#THREAD - #Business and #Pleasure in the money and investment sphere.
As humans, we need to learn to distinguish between what is business and what is pleasure.
#2 For example, we need to understand if we're saving for a holiday (pleasure) or for retirement (business). This distinction will help us balance our world.
#3 We need to know if we're buying a property for business (rental/investment) or for pleasure (primary residence). If we mix these, the tax and deduction calculations could become a nightmare and muddy your returns - because you paid loads of instalments from your own pocket.
#4 When you're buying a coffee at a coffee shop - are you doing it for business or pleasure? Are you doing this as a business meeting where you will learn about investing or as a casual chat? Business coffees are tax-deductible!
#5 When you invest in a TFSA, this is business (for retirement), but when you have a 32 day notice account, this is for pleasure (a holiday, emergency fund, new shoes, nyaope).
#6 Though RA's are for business, it's worth noting that you're paying for the pleasure of other people due to high fees and often lowish returns.
#7 When doing business, you need to check the calculations and make sure you're not getting ripped off.
When doing pleasure, who cares as long as you enjoy it?!
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RIP Charlie Munger (1924-2023) - the Vice chairman of Berkshire Hathaway, and right hand man of Warren Buffet. In honour, I would like to give the 10 best quotes by Charlie.
1. "Spend each day trying to be a little wiser than you were when you woke up."
2. “The safest way to try and get what you want is to try and deserve what you want."
3. “In my whole life, I have known no wise people who didn't read all the time - none, zero."
4. “The big money is not in the buying and selling, but in the waiting."
5. “You don’t have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long time."
So you want to buy into a sectional title scheme??
Well, let's talk what you should be looking for in the financials - and how to go about it. Oh, and the OTP.
So the OTP. Add a clause stating the sale is dependent on your review of the financial statements. And you have 2 weeks from it dropping in your lap to review and change your mind. Just reword it nicely ;)
Ask for the last AGM pack (if possible) - or just the annual financial statements (AFS).
Focus on the income and expenses, reserves, and outstanding debts.
6 things you should know about a tax free savings account in south Africa... We'll start with the easy ones and go to more complex things 😎
1. TFSAs a lifetime limit of R500,000, which means that an individual cannot contribute more than that amount over the lifetime of the account. There is also a R36,000 annual limit.
2. Contributions to TFSAs are not tax-deductible, but any interest, dividends, and capital gains earned in the account are tax-free.
Let's talk TAX AND RENTAL PROPERTIES!
How do you pay less tax on rental income?!
Thread below 👇👇👇
So, as you might know, rental income is taxed at your normal income tax rate. This means, if you're in the 36% bracket, you will be paying 36% income tax on all income made from property rentals.
But there has to be a way around it?
And that's what the rich and informed do ;)
You have a few choices in paying less tax in rental property: 1. More expenses and deductibles 1.1 Home loans 1.2 Betterment & Maintenance 2. less income 3. tax breaks. 4. do some funky entity dealings - not for the faint-hearted!
And a special section incl: 5. SELLING + taxes
DONT BUY PROPERTY FOR THESE 9 REASONS!! 1. Because you are prequalified/preapproved for an amount. Remember interest rates will climb and might make it unaffordable
2. Because levies are low. With bad management, these can increase. Check that the system and all finances are healthy too!
3. Because it's a beautiful home. It takes a lot of maintenance and MONEY to keep the grass greener on that side. And budget for insurance too...!
Travel tips from top places where I've been: 1. Croatia: beautiful, well priced and cheap for self-drive. Visit Plitvice, Dubrovnik and travel in a rental car so you can stop wherever you want. Booking flights via Rome tends to be cheaper.
2. Turkey: very cheap, amazing food, good coffee and worth just walking around Istanbul. We had a food checklist. Also, check out prices before you buy. Shop around. Avoid touristy places, but do try a Hammam for a scrub!
3. Vietnam: CHEAP, raw, non-touristy and worth to see all the natural beautiful sites including Halong Bay, My Son and the Mekong Delta. We lived on Pringles: x 2 size and 1/2 the price!