making money

Money Management from an Early Age Will Pay Dividends

Children whose parents teach them to appreciate the value of money from an early age have a head start in life. If you were asked to do some simple chores to earn your pocket money and perhaps put your loose change in a money box you will grow up understanding that value as well as the concept of saving. These are valuable lessons because money management seems to be decidedly lacking in US society – judging by the level of credit card debt in the country as well as the minority of citizens who have a realistic emergency fund and adequate retirement savings. The Social Security System is under increasing pressure and every adult should look to take action to provide for their senior years if they expect them to be comfortable.

Pay Off Expensive Credit Cards

Debt can be ever present starting from the late teenage years. Most youngsters pursuing an education need financial help to do so in the form of student loans. Student loan rates continually rise, but government loans provide the best rates available on just about any type of debt.

Some students choose to supplement their loans with spending on their newly-obtained credit card. That spending is not a good idea because the interest rate applied to any balances still outstanding at the end of every month is harsh. If only those high interest rates were available for regular investors for their own money!

The point is that credit cards are dangerous and carrying balances is expensive. Those who realize the value of money reject the idea of an expensive credit card and everyone else should get those balances paid off as soon as possible.

Save Money

It is never too early to start saving. Saving towards the future is important. That may be a deposit for real estate, accumulating an emergency fund or beginning the long road to preparing for retirement. It is never too early to do that, and even small amounts can grow quickly thanks to compound interest.

Those who reduce expensive debt and start to save towards retirement will reap the rewards for their common sense. As an illustration, if you put away $100 a month from the age of 25 at 8%, the fund would have reached $60,000 twenty years later. You will need a far greater sum before you retire but if you increase the monthly amount over the years the growth will be impressive. Is $200 a month realistic after you have been working for 10 years? Perhaps even $300 and if you have a 401k plan with an employer who contributes as well you will be doing nicely.

Loss of Years

If you forget about retirement until you get to your forties you have lost the aforementioned potential growth and also have many fewer years to establish your fund before your retirement looms large.

The Social Security system is the savior of many who have not made sufficient provision for retirement. 40% of the population draw benefits at the minimum possible age, 62. Those who can delay taking benefits until the latest date, 70, receive far more. Those who began their preparations for retirement in their 20s can rely on another investment; the growth they get on the eight years when they have deferred their benefits.

If they have managed their money well there are several options for saving even more. Some use real estate as a means of accumulating assets, and the S&P 500 (which is accessible through index mutual funds) offers growth with minimal risk. While the recession damaged some investment progress for the short term, that is no reason not to prioritize paying off debt and saving towards the future.

The recession was a shock but the economy is still strong. With levels of employment rising month on month things have returned. Those that are not spending and saving responsibly are ignoring a valuable piece of advice.

making money

How To Retire With A $1,000,000 Retirement Package Without Plunking Down $1,000,000

That sounds pretty incredible doesn’t it? That’s what I thought too until I met an expert financial planner who was evaluating the affiliate marketing business. Todd Tresidder is a retired hedge fund manager who is now applying his wealth building skills for private clients.

Todd had a great reputation as a hedge fund manager making his rich clients even richer, but in his own words he got tired of “making a few points” for his wealthy clientele so he sold the business and retired…at age 35. After a short time Todd discovered that retirement really didn’t suit him so he became a personal financial coach and opened his own organization.

Million Dollar Retirement
Will you retire as a millionaire?

Todd approached my wife Arlene and I to design a great website for his business and that’s when he took a look at the affiliate marketing model. One day we were talking and Todd said something that really shocked me. He said “You know, a $100 per month in revenue is the equivalent income that is earned from a $30,000 retirement package.”

What’s the real value of your sales?

At first I wasn’t really sure what he meant but he was looking at the business through the eyes of a financial planner not a marketer and he saw an incredible opportunity to build wealth. Let me walk you through how Todd was evaluating affiliate marketing.

  • Todd’s financial planning clients were consistently earning an average of 4% on their retirement packages, packages that they had funded themselves.
  • That 4% represented earnings on the principal…not dipping into the investment fund.
  • The percentage replenished itself every year meaning the principal never lost its value.
  • $100 per month is equal to a 4% return on $30,000.

Now what makes affiliate marketing such an awesome wealth building opportunity? Todd’s clients had to plunk down the $30,000 out of their own money to create the principal. An affiliate marketer simply has to build their business until it reaches $100 in sales per month, no huge investment in principal because affiliate marketing, like the retirement package relies on passive income.

In other words, when you hit $100 you could quit and you would receive $100 per month for the rest of your life because of the automated sales nature of the business. That is pretty cool.

Getting to that $100 mark

Now if you’re new to the business this whole retirement idea may sound nice but right now you’re struggling to get a site that will earn $100 so the whole issue may be moot. But don’t dismiss it. Having the value of passive income is just one more reason to keep at it and continue to build your business.

Now here’s the good news. It is far more difficult to go from $0 per month to $100 than it is to go from $100 to $5,000 or $8,000 or whatever. The reason is rather obvious but many people overlook it because they are experiencing frustration getting started.

It’s not just about picking a niche and a product and building a site. You need to know how to drive targeted traffic, how to build a list, how to develop a strong call to action and all of the rest. Going into the industry you don’t have this knowledge but as you learn and as you gain hands on experience you’ll develop the skill to make it work and when that first $100 month happens you’ll know you have arrived.

When you hit that goal you know you are on the right track and then it’s a matter of rinse and repeat. Once you have the fundamentals mastered the dollars will roll in.

Todd and I both agree that the number one reason that people don’t succeed in affiliate marketing, or any other business for that matter, is they don’t have the persistence required to stay with it until it works. Don’t fall into that trap. The rewards are just too important to give up on.

Now back to your retirement…how much money do you need?

When to retire and how much you will need in the way of income are really personal issues. Lifestyles vary as do retirement objectives. The real challenge for the affiliate marketer is to determine “how much money do I need to retire” to support the way of life that I want.

Todd has written a book titled appropriately enough “How Much Do I Need To Retire” which has helped many of his clients determine their financial planning. Your planning will be less complicated than most thanks to the nature of passive income.

Figure out how much you’ll need to retire and then keep building your business until you reach that monthly goal…then quit. It really can be that simple. For example if you plan on using your affiliate business to fund part of your retirement and you need $2500 per month, build the business until you hit that number.

And check this out. Your neighbor down the street also needs $2500 per month but in order to get it, he or she will have to come up with $1,000,000 to fund their retirement ($2500 equals 3% interest on $1,000,000 divided by 12 months). Now that’s what I call wealth building.

Photo credit: Enkhtuvshin’s 40D...

making money

Women Entrepreneurs Make Strides (Just Not in Technology)

Women entrepreneurs in the United States are making strides – they are out in the world running businesses, moving forward through innovation and staking their claim. This is evidenced in the American Express OPEN state of women-owned businesses report, which examines trends from 1997 to 2011 of the number, employment and revenues of said businesses. American Express published this report in order to highlight strides women are making but also to pinpoint barriers that might be preventing women from achieving their full potential. For women entrepreneurs, something seems to stand in the way of them and technology, as their presence is not as loud as one might expect.

The Numbers

According to the American Express OPEN report, as of 2011 the number of businesses owned by women likely exceeds that of 8.1 million, or around 49%. This number has doubled in the past 14 years. These women are making almost $1.3 trillion in revenue each year and are employing almost 7.7 million people. During the time period of this report, overall business growth was measured at a rate of 34%. But businesses led by women grew at a rate of 50%, meaning that businesses of entrepreneurial women are growing at a rate double than those of men. The report states that overall women-run businesses have experienced substantial growth in the last 14 years, but for some reason they do not fare as well as the businesses grow larger. And despite the fact that many of these numbers are impressive, women-run businesses employ a low percentage of America’s workforce at only 6% and only account for 4% all of all business revenue.

Women in Technology

There is no question that women-run businesses are growing. This is especially so for businesses related to education, administrative and waste services and construction. It’s interesting to also note that the most women-owned businesses are in healthcare and social assistance, education and personal care. But when it comes to technology, you just don’t see many women running the show. In fact, the number is in the low single digits.

In Cynthia Kocialski’s Start-up Entrepreneurs’ Blog (who happens to have a background in the hi-tech industry), she notes that in 1989, 15% of engineering bachelor’s degrees went to women and 39% of science bachelor’s degrees went to women. Now is about the time these women would be ranking high up in companies. According to Forbes’ Top 25 Hottest Tech Stocks, only 13% of senior managers were women and only 1.9% of them had a technical position.

There is one field related to technology where women entrepreneurs have experienced growth – in mobile development. The Huffington Post reported last year that although this field had been previously male dominated, many women are making a name for themselves through the development of iPhone apps.

Men vs. Women Entrepreneurs

What exactly is going on when it comes to women and technology? There are countless hypotheses one could generate about why women entrepreneurs are falling short in the field of technology. Maybe it has to do with differing interests, societal influence or the fact that around the time men are thinking about going big with their ideas, women are more focused on starting a family. Also, men and women certainly differ in characteristics. Men are possibly more prone to taking big risks or talk themselves up more than woman do.

Another possibility is that women are experiencing discrimination and are being held back through no fault of their own. Because we as a society are more accustomed to seeing men involved in technology, we might be more wary of women attempting to enter the field. Women entrepreneurs will just have to keep chugging along, and most likely in the coming years we will see more women-run businesses in technology.