Secrets Of Rich And How Middle Class Manage His Money
How middle class manage his money: If you want to know how the middle class manages its money and the strategies of rich or super-rich people, you are at the right place.
You can manage your business in the smartest way only if you know the strategies. This content provides a brief detail on these concepts which you may or may not know.
Also Read: 7 Strategies To Grow Your Business
A proprietorship refers to a trader business which has one owner and pays income tax on profits gained from the business. It is the easiest type of business as you can hier your own employees.
In case an employee you hired, behaves well with you but in your absence abuses your customers, then the customer can sue you as you are the owner of the business company. You may have to pay a huge amount of money as a fine.
It may affect your business, lifestyle and many more. Now you might be thinking proprietorship is not a good business, but it’s not true.
The thing is, you should know the strategies that successful people use. To overcome this the government has given an option, that is, to open limited liability entities in which you can choose one of the three options; LLP (Limited Liability Partnership), Private Limited Company, or OPC( One Person Company).
Super rich people do not use this due to unlimited liability. We should only think about it if our income skills are very high.
Also Read: HOW TO START BUSINESS NO MONEY
If you open a limited liability entity instead of proprietorship, then it does not affect your personal assets like your house, jewellery, car, etc.
In case someone will file a case, the case will be against your business, not you. Like you have invested 2 Lakhs in your business then you will lose 2 Lakhs only not more than that.
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Private Limited Company
Super Rich owns company and company owns everything. Majority of the people think when they own the companies then why companies should own all the assets, but no it has many advantages like limited liability, investments, tax advantage, etc.
It refers to favourable tax status held by certain qualified investments accounts, or financial vehicles. Tax-exempt status uses after-tax income gained by them are not subject to ordinary income tax.
In this way, you can save your income tax money and use it in business travels, car expenses, medical expenses through your company and keep your family members as employees and pay them a salary less than 5 Lakhs.
Super rich people believe in reinvestment. The majority portion of the money they gain is invested as company expansion or they create small companies out of their big company.
To minimize risk, they set rules in a way that if any violence happens by the small companies, their parent company does not get affected.
If you are still confused about where to start your monthly salary is 20-25 thousand. The answer is very simple.
Do not spend your 50-60% of the money, at least do 20-30% saving and invest the rest amount. If you are young then your investment should be in education.
Also Read: How to reduce home loan interest?
Low Salary Problems
If you think your income is too less. It is not that you can not spend your life with less money but everyone wants an extra income.
Then you use your free time in achieving high income skills. Keep yourself open minded, if you want an extra income. A small start-up can even end up with great income.