Did I Qualify for Self-Employment Tax Deductions?

Did I Qualify for Self-Employment Tax Deductions?

Although I have been working for myself, I still feel like a dunce when it comes to taxes. Everyone knows the American tax code is one of the most complex systems in the world. So, you can understand why it ratchets up my anxiety every year as I prepare to file. Now that I’m managing my business’ accounts as well, it’s even more panic-inducing. I have spent countless hours reading up on what the self-employed should know. However, I still continually ask myself “Did I qualify for other self-employment tax deductions?” or “Did I miss something important?”

Whenever I have basic finance questions, I find it hard to ask my peers. So, I hold my tongue for fear of looking stupid. As much as I’d like to avoid the subject altogether, I know I can’t. Therefore, I turn to online resources and libraries to learn what I need to know. Then, I ask my financial advisor more questions after I have a basic grasp of things. Here’s what I’ve learned about self-employment taxes so far.

What is the Self-Employment Tax?

When I started my own business, I went straight to Investopedia to read up on all the tax codes and deductions that applied to me. Now that I was working for myself, my federal taxes would no longer be deducted from my paycheck. Although I expected to pay a decent amount of money in taxes, I wasn’t sure how much it would undercut my earnings.

As a freelancer, the IRS views me as both the company and the employee. Unfortunately, that means I am responsible for paying both portions of Medicaid and Social Security taxes. When combined, the self-employment tax is 15.3%. While this seems like a shocking number, I discovered that there were self-employment tax deductions that I qualified for.

However, there were also a few restrictions and rules about Covid relief measures that you should also know if you are self-employed:

  1. Anyone who earns more than $400 in earnings from self-employment must pay the tax.
  2. For the Social Security tax, this rate only applies to the first $142,800 of your net income. However, there is no income limit for the Medicare tax.
  3. Half the self-employment tax is deductible. Although the full 15.3% is charged on the business’ profits, the “employee” portion qualifies as a deductible expense.
  4. If you deferred paying the “employer” portion under the CAREs Act, 50% of those taxes were due December 31, 2021. The additional 50% must be paid by December 31, 2022.
  5. Even though you don’t have a withholding tax, you must schedule quarterly estimated payments. Otherwise, you’ll be facing a hefty bill when you file your tax return.

Do I Qualify for Self-Employment Tax Deductions?

The short answer is yes. However, it was up to me to find out exactly which deductions I could claim. What’s included in the list of “business expenses” is wide open to interpretation. While some things are clear, other expenses fall into gray areas.  So, I took some time to review the most common deductions and speak with people I know who are also self-employed.

Based on all my usual sources, I came up with a lengthy list of the most common deductions. They included:

  • the self-employment tax deduction
  • home office
  • office supplies
  • utilities, internet, and phone bills
  • health  and business insurance premiums
  • travel
  • vehicle use
  • meals
  • interest from your loans
  • subscriptions and publications
  • education
  • rent
  • start-up costs
  • advertising
  • retirement contributions

As you can see, some of these categories can lead to more questions. Differentiating your personal and business expenses could become quite complicated. However, I usually revert to the KISS method and keep it simple. Based on my initial assessment, these are the self-employment tax deductions I will qualify for this year.

My Self-Employment Tax Deductions for 2021

Social Security and Medicare Tax

The most common deduction is the “employer” portion of the self-employment tax that you must pay. Although I paid the full 15.3% of the business’ profits, I can claim half of it as a business expense. So, even though you pay a higher percentage in taxes if you work for yourself, this deduction means it will cost less than I initially thought. And, I won’t have to itemize to claim it either.

Office Supplies/Equipment

The next largest deduction would qualify under offices supplies or equipment. My beloved laptop finally gave up the ghost this year. After taking it to a computer repair shop and paying for the diagnostic, I broke down and finally bought myself a new one.

Since my laptop is the lifeline of my business, I knew I couldn’t skimp on this business expense. Fortunately, it happened just before Black Friday. I found some great deals and saved about $250. However, it still set me back about $750 with all the programs and licenses I needed to purchase as well. But you can be certain I saved all my receipts!

Home Office

Although I never claimed this deduction in the past, my living situation has changed. Rather than working as a digital nomad, I now have a home office. Not only do I regularly use this space for business purposes, but it is also my primary workspace. Since it qualifies under the IRS definition, I plan to include it on this year’s return.

However, I have to calculate the percentage of our house’s total square footage to determine how much I can deduct. Since it accounts for approximately 5% of the home’s total square footage, we can deduct 5% of housing expenses for the year.

Phone and Internet Bills

In the same line of thought, if you use your cell phone or internet connection for business, you can also claim it as a self-employment tax deduction. If the line is dedicated for business only, you can claim the full amount. Otherwise, you would need to calculate the percentage of usage that you use for business. In my case, it is split between my personal use as well. Only about 25% of my bill will qualify for the deduction.

Qualified Business Income (QBI)

This last deduction is new to me. So, I still plan to discuss it with my CPA to determine if I can claim the qualified business income deduction. It’s relatively new and set to expire in 2025, so I’d like to take advantage while I can. Under this deduction, single filers with total taxable income less than $164,900 and joint filers under $329,800 qualify for a 20% deduction on your taxable business income. Since most of my earnings are “pass-through income,” I should be eligible for this huge deduction.

As a new business owner, I’ve realized why it’s important to review what qualifies for self-employment tax deductions to maximize your profits. You may find unexpected deductions that can help you keep more of your hard-earned money.

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Is Filling Helium Balloons Yourself Cheaper?

Is Filling Helium Balloons Yourself Cheaper?

Can you really call it a party without balloons? They are a staple decoration at all major celebrations. Helium balloons add a little something extra to any event. Birthdays, anniversaries, wedding receptions, graduations, and retirement parties are all a little more festive with displays and balloon arches. Even without helium, there are tons of ways to use balloons to brighten up any occasion. However, if you are planning a party on a budget, you may be wondering if filling helium balloons yourself would be cheaper. Here’s everything you need to know about saving money on helium balloons for your next major event.

Why Would You Be Filling Helium Balloons Yourself?

Planning a party requires a great deal of time and attention to detail, especially if you have limited funds. If you’re the one responsible for filling the balloon order, then you also understand how quickly the costs for decor can add up. Every additional fee and item can push you beyond your budget. Not to mention, it’s a huge hassle transporting filled balloons. If you have a smaller vehicle, it can become downright dangerous. So, if you have a ton of balloons to handle, it may be cheaper and more convenient filling the helium balloons yourself.

Price Comparison of the Store vs. Filling Helium Balloons Yourself

To see if it really saves you money, let’s look at the figures and see what the side-by-side cost comparisons look like.

For shoppers looking for the most economic option for helium balloons, you’ll need to do some research. First, start by figuring out how many balloons you’ll need so you can get more accurate pricing quotes. Then, call local party supply stores near you, or visit their websites for more information. Places like Party City, Dollar Tree, or Walmart will offer pricing on both rentals and rates to fill them for you.

Paying to Prefill Balloons

If you prefer to have the party supply store take care of it, you will likely need to purchase your balloons from them as well. Simple latex balloons usually cost between $0.07 and $0.30 each. No matter where you go, most party supply and dollar stores charge $1 to fill them. While latex balloons will be the cheapest, they will charge more for printed, personalized, or mylar balloons.

Renting a Helium Tank

Rental options will usually be listed as package deals. It will also include balloons in the rate. Although, you may need to purchase more depending on how many you need. Helium tanks from Walmart run for about $34 and can fill 50 nine-inch balloons. Therefore, it would be cheaper to rent your own tank to handle 50 balloons.

However, the price drastically increases if you have bigger balloons or need additional tanks. The Walmart tank can handle 50 nine-inch balloons, but only 26 twelve-inch balloons, doubling the rental fee. In this case, it would actually be cheaper to pay for the retailer to do it for you.

For larger quantities, you may need to rent a commercial-sized tank. The larger tanks can fill up to 400 balloons. But, they will cost you between $200-275. When you do the math though, you can see that even the high end of the price scale would cost an average of $0.68 per balloon. Therefore, the more balloons you have, the more money it would save you in the long run.

The Free (and Fun) Alternative for filling Helium Balloons Yourself

For those who are on a strict budget, there is a completely free alternative way for filling helium balloons yourself. You can use the old science experiment to turn it into a fun and educational family project that won’t require any rental fee. In fact, you probably have everything you’ll need in your cabinets

For detailed instructions, you can find the step-by-step experiment here. However, the concept is pretty simple. Instead of using helium to fill your balloons, the reaction between the vinegar and baking soda creates carbon dioxide which will fill and expand your balloons for free. However, just be aware that while the balloons will fill, they won’t float.

Is It a Matter of Time, Money, or Convenience?

When it comes to planning a party, you need to have your priorities set. This will make it easier and faster to make decisions as well. So, you have to ask yourself what is more important: time, money, or convenience?

Saving You Money

Unfortunately, many of us are limited with a tight budget. So, if money is your motivating factor, the cheapest way to fill your balloons is to do it yourself without helium. However, if you are committed to using helium, the numbers don’t lie. Renting an industrial-sized tank and doing it yourself could save you some money, especially if you have hundreds of balloons to fill.

Saving You Time

While saving money is nice, time is also valuable. And one thing price quotes don’t take into account is the amount of time you will spend filling helium balloons yourself. Furthermore, it also doesn’t include mistakes or broken balloons. Doing the grunt work can be both frustrating and time-consuming.

Sure, it may save you a few bucks to do the job yourself. Keep in mind though, the bigger the event, the longer you will spend filling the helium balloons yourself. If time is limited, your efforts could be better used on other things.

The Added Benefit of Convenience

Ultimately, you have to weigh the pros and cons, then determine which factors are most important to you. And truth be told, sometimes it’s worth paying for the convenience of having professionals take care of the time-consuming tasks. It’s one less thing to worry about and one less thing that could go wrong if you are coordinating a large event.

For others, it may be more convenient to rent a tank and fill the balloons on site. In addition to the financial savings, you also won’t have to deal with the hassle of transporting a large number of balloons from point A to point B. Having one less errand to run offers its own relief. Only you can decide which option benefits you most.

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5 Reasons Why Biden Opted for a Student Loan Freeze over Forgiveness

Why Biden Opted for a Student Loan Freeze over Forgiveness

During the 2020 election, student loan forgiveness was one of the key issues that President Biden built his campaign on. It’s also one of the promises many people burdened with student debt expected President Biden to push for after he won the election. However, a year later the Democratic party has made little progress towards this goal. Instead, they extended the moratorium on student loan repayment an additional 90 days. This is a far cry from what his supporters had hoped for. It’s merely a continuation of the relief measures initiated by the Trump administration when the pandemic began. Although it is disappointing to those drowning in debt, here are 5 reasons why Biden opted for a student loan freeze over forgiveness.

Biden’s Promise for Student Loan Forgiveness

Based on data collected over the last two years, Americans hold $1.57 trillion dollars in student loan debt. Meanwhile, the average person owes $38,792. As the economic pressures persisted, the federal government enacted the CARES Act. The objective was to offer financial relief by suspending payments, freezing interest, and stopping collection efforts on government-held student loans.

This extension affects nearly 41 million people, 27 million who have not been making monthly payments since the beginning of 2020. However, many Democratic leaders feel it isn’t enough. They are now pressuring him to deliver on his promise to seek $10,000 of debt forgiveness for those holding federal student loans. While his bill passed in the House, it still sits in the Republican-controlled Senate with little bipartisan support. But instead of pursuing this piece of legislation, Biden has once again approved the extension of the student loan freeze to prevent interest accrual.

When he approved the first extension under his administration back in August, he claimed it would only be delayed “one final time”. However, he has now extended the moratorium a second time, postponing the deadline until May 1. Furthermore, both President Biden and the Secretary of Education Miguel A. Cardona have told people to prepare to resume payments. This doesn’t bode well for those still holding on to the hope of student loan forgiveness.

5 Reasons Why Biden Opted for a Student Loan Freeze over Forgiveness

Although it doesn’t address his campaign promise, here are 5 reasons why President Biden opted for a student loan freeze over forgiveness.

1. It’s easier to extend the freeze than gain enough support to pass new legislation.

Student loan forgiveness is still a contentious issue. While everyone can agree the system is flawed, no one can agree on how to fix it. Some Democrats don’t think the bill for student loan forgiveness goes far enough. On the other hand, moderates and conservatives feel it is too expensive.

However, both sides of the aisle have already agreed to the moratorium for student loan repayment under the Trump administration. The truth is that it’s easier to get Congress to agree to another extension on something they’ve already passed rather than pursue the controversial bill.

2. It guarantees continued relief, even if it’s only temporary.

Another reason the Biden administration extended the student loan freeze over forgiveness is that it guarantees a temporary relief. Even if Biden is unable to fulfill his promise, it gives people a few months reprieve during economic uncertainty.

This action allows people to continue to keep their heads above water, even if the legislation is never brought to a vote in the Senate. Some may argue that a few more months won’t make much difference. Many more would disagree. It may allow people to gain a better financial footing. They can pay off other debts or focus on paying down the principal on their student loans before the moratorium expires.

3. His social spending plan is in danger.

In addition to the difficulties President Biden faces in passing the student loan forgiveness bill in the Senate, it also threatens support for his social spending plan. Some politicians who are willing to cross the aisle for other aspects of his proposed measures may withdraw their support if he pushes too hard for student loan forgiveness. So, an extension of the student loan freeze protects his plan. It’s an easy way to appease both parties without putting his other legislation in danger.

4. Biden is taking more targeted measures for student loan forgiveness.

Others believe that he opted for the student loan freeze over forgiveness since he plans to take a more targeted approach.  The theory is that Biden will enact debt relief through executive action since it wasn’t included in the initial stimulus plan. Furthermore, separate legislation would allow lawmakers to take broader actions towards student loan forgiveness.

Furthermore, there have already been a few reforms that wiped out $13 billion of student loan debt for more the 640,000 people. This includes legislation that has already forgiven $7 billion for those with “total and permanent disability” and relief to those defrauded by schools. However, many Americans are waiting for additional measures that are more inclusive.

5. He is afraid the relief will go to people at elite colleges.

Biden has evaded questions when pressed by the progressives in his party to enact sweeping student loan forgiveness. But when specifically asked why he opted to extend the moratorium again, he stated concern that relief would go to people attending elite universities and colleges. This seems like a weak response made up on the spot. Sadly, $10,000 of debt relief would hardly make a dent in the total tuition costs of ivy league institutions. It’s a flimsy excuse as he tries to buy more time and avoid criticism from both parties.

Will There Ever Be Student Loan Forgiveness?

No one has a crystal ball. It’s impossible to give a definitive answer if there will ever be complete forgiveness of student loans. While it would provide an economic stimulus, everything comes with a cost.

However, the Biden administration says it is conducting a legal review of the possibility of enacting student debt cancellation through executive action. The review is still underway. So, this extension could give Biden the time he needs to complete it. There may still be hope for those holding on to this campaign promise.

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How to Turn Trash Into Easy Cash

How to Turn Trash into Easy Cash

The holidays can take a heavy toll on your bank accounts and credit limits. Come January, many of us who splurged need to either tighten the purse strings or find a new source of income. So, if you are thinking of new ways to bring in some extra money after the holidays, here are a few ideas to turn your trash into easy cash.

Upcycling Your Trash into Cash

Upcycling has become a popular trend among those who can spot a diamond in the rough. Perhaps you have read new stories about professional dumpster divers who make a killing from what they find. Maybe you know someone who has built a business by upcycling other people’s trash by restoring it or repurposing it into something new. With a little creativity and a shrewd eye for a deal, you can easily turn someone else’s trash into a real treasure.

Recycling Trash into Easy Cash

If you don’t have the time or skill to get into upcycling, you can always find ways to make money by recycling various materials.

Scrap Metal

Right now, scrap metal prices are at an all-time high. You can get a fair price for metals when you sell your scrap for cash. However, copper, brass, and aluminum bring the best prices. When you take a load to the scrapyard, they will pay the current going rate. Although prices have remained fairly stable, they can fluctuate daily. If you prefer to have someone else do the heavy lifting, you can also find people online who will pay for your scrap and haul it away for you.

Aluminum Cans

At some point, every kid tries to make a fortune by collecting aluminum cans. Although you probably aren’t going to be able to retire on your earnings, recycling can earn your money while you help the environment. On average, most centers pay $0.50 per pound. And to give you an idea of the earning potential, there are about 34 cans in each pound. If you have a steady source, it could pay off some of your smaller bills.

Glass Bottles

People have been recycling glass bottles for cash since companies first introduced them. Today, only 10 states in the U.S. (California, Connecticut, Hawaii, Iowa, Massachusetts, Maine, Michigan, New York, Oregon, and Vermont) pay for glass bottles. However, prices range from $0.05 to $0.15 each. If you aren’t a resident of one of these states, there are other options. Do a local search to sell glass bottles in your area. Local recycling centers, breweries, vineyards, and homebrew supply stores may be willing to purchase them as well.

Cardboard Boxes

If you have a ton of cardboard boxes from your holiday purchases, you can turn your trash into easy cash. After you join the online marketplace, you can list them for free on Boxcycle. People who are looking for cardboard boxes can connect with you and arrange a time to pick up your boxes. Then, you will receive payment via PayPal. It’s simple, convenient, and an easy way to make money from stuff laying around the house.

Reclaimed Wood

Anyone who has done remodels or flipped a house knows that these projects can produce reusable lumber. And with wood in high demand, you can get a great price for reclaimed wood. For those in rural areas, old barns are also a great source of materials. Local dealers and sites like Antique Beams and Boards pay well for a high-quality wood. You can call companies in your area or go online to get a quote. But, be sure to include the length, size, type of wood, and photos for an accurate estimate.

Car Batteries

Most places will give you a discount on car batteries when you trade in your old car battery for a new one. But, if you have several batteries that are taking up space, you could try to sell them to junkyards, auto parts stores, or online marketplaces. While they aren’t the most valuable thing in your garage, they usually bring between $5 and $12 each. Selling them is a good way to squeeze a little more life out of your old batteries.

Ink Cartridges

Have you been holding onto your old ink cartridges? If so, you can turn your trash into easy cash. After you sign-up with the eCycle Group through their website, they will provide a prepaid envelope for your items. You can view the set price list so you know exactly how much money you will be receiving. One thing to note is that you must send a minimum of 20 at a time. If you don’t have that many, you can also turn your ink cartridges in at local retailers. Staples, Office Depot/Office Max, and Best Buy offer in-store rewards and discounts for each one you bring in.

Wine Corks

If you are an oenophile and enjoy fine wines, chances are you have plenty of corks leftover. Although you probably never had reason to save them, selling wine corks is another way to turn your trash into easy cash. Many people want them for art projects and various uses around the house. Currently, you can find them on eBay for about $0.10 a pop. But, keep in mind you’ll have to pay their seller and shipping fees if you use their site.

Selling after an Upgrade

Selling Old Appliances

When you are upgrading your large appliance, you can resell your old ones to recoup some of the cost. Try to list them in local marketplaces to connect with potential buyers. Although, if they are out-of-service, you can contact local repair shops to see if they will buy them for spare parts. Otherwise, you can always sell them to the local scrap yard as well.

Selling Used Electronics

If you just got a new device for the holidays, you can sell your old smartphones, laptops, and tablets for cash. Gazelle lists its prices online. So, once you find your specific make and model and answer a few questions, you can send it off in one of their prepaid envelopes. Plus, you can choose payment by check, PayPal, or Amazon gift cards, giving you even more options.

With limited supply chains and delayed deliveries, people are hunting for cheap materials and good deals. These ideas are only the tip of the iceberg when it comes to ways to turn your trash into cash.

Have you found an innovative way to turn your junk into a paycheck? Tell us how in the comments below!

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Why You Should Wait to Buy a Car

Why You Should Wait to Buy a Car

Last year I moved back to the U.S. after living overseas for nearly a decade. I lived very modestly and didn’t need a car as I worked and traveled through Southeast Asia. However, living in the U.S. is an entirely different story. Since I was working from home, I thought I could get by without having to commute daily. Unfortunately, getting around in the U.S. with only public transportation was much more difficult than I expected. Needing convenience and independence, I began shopping for a used car. Imagine my shock when I discovered the market had completely transformed since my last purchase. It was one of the most stressful and difficult shopping experiences I have ever had. Unless you have an urgent transportation need, here’s why you should wait to buy a car.

Looking to Buy a Car in 2021

I spent months researching different vehicles. Although I wasn’t driving every day, I was often going long distances and using back roads. Ultimately, I settled on the Toyota RAV4 since it met all of my minimum requirements of reliability and safety. With the decision made, I focused on the search. I started with models that were about 10 years old since that’s what I expected was within my budget.

However, even these older models were extremely overpriced. Furthermore, none of them had all the features I needed. I adjusted my search once again since newer models had better fuel efficiency with only a slightly higher price by comparison.

Once I narrowed my scope to 2017-2019, I spent hours calling dealerships and arranging test drives in the area. At the same time, I was also scouring national websites looking to see if I could find what I wanted at a better price. After a few failed negotiations and missed deals, I finally found a car. The catch was that it was in another city. So, my husband and I picked it up in Chicago and drove it home.

3 Reasons Why You Should Wait to Buy a Car

What I learned from this experience was that had I been able to, I should have waited to buy a car. Here’s why.

1. There is a global microchip shortage.

There is an ongoing global shortage of semiconductor chips. And, no one can be sure how long it’s going to last. Some industry experts say it could extend well into 2023. Not only does it mean that there are fewer new cars available, but it has also supercharged the demand for used vehicles.

These microchips are required for many systems, so manufacturers had to cut production due to the shortage. Dealerships are receiving fewer vehicles and new car inventories are only a third of what they usually have. Many lots sit empty as they wait for more vehicles to arrive.

In an attempt to meet consumer demands, manufacturers are eliminating things that rely on the semiconductor chip to function. So, even if dealerships are getting new cars, they may not have all the features you would expect.

2. Less inventory equates to higher prices.

Right now, the car industry is a textbook case study of how supply and demand work against the consumer. Limited inventories and increasing demands for new and used vehicles have caused prices to skyrocket. Many dealers are charging more than the MSRP because people are willing to pay it.

According to Edmunds.com, 50% of people are paying more than the sticker price. In June, the average price for a new vehicle was $42,331 which is 8.6% than last year. For a used car, the average price shot up to $26,457, a 27% increase from the previous year.

Unfortunately, this also means dealerships are less likely to offer discounts or negotiate on price. If you aren’t willing to pay the asking price, you can be certain someone else is.

3. It’s harder to find what you want.

There is no doubt that it is currently a seller’s market. What makes it even harder is that many vehicles never even hit the lot. It is becoming more common for buyers to make deposits even before the new cars arrive, sight unseen.

Some analysts suggest that the car market may never return to normal since manufacturers are rethinking production and sales strategies. So, if the car you want isn’t in your budget, you may have to compromise. Many consumers have to settle for cheaper options. This could mean choosing older models with higher mileage, different colors, fewer features, or a different make and model altogether.

If You Can’t Wait to Buy a Car…

The simple solution is to ride out the price increases and wait to buy a car. Unfortunately, not everyone has the luxury of waiting for the market to improve. Even though it is a tough climate, you can find good deals. But, timing your purchase is important. Many customers shop during sales promotions and other events to get better prices. However, there are also a few other factors to consider.

Sales Quotas

Any used car salesman will tell you about the quotas they must meet each month or quarter. So, if you shop around the end of these cycles, you are likely to have more room for negotiation.

Choosing the Best Time

You should also avoid going to a dealership on the weekends since many other people are likely to be shopping at the same time. Instead, try to go during a weekday when you will have the salesperson’s undivided attention.

Psychologically speaking, it’s also a good idea to go earlier in the day. People tend to be more flexible when they are in a better mood. So, if you can make a deal before the stress of the day sets in, the sales reps will probably be more open to negotiating.

Know Your Bargaining Position

If you don’t know where to start, read the latest consumer reports to help you choose the best vehicle to suit your needs. And, if you have a vehicle to trade, the market will work in your favor. Elevated prices guarantee that dealers will give you the best trade-in value possible.

Although these tips might save you a few bucks, you can be sure you are going to pay more for a vehicle if you buy today. And until microchip production returns to current levels, you can expect it to be that way for a while to come.

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How to Earn Money from Competitive Eating

How to Earn Money from Competitive Eating

You have probably heard of food challenges at local restaurants and eating contests at the county fair. Perhaps you have even taken one on for a free meal or your picture on the wall. But, did you know people earn money from competitive eating? Although it’s not the most conventional sport, some contests attract the most serious competitors from every corner of the globe. When you see the grand prizes and cash rewards, it’s no wonder why some people become professional eaters. However, there is much more to the sport than simply having a big appetite.

The Sport of Competitive Eating

It may seem like an obvious question, but what exactly is competitive eating? The sport, also called speed eating, requires contestants to compete against one another, eating massive amounts of food in a very short time. Most competitions only last 8-10 minutes, although some of the longer ones may give people up to 30 minutes to finish the food. When the time is up, they count their tallies and declare a winner. Judges count them down, manage the time, and watch the competitors for anything that could get them disqualified.

Although many smaller competitions only offer free swag or comp your meal, the larger contests often have huge cash prizes. And, the food used in the contest can vary greatly. So, if you are thinking about trying to earn money from competitive eating, you should consider your food choice carefully. Soon enough, you are sure to have a belly full of it!

Training for Competitions

Competitive eating isn’t something you can just walk off the street and win. It requires months of preparation and physical training.

Physical Preparation

Competitors train for months prior to the event, stretching their stomach capacity to its limits. The top eaters know that stomach elasticity could be the difference between a huge payday and a defeat.

Most usually begin with drinking huge amounts of fluids to stretch the stomach and throat, which will allow them to consume more food in a shorter amount of time. Others focus on building jaw strength. Chewing gum builds these muscles to help them devour their food faster.

Choose Your Strategy

No matter what kind of food challenge you undertake, you need a strategy going into it. The professionals first look at the meal they are about to eat and break down the components. Based on the types of food, you must decide the best approach for you.

Ordering your food correctly helps to ensure you have enough room for it all. You may choose to start with the things you like least to get them out of the way. However, every competitive eater tells you to start with the required liquids. Then, you move onto the proteins and cheeses which become harder to eat as they cool. Generally, professional eaters agree that you should save bread, starches, and other carbohydrates until the end. Keep in mind there is no single best strategy. Each person has their own rituals and routines to maximize how much they can consume.

Do Practice Runs

Just like any sport, you need to practice before the main event. You can look for local challenges to build your confidence and get some wins under your belt. Another option is to time yourself at home and analyze your performance.

You don’t want to do a trial run immediately before an eating competition. But, you should attempt it at least once before the event, especially if it’s your first time. This gives you a chance to adapt and change your strategy as well.

Earn Money from Competitive Eating

There are over 3,500 competitions across the U.S. every year with an estimated $400k – $500k in prize money for the taking. However, purses are usually between $1,000 and $8,500. The smaller competitions won’t provide a salary that you can live on. But, the largest contests have given away cars, motorcycles, and thousands of dollars in cash prizes.

Arguably the most famous competitive eating contest, Nathan’s Hot Dog Eating Contest gives out $10,000 for first place every year. Second place takes home $5,000 and third $2,500. Other events like the Wing Bowl have awarded winners up to $20,000.

Champions like Joey Chestnut have netted enough wins to build impressive net worth. After his 14th win in 15 years, he is now worth around $2 million. Tekeru Kobayashi ate his way to fame and a fortune of $3 million. Matt Stonie also earns a comfortable salary from his YouTube Channel which has 14.9 million subscribers.

While the elite eaters earn plenty of money from competitive eating, they also receive sponsorships which generate even more income. Chestnut does endorsements for Hostess, Hooters, Coney Island IPA, and Pepto Bismal. And, he also created his own brand of condiments. Some professional eaters are hired by local restaurants to participate in their competitive eating contests as well. So, they get paid win or lose.

Finding Competitive Eating Competitions

But, if you want to earn some real money from competitive eating, you will need to compete year-round. Start by familiarizing yourself with the Major League Eating events sponsored by major organizations like the International Federation of Competitive Eating. Not only can you keep up-to-date with the latest events, but also check the current rankings of all the competitive eaters.

However, if you have your eyes on a bigger prize, you can also follow EatFeats for challenges worldwide. This site is a virtual encyclopedia of all competitive eating contests. It breaks events down by types of food, dates, and locations.

Most of the champions give the same advice though to those just starting their career. They suggest beginning with some of the smaller, local competitions to earn your eating credits. It’s a good way to prepare for competitive eating contests with larger purses.

Competitive Eating Records to Beat

So, for all those looking to break into competitive eating, here are some of the current records to beat.

  • Nathan’s Hot Dog Eating Contest – Joey Chestnut (76 hot dogs in 10 minutes)
  • Chicken Wings – Joey Chestnut (7.61 lbs of buffalo chicken wings in 12 minutes)
  • Hamburgers – Sonya Thomas (7 3/4 lb. “thick burgers” in 10 minutes)
  • 24″ Pizza – Richard “the Locust” LeFevre (7.5 Bacci Pizza slices in 15 minutes)
  • Ice Cream – Cookie Jarvis (1 gallon 9oz of vanilla ice cream in 10 minutes)
  • Burritos – Eric “Badlands” Booker (15 BurritoVille burritos in 8 minutes)
  • Glazed Donuts – Joey Chestnut (55 donuts in 8 minutes)
  • Watermelon – “Buffalo” Jim Reeves (13.22 lbs in 15 minutes)
  • Pancakes – Patrick Bertoletti (50 3.5oz Wild Eggs pancakes in 10 minutes)
  • Peeps – Matt Stonie (255 in 5 minutes)
  • Ramen Noodles – Tim “Eater X” Janus (10.5 lbs in 8 minutes)
  • French Fries – Cookie Jarvis (4.46 lbs of Nathan’s Famous Crinkle Cut Fries in 6 minutes)

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7 Smart Reasons Why You Should Have 4 Bank Accounts

Smart Reasons Why You Should Have 4 Bank Accounts

This is a simple method designed to help people build their savings. Not only is it easy to follow, but it is also adaptable and applicable to all income levels. There are many reasons why you should have 4 bank accounts. However, the most obvious is that it is an easy way to help you gain control of your finances and your future.

What Is the 4 Bank Accounts System?

1. A Checking Account to Pay the Bills

Your first account should be a checking account to cover your basic living necessities. It is also the one that you should deposit your paycheck into if your employer cannot split it between multiple accounts.

The money that you put into this account should only be used to pay your recurring monthly bills. This includes housing fees (mortgage or rent), utilities, transportation, insurance, cell phone, groceries, etc. You should figure out the exact figure by tallying up your bills and ensuring you leave enough in the account to cover all your living expenses. Don’t forget to include payments that happen at less frequent intervals as well, such as property taxes.

Depositing your money in this account first guarantees that the money will be there, ready to use when bills come due. You can also automate payments to avoid late penalties as well. Since this checking account should only be used for bills, you won’t need a debit card for it. Not having one will help you avoid the temptation to use the funds for other things.

2. A Checking Account for All Your Other Expenses

Your second checking account will pay for everything else, like entertainment costs, shopping trips, gifts, and small splurges. Look at this account as spending for things you want, but don’t need. You’ll want a debit card for this account since this will be your primary expense account.

3. A Savings Account for Emergencies

Everyone needs a rainy day fund for life’s expenses that you can’t plan for such as car repairs, medical bills, or unemployment. Therefore, you should set aside money every month to create a safety net. This will help reduce the financial impact of large, unexpected expenses down the line. Experts suggest keeping a fund that could cover three to six months’ worth of expenses. However, this money is only intended for emergencies. So, you shouldn’t touch the account until you need it.

4. A Savings Account for Financial Goals

Your last bank account should be a savings account that is specifically dedicated for larger purchases like a car, a down payment on a house, or a vacation. You may view this as a savings account for your long-term desires. Or, you could use it as a retirement account. Either way, it helps you build savings for the future. Depending on how ambitious your savings goals are, you may want to create separate accounts for each one.

7 Reasons Why You Should Have 4 Bank Accounts

1. It forces you to look at your monthly expenses and create a budget.

Shockingly, many people have never learned how to create and live on a budget. However, setting up these different accounts forces you to categorize your expenses and calculate a figure of how much you spend each month. The 4 Bank Accounts System is an easy way to correct any imbalances and establish your financial goals.

2. The 4 Bank Accounts System prioritizes your expenses.

As you calculate your expenses, you must look at each one and decide which account it goes into. While you go through this process, you also qualify each item as a necessary or non-essential living expense. If you aren’t reaching your savings goals fast enough, it will also help you decide which ones you can do without to get there quicker.

3. Having a dedicated account ensures that your bills get paid first.

Since your account for living expenses is the first one to get funded, you never have to worry about running out of money at the end of the month. And, there is no risk of having your utilities turned off or not being able to afford groceries. If you set up automated payments, it helps you avoid late fees as well.

4. It will give you a clear picture of your spending habits.

One of the top reasons why you should have 4 bank accounts is because it highlights your spending habits. It neatly divides your finances into categories and allows you to see how much you spend each month on non-essential things. The process can also show you areas where you can reduce spending and help you live below your means.

5. Multiple bank accounts make it harder to spend money set aside for other goals.

You are less likely to make withdrawals or use an account that you don’t have a debit card for. So, it’s easier to resist temptation since the money is out of reach. Additionally, it makes you think about what you are spending your money on. The truth is that most people are unlikely to go to the trouble of transferring money for impulse buys. Therefore, it helps you spend money on things you don’t need.

6. You consistently work towards your financial goals without even thinking about it.

When you deposit the money directly into your accounts, you create the habit of putting your financial goals first. And, you don’t have the chance to spend it. Furthermore, compounding interest accelerates your savings goals even more.

You can simplify it even more if your employer can deposit your paycheck into multiple accounts. Then, your savings plan can become completely automated.

7. It teaches you how to manage your money.

The sad truth is that many of us never received a proper financial education. This is a contributing factor for why so many people struggle to save and get out of debt. One of the best reasons you should have 4 bank accounts is that it teaches you the fundamentals of saving money. Not only is the system is easy to understand, but it will also quickly establish good savings habits.

The Bottom Line

People have thought up tons of challenges and systems to help people save money. However, the 4 Bank Accounts System is one of the simplest and most straightforward that I have encountered. But, the system only works if you remain consistent. Whichever method you will stick with is the best one for you.

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15 People Who Made Their Wealth Later in Life

People Who Made Their Wealth Later in Life

When Do People Make Their Wealth?

We all know the success stories of prodigies and young billionaires who made their wealth at an early age. However, the compiled research shows that it takes approximately 32 years to become a billionaire. This means most billionaires did not find immediate success. In fact, the average age of business founders is about 40. So, if you are still hoping to join Forbes’ list of billionaires, there is still time. Here are 10 people who made their wealth later in life.

15 People Who Made Their Wealth Later in Life

1. Donald Fisher (37) – $3.3 billion

Donald Fisher claimed his success as the founder of Gap Inc. after a career as a real estate developer. At 37, he launched the company in San Francisco by selling music and clothing. Eventually, he branched out across the United States and introduced affiliated stores Old Navy and the Banana Republic. At the time of his death in 2009, his net worth was $3.3 billion.

People Who Made Their Wealth Later in Life

2. Martin Lorentzon (37) – $5.5 billion

After university and time in Silicon valley, Swedish billionaire Martin Lorentzon went on to make several important connections and form multiple companies. However, it was his partnership with Daniel Ek that led to his billion-dollar idea: Spotify. Today, this music streaming service has over 365 active monthly users, with 165 million paying subscribers. He is presently worth an impressive $5.5 billion, but this is likely to increase as Spotify continues to grow.

People Who Made Their Wealth Later in Life

3. Amancio Ortega (39) – $80 billion

Due to his founding role with the Inditex group, the parent company of the famous fashion retailer Zara, Amancio Ortega is one of the wealthiest people in Europe, but also the entire world. Although his clothing lines have amassed this Spanish billionaire quite a fortune, he made his wealth later in life at the age of 39. While he is not currently listed as the richest man in the world, his investments earn him more than $400 million per year in dividends alone. Including all his business assets and real estate holdings, Ortega has a net worth of $80 billion.

People Who Made Their Wealth Later in Life

4. Dietrich Mateschitz (40) – $24.1 billion

As a former marketing executive, Austrian billionaire Dietrich Matechitz stumbled across his cash cow during his international travels. In 1984, he discovered an unusual energy drink called Krating Daeng and soon after went into business with Thai entrepreneur Chaleo Yoovidhya. With the introduction of Red Bull, they exploded into the market with extreme stunts and aggressive advertising campaigns.

It gained popularity across Europe and reached the United States, grabbing 75% of the market share in 1997. Their promotional cars and aircraft, sports sponsorships, and music label have expanded the brand even further. Today its products are sold in 171 countries. While the company is currently valued at just under  16 billion, or  $17.9 million. However, Mateschitz’s personal net worth is $24.1 billion.

5. Vera Wang (40) – $270 million

Vera Wang

This former figure skater turned fashion icon made her wealth later in life as well. After Vera Wang failed to qualify for the Olympics, she started at Vogue after college. She eventually became editor-in-chief of the magazine. Not only did she maneuver her way to the top of the corporate world, but also became a highly influential voice in directing fashion trends.

However, she made her fortune after she started designing her own gowns at age 40. Today, Vera Wang couture and clothing are highly sought after by the Hollywood elite. Moreover, they regularly appear on runways around the world. According to the Forbes list, Wang is currently worth $270 million.

6. Martha Stewart (40) – $400 million

Martha Stewart

In her early years, Martha Stewart was a stockbroker on Wall Street. After she discovered her true talents, she began building her brand. First, she owned a catering business, then published cookbooks, and founded her own magazine. Martha Stewart became a billionaire when her company went public in 1999.

However, things quickly went south for her. She served 5 months in prison for obstruction of justice and making false statements. Since then the company has been sold twice. However, she has rebuilt her reputation and her brand since then. According to Celebrity Net Worth, she is estimated to be worth about $400 million today. Martha Stewart is an unusual example of someone who made their wealth later in life, lost it, and managed to reclaim success.

 People Who Made Their Wealth Later in Life

7. Wolgang Marguerre (42) – $9.5 billion

You may be surprised to learn that the founder and CEO of Octapharma, one of the world’s leading manufacturers of blood plasma, did not strike it rich until he was well into middle age. At 42, he founded his company in Switzerland which has grown into a multi-billion dollar operation. It now operates production plants in six countries and earns annual revenue of $2.6 billion.

Although controversy threatened his company when journalists claimed Octapharma was exploiting and endangering peoples’ lives, it continues to thrive. There are more than 70 donation centers in the U.S. alone, the company nets billions in profit selling its products. And, Wolgang Marguerre maintains a personal net worth of $9.5 billion.

8. Sam Walton (44) – $15 billion

Sam Walton

Everyone knows the Walmart name, but not many know that Sam Walton didn’t strike it rich until well after 40. He claimed his spot on this list for founding the retail giant in 1962. After a successful career at JC Penney, he left to manage his own store at 44. One thing that set him apart from his competition was his emphasis on logistics. He took a single sporting goods store and created a global empire. Today his family is among the wealthiest people in the world. Their net worth far surpasses Sam Walton’s $15 billion when he died in 1992.

9. David Duffield (47) – $13 billion

David Duffield is the creator of several software companies including PeopleSoft, Integral Systems, and Information Associates. He made his fortune when his company grew to one of the largest software application companies worldwide. Eventually, Oracle bought out the company in 2005. Duffield is currently estimated to have a net worth of about $13 billion.

10. Henry Ford (49) – $200 billion

Henry Ford

Henry Ford founded Ford Motors and became one of the richest men in history. He began as an engineer for Edison Illuminating Company where he met Thomas Edison. When he discussed his idea, other engineers encouraged him to build the automobile. He eventually started his own business in 1899 introducing the Model T car. Since then, the Ford empire has expanded exponentially. At the time of his death in 1947, he had accumulated a fortune equivalent to about $200 billion today.

11. Charles Darwin (50) – $400 million

Charles Darwin

Charles Darwin is one of the most revered names among the scientific community. As a famous biologist and geologist, he had several significant contributions to academia. Although, the moment he set sail on the HMS Beagle his life changed forever. His findings during his voyage led to the theories of evolution and natural selection.

However, he didn’t make his fortune until he published the “Origin of Species” at the age of 50. Charles Darwin is also among the people who made their wealth later in life. He was worth approximately $16 million when he died in 1882, which is valued at slightly more than $400 million today.

12. Betty White (51) – $85 million

People Who Made Their Wealth Later in Life

Although many people know and admire Betty White as a comedic actress, they don’t know that she is another celebrity who made their wealth later in life. She has been a pioneer for both her work in front of and behind the camera. However, it was her role on the Mary Tyler Moore Show which launched her career at the age of 51.

White went on to star in many other famous sitcoms and movies, and continues to be among Hollywood’s most beloved actresses. Her current net worth is $85 million.

13.Taikichiro Mori (51) – $13 billion

Before Taikichiro Mori became a real estate mogul, he served as Dean of Commerce at Yokohama City University. Once he retired from the university, he used his knowledge to become a real estate investor. He went on to found the Mori Building Company which became wildly successful. Between 1991-1992, Taikichiro Mori was the richest man in the world. When he died, Mori’s net worth was estimated to be about $13 billion.

14. Ray Kroc (52) – $600 million

Ray Kroc

When Ray Kroc saw his golden opportunity, he was selling milkshake machines. After he met the McDonald’s brothers, he joined their company in 1954. There is much controversy surrounding his rise to success. However, no one can deny Ray Kroc’s influence in making McDonald’s a household name.

When he gained the company, he took it to heights that had never been imagined. McDonald’s is now worth more than $33 billion today and has locations in nearly every country. Ray Kroc was pivotal in launching the brand and was amply rewarded for his efforts. At the time of his death in 1984, Kroc was worth approximately $600 million.

15. Arianna Huffington (55) – $100 million

Arianna Huffington

Our last person on the list of people who made their wealth later in life continues on an upward slope. Arianna Huffington began her career as a successful author, columnist, and political commentator. Some have even called her one of the most influential and powerful women in the world because of her media platform and global reach. She founded the news publication Huffington Post which later sold to AOL for $315 million. Since then, she has been heavily involved in other successful companies such as Thrive and Uber. Today, her personal worth is about $100 million. However, her new endeavors could launch her to even greater heights.

 

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The Ugly Side of Amazon Subscribe and Save

 Amazon Subscribe and Save is a great way to save money on items you buy regularly Not only does it help your budget, but you can cancel at any time However, there are drawbacks to consider While it may seem like a good budgeting tool, there is also an ugly side of Amazon Subscribe and Save What Is Amazon Subscribe and Save? Thousands of items are eligible for this discount, and you can view them in the Subscribe and Save Store Browse a range of categories from groceries and household items to personal care products Choose which items you need, add them to your cart, select how often you need them delivered, and see how much you can save Your items will automatically ship based on the schedule you set What Are the Benefits? The discount varies between 5% and 15% They have several delivery schedule options from monthly to every six months You can postpone, reschedule, or cancel deliveries if you don’t need the item Free shipping on these items so you can bypass one of the largest fees of shopping online What Is the Ugly Side of Amazon Subscribe and Save? You are unable to lock in the price, so they may change between shipments Prices fluctuate and you may not realize it if you have automated payments and shipments Price spikes are a budgeter’s nightmare and can sneakily eat away at your monthly budget If you don’t realize there has been a price increase, you could be paying more than you need to or want to for a particular item Check you Amazon notifications, they will send a confirmation with the details of your order, including any price changes When you stay with a single seller, you could miss out on other deals by comparison shopping Although it was the best price when you joined Amazon Subscribe and Save, it might not be the best deal out there, could save more money if you shop in person as well If you cancel or postpone an item and your package has fewer than five items, you won’t receive the full discount How to Make the Most of Amazon Subscribe and Save Figure out which items you order most frequently, how much you currently spend, and decide if it is worth the savings Although it may not be worth it for cheaper items, applying it to more expensive household and personal products could save you a significant amount of money Compare prices with local stores and other sellers The convenience of having the items delivered may be worth paying a little more each month Edit your list and remove items that you skip again and again Best for non-perishable items that you can store if you don’t use them right away Paper products, cleaning supplies, pet food, diapers, toiletries, health and beauty products If you have at least five items delivered, you will receive a maximum discount of 15% Don’t just add items to fill the quota If you don’t use the products, then you are just wasting your money Make sure to read your emails and review the prices Check if prices have changed since the last shipment so there won’t be any surprises Apply Amazon coupons to save even more when you check out Clip virtual coupons, several lists around the web that lists eligible items for more discounts Read More 10 Things You Shouldn’t Pay For Record Setting Black Friday and Cyber Monday Sales 4 Qualities of a Good Online Store

People use Amazon to help them find the best deals and save money. Not only can you comparison shop between sellers, but you can also join Amazon Subscribe and Save. This is a great option for budgeters looking to save money on items they buy regularly. In addition to reducing your monthly expenses, you also have the flexibility to opt-out at any time. However, there are always drawbacks to any savings program. While it may seem like a good budgeting tool, there is also an ugly side of Amazon Subscribe and Save.

What Is Amazon Subscribe and Save?

Amazon Subscribe and Save is a service that offers bigger discounts when you agree to automatic deliveries from the same seller on a routine basis. Thousands of items are eligible for this discount through their marketplace. You can view them in the Subscribe and Save Store.

There are no fees to join. So, you can browse through offers in a range of categories from groceries and household items to personal care products. If you find a good deal, simply choose which items you need, add them to your cart, select how often you need them delivered, and see how much you can save. Then, your items will automatically ship based on the schedule you set.

What Are the Benefits?

The program has several benefits for frequent online shoppers. Depending on the size of your shipment, the discount varies between 5% and 15%. If you are ordering most of your groceries and health supplies online, this can save you a ton of money each month.

The Amazon Subscribe and Save program also has flexible delivery options. You can customize your schedule from monthly deliveries to every six months. If you don’t need the items, you can also postpone, reschedule, or cancel deliveries before shipment.

And, they offer free shipping on all eligible items. This allows you to bypass one of the largest fees and objections to shopping online.

What Is the Ugly Side of Amazon Subscribe and Save?

But, as with all things in life, there are two sides to every story. For every benefit, there are also drawbacks to consider.

You can’t lock in prices.

Even though you may agree to the price at the time you join, there is no way to guarantee you will get the same rate in the future. Prices fluctuate, and they may change between your deliveries. When prices decline, this is to your benefit. However, when they increase, you will be paying more for the same products. If you don’t realize there has been a price increase, you could be paying more than you think.

Although Amazon sends a confirmation email before shipment, you may miss price changes if you don’t read them. Most people would prefer to buy the same product from another seller who has a better price. But your delivery is on an automated shipping schedule, so Amazon will only cancel or edit orders when you intervene.

It doesn’t guarantee the lowest price.

Even though it may have been the best price available when you made the initial purchase, that doesn’t guarantee the lowest price on future shipments. Prices constantly fluctuate and new sellers are always looking for new customers. When you stay with a single seller, you could miss out on other deals by comparison shopping. Your regular order may not be the best deal out there.

Changing your order can affect your discount.

Although you may have received the largest possible discount on previous orders, canceling or postponing items could affect your savings. In order to receive the full 15% discount, you must have at least five items in the shipment. If you reduce your shipper and have less than five things in your cart, you will get a smaller discount.

How to Make the Most of Amazon Subscribe and Save

While you can’t deny the ugly side of Amazon Subscribe and Save, the trick is learning how to maximize its benefits to your advantage.

1. Review your budget to see if the savings make sense.

If you want to find out if the program is worth the time and trouble, you need to evaluate your expenses. Once you know which items you order most frequently, how much you currently spend for them, and compare prices, then you can decide if it is worth the savings.

Although it may not be worth it for cheaper items, applying it to more expensive household and personal products could save you a significant amount of money. However, you don’t want to pay more or receive items you don’t need. Therefore, you should review and edit your list before each shipment. Compare current prices and remove any items you don’t need.

2. It’s better for items that can be stored long-term.

The truth is that you will probably receive products more frequently than needed. Although this isn’t a huge deal for most items, it can equate to a lot of wasted money if you are ordering fresh produce.

So, Amazon Subscribe and Save is probably best used for non-perishable items such as paper products, cleaning supplies, pet food, diapers, toiletries, health and beauty products, and other things that will eventually be used.

3. Make sure you always have at least five items.

Another way to ensure you get the most out of the program is to ensure you meet the minimum standards. You need to have at least five items delivered to receive a maximum discount of 15%. But, you don’t want to simply add items to reach the quota. If you aren’t using the products, then you are just throwing your money away.

4. Review your shipment details.

Next time you get a shipment notification, don’t delete the email without reading it. Make sure you look at the details and review the prices. This is the time to make changes and ensure there won’t be any surprises.

5. Look for digital coupons.

If you love clipping coupons, then there is more good news for you. There are tons of sites and forums that share virtual coupons. You can apply Amazon coupons to save even more when you check out.

Although Amazon Subscribe and Save can help your budget, you need to know how to navigate the fine print to maximize your savings.

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