Simply Junior

What Is a Budget?

The purpose of a budget is to give you control of your own money. With a budget, you actively decide what will be spent, and where your money can best be put to good use. There is nothing like the good feeling you get when you are in control of your money, rather than your activities and expenses controlling you.

What Is a Budget Plan?

A budget plan is a plan where you formally draw up a plan for expenditures for a given period of time, usually one year. The budget process includes all income sources and how that income will be allocated to expense categories. The biggest problem or hurdle with budget planning is to stick with it. Most families do not plan to fail, they fail to plan. A good plan will provide an excellent road map for success. A budget is just a tool and periodically, it needs to be fine tuned.

What Are Income Sources?

Do you know where your income is coming from and how much it is? Do you know what should be included as income? Here is a guideline regarding what should be included as income.

Wages. This is your net pay from all paychecks. How do you get paid: weekly, bi-weekly (every two weeks), bi-monthly (twice a month) or monthly. Retirement income. Interest and investment income. Do not include this unless it is consistently the same yearly. Alimony. Do not include this unless you consistently receive it and there is no reason to believe you won’t. Bonuses, a raise or overtime pay from your employer. Do not include these since they could be discontinued at anytime. Tips. Do not include this unless you can average the amount based on what you received in prior years.

What Are Expenses?

Expenses include everything you spend. Do you know how much you are spending for categories such housing, transportation, food, clothing, entertainment, child care, medical expenses, charity and debt? Are you overspending for non essentials and thus not able to meet your necessary obligations?

Based on US News and World Report for budget allocations, the following is a guideline for how budget expenses should be allocated:

35% Housing - Includes: mortgage or rent, utilities, insurance, taxes and home maintenance. 20% Transportation - Includes: car payments, auto insurance, tag & license fees, maintenance, gasoline, tolls and parking. 28% Other - Includes: food (12), clothing (3), entertainment (5), child care, medical expenses (5) and charity (3). 15% Debt - Includes: student loans, retail installment contracts, credit cards, personal loans, tax debts, medical debts and alimony payments. 2% Savings - You should plan to save this amount throughout your working years, with a goal to increase it to 10%.

How does your spending compare to the guideline? Or is it impossible to determine because you have no idea where your money is going and how to even categorize it?

Here is a list that will help you categorize your expenses.

Fixed ExpensesThese are expenses you have little control over.

Utilities: Phone, disposal, water, electricity, gas heat, sewer

Home: Mortgage (usually includes insurance and property taxes) if not, insurance and property taxes

Health: Dental, health, life, and eye insurance (these items are usually covered by payroll deduction) if not, than add them here.

Income Taxes: Include Federal, state, local and FICA taxes only if you are self-employed.

Additional Outstanding Debt: student loans, retail installment contracts, credit cards, personal loans, medical debts and alimony payments.

Non-fixed Expenses

These are expenses you have more control over.

Food: Groceries, lunch, eating out, snacks, and date night.

Child support: Day care, babysitting and alimony payments (if it applies to you).

Transportation: Gasoline, maintenance, repairs, tolls, taxis, subway, fees and insurance premiums for all vehicles.

Debt Payments: Credit cards, Student loans, other loans.

Entertainment: Cable TV, Computer expense, software, hobbies, dues, subscriptions, videos, movies & admission fees, amusement parks, and vacations.

Clothing: Children and parents.

School: Books, supplies, fees and gym expenses.

Pet Expenses: Food, Grooming, board, Vet shots (if this applies to you).

Miscellaneous Items: Toiletries, household products, gifts, church, other donations, grooming (haircuts, make-up etc.) birthday and anniversary cards, children’s allowance, spouse expense money (amount for each spouse to be spent by them for any reason without explanation) and insurance premiums (not covered by payroll deduction).

Savings: Emergency fund, savings for retirement or children’s college fund and vacation fund.

If you are still unable to determine how you are spending your income, keep track of your expenses for a couple of months or until you can more accurately list your expenses.

Create Your Budget Plan

You are ready to create your monthly budget plan. Using budget software or a Microsoft Excel spreadsheet will aid the process. The budget plan will be divided into monthly buckets. Take your total planned income for the year and divide it by 12. Take your planned categorized expenses based on prior actual expenses and divide the categorized expenses by 12. Enter your total income in monthly columns; then enter your total expenses in monthly columns. Compare planned monthly income with planned monthly expenses. The total monthly expenses must not exceed the total monthly income amounts. If expenses exceed income, planned expenses must be decreased. A good budget plan should show planned expenses less than or equal to planned income.

Share Plan with Family

Sit down with the entire family and provide them copies of the proposed family budget plan. If your children are under the age of 5, do not include them unless they are receiving an allowance. Go over all the details of the plan. Provide information on what will be done with raises, bonuses, and overtime income if received during the year.

Tell the family that this is a plan and is not cast in stone. Indicate that adjustments may be made during the year. Answer all questions. Get each family members buy in. Then, STICK WITH YOUR PLAN. If any major situation should come up, hold another family conference and explain to them the situation.

If you are single, make a commitment to STICK WITH YOUR PLAN. Make adjustments as needed.

What To Do With Amounts in Budget Plan Not Spent For a Given Month?

This is a real good question. As your budget plan is followed throughout the year, there will be months in which you will not spend a planned expense. When this occurs, do not spend this money on something for which it was not designated. Most families have a tendency to spend the money on some other item. To prevent this from happening, keep the unspent planned expense amount in a savings account. When the need for paying the planned expense occurs, the money will be available to transfer from savings into the checking account.

Conclusion

If you follow the process above you will begin to take control of your expenses and have a road map for greater success. As you continue the process year after year, you will see new spending control trends. You will become successful in controlling your spending. Remember, most people do not plan to fail, they just fail to plan.

When you decide to begin your own business, you will get startup advice from everybody that surrounds you. Some startup business ideas will be helpful and productive; but others will be advice that is decent at best. Fortunately, you can find many services and programs that are dedicated to giving you expert business startup help and advice to get you started on the right track for success. Before heeding any well intentioned advice, you can take a few steps on your own to help you achieve success in your new business venture.

One of the best pieces of business startup advice is to get organized. A good day planner or computer software program will help you do this. Getting organized does not just mean planning out your work, but it also means gathering your information and putting it into some type of system. Gather the phone numbers and addresses of all of your business contacts and even potential customers. Write down information about each of them so you can refer to it when you speak with them. This gives them the feeling that you are giving them your best attention for personalized service. Also, make lists of things you need to do. This keeps you from being overwhelmed by trying to remember everything.

Another important piece of startup advice is to think of a catchy name for your business. It should be a name that is both easy to remember and gives some information about what your business provides. Once you have decided on a business name, register it with the county that you live in. If the name is already taken, they will let you know and you can think of another one. Have a few names prepared because that will save you from returning to the registration office. Registering your business name is also very inexpensive.

Once you have a business name, you can start advertising your business. One of the best ways to advertise your business is with professionally-made business cards. Any reputable business guide will tell you to have your business cards made by professionals because business cards are the best way to make an impression. Customers will be able to tell if you have gone cheap on your business cards and, as a result, wonder if your services are cheaply done, too. In addition, professional stationary is a great piece of startup advice. It’s just a nice touch that will often set you apart from other businesses in your area.

Finally, a good record keeping system is essential startup advice for a new business. The simpler the system, the easier it will be to keep track of your income and expenses. Save all of your receipts, bank statements, and invoices for later reference. Open a separate checking account for your business to help keep the finances separated and in order. Also, be sure to keep track of your profits and set aside approximately 30% of your income for tax purposes. Consult with your local government to ensure that you have acquired all of the necessary licenses and permits to conduct your business legally.

Expert business startup advice is sometimes hard to find. Most people enjoy spouting off unprofessional advice, but a smart and conscientious business owner needs to know what advice to listen to. You can find professional resources for startup advice through many programs and organizations that specialize in helping first-time and inexperienced startup small business owners. Before you look for startup advice, though, you should work on getting organized to be sure that you can keep track of your important files for your small business start up.

So what are the factors to consider when you purchase an existing self-storage Facility? The traditional measure for determining value is the capitalization rate, or ratio of net income to purchase price. As investors, we are always striving for the highest return on investment, (ROI) but what if you’re considering several properties with similar cap rates? What follows is an assessment of what can influence your decision to invest in one facility over another- all things being equal.

The first step is to determine your own investment objectives. Are you going to be an active or absent owner? How will you manage the property? Will you hire a management company? What sort of return do you require? What are your investment objectives? How long do you plan to hold the property before reselling? Answering these questions will help you find the best property for your interests.

Site Selection

You’ve probably heard the ago old saying “the three most important things in real estate are location, location and location”. Well, it is one of the primary factors to consider, as it’s just about the only thing about a property you can’t change. With a poor site, you’ll have to spend more money and effort on marketing to keep your units filled, and you will almost always be at a disadvantage compared to your competitors who are located on a main road near other retail stores, or in the main traffic areas in the market. But what makes for a good location? Storage facilities tend to do better in spots well suited for retail business.

A site should be convenient, visible and easily accessible to attract customers within the trade area. Chain retailers have site selection down to a science, and their approach can work for you too. Use the following criteria to evaluate the viability and quality of a Self Storage Facility. You can rate a site on a scale of one to 10 in six categories, multiplying each score by the indicated weight. Once you’ve determined the number of points for all areas, add them together. If a property doesn’t score at least 500, it’s unlikely it will be able to compete in the market over the long term. This is a very creative way that I gleaned from Aaron A. Swerdlin, who is with Storage Investment Advisors LLP. His list is as follows:

Visibility

Visibility is among the most important characteristics of a site. As the market becomes increasingly competitive, visibility becomes more critical.

0-1-Sign only, no view of office from street
2-3-Large signage, no view of office from street
4-5-Signage and office are visible from street going one direction
6-8-Signage and office are visible from street in both directions
9-10-Full project visibility
(Multiply the score times a weight of 15 for total points in this category.)

Access

Access is clearly a major issue, but modest compromises can be made for a site that is otherwise superior.

0-2-Not on a main street access is very difficult
3-5-Access is clear but not direct
6-8-On a main street with only right-turn options
9-10-On a main street with a center turning lane.
(Multiply the score times a weight of 10 for total points in this category.)

Traffic Count

Drive-by traffic is an important source of business. However, excessive traffic can also inhibit access.

0-1-On a rural road
2-3-On a feeder road
4-5-On a main road with 10,000 to 15,000 cars per day
6-8-On a primary road with 20,000-40,000 cars per day
9-10-On a primary road at a freeway intersection
(Multiply the score times a weight of 9 for total points in this category.)

Site Configuration

Frontage and potential expansion are the significant issues to watch for in this category.

0-2-Less than 2 acres, no frontage, flag lot
3-5-No room for expansion, long or narrow site, perpendicular to road
6-8-Room for expansion, reasonably square site, good frontage
9-10-Excellent frontage, corner location, square/rectangle site, room for expansion
(Multiply the score times a weight of 8 for total points in this category.)

Competition

Competition is another important issue. Properties with less existing competition or barriers to entry for future competitors are best.

0-2-Large project next door
3-5-Nearby vacancies, planned projects or sites under construction
6-8-Low vacancies, no competition, no new projects planned or under construction
9-10-Rents increasing, no vacancies, no building planned or under way
(Multiply the score times a weight of 12 for total points in this category.)

Demographics

Higher household income levels are generally conducive to self-storage because customers can afford it. But some areas with smaller homes and no basements are also promising because customers need it. 0-2-Lots of basements, low and declining income, population of less than 50,000 within a 5-mile radius, population growth of less than 1 percent per year.

6-8-Few basements, per-capita income of at least $25,000 per year, single-family residential backup, population of 100,000 to 200,000 within a 5-mile radius, population growth of 1 percent to 1.5 percent per year. 9-10-No basements, per capita income of at least $35,000 per year, high-end apartment backup, population of at least 200,000 within a 5-mile radius, population growth of more than 1.5 percent per year (Multiply the score times a weight of 10 for total points in this category.).

Self-storage is a retail business, which is why facilities are often referred to as “stores.” So look for projects with good retail locations. You won’t find a Wal-Mart in a industrial park, so don’t buy a storage facility in one! You want a visible, accessible site in the heart of your customer base. This will be your most important marketing tool, especially if prospects can see the building itself-not just your signage-from more than one direction. You don’t necessarily need a lot of frontage, so long as it’s clear to customers who you are and how to access your site.

High occupancy will serve as evidence of sufficient demand in the trade area, but if occupancy is low, you need to determine whether the property or the market is to blame. You can make changes to management, product offerings, etc., but you can’t change your location. Reviewing the competition and the relative vacancies and rental rates is the best way to make the call. If vacancies are high and rental rates are declining, the demand is simply not there. If rates are stable or increasing, you can rest reasonably assured of future business.

Quality of Construction

The type and quality of self-storage construction vary widely. Admittedly, a dollar of income from a low-quality project spends just as good as that from an upscale facility, but class matters in ways that count. Customers are generally more attracted to an aesthetic site, which means better occupancy and higher rents. A well-built project also requires less maintenance, which translates to lower expenses. It’s generally easier to finance and insure a higher-quality project. And when you’re ready to exit the investment, a better project will sell faster and for more money.

Evaluate a project with an eye towards buying the best you can afford. Lots of features and amenities can be added after a facility is acquired, so focus your evaluation on items that can’t be readily altered. Here are a few quick guidelines:

-Concrete or brick construction is superior to metal, which can corrode or rust. Wood can be susceptible to rot, insect infestation and fire.

-Concrete drivers are more durable than asphalt, but both are superior to gravel. It’s best to have drives of at least 25 feet in width and turns with room for moving trucks. An access-control gate is practically a necessity, and it’s best if customers can get to the office without having to go through it. A project with no climate-controlled space can be at a competitive disadvantage.

Pitched roofs are better than flat roofs. Standing-seam roofs have a long life and are low-maintenance. Screw-down roofs are good too, but the washers that make screws watertight can deteriorate over time, necessitating replacement. Flat or built-up roofs tend to be more problematic. Septic systems are less desirable than municipal sewer service. Insulated buildings are more comfortable for customers and better protect their goods. Exterior units need a weather lip to prevent water from entering the building.

Size Matters

As a rule of thumb, large projects are those with at least 45,000 square feet; mid-size projects range from 30,000 to 45,000 square feet; and small projects have less than 30,000 square feet. Large projects, which enjoy a better economy of scale, are generally more desirable. This demonstrated by the fact they trend to trade at lower cap rates. Operating expenses for small facilities tend to represent a larger percentage of gross income. With a higher break-even point, they carry more risk.

Buying a facility with room to expand can be highly profitable-provided that authorities will allow you build more units and customer demand is there. When you expand a project, only variable expenses increase, so a larger percentage of the additional income goes to the bottom line. Expansion can also make it possible to resell at a lower cap rate or refinance at a lower interest rate, thereby deriving additional value from the existing income stream.

Knowing what to look for in a property allows you to make better buying decisions. Seek opportunities with long-term viability. Closely examine each location, keeping in mind that storage is a retail business. Consider quality, remembering expense items such as upkeep. You may not find the perfect site, but with intelligence and a little luck, you can hit upon a property with optimal factors for value and growth.

Yard signs are the most obvious, yet underutilized selling tool in the Realtor’s arsenal. If you are one of those Realtors, who is still married to the gatekeeper business model in which all information about the home should be closely held, you may be missing real opportunities to expand your business. It begins with the ordinary real estate yard sign.

The real estate signs For Sale is your chance to show neighbors, seller’s relatives, buyers and other sellers how you can really pull out the stops to market a home. By festooning the sign with sign riders, feature sheet holders, and email addresses, you make the sign come alive with enthusiasm and energy. Anyone who looks at such a busy sign will see a busy agent who is determined to sell this particular home.

Think about the curiosity factor. Would not you be tempted to stop and look at a home that invites you to “Take One, Please?” By comparison, a sign with only a broker’s name and a phone number looks exactly like what it is – an advertisement for the broker, not the home.

The purpose of your sign is to stimulate activity around the home. By making people stop, look and think about this home, you are expanding your customer base. Curious neighbors and Sunday drivers could be your next clients.

A truly professional real estate agent uses colorful residential yard signs to increase traffic, communicate important information and make a stronger curbside impression. Lightweight curbside signs are very often used to list amenities and generate interest in my rental properties.

Make a great drive-up impression with a colorful yard sign and remember that realtors signs are the first point of contact you have.

If you are one of the many investors saving for retirement and wondering how you will maintain your standard of living as your investments are not performing and the Sate looks to provide less and less this article is for you.

Quite simply, most of the baby boomer generation (that’s about 70 million) people face a retirement where they wont maintain the standard of living their used to.

They need high growth and low risk but what are the best investments?

Getting low risk and high rewards

Saving for retirement means getting low risk and high reward but mutual funds and equity managers generally perform poorly and double digit gains are considered good but with inflation eating in. that’s not much!

Its time to look at other ways to save for retirement and there is one method that is becoming more attractive to Americans and other foreigners than ever.

Its investing in Costa Rican land and property.

If you have never considered this as part of your savings for retirement plan then you should consider this

1. Costa Rican land & property prices are booming

Over the last 5 years prime property prices are up by as much as 300% and year on year since 1997 when the boom began and downside has been almost non existent.

Does this sound a better return than your mutual fund with less risk?

2.The boom will continue

It is exactly the problems in the US with regard to getting better performance that will drive these prices higher.

Many Americans are not only thinking of buying land and property for investment purposes but they are moving to Costa Rica in ever increasing numbers

Why? Because they can get property at 70% cheaper, living costs are 70% cheaper and they can live in a stable country with all the comforts of home just 3 hours from the US!

3. Investing the easy way

The government makes buying land and property easy, you get the same rights as residents and its very tax efficient.

4. Risk / reward

Saving for retirement is all about risk / reward.

You want the high growth rates without huge downside swings, Costa Rican property and land investments provide you with this.

Keep in mind

If you buy a property as an investment you don’t have to wait to sell it to make money -rent it out in the booming rental market.

As more and more people move to Costa Rica from the US and more big companies such as Intel and proctor and Gamble re locate parts of their operation, the rental market will continue to be buoyant.

Finally, you may end up doing what many Americans already have..

Simply, don’t sell your investment property move to Costa Rica and live in it.

Many investors started saving for retirement by buying a second property in Costa Rica, then when they saw the standard of living they moved! Consider this:

You can live on $2,000 a month, there is no tax on social security checks, the country is safe, stable, has good infrastructure, all the comforts of home, a large American population (so you feel at home) and all this is just a 3 hour direct flight from the US.

Of course, when saving for retirement wouldn’t it be nice to own or live in a paradise? With everything from pristine beaches to rainforest and one of the best climates on earth Costa Rica has this and much more.

If you have never considered Costa Rica in your saving for retirement plans or re-locating, then you should it makes perfect sense.