I went to one of those seminars where they buy you lunch and then give you their sales pitch. I really wasn’t interested in what they were selling but I figured I’d go along for the free lunch. The presentation dealt with investing in real estate. It was your typical real estate pitch. They did mention one thing that intrigued me. They mentioned some of the tax benefits of owning real estate and that when the new tax law came into place that they would be grandfathered in. I’m not buying any real estate from them; however, I am curious if there are any moves that you would recommend based upon the anticipated changes to our tax law.
I absolutely would not make any move based upon any proposed changes to our tax law. I think to make a move based upon proposed legislation is a mistake and can backfire on you in that instead of saving you money, it may cost you money.
I have no clue if we will have a new tax law or not. Just because the politicians in Washington talk about tax reform doesn’t mean that they are going to deliver. We all know the way Washington works or should I say, doesn’t work, and that it why it is dangerous to act upon something that may never become the law.
Even if I thought that there would be tax reform, I still wouldn’t do anything until the law is passed. After all, we have no idea what the law is actually going to say until it is passed. We all know the last minute deals that are worked out in Washington and these deals can make significant changes to the legislation. Therefore, when it comes to tax law the only thing you should pay attention to is what the law actually is, not what the politicians say they want.
I do believe it is more likely than not that we will have tax changes in the near future. I also anticipate that whenever we have major changes in the tax law there will be all sorts of flimflam artists telling you what you should do to take advantage of the new law. My advice: proceed with caution. In addition, let’s always remember that the goal is not to pay lower taxes but rather, to have more money in your pocket. After all, if your goal was to just lower your taxes, all you would need to do is ask your employer for a pay cut – that would lower your taxes. Obviously, no one wants a pay cut; however, what should also be obvious is that the goal is not just to lower your taxes but more importantly, it’s to net more money in your pocket.
One last word of advice and that is I would avoid those seminars where they are giving you free meals. A free meal is nice, but it comes at a cost. The presenters of these seminars are slick and many times employ very high pressure sales techniques that people fall for. My belief is why even put yourself in that position, just for a free meal-it is just not worth it. When you deal with someone in the financial industry you want to make sure they have your best interest at heart. I can assure you when someone employs aggressive sales techniques they are only concerned about what is good for them not what is good for you. Therefore, I say to protect yourself, avoid the free meals–they aren’t worth the risk.
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