Getting Rich with the Standard & Poor


If you still haven’t heard this during your life, brace yourself: employees never make as much as their employers. Some people choose to point out the most extreme examples of massive CEO salaries compared to the newly hired janitor. Those are usually skewed figures, but the average CEO still makes 5 times more than his average workers. That’s how pay compensation is designed. The person with the most responsibility and risk exposure gets paid the most. So you’re just going to work really hard until you’re the CEO, right? Statistically speaking, you aren’t.

Without defining any particular company as a pyramid scheme, it’s easy to notice an ever-narrowing structure in all companies. A small group of owners appoints a slightly larger group of managing directors, who work over a larger middle-management group, which is finally over a mass of people executing on trickle-down orders. The money flows up the pyramid and the mundane tasks flow down it. I’m going to play the realist/pessimist when I tell you that you aren’t likely to work your way up beyond middle management in your lifetime. The potential for any one person to become a CEO is on par with gambling, just based on the numbers. Unless you start your own company, you shouldn’t bet on becoming CEO. If you think middle management is a great place to end up, breeze through the heaps of research identifying the wage stagnation over the past decades. Employees aren’t in a position to get ahead in life.

Companies Don’t Invest in Employees

Corporate profits have rebounded since the Recession, yet those haven’t translated into better pay for the average worker. That’s largely due to corporate stock buybacks. Companies would rather buy back their own stock and reinvest in themselves than spend more on employees. Owners and CEO’s are largely paid in stock options and buybacks keep stock values higher. It seems cruel from the employee’s perspective, but if you or I owned a company, we would prefer to use profits as effectively as possible to benefit ourselves. That rarely includes shelling out more to bottom-tier and middle-tier workers. So how can someone who is just an average working stiff get ahead if their wages aren’t going up and they aren’t likely to run the company they work for?

Emulate the Success of Others

You may not be in a position to start your own business or become CEO where you work, but nothing is holding you back from investing. Each of us can find a way to allocate some capital towards investing. You might have to start packing your own lunch or pick up some side work for a while, but you can and should invest. Company owners are the ones getting ahead, and buying stock makes you part owner in the companies you buy.

But then there is the question of which investments. Which stocks should you buy? For starters, everyone should buy into the S&P 500. Standard and Poor’s index of 500 Large-Cap corporations is the bellwether of the US economy. It also happens to be outperforming wage growth by leaps and bounds. What does that mean for the average worker buying into an S&P 500 index fund? It means they can put their money to better use by growing it in an investment than by waiting for their next raise. But most people feel like they are strapped for cash with their stagnant wages. What’s the average person to do?

Here’s my most common suggestion for people who feel they have “no money to invest”. Stop going out to lunch with colleagues because a book told you it’s a great way to schmooze your way to the top. It’s a waste of money. Replace $20 “networking” lunches with $2 sandwiches and veggies each day and you’ll have $90 to invest each work week. Invest that $90 each week in the S&P 500 for 48 work weeks and in one year you’ll have invested over $4,000. The S&P 500 is currently yielding an earnings growth rate of 12.28%. The average wage growth rate is 2%, if you get that raise. Going to lunch with peers or your direct manager every day for one work year will not get you a 12.28% raise. If you have already been bringing your own lunch, take a moment to evaluate your lifestyle. Find the wasted dollars and invest them. Remember, your boss won’t pay you a cent more than he has to for your work. You won’t start winning until you’ve put your money to work in an investment.

4 Reasons to Switch to Cloud Accounting Software


For years, small business’ accounting software was a closed off system that gave information only privy to the accountants on the team. There was no easy way of seeing what cashflow looked like, which invoices were still outstanding and whether or not it was going to be a strong quarter.

Of course, the accountant could prepare daily reports for the business’ executive team, but there’s nothing better than being able to pull up your smartphone or tablet and see a quick, easy-to-read dashboard that shows you all of that information and more.

Here are some reasons why it’s time to switch to a cloud accounting platform in 2015.

Truly understand your cash flow

You should never be at a loss for words when someone on your team asks you what cashflow is looking like for the week. Cloud accounting software, such as Xero, can provide you that up-to-date information in real time. Xero’s dashboard, for instance, shows you how much money you have, where it’s being spent, who still owes you money and who you still owe money. Better yet, all of this can be accessed from the convenience of mobile applications.

Work on the go

Today’s modern-day business worker isn’t constantly in an office. In fact, many small businesses operate remotely. That’s why it’s important to use cloud accounting software that allows you to work wherever there’s an internet connection. You can reconcile your bank account from an app, and even snap photos of receipts that can be earmarked as expenses.

Total integration with everything you do

Software like Xero and even Quickbooks to a degree now, integrate with a slew of business-related apps. When you mash all of your apps into your accounting software, you can receive a more comprehensive overview of your business. If you use Expensify for your business’ expenses and don’t want to switch, it can communicate with Xero or other cloud accounting software, and show you exactly where the money is traveling.

Cloud can get you paid faster

Cloud accounting is just an overall faster process. You never have to worry about forgetting about collecting on an invoice because your dashboard — or any alerts you set up about overdue invoices — are blankly staring at you. You can set alerts on your mobile devices, or even collaborate with invoice-specific apps to send out email reminders to your clients. As a result, you’ll get paid faster and improve your cashflow.

The days of traditional accounting software are numbered. Expect more businesses to transition to cloud accounting in the very near future.


The World of a Freelance Writer


Oh my goodness- that should be one of the best jobs in the world.

This is something you might hear quite often if you are a freelance writer. I certainly am not talking up this profession, but it is just how it is. Most of the freelance writers think they have one of the best jobs in the world.

Seemingly, a freelance career more so a freelance writer profession does sound pretty cool. You get paid to write on anything under the sun. More so, the pay is higher if you have enough experience under your belt on the topic you are asked to write on. You get to work with different clients from different parts of the world. You get to become your own boss, calling your own shots. You get to strike a good balance between work and life, better than you did at your last 9 to 5 job. You get to meet clients that never cease to amaze you, and you proudly get to call it your profession.

The whole universe thinks of freelance writing as something incredible.

Maybe not.

The reason being that, to put it shortly, the pay is not always handsome, there is not enough work coming in all the time, and there are thousands of freelance writers out there who are all set to do your job for I-can-absolutely-do-this-do-that- free.

That hurts.

What’s true?

Is this really that good a job as it is touted to be? Is it the best? Or is it ridiculously overrated?

Nevertheless, there is absolutely no dearth of interest in people to become a top-notch freelance writer, so I just thought I might give you a tinge of reality about this profession.

It is one of the best jobs in the world. Not quite.

Let us look at the good bits first.

  • As a freelance writer, you get to decide how much is too much. That’s cool. You also decide when you want to work. There is absolutely no trace of office politics involved, and there is no boss micromanaging you. Work from the cafe or go home, change into your underpants, lock yourself in your bedroom and start cranking them out at your own pace.
  • A freelance writing position with a reputed media outlet is good to all those who are looking to achieve work-life balance.
  • A freelance writer with better-paying gigs will be able to cut their work schedule down to say 25 to 30 hours per week, freeing up a lot of time for other important things in life.
  • A freelance career allows people to spend time on their hobbies, volunteering in between work assignments and other commitments.
  • More good things: You do get to pick the work you want to do. You can drop the copywriting work if it has become too redundant of late and focus more on magazine articles if that is where your interest lies. Further, if your hands are full and you think of turning much of the work away, you are free to choose what to work on and what to turn down.

But there is more to freelance writing than you think. Yes, there are a few downsides you need to understand.

  • There’s the pay- not all freelance writes make as much as they would like. The income is not always stable to fall back on. Word rates that publishing companies and media agencies pay freelance writers have not gone up, budgets are no more attractive, and more importantly, potential media outlets that used to offer work to freelance writers are shutting shops.
  • Secondly, things don’t happen at a fast pace. You may not land lucrative assignments from high-paying editorial agencies as soon as you become a freelance writer. In this field, one things lead to another so you have to be patient enough until things take off.

A freelance writer that I know stumbled onto a website called thepensters where many contributors were needed. Though she wanted to pursue a freelance career, she had no experience to show. However, she figured an English major should have no trouble stringing two sentences together. She did not get as many gigs as she’d have liked to, but after some shaky weeks, she started to take home a decent income as a freelance writer. Another freelance writer started out at thepensters picking up the odd contract of freelance academic writing on top of his regular 9-to-5 job at a copywriting agency, and there’s no looking back. He says he enjoys being able to do what he wants to do, and it is certainly useful to not to have to commit to anything. A surge in demand for writing talent and broadband ubiquity have actually colluded well to make freelance career a very feasible option for such writers.

Ask any freelance veteran about their freelance career they would say it is not perfect. A freelance writer job is not the best in the world. However, even with all those negative points, for someone who loves to write and loves to be their own commander-in-chief, this is a pretty good job.

Sadly, such jobs do not come along easily.