About a month ago, Zecco’s affiliate manager notified me that I would no longer be compensated for leads sent to Zecco because I had negative reviews about them on Bargaineering.com. I was told that I had to “remove any negative reviews of Zecco and [I] can resume promoting and sending orders.” They phrased it in a way that seemed like I was unfairly picking on them, so I said I’d take a look if they told me which posts they found to be negative.

They sent me these three articles as the worst offenders:

• Is Zecco a Scam or Legitimate?
• On Zecco’s Poor Customer Service
• Opening A Zecco Free Stock Trading Account, Part 1

Nothing in the posts were untrue. When Zecco first launched, everyone wondered if it was a scam. Free stock trades? It sounded absurd. So I did some research and revealed that it wasn’t. It was run by Equinox Securities Incorporation and has a clean record.

As for poor customer service, I was repeating a well known fact that the 2009 Smart Money’s Best Broker ratings listed Zecco second to last in customer service. I would worry more about your customer service than what your customers are saying.

If I changed my content, they would’ve let me back into their affiliate program and paid me for people opening accounts. However, I feel that I should always be giving you my honest opinion, good or bad, if I want to maintain your trust. I should be giving you all the facts that I know, whether it paints them in a good light or not. I could’ve just changed the posts to make them happy and chances are you wouldn’t have noticed, but I think that would be dishonest.

I have no bias against Zecco, I still don’t, and I’ve never said anything negative that wasn’t my opinion. Any facts I’ve shared are backed up with their sources, as was the case with Smart Money’s ratings. I’ve always believed that if you wanted free trades, you had to deal with a little bit of headache. You can’t have everything, but I suppose they didn’t like me saying that.

So they probably won’t like me saying that I think that their decision to strong arm affiliates into saying only positive things will come back to bite them in the future.

Zecco Affiliates Can’t Criticize Zecco from personal finance blog Bargaineering.com.

Until now, we mitigated this by using the fax machine where my wife worked. Since she quit her job, we no longer have access to a convenient and free fax.

So what options do we have?

FedEx Office Print & Ship Center

Since I send and receive faxes very infrequently, I wanted to see what à la carte options there were. Kinko’s, now Fedex, seemed like the best bet so I called a local FedEx Office Print & Ship Center to find out their rates.

To send, they quoted me $2.49 for the first page, $1.49 for each additional page on long distance numbers. To receive, they quoted $1.49 for the first page and $0.99 for each additional page.

Internet Fax Services

With the a la carte baseline, I looked to some internet fax services to see how they compared. In general, they were subscriptions based with a sizable number of “free” faxes each month. If you exceeded the included number of send and receive fax pages, then you’d pay per page. With all of these services, you receive faxes through email and you send your documents online.

Here were some of the options I found:

Fax Zero

Fax Zero is an ad-supported free fax service that lets you send faxes for free. With their free fax package, you can send three pages max, twice a day as long as you’re OK with an advertisement on the cover page. They also have a pay version, $1.99 per fax with a maximum of 15 pages. I don’t know what kind of ads they run or the quality of the service.

MyFax

MyFax has three levels of service, you can get a 30 day trial of their cheapest plan.

Here are their options:

• Best Value: $10 per month or $110 per year, send 100 pages, receive 200.
• Most Popular: $20 per month, send 200 pages, receive 200.
• Fax More: $40 per month, send 400 pages, receive 400.

eFax

eFax is another popular Fax to Email service that is slightly more expensive than MyFax. They too offer a 30-day trial and they offer an impressive suite of tools.

Here are their service plans:

• eFax Plus: – $16.95 per month or $169.56 a year with a $10 setup fee, send 30 pages, receive 130.
• eFax Pro: – $19.95 per month or $220.08 a year with a $19.95 setup fee, send 200 pages, receive 200.

Did we miss any options we should consider?

Best Internet Fax to Email Options from personal finance blog Bargaineering.com.

David Pogue of the New York Times recently revealed his productivity secrets. The very first item he credits: “I work at home. That’s two, three or four hours more work time each day that I don’t spend commuting.” Oftentimes, the appeal of limiting wasted commute hours is offset by the fear of losing access to the work tools available at the office.

Fortunately, as collaboration technologies improve, broadband proliferates, and the country goes greener, working at home will become more popular. For many companies, particularly those that employ knowledge workers, it makes little sense to spend money renting an office and requiring employees to commute every day. When you add in gas, parking, bus or train fares, and wasted hours commuting for little added benefit, the choice becomes easier.

Today’s technologies make it easier than ever to enable your employees to work at home without sacrificing the big company image or the ability for employees to collaborate effectively. Virtual office phone systems, or hosted PBX systems, tie all of your employees into a single company phone system, no matter where they are in the world. This type of system, combined with desktop sharing and online collaboration tools, electronic fax services, and phone and video conferencing, give you everything you need to create a productive virtual work environment with a professional image at significantly lower costs.

Let me explain a little more about each of these:

Virtual Office Tools

Virtual Office/Hosted PBX phone systems: These new phone systems provide the power of traditional office PBX systems but at a fraction of the price. They have superior mobility, letting you set up office wherever you are and you can have all the amenities of traditional office systems (extensions, view call histories, web-access to voicemail, etc). You can use these systems with softphones for PC-based calling or in combination with other phones including cell phones.

Desktop Sharing / Online Meetings: This is software that allows you to share a live image of what’s on your PC screen with other people, so that you can jointly review documents, spreadsheets, Powerpoint presentations – whatever you like. It’s useful for project collaboration and is great for sales pitches and product demos and can significantly cut down on travel expenses for traditional face to face meetings.

Electronic Fax: These systems allow you to send faxes either straight from applications using the print command or simply by sending an email to a special address with the documents you want to fax attached. Inbound faxes arrive by email as PDF attachments. No fax machine is needed.

Conferencing: Conferencing solutions come in many forms, ranging from dedicated dial-in conference numbers to tools that let you set up instant conferences on the fly. Video conferencing is also possible, typically for up to as many as eight people using software on your PC.

Providers: Small businesses and virtual office workers have many vendors to choose from for their communication needs. For hosted PBX platforms options include Toktumi.com, RingCentral, 8×8, and Onebox. For online meetings there is WebEx, GoToMeeting, and Toktumi.com. Electronic fax providers include eFax, Fax.com, and Toktumi.com. For conferencing, FreeConferenceCall.com offers a free dial in solution while Toktumi offers instant conferencing as part of the basic hosted PBX solution.

You might have noticed that Toktumi.com comes up a lot. That’s because it is the only company that offers a “quadruple-play” for small business, with hosted PBX, desktop sharing, electronic fax, and conferencing all at a great price compared to both traditional communication providers as well as the new breed of virtual office providers.

Toktumi’s hosted PBX, which is $14.95/month, includes an auto-attendant (“Press 1 for…”) with multiple extensions and voicemail boxes, call screening with call announce (like an automated personal assistant), instant conferencing for up to 20 people, voicemail by email, after-hours call handling, and the choice of an 800 number, a local number or porting over your existing number. Unlimited calling to the US and Canada is included in the price, and international calls start at just 2c/minute.

Toktumi’s newest feature is called Line2, which lets you add a Toktumi line to your cell phone. Two lines, one phone, each with its own voicemail, call history, and contacts. It’s available for both the iPhone and the Blackberry, with other platforms coming in the future. It lets you keep your personal cell phone private and ensures that all your business calls are handled properly by allowing you to place and receive calls on your Toktumi line right on your cell phone.

In summary, I believe that as broadband proliferates, and more and more people work on laptops over Wi-Fi and use mobile phones rather than desk phones, virtual office tools will become increasingly important and useful to people everywhere. If you want to give Toktumi a try, we offer a 30-day free trial, and readers of Bargaineering can save an additional $10 off their first month by using promo code 182734792.

How Virtual Office Tools Can Increase Productivity & Save Money from personal finance blog Bargaineering.com.

• No annual fee: If you’re a startup, you want to keep costs as low as possible until you get your revenues up. Having to pay a hundred dollars a year, as little as that sounds, is a hundred dollars you can’t put back into your business to grow it as quickly as possible. Just as I wouldn’t get a consumer credit card with an annual fee, if I was a startup I’d avoid a card with an annual fee. Fortunately there are plenty of options.
• Rewards: I look at rewards from two angles. First, I want to get better than 1% rewards or cash back in categories that I will be spending a lot in such as office supply, advertising, etc. Second, if I’m getting points, I want to ensure the reward catalog has products I would buy with my own money. I don’t want gift cards to chain restaurants I never visit. I don’t want electronics or DVDs I can buy for cheaper online.
• Promotional APRs: Many businesses have been built on the shoulders of consumer credit card debt. I don’t advocate going into debt to start a business, but if you’re going to then it’s best to get a credit card that will give you 0% APY for six or twelve months on your purchases or balance transfers. These offers are becoming rarer because credit card companies are reducing their risk but they still exist.
• Don’t use your consumer credit card: You can use a consumer credit card as a business card but be sure to use it only for business expenses (even this is suspect, depends on who you ask). If you don’t properly separate the two “worlds,” then you could run into liability issues down the road. Be sure to check with a business attorney or your accountant though.

Best Business Credit Cards

Citi has a new AT&T Universal Business Rewards Card that offers 0% APR on purchases for six months, a great benefit if you’re just starting a business and need some start-up capital. It also gives you 5% rewards on AT&T products and services purchased through AT&T, to help defray the cost of some of your utilities. You can also get 3% rewards on purchases at some office supply merchants, gas stations, and “professional services.” Finally you get 1% rewards everywhere else.

This is the card I’d recommend if you’re in the market for a business credit card. I list the other two options for completeness sake but this Citi card is what I would recommend because you don’t run into the problem of card acceptance.

• What I like: I like that it’s a VISA card, so it’ll be accepted everywhere.
• What I dislike: Citi’s reward catalog leaves much to be desired. I usually convert points into student loan payment checks but if I didn’t, there’s not much in there that I would want to spend my points on. You can review the catalog to see if there are things you like because there’s nothing worse than having a boatload of points and feeling like you must convert it into something you can’t use.

Discover Business Card – You can get 5% cash back on office supplies, 2% on gas, and 1% on everything else. It’s pretty much a consumer credit card with Business in its name. It has no annual fee and you can skip the reward mumbo jumbo and get your cash back credited directly to your balance. Discover Business also offers some convenient reporting features that you may find useful for your own financial reports.

• What I like: The reporting features are a nice touch considering there is no annual fee and the rewards structure is setup very much like a consumer card.
• What I dislike: It’s a Discover card so it’s not as widely accepted, even less so than American Express, so you run the risk of not being to use your card at certain merchants.

I use the American Express Business Gold because I took advantage of a $250 promotion they ran a few years ago. Since then, I’ve stuck with the card and it’s $125 annual fee because they give a 5% discount on Yahoo Search Marketing advertising, I’ve accrued a ton of points and their rewards catalog actually has things I want (at favorable point conversion rates). They’re one of the most well known names in the business card world because a lot of large corporations use them but there are some big downsides, such as the annual fee and the less than universal acceptance of AMEX cards.

I would not recommend this card for a startup. You need to keep costs low and having to pay $125 a year, as little as that seems, is money wasted.

• What I like: I like their rewards program and how I can convert points to Southwest Rapid Rewards flight vouchers. It’s rare that I see something I want in a rewards catalog. It’s even rarer for the points conversion to work in my favor!
• What I dislike: The annual fee of $125 is a bit much, especially since you can get a no annual fee business credit card from Discover or Citi in a heartbeat. The fact that it’s an American Express card is also tricky because not as many merchants accept AMEX. If you have any international business travel, AMEX acceptance abroad is even worse than in the United States.

Best Business Credit Cards from personal finance blog Bargaineering.com.

That’s a quote from a TED.com video I watched this week in which Barry Schwartz, Dorwin Cartwright Professor of Social Theory and social action at Swarthmore College and frequent contributor to the New York Times, calls for discusses how our society has gone mad with an abrupt loss of “practical wisdom” in the face of bureacracy, the failure of incentives, and rules often protect us from disaster but ensure mediocrity.

The whole video is worth watching but at around the twelfth minute, Barry Schwartz starts talking about the problem with incentives. A neighborhood was surveyed about the dangers of a toxic waste dump. When asked if they would agree to having a toxic waste dump located in their neighborhood, 50% agreed. They didn’t like the idea but they knew it had to go somewhere and they accepted that. When they another neighborhood was polled and given the incentive of six weeks of pay, only 25% agreed.

Why the difference? By adding the incentive of money (six weeks of pay), the decision stopped being about moral obligation (the dump has to go somewhere, here is as good as any other and we feel obligated to have it) and more about personal benefit and having a toxic waste dump is probably not worth six weeks of pay!

Talks Barry Schwartz: The real crisis? We stopped being wise:

If you have another twenty minutes after this video, I highly recommend watching The paradox of choice, another TED presentation in which he talks about the paradox of choice (how too many choices paralyzes us), the topic of his book by the same name.

(Photo: jesper)

Incentives Demoralizes Professional Activity from personal finance blog Bargaineering.com.

Sole Proprietorship

A sole proprietorship is basically a throwaway business entity because you are the business. You and your business are one and the same. You don’t need to file any paperwork to be a sole proprietorship, you simply recognize your business income on your tax return (1040 Schedule C) and the income is treated as self-employment income. This is the easiest of all the business entities because almost always don’t have to do anything! You have to confirm this with your local government, as some require you to register a sole proprietorship, but in most cases you won’t have to do anything. If you don’t do a lot of business, sole proprietorship is probably, but not always, the best option for you.
Advantages: You usually don’t have to file any paperwork and the income is treated as your own income.
Disadvantages: Since you are the business, any liabilities your business has will be your personal liabilities. If your business is sued, the plaintiff can come after your personal assets to cover business debts. This is the biggest risk of sole proprietorships.

Limited Liability Corporation

A limited liability corporation is a business entity that protects you from business liabilities, like debts or lawsuits. It’s known as a “pass through tax entity” because the profit and loss are passed directly to the owners, who recognize them on 1040 Schedule C forms. There are exceptions to the liability such as if you personally hurt someone or you fail to withhold taxes for employees. You must take great care in keeping LLC and personal business separate, so this means you need to get a federal tax ID number, a business bank account, and keep things separated at all times. Forming an LLC requires you to file “Articles of Organization” or a “Certificate of Organization” with the local state government. In Maryland, you file Articles of Organization and pay a $100 fee.
Advantages: Offers protection against business debts and lawsuits as long as you keep things separate.
Disadvantages: Costs some money, different states charge different amounts for filing LLC registration papers. In Maryland, the $100 isn’t the end of the story, each year the state requires the business to file a personal property return, listing the personal property the business uses, which carries a $300 filing fee. LLCs are more expensive to maintain than Sole Proprietorships so be sure to check everything.

S Corporation

S Corporations offer the same liability protection as LLCs and additional tax benefits as well. The major tax difference between an S Corporation and a LLC is that the money paid out to shareholders is not subject to self-employment taxes. I am personally on the payroll for my business and paid a “reasonable salary,” with the balance of the profits paid out as dividends to me as the sole shareholder. The amount paid out as dividends is not subject to the employer’s half of Social Security and Medicare.

What is a “reasonable salary?” A “reasonable salary” is often defined as the amount you would pay someone to do your job in your company. As you know, Social Security withholdings are subject to a cap, you contribute 6.2% of your salary up to $106,800, any amount you earn above that is not subject to Social Security. Many places argue that the safest amount for “reasonable” is at the Social Security income cap, $106,800. If they want to argue that you should pay yourself more, the only benefit above that would be in the Medicare portion of FICA. However, you can set your reasonable salary at whatever you think is reasonable and people have successfully argued salaries of under $106,800 (let’s be honest, that’s really really high).

Advantages: All the liability protection that comes with LLCs plus a small tax benefit from not having to pay for FICA on income above what is paid out to me as salary.
Disadvantages: There is a lot more paperwork and expenses (incorporation agreements, bylaws, meetings, meeting minutes, payroll, etc.) and a lot more filings. You also lose access to a Self-Employment (SEP) IRA because you no longer have self-employment income. Your business earnings are “transferred” to you personally through a salary (W-2) or through dividends (1065 Schedule K-1), so you have no SChedule C income.

Should I Use a Filing Company?

Should you use a company like service to help prepare some of your documents? That depends. In Maryland, all it takes to incorporate an LLC is a one page form and a check. I certainly wouldn’t pay LegalZoom $149 for that (MyCorporation is running a promo where you can get free incorporation filings using code MYFREE). Check your state and municipality’s requirements when it comes to incorporating the type you want. If it’s really complicated, maybe you go with a service; if it’s really easy, do it yourself.

With the corporation, I had a business accountant at that point and they were familiar with all the necessary filings and requirements for S Corporations so I had them do it. If you’re going to go the S Corporation route, chances are you have the income to support a professional’s expertise and familiarity and have them do it for you. It’s better to pay a little to get it done right the first time than spend hours you probably need to devote to your business.

(Photo: barenboime)

Incorporating Your Business: Sole Proprietorship, LLC, or Corporation from personal finance blog Bargaineering.com.

That being said, there is a bit of organization within the chaos, and I’ll explain everything!

This is my main work area, with the bulk of my working papers to the left of my desk. The computer on the right, when on, is streaming CNBC online whenever I’m in the mood to be watching the news. The two monitors in the middle are where most of the magic of Bargaineering happens. The smaller one is a Dell laptop. The larger monitor is connected to the laptop and extends the screen so I have more room to work my craft. Somewhere underneath all those papers is yet a third Thinkpad that I use as my mobile workstation (for those keeping score, on that table, I have more computers than hands) And above all the computers are photos of my lovely wife.

By the way, if you work with computers all day, you should demand you get two monitors. There are studies that show having two monitors greatly improves your productivity and I couldn’t work as well without a second monitor.

This second shot is to the left of the one above and is mostly of my bookshelf, which is chock full of books. That stack of books on the ledge? Those are books that publishers sent me that I told them I’d look at. I will, eventually, get to reviewing them but I’m not a fast or a voracious reader so the backlog seems to keep growing. Five of those books are for the Jim O’Donnell The Shortest Investment Book ever giveaway so I want credit for them.

If you look behind them, there are about six bottles of scotch that we (really I) picked up after our trip to London last Thanksgiving. It’s all in the name of research for my scotch blog, Scotch Addict. (No, I’m not claiming them as tax deductions) Please note how sad the New York Mets hat is in the corner.

This is just a shot of the view out my window. I had to quit my corporate job to get a window office but it was totally worth it.

Photos of “Work From Home” Office from personal finance blog Bargaineering.com.

Multi-Level Marketing / Pyramid Schemes

Only two words are needed to describe Mona Vie, the brand name of the juice: pyramid scheme. Mona Vie is a “standard multi-level marketing program,” commonly referred to as a pyramid scheme, that relies on people marketing their products. Every time you make a sale, you earn a commission. The people who recruited you, and the people who recruited that person (your “upline”) into the program will also earn a commission. If you recruit someone into the program (your “downline”), you will earn a commission on their sales. The classic pyramid scheme.

There’s is nothing inherently illegal or disreputable about multi-level marketing programs. They aren’t illegal in the sense that Ponzi Schemes are illegal , it’s just that most implementations of MLM programs only really benefit the people at the top of the pyramid. This is because many of these programs have quotas that members need to sell and, when they can’t, members often find themselves buying the products themselves just to meet quota. Anyway, enough with the generalities, what’s specifically scammy about Mona Vie?

Mona Vie Scam?

What’s this Açaí berry juice product? It’s supposed to jump all over the antioxidant health craze people have been clamoring all over and Açaí berries are a very good source of antioxidants (most dark colored berries are, like blackberries, raspberries, etc.); that part is legitimate. The drink itself is 19 juices blended together.

There are two parts of Mona Vie that are suspect. First, many agree that antioxidants are beneficial for you but Mona Vie makes some big promises such as improving cardiovascular health, improving joint function, etc. It claims that it can cure many ailments because it contains components that have been shown to address some of them. Nothing they say is a flat-out lie but it’s like saying you can do laps in a kiddie pool. Possible? Yes. Probable? Not really.

The second part that’s suspect is the fact that the stuff is $30-$40 a ~26 oz. bottle and proponents say you have to drink 2 oz. in the morning and 1 oz. in the evening. Simple math shows that each month you’ll have to spend $120-$170 on the juice, or $1,500-$2,000 a year. If you want the benefits of these types of juices, you can get it for much much less. Oh, and any distributor has to buy 4 bottles a month. Sure you can sell them, but what if you don’t? You’re always on the hook.

Other red flags? Their CEO and founder, Dallin Larsen, is a 20 year veteran of the MLM industry and the FDA recently shut down a similar juice product operation, Dynamic Essentials distributed Royal Tongan Limu juice, for illegal business practices. Hmmm…

Finally, check out the MonaVie compensation plan, courtesy of The Fraud Files blog. There are all sorts of crazy exceptions and rules. For example, you have two legs on your “downline,” but are only paid on commissions based on the shorter of the two. It gets really complicated, really quickly, and that certainly doesn’t bode well for people who sell the stuff.

The bottom line is that you’re overpaying for a product and, if you’re a distributor, you have to buy 4 bottles a month. Do you think it’s a scam? (this site, Purple Horror, documents a lot of Mona Vie’s shenanigans)

(Photo: wmode)

Mona Vie Scam? The Magical Acai Berry Juice Product from personal finance blog Bargaineering.com.

I don’t know if it’s come through in my writing, or if you’ve read long enough to tease this out, but I’m a predominately conservative person with regard to risk (not political leanings). However, given the right opportunities, I’m willing to make aggressive moves that some would consider extremely risky. Resigning my full time position to pursue what is essentially a freelance writing gig ranks as extremely risky in my pantheon of risk. While you’re never 100% safe in your job, it’s certainly more stable than working for yourself. Being self-employed has its benefits, stability certainly isn’t one of them. This article will detail how I mitigated those risks, as best I could, and how I prepared to become a professional blogger.

This article is pretty long and might not be all that useful to many people, but several other bloggers and my friends have asked about how I prepared to become a freelancer/problogger so I thought I’d put it all together.

As an aside, I often joke that I enjoy lumping in all my major life decisions in one small time frame. Two years ago, I proposed to my girlfriend, now my wife, and left my first job within a week of one another. Proposing easily ranked as the more significant of the two (yay! I love you honey!) but leaving my first job, and all my friends there, was difficult but a necessary step in my career development.

I became a problogger four days after getting married. I quit my job four days after I got married, two more important life “decisions” in the span of a week. I figure this way, if things go badly, I won’t know which decision to blame it on.

Passion is Paramount

I totally agree.

You have to enjoy your project so much that you’d rather work on it than watch TV or play video games. If that’s not the case, you shouldn’t become a problogger.

I really enjoy personal finance blogging. I’ve been doing it for over three years and I still enjoy writing for the site every single day. I started blogging because I wanted to talk to people about money management. My friends didn’t care and I saw a handful of “blogs” online about personal finance. I figured I’d do it too. My interest in money management is what I’m passionate about and that’s why I blog about it. The money this site generates is great but as anyone who has worked in a dead-end soul-sucking job can attest to, money doesn’t make you happy… it just prolongs the agony.

Establishing A Plan

Enough with the emotional rah-rah aspect of problogging, let’s get to the finances. The steps I took in establishing my plan apply to whether you’re going to be a freelance consultant or a professional blogger. The plan identifies the aspects of your full time job you will be replacing with your own business.

Step 1: Establishing Income Stream & Growth

Since we’ve already established that you are passionate about your new work, the most important aspect of your job is the paycheck. With your old job, you had a stable income and growth potential. With your new business, you’ll have to establish a stable income stream and identify areas of growth. Reading sites like Problogger will give you an idea of the various ways you can monetize your site from the ubiquitous Google Adsense ads to more targeted affiliate programs. Once you’ve identified potential streams, you have test, test, test those methods. Some sites work well with Adsense, some work better with affiliate programs, you have to constantly be testing monetization methods to see what works for you.

The key here is to establish a plan of attack, implement it, take notes, and adjust it based on your performance. The Adsense ads you see on the left have been optimized for the highest click through rate, that’s why the URLs are red (I’ve tried blue, green, black, and red – red had a much higher click through rate than green, which beat blue and black). Keeping notes is crucial.

If you’re not a problogger and going into freelance anything, you have to take the same steps. Identify your areas of growth and establish a plan for that growth. If you’re offering a new service, how will you get your name out there? If it’s a local service, consider joining the local Chamber of Commerce and networking with bankers, accountants, and lawyers. Those are the folks who are connected to a wide variety of businesses, they can get you in touch with people who may want your service. Consider offering the service for free to a big name, essentially bartering your services for their advertising. Once you have a plan, execute it, track it, and adjust it to how it performs.

Step 2: Health Insurance

When I left my job, I was able to get health insurance through my wife. However, I did do research on independent health insurance policies to factor in the costs involved should my wife ever leave her job. The two places I checked was the Freelancer’s Union health insurance plans and eHealthInsurance. I chose those two because Freelancer’s Union seemed like my best shot at group health insurance (they only offer plans from UnitedHealthcare’s Golden Rule Insurance Company) and eHealthInsurance seemed like a non-spammy health insurance search engine (I see them mentioned on Yahoo! Finance and their results returned big name insurers I had heard of like BCBS, Aetna, Kaiser Permanente, etc). Since then, I’ve discovered you can often get health insurance through your local chamber of commerce, if you’re a member, though I never looked into it.

All the plans were in the $150 range, according to the results of eHealthInsurance’s search, but I never dug any deeper because I planned on using my wife’s insurance. My plan was always that the insurance would protect against the catastrophic, rather than the routine, so my searches always bore that in mind.

Step 3: Retirement

The last important aspect of my full time job that would be replaced by problogging is your retirement. You may be giving up a pension (defined benefit plan) and you’re probably giving up a 401(k) or 403(b) (defined contribution plan), so you’ll want to have something to replace it. Fortunately there are many options to the small business owning including but not limited to SEP-IRAs, Keoghs, Solo 401(k)’s, and the like. I guest wrote a post at Anywired about retirement plans and freelancing that discusses this topic.

Contingency (Backup) Plan

I’m in my late twenties, married, with no kids. In the next forty years of my adult working life, I will have to generate enough income to raise a few kids, to include paying for all or part of their college education, go on a few vacations, and have enough so that I can retire from my adult working life. Do I see myself being a professional blogger for forty years? Do I see myself writing for a living for the next forty years? I don’t know.

I also don’t know if this business is sustainable for forty years, or even four. I don’t know if I will be able to keep up with the changing environment or if some unforeseen event changes everything. This underscores the importance of having a contingency plan in place. My contingency (backup) plan has three important parts and kicks in when income dries up to a trickle.

Part 1: Contingency Plan Fund

Much like how an emergency fund backs up your full time job in the event of an emergency, which could include job loss, the contingency plan fund contains a year’s worth of my full time job’s salary. When you have a full time job, your employer has some flexibility in weathering the changing market cycles. When you are your own business, you have to weather the changing market cycles. Having a contingency plan fund offers you the ability to make smart decisions about your business even if the times are bad because you have money in the bank. If things go south, you’ll feel the pressure anyway. You don’t need added the financial pressure of a dwindling bank account to make things worse.

How did I arrive at a year? I figure that if things decline and I can’t reverse it in a year, chances are I won’t be able to and I should go back to doing what I was trained to do. I think a year is an ample amount of time. You might think that six months is more your style, if so then make your fund six months. The point is to have a buffer beyond your emergency fund strictly for your business.

Part 2: Diversify Your Income

This is a strategy that everyone should employ but it’s especially poignant for freelancers. Whether it’s investing in real estate or other income producing assets (dividend paying stocks or funds, other small businesses), putting your money to work for you in a separate industry is smart. Relying on a single source of cash flow is dangerous, be it Adsense or Corporation XYZ, so making smart investments is always important. How do you identify those smart investments? That’s outside the scope of this article but I personally invest in stock market investments that provide some additional income.

Part 3: Resign Amicably

When you say good bye to your employer, do so amicably and with their interests in mind. For some, this is code for – “you shouldn’t burn bridges.” While it’s important not to burn bridges in case you want to return, I think that you should always try to end any relationship amicably. It doesn’t matter what you’ll be doing on your own (my blog has nothing to do with what I used to do full time), but the industry you’ll be leaving is probably your best shot at recovery should things not work out.

I’m by nature a friendly guy so I’ve maintained friendships with my co-workers and we often talk to each other. I invited a whole bunch to our wedding, not because I thought that one day I might have to return, but because they were and still are my friends. However, if one day I would need to find a job, by leaving amicably I felt as though I still have the opportunity to prove I can return (that is, instead of just submitting a resume into a drop box, I’d actually get it in front of a person).

That’s It!

With a plan forward in place, including a plan for the “what ifs,” I took the plunge six months ago. The hardest part about doing it wasn’t the numbers or the plan, it was that I was afraid. I was afraid of what would happen if things didn’t work out. Would I have arrested my career development? Would I burn bridges simply because I left? Then I decided that my analysis was correct, my planning was sound, and ultimately I couldn’t let fear make decisions for me.

The last six months, it’s been an exciting ride and I’ve enjoyed every minute of it. If you’re considering this, either problogging or freelancing, or just want to say hello, send me an email and we can chat. There’s certainly way more to going your own but these were the considerations I contended with before I went I did it.

(Photo: arbron)

How I Prepared To Be A Freelancer Problogger from personal finance blog Bargaineering.com.

So, was I destined to be a rockstar or would I be content as one of the rest? I, of course, thought I was going to be a rockstar. As my wife says jokingly, and often, I probably would do well to sell off some of my self-confidence (she used another word) for my sake and hers. Despite the long odds, I left my job, and the predictability and the comfort, and haven’t looked back. When I left, I was scared. I was really really really scared.

To give you an idea of how scared, it was a lot like when I climbed up the two and a half story ladder to inspect our roof after it was replaced. In the case of the roof, I really had no choice. There’s no way in the world we were going to spend four grand on a roof and not inspect it with our own eyes (I did and the roof was as expected) but in climbing up that roof I learned one thing: things are never as bad as you think they are. As I climbed the ladder, I quickly realized that the most unstable point was about the middle. Once I got past the middle, the roof helped stabilize the ladder and it stopped bowing and shaking as much. Fear sharpened my senses, made me more cautious, but it didn’t change my decision. That’s what fear should do.

So, here I was leaving a job that I liked in order to do a job that I also liked, but one that lacked as much predictability and comfortability, if that’s a word (it’s not). I was so afraid of pulling the trigger, despite all the signs saying it could be possible, that I just put off thinking about leaving for at least six months. My wife and I talked about it off and on and she was supportive, but it took an epiphany before I could think about it rationally.

I realized I was more afraid of working the next forty years of my life and wondering “what if?” than I was of blogging full-time and failing. Then I used my fear of failure to hone in on a plan that would, at the very least, give me confidence that everything is progressing as it should be.

So how are things four months later? I love it but it’s still scary. There’s a certain bit of comfort in taking direction from someone else. If your boss tells you to do this and it’s the wrong thing (wrong as in bad decision, not ethically wrong), then the responsibility and the blame falls on your boss’ shoulders. If you are the boss, the burden is on you not to mention the burden of figuring out what it is you’re supposed to do. That freedom is very exciting but also very demanding.

I’d also like to thank all the folks who read this site regularly. It is because of you that I was even able to have a decision four months ago and you all keep me honest. Much thanks. Please continue to email me with comments, questions, sites you’ve found interesting, articles you thought I should check out, anything in the world, I’ll read it and try to get back to you.

So moral of the story, fear isn’t a reason not to do something or not to consider something. This blogging thing may not work out in the end but at least I’ll have tried, right?

Don’t Let Fear Make Decisions from personal finance blog Bargaineering.com.

If it’s in writing, you can study it and ensure it’s accurate. While you can’t ensure completeness, you can at least be sure that whatever is written down (and agreed to) is true and accurate to the best of your knowledge. Maybe there was some miscommunication or some misunderstanding, that can be clarified once the agreement is put in writing and both sides can review it.

Unless you have a photographic mind and everyone believes your memory to such, you can’t remember the exact terms of something you agreed to a year ago (or five, or ten). Let’s be honest, do you remember the exact terms of any of your leases? You probably remember how much rent was, when it was due, how much your security deposit was, and what you needed to do to get it back. Was it due the 5th of the month or the 6th? Don’t remember? That’s okay, that’s what the lease is for! You can’t remember everything and you can’t trust your memory to be 100% every single moment. You also can’t force the other party to trust that you remember everything. If you have it down on paper, you’re far better off.

Unless you use an attorney to draft up your contract, any attorney will be able to find a way to nullify your agreement. I have no background in law, I only know a handful of lawyers, but I believe that any personally crafted legal document is probably not going to stand up against the carefully scrutiny of a trained lawyer. That being said, unless you’re willing to hire an attorney on retainer to review every agreement you make, it’s more important that you build up the relationship that is clarified by a contract instead of relying on a contract to force a relationship. Also, unless you’re willing to hire an attorney to tear apart an agreement you made, you need to stress the relationship and not the sheet(s) of paper.

Contracts don’t exist in a vacuum and people have long memories and big mouths. Let’s say you screw and swindle your way out of a contract because the language was ambiguous, people will remember that and likely tell other people. If you promised to pay someone $50 and renege, people will remember for a long long time. It may not manifest itself verbally but you can bet anything that it will manifest itself on some form or another.

Build the relationship, clarify with a contract, but leave the lawyers out of it. I want to leave on this note: The contract isn’t about trust and shouldn’t be about trust, it should be about the relationship and clarifying an agreement. If you don’t trust the other party, don’t bother with a contract unless you are willing to hire yourself a lawyer and they sure would love that!

Contracts Are About Understanding, Not Trust from personal finance blog Bargaineering.com.

Here were the cards I looked at and what my thoughts were on each:

American Express Business Gold – They are arguably one of the bigger names in the business card landscape because so many companies already use American Express and because of the $250 promotion. The Business Gold card also opens up the door to American Express Gold Card Events and the AMEX Membership Rewards program but comes with a $125 annual fee. The biggest draw of this card is that you can take advantage of AMEX’s concierge type program but I don’t really need that sort of service so I can’t really appreciate it.

The Best Business Credit Card For Me from personal finance blog Bargaineering.com.

Jim,

Is it illegal to charge business and personal charges on the same credit card, if we pay each item separately from appropriate accounts? I have been doing this for years, and my accountant just informed me that it is not legal, which I think is wrong information, but cannot locate a place to find the answer — can you lend me some correct facts?? thanks — Lauren

I’m not a lawyer and so I can’t be certain of the legality but I don’t see why it would be illegal for you to charge business expenses on your credit card. Consider the situation where you’re an employee and you buy something for your employer. When you do that, you probably submit an expense report and your employer pays you back some time later. If the mixing of business and personal charges on the same credit card were illegal, then this wouldn’t ever happen.

Now, one reason why you wouldn’t want to mix the two is when you have a limited liability corporation (or some other entity) and you are trying to shield your personal assets from your business liability. In that case, you have to clearly delineate between your business and personal finances – mixing the two will blur that line and expose you to personal liability if something happens in your business. So, while charging business and personal to the same card is not illegal, it’s generally considered a bad idea because it takes away the only benefit an LLC provides – personal liability separation.

Anyone else care to weigh in?

Legality of Mixing Personal and Business Charges from personal finance blog Bargaineering.com.

Is It Actually Low Supply?

You know the Apple iPhone that was just released? People were standing in line to get one… but they could’ve just gone to the Apple Online Store and ordered the 4GB version for $499 and the 8GB for $599 – shipping in 2-4 weeks. It’s not like the Nintendo Wii which you still can’t buy, unless you want to overpay for a bundle, without calling up stores beforehand to check on their shipment schedules. Check with the manufacturer to see if they’re actually going to be in low supply or not…

Is It Worth It?

First you must gauge the actual demand, check eBay prices to see how they stack up and take a 20% premium off the closing prices. The 20% is to discount the hype, pre-release promises to deliver, and to account for some of your transaction costs (sales tax, gas). If it’s still worth it for you to stand in line for however many hours before the store opens, you better get a comfy chair read and some sandwiches.

Don’t Overpay

Check out this hilarious story about a woman who brought $16k to buy out a store’s supply of iPhones, paid the first kid $800 for his spot, and then found out she could only buy one phone (I thought the limit was 2, but it certainly wasn’t unlimited). She took a nearly winning proposition (8GB goes for around $700 on eBay, so she’d make maybe $150 or so after everything) and made it a losing one by paying out all these unnecessary incidental costs. The kid also got a phone too plus a few hundred bucks.

Don’t Buy On Secondary Market

So you see that hot gadget on eBay or Craigslist at a steal of a price and you figure you can turn around and resell it for a quick profit right? Avoid the temptation! Either something is wrong with that particular item or you’re going to get scammed, the seller has as much information as you and you’re likely walking into a bad scenario. If you want to invest in any secondary market, at least let it be the stock market so that when you lose money no one will make fun of you.

Sell It Immediately

Do not wait. Do not pass go. Sell it. Once you get it, get your butt on eBay or Craigslist and sell the sucker as soon as possible. eBay is nice because you can set a reserve and if it isn’t met to your satisfaction, you can simply return the product to the store and you’ll have lost nothing but eBay listing fees. Craigslist let’s you avoid all the fees of eBay, which can be hefty, but you do have to deal with people trying to wheel and deal and the occasional no-show at meets.

Why do I recommend selling it? There’s a reason why there’s a saying, “A bird in the hand is worth two in the bush” and that’s because it’s true more often than it is false. Think of all the people who could’ve sold a PS3 for over a thousand bucks when it was first released but decided to wait until Christmas because they thought the demand would spike along with prices. Unfortunately that didn’t come to fruition… take the money now.

Warning: The Craigslist Sale

If you do arrange a meeting, be sure to do it in a public place (not your house) and don’t bring the product with you, leave it in your car that is also in a public place. If you have a friend who you don’t mind imposing on, get them to come with you. Only take cash – accept nothing else. There are many unsavory characters who would love to come to you house or a dark alley, beat the crap out of you, and steal that gizmo. Be very very careful with this.

There you go, enjoy the life lessons from a recovering eBay junkie, go forth, and play the eBay High Demand Gadget game and rake in the cold hard cash!

Playing the eBay High Demand Gadget Game for Fun and Profit from personal finance blog Bargaineering.com.

When you start the book, you might be tempted to think that You Call The Shots will be just one big lovefest about Cameron Johnson, how awesome he is, how enterprising he was, and how just gosh darn great it was that a young guy like him was able to do so much. In fact, the beginning of the book goes pretty heavy on the credentials, which is a fair way to start a book if you think that you’re going to learn all the great business ideas from someone in their early twenties, but I see the value of the book elsewhere.

You Call The Shots breaks down your traditional thinking about working, earning a living, and making money by taking you along a journey started by a kid who didn’t know he wasn’t supposed to be successful starting businesses online. Cameron Johnson isn’t some child prodigy who was given a head start either, he started as a kid not willing to fit what society thinks children should do, and he just did whatever he wanted – and it worked. He became a sales manager at his family Ford dealership through hard work, not nepotism (in fact, he said that being the son of the owner probably made his ascension much harder, which is probably right), and he started multiple businesses just because he had an idea and the moxie to execute.

Sure, the book offers 19 secrets to entrepreneurship (and they are excellent secrets framed with even better anecdotal recounts) and it follows the wild ride that was and is Cameron Johnson’s life, but the value is really in that it shows what happens when you’re willing to ignore what other people think you should be doing and doing that which you love.

I really enjoyed reading this book and it’s one of the few books that I’ve reviewed where I’ve read it from cover to cover, in part because I identify with him and his personality and also because I’m a sucker for these anecdotal books. If you are the enterprising, entrepreneurial type, I strongly recommend picking this book up and reading it (and to date, I don’t think I’ve given as strong a recommendation for any book I’ve reviewed).

Review: You Call The Shots by Cameron Johnson from personal finance blog Bargaineering.com.