How to give when you have a business

Ella Yazzie and her new wood stove

A few years back, three very different things happened and, to the best of my recollection they didn’t happen all that close together. 

First, in 2012, I wrote the post How to Give Like a Billionaire. In it I described how to use Donor Advised Funds (DAF) to maximize your tax deduction for your charitable contributions. In short, the idea was that by making a large donation into your DAF and then distributing the money over the following years, more of it would be deductible.

For example, let’s say you plan to give away $10,000 a year for the next five years. Back in those days, the standard deduction was $5950 for singles and $11,900 for those married and filing jointly. While the standard deduction is a wonderful thing, this also meant a large portion, maybe almost all, of your contribution wouldn’t go to reducing your tax bill. With a DAF, on the other hand, you could contribute and deduct the full $50,000 in the first year and then distribute it in your planned $10,000 chunks over the next five years.

Second, around that time, I was also looking for a new charity to support. Specifically, I wanted one that provided services to Native Americans. I don’t recall how, but the one I found was Adopt-a-Native-Elder (ANE) run by Linda Myers out of Utah. She and her team serve Elders ranging in age from 75 to over 100, mostly on the Navajo Reservation. Native Americans in general are the single most disadvantaged group in our country and none more so than the elderly. Many live in very remote areas on the Res and often without electricity or running water.

Linda Myers

In short, this was exactly what I was looking for. Except for one thing. They were not listed on Charity Navigator (CN), my go-to for vetting charities. Ordinarily that would have been the end of it. There are simply too many scams out there and too many fine organizations not to go with one whose integrity can be confirmed.  And, in fact, I did walk away. 

But I kept checking back and the more I learned, the more I liked what I saw. Finally, I convinced myself to take a chance on them figuring they were just too small to have the time and resources to go through the Charity Navigator vetting process. Still it made me nervous and every time I had the occasion to go on the CN website, I looked to see if they were listed. Then, after a year or two, there they were and with absolutely first rate scores

Third, probably around 2015 we were spending a month or so at Shamba, my in-laws’ beach house on Lake Michigan. We had invited Carl (Mr. 1500 Days) and his family to join us for a few days. Carl, being Carl, brought along his pals Keith (The Wealthy Accountant) and Leif (Physician on FIRE). By the end of the weekend, I had two new friends and one cool new idea.

The cool idea came from Keith and it was this: If you have a business, rather than making a charitable donation and listing it on your Schedule A, buy a sponsorship with that charity and deduct it as a business expense. That way you get to deduct the full amount from dollar #1 without your standard deduction pulling away some of the tax savings.

Coincidentally, and very usefully, just this month Keith wrote a post describing this approach in detail so I don’t have to: Charitable giving for businesses

While at the time this was very interesting and I did indeed have a small business – this blog – the revenue was so low it didn’t even cover my expenses. The last thing I needed was a new, even if deductible, expense.

So this all got tucked away into my memory banks and had been rattling around there for the last few years, until a couple of months back. Then, three more things occurred to me:

  1. The Tax Cuts and Jobs Act (TCJA) of 2017 dramatically raised the standard deduction. It is now $12,400 for singles and $24,800 for those married and filing jointly. To be clear, this is great for us taxpayers. But it does reduce the potential tax savings of your charitable contributions, and that makes the sponsorship idea all the more attractive.
  2. With the growth of my blog and my efforts to monetize it, along with the royalties from The Simple Path to Wealth, my little business is now solidly profitable and in the position to help me give away even more money than before.
  3. My respect and enthusiasm for the work Linda and her team do at Adopt-a-Native-Elder has only grown through the years and I wanted to expand my support.

Marie Nez and her new wood stove

With that in mind, in April I sent Linda the following email:

Hi Linda…

Hope this finds you in great health and spirits.
For the last few years, we have been donors to Adopt a Native Elder through our donor advised fund with Vanguard: 

The XX XXXXXXX Charitable Fund

You, in turn, always send us a lovely note of thanks. The most recent being Dec 20, 2019.
In addition to these contributions, I would like to buy a sponsorship through my company. While I might have missed it, I don’t see sponsorship opportunities on your website. If they are there, you can stop reading and just point me to them.
If not, perhaps we can create something simple. The goal is to get this money into your hands in the most tax-advantaged way for me.
For this to work, my company has to receive something of value for the sponsorship dollars. Typically it is something like advertising/promotion.
But you and I get to decide what that is, and other than satisfying the IRS, I don’t much care. We’d both want it to be something that is as little bother for you as possible. The goal is not to benefit my company. With that in mind, I am open to your suggestions.
Please let me know if you are interested and if so how you would like to move forward. Please also feel free to call and we can kick some ideas around.
If you want to know more about me and my business, and you should, the link below my name will take you to my blog. I certainly vetted you before donating. 🙂
Thanks for your consideration and for the great work you and your team do.
Be assured that even if you prefer not to pursue this idea, we will continue to support Adopt a Native Elder as before.
Warm Regards,
My goal was to get this money into their hands as seamlessly as possible for them. I had no real expectation of any benefit to me, other than the enhanced tax deduction. After all, Native Elders living in remote corners of the Navajo Reservation are not likely readers of my blog or book. But I lacked imagination.

Boxes of food ready to be delivered

Linda and her team came back with the suggestion that my contribution go to funding their newsletter sent out to their donors and supporters. The amount needed for 2020 was a bit over what I had in mind and, while they didn’t ask, I rounded it up to cover it fully and sent out the check. Job done:
Money in the hands of ANE and put to good use…
As a sponsorship satisfying to the IRS…
And with my logo on the newsletter going out to their donors and supporters who might indeed turn out to have an interest in my work.
In short, the process was smooth and simple, due in no small part to the efficiency of Linda and her team. My intention is make this an annual thing with ANE and to explore this idea with other charities we support. If it works with those this well, our giving might well transition entirely into this sponsorship model.

Jennie Todacheenie and her newly delivered firewood

More on Adopt-a-Native-Elder

Ordinarily, I don’t like to talk about the specifics of my charitable giving and never have before.* While the religion didn’t stick, some of the teachings from my Catholic upbringing did. Like this one:

Matthew 6:3 (King James Version): “But when thou doest alms, let not thy left hand know what thy right hand doeth.”

As explains:

That meaning alluded to the wisdom of not giving oneself credit for providing charity to others – just give and forget about it. That view was reiterated by Henry Thoreau in his Walden; or life in the woods, 1854:

“If you should ever be betrayed into any of these philanthropies, do not let your left hand know what your right hand does, for it is not worth knowing.”

While that always made sense to me, in this post I have crossed the line in the interest of explaining this sponsorship/giving/tax technique. Since I have, I may as well take it a step further.

Not only is Adopt-a-Native-Elder incredibly responsible and effective in using the money folks like us contribute, the need is great. Especially in this time of Covid-19.

In one of our conversations, Linda shared with me that the Navajo Reservation is the single most hard hit population in our country with this virus. Seems when the economy shut down, many young Navajos working off the Res were among the first to be laid off. Before the risk was fully understood, they returned to their families many of whom live in multi-generational households. The virus, of course, loved this.

Sure enough, shortly after Linda gave me an insiders look, this tragedy showed up in the news:

“TUESDAY, June 9, 2020 (HealthDay News) — The U.S. center hardest hit by COVID-19 isn’t headline-grabbing New York City; it’s the Navajo Nation in the American southwest…”

If you are looking for a new charity to support, this is a great one. Mostly they focus on delivering food, wood stoves, firewood and helping the Elders sell their hand woven blankets and other goods.

Volunteers who make it happen

Tell Linda I sent you!


*This should in no way be taken as a criticism of those who do talk about their charitable activities. There are many benefits to sharing those, not the least of which is lighting the way for me to share this story with you.

Stock move update
Back in March I shared with you a move I made to eliminate a future capital gains tax in the post Taking Advantage of Mr. Bear. In it I described selling VTSAX in our taxable account, taking advantage of the fact the market had dropped and it could be sold without incurring a capital gain. At the same time, I bought the same amount of VTSAX in our IRAs. Also at the same time, we bought the same amount of VBTLX (bonds) in the taxable account and sold (to buy VTSAX) in the IRAs. Net result: Exactly the same stock/bond allocation, with the capital gain wiped out.
This week, with stocks recovered in price, I did the same in reverse. Once again our allocation is the same, but the bonds are back in the IRAs where they are best held. VTSAX is back in the taxable account, but now at a higher cost basis.
Job done!
Here are some books I am currently reading and enjoying:


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Important Resources

  • Talent Stacker is a resource that I learned about through my work with Jonathan and Brad at ChooseFI, and first heard about Salesforce as a career option in an episode where they featured Bradley Rice on the Podcast. In that episode, Bradley shared how he reached FI quickly thanks to his huge paychecks and discipline in keeping his expenses low. Jonathan teamed up with Bradley to build Talent Stacker, and they have helped more than 1,000 students from all walks of life complete the program and land jobs like clockwork, earning double or even triple their old salaries using a Salesforce certification to break into a no-code tech career.
  • Credit Cards are like chain saws. Incredibly useful. Incredibly dangerous. Resolve to pay in full each month and never carry a balance. Do that and they can be great tools. Here are some of the very best for travel hacking, cash back and small business rewards.
  • Empower is a free tool to manage and evaluate your investments. With great visuals you can track your net worth, asset allocation, and portfolio performance, including costs. At a glance you'll see what's working and what you might want to change. Here's my full review.
  • Betterment is my recommendation for hands-off investors who prefer a DIFM (Do It For Me) approach. It is also a great tool for reaching short-term savings goals. Here is my Betterment Review
  • NewRetirement offers cool tools to help guide you in answering the question: Do I have enough money to retire? And getting started is free. Sign up and you will be offered two paths into their retirement planner. I was also on their podcast and you can check that out here:Video version, Podcast version.
  • Tuft & Needle (T&N) helps me sleep at night. They are a very cool company with a great product. Here’s my review of what we are currently sleeping on: Our Walnut Frame and Mint Mattress.


  1. Chad says

    I have wondered for a while now, and also brought it up to a few financial independence groups the idea of paying it forward.

    I love the idea of charitable giving, but I was also considering teaching.

    With basic things no longer taught in school anymore, I was considering attempting to see if there where groups who went to and mentored/taught the basics such as Debt avoidance, long term savings, investing and so on.

    The best way to lift people up is to “teach them to fish” to borrow from an old book I once read. I have a buddy in the Apache Nation and had also looked at some of the guys I worked with who live in or near the inner city, both of which could improve from independence investing can give you.

    Always love Reading your posts, giving me some motivation to get off my backside and reach out to them again.

    Thank you Sir,

    • Genuine Peach says

      Definitely agree with this! I remember one business teacher from high school who went outside of the curriculum to teach us budgeting, stock investing, interest calculations, website building, and other useful skills.

      The most fulfilling thing you can do is help lift others. You can also teach on a small scale in your day to day life, especially by example. I plan on teaching in my field of work as well as on the topic of financial independence.

    • Bree says

      You might want to consider volunteering with Junior Achievement. It’s a nonprofit that offers a variety of programs in schools K-12 focused on principles of entrepreneurship and financial literacy. Not sure what volunteering opportunities exist in these Covid times, but it might interest you.

  2. Finally says

    Have waited awhile for a post and glad you at least included stock update. So much advertisement for one charity. Could have just talked about charitable giving and mentioned it once or twice or 3 times but wow you did quite a lot. But hey it is your blog so do what you want.

    • Alan says

      To Finally – Hopefully by reinforcing the message you have taken a look at the charity.
      No doubt like most readers you have gained great value from reading this blog. Surely taking a moment to read the post and learn was worth the seconds of inconvenience.
      I don’t usually post, but this one gave me an unwelcome pang.
      Be kind.

      • D says

        If you sell a stock from one account and immediately buy the same stock in another account, this incurs the wash rule. You will experience legal issues if you don’t handle accordingly.

          • Sheila says

            Hi Mr Collins,

            Thank you for sharing specifics of your charitable giving. One of my objectives this year is to give more, so this month when I found your post I made a donation to ANE. I wanted to let you know that your post inspired me, and likely others, to give.

            Kind regards,

      • D says

        The IRS Wash Sale Rule (IRC Section 1091)

        IRS Publication 550, page 59 states:

        Wash Sales

        You cannot deduct losses from sales or trades of stock or securities in a wash sale unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:

        Buy substantially identical stock or securities,
        Acquire substantially identical stock or securities in a fully taxable trade,
        Acquire a contract or option to buy substantially identical stock or securities, or
        Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.

  3. HK Goh says

    Well done sir. I am hoping to do the same in Malaysia. Started to identify a few charity organisations and hope to contribute more soon.

  4. HK Goh says

    Dear Sir,
    I am thinking of giving away your books to my blog readers since I love your book so much. If I meet you next year, I hope that you can help me to autograph the books so that I can give them away in 2021.
    See you sir!

  5. vorlic says

    “To give and not to count the cost.”

    I trust you did very good research here.

    But my right hand would worry that the labour of the returning, healthy Indians will now be worth a lot less and their sense of worthlessness may well be increased. What do Linda and her team do to counteract this possible effect?

    I remember the African seamstresses and dressmakers who were bankrupted when Oxfam flooded their country with second-hand clothes; many turned to prostitution.

    When I consider helping someone, I must be able to answer yes to three questions:

    1. Have they asked for help?
    2. Do I believe they need that help?
    3. Am I able to help?

    There are some obvious exceptions; someone knocked over by a vehicle is quite probably not going to asking calmly for my help, if at all!

    So my left hand says, this person needs help, so I help.

    Thank you for explaining a way of making sure more value gets to the people you’ve decided to help – that is, when the day is done, the Point, and I thank you for it. I plan and work for a time when your precise advice on this matter will be relevant to me and my family.

    Ah, what a conundrum life really is…

    All the best!

  6. Angela says

    Big elephant in the room: Blacks are quite disadvantaged (as a group) and also disproportionately more effected by COVID-19. Even just the slightest nod to the obvious would have been appreciated here, or even an extra step to list some vetted anti-racist charities. This is the bare minimum you can do to push our society forward and begin to dismantle a racist system that you (and me, as a white person) benefit from. But of course we should be doing MORE than the bare minimum.

    Leif, who you mention above, does this quite well on his blog, with his voice.

    • MoneyMonkey says

      Awesome article JL!

      Some of the most fulfilling times in my life were when I was helping someone out of kindness. Getting to a place where I can focus on helping others really motivates me to reach my FI number. Giving is quite possibly the most underrated perk of achieving FIRE.

      Thanks for all you do!

      • jlcollinsnh says

        Thanks for the kind words, MM…

        …much appreciated.

        Not sure it is underrated, but it’s definitely a wonderful perk 😉

    • Rob says

      Hi Angela,

      Thank you for posting your thoughts, and I feel compelled to simply acknowledge what you wrote. It seems to me that the FIRE community, in general, doesn’t quite know how to address the systemic problems existing in our country. Sure, FIRE is a beautiful thing to strive for as a white person, but it’s not an even playing field if you’re anything but.

      JL, I appreciate all the work you do and I’m grateful to have come across your ideas. It may be too much to ask for, but since you’re truly a gifted writer and a thoughtful person, I think many of us look to you to address “the elephant in the room.”

      With much respect,

      • T Howard says

        Angela and Rob,

        Help me understand why you both are looking to JL and waiting for him to address “the elephant in the room”? How about you think for yourselves and do the research yourself to find and support whatever charities you believe best reflect your priorities?

        As it stands, it appears as though you’re trying to hijack a post about using your wealth to do good for others — in this case, assisting Native Americans elders — to demand JL highlight and support your particular cause. Instead of complaining, why not in your comments make recommendations on charities you personally support that address your issues?

        While I believe the US government has plundered black wealth through slavery, reconstruction, Jim Crow, black codes, redlining, the destruction of black wall street, and more, JL’s book can be read and applied by people of any ethnicity. And, if you read FIRE books like Quit Like A Millionaire by Kristy Shen and Bryce Leung, you’ll see that FIRE is achievable by more than just white people.

        So, how do we address the systemic problems existing in our country? There are many paths we can take here, but I’d suggest it starts by loving my neighbor as myself. I see JL loving his neighbor by providing his neighbor (of any ethnicity) with education, encouragement, and opportunities to build generational wealth. I see JL loving his neighbor by giving back to causes important to him in a mutually beneficial way.

        • Rob says

          T Howard,

          The “elephant in the room” is not even acknowledging the uprisings taking place throughout the country in response to the years of systemic racism. To at least pay some respect to the inequities that have existed and promote further awareness of equity work still needed to be done seems to me the minimal thing to do.

          Maybe this is the wrong place to vent about it, but the FIRE community, in general, seems to be very self-congratulatory and not much willing to take on the more “uncomfortable” aspects of our societal responsibilities. Then again, I really wonder if this comes down to politics – yet, another area FIRE doesn’t want to touch.

          • T Howard says


            Thanks for your response. As I’ve read various FIRE advocates, FIRE principles are rather agnostic. In other words, the principles behind FIRE work for anyone regardless of ethnicity, socio-economic status, religion, education, gender, or political party. Therefore, FIRE appeals to a broad group of people.

            When I listen to African-American leaders who are trying to improve their communities, one of the primary ways they are doing that is through financial education. They are pushing their community to save and invest, create generational wealth, start black-owned businesses, and give back to their own community. In fact, I recently heard one leader who said the best way to defeat systemic racism is for African Americans to build their own FU money through investing in the stock market. In other words, much of what they are saying goes right along with the FIRE principles that JL and others have been teaching and advocating for years.

            Therefore, what JL and other FIRE leaders are advocating does help fulfill their societal responsibilities. They are giving you and others the keys to financial success and independence.

            BTW, the fact that JL is supporting Native American elders tells me he does care about the inequalities and systemic issues in our society. Read your history books about how our government treated and still treats Native Americans.

      • jlcollinsnh says

        If you are not finding African Americans striving for FI and their strong voices in this space, you are not looking very hard for them. There are several of which I am aware and undoubtedly many more of which I am not.

        To get you started, here are two podcasts I’ve been a guest on in the last couple of months:

        To be clear, I didn’t agree to be on these podcasts because they are hosted by African Americans. I agreed because they are impressive voices in the FI world, I wanted to hang out with them and, not least, they were kind enough to invite me. 😉

        That is how I choose all the interview invitations I accept, long with supporting smaller podcasts doing good work and trying to get traction.

  7. Chris@TTL says

    Oh! Thanks for the reminder about Donor Advised Funds (DAFs). I also operate a few businesses and into early retirement have thought about how best to leverage their assets and earnings potential to give back/donate.

    I appreciate the point of view from a business and additional direction.

    And that was a pretty solid way to increase your cost basis between taxable accounts/IRA during the COVID-related move up and down!


  8. Josh Dye says

    Hi JL,

    I reached out to you on Twitter about doing a speaking engagement. You asked me to contact you here.

    I know you are burned out on them now. Fortunately, I’m looking at next year in 2021. Plenty of time to rest and recuperate. 🙂

    Let me know how you’d like me to send over the details. Thanks!

  9. Isaac says

    Well, it took a pandemic, but I finally sold some VTSAX (at what I thought was a pretty high point) in my 401k for some VBTLX, to have a somewhat less risky/more comfortable for me 80/20 split. I am in my 30s, hope to finish school soon and pay off those student loans and some credit card debt, so am not putting anything in 401k beyond what my employer offers, but I feel I am at least prepared for the next drop! Now I am only waiting for a small PDF update on your book (as I may have heard or read somehwere that you have no plans to publish another book) it has been 4 years you know 😉 all the best!

      • Isaac says

        Your book is the first financial book I ever finished, but I do wish there was a chapter dedicated to “what happens if everyone buys index funds” for the average Joe (which I am of course)  who does not understand how if 10 people invest 100$ in a company (which hypothetically is part of the index) only worth 100$, how index funds are not a bubble. This topic has been discussed by others, and you mentioned it I think in one of your interviews… Still a difficult concept to understand. It’s one of those things where even though I know I am investing the right way, I can’t fully explain it to someone else! Although I do like the Bogelism which is something to the effect “Why look for the needle if you buy the haystack?” Also little updates such as new tax laws, benefits, costs, minimum investment needed. The blog is unique in that I think it supplements the book, but it is, as you mention a little disorganised 😉 Not meant in any way as a criticism! Congrats on your books (or as I tell friends, the bible)  4th birthday!

        • jlcollinsnh says

          Thanks Isaac…

          Even if I updated it there probably wouldn’t be a chapter on “what happens if everyone buys index funds” as I don’t see that as a ‘real” issue. If you plug that phrase in to the Search box you can find posts and/or comments where I disuss it.

          There are a couple of recent posts in the Stock Series that might become chapters and “Also little updates such as new tax laws, benefits, costs, minimum investment needed” But those are mostly to illustrate the concepts and keeping them updated would be never ending. Not sure I want to go there. 🙂

          Thanks for your kind words and thoughts!

      • Dusty says

        Mr. Collins,
        Great book by the way.
        What i would like to see addressed in the book is any strategies for lowering tax consequences with regards to minimum distributions in retirement from IRAs and 401Ks?
        Also, i you might discuss a number of pundits have predicted the collapse of Index funds. (Michael Burry is one)


  10. Inspire To FIRE says

    Thank you for sharing the Charity Navigator site! It looks like a great resource to know that donations are going to reputable organizations that will use it effectively.

  11. Germaine says

    Hi Mr Collins,

    Do you have a press email address or rep to reach out to for interview requests?

    Would like to invite you to do an online interview 🙂

  12. Mario Lattuga says

    Hi Mr. Collins,

    I founded the company, Investor Recourse, that was inspired by my years as a securities arbitration attorney representing aggrieved investors who were wronged by their advisors and stockbrokers. Your book is fantastic. In fact, I sent it to more than one relative. Truly a must-read.

    I would love to chat with you about what we’re building; we think you’ll really love it. To that end, could you please contact me at the email address provided? It seems there’s no direct way to get in touch with you. Looking forward to speaking!

    Thanks so much,


  13. Mo says

    Hi Jim,
    I need your advice, I’m a teacher near my retiement and I have a lot of anxiety getting back to class this fall. My wife and I both have asthma and other health issues. I’m scared to bring this new virus home to my wife and kids. I have listened to your advice and we have saved up F U money to last us for another five years of expenses. If I quit now I will not will be able to retire on time and it might take me a few years to find another job. I had read that you had stopped working for a few year swhen you saved up for your F U money .I’m thinking of doing the same thing.We both have worked hard as teachers to save this money but I feel like we don’t have any other option at this time. Do you think this is a rational thing to do ? Is this the best time to use F U Money?
    Thank you so much for your help and advice.

  14. Chaim says


    I’m at page 177 in your book and I am blown away! So many lessons my Jewish father taught me as a little boy have slipped my mind and I’m grateful to have you as a reminder of those lessons.

    I am 27 and I recently put money into a Roth ira with Betterment and after reading your book I realize that this may have been a mistake. I am in the 22% tax bracket and can be using the tax benefit of a traditional ira to re-invest in a taxable account. On page 150, you advise to “fund a Roth only if you are paying little or no income tax and once your income tax rate rises, fully fund a traditional IRA rather than the Roth”.

    My question is: what do you consider little tax? Is 22% little? (I’m assuming it is not, but want to confirm with you, as the book does not give an example.) I’m forever grateful for Your book!


  15. Carolyne says

    I need help Jim. How to overcome my fear of investing.
    I’m so afraid of loosing my VERY hard earned money that I find BND too risky and I keep 90% in SHV instead.
    How do I overcome my fear of losing money? and I read your book and all about how bad inflation is and bonds loose value etc..but still, I can’t overcome that fear ! Help !

  16. Glen says

    This comment is not relevant to this article – just did not know how else to get a hold of you. I wanted to express my thanks and gratitude for your help and advice both on this site and as a guest on many podcasts. I just retired at the young age of 63.5 and your wisdom helped me to retain my resolution through the recent ups and downs of the market (like you I have seen many more examples of this) as I got ready to retire. I have spent the last 3.5 years focusing on this last stage of investing and expense reduction, preparing for this day. I mentioned you specifically on my latest blog post:

    Many thanks -Glen, AKA TDSF, AKA TieDyeSeniorFI

  17. Financialslot says

    Great job of inspiring people to give back and also teaching how best to do it. Imagine a world when there was no philanthropy. This is my first time on your blog and I am impressed. Please don’t stop, keep the good work on.

    • Financialslot says

      Good evening Mr Collins, im a regular reader of your blog and some few months ago commented on your site with a backlink to my site financialslot.

      I am seriously having a Spam problem on my site and trying to do some clean up. On that note i will kindly request you to help me remove the url to my site in the comment above or delete the comment altogether.

      Thanks in anticipation.



  18. Tax Guy says

    Treating charitable contributions as deductible business expenses can be a powerful tool in the right circumstances, but it’s a more narrow set of circumstances than suggested in the post. In order for a payment to charity to be deductible as a business expense, the payment must be made with a reasonable expectation of a financial return commensurate with the amount of the payment. Treasury Regulations Sec. 1.162-15(a)(1).

    If you pay $1,000 to charity and expect to generate enough additional margin to at least cover the cost, then the entire $1,000 appears to be deductible as a business expense. You said, “I had no real expectation of any benefit to me, other than the enhanced tax deduction.” If you don’t expect to generate enough additional revenue to justify the payment, the payment is not a business expense (and is instead a charitable contribution), regardless of the fact that it is labeled as “advertising.”

    TOMS donates a pair of shoes for every pair they sell. TOMS can presumably deduct the value of the shoes they donate as a business expense because the donation program is part of its branding and the company presumably expects that the donations will increase their sales by enough to justify the program. If you advertised that you were going to donate x% of book sales through a certain date to charity and reasonably expected that the promotion would increase your sales by enough to justify the donation, then you’d have a good argument to deduct the donation of the percentage of sales to charity. In your case it sounds like it might be easier to show a business case for donating a percentage of sales than to show a business case for the donation to charity because the value of the advertising provided by the charity is questionable.

    This is just a general discussion and is not intended, and should not be construed, as advice. You should consult your tax professional before taking any action.

  19. Uyen Nguyen aka Win Win says

    Hello JL,

    I love your work and got so much value in just this one blog post. You are really helping people in generously sharing your very specialized knowledge. Very rare do I see people truly care in this field and I genuinely appreciate your contribution to this space.

    I’m reaching out because we have an online conference for family finances to empower families with real education around money and finance. I’d love to have you on. Do you have any interest in me highlighting you?

    Nice to be connected,
    Uyen Nguyen AKA Win Win

    PS I recently started a blog with zero experience… Guess we have to start somewhere don’t we? =D

  20. Gary Miller says

    What an amazing book! I listened to it again today for the 5th time. I get something more out of it every-time I listen to it.
    Question: As I am Canadian so 🇨🇦 I can’t buy VTSAX 😥. Instead, I’ve been investing in …..
    VUN.TO = 30%
    VCN.TO = 40%
    VAB.TO = 20%
    XEC.TO = 4%
    XEF. TO = 6%
    Is there any advantage or disadvantage to just buying VGRO.TO? I’m 48 with a pension coming at 55, my wife and I now own our home and she plans to work until I retire at age 55 then we might just work part time on our terms and live off my pension of $4k per month.
    Thank you in advance.

  21. Irina says

    Mr Collins are you doing allright? No word from you here on the blog since August. Are you doing this social distancing thing with internet as well? Getting me worried. 👀

  22. Jimmy says

    I gotta be honest…this blog is one of the very few that still cares about the FIRE movement….
    It makes me really sick to see all these FIREs on the internet bragging about how great their lives are….
    GCC just wrote about a fancy and exclusive club he got in…1500days about how nice his Tesla is.
    Most FIRE guys lost the essence of the movement. It’s a shame, a real shame!!!

    • Jeremy says

      I became aware of this comment when it was shared with me via email.

      Respectfully, a part of why you feel sick is you’ve adopted a philosophy and value system that is incompatible with well-being.

      The idea that there is one right way to live, and all other ways are inferior/improper/wrong is a common trait of extremist religious groups (ISIS), radical political systems (fascism), and cults. It’s why you misconstrue things as bragging and believe that spending more is bad irrespective of why. It’s also why the choices of somebody you don’t know and will never meet aren’t just a passing curiosity.

      Money is a tool. I use it to do things I like, such as not work, travel, and get access to a swimming pool where I don’t need to share lanes.

      We practiced frugality in order to build our retirement fund. Now that it is big enough, we practice abundance.

      Best of luck to you

      • Cassedy says

        I just hope nothing like 1929 happens to you and make you regret these decisions. I’ve also noticed that you hired a nanny and the club he mentioned. All good with me but I understand why it feels wrong and it goes against what the FIRE philosophy is about. Best of luck

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