The 3 Principles of Success, according to a young millionaire

by Cameron Johnson, from the book You Call the Shots

I started my first business at age nine with $50 and a home computer, and ran it from my room at home as a one-kid operation. By the time I was 19 I had started nearly a dozen profitable businesses, and for my latest venture I had received a very attractive offer of $10 million in venture capital. I turned that offer down and walked away because I didn't feel good about the conditions that would have been imposed on me if I'd taken the money. The venture capital firm would have called the shots, told me how to run my company, and paid me a salary that would've been less than I'd made on my own since I was 12.

It was a lucrative offer, and who knows? Maybe with their backing and expertise I would have come out way ahead. But I didn't think it was the right deal for me. I made that decision without regret, and I've never looked back.

I knew this was not a now-or-never choice. There would be plenty of other opportunities to create even more successful businesses — because I'd learned the skills it takes to do so. Once you learn these skills, you never have to be tied to any one particular enterprise. I realized that while I could have taken someone else’s $10 million investment, I'd rather invest in myself.

I've been fortunate enough to make my first million before graduating from high school and buy my own house at 20. At 21, I've now put away enough in savings and other investments that I could practically retire today . . . if I wanted to. But of course, that's the last thing on earth I'd want to do. I just enjoy it all too much. Not to say the money isn't important, but frankly, it's not why I do what I do. I do it because I love it.

Read more

Are you frugal or stingy?

All of us have to make choices about how we spend our money. Wise choices allow us to build our wealth and, eventually, achieve financial independence. But how do you decide when you're being frugal, and when you've crossed the line into stinginess?

Here are some benchmarks to check if you are stingy or not.

• If you use 2-for-1 coupons at a restaurant, you might be frugal. If you base your server's tip on the discounted bill, you're probably stingy.
• If you decide in advance how much to spend each year on charitable contributions, and then try to stay within that budget, you might be frugal. If the last thing you gave to charity was an ancient can of lima beans you wouldn't eat yourself, then you're probably stingy.
• If you use a tea bag for more than one cup of tea, you might be frugal. If you offer a guest the cup made from the used bag, you're probably stingy.

Frugality can be, and often is, a virtue. It implies you're being careful, not wasteful, with your resources.

Stinginess is a vice, and it carries a whiff of meanness. The word "implies a marked lack of generosity," as Webster's tells us. Stinginess is about pulling back when the more-human impulse is to give.

Read more

Yes, income from scams are also taxable

Whether it’s earnings from online scams, fraud Multi-Level Marketing programs, and shady HYIPs, as long as it’s considered income, it’s taxable.

Any monetary benefit received from an activity, illegal or otherwise, normally becomes part of one’s taxable income.

That’s from an article published in MSN Money Central which also summarizes how they are treated under US tax laws. Take note of the following, lest you want to run into trouble with the Internal Revenue Service (IRS).

Read more

Do I have to pay taxes on my online income?

Finally, after months of discussion in the Tax on Online Earnings thread in the PMT Forum, we now have an official reply regarding taxation of earnings from online sources outside the Philippines.

If you are wondering whether or not you have to pay taxes on income earned from Google Adsense, pro-blogging, freelance writing, or HYIPs, among others, read below the official reply from the PinoyTax Yahoo Group, a non-government e-Group that provides tax updates and explanation to members.

Scenario 1: A Filipino citizen works part-time as an offshore, outsourced writer for a US -based website. Are the earnings taxable?

A Filipino citizen is taxed  based on his taxable income derived within and without the Philippines, which includes part-time works as an offshore, outsourced writer for a US-based website (see page 157 Annex A1 of Philippine Taxation Handbook: A Simplified Course  September 2006 Edition).

Scenario 2: Filipino citizen works full-time as a freelance programmer for websites hosted abroad. The programmer bids on projects and receives payment once the project is completed. The income for each project does not meet the minimum taxable income but when aggregated, the income during the year for all projects does. Is this taxable?

A Filipino citizen whether working on full-time or part time is required to file an income tax return, regardless of the amount of gross income (see page 50 of the same book). If the Filipino citizen is a self-employed individual then certain deductions and personal exemptions are allowed (see pages 30 to 47 of the same book) and for which the normal tax rates (see page 157 of the same book) shall be applied to taxable income after such deductions and exemptions. 

Scenario 3: A Filipino citizen invests in an online MLM program, an HYIP, or autosurf program — programs not duly registered in any country and are deemed illegal because of their Ponzi structure — and receives 50% return on the "investment". The program does not require the "investor" to do anything, except to "invest" money and to wait for several months. At the maturity date, the "investor" gets 50% interest income on the principal. Although these earnings are deemed to have come from "illegal" sources, are they still taxable?

A Filipino citizen is taxable based on his income from whatever source (see page 24 of the same book) including the 50% interest income on the principal. 

Scenario 4: Same scenario in #3 above but the investor uses an electronic currency (e-currency) such as e-Gold. The income has been received in e-Gold but has not been converted to cash yet. As of the tax reporting period, the money remains in the e-currency account. Is this taxable?

If the Filipino citizen has control in the conversion of the e-currency to cash, then such e-currency can already be treated as a form of a cash and other monetary asset.  If he has no control in such conversion but such amount is due and demandable, then the e-currency shall be treated as a receivable item. In any case, it shall be treated as a taxable income in accordance with the method of accounting (example: cash basis or accrual basis) regularly employed in keeping the books of such taxpayer.

Have more questions or clarifications? Post them in the Tax on Online Earnings thread in the PMT Forum to know the answers.

How to declare online earnings for tax purposes is mentioned here: Gross and taxable income from sources without the Philippines 

If you are a US citizen/resident wondering whether you have to pay taxes on HYIP and autosurf earnings, read this article.

More ways to spot fake money

In addition to the simple ways to identify counterfeit money outlined in this article, here are some more things you can check to detect if the money you have is fake or not.

Counterfeit Bill

Counterfeit Coins

Fake coins are often made by pouring liquid metal into molds or dies. This procedure leaves die marks, such as cracks or pimples of metal on the counterfeit coin.

Some fake coins are also produced to simulate rare coins that may be of value to collectors. Counterfeiters do this through the alteration of genuine coins by removing, adding, or altering mint marks or the date printed on the coin.

Information and Images Source: United States Secret Service

 

Get the most out of your Christmas bonus

It's that time of the year again. You probably have received (or will soon receive) your Christmas bonus but before splurging and spending everything, take time to think how to put that extra money to work.

Here are some suggestions from the Personal Finance section of the Philippine Daily Inquirer.

1. Start saving for a big-ticket item. Have you been dreaming of that cool car or relaxing vacation for too long? Then use your bonus to kick off a smart savings plan. You may also use your holiday money for other medium-term goals, like graduate studies or a pad of your very own. If you don’t start now, that dream will slip farther away.

2. How about a business? They say a job gives you stability. Entrepreneurship, on the other hand, is the one that will make you rich. Don't think that you need a lot of capital to start a business. With just P5,000, you can start making polvoron and other sweets then sell it at the office. You can also use that P5,000 to start a business making handmade beaded jewelry. Find out what you like to do and what you are good at. Who knows? Your business may take off and you could end up leaving your job and going into it full-time.

3. Get insured. If you don't have health insurance benefits at work, it's a must that you get your own health insurance coverage. There is never a convenient time to get sick. Use your bonus to pay for the premiums for next year.

4. Pay off debts. Use part of your windfall to pay your credit card bill in full, or that personal loan with the bank. Consider this your most creative gift to yourself. Not only will this allow you to sleep more soundly this coming year, you will also be taking a step further to being more financially stable.

5. Give to charity. You can share your blessings by giving to your church or a favorite charity. You might be surprised to realize later on that the blessings will come back to you.

6. Grow your savings. If you've decided to practice delayed gratification and save for your future, it's not enough that your money is tucked away safe in a savings account. There are many places you can park your cash where it can grow even more through higher interest rates. Here's an article to help you decide where to invest your money. 

Still, don't forget to give yourself a reasonable treat. You definitely deserve it!

Have a Merry Christmas and a Prosperous New Year!

Make your credit card work for not against you

A credit card is a great convenience. With just one thin square of plastic, purchases can be made wherever we are without having to bring cash. Yet some people view credit cards with suspicion, thinking it may lead their finances astray.

The truth is, your credit card can work for you or against you depending on your spending habits. If you are in control of your purchases, your credit card can be a most convenient tool.

Here’s how to make your credit card your friend.

Read more

Debt Threat: Manage your personal debts or else

From the Philippine Daily Inquirer’s “Take Charge of your Money Series”:

If your debts seem enormous and daunting, try these tips to manage your debt and get out of that rut:

1. Keep control of your cash flow and plan ahead.
2. Avoid making short-term debt a long-term habit.
3. Protect your credit history.
4. Use debt constructively.
5. Evaluate whether you need to go into debt or use cash.
6. Ask if you really need it.
7. Tighten your belt.
8. Grow your income.

Full Story

The Other Marriage Contract

It’s close to December, the peak month for weddings in the Philippines. Budding newlyweds would be in the thick of wedding preparations, making honeymoon travel plans, house-hunting perhaps, or picking out baby names. But in planning a new life together, one very important subject is often regarded by engaged couples as taboo –- that of prenuptial agreements.

A prenuptial agreement, or a prenup, is an accord in which a couple sets the rules to govern their property, debts, income and expenses.

Most couples reject the discussion of prenups for fear of raising notions of distrust. The fact remains that a marriage isn’t just a union of hearts, minds and bodies, but a union of assets as well. Making an effort to respect that fact is crucial to a healthy marriage.

All in the family

Prenuptial agreements are not just for the wealthy. Filipino values command respect for hard-earned family resources, which we count among our most jealously guarded assets. Money and property matters concern every Filipino home.

Drawing a prenup has been made even more essential for Philippine marriages by the provisions of the Family Code of 1988, as discussed in this article excerpt: 

Read more

Use online banking to manage your finances better

Great strides in technology have made life a lot easier. Thirty years ago, anyone who had to transact with the bank had to go to his own branch, bring his passbook, fill up forms, fall in line, and then wait for his turn.

The advent of automated teller machines (ATMs) in the '80s made it possible for people to withdraw cash and do other banking transactions even after banking hours or on weekends – all in less than five minutes.

Then came phone banking which allowed depositors to do the same without leaving their house or office.

With the Internet age, consumers do not even have to wait for a phone operator. A computer and an Internet connection will allow anyone to transact with their bank at the click of a mouse.

Read more

« Previous Page — Next Page »