There’s more to real estate than just buying and selling houses.
Taxes are a huge expense when getting into the market, and government spending can affect more than you think.
There’s a secret in the annual government reports released to cities’ taxpayers. (They don’t want you to know about it!)
The bottom line is, what the city lacks in funds, they raise in taxes.
Here’s how YOU can save $50,000 by checking the right line in your city’s balance sheet.
Every year, cities in the United States release a Comprehensive Annual Financial Report (CAFR). This report contains a balance sheet, which shows the assets and liabilities held by the city.
You would think items in the “assets” column should ONLY be income-generating ventures, right?
Not quite. Do a quick search online for your city’s latest balance sheet.
Look for an asset entry called Deferred Outflows of Resources.
This is the secret the government doesn’t want you, a taxpayer, to know about!
Basically, what happens is when cities take part in derivative transactions, or transactions where the price of the commodity is constantly changing, they stand to lose money if the market behaves unpredictably.
Take Chicago for example. In their latest report, it showed that of the $39 billion in promised retirement benefits to its dedicated citizens, the city has NOT funded almost $29 billion.
The city owes its taxpayers $10 billion! And not only are Chicagoans not receiving their pension and healthcare benefits, but they are taxed more to make up for the city’s deficit.
So, what does this mean for you?
It means that you should check your city’s report.
Look for peferred Outflows of Resources. The number reported there is for mistakes the city made, like derivative transactions or unpaid retirement benefits, and they should be liabilities.
Instead, the government creates a phony column in their assets section to act as if they made money off of these losses!
Chicago’s bottom line on their balance sheet was $24.4 billion higher than it should have been due to incorrect reporting like this.
If you want to ensure that your money is going where it should be, keep an eye out for other tricks.
Remember, the city wants you to stay and keep paying taxes.
Or, in the case of real estate, they want you to choose their locale to spend money in.
“Truth in Accounting” CEO Sheila Weinberg wants you to know how to protect your investments, both real estate and personal, in your city.
She says that by not including underlying information about spending in their reports, the government is not giving you the complete picture of a city’s financial condition.
These bogus numbers make the burden on taxpayers like you as high as $50,000!
When getting into real estate, the location of your investment is just as important as the dollar sign in front of it.
Next time you look to plant roots for a new branch towards success, keep this tip in mind.
It can save your real estate riches that should be put to other wealth-building adventures.