100R | Know the Rules

Spela upp

100R | Brad and Jonathan explain how simply knowing the rules can save you thousands on taxes and college financing, Brad talks through the IRA Conversion Ladder and Capital Gains Harvesting, and a few updates from the community.

• The financial independence movement is growing, and seeing a lot more press coverage.
• Messaging matters: The Wall Street Journal published one article with two different headlines.
• Pursuing financial independence isn’t about buying brown bananas, despite what some media would suggest.
• Brad reached financial independence with intentionality about his priorities in his life.
• Brad and Jonathan don’t aim to tell people what decisions to make in their life, just give options and information.
• What did Brad’s family do to reach financial independence?
• • Housing: chose to move to a less-expensive cost of living area
  • Cars: Brad & his wife drive 15-year-old cars
  • Food: don’t go to restaurants often
• Set up a life that doesn’t cost that much.
• Pursuing financial independence actually allows people to pursue jobs that they love.
• If life costs a lot and someone is in debt, it’s very hard to walk away without taking major risks.
• Knowing tax rules is a huge component of pursuing financial independence.
• Knowing the rules in regards to paying for college makes a huge difference in how much financial aid your student might be eligible to receive.
• A message from Matt about researching the actual requirements necessary for a job in nursing – the cost of nursing school can range from a few thousand dollars to more than $100k.
• Studying nursing in a less expensive area still gives you qualifications to practice anywhere in the U.S., with a potentially huge payoff.
• Roth Conversion Ladder & Capital Gains Harvesting – the goal is to pay little or no tax.
• Roth IRA Conversion Ladder:
• • Starts with traditional IRA/401k.
  • If you want to retire before 59.5, taking money out is taxable income.
  • If you’re not collecting significant income, taking money from an IRA is unlikely to push you into a high tax bracket.
• Capital Gains Harvesting
• • If you’re income is low, your tax bracket can be incredibly low.
• Email from Dan explaining how he and his wife paid off many of their debts, found a way for his wife to be a stay-at-home mom, and started a small side hustle.
• Brad shares a frugal win of the week at the optometrist.

For more information, visit the show notes at https://choosefi.com/100R