By My personal opinion is that this is an expensive, highly risky decision. If you do this, then you will receive a huge tax bill.
The reality is, it isn’t just that you’ll be paying the tax. It’s that the tax will also be applied to the expenses. For example, if you spent $100 on a project, but you then spend another $100 on the project, that $100 is now a tax bill for the first $100, and then it will be added to the total for the entire $100.
This is a very common mistake. Just because you are putting money into a project does NOT mean you have to put 100 of it into it. That 100 is actually the cost of the project. But you do have to pay the tax on the first 100 and that 100 will be applied to the second 100.
The other thing to consider is that a project like a car repair or a home remodeling project is going to cost you a certain amount of money. If you put 100 into a project, but then spend another 100 on the project, that 100 is now a tax bill for the first 100, and then it will be added to the total for the entire 100.
For example, let’s say you have a $5,000 home remodeling project. You have to invest $2,000 of your own money. The other $2,000 is going to be used for the project, so you have $4,000 of your own money invested. $2,000 minus $4,000, which is your tax liability, is $2,000.
This is called the “adjusting” process. During this process the project owner must decide what to do with the extra 5,000 of their own money. They have to decide where to invest the extra money. They have to decide if they want to invest it for a year, a year and a half, or a year and a half. They have to decide whether or not to reinvest the 4,000 of their own money.
If you want to learn how to adjust your project, you could start with this simple lesson that starts with this simple idea: “Hey, I am going to take in a lot of money and make it worth it.” Don’t be afraid of taking what is most valuable in your project to a small amount. Just make it bigger.
Why does the new “buy now” idea seem so simple after all? It’s not really anything that is like buying now, but it’s a lot of money. You could spend it on a lot of things, like a beer, or a cheese sandwich. Or you could put it on a piece of paper and just make it like it’s about to leave. Whatever it is, it’s worth it.
the idea that you could take money and make it worth it is very simple. The trick is to actually do it. For example, you could pay off a long term student loan with your next paycheck. You could pay off a car loan with your next paycheck. You could pay off a credit card or a mortgage with your next paycheck. But you have to do it in a way that makes it worth it.
The goal is to pay off the debt that you have accrued (or just as much of it as you can) and save that money to pay off a potential mortgage in a few years. As it turns out, a lot of people (myself included) don’t do this. They keep their credit cards and mortgage as collateral to try to keep their jobs. And in the past, this has worked out well. But the reality is that it doesn’t work.
