{"id":1457,"date":"2007-08-30T12:33:59","date_gmt":"2007-08-30T16:33:59","guid":{"rendered":"https:\/\/www.ewmrealestate.com\/blog\/2007\/08\/30\/4-simple-ways-to-get-filthy-rich-slowly\/"},"modified":"2015-05-01T17:44:30","modified_gmt":"2015-05-01T17:44:30","slug":"4-simple-ways-to-get-filthy-rich-slowly","status":"publish","type":"post","link":"https:\/\/ewmrealestate.com\/blog\/4-simple-ways-to-get-filthy-rich-slowly\/","title":{"rendered":"4 Simple Ways To Get Filthy Rich &#8211; Slowly"},"content":{"rendered":"<p><font face=\"Times New Roman\"><a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/money-bags.jpg\" title=\"Mr. Money Bags\"><\/a><a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/money-bags.jpg\" title=\"Mr. Money Bags\"><\/a><\/font><\/p>\n<p><font face=\"Times New Roman\">Over the next 4 weeks I will be posting a series of easy to read and understand blogs regarding financial issues that affect us all.  My intention is to give you a better understanding of some <a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/money-bags.jpg\" title=\"Mr. Money Bags\"><img loading=\"lazy\" border=\"2\" vspace=\"10\" align=\"left\" width=\"133\" src=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/money-bags.thumbnail.jpg\" hspace=\"10\" alt=\"Mr. Money Bags\" height=\"151\" \/><\/a>fundamental financial concepts and strategies in an effort to make a meaningful contribution to your long term financial well-being.  Your personal financial journey is <a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/money-bags.jpg\" title=\"Mr. Money Bags\"><\/a><a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/money-bags.jpg\" title=\"Mr. Money Bags\"><\/a>like a ship crossing a vast ocean in that the small course changes you make today will have a dramatic effect on where you end up tomorrow.  By being aware of some basic concepts and applying sound, conservative strategies, we can create extraordinary wealth over the long term.  <a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/ship.jpg\" title=\"Ship\"><img border=\"2\" vspace=\"10\" align=\"right\" src=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/ship.thumbnail.jpg\" hspace=\"10\" alt=\"Ship\" \/><\/a>Remember these concepts are not only applicable to you and your family but your friends and business associates as well.  I invite your comments and questions and hope that together we can create a better future for you, your family and the people in your life.<\/font><\/p>\n<p><strong><font face=\"Times New Roman\">Part I \u2013 Acq<a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/irs.jpg\" title=\"It\u2019s Your Money\"><\/a>uisition Indebtedness<\/font><\/strong><font face=\"Times New Roman\"> <\/font><\/p>\n<p><font face=\"Times New Roman\">Having a basic understanding or issues related to the tax consequences of real estate purchases can pay huge dividends over time.  *Please consult a CPA as we <strong><em>do not under any circumstance<\/em><\/strong> give specific tax advice.  <\/font><\/p>\n<p><font face=\"Times New Roman\">That being said there are a couple of issues related to mortgage interest deductions that many CPA\u2019s are either not aware of or choose to ignore.  We use the term <strong>acquisition indebtedness<\/strong> to describe the amount of mortgage money that a buyer borrows when purchasing either a primary residence or a second home.  The mortgage interest deduction is limited to the interest <a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/dollar-avatar.GIF\" title=\"Money\"><img border=\"2\" vspace=\"8\" align=\"left\" src=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/dollar-avatar.thumbnail.GIF\" hspace=\"8\" alt=\"Money\" \/><\/a>paid on this original mortgage and is also limited to the first $1,000,000 of mortgage balance.  The interest paid on any mortgage balance above $1,000,000 is not tax deductible nor is the interest paid on a refinance mortgage if the proceeds are used for anything other than home improvement.   If someone pays cash for a property and does not obtain a mortgage within 90 days of the date of acquisition then they will not be eligible to receive a mortgage interest deduction on that property at anytime in the future.  As previously mentioned the exception to this rule is if cash out refinance mortgage is obtained for home improvement.  In addition a home owner can deduct the interest paid on up to $100,000 of \u201chome equity\u201d debt on their primary residence.  Home equity debt would typically be in the form of an equity line of credit or second mortgage.  Here is a link to the relevant section of the IRS code <a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/mortgage-interest-deduction-irs.pdf\" title=\"mortgage-interest-deduction-irs.pdf\">mortgage-interest-deduction-irs.pdf<\/a><\/font><\/p>\n<p><font face=\"Times New Roman\">Why is the mortgage interest deduction so important?  Consider this\u2026.if your client were to obtain a 30 year fixed rate mortgage on a new home at current interest rates of 6.375% and is in a <a href=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/irs.jpg\" title=\"It\u2019s Your Money\"><img border=\"2\" vspace=\"10\" align=\"right\" src=\"https:\/\/www.ewmrealestate.com\/blog\/wp-content\/blogs.dir\/230\/files\/2007\/08\/irs.thumbnail.jpg\" hspace=\"10\" alt=\"It\u2019s Your Money\" \/><\/a>25% marginal tax bracket then they are effectively borrowing the money at 4.781%!  (In this example the tax payer can deduct 25% of the interest being paid thus leaving the remaining 75%.  6.375% x .75 = 4.781%)  <strong>4.781% is n<\/strong><strong>ot bad for a 30 year fixed rate<\/strong>.   What is the effect on your tax liability at the end of the year?  If you paid $10,000 in mortgage interest and were in a 25% marginal tax bracket then you would pay $2,500 less in taxes that year! (Please consult an accountant regarding possible Alternative Minimum Tax implications).  <\/font><\/p>\n<p><font face=\"Times New Roman\">You, your family and associates should always take into consideration the tax ramifications of any real estate purchase.  Being aware of these issues can potentially save you thousands of dollars per year.<\/font><\/p>\n<p><font face=\"Times New Roman\">Check back for next week\u2019s topic: <strong>The Velocity of Money, How Fast Do You Want to Go?<\/strong> <\/font><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the next 4 weeks I will be posting a series of easy to read and understand blogs regarding financial issues that affect us all. My intention is to give you a better understanding of some fundamental financial concepts and strategies in an effort to make a meaningful contribution to your long term financial well-being.<\/p>\n<p class=\"more-link\"><a href=\"https:\/\/ewmrealestate.com\/blog\/4-simple-ways-to-get-filthy-rich-slowly\/\" class=\"themebutton2\">Read More<\/a><\/p>\n","protected":false},"author":5395,"featured_media":130092,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_expiration-date-status":"","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[]},"categories":[],"tags":[11775],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>4 Simple Ways To Get Filthy Rich - Slowly - BHHS EWM Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ewmrealestate.com\/blog\/4-simple-ways-to-get-filthy-rich-slowly\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"4 Simple Ways To Get Filthy Rich - Slowly - BHHS EWM Realty\" \/>\n<meta property=\"og:description\" content=\"Over the next 4 weeks I will be posting a series of easy to read and understand blogs regarding financial issues that affect us all. My intention is to give you a better understanding of some fundamental financial concepts and strategies in an effort to make a meaningful contribution to your long term financial well-being.Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ewmrealestate.com\/blog\/4-simple-ways-to-get-filthy-rich-slowly\/\" \/>\n<meta property=\"og:site_name\" content=\"BHHS EWM Realty\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/EWMRealtyInternational\" \/>\n<meta property=\"article:published_time\" content=\"2007-08-30T16:33:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2015-05-01T17:44:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ewmrealestate.com\/blog\/wp-content\/uploads\/2019\/06\/BHHS-On-Solid-Background.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"376\" \/>\n\t<meta property=\"og:image:height\" content=\"376\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"EWM Marketing\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"EWM Marketing\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ewmrealestate.com\/blog\/4-simple-ways-to-get-filthy-rich-slowly\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/ewmrealestate.com\/blog\/4-simple-ways-to-get-filthy-rich-slowly\/\"},\"author\":{\"name\":\"EWM Marketing\",\"@id\":\"https:\/\/ewmrealestate.com\/blog\/#\/schema\/person\/3a9b03cccfbcd6dc5e4bcdcc0b2c8511\"},\"headline\":\"4 Simple Ways To Get Filthy Rich &#8211; 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