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Discover how the Tax Cuts and Jobs Act of 2017 will change your journey to financial independence and what you need to do now to take advantage of the new law


Financial Independence (Getting to Point X) offers practical, time-tested advice for reaching your financial goals-whatever they may be. Whether you're recovering from debt, putting kids through college, planning for retirement, starting your own business, or just seeking a healthier financial outlook, this book shows you how to get it done. No platitudes or empty advice here-just a clear roadmap to your goals, based on the effective management of the 10 Key Wealth Management Issues that threaten to derail us all.


This new second edition has been updated to reflect President Trump's massive income tax changes. These historic changes will reduce the tax obligation of most Americans, but not all. This is the most significant tax reform in over 30 years, rendering old advice obsolete while opening new opportunities. This edition also includes a new chapter on becoming financially independent by starting your own business. Author John Vento knows exactly what these new laws entail, and this book puts his wisdom of experience to work for you to help you get on track to financial freedom.


Saving, budgeting, managing debt, minimizing taxes, and living within your means-all classic financial advice, but easier said than done, right? In this book, you'll find real, practical advice for actually doing it-to the extent that makes sense for you.





Understand the enormous changes taking place in the federal income tax code

Learn which financial strategies have become obsolete, and what new opportunities you should take advantage of

Negotiate your way through the 10 Key Wealth Management Issues with expert advice

Find out if you have what it takes to reach financial independence by starting your own business






Follow a clear roadmap to financial independence, no matter how you define it



The goal is not perfection on all fronts, it's simply tailoring your journey to suit your destination. No unnecessary deprivation, no obsessive adjusting-simply paying attention to key issues may be enough, depending on your goal. Regulatory changes close some doors but open others, and opportunities still exist if you know where to look. Financial Independence (Getting to Point X) provides you with a roadmap to financial freedom, so that you can achieve your life goals and dreams.

Financial Independence (Getting to Point X): A Comprehensive Tax-Smart Wealth Management Guide

Foreword by Todd Mackay xi





Preface xiii





Acknowledgments xv





Introduction Getting to Point X 1





Financial Literacy and the Move Away from Capitalism 2





Point X: Our Fundamental Financial Goal 4





Ten Key Issues to Comprehensive Wealth Management 5





Our Biggest Expense 6





Take a Financial Planning Checkup 8





The Power of This Book 10





What's New in the Second Edition 11





Chapter 1 Committing to Living Within Your Means 13





The American Dream Becomes the American Nightmare 13





Living Within Your Means: The Essential Step 14





Simple Saving 18





Chapter 2 Understanding Taxes 23





A Brief History of the US Tax System 24





Organizing and Retaining Your Records 27





Tax-Preparation Services 28





Accumulating Wealth Through Tax Planning 31





Chapter 3 Determining Your Financial Position 37





Figuring Your Financial Net Worth 38





Case Study: How One Couple Learned They Were Spending More Than They Earned 38





Making Sense of Cash Flow 49





Establishing Your Financial Goals 71





Finding Trusted Advisors 75





Chapter 4 Managing Debt 83





Case Study: How Two Doctors Went Bankrupt in Only a Few Years - What Not to Do 83





Basic Principles for Managing Debt 87





Good Debt Versus Bad Debt 89





Credit Card Debt 90





Auto Loans 96





Student Loans 97





Home Mortgage Loans 98





Business and Investment Loans 103





Understanding Credit 104





Your Credit Report and Your Credit Score 105





Preventing Identity Theft 110





The Equifax Breach 111





Analyzing Your Debt 112





Chapter 5 Insuring Your Health and Life 119





Choosing a Health Insurance Plan 120





Long-Term Care Insurance 135





Disability Insurance 142





Life Insurance 146





Buying Insurance Policies 152





Chapter 6 Protecting Your Property with Insurance 157





Case Study: How a Lack of Insurance Wiped Out One Woman's Life Savings 158





Homeowners Insurance 160





Automobile Insurance 164





Umbrella Liability Insurance 167





Buying Insurance Policies 170





Chapter 7 Paying for College 175





Is College the Best Choice for You and Your Child? 175





The Cost of College and What You Can Expect to Pay 179





Case Study: How Not Saving for Your Child's Education Can Ruin Your Finances - and Your Child's 181





Conducting a "Needs Analysis" for Your Children's College Educations 185





Strategies for Saving Money for College Education 189





Education Tax Breaks and Credits 204





Chapter 8 Planning for Retirement 213





Case Study: Saving Versus Not Saving for Retirement: The $1.7 Million Difference 213





Retirement Equation: Calculating Your Personal Point X 217





The High Cost of Waiting to Save for Retirement 219





What You Can Expect to Receive from Social Security 222





Qualified Retirement Plans 225





The Difference Between Traditional IRAs and Roth IRAs 229





Fixed and Variable Annuities 235





Retirement Funding: "Needs Analysis" 239





Chapter 9 Managing Your Investments 249





Analyzing Your Ability and Willingness to Take Risk 250





Stocks, Bonds, Hybrid Securities, Mutual Funds, and Exchange-Traded Funds 255





Diversification, Asset Allocation, and Rebalancing 264





Dollar-Cost Averaging 275





Inflation and Taxes: The Biggest Drains on Investment Return 276





Medicare Surtax on Net Investment Income 277





Cryptocurrency and Its Tax Treatment 278





Chapter 10 Preserving Your Estate 283





The Federal Gift and Estate Tax System 284





Legal Documents to Consider for Estate Planning 284





The Probate and Administration Process and Why You May Want to Avoid It 289





Using a Planned Gifting Strategy 293





Ownership of Property and How It is Transferred 294





Reasons for Creating a Trust 297





Benefit from a Family Limited Partnership 309





Estate Tax Planning and Life Insurance 310





Asset Protection and Long-Term Care 313





Chapter 11 Starting Your Own Business 319





How Starting Your Own Business Can Lead to Financial Independence 319





The Three Pillars of Establishing a Successful Business 320





Sobering Statistics on Business Success Rates 321





Business Plan 321





Establishing and Operating a Successful Business 323





Entity Choices 326





Tax Identification Number 333





Accounting Methods 333





Reporting Business Income and Expenses 336





What is the Number-One Expense in Operating a Business? 338





Employee Versus Independent Contractor 338





Business Tax Deduction Versus Business Tax Credit 340





"Ordinary and Necessary" Test 341





Deductible Business Expenses 342





Nondeductible Business Expenses 344





Home Office Deduction 344





Travel Expense As a Business Deduction 347





Deducting Automobile Expenses 348





Depreciation Deductions 350





Choosing the Right Retirement Plan for Your Business 352





Recordkeeping 361





Financial Statements 362





Financial Management Team 366





What the Tax Cuts and Jobs Act of 2017 Means for Your Small Business 367





Chapter 12 The Time Value of Money 379





Appendix A: Selecting a Trusted Advisor 395





Appendix B: 101 Ways to Save $20 or More per Week 405





Appendix C: Basic Concepts and Definitions of Various Types of Taxes 415





About the Author 435





Index 437