Hello Everyone! My name is Zach, and welcome to the On Cash Flow RU-vid channel!
This channel is all about Financial Independence, and Early Retirement (F.I.R.E). I cover many personal finance topics with a F.I.R.E mindset such as investing, increasing income, decreasing expenses, and tax optimization.
I even share some of my personal successes and failures related to my own financial independence journey.
Is half of my self employment tax a deduction on my federal income taxes? (Since I'm taxed twice as employee and employer?) I'm still working on my home office deduction information..
I think for SSN if you make more than $160.200 you only pay the 12.4% on the first 160.200 which is 18 thousand something you only pay that. doesn’t matter if you make a million or more but Medicare you pay according to the income
@OnCashFlow Do you have a spreadsheet template you like to share? If I don't have to take the additional time to create one, that'd be awesome lol! I really enjoyed the video! Bank Bonuses just popped on my radar today, as I've lately been jumping down the rabbit hole of Side Hustles. This answered a LOT of the questions I had up front, and Doctor of Credit seems like it's going to be an amazing resource as well! I'll definitely be checking out your other videos. Thanks!
Isn't fat FIRE proportional to the value of a person's assets rather than their lifestyle. If a person choses to spend a lot in retirement but does not have proportionately more assets then yes this is risky.
To have that type of lifestyle (spending) you would ideally also have a large amount of assets to be about equal as a percentage of withdrawal from your portfolio. Same "rules" just bigger numbers.
@@chrisschlichting9145 No problem! Many tax topics are very well known to people like us interested in tax optimization, but the vast majority of people out there need help on the basics!
Thank you for making this video it’s very helpful and informative. I just wanted to verify that I’m doing it correctly, so I found the fidelity s&p 500 index fund that you talked about at 4:55 in the video. I clicked buy on that and what I’m getting at is that on the next page to where it takes you, there’s a dollar amount of $196.54 next to where it says symbol (FXAIX), what does that amount mean?
I too have benefited greatly from travel hacking. I have probably gleaned 6,000 or so dollars of free travel so far and it is thrilling 4:14 to me every time I get to use my points in a baller way to pay for travel. Most recently I flew my family of 4 for a 4-day San Francisco trip entirely on points. I was then able to employ hotel points as well. A luxury vacation for very low cost
That's so awesome! We can control our spending and smartly use credit cards, and so we can reap the benefits without many of the downsides. I sometimes pay for an annual fee upfront ($99 usually) but I can literally get $700+ of travel and benefits out of that card (and I close them before the next annual fee!). It really feels like a superpower, doesn't it!?
The two biggest contributors to my wealth have been signing up for the employee match and investing in my workplace 403b almost 20 years ago for myself and my husband and buying a house that was only $88,000 and paying it off
i retired at age 57 when i just couldn't tolerate sitting in traffic 3-4 hours daily after the "return to office" BS was unleashed upon the world. closer jobs didn't pay well enuf to justify my time & attention. i really wanted to stay in the workforce but making us come into the office to do a job we can do remotely, it just wasn't worth it, especially considering the nonsensical reasons corporate america gave us for demanding we be on site.
@@OnCashFlow no, i am in the same location now as i was leading up to the whole covid thing. i tolerated the commute pre-covid b/c i wasn't in a financial position to walk away. once we proved to the world our jobs could be done as effectively (arguably better) remote, it just made no sense to give up that work/life balance.
Eating out is one of the biggest thing that eat up income. I can feed a family of 4 for 2 weeks for $75: 64 eggs $10, 42oz jar of oatmeal $6, 2 bags of 5lb rice $7, 6lbs ground beef $30, 5lb bag of potatoes $4, 8lbs of apples $7. Eating out is costly & one cost many don’t include is maintenance on vehicle for driving to get food. It’s not that ur paying $33 for a meal it’s the mileage as well which ranges from .66 cents to 3.00 depending where u stay.
In regards to the health insurance, there’s also HRA 105. As an insurance agent, I use it myself to deduct my premiums AND medical expenses through my single employee LLC
Found the video I need! I’ve been investing for about 3-4 years now and have some assets in ROTH IRA and taxable brokerage account. The topic you discussed, qualified (long-term capital gains) vs. non qualified (ordinary), tax rates on dividends were difficult concepts I did not understand not until today. This is the second video I’ve watched from your channel and it gave me hope. It gave me hope because I thought that taxable accounts are not where you want to park your money. But then, learning that dividends can be tax at 0% for single individuals like me who is not working but have sum of money I can invest is amazing. Thank you for your time and effort into sharing valuable information and knowledge to all of us.
I'm so glad that I could be helpful! "Taxable accounts" sound scary because they make you think of losing a lot of your investment gains to income tax, but if you invest passively over a long-term horizon, the tax burden is not much! I think you may find this video on taxable accounts helpful :) ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-r7kLvkJuvJo.html
Great video as always. However, I would like some examples about the Holding Period. Additionally, for U.S. veterans that have assets in a taxable non-retirement account who are receiving untaxed compensation from the VA, do they always fall under the 0% tax on their quarterly dividends since they have no income (e.g., those in receipt of TDIU benefits)?
As far as my understanding goes, VA disability is non-taxable, so it shouldn't controbute to taxable income, of which the dividends would fall into. So if total income puts you under the threshold of the 0% tax on LT dividends, then their should be no income tax.
This video was created four years ago and it is still true in 2024. There are some differences in the qualified dividend’s filing status though because I didn’t see married filing jointly and/or married filing separately. The other thing I noticed that was not mentioned is the timing of the dividend payments. Buying an ETF or mutual funds should be 6 months (I’m guessing here) before the dividend payment to shareholders. But overall, an informative video.
Yes, a spouse's earned income can be used to contribute to both their own IRA and their spouse's IRA. One of the two spouses needs "earned income" to be eligible to contribute to a any type of IRA, including Roth.
I was 100 percent stock (mostly S and P) for 30 years before retirement. No regrets and I never worried about it because I had a long term mindset. I learned in finance class that the S and P functions like a random number with a mean of around 10 percent. So, if you play the game long enough, you get that. Also, per SPIVA (and Jack Bogle) the S and P beats over 85% of funds that benchmark to it over 10 years. Now, because I'm drawing down my retirement I cut back a little to 95/5 to provide emergency money so I don't need to draw down stocks in a bad market in an emergency. But other than that, 100 percent stocks. I never invested in bonds to smooth the ride because I had faith in the long term 10 percent of the S and P. And, it's not the ride that matters, it's the destination. Where are you going to be in 10 years not how you get there.
Well said, not many people have done just that for that many amount of years. I hope with more information and options available today, that more people can invest passively for decades and reap the benefits as you have!
The best depends, but I encourage not having an app at all so that you set up regular investments that buy the index, and then practically forget about it. I recommend Vanguard, Fidelity, M1, and/or Schwab.
We moved & retired on $1710 per month in Northern California. We long for nothing. Keys to our success: ✔ Bought a major fixer upper off-grid cabin for 87k on 9 acres. Property tax is only $85 a mo.. Remodeled it ourselves, no permits, ✔ Location. Sunny 65% of the yr means our FREE DIY Solar powers our home, E-Bikes & the 2020 Chevy Bolt (E-car) most of the yr ✔ 15 min to: health food store, our bible church, gas/mini mart, Farmers Market, Cafe, Library, School & 2 active community centers ✔ We grow our Winter Vegetables in a greenhouse. Water is free via a spring. ✔ Only $40 per month. for 15 Hens, 4 ducks, & 8 Rabbits. They mostly free range but we buy a tiny portion of their food. ✔ Volunteer for the Monthly Food Bank Give-away. Saves us a TON of $ since they allow us to take home the just expired food such as organic milk & eggs, organic veges for our compost pile. Milk wbecomes Farmers Cheese, the eggs we cook up end up in home-made Quiches we bring for our churches meals ministry for the hungry 1x a month.. Also we make batches of these Quiches for church potluck ✔ Hobbies/Interests are almost free. Ccycling, bible study, social events at the community center, & volunteer ✔ We do not pay for Medical/Dental,, Homeowners insurance or water ✔ Only one of us drives. I drive but very rarely.. Too costly to have 2 drivers. ✔ We get $300 in food stamps for 6 months a year. This allows us year round discounts we'd not otherwise have such as $7 a month Amazon Prime & $10 off our Garbage Service. California has the most expensive food costs in the nation. Our highest expense is food but due to the Food Bank & the Farmers Market, we have much lower food costs. We also grow some of our food.
True, but I think it's simple design is there for good reason. Stock/Bond index fund investing is very simple. yet extremely effective in the long run.
While this is a very thorough video, it's still not the complete picture. It's not taking into account the converse of opportunity cost. Basically, it assumes that if you hadn't purchased the car you would be otherwise sitting at home and never traveling or commuting. To be fully accurate, you would have to calculate the cost of rideshare/public transport. Also the cost of lost time relying on others for travel. Harder to calculate: opportunities available for those that have a vehicle -- for example work options and location are a lot more flexible for many people when they have a vehicle, or choosing to drive to the Costco or Sams club in order to save money on groceries.
Everything in life has trade-offs. Every decision we make has a nearly endless amount of opportunity costs. I see your point, and it is valid! Where I live, I practically must have a vehicle. Other's in walkable cities, maybe not so much.
