Sweat Equity

When you increase your net worth by your own labor, installing your own kitchen cabinets, for example, you have increased your net worth. The best part of sweat equity is that it is tax free. What percentage of your income goes to income taxes? You just did your taxes, didn’t you? If you don’t know, fill out one of the free online forms with your approximate income, then add $100 to your income and see how much your tax liability increases. It varies widely, depending on whether you are self-employed and whether or not you live in a state with an income tax.

IMG_546211Let’s just say that for every dollar you earn, you pay $25 in taxes. That means when you spend $100 on a bee hive, you had to earn $133.33 (x – .25x = $100). If you spend, say $10 on lumber (you had to earn $13.33) and build a $100 hive, you’ve saved $90. But, to have that $90 in the bank, you would have had to earn $120.

With practice and appropriate jigs on your tools to reduce measuring and set up time, it is possible to make a bee hive in between 1-2 hours. It’s like tax free income. With interest rates on saving accounts, CDs, and bonds hovering around 0.1—4%, it sounds like a good deal.

Don’t forget the other best sweat equity deals around—vegetable gardens, chickens, and wood stoves.

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