Ask me anything – 5th edition

By glblguy

Each week I give the readers of Gather Little by Little a chance to ask me anything. The only real rule is that I can decline to answer. I’ll do my best to answer as many questions as I can though. Have a question you would like answered? Just drop me a line or leave a comment!

Alisa writes and asks:

I wanted to know of additional ways to supplement my current income, which isn’t
very much. Thank you.

Alisa, there are far more ways than I could ever possibly list here. The trick is to focus on what you are good at. Do you have any hobbies? Think of ways that you might be able to monetize your hobby. Are you an expert in something? If so, write and eBook, start consulting or even start a blog on the topic. Here are a few links to help get the creative juices flowing:

Hope this help!

Steve writes:

JJust like everybody else, my 401k is taking a beating. I have about 90k, I’m 39 and plan to retire in about 15yrs. My 401k is split 50/50, half in Government STIF and the other half in S&P 500. Would it be a good idea to move it all into the government fund or just ride it out? Any input is appreciated.

Steve, I won’t mislead you, investing is not one of my strong points. The good news is that when it comes to investing, all of my experience is is around 401k programs. Others will disagree, I’m sure but you are still early enough in your 401k and career to continue investing in more fast growth (i.e. higher risk) funds.

You are the same age I am as well, and that is what I continue to do. Right now we’re all taking a beating, but believe that if we continue to hold and and invest, we’ll reap the rewards later once the market recovers.

I have all of my investments in higher risk funds and nothing in conservative or government funds. Right now I’m buying low to hopefully sell high as I get closer to retirement.

Readers, what’s your perspective on Steve’s question? Anyone disagree with my approach?

Jill wrote and asked:

Quick question for you.  We have saved 3 months worth of monthly expenses in our
emergency fund ($15,000).  Where do you recommend that we keep that (mutual
funds, money market, ING)?

I would keep it somewhere that is easily accessible but separate from your normal everyday accounts. Remember, an emergency fund is just that for emergencies. It’s not an investment account nor should you plan to reap rewards from it. I keep mine in ING Direct. I have $1000.00 in an ING Checking account with a debit card associated and the rest in an ING Savings account.

The important concept of an emergency fund is for it to be available when you have an emergency (i.e. car breaks down, hot water heater goes out, etc.). It doesn’t really matter where you keep it, as long as it’s available.

Let us know what you decide!

Dave wrote and asked:

I was wondering if you could describe how you created your LLC and how it
relates to your websites. I have been researching LLCs online and it looks like
there are several sites that take care of most of the forms for you for a fee.
Is this the route you took?

Also, I am curious is to how you handle all the registration information for
your websites having an LLC. Did you register your domain and hosting
information under your LLC? For the financial part, did you open a separate bank
account for your LLC? If so, why did you choose this route?

I read your article about starting an online store and really liked it. It left
me wanting more though. I have been doing a lot of research and still not clear
on some things. I guess what I am not clear on is where you draw the line
between your personal information and your LLC for which services.

Sure Dave, I’d be more than glad to. I have a friend that had previously incorporated in North Carolina and he shared the two required forms with me and the address to send them too (along with the incorporation fee of $125.00). This information can be retrieved from the North Carolina Secretary of State’s website. Different states have different requirements, so you’ll need to check your states website and do some research to determine how to incorporate and what your states fees are.

As you said, you can also use online services such as Mycorporation or incorporate.com. These companies will do the paperwork for you, for a fee.

Yes, I register my domains and hosting under my LLC. I haven’t converted all of them over yet (some are still under my name), but I’m working on it.

I don’t have a business account, but may consider it next year. I’m currently trying to find a local accountant to work with to manage my business finances for me next year. I’d like to get their perspective on whether a business account is needed or not. Right now, I just have an ING Direct account dedicated to my LLC.

If you would like help with building online stores, drop me a line. I provide consulting services in this area and can either help you get set-up or do everything for you.

Where do the draw the line, well at this point everything goes through my LLC. I use my name as the owner of Empty Cabin Media, but run all of my work, income, expenses, etc. through Empty Cabin Media, LLC (warning, still very much work in progress).

Dave, hope this answers your questions and if you have more, let me know.

Photo by: greefus groinks


6 Responses (including trackbacks) to “Ask me anything – 5th edition”

  1. Patrick Says:

    Great tips, Gibble. I;m doing the same thing with my 401(k) plan – still contributing. I haven’t changed my allocation. At this point I’m just hoping to buy more shares at lower prices. I have 30 years to go, so I’m hoping I am able to grow my income by the time I need to withdraw the funds.

    As for the LLC, I set one up as well. I separated my business income with a business checking and business savings account. I also have business credit cards for my business expenses. I just find it all easier to manage that way.

  2. MyJourney Says:

    @Steve,

    You are 39 and plan on retiring in 15 years (i.e. 54) and you are discussing the state of your 401(k) accounts…well as I am sure you are already aware, you can’t start invading those accounts until 59 and a half. This is not a hard and fast rule…there are distribution options known as hardship distribution and 72t equal payment distributions.
    Just something to think about!

    @Dave,
    I have an affiliate link on my site (I am pretty sure GLBL may have it here somewhere too) where MyCorporation is doing the filing work for FREE until 12/5….doesn’t give you much time to think but it may be worth just signing up.

    @GBLB,
    Shame on you! No business checking and savings? The main advantage of having an LLC is the limited liability (i.e. LIMITED LIABILITY COMPANY!) however this limited liability can be pierced if you act one in the same as the company.

    GO SET UP A FREE BUSINESS CHECKING SOMEWHERE!

  3. David Says:

    LLC’s are not foolproof by any means at all, and if you are a sole proprietor you have no need for one. In fact, you can end up paying more in taxes if you are not careful. You also don’t even need separate checking – I have never written a business checks in over 2 years of doing this – all expenses go on my Amex card. When you are a sole proprietor, all your money is yours – it doesn’t matter what you do with it. Keep good records and pay your estimated quarterlies and chances are you will be fine without forming an LLC. So before you set one up, be sure to talk to a lawyer and a tax person as well. Also, read the book “Self-employed Tax Solutions” – it’s fantastic.

  4. Tight Fisted Miser Says:

    I’m a little late to this discussion as David has pretty much echoed my thoughts on reading this. I don’t see much benefit from setting up an LLC. I also haven’t bothered to open a business checking account. It is pretty simple to keep track of all my business expenses and income at this point without having a separate account. If I were in a business where I had lots of different income and expenses I would open a business checking account but for now I don’t see any need.

  5. battery-stores Says:

    oh, Great articl! I will keep this post.

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