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Home Based Business Considerations

A home based business allows you to be your own boss and to make all the decisions about the business. By running your business out of your home, you can enjoy flexible hours, certain tax advantages and not having a daily commute. When you are thinking about starting a business, you have to do some soul searching and planning. A home based business is no different from any other business; there are just different aspects to consider.

When beginning a home based business you will need to do so legally. You will need to decide the form of business you are going to undertake. These forms are a sole proprietorship, a partnership or a corporation. If you are going to use some other name than your own, you will need to register your business name with government agencies. You will also need to obtain a business license. The business will need to be run according to local, state and federal regulations.

The location of your home based business is very important. You will need to consider your house and neighborhood when beginning your business. Zoning laws are different for different areas of town. You will need to research the zoning laws for your neighborhood. The neighborhood will need to be suitable for the type of business you are beginning. You should also consider if your location will work for your business. Clients will need to be able to find your business with a minimum amount of trouble.

Your family and work style should be considered when planning a home based business. If your family is supportive of you in your business venture, working from home is idyllic. A lack of separation between your family and your business can interfere with family activities. It is a good idea to discuss your business with your family while you are still in the planning stages.

Another consideration when working from home is if it will work for you. Your personality and work preferences need to be analyzed while considering a home based business. Isolation and a lack of colleagues are increased with a home based business. Working from home requires self discipline. You have to be able to plan and manage your time. Your work style should include dealing with problems effectively.

An important determining factor in planning a home based business is your own personality. Do you have the qualities to be successful? The traits of a successful businessman or woman include competitiveness, a need to achieve, the desire to take the initiative, perseverance, and self confidence. Enthusiasm is a good work quality but it must be combined with determination to go down the road with success. Other qualities that will be useful in business are discipline, drive, flexibility, and the ability to meet new challenges head on.

The decision to start a home based business should not be a snap decision. It can be satisfying and thrilling owning your own business. Don’t let all the decisions scare you from make a choice that will free you from the daily grind. It is possible to have a successful home based business.

Retirement Investing – Use the Force Luke!

Retirement investing has one major question for everyone and I’d bet that if you ask 100 people the following question, you’ll receive close to 100 different answers.

What’s the question? Well, it’s not that hard.

It’s – “When is the right time to start investing?”

A simple question I’m sure you’d agree – but the answer can cost you a LOT of money – and the loss is purely down to how long you wait before you start saving!

Let me explain a little!

The honest fact is that nobody truly knows the right time to start investing for ‘random people’. So how do you know when it is your best time?

Well, to borrow a line from Star Wars, “Use the force Luke.”

Now the force in this answer isn’t some invisible cosmic energy, but instead is the investment force of compound interest.

First, it is very important to understand the difference between simple interest and compound interest. Simple interest can be figured by taking an initial investment that earns interest annually for a period of, for this exercise we will say, two years. After the first year you have your original investment plus the interest. In the second year you have the initial investment plus the interest for the second year, the interest from the first year is not added. Your interest is not being compounded so you are not earning interest on the interest that you have already earned.

This is what I’m talking about, this is the force. Compound interest is a force because you take that initial investment and earn interest in the first year, then in the second year you add the initial investment plus the interest from the first year and earn interest on the whole amount. The smart investor will always try to find a good situation with compound interest against a great situation with simple interest. With this knowledge it is time to see the difference between those who do use the force and those who do not use the force.

Bob starts saving at the age of 24 with a zero balance and contributes $200 monthly until retiring at the ripe old age of 65. By using an average annual rate of return of 12%, Bob can retire with $2,061,941.74. Bob will definitely be able to retire with comfort, the comfort of being a multi-millionaire!

Now let’s consider those who do not use the force.

Carl starts saving at the age of 40 and because dear old Carl is further in his life, we can assume that he started with an initial investment of $10,000 and contributes twice as much, $400 per month, with the same 12% average annual rate of return. Carl will retire at the same ripe old age of 65 that Bob did, but with a significantly smaller $886,803.53.

Now, that is definitely nothing to be ashamed of by any means and unless he has a very expensive habit such as buying first edition comic books – good old Carl is in for a happy retirement.

But it does demonstrate the importance of using the force!

Bob started younger, paid less, and used the force to the tune of almost three times as much money for retirement.

Now you have been empowered, you understand what the force is and how to use it. You understand the importance of starting early and earning on your money, then earning for your earnings.

Use the force! It’s no fluke Luke, I can assure you!