Friday 13 December 2013
FXPAYING Cash System
Tuesday 12 November 2013
Home Based Businesses
List of Franchises
Buying a Franchise
Thursday 7 November 2013
Making Friends and Increasing Business Contacts is Easy If You Know These 7 Secrets of Socially Successful People
We all know people who are beloved by everyone and seem able to make friends wherever they go.
Some regard them with admiration tinged with a bit of envy, then shrug their shoulders and figure those people are just born with that special “something”.
It might be surprising to learn that being popular is a skill that can be learned like any other.
Just as you wouldn’t expect to wake up one morning knowing how to play the piano, the key to success in making friends is setting goals and developing a game plan. Use these seven tips as the framework on which you build your skill set.
1.Be interested, not interesting. A widespread misconception is that popular people are the ones talking about their latest promotion or exciting vacation they took or wild party they attended. Hearing the occasional interesting story is fine, but most people become bored or resentful listening to these blow-by-blow accounts. It’s far more effective to take a genuine interest in the lives of others and get them talking about themselves. And remember that no word sounds as magical as one’s own name. Addressing people by name makes them feel special.
2.Be positive - but not too positive. Think about people you’ve known who expect the worst from everyone and everything and aren’t shy about speaking up. Not much fun to be around, are they? This doesn’t mean you have to be constantly spreading false rays of sunshine. That’s nearly as annoying as eternal pessimism. Have a clear-eyed and honest attitude and people will come to value your opinions as trustworthy.
3.Be charitable to others. Gossiping about friends and co-workers may gain you an audience, but it’s superficial and temporary. Those who indulge their pettier instincts trashing others aren’t the ones you want in your circle. Eventually even those people will realize that you’re just as likely to be talking about them in the same way and they’ll steer clear. It also translates as weakness and insecurity, trying to build yourself up by tearing others down. Take the high road and you’ll be seen as fair-minded.
4.Be helpful and dependable. If someone you know needs assistance that you’re able to provide with a minimum of inconvenience, offer it. The key term here is “minimum of inconvenience”. Doing favors for others that involve more time and trouble than they would for the person themselves comes across as desperation. Giving aid when you’re truly in a position to do so communicates a sincere interest in the welfare of others. As a side note, be sure to follow up on any commitments you make. The damage to your reputation is doubly harsh if people can’t count on your word.
5.Be a “matchmaker”. If you’re heading to the movies with a friend, invite another film-loving pal to come along. Love sports? Assemble a group to attend the big game. Spearhead gatherings at your home or a fun venue such as a wine bar, inviting at least a few people who are new to the group. Keeping your social network interconnected has a circular effect where you’re perceived as having many friends, thereby gaining you even more. Don’t forget your manners during impromptu meetings, either. When out with a friend, many people make the mistake of failing to introduce them to others they may encounter. By doing so you run the risk of coming off as socially inept at best and rude or uncaring at worst.
6.Be your (best) self. Yes, it’s a cliche you’ve heard a million and one times, but ideas become cliches by standing the test of time. Insincerity is a huge turn-off and no matter how great of an actor you are, the pretense will catch up with you. The most attractive people, both physically and mentally, are the ones who are clearly comfortable in their own skin. Accepting and embracing your own unique qualities radiates a healthy confidence that’s magnetic to others.
7.Be self-aware. Periodically step outside yourself to evaluate how you come across to others. Don’t mistake this for being overly concerned with their opinions of you. Taking stock of the image you project shows a healthy respect for yourself as well as for them. Another factor to consider is your body language. You may not even realize that you’re wearing a perpetual frown or creating a stand-offish posture with crossed arms and lack of eye contact. It’s a simple concept, but it can make a big difference with how comfortable people feel around you.
As you work on developing your social skills, keep in mind that these tips center around the saying, “To have a friend, be a friend.” If you let that advice guide your actions, you’ll develop that charisma that makes people want to be around you while also staying true to your own values and principles.
Networking and meeting new people isn't always easy. For more tips be sure to read these 5 Killer "Hacks" For Networking At Events.
40 Ways to Make Money on the Internet
I did a little bookmark scrub this morning and thought I would share the remaining content of my "Online Money" folder. To warn you, there are certain things that I don't like and never bookmark so:
What's NOT included: Taking Paid Surveys, Getting Paid to Surf the Internet, MLM, Contest Sites, "Buy my DVD, CD, Audiobook", etc.
What IS included: Things you can use to legitimately make money online - Everything from Getting Paid to review software to good ole' Adsense.
Infolinks - Infolinks is probably the highest paying option for your in-text advertising. On DLM, you will see underlined links scattered throughout articles. Those are a function of Infolinks and without disclosing too much, it's been a great source of income. Best is that they accept all sizes of websites and blogs. Just sign up and begin.
Build a Niche Store - This is a simple store development platform which enables you to create content based sites that generate income through the eBay affiliate programs. Pretty darn simple and increasingly popular.
Adbrite - Sell space on your site for text ads. This would work like the DLM Marketplace you see on the right of my pages although I chose to manage it myself.
Amazon Affiliate Program - Easily create a store or shopping section on your site instead of sending your visitors to Amazon. Amazon handles the shopping cart and fulfillment.
Amazon Seller - Sell your stuff on Amazon
Associated Content - If you write a story, how-to, rant, how-to cut grass, etc., you can submit it to them and they will pay you $3-$20 per article if they like it.
Yahoo! Merchant Solutions - This is a pretty simple and cheap way to create an online store.
Azoogleads - Another ad program. They do have some decent companies lined up as advertisers. You provide space, they'll provide an ad.
BidVertiser - PPC (pay per click) program with a low $10 payout amount.
Blog - Start a blog and consistently write excellent content. With good ad placement, you may make some money. I detail my process here: Simply Said, How to Blog.
Cafepress- You provide a design, they'll toss it on a T-Shirt, Hat, etc. No upfront costs. Get a free online shop and promote your products on your website.
Chitika - Their eMiniMalls service has shown great results for many Bloggers and site owners. You choose a keyword and they show relevant products on your site using a pretty unique interface.
Clickbank - Quickly becoming my favorite affiliate program. They have thousands of things for you to advertise on your site.
ClicknWork - Get paid $5-$150 per hour for basically doing freelance work on a per-assignment basis. You have to pass a pretty tough test to get in.
Clicksor - These are the guys that generate contextual ads on sites that show up when you hover over a double-underlined word.
Commission Junction - If you have a site, you can join Commission Junction. Once enrolled for free, you can choose companies whose ads are pertinent to your site. Companies have the ultimate say on working with you. There are easily over 1,000 companies to choose from here.
Don't stop reading now. I've got a lot more money making tips.
16 Easy Ways To Slash Unnecessary Spending (and save $12,410 )
How would you feel if you were given a tax-free pay raise of $12,410? I’d imagine you’d be pretty delighted – especially in the current economic climate. OK, so you're not getting that raise, but i am going to tell you how to save $12K over the next 12 months. Trust me, this will be simpler than begging for a raise anyway!
Yes, we're talking about spending cuts. Companies are doing it, schools doing it, and you must admit - the time has come for you to seriously consider cutting some 'extras' from your budget.
So get ready. If you do all of these (and they all won't apply to everyone) you will save $34 per day... that’s $12,410 in a year. (Note that figures are for illustrative purposes and have been rounded to the nearest 50c.)
1.Brown-bag lunch – save $3 per day
Instead of buying your lunch out (and spending $4-$6 for an average sandwich), make sandwiches at home for $1-2 each. Alternatively, take leftovers from last night’s dinner, rather than leaving them to slowly turn to sludge in the fridge before you chuck them away.
2.Go vegetarian – save $2 per day
Try having a vegetarian meal in the evening. The meat you eat at dinner is often more expensive than everything else on your plate: switch to a veggie protein source like quorn, tofu, beans or pulses, and you can easily save $2 or more per person. (A pound of cheap beef is about $3. According to MSN Money, a pound of non-meat protein is typically well under $1.)
3.Switch to store brands / house brands – save $2.50 per day
Are you a brand addict? Do all your food products come emblazoned with logos and company names? Try switching to non-branded goods; you probably won’t even notice the difference. You may even find you prefer them! On a typical weekly shop, you’ll save at least 30% of your usual bill – for an average US household bill of over $3,000 on groceries per year, that’s a saving of about $2.50 per day.
4.Take a thermos – save $3.50 per day
Instead of spending $4 for a latte on the way to work, take a thermos of coffee with you instead. It might cost you $10 for the thermos, but after that, your daily coffee will cost you pennies. You’ll also avoid the line at Starbucks.
5.Leave your gym – save $2 per day
Did you join a gym at the start of January? Are you still on a membership plan from last year? Be honest with yourself about how often you go to the gym. If it’s once a week or less, it’ll almost certainly work out cheaper to pay by the session. And, of course, walking or jogging outside is completely free. The average annual gym membership is $775, so you’ll be saving $2 per day.
6.Don’t buy greetings cards – save 50c per day
The average person buys over 50 greetings cards every year – at an average of $4-$5 per card, that works out to over 50c per day. By making your own cards (save ones you’re sent and cut out motifs, or buy a pack of cheap craft papers), you’ll be spending a few cents instead of a few dollars on each card. If you’re not the crafty type, why not send e-cards instead – they won’t cost you anything, and you’ll be doing your bit for the environment. Check out 123 Greetings for some free e-cards.
7.Bulk-buy non-perishable goods – save $4 per day
Stock up on non-perishable goods when they’re on offer at your local store – or join a warehouse club to get bulk deals. You’ll typically save 30% - 60% on everything, about $4 per day on the average shopping bill. Canned, bottled, dried and frozen groceries will all keep for weeks or months, and cleaning supplies can last for years. Just don’t make the mistake of spending money on something which you’d not otherwise have bought.
8.Switch off the lights and television – save 50c per day
Get yourself – and your family – into the habit of switching off lights and electrical appliances. Not only will you be improving your green credentials, you’ll be saving money on your electric bill. Make sure computers and televisions are turned off rather than left on standby. If you’re leaving your computer for a short period of time, switch off the monitor. Don’t leave rooms lit if you’re not in them.
9.Get your home insulated – save 50c per day
Although you’ll be paying for the initial work, you could easily save 50c per day by making sure that your home’s properly insulated – for the average American home, 50% - 70% of the energy bill is spent on heating and cooling. Don’t let the heat or cool air you’re paying for leak straight out of your roof and walls – keep it inside where you want it!
10.Buy clothes on ebay – save $2.50 per day
The average American family spends over $1,700 on clothes each year - $4.65 per day. Use ebay to look for clothing: you can find new and unworn items there, as well as second-hand bargains. If you like big-name brands like Levi or Nike, you could make big savings by buying on ebay: easily saving 60% or more on many garments.
11.Use your local library – save $2 per day
Instead of buying books and DVDs, use your local library. Books are free to borrow, and DVDs will typically only cost a couple of dollars to rent. If you’d otherwise buy two books (at $10.99 each) and two DVDs (at $29.99), you’d be saving over $2 per day, even allowing for DVD renting costs.
12.Read newspapers online – save $1.50 per day
A typical daily newspaper costs $1.50 – but most newspapers make the bulk of their content freely available online:
USA Today
Wall Street Journal
New York Times
LA Times
New York Daily News
New York Post
Washington Post
Chicago Tribune
Guardian (UK)
The Times (UK)
13.Host a weekly get together – save $4 per day
Many of us have a favorite bar where we hang out with friends. But if you switch your weekly get-together from a bar to someone’s house, you could easily save $30 each in a single night of drinks and dinner: that comes to $4 per day.
14.Car-pool with a neighbour or colleague – save $3 per day
Work out a schedule with a neighbour or colleague so that each of you drives half the time. You could easily end up saving over $1,100 per year - $3 per day.
For example, a person with a 25-miles-per-gallon car who drives 20 miles round-trip five days a week spends about $229 a month to drive alone. That's $2,748 per year. Car pooling with one person who drives half the time could cut costs in half, to $1,374. (Ventura County Star)
15.Buy multipacks of chips/cookies – save 50c per day
Do you always buy a candy bar mid-afternoon? It probably costs $1 from the vending machine – but $2 could get you a multi-pack of six or eight candy bars. You’ll be saving about 50c per day, which soon adds up.
16.Buy from Amazon – and use supersaver delivery – save $1
As most of us know, Amazon.com doesn’t just do books. Laptops, DVDs, kitchen equipment, homeware, exercise gear ... prices on all of these are often cheaper on Amazon than in other stores. (This newspaper report in the UK found that Amazon was the cheapest source of a number of popular goods.) Your savings will vary depending how what you buy, but you could easily save at least $1 per day.
17.Carry a water bottle – save $1 per day
A one liter bottle of water costs about $1. Instead of buying a bottle of water every day, carry your own bottle with you whenever you go out. You can fill it up from drinking fountains or drinking water taps in your workplace – saving $1 per day.
Nine Easy Tricks to Cut Your Spending Today
How often do you resolve to spend less?
And how often do you actually manage that?
We’re constantly faced with opportunities to buy something – as we walk down the street, as we drive past stores, even at work with the vending machine or canteen nearby. And with online shopping, we can buy at any time of the day or night, with just a few mouse-clicks.
If you’re spending more than you want to, though, these are a few simple ways to cut your spending – without having to do any complicated budgeting, and without having to rely on willpower.
1.Write a Grocery List
Simple, yep, but this one trick can make a big difference. If you often find yourself buying groceries that end up being thrown away, or if you get lured in by the cookies or ice-cream, then having a list will help. It also prevents repeated trips to the store to pick up that one thing you forget...
A list lets you buy exactly what you need: no more, no less. It takes just five – ten minutes to write a grocery list, and you’ll easily save that much time in the store.
2.Leave Your Credit Card at Home
If you often find yourself spending more than you should when you’re out shopping, then leave your credit card at home. Take cash, or a debit card: that way, you can only spend what you actually have.
3.Record What You Spend
Just as keeping a food diary helps you lose weight, keeping a spending diary helps you save money. If you have to write down that bottle of cola and candy bar, you’re more likely to resist buying them.
A spending diary will also highlight patterns: any areas where you’re spending more than you realise, and where you might be able to cut down.
4.Try the Store Brands
If you normally buy branded products, try the store’s brand instead, or even a value range. You might be pleasantly surprised – sometimes, there’s little or no difference in quality (the products may even be produced in the same factory, by the same methods, and simply packaged differently).
5.Take a Packed Lunch to Work
It only takes five minutes to make sandwiches in the morning – probably much less time than you spend heading out from work to buy your lunch. A packed lunch will cost you far less than getting food from a store or restaurant – and it’s often better for your health, too.
You can find more tips on packed lunches here.
6.Add Items to a Wishlist
When you’re browsing an online store, add any items that you like to a wishlist – don’t buy them straight away.
As Trent Hamm explains here on The Simple Dollar, adding items to a wish list “takes the edge off of the immediate desire. I can also return to those ‘wish lists’ at a later time and determine if it was a ‘whim of the moment’ desire or something I actually have a use for.”
7.Block Online Shopping Sites
If you’re really struggling to control your online spending, then try blocking any problem sites for your browser. When you really need to make a purchase, you can unblock them – but the extra step involved will help prevent you from going onto those sites “just to browse”.
8.Use Coupon Codes
Any time you’re making an online purchase, search online for “coupon code” plus the name of the product or store. You might not find anything – but you might save 20% or more, with just a few seconds’ work.
Many sites offer regular roundups and emails of coupon codes – try Retail Me Not for starters.
9.Ask “Do I Need This?”
Any time you’re thinking of making a purchase, ask “Do I need this?”
Of course, there’ll be times when you want to buy something that you don’t strictly need – but asking the question can help you to become more self-aware about your purchasing habits. If you’re considering putting money down for something which you don’t need but which you think you want, then give yourself a day or two to mull it over. Often, that initial impulse to buy will just vanish overnight.
30 Easy Ways to Save Money (and No, you are not doing them all!
Let’s keep this one simple and clean - just a bunch of relatively easy ways to save money. As you incorporate more and more of these tips into your life, the savings add up and it wouldn’t surprise me if you could save thousands over the course of a year.
It will take a little work on your part but those thousands of dollars in savings are what helped us get out of debt earlier, kept us out of debt for several years and will hopefully help us pay off our recent auto loan soon as well.
1.Cook at home often: If both the husband and wife work, this is likely to be very difficult. Start out with the habit of cooking at home once a week and slowly increase the frequency until you find a balance between saving money and getting stressed out.
2.Make your own coffee: Everyone seems to have heard of the latte factor. Even though the author may have overestimated the savings from skipping a latte at Starbucks, don’t underestimate the ding it puts in your pocket in the long run. You don’t have to entirely ban drinking coffee, but skip it as often as possible unless you make it at home.
3.Brown bag lunch at least a few days a week: Lunch times are great opportunities to network and make connections that could improve your career growth. So unless there is a common eating area for brown baggers, you may choose to limit brown bagging lunch to three days each week. Find a balance between saving some money and making the connection. In my case, I take my lunch with me 2-3 times a week and eat out the rest of the time.
4.Make a list before going shopping: They call it impulse buying for a reason. Humans simply have a very tough time resisting the temptation to purchase extras while shopping. Without a list you will buy items that you simply do not need. Even worse is when your forget to purchase the actual item you came to the store for in the first place. If you plan on cooking at home, pre-plan a rough menu and make a list before you go grocery shopping. Getting all that you need in one trip can help avoid another unnecessary trip and temptation.
5.Go grocery shopping while you are in a hurry: Maybe you need to go out in a couple of hours. Or your favorite show is going to be on TV after a couple of hours. Try to squeeze in the grocery trip in that intermediate time. Armed with your grocery list, you should be in-and-out very quickly with little time for meandering and getting tempted to buy things you don’t need.
6.Watch out for expiration dates on perishable goods: This one seems intuitive when you read it, but I am surprised at how many people do not pay attention to expiry dates. No point getting a gallon of milk if it is going to turn sour with a couple of days. Same goes for meat, eggs, yogurt, spreads, frozen items, deli/bakery items etc. Some people say you can use a few items a few days after expiry – but I personally value my health more than money and would rather avoid buying such items in the first place.
7.Buy in bulk whenever possible: When it comes to non-perishable items, buy in bulk whenever you find something on sale. The items I usually stock up on are, cereals, tinned goods, rice, beans, pasta, coke, toothpaste, body wash, shampoo, toilet paper etc. For such items, shopping at warehouse stores like Costco, Sam’s Club etc can save you quite a bit of money, provided you stick strictly to your shopping list when you shop at these places.
8.Buy generic products whenever possible: Does it really matter whether your cereal is made by Kellogg's or is the store brand? Does it matter if your milk is Oak Farms or the store brand? For a few things (like soda in particular), I prefer brand name products. For others, I do not mind generic store brands if they can save me money. Find what works for you and switch to generic brands for at least a part of your grocery list.
9.Use grocery store bags to line trash cans: This may not work if you use a massive trash can but we use a small sized one for which the grocery bags are a perfect fit. This not only helps us save some money, but reduces our environmental foot print and avoids the kitchen from stinking from a huge overflowing trash can.
10.Consolidate and pay off debt as soon as possible: If you carry any debt, focus on consolidating it to a lower interest and paying it off as soon as possible. Money paid in interest is money thrown away! Why spend your hard-earned cash to make the financial institutions rich?
11.Pay your bills on time and avoid late fees: Get organized about your regular bills. If possible, automate the payments. Most utilities and other recurring bills can be set to be charged to a credit card or deducted from a checking account these days. Also, many banks offer free bill pay programs. So there really is no excuse for forgetting to pay a bill on time and forking out the late fees. Say, by chance you do forget a bill, if you are a first time offender, call the company and request politely to waive the late fees, and more likely than not, they will oblige.
12.Be aware of your bank balance and avoid over draft fees: If you use your checking account often or have some bills that are paid automatically from your checking account, be aware of the balance and avoid overdraft fees.
13.Avoid ATM fees: Be aware of the ATM withdrawal fees charged by your bank. While some banks waive fees for all ATM transactions on any ATM machine, most don’t. So be sure to use only those ATM machines where your bank will not charge the fees, or withdraw directly at your bank.
14.Avoid credit cards with annual fee: Credit cards with their cash back bonuses and reward points are a great way to save some money. Just make sure that the card does not charge you any annual fees! There is no dearth of cards that offer fee-free reward plans, so there really is no reason to pay the annual fees.
15.Disconnect land line if possible: Unless you have small kids in the house or older people to take care of, it is more than likely that you will be able to survive with only the mobile phones and can get rid of the land line. We have survived without any problems for over 4 years now with out a land line. Our Internet comes via cable.
16.Instead of buying books, borrow books from the library: Whenever possible, borrow your books instead of buying them. The card to your public library is free and the libraries are generally well stocked. In my city, the chain of public libraries is connected and the available books can be checked online. If there is some book that I cannot find in my local branch, I can make a request online for it to be brought in from one of the other branches to mine which is very convenient.
17.If you have to buy books, check if you can buy it used: Used books do not quite give the same feeling as leafing through the crisp pages of a brand new book. But considering that you can get used books for almost as much as half the price of a new book, it is a small price to pay. My favorite place to buy used books is a local chain called “Half Price Book Store”. Check if you have something similar in your city. For text books, look online on bulletin boards, mailing lists etc, and price compare on websites like addall.com.
18.Price check before buying anything expensive: For other items that are expensive, do a price check before buying the item. If you can wait for a while you can track the prices and grab a great deal when it comes along. Frequently available online coupons make it even more easy to save some money. This is especially true while purchasing any electronics.
19.Avoid impulse buying: Make it a habit to avoid impulse buying. Many of the things you want to buy do not seem all that necessary, if you only you wait for a day or two. Also, waiting means you will be able to check prices and make an informed decision to buy it at the best possible price.
20.Bottle your own water: Drinking water is good for your health. I always make it a habit to keep some at my desk at all times. Bottled water is the most convenient since it can provide protection against accidental spills. That said, buy bottled water only once in a while, and then reuse that bottle to fill your own water. If you are not happy with tap water, invest in a Brita Filter – in the long run it can save a lot of money.
21.Avoid the vending machines: Almost everything that is dispensed via vending machines has a huge markup (and is rarely healthy). However, if you suffer from snack attacks at work, consider creating a secret stash of snacks. If you like drinking soda and have a fridge at the workplace, save a refrigerator pack in the fridge with a post-it with your name on it. If you have a long commute, consider a stash for the car as well and avoid a quick drive-thru visit.
22.Keep your car as long as possible: When possible, try to keep your car as long as possible. Find the balance between the money spent on repairs versus the monthly installment on another vehicle and choose to run your old car as long as the repair costs are low.
23.Do regular scheduled maintenance on your vehicles: Do not skimp on or forget to do regular oil changes. Remember to check the air in your tires often. And use the grade of fuel that the owner’s manual recommends. These small acts can significantly lengthen the life of your car, giving you years of use.
24.Avoid buying a new car: When you eventually buy a car, see if you can make do with a pre-owned vehicle. A new car depreciates significantly the moment you drive it out the dealership. Is the new car small really worth thousands of dollars? Pre-owned cars that are only a few years old with low mileage are the best bargains. Regardless of the purchase, learn to negotiate with car dealers.
25.Ride your bike or carpool whenever possible: In many of the cities in the US it is hard to get by without a car. That said, just because you have a car does not mean you have to use it every day. Whenever possible, ride your bike or share a ride with a colleague or spouse and save both on gas and reduce the environmental footprint.
26.If you watch a lot of DVDs, get an online DVD store membership: Membership to online movie stores like Netflix or Blockbuster Online can save you a lot of money compared to buying DVDs or renting it from a local store. You need to wait once you order the movie, but if you watch a lot of movies at home, then you can easily get into the habit of ordering ahead of time so you always have something at home. If you are patient and your library has the resources, check to see if they have a movie section. You won't get anything very new, but they are free.
27.If you like watching movies at the theater, go before 6:00 pm: This is one of our soft spots when it comes to spending. We really like watching movies in the theater with the big screen and the great sound effects. But instead of paying ~$10 a pop for the ticket, we usually go before 6:00pm when the tickets are a little less expensive. Also, for movies that we don’t absolutely want to watch right away, we just wait until it screens on the discount theater where the tickets are $2 a pop. We avoid the temptation to buy snacks, by usually going for a theater some time soon after our lunch or sometimes sneaking in our own snacks in the purse.
28.Regulate your electric use: When not in use, unplug electric appliances. Apparently, unplugging the TV instead of just switching it off can save a lot of electricity! When not in a room, switch off the lights and the fan. Use a programmable thermostat to control your A/C and heater usage. If that's too much, at least know what each appliance uses and unplug a few of them.
29.Plan vacations ahead of time: Vacations are a necessary part of saving our sanity in the busy lives that we lead. But vacations are also a huge drain on the family finances. You can cut the cost of a vacation significantly by planning and booking ahead of time. Bookmark travel sites for finding inexpensive airfare, hotel etc., and book at least two weeks in advance.
30.Finally, keep distance from lavish, high-roller friends: If you have lavish friends who buy a new car every other year (or worse still, lease it), have large screen TVs and every other conceivable electronics gadget, eat out at fancy restaurants every other night and just live way beyond their means, keep the distance. They may be nice people and mean you no harm, but hanging out with such people often can lead to a lot of unnecessary desires and discontent. What’s more important – your friends or your peace of mind?
Whoa, that article ended up being a lot longer than I anticipated. Hopefully, I haven’t put you to sleep! Despite the length though, it barely scratches the surface when it comes to ways to save money. Make it a sub-conscious habit to save money in things that you do every day, even if it is a few dollars. All that money saved can add up significantly and you can save it or spend it on things that really matter!
NOTE: I am not saying that you should follow *all* these tips. Trying to be too frugal can make both you and the people around you very miserable. So, pick out a few tips at a time that will work for you and make them a habit, before deciding if you can incorporate more money saving habits in your daily routine.
Debt-Strangled India Inc. Faces a Year of Reckoning
The road, as they say, was paved with good intentions: In an effort to improve the country’s woeful infrastructure, long seen as a drag on Asia’s third-largest economy, India Inc. has pumped billions of dollars into new power plants, roads, rail lines and airports over the past decade. The investment was largely financed with foreign-denominated debt, a choice that seemed reasonable enough as recently as 2010, when the Indian economy expanded by 9.3 percent in real terms and the rupee remained relatively strong. But it doesn’t seem so reasonable anymore.
India’s economic landscape has changed dramatically in just a few years — the country’s real GDP grew by just 5 percent last year. Over the past three years, the value of the rupee has fallen to historic lows against the dollar, and several of the large corporations that borrowed heavily to finance those much-needed projects are now struggling to pay the interest on that debt.
The hangover from India’s corporate debt binge is only expected to worsen in the coming months as debt burdens continue to climb even as the profitability of conglomerates invested in the country continues to weaken, Credit Suisse warned in a report this month entitled “House of Debt – Revisited.” Total borrowings for 10 large corporate groups, which totaled just 1 billion rupees in 2007, rose six-fold through 2012 and are currently at 6.3 billion rupees in 2013.
In the report, Credit Suisse India analysts Ashish Gupta, Kush Shah and Prashant Kumar reviewed the balance sheets of 10 large corporate groups: Adani Group, Essar Group, GMR Group, GVK, Jaypee Group, JSW Steel, Lanco Infratech, Reliance Anil Dhirubhai Ambani Group, Vedanta Resources and Videocon Industries. The conglomerates are involved in a wide variety of businesses ranging from energy to mining, transportation to engineering. And what they discovered wasn’t pretty.
The analysts found that gross debt levels at the 10 companies had risen by an average of 15 percent over the past year, even as their profitability remained “under pressure” due to the deteriorating economy. GVK, Lanco and ADA each saw their debt levels rise a whopping 24 percent. “For most of the corporate groups, the debt increase even outpaced [that of capital expenditures]. Asset sales – key for de-leveraging for most of these – have still not taken off,” the analysts wrote. “The increasing stress is visible, with some loans of Lanco, JPA and Reliance ADA having already come up for restructuring.”
As companies sink deeper into the red, their interest coverage ratios – a measure of a company’s ability to pay interest on outstanding debt – are declining. Credit Suisse found the aggregate coverage ratio (calculated by dividing earnings before interest and taxes by interest expenses) for the 10 companies had dropped from 1.6 to 1.4 over the past 12 months. The situation is particularly alarming for Essar, GMR, GVK and Lanco, all diversified industrial groups with interests in transportation, energy and mining. Those companies’ ratios have fallen below one, which means they aren’t generating enough cash flow to pay their debt service, let alone use it for other means.
The future promises to be even worse. A large portion of interest costs on already-borrowed monies has been capitalized, which means the conglomerates won’t start expensing it until the relevant project – whether it be a solar power plant, a highway or airport – has commenced construction. “With capitalized interest currently 30-250 percent higher than the P&L expense, the interest burden may also sharply rise as projects come on stream,” the Credit Suisse analysts wrote. Reliance Power, for example, has expensed interest of 5.8 billion rupees ($84 million), but an additional capitalized interest of 14.7 billion rupees ($220 million). With capitalized interest included, the company’s coverage ratio falls from a healthy 2.4 to 0.7.
If that sounds bad, then consider this: Many of these companies borrowed 40-70 percent of their debt in foreign currencies. As the value of the rupee has plummeted, the size of their debt in local terms has ballooned accordingly. So far this year, the value of the rupee has fallen by 25 percent versus the U.S. dollar. Consider Adani Enterprises, a unit of infrastructure giant Adani Group. The increase in that company’s debt liabilities as a result of the rupee’s depreciation in the year to March 2013 exceeded its full-year net profit. “With the rupee down 12 percent since March 2013, the liabilities on account of this must have increased further,” the Credit Suisse analysts cautioned.
Credit Suisse said the 10 companies in the report could face a “year of reckoning” in 2014. Debt repayments will be 30-150 percent higher in fiscal 2014 and repayments due at 2-18 times their fiscal 2013 profits. So it seems quite likely that banks will have little choice but to refinance or restructure at least some of the loans.
All of this makes Credit Suisse wary of the Indian banking sector, which has already seen non-performing loans (NPLs) rise from 2.5 percent to 4 percent of loans as small and medium-sized enterprises struggle to make ends meet in the face of crumbling consumer spending. To this point, non-performing-loans among larger corporate borrowers have remained low. But that’s about to change for the worse. Much worse
Build Wealth by Investing in Property
Investing in property to build your wealth makes sense. Property can be a solid investment that can offer you regular rental income, capital growth and tax benefits. Remember that property is a long term investment and you should be willing to keep it for at least 10 years.
Here are some tips for anyone considering property investment.
Plan well
◾Work out how much you can afford to spend and as well as how much you’re able to borrow. It’s worth getting a loan pre-approval before you go further
◾Be aware of the risks involved in renting – there could be a rise in interest rates, no tenants or a drop in property prices
Your strategy – capital growth vs higher rental
◾Property investment can give you two types of financial returns – capital growth (growth in the value of your property) and rental income.
◾Generally properties in regional areas provide a higher rental return however may not attract as much capital growth over time.
Budget for the extras
◾Be aware of all the costs involved in buying and managing an investment property. Think about building inspections, stamp duty, borrowing costs, legal/conveyancing fees, real estate fees, insurance, body corporate fees, council rates, water rates and land tax.
Choose the right property
◾What and where you buy plays a big part in how successful your investment in property ends up. Find out as much as possible about the areas you are interested in buying in.
◾Tenants generally prefer locations close to public transport, shopping, cafes, parks and schools.
Get the right loan
You need to find a loan with competitive rates and the flexibility you need to manage your investment.
Choose from:
◾Loans with either fixed or variable interest rates
◾Interest only loans which you don’t pay anything off the loan amount itself, you just pay interest
◾Line of Credit which allows you to draw on the equity you have in that property
Tax considerations
There are a few things about owning an investment property that will impact on the tax you pay.
◾Negative Gearing – when the cost of owning your property is more than the money you receive in rent which could lead to possible deductions on the amount of tax you pay
◾Tax Deductions – apply for certain expenses relating to your rental property
◾Capital Gains Tax – a tax you must pay on the ‘profit’ you make when you sell your investment property
It’s worth getting professional advice on any tax considerations.
Manage it well
◾Managing your investment property involves finding tenants, collecting rent and arranging for maintenance and repairs
◾Most people decide to use a real estate agent to manage their investment property
'I got rich at 30 and you can too'
Ways to handle a friend who wants to borrow money from you
“No” is a difficult word to say, especially to a close friend who is asking for money.
Take for instance the case of Supriya Thomas (name changed), a 20 something who works for a Mumbai-based private company. She had lent Rs 40,000 to her room mate. “I had known her for over three years, and we were close friends. She needed Rs 40,000 to get admission in a foreign university. I just could not say no. It was for education after all.” After four years, Thomas has not got back a single rupee, and the friend has relocated to London. They are no longer in touch.
Friends borrowing money is common and everybody would have come across such instances, if not as a prey, as a predator. Firstpost did a quick dip-stick survey to find about how people thought of lending money to a close friend. We found that majority of the respondents were sometime or the other asked by friend to lend money, that too fairly big amounts. In one case, the amount was Rs 8 lakh.
The plan is to merge Future Generali India with L&T General Insurance
Should one even consider lending money to a friend at all?
But, what are the things one should consider before lending to a needy friend? Is there a right way to handle the situation? Should one even consider lending money to a friend at all?
If you go by what psychologists George Loewenstein of Carnegie Mellon University and Linda Dezso of the University of Vienna found in their research, lending money to a friend is not a very good idea. This is because we tend to remember the loans we give, but forget the loans we take. And this phenomenon, where borrowers conveniently forget that they owe money to a friend, is called ‘blind spot’.
But, irrespective of the blind spot phenomenon, when a close friend asks for money, more often than not we are obliged to give, that too without interest after all, we don’t want to spoil our relationship with the friend. But when is it okay to give?
Most respondents we spoke to said they would give money for a medical emergency. While the amount each respondent would give varied, the average amount most were ready to lend for medical emergency was Rs 1 lakh.
“If it’s a genuine need like a medical emergency, you should give, but only an amount you could write off immediately,” said Ranjit Dani, Certified Financial Planner. ”When you write off the amount mentally, even if the money never comes or comes after a while, you don’t lose a friend. In most cases when you lend money, there is a good possibility that you land up not only losing the money but also a friend,” he says.
Suresh Sadagopan, another Mumbai-based Certified Financial Planner agrees. “Lend only what you are willing to write off, spare cash which you won’t be bothered if it wasn’t returned,” he says.
But what if a friend asks money for a lifestyle expense? “Never lend,” says Sadaagopan. “There are people who come saying they are only a lakh short for a new car. If they can’t afford to buy with their own funds, they should not buy it all. In such a case, simply tell them a sob story of your finances. That would work.”
Now, if it is to make the down payment for a home loan? Use your discretion. It would really depend on your comfort level and the relationship you have with the friend. “To lend or not in such a case is entirely your call. But, you absolutely should not agree to guarantee the home loan, under any circumstance,” Sadagopan says. (To know more on guaranteeing loans, read Firstpost articles here.)
If you are lending to start a business or as a seed capital, most respondents said they would not be comfortable charging an interest. Experts we spoke to, however, are of the opinion that when it comes to business loans, it is the best to charge an interest also draft a written agreement. Set payment schedules and take post-dated cheques.
“If possible try to get equity in the business itself, but only if the person knows what he’s doing and has a solid business plan in place,” Dani advises.
Whatever the reason behind lending, you should take care that put will not be in a financial tight spot.
“If a friend asks you for a loan habitually and you realise he’s doing the same with some other friends as well, you should be cautious,” says Rajan Bhonsle, MD, Founder Director of Heart To Heart Counselling Centre.
“There are pathological borrowers out there who get kicks out of borrowing money. It’s like an obsession. And this person might need some professional counselling as well,” he says.
And then there are friends who borrow from multiple people at the same time to fund their need. They borrow from and pay off the another’s debt. “As a rule, never make a fresh loan, unless you’ve recovered what you lent in the first place,” says Sadagopan.
We are not saying that all friends are out there to cheat you. But if you go by what psychologists say, people do tent to forget when they borrow. So, think many times over before you lend. Do not fall for emotions.
Here are five questions for you. Do reply to these in the comment section.
1) Has a friend ever asked you to lend him/her money?
2) What was the maximum amount asked?
3) Assuming a close friend is in need, what’s the maximum amount you would be willing to lend in the following circumstances?
a) in case of an emergency
b) in case your friend is looking to make down payment on his house
c) for a lifestyle need/ going aboard
d) to start a business
4) What’s your view on charging interest on that loan?
5) How soon would you expect to be paid back (in months)?
How to Get Out of Debt
Nick writes with a common question:
I am a college student with $8,000 of debt. What is the first step in paying this off?
Debt elimination involves three steps:
1.Stop acquiring new debt.
2.Establish an emergency fund.
3.Implement a debt snowball.
Here’s how to approach each step. (I’ll use Nick’s situation as an example, but the principles apply to everyone.)
Stop acquiring new debt
(This step can be accomplished in an afternoon.)
This may seem self-evident, but the reason your debt is out of control is that you keep adding to it. Stop using credit. Don’t finance anything. Cut up your credit cards.
That last one can be tough. Don’t make excuses. I don’t care that other personal finance sites say that you shouldn’t cut them up. Destroy them. Stop rationalizing that you need them.
•You don’t need credit cards for a safety net.
•You don’t need credit cards for convenience.
•You don’t need credit cards for cash-back bonuses.
You don’t need credit cards at all. If you’re in debt, credit cards are a trap. They only put you deeper in debt. Later, when your debts are gone and your finances are under control, maybe then you can get a credit card. (I don’t carry a personal credit card. I don’t miss having one.)
After you destroy your cards, halt any recurring payments. If you have a gym membership, cancel it. If you automatically renew your World of Warcraft account, cancel it. Cancel anything that automatically charges your credit card. Stop using credit.
Once you’ve done this, call each credit card company in turn. Do not cancel your credit cards (except for those with a zero balance). Instead, ask for a better deal. Find a low interest credit offer online and use it as a bargaining wedge. Your bank may not agree to match competing offers, but it probably will. It never hurts to ask.
Establish an emergency fund
(This step will probably take several months.)
For some, this is counter-intuitive. Why save before paying off debt? Because if you don’t save first, you’re not going to be able to cope with unexpected expenses. Do not tell yourself that you can keep a credit card for emergencies. Destroy your credit cards; save cash for emergencies.
How much should you save? Ideally, you’d save $1,000 to start. (College students may be able to get by with $500.) This money is for emergencies only. It is not for beer. It is not for shoes. It is not for a Playstation 3. It is to be used when your car dies, or when you break your arm in a touch football game.
Keep this money liquid, but not immediately accessible. Don’t tie your emergency fund to a debit card. Don’t sabotage your efforts by making it easy to spend the money on non-essentials. Consider opening an online savings account. When an emergency arises, you can easily transfer the money to your regular checking account. It’ll be there when you need it, but you won’t be able to spend it spontaneously.
Implement a debt snowball
(This step may require several years.)
After you’ve stopped using credit, and after you’ve saved an emergency fund, then attack your existing debt. Attack it with vigor. Throw whatever you can at it.
Many people say to pay your high interest debts first. There’s no question that this makes the most sense mathematically. But if money were all about math, you wouldn’t have debt in the first place. Money is as much about emotion and psychology as it is about math.
There are at least two approaches to debt elimination. Psychologically, using a debt snowball offers big payoffs, payoffs that can spur you to further debt reduction. Here’s the short version:
1.Order your debts from lowest balance to highest balance.
2.Designate a certain amount of money to pay toward debts each month.
3.Pay the minimum payment on all debts except for the one with the lowest balance.
4.Throw every other penny at the debt with the lowest balance.
5.When that debt is gone, do not alter the monthly amount used to pay debts, but throw all you can at the debt with the next-lowest balance.
I’m a huge fan of the debt snowball. It still takes time to pay off your debts, but you can see results almost immediately.
Supplementary solutions
You can do other things to improve your money situation while you’re working on these three steps.
First, focus on the fundamental personal finance equation: to pay off debt, or to save money, or to accumulate wealth, you must spend less than you earn.
Curb your spending. Re-learn frugal habits. (Frugality is something with which most college students are all too familiar.) You can find some great ideas in the archives of this site. Also check Frugal for Life.
While you work to spend less, do what you can to increase your income. If possible, sell some of the stuff you bought when you got into debt. Get an extra job. (But don’t neglect your studies for the sake of earning more. Your studies are most important.)
Finally, go to your local public library and borrow Dave Ramsey’s The Total Money Makeover. Don’t be put off by the title — this is a fantastic guide to getting out of debt and developing good money habits. I rave about it often, but that’s because it has done so much to help my own personal finances. After you’ve finished, return it and borrow another book about money.
The most important thing is to start now. Don’t start tomorrow. Don’t start next week. Start tackling your debt now. Your older self will thank you.
A primer on the most important economic metric
This is a guest post by Sam, author of Financial Samurai, “How to Engineer Your Layoff,” and founder of the Yakezie Network.
Finance and investing don’t have to be complicated. Consistently buying low and selling high can make you rich beyond your wildest dreams. Of course, if investing were so easy, we would all be kicking back and letting our money work for us instead of slaving away at the office every day.
When I started working on Wall Street in 1999, it felt like I was drinking from a fire hydrant because I was inundated with financial metrics. As a good institutional equities salesman, I should know the latest GDP forecasts to get a grasp of the overall macro momentum of the country. I’d then need to be able to speak eloquently about inflation expectations to differentiate between real and nominal growth. Finally, I’d have to drill down to a stock’s specific sales, operating profit, net profit, and margin assumptions to figure out whether the company was a buy or sell.
After a couple years of what felt like groping in the dark, pretending like I knew more than I really did, I finally found one metric that was more powerful than the rest. By studying this one metric thoroughly, I was able to confidently talk to investment professionals 20 years my senior in a reasonably intelligent manner. I daresay that this one simple metric encapsulates almost everything there is to know about finance.
I’m not going to promise you after reading this series of articles that you will suddenly become an investing guru. What I will say is that hopefully this article will help you see the financial world with anti-glare, polarized lenses. By seeing things more clearly, you can drastically improve your chances of making profitable investments. With more profitable investments, it’s only a matter of time before you achieve your financial goals.
Introducing the 10-year Treasury yield
The 10-year Treasury yield is the yield on a U.S. government Treasury bond. The U.S. government regularly issues Treasury bonds to raise money to help fund the national budget. In case you don’t know, the U.S. budget has been in a massive deficit of $1 trillion-plus for the past five years. Only in 2013 are we actually forecasted to see a deficit below $1 trillion, thanks to economic growth, increased tax receipts and slightly lower spending.
As of August 2013, the largest holders of U.S. Treasuries by country are China, Japan, Brazil, Taiwan, and Switzerland, according to treasury.gov. Foreigners buy U.S. debt as a way to diversify their own investments as well as to recycle the proceeds they receive from their exports to America, such as, Chinese-made toys sold in the U.S.
The 10-year Treasury yield is also known as the risk-free rate. Why? The reason is because the U.S. government is considered the most solvent, credit-worthy country in the world, despite running a massive budget deficit, and in spite of the recent debacle on Capitol Hill. Just ask yourself whether you’d feel better buying a U.S. government bond or a North Korean government bond. Surely you would choose the former.
Part of the reason why U.S. Treasuries are so safe is because the U.S. dollar is a world currency which is also artificially manipulated by America’s ability to print money. There’s virtually no chance the U.S. will default on its debt because, when things get tough, the Treasury department can always print more money to pay off debt. When things get really tough around the world, foreign money buys even more U.S. debt. Without the printing press, faith in the U.S.D and U.S. assets would wane, leading to a massive depreciation of U.S. assets.
Now that we know the sanctity of U.S. Treasuries, we can dissect what goes into the latest 10-year Treasury yield which changes every single trading day.
What the Treasury yield tells us
Some of you might be skeptical about the power of one single metric, but please give me a chance to explain what the latest 10-year U.S. Treasury yield means for your investments and for your personal finances. Let’s run through assumptions based on a 10-year yield at 2.7 percent.
Opportunity cost: Given you can make a 2.7 percent annual return doing nothing with no risk, your investments had better provide a return greater than the risk-free rate of return due to risk. This 2.7 percent return is close to an all-time low — 1.6 percent was the low reached in the fall of 2012. In other words, your hurdle rate is also close to an all-time low, making the alternative — equities — much more attractive than if the risk-free rate was 10 percent.
When the risk-free rate fell below 2 percent, smart money was flooding into equities because the S&P 500 dividend yield alone was over 2 percent. With cheap valuations based on historical levels and a 2 percent market dividend yield, the risk/reward was to the upside for buying stocks and selling bonds at all-time highs. One should generally always look to buy stocks when the stock market dividend yield is greater than the 10-year bond yield. The same thing goes for buying CDs when their yields are higher than Treasury yields as well.
Inflation expectations. Everything is Yin Yang when it comes to finance. Interest rates rise due to the expectation of higher inflation and fall when there is an expectation of low inflation. With a 2.7 percent Treasury yield, we know that U.S. inflation is therefore no greater than 2.7 percent because nobody will buy a bond with a 10-year duration if it provides a negative real rate of return.
To illustrate, let’s say the Consumer Price Index (CPI) is currently at 4 percent. If you buy a 2.7 percent yielding bond, your real return would be negative 1.3 percent (2.7 percent minus 4 percent) a year so long as inflation is at 4 percent! The only reason you would buy a 2.7 percent-yielding bond when inflation is at 4 percent is if you believe inflation will drop below 2.7 percent quickly or may even go negative as in a period of deflation. Deflation is a very difficult economic situation where the expectation of a decline in prices leads to further declines because nobody is willing to buy anything when they can wait for cheaper prices in the near future. Deflation is often feared most by the Federal Reserve, followed by hyper-inflation.
If you understand the 10-year Treasury yield, you have an idea, more or less, of where inflation expectations are at any time in history. In 1990, the 10-year Treasury yield was around 9 percent. That means inflation was running likely between 6 to 9 percent a year. Pretty neat, right?
It’s important to note that there is no inherent bad or good Treasury yield number. If Treasury yields are high, then asset inflation is high, which is good for asset holders and bad for price takers. When Treasury yields are low, asset-light investors are hurting less and should use this time to accumulate more assets.
Next time, I’ll discuss more about what the 10-year Treasury yield tells us and then take it further to explain how this can help you plan your investment decisions. But for the time being, go out and look at what the 10-year U.S. Treasury bond is doing these days and start to get familiar with this metric. Have fun out there!
10 Ways to Grow Your Home Based Business
Small is beautiful.
Slow and steady wins the race.
Inch by inch, row by row, that's the way my garden grows.
While such homespun wisdom might be fine for common folk, it can be awfully frustrating for an ambitious homebased business owner determined to take his company to the next level of growth and profitability. Sure, a thriving one- or two-person service business with no inventory, rent or employees can seem like an easy way to make money at first, but when the phone starts ringing off the hook and customers keep coming back for more, homebased business owners who fail to plan often fall victim to their own success. Either they burn out trying to juggle everything themselves or they spend so much time and money hiring people to help them that their profits go down the drain.
Fortunately, there are some ways to take your homebased business to new heights without sacrificing your business's profitability or losing your peace of mind.
Follow these 10 steps to grow your homebased business into the personal and professional success it was meant to be:
1. Focus on a single product or service, and then market it, sell it, promote it-do everything you can to increase sales of that one product or service. While it's tempting to swing for the fences and try to be all things to all people, it's often less risky and more profitable to pick a product or two that you can execute really well and just try to get on base.
Richard Roy, a Sparta, New Jersey landscaper, started a homebased dog-waste removal business called Dr. Pooper Scooper when he got tired of picking up the dog poop from his customers' lawns. Instead of splurging on a retail storefront or an expensive Yellow Pages ad, Roy decided to use his truck as his primary advertising vehicle. Says Roy, "I decorated the truck as a Dalmatian, used full signage and put magnetic business cards on it. By using the truck as my moving billboard, by joining community groups and through word of mouth, I've turned what was once my nightmare into a thriving business serving 100 customers and making 1,100 pickups a week."
Thanks to Dr. Pooper Scooper's success, Roy is now planning to phase out his landscaping business and focus on his new venture full time. "When I scoop the poop, I do it 12 months a year and never have to fix or replace equipment," Roy says. "It's also three time easier than landscaping, and I can do it until I can't walk anymore."
2. Expand your product line to offer complementary products or services. Once you've hit on a product or service that customers really like, don't miss the opportunity to bring out related items to diversify your product line. Not only does that give your customers a wider selection, but it also makes your products more appealing to retailers who typically like to stock a line of products as opposed to a single item.
Meredith LiePelt, who runs a company called Contemporary Baby out of her home in Dublin, Ohio, started off making colorful burp cloths for newborns. Now she's expanded her line to include such "go along" products as receiving blankets, bibs and gift baskets. Says LiePelt, "Our retail customers have enjoyed having more gift-giving options, and our wholesale clients are able to offer their customers a wider selection to choose from."
3. Find ways to increase sales to your existing customers. It's a lot cheaper than finding new ones. Even if you can't expand your product line, you can boost revenues by selling more of your existing product or service to the clients you already have. One easy way to do this is through volume discounts. Especially if your products cost little to produce, offering your customers the chance to buy, say, two T-shirts for the price of one lets you ring up additional sales without sacrificing much profit. Another common practice is to reward loyal customers by giving them a punch card that entitles them to a free product or service for every 10 items they buy. This technique is common at hair salons, car washes and arts-and-crafts stores, but homebased businesses can use it, too.
4. Hire someone to help you out-an employee, a freelancer, an intern, an independent contractor, even your kids. Not only does this free up cash flow by adjusting your expenses to the level of work you bring in, but it also enables you to cultivate a large network of talented people you probably couldn't afford to hire full time.
Marc Kirschner, a neighborhood directory publisher in New York City, employs 50 to 75 writers-all of whom are freelancers-to develop his directory's content. This way, Marc saves on payroll taxes, medical benefits, employer liability insurance and all the other costs of hiring full-time staffers. There are other benefits, too. "Bringing in outside help gives you someone else to bounce ideas and strategies off of," Kirschner says. "It prevents you from feeling you're going it alone."
5. Create a Web site to advertise your company or sell products online. Thanks to the Internet, it's no longer necessary to open a store to reach retail customers. For marketers of specialty products like rare books, collectibles and gourmet foods, a Web-based boutique lets you reach millions of shoppers around the world without paying for rent, utilities or garbage collection.
And while creating Web sites once required a big investment and the skills of an experienced Web designer or programmer, do-it-yourself Web sites are now available for less than $30 a month with no technical knowledge required. Typically, the companies that help you register your domain name (Web address) will provide online templates you can use to build your site, host your Web pages on their server and provide you with multiple e-mail addresses as well. E-commerce capabilities can often be had for an additional charge. You can also set up low-cost Web sites through Web hosting companies and search engines.
6. Join forces with another business to promote your company. Partnering with a company in a related industry is one of the cheapest and easiest forms of marketing that you can employ. If you make spa products, for example, you may be able to convince a local health club to carry them in its store by offering a discount to its members. Likewise, you can send a free, one-day health club pass to anybody who buys your lotions and scrubs.
Nancy Tamosaitis, a homebased publicist, says her New York firm, Vorticom, has partnered with a graphic design firm to provide creative services such as Web design and brochures to her corporate PR clients. From time to time, she also joins forces with specialty PR firms to assist clients in fashion, finance and other industries. "Now that I'm working from home, my clients receive infinitely better service and results-at much lower cost-than when I managed a $3 million profit center at a top PR agency," Tamosaitis says.
7. Target other markets. If you sell to teens, start marketing to college students. If you sell to working moms, maybe your product will work for stay-at-home moms with a few modifications. Another strategy is to take a retail-oriented product or service and sell it wholesale. For example, a homebased catering business that specializes in cakes, pies and other tasty desserts can contact local bakeries to sell its goods on a wholesale basis. While the price you get from the bakeries will be lower (because the bakeries need to mark it up to their customers to make a profit), you'll sell more products and generate consistent cash flow that you can bank on.
8. Find new and different ways to market your business through e-mail newsletters or by doing guest-speaking gigs or by teaching a class. Marketing your homebased business doesn't need to involve spending big money on newspaper ads, Yellow Pages listings, or TV or radio spots. Grassroots marketing techniques cost far less and are often much more effective. Most chambers of commerce and community groups are more than happy to provide a forum to a local business owner who's willing to share his expertise at no charge. Sending out a weekly newsletter is also a great way to get your name out in front of new and potential clients. Thanks to the Internet, you can send out your newsletter via e-mail using online templates and automated delivery systems.
9. Expand to another location. That could mean renting "virtual" office space in a business center or by sharing office space with another growing business. Brad Taylor, a CPA in Springfield, New Jersey, spends most of his time at home preparing tax returns, developing tax-planning strategies and revising his clients' QuickBooks files. But when he needs to come to New York City for a meeting, he sometimes rents space at a Manhattan business center operated by HQ Global, a national provider of temporary office space.
For a monthly fee or a la cart, business centers like these offer everything from conference rooms and receptionist services to remote-access voicemail, high-speed Internet connectivity and tech support, offering homebased business owners as much or as little outside office services as they need. Taylor pays just $10 an hour to use the space and is able to bill the cost to his client. "While I still want to run my business from home, this has allowed me to pursue new opportunities and network with other professionals," Taylor says.
10. Think about turning your business into a franchise or business opportunity. While most homebased businesses remain small, yours may have the potential to hit the big time through franchising, licensing or wholesale distribution. The key question to ask yourself is if your business can be converted into a business format that somebody else could operate (a franchise) or if you have a standardized product or service that someone could resell multiple times (a business opportunity). While you may think that expanding your business requires raising capital, hiring employees, buying equipment and leasing office or warehouse space, it's often more profitable-and less risky-to license your product to a big corporation with manufacturing capabilities and an existing sales force to do the work for you.
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