Spending Your Money – How Income Taxes Really Work

Most people are often unaware of how income taxes really work. They know that the government uses these taxes to spend on public utilities and programs that would benefit its citizens, but many claim ignorance when it comes down to how income taxes are processed. Income taxes, although the bane of most citizens’ existence, should be understood about how this affects most law-abiding residents of the country.

When delving into how income taxes really work, many assume that the process starts with the filing of income tax forms. This is not the case; the process actually starts when a person is officially hired by a company. During this period, both the employer and the prospective employee agree on the latter’s current wages, and sign an agreement to that effect.

Once the person is hired, he has to fill out his tax forms, especially the W-4 form, which lists down his salary information, and number of children or dependents. This is then given to the employer, so that he would know how much he would need to take away from his employee’s paycheck for the income tax.

Now that a set amount for the employee’s salary has been made, the income tax he would need to provide for can now be deducted. Starting with his gross income, which includes his current income, interest and other wage benefits, adjustments are then subtracted. This may include retirement plans taken, alimony, and self-employment taxes. The difference is now termed as the adjustment gross income.

From here, the adjustment gross income is further subtracted by any personal expenses and exemptions made, and by either standard or itemized deductions. Standard deductions are a set amount by the Internal Revenue Service, while itemized deductions include charity contributions, medical and dental expenses, home mortgage interests, and any state and local taxes incurred. The resulting amount is now the employee’s taxable income.

The main gist of how income taxes really work falls under the next process. If the overall taxable income is less than $100,000, the IRS tax tables should be used to check for the amount that the employee would need to pay based on his income bracket. If it is more than $100,000, then the employee should instead check the IRS tax rate schedules. The taxable income in these charts will indicate the person’s gross tax liability. From this gross tax liability, credits such as expenses for child care should be subtracted further. The result would be the net tax, which is the amount of money that would be required by the employee to pay.

Every time wage salary pay checks are given to its employees, the company also computes for these net taxes of all its workers, and then deposits the money in the federal reserve bank. The government uses the money deposited here for their budget.

These processes explain how income taxes really work; now that it has the money acquired form these income taxes, the government is now able to plan their budget and determine government spending based on the amount its citizens have provided for.


Two Much Needed Documents That Will Motivate You to Get Started in Real Estate Investing

I graduated college, was living with my mom in Atlanta, and had a dead-end job. However, my mind was set on being a real estate investor. I just thought it would be cool to own multi-family properties and have people send you checks in the mail.

However, that wasn’t the case at that point in time. Then, I got a better job with the government in New York City six months after graduating. While in New York, I joined a real estate group in October 2009 and met the group’s facilitator.

He was 40 years old and owned a ton of rental properties and businesses in which he purchased with creative financing.

One day, I met with him before the real estate group meeting began, and he told me these very important words in which I will never forget, “My goal for you is to quit your day job.” I’m thinking, “Quit my day job?!” I never thought it would be possible to live life without a job. I never thought someone actually believed that I can accomplish such a great feat. With the two documents discussed below, I was able to accomplish this goal five years later at the age of 30.

Like most people, I didn’t have money and I had poor credit at the start of my real estate investing career. So I wondered how will I be able to get out of this situation and be a full-time real estate investor without the confines of the “9 to 5”. I learned that I had to get my focus off of the problem and keep it on the promise only, for what you focus on expands. My mentor advised me to begin by drafting two documents. At first, I didn’t give them much weight, but I decided to take his advice being that he’s in a position that I hoped to be in. So if it worked for him, it should work for me too. Here are the documents:

i. Creed: “If I don’t buy my first multi-family investment property by xxxx (5 years from today), I ought to be ashamed of myself. I have all the resources necessary to manifest this burning desire. I am a winner–winners never quit and quitters never win”

ii. Resignation Letter: There is no template for this one–feel free to write a resignation that is very personal to you. This is a letter that you will actually turn in to your boss about five years from today. Therefore, keep it professional.

The creed and resignation letter must be posted on your bedroom door. They serve as a constant reminder of your goals every time you walk in and out of your bedroom.

Become emotionally involved with them, see yourself closing your first deal, and see yourself submitting your resignation letter with a smile on your face. Keep your mind set on these things throughout the day each and every day. These documents serve as your own personal billboards.

If you were driving down the highway, and saw several billboards advertising a particular hamburger, you may not be hungry at first. But in time, you may be hungry and decide you want to eat a hamburger. So, you will pull off the highway and take the exit to buy the hamburger.

Your personal billboards will do the same thing. After seeing them repeatedly, you’ll get over your fear, you’ll get over your laziness, and you’ll get over your excuses and take corresponding action towards obtaining your goal. Goals are only realized when you become emotionally involved with them.

As you start taking action, you’ll notice that pieces start to fall in place. The money, networks, mentors, deals and answers will come just so you won’t be “ashamed of yourself”-just so you can retire young by buying multi-family properties using business credit.

When you close on your first deal, you can use the same creed for your next goal. You can cross out “first” on “If I do not buy my ‘first’ multi-family property… ” and replace it with second and change the date. Then when you get your second multi-family property, cross out “second” and replace it with “third” and so forth. When you are at the point where you realized your dream of owning enough rental properties that replace your paycheck, make sure that you turn in your resignation letter with a big, fat smile on your face. Then, make new goals and play a bigger game.

One last thing, you only have one life. Live that life doing exactly what you dreamed about despite what society tells you to do. I hope you can take something away from this article that adds tremendous value to your real estate investing career and life as general.


Internet Marketing Explained In 5 Minutes Or Less

Internet marketing is still a complete mystery to a large
majority of Internet users. For many net users, online
marketing is seen as some foreign area of the web, populated
with silly get-rich-quick schemes and unsavory characters
ready to rip off the innocent and uninformed consumer at
the click of a mouse.

In fact, Internet marketing could not be further removed
from this unfaltering picture. In reality, Internet marketing
is populated mainly with hard working professionals promoting
and selling high quality brand products by many of the world’s
Top 500 companies.

Worldwide there are now over a billion Internet users,
representing one large global consumer base or marketplace.
The total amount of goods sold online has been steadily
increasing each year as the Internet gains in both popularity and
familiarity. Studies have shown people shop online because of
lower prices, a wider selection of products, easier comparison
shopping, and many just prefer not having to travel to stores
to make a purchase.

Handling all this online e-commerce is a whole sector of
companies, hosting providers, web designers, advertising
agencies… and so on. All this online commerce has also
given rise to a relatively new creature — the professional
Internet marketer. Someone who makes a lucrative living
helping facilitate, in one form or another, all this online

Still Internet marketing has gotten a raw deal.

If you mention to any group of professionals that you’re
an Internet Marketer and that you work full time on the Internet;
you will receive some very skeptical looks and more than one
arched eyebrow of disbelief.

Regardless of this lingering skepticism, Internet marketing
has become a viable alternative for many disgruntled professionals
dissatisfied with their working hours or conditions. It has become
a viable alternative for many people from all walks of life, from
the college student to the bored housewife to the retired doctor…
all are enjoying a part time or full time income from the comfort
of their homes.

And since the Internet is now practically available to everyone,
anywhere in the world — Internet marketing is a level playing field.
Anyone can make a full time or part time income from the web if
they truly desire it.

There are many forms of Internet marketing. There are many online
business models you can follow. There are countless ways to earn
a good honest income from the Internet. Which path you take
will be largely determined by your own work habits, your background
and what marketing style you’re most comfortable with.

Here’s a quick rundown of the most popular forms of Internet

1. The Brick and Mortar Store Online

Most major companies and retail stores have created online
versions of their brick and mortar businesses. Even if
consumers don’t buy online, many use these sites for
gathering product information before buying in the
real world. A factor many savvy businesses are exploiting
in their overall marketing strategies.

2. Online Services

Many service industries have moved online, everything
from travel to banking to dating! Again, the Internet
can be a profitable extension for any service company.

3. Internet Products/Internet Gurus

Internet marketing has a whole history of pioneers who
have forged the methods and techniques of marketing online –
opt-in lists, mini-sites, article marketing, pay-per-click
advertising, joint ventures… a brief history populated with
such names as John Reese, Marlon Sanders, Ralph Wilson,
Yanik Silver, Corey Rudl, Ken Evoy and countless others.

A whole new industry has grown around ‘How-to’ market online,
info products, workshops and web seminars — teaching
people how to market on the Internet. A marketer creating
his own product can prove very productive; as seen
by John Reese’s 2004 launch of Traffic Secrets, which earned
over a million dollars in one day. (Without a penny of paid

4. Online Advertising and Promotion

Pay-Per-Click advertising such as those offered by Google
AdWords and other companies presents another viable marketing
route. Keywords (the exact words typed into a search engine)
fuel a large portion of the web’s activity, keyword marketing
has become a major driving force behind most of the economic
transactions on the web. This is a very lucrative sector for
those Internet marketers who know exactly what they’re doing.

Then there is the whole section of SEO experts and consultants
who command high prices for positioning companies or products
in the top positions on the major search engines. Acquiring
organic Top 10 search results (SERPs) will greatly determine the
profitability of your online product or company.

5. Affiliate Marketing

One of the least understood, yet one of the most profitable
forms of Internet marketing is affiliate marketing. An online
marketer can join any affiliate program and promote its products
or services on the Internet. You market the products, find
customers for the company and receive a cut or commission
for each sale you make from your marketing efforts. These
commissions can run anywhere from 2% to over 50%. One affiliate
click can earn you anywhere from a few cents to several
hundreds of dollars.

Major third party affiliate programs or companies such as
Commission Junction, LinkShare, Amazon, Shareasale…
acts as a brokerage or go-between representing thousands of
Top Brand companies such as Sony, Apple, Dell… to online
affiliate marketers. Marketers can join a program such as
Commission Junction or LinkShare and be able to promote and
market hundred of top quality products or services online. They
can consolidate their affiliate marketing through these
third party programs.

Perhaps the most common business model for the majority
of online marketers is the last example, or a combination
of advertising and affiliate sales. Many work-from-home
professionals have adopted this business model. They have
created site or sites on the topic that interests them and
of which they have or have gained some expert knowledge.

Once these sites become established and gathering a large
amount of targeted web traffic each day, making a nice income
can only be a matter of putting the Google AdSense code on
their pages and placing a few appropriate affiliate
links on their sites.

The more traffic these marketers deliver to their sites,
the more income they earn. The more unique content they create,
the more income they earn. The more web sites they design,
the more income they earn.

What many people outside of the web marketing field fail
to realize, the Internet is a 24/7/365 business. The Internet
is always on and working for you. It is automatically producing
income for you 24 hours of the day, while you’re sleeping, while
you’re enjoying a nice meal with friends, or even while you’re
on vacation.

Internet marketing can provide you with a lifestyle that is totally
liberating — you can live and work anywhere in the world. You can
be your own boss, set your own hours and work from the comfort
of your own home. Plus your whole online Internet business can be
automated so it basically runs itself.

Internet marketing is totally flexible. You can adjust your workload to
suit your own work habits. Internet marketing is scalable, once
you have learned how to make your first dollar, it is only
a simple matter of repeating and scaling up what you did to
earn that dollar. Computers and the Internet makes it just as
easy to handle a thousand sales as it is to handle one sale.

As Internet marketing becomes better known, it will gradually earn
more and more respect. It will become a well recognized profession
that many will aspire to and follow as a life long career. Mainly because
Internet marketing will give you the freedom rarely seen in any other

It offers you mobility, a high standard of living, and a working
environment that can’t be beat. It gives you the freedom to follow
your own interests and hobbies; all the while turning those interests
into viable revenue streams that supports the lifestyle of your
own choosing. When it is all said and done, earning a living just
doesn’t get any better than this.


Education Loans – Get the Best When it Comes to Education

Education is an important and necessary medium, which imparts knowledge and skill, so that everyone can have a secured and stable future. There is no doubt that education is the spine of a civilized society, but with increasing commercialization and in an effort to provide the best, pursuing education has become an expensive affair. What about those who want to pursue higher studies but do not have the finances to cover the expenses? In a major change of stance and to assist students and their parents alike, lenders have come up with education loans. These loans take cares of all the expenses pertaining to education on behalf of the students and that too at fairly easy terms and conditions.

Education loans are easy to access and are widely available in the loan market. Through these loans, one can actually derive the funds to pay admission fees, examination fees, hostel dues, library charges, purchasing books, equipments and computers along with personal expenses. Further, these loans are open to all and can be derived by students with both good credit as well as bad credit.

The best loan deals are offered by government agencies. The federal government approves these loans in the form of Stafford and Perkins. It offers one of the best interests and has flexible repayment schedule. On the other hand, loans are also offered by private lenders. These loans are categorized in to secured and unsecured form. Secured form of the loans offers a bigger amount but can be availed only by pledging collateral. On the other hand, unsecured form of the loans is absolutely collateral free. However, the interest rate charged is relatively high.

Students with bad credit can also source these loans, but they have to produce a cosigner with a good credit score.

The main criteria to derive education loans are that students should be above 18 years and that they must have access to a valid bank account. Prior to the availing of the loans, one should make an assessment of the total expenses before hand. This way, the students can derive the exact amount and it comes in handy at the time of repayment.

With education loans, students can now focus on their studies without worrying anymore about the financial constraints.