Millionaires manage increase profits reason explained 2021 - this is how they become richer: apply it to achieve economic freedom.

Surely on more than one occasion you have wondered why the rich always get richer, a situation that is usually common in times of economic crisis or uncertainty in the market.

If you are one of those who suffer to make ends meet or are simply unhappy with your income level you do well to try to answer this question, since in it are the keys that can help you earn more money.

The book on personal finance Takes the helm: why the rich get richer and you still don't make it to fortnight, written by Francisco García Pimentel and Salvador Manzano, offers a useful answer to this question.

One of the most enlightening passages of this publication is a parable in which the behavior of the rich, the middle class and the poor is explained with similes of the maritime field. The ideas expressed in this text are summarized as follows: the poor have no boats, the middle class has rowing boats and the rich have sailing boats.

Millionaires manage increase profits reason explained 2021

According to the authors, if everyone had to reach the same island, the rich would always leave with an advantage because they only have to be driven by the wind, while the poor would have to swim and the middle class row, which is a greater effort.

This island represents freedom and economic autonomy, while the ocean would be the world and the wind represents money.

Low-income people, the book details, are too busy trying to stay afloat, so they can only see the sails of boats when they pass nearby. This actually means that they are too focused on a single source of income, their work, that does not allow them to see further or elaborate other more profitable strategies.

The middle class, although it has more facilities, is exhausted by having to row constantly, so they continue to work without stopping to think about how they can reach economic freedom.

Millionaires manage increase profits reason explained 2021

The rich, on the other hand, use the wind blowing in the sea to live, and as the ship moves on its own can focus on other issues. As they have more free time and decision-making capacity they can take risks and change the rumor if necessary.

The book proposes to adopt this mentality, even with a small and modest sailboat. This is achieved by looking for different sources of income, so that the boat begins to be driven by the wind and not by the exhaustion of its crew.

Millionaires manage increase profits reason explained 2021: One way to achieve this is by starting to make investments, without having to disassociate yourself from your work as a wage earner. Investments aren't just for the rich, and with some financial culture you can make significant gains. For example, having paid accounts, deposits or learning to invest in the stock market are good first steps.

Generating passive income is the best way to get your boat to have a sail, following the similes of this book. Learning to accumulate them and grow quickly is a task that you can start from now, increasing your knowledge about finance.

Once you've got a good foundation you can make other investments and diversify your income. The important thing is that the money moves and that you don't let it get dusty in your bank account.

Millionaires manage increase profits reason explained 2021

More news:

I have rented a room in my house :do I have to declare it?

The offer of room rentals shot up 80% in 2020 by the pandemic according to Idealista data. Now that the time comes to make the rent 2020 doubts arise about how to tax that rent of a room within the habitual residence.

The first question is always: do I have to declare the rent of a room in the house? The answer is yes. The income you have obtained by renting part of your home must be included in the income statement as if you rent your entire house.

Housing rentals are included in the income statement as full income from movable capital. In this there are no differences regarding the lease of your entire home.

The money you earn will be added to the general income tax base and taxed according to the general income tax brackets.

Fortunately, this doesn't mean you're going to have to tax a lot for that money. When calculating how much you have earned, your expenses as a landlord will also be taken into account.

Just like renting a home, you can subtract from the one you collect the expenses you have incurred. Among the deductible expenses of the rent you can add electricity, water, community and other supplies as long as you are the one who pays them.

If the tenant pays a portion of those supplies because you share expenses, they cannot be subtracted. The amount you can deduct will be proportional to the space that is rented. In other words, you will have to calculate the percentage of the housing that represents the room and subtract it after the bills as a deductible expense. This follows from the binding consultation V2810 - 19 to the Directorate General of Taxes (DGT).

The same applies to mortgage expenses, which will also be included on a pro rata basis. In this case only interest paid on the loan may be deducted.

In addition, the amounts destined to the amortization of the real estate and the assets contained in that room may also be subtracted.

The binding consultation V2810 - 19 resolves that the rental of rooms also has the consideration of leasing as a habitual residence. The translation is that you can apply the reduction of 60% on the profit obtained. Thanks to it, you will only have to pay taxes for 40% of the money you earn from the rent less deductible expenses.

This reduction cannot be applied to seasonal rentals, as decided by the DGT through binding consultations V3660-16 and V4837-16. This would affect, for example, student leases during the school year or if you rent rooms only in the summer.

Can you continue to practice the deduction for habitual residence if you have a rented room? Yes, this was established by binding consultation V1583-19.

Renting a room does not cancel this deduction of the rent for the purchase of habitual residence, although it does limit it. As was the case with supplies, only the part of the dwelling that is not rented may be deducted.

Once again, you'll have to subtract the percentage of the room you rented from the money you put into the mortgage.

That a person who lives for rent rents in turn a habituation of that apartment is quite common. In this case the taxation of room rentals changes. On the one hand, the owner of the dwelling should include VAT on the rent for that room if there is a separate contract between the person to whom he rents the dwelling and the sublet tenant. This is established by binding consultation V4706-16.

On the other hand, who sublet could lose the right to deduct for the rental of habitual residence, although this is a question that still does not result. In addition, you must include in your income statement a return on movable capital for that rent you collect.

To calculate how much you have earned you can subtract the same expenses as the owner of the house, except the reduction of 60% for rental of habitual residence, as decided in 2013 by the DGT through the binding consultation V0781-13. The reason is that for the Treasury these gains are a return on movable capital and not real estate.