Category Archives: Tax Benefits

We all have to pay tax as responsible citizens of the United States of America. But there are ways to pay tax more efficiently and keep more money for yourself.

Real Estate Investing

Real estates always beat stock market.

Do you have what it takes to be successful in real estate investing?

Everyone wants to be successful in building wealth. And real estate investing is one of the greatest ways to do so.

The whole real estate investing is about learning how money works, how to find money and "make" money magically. It's this challenge that makes real estate investing fun and exciting.

I started out with using equity in my own primary residence. I don't have any fix-and-flip experience on paper, but I do know how to buy-rehab-rent. I'm currently planning to rent my current home out, and use my owner-occupant status to qualify for a home loan to buy my next property. It's easier to qualify for owner-occupant property loan than an investor's property. Besides, hard money lender won't lend on owner-occupant, and they only lend up to 50-70% of value.

There are 3 basic elements to real estate investing: money, knowledge and deals.

Do you have these 3 elements to succeed?

1. Money

This is the biggest challenge for most people starting out. Most of us don't have a couple millions sitting around waiting to be spent. Besides, as we all know, Honolulu real estate is one of the most expensive, so the initial cash needed is a big challenge.

But still there are ways to find that money you need. And the word we love to use in real estate investing is "leverage". It basically means stretching what you have to accomplish more.

Remember, this money does not need to be your money. It can be and preferably other people's money.

For example, you have $100,000 sitting in your savings account earning 0.05% interest from the bank. Instead of earning 0.05% and being taxed every year on that earning, you decide to use that money to invest in real estate.

You have 2 options to do so.

One, buy a small condo with the $100,000 all cash. Second option, buy 5 small condos by putting 20% down on each, and mortgage the remainder 80%.

It's true, with the first option, you save on mortgage interest and closing cost. But you're missing out on the earnings.

Say, each of these condo gives you $200 a month cash flow. With 5 properties, your cash flow would be $1,000 per month vs $200. And from the article, Why Buy Rental Properties? you'll realized that you not only have 5 times the cash flow, but you also have 5 tenants paying down your mortgage and building your equity each month, you'll have 5 times the tax-deductions, and your real estate portfolio also appreciates 5 times faster.

So, are you ready to find some money for investing? Here's a list to give you some ideas:

Be Your Own Bank

Conventional Mortgages

Home equity loans or line of credit


Self-directed IRA

Seller financing

Friends and family - I prefer to not get them involved. Other investors may have a different opinion.

Related articles: Hidden Down Payment

2. Knowledge

The next thing you need is knowledge. No one is born to know how to invest in real estate. Even seasoned investors spent many years and experienced many failure to become successful.

My motto always is imitate the person who you want to be. If you want to be a successful real estate investors, get a mentor and see what they're doing. Also read up on books and blogs. There are tons of free resources on the internet to start.

Avoid scammers who promise you the Babylon for a big sum of money.

This website is a good place to start. I use this site as my running notebook for real estate investing ideas. I would also be constantly updated the information here as new information appears.

3. Deals

Ok...nothing would happen if there is no deals. This is a tricky one. With Honolulu real estate being notorious for being very expensive, many investors shy away from investing here locally and choose to invest in cheaper mainland location.

I, on the other hand, prefer to invest here. To me, investing out-of-state is risky because you lose all your control. You have to depend on your real estate agent and property manager to manage everything for you. Even those turnkey properties are still not 100% foolproof.

Trust me, you can find good deals here. You just need to know "what" you're looking for. Otherwise, a deal will just fall on your lap, and you wouldn't even notice. I have a bunch of criteria that I'm looking for when I'm hunting for deals. Properties that provide good cash flow, I keep for rentals. Those that provide poor cash flow, they'll be fix and flip.

Finding the good deals goes hand-in-hand with your knowledge. You need to know your local market well. This is one reason why I insist on investing only in Honolulu. I live here and know the market well. I can easily drive over the check on a neighborhood. Pictures are great, but you should not trust everything in the pictures.

Related article: Search Short Sales and Foreclosures

I once went to a showing for a multi-family property. The pictures and everything looks great. I went to the location, and found a bunch of people and children sitting by the parking lot. The adults just sitting around chitchatting, and kids running around and riding their bikes. Obviously, a low-income pocket in the area. Even though the house is brand-new and would potentially generate a pretty good cash flow, I skipped this deal. One of my criteria is that the properties have to be in a decent neighborhood.

In real estate investing, we often say "when you find the deal, you'll find the money to close it."

Make Money with Your (dream) Car

Make Money with Your Dream Car

Turn Your (Dream) Car into A Money-Making Asset

All we business- and money-savvy few knows that a car is NOT an asset, unlike what the banks like to tell everyone.

Our car is a liability that keeps the expenses going each year and keeps depreciating every second.

One of my goal for financial freedom is drive my dream car for FREE.

First of all I have not acquired my dream car yet. It would have been against all the "Millionaire Next Door" principles. I have to amess my wealth first.

So what does uber have to do with my financial goal of driving my dream car for FREE?

Let use my current car as an example. I drive a 2014 Prius II. Here's my breakdown of my monthly car expenses:

Car payment $350
Gas $40
City & County registration $25
Auto insurance $67
Safety check $3

Remember, you don't get to write off any of these expenses on you tax return if you're AN EMPLOYEE, and does not own any business.

Now with uber, you're using your beloved vehicle to generate income as a sole proprietor, which switch you to a business entity.

Say you make $900 a month with uber, you are now $415 richer after all your usual monthly auto expenses. This is what I mean by drive for FREE.

Now apply this same principle to your dream car. You got the idea?

This is not it yet. At the end of the year, you can deduct your auto expenses (prorated for the portion you use your car for your uber business).

In order to get your tax deduction for your auto expenses, remember to keep good mileage record. This will help you determine the percentages of your car that is used for business to generate income. Say you drove a total of 14,000 miles this year, and out of that you drove 7,000 miles making money with uber. In this case, you can deduct 50% of all your auto expenses, don't forget you can deduct your car washes too.

Turn you car into a money-making machine with Uber Honolulu.

If you love meeting people, driving uber is super fun...

If driving strangers around is not your thing...consider renting your car out when you're not using it.

Just like Airbnb and

You list your car and keep a calendar of when it's available. Then wait for some interested party, then you meet, you check their license, insurance, etc.

For a limited time, you can earn up to a $100 bonus by listing and renting out your car as a new host. Your bonus will be 25% of your earnings for trips you approve in the first 60 days, up to $100.

Check it out at

Same as with driving Uber, you can still write off vehicle expenses, such as auto insurance, car washes, gas, maintenance, etc.

Related article: Deducting Business Expenses

This is how the US government rewards people who make an effort to make a better life for themselves.

Pay Off Your Bad Debts with the Best Debt Consolidation Strategies

Pay off Your Bad Debt with the Best Debt Consolidation Strategy

Do you have student loans? Car loans? Mortgages? Credit card debts? Are you having trouble paying off your debts? Are you stressed out by all the debts you have?

33% or 77 millions of American don’t pay their bills on time and 39% carry credit card debt from month to month.

We live in the wealthiest country in the world, but we always have money problems.

Having debts in your life is not fun. It’s fun at the moment when you make your purchase. It’s human nature to purchase for emotional reason, then try to justify our purchase with logic later.

Debt is like a tumor. If you don’t do anything to stop it and continue to feed it with more spending, it grows rapidly. Even if you leave it a lot, it continues to grow.

The magic of compound interest that works wonders for us growing our money also works wonders for the banks and lenders, when it’s their money, and we’re paying for it.

Debt becomes a way of life. Consumer debts is one of the biggest obstacles to achieving financial freedom and retiring rich.

It’s important to have a strategy to get rid of all your debts in life and start building a solid financial foundation.

Here’s the best debt consolidation strategy:

“What do you do when you find yourself in a hole? Stop digging!”

The very first thing to do is to set your mind to be debt-free, and stopping spending. Write “Want or Need?” in a piece of paper and put that piece of paper in your wallet. Every time you’re about to spend money, ask yourself if this is a need or want.

Buy only what you need.

2. Consolidate your credit card and consumer debts with a low interest line of credit

Revolving high-interest credit card debt is one of the worst types of debt because it can quickly grow into an unhealthy financial situation. Let’s look at an example of the true cost of using a credit card.

Credit card minimal payment

In the above scenario, you end up paying $6,173 in interest, which is $1,623.29 more than the original credit card balance. However, if you commit to paying slightly more each month, you can pay off the card’s balance in half the time and pay much less, only $2,574, in interest.

Paying Extra Each Month

These examples show why it’s important to strive to pay off credit card and high-interest loan debt sooner rather than later.

• Itemize all your outstanding credit card debt or loans from the highest to the lowest interest rate, and list the monthly payments for each.

• Pay more than the minimum – as much as possible within your budget
– on the credit card/loan with the highest interest rate. Once you pay off that credit card/loan, begin paying off the next highest interest rate credit card/loan.

• Consider transferring credit card/loan balances to a card with a low interest rate that is offering a promotional, no fee transfer option. Or, for an account that is charging more than 14 percent interest, call the credit issuer to ask for a lower rate, such as 11 percent.

There are many companies out there that offer debt consolidation loan. However, many of them still charge high interest.

A better option is a line of credit from your local banks or credit unions. Credit unions usually have more competitive rates and easier qualification requirements than bigger national banks.

If you qualify for a personal line of credit, you can use this line of credit, which acts like a credit card, to pay off your high interest-rate debt faster.

If you are a homeowner, you can also consider taking out a low-interest home equity line of credit to pay off your debt. Although the home equity line of credit is still debt, the interest accrued is usually tax-deductible. As always, check with your CPA to be sure.

Plus, you'll always have an emergency fund available.

A line of credit allows you to take out only what you need. You don’t have to take the full line of credit out like a loan.

Another benefit of a line of credit over conventional loan is the interest accumulation. In a conventional LOAN, such as mortgage, car loan, personal loans, interest is calculated by amortization. Your payment is the same every month for the duration of the loan, but you’ll be paying more interest in the beginning, which means you’ll pay off your loan slowly.

On the other hand, interest on any line of credit is calculated as simple interest, which means you only pay interest on just the portion of the loan that you borrow. And interest is calculated on a daily basis. So if you use your line of credit like your checking account - putting your income into the line to bring down the balance, you'll pay less interest. Because it is a line, you have to flexibility to use the credit each month, as long as responsibility is exercised.

A friend of mine paid off $8,000 debt in just one month with his $12,000 personal line of credit. He uses the money from the line of credit to pay off his outstanding personal loan, which is the $9,000. Then he just keep attacking his line of credit balance with his cash flow.

When he is putting his monthly income into the personal line of credit, that deposit is considered his payment, which is obviously greater that the minimal payment. So that helps to improve his credit score.

3. Pay off your mortgage in 7 years with a home equity line of credit.

If you have a mortgage, try to pay it off as quickly as you can by paying additional principal each month. Don’t refinance, even if the rate is better.

When you refinance, you’ll repeat all the escrow, appraisal and closing costs. Besides, refinancing means you re-start your 30-year all over again, which means you’ll be paying mostly interest, which does not help you pay off your mortgage.

4. Make more money by starting a side gig or business

Now we have a few strategies in place, we need to look into making more money to help speed up your debt elimination process.

Think about it. You got into this position in the very beginning because you’re spending money that you don’t have. So it makes sense to find ways to make up this money and get yourself out of debt.

Being an uber driver is one of the easiest way to make money right away. You just need to have a functional 4-door car with all legal license, insurance and inspection, etc. Download the apps, register and you’re good to go. You get paid once a week. You can easily get $20 an hour taking people to their destinations and meeting new people.

You can also join the cause in revolutionizing the financial industry. You’ll earn while you learn financial concepts and help families like yours become financially independent. Pay is handsome.

Debt consolidation does not need to be complicated. It requires discipline and determination. Retire your credit cards and focus on making money.

Related article: How to Make Money Work for You