Hi Ben, is $40,000 a good yearly salary? How long will it take me to retire?

The number of people who makes this question is overwhelming. It doesn’t have to be $40000; I get the very same question for $20k-$200.

I think that most people are essentially trying to know how that salary compares to what other people earn. Most people who ask me want to know whether they can retire early.

We try to measure our success based on how it looks compared to other people’s success. Money is an easy way to compare ourselves with others. I think that many people end up making ridiculous comparisons – those that completely ignore important variables. Afterall, we shouldn’t compare ourselves with others that fast. We may make tons of mistakes.

For instance, I’ve come up with really good answers to convince some people their $40,000 or $50,000 salary was good, even when they thought it was not. I’ve convinced some people that $100,000 was not exactly a good salary, given the potential, location, and goals of one specific coaching client.

What is the lesson then? Well, each salary is attached to a specific person, with a specific background and education, in a specific city in a specific country. I cannot say outright whether $40,000 is actually a good salary. It depends on many variables, which I will review in this post.

OK, but is a $40,000 salary good?

I will break it down this question into several parts, that will probably help you given the number of scenarios I am pointing out.

It definitely depends on the context you’re in…

It depends on your skills

It depends on the goal…

Early retirement

It is not how much money you make, it is how much you keep!

It depends on the number of dependents you have

You meant “Ben, is $40,000 a good salary for myself?”, right? Making $40,000 can be a very good salary for one person, but it can be a very bad one if you have many children or you need to support your spouse. It can be great as well – again, it depends on many variables.

Scenario with kids….

Now, let’s say you just graduated and you got an offer for $40k. That is most certainly enough to put you on the early retirement path if you do things right. 40k can go a very long way in the hands of a recent graduate. Especially if you’re single or you don’t have to support your spouse.

How much is 40k after taxes?

Again, this highly depends on the country you live in. I can tell you about Portugal, where I live now.

40k means $3,333 a month. This translates into $2,136 net per month, as the original salary is taxed at about 30%. This is very similar to what you’d get in the US. However, note that there are many variables here, including the state where you are, the number of children, etc.

Entrepreneurship series I: reviews of companies and products that appeared on Shark Tank or Kickstarter

Hi guys,

This is the first article of a series of 10 posts on entrepreneurship. This series will cover many angles of entrepreneurship and its main goal is to shed some light on various angles of entrepreneurship, business and connect that with early retirement.

As I said before (LINK), I started to believe that my businesses can actually play a role in my early retirement. Although I don’t monetize my blog aggressively, as I want to keep it clean, it has attracted tons of investors worldwide, which eventually become clients of my real estate company. My real estate company has made considerable money so far, and I believe I could scale it to a 300k in revenue in the next 2 years and 1 million in the next 6 years. I also wrote a post a few months ago, on the what I would do, should I wake up 10 years younger. If you read that post, you know that I actually regret having done a PhD, simply because that prevented me from becoming an entrepreneur.

This being said, I believe that being an entrepreneur is an excellent way to buy your way to an early retirement. However, being an entrepreneur is not easy. Your social life disappears, you start working way more hours than you would if you worked for somebody else, etc. In particular, your company goes through very hard times, where cash becomes tight, where you (and your partners) need to do everything from writing code to PR. You can’t stop. You can’t stop thinking and working. Your company becomes your baby and your life.

In this series of entrepreneurship, I will review some companies, products, business models, etc. The goal is to teach you very important angles of business and the connection with early retirement.

Companies that appeared on Shark Tank

mtailor

mats

betterback

kingbeard

Companies that appeared on Kickstarter

onsentowel

Direct sales is a marketing approach that involves selling products directly to consumers, bypassing the middleman. Sales typically occur outside of the retail environment, often in people’s homes or workplaces.

You can use direct sales to earn extra income or turn your business into a full-time career. Whatever your goal is, be patient with yourself as you hone your skills. As with any profession, it takes time to learn and perfect the techniques necessary for success.

If you’re ready to give direct sales a try, follow the tips below to get started.

Build Strong Relationships

In today’s busy digital society, people crave human interaction. Direct sales provide an avenue for you to give people the interaction they desire while growing your business. Through your presentations and conversations, you’ll build rapport with your customers in ways that only direct selling allows.

Consumers tend to buy from people they trust, so work on developing a friendly, enthusiastic attitude. Following-up with customers will cement your relationship and is the backbone of good customer service. On-going contact is the best way to build repeat business.

Strive to build personal, meaningful relationships. It’s the most effective way to get referrals and build a team.

Set Reasonable Goals

Set reasonable goals for yourself. Without concrete objectives, you can easily overthink instead of act.

Figure out what you want to accomplish, divide large goals into small tasks, set a timeline, and record everything. For example, if your goal is to make enough money to quit your full-time job, determine what achievable tasks you need to complete to attain it.

Set a deadline for making your first sale, presentation, thousand dollars, and so on, but give yourself a reasonable length of time for each. Regularly accomplishing tasks will give you confidence that will propel you forward.

Take Advantage of the Built-in Support Network

One of the most important advantages direct sales professionals have over other entrepreneurs is their access to a built-in support network. Amway, a leading direct sales company that specializes in health, beauty, and home care products, provides these networks so that you can seek advice from experienced independent business owners who were once in your position. Using and applying what you learn will prevent you from making common mistakes, save you time, and allow you to reach your goals more quickly.

Reach out, ask questions, and build relationships with your colleagues. Those activities will benefit you now and for years to come.

Identify Your Target Market

Figure out who wants your product and concentrate on targeting them. This approach is the most efficient use of your time; don’t waste your energy marketing to people who don’t want what you’re selling.

After you’ve determined who needs your product, figure out where to find them. Learn about what websites they frequent, social media groups they use, magazines they read, and organizations they belong to. Focus your marketing efforts in these areas.

Differentiate Yourself from Others in Your Network

Give people a reason to buy from you. The best way to achieve this goal is to offer exceptional service. Word-of-mouth referrals are an easy, inexpensive, and effective way to grow your business.

To set yourself apart, consider handing out freebies, giving discounts, writing thank-you notes, and maintaining a blog or website. Anything you can do to offer a higher level of service than your business counterparts will give you an advantage.

Takeaway

Direct sales opportunities are feasible, worthwhile, and rewarding ways to start a business. Like any profession, it takes time to hone the skills necessary for success, but the structure of the industry gives you a head start. You don’t need any formal qualifications. The built-in support network provides encouragement and assistance, and its flexibility allows you to earn extra income without quitting your day job.

If you’re ready to jump into the world of entrepreneurship, direct sales can provide a good avenue for you to do so.

Whether you are expecting a refund this year, or you anticipate owing on your taxes, submitting and completing all necessary forms can be overwhelming. You may find yourself second-guessing on what is required or what forms you might need and making an amateur mistake on your taxes can lead to a tax audit.

Although less than 1% of taxpayers are audited by the IRS, it is important to retain a registered agent or attorney if you are summoned to an audit. There are several advantages of retaining an expert. An attorney or registered agent can help you understand the process of an audit, understand tax laws in relation to your specific case, help you avoid penalties, and begin potential negotiation plans between you and the IRS. If you are having a difficult time handling your tax problems, you are more likely to have all of your tax issues resolved by getting expert help.

Understanding the Audit Process

Image via Flickr by Free For Commercial Use (FFC)

If you have received a 90-day notice from the IRS, you will be required to respond within those 90 days to appeal your case. A lot of times issues with the IRS can be resolved without stepping foot into a courtroom, but this doesn’t mean an attorney won’t be necessary.

Once the process begins, your appeal will be sent to the Office of Appeals where you can work out a settlement. There are several options your attorney can take, including an Installment Agreement or an Offer in Compromise. It is important to exhaust all options before resorting to tax court. By having an expert on your side, you can align all of your documents and defend your case properly to receive the best outcome.

Tax Law and Your Case

Once you receive a letter from the IRS, most people tend to act quickly. It is important to review what the IRS is claiming and be prepared to make corrections or challenge their claims. The IRS is not always right, and there may be a miscommunication or potential clerical errors in your case. By obtaining a tax attorney who knows the law, it will make your case easier to manage, and tax attorneys can catch errors and challenge incorrect claims from the IRS because of their expert knowledge and familiarity with IRS cases.

Avoiding Penalties and Repayment Plans

Severe tax penalties can impact your livelihood. Proper representation can help you avoid paying high penalties and even assist you with getting on a payment plan that doesn’t place a financial burden on your family. Attorneys are there to ensure their clients receive the best possible outcome. Your advocate will make it easier to justify simple mistakes and negotiate payment plans that won’t leave you in a bind. The main goal of a tax attorney is to limit the amount of money you will owe and help you understand your taxes.

Facing the IRS can be intimidating, but if you hire someone to represent you, it will be much easier to digest the information you are receiving. It is also another way to learn from your mistakes and understand your financial situation a little better for the following year.

You probably use financial services in the cloud without thinking about it. When you check your account balance online or transfer money to someone via an online portal, your bank details are likely being retrieved from the cloud. Cloud providers go to great lengths to secure their platforms for customers, but most people know that cybercriminals have successfully orchestrated attacks on cloud-based companies and accessed sensitive details. So, that begs the question: Is your financial data safe in the cloud? Fortunately, you can take steps to verify security before you agree to have your data stored in the cloud.

Don’t Blindly Agree to Terms and Conditions

Image via Flickr by MattHurst

Most cloud-related financial services relate to online banking. Branches usually promote their online options as easy ways to get the information you need in seconds. You’ll undoubtedly need to agree to terms and conditions before setting up your account. And, it’s important to actually read through them instead of quickly scrolling down to click the “I Accept” button.

Research confirms most people don’t read the fine print of online agreements. If you fail to do that, you might never know how a bank uses your financial data when it’s stored in the cloud and what you can do to remove certain details from the cloud-based storage system, if such an option exists. You can’t assume financial institutions have your best interests in mind regarding cloud banking. It’s up to you to read the conditions carefully and decide if your information is managed properly.

Convenience Comes at a Price

Most cloud financial services try to minimize the steps people must go through or otherwise make banking as hassle-free as possible. U.S. Bank even allows people to carry out some banking tasks through a smart speaker such as Amazon Echo. They can check account details, make payments, and more. That technology means bank details are stored in the cloud, always ready for Alexa, the Amazon Echo’s virtual assistant, to retrieve.

So what if someone is able to successfully disguise their voice as an Echo owner and retrieve a person’s bank details? The system requires setting up a four-digit PIN, but people often don’t make their PINs difficult enough to guess.

Before setting up something like voice-activated banking through your smart speaker, ask yourself what the trade-off is for such a convenience. Is the bank securing the data as it should?

Make Sure a Cloud Provider Follows Best Practices

Amazon Web Services (AWS) is quickly making an impact in the financial sector by providing cloud services. For starters, Amazon has built-in technology to detect problems such as fraud and abuse. However, any company that uses the AWS platform to provide cloud technology to its customers must also follow best practices. If you have doubts about a company’s cloud security structure and the steps they take to maintain it, ask for specifics before agreeing to store your financial information in the cloud.

Cloud-based financial services are becoming more widespread. However, before using them, it’s your responsibility to exercise caution and get informed about the overall safety of your valuable data.