February 4, 2010

Are You the Right Type of Person to Run a Business?... Where
Your Money Goes Matters... The True Expense of Your Debt...
One Part of Your Info Marketing Business Best Left to the
Pros... and More.

A lot of people wish that they could run their own business. They have pipe dreams of sitting on their yacht in some exotic getaway, barking orders over their cell phones, while money pours into their bank account.

They see this as a lifestyle that can easily be achieved by starting their own business. However, this is not how it is in real life, and if you think that owning a business is all about "living the easy life," I've got a rude awakening for you.

Running your own business is not only hard work, but it's also long and hard work. As an employee working for someone else, the amount of hours you put in usually is correlated to the amount of money you earn. You work eight hours a day, you make a certain amount. You go over that, you might make overtime.

As a business owner, you don't get paid overtime. You might have to work 15 hours a day, every day, while your business is starting up. And, during that time, you might be the lowest paid person in your company. But that is all part of the growing pains of a business start-up.

And speaking of working hours, as an employee, you stop working when you leave the office. As a business owner, you are pretty much "on the clock" 24 hours a day, 7 days a week. You always have to be thinking about your business and always have to be working on getting exposure.

While you may not have a boss in the traditional sense to report to, you will have to take accountability for your actions. It's true, owning your own business means that no one will yell at you for coming in late or taking an afternoon off to go golfing or taking a three-hour lunch or using the company computer for personal reasons.

However, doing these things on a regular basis will more than likely cause your business to fail. And then you might have to report to people who might not be as understanding as a traditional boss: your family and your investors.

But the good part is that if you work hard at building your business, your hard work will pay off and, down the road, when the business is successful and you've surrounded yourself with a great team of employees, you'll still be able to take the time to enjoy the fruits of your labor.

However, just so you know, every single successful business owner I know has never been able to shut off that "work hard" mentality. And while they enjoy some very good perks, they also are some of the hardest working people I know.

So be prepared, and you might want to hold off buying that yacht!

Opening the newspaper this morning, I was confronted with two almost unrelated articles.

The first story was about a national grocery retailer that has just reported an earnings loss, even after it cut prices in the hopes of attracting more customers.

The second story was about a national movie theater chain that was reporting a big jump in its profits.

Now, there are many different factors that can determine why the profits of these huge companies have either fallen or jumped. And I'm not here to investigate what costs these big companies could cut back on.

What I want to talk about is how you're allocating your own money. You see, entertainment is big business and we all want that brief escape that going to the movies can bring. But, what matters is what the long-term consequences of spending your money mean.

When times are tough and every dollar counts, those dollars should be used wisely and with great consideration. Take a look at what you're spending a lot of money on. While not every dollar you spend can be considered an investment, it's wise to understand the result of where your money is going.

Considering the two news stories about the grocery store and the movie theater, you can see what is happening to the money customers are spending.

The movie theater is bringing in more money, which means there's more money to show more movies and more people get a few hours of escape in front of the big screen.

However, if less people are spending money on groceries, the grocery store could be cutting jobs, stocking less-than-ideal products and losing steam when it comes to providing good service. The long-term impact of people not spending money at a grocery store could mean less options and lower quality.

When you spend your money, are you supporting a flash-in- the-pan good feeling or are you contributing to a service that provides your community with essential items? You see, every dollar counts, not only for you, but also for the people who you hand your money over to.

Whenever I talk about personal money management, I really try to emphasize the importance of saving. There's no question you're going to need money in the future, and it's likely going to be more than you need now. I usually like to tell people to save at least 10% of their earnings; and 10% is the bare minimum. Aiming for more is ideal, if possible.

However, there are some rare instances where having money sitting in a savings or investment account doesn't make the most sense. Especially if you're in considerable debt.

For example, let's say you've got $5,000 to $8,000 sitting in a savings or investment account. If you do, that's great. That's a nice chunk of money that can help you in the future -- especially if it's invested wisely. However, if you have that money available and are sitting in a hole of debt of any size, you may want to think about putting your money towards filling the hole. After all, the more debt you have, the faster it grows.

As you likely know, debt can get quite expensive. For example, if you're carrying around $5,000 worth of credit card debt, you're probably accumulating 20% worth of interest fees every month. That 20% adds up with lightning speed, and before you know it, debt recovery may seem even more impossible.

So, let's say you're making 10% on your investment. If your money is sitting in a savings account, you're making anywhere from 0.25% to 3.0%. No matter how you look at it, you're making money at a much slower rate than you're falling into debt. Because of the fact that you're essentially spending 20% to make, at most, 10%, it doesn't really make sense to keep your money in the investment account if it could reduce -- or even eliminate -- your current debt.

I know it feels good to have that money sitting away for your future or a rainy day, but the truth is that, depending on your debt, it could be delaying your chance for financial freedom. Clear up your debt, then start saving. Not only will you have the relief of being debt free -- or at least in less debt - but you'll also be able to maximize your savings.

** One Part of Your Info Marketing Business Best Left to the
Pros
By James Burt, Online Marketing Expert

It's only February, but now is the time to start preparing for tax time.

The Beatles wrote songs about them, business people dread them, and often people go to jail because they didn't pay them. Taxes -- a one-syllable, plural word that is never read or heard of with any exuberance by anyone in any walk of life.

The truth is that taxes don't necessarily have to be that brutal. They are really just another part of the yearly rituals just about everybody, info marketers or otherwise, have to attend to. It's not fun paying them and most people aren't always satisfied with the returns they get. But taxes are some thing you can prep for.

But you might want to get some help. I always recommend that info marketers get someone to help them. A good accountant, tax attorney or tax advisor can help you immensely, especially in your first tax filing year. Before you go looking for someone to help you with your taxes, here are some guidelines I recommend:

--- Get out the records: I have mentioned the importance of keeping organized personal records in the past and now I can tell you why. When it comes to March or April and tax time rolls in, you have to be ready to account for everything that has been relative to your business in order to determine what taxes you will or will not pay. This includes all bills you have issued clients, all receipts you have kept from business expenditures, and all any other proof of financial interaction that is relevant to your business. Take some time and go through those wads of white paper and get all your info marketing bills together, putting them in chronological order.

--- Get the expense reports, too: Most people think that since info marketers operate with so little, there is almost nothing, if nothing at all, to credit yourself on your tax form in order to get a deduction. Unlike a carpenter or other contracting pro who can write off a whole list of tools they have bought themselves. However, don't pass up any possibilities to do so. Did you get a computer update or buy a new laptop that you use as part of your business? How about travel as part of your business? These can be considered as "relative business expenditures" and your accountant might know how you can use them to your advantage at tax time.

--- Get a real pro to help you: At e-Wealth Daily, our in-house accountant is fantastic. His records are completely organized and his tips on tax filings have been invaluable time and again. While we can't loan him out to you, there are others like him and I recommend getting a great accountant for your filing procedure. Take recommendations from associates or do some investigating, as you need one with a good track record. While you might be skilled in filing your own taxes by yourself, I would suggest getting an accountant for at least one fiscal year who knows all the ins and outs of filing taxes for self-employed professionals. A good tax attorney for consultation never hurts, either, just get a price quote beforehand.

--- See what options lie ahead: Since you are now a self- employed pro and this may be your first time filing as one, take good notes from whatever tax advisor you get. You might learn of a new government tax break for entrepreneurs or your advisor might suggest ways of keeping your records better and in such a way that you can be guaranteed a return. Learn everything you can. The road ahead will be much easier.

Taxes usually bring about feelings of dread and anger in most people every year. Let's face it: it's just not fun. But, in my books, it's just best to deal with it. The good news is that you can get help and that, if get the same professional help that you expect of yourself and your info marketing business, taxes truly can be a walk in the park for you.