Today, I present an entry in the Financial Plan Writing Contest. Just a reminder that you can win $250 by participating.  Here are the brief guidelines, to read the full description of the contest, click the link above.

• Answer the question: What is your financial plan for the next 10 years?
• Be sure to to hit on things such as income, job security, budgeting, expense management, real estate, investing, retirement planning, etc. – the more detailed within specific areas the better!
• Be sure to discuss how the economy might affect your plan – what if we fall into a double dip recession?  Or worse, a depression?  Or inflation?  What if you lose your job? What are you doing to prepare for any economic scenario?
• Be specific about certain financial goals you might have
• Include your age and your age-specific concerns & goals
• A minimum of 500 words is required – again, more detail improves your chances of winning the contest!
• Send your contest submission to kevin (at) 20smoney (dot) com with “Writing Contest” in the subject line

You still have time to submit your entry to the contest!  Be sure to enter soon!

My ten year financial plan is primarily based on three goals.

1. Boost my income
2. Pay off my debts
3. Invest in other assets

I will explain each of these goals and how I’m going about accomplishing them.

Boosting My Income

My wife and I are both working and have fairly secure jobs.  We make pretty good money for our ages (27, 28) and are able to contribute to 401(k) plans and also towards other savings accounts.  Since my job is in the computer science field, I also use my skills to earn a few hundred bucks a month on the side doing graphic design and other web design stuff.

By being fairly frugal and having modest living expenses, we’re able to put a good deal of money away each month (anywhere from $1,000 to $1,500) – this doesn’t include the 401(k) contributions also.

Our goals for income are to continue to grow in our careers and hopefully receive some promotions and raises.  Additioanlly, I’m hoping to continue to develop my web design business to something more sustainable and consistent.  I believe in a year or so, it will bring in at least $1,000 each month with minimal additional hours of work added.

As you can tell, if we keep our living expenses consistent which we will definitely do, unless we have children soon (we’re planning to wait a several more years), in a year or so we should be able to stash away $2,000 to $2,500 each month in addition to the 401(k) contributions toward our retirement.  So, what do we do with that money each month?

Pay Off My Debts

I’ve already paid off my student loans.  We’ve also paid off our cars, so the only thing left is our mortgage.  We currently owe about $160,000 on our home.  With our current income plan, we believe we can pay off our mortgage within 7 to 8 years.  Since our 401(k) will continue to fund retirement, and we have a decent emergency fund, we decided to start focusing on getting rid of our mortgage.

By killing off our mortgage, we will be completely debt free and we will also significantly decrease our monthly living expenses. In 8 years or so, when we are mortgage free, we will be able to invest several thousand dollars every month into another asset as well as other things we will consider such as our future children’s education funds.

While we could speculate on other investments and higher returns, we have chosen to go the route of paying off our mortgage for several reasons.  First, it’s a guaranteed return.  Second, we want to be debt free.  Third, we want to have very low living expenses in the future.  And, lastly, it will just feel great to not have to write checks to a bank!

Invest In Other Assets

With zero debt and an above average income, we will be in great shape to generate significant wealth for our future.  We will be able to accumulate cash quickly without a mortgage payment every month.   As we get closer to this time in our lives, we will begin to research potential investment opportunities.  For example, we might invest in another piece of real estate (and then do the payoff process again), or we might spread it out over a couple areas.  The goal though will be to generate nice returns with low to medium risk.

Long Term Plans

With this plan, we should be on track to be financially independent well ahead of the typical person.  Whether we officially “retire” early or just move towards more meaningful work or goals of ours, we plan to have much more flexibility and freedom in the future.

Other Considerations

A few risks to our plan might be a major depression or major inflation.  While most of these major challenges are things we can’t prevent, we think our strategy will allow us to weather such storms fairly well as we are focused on modest expenses, paying off debt, and saving money for our future.  If any major macro economic changes occur, we will modify our plan as necessary.  No plan is set in stone, but we feel like we have a good starting point with what I’ve outlined above!

Thanks and I hope your readers have good feedback!

Submitted by Jim

Popularity: 3% [?]

1759Comments (0)http://20smoney.com/2010/02/26/jims-10-year-financial-plan/Jim%27s+10+Year+Financial+Plan2010-02-26+10%3A55%3A18Kevin

As of writing, we’re down over 150 points on the Dow today.  We’re getting some more exciting moves in the market.  This will make several days in a row of near 100 point moves or over 100 point moves.  While nothing can really be infered at this point, it is definitely more exciting for those of us who watch the market on a daily basis and definitely those of us who play the market on both the long and short side.

I tend to believe that the market has topped for the near term with the Dow topping out in the 10700 area earlier this year, but that could easily change.  There is a reckoning coming, but you can’t underestimate the ability to hold off that day by the powers that be.

Popularity: 3% [?]

1778Comments (0)http://20smoney.com/2010/02/25/market-volatility-this-week/Market+Volatility+This+Week2010-02-25+16%3A06%3A09Kevin

I’ve looked into buying physical gold and silver recently, and have come to two realizations:

1. Finding physical gold and silver is not easy, which shows the demand is high – take that for what it’s worth
2. Owning physical gold is about security, not speculating or trading

I’m not going to comment on the first realization even though I think it is an important thing to take notice of.  Today, I’m going to focus on why owning gold and silver is for security.

First off, gold and silver prices are very volatile.  Trying to speculate where the prices are going is a waste of time.  Additionally, speculating about inflation vs. deflation is also a waste of time, because we could have both or one or the other, the result doesn’t concern me.  What does concern me is that I am more secure by having some holdings of physical gold and silver.

Now, when I say own physical gold and silver, I’m referring to the physical stuff that you can hold.  And I’m talking about having it in your house, hidden, accessible to only you.  Safety deposit boxes don’t count.  This is the security I’m aiming for.

Think about owning physical gold and silver as just a way to enhance your diversification.  If the dollar continues to weaken, which has been the trend, we will be not hurt as badly if we own gold and silver.  The reality is that gold and silver will have value today, and hundreds of years from now.  I can’t say the same about the U.S. dollar.

My advice is to buy some physical gold and silver, you determine how much, but to definitely buy some and then hang on to it.  If prices become more attractive, maybe pick up a little more.  Again, just hang on to it.  It’s security.  It’s insurance. Do not stress over the daily spot price of these metals.  Just relax knowing you have a little more security than you did before.

Popularity: 5% [?]

1757Comments (1)http://20smoney.com/2010/02/25/holding-physical-gold-is-about-security-not-speculation/Holding+Physical+Gold+Is+About+Security%2C+Not+Speculation2010-02-25+09%3A29%3A02Kevin

I’ve been saying for about a year now that the recovery in this country is not a full, robust recovery (if a recovery at all).  The economy has basically been split into two economies: 1) the Wall St. and big corporation economy and 2) main street, small business, real economy.  The former economy is thriving with cheap money and government stimuli while the latter economy continues to die.

In a recent speech, Greenspan is calilng the U.S. recovery unbalanced.  According to the article:

Former Federal Reserve Chairman Alan Greenspan said on Tuesday the U.S. economic recovery was “extremely unbalanced,” driven largely by high-income people benefiting from recovering financial markets and large corporations.

This trend will continue.  The only way the trend breaks in my opinion is if the beneficiaries of the current policies somehow take a hit from a withdrawel of stimulus and/or an increase in debt losses.  Or, other words, until there is another leg down in the broad economy.  The alternative would be if the struggling real economy rebounded to catch up to the large business / Wall St. firms.  I don’t see that happening.

Popularity: 5% [?]

1775Comments (0)http://20smoney.com/2010/02/24/greenspan-on-board-with-two-economies/Greenspan+On+Board+With+%22Two+Economies%222010-02-24+18%3A19%3A34Kevin

I recently received an offer to buy my blog for $4,000.  The person mentioned it’s negotiable, so let’s say I could have sold it for $6,000.  I refused.  You may think that I should have sold it and then just plowed my efforts into a new blog, but I decided that $6,000 (before taxes) really doesn’t “move the needle” enough.  I mean sure I’d love to have a few more grand in my bank account, but I really haven’t worked hard at this blog for a couple years for a few grand.

Most bloggers and internet entrepreneurs work hard for a larger pay out down the road or some kind of stable decent passive income.  For me, my goals here are to either establish an income stream that is generated approximately $1,000 and up per month and/or potentially sell the website itself in the tens of thousand dollar range.  Will I get there, we’ll see.

A general note on selling a blog or website, but it seems like many times companies or individuals will want to buy a blog or website if it ranks high for a specific keyword.  They can then leverage such a position for their business use.  Since I really don’t rank that high for that many keywords other than “20s money” or “20smoney” I haven’t received any lucrative offers based on this idea.  Maybe I should have focused more on naming my blog after a lucrative search term.

It is interesting to receive your first offer to buy a business or website, even if it is only for a few grand.  Hey, I like the direction at least.

Popularity: 5% [?]

1754Comments (0)http://20smoney.com/2010/02/24/an-offer-to-buy-my-blog/An+Offer+To+Buy+My+Blog2010-02-24+10%3A06%3A06Kevin

If you only follow the surface level headlines in the economy and in the stock market, you would probably think things are roaring in the economy.  Reading headlines like Target’s profit rises 53.7% would probably make you think that things are just wonderful in the business world and we’re recovery like crazy!

While earnings beats are definitely a positive since they do indicate earnings growth, we need to remember that these are typically year-over-year comparisons and over the last few quarters, we’ve been comparing earnings with earnings from late 2008 and early 2009.  These comparisons are for the most part, very easy “beats”.  The more important earning announcements will come in late 2010 and early 2011 as we compare earnings to recent quarters.  These future announcements will tell us much more about the strength of the recovery and maybe more importantly, the sustainability of the recovery.

So, as you follow your favorite stock or your favorite company, earnings growth is a good thing even when compared to the depressed quarters of a year ago, but don’t go bananas and keep these reports in perspective.  The second half of this year and early 2011 will be the much more indicative results, whether that will be bullish or bearish remains to be seen.

Popularity: 3% [?]

1772Comments (0)http://20smoney.com/2010/02/23/putting-the-earnings-beats-in-perspective/Putting+The+Earnings+Beats+In+Perspective2010-02-24+00%3A58%3A25Kevin

Today, I present an entry in the Financial Plan Writing Contest. Just a reminder that you can win $250 by participating.  Here are the brief guidelines, to read the full description of the contest, click the link above.

• Answer the question: What is your financial plan for the next 10 years?
• Be sure to to hit on things such as income, job security, budgeting, expense management, real estate, investing, retirement planning, etc. – the more detailed within specific areas the better!
• Be sure to discuss how the economy might affect your plan – what if we fall into a double dip recession?  Or worse, a depression?  Or inflation?  What if you lose your job? What are you doing to prepare for any economic scenario?
• Be specific about certain financial goals you might have
• Include your age and your age-specific concerns & goals
• A minimum of 500 words is required – again, more detail improves your chances of winning the contest!
• Send your contest submission to kevin (at) 20smoney (dot) com with “Writing Contest” in the subject line

You still have time to submit your entry to the contest!  Be sure to enter soon!

First off – my bio – I’m a 26 year old Canadian. I’ve been married for almost 2 years, and we are expecting our first child in the middle of March. We currently have no debt other than our mortgage (we both worked multiple jobs to eliminate the small amount of student debt my husband had, and establish a down payment for our house).

I want to establish a small side income. My husband and I both work for the same company – a government funded non-profit. It’s a great place to work, however, our situation has some draw backs. First, it is a unionized environment, and my husband is a part of the union (I’m a non-unionized management employee). Don’t get me wrong about unions – they serve their purpose and can contribute effectively to the organization as a whole, however, if there is a strike, we lose one income during the duration, and strike pay is hardly anything; we have a contract renewal in 2011, so there is a possibility that a decrease in come could be coming for a little while (last time, negotiations were close – the contract was accepted by 1 vote.. and with the current economy and budget cut backs the company has had to make, not meeting the financial demands of the union is a possibility). Second, there is the possibility of a merger with similar corporations, which would most likely result in my job being lost, and possibly my husband’s as well, as he has the lowest seniority in his department. A side income with some consistent pay would help to buffer us financial against the negative situations that could happen, and if nothing bad happens, then it would provide us with move money to reach out financial goals sooner.

Finish my degree/get a promotion – with the succession planning that was done, I’m currently in line for a promotion in about 5 year, which would basically double my current salary. There is currently no where for my husband to move up within the company, our salaries are standard based on job classifications & experience (therefore, no getting a raise by asking or through performance), so any major pay increase is coming through me. My current degree is in a field not related to my current work, so I’m working on a second degree in the field I work. The promotion is dependent on me getting this degree (among other things).

Plan better for my next maternity leave. When I take my year off for maternity leave, my pay will be cut in about 1/2 (I get 50 weeks of maternity benefits through the government Employment Insurance). When we started trying for a baby (right after our wedding in 2008), I was told I should be able to get pregnant very fast… and I didn’t. They said that if it took more than a year, I need to come in for testing because something was most likely wrong. I had been very good, putting away money for buffer myself against the loss of income that comes with maternity leave, but after 11 months of trying, I figured something was wrong, and I spent it the money I had been saving (and by spent – I mean I used it as a prepayment for our mortgage, and spent a bit on our honeymoon, which we took around our 1 year anniversary). While on our honeymoon, I found out I was pregnant.. and my savings were gone. We plan on having a second child within about 2 years, and I’m going to start planning for it now, that way I have time to save the money (and I won’t be tempted to spend it this time since I know what can happen!)

Get my savings organized and automated. Currently, I’m not the saver I want to be. I save as much as I can that’s left over after the bills are paid – it’s a bad way to too things. I want to have my RRSP fully funded every year, as well as my TFSA, – same goes for my husband. Also, we want to get up educational savings for our children. My parents fully funded 4 years of post-secondary education, as my father really wanted to go to school, but couldn’t because of financial reasons, and didn’t want us to suffer the same way he did, or start our adult life out with piles of debt. My husband has to fully fund his education, and he sees the benefits of not having the debt load, and being able to give your child a helping hand to start. I want to increase the size of my emergency fund to $15000 (we live in a small town, so cost of living is pretty low). We need will need to get a second vehicle (one with 4×4 for the winters, as well as to provide room to our expanding family), and our currently vehicle will most likely need replacement, or have to have major repairs on a more regular basis (it’s a 2001, and the rough roads and winters can do a number on it). I want to have about 1/2 of the money ready for the purchase of a second vehicle. I want to set up a schedule and have a certain amount set aside from each pay for my various savings goals, so that it’s steady and predictable. I want to be able to think less about my finances..

Get rid of our mortgage. Currently, with our increased rate of payment, we have less than 6 years left on the mortgage.. I’m hoping to have it gone by the time I turn 30 (I hate it, and I want it gone). I haven’t actually allowed myself to keep any raise I have received in since I finished school in 2006. I have either increase my retirement plan contributions, or increased the amount I pay on the mortgage, and I do this right after my first increased pay check. That way, I never get “lifestyle inflation” because my automatic bills increase to leave me with the exact same amount of spending money that I had before. No mortgage will make the $15000 emergency fund very substantial for our household, as well as allow us to contribute more to reach our savings goals faster.

To summarize – my 10 year financial plan is to eliminate the mortgage, finish my degree, get a promotion to increase my income, set up various savings goals and automate my savings plan, as well as establish a back up income in case my husband or I (or both) lose our jobs.

Submitted by Kim

Popularity: 3% [?]

1763Comments (0)http://20smoney.com/2010/02/23/kims-10-year-financial-plan/Kim%27s+10+Year+Financial+Plan2010-02-23+18%3A55%3A21Kevin

I enjoy checking out thriving websites that are bringing in decent revenue for the website operator.  As you know, generating income-replacing money from this website and my other websites is a huge goal for me.

Today, I want to take a look at MakingMoneyMommy.com.

Advertising Revenue

After looking around the site, you will see that the site has pretty significant advertising on it.  If you take a look at the top right portion of the page, you will see six links.  These links go for $500 a month, which means those links alone bring the owner $3,000 every month.  Whew!

Combining the other advertising and the email list advertising that they most likely engage in, I would imagine they do anywhere between $4,000 and $6,000 from private advertising.

Based on the traffic numbers, I could envision another $500 – $1,500 a month in Adsense revenue.

Based on these rough estimates, the site looks to be generating anywhere from $4,500 to $7,500 a month in advertising dollars.  Pretty awesome.

There might be other revenue for the site through affiliate-like sales.  I did not do enough research to determine this.  Either way, we’re looking at a great income stream.

Key Traffic Stats

Unique Visitors according to Compete: 95,000 in January 2010

Alexa ranking: 52,800

Page rank of 4 – I imagine they got dinged by Google for having text link ads, so it’s probably naturally a page rank 6.  This doesn’t really reflect traffic, but it does help us determine it’s ability to drive search traffic.

How Did They Do It?

So, how did this website get to be such a money maker?  Well, it looks like the website has positioned itself nicely in the “work at home” niche.  This is a very popular and widely search topic on the internet.  Even more specific, the site has marketed itself as information geared towards moms.

It looks like the operator, Kelly Land, has received some visibility with news outlets such as Fox News and some local news affiliates.  These of course can do wonders for promotion and traffic.

By being an authoritative source in the “work at home” sector, this website is positioned to benefit greatly from advertisers looking for visibility.  I imagine many of these advertisers advertise exclusively on the internet, making this website a logical go-to candidate.

I also want to note that this website doesn’t do much for me with regards to design and even content.  Sure there are plenty of resources, but the site’s design doesn’t make it that easy to find them.  Also, I don’t believe that this site pumps out continuous content like an active blogger, although there is a separate blog section of the site.

What To Learn From This Example

1. Positioning your website as a major authority in your specific niche or field is the most important thing – note that this does not necessarily mean ranking high for keywords on search engines – I typed in search terms like “work at home”, “work from home”, “work at home moms” and this website was not on the first page of any of these results.
2. Your niche or your topic can determine the advertising dollars.  For example, the work at home field is full of advertisers looking to market their product or opportunity.  For me, I think the field of finance / money is also full of advertisers.
3. You can get creative to bring in high dollar advertisements.  Doing the “spotlight” ads in the header on the website is prime real estate and thus brings in big bucks.  Most websites don’t consider ads in the header.
4. You can make good money online!  This example shows that websites that aren’t that impressive, but that have been established as leaders in a field can bring in major dollars.  Be encouraged and work hard!

Popularity: 4% [?]

1752Comments (0)http://20smoney.com/2010/02/23/online-income-case-study-moneymakingmommy-com/Online+Income+Case+Study%3A+MoneyMakingMommy.com2010-02-23+10%3A24%3A49Kevin