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The Water Cooler
General Discussion
Dow - 26,000 - "Edit Next Stop 27,000"
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<blockquote data-quote="ConstitutionCowboy" data-source="post: 3073052" data-attributes="member: 745"><p>OK, I did the math. I did not use your optimistic 12%, though. I used the difference between 7% average for large business investments and 8% average for small business investments. - yes, 7.5%.</p><p></p><p>Taking the $200K investment and compounding yearly at 7.5%, we would have made $87K before taxes, investment fees, etc. etc. By investing in ourselves and adding our "sweat equity", we made 125K on our investment before taxes - except our capitol gain was not taxable, ergo, no taxes. Our mortgage payments were small(350 per month) so deduct 21K from our 125K and we still made 17K more than the average investment.</p><p></p><p>Don't forget we lived and worked there as well, and the overhead was paid for out of our salaries, profits, the rental income from the business, and the business's share of utilities. I do believe we bested inflation as well.</p><p></p><p>The rented portion of our house was depreciated which was a plus with the income deduction, but was of course "paid back" in taxes upon the sale of the house. That ended up being a wash.</p><p></p><p>Living and producing a product all under one roof is a good business plan - regardless of whether you buy the property to fix up and flip or not.</p><p></p><p>Woody</p></blockquote><p></p>
[QUOTE="ConstitutionCowboy, post: 3073052, member: 745"] OK, I did the math. I did not use your optimistic 12%, though. I used the difference between 7% average for large business investments and 8% average for small business investments. - yes, 7.5%. Taking the $200K investment and compounding yearly at 7.5%, we would have made $87K before taxes, investment fees, etc. etc. By investing in ourselves and adding our "sweat equity", we made 125K on our investment before taxes - except our capitol gain was not taxable, ergo, no taxes. Our mortgage payments were small(350 per month) so deduct 21K from our 125K and we still made 17K more than the average investment. Don't forget we lived and worked there as well, and the overhead was paid for out of our salaries, profits, the rental income from the business, and the business's share of utilities. I do believe we bested inflation as well. The rented portion of our house was depreciated which was a plus with the income deduction, but was of course "paid back" in taxes upon the sale of the house. That ended up being a wash. Living and producing a product all under one roof is a good business plan - regardless of whether you buy the property to fix up and flip or not. Woody [/QUOTE]
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