All posts by Financial Independence Hub

How to break up with the IRS through expatriation, Part II: The exit tax

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By Elena Hanson

Special to the Financial Independence Hub

In my last blog I talked about expatriation and reasons you may want to give up U.S. citizenship or long-term resident status (i.e., green card). The key reason to expatriate is to end the reporting and tax obligations that come along with the privilege of being a U.S. citizen, especially when you don’t reside there. But before ending your obligations, you may have to pay expatriation tax, also known as exit tax.

Canada has a similar tax, called departure tax, but it’s imposed on your assets when you are no longer willing to reside in Canada.

Who is subject to the exit tax?

Generally, exit tax applies to U.S. citizens who terminate their citizenship and to long-term residents who terminate their status. However, if you are a long-term resident or green card holder who was not a U.S. resident for eight out of the 15 years leading up to expatriation, you are not subject to the exit tax.

In fact, just being a U.S. citizen or long-term resident doesn’t automatically subject you to exit tax upon expatriation. Last time we discussed implications of being deemed a covered expatriate for U.S. tax purposes. You must satisfy one of three tests, which are aimed at identifying people who are high-earning, high net-worth individuals and who are not compliant. Continue Reading…

The Evolution of Real Estate Investing

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Image by Pixabay

By Emma Williams

Special to the Financial Independence Hub

An insight into the modern methods of real estate that is much more accessible and inclusive!

We have now shifted from steel locks to smart locks in our homes, but for a long time, the conventional real estate systems continued functioning with similar patterns. One of which is real estate investments.

Real estate investment involves the purchasing and sale of a real estate asset for rental profits or market returns. Historically, this investment has yielded better and continuous returns for investors. However, a major roadblock to this remained its accessibility and high barriers in terms of capital and liquidity. For a long time, this segment was exclusive to a specific niche.

However, with modern instruments and advanced innovations at hand, real estate investment has the potential to widen its range. Through these new models, the potential of real estate investment has entirely been transformed.

Let’s take a look at the future of real estate investment with such modern innovative tools.

Investing With REITs

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Real Estate Investment Trusts (REITs) are one of the techniques that has made property investments accessible to a certain extent. With REITs, individuals invest in companies that further deal with real estate investments. In return, shareholders receive dividends in proportion to their investment share in the company.

With REITs, instead of directly investing in real estate an individual would invest in a company that has invested, in part, in real estate. The company then offers dividends through its rental income to its stakeholders. Any investor can hold shares and indirectly become an investor in a real estate asset. This eliminates the need for high capital needed in a traditional system. Continue Reading…

The Market and the Economy are not the same

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Storm clouds looming?

By John De Goey, CFP

Special to the Financial Independence Hub

We’re now into the last week of the first half of 2020: and what a six months it has been!  The news for capital markets has been mixed, as markets have tumbled frighteningly and then rebounded smartly.  If one were to naively look at market levels at the start of the year and at the end of June, one might think that very little happened: that it was a pedestrian, non-descript half year.  In stark contrast, no one would say anything of the sort regarding the broad economy.  Unemployment was at generational lows at the start of the year yet stands at generational highs presently.  The same goes for economic output and GDP growth.  What gives?

In previous posts, I’ve noted that there are certain things that are, by definition, unknown and …  in a very real sense … unknowable.  Pundits, however, are all over the map in their presumptuousness and certitude about what is known.  Since my day job involves acting as a fiduciary for a select number of Canadian families, I want to stress that I do not hold out as having any unique insights about current conditions, but that I do have some serious concerns.  The future is unknowable.  The present, however, looks awfully risky to me.

What I continue to find fascinating is the way identical facts can be given radically different narrative spins.  The stock market (or, more properly…. ‘stock markets’) is/are indeed very different animals from the broader economy.  My concern remains that a disproportionate number of commentators point this out as justification for markets going ever-higher over the last three months or so.  In short, these pundits suggest that the market is “right” and that the economy is “wrong.”

A massive disconnect

I find that narrative telling.  After all, the same facts could just as easily lead to the opposite conclusion.  What if the market is “wrong” and it is “right” to be deeply concerned about the overall economy?  No reasonable person would dispute that there is currently a massive disconnect between the two.  Valuations for stock markets are pretty much universally in the top decile (meaning they have been cheaper less than 10% of the time based on historical metrics).  Meanwhile, the overall economy is unequivocally in the bottom decile based on historical standards and – depending on who you believe and how current your data is – possibly even in the worst 1% (!) ever.  There are many credible people who believe the economy has not been this bad since the depths of the great depression in the 1930s. Continue Reading…

The Ultimate Work-Life Balance: building a business from Home

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Image via Pixabay

By Jim McKinley

Special to the Financial Independence Hub

For those individuals with an entrepreneurial streak, building a business from home could be the perfect launching point for a new career. Not only will you have the luxury of eliminating your commute, but you’ll also have complete control over when and how much you choose to work. While you may have the perfect idea for a home-based business, there are some steps you need to consider as your ideas take shape.

Turning your idea into Reality

Building a business from scratch is exciting, but it certainly isn’t a walk in the park. While the creative process is fun and necessary as you form your ideas, there are some steps that will help you establish yourself as a company.

Be sure you know the essentials when you start, such as getting a business license and setting up a website and email address. Learn what you can from your local Small Business Development Center (SBDC); often, you can qualify for free small business consulting if you’re just getting started. Take time to educate yourself about taxes, and think about how you’ll manage bookkeeping and accounting.

Along with the admin, you’ll want a bulletproof business plan. What do you want to accomplish with your business? How do you see it growing in the coming years? By making a solid plan, you can start goal setting and really get the ball rolling.

How to grow: hiring remote workers

Most successful companies all have one thing in common: they understand that it takes a team to pull off something extraordinary. As you think about growing your business, consider how you might recruit remote workers to join you.

Be sure to craft an honest and compelling job description. Most remote workers value flexibility, so consider how you might portray the position in a way that would appeal to qualified candidates. Post to online job boards, and consider perusing LinkedIn to see if you can recruit someone with the right background and skills.

Managing your Team

Luckily, there are several online platforms and tools designed to keep remote teams connected. For example, Slack is a great option for ensuring good communication. Through Slack, it’s possible to create both team-wide and project-specific channels to help manage concurrent conversations. The platform also allows for a newsfeed, which you can use for updating the entire team with important information. Continue Reading…