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An affordable investment – 6

No Tax bill!

This is not a sales pitch for Harmoney or P2P lending and I’m no investment adviser nor registered finance consultant. I will not receive any rewards from anyone for writing and publishing this information. I just found something that’s working well for me, that could do likewise for you too and unlike investment advisers, who charge a fat fee and get commissions, I personally have invested my money in Harmoney – you could say, I have put my money where my mouth is. There will be an equivalent organization like Harmoney in your country.

Most other ways of creating wealth from home, on line over the Internet look good until you deduct taxes. They focus on gross returns, not net.
One of the biggest killers of any investment is tax. Many investments can get you into trouble because you receive your returns with interest and spend it. Then comes tax time and there’s a nasty surprise when you do your tax return – a large debt to the tax man.

Something I forgot to mention, Harmoney withhold an amount you choose, for tax. Depending on your other earnings you might have some extra tax at the end of the year but whatever it is, it is usually less than you would have from franked shares. Compared to other investments you’ll get to keep more of the rewards. Just to be safe plan on losing a bit extra in tax at the end of the year.

Screenshot of Harmoney Lender's dashboard showing withheld tax
Harmoney withhold tax so you won’t get any nasty surprises at tax time.

Some P2P lenders do not withhold investor funds for tax. If this applies to your lender, you will need to deduct tax from your investment earnings. I’d look at what your usual tax rate and deduct tax from your investment at the next rate up. For example, if my top tax rate is 30% (30c in the dollar) then I should withhold tax at the nest level up (in NZ that’s 33%). By doing this, you won’t get any nasty shocks at tax time. Remember that’s tax only on earnings.

Making money on line – the truth – Part 1

The Internet is awash with tales of amazing wealth, created overnight with simple work from home systems. The advertisers seem to favour one of two methods – a picture of a billion dollar yacht or some car that looks like it should have come from a Batnman movie, with the tag, “Watch this video before it’s banned”. The other favourite is a picture of a young woman or man with a pile of notes or fast car and the tag, “Melbourne Mum earns $653 a day”. Of course the district the Mum lives in will change to a town near you and the income amount will vary.

The truth is, there are no free lunches and that applies to the Internet too. While there are those who made their millions on the Internet, they did so by creating something unique that most people wanted. Simply creating a website and expecting it to sell something and make you an income, is fanciful. It’s not that simple.

The fact is, even a top performing website will net you around $15 to $20 a month. To make an income, you’ll need to run 20 websites. They don’ t tell you that.

The websites themselves have to be specially designed to appeal to search engines, more than your simple WordPress site. They have to be specifically designed for SEO (or Search Engine Optimisation). The site has to be rich in popular search words that relate to the site’s topic. Then there has to be a lot of other sites linking to it, to convince the search engines it is an authority on that subject.

It doesn’t stop there; you will need to pay for Adwords as well. These are words that people use to search with when they are looking fpor something on the Internet. They are auctioned off and the successful bidder will get traffic (searchers) directed to their site when their word is used in a search.

Then you can pay outright to have your website display on the top of a search engine page. These are “Sponsorsed pages”.

If you are thinking of deriving an income from a website on the Internet, you can but be prepared to work at it. It’s a job, just like everything else.

Over the next few instalments, we’ll look at some of the ways to make an on-line income.