your credit card company when you have a nice chunk of $ in it (like after you sold or re-fi'd a property). Ask for huge increases every 6 months. When you have big 6-figure limits on all your cards (that have goodies tied to it like airline miles), buy everything with it, including cars (if the dealer lets you) and 6-figure cash advances for property down payments. Pay the balance immediately when the bill comes to avoid paying interest, but rack up the miles and bonuses. He flies his family and friends around the world First Cass for free, including to Bali, Maui and Switzerland having used this tactic.

Tim Ferris' book, "The 4-hour work week" has some great ways to travel and live well on very little $ if I remember correctly also...

SPEED +++++ Laguna for the credit card info. Haven't done this for a while..needed the reminder! :iagree:

 

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[GlobalWealth]

Lots of legal ways to live well on less/"control everything, own nothing" with leverage. For example, a friend of mine bought a commercial property (office space) with one of his companies for just over $7Million. His monthly payment is just under $50k a month. Another one of his companies leases it from his other company for $92K a month. (And he has another tenant in part of the space paying rent as well). He can balance/change profits and losses from one company to another. It's probably worth about $15Million now too, so as an option, he could re-fi it and pull out a few Million in non-taxed money as well, since it is re-fi'd money and not income. And yes, his various companies own his cars (including an Aston Martin DB9 convertible and a Bentley GT Convertible) and his homes. He does everything by the book, but he does it all intelligently.

Another trick he taught me early on about leverage is to up your credit card limits by $50,000 (or as much as you can) every 6 months. Show your bank statement to your credit card company when you have a nice chunk of $ in it (like after you sold or re-fi'd a property). Ask for huge increases every 6 months. When you have big 6-figure limits on all your cards (that have goodies tied to it like airline miles), buy everything with it, including cars (if the dealer lets you) and 6-figure cash advances for property down payments. Pay the balance immediately when the bill comes to avoid paying interest, but rack up the miles and bonuses. He flies his family and friends around the world First Cass for free, including to Bali, Maui and Switzerland having used this tactic.

Tim Ferris' book, "The 4-hour work week" has some great ways to travel and live well on very little $ if I remember correctly also...

At my last company I had 6 managers with company credit cards. I issued each of them a Delta Amex and all the miles accumulated on my skymiles account. We all payed for everything business related on teh Amex. Power bill, phone bill, travel, everything.

 

[hakrjak]

You guys got me thinking when you were talking about buying Lambos under your corps

Anybody have any creative ideas on how I could buy a camper trailer under one of my corps? haha -- Mobile command vehicle for my flips?

Cheers,
- Hakrjak

 

[CommonCents]

I did the same w/ Amex points for my sales team. When one of them complained about me getting all their points I told them they are free to start their own company. That always worked

 

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[RamonP23]

Wow I'm a student with no income, and I like my life.... BUT I wanna have a GREAT life! While I'm still young!!

 

[KCErnest]

As far as the car and house as business expenses...

Would it not be possible to set up seperate businesses for these things. Have your million dollar company pay for executive car service to another business you own that happens to have whatever cars you want in its inventory. It could just be built in to your compensation package. Companies pay for gym memberships, why not car service?

Same for the house. Maybe some sort of subsidiary controlled by the million dollar company manages real estate and needs someone to take care of it. It seems you could have several properties, that the subsidiary thinks it could profit off of, that you could have access to.

 

[Russ H]

As far as the car and house as business expenses...

Would it not be possible to set up seperate businesses for these things. Have your million dollar company pay for executive car service to another business you own that happens to have whatever cars you want in its inventory. It could just be built in to your compensation package. Companies pay for gym memberships, why not car service?

Same for the house. Maybe some sort of subsidiary controlled by the million dollar company manages real estate and needs someone to take care of it. It seems you could have several properties, that the subsidiary thinks it could profit off of, that you could have access to.

Yes, you're on the right track. No more parking for you-- Rep speed!

Consider this: You could own (or lease) office space right next to your home, so you could walk to your office location, and from that point, every trip to your other businesses (or every trip *for* something business related) becomes a write-off.

Think about the implications of that, for a minute.

-Russ H.

 

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[randallg99]

looks like I am late to this thread, but a couple of things:

1. Yes. You can live well, happily and "great" on less than 200k. For someone who made significant income in previous years I can vouch that a life is well lived regardless of how much income you have. (but of course, the adjustment is difficult at first) Health, family and friends are not bought by money.

2. if you're in business, then by all means find out who accepts credit cards including suppliers, inventory, advertising, etc. Just ask. You'd be surprised. The miles I've accumulated have paid for first class vacations to Europe, the Islands, Panama, etc.

 

[Steve K]

great thread

 

[Russ H]

looks like I am late to this thread, but a couple of things:

2. if you're in business, then by all means find out who accepts credit cards including suppliers, inventory, advertising, etc. Just ask. You'd be surprised. The miles I've accumulated have paid for first class vacations to Europe, the Islands, Panama, etc.

Another great suggestion!

-Russ H

 

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