When Ethics and Integrity Get in the Way of Making Money

My Daddy once said to me, the only thing you have, that no one can ever take away from you, is your integrity. You can only give it away.  Everything else you have, even your life, can be taken away.   So never, ever, give away your integrity. It can be hard to get back.

I have been seeing a new “make money on the internet” widget popping up on blogs everywhere.  It is a simple concept.  You buy a widget.  You put it on your blog.  When other people buy the widget, you make money. How much money you make depends on how much you paid for your widget.  It sounds simple. It will work, at least in the beginning, and the company that came up with the idea is probably making a killing.

So what’s the problem?

It is just another  pyramid scheme, or ponzi scheme, with a Web 2.0 flair.

There is no real product being sold, no value being given.  Not even a poorly written e-book.  Just the promise of getting money without doing any real work.

The following is a quote from Wikipedia on pyramid schemes.

The essential idea behind each scam is that the individual makes only one payment, but is promised to somehow receive exponential benefits from other people as a reward. A common example might be an offer that, for a fee, allows the victim to sell the same offer to other people, or receive bonuses through other people they refer. Each sale includes a fee to the original seller.

Clearly, the flaw is that there is no end benefit; the money simply travels up the chain, and only the originator (or at best a very few) wins in swindling his followers. Of course, the people in the worst situation are the ones at the bottom of the pyramid: those who subscribed to the plan, but were not able to recruit any followers themselves.

The internet is huge, and it may very well be awhile before this particular scam hits the bottom and people are no longer able to make money. And that is where the ethics and integrity part comes in.

People who get into this right now will probably make a good deal of money. Many people don’t care that it is a scam, and that eventually, some people will get burned.  I have to admit that I had a little bit of temptation to go for this myself.  After all, it is the people who get in early that make the big bucks.  And with the vast market of the internet, it could be a long time before the market saturates and people start losing money.

BUT SOMEBODY WILL LOSE MONEY,BECAUSE THERE IS NO REAL PRODUCT!

And I can’t be knowingly responsible, not even distantly, for someone losing money to a scam.

Now I know probably most of the people who have this widget don’t know that it is a scam. At first glance it does look like a really good idea.  So how can you tell if something is a scam, or a valid money making opportunity.

It is simple, you just have to ask yourself one question.

Can I make money selling this product, without having to recruit anyone else into selling the product?

If the answer is yes, then you have a real product and a real opportunity. (It might not be a great or even good opportunity, but it is a real opportunity.)  If the answer is no, you have a Ponzi scheme.

I’m not going to tell you the name of the widget.  There are plenty of people out there who don’t care that people will lose money, and I don’t want to help them find a new way to scam people.

However, if you have such a widget on your website, do the right thing and take it off.  You may lose some money in the short run, but in the long term, you  keep your integrity, and that is worth more than any money you could earn.

Please feel free to share this information with others. I would appreciate credit and a link back. Thanks.

How to Get Your Economic Stimulus Payment aka Tax Rebate Check

The official title from the IRS is the Economic Stimulus Payment, but most people still call it the Tax Rebate Check and it’s going out to over 130 million US households beginning in May.

3 Simple Requirements

You must have a social security number, an ITIN (individual taxpayer identification number) will not work.

You must have at least $3,000 in qualified income. For your ESp (Economic Stimulus Payment) Social Security Payments, some veterans Benefits, and Railroad Retirement payments count towards the $3,000.

You must file a 2007 Tax Return. This means that many people who would not otherwise file a tax return, because there income is too low, or is not taxable, like Social Security Benefits, should file a tax return this year. This last point is very important. If you think you are not getting a Tax Rebate Check because you are not required to file a tax return, you are wrong! As long as you have at least $3,000 in qualified income you will get a check as long as you file a tax return. If you don’t normally file a return, you should be able to file the short form 1040A which is not too complicated and most can manage on their own.

File a return, even if you are not sure you qualify. If you don’t owe anything it doesn’t hurt to file a return. If it turns out you don’t qualify, you simply won’t get a check. Don’t worry. Filing a return this year doesn’t make the IRS “expect” a return next year.

How Much Will You Get?

If you qualify you will get at least $300 and no more than $600 per person. The exact amount depends on the information on your tax return. Higher income taxpayers will have their ESP reduced or even eliminated. With phaseouts beginning at AGI’s $75,000 for individuals and $150,000 for married couples.

Scam Alert

There is always someone wanting to take advantage. Here is a warning put out by the IRS.
If someone claiming to be from the IRS calls or e-mails you about the payments and asks you for a Social Security, bank account or credit card number, it’s a scam. The scammers are trying to get your personal and financial information so they can empty your bank account, run up charges on your credit card and more. Find out more — see IR-2008-11, IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting.

If you have any questions you can leave a comment with the question, or you can visit the IRS Economic Stimulus Payment website.

Before You Launch Your New Business

Starting a new business is always fun and exciting! I should know. I have successfully launched 3 businesses and I am working on my fourth! But before you get carried away with the rush of starting a new venture, ask yourself a few questions.

#1. Is There a Market For My Product or Service?

Is there a market for your product? You may love it, but does anyone else? Can you convince people to part with their hard earned money? Check your competition. Is there lots of competition? Then how are you going to make your product stand out. No competition? That may be because you are the first, or it may be that there is no market for your product.

#2. Do I Have Enough Money to Get Me Through the First Year?

Do not expect to become an overnight success! It does happen, although it is rare. Starting a business can be very expensive. Just getting the word out about your product can burn through a lot of cash. Make a financial plan, assume almost no income for the first year, and make sure you have enough to cash to carry you through. Many businesses that fail, would have eventually succeeded if they had enough cash for their launch period.

#3. Do I Have a Plan?

Or maybe even two or three. You could have a marketing plan and a financial plan, but at the very least every business should have a business plan. It does not need to be complicated or long, it can be just a page or two, but it should be in writing. What are your goals for your business, and how do you expect to achieve those goals? How do you see your business one year from now, how about ten years from now?

#4. Who are my Advisers and Mentors?

Do not be a lone ranger and try to do everything yourself. Find a mentor who can give you good advice, and give a different perspective on your business. Find a tax adviser, someone who does more than just fill out tax forms. An excellent tax adviser will help you maximize the tax savings of your business, and will most likely save you more than their fees. Good legal advice will also save you money over the long term.

Answer these questions and you will be ahead of the game when it comes to starting a successful business.

Changes in the Tax Law for Your 2007 Return

Today’s guest post is by the Internal Revenue Service. Every year there are changes to the tax code. This year is better than most with only a few changes from 2006.  I really encourage everyone of low or moderate income to look into the Saver’s Credit. If you qualify the IRS will give you a tax credit of up to 50% of what you contribute to a retirement plan.  This includes employer sponsored retirement plans such as 401ks and individual plans such as IRA’s.  The Saver’s Credit can create some major tax savings while helping you to save for retirement. A little known secret is you can contribute to an IRA as late as April 15, 2008 and still take the deduction on your 2007 tax return!

Taxpayers should be aware of important changes to the tax law before they complete their 2007 federal income tax forms. Here are some changes that may affect your return.

  • AMT Exemption Increased for One Year. For tax-year 2007, Congress raised the alternative minimum tax exemption to $66,250 for a married couple filing a joint return. The exemption rises to $33,125 for a married person filing separately and to $44,350 for singles and heads of household. While the vast majority of taxpayers can file as usual, about 13.5 million taxpayers who file any of five tax forms affected by recent tax law changes related to the AMT will have to wait until Feb. 11, 2008, to file their returns. IRS.gov has more information on this important subject, including downloadable copies of affected forms and questions and answers.
  • Extender Tax Breaks Reappear on IRS Forms. Several popular tax breaks, renewed too late to be included on 2006 forms, once again appear as separate items on various 2007 IRS forms. As a result, unlike last year, eligible taxpayers will no longer have to follow special instructions in order to claim the deduction for state and local sales taxes, the educator expense deduction and the tuition and fees deduction.
  • Saver’s Credit. This year for the first time income limits for the saver’s credit are adjusted for inflation. The saver’s credit supplements other tax benefits available to low- and- moderate income taxpayers who save for retirement. Begun in 2002 as a temporary provision, the saver’s credit is now a permanent part of the tax code. Use Form 8880 to claim the credit.
  • Mortgage Insurance Premiums May be Deductible. Some borrowers may be able to deduct mortgage insurance premiums paid on mortgages taken out or refinanced during 2007. The deduction for mortgage insurance premiums is phased out for taxpayers with adjusted gross incomes exceeding $100,000 ($50,000, if married filing separately). Claim this deduction on Schedule A, Line 13. Further details are in Publication 936.
  • New Rules for Giving to Charity. To deduct any charitable donation of money, taxpayers must have a bank record or a written communication from the recipient showing the name of the organization and the date and amount of the contribution. Though taxpayers are already required to keep records to support their contribution deductions, this new provision is designed to provide greater certainty, both to taxpayers and the government, in determining what may be deducted as a charitable contribution. See Publication 526.

More information about the changes can be found on IRS.gov and in various IRS documents, including the Instructions for Form 1040.

Remember that for the genuine IRS Web site be sure to use .gov. Don’t be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:

I Love My Readers! Who Are You?

Happy Valentine’s Day!

A little off topic today, and I’m doing a little duel tasking today. I need some time to prepare a nice dinner for my Valentine tonight! Here is a post from my personal blog that I would like to share here also!

I have been trying to think of a way to thank all my readers this Valentine’s Day, and to let you know how much I appreciate you. It just wouldn’t be practical to send chocolates, or flowers, or cards. I could send e-cards but that might be a little spammy. So I thought and thought and then I thought some more. I wanted to make sure whatever it was went to my readers, and not those who were just passing through. That’s why this paragraph is a little long and wordy!

So I finally came up with an idea, it’s not much, but it fits my budget! I am giving away links, to everyone who wants one. Here is how it will work. This blog is a do-follow blog and I have Comment Luv installed. That means if you comment on a post you get a link back to your blog plus, comment luv adds a link back to your last post. And of course they are all do-follow links.

Now usually I just delete comments that I feel are blatant self-promotion, but on this post I am welcoming it! I’d like it if you would tell me a little bit about who you are, but if you are in a hurry go ahead and make a one word comment, or no comment. You could even include another link to your blog. (Only one please)

Now only a few restrictions. This is a PG-13 blog so if your site is adult, gambling, or adult pharms, than I’m going to have to say sorry, this offer doesn’t apply to you. And if you like my idea, feel free to copy it. Just please be nice and provide a link back to this post.

You Won't Be Getting a Tax Rebate Check

Henry Paulson, the Unites States Treasury Secretary announced on Friday that Congress has approved the $167 billion, debt financed, Economic stimulus package, and that the IRS will be working through the tax season in order to send out the “rebate” checks starting in May of 2008.

I hate to break the news to everyone, putting the country even further in debt isn’t going to provide any long term stimulus to the economy,  the IRS has enough trouble keeping up with tax season without adding the task of sending out  millions of rebate checks, and technically these are not rebate checks, they are prepayment checks, there is a difference.

While everyone in Congress and the media are talking about Rebate checks, when you visit the Internal Revenue Service they are referring to “advance payment checks”. Is there a difference? Yes! Quite a bit. A rebate is generally understood to be a “giving back” of funds that were already paid. If these were true rebate checks, they would be a refund of taxes previously paid. But in fact, the checks will be prepayments of tax refunds. Details are sketchy right now, but I would expect that with the prepayment checks going out in May, there will be fewer and smaller tax refunds in early 2009.

It is also unlikely that he so-called rebate checks will help the economy. The idea behind the checks is that the people would run with the money to their nearest store and spend it on some type of “stuff”. This would give retailers a boost and keep the economy from falling into recession. Yet, when prepayment checks were issued in 2001, over half the recipients used the money for savings or paying down debt. It sounds like this time won’t be any different. According to the surveys I have seen, most people plan to use their rebate check to pay down debt.

For me, I’ll be sending my check right back to the IRS. It will help towards paying my quarterly estimated tax payments. What will you be doing with your prepayment check?

You Won’t Be Getting a Tax Rebate Check

Henry Paulson, the Unites States Treasury Secretary announced on Friday that Congress has approved the $167 billion, debt financed, Economic stimulus package, and that the IRS will be working through the tax season in order to send out the “rebate” checks starting in May of 2008.

I hate to break the news to everyone, putting the country even further in debt isn’t going to provide any long term stimulus to the economy,  the IRS has enough trouble keeping up with tax season without adding the task of sending out  millions of rebate checks, and technically these are not rebate checks, they are prepayment checks, there is a difference.

While everyone in Congress and the media are talking about Rebate checks, when you visit the Internal Revenue Service they are referring to “advance payment checks”. Is there a difference? Yes! Quite a bit. A rebate is generally understood to be a “giving back” of funds that were already paid. If these were true rebate checks, they would be a refund of taxes previously paid. But in fact, the checks will be prepayments of tax refunds. Details are sketchy right now, but I would expect that with the prepayment checks going out in May, there will be fewer and smaller tax refunds in early 2009.

It is also unlikely that he so-called rebate checks will help the economy. The idea behind the checks is that the people would run with the money to their nearest store and spend it on some type of “stuff”. This would give retailers a boost and keep the economy from falling into recession. Yet, when prepayment checks were issued in 2001, over half the recipients used the money for savings or paying down debt. It sounds like this time won’t be any different. According to the surveys I have seen, most people plan to use their rebate check to pay down debt.

For me, I’ll be sending my check right back to the IRS. It will help towards paying my quarterly estimated tax payments. What will you be doing with your prepayment check?