Toyota to recall 300,000 cars

TOYOTA is voluntarily recalling 6.5 million cars globally — including up to 300,000 in Australia — because of a glitch in the power windows.

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Beer drinkers’ $27.5 million payday

DON’T mess with the craft beer set: a major brewery has agreed to fork out $27.5 million to settle a class action by drinkers who felt “deceived” by packaging.

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The big change heading to Aldi

ALDI is getting a fancy new makeover. But will their new hipster-friendly stores trick us into spending more? Or will they lose their market edge?

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Star Wars trailer smashes ratings

MORE people watched the new Star Wars trailer when it debuted during halftime of an American football game than the game itself.

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‘We agonised over dividend cut’

THE chairman of one of Australia’s biggest energy companies says the group “agonised” over its decision to cut the amount it pays out to investors.

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Health insurance boss to step down

THE head of Australia’s biggest health insurance company has announced he is stepping down 15 months earlier than planned.

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Coles hatches discount battle plan

EGGS are set to become the latest battleground in the supermarket price war, with Coles smashing the price of the breakfast staple from today.

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Trooper shot in Blooming Grove barracks attack helps open hotel in Bartonsville

“People have been so nice,” said injured Trooper Alex Douglass.

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Flea Market Gold: How I Made $9,000 Sorting Through Costume Jewelry

Have you ever wondered how “American Pickers” and pawn shops make their money? They buy and sell gold!

And it’s not just TV “magic.” I made $9,000 in profit last summer buying gold at flea markets and selling it to a jeweler. Here’s how I did it, and how you can do the same.

How I Started Buying and Selling Gold

Last summer, I bought a junk box from a flea market. Inside was a bag of costume jewelry with six gold rings mixed in.

I Googled three local jewelers in my area, picked the jeweler with the best online reviews and visited him. He made me an offer for the rings, and I took it.

When I told him how I found them, he said, “People throw away gold all the time.”

The jeweler then told me he would pay 80% of the melt weight of any more gold I brought to him. So, if I brought him $100 in gold, he’d give me $80 cash.

Over the next few months, he paid me $14,000 cash. After subtracting the cost of buying the gold items, I was left with about $9,000 in profit. Not too shabby!

Here’s how to try it for yourself.

How to Find Gold at Flea Markets

Look up your local flea markets by Googling “[your city] + flea markets.”

Make sure there are at least 60 or more vendors. Avoid small markets — they’re often more social meetings than markets.

Go to the market first thing in the morning. The crowds show up before and after lunch, so going early guarantees you’ll have time and space to search (and haggle), and find your items before anyone else does.

The key is to profit from vendor laziness. Flea market vendors sell hundreds of pounds of stock; they don’t have time to go through bags of costume jewelry. But you do.

How Do I Know if My Gold is Real?

The first thing you need to know is how to identify whether or not something is gold.

Look for “10k” and “14k” markings. Avoid items marked HGP, HGE, GR or EP — this means the gold is plate. Plate gold isn’t pure, and purity is what pays.

You can purchase gold testing kits and watch gold testing tutorials on YouTube, but here’s my professional secret:

I Don’t Test the Gold

Why? Two reasons.

First, I only buy clearly marked gold. If the gold has unusual markings, I avoid it.

Second, I buy real gold mixed in bags of costume jewelry. If the gold is fake, I’ve only spent $2-$10 on the bag, which makes it easy to absorb the loss.

Super Pro-Secret: Use a Magnet

If you want a quick way to test the gold before you buy it, bring a magnet with you. Hold the magnet next to the item; if it reacts, then it’s not gold.

What Is Gold Worth?

Your gold’s value is based on its composition — how much gold is in your item.

• 10-karat gold is 41.7% actual gold, so it’s worth 41.7% of gold’s melt weight

• 14-karat gold is 58.3% actual gold, so it’s worth 58.3% of gold’s melt weight

To find the current value of one ounce of gold, use a tool like Kitco. Take that number and multiply it by your item’s purity.

For example, as I write this post, gold is worth $1,183.50 an ounce. If your items are 14-karat gold, multiply $1,183.50 by 0.583 (58.3%, the purity of 14-karat gold) to get $689.98 — the value of an ounce of 14-karat gold.

Divide this number by 28.3495231 to get the gold’s value per gram, the way most jewelers will measure it. Your 14-karat gold is worth $24.34 per gram.

So a 14k gold ring that weighs 5 grams holds $121.69 worth of gold.

Gold buyers notoriously underpay, so avoid them. Find a local jewelry store or gold shop for a better rate.

In my experience, if you have $100 in gold jewelry or coins, gold shops will pay you between $70 and $75.

Will You Start Buying Gold at Flea Markets?

Every trip is different. I’ve had weekends where I make $1,000, and weekends where I make nothing. Generally, I go through six medium bags of jewelry before I find gold.

Take your time. Don’t get overwhelmed. All you need to do is find two gold rings or a pair of gold earrings, and you’re making money.

Focus on buying earrings and rings. Necklaces are easy to counterfeit and are often gold plate.

Don’t be afraid to walk away from deals. Don’t buy something just because it seems like a good deal. If something seems too good to be true, it usually is.

Your Turn: Have you bought and sold gold before? Tell us about your experience in the comments — or if you’re curious about the process, ask your questions!

Jesse Gernigin helps people make money and increase their income. Jesse is an author, entrepreneur and success coach. His latest gig is as the head writer of www.livegoldrich.com where he shares how to make more money, travel for cheap and live the life you want.

The post Flea Market Gold: How I Made $9,000 Sorting Through Costume Jewelry appeared first on The Penny Hoarder.

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So the U.S. Has a Lot of Debt. What Does That Mean for Me?

Another year, another showdown in Congress as the nation’s debt ceiling looms overhead. Photo: James Pallinsad

If you’ve been watching the national news lately, one of the topics creeping back into the discussion is the federal debt ceiling. Our nation’s debt is expected to reach the current ceiling in early November if Congress doesn’t raise the current limit.

Since it’s a topic that seems to come up on an annual basis, I began thinking about what the ballooning federal debt means for the average American investor over the next 10 to 15 years. This article analyzes what the growing federal debt may mean for you, and some actions you can consider to hedge against these risks.

How Bad Is It?

First, let’s start with some sobering statistics about our nation’s finances. Then I will relate what this means for you as an individual investor.

According to TreasuryDirect.gov, the current U.S. debt stands at approximately $18.15 trillion. I have often seen this figure stated in terms of debt per capita, but that’s not an overly helpful ratio because the government’s primary way to raise revenue to pay for debt and the interest on it is by taxing wage earners. Only about half the country is in the labor force — approximately 156.7 million people.

That means there is almost $116,000 of U.S. debt per American worker!

Congressional Budget Office 10-Year Outlook

Now let’s look at the Congressional Budget Office’s (CBO) 10-year outlook for 2016-25. In the table below, I have summarized some of the key data:

The first number that jumped out at me is GDP growth. The CBO is banking on projected GDP growth of almost 4.4% per year, growing from just under $18 trillion currently to $27.3 trillion by 2025. If you have been following the news lately, we are struggling to get to 4% growth.

Next, take a look at the tax-to-GDP ratio. If we use GDP as a proxy for the nation’s total personal and corporate income, then the tax-to-GDP ratio gives us an overall effective tax rate for the economy. Right now it is a little more than 18% and is projected to stay there.

However, if we look at growth of federal expenditures and the ratio of federal expenditures to GDP, we can see our spending rate is projected to grow from 20.6% of GDP currently to 22% in the next 10 years, with annual projected deficits reaching $1 trillion by 2025.

That means the gap between the effective tax rate and the effective spending rate for the country is projected to continue to widen from a little more than 2% currently to about 4% by 2025, and that’s if the economy can grow GDP at a robust rate. This projection shows a potentially dangerous path, because at the point in time when the gap between the tax rate and spending rate exceeds GDP growth, it means our debt level in relation to GDP will be on a path to unsustainability.

The doomsday scenario at some point in the future would be loss of confidence in the federal government as a credit risk, significant devaluation of the dollar, and hyperinflation.

On the optimistic side, several things could occur to prevent such a scenario. One obvious solution is that our policymakers in Congress have the ability to act to prevent such a result, either through cutting spending or raising taxes.

Most of the future spending increases relate to social welfare programs (i.e., Social Security, Medicare, and Medicaid) due to the entire baby boomer population reaching Social Security retirement age in the next decade.

Therefore, my opinion is that it will be much more likely that we’ll see tax increases before spending cuts, because I doubt that members of Congress (many of whom are also baby boomers) will cut benefits for themselves or a large group of their voting constituents. Potential tax increases obviously have implications for you as an investor, which I will discuss below.

Another way to get out of our path to unsustainability would be through unexpected GDP growth. This translates to a larger tax base and therefore increased tax revenues. That could happen either through unexpected gains in worker productivity, such as from breakthrough technologies that are unforeseen, or from a higher-than-expected expansion of the workforce, i.e., population growth of working-age people.

Hedging Against an Unknown Future

With Congress’ approval rating below 15%, my guess is that if you’re reading this article, you probably don’t have a lot of confidence that Congress will get its act together and solve these policy issues any time soon. So how do these issues relate to you as an individual investor, and what are some actions you can consider to hedge against a doomsday scenario in our country’s finances?

Protecting Against Potentially Increasing Taxes

Let’s start with the most obvious implication for you — taxes. If we look back at the table above, in order to balance our nation’s budget, the overall effective tax rate would need to increase from its current rate of 18.2% of GDP to 20.6%. That equates to an increase of 13.1%.

Looking at the table again, if we keep kicking the proverbial can down the road, then the CBO is projecting that taxes would need to increase from 18.2% of GDP to 22% in 10 years. That would equate to a tax increase of more than 20% in order to balance the budget.

As I highlighted in one of my previous articles, investors have the majority of their retirement savings in tax-deferred accounts. This means that all of the money in those accounts will be subject to the ordinary income tax rates in place at the future time you withdraw the money. Based on the data currently available to us, if I were forced to bet whether ordinary income tax rates will be higher or lower 10 years from now, I would bet higher, and possibly significantly higher.

That’s why I urge investors I meet with to hedge some of this risk and consider paying the tax on a portion of that money today. If you do, you can convert a traditional IRA into a Roth IRA account, which will then be tax-free from that point onward and insulated from future tax hikes. I discuss this option, sometimes called the backdoor Roth IRA, in greater detail in this post.

Sometimes I get pushback on this issue for a couple of reasons. One is that many investors don’t want to pay any taxes until they are absolutely forced to do so.

Another reason is that some investors believe that by delaying the tax they can grow the account to a much bigger value. This is true until you have to pay the tax in the future. In other words, if it turns out that the tax rate doesn’t change, then there is no difference in the outcome. Let me illustrate:

Suppose I have $100,000 today. It will grow at a 5% rate for the next 20 years, and I can either pay a 20% tax on it now or a 20% tax on the future value in 20 years. If the tax rate stays the same, then the net after-tax money available stays the same regardless of which option is chosen:

• If I pay the 20% tax now and convert the money to a Roth IRA, then my account starts at $80,000. If I compound $80,000 at 5% for 20 years, it grows to $212,264, at which time no further tax is due.
• If I instead wait to pay the tax, then the $100,000 grows to $265,330 in 20 years — at which time I would need to pay the 20% tax on that amount. It still winds up at $212,264.

I also get pushback because many people are convinced they will be in a lower marginal tax bracket and thus have a lower overall effective tax rate in retirement than they have now. This may be true, especially if you are a high-income earner falling in the 28% marginal bracket or above, but a well-thought-out calculation does need to be done.

For example, after my previous article discussing Roth IRA conversions, I spoke to a gentleman in California who is a solid income earner and who is certain he and his wife are going to retire in a state other than California. In that situation, it probably is wise to continue deferring all taxes because California has some of the highest state tax rates in the nation on top of the federal rates. The states they are looking to retire in have much lower tax rates.

When you analyze your own tax situation for your projected retirement, be sure to take into account required minimum distributions from your IRAs as well as your Social Security income. For many people, up to 85% of Social Security income will be considered taxable income.

If you fall in the 25% marginal tax bracket or below, you should at least consider hedging a portion of your future income tax exposure.

Protecting Against a Devaluation of the Dollar

Another risk presented by weakening government finances is the potential for a significant devaluation of the dollar.

In my opinion, the easiest way to hedge against this risk is to have a portion of the portfolio devoted to owning a basket of international stocks. There are hundreds of such funds available in the marketplace.

That way, you own a basket of growing companies all around the world in multiple other currencies, you receive dividend income along the way, and you participate in world growth. If the dollar does suffer a crisis, then those international holdings will increase in value purely because of the currency exchange.

The great part of this strategy is even if the dollar doesn’t suffer a crisis, there are still benefits of having a diversified portfolio containing a basket of international stocks. The U.S. is a mature, developed economy, whereas the international emerging markets have future prospects for higher growth.

On top of that, because international stocks have suffered a beating in 2015, they also currently offer more dividend income than the S&P 500. Many international funds are paying a 3% dividend rate or more right now.

Why I’m Not a Fan of Gold as a Hedge Against the Dollar

Some people hedge against a doomsday scenario for the dollar by owning gold in their portfolio. I am not a fan of this strategy for several reasons.

One is that gold is typically just a tiny portion of a person’s portfolio and therefore is not significant enough to do much to counteract the effects of a crisis in the dollar in the remainder of the portfolio.

Second, gold is just a piece of metal. There is only so much of it in demand in industrial and manufacturing processes. The remaining value of gold is purely due to its speculative value and history as a medium of exchange before state-sponsored currencies came into widespread use.

I would rather own a worldwide basket of growing businesses that pay me dividend income along the way than a piece of metal that only has speculative value because of its use as a historical relic.

Warren Buffett also offered some good commentary on gold in his 2011 Annual Letter to Berkshire Hathaway shareholders. Here is a small portion of that commentary:

The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else — who also knows that the assets will be forever unproductive — will pay more for them in the future.

* * *

This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce — it will remain lifeless forever — but rather by the belief that others will desire it even more avidly in the future.

The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor productive. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.

Social Security Risk

And finally, a brief comment about Social Security.

There is an interesting cultural phenomenon in our society with Social Security. For many of the baby boomers (currently ages 55 to 70), retirement is solely possible because of Social Security. However, when I speak with people age 40 or younger, I don’t believe I have met a person yet in this age group who believes Social Security will be anywhere close to its current form by the time they hit 65 or 70.

If you carefully read your annual Social Security statement that projects how much your benefits will be when you reach full retirement age, the fine print in the statement states that benefits aren’t guaranteed and could change at any time.

If Congress does start reducing Social Security benefits, one of the easiest cost-saving measures would be to eliminate the annual cost of living adjustment (known as COLA). Therefore, when I speak with baby boomers, I suggest to them that a prudent retirement projection should assume that Social Security benefits could become a static level payout and may not increase with inflation in the future.

For those of us falling in the 40-and-under age group, I happen to agree that it is prudent to plan for retirement assuming Social Security will be nowhere close to its current form, or possibly even nonexistent.

Tim Van Pelt is a financial planner and registered investment advisor representative of Steele Capital Management Inc. The views expressed in this article are solely his and do not necessarily reflect the views of Steele Capital or its management. You can reach him at tjvanpelt@gmail.com or (608) 577-9877. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, investing, tax, legal, or accounting advice. You should consult your own investment, tax, legal, and accounting advisors before engaging in any transaction.

The post So the U.S. Has a Lot of Debt. What Does That Mean for Me? appeared first on The Simple Dollar.

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Business Briefcase: Fairfield Inn comes to Stroudsburg

Hotel offers latest décor styles, convenient location The Fairfield Inn & Suites by Marriott in Stroudsburg, opened Oct. 20 with its smart, inventive public space and guest room design, and its bright and inviting décor. Located at 294 Frantz Road in the vicinity of Lowe’s off Route 611, the Fairfield Inn & Suites Stroudsburg Bartonsville/Poconos [...]

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Winning the Debt Limit Fight

Two big budget showdowns are looming in Washington. The first is what to do about raising the $18 trillion debt ceiling. The second is whether to retain the spending caps/sequester cuts in the 2016 budget.

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7 Ways to Cut Down on Holiday Gift-Giving

Putting a halt to endless gift exchanges with family and friends will save you time, money and stress.

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How to Go on a Long Trip Without Going Broke

World travelers share five tips to afford extended trips.

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If You Want to Win Millions in the Lottery, Stop Playing Your Lucky Numbers

You’re at the gas station picking up a snack when you see the lottery has reached epic proportions. You decide to buy a ticket.

When the cashier asks if you have specific numbers you’d like to choose, you say what you always say: Your birthday. Or your anniversary. Or your “lucky” numbers.

Every number has the same chance of winning — so you might as well pick numbers that mean something to you, right?

As it turns out, no. You should put all sentimentality aside and just let the computer pick.

Why Your Anniversary Won’t Help You Get Rich

Though the numbers don’t affect your probability of winning, they do affect your probability of having to divide your winnings, explains Jo Craven McGinty in The Wall Street Journal.

“Any combination of numbers is equally likely to win, but people tend to choose some numbers and combinations more frequently than others, increasing the likelihood that different people will end up with the same picks,” writes McGinty.

And the more people with the same picks, the more people with whom you have to share your winnings — and the less cash you’ll actually take home.

Though the data is based on a study of the Dutch Lotto, McGinty also shares two examples to illustrate her point:

In 2011, four numbers featured on the TV show “Lost” were picked in the Mega Millions lottery; since these were popular numbers, more than 40,000 winners came forward. Each of them won $150.

Compare that to the Michigan woman who let the computer pick random numbers for her: She was recently the sole winner of a $310.5 million Powerball lottery.

“If the aim is to vie for the maximum payout, the best strategy is to let the lottery’s computer generate a random combination of numbers that is less likely to be duplicated by lots of other players,” writes McGinty.

As special as it may be to use your anniversary and kids’ birthdays every time you play the lottery, wouldn’t it be even more special if you came home with an extra $300 million?

Your Turn: Do you always play the same lotto numbers? Now that you’ve read this, will you change your ways?

Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.

The post If You Want to Win Millions in the Lottery, Stop Playing Your Lucky Numbers appeared first on The Penny Hoarder.

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What to Do When Your Boss Is Half Your Age

Four ways to ease the awkwardness of this reporting relationship.

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We’re Saving $11,650 by Throwing Our Reception Months After Our Wedding

We had visions of our dream wedding reception: twinkling candles, great food and an open cocktail bar.

We wanted a distinctive, memorable atmosphere where our friends and family could meet each other, share laughs and end the night with sore feet from dancing.

The trouble was the cost.

As a 30-year-old college graduate saddled with student loans, money is something I don’t have much of. My husband is foreign, and while he worked regularly in his own country, moving here means his income is capped at exactly $0 until he is issued a work permit.

So we really wanted to save money on wedding expenses.

The “W” Word

As soon as we got engaged, we did what all couples do — we told everyone!

The more people we talked to, the more we realized no single word raises the rates for services as quickly as the word wedding. My husband moved across the ocean to marry me, but the mounting wedding costs was going to price us out of having one!

Did the w-word condemn us to debt-inducing prices? We decided to find out.

How the Word “Wedding” Raises the Price of Services

We began by cold-calling our favorite venues. I asked each place about their rates, and took note of what each wedding package included and charged.

Days later, I called again. This time, I asked if the properties were available for private parties. I explained that my husband and I were already married and wanted to arrange a gathering for our families who were unable to attend our wedding.

Every single venue was cheaper to book for a private party than it was for a wedding, often by thousands. Plus, there was no difference between what was included in a private party rental versus a wedding rental. If, for example, police security was part of a package, it was provided for both.

What It Cost to Have a Reception Months After Our Wedding

We got married at a courthouse on a random Tuesday in March with only a U.S. Marshall as our witness. The wedding cost us $72.

Months later, our finances improved, so we called our favorite venues. I described with complete honesty what I wanted. I didn’t want anyone to feel duped, so I told them everything — we wanted a dinner and a chance to exchange some homespun vows in front of loved ones.

Because we were already married, every location we called offered us their corporate or private party rates.

Here’s the full breakdown of what our venue charged for a wedding, versus our delayed reception.

Cost of a Wedding at Our Venue

• For a traditional wedding, our venue charges $7,000 during their off-season and $8,000 during their busy season; we’re having our reception during the high season. You can rent the location for up to 10 hours.

• There’s a flat fee of $200 for chair and table set up.

• The candle package costs $1,000.

• Our venue only works with vendors with a catering license. Catering averages $68 per head, according to The Knot. We’ve invited 100 people, so food would cost roughly $6,800. A cocktail hour or open bar would raise that cost considerably.

• Plus, the venue offers enough beds for 12 people to sleep over. This costs an additional $1,000, and to stock the place with breakfast food and drinks would cost $2,400 per 10 people.

If we were hosting a regular wedding reception at this venue, we’d need to budget $16,000, not including music, the sleepover or décor (excluding candles).

Cost of a Private Party at Our Venue

• Private parties are $700 per hour. We rented our venue for four hours, so it cost us $2,800.

• We added the chair and table setup for $200.

• We are allowed to bring our own candles and twinkling lights, which cost us $150.

• We are also allowed to bring in our own premade food, or use the facility’s two kitchens to cook onsite. We spent $400.

• We can bring our own booze, and we spent roughly $800.

All told, our private party will cost $4,350.

Waiting to throw our reception until months after our wedding helped us cut our wedding costs by $11,650.

By avoiding ready-made wedding packages, we’re throwing the party we want at the venue of our dreams — without blowing our budgets.

Your Turn: Would you have a reception months after your wedding date to save on costs?

Kerry Aberman studied creative writing at UCLA and UMN. She is currently freelancing and writing her first book, while living with her British rocker husband in New Orleans.

The post We’re Saving $11,650 by Throwing Our Reception Months After Our Wedding appeared first on The Penny Hoarder.

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Do Ugly Quarterly Earnings Represent a Turning Point for Energy Stocks?

Energy stock earnings are expected to fall 66 percent from last year, according to an analyst.

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Smart Shopping Tricks to Make Your Budget Last All Month

Shopping online and tracking coupons are just the beginning.

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Ferrari's IPO Could Rev Up Faster Than Its Luxury Cars

The luxury automobile company will soon make shares available. Will they be worth the premium price?

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Audio: Dealing with Financial Disruptions

Saving more money now is the best way to get ready for inevitable crises. 

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This Guy Just Made $5,000 Selling Something That’s Probably in Your Backyard

Remember the guy who turned last year’s Boston blizzards into a chilly side-hustle, ShipSnowYo? He’s back, this time offering autumnal cheer with way fewer calories than a pumpkin-spice latte.

Kyle Waring launched ShipFoliage.com in early October, offering to ship a trio of genuine New England-sourced maple leaves almost anywhere for $19.99 per pack, plus shipping. (No word yet on international shipping options.)

Waring said he received 250 orders in his first week, which amounts to a cool $5,000 in revenue from ShipFoliage’s launch alone.

Foliage as a Service (FaaS): Short Harvest, Long Preservation Process

Although the video below makes it look like collecting leaves to sell is as simple as taking a field trip, this business has a short season.

“The foliage season typically lasts until the first frost, which is usually the very beginning of November,” Waring explained. “Based on some of the discussions with meteorologists and research, this year we’ve experienced a warmer fall. I’m hoping the season lasts until mid-November!”

Each order promises one red, one yellow, and one “mixed-color” leaf, which the ShipFoliage website notes “are especially challenging to find, and are by far the rarest leaves with the tightest window to process and preserve.”

The preservation process is time consuming, but necessary to prevent leaves from arriving as an envelope full of dried-up leaf crumbs. Waring said the process takes seven days.

“I’ll soak each leaf in a glycerin solution mixed with water and a small amount of ammonia for two-three days,” Waring explained, before air-drying and pressing between book pages for a few days.

Four Seasons of Shipping?

While the revival of ShipSnowYo depends on mother nature’s plans for the Boston area this winter, autumn tends to be reliable. Even a five-week shipping period for leaf lovers worldwide could provide Waring a considerable nest egg.

But what’s he going to do to corner the seasonal shipping market in spring and summer?

“I’m not looking to dominate all four seasons of shipping,” Waring claimed. “Shipping businesses are quite a lot of work, both for my wife and I.” He’s planning to take some time off after snow-shipping season, but is already considering options for a spring service business for the Boston market.

“I’m not entirely sure if there’s a defensible product for spring and summer that’s unique to New England,” Waring admits.  

Your Turn: What do you think of this business — ridiculous, or something you wish you’d thought of first?

Lisa Rowan is writer, editor and podcaster living in Baltimore. She has firsthand experience with crumbly leaf envelopes.

The post This Guy Just Made $5,000 Selling Something That’s Probably in Your Backyard appeared first on The Penny Hoarder.

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How to Maintain Self-Motivation After Recovering from Financial Disaster

I remember those first months of our financial turnaround so clearly.

It was honestly a pretty exciting time. We had this ongoing sense that our finances were in serious trouble – the kind of serious that would leave us without the kind of future we wanted and could even do serious damage to our present through repossession or something similar. We were on thin financial ice and we were scrambling to get to something thicker and more secure before that ice cracked.

We did many of the typical things that people do in that situation. We sold off a lot of things in our closets and on our bookshelves. We became big time sellers on eBay. We ate everything we could at home and made lots of very cheap meals.

And, eventually, things started to turn around for us. We caught up on all of our bills. We paid off one credit card, then another. Eventually, after several months, we paid off our car loans, too.

Up to that point, our motivation had been in the form of the financial hounds nipping at our heels. Gradually, though, those hounds that were chasing us disappeared. We managed to escape them.

Of course, at that point, we were left in a difficult spot. Without our very powerful motivator – the sense of immediate financial failure just around the bend – what was our motivation to keep doing these things?

We weren’t blind. We could clearly see that our day-to-day spending choices were helping our finances to get better. However, we were still in more or less the same situation we were in when we started. We were still young adults with reasonably well-paying jobs. We were still working at the same jobs and saw the same co-workers who would share the same water cooler talk with us. We still had many of the same friends.

In other words, the temptation to revert right back into our old bad financial habits was pretty strong. The call to snap right back into those old habits and routines was very strong. Those patterns were familiar and they came with a lot of day-to-day pleasures.

Honestly, those months right after our initial financial rush were the hardest months of all.

Yet, somehow, even after a few missteps, we persevered. We ended up sticking with our new path and, within a little more than a year, we had become debt free. Within two years, I was able to switch careers into a path I had always dreamed of. At around that same time, we bought a house and dropped a nice down payment on it. About three years after all of that, we paid off that house in full. Today, about four years later, we’re rocketing along a path to extremely early retirement.

There was a point where we really had a choice. We could either revert back to old patterns and keep simply struggling to keep our head above water. Or we could firm up our new patterns, stick with them, and achieve all of those things we listed over the course of a little less than a decade.

How did we choose the new patterns? What did we do that allowed us to overcome the temptations of the old routines and stick to the new ones?

I’d point to five key factors. By making sure to achieve these things in our lives, we managed to stay on a better financial path and begin to achieve our dreams, things that would have simply been out of reach without good financial choices.

Factor #1 – We Built New Friendships

Before our financial turnaround, I went out very regularly with a group of young professionals in my field. They formed a big part of my social circle. The only catch was that most of the conversation and activities of that group were expensive. We went out for drinks and meals that weren’t cheap. We bought lots of gadgets and nice clothes. We went golfing, too, which was really not cheap.

When we realized we needed to make some changes, I checked out of that group. I started spending my evenings at home and begged off of a lot of that group’s activities.

Of course, when our finances started to turn around, I was really tempted to go back to that group and I actually went out with them a time or two, but I found that I felt fairly uncomfortable with their spending habits and conversations when I did so.

Still, I could have very easily slipped right back in that group. What kept me from doing so were new friendships and relationships.

During our really lean period, I started to get more involved with community events. I joined a few groups because they seemed interesting (and, of course, they were free) and I met a bunch of interesting people because of those events. I also started to rebuild a couple of friendships with old friends who now lived in the area.

These new relationships were largely with people who made much better financial choices. Our time spent together were focused on doing things, not buying things. We went to community events. We went hiking and bike riding together. We had potluck dinners. We played board games on rainy days and winter weekends.

In the end, we chose to stick with our new friends rather than our old ones. Today, most of my social circle comes from a few old friends from college (all of which have their houses and student loans completely paid off in their mid-thirties) and people from a few free community groups.

Those people are naturally frugal. We do things together that are inherently low cost, like potluck dinners and board game days. We go to free community events and meetings. We share a ton of ideas for saving money. We often give each other good coupons or share bulk purchases. We help each other with small things, particularly when there’s travel involved.

As Jim Rohn puts it, “You are the average of the five people you spend the most time with.” It was true when my social circle consisted of a bunch of big spenders. It’s true now that my social circle is decidedly more frugal.

We put effort into building a new social network, filled with people who were smart with their money and encouraging of our good financial choices, and broke free of our old network.

Factor #2 – We Set a Strong Budget with a “Splurge” Allowance

During the early stages of our financial turnaround, we didn’t really formalize a budget. We tried to do it a few times, but it never really “clicked” for us.

Instead, we made progress against our debts by simply spending as little as possible, selling off a few possessions, and throwing every spare dollar we could against those debts.

And it worked. Many of our debts just melted away. Credit card debts. Car loans. Student loans. They went away.

Of course, that change had the great benefit of actually reducing the bills that were coming in. We didn’t have those minimum monthly payments any more. We found we had more financial breathing room than we had for a long time.

And with that breathing room came the return of temptations.

We’re people. We have things that we want. For us, it tends to be things like books, kitchen gear, games, home brewing equipment, and other such items.

Once our financial panic was contained, those temptations came back to the forefront. We hadn’t really spent much money on anything “fun” for months and so the temptations were strong.

We splurged. And then we kind of regretted it.

We didn’t really regret our purchases so much. Because we hadn’t splurged in months, the splurges were on things that we really, really wanted and enjoyed greatly.

What we didn’t like was the negative impact those splurges had on our finances. We were now much more aware of the impact of those splurges.

So, what was our solution to this conflict? The solution came from budgeting.

We essentially made our first “real” budget based on our actual spending. We used receipts and credit card statements to make a model of how we actually spent and then set targets that were based on reality for each spending area.

What we realized is that we could easily fit in a budget item for each of us for hobbies and splurges. This allowed us both to have a certain amount of money we could spend freely each month without having to worry about it having a negative impact on our overall finances.

This is something that we still use. Both Sarah and I have a certain amount we can spend each month without question from each other. We’ve both become quite good at managing our own splurge money, so when we see each other spending, we don’t really question it at all. I do a lot of trading and bargain hunting and online selling to bolster my own splurge money, while Sarah doesn’t really worry about it and sticks to her own budgetary portion. It works for both of us.

I initially just used Excel for budgeting, using my own homemade spreadsheet. Eventually, however, I moved to You Need a Budget to handle all of this, and it works great.

Factor #3 – We Tried Lots of New Hobbies

Before our financial turnaround, many of my hobbies were pretty expensive. I collected vintage baseball cards and other trading cards. I played a lot of video games, often leapfrogging to the latest releases even if I hadn’t beaten the older ones yet. I also took pride in eating at all of the restaurants, even the expensive ones. I was an avid reader, but I often bought books at a much faster rate than I could read them. I also went golfing fairly regularly. Sarah had her own hobbies as well.

All of those hobbies were a big drain on our finances. All of them required a lot of expense just to participate, and I had several hobbies like that at the same time.

Naturally, during our financial turnaround, I had to put those hobbies on hold for a while. I couldn’t justify buying vintage baseball cards or the latest video games when we were trying to turn our financial ship around.

Putting a lot of our hobbies on hold left us with a lot of free time, so we tried filling it with new activities or new angles on old ones. I spent a lot of time reading the books that I had accumulated and visiting the library for a few more, reorienting that hobby from accumulating books to actual reading. We started going to state parks a lot, hiking the trails and exploring. We started getting into preparing meals at home and learning the art of cooking, starting with simple stuff like scrambled eggs and gradually moving on to more complex things.

We tried lots of things, with the only common thread being that they didn’t cost much money. That was really our only criteria, as we were making an effort to try lots of new things.

Some of those new hobbies really clicked with us and stuck around. Others? Well, they didn’t click with us at all, but at the very least they were learning experiences.

What we found is that as our financial situation grew stronger, we didn’t actually have that much motivation to return to our old hobbies. I still played video games occasionally, but I found I enjoyed things like exploring the trails at state parks, reading books (instead of collecting them), and having potluck dinner parties was far more enjoyable for me than many of the expensive hobbies I had before.

I wouldn’t have discovered these things without forcing myself to try new things. A simple willingness to try activities, with the only constraint being a low cost, introduced me to the activities that now fill much of my free time.

Factor #4 – We Talked About Big Goals Constantly

We had a lot of dreams – and we still do. We wanted to own our own home. We wanted to eventually live in the country. We wanted to have at least three children and provide great childhoods for them. We wanted to travel with our children during their older years.

It was pretty clear to us that our old financial path would not allow these things to happen. We also knew that we would be able to pull off those things if we stuck to our new financial directions.

The problem was that these goals were big ones. They weren’t things we would achieve in the next week or two. On the other hand, the tempting things to spend our money on were constantly present.

Our solution, then, was to talk about our dreams and goals quite often. Those goals became a very regular topic of conversation between the two of us, as we considered the big goals that we shared, how long it would take to get there, and perhaps most of all, what we could do now to make those goals actually happen.

Sure, we didn’t agree on every goal, but we did agree on a lot of them. We talked through each of the goals we individually had and figured out the big ones that we shared, because knowing that we shared them made those particular goals much more powerful.

With that constant reminding through regular conversation, it became easier for us to make choices in our day to day lives that would lead to those big goals. Those goals weren’t daydreams any more – they were real things that we both were deeply in touch with.

When you have big goals for yourself, do everything you can to integrate them into your daily life. Talk about them. Plan around them. Make the choices that you need to make to bring those goals to fruition a normal part of your life.

Factor #5 – We Automated Our Finances as Much as Possible

In the end, though, having a hefty bank account balance was still a temptation. We could have inexpensive hobbies. We could see our long term goals. We could have spending allowances. We could have positive friendships.

But, still, that money would be sitting there, making it so easy to splurge and still feel like we were in good shape. The truth, of course, was that those splurges were real setbacks on our future goals. Not only did the splurges themselves serve as minor setbacks, they opened the floodgates to more and more and more splurges. Once it became acceptable to splurge once outside of our budget, it became okay to do it again… and again… and again.

Our best solution to all of that was to just make sure that there was never much cash in our checking account to begin with, and our most powerful tool to make that happen was to simply automate as much as possible.

So that’s what we did.

We put as many bills as possible on auto-pay. We set up several automatic savings and investment programs, from something as simple as an automatic weekly amount going into savings for an emergency fund to automated contributions to Roth IRAs.

We put most of those things in line with our regular pay periods, meaning that most of those things would occur automatically a day or two after a paycheck would arrive in our accounts. We never had periods where a lot of money just sat in our checking account.

The best part about this plan is that it created a sense that, even if there was money in that account, it would probably be automatically withdrawn in the very near future, so you didn’t want to touch it out of fear of overdrafts.

Of course, there’s also credit cards, right? Our solution here was to simply peer review each credit card statement for a while. If a credit card statement came to the house, we would both look at it and look for expenditures that looked fishy. That kept us from “hiding” expenses on credit cards.

An automated system like this not only kept us from spending money unnecessarily, it also ensured that we started taking real steps toward our savings goals. We began to fund our savings for retirement, for our next house, and for college education for our children. It was all automated. We didn’t even have to think about it, and we still don’t!

Final Thoughts

Together, these five factors kept us on track. Even when the financial pressure on us abated and it became easier and easier for us to splurge, these factors provided a framework for our lives that made it possible for us to keep going in a positive financial direction even without the motivation of the wolves nipping at our heels.

Today, because of that framework, early retirement looks like a real thing to us. We own our home. We have zero debt. We’re saving money like mad for that goal of early retirement. We have three children, just like we wanted, and they’re well cared for.

We’ve either achieved our goals already or we’re directly on pace to achieve them, and I attribute that to having a great framework to keep us on the right path.

If you’ve managed to make it through your financial turnaround and have put some distance between yourself and the financial hounds at your heels, consider adopting some of these factors in your own life. Try to put them to work for yourself.

It’s not easy. Financial success simply isn’t easy. If it were, everyone would be financially successful.

However, it is absolutely possible, and it’s not even that hard to stay on track provided you set up your life in a way that makes it easy to keep taking steps toward your goals.

Good luck!

The post How to Maintain Self-Motivation After Recovering from Financial Disaster appeared first on The Simple Dollar.

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Businesses warned of new spoof email scam

email scam illustration.jpg

Scammers are posing as senior personnel to convince employees to transfer money from businesses, according to a new report from Financial Fraud Action UK (FFA UK).

Scammers are posing as senior personnel to convince employees to transfer money from businesses, according to a new report from Financial Fraud Action UK (FFA UK).

The scam involves criminals emailing members of staff in companies’ finance departments, posing as finance directors, chief executives, or other senior colleagues.

Businesses warned of new spoof email scam

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Scammers are posing as senior personnel to convince employees to transfer money from businesses, according to a new report from Financial Fraud Action UK (FFA UK). The scam involves criminals emailing members of staff in companies’ finance departments, posing as finance directors, chief executives, or other senior colleagues. Fraudsters use software to make the emails convincing, including mimicking the sender’s address. The spoof emails can look identical to genuine ones within the recipient’s mailbox. In some cases, fraudsters have also hacked the genuine email accounts of senior staff to send requests for money. The emails request urgent payments that don’t follow standard procedures, attempting to trick workers into making payments to the scammers. FFA UK is warning employees to exercise caution, and check unusual payment requests directly, either in person or by phone. Emailing to confirm payments is not reliable as the account may have been compromised. Companies should also establish procedures for requesting and making payments, and ensure passwords are robust. Katy Worobec, director of Financial Fraud Action UK, said: “Fraudsters will do all they can to make these scam emails look genuine, so it’s important for businesses to be alert. “While an urgent request from the boss might naturally prompt a swift response, it should in fact be a warning sign of a potential scam. That’s why it’s vital that finance teams carefully check any unusual demands for payment through an alternative method, such as over the phone or face to face, before making the payment.”

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Halifax tempts new current account and mortgage customers

Tom Wilson

Halifax prize draw winnings.jpg

Halifax is offering extra perks to new mortgage and current account customers, in an attempt to attract new business.

Halifax is offering extra perks to new mortgage and current account customers, in an attempt to attract new business.

First-time-buyers and home movers who successfully apply for a mortgage before 6 December with Halifax will receive a £500 gift card that can be used in PC World, Currys or Knowhow.

Halifax tempts new current account and mortgage customers

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Halifax is offering extra perks to new mortgage and current account customers, in an attempt to attract new business. First-time-buyers and home movers who successfully apply for a mortgage before 6 December with Halifax will receive a £500 gift card that can be used in PC World, Currys or Knowhow. The offer excludes shared equity loans, shared ownership applications and applications through intermediaries, such as mortgage brokers. Successful applicants will receive their vouchers within 30 days of completion. People opening a Halifax current account via the current account switching service before 16 January will be entered into a prize draw to win up to £50,000. There are more than 200 prizes up for grabs, starting at £100. This prize draw is on top of Halifax’s £100 sign-up offer and reward scheme, that’s worth £5 a month. To receive the monthly reward, customers must stay in credit, pay in £750 a month, and make two monthly direct debit payments. Moneyfacts Verdict: Halifax’s current account has one of the more generous sign up packages, and if you’re looking to sign up anyway this is a nice extra. It’s not a good idea to open an account just to enter the prize draw though. If you’re looking to open an account for the sign-up offer, also consider first direct as it pays £150 to anyone joining via moneysupermarket.com. They’ll also give you another £100 if you’re not happy with the service after six months. The gift voucher offer is less compelling. Halifax’s mortgages aren’t close to the top of the best buy tables, and they’ll only lend up to 85% loan-to-value, so they’re not ideal for first-time buyers. You’d probably save more overall by ignoring this and going with a broker’s recommendation.

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