Asset Maker

10 Email Marketing Tips

2010-07-01T01:00:00.000-07:00

June 2010
By Nina Hendy from smartcompany.com.au

Email marketing continues to grow in popularity as companies turn to one of the cheapest and most measurable forms of self-promotion on the planet. It's not surprising. An email marketing campaign can cost as little as .1c to .3c per email, compared to between $1 and $1.50 for direct marketing delivered via snail mail. But the great challenge remains making sure your email isn't relegated to the spam box. Here are 10 top email marketing secrets.
1. Know what you want
Before you set out, define exactly what your business objectives are and clearly identify your target audience.
Megan Hales, head of digital and senior planner of celebrated Sydney advertising agency The Campaign Palace, says a successful email marketing campaign starts with careful planning. She says it's important to understand what messages or offers your customers want to receive so your relationship is enhanced and the campaign drives the right behaviour, ie: engagement, referral, sales, or another target.
"Email marketing is a highly measurable medium so it's important to have very clear business goals from the outset so the campaign's effectiveness can be tracked and evaluated," she says.
2. Brand your everyday emails
Every email sent from your business address should carry your company branding in your email signature. Include your title, a link to your website, Twitter or LinkedIn account and your contact details. Also, regularly update your signature with any awards your business has won or any special offers so you're spreading the word without spending any of your allocated marketing budget.
Jen Storey, founder of Brisbane-based strategy, marketing and communications firm Outside Insights, says carefully constructed branding messages in everyday emails can help drive traffic to your company website. This in turn will make sure your business ranks higher in a Google search.
"Every day business email is a channel that rarely gets measured or used to its full potential, but it allows you to measure and quantify your email audience and report on the impact it has on your customer base, sales leads and prospects," Storey says.
3. Invest in design
Consider hiring a web designer or marketing company to design your email marketing for a professional look.
Alternatively, consider buying a pre-designed email template, which you can then edit yourself. Most email distribution packages come with a 30 day trial, so make use of it and try before you buy.
"I've seen businesses do it on their own which is great if you're tech-savvy, but I've seen businesses fail because they haven't understood that email marketing needs to reflect your company branding," Taliana says.
"You need to keep your emails consistent. Design a template and stick to that template, only changing the content."
4. Test your campaign (and your competitors)
Each campaign should focus on a single message that's delivered succinctly, Bernie Johnson of Sydney website design agency Adrenalin Media advises.
Ensure every email marketing campaign includes a clear call to action in the email body, Johnson says.
And always send the email to yourself and others within the company before it goes out to your database to check the email can be opened and that there are no spelling mistakes.
If you're unsure if your email marketing is hitting the mark, send one version out to 50 people in your database and a second version to a different 50 people and see which works best, he advises.
"Email marketing is not an exact science. It's a case of trial and error. If the open rates are low then you know you need to start tweaking and testing the email."
Depending on your skills, consider hiring a professional writer or editor to create your content.
Alon Tamir, CEO of online analytics application Intelemail also advises companies to monitor competitors' campaigns.
"You can learn a lot by watching what your competitors are up to," Tamir says.
5. Keep subject lines short and avoid "spammy" terms
Most professional email marketing programs enable the user to run each piece of communication through a program to check whether it's likely to be picked up by a spam filter. This program will scour the text for words likely to be caught in the spam filter.
To make sure your email makes it to the inbox, avoid long subject lines and saturated words like 'win', 'offer' or 'buy now', Johnson says.
And don't send your email via outlook express as the content doesn't look as professional as it could and will take ages to send, he says.
6. Get permission and customise
There needs to be some form of agreement between your company and your customer that clearly indicates that they want to receive communication from your business.
Jeremy Glass from Sydney digital marketing agency Permission advises companies to always seek consent before communicating with customers, no matter how good your offer is.
"Ask customers to provide you with information pertinent to what they want to receive and how frequently. Then you need to deliver on your promise consistently. Make sure you listen to those who respond and get back to them," Glass says.
7. Be careful buying email lists
It's best to build your database organically via your website with a link that enables people to opt in to your newsletter or email marketing campaign.
Every time you get a hard bounce (ie. the email address is no longer operational or someone has left the company), make sure you purge your database, which will ensure your open and click-through statistics are accurate.
"You've got to make sure you regularly maintain your database," Sydney's Johnson says. He also advises against buying cold lists, which, he says, can be a waste of money.
"However, if you're buying a qualified list of targeted contacts and you have an extremely compelling offer, buying a list could be worthwhile, but I've seen that cost up to $40,000 for 100,000 targeted email addresses."
8. Integrate your campaign with social media
Smart marketers make sure their email marketing campaigns are integrated with their Twitter and Facebook sites, enabling them to leverage their marketing to an even greater extent.
Melbourne email marketing expert Basil Hyman says SMEs should make sure their communication links back to their newsletter, Twitter account or website.
"You want to make sure you're pushing your message out via multiple communication channels, which means your brand will get in front of even more potential customers. It's all about using technology to your advantage."
9. Get feedback from unsubscribers
Nothing will turn customers off your brand quicker than bombarding them with irrelevant information - and then making it difficult for them to opt out of your emails.
That's why you shouldn't be tempted to lock customers into receiving your email.
Lisa Taliana of Melbourne website design firm Taliana Design says companies should always make sure they include an 'unsubscribe' link at the end of each piece of electronic communication.
"If your email marketing package allows it, include a quick questionnaire so those opting out can explain why they're choosing to unsubscribe. That way you know if your emails are no longer relevant or they're no longer interested in your offering," Taliana says.
10. Always measure your success
Email marketing is so popular because it's one of the most measurable forms of advertising around. In recent years, the market has been flooded with a broad range of email marketing tools offering varying levels of functionality and analytics, so shop around for the most appropriate one for your business.
Lisa Taliana says most email distribution packages offer users the ability to access detailed statistics after each campaign.
"These statistics can tell a business which customers opened their email, which emails bounced and why, if the recipient forwarded the email on to another person, which links the receiver clicked on and how many times those links were opened – all invaluable information," Taliana says.

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Considering Buying your first home?????

2010-06-29T01:42:00.000-07:00

Buying your first home is exciting, but it’s important to think with your head and not just your heart. If you’re considering taking the leap the first step is working out how much you can afford. This depends partly on how much deposit you have saved up. You’ll probably need at least 5% percent to 10 percent. If you’re entitled to the First Home Owner Grant, there’s another $7000 you can add to your budget. See www.firsthome.gov.au for details. Also consider how much you can afford in terms of monthly repayments – the general rule of thumb is 30% of your monthly before-tax income.
As well as the cost of the actual home you need to think about all the extra costs. Stamp duty will account for a huge chunk but as a first home buyer you may be eligible for a concession. Check with your local office of state revenue. If you’re borrowing more than 80 percent of the value of the home you’ll also need to budget for lenders mortgage insurance. This protects the lender, not you, if you have trouble repaying the debt. Other expenses include legal fees, inspection fees and borrowing costs.
It’s a great idea to approach a lender or mortgage broker to get pre-approval for a loan. Having your finances sorted before starting the search will mean you know exactly how much money you have to play with. And make sure you’re as thorough about choosing your loan as you are about choosing your home. The next step is choosing the location. Think about suburbs that suit your lifestyle, are close to work, the amenities you need and being near your friends and family. You may have to compromise – your first home might not be in your dream location.
A wishlist of the features you want is a good idea. Think about things like how many rooms you need, do you need a big backyard, a property where you can add value, or something perfect as is.
Then it’s time to start the hunt. The internet and sites like www.domain.com.au and www.realestate.com.au are a great starting point. Knowing what’s out there and inspecting as many properties as possible is the best way to get a good idea of how much you should pay. Suburb reports from companies like RP Data are handy.
If you find a property you really like, a building and pest inspection is a must. It will set you back a few hundred dollars but it could save you from buying a dud. If the inspection reports come up clear and you are keen to buy the property, you should get your solicitor to review the contract before making an offer. That way you can ensure there are no nasty surprises lurking in there.
Once your solicitor gives you the thumbs up you can consider making an offer. Make sure you don’t go in with your highest offer first because it gives you no room to move.
Don’t let on how much you want the place – try to play it cool so they don’t milk you for more money.
If your offer is accepted you’ll need to sign the contract. Even after you’ve signed the contract you may have a short cooling-off period but you may lose a small amount if you change your mind.
This cooling-off period generally doesn’t apply if you bought the property at auction (see buying at auction at right).
For more on property, check out the June issue of Money magazine, out now!

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Money Maker

2010-06-22T18:05:00.001-07:00

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Free - Wealth Creation Books

2010-06-22T01:04:00.000-07:00

Here are some free books to help you on your Financial Journey

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Money Saving Game

2010-06-21T00:53:00.000-07:00

If you are unable to view this video, you may need to install the latest Flash plug-in, available free here

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Making Money: The Keys to Financial Success

2010-06-19T20:30:00.000-07:00

Strategies to help you through the financial crisis and set you up for the future
Paul Clitheroe, one of Australia's leading personal finance advisers, explains how to achieve your financial goals so you can enjoy the good things in life. Even when times are tough there are plenty of things you can do to make life more comfortable in the short term and ensure your financial security in the future.

Whether you're a novice or an experienced investor, Making Money, Australia's top-selling personal finance guide, shows you how to make the most of your dollars, and answers those big money issues that face us each day:

How can I pay off my mortgage faster?
How can I save more effectively?
Should I invest in shares, even in a volatile market?
How do I get the most from my super and ensure that it will still be there when I need it?
How do I minimise tax?
Should I salary sacrifice?
What should I look for in an investment property?
How do I retire comfortably?

Making Money us the essential guide to see you through tough economic times.

Paul Clitheroe has written a number of books on money and personal finance. He is the chief commentator of Money Magazine and a founding partner of financial planning firm ipac securities. In 2005, Paul was appointed Chairman of the Financial Literacy Foundation.

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Investing in Australia

2010-06-19T20:11:00.001-07:00

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How to Pay less tax

2010-06-18T01:43:00.001-07:00

By Allison Tait, ninemsn Money
Welcome windfall or nasty bill? What's your tax return going to deliver this year? So much depends on how organised you are, and how you play the tax game. Here's our guide to paying less.
Start with the paperwork
Don't wait until the last minute to get your paperwork together. Valuable deductions are lost because you can't find a receipt at the last minute.
Talk to a (good) accountant or tax agent
While many of us see accountant's or tax agent's fees as wasted money, arguing that our tax is simple, it's possible we're doing ourselves out of not only advice, but deductions. "For a start, the fees are tax deductible," says accountant and financial advisor Jason Cunningham, author of Where's My Money? (Wiley).
"But a good accountant is someone who can add value to your situation. Not just the guy who gets you the most back — a person who can help you with your goals and objectives."
Word of mouth or referral is the best place to start.
Don't overlook the obvious
There are several everyday deductions that people often overlook. "Most people can claim their motor vehicle expenses in some way," says Andrew Jeffers, CEO of Aussie Tax Time (www.aussietaxtime.com). "If you use it for work or to go from work to work-related study, you can claim that."
There are four methods of working out how to claim deductions, but Jeffers favours keeping a logbook. "If you keep one for 12 weeks, it lasts for five years," Jeffers says.
Jeffers also warns against falling into the trap of believing a car allowance is automatically a full deduction. "You need to add the allowance to your income and then claim a deduction using one of the four methods," he says. "If your allowance is more than your claim, you will be taxed on the difference."
Kids can be tax-deductible
Well, not exactly, but you can receive a rebate in the form of the Education Rebate, to the tune of $750 (primary) or $1500 (secondary school). "You need to keep receipts of expenses in relation to your child's education costs," Jeffers says. Before you get too excited, fees are not included, although it's worth noting that components of some school fees are. Check with your accountant.
All education is not equal
While any form of self-education is admirable, it's not all tax deductible. "It must be something that helps you increase your existing income," Jeffers says. "A plumber might do a law degree, but that's not tax deductible. It must be in the same strain." Choose your courses wisely to save tax.
Don't forget to take your medicine
The medical expenses tax offset is another area that can be forgotten. "There is a threshold, but it's particularly good for families as they can combine expenditure," Cunningham says. "Once you spend $1500, you get 20 percent back on any medical expenditure above that." Doctor's fees are not included, but you might be surprised by what is.
Make sure you offer a comprehensive return
Don't forget to declare that little bit of interest on your everyday bank account. "A year ago, you might have got away with it," Jeffers says. "But the ATO has comprehensive records and they cross-reference. Contact them for a pre-filing report, which helps you to see what they already have, and reminds you what you need to include."
Don't forget to claim what's yours
The Family Tax Benefit used to be administered by the ATO, but now must be claimed separately through Family Assistance. "People get confused and forget to claim it," Jeffers says. "There are different ways to do it — annually, for example — so do some research."
Think about next year

It matters when you do things. If you're putting money in a bank term deposit, for instance, you want it to mature after June 30. That way the interest is deferred into the following tax year.
Beware the trap, however: interest is taxable when it's credited to your account, not when the account matures. So if it's credited monthly or quarterly, you'll pay tax in the year that it's credited. The way around it is to choose a deposit where interest is credited only on maturity.
Start with the paperwork
Now that you've got the 2009-10 tax year out of the way, get your systems in place for next year. Put all your paperwork in one place, whether it be a shoebox or a filing cabinet, and put it in useful categories. Bank together, telcos together, utilities together — and no "miscellaneous". The key is to do it regularly. The more often you do it, the less unpleasant it will be.

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Forgotten fortunes

2010-06-17T02:43:00.000-07:00

Have you always dreamt of winning big? Well with a forgotten fortune of $610 million you may have some missing money you did not even know about.

The are millions of dollars left in abandoned bank accounts, life insurance and shares.
Despite the public awareness campaign the Australian Securities and Investments Commission (ASIC) has waged over the last two years it seems we never learn with the pool of unclaimed funds now at a record level.
Related stories

Delia Rickard and the team from ASIC's Fido, handed back $57 million last year to people smart enough to check the website.
"What you have to do is go to ASIC's consumer website www.fido.gov.au and type in your name," Delia said.
"Hopefully it will tell you that you own some of that money.
"The biggest amount we have there at the moment is in Carlisle, Western Australia, from a Commonwealth Bank account and it's over $900,000."
Are you the lucky person in Melbourne with an ANZ bank account chest worth $481,199 or is your family so cashed-up in Doncaster that you would not miss a windfall of $271,057?
In Sydney's Matraville, someone has let slip a small fortune more than $642,000.
In Dolans Bay somebody has a bit over $700,000 waiting to be claimed, it is from a St George Bank account.
If you live in Bohle Queensland, over $500,000 has been left in an abandoned bank account while in the city of Adelaide ask around, you might have claim of $170,000 worth of forgotten shares.
Financial Expert Peter Switzer from the Switzer Report said a lot of people do not know that there is money and a way to find it.
"We learnt that with super as well and secondly people are really disorganised, it's the disorganised person's world that is really losing money all the time," he said.
ASIC holds the money in a trust fund for seven years then the government profits from the interest made with the forgotten money pit.

Link to Fido

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Why the US is to Blame

2010-06-17T00:53:00.000-07:00

Here is the statistic that tells it all. Over the weekend Bloomberg reported that the US's debt of $13 trillion will shortly overtake its annual GDP.

Any country with a debt to GDP ratio of 40, let alone 50 or 60 is generally considered a third world basket-case. The US is bad, and the Europeans even worse. Of course both have had to bail out their banks so when market conditions are right, and when that will be is most uncertain, they can sell the banks back onto the market and collect some of the money back.
In Australia many of us have justifiably become concerned with the spending of the Government, although its Budget forecast this year suggests sovereign debt will peak at $93 billion in the coming two years before disappearing altogether around 2017.
When compared with an annual economy of $1.3 trillion, our debt looks miniscule, manageable and wholly more desirable than most other parts of the world. But the global debt will, and is already causing us challenges.
Even now it is obvious that banks' cost of funding is rising quickly and it puts more pressure on them to raise interest rates for mortgages and business loans. But when it comes to mortgages they are kind of stuck.
Though Kevin Rudd's approval ratings have plummeted in recent weeks, it would be a brave banker to raise mortgage rates outside of a Reserve Bank increase this side of the election.
To do so would not only incur the wrath of the Government now, but after the election the whole industry might expect some punitive action given the benefits the Government bestowed on the industry during the global financial crisis. Yet, privately, the banks' senior executives know that the pressures are building, and something must give.
However the Reserve Bank might not provide the pressure point shortly. Though we know Glenn Stephens and the Reserve Bank board are not shy of raising interest rates during an election campaign (they did it to John Howard in the last election) it is obvious that the preferred position is to stop and watch the economy for the coming months, rather than continuing to raise rates.
So the pressures are building - you can tell from the quite astonishing deals on offer with Term Deposits right now. Some banks are offering higher interest on deposits than they are collecting on home loans. It is most unusual, but shows the desperation of some to avoid funding massive tranches of debt in the offshore markets.
The point for Australia as a whole is that the advantageous debt position should be placed into context. While the Federal Government has a relatively small amount of debt (and one it should actively seek to control) many households have significant debts (many times their personal GDP) which makes them (and therefore the economy) highly susceptible to rate movements.
And you can see it. Retail sales have been stagnant - with only the offer of bargains enticing the credit cards out of peoples' wallets, credit card use is down and debit card use is going through to roof (you don't have to be a pointy-headed economist to work that one out). In other words people already know the dangers of higher rates, no matter what the Reserve Bank says it might or will do.
After all Glenn Stephens is the Governor who said that rates would rise gradually - and then slammed them up six times in eight months.

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MUST HAVE BUSINESS and ASSET BUILDING BOOKS

2010-06-15T19:13:00.000-07:00

The Euro Crisis

2010-06-15T18:40:00.000-07:00

The problems facing Greece are just the beginning. The countries belonging to Europe's common currency zone are drifting further and further apart, and national bankruptcies are a distinct possibility. Brussels is faced with a number of choices, none of them good.

Men like Wilhelm Nölling, former member of the German Central Bank Council, and Wilhelm Hankel, an economics professor critical of the euro, have been out of the spotlight for years. In the 1990s, they fought against the introduction of the common currency, even calling on Germany's high court to prevent the creation of the euro zone. But none of it worked.

Now both men are in demand again, and the old euro critics' beliefs are more relevant than ever. Were the skeptics right back then, when they said Europe wasn't ready for the euro zone? Were the differences too great and the politicians too weak to ensure a strict and stable course?

PHOTO GALLERY

3 Photos

Photo Gallery: The Troubles Facing Greece

"The euro should really be called the Icarus," Hankel suggested back then. He predicted the currency would meet the same end as the hero of Greek legend, who paid for his dream of flight with his life. Is the euro's high flight over now too? The news these days is alarming. It's causing a commotion on financial markets and intense discussion in capitals across Europe, as well as in Frankfurt, seat of the European Central Bank (ECB).
Brussels took a hard line with Athens last week. Greece must cut costs drastically under close European Union supervision, a sacrifice of a share of its sovereignty. Risk premiums for Greek government bonds have risen drastically, and the country has to pay higher and higher charges.
The Possibility of State Bankruptcies
Accruing debt is becoming increasingly expensive for other countries in the euro zone as well, among them Portugal and Spain. The southern members of the euro zone are especially being eyed with mistrust. Speculators are betting that bonds will continue to fall and that, eventually, the countries won't be able to borrow any more money at all. State bankruptcies are seen as a possibility.
"We've reached a point where it's possible to deal individual countries a lethal blow by downgrading their credit and boycotting their government bonds," Nölling warns.
Many are now wondering how the stronger euro-zone countries should react -- whether it's possible to help the weaker ones without jeopardizing themselves and the common currency. Furthermore, there is a risk that euro-zone members will continue to grow apart economically, a trend that could cause the monetary union to eventually collapse.
Doing nothing is not an option. In light of the national debt in Greece, Portugal, Spain and Ireland, the euro zone is in danger of transforming from a "common destiny to a common liability," Nölling says.
And so it won't be any ordinary meeting when finance ministers from the 16-euro zone countries meet for a regularly scheduled get-together in Brussels next Monday. The European Commission plans to assign each country homework to be completed in the coming years.
Cohesion and Stability
The Commission doesn't hold Greece solely responsible for the current euro woes. Experts close to Economic and Monetary Affairs Commissioner Joaquín Almunia say nearly every participating country is compromising the cohesion and stability of the common currency.
"The combination of decreasing competitiveness and excessive accumulation of national debt is alarming," the experts wrote in a recent report, adding that if the member countries don't get their problems under control, it will "jeopardize the cohesion of the monetary union."
Differing economic development within the euro zone and a lack of political coordination are to blame, they say. In the more than 10 years since the euro was introduced, the Commission states, it has become clear that simply controlling the development of member states' budgets is not enough. What that means, more concretely, is that the stability provisions stipulated in the Maastricht Treaty to regulate the common currency aren't working, and member states need to better coordinate their financial and economic policy measures.
That is precisely what euro skeptics have said from the beginning -- that a common currency can't work in the long run without a common economic and financial policy. The member countries' governments ignored these objections, unready to give up a further aspect of their national sovereignty.
Now politicians are facing a difficult decision: Should they continue as they have, thus potentially undermining the euro's ability to function? Or should they yield a portion of their national sovereignty to Brussels?
Without common policies, the individual countries drift further and further apart. Before the euro was introduced, exchange rate adjustments served to dispel tensions. Now the common currency zone lacks the option of adapting by revaluing currencies.
Watching with Alarm
EU officials are watching with alarm as the various euro-zone countries' competitiveness diverges sharply. The differences are especially large between countries like Germany, the Netherlands and Finland, which are characterized by current account surpluses, and countries with high budget deficits. Along with Greece, this second category includes especially Spain, Portugal and Ireland.
These countries' competitiveness has dropped steadily since the euro was introduced. They lived on credit for years, seduced by the unusually low interest rates within the euro zone, and imported far more than they exported.
When demand collapsed in the wake of the global financial crisis, governments jumped in to fill the gap, with serious consequences -- debt skyrocketed. Spain's budget deficit was at 11 percent last year, while Greece's was nearly 13 percent. Such high debt is simply not sustainable in the long term.

In the past, the solution for these countries would have been to devalue their currency, which in turn would make imports more expensive and exports cheaper. Such a move would stimulate their national economies and strengthen their competitiveness. Now, however, these countries must submit to a drastic therapy regime at the hands of the European Commission. They need to balance their budgets, while simultaneously creating more competition on the labor and goods markets.
The directives from Brussels translate into difficult sacrifices for the citizens of the affected countries. Employees will have to scale back wage demands for years, and civil servants will see their salaries cut. Ireland has already embarked on this path; Greece and Spain will follow.

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Worst Places to Live in Australia

2010-06-15T17:27:00.000-07:00

AAP

The Sydney shire that is home to the head of Australia's central bank has been named as one of the worst areas in the nation to invest in real estate.
Sutherland Shire south of the city offers poor road links to the central business district and poor capital growth, according to a list of the worst places for property investment complied by analyst Terry Ryder.
Mr Ryder's latest annual "No Go Zones" report names ten places investors shouldn't venture in NSW, Queensland, Victoria, Western Australia and Tasmania.
"These are the places that I believe investors are better off avoiding - there are better and safer places to put their money," he said.
For inclusion on the list, areas need to reflect overheated prices, volatility, oversupply, lack of affordability and poor track record, as well as wider issues such as pollution, noise and environmental concerns.
"Investors need to be vigilant because the detrimental features which can harm property investment strategy are not always readily apparent - particularly in these days when investors are increasingly buying property in distant locations via the internet," Mr Ryder said in a statement on Wednesday.
In NSW there are three areas named including Sutherland Shire, where Reserve Bank of Australia governor Glenn Stevens lives, the inner west peninsula suburb of Breakfast Point and the beachy, hippy paradise of Byron Bay.
Bryon Bay's inclusion may surprise but the list also includes Queensland's Sunshine Coast and Gold Coast.
"One of the least known factors in Australian real estate is that iconic sea change locations tend to have poor capital growth records," Mr Ryder said.
"In reality, such locations often deliver inferior gains for investors.
"The Gold Coast and Sunshine Coast are perfect examples of areas that are not prime real estate, with their capital growth rates among the worst in Australia."
Mr Ryder's list also includes Lyndhurst, southeast of Melbourne, prestige Melbourne suburbs, Mount Isa in Queensland, Kalgoorlie in Western Australia and the Roseberry/Zeehan area in Tasmania.
Mr Ryder, a specialist property writer, is the author of four books about real estate and compiles the no go zones list each year for his website.

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2010-06-15T17:14:00.001-07:00

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Make Money on Facebook

2010-06-15T17:08:00.000-07:00

By Patrick Stafford from smartcompany.com.au

Is your business ignoring one of the biggest markets on the planet? That is the question confronting Australian businesses who have failed to establish a strong presence on the world's most dominant social networking site, Facebook. While SMEs have poured thousands of dollars and hours into establishing their Google presence, and dedicated large amounts of resources to Twitter, too many have dismissed Facebook as a place for friends to chat and share photos. But the numbers tell a different story.
According to data from Hitwise, Facebook's share of internet traffic recently surpassed even search engine giant Google.
If Facebook was a country, its user base of 400 million people would make it the third most populous nation in the world.
While its biggest user base is in the US, Australians are also Facebook-crazy. There are eight million of us using the site, equating to about 36% of the country's population. On average, we spend 8.32 hours a month on the site. And it's not just young people - according to a recent Nielsen survey, more Australian over 50 are using Facebook than are not, with 2.1 million older Australians now registered members.
But it isn't just individuals who are using the site. Businesses have recognised Facebook's importance and are jumping on, creating fan pages and are inviting more users to become advocates for their brand.
Businesses are also realising they cannot afford to ignore the Facebook masses.
A survey from StollzNow Research last year revealed 75% of respondents believe companies should listen to what people say on social networks about their products, and follow up with individual conversations. The same survey indicated customers will abandon a company if they read negative reviews about them on a social network or blog.
When you consider that the average user has 130 "friends" and writes 25 comments per month, it is clear businesses have a massive marketing base to tap into.
If you want to sell more and get more customers, you need to take Facebook seriously.
The research phase
Creating a Facebook profile takes a few seconds and essentially no thought, but experts say that isn't good enough. Taking some time out to really hash out your plans and getting your page working as well as it can be first off will save you hassles in the long run.
Facebook regional vice president Paul Borrud says businesses have moved on from asking "why?" to asking "how?" with regards to setting up a campaign on the site.
"I think last year was a really interesting year. We saw a lot of businesses get into this experimental phase with social media, and are now seeing the results. A lot of people questioned it all last year, but this year's it's about moving on and getting involved."
"There are businesses now, small businesses, who are finding really creative ways to leverage the platform. You can take it to the extreme with a brand like Coca-Cola, but there are heaps of smaller businesses doing the same sorts of things."
James Griffin, chief executive of reputation management company SR7, says businesses really need to plan out exactly what they hope to use social media for and what they hope to post on their individual site.
He says businesses need to consider whether the site will emulate the official site in offering ecommerce solutions, links, contact information and so on.
If this direction is taken, Griffin says businesses must be prepared to handle the jump in enquiries, and consider whether they actually have the resources available to devote someone to answering questions and handle online activity.
"I think planning is critical. It's not just about rushing in and filling the need to do it as quickly as possible, but really about having each department and business unit giving input into what they think the page would look like."
Con Frantzeskos, digital strategist at media consultancy DDB says businesses must plan out what type of content will go on the page, who will design that content, and whether the business can actually devote its resources to the project at all.
"You also have to ask yourself what type of content you're putting up there. Is it specific? Why or why not? How will you create the content that goes on there? Think about every single thing you put on the Facebook page and how it relates to the overall business."
"Think about whether you want specific content like video, or whether you'll refer back to the original website. Be careful about the content that's going up there."
Also keep in mind Facebook users are amazingly different from non-Facebook users when it comes to internet usage. Those on the site are spending an average of 25.8 hours on the internet as a whole each month – 3.26 times the amount of time spent by non-Facebook users.
Australian users with Facebook profiles, according to Nielsen director Mark Higginson, view the internet as another media alternative. "They think, 'Will I watch television or surf on the internet for a while...' This doesn't have consequences just for business, but also publishers and anyone thinking about content creation."
Griffin says too many businesses underestimate the power of social media, create a Facebook page and forget about it. This is the wrong approach. Instead, he says, businesses must think of a Facebook page as an extension of their marketing budget – even as a physical shopfront – and devote enough resources to update it regularly.
"Businesses should go into it considering that it's not just going to be handed off to an employee on a part-time basis. Or, if they are doing that, they should have the plans put in place well beforehand."
"Don't think of the website and Facebook as separate, think of them as different channels to market that are connected," Frantzeskos says.
What does it give me?
One of the best and most popular uses of social media has developed as businesses started using profiles as customer service tools. Facebook has become a portal for communicating with customers on an individual basis and solving specific problems and complaints.
While Twitter has become the go-to example of companies engaging in conversations with customers, Reseo chief executive Chris Thomas says Facebook has benefits of its own.
"What is important on Facebook is that you're looking for a social objective with your customers. For example, if you have a subject like hiking, you can facilitate that and create a poll asking about the best hike your fans have been on. You're not talking about the product, then, you're talking about the lifestyle."
Thomas says Ford is a good example of a company using social media to both answer customer enquiries and promote their products. Given the company's recent financial and reputation difficulties, especially in the United States, Thomas says Facebook has helped save the company's standing.
"They are able to redefine themselves as a company, and are even selling cards because of the customer interactions on Facebook and all the work they are putting into it."
Brett Waters, Asia Pacific South vice president of RightNow, says there is a huge opportunity for businesses to create support communities to help customers with individual problems – helping your reputation in the process and providing you with new customers.
"You need to recognise issues, complaints and discussions and then develop a process to answer all of them. Effectively you are extending your customer service department and you need to think of what you're doing in those terms. Take it seriously."
But he adds that creating a community just isn't enough – you need to bring people there. After that, the challenge is keeping people on your page long enough to see some value.
"It's all about providing relevance and giving them quick access to something. If I'm a car insurance company offering insurance products, how do I want to sell that on Facebook? Just saying I'm the "Acme Insurance support community" won't draw anyone, but I could think of a target market and speak to them."
"For instance, one example would be mothers with babies, and the concept of car capsules and issues around that. I could ask about people's experiences with car seats, what has happened to them, and so on. That's compelling, and is in the context of what you're selling. People will stay then for the community, and it will make your page look alive."
Keeping on a community will popularise your page with potentially thousands of customers and followers, who are already listening to anything you have to say.
SEO benefits
Not only can a well run Facebook page help your business look good, it can actually help drive traffic on your main site. If your profile is linked up appropriately with users given clear directions to your "real" web presence, then you can expect more hits to be on their way.
Thomas says a well-run Facebook page can help with a company's overall SEO strategy, and says Google will help push your page to the top if you've done your work.
"Facebook pages can rank very well on Google of course, which is another great thing about them. If you're trying to get into the top 10 with other brands, then if you have a Facebook fan page then you're leveraging the popularity of the site."
Thomas says most of the content on the Facebook page needs to be created by the users, and that "fans" will be put off if there are too many discussions or posts controlled by the company itself.
"You don't go putting all of your content on there. The way to approach it all is try to get as much user-generated content as possible. Facebook is a point of engagement, and so you really want to drive those discussions and get in from that perspective. That's the trick for boring brands – making the discussion around your business exciting."
Planning your content
There are a number of different approaches businesses can take when developing a Facebook page, depending on its purpose.
The basics are simple – you sign up, create a name, invite some friends to join and put up some basic contact information, and then it usually spreads from there. But these experts say this behaviour is similar to how businesses treated the internet in its early days, and much, much more can be done to maximise your potential.
Frantzeskos says businesses can create videos to put on their site, create polls, competitions, discussion groups and create exclusive blogs for users. Coupons can be distributed easily, along with discounts and information on new sales and updates.
He says while every business is different, whatever content goes on the site must be thought of as part of the overall marketing campaign and not something separate from the company's main site – the two are telling the same message in different ways.
"It's different for every business, but for a Facebook fan page you need to think about whether you are reflecting the original website or making something different. Think about whether you want specific content like video, or whether you'll refer back to the original website. Be careful about the content that's going up there."
But he also warns to keep in mind that whatever goes on the Facebook page will be up there for a long time. Unlike a company's website, which can be taken down at a moment's notice, removing a Facebook page from existence takes time and the long-term title needs some thought put into it.
"If you're running a campaign about something, and the campaign changes, it's impossible to change the fan page name and it would be hard to let people know that it is obsolete. Assume everything you are building on Facebook is for the long-term."
These experts also say the most successful Facebook fan pages have a unique design that often ties into the company's overall brand. Keeping similar colours and graphics helps keep a cohesive feel.
Also, they point to the "tabs" at the top of each fan page. While Facebook by default names these tabs with generic titles such as "photos", "info" and "events", there is a plethora of information on the web about how to name these titles yourself to fit in with your own page.
Borrud says there are four major principles to follow when creating a Facebook page in order to provide yourself with the greatest chance of success. The first is simple – be open and authentic.
"Make sure the relationship you have with your fan base is genuine, and that you're not just there to create a transaction. That's not a relationship. This is a long-term thing, so be open, honest and authentic."
"The second is to be active and update often. If you update your site with questions, people take part in that and will realise you are active, and start commenting. Third, you need to create interesting ads that will drive people to your Facebook page, such as targeting specific interests."
The final point, he says, is to simply "listen and adapt".
"Brands need to have big ears and really learn from their customers. Take that feedback into consideration, and don't just push things you assume are important to them. Facebook pages need to be dynamic and not just act as a micro-site. It's important to listen to your customers and evolve."
But Facebook isn't just a tool to gain new fans and raise awareness of your brand. If handled correctly, Facebook can drive sales and even bring in significant amounts of revenue.
Computer giant Dell has maximised the reach of its page by offering a design studio online, and providing extensive links and fronts for people to shop. Frantzeskos says this is a perfect idea for online retailers – provided its coupled with a sense of strong community and user-generated content.
"My strong advice would be that you make it as easy as possible for people to buy. If they are on the site and can't interact with anything, it's extremely difficult. Remove the barriers to people interacting or buying, and if you can't do that, at least link back to the original site or ecommerce platform."
While it's difficult to credit a Facebook page as a "success", as there are is no set criteria, these experts say there are definite signs you're heading in the right direction – a bustling user base, plenty of discussion, and a number of links directed to your sit. Thomas cites American lingerie chain Victoria's Secret a definite example, saying it is beautifully designed with a long list of information available for users. Fans are encouraged to discuss different products and their experiences, along with discussions about non-company related matters.
However, it isn't all conversation. Swedish furniture chain IKEA wanted to earn some money last year but didn't have a huge marketing budget, so it set up a simple Facebook page.
For awhile the site remained quiet as its moderators updated it with pictures of various pieces of furniture. But then it dropped the word that the first user able to "tag" his or her name to a picture would win the corresponding piece of furniture.
Word got out, and the company managed to gain thousands of fans within a short amount of time and quickly gained a reputation for respecting users through its unique and simple campaign – much like the furniture. Users were eventually begging the company to upload more photos – flooding the page with activity.
But it isn't just major international corporations which are taking advantage of what Facebook has to offer. Even smaller businesses are jumping on the trend, including an Indian restaurant called Junnoon located in Palo Alto, California.
The company's Facebook page offers location details, opening hours, photographs and details of upcoming events, but also allows users the ability to book a page straight from the page itself.
By becoming a "fan" of the page, users can also post reviews and rate the food served – and no surprise, most of them are positive.
Borrud says the Aquabumps fan page is one of the most successful he has seen, and credits its popularity to the founder's openness and willingness to create discussions with followers.
"The guy who started it is a photographer, and he takes pictures of sunrises, sunsets, people surfing and that sort of thing. Instead of just outright selling his photographs, he has an art gallery where he invites people to come in and have a conversation about the condition of the surf. He might ask "who's up for a swim?" and get people talking. That's why he has over 8,000 fans."
But Borrud also says while interesting techniques and gimmicks are good and even helpful for your brand, "these shouldn't be the core of your page".
"These are all interesting ideas, but they should all be seen as a tactic which forms part of the overall strategy. Whether it's a promotion, a sweepstakes or whatever, it is not the primary focus and is just working to make the page itself stronger."
Facebook disasters
While many companies get it right, there are certainly examples of businesses getting it wrong when it comes to marketing on Facebook, and they serve as a warning – take it seriously, or suffer the consequences.
These social media blunders have left companies looking desperate, unorganised and arrogant in the eyes of their customers. Criticisms going unanswered, rampant mocking of the company in question, sarcastic responses all result in a tarnished brand, all thanks to leaving Facebook unattended.
Food giant Nestle recently found this out when attempting to connect with its users on the site. Greenpeace activists criticised the company on the official page for buying from suppliers who allegedly hurt the habitats of several endangered species.
A representative hit back at attempts of changing the company's logo into less-than flattering pictures, saying that "we welcome your comments, but please don't post using an altered version of any of our logos as your profile pic – they will be deleted".
The company followed through with the threat and deleted pictures, followed by a massive outcry from activists. The rep replied sarcastically, saying "Oh please... it's like we're censoring everything to allow only positive comments".
The spokesperson later offered an apology, saying they would no longer be rude when answering questions. But it was too late. News of the bungle had spread across the internet, tarnishing the company's reputation.
Griffin says this is astonishing, and that Nestle should have had specific plans in place for dealing with situations like these. The problem, he says, is that too often these circumstances are underestimated and even considered impossible by out-of-touch business leaders.
"I think it's hard to see why Nestle didn't have a crisis management plan come into action, and if they have one, it hasn't been a very good one. You have to acknowledge the fact that when you engage in social media you are giving people a stage to complain about your brand – and that goes as part of embracing social media as marketing."
"One of the biggest alarm bells was when people on the site were talking about actively hurting the company's share price and hoping they would bring it down. It draws a direct link between financial loss and social media presence – which 18 months ago would have been unheard of."
American department store giant Wal-Mart suffered a similar fate when it disabled discussion boards and other feedback features on its Facebook page, prompting a harsh wave of criticism.
It doesn't just happen to companies with bad ideas. Last year, shopping centre operator Westfield introduced a "All I Want For Christmas Is A Westfield Gift Card" competition, giving users the chance to win $10,000 in a gift voucher. While the competition was popular, the company found itself the subject of hate groups on Facebook dedicated to bashing the campaign.
The problem was that Westfield developed an app which changed a user's status to the campaign's token phrase. Users said this was "taking over" the site, and even accused the campaign of violating Facebook's regulations.
Logitech had a similar situation occur last year when it found users were complaining about products and criticising the company.
However, the company wasn't concerned. A spokesperson told SmartCompany at the time that while the Logitech team was monitoring activity, it wouldn't censor any comments and that "they see this as a page for the fans to interact and converse with one another".
Waters says this move was the right one, as companies need to be prepared to take the bad with the good. These experts say if you're going to put your business out in the open, you need to be ready to take a hit – and deal with the problem.
The bottom line
As social networking evolves, it has become more important than ever for businesses to join these sites and start marketing to a constantly-growing base of customers. Borrud says as more and more businesses enter the scene, they are wondering why they didn't get started earlier.
"More and more businesses are finding out their customers are on Facebook, and so they are going to interact with them there. In Australia we have over eight million active users and more are joining every day. They are seeing the engagement that is being provided."
Waters says businesses need to think of how they will approach social networking in ways that are unique to their own strategies, and not just copy the efforts of others.
"Everything is different, and every business develops these things in their own way. But you have to be committed for the long haul. You won't get an immediate result from testing out on social networking, you need to set your expectations on doing things over 12 months."
"After that you can look at what you've done, consider it, and then assess whether it's working or not. But be prepared to put some deep thought into it and develop a cohesive strategy."

Read more: 101 tips for your business in 2010
This article first appeared on SmartCompany.com.au, Australia’s premier site for business advice, news, forums and blogs.

laying the markets: can you cash in with a market stall?

2010-06-15T06:39:00.000-07:00

By Allison Tait, ninemsn Money Farmers markets, handicraft markets, artisan markets, food markets, indoor markets, outdoor markets … there's no doubt that Australians love visiting markets, with more than 50 held in Sydney alone. No doubt you've been to one — but have you considered running your own stall?
Whether it's extra money you're after or the launching pad for a new business, a market stall could be just what you need.
"It's one of the best ways to turn a hobby into a money-making venture," says Margie Sheedy, author of The Small Business Success Guide . "It's a fantastic way to test the market and put yourself, and your ability, to sell out there."
Libby Parsons sells her handmade women's clothing exclusively through Surry Hills and Kirribilli markets in Sydney, under the label Zardie .
"I chose the markets as it is a good gauge of whether people appreciate your product," she says. "I see it as a starting point, to get my label known."
For Parsons, the best thing about selling at markets is that she meets the people who buy her clothes. "You build up more of a relationship," she says. And the worst part? "Markets are really unpredictable — you never know if it's going to be a good day or a bad one!"
Whether you're creating a business or simply looking for a way to make ends meet, Sheedy says clear goals are a must.
"Start as you mean to go on," Sheedy says. "Know what you want to achieve before you begin. Be strategic at a very basic level. If you're trying to create a money-making venture, then start doing it the way you want to finish it."
To get you started, here are our top 10 tips for setting up a market stall.

Research the markets in your area
Not all markets are created equal and they all draw different customers. "Visit the different markets to work out which is best for your product," Parsons says. Sheedy suggests talking to the market organisers about who visits and how much they spend. "Don't waste your time taking your products to the wrong market," she says. Visit
www.marketsandfairs.com.au for a full rundown of markets and special events in your state.

Markets cost money
"You'll need cash to start up," Sheedy says. "Money to produce or procure your product plus site fees. Don't forget to factor in your time." Most markets offer "casual" stalls, with some offering the possibility of becoming permanent.

You will need some hardware
Things like tables, chair, marquee or an umbrella will be essential. You could try an indoor market first, if there's one in your area, as these often provide tables. This will give you a chance to test the waters. If you're outdoors, don't forget weights to hold your tent down in case of high winds. A money belt is very important to keep your cash safe and secure.

Don't forget the extras
Read the regulations for stallholders at your market of choice very carefully. If public liability insurance isn't covered in the stall fee, you may need to get some — and some markets will require product liability insurance as well. You will also need an ABN and to work out whether you will need to register for GST. Talk to your accountant about what the Australian Tax Office expects.

Be organised and professional
Have enough money in your "float" to give ready change. Make sure you have enough stock with you. Remember bags for packing customer's purchases — brown paper bags are readily available, cheap and eco-chic. "Be ready when customers come to your stall," Sheedy says. "Have a business card in case they ask. Word-of-mouth referrals are important with markets."

Know your customer
When considering pricing, remember you are selling at markets. "Market customers like to get a bargain," Parsons says.

Think about promotion and presentation
How are you going to stand out from all the other stalls? "Also consider how you might capture customer information," Sheedy says. "Can you create a mailing list to keep people up to date on your next market appearance in the area? This might be particularly useful if your region tends to have markets in different places on different weekends." The list could also be the beginning of an online business.

Get used to swings and roundabouts
"Markets are unpredictable," Parsons says. "Don't be too disheartened if you have a bad day." Basically, if the weather is good, customers may choose to go to the beach instead. If it's bad, they may choose to stay in bed. No crowds equals no sales. But bear in mind that you will need to pay your site fees regardless.

Be prepared for long hours
Markets often require a very early setup and you'll need to stay to the bitter end of the day, even if you're not selling anything. Add in travelling, setting up and unpacking time and make sure you factor this in to your profits. You may find you're working for $3 an hour.

Keep a sales book
Write down what you sell and where. It will give you an idea of what's working at different markets.

Graduated .... what the fuck good will that do you

2010-06-15T06:35:00.000-07:00

Congratulations on your graduation; welcome to life. For the last several years you’ve been insulated from reality by the protective cocoon of a college or high school campus. While you’ve toiled with academic duties, chances are you’ve done little toiling with many of life’s harder lessons.
In the coming decade you will be faced with challenges and hardships that you probably have been ill-prepared to handle. That is more of a condemnation of our overall “wussification” as a society than a knock against educators, who for the most part do a good job of working within nearly impossible restraints. Despite their best efforts, there were a few things that were left out of the syllabus on life.
I don’t have all the answers, but I’ve made my share of mistakes. It is my hope that by sharing them here at Frugal Dad at least a few of you will avoid repeating them. So on this graduation day, a day of celebration and reminiscing, keep the the following lessons in mind.

10 Lessons For New Grads

1. Your diploma is worthless. It is a piece of paper. It will soon be mounted in an expensive frame and proudly displayed on a wall somewhere in corporate America. It is the knowledge that you gained, and the experiences you’ve collected, that are invaluable.
2. It’s OK to lose. You are too young to remember keeping score. When I was a kid we had winners and losers, champions and second place. Now everyone gets a trophy just for participating. Losing teaches humility. Embrace it, learn from it, but don’t make it a habit.
3. You cannot borrow your way to prosperity. Sure, some have borrowed money to start something and had success in spite of leveraging their future, but most people crash and burn. Go slow. Save your money and build your idea with your own cash. You’ll spend smarter with your own money.
4. It is time to take better care of yourself. No more all-nighters. The time has come to take care of yourself. Take it from someone who has largely ignored his own advice for the last decade, putting other priorities ahead of his own health. Make taking care of yourself priority one. Trust me, you’ll save money on insurance, health care, and enjoy a better quality of life.
5. Save for sunny days. By now you’ve had the idea of saving for a rainy day beaten into you. It’s good advice, but don’t forget the sunny days, too. Save on purpose. Whatever that purpose is – a hobby or skill you’d like to learn, or a trip you’ve always wanted to take – save for it and pay cash. Remember, life is meant to be enjoyed.
6. There is nothing wrong with renting. Resist the temptation to run out and buy a house. There is no shame in renting. In fact, there are many advantages to renting. It makes sense for new graduates unsure about where they plan to work and live, and who they might plan to share their lives with going forward. When you have a huge emergency fund saved, and the time is right, buy a modest home and pay it off quickly.
7. Save half your income. I don’t have regrets, but if I could do one thing over in my life I would save 50% of my income from the first day I entered the work world. Doing so ensures one year of freedom outside of the work world.
8. A used car does not always represent “someone else’s problem.” Despite our automotive advances over the last thirty years or so, I still routinely hear this excuse for avoiding used cars. There is nothing wrong with a good used car. Have a mechanic check it out, buy it, and drive it until the wheels fall off.
9. Some people will earn more than you for doing the same job. Now that you have a degree you probably feel like you should be at the top of the salary scale. Wrong. There are people who have been out there hustling since you were in diapers (or before), and even though they don’t have a degree, they have decades of real-world experience. Don’t resent them; learn from them.
10. Stand behind your beliefs, especially when they are unpopular. You are an individual, with an individual set of beliefs. Never let anyone take that away from you. It is not popular these days to stand up for what you believe in, but unless you stand for something, you will fall for anything.
Extra credit: You are not finished learning. Learning is a life-long endeavor, and to quit now would mean short-changing yourself some sixty or seventy years. Continue to read books, study subjects you are curious about, and challenge yourself to broaden your horizons. Formal education is now behind you, but a world of opportunity to learn more is now in front of you.

Predatory Lending

2010-06-15T06:12:00.001-07:00

You're a savvy, savvy consumer. You pay your credit card bills in full every month, auto-deduct a generous portion of your paycheck into savings, invest in index funds, and always make sure you're getting the best deal from your cable and wireless providers. Unfortunately, some of your brethren do not read Consumerist and can get caught up in the jaws of predatory lenders, wasting limited cash on things like payday loans, bad credit cards, and using rent-to-own stores. So let's take a walk down the wild side and see how each of these bad choices work, in a giant infographic, courtesy of Mint and WallStats, after the jump.

Books for Financial Success

2010-06-15T05:38:00.000-07:00

I frequently get e-mail from people seeking book recommendations. Most messages are like the one Cody sent yesterday: “What is the first book that I should read that tells me how to invest?” These are easy to answer. In January, Bobby asked a broader question:

I was wondering if you have a list of PF books that you have in your personal library. I use the library frequently and am very interested in furthering my own education in the PF area. It is also a personal goal for this year (one educational book a month.)

This is a great goal and a great question. Eventually I’ll have a subsection of this site devoted to personal finance books. But for today, I’ll list the books I refer to frequently. (These aren’t all the books I own — I own many that aren’t worth having.) I’ve marked the books I consider essential with a happy star .
Please note that these recommendations are based on how well a particular book has worked for me. Your mileage may vary.

Update: Building on everything I’ve learned from reading dozens of personal finance books and hundreds of magazine articles, I wrote a book of my own. Your Money: The Missing Manual takes the best tips from the best books and presents this info in plain english so that anyone can get out of debt and start building wealth. Pick up a copy today!

Basic Personal Finance

These books offer a wide view, discussing many aspects of money. They offer advice about saving, investing, and getting out of debt. They don’t go into much detail about any one subject, but they provide motivation to get started. And that’s what’s most important.

The Millionaire Next Door by Stanley and Danko: The authors interview and survey a pool of millionaires, attempting to find common connections among them. They discover that millionaires live below their means. They budget. They let their adult children make it on their own. This book introduces several key concepts, including degrees of wealth accumulation. It’s a bit tedious in spots, at least in the audio version. This is one of just a few books to cover both sides of the wealth equation: saving money and earning money. [My review.]
Your Money or Your Life by Dominguez and Robin: A classic, and one of the foundation books for the simplicity movement. The authors play off the concept “time is money” in a very literal sense. They encourage readers to sort out priorities, to cut expenses, and then to seek passive income in pursuit of financial independence. A little New Age-y in spots. An excellent book. [Frykitty reviewed this book last year.]
The Total Money Makeover by Dave Ramsey: Ramsey is an anti-credit zealot. He made a $4 million fortune by his mid-twenties, and then lost it to bankruptcy. Now he runs a personal finance empire. He takes a lot of criticism for his support of the Debt Snowball, which he describes in detail here, but the thing is: his methods work. If you are struggling with debt, there is no better starting place than this book. Ramsey’s advice is permeated with his Christianity, but you can get a lot out of this book even if you’re not religious.
The Wealthy Barber by David Chilton: This book offers good, general personal finance advice in the guise of a novel. Several friends meet once a month at the barber shop where the titular character dispenses wisdom on saving, investing, buying a house, and so on. The advice here is excellent, often backed by clear examples. The book’s conversational tone may appeal to some who might otherwise be turned off by personal finance. [My review.]
The Richest Man in Babylon by George Clason: Clason offers personal finance wisdom in the form of parables. These nuggets of wisdom were originally distributed as pamphlets at banks and insurance companies during the 1920s. The most popular were collected into book form. This is the grand-daddy of personal finance (Benjamin Franklin is the great-granddaddy), and many of modern admonitions — “Pay yourself first”, “Invest for the future”, “Learn the power of compound interest” — can be found here.

Frugality

Saving money is a key skill to develop if you hope to get rich. (Read The Millionaire Next Door if you don’t believe me.) Here are four books that can help you learn to cut corners, to save money in ways that may not have occurred to you.

How to Live Well Without Owning a Car by Chris Balish: Balish begins by explaining why you’re better off not owning a car — financially, ecologically, and socially. He spends the rest of the book describing how to survive without one. He offers tips for mass transit, walking, bicycling, and more. This book has a narrow focus. But if you’re in its target audience, it’s worth a read.
Miserly Moms by Jonni McCoy: Don’t judge a book by its cover. Sometimes it’s the most unassuming of books that offers the best advice, that can actively help you on your quest to get rich slowly. Miserly Moms is ostensibly a guide for stay-at-home mothers, but is actually filled with useful tips for anyone who is concerned with frugality (especially parents with young children). [My review.]
The Joy of Simple Living by Jeff Davidson: This book is packed with tips. Davidson covers a wide range of topics, and for each he offers several ways to save money. If this book were a weblog, it would feature digg-able entry after digg-able entry. A great resource for anyone wanting to cut down the clutter of life.
Wealth on Minimal Wage by James Steamer: If you’re a young adult just starting in life, this book is a fine choice. It offers hundreds of ideas on how to avoid debt, maximize your wages, save on insurance and utilities, and generally live a frugal lifestyle. A bit out of date, and maybe a little radical, but filled with good advice. (I’ve had a copy out from the public library for six months. It’s been battered and worn by previous patrons — a sure sign of a good book.)

Another highly-regarded book on frugality is The Complete Tightwad Gazette by Amy Dacyczyn. I’ve never read it, but it’s near the top of my list of books to borrow from the library.

Investing

This set of books deals specifically with investing. The four books I keep at hand are user-friendly. They’re not technical, but offer a good introduction to the topic.

The Automatic Millioinaire by David Bach: There’s more to David Bach than “the latté factor”. The system he recommends here is excellent. If you’ve been meaning to open an IRA, but have never actually done so, then read this book! He’ll explain how to set it up so that it’s painless. (Ad: Buy Stocks for $4 at ShareBuilder.)
The Only Investment Guide You’ll Ever Need by Andrew Tobias: Andrew Tobias is an entertaining writer. His jocular, conversational tone will keep you interested as he describes mutual funds, bonds, and treasury bills. There’s a good section on how to handle a windfall (lottery, inheritance). This is an excellent introduction to the subject of investing.
The Bogleheads’ Guide to Investing by Larimore, Lindauer, and LeBoeuf: You want expet investment advice? You can’t beat the info found here. These devotees of Vanugard founder John Bogle are big on slow, sure investments like indexed mutual funds. They tap their decades of experience to teach about diversification, inflation, and asset allocation. It’s not nearly as boring as it sounds. Highly recommended.
Yes, You Can…Achieve Financial Independence by James Stowers: Despite the odd title, this is a solid book on investment from one of the richest men in America. It does cover some basic personal finance information, but mostly gives tips on how to invest. I haven’t read the entire book, but I often use it as reference when preparing entries here. It’s a sort of bridge between overviews like Tobias and more technical books like Graham or Malkiel.

Two other classics on investing are The Intelligent Investor by Benjamin Graham and A Random Walk Down Wall Street by Burton Malkiel. I have both, but have read neither. They’re both quite technical.

Success

Wealth is about more than money. These books will help you become a well-rounded person, will help you develop skills that will indirectly aid your personal finances.

50 Success Classics by Tom Butler-Bowdon: Butler-Bowdon selected fifty important books from success literature. For each, he created digest versions, summarizing each volume in only a few pages, distilling its key points. He also provided biographical information on each author, and attempted to explain why each book is relevant, placing it in a larger context. This is a wonderful way to find other books to read. [My review.]
Secrets of the Millionaire Mind by T. Harv Eker: There’s a little personal finance advice here (all of it solid), but mostly this book is about changing the way you think about money and about yourself. I found Secrets inspirational. It’s a good choice for somebody with big goals, or somebody trying to overcome negative thinking. [My review.]
How to Win Friends and Influence People by Dale Carnegie: One of the classic success books. Carnegie uses anecdote after anecdote to illustrate the best way to make the most of human relations. It all boils down to this: “To win others to your way of thinking, put yourself in their shoes.” The devil is in the details, though, and Carnegie’s simple prose does a fine job of pointing the way. You can find this book cheap at almost any used book store. [My review.]
Getting Things Done by David Allen: Little needs to be said about this book — it’s a geek classic. Allen describes his formalized system for creating greater efficiency. Though I’ve found it difficult to maintain the precise system for long, I use elements of it all the time. If you have trouble procrastinating or staying organized, this book is for you. [My review.]
Never Eat Alone by Keith Ferrazzi: I’ve been meaning to review this book for weeks. I have a love/hate relationship with it. Parts of it are fantastic — you can learn how to relate to people, how to establish contacts and maintain connections, how to create a social network. But parts of it are creepy — networking for the sake of networking puts me off. The endless name-dropping gets old fast. Worth reading if you have contact with a wide group of people.

One book that’s not in my library is What Color is Your Parachute? This is a classic on changing careers. I’m locked into Get Rich Slowly and the family box factory, but if I were job hunting, I would pick up a copy of this book without hesitation.

Kids and Money

Many parents are unprepared to teach their children about money. You needn’t be one of them. These books suggest methods for getting kids to understand how money works.

What Color is Your Piggy Bank? by Adelia Cellini Linecker: This slim volume is a great choice for kids from 10-14 who are beginning to show an interest in entrepreneurship. Linecker covers the world of jobs, setting up shop, and how to manage money. I hope to provide a complete review of the book in the next few weeks.
You Call the Shots by Cameron Johnson: This is a new book from a young entrepreneur. It’s in my “to-read” stack. I ordered it based on high praise from Flexo at Consumerism Commentary, who wrote: “This book should be required reading for any young adult showing an interest in entrepreneurship.”
Living Simply with Children by Marie Sherlock: Sherlock offers tips for how to raise children that aren’t part of the consumerist culture. She encourages strong family ties as a counter to the relentless purchase to acquire “stuff”. There’s some great advice here.

Final Thoughts

Though I’ve linked to the Amazon pages for each of these books, I encourage you to get them free from your public library. I acquired most of the books in my personal finance library for cheap from garage sales and thrift stores.
Past articles related to this subject include:

How I choose personal finance books
Survey: The best personal finance books
Building a cheap personal finance library

Free Yourself From Debt

2010-06-15T05:36:00.000-07:00

I’ve Paid for this Twice Already is a blog about one family’s journey toward financial freedom. I like the spirit the writer—a 30-something married mom of two with a PhD in Genetics and a 3rd degree blackbelt in taekwondo—brings to the project.
For instance:

Debt used to be a very basic part of my life. It was not just a tool I could use to live beyond our immediate needs, it was practically a lifestyle choice. The amount of money people (people meaning banks, credit cards, etc) would lend me to finance my future was a very real consideration in all the choices I made in the here and now.
But through this debt reduction and ultimately elimination journey, at some point I made a very real, concrete change in my brain. Although I am not strictly anti-debt, I don’t believe in debt any more as a fundamental part of my life. I don’t put my faith in the financing of others to create the life that I want to live.

That’s how my grandpa felt about the subject. When it comes to our modern day approach to money, a lot has changed in this country in a very short period of time. And it’s pretty clear the Depression era attitude towards debt is the healthier one, especially in terms of an individual’s debt or a family’s debt. I do think businesses sometimes need to take on debt in order to grow.

2010-06-15T03:01:00.001-07:00

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