Category: Financial

On the face of it, it may seem utterly ludicrous, but PayPal, the San Jose, California based online payment processing company has announced that it wants to be a leader in the nascent field of interplanetary commerce. Indeed, PayPal, which is owned by the Internet’s dominant online auction site eBay has disclosed via press reports that the company is presently working with both the Space Tourism Society and the SETI Institute to develop a new program known as “PayPal Galactic”. According to company officials, PayPal Galactic is intended to be the world’s most trusted solution for managing the problem of making and collecting payments in space.

This is no joke. As PayPal President David Marcus so affirms: “As leaders in online payments, it’s kind of our duty to lead the way on how commerce in space will happen. This is a big problem that needs to be solved.” Mr. Marcus acknowledges that space commerce as we might imagine it is “at least a decade in the future.” Making credit card payments in outer space safe and secure may not be what keeps most people up and night, but it is comforting to know that somebody out there is working on the problem.

Respecting the reader’s need for some background and context as to why this news item should be regarded as plausible, we need to delve a bit into the company history of the Internet’s main payment processing colossus. PayPal as we know it today came about by way of a merger between Confinity Inc. and organization known as X.com. One of X.com’s original co-founders is Mr. Elon Musk. Musk is probably best known for bringing into the world SpaceX (Space Exploration Technologies Corporation) and Tesla Motors. SpaceX is a space transportation company that does real space business. In 2012, the organization became the first for profit-company to send actual cargo into space. One of its rockets was contracted to carry a payload all the way to the International Space Station. Apparently, Mr. Musk’s enthusiasm for space travel knows no bounds, and soon (in perhaps a decade or two) we will have the means to make and accept electronic payments outside of the earth’s orbit.

As preposterous as it may seem to us today, there is a case to be made for making the development of extraterrestrial commerce a reality. Sir Richard Branson, chairman and founder of the Virgin Group started Virgin Galactic in 2004 and gave it a mission to sell tickets to well-to-do space tourists everywhere. At present, Virgin Galactic stands ready to provide suborbital launch service for science missions and orbital launch service for delivery of communications satellites. Branson’s spaceships are real, and they do fly. They are launched from large fixed-wing aircraft rather than from a launch pad. This gives his ships more speed and altitude than ground-launched rockets. If his project becomes a success there is no telling what kinds of things future space travelers will want or need to buy when they take off. It’s not a stretch to believe that firms like Virgin Galactic will discover some way to connect the mobile devices of their passengers to the earth’s existing cell networks. If this happens, then the downloading of digital goods and content in space would indeed be possible and perhaps even profitable.

Wanting to get started on building long-term savings is an admirable goal. If you are able to free up some extra money in your budget to build that savings bigger faster, that’s all the better. Here are 10 tips to free up extra money to boost your savings.

1. Cut down on eating out
If you buy a fast-food or deli lunch every day at work you are probably spending $7 to $8 a day. Taking your lunch each day only costs a couple of dollars a day, leaving you a savings of around $5 a day that you can put toward your savings.

2. Refinance your mortgage
If you own your own home, you might be able to free up extra money by refinancing. If you plan to stay in your home for at least a few years and can get at least a 1 percentage point decline in your mortgage rate, you could significantly reduce your monthly mortgage payments and free up several hundred dollars a year to put toward savings. Use a mortgage calculator and see if you’re leaving money on the table.

3. Inquire about auto insurance discounts
Car insurance is a place you may be able to save some money to boost your savings. Inquire with your insurer about possible discounts you might qualify for, such as a good driver discount, a discount for completing a safe driver class or a multi-car discount. Consider the situation you’re in and make sure that you have the right company as your insurance provider. For example, seniors should look for a good senior auto insurance policy. Some companies specialize in those non-standard situations.

4. Increase your deductibles
Another way you can save extra money to save is to increase your deductibles on car and homeowners or renters insurance. Doing so will reduce your premium costs each month and free up extra money to save.

5. Bundle for discounts
Bundling services can get you discounts you can apply toward your savings. For example, you can bundle your cable TV, Internet and phone services with the same provider, which usually results in a discount of at least 10 to 25 percent. You can also bundle insurance policies.

6. Get a rewards credit card
You can earn 1 percent or more on your credit card purchases that you can put toward your savings. Use the card only for necessities, such as gas and groceries, and make sure to always pay the bill in full and on time every month.

7. Cut your energy costs
If you keep your thermostat a couple of degrees higher than normal in the summer and a couple of degrees lower than normal in the winter, you can save a few extras dollars each month on your heating and cooling bills, which you can put toward your savings.

8. Bike or use public transportation
The less you use your car, the less you have to pay for gas and parking. If your workplace is close enough to bike or walk to, do so whenever you can. If it’s cheaper to take public transportation than drive, do so when you can to save money.

9.Cut your entertainment spending
Stay home a watch a rented movie rather than going out to one. You might also check out free plays and concerts instead of buying tickets.

10. Look at all discretionary spending
Can you find a cheaper gym membership? Do you need all the cable channels your provider offers? Do you have the Cadillac cell phone or Internet plan when the Kia version would do? Combing through your discretionary spending is likely to find you a few extra dollars to save.

Tax laws are large, complicated and forever changing. The 2014 tax year has some notable changes, both good and bad, that will affect a large number of American citizens. Keeping track of these changes is important, because it can have drastic consequences on income tax returns. The following major changes all have to do with federal tax returns.

Health Insurance Tax Changes:

The most notable and drastic change to taxation law for 2014 involves Obamacare and the use of the new health insurance exchange system it implemented. There are two major factors involved. The first is a penalty for not enrolling in an acceptable coverage program. The second is the financial aid that is available to certain lower income individuals to help them afford acceptable coverage.

The Penalty:

Starting in 2014, individuals who do not enroll themselves in an “acceptable” health insurance policy will face a penalty that is collected as a tax at the end of the year. There has been some debate on Capitol Hill about cancelling or extending the deadline on this mandate, but as of February 2014, the mandate still stands. There are certain exemptions for very low income individuals and those who meet certain other conditions. The 2014 penalty is rather small at $95 for the year. That pales in comparison to the thousand or more dollars a year it would take to pay minimum essential insurance premiums. This cost quickly escalates the following years. The planned penalty for 2015 is $325, and the planned penalty skyrockets to $695 in 2016. While these penalties are still lower than the total for monthly premiums, the idea is that most people would rather put their money toward insurance than just hand it over to the government.

Everyone has a three month grace period to enroll, so the penalty will not kick in unless they go more than three months out of the year uninsured. There is a catch, however. Open enrollment for insurance ends the last day of March, so if someone does not enroll by then, they will have to wait until November to enroll, and that will bring them over the three month grace period by default (http://obamacarefacts.com/obamacare-individual-mandate.php).

The Tax Credit:

The reverse of the penalty is the tax credit for enrolling in a qualified policy. Anyone who falls between 100 percent and 400 percent of federal poverty line in annual income will be able to collect the tax credit (http://obamacarefacts.com/federal-poverty-level.php). In most states, those lower than 100 percent will automatically be enrolled in Medicaid and will not be affected. There are, however, multiple states that have opted-out of expanding their coverage, and may fall into a coverage gap.

This tax credit can be provided monthly as a way to lower premium payments, or it can be provided as a lump sum on a person’s tax return. The exact amounts of payment are only final when the income is reported. Any differences between monthly payments and the actual coverage are made up for as tax debt or credit on the return. If someone ends up with a credit, then that can be collected as cash on their return, even if they were on the monthly plan.

Other Tax Changes:

There are a myriad of other, less major, changes. Here are some highlights of previous exemptions that are set to expire.

1. Option to deduct sales tax
2. Option to deduct higher education tuition and fees up to $4,000 for most individuals.
3. Transit pass tax break reduced from $245 to $130.
4. The option to deduct up to $500 for improvements to home energy efficiency.
5. Option for teachers to deduct up to $250 in school or classroom related expenses that they paid out of their own pockets.

The time to set a habit of frugality – of saving – is as early as possible, ideally when you’re in your early to mid-20s. Because of how compound interest works, every dollar you save early in your career is worth more than a dollar saved later in your career. The trick to saving in your twenties is to make the savings process as automatic as possible.

401(k) Investing

If your employer offers a 401(k) program, contribute to it, and have the money taken out of your paycheck. Most 401(k) programs have an employer matching level – typically 4-9% of your salary. What this means is that for every dollar you contribute to the 401(k) up to this threshold, your employer will match it – effectively doubling the investment up to this amount.

The second benefit of a 401(k) is that it comes out of pre-tax income; in most states and professions, this effectively means that every dollar you contribute to a 401(k) only takes 85 to 77 cents out of your paycheck.

The third benefit of a 401(k) is that any interest it accrues is tax-deffered. It doesn’t count as income until you withdraw from the account, and you can withdraw from it at the same time you’re eligible for Social Security Retirement benefits.

The final benefit of a 401(k) is something of a mixed blessing: 401(k) are par t of an investment portfolio – which means they’re at the vagaries of the stock market. It does mean that if you can contribute to a 401(k) when the market is down considerably (as it was in 2008-2009), you’ll see some substantial returns.

By and large, if you can, set your 401(k) as a “set it and forget it.” The longer you let it run without touching it, the happier you’ll be with the end result.

General Savings Plans

Once you’ve got your 401(k), you should figure out your monthly income and try to set your monthly expenses at 90% of that amount – and put the remaining 10% in the bank. One technique that works very well, if your employer offers Direct Deposit, is to split your deposit so that roughly 10% of your expected income is deposited into a savings account and the remaining 90% into your checking account, and try to forget that the savings account is there for a while.

When your savings account has a balance sufficient to support you for three to four months with no income, draw two months worth of income out of it and buy certificates of deposit, or CDs. A CD is like a savings account with a time-lock on it. In return for this time-lock, banks pay higher interest rates on CDs. You can buy CDs with staggered maturation rates; for example, buy your first CDs to mature in 3, 4, 5, and 6 month durations. Each time you have enough money to buy another CD, buy one that will mature one month later than your latest maturing CD. Whenever a CD matures, re-invest it the same way. Eventually, you’ll end up with a pipeline of 36 or 48 CDs, with one maturing every month, and periodically feeding more into it This gives you a greater rates of return than your savings account while still maintaining some fluidity.

When looking to invest, an individual can buy stocks, bonds, or real estate. While the stock market is intimidating to plenty of people, an investor should not worry. Here are four reasons why investing in stocks is an excellent idea.

Quick to start: Let’s face it, if you aren’t rich, you can’t invest in real estate or private companies easily. On the other hand, with stock investing, you can start with a couple of thousand dollars. Then, over time, as your situation improves and you bring in a higher income, you can put more money to work. Brokerages often allow people to open an account with a few hundred dollars, and a wise investor can add money in the future. On the other hand, if you want to buy a house or invest in a local company, you will need to come up with thousands of dollars to start. Therefore, if you are young or just starting out in your financial life, look to stocks, as this asset class is an easy one to get into.

Superior returns: When you want to invest in an asset, you want to see excellent returns over the long haul. If you buy stocks or mutual funds, you will enjoy superior returns against almost every other asset class. While precious metals, real estate and other assets will fluctuate greatly, over the long haul, stocks will rise. If you have a long-term outlook, you can fill your portfolio with quality companies and watch as you enjoy solid returns with little effort. To understand this point further, do the research yourself and you will see that stocks, by far, offer the best returns in the long run.

Easy: If you want to concentrate on life and not on investing, buy stocks. With an online brokerage account, you can purchase stocks or mutual funds from the comfort of your home or office. Then, you can walk away from your investments and let them do their work. This is in stark contrast to other investment vehicles such as property or small businesses. In fact, if you invest in blue chip companies and frequent trading, you will enjoy excellent returns with little effort. On the other hand, if you buy houses and work as a landlord or invest in other assets, you will face an uphill battle every time you deal with an unruly tenant or other issues.

Tax savings: If you open an IRA or contribute to a 401k at work, you will enjoy plenty of tax benefits. Over the long run, taxes take a bite out of your net worth and you need to reduce this by using legal methods. Luckily, if you fund an IRA or put money in your 401k, you can write off the contribution and lower your overall burden. Other times, if you are smart and open a ROTH IRA, you can pay taxes when you contribute money. However, you will enjoy tax-free withdrawals when you retire. Either way you look at the situation, if you want to avoid a massive tax bill, consider investing in the stock market via a retirement account.

While intimidating at first, an investor will enjoy plenty of benefits by putting his or her money to use in the stock market. Remember, stocks offer superior returns for even the average investor.

After graduating from school, many graduates entering the workforce will find that managing their personal finances can be a challenge. While managing your personal finances can be difficult, there are five financial recommendations that all graduates can follow, which will help to ensure they are able to save money and ultimately achieve financial freedom.

Start Saving for Retirement Early
The first financial recommendation to follow is to start saving for retirement early. While retirement can be up to forty years away for graduates, the time it takes to accumulate a lot of assets takes a lot of time. To ensure that you eventually have enough money to comfortably retire, you should start saving as soon as possible. By taking advantage of tax-advantaged retirement accounts, such as 401ks and IRAs, you can save even more money. You should attempt to save at least ten percent of your income and always take advantage of any employer-provided retirement contribution matches.

Build a Safety Net
When you first start working, it could be tempting to buy some personal items and pay off personal debts. However, before doing this you should ensure that you build a safety net. Your safety net should be equal to at least twelve months worth of living expenses. This will then be available to you in the event that you lose your job and have to support yourself without an income.

Pay Down High-Interest Debts
The third recommendation for graduates is to pay down any high-interest debts that they have. Many students end up graduating with a lot of credit card debt. While credit cards could have helped them to get through school, paying off these debts can be tough. Once you have saved up an appropriate safety net, you should next focus on paying off all of your credit card debt. Doing this earlier rather than later will help you to save a lot of money on interest charges over time.

Build a Budget
The fourth recommendation for graduates is to build a personal budget and stick to it. Graduates who are entering the workforce need to learn to stick to a financial plan, which will include setting up a budget for how much money can be spent each month on fixed expense, such as rent and car insurance, as well as discretionary expenses, such as dining out. When building a budget, it is important that it is realistic and includes reserves for saving money, paying down debt, and achieves both short-term and long-term goals.

Invest
The fifth recommendation for graduates is to look for ways to invest. While most graduates may feel that they are already financially strained, graduates should look for ways to invest their money when they can. Graduates should look to invest their money in well-managed and regarded mutual funds and blue-chip stocks. While it can be tempting to invest in more speculative stock investments, the amount of these investments should be limited to a small percentage of your portfolio.

In conclusion, managing personal finances can be a big challenge for recent college graduates. While it can be overwhelming, there are several tips that all graduates can follow, which will make it easier for them to save money and manage their finances.

Your finances are an important part of your life. If you don’t learn to manage your money well, you are destined for financial struggles now and in the future. There is plenty of good advice available so all you have to do is follow it to become more financially secure.

1. Create a Budget

The best way to set up a budget is to tally up all your expenses for the last six months. Once you calculate how much you actually spend, you know what your average monthly expenditures are. With this information, you can create a monthly budget.

2. Reduce Your Debt

The best way to lower your overall debt is to stop buying things on credit, except for large purchases such as a car or home. If you have credit card debt, paying off more than the minimum each month is a good method for reducing your debt and the amount of interest you have to pay.

3. Increase Your Income

While you can ask for a raise at work, many people earn an additional income by moonlighting. If a part-time job is not for you, there are many at home businesses you can start for very little money such as content writing or affiliate marketing. Other possibilities are making and selling crafts or doing odd jobs in the neighborhood.

4. Open a Savings Account

It’s always good to have money in the bank for an emergency. You can set aside a certain percentage of your income each month. Although any amount will do, try for 10 percent or more every month.

5. Handle Credit Wisely

If you have any type of a loan such as mortgage or student loan, you need to pay each bill on time. It is also important to pay your credit card bills on time to establish good credit. If you will be late with a payment, contact the creditor and ask for more time to prevent your account from going to a collection agency.

6. Improve Your Credit Score

Your credit scores are important if you ever want to get a loan. The first step is getting copies of your credit report from the three credit bureaus and checking each file for errors. By disputing errors and getting them corrected, you can raise your credit scores.

7. Plan for Your Retirement

It is important to plan for your retirement. As most people know, they can’t depend on Social Security benefits. If your company doesn’t offer a pension plan, you can set up IRAs (Individual Retirement Accounts) or other retirement plans so that you have an income after you retire.

8. Have Insurance

Insurance protects you from financial loss due to illness or loss or damage of property. Health insurance is a necessity, but life insurance, renter’s insurance, homeowner’s insurance, and car insurance are also important for most people.

9. Make a Will

A will provides for your family after your death. It is a way to distribute your assets and personal property to your heirs.

10. Organize Your Financial Documents

You need to keep all your financial documents in one place for easy access. These documents include tax returns, pay stubs, a copy of your will, insurance policies, and bank and credit card statement. Putting them all in a fireproof storage box for safekeeping is a good idea.

The only way to truly get your financial life in order is to make a commitment to your future. With proper planning, you can weather any financial emergencies while increasing your assets and preventing problems such as a bankruptcy. By following these 10 steps you can stay on track to achieve your financial goals.

You probably already know that remembering to flip the lights when you leave a room can save money in the long run, but what are some other not-so-common techniques that people are using these days to save money? These are 10 ways that people are spending less and saving more.

Get Permanent Makeup

It might sound a little ridiculous, but if you find yourself applying makeup every morning, wearing it throughout the day, wiping it off at night, and waking up the next day only to repeat the process all over again, it may make financial sense to just get permanent makeup. Tattooed eyeliner is rising in popularity as a makeup solution for those who tend to wear it on a regular basis.

Move Your Graduation Date Closer

If you happen to be in school, then you probably know that the longer you stay there, the more it’s going to cost over the long term. If you’re currently at part time status, try moving yourself to full time to reach your graduation date more quickly.

Garden Instead of Buy

Why buy vegetables and fruit when you could simply grow them for much cheaper. What’s even more cost effective is to become a vegetarian and live entirely off of your garden.

Flush Less Often

You may have heard of your grandparents doing this in the “old days,” but as it turns out, granny and gramps were onto something. Flushing only for bowel movements not only saves on electricity, but it dramatically lessens the water bill.

Double Your Recipes for Leftovers

Instead of cooking just enough to fill everyone’s stomachs with nothing left behind, cook in surplus so that you can have leftovers for the next few days. This will save you loads, and it will eliminate the need to have to dig into other groceries.

Detach from Bottled Water

Bottled water seems feasible when it’s marketed properly, but it is possibly one of the biggest wastes of money in grocery and convenience stores to date. Buy a water filter and bottle your own water at home if you can’t seem to shake the “bottled” habit.

Put Away 10 Dollars a Week

It probably wouldn’t hurt either to start putting $10/week away into a shoebox. $10 is an increment that most people can afford, and you probably won’t even notice that you’re saving due to the low commitment level.

Combine Cell Phone Plans with Relatives

If you’ve ever been a part of a family cell phone plan, you probably noticed that everyone saves more when there are more people on the plan. This is why it’s financially wise to bring close and distant relatives all onto the same plan so that everyone can save money.

Learn to Cut Your Family’s Hair

Haircuts are expensive, and this is especially true if you’ve got a large family that constantly needs trimming. Instead of shelling money out seemingly all the time, learn how to give basic haircuts and you could save as much as hundreds if your family is big enough!

Share Internet Subscriptions

Lastly, share internet subscriptions and split the cost between the users. Movie subscription services often allow unlimited users and devices to stream, so why wouldn’t you share this kind of service?

Overall, there are limitless ways to save all around you. Try incorporating a few of these tips into your daily routine to see how much you can save!

There is a lot to think about when you create an investment strategy. While you want to be prepared for long-term goals such as retirement, you want to make sure that you have enough liquidity to weather any short-term dips in the market. What are some of the most important issues to consider when creating your investment strategy?

1) What Is Your Time Horizon?

It is important to understand your time horizon when investing your money. For those who are retiring shortly, you want your money in conservative investments that guarantee a steady income. Investors who are younger may want to invest in aggressive investments that offer larger returns over the long run.

2) What Is Your Risk Tolerance?

Your risk tolerance will help determine where you put your money. Anyone who hates risk may want to look toward bonds and CDs that offer low but guaranteed returns on your investment.

3) How Much Do You Have To Invest?

To invest in a mutual fund, you may need as much as $10,000 to use as an initial investment. If you don’t have a lot of money to invest, you should look at individual stocks or index funds that have a lower investment threshold.

4) Is The Money Going Into A Retirement Account?

If your investment income is going into an IRA or 401k, you can avoid paying any short or long-term capital gains taxes. Investors investing through a private account should consider selling bonds or other securities before they hit their distribution date if you wish to avoid paying taxes on securities that you haven’t yet cashed.

5) Are You Financially Literate?

Financial literacy goes a long way toward determining where your money goes. Those who understand the market can bypass brokers who will levy steep fees to help you manage your money.

6) How Liquid Do You Want To Be?

Those who are looking to get their money back shortly should look to stocks and bonds that can be redeemed on demand. Investments such as CDs and savings bonds are considered to be not liquid because they take years to mature.

7) What Types Of Investments Are You Considering?

Where do you see yourself putting your money? Based on your time horizon you could be better off investing in growth funds that are heavily weighted toward smaller companies with more potential to increase your return. Investors looking to get out of the market quickly may want to consider larger companies that will return a more predictable return on your investment.

8) Who Will Manage Your Money?

Fees paid to a stock broker or fund manager should be considered whenever you make an investment decision. While a 2 percent fee to have someone manage your money may not seem like a lot, it can add up to thousands of dollars in lost money over the life of your investment portfolio.

Investing is never an easy proposition. You need to know your time horizon, your comfort level when it comes to reading the market and your tolerance for risk. Once you figure that out, you can start investing for the long-term without hurting yourself in the short-term.

Trade shows are a great way to gain visibility for your product or service, but you must determine your return on investment (ROI) to determine its worth. Many companies are trying to recycle old trade show booths or update their graphics to increase the revenue gained from trade shows. They could benefit from knowing what is effective to determine how to calculate the ROI. From a participant’s perspective, they need to know which trade shows offer the most “bang for their buck.” When people know how to calculate return on investment (ROI), they will know the best results.

1. Revenue

One way to determine ROI is to determine “net profit divided by sales multiplied by sales divided by sales.” This will help you determine the revenue earned and the ROI from the trade show. The problem with trade shows is that the sales do not roll in immediately from the show. The sales will trickle in months or even a year after the relationships are made. DoubleDutch.me is a company determined to show the metrics behind an event ROI. They developed an application that is capable of measuring event metrics and ROI by giving a deep level of visibility into leads to exhibitors, attendee engagement, sponsor branding in-app and more.

Business owners must be diligent about tracking numbers to get an exact return on investment after the trade show is over. Just be certain to keep up with the leads gathered and any products and services sold at your trade show displays. Keeping up with how many people stopped by can help also.

2. Cost Savings

Determine how much it will cost to gain this number of leads before calculating ROI from the trade show. If pursuing leads at the trade shows is less expensive than pursuing leads through regular means, then you will realize your ROI from the trade shows. Most people appreciate the ability to meet a number of contacts in one location without having to cold call or travel to multiple locations. The cost savings can be tremendous.

3. Customer Relationships

Set goals and determine how many people you want to meet with and reconnect with at your trade show. If you meet or exceed your goals, you will have received your ROI from the event. Always determine what you want to gain in terms of customer relationships from an experience and save time by going directly to their customer display. Call the vendors you want to connect with ahead of time and create awareness of your presence at the trade show so a connection can be made. Then, go directly to the trade show displays until you meet the people you want to meet.

4. Promotions

Offering promotional items can give companies the exposure they need to entice customers to buy from them in the future. The most memorable companies with the best products will always win the prize. Calculate the amount of money spent on the promotional items. Then, compare it to the amount of profit or customer relationships gained from the event when the promotional items were used. If the profit or customer relationships are greater with the use of promotional items than without, then the promotional event was fruitful.

Calculate Your Return on Investment

Your return on investment is the key to the success of your company. Calculate the ROI and determine if a trade show is worth the investment required to host a booth or attend. You will be amazed at the results.