Archive for the ‘Your Money’ Category

18 Types of Residual Income

September 23, 2011

When deciding how you would like to structure your personal finances with multiple streams of income and you are a full-time worker, you may wish to supplement your income with a second job.  However, just like your first job, your salary will still be subjected to income tax.  Moreover, the salaries from both of these jobs are considered linear income.  What you would like to do for yourself instead is earn residual income.

If the "linear income" you are earning from your day job is not enough, you should look into one of these 18 types of residual income to help you gain greater financial independence.What is linear income? It is the income you are earning from your full-time or part-time job.  With this type of income, the amount you earn is tied to how much you work.  The more you work, the more you earn; the less you work, the less you earn.  Let’s face it.  Sick time, vacation time and PTO can only cover so much of your off time before you start not getting paid for not working.

On the other hand, residual income (also known as “passive income” or “royalty income“) involves doing the work once and being paid for this work many times over, over a period of months or even years.

From the viewpoints of residual income, many types of professionals are not as wealthy as they appear.  Doctors, dentists and chiropractors only see a fixed number of patients per day.  Salesmen can only speak to so many potential customers per day.  Attorneys can only meet with so many clients per day.  Overall, these professionals are earning a linear income.

Because a linear income shows almost immediate results, people tend to get caught in the trap of viewing a linear income as being of little value to them.  For those who would genuinely like to live off a linear income in the future, the hard work must be put in now.  Once you’re working a steady job with a linear income, you can begin working on your plan to create a stream of residual income, setting aside two to four hours after work each day or part of your weekend to make this dream a reality.

If you do not know the types of residual income you can earn, here is a list to get you started:

Believe me, this is not an exhaustive list of the types of residual income you can earn.  Nonetheless, if you ask yourself this question right now, “What percentage of my day did I spend creating residual income?” and your answer is zero, you may wish to spend this evening or the weekend examining how you can turn residual income into a second source of income for you.  But as the saying goes, “Rome was not built in a day.”  With careful, consistent, and persistent planning, the royalties, profits, fees, or revenue earned from your endeavor will earn you residual income for years to come.

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Francis Unson

How Groupon Works

August 23, 2011

Groupon is a deal-of-the-day website that is localized to major markets in the United States and Canada.  The website was launched in November 2008.  It was first used in Chicago, later expanding to Boston, New York City, and Toronto.  Soon it was used by many parts of the United States.  Groupon serves more than 150 markets in North America.  Now, for those who are not Internet savvy, here are steps on how to use the website:

  1. Groupon offers discounts for things such as food and services, as long as enough people buy into the deal.Sign up at
  2. The site will send you e-mail updates on the daily deals in your city.
  3. Purchase the deal at the discounted price.  Most of the time, these deals will be at least 30% off the original price.  If you are very lucky, you may find a deal as much as 90% off!
  4. Once enough people purchase the deal, it is activated (tipped) and you will receive your discount.  If the minimum number of deals is not purchased, however, the deal is cancelled and no one gets it.  Fortunately, almost all deals on Groupon are claimed due to a large membership base and a low minimum number of users required to purchase the deal and trigger a tip.
  5. Once you receive your deal you can claim it at the store you got it for, usually within a period of time before it expires.  The website will also give you all the details about the Groupon you have purchased.

Saving money is a great thing to do nowadays, especially with the current state of the economy.  Websites such as Groupon will help you to save time and money.  Instead of shuffling through newspapers to cut out coupons, you can just print them at your convenience.

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Taylor P.

Five Best Ways to Save Your Money While on Vacation

June 21, 2011

Saving your hard-earned cash can be tough on vacation because of expenses such as buying fast food on the road, going to nice restaurants, doing fun activities, and paying for gas and souvenirs.  You don’t have to skip having fun on vacation since, after working or going to school for half the year, you deserve to have a good summer vacation!  Here are a few tips on stretching your money while on vacation:

  1. Overspending while you are on vacation can create worry that your trip away from home was supposed to get rid of. Here are some tips on how to spend less while on vacation.Watch what you spend your money on; don’t just throw cash away.
  2. The best souvenir is a picture, so bring a camera (they’re built into most mobile phones nowadays) and take lots of them instead of buying silly knick-knacks you can pick up in the hotel lobby.  You can also collect “free souvenirs” like match boxes from hotels and restaurants, room key cards, or ticket stubs.
  3. Instead of paying loads of money at an amusement park, go sit pool side at the hotel or go to the beach.  Quality time there is not just free, it is fun!
  4. Have budgets for hotel rooms, activities, and food.  Don’t overspend!
  5. Make sure your trip is planned out well in advance to ensure that you know what you and your wallet are getting into.

Vacations are a great way to recharge your batteries, but spending money can be difficult to do this summer.  Plan out your vacation right and budget your trip so that you can avoid spending traps.  Remember to have a fun, stress-free time!  You do not have to spend as much money to have fun as you think.

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Taylor P.

Changes to California’s 529 college savings plan: What to expect

June 15, 2011

The 529 plan, implemented in 1996, it is an education savings plan operated by a state or educational institution formatted to help families set aside funds for future college costs.  Fidelity Investments, the mutual fund giant that has administered California’s 529 plan since 2006, has dropped out of the running to keep managing it, and a state board has met on Monday to pick a new firm.  With a new firm comes new changes leading to the 529 plan’s revamping.

With mutual fund giant, Fidelity Investment, out of the running for managing California's 529 college-savings plan, the newest firm to administer the plan for California is expected to provide more investment options than was previously available.The state board responsible for California’s ScholarShare Plan sought bids from outside providers in March.  Fidelity, which manages 529 plans in four other states, did not bid. “Fidelity made a strategic business decision not to bid,” said Vin Loporchio, a company spokesman.  “We just made a decision that our best strategy is to focus our efforts in California.”  California’s 529 plan has been considered pretty average in comparison to other plans.  With the new changes, California is hoping that not only will the modified 529 plan help with college funds but also go above and beyond the previous plan to achieve more.

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Joie Montoya

Do consumers spend more for moms on Mother’s Day than dads on Father’s Day?

June 6, 2011

Naturally, we love both our parents equally, but when it comes to their special days of recognition, Mother’s Day and Father’s Day, who are we spending more on?  Whether it is time or money, do moms and dads get equal attention or does one beat out the other?  In one of my previous blogs, I wrote about the differences between the way we celebrate Mother’s Day and Father’s Day.  Based on my research, I found that more time went into Mother’s Day, but does that also mean that more money was spent on mothers?  Many studies have been done to figure out the answers to these very questions.

Do we spend more on our moms for Mother's Day than our dads on Father's Day?In certain studies, many people gave testimonials based on how things work in their household.  For example, some said that they like to make Mother’s Day much more special because moms are the ones who have nurtured and cared for us since conception.  On the other hand, some argued that dads work just as hard to provide for the family.  To get to the bottom of this, these questions can be better answered by looking at the statistics.  In 2008, the projected consumer spending for Father’s Day was close to $9.9 billion, which happened to be $5.9 billion less than what we spent on our moms that year.  This year, consumers were expected to spend $16.3 billion on moms and did, in fact, surpass that expectation.  Will we surpass expectations and spend $11.1 billion on our dads this year?  We shall wait and see.

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Joie Montoya

How FEMA Works

June 3, 2011

The Federal Emergency Management Agency, or FEMA, has been a federal disaster relief agency since 1979.  FEMA’s mission is to support our citizens and first responders to ensure that, as a nation, we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, and recover from and mitigate all hazards.  Even though FEMA is there after disaster strikes, it is not necessarily the most efficient disaster relief agency.

When disaster strikes, you can expect FEMA to be there, providing disaster relief for the victims. How does the process work? When disasters strike and people are in need of FEMA’s assistance, those affected by the disaster must fill out an application.  With all the recent disasters, there are many applications being submitted.  The agency can be very quick and send out disaster relief in hours, but in some cases, it can take days.  Sometimes, the applications received are filled out incorrectly or could be missing a signature, which would cause a delay in the process.  FEMA can proceed only if the president declares a major disaster.  Once that takes place, the process usually works like this:

  1. Local or state officials declare a state of emergency.  Local emergency crews and first responders work to deal with the disaster as best they can.
  2. State agencies respond.  This can include National Guard troops.
  3. Officials assess the damage.
  4. The governor of the state involved makes an official request for a disaster declaration, based on the damage assessment.
  5. FEMA makes a recommendation to the president, who either approves or denies the request.
  6. Once a presidential disaster declaration is made, FEMA can start providing assistance.

FEMA cannot assist with every disaster that happens, but when they do, they help out as best as humanly possible.  The agency was originally formed to stop the complications that usually result from multiple disaster agencies converging on the site of the disasters, yet it still has its flaws.  The process of getting help from this agency may be complex, but is a welcomed relief when disaster strikes.

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Taylor P.

What the U.S. Supreme Court ruling of “releasing” inmates really means

May 26, 2011

The United States Supreme Court ordered a massive inmate transfer to relieve California’s crowded prisons.  The Los Angeles Times stated, “The U.S. Supreme Court ruled that California must remove tens of thousands of inmates from its prison rolls in the next two years, and state officials vowed to comply, saying they hoped to do so without setting any criminals free.”  Tens of thousands of inmates will be transferred from state prisons to county prisons in the next two years.  The goal is to not release them at all, but to transfer custody of them.

The United States Supreme Court ordered a massive inmate transfer to relieve California’s crowded prisons. What does this really mean for California residents?In the U.S. Supreme Court ruling and the L.A. Times, they made it sound as though prisoners would be released into society early, using the words “release” interchangeably with “transfer” when in fact, this is not the case.  Neither the U.S. government, state of California, nor Los Angeles County intends to release any prisoners early.  Housing prisoners in county jails for the time being will still cost a lot of money.  However, there are plans to build more prisons in the future.  Governor Brown proposed raising that money by extending the tax hike, which is due to expire on July 1st, 2011.  Higher taxes may be, quite literally, the price we have to pay to keep criminals off the streets.

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Taylor P.

Effect of Japan’s Earthquake & Tsunami on America’s Auto Industry

May 19, 2011

It may take some time before the earthquake and tsunami that struck Japan in March 2011 really affects America’s car industry, but when it does, here are some things you can expect to happen.  Since there were several parts suppliers that got wiped out by the earthquake, there will be less inventory at Japanese car showrooms, in turn, reducing inventory in the United States, which is supplied by Japan.  The popular Toyota Prius and other Japanese hybrid cars are already experiencing scarce inventory.

How would the earthquake and tsunami that struck Northern Japan in March 2011 affect the auto industry in the United States?In addition, there could be an increase in the demand for used cars.  Used car prices may rise this summer if the demand increases.  However, this could be good news to those looking to trade their old vehicle for a new car.  Finally, a buying frenzy for American cars may occur.  There was a large recall on Toyota cars recently, putting the Ford Motor Company in the spotlight.  It looks like 2011 may be a good year for Ford, Chevy and Chrysler and other American car makers.

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Taylor P.

Do You Suffer from ‘Groupon Remorse’? (via It’s Your Money)

May 16, 2011

After I watched the video clip, “Groupon, LivingSocial ‘deal of the day’ pros and cons“, which concerned the most recent version of buyer’s remorse on CBS’ “The Early Show” this morning, I searched for articles and blogs about “Groupon Remorse”.  Apparently, has found consumers “who completely went overboard and are swimming in coupons they’ll never use”.

Paying good money for a coupon you don’t need, never use, and later sell for less than the purchase price hardly seems like a deal. The success of online group-buying giant Groupon has inspired the rise of countless copycats and competitors, including BuyWithMe, LivingSocial, and beyond. Now, reports the Boston Globe, daily deal sales are so popular—they’re projected to pull in $5 billion in sales this year—we’re seeing the rise of a related indu … Read More

via It’s Your Money

Fannie Mae in Need of Federal Aid

May 14, 2011

Despite mortgage buyer Fannie Mae’s mission of “providing liquidity, stability and affordability to the U.S. housing and mortgage markets”, the company reported an $8.7 billion loss for the first quarter of 2011, due to declining home prices around the United States.  The company is asking for $8.5 billion in federal aid.  This is not the first time Fannie Mae has asked for federal aid; in the last quarter of 2010, they received a loan of $2.6 billion.  The bailouts will cost about $259 billion to taxpayers.

Declining home prices around the United States has forced Fannie Mae to ask for $8.5 billion from the federal government, on top of the $2.6 billion loan they received in the last quarter of 2010. Fannie Mae buys home loans from banks and other lenders, packaging them into bonds with a guarantee against default and selling them to investors around the world.  When property values drop, homeowners default on their mortgage.  Fannie Mae guarantees that if the investors are unable to afford the payments, they will pay off the losses for them.  The company expects to make money on home loans that it acquired since January 2010.  Fannie Mae, based in Washington State, owns about half of all mortgages in the U.S., or nearly 31 million home loans, worth more than $5 trillion.  The bottom line is that they owe a lot of money in a market that hasn’t been doing well for a long time.

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Taylor P.