Archive for the ‘Business’ Category
Apr
24
Posted in Business, Real World
Cash money is good. Why? Because it’s tangible. You know exactly how much you’ve got to spend, and you know exactly how much money you don’t have to spend (the latter being much more salient). Cash lets you better appreciate and, likewise, better appropriate your money: when your money consists of a bunch of numbers and dollar signs printed on a small 8″x3″ piece of paper (ala bank statement), you don’t really appreciate what you’ve got.
$50,000 on paper doesn’t look like much. But a stack of $100 bills adding up to $50,000 looks like a hell of a lot. A stack of $1 bills adding up to $50,000 looks like even more. The more your money is divided up in cash, the better you will budget your money. Which is precisely the reason why I keep a fat stack of $1 bills in my wallet at all times. People think I’m cheap, but heck, saving money makes money!
This is not to say that you should always pay in cash. You should try to establish your credit as soon as possible, especially if you’re still a young adult. There are a lot of times in life when you’re going to need some money fronted in order to buy something big (unless, of course, you’ve won the lotto). Buying a house is one such example. You’re going to need good credit to get a good loan. Buying a house is the number one easiest way to make cash, especially right now, at a time when the US housing market is at a low point. As the value of your property increases, you make money. Easy money. I don’t know many people who go around and buy houses (at least in this northern VA, where home prices are at least $1 million) with cash (in the form of a personal check). Establishing good credit will aid you in any situation where you need to take out a loan of any sort.
I do, however, suggest against excessive use of the credit card. The credit card is a weapon of mass fiscal destruction, especially for young adults. When I first got my credit card, I was extremely excited that I could finally go around spending money without having to run to mom/dad for a few more bills. I eventually got slapped in the face with credit card statements in the thousands per month, and have never spent a dime more than necessary since. I only use the AMEX for two main things now: gas and any large expense (needs, not wants). You’d be surprised how much money you’ll end up spending at 7-11 buying misc. things if you pay by credit card, just take a written log for one week (I’m sure this is cliche and has been suggested by hundreds of other people before me, but it really works).
My point is, avoid over-indulgence. Unfortunately, I hang out with friends who lack any sense of reality, fiscally speaking, due to the nature of the area I currently live in. Even over the age of 18, their parents continue to supply them with an unlimited supply of money to be spent however they wish. This is wrong. I am still a few months away from 18, yet I manage every dime I spend. Of course, that’s because I’ve worked hard enough to own and manage my own company, and have my own money to spend, but still, I have self-control and I rarely spend waste my money. I have friends driving around town with 2008 Audi RS4s, MB C63 AMGs, and even a few with Ferraris and various Lamborghinis. But I refuse to evaporate my hard-earned money in such a manner. And that is why I am successful. Not because I make a lot of money, no, I really don’t make that much compared to most entrepreneurs. But I save every penny. I refuse to live like a celebrity, for now. Remember, it’s better to make $100K a year and save $90K of it than make $200K a year and waste $190K of it.
Which is why my wad of fifty $1 bills comes in handy. I still reap the benefits of having a fat wallet, but I don’t suffer the consequences of reckless spending.
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Feb
18
Posted in Business, Internet
Though I focus the majority of my efforts online in the intangible realm of advertising, there’s a huge market for online product sales, known as e-commerce industry, which exists. Companies that develop products or services and sell them/charge for them through the Internet. Rather than relying off advertisers to create revenue, their websites serve as portals for users to buy stuff: whether it’s a new computer or subscription to advanced feature’s that a website has to offer, the visitors pay the owner in order to make use of the site (or portion thereof).
Woot.com is one such example of an extremely successful e-commerce venture. The unique online store and community combination serves as a place where tech savvy bargain shoppers can browse for various goods. Each day, Woot.com offers one product for sale at a hugely discounted price (Woot.com negotiates with manufacturers for bulk pricing on overstocked goods in order to be able to offer the discounts) until the product sells out, or until the next day’s product becomes available, whichever comes first.
The structure of the website company entices users to visit daily (thus constantly pumping a continuous flow of traffic) to catch the latest deals. The message boards consist of thousands of bargain shoppers who love to interact, and various inside-jokes (or specials), such as the prized “Bandolier of Carrots” and the infamous “Bag o’ Crap” (a $1 “surprise” product that thousands of Woot! users order simply for the fun of it), make the community an incredibly lively, upbeat place to talk, even if the company’s only goal is to increase sales. How many times do you have users willing to give you money for random junk? Woot.com hit the jackpot.
Woot.com is only one example of e-commerce. There are many other ways to make money online without utilizing advertising. Some individuals specialize in selling their products on eBay to make money. Others resort to the shady gray-market of dealing legal drugs (think online pharmacies) to make their ends meet. And then others offer syndicated adult content for a monthly fee, which, not surprisingly, a handful of people on the Internet are willing to pay for. There are many other ways to make money online without relying on advertising; I may not be able to sum it all up in one post, but take some time to think if you can find a way to sell a product/service online. Maybe you, too, will be thinking “Woot!” when your e-commerce venture hits the limelight.
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Feb
5
Posted in Business, Real World
Utilizing tax write-offs is a great way to essentially make ’something out of nothing’. For business owners and self-employed individuals, which includes owners of Internet-based companies/websites, tax write-offs are the bread and butter of making the most of your hard-earned money. With the US tax season right around the corner, it’s about time you start compiling a list of things to write-off . Whether you use TurboTax software or consult with an H&R Block representative in order to get your taxes done, there are many legitamite ways of pushing your tax dollars to their limits. Though write-off eligibility could vary from person to person, and sometimes depends on which tax bracket you’re a part of, there’s always a way to get some reduction on your taxes. After all, Uncle Sam doesn’t need all your money.
1. Write off a room in your house/apartment - if your place of residence has multiple rooms, dedicate one of the rooms to solely business activities. Doesn’t have to be the master bedroom, even something a little bigger than a walk-in closet will do. You can write off the value of the room (which, when appraised, may be much higher than you might think) as a business expense, and save a few hundred (or maybe even thousand) dollars.
2. Write off all electronic devices that you need - heck, buy yourself a new top-of-the-line computer every year. Want that new 22″ LCD monitor? Buy it! How about a new PDA or iPhone? Buy it! As long as you can prove to the IRS that at least a portion of it is used for business work, you can write off a respective portion of your taxes (although you may need to capitalize it and depreciate it over time, but essentially, it’s a write-off).
3. Write off a new car - depending on where you live, you could buy or lease a new car and save a chunk of money. Though this mainly applies to people who have more than $30K a year in taxes, you could, using a tax loophole, buy a new luxury SUV that weighs over 6,000 pounds and write-off $30K of its value in the first year (might want to check with your H&R Block adviser on this one). Thinking about leasing? Well you could lease a new 2008 Mercedes C-Class and write-off a major portion of the lease if the car is ‘mainly used as a business car’. Might want to keep the mileage low though, for auditing reasons (wink).
4. Write off gas - use your car to goto Kinkos and make copies of advertising contracts? How about driving to BestBuy to buy that new computer you’re planning on writing off? Well yes, you can write off all the gas that it takes you to get from your home to your destination and back, as long as the destination has something to do with your company’s interest.
5. Write off the food you eat - taking a trip to StarBucks to talk to a prospective client or business partner? Write-off the Grande White Chocolate Mocha as a business expense. Taking fellow staff to dinner at a up-scale restaurant? Write it off (all though you can only write off 50% max of business food expenses)!
6. Write off your server(s) - obviously if you are running an Internet-based company, you’re going to need to have some sort of hosting/servers. Make sure to mention that as a business expense, I mean, what else could you be using a dedicated server for?
7. Write off your donations - care about a particular cause? Want to look philanthropic without losing your shirt? When donating to various causes, whether it be the Ronald McDonald House foundation or the Salvation Army, feel free to write-off all the donation amount from your taxes. Kill two birds with one stone (or save two birds by donating to the PETA)!
And finally, a word for the wise: save ALL receipts and keep detailed logs of all purchases you made that relate to your business. IRS will screw you if you don’t have proof of purchase/usage. And this list is by no means complete; there are many, many more ways of making use of your tax dollars more efficiently if you own a company, just do some more research (or hire the tax guy, and make sure he knows you want to get the write-offs you deserve)!
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Feb
2
Posted in Business, Stocks
With Yahoo!’s market shares losing nearly 40% of their value just in the past three months, and no immediate recovery plan in sight (at least anything announced publicly to analysts and investors), there doesn’t seem to be much light at the end of the tunnel. The 50% increase in stock value on 2/01/2008, upon news of Microsoft’s offer, only goes to show how bad Yahoo!’s situation is: the buyout is the only way they can potentially recover, unless they take some drastic measures to curb their losses. And by drastic, I mean revolutionary. Something that can best Google’s offerings. Something that will change the face of the Internet as we know it. Otherwise, at this rate, Google will continue to absorb users, advertisers, and effectively, potential cash from Yahoo!.
On a personal note, I have recently stopped using Yahoo!’s publisher advertising program, as their RPC (rate per click) has plunged since the program’s onset. Their lack of support for the big publishers, and extremely limited advertiser pool has sent that program down the tubes. I know many fellow webmasters who have also flocked back to Google’s Adsense for their contextual ad serving needs; Yahoo!’s just not cutting the check anymore.
There are a few precedents of technology corporations taking over competitors. The Sprint acquisition of Nextel was one such monumental failure of a purchase. Sprint, with a mindset to use Nextel’s failing network (famous for the push-to-talk walkie-talkie fad) to expand their own network, and hopefully boost their customer reach and better overall service, literally dropped like a rock after reeling Nextel in. After reaching a 52-week high of ~$24 a share in stock value just after the purchase (which falsely boosted investor confidence), Sprint Nextel has plummeted to the point where, just the other day, Sprint announced they are writing off most of Nextel’s purchase value (near 30 billion dollars). Check out their one year stock performance:
This doesn’t necessarily mean that Microsoft will tank if they buy Yahoo!. If they manage to work on Yahoo!’s search algorithms and promotion, and refine advertising stances as well as vastly improve Yahoo!’s publisher advertising network (which is still in BETA even after years of development), they might have something which could potentially take a chunk out of Google’s market (which creates most of its respective revenue from the Adwords/Adsense program as well as sponsored search results).
Lets not forget, however, the main difference between Microsoft and Yahoo! structure: they operate and create their main revenue from two totally different markets. Microsoft has been for years developing and producing a tangible retail product (Windows, of course), and successfully selling it to billions of consumers all around the world. Microsoft has a solid growth plan with multiple layers of fiscal protection, not to mention it’s backed by the richest man in the world, Bill Gates. Sure, Microsoft has been also spending R&D money on improving their presence on the Internet, but so far, all progress has proved lackluster. Heck, the only reason “Live Search” gets any traffic is because IE’s homepage is MSN.com. When a monopoly still fails to compete against Google, you know you’ve got some issues.
Microsoft’s budget appropriation over the past few years has been extremely poor, and their innovation in the world of technology has been near nil. The Zune was poorly accepted by public as it featured no major incentives for iPod users to switch over (not to mention the branding factor that Apple’s marketing dept. did a hell of a job on, which Microsoft utterly failed to reproduce), Vista was void of any real-world improvement to give corporations a reason to re-train staff and spend thousands on new licenses for PCs, and various web ventures like Live.com failed to even barely entice Internet browsers to change their homepage from Google. IE 7? A joke compared to FireFox, king of the browsers in this day.
If I were Bill, I’d be wary of this deal. $44.6 billion dollars is a lot of money, especially for a web-based company. The web bubble continues to grow with each and every over-priced dot com sale. The poor spending habits as of late will surely come back to haunt them in the distant future. Microsoft surely won’t go out of business, but they may be in for some hard times ahead if they go through with this deal. Don’t say I didn’t warn ya.
Digg: http://digg.com/business_finance/Yahoo_Is_Microsoft_Trying_To_Catch_A_Falling_Knife
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