Wouldn't it be wonderful if you could design a machine that can generate cash every hour of the day? Whether you were eating, playing or sleeping, this device would ensure that you were consistently supplied with a steady stream of income. Your money problems would be history and the lifestyle of the financially free would be yours forever.
While many of us would love to possess a magic money machine, this apparatus would probably be impossible to build, and it would definitely be illegal. However, the concept of creating an income source that could eventually produce earnings without your personal effort is something that is entirely in your power to achieve.
Do you have to work to earn?
Most of us have grown up with the idea that the only way to earn money was to physically work for it. We were taught in school to study hard, get good grades and look for a nice job with attractive fringe benefits. For the most part, our education system does not foster entrepreneurial thinking which focuses on teaching people how to create income-generating systems.
Creating a system that will produce income requires us to think differently about how we earn. Most employees and self-employed people are paid for their time and physical effort; to get an income they have to carry out some activity. This type of earning is called linear income, which requires the work output to be constantly repeated in order to make more money.
How can you get paid for something that doesn't always demand your time and effort? The answer lies in understanding how to create passive income sources, which are not dependent on your direct involvement to produce your earnings. While you would initially have to work at building this 'money machine', it will eventually generate income without your physical efforts.
How to earn while you sleep
The simplest form of passive income is portfolio income, which is derived from investments that generate earnings. These include stocks that provide dividends, bonds and money market instruments that pay interest, and real estate that supplies rental income. However, it can take many years for you to build a large enough asset base to generate a meaningful income.
Another way to earn passively is to build a money machine that brings in residual income. Residual income is generated when your initial work output is designed to pay you over and over again. For example, if you create a product such as an eBook, music score or an application for a smartphone, you can sell your work repeatedly without having to produce it from scratch again.
Building a money machine that utilises other people's work effort to generate income is another means of creating passive earnings. This is known as leveraged income, which involves working along with other people in order to increase your final work output. Business owners generally make use of leverage when they hire employees to carry out various tasks.
Turn-key money machines
You don't have to start your own traditional enterprise to earn from leveraged income. There are direct selling companies that allow individuals to become independent representatives to distribute their goods and build networks of other business owners. The networking organisation will reward business builders with a percentage of the revenue generated by their teams' efforts.
We are living in the age of technology, which makes it easier for everyone to earn passively. Even if you don't have the financial means to amass assets which generate portfolio income, or the technical know-how and talent to create a product for sale, or the time and resources to build a business, you can still seek to earn passive income online.
One Web-based option is called affiliate marketing. Online businesses, such as Amazon.com, encourage persons to sign up as affiliates and market their products and services. Anyone with a simple website can promote these offerings and receive a commission on sales. You would have to use creative marketing techniques which encourage persons to purchase your affiliate products.
Start the building process
Lasting freedom from financial stress will come when you find a way to build a passive 'money machine' of your own. Your mission for this month is to learn more about the concept of passive income. You can find several articles on this topic on www.financiallysmartadvice.com and other websites.
Consider different ways in which you can generate passive income. Start by saving and investing as much as possible to build your portfolio income sources. Do you have any talents or ideas that can be packaged into a product that can be sold repeatedly? Look at ready-made business opportunities in network marketing or become an affiliate for someone else's online business.
Don't be afraid to attempt something new in your search for passive income opportunities. Carefully research all options to ensure that they are legitimate, and don't give out sensitive financial information online. Over time, you could build a money machine that gives you the ability to live the life of your dreams.
Cherryl is a money coach, business mentor, and founder of Financially S.M.A.R.T. Services. Her upcoming book The 3 Ms of Money will reveal all the secrets she learned about financial success. Get more advice on money and business matters at www.financiallysmart.org and www.entrepreneursinjamaica.com. Email comments to cherryl@financiallysmartonline.com.
European defensive stocks' haven status in question - Reuters UK
LONDON |
LONDON (Reuters) - Stocks usually perceived as defensive are offering scant protection from Europe's debt crisis as the broader equity market languishes close to 2012 lows, making investors work harder to find shelter from the storm.
Defensive stocks, such as food and healthcare companies, have fallen in tandem with the rest of the market as the euro zone's debt problems remain unresolved against a backdrop of stuttering global growth.
The Euro STOXX 50 .STOXX50E suffered its worst month since August in May, with every sector trading in the red in an indication that none is deemed particularly safe.
"The problem investors have with equities is that they're high risk assets. Even if you buy a high-quality defensive equity, it is still an equity - very sensitive to changes in inflation assumptions, risk assumptions, growth assumptions," said Andrew Lapthorne, chief quantitative analyst at Societe Generale.
Whatever the economic conditions, people need to eat, drink and take medicine, meaning food & beverage .SX3P and healthcare .SXDP tend to perform steadily, and are relied upon for strong earnings and regular dividends even as markets fall.
The sectors, off 3.8 percent and 3.4 percent respectively since May peaks, might have significantly outperformed the Euro STOXX 50, down 6.5 percent over the period, but this offers little comfort to those hoping for positive returns.
The 30-day correlations between the two sectors and the Euro STOXX 50 have surged higher to levels not seen since early November, showing that most of the time a fall in the broader market now leads to weakness in those sectors too.
This chimes with what happened during the financial crisis in 2008, when food & beverage shares shed about 30 percent of their value but still outperformed the broader market.
Utilities .SX6P and telecoms .SXKP, also long held up as safe bets catering to basic consumer needs, are being pressured by worry over policy intervention by euro zone countries desperate to boost their budgets.
These sectors are off 5.6 percent and 4.5 percent, respectively, since the start of May.
GRIM CHARTS
Technical charts add to the grim picture. The recent break below 400 points on the STOXX food & beverages index, both a resistance and support level, means it could test its January lows at 380, said Valerie Gastaldy, head of Paris-based technical analysis firm Day By Day.
The technical outlook for healthcare is also breaking down, with its short-term trend having recently reversed, and its medium-term trend at best flat, she said.
With the charts emitting sell signals in sectors across the market, analysts say investors would do well to focus on individual stocks.
"The choice between cyclicals and defensives is less clear cut than it was in 2011 in the sense that even within cyclicals and within defensives you see quite big differences," Patrick Moonen, senior equity strategist at ING Investment Management, said.
"Going forward, looking at cyclicals as a group but really digging into sectors where earnings momentum is relatively strong - that's a rewarding strategy. The same goes for defensives."
Buying companies with exposure to Asia, which boasts robust growth, is a sound strategy, Moonen argued. He sees opportunities within consumer staples and, to a lesser degree, healthcare.
Nomura, in a strategy note in which it picks out stock ideas "in a world of hurt", identified Greece's Coca Cola Hellenic Bottling Co (HLBr.AT) and Spain's Grifols (GRLS.MC) as among "growth defensive" stocks worth considering.
Highlighting the difficulties money managers face in compiling a sector portfolio, 2012's best performing sector is in cyclical stocks, whose fortunes are often closely aligned with the business cycle.
The auto sector .SXAP, buoyed by demand for cars in the United States and China, jumped 9.6 percent this year as other cyclicals suffered sharp sell-offs, with retailers .SXRP and commodity-related stocks .SXEP .SXPP down 6.9-7.6 percent.
(Editing by Nigel Stephenson)
Money looming even larger over Nov. election - CBS News
(CBS News) WASHINGTON -- President Obama is halfway through a two-day fundraising swing through California.
His trip underlines the importance of money in the 2012 campaign.
It's also being criticized by Republicans who say the president is spending too much time with celebrity Democrats.
The money-raising trip took him to San Francisco and Los Angeles, two towns where he hasn't been a stranger in recent weeks and months, spending plenty of time with the wealthy and famous in the entertainment and tech communities.
But his campaign tweeted Thursday that 98 percent of its donations in May were less than $250.
Either way, it's all about the money.
Mr. Obama got a warm welcome from campaign donors in the Los Angeles gay community Wednesday night, a group he considers crucial to his re-election prospects.
"I could not be prouder of the work we've done on behalf of the LGBT community," Mr. Obama said.
During his speech, he ticked off accomplishments under his watch, such as ending the war in Iraq.
But he also warned the audience about what's ahead during the campaign, and why their donations matter, saying, "You're going to see hundreds of millions of dollars in negative ads, because the other side's not offering anything new."
To build a war chest that would enable him to counter those ads and run his campaign, Mr. Obama is spending two days on the West Coast to raise an expected $5 million.
He will have done 153 fundraisers since formally declaring his candidacy for re-election a little over a year ago - nearly double the number President Bush had done at the same point in 2004.
With the majority of outside super PAC dollars going to Republicans, raising money will be crucially important for Democrats in this election cycle.
In the Wisconsin recall election, unions spearheaded the effort to unseat Gov. Scott Walker after he successfully limited their power. But the union effort to get out the vote was overcome by the GOP advantage in money and TV advertising. Walker raised $30 million. His challenger, Milwaukee Mayor Tom Barrett, raised only $4 million.
Rep. Steve Israel, D-N.Y., chair of the Democrats' campaign committee, warned that the Wisconsin results should be "a wake-up call" that the party needs money for TV ads to compete with the super PACs.
A California political power broker once put it this way: "Money is the mothers' milk of politics."
Four years ago, candidate Obama outspent his Republican opponent, Sen. John McCain by more than two-to-one - $730 million to $333 million.
To see Bill Plante's report, click on the video in the player above.
World stocks jump after China rate cut - Reuters India
LONDON |
LONDON (Reuters) - World shares hit their highest level in a week on Thursday and the euro jumped after China cut interest rates for the first time in four years, boosting speculation the United States might also embark on a monetary stimulus.
The 25 basis point cut in China's benchmark interest rates sent U.S. stock index futures sharply higher, pushed the euro above $1.26 to the dollar and sent Brent crude oil back above $100 a barrel.
"A cut of 25 basis points is not massive by any means, but it does assist and signals that central banks are there and looking to support the economy when needed," said Keith Bowman, equity analyst at Hargreaves Lansdown.
Since last week's U.S. job data, there has been rising speculation of more stimulus measures from global central banks, though the European Central Bank had dashed hopes that it would take any near-term action on Wednesday.
The improved appetite for riskier assets has also been linked to reports that German and EU officials are working urgently on a plan to fix Spain's troubled banking system and moving closer to outlining a broad plan to deal with Europe's crisis.
Much now depends on what Fed Chairman Ben Bernanke will say in testimony to a congressional committee later on Thursday.
The case for action by the Fed was laid out by the central bank's second most senior official, Janet Yellen, in a speech on Wednesday that highlighted the risks to the economic recovery from ongoing housing problems, a weak job market and worsening financial conditions.
The speculation that some form of central bank easing is likely lifted the MSCI world equity index 0.5 percent to 301.63 points, extending its gains to about 3 percent this week and putting it on track for the best weekly performance since late January.
The FTSE Eurofirst 300 index of top European shares was up 1.2 percent at 985.94.
"China's move should help support the stocks rally that we have seen in the market over the past days. But the whole European scenario still overhangs," Bowman said.
The euro hit a high of $1.2601, its highest since May 28 and about 2.5 percent above a two-year low of $1.2288 hit last week.
EUROPE GEARS UP
Sentiment in risk asset markets had been improving before the Chinese rate cut as reports indicated that Germany was working more urgently with EU officials to tackle Spain's banking crisis and maybe softening its opposition to other moves to share responsibility for the region's huge mountain of debt.
German Chancellor Angela Merkel has tried to play down expectations that a master plan for the future of Europe would emerge at a leaders summit scheduled for the end of the month but said it would come up with an agenda to integrate further.
"Details of the plan remain unknown. But the Chancellor said she is in favour of a two-speed Europe, namely, not forcing, but giving everybody the option to participate," said Evelyn Herrmann, European Economist at BNP Paribas.
The better tone in the markets allowed Spain to sell 2.1 billion euros of fresh debt on Thursday, just days after the country's Treasury minister warned that access to the credit markets was under threat.
The average yield for the 10-year bond at the auction rose to 6.044 percent from 5.743 percent when the bond was last sold on April 19, though the value of the bids was 3.3 times the amount on offer, up from 2.4 times at the previous sale.
"It's a strong auction, no doubt helped by the relatively small size," said Peter Chatwell, rate strategist at Credit Agricole.
Yields initially fell 10 basis points on Spain's existing 10-year bonds after the auction to 6.2 percent.
But a day after the ECB indicated it was not planning any near-term action to help Europe's struggling economy, investors continued to seek refuge in the relative security of French debt.
The yield on France's benchmark 10-year bond fell to a record low of 2.46 percent at its auction of new bonds.
Commodity markets followed the euro and shares higher on the Chinese rate cut announcement, which will increase hopes of greater demand for oil and other industrial materials.
Brent crude, which had hit a low of $99.62 a barrel earlier, rose 63 cents to $101.25. U.S. crude was trading up about $1 a barrel at $86.
Spot gold was up 0.3 percent at $1,625.36 an ounce.
(Additional reporting by Anirban Nag; Editing by Will Waterman)
Scout raises money for football helmets - jdnews.com
MOREHEAD CITY — The Morehead City Middle School football team will return to the field in the fall wearing new helmets courtesy of an Eagle Scout project that is tackling a need at the school and helping to keep student athletes safe.
Daniel Fischler Jr., who turns 14 and finishes eighth grade on Friday, has one more task to complete for his middle school before he heads on to his freshman year in high school.
He is currently working on his Eagle Scout service project and is raising funds to pay for 50 new football helmets for the school, a cost of about $85 per helmet.
“Four thousand dollars is a lot of money for a middle school,” he said, aware of the tight school budget.
Daniel said he considered various needs, including funds for team uniforms, but as he talked to the coach and did a bit more research, he found that new helmets were more than just a need.
“They aren’t just needed; they have to have those helmets,” said Daniel, who played on the Minutemen football team.
The National Athletic Equipment Reconditioners Association announced last year that it will no longer recondition or recertify any football helmet 10 years old or older effective with reconditioning for the 2012 football season.
MCMS Athletic Director Jasa Ellis said that the school’s helmets were reconditioned before last season, but all but one of the old helmets are 10 years or older, making them now obsolete.
“This is a great Eagle Scout project and really helping out the athletic department,” Ellis said.
The new helmets have arrived, but the bill is due in the fall.
To raise the money, Daniel has been spreading the word around the community about the project and made presentations to several Rotary Clubs. And he’s been organizing a student-run indoor/outdoor yard sale to be held June 16 from 7 a.m. to 2 p.m. in the parking lot and gymnasium at Morehead City Middle School.
All proceeds will go to the Morehead City Middle School Booster Club for the purchase of the new helmets.
Patrick Conneely, who owns the Chick-fil-A franchise in Morehead City with his wife Laura, joined Daniel after school Tuesday to promote the project as parents were picking up students. Those who stopped by the Morehead Chick-fil-A that day and mentioned the school had 20 percent of their meal purchase go to the project.
Conneely said he was impressed with the project and that it’s important to stand behind youth stepping up to help the community. And as a former football player for the UNC Tar Heels, he said it’s a project that recognizes the importance of safety on the playing field.
“I’m passionate about kids and their safety,” he said.
Daniel said Eagle Scout projects are designed to leave a lasting impact on the community.
“I wanted to do something to make a difference,” he said.
At the same time, he’s received a lasting lesson in leadership.
He said that throughout the project he’s received support from his family, the school, fellow scouts with Troop 130 and his classmates.
“It doesn’t happen by itself,” Daniel said. “You can’t do it all alone; you have to ask for help.”
Anyone who wants to help with the project can attend the yard sale, donate items for the sale or make a monetary donation.
Monetary donations can be made by check payable to MCMS Athletic Booster Club, with “helmet drive” on the memo line. Mail to: Daniel Fischler at 2102 Melodie Lane, Morehead City, NC 28557.
For more information, email dgfisch@gmail.com.
Contact Daily News reporter Jannette Pippin at 910-382-2557 or jpippin@freedomenc.com.
US STOCKS-Futures jump after China's surprise rate cut - Reuters UK
* China interest rate cut boosts risk assets
* Bernanke to testify before congressional committee
* Hedge funds take a hit in May
* Futures up: S&P 10 pts, Dow 63 pt, Nasdaq 18.50 pts
By Edward Krudy
NEW YORK, June 7 (Reuters) - U.S. stocks looked set to rally on Thursday after the Chinese central bank cut bank lending and deposit rates, fueling hopes of coordinated action to aid a flagging global economy.
The surprise move by China's central bank to cut benchmark interest rates by 25 basis points to shore up slackening economic growth comes a day after hopes of more stimulus by central banks drove U.S. stock indexes up more than 2 percent in a sharp turnaround from recent heavy losses.
The rate cut in the world's No. 2 economy had a sudden and dramatic impact on U.S. companies linked to China's commodity-hungry industrial output. U.S. Steel Corp jumped 3.1 percent in premarket trading, and miner Freeport-McMoRan Copper & Gold Inc jumped 2.4 percent.
"It's more indication that interest rates are crumbling around the world, which should help stabilize economic activity going forward and should be positive for equities," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "The move ... certainly indicates economies have slowed, but cheaper money should help stabilize the global economy."
Later Thursday, Federal Reserve Chairman Ben Bernanke will testify before a congressional committee. Investors will parse his words closely after his No. 2, Janet Yellen, said the Fed was ready to support to the fragile economy.
The number of Americans lining up for new jobless benefits fell last week for the first time since April, a reminder that the wounded labor market is still slowly healing.
S&P 500 futures rose 10 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 63 points, and Nasdaq 100 futures rose 18.50 points.
U.S. stocks jumped more than 2 percent on Wednesday, giving the S&P 500 its best day since December, as talk of a rescue of Spain's troubled banks and hopes for more monetary stimulus sparked a rebound from recent selling.
After the S&P 500's 6-percent fall in May, and with the index below its 200-day moving average, the market was ripe for a rebound, analysts said. The index has reversed sharply above that closely watched level.
European stocks jumped 1.3 percent in morning trade, adding to the previous session's sharp rally, following the China rate cut and as investors bet policymakers in Europe could soon unveil measures to prop up ailing Spanish banks.
Even though Spain has not yet requested assistance and is resisting being placed under international supervision, Germany and European Union officials are urgently exploring ways to rescue the country's banking sector, sources said.
Spain met strong demand when it sold 2.1 billion euros ($2.62 billion) of medium-term and long-term bonds, passing a key test of its ability to tap investors after a minister said earlier this week the country was being cut off from credit markets.
Green Mountain Coffee Roasters Inc is in talks with pharmaceutical companies about developing drinks for its Keurig brewers that it hopes could aid the health of consumers and company margins, a senior executive said.
Chesapeake Energy Corp need not delay its scheduled annual meeting on Friday to allow shareholders more time to investigate the financial dealings of the natural gas company's embattled chief executive, Aubrey McClendon, a federal judge ruled.
May's stock market rout dealt a blow to many on Wall Street including several big hedge fund stars whose bets on prominent U.S. companies looked badly timed.
Oracle Corp launched a new suite of cloud-based products on Wednesday to try to catch up with smaller but nimbler vendors, such as Salesforce.com Inc, in the business of hosting and distributing software via the Internet. The stock rose 1 percent to $27.80 premarket in very light trading. (Additional Reporting By Rodrigo Campos; Editing by Chizu Nomiyama and Padraic Cassidy)
Airport fuel stocks back to normal - The Guardian
Production problems at its supplier meant the airport temporarily did not have enough aviation fuel on Wednesday.
Fears were voiced that it could prompt a string of flight cancellations and delays if stocks were not replenished.
The supply from the Essar refinery near Ellesmere Port was interrupted though for just 15 minutes after running out at 5.15pm.
A total of three million litres of fuel was supplied overnight to the airport's fuel storage facility and meant operations returned to normal at 8.30am, the airport said.
Thirteen flights were delayed because of the glitch, with 12 waiting for less than 30 minutes, while 17 departure flights also made a short stop at other UK airports to top up fuel before completing the onward journey.
Chris Formby, operations director at Manchester Airport, said: "Although we initially warned about the potential for some cancellations and diversions based on the information from the fuel companies yesterday afternoon, disruption to passengers has been kept to an absolute minimum thanks to the airlines and the Essar refinery.
"On behalf of the thousands of passengers travelling today and last night, we would like to thank our airline partners for the huge effort they put into contingency planning to mitigate the highly unusual problem with the fuel supply.
"Although it was only a relatively small number of people affected, we are also grateful to those passengers who were delayed this morning for their patience and understanding." He added a review into the incident would take place.
The airport uses around three million litres of aviation fuel per day. This is the equivalent of 79 road tankers, which carry approximately 38,000 litres per vehicle. The fuel supply comes from the refinery via a pipeline which is capable of pumping 250,000 litres an hour.
Copyright (c) Press Association Ltd. 2012, All Rights Reserved.
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