The purpose of this article is to share some details and some reasons why you should buy a new car, in this case, a Tesla. We decided to share a different view on why you should spend money on a new car. When you buy a Tesla, some of the reasons could be the necessity of a new car, or maybe you want to experience new technologies or you want to contribute positively to the economy and to the environment.
You may not need a car, but as an investor you need to spend money because that way you can take advantage of the benefits of spending money, and buying a car is one way of doing that.
You would think spending money is very easy but it doesn’t work that way. When you are an investor, you’re actually wired to think a little bit different than most people. As an investor, when you spend money, you have to ask yourself one important question: “Does this purchase will help me make more money?”.
US Economy: Smart Expenses
What is a smart expense? It’s an expense that will generate a deduction for your business so that way you can reduce your taxable income, and hopefully pay less taxes in your return. While at the same time, it’s helping you and your business generate even more money. All of it, at the same time.
This matters a lot, and it has to do with taxes. For those who are investors or business owners out there, you will probably know what we are talking about. Uncle Sam likes to reward people who spend lots of money. Not just random money but you have to spend money and create something that it’s going to add to the greater cause and add to the greater good.
In the case of a Tesla, it’s actually an expense you make to use it for your company or for your business, not for yourself. What happens when your company pays for a new car? It becomes an asset and that helps you out by generating more money. Normally, when you buy a car for the company or business you run, that would be considered as a liability, since it’s money coming out of your pocket. If you stop working and producing money, you will have trouble paying for that new car.
Can a car be considered an asset?
Yes. Uber is a good example. Yes, you have to buy a car, but then as you are working with Uber, you generate more money not only to afford the car but also to pay your rent, to pay for your personal stuff, your phone and the rest of your bills.
What happens when you get a company car? The money that you use to purchase that car is coming out straight from your business.
The money comes straight from the business and whenever you make an expense on behalf of the business and you use the company money to spend on something, you wind up getting a tax deduction.
Every time you purchase a company car, the cost of the car is 100% deductible. What does it mean for you when you get to deduct the cost of a car from your company? If you generated $520,000 in 2020, it will normally place you at the highest tax bracket possible, and that’s 37%. You could find yourself trying to find ways to reduce that taxable income so you can be placed in a lower tax bracket.
When you purchase a company vehicle, in this case a Tesla, you need to do the math and analyze what you can do to reduce your taxes taking advantage of the deductions.
Let’s say a Tesla cost $70,000 and you generated $520,000 in 2020. Then, that Tesla it’s a business deduction for you. The IRS will give you a discount in your taxable income, and at the same time you will be helping to stimulate the economy, because at the end of the day, the goal of the stimulus on the US economy is to get money going and circulating in the economy and help the economy stay up.
Instead of you paying taxes on $520,000, you will pay taxes on $450,000. Why? Because you can deduct $70.000 to the total amount you generated that year.
- Depreciation: Another great thing about this strategy is that when you have a company vehicle you get to depreciate the vehicle as well.
You get to do depreciation just like you will do with Real Estate. Depending on the type of car that you have, you can take an accelerated depreciation, you can take depreciation on the vehicle in the span of around five years.
For example: You take the depreciation of $20,000. That means that your taxable income will be $430,000, which will automatically drop your taxable income. It puts you in the lower tax bracket saving you tons and tons of money.
You get to save money and you stimulate the economy. In addition to that, you are helping the environment because you’re investing in an electrical vehicle.
It’s not so much about how much money you make but how much money you can manage to keep in house.
How can you truly generate money with a new vehicle?
A vehicle in itself really cannot generate any money for you. It’s just a car. But, if you use that car as a tool to help you generate money, you will find the way. If you assign a role to the car, now that car becomes not only an asset but it will also fulfill a role in your company.
That role could be related to marketing. You can paint your car with your company logo, you can put a QR code that takes everybody to your company website or to your company social media accounts.
At NovaRise, we decided to make the car our chief marketing officer. We came up with the idea of getting a QR code. A QR code is literally just the code where you can take your phone, you scan the picture of it and it will take you to a website.
We have two codes, one in Spanish and one in English to help people learn about real estate. All they have to do is just to simply take their phone, scan it and then it will take them straight to our YouTube channel to NovaRiseInvests if you are a English speaker or NovaRiseLatino, if you feel more comfortable with Spanish content.
That is how your car can work for your company 24/7: By helping you expand the mission of your company when you find the role of that company car. It could be any car but when you get a Tesla, you get all these tax deductions benefits we mentioned and people will be attracted to this car because it is the most technologic in the current market.
You can easily find better ideas if you have a great power team working with you. The IRS has a rule that says, if you have a company car, you have to be able to demonstrate that you’re using the car for at least 50% of the time in order to get the maximum deduction possible. So, your power team can help you find ways to use the company car as much as possible to be able to get those deductions. The best way is to use your car for marketing purposes.
Stimulating the Economy
Uncle Sam doesn’t have any problem with you saving money on taxes. The IRS doesn’t mind that you save money on taxes, as long as you’re doing something for the greater good, as long as you contribute to the growth of the economy.
With smart expenses strategies you can stimulate the economy because:
- The money flows and that means the economy grows.
- You stimulate the economy because you just bought a new car.
- You’re helping the environment because you bought an electric vehicle with friendly environmental technology.
- You’re generating more jobs.
- You help to build a better world and at the same time you help people educate in topics like investment and finances.
It’s all a win-win situation for everybody. That is how you have to do it. Thanks to the assistance of your amazing power team, you can achieve that and reach a level where you benefit yourself, your company and your team with the good things the US economy has to offer.
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