Anti Inflation Labor


Labor is good because inflation is beyond statistics.  Labor Day is a good time to remember the value of labor.  Real inflation is why we should never give up our ability to have a fulfilling passion to serve with a labor of love.

A recent Forbes article about how the Consumer Price Index  does not really reflect inflation (1) shows why the  government has incentives to keep inflation statistics as low as possible.  A higher CPI gives 80 million people cost of living rises for Social Security, food stamps, military and federal Civil Service retirees and survivors, and children on school lunch programs.

The article also shows how over the past 30 years, the government has changed the way it calculates inflation more than 20 times.  The Forbes article suggests that real inflation now is about 4.9% price rise per annum instead of the 0.2% reported by the Bureau of Labor Statistics.

A CNCB article says “Inflation is Actually Near 10% Using Older Measure” (2).

The CPI charts below from shadowstats.com (3) shows inflation estimates as if CPI was calculated in the 1980 and in the 1990 mode.  These estimates (about 4% from the 1990 calculations and 9% from the 1980 calculations) support the Forbes and CNCB articles.  Whatever the real number, all it takes is a trip to the grocery store to know this, “the cost of living for basics (food, clothing, shelter) is higher than the government stats suggest.

Inflation Charts

Click on charts from shadowstats.com to enlarge.

Real inflation is one of the most important statistics for our future financial well being.  If any of these figures above are correct, let’s forget the percentages and look at what inflation will do to the actual value of your purchasing power.

If we have $100,000 in savings and real inflation is 4%, in ten years your $100,000 will have the purchasing power of  $67,556.  We’ll need  $148,024 to have the purchasing power of $100,000 today.

If inflation is somewhere between 4% and 10%, say 7%, then our $100,000 will have the purchasing power of $50,834.   We’ll need $196,715 to have the same purchasing power in ten years.   If the 10%  estimate is correct, our $100,000 will have the purchasing power of today’s $38,554.  We’ll need $259,374 to buy today’s $100,000 worth of goods.

Look 20 years out and lookout!  At 4% inflation $100,000 buys $45,638 worth of goods. We need  $291,112 to be even with $100,000 of today’s purchasing power.  At 7% inflation $100,00 has $25,841 of today’s purchasing power and requires $396,968.   10% inflation reduces $100,000 to $14,864 and requires $672,749 to buy the same amount as today.

The simple reality is that most of us will have to both earn more than we spend and invest wisely to keep up and get ahead.  Fortunately the process can be fulfilling and fun.

Never Give Up the Ability to Serve and Sell in a Fulfilling Way.  The ability to serve is ultimate inflation fighting tool!  Avoid the three prong crunch that’s robbing most people of their purchasing power.  First, many stock markets are a poor value and September and October are the months when markets are mostly likely to fall.

Second, The US dollar has risen so high it offers a bad value.  Third, low interest rates mean supposed safe investment don’t come close to keeping up with inflation.

We are forced to assume more risk in our investing or let the system rip us off with inflation.  Plus most of us will also have to earn beyond our investments as well.   This is good because the process can make us happier when we have missions we love.

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Labor’s Ability to Sell.  Labor’s Ability to Satisfy.  Labor’s Ability to Beat Inflation.

Money does not guarantee happiness but up to about $75,000 a year of income, money does help.  If you are turning your passion into profit, then it is even easier to be content with your labors.   The value of labor rises with inflation.  That $75,000 threshold will be worth $38,126 in ten years if inflation is 7%.  $75,000 of today’s purchasing power will require $147,536.

Good labor is not drudgery and does not have to be work.

The beauty of learning to serve in a fulfilling way is the process of earning can be fun.

Take the example of Denis Malloy’s new book  “Eat Local Anywhere”.   Our  course “Self Fulfilled How to be a Self Publisher” helped Denis write this book.

eat local anywhere

Denis’s guide is for local restaurants in different parts of the world that are not specifically designed to attract tourists.  They are restaurants featuring authentic, local cuisine for local residents.  The moderate prices on their menus and the authentic representation make these great places to eat as you travel.

Learn more about Denis Malloy’s “Eat Local Anywhere” at Amazon.com

To research this book, here are a few of the places Denis had to travel so eat in many of the restaurants there.

Brussels, Belgium

Buenos Aires, Argentina

Quito, Ecuador

Punta Del Este, Uruguay

Santiago, Chile

Montevideo, Uruguay

Paris, France

Sait Jean de Luz, Pyrenees-Atlantiques,  France

Sheboygan, Wisconsin

Del Ray Beach, Florida

Do you think his research was drudgery?  Look at the service he provided, a valuable guide to good restaurants offering great food and low prices. here is a bigger social element here.  By helping promote local restaurants that serve good local food, Denis is helping short circuit big agri business and  chains that increasingly dominate commerce and pollute our bodies and the environment.

In addition Denis gained enormous tax advantages.

Fight inflation, reduce tax, help the world, be fulfilled.  Never give up the ability to serve.

Our upcoming Value Investing Seminar features many cash savings ideas via tax reduction.

Gary

Learn Fun & Profitable Tax Secrets

Imagine this, micro businesses are such good ways to create wealth and reduce tax that even cruises can be tax deductible.

Small family owned businesses have some of the best tax benefits.

Micro businesses have huge tax savings using really conservative strategies.

conrad oertwig

Conrad Oertwig (far right) after a seminar when delegates visit our North Carolina home.

This is why I am delighted that our tax preparer, Conrad Oertwig, who is a master of tax savings information, has agreed to speak at our October 17-18, 2015 Value Investment Seminar.

Conrad Oertwig can assist you on tax matters.  IN FACT THIS FALL, Conrad will be offering a course and personal service on ways that one-person and family business owners can have more cash via tax savings.   Conrad is offering a report on seven ways to put more cash on the table when you earn and is releasing a course on how to save taxes this fall.

Conrad’s report is “7 Secrets to Paying Less Tax… for the One-Owner Business”.  He sent me this note to share with you about the report.

From: Conrad Oertwig

One hard fact of life is that taxes are cash.  It’s a mistake to think of taxes as taxes.  If you want to create more net worth, you need to think of taxes as cash.

How much tax cash are you leaving on the table? Thousands? Tens of thousands?

Here are just three of seven secrets I will share with Gary Scott readers at the October 17-18 Value Investment Seminar and in my report.   Learn how to pay less tax, have more cash, and build your net worth.

Secret # 1: Gain $12,976 by using two vehicles for business.  In the past, your tax adviser likely told you to drive one vehicle for business and the other vehicle for personal purposes. This old advice made it easier to claim the one car as a business car because no business mileage log was required back then. But that’s no longer true.

Today, tax law requires you to keep a mileage log to prove business use. That changes the game. With today’s rules, you gain nothing by using only one car. But the new mileage log rule gives you a possible opportunity to increase your tax deductions.

First, you might ask: Will the IRS allow me to use more than one vehicle for business?

Yes! The IRS official method for computing business use of a single vehicle is to divide business miles by total miles driven. IRS Form 4562, which is filed by proprietorships and corporations, contains spaces for up to six vehicles. In other words, yes, the IRS recognizes that you can drive more than one vehicle.

Here are the two basics that make the two-vehicle strategy work:
1:  You drive more miles than your spouse, and
2:  Both vehicles are somewhat close in adjusted basis.
To see if you can benefit from this two-vehicle strategy, and by how much (the minimum amount, really), apply the arithmetic from the before-and-after example below to your vehicles.

Before. You drive 2,000 personal and 28,000 business miles on your vehicle (93% business). Your spouse drives 8,000 personal miles on vehicle 2. Each vehicle has an adjusted basis of $24,000. Your maximum depreciation and/or Section 179 deduction is $22,400 (93% times $24,000) on the one vehicle you currently drive for business.

After. You switch vehicles with your spouse every week. You now have 73.7% business use of vehicle 1 and 73.7% business use of vehicle 2. This produces $35,376 in maximum depreciation and/or Section 179 deductions (73.7% x 2 x $24,000).

You gain $12,976 in new deductions ($35,376 minus $22,400). You did not have to drive one mile further or spend one additional penny. You simply had to know (as you learned here) that this strategy could work for you.

Secret #2:  Have a second office in the home.

Have you been told that because you have an office outside your home that you may not have an office in the home?  That’s wrong!

IRS publication 463 states, “You can have more than one business location, including your home, for a single trade or business.”  Learn why in the free report due to IRS publication 587 you want your office in the home to qualify as an administrative office.

Secret #3: Travel by cruise ship and deduct up to $680 a day.

When you know the rules, it’s easy to travel to a business meeting by cruise ship rather than by airplane or other mode of transportation.  Tax law provides various ways for you to deduct a cruise.  The free report shows an example of a trip to St. Thomas in the Virgin Islands from California or New York.

Learn about IRS Regulation 1.274-4 that gives you two one-owner business friendly rules that you can use to your benefit:

1:  The United States means the 50 states and the District of Columbia.
2: Transportation cost to a foreign destination for seven days or less, excluding the day of departure, is not subject to an allocation between business and personal days.

In the example if you fly to Miami, Florida, board a cruise ship that will take five days to arrive at St. Thomas your deductions will include the cost of:

1 :  Travel to Miami
2:   Cruise ship fare to St. Thomas (not to exceed tax law’s luxury boat limits that range in 2014 from a low of $566 to $680 per day, depending on the dates of travel)
3:   Food and lodging in St. Thomas
4:   Airfare to Miami
5 :  Travel from Miami to home

You have to admit, tax knowledge can be fun which is why I want to send you this free report.

I specialize in “nuts and bolts” tax strategies that bring tax law to life so that business taxpayers and professional tax advisers can put the law to work for them.  In fact, my mission is to clarify taxes so that you take control of your money.

Plucking common sense from the tax law is time consuming and difficult work.  Yet, after more than 25 years, I still get great satisfaction when I can clarify and extract tax dollars from the tax law not only for your pockets but also to add to your net worth.  In fact I have extracted over 400 tax savings tips and would like to share the most important lessons with you so am creating a course that will share seven tax secrets each month for the next year.

Sincerely,

Conrad Oertwig

Learn how to have a tax advantaged one person or family owned micro business.

Conrad has dozens of tax savings secrets he will explain at our October 17-18 Value Investment Seminar.   To help you get an early start, we will send you Conrad’s report “7 Secrets to Paying Less Tax… for the One-Owner Business”, when you enroll in the seminar.

Get seminar details here

 

(1)  www.forbes.com Real-Rate-of-Inflation Don’t Bother With the Cpi

(2) http://www.cnbc.com Inflation Actually Near 10% Using Older Measure

(3)  www.shadowstats.com Alternate Inflation Data