Saturday, May 28, 2011

Be A Dividend Millionaire...


The book of the week was Be a Dividend Millionaire by Paul Rubillo. This book is more of a 'how-to' book on dividend stock investing. However, there is a lot of information on just basic personal finance included.

I go back and forth on the necessity for Rubillo to discuss paying down debit and impulse buys in a book that touts teaching about dividend investing. I understand that you probably should have your finances under control before you start doing any investing but it was just a little odd that this book went into all that. And it wouldn't make me question it if it weren't for the fact that about half the book is about personal finance and money saving tips including everything from saving on your insurance to setting goals as a family. Just not expected and probably not the right book for the information. I say that because as a consumer of the book I have read plenty of books about personal finance, I bought this one to learn about dividend investing and I would much rather see those 70 pages dedicated toward the main subject matter.

Now, about Dividends... a dividend stock is a share of stock you own that periodically pays out portion of the companies earnings and the payout is called a dividend. Dividend stocks are nice because they include the benefit of cashflow in the form of dividends while simultaneously providing capital gains on the stock side. It is really easy for anyone to invest in these stocks. You can go to Sharebuilder.com and make a little portfolio for as little as $25 a month. I discussed my thoughts on Sharebuilder last month. I use it for some of my investing and it treats me well.

To learn more about stocks that payout some good dividends you should consult Dividend.com which is the creation of the author of this book. It is very comprehensive site on the subject that has a newsletter with really good information.

I thought this book was pretty good although I don't think it was as good as it could have been. I did have some take aways and that made the book worth it to me... you should check it out. As always, If you have any questions don't hesitate to ask!

Saturday, May 21, 2011

Napoleon Hill Speaking About Andrew Carnegie...

I have been super busy getting ready for my move to Illinois on Monday... but I will leave you with this very special video of Napoleon Hill speaking about what he learned from Andrew Carnegie. I very much like both of these men and this video is priceless.

Saturday, May 14, 2011

The Supermanager...


The book of the week is the Supermanager by Greg Blencoe. This is going to be a short post because the ideas speak for themselves. This book is very simple, but very right. Blencoe gave me the opportunity to read over this book a couple months ago and I liked it just then, before it was published, as I do now.

The book is similar to the 1 Minute Manager type books. It has a story and ultimately reveals the simple truths the protagonist becomes aware of along the way. I'll leave the story to your own reading, it's quite good. What I would like to cover is the 7 pieces of information you need to know to become a Supermanager.

1- Surround yourself with high-quality employees- This is so incredibly important. Your organization is defined by it's people. Once you hire people with the right attitude, the next 6 ideas are all downhill.

2- Train employees well- This is basic, but missed a lot. Train your employees to be the best if you expect them to be the best.

3- Communicate the end result you want, then empower employees to achieve it- People want to be empowered! If you give them that responsibility you will be surprised with the results.

4- Lead by example- It is imperative that your employees know they are working for someone that cares as much as you expect them to, so show them you do. Work like you want them to work, speak like you want them to speak, and think like you want them to think.

5- Listen to employees- The number one incentive for people is attention. So if you want to give your people incentive to work hard for you, give them attention and that includes listening to whats going on in their personal life as well as the struggles they are facing professionally.

6- Praise good work- Just like number 5, but instead of just lending an ear as a form of attention you are acting on it. Saying "Good job" or "Nice, that's exactly what I would have done" has great impacts on your people.

7- Manage each employee differently- No one is a robot. You have to manipulate your style to match what works for each particular employee. If you treat them like they are all the same you will not get optimum results.

These fundamentals for management are about as solid as you can get. They should have college courses dedicated to just cover these 7 ideas. These are incredibly important.  As always, if you have any questions don't hesitate to ask!

Saturday, May 7, 2011

Long-term Tax Planning...

I have been thinking lately about how to minimize taxes for the ordinary person (i.e. not a business owner). And one of my crowning light bulbs is the topic of this week's post. The idea is advance giving. If you give multiple years worth of charity in one year you significantly improve your benefits.

So here is how it works... Instead of giving $10,000 to charitable organizations each year for the next 3 years, give $30,000 to charity in one year with a letter that informs them that this will be advance giving for the next 3 years. So based on filing for an individual. If you choose itemized deductions and donate $10,000 each year for 3 years, at the end of the the third you you will have realized $30,000 in deductions over the course of the 3 years. However, if you decide to give $30,000 in year one and decide to take the $5,700 standard deduction in years 2 and 3, you end up having a total deduction over the course of 3 years of $41,400. That means that advanced giving would give you $11,400 more in deductions. And even better than that number is that fact that in year 1 you will most likely put yourself in an extremely low income tax bracket, meaning that, for the majority of people, instead of 25% you would be taxed at 15%. That's Huge! Or even moving yourself from 28% to 25% is a huge win!

Now I have went back and forth on this idea...

Pros:
You have huge benefits in your taxation
You end up with more money in your pocket

Cons:
You have to plan/budget on a very large scale
You aren't adjusting you giving on a yearly basis
It's a very large up front cost

I think it's worth it if your life allows it. I hate taxes more than anyone, so I love finding anyway to limit tax liabilities. I'm not an accountant, but I spoke to one in a bar last weekend and she said this could work. And if a slightly inebriated tax accountant is wrong, I don't know what I can believe. I hope this finds you well, and as always, if you have any questions don't hesitate to ask!