8 STEPS TO GETTING OUT OF DEBT!
By Larry Goins

The recession is over and spending is going up. Interest rates may even begin to rise soon. According to a recent study Americans are carrying $683 billion in revolving credit card debt. That is not how much we charge but the outstanding balance that we pay interest on each month. WOW! Cambridge Consumer Credit Index stated recently that of all those people who paid less than the entire balance all but 13% made the minimum payment. Using a credit card on a regular basis is nothing more than habit. If you want to change your results just change your habit. You can even go so far as to leave your credit cards at home. Yes, I know it’s tough but if you don’t have them with you, you can’t use them can you? Here are 8 steps that will help you get out from under the burdens of debt. If you have young adult or teenage children I would suggest that you pass this along to them also:

1. Make a list of what you owe. This is the hardest part of dealing with the fact that you may owe more than you think. Get out all of your statements and list them on a legal pad. List the ones with the highest balances first. Beside the balance list the minimum payment and the interest rate you are paying.
   
   
2. Prioritize your debts. Pay off the smallest ones with the highest rates first. This is a no brainer right? You may even to pay off entire balances this month and then you have just eliminated one of your monthly bills. This means more to go to the next bill.
   
   
3. Don’t roll your balances from card to card. This may sound like an easy way to lower your interest rate but don’t be fooled into thinking that you are making progress when you may not. Every time you apply for another (lower) interest rate card your credit is pulled. This could lower your score not to mention if you are applying for a loan on an investment property the lender may think that you are just rolling the balances from card to card.
   
   
4. Close any accounts once paid off. Once you pay off a credit card don’t just leave it open. You should contact the issuer of the card and request that it be cancelled. You should only need to keep one card once all of them are paid off. If you leave them open they will still show up on your credit report and any lender will know that you could access that money at any time which they may not be comfortable with.
   
   
5. Get a copy of your credit report. You would be surprised at the mistakes that are on credit reports. You should look at a copy at least once a year. If you are buying houses and getting loans then you would probably know if something is on there that is not yours anyway.
   
   
6. Set a budget. Ouch! I know it hurts but if you set a simple budget and stick to it you will see your liabilities decrease and your equities increase.
   
   
7. Be careful of the equity in your home. Many people think that using your home equity is a wise thing to do and it can be however you need to make sure that if you tap into the equity in your home you need to use the money for wise investments instead of buying something that will go down in value or worse yet something like a vacation.
   
   
8. Study success. Read everything you can on finance and credit that you can. The more you learn the more you can earn. Don’t forget to also use real estate to help get you out of debt. If you wholesale a house or buy a property and rehab it you can then refinance it and pull out some cash and use that to pay off a bill.

I hope you have enjoyed this article. For more articles on real estate investing, to sign up for our free newsletter and listen to free weekly training teleconferences please visit my website at www.LarryGoins.com where you will also find free forms, documents, EBooks, Downloads and more. Also visit www.FinancialHelpServices.com for investor financing.

Thank You, Larry Goins

The Landmines of Wealth Protection -"FLPS" - OVERRATED, IRS HATED!
By Albert Aiello, CPA, MST, Investor

Family limited partnerships (FLP's) have become all of the rage with the overstressed premise that they shield your family wealth with iron-clad impenetrable protection. So the primary reason for using FLP's is for asset protection? Right? Wrong! Promoters who sell expensive FLP kits would like you to believe this. FLP's do provide asset protection in the same way as limited liability companies (LLC's) and corporations do. They give you limited liability protecting you personally. However, the main reason to use FLP's is estate tax reduction, not asset protection. Unless your estate is substantially over the federal estate exemption amounts, you will generally not need an FLP.

Moreover, FLP's have recently become subjected to frontal attacks by the IRS with heavy litigation (and in fact a battleground) in numerous tax court cases over the validity of the FLP entity with a business purpose and valuation discounts on gifts of FLP units to younger family members in order to reduce estate taxes. As part of this frontal attack was the issuance of summonses to a law firm for all of their FLP marketing materials including the names and addresses of all their clients to whom any of these programs were sold to. This was by court order which was agreed to by the United States Court of Appeals. The law firm partners have been ordered to appear before the IRS to divulge their records, including the names of their clients. (Call that great protection and privacy?)

This is not meant to discredit FLP's or to sell you fear. Legally, they have their place. But you have to understand that FLP's are complex legal and tax entities that require the extremely careful draftsmanship by qualified, reputable professionals of pertinent documents and implementation of the proper procedures to ensure that the FLP is a valid entity with a business purpose, and for the devaluated gifting of limited partnership units to younger family members (not to be done by do-it-yourself kits). Moreover, besides FLP's, there are lesser audit-prone (perhaps superior) alternatives to reducing estate taxes, along with asset protection, such as Private Annuity Trusts.

Outside of estate tax reduction, LLC-partnerships, with a very low audit profile, can protect you just as well, yet without the complexity and higher cost of an FLP.

Another drawback of FLP's is Passive Loss Limitations under Internal Revenue Code 469(c). Many of my students, using my Goldmine componentizing depreciation system, show large "paper" losses on their properties. They love to deduct such losses against their other ordinary income, such as W-2 income, business income, gains, pension income, IRA distributions, etc. They save thousands every year doing this. (Thousands they can reinvest for more income and more wealth). However, an FLP is a limited partnership and a limited partnership is subject to passive loss limitations. This means that such losses would not be currently deductible against your other income as per the above. (You therefore would lose the investment use of the tax savings and the related potential income; not a way to get wealthy.) On the other hand, an LLC-is not subject to such passive loss limits. Therefore using an LLC (along with a certain degree of management) will not interfere with your ability to offset loss deductions against your other income; plus LLC-partnerships are much less audit prone than FLP's.

Another drawback of FLP's (as well as other entities such as LLC's and corporations) is that while they protect you personally, they do not protect the net value of the assets within the entity, such as real estate. Many investors are misled to believe that if they put assets in an entity (such as an FLP), they are totally protected in an ironclad manner. The Titanic was ironclad too, but sunk; and so could an FLP! In future articles I will discuss a very effective way to protect ALL of your assets inside and outside of the entity.

The above discussion demonstrates that when you evaluate an asset protection vehicle, you must evaluate all sides - Legal; tax; estate; IRS; inside; outside; etc. and BEWARE of the misinformation of asset protection promoters on the circuit!

Albert Aiello (CPA, MST, Investor) is a widely acclaimed informative and entertaining national speaker on dynamic strategies covering Tax Reduction, IRS Audit Proofing, Entity Structuring, Asset Protection and other proven ways to protect your family wealth. Since the mid 1980's Al started to teach asset protection at advanced university graduate programs. Attendees included top-notch CPA's, tax attorneys and higher level IRS agents.

Albert Aiello will share his knowledge
at TBREIA’s sponsored Saturday -workshop on March 8th, ‘08 from 9AM to 4PM.
Reserve your seminar ticket today by going to: www.TBREIA.com.
For more information please visit www.TBREIA.com.

Albert Aiello
The most national respected Tax strategist

Since 1982 Al Aiello has performed hundreds of real estate tax seminars with his own expanding list of creative publications. Consequently, he has developed the most powerful real estate tax-reduction programs in the country, saving real estate entrepreneurs hundreds & thousands of dollars.

Sign-up option: www.TBREIA.com, or use page 17 and fax to: (813) 354 - 3552