• 70% of customers in the United States will NOT order from a web site if the shipping cost is more than $4.99
• In 2009, 60% of customers bought an online gift card
• 2010: U.S. Online Holiday Spending Approaches $22 Billion for the Season, Up 12 Percent vs. Year Ago (source)
• 59% say they will buy mainly on the web (source)

Build Residual Income: Is it your dream?

Residual income is my dream. But it’s difficult to achieve. Do you know what is residual income? Residual income is a kind of income that is sustainable. What does this mean not have to work all their lives to make money with little effort, you can sit in comfort of your own home and earn money.

The Internet is one of the most dynamic markets for different types of businesses. Imagine you can target customers from virtually anywhere in the world. There are also plenty of payment line options. No matter what country you are, there is always a chance for you. Here are some ideas you can do to create a site that pays well.

1. Create e-books. You can get more benefits if you publish yourself. However, it some advantages if you let publishers market your book. Publishers know a lot of sites where you can place because they have more experience. Ebooks are easy to download, just create one and anyone can download, even when you’re not there as long as pay for it or as long as you subscribe. Of course, there are certain rules you have to follow, how to get an ISBN for your book.

2. Create downloadable learning tools like CD. If you are an expert in something and use their experience to educate people then creating downloadable tools is perfect for you. You can do a class where people learn by listening to his voice and can not fee for that. If customers like you, they keep coming back.

3. Create a blog that is supported by paid advertisements. Write something that interests you. You can also link their blogs to other programs that offers site traffic. One example is the Google AdSense. It is very easy to set up an account. It is available worldwide. They pay for each click on their ads for blogs. “Payments vary with the type of ads shows in its ads. However, there are some keywords that can attract advertisers to bid ona place in your blog. Just keep in mind that, do not click your own ads because it is a violation. If they discover that the team will terminate your AdSense account.

4. Participating in affiliate programs. Create a site that will help the campaign for affiliates.You can visit different affiliate links and some of them should not be a member of costs.

5. Make an online journal. You can get people to subscribe, participate in forums and submit articles for you. You can publish a monthly, quarterly, what you like.

These are 5 ways to build residual income.

As The Telegraph reports, the survey also revealed that one in 20 will finish work with unpaid debts of more than £50,000. This figure rises to one in 10 among men aged over 65.

Women are less likely than men to take their debts into retirement with them – with around 18% of women saying they would still owe money on retirement, compared with 23% of men. Women are also taking less debt into retirement with them – an average of £25,100, compared with £39,500 for men.

The highest percentage of people taking debts into retirement with them was recorded in Wales, where 37% of people finishing work this year would still owe money. This was sharply contrasted by the figure recorded in the east Midlands, where just 11% of people who expected to retire this year thought they’d do so with debts to their name.

The largest average debts in retirement were recorded in the South West, where those finishing work this year carried a debt of £69,100 each. New pensioners in the North East are carrying a lot less, though, with a debt of £12,700 each.

The research also revealed that over half (55%) of those retiring with debts this year had racked up debts on credit cards, while 52% hadn’t yet managed to repay their mortgage. Just under one in five (19%) owed money through bank loans, 14% had overdrafts and just 1% had unpaid debts to loan sharks.

On top of those who expected to carry their debts into retirement with them, 14% didn’t actually know whether they would have repaid their debts by the time they finished working.

Spokesperson at Prudential, Vince Smith-Hughes, said: “These figures show how the ‘class of 2011′, a previously risk-averse generation of savers, took advantage of the consumer credit boom of the last decade.

“Total consumer debt has more than doubled since 2000 and a large number of people planning to retire this year are now faced with spending a significant part of their retirement income meeting these debt repayments.”

A spokesperson at http://www.debtadvisorycentre.co.uk, commenting on the findings, said: “Anyone carrying debt into retirement will have to make sure they’ve got enough available money to cover their monthly payments until their debts have been repaid.

“That can be particularly difficult in retirement, so those who haven’t retired yet should focus on repaying as much debt as possible before they finish work – so they’re not left with the risk of unmanageable debt in the years after work.

“We would strongly advise anyone struggling to repay their debts now to address the issue so it isn’t a problem later. Speaking to a professional debt adviser could be a good place to start.”

emergencies and other financial goals?  Here are 10 tips to cut your spending and stretch your money to the max:

1.  Consider dropping your home telephone line. Your cell phone is probably all you really need, and most likely it has free long distance.  You could save $30 or more per month by dropping your “land line”.

2.  Cut the trips to Starbucks or other premium coffee shops. Often called the “latte factor”, spending several dollars per day on luxuries like premium coffee can really add up.  For example, if you spend $4 for a cappuccino five times a week for 50 weeks out of the year (you’re on vacation the other two weeks), you would spend $1,000 in a year.  Try treating your trip to Starbucks as a treat instead of a habit.  You’ll save money and probably lose weight too!

3.  Pay your mortgage payment bi-weekly instead of monthly. You’ll pay less interest and pay off your mortgage faster.

4.  Carry cash instead of credit cards. Psychologically it’s harder to spend cash than it is to use the credit card.  You’ll spend less and save on interest charges.

5.  Use the “envelope system” for groceries, dining out, entertainment, and other discretionary spending categories.  This will help you track how much you spend in these categories as well as prioritizing your spending.

6.  Raise the deductible on your homeowners and auto insurance policies. It’s not wise to file claims for small losses anyway (insurance companies love to raise rates after you file a claim), so a higher deductible will save you money now and in the future.

7.  Buy regular gas instead of premium. Most cars don’t need premium gasoline.  Also, take public transportation if it’s available in your area.  Take advantage of “park and ride” and carpooling options.

8.  Plan what you want to b uy. Take a list with you to the grocery store and stick with it.  Studies show that impulse buying can add $10-50 to your grocery bill – ouch!

9.  Go to the library instead of the bookstore. If you’re an avid reader, give yourself a book budget for books that you will want to keep, and go to the library for everything else.

10.  Vacation at home. Check out all the local sites and happenings.  You’ll rediscover your hometown and save on travel and hotel costs.

These are just a handful of ways you can cut spending and stretch your dollars, but if you follow these tips you’ll discover you have more money at the end of each month to apply to other financial goals, such as saving for college, retirement or just for a rainy day.

Occasionaly, I run into people who think that it is a waste of time, resources and money to have one. And yes, I have read books (all from the west) that discourages having
a reserve fund as well.

Their main argument against it is that the money will notbe making more money for you. Since the fund is kept in a safe and secure investment vehicle – normally the fixed deposit – it’ll be earning a measly 3-4% return a year. So it is wasted. Why not take this money and invest it in the stock market, properties or someplace else and make the money work for you?

Now, let me first clarify that I have nothing against investing. In fact, I’m a firm advocate of investing your money. However, first things first.

Before you can run, you have to learn how to walk. And before you can walk, you have to learn to crawl first.

And before you invest, you must have a reserves fund worth at least three months of living expenses first. For example, if you require RM5,000 a month to ensure that life goes on as per normal, then have RM15,000 as your reserves fund. Of course, more is better.

This money, as mentioned in my book, should be kept in a safe and secure investment vehicle. And although you may consider the fixed deposit, I’ll give you two better alternatives – the ASB and/or the Tabung Haji. Both give a fair return for your money. ASB used to pay >12%; now
it’s about 10%. Tabung Haji used to pay >7%. (Of course, 2001 wasn’t a banner year for Tabung Haji. But they appeared to have sorted out their problems, and have paid decent returns again).

The purpose of the reserves fund is not so much to make more money, but to ensure that life goes on as per normal. It will ensure that your life will go on with minimal disruptions.

Otherwise, when a situation or an emergency arises (and they certainly will as long as we are living here on Planet Earth), it will compound our problems. We may have to sell our investments at a loss or borrow money (and pay an obscene interest) to address the situation. Both will cause more disruptions, waste more time, effort and money.

In summary, I will say this: if you do not have a reserve fund – forget about making an investment – any investment. You are not ready.

Author: Azizi Ali

It would take a book by itself (and perhaps even more than one!) to explain the points in complete details. But I’ve decided to summarize the points for your benefits. I must forewarn you that this article is a bit longer and also more complex than the usual. It needs to be – we’re talking about the state of the current financial system here!

The imminent collapse of the U.S. Dollar

The Federal Reserve is printing money – over $1 trillion in 2009 alone. This money – conjured out of thin air – is to battle the rising deficit, credit crunch, subprime crisis, bailing out the ‘too-big-to-fail’ companies and other dragons.

So the plan appears to be, to allow the dollar to drift down (and if needs to, crash down) so that American goods remain cheap so that other countries can afford to buy them, and therefore send enough of their money to the U.S. to help address all these mega problems.

Throughout the last century, all the countries that were spending beyond its means had to pay the price when their currencies were devalued. Argentina, Mexico, Thailand and even big economies such as Germany, Britain and Japan – all paid the price. All except one – the U.S.

For a long time (too long in my opinion), other countries have been propping up the U.S. by supporting the dollar. Many central bankers are scared of the results should the dollar be allowed to find its own way. Chaos, disruptions to the status quo and perhaps the collapse of civilization as we know it. So, even though the U.S. is spending beyond its means, and with no way out in the near future, it is still moving along because the rest of the world is covering up for them. But the question remains – for how much longer?

The China connection

A lot will depend on what China – the largest foreign creditor to the U.S. – decides to do. Its international reserves have been shooting upwards since the mid-1990s – from $100 billion in 1995 to $2.3 trillion in 2009. Half of its GDP – $1.6 trillion – is held in U.S. dollars in some form – U.S. Treasury bonds, mortgages, corporate debts, etc., etc. And that figure will only grow in the coming days as it continues to record trade surpluses against the U.S. even on a monthly basis.

Currently, China is telling the rest of the world that any diversification of their reserves away from the dollar will be made gradually. But as the debt grows larger and larger, the day will come when even the Chinese government will be asking themselves: “How long can we continue to subsidize the high spending white men? How long must we continue to let them wear their big hats while we take care of their cattle? How much longer?”

Lack of viable investment alternatives

The same money that used to go to stocks may not go there for much longer. The stock market faces massive obstacles because (1) the consumer-driven economy in the U.S. has weakened; (2) the probable withdrawal of money by the retiring baby boomers; (3) it is unlikely that companies will be able to maintain the current high earnings into the future. And as the days for large profits for the companies may be over, the prospect for higher stocks prices and generous dividends for the investor may also be over.

Ditto for bonds (yields are at multi-decade lows) and even real estate. The major and prolonged real estate boom (lasting over 20 years) – financed by easy credit – was good while it lasted. But this makes the chances of it going higher very unlikely.

So in short, the prospects for these investments are getting dimmer as their risks gets higher, which makes them unattractive for investors.

Their money has to go somewhere. And that somewhere is gold.

Worldwide physical supply and demand for gold

The demand for newly mined gold has consistently exceeded the supply in the last few years. And by the looks of things, this situation can only continue, and will probably get bigger, in the coming days.

Firstly, the demand has grown because of the introduction of new investment vehicles such as ETFs and increase in demand from Asia, particularly from India and China.

Next, the major central bankers are not selling as much gold as they used to. In fact, a few central bankers such as India, China and Russia actually bought gold recently.

Yet, despite all these activities, the supply has pretty much remained static. Firstly, the total supply of newly mined gold has been falling continuously since 2001. In fact, the production in South Africa, which used to be the world’s largest producer of gold, has been falling for over three decades! Even the rising supply from China and Latin America has not been able to make up for the shortfall.

Distrust in the financial system

If you believe that everything is rosy with the current banking system, that the monetary authorities are doing a fine job and that derivatives are the best things since the invention of money, then you are wasting your time with gold. Since the financial system is fine, it means that prices should be rising while gold, being the anti-matter as far as the system is concerned, should be going nowhere.

However, that consensus appears to be wearing thin even as I write these words. While we still do believe in the current system, a lot of people – including economists, central bankers and even governments – are beginning to have second thoughts. They have seen the chaos: the subprime crisis, the real estate bubble, the fall of financial giants and the collapse of ‘too-big-to-fail companies’. All a result of the excesses in the current financial system.

The worse is may yet to come. A few financial instruments in the market today did not even exist 30 years ago. One example is derivatives: financial instruments that are so complex that you cannot talk about them and not use the word ‘complex’ in the same sentence! Few people understand them and even fewer know how to measure their risks. So they are potential time bombs. There has been only one live test so far, the fall of Long Term Capital Management (LTCM) in 1998, and that nearly floored the whole banking system! And in case you didn’t know, LTCM was founded and ran by Nobel Prize winning economists! What is really scary about it is that the value of the derivatives contracts when this happened was less than $70 trillion. The market have exploded since then so the same contracts were valued at over $415 trillion in 2008, more than six times larger than the global GDP! So any sudden jerks and certainly failures in that market will bring much pain – perhaps even a global collapse of the financial system as we know it.

The U.S. government is an aging star

For the last 100 years, there is a phenomena that everybody knows but do not want to admit. And this is that phenomena: what will happen is what the U.S. government wants to happen. And generally speaking, what the U.S. government wants, the U.S. government gets. So if they want to price of gold to rise, the price of gold will rise. And vice versa.

As an example here, the price of gold remained at $35 per ounce from 1935 to 1971 – a period of 36 years that included World War II, the Korean War, the Vietnam War and numerous other conflicts. Why? Because the U.S. government needed to price to stay at that level to save their crumbling economy during the Great Depression and later on to allow the U.S. dollar to usurp the coveted role of being the world’s reserve currency from gold. The rest of the world did not like it but that was what happened.

However, that may not be the case for much longer. The U.S. government is like an aging star – everyone still respects her because of what she has done and because she still wields a little bit of power. But everyone also knows that she is getting old. And the power is slowly slipping away as new stars rises.

Further, the situation may be even out of their control. Their debt is monstrous, their trade deficit is growing every day, their population is aging, their financial system is on a ledge and there is growing distrust from the rest of the world.

Author: Azizi Ali

In his newspaper article, Simon Bain of the Herald tells of how one particular bank has been sending credit card applications to people with offers of a credit card with APR of up to 69% (http://www.theherald.co.uk/business/52784.html). This astounding rate applies with a credit limit of £150, while an APR of 41% applies to a credit limit of £1500.

Quick additional sums of money may seem very tempting to people at this time of year, and without consideration a lot of people will be more than tempted. But it’s not until later that the repercussions of such a high interest hit home. This can lead to difficulties in February, which spill over into March …and so on, until before you know it it’s Christmas again and you have serious problems.

So before you go looking for short-term solutions that could lead to long-term problems, take some time to consider your options so that you can decide what kind of year you’re going to have.

There are many cheap and easy ways to get credit card advice this New Year. The best way is just to log on to the web. There are many sites out there dedicated to offering financial advice. One of these sites is http://Moneynet.co.uk. Here you can check out all of your options. There is a great page dedicated solely to providing credit card advice ( http://www.moneynet.co.uk/credit-card-guide/index.shtml ) as well as many pages advising the card with best introductory rate, the best standard rate etc.

So, before you go down the wrong road, check out what your options are this January, and make sure you truly do have a happy New Year.

Like most of Americans, you may stretch your income to cover the regular monthly expenses, and always choose to ignore or not to think about the brakes that are getting spongy or the plumbing that's beginning to make strange noises. And you end up a surge on your monthly expenses when the brakes wear off and the plumbing break out.

Planning and saving for those events can help prevent an ordinary life from turning into a crisis and can also cut down dependence on credit cards. Not having savings is a major reason people get into debt.

Here are some steps to help you get started to plan for your emergency fund, the "Saving" fund which will help you prevent financial disaster.

1. Identify your irregular expenses

Analyze your pass credit card statement and checking account registers to identify your irregular expenses occur throughout the year. Examples of these irregular expenses are property taxes, insurance premiums, vacations, car tune-ups, holidays and birthdays. List down in a piece of paper all the expenses which are not spent in monthly basis.

2. Write the anticipated amount on the calendar

In most of cases such as insurance premium and property taxes, you will know when the expenses are due to occur. And for those unknown cases such as car repair and plumping repair cost, try to anticipate their expenses and list them somewhat earlier than you actually expect them to come up. Be sure to update your calendar as you discover more expenses.

3. Plan-in the non-monthly expenses into your monthly spending

Based on the foreseen amount and anticipated amount that are captured on your calendar, plan ahead your non-monthly expenses into your monthly spending. For example, you know that your car insurance is going to due on May, set aside small amount of your money for this purpose starting on February. And when May rolls around you can transfer the expense to your spending plan and have money available to pay it. Setting aside even a few dollars each month for foreseeable expenses can prevent larger money woes ahead.

Sometimes, you may find it hard to set aside some extra money from your monthly income; but remember, repairing your car or paying your insurance is not optional expenses and you need to spend it soon or later. So you need to find a way to reduce your monthly expenses so that some money can set aside for emergency fund. You may need to track your spending; then, reduce or cut the optional expenses such as entertainment, dinner at restaurant and other impulse purchase, the money save from those optional expense can be put into your emergency fund.

In Summary

One of the mistakes people make when trying to get their finances under control is not having an emergency fund on their savings account. The problem is that if you don't have money set aside for those unavoidable bills, you inevitably end up adding to your credit card balance to cover the difference.

The bottom line is to start today. It may be discouraging at first if you find that you don't have enough money to fully fund your emergency fund, but you'll begin to succeed the minute you start the process.

The right time
Getting a mortgage is not for sissies.  This type of loan, whether you’re taking it out to purchase a car or a house, is easily one of the biggest financial decisions you’ll ever make in your life.

If you’re taking out a home mortgage loan and are considering getting it refinanced later, you’ll be glad to know that you could probably do it at any time you want.  But once you have a mortgage and interest rates begin behaving in a manner that is favorable to you, you shouldn’t automatically apply for refinancing.

First, the difference in the new interest rate and the current interest rate should be enough to actually give you some advantages.  Second, most lenders will probably advise you to refinance only after your loan has matured for a minimum of 12 months or so.

However, it’s good to consider this only if interest rates have remained more or less the same.  If, at any time after you have taken out a mortgage loan the market trend begins tipping to your advantage, you should consider refinancing your loan.  Remember that interest rates are rather volatile and if you wait too long for them to dip further, you could miss out on a very good opportunity to get a good deal.

2 percent rule
Just because interest rates have fallen a tiny bit does not automatically justify your decision to refinance.  Consider refinancing only if the new interest rate is at least 2% lower compared to the rate you’re currently paying.  A 1% difference in interest is not sufficient reason to make the switch.

Remember that there are costs associated with a new loan.  When you consider refinancing for your mortgage, remember that you will have to pay extra for closing fees.  An interest rate as low as 1% will not cover the expense.

The first thing you have to understand is that the reason why you are in debt is because there is more money going out rather than going in. Chances are, you spent more than what you actually have in the bank because you thought that you could pay for it on a staggered basis not knowing that the amount of money you still owe goes up because of interests.

Now that you do know that, the objective now is to pay off the debt and the only way to do that is to make some budget cuts so whatever you money you have can be used to pay off the debt.

To do that, you have to look at your bills so you know exactly how much money you have and where it is actually going.

Based on the bills, you can tell how often you do your groceries, how often you fill up the car with gas and how often you eat out.

In order to save money on groceries, the best way is to buy less and only the essentials each time you go shopping. If there is one item there that is too pricey, try a cheaper brand that can also give you the same satisfaction like the one you usually purchase.

To save on gas, the best thing to do will be to carpool several days in a week. If you work from the home, make sure that you when you go out, you are able to do all your errands in one trip. Should there be any excess baggage in the car, remove it because the added weight makes your vehicle consume more gas.

Some of the clothes we wear can last a few years before it has to be replaced. A good example is a pair of jeans. For other clothes that will wear out much faster, try buying a similar item from a thrift shop or a smaller store. This is because no one will care where you bought the outfit and what matters is how you are able to carry it when you decide to put it on and go out.

But if you really want that item, maybe you should wait until the store decides to have a promo on that item or decides to go on sale. In the recession, a lot of retailers are slashing prices and coming up with various gimmicks just to stay afloat so there is a big chance that you can get this off at a much cheaper price.