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October 21, 2006
A Story of Success
In the last 6 years I have managed to build an online business despite all the nay-sayers and propel myself to a point where my financial decisions have become very different.
Six years ago my concern was about holding on to the house. It was an average Joe house with 3 bedrooms. Ya know the typical living room, dining room, kitchen and 3 bedrooms on the main floor. The lower level was recreation room and laundry room. The house was basically average and was what many "worker bees" strive for.
Well, after starting my own business I have been able to afford a 4 bedroom, 3 level house with an amazing view. And...Are you ready for this...Rolling the clock forward to the "here and now
" I am faced with the problem of tyring to buy my second house.
No, I am not talking about selling this house and buying another, I am talking about buying and owning 2 houses based on my internet business income.
The thoughts have changed from:
"How am I going to afford this single house"
to...
"How much can I get tenants to pay for one of my houses"
Why am I telling you about this?
I am telling you this because I was once in your shoes. I was a guy trying to make a life for my family and do what it took to pay the bills and trying my hardest to figure out a way to hang on to a house.
Now I am trying to figure out how to maximize my income from a rental property. I am looking to maximize a positive cash flow from a rental property and how to best leverage the equity in each house to buy more houses or make other investments.
I am in the process of developing a mentorship program to bring others to my world and have the same kind of money problems I do.
The money problem I have is what most people aspire to, that is the problem of having too much money and trying to figure out how to best leverage that money to make more while not paying excess in taxes (there are steps you can take to minimize taxes and minimize them legally).
OK...I must get back to documenting my exact steps to success so that I can share them with you. Heck, if we were all financially free the world would likely have a very different and positive look and feel dontcha think :-)
October 17, 2006
Are Credit Card Rewards Really Saving You Money?
Consumers are bombarded with credit offers both from traditional banks and from retail outlets.
The marketing strategy used by both the banks and retail stores to entice you into using their financial offering is usually a points system where you typically earn travel or cash back on purchases with your Visa or MasterCard or points towards store purchases in the case of retail charge cards.
Both offerings do persuade consumers to apply for credit but consumers need to be wary of both offerings.
The tendency for most people is to jump on a credit offer to capitalize on the “free stuff” that comes with the line of credit. The free stuff and bonuses are certainly worthwhile but only if you have excellent budgeting habits.
While you can earn cash or points towards merchandise for using the card, the points are only worthwhile if you are not incurring charges on hidden fees and interest.
I am writing this because of a story I read in Time Magazine. The story goes like this:
A consumer holding a Kohl’s credit card purchased a pair of shoes for $45.08 but because of making a payment only 2 days late a penalty of $25.50 was charged. Suddenly the actual cost of those shoes is 70.58!
It’s not only department store credit cards that tack on late charges, credit cards issued by major banks usually have similar late fees.
If you think you are getting bonuses on your cards I suggest you stop right now and go check the terms and conditions on your account. You might be surprised at what you find.
Let’s go over this scenario:
You earn 1% cash back on purchases
Your purchase of $45.08 would earn you a measly 0.45/annum
If you don’t pay your entire balance every month the interest on the average credit card would cost you roughly $4.00/annum
Now what reward did you actually earn? You earned nothing!
$4.00 - $0.45 = $3.55
In this scenario you pay $3.55 in interest charges!
There’s no reward there!
Rewards programs are put in place to encourage you to use your credit card more frequently.
The card issuers are banking on the hope that you do not pay your balance in full.
Read the fine print on your card holder agreement to be sure that you are not paying too much in interest charges and other associated fees.
Purchase only what you normally would with cash, pay your balance in full and on time and only then are you actually earning anything.
On a monthly basis break out the calculator to ensure that the rewards are actually putting money in your pocket.
Posted by Colin at 02:31 PM | Permalink | Comments (0) | TrackBacks (0)October 13, 2006
Online Money Making Mind
I have been operating my online business venture for several years now.
The most common question I get asked is "What does it take for the average person to do what I have done?"
There is a very simple answer to this seemingly tough problem of getting started. Now, are you ready for the answer. Make sure you are seated, I don't want you falling over when I lay down the secret to success. Are you sure you are ready?
Here is the secret to entrepreneurial success:
1. Relentless determination
2. Just do it
3. Fix it later
You must have the desire and be willing to make a few personal sacrifices and then get off your butt and get busy doing it. You are not going to know everything out of the gate. In fact, you aren't going to know what you don't know until you start.
Too many would-be entrepreneurs suffer from a severe case of analysis paralysis, which means too much of trying to figure out every piece of the puzzle from beginnning to end. Very few successful entrepreneurs know the start to finish of their venture, they do know however that to hit the finish line ya gotta start.
So start at the beginning and just do it.
Posted by Colin at 03:44 PM | Permalink | Comments (0) | TrackBacks (0)October 12, 2006
Teaching Your Kids About Money
At some point, you'll have to deal with the question of whether to give your children regular allowances and, if so, how much. According to various surveys, only about half of all families pay allowances to their children. Of those that do pay allowances, the majority do so weekly.
We did it for our children, and encouraged them to supplement their income by doing extra chores. I don't think it worked all that well, and it appears our children don't think so either since they're experimenting with other techniques now that they're parents themselves.
Our oldest daughter's family used the allowance concept for a while, but then abandoned it after they discovered that one of their kids was spending everything on hot dogs and ice cream. They've now moved to a "money on request" system, which requires the child to explain why the money is needed.
This gives the parents more control and enables them to turn down requests if the money is going for unhealthy foods or some other undesirable purchase.
If you decide to give your children an allowance, ask for an explanation of what they intend to do with it. It's also a good idea to encourage them to put part of the money towards savings, although this may prompt a complaint along the lines of, "It's my money so why can't I spend it like I want to?"
The way around that is to decide in advance how much of an allowance you want to give. Let's say it's $5 a week. Tell the child that his weekly allowance will be $4, plus you're going to add an extra dollar a week to his savings. This creates the impression that he's getting a bonus. In fact, you're really implementing a forced-savings program. You decide what the percentage will be.
You may want to put certain conditions on the allowance, but you need to be very careful if you do. For example, you may tell the child that part of the allowance must be used to pay for school lunches. The danger is that he'll skip lunch so that he'll have more to spend on things he really wants.
As the child grows older, the allowance should increase, but don't just raise it every year automatically. When the time to review the allowance approaches, ask the child to account for how the money was spent over two or three weeks. See if he really needs more, or if a lot of the money is going for things you'd prefer he not have. Discuss the issue frankly. Remember that giving your child too much money may be asking for trouble.
Posted by Colin at 03:47 PM | Permalink | Comments (0) | TrackBacks (0)October 01, 2006
Get Control of Your Budget-The Bottom Line
Every family should have a budget. There is no way to control your finances without one. Gaining control of your money is essential to reigning in your family budget expenses.
Posted by Colin at 01:37 PM | Permalink | Comments (0) | TrackBacks (0)