Wednesday, March 29, 2023 |
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Millennial turns $1,200 stimulus check into a successful business |
In early 2021, Jasmine Taylor knew her budget wasn't working. The now 31-year-old from Amarillo, Texas, had lost her full-time job and found herself in $60,000 of student loan debt. She also had $9,000 in medical and credit card debt. Taylor turned to "cash stuffing" — a money-management strategy in which budgeters plan their monthly spending by putting cash into categorized envelopes. To keep herself accountable, she began posting budgeting videos on TikTok. Within a year, Taylor had paid off $23,000 in student loans and wiped out her other debt. In the meantime, her TikToks went viral. She currently has 640,000 followers on the platform. Capitalizing on her internet fame, Taylor used her $1,200 stimulus check in April 2021 to start a business, Baddies and Budgets, through which she sells money courses, budgeting supplies and other accessories. In 2022, the business pulled in about $850,000. This year, it's on track to clear $1 million. Nevertheless, Taylor pays herself a relatively modest salary and still sorts cash from her monthly paychecks into envelopes. "The same stuff I teach my audience, I still use in my everyday life," she says. |
Money Tip of the Week: Try the No. 1 habit of early retirees Certified financial planner Rachel Camp works with a variety of early retirees, and no two people who reach financial independence get there exactly the same way. Some start their own businesses and sell at a huge profit. Others aggressively buy up rental properties, effectively replacing their salary with income from their tenants. Others are able to bank upward of 50% of their salary through extreme frugality. Regardless of their strategy, Camp says her early-retiree clients all have one thing in common: They track where every dollar they make goes each month. If you're looking to put more money away toward financial goals such as building an emergency fund, paying down debt or saving for retirement, you'd be wise to do the same. Checking in regularly can keep you on track to hit your financial goals and keep your spending from getting away from you. Some folks are so focused on their financial future that they can make themselves miserable in the present, Camp says. Try not to fall into that trap. Spending just 30 minutes a month looking things over "makes a drastic difference," she says. |
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Next Gen Investing: You may owe taxes on your crypto profits |
If you've managed to turn a profit investing in crypto, take a moment to celebrate. Now, brace for this: the U.S. government wants its cut. For the 2022 tax year, the Internal Revenue Service is directly asking filers whether they received or sold digital assets over the past year on Forms 1040, 1040-SR and 1040-NR. If you own crypto, here are three things to keep in mind this tax season. 1. Crypto is taxed as property. That means, like stocks, digital currency is subject to IRS rules. If you buy $500 worth of crypto and sell it for $600, the $100 profit is subject to capital gains tax.
Conversely, if you sell your coins for less than you paid for them, you can use that loss to offset taxable gains. Any excess losses can be used to reduce your regular taxable income by up to $3,000.
Other taxable events may include using crypto to buy a product or as payment for a service. 2. Your crypto activity isn't invisible to the IRS. One of crypto's appeals is its apparent anonymity, but depending where you trade, the IRS may be keeping tabs. Centralized exchanges such as Coinbase and Gemini report to the IRS and may send you a 1099-MISC detailing any profits you've earned on the platform. Other platforms may report your activity if they're subject to government subpoena.
Whether you know you're being watched or not, you're expected to report any income or gains related to crypto, according to the IRS website. 3. Proper record keeping is key. Because it largely falls on taxpayers to report crypto-related earnings or gains at tax time, keep meticulous records of your transactions. Online tools, such as Cointracker, can help and will automatically generate the appropriate tax forms. |
Worth the Money: 'Dragon egg' chew toy |
At first glance, M.C.works' "dragon egg" chew toy for dogs ($16.99 on Amazon) seemed flawed to me. The material felt chew-proof, but the hole in the bottom for treat-stuffing was way too small and inflexible to allow anything of substance inside. Then I realized that it's a feature, not a bug: Anything I can squeeze in there takes my large, energetic dog hours, if not days, to extract. She stays entertained without overdosing on treats, and I'm able to finish my workday without distraction — a true win-win. —Cameron Albert-Deitch, Success Editor |
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