It’s a ‘funny’ thing how a consistent effort towards Living The Perfect Lifestyle pays off

May 3rd, 2010 Comments »

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Living The Perfect Lifestyle – A journey of many, many, many little lessons.

As a young country boy growing up, I was lucky enough to have a loving family and it’s because of that fact, that I’ve been striving towards Living The Perfect Lifestyle for myself, and my own family ever since I decided that working for someone else wasn’t going to cut (for me).

Every Monday morning I meet a buddy of mine for coffee. I’m sure a lot of people do the same thing… except for the fact that we meet every Monday morning with a purpose – To reflect on the week past and look forward to the week ahead.

This morning we were talking about how long it’s been since we started our meetings and we concluded that it has approximately 1.5 years. It’s a coincidence that that topic came up this morning because over the last week I had also been reviewing the ‘Big Picture’ goals I had set out for myself 1 year earlier and it was really cool to see that more things than I thought were, or had actually occurred… and when I asked Matt if the same thing had happened to him he whole-heartedly agreed.

So whats my point? Well, it’s simply that a consistent effort, and a commitment to something usually pays off. We’ve been meeting for over 1.5 years, every Monday morning to keep ourselves on track with our life Vision AND because we both have a belief that the ‘Universe’ is there to help us we continuously challenge each other to maintain our energy and make sure that we are putting out the right ‘signals’ in order to attract the things into our life that we want.

For example, one of my challenges from my past programming was that I had always heard that “money is hard to make” and I believe that it was something that has seriously held me back in the past. Since we’ve started meeting, I’ve worked on ‘changing the roots, so I could change the fruits’ and I’m seeing results.

That’s just a small example, but I can honestly say that this mornings reflection on what has happened over the last year really confirms a lot of things that I’ve heard in the past.

Things like…

  • Little by Little by Little by Large
  • As long as I’m closer to my goal this week than last week then, I know I’ll get there
  • Focus creates results
  • Thoughts become things

If you have a something that you want, and it hasn’t happened yet, I challenge you to commit to a weekly review of what went good and bad last week, and a weekly projection of what you want to accomplish this week. AND BE HONEST With yourself.

If you can find a partner to go along with you on that, do it anyway. Living the Perfect Lifestyle for yourself depends on it – at least in my opinion anyway.

Cheers to your success, and remember… “as long as you are further ahead this week than last week, then you will reach your goal.”

A Picture Says 1000 Words

Donny Watson

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Self Directed Investing – Learning how to manage my own money

April 28th, 2010 Comments »

Self Directed Investing is turning out to be a way of life that is actually fun and only time will tell how much more profitable it can be.

In the last 4-months I have been aggressively learning all about Self Directed Investing on the TSX. As you probably already know, investing in the stock market is something that we have made an important part of the Quit Your Job Early Plan.

As a society, we all understand that in order to retire some day, we need to participate in some sort of investing. As part of building our plan, we concluded that there were really 2 phases to building wealth

  1. Cash Flow – the money you earn from your business that provides for your day-to-day standard of living
  2. Wealth – the money you put away on a regular basis so you can invest it and accumulate a nest-egg

Our goal with the plan is to learn how to develop the ability to earn accelerated wealth. Meaning that we need to be able to understand an investment avenue good enough, in order to achieve much greater results than the average person. And in order to adhere to the ‘Core 4’ values that we have put in place with the plan, our vehicle of choice to accumulate accelerated wealth is to learn how to invest in the stock market.

The only challenge with the stock market is that it appears that there is a lot to know and it can very quickly become very confusing. In December of 2009, my Dad and I decided we were going to take steps towards understanding the stock market better and attended a seminar by Train2Invest.

That Seminar caused us to end up taking their course and to me helping them market their course because I believed in the course’s value and in the vision of the company.  I am currently through the classroom phase (AKA: the 14-week teaching phase) and am now just about to begin the advanced training sessions.

It’s been a great journey so far, and there is still the odd day that I feel overwhelmed by trying to understand what affects what and why one stock when up when the other went down but the reality is that I now find it fun to watch the stock market because I understand (for the most part) what is going on)

The philosophy that they taught is that

‘when you achieve small gains consistently, they can add up to very large gains over 6-months to a year.’

That’s how they arrive at there target annual return for their students of 30%. They are teaching me how to attain 1% every 14 days which over the course of the year adds up to 30%.

It’s a simple concept, and it has taken some effort to learn but, it works – or at least it’s working so far.  I am currently paper trading right now with the strategies that they are teaching me and I have been able to capture 1% returns in less than 5 days 6 times out of 7. That’s pretty good for a beginner.

If you want to learn more about the course and how it may be able to help you learn ‘Self Directed Investing’, just click on their logo below

This Little Guy in the picture below with me is worth learning how to earn accelerated returns don’t you think,

Donny ‘The Investment Guru In Training’ Watson

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Its all in your head!

April 26th, 2010 Comments »

Its all in your head!

I’m reading a book called The 7 Habits of Highly Effective People By Stephen R. Covey.  Amazing Book!  And I would like to share a part in the book that I think might be beneficial to everyone.  The author goes into detail about how all things are created twice.  Once as a mental creation, in your head, and second, the physical creation.  For example, take a business.  If you want to have a successful enterprise you clearly define what you’re trying to accomplish in your mind.  You have to come up with goals, strategies, market research, competition, budgeting, etc.  If you want your company to be successful you must picture the end result in your mind and in your mind create things to get there.  This principal also applies to many areas of life.  For example, if you are planning a vacation, you have to think about it first, then put it into action.  You have to determine the destination and plan out the route and activities and so on.  I have learned from personal experience that the mind is such a powerful thing!  And if we learn how to control our mind and thoughts, we would be able to do anything we want!  Can you remember how many times you wanted to do something, but the little voice inside your head stops you?  Imagine if we could overcome that little voice, and have no doubts or worries, we would be unstoppable.

I wanted to put this principal into practice in my life to prove something to myself.  That if my mind can actually focus and have a mental creation of some thing, then it has to have a physical creation also!  A couple months ago, I decided that I was going to focus my thoughts on creating an extra $500.  What I did, was I posted $500 on sticky notes everywhere around my house, so that my mind was constantly thinking of it.  Soon enough, I started noticing the number 500 everywhere I went.  On billboard signs, in magazines, prices on items were 5.00.  I set a constant reminder to myself on my blackberry so I always thought about this $500.00.  A week later, I received a cheque in the mail for $541.63.  From where?  It was from my previous job that paid bonuses once a year based on sales productions.  Even though I had quit the job just before the year ended, they still paid me for that bonus!  This story sounds crazy and obviously I could have thought of a million dollars instead of $500!  But the reason I choose $500 in the first place was because I knew that I could come up with the $500 somehow.  In my current job now my wage is based purely on commission,  So I knew I could somehow make $500 with work, I also knew I could somehow come up with $500 by getting a loan or even borrowing it from my mom.  The whole point of this story is that I focused on something realistic and achievable, I thought it of it constantly and mentally creating it in my mind that I would somehow get $500 dollars, and I did.

So my challenge to you who is reading this blog, is to really try to control your thoughts.  Focus on something that you want.  And if you focus long and hard on something you want, you can get it.  That’s what I’ll be doing!

Cheers to your success!!

Vanessa

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Posted in 1: Financial I.Q: Learn 2 Earn, Vanessa Nuelan

Cleaning, Communicating and Organizing in order to Live Your Life Vision – My Story

April 25th, 2010 Comments »

Your path to Live Your Life Vision will be different than mine, but here’s what I learned what is working for me…

Over the last number of years I have been walking the road less traveled in an effort to have live my life vision. Along the way I have learned a ton of valuable lessons. Some of those lessons, I had to learn numerous times so I guess you’d call them mistakes until the last time I did it, when I finally learned my lesson (If that makes any sense at all) It makes sense in my head right now so hopefully it’s making sense for you as well.

I learned a long time ago that there really isn’t such a thing as time management and that it really should be called priority management instead. I’ve written articles on this before but I’ve never really expressed how my personal journey went along with that.

There are couple of things that have occurred over the last year that have really forced me to become a true priority manager and also learn a lot about the importance of ‘Flow’. The first thing that occurred was that I had a baby boy named Charlie. He’s an awesome little dude and when he smiles he makes me forget about a lot of the little things that used to ‘bug’ me.

The other thing that happened was that I found the perfect compliment for my network marketing business and something that fit into my life vision better than anything has in the past – this was a company called Train2Invest. They just happen to be in my home town of Winnipeg and they have allowed me to add an additional revenue stream to my portfolio, learn how to invest my own money for much higher gains than what my financial planner used to get, and to help other people do the same.

My point is that because these 2 great things have come into my life, I’ve really had to pay attention to my priorities and more importantly, I’ve learned a lot about what works for me. Have you ever the read the book ‘You Were Born Rich’ by Bob Proctor. In that book, he talks about the importance of keeping your life ‘clean’ (that’s what I call it – he calls it making room for abundance) so you can allow for things that you really want.

Here’s what has become abundantly clear to me as I’ve been challenged by the ‘Universe’ to adjust my life so I can excel, and focus, on more things that are truly important to me.

‘I Need To Have Organization and A Routine’

this might sound like a simple concept but the interesting thing is that I thought I had a routine before any of this happened but when I chose to have the above 2 things come into my life, I was forced to adjust accordingly or they would both be mistreated – and that just wouldn’t be any good at all.

What I’ve learned I need to do is…

  • have a completely open communication path for Christine (my life-partner) and I where we can openly discuss our personal challenges and develop a plan to fix them – TOGETHER
  • Have clean space – meaning, we couldn’t afford to have anything that weighed on our minds. For example, if we have areas of our house that weren’t neat and tidy, it would do 2 things that were detrimental to our progress.
    • #1 – it would take of space and slow down our flow – meaning it would not allow for new things to come into our lives that we really wanted because it shows that we can’t take care of what we’ve already got
    • #2 – it would be something that could/would take focus off of the more important goals because our minds would be thinking that one thing should be done (cleaning out a messy storage room) when we should be focusing on Charlie or learning how to ‘do what we do’ better.
  • I need to exercise and make time for myself in the morning so I can plan my day. It took me 10 years to accept this fact but, for me, if I don’t exercise regularly, my production goes down. I’m sure that’s the case for most people, but understanding it, and actually doing something about it are 2 different things.

So here’s what we did/do

  • Christine and I chat daily about progress but we’ve also committed to meeting once week to make sure we are on the right path
  • We designated a weekend to get all of the ‘junk’ out of our lives and now prioritize a minimal amount of time to ‘upkeep’ these ‘junky’ things on a weekly basis
  • I have negotiated (it’s tough to do when you have a little one) an hour every morning where I can workout, listen/say my money mantra’s, review my vision, plan my day and review the markets which gets my day off to a great start. I know that sounds like a lot to do in an hour but it can be done when you have system – and truth be known, when you get an hour, you can always stretch it a minute or 2 to get finished (but don’t tell Christine)

I wouldn’t say that we’ve made it all the way yet (in terms of perfecting our lives) but we’re having fun and our focus is able to be put where it is most deserved. It’s a tough thing to figure out sometimes because everyone is different but for me, cleaning, communicating and organizing are vital actions that we have to take in order to live our life vision.

Cheers to Living Your Vision

Donny Watson

204.223.3655

Christine and I on Fraser Island

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Passive Income Spotlight: Option #1 – Real Estate

April 22nd, 2010 Comments »

Understanding all of the six passive income options and what each one can do for you is one of the most valuable lessons you can learn.  Today’s focus is on option #1 – Real Estate.

Quit Your Job Early is committed to elevating the quality of life of everyone we help along the way. The principles that we teach in order to achieve this perfect lifestyle are all based off of substantial passive income. Passive income is not a common concept in everyday life, however most people don’t realize that they are surrounded by it almost every day. I guarantee that everyone who reads this article passes by a piece of real estate that is generating passive income for someone, every day.

Real estate is a large category. Any building or form of property is considered real estate. So how can real estate generate passive income? Well the answer is extremely simple; in fact it’s one word. Leverage! I know there is an abundance of people out there who are so called “experts” on leverage, and don’t worry; none of us here are proclaiming anything. But it’s true; real estate can be a great provider of passive income through leverage.

If the real estate is personal, and you live in it, it is not an asset. One of our mentors, Robert Kiyosaki explains this in most of his books. If you own your own home, and live in it, it is a liability. However, if you own a home, and it brings in more revenue than its expenses, it’s an asset. This may be common knowledge, but it’s also a common mistake.  Before I get into how someone can make real estate work for them, it’s time to look at one more major mistake.

Capital gains are essential to understanding real estate as an investment. If you own real estate and sell it, you are seeking a one-time pay-out, capital gains. There is a major tax associated with capital gains. The ever so popular trend of “Flipping” properties is a good method of making money, if you are seeking capital gains. Again, this is a mistake that Robert Kiyosaki tends to talk about in his teachings. The point here is that chasing capital gains is not passive; the investment is not bringing you consistent returns.

Effectively using real estate as an investment which creates passive income is called investing for cash flow. Cash flow is extremely important, because it is the whole basis behind passive income. Yes the big payout of selling a property for profit can earn you some big returns, but you have to keep selling and earning profit to make a lucrative income. However, if you keep that property as a cash producing vehicle, your investment becomes passive. So how can the average Joe build wealth through real estate?

There are many options when it comes to using real estate to generate cash flow. Three of them are explained below:

  • Rental Properties – If you can muster up the cash for a down payment, and manage to keep tenants in the property, you should show a monthly profit. This option is great, however it requires lots of leverage, good credit, and the work of managing the property
  • Investment Properties – there are various real estate holding companies out there which buy and sell real estate to investors. Most of the time, these companies manage the property as well so you can be the deed holder and worry about nothing else. This option still requires the investment and the credit, but eliminates the responsibility.
  • Multi-Owner Properties – These properties are managed by companies that raise capital to purchase real estate. They cover all the legal work of creating shares, and breaking down the ownership. This option lets you invest whatever you want, with no responsibility either. The best part is that they often perform all market research functions as well.

All of these options prove how investing for cash flow can be made simple, and require almost no work. Real estate investing does offer options for everyone. The key to successful real estate investing is partner with a good company, and search for good properties.

The Quit Your Job Early plan does not involve real estate in any steps of our plan, due to the fact that it does not fit with our core four values. This is because the laws are very different in various locations and it isn’t as easy to be mobile. That being said, we do consider it a valuable wealth building asset, once cash flow has been established. We have a list of partners who are available to suit your real estate needs. Please don’t hesitate to ask for more information!

Cheers to building your asset column,

Mike Perrin

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Delivering Effective Presentations

April 16th, 2010 Comments »

Ever wondered how Steve Jobs does what he does so well? Do you have an important presentation coming up? This post is all about you and how you can deliver an effective and engaging presentation.

I recently had the opportunity to present a full business plan to a panel of investors, and current successful entrepreneurs. It somewhat resembled the format of the popular television shows; Dragon’s Den and Shark Tank. As much as I was nervous and didn’t know what to expect, I shared the stage with some fellow classmates and was not alone. The presentation went well, just as expected but as a team we followed some simple steps that have been drilled into us for the last two years. These steps are the backbone of delivering effective presentations, time after time.

Now once again I need to say I am by no means a specialist in presentations, however as a graduating business student presentations have become a regular event for me.  From instructor to instructor, topic to topic, the content varies but the format and delivery are one in the same. I have developed a simple system based on the teachings in college that can be used, and will be used in future presentation delivery.

The first step of preparing a presentation is always the most challenging because you don’t know where to begin. So how do you begin? The important word that you’ve all heard before is plan. Yes I said it… a presentation will not be very effective without any planning. Planning doesn’t need to be complicated or extremely in depth, it just needs to be done. So what is there to plan? I use a blank piece of paper or computer document and write down all the topics and points that could be presented. This provides scope and direction.

The next step – organize. Have you ever tried to drive somewhere new without a map? In most cases it’s pretty difficult. Organizing the information is basically creating a roadmap for the presentation. It helps when you move into the writing stage, by already having guidance and structure. It also helps when creating your visual aids. Most people these days use a video or PowerPoint format for presentations, which is solely based on the structure.

Delivering effective presentations is not all about writing. In fact you’re not writing a story here at all. The writing stage is where you fill in all the key points for each section in your organized plan. Bullet form is best, and should be kept in bullet form for easy transfer of thoughts to presentation cue cards or notes. The information needs to be concise and to the point. Your understanding of this information needs to be bang on and easily recalled.

Now that we have basically created the entire presentation it’s time to focus on those visual aids. PowerPoint is the most versatile and popular choice when it comes to visual aids. There are some simple rules for PowerPoint that makes it extremely effective and not detrimental to your presentation:

  • Follow the 5X5 or 6X6 rule when creating slides. Content should be simple and should fill two thirds of your slides
  • Slides should be simple, elegant and very readable
  • Use Simple Sans Serif fonts on slides such as Calibri, Times New Roman, and Arial
  • Bold and colors are great ways to emphasise words
  • The data needs to be very concise, just highlight key points, vocally you can deliver much more information

So we have a completed PowerPoint and a well structured presentation that is simple and in point form. The next step in preparation for delivery is a run through its important to test slides and visuals ahead of time, this will eliminate mid-presentation crisis. Run through your part a few times and elaborate on the points in a few different ways to see which way flows the best.

Delivering the presentation is the most important step, but if you have followed these simple guidelines it does not need to be nerve wracking.  Be confident, engaging and relaxed. Open with a question or attention grabber, this takes the initial heat off. Give yourself or have someone give you a clear introduction. Your credibility doesn’t really matter but it helps build confidence when your audience understands what you’re all about. Pause, pause, and pause again. A simple pause between slides or concept creates a powerful break in the presentation and gives you a chance to gather your thoughts.

As a firm believer in the K.I.S.S.  principle, I try to incorporate it into everything I do. Keep it simple stupid. That’s the motto and it works, especially when it comes to presentations. As I stated previously, presentations become a part of college life. I often don’t struggle when it comes to delivering presentations because I take myself through these same steps every time. The corporate world, sales, and entrepreneurship all involve the ability to deliver effective presentations. So stop being scared, take the stage, and rock it! Delivering effective presentations is a simple process, and doesn’t need to be complicated or hard. It just needs to be engaging and if you follow the steps, you will be successful each and every time.

Cheers to sharing the stage one day,

Mike Perrin

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Partnering with an “A” company to make a difference

April 8th, 2010 Comments »

What are the differences between A, B, C and D, companies and what should you look for?

The traditional corporate culture which was based on serving the company over any other needs is falling by the wayside quickly. The past mentality which involved looking for job security at the big stable corporation has changed substantially. The business landscape has changed drastically, exposing a vast array of exceptional business opportunities with great purpose. As stated in The MAX Code, “The new model of success is this: Find or create a cause you care about deeply, one that embodies your core passions and highest values, and devote your life to that cause with entrepreneurial fervor, speed, and agility.”

As a business administration student, about to graduate, I am told every day to go out and apply for jobs. The focus is all about getting the foot in the door at some big company, which is easier than you, may think. In fact these companies come to the school all the time, to recruit ambitious students. So what would the response be if my resume contained this “my goals are to make a positive difference in society and for individuals, where profit is just a by product of fulfilling that mission.” Employers don’t want the strong minded individual with a purpose! They would prefer “hard working, enthusiastic, business administration graduate looking to further my skills in the industry and meet the goals of the organization.”

Now, I’m not saying that the above mentality is wrong in anyway, it’s just not with the times. I would rather align myself with an opportunity that has similar goals and values that I have, and who wants to work with me to achieve those values. Which lead me to the concept of partnering with an “A” company.

So what makes a company an “A” company and how does it differ from a B, C or D company. “B” companies put their mission behind generating profit, “C” companies are completely focused on the money and don’t even consider the mission. Lastly, “D” companies exist with the sole purposed of making profit at the expense of others. “A” companies operate with intention to fulfill their mission and social responsibility, with profit being the function of fulfilling that mission. These companies exist to serve people and make society and the world a better place.

The Quit Your Job Early team has “A” company motives, and has partnered with an “A” company named MAX International. We exist to inform and educate people in the areas of financial intelligence and passive income, while providing a vehicle to achieve the perfect lifestyle. Living the perfect lifestyle provides you with the ability to spend time fulfilling your personal goals and ambitions. The Quit Your Job Early motives include: flexibility, mobility, health and wealth.

It doesn’t matter if you’ve been in the corporate environment for years, or if you’re a student like me, the message is the same. The future is in the opportunity the best fits YOU, while being true to a mission and social responsibility. If that mission is solid and truthful, profit will always follow closely. I urge you to do your research before you partner with any company, and look for that “A” company.

Cheers to your future “A” company partnership,

Mike Perrin

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Time Management is so important

April 4th, 2010 Comments »

How often do you hear yourself say “I wish I had more time”.  Really knowing how to effectively manage your time is so important when trying to get the things you want out of life.  Time management is the key to your personal and career success, yet this subject is often overlooked or not taken seriously.  If you apply these principals I promise you that you will notice such a huge difference in your life and you will be that much closer to reaching your goals.

It is important to understand that time is limited.  You cannot pause, rewind, or fast forward time.  Everyone gets the same amount of time each day.  Remember that if you don’t use your time wisely or effectively you will never get it back.  Please imprint this principal in your brain.  Time is limited.

Do not blame time.  A lot of people complain that they don’t have enough time!  I am very guilty of this!  But some people blame lack of time for everything!!  There’s not enough time to exercise, not enough time to sit and cold call, not enough time to spend time with my family…etc.  Remember, time management helps you use the time that we have in better ways.  So instead of blaming everything on time, look at what you are doing with your time and fix it.

You need time to do almost anything worthwhile in life!  Waiting for my time is a loose situation always.  You need to learn how to make time for those things that are important to you!  Even if you only can give a small amount of time each week or each day, this helps.  You will be surprise how much progress you can make when you make time for something, even if it is just an hour a week.

Being organized is another important took in time management, planning out your days, and your weeks in hourly increments.  For example, from 8am to 4pm I know that I am a sales representative for the company I work for.  But from 430pm-930pm I am a mother to my kids, and a wife to my husband.  From 930-1030pm I know this time slot I read a book for personal development, maybe reading a book that will enhance my skills as an entrepreneur.  These time slots change from day to day.  I love to play guitar, it is my passion so I set aside an hour each day of the week (Saturdays) to play guitar!  If you use your time wisely and if you are organized about it, you will get more out of life and be able to do things that you always wanted to do, and you won’t stress or complain about not having enough time.  There are too many choices. In this day and age, there are so many ways you can spend your time, which you need some sort of plan to make intelligent choices.

Time management helps you make conscious choices so you can spend more of your time doing things that are important and valuable to you.

Cheers to your time management success,

on the Island Crete, Greece

Vanessa

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Posted in Miscellaneous, Perfect Lifestyle Cool Stuff, Videos, etc, Vanessa Nuelan

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Social media can impact your business in a big way…

April 2nd, 2010 Comments »

Can social media impact your business both positively and negatively?

One of the most influential and effective mediums for sharing information and forming relationships is social media. This includes blogs, social networking sites such as facebook, youtube, twitter, and linkedin, as well as social bookmarking and other community oriented websites. Sharing photos with friends, reconnecting with old friends, forming new relationships, customer service, the list of reasons to use social media is endless. So how can social media impact your business both positively and negatively?

Social media is a powerful tool that can be used to form relationships and share information with a vast network of people. There is a huge opportunity for businesses to interact with both their current and future customers. That being said, it’s important that the business understands the power social media can have, and if used incorrectly can potentially do more harm than good. Two short examples of how social media has impacted businesses in a big way can be found below:

Case #1 – Jetstar Airlines, Australia

Based on recent social media success, Jetstar has recently announced that 40% of its new marketing budget will be directed towards social media. This is a bold move by Jetstar, which they feel is one of their most effective ways of informing passengers of new route launches, special offers and announcements, sale and news updates, and responses to customer inquiries. Last year, Jetstar ran an exclusive sale to its twitter users to help celebrate the airlines fifth birthday. With 6,000 twitter followers in Australia, the airline was able to sell 1000 seats for 2cents per seat in two hours! Impressive! This is a great example of the positive impact social media can have on a business.

Case #2 – Nestle’s Facebook Page

A recent post to the Nestle facebook fan page, contained an offensive statement regarding customers with altered Nestle logos as their profile pictures. Nestle reacted rather quickly to a statement and it drew hundreds of offensive and defensive statements within minutes! Some people say this is a PR nightmare, while others have stated that this actually helped Nestle. Either way, the person running Nestle’s fan page should have taken a more relaxed approach.

As seen above, social media can impact a business in a big way. I personally think social media is a great medium for interacting with large audiences, building relationships, and sharing valuable information. However as a student of the internet, and an experienced entrepreneur I understand the risks. My advice to you is to jump on the social media bandwagon and be careful with your comments!

Cheers to your social media empire,

Mike Perrin

Golfing in Kelowna

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Tax savings and tax expenditures, how can you benefit?

March 31st, 2010 Comments »

How can your home business benefit from these so called savings and what are the differences between savings and expenditures?

With the Canadian income tax deadline approaching on April 30, 2010 there is a rush of people trying to get that anticipated return. As a graduating business student and entrepreneur I have realized how important it is to understand how tax credits and tax expenditures can impact any business. There actually is a big difference between tax expenditures and tax credits. So how can your business benefit from these tax options?

One of my textbooks refers to tax expenditure as “a revenue loss caused by the exclusion of some item from the tax base (Rosen).” Non refundable tax credits are tax expenditures because they count as deductions from the tax base but yet no actual transaction of money exists. Meaning that any deduction such as education tax credits, business tax credits, personal tax credits that are non-refundable, are simply exclusions to the tax base on behalf of the government. This is a benefit to us.

The Government’s goal for offering tax credits to students and business owners is to reward them for the commitment to getting an education or starting a business. It’s more of an investment by the government on students and entrepreneurs with the expectation that they will bring value to the work force. Educated people tend to earn more, or are more likely to start a business and become assets to the Canadian economy. This investment in the work force is beneficial to the future

Non-refundable tax credit options include: public transit passes, home renovation expenses, interest on student loans, tuition, textbook, and education credits, home buyer credits, and many others. For a complete list of non-refundable tax credits, check out the Canada Revenue Agency.

Tax savings such as the $2,844 you get back after the two years of being enrolled in my diploma program, are paid out in the income tax return. Therefore a payout of cash is a tax savings, as you are actually receiving the money based on your income; another benefit to us.

It’s really important to understand the difference between these benefits so that us as business owners and individuals can get the best possible return. The government doesn’t make these rules for nothing! IF you file your taxes yourself, you need to have a clear understanding of how to maximize each category. That being said, even if you have a good accountant it is important to have a clear idea of what you’re entitled to when it comes to taxes.

As a business owner, you are also entitled to “write off” tax deductible expenses. These expenses are still incurred by the business however the government waves the tax come tax time. Tax deductible expenses include: advertising and promotion, administrative fees, business taxes, bank fees, conventions, dues and subscriptions, insurance, interest, licenses and fees, meals and entertainment, office supplies, professional fees, rent, property taxes, travel, telephones, etc. The deductible expenses vary depending on where the office is located; if it’s a home office, if there is automobiles involved, etc. Important: All business expenses must be incurred to earn income to be considered tax deductible. Again, you should consult with an accountant or the Canada Revenue Agency for their list of allowable expenses.

One of the many benefits of owning a business is the tax advantages. It doesn’t have to be expensive or complicated, and can make a big difference in your finances. If you don’t use an accountant, I highly recommend finding a good one. I have never met anyone who regretted it.

Cheers to a healthy tax return,

Mike Perrin

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