EPISODE #031

PERSONAL USE REAL ESTATE: HOW MUCH HOUSE IS TOO MUCH?

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2018 Business Owner's Guide

TAX GUIDE

Leverage the latest tax law changes to increase wealth.

Personal Use Real Estate

Welcome to the Wealth Curve Talk Podcast, in which John Smallwood, a certified financial planner, identifies key areas of pressure on your wealth and strategizes with you to reduce it.

In this episode, John continues his series on the Wealth Curve Blueprint. This time he explains personal use real estate and what portion of your gross income it should consume.

John is the author of 5 Ways Your Wealth is Under Attack. He has lectured at various educational institutions such as John Hopkins, Haas School of Business, UC Berkeley and UNC Chapel Hill. He has consecutively received the Five StarSM Wealth Manager Award since 2011, and is the former president and chairman of the Rotary Club of Red Bank Foundation.

John’s strength lies in his ability and commitment to continually improve the level and quality of the financial planning process. His macro view approach and dedication to his clients’ growth involves an evolving strategy that strives to meet the demands, desires, and needs of his clients in a continually changing economic environment.

This episode’s key points:

  • Personal use real estate refers to your primary home, your second home, timeshares, and any real estate items that are for your personal use on an ongoing basis. These are not rental properties.
  • You should cap your real estate spending (mortgage principal, mortgage interest, and real estate taxes) at 25% of gross annual income as long as you are in the wealth accumulation phase of life.
  • If more than 25% is allocated for these things—across all of your properties—your odds of saving enough are too low.
  • Don’t buy more house than you can furnish and maintain—inside and out—and pay your taxes on.
  • The new tax law won’t help you—the deduction for combined state and local income taxes (SALT) is now capped at $10,000.
  • You have options. You may need to sell a property, or you may need to make adjustments in your financing. Your solution will be unique to you.

Personal use real estate has a profound effect on your liquid asset rate, savings rate, savings rate balance, and tax rate. For more, listen here. Then schedule a time to come in and make your Wealth Curve Blueprint and Scorecard. Call us at 732-542-1565 and let us help you get your plan optimized.

I hope to hear from you soon!


Are you ready to increase your profit growth by 25%? John will show you how in the 2018 Business Owner’s Guide To Maximizing Your Benefits From The 2017 Tax Cuts.

Click here to get your complimentary copy.

2018 Small Business Guide To Maximizing Tax Cuts

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Personal Use Real Estate How Much House Is Too Much

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