Most of this reads like the pseudo-inspirational BS that people post on LinkedIn. Things that seem deep, but are so blindingly obvious and/or incredibly broad that they are of absolutely no value to the reader.
Yeah, I was interested in this one and hoping to find more substance on the tax mechanisms that make this possible:
Working for yourself means you can earn less income than a normal salary and still make more due to tax reasons.
When I clicked through to his "money" link, it was a category for his blog where he posts multiple posts per day on making money online. All with clickbaity headlines. Hard to take this seriously.
Edit: Ah yeah, he's selling money making courses and ebooks. This is complete spam.
The usual answer to that is you keep the money in the business entity while paying yourself a minimal salary. You spend it on business expenses (commonly stuff like travel or a vehicle or computer hardware, with some semi-plausible fig-leaf of business use), or take it as long-term capital gains later on.
The other answer that could fit the premise is a solo 401k, for the higher pre-tax contribution limit than a standard employer 401k.
I'd be surprised if there was really anything substantial besides those.
There are definite tax advantages to being self employed, but I think for most countries your total tax rate for most people would end up being around 25% to 35%.
For you to end up taking home more money whilst earning only half as much - you would need to some how end up paying a negative amount of tax as an entrepreneur.
earn less but take home more...that's not normally how tax works)
It shouldn't be the way it works, but unfortunately it is in many places. In the UK it's definitely significantly better to have your own company than be a PAYE employee.
Even without being creative at all, instead of working, paying tax and then using your post tax earnings to give your kids money, just hire them. Instantly you get another 12k tax free (or whatever the tax free allowance is). Not to mention all the stuff you can expense, being more creative with how you pay yourself (dividends have a different tax rate) etc.
He's definitely right that being self employed gives you more flexibility about how you pay taxes.
It definitely shouldn't be this way though. Just another way for the rich to keep the poor down.
Comments
Most of this reads like the pseudo-inspirational BS that people post on LinkedIn. Things that seem deep, but are so blindingly obvious and/or incredibly broad that they are of absolutely no value to the reader.
Yeah, I was interested in this one and hoping to find more substance on the tax mechanisms that make this possible:
When I clicked through to his "money" link, it was a category for his blog where he posts multiple posts per day on making money online. All with clickbaity headlines. Hard to take this seriously.
Edit: Ah yeah, he's selling money making courses and ebooks. This is complete spam.
The usual answer to that is you keep the money in the business entity while paying yourself a minimal salary. You spend it on business expenses (commonly stuff like travel or a vehicle or computer hardware, with some semi-plausible fig-leaf of business use), or take it as long-term capital gains later on.
The other answer that could fit the premise is a solo 401k, for the higher pre-tax contribution limit than a standard employer 401k.
I'd be surprised if there was really anything substantial besides those.
Yeah, that one caught my eye. If this is focused on U.S. readers, that advice is extremely suspect.
There are definite tax advantages to being self employed, but I think for most countries your total tax rate for most people would end up being around 25% to 35%.
For you to end up taking home more money whilst earning only half as much - you would need to some how end up paying a negative amount of tax as an entrepreneur.
Indeed. In particular, I’ve seen variations of “Watch how people treat service workers” in this kind of content again and again.
It really makes me wonder who needs telling “If the person you’re with is rude to people, they might not be a nice person”.
This one seems quite obvious but many times in life we tend to look the other way, specially if we have some affection with the person in question.
People who generally don't think of service people as people, perhaps
Came to the comments expecting the typical HN putdown on top, was not disappointed.
Some of it is self evident from a young age, the rest seems silly or plain wrong (earn less but take home more...that's not normally how tax works).
Any links for actual useful and rarely shared cheatcodes/heuristics for a positive life?
It shouldn't be the way it works, but unfortunately it is in many places. In the UK it's definitely significantly better to have your own company than be a PAYE employee.
Even without being creative at all, instead of working, paying tax and then using your post tax earnings to give your kids money, just hire them. Instantly you get another 12k tax free (or whatever the tax free allowance is). Not to mention all the stuff you can expense, being more creative with how you pay yourself (dividends have a different tax rate) etc.
He's definitely right that being self employed gives you more flexibility about how you pay taxes.
It definitely shouldn't be this way though. Just another way for the rich to keep the poor down.
Cheat 37: people will upvote based on the title, not the content, regardless of education or social status.