Tips to Invest Your Way

unduhan-73If your primary focus when it comes to investing is how to find a better strategy with a better return, you’re doing it wrong. The truth is that until you’ve built up a sizable portfolio, your investment return, surprisingly, doesn’t matter that much.

What really matters is your savings rate. It may not be sexy, but no amount of return can make up for not saving enough. You don’t have to take my word for it. Let’s look at a simple example.

Meet Jim and Olivia

Jim and Olivia are both 35. They both make $100,000 per year, have $30,000 in retirement savings, and want to retire at 65 with $2,000,000.

Jim takes the exciting approach of trying to maximize his investment return, and it turns out he’s really good at it! He’s able to earn a 12% return year after year, well above current market expectations.

Olivia’s approach isn’t quite as exciting. She goes the tried-and-true route of choosing low-cost index funds, which earn her a steady 7% return per year.

But there’s one other difference.Because Jim is so focused on his investment strategy, he never finds the time to save more than $3,000 per year. So even with his other-worldly (and, frankly, unlikely) returns, he only ends up with just over $1.6 million. That’s $400,000 short of his goal.

On the other hand, Olivia is a savings rockstar. She carves out enough room in her budget to save 20% of her income, or $20,000 per year. And even with her average returns she ends up with over $2.1 million.

By focusing on saving instead of returns, Olivia met her retirement goal and ended up with $500,000 more than Jim.

When Do Returns Start to Matter?

Wade Pfau, one of the leading retirement researchers, has shown that for the first DECADE of your investment life your annual return has less than a 1% impact on the success or failure of your retirement goal.

In other words, it’s a long time before your returns really start to have an impact on your final outcome. It’s your savings rate that matters most. So when do your returns become more important? Here’s a simple formula you can use to figure it out.

Let’s assume that a reasonable savings goal is 15% of your annual income. And let’s also assume that you will get a 7% investment return per year.

With those assumptions, the amount you save each year will be greater than the amount you earn from returns until your investment portfolio is 2.14 times greater than your annual income (15% divided by 7%). If you earn $100,000, that means that the amount you save every year will have a bigger impact than the amount you earn in returns until your investment portfolio reaches $214,000.

Save more!

Beyond following some simple rules and creating a “good enough” investment plan, your returns are largely out of your control. And the impact of getting better returns would be relatively small anyways. On the other hand, the amount you save is not only directly in your control but it has a BIG impact on whether you reach your retirement goal.

Bottom line: if you want to jump start your retirement savings, stop worrying about your returns and start saving more money.

How to Track Your Money Flow

unduhan-75Part of the reason we accumulate debt is that there are so many distractions in our lives — things we want to buy but don’t need. But we also ring up debt because we simply don’t understand the flow of our income and expenses, so we can’t accurately estimate how much money we have available to spend.
I’ve struggled with this myself. A few years ago, I put in place a “Money Flow” system to help my family track our spending. You may have heard of a system like this before, but follow along on this tour, because it really works.

Putting the pieces in place

1. Set up two free checking accounts:

  • One to pay fixed expenses (such as the mortgage, car payments and utility bills).
  • One to pay variable expenses (groceries, gas, clothing and so on).

2. Set up a high-yield online savings account.

We call this our “curveball” account. It’s an emergency fund for use when life throws us curveballs — large medical bills, a job loss or reduction in income, major home repairs, that kind of thing.

3. Make a plan for big-ticket items.

My husband and I agreed that we would use one family credit card for large purchases, such as airline tickets and hotel stays. We still have our separate credit cards – it’s wise to keep your own credit cards to maintain your credit score and credit history. Using them once or twice a year should be sufficient. And don’t close those cards because it will eliminate credit history you’ve accumulated and affect your overall credit score.

Implementing the system

1. Draw up a budget for fixed and variable expenses.

Add up how much you need in each category. This will be your guideline for how much should be in each of your checking accounts.
Fixed expenses might include:

  • Rent or mortgage payment
  • Property taxes
  • Utilities (gas, electric, water, etc.)
  • Home, auto and umbrella insurance
  • Life, disability and long-term-care insurance premiums
  • Health insurance premiums (if not taken out of your paycheck)
  • Cable TV, Internet, phone and cellphone
  • Gym or yoga memberships
  • Debt payments (credit cards, student loans, car loans, personal loans, etc.)
  • Savings (yes, this is an expense — pay yourself first!)

Variable expenses might include:

  • Groceries
  • Eating out
  • Gas
  • Clothing/shoes
  • Personal services (haircuts, doctor visit copays, etc.)
  • Entertainment

2. Distribute money to the accounts.

When your paycheck comes in, allocate the designated amounts into each checking account based on the budget you created. The sum earmarked for the curveball account can go there directly.

3. Pay fixed costs directly.

All bills are paid automatically from our fixed-expenses account. We do not have to write any checks, and no debit card is necessary. This account has a cushion of a few hundred extra dollars in case a bill shows up unexpectedly or before we have a chance to replenish the account.

4. Pay variable expenses from the second account.

This account should have a debit card, which you can use for purchases.

Top Tips About Your Hobbies Can Make Money

unduhan-74If you’re looking to generate extra income during retirement, you might want to explore ways to make your hobby into a more profitable venture. After all, hobbies are the things you choose to do — activities that, in most cases, you’d happily do for free. And pursuing a hobby-related business can make for a relatively smooth second-act transition since you likely have many of the skills, expertise and personal connections needed for success.

Fortunately, thanks in large part to advances in technology, the possibilities for monetizing your hobby — both locally and online — have never been better. So if you’re eager to turn your hobbies into retirement cash, here are five winning strategies to consider.

1. Teach Your Hobby

Whether you’re a skilled photographer, an experienced chef or a talented musician, there’s a good chance that others will pay you to teach them what you do so well. There are lots of ways to share your expertise. For example, you can set up shop in your home — just like your neighborhood piano teacher — or teach at a local adult education program or school.

Alternatively, you could aim to reach a broader audience and create your own online courses and deliver them via your own blog, or by using an online instructional platform like Udemy.com or Pathwright.com.

2. Sell Your Products Online

In the past, crafters who wanted to sell their homemade goods were typically limited to crafts fairs and farmers markets. But thanks to the proliferation of online marketplaces, the options for selling your products online have improved dramatically. Etsy is probably the best-known marketplace for artisans and crafters, but there are plenty of other smaller sites you might want to consider like ArtFire.com, Zibbet.com and HandmadeArtists.com.

3. Write About Your Hobby

Hobbyists enjoy reading books, magazines and how-to articles about their passions. So if you love to write, there might be a way to profit from writing about your hobby. You can search for freelance writing assignments on sites like MediaBistro.com, FlexJobs.com or VirtualVocations.com. Another option is to start your own hobby-related blog. While it will likely take time to build up a significant fan base, once you do, you can monetize your site through advertising, sponsorships or by selling your own digital information products — like e-books, downloadable tool kits, worksheets and more.

4. Create New Products Related to Your Hobby

Every hobby comes with its own set of specialized clothing, accessories, gear or gadgets. For example, yoga enthusiasts purchase quick-dry fitness pants, cooks invest in fancy knives and bicyclists buy specially designed aerodynamic helmets. Hobbyists tend to be very willing to spend money on products related to their hobby, so if you can craft, invent or import a unique accessory for your fellow enthusiasts, you might be able to build a profitable income stream to supplement your retirement.

5. Lead a Hobby-Related Tour

Baby Boomers spend an estimated $120 billion annually in leisure travel, according to a 2015 AARP Travel report. The survey also showed that international bucket list trips are growing in popularity, as 32 percent of Baby Boomers traveling in 2016 will be heading outside the United States. You can take advantage of this trend by leading a hobby-related tour. As an example, Laney Sachs is a boomer who loves Italy and loves to cook. She organizes and leads one-of-a-kind food-related tours to Italy via her online blog, OrtensiaBlu.com. Another example is CheeseJourneys.com, a company that offers behind-the-scenes access to cheese makers, wine producers and food experiences that few culinary travelers can discover on their own.

The Secret of Financial Freedom

Financial planning should not be difficult or confusing. The steps recommended by A.D. Financial Planning are simple and straightforward. If you don’t understand an investment, you should not invest in it. The same is true for a plan to build wealth; if you don’t understand it, chances are it’s not going to work for you. A.D. Financial Planning uses ten steps to take your finances from where you are to where you want them to go.

1.    Create a written spending plan

A budget, or spending plan, is the single most powerful, practical tool for wise money management and is the foundation for the 10 Steps to Financial Freedom. Money that comes in with each paycheck and does not have a written purpose will mysteriously vanish! You’ll wonder why you have more month than money – it is because you didn’t have a written plan! No one wakes up in the morning excited about the idea of putting together a budget.  Using a budget is not the goal.  A budget is a means to the goal. Do you want to become debt free? Buy a house?  Take a special trip? Now those are goals that will get you up in the morning, and using a budget will help you get there! To help you get started, A.D. Financial Planning has a budget guide on this site. For additional help, contact us, A.D. Financial Planning can show you how to setup an easy to use budget. Additional information on spending plans and budgets can be found under our Investment Advice menu.

2.    Create a beginner emergency fund

You’ll never make headway in your mission to get out of debt if you don’t have some savings — at least a little something to fall back on while you are getting started. This is usually $500 – $1000 to use in case an emergency comes up while you are beginning your steps to financial freedom. Contact us, A.D. Financial Planning can help you with ideas to get this first beginner emergency fund started.

3.    Get your employer match

If your employer matches part of your retirement savings, through a qualified retirement plan, save an amount to maximize this match. Many employers match dollar-for-dollar up to a certain percentage that you save. This is like getting a 50-100% return on your investment! Very few, if any, investments or bill interest rates offer this great of a return on your investment. If your employer does not offer a retirement savings match, proceed to step 4. Contact us, A.D. Financial Planning can help you choose the funds in which to start your employer sponsored retirement savings.

4.    Get out of debt

List all of your debts (except your house -that comes later). Some choose to list the debts smallest to largest based on the balance, others choose to list the debts largest to smallest based on the interest rate. For most individuals and families the smallest balance method works best because paying off that first debt, even if it is a small amount, is a victory! That victory gives you momentum to pay off the next largest debt and the next largest debt and the next largest debt… you get the picture. The right way depends on you; the goal is to pick one debt and attack it! While attacking that debt, all other debts get only minimum payments. When the first debt is gone, you take the payments you were making on the first debt and add that money to the minimum payments you were making on the second debt. Now that second debt is in your focus and is obliterated at an even faster rate than the first. This process is continued until all debts are gone! Contact us, A.D. Financial Planning can help you setup your budget and plan your payment schedules to be sure your money is working as hard as you are!

5.    Expand your emergency fund

Rain falls on the just and unjust alike. Everyone is going to have an unexpected home or auto repair, a job loss or an unplanned medical bill. By expanding your emergency fund from your beginner balance to 3-12 months of living expenses you will have gone a long way to eliminate the “what if” stresses in your life. Those things that used to be financially disastrous are now merely an inconvenience. Your money should bring a sense of peace, not stress or worry. Remember that spending plan you created in step 1? This is another use for it. Sum up your monthly living expenses to determine your emergency fund. A.D. Financial Planning recommends the following size emergency fund:

  • Single person: save and set aside 3 months of expenses
  • Two income family with stable jobs: save and set aside 3-6 months of expenses
  • Single income family or two incomes with unstable jobs: save and set aside 6-9 months of expenses
  • Self-employed family: save and set aside 9-12 months of expenses

6.    Save for a major purchase

You’ve started saving for retirement, paid off all your debts and set aside enough money to cover emergencies. Great job! If you need to save for a down payment on a house or to pay cash for a car, this is the step. Save at least 10% of the home price for a down payment; 20% is even better because you’ll avoid the added Private Mortgage Insurance (PMI) that lenders require for down payments less than 20%. Never finance an automobile purchase; always save enough to pay for a vehicle purchase. Contact us, A.D. Financial Planning can show how to calculate home payments and discuss savings strategies.

7.    Invest for retirement

The younger you start, the longer your money has to grow. There is a benefit to starting saving early; A.D. Financial Planning recommends saving the following percentage of your annual pre-tax (gross) income into your retirement account(s), based on when you start saving:

  • Starting in your 20’s: save 5-10%
  • Starting in your 30’s: save 10-15%
  • Starting in your 40’s: save 20-25%

In step 2, you began saving and maximized your employer match, if that percentage does not exceed the recommended percentages, next start saving in a Roth IRA, if you are income eligible. Roth IRAs allow your savings to grow tax-free! If you maximize your employer match, and maximize Roth contributions, then return to your employer sponsored plan and continue to contribute until you meet your recommended percentage. Your golden years should be filled with satisfaction and dignity; you must start planning for those years now in order to make that happen! Contact us, A.D. Financial Planning can help you find the best investments and we can educate you on the financial markets.

8.    Invest for college

If you have children, then you’ll probably have worries about how to pay for college. The earlier you start, and the more attention and funding you’re able to give to it, the better off you and your kids will be. College tuition inflation averages around 5 to 7 percent per year (much higher than standard inflation, which averages around 2 to 4 percent per year). Because college costs are going up quickly, you will want to be sure to use tax-advantaged accounts (such as 529 plans or Education Savings Accounts) to their fullest extent. Contact us, A.D. Financial Planning can help you budget for college and manage educational savings.

9.    Pay off your home

Now that you have your debts gone, your retirement funded and your children ready for school, it’s time to pay off your home. For most individuals this is often your largest monthly payment. Yes, we know home mortgage interest is a tax-deductible expense! If you are in the 30% tax bracket, how wise would you say it is to continually pay, say, $5,000 in interest to a bank each year, just so that you won’t have to pay $1,500 in taxes to the government? The small minority of folks who own their homes debt-free don’t mind paying $1,500 instead of $5,000 one bit! Additionally, making a charitable donation can have the same tax advantage as your mortgage interest deduction! Contact us, A.D. Financial Planning can calculate an accelerated payoff schedule, show you how a paid for home will affect your investments and more.

10.    Build Wealth and Bless Others

Your debts are zero, your savings are full, your retirement is funded and your children are financially ready for school and now you live in a paid for home – wow! Quickly your money is going to be earning more than you are. Taking all the payments you used to make to everyone else and investing it is going to make you very wealthy. If you invested $1,500 a month (what you used to pay to the credit card companies and to the bank) at 10% interest, you would have over $1,000,000 in less than 20 years! It’s not fast, but it’s worth it. 

How to Merging Finances with Your Partner

Here are four pieces of advice as you go through this process yourself.

1. Focus on Joint Goals, Not Joint Accounts

It’s tempting to get caught up in the logistics of joining your finances. How do you create joint accounts? Which accounts should you join? What if you want to keep some money for yourself? Does that mean your relationship is in trouble?

Ignore all of that. It doesn’t matter. At least not at the start.

What really matters are your joint goals. What are you working towards? What is your shared vision for the life you’re building together?

Start having conversations about what you each value and want out of life. Listen to each other so you can truly understand what’s important to the other person.

Find the goals you already have in common and make those the priorities. And start talking about how you can find middle ground on the others.

This communication is the real key to successfully merging your finances. All the rest is just logistics.

2. Establish Shared Expenses

Now, about those logistics…

One easy place to start is with your everyday expenses. Things like cable, internet, electricity, and groceries.

Decide which expenses you want to share and how you want to split them up. For example, if one person makes significantly more, maybe they’re responsible for a bigger share of certain expenses. That way each of you is left with some free money at the end of it.

3. Create a System

There are two main ways you can start sharing those expenses.

The first is to create a joint bank account where those bills are paid. Then you each are responsible for transferring money to that account on a regular schedule to cover the bills. This lets you practice managing a joint account without having to join everything.

Another option is to put each person in charge of certain bills. For example, one of you could handle the cable bill while the other handles the electricity bill. This kind of system may be easier to get up and running quickly.

Also, create a system for long term savings. I know someone who gave half their paycheck to their partner to invest for the long term. This might not be the right move for you, but start by discussing each of your current habits and how you might change those or improve on them as a couple.

4. Plan for Extra Money

Here’s something my fiance and I have done that’s helped us a lot.

In addition to our regular expenses and savings, we each have a number of “wants” that our extra money could go towards. For example, I’d like to get curtains and my fiance wants gardening supplies.

So we made a list of these things and put them in priority order. And now any time we have some extra money, we simply refer to this list and put it towards the top item.

This makes these decisions easy, limits the opportunity for arguments, and ensures that we’re both able to indulge a little bit.

Six Retirement Surprises That May be in Store for You.

Think you know what’s coming after you leave work? You might expect sunny days and free time to do anything you please. But you might be in for some partly cloudy weather.

Even if you’ve carefully planned your retirement party, your travel plans and your investment portfolio, you may be less prepared than you think — and not just financially. Everything from relationships to health to how you feel about not being employed can change in surprising ways.

Of course, some of these post-career discoveries might not pertain to you. We’ve come up with six retirement surprises that may be in store for you.

1. Maybe working isn’t so bad after all

Some people miss work after they retire — so much so that they go out and get another job.

“One of the things that surprises me, pleasantly, is when a client will retire, and we have worked out this plan for their finances and how they can live off savings, and then they call six months after retirement and say, ‘I got a consulting job with my former company, and I don’t need money from my investments anymore,'” says David Munn, Certified Financial Planner with Munn Wealth Management in Maumee, Ohio.

Some people are thrilled to hang it up after a long career, but many people derive a great deal of satisfaction and identity from their careers.

“Work gives us structure and meaning in our lives, and unless we have large periods of unemployment, it’s hard to predict what kind of changes might unfold,” says Derek Milne, retired clinical psychologist and author of “The Psychology of Retirement: Coping with the Transition from Work.”

2. Retiring is stressful

Even if you’re more than ready to tell the workplace to kiss your behind, actually transitioning to the state of not working can be stressful. Not only do people need to get used to their new retired identity, but they also have a bunch of really complicated financial decisions to make.

“From a financial perspective there are a lot of decisions to be made,” Munn says. “There are decisions about when to take Social Security; decisions about pensions; decisions about health insurance; about their investments.”

Many of the decisions are irreversible. It can be stressful to make decisions that will literally affect you for the rest of your life.

3. You may need more (or less) money than you thought

Blindly following a rule of thumb can backfire in retirement. For instance, it’s commonly said that retirees will need about 80 percent of pre-retirement income, but that’s not always true.

“People may choose to travel quite a bit, which means they are spending more than they were (before retirement),” Munn says. “And others have such simple lives that they may spend far less than they ever thought they would — especially when you consider that they may have paid off their mortgage shortly before retirement.”

Similarly, withdrawing 4 percent of your portfolio simply because you heard it was the safe rate of withdrawal can be a recipe for disaster.

“A lot depends on how they have their money invested. If someone just has CDs, for example, they are earning very little. If you factor in inflation to expenses, if they start at 4 percent, a few years down the road they are at 6 or 7 percent, and their portfolio is going to be depleted very quickly,” says Munn.

4. Health care really is expensive

The glow of the golden years can dim if you don’t retire voluntarily. File this in the unpleasant surprise category: Sickness or injury can knock people out of the workforce for good.

“Some people who are counting on continued income can be forced to stop work early, and that can have an impact on their financial situation,” says David Baxter, a senior vice president at Age Wave, a research and consulting firm.

The No. 1 reason people retire early is due to health issues, he says.

Out-of-pocket health care costs can be another unpleasant surprise. The median per capita out-of-pocket health care cost for people 65 and older was $2,149 in 2010, according to the “Expenditures of the Aged Chartbook, 2010,” released by the Social Security Administration in March 2013.

Spending a lot for health care means many trips to the doctor. No matter how much free time someone has, that can’t be fun.

“A lot of the older clients — those in their 70s and 80s — one of their complaints is that they spend all of their time going from doctor visit to doctor visits,” Munn says. “Going along with that, I have clients that express frustration that they can’t get as much accomplished as they used to.”

5. Relationships may get better

Are you worried that too much contact with your significant other might breed contempt instead of contentment? In the pleasant-surprise category, retirement comes with some perks, including the prospect of a happier marriage, according to a 2013 survey by Merrill Lynch and Age Wave.

The survey of respondents age 50-plus found that nearly half — 48 percent — identified their relationship as more fulfilling after retirement, while 45 percent said it was more loving. One-third of respondents reported their marriage was more fun. Just 1 out of 10 identified their relationships as boring, while 11 percent said it was more contentious.

6. Someone always needs help

With fewer expenses and a stockpile of savings, retirees are often called upon to bail out family members. The Merrill Lynch/Age Wave survey found that many families lean on their parents and grandparents for money. Some 68 percent of people age 50 or older had provided financial support to their adult children in the last five years. Unfortunately, 88 percent of those 50-plus hadn’t planned to provide support and didn’t budget for it.

“A lot of people in their retirement or pre-retirement years are seeing their adult children struggling significantly and reach into their pockets to help,” Baxter says. “At the same time, many people have aging parents. Today, many people who are in their 60s or 70s or even older have parents who are still alive and need care and financial support.”

Need to Know Business Ideas for Teens

Zandra Cunningham loves lip balm — so much that she used to ask her dad to buy her a new tube every day. Exasperated, he joked that she should make her own.

So she did. She was 9.

Six years later, her Buffalo, New York-based business, Zandra, sells 37 natural, homemade skin products in stores in six states and online at ZandraBeauty.com, Etsy and Amazon.

“I want the company to be as big as it can,” says Cunningham, who earned $50,000 in net profit last year. “I think Zandra should be in stores across the world.”

Cunningham proves that even young people can start successful businesses.

Entrepreneurship gives teens and younger kids “an opportunity to test themselves,” says Ed Grocholski, senior vice president of brand for Junior Achievement, a nonprofit that helps K-12 students learn entrepreneurship and financial literacy. “It’s a really great way for kids to learn self-confidence.”

Finding small-business funding is a concern for entrepreneurs of any age, but teens can focus on businesses with low start-up costs. Here are five ideas:

  1. Web/app development.Small-business owners often have little time to develop their online presence. Teens can harness their tech knowledge and coding skills by creating websites and apps for local businesses. Show potential clients websites you’ve already created to come off as professional and prepared, Grocholski advises.
  2. E-commerce.Online marketplaces are a great outlet for crafty teens. Selling online means access to a national, and sometimes international, customer base. Cunningham, for instance, used her Etsy page to generate wholesale deals. But keep your products unique. The downside of online marketplaces is that everyone can sell his or her jewelry/scarves/pottery.
  3. Social media.You might speak emoji like a second language, but not everyone does. Use your skills to help clients, such as small-business owners, spread brand awareness by establishing a presence on sites like Facebook, Twitter and Instagram.
  4. Traditional services. Classic summer endeavors, such as mowing lawns and babysitting, are still great options. Take your business to the next level by spreading the word beyond the neighborhood. Online marketing is an inexpensive way to promote your business, but word of mouth is still the best tool. “When you have an established customer base,” Grocholski says, “start asking for referrals.”
  5. Tutoring and music lessons. Do you excel at school? Turn studying into profit by forming a tutoring company, either alone or with studious friends. Consider focusing on a specific subject area, such as a foreign language or SAT/ACT prep. If you’re a trumpet aficionado, offer after-school music lessons.

What is End of the Euro

An 11-year-old boy went viral this week – not an unusual occurrence in itself, but perhaps somewhat more unexpected because his entry into the halls of internet celebrity came in the form of an illustrated solution to the European debt and currency crisis.

Jurre Hermans of the Netherlands submitted  a hand-drawn diagram of a euro-drachma swap, complete with an unhappy Greek citizen, to the Wolfson Economics Prize contest held by noted euro-skeptic Lord Wolfson of the U.K. Jurre’s answer to the question “If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed to provide the sounded foundation for the future growth and prosperity of the current membership?” was  published alongside five more serious entries competing for pieces of a $250,000 grand prize.

Simple as the Dutch boy’s entry may have been, it more or less accurately captured the struggle faced by any nation contemplating bailing out of the common currency.

Greece’s problems are fairly simple and well-understood, though sometimes obfuscated by foreign reporting. The main issue is a crippling debt load largely owed to German and English banks. Working without an effective tax collection system and crippled by massive corruption, the government couldn’t even collect enough money in the good times. As foreign investors bail out, interest rates spiral upwards and unemployment surges, there’s simply no money to be had.

The one realistic option is for Greece to return  to the drachma – the currency it should almost certainly never have left, given the serious book-cooking that had to take place with the help of financiers like Goldman Sachs to get the Aegean nation into the EU in the first place. The practical effect of this will be to instantly impoverish Greek citizens and holders of Greek bank accounts, who will try to pile into a more valuable currency such as the dollar, pound or euro.

The upside will be extremely cheap labor in Greece, relative to the rest of Europe, which in theory will attract a flood of foreign investment and jumpstart growth. In practice, this doesn’t always work – a race to the bottom of the pool of marginal labor cost is not only unsustainable but impractical, given the difficulties inherent in trying to adjust European standards of living to those enjoyed by the labor force of China, Indonesia and Bangladesh.

Even after a record debt restructuring  which saw Greece effectively receive forgiveness for more than half of its $206 billion dollars of privately held sovereign bonds , the euro needs to tackle the question of whether Greece will eject from the common currency or receive further support. Farther down the line, as the crisis develops, these same questions may be asked of nations closer to the ‘core’ of the eurozone: Portugal, Spain, Italy or even France.

Business Website Gives a Business Based Anywhere in The World

For many large corporations a website is a way to build an identity for, what otherwise might be, a faceless giant. Their websites build their brand, and focus on their ethics and attributes – they help people to feel at ease with the consumer choices that they make. This is a vital point for small businesses – your website is the face of your business on the Internet, on the Internet, if you don’t have a website you are nobody.

A website can help people get to know you and your small business, couple this with a social media strategy and your business will build reputation and gain trust in the online community. A strong brand identity helps consumers to recognise your products and services, giving them the confidence to choose your business.

In an increasingly technological world a website is no longer an option when it comes to business – it is a necessity. With over 80% of people using search engines as their first port of call when looking for a product or service it seems crazy to invest in a Yellow Pages ad before you have invested in a website.

For less than the cost of a small business card listing in the Yellow Pages, which remember is not the preferred search avenue for 80% of people, your business can have a fully functioning one page website. For the cost of a slightly larger advertisement your business could have a 3 page website or an online shop. Getting your business online doesn’t cost as much as people think, and is the only place to be when it comes to customers searching for products and services.

As well as building an online identity and taking advantages of people searching for your products or services online, having a business website is also quickly becoming an integral part of any marketing campaign.

Marketing campaigns, whether on or off-line, are increasingly expected to have a website address attached to the materials in order for people to be able to find out more about your business, product or service at their own convenience. Not having a website alienates these hesitant customers, giving competitors who have a website the perfect opportunity for a sale.

My final point is relevant to those businesses that sell products, and are looking to expand. Having a business website or an online shop gives a business based anywhere in the world the opportunity to do business with customers around the globe. Why limit your business to the custom around your chimneybreast when you could be reaching those across the country?

The world of technology is moving forward rapidly, and with 80% of people turning to the Internet to search for products and services, can your small business afford to be left behind?

Why You Must Expand Your Market Horizons

More than ever, 21st century small businesses have reasons and resources to expand opportunities beyond local markets, including international trade, and specifically exporting. Yet even though 97% of all U.S. exporters are small companies, only a fraction of that sector are exporters.

But there’s good news that should cause the number of small exporters to increase. The convergence of new technology, a global “new economy” culture more inclusive of small businesses, and believe it or not, help from the government, are making it easier for small firms to expand their market reach. But easier doesn’t mean effortless, inexpensive or justified, which are three of the key factors of any export strategy.

Let’s take a look at the possibilities of creating a trade strategy by getting help with those three factors, with emphasis on help from the government.

Effort
For a long time, exporting was the domain of those large firms that could afford to have international professionals on payroll or contract. The education and prospecting process alone was daunting enough to dampen the ardor of even the most determined prospective small exporter, let alone the actual execution of doing business abroad.

But today, it’s hard to imagine something with so much potential being as easy as walking into one of the 100+ U.S. Commercial Service offices (a Department of Commerce division) around the U.S. and asking them to help you begin the education and prospecting process. They have the staff, information and resources to get you started, and will help you along your export strategy journey. And any associated costs are minimal.

Expense
It wasn’t so long ago that someone had to physically travel to foreign markets, establish relationships with agents and customers, and then demonstrate the goods in-country. For most small businesses, those steps were financially prohibitive.

Today, that same Commercial Service office will help you find foreign prospects, coordinate introductions and demonstrations, and bring the parties together in the early stages of a relationship without prohibitive expense. It’s all done by video conference meetings in the Commercial Service office, between you and a prospect they likely helped you find. So by the time you make a significant investment, it will be spent a lot closer to fulfilling a sale. And you’ll consider any associated fees a bargain.

Justification
How do you justify developing an international strategy? Why spend time and resources trying to sell your stuff on the other side of the planet when customers are right next door? Consider these reasons:

More than 96% of the world’s consumers live outside the United States.
This year millions of Earthlings will have a smartphone for the first time who’ve never before been on the Internet or owned a computer. Don’t wait until some of them find you online to begin your international export preparation.
There are many examples of small businesses that minimized a downturn in the U.S. economy because their international strategy took up the slack.

New technology, new attitudes, new resources, and yes, help from the government, are bringing the world closer to your business’s door step. But you have to make the effort to meet the world halfway. Take your first step here – www.export.gov.

Write this on a rock … Education, expense, justification – check, check and check.

Jim Blasingame is host of the nationally syndicate radio show The Small Business Advocate and author of the multi-award-winning book The Age of the Customer: Prepare for the Moment of Relevance.

Best Way to Saving Enough

During our first meeting, a 55-year-old couple asked, “How do you think we’re doing for people our age? Are we saving enough?” This is a good question, one I’m often asked. People want to know how they measure up.

They hope to hear that they are doing better than most. In their minds, this means things are moving in the right direction. But “keeping up with the Joneses” has never been a bankable strategy. So we have to dig deeper to determine what the question is really about.

For the couple I was meeting with, what they were really asking was whether it would be possible for them to retire early based on their current savings. But for a young couple just having kids, the same question is likely to center on saving for college or moving into a bigger house. People ultimately want to know if they will have enough money to do the things they still hope to do.

Digging deeper

To begin answering this question for yourself, you first need to know the type of life you want to live. You must understand how much you are spending versus how much you are earning. But determining your spending needs is a tough nut to crack.

That’s because spending decisions are heavily influenced by quality-of-life considerations. Some people hire house cleaners and lawn services, while others prefer doing it themselves. Eating nice meals out frequently may be the spice of life for you, but others enjoy cooking at home.

Decisions on the bigger-ticket items have the greatest impact. A large house will require a larger down payment, meaning less liquid savings. Some people aspire to drive nicer cars for short periods, while others want to drive cars until the wheels fall off. Then there’s that little decision about having kids, which will have more than a slight impact on your financial trajectory.

Acknowledging the things you consider important to your quality of life can give you a great blueprint for the amount it will take to sustain that life.

Struggling to save

While some who ask “Am I saving enough?” are seeking validation, others are worried that they haven’t saved enough.

Recent research finds that 68% of people believe they’ve saved too little — but only 3% are actually following through by saving more. This isn’t surprising. It’s the same disconnect you find in all endeavors that require consistent action. We can all get charged up on a jolt of motivation, but when it’s time to implement, we freeze.

Thoughts bubble up about the big trips we want to take this summer, or that luxury car we’ve always wanted (and deserve). We start thinking about putting more money into our 401(k), and we realize we need to limit our current spending to make it work. Then it doesn’t sound like such a good idea.

This is when what seems simple in theory (saving more) becomes hard. Making choices that change our quality of life now is more painful than we originally thought and often results in inaction.

The answer

The only way to know if you are saving enough is to piece together your financial puzzle.

Take inventory of what you’ve saved and how much you anticipate you can still save. Set up automatic transfers of money from checking to savings — but watch the credit card bills. Automating savings while accumulating credit card debt is counterproductive.

Working with a qualified advisor can make an enormous difference. Studies have shown the effect that good advice can produce. Often, this advice helps prevent you from ratcheting up your lifestyle too quickly in the first place.

Some questions have easy answers. Unfortunately, “Have I saved enough?” is not one of them. With successful financial planning, you can find your answer — and if it’s no, you can devise a way to get to yes.