Business
Riley Adams is here to talk about financial independence and taxes. After all, we are nearing that time of year again. We all know that taxes are something that need to be planned for in advance instead of waiting until it’s time to file. Riley has a master’s degree in applied economics, he is a CPA, and he works at Google. He also runs the website Young and the Invested. This is a place for young professionals to learn about financial independence and entrepreneurship. Riley and his wife live in the Bay Area. She is a doctor and they have a six-month-old son. Riley’s dream is financial freedom for him and his family, so he can work at whatever he wants to work at and not be dependent on a certain employer to make ends meet. We talk about saving, investing, paying yourself first, and the new tax laws. We tackle depreciation, tax savings, and why it’s not a good idea to invest solely based on tax savings. Riley’s enthusiasm for smart wealth building is contagious and this is a fun and informative episode. Highlights from Episode 24 [00:58] Riley is from New Orleans. He has a master's degree in applied economics. [01:47] After graduating, he got a job at the power company in New Orleans. He dealt with financial planning, strategy, and renewable energy policies. [02:04] He worked there for six years. He learned all about your renewable energy, and he even met his wife there. [02:20] His wife graduated from medical school, and now they live in the San Francisco Bay Area. [02:37] Riley now works at Google. His project is to streamline the advertising programs. He and his wife also have a six-month-old baby. [03:42] At the end of 2017, the Tax Cuts and Job Act was passed. [04:08] It's geared toward benefiting corporations by making the tax rate 21% as opposed to 35%. [07:26] Depreciation is when you make a large capital investment, and you can't expense it in the same time that you purchase the asset. You recognize a proportional expense over a period of time. [08:48] Depreciation with rental properties is very common. The depreciation can make a rental property income a loss and lower your taxes. [11:37] You can depreciate the improvements versus the land value. [12:12] The standard deduction was dramatically increased. The idea was to create less work without having to itemize deductions. [16:06] State taxes do things a little bit differently. Each state is different. Navigating multiple states is complex. [23:35] There can be a huge amount of tax savings if you derive most of your income from qualified passive income. [24:42] Saving on taxes shouldn't drive your decisions for investing. [26:18] Riley is hoping that through wise financial decisions and investing, he will be able to free himself up from employers and have the freedom to do any job that he wants. [26:56] Millennials want to follow their passion and be able to do what they want to do. [27:38] Riley recommends that millennials pursue financial independence. [29:03] The FIRE movement is about being able to retire early. The Fat FIRE movement is about being able to retire early without scrimping and saving and living such a frugal life. [31:30] Riley and his wife have savings goals. They look at their income and make a savings target. Whatever is left is to spent and enjoyed. [33:15] They have different IRAs and some shared accounts and a home savings account. [34:32] Multiple accounts make you liable for multiple capital gains at tax time. [35:15] Young and the Invested is Riley's financial website. His target audience is his wife. [37:01] The site explores ideas on reaching financial independence for young professionals. [38:54] There was an article about him from NerdWallet that was syndicated in the New York Times. [39:19] Sacrifice frivolous purchases to create financial independence. Links and Resources Young and the Invested riley@youngandtheinvested.com Mint Tiller Financial Samurai Time Your Credit Card Application This Bonus-Friendly Season Young and the Invested on Twitter Young and the Invested on Facebook