I’ve written about being broke before. Like the time I only $277.24 in my bank account with bills piling up.
So I think I’ve earned the right to write about times I’ve made money. Like this past weekend when I made tens of thousands of dollars.
But I didn’t cash a large a check at the bank or anything like that. This is a ten-thousand-dollar strategy that anyone can do.
I just took my two biggest expenses at the moment and bought the best books on them. I became an expert in a way.
Right now, my car and taxes are the biggest expenses I have besides rent. So here’s what I did…
I don’t have car payments aside from insurance so maintenance and preventing major repairs is a way I can avoid big repair bills and squeeze extra years out of my car. In fact, the book “The Millionaire Next Door” says most millionaires drive older model cars and get the most out of them.
So last Saturday, I bought a book called “How to Make Your Car Last Forever: Avoid Expensive Repairs, Improve Fuel Economy, Understand Your Warranty, Save Money.”
The author is well known in the automotive world. He has a radio show and writes for some sites, but I hadn’t heard of him until I found this book.
The book has a lot of technical details, but I skipped over everything that doesn’t apply to me like manual transmissions, 4WD, winter maintenance, drum brakes, etc.
I don’t think I will ever do my own maintenance. I don’t have the right tools and space to work on a car even though I have done some basic stuff in the past. My aim was to become more knowledgeable when speaking with mechanics and also knowing the best options for certain repairs.
My biggest takeaways:
- Don’t cheap on replacement parts.
- Almost everyone should follow the severe maintenance schedule that the car manufacturer recommends.
- Finding a good, mechanic pays. I found one near me that was certified by AAA and the Automotive Service Association that I plan on visiting soon. Interestingly, they had the best reviews online whereas most shops had multiple complaints of being ripped off and what not. If any business has low barriers to entry it pays to go to one that is accredited by an outside organization.
- No vehicle is maintenance-free despite manufacturer claims. People drive vehicles in the real world. Manufacturers test in laboratories.
- If you have an older vehicle with over 100,000 miles doing a transmission fluid flush could destroy the transmission.
- For expensive replacement parts you usually have more options than you think like factory-rebuilt parts, or finding a part from a similar make and model that’s still in good condition.
Also in “The Millionaire Next Door” they talk about how most millionaires are self-employed business people. Self-employed business people make up less than 20 percent of the total population, but they make up 67% of the millionaire population. Very interesting.
A reason for their amassed wealth is that they pay the lowest amount of taxes they legally can. Now, before anyone cries, “Why do they get away with paying so little?!?!” Keep in mind the top 10% of earners still pay 68 percent of Federal income taxes.
Anyways, I’m not a millionaire, or wealthy, but I am self-employed so I have the potential for lowering my taxes. I just didn’t know how so I picked up “Lower Your Taxes Big Time 2013-2014” by Sandy Botkin an accountant and former IRS worker.
My biggest takeaways:
- Being self-employed is one of the greatest safe-tax havens out there.
- It pays to have an understanding of what you can and can’t deduct. Your accountant can only help you as much as you document. This is especially true in my case. I’m a “small potatoes” client for my accountant. He’s not going to spend that much time moving heaven and earth to find every possible deduction for me. Knowing, documenting and keeping records is key.
- For complicated situations you should still hire a lawyer and accountant to advise you.
- Skim over sections that don’t apply to you at the moment, but keep them in the back of your mind. For example, you can get a lot of deductions from hiring spouse and children. I don’t have either, but when I do I can reread these parts.
I read both these books over the weekend and have found things that’ll be worth tens of thousands of dollars to me over the next few years. It’s not sexy, but it works.