So You Want to Save Money?

Happy holidays everyone! Here are some quick tips on saving money:

(1) Eat in more and out less – On average Americans eat four meals each week outside of their home. Here is another shocker; in 2007 an American household’s annual average spending on food at home was $3,465 and $2,668 outside the home according to data provided by the US Census Bureau (2008). That is far too much money spent on dining out. For the average American household these food expenses (inside and outside the home) consume 13% of the annual household income.

(2) Make and take – While you are eating in more, prepare lunch for work before you leave the home. Some doctors have said preparing lunch at home can be beneficial to our health. This is a great way to save money and be healthy with one swift change, awesome!

(3) Shop in order to drop – Some of the services we are accustomed to now have lower priced alternatives. Here is a look at some alternatives: traditional land lines could be replaced with VoIP (Voice Over IP), cell phone rate plans have changed and car insurance is becoming more competitive. Therefore, shop around for some of the essential services. There maybe a better price out there for you without losing the quality of service you are looking for.

(4) Adopt a new policy – When spending money we need to think strategy over impulse and need over desire. In the New Year, you should adapt a new policy. If it doesn’t assist you in generating revenue it is a liability. Place more focus on income producing and family centered activity than desire.

(5) Increase in knowledge - Above all else we each need to increase our financial literacy. The old statement is true – “what you don’t know will harm you”. Read books, financial magazines, listen to financial networks or speak with experts in the financial industry who can assist you with increasing your financial literacy. Financial literacy is more than knowing how to generate revenue!

I hope that these five tips assist you!

New Style for 2010: Be Frugal

The 2008 US Census Bureau income and expense figures reports that the average American household has only $494.37 of discretionary funds left over each month after paying the monthly household expenses These expenses include: housing, utilities, food, transportation, health care, entertainment, personal insurance and payroll taxes. This translates into roughly $16.00 per day per household.

With a budget of $16 per day, it is important that we become frugal in 2010. Otherwise, we will have a major problem. In 2010, find ways to reduce expenses if at all possible. It is no wonder that American families save less than families in Canada and England.

If you were given $16 each day to do with as you please what would you do? This is a definite call for each of us to live below our means.

I Want to Invest But ….

I have had a number of people tell me they want to invest; get back in the real estate game but there is an issue. The issue usually starts out like this “but my credit” or “but the bank”. Unfortunately that is the story for many these days.

My question to those individuals is always who says you have to do it the traditional way? Did you know there are a number of alternative methods of financing for an individual who wants to invest?

There are self-directed IRAs, private equity and joint ventures along with several other alternative methods of investment. Have you tried or heard about any one of them? Please understand that many of these alternative financing methods are not exclusive to real estate but for almost any type of business. If you would like to learn more about alternative financing for real estate send me in an email info@frederickotowles.com.

The New Enron?

Recently the New York Time reported that banks want to move away from GAAP – Generally Accepted Accounting Principles. For years US companies have relied on GAAP as the general rule for financial reporting. GAAP is somewhat a yard stick for the financial condition of US companies. Now the banks are requesting that this be altered a bit to so that they don’t look as bad in adverse financial climates.

Robert H. Herz, the chairman of the Financial Accounting Standards Board said that “consumer spending depends in part on how wealthy people feel”. When I hear talk like this I think, “Isn’t this what Enron did”? Didn’t Enron misrepresent its financials to appear to be a more robust company financially then it really was? But maybe if you ask for governmental assistance to change the rules a bit, it becomes legal.

Herz continued to state that “I (he) support the goal of financial stability and do not believe that accounting standards and financial reporting should be purposefully designed to create instability or pro-cyclical effects.” Again I ask, shouldn’t the financial reporting of a company mirror the financial condition of a company. If the company is sick financially we should say that, instead of potentially making it seem as if the problem does not exist.

Let’s keep an eye on what decisions are made regarding how banks are able to present themselves on paper.

Be Aware: Four Deductions That Could Cost You

There are a few deductions that you want to pay attention to this tax year. With the financial climate the way it currently is, every little bit will count.

Deduction Alert #1 - Out of pocket charitable contributions: Many give cash to charity organizations and never remember it when the tax return is filed. Take some time now to think of the times you gave cash to charities and write the occasions down. It would be great to obtain receipts for these contributions if you can. Also please remember if you used your vehicle for charitable purposes record the mileage. You are able to deduct fourteen cents per charitable mile driven.

Deduction Alert #2 – Education Tax Credit Expanded: You will notice a new credit on your 2009 tax return. Its name is the American Opportunity Credit. This credit will grant a rebate up to $2,500 for each qualifying student in their first four years of college. There are income restrictions for receiving the full credit. These restrictions begin at the modified adjusted gross income for individuals of $80,000 and $160,000 for married couples.

Deduction Alert #3 – Energy-saving home improvements: The purchase of biomass fuel stoves, qualifying skylights, windows, outside doors along with high-efficiency furnaces, water heaters and central air conditioners can also qualify for a tax credit.

Deduction Alert #4 – State Taxes: That’s right, state taxes are deductible in 2009. If you had to pay state taxes this past spring you can be granted a deduction.

Business Anxiety

The term anxiety was birthed from words that mean to think narrow-mindedly and to be taken by the throat. As people who operate within a world with others, it is more than likely that we will feel some level of anxiety in several areas of our lives.

Here are a few anxiety triggers that can be experienced in business, regardless of the size of the organization:

Money – businesses always have an issue with money. CFO’s are always looking to reduce spending in order to increase the bottom line, while COO’s and CFO’s are seeking new ground to increase the revenue of the organization. As long as there is a business, there will be some level of anxiety created by money.

Leadership – in a day where people are changing, becoming less tolerant, more independent and less loyal; leadership is always going to be challenged. As a leader you have to improve on your leadership ability – the ability to deal with competitors, new thoughts, economic changes and the ability to deal with a variety of people inside and outside your organization. Maybe the best leadership move you can make is to appoint another leader to assist in dealing with some of these changing elements.

Growth – determining what stage your business is currently in, knowing where it is going and being able to discern when it is time to make a move in advance for the purposes of growth. I know some entrepreneurs who worked from their home office. However, in order for their business to expand they moved into an office building. Making the right move at the right time to be just ahead of your firm’s growth rate can cause anxiety.

Staff Conflict – pleasing people isn’t easy. Coming to an amicable resolution isn’t always the easiest thing to do either. Internal conflict caused the Roman Empire to collapse and it will certainly do the same thing to a business.

Retention – the Internet has created instant competition to almost every business. Consumers that are seeking more service for less cost can make them a bit disloyal. What do you do to retain clients? This can be a big source of anxiety for most small business owners.

Ideas – most entrepreneurs are flooded with a ton of ideas that seem profitable. This is both a gift to many as well as a curse. What ideas are indeed profitable? Which of those ideas are to be acted on now? Which ideas are to be executed at a later time?

These are just a few business anxiety triggers, you may have more. My suggestion here is to develop a resource or mastermind team to assist you in resolving some of these areas of anxiety. The key to handling these anxieties is never to be reactive or defensive. In cases of anxiety practice being responsive, responsible, be thoughtful and think about the “Big Picture.” Learn to manage those anxieties by developing a better you.

Your Financial Score Card

Reminisce back to exactly one year ago from today. At that exact moment, how much money did you have in the bank? What did your investment portfolio look like? Did it seem easy or difficult to meet your monthly financial obligations? Where you more determined to make financial improvements back then or not? What were some of your sort term goals? How many of them have you reached?

I would dare to say that many people walk around frustrated about their financial score cards. However, if we answer these questions truthfully, many of us are not worried that we haven’t improved financially. We are more worried that we didn’t follow the financial plans that we committed to at this time last year.

Today, I challenge you to sit down with your spouse or close friend and make some financial commitments today. Maybe the commitment will be to save at least 5% of your earnings. That commitment could be to stay on budget throughout 2010. Another commitment could be to constructively use your time. Be determined to not have any of your time wasted. Instead, use that time to earn additional income. Everyone’s commitment maybe different but it is definitely needed. Make your commitment today and stick to it tomorrow.

A Lesson From The Grid Iron

Emmitt Smith shared one of the most valuable lessons I have ever seen from the football field several years ago. In a game against the Minnesota Vikings the running back struggled to perform like he had previously. The Vikings defense was just that good. One play after another, Smith was stuffed for a big loss or minimal gain.

Most running backs that experience what Smith did that day become frustrated. That frustration is then demonstrated outwardly. Smith didn’t complain or act out; he simply continued to do what he was supposed to do – run the football.

Smith had to deal with several elements that weren’t in his control. The first element was to get his offensive line to efficiently block their opponent. The second element was the Minnesota Viking’s defense.

Where is the lesson? After being stopped time after time, Smith continued to press. The game went into overtime. On the very first overtime play, Smith was handed the ball and exploded for a 95 yard touchdown run. What happened? Smith never gave up, never got frustrated and stuck to what he knew how to do.

The lesson that we can grasp from this football game is when we face diverse situations in business, we should continue to do what we know how to do. Continue to press, continue to work, never give up!

Get Out of Debt Card

Growing up in the Monopoly playing generation I, along with many others were conditioned to believe there was a “Get Out Of Jail Free Card.” That type of conditioning has transferred to the next generation in terms of debt. Many commercials, Internet posts and talk from industry professionals portray that the process of getting out of debt can occur without making any major adjustments. Please don’t be fooled, as this is not true.

There are three adjustments that must transpire if you intend to get out of debt:

Reduce spending – You might have heard this one before from me or someone else: Take a serious assessment of your weekly and monthly expenses and decide what expenses are in the “Need” category and which are “Wants”. Eliminate all the “Wants”, at least for now. Also, I would research alternatives to the items on your “Need” list. For instance a telephone might be on your “Need” list. However, you might want to consider VOIP (voice over IP) as an alternative.

Create revenue – In addition to reducing your spending, it is important to seek ways to create revenue. List the things that you like to do or that you do naturally. Seek a coach that will review the list with you and determine ways of producing income from a given area.

Change perspectives – This might be the most difficult of the three adjustments to accomplish. Getting out of debt causes a change of lifestyle as we will have to adjust some things. This new perspective on spending and money will be invaluable to you over a period of time. You might also need to speak with a coach here as well.

Getting out of debt will come with a short term cost but long term it will be more than worth it.

A Great Christmas Gift

With Black Friday quickly approaching, I think this post is timely. The market awaits customers to bombard stores and spend money on retail items this Christmas. Many stores depend on Christmas spending because it could make a big difference on the way their financial statements look.

Don’t worry retailers. My purpose is not to advise consumers not to spend. However, I am asking that we all assess the value of our gifts. My wife and I stopped giving gifts that were of little to no value to the youth in our family. One year we purchased stock for each of our godchildren. We did this because we were trying to impart a different type of thinking in the minds of our godchildren. We need our youth to think long term.

How about this year, in addition to the new video game, doll or toy we buy our kids, we add something of long term value, too? Maybe we should purchase a few shares of stock, prices are low. Maybe it will be some thing else, but lets think long term for our children under 18.

The Greatest Fear Ever

A friend of mine tells the story of how his dad helped him overcome his greatest fear – swimming. He begins the story by describing his father as a very down to earth, straight to the point person. One day the father tells his son that he is going to teach him how to swim. So both men go down to the river where the swimming lesson would take place.

My friend did not understand why he was the only one in swimming attire because his dad was not. Since his dad was a no-nonsense person, he tells his son, “Now I am going to teach you to swim, just remember to relax.” After saying this, the dad grabs his son and throws him into the river.

Once in the river, my friend panics as he believes he is going to drown. After a few seconds he heard his father screaming from the shore “relax, just relax”. Hearing those words the young man relaxed and began to float, or realized that he could float.

The next step was for the young man to develop the swimming technique. For this step his dad came into the river and showed him how to swim.

The young man first had to overcome his fear of the water. He was not afraid to swim; he was frightened by the uncertainty of what would happen once he was in the water, a new environment. Many of us see starting a business in the same manner because we are so uncertain of what will happen when we get into the business.

This is why I believe network marketing is the best business to start off in for anyone who is a bit frightened about business. Your sponsor will throw you into the business and allow you to realize that you can actually do this business. Then your sponsor will get in with you and show you how to navigate the business.

So my challenge to those who are afraid of starting a business of their own is to jump in, relax and know that your sponsor will help you swim. For assistance to find the right network marketing for you please contact me at info@frederickotowles.com.

Perspective

Merriam Webster’s Dictionary gives various meanings for the word perspective: (1) a visible scene, especially one giving a distinctive impression of distance, (2) a mental view or prospect and (3) the appearance to the eye of objects in respect to their relative distance and positions.

I learned a lesson in perspective while driving one day. About a year ago, I rented an SUV while my car was being repaired. While driving the SUV I noticed navigating the roads became easier. Since the SUV was in an elevated position as compared to my car, I was able to observe the traffic from a different viewpoint. The person moving slowly in front of me was doing so not because of the traffic in front of him but because he was using his cell phone.

Once my car was repaired I realized that by sitting at a slightly lower position my ability to see in the manner I did while in the SUV was changed. Many times it is our perspective on a business venture, life situation, etc. that makes each of us respond differently.

I always wondered how two people of equal educational or cultural backgrounds and experiences could respond differently to an opportunity. What makes one see the advantage of an opportunity and the other person not? The answer is our perspective. From what angle are they seeing the opportunity?

In order to be successful in business, relationships, and any other areas of life we must examine our perspective. Do you notice a pattern in your life of bad relationships with those in authority? Do you notice a pattern of missed opportunity? Do you frequently begin sentences and thoughts with “I should have” or “If I would have”? These are just a few signs that there might be a need for a change in your perspective.

How does one go about changing their perspective? This does not happen overnight but will change over a period of time by being exposed to the right materials. We must read good books and listen to great audio CD’s. Eventually, if we are exposed to these resources consistently, a change in our perspective will occur. What personal development books do you have in your library? If you do not have any or you are not sure which ones to purchase, I can suggest a few, email me at info@frederickotowles.com.

The New Law Of Money: Buy, Save and Receive

This is something that I had to write about. An amazing process is being implemented. Now people like you and I can make purchases, save money and time while producing a revenue stream all for no cost.

A new company named Blastoff is creating a new law in terms of money. This phenomenon is catching on so quickly that many major retailers are all lining up to be apart of the Blastoff network. Other retailers are currently planning to launch major campaigns to attract people like you and I to do this network.

For more information about this opportunity visit www.newlawofmoney.com.

Vision

Many define vision as the ability to see something to come. In business, that definition in my opinion is very limited.

To me, vision as related to business, has a two dimensional definition: (1)the ability to look in the intangible and see something tangible; while (2) having the ability to either position oneself in a variable manner to take advantage of it or be cushioned from it.

What good is it to know what's coming without positioning yourself in a manner to be protected or to benefit from it? In business we must have this ability or bring someone on board who has this ability. You could be in an industry that is on the brink of drying up! A new invention, fraud, a new law or regulation can greatly impact any industry.

What would you do if the industry where the majority of your income comes from dried up today?

Most people unfortunately can't answer that question. Take some time to think about this.

Hypnotized

Have you watched the news lately? If not, let me inform you of a current issue the news is reporting. The US economy is in the midst of a recovery and the recession is over.

Can someone explain this to me? How is that possible? On what basis is this being substantiated?

National unemployment is at a high. This is the highest rate it has been in quite a while. Housing still has yet to hit its bottom. Every time the government stops the mouth to mouth resuscitation, the economy begins to “flat line” again. True economic recovery manifests itself in several ways, not simply by the Dow Jones Index rising. Some of the components of true economic recovery are listed below:

New job creation – people go back to work and earn income which they slowly begin to spend thus beginning to turn the economy.

House prices hit bottom and then stabilize – Most US markets have not witnessed a bottom point in housing. There is still some type of invisible inflationary component attempting to maintain housing prices. We currently observe this is New York City.

New home purchases – new homes are purchased not due to government incentives but because people are back to work.

Small business lending – banks would embark on giving small businesses loans again, in an attempt to sure-up the back bone of the American economy.

Retail sales would increase – keep an eye on the big retailers around the holiday season. When things are well people shop. However, when things appear not to be well the public becomes frugal.

Although these things are not currently being experienced it does not mean that you should pull back from your financial plans. It simply means that you should be aware of what economic season you are in. Wearing summer clothes outside in the winter is not customary, but that wouldn’t negate you from going outside.
Be careful of what you accept as truth. Just because it was reported on the news or even in this blog doesn’t mean it is true. Explore topics and learn the truth for yourself, don’t be hypnotized.

DNA of the Rich

A recent article in Forbes entitled, “A Recipe For Riches” spoke of similarities of those on the Forbes 400 list. Forbes findings were that the following attributes were the most common amongst most of the list: (1) many of their parents had a high aptitude for number crunching, (2) many were born in the fall season, (3) many of the self made billionaires never started or finished college, (4) some on the Forbes 400 list have graduate degrees from the top three graduate schools and finally (5) many have worked for Goldman Sachs or one of its subsidiaries.

Sometimes we can look at something like this and believe that we don’t fit this criterion and can never be rich. Although the Forbes article is not stating this, it is easy for one to interpret it like this. We should interpret this by realizing that there are things about ourselves that we must improve in order to position ourselves for wealth. The recipe for wealth creation is 45% the ability to retain wealth, 35% the ability to generate revenue and 20% of the intangibles. The ability to retain wealth has to do with improvement.

The challenge for the next ten days is to identify everything that you want to change about yourself. Make a list. This could be weight loss, economic status, relationships, etc. Once identified, now it is time to select two of the items on your list. Create a plan detailing how you are going to improve these two items. Constant improvement is the key to wealth creation. Whatever we weren’t born with we can improve on, wealth is not innate.

If you need assistance with identifying what you should improve about yourself - here is a free tip – ask three or four close people to you what these areas are.

The Door

You might have noticed this, when you walk into a room in your home or your office, the door is not as large as the room. This sounds silly but this will progress somewhere shortly. When you are in the room, the door itself is not significant, is it? Of course not, the door is only essential when you are on the outside of the room.

What if I told you that in business that there is a particular door that each of us has overlooked or disregarded at one time or another? The door to wealth for many middle class people is network marketing. That’s right I said it, network marketing. How is that the case and why should I get involved?

Network marketing has received a bad reputation over the years due to a few unscrupulous people pushing an unscrupulous agenda that only benefits them. The industry has also received a poor reputation because many people are not teachable. This is not an article to explain the “how-to’s” of network marketing but it will explain why.

The benefits of network marketing are endless. First, there is usually a small start up fee which is not a strain to most people. Second, there is always training in the local market during the evening which makes it easy to learn and expand your business. Third, many network marketing team have additional training via conference call in the evening as well. Fourth, marketing materials and tools have already been professionally produced for your benefit. This shortens the learning curb about the product. Fifth, the infrastructure for your success is also in place already – you don’t have to recreate the wheel. Sixth, you can operate YOUR business on a part time basis without troubling your lifestyle much. Seventh, the rate of return on your investment is limitless. Eighth, YOUR business comes with a pre-installed support staff – there are those around you who want to see you do well. Ninth, you are continually around an atmosphere that breeds success. Tenth, and my favorite and key to this article, you can use the profit you produce from this business to invest in other vehicles that will produce money for you.

Opportunity

The Merriam Webster’s Dictionary defines the term opportunity as a favorable juncture of circumstances and a good chance for advancement or progress. Life is full of opportunities, of which some people take advantage of them while others let opportunity pass by.

What makes a person allow opportunity to pass them by while others take advantage of it? I believe there are at least four elements that play a part in being able to take advantage of an opportunity.

The first element is mindset. We must be prepared mentally to recognize an opportunity.

The second element is location. We must be in the right place to be introduced to the opportunity.

The third element is association. Soil is the most conducive place for a plant to grow. In like manner, our associations are potential breeding grounds for introduction to an opportunity.

The fourth element is equity. Almost every business opportunity I have ever seen required some sort of equity – cash, skill or some other asset. We must be in a position to have some available funds or access to an asset that can be leveraged.

The fifth element is vision. Where do you see this opportunity taking you? What can you imagine? Whatever that is, then that is achievable.

Remember every challenge presented in life offers an opportunity. We must be prepared to identify the opportunity and take advantage of it.

The Enemies of Your Wealth

In life there are always opposition, in like manner while you and I are building wealth, we face oppositions called, “The Six Enemies.”

The first enemy is bad relationships. These relationships rob us of our time and precious energy. In some cases many are robbed of more than that. My advice is to select your relationships wisely. Spend less time with people who have a different mindset than you. They will only deplete your strength.

The second enemy is bad health. I am a fan of Jim Kramer. The following is an excerpt from a blog he recently posted. He states “One illness, a couple of hospital visits – they can destroy the capital you have.” This is very true. Let’s stay as healthy as we possibly can.

The third enemy is poor information. We must do our due diligence when it comes to building wealth. Check the opportunity, the investment, the asset meticulously – whatever it is. We want to ensure that the vehicles we select to drive our wealth building are conducive to the current financial environment. I am not saying to become overly anxious, simply explore your options.

The fourth enemy is lack of personal development. Everyday there must be time set aside to engage in personal development. Read a book or listen to a CD. This allows for the mind to focus on success or sets the atmosphere for success. If we don’t do this the negativity of the world around us will interrupt success every time. Personal development also defeats the fear factor in our lives.

The fifth enemy is the lack of a guide or coach. We all need someone to assist us navigate the mountain of success. I suggest that you select a coach or a guide. Yes you may have heard stories where some have found success on their own. Far more however used a coach or a guide or a team to experience success.

If you are seeking a success coach or guide send an email to info@frederickotowles.com for assistance.

Positioned to Overcome

We now have access to the best financial information via the Internet. No longer are we subjected only to financial advisers who urge us to invest in items that will give us minimal gains at best. In turn, the commission received for misleading us takes care of their personal monthly financial obligations. However, sometimes there is so much information to process, what does one do?

I suggest we develop an investment strategy instead of looking to discover a financial vehicle to garner the greatest return. Are you looking to invest long term, maybe three to five years or longer? Are you seeking a quick fix? Or maybe you are looking to position yourself to recover just ahead of the market. Whatever it is, I suggest taking some time to think about what you, that’s right – YOU, are looking for.

In any event, a strategy must be developed so that your personal financial goals can be reached.

Underutilized

Underutilized is a term not heard very often in the American market, however many times it is actually a great observation of many families and entrepreneurs! What does it mean? The term simply refers to something that has failed to be utilized fully. Let’s think about that for a second!

Recently, I heard a story about a real estate deal gone wrong. Nothing new to those of us who keep our ears to the ground, right? Nonetheless, now the building is in limbo as there is a substantial amount of money of money due on a note. While listening to this story my question was simply, is the building being utilized to its optimum capacity? After a few minutes of quiet thought the reply was, “no”.

Like this story, many of us have underutilized our business opportunities and are suffering because of it. There are some very creative ways to generate revenue that probably escapes you now. One of my success mentors says, “sometimes you have to slow down in order to speed up”. Could it be, as an entrepreneur or potential entrepreneur you are going so fast that you are missing other opportunities? Maybe you think that you have too much on your plate and let other opportunities pass you by? Take some time to think about this!

Whatever the case, allow me to assist you with identifying opportunities and create new streams of revenue for your family. Send an email to me at info@frederickotowles.com and I will assist you with this. Don’t let another opportunity or hidden revenue stream pass you by.

Retirement Thoughts

As you probably know if you were born after 1960 the retirement age to receive for full Social Security benefits was raised to 67. What you may not know is that on average Americans live until age 78. This means on average people live about 11 years after their retirement date. So what, why is this important? It is important so you can develop a retirement plan early.

Eleven years after retirement is equivalent to 4,018 days. Let’s take that number (4,018) and multiply it by 100. This would result in 401,800. Why is this number important? I suggest that this is a good starting point for the target amount you and I will need for retirement. Does $401,800 seem like a lot of money? It would unless you begin to plan for your retirement today. As I said this number is simply a starting point for the amount you and I will actually need. Speak to your financial professional today to begin planning for your retirement.

Yes We Can?

A recent radio address from President Obama suggested that Americans need to save more for retirement. Treasury Secretary Timothy Geithner also disclosed “working Americans should be able to retire with dignity and security,, but nearly half o the nation’s workforce has little or nothing beyond Social Security benefits to get by on in old age.”

One of the new incentives on the table to counteract this is to allow tax refunds to be directly deposited into retirement accounts or used to buy savings bonds.

This is something we all may want to consider during this upcoming tax season. Don’t let Social Security be your only source of income when you retire. In like fashion, don’t allow your job to be your only source of income now either.

The Best Opportunity Is Now

It has been said that, “character is developed through the trails of life.” This is a true statement. In like manner, I would like to submit to you that, “business opportunities are sweetest when the financial climate is at its worse.”

Let’s take a look at what is happening in today’s financial climate:

(1) Banks are attempting to bail out many homeowners who are overextended.
(2) Economists are predicting their will soon be a tsunami of home foreclosures.
(3) The government is spending a great deal of cash to get the economy to turn around.
(4) Eighty one banks have failed so far this year.
(5) There are 150 – 200 more banks expected to fail during this banking crisis.
(6) Banks may have to set aside 25% of their profits in 2010 to pay for these failed banks.

With these conditions affecting the market, it is the best time, in my opinion, to launch your business. When we look back in history, financially depressed environments have always created new business opportunities and the next generation of millionaires. Some companies and individuals prosper during recessions. You might have to re-think or re-create yourself but prospering during these tough times is possible.

Could the next generation of millionaires include you? Of course it can, but you have to be in a position for this to happen.

Allow me to assist you with discovering the best opportunity for you. Send me an email at info@frederickotowles.com.

Less on Less

You may have already heard that there will not be an increase of social security payments for the 2010 and 2011. This will account for the first time since 1975 that this automatic increase will occur. In addition the Social Security Administration reports that nearly 6 million Americans will see a slight decrease in monthly payments in the coming years. This decrease is due to the slight increase in medical costs for those that have payment for medications deducted from their Social Security payments. What does this mean for those individuals who depend on Social Security?

Well it primarily means that we must discover more options. This should also serve as a notice to those who are ten or more years away from retiring. The message to you is to make sure you focus on saving for retirement now. What should those who are currently receiving Social Security payments do, here are a few things:

(1) Develop a solid budget immediately. There is something about writing out a plan or budget on paper. It makes the budget or plan realistic. Make sure you include everything in your budget, even the least expensive items. The budget should be on a monthly basis.

(2) Adjust your expenses. Cut any expenses that you can do without. We are creatures of habit. If you begin now to eliminate a particular expense, although it will be tough in the beginning, it will become easier to do without in the next thirty days.

(3) Increase your income if possible. After creating a budget and assessing your expenses you should examine your income options. Is there anyway of increasing your income without risking a decrease in Social Security benefits? If so, you may want to purse those options.

(4) Stick to your “new” lifestyle for the next 365 days. It is important to stick to this new plan for the next year. I would reassess the plan every four months to ensure that it is working. Adoption is one of the largest things for adults to deal with. Hang in there I know you can do it.

Maybe you know someone in this situation or maybe you are in this situation. There is hope for you. It is never too late to create the lifestyle you desire as long as you still have the desire to change your lifestyle!

Back to School Blues

This is a great time of the year for many parents. For teachers and students alike this may be a time of transition. However, this time of the year reminds me of something very important to business. This season breeds learning new things and getting back to the disciplines of life. Your business as well as mine needs this to occur periodically.

The current entrepreneur and anyone considering entering into the entrepreneurial world should take this time of year as an example. During this time the entrepreneur should reload on their personal development library; schedule to attend educational events (i.e. teleseminars, conferences, etc.) and network with other entrepreneurs in your area.

In addition you must know your learning style. I am an Aural learner. Therefore I order many audiobooks instead of purchasing the actual to read. These are convenient for me as I can download them to my computer or mobile audio player and listen to them in the car or in the office. Teleseminars are also a great fit for my hectict schedule can be. What is your learning style? Whatever it is, begin to educate yourself through books (audio or text) and attend seminars.

Networking with other entrepreneurs in your area is another great source of encouragement. It is important to build a team around you. Some times this team will need you and other times you will need the team for encouragement.
Accomplishing these points can greatly contribute to the success of any entrepreneur.

What Can I Do To Produce More Money?

In today’s economy many people find themselves asking this very question. However there are numerous ways even in this distressed financial market to earn additional income. Here are five options to consider:

(1) Clean out your home of unwanted items and sell them on Ebay. There is old saying that “one man’s junk is another man’s treasure.” Why not rid yourself of unwanted things and make a profit at the same time.

(2) Turn your hobby into a business venture. Hobbies are not considered business by the IRS mainly because people are not engaged in hobbies to make a profit. What hobbies do you currently engage in? Could there be a market for this service or product? If so launch your business before the end of this year.

(3) Cut your expenses. Take some time in the next two or three days to write down your weekly and monthly expenses. Examine the list, is there anything that can be scaled back or eliminated? Usually entertainment related expenses like cable television, video games and movies can be scaled down or eliminated altogether.

(4) Change your withholdings on your job. If you are a W2 income earner and you usually receive a rather large tax refund you are able to receive that refund early. You may ask how? Sit down with a tax professional to examine your W4 status. By changing your W4 status it is possible to receive a raise from your job.

(5) Enter the direct sales industry. The direct sales industry is booming! Millionaires are literally being created by this industry every month. This industry is perfect for those with limited time and a limited budget. If you are eager to be successful and very teachable then this might be the option for you. Some direct sales companies maybe a better fit for you than others, so take a close look at these companies before selecting one.

These are just five very simple ways to earn additional income. There are others that you may think of as well. The bottom line here is to identify a stream of income and begin to work on it. Your success is directly linked to your activity, not luck or fate!

Are Things Really Improving?

If you have been watching the news of late you will realize that many of the Wall Street professionals are “willing” the market upwards. Can it be said that the market is on an upturn simply because a few companies have announced profits during the first two quarters of 2009? Definitely not! There are several factors that alert us things are really not improving: (1) unemployment is still high, (2) house prices are still dropping in many markets and (3) the government is intervening in this “apparent” upswing a bit too much.

At best the upswing is artificial. It’s designed to convince the general public that it is safe to come outside and spend, spend, spend! After your family’s monthly obligations are met do you have excess income? If so it is best to invest in something that will produce income, whether short or long term. Opportunities may include a business venture or some other type of investment.

With Christmas coming, this artificial upswing will seem to be real. The goal here again is to get the public to spend money in order for the economy to turn. Be wise you’re your spending in this upcoming holiday season.

Direct Sales May Have A Bull’s Eye On Its Back

The direct sales industry has received a bad wrap over the years because of some of the unscrupulous people who have taken advantage of others. However this industry is touted by many as being the key to success for middle class America. Many may or may not agree with either of these statements. Nonetheless, the direct sales industry as well as other entrepreneurial industries may be the next target of the IRS and state tax authorities.

Members in the direct sales industry must be sure to keep all of their receipts for the year. With the current economic downturn the IRS and state tax departments will be looking to generate revenue. These entities generate revenue by auditing returns – taking a closer look at things.

Here is what I suggest to protect you from audits:

(1) Be sure you are in business to make money and not just for a tax deduction. The best way to do this is to be active in your business, generate some revenue.

(2) Keep all receipts. Take them out of the shoe box. Develop a system where you are able to scan your receipts and develop a short narrative for each receipt.

(3) Seek a professional to prepare your tax return. Don’t try to compute your return on your own. You might find that it will cost you more to prepare your own return in the long run. I recently had a person prepare their own return, to save money. The person made a mistake and they now have to pay for the amended return to be prepared along with owing the IRS and their state more money. In addition your preparer might be able to recognize deductions that you aren’t able to.

(4) Engage in your business. More than likely your activity will produce income and it will also produce tax deductions as well.

(5) Engage in tax planning with your preparer, if that service is offered. You are in business so you should plan for taxes just like you plan for a vacation. Many of my clients know exactly what their tax status is several months before the end of the year.

Investing In a Turbulent Market

Brokers are begging you to leave your money in their suggested funds or investment instrument. Financial planners advise you not to take your out of the market. Fear of losing every dime you invested runs through your mind. What is the best advice when looking to invest in a turbulent market? The best advice in my opinion is to invest together.

This is the new “hedge fund”. Likeminded people should form an investment group and pool their monies together in order to get ahead in this turbulent market. Would you rather risk $100K on some investment that might bottom out and never recover or would it be better to team up with none other people that will invest $10K each in the same investment.

Investing together with likeminded people can “hedge” your money and theirs as well. Of course investing together isn’t always easy but it can be worthwhile and lucrative. In a few months I will be opening a company similar to what is stated here where likeminded people can invest and potential make some money in this turbulent market.

It is something for you to think about with your family and friends. Also be sure to seek the advice of an attorney and accountant before entering into something of this nature. Stormy weather always creates fertile ground!

A Life Lesson From The Hudson

I am a believer that a lesson or insight can be retrieved from just about anything.  This past week in NYC a plane crashed in the Hudson River moments after taking off from the airport.  The cause of this crash is reported to be birds, geese to be specific.  Almost 200 passengers were at risk. Where is the lesson in that?

It is the small things that can interrupt and even stop your progress.  The plane out weights the flock of geese and the plane is much bigger.  But when the plane is launched it is subjected to almost everything because the pressurized cabin makes it "lighter than air" enabling this metal monster to maneuver through the air. You and I must realize when we are launching out to reach our goals that there are some small things that can hinder us.  

Who would have though a flock of geese would be responsible for a commercial jet to crash? No one.  The lesson be very aware of the small stuff in your air space.  It might make the difference between success and failure.  The small stuff matters.  

What small stuff in your business have you left unattended?  What small stuff in pursuing your goals has been neglected?