I want to thank Jeremy and Mike for the smooth transaction.

Yes I bought a blog! Why on earth would somebody buy a blog?

The answer is simple: it’s called a return on investment. Where better to prove this then here ?

Many of you now will think: what’s next.?

My plan is to keep the Wealthy blogger alive. On a personal level I am more interested in how to keep
my earned money (tax related) then credit cards and investment tips.
If I blog about credit cards it will only be about anonymous South American cards.

Recently one of our European Employees moved to Panama (our headquarters). Obviously this person
had a million questions and at one point in time he said to me: you should open a little ‘how to’ site.
When I noticed this site for sale I figured it would be a nice match.
I plan on using this blog as a starting point to built a few sites related to offshore tax structures, moving to
other countries etc.

Long story short for now: I will try to blog at least once a week about our adventures with banks,
working in South America, how to move to a tax-friendly country, dealing with all international aspects
including those damn taxes and the mistakes we make/made. How you can blog from the beach
at zero percent tax rate and many more exciting items.

Once more Mike & Jeremy thanks for the help so far. We might experience a few technical glitches
the next couple of weeks as we move the site to our servers.

Fabian

As the more observant of you may have noticed, posting on this site has slowed recently. I have recently found that I have become busier and busier with work and other web projects, and that has combined with a feeling that I have said my peace.

As you may know, I am not in the personal finance industry, I just have an interest in personal finance. I started this blog because I had some things I wanted to say, and I find blogs to be a good way to do that. The problem in this case is I found that my well was drying up, so to speak. I had covered the major topics I wanted to cover, and I have never been a good link blogger: when I write I would rather get in-depth, and in-depth writing takes time.

This was weighing on my mind last week when Jeremy contacted me on Skype and said he thought the same and believed he could get a good price for this blog if we sold it. Now I know Jeremy had previously sold (and re-purchased) his own blog, so I knew he could manage this kind of thing.

In fact, Jeremy managed it in less than 8 hours, fetching $2000 US in a buy-it-now style bid.

Don’t worry, now that I have free cash I am walking the talk and dropping my share directly onto debt, increasing my net worth and improving my FICO score like a good boy should.

In any case, I thank you for your readership and comments, it has been great interacting with all of you.

If you want to track me down you can find me at the following URLs:

www.openwin.org - My personal blog, technically oriented, has nice pictures.
www.kanatutor.com - A work in progress, teaching others how to write in Japanese.
www.recipewiki.org - A work in progress, hopefully a way to share recipes in a wiki format.
www.wealthywiki.com - The new home for my personal finance writing, a place where I can write in-depth stuff less frequently.

I have high hopes for the wikis, I think the wiki format has a lot of potential for providing a pool of information without the pressure of producing content on a regular basis.

I hope you treat the new author as well as you have treated me, and I hope the Wealthy Blogger continues to be a source of ideas, thoughts, and advice on personal finance. As the final M*A*S*H episode said, Goodbye, Farewell and Amen.

Well these days this site actually earns enough for a cup of Starbucks a day (that Jeremy and I have to share), and it looks like blogging can even earn you six figures a year, but lately I have been thinking about generating some passive income.

Any money I earn from blogging is active income: If I don’t kill spam comments and post regularly (sorry for the drought lately folks), then eventually the well will dry up. There is nothing wrong with active income, but if you want to make six figures of income per year you have to give six figures of effort.

Passive income, on the other hand, is defined as follows:

An income stream falling into this category, is one where money is received usually on a regular basis, where no additional effort has taken place. This doesn’t mean no effort at all. Most passive income streams require great effort to start with.

Source: http://en.wikipedia.org/wiki/Passive_income

Wikipedia does not lump portfolio income into this category, though you can certainly earn a fair amount of income passively through the markets.

So, how do we get passive income? Well, one option is through property ownership. As a former resident manager of an apartment building, I know that such income can be less passive than you would think: I was constantly dealing with irate tenants, stoners, bounced rent cheques, noise problems, trashed apartments (more than the damage deposit covered), and tenant laws that often protect the bad tenants more than the landlords. The initial outlay can be pretty high as well.

Buying and leasing out the right piece of land may be a step up from this, but once something is built on the land you better hope the next tenant needs the same kind of building, or you may have a vacant lot to deal with (vacancies are a big issue for conventional landlords as well).

Too bad I missed the .com boom, where a bright idea and the right .com domain could make you millions. Of course, it may be enough to have a bright idea and the right domain name today and make thousands.

To that end I have registered my share of domain names, and I make a few dollars here and there. The challenge going into it is finding the time for that great effort needed at the start to get a profitable web site up and running. There are templates to design, code to write, and awareness to build.

If you can make it work there is good income to be made, but still a fair amount of work involved. It may not be as passive as renting out land, but at least it beats most jobs.

Today I went down to the local Revenue Canada (== IRS) office and made the final payment on my 2004 taxes.

It has been a bit painful taking $1500 from the monthly budget for the last four months, but I am glad it is over.

My advice for anyone who is self-employed is to talk to your accountant and find out how much you should be setting aside to pay your taxes next year. Pulling $500 a month for a year would have hurt a heck of a lot less than paying my taxes of in a third the time with three times the amount.

For the remainder of this year I will probably need to set aside about $1000 a month to be ready for tax time next year, and hopefully next year I can get down to a more reasonable amount.

On the bright side, I am only dealing with one of the two sure things in life…

I’ve realized that I no longer have only one job. And you know what? I like it. Sure, it’s interesting having several “bosses” and clients in different industries expecting different things, but it’s also exhilirating. One day I might be writing, another I might be consulting, another I might be speaking and another I might just take half the day off to spend time with my family. Like today.

I’ve found that this mix of things to do keeps me sane, keeps me grounded and means that I never “hate my job”. After all, I’ve got 3-5 of them, so if one of them stinks I can always switch it out for something equally profitable that I enjoy more. It’s easier to replace a job when it’s only 20% of your income than it is when it’s 100%.

In an earlier post, I talked briefly about transitioning to your dream job.

My real secret is that my dream job isn’t just one job. Currently, I hold the following “positions” at “Jeremy Wright, Inc.”:

1. Blogger
2. Consultant
3. Author
4. Courseware developer
5. Speaker / Trainer
6. Writer

And I do these in areas such as time management, personal finance, blogging, communications, marketing and technology.

My day-to-day life is actually fairly diverse. Basically, early on, getting paid to work on my own involved doing all kinds of things I didn’t enjoy. In my first month of being self-employed, I was a:

1. Grunt journalist
2. Grunt writer
3. Grunt blogger

“Grunt” meant doing the things nobody else wanted to do.

Slowly I transitioned each of these individual positions to something I enjoyed more. I replaced the journalist with the consultant. I replaced the writer with becoming a book author. I replaced just being a blogger with becoming a speaker. And, eventually, I added some of the other bits around this.

Maybe you love writing, but you also enjoy crafts and you like helping people. So maybe your mix of jobs is writing freelance articles (some on crafts and helping people), starting a home business around crafts, and working with local government agencies to help people with various disabilities on a part-time basis (most areas have positions for people to just spend time with folk who need some normalcy in their lives… think of it as Big Brother for adults).

Or maybe you’re a software developer. So you write some of your own software, you write some articles, you start a blog and you do some contract work.

I honestly believe one of the reasons people “hate” their jobs is that they’re only doing one thing. And doing one thing gets old.

Having more than one “job” gives you freedom, flexibility and much more joy than trying to make one job work. It’s also a lot of presure if you’re trying to find your “one dream job”. Consider splitting it up. One advantage to doing so is that you can slowly ramp up to your dream job (and away from your hated one), as opposed to needing one position which meets all of your financial needs.

While we talk about getting rid of debt, finding your dream job, increasing your income, diversifying your investments and buying cars, it’s sometimes important to remember where we’re at in the context of humanity.

The Global Rich List is one such reminder. It simply asks you one thing: how much do you earn per year.

My 70,000$CDN/year? It nearly puts me in the top 50,000,000 richest people on the planet.

Humbling.

It’s important to note that this isn’t an ACTUAL list of the richest people on earth and where you fit in. Plug in a yearly income of a few hundred thousand and it completely falls apart.

However, the point it’s trying to make is a simple one: no matter how tattered our finances seem to be, there are quite a few people on earth doing worse than we are. Not only that, many of those people are probably happier than many north americans.

A friendly reminder to enjoy your family, enjoy the sun and enjoy life a little bit more. Brought to you by two decidedly unwealthy bloggers.

Devin Reams, over at BusinessBits, writes a nice little piece on improving your credit.

A number of people have their own ideas on what works for establishing credit… this is what’s worked for me. Get a credit card as soon as you can. Start paying off those bills (in full), too. It’s been less than a year but I’m already in the habit of treating my credit card as a debit card. In fact, I rarely carry cash anymore. I figure the credit card is slightly more secure and transactions are much easier to track (I’m a huge fan of using Microsoft Money).

Devin’s a young bloke, but has some good points in his post, including this one:

but there’s another good point here: one card is enough. My mom got a credit card for all the big retail stores she shopped in. She told me that if she were to somehow lose her purse she wouldn’t even know what all she would need to call up and cancel…

Ultimately, there are a lot of different ways to build up credit, but you will one day have great credit if you are able to keep using it responsibly. It’s not some unachievable thing. It just takes time.

I don’t know how many others out there feel the same, but I think I have an aversion to replacing my car. I’ll go out from time to time and look at cars, looking at the monthly payments that I would incur by buying the vehicle, and then a certain thought always hits me:

“If I took the $NNN a month and put it into my current car, I could fix the air conditioning in the first two months, replace the windshield (which only has a few small cracks anyway) in the third month, and repaint the car (no rust, just some gravel chips) in the fourth and fifth months. Then I would have a good as new car in five months and start banking $NNN in month six.”

That does not even take into account the increased insurance costs of buying a newer vehicle.

This thinking may not be that uncommon: according to Transport Canada, vehicles between 5 and 10 years of age accounted for 45.9% of all vehicles under 4.5 tons in 2001, while cars less than 5 years old accounted for 18.4% (the remainder of vehicles being older than 10 years).

I think the other cause for my aversion is the fact that my existing vehicle runs well (except for no air conditioning, but this is Canada) and, more importantly, is paid off. Once you are out of debt on a car that still has some life in it, there is a certain aversion to getting back into debt (at least for most people: I once heard a story of a man who went to the dealer to make his last payment and then buy a new car the same day, every time he paid off the old one).

I can’t find the source to quote it at the moment, but one study I read indicated that the ideal age to sell a vehicle is ten years. Up to that point, it is generally more economical to maintain a vehicle than buy a new one. I probably wont hold onto my sedan quite that long just because I expect to have three children before my car gets that old, and three kids in the back of a sedan does not make for a peaceful trip. Yup, sooner than later I expect I’ll find myself behind the wheel of a mini-van, but don’t worry: I’ll buy a sport edition mini-van so I can preserve some of my male ego.

So what do you think? How long do you hold onto a vehicle before you opt for a new one? Do you ever find yourself thinking of what else you could do with the monthly payment money when you go browsing?

As you probably know, I am a big fan of using ING Direct savings accounts because at 2.4% with no fees it is a much better place for things like your emergency fund.

Well, I noticed today while managing my accounts (you can open multiple accounts to segregate your funds) that ING is offering a $13 referral bonus for anyone I refer for an account, and the people I refer also get $13, so it is win-win.

The condition for receiving your bonus is that you must make an initial deposit of $100 and keep it in there at least 30 days.

So, if you are interested please leave a comment with a working email address in the email address field (only I see it) and I will send you a referral email.

Ok, on to another question from our Ask the Wealthy Bloggers post:

I am trying to build my credit history and just recently got my first credit card, a secured one from the bank, so that the information about me would get sent to all the credit reporting agencies.

However, I am getting contradictory responses on what my spending should be. I don’t really need credit at this moment, so I am promptly paying off every credit card by the end of the billing cycle, incurring no outstanding debt. However, some people told me that I actually should incur some debt and pay off some interest for the credit rating to improve.

So what’s better for credit ranking - promptly paying off or generating some debt and then paying it off?

Oh, yeah, we’re talking USA financial system here.

From: Alex Moskalyuk

By secured do you mean one linked to your account balance? I am going to do a bit of speculation here, but I would assume that a card that does not involve actual granting of credit by a lender is not going to affect your credit rating. Let’s assume you are talking about a card where you are granted credit by a lender though.

What you are working on is your FICO score. You may recall that I wrote about FICO scores previously, and talked a bit about how the score was calculated.

The following breakdown of a FICO score is taken from http://en.wikipedia.org/wiki/FICO_score:

* 35% punctuality of payment in the past
* 30% capacity used, i.e., ratio of current revolving debt (e.g. credit card balances) to total available revolving credit (e.g. credit limits)
* 15% length of credit history
* 10% types of credits used (installment, revolving)
* 10% amounts of credits applied for in the recent past

So let’s look at how to apply this:

1) Always make your payments on time, if you can’t make a payment on time, do NOT take more than 30 days past the due date. Credit reports do not track payments that are less than 30 days late. As you can see, making your payments on time accounts for 35% of your credit score.

2) Do not carry a balance if you can avoid it, keep a low balance otherwise. The closer you get to the limit on your credit cards, the worse the 30% of you score allotted to capacity gets.

3) Play the waiting game. As you can see, 15% of your score is about how long you have had your accounts in place. There is nothing you can do about this 15% except get some credit and make your payments for a while.

4) Try an get some installment credit as well. Creditors see credit cards as dangerous when you apply for credit. I like to call this the ‘run for Mexico’ factor: If you decide to cut all ties and run for Mexico, you can draw out the available balances on all your cards and head for Tijuana. If you have installment credit, all you can do is stop making your payments. If your local bank will make small loans, look at taking out a small personal loan (maybe even offer cash collateral if they consider your credit history to be too new), then just make your payments. If you need a vehicle a small vehicle loan also counts for installment credit.

5) Don’t apply for every offer you get in the mail or at a department store. The more applications for credit you make, the lower your score can get. This once again can be the ‘run for Mexico’ factor: creditors have to wonder if you are applying for a lot of stuff just to build up a wad of cash and try to disappear (or at least more than you can afford, making you look less responsible).

Anyway, to answer your question directly, I would say prompt payment is better than building up a balance on a credit card, but also look at getting a small installment loan (even $500) to help show some installment credit.

Any advice from our fellow readers?