We live in interesting times – prices are up, the market is down, life’s necessities are often not available at any price, and even gasoline is at “all-time highs” (if you ignore inflation)…
So it is no wonder that people are concerned. I’ve been asked the question numerous times, “Is early retirement doomed? Is this the start of another worst retirement ever?”
Let’s explore.
We have been living off our portfolio since late 2012 (9+ years.)
Our lifestyle (and budget) has undergone some pretty drastic changes in that time, but for the most part the portfolio resembles its younger (much smaller) self.
Let’s explore what is different, and why. (Cuz there are some BIG changes.)
After a decade of zero and near zero tax bills, our 2021 tax return looks a bit different – We paid a LOT of tax.
No surprises though – I sold a ton of stock to pay cash for a house. In the grande scheme of things it is no big deal.
I’ll break it all down below (with links) and highlight some things I did to minimize taxes this year and going forward.
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Every year during this time, we reconcile our earnings and deductions for Uncle Sam and either fork over more dough or humbly request that a little be given back. If you follow the strategies of this blog you may not have much tax liability to begin with, but if you find yourself in a position where you owe the IRS and were wondering if you could earn rewards points on that payment, the answer is yes. More significantly, there’s an interesting trick where you can potentially earn hundreds of thousands of points and miles by making estimated payments which is discussed below.
Advertiser Disclosure: This site is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as CardRatings.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Since time immemorial, humans have used items of perceived value to exchange for goods and services. Shells, stones, gold, gems, paper, and even lines of code as a digital currency are used to establish a common medium of exchange that is predicated on trust — if everyone agrees that a $100 bill is worth $100 then the system works, otherwise it is useless.
Last fall during a trip to Virginia, we stopped into the American Civil War Museum in Richmond. Among the many well-crafted displays was an excellent exhibit on the history of American money and how the currency we know and use today began as a result of the war.
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Debt has been called many interesting things… concrete shoes, shackles for the middle class, the greatest burden… there were many years in my own life where I was terrified of debt.
But when used wisely it can be an incredibly powerful tool. So powerful in fact, it is how I plan to fund much of our cost of living for the next decade.
