Archive for the ‘Wealth’ Category
Saturday, January 16th, 2010
By: Jason Markum
So you’ve got a few bucks put aside and are disgusted by the close to 1% interest your local bank is paying on your savings account. And you’re thinking that maybe it’s time to start investing in the stock market.
Well you’ve come to the right place!
First of all, I will tell you that I’m not a licensed financial planner in any way shape or form (though I did get a degree in economics with honors from one of the best schools in the world). And I don’t do this for a living.
That being said, I can help you greatly!
First of all, get the notion of investing in the stock market out of your head right now. You are not going to open a stock trading account online or with your local stock broker and pick some stocks to buy. That’s what most people do when they first get started and most people lose all their money.
But not you, you are smarter than that, you are doing a little research first and you are listening to me!
They say that the stock market returns an average of 6-8% per year. That’s only *sort* of true. That only works if you take the stock market on whole, and then average it over like thirty years or more. That does NOT mean that if you just buy some stock in some company, even a good company, that you are going to make 6-8% per year guaranteed.
So where does that leave us?
Index funds. There is a way to buy “the whole” stock market and they are called index funds. For instance, the S&P 500 index. You probably hear them talk about the S&P 500 every night on the news. When most people say “stock market” they are often referring to the S&P 500 or some other broad stock market index. It is made up of the top 500 leading companies as determined by S&P. See how that works?
The trick is to go to Vanguard or some other reputable mutual fund company and get an account with them that allows you to direct deposit X percent of your paycheck each month and have that money credited to your S&P 500 index mutual fund with no fees.
It doesn’t have to be much, a hundred bucks a month, fifty, a thousand, whatever you are prepared to invest each month have them direct deposit it from your paycheck or from your bank account on the same day each month.
If you do this, THEN you will receive that 6-8% stock market increase that is the historic average because you are investing in the market as a whole and not just a couple of risky companies. Of course this return is not absolutely guaranteed, anything could happen, but this is one of the safest ways to get into the stock market and almost guarantee those safe 6-8% returns.
That’s how it is done. This way you can set it up and forget about it and be assured that your money is as safe as possible for a stock market investment. That way you are diversified in case a few companies go down, which you are not if you simply pick a few stocks to buy.
Tags: index funds, investing, mutual funds, stock market, Wealth
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Saturday, January 16th, 2010
By: Jason Markum
Starting a new job can be stressful. One part of picking a new job that doesn’t have to be stressful, and in fact can be a lot of fun, is picking which perks to sign up for if you have that option. In this article I’m going to discuss a pseudo-shopping list of perks that you might expect to find when you start a new job.
Of course, this is not an exhaustive list, and it doesn’t mean that your specific company is going to offer all these perks or even any of these perks… this is just an example of what may be out there, of what you might expect, and if your company doesn’t offer some of these perks; why not ask for them?
Perks, by their very nature, are special. They are important because they allow you to save your money when you would normally spend it on the perk. This allows you, in turn, to save more of your paycheck each week which will in turn, allow you to accumulate wealth at a faster rate than you would be able to without the perk. Because of this, perks can be very important. That is why you may want to negotiate better or different perks when you start a new job or when you get promoted at your current job.
But enough about that, let’s get to the list!
Some of these perks may tend to go with higher-level jobs, but then a lot of perks do, simply by their nature… for instance, there is use of company aircraft and use of executive apartments and suites.
Another common one is a company provided car. Some companies may even offer to provide you with a chauffeur to drive you around in your company car.
Rounding out the list of higher end perks is country club memberships. These are great both for you and your company, because you can socialize at the country club and possibly bring in new business for your company at the same time.
Other perks that are not so high-level include deferred compensation plans, discounts on products or services, educational programs, employment contracts, and health club memberships. Many of these things can be negotiated at almost any level of employment.
Expense accounts are another normal perk. The size of your expense account, whether it is a small expense account or a large one, would probably be determined by the level of job you are beginning.
Other perks includes incentive stock options, group life insurance, home entertainment allowances, added health-insurance, life insurance, or disability benefits. Many companies also offer loans for mortgages at low or sometimes even zero interest rates for employees.
Other perks include lunch club memberships, big offices, medical expense reimbursements, personal computers, and special parking spots for key employees. Also you may expect to find personal financial, legal, and tax advice as well as preretirement counseling. Use of private secretaries might also be considered a perk
Some less obvious perks include resort accommodations and fancy convention hotel rooms for your use. More stuffy perks include severance payment plans, supplemental retirement plans, signing bonuses, and things of this nature.
Other perks include tickets to theater or sporting events (use of company sporting tickets is quite common), first-class travel, and extra vacation time throughout the year.
So there you have it, a fairly comprehensive list of perks that you can expect to receive or negotiate for when you start a new job.
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Saturday, January 16th, 2010
By: Jason Markum
We are in one of the worst recessions in the history of America. Money is tight for everyone. Home-equity lines of credit are shriveling up faster than you can blink, and credit cards for cracking down and raising interest rates, making it harder than ever to borrow money. And with the unemployment rate skyrocketing, many people are finding it hard to make ends meet.
So where can you find money when you need it? In this article today I’m going to talk about a really cool way to borrow money quickly without the hassle of banks or credit card companies, and at a lower interest rate than you might expect…
Most people don’t know that you can borrow money against your retirement plan. If you have a retirement plan that you’ve been paying money into for years, then you’ve got an untapped source of credit right at your fingertips. Most retirement plans will NOT allow you to cash in the plan and take money out directly, but many if not most will allow you to borrow against your retirement plan; and that is what I’m going to talk about today.
There are several things to consider before borrowing against your retirement plan. First, all loans must be paid off at a steady rate of interest over a period of five years or less. Most of the time, you cannot borrow for longer than five years from your retirement plan. There is one exception, and that is if you are borrowing in order to purchase a primary residence house; then you may be able to create longer loan terms.
Next, it is important to know that you cannot deduct the interest that you pay on this loan. This is not always the case, but it is so often that you might as well think of it as occurring all of the time.
All loans taken out against your retirement plan must be written down into an actual loan agreement with interest rates stated and the loan terms stated. You have to treat this like a regular loan that you would get from a bank and that means keeping the paperwork and making your payments on time. If you miss payments there may be tax consequences involved.
It may be possible for you to do this all on your own, but I highly recommend that you contact a certified public accountant, or CPA for short, to make sure that you do everything correctly. You’re also going to want to discuss any tax implications your loan may have as well as any tax reporting requirements that the loan may create.
There you have it, an easy and safe credit source right at your fingertips by tapping in to your pension plan.
Posted in Personal Loans | No Comments »
Saturday, January 16th, 2010
By: Jason Markum
We are in the middle of possibly the worst recession in American history. People are getting laid off right and left and there doesn’t seem to be any end in sight. If you are one of the lucky ones to still have a job, or have just received a new job, you may feel a little apprehensive about negotiating a higher salary; even if you deserve one!
Since the economy is in such bad shape, why not try this technique to increase your compensation levels without increasing your straight salary, or I should say, without increasing the “cash” part of your salary. What the heck am I talking about? I’m talking about alternatives to straight salary, or non-cash compensation.
You may suggest to your new employer that they lower or give you the minimum range in cash compensation, but make up for it by increasing the non-cash compensation part which may be easier for your employer to do within the current state of the economy. It also shows that you are a team player, and willing to help out the team in any way!
So what are these non-cash compensation things that I keep talking about? Well they include stock options, employee benefits, perks such as company cars and limousines, club memberships, and things like that; as well as low interest rate loans and free financial planning advice. Basically, we’re talking about anything that is not cash.
Maybe the best non-cash compensation is stock options. Options make a lot of people nervous because on any given day the stock market can go up or down. If the stock market goes down, your options aren’t worth as much. And also, stock prices don’t always reflect the companies true earnings or true worth.
Regardless of these objections, stock options continue to be a fantastic non-cash compensation, especially in a down economy because they don’t cost the company anything out of pocket.
Options usually come in three variations. These include; incentive stock options, non-qualified stock options, and various forms of hypothetical stock usually called stock appreciation rights or sometimes called phantom stock plans.
Incentive options and non-qualified options are actual stock while hypothetical stock or phantom stock may not involve actual stocks. Regardless, in all three cases you would need an increase over the initial stock price at the time the option was issued before you can exercise the option and actually benefit from it.
Stock options will require tax planning on your part. Be sure to negotiate free tax planning advice from your employer. Let me make that clear; I don’t mean getting advice from the employer I mean that your employer will pay an accountant or legal professional who is licensed to give advice in this area for you.
Stock options in my mind are the best non-cash compensation. I did mention earlier in the article employee benefits as a feasible non-cash option. Perks and employee benefits would be included in this sort of thing. I’m not going to go into those in greater detail because they aren’t as valuable or as fungible; that is, not as easily converted into cash as stock options are and therefore may not be quite as acceptable to you in lieu of cash salary.
However you end up splitting up the non-cash compensation, keep in mind that the economy may turn around in the future at which point you may be able to negotiate a decrease in non-cash compensation and an increase in cash compensation. Be sure to discuss this before hand, that is to say, before you agree to take any non-cash compensation offers that your company may provide.
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Saturday, January 16th, 2010
By: Jason Markum
This global recession is hitting just about everyone. Companies are losing money because the economy is doing so poorly. One way for companies to make up for losses is to lay off its employees, thus reducing a major cost center. If you have an employment contract though, it becomes much more difficult for them to fire you… but not impossible.
When you first started the job and first signed the contract neither you or your boss probably thought about firing you. It was just a distant possibility, not something to think about at the time. For whatever reason, things may have gone wrong somewhere along the way; whether because of the recession or for some other reason, your boss may be looking to get rid of your. What do you do?
The first thing you should do before you do anything else is to review your employment contract. Don’t just look at the severance clause which shows you the specifics of what a company should pay you if they terminate the agreement. Also be sure to pay attention to any other section that you think your boss may use to get out of paying severance pay, or that they may use to pay less severance than you deserve. Be sure to review the “for cause” section that will describe in greater detail what conditions you can be held in violation of the agreement, in which point your employer doesn’t have to pay you anything.
The next thing you want to be sure to do is fulfill all of your contract provisions to the letter. Don’t give your boss any pretext for kicking you out without severance. Go to all meetings, stay at work for the whole day, and don’t violate any company policies whatsoever… even tiny stupid policies. Don’t even bring home an office pen, so they can’t fire you for theft. Realize they may be looking to fire you for any reason whatsoever; even a stupid reason.
Next you should collect proof of your situation. Create a file that lists all the good work you’ve done for the company; I’m talking about good reviews you’ve received from supervisors, documents or memos that showed how you have achieved certain goals, things like this. Anything that can show you in a good light so that they can’t suggest that you are a bad employee.
Next you may request an evaluation of your work to date. This shows that you are open to criticism and are actively working to do the best that you can. Along the same lines you might try sending a memo to your supervisor discussing the current state of any projects you are working on. In the memo say things like “we are currently achieving the goals of this project”. Even if they don’t agree with you, later on you can produce this memo as evidence that you were doing your job well.
None of these things will keep you from getting fired if your boss has already decided to fire you. What they will do however, is allow you to make a case for receiving full severance and make sure you don’t get cheated out of what you deserve.
But every little thing you can do along these lines will surely help in the end.
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Saturday, January 16th, 2010
By: Jason Markum
I know we are in the middle of the worst recessions in the history of America right now, and people are getting laid off left and right. But that doesn’t mean you can’t necessarily negotiate a better salary. In this article I’m going to discuss my best negotiating tactics when it comes to salary.
I’m not going to lie to you, anytime you have to negotiate salary with a prospective employer, or even with your current employer, it is going to be awkward. On the other hand, you might not ever have such a good opportunity to negotiate exactly what you want from your employer, especially if it’s a new employer.
It doesn’t matter what you’re negotiating for, salary, or anything else; in all negotiations you can’t expect to prevail unless you know exactly what you want and exactly what you can realistically expect to get.
In my opinion, the best tactic when it comes to negotiating salary, is to wait and not talk about salary at all until you’re absolutely sure that you have the job. Why is this? Because most of the time if you are actually offered the job, then the other candidates have been turned away. I find that most of the time companies don’t keep any sort of back-up applicant ready and waiting in case you turn them down. They usually put all their eggs in one basket. And now you are holding the basket!
That means that the company has to start from scratch to find a new candidate if you turn them down. This costs them a lot of money and a lot of time and a lot of headaches that they would rather not deal with. Not to mention the fact that they will probably find less qualified candidates the second time around.
If they start to talk about compensation early in the interview process, try and change the subject or evade the question as well as you can. Remember, it’s in your interest to leave salary talk till the very end. If they keep pushing it on salary the beginning, I suggest mentioning what you made earlier in your old job and then distract them with a generic stock phrase like “I’m actually more interested in the career opportunity here than anything else”. You get the idea…
After you’ve been offered the job, be confident with your salary demands. Just don’t go overboard. If you ask ridiculously high compensation levels that are not in line with current industry standards, the fact that you’ve been offered the job and other candidates have been turned away may not save you. Be confident just don’t go overboard. You don’t want to start your new job, after all, off on the wrong foot by haggling over pennies.
If you do reach a standoff at this stage in the game try throwing a curve ball. Offer to work for a period, say a month or two, at the minimum wage level that they are offering with the understanding that after that trial period if they are satisfied with your work, the compensation level will increase to what you have been asking for.
I’ve never heard of a company actually taking somebody up on this offer… but just the fact that you offered it may be enough for them to go ahead and grant the salary level that you are asking for. This sort of selfless behavior should impress them enough to take a chance on you.
Whatever you do, and however the negotiations go, be sure to remain confident, surefooted, and act in a professional manner and I’m sure you’ll be just fine.
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Saturday, January 16th, 2010
By: Jason Markum
People move from job to job all the time these days. In fact, job hopping seems to be more popular now than ever. This has become a huge problem for many companies because they are finding it harder and harder to keep key employees. Because of this, employment contracts are becoming more and more complex in an attempt by the companies to keep a hold of their employees.
But there is a golden lining. Because companies are so keen on holding on to their employees, you can negotiate a better employment contract in many cases. There are benefits and disadvantages for you and the company when it comes to signing an employment contract and I’m not going to go into these in any sort of detail in this article, just keep in mind that there are pluses and minuses involved from your point of view and also from the company’s point of view. It’s not a bad idea to try and look at it through the eyes of the company, but that’s a subject for another article…
So what should you expect to find in your employment contract? In other words, what should you expect to find in a normal employment contract?
The first thing you’ll find is the “term”. The term indicates when the contract should begin and when the contract should end. Many if not most employment contracts tend to run from 3 to 5 years.
The next thing you’ll find are your specific duties. Some people call this a job description. This is a very important part of any employment contract because it is the basis for any employers claim to fire you “for cause”. Many times this section will be generic or general in nature, but for your sake you want it to be as specific as possible.
The next thing you’ll find is a section on compensation. How much will you earn? This usually discusses the minimum salary as well as lays out any bonuses or stock options and things of this nature that you can expect.
The next thing you’ll find is a section on vacation time. How often each year and for how long can you expect to have a vacation? Can your vacation days be accrued? Will you be paid in lieu of a vacation? These are all things that you can expect to find in this section of your employment contract.
Benefits, including life and health insurance, and any sort of pension plans you can expect your company to provide will be found in this section. You can also find information on relocation expenses especially if you will be moving to your new job from another area of the country or world.
Next you can expect to find a section on termination. We don’t like to think about this but it’s good to be spelled out before hand in your contract exactly what circumstances will lead to your termination. It will probably also discuss how you yourself can terminate your employment contract; making it a very important section.
Expect another section on severance pay. Will you receive a golden parachute if you get fired? Under what circumstances will these things occur?
You should also find a disability provision that discusses exactly what happens should you be unable to continue your employment due to disability; as well as what does and what does not constitute a breach of contract when it comes to disability.
Finally expect a clause that discusses perks. Will you be receiving an expense account? What about a limousine or club membership? Will you have to sign a noncompete provision or arbitration clause? Will the company buy your old house from you in order to relocate you? These are all things that fall under the category of perks.
Well there you have it… these are the main things you can expect to find in any employment contract. They are all negotiable, so keep that in mind before signing anything. Depending on the level of the job and the amount of compensation, you may wish to speak to an employment attorney who specializes in employment contracts.
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Saturday, January 16th, 2010
By Jason Markum
We live in a crazy world. You never know what’s going to happen. From an unexpected health emergency, to a crazy lawsuit, to an unexpected firing from work, and 1 million other things in between; we just never know when disaster is about to strike.
But you can plan ahead of time to keep your finances safe from catastrophe, and that’s exactly what I’m going to discuss in this article today.
You may be a doctor who gets sued for malpractice, you may be a business owner who gets sued for some strange liability issue, you may get stuck with insanely large medical bills and find that your insurance policy doesn’t cover them, or you may just get fired from your job… whatever the emergency you need to be prepared before hand…
I’m going to discuss a few strategies to protect your assets from things of this nature. But these things need to be applied before trouble starts, because if you try to apply them afterwards; they will not work. So here we go…
One effective strategy is to set up a family personal holding company that lets you maintain control of your major assets but at the same time transfers ownership out of your name. To do this you form a Corporation and give yourself a majority of the stock. You give a minority interest of the stock to your family members. Next transfer your assets to the corporation as a gift. How you allocate shares is important; one example is to give 30 shares to yourself 25 shares to your spouse and 15 shares to each of your three children for a total of 100 shares of stock outstanding. This way if somebody sues you, they can only take your 30 shares, and those 30 shares constitute a minority interest in the corporation.
Another effective strategy is to create a spendthrift trust. These are good for protecting inheritances from ending up in your creditors hands. Basically you set up a trust with you as the beneficiary and somebody else for instance your spouse or maybe a close friend or even a lawyer as the trustee. The downside here is that you lose control of your assets to the trustee, but you can always remove the trustee and replace them if you want.
Another effective strategy is to simply give your assets to family members. It’s important to do this before trouble occurs though, because if you do it after trouble starts a judge is likely to nullify the gift. There are gift tax consequences to this strategy that you will need to research in advance. Talk to your CPA or tax attorney before you give any gifts to your family members.
Another effective strategy is to have a life insurance policy because cash values in a life insurance policy cannot be touched by creditors. One drawback of this strategy is that single premium annuities are not protected, which is something you want to keep in mind.
These are just a few examples of how to protect your assets from a financial crisis or emergency. Sitting down with a good financial planner that specializes in asset protection, or an attorney who specializes in financial planning and asset protection, or even just an accountant who specializes in this area is a very good idea for anyone with a substantial net worth, and I suggest you do so right away.
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Sunday, January 17th, 2010
By: Jason Markum
Finding a loan is hard! Since the recession of late 2008 began, it’s become very hard to find a loan! In these difficult financial days with unemployment reaching record highs and fears of inflation running rampant, finding the *right* loan becomes almost as important as finding any loan at all.
Most people don’t even realize that there are different types of loans available depending on; what you need a loan for, your financial situation at the moment, possibly the type of job you have, and your income levels. In this article I will be discussing several places to find a loan that you may not have thought of before. So let’s get started…
One kind of loan is called a broker loan. These loans are not often advertised, but brokerage houses sometimes have some of the best loan deals anywhere. If you open a margin account at a brokerage house or with your investment firm, you can often borrow up to 50% of the value of the stocks or bonds that you hold in your account. What you’re doing here basically is using the equity in your own portfolio as collateral. One drawback of a brokerage loan is that if your investment portfolio declines in value, that is if the stocks in your portfolio decline, you may be required to add more money to your account. This is what is called a margin call and tends to get a lot of people into trouble very quickly if you’re not careful.
Another kind of loan is a credit union loan. If the company you work for has a credit union it might make sense for you to join the credit union in order to take advantage of low-cost credit. A lot of credit unions will let you borrow at interest rates that are sometimes 2 to 4 percentage points lower than regular commercial rates. And sometimes it’s easy to repay the loans if the credit union is a part of the company you work for, as you can set up payroll deductions that will automatically make loan payments each month. This can make things very easy for you if you’re somebody who doesn’t like paying bills every month.
Another kind of loan is a home equity loan. Now with the housing market meltdown that we’re seeing in this recession of 2008 to 2010 it has become harder for many people to get home equity loans. But if you have a lot of equity built up in your house, much more than the average house owner, then a home equity loan may still be feasible for you. And one upside of the recession is that interest rates for housing loans have continued to remain at record lows, which means that if you can take advantage of a home equity loan now is the time to do it since you will pay less interest than almost any time in the history of the housing market.
Another kind of loan is a loan against your pension plan. Now with pension plan loans there are often very stringent limitations, but many come with longer loan repayment possibilities especially if your loan is used to make a down payment on the purchase of a new house, as long as it’s not a vacation house but is your primary residency. Interest rates will usually be set by the pension plan trustee and are usually set at around the normal prime rate at the time.
Another kind of loan is a credit card balance transfer loan or check. Often credit cards allow you to make advances on your account in exchange for a 3% fee or more. The downside is that these loans are often very short term, and after the initial term wears off - usually within 6 to 9 months, your interest rate could skyrocket to 20 or 30% before you realize it. New credit card legislation passed by Congress last year 2009 is set to go into effect in the middle of February 2010 that may have an effect on credit card balance transfer offers. So be on the lookout for changes in terms and conditions as well as interest rates and fees for balance transfer checks.
And there you have it! These are several ways that you can find loans even in a down economy.
Posted in Personal Loans | No Comments »
Sunday, January 17th, 2010
By: Jason Markum
If you are interested in doubling your wealth, it doesn’t really mean much unless you create a specific time frame first. If you have any assets or investments that produce income, they will probably *eventually* double your wealth, and you won’t have to do anything. Of course it may take 200 years. That’s the point of having a time frame.
Yes doubling your wealth within a certain time frame, takes a little bit of planning on your part. Luckily you found this article!
If the money you’ve invested remains constant, that is, you don’t add any to it, then you can use the so-called rule of 72. All you have to do is divide the number 72 by the number of years within which you would like to double your wealth. The number you get when you do that calculation ends up being the percentage you must earn on the money you’ve invested in order to double your wealth.
For example if you wanted to double your money in 10 years, your investment would need to produce 7.2% increases (72/10) for each of those years. If you wanted to double in five years, you would need to return 14.4%. And if you wanted to double your money in two years, you need to earn a 36% gain on that investment. Pretty easy huh?
If you would like to know what your current investment portfolio is producing, and whether it is producing up to your expectations, review things very carefully. Think about getting rid of investments that aren’t doing very well and taking the money and reinvesting it in something that performs better. Think of it this way; look at each of your investments and ask yourself this question… “if I had the cash again when I make the same investment?”. If the answer is no, then you know it’s time to sell that investment and reinvest into something else.
Good portfolios for building wealth are diversified, and also balanced. For me personally, a good balance is about one third of my assets in stocks, one third in real estate that produces income, and one third in other things; things like annuities and gold, and municipal bonds; things like that.
However your portfolio seems to be balanced, it will grow far quicker if you continue to add to it in a regular fashion. For me I like to add a percentage of all the income I bring in to my investments. This can be in the form of automatic payroll deductions, or an automatic checking account transfer system, or however you’d like to do it yourself.
No matter what you do, it is important for you to remain educated about all of your investments, and upcoming investment opportunities. The more you know about an investment to less risky it becomes. And the closer an eye you keep on your investments, the less chance they will decrease dramatically before you notice and take steps against the loss.
So there you have it! Remember the rule of 72, it’s a good plan for setting a time frame for doubling your wealth…
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Sunday, January 17th, 2010
By: Jason Markum
If you are a successful person, chances are you’re too busy being successful to put any serious time into analyzing and finding investment opportunities, creating and fulfilling personal finance goals, or creating and executing a solid financial plan for your life. The paradox is, successful people are the ones that need financial plans!
That is why you should have a personal financial planner… someone who can take away the time burden necessary to create and execute your financial plan on a day-to-day basis.
So what should you expect with a financial planner? When you hire a financial planning firm, or a financial planner, they will assume responsibility for handling and coordinating your financial affairs. They will balance your investments, plan for your retirement, manager taxes, plan your estate, in some cases handle your insurance, and most of all - protect your assets.
They will need you to take an inventory of your current assets and gather up just about every kind of financial paper that you can think of. We’re talking financial records here…
When you get together all of your records, your planner will analyze it and create a sort of financial profile of you from which they will create a comprehensive plan for achieving the goals that you have set. This plan is not set in stone, but merely a recommendation and an organizational structure for you to follow. They will also give you periodic reports of your financial situation in case you need to adjust certain things over time.
Everybody is different, every financial plan is different, therefore every planner will act differently based on your exact situation. There is no one-size-fits-all, and that’s why you need a planner who will take your specific circumstances into account and work with you to reach your goals.
What should you look for in a planner? Well the first thing to look for is professional expertise. What kind of credentials do they have? The best credentials for a planner to have are the chartered financial consultant credentials (ChFC), and the certified financial planner (CFP) credential. There are also certain attorneys and also accountants the specialize in financial planning, look for these as well.
The second thing to look for is resources. Your planner should work closely with other financial professionals. People like attorneys, accountants, tax experts, investment specialists, and people of this nature so as to cover all of the bases in your financial planning needs. The more contacts they have the better off you will be.
The third thing to look for is affiliation with a major institution. Are they affiliated with a certain major bank? That may be a plus. Are they affiliated with a major investment bank? That could be a plus. Are they affiliated with a major law firm who specializes in taxes and financial matters? That could certainly be a benefit. Who your planner is affiliated with can be very important, especially if the company they are affiliated with has a long-term reputation.
I hope you understand now the importance of using a planner and I hope you have a better understanding of how to find and select a financial planner. It may just be one of the most important decisions you ever make.
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Sunday, January 17th, 2010
By: Jason Markum
If you’ve had some success in your life it may be time to sit down with a financial planner. The problem is, it’s not always so easy to find a good financial planner. You should never pick the first person you meet. You should interview several until you find one that fits your situation and one whom you feel comfortable with.
Which leads to the question, how should you interview a planner? Well you’ve come to the right place! In this article, I will explain exactly what you should ask your potential new planner before you hire them.
First ask about their experience. They should have at least three years track record as a planner, that’s the very minimum. Any sort of related financial background they may have is a plus. I’m talking about accounting, banking, brokerage, or insurance here.
What credentials do they have? Are they a certified financial planner? Are they a Chartered Financial Consultant? These two designations are important for any planner to have. They indicate extensive education and multiyear testing. You may also ask if they have been admitted to the registry of practicing financial planning practitioners.
Next ask about their support services. Do they have up to date computer services and a professional staff working with them. There may have been a time when a sole practitioner working on their own was a benefit, but that is not the case today in our interconnected global economy. Today many planners work together so as to offer more services to their clients, and broader services to their clients.
Next, ask about their clients! People often feel nervous about this, but don’t. You have a right to know how their clients see them. How many clients do they have? What type of client do they have? A planner that has more than 150 clients may be spread too thin to adequately handle your affairs. On the other hand, too few clients suggests something else entirely. Ask how many clients renew their services each year. If more than 25% renew each year, run for the door.
Ask about ongoing services. Will the planner review your circumstances every year and make changes if necessary? Are there scheduled sitdown meetings every six months or every quarter, or once a year? What exactly is the protocol, that is to say, how does your financial planner keep in contact with you? What can you expect as far as ongoing care?
Finally discuss fees. F. Planners are expensive, and you need to know exactly what charges are in store for you. Don’t expect a personalized plan for less than $2,000. If your situation is more complex, you can expect fees to go up many times this amount depending on your exact situation and the complexity of your financial affairs. Be sure to ask about all these fees before hand.
These are the main questions to ask when interviewing a planner. Above all, make sure you feel comfortable with your financial planner. You need to be able to trust their expertise, after all, this is your financial health were talking about…
Posted in Personal Finance | No Comments »
Sunday, January 17th, 2010
By: Jason Markum
One question I get asked all the time regarding search engine optimization and search engine marketing (SEO and SEM) is this; How do I promote a brand new web site on the search engines?
It’s a very good question! Most people don’t differentiate between a new web site and an old site, but there is a huge difference in how you market each of them when it comes to search engine marketing.
Why is that?
Another good question! It’s because the search engines, especially Google, view new sites different than old web sites. Google doesn’t trust a new site. It’s just not sure about it. Will the site be any good? Google doesn’t know!
So they aren’t in any especial hurry to list a new web site in their index.
That’s the first pit fall, here’s the second one…
Google like natural things. When it comes to sites, they like natural linking. It’s no mystery that Google ranks and indexes web site based on how many other sites are linking to it. Think of links as votes. The more links, the more votes. Then, the web site with the most votes wins and gets ranked higher.
BUT! Remember when I said that they like natural linking? Yes they do. And what this means is, when a new site is built, there won’t be anyone linking to it. There SHOULDN’T be anyone linking to it. Why would there be? It’s brand new, no one knows about it yet.
So in Google’s eyes, it should take TIME for a website to get linked to by other websites.
What does this mean in practical terms? A lot actually. It means that if you build a website and then the next day you go out and get two hundred other websites to link to you, Google will think that something is fishy! And in fact, something IS fishy.
Those two hundred other sites didn’t naturally find your site and link to you. Chances are those links are completely artificial. YOU posted those links by leaving forum posts, making social bookmark posts, leaving blog comments etc etc etc.
They are fake links. And Google knows this because your site just sprang into existence yesterday, it couldn’t possibly have gathered two hundred links naturally.
So what does this mean? When I build a new site, I submit it to Google Webmaster tools immediately. Then I wait a week! I do NOTHING for that week. Just let the big G meet your site and get to know it a little.
Then after that one week, go out and get one or two links. Then wait a couple of days. Then get a link per day for another week or so. Then wait another week. THEN go out and start slowly, gradually, building up links. Get two or three a day for a couple of weeks. Then get five or six a day for a couple of weeks or so, then ramp up into full steam linking strategies.
Yes, it takes a long time, sometime one to two months. But its shorter than blasting out of the gate with hundreds of links and getting sandboxes for six months into the Google Graveyard supplementary index.
Trust me!
Posted in Internet Marketing | No Comments »
Sunday, January 17th, 2010
By: Jason Markum
When it comes to Internet Marketing, one of your most important tools in the old Internet Marketing tool kit is without a doubt email marketing.
It is easily the most important aspect of most Internet Marketing done online today. Why? Because if you build up a stable, targeted email list who are eager and interested in whatever it is you are selling, you can literally continue to market to them (and thus make money off of them) forever.
Not to mention the fact that email marketing is virtually free of cost once you acquire the names on your list. Sure, it may cost you some money to build the list (say if you advertise your ‘free’ newlsetter or eBook on AdWords in order to get people to sign up for it), but I’m not talking about that, rather I am talking about the expense of clicking a button and sending your list a targeted email.
That costs virtually nothing. Yeah, you have to pay your monthly or yearly autoresponder fee, but you usually don’t have to pay ‘per email’ you send out. In that sense, email marketing is virtually free.
This is compared, of course, to the old way we had to do it, which is direct mail through the good old fashioned post office. On the Internet, an email list of five thousand might be considered quite small. But offline, mailing out a direct mail piece to five thousand people costs an enormous amount of money!
Online though, you just type out your email, click a button, an whamo! Instantly your email is sent out to your list. You can even track exactly how many people open the email, and how many people click links in the email. You can’t do that with direct mail!
So taking all of this as fact, there’s one simple question that I get asked all the time about email marketing. That question is: how often is too often when it comes to emailing my list?
Sending out an email is so easy (and free!) that people are afraid that they might just over do it. Why? Say you send out an email and that email generates an instant three thousand dollars worth of sales.
I promise you the first thing you will think when that happens to you the first time is “I just made three grand from sending out an email, will I make another three grand if I send out a email tomorrow?”. We can’t help it! And since sending out that email is so easy (and FREE) you go ahead and do it! You’d be crazy not to!
The problem is, you get in a crazy loop and soon you find yourself sending out email every day, then several times a day, and before you know it your loyal subscribers are unsubscribing faster than you can blink and your email list becomes worthless.
So what’s a good rule of thumb? Mix it up! Send offers no more than once or twice a week, but in between offers be sure to send regular email that adds value. Free stuff. Free tutorials on your industry, free tips, free eBooks. Anything your reader might find useful, be sure to give them plenty of it.
If you mix up free content (I should say free GOOD content) in between your offers, you can increase the offers gradually over time till you find the sweet spot. And you will know when that is when the time comes as long as you ease into it and learn as you go.
Posted in Internet Marketing | No Comments »
Sunday, January 17th, 2010
By: Jason Markum
Ah the eternal question in Internet Marketing! Should you submit your web site to the search engines? This debate has been raging hard for many a long years.
I get asked this question, I’d say, almost weekly. People hear so many conflicting accounts on this and there is much confusion even among some so-called experts! So today, and for all time, I am going to answer this question right here in this simple article.
Back in the day, when search engines were new and the technology unsure of itself (I am talking about around 1996 to 2002 or so) it was essentially important to submit your web site to the search engines.
Why? Because if you didn’t, you wouldn’t get indexed. The search engines didn’t do as good a job spidering new web sites (that is, FINDING new web sites) as they do today. It was far less scientific in those early days of the wild wild west of the new Internet.
Up sprang an entire industry of companies offering search engine submission services, and search engine submission software. I actually owned two of those companies, one that offered services, and one that built and sold one of the more popular search engine submission softwares of the day.
I tell you this so that you know exactly what I’m saying is true and how much money I am losing by saying it, therefore it must be true!
So here goes…today, it is absolutely not necessary to submit your web site to the search engines. So don’t go buy that service, and don’t go buy that software.
Why? Well, for several reasons. First, if your web site is a wordpress blog like SO MANY of the sites on the Internet today, then every time you make a post, your wordpress backend likely pings many places. If you have any sort of XML sitemap plugin installed, it will probably even contact the major search engines (ie Google, Yahoo, Bing) and tell them that your site has just published a new page.
So right off the bat, you are covered. But what if you don’t run wordpess? Will Google find you? Yes, just sign up for a free Google Webmaster Tools account. There you can instruct Google immediately that you have a new web site.
You can even upload your site map directly to google there. All totally free. It’s quick, it’s easy, it’s hassle free, and you don’t need to pay for expensive submission software to do it. Bing has a similar feature in its free Bing webmaster tools.
And these days, those are really the only search engines you have to worry about. Google has something like 65% of all search traffic, and Bing/Yahoo has close to 30%. Thats a combined search penetration of around 95%. ALL the other “search engines” only make up 5% of search volume, so don’t bother with them. Chances are they will find you anyway after Google lists your site.
So there you have it. That myth is finally laid to rest. You do not have to submit your web site to Google using expensive software or expensive services.
Posted in Internet Marketing | No Comments »
Sunday, January 17th, 2010
By: Jason Markum
I’ve been making money online for a long time. Around fourteen years actually. I’ve seen everything under the sun. Believe me, I’ve seen some pretty crazy stuff.
But the question that I get asked most often from new people just starting out online who want to make some serious money is this: Should I create my own product or should I just market someone else’s affiliate product?
That’s a really great question, and one that I will answer in this article for you today.
First off, the broad answer is; it depends! I know a lot of people don’t want to hear that, but it’s really true. Whether to dive right in and create your own product or start off slowly by marketing someone else’s is a question that is different for every person.
First of all, what is your background? It’s cool to make money online, but it IS a business. Do you have any sort of business skills? Have you worked in business in general? Have you owned your own company before? Do you have seed money to get you off the ground? These things all come into it when determining how to start.
For instance, you may need to start a limited liability company or a corporation. Do you know what that is? Have you done it before? Do you know how to do it?
These are questions that need to be answered before you move forward. Why? Because they are relevant if you want to create your own product. There are tax reporting issues, customer support related issues, insurance issues, etc that need to be addressed.
On the other hand, if you want to dive right in with affiliate marketing, you don’t necessarily need to address any of those things. You may want to form a corporation to shield your tax liability a little, but strictly speaking, you don’t have to do that.
Affiliate marketing can be as simple as picking a product on ClickBank, signing up for free as a ClickBank member, getting an affiliate URL, and sending traffic to that URL. Then when people buy the product, the purchase is handled completely by ClickBank, you just have to wait for your check to arrive in the mail giving you your cut.
Of course, it’s a little more complicated than that, but you get the idea. It’s MUCH easier to get started in affiliate marketing than it is to start your own company selling your own product that you create.
So keep these things in mind when deciding how to get into Internet marketing. Its a very rewarding field, but it ain’t as easy as some people would lead you to believe!
I often recommend if you don’t have a lot of business experience, or technical experience in computer programming and such then you test the waters first with affiliate marketing before jumping into the deep end and creating your own product from scratch.
There’s a lot you can learn from affiliate marketing that you can use when you do take that final step into building your own product, and there’s no real easy way to learn without first jumping in and doing affiliate marketing.
Posted in Start a Business | No Comments »
Monday, January 18th, 2010
By: Jason Markum
I’ve been around the Internet Marketing scene for a long time. I mean a LONG time. I started Internet Marketing back in 1996 and made my first dollar in 1997. Back then there was no such thing as “Internet Marketing” it was just “Hey I think I can make some money online, let’s see if I’m right”.
There were no “guru’s” there were no experts, there was nothing. You couldn’t even go to the book store to get a book on how to build a web site, because there were no books about that sort of thing at the time!
I was in college at the time, 1996, I was a freshman. I decided to declare my major as Computer Science so that I could learn how to build web sites and Internet type software. I trooped down to my advisers office and filled out the papers declaring my major. Then I opened up the catalog of classes to pick some juicy Internet classes.
And….there weren’t any. Not a single class that related to the internet in any way. No web site development, no java, no HTML, no database design for Internet. Nothing.
So I dropped out and set out to learn this stuff on my own.
Why the background history lesson? Just so you understand that I know what I’m talking about when I say that I’ve seen it ALL online.
And time and time again I see newbies make the same mistake. What mistake is that? Well, I’m about to tell you. The mistake is they….
…don’t stay laser focused.
These days, Internet marketing seems to be about fads. This month affiliate marketing is hot, next month it’s SEO, the next month its AdSense, the next month its CPA, the next month its ebooks, the next month its…and on and on.
Newbies wander into the Internet marketing forums and read something that looks promising. Affiliate marketing, for instance, and they buy a bunch of home study courses and ebooks teaching them what they will need to know. Then they slowly start to put the techniques to effect. Then they head over to the marketing forums where the next new fad is being discussed.
They get excited! Oh! That looks promising! So they buy some home study courses and ebooks and start to do the new thing, completely ignoring the old thing that they never quite got around to fully implementing.
This crazy chain goes on for a year or so until they realize that they’ve spent four thousand dollars on marketing courses and ebooks and don’t have a penny in sales or profit to show for it.
At which point they declare that this internet marketing thing is a sham.
But you see what happened. They didn’t stay laser focused. In Internet marketing it’s easy to get distracted. Since it’s all online, we have a natural tendency to think we can do two or three things at once. You wouldn’t open a gas station, a restaurant, and a shoe store all at once in real life, but you might not think twice about opening an affiliate marketing program, an AdSense account, and creating your own ebook to sell all because these are online and seem less tangible and difficult.
That is a mistake. Focus on one thing and one thing only until you have built it up to make a steady income to whatever level you are comfortable with. Only then, should you branch out and try something else.
Stay laser focused if you want to succeed.
Tags: Internet Marketing
Posted in Internet Marketing | No Comments »
Monday, January 18th, 2010
By: Jason Markum
If you are one of the unlucky ones to recently have a check bounce, you may be absolutely amazed at the size of the fee that the bank charged you for a bounced check
. It may have been $10 and it may have been $15 and it may have even been $25 or more depending on the bank. Now there is legislation that has been passed by Congress to help you out in this area but those changes don’t go into effect for a few months.
Doesn’t it seem weird to you with all the technology banks possess, they don’t seem to have the simple technology that will handle a stop check cheaply? Why does it cost so much money when you bounce a check? There is no reason why it should. Of course, the reason is simple. Bounced check fees are major profit centers for the banks. Whether this is right or wrong morally is a different question for different article; it simply is and that’s what we have to worry about.
So what can you do if you bounce a check? The bank just takes the money out of your account, that is to say, they take the fee for your bounced check right out of your account. Many people would consider this trespassing or theft! Of course, it is not because you signed an agreement with the bank when you opened your account allowing them to do this…
But, there is hope…
If the overdraft fee was the result of a bank error such as losing track of a deposit or maybe charging some other customers check to your account or something like this that was the fault of the bank, you should absolutely demand that they not only take off the fee but they should also send a letter to each person that tried to cash your check and wasn’t able to, explaining that the bank was at fault and not you. What I’m talking about here is if you paid your electric bill with a check and it bounced because of a bank error, the bank should send a letter to the electric company explaining that it wasn’t your fault that the that the check bounced.
This way the electric company doesn’t charge you a late fee or a bounced check fee or doesn’t hurt your account in some way.
Of course, the bank will NOT want to do that. So what should you do? First of all be firm and be persistent. If whoever you’re talking to isn’t being helpful go over their head and talk with their supervisor, talk to the branch manager, talk to whoever you have to and don’t stop talking until you get what you deserve.
Don’t forget about small claims court and don’t be shy about letting the banks know that you are willing to go to small claims court to settle this matter. Small claims court doesn’t require a lawyer, it’s basically just people like you with small grievances standing in front of a judge and explaining what happened in everyday language. Of course it doesn’t cost you any money in lawyers fees because you won’t need a lawyer, but the bank almost certainly will need a lawyer to defend itself because banks are institutions with shareholders and responsibilities and they can’t just walk in any court without a lawyer. So very often just the threat of small claims court is enough to get the bank to do what you want especially if it’s obvious that it was a bank error to begin with.
If the current small claims court doesn’t work there’s always the threat of larger court and class-action lawsuits. Of course this may cost you some money and definitely more time as you will definitely need to hire a lawyer for the sort of thing hopefully the threat of this is enough for you to win.
Of course if your overdraft is completely a result of your OWN negligence, that is to say, it was your own fault, you may just have to grin and bear it and pay the fee. And look for a new bank that either doesn’t charge overdraft fees or charges much less costly overdraft fees.
Tags: Asset Protection, Wealth
Posted in Personal Finance | No Comments »
Tuesday, January 19th, 2010
By: Jason Markum
How To Sell An Unprofitable Business
We’ve all been there! You worked your tail off for years, you put your heart and soul and everything else you had into building a business but it just didn’t work out. Sure the company makes money, and you’re able to meet payroll most of the time, but as far as being profitable… well that’s another matter.
And you finally made the decision, it’s time to get out.
So how exactly do you sell an unprofitable business? Believe it or not, even a company that doesn’t make a profit, still has value and is worth money to the right people. In this article I’m going to discuss several ways to sell an unprofitable business that you may not have thought about.
In my mind there are basically for potential ways to sell a company that is losing money.
The first way to sell an unprofitable business is to look for a large publicly traded company. I’m talking about companies who’s stock trades on the New York Stock Exchange or the NASDAQ. Look for a company that closely mirrors the industry that you are in or one that has a specific need for what your company offers. These companies often have large sums of money at their disposal, as well as stock in their own company to use as incentives. Just because your company is not profitable, doesn’t mean it would be unprofitable for them. Often economies of scale allow large companies to turn a profit when a small company would not.
The next way to sell an unprofitable businesses is to look for entrepreneurs. People who like to buy and run companies often have a higher risk tolerance. Look for an entrepreneur with experience in your specific market or industry. Why would an entrepreneur buy your money-losing business? Because many times it is cheaper to buy an existing business that is to start one from scratch. And as an entrepreneur, they may have ideas that you’ve never thought of to turn the business around… that’s what they do.
The next way to sell an unprofitable business is to consider the company’s current management. Sure, you were the owner, but have you been running things on a day-to-day basis? There’s a good chance that you had a management team in place, and those managers may want to buy the company from you. Current management can always find venture capital for seed money if necessary.
The fourth and last way to sell an unprofitable business is to look for foreign companies. Many times foreign companies are just looking to get in the front door in a particular US market. They just want a toehold in America, and you can give them one! There may be additional hurdles for this technique if your company is a technology company, in which case the US government may need to sign off on your sale to a foreign company. But if your company doesn’t deal in technology or another strategic industry, selling to a foreign company may be just the thing.
So there you have it four ways to sell an unprofitable business! Whichever way you choose, the next step is to quietly send out test balloons, that is, send out feelers to whichever group you’ve decided to approach. Look at it from the potential buyers point of view, and be ready to show them exactly why your company makes sense from their point of view and you will be just fine.
Tags: business, entrepreneurship, Finance, sell a business
Posted in Start a Business | No Comments »
Tuesday, January 19th, 2010
By: Jason Markum
Bank failures! Who would ever have thought that we would be talking about bank failures? We aren’t living in the wild West or the depression era when banks routinely went out of business and depositors lost all their money! The FDIC was created to stop bank runs after all…
But then the recession of late 2008 and 2009 struck. 100 banks went out of business in 2009, and some authorities believe that number could increase in 2010. And it’s not just little banks; major banks have also gone out of business within the last year. Some of these banks get bought up by larger banks, but some of them simply fade away…
Yes, we have FDIC insurance that will pay you back all the money you lose up to a certain amount. But! It may be years before you see that money! And what happens if you have more then the FDIC minimums? I’ll tell you what happens, you’re out of luck!
So how do you make sure your bank isn’t about to go out of business? Here is a list of several questions you can ask your banker that are appropriate and not at all pushy that will give you a pretty clear indication of how financially firm and solvent you bank really is…
First, ask for your bank’s financial statement. Any bank or thrift will be able to provide you with their most current financial statement. Most of them publish them either annually or semiannually. Try to get the most current up-to-date financial statement.
When looking at the financial statement, pay special attention to the net worth of the bank and also look and see how many workouts are listed. A workout is When the bank is helping troubled companies. Also pay special attention to the amount of real estate the bank owns or has lended out.
If your bank is a publicly traded company then you can check with the SEC, the Securities and Exchange Commission, to get all of their current financial statements. Take a look at the investments that the bank has made, are they safe investments or do they seem shaky to you?
Take a look at the bank’s track record over a long period of time. What you’re looking for here is the growth rate. Has the bank grown quickly? If so this may be a warning signal since fast growth rates can be interpreted as the bank taking Too many risks.
Finally you should ask about the banks “at-risk” loans. At-risk loans are loans that have been in default for two months to four months, that is sixty to one hundred and twenty days. Obviously the more of these at risk loans your bank is carrying, the higher the risk that the bank could go out of business.
The best thing that you can do is to make sure that you keep less money in your account than the minimum FDIC payout rate. This used to be $100,000, but has been raised recently. Check with the FDIC to see what the current rate is and make sure you keep less than that in any one bank.
And be sure to keep up on current events. Most of the time newspapers like the Wall Street Journal begin to sniff around a bank if they feel it may be in trouble. Spotting warning signs early can ensure that you get your money out in time.
Tags: bank failures, bank run, banker, FDIC
Posted in Asset Protection | No Comments »
Tuesday, January 19th, 2010
By: Jason Markum
I’ll bet you don’t think about banks very often, but picking the right bank is very important. And picking the bank that’s right for *you*, is extremely important! Not all banks are created equal. Some banks are desperate for customers, they will bend over backwards to help you out in every way possible. Other banks are old and stodgy and could care less about you or your business. These banks are interested only in squeezing as much money out of you as possible.
Some banks specialize in certain kinds of loans. Other banks specialize in certain kinds of services. Some banks are not banks of all; but are instead credit unions savings and loan institutions. Some banks focus only on large corporations and aren’t interested in individual customers like you. Some banks are private, and only available to the very rich.
Some banks will charge you fees for everything, some banks won’t charge you fees at all, and some banks will offer some combination of the two. Some will work to offer you credit cards at low rates. Some banks will call you when interest rates have dropped enough to save you money on a house loan refinance.
The point is… all banks are different and finding the one that’s right for you can save you thousands of dollars over the course of your life. So how do you pick the right bank?
First, think of the bank as anything else. Think of it like a supermarket or a gas station. People have this strange notion that banks are sacred or scary when in fact, they’re just a business like anything else. You wouldn’t buy eggs from a supermarket charging you five times more than another supermarket would you? But people do this with banks all the time. You’ve got to think of banks like you would for any business and shop appropriately.
Watch and see how the bank handles customers during busy periods. Is there an express checkout line? Are there lots of lanes in the drive up window? Are there more than one branch near your house? Is it hard to get your banker on the telephone, and will they even return your phone calls? These are just a few things to keep in mind when evaluating a bank.
What basic rates of interest are they charging at the moment? Do those rates compare favorably to the national averages? Do they charge different rates for different balances?
Check to see if they charge fees if your account falls below a certain minimum level. What are those fees? Will they ever waive those fees? Do they charge the fees automatically or will you be billed separately?
What kind of transaction fees does the bank charge? Does it charge ATM fees? Are there checking fees? Do they offer online banking and if so, do they charge a fee for it? If so how much is that fee and will they waive it for a new customer? Do they charge a fee to mail your statement each month, and do they charge a fee to include photocopied checks in your statement?
Are there any penalties for closing an account? Are there penalties for overdrawing an account? And are there penalties for not keeping your account above a minimum level of activity in a given month?
Finally, is the bank FDIC insured?
These are just a few questions you should ask yourself and your banker before committing to any bank. Many times simply asking these questions is enough to know how seriously a bank takes its potential customers. How did your banker respond when you asked them these questions? Did they blow you off, do they seem impatient, or do they seem genuinely concerned with answering your questions?
Just remember, banks are nothing fancy. Shop for them like you would shop for anything else and you’ll be just fine.
Tags: atm fees, banking, checking, interest rates, savings
Posted in Banking | No Comments »
Tuesday, January 19th, 2010
By: Jason Markum
Checking accounts, savings accounts, money market funds, these are the things we usually think of as cash. On the other hand, you have your regular investments. Stocks, mutual funds, gold, real estate, art; these things are certainly valuable but not as easily converted into cash.
The problem is, how do you determine how much of your wealth to keep in cash, and how much to keep in non-cash items?
You never know when you’re going to have an unexpected emergency. Things happen and when they do you need to be able to put your hands on as much cash as you can. But if most of your wealth is in the form of your house for instance, and you suddenly had an emergency where you needed to raise a large amount of cash, you would be in trouble.
So it’s important to always keep cash or cash equivalents on hand, the problem is how to determine how much cash. Keep too little cash and inflation eats away at the value of your wealth. You always have to invest in some long-term assets that will at least keep up or beat inflation.
Everybody is different, everybody has different risk tolerance levels. Some people will be comfortable keeping $1,000 to $5,000 in cash available for emergencies, some people will not feel secure unless they have $50,000 to $100,000 in cash available. It really just depends on you.
A good rule of thumb to use is to figure out what you would need for 3 to 6 months of expenses. For some people keeping six months worth of expenses in cash is not a realistic goal. If that’s the case then I suggest keeping three months worth of expenses in cash. That way if something happened, for instance if you lost your job or your spouse lost their job, you would have enough money set aside in cash to pay all your expenses for three months.
Of course, hopefully you have your other long term investments that you can liquidate within those three months to tide you over when the three months of cash runs out. If your long-term investments are less liquid, that is, if you think it will take longer than three months to turn them into cash, you should plan for this and keep more cash available.
Whatever your risk tolerance ends up being, having a plan in place before hand can be one of the most important parts of any long-term financial plan that you may come up with. So many people don’t have any kind of plan in place at all. Even if your plan is slightly incorrect, any plan; even a poor plan, is better than nothing.
And as they say… when did the man build the ark? Before the rain…
Tags: Wealth
Posted in Investment | No Comments »
Tuesday, January 19th, 2010
By: Jason Markum
Over the years one question that I get asked over and over is this; how do I calculate my personal net worth? It’s true that most Americans have no net worth or negative net worth. Is it any wonder when we don’t even know how to calculate our net worth?
Since the massive recession of late 2008 Americans have become more frugal. We are saving more, and spending less. That is one good thing that has come out of this recession. And as we pare down our credit card debt and put some money aside for a rainy day, Americans are beginning to have net worth’s once again.
Which leads us to the question, how do you calculate your net worth? It is, after all, the basic method of determining if you’re getting ahead in life… well, getting ahead in your financial life at least. First things first, you need to recalculate your net worth often. Quarterly is okay, but I recommend calculating your network every single month. It just helps keep things in your mind, it helps keep you on the path to financial responsibility
if you’re always looking at your financial net worth calculations.
The first thing to calculate is your assets. These are things like cash and non-income producing assets as well as insurance, investments, and retirement assets. Cash is easy to figure, it’s just that amount of cash you have in any checking or savings accounts or in money market funds and CDs. Non-income producing assets are things like the value of your home, or your vacation home, or jewelry, cars, home furnishings, or stuff like that. Insurance is easy to determine as well as your insurance policies have cash values (some don’t). Likewise, investments are fairly easy to calculate especially if you receive monthly statements from your brokerage firm. And finally retirement assets are also fairly easy to calculate using statements from your brokerage firm.
The second thing to calculate his liabilities, what you owe. Liabilities include mortgages, bank loans, credit cards, and any notes due.
Now just add up your assets and you liabilities. Subtract your liabilities from your assets. That is your net worth!
Don’t get discouraged if you have a negative net worth, most people do. Just be sure, once you know your figures, to work on lowering your liabilities as much a possible.
Knowing your personal net worth is something that every responsible adult should do. It is a great tool that helps you know how well you’re doing financially and lets you know when things are getting bad or better.
So go figure out your personal net worth right now, it’s never too late to start being financially responsible.
Tags: net worth, Personal Finance, Wealth
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Tuesday, January 19th, 2010
By: Jason Markum
It is a sad but true fact that almost every bank is overly conservative when they choose who to give bank loans
to. Not only are they ultraconservative but they may be intimidating also. They are intimidating for a specific reason and that reason is that either one; if they refused your loan they hope you will just sort of slink away and not bother them anymore and two; if they do give you a loan you will be too intimidated to even try and negotiate better terms.
This is just the way banking goes, and it has been that way for as long as there have been banks. But it doesn’t have to be this way, and in this article I’m going to explain why…
Preparation, when you go to talk to your loan officer armed with just a few figures and facts that are sketchy, even if you think the important figures are safely tucked away in your brain, you are starting out on the wrong foot. On the other hand, if you go in there armed to the teeth with facts and figures, spreadsheets, and numbers; you clearly know what you want and what you need, you’ll start out in a far more positive point of view in the banker’s mind. Bankers like facts and figures and if you walk in with lots of facts and figures you’re already a cut above the normal customer that they see day in and day out.
If you’re trying to get a personal loan be sure to bring in an updated financial statement. If you’re looking for a business loan bring in a financial statement as well as old tax returns for the last two or three years and profit and loss projections for 2 or 3 years into the future as well as a balance sheet. In addition bring a written plan that shows exactly what you’ll be using the money for to the dollar. And especially pay attention to how you expect to pay the money back and the plan for doing that.
These few things alone will set you higher in the eyes of the banker than what they are normally used to working with.
If your banker turns you down, you can always go somewhere else but many times if you’re just persistent with your current banker you can turn things around and actually get the loan even after being denied. Persistence is very important. Just like college acceptance letters and denial letters; you can appeal. In fact that’s what they call it, “on appeal”.
The first thing to do when you’ve been turned down is to talk to your loan officer and ask them for an in-depth explanation. Be persistent and don’t allow them to fluff you off; get the real reason. Then ask them what it would take to get the loan! Often this is all you have to do. Sometimes, and this is true, you will get turned down for a loan simply because your specific loan officer is too busy to deal with you at the moment. There may be absolutely nothing wrong with your loan request, you may be the perfect loan candidate, but if your loan officer is dealing with too many loans at the moment they may just shuffle you away.
If none of these things work however, you can always speak with a supervisor. Or at least make it clear to your loan officer that you’re willing to talk to the supervisor. Bankers don’t like anybody going over their head, it’s just a phenomenon in banking. So you’re banker may very well go to quite high lengths to keep you from talking to a supervisor. The same phenomenon applies equally to all the way up the chain to the CEO.
Of course, in the end, if you try all the tricks and still can’t get the loan, it may be time to just go try another bank. Just because one bank denied you doesn’t mean they all will, in fact, a different bank won’t even know that you’ve applied for a loan already. So you’ve got nothing to lose, give it a try…
Tags: banking, banks, loans, Wealth
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Tuesday, January 19th, 2010
By: Jason Markum
It’s no secret that I love using blogs to gather competitive intelligence. In any single Internet marketing campaign at any time, I don’t spend a single penny until I have found at least 10 or 15 blogs that relate to whatever it is I’m selling. I read through each and every one of those blogs for at least three or four days usually longer; more like a week. If I have a lot of time before the marketing campaign begins I’ll spend as much as two to three weeks reading blogs within the industry.
You can find out so much about your industry, your niche, your market, your product, and your potential customers, just by reading a few blogs that relate to whatever it is you’re selling. The hardest part is finding those specific blogs that relate to your specific industry. And that’s what I’m going to talk about today in this article.
So the question remains, how can you find specific blogs that relate to your specific industry or product?
Well there are two or three places that I like to go to search for blogs on any given industry. The first is Technorati, which is a sort of search engine for blogs. Go to their website and you can see that it’s very easy to search for blogs. Just type at the top of the page and away you go. Now if I were you I would type in my specific keyword that I’m targeting first of all, or you can type in the industry name you are in, or a generic product name that relates to your product… the point is just get in there and poke around and figured out how things work. I have no idea how many blogs Technorati has indexed but it is many many millions. In July 2006 Technorati announced that they were tracking over 50 million blogs.
Now that’s been 3 1/2 years so you can imagine how many more are in there. Especially in the last couple of years blogging has really exploded, so if it’s out there you can expect to find it at Technorati.
The next two places that I use are probably more obvious. The first one is Google. You can use Google to find everything and anything and I’m sure you already know how to do that, so I won’t spend any more time talking about it.
But there may be a feature of Google that you don’t know about and it’s the third place that I used to find blogs. It’s called Google blog search, which I think is very aptly named. Don’t you just love how Google names things? They don’t mess around fancy names do they? Google blog search, Google talk, Google voice, Google Mail, Google analytics, they generally don’t spend any money on marketing brand names. But I’m getting off the point…
You can find Google blog search by just going to Google and typing in Google blog search. It will be the first thing that comes up I promise you. Get in there and play around with it; search for a few things and you’ll find it is a very useful tool to have when looking for blogs as a competitive research tool.
And that’s it! Those are the three places that I use most of the time to search for blogs on any given industry from a competitive research point of view. I hope you found this helpful, and thanks for reading.
Tags: Internet Marketing
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Tuesday, January 19th, 2010
By: Jason Markum
I get asked this question all the time, its one of the most frequently asked questions I see. I get it especially from new people who have never invested in the stock market before and don’t know much about it.
Before we get any further along, I should mention as a disclaimer that I am not a certified financial planner or stock broker in any way shape or form. I did get a degree in economics back in college, but I am not a working banker either.
So, should you ever invest in individual stocks? The answer is a resounding NO!
The reason is no for several reasons. The first is common sense. You don’t know what you are doing. You don’t know how to properly analyze a company stock, and you don’t have the time needed to continually update that analysis each and every day as new information becomes available. Is someone suing the company? You don’t know. Did their latest product bomb in all the test marketing? You don’t know.
The second is more technical and deals with diversifiable risk. Mathematically speaking we can prove that buying many different companies in many different industries diversifies away one of the two main “risks” involved in investing. I won’t get into those two main areas of “risk” but just trust me when I say that the more companies you buy, the lower the risk becomes mathematically.
You can read up on market risk (beta) and individual company risk in any financial text book, just look up the Capital Asset Pricing Model or CAPM or Beta or market variance and you will get all you want to know including the math behind it if you have a skill in math.
The point is, you can diversify away some risk by buying more stock. Of course, you can’t individually buy many different stocks because it becomes prohibitively expensive in stock broker fees (which is WHY your local stock broker WILL suggest you buy individual stocks!).
What’s the solution? It’s actually quite easy. You buy shares in a stock market index fund like the S&P 500 or others that reflect the entire market as a whole. You can’t buy a share of every company in the stock market in order to diversify the risk away, but a mutual fund can!
What’s more, some mutual funds will let you set up your account to direct deposit a certain amount into your account each month, with which they will buy more shares of the index fund for you often at no additional stock brokerage fee.
Compare that to having to pay your stock broker every time he buys a share of stock for you and you quickly see how much money you can save year in and year out (hundreds of dollars or more!).
Vanguard is a good mutual fund type company that can help you out with this. They are reputable and experienced with helping out new investors who might not know exactly what they’re doing. Just tell them that you want a broad stock market index fund like an S&P 500 index fund that you want to invest a little bit in each month.
They will take it from there! (and no, I have no affiliation with them whatsoever)
Tags: investing, stock market, Wealth
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Wednesday, January 20th, 2010
By: Jason Markum
Everyone should have a safe deposit box these days. People often aren’t sure exactly what to keep in the safe deposit box. In this article I’m going to discuss all the basic things you should keep and give you some pointers and tips that you need to know.
Why keep a safe deposit box? Many reasons! There could be a fire at your house, or you might get robbed. Identity theft is a growth industry and keeping all of your important documents in a safe deposit box can considerably cut down your chances of con artists stealing your important information.
And that’s not to mention valuable physical items as well such as jewelry and coins and things of this nature that you may not want to keep laying around in your house.
Most people don’t realize that safe deposit boxes are so incredibly cheap. Many times that fee can be charged directly to your checking or savings account which makes paying the fee very simple and hassle free.
So what exactly should you keep in your safety deposit box?
First lets talk about important documents… you should always keep stock certificates, mortgage papers, and title papers to real estate and automobiles and boats and campers and things like this in your safety deposit box. You also want keep copies of any contracts or legal agreements that you have signed over the years. Divorce papers or separation agreements and military discharge papers are also good documents to keep in your safe deposit box.
Also I suggest you keep basic documents on members of your family; including birth certificates for yourself and all your children and your spouse, marriage certificates especially if you’ve been in several marriages, and heaven forbid - death certificates should be placed in your safe deposit box as well.
Those are the basic documents you should keep… a lot of people also keep copies of credit cards (both front and back photocopied) and passport photocopies for yourself and all your family members. Another good idea is to keep pictures of all the major asset you own, including your house and your boats and RVs, and things of this nature. Keeping pictures of these things is important if you ever need to make an insurance claim of any kind.
Some people keep copies of tax returns for the prior 3 to 5 years in their boxes as well though I’m not so sure how important this is since your accountant will have copies as well.
Keep a copy of your will and any trust agreements in your safe deposit box but not the originals. These should be on file at your attorney’s office because if you die your attorney will need your will. Safe deposit boxes are often sealed upon death until the IRS can get in there and see what’s what. So if your will is in there it may complicate things considerably since you may not be able to get it out till the IRS gets done (and who knows how long that will take!).
Whatever you end up putting into your safe deposit box, just to make sure that you *have* one. It’s one of the most important things you may ever do.
Tags: Asset Protection, identity theft, sae deposit box, welath
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Wednesday, January 20th, 2010
By: Jason Markum
I’ve got a safe deposit box. I don’t know you, but I’m guessing that YOU have a safe deposit box too! At least, if you’ve got any brains in your head you do! In this day and age, with identity theft such a growth industry, it’s more important than ever to keep all your important documents in a safe deposit box.
And of course, it’s always a good idea to keep other valuables besides important documents, I’m talking about jewelry, rare coins, gold bars, diamonds, etc in a safety deposit box. Or is it?
Just how safe IS your safe deposit box? Sure, it’s in a bank….but banks get robbed all the time. Sometimes robbers go straight to the deposit boxes because they know that’s where the good stuff is. After all, it’s hard to walk out of a bank with huge bags of cash (those things are incredibly heavy!), but if they can walk out with a handful of diamonds that may be worth millions of dollars…well, you get the idea.
And you don’t just have to worry about theft…there’s always a threat of fire, flood, earthquake, alien invasion…well okay, strike that last one. But natural disasters do occur, and banks are not immune to these things.
So what can you do to make sure that your safe deposit box is…well…safe?
The most important thing you can do is to buy insurance for the contents of your box. Some banks offer a minimum level of insurance with the box (ask your banker to be sure) but this will not likely cover all the contents of your box, especially if you have high worth items.
Some people use private safety deposit box companies instead of banks. Generally speaking, these companies usually offer a little more in insurance for new depositors. Check to see with your specific box company what the general levels are.
Some things aren’t cover-able by insurance. Things like stock certificates, for instance, fall into this category. In that case, I suggest you leave your stock certificates on file with your brokerage company as they are well endowed to handle these sorts of things. Your brokerage firm has a legal obligation to safeguard your certificates that is probably more compelling than a banks safe deposit obligations.
One solution (well a SORT of solution) is to keep multiple safe deposit boxes at multiple banks in multiple towns. You don’t want to keep multiple boxes at the same bank, because if a fire hits, all the boxes will get destroyed equally.
And you don’t want to keep multiple boxes at banks that are close to each other, because if a earthquake or flood hits, chances are all the banks in your area could be hit. I suggest keeping two or three boxes in several towns, each within about an hour driving distance.
An hour is far enough away so that a natural disaster of some sort would likely miss each bank, yet not too far away that you can’t get there in an hour or so. Another solution is to open a box in the city where you usually vacation, or one in which you travel to often for business.
Keeping your safe deposit box safe is a tricky matter. However you end up solving this little dilemma, as long as you know this potential problem exists, you are already way ahead of the game. I suggest you use a combination of insurance for the high-worth items and diversification for all the others.
Tags: banking, safe deposit box, Wealth
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Wednesday, January 20th, 2010
By: Jason Markum
Have you ever been turned down for a business loan or a house loan or any kind of loan at all? Have you ever filled out a credit card application that said “pre-approved!” only to receive a letter two weeks later saying that you have been denied credit? Have you ever been turned down for a rent application because of your poor credit?
Have you ever wondered how these people determine what your credit rating is? And have you ever wanted to check your credit report to see why you’ve been turned down for credit or for a loan? If so, you’ve come to the right place. In this article I’m going to talk about your credit report and let you know exactly how to check your own credit history and credit report…
So what exactly is a credit report? Basically it’s a list of all your current outstanding credit as well as any applications for new credit that you have recently submitted. Your credit report can contain lots of different things, not just your credit card bills and things of this nature. Basically anyone that you pay money to can submit a report to the credit agencies. Of course, most companies don’t bother, so we generally see the same sorts of companies doing this.
Besides credit card companies and banks, other companies that may report your credit history include utility companies such as your local water, sewage, or electric company. Cell phone companies quite often make reports to your credit history because most cell phone plans are contracts in which you pay monthly. Telephone companies sometimes report, and cable and satellite dish companies sometimes report as well.
Car companies almost always submit reports to your credit history if you have a loan for a car with them or even if you lease. And your bank or mortgage company will definitely submit credit reports on you either monthly or quarterly. Depending on your landlord, they may report you as well if you rent an apartment. And they will almost always reports you if you miss a payment.
So how do you find out exactly what is in your credit report? The fair credit reporting act guarantees that you can find out the contents of your credit report at any time. If you were denied credit within the past 30 days, which is true for probably most people even if you don’t realize it, then you are entitled to a free credit report.
If you haven’t been denied credit recently but still want to see your credit report, just contact one of the three main credit reporting agencies and they will provide you with a copy of your credit report for a low fee, or sometimes for free. The three main credit reporting agencies are Equifax, TransUnion, and Experian.
The fair credit reporting act gives you the right to dispute any items in your credit file that you do not agree with. Errors occur frequently so be sure to check your credit report every three or four months. Common errors include similar naming errors. For instance, if you have the same name as your mother or father then quite often credit reports can be attributed incorrectly. You want to get these things cleared up as quickly as possible.
Being financially responsible means keeping up-to-date with your current credit history. It’s a good idea to get in the habit of checking your credit report every quarter, or the very least once a year. I suggest you check it every year during tax time if not more often. With the Internet, checking your credit history can be done very quickly and easily, and often for free… so there’s no excuse not to check often..
Tags: credit, credit agencies, credit cards, credit history, credit report, loans, pre-approved
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Wednesday, January 20th, 2010
By: Jason Markum
We are a credit card country. Buying on credit is a way of life for most Americans. We don’t often stop to think what the long-term impact of the purchases will be; after all, it’s just a few extra dollars a month on the credit card statement!
But if there’s one thing that this great recession of 2008 and 2009 has taught us it’s that buying on credit should be kept to a minimum. The problem is, most of us are so used to spending money on credit cards that it’s hard to stop! Most of us don’t even carry money around anymore, we just whip out the credit card!
It’s especially bad if you are over your head in credit card debt. How can you get out from underneath this mountain? Luckily most of the problem has to do with simple money management. Knowing which bills to pay when, and which credit cards to consolidate, can solve a large chunk of the problem.
But even if you’re not in trouble with credit card debt, you may still want to consider cutting back on credit card use. Unless you pay your credit card bill in full each month, in which case you can stop reading this article right now!
So what do you do to get out from underneath this crippling credit card addiction? You may be tempted to simply cut up your cards and throw them away. Unfortunately this is not always possible because like it or not we live in a credit card world.
So what should you do? I have a few suggestions… first of all try to consolidate all of your cards into just two or three main cards. Don’t close the accounts of your other credit cards, just transfer the balances away from each card and onto the card that you designate as one of your two or three main cards. The idea here is to shop around for the lowest interest rate. Keep your other cards open because once you take your balances off those cards, they may contact you via mail to offer you lower interest-rate offers in order to bring your business back.
By playing each credit card off one another, you can get a much lower interest rate… sometimes close to 0% for several months at a time. If the cards don’t contact you, call them! Tell them the rate of interest that your other card is charging and ask them to beat it. They almost always will.
Once you’ve consolidated outstanding credit to 2 or 3 main credit cards you’re only halfway there. The next step is to choose one credit card to use daily for regular purchases. I’m talking about groceries, gas for your car, movie rentals, and basic things of this nature.
The idea here is to pay off this credit card in full each month. So only put things on this card that you are able to pay off each month. Don’t use this card to make large purchases, for instance don’t use it to buy a new TV or a lawn mower or something like that. From now on you must pay cash for large purchases. And if you don’t have enough cash, you don’t buy the thing until you do.
Just putting these 2 Ideas into Place can go a very long way to getting over credit card addiction…
Tags: balance transfers, credit card, credit card addiction, interest rates
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Thursday, January 21st, 2010
By: Jason Markum
Most people have heard the term power of attorney but few people actually know what it means and what it’s all about. A power of attorney is a very simple document that lets you appoint someone else for specific reason. Most of the time the specific reason has to do with making financial decisions, and signing financial documents.
In fact most of the time powers of attorney are used in case you become disabled in some way or if you get sick and need somebody to handle your financial affairs for you.
It is very simple to create a power of attorney. You can find the forms online, or at a stationery store usually, or in any basic legal software that you can buy in any office supply store. Most states allow you to simply write the name of the person that you’re going to designate as your power of attorney onto the form and then sign your name. You usually have to do this in front of a notary public, which you can find in almost every bank. They usually cost between five and $10 to have the notary stamp your document to make it official.
Once you’ve signed a power of attorney, it does not mean that this person has power over your financial affairs forever. You can revoke the power of attorney at any time for any reason, or for no reason at all. You can either grant your agent broad powers dealing with just about anything, or you can grant them very specific and narrow powers limiting them to even a single specific action such as signing one document one time.
The more specific and limiting the power of attorney is, the more complicated the document will be that you create. Notice though that complicated does not necessarily mean difficult. This does not have to be a difficult legal document to create.
Along with specific powers that you grant, you can also specify a timeframe of the power of attorney. You can specify that it takes effect immediately, you can specify that it takes effect during a certain time frame (say August of next year), or you can specify that it takes effect upon a certain action; for instance if you ever get in a car wreck and are incapacitated then the power of attorney would kick in.
One limitation of the power of attorney is that it ends automatically when you die. It also ends if the agent you choose as your power of attorney dies. So if you designate your friend Bob to be your power of attorney if you ever get in a car wreck, and then two weeks later Bob dies… your power of attorney is no longer valid.
The main risk involved with the power of attorney is accountability. You can, in effect, fire the agent you designate as your power of attorney… that is you can dissolve the power of attorney whenever you want. But as long as the document is in force, you have very little control over what the power of attorney does unless you specified exactly what their powers are when you first create the document. This means that you should either 1, pick somebody you trust completely, or 2, be very specific when listing the powers that you grant your power of attorney agent when you first create the document.
Generally speaking, you don’t need to hire an attorney to draft a power of attorney document. However, if you have any questions, or if your power of attorney document becomes too complicated… you should absolutely discuss it with a licensed attorney.
Tags: Legal, power of attorney
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Thursday, January 21st, 2010
By Jason Markum
I don’t know about you but this recession of 2008 to 2009 is really killing me! Unemployment is shooting through the roof and the credit markets have completely frozen and aren’t showing any signs of thawing anytime soon. The government has bailed out the banks, and they have a lot of money to lend out… the problem is, they’re not lending!
This has led to the need for creating alternative ways of borrowing money. In some cases we’ve seen an increase of lending between friends and family members. There’s absolutely nothing wrong with borrowing money from a family member or friend, as long as you do it correctly and avoid these pitfalls that I’m going to discuss in this article today.
There’s nothing wrong with lending money to a friend or family member, but you need to maintain certain formalities in order to make the loan legal in the eyes of the IRS. This means mostly that you have to charge interest. Not only do you have to charge interest, but you have to charge a certain rate of interest, otherwise the IRS will consider the loan a gift and tax you on it.
Back in the old days before 1984 parents could make interest-free loans or below market interest rate loans to their kids, but not anymore.
There are some exceptions, if you make a loan of $10,000 or less to family or friends, generally speaking you can get away with charging low or no interest as long as your family member or friend doesn’t use the loan to invest in something. It’s important to note that the number of loans is not important, what is important is the total amount that you’ve loaned to a single person. So don’t think you can get around the $10,000 limit by loaning the person four loans of $5000 each. The IRS adds all the loans together and sees that you’ve loaned them $20,000 which is above the limit for no interest rate loans.
So what interest rate should you charge them? Generally speaking you have to charge them the current market interest rate, or the IRS interest rate. You can find this rate by running a search on the IRS website at any given time.
Another pitfall to avoid is charging too much interest. Believe it or not, most states have laws against usury, which is charging too much interest. Depending on your state, the interest rate may be as low as 9%. That means that you cannot charge more than 9% in interest, legally speaking. Check with your specific state because every single state varies. This is why, if you’ve ever wondered, most banks and credit card companies are headquartered in Delaware. Delaware has very high usury interest rates, which is how credit card companies get away with charging you 20 or 30% interest.
To find out your state’s usury interest rate limit, run a search at Google. Just type in your state’s name and the words “usury interest rates” and you’ll find a list really quickly.
We may be in a recession, but we still need to pay for things that we don’t always have the money to do it. Loans from friends and family members are sometimes the last option available to us. Just be sure you follow these few tips, and you’ll be just fine.
Tags: family loans, interest rate, IRS interest rates, loans, Personal Loans
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Saturday, January 23rd, 2010
By Jason Markum
With the massive recession of 2008 to 2009 in full swing, credit markets have dried up. Because of this, many of us have had to resort to creative forms of financing, one of which is the classic transaction known as a sale-leaseback. You can create fairly decent amounts of income and estate tax savings if you buy your parents house and then rent it back to them.
These sort of arrangements allow for tax deductions for your parents if they are over 55 years old. If so, tax law will allow them to exclude up to $125,000 in profit from the sale of the house.
There are many advantages of a sale-leaseback arrangement.
The first advantage is that future appreciation from the house isn’t included in your parents estate any longer. This can be a fairly large tax break, right off the bat.
The next advantage is one for the person who buys the house… namely you. By owning your parents house you can shelter some of your own income by deducting the expense of owning the house as will the upkeep and the depreciation on the house.
The next advantage is for your parents; it’s a very straightforward one in that they simply receive cash in exchange for the equity that they’ve built up in their house. Think of it as taking out a home-equity loan that they don’t ever have to pay back.
The next advantage is one that I mentioned earlier, and that is that your parents will get a one-time $125,000 tax exclusion on the gain they receive to sell the house to you.
The next advantage is slightly less tangible but it is the fact that your parents will enjoy the advantages of renting. They won’t have to necessarily take care of the maintenance and upkeep anymore, that will be your responsibility from now on. At the same time, they get to enjoy living in the same house that they are used to.
A sale-leaseback might make especially good sense if your parents are elderly and have trouble supporting themselves. If you are already paying for their support, this may be an attractive way to continue supporting them at a tax advantage.
And it’s a way for your aging parents to save a little face because they won’t be simply taking handouts from you for support, they will be selling you their house which you will eventually be able to sell once they’re gone.
There are several technicalities that need to be upheld in order to create a valid sale-leaseback arrangement. For instance, the house has to be purchased at fair market value, and your parents must sign an actual lease. It must be clear that your parents don’t plan to buy back the property from you in the future, and it also must be clear that your parents no longer maintain control over the house.
Before entering into one of these arrangements be sure to run it by your local accountant or CPA to make sure you’ve crossed all the T.’s and dotted all the i’s.
Tags: Elderly Care, renting, tax breaks, tax deductions
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Saturday, January 23rd, 2010
By Jason Markum
The estate tax recently lapsed in 2010. Congress didn’t renew it because they were too busy worrying about health care reform. That means that if you die in the year 2010, you won’t owe any estate tax. Yes, you read that right you will not own a single penny in estate tax for 2010.
But you can bet Congress isn’t going to be idle, they have the whole rest of the year to pass a new estate tax law. And with the Democratic Party running Congress at the moment, you can expect that they’re going to try everything they can to charge you as much tax on your estate as they can get away with. They’re very open about it; it’s one of their main goals after health care reform.
Now there are many different things you can do to lower your potential tax liability when it comes to estate planning. There are Trusts of a zillion different stripes that you can set up that will tailor to your specific situation. Of course you need an accountant and a lawyer who specializes in estate planning and asset protection to set these things up…
One of the easier ways to plan for your estate in order to minimize taxes is to make sure that you don’t have much by way of physical property that the government can tax when you pass away. No I’m not suggesting that you become poor, just that you plan accordingly.
One way to do this is to sell your house to your children now, and pay them rent each month. This way you get to enjoy living in your house, but you don’t own it. So when you die there’s nothing to tax.
The idea is to pay rent roughly equal to what your children will pay for a mortgage to buy the house from you. For example if your kid buys the house and takes out a loan that he or she has to pay $2,000 a month for, you would pay him $2,000 a month in rent. Where do you get the rent money? From the proceeds of the sale of your house of course. You get the idea…
There are a few things that you have to keep in mind when doing something like this. The IRS will scrutinize these sorts of arrangements very closely so you have to be careful not to get tripped up. Here are a few things to look out for…
Be sure to sell the house for its fair market value. If you sell it too cheaply, the IRS may consider it a gift to your children and apply gift tax.
Next, remember that the mortgage interest that your children pay is deductible to them, however it is taxable to you. That is to say, you can’t really deduct rent payments like you can mortgage payments… and if you’re used to deducting mortgage payments on your tax return, this may take some adjusting and getting used to varying it.
Next, realize that the rent payments that you pay your children each month are taxable income to them. That means that they will have to pay taxes on that rent.
Finally make sure you have documented all of this scrupulously. Make sure you create and sign an actual rental agreement between you and your children, and make sure that you actually pay the rent each month. And be sure to keep records of all the rental payments. The more specific documentation you keep, the more realistic the whole thing looks in the eyes of the IRS.
Tags: Asset Protection, estate planning, rent, trusts
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Saturday, January 23rd, 2010
By Jason Markum
College is just about one of the most important expenses you will ever incur throughout your entire life. Besides buying your home, it could very well be the most expensive thing you ever pay for. And the prices just keep climbing! Even with careful planning and long-term savings. The cost of a college education is becoming unaffordable for a large part of society.
Which means that it is more important than ever to calculate the true cost of a college education and start saving as soon as is humanly possible. In this article, I’m going to talk about the cost of a college education and give you some tips on how to plan accordingly.
The first thing to note is time. It is incredibly important to plan for education savings as early as possible. It’s not ever to soon to start planning. As soon as your children are born you should put a plan in place. If you didn’t start that soon, don’t worry; you can still play catch-up but you need to get started right away.
Next it’s important to be realistic about the cost of college. These days, even state schools could run close to 10 or $12,000 a year! Elite private colleges are nearing $50,000 a year or more as of 2010. Harvard, for instance, cost around $37,000 a year in tuition alone. That doesn’t count room and board, textbooks, and other incidental expenses. When you add up all of those things the price shoots to nearly $60,000 per year!
Let’s create a quick example. Imagine that you have an eight-year-old daughter and you want her to go to a specific school that costs around $12,000 a year today. Basically were looking at around 10 years left for you to start saving.
How much is that $12,000 a year college going to cost by the time your daughter is old enough to attend? Let’s assume inflation is running around 5% a year. For the most part colleges tend to increase their prices at the nominal rate of inflation.
Also to clarify, let’s say that that $12,000 will cover everything including tuition, room and board, books, and all other incidental expenses. Calculating for inflation, you will need just over $80,000 to pay for four years of college at the current growth rate of 5% per year.
Luckily you won’t need $80,000, because you have 10 years to invest during which time your investment can earn interest which compounds on top of more interest, and that’s the name of the game. Assuming that your investments increase at 8% per year, and they increases tax-free… you can expect to invest around $36,000 over the next 10 years in order to meet the $80,000 fee.
Check with the financial aid office of the college that you have your eye on. Quite often they will have investment worksheets that you can print out that will help walk you through the costs involved and show you how much you need to invest before hand at different interest rates, over different time periods, in order to finance your children’s education. And no matter what, the earlier you start the better.
Tags: college savings, education, finance college
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Saturday, January 23rd, 2010
By Jason Markum
College is one of the most difficult things to pay for on the planet. The costs of college have skyrocketed in recent years and show no signs of slowing down anytime soon. Colleges almost always increase their tuition rates every year at a rate higher than normal inflation. Even less expensive state colleges are becoming prohibitively expensive for most Americans.
Apart from buying your house, a college education could very well be the most expensive thing you purchase during your entire lifetime. Finding money for college can be difficult. After you have exhausted scholarships, and government grant options, where can you go to find the money you need for yourself or your children? That’s what I’m going to discuss in this article today…
One program to look into is the parent loans for undergraduate students program or PLUS as it is often referred to. This program allows parents to borrow up to $4000 a year per child from the government generally at lower than market rate interest rates. These loans are usually made based on how well the parent can repay, not on financial need. Usually you have to begin repaying these loans almost immediately, usually within 60 days after the funds have been sent in to the school.
Another way to raise money for college is with an unsubsidized bank loan. A lot of different banks as well as credit unions offer special college loan programs, and often charge interest rates one to 2% below market norms. These programs generally have longer financing schedules than you would normally see in a regular consumer type loan. These loans are made to the parent, not the student as the parent has more of a financial history and credit history from which the bank can rely on.
Another way to raise money for college is to use a bank savings and loan plan. This is similar to a line of credit except it’s based on how much money you have in your savings account. The bank usually multiplies the amount of money you have in your savings account by a certain figure and loans you that amount. Of course, if you have already exhausted your savings account paying for college up to this point… this program may not be very helpful to you.
Another way to raise money is by looking to college-sponsored financing programs. Some colleges, especially private colleges, offer many different creative financing options. In essence, the college will loan you the money themselves and allow you to pay them back over a very long period, sometimes 20 to 30 years. The disadvantage of this is that you may pay more interest over that long loan period. Often the college will sell your loan after you child has graduated to another financial institution such as a bank or loan company of some sort.
The point is, don’t ever give up! Even if you feel like you’ve exhausted all the possibilities, keep looking because there are always new programs springing into existence, and old programs that you may not have explored yet. If nothing else, meet with your college’s financial services office and explained your situation to them. Tell them that you just can’t afford tuition and ask if there’s anything they can do, or if there’s any way you can work together to figure out how to make it work. You’ll be surprised how often this will yield results.
Tags: College, college financing, how to pay for college
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Saturday, January 23rd, 2010
It’s a fact of life that has been true ever since there have been colleges and universities… if you attend a state college or university, and you are not a legal resident of that state, you’re going to have to pay three to four times higher tuition than in-state residents pay.
What’s the reason for this? Well, state colleges receive most if not all of their budget from the actual state themselves. And the state gets that money from the taxes that it charges to its taxpaying residents. So basically the taxpayers of each state pay for, or subsidize if you like to think of it that way, a large part of your college tuition. Therefore if you don’t live in that state, you don’t pay taxes to that state, and you shouldn’t benefit by getting cheaper college tuition… at least that’s how the thinking goes.
But we don’t really care about all of that, do we? Nope. We just want to get that cheaper College tuition! You’ve come to the right place, because that’s exactly what I’m going to show you how to do in this article today.
The Supreme Court of the United States of America has ruled that state colleges can in fact charge nonresidents a higher rate of tuition but, those same students must be allowed the opportunity to change their residency to the state for which they are attending college in. After all, you’re going to be living there for four years so you should very well be allowed to become a resident!
Though it is possible to change your residency, the process is highly regulated and can be difficult, and it’s becoming more and more difficult as time goes on. Some states for instance, make you prove that you’re financially independent before they allow you to become a resident. How many college students are financially independent? Not many.
So basically, the requirements for residency change from state to state but most of them are similar. Usually you have to live in the state for a year, but sometimes only for six months. In almost all instances, the burden of proof rests squarely on the shoulders of the student, because most states figure that you are just there to get your education and leave again.
Here are some basic things that you will have to deal with, or questions you will have to ask when you go through this process. First, have you ever filed an income tax return in your new state? Are you financially independent, or do you rely on your parents for money? Do you have a drivers license registered in your new state? Have you held a job in your new state?
If you can answer yes to most of these questions, then you are well on your way to changing your residency status and therefore receiving college tuition from a state school at considerably lower costs…
Tags: College tuition, out of state tuition, state residency
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Saturday, January 23rd, 2010
By Jason Markum
Paying for college is just about the hardest thing most of us will ever do. The cost of tuition just keeps climbing year and year out, usually faster than the normal rate of inflation! The best way to finance college is to get it paid for with a scholarship. Luckily scholarships are becoming more and more common, and more and more available for students; even students with less than stellar track records in the grades apartment.
But there is one or two major traps when it comes to winning a scholarship… these traps come from the Internal Revenue Service! Most people don’t realize that scholarships can be taxable. Now it’s true, the most scholarships are tax free, but they are only tax-free if they are used only for tuition, as well as books, course materials, supplies, and things like this that are directly related to your education needs.
If you use part of your scholarship to pay for your room and board, then that amount becomes taxable and you have fallen into the tax trap! Personal expenses also fall under the tax trap. Basically any item that you use your scholarship money to pay for that isn’t directly related to your college expenses becomes taxable.
It is incredibly important to keep records of all the things you spend your money on that came from scholarship money. Keep a list of tuition, university fees, books, and all the school supplies that you buy because it’s up to you to prove how much of the scholarship went to educated related purposes and how much of it went to other related purposes.
It may seem silly to have to keep records of a pizza that you ordered on a random Thursday; but if you use scholarship money to pay for it then you really do have to keep track precisely.
Another common trap that most people don’t even think about has to do with employment. If part of your scholarship or financial aid package depends on you working on campus, say in the library or in the cafeteria, then the IRS may consider part of your scholarship as taxable income and not a scholarship. So if you have a $20,000 scholarship, and $5000 of that scholarship comes from a work study program of some sort; then that $5000 may be taxable income.
Again, the rule of the day is to keep scrupulous records. Your financial aid package should spell out how much of your aid is derived from work study programs, and how much of it is derived from general grants and things of this nature. But be sure to keep track on your own as well. Keep any pay stubs that you may receive, and any other records that you can use to show exactly how much money you received from work study and how much you received from other sources.
Paying for College is one of the most difficult things most of us will ever do. Scholarships definitely help, just make sure you keep track of how you spend each scholarship dollar that you receive, and you should end up just fine. It’s a good idea to run your financial aid package passed your local accountant or CPA. Simply ask them if you owe any taxes and have them look through your financial aid package. It shouldn’t cost you very much to talk to a CPA for a few minutes, and the peace of mind will be well worth it.
Tags: scholarship, scholarship tax, tax trap
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Saturday, January 23rd, 2010
By: Freddy Smith
Paying for college is just about the hardest thing most people ever have to do. It’s certainly one of the most expensive things you’ll ever have to pay for. The only thing that I can think of that is remotely comparable, is buying your own home. But besides that, there’s nothing else that compares to the huge cost of financing a college education.
Sure, there are Pell grants, and there are the Pekin loan as well as the Stafford loan. These government financing options are wonderful, and many many students qualify for them, but they don’t generally cover the whole cost of a college education. In some cases, depending on the school you attend and whether it is a public state college or a private college, these government options barely scratch the surface.
So what’s a new student to do? Where can you find money to pay for college? Loans are good, if you can come by them. The problem with loans is you have to pay them back! The best option is a scholarship because you don’t have to pay them back.
Most people think that you have to be incredibly smart to get a scholarship. They think that you have to get great grades in high school in order to qualify for any sort of substantial scholarship. Nothing could be further from the truth… there are many scholarships available to students that have absolutely nothing to do with grade point average or academic qualifications of any kind!
All it takes is some person with money who has decided to set up a scholarship. They don’t have to have any reason at all, that’s to say, they can make up their own reason for giving money and dictate the qualifications that they require.
Here are just a few examples to pique your curiosity. Run a search at any major search engine for alternative scholarship opportunities and I’m sure you’ll find a huge list to research. Most people have never heard of many of these scholarships, therefore, competition is not all that difficult in some circumstances. But enough talk, onto the list…
There are scholarships for students interested in the study of fungus, students interested in the study of Cave research, funeral direction, horticulture, and even wine making. There are scholarships available for the children of glassblowers. There are even scholarships available for Rhode Island students who wish to study the Italian language!
Are you a female student who wants to learn how to fly a helicopter? There are scholarships available for you. Are you a Texas student who wants to study in Germany? There are scholarships for you too. Have you ever been a golf caddy who worked in New Jersey? Yup, there’s scholarships for you to.
There are even scholarships available to Indiana high school seniors who are dedicated to the thoughts and ideals of President Dwight Eisenhower, if you can believe it.
And perhaps my personal favorite are scholarships for students who are interested in dog breeding and dog showing.
This is just a very partial list, but hopefully it gives you an idea of some of the wacky things people will grant scholarships for. Chances are, if you’re interested in it, there is a scholarship for it and all you have to do is track them down and apply. Good luck!
Tags: college financing, how to pay for college, scholarships
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Saturday, January 23rd, 2010
By Kelly Spree
Getting a good college education is one of the most important things that many of us will ever do. It single-handedly affects so many different aspects of our lives; from the friends we make, to the kinds of jobs we get and more, a good college education is a major stepping stone towards a meaningful and lasting life.
The problem is, college is becoming prohibitively expensive for most Americans. Who would’ve ever thought that here in America as many as 60 to 70% of families would not be able to afford to send their children to college? Colleges are one of the few things in this country that tend to increase their fees higher than the nominal rate of interest each year. For instance if inflation is around three or 4%, you can expect colleges to raise their rates between seven and 9% on average. Of course not every college is like this, but more and more are starting to become this norm instead of the exception.
And with the recession of 2008 to 2009 and beyond crippling the ability of many families to afford basic health care, let alone college… financing an education is becoming more and more difficult as time goes on.
So what can you do as a parent to make sure your child has every opportunity possible when it comes to college education? That’s what I’m going to talk about in this article today. There are a number of things you can do to make sure your kid has enough money for college.
The first thing to do is start saving early. Compound interest is a magical and wonderful thing that will allow just a little bit of money to grow and grow over time allowing you to finance most of if not all of your child’s educational costs. When it comes to compound interest, the most important thing is to start early. The best case scenario is to start saving as soon as your child is born. It doesn’t have to be much, whatever you can afford at the time is better than nothing. Over the next 20 years the interest on top of interest on top of interest will transform whatever you can save into a much larger sum area.
And if you set up a college savings account sponsored by your state, the money that you invest will likely grow absolutely tax-free, which is a huge huge benefit and goes a long way to finance your child’s education.
The next most important thing is to keep your investments as liquid as possible within the last few years before your child begins college. What do I mean? Well let me tell you a story… I once knew a family who invested in rental houses. They bought their first one when their child was born for a few thousand dollars down payment on a 20 year mortgage. Then they rented it out and the rental income went to pay the mortgage that they borrowed when they bought the house. As years went by, instead of investing in the stock market or savings bonds, they bought additional houses. Every few years they’d save up enough money for another down payment on a new house and away they went.
They figured that with a 20 year loan on each house, those loans would be paid off right around the time when their children would go to college leaving them with houses that they owned free and clear. At that time they would sell the houses and use them to pay for their children’s college education.
This was a great idea as far as ideas go… but they didn’t sell the houses soon enough. When it was time for their kid to go to college, there was a major housing market downturn and they were not able to sell the houses right away.
That’s what I mean by keep your investments liquid within three years or so of your child beginning college. If my friends had started to sell the houses when their children were 15 years old instead of waiting until they are 18 years old, they would’ve had no problem selling them.
These are just two tips that you can use to help finance your childrens college education.
Tags: college savings, finance college
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Saturday, January 23rd, 2010
By: Felix Brown
I love Internet marketing. I mean I really love it! It’s the only industry I know that you can start for little or no money and almost instantly earn a solid income. It’s the only industry I know were such little effort can result in such great rewards. Yes, I love Internet marketing…
People are always asking me how to make money online, and they’re surprised at how simple my answers usually are. It doesn’t take a lot of money to get started, and it doesn’t take a lot of effort really if you just know a few simple things.
Of course, results may vary and there is no guarantee that you’ll make money, but if you follow my simple strategy that I’m about to map out for you below, you should have a pretty good chance of making some cash.
The first thing to do before you do anything else is to research different markets. You can’t make money until you find out what people are willing to buy. Most people do the exact opposite, they create a product, develop it, release it, and spend lots of money marketing it only to then find out that nobody is interested in buying it! That’s why so many new businesses fail; they put the cart before the horse. So research is the cornerstone of any Internet marketing effort.
So how do you research? Well that is the million dollar question isn’t it? Everybody researches differently, and there is no hard set in stone way to do it. But here’s what I like to do. First I will head over to Amazon and just browse around the different categories until I find a product that strikes my fancy. Then I’ll read the reviews posted on Amazon by people that have bought the product. If a lot of people have left a lot of positive reviews, then I’m well on my way. On the other hand if people generally leave bad reviews, or if there aren’t very many reviews at all… I’ve got a good idea to stay away from that product.
Another place similar to Amazon is eBay. You can search around through the categories at eBay and see what is selling, and see what’s hot. Checking eBay over the course of a week or two can give you an idea of what’s selling, how fast they sold, how vigorous the bidding was, and other market indicators that are very valuable to know.
There are a many other places to research but you get the idea.
Starting out I suggest most people sell affiliate products and not try to create your own product until you have much more experience. For instance, Amazon.com has an affiliate program where you can market their products and get a cut of the sale. This is a great way to crack into Internet marketing if you don’t have a lot of experience or have a very large budget.
Tags: Affiliate Marketing, Amazon, eBay, Internet Marketing
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Sunday, January 24th, 2010
By Jason Markum
We all look forward to retirement. After all, you’ve worked your tail end off for all of your adult life, it’s time to kick back and take it easy for a while… you deserve it!
But before you retire make sure that you’ve done the math correctly in order to determine if you are actually able to retire right now. Many people do the math wrong and only realize after the fact that they don’t have enough money to live off of for a prolonged period of time. Usually by then, it’s too late to do anything about it. Don’t get caught in that same trap.
That’s what I’m going to talk about in this article today. I’ll discuss some of the things you should calculate before you retire to make sure that you have enough money set aside to support yourself throughout the rest of your days.
First of all list all of your assets… these will include real estate, any insurance policies you have, company profit sharing plans, non-income producing assets like paid-up life-insurance and furniture and things like that around your house, as well as assets they require ongoing costs for maintenance such as houses and cars and things like that. Basically we’re talking about all of your income producing assets as well as non-income producing assets.
Sometimes you won’t be able to get an exact dollar amount for many of these things, so it’s okay to estimate a dollar value. I suggest estimating the potential low-end and the potential high and. For instance if your house might sell for $200,000 or maybe $260,000, make a note of both prices. Then create a list of all your assets with the estimated low-end, and create another list of all of your assets with estimated high-end of their value.
Next calculate your after retirement income. In this list we usually include any income from assets such as rental property and dividend paying stocks and interest paying bonds; things of this nature. It will also include any pensions that you might have, as well as your Social Security payments.
These two areas will give you a fairly good idea of how much money you have during retirement, now we need to calculate your expenses… and that is the next step.
Expenses are fairly easy to calculate because you already know what your expenses are. But there are a couple of traps that most retirees don’t factor in. One is health insurance. Up until now it’s likely that your employer has paid for your health insurance, but that won’t be the case any longer. And health insurance is always more expensive the older that you get so be sure to factor this into your postretirement expense calculations.
Also, be sure to calculate for inflation; your costs will increase with at least the same rate as inflation every year most retirees fail to calculate for inflation and fall into a massive trap.
If your expenses are more than your retirement income, then it’s time to sell some of your assets or put off retirement for a while…
Tags: Retirement Planning
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Sunday, January 24th, 2010
By: Jason Markum
Planning for retirement can be tricky in the best of times. There are so many different options that it can become confusing very quickly if you’re not careful. Unless you’ve got an advanced degree in finance or investing, you can quickly get turned around.
In this article I’m going to discuss why 401(k) plans are better than IRAs. If the company you work for has a 401(k) plan and then you should jump all over it! Sometimes participating in your company’s 401(k) plan makes you automatically ineligible to make deductible IRA contributions. That’s okay! You should still go for the 401(k) plan because they are much much better than traditional IRA, and I’ll tell you why…
For one thing, you can put more money into a 401(k) plan, usually much much more. This alone should be enough to convince you to use them more than anything else.
Another reason why I like them so much is that many companies will make a matching contribution to your 401(k) plan. Sometimes they will match as much as one dollar for every two dollars you put in. That’s huge! Think of it… right off the bat, your investment has gone up 50% immediately. Show me any other sort of investment in the world that’s guaranteed to increase by 50% the day you make it!
Another great reason to have a 401(k) plan is that they are very often managed by professionals whereas an IRA may not be, and you may have to handle it yourself. Depending on your level of experience with the stock market and financial matters, and tax issues, this may or may not be a big deal to you… but most people I’m sure would rather have a professional managing their retirement account who is experienced and can be held accountable.
Another great reason to have one is that they are very often handled via payroll deduction which makes the entire process incredibly easy on you, with nothing more for you to do after you initially set the plan up.
Yet another good reason to use a 401(k) is that very often if your plan allows you to, you can borrow money from it! Any money you take out of an IRA, on the other hand, is usually considered a withdrawal by the IRS and therefore subject to tax.
Finally, another great reason to use a 401(k) plan that many people don’t know about is that you can withdraw money from it for major medical expenses and a portion of that withdrawal won’t be subject to the regular 10% penalty that is generally charged on withdrawals before the age of 60. This is a really huge benefit that many people overlook, or simply have never heard about but in my mind it considerably tips the scales in your favor over a traditional IRA which does not allow the same sort of thing.
So there you have it; several reasons why you should always go with a 401(k) plan over an IRA.
Tags: 401(k), IRA, Retirement Planning, retirement planning
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Monday, January 25th, 2010
By Jason Markum
Internet marketing is great… I don’t know anyone who doesn’t want to make a lot of money off the Internet just by sitting behind your computer monitor and tapping a few keys now and then. The first morning I woke up to check my e-mail and found several orders for a hundred dollars each, well… I can’t even describe how that felt!
How do you crack into Internet marketing, especially if you don’t have a lot of money to invest? That’s the problem that most people run up against and it’s exactly what I’m going to talk about in this article today.
You don’t have to have a lot of money to get started in Internet marketing. Instead, you can invest your time with just about as good a result. Then as time goes on you can reinvest the money that you make into more cost-effective and time insensitive things like advertising where you can get faster results with less effort.
But before that happens you have to spend some time working the basics of Internet marketing. And when you don’t have a lot of money to spend, this usually means search engine optimization. With the right SEO work, you can get your website ranked high at the search engines and drive lots of free targeted traffic your way and earn a decent amount of money.
The trade-off is that SEO work takes a lot of time and effort and doesn’t always work the way you think it will. The first thing to do before you do any SEO work is to research niches. Use the free Google keyword tool to compile a list of 10 to 50 longtail keywords; those are keywords made up of several different words like “blue fancy widget holder” as as opposed to the regular keyword “blue widget”. Make sure they relate to the product or service you are selling.
The point of longtail keywords is that they don’t get searched for as often as regular keywords. This means that there isn’t as much competition to get listed under them at the search engines, which means that your website can get ranked fairly high, fairly quickly, under those longtail keywords with much less effort and much greater chance of success.
A longtail keywords may only get searched for 800 to 2,000 times per month, which isn’t enough to build an Internet marketing empire around… the trick is to string 10 to 50 of these keywords together and create a webpage for each of those keywords on your website. If each keyword averages 1000 searches per month, and you get ranked under 50 of them, and you get even 20% of that website traffic… that would be 10,000 visitors to your website per month which isn’t too shabby for somebody just starting out.
So that is my secret to get started in Internet marketing, go after longtail keywords to build up site traffic in order to create your initial sales; then reinvest the money that you make into more stable marketing methods such as advertising.
Tags: Internet Marketing, search engine optimization, SEO
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Monday, January 25th, 2010
By Jason Markum
I love search engine optimization and search engine marketing. Where else can you get tons and tons and tons of very highly targeted website visitors to your site for free month after month? Nowhere that’s where!
The problem with search engine optimization, or SEO as it’s called, is that it’s really hard to do. It’s not hard because the act of SEO work is inherently hard, it’s hard because there is so much contradictory information floating around the Internet that ordinary people don’t know who to listen to, what to focus on, or even what things will get them into trouble with the search engines.
And that’s what I wanted to write this article for you today.
First of all the main division in search engine optimization work is whether or not to focus on on-page factors or off page factors. That’s mainly what I want to talk about today.
On page factors include things like creating optimized title tags, and meta-description tags, and keyword density, and keyword research. And these things are important to be sure, but they are nowhere near as important as off page factors. Keyword research is the most important on page factor without a doubt. Because picking which keyword to focus on can make or break any SEO effort. Pick the wrong keywords, and you won’t get listed at all at any of the major search engines. So in that respect, on page factors can be important… but even if you do all the on page factors correctly, if you don’t handle the off page factors you get nowhere fast.
So what exactly are off page factors? Well in my mind, there’s only one main off page factor that you have to worry about… and that is linking. Search engines rank websites almost exclusively based on how many other pages link to them. And not just the number of pages that link to you, but the quality of those pages are major factors in the minds of the search engines.
Here’s an example… imagine your friend Josh has a website, it’s not very popular website, hardly anybody ever visits it. Now let’s pretend that Josh links to your website. Hey, that’s great! But now let’s imagine that CNN.com links to your website too. We do you think Google thinks when it looks at all of this? Do you think they would put more weight on the link from your friend Josh’s website, or do you think they would put more weight towards the link from CNN.com?
If you guessed CNN, then you are right. If CNN links to your website then your website must be pretty darn important, and Google understands that. On the other hand if your friend Josh links to your website, Google realizes that that doesn’t mean a whole lot of anything. The moral of the story is you need to focus on getting as many links as possible, but more importantly as many high quality links as possible.
And you know basically what high-quality links are. Any website with the Google page rank of four or better yet five or higher, is a high-quality website. There are many different methods to check and see what a website’s page rank is so I won’t go into it in this article.
The point is spend most of your SEO time focusing on getting other high-quality websites to link to you. I could write an entire book on how to do that, so obviously I won’t go into it in much more detail in this article. You can do some research on your own and get a pretty good idea of what is necessary in this regard.
Tags: Internet Marketing, off-page factors, on-page factors, search engine optimization, SEO
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Monday, January 25th, 2010
By Jason Markum
Around the middle of 2008 the financial markets started to wobble. There wasn’t anything wrong per se, but there was a sense of something jittery in the air. People started to whisper amongst themselves, and everyone started to get nervous.
Summer gave way to Autumn and suddenly the housing market in the US collapsed and then the financial sector melted down. Banks started to go bankrupt, investment companies such as Lehman and Merrill folded overnight.
And the stock market plummeted.
2008 ended just about as bad as any year ever did excepting the years of the Great Depression, and 2009 didn’t look to be much better. In fact it wasn’t much better till about half way through it. Then miraculously, almost overnight, the stock market started to rebound.
Where the year before saw the stock market drop 40, 50, 60% or more; suddenly the stock market was rebounding 40, 50, and even 60% or more. It wasn’t a straight shot up, there were flows; ups and downs, but generally the 2009 stock market ended massively higher than anybody expected.
Now 2010 has begun and we’re in the middle to end of January at the time of writing this article. People are beginning to ask the question… is it time to invest in the stock market again?
It’s a very tricky question, and one that is potentially very dangerous. Yes the stock market has gone up massively since the lows of 2008 and beginning of 2009. But that doesn’t necessarily mean that it’s time to invest in the stock market again for us ordinary people.
It seems like whenever the stock market goes up, it soon drops down just as quickly again. The stock market is littered with a history of highs and lows, peaks and troughs, zigs and zags that would make any roller coaster designer envious!
I know it’s hard to stay away from the stock market when it’s shooting up so quickly but I advise caution at the moment. Why is that? Well I’ve got a very specific reason…
When the economy tanked towards the end of 2008 and early 2009 the government acted swiftly by pumping billions, even trillions of dollars into the financial system in various ways. That money took a few months to filter through the system as it always does, which leads us to the middle of 2009 and a quickly increasing stock market.
2009 is over, and the government has stopped - at least to a large degree - pumping money into the system, which could mean the stock market will stop rising. In fact, without government intervention the stock market may not be able to hold onto the gains it received last year.
If that is the case, then we can expect a sharp decrease in the value of the stock market throughout 2010 until the recession is well past us… which does not look to be the case at the moment. For that reason I suggest, at least for the time being, that you keep your money out of the stock market.
Tags: Great Depression, investing, Recession, Stock Marketing
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Monday, January 25th, 2010
By Jason Markum
Everybody knows that I love Internet marketing… but I’ll admit I tend to focus most of my time on the search engine optimization and search engine marketing aspect of Internet marketing. When I’m not focused on that, I tend to spend my time on advertising and affiliate marketing.
And I often overlook one of the most powerful forces in Internet marketing… and that is joint venture marketing.
First of all what is joint venture marketing? Quite simply, it is when you find somebody else that has a slightly similar background, or product line, or is in the same general industry yet is not a direct competitor of yours. You approach this person and offer to form a sort of partnership. I’m not talking about a legal partnership or corporation or anything like that, I’m talking about a partnership in a more general manner.
Imagine you have an e-mail marketing list of several thousand people, and now imagine the person you have identified as a potential joint venture-ee also has a marketing list of several thousand people. If you’re in the same general industry, then the people that subscribe to your list are probably interested in what your partner has to offer and vice versa.
There are several potential possibilities for such a match. For instance you might send out a note to all your subscribers telling them about your partners newsletter and suggesting that they subscribe for free. At the same time, your partner may do the same thing to his list. In this way, you both gain a massive and immediate inflow of new subscribers and therefore you both benefit.
You may take it a step further; instead of just recommending each other’s newsletter, you may go so far as to recommend each other’s products. In this scenario, you would create an affiliate URL and point your subscribers towards it. That way any sales they make from that website will be tracked and then you get a cut, a percentage of all the profits.
And of course, your partner would do the same thing with his list and your products.
There are infinite possibilities. For instance one popular method of joint venture is the tele-seminar. In this scenario you and your partner agree to do a telephone interview about your specific industry or product line or whatever. Then you either allow each of your lists subscribers to phone in and listen to the interview using a bridge line or conference call service, or you simply record the interview without an audience and then make the recordings available for download.
The idea is to create killer free content and towards the end of the call up-sell and convert the free listeners to paid customers. Basically just plug one your products towards the end of the call.
No matter what method you use for joint ventures, be it e-mail list swaps, product plugging, tele-seminars, or anything else… the point is that by finding somebody else in your industry with a similar product line and teaming up together, you can both benefit massively, immediately, and for the long-term.
Tags: Internet Marketing, Joint Venture, tele-seminar, Up-Sell
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Wednesday, January 27th, 2010
By Jason Markum
Owning insurance is one of the most important things you’ll ever do for yourself and your family. The problem is, there are so many different kinds of insurance for so many different things. There’s health insurance to cover medical problems, there’s car insurance, there is life-insurance, there’s home insurance in case your house burns down… the list goes on and on and on.
In America we live in a society based on risk. That’s what freedom means… risk. The government leaves us alone to make our own choices, for the most part, and that is what our capitalist system is built on.
The problem is, when people make their own decisions they very often make the wrong ones. This can have catastrophic effects on every aspect of our lives. The way our system has evolved to cope with these problems is through insurance.
It’s a happy middle ground… the government leaves us alone to make her own choices, which means they leave us alone to make stupid choices, but then we can mediate some of the stupider choices by buying insurance to cover us in case something goes wrong. Everybody is happy… freedom is maintained, but our stupidity that’s inherent in every human person, doesn’t run wild.
So to say “I’m not going to buy insurance” is probably not the best mindset to have, you can be sure! The government actually mandates that you legally are required to own certain types of insurance such as car insurance. If you borrow money to buy a home, the bank will require that you have homeowners insurance to cover their loss in case the house burns down. And I don’t think anybody needs to be convinced of the importance of health insurance.
All of this leads up to the main problem… which is, how to pick the best insurance company. With so many insurance options you have got to pick the right insurance company who will honestly work with you to give you just the coverage that you need and nothing more. If you let certain insurance agents walk all over you, they’ll sell you everything under the sun. Before you know it you’ll be insuring your dog against the flu!
The first rule of thumb is to pick a major insurance company that has the financial resources available to backstop their insurance claims. Many people purchased insurance from AIG over the last few years thinking that their claims would be paid. But when the financial crisis of 2008 hit and AIG for all intents and purposes went under; those insurance policies were no longer guaranteed. Luckily the government stepped in, but you can’t always be sure that will happen.
Next pick an agent that you are comfortable with, make sure they understand your financial situation and your insurance needs and make sure that they know that you will not tolerate being hard sold additional insurance that you don’t need.
Finally ask around… ask the people around you who they turn to for insurance help. In no time at all you’ll probably find a consensus on who the best people in your area are. Many times personal references go a long way in the insurance industry.
Tags: car insurance, health insurance, homeowners insurance, Insurance, life insurance
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Wednesday, January 27th, 2010
By Jason Markum
Insurance is just a fact of life in American society (and probably most other places too). Some studies show that Americans spend almost 15% of their disposable income on insurance alone. Sometimes they are certain insurances you just can’t get out of buying, for instance you are required by law to carry it; such as car insurance.
But there is some insurance that you just shouldn’t buy no matter what, and that’s what I am going to talk about in this article today.
Sure, we all need insurance. If you’ve got a house mortgage, you need homeowners insurance. If you own a car, you need auto insurance. If you have a family that depends on your income, then you need life insurance to look after them if anything catastrophic happens to you like death. And everybody should have health insurance of some kind.
But there are many kinds of insurances being marketed today that you just don’t need, and many times these specific insurances are the ones that really get pushed on people because they don’t really know enough about it to make an informed decision; and salesmen can be pushy.
One type of insurance that you should not usually buy is automobile medical insurance. If you have regular health insurance, it will usually cover any health expenses that arise out of automobile accidents so you don’t need additional special medical car insurance in most cases.
Another type of insurance that you don’t need is mortgage insurance. I’m not talking about homeowners insurance, you need that… I’m talking about mortgage insurance; that is insurance to protect your family against the consequences of not being able to pay the mortgage should you die. Your regular life insurance should cover this adequately on its own, which is the main reason why you have life-insurance to begin with.
Air travel insurance is another type of insurance that you really shouldn’t purchase. Yes, it’s usually very cheap sometimes as little as $10 per flight. But again, if you die in an airplane crash your regular life insurance should cover your family’s immediate needs.
Cancer insurance is another insurance that you may not need. Again, your regular health insurance should cover this and you don’t need any kind of special addition in most cases..
Vacation rain insurance is another type of insurance that you probably don’t need. Insurance companies make these policies based on incredibly accurate meteorological data, and they’re not in the business of throwing their money away which means that they’re not going to insure you unless they’ve got a pretty good idea that it’s not going to rain; which means you probably won’t collect. But again, these aren’t very expensive policies so suit yourself.
These are just a few of the types of insurance policies that you should not waste your money on. Of course, as a disclaimer, everybody is different, and everybody’s circumstances are different so don’t take my advice, make up your own mind.
Tags: Insurance
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Wednesday, January 27th, 2010
By Jason Markum
Imagine you’ve been responsible all your life. You bought life insurance like you were supposed to and you paid your premiums every single quarter or year so that when you died, your family would be protected and have the money that they needed to go on living the same lifestyle they had grown accustomed to while you are alive to provide for them.
But how do they know that? Sure, you may have mentioned the life insurance policy once years ago… but people forget, and paperwork gets lost, and people tend to be a little more sloppy than they should when it comes to wills, and life insurance policies, and things of this nature.
The fact of the matter is that your beneficiaries may not know that they are entitled to collect your life insurance policy! And many times the life insurance company is not going to go out of their way to tell them!
So what do you do if you think you may be the beneficiary of a life insurance policy? Well the first thing you’re gonna want to do is search in the obvious places. Look through boxes of old tax records. And look through boxes of old financial records. And also if you have a file or box with insurance papers, obviously start looking there first!
Next extend your search out of the home. The best place to start is your family safe deposit box if you have one. If not I suggest talking with your family lawyer if you have one. Maybe they know something about the life insurance policy. If your family has an insurance agent locally that you worked with for years, contact them.
Several tricky places to look are old mortgage applications that you may have because sometimes these things require that you list any life insurance policies that you may have. Also check with the funeral home that your spouse used. Sometimes they have information on life-insurance because they need it to pay the funeral bills.
You might also check through old bank statements as far back as possible for any checks that were written to an insurance company. Many people keep old bank statements on file and in storage, but if you don’t… check with the bank itself. Many times banks will allow you to order old bank statements for a nominal fee, anywhere from $1-$5 per statement. Keep in mind you may have to go back 20 or 30 years or more, making this a very tedious approach but one that often yields results.
If all else fails and you have failed to discover a life insurance policy then contact the American Council of life insurance located in Washington DC. This is a trade group that will forward your inquiry to over 100 life insurance member companies.
Tags: death benefits, Insurance, life insurance
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