If you’re among the fortunate few, you not only have a job you love, but one that will earn you at least a decent living over a sustained period of time.

For all too many Americans, however, that’s a pipedream. Many of them toil away at jobs they detest, but that pay the bills. After a lifetime of drudgery, they’ve funded their lives, but never experienced the joy of a labor of love.

Others follow their passions, and savor pursuits they adore, but that don’t afford a living wage. Their jobs are more hobby than vocation. And it’s not long before they realize that while they’re enjoying living, they can’t make a living.

Two guys who avoided those extremes and found the sweet spot are Randy Garn and Ethan Willis, co-founders of a Salt Lake City company called Prosper, which coaches students to make key financial changes in their lives.

Their book, Prosper: Create the Life You Really Want, which just hit the New York Times Bestseller List, may help you align happiness with the income you need over a sustained period. That equation, they argue, equals prosperity.

All about balance

“There are a lot of books just written about money, and a lot of books just written about happiness,” Willis told me. “But from our research, there are very few written about prosperity, which is the balance between money and happiness and sustainability, and deciding what role money will play in your life.”

Garn and Willis launched Prosper a dozen years ago with four employees, and grew the company to more than 400 employees, based on the idea of helping people not just think about greater prosperity in their lives, but go out and get it. Prosper has 75,000 students in more than 80 countries, its offices conducting more than 1,500 one-on-one coaching sessions every week.

Prosperity, Garn and Willis argue, isn’t about making a ton of money, it’s about making enough money, and making it consistently over time. Too many people get obsessed with making tons of money, and wind up on what’s known as the hedonic treadmill. They just keep on going, but never gain a sense of satisfaction or a sense of fulfillment. “People focus all their financial hopes on tomorrow, and wind up with a lot of broke yesterdays,” Willis says.

The Polaris Point

When those seeking to prosper find what Garn and Willis call their “Polaris Point,” named for the North Star that has guided explorers for eons, they have a clear vision of what they want to accomplish by the end of their lives.

“When you’re climbing that mountain, you’ll know you’re in the prosperity zone when you’re making the money you need, when you’re completely fulfilled and passionate about what you’re doing, and there’s a sense of sustainability in doing what you love,” Garn says. “You’ll know you’re not when you feel frustrated, anxious, depressed and distracted, or you can’t make ends meet.”

If that sounds like a bunch of nice words, rest assured there are specific strategies, a concrete plan and tactical action steps to create the life you want.

“The book has great case studies of some of our students,” Willis says. “There’s also a prosperity assessment that allows you to find out where you are personally in that prosperity equation. Where are your prosperity gaps? Where do you need to go? And how can you define the Polaris Point? Everyone has their own Polaris Point, which is what you want to achieve in your life. After all the scores have been tallied, and you’re looking back on your life, what do you want to be known for? And then how much money will that take to support you? The irony is sometimes it takes less than what you’re currently making.”

Receptive audience

Another irony is that the economic train wreck we’ve all dealt with the last few years may be making people less willing to spend their entire lives in jobs that do nothing for them but deliver a long string of paychecks.

Garn and Willis used to hear people ask, “How do I find the job that can pay me the most money?” After the financial markets meltdown, though, folks seemed to change. “They said, ‘What can I do that will be satisfying in the end?’” Willis relates. “What can I do to not just make a living, but make a life?”

Making a life, the authors emphasize, involves understanding joy is truly found in the journey, not just the destination. “From the happiness standpoint, there’s a lot of power in the pursuit,” Willis says. “It’s not just about the trophy, it’s about giving yourself a few blue ribbons along the way.”

After I hung up with Garn and Willis, I recalled the story about legendary author Joseph Heller, recounted in a book by John C. Bogle. Told a hedge fund manager had made more in a day than Heller had made in his entire career, the latter famously said, “Yes, but I have something he will never have. Enough.”

I’d bet he was one guy who knew his Polaris Point.

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Do you find that $20 bill in your pocket evaporating faster than ever, and your paychecks taking you shorter and shorter distances? It’s no hallucination. There’s a shift going on. It’s a shift helping ensure the comfortable middle-class lifestyles our parents enjoyed become as obsolete as an eight-track tape player.

Costs once borne by better-heeled folks are increasingly bearing down on the fragile shoulders of American taxpayers. Expenses, burdens, commitments, and responsibilities once assumed by employers are now the obligation of the American wage earner. In short, if you look around, you’ll find things are being shifted. And the more they’re shifted, the more likely you are to be shafted.

Try this: Go to any search engine and type in the phrase “costs shifted to taxpayers.” Next, tweak that line and make it “costs shifted to employees.”

You’ll find article after article bearing the same essential story line. Expenses not so long ago shouldered by someone in corporate America are now being subtly and gradually transitioned to the backs of average folks.

There’s the case in Ohio where the payouts to victims resulting from medical malpractice lawsuits may soon be vacuumed from Buckeye taxpayers’ accounts rather than insurers’. There’s the report from Washington State about a state senate initiative to let employers and insurance companies negotiate with injured workers and pay out less than the workers’ claims are worth, with the logical result that injured, disabled individuals will turn to public assistance.

And of course, there are the instances of mega-rich retail empires that gorge on profits while failing to pay living wages or provide affordable health insurance to their workers, ensuring those workers will turn to taxpayer-financed programs like Medicaid to garner the assistance they or their family members will likely require.

Caught in the crossfire

Your ability to raise kids and build college, home, and retirement savings might not be too badly dented by just one of these shifts. But when the shifts are coming from all directions, well, it’s no surprise editorial cartoons are portraying the U.S. middle class as a chalk line on pavement behind police tape.

Amid the growing library of books examining this phenomenon, one of my favorites is David Cay Johnston’s New York Times bestseller Free Lunch.

What’s that, you say? There’s no such thing as a free lunch? That’s right, someone must pick up the tab when, as the book’s subtitle says, “the wealthiest Americans enrich themselves at government expense.” That someone is you.

In the book, Johnston details how tax subsidies continue to be dispensed to the country’s most-moneyed individuals while jobs for average Americans disappear. Who’s reaping those windfalls? Big box retailers, gigantic shopping complexes, professional sports franchises, and politically-connected companies get the money that’s been shifted. All the while, schools and libraries, police departments, parks and playgrounds, and John Q. Public get shafted.

Johnston maintains a consistently indignant stance throughout the book, but rises to near blood-boiling rage — and takes his readers there as well — when describing a particular category of outdoor sporting goods retailer whose nearly city-sized stores are planted just off the exit ramps of many interstate highways.

These retail corporations (Johnston pinpoints two particular names) seek subsidies from local municipalities that include free land, monetary grants, and recapture of sales, property, and other taxes to build and operate stores, arguing their stores will bring traffic into the town once they arrive.

The only problem is that once they arrive, they usually don’t generate the boomtown commercial atmosphere promised. (One store I pass in the extreme corner of northwest Indiana sticks out in the middle of a one-time cornfield, but the area around it is as bleak as a 1930s-era Dust Bowl hamlet.)

Townsfolk have paid the tab for the store, and are helping fund its continued operation through tax givebacks, while the retailer’s corporate owners reap giant profits. How big? Between 2004 and 2006, one retailer earned $223 million, while collecting almost $294 million in subsidies. I don’t know about you, but I call that elevating the role of shifting and shafting to an art form.

Don’t shaft yourself

So, why all this about the shift and the shaft? I’m not asking you to occupy Wall Street or rage against corporate greed. That’s not going to make one iota of difference in how your personal household finances stack up.

But it could be you’re looking for a reason to put your financial house in order. It might be you’re the type who needs a little righteous indignation to spur you to life-changing action. It may be you can make needed personal spending, saving, and investing transformations only by coming to grips with the full extent of the encroachment into the pants pockets of you and your fellow Americans.

If that’s the case, while you’re not likely to be able to avoid being affected by all the shifting, you may be able to survive some of the shafting.

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Surf the web or browse popular magazines and newspapers, and you’ll find lots of insights about the opportunities and risks of being your own boss. But given the sky-high rate of small business failure, there can never be too much written on the topic.

I’m no Steve Jobs, but I believe I’ve got something to say on the matter. I last trudged off to work for a full-time employer on the Monday after Thanksgiving, 1989. I was fired from my job that day, my third firing or layoff in less than four years. In at least two of those axings, the boss intimated I was about as valuable to the company as a dish of paper clips.

That did it. I’d had enough of working for people I didn’t respect but who had control over how much I earned, when I woke, when I lunched, what I wore, when I went on vacation and more. So I struck out on my own. I didn’t really believe I’d succeed. In fact, I was almost certain I would fail. But the idea of being my own boss for at least a while was far less abhorrent than shambling through a skein of interviews for jobs I was sure to detest.

Well, it’s almost 22 years later, and I can say with near 100% surety I will never again take a nine-to-five job. Since launching my own gig, I’ve earned much more money, enjoyed infinitely more prestige and savored far more autonomy than I ever did working for someone else. I truly believe hanging my own shingle saved me from a life of misery. It may have kept me from a steady diet of anti-depressants or even a fortnight in a rubber room.

As I built my business, I had opportunities galore to meet and size up other people starting their own businesses. That brings me to the message of this opus. There are some folks who should never, ever be in business for themselves. If you see yourself in one of the following types, question the wisdom of going it alone. If you see yourself in two, think long and hard before scheduling a launch party. And if you see yourself in three or more, save the cost of a start-up, and don’t let the word “entrepreneur” ever pass your lips.

Ms. Style-Over-Substance. Some individuals have always wanted to open their own business, but for reasons of form rather than function. When I started, they had the coolest holographic business cards and best stationery. Today, they’d own the most up-to-the-minute phone and the greatest looking Facebook page. Regrettably, their attention to customer needs is far less keen, leading to an early exit from the ranks of the self-employed.

Mr. Nine-to-Five. Spend a long time as an employee, and you can get used to eight-hour workdays. But you better get unaccustomed to them quickly if you want to make a go of your own business. Some weeks, you’ll have nothing to do but prospect. Others, you’ll be working night and day. If you must knock off each afternoon at five, you’d better keep your day job. There’s no such thing as succeeding at business without really trying.

Ms. They-Don’t-Respect-Me! Don’t open a business with the intent of gaining respect or winning arguments with a client. The client didn’t hire you to duke it out in debates, or to commission a statue in your likeness, but rather to solve some pressing problem. When you do solve that problem, you may or may not win respect, but you will win repeat business.

I have a friend who started her own concern, and often checks in to say she had to argue with a client about a fee or her work’s quality. I tell her to recall retail pioneer Marshall Field’s adage that the lady is always right. When you’ve built a thriving enterprise and don’t have to go work for someone else, you’ve earned the most important respect: Your own.

Mr. Big Spender. I knew a guy who started a company helping businesses learn if land they were considering buying had buried underground tanks, necessitating costly remediation. For several years, he earned a half million dollars annually, and went on a spree. He bought a huge house, an unnecessarily costly SUV, and all the big boy toys.

Last I heard, he was living in a budget motel and fending off enraged creditors. When the market for his services dried up, his business went belly up. And Mr. Big Spender had shot through a pile of cash many people require decades to assemble.

Mr. or Ms. Under-the-Weather. Do you find yourself spending considerable time in a sickbed, doctor’s office or the ER? You may not be best bet for future Entrepreneur of the Year. Most people I know who have made it as their own boss are also among the least sickly of my acquaintance. I don’t think it’s a coincidence. Unless you’re a pharmaceutical sales rep, you won’t build a healthy biz hanging around physicians’ waiting rooms.

To reiterate, if the above sound like you, it may be best to shelter your savings and shelve your ideas of authoring a rags-to-riches business success story. But if not, a glimpse of the best boss you’ll ever have just may be as close as the nearest mirror.

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Busy people could sometimes — okay, always — use a little extra cash. But getting a normal part-time job is not feasible for many people. Who wants to be tied down to regular hours at the local diner when your kids might need a ride to soccer practice or help with their homework?

Skip the creepy ads for envelope stuffing and other get-rich-quick schemes in the newspaper, and instead check out these eight ways to earn some quick money without getting tied down in a regular job:

1. Babysitter. You did it when you were a teen, why not now? Parents in your neighborhood, or parents of other children in your kid’s school, would be delighted to have a mature adult available as a babysitter. And if you sit for kids who are your own kid’s age, you’re basically just having a play date — except you’re getting paid for it! Being a parent is perhaps the most important credential possible for a babysitter, but you can get babysitter certification from the Red Cross if you feel you need more.
2. Eldercare. Not wild about kids? Perhaps you would feel more comfortable helping people at the other end of the life spectrum. Seniors are living longer than ever, but many need a little help with the basics. Make it known in your neighborhood or community that you can provide a few hours a day of companionship, light cleaning, meal prep, bathing, etc., and you’ll surely find a family or two delighted to have a mature acquaintance willing to help out in this way.
3. Pooper scooper. Nearly every family has a dog these days, but none of them like cleaning up after Fido. So offer your services to do it for them! Believe it or not, there are bona fide businesses that exist solely to clean up dog poop. You can set up a neighborhood version. Charge $10 per week, visit each yard twice per week, and you’ll soon be clearing some decent dough for just a little dirty work.
4. Pet walker/sitter. Speaking of Fido, paying for a kennel when the family goes on vacay can be costly. Offer yourself as a pet sitter for half the price, and you’ll still clear plenty of scratch. You can extend that service beyond vacation duty by offering to walk dogs once or twice a day. Professional services earn serious money offering dog walking — you can do it for your neighbors or friends and pocket some of that money yourself.
5. Tutor. Were you decent in English, math, or science when you were a high schooler? Better yet, did you major in one of those disciplines in college? Then help the children of your friends and neighbors by becoming a tutor. Kids these days have way more homework than any of us ever had, and parents are more and more concerned about how their kids will handle it all. Ergo, they’re willing to pay $25 or more per hour for tutoring.
6. Private coach. Dad dreams that little Johnny is headed to the Major Leagues and Mom envisions Julliard for Janie. Capitalize on those dreams by offering lessons in a sport or other activity you knew well. You took piano lessons when you were a kid, right? Well, baseball hitting or flute lessons are basically the same thing. Get word out that you’re providing lessons in these areas, find a peaceful place to run them, and you’re in business.
7. Housecleaning. Everyone dreams of having a maid, but few can afford it. Offer your housecleaning services and you can cash in on those dreams. You don’t need to make it into a full-time job — clean two houses per week and you’ll clear enough money to buy your family’s groceries.
8. Family cook. You love cooking, but many people find it a hassle. Earn some money by taking that chore off their hands! You can prepare several meals at a time in their homes, or do the work at home and deliver it. Either way you’ll be making their lives easier and doing work you enjoy. (Just make sure you don’t run afoul of local health department rules if you make the food at home and deliver it.)

Whichever one of these side jobs you choose, you’ll be earning some extra money while helping others. And who knows, your new gig could lead to a serious business!

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“Money can’t buy you happiness, but it does bring you a more pleasant form of misery.”

Over the past week, you may have seen some headlines about a recent study that found many people will choose money over happiness. After looking more closely at the actual results of this study, I’m not so sure that’s the case…

Choosing money over happiness?

The study was based on a survey of three “populations” in which respondents were asked to choose between an $80k/year job with reasonable hours and 7.5 hours of sleep per night (Option 1) and a $140k/year job with longer hours and only 6 hours of sleep per night (Option 2). Each respondent was also asked which option would make them happier.

The soundbite is that, when given the choice between a job with longer hours and more pay vs. a job with more reasonable hours and less pay, many people choose the former — even if that higher paying job would result in decreased happiness. See here and here for examples. But is that really the case?

Interestingly, this pattern of choosing money over happiness was most evident in one population in particular. Care to guess which one? Yep, it was the college students.

In this population… Of the people that thought Option 2 (higher pay, less sleep) would make them personally more happy, nearly all of them (98%) chose Option 2. No real surprise there — when a higher monetary reward correlates with happiness, people choose the higher reward.

But… Of the people that thought Option 1 (lower pay, more sleep) would make them personally more happy, 44% still chose Option 2. In other words, for nearly half of these respondents the monetary reward (and all that it comes with) was enough to make them choose against their own personal happiness.

Interesting, but what about the other populations, which are much more likely to represent “average” Americans with real-world life experiences? Well, the results are quite different.

In the Denver sample…. Of the people that thought Option 2 (higher pay, less sleep) would make them personally more happy, nearly all of them (97%) once again chose Option 2. But of the people that thought Option 2 would make them less happy, the proportion that still opted for this choice fell to 20%.

What about that nationwide phone survey? Well, of those who though Option 2 would make them more happy, 95% went for it. But for those that though Option 2 would make them less happy, just 9% chose it.

Go beyond the headlines

These are interesting numbers no matter how you slice them, but the conclusion that people in general are choosing money over happiness isn’t quite as clear-cut as the talking heads would have you believe.

What’s really intriguing to me about these data is that the college students appear to be the outliers. Perhaps this reflects a generational difference, or maybe an educational difference, but I suspect it’s something different… I suspect that once people get out there in the real world, their views change.

The ramifications of working long hours, seeing your family less, and sleeping little begins to sink in, and people start to realize that there’s more to life than money. Whatever the case, the selective presentation of these results in the mainstream media is just one more example of why it pays to dig deeper than the headlines.

More generally, I’m curious to hear how you’d respond. Which option would make you happier? And which would you choose?

Source: Social Science Research Network, hat tip to @ManVsDebt

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The American paradigm for decades was that you worked for an employer your entire life. Then at 65, you were feted at a retirement party, handed a gold watch by your boss, and sent off on a serene path into your Golden Years.

After 40 or 50 years savoring all the good things about work life — the satisfaction of challenges surmounted, the colleagues who turned into friends, the reassurances of a steady paycheck and a comforting routine — you were suddenly expected to love a new life of sleeping in, idling away long afternoons, playing a little golf, and trying to keep out of your spouse’s way.

Where once you’d enjoyed a built-in social network provided by your co-workers, the folks with whom you rode the bus or train to work, the waitresses at your workday lunch spot, your world now grew exponentially smaller — a first but significant shrinkage on the path to dwindling to the size of your deathbed.

No wonder there was another American cliche associated with the above. It involved the guy who, after retiring in fairly good health, suddenly dropped to the pavement, dead of a heart attack a few short years or months after retiring.

More recently, I’ve heard of a new standard replacing the old one. It’s being forged by retirees who, after learning that a life of golf games, grandkids, and gazing at TV didn’t match their retirement dreams, decided they needed to go back to work. Not necessarily for money, but for their mental health.

I’ve heard these stories over and over: The former watch repairman who returned to tinkering with timepieces three days a week, the barber who took over a chair in the very shop he’d sold years before, the retired construction tradesman who assumed the reins of the home delivery service at his sons’ eatery.

About seven years ago, I interviewed Dr. John Gorham, who started work at the Washington State University College of Veterinary Medicine in Pullman, WA right after World War II. When Gorham logged his very first workday, Harry S. Truman was in the White House, TV was in its infancy, and the Chicago Cubs’ last World Series appearance had come a few months earlier.

An awful lot had changed by the time of that interview nearly 60 years later. But one thing hadn’t changed. In 2004, Gorham, then 81, still came to work each day as a professor of veterinary pathology, just as he had since 1946.

“It’s because I like to go to work every day,” he told me. “The people here are all 30 or 40 years younger than I am, and I get a kick out of being around the group. They’re after new research, and it’s just fun going to work.”

Paradigm shift

Turns out, Gorham was out ahead of the pack on this issue. Many folks today are realizing that spending the last years or decades of their life without ambition, challenges, or paychecks isn’t a particularly bright idea.

A few weeks ago, I spoke with Sara Rix, senior strategic policy advisor with the AARP Public Policy Institute in Washington, D.C. The topic: the merits of working longer. Today’s labor force is adding a lot of older people, especially those between 65 and 69, as folks delay retirement, or retire the retirement idea entirely, Rix told me. The rate of employment beyond the traditional retirement age has ballooned from 18.4% in 1985 to 31.5% last year. Among women, it’s actually doubled, from 13.5% in 1985 to 27% in 2010, Rix says, adding, “They like the social environment work provides.”

AARP’s Jean C. Setzfand puts it a different way. “Few people anymore see retirement as a time when they’ll put their feet up and do nothing,” she wrote recently. “Increasingly, people expect to work past 65 or 67, even if their job is something completely different from the one they’ve done their whole lives.”

And the fact is, it’s a brilliant money move to work a little longer, AARP points out. “Remaining at work longer is an option for many of us,” Rix says, noting the benefits of delaying retirement by even a few years means that many more years of savings, and that fewer number of years of financial outflow.

There’s also the issue of Social Security payments, which can be taken starting at 62, 65, or 70. If you hold out taking Social Security payments until age 70 because you can, your benefits are about 80 percent higher than at 62.

And that’s yet one more reason to consider working a little longer.

To give you an idea of the most advantageous age for you to take social security, and to learn the penalties for starting the flow of social security checks earlier rather than later, visit AARP’s new Social Security Benefit Calculator.

“Even a year of extra work makes a difference,” Rix says. “People ought to look into the advantages of working longer. And it doesn’t have to be 10 years longer. It can be one, two, or three years longer.”

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Talk about kicking someone when they’re down… If you’re currently unemployed, you’ll be disappointed to learn that an increasing number of job openings require you to be currently employed or you won’t be considered.

As bad as this sounds, this practice isn’t considered to be discriminatory because unemployment is not a “protected status” like age or race. Nonetheless, New Jersey has already passed a law making it illegal to bar the unemployed for applying for a job, and some other states are considering similar legislation.

What do you think? Should employers be allowed to weed out the currently unemployed when advertising for a job? Or should that practice be banned? As for me, I don’t like the idea in principle, but I do understand why employers would implement it. Presumably they’re trying to stem the tide of applications while trying to weed out the “damaged goods.”

Regardless of your view, since this is already happening, it’s probably best to protect yourself. You might start by sticking with the job that you hate until you’ve found a new position, rather than storming out before starting your job search. Returning to school is another good way to fill that time – and to improve your skillset.

Source: NY Times via Consumerist

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It was once considered gospel that, for most families, college educations were the second largest expenses they would ever assume, right after buying a home.

But the way college costs are rising (and home values are decreasing), I’m not sure college educations haven’t graduated into first place. Of course, a funny thing happened on the way to good ol’-fashioned college degrees growing ever more costly.

They appeared to lose a lot of their career-guaranteeing value, based on all the people with college degrees working at jobs that don’t require degrees. You’ve got sizable percentages of college grads, for instance, working as bellmen and porters, as well as limo and taxi drivers, writes Richard Vedder, author of Going Broke by Degree: Why College Costs Too Much. And those are the ones who have found employment. Worse yet, many are burdened with tens of thousands of dollars in college debts.

The problem, it would appear, is that parents are in love with the idea of a college degree, and will go to the poor house – or guarantee their kid winds up in one – to ensure that junior strides away from college with a sheepskin. Bearing that diploma from dear old State, he should be good to go, into a career filled with similarly-educated grads all whittling away at debts that could take them decades to pay off.

College is great for many folks, and I was surely one of them. I would not have bypassed the educations I received from numerous curvy coeds – of both the blonde and brunette persuasions – for anything. But if I was considering the idea of taking on $50,000 in debt today in return for iffy job prospects, I might pursue a different route.

Time for a different route?

Happily, there is a different route, one that involves a lot less expense and may be more likely to yield a solid career. It’s called an associate’s degree from the U.S. community college system, one of the nation’s most underrated educational assets.

Community colleges play a different role than do four-year public and private colleges and universities. In their towns and cities, community college administrators typically work closely with area employers, the very people most likely to be able to identify the workplace skills needed now, and those that will be required in the future. Then the community colleges tailor degree programs to train folks for those fields. It’s a direct “needs equal jobs” equation that community colleges attempt to solve.

In many cases, the skills needed by employers and offered up by community colleges are those that prepare students for “mid-skill jobs,” the kinds of jobs requiring more than a high school degree and less than a four-year college bachelor’s degree. In recent years, many mid-skill jobs have gone unfilled for lack of trained candidates, while jobs calling for four-year degrees or better have been overloaded with candidates.

So what might these mid-skill jobs be? I turned to Erin Brooks, spokeswoman for Harper College in Palatine, IL, one of the Chicago area’s leading community colleges, to name some of those jobs, and the yearly incomes they generate.

Four of Harper’s top programs train students for the mid-skills jobs of registered nurse ($63,900 median annual wage in 2009, per Illinois Department of Employment Security), Dental Hygienists ($62,100), Firefighters ($51,800), and welders $33,900.

According to Illinois Department of Employment Security’s labor market economist Mitch Daniels, other mid-skill jobs calling for community college associate’s degrees include carpenters and electricians, machinists, health information technicians, auto service technicians, chefs, accounting technicians, and computer support specialists.

Jobs going begging

In many parts of the country, great mid-skill jobs like auto service technicians and HVAC technicians are going unfilled, Harper College president Ken Ender told me not long ago. These are not the old “grease monkey” jobs of yore, but sophisticated and technical jobs requiring utilization of head and hands. HVAC and auto service tech jobs once went to high school grads, but today demand associate’s degree-level skills.

Ender adds, “Most of the new jobs of mid-skills levels haven’t even been created yet.” Many will require knowledge of two or more of these disciplines: biotechnology, nanotechnology, information technology, and manufacturing technology.

When you consider that not everyone wants or needs to gain a four-year degree, community colleges loom as an even wiser educational solution.

Jeannine Kubalewski, for instance, is a graduate of Harper College’s Fire Science program, and now works for the Elk Grove Township Fire Department in northwest suburban Chicago as a firefigher/paramedic.

“I really wasn’t into the 9-to-5 office thing; it wasn’t something I wanted to do,” Kubalewski said last year. “I always wanted to do something that most people don’t … I love my job, I love where I work … I wouldn’t change a thing about it.”

But let’s say the community college grad gets into the workforce and decides to take their education further. They’ll find this is a flexible route. So says Glenda Gallisath, associate vice-president for academic affairs at Glen Ellyn, IL-based College of DuPage, another premier Chicago-area community college. “What typically happens is they … Are successful in their fields, they’re valuable employees who know the technical side. But to move up into management, their employer encourages them to go back and get a bachelor’s degree … Many employers will support them financially, and the four-year institutions give them incentives to come, like flexible schedules.”

So if you’re seeking a way to slash tens of thousands of dollars in line item expenses from your household budget, while also helping to possibly better ensure your son, daughter, or perhaps even yourself gains skills in demand by area employers, you might want to trade a bachelor’s for an associate’s – at least at first.

See, the whole issue is really a question of degree.

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Over the weekend, I ran across a fascinating study that suggests that retiring early can significantly increase your lifespan. This work was based on an analysis of longevity data from former Boeing Aerospace, and it concluded that “for every year one works beyond age 55, one loses 2 years of life span on average.”

Here are the relevant data:

(Source: “Actuarial study of life span vs. retirement age” by Ephrem Cheng)

As you can see, these data appear to indicate a continuous decrease in lifespan the longer one works. Perhaps the scariest bit of data here is that those that work through the traditional retirement age of 65 only cash their retirement checks for an average of 17 months. 17 months! Is that what you have in mind when you think about your future? That your “retirement years” will be reduced to little more than a “retirement year”?

Unfortunately, the study didn’t include an analysis of why someone that works longer might die sooner. Of course, you also can’t easily extrapolate from one workplace to another, and we’re running the risk of confusing correlation with causation. Nonetheless, it’s fun to speculate…

Given that many jobs are filled with stress and frustration, it’s not hard to imagine that their might be some health problems associated with working – e.g., heart disease, hypertension, etc. On top of that, a busy work life leaves less time for exercise, eating right, and so forth, which only compounds the problem. I guess the silver lining is that you won’t need as much money for retirement.

What do you think? Is working longer a grave health risk? Or do you think there’s another explanation for these data? Please weigh in with your thoughts.

Update: The veracity of this study has been called into question, with Boeing stating that there is no such trend in the data, and that “Boeing retirees live longer than the national average, regardless of age at retirement.”

Source: Retiring Early via extremejacob

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This is a guest post from Ed Avis.

Kids have earned money for generations by selling lemonade, walking neighbors’ dogs, and mowing lawns. Those ideas still work, but maybe your kids want something a little more clever or out-of-the-box. Here are six unconventional ways kids can make money.

Grow plants

Every spring homeowners around the country dig holes in their yards and insert plants… That they bought at the local garden and home center. There’s no reason they couldn’t have given that money to your kids for plants they grew in the basement over the winter.

There is some investment involved – seeds, potting soil, and plastic trays. And there is definitely work involved. But you don’t need to be a horticulturalist and own a greenhouse to grow plants from seed, and the experience of growing these plants will probably be more valuable to your kids than the money they earn from selling them to neighbors.

Cookies, cookies, cookies

Does your kid like to bake? There’s money in that skill. Here are two ideas: First, the next time you or anyone in your neighborhood has a garage sale, have your little baker set a table with cookies and lemonade. Garage sales attract people with money to spend, and they’ll be pleasantly surprised to see cookies available at the garage sale.

The second idea is more ambitious. All moms need cookies for lunches and class parties, and many don’t have time to bake. Your child can do that work for them, on demand. The neighborhood kids will benefit from homemade cookies, and your kid will benefit from a well-fed piggy bank.

Sports lessons

This one isn’t for every child, but if your teen son or daughter did well in sports at ages 6-8, he or she could capitalize on that skill. Many parents of T-ball players and little soccer stars are seeking an edge for their developing athletes. Professional coaches give lessons starting at $40 for half an hour; your kid could teach a young T-baller basically the same skills for half that.

Not all good players make good coaches, but if your child likes working with younger kids, sports lessons may be an enjoyable, satisfying way to earn a few dollars.

Tutoring

Does your son do well in math or English? Is your daughter a chess whiz or a first-chair clarinetist? If so, then they can take advantage of those skills by tutoring younger kids. Most people think of tutors as adults, but your child may have a better perspective on teaching young kids than an adult – who has probably been out of school for many years – does. And younger kids look up to older kids more than they look up to adults.

Starting a tutoring business can be as easy as talking to teachers in the appropriate lower classes. They may be willing to pass on the names of prospective tutors to children they know could use the help.

School survival handbook

Starting a new school can be terrifying. Your kid can capitalize on that by writing a “guide to survival” for his or her particular school, and selling it to incoming students (well, their parents). This guide, which can be just a 15 or 20 page pamphlet printed on copy paper and stapled into a booklet, should contain inside tips on how to succeed at your kid’s school.

Welcome advice can include tips for pleasing certain teachers, maps for getting from the lockers to class, the best things to choose for lunch, the coolest places to meet friends at recess, and countless other things that only a veteran of the school would know. Of course, the pamphlet could also include good general advice, such as how to make friends and how to schedule homework, but the key to success of this booklet is its insider perspective.

Turning history into money

Most homeowners are somewhat curious about the people who previously lived in their houses. Your child can turn that curiosity into profit by preparing simple historical packets about neighbors’ houses. Here is what can be included in this packet and where it can be found:

• Previous owners. This information can be found, sometimes online, in your county recorder’s office, register of deeds, or the equivalent in your community
• Newspaper articles. Articles that mention the property or previous owners can be of great interest. Libraries usually have microfilmed newspapers that can be searched, and many newspapers are now online.
• Historical items. Items related to the history of the neighborhood itself (e.g.,from newspaper archives or interviews with older neighbors) can be of great interest.

The bottom line

Any time you’ve ever thought “I could do that!” or better yet “My kid could do that!” there’s bound to be an opportunity lurking nearby. What do your kids, or your neighbor’s kids, do to earn extra money?

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If you’re in the market for a job, you may be wondering how best to handle the most uncomfortable part of the interview… The salary discussion. Well, I recently ran across an interesting tidbit on the topic from a headhunter named Noel Smith-Wenkle.

Obviously, there are a couple of major factors at play here that you have little control over: location and line of work. These two factors will go a long way toward defining the salary range that is available for the position that you’re interviewing for. The key word in that preceding sentence is range.

In the vast majority of cases, employers don’t have a fixed amount available to fill a position, but rather they have a salary range. Their goal is (more often than not) to keep you at the lower end of the range, whereas your goal is to land at the high end of the range.

More often than not, your prospective employer will bring up the topic of salary expectations, either on the job application, or during the interview. This may seem like a relatively innocuous question, but you’re at a huge disadvantage when answering it. As a general rule, the first person to name a number in such situations will ultimately lose.

If you ask for too little and you may get paid much less than you’re worth – and there’s a good chance that your future employer will try to negotiate you down using this as a starting point. But if you ask for too much, you risk losing the opportunity entirely. So how can you defer the question without coming off like a uncooperative jerk?

For starters, do your homework. Find out how much people with similar backgrounds are earning for similar work in the location of interest. This latter point is huge, especially if you’re relocating. You may not have a good feel for the cost-of-living, so get one. If possible, ask around. If not, start poking around online. There are a number of good sites out there to get you started, such as GlassDoor.com and Salary.com

Based on your above research, you need to define a minimum acceptable salary for the position in question – but don’t tell them what it is. If you’re asked about salary requirements on the application, leave it blank (or write negotiable). When they ultimately ask you in person, respond with:

“I am much more interested in doing (type of work) here at (name of company) than I am in the size of the initial offer.”

This does two things: it allows you to dodge the question, and it also helps to distinguish you from the “thundering herd” of applicants who are primarily focused on the numbers. And, according to Noel, this simple sentence will prompt the hiring manager to come back with a fair offer.

If instead the interviewer asks a second time, respond with:

“I will consider any reasonable offer.”

This is obviously just another stalling tactic, but it’s polite and has enough wiggle room in it that it doesn’t pin you down in any way. According to Noel, only about 30% of cases will get past this point without the hiring manager coming back with an offer.

If you’re asked a third time (and yes, it’s probably starting to get uncomfortable by now) then Noel advises responding with:

“You are in a much better position to know how much I’m worth to you than I am.”

Here again, you’ve been polite, but you’ve refused to name a number. According to Noel, it rarely gets beyond this point, but if they continue to prod, he suggests that you stick with this final answer. Of course, doing so might cost you the job opportunity, but it will protect you against getting less than you’re worth.

The whole point here is to get them to say a number. This establishes a minimum in your negotiations, and you can work up from there. If, on the other hand, you speak first, you have effectively established a maximum, and the final number will likely move down from there.

And of course, once you get them to throw out a number, you don’t have to respond immediately. You might even respond with a bit of awkward silence to see if they’ll revise the number upward on their own.

Oh, and while we’re on the topic, be sure to check out The Salary Theorem.

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Even though the Great Recession is behind us and the economic recovery is (by most accounts) well underway, good jobs are hard to come by. So how can you be sure to keep yours once you’ve found it? Simple. By making yourself indispensable.

An example of indispensability

I was recently talking to a friend (let’s call him Steve) who related a story about one of his most valuable employees (let’s call him Mark). Times were tough, and Steve wasn’t actually hiring, but Mark showed up one day and got his foot in the door by offering to volunteer in return for the work experience. Steve checked out his resume and gave him a chance.

Over the next few months, Mark proved his worth – and then some. According to Steve, he made himself completely indispensable. Ultimately, Steve couldn’t help but hire him. And what a great decision that was. Mark has now become the “go to” guy for a number of things around the workplace, and Steve can hardly imagine how they got by without him. Do you think Mark has job security? You bet he does.

And… The exact opposite

At the same time, I’ve recently had the exact opposite experience with an employee. While I’ve generally been good at judging talent and character, I seriously mis-judged this guy. After a few decent months, his work ethic started to slip and we had all sort of problems. He was regularly late to work, he lacked initiative, and he had questionable judgment when he actually bothered to get things done.

In short, we just couldn’t rely on him to get the job done, so people end up working around him. He became little more than an obstacle – and an expensive one at that. We did what we could to get him back on track, but nothing worked. So… Do you think he has job security? Nope. In fact, he’s already gone.

Sure, he might have been having problems outside the workplace, but guess that’s no excuse. Everyone is dealing with a ton of stuff in the outside world. You’re not special, and your burdens aren’t any greater than those of the people around you. Life is hard, but you still need to show up and do your job. If you don’t, you might just find yourself living on unemployment.

Becoming a better employee

Let’s start with the basics. Don’t be late. Ever. Don’t fake sick days. Don’t make excuses when things go awry. Take responsibility for your actions. And don’t do busy work just to appear busy. Your boss isn’t stupid, so don’t try to pull the wool over their eyes. You’re just setting yourself up for failure if you do.

Now that you’ve covered the basics…

Spend the time and effort to do your job to the best of your abilities. You have to be at work all day, so why not make the most of it? Take initiative. Identify problems and solve them. Ask questions. Work quickly and efficiently. Help others when they need help – but don’t do their jobs for them. Become a resource. Make yourself the “go to” guy (or gal) at your workplace.

In short, make yourself indispensable.

If you do this, you’ll greatly increase your job security. I promise. And who knows… You might even get yourself a raise or – gasp! – a promotion along the way.

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As you may know, running this site isn’t all that I do. I also have a full time job, and that job sometimes requires travel. Unfortunately, I don’t have a corporate credit card for charging my travel expenses. I do, however, get reimbursed (within limits) by my employer – though I have to track and turn in the requisite documentation.

Unfortunately, I often end up scrambling to find and assemble the necessary paperwork, and then get it turned in on time. I’ve been working to improve things, though, and I thought I’d share some tips for making travel reimbursement easier.

Know what’s allowable

For starters, it’s very important to understand what can and cannot be reimbursed. While this may seem obvious, there are some subtleties to be aware of. For example, when it comes to meals, is alcohol allowable? In many cases it is, but for some employers, it’s a no-no. And what about dollar limits? When traveling for business, do you have an open checkbook, or do you need to keep your meals under a certain dollar amount?

Know what sort of documentation you need

Another important issue what sort of documentation is required. For example, do you need to turn in receipts for your meals, or can you simply claim a per diem amount? And if you are required to turn in receipts, will a charge slip suffice, or does it need to be an itemized receipt? It’s not uncommon for a restaurant to leave you with a charge slip instead of a detailed receipt, so you may need to ask.

What about copies vs. originals? Or using credit card statement in place of a lost receipt? Some employers are more flexible than others, so be careful not to lose anything essential – which bring us to…

Track and annotate your paperwork

Once you know what’s allowable, and how to document it, you’ll need to actually keep track of your receipts and other details while on the road. In the past, this has been my downfall. I’ll start accumulating receipts in one spot, but over time (especially on longer trips) things get spread around. I’ll end up with some things in my wallet, and others in my pocket, on the hotel dresser, in my computer bag, etc.

To combat this problem, I’ve started creating a dedicated envelope that I put in my computer bag and each night I go through my wallet, pockets, etc. and put everything in the envelope. This works pretty well, though you have to have the discipline to actually use it on a regular basis.

Another good idea is to annotate your receipts with any information that you might need later. For example, if you need to indicate who was at a particular meal when dining with clients, jot that info down while it’s still fresh in your mind. If you don’t, you’ll wind up spending way too much time trying to reconstruct that information later.

Oh, and you might also want to get into the habit of snapping a photo of each receipt with your smartphone. If your employer will accept copies, this picture might take the place of a lost receipt. And even if they won’t accept it, the picture will serve as a reminder of what you’re owed, and help you figure out which receipts may have gotten lost and need to replaced.

Submit your request promptly

And finally… You need to make a point of requesting reimbursement as quickly as possible after you return home. Obviously, you don’t want to make an interest-free loan to your employer – wouldn’t you rather have that money safely back in your own savings account? And more importantly, you need to do this because it will allow you to hunt down any missing details before they’re lost forever.

Maybe you’ve mis-placed a receipt. If you wait too long, you may forget about it entirely, or be unable to get a replacement. Likewise, if you’ve failed to properly annotate any of your receipts, as suggested above, you’ll be more able to fill in the gaps if you tackle this task while it’s still fresh in your mind.

Your tips for travel reimbursement

Okay, those are my four major tips for simplifying the process of travel reimbursement. What about you? I’m sure that a number of you are professional road warriors, so I’d love to hear any tips that you might have to offer.

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This is a guest post by Financial Uproar, a mid 20s finance blogger who writes about investments and general money topics. If you like what you see here, please consider subscribing to his RSS feed or following him on Twitter.

Let me begin this post with a story about two consecutive yearly performance reviews, one given to me by a supervisor who liked me, and the other given to me by a supervisor who felt I was after his job.

The first performance review was great. I met or exceeded expectations in all eight categories. In the comments section at the bottom of the review, my boss stated what a pleasure I was to work with, complimenting my work ethic and disposition. To this day, I have yet to get a performance review as glowing as that one. I used the review as my main ammunition when I asked for a raise a short time later, getting every penny I asked for.

Fast forward to the following year. I had a different boss, but I was in the same position. Out of eight categories, I only met expectations in three, meaning I needed improvement in five. It became apparent very early on in the review that my manager was nitpicking, finding fairly specific things I had done wrong recently and basing my whole yearly performance on them.

Outraged, I set up a meeting with his boss. To paraphrase, I was told the organization still held me in a very positive light – my immediate boss just didn’t like me, but my job wasn’t in jeopardy. He implied that if I just stuck around long enough, my supervisor would either get promoted or move on and I’d get his job. I left within six months, largely because dissatisfaction with my supervisor made me feel like I was in a dead-end job.

Bosses have biases

I cringe every time a performance review is referred to as “objective.” The fact is, bosses have subordinates that they like, tolerate, or despise. If a boss likes the worker, the performance review is likely to be better than the employee deserves. It’s the exact opposite with an employee the boss doesn’t like. So rather than an objective review of the employee’s performance, we get a report filled with the reviewer’s biases, which is almost never accurate.

Even if you get several people contributing to the review, the biases will still be there. Supervisors talk amongst themselves, and human nature dictates that we value the opinions of our peers. If nearly everyone in an organization dislikes someone for personal reasons, that will inevitably change the opinion of the one person who likes them.

Both parties are looking for different things

As an employee, the purpose of the performance evaluation is simple. You want a good review, partially to feel good about yourself and your performance, but mostly so you can leverage it into a pay raise.

The supervisor has often been given pressure by management to not be too positive on reviews. Management knows if they have a bunch of staff that get great reviews then they’ll have a bunch of staff pressuring them for nice pay raises. Obviously management doesn’t want this, so reviews just about always follow a “employee A did this well BUT…” format.

It’s thus common for managers to nitpick on some little wrongdoing during review time, just so they can find something negative to put in the review. How is that in anybody’s best interest?

They really don’t care if you improve

In every workplace I’ve been part of, the review never offers any concrete ways to improve an employee’s performance. If the review identifies a weakness in a certain area, the reviewer should also outline a step-by-step process to improve the employee’s performance. At the end of the day, performance reviews are presented, discussed, and then filed away until next year, when the reviewer cracks them out to see what they said last year.

If management was serious about employees really improving themselves, they’d revisit reviews on a regular basis throughout the year, working with the employee to improve their deficiencies. A review could be a great opportunity to show an employee that the employer is serious about their personal growth in the organization. This opportunity is just about always squandered by management.

The boss has all the power

Every organization likes to tout teamwork. We’re all a team, they say. We all work together. This may sometimes be the case, but it definitely isn’t the case at review time. Rather, the boss has all the power. The employee can object to the review until they’re blue in the face, but they’re not going to change it.

In fact, objecting to the review just gives the reviewer further ammunition next year, they can add “doesn’t take criticism well” to their list of beefs. It’s either the supervisor’s way or the highway, which is a contradiction of the whole teamwork and working together mantras.

Can they go away please?

I’m not sure of the ideal solution for giving feedback to employees, but it’s obvious (at least to me) that the traditional performance review isn’t it.

If I ran an organization, I’d give employees a handful of goals to work on at the beginning of the year, working with them throughout the year to accomplish those goals. At the end of the year, I’d go over the goals with the employee. If there was success, then a raise is in order. The greater the success rate, the greater raise I’d give. And if someone didn’t accomplish much, then perhaps they need to be transferred to a different department or even let go.

That’s just one solution. Certain organizations are starting to come up with some innovative ones of their own. What’s your take? As an employee (or boss) what would you like to see in a performance review? How can the process be improved?

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This is a guest post from Brian Tanner, who is a freelance writer for HP.

“There’s no place like home,” said Dorothy in the Wizard of Oz, and for the budding entrepreneur looking to launch a new business, that statement is more applicable than ever. Being that most home based startups have limited resources, setting up a workable, cost-effective home office can be challenging.

Here are six tips for creating a home office that is both functional and affordable.

Begin with the end in mind

Face it. With today’s technologies, pretty much any area in your house could serve as an office at any given time. But to do business effectively, you need to evaluate your needs and then choose an area that will best meet them. Having a well-defined space that is dedicated to the sole purpose of doing business should be your number one priority.

Not only does a designated office space offer tangible benefits when it comes to claiming the home office tax deduction, it helps you to take your business more seriously by having a place to report to and stay focused in. Setting ground rules with family members to avoid interruptions during designated work times is also important, as a quiet background will help you establish a higher level of professionalism with your clients.

Adapt a do-it-yourself mentality

Turning a room into an optimal office can take organization, creativity, and perhaps a few do-it-yourself skills. You can save money by tackling these tasks yourself. If a room needs some upgrading, like a fresh coat of paint or new window treatments to create a brighter environment during the workday, try to do as much of the work as you can before calling in a professional.

If creating an office calls for an actual remodel of an existing room, or other structural modification to the home, try making do with a room divider to postpone a renovation until your business generates enough income to justify the added costs.

Buy used furniture

Being that an office requires certain furnishings not always found in the home, purchasing some necessities, such as a proper desk and chair, may be unavoidable. By resisting the urge to buy new furniture and running not to the local office supply store, but to the neighborhood thrift store, you can save substantially without compromising quality.

Just be sure that the desk and chair you purchase are compatible, and that the chair is sufficiently comfortable for long periods of sitting. Medical supply stores can be a good source of inexpensive, supplemental cushioning.

Economize on equipment

When buying office equipment, an honest evaluation of what equipment you actually need, as opposed to what you want, will help you avoid the urge to splurge. If you anticipate the need to copy, print out, scan, and fax documents, you might consider taking advantage of an all-in-one machines, as opposed to buying several different pieces of equipment to accomplish the same tasks. This not only reduces your costs, but also reduces clutter.

Likewise, do you really need both a desktop and a laptop computer? What about using a more powerful laptop that can be docked to a large display and standard keyboard? While you might pay a bit more for this sort of laptop, having one allows you to take your computer into the field.

Of course, you can save even more by purchasing refurbished equipment from reputable retailers. Just make sure that the equipment in question won’t become obsolete too quickly as your business needs expand.

Buy supplies on sale

Regardless of whether your business is product or service oriented, the fact remains that a functioning home office requires office supplies. Although the practice of buying items as you need them may seem the most practical, you can reap substantial savings by purchasing office consumables either in bulk or on sale. Establishing a small business account with companies such as Office Depot or Staples, which offer modest credit lines to small businesses, can also help in establishing business credit and improving cash flow.

Once you know you needs, a warehouse club, such as Sam’s Club or Costco, can be a good source of bulk supplies. Just be sure you don’t get caught up in the excitement of setting up your new home office and end up rushing out and buy a ton of stuff that you don’t need.

Learn to leverage your time

When starting a new business, the old adage that “time is money” readily applies. You may have a well-appointed, state of the art home office that is the envy of any entrepreneur, but if you fail to “show up” on a regular basis and hold yourself accountable for the effective use of your time, you run the risk of failure.

If you need help to better serve a growing client base, use your internet skills to find and hire a virtual assistant. If a legal issue arises, or some other aspect of your business that is beyond your abilities to resolve, hire the appropriate professional to address that particular issue (e.g., an attorney or tax pro).

Virtual staffing is one of the most efficient and cost-effective ways to maximize home office productivity and business profitability. By outsourcing things that are outside of your specialty, you can spend your time doing what you’re best at.

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We recently received some good news from my husband’s employer. Starting this month, he’ll be getting a raise of a few hundred dollars per month. Of course, whenever we experience a change in income or expenses, we sit down and create plan for the change. We have clear financial goals that we both want to reach, but we don’t always have the same ideas on how best to accomplish them.

I’d be willing to bet that many other couples out there are dealing with similar issues. Thus, I wanted to share some tips that we’ve found useful in hopes that they’ll help your family thrive.

Examine your short-term and long-term goals

Earlier in the year, my husband and I discussed some goals that we had in mind for 2011. Here they are:

• Build our car replacement fund. Our goal is to save another $5,000 in a dedicated savings account.
• Bump up our emergency savings to a full six months. With a baby on the way, we decided we would feel more comfortable with getting more money into our savings account.
• Pay down our student loan debt. This is our last non-mortgage debt, and it’s decent amount of money. What I dislike the most about this debt is how slowly it’s going down. For every $150 or so we pay each month, the principal only declines by $45-$60.

We also have some smaller financial goals, but these are the big ones.

Allocate new money to what’s most important

If you’re lucky enough to get a raise, or otherwise come into money, it can be hard to decide which of your goals is most important. This is especially true if your partner has other ideas.

This is exactly the situation we faced, as we both had our own ideas as to we could best allocate my husband’s raise. I’d love to pay down that student loan, whereas my husband was more concerned about getting our savings built up before the baby arrives in July.

So how do you decide what to do when you don’t see eye to eye? For us, we’ve found the following tips helpful:

• Sit down and talk. Listen to each other’s motives on what to do with the money. It’s extremely easy to find fault with a goal, but hearing and understanding why your partner wants to do something can be very productive.
• Run the numbers. When we’ve discussed financial issues in the past, we’ve often found ourselves getting into the emotional and psychological side of things. When this happens, it helps to put some objective numbers down on paper (or in a spreadsheet) to keep your thoughts on course.
• Be willing to compromise. If we can’t agree to do one thing or another, then we try to find some sort of mix that addresses both of our concerns.

In this specific case, I realized that wanting to pay down the student loans faster was more of an emotional decision than a financially sound one. If we’re able to go ahead and reach our savings goals earlier, it’ll give us a cushion and allow us to start aggressively tackling our other goals.

We’re expecting a tax refund, and a good portion of that will go towards paying down the student loan. In the end, we’re hoping to meet all of our goals by the end of the year (if not sooner).

Consider having some fun money

I know many people who are so intense about their finances that they simply won’t deviate from their plan. While that works for some people, my husband and I just aren’t like that. While he’s definitely more disciplined than I am, even he wants to have some fun money.

Given the above, it wasn’t hard for me to understand his desire to also increase his “splurge account” account a bit. With everything that he’s put into building our family’s finances, I completely understand where he’s coming from. So while the majority of his raise will go towards fulfilling our joint financial goals, he’s setting aside a bit to have some fun.

I think it’s healthy for couples to allow themselves to enjoy their hard work. When I have a good month, I review it with him and put a little on the side for myself. It’s about being honest and open with each other, so one doesn’t feel like they have to hide a little stash from the other spouse.

Your thoughts on handling raises

Every family handles their finances differently, so I’d love to hear your take on this topic. How have you dealt with increases in your family’s income in the past? Did you modify your budget and direct the additional money toward your goals? If so, what specific things did you target? Your emergency fund? Retirement savings? College savings? Or did you do something fun, like start a vacation fund?

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A friend of mine has a very successful side business. In fact, he earns more on his side business than he does from his full-time job. The only problem is that if he were to get hit by a bus, his business (and the income he earns from it) would disappear. That means that the value of his business (currently $500,000) would vanish.

You see, Hans’ business depends entirely on Hans. Even though he has formally created a Professional LLC, his business is vulnerable. He writes music for video games on the side, and if he isn’t jingling, he won’t earn any money. Writing music at this level requires a highly skilled individual. It’s not a skill that’s easy to replace.

Even if you aren’t a music composer, you might be facing a similar problem if you own a small business. Bloggers, financial planners, doctors, accountants, and others all face this issue. It can be boiled down to one simple question: how do you capture the value of your business if you aren’t around to run it?

If you face this dilemma, here are the steps I suggest you take:

1. Buy life insurance

This is a no-brainer, even if you don’t run a small business. But it’s especially important if you do own your own shop. The purpose of the insurance is to replace the income your family would lose if you die prematurely. Make sure you have enough life insurance to replace your side income, as well. By doing so, you’re effectively buying time for your loved ones to deal with their loss.

2. Get friendly

Get out there and make friends with your competition and be on the lookout for a potential buy-out partner. You’re looking for someone who is successful, trustworthy, reliable, and smart. Obviously, the person has to have the skills necessary to run the business, but they also must be extremely concerned about the well-being of their own family.

This latter point is important because, ideally, you’d like someone who wants you to help them as much as you want them help in case of emergency. That puts a different spin on the transaction than if you wind up selling to a complete stranger.

The sooner you do this the better, because it will take time to identify the right partner. Don’t rush in to anything. Meet several times and meet with a number of people. Discuss the issue of continuity and capturing value of your business. Does the issue resonate with this other person? What are her concerns in this matter? Make sure you are both on the same page.

The process of identifying the right candidate could take a year or more so be patient.

3. Let’s make a deal

Once you’ve found the right person, it’s time to seal the deal. Basically, your goal is to arrive at some value of your respective companies. It doesn’t matter what it costs to start a small business like yours.

The value of your business will typically be a multiple of the gross or net income. This way, as the income grows, and as the value of the business grows, your family is protected. You would come to an agreement as to how the business would be paid for and over how many years.

In other words, the buyer might pay your family over five years after your death, or they might pay for the business immediately upon your death. This latter strategy might involve you buying life insurance on each other. I strongly suggest that you seek legal representation when drafting the final agreement.

4. Roll up your sleeves

Just because you’ve found the right person and executed an agreement, don’t think you can rest easy. Now is the time to enmesh yourself in each other’s business. That’s right. The value of your business will be maximized if – and only if – your buyout partner is able to keep the business running.

The only way they’ll be able to do that is if they are well acquainted with the way you run things. This means you’re going to have to pull back the curtains and show your buyout partner the inner workings of your business. That’s why you have to find a person you trust and that’s why this is a long process.

5. Baby’s got back (up)

It’s great to pursue this process with one other person, but realize that you may have second thoughts. Your agreement should allow either party to back out prior to death or being diagnosed with a fatal disease. This is where your extra life insurance comes in. I love cheap term life insurance, and this is a case where it can really come in handy.

In addition, you can train someone else (e.g., your life partner, spouse, or adult child) to keep the business going for some period of time until he or she can sell it. This should never be your number one plan if your spouse or life partner has little or no interest or special skills in your area of business.

The bottom line is that, if you go through this process, you’ll definitely capture more value and put your family in a position to survive (if not thrive) in your absence. If you ignore this issue and (Heaven forbid) you die prematurely, your business will be sold for pennies on the dollar – or go down the drain completely.

Ensuring continuity

Do you have any tips for capturing the value of your business in case of emergency? If you’re a small business owner, have you developed a continuity plan? If not, what are you waiting for?

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This is a guest post from Darwin of Darwin’s Money. If you like what you see here, please consider subscribing to his RSS feed.

As the economy struggles to recover, 2011 promises to provide opportunistic consumers and businesses with plenty of surprise bonuses. You just need to be ready to take advantage of them! Here are just a few unique opportunities presenting themselves this year – surely, you can benefit from one or more:

The 2% payroll tax break

As part of the compromise over the extension of tax cuts into 2011 and 2012, the payroll tax will be reduced by 2% for all working Americans. Typically, American workers have to pay a 6.2% payroll tax into Social Security on income up to a specified level ($106,800 this year). In 2011, this tax will be only 4.2%, so you will have an additional 2% back in every paycheck for a maximum of $2136 for workers earning up to the cap.

A simple and effective way to put this money to work for you would be to increase your 401(k) or equivalent retirement account contributions by the same 2%. Other uses could include paying down high interest debt or building your emergency fund. Whatever you do, don’t squander this year’s unplanned bonus. The government wants you to spend it to help stimulate the economy, but you can put it to better use.

No FICA cap increase 3rd year in a row

Here’s another stealth bonus this year for high earners… The cap I mentioned above has not been raised for the third straight year! Typically, it goes up every year based on an inflation calculation. Even though we all see inflation in food, energy and healthcare costs, the government’s index if flat.

Conspiracy theories aside, this official lack of infation has resulted in the $106,800 cap being in place during 2009, 2010, and now 2011. If and when you hit the cap in annual earnings, you’ll get a fatter paycheck.

Rather than squandering and spending that several hundred dollars that extra money that shows up in your paycheck toward the end of the year, put it to work! Treat it like a bonus! Because chances are, by 2012, that cap will finally move.

Record low interest rates

While decades low interest rates are terrible for savings accounts and CD rates, they’re a boon for people looking to borrow money to buy a house, refinance their existing debt, or grow their business.

Just because rates are low, however, doesn’t mean it’s a great time to rush out and buy a home. But for those who were already looking to take the plunge, you may never see mortgage rates like this again in your life. Likewise, if you have an existing mortgage and haven’t already refinanced, refinancing into a lower rate loan can save you hundreds of dollars per month for decades to come.

Rates won’t stay this low forever – in fact, they’ve already increased a bit from their all-time lows – so it’s worth considering whether a home equity loan, mortgage refinance, or new home purchase makes sense at these low rates. If you wait, you’ll almost certainly pay more.

Incredible talent available at a discount

While some businesses are intentionally avoiding hiring the unemployed, and only seeking candidates that are currently employed, I find this to be somewhat backwards. After all, an already employed worker will have a good bit of negotiating leverage, and you’ll wind up paying a premium relative to their existing salary, and possibly have to provide relocation benefits.

At the same time, someone who’s unemployed has very little leverage, may very well be incredibly eager and enthusiastic to get back into the workforce, and may turn out to be incredibly loyal to you and your company for giving them a shot during such a trying time.

In past downturns, talent and/or performance may have played a major role in layoff decisions, but this time around companies have shed large numbers of workers, if not entire business units. You can find top talent, experienced veterans, leaders, and innovators out there just waiting for a job offer. As the economy picks up, these people will be employed again – pick them up before your competition does!

Energy tax credits in 2011

Other beneficiaries of the recent tax deal are American homeowners and manufacturer of energy efficient appliances, windows, and doors. As part of the 2011 energy tax credit program, homeowners will be able to deduct 10% of the cost of compliant home upgrades (up to a $500 total deduction) from their tax bill in 2011.

Granted, this program isn’t as attractive as it was in 2009 and 2010 where you could deduct a full 30% up to $1500, but if you were considering replacing some windows, your HVAC system, or other features of your home anyway, you might as well do it this year and recognize the credit in 2011.

As Congress hunkers down and tries to reign in spending following multiple stimulus packages, bailouts, and tax cut extensions, it’s unlikely that we’ll continue to see stimulus tax credit programs like these. In other words, take advantage of them while you can – if you can justify it financially.

These are just a few special bonuses presenting themselves in 2011. I’ll be enjoying a few.

Did I miss anything?

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The best approach to financial security is to have a beginner’s mentality. By that, I mean that you should approach your finances as if you don’t have any answers.

You might be saying to yourself, “What is Neal talking about? Surely he’s talking about someone else, not me. I never behave like a know-it-all. Especially when it comes to money.”

Perhaps that’s true. I know plenty of people that don’t behave this way… Or at least they don’t behave like this most of the time. But everyone has an intuition about a stock once in awhile… Right? They “just know” this one is going to explode, so they put a big chunk of their savings into it.

And if you ask most people what they spend, they’ll tell you they know exactly what that amount is. They don’t need to keep track of their budget. Or if you ask them, they’ll tell you they don’t need life insurance because “they have longevity and health in their genes.”

Almost everyone I’ve ever spoken with thinks they know something that they really don’t. The consequences of this mentality can be catastrophic. In fact, more people have been wiped out by this kind of thinking than by the financial tsunamis that plague investors every so often.

Here are a few real examples.

Roger’s heart attack

Roger was my good friend and CPA. He was 39 years old when he dropped dead of a heart attack on the basketball court several years ago. He was an otherwise healthy person with no history of medical problems.

According to the statistics, he should still be alive, but he isn’t. I don’t know if Roger had insurance or not – that’s not the point. The point is that most people who are 39 and healthy don’t expect to die… But they might.

Because there is a chance, even a slight chance of that happening, these people need life insurance, and they also need to do some estate planning. This is especially true if others rely on them financially.

Deborah’s stock market flyer

I spoke with Deborah yesterday who bought stock in Sirius (SIRI) when it first came out. The company had $500 million in cash and a contract with Howard Stern at the time. What could possibly go wrong? Deborah invested $10k into the stock because she felt it was a sure winner. That $10k is worth less than half that today.

These are just two examples that I can name off the top of my head. Think of all your examples. I’m sure you have plenty of them.

If you want to secure your financial future, it’s vitally important that you pay attention to this trap. Am I saying that you shouldn’t ever take a flyer on an investment? Well… Not really. What I’m saying is that it’s critical to understand what you’re doing. And if you’re taking a flyer and a risk, acknowledge it and be prepared for the consequences.

Let’s look at a few examples.

Gambling on life insurance

Are you making uneducated decisions about your life insurance? Let’s take a look. Take a few minutes and add up all the life insurance coverage you have. Let’s say a person has $250k in coverage. At first blush, that seems like a lot of money.

Whenever I meet someone and they tell me about their life insurance, I ask them why they have the amount of coverage in place. Usually people look at me like I just asked them a question in Russian. That tells me that they’re just assuming that they have plenty of coverage – but they’re not sure why. They just figure that things will work out.

Now, I ask them what their heirs would do if they were to die. Let’s assume the insured person earns $50k/year, and that life insurance is supposed to replace her income. If the family expects to use the $250k to earn $50k each year, they’re crazy. That’s a 20% annual return.

What’s really going to happen to this family is that they’re going to exhaust this $250k in 5-6 years and then they’ll be broke. This will happen for one reason and one reason alone. The person who bought the insurance didn’t think it through because they “knew” the family would be fine.

Taking your job for granted

Let’s not restrict this to insurance and investments. Think about your job. I met a man last night who worked for, and invested in, Bear Sterns and lost everything. I mean everything. He “knew” the company was strong and he “knew” his job was secure. In reality, he didn’t know anything of the kind.

Am I asking you to live in a world of constant anxiety? No. But I am suggesting that you always have a plan B and always consider the worst-case scenarios. Have a beginner’s mindset. Assume you know nothing.

In the case of your job, your plan B should be developing a weekend job that could turn into a side business, having adequate cash reserves, or a combination of the two. If you have your own business, get a small business disability insurance policy. If not, you should still explore long-term disability insurance.

When it comes to investments, hope for the best, but be prepared for the worst. If you can’t accept a worst-case scenario, don’t make the investment. And when it comes to life insurance, accept the fact that you have no idea how long you’re going to live and purchase adequate life insurance accordingly.

Do you operate with a beginner’s mind?

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Many of us are starting 2011 with every intention of reaching big financial milestones such as getting out of debt, saving up for a house, or getting serious about retirement. For many couples, however, it might be hard to reach your goals if you’re depending on two incomes to support your lifestyle.

It is possible to reach your goals, but it will take some sacrifice. If you’re really intent on meeting your goals, you may want to change your family’s financial habits and learn to live on one income instead of two. This post is geared towards two-income families who are looking to simplify their finances and give themselves some breathing room so they put their second income toward achieving their financial goals.

Creating a timeline

While it would be wonderful to just start living off one income in a day, it generally takes some time and planning to make it happen. If your expenses are greater than the larger of the two incomes, you’ll need to start trimming your expenses. Depending on the size of the gap, it might take awhile to get your spending in check. In general, you should shoot for six months and adjust accordingly.

Your first step should be to look closely at EVERY expense and ask yourself if it’s really necessary. If an expense isn’t required and doesn’t add appreciably to your enjoyment of life, then reduce or eliminate it. Don’t get rid of all your kids’ extracurricular activities, but do look for areas to cut back.

Dining out is another big expense that can often be reduced or eliminated. Sure, it might provide you with some family bonding time but, in most cases, it’s little more than an expensive habit.

You should also examine recurring expenses like your cell phone plan. Believe it or not, you may be able to stay with the same provider and get a better deal by doing nothing more than checking for discounts related to your employer. For example, my mom checked last month and ended up getting 20% off her plan.

Wisely use your second income

Here’s the best part of the one-income living plan: once you free it up, you can use the entire second income to accelerate progress on your financial goals and put your family in a much better position. Don’t waste the opportunity by spending your newfound savings on frivolous stuff. Make the sacrifice now and your discipline will pay off in dividends.

Eliminate your debts

My recommendation is using the debt snowball plan to get started and stay focused on debt repayment. Simply tackle your debts from smallest to largest. Even if your second income stream is from part-time income, it can make a HUGE difference on how quickly your debt is paid off.

Avoid new debts with a savings plan

Automated savings is your best friend when it comes to avoiding new debt. An emergency fund isn’t exciting, but every family needs one. Keep it in a high yield savings account so you’ll have easy access in times of need.

Vacation funds

When planning an upcoming trip, be sure to consider all the major and typical expenses for budgeting. Here’s a general list we use to budget for vacations.

• Lodging
• Transportation
• Food (you might want to overestimate this expense)
• Local activities
• Souvenirs/gifts
• Miscellaneous (emergencies/buffer)

With the right amount of planning and an automated savings plan, you can have a debt free vacation. Simply transfer a small amount to a dedicated savings account each and every month. You won’t even notice that it’s gone.

Car replacement fund

Buying new cars can really set you back if you’re doing it to keep up with your neighbors. That being said, it’s definitely possible to have a safe and reliable car at all times without breaking the bank as long as you’re serious about building a car replacement fund.

Simply commit yourself to a set monthly payment (to yourself!) based on your expected timeframe for replacing your car. This is an important goal, but should probably be secondary to things like debt reduction. If your car suddenly breaks down while you’re paying down debt, you can quickly redirect cash from your second income and emergency fund to get a cheap replacement in the mean time.

How long should you live on one income?

The answer to this question really depends on your goals. According to Dave Ramsey’s “Total Money Makeover,” if a family is fully committed to the process, they can get their finances on track within an average of 18-24 months.

In the long run, of course, your goal might be to drop down to one income so one of you can stay home with the kids. In that case, this exercise lets you get your ducks in a row while also preparing your for the eventual loss of that second income.

Your thought on living on a single income

Do you have one or two incomes in your household? If you have two, are you spending them both? If you only have one, was this a conscious choice? Do you have any tips or tricks for making it work?

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In the past few days, I’ve heard from several readers who noted that their federal income tax withholding has increased in 2011 despite the fact that 2011 income tax rates will be unchanged from 2010.

This situation has been made more confusing by the so-called Payroll Tax Holiday, which knocks 2% off your Social Security taxes. If income tax rates are the same, and your Social Security taxes have decreased, why has your withholding increased?

For starters, the Making Work Pay tax credit has expired. Unlike most income tax credits, which can be claimed when you file your taxes, the Making Work Pay credit was given out incrementally via reduced federal income tax withholding during 2010.

It’s also important to note that, the Payroll Tax Holiday is a separate issue entirely, and it affects a different line on your check stub. As I noted above, this affects your Social Security taxes, which are typically listed as FICA-OASDI on your check stub.

While the Payroll Tax Holiday went into effect on January 1st, the IRS has given employers until January 31st to implement the changes in their payroll systems, with an expectation that any over-withholding be rectified by the end of March.

So… If you’ve seen an increase in federal income tax withholding (or failed to see a decrease in Social Security withholding), you now know why.

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While you don’t have to wait for January to start working on your finances, this is often a great time to try a new approach. If you’re thinking of making some changes, you may be wondering where to start. Here are some ideas for optimizing your finances.

Clean up your bank accounts

If you have multiple bank accounts, make sure they’re all necessary and doing their job. If you have extra accounts that you no longer need, consider consolidating them. There’s no need to have checking and savings accounts at multiple banks unless you’re actually using them.

Get free checking

Some banks are cutting back on their free checking accounts by nickel and diming their customers. If your bank is charging any of the following unnecessary fees it’s time to shop around.

• Minimum balance fees: Many banks will charge you if you have less than a certain amount in your account. Requirements vary from one bank to another, so make sure you know it for yours.
• Overdraft fees: While charging for overdrafting is fair, the amount that many banks charge can be insane. Did you know that you can avoid overdraft fees entirely with ING Direct? Instead, they offer an overdraft line of credit and charge a small amount of interest when you use it.
• ATM fees: ATM fees have risen to $2-3 for out of network use, and you’ll often get charged by both the ATM owner and your own bank. These fees can quickly add up, so shop around for a bank with low or no fees and/or ATMs where you need them.
• Fees for online billpay: These fees are less common than they used to be, but some banks still charge a fee for using their online billpay service.

Double check your recent bank statements to find see if you’ve been incurring any of these fees. If you can’t get your bank to waive these fees, then switching banks might be your best option.

Are you saving enough?

Automating your savings is one of the keys to financial success. But have you really though about much money you’ll need for various expenses? To figure things out, you need to sit down and list your needs and goals. Here are some ideas:

• Emergency fund
• Vacation fund
• House down payment
• Medical expenses for the year
• Car replacement fund
• Baby fund
• College savings fund
• Retirement fund

Every family will be different, as everyone has different goals. You may not want to be homeowners, or maybe travel isn’t a priority. Whatever your list looks like, it’s important to sit down and hash things out.

Spruce up your paycheck

Another good thing to do at the start of each year is to take a close look at your paycheck. Is your tax withholding right? Are you being paid what you’re worth? Can you think of other ways to earn extra money?

Look at your W-4

If you receive a tax refund, you should consider adjusting your withholding for 2011. While you’ll reduce your tax refund for next year, you’ll get more money in your pocket each pay period.

At the same time, you should set up (or adjust) an automatic savings transfer to make sure you don’t squander this “extra” money.

Ask for a raise

It may seem counterintuitive to ask for a raise when economy is still stumbling, but you should still take a close look at your circumstances. If you’re underpaid relative to others in a similar position, you should consider asking for a raise – especially if your employer has successfully weathered the economic storm.

Before talking to your boss, you should get your ducks in a row. Make a list of successes you’ve played a role in, and progress that you’ve made over the past year or so. You need to make a compelling case for why you’re due for a raise. You might not get as much as you want, but you’re unlikely to get anything if you don’t ask.

Make money on the side

If you’re having trouble making ends meet, you should consider moonlighting. It doesn’t matter if you wind up freelancing some of your professional skills, tutoring, or even delivering pizzas. What matters is that you earn some extra income to fill the gap.

Whether you plan on paying down your debt or building up your savings account, having an alternative income stream can help make your goals a reality.

Your thoughts

Now… I’d love to hear about your goals for 2011. Have you started working on your finances for this year? What’s your biggest financial goal for 2011? What steps are you taking to reach it?

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If you are considering starting your own business, now is a great time to do so. If you want to become a millionaire, owning your business is probably the best way to get there.

While it’s true that the economy is growing very slowly and people are slow to spend money, now is the time to take advantage of opportunity. What opportunity, you might ask?

For starters, if you look around, you’re likely to find tons of business bargains. Of course, you can build up a business from the ground up, perhaps basing it off a weekend job, but you can also buy an established business. Remember, when consumers struggle, that means businesses struggle too. When revenues are down, business values decline, too.

Buying a business

When you buy a business, you usually pay a multiple of the net income of the business. So if the business nets $100,000 and the multiple is 5, you’ll pay $500,000 for the business.

Typically, when you value a business, you look at the net income over the last several years. And you don’t need me to remind you that business has been rough over the last few years. Net income has likely been on the decline, even if the business is perfectly healthy. The nice (very nice) thing about declining revenues (from a buyer’s standpoint) is that the multiple you pay will be much lower when revenues are declining.

Let’s say that you’ve identified a business to buy and the net revenue this year is $100,000. If last year the net income was $125,000 and the year before that it was $150,000, the business looks like it’s in decline and the buyer can’t really argue the point. That being the case, you might be able to buy it for 5 times earnings or $500,000 or less. Remember, in this situation, you are helping the owner save his business.

But let’s say the business made $50,000 two years ago and $75,000 last year. This year, it was $100,000. This looks like a growing business and as such, the buyer might demand 10 times earnings – or $1,000,000. Do you follow? Because the overall business climate has been slow, you’re more likely to find companies with declining revenues and therefore, you’ll be able to get them much cheaper.

Now, if you’re convinced that now is a great time to buy a great business, it’s important to buy the right one. Don’t get enamored with the cash projections. Remember that business is about competition. Only buy a business if it has some competitive advantage.

Even better, if you have some expertise in a particular area, try to buy a business that leverages your expertise. If you can buy the business from a seller who lacks that expertise, all the better. You’ll be able to buy it on the cheap because it was being run by a novice, and you should (hopefully) be able to achieve a quick turnaround.

The same argument can be made for finding and retaining staff. During tough times, it’s easier to find very qualified people to work for you and keep them on your team – if you treat them right. If you are skilled at managing people, this could be a huge competitve advantage for you and (possibly) reason enough to buy a business.

Running the business

Running a successful business isn’t rocket science, but it’s not for everyone. You can outsource things like the accounting, but you still need to understand business budgeting basics. You can hire mangers, but you have to be able to lead a team and inspire people if you have employees. You can hire salespeople, but you better have sales skills yourself if you want your business to be a success.

If you lack any of these skills, it might mean the difference between success and failure. You might be able to overcome some of these challenges by taking on a partner who does have these skills but don’t spend your hard-earned money on a business and just “hope for the best.” It doesn’t work that way.

If you buy the business right and focus on getting the right people on your team (both of which should be easier to do these days), it will actually be easier to run the business in many ways.

First, your debt payments will be lower because you’ll pay a bargain price for the business. Next, things will run smoothly because you’ll have great staff who appreciate having a job. It’s true that sales might be slow in the beginning and that it will likely take time for you to get the real swing of things, but now is still a great time to go into business for yourself.

Yes, real risks still persist, but even the world’s biggest pessimist would have to admit that the likelihood of our economy relapsing into the dismal situation we were in a few years ago isn’t very high. If the economy simply stays the same or improves ever so slightly, buying a business now could be the best move you ever made.

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It’s frightening to be out of work at any age, but it can be terrifying if you’re in your mid-50’s and unemployed.

This is especially true if you are tapping into your emergency savings, or facing other financial hardships. But if you are in that age range and out of a job right now, or can’t stand the job you have, I have some good news. Finding a new job in your 50s may not be as hard as you think it is.

It’s true that people who make these changes at this stage of the game face hurdles. According to a recent study by AARP, most folks who leave their jobs in their fifties take a pay and benefits cut – big surprise there, huh?

But what is surprising is that many of the people who changed jobs after age 50 also changed careers. They may or may not have a choice in making a career change, but for whatever reason… Lots of folks went on to something completely different. What may have started off as a fun second job often flowered into a brand new career.

What I also found fascinating from the study was that a whopping 91% of the people who “re-careered” were delighted with their new situation. This, despite lower income and drastically reduced benefits. The number of people who complained about job-related stress went down from 67% to less than 36% after making this change. Also among this group, the percentage of people taking advantage of flexible hours doubled.

What has this got to do with you?

First, if you are under 50 and you don’t care about anyone who is over 50, you shouldn’t care. See you next week. But if you are either over 50 or care about someone who is, this information can be very powerful. The findings should empower you.

You don’t have to stay in a job you hate, or continue working for a boss you can’t stand – especially if you are over age 50.

People who took the plunge made less money at first. They found it harder to make ends meet and save for retirement. But the “living” benefit for those people who were included in the study more than made up for any decrease in monetary compensation. But I wanted to bring this issue up for another reason.

It’s very easy to understand that people can be happier when they make less money – in theory. But when it comes to you and me, it can be very difficult. I can tell you personally that I don’t think I have what it takes to make a change like this.

I happen to enjoy what I do. And I’m lucky, because if I needed to downsize dramatically to switch careers, my wife and family would support me and encourage me. They’d be willing to make cuts in our budget.

But I’m in this age group, and I don’t know if I have the true grit to take this plunge. To make a complete switch in order to be happier and give up a good chunk of the income I earn? Scary.

I admire people who are willing to do it if it suits them, but I don’t think I have the guts.

I grew up without much financial security. I work really hard now to do the best I can to provide that security for my family. I can’t imagine doing something else that would make me happier if it also meant I’d be less able to provide financial security. And if I had credit card debt and a bad credit score, I would never entertain the idea or support it for someone else who was in that situation. Maybe that’s a character flaw I have to work on.

Life is short. Too short to waste time doing things you don’t enjoy. This is true in good times and bad. What about you? Have you been faced with a dilemma like this? Are you staying put because of the economy or are you going for it?

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While there are clear signs that the economy is improving, it looks like it will be a long, slow recovery. Indeed, unemployment has continued to hover near 10%, and people are understandably antsy.

Which brings me to this… A poll asking about your personal employment outlook. As always, please feel free to leave a comment to add some context to your response.

Note: If you’re reading this via the RSS feed or e-mail, you may need to click through to the site to respond or see the results.

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I’m with you. But tread carefully.

Common wisdom can be both helpful and dangerous.

For example, it tells us that most small businesses fail because they don’t have enough cash flow or are under-capitalized.

That’s true and helpful. If you understand that, you’ll take steps to make sure you have enough working capital and start up capital for your business. The last thing you want is to start up a business and end in trouble looking for business debt relief.

But other common wisdom is false and extremely dangerous to the health of your business.

What is the most dangerous advice?

Do what you love

Why is this such a terrible idea?

Because it encourages you to think of your business as anything but a business.

When you think this way, your business becomes your passion. Your art. Your love.

Hogwash.

You might love giving haircuts but that doesn’t mean you know how to run your own hair salon. It doesn’t even mean you’re a good barber.

You might love playing guitar, but there are plenty of starving musicians who can’t manage their own lives let alone a music store.

Do you love reading? Does that qualify you to own a book store?

I have seen more people fail at small business because they ìdid something they lovedî rather than for any other reason.

Am I saying you should continue doing something you hate just because you make good money?

No.

Am I saying you should abandon your dreams?

Not in the least.

I’m saying there are alternatives.

I’m saying dream big, but be practical.

Keep your eyes open and be realistic. If the universe tells you something, my advice is to listen.

Turn that (false) common wisdom into something powerful and productive.

Instead of doing what you love, love what you do.

Find something in what you do that you love.

Let that part of your work be the expression of your true self.

If you are a lawyer, but would really rather be an artist… Can you find something about the way you practice law that is artistic? I’m sure it’s not that tough.

Or… Can you find a way to be the legal representative for artists?

I met a man who was a wonderful CPA, but he hated it. Let’s call him Jim.

He was bored to death and was desperate to find a better job. But he was cursed with being really skilled at accounting. To make matters worse, he made a great deal of money at the same time.

While he couldn’t stand auditing or doing tax returns, he loved giving strategic business advice to business owners.

He looked for interesting small business ideas but had no idea what business to open.

Then he realized that he should become a business consultant. That way he balanced his skill set with desire to be creative and resourceful. He maintained his tax practice but built his consulting business slowly until he could focus most of his efforts doing that.

Can you leverage your current job and skill set into an area you enjoy?

You may or may not be able to do this. Not everyone is in a position to do so. I understand that.

If you still want to pursue a small business in a brand new arena, go for it. But make sure you are going to love the entire business, not just a small part of it.

For example, when you open your own shop, you’re going to need to do budgeting for your small business. You’re going to have to track your receipts and spending. You’ll need to learn about health insurance. How do you feel about managing people? You’ll have to be a good manager too.

You see, my experience tells me that there really is no free lunch.

Some people will tell you they are blessed. They say they love everything about their jobs. The rest of us are honest – we realize we have to compromise. Find a balance between career satisfaction and financial security.

If I’m right, if we do have to compromise anyway, why not compromise doing something we know we are good at?

I am absolutely convinced that you can find something to love about your work no matter what it is. If not, I’m sure you can leverage your skill set into something you can enjoy.

Do you agree? How have you handled this dilemma?

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The thought popped into my head while my wife and I were on vacation in New York. (Side note – the vacation was debt free!)

While there, we visited two of our best friends – Lori and Nathan. This couple (and their two amazing kids) are a family we love dearly.

My buddy Nate is uber-successful. He is second in command at one of the largest financial institutions in the world – and he’s only 46 years old!

I want to be like Nathan, but I’m not.

I’m delighted for Nathan and honestly not jealous.

But while I was visiting him, I noticed I was beating myself up pretty good.

I asked myself why I wasn’t as successful as my buddy.

I came up with many reasons – some of which I have no control over. I’m not stupid, but I’m not a genius like Nate. Not much I can do about that.

But I did come up with one reason for which I found no excuse – impatience.

Don’t get me wrong. I’m really grateful for where I am in life. But had I been more patient at any number of turning points in my life, things would have been easier and (possibly) better.

Once I came to this realization, I asked myself how to use that understanding to do better rather than as an excuse to put myself through the ringer. Could I use this to improve my small business? Could I harness the power of that realization to improve my investing results?

I came up with a great idea.

I decided to go against myself.

Attack your weaknesses

By nature, I want to get it done and move on to the next issue as quickly as possible. Sometimes I move on too soon.

I decided to be ultra patient in any business or interaction that was on my plate even though it was the last thing I wanted to do.

I committed to slow down and hold myself accountable to others.

The result has been very positive so far. If nothing else, I feel more relaxed.

I’ve also realized that success in certain areas that I’m working on are going to take time. I’m going to force myself to be OK with that.

And once I feel comfortable with my ability to be more patient, I’m not stopping. I’m going to keep listing my character flaws (news flash: I have many). Then, I’m going to go against myself again. My character flaws cost me too much. I’m going to put everything I have into going against the grain.

How can this help you?

Simple.

Find your flaws

Ask yourself what is the one thing that has kept you from where you want to be in life.

Are you impatient like me?

Are you selfish?

Do you fail to think things through?

What is it?

This is super important. It’s painful, but you have to be completely honest with yourself if you want the payoff – and believe me, it’s worth it.

If you’re having trouble coming up with the answer, ask five people you trust and respect. Tell them you are trying to overcome your main character flaws and you need their help to identify them.

Ask your boss and spouse. Ask your co-workers. Your workout partner. Five people.

Once you have identified your main character flaw, write down how it’s impacted you in the past. What has that flaw cost you?

Has your impatience created credit card debt?

Has your laziness resulted in not having the right life insurance?

Has your selfishness kept you from getting your budget under control?

Has your anger made it difficult for your small business to thrive?

Write it down

If you want this exercise to have its full impact, you must actually write this down with a pen and paper. There is something magical about actually writing (as opposed to typing) that I can’t explain. Do it, then tell me if you don’t agree.

Once you’ve done your writing, don’t put your pen and paper away. You’ve got more work to do.

Let the past go. Don’t beat yourself up.

Instead, think about what your dealing with right now.

Are you putting together your estate plan?

Are you trying to launch a new business?

Looking for a new career?

Trying to help your kids get on track?

Think about how your character flaw, if left unattended, is going to make your job harder.

Now write it down. See yourself shooting yourself in the foot. Describe how that character flaw is going to make it harder to accomplish your goal.

Look to the future

Now, map out a different course.

See yourself NOT giving in.

See yourself NOT being lazy, but doing your homework before you buy that life insurance.

See yourself NOT being selfish but thinking of others before you create your estate plan.

Can you see how taking contrary action is going to get you closer to your goals?

How does that feel? Can you write that down too?

Lather, rinse, repeat

The great news is that you don’t have to stop there.

You can use this exercise to master other character flaws in your business and personal life.

Are you willing to do it?

Have you ever undertaken an exercise like this in the past?

What was the result?

Do you have any other ideas that can help others overcome character deficiencies?

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While $3 isn’t much, the time invested is small, so it might be worthwhile if you’re looking for ways to earn extra money. The primary limitation is that Pinecone only accepts applications intermittently, so you have to strike while the iron is hot.

Assuming that their current application window hasn’t closed by the time you read this, you can sign up through this link. Good luck!

Hat tip: Sun’s Financial Diary

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The first time you move into a new place, the entire process can be exciting and fun. For most people, that novelty wears off after a few more moves, with the entire ordeal becoming something you dread instead of looking forward to it.

If you are moving to a new city in search of a new job or to accept a new position, then you might be more willing to put up with the hassles associated with moving. It’s also worth noting that many moving expenses may be tax deductible when you relocate for work.

Today I’m going to look a bit more closely at what expenses qualify and how you can claim these income tax deductions when you file your income tax return.

What moves qualify?

Before you attempt to claim moving expenses, be sure that the move itself qualifies. Qualifying moves are the result of relocating for your current employer or accepting a position from a new employer. In addition to being work related, the move must also pass the time and distance tests.

• Time test: In the first year (12 months) following your move you must work full-time for at least 39 weeks. For self-employed individuals, the first year requirements are the same (39 weeks), and you must work for a total of 78 weeks during the first 24 months.
• Distance test: Your new job must be at least 50 miles farther from your old home than your current (or old) job. In other words, if your old commute was 20 miles, then your new job must be at least 70 miles from your old home in order for your moving expenses to qualify as a tax deduction.

What expenses qualify?

Any expenses resulting from moving your personal effects and household goods can be used as a tax deduction. The expenses must, however, be reasonable to the move. For example, if you are moving from point A to point B, but decide to stop off on the way or take a detour for other purposes, those expenses would not be eligible as a tax deduction.

It’s also important to note that only expenses that are directly related to the move will be eligible. Perhaps the most common non-deductible expenses that you will likely incur while traveling are meals. But when traveling by car, you can deduct gas and mileage as long as you keep good records to prove your expenses.

How to claim moving expenses as a deduction

In order to claim qualified moving expenses on your income tax return you will report information on IRS Form 3903. Total moving expenses incurred while traveling will also be reported on Line 26 of Form 1040.

As with any income tax deduction, it’s advisable to keep accurate records that provide proof of money spent on your eligible moving expenses. Since it’s common for things to get misplaced or even lost while traveling, consider using a large envelope that can be sealed to hold all of your receipts until tax time.

One last thing… If your receipts don’t have dates or a description of the purchase or charge, be sure to make a note on the receipt itself as soon as your receive it so you won’t have to guess what the expense relates to at a later date.

Good luck, and happy moving!

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Breaking it down…

Simply stated, we each have a unique set of passions/interests as well as a certain skill set. At the same time, life presents us with a more or less limited range of opportunities.

While our passions sometimes overlap with our skills, that’s not always the case. Likewise, we’re sometimes presented with an opportunity to work in a field that we’re passionate about, or for which our skill set is particularly well-suited, but…

It’s relatively uncommon for all three to overlap. When they do, the thinking goes, you’ve hit the jackpot. You’ve been presented with an opportunity to work in a field that you’re not only passionate about, but also particularly well-suited for when it comes to the necessary skills.

That’s all well and good, but it leaves out a major variable… Compensation.

What about financial security?

One of the big problems with feel-good career advice such as this is that it often ignores financial realities. Sure, it would be wonderful if we could all work jobs that we love, and in which we excel, but we also have to make ends meet.

Numerous personal development gurus have argued that if you follow your passion, the money will follow. This sounds great in principle, but how true is it in practice? I’d argue that this worldview is overblown, and that there are tons of fulfilling jobs out there that won’t pay the bills.

This isn’t to say that you should chase money over happiness, but you do need to make sure that you can make ends meet. In my opinion, blindly following a passion in hopes that things will magically work out is a recipe for disaster.

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As of right now, the Bureau of Labor Statistics estimates that approximately 15 million people are unemployed. That means you or someone you know has probably suffered a decrease in income due to job loss.

What are some ways you can deal with unemployment? How can you help your friends?

Analyze your financial situation

You will feel better and increase your odds of success if you can visualize your new cash flow on paper. This may be a difficult step, but it will give you a clear picture of where you stand. Remember, the goal is to get a workable plan to keep your family afloat.

Ask all the tough questions now rather than later.

Are you getting a severance package? How long will the money last? Can you maintain your health insurance, perhaps by using COBRA? Or do you need another option? Perhaps you can switch to your spouse’s plan?

How much are your monthly expenses? Figure out what is essential for your bills and start cutting what you can. Do you really need cable? Can you adjust your cell phone bill? Have you tried services like Bill Shrink and Mint to see if you can find more ways to save money? Can you shop more frugally for your essentials?

For example, when buying groceries, could you buy ingredients to allow you to cook meals from scratch rather than using ready-made meals? Cooking homemade meals tends to be cheaper than pre-made food. It could have a significant effect on decreasing your grocery bills.

Develop a financial plan while you’re in between jobs

Use all of the resources available to you

If you can legitimately claim benefits that you’re entitled to, such as unemployment compensation or state insurance benefits, take them. It’s a temporary fix, but it can help take some pressure off as you find your next job. Reducing your monthly expenses can help while you’re looking for your next job.

Find a part-time job while you’re hunting for work

If you can work some flexible part-time jobs, you can alleviate some of the financial burden.

Getting a part-time job can help as you still need to have some available hours for job hunting and interviews. Some flexible part time jobs you may consider include:

• Pizza delivery
• Barista
• Hotel/hospitality
• Call center customer service rep
• Waiter/waitress
• Retail work
• Private tutor
• Bank teller

The idea is to offset some of the income lost as you get back on your feet. Double check with your state’s employment agency to see how your part time job will affect your unemployment benefits.

Avoid credit cards

It can be extremely tempting to use your credit cards as part of your bill pay system, but you should avoid this as much as possible. Credit cards should be considered a last resort, as they can add more financial woes to your difficult situation.

Have a game plan for finding your next job

Utilize your network of friends and family

There are many job openings that aren’t published online or in the papers. Take advantage of your connections and ask friends and family to keep their ears open for any opportunity that would be a good fit for you.

Ask your former manager for a letter of recommendation

If you were a great employee and did not burn bridges when you were laid off, it could help if your supervisor could write a letter of recommendation.

Visit your state’s employment agency

Many state employment agencies offer resume and cover letter help. If you’re hoping to bounce back quickly, it certainly helps to have your best foot forward. And if you’re in a creative arts type of career, make sure your portfolio is updated.

Decide on what you’re looking for in employment

As you work towards the next step in your career, be open to trying different things in your field. Perhaps your skills can be used in a different (and perhaps more stable) industry. Sometimes you can find a better job after you lose your current one.

See if self-employment is for you

You may want to venture out and start earning money on the side. Use this as an opportunity to test the waters by taking some temporary assignments.

Your thoughts

I’m interested in hearing your thoughts about how best to handle a job loss. Do you have a plan in case you get laid off? Have you ever survived a job loss? What helped you to keep your finances in order?

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Some people start out with something like consulting or programming from home for a few hours each day. Others do their freelance work outside their home. Virtually all of these people have to set aside time and space for invoicing their customers and managing their business finances.

One thing that most freelancers need is their own home office space. Having a home office for your side business is a great idea, but it can be easy to start focusing on the wrong things and turn that extra income into a big expense. Managing and maintaining a home office takes a mix of frugality and creativity.

Organizing your bookkeeping

Quite simply, if your side business isn’t taking in more than it’s costing, then you’re in trouble. If you haven’t already, open a separate checking and savings account for your business, even if it’s only a small amount of side income right now. It’s good practice to separate your personal finances from your business finances — especially if you want to set up a formal business and limit your personal liability.

After determining your budget, you need to figure out how you’re going to keep track of your finances. Besides keeping your own ledger or spreadsheets, you’ll probably want look at software to keep yourself organized. Popular bookkeeping programs include:

• QuickBooks
• Peachtree
• Quicken

When comparing financial programs, see if this is something you actually need or if it will complicate your finances. If you’re spending most of your work time getting the invoices right, you need to switch to another program.

Equipping your office on a budget

Decide on Your Budget

Don’t just go out and buy the latest equipment in hopes of deducting it at tax time. As you look at your finances, decide if you really need a certain piece of equipment. Can you justify the extra expenses? Or are you just looking for an excuse to buy a fancy new gadget? Look at your regular expenses for your side business and plan your budget accordingly.

Deciding where to have your office

Next, spend some time finding the ideal spot for your office. You need your office to be in a quiet, less trafficked part of the house if you plan on getting any work done. Don’t have your desk and equipment in your bedroom if you can avoid it — this will blur the lines of work and home, and you may find yourself struggling to stop (or start) working.

Office furniture and office equipment

If you’re looking for office furniture, consider starting off with Craigslist and grabbing a deal from an entrepreneur who is moving up. Get creative and hunt around at local yard sales. You will be surprised at what you can find if you’re willing to explore. If you really want to upgrade your furniture, wait until you hit a financial milestone. That way, every time you sit down in your new chair, you’ll think of the 5 new clients you’ve acquired.

When you’re first starting out, you should also learn to make do with what works instead of drooling over top of the line business equipment. For example, Google Voice is a free communication system that allows you to manage your calls, voice mails, and text messages all in one place. If you’re a one person operation, this can be a great option. You won’t have to buy a separate line for your business, which may be overkill anyway.

Unfortunately, Google Voice is by invite only right now. For their part, Google says they are trying to keep the wait short, so you might want to go ahead and request an invite. Another alternative is Skype, which allows you to upgrade from their free service to an inbound landline number.

Maximizing productivity

It can be hard to work from home for some entrepreneurs. If you have children at home, they may have a hard time understanding why you’re working even though you’re home with them. Try to have set work hours and try to be consistent with them.

Some people work after the kids are in bed, while others wake up a couple of hours early to get their work done, or do it while they’re in school. The point is you have to have a set amount of time to hustle if you want to generate a consistent income.

How do you know if you’re wasting valuable work time for frivolous activities? Just like you would with finances, you need to see how your spending your time first before optimizing it. I find Rescue Time to be helpful with keeping track of what I’m doing.

Your thoughts on managing a home office

The wonderful thing about having a home office is that you don’t have to buy the latest equipment and software to get started. You can start small and build slowly according to your business needs.

Do you work from home either part-time or full time? If so, how do you keep your finances organized? What steps have you taken to create a useful work space? And how do you remain productive?

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“The work-at-home lifestyle can be incredibly satisfying and an effective way to be closer to your family.”

Working from home is a dream that many of us tend to put up on a pedestal as an ideal scenario. I’ve heard many people say they’d be happy if they could just work from home… But would working from home really solve their problems and bring them happiness? Many who already work from home say that it takes a much higher level of self-discipline to succeed as compared to working outside the home.

Let’s examine a few key topics relevant to working from home and outline a rough road map to success.

Self discipline

“In reading the lives of great men, I found that the first victory they won was over themselves… Self-discipline with all of them came first.”

-Harry S. Truman

As I transition from my old job to my new job, I have been blessed with an entire week off from work. In fact, as I type this article, I am waiting at my mechanic’s shop while they change the oil on my wife’s vehicle.

When this week started, it seemed like I was going to get so much done during my time off, but I have actually accomplished very little. Why is this? I see it as little more than a lack of self discipline.

After this short stint of freedom from employment, I would liken working from home with no self-discipline to driving a car with no feet… There is just no way to be successful. If you are thinking of making the switch to home-based employment, make sure that you have a high level of self-discipline and self-motivation or success will likely elude you.

The grass is always greener

“The grass is not, in fact, always greener on the other side of the fence. Fences have nothing to do with it. The grass is greenest where it is watered. When crossing over fences, carry water with you and tend the grass wherever you may be.”

-Robert Fulghum

If you have a bad attitude, and/or are stuck working a job you’re not crazy about, it is easy to fall victim to the grass is greener syndrome where anything looks better than the current situation. Why do you want to work from home? Is it because you hate your job? Perhaps you’re just lazy or have a bad attitude. If either are true, chances are you would be just as unhappy working from home as you are in your current job.

Before you set out to begin working from home, try adjusting your attitude and/or your work ethic and examine your current situation again.

Rough road map to work from home success

Proper attitude and discipline are key to succeeding as a home-based worker. Follow these additional tips to increase your likelihood of success.

1. Turn off the TV. Perhaps the best advice is to ensure that you do not plop yourself down in front of the television. Avoid doing this at all costs. The TV has a unique ability to suck the work and motivation right out of you. Some people like the television for background noise, but I would argue against this being beneficial for most situations. Rather than using a TV for background noise, try turning on the radio… Music can be very motivating.
2. Create a work space. Be sure to have a space designated to work. It is advisable to stay out of areas of comfort like your bedroom, the living room, etc. Your work space should be a space devoted to work, not relaxation. When you are there, you are working. Period. Make the space motivating and exciting. Surround yourself with things that inspire you and be sure to paint and decorate your space with colors and things that drive you and persuade you to accomplish.
3. Set goals. What are you shooting for? What do you wish to accomplish? Make sure you write these things down and put them some place where you will see them often. Set both long term and short term goals. Your short-term goals should break your long term goals down into achievable chunks.
4. Have and maintain a schedule. Use a calendar to keep track of what needs to be done each week. Spend at least 30 minutes each day populating your calendar with jobs, tasks, and errands that need to be done. Planning things out helps to motivate and maintain purpose and direction, along with showing you precisely what work needs to be done each day.
5. Make lists. Use your goals and schedule to create daily to-do lists. Create your to-do list for the next day at the end of each work day, that way you come to get to your work space each morning with clearly defined tasks.
6. Get up and go to work. Treat your home-based work just as you would any other job… Get up, take a shower, head over to your work space, and get to work. Do not let yourself wander into other areas of the house, just get ready then get right down to business.

In closing…

If you have ever worked from home, or are considering making the move, please share your experience here to help others along their way. Be sure to include any tips that I may have overlooked.

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The cost of a college education

For starters, let’s take a look at the cost of a college education. According to CollegeBoard, a private four-year college in 2009-2010 costs an average of $26,273/year. In contrast, the average cost of a public four-year college is $7,020/year (presumably for in-state tuition/fees).

Adding it up, and ignoring possible inflation while you’re attending, students attending a public school can expect to pay around $30k for a four-year degree, whereas those at a private school are looking at a tuition bill somewhere north of $100k. Of course, there are also living expenses, though you’d likely incur those whether or not you were in college.

Earnings as a function of education

Next up, let’s take a look at the effect of education on your earning power. While there are obviously exceptions (e.g., Bill Gates, LeBron James, etc.), the general rule is that your earnings increase significantly with increasing education.

What follows is a breakdown of the 2009 median salary numbers of full-time workers aged 25 and over based on their level of education.

Simply finishing high school results in a 38% in median salary, whereas completing that bachelor’s degree results in a 41% increase over some college (or an associate’s degree), and a whopping 64% increase over just having a high school diploma.

Unemployment as a function of education

Finally, let’s set aside earning potential for the time being, and simply look at unemployment rates as a function of education. As you’ve no doubt heard, things are tough all over… Or are they?

What follows is a breakdown of unemployment rates as of February 2010 based on level of education.

While unemployment rates have been hovering around 10%, those with a college degree have an unemployment rate that’s right around half the national average.

While all of the numbers in the table above are higher than normal given the current state of the economy, a college education appears to provide a clear benefit when it comes to finding and/or keeping a job.

You make the call

So… Given the above numbers, what’s your take? Is a college degree worth the investment? In my book, the answer is yes — assuming that you’re qualified. That being said, it also pays to make smart decisions when it comes to selecting a major.

Source: BusinessWeek and CollegeBoard

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“a job in which there is little or no chance of progressing and succeeding into a higher paid position. Such work is usually unskilled and the phrase usually applies to those working as shelf stackers, cleaners, or other menial jobs where the pay is low, and the hours are long.”

What do you think? I think that they touched on part of it, but I also think there’s more to it than that. Let’s talk about the different ways to tell whether or not you are in a dead end job.

Signs you may be in a dead end job

No passion for the work

Having trouble feeling any passion for your work? Have you wondered whether or not such a passion even exists? If you answer yes to either of these questions, you may be working in a dead end job. If you need help figuring it out I highly recommend Gary Vaynerchuck’s book Crush It!

If you are unhappy, dissatisfied, or restless in your current position, it may be time to re-evaluate what you do and where you do it. Personally, I’m at a crossroads in life where I may continue in full-time IT work, or I might move into full-time writing. How will I decide? By experiencing both and seeing which path best suits my gifts and goals.

If you are not passionate about your work… You might be in a dead end job.

No passion for the company

Is your company doing something you can really get behind? In a perfect world, I suppose we would all delay employment until we could find that one blessed company that would help us save the world. Unfortunately, debt, bills, and other monetary obligations often drive us to take a job whether or not we’re passionate about it.

While our ability to choose our employer may have to wait until we are either in high demand or completely debt free, we should still make every effort to work for a company that has similar passions to our own.

If you are not passionate about your company… You might be in a dead end job.

Goals are not aligned

Do your career goals align with the goals of your company? Do you know what your goals are? Are you aware of the goals you company has set? It is very important to ask your employer to communicate and clarify the goals of the company. When you do this, you paint a clear picture of whether or not it is in your best interest to continue in your current position with that company.

If your goals do not align with the company goals… You might be in a dead end job.

No room for advancement

In my current job, I am an IT Manager. The only position I could ascend to would be president of my company. Since I don’t see that happening anytime soon, I have little to no room for advancement. Do you?

When you’re in a position with no room for promotion, you’re boxing yourself into a career corner. Unless you are content with living and working within that specific box, you should probably consider expanding your horizons rather boxing yourself into job dissatisfaction.

If you have no room for title promotion… You might be in a dead end job.

Little to no boost in responsibility

Are you ever asked to take on higher levels of responsibility? It’s not uncommon to be offered more responsibility without being offered a new title or promotion. If you’ve worked at the same company, in the same position, with the same responsibilities year after year after year… I encourage you to reevaluate your employment.

Are you working hard enough? If so then why have you not been asked to take on more work or more responsibility? When an employer trusts your work, they tend to move you into higher and higher levels of responsibility, as long as those levels exist within the company.

If you have little to no chance for boosts in responsibility… You might be in a dead end job.

Little to no salary increases.

I suppose a lack of salary increases is the attribute most commonly associated with dead end jobs. If you have worked the same job for several years without a significant raise or bonus, you may want to reconsider the position.

You should take into consideration whether or not your lack of progress has been because due to poor economic conditions, but don’t make this the only variable. A solid gauge is company profitability. If your company has been profitable for in recent years but you haven’t benefited, there may be a problem.

If you have little to no chance at salary increases… You might be in a dead end job.

Make sure you work hard

If you see your current position as a dead end job please be certain the problem does not lie in your own poor job performance. The last thing I want to do is motivate lazy people to rag on their employer because of their own laziness.

That said… If you do bust your tail for your employer but still fall into several or many of the categories listed above, it may be time to reconsider your position, your company, and maybe even your career.

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When is the last time you stumbled across proper techniques for negotiating your salary and increasing your top line? While frugality is an important component of a healthy financial lifestyle, salary negotiation is also an important skill to master.

Think about how much time, money, and energy you’ve spent earning a college degree, sculpting the perfect resume, seeking employment, and interviewing for countless positions. Given this investment, why not spend a bit of time properly preparing to negotiate your pay?

Consider the following scenario…

You walk into a prospective employer’s office. You’re dressed to impress, portfolio and resume firmly in hand. You meet Mr. Employer, make some small talk, and answer the typical cheesy interview questions to ensure you’re the best candidate for the position. And then…

WHAM! You’re asked, “So… What sort of salary are you looking for?”

What do you do?

Rather than freeze and stumble around for the right number you should follow the first rule of salary negotiations which states: there is one time and only one time to discuss your salary expectations, and this IS NOT IT! Sidestep the question like your life depends on it!

Jack Chapman, leading career consultant and author of “Negotiating Your Salary: How to Make $1000 a Minute,” suggests two essential rules.

Two must-follow rules for salary negotiation

1. Discuss money only after they’re ready to hire you.

This rule applies to the Human Resources screening interview, as well as the main interview(s). Anytime someone asks something like “What is your current/previous salary?” or “How much do you want to make?” — dodge them.

Why? If your past salary was too low, you run the risk getting a lowball offer. Conversely, if it was too high, you might blow past what they’re willing to pay. A premature disclosure of your previous salary undermines your bargaining power.

FYI: Focusing on salary during the interview process is the employer’s way of getting the most competent person for the least amount of money. Don’t relinquish key information early in the process.

In order to evade the question, you need to respond confidently, but remember… There’s a fine line between confident and cocky — make sure you don’t cross it!

Here are a few examples of what to say:

• “I’m sure we can come to a good salary agreement if I’m the right person for the job, so let’s make sure I am!”
• “Well, so far the job seems to have the right amount of responsibility for me, and I’m sure you pay a fair salary, so let’s hold off on the salary talk until you know you want me. What other areas can we discuss?”

Do this for the first and second requests alike, but if they continue to probe, you’ll have to defuse the situation. If things get tense or awkward, try softening your statements with one of the following:

• “I get anxious when talking about money.”
• “When we discuss money, I’m afraid that I’ll be screened out or boxed in so could we hold off on that?”
• “I’ve noticed that we’ve come back to salary again. While I’m happy to talk about money, I’m not sure why we need to discuss it now.”

If this doesn’t work, and they insist that you divulge your salary requirements, you can cave in, but it’s not recommended.

Now that you’ve positioned yourself for optimal negotiation by side-stepping their requests, you’ll want to make sure you follow the second rule…

2. Make them go first!

Because you’re so awesome, the job offer is now on table and — if you exercised your skills from above — your salary requirements are still unknown. After the job has been offered, the salary talk could come next, last, or somewhere in between.

Regardless of when the topic comes up, as soon as Mr. Employer asks “How much would it take to get you to come aboard?” Do whatever you can to avoid answering with a number!

Instead… Make them go first! Once again, why would you want to risk being too high or too low. You never want to price yourself out of the job, nor do you want to undercut your true value.

Nine times out of ten, they’ll already have a budget set aside for the position. In most cases, it will actually be a range, and you want to land at the high end. At this point, your goal is to find out exactly what that range is!

Reply with one of the following:

• “I’m sure you have something budgeted for this position, what’s your range?”
• “I have an idea of the market, so let’s start with your range.”

If you can get them to divulge their range, then you have them exactly where you want them. As soon as you know your target, start giving them solid reasons why you should be near the top of the range. And remember… If they’ve offered you the job, chances are they think you belong there too!

One final strategy

I’ll leave you with the most surprising and unnatural yet most effective tactic:

SILENCE.

For example: Let’s say they extend an offer, saying “We can offer you $XX,XXX/year and would like for you to start as soon as possible.”

What should you do?

NOTHING! Repeat the offer in a quizzical tone “$XX,XXX?” and sit in silence for 30 seconds or so. This could very likely make them squirm, wiggle, or feel uncomfortable enough to up the ante without your ever really responding to the first offer.

I actually gave this advice to my buddy Fred when he was on his way to an interview a few years back, and it worked! Fred was offered the job, but remained silent when the first number was given. He said that after about 10 seconds of silence, the prospective employer came back with, “Well, we could go higher if that isn’t going to work for you.”

Fred ended up getting $5,000/year more than originally offered! I’m still trying to get him to give me a cut of that since it was my advice that got him the money!

Closing thoughts

Remember… I’ve only highlighted a few of the most powerful concepts introduced in Chapman’s book. He actually covers much more, including how to get raises, and how to arm yourself with industry salary standards to justify the salary you deserve.

I highly recommend this book. It has empowered me tremendously, and I’m confident that it can do the same for you. It’s an easy read, and if you insist on working for other people, it will be a very helpful tool.

What are some of the salary negotiation tactics that have worked for you?

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Examples of the Pareto Principle

The Pareto Principle is named after Italian economist Vilfredo Pareto (1848-1923), who observed that 80% of the land in Italy was controlled by just 20% of the population. Intrigued, Pareto looked to other countries and found similar ratios. More recently, a 1992 United Nations study revealed that 80% of the world’s wealth (actually 82.7%) is controlled by 20% of the population.

Looking more broadly:

• It’s been long recognized, or at least assumed, that 80% of sales come from 20% of clients (or 20% of salespeople).
• Microsoft has noted that, by fixing the top 20% of bugs, they could squash 80% of errors and crashes. (Note: I wonder when they’re planning on doing this…)
• In 2000, 20% of taxpayers paid 81.2% of US income taxes. (Note: This is perhaps not surprising given the large share of wealth that they control.)
• 20% of employees account for 80% of absenteeism.
• It appears that fellow blogger J.D. Roth wears 20% of his shirts 80% of the time (if not more).

And the list goes on.

Why the Pareto Principle matters

To see how this principle can help you in everyday life, it might be best to turn it around…

What would you do if I told you that 80% of your efforts are (in many cases) largely wasted, producing only 20% of your results? I’d be willing to bet that you’d take a closer look at how you spend your time and make some changes.

While it’s arguable whether or not the numbers really work out to 80/20 in any particular case, the larger point still stands… The majority of your productivity typically comes from a minority of your efforts.

By looking critically at how you spend your time/effort, you can dramatically improve your productivity. Try to identify the things that produce the most results and focus on doing them. Likewise, try to shun (or at least streamline) activities that don’t produce much in the way of results.

The same principles can, of course, be applied to things like spending. While you may have certain critical things that are indispensable, yet only used rarely, I’d bet that you only regularly use a small fraction of your “stuff.” If you can learn to look at your purchases with a more discerning eye, your money will go further, and you’ll wind up with far less clutter.

Have you ever evaluated how you spend your time/efforts/money in this way? If so, what did you find? And what (if any) changes did you institute?

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Today I will outline a few simple and concrete ideas that aim to help employees gain a better foothold on their career, strengthen their likelihood of maintaining employment — and income, and even creating the possibility of a raise or bonus.

Being able to impress your boss by standing out in a crowd is one surefire way to achieve job security. Just like any other worthwhile goal, it won’t be easy, but it will be rewarding.

Ask how you can improve

When was the last time you considered approaching your boss to ask how you can improve? I suggest asking him/her to answer the following questions in an effort to help you support him and his company more effectively:

• Please list the top three things that I do well. It’s important to be aware of the things you are already doing well, so you can continue to do those things.
• Please list the top three ways in which I could improve. Being able to take constructive criticism properly is a true mark of a good employee.
• Please share one short-term and one long-term company goal. This will help you to fix your gaze upon the goals of your employer, and will provide valuable insight into what the company’s strategic plan is going forward.

Align your goals

You cannot sustain a successful career if you don’t believe in what you’re doing. Likewise, you’ll be much more successful if you’re on board with your employer’s goals. If you’re not on the same page, then maybe it’s high time you re-evaluate your position and consider a new company or career. Otherwise, jump on the company train and don’t look back!

• Use the feedback you’ve received. Take the answers your employer gave to your goal questions and develop a few concrete things you can do each day to promote and help reach these goals.
• Formulate your own short-term and long-term goals. I liken corporate goal setting to running a relay race – the team is only as strong as their weakest link. DO NOT be that weakest link. Instead, strive to be the strongest link! Your efforts will not go unnoticed!

Put yourself in your employer’s shoes

If you were running the company, how would you want the person in your position to behave/perform? This is a very powerful concept that, when properly employed, will always yield the peaceable fruits of success and improved relations.

Be painfully aware of these “boss pet peeves” that breakdown the relationship between you and your boss on a daily basis:

• Don’t fake sick days. If you’re legitimately sick, then by all means… Use your sick time, that’s what it’s for. But do not abuse this benefit. Better yet… If you’ve been out sick, provide your employer with a doctor’s note. This will put the issue to rest for good and will build trust between you and your boss.
• Always be punctual. When I hire people, this is one of my big concerns. I don’t want to worry that you might be late, or wonder if you’ll show up at all. If you have trouble being on time, change your targeted arrival time by 15 minutes so you’ll have some leeway.
• Don’t make excuses. Excuses are like belly buttons… Everybody has one! How would you feel if you were affected by a co-workers poor performance only to have them come back with a pile of excuses. Let’s be honest, nobody likes being put in this position, so don’t be that guy!
• Don’t just go through the motions. One of the single most useful pieces of advice I can give is to under-promise and over-deliver! Don’t just do the bare minimum. Go the extra mile. If you’re continually surpassing the expectations of your superiors, it’s only a matter of time before a bonus or raise will come your way.

Another good strategy is to identify daily frustrations that your boss has to deal with and then go out of your way to not only avoid them, but to prevent them. This will REALLY put you in good graces of the people that sign your paycheck. Beyond this, you’ll feel better about yourself as your performance improves.

What about you?

I think it’s safe to say that we have all been the “bad employee” at least once or twice. So why not take this opportunity to shed any bad habits that you’ve picked up and start building the simple foundations of success that I’ve outlined above. How do you set yourself apart? What are you doing to build credibility with you employer?

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I’m currently reading “Your Money or Your Life,” a true personal finance classic. As great as it is, however, I won’t be reviewing it here. Instead, I wanted to share their take on calculating your real hourly wage.

While calculating your hourly wage might seem straightforward, it’s a lot more complex that simply saying, “I make $400 a week and work 40 hours, therefore I make $10/hour.”

When you factor in all the additional expenses associated with your job (some of which may not be obvious), you begin to see the value in this calculation. In my case, my old corporate gig paid a reasonable wage, but when I added up all the additional time spent and expenses required, it really didn’t pay that well.

Adding up the hours

In my case, I used to drive 18 miles to work each day, requiring an extra 60-90 minutes of drive time. The process of getting ready for work each morning required another half-an-hour.

My lunch time, while a break, was still time that I was not entirely “free” to do what I wanted. Since I was not paid for this time, it needs to be accounted for.

The book mentions some other hours that you might also want to consider…

• Decompression time: How long does it take you to get back into the swing of your “non-work” life each evening?
• Job-related illness: Factor in time lost due to illnesses resulting from the stresses of work, etc.

Adding up the costs

Expenses are the other part of the equation, as they reduce your effective take-home pay. While it can be hard to identify all of your work-related expenses, you can bet that it’s a lot more than gas money and parking. For example, wear-and-tear on your car is a very real expense that many people don’t factor into the equation.

Like many other people working in corporate America, I also had work clothes that I had to buy and keep looking nice every day. Even if I brought my lunch from home, I was limited to certain items based on the time and tools I had available to eat my lunch each day.

Now that I am blogging full-time, I’ve realized that I’m avoiding a lot of the expenses that I used to incur on a regular basis.

You can be as conservative or as liberal as you want with this equation, but the book has many more ideas…

• After a hard day, do you ever go out to dinner/dancing/the mall as a reward?
• Do you own a more expensive car/house/clothes/etc. than you otherwise would, in order to help sales or your career?
• Are there expenses that you are paying others to do that, if you had more time, you could do yourself? (e.g., gardening, repairs, cooking, cleaning, etc.)
• Are there foods that you buy because you’re too tired to cook dinner? Weight loss programs you enroll in because you’ve been too busy at work to lead a healthier life?
• Do you have escape entertainment or vacations you take part in that you wouldn’t if you didn’t have a stressful job?
• Are there childcare expenses that could be avoided without your job?
• Are there career-related books, seminars, videos, etc. you use and pay for out of your own pocket?

I think there should be a balance when adding up these costs. Don’t get carried away blaming everything on your job. Regardless, it’s always a good idea to re-evaluate each expense.

Why should you care?

Retirement

Calculating your real hourly wage is an extremely valuable exercise for people nearing retirement. It can be very eye-opening to see how many expenses could be avoided by simply NOT having a job. My hunch is that a lot of people would realize that they can survive on a much lower income if they looked closely.

Stay-at-home-spouse

Many parents want to stay home with their kids, and this exercise might make that decision easier. Is an effective wage of $3/hour worth having a job you don’t like and sending kids to daycare rather than being at home with them?

Career/employer change

I used to work with a woman who drove something like 60 miles to work each day. She didn’t really like her job, and ultimately realized that she could take a $6/ouhr paycut doing something she enjoyed and still come out ahead.

A lot of jobs, especially if you stay in the same industry, have similar expenses. After calculating your real hourly wage, however, you might just be willing to take a chance on that dream job you’ve always wanted.

What’s your real wage?

Have you ever run the numbers? If so, were you surprised by the outcome? Disappointed? Have you made any lifestyle changes as a result of what you learned?

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The reason for the height effect remains unknown, but it’s been suggested that being tall boosts self-confidence, thereby making people more successful. Interestingly, while the authors initially set out to test whether or not overweight people are paid less, there was no corresponding effect of body mass index (BMI) on earning power.

Source: The Economic Times

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If you lose your job, hear rumors of layoffs at your company, or pick up just about any other indication that you job may be in jeopardy, you’re gut reaction may be to launch a job search. While doing so makes sense, you should direct some of your efforts to other areas, as well. In fact, you may even want to do this if your job is “secure” (whatever that means nowadays).

The nature of employment is changing, and you need to adjust with those changes. Three areas which should be at the center of your efforts going forward are skills development, networking, and pursuing opportunities.

Skills development

One disadvantage to having the same job for a long period of time is that your skill set can get rusty. The longer you’re with one employer, the more likely you are to have skills that are of value to just that one company. If you lose your job, that custom skill set can become excess baggage.

Start by inventorying the skills you have, including those that have gotten a bit stale from lack of use, and work on getting yourself back up to speed with them. At a minimum, make sure that you know what you know.

It’s also important to add in new skills whenever possible. While we should all be doing this all the time, life sometimes gets in the way. In an economy such as the one we’re now in, however, you need to make learning new skills a top priority.

If you’re currently employed, try to arrange your schedule to create regular blocks of time for this sort of learning. If you’re already unemployed (or under-employed), this effort is worthy of equal time alongside your job search efforts.

What kind of skills you need to develop will depend largely on what field you work in, or would like to enter in the near future. Some common skills include public speaking, HTML/web design, accounting, customer relations, general business software (Excel, PowerPoint, etc.), industry specific software, foreign languages, repairs, web marketing, and interviewing skills. Start by picking one or two, work to master them, and then add more over time.

Fortunately there are all kinds of how-to programs available on the web as well as at the bookstore. You can engage in self-study with a book, software system, or web download. All of these are relatively inexpensive, and you can do them on your own time. For more challenging skills, consider taking a class as a local community college. An alternative approach would be to work a part-time job that will allow you to hone your skills while you’re getting paid.

Remember… You don’t necessarily have to be an expert — just having working knowledge in a particular area can shift the job selection process in your favor.

Networking

Most of us are pretty good at networking within our own field, but it pays to get outside your usual network. Being active in networks that aren’t directly related to your own field can give you access to new opportunities, especially since your skill set will be somewhat unique amongst your peers.

Fortunately, the internet has made networking in virtually any career or business area easier than ever. There are thousands of blogs and forums covering just about any industry, and a large number of these are very welcoming to outsiders. You should also consider joining local network groups and/or general business networks, as face-to-face networking can be even more effective than joining web groups.

When interacting with others, be prepared to share your story and let other know what you’re looking for; in sales, this is called “asking for the order.” Just remember that networking works both ways. Be sure to offer support and relevant leads to others. After all, the more value you can offer, the more value you’ll receive.

Pursuing opportunities

Consider dropping the word “job” from your vocabulary, and replacing it with “opportunity.” After all, that’s what you’re really looking for.

What’s the difference? A job is typically a full-time, fully-benefited source of permanent employment that represents a clearly defined place on a company organizational chart. This version of employment is gradually disappearing, a trend that was developing even before the recession.

Nowadays, many employers are scaling back their employee benefits, including 401(k) plans and company paid health insurance. Many other employers have switched to the heavy use of contract employees. With traditional jobs disappearing, it’s to your advantage to seek opportunities whenever and wherever you might find them.

Be open to contract work, even if you’ve never done it before. Likewise, consider part-time work, partnerships, affiliate arrangements, and temporary situations. None of those are jobs per se, but all provide you with an opportunity to earn income, learn new skills, and develop valuable new contacts.

You might also consider the possibility of balancing two or more opportunities. For example, a contract arrangement combined with a credible business venture might get you back to the level of pay you’ve had in the past, even though you haven’t been able to find an equivalent job in your field.

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1. Don’t panic — assess where you stand

When you lose your job, you should try to remain as calm as you can and see exactly what the situation is. Ask yourself:

• How much money do we have in the bank?
• How much are our monthly bills?
• How much am I receiving for severance?
• What do we need to modify in the budget?

2. Update your friends and family about the situation

You may feel embarrassed or ashamed by what happened. Do not let that negative thinking stop you from getting emotional support. Ask your network to please keep their eyes and ears open for any employment opportunities that they might hear about.

You should also ask your family to help you come up with ideas to earn extra money and/or decrease your expenses. Having everyone on the same page will allow you to work through this challenge together as a family.

3. Open your mind to different jobs

You need to cast a wide net, so don’t just look for jobs exactly like your last one. Being too focused on one particular job may decrease your chances of finding work. You might also consider taking on part-time work to keep you from hemorrhaging financially. Until you find a suitable job, working part time can generate income and provide you with a schedule that allows you to go on job interviews.

4. Update your budget

At this point you should try to focus on cutting any nonessential expense from your budget. Living within your means is going to be tougher as you make this transition. Update your budget with the new income amount and see where you can adjust accordingly.

If you can’t pay all your bills, then prioritize where your money goes. First and foremost, your money should go to housing and food. Utilities such as electricity are also important so focus on those next. You should also give priority to medical bills and expenses when updating your budget.

5. Stay away from credit cards

You might be tempted to put your expenses on a credit card until you can find a job. Don’t do it. Credit cards should be a last resort. Instead, see if you qualify for any sort of government assistance to help make ends meet.

This could mean filing for unemployment or applying for state insurance. Remember, this is only temporary — you’ll eventually get out of this predicament. Relying on credit cards can put you in an even deeper hold given the high interest rates and fees associated with them.

Now it’s your turn…

Losing a job can be a very painful experience, especially if you have a family. Remember, you can’t do this alone. Rather, you should seek the help of others when getting back on your feet.

Do you have any tips for dealing with job loss? What’s the most important step?

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I don’t know why, but I’ve been getting free issues of a magazine called Time Out Chicago for the past few weeks. It sums up what’s going on in the city, things to do, good deals to be had, and other stuff.

This week, the cover feature was “Make Money: 44 Ways to Score Cash Fast.” I figured I’d thumb through it and find a bunch of tried and true tips for earning extra money, or maybe some money saving ideas — the kinds of things that you see on personal finance blogs all over the ‘net.

Instead, I found some ideas that I had never heard of before, and I wanted to highlight them here. Some are wacky, some are kinky, and some are downright ridiculous. But who knows, if these people are doing it, maybe you can too:

• Polish your acting skills. Head to the hospital and pretend that you have a ruptured spleen or a busted johnson (my personal favorite). Hey, Kramer did it on Seinfeld, and all he had to do was get gonorrhea. $14–$35/hour.
• Sell your underwear on online. Hey, if people are willing to buy chewed-up gum and potato chips that look like the Virgin Mary, why not panties? $15 apiece.
• Sex talk. Phone sex operators can make some pretty good money and all you need is a landline and your imagination. This reminds me of poor Adam Sandler in Punch Drunk Love… Scamming potential clients would probably be more lucrative. $9–$20/hour.
• Take off your pants and jacket. Donating sperm is still in vogue, and can net you $25 per deposit. For the ladies: you can donate your eggs for $7,000–$10,000… But you’ll have to go under for it. Scary.
• Sell plasma. Giving blood is always fun, but at $20–$30 for two hours, I don’t know if it’s worth it. Plus the needles and the blood…
• Be a script writer. This one appealed to me because I’m a writer, but this is simply transcribing stuff. If you can type and have your own equipment (a PC should suffice) then you can rake in $16–$20/hour. The pros can charge from $110–$165, so make sure you underbid them.
• Special delivery. One guy runs a site called The Kinky Llama, and he delivers sex products on his bike. Anywhere, anytime. Sound crazy? He probably is, but he makes about $1,500/week. Not bad… Let’s hope he doesn’t drop his cargo all over the street though — it could be scary.
• Get hitched. Marrying for money has a price tag, and apparently it’s between $5,000 and $50,000. Of course, you have to go through all the hassle, and maybe even kiss the person to convince the authorities, but if you’re desperate I guess it’s an option.
• Get naked. This is probably the easiest tip of all. Nude models just have to stand there and hold a pose while ersatz painters ogle them. You can make $15/hour, but I don’t know if I could stand still long enough to make it worth my while. At least it would motivate me to go to the gym more often.

I’m curious how many people out there would actually try out these tips. If you’re interested in any of them, just do a little research and I’m sure you’ll find something similar in your area. If you do, then be sure to come back and tell us how it went… As long as it isn’t too embarrassing.

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Here’s the answer straight from the IRS (see Topic 418 for more details):

Unemployment compensation is includible in gross income. You must report unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ.

If you receive unemployment at some point during the year, you should received Form 1099-G showing how much you were paid. Oh, and if you don’t make a “voluntary withholding request,” you might have to make estimated quarterly tax payments to avoid an underwithholding.

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Given that benefits coverage often ends at the end of the month during which the layoff occurs, you might have to act quickly. Alternatively, you may be able to extend your health coverage under the Consolidated Omnibus Reconciliation Act of 1985 (commonly referred to as COBRA coverage) which should extend your FSA eligibility.

On the flip side, you’re allowed to spend money out of your FSA faster than you put it in. Thus, you may have a negative balance in your FSA upon termination. While it’s possible that your (former) employer will ask for reimbursement of the overage, we’ve discussed this here before, and it’s not clear that you have to comply.

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Earn more money from your current job…

A logical place to start when trying to improve your lot in life is to focus on your current line of work. Here are three different ways to get more from your job:

• Ask for a raise. One of the easiest ways to earn extra money is to get more for what you’re already doing. With that in mind, you should work to excel in your work, build a case, and then ask for a raise.
• Position yourself for a promotion. Another great way to earn more from your work is to get promoted to a higher paying position. Do whatever you can to excel. Go above and beyond the call of duty around the workplace and consider taking advantage of any training opportunities that you can find.
• Find a new job. A great way to increase your earning power is to get a job offer. Even if it’s a lateral move, and especially if it’s not, switching jobs is a great way to increase your salary.

Unfortunately, now that the economy is in the crapper, it’s probably not the best time to ask for a raise, push for a promotion, or angle for a new job. While it can’t hurt to try, you may need to look elsewhere in hopes of generating extra income.

Earn extra money on the side…

There’s an almost infinite number of ways to generate a bit of extra cash. Whether it’s picking up a second job, doing odd jobs around the neighborhood, or selling stuff, you’re really only limited by your time and imagination. Here are 30 33 more ideas for earning extra money on the side.

• Get a second job. While the job market is tight and getting tighter, picking up a second job is a surefire way to earn extra money.
• Take on a paper route. Paper routes aren’t just for kids anymore, and you can usually knock it out during the pre-dawn hours, so it doesn’t interfere with work.
• Deliver phone books. Over the weekend, we got the latest edition of “The Real Yellow Pages” delivered to our doorstep. You won’t get rich, but it’s not particularly difficult, and you can do it on your own time.
• Do yardwork/lawncare. More and more people are outsourcing their lawncare. Why not get a piece of the action? You can make a few bucks and get some exercise all at once.
• Shovel (or plow) snow. For those in cold climates, you can make good money removing snow. Here again, you can also get some good exercise. Sure, snowfall isn’t as predictable as grass growth, but it’s a great alternative during the winter months.
• Clean homes or offices. Just like lawncare and snow removal, there are a ton of people out there looking for help around the house.
• Do tax prep on the side. Companies like H&R Block are always looking for temp employees during tax season. Thanks to Miss m for the tip.
• Become a golf caddy. Sure, this is a job that is often done by teenagers, but there can be good cash in it.
• Start babysitting. Babysitting can be quite lucrative — check out how much people pay babysitters — and it’s also very flexible.
• Start pet-sitting. I know from personal experience that there’s good money in pet sitting… Whenever we travel we need to find someone to board our bearded dragon (seriously), and we always spend way more than we should.
• Become a tutor. Do you live near a high school or college? Are there any subjects that you’re particularly good at? If so, then consider tutoring in your spare time.
• Teach a language. For those that are fortunate enough to be fluent in a second language, you can make money teaching it to others. In some cases, people will even pay to chat over coffee with a “conversational partner” who is fluent in that language they’re learning.
• Become a substitute teacher. Depending on your educational background, this can be a good source of cash, especially for at-home moms that want to get back into the work force, but want hours that accommodate their kids.
• Become an ump/ref for a local sports league. Around here, sports leagues are always looking for competent refs. Games are usually scheduled around business hours, and it pays pretty well.
• Do freelance web design. If you have the skills, there are a number of online resources for finding web design gigs. If that doesn’t work, pound the pavement in your community. A lot of small companies don’t have much of a web presence, and could use your help.
• Do some freelance writing. As is the case for web design, there are a number of online resources for finding writing gigs. Dig around a bit and see if you can find anything that suits your interests.
• Start a weblog in a lucrative niche. This site is a prime example of the fact that you can make money blogging. It’s not easy, but it can definitely be done.
• Become a mystery shopper. Here again, there’s tons of info on online, and there are even books about it.
• Get paid to take online surveys. There are a number of reputable companies that pay people to take surveys online. While they’re not always accepting new members, you should check out Pinecone Research.
• Participate in marketing focus groups. I actually did this a bit as a kid because we lived near a toy/game company. Thanks to Ashley for the tip.
• Get paid to signup for trial offers. Sites like Cash Crate pay you to sign up for free trials — you can always cancel them so it’s truly free cash.
• Maximize your credit card rewards. As long as you keep a lid on your spending and checking your free credit report, reward credit cards are a great way of generating a bit of spare cash on everyday expenditures.
• Take advantage of signup bonuses. You can easily snag signup bonuses ranging from $25-$250 when you apply for a credit card or open a bank or brokerage account.
• Play the 0% balance transfer game. Simply sign up for one or more 0% balance transfer credit cards and profit by plunking the proceeds in an high-yield savings account while you make the minimum payments.
• Make the most of the money that you already have. Move your money to a high-yield online savings account or build a CD ladder in order to maximize your interest earnings.
• Sell extra stuff from around the house. Clearing our extra stuff is not only a great way to make a bit of money, it’s also very cathartic. If you’re interested, be sure to check out my list of garage sale tips as well as my tips for selling stuff on eBay.
• Sell your used textbooks. There are a number of sites online that will buy your books back from you directly. Thanks to Nick for the tip.
• Take and sell digital photos. If you have a knack for photography, you might be able to generate some side income by selling stock photos.
• Make and sell crafts. Here again, if you have a knack for it, you can make generate some income on the side by making and selling crafts — either at local shows or on eBay.
• Sell craft designs. Instead of making the crafts yourself, why not work up some nice plans and sell those instead?
• “Donate” (i.e., sell) plasma. When I was in college, a popular way to get beer money in certain circles was to sell plasma. It’s not really my thing, but it’s a viable option if you need cash in a pinch.
• Collect and recycle aluminum cans for cash. While there’s not a huge amount of money in this, it’s a pretty easy thing to do, and it cleans up the environment. This is the very definition of a win-win.
• Sell ad space on your car. Depending on your location, the make and model of your car, and your daily commute, you can actually make a decent amount of money by letting an advertising agency “wrap” your car with advertisements.
• Rent out a spare room. Got an extra room in your house/apartment? Consider renting it out. You’ll not only defray your rent, but you’ll also be able to recoup a part of your utility costs.

If you have any ideas of your own, please leave a comment.

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Source: Yahoo! News

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Health Care

The health care industry is expanding rapidly as our population ages. Jobs with particularly stable prospects include doctors, nurses, pharmacists, physical therapists, and physician’s assistants. For those without a 4-year degree,

Education

Teachers in high-demand fields such as math, science, or bilingual education should have a relatively easy time finding and keeping a job, especially in high-growth areas of the country. College enrollment is also on the rise, which is good news for college instructors.

Security

Layoffs in this industry are rare, meaning that police officers, detectives, private security guards, and other types of security workers have very stable job prospects. And even if you do lose your job in one of these areas, it will be relatively easy to find a new position regardless of the economic climate.

Environmental Sciences

The Bureau of Labor Statistics expects opportunities in environmental careers, including positions for ecologists, hydrologists, and environmental chemists, to grow 25% over the next decade, well ahead of the average for other fields.

Government

Firings and layoffs are much rarer in the federal government that in other sectors of the job market. Even when the economy hits the skids, the government doesn’t typically downsize.

Other Options

For those without a four-year degree, look for jobs that can’t easily be outsourced. In the health care industry, jobs as a health aid, or medical or dental assistant are solid bets. Becoming an electrician or mechanic are also solid choices.

Source: Kiplinger.com

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While this increase in the minimum wage was a welcome change to some, other have argued that it’s not enough, and still others have argued that the government shouldn’t be setting the price of labor in the first place. Given the controversy, I thought that it would be interesting to look at minimum wage levels over the years to see how much things have really changed.

What follows is a graph of the federal minimum wage from 1938-2008, expressed both in terms of actual dollars and inflation-adjusted 2008 dollars*.

As you can see, while the minimum wage has increased just over 26-fold since its inception, actual buying power has fluctuated considerably over time. The real-world value of the minimum wage (expressed in 2008 dollars) peaked at $10.06/hour in 1968, and has been gradually tailing off in the years since then. That being said, it’s still hasn’t reached the levels seen back in the 1930s and 1940s.

As an aside, you can really see the insidious effects of inflation right around 1980, when actual wages were increasing every year, yet buying power was falling at the same time.

Another interesting way to look at these data is in the context of projected annual incomes vs. the federal poverty level. What follows is a graph of the annual income of an individual working full-time (2080 hours/year), again expressed in 2008 dollars. The dashed line reflects the 2008 poverty level for a family of three (e.g., a single parent with two kids).

As you can see, the full-time income of a minimum wage worker eclipsed the current poverty level back in the early 1960s and hung on until the late 1970s, at which time it went into a prolonged slide.

So… There you have it. A brief history of the minimum wage. As always, please feel free to share you thoughts on these data, or the minimum wage in general, in the comments section.

*Inflation adjustments were done using this CPI calculator.

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1. Financial adviser – 47% growth rate – $74,000 median income
2. Software program manager – 29% growth rate – $103,000 median income
3. Database administrator – 29% growth rate – $77,000 median income
4. Physical therapist – 27% growth rate – $67,000 median income
5. Physician’s assistant – 25% growth rate – $84,000 median income
6. Environmental specialist – 25% growth rate – $53,000 median income
7. Hydrologist – 24% growth rate – $59,600 median income
8. College professor – 23% growth rate – $79,000 median income
9. Certified public accountant – 18% growth rate – $64,000 median income
10. Teacher – 12% growth rate – $48,000 median income

Looking at the list, it’s largely comprised of white collar service-type postitions, presumably in response to a growing (and aging) population. Honestly, I was a bit surprised that there weren’t more medical professions on the list — what about doctors and/or registered nurses? I would think that those that specialize in non-elective procedures would fare quite well in an economic downturn. Yes, they’re getting squeezed by insurance companies, but people aren’t going to stop needing medical care.

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