I've come to realize that the key to amassing wealth lies in making sound investments. I purchased my first home at the age of 21 for $87,000 and sold it for $197,000. My second home, acquired for $170,000, was later sold for $320,000, and my third property, purchased at $300,000, fetched $589,000, with buyers covering all closing costs and expenses. Not reaching a million before retirement feels like an unfulfilled goal.
I initially started my investment journey with the guidance of a financial advisor named *Jenny Pamogas Canaya.* Her transparent approach granted me full control of my investments, and her fees are reasonable, considering my return on investment. Nonetheless, it's crucial to conduct thorough research before engaging with any financial advisor.
why are some lawyers and CPA.'s like Mark Kohler suggest to be a S-corp when setting up a self direct solo 401k plan if you can contribute less than being an LLC?
Great question! THe real answer is that you'll mitigate far more SELF EMPLOYMENT tax by becoming an S-Corp, than what you'd save in terms of taxation (usually) in retirement accounts. You'll basically have to select your goal, and you and a spouses overall INCOME levels and overarching wealth plan would need to play into it. But many people would prefer to hold and have the cash they save as a result of being an S-Corp (15.3% * whatever is taken as distribution rather than salary), rather than having it in a retirement account they can't touch. Sole Props = Pay children to save taxes, larger retirement plan contributions to save taxes... S-Corp = more self employment tax saved. More potential HIGH end medicare tax reduced etc. Also, S-Corps, supposedly, tend to have much more protections, lower audit rates etc....
The two main reasons you'd use employer plans for a self employed person is: 1 - tax efficient wealth building 2 - Participate in Compounding interest. IN MY OPINION, the primary reason you want to invest is to partake in the compounding interest, and that CAN be done in taxable accounts utilizing qualified dividend, tax efficient funds from vanguard OR just holding stock. I think there's a case to make that having a taxable account is very underutilized, and not understood well enough...
FeedbackWrench Yeah, invest and lose all your money. Such a gimmick with this compound interest theory plus you cannot touch it unless you are 59 1/2. Not much living past that anyway. Best thing is to save the old school way and live life by sleeping better knowing that you can touch your $ anytime you want and won’t lose it in investments and economic downturns. The markets are way too manipulated and rigged and you have ZERO control of your hard earned $.
@@lancefrancois8763 Except you can access your money penalty free before 59.5 with proper planning and use of Roth IRA accounts. And while the stock market carries risk, it is reduced depending on how you invest your money ... individual stocks vs diversified Index/mutual funds. As far as old school, how far back are we going, pre-1800’s??? My grandparents invested in stocks and bonds. The fact is that if you hold onto your money in a savings account it will decrease in value because on inflation. Now there are other investment options such as real estate but if you want to grow your wealth - you need to invest it.
It’s just tied to the salary amount I believe so that it’s lower. Financial planners always over value the contribution tool and forget the tax savings (usually).
There are some serious mistakes in this presentation. For a SEP IRA, you do not save anything off your self employment taxes, you pay 15.3% of 92.35% of your business net. For a sole proprietor, the 25% maximum deduction becomes a 20% deduction because the SEP deduction itself further reduces your business net. I don’t know why they fuss around with this percentage translation, for a sole proprietor you just want to know the max limit. So its simple, take your business net, subtract 1/2 of your self employment taxes, and take 20%. Same calculation for the employer side of the solo 401k.
I've come to realize that the key to amassing wealth lies in making sound investments. I purchased my first home at the age of 21 for $87,000 and sold it for $197,000. My second home, acquired for $170,000, was later sold for $320,000, and my third property, purchased at $300,000, fetched $589,000, with buyers covering all closing costs and expenses. Not reaching a million before retirement feels like an unfulfilled goal.
You have done great for yourself. I’m trying to get onto the housing ladder at 40. I wish at 55 I will be testifying to similar success!
I initially started my investment journey with the guidance of a financial advisor named *Jenny Pamogas Canaya.* Her transparent approach granted me full control of my investments, and her fees are reasonable, considering my return on investment. Nonetheless, it's crucial to conduct thorough research before engaging with any financial advisor.
I've come across several positive endorsements of Jenny Pamogas Canaya on various platforms, including TH-cam channels, seminars, and more.
Thanks to these recommendations, I successfully located her online profile and have already reached out to her with a message
Great video.... where is the url link for the fidelity self employed contribution calculator you used in the video. thanks
why are some lawyers and CPA.'s like Mark Kohler suggest to be a S-corp when setting up a self direct solo 401k plan if you can contribute less than being an LLC?
Great question! THe real answer is that you'll mitigate far more SELF EMPLOYMENT tax by becoming an S-Corp, than what you'd save in terms of taxation (usually) in retirement accounts. You'll basically have to select your goal, and you and a spouses overall INCOME levels and overarching wealth plan would need to play into it. But many people would prefer to hold and have the cash they save as a result of being an S-Corp (15.3% * whatever is taken as distribution rather than salary), rather than having it in a retirement account they can't touch. Sole Props = Pay children to save taxes, larger retirement plan contributions to save taxes... S-Corp = more self employment tax saved. More potential HIGH end medicare tax reduced etc. Also, S-Corps, supposedly, tend to have much more protections, lower audit rates etc....
The two main reasons you'd use employer plans for a self employed person is: 1 - tax efficient wealth building 2 - Participate in Compounding interest. IN MY OPINION, the primary reason you want to invest is to partake in the compounding interest, and that CAN be done in taxable accounts utilizing qualified dividend, tax efficient funds from vanguard OR just holding stock. I think there's a case to make that having a taxable account is very underutilized, and not understood well enough...
FeedbackWrench Yeah, invest and lose all your money. Such a gimmick with this compound interest theory plus you cannot touch it unless you are 59 1/2. Not much living past that anyway. Best thing is to save the old school way and live life by sleeping better knowing that you can touch your $ anytime you want and won’t lose it in investments and economic downturns. The markets are way too manipulated and rigged and you have ZERO control of your hard earned $.
@@lancefrancois8763
Except you can access your money penalty free before 59.5 with proper planning and use of Roth IRA accounts.
And while the stock market carries risk, it is reduced depending on how you invest your money ... individual stocks vs diversified Index/mutual funds.
As far as old school, how far back are we going, pre-1800’s??? My grandparents invested in stocks and bonds.
The fact is that if you hold onto your money in a savings account it will decrease in value because on inflation. Now there are other investment options such as real estate but if you want to grow your wealth - you need to invest it.
I hear single member S Corp can't contribute to SEP IRA?
It’s just tied to the salary amount I believe so that it’s lower.
Financial planners always over value the contribution tool and forget the tax savings (usually).
Thank you for this. I have a question. Why SE401K Employer Contribution is same as SEP IRA contributions?
Yup, setup SEP 10+ years ago and now a Solo
Hello, would you mind providing guidance on how one would record a SEP IRA employer contribution for an S-CORP into QBO?
awesome video.
been looking for this.
Does the SEP-IRA / Solo 401k lower your self-employment tax on an LLC (sole prop)?
How is that 18k? 25% of 100?
Isn’t the 18k the employee contribution limit... not employer.
There are some serious mistakes in this presentation. For a SEP IRA, you do not save anything off your self employment taxes, you pay 15.3% of 92.35% of your business net. For a sole proprietor, the 25% maximum deduction becomes a 20% deduction because the SEP deduction itself further reduces your business net. I don’t know why they fuss around with this percentage translation, for a sole proprietor you just want to know the max limit. So its simple, take your business net, subtract 1/2 of your self employment taxes, and take 20%. Same calculation for the employer side of the solo 401k.
I see.
So both SEP-IRA & Solo 401K is post SE Tax?
You'll still need to pay based on your AGI before SEP contributions?
I got 15,000 not 11,152
You’re hired! 🤣
I think it changes by year.... TCJA changed some stuff?