Personal Branding expert Dan Schawbel has put together a great 52-page report on how to use blogging to build your brand.

Grab your FREE copy of his report here: Blogging Your Brand.

In his report, he describes 10 Benefits of Blogging:

1. Position yourself as an expert
2. Rank high in Google
3. Build a community
4. Gain confidence in yourself
5. Sharpen your writing and technical skills
6. Get your message across for free
7. Network with successful people
8. Command attention from mainstream media
9. Make money
10. Stay current and have a voice in your industry

Are you blogging? If yes, how has blogging impacted your life? If you aren’t yet, what’s stopping you? Comment below.

You see that commercial and it just compels you…you have to have that exercise machine!

You see that car…and you think of how nice it would be to drive it.

You hear about a “hot stock” and think about putting a good chunk of money into it to “make some big money” quick.

Before you even know it, you’re spending good money…chasing bad purchases or investments.

Next time, before you buy (or do) anything, ask yourself this ONE question:

“What is my return?”

This could be:

1. ROI – Return on Investment (how much money will I make, and how quickly will I get my original investment back?)
2. ROL – Return on Life (will this make my life easier?)
3. ROT – Return on Time (is this worth the investment of my time?)

Remember that with each choice you make, you are giving up the ability to do something else.  In economics, this is called “opportunity cost.”  This could be measured in time or in money.

Each time you make a choice, in how to invest your time or your money, you are making a choice for your future.

Time and money both compound.  Are they compounding in your favor?

Discuss

Have you bought something you no longer use?  Have you been frustrated by your lack of happiness after purchases?  Do you like your ROL?

Leave a comment below.

Leverage is the ability to do more with less.

This skill is what helps people achieve more than they otherwise could on their own.  It’s also not as hard as it may seem.  Below, look at the list of ways you can use leverage.  Then begin using one (or more) of them RIGHT NOW.

1. Money – invest it to earn more for yourself
2. Time – outsource (www.elance.com, www.rentacoder.com, www.guru.com)
3. Resources – look at all the available resources online
4. Contacts – make new ones using social media and leverage existing ones that you meet throughout your life
5. Systems – use technology to assist you in achieving more
6. Tools – again, the internet is full of them
7. Talents – what are you good at, and how can you use that to your advantage?
8. Mentors – if you don’t have one: find one
9. Knowledge – what do you already know that could make you more money, increase your happiness, etc?  Do you need new knowledge?
10. Skills – are they outdated? If so, get new ones that can help you move forward.

I hope you start seeing some positive changes by living life with leverage.  Now go do something.

When I was in high school, I’d often think to myself "how much money will I make when I graduate from college?"  I hated not knowing the answer, but like a good little boy, I figured if I went to college and studied hard, I’d get a good high-paying job.

But there was a problem.

I soon learned that how much money I made wasn’t relevant.  The only question that mattered was "How much will I KEEP?"  Let me explain.

After reading books on personal finance and wealth building, including Rich Dad Poor Dad , Cashflow Quadrant, Increase Your Financial IQ , and others, I better understood that the poor and middle class focus on their top line and not their bottom line .

As I’ve said before, your life is a business, and no one else will watch out for your bottom line but YOU.

3 Forces That Hurt Your Bottom Line…Preventing You From Keeping More Money

There are 3 forces working against you at all times to help keep you trapped from finding the financial freedom you desire.  They are:

1. Debt
2. Taxes
3. Inflation

Let’s look at each of these…

1. Debt
   
   • Debt is encouraged as a way of life.  Student loans, car loans, mortgages, easy financing options on computers, TV’s, etc.  Never-ending debt both personally and nationally leads people to distance themselves from financial freedom.  The sad part is, our entire system of money world-wide is built on debt for expansion since none are backed by any sort of tangible good in limited supply (like gold).
2. Taxes
   • For a detailed breakdown of all the different tax structures and how they impact your money, read How Taxes Eat Your Income: It’s Not How Much Money You Make, It’s How Much Money You KEEP That Matters . The tax code favors business owners; they provide the jobs to keep people employed, who pay the most in taxes.
3. Inflation
   • This occurs when governments print money or continue to issue government debt to finance operations.  This inflation mortgages the future of the country and its people.  This leads to higher taxation or price increases later.  So long as there are currencies backed by nothing but the "full faith and credit of the government" then there will be always be monetary inflation.

These 3 forces are responsible world-wide for many financial ills.  While you have limited control of government spending, you can control how you function within the system by reducing these negative forces on your finances.

What To Do About Them

1. Debt
   • Don’t take any on unless it will make you more money.  This can only happen when the cost of borrowing is less than the cash generated from the business or real estate investment that the loan was taken out for.  Happiness is positive cash flow.
2. Taxes
   • Minimize taxes through corporations and efficient use of tax deductions.  Consult a CPA.
3. Inflation
   • Do your best to invest ahead of inflation.  If you do not know of better yielding investments, seek out better information that will lead you to discover better rates of return.  They are out there.  Here are a couple of resources…
     • City Capital Corporation : invests in real estate and cash flowing businesses with good returns.  Allows you to use either your money or your credit to invest in deals.  (Minimum income and credit score requirements apply)
     • Lending Club : allows you to directly lend to other people with rates from 6-19% after their service charge

Once you understand the 3 Forces That Prevent You From Keeping More of Your Money, you’ll have a better understanding of what it takes to make, but more importantly keep , your money.

Happy investing!

Think making lots of money will make you rich?

Think again.

Most people focus on making a lot of money…at the expense of paying a lot in taxes.  Let’s look at the different tax structures and understand how they impact your bottom line.

I will do my best to keep it relatively simple.

NOTE: I am not an accountant.  Seek professional advice.

Taxes

There are different kinds of taxes depending upon whether you are an employee, self-employed, a business owner, or an investor.

To put it simply…

Earn —> Get Taxed —> Spend whatever’s left over

Earn —> Spend for Business Expenses —> Get Taxed on whatever’s left

If you want to dive more into the nitty-gritty, here is some more detailed info:

• Employees
  • 10-35% Earned Income Tax (this is the range for 2008 depending on income and your filing status)
    • Reference: 2008 Tax Rate Schedule
  • 6.2% Social Security Tax (FICA)
    • Reference: 2008 Social Security (FICA) Tax
  • 1.45% Medicare Tax
    • Reference: 2008 Medicare Tax
  • State Tax (depending on your state)

• Self-Employed
  • Self-Employment Tax
  • 12.4% Social Security Tax
  • 2.9% Medicare Tax
  • State Tax (depending on your state)

• Business Owner (depends on structure of the company)
  • Corporate Taxes
  • 6.2-12.4% Social Security Tax
  • 1.45-2.90% Medicare Tax
  • State Taxes
• Investor
  • 15-30% Capital Gains Tax (depending on short and/or long-term capital gains)
  • 0% Real Estate Income (using 1031 tax-deferred exchanges and pulling your equity out: the equity is a loan, not income)
  • Depreciation Expenses

Real World Examples

Let’s look at two people, one an employee and one a business owner.

Note: Examples used for illustration purposes only.

Employee: Mike, a janitor			Business Owner: Pam, a payroll clerk
Total Earnings	$ 24,000.00		Total Earnings	$ 24,000.00
Earned Income Tax	$ 4,402.50		Business Expenses	$ 7,000.00
Social Security (FICA)	$ 1,536.00		Total Income	$ 17,000.00
Medicare	$ 348.00		Earned Income Tax	$ 3,352.50
State Tax (5.3% used)	$ 1,272.00		Social Security (FICA)	$ 217.60
Net Income	$ 16,441.50		Medicare	$ 493.00
			State Tax (5.3% used)	$ 901.00
			Net Income	$ 12,035.90
Total Taxes Paid	$ 7,558.50		Total Taxes Paid	$ 4,964.10

Can you see why it may be more beneficial to be a business owner or an investor than an employee?

Stop taxes from eating your income…consider starting a corporation today.

Communication breakdown is what creates most problems…and right now there seems to be a disconnect between Washington, D.C. and the American people.

Government bailouts and "stimulus" packages are confusing not only to the people, but to our Congressmen and women as well.

My goal here is to improve the understanding of how this stimulus package will affect us financially.

The Government’s Financial Statements

Everyone (including the government) has a set of financial statements. These documents help monitor and track where money goes. Most of us don’t think about the government’s too often…and perhaps we ought to.

If you’ve read my others posts, including America’s Financial Future and Is America Bankrupt? you’d see that we are in dire straights financially as a country. It may be helpful to review these posts before continuing to give you a greater context.

Congress has before it a massive "stimulus" package somewhere in the neighborhood of $789 BILLION dollars.

Let’s look at this from a standpoint of simple math and money knowledge…

So if we get a "stimulus" package, it becomes a long-term liability on our government’s balance sheet.

The only way for the government to get rid of this long-term liability is by adding assets to the asset column that will generate income to pay for the expense of the liability. It can do this by raising taxes , finding new sources of tax revenue (i.e. tariffs), or by continuing to borrow from overseas. Oh…and it can also print more money. Wouldn’t it be neat if you could do that?

None of these options are pleasant, or will help our nation regain it’s strength.

One reason why this "stimulus" package won’t work: it won’t create enough long-term jobs. There are economists on both sides of the issue, however the simple math doesn’t work.

Our national balance sheet can’t handle another long-term liability that we all will have to pay back with interest…or else print more money and cause inflation.

One way to actually stimulate the economy : reduce the corporate tax rate so companies from other countries would consider moving here and hiring U.S. workers, thus allowing other small businesses to spring up to service these companies and their employees.

According to The Tax Foundation:

"…the average combined federal and state corporate tax rate in the U.S. is 39.3 percent, second among OECD [Organisation for Economic Co-Operative Development] countries to Japan’s combined rate of 39.5 percent"

The table below looks at the relationship between U.S. State and Federal Corporate Tax rates when compared to the rest of the OECD…

Table 1
Comparing U.S. State Corporate Taxes to the OECD

OECD Overall Rank	Country/State	Federal Rate Adjusted	Top State Corporate Tax Rate	Combined Federal and State Rate (Adjusted) (a)
	Iowa	35	12	41.6
	Pennsylvania	35	9.99	41.5
	Minnesota	35	9.8	41.4
	Massachusetts	35	9.5	41.2
	Alaska	35	9.4	41.1
	New Jersey	35	9.36	41.1
	Rhode Island	35	9	40.9
	West Virginia	35	9	40.9
	Maine	35	8.93	40.8
	Vermont	35	8.9	40.8
	California	35	8.84	40.7
	Delaware	35	8.7	40.7
	Indiana	35	8.5	40.5
	New Hampshire	35	8.5	40.5
	Wisconsin	35	7.9	40.1
	Nebraska	35	7.81	40.1
	Idaho	35	7.6	39.9
	New Mexico	35	7.6	39.9
	Connecticut	35	7.5	39.9
	New York	35	7.5	39.9
	Kansas	35	7.35	39.8
	Illinois	35	7.3	39.7
	Maryland	35	7	39.6
	North Dakota	35	7	39.6
1	Japan	30	11.56	39.54
	Arizona	35	6.968	39.5
	North Carolina	35	6.9	39.5
	Montana	35	6.75	39.4
	Oregon	35	6.6	39.3
2	United States	35	6.57	39.27
	Arkansas	35	6.5	39.2
	Tennessee	35	6.5	39.2
	*Washington	35	6.4	39.2
	Hawaii	35	6.4	39.2
3	Germany	26.38	17.0	38.9
	*Michigan	35	6	38.9
	Georgia	35	6	38.9
	Kentucky	35	6	38.9
	Oklahoma	35	6	38.9
	Virginia	35	6	38.9
	Florida	35	5.5	38.6
	Louisiana	35	8	38.5
	Missouri	35	6.25	38.4
	Ohio	35	5.1	38.3
	Mississippi	35	5	38.3
	South Carolina	35	5	38.3
	Utah	35	5	38.3
	Colorado	35	4.63	38.0
	Alabama	35	6.5	37.8
4	Canada	22.1	14	36.1
	*Texas	35	1.6	36.0
	Nevada	35	0	35.0
	South Dakota	35	0	35.0
	Wyoming	35	0	35.0
5	France	34.43	0	34.4
6	Belgium	33.99	0	33.99
7	Italy	33	0	33
8	New Zealand	33	0	33
9	Spain	32.5	0	32.5
10	Luxembourg	22.88	7.5	30.38
11	Australia	30	0	30
12	United Kingdom	30	0	30
13	Mexico	28	0	28
14	Norway	28	0	28
15	Sweden	28	0	28
16	Korea	25	2.5	27.5
17	Portugal	25	1.5	26.5
18	Finland	26	0	26
19	Netherlands	25.5	0	25.5
20	Austria	25	0	25
21	Denmark	25	0	25
22	Greece	25	0	25
23	Czech Republic	24	0	24
24	Switzerland	8.50	14.64	21.32
25	Hungary	20	0	20
26	Turkey	20	0	20
27	Poland	19	0	19
28	Slovak Republic	19	0	19
29	Iceland	18	0	18
30	Ireland	12.5	0	12.5
*Michigan, Texas and Washington have gross receipts taxes rather than traditional corporate income taxes. For comparison purposes, we converted the gross receipts taxes into an effective CIT rate. See footnote 2 for methodology.
(a) Combined rate adjusted for federal deduction of state taxes paid

Source: OECD, http://www.oecd.org/dataoecd/26/56/33717459.xls

As you can see, we are less appealing as a place to help corporations increase their bottom lines. When they go, many jobs go with them (the Multiplier Effect ).

In an age where you can hire an entire staff over the internet for a fraction of the cost of employees in America…it’s time to start rethinking some of our nation’s business policies.

Think student loans will lead you to a better job, better income, and therefore (based on what our society makes you believe) a better life?  Think again.

Student loan debt has for the last couple decades risen higher than inflation.  It is an area that is little mentioned in the media, but is surely one of the next big bubbles in our economy.

The problems with having large student loan debt are:

1. There are fewer jobs

2. Most people don’t work in the same field as their major (atleast this was the case in the past)

3. School’s lag the real world and by the time 4 years goes by…the world is totally different.

4. The biggest problem of all: the only asset to pay off that debt is YOU.  They lent money to you, expecting you to work your tail off for the rest of your life to pay off your loans.  How’s that plan sound to you?  Hence why buying assets is so important.

I read an article in the LA Times about student loans.  The last story sums up the problem that many college students and grads face…and shows how many of us will see a standard of living below what we grew up with.

Marja Lopees of Burbank, CA went to college to become a lawyer and makes about $70,000.  Her total cost for college: $196,253.  Yikes!  Her payments are 40% of her earnings.

She was having trouble paying for school with just federal loans (no surprise) and so had to turn to private loans.  The $88,303 of private debt is currently at an interest rate of 8.84%.  Ms. Lopees has been quoted as saying: "I’m making interest-only payments on one of the loans, and still the payments keep going up.  It’s just overwhelming."

After paying for rent and student loans, she has just 40% of her after-tax income left for food, clothes, utilities, gas, maintenance, insurance, etc.  There won’t be any vacations, home buying, or anything else for a long time with that amount of debt.

Her last statement rings so true because this was the mentality of most people as they went to college.  As quoted in the LA Times :

"No one tells you to be careful of taking on too much debt when you’re in school.  It’s just the opposite. They just keep giving you loans and saying, ‘Don’t worry about it. You’re going to be a lawyer. It’s no big deal.’ "

Re-think how much debt you take on, and what interest rate you’re paying.  Compound interest scared Einstein…does it scare you?

Are you tired of the commercialization of Christmas?

When you stop and think of it, does it really matter if you buy people another toy/trinket or some other thing that has no lasting value?  Do materialistic things really matter that much?

As I get older, I’ve been reflecting back on my childhood and Christmas in general.  I don’t remember all the presents I got, but I do remember the quality time spent with family that I am fortunate to have.  Making memories through experiences are worth much more than a toy or other tangible gift.

So I propose to you: this Christmas, give a gift that has lasting meaning.

Action Steps

1. Sit down and hand write a note to the person you care about.  Tell them how much they mean to you and why you feel blessed to have them in your life.  Wrap this present and give it to them: it will go much further long term than anything you could possibly give them.
2. If you want to give a gift: give a gift that keeps on giving… a gift certificate for a nice dinner out perhaps or another experience that will bring you closer with your family or friends.  These memories are priceless.
3. Give to others out of the kindness of your heart.  It feels much better to give than receive.

When I read Ryan Allis’s book From Zero to One Million , he spoke of a lifestyle business versus other business types.  A lifestyle business is a business where you don’t bring in a ton of revenue, but you produce results that let you live the lifestyle you desire.

At www.Anywire.com , I found an article on how to become a Lifestyle Entrepreneur .  This article asks you the questions you need to determine whether or not you would fit into this category.

Answer the following:

1. Do you want to work fewer hours but still make good money?  This can be achieved by increasing your earnings/per hour or by finding other ways to make more money.
2. Do you want the freedom to travel and not be limited by geography?
3. Do you want to do “work” that doesn’t feel like it, so that your business and fun blend together?

If you answered yes to one of these questions, then I strongly recommend that you take a look at the article Become a Lifestyle Entrepreneur: Complete Guide and 40+ Resources that really gives you all the resources you need to help you discover which type of Lifestyle Entrepreneur you want to be!

Happy Growing!

According to the blog Lateral Action we are transitioning into the age where creativity rules.

A country can produce two things: goods and services.  It used to be that America was the engine for producing goods, but that has since changed as globalization has taken hold.  Manufacturing jobs have shifted overseas, and these countries can produce the bulk of the world’s needs with maximum efficiency.

Since just about anything can be outsourced these days – from graphic design to accounting and assistants- there is little left to compete on other than our creativity.  As discussed in the 4-Hour Work Week by Tim Ferris, Indian virtual assistants (VA) can work with a greater knowledge of research and technical skills than most American college graduates.  In the book The Elephant and the Dragon , Robyn Meredith states that there are more college graduates in one province in India than in the entire United States!

So clearly, there’s no shortage of competition.

According to Mark McGuiness of Lateral Action, it’s no longer about being efficient with our time.  He writes:

"Organization, professionalism, efficiency, productivity and initiative – these are becoming ubiquitous, and depending on where you live, there’s a fair chance someone, somewhere, can provide them cheaper than you can."

I see the way for you to differentiate yourself by developing skills that allow you to capitalize on your creativity.  And don’t tell me you have none: everyone has a little!  This could be by creating information products, designing something like a new product idea, or selling a service that fills a need within a niche market.

By discovering your own unique skills and making connections with others, you can work to provide more value to more people…and reap the personal and financial benefits.

In Your Court

How do you feel the Creative Economy will affect you?

In what ways do you feel you can capitalize on the new economy?

What are your fears or perceived limitations with moving forward?

Be sure to subscribe if you haven’t already, and leave your comments below…