I just put the finishing touches on my latest book, Guaranteed Wealth – Smart Money Habits For Every Stage of Your Life.

I will be sending my manuscript over to my publisher this week.

Who would like to review my book and provide me with feedback?

I will send the first 5 who respond, via email, a copy of my manuscript.

TOM@RICHHABITS.NET

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Creating success, and it’s byproduct, wealth, is never easy. However, it is made easier in certain countries.

Some countries take significantly less in taxes than others, which provides more of an incentive for individuals and businesses to pursue success.

The less tax you must pay to your country, the more of your success you’ll be allowed to keep.

No matter how successful you may be, however, if your country’s tax system punishes success with excessive tax rates, building wealth will be very difficult.

THE GOOD

[Read more…]

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Tom Corley: How to Develop Rich Habits – TPS352

Here’s the link to the interview: https://prosperityplace.com/tom-corley-how-to-develop-rich-habits-tps352/

Tom Corley is an internationally recognized authority on habits and wealth creation. His inspiring keynote addresses cover success habits of the rich, failure habits of the poor and cutting edge habit change strategies. In Tom’s five-year study of the rich and poor, he identified over 300 daily habits that separated the “haves” from the “have nots.” Tom is a bestselling and award-winning author. His books include Rich Habits, Rich Kids, Change Your Habits Change Your Life and Rich Habits Poor Habits.

Highlights

• After someone asked Tom, “What am I doing wrong?” he started doing research about habits of the rich and poor.
• Rich habits are visualization, reading, mentors, surrounding yourself with successful people.
• You pick up the habits of the people around you.
• A positive mental attitude opens up your whole brain. A negative mindset shuts down your brain.
• Tom suggests that you write your future story.
• I ask Tom what he does to turn wanting into action.
• Tom has developed the habit of waking up early and writing every day.
• The only thing you have to do is start. If possible, find someone with whom you can share what you are doing.
• Action creates motivation.
• It’s important to have people to share with.
• People have different rhythms, so you have to find yours.
• Tom talks about “alpha time” which happens when you first wake up and is a creative time.
• Poor people have do-nothing habits that are unrelated to anything productive.
• Poor people don’t have a vision of who they want to be.
• After you create what you want and your why, find out what you have to do to get there.
• Envy and keeping up with others are poor habits.
• Stuff doesn’t make you happy.

As you know, I do a lot of interviews. mostly with the media but I occasionally do podcast interviews.

I was recently interviewed by Tayler Cathrine, host of The Thriving Military Wife Podcast.

If you are a military wife, this podcast will interest you. The host and guests share specific information that applies to military families. Finances, deployment challenges, moving, parenting, etc.

Starting February 25, Cathrine will share with subscribers (free) her complimentary interview series, where more than 20 experts share advice.

I am one of the experts interviewed for this new podcast.

So, sign up and listen in. Here’s the link to the subscription page: Thriving Military Wife

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Wealth is a byproduct of success. It is the carrot at the end of the stick. Take away that carrot and you remove the desire to pursue success.

Socialism not only takes away that carrot, it extinguishes the success traits that make success and wealth possible: hard work ethic, creativity, persistence, genius, good habits, overcoming fear and the courageous pursuit of dreams and goals.

Success is therefore impossible in a Socialist society.

Thankfully, America’s founding fathers knew this.

In order to encourage the pursuit of success in America, our founders built into the framework of our US Constitution certain principles that fuel the pursuit of success. These were liberty, limited government, and property rights. Property rights being the right to keep the wealth you produce without it being taken away by government.

These principles enabled America to become the economic behemoth it is today.

These principles are codified into what we call the American Dream. But, the American Dream is different things to different people.

[Read more…]

5 money mistakes that keep you from getting rich

• We all make errors, yet there are a few money mistakes the super-rich generally don’t make.
• One of them is they don’t follow the pack — whether it’s a fad investment or panicking during a market sell-off, according to author Tom Corley.
• They also seek expert advice and look beyond the stock market for investments.

Michelle Fox | @MFoxCNBC

January 14, 2019 CNBC.com

The rich – they’re just like us, right?

Well, not exactly.

If you analyze the habits of wealthy people, some trends begin to emerge. First, they don’t follow the pack — whether it’s a fad investment or panicking during a market sell-off, according to Tom Corley, an author who has studied self-made millionaires.

Second, they work at work at becoming successful every day. And it doesn’t have to take hours of their time.

Where the ultra-rich invest during a volatile market   7:30 AM ET Sun, 18 Nov 2018 | 03:13

Corley, who has written a number of books, including “Rich Habits,” likened the wealthy to trees, which tend to grow slowly.

“Every day, they do certain things that help them to change into the individuals they need to become in order for success to visit them,” he told CNBC. “This change is not noticeable from day to day, month to month or even year to year. But after many years, the change is obvious.”

Daily habits could include increasing your knowledge by going to school, attending seminars and picking the brains of mentors. You can also develop and perfect your skills by practicing them, as well as cultivating relationships with successful people.

Berkshire Hathaway Chairman and CEO Warren Buffett, also known as America’s billionaire next door, has said the best thing people can do is develop their own talents. “The greatest asset to own is your own abilities,” he has told CNBC.

And, while we all make mistakes — there are a few that the super-rich generally don’t make.

Errors cost money, and while wealthy may have a lot of that — they certainly don’t want to lose it.

Here are five money mistakes that may be keeping you from getting rich.

1. Doing it yourself

Hero Images | Hero Images | Getty Images

When the stock market drops — as we saw in December, when major indexes all dropped at least 8.7 percent — you have to know what you are doing or you can get burned. If you don’t have time to spend a few hours a day tracking the market, the cost of a good financial advisor is well worth the investment.

Ivory Johnson, founder of Delancy Wealth Management in Washington, D.C., said most wealthy people don’t try to manage their money themselves — they hire financial planners, CPAs and attorneys to protect their assets and reduce their risks.

And when are risks the highest? When markets start taking investors on a roller-coaster ride.

“When investors are stressed, the odds of making a bad decision increase,” he said. “Wealthy people mitigate that stress by having good advisors.”

While some may balk at paying a fee, the returns on that money will, most years, be well above that amount. During the bad years, your advisor can help you mitigate your loses to preserve your wealth for the long haul.

2. Not diversifying

Jeffrey Basinger | Reuters

A beachfront residence is seen in East Hampton, New York.

The average investor may have stocks and bonds in their 401(k) savings or investment portfolio. The rich branch out and diversify.

Remember Enron? Many employees of the energy giant bought into the company’s sales pitch so much that they put all of their retirement savings in its stock. And when the firm went belly up — so did all of their savings.

In addition to stocks and bonds, the ultra-wealthy invest in things such as real estate, limited partnerships and private markets, Corley said. That way, if stocks, for example, are having a really bad year, you may make up the difference with a good year in real estate or vice versa.

Another appealing factor that draws a lot of wealthy investors to real estate: It may provide an extra income stream. In addition to the potential appreciation of that property, if you rent it out — that’s an immediate source of income, which can give you a nice cushion should you lose your primary job.

And of course, you won’t be as worried in a year when stocks are down.

“Most wealthy families have real estate holdings because it offers recurring revenue, tax benefits and creates equity,” Johnson said. “It also puts less pressure on their stock portfolios to perform.”

3. Fad investing

Artur Widak | NurPhoto | Getty Images

A woman passes in front of a Bitcoin exchange shop.

The ultra-wealthy don’t get caught up in the latest fads, pouncing on the next “new” thing.

Take bitcoin, for example. The cryptocurrency took off in 2017, making instant millionaires out of some early investors. That spurred a lot of people to jump in and try their hand at making a fortune.

That could be fine – if you’re a professional trader or just want to play around with a little gambling money. Yet fads like bitcoin are risky business: The cryptocurrency has since fallen a stomach-churning 70 percent in the past year.

Buffett, who’s famous for his philosophy of investing in what he knows and then holding on to it for the long haul, told CNBC last year that “in terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.”

The legendary investor, who is worth $80 billion, according to Forbes, believes you have to know what you know — and stay the course.

“What counts is having a philosophy … that you stick with, that you understand why you’re in it, and then you forget about doing things that you don’t know how to do,” Buffett said at the Berkshire Hathaway annual meeting in 2018.

Those who are caught up in the “follow the herd” mentality may do so because they are focusing on “one thing they think can make them rich overnight,” said Ivory at Delancy Wealth Management. “It doesn’t work.”

4. Lack of a long-term plan

Charles Platiau | Reuters

Visitors look at the painting “Le Printemps”, 1881, by French painter Edouard Manet during its presentation at Christie’s Auction House in Paris October 22, 2014.

Wealthy investors are patient and don’t necessarily think about short-term returns.

“Most people don’t sit down and actually plan out how they are going to invest their savings over the next 20 years,” Corey said. “The wealthy do. They just don’t wing it.”

And it’s not just about making money for themselves, it’s about creating generational wealth that can benefit their grandchildren and beyond.

“Instead of buying a painting for the living room, they’ll spend extra money for art that can appreciate,” Ivory added. “They join clubs and organizations so the relationships they make will offset the fees, even if they don’t realize it for several years.

“This demands foresight, estate planning and patience.”

5. Panicking

Brendan McDermid | Reuters

The volatile stock market may want to make you run for cover. Because the rich are in it for the long term, they don’t tend to panic.

They also have a lot of liquidity and financial resources they can lean on when the stock market, real estate market or other investments go south, so they don’t “need” to sell, Corley said.

For Johnson, it’s also about the world giving us what we give out.

“Anxious investors receive anxiety, and confrontational people are always engaged in some form of conflict,” he said. Meanwhile, optimistic people experience more positive outcomes.

“Over a lifetime, this becomes a habit and you’ll often find that wealthy people who are happy got that way because they were optimistic, as opposed to becoming optimistic because they got wealthy,” Ivory said.

I am happy to announce that the Rich Habits brand is expanding.

This past month I have signed the following foreign publishing agreements: [Read more…]

From Market Watch

By Bill Bischoff

Published: Nov 20, 2018 9:08 a.m. ET

The Tax Cuts and Jobs Act complicates things for people who rent out a second home

The tax rules for vacation homes require close attention.

If you own a vacation home that you use for both rental and personal purposes, now is a good time to plan how to use it for the rest of this year with tax savings in mind. Here’s what you need to know:

Rented less than 15 days during the year with more than 14 days of personal use

For a vacation home in this category, the tax rules are really simple. You need not report any of the rental income on your Form 1040. However, you cannot deduct expenses directly attributable to the rental period (rental agency fees, cleaning, and so forth). If your vacation home happens to be located near a major event — like a PGA golf tournament or a big multi-day concert — you may be able to rent the place out for a short period even at high rates and pay zero federal income tax.

Tax-smart year-end strategy: The more rental days between now and year-end, the better — as long as they don’t exceed 14 days for the year.

Rented more than 14 days with substantial personal use

Your vacation home falls into this category if you rent it for more than 14 days during the year and your personal use exceeds the greater of:(1) 14 days or (2) 10% of the rental days. For example, a vacation home that’s rented for 180 days during the year and used by you and family member for 60 days falls into this slot.

Personal usage includes use by you, other family members (whether they pay fair market rent or not) or anyone else who pays less than market rent. Personal use also includes time spent at your place by another party under a reciprocal sharing arrangement (“I use your place in exchange for you using my place”) whether the other party pays market rent or not.

Days devoted principally to repairs and maintenance are considered days of vacancy and are disregarded, even if family members are present while you work away.

The tax drill

Vacation homes in this category are treated as personal residences for federal income tax purposes. Follow this six-step procedure to account for the property’s rental income and all the expenses.

Step 1: Report 100% of rental income on Schedule E of Form 1040.

Step 2: Deduct 100% of any direct rental expenses (such as rental agency fees and advertising) on Schedule E.

Step 3: Allocate mortgage interest and property taxes between rental and personal use. See below for how to do that.

Step 4: Deduct as Schedule E rental expenses the allocable mortgage interest and property taxes from Step 3.

Step 5: If there’s any net rental income left after Step 4, deduct as rental costs allocable indirect expenses — maintenance, utilities, association fees, insurance, depreciation and so forth on Schedule E — but only to the point where you zero out rental income. In allocating these indirect expenses, consider only actual rental and personal-use days during the year, and ignore days of vacancy. For example, if you rent your vacation home for 90 days during the year and use the property 60 days for personal purposes, allocate 60% of the maintenance, utilities, and so forth to rental usage and 40% to personal usage. The 40% is non-deductible. Even so, the bottom line on Schedule E will often be zero, because the rental income will often be fully offset by deductible expenses.

Step 6: Write off the personal-use percentage of mortgage interest and property taxes as itemized deductions on Schedule A of Form 1040, subject to the new Tax Cuts and Jobs Act of 2017 (TCJA) limits for 2018-2025 (see “TCJA changes affecting vacation-home owners” below).

You are allowed to carry over any disallowed allocable indirect expenses to future years when you can deduct them against rental profits (if you ever have any).

Controversy regarding how to allocate mortgage interest and property taxes

The IRS says you should use only actual days of personal and rental usage to allocate all non-direct vacation-home expenses, including mortgage interest and property taxes. However, two Appeals Court decisions say you can allocate mortgage interest and property taxes differently, by treating actual rental occupancy days as rental days and all other days — including days of vacancy — as personal days.

Before the TCJA, the Appeals Court method was often more beneficial because (1) it allocates more mortgage interest and property taxes to Schedule A (where you could usually fully write off these expenses as allowable itemized deductions under prior law) and (2) it allocates less mortgage interest and property taxes to Schedule E, which usually allowed you to currently deduct more of the other expenses allocable to rental usage (property insurance, utilities, etc.) on Schedule E when applying the rental income limitation.

But after the TCJA changes, some vacation-home owners may benefit from using the IRS-approved method instead of the Appeals Court method. That’s because you will never get any tax benefit from allocating more interest and taxes to Schedule A than you can currently deduct after the TCJA changes. Your tax pro can run the numbers at tax return time and figure out the best allocation method for interest and taxes.

Tax-smart year-end strategy: If your property fits solidly into this category for 2018 and your expenses will comfortably exceed rental income (the usual situation), you will probably come out ahead by renting it out for some additional days between now and year-end. That way, you’ll receive more rental income (good for cash flow), and you can probably still offset all the rental income with direct expenses, allocable mortgage interest and property taxes, and allocable indirect expenses. So you’ll have that much more tax-sheltered rental income, which is always a good thing.

The bottom line

As you can see, the tax rules for vacation homes are complicated.

If you have a vacation home that is rented for more than 14 days during the year and your personal use does not exceed the greater of (1) 14 days or (2) 10% of the rental days, the home is classified as a rental property for tax purposes. (I’ll cover the tax rules for vacation homes that are classified as rental properties in next week’s column. So please stay tuned.)

TCJA changes affecting vacation-home owners

New limit on property-tax deductions: Before the TCJA, you could claim itemized deductions for an unlimited amount of personal state and local property taxes. For 2018-2025, however, the TCJA limits itemized deductions for personal state and local property and income taxes to a combined total of only $10,000 ($5,000 for those who use married filing separate status). This limitation can affect your ability to claim itemized deductions for property taxes on a vacation home.

New limits on home-mortgage interest deductions: The TCJA also places new limits on the amount of home mortgage debt for which you can claim itemized qualified residence interest expense deductions. These limits can affect your ability to claim itemized deductions for mortgage interest on a vacation home.

For 2018-2025, the TCJA generally allows you treat interest on up to $750,000 of home acquisition debt (incurred to buy or improve a first or second personal residence) as deductible qualified residence interest. If you use married filing separate status, the limit is halved to $375,000. Thanks to a grandfather provision for pre-TCJA mortgages (explained below), this change will mainly affect new buyers (those with post 12/15/17 mortgages).

TCJA change for home-equity debt: For 2018-2025, the TCJA generally eliminates the prior-law provision that allowed you to treat interest on up to $100,000 of home-equity debt as deductible qualified residence interest ($50,000 if you used married filing separate status).

TCJA grandfather rules for up to $1 million of home-acquisition debt: Under one grandfather rule, the TCJA changes do not affect qualified residence interest deductions on up to $1 million of home-acquisition debt that you took out: (1) before 12/16/17 or (2) under a binding contract that was in effect before 12/16/17, as long as the home purchase closed before 4/1/18. If you use married filing separate status, the limit is halved to $500,000.

Under a second grandfather rule, the TCJA changes do not affect qualified residence interest deductions on up to $1 million/$500,000 of home-acquisition debt that you took out before 12/16/17 and then refinanced later — to the extent the initial principal balance of the new loan does not exceed the principal balance of the old loan at the time of the refinancing.

Home-equity debt treated as home-acquisition debt: Say you spent or spend the proceeds of a home-equity loan to build, buy, or improve your first or second personal residence. The loan counts as home-acquisition debt for which qualified residence interest deductions are allowed, as long as the applicable home acquisition debt limit ($750,000/$375,000 or $1 million/$500,000) is not exceeded.

Bigger standard deductions: For 2018-2025, the TCJA almost doubled the standard deduction amounts. For 2018, they are:

• $24,000 for married joint-filing couples.
• $18,000 for heads of households.
• $12,000 for singles.

This seemingly benign change can adversely affect vacation-home owners, because their allowable itemized deductions (including those for vacation home mortgage interest and property taxes) may not exceed their standard deduction amount for 2018-2025.