Should You Join the Gig Economy?

 gigeconomy

Today, our standard workday isn’t so standard anymore and we’re talking more about “gigs” – alternative work arrangements that often depend on the latest technology and a desire to set one’s own schedule and pay. However, the question is whether everyone plans for the reality of the work or the impact self-employment in any form can have on his or her long-term finances.

Gig workers – a broad spectrum that includes temporary help agency workers, on-call employees, contract company workers, independent contractors and freelancers – were measured as a startling and growing economic force in a March study by Harvard and Princeton researchers (https://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_-_march_29_20165.pdf). According to their measurements, this diverse group of earners that made up 10.1 percent of the workforce in February 2005 has grown to nearly 16 percent as of late 2015.

Anyone thinking about going into business in place of or in addition to their day job should consider a planning period with the help of a qualified financial or tax expert. Major issues to cover include:

Consider qualified tax and financial advice. Switching to gig work – even if you find lucrative contract work in your field – can be an enormous shock to your finances. Cash flow can be irregular, disrupting budgets and long-term savings. It’s a good idea to get some qualified financial and tax advice so you understand the changes you might face and to keep major financial goals like retirement and college savings on track.

Setting up a business structure: While most gig economy participants settle on a sole proprietorship or some form of limited liability company (LLC) business structure, (https://www.sba.gov/starting-business/choose-your-business-structure) the choice needs to be carefully considered based on your particular business activity, overall tax situation and other financial factors unique to you. This is probably one of the most important reasons to seek out qualified tax, legal or financial expertise – the level of personal or property risk inherent in your choice might call for a structure that offers additional protection against lawsuits or insurance claims.

Think carefully about your benefits… Unless you fit a particular group exempt (https://www.healthcare.gov/health-coverage-exemptions/exemptions-from-the-fee/) from the Patient Protection and Affordable Care Act or are insured by a spouse or partner, you’ll have to invest in healthcare insurance for yourself or consider the cost of being uninsured. This is a particularly important expense to plan in advance based on your health needs and the type of affordable coverage that’s available. Get referrals on qualified health insurance agents to get a full range of choices. And most of all, make a plan to keep saving and investing your money for long-term goals. Walking away from a weekly check can make that process tougher – talk about it and plan for it.

Track your spending and planning carefully. If you don’t budget or track your expenses now, it’s time to start. Being in business entitles you to certain deductions for home office expenses, equipment and other costs related to your work. So whether you use a specific software program or a computer spreadsheet or paper and pen to track your expenses, do so regularly to avoid missing items that could eventually save you money. If you’re working with a tax professional or financial planner, coordinate this recordkeeping with the work they’re doing for you. Also keep a constant discussion going about saving for the future, including retirement.

Make sure you’re really right for this. With proper planning, the gig economy can be both enjoyable and challenging. You’ll not only learn whether you can support yourself, but also whether you’ll enjoy doing it long-term. Many of us dream of being our own boss, but reality can be very different, particularly when managing uneven earnings and cash flow common to many new companies. It’s not just about business; it’s about whether your lifestyle and personality traits (https://hbr.org/2010/02/should-you-be-an-entrepreneur) make you right for operating a business in this economy – or any economy.

Bottom line: Plenty of people find themselves dealing either by choice or necessity with the brave new world of “gig” work. It’s important to approach it as a financial and lifestyle decision on par with starting a business.

 

By Nathaniel Sillin

Top 3 Tips for a Malware-Free Phone

Woman Viewed Through Window Of Caf??? Using Mobile Phone

Hackers, like all criminals, follow the money. When most online transactions were conducted on PCs, hackers targeted PCs with their malicious software (malware). Today commerce is exploding on smartphones and other mobile devices, so the malware business is now exploding on those devices as well.

Here are three tips to help you ensure that your mobile devices stay malware free.

  1. Don’t click those links.

When you were a kid, grown-ups always told you not to talk to strangers. Today the best advice is, don’t click on links from strangers. No matter how tempting the offer, a link in what can only be described as junk mail is just as likely as not to lead to disaster.

However, you also need to be very careful about clicking on items form people you know. That’s right. Your friend may get a copy of the world’s funniest cat video and then forward it to you, not realizing that the world’s funniest cat video is embedded with malware. Unless you’re certain of where a file originated, you probably shouldn’t click it.

  1. Keep Your Phone’s Software Updated

Here’s how it works. We’ll use Android as an example, but it works the same way on Apple devices. First, a hacker identifies a vulnerability in the Android operating system and builds malware around that vulnerability. Next, Google finds out about the malware and issues a software update to “patch” that vulnerability. Then hackers find the next vulnerability, and so on.

The important point is, all those software patches won’t do you a bit of good unless you keep your software up to date. If you’re using an older version of your phone’s operating system, regardless of the brand, you’re just asking for trouble.

  1. Only download legitimate apps.

By “legitimate apps,” we’re talking about apps that are available from either Google Play or Apple’s App Store. If you happen to come across an app that’s available for direct download instead of through one of these two services, don’t download it. Ever.

Can a hacker sneak malware into the App Store? Theoretically, anything is possible, but the chances are beyond slim.

In short, you just need to be smarter than your smartphone.

© Copyright 2016 Stickley on Security

Scammers push people to pay with iTunes gift cards

itunesOne thing we know about scammers — they want money, and they want it fast. That’s why, whatever the con they’re running, they usually ask people to pay a certain way. They want to make it easy for themselves to get the money — and nearly impossible for you to get it back.

Their latest method? iTunes gift cards. To convince you to pay, they might pretend to be with the IRS and say you’ll be arrested if you don’t pay back taxes right now. Or pose as a family member or online love interest who needs your help fast. But as soon as you put money on a card and share the code with them, the money’s gone for good.

If you’re not shopping at the iTunes store, you shouldn’t be paying with an iTunes gift card. Other payment methods scammers might ask for include Amazon gift cards, PayPal, reloadable cards like MoneyPak, Reloadit, or Vanilla, or by wiring money through services like Western Union or MoneyGram. Government offices won’t require you to use these payment methods.

If you get targeted by a scam like this, report it to the FTC at ftc.gov/complaint.

by Amy Hebert
Consumer Education Specialist, FTC

Should a Destination Club Be Your Home Away from Home?

villa

If you’ve thought about buying or building a vacation home, but have hesitated because you aren’t sure that you want to limit yourself to a single location, there’s an alternative you may want to consider: purchasing a membership in a destination club.

What are destination clubs?

Destination clubs are becoming increasingly popular. In return for a one-time membership fee and annual dues, destination club members are allowed to use a club’s global network of luxurious properties for a certain amount of time each year, depending on their membership level. Club holdings are generally restricted to high-end properties–typically those with values of $1.5 million to $3 million. Accommodations are usually large, luxurious private homes, villas, and apartments that are located in travel hot spots such as cities and resort areas. They offer upscale amenities, and a host of personal services.

A destination club or a vacation home?

If you’ve ever fallen in love with a vacation spot, you know that there are some places worth going back to. You may be happy to own a home in a favorite locale and travel to it year after year. One of the main advantages of owning a vacation home is that you’re in the driver’s seat. You can use the property as often as you like, invite friends or family members to use it, or even rent it out. You can also customize your home and decorate it as you wish. But no matter how much you enjoy owning a vacation home, there’s no escaping the fact that it’s a big responsibility. You have to worry about maintaining it, and you must handle all expected–and unexpected–expenses.

The hallmark of a destination club, on the other hand, is flexibility. Joining a destination club allows you to travel to many different places and stay in homes spacious enough to accommodate your family and friends, without the hassles of owning vacation property.
Comparing costs

To compare a destination club membership financially with the purchase of a second home, you have to consider the upfront and ongoing costs of each. Some costs may be similar. For example, maybe you’re considering a destination club with a one-time membership fee of $300,000 and annual dues of $25,000. Alternatively, you could buy a comparable property, let’s say one that’s worth $1.5 million. If you opt to finance the home, your $300,000 (20%) down payment would be equivalent to the destination club’s membership fee, and the amount you’ll spend annually on home maintenance and utility costs could be equivalent to the destination club’s annual dues. (Of course, financing the remaining $1.2 million of the home’s purchase price will also mean making significant monthly payments.)

Costs can vary widely, however. Initial membership fees for a destination club typically range from $100,000 to $1 million or more, and annual fees typically range from $10,000 to $75,000 or more. Home ownership costs may include mortgage expenses, taxes, insurance, utilities, and maintenance (which may be offset somewhat by any rental income you receive).

Another variable to account for is what you’ll get for your money. Destination club memberships entitle you to a certain number of days of use annually, whereas you can use a vacation home as much as you’d like. You’ll also need to take into account home values. For example, joining a destination club may entitle you to stay in a home worth much more than one you could afford to buy (and will also give you access to personal concierge services), but it depends on the specifics.

As a vacation home owner, you can decide when to sell your property, and you’ll benefit from any appreciation in value. Destination clubs, on the other hand, are frank about the fact that becoming a member should be viewed mainly as a lifestyle decision, rather than as an investment decision, although some do allow you to benefit directly or indirectly from any appreciation in the club’s property values. Most destination clubs also have provisions that enable you to “cash out” your membership at your request. For example, you may be allowed to cash out your membership for a specified percentage of the membership fee being charged at the time (generally 80% to 100%). If that’s the case, you might benefit if you cash out at a time when the club’s holdings have risen in value and membership fees are higher than when you joined.

Do your homework

When you join a destination club you’re committing a substantial amount of money. So, make sure that the club is financially sound. Get information about the club’s finances, and carefully read materials and contracts before you sign on the dotted line.

Copyright 2013 Forefield Inc. All rights reserved.

Beware of Spam; It Might Be Loaded with Ransomware

Virus Protection Computer Antivirus Safety Spam Concept

“Be wary of emails with JavaScript attachments,” is the word coming from Microsoft this week. A recent blast of email messages has been tricking the recipients into clicking on javascript files and subsequently downloading ransomware to their computers.

These messages come in emails that have file names that are interesting enough that users want to click them; but don’t. They come with a .zip or .rar extension and include such malicious favorites as TeslaCrypt and Locky, which has been attacking hospitals most recently.

There are a few defenses against this. Ensure you always keep a recent backup of important files from your computers. Also, install trusted anti-malware software and make sure it’s kept up-to-date. While this particular attack may get around this, it’s still important to have it installed. Of course, never open attachments or click links in email messages that you suspect may not be legitimate, especially if they come from unknown senders. Remember that if the file has a .js or .jse extension, it should be considered suspect.

Finally, always keep your system updated with the latest critical and security patches. If you have an older operating system, such as Windows XP, consider upgrading to a newer version. Windows XP has not been supported for a couple of years now and as new exploits are found, the vulnerabilities they exploit will not be fixed.

Other tips to defend against this type of spam include:

  • Making sure to scan all email messages that come through with updated anti-malware software,
  • Disabling macros in Microsoft Office programs,
  • Disabling macro loading in the group policy, if you are in charge of a corporate network, and
  • Educating users on phishing and how to avoid it, including not clicking potentially suspicious links.

Remember that paying cybercriminals to unlock files they encrypted with ransomware is not recommended. Instead, restore any affected system with that recent backup you make sure to have on hand.

© Copyright 2016 Stickley on Security

Getting Your Finances Ready for Adoption

adoption

 

The decision to start a family is a joyful event. However, parents considering adoption should consider advance planning for a range of financial issues unique to the process and the child they hope to bring into their home.

According to the U.S. Department of Health and Human Services, the costs of adopting (https://www.childwelfare.gov) may be a few hundred dollars or can easily exceed $40,000 based on the form of adoption you choose.

So how do you get your finances ready for adoption? By doing your homework and making sure the price and processing work of adoption – all adoption resources, rules and requirements differ locally – won’t eclipse other essential financial goals like retirement, saving for your future child’s education and of course, the higher daily living expenses common to all new families. Start with these tips:

Evaluate your own finances first. It’s generally a good idea to work with qualified financial or tax experts to evaluate whether you can manage adoption costs from savings or grants you don’t have to pay back. Starting a family is a major overall financial commitment no matter what path you take to build yours.

Know the tax benefits of adoption. The federal government offers tax breaks for adoption, but you need to study and follow the rules. According to the IRS, tax benefits for adoption include both a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion from income for employer-provided adoption assistance. The credit is nonrefundable, meaning that it is limited to one’s tax liability for the year. Any credit in excess of tax liability may be carried for up to five years. Adoptions of special needs children may qualify for special treatment. Visit IRS.gov for more details.

Check your workplace benefits. A 2013 Aon Hewitt study said only 12 percent of U.S. employers offered a financial adoption benefit in 1990 rising to 52 percent. Check with your employer to see whether they offer adoption benefits, and factor those benefits into your overall financial plan.

Know your legal costs. Adoption is a legal process, and depending on the kind of adoption process you pursue, it is wise to work with an attorney to make sure your application is in order and your rights are being protected.

Think about insurance. Life and health insurance options need to be reviewed for cost and thoroughness of coverage before you begin the adoption process. Life insurance may come up as part of the estate-planning process, but health insurance in particular requires special consideration in case the child you plan to adopt has medical or developmental needs.

Evaluate available adoption grants. Various community groups, religious organizations and nonprofit organizations and foundations may be a resource of grant funding for the adoption process. Work with trusted advisors to find out if these resources are reliable and could help you afford your adoption.

Network and learn. Many communities and organizations sponsor support and planning groups for parents of adopted kids and those planning to adopt. Depending on the adoption avenue you’re considering, make it a point to get to know parents who have already gone through the process to understand all sides of what their lives as adoptive parents are like – make your learning process about more than the money.

Bottom line: Adoption is one of life’s most rewarding events. The amount of financial planning you can do to support your adoption process will help give your new family the best possible start.

 

By Nathaniel Sillin