Financial stuff

Expanding My Online Empire

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My online income for 2009 was less then in 2008 but my income for this year is already my best ever with a few months to go.  I am not really sure why I am seeing such a nice improvement in income this year but I think it is a combination of putting in more work and luck.  I don’t really know a lot about making money online.  I barely have enough technical knowledge to write a blog but by sticking with it I have started to get some good results.

My online income is still not quite enough to live on but it is getting close.  That is why I have decided to expand my online empire. My current goal is to add one source of online income per month until the end of the year.  I currently have four sites that make money. One of the sites makes very little money but it requires very little work so it is still a good deal.  I also have two sites that aren’t currently making money.  One of the sites hasn’t been monetized yet but I have a special monetization method in mind for it.  The other site I will either sell or completely revamp.

To reach my goal of making a full-time income from my sites I have decided to launch some niche sites.  I already have three blogs and I don’t have time for another one.  A niche site will take quite a bit of time to launch but afterward should not require too much time.  I have been taking a lot of inspiration from the niche site duel at Smart Passive Income.  I already have an idea for my niche site and I will be using information I have learned from reading about the niche site duel to get the site started.

Since lots of people ask me how to make money online and I am usually not sure what to tell them I have decided to share with you the process of launching the niche site.  The first update should be sometime next week.  Thanks to all of you who have helped me make money online.

Does Checking Take from the Poor and Give to the Rich?

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A recent study found that credit cards transfer wealth from the poor to the rich. J.D. of Get Rich Slowly stated that it would not change the way he uses credit cards. Adam at ManvsDebt used the study to support the reasons he does not use credit cards.

The obvious alternative to credit cards is to use a debit card tied to a checking account. These checking accounts represent a transfer of wealth from the poor to the rich as well.

The Federal Reserve Bank of Boston includes this quote on their download page. “Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general.” Banks cover the cost of providing a checking account mainly from overdraft fees and debit card interchange fees. A 2006 FDIC study found a correlation between household income and overdraft fees, those who live in lower income areas were much more likely to have incurred overdraft charges. Following the reasoning in the credit card study the conclusion is that checking represents a transfer wealth from low-income to high-income households.

Adam concludes that “consumers who use cash or other forms of payment pay marked up prices to account for the transaction fees generated by those which use credit cards.” Since debit cards also charge interchange fees it is fair to conclude that they account for some percentage of the marked up prices. Debit card users benefit because the fees cover the cost of providing them with a checking account and sometimes debit cards provide rewards as well. It is only the cash customer paying the marked up prices who doesn’t receive any benefit. Who is most likely to be paying cash?

Adam has chosen to opt out of the credit card industry because he doesn’t agree with credit card industry practices. Debit cards are a lesser evil but they do share many of the practices of the credit card industry.

Is the answer to just use cash with no checking account? Those who don’t have checking accounts often have to buy money orders and pay a hefty fee to cash their paychecks. I haven’t done the research but it is easy to see how that would also represent a transfer of wealth from the poor to the rich. Just using cash doesn’t seem to be a viable alternative.

I am going to just continue using my credit cards, debit cards, and checking accounts as usual. Although I don’t agree with some of the practices of these companies by being financially responsible one can avoid much of the cost.

What would be your solution?

Home Loans: How Much Your Property Will Really Cost

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When you are considering entering the property market, it is important that you take a wide angled view of your situation and your purchase, so you are not blindsided by the real costs of buying a home. It is easy to focus on saving for your deposit and searching the papers and internet for your dream home, however, in between your searches and your moving day actually arriving, there are a lot of other costs and fees to consider too.

Start Adding Up Your Costs

Every financial situation and house purchase is different, so here is a guide of the fees and costs you should expect in buying a home, and what they average at. However, to make your own calculations alongside our list you will need to clarify your variables, such as:

* House price.
* House value.
* Deposit amount.
* Loan term.
* Fixed or adjustable interest rate.
* Loan interest rate.

This is because many of the costs associated with buying a home and getting a home loan are dependent on the loan amount and your situation. For example lenders mortgage insurance is calculated as a percentage of your loan amount, and the interest rate you are charged can be calculated based on your financial situation all your credit rating. So, following are some figures to give you an example of the real costs involved in owning a property.

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Can Two Live As Cheaply As One?

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From my experience I would have to say no. Moving in with my fiancee isn’t going to save me any money. My half of the rent is only $25 less than what I was paying before and utilities will likely be quite a bit higher and erase that savings. I don’t think there will be any savings in any other areas but maybe there are some that haven’t come to mind. My monthly expenses will remain about the same.

The primary reason I won’t save any money is that our two bedroom apartment is about twice the cost of my studio apartment. The new apartment is a lot nicer but I’m not sure if it is really worth the extra money. I suppose this could be considered lifestyle inflation and I would guess lifestyle inflation is a major reason why many couples don’t realize much or any savings from combining their expenses. In our case we didn’t have a lot of time to find a new place so we couldn’t review all the lower cost options. Next time we will be able to get a better deal. I am not complaining, there are a lot of benefits from our combining our households but saving money isn’t one of them.

The Ethics of Bank Bonuses

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Last year I made about $1000 from bank bonuses. It looks like I will probably make about that much from them again this year. This is easy money since banks pay you just for opening a bank account. Their hopes are that once you sign up you will remain a customer.

Since I usually open these bank accounts just for the bonuses and then close them as soon as allowed under the terms of the bonus some feel that I am being unethical. I feel that since I am meeting the terms the bank made that there is nothing wrong with what I am doing. Sometimes I open an account for the bonus but end up keeping the account because I like it. ING Direct is an example of that. I opened the account for the $25 bonus and have kept it for years. Also, I have referred over 100 customers to ING Direct. I suppose some of those customers were also only opening the account for the bonus but I do not feel responsible for their motives. I feel like I have earned my bonus from ING Direct.

What do you think? Is opening a bank account just for the bonus unethical or just taking an opportunity the bank is offering?