Collecting houses.

Written by Debra Lohrere


Continued from page 1

This example of course has not taken into accountrepparttar initial purchasing costs involved to securerepparttar 112708 investment property, nor has it taken into accountrepparttar 112709 rental income that you would also be receiving....I have simply used it to demonstrate thatrepparttar 112710 more assets that you can get working for you,repparttar 112711 better off you will be.

Furthermore, if you already have equity built up in your own home, it is possible to purchase an income producing property, without even having to outlay any cash whatsoever.

I will discuss this in further detail shortly, but first I would like to explain to yourepparttar 112712 miracle of compounding interest - because this isrepparttar 112713 major factor that allows an average person to create a source of immense wealth. It is a little understood concept that can have a huge bearing on your future, once you understand how it can best be utilised.

Compounding isrepparttar 112714 effect of letting something grow, and then rather than taking awayrepparttar 112715 newly created amount, you leaverepparttar 112716 whole thing in tact, and allow further growth to take place onrepparttar 112717 entire amount, and so on. Effectively making it grow exponentially.

For example. If you have $1,000.00 that is growing by 10% per year due to interest received. Then you have two options, you can withdrawrepparttar 112718 income of $100.00 that has been generated, or you can leave it where it is, and allow it to compound (earn interest on interest),

If you allow it to compound, then inrepparttar 112719 second year you will get an income of 10% of $1100.00, which is $110.00, instead of $100.00. This may not sound like much, butrepparttar 112720 longer you leaverepparttar 112721 money to compound,repparttar 112722 larger it will grow. As each year passes it will grow by a larger amount, in fact after 10 years it will be worth $2,593.75 and after 40 years it would be worth a massive $45,259.42. Remember that if you had withdrawnrepparttar 112723 $100.00 interest each year forrepparttar 112724 same period 40 years - then you would have received only $4,000.00 and would still haverepparttar 112725 original $1000.00, being a total of only $5,000.00. This means that by letting it compound you would have earned more than an additional $40,000.00.

One of easiest ways to calculate how compounding interest works with different rates of return is to become familiar withrepparttar 112726 Rule of 72.

This rule states that "The number of years that it will take for your money to double is 72 divided byrepparttar 112727 interest (growth) rate".

Therefore if you have $1,000.00 invested at 10% interest, thenrepparttar 112728 number of years that it will take for your money to double to $2,000.00 is 7.2.

72 divided by 10 = 7.2

If your money is invested at 7% interest, then it will take approximately ten years to double in value. If it is invested at 5% it will double in just over fourteen years.

The two most important aspects of compounding are one: rate and two: time.

The higherrepparttar 112729 rate andrepparttar 112730 longerrepparttar 112731 time something is left to compound,repparttar 112732 greaterrepparttar 112733 final result will be.

This is whyrepparttar 112734 sooner we start investing,repparttar 112735 better.

Visitrepparttar 112736 authors website at http://members.optushome.com.au/dlohrere/

Debra has spent several years researching the powerful medium of property investment and speaking with hundreds of other property investors. She has discovered many different strategies that have been used and the ones that have worked best. She now writes books and articles about property investment, goal setting, budgeting and how to create financial security for retirement


There Is No Such Thing As Tax Simplification!

Written by Wayne M. Davies


Continued from page 1

"We will continue our efforts to reducerepparttar burden on taxpayers and simplifyrepparttar 112707 tax code."

Can you believe it? This lady, and I mean no disrespect here toward Ms. Olson - I'm sure she's a hard-working government employee who does a great job, but this lady, in my humble opinion, has her head inrepparttar 112708 sand, as do virtually all politicians and other government authorities who have createdrepparttar 112709 ungodly monster know asrepparttar 112710 Internal Revenue Code.

The IRS changes one little rule that removes one form from only 15% of all returns filed - and this givesrepparttar 112711 IRSrepparttar 112712 right to think that they are reducingrepparttar 112713 burden on taxpayers??? (Keep in mind that there are over 100 million tax returns filed every year. So, if this Schedule B rule change affects 15 million people, that's a measly 15% of all tax returns filed.)

C'mon - what is wrong with this picture? Do you get my point?

Taking away one lousy form from a small percentage of tax returns filed - how is that reducingrepparttar 112714 burden on taxpayers? It's not! It's a drop inrepparttar 112715 bucket. It's peanuts. It doesn't even come close to making an impact onrepparttar 112716 incredible burden that taxpayers have each year on April 15.

Furthermore, how does this one little change "simplifyrepparttar 112717 tax code"? I am appalled that a government official would even userepparttar 112718 phrase "simplifyrepparttar 112719 tax code". We have never had tax simplification. Never. Never ever! Since 1913, whenrepparttar 112720 tax code was first implemented, there has been nothing but tax complications, never tax simplifications.

The rules only get more and more complicated. Tax laws only get more and more complex. The Tax Code just gets bigger and bigger. Don't letrepparttar 112721 politicians' hype fool you. Never for a minute should you believerepparttar 112722 government when they say that they are trying to "simplifyrepparttar 112723 tax code."

So, what'srepparttar 112724 average taxpayer to do? Ifrepparttar 112725 tax rules just get more complicated, how are you supposed to make any sense out of all this mess?

You only have 2 options, as I see it. One I offer tongue-in- cheek,repparttar 112726 other is "words-to-live-by."

OPTION #1: Become a Tax Professional and prepare hundreds of tax returns every year. That'srepparttar 112727 only way I know for you to become sufficiently knowledgeable inrepparttar 112728 crazy world of U.S. taxation. Obviously, this is not a viable option for 99.9% ofrepparttar 112729 population. But you getrepparttar 112730 point.

OPTION #2: Hook up with a Tax Professional. Find someone else who does tax returns for a living. Not your "family tax preparer", you know, Uncle Fred who likes doing returns and so offers to do yours for free. But an experienced tax person who does hundreds of returns every year and can help you make sense out ofrepparttar 112731 most nonsensical collection of rules onrepparttar 112732 planet.

Wayne M. Davies is author of the new eBook, "The Tax Reduction Toolkit: 29 Little-Known Legal Loopholes That Will Reduce Your Taxes By Thousands (For Small Business Owners and Self-Employed People Only!) Don't file another tax return until you visit: http://www.YouSaveOnTaxes.com/toolkit.html


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