You Spent How Much on Your Summer Vacation?!?!

by MB

 

Is it Worth it??

Yesterday I read an article on CNN Money stating that the average American household expects to “spend about $1,200 per person on summer vacations“. Yes, you read that correctly. Not per family, but per person…and that’s just their summer vacation budget. I wonder what they’re budgeting for their fall getaway and winter escape???

Let’s just assume that the median household income is somewhere around $50k right now and the average family consists of 3 people and 1 pet (a dog…definitely not a cat). So this “average” family is going to spend $3,600, or 7% of their annual (before tax) income on their summer vacation (and what are they going to do with their dog when they’re gone? Boarding dogs is EXPENSIVE!) ??? That is just N-U-T-S!

My wife and I are going on vacation this summer, but we are definitely not spending $2,400 or anywhere close to 7% of our annual income on this trip! It will probably be closer to 1% of our income and will be our major trip for the year. I’m not against people taking vacations, but they should be reasonable and not interfere with your long-term goals. I think the majority of Americans would benefit from an extra 7% of their income going into savings or retirement instead of another vacation…but that’s just me!

Like this post? Share it with your friends!

{ 0 comments }

Income Report – March 2011

by MB

I have decided to start sharing my results as I create online income. While I know that I’m starting small, I believe I can grow this and I want to share my journey with all of you. I will show all of my income and expenses related to all of my attempts (successful or not) at earning a passive income online. For recurring expenses (domain names, hosting, etc) I will just show those as expenses in the month I have to pay the bill. If you have any questions, please let me know!

Reflections:

March was a bad month in terms of getting things in gear around here. I didn’t come up with a name for my new DBA – so my old one is still alive and kicking. Due to that, I have kept my online business going, but didn’t generate any sales during March. I don’t think my biggest issue is not having time, but it’s not allocating my time correctly. Instead of spending time reading other blogs about online businesses and creating a passive income online – I should be out there making it happen. The reason I haven’t had any new content (which I said was my focus area for March in my last update) is because I haven’t carved out the time to make this a priority. I did finish the Four Hour Workweek and got some great insights out of it which I hope to put to good use very soon.

eCommerce Business:

No activity during March.

Other Areas:

Nothing during March – it was pretty much a lost month for generating a passive income online. A whole month gone with nothing to show for it is definitely sad, but it can only get better!

March Focus Areas:

- Shut down eCommerce Business
- Come up with name for new DBA and set it up
- Shut down existing DBA
- Get my a$$ in gear!

Thanks for reading, that’s all for now!
MB

March Profit: $0.00


Image courtesy of roseannapiter.com

Like this post? Share it with your friends!

{ 0 comments }

How NOT to Run an Online Business

by MB

ComputerAs I’ve detailed previously, I started an eCommerce business that I thought would bring in a significant amount of revenue and help kick start my online income empire. Well, things haven’t gone according to my plan and I ended up getting a nasty gram from the state of Texas informing me that I owed them $1100 in unpaid sales tax and penalties…YIKES!!!

Unfortunately, my first (and only) sale was made to someone in Texas (where I live). Because of this I was forced to collect state and local sales tax from the buyer. Well… I forgot to file my quarterly “Texas Sales and Use Tax Return” so the state of Texas decided to help me out by sending me a “Jeopardy Determination” with the explanation “Failure to file your return for this period caused this estimated billing which is due immediately. Collection action on this estimated liability will continue until you file your return and pay all tax, penalty, late filing penalty, and interest due.” In the state’s estimation, my little business, which had been operating for less than 3 months at that time should have generated $1k in sales tax revenue for the state. In addition, as I’d failed to file, they were assessing a $100 penalty, which would increase if I didn’t pay within a few weeks.

Once I figured out I could file and pay my taxes online I went on and plugged in the numbers from my only sale. Once the dust had settled I ended up paying my state and local taxes, a penalty (equal to about 1/3 of the tax bill – but only $2), and a charge to pay online.

So, after all the hassle of setting up the listing on Ebay, putting in the order with my supplier, emailing the buyer a couple of times to inform him of the progress, checking with PayPal for payment status, and then dealing with this tax issue, my gross profit from this transaction is a whopping $.52!!! That’s right, fifty-two cents, out of which I now have to pay personal income taxes on in addition to Social Security, Medicare, etc. I will be lucky if I’m able to afford a gumball at the end of all this.

Fortunately, I learned a valuable  lesson with this eCommerce business – that I do not want to be in the eCommerce business! I want to spend my time creating content and working on things of value, not reselling items for a slight markup where there’s always a chance that I could make a mistake and spend hours of my time to only make $.52.

Before you decide that your passive income idea will be an eCommerce business, think long and hard about how much actual work you will have to do and whether or not you are prepared for all the backend work that goes into it.

Like this post? Share it with your friends!

{ 0 comments }

Income Report – January and February 2011

by MB

Moneybag

I have decided to start sharing my results as I create online income. While I know that I’m starting small, I believe I can grow this and I want to share my journey with all of you. I will show all of my income and expenses related to all of my attempts (successful or not) at earning a passive income online. For recurring expenses (domain names, hosting, etc) I will just show those as expenses in the month I have to pay the bill. If you have any questions, please let me know!

Reflections:

The last couple of months have been pretty quiet around here for a couple of reasons. The first is that I started a new job with a new company at the beginning of the year, which has diverted a lot of my attention away from here. The other reason is just a general lack of motivation to kick things into gear.

When life is humming along at a great pace, it can be hard to find the energy to devote to creating passive income (online or offline). But I realize that if I want to realize my dreams of not showing up to a 9-5 “job” for the rest of my life, I need to invest a lot of effort on the front end. Also, I’ve been reading The Four Hour Workweek (Amazon Affiliate link) by Timothy Ferriss. While I’m only 19% through the book (I love my Kindle with its progress bar!), it is definitely giving me a mental kick in the teeth. Of course, I can continue to sit back and relax while things are going well, but then I’ll never achieve any of my goals and I’ll forever be just a cog in the corporate machine…not my idea of success!

Alright, enough of that, here’s what I’ve been up to:

eCommerce Business:

Since my issue with taxes/no profits, I have decided to shut this down. The only problem? I forgot to remove my inventory from Amazon…and I made another sale. While I considered just canceling the sale and refunding the money, I decided that it wasn’t the buyer’s fault that I had/have been too lazy to pull down my inventory. Luckily, this one was out of state so no tax issues there, but by the end of March I will be completely shutting this down, along with the DBA I created to handle this business.

Income: $74.48 ($69.99 for the item & 4.49 for shipping)
Expenses: $69.44 ($57.50 for the item, $11.94 for Amazon fees)
Profit: $5.04

While I did make a much bigger profit this time ($5.04 vs $.52), I still had to invest at least 15 minutes emailing the seller, entering his order information with my supplier, etc. So at $20/hr, I think it’s definitely best if I shut this online income venture down…before it sucks anymore of my time!

Other Areas:

It’s very sad to say that other than the $5 from the item I accidentally sold… I’ve done pretty much nothing, other than procrastinate and make excuses for why I’m not doing anything. I’m leaving this area here to remind me of how little I’ve accomplished in two months.

March Focus Areas:

Content, Content, Content… need I say more? I need to focus on writing and publishing some good quality content. Other than that, I’m planning on registering a new DBA to handle all of my online income ventures…I just have to decide on the name! As I mentioned earlier, I also need to close out the eCommerce business and ensure that I have no future accidental sales.

Thanks for reading, that’s all for now!
MB

Jan & Feb Profit: $5.02


Image courtesy of roseannapiter.com

Like this post? Share it with your friends!

{ 0 comments }

How to be Successful…at Failing!

by MB

FAIL!HAPPY (13 day late) NEW YEAR!!!

On August 30th I shared several goals with you that I believed would help to move me in the right direction. Well, it’s been over 4 months, so how did I do?

I failed…SPECTACULARLY!

I didn’t achieve any of my goals and only completed one of the action items (I had 4 posts included in various blog carnivals, which definitely gave me a good short term boost in readers on this site). Now I could be annoyed at myself (I was) and beat myself up over my complete lack of focus and commitment…but I’m not going to do that. I’m moving on and I want to give you a brief update of my goals and what I want to do in 2011:

eCommerce Business - I did make one sale, but that was the extent of the success with this one. After I received a letter from the Texas Comptroller’s Office saying I owed $1100 in taxes and fines for failing to properly file my state sales taxes I decided this wasn’t a good business to be in! I’ll give you more details later, but make sure you keep up with your paperwork!

Personal Finance Blog – I haven’t done a thing to this one, I’ve just been busy/lacked any significant motivation to post anything on here. I have a lot of ideas floating around, just none that make me want to sit down and type them out. I think this one will stay on hold for a while.

ImpactYourMoney.com - I have definitely neglected this site, but I have some valid reasons for it – which I will share with all of you soon. I have a lot of ideas about making money online and I want to do a better job about sharing them with you and bouncing my ideas off the community.

2011 Goals - I think for this year, I’m only going to have one goal. Let’s face it, if I couldn’t handle three goals for a three month period, then I should scale it back BIG TIME! My goal for this year is just to be consistent. I want to post often – if I have a good idea, I want to post about it. If I have a bad idea, I want to post about it. I want to do a much better job about sounding off here and giving all of you more of an insight into my brain.

So for me, 2011 will be the year of CONSISTENCY, what are you going to do this year???

Like this post? Share it with your friends!

{ 0 comments }

← Previous Entries