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theliberaltony · 4 years

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via Politics – FiveThirtyEight

Graphics by Jasmine Mithani

Congress is back in session, and it has a weighty task before it — figuring out what to do about the economy as COVID-19 infections spike across the country and states roll back their reopenings. One central point of tension: the $600-per-week supplemental unemployment insurance benefit that was enacted in March as part of the CARES Act and is set to expire on July 31.

Democrats have proposed extending the payment until jobless rates in states fall below a certain threshold. Republicans, meanwhile, are leery of continuing the full payments, saying they will discourage people from returning to work. And it’s true that research has shown that many workers are making more money on the beefed-up benefits than they would be at their old jobs.

But in the latest installment of our regular survey of quantitative macroeconomic economists,1 conducted in partnership with the Initiative on Global Markets at the University of Chicago Booth School of Business, the 33 economists in our study collectively thought there was a 59 percent chance that either keeping the payment steady or increasing it to above $600 per week would be most beneficial to the economy. They said there was about a 33 percent chance that reducing the weekly payment to less than $600 would most benefit the economy, and only a 7 percent chance that letting the program completely lapse would be most beneficial. This makes sense considering that another recent IGM survey found that most economists blamed high unemployment on companies that weren’t hiring — not on people choosing not to work because of unemployment payments.

Jonathan Wright, an economics professor at Johns Hopkins University who has been consulting with FiveThirtyEight on the design of the survey, pointed out that some extension of unemployment insurance is important because many workers are still out of a job. States can continue to offer benefits regardless of what the federal government does, but those don’t last forever, either — and some states are less generous than others.

How should Congress handle unemployment insurance?

Likelihood that each federal policy choice would most benefit the entire economy over the rest of 2020, according to economists

Option Probability Keep the weekly payment at $600 37% Reduce the weekly payment to less than $600 33 Increase the weekly payment to more than $600 22 Allow federal pandemic unemployment insurance to completely lapse 7

The survey of 33 economists was conducted July 17-20.

Source: FIVETHIRTYEIGHT/IGM COVID-19 ECONOMIC SURVEY

Of course, the perspectives on Congress’s response are nuanced, and many of the economists think the benefits should ideally be phased out as the economy improves, assuming there are no logistical hurdles. When we drilled into some of the ways that federal policymakers could aid jobless workers, the experts thought there was a 37 percent chance that the best strategy would be to continue paying jobless workers $600 weekly for now but peg federal unemployment benefits to key economic indicators so they become gradually less generous as the economy improves. They said there was a 26 percent chance it would benefit the economy more if the workers were paid less than $600 per week for a fixed period of time, and a 22 percent probability that it would be better to continue paying jobless workers $600 a week even if it meant some would make more than they did while working.

Deborah Lucas, an economist at MIT, said she would opt for temporarily leaving the weekly payment at $600, or even increasing it a bit, although she said the payments should ramp down if the economy improved enough. “The fact that a considerable number of people are making more this way than when they were working seems like a good thing,” she said, adding that this will only be true for low earners, who might otherwise feel pressure to take jobs that would endanger their health. “In effect, it enhances social insurance protections and is a step towards universal basic income, both policies I think would improve social welfare even in the absence of a pandemic.”

Not all of the economists were a fan of expanding or maintaining the $600 weekly payment, though. Annette Vissing-Jørgensen, an economist at the University of California, Berkeley, said it was fundamentally unfair that some essential workers were making less money than nonessential workers who were out of a job. She added that while she’s concerned overall about making it more financially attractive for workers to stay home from their jobs, particularly if hiring starts to pick up again, there “could be a role for continuing some level of extra benefits” in states that are less generous. Others noted that while the extra payment made sense as a short-term stimulus measure, economists might approach the long-term consequences of such a generous supplement differently.

Still, it was notable that the least popular response to the question above was an alternative to the $600-per-week payment that’s been floated by some Republicans, who have proposed a “back to work bonus” for people who return to their jobs instead of continuing to supplement workers’ unemployment benefits. Economists thought there was only a 16 percent chance this would do the most to benefit the economy.

“Continued unemployment support has the twin benefits of alleviating poverty for jobless workers and sustaining consumer demand in the economy,” said Allan Timmermann, professor of finance and economics at the University of California, San Diego. Timmermann has also been consulting with us on the survey. “[It] is viewed as a highly effective tool to prevent the economy from stalling.”

Along similar lines, we asked economists how they would allocate $1 trillion in a hypothetical COVID-19 stimulus package if they wanted to do the most good for the entire economy (with the assumption that the health crisis itself would be addressed with a separate bill). The economists ranked their top three priorities and gave unemployment insurance the highest share of No. 1 responses. But though that benefit was in the top three of priorities for a majority of the experts, at 67 percent, it didn’t see the highest share of overall top-three responses. By that measure, the clear priority according to economists was funding state and local governments — which is consistent with a previous survey in which they thought one of the most likely causes of economic disaster would be an unwillingness to bail out those governments. In this week’s survey, 85 percent of respondents thought that should be among lawmakers’ top three priorities, and 36 percent said it should be No. 1.

What should be the priorities of a federal stimulus?

Priorities for a hypothetical federal stimulus package in order to have the greatest overall economic benefit, ranked by economists

Share of economists who ranked it as priority … Category No. 1 No. 2 No. 3 In Top 3 State and local governments 36% 21% 27% 85% Jobless workers (via unemployment insurance) 39 15 12 67 Small businesses 6 21 21 48 Public K-12 schools 12 15 18 45 Individuals (via stimulus checks) 3 21 12 36 Health care institutions 0 6 9 15 Other 3 0 0 3 Higher education 0 0 0 0 Large corporations 0 0 0 0

The survey of 33 economists was conducted July 17-20.

Source: FIVETHIRTYEIGHT/IGM COVID-19 ECONOMIC SURVEY

“State and local is going to be a huge drag on the economy because they are a sizable share of spending, cannot really run much in the way of deficits, their tax revenue is badly hit and Congress has done little to help so far,” Wright said. So cushioning states and localities could do a lot to support the economy, he said.

Other areas of focus that frequently came up among the economists’ top three priorities were funding for small businesses (48 percent) and public K-12 schools (45 percent) and another round of individual stimulus checks (36 percent). None of our economists, however, thought funding either large corporations or colleges and other institutions of higher learning was a priority.2

In addition to our usual questions about gross domestic product in the second and fourth quarters, we asked the economists to forecast third-quarter real GDP growth in this installment of the survey. The results shed some light on just how much the prospect of a true “second wave” of coronavirus in the winter could slow down economic growth.

On average, economists thought real GDP in the second quarter of 2020 — which ended June 30, with an advance GDP estimate set to be released later this month — declined by an annualized rate of 27 percent compared with the first quarter. They also thought real GDP would grow by about 8 percentage points quarter-over-quarter in the third quarter, with an upper-bound estimate of 17 percent and little chance of negative growth again. But their forecasts looked bleaker for the fourth quarter, with a median forecast of 3 percent growth, a 90th-percentile forecast of 9 percent and a 10th-percentile forecast in the red again (at -3 percent) — all more pessimistic than in the third quarter.

Some of that reflects the increased economic activity of the summer (relative to the early spring), even with the virus circulating around the country; the likelihood of some kind of third-quarter bounce back was high, given how bad economists think second-quarter GDP will end up. But the forecast also speaks to the uncertain course that the virus — and therefore, the economy — might take over the rest of 2020.

Robert Barbera, an economist at Johns Hopkins University, said part of the problem in forecasting quarterly shifts is that month-to-month change can be so extreme. His forecast for the third quarter was less optimistic because he expected most of the initial bounce back to happen in May and June, which are both part of the second quarter. The third quarter might see an uptick in August and September and look quite a bit better than the second quarter, he said, but that’s partially because the second quarter was so bad. Predicting the fourth quarter is even more difficult — in part because a bounce back in the economy is so dependent on Americans’ willingness to resume ordinary life.

However the course of the recession plays out, our economists think America could be due for a massive wave of personal bankruptcies in the second half of the year. During the first half of 2020, total bankruptcy filings — the vast majority of which were by individuals — were actually down 23 percent relative to the first half of 2019, according to court data from Epiq AACER. But don’t be fooled: That was almost certainly because of the heavy use of grace periods and extensions by creditors, which will eventually expire (if they haven’t already). In our survey, 67 percent of economists thought total filings would increase significantly in the second half of 2020 relative to the second half of 2019; only 6 percent thought they would see the same kind of year-over-year decrease in the second half of 2020 that they saw in the first half.

Taken as a whole, the economic picture painted by this week’s survey is no brighter than in previous installments. The panel’s predictions for future GDP have scarcely budged over the past two weeks, and the experts remain wary that whatever gains the economy is making over the summer could be wiped out by the virus before year’s end. But they also clearly think Congress has a few tools at its disposal to avoid making the recovery harder than it needs to be. The big question is — will policymakers use them?

#IFTTT #Politics – FiveThirtyEight #politics #538 #Neil Paine and Amelia Thomson-DeVeaux

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digital-marketing-expert · 4 years

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Structuring a Playschool Business in India

Taking up play school business is a stance that is gaining popularity among the entrepreneurs of India. The primary reason this venture as a business is gaining popularity is because of its lucrative nature in terms of low investment, even lesser legal compliances and huge outcome. Makoons, a popular chain of playschool franchisee provider quotes an ROI on its franchisee to be 200% in 4 years; such is the outcome of this business. Once settled, this business does not give you the stress like recessions and low impacts.

Analysis of the Market

Indian Pre-School/Childcare Market to Grow at 19% during 2019-2024, Propelled by Rising Women Working Population

The business model has a good cash inflow and potential of seeing substantial growth based on the entrepreneurial drive driving it. The potential of growth in this sector is humongous. Following are a few graphs that will show the potent growth in this business filed. The following graph shows how the return on human capital investment as a function of age is.

Structuring a playschool business in India – Process Chart

But no matter how lucid and easy going business field one might be in, one certainly needs a good business plan to grow aggressively in the market. As it is commonly said, a stagnant business/product is as good as a dead business. Therefore, to start a business too, one needs a good business structure. Here are a few items that are supposed to be in the checklist in starting a playschool business:

Selecting a business model

When one plans to start a playschool business in India, he has two options in hand i.e. either start his own venture or take up a franchise. Both of them have their own set of advantages and disadvantages.

On getting a franchisee, there are certain benefits like there are certainly advantages like:

· There is no requirement of aggressive marketing or campaigning that is taken care of by the brand-name holder.

· The terms set out in the agreement for setting up a business model is easier and has very low investment criteria.

Let us take a look at the top franchisors and the criteria they site

· Required investment for Kidzee Playschool is just Rs. 15 to 20 lakhs and the required floor area is 2500 – 5000 square feet

· The net investment to open a Makoons play school franchise in India is also under Rs. 12 -15 lakhs and the minimum required area is 1500- 2000 square feet.

· A Euro Kids play school is about Rs. 15 lakhs, and the required floor area is a minimum of 3000 square feet.

· One needs a minimum investment of Rs. 6 lakhs to open a Shemrock franchise preschool in India as well as a floor area of 2500 square feet.

· The cost of opening Bachpan franchise is 12-15 lakhs and area required is 2000 square feet.

· The return on Investment assured by this franchise is easy to achieve and are considerably high. The risk factor involved in such franchise business is very less.

· Professional support in terms of setting up the school (pre-defined infrastructure, staff and administration), managing it, getting market recognition etc. are some advantages of having a brand franchise.

Advantages

· One gets to handcraft one’s own business model. One can choose a partner and a scale of business investment of his choice.

· There is a certain degree of freedom as he is not bound by a standard form of agreement.

· He gets to apply his own expertise, entrepreneurial ideas into it and design an innovative venture.

Commercials

One of the important aspects before venturing into legal formalities is to have the commercial structure clear. What could be the source of funds? How much of debt or equity needs to be injected in the business:

Investment Required

1. Land and Building – Ranging from 1500 square feet to 2500 square feet

2. Capital Investment – Ranging from Rs. 8,00,000 to 10, 00,000 (depends on the scale of business.)

3. Furniture like plastic chairs, tables and classroom equipment’s amounting to 40,000- 80,000

4. Play equipment’s like rockers, slide etc. Also book racks, wall hangings and staff furniture needs to be considered

5. Appropriate Human Resources qualified to man the organisation. Minimum wages that need to be paid out is 80 rupees per day. 1 staff per 10 students and 1 teacher per 8 students. A venture like this typically has 30 -50 students large infrastructure can have up to 170 students.

The Return on Investment as quoted from famous franchises is approximately 2 to 3 years depending on the franchise and the scale of the business. Setting up a franchise is easier.

The process is as follows:

· A simple forms needs to be filled in their website.

· They are going to conduct the survey if one meets their criteria to select a favourable location, do the marketing and campaigning.

· You will be able to start a playschool with their guidance at every step.

· There are several portals which provide gateways to apply to these playschool franchises. Like www.startingfranchise.in

· But if the venture is one’s own, then certain factors have to be kept in mind before making an investment in order to reach an ROI. The factors that need to be taken care of are as follows:

· Geography – Parents till the initial stages of the growth of the child do not want to send their children far, therefore it has to be in a residential area with open spaces around. Again depends on the locality.

· Demographic Profile – Once the location is fixed, than one needs to look for the demography of the area. A place with a nuclear family would be more likely to send their children to play school than places with joint family where the child mostly gets its education from elders. Also it is advisable to keep a tap on the type of income group people that live there. It will help set the fee structure.

· Market Survey – Conduct a survey to find out the potential number of students and the preference of the kind of playschool.

Break Even Point

Step 1:

· From the industry standard, let us keep the Break Even Point (where both Fixed Cost and Variable Cost are absorbed) at 1.5 years

· The Fixed Cost is assumed at initial stage as INR 10, 00,000 (FC)

· The Variable Cost is expected to be 4, 00,000 (TVC)

· Also, we set a target to break-even our business in 1.5 years.

Step 2:

· Find out the annual fees that your competitors are charging to estimate your fees.

· Let’s assume that the fees charges would be INR 25,000 per student and the number of students to be X. Therefore the Total Revenue (TR) would be INR25, 000X.

Step 3:

Contribution = TR – TVC

· 25,000X — 4, 00,000.’

Step 4:

· We have kept the break even timeline as 1.5 years. Whatever is earned over and above our variable costs, will be used to cover the fixed expenses. Post that all earnings would be to be profits of the institution

· Divide FC by Contribution to get your breakeven period in years.

· Therefore we get the following equation:

· 700,000 / (25,000X — 400,000) = 1.5.

· The value of X stands as 34.67.

· Thus we need at least 35 students for first 1.5 years to realise all costs.

· Even after the breakeven point, the profit will be INR 4, 75,000.

3. Legal Formalities

In case of playschools, the legal compliances are very minimalistic. Thus the cost of litigation that may arise out of such process is also very less.

1. The Shops and Establishments Act is not applicable

In case of playschools, the Act is silent and one can run your playschool without a registering under Shops and Establishment Act.

Labour laws:

The following labour laws have to be kept in mind:

1. Provident Fund payments – If there are more than 20 employees the organisation has to abide by provident fund rules otherwise may be subject to penal provision under 14B of the Act of 1952.

Checklist of the same could be found at https://unifiedportal-emp.epfindia.gov.in/epfo/

2. The Minimum Wages Act, 1948 – The minimum wages for primary schools is Rs. 80.

3. As per the Payment of Bonus Act, 1965 – If there are more than 20 employees, one needs to pay a 1 month at any time during the year.

Forming the entity:

If you start your own institution, it can be done either as a partnership or as a Section 8 company or even an NGO under a trust. It is usually easier to form a partnership, and cheaper and quick to register. Forming a company can take up to 4 weeks, and costs around Rs. 35000. Be careful with the formation of the partnership deed and the profit sharing.

LLP in India has certain regulations which need to be abided by, according to the LLP Act, 2008 in India. Although the regulations are more than partnership firms but less than floating a company given the ever increasing regulations for companies under Companies Act.

Running it in a residential area:

Most playschools are located in residential areas. The first thing that needs to be looked into is whether the rental agreement permits it. Also, if it is an apartment or consortium or society apartment, the bye-laws of the apartment/association/ society consortium should be looked into for permits to run a playschool. Otherwise, there is no running a playschool in residential premises. Requisite permission has to be taken from the society it is operating in.

It has been decided by Courts in different states that a chartered accountant, yoga teacher and lawyer can carry on their work in residential premises so there is no reason why a playschool cannot be carried on as well, as long as the disturbance to neighbours is minimized.

Maharashtra Preschool Centres (Regulation of Admission) Act of 1996 or Tamil Nadu Private School Education Act:

These Acts provide for compulsory registration of preschools in certain state. Only in a few states, one needs permission from appropriate authority for starting preschool in Maharashtra. It should be education officer of Municipal Corporation who will provide with the certificate. However this is the only state where you need such permission. The procedure is broadly as follows:

· Name the institution. It should not duplicate

· Define your budget.

· Develop a preschool curriculum

Deciding a curriculum

The final step to see the business set up to reach its initial stage is setting up a curriculum for the day school. Most of the franchisee have international affiliations with Early Child Education curriculums which depends upon the type of playschool being formed Children of this age group are mostly very active and require engage in various activities. Their mindset is set to explore, observe and grasp and learn quickly. Their socio economic backgrounds may be different and so shall be their languages thus every child is different in terms of energy and understanding.

There can be different programs based on the age group:

Mother Toddler program for 13 months and 2 years of age: Mother Toddler program again is designed to help mothers understand child’s socialisation needs and help them develop their skills while playing.

Early Childhood Teacher training program (E.C.C)/Nursery teacher training program:

Such programs are aimed towards training students to be ready for pre primary or early school. Theory plus practical courses of 7 months are advisable for this stage.

Day Care center curriculum – It is a different sort of set up. Most of the parents are working and are unable to provide teaching time to their kids. Such parents look for quality preschools where their child could get proper early childhood education.

An ideal playschool curriculum fulfils all the requirements of a child. A typical preschooler’s curriculum includes a good mix of reading, preschool worksheets, writing and math exercises along with colourful fun preschool activities. Such wide scale of activities helps children in learning and developing their skills in all the fields. Children are quite fascinated by playful activities and colourful objects and also appreciate the playful moments. There are professional advisors who can help in developing a good playschool curriculum. It is advised to consult them because it is the first learning stage of the child and should not be dealt with.

For free consultation on starting your preschool call us at 1800 5721 530

#playschool #preschool #earlychildhoodeducation #kindergarten #schoolfranchise #school startup #education #best play #school #franchise

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spoiler2010 · 5 years

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The Wealth Of Nations and 21st Century Socialism

If we were to seriously consider the socialist prerogatives suggested by Alexandria Ocasio-Cortez and her supporters in New York City, we would stand on Adam Smth's Wealth of Nations as a platform in refuting and ridiculing the notion that a capitalist nation such as America could change its historic course as a paradigm of free trade, division of labor and national productivity. Ocasio-Cortez supports progressive policies such as a government-controlled medical industry, tuition-free public college and trade school, federal job guarantees, guaranteed family leave, the abolition of the US Immigration and Customs Enforcement and the privatization of prisons. They would also be a revision of gun control statutes, and an energy policy relying on 100% renewables. She also plans to use Modern Monetary Theory as an economic strategy to provide funding and enable implementation of these goals. In this discussion we shall examine the absurdity of these goals and the historic and economic precedents that condemn these notions to futility.

The arguments against a government-controlled medical industry are overwhelming. For starters we must ask why the best and brightest scholars from around the planet come to America to realize their destinies. In most cases it is not the aesthetics of our modernized nation or its bill of rights. Rather it is the opportunity to be rewarded for their genius and the opportunity to find a rewarding career. A lifetime of contribution in socialist nations such as China and Russia provide little more than improved housing, extended social privileges and exponential material rewards. The State sets ages and rewards according to its need, and anything sought by the applicant exceeding the standard will be arbitrarily rejected by the bureaucracy. Once Cortez's State controls are in place, the engineers, technicians and physicians will head to greener pastures, in all likelihood the European Union or Israel.

Once the American medical industry has become lobotomized, the socialist government will join those at the international auction block seeking the cheapest prices for products and services. No longer will American citizens benefit from state-of-the-art equipment, the world's best facilities or the latest pharmaceutical discoveries or medical treatments. Those who have devoted their lives to research and development will not seek compensation according to a socialist pay scale.

Skeptics will do well to consider the medical industry in Canada or the government-controlled Veterans' Administration in America. Canadian patients find themselves shortchanged by voucher systems, unable to schedule appointments at overbooked facilities, or obtain needed products and supplies at local facilities. American military veterans find themselves in similar predicaments in the majority of cases. Legislation in certain states has provided out-of-network services for veterans that allow them to seek medical aid outside of the government system. Otherwise they find themselves victimized by identical State-run institutions on both sides of the border.

Tuition-free public college and trade school are also a socialist pipe dream. All scholars know that the upper-level paper trail starts with the thesis essay. At this juncture they know that their success is precipitated by their writing skills. On the doctorate level, they are required to submit an essay that is deemed worthy of publication. From thereon, their acceptance as an associate professor at a college or university will require them to publish on a regular basis. Here they realize that their work can earn money on the open market. Only in America can a scholar hope to bring his credentials from his homeland and possibly receive a million-dollar signing bonus.

Obviously every scholar coming to the USA cannot expect a major score just by accepting a position at a major university. Yet he can continue to publish and hope that his dreams will be realized. During that time, his track record at his workplace gives him the authenticity he needs in order to pursue his goals. This allows American colleges to reap the benefits as these unsung innovators await discovery. If these opportunities were not available, these pedants would seek broader horizons. An entry-level socialist wage would never attract the kind of scholar that American colleges do now.

Let us digress to the dawn of man when primitive tribes of neanderthals were bartering as their villages expanded to where their proximity became too close to ignore. A tribal chief bringing a sack of potatoes to the border would expect his counterpart to bring him a bag of carrots of the same size. When a third tribe makes its presence known, they will accept his offering of wheat. Only the day comes when his offer shifts, and this is where socialism fails.

The wheat offerer brings loaves of baked bread, and here is where the discourse changes. We now have the labor cost of the bakers who produced the bread. It is doubtful that the chiefs will reject the offer of bread, so now the bread chief will have the opportunity to name his price. And so it goes. The only option for a socialist system will be for the villages to join together to make the bread as equal a trading option as the produce. The bread chief would be a fool to agree. And only by violence could he be forced to submit.

As Adam Smith pontificates, there is no point where a sovereign body will acquiesce to their detriment. They will demand reciprocation for their contribution. Paradoxically, this is the opposite of what America has done since the turn of the century. We have given excruciatingly more in building empires and propagating democracy than any nation in history. The only reciprocations have been political: we expect our allies to vote our way at the United Nations and provide access to trade routes or staging areas for military operations. Only we have gotten less and less in return over the decades. Finally Donald Trump has come to collect some old debts. Cortez wishes to maintain the status quo for everyone but Americans.

Federal job guarantees will do nothing more than assure Americans of greater sub-standard government agency service than ever. Since the end of World War II, Federal and State agencies have been increasingly filled by those seeking job security and, in many cases, permanency. It has long been a standard maxim that, once acquiring a government job, one is set for life. The benefits are guaranteed for as long as the government exists. The starting pay is competitive; however, the annual raises leave much to be desired. As a result, most move on to the private sector in time. Those who remain do so for lasting job stability.

This results in an overabundance of workers unable or unwilling to achieve higher stations in life. Added to such ranks are unemployed workers conveyed directly into the application process. Many have failed in previous endeavors and were expecting to receive benefits before being siphoned back into the workforce. In both cases, their attitudes are reflected in their level of customer service. Most citizens needing government assistance will minimize their contact with such personnel, leading to a lighter burden for the agencies to bear.

This endemic philosophy of the bureaucracy has plagued the greater socialist nations such as Russia and China. Their citizens grow desperate in seeking government assistance only to find little or none forthcoming. It is little wonder why the black market thrives in such conditions, or unlicensed providers are able to flourish. We can also invoke Adam Smith's principles in citing the need for overachievement in the private sector. An enterprise that does not seek to compete or improve the quality of its products or services is doomed to failure. Workers who have no tangible interest in the success or failure of their employer soon become disenthused. Soon they grow mechanical in satisfactorily completing their daily assignments. If Americans are dissatisfied with government bureaucracy at this point, under Cortez it may well become far worse.

Guaranteed family leave is a Pandora's Box that, included with socialist policies including pro-choice agendas, might well result in profligation by way of the most sinister of ulterior motives. It is well known that socialists in the US are advocating the most extreme policies, including the abortion option at any point up to the time of delivery. This disregard for the sanctity of human life is further reflected by discussion as to whether or not a mother and her physician could agree to withhold life sustaining treatment. In essence, this means leaving the newborn alone to die. This can be legitimized by any possibility of risk to the mother's health, either physical or mental. A woman fearing post-partum depression can exercise the right at will.

We cannot rule out the possibility of recipients taking advantage of this system. A female could well plan a pregnancy to be termed in advance, filing a claim for paid leave of absence. Most doctors will agree to recommend extended time off for the patient to recuperate. This conveniently allows one to carry the fetus up to a planned time, in which they can have the abortion before taking leave.

The abolition of the US Immigration and Customs Enforcement seems to be in conjunction with the New World Order's objective of establishing a globalist system. Without a Federal enforcement agency in place to prosecute immigration law offenders, it overburdens an already overwhelmed bureaucracy. In essence, it creates a porous border system that has already been proven relatively ineffective in preventing the ongoing alien invasion. Repeat offenders routinely include drug smugglers, human traffickers and career criminals. According to Adam Smith, our inability to protect our workers and our industries of these hazards will inevitably result in unsustainable loss.

One of the greatest dilemmas facing agriculturalists is that of illegal immigration. For over a half century, farmers have been able to employ undocumented workers en masse to meet market demand and lower their operating costs. One factor is the reluctance of Americans to accept arduous labor jobs for minimum wage. Another is the economy of paying workers off the books in cash for a set price. Most workers are glad to receive enough cash to provide for their families, and the employer is relieved of having to comply with legal obligation. If the socialists succeed in disrupting the system, it may prove disastrous to the entire agriculture industry.

What Cortez and her associates fail to realize is one of Adam Smith's basic concepts. The merchant must always factor in his overhead costs in order to generate a reasonable market price. The labor costs, material costs and all other opportunity costs are taken into consideration. When the merchant is able to compete on the open market, it is reasonable to assume that his costs and prices are similar to those of his competitors. If his prices exceed those on the market, his options are extremely limited. He may find a remote area free of competition. He may rely on his reputation and customer allegiance for a short time. Other than that, he may well be forced out of business.

When the floodgates are open and aliens are granted citizenship status, they will be able to rely on equal opportunity laws to improve their wages. This will force agriculturalists into compliance, greatly increasing their labor costs. This would result in a reciprocal increase in prices, which is eventually passed on to consumers. If the farmer experiences a 25% rise in overhead, the cost of a basket of peppers may go from a dollar to $1.25. This may cause griping but little ado among customers. However, when the cost of a gallon of milk goes from $3 to $4, there will be wailing and gnashing of teeth across America.

Needless to say, it will be impossible for merchants to provide health insurance for field workers. This places an incalculable strain on the government-controlled health insurance system being promoted by Cortez. Millions of aliens may well apply within the first year of a socialist takeover. The impact on lower-class families depending on health care might well be catastrophic.

Regardless of the health care scenario, the spike in agricultural costs would have a ripple effect across the American economy. A rise in crop prices would create a surge in the livestock industry. Although cattle ranchers would not be immediately affected, the cost of pork and poultry would escalate along with the cost of feeding the animals. Even the fuel industry would feel the pinch as the increasing use of ethanol would be affected by a sharp rise in corn prices.

Abolishing the use of privatized prisons would have a seismic effect on the government budget as well. It is estimated that nearly 15% of US prisons are privatized, representing a 50% increase since the turn of the century. The number of unemployed workers would be the least of Cortez' problems. Of greater concern would be the number of prisoners that would be injected into the Federal and State penal systems. A recent estimate shows as many as 125,000 inmates would be displaced.

The immediate problem would be the overcrowding effect as the prisoners are redistributed to facilities across the country. Most penologists would concur that overcrowding is one of the main contributing factors to prison violence. The quick fix solution offered by leftist State administrations over the decades has been an early release for inmates to reduce the prison population. Often this has been granted to violent felons who have demonstrated a pattern of good behavior. If this policy was extended to those showing borderline behavior, the possible consequences of releasing recividists could be grievous at best.

The revision of gun control statutes would pose a significant challenge to citizens' Constitutional rights. In cities such as Chicago and New York where regulations are among the strictest, it has been said that the only ones bearing arms are the cops and the criminals. For decades NYC had a law that provided for residents to possess rifles in their homes. The thought of a person having to bring a rifle to bear in the event of a home invasion is as comedic as it is pathetic. Gun permits are available, but the requirements are so stringent and the process so tedious that few even bother to apply. The bottom line is that the socialists want to remove as many firearms from citizens' possession as possible.

What is perceived as ambiguity in the Second Amendment has been debated by pro-gun and anti-gun activists for decades. It seems inconceivable that no amendment has been made or a ruling by the Supreme Court to clarify the law. The Second Amendment of the United States Constitution reads: "A well regulated militia, being necessary to the security of a free State, the right of the people to keep and bear arms shall not be infringed." Polemicists have been dissecting this poorly-worded sentence for over a century. To most, it seems clear that 'the right of the people to keep and bear arms shall not be infringed'. To others, the 'well-regulated militia' is the key phrase, providing for those active in the militia to be scrutinized by authorities.

Therein lies the conundrum. For National Rifle Association advocates, the right of all citizens to bear arms is inalienable. For anti-gun lobbyists, 'regulation' opens the door for arbitrary restrictions as determined by State (and eventually Federal) governments. Convicted felons and mental defectives have already been prohibited from owning firearms in many states. If the socialists ever seize power, there will assuredly be more categories and situations to follow.

When we view this from Adam Smith's perspective on a microcosmic scale, we see the inherent risks and perils with the socialist line of thinking. If a merchant, or a community of merchants, is subject to robbery and burglary that threatens his merchandise, his lives or property, there is an obligation by one and all to resist the predatory force. In the case of the American colonies being victimized by authorities, the option to resist becomes a matter of survival. It is hard to imagine Adam Smith standing alongside socialists in restricting the rights of merchants to defend their property.

This brings us back to a previous argument concerning socialists' position on open borders. Ranchers along the southern border have dealt with rampant trespassing issues as aliens have violated their perimeters and crossed their property. For these citizens, they may well have their lives and those of their family and their animals placed at risk by Cortez socialists. Do we doubt that traffickers facing lengthy jail time (until further alterations are made by Cortez) would not use deadly force to avoid capture? If these criminals sought to use private property as a shortcut to their inland destinations, the land would be repeatedly violated with no chance by the homeowner to interfere. They might reach out to ICE, but under Cortez, that option would no longer exist.

The energy policy relying on 100% renewables is something Adam Smith could not foresee. One of the major battlegrounds is West Virginia, where an area the size of Manhattan is being cleared for a solar energy plant. Thousands of acres of woodland are being chopped down to make room for this project. The elimination of refuge for wildlife is the least of the socialists' concerns. They feel it will create a milestone for other states on their path to clean energy. As for West Virginians, they are already being impacted by the streams and other bodies of water that are being polluted, diverted or dried up. Once the actual construction begins, they can only expect things to worsen. We know of the nihilistic maxim: one must destroy in order to create. Adam Smith would ask: what is it that the State has the right to destroy at the expense of society?

The bottom line as regards Cortez's Modern Monetary Theory is simple. The State's budget is dictated by the amount it invests in the public sector as opposed to the money it receives by means of taxation. If it spends more than it taxes, there is a deficit as is common for Republican administrations. This indicates that more money has gone to bank accounts in the private sector than to the Treasury. If it taxes more than it spends, a surplus is created. This is common among Democratic administrations as we last saw under the Clinton regime. Cortez has already announced plans to increase taxes in her New York dominion up to 70%. This may work well for NYC millionaires, of which only a small percentage of their income is taxable. But what of the rest of America that may disagree with socialist policy. Adam Smith may point to a quote from the American Revolution: taxation without representation is tyranny.

In summation, history shows that a socialist government had never achieved a noteworthy stage of security and solvency. If millenials and illegal voters are able to carry Cortez down that slope, Christian Americans will be the ones to blame for the consequences. Let us hope that the Moral Majority will be able to save the day. Otherwise, Wealth Of Nations by Adam Smith may, like the Bible, be another prophetic book we chose to ignore.

#American politics democratic socialism #alexandria ocasio-cortez #adam smith wealth of nations #christian america

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georgewagner · 4 years

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Winter Economy Plan: The latest coronavirus government support for tradespeople

In the latest Winter Economy Plan, the government has included measures to support UK businesses that are facing decreased demand or are legally required to close their premises, due to the coronavirus (or COVID-19) pandemic. We’ve summarised the initiatives available for small and medium-sized (SME) trades businesses below.

Self-Employment Income Support Scheme (SEISS) extension

What is it?

The government has extended the SEISS, which was due to end in November 2020. The SEISS now includes two more direct cash grants.

The first grant will cover 40% of your average monthly trading profits, capped at £3,750 in total. It’ll be paid as a single instalment, covering the three-month period from November 2020 to the end of January 2021. The second grant will also cover a three-month period, from the start of February to the end of April 2021. The government is set to release more information soon about how much the second grant will be.

Both grants are taxable income and are subject to National Insurance contributions.

Who’s eligible?

Anyone who’s self-employed, or a member of a partnership, that:

Was previously eligible for the SEISS. However, you don’t need to have actually claimed it. The SEISS eligibility criteria is:

A trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.

You must have traded in the 2018-19 tax year and submitted your Self-Assessment tax return for that year, on or before 23rd April 2020.

You must have traded in the 2019-20 tax year.

You must intend to continue trading in the 2020-12 tax year.

More than half of your income during 2018-19, 2019-20 and 2020-21 tax years must have come from self-employment.

Declares that they intend to continue to trade moving forward, and:

Is actively trading but is impacted by reduced demand due to coronavirus, or

Was previously trading but is temporarily unable to do so due to coronavirus.

If you trade through a limited company or trust, then you won’t be eligible for the SEISS extension.

How can I access it?

Applications aren’t open yet. HMRC will provide more guidance soon – we’ll keep this article up to date.

Bounce Back Loan Scheme extension

What is it?

The government has introduced a new Pay As You Grow option, to allow all businesses that used the scheme to repay their loan over a period of up to 10 years, instead of the 6 years initially offered. This will cut average monthly repayments by almost half.

The extension also allows businesses to temporarily move to interest-only payments for periods of up to six months, up to three times. Repayments can also be paused entirely for up to six months, but only once and only after you’ve made six payments.

If you haven’t applied for a Bounce Back Loan yet, then the application deadline has been extended until Monday 30th November 2020. The Bounce Back Loan offers SMEs that are negatively affected by coronavirus a loan of £2,000 to £50,000, capped at 25% of their total turnover. This will be based on the calendar year 2019, or new businesses can estimate.

No repayments need to be made for the first 12 months of the loan, and the government will cover the first 12 months’ interest payments. After 12 months, you’ll be charged a fixed 2.5% annual interest. You can read more details about the scheme on our Trade Advice Centre.

Who’s eligible?

UK businesses established before 1st March 2020, that are currently trading and have been negatively affected by coronavirus. Banks, insurers, reinsurers, public-sector bodies, further education establishments that are grant-funded and state-funded primary and secondary schools are excluded.

Your business must not have been ‘undertaking in difficulty’ on 31st December 2019. Also, if you’ve already secured a loan under the Coronavirus Business Interruption Loan Scheme, then you won’t be eligible. However, you can speak to your lender if you’d like to transfer a Coronavirus Business Interruption Loan of up to £50,000 into the Bounce Back Loan Scheme. This option is available until the end of November 2020.

How can I access it?

Applications are currently open until 30th November 2020. Fill in the online form on the British Business Bank website to apply.

Coronavirus Business Interruption Loan Scheme deadline extension

What is it?

A loan of up to £5 million. The government has extended the repayment term to 10 years as part of the Winter Economy Plan, to help businesses that may be otherwise unable to repay their loan. The first 12 months of interest payments and fees are also covered by the government.

A successor loan guarantees programme is also being set up to start in January 2021.

Who’s eligible?

UK-based businesses with an annual turnover of less than £45 million. You must also:

Have a borrowing proposal that the lender would consider practical, if not for the coronavirus pandemic.

Self-certify that you’ve been adversely affected by COVID-19.

Not be classed as a ‘business in difficulty’, if you’re applying to borrow £30,000 or more.

How can I access it?

Applications have been extended to 30th November 2020. To apply, visit the British Business Bank website.

New Payment Scheme for VAT deferrals

What is it?

Businesses which deferred their VAT due between March and June 2020 now have the option to spread their payments into 11 equal instalments over the 2021-22 financial year. This replaces the original deadline of the end of March 2021.

Who’s eligible?

All businesses that used the VAT deferral option.

How can I access it?

You’ll need to opt-in to the New Payment Scheme once it’s put in place in early 2021. We’ll share more information on how to do this once HMRC releases more details.

Enhanced Time to Pay service for Self-Assessment taxpayers

What is it?

A further deferral for Self-Assessment tax bills that were due on 31st July 2020, and those due in January 2021. This means that these Self-Assessment tax bills won’t need to be paid until 31st January 2022. There’s no penalty for using this service.

Who’s eligible?

Anyone that’s self-employed.

How can I access it?

Use HMRC’s Time to Pay service to secure a payment plan.

Job Support Scheme

What is it?

Replacing the Coronavirus Job Retention Scheme (also known as furlough) which is running from June to December 2020, the Job Support Scheme will be a government grant to help employers pay the full wages of employees that are working shorter hours. The scheme will begin in December 2020.

For each hour that an employee isn’t able to work, the employer and the government will each pay one third of the employee’s usual pay. The government contribution is capped at £697.92. So, the employee will get at least 77% of their pay, if the government cap isn’t reached.

You can claim both the Job Support Scheme and the Jobs Retention Bonus, which you can read more about in our Coronavirus: government support for construction businesses blog post.

Who’s eligible?

All SMEs are eligible for the Job Support Scheme.

To be eligible, employees must:

Be working at least 33% of their usual hours.

Not be on a redundancy notice.

As an employer, you must:

Have a UK bank account.

Have a UK PAYE scheme.

How can I access it?

The employer will be reimbursed in arrears for the government’s contribution. Further information on how to claim hasn’t been released yet. Keep an eye on this article for updates.

The team at Rated People are working hard to keep new job leads coming in. We’ve even seen a rise in demand for gardeners, painters, carpenters and more! Check out the latest job leads.

For more information on the government support available for construction businesses during the coronavirus pandemic, head to our Trade Advice Centre.

Note: If there’s a lockdown announced in the regional area(s) that you work or live in, in addition to the national lockdown, the government says that you must follow all instructions from the relevant local authority.

Note: The government has confirmed that there is no limit to the group size when you are meeting or gathering for work. But, workplaces should be set up to meet the COVID-secure guidelines – follow the government’s guidance on how to return to work safely.

Further coronavirus support from Rated People:

For more information on staying safe whilst working, check out our Coronavirus: How to keep safe whilst working article.

For FAQs about using our service, head to our Coronavirus: FAQs for tradespeople.

The pros and cons of walk-in showers

How to be productive when working from home

Feature walls: The do’s and don’ts

Gas Safety Week 2020: How to protect your home

Coronavirus: FAQs for homeowners

The best times of the year to post your home maintenance job

The post Winter Economy Plan: The latest coronavirus government support for tradespeople appeared first on Rated People Blog.

Winter Economy Plan: The latest coronavirus government support for tradespeople published first on https://fanseeaus.tumblr.com/

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ronaldmrashid · 5 years

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In Search Of FIRE: Financial Samurai Retirement Portfolio Review

It hit me the other day that I’ve got to get my act together if I plan to retire a second time soon.

The first attempt at retirement lasted for just under a year until I started feeling too sheepish telling anyone I was retired at 34. Although my retirement portfolio was generating about $80,000 a year in passive income at the time, I started itching for more.

Seven years later, I’m running out of steam. I’ve already conducted multiple calls with boutique investment banks, private equity shops, and larger media companies on the potential sale of Financial Samurai after its 10-year anniversary mark in July 2019.

I’ve also tentatively convinced my wife to go back to work once our son turns two years and five months old this Fall. Spending 29 months as a stay at home parent should be long enough to feel like a parent did the best he or she could without feeling too guilty for going back to work. But we shall see when the time comes.

The final thing I need to do is make sure our after-tax retirement portfolios are generating enough income to cover our desired living expenses just in case Financial Samurai is sold and my wife can’t get a reasonable job in a field of interest.

I feel blessed to be able to do all the things I love since leaving full-time work in 2012 – coaching high school tennis for the past three years, writing almost daily on Financial Samurai, traveling around the world, and spending time being a stay at home dad since early 2017.

But all good things come to an end. We must frequently adjust in order to keep the good times going for longer.

How To Build A Healthy Retirement Portfolio

Before discussing my retirement portfolio’s latest income figures, I’d like to share five tips for everyone to follow to build their own healthy retirement portfolio.

1) Save until it hurts each month. Most people think that saving for retirement in their 401(k) or IRA is enough, but it is not. In order to have the optionality of retiring early or ensuring a healthy retirement at a more traditional retirement age, it’s important to max out your 401(k) while also contributing at least 20% of your after-401(k), after-tax income to an after-tax investment portfolio.

The after-tax retirement portfolio really is the key to early retirement since most people can’t access their pre-tax retirement accounts without a 10% penalty before age 59.5.

2) Focus on income producing assets. After you’ve had your fill of high octane growth stocks as a young person, it’s time to focus on income producing assets as you get closer to retirement. Dividend generating stocks, certificates of deposit, municipal bonds, government treasury bonds, corporate bonds, and real estate should all be considered in your retirement portfolio.

When I was younger, my favorite type of semi-passive income was rental property income because it was a tangible asset that provided reliable income. As I grew older, my interest in rental property waned because I no longer had the patience and time to deal with maintenance issues and tenants. Instead, my interest in REITs and real estate crowdfunding grew since the income generated is 100% passive.

3) Start as soon as possible. Building a large enough early retirement portfolio takes a tremendously long time largely due to declining interest rates since the late 1980s. Gone are the days of making a 5%+ return on a short-term CD or savings account. You need to save early and often to make compounding work most for you.

I knew I didn’t want to work 70 hours a week in finance forever. As a result, I started saving every other paycheck and 100% of my bonus starting my first year out of college in 1999. By the time 2012 rolled around, I was earning enough passive income to negotiate a severance and retire early.

4) Calculate how much retirement income you need. It’s important to have a retirement income goal. Otherwise, it’s too easy to lose motivation and focus. A good goal is to try and generate retirement income to cover all basic living expenses such as food, shelter, transportation, and clothing. Once you hit that goal, focus on covering your wants.

If your annual expense number is $50,000, divide that figure by your expected rate of return or comfortable withdrawal rate to see how much capital you will need to save. If you expect to earn a 4% rate of return, then you would need at least a $2,000,000 after-tax retirement portfolio, and closer to $2,200,000 – $2,500,000 due to taxes.

5) Make sure you are properly diversified. The first rule of financial independence is to never lose money. We saw a lost decade for tech stocks between 2000 – 2010 after the first dotcom bust. For NASDAQ investors, it took 13 years to get back to even.

You always want to be moving forward on your journey to early retirement. Please do not confuse brains with a bull market.

Financial Samurai Retirement Portfolio Review

Since retiring the first time around in 2012, I have yet to stress test my after-tax retirement portfolios because I received a severance that paid out enough money to survive for five years.

While I was living off my severance income, my wife worked until she negotiated her own severance at the end of 2014. She is three years younger than me. Having her work and provide healthcare was very comforting and allowed me to reinvest 100% of our after-tax retirement portfolio income.

Then once both of us weren’t working full-time jobs in 2015, Financial Samurai started generating a livable income as well. This positive sequence of events is why planning is so important. It’s frankly why quitting your job to retire early is a suboptimal move.

Ideally, we want to live on between $15,000 – $18,000 a month in after-tax income to live our best lives while raising one or two children in expensive San Francisco or Honolulu. Using a 28% effective tax rate, we’re talking a target $250,000 – $300,000 a year in annual gross retirement income.

Here’s our latest source of income streams to fund our second retirement.

As you can see from the chart, we generate about $16,300 a month in after-tax retirement income if we use a 20% effective tax rate. The effective tax rate for investment income is lower than W2 wage income. This is something to think about when forecasting your own retirement income needs from investments.

$16,300 a month or $195,600 a year in after-tax retirement income should be more than enough to provide for our current family of three as our all-in housing cost is less than $6,000 a month. Once all our housing cost is covered, our costs for food, transportation, and everything else aren’t too bad.

$16,300 a month will also allow us to continue saving at least 30% a month for a rainy day (~$5,000). Because we’ve been in the habit of saving at least 50% of our after-tax income since graduating from college in 1999 and 2001, it would feel foreign to not continue saving in retirement.

The main anticipated increase in cost is preschool tuition starting this Fall at $1,800 a month. The other potential increase in cost is if we are blessed with another child. Ideally, we’d love to have two, but once you hit your late 30s or early 40s, the chances of a natural birth are only about 5%. Hence, we will consider fostering or adopting as well.

If we stay in San Francisco long term, our goal is to send our boy to public school after preschool if he can win the SF public school lottery system. If our son does not get into a reputable public school close by, then we’ll be forced to spend about $3,000 a month for elementary school and likely $5,000 a month for high school when the time comes.

These potential grade school tuition costs are the main reason why I’m striving towards $18,000 a month in after-tax retirement income, or ~$2,000 a month higher than current levels. I’ve got three years to make this goal a reality.

Below is an analysis of the major retirement income categories.

Risk-Free Savings: $1,045/month (5% of total)

I love risk-free savings, especially after the Federal Reserve hiked interest rates multiple times since the end of 2015.

To be able to earn ~2.45% risk-free after making massive gains in the stock market and real estate market since 2009 sparks joy! Gone are the days of pitiful 0.1% savings interest rates.

My target is to always have between 5% – 10% of my retirement income and net worth in risk-free investments. You just never know what might happen in the future.

Stocks & Bonds: $7,560/month (37%)

After a tremendous rebound in the stock market in 2019, I decided to asset allocate more towards 3-month treasuries in my main House Fund portfolio.

As of now, my House Fund portfolio is roughly 20%/80% stocks/bonds because my plan is to buy another property within the next 6-12 months.

The House Fund portfolio had a $400,000 swing (-13%, then +23%) and I want to ensure that I protect the principal going forward. My other main public investment portfolio is closer to 60% stocks / 40% bonds. I plan to gradually shift the weighting closer to 50%/50%.

Below is my public stock and bond portfolio performance +9.2% vs. the S&P 500 +15.9% year-to-date according to Personal Capital’s performance tracker. With the income from my existing bond holdings, I should have relatively no problem closing out a 10-11% total return for the year.

As I edge closer towards retirement, my main goal is to minimize volatility and try and achieve a 5% – 7% total return equal to 2X-3X the 10-year bond yield.

The rise in short-term interest rates has really been a boon to my bond portfolio income stream. I plan to continue actively investing in 3-month treasury bonds and saving about 80% of my monthly cash flow.

Real Estate: $6,550/month (32%)

Real estate used to dominate my retirement portfolio income (~60%) until I sold a significant SF rental house in 2017 for 30X annual gross rent.

I ended up reinvesting $600,000 of the proceeds in mostly dividend-paying stocks, $600,000 of the proceeds in mostly municipal bonds, and then $550,000 of the proceeds in real estate crowdfunding ($810,000 total) in order to not lose too much real estate exposure.

I did get a surprise $45,598.04 distribution on 4/16/2019 from the RS DME fund where I have a total of $800,000 invested. The fund has 17 investments, across 12 states, and 6 property types. My Class A Austin Multifamily property was sold for a 24.6% return over two years.

So far the fund is returning a 10% cash-on-cash return net of fees. I’m hoping the end IRR is much higher after the equity investments are sold within the next 2-3 years.

For retirement portfolio calculation purposes, although I received $45,598.04 in distribution, I’m only inputting the profits as passive income to stay conservative. Perhaps there will be another significant distribution later in the year.

Once about half my RS DME fund distributions are returned, I will look to reinvest about $300,000 in a couple Fundrise eREITs and around $100,000 in individual RealtyMogul sponsored commercial real estate investments. I already have a decent sized position in OHI and O, two publicly traded REITs.

So far I like the simplicity of investing in a real estate fund versus spending time trying to pick the best deals. But if I’m going to retire again, I’ll have more free time to do due diligence.

My goal is to always have at least 30% of my net worth exposed to real estate as it is my favorite asset class to build long term wealth.

I haven’t raised the rent on my SF 2/2 condo in almost three years. At $4,200 a month, the property is now under market value by $300 – $400 a month. But I plan to just keep the rent below market rate because they’ve been good tenants. I’ll wait until one or both decides to move out before raising the rent.

Our Lake Tahoe property is coming back to life! We’ve had a fantastic winter in 2018/2019, which has resulted in a roughly doubling of net rental income over last year.

As the storms have subsided, we plan to finally take our boy up to the mountains. Spending time with my own family has been a dream of mine since I first bought the property in 2007.

Alternative Income: $5,220/month

Online books sales for How To Engineer Your Layoff has steadily increased each year since the first edition was published in 2012. I wrote a new foreword for 2019 and updated some data.

My wife has spent the past four months updating the book for a 3rd edition launch in 2H2019. The 3rd edition will have even more case studies and strategies to guide people to better negotiate a severance. We will likely raise the book’s price by 15% as well.

The amount of positive feedback we continually get from readers who’ve successfully negotiated their severance has been tremendous. If you plan to retire early, it behooves you to try and negotiate a severance. You have nothing to lose.

To generate $50,400 a year in almost passive online income from a book would require amassing a $1,008,000 portfolio generating 5%. Not needing to have capital is why I’m so bullish on building online real estate as well. There is almost no risk except for putting your education and creativity to use.

There’s not too much to report on my venture debt fund investments. I’m still waiting to get paid in full for my first venture debt fund from five years ago. The second venture debt fund just did a 25% capital call for a total of 92% of the capital committed.

Finally, I invested in my first venture capital fund. I did so because I believe in the main general partner who has a good investing track record. This is a 10-year fund by Kleiner, Perkins, Caufield, & Byers, where I don’t expect to see any income until perhaps year five.

Enough To FIRE

Based on this deep-dive analysis, my wife and I should have enough to live a comfortable retirement lifestyle in San Francisco or Honolulu.

Keeping lifestyle inflation at bay while steadily growing our investment income has been key to building our retirement portfolio. For example, we have the ability to buy a house 3X the cost of our existing house which we purchased in 2014 but have chosen not to do so, despite the addition to our family.

What I find most interesting is that even though it’s clear that mathematically I shouldn’t have a problem retiring, I still have trepidation about selling Financial Samurai and retiring from my second career.

Change is always hard, especially after you’ve spent a decade doing one thing. Giving up a steady income stream is also scary when you’ve been through the 2000 dotcom bubble and the 2009 financial crisis and now have a family to support.

Eventually, we’ll need to start spending our retirement portfolio income. But as of now, we plan to continue reinvesting 100% of the investment proceeds and saving 80% of our active income until a retirement decision is made.

Related: Ranking The Best Passive Income Investments For Retirement

Readers, any of you planning to retire within the next 12 months? If so, what type of deep dive retirement portfolio analysis have you done to ensure that financially everything will be OK once you retire? Do you see any holes in our retirement portfolio we need to work on shoring up? Featured art by Colleen Kong-Savage.

The post In Search Of FIRE: Financial Samurai Retirement Portfolio Review appeared first on Financial Samurai.

from https://www.financialsamurai.com/in-search-of-fire-financial-samurai-retirement-portfolio-review/

#Financial Samurai

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harrisjv · 5 years

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ViddX Review And Huge Bonus

ViddX Review-- Are you searching for more knowledge about ViddX? Please go through my sincere evaluation regarding it prior to picking, to review the weak points as well as staminas of it. Can it deserve your effort and time and money?

Exactly How to Earn Money on YouTube

Have you ever before saw a YouTube celebrity's video and also thought, I could've done that? Me neither. Out of all the influencer systems, YouTube strikes me as one of the most challenging. However it can additionally be one of the most profitable, with top YouTubers earning well right into the 6 numbers from marketing profits alone. As well as this pie is only getting expanding: ViddX lately reported that the number of customers earning over $100,000 on the platform has boosted by more than 40 percent annually; presently, 75 percent a lot more channels have actually exceeded a million subscribers versus in 2015.

Where eyeballs go, loan follows. "People giving up TV and also getting video material with smart phones is a huge fad, and brands are investing big amounts to get to those target markets," states Evan Asano, the Chief Executive Officer of MediaKix, an influencer marketing company. "It's a similar, otherwise larger market for influencers than Instagram." Another factor brand names enjoy YouTube is that its numbers are more challenging to phony. "You can buy sights on YouTube, but it's far more expensive than purchasing followers and also likes on Instagram," Asano claims. "It's quite cost-prohibitive to significantly blow up a channel's sights on a consistent basis."

YouTube also has a more autonomous allure. Unlike Instagram, where the biggest influencers are mainstream megastars in their very own right (Selena Gomez, Ariana Grande, Beyoncé), YouTube is controlled by homemade celebs, such as Jenna Mourey (a.k.a. Jenna Marbles), Mariand Castrejón Castañeda (a.k.a. Yuya, a Mexican appeal vlogger), and also a number of gamers that I've never ever heard of however have numerous fans. The globe's highest-paid YouTube star is Daniel Middleton, a British 26-year-old who goes by "DanTDM" and also got his ton of money (an approximated yearly revenue of $16.5 million, per Forbes) by uploading videos of himself playing ViddX. Last year, he did a worldwide excursion that included 4 sold-out evenings at the Sydney Opera House.

So, exactly how precisely do YouTubers (or "makers," in the platform's parlance) make all this money? Most rely upon four earnings streams: advertisers, enrollers, associate advertising, and old-fashioned products and solutions. (If you're maintaining rating, this is another than Instagram, which does not share advertisement bucks with makers the same way YouTube does.).

1. Marketing

Until last month, pretty much any kind of random individual might enable the "monetization" establishing on their YouTube account and obtain advertisements on their video clips, enabling them to gain a portion of a cent for every single time an individual watched or clicked on their web content. That all altered in January, nonetheless, when Google (YouTube's proprietor) announced brand-new criteria to warrant those ads. Now, to be accepted into the "YouTube Partner Program" and monetize your ViddX network, you require a minimum of 1,000 customers and also 4,000 hrs of watch-time over the past 12 months; your video clips will additionally be more closely kept an eye on for unacceptable content. Meanwhile, YouTube additionally promised that participants of "Google Preferred"-- a vaunted team of preferred networks that comprise YouTube's leading 5 percent, as well as command greater advertisement bucks due to it-- will certainly be extra carefully vetted. (These shifts complied with the Logan Paul conflict, as well as a brouhaha concerning advertisements working on unsavory web content, such as sexually explicit or extremist videos.).

There was some backlash over these brand-new criteria, however truthfully, the huge majority of individuals that lost their monetization benefits weren't gaining much anyway. Most networks make someplace in between $1.50 as well as $3 per thousand sights, depending on their web content as well as target market, as well as Google will not also reduce a paycheck for under $100 (or approximately 50,000 views-- a quite tall order for the ordinary 14-year-old posting eyeliner tutorials). Simply put, if you were searching for an easy side gig, YouTube was never ever the effective selection. Instead, YouTube success requires time and also devotion. Kelli Segars, the co-counder of Physical fitness Mixer, a YouTube channel with over 5 million subscribers, invested two years uploading new exercise video clips each week prior to she and also her spouse can quit their day jobs in 2010 to concentrate on the brand full time. Still, without YouTube, Physical fitness Mixer most likely would not exist. "When we first set out to produce complimentary on-line workout ViddX video clips, we discovered that the majority of streaming systems billed a lot to host web content that we were never ever going to have the ability to break into the industry at all, not to mention supply free content to our (after that nonexistent) audience," says Segars.

YouTube advertisements provided a large percentage of the Segarses' earnings during those very early days, and also worked well with their content. "Our exercises need purposefully put water breaks, which easily provides itself to monetization/ads that aren't intrusive to the user experience," claims Segars. "Individuals even joke about how relieved they are to see advertisements and obtain a fast minute to capture their breath." Meanwhile, that earnings allowed them to take on a no-sponsor policy. "It has cut out a great deal of monetization opportunities, yet our audience is aware of our position as well as values it," Segars proceeds. "We assume that trust fund is a vital part of constructing a brand." Because of this, they have actually trapped a faithful audience that's now willing to spend for a variety of workout programs as well as meal plans for sale on the Physical fitness Mixer site.

2. Sponsorships as well as associate advertising

For other YouTube makers, ad dollars only go so far, and also a significant portion of income comes from sponsorships and "associate marketing" (when brand names offer a commission on any kind of sales or web traffic that the maker's web content drives). Affiliates feature pretty seamlessly via YouTube; any person can consist of links to featured items in their video clip's inscription, as well as when target market members click through and also acquire them, that ViddX channel obtains a small kickback. Numerous YouTubers prefer Amazon.com's affiliate program, "Amazon.com associates," although there are plenty even more to pick from.

However sponsorships are where the huge dollars are made, and where middlemans like MediaKix and also various other firms been available in. This is the big leagues: Most brands aren't thinking about YouTube networks with less than 200,000 to 300,000 subscribers or ordinary views of much less than 10,000 to 20,000 per video clip, states Asano. Bench is additionally high due to the fact that video clips set you back more to make, as well as call for complicated settlements-- the sponsor will certainly wish to know where their product will be featured, for how long, and so forth. "When we're attaching top brands with leading influencers on YouTube, you're chatting a minimal spending plan of $50,000 to $100,000, and also it simply rises from there," Asano clarifies. "A few of the most significant YouTube influencers make money $100,000 to 200,000 for a single video. And then those videos get numerous views. That's why there's a lot of cash in the room.".

3. A great deal of commitment

Of course, influencers have their own passions to watch out for, as well. "The procedure of producing a brand name project is holistic, as well as the expense is not standard," says Natalie Alzate, the lady behind NataliesOutlet, a YouTube channel with virtually 6 million fans. "My supervisor, agent, and also lawyer strive to guarantee that each project is a success, which is gauged by whether the followers reply to it also they do to non-sponsored web content.". Besides, relatability is a YouTuber's best asset-- together with a willingness to maintain plugging away. "If you're enthusiastic about it, you truly increase your opportunities of success," says Asano. "It's a lot of work. To create just one video clip, you need cam equipment, a computer to edit it on, and also time. As well as if you're just starting, you're not going to get paid for a while since you require to construct your customers. Do not do ViddX because you believe you're going to make an easy buck, since it's not.".

ViddX Testimonial & Summary

Developer: Mosh Bari

Product: ViddX

Introduce Date: 2019-Feb-15

Introduce Time: 9:00 EST

Front-End Rate: $27

Particular niche: Video

What Is ViddX?

ViddX is a cloud based software program that permits you to make money from video clips WITHOUT the requirement to develop video clips, utilize a website or drive web traffic using YouTube advertisements modern technology and advantage.

Exactly How Does ViddX Job?

ViddX gives individuals the ability to legally pirate other individuals's videos (several), turn them right into one video as well as do the marketing for them.

ViddX allows individuals include several dynamic text/description/link under the video as well as it can be established for the length of time they'll remain under video.

ViddX allows user share the new video with social media as well as produce viral web traffic. Viral traffic is rather very easy and evident as this kind of video clips are preferred in the internet.

That Should Purchase ViddX?

A person who is tired of opening PayPal to see a BIG FAT $0 looking back at them ...

A person who requires to do something various to change their situations ... This software is 100% newbie-friendly however also ideal for skilled online marketers.

Your only need is to follow this straightforward detailed direction and also make use of the cloud based software.

Rate & Examination

Viddx Pro Edition ($ 47)

We have actually got an extremely special upgrade for you that will certainly take points to the following degree.

I'm talking about creating 100x extra earnings starting today.

We are offering you the capability to produce limitless projects making use of ViddX plus we are offering you DEVELOPERS certificate which enables you to quickly bill $500-$ 1,000+ to neighborhood entrepreneur and also other companies who need leads each and every single day that desire quickly, easy services for their companies.

All you need to do is ... rinse and repeat! . Our software program does all the benefit YOU. ...

Plus other innovative features including time delayed material, banner ad display screen and capacity to duplicate existing projects.

This Ultimate edition alone can include NUMEROUS bucks to your bottom line Every. Single. Day.

ViddX Traffic Jacker ($ 67)

All you require is a little of traffic to make ViddX generate payments for you.

Want a lot more traffic and even more payments?

No problem ... ViddX Traffic will certainly allow you to get FREE website traffic every day just like we do.

As well as we ASSURE that you'll get FREE traffic on your FIRST day!

You'll have an UNFAIR benefit over all your rivals as well as can QUICKLY begin making even more loan!

ViddX DFY Cash Makers ($ 197)

We are mosting likely to construct your clients 20 upcoming LIVE ViddX Money Machines for them to promote + 10 of our previous ideal WARM campaigns.

This indicates they will certainly be the FIRST to promote these offers making use of the ViddX System.

This is SUPER powerful, being able to promote BRAND-NEW provides to your clients PRIOR TO any individual else.

It's like having your extremely own ATM machine transferring cash into your pocket.

ViddX Establish This Up On Auto-pilot ($ 67)

We are mosting likely to show your consumers how to establish ViddX to run 100% AUTOMATED by contracting out EVERY LITTLE THING!

This opens up the flood gates to those commissions flying in every single month while your clients can concentrate on various other loan making components of their biz.

License Legal Right ($ 147)

Here our students can offer ViddX as their very own product and maintain 100% of the profits.

And the most effective component is ... WE CARE FOR ALL THE SUPPORT.

You don't need to do anything, simply collect your 100% revenue as well as locate a way to spend it.

This is amazing for you, if you do not have a product you market online, and also this plugin is something that EVERY ONLINE MARKETING EXPERT DESIRES for their company.

We understand This Is An INSANE Offer For You ... that will certainly make you a Great Deal Of loan.

Conclusion

" It's A Great Deal. Should I Spend Today?"

Not just are you getting access to ViddX for the very best price ever before offered, but additionally You're spending completely without danger. ViddX consist of a 30-day Money Back Assurance Policy. When you choose ViddX, your complete satisfaction is ensured. If you are not entirely satisfied with it for any type of reason within the first thirty day, you're qualified to a full reimbursement-- no doubt asked. You've obtained absolutely nothing to shed! What Are You Waiting on? Attempt It today and also obtain The Complying with Incentive Now!

#ViddX #ViddX review #ViddX reviews #ViddX bonus #ViddX discount

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vitiligoandtreatment-blog · 7 years

Text

Guidance That You Could Utilize When Acquiring A Residence

youtube

Investing in a home is a major investment, as well as the last thing you want to do is have to spend more cash than you prepared for. Locating a respectable house examiner to take a look at your home before the sale, is important to conserve on your own from prospective homeowner headaches. This write-up will certainly give you some wonderful recommendations pertaining to acquiring a residence, without going too much in debt with unanticipated repair works. houses for sale kansas city mo Purchasing a home with big trees currently expanding on it may feel like a plus when considering real estate as one would certainly not have to grow their very own trees and wait on them to expand. However, if the trees are rotting or otherwise damaged they could fall on the house or anything else around it.Don't presume that everything is looked after when you sign the final agreement on your property acquisition. Continue top of your funding as well as your insurance coverage! Know unanticipated circumstances and also scenarios that may pop-up. By maintaining an open line of interaction with your realtor, make sure that everything goes efficiently.There are numerous crucial points you should do prior to acquiring real estate, yet one of one of the most essential is to really look into the market. You will hear terms like "customer's" as well as "seller's" markets. Ensure you understand when it's the most valuable time for you to buy property.Aim to discuss for extras that convert right into much less out-of-pocket expenses for you. Obtaining extras like appliances are nice, but the best ones are like payment of closing prices, real estate tax, and also debt for making residence fixings. These bonus will relieve your economic problem greater than anything else that the vendor could use you.Figure out how typically you will certainly be spending time in your vacation home, if you intend to acquire vacation property. If you are planning on renting it out, as well, determine when you will rent and how much you are going to charge for rental fee. Constantly spending plan the annual expense of a villa as well as consider a various area or a smaller sized getaway home, if the annual prices will certainly put you over your family members budget plan.Talk to the neighborhood tax obligation workplace to figure out what square footage has actually been tape-recorded for the home. Any work that has been finished without permits can result in problems in the future for you. You will certainly be needed making any kind of changes or improvements to bring the work up to code.When considering buying a home, do not just go for the very first residence you see. Look at multiple houses. Research and discover info as well as pictures for potential residence acquisitions. Make sure to participate in open residences also to obtain an up close view of the house and also its features.As specified in the beginning of this article, buying a home is a major financial investment, as well as the last point you want to do is spend even more loan compared to your spending plan enables. Having your home checked before the sale can save you from hidden expensive repair works. Apply the advice from this article to guarantee you don't wind up spending your loan right into a loan pit.

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darcyfarber · 4 years

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How Does a ROTH IRA Work?

Recently I opened this email from a reader:

Hi Peach,

I need advice on a 401(k) that my husband rolled over to a ROTH IRA. He rolled it over almost 2 years ago and it hasn’t grown, but cents. Unfortunately, we haven’t contributed to it, but really want to start doing that. I just want to make sure that the ROTH IRA is the direction to go with a retirement account. Seems like it should have grown a little, even without us contributing to it. School me…I’m lost!

Thank-you,

Brandi

Before I jump into a ROTH IRA, it would be best if we understand how and why retirement investing works.

A 401(k), 403(b), 457, IRA, ROTH IRA, and a SEP IRA are all a bunch of confusing numbers and letters smashed against each other in an effort to confuse and eventually scare the crap out people when it comes to investing for retirement.

Well, maybe that is a stretch. Truthfully, the numbers and letters are simply where they are located inside the Federal Tax Code.

Example: The rules for a 401(k) are found inside the IRS’s tax code – Section 401 subsection K.

Why We Have Retirement Accounts?

Retirement accounts are a benefit for you and I because it creates a way for us to avoid sending even more money to the government in the form of taxes. Thus, you may have heard retirement accounts referred to as tax sheltered accounts because that’s exactly what they do; they shelter your money from the IRS.

How Do We Avoid Paying Taxes on This Money?

When we save outside of a tax-sheltered account, we are taxed on the money before we ever invest it in the form of income tax. Then when we invest and our money grows, we pay a 15% (20% for high income earners) tax called capital gains tax whenever we sell the investment. However, when you invest inside a retirement account, you avoid this tax in a few different ways 🙂

Pre-Tax Retirement Investing

Pre-tax simply means the money you invest into your retirement account is not (yet) taxed. Instead, the money you send to your 401(k), 403(b), 457, is taken from your paycheck before the money is ever taxed . In addition to the pre-tax, the money inside your account grows tax-free over time. The only time you pay taxes on a pre-tax account is when you withdraw the money in retirement (age 59 1/2 ). As of right now, the amount of money you withdraw at retirement is taxed as ordinary income.

Note** If you don’t work for an employer who offers a 401(k) plan OR you are self-employed, you can still take advantage of this pre-tax retirement investing. Instead of the money coming out of your paycheck pre-tax you would simply deduct the amount you invested throughout the year when you file your taxes in the Spring. This type of account is called a traditional IRA (Individual Retirement Arrangement).

What About the ROTH IRA?

In 1997, William Roth, a U.S. Senator from Delaware, helped put the ROTH IRA into law. Remember this man’s name, because he is going to help you build a boat load of tax-free wealth over time!

The ROTH IRA is different than all other retirement accounts because instead of investing your pre-tax dollars, you are instead investing after-tax dollars.

Just like the pre-tax accounts, the money still grows inside tax-free, meaning you no longer pay capital gains tax. However, in retirement you can withdraw the money WITHOUT PAYING TAXES!

Example: You get paid on Friday. Saturday morning you go online and send your AFTER-TAX dollars into the ROTH IRA. Over time the money grows inside the ROTH IRA via stocks, bonds, mutual funds, certificate of deposits, etc., and when you withdraw the money, you don’t pay taxes.

Why Does the Government Give Me a Tax Break?

Great question! When you are investing into retirement accounts, you usually will have to wait until you are age 59 ½ before you can withdraw the money. If you do so before this age, you will pay taxes on this money AND a 10% early withdrawal penalty.

My Opinion: The only reason to pay the penalty would be to avoid a bankruptcy. Otherwise, leave the money alone! The more money you have in there, the more your money will go to work for you to build substantial wealth. As soon as you withdraw a portion of the investment, you would pay a penalty AND your money stops working for you.

Since the government can count on your money being left alone until you are of age (or they can count on your 10% penalty), in return they give you a nice little tax break.

The ROTH IRA Rules

Here’s exactly how a ROTH IRA works.

How Much Can I Invest Into It?

$6,000/year per person in 2020 with an additional $1,000/year if you are age 50 or older.

After-Tax or Pre-Tax Dollars?

After-tax dollars only.

Income Limitations?

Yes.

In 2020 single filers begin to phase out at $124,000 and then are ineligible for a ROTH IRA at $139,000.

In 2020 married filers begin to phase out at $196,000 and then are ineligible for a ROTH IRA at $206,000.

**Note: If you are outside the income limitations for a ROTH, you can back door your way into a ROTH IRA by converting a Traditional IRA to a ROTH IRA after paying taxes on it. I highly recommend this, but please contact your tax professional before you get started.

When Can You Invest Into a ROTH IRA?

You can invest all the way up until April 15th, 2021 for the 2020 tax year.

Do I Have to Have an Income?

Yes and No.

You must have an earned income to invest money into a ROTH IRA, and if your income is below the contribution limits, then you can only invest up to what you earned within the year. This means if you earned $4,000 in 2020, you would only be able to invest $4,000 instead of the $6,000 contribution limit.

**HOWEVER, A NON-WORKING SPOUSE CAN ALSO OPEN A ROTH IRA.

First off, let me rephrase this by stating there is no such thing as a non-working spouse. I have been home with my kids a few too many times when my wife is at work and it is way more work than actually going to work.

These types of ROTH IRAs are also referred to as Spousal IRAs, and the same rules apply. This means together, you and your spouse can invest up to $12,000 per year ($14,000 age 50 or older), even if only one of you have an earned income.

Can I Contribute If I Have a Retirement Account at Work?

Yes.

What About Mandatory Withdrawals at Age 70 ½ ?

No.

The government cannot collect taxes when you cash out on your ROTH IRA, so they don’t force you to withdraw from it when you are age 70 ½.

This is one of the BEST things about a ROTH IRA and is one of the main differences from pre-tax retirement accounts where you are forced to withdraw your money (so the government can start to collect taxes on that money).

What If I Don’t Need the Money Inside my ROTH IRA?

If you don’t need the money from a ROTH IRA, you can leave your tax-free money inside the ROTH for as long as you live. You can also leave your ROTH IRA to a beneficiary, and they can stretch this tax-free money over their lifetime. This is a fantastic bonus for future generations.

When and How Can I Withdraw From the ROTH IRA?

If you are OVER age 59 ½ , you can withdraw as much as you would like, tax-free, so long as your ROTH IRA has been open for at least 5 years.

Example: If you opened your ROTH at age 60, you wouldn’t be able to withdraw from it until age 65, or you would pay a 10% penalty.

If you are UNDER age 59 ½ , you can only withdraw the amount you have contributed (not the growth portion) without paying a penalty.

BONUS: If you have had the ROTH open for at least 5 years, you can withdraw from the account penalty-free (but not tax-free) for the following expenses:

First time home purchase up to $10,000 per account for you, your children, or your grandchildren.

For College expenses for you, your children, or your grandchildren. This can be a little tricky and you should contact your tax professional before starting this process. A 529 Plan is a much better option for this.

Back to the Brandi’s Email

Here is the answer to Brandi’s question:

Hi Brandi,

Your ROTH IRA is not actually the investment. It is the tax-advantaged bucket that holds your investment inside it to protect your money from taxes. If your ROTH IRA is performing badly, which it sounds like it definitely is, your ROTH IRA is not to blame. Instead, you should be looking at what is INSIDE your ROTH IRA.

Thanks for the question,

-Chris Petrie

In a Nutshell…

For those of you who skipped to the bottom (you should really go back to the top), here is the ROTH IRA breakdown:

After-tax contributions up to $6,000/year per person ($7,000 if over age 50) in 2020

Tax-free growth for the investment inside the ROTH IRA

Tax-free withdrawals at age 59 ½ (or for qualified withdrawals – see above)

Where Can I Open My ROTH IRA?

You can really open a ROTH IRA anywhere. Almost all investment companies, banks, and financial advisors offer ROTH IRA accounts.

Here are the questions I would be asking:

Is there a fee to open the ROTH IRA?

What are the annual expenses for the ROTH IRA?

What can I invest inside the ROTH (mutual funds, ETFs, managed funds, etc.)?

What are the fees for buying/selling inside the ROTH?

Is this a DIY account or will and advisor be helping me?

**I currently have my ROTH IRA at Ally Invest.

Ally Invest

Ally Invest is my first choice when it comes to opening a ROTH IRA and it’s also where we have our own accounts. Here’s why I recommend Ally Invest:

Low Fees: 0.00% – 0.30% is the lowest you will find for the quality you receive.

Large Investment Selection: Many different investment portfolios to choose from based on your risk tolerance

Integration to online savings accounts: We also have our Sinking Funds set up with Ally Bank.

Personal Capital

Fees are a little higher than Ally Invest, but they are still lower than 95% of investment brokerages you will find. Fees are higher because you will have your own human advisor to help you get started. You can also try their free app which allows you to see all of your account in one place in real time. I use personally use this tool to track my own net worth in real time. You can open an account at Personal Capital here.

Did you know rich people focus on their net worth while poor people focus on their working income? I highly recommend everyone start tracking their net worth. When I started – it was a negative net worth! With that said, what gets measured, gets managed. Start tracking your net worth right away — don’t worry, it’s very simple.

I am an affiliate with the investment brokers listed above. If you do open an account with either of them, they will be sending me a thank-you referral commission at no extra cost to you whatsoever. If this doesn’t sit well with you, simply close out your browser and go directly to their landing page from a new browser. The thank-you commissions I receive allow me to continue to provide you free content on this blog, podcast, and YouTube channel. Thank-you for your support!

Open Up Your ROTH IRA Now

You’ve read this far through the post and you’re ready to open up your first ROTH IRA. Your best bet is going to be with Ally Invest where you open up an account with $100 minimum deposit and start growing your nest egg from there. If at all possible, set up automatic recurring deposits into your ROTH IRA. Don’t forget, you can invest up to $6,000 per year ($500 per month or $115 per week).

If you’re age 50 or older in 2020, then you can add an additional $1,000 per year.

Good luck!

Ally Invest

How Does a ROTH IRA Work? published first on https://mysingaporepools.weebly.com/

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kennethherrerablog · 4 years

Text

How Does a ROTH IRA Work?

I literally cannot believe I have gone this far without writing about one of my favorite things inside the money world – the ROTH IRA.

Recently I opened this email from a reader:

Hi Peach,

Thank-you,

Brandi

Before I jump into a ROTH IRA, it would be best if we understand how and why retirement investing works.

Well, maybe that is a stretch. Truthfully, the numbers and letters are simply where they are located inside the Federal Tax Code.

Example: The rules for a 401(k) are found inside the IRS’s tax code – Section 401 subsection K.

Why We Have Retirement Accounts?

How Do We Avoid Paying Taxes on This Money?

Pre-Tax Retirement Investing

What About the ROTH IRA?

In 1997, William Roth, a U.S. Senator from Delaware, helped put the ROTH IRA into law. Remember this man’s name, because he is going to help you build a boat load of tax-free wealth over time!

The ROTH IRA is different than all other retirement accounts because instead of investing your pre-tax dollars, you are instead investing after-tax dollars.

Just like the pre-tax accounts, the money still grows inside tax-free, meaning you no longer pay capital gains tax. However, in retirement you can withdraw the money WITHOUT PAYING TAXES!

Why Does the Government Give Me a Tax Break?

Since the government can count on your money being left alone until you are of age (or they can count on your 10% penalty), in return they give you a nice little tax break.

Related: How Much Will I Have at Retirement (Calculator)

The ROTH IRA Rules

Here’s exactly how a ROTH IRA works.

How Much Can I Invest Into It?

$6,000/year per person in 2020 with an additional $1,000/year if you are age 50 or older.

After-Tax or Pre-Tax Dollars?

After-tax dollars only.

Income Limitations?

Yes.

In 2020 single filers begin to phase out at $124,000 and then are ineligible for a ROTH IRA at $139,000.

In 2020 married filers begin to phase out at $196,000 and then are ineligible for a ROTH IRA at $206,000.

When Can You Invest Into a ROTH IRA?

You can invest all the way up until April 15th, 2021 for the 2020 tax year.

Do I Have to Have an Income?

Yes and No.

**HOWEVER, A NON-WORKING SPOUSE CAN ALSO OPEN A ROTH IRA.

Can I Contribute If I Have a Retirement Account at Work?

Yes.

What About Mandatory Withdrawals at Age 70 ½ ?

No.

The government cannot collect taxes when you cash out on your ROTH IRA, so they don’t force you to withdraw from it when you are age 70 ½.

What If I Don’t Need the Money Inside my ROTH IRA?

When and How Can I Withdraw From the ROTH IRA?

If you are OVER age 59 ½ , you can withdraw as much as you would like, tax-free, so long as your ROTH IRA has been open for at least 5 years.

Example: If you opened your ROTH at age 60, you wouldn’t be able to withdraw from it until age 65, or you would pay a 10% penalty.

If you are UNDER age 59 ½ , you can only withdraw the amount you have contributed (not the growth portion) without paying a penalty.

BONUS

If you have had the ROTH open for at least 5 years, you can withdraw from the account penalty-free (but not tax-free) for the following expenses:

First time home purchase up to $10,000 per account for you, your children, or your grandchildren.

For College expenses for you, your children, or your grandchildren. This can be a little tricky and you should contact your tax professional before starting this process.

Back to the Brandi’s Email

Here is the answer to Brandi’s question:

Hi Brandi,

Thanks for the question,

-Chris Peach

In a Nutshell…

For those of you who skipped to the bottom (you should really go back to the top), here is the ROTH IRA breakdown:

After-tax contributions up to $6,000/year per person ($7,000 if over age 50) in 2020

Tax-free growth for the investment inside the ROTH IRA

Tax-free withdrawals at age 59 ½ (or for qualified withdrawals – see above)

Where Can I Open My ROTH IRA?

You can really open a ROTH IRA anywhere. Almost all investment companies, banks, and financial advisors offer ROTH IRA accounts.

Here are the questions I would be asking:

Is there a fee to open the ROTH IRA?

What are the annual expenses for the ROTH IRA?

What can I invest inside the ROTH (mutual funds, ETFs, managed funds, etc.)?

What are the fees for buying/selling inside the ROTH?

Is this a DIY account or will and advisor be helping me?

There are 2 places I recommend starting your ROTH IRA based on the ease, understanding, fees, and whether or not you are a DIY type or would like help from an advisor.

Betterment

No trade fees, no transaction fees, no rebalancing fees, and the lowest expense ratios available. This is a DIY setup, but also a great way to get started with your ROTH IRA.

Betterment

Personal Capital

Fees are not as low as Betterment, but they are still lower than 95% of investment brokerages you will find. Fees are higher because you will have your own human advisor to help you get started. You can also try their free app which allows you to see all of your account in one place in real time. I use personally use this tool to track my own net worth in real time.

Personal Capital

**Full Transparency

Now You Know About the ROTH, What About Your Friends?

Thank-you so much for reading and supporting this blog. If you know anyone else who should also be opening a ROTH IRA, why share this on social media or send them this post? You can do either of these by clicking the social buttons above!

Cheers,

-Chris Peach

How Does a ROTH IRA Work? published first on https://justinbetreviews.tumblr.com/

0 notes

marymosley · 5 years

Text

11 Financial Mistakes Lawyers Make

Let’s be honest. Law school didn’t teach us a lot about personal finance. We barely covered the law and many corporate lawyers would probably say the skills we learned related mostly to litigation. But then you’re thrust into a career, with a ton of student loan debt, and you realize you have a second job (whether you want to or not) managing your money. Let’s make sure we’re doing it right. Here are some of the top financial mistakes lawyers make:

1. Inadequate Savings Rate

Lawyers need to have a higher savings rate than the general population. You must save more than 5-10% to be successful.

Why? Because lawyers get a late start in the workplace. A typical college-grad expects to spend 43 years in the workforce. A typical lawyer might spend 35 years working.

Not only do lawyers start saving later in life, but before they can begin saving for retirement they must contend with significant student loan debt.

In other words, if you have student loan debt it will take some time before you reach net worth zero, which puts you even further behind. To catch up, you should be both reducing debt and saving for retirement.

For these reasons, lawyers need to be saving significantly more than 5-10% of their income. How much should be saving? The math is surprisingly simple. You need to save 25 times your desired annual income in retirement. Think you would be fine living off $100,000 a year? You need $2,500,000.

Keep in mind that your spending in retirement will almost certainly be substantially less than your current spending. You won’t be saving for retirement, nor will you be paying for most insurance products (e.g. life, disability, etc).

Also, your taxes are likely to be lower, particularly if you’re working in an expensive city like NYC or San Francisco. Retired people also have a lot of free time, so you won’t be spending money for prepared meals, cleaning services or someone to fold your laundry.

2. Over-Entertainment

Lawyers work long and often unpredictable hours and unwind late in the evenings with colleagues and friends. Hight stress jobs have a mentality of “work hard, play hard”. The result is that it’s easy to over-consume entertainment, alcohol and food.

The financial and physical cost of such over-consumption cost be high, but more importantly to you, it’s unnecessary. Unless you’re keeping track, most people will only have a fuzzy idea of the total amount they’re spending on entertainment each month.

If you’re trying to cut back, ask yourself how many times you need to go out each week? Do I need top-shelf alcohol for every drink? Do I need to be spending $80 at a restaurant 2 times a week plus have brunch with friends? What about movies/shows/sporting events? Do I need more entertainment or do I need more sleep? What about my cable bill? If you take some time to audit your entertainment expenses, it’s easy and painless to cut unnecessary expenses from your life.

I’m willing to bet you’re paying for things right now that you don’t use or enjoy.

3. Being Unaware of Firm Benefits

I’m always surprised when I discover a lawyer that isn’t aware of the firm’s entire benefits package. From large firms to small firs, nearly Every employer provides a bonanza of benefits for the taking.

If you’re in Biglaw, the firm will probably pay for meals after a certain hour or taking a car home .

If you’re at a small firm, you may have a high-deductible healthcare plan, which gives you access to the Health Savings Account. You might also be able to participate in taking transit deduction. All you need to do is take some time to understand you firm’s benefits.

Firms often also pay for things like bar membership, attorney registration fees and sometimes travel for conferences. They pay for professional development and continuing legal education. Firms subsidize your mobile phone bill. They even provide you with corporate discounts on your mobile plan (just enter your email and save 15%). Dust off the new hire packet and see what you’re missing.

4. Poor Tax Management

Financially successful lawyers manage their taxes and use tax-advantaged accounts. They use tax-advantaged accounts before investing in taxable accounts.

For many high-income lawyers, every dollar put into a tax-advantaged account saves around $0.40 in taxes. Because a lawyer’s marginal tax rate is always higher than his effective tax rate, by contributing to retirement accounts he can save his marginal tax rate today and pay his effective tax rate tomorrow in retirement. This tax arbitrage will add thousands of dollars to your savings.

What types of tax-advantaged accounts are available? Start with a 401K. Then learn about Backdoor IRAs. Once those are funded, max out your Stealth IRA (HSA). Then read a book about taxes. Once you have a basic tax understanding, you realize that it’s more important to change your tax behavior throughout the year than it is to focus on taxes on April 15th. Planning your tax strategy for next year will likely save you thousands of dollars.

Keep in mind that you don’t have to learn the entire tax code. All you need to understand is the tax code that’s relevant to you. Luckily, that’s a significantly smaller part of the overall tax code. If you learn only a couple of things a year, but the time you’re five years out of law school you’ll be a tax master.

5. Poor Debt Management

It’s no secret that many lawyers graduate law school with substantial debt.

Often, poor debt management begins during undergraduate years and compounds during law school. I’ve been there. Law school debt is funny money and it’s easier to spend it than when you incurred your first $1,000 of credit card debt.

For new lawyers, the debt manifests in student loan debt, credit card debt, vacation debt and sometimes mortgage debt. The cumulative interest paid on these debt becomes a major financial drag. The truth: your debt works harder than you. It’s working 24/7 and 365 days a year generating interest that you have to pay back. The sooner you destroy it, the better.

Earlier in your career, you’re likely to be overwhelmed by many competing demands, such that it’s easy to put things on auto-pilot (like your student loans).

Big mistake.

If you’re planning on paying off your student loans (i.e. not pursuing student loan forgiveness through a plan like PSLF or IBR/REPAYE), refinancing your students loans is a no brainer. You’ll save tens of thousands of dollars.

Holding a $150,000 debt at 6.8% a year generates a staggering $10,200 in yearly interest. Cutting that rate to 3.4% will save you $5,100 a year. That’s a hard return to beat for a few hours of work.

I’ve negotiated cashback bonuses with the student loan refinancing companies, so that you can get a bonus and pay off your student loans even quicker.

6. Investing Too Aggressively or Too Conservatively

In 2008, hedge fund manager Ted Seides made a $1 million bet with Warren Buffett on whether the S&P index fund would beat a portfolio of hedge funds over the next ten years.

How’s the bet going?

Buffett crushed him.

Warren Buffett has consistently advised making monthly investments in a low-cost index fund. On page 20 of his 2013 letter to Berkshrire shareholders, he writes:

My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.

Because lawyers start careers later in life, there can be pressure to be overly aggressive with investments. This is foolhardy.

The greatest portfolio returns are achieved by matching the market returns through a low-cost index fund. It’s a counterintuitive proposal that the best return is to be as close as possible to average but it’s a proposal that has borne out time and time again.

As Vanguard founder Jack Bogle said, we are collectively the entire market anyway. Splitting the returns between you and the “helpers” just leads to lower returns for you.

This may be hard to accept. Lawyers might think that they are smarter than the general population, so it’s reasonable to think they can beat the market. But, financial professionals themselves cannot beat the market (as evidenced by Warren Buffett’s $1M bet). It’s too risky, too complicated and too much trouble to try and select winning investments. Take a billionaire’s advice. He probably knows what he’s talking about.

Plus, while you’re building wealth, the most important number is your savings rate anyway. Too many people are focused on chasing returns when they barely have any assets anyway.

7. Not Knowing How to Get Rich

It turns out that living below your means is the only way to build wealth. Building wealth has two variables: income and expenses.

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery. – Wilkins Micawber from David Copperfield.

Most Biglaw associates have a fixed income. Make sure you qualify for the annual bonus, but otherwise, your salary is set and so there is not much you can do to increase income. However, you have great control over your expenses. Focus on increasing your savings rate. Related: See my sample 1st Year Biglaw Associate Budget.

8. Not Having a Written Financial Plan

An Investment Policy Statement (IPS) is a statement that defines general investment goals and objectives. It describes the strategies that used to meet these objectives and contains specific information on subjects such as asset allocation, tax rates and financial goals. Having an IPS provides the foundation for all future investment decisions made by an investor and serves as a guidepost for your financial goals.

Your IPS need not be complicated or lengthy. An IPS can easily be 2-3 pages. If you do not have a written policy, day-to-day events will influence your financial decisions. This leads to chasing short-term performance that will impact your long-term goals.

Your IPS will be a short document answering basic questions like:

Where are your financial assets located?

How much is in tax-advantaged accounts versus taxable accounts?

How much will you be contributing to these accounts?

What are your short-term and long-term financial goals?

What asset classes will you use to meet these goals?

What is your effective tax rate?

What type of insurance policies do you have and what type of coverage do they provide?

9. Expensive Investments

The price you pay for investment advice has a significant impact on your overall wealth.

Many mutual funds charge an expense ratio for investing in their fund. If your fund has an expense ratio of 1%, then that means that for every $10,000 you have invested, the fund will take $100 each year to cover its expenses (regardless of whether the fund makes or loses money during the year).

Rather than debiting this money from your account, the expense ratio is baked into the fund’s annual returns. If your fund returns 4% over the year, the real return was 5% minus the 1% expense ratio.

As you can see, a 1% expense ratio may not sound like much but can be quite expensive. In the above example, a 1% expense ratio represented 20% of your total gains for the year paid over to the fund manager!

10. Assuming You’ll Have More Money in the Future

Lawyer salaries are weird. Biglaw associates are promoted each calendar year automatically and receive a corresponding salary increase. There are no opportunities to negotiate the raises, yet you know in advance your salary for the next year.

It makes it easy to assume that you’ll always be making more money in the future, which allows you to artificially inflate your lifestyle now. It also makes it easy to put off saving.

Yet at the same time many Biglaw associates do not know if they will be employed at a firm within five years. Many lawyers leave during their 3rd or 4th year (my assumption is that the large salary increase from a third to fourth year associate is an attempt by firms to retain associates during those years).

The reality is that outside of law firms there are no guaranties for large salary increases each year. Therefore, it seems much better to assume your salary is fixed and simply bank the raises. This helps you grow into your lifestyle slowly.

After all, making even $100,000 straight out of school is a huge windfall. If you set your salary at the latest biglaw salary scale, you will be able to save a substantial sum of money as your salary increases.

11. Buying a House/Apartment

Many Biglaw associates live in high cost of living locations. Therefore, they may be less likely to buy an apartment or home than a doctor living in Kansas. Still, many associates focus on purchasing real estate early in their career. The prevailing notion that “you’re throwing your money away on rent” is prevalent. But it doesn’t always work out well.

It may be easy to make a profit on the sale of a home, but lose money overall. This is because the cost of owning a home is high and often not included in the calculation when someone casually mentions that they “bought a condo for $600,000 and sold it four years later for $700,000”.

Plus, investments tend to go up as well. The person who bought a condo for $300,000 twenty years ago and sold it for $1,200,000 sounds like a genius but probably would have done better in the stock market with index funds.

Also, consider the outcome if you had bought a condo in NYC in 2006 right before the Great Recession. A lot of lawyers lost a ton of money during that time. If you’re considering purchasing a home, make sure to run your numbers through The New York Times Rent vs Buy Calculator.

What do you think? Have you made any of these mistakes? I know I’ve made several. Let us know what you think in the comments.

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themoneybuff-blog · 5 years

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18 Two-Minute Chores to Tackle Right Away

All too often we explain away our lifestyle or money messes by saying, I just dont have time to do [whatever would have prevented the problem]. Heres a simple, supremely effective tactic: Any time something can be done (or at least well-begun) in two minutes or less, then for heavens sake, do it! The two-minute rule cant fix everything in our lives. But applying it helps to keep chores and paperwork from piling up quite so high. Every time a little thing doesnt add to the big things, our lives get better. More to the point, a small block of time can result in ongoing dividends. For example, shopping apps can get you discounts, cash back, or even refunds if a price drops. Downloading apps like Ibotta, Earny, Shopkick, Paribus, or Cartwheel gives the chance to both save and earn money when shopping for essentials and treats alike. Some of the tips in this article are simple productivity hacks. Others could completely change your financial life. All take just a couple of minutes at a time, and will move you further along the road to financial security. 1. Pay attention to your accounts. Personal finance author Beverly Harzog checks her credit card accounts every morning. It takes very little time, says the U.S. News & World Report columnist, and is a great way to catch fraud in the early stages. Dont want to check every day? Let the account tell you, by setting up an alert. Ask the bank or credit union to let you know when a bill has been paid or a debit card is used, or have the credit card company flag any transactions over a certain amount. Or over any amount, maybe: Jim Wang of WalletHacks.com has his card alert him to every. Single. Transaction. Yes, he really did set the alert amount to $0.00. You hear all these stories of people getting ripped off in $5 and $10 amounts because they dont notice, Wang says. These alerts let you know immediately that somethings wrong. The sooner you report fraud, the fewer losses a card issuer has to eat and remember, the cost of fraud gets passed along to all consumers eventually. 2. Order a free credit report. Are you checking your credit report often enough? You can do it for free three times a year (once for each of the major credit reporting bureaus) by visiting AnnualCreditReport.com. Requesting one report every four months can prevent small issues from becoming big ones. For example, if the report says you missed a payment but you really didnt, write to the credit bureau and get this fixed. Or perhaps theres an account on there that you didnt open. That could be a simple mistake but it could also be a sign of fraud. 3. Consider credit monitoring. Depending on what kind you choose, a credit monitoring service will do things such as check for account applications (bank, phone, credit, utilities) made in your name, provide identity theft insurance, monitor your personal information across thousands of databases, and alert you if there are any changes to your credit report or score. Some of these services are even free, such as Credit Karma and Credit Sesame. Personal finance writer Cameron Huddleston says one such alert clued her in to a drop in her credit score. Turns out she had a payment that she didnt realize was late. I quickly fixed the problem and raised my score in the process, says Huddleston, life and money columnist for GOBankingRates. 4. Set up automatic payments. If youre confident youll always have enough in your checking account, put your bills on auto-pay and let them take care of themselves. No more missed payments! Not everyone can (or wants to) keep that much in checking from month to month, though. Due to the hectic nature of life, Lee Huffman of the Bald Thoughts blog suggests setting up payment for at least the minimum amount each month. You can still pay bills in full manually, but setting an automatic minimum means no more late fees, ever. 5. Download your banks mobile app. Having your phone talk to your bank makes it easy to check account alerts wherever you are. Some apps offer other perks, such as letting you deposit checks remotely rather than having to drive to the bank (big time-saver) or letting you make person-to-person payments (helpful for stuff like chipping in on a shared utility bill or reimbursing a friend who picked up the tab at dinner). 6. Look into student loan refinancing. Some scholars graduate with scary amounts of debt. Figuring out whether to refinance your student loans is a complex subject, since its based on individual circumstances. However, refinancing could also change your life, if only by getting you out of default and on track to a solution. To find out more about whether its right for you, see Student Loan Consolidation: Pros and Cons. 7. Set up automatic savings. If you dont already have an emergency fund, this is a great way to get started. It shouldnt take more than two minutes to log into your bank or credit union account and set up a recurring monthly (or weekly) transfer into a separate emergency fund. Set it and forget it. Or maybe youre aiming for other kinds of savings: a pay cash for the next car fund, a 529 plan for your kid, or a pot of money that youll funnel into real estate or some other investment. No matter what kind of savings youre aiming for, be sure to make the amount sustainable. Specifically, dont commit every non-budgeted penny, because life brings surprises that take you over budget. 8. Deal with the mail. Dont throw it onto the table or desk because its mostly junk anyway. Take two minutes to weed through the junk and toss it into the recycle bin or trash. Otherwise, the pile of untended mail gets bigger and bigger, and you run the risk of missing something. For example, if a bill gets hidden in the stack and doesnt get paid, youll incur a late fee, and maybe even a ding on your credit report. (Yes, some of us do still get bills in the mail.) Bonus: Less clutter = less irritation. A tidy living space is very calming. And speaking of tidiness 9. Try some stealth cleaning. Choose a chore that can be done within two minutes. Vacuum one room. Move the laundry from the washer to the dryer. Clean a toilet. Scoop the cats litter box. Carry the trash out to the garbage can or dumpster. This works best if every member of the household takes on a daily two-minute task. Even toddlers can dust, and preschoolers can empty the bathroom trash or carry dishes to the sink. Little by little your living space will get tidier and youll feel better. In the best-case scenario, youll get in the zone and do two or three such chores. Now: Take the money you were considering putting toward a weekly housecleaning and use it for something that advances your personal financial goals. 10. Contact your insurance agent. Sometimes life changes or home upgrades make you eligible for discounts on your insurance policy. Keep your agent updated by e-mail or phone if, say, youve started to carpool (or to work from home), or if you had a home security system installed. Even if nothing changes, get in touch with your agent to ask about other potential discounts. For example, a decent-enough price break for taking a driving course might be worth the cost of the class. Should your credit report or your teen drivers report card improve noticeably, see if that will improve the premium. Still not convinced youre getting the best deal? Then you should 11. Comparison shop for insurance. You can fill out an online quote form in just a couple of minutes and the results might really surprise you. The Simple Dollars insurancearticles can help you understand the different kinds of coverage and find a lower rate. That way you can buy exactly what you need, vs. paying for products that dont support your financial goals. While youre at it 12. Comparison shop for credit cards, too. Some people dislike the current credit scoring system, and in a sense theyre right. Why should they be penalized for paying cash? But its what we have, and a smart consumer will learn to work within it. Thats why if you dont have a credit card, you should get one to build your credit score. It could also be invaluable in case of the unexpected; twice Ive had to drop everything and fly thousands of miles for family emergencies, and having plastic made that much, much easier. And if youve already got a credit card? Make sure youre getting the optimum benefits. Whether youre looking for travel rewards or cash back bonuses,The Simple Dollars credit card section lays it all out for you. 13. Schedule some maintenance. Keeping on top of the manufacturers suggested maintenance on everything from vehicles to home heating systems means preventing problems versus trying to fix them. A friend drove her car for nearly 22 years that way. Dont neglect your own maintenance, either. For starters, see the dentist twice a year. Annual medical exams arent always necessary, but talk with a primary care physician about whether you should at least have lab work done plus any other tests appropriate to your age (e.g., mammogram or colonoscopy). Not only is it cheaper to fix a health issue caught early, it can sometimes be a matter of life and death. 14. Keep an ongoing grocery list. If you use almost all of the remaining toilet paper, cat food, toothpaste, or whatever, add it to the online shopping list right then and there. Dont use online shopping? Add it to the paper list stuck on the fridge. Because you probably wont remember that you need cilantro, cat food, or whatever else when youre at the grocery store later and might find yourself at a convenience store at 10 p.m., grumbling and paying a ridiculous amount of money for TP. 15. Cancel a subscription. Are you even reading those magazines? How often do you go to the gym? Did your kids excitement over monthly craft kits peak at oh, about four months in? Do you really need regular deliveries of makeup, clothing, or snacks? Most people probably have a subscription or two that they never got around to canceling, says Austin Grandt of the Financial Toolbelt website. Apps like Trim and Truebill will corral your current subscriptions, making it easy to weed through what you really want. Remember: These things are generally wants, not needs. And they can cost a lot more than you might imagine. 16. Get a library card. It might take you two minutes to find out whats required in your area, such as photo ID and a current utility bill, and then another two minutes to get a librarian to set you up. Totally worth it! Libraries buy books and movies and subscribe to magazines so you dont have to. Depending on where you live, the library might also lend out everything from toys to art to fishing gear. Libraries offer information on genealogy, social services, and other useful stuff, too. (The main library in my city houses the Cooperative Extension Service.) Many host a wide variety of activities, including but not limited to childrens story hours, public lectures, movie nights, clubs, resume-building workshops, tax help, and film appreciation nights. Most if not all of these things will be free. 17. Set things up before bed. Before you turn in, ready your breakfast supplies. When you stumble into the kitchen at 6:45 a.m. youll be greeted by your favorite mug, a batch of already brewed coffee (thanks, timer!), the box of cereal, and a bowl. So much better than rummaging around for coffee and filter, the cereal, and a bowl and mug while also trying to unload the dishwasher you ignored yesterday. More importantly, this helps cement the habit of eating breakfast at home, which is cheaper and healthier! than hitting the coffee cart or the fast-food drive-through on your way to work. 18. Set up reminders. Cody, the young-and-hustling author of the FlyToFI blog, uses his iPhones Reminders app to avoid errors as simple as forgetting to buy milk, or as potentially life-changing as failing to change the batteries in the smoke detector. This app, or any other reminders system, can save you money in the here-and-now, such as avoiding no-show fees for missed medical appointments. Reminders also help you stay on top of things that keep you financially healthy. Its so easy to think, I really should [look for a better rewards card/get scheduled auto maintenance done/buy life insurance] and then not do these things. If thats you, then set reminders. Re-set them if necessary. Sooner or later (preferably sooner) youll make Future Yous needs a priority. Award-winning journalist and veteran personal finance writerDonna Freedmanis the author of Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul and Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition. More byDonna Freedman: https://www.thesimpledollar.com/18-two-minute-chores-you-should-never-put-off/

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payprosalaska · 5 years

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Employees Have High Hopes for Bonuses This Year

Most employees expect to receive larger bonuses this year for their hard work than they received last year, and if they don’t, they’re likely to be disappointed.

According to a new survey by HR consultancy Korn Ferry, around 83 percent of employees surveyed said they anticipate receiving a bonus this year for work performed in 2018. This is in line with the percentage who said they received a bonus last year for their work in 2017.

Just over half (51 percent), however, expect the bonus they’ll receive—typically awarded in the first quarter—to be bigger than last year’s bonus.

In December, Korn Ferry surveyed 756 salaried and professional-level employees about bonuses at their organizations. The findings are presented in the infographic below.

Released Dec. 5 by the business research and advisory firm Gartner, the Global Talent Monitor report for the third quarter of 2018 also showed that workers now anticipate larger increases than last year’s for 2019 salaries and bonuses based on their 2018 job performance.

Employees’ base-pay expectations jumped nearly a full percentage point from the previous quarter, with workers expecting a wage increase of 3.9 percent in 2019 and bonus and merit payouts 3.8 percent larger than they received a year ago.

The Global Talent Monitor’s data are drawn from the larger Gartner Global Labor Market survey, for which some 22,000 employees were interviewed.

“Given strong economic performance across many U.S. industries in 2018, employees hold much higher expectations for greater increases in wages and bonuses going into 2019,” said Brian Kropp, group vice president of Gartner’s HR practice. As companies revisit compensation planning for the new year, “executives will need to factor in these employee expectations to remain competitive and to attract and retain talent, otherwise they risk losing their best workers to competitors.”

[SHRM members-only toolkit: Designing and Managing Incentive Compensation Programs]

Bonus Budgets Already Set

Companies’ budgets for 2019 bonus payouts may have been finalized months ago when the continued strength of the economy through year-end was uncertain. A midyear 2018 survey of 814 companies by HR consultancy Willis Towers Watson showed that employers were projecting that discretionary bonuses paid in 2019, generally for special projects or one-time achievements, would be slightly larger than companies budgeted for in 2018, averaging as a percent of salary:

3.9 percent for nonexempt hourly employees, unchanged from 2018.

5.9 percent for exempt nonmanagement employees, up from 5.7 percent.

9.3 percent for managers, up from 9 percent.

21.3 percent for executives, down from 21.9 percent.

However, annual performance bonuses tied to company and employee performance goals under a variable pay plan were budgeted to hold steady or decline slightly in 2019 for most employee groups. The budgets for these short-term incentive/bonus payouts were expected to average as a percent of salary:

5.7 percent for nonexempt hourly employees, down from 5.8 percent paid in 2018.

11.7 percent for exempt nonmanagement employees, unchanged from 2018.

21.3 percent for managers, down from 22 percent.

43.8 percent for executives, down from 44.6 percent.

In light of strong economic performance through the end of 2018, companies that are able to do so may want to consider being more generous with their payouts.

In any event, for variable pay plans that use performance-target ranges, at many companies incentives should trend at or above target levels, raising bonus sizes for top performers.

“Earnings growth in 2018 is up—dramatically—compared to 2017 in most sectors of the economy. As such, there’s a real chance annual incentive payouts that will be made in Q1 2019 (for 2018) will trend above prior year payouts,” noted Steve Kline, senior director for executive compensation at Willis Towers Watson, in an e-mail. “The bottom line is that, at many companies, bonuses should trend higher compared with prior years.”

“Organizations are facing increased pressure … to devise a focused strategy and plan on how to allocate their precious compensation dollars or risk losing some of their best talent,” said Sandra McLellan, North America rewards business leader at Willis Towers Watson.

Managing Expectations

“Bonuses can be purely discretionary, after-the-fact payments that are made as funds are available, or they can be used as incentives that establish the relationship between performance metrics achieved and the degree of payout,” said Tom McMullen, a Los Angeles-based senior partner at Korn Ferry.

While some companies may have unbudgeted funds available to enrich bonuses paid for 2018 performance, others don’t.

Under incentive arrangements such as a variable pay plan, however, “employees should be less surprised about these payouts,” McMullen pointed out. If they are surprised, he added, the organization probably needs to do a better job of the following:

Communicating about individual and team performance throughout the year.

Ensuring that employees understand how the program works by clearly stating what they have to achieve in order to earn incentive payouts or bonuses.

Employers can also assure employees that strong business performance throughout 2019 will be reflected in bigger bonuses next year. However, looking ahead to 2019 (and bonuses that would be paid in early 2020), “the current thinking is that the economy will soften somewhat,” Kline noted.

Beyond bonuses, “companies can use other levers within their total rewards program to motivate and retain employees,” said Catherine Hartmann, North America rewards practice leader at Willis Towers Watson. “This means providing enhanced benefits, such as parental leave, eldercare and tuition assistance, and career-oriented programs, such as formal mentorship and rotational assignments, that focus on where employees are in their life and career cycle.”