Invest Now for Dividends Later |
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No matter what age you are or even your level of employment or economic position, it may be a good idea to start preparing now, even in a meager way, for eventual financial security. Some people feel they need every dollar they make to get by from one paycheck to the next. While this may be true for some, there are others who squander significant sums on insignificant things. They could be socking that money away into an investment account that, over time, could lead to huge savings and a comfortable retirement.
It isn’t hard to get started. All you need is $100 to $500 to open an account, and anywhere from $25 to $50 monthly to continue building your stock or mutual fund portfolio. In fact, a young person aged 20 could deposit $2,000 and then not another dime. In forty years he or she might have tens of thousands of dollars. The stock market has followed fairly predictable patterns since its inception in the 1800s in New York City. Although historic events like the Great Depression and several global wars have impacted its activity, the gains and losses remain fairly consistent, with most investors earning a predictable return on their investment.
Of course, no one can predict what the future holds, or whether the pattern will continue. And none of us should invest more money than we can afford to lose—just in case the world economy crashes one of these days. But with steady deposits that continue to compound and earn interest over time, a sensible and prudent investor can substantially increase the amount of money going for retirement or a dream vacation at some future point.
If you are thinking about opening an investment account, do a little online browsing for more information. Visit sites like E-trade or Scott’s Trades to see how the process works. Start reading your newspaper’s financial pages for details about the latest stock prices and market trends. Do a little paper trading by following the daily stock news. Instead of actually purchasing stock, however, work it out on a piece of paper by pretending to buy a certain amount of stock for the specified price and then watching to see how it performs over the following week. Chart your gains or losses to figure out whether your stock deal was successful. If you do this for several months, you will soon learn to understand more about the stock market and how to buy and sell like the pros.
Even if your budget is tight, try to set aside a little money to open an investment account from any windfalls that come your way from job bonuses, inheritances, or cash gifts. Some people set aside their annual job raise, or part of it, as part of their investment strategy. Then, as your budget becomes looser with paid-off bills or grown-up kids, you may be able to start having a standard monthly amount deducted automatically from your paycheck and deposited into your investment account. This could take the form of a Roth IRA (individual retirement account), a money market fund, a mutual fund portfolio, or individual stock shares.
It probably is a good idea to take an investment class at the community college or sign up for a financial planning seminar. Success may be just a few years away if you start now and plan right.
About the author:
You can find more great investment information at http://www.investmentcentral.com
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Are You Wealthy Yet?
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Here's a real simple way to become wealthy.
Marty and his wife live at home with their 2 children. They own
a 3 bedroom house in a middle class neighborhood and try to live
within their means. Marty works full time in the Printing
Industry, while his wife is in charge of the home and looking
after the children.
They've accumulated some credit card debt and have 2 years left
on a car loan. They try to stay out of debt as much as possible
and together they've managed to contribute a total of $32,000 to
their own Retirement Fund. It is kept in term deposits receiving
5% interest annually.
Two years prior, the couple bought an older house that they
fixed-up and rent out for $850 a month. After paying the
mortgage and taxes $300 is left over each month. This goes into
their savings account each month.
At Christmas, the family bought themselves a new computer and
decided to start a home-based business. Things started out
fairly slowly but after 8 months they were receiving a steady
check of $400 a month which also goes into their savings
account. This part-time business will continue to grow with the
effort they dedicate to it.
This business also offers them some very lucrative tax savings.
By taking advantage of these Tax Strategies they are able to
save an additional $300 a month on tax that was normally
deducted from Marty's paycheck at work. This monthly income is
also added to the couple's savings.
Marty has just begun writing an E-book about his "production
expertise" at work. His plan is to market this book on the
internet for profit
Every Sunday the couple takes a drive to stay familiar with the
Real Estate market in their area. They're looking for another
property, a "handyman's special" to fix-up and rent out. They
have saved enough for a down payment and their credit with the
bank is well established.
The family's total monthly expenses are $2000. Now, here's the
question:
Does Marty's family have Wealth yet?
To answer this question properly you first have to understand
exactly what "wealth" means.You achieve wealth when: *Your
Passive Income is the same or greater than your Expenses.* So
what does this mean?
First, what is Passive Income?
Passive Income is money that you are paid over and over again
for work that you only do once. (This excludes using a gun or
finding cash on the street) Some examples of this would be
royalties for writing a book or a song, commissions that you
receive for sales that others make and interest from bank
savings or dividends on stocks/options that you own.
Second, what Expenses are we talking about? This one's a little
easier to understand. Expenses are the total amount it takes to
run your household and your life. This includes, rent, mortgage
payments, car insurance, food, credit card and loan payments,
etc………
Let's look at Marty's family a little closer…………. Does Marty
have any Passive Income? Yes he does. Marty's salary is not
considered Passive Income. That's because he has to work 40
hours a week just to get the basic amount. If Marty doesn't go
to work then he doesn't get paid. His overtime also doesn't
count as Passive Income.
The interest from their Retirement Fund does though. It's paid
to him month after month as long as it's left in that account.
So, $32,000 at 5% is $1600 a year. Divided by 12 months equals
$133 a month in interest. Ok…..what else?
After the mortgage and expenses are paid with the rent money
they receive on their rental property they are left with $300
every month. This is Passive Income. Just as long as the tenant
stays and pays his monthly rent.
How bout that $400 from the home-based business and the Tax
savings. Is this Passive Income? Well, Marty's wife made sure
that she chose a company where she could sign new business
accounts and get paid commissions on those accounts over and
over again. They've made a 5 year commitment to build this
business part-time. So yes, both the $400 and the $300 in Tax
Savings would apply as Passive Income. Let's add up Marty's
total Passive Income.
Interest $166.00 Rental Income $300.00 Home Based
Business$400.00 Tax Savings $300.00 Total $1166.00
Not including Marty's salary from work, his family's Passive
Income is $1166.00. Not bad. Every month this amount flows into
the family's bank account, regardless of anything else they do.
We said that Marty's monthly expenses total $2000.00 a month.
And we also said………… You have Wealth when: *Your Passive Income
is the same or greater than your Expenses.*
$2000 Expenses subtract $1166 Passive Income = $834 monthly
balance needed to have Wealth.
Marty's Expenses are still more than their Passive Income so
they're not wealthy just yet. But they're well over half-way
there. With this kind of knowledge a family can know exactly
where to focus their financial attention.
Maybe when Marty writes that ebook he could get some sales and
royalties from it. Also the new Real Estate and more work on
their Home-based business would certainly help them to attain
more Passive Income. Once Marty's Passive Income is more than
the family's Expenses then Marty could start to have much more
freedom. He may even choose to quit his job and continue
developing his Passive Income streams.
Take a look at your own finances. What are your monthly
expenses? Do you have more Passive Income than your Expenses? If
you do Congratulations. You're Wealthy!!! If you don't. It's
time to get started and start adding Passive Income from other
areas as soon as possible.
When you truly understand this principle, you'll be well on your
way to becoming wealthy
About the author:
Al Walker, makes it easy to launch a successful online business and rapidly build your wealth to a six-figure income. Learn the 5 essential keys to online success. To receive your free 4-part mini-course visit: http://www.businessprogramreviews.com
Residual Income Making Money while You Sleep |
by: Frann Leach |
What exactly is Residual Income?
"Residual income is the reason that MLM business opportunities can be so lucrative. It's the reason why as many as 10% of new millionaires made their money in MLM... and who knows how many settled for just half a million?"
You're looking into business opportunities on the net, and you keep coming across the term 'residual income'. At first, you ignore it, one more piece in the puzzle that constitutes trying to find ways of making money online. But residual income keeps popping up. It seems lots of people are making a big deal out of this. Probably, it would be a good idea to find out what it means.
Residual income, also known as royalty income, is income that you keep on getting for months or even years after the work you did to earn it is finished. So, for instance, a song writer will get royalties on his song every time it is played on the radio, even years afterwards. The royalty for songs and literature lasts throughout the author's lifetime, plus 50 years, paying a small amount for each airplay, which can add up to a LOT of money over the years. A big hit brings in a huge amount, which gradually fades down to a tiny trickle over the years, depending on the popularity of the artist.
How do you make Residual Income?
Not everybody is a pop singer, though! So why do people online go on about this so much? How can an ordinary bloke earn residual income? Oh, heck, I'm no good at writing stuff...
No, no. Chill. There's no need to worry. The way to earn residual income does not necessarily involve any writing skills at all. For example, you can make residual income as interest on shares. But you may prefer not to invest large amounts of cash in an institution that can drop through the floor and take all your hard-earned savings from you overnight.
Another possibility is investing in property. Buy a house, do it up, and rent it out or sell it on for a profit. A lot of work. A lot of up-front investment. And no guarantee the housing boom is going to continue long enough for you to even get your initial investment back.
But there is another way...
Looking for a Residual Income Opportunity
The way to earn residual income that you have been stumbling across all over the net is almost certainly a variation of the type of business opportunity known as MLM ('multi-level marketing'), relationship marketing, network marketing or referral marketing. There are many of these online, all offering different products, different pay plans, different startup costs and different trading zones.
At first glance, they all seem much of a muchness, but look again and you will find there are many pitfalls for the unwary. It's important to do your homework, and check out exactly what is on offer for your initial investment.
But it's definitely worth the effort. After all, residual income is the reason that MLM business opportunities can be so lucrative. It's the reason why as many as 10% of new millionaires made their money in MLM... and who knows how many settled for 'just' half a million?
Finding a network marketing business
Obviously, the level of investment is a factor for most of us, but in general, you will probably find the required investment is pretty minimal, far less than setting up your own business or buying a franchise. Once you've scraped together enough for your initial investment, it's time to find the MLM for you.
Is it legal?
The first thing you absolutely need to consider is: does this opportunity follow the rules governing network marketing businesses? You probably know that pyramid selling is illegal. Many people believe that MLM and pyramid selling are the same thing. This is not the case, as MLM is completely legal. So, how do you tell them apart?
As a swift rule of thumb: if you earn your money from SALES or from getting CUSTOMERS (or recruiting others who sell or get customers), then it is a legal MLM business; if money is paid out merely for recruiting other REPRESENTATIVES, with no customers or sales involved, then it is an illegal pyramid scam. Steer well clear!
- Pick a product you can be proud of, at a good price. It's much easier to sell something you consider to be worthwhile. How sincere can you be about a shoddy item, or one that is overpriced? Before you can convince customers to buy, you have to convince yourself.
- Pick a market you can sell to. If you're over 50, don't try to sell products aimed at kids under 20. You don't speak the same language or see things the same way. Similarly, if you're younger, products aimed at pensioners are probably not your area.
- Even if you are pitching to the right market, it's also important that you feel right about selling this product to your market. For example, if you have a product that is aimed at people over 60, but you feel bad about selling goods to pensioners for some reason, it would be better choose a different product with a different market.
Once you have eliminated products and services that you can't work with, you will probably find you have reduced your choices to a more manageable number. This is the time to compare the companies you are looking at.
Choosing like from like
Right, so you have a number of network marketing businesses to choose from, all within your investment budget, with products and markets you can deal with confidently. The next step is to check out:
- how much is the initial investment?
- how long does this cover you for? a year? a month?
- is the product a 'pre-sold' consumable? (eg. gas, water, telephone, broadband/DSL, electricity)
- do you need to keep stock? if so,
- do you have to pay for your initial stock ON TOP of your initial investment?
- how much space will you need for storage?
- is this a perishable product? if so, how long before you have to throw it away?
- what is the company's policy on returns?
- is a website included in the package, or do you have to pay extra for this?
In general, holding stock, dealing with deliveries and returns, is a nightmare and best avoided. No matter how wonderful your product, people will change their minds, send things back, and repeat business is not guaranteed.
The best product is what is called a pre-sold consumable; these are products your customer uses regularly, and is billed for monthly or quarterly. So long as your product is well priced and properly supported by the company, you will find the highest levels of residual income from these products. They have the added advantage that you never have to deliver electricity in the rain, or pay a refund for unwanted water and then wait for the company to reimburse you.
You may think a website is unnecessary. But, really, here YOU are trying to find an opportunity on the net. If you do set up in MLM, you will be trying to recruit others to work in your downline. Don't you think a website would be a good idea? Yes, I know you can set one up for yourself, but unless you are wealthy enough to pay someone, or skilled enough to write your own, it's not going to be a patch on what you would expect. You have to have something that can impress a potential prospect. It should both sell your product and act as an aid to recruitment. In the longer term, perhaps you will want to augment your free site with others, but when you first start, a good quality free website is a definite plus.
What about the residuals?
You should look at the potential residual income with care. The main rule to remember is: avoid 'forced matrices'. If you have a choice between one MLM with a forced matrix and one without, go for the one without. The forced matrix restricts your income.
The second rule is: choose the matrix (not forced) with the highest number of levels. The more levels, the higher your residual income will end up. It's a bit hard to explain briefly, so I won't try. All I will say is, you want to be able to go as WIDE and as DEEP as you can. In my opinion, the best opportunity available in the UK and Europe for residual income is Tiscali, which you can reach here: http://www.this1works.biz/index.html
This opportunity is expanding all the way across Europe, from the UK, across Germany and Spain and on via the Czech Republic - well, watch this space!
In the US, you might want to join the IAHBE: http://www.ezinfocenter.com/8568108/IAHBE
Finally, let me wish you as much success as you deserve in your new venture.
About the author:
About the Author:
Frann Leach, Ramsgate, Kent, UK
http://www.informationzone.biz/
Frann lives in Ramsgate, Kent, UK with her computer and her cat, Muffin. She has her own referral marketing business and is always on the lookout to recruit go-getters like herself.
Find out more at: http://www.this1works.biz
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SAFELY PROTECT YOUR HOME BASED DREAM OF RETIRING WEALTHY! |
by: Dr. Scott Brown, Ph.D.
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The SIMPLE retirement account is awesome if you own your own business. Any family business applies such as a home based or “brick and mortar” real estate rental and investment business, car-wash, gas station, restaurant, etcetera, can sponsor the SIMPLE IRA. Like the SEP-IRA, the SIMPLE IRA is company-sponsored. As a small business owner, for 2003 for instance you could have matched each employee's pay up to 3 percent or $8,000, whichever is less.
That adds up to a lot of money when it is a profitable business and family members are employees. SIMPLE IRA contributions are fully deductible when you put the money in the account but you will have to pay taxes on any profits you make on the stock when you retire. In addition to a SIMPLE IRA accounts, individuals and home based small businesses have an additional option to sock away money toward future retirement educational needs through educational IRAs.
Small businesses, which cannot afford to sponsor a 401(k) or 403(b), can also offer employees basic retirement plans established for the benefit of their employees. Sole proprietors also now also can open individual 401(k) plans. Examine the options and pick the one that maximizes your long-range savings goal. And don't wait. Take advantage of compound earnings and start socking away cash now for tomorrow.
About the author:
ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. “The Wallet Doctor”, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term “Irrational Exuberance.” In 1998 he was shouting out to the world to “get out” of the stock market but now he is shouting to everyone that it is time to “get in!” The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. He also teaches investing in Spanish and Portuguese. For more information visit Dr. Brown’s site at www.BonanzaBase.comor sign up for his investment tips at www.WalletDoctor.com
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Planning for Your Financial Future |
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Two heads are better than one, so sit down with your spouse and plan out your financial future together.
Prioritize your bills.
By determining which bills to pay in which order, you'll get in the habit of making sure your essentials are always paid first.
Be careful using credit. Sometimes a financial crisis will come not because of a layoff, but because you're overextended. Most people can afford to devote 10 percent of their net income (after taxes) to installment debt, not including mortgage or rent payments. If you pay out more than 15 percent, you need to cut back.
Establish an emergency fund. Open a savings account and start "paying yourself" 10 percent of each paycheck.
What happens if we run into an emergency and our emergency fund isn’t enough?
Don't panic. When facing a financial crisis, stay calm. This will help you think logically and you'll avoid unnecessary arguments with your spouse.
Quit spending money. When faced with a financial challenge, it's easy to use your credit cards. But you may run up your balance to the credit limit and not be able to afford the payments, which will result in a poor credit rating—something you won't want during a crisis time.
Prioritize your bills. Pay essential, or survival, bills first: food, mortgage or rent, utilities. Next, pay car insurance, medical needs, child support, and any loans such as automobiles and furniture that are secured as collateral.
Then pay the nonessential bills—those debts in which no immediate consequences occur if paid late: credit and charge cards, attorney, medical, and accounting bills, newspaper and magazine subscriptions, life insurance, childcare, gyms, or clothing.
Communicate with your creditors. If you can't pay your bills or can only pay a partial amount, your creditors may be able to help you to establish a repayment plan.
Some lenders will allow you to defer one payment a year, meaning the payment for that particular month doesn't have to be made. The deferred payment is added to the end of the contract.
Take notes of any conversations with creditors, listing the date and person with whom you spoke. Whatever arrangement you make, get it in writing from the creditor before you send in money.
Know your rights. Many collection agencies are in violation of the Fair Debt Collection Practices Act. To get a copy of this legislation, visit www.ftc.gov. If you feel you've been violated, file a complaint with the Federal Trade Commission at their website.
Find outside help. Many churches and Para church organizations run programs to help you navigate through financial troubles.
A debt management company may also be able to help you reduce your payments, lower your interest rates, and pay off your debt faster than trying to do it yourself.
Such companies can also negotiate with your creditors to bring your accounts current if they're past due.
Avoid bankruptcy. Bankruptcies should be your last resort. A bankruptcy can remain on your credit report for up to 10 years.
About the author:
Nathan Dawson writes for http://www.marriedfinances.comand http://www.successfulmarriageresource.com,great online sources for marriage and finance information.
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