Author Archives: ernie

Baby Boomers Retiring

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Baby Boomers RetiringBaby Boomers retiring in droves and the banks are issuing study results galore about retirement and baby boomers who will be flooding the market over the next several years looking for something to do. The first wave of baby boomers turns 65 this year. As a result, if they have not already retired prior to 65, then many will begin retiring this year.

The banks do all of these studies and report the obvious. Many are concerned about retirement. What will they do, do they have enough money? Will they be bored and will they go back to work? The answer is yes to all of the questions. Also no to all of the questions. It really depends on the person and the situation that they are in.

How Silly Are These Surveys?

I have a neighbor who retired last year at 65. His wife has been retired for several years. She is a retired teacher and he retired from a senior job at the government. We chatted one day. He expressed the concern that they do not know if they have enough money for retirement! Well of course they do,. But it comes down to lifestyle and how they want to live their life after retirement.

So forget all of these so-called surveys and focus on your situation.

Baby Boomers Retiring – Plan For the Future Now

Regardless of age (if non-baby boomers are reading this post, then you should pay attention to this part), you should have a financial plan. It does not have to be complicated. Basically, you need to assess what your retirement lifestyle desire will be in real terms. Then map out a financial plan to help you achieve your goals.

The later you start this plan the more difficult it will be for consumers to achieve their objectives. Starting early makes it very easy. While starting at 65 really means you must live on what you have and the pension income that you take in. A financial adviser can assist you with the development of the plan in terms of the numbers. However, you are the one who must do the work along with your spouse. Decide what kind of lifestyle you want and what you can afford.

Health

The bank surveys also show those baby boomers are concerned about their health and what impact their health will have on their retirement. Obviously, if you are in ill health, you are not going to be able to some of the things you planned on. All you need is one serious bout of sickness to make you realize that life is precious and you had better enjoy it as much as possible while you can.

Once you have a stroke or some other debilitating problem, no matter how much money you have, you are not going to be able to do all of the things you planned on including travel, sports, etc.

In Canada, medical costs do not play as significant a role as they do in the US because the government covers our routine medical costs. In the US, if you get sick and have no coverage, then you run the risk of either being totally broke or you do not get treatment and you die prematurely from something that is easily treatable.

Baby Boomers Retiring – Summary

The bottom line is to plan for your retirement taking into account your lifestyle needs and desires along with the amount of money you expect to have available during retirement. The two will have to be balanced no matter how much money you have. Apply a business-like manner to managing your assets and grow them to ensure that you have what is needed for retirement. For baby boomers, it is never too late to develop your plan, however, you will need to limit your objectives in order to meet your goals and objectives for retirement.

Enjoy your life now. If health issues become significant, they will put more of a crimp on your activities than money ever will, so figure out what you want out of life and go after it while you still can.

 

 

 

 

Age 60-Do You Have Enough for Retirement

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Do You Have Enough for RetirementOk, this is a question that everyone wants to know the answer to. Do you have enough for retirement? The answer is different for every person, since it depends on their financial situation, their pension plan if they have one, and their savings in registered plans and nonregistered plans, and whether they own their own house or not.

Let’s assume you are 60 and thinking about retirement and wondering if you have enough savings set aside. To start with if you are 60 today and in relatively good health, there is a good chance you will live for another 30 years. If you work to age 65, then you will have 25 years that you will need to live on your retirement funds, pension, and social security benefits.

Average Account Balances

According to recent studies, consumers in their 60s had an average account balance of $144,000 at the end of 2009 savings. This is a very low number and may not take into account savings in non-registered plans, homes, cottages, etc.

If you are married and your spouse also has some savings, then you might be a bit better off, so before you get really paranoid about retirement savings, make sure you take into account these other factors. Where will your income come from? Here is a list of items to consider for both you and your spouse:

  • Company pension
  • Social security
  • Registered plans ( 401k’s, RRSP, etc)
  • Non registered savings
  • Sale of cottages, 2nd homes, etc
  • Sale of investment properties
  • part-time jobs

Complete your own inventory to assess what you may have in terms of annual income based on the list above. If we missed some, please let us know by leaving a comment on the blog at the end of this post.

If you find that you do not have enough savings and/or income, here are several steps you can take to begin rectifying the problem. Note that you are starting very late if you are 60, but better than not at all, right?

Do You Have Enough for Retirement – Build a bigger nest egg

If you are in your 60s and all you’ve got saved is $200,000 in a registered plan, you may not have enough funds to live on.

Using a common rule-of-thumb withdrawal rate, you would withdraw 4% of your $200,000 nest egg in the first year of retirement, or $8,000. That amount is likely to be inadequate. If you do not have other sources, then this amount is not enough and you really do not want to touch your principle if you can avoid it. What to do?

Reducing consumption now and saving more is the only real answer we can give. This is all about your personal comfort and quality of life during retirement and it is important that you take control of it now to try to make some level of quality of life work for you that is acceptable.

The rule of thumb currently is that you need about 30 times in assets of the initial withdrawals during the first year of retirement. For example, if you need $50,000 per year indexed to inflation starting at age 65 until age 95, then you need $1,500,000 in your portfolio at age 65. This is a far cry from the $200,000 average savings that many people have. If you can reduce the $50,000 by accounting for pension, social security, and other income, the amount of savings you will need will decrease accordingly.

Check your asset allocation

It is time to be conservative with your investments and focus on generating income from your investments. You cannot risk investing in speculative stocks and you need the income. Triple A bonds and blue chip stocks with a history of paying their dividends and increasing their dividends year over year are good things to consider.

Diversify your savings. Do not put all f your savings in one investment and do not chase that too good to be a true, sounding investment. You cannot afford to lose everything in something that is very risky. Speak to several advisers and form your own opinion. Don’t follow someone’s advice blindly.

If you are concerned about risk, GICs are the safest investment, however, they do not pay very much in terms of income. You will be able to sleep at night!

Find out what your limits are in terms of contributions to your retirement plan and contribute the maximum every year until retirement to maximize your savings for retirement.

Do You Have Enough for Retirement – Delay retirement

Now, this is an ugly thought, especially if you are planning to retire shortly. However, if you do not have savings and income, you may not have any alternative. Delaying retirement for several years can make a huge difference in terms of spending, savings, and your own well-being. You also delay the draw down on your savings as well which will benefit you over the life of your retirement.

Many people enjoy getting out every day to mingle with people and it gives them something to do.

Semi-retirement might also be an option for some folks. Working three days a week for example still generates some income. But also allows more time for you to explore your interests and spend time with the grand lids. It also keeps you sharp in terms of the business world as well. They say that you need to exercise the body as well as the mind to lead a fit life well into retirement.

Delay taking Social Security

Taking social security early comes with a price. Most plans as well as pension plans penalize the retiree by reducing the amount of money they pay out each year if they retire early. Every year you delay taking your pension or social security benefits will provide you with an increase in your payments, which can be a huge benefit in later years.

One last point to consider if you do plan to take your pension and social security early. If you are also planning to work, your taxes could claw back some of these benefits depending on how much you make.

Check with an investment adviser or pension specialist to assist you in any of these decisions.

Secrets to Retirement Planning

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Secrets to Retirement PlanningEveryone wants to have a comfortable retirement. A healthy retirement and to be able to take advantage of the free time they now have.  Like everything else, you can increase your chances of achieving these goals if you plan for retirement. The Secrets to Retirement Planning are pretty simple once you understand them. Plan financially, emotionally and look after your body as well. The fundamentals of meeting these goals are pretty straightforward:

  • Sufficient funds to do the things you have always wanted to do
  • Healthy bodies and minds
  • Interesting and challenging things to do

If you have these three things, chances are all the details will work themselves out, and you will have a wonderful retirement. Sure, there will be challenges along the way, family issues, and surprises you could not predict. However, if you have dealt with the retirement planning issues of money, health, and interests, you should be able to weather these small storms.

Secrets to Retirement Planning

Let’s take a look at these three areas in more detail.

Sufficient Funds

The answer for everyone is, of course, different. You need sufficient funds in your retirement to meet your basic needs for a safe and healthy life. Beyond that is what you really need to enable you to meet your retirement goals.  Starting when you are younger and setting aside at least 10% of your salary every year in savings should get you to where you want to be when you retire.

Of course, you will have to save more if you have lofty goals. Develop a plan based on your current lifestyle and spending habits. Calculate how much money you need to save based on the year you retire and the expected life span. Assume a conservative interest rate as well, forcing you to save a bit more. With these basic tools and plans, you should find yourself in a good position come retirement.

Follow the basic rules of diversifying your investments, never put all of your investments in one basket, if it sounds too good to be true, then it probably is, and try not to chase speculative investments; invest for the long term.

Healthy Bodies and Minds

This is probably the easiest for many people. All you need to do is exercise the body and mind to stay sharp and enable you to enjoy all of the things life offers well into your old age. Too much of a good thing is also bad, so 3 days of exercise for 30 minutes each week is probably sufficient for most people. Overdoing it, as in seven days a week marathon running, for example, will probably wear out your joints well before you usually would. Who wants to go through knee or hip operations with the associated immobility?

Swimming is an excellent low-impact exercise and is great for sore knees and hips. Even if you are not a good swimmer, just getting out and being active in the pool is great exercise. Consider some of the swim gym classes as well, where you exercise in the water.

You also need to challenge the mind and keep it sharp. Working will help with this as long as your job requires some thought. Experts indicate that doing crossword puzzles, playing games, and working on various projects will also help to keep the mind sharp. How about doing math to keep your mathematical skills high? You can impress the kids at the store by adding up your costs before they can punch it into the cash register. Did you ever notice that when the cash register is not working, most have no idea how to add it?

Interesting and Challenging Things to Do

If you become a couch potato, you are probably headed in the wrong direction. When asked what he was doing in retirement, one friend of mind answered by saying he gets up in the morning, has his coffee, reads the paper, and watches the grass grow! This indicates someone who has no outside interests and is bored. Needless to say, his friends were appalled. Fortunately for him, he was able to land some small contracts which will keep him going for a while; however, he needs to find something exciting and challenging to occupy his time.

It does not matter what it is. Go back to work, take up some hobbies, volunteer, travel, do something. The only essential criterion is to make sure you look forward to getting up in the morning to tackle what you have planned for the day. Of course, if travel is on your list, you also need to be able to afford it.

Don’t wait. Start planning for your retirement when you are young, and you will be sure to have a very successful, enjoyable retirement lifestyle! Comments are welcome!

A Will In Your 20’s or 30’s!

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A Will In Your 20'sMany young people think of estate planning and financial planning as something only seniors must do. A Will In Your 20’s? The truth is, if every adult with a spouse, child, or business, regardless of age, had solid plans in place when they were young we would all be very well off during mid-life and into our senior years. People with A Will In Their 20’s and 30s are in the prime of life. They have a lot of years to set aside money for later. If you start early then you do not need to set aside very much each year. You can end up with a really nice nest egg.

Young people marry, start a family, and buy a home. Some will also start or buy a business so there are a lot of pressures on the financial side of life. This can be made easier if you have a solid financial plan, an estate plan, and a will to protect you and your young family.

A Will In Your 20’s or 30’s

Whether we realize it or not we all need to think about the following as we take steps in our lives:

  • Getting married
  • Having Children
  • Buying a home
  • Saving for retirement
  • Buying life insurance
  • Starting a business
  • Preparing a will

A Will In Your 20’s! And Having children

Once you have children, you have taken on a huge responsibility that goes on whether you are alive or die in an accident. One of the ways to ensure that your child has the life you had hoped for them is to have a will that states how your assets will be used to support them and who will look after them. If there is no will, someone in the government will decide who will raise your kids and how the money will be used.

Your will can also state how the funds will be used to support the kids when they have access to the funds and who will manage the funds until they are old enough to manage the funds themselves.

Buying a home

When you buy your home, most couples will do so in a joint tenancy which means that if one dies, the other takes over the ownership of the home automatically, called a right of survivorship. The house remains out of the estate and probate is not required for its transfer to the surviving owner meaning you pay less probate or death taxes as a result.

Without joint tenancy, you have tenancy-in-common which doesn’t provide a right of survivorship. The half of a house owned by a deceased tenant-in-common falls into the deceased’s estate, where it’s subject to creditors, claims, and delays.

Saving for retirement

Savings plans for retirement should start early in life. Investors should consider how these assets will be handled in probate. Plans in some situations can be transferred to spouses tax-free. In the early years when you do not have a lot of savings, many people will take out insurance coverage to protect their families should something happen to them.

Buying life insurance

Leaving a life insurance policy to a spouse directly also keeps the insurance proceeds out of the estate. This ensures that there are funds in the spouse’s hands no matter what is going on in the estate. This is better for the spouse. On the other hand, there are excellent reasons to name the estate as the beneficiary of a life insurance policy. The main benefit is that it provides cash in the estate that can be used for paying taxes. Or paying debts (such as paying off the mortgage on the couple’s home).

Life insurance can also be used to provide money that can be distributed to one of the children. For example, the deceased was leaving his or her major asset – a business or farm, for example – to one child. If they didn’t have enough assets to give a similar amount to another child. Another use of life insurance is to create funds for holding property such as a cottage in trust.

Life insurance is much cheaper at younger ages than it is when people are older. Young people should consider the various ways that life insurance can be used to their advantage. It can replace income. It can pay out a mortgage, leaving the widowed spouse with a clear title to the home. Also, it can provide funds to leave in trust for the children. It can provide cash flow to be used to pay taxes and expenses.

Starting a business

Finally, young people are tying up a great deal of time, effort, and capital in a business. They must plan right from the start to protect their families in the event they pass away prematurely. If the business is incorporated and there are other shareholders, there should be a buy-sell agreement put into place. It should clearly state what happens to the shares of a deceased shareholder. Often the agreement provides that the other shareholders will buy back the shares. In a fledgling company (and often in more established ones, for that matter), this probably means that a life insurance policy owned by the company will be taken out on the shareholder’s life.

Start your planning today. Talk to a financial adviser and assess what your next steps should be. Enable a high quality of life during retirement as well as high quality of life for your family should something happen to you.

Why you Need to Have a Will

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Why you Need to Have a WillWe have had a will ever since we were married which has been over 35 years. It was just the smart thing to do. We wanted to make sure that our kids and significant other were looked after in case something happened. However every once and awhile we run into someone our age who does not have a will. Why you Need to Have a Will? We are amazed that they have not done something about this major issue. Perhaps they just have not thought things through. Or they have this silly emotion that it puts you one step closer to the grave. You would be surprised at how many people actually think this.

Why you Need to Have a Will

If you are a responsible adult, then it is time to step up and do the right thing for your family. If you need to make some tough decisions, then make them, but get on with it. Here are some of the reasons why you should not delay this one more day!

  • Your kids
  • Your home
  • Saving for retirement
  • Purchasing insurance
  • Business ownership
  • End of life decisions

Having a will is only a part of estate planning. We will focus on this element on this blog, but please give some thought on how you want your estate dealt with in preparation for the time when you can no longer make decisions.

Many of us think of estate planning as something only seniors must do. The truth is, it’s essential for every adult with a spouse, child or business, regardless of age, to have solid plans in place. People in their 20s and 30s are in high gear. They may marry, start a family and buy a home. Some may start or buy a business. It’s all about getting started in life and nobody wants to think about taking their foot off the accelerator.

Having a will can provide some protection for the important people in your life  and assets that you have.

Why you Need to Have a Will – Children

If a young couple is killed in an accident, their young children must be raised by someone else. If the parents haven’t made wills, they have lost the opportunity to choose the new guardians of their children, and to have the children raised together in one family with someone they know. Most parents, confronted with the choice, would rather not have extended family members dispute guardianship in court. And certainly not many would want to risk the children becoming wards of the government.

Using a will, the parents can also make provision for money to flow from their estates to the guardians of the children to help pay for raising the children. This could be vitally important if two or three children are left behind to join a different family that already has two or three children of its own.

Buying a home

Even young people without children should plan ahead for a premature death that leaves one of them widowed. As mentioned, a will is essential – but estate planning doesn’t stop there. Some assets are not governed by a will, namely jointly held assets and assets with designated beneficiaries. It’s important that everything works together.

One of the largest purchases a young couple will make is a family home. They must understand the legal effect of a jointly owned home as opposed to a home held as tenants-in-common. An incorrect title can have a devastating effect if it causes a widowed person to lose his or her home as well.

Joint tenancy, which is by far the most common way that couples own their property, provides a right of survivor ship to one owner when the other passes away. It keeps the house out of the estate; probate is not required for its transfer to the surviving owner. Tenancy-in-common doesn’t provide a right of survivor ship. The half of a house owned by a deceased tenant-in-common falls into the deceased’s estate, where it’s subject to creditors, claims and delays.

Saving for retirement

Couples often start contributing to RRSP’s when they’re young and they need to understand the legal, tax and financial effects of naming a beneficiary. They also need to consider who will be named as the beneficiary of life insurance policies. Leaving insurance proceeds directly to a spouse will have quite a different effect than leaving them to an estate, depending on what else is going on in that estate.

Because assets of a deceased are deemed to have been sold immediately before death, any tax that has been deferred becomes payable. RRSP’s are funded with pre-tax dollars, so on the death of the owner, the deemed sale triggers the payment of taxes on the RRSP. The payment of this tax can be avoided on the death of the RRSP owner if he or she names a spouse as the beneficiary. When a spouse is named, the payment of tax is deferred again – until the spouse dies or takes the money out. This also protects the spouse in the sense that the RRSP doesn’t fall into the deceased’s estate so it is safe from claims, creditors or litigation.

Buying life insurance

Leaving a life insurance policy to a spouse directly also keeps the insurance proceeds out of the estate, ensuring that there are funds in the spouse’s hands no matter what is going on in the estate. This is better for the spouse. On the other hand, there are excellent reasons to name the estate as the beneficiary of a life insurance policy. The main benefit is that it provides cash in the estate that can be used for paying tax or paying debts (such as paying off the mortgage on the couple’s home).

Life insurance can also be used to provide money that can be distributed to one of the children. For example, the deceased was leaving his or her major asset – a business or farm- to one child. They didn’t have enough assets to give a similar amount to another child. Another use of life insurance is to create funds for holding a property such as a cottage in trust. So it’s very individualized depending on what the person is planning to do, and based on what assets already exist.

Life insurance is much cheaper at this age than it is when people are older. Young people should consider the various ways that life insurance can be used to their advantage. It can replace income. Life insurance can pay out a mortgage, leaving the widowed spouse with clear title to the home. It can provide funds to leave in trust for the children. It can provide cash flow to be used to pay taxes and expenses. Young couples should ensure that they are neither under-insured nor over-insured.

Starting a business

Finally, young people who are tying up a great deal of time, effort and capital in a business must plan right from the start to protect their families. If the business is incorporated and there are other shareholders, there should be a buy-sell agreement put into place that clearly states what happens to the shares of a deceased shareholder. Often the agreement provides that the other shareholders will buy back the shares. In a fledgling company (and often in more established ones, for that matter), this probably means that a life insurance policy owned by the company will be taken out on the shareholder’s life.

Living Wills

You might be incapacitated by an accident, stroke or some other complication. Who do you want to make the decisions about your care and medical treatment? How far should they take the treatment in terms of trying to save your life? These are all questions that you do not want to leave up to just anyone. It should be someone you trust and not a court appointed bureaucrat!

Making Money off Blogging

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Making Money off BloggingThis is a re-post of an article I read on Market Watch about Making Money off Blogging. It is re-posted here in it’s entirety. We posted this article here since many of our friends wonder about what Adsense and blogging is all about and why would I spend so much time working on something like this. It is foreign to the entire concept of going to an office, getting a paycheck and not working for your self. I thought that maybe they would see this and understand a little bit more why I blog:

Jan. 12, 2011, 12:01 a.m. EST

Making Money off Blogging

Successful bloggers describe how they made a go of it

By Marty Orge

SAN FRANCISCO (MarketWatch) — Blogs are an ever-growing presence on the Internet, but can you make money in this crowded field? Certainly, some people do, and a big part of their success is choosing the right topic to write about — and then sticking to it until the audience, and advertisers, come.

There were 126 million blogs on the Internet in 2009, the most recent figure available, according to Pingdom.com, which tracks Internet growth. Some provide a healthy income for their authors.

Start with passion, and the money will follow, said Joel Comm, a new-media marketing strategist in Loveland, Colo., and author of “KaChing: How to Run an Online Business that Pays and Pays.”

“Niche is the way to go, and micro-niche is even better,” Comm said. “To be successful with a blog you need to find your passion.” Successful bloggers want to write about whatever they’re passionate about, he said, even if they don’t get paid.

For example, if you love dogs, there’s a niche. “I’m partial to Yorkshire Terriers,” Comm said, “so I could blog about Yorkies, defining my niche even more,” he said. “Find a topic where you can display your knowledge and become the blogging expert about it.”

Not always about the cash

For Neal Schaffer, who earns $100 a month from blogging and gets 20,000 visitors each month, it’s not about the money. Blogging is a way to attract potential clients.

Schaffer is president of Windmills Marketing in Newport Beach, Calif. He blogs about social-media strategies for professionals and businesses at WindMillNetworking.com.“Because I built a trustworthy relationship, people reading my blog are ready to purchase services I offer. Blogging is free advertising for my business,” he said. “It is in my consulting and speaking business where I make a living.”

Schaffer uses Google AdSense and affiliate marketing programs. Google offers AdSense, which delivers ads, free to site owners and bloggers. Payment is usually based on how many visitors come to the site or click on the ads. Affiliate marketing programs pay bloggers when visitors click on their proprietary ads.

Praveen Puri

is a financial and software blogger in Aurora, Ill., and author of “Stock Trading Riches.” He earns an average of $250 a month from four blogs, including Simple-Trading-System.blogspot.com and unix-simple.blogspot.com.

“I make about $50 from selling my books on my blogs, $10 from Amazon affiliate sales, $140 from sponsored posts through PayPerPost.com, Blogertise.com and SocialSpark.com, and $50 from selling paid links directly to advertisers,” he said. “I work on my blogs about 16 hours a week.”

Long hours and minimal income don’t deter Puri. For him, blogging is like a hobby. “Most hobbies cost money,” he said. “With blogging, I’m enjoying a fun hobby where I’m actually making more than I have to pay out.”

Puri said his blogs also help him gain credibility as a source on Unix programming and financial investing. And he does want to see a bigger payoff from his blogging. “There is the hope that I will eventually make a breakthrough where one or more of my blogs or posts go viral and exponentially create a big audience where I could make more money.”

Marc Matsumoto,

a New York-based editor and publisher of the food blog NoRecipes.com, said he makes $1,000 a month in blog ad revenue and gets 160,000 visitors to his blog a month.

But his blog serves as the gateway to other income. Matsumoto said he has gotten paid recipe-development jobs for periodicals, books, and packaged-goods companies from his blog. “I’ve also gotten paid food-photography gigs primarily for packaged-goods companies. Almost 100% of my leads come through my blog,” he said.

“I work 40 to 50 hours a week on purely blog-related activities,” he said. “I left a job as a marketing executive three months ago to pursue the blog and work on it full-time. A blog is a portfolio piece that helps you build your brand and secure other work.”

Blogging for real money

Nick Veneris is chief executive of Xomba.com, an online writers community. Writers post original content and share AdSense revenue.

“Our users made a total of $45,000 last month, so, yes, Google ads do pay,” Veneris said. Xomba shares AdSense revenue 50/50 with writers, with some individuals making $1,000 to $3,000 a month. According to Veneris, topics that pay the most are technology, retail sales and shopping, entertainment, health and business.

Meanwhile, Marc Aarons said he earns $2,000 a month after two years of blogging about mobile broadband on Mobile-Broadband-Reviews.com.

“Ninety percent income is from Google Ads,” Aarons said. “They work.” The Atlanta, Ga.-based blogger spends two to four hours a day on his blog, “with a morning commute to the kitchen.”

Aarons credits his success to hard work and transparency. “Hardly anyone is willing to support you, let alone hand over any money to you, without transparency,” he said, referring to being up-front and clear about advertising relationships.

“For many people who’ve had some level of success on the Internet, transparency has usually been a big part of making that happen,” he said

Always Provide Value

Also, successful bloggers must first provide value, Aarons said, and make money later. Doing so builds the trust and creates the relationship that’s necessary to build an audience. “You want your visitors to search for you, find your message resonating and stick around because you solve problems for them,” he said. “That’s the name of the game.”

New-media marketing strategist Comm agrees. “It’s all about bringing value to the conversation. What do your readers want? If all you think about is making money, that’s putting the cart before the horse. Bring value to your blog first. That’s the only way to make money.”

Carving out a micro-niche

“It’s important to know your niche and to continuously feed a blog or website when the subject is hot,” said Talya Schaeffer, founder of the blog CyberBlackFriday.com, which features online Black Friday sales.

Schaeffer’s research showed Black Friday-related searches begin in September and end right after the event. Schaeffer saw the trend unfold and watched as it intensified in November. “I updated the site frequently with the latest Black Friday deals this holiday season and generated $4,000 between October and November using Google AdSense and affiliate programs with retailer websites,” Schaeffer said.

Frugal-minded web surfers have helped Chelsea Rustrum earn $10,000 to $12,000 a month with her website and blog FreeMania.com.

“My audience is mostly moms between the ages of 25 and 45 who are interested in saving money, trying new products free of charge and printing coupons for items they buy anyway,” she said.

Rustrum publishes FreeMania.com in Santa Cruz, Calif. “I’ve also recently worked out of Florence, Bali and Thailand. I can work anywhere, all I need is my laptop and a stable Internet connection.” She monetizes her blog using Google AdSense, Commission Junction and Hydra Network.

Sending Out Newsletters

Along with blogging three or four times a week, Rustrum also sends out emails to 150,000 subscribers. “My priority at this point is building a community that is engaged and social, which will naturally result in more visitors and more time spent on the site. The more unique, high-value content I can offer, the better.”

Rustrum said that, to be successful, bloggers must figure out what they are good at and what they are passionate about — and then blog about that. You need a clear vision. “Don’t start out with the intent to build a blogging empire,” she said.

“It sounds cliché but I truly believe if you write about something you’re passionate about the people will come. And when the people come, the advertisers will come,” Rustrum said.

As chief executive of SheFinds Media and publisher of SheFinds.com, BrideFinds.com and MomFinds.com, Michelle Madhok has built a web and blogging empire, earning $1.3 million a year.

Madhok started SheFinds.com in her apartment in New York City in 2004 and made about $30,000 a year. She worked 70 hours a week. Her niche worked and traffic and sales increased each year. By 2008, “we were doing about $500K in sales,’’ she said. “This year I’m working 50 hours a week and we’ll gross $1.3 million and get more than 1.2 million visitors to the sites.”

Transparency — it’s the law

Whether earning $1,200 or $1.2 million a year online, today’s bloggers are careful to be transparent about advertising income. There are two reasons for this openness, said Lorrie Thomas, chief executive of the online marketing agency WebMarketingTherapy.com in Santa Barbara, Calif.

The first reason bloggers are open about advertising income, Thomas said, is because most blogging income comes from online ads and links to affiliate advertisers. Thomas said bloggers are open about their advertising stream of revenue because they want to attract even more advertisers. High earning sites attract new advertisers.

The second reason bloggers strive for transparency? In 2009, the Federal Trade Commission updated the FTC Act of 1980 — specifically, the guidelines for consumer endorsements and testimonials. The FTC mandated that bloggers disclose clearly on their sites if they are getting paid in free products, affiliate revenue or online ads. Failure to follow the FTC guidelines could result in a cease-and-desist order.

Marty Orgel is a freelance writer in the San Francisco Bay Area.

Ten Financial Steps

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Ten Financial StepsNo one wants to think about their death, however part of financial planning is to take this scenario into account so that your family is well protected and looked after in case you do die. Financial planning is also important to ensure that your quality of life meets your objectives and that your family has a quality of life that is satisfactory. There are Ten Financial Steps to consider as you plan your financial life.

This is the time of year to put everything in order and complete one of your New Year’s resolutions.

Without a will, what happens to your kids? to your wife? How will they support themselves? What will they do when the bank will not release your assets because there is no will? How will they pay the bills and buy groceries? These are just a few of the reasons why you need to have a will and what can happen if you do not have one. Basically, you need to assume that all of your assets will be frozen until a government bureaucrat decides how your assets should be distributed.

Ten Financial Steps

Your will

When you pass away, your family should look after the funeral or memorial first, however, the will should be consulted in case there are any special circumstances concerning the memorial that are mentioned in the will, but then they’ll have to focus attention on finding a copy of your will. Make sure your will is up to date and make sure your executor knows where to find the executed copy, and knows which lawyer prepared it for you. Having this information available makes their job much easier in an already stressful situation.

Your assets

Your executor will have to gather information on what assets you owned at the time of your death. Prepare a complete list and update it annually. Tell your family who your financial advisers are since they will likely need them for help in dealing with your assets after you are gone.

Funeral costs

Your family will be in a fragile state emotionally when you pass away. It will be difficult for them to negotiate funeral costs at that time. Solve this issue by planning your funeral today or delegating someone who can carry out the family’s wishes. You can even prepay for your funeral if you want. Visit a local funeral home to discuss it.

Bank accounts

If your spouse shares a bank account jointly with you, they will be able to access the cash immediately after you pass away. Joint bank accounts make sense for this reason. Consider making the bank account(s) used for day-to-day expenses joint accounts. Also, ensure that any corporation bank accounts have more than one signing officer so that those accounts can be dealt with efficiently.

Life insurance

Make sure your family knows who your insurance adviser is. Further, make sure at least one insurance adviser knows about every policy you might own, and ask him to keep a record of this information for you.

Government benefits

Three types of benefits may be available to your surviving family members. If you have contributed to the Canada Pension Plan, there will be a death benefit (a one-time payment, to a maximum $2,500), a survivor’s pension (a monthly pension paid to your surviving spouse, averaging about $300, but which can be as high as about $560), and a children’s benefit paid to a surviving child (a monthly benefit of about $215 a month per child under age 18 or up to age 25 while still a student). Your family must apply for these benefits after you have gone.

Registered plans

Any registered retirement savings plans or registered retirement income funds owned by you at the time of your death can generally be transferred on a tax-free basis to a registered plan in your spouse’s name (or to a dependent who is a minor or has a disability). Simplify things for your heirs by reviewing your named beneficiaries on these plans today. Ensure the right people will receive these assets when you are gone.

Employment matters

Your family should call your employer to determine whether there are any amounts owing. Such as salary, vacation pay, or bonuses. They should also inquire as to whether the employer can pay any amounts as a tax-free death benefit. For example, up to $10,000 can be received tax-free where it is considered a death benefit in recognition of an employee’s service. Let your family know who they should contact at your office in the event of your passing.

Your debt

Have you purchased insurance to pay off your debts in the event of your death? If you’re insurable, make life easier for your family by doing this. Term insurance (the cheapest) is just fine. Especially if the debt has a term to it and is expected to be paid off in the future.

Summary of information

Much of the information you will want to provide about assets, contact names, and so on, should be summarized in one document. If you do not have a document template, search for one on the internet. Or ask your lawyer or funeral home if they can provide a document for gathering this information.

New Years Resolutions

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New Years’ is just around the corner and it is time to give some thought regarding what yours will be! Everyone makes  New Year’s resolutions usually associated with losing weight and New Years Resolutionsfinances that are healthy promises easily made and easily broken sometimes the next day. If you are the type that has done this in the past, then this year when you make New Year’s resolutions, write them down and post them somewhere you can see them every day. Remind yourself of these resolutions so you at least think about them every day. You still might not keep them all of the time, but even if you keep them every second day, you are ahead of the game! This is one of the most difficult things that most people face. How do they actually meet their New Years Resolutions? For more ideas, read on!

Motivation to Keep New Years Resolutions

That is of course if you really have the motivation to keep them. Many people just make them so they can say they are making New Year’s resolutions and then forget them the next day. This post is not going to help these people that are not serious at all so don’t waste your time. On the other hand, if you are serious about New Year’s resolutions, then maybe you have a chance of keeping them. Take a moment and read the rest of this post. Even if you pick out one nugget of information that helps you, you are ahead of the game! Pick something that is achievable, that will take some commitment. If you select something that is outside your ability to achieve, you may just get discouraged and quit. Everyone wants to be a winner!

New Years Resolutions – Surveys

According to a Sun Life Financial survey conducted by Ipsos Reid, with the new year quickly approaching, three-quarters of Canadians are resolving to improve something about themselves. Health-based resolutions are by far the most popular with over two-thirds of those making resolutions (74 percent) stating they resolve to either increase exercise or lose weight in 2011. Eating healthier (31 percent) rounded out the top three choices.

However, when it comes to making permanent changes, eight out of ten respondents admit they’ve failed to keep past resolutions with a lack of motivation and willpower (76 percent) identified as the main barrier to maintaining new year lifestyle changes. Thirty-eight percent also cited a lack of money followed by lack of time (35 percent).

So How do You Keep New Years Resolutions?

All resolutions are good ideas and often will improve your overall lifestyle and quality of life regardless of what they are. So we are all off to a good start, however, the easy part is making them and the hard part is to keep them. Talk is cheap!

Select relatively easy resolutions to keep and set stages or milestones that take you in the direction of completing your resolution. This way you will feel that you have achieved something each time you reach a new milestone.  We all need positive feedback and to see progress. This is one way to ensure that you get both.

People who set resolutions that are fun to achieve such as travel or visiting with relatives are easier to keep than others that are more difficult such as losing weight. Chances are you will keep the good ones that are fun and not some of the others unless you make a real effort with a firm plan.

Smoking, Drinking, Saving, Reducing Debt

These are all very difficult resolutions to keep if you are trying to smoke less, drink less, save more and reduce your debt.  Each one requires commitment and a specific plan with dates. Also, objectives if you are going to have any success at all in meeting your goals.

Some people can go cold turkey regarding smoking less or stopping. Most cannot and the relapse rate is pretty high. Other people will gradually cut back until they are hardly smoking at all. They may only smoke at parties or in stressful situations. This is like placing candy in front of a child and telling him not to eat it.

Whatever your plan, select wisely and select goals that you can reasonably achieve. If you would like to leave a comment that will benefit our readers please do so. Comments that help our readers or give ideas are well received and supported by this site.

Tax Saving Opportunities

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Tax Saving OpportunitiesIt’s that time of year again when you still have time to arrange your finances to reduce your income taxes before year-end. There are only a few weeks left before the end of the year for Tax Saving Opportunities. Once Jan 1st rolls around it will be time to begin focusing on the next tax year. Also managing your tax liability. Some tax planning activities apply all year long. While others are more specific to the end of the year in terms of tax management. Talk to your tax accountant to review what steps are needed to minimize your tax commitment for the year.

Tax Saving Opportunities

Consider tax reduction strategies that stem from offsetting capital gains with losses. Also writing off interest expense and other certain year-end activities that must be completed by December 31 in order to realize tax savings in 2010.

Here are five-year end tips that may help Canadian families and individuals in terms of tax planning. You should always discuss your personal situation with your investment or tax adviser before making any decisions. Individual situations can vary widely. The impact of various strategies can have a wide impact as well, both negative as well as positive.

If you are an American, you may also be able to take advantage of some of these considerations. However, you should review your opportunities with a US financial adviser.

Turn losing investments into potential savings

Tax-loss selling is the practice of selling securities that are in an accrued loss position at year-end. Investors do this in order to offset capital gains realized earlier in the year. When tax-loss selling, to guarantee that a trade of public securities is settled in 2019, the trade date must be December 24, 2019, or earlier. This ensures the settlement takes place in 2019. Also that any losses realized are available to the taxpayer this year. Any trade made after December 24, 2019, will not settle until 2020. As a result herefore those losses would not be available until next year.

If you’re hopeful that a losing investment will recover and you’re thinking of buying it back shortly after selling, be wary of the superficial loss rule. A superficial loss occurs when you or you sell an investment to realize the loss. Then buy it back within 30 days after the sale date. The CRA can deny a superficial loss. They can instead add it back to the adjusted cost base (tax cost) of the repurchased security. This means the benefit of the capital loss can only be obtained when the repurchased security is sold again and not repurchased within 30 days.

Turning 71 in 2010, it’s time to convert your RRSP

Canadians with Registered Retirement Savings Plan (RRSP) annuitants who turned 71 in 2019 must convert their RRSPs into either a Registered Retirement Income Fund (RRIF) or a registered annuity on or before December 31, 2019. And if you plan on making any final contributions to your RRSP, you will only have until December 31 to do so as you no longer have the extra sixty-day advantage of delaying until March 1, 2020. If, however, your spouse or partner is under 72, you can continue contributing to a spousal RRSP in his or her name. This assumes you still have contribution room.

Finally, if you’re 71 and don’t have a younger spouse or partner but still have earned income from 2019 that will create RRSP contribution room for 2020. Consider making a deliberate over-contribution in December 2019 before converting to an RRIF. While you will pay a penalty tax of 1% on the over-contribution for the month of December, when the new RRSP room opens up on January 1, 2020, the over-contribution problem disappears.. You can deduct the 2019 contribution in 2020 or a future year.

Contribute to an RESP to generate future savings

If you have a child or grandchild who has never participated as a beneficiary in a Registered Education Savings Plan (RESP) and who turned 15 sometime in 2019, December 31 is your last chance to contribute at least $2,000 to his or her RESP in order to collect the 20% Canada Education Savings Grant (CESG) for 2019 and create eligibility for CESGs in 2020 and 2021. If you miss the deadline, the child or grandchild will not be eligible for any CESGs in the future.

Spread some goodwill by making donations

December 31 is the last day to make a donation and get a tax receipt for 2010. Keep in mind that gifting publicly-traded securities, mutual funds, or segregated funds with accrued capital gains to a registered charity not only entitles you to a tax receipt for the fair market value of the security or fund being donated but eliminates any capital gains tax as well.

Pay off investment expenses and interest

In order for you to deduct any investment-related expenses on your 2019 tax return, the amounts must actually be paid by year-end (December 31).

Such expenses include interest paid on money borrowed for investing. In addition to investment counseling fees for non-registered accounts. Also for professional accounting services for tracking rental or business income and safety deposit box rental fees.

As always, discuss all tax-planning strategies with a financial advisor or tax professional to properly determine your risk and eligibility. There may be other potential tax-savings opportunities depending on your personal situation.

Small Business Tax Savings

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Small Business Tax SavingsPerhaps you are a  small business owner. Your corporate year end coincides with the end of the year. There are some things you can do before year end to save on tax before the new year. Small Business Tax Savings can be an important part of your revenue stream.

Many small business owners find themselves busy wrapping up their fiscal year end by maximizing sales. Making sure that all shipments are on their way before year end. They could be missing out on substantial  tax savings. If they fail to take advantage of  opportunities their company’s income tax commitment could be high.

Small Business Tax Savings

Small business owners have some unique tax-saving strategies they can employ. These strategies should help boost their overall savings for the current tax year.  For example, perhaps you’ve been mulling over the purchase of new business assets. Purchasing these assets prior to the end of your tax year could be the most advantageous time to take action from a tax perspective. Sales tax rebates, additional depreciation claims etc can be maximized if you purchase these things prior to your corporate year end.

Discuss These Issues with Your Accountants

Discuss year-end tax strategies with a financial adviser or tax professional. Many of these activities must be completed by December 31st if this is the end of your company’s tax year in order to realize tax savings.

There are a couple of areas that small business owners can focus on. However based on your specific business situation there may be additional areas that you can take advantage of. Talk to your tax accountant prior to the end of your year end

Now is the time to purchase business assets

If you’re self-employed or a small business owner, you may wish to consider accelerating the purchase of new business equipment. Or office furniture that you may have been planning to purchase in the following year. Under the tax rules, you are generally permitted to deduct, under the “half-year rule,” one half of a full year’s tax depreciation. Even if you bought it on the last day of the year. For 2012, you can then proceed to claim a full year’s depreciation. Check with your tax accountant on the depreciation rules in your country.

For computer equipment purchased before year end, you can write off 100 per cent of the cost in the year of acquisition. With no half-year rule in many cases. These rules will depend on where you live and the local tax rules that are applied.

Rethink year-end compensation

An incorporated business facing an approaching December 31 corporate year-end may wish to revisit the  salary-dividend mix for 2011. It may make more sense for small business owners to pay themselves exclusively through dividends rather than salary in 2012. This precludes them from making an RRSP contribution next year as dividends are not considered “earned income”. They may be better off saving money inside their corporations rather than inside an RRSP.

Talk to your adviser about the potential tax savings advantage dividends may offer over salary. Also about the tax deferral advantage of leaving funds inside the company as opposed to paying them out immediately.

Have your corporation reimburse rewards-paid travel

Some owners use personally-earned credit card rewards points, such as Aeroplan Miles, to travel for business. Have your corporation reimburse you for the value of the travel. Your corporation can deduct the expense and it may be  non-taxable to you personally.

Make sure tax-planning for your business stays a priority all year long. It’s important for small business owners to review these and other strategies with an adviser on a regular basis. Discussing your tax situation with a professional can help you ensure you’re taking advantage of all the available tax minimization strategies.