Infographic: Employees Keen On Remote Working

Posted August 30th, 2012 in Economics by Jeremy Waller

The concept of remote working is slowly but surely being introduced by more businesses. I’ve been working remotely myself over the past 2 months.

I don’t think I need to tell you that it’s certainly something that employees like since it gives them so much more flexibility to how they approach their jobs.

Employers, meanwhile, can save money by allowing remote working and it can also radically change how they recruit new staff. I believe employers are finally starting to realize that they don’t need to completely control their employees and will have a more productive staff by allowing for some flexibility.

Remote working

Infographic: Rise of the Female Trader

Posted August 28th, 2012 in Investing by Jeremy Waller

CityIndex has put together an infographic showcasing some of the data they’ve recently collected. CityIndex is based in the UK, so the figures are in Pounds, but I thought it was interesting nonetheless.

  • Over the last 10 years the number of female traders has risen by 1000%
  • Occupations of part-time female traders vary wildly, but the most popular are house wives, teachers, secretaries and those working in administration.
  • CityIndex’ most successful female trader is 51 and has profited over £1,200,000.
  • Their youngest active female trader is a 19-year old shop assistant. She has made a total profit of £11,222.
  • A contract teacher earning £32,000 a year has profited over £158,000 with her account

Female Trading Infographic

The Horrors of Being a Landlord

Posted August 15th, 2012 in Real Estate by Jeremy Waller

For 2 1/2 years I worked for a property management company. Going into it, I thought it was a great job. You see, I love real estate as an investment. I had this plan to climb the property ladder and build a portfolio of rental properties.

When the opportunity came up to work for a property management company I thought it would be a great way to my hands dirty learning the ins and outs of managing rental property without the risk of actually owning the property.

I ran the whole show – everything from advertising to tenant screening to rent collection to evictions. It was good way to learn. I had my hands in every part of the process. The downside is, I had to deal with the headaches that came with every part of the proces.

One of the biggest headaches was dealing with evictions and property damage. Those two usually went hand in hand. It’s rare that a tenant that pays their bills damages your property.

I don’t know if they caused damage because they didn’t care or if they were vindictive because we were trying to collect rent.

The worst case was a house we managed in a not-so-nice part of town. The investor bought it for a whole $27,000 and I think he may have overpaid for it…The house was a dump.

There was a tenant in the property when he purchased it, but they only made one rent payment to us. After that it was a 3 month process of chasing them down and finally evicting them.

When I got into the house…holy cow…

It was disgusting.

I think it would have been better if they burned the house down before they left.

I took a step in the door and the carpet started crawling. Roaches literally covered the entire floor. There was a half-eaten, moldy birthday cake on the kitchen table. Animals had been kept in the house and apparently were never let outside.

It took an exterminator 7 trips to get rid of all of the roaches. All of the carpet had to be replaced. There were several places in the sub-floor that had to be replaced because of the urine. The entire house had to be sealed and painted to cover the smell.

At the end of the day, the investor spent nearly $10,000 rehabing the house – more than 1/3 of his initial investment.

That scared me away from real estate for a long time. It seemed like there wasn’t a good way for an investor to protect themselves.

I’ve come to learn that’s completely wrong. There are a number of ways to protect yourself. A situation like that should never have happened.

First, do your due diligence before buying an occupied property. If he would have personally inspected the property, he would have noticed that the interior needed a significant amount of work.

Second, don’t buy a property on the wrong side of town unless you’re willing to be a slum lord. I don’t know about you, but I don’t like fearing for my safety when I visit the property.

Third, consider landlord’s insurance. It’s an insurance policy that covers both accidental and malicious damage caused by tenants.

Having insurance allows you to even out your cash flow. You have a small payment each month, but you won’t have the risk of a large expense due to damage that could kill your profit for the entire year or longer.

Real estate can be a huge risk and a huge headache if not done right; however, if you do your due diligence and offset risk using insurance, it can be a great investment.

How Much Life Insurance Should You Have?

Posted August 3rd, 2012 in Insurance by Jeremy Waller

What would happen to your family’s finances if your died today? Would they be able to pay the bills without your income? If you have someone who is depending in your income to eat, then you need life insurance.

Life insurance is designed to protect your family in the event of an early death. We’re all going to die; the question is when.

Since the purpose of life insurance is to provide for your family after you are gone, you need enough insurance to replace your lost income.

Let me also mention this, there are many different types of life insurance out there. The purpose of life insurance is to pool the risk of an early death. It shouldn’t be used as an investment vehicle (*cough* whole life insurance *cough*). To prove for your family after your death, all you need is a term policy.

The general rule of thumb is to have 10 times your annual income. Many people know this rule and many people use it as a guideline, but most don’t really think about why.

The why is very important. If you don’t understand why, then you can’t make an informed decision. Based on your situation, is 10 times your income enough? It is too much?

The amount of insurance you need depends on the number of years that your income is needed after you are gone.

Let’s Run the Math

If you were to die during the term of your policy, the death benefit would be paid in a lump sum. Now your beneficiaries could just put that money in a bank account, pay their expenses as they normally would out of that account and in approximately 10 years the money would be gone. It could be done that way, but it’s a terrible plan.

Anytime you receive a large lump sum of money and don’t have an immediate need for it, it should be invested. Ideally, an investment ladder would be set up where the funds needed in the next few months would be held in an easily accessible account (likely with a lower rate of return) and funds needed years down the road would be put in a long term investment vehicle (with a higher rate of return).

With a 4% rate of return, the proceeds would last 12.8 years.

With a 6% rate of return, the proceeds would last 15.3 years.

With a 8% rate of return, the proceeds would last 20.3 years.

Now these are conservative estimates. I’ve based this on monthly withdraws equaling your pre-tax income. In reality, your beneficiaries should only need to withdraw your post-tax income – what your take-home pay is.

However, I’ve also excluded inflation to simplify the calculation. In the end, these two factors may cancel out. These numbers are meant to be more of a general guideline.

How Much Life Insurance Should You Have?

Is 10 times your annual income enough? At a minimum, your beneficiaries should be able to achieve a 4% rate of return on the proceeds. Will your children still be at home after 13 years? After they are able to support themselves, can your spouse support their self? If you are a stay-at-home parent, can your spouse afford child-care and other help as needed?

If you are unsure, I would always be on the safe side. Term life insurance is cheap.

Regardless, if you don’t have life insurance now and you have people depending in your income to survive, you need life insurance. Don’t waste time because you’re indecisive. You can always make changes to your policies later.