Even with relatively low returns, and a high tax rate, $1.6 mil/year gives you enough cash to make a 6 figure income from it without touching the initial investment pretty quickly.
Because the interest accrued is probably less than half of what is realistic with historic trends. The tax rate assumed is unreasonably large for business as well, as he doesn't make a salary, he makes income.
What actually happens is most of it doesn't. He probably pays himself a salary out of the business, but the money being invested (i.e. "wealth") likely never leaves the business side of things.
Even with relatively low returns, and a high tax rate, $1.6 mil/year gives you enough cash to make a 6 figure income from it without touching the initial investment pretty quickly.
Why are expenses missing from this analysis?
Because the interest accrued is probably less than half of what is realistic with historic trends. The tax rate assumed is unreasonably large for business as well, as he doesn't make a salary, he makes income.
Please explain the difference.
Businesses get taxed at a lower rate than individuals.
What happens when the money goes from Hasan Inc. to Hasan Piker, individual?
It often never has to! If my dad can save on his taxes with a trucker's income, I'm sure the million dollar a year business can figure it out.
Oh I know! It gets taxed (again, which is actually good btw, "double taxation" is fake news) at the individual rate!
What actually happens is most of it doesn't. He probably pays himself a salary out of the business, but the money being invested (i.e. "wealth") likely never leaves the business side of things.
An assumption on your part.
This discussion exists in a vacuum of facts.
For the record, salary IS income. Both for tax purposes and just like generally.
Hexbear.net needs more people who understand how this works lmao
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Yes.
Lotta people in here acting like they've found certainty in this, tho.
I meant business income, whatever. Who cares about pedantic details, lol.
The IRS.
You're such a dork