Financial Independance and Retirement, Realizing The Difference

Wealth creation can be an often confusing topic and one of the reason’s is our percetption of the terms used in the financial management arena. One of the most misunderstood concepts is the reference to retirement.

When we think of retirement, we think of an old person, some time in the future, preparing to live their days out with nothing to do and no money to do it with. Retirement is another way to say financial independence. These terms are interchangeable but they have greatly differing perceptions in our minds.

Financial independence is often seen as some young guy with a hot business making money hand over fist. Words are incredibly important in coloring our perceptions. Our perceptions lead our beliefs and therefore our actions.

This short article serves to enlighten readers about the distinction between retirement and financial independence. To fully understand what I am speaking about, I want to ask you which you prefer. Do you want to be that future old person, living on welfare and having all the time in the world to do nothing. Or do you want to be the young person, getting their money now and living life to the full without ever a concern about money.

Financial independence and retirement are both the same thing. They mean the individual has a sufficient enough passive income, to live a good lifestyle without needing to work for a living. This can be in the form of a very large nest egg delivering bank interest returns. Or it can mean a business has been built utilizing systems so the business runs itself without the operator needing to work in it. Or it can mean living on welfare.

Here is the point. When you talk about retiring, your mind instantly thinks government subsidized life style. It is about working a long time, waiting until you get old and then claiming your right to receive your dues from the government. Financial independence is different. Your mind immediately thinks, working smart not hard. It means becoming the originator and the source of a good business or investment activities that make you rich now. Not living off welfare in 40 years time.

Word’s are important and using the right words when you think about the future will dictate your actions. Retirement is about waiting. Financial independence is about action now.

Web Hosting For a Smaller Business – How to Put Your Business on the Web

For sure, if you are counting on a maximum web presence for your promotional investment with regards to your smaller to mid size business then good consideration should be given to the web host that you use. If you were just an individual looking to share your interests or a hobby with others on the net it really wouldn’t make much difference what web host you selected but being that you are a for profit business then there are a number of things that you should consider.

At the present time there are literally thousands upon thousands of web hosing providers who are all competing for your business and they all have so many different services and tools to offer in a wide variety of price ranges, so it can be some what confusing. The first thing that you have to take into account is the type of website that you are setting up, because this matters a lot when determining your web hosting needs.

For instance if your website is going to be less than one-hundred pages and isn’t going to contain any multimedia content such as streaming videos then a standard plan which many hosts refer to as an entry level plan might be all that you need. You can easily find a web host with this type of plan for somewhere in the area of $5 per month or so.

One other option that you might consider is what is commonly referred to as “shared hosting”due to its afford ability. These plans are available in the $10 price range and usually have lots of feature advantages such as high storage capacity and broad bandwidth. Of course knowing the exact amount of bandwidth that you will be needing is dificult if not imposible to determine exactly however; there is a basic formula that you can use for “guestimating”.

You simply estimate the approximate size of the pages in your website and them multiply that by the number of pages that you think that you will be ending up with. Of course bandwidth, gigabytes and price should not be the only thing that you take into consideration when selecting a web hosting service for your website.

If your website is a site that you are using for clients to refer to in your community and you won’t be doing any real Internet marketing on it then you won’t have to really concern yourself with SEO or search engine optimization. However if you are going to rely heavily on Internet marketing for your business then you may want to think about SEO when you are selecting a web hosing service.

There are a few strategies to take with regards to your web host and SEO. One option is to locate a web host that provides SEO services and in that case you will want to research carefully what options that they provide. Another option for considerations is if you plan on doing your own SEO and in that case you will want to make sure that your web hosting service provides the basic tools that you will need for doing your own SEO.

Creating Wealth With A Small Or Home-Based Business

Millions of Americans are discovering how to attain wealth with a small business. Many individuals are being outsourced due to companies downsizing. This trend is expected to continue due to increasing foreign competition and factors in the US economy. A small business is defined as a business with 10 employees or less. A home-based business falls under the category of a small business for our discussion therefore we are also speaking of home-based businesses. A small business is one of the last significant tax shelters other than a home for middle-income Americans. Individuals can receive tremendous tax incentives with a small business along with income-generating opportunities. Items such as training, books, business meals, entertainment, business travel, payment to family members for employment services, auto maintenance, utilities, a percentage of the mortgage or rent, and others. Tax advice is beyond the scope of this document and the discussion here is not intended to provide advice, strategies, or education on tax subjects. To get the necessary information on small business tax considerations, visit

The small business should be started with every attempt to make a profit. The IRS allows the business owner time to generate a profit. Most business owners will incur a loss for at least the first year of operation. Some incur a loss the second year as well. If the business does not show a profit by the third year, it is in risk of being labeled a hobby by the IRS. Hobbies are not given the same tax consideration as small businesses therefore the deductions would not apply.

A business owner can employ several strategies to generate wealth. Using the tax deductions allowed by the IRS, a business owner may elect to pay his or her children to help out with the business. The children could put all or a portion of their wages into a tax-deferred college savings fund. The wages would be a tax deduction for the parent and depending on the children’s tax bracket, the wages could be tax exempt income for them as well.

Take, for example Bob, who is an employee of a company. Bob receives $40,000 a year from his employer in wages. Now let’s say that Bob decides to start a small business. The first year, his business has $12,000 in revenue. The expenses were $15,000 for the first year which included business meals, business travel, educational training (books, seminars, etc), wages to family members, advertising, office expenses (printer, computer, paper, etc), utilities for his office, mileage for his auto for business travel, costs related to manufacturing the product or providing the service, a percentage of his rent or mortgage if his business met the IRS criteria of a home-based business, and other business expenses.

Because Bob’s business had a net loss of $3,000 ($12,000 – $15,000), he could report a lower taxable income to the IRS. In other words, he would report his taxable income to be $37,000 to the IRS rather than $40,000. Depending on other things going on in Bob’s life, this could reduce his tax liability. The IRS allows for business deductions but does not allow for tax avoidance. Be sure you understand the difference. There are certain items that can be deducted in a small business that could effectively lower an individual’s taxable income as long as it is not a ploy to avoid paying taxes. The business owner must make every attempt to make a profit. Otherwise, after the third year, the IRS views the operation as a hobby as stated previously. Again, tax advice is beyond the scope of this document and the discussion here is not intended to provide advice, strategies, or education on tax subjects. To get the necessary information on small business tax considerations.

A business can be established in several methods such as a franchise, multi-level marketing, affiliate, and start from scratch method. A franchise is a method of doing business wherein the franchisor approves a franchisee to use certain processes of doing for an upfront fee and a percentage of monthly sales or monthly profits. It is a cookie-cutter approach to owning a business. Franchises can cost as little as $20,000 and up to several millions of dollars.

Many forward-thinking company executives have adopted the multi-level marketing or MLM technique to selling their products and/or services. With a MLM business, an individual can receive training support, and possibly marketing support from the parent company. A MLM business owner earns a commission on their personal sales as well as a commission on the sales generated by the people they have recruited into the organization once certain qualifications have been met. This type of business can be started with as little as a $49 investment or with as much as several thousands of dollars.

An affiliate business is one in which an individual agrees to market a company’s product or service in exchange for a commission. An affiliate usually receives a Website and earns a commission on revenue or leads generated through the Website. Some affiliate programs have a tier structure allowing the business owner to also earn revenue from affiliate members who signed up from their Website.

Starting a business from scratch can be the most risky of all choices. There are many areas that must be explored and mastered in order for this method of business to be successful. Historically, startup businesses using this method have a much higher failure rate than the other startup methods. However you have more control over the service/product pricing, marketing, distribution, and other aspects of the operation. It can be very satisfying when your product or service is delivered in the manner you envisioned.

With the additional income from the business coupled with the tax savings, you could have the opportunity to save more money on a monthly basis toward your retirement funds, college funds, and/or dream funds. If you are able to save this additional money in high earning yields (methods paying high interest rates), you can build substantial amounts of wealth over time. Consider the following:

Saving $500 a month at a rate of 10% for 20 years would result in approximately $102,433 in your savings fund.

Saving $1000 a month at a rate of 10% for 20 years would result in approximately $204, 867. Twice as much as if you were saving $500 a month.

Now consider these:

Saving $500 a month at a rate of 15% for 20 years would result in approximately $137,636 in your savings fund. Over $35,000 more in your fund than if your money was growing at 10%.

Saving $1000 a month at a rate of 15% for 20 years would result in approximately $275, 272. Over $70,000 more in your fund than if your money was growing at 10% annually.

Saving $500 a month at a rate of 20% for 20 years would result in approximately $188,107 in your savings fund. Over $50,000 more in your fund than if your money was growing at 10%.

Saving $1000 a month at a rate of 20% for 20 years would result in approximately $376, 215. Over $100,000 more in your fund than if your money was growing at 10% annually.

This is the magic of compound interest and is how you can generate a great deal of wealth. The key is to maximize, maximize, maximize. Use a small business to maximize your monthly savings contribution. Maximize the amount of interest your money will earn annually. And maximize the number of years the money will grow.