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Sep 08

How to Start a Business on a Shoestring Budget Part 2

Dwayne Ross Training and Development is dedicated to always providing you information you can use. No superfluous information here.

Get a Biz 247 Okay so you know you should get a business but what type? Where? WHAT ETC.  The truth of the matter is there are so many things you must realize when you think of the alternative. One huge advantage is taxes. We as Anericans send a lot of money to the tax office. It’s taxes for this and taxes for that and we get lost in the storm of taxation. Business owners understand that most of what they do will benefit the fact that they are working towards a profit so… it’s usually how can i do this and make it tax deductible… Check out this excerpt from a Sandy Botkin article on what we do as consumers.

Where The Money Goes  (edited from Intorverts in Network Marketing Blog)

Ms. Quinn’s example assumed that a man was earning $40,000 per year. His wife (we will call her Lori) wasn’t working. They had more month than money. (Sound familiar?) Lori subsequently got an administrative job for $15,000 per year. You would think this would improve the family’s financial situation, but when Ms. Quinn examined the economics of getting this extra income, the results were startling!

Lori had to pay federal and provincial taxes on her new income. Since they filed jointly, the family’s combined income was what established their tax bracket. She paid $4,500 in new taxes, most of which was non-deductible, for federal and provincial income tax.

Lori had old age security withheld from her paycheck at the rate of 7.65 percent, which amounted to an additional nondeductible amount of $1,148 being extracted from her salary. She also had to commute to work 10 miles a day round trip, which is probably conservative for most people. This resulted (in 1995) in nondeductible commuting costs of $696.

Lori also had some child care expenses, which give a partial tax credit. Ms. Quinn figured that the amount spent over and beyond the tax credit was $4,250 per year.

Lori also ate out each day with colleagues, spending an average of $5 per day, five days a week. This results in a nondeductible expense of $1,250 a year. (I would love to know where she ate for only $5.)

Now that Lori has a job, she has to have professional clothing–this means a hefty dry cleaning bill. Ms. Quinn assumed that Lori’s increased expenses here amounted to an extra $1,000 per year, nondeductible, of course.

Finally, with both spouses working, Lori wasn’t in the mood to cook dinner every night. They bought more convenience foods and ate out more frequently. This resulted in increased food costs of a nondeductible $1,000 per year at minimum.

Add it all up and Lori’s take-home pay was a paltry $1,156 a year, for which she had to put up with a daily commute, an unpleasant boss and corporate hassles.   END.

If you don’t understand the truth of the matter you will continue to fall in the line of the masses. It was Earl Nightingale who said, “See where everyone else is going and then go the other way!” To Lead the Field… don’t be a follower, blaze a new trail!   

 

Talk to you later… Thanks!

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