On a recent visit to the local library I picked up a random book from the non-fiction display table, Die with Zero by Bill Perkins (affiliate link.) Interesting title.
Within this book Mr. Perkins presents a life philosophy and a set of 9 rules to “get all you can from your money and your life.” At the heart of things is the idea to spend every penny you have, to die with absolutely no money remaining.
I think the ideas are worth a perusal by anybody considering retirement (early or otherwise) – worst case it will challenge some core assumptions. Best case – new thinking will enable leaving the work force years early.
“Millionaires don’t buy new cars” is something I have heard countless times. This concept probably gained popularity with the book The Millionaire Next Door, in which the authors observe that many millionaires pay cash for quality used cars at discount prices…
…the implication being that if you care about accumulating and maintaining wealth, you too should buy used. And pay cash. It’s just math.
That’s all well and good, but I just bought a new car. And financed it.
For years we have comfortably resided abroad, enjoying a royal lifestyle that included fine dining, a deluxe apartment in the sky, a nanny, quality affordable health care, and frequent visits to the country club. And for the most part we even lived in a COVID-free oasis.
So of course we abandoned all of that and returned to the US.
The United States has very generous tax rates for investment income such as qualified dividends and long-term capital gains, as low as 0%. This is a key component of the Never Pay Taxes Again strategy.
But sometimes you want (need?) to realize some large gains – say, if you are paying cash for a boat or a house, or if you are moving from a low-tax to a high-tax residence and want a massive step-up in basis. Or maybe you think the market is hot and you want to take some off the table.
In these cases you may come across the Net Investment Income Tax, a nice little 3.8% extra tax surcharge.
