Free PDF of Unveiling the Retirement Myth by Jim Otar

I’m still recovering from holidays, but I did see today that retirement specialist Jim Otar has made his book Unveiling The Retirement Myth available in PDF format for free until January 9, 2011. Here is the direct download link (expired).

I haven’t read it, but from I can gather it seems targeted at those DIY investors who are carefully planning the withdrawal phase of retirement, and not for beginners. For example, the summary teaser talks about “non-Gaussian optimum asset allocations”. 🙂 Hey, sounds like great weekend reading to me. Learn more about the material at his site RetirementOptimizer.com. In any case, it’s free and the book retails for $50, so why not download it. I’m now wanting an iPad to read all these free eBooks out there…

Thanks to TheFinanceBuff for the tip.

American Express Cards: 5% Back On Gas From Exxon, Mobil, Phillips 66, Conoco, 76

If you have an American Express card, here are a couple more quick promos that takes only a minute and can save you some bucks. The 5% back is on top of your regular card rewards.

Earn 5% back on every dollar you spend when you use your registered American Express Card to fill up at any Exxon or Mobil station between December 20, 2010 and January 20, 2011. You must register here first.

Earn 5% back on every dollar you spend when you use your registered American Express Card to fill up at any Phillips 66, Conoco, or 76 station until March 6, 2011. You must register here first.

Chase Slate Card: 0% APR Balance Transfers and Purchases for 15 months

The Slate from Chase has improved from just being a credit card with a not-really-clever “vertical” design to one that is now offering a competitive 0% introductory APR for both balance transfers and purchases for 15 months to those with good to excellent credit. $0 annual fee.

The fine print does show a balance transfer fee of 3% with a $5 minimum, which is I’m afraid the norm these days, but you should also consider one of the cards below first to see if they fit better.

Finally, the longest 0% balance transfer offer out there is the Citi Platinum Select MasterCard with 0% APR interest for 18 months on balance transfers. There is no annual fee and the balance transfer fee is 3% ($5 minimum). The card also includes 0% APR for 18 months on purchases.

Don’t use this as an excuse to fund any crazy holiday shopping sprees, but instead as an accelerant to pay down any balances or carefully-planned large purchases at a lower overall net interest rate. It’s really hard to find any offers with no transfer fees now, but a loan at 0% interest + a fixed fee spread out over 1.5-2 years can be much better than the current average credit card APR of 14.39%. Unfortunately, there are no longer any no fee 0% APR balance transfer offers to arbitrage easy money with.

Free $2 in Amazon MP3 Downloads

Amazon.com is offering $2 in free MP3 downloads with the code GIVEMP3S. No purchase required. See details at this link. It should increase your gift card balance by $2 for music purchases only. You must redeem the code soon – by December 26, 2010 11:59 PM PST. Limit one Amazon MP3 promotional credit per customer.

It may ask you to install the AmazonMP3 Downloader software, but you should be able to skip it for individual songs. Entire album purchases may require installation. I gave in and just installed it, it seems to work fine with iTunes.

Update: Bing is offering up another $1.29 in MP3 credit. Just enter your e-mail and enter the code you get in the same place as above.

eBay, Half.com, PayPal, Amazon.com Sellers: 2011 IRS 1099-K Regulations

I just received the following e-mail from Half.com, where I occasionally sell used books:

We’re writing to let you know that starting with transactions occurring on or after January 1, 2011, new Internal Revenue Service (IRS) regulations require Half.com (and other businesses that process payments) to file a Form 1099-K for all sellers with more than 200 transactions and $20,000 USD in sales per year.

If you’re a high-volume seller who has met or is close to meeting the IRS thresholds, we may need to generate a Form 1099-K for you. If you have multiple accounts, we’ll take all of them into consideration when calculating your volume status. If you exceed the IRS thresholds, we’ll send your first Form 1099-K to you in early 2012. Your Form 1099-K will give you a consolidated report of all payments received through Half.com for 2011. This information will also be reported to the IRS.

Apparently, as part of new legislation designed to help track down (and tax) unreported income, starting in 2011 any credit or debit card payment processor with clients that have more than 200 transactions and $20,000 in sales per year must file a 1099-K with the IRS.

In addition to Half.com, this also includes individual sellers using services like PayPal and Amazon.com. Perhaps also sites like Etsy and Zazzle? This won’t affect me, but I think it’s a pretty good idea. I do feel that lots of eBay income goes unreported, and the limits are reasonable. If you’re clearing 200 transactions and $20k in payments, you should be tracking your income and expenses like a business. This 1099-K won’t really matter as it just reports gross amounts.

I’m more scared about the upcoming changes in 2012 that says that a business has to file a 1099-MISC for any person or business it pays more than $600 in a calendar year. Corporations are no longer exempt. That’s a ton of 1099 forms swirling around. I’m going to have to send W-9 forms to everyone from Staples to my web hosting company. I still hope they’ll change this rule before it goes into effect and swamps tons of small businesses.

More info: CNN Money, Journal of Accountancy, Stop1099.org

Two Completely Different Ways to Boost Productivity

While procrastinating today, I of course ran across a couple of tips on productivity and success that both powerful and very different.

First is an essay called Good and Bad Procrastination by Paul Graham. It includes a lot of insights into procrastination, and my favorite was the idea that it was okay to put off less important, scheduled, to-do list-type things whenever you get a chance to focus and do some really great things:

The reason it pays to put off even those errands is that real work needs two things errands don’t: big chunks of time, and the right mood. If you get inspired by some project, it can be a net win to blow off everything you were supposed to do for the next few days to work on it. Yes, those errands may cost you more time when you finally get around to them. But if you get a lot done during those few days, you will be net more productive.

In fact, it may not be a difference in degree, but a difference in kind. There may be types of work that can only be done in long, uninterrupted stretches, when inspiration hits, rather than dutifully in scheduled little slices. Empirically it seems to be so. When I think of the people I know who’ve done great things, I don’t imagine them dutifully crossing items off to-do lists. I imagine them sneaking off to work on some new idea.

The second is the Jerry Seinfeld Productivity Secret by Brad Isaac:

He told me to get a big wall calendar that has a whole year on one page and hang it on a prominent wall. The next step was to get a big red magic marker.

He said for each day that I do my task of writing, I get to put a big red X over that day. “After a few days you’ll have a chain. Just keep at it and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt. Your only job next is to not break the chain.”

“Don’t break the chain,” he said again for emphasis.

This idea of incremental change is not new – see this post on Kaizen for example.

Some things are best achieved when you attack it a little every day – things like debt reduction, learning a language, or weight loss. Other things you may have to wait for the inspiration, but when it comes, it pays to put it above all else. Perhaps a great business idea or investment opportunity.

Free PDF of The 4-Hour Workweek by Tim Ferriss

First published in 2008, The 4-Hour Workweek by Tim Ferriss is a book about “lifestyle design” and included many uncommon ideas about working and retirement. He describes how you can build a business and delegate/outsource nearly everything about it. He’s ruthless (in a good way), from hiring virtual assistants from India to teaching you to avoid answering 99% of your incoming e-mails. Once you do that, then ideally you’ll find yourself working mere hours a week. Who doesn’t like the sound of that? 😉

Although not exactly a how-to manual if you’re currently in a 9-5 job, it was definitely one of those inspiring reads that made you think. That was based on my reading of the original, but the 2009 “expanded and updated” edition supposedly has over 100 pages of new content. Perhaps time for another go.

If this interests you, you can currently download a digital PDF version for free. Supposedly to promote his new book The 4-Hour-Body (of which I know nothing about), he’s now offering free digital versions of The 4-Hour Workweek and The Slow-Carb Cookbook, a companion book to the 4-Hour Body. I’m still not sure if this is fully intentional, but Ferriss is both tech-savvy and a crafty marketer so I can only assume it is. Instructions via SD:

Click here: http://short.e-junkie.com/4hourworkweek
Hit the ‘Checkout’ button.
Fill out the form with your name and email address, then hit the ‘Complete Free Checkout’ button.
On the final page, you’ll have access to The 4HWW and Slow-Carb Cookbook.

Expires December 26, 2010. The e-mail doesn’t to have to be “real”, as the download links appear immediately on the next page. However, I did enter mine and received an alternative download link.

Peer-to-Peer Renting: Lease Your Stuff to Strangers, Hopefully Buy Less Stuff

Recent articles in the New York Times and BusinessWeek magazine talked about the growing emergence of websites where individuals can rent out their belonging to other strangers, coining the new term “collaborative consumption”. I like the idea. Not only can you make some extra money renting out your stuff when you aren’t using it, but as a borrower that means you need to buy less stuff as well. In addition, people can use it as a “test-drive” to try out things like a certain model car or an iPad. Here’s a list of websites in this area, please let me know any that I’ve missed.

RelayRides
Peer-to-peer car rentals! Rent your car to strangers by the hour. Started in Boston and now available in San Francisco Bay Area as well. Free to join, and renters start with $25 free driving credit. Prices are cheaper than competitors like ZipCar, which owns their own private fleet. Claims that owners can make $250 a month on average renting out their vehicles. Rates include gas and insurance.

Similar: Spride Share (currently in SF Bay Area), WhipCar (UK),

Airbnb
Rent out extra rooms in your house (or the entire house, a castle, or private island…). Free to sign up. Set your own prices and availability. Airbnb facilitates all bookings and financial transactions. They already have over 50,000 properties in 10,000 cities.

Similar: ParkatmyHouse (rent out driveway or garage space in crowded areas)

Zilok
Technically you can rent out anything on this site, but it has specific categories for cars, vacation sites, power tools, and event rentals. You can rent from businesses or individuals. Looks like a PS3 is going for $20-$25 a day.

Similar: SnapGoods (newer, but more polished website), Rentalic

Share Some Sugar
Can I borrow a cup of sugar? You can also rent out anything on this site, but SSS seems to promote borrowing between people in the same neighborhood for free (with a refundable security deposit). After browsing a bit, I realize that I could use a lawn aerator, if only there was someone nearby with one available.

Similar: ShareZen (more for collaborative ownership of a plane, home, or boat), Skyara (a marketplace for “experiences”)

I suppose the main concern would be either theft or breakage of your property. Most sites have a user rating and feedback system similar to that of eBay, as well as security deposits. The car rental agencies do provide insurance, but I don’t believe the other sites do. In many cases, you can restrict your lending to members of your social network of friends via sites like Facebook.

Of course, the hardest thing about these sites is often getting the critical mass of adequate inventory to rent out to interested customers. Let’s hope one of these gains some traction. The one I want to use right now would be ParkatmyHouse. Combine their inventory with a real-time iPhone/Android app, and you could search for cheap parking almost anywhere. If you live where parking is scarce, you could profit from what is usually just a headache.

New 2011 Tax Plan Highlights: 2% Payroll Tax Reduction, Extension of Current Tax Rates

Our tax rates for the next two years have been decided, a two whole weeks before January 1st! Just in time for their winter break, what a coincidence. 😉 The “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” was signed into law last Friday. There’s a lot of stuff in it, as with any tax-related it seems, but here are the two big highlights for individuals:

Payroll Tax Cut

The employee portion of the Social Security tax is reduced to 4.2% in 2011, down from 6.2%. This lasts only for one year. The employer portion remains unchanged at 6.2%. The limits on wages subject to Social Security tax remains at at $106,800 for 2011. Medicare taxes remain unchanged at 1.45% each for employers and employees.

For example, someone earning $50,000 will pay 2% less towards Social Security, for a tax savings of $1,000 spread out over a year of paychecks. The maximum savings per person is then $2,136. Your future Social Security benefit is not directly affected by this change.

However, what has been expired is the “Making Work Pay Tax Credit” of 2009 and 2010, which was a refundable tax credit 6.2 percent of earned income, up to $400 (single) or $800 (married filing jointly). This meant that if you were single with earned income of at least $6,452 in 2010, you got a $400 tax credit. Married couples filing joint returns earning over $12,903 got $800. Note that this tax credit was phased out for taxpayers with modified adjusted gross income in excess of $75,000 (single) or $150,000 (married couples filing jointly).

Net Benefit
Here’s a chart from the Tax Policy Center showing the net difference in tax savings from two as a function of earnings.

As you can see, our example of a single person earning $50,000 would be paying approximately $600 less in taxes in 2011. (Gain of $1,000 payroll tax cut, loss of $400 MWP tax credit.)

Current Individual Income Tax Rates Extended

The current income tax rates, sometimes referred to as the “Bush Tax Cuts”, are extended for everyone for two years. Although the exact income ranges are not set, here are projections from the tax software provider CCH Group. They are slightly higher than the 2010 Federal tax brackets, due to inflation.

For the curious, it is estimated that an individual earning $50,000 in 2011 will paying $890 less in federal income taxes as compared to what would happen if no action was taken (even though that was highly unlikely).

Also…

  • The top rate of 15% for qualified capital gains and dividends is extended for another two years, along with the 0% rate for taxpayers in the 10 and 15 percent income tax brackets.
  • Another last-minute patch was made for those subject to the Alternative Minimum Tax because the brackets were not mandated to be adjusted with inflation. The 2010 exemption amount will be $47,450 (single) and $72,450 (married filing jointly).
  • Extended unemployment benefits are to be continued at their current level for 13 months.

Since we know that the income and capital gains tax rates will stay the same for the next two years, the standard end-of-year tax actions should apply. The general idea being to take any deductions you can right now, and defer as much income as possible until next year.

MIT’s Real-time Inflation Calculator

A lot of people are worrying about inflation or deflation in the future. The most widely used definition of inflation is the Consumer Price Index, which is published monthly by the Bureau of Labor Statistics and is based on a basket of consumer goods using price surveys from cities around the country. This takes a while, so the CPI for December would be published in mid-January.

Professors Roberto Rigobon and Alberto Cavallo at the MIT Sloan School of Management started the Billion Prices Project which, directly pulls data from online retailers from around the world. In the US, the software is tracking 550,000 items from 53 retailers. The best part – since it’s all automated, the numbers are updated daily! The goal is to predict the CPI before they even announce it. You can see from the charts below that the two track reasonably well together.

Daily BPP Index vs. CPI

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Annual Inflation (over last 365 days)

If they start to vary widely, which one should be considered inaccurate? Via the NY Times.

The E-Myth Revisited: Small Business Book Review

I bought The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber at a outdoor market because it was a finance “bestseller” and I’d seen it on a few reading lists. It’s been sitting on my bookshelf since (along with many others…), but once I picked it up and read a chapter, I went ahead and finished over the next two days.

Why Businesses Fail

The “E-Myth” stands for the Entrepreneurial Myth, which I’ll paraphrase as the belief that all a successful business needs is a hardworking, skilled, fearless entrepreneur. When we think successful small business, we think of Bill Gates or Richard Branson of Virgin. Is it really that simple? 40% of small business fail within one year. 80% of them fail within 5 years.

This book states that, in reality, a successful business needs three roles to be fulfilled:

  • a technician which understands the technical aspects of the business,
  • a manager which plans and organizes, and
  • a entrepreneur who provides the vision and energy.

You might think you have all of these characteristics already, but these roles are often in conflict with each other. Most businesses start out with only one role really filled – that of the technician. A plumber starts a plumbing company. A baker starts a bakery. A graphic designer starts a design shop. Usually, the motivation is that they don’t want a boss. The end up have a poorly trained boss – themselves.

When things get hard, usually the technician wins out. The perceived solution is to work harder, do everything by yourself, so that you can “do it right”. This is where many businesses start to fail. Now, if you’re really stubborn and hardworking, you can make this stretch out for a long time. You’ll also be really tired and unhappy.

I actually see this first part of the book as separate from the next part. It teaches you to look at how you are running your businesses. Are some of the roles being too strong, or being neglected? The manager tends to micromanage, and the entrepreneur tends to be the frustrated dreamer.

The Solution

Okay, so now what? How do you take your business to the next level?

Gerber says to look at the franchise model, and uses McDonald’s as an example. Don’t focus on the fact that you may hate the food there. The true power of McDonald’s is that every single aspect of the business was broken down step-by-step and laid out that a random person off the street could “read the manual” and open up their own McDonald’s restaurant. Where to locate the restaurant. The layout of the kitchen. The menu. How each hamburger is ordered, stored, cooked, assembled, and finally delivered to the customer.

What’s your system? If you were to train a reasonably smart person without any knowledge in your field, how would you break down your business to them? What is the unique value proposition that you offer, and how do you achieve it? What does each roleplayer do? As the saying goes, “Explain it to me like I’m a 10-year old.”

Recap

I view this book as “big picture” type of book that will definitely get you thinking differently about your business and business goals. Since it is also relatively short and easy to read, I would recommend it to anyone who wants to work in a small business, or is already working in one. (It’s also really easy to find at the library or used for cheap – try Amazon or Half.com.)

The book is definitely more applicable to a small business where you plan on one day being more “hands off”, like a restaurant, a store selling widgets, or a big design agency. But even for the many people out there who are perfectly happy being a one-person show, you can still apply the concepts of this book. You can break yourself down into what your special roles or tasks are. Write it down. You may not have ever thought of yourself in this way. Then you can focus on those areas, and either get rid of or outsource the tasks that you don’t need.

Now, some critics will call this book common sense from a self-appointed guru. In this way, I feel this book is a bit similar to Rich Dad, Poor Dad by Robert Kiyosaki. I didn’t really like the rest of his books, but the idea that you should buy assets that grow instead of liabilities like cars or gadgets can be helpful. But reading it was definitely a net positive for me, as was reading The E-Myth Revisited. Both are not the best writers out there, but still manage to convey their message.

Borders & Waldenbooks 50% Off Coupon

Borders has a printable coupon good for 50% off any one single item. Valid 12/14-12/16. The coupon says you need a Borders Rewards number, but it’s free to join. Maybe I’ll actually buy a book not from Amazon!