Not sure I understand the gentrification in such a horrific context though? It must not be that bad?
Things change. Over time gentrification might turn a crime-ridden cesspool into a nice community. Other times it just pushes lower-income people out. Often it does both.
Not sure I understand the gentrification in such a horrific context though? It must not be that bad?
People with money move in, tear down cheap houses and build more expensive ones. This can result in a general improvement, but it also displaces people who can only afford to rent/buy the cheap houses and often reduces the housing supply. Nobody likes being pushed out of their neighborhood by rising housing costs and lack of rental availability.
Things change. Over time gentrification might turn a crime-ridden cesspool into a nice community. Other times it just pushes lower-income people out. Often it does both.
Gentrification isn't too bad as long as you own your own property but if you rent then your costs are going to go up, up and up until you are priced out of that area. That's the position Fran is in. At least if you buy before the price went up then you can make a tidy profit, but if you rent you get nothing. Except being forced out.
Gentrification isn't too bad as long as you own your own property but if you rent then your costs are going to go up, up and up until you are priced out of that area. That's the position Fran is in. At least if you buy before the price went up then you can make a tidy profit, but if you rent you get nothing. Except being forced out.That's just the reality of renting. If you rent, you can't count on living in the same place forever, in fact you can pretty much count on having to move at some point. A person that plans to rent their whole life had better be flexible on location.
Well there are signs of the real estate market "crashing" in many western countries, so if she can wait for a bit, there may be some affordable stuff to buy. The problem will still be getting a loan unless she can pay cash, which she probably can't. Now I've heard of some organizations that can help independent workers getting home loans - dunno if there are any in her area, but that's worth a look.
Well there are signs of the real estate market "crashing" in many western countries, so if she can wait for a bit, there may be some affordable stuff to buy. The problem will still be getting a loan unless she can pay cash, which she probably can't. Now I've heard of some organizations that can help independent workers getting home loans - dunno if there are any in her area, but that's worth a look.
The problem is that the interest rates are rising quickly as well so people can borrow less money. In the end the best thing Fran can do right now is get rid of most of her expenses and save money for a couple of years. If she earns about $100k a year as Dave suspects then saving $50k a year is not out of the question so getting enough money for a significant downpayment to get her own place is easy to do. From there on it is all unicorns and rainbows.
Well there are signs of the real estate market "crashing" in many western countries, so if she can wait for a bit, there may be some affordable stuff to buy. The problem will still be getting a loan unless she can pay cash, which she probably can't. Now I've heard of some organizations that can help independent workers getting home loans - dunno if there are any in her area, but that's worth a look.
I'd also be looking at trying to structure the business in way that it at least looks like she's drawing a wage.
Maybe setup some non-profit through a trust and take a wage as an employee or something.
With the intent that if the banks don't dig deep enough to find out, that's their problem
The thing is, you want to do that right now with a view to having a years worth of stable wage statements.
Sure, problem is that getting a decent wage (decent enough to convince banks for a loan) is going to cost a lot of her income. Not sure about over there, but over here various taxes employers have to pay are gigantic. May not be as bad in the US, but still, she would likely have to make significantly more than she currently does.
Well there are signs of the real estate market "crashing" in many western countries, so if she can wait for a bit, there may be some affordable stuff to buy. The problem will still be getting a loan unless she can pay cash, which she probably can't. Now I've heard of some organizations that can help independent workers getting home loans - dunno if there are any in her area, but that's worth a look.
Sure, problem is that getting a decent wage (decent enough to convince banks for a loan) is going to cost a lot of her income. Not sure about over there, but over here various taxes employers have to pay are gigantic. May not be as bad in the US, but still, she would likely have to make significantly more than she currently does.
Simple. All the money goes inot the non-profit. She draws near 100% of the company income from the non-profit as a wage. The non-profit earns nothing so pays no tax. She pays tax as a wage earner.
She wouldn't (or shouldn't) pay more, it's just a matter of structure.
I am not sure this would fly. Say there is a question in the credit line or mortgage application: " Are you self-employed?". What in this case Fran's answer would be?
Well there are signs of the real estate market "crashing" in many western countries, so if she can wait for a bit, there may be some affordable stuff to buy. The problem will still be getting a loan unless she can pay cash, which she probably can't. Now I've heard of some organizations that can help independent workers getting home loans - dunno if there are any in her area, but that's worth a look.
Again I don't know about the US laws for employers exactly, but over here and others parts of the world, employers have to pay taxes on employees. The net wage gotten by the employee is only a fraction of what the employers pays for them in the end.
I am not sure this would fly. Say there is a question in the credit line or mortgage application: " Are you self-employed?". What in this case Fran's answer would be?If Fran-the-Person works for Fran-the-Person, she is self-employed.
If Fran-the-Person works for FranLab, Inc., she is not self-employed, IMO, but rather is an employee of FranLab, Inc.
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center
Again I don't know about the US laws for employers exactly, but over here and others parts of the world, employers have to pay taxes on employees. The net wage gotten by the employee is only a fraction of what the employers pays for them in the end. So it's not just a matter of not paying taxes on the company's benefits (that you could indeed avoid using various tricks including creating a non-profit organization or some other scheme). Employers' taxes are particularly bad over here (with all the social taxes) and it gets to nearly *twice* the net wage. It's probably a lot less than this in the US. But if you want to have a status of *employee*, then you don't have a choice. Over here it would cost almost twice the net wage. In the US, I guess it's not that bad.
That means that in some countries, for a given revenue, you'll get a bigger chunk of it with an independent status than if you become an employee. But of course you get less protection as an independent worker. I'm certainly "burnt" by the horrible cost of employment over here. Yep, for say a net 3000 eur/month wage, the company has to shell out nearly 6000 eur.
The long answer is it's complicated, but often the right form of incorporation can save some serious bucks at tax time. But naturally there's a lot more paperwork and bother.
In Fran's current business situation, her spending exceeds her income right now. No profits to tax, so no big tax bills.