Online Businesses: Lots and Lots of Benefits

Today we’re pretty excited about owning online properties. I thought it’d be worthwhile to explore all of the benefits, especially for people reading this blog considering jumping into the fun!

Instead of hoping for a dream job and a big salary, owning your own online business can open many doors for you and buy you more benefits. On top of the perks many people talk about, like working from home and flexible hours, it also can keep costs down, helping you financially. Internet businesses normally operate at a fraction of the cost of brick and mortar stores. While with traditional businesses you would need to rent or purchase a building, Internet businesses are all online. Many programs such as Shopify simplify the process of starting up your business. It’s a smoother, easier glide path to profits. Compared to the thousands of dollars you’d spend in renting out space, you’d only have to dish out a couple hundred a month at most. Home Office Free Financial Advisor

General Benefits in Doing Business Online

  1. As popular website InternetBusinessJunkie mentions, you have the ability to reach more people if you do business online. Traditional businesses that have a set location don’t reach nearly as many countries as an online business does. Most online businesses have the ability to do national as well as international sales. This blog alone is read in over 35 different countries on a consistent basis!
  2. You can leverage the usage and growth of the internet. The best way to market your business is by networking and there are many free and low cost ways to market online.  Social media is a great free resource to do most of your networking.
  3. You are able to work wherever it’s convenient. As long as you have a laptop or tablet, you can work virtually anywhere with just a WiFi connection. This allows you to keep a more flexible schedule so you can work whenever you need to.
  4. No more commuting. This saves a ton of time and money, especially with gas prices these days. I wake up every day and walk over to my home office and begin working.
  5. Though you are responsible for your own taxes, as Smallbusiness mentions, this could work to your advantage. As long as you remember to, you are able to take out as much or as little as you please. By the end of the year, by paying in taxes as you go, you’re in control of how much you will receive back or if you’ll owe more all at the due date.
  6. It has been said that the Internet has created an economy all of its own. Since millions of people are doing business online, it is only a matter of time before many traditional businesses become a thing of the past. Dbwebdoctor states that in years to come, eCommerce will obtain its main growth from small and mid-sized businesses.

Be Set For Life Financially

Unlike traditional businesses, online businesses operate 24/7. This means that while you sleep, you’re still receiving orders from customers worldwide. This could take the guesswork out of figuring out the right hours to be open. Being the sole owner of your business also means that you set your own wages. You can determine what your products should be priced at instead of listening to the head of a corporate business telling you what to do.

Once you learn the ins and outs of selling online, you have what we refer to as “blue sky” potential. Sure, there are going to be some trial and error runs regarding what products you should sell, but once you know how to sell online, making money will follow. Building a business online also gives you the ability to work for something that you love to do, according to Lifehack. How many people out there can honestly say that they are working towards what they are passionate about and they love what they do?

Resources to help are also plentiful. There are pools of designers and programmers available to hire at places like eLance or Odesk, among others, if you need help building any aspect of your website. There are freelance writers who will write articles for your website and virtual assistants who can take care of tedious details concerning your business. This could take a lot of pressure off of your shoulders while you deal with your product line and customers. The Free Financial Advisor works with a programmer in Minnesota, a virtual assistant in Michigan and another in the Philippines, as an example.

If you have children and are currently paying for child care, this is another expense you can think about canceling. Since you have the ability to work from home, you won’t have the need to spend hundreds of dollars a week for a babysitter. Though you may want to hire a babysitter once or twice a week if it becomes too much of a distraction juggling all of your responsibilities, you won’t pay nearly as much as if you went back to a full time daycare.

Between saving money on everyday expenses and making money at your own leisure, if you are dedicated to your business, you will be able to make it work. There are many resources online that can help you through your journey to owning your own business.

Photo: Lisa Risager

Essential Online Money Making Tips for Graduates in 2014

Although many people may not take it so seriously, there are a lot of money making opportunities online that anyone can exploit. The main reason is that almost all business transactions in the current market place are conducted via an online platform. With most current graduates having good computer skills, it would be very easy for them to take advantage of the opportunities online and make money.

Online Opportunities for Graduates

You Can Build Your Own Website and Earn Revenue from It

There are many ways one can make money on the internet however it is best practice to focus in on a few essential methods, to make this a reality. One of the first steps is to build your own website. This is a good starting point as it allows one to have an online presence, and one that can be controlled and modified in accordance with financial goals. Although there are certain things that one must know to make money online, a good website will allow for a solid foundation and help make the process of online income generation a lot less complicated.

Start a Website on a Free Sub Domain and Get the Traffic Rolling In

When we talk about starting a website, many people take a step back and look at the cost of doing so. This is mainly because there is a general belief that starting a website is a very costly affair. While this may be true, it is not absolutely a must that a website should cost so much. There are many elements that are required to have a website running, however many of these are available for free from certain places on the web. Major web hosting companies such as 1&1 will offer free domain names and a simple hosting package for new websites if the owner cannot afford to pay for their own domain name registration and a hosting plan. With this kind of help, a new website owner will have a great head start because all they will need to do is upload the content that they would like to share with their audience.

Five Good Ways to Monetize After You Build Your Own Website

There are several means of generating income from a good website. The most common method is to sell a commodity or service that people need.

1. Many people sell applications online for cash. Such applications include video games, software applications among many other things.
2. The second method is to design your website so that it acts as a source of information for people. This can involve selling books, research information and other important resources that clients are willing to pay for.
3. One can also offer some advertising space on their website to companies that are willing to pay for the advertising space. This is also a good money making venture for website owners
4.Providing SEO services is another way website owners can make good money for themselves. This involves optimizing other client’s websites in return for some pay. It is an area of online marketing that has become very popular and the demand is growing.
5. Google AdSense is another major money maker for most website owners. This involves Google putting up adverts on your website and sharing the advertising revenue that they make with the website owner.

Photo: Kevin Dooley

High Yield Bond Investing for Beginners

Imagine investing in a fund that built bigger and bigger dividends until you were ready to use them. Sound good?

I’ve always been a fan of high yield bonds as an asset class for this reason. My clients and I earned solid results by investing in these products.

Today, boys and girls, we’ll explain what a high yield bond is, how it reacts to different pressures and the method I’d recommend to buy a high yield bond if I were a beginner.


What is a High Yield Bond?


Let’s begin with the word “bond.”

Most people are comfortable with the idea of a stock. If you own stock in a company, congratulations! You are now the proud owner of a piece of that firm. How will you make money? Like any company owner, you’ll generally come out ahead as the company’s business prospects improve. If the company takes a downturn, you could stand to lose your entire investment.

A bond is better for people who don’t want that roller coaster ride. Instead, bond holders are more comfortable loaning a company money. The company gives you specific terms (for example: five years at a six percent interest rate), and you agree to loan them the money.

In essence, you aren’t a company owner. You’re Louie the Loan Shark. Sweet!

How Do I Decide Which Bond to Buy?


Well, Louie the Loanshark, what’s the first question you’re going to ask if you’re loaning someone money?

That one’s easy: How likely is it that I’ll get my money back?

In the case of High Yield bonds, it’s pretty shaky. If these companies were regular people, they’d be the type that’ve had their American Express Card taken away and their house payment is two months behind.

When I said Loan Shark, I meant it.

So, when you see bad credit, what do you do? You jack up the interest rate. If I’m going to risk my money, I’m going to need to see a good return. High yield bonds are the highest returning bond type on the market. You’ll receive much higher returns than any other type of bond because you’re taking more risk.

High yield bonds used to be called junk bonds. To dress up the category, somebody decided “high yield” was a prettier name. I’d agree.


Is This Category Too Risky For Me?


Maybe. It depends on your goals. But let’s mitigate the risk of buying a single bond.

If you’re a new investor, I wouldn’t try to purchase an individual bond (loan money to one company). Frankly, the risks in that arena are too high for a beginner, unless you’re completely open to the risk of losing all of your capital.

In this case, I prefer a mutual fund. With a fund you have humans buying and selling positions on the open market. Fund managers diversify the portfolio like an ETF would, but also can sell when a certain company starts to turn for the worse. You don’t want to worry about that.


Let’s Talk About Performance and the Dividend


In high yield bond funds the dividend usually is classified as interest, so this asset class is best used in your tax sheltered plan (RRSP or IRA).

First, you can expect the value of your fund to fluctuate. With a high yield bond fund, I’ve always considered this the roll of the ocean. If I still own the shares  and they’re pumping out a dividend, I have one goal: make that dividend grow.

Therefore, I reinvest dividends.

That purchases more shares, which I reinvest in the mutual fund. I’m always looking at the size of my dividend payment that’s reinvested and asking “is it large enough to supplement my income yet?” Until it is, I continue to reinvest.

One of my clients pretended the dividend was a little man who worked alongside him each month. Every dividend would head back into the factory to help make the next payment a larger amount.


Popular High Yield Bond Investor Questions


How much should I invest?

With any investment, you begin by finding the return you need to meet your goal. For some investors, high yield bonds will be too risky for their portfolio. For others, they’ll need growth in their portfolio and high yield will rarely give you huge returns.

How risky is a high yield bond fund?

I present the risks of a high yield bond as “high” because I want investors to understand the risk versus other bonds. However, on a long-term risk/reward pyramid, high yield bonds are less risky than large cap stocks. If you’re comfortable investing in stocks, a high yield bond mutual fund historically has been less risky.

If I Don’t Have an IRA or RRSP Should I Still Invest?

I prefer to use tax advantaged investments outside of a tax shelter and tax-creating assets inside of shelters. High yield bonds are heavily taxed when compared to other asset classes that earn a similar return. You can use a high yield bond mutual fund outside of a tax shelter, but realize you’ll pay more tax than you will with many other investment classes.

How to I Find a Good High Yield Bond Mutual Fund?

Read our pieces on using Morningstar to find good funds:

Part I: Researching Mutual Funds (or how to cure insomnia)

Part II: Evaluate a Mutual Fund in 10 Minutes


Not only will you see past performance, but this website will tell you about fees and how much you’ll need to invest to meet fund minimums.


(Photo Credit: Payday Loan Store, Swanksalot, Flickr; Loan Shark, Jesse Wagstaff, Flickr)


Okay, that’s my story. Do you use high yield in your portfolio? Are there criteria or tools you use to choose high yield bonds that are appropriate for a new investor that weren’t presented here? We’d love to hear them.

The Passive Income Lie: Our Cuppa Joe Discussion

The concept of “work hard now so I can play later” bothers me. I like to play, and I don’t want to wait until later.

Luckily, my work = my play.

This is the way life is for me. Hard work is the journey and the destination.

That’s why I get so frustrated when I hear people say “I’m going to work really hard now so that I can sit back and relax later.”

They’re going to build up a truly passive income stream.

In this statement, it would seem that completely passive = perfect purpose.

What? Does that ever happen? And if it does happen, how often do you hear “This is exactly what I wanted! To sit here with nothing to do….”


My Story


Early in my career as a financial advisor, I was told the business was all about building a base of assets. This is a financial advisor’s version of passive income. Management would tell me, “bring on a ton of new clients now and roll over their money. Later on, that pile of cash will be making so much money for you that you won’t have to work hard.” It made sense. If could build my assets under management to $100M dollars and earn half a percent personally, I’d bring home $500k per year.



The Truth


I grew my practice to about $40M under management before I realized that this idea of working hard now so I could have fun later was a lie. ….at least for me.

First, as my practice grew, I attracted more demanding clients. It’s the same if you own rental houses or dividend stocks, isn’t it? As you grow the portfolio, you are pulled in more directions with your time managing assets. Decisions get more difficult. Strategies become more complex.

Every once in awhile, I’d try to take time off. The longest I could get away was two weeks, and by the end of the trip I usually was working about an hour and a half a day. My business demanded my time. How was I going to sit back and do nothing?

Second, I liked what I was doing. It was fun talking to my clients about their dreams. If I owned rental properties, I’d like to fix them up and receive rents. I own dividend stocks and like following the companies and diversifying the portfolio. When I step away, it demands that I continue to work, but it’s also fun.

In short, I’m starting to believe that the whole idea of work hard now/play later is a lie. Sure, I might work less hard. I also might delegate more of the tasks which aren’t my core activities, but I will never, ever stop working.

In fact, I’ve found proof that I probably don’t want to stop.


State of Flow


I first heard of the book Flow, by Mihaly Csikszentmihalyi (easy for you to say) during a USA Today interview with Jimmy Johnson, Super Bowl and NCAA National Championship winning coach. He was hot on this philosophy and had a history of professional success, so I went out and bought the book immediately.

It confirmed my suspicions about the meaning of life.

In the book, Csikszentmihalyi seeks to define what “optimal experience” is for a person. When are we in that state where we’re at one with the universe?

He asks–have you ever set out to accomplish a task and then lost track of time because you were so absorbed in it? He describes that perfect union of task and complete concentration as flow. This complete focus, to Csikszentmihalyi, is the optimal experience for a human.

He backs it up by studying people who play classical instruments. Their chances of becoming wealthy or famous are nearly zero, but they’ll practice for hours on end. Why? They crave the state of flow, where everything is working perfectly in harmony together.

There’s no promise that they’ll be rewarded down the line with riches. But they’re attracted to the work anyway. They’ll practice until their fingers bleed.

Do these people just not get it? Shouldn’t they be working hard at things that will make them money today so they can throw out that stupid instrument? I don’t think so.

I think the idea of sitting around is overrated.

Life is about chasing flow. Working so perfectly that you’re completely absorbed, using all of your energy to be the best you can.


Maybe you agree and maybe you don’t.


That’s what the cuppa Joe discussion are all about….grabbing some coffee and arguing a point.

Maybe the concept of passive income is cool if you hate your job. You want to grow your income in a way that you can work at those things you enjoy rather than those you’re forced to do to bring home the bacon.

I can see tha desire to have multiple income streams. What I can’t imagine is any discussion where I’m working hard now so I don’t work later. I don’t crave completely passive income because I’m pretty sure it’s unattainable.

The idea of my money working for me as I’m also working fires me up. The phrase “don’t work” literally doesn’t work for me.

How about for you? Let’s wrestle this out in the comment section.

(photos: Coffee Shop by dailylifeofmojo, Flickr; Immaculata Symphony by Jim Capaldi, Flickr)

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