Work the Warren Buffett way?

Work the Warren Buffett way? What do you mean? Many know who Warren is, he is the third richest person in the world. He is what we call a value investor. So that mean he will not buy Facebook or another company that does not make enough money to pay for the share price. He finds a company that are at the top of their markets and eithers buys the stock or buys them outright.

Many I think don’t know how he pays himself. Believe It or not he has paid himself about $100K per year and any other payment are dividends. What does that mean $100K is taxed at working rate 25-55%. While the dividends are considered passive investment and taxed at a lower rate 15%.  Also an interview I saw with Warren he was talking about his social security check get direct deposited for him, REALLY?

How does this translate to real estate? Easy when we do repairs/maintenance to our properties we pay ourselves for it and that is taxes at your working rate (25-55%). Then the cash flow it taxes at a lower rate (15%). Not considering other things like depreciation or any other expenses and tax losses before you pay you 15%. So you can end up paying little or no taxes on your rental income. That is up to your CPA to work out the best scenario for you.

As always comments are welcomed below, and sharing is allowed.


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