Friday, August 18, 2017

Do You Have an Independent Contractor or an Employee?

Do You Have an Independent Contractor or an Employee?

Most small business owners like to hire independent contractors to perform services. The benefits of using an independent contractor as opposed to an employee is simply the small business owner doesn’t have to provide the additional benefits to the independent contractor that they would be legally obligated to provide the employee. They will pay the independent contractor for the work they have done and that is it.

However, using an independent contractor too often may change the relationship between the contractor and the business to the point where you consider them an employee. This would negate the savings sought by using an independent contractor and can result in penalties for not withholding the payroll taxes that the IRS requires held for all employees.

Luckily, there are three tests to help small businesses determine whether an independent contractor is an employee or not.

The first test deals with the behavior control the small business owner has over the independent contractor, what work that contractor does, and how they perform that work. The small business is more likely to evaluate the work the employee does throughout the entire process until completion. Independent contractors also tend to know how to do the job they are hire for and can complete it with little to no instruction.

The financial control over the independent contractor comes next. Independent contractors are in business for themselves and therefore do not exclusively work for one business. They spend funds to seek out clients and acquire the supplies and materials necessary to complete the work for which you hired them. In addition, independent contractors commonly receive a one-time payment when they provide an invoice to the small business for the work they have done while employees usually receive regular wages for the time they work.

The final test considers the type of relationship between the small business and the independent contractor. Small business owners usually hire independent contractors to complete a one-time job that while it helps the business to operate, it is not the main operation of the business. Moreover, unlike employees, independent contractors normally have to service their own benefits, such as health insurance or retirement savings.

Use these tests to help you determine whether you have hired an independent contractor or an employee. This will have you maintain control over your small business’s expenses and prevent you from getting into payroll tax trouble with the IRS.

Thursday, August 17, 2017

Five Habits to Change before you get out of Debt

Five Habits to Change before you get out of Debt

Getting out of debt is a challenge. Staying out of debt is a commitment. Sure, you can pay off your old debt and get your financial life back in order, but what will keep you from going down that path again? To achieve financial stability, you must rid yourself of those bad habits that originally got you overwhelmed with debt. Here, we will discuss five habits you must change before you can get out of debt and stay out of debt.

Living Beyond Your Means

Regardless of your employment, you only earn a set amount of income each month. This limits the amount of money you have available for living expenses. However, if you use credit cards and loans to pay for wants and needs, you are living beyond your means. While you can exploit these resources for a time, eventually you will paint yourself into a corner and your debt will begin to increase. You must put an end to spending in excess of your earnings to keep your debt levels under control. Believe me, you can survive without credit cards.

Use Credit Cards for Emergency Purposes Only.

Using credit cards to pay bills and buy groceries will surely put pressure on your finances. You will end up paying more for things you need to live comfortably, provided you make timely payments. Live on your income, budget wisely, and keep your cards in your wallet or purse.

Using Credit Instead of Cash

Using a credit card is easy. Paying with cash is smart. Don't fool yourself with the "buy it now, pay for it later" mindset brought about by the ease of credit card usage. Why wait to pay if you have the money handy? What makes you think you'll really want to pay for it later? Again, keep the cards in your wallet and opt for cash.

Paying Debt with Debt

If you've accumulated debt already and are looking to use your credit cards or take out a loan to take care of it, that’s a bad idea. Doing such a thing makes no sense. Transferring balances from one debt to another provides no relief. It just enhances it. Whenever you use a credit card or loan to pay a debt, you’ll incur transfer fees and origination fees. These additional fees only make your debt mountain higher. Make a budget with your income and set some cash aside to decrease your debt the old-fashioned way.

Pay Debts on Time

Make this habit a part of whom you are. Paying your bills on time saves money. By making payments late, you incur fees you probably didn't even know existed. The credit will add late charges and possibly increase your interest rate. This act can also encourage other creditors to increase your interest rate. Do everything in your power to make sure creditors receive the payments due on time.

By changing your spending habits and managing your finances better, you have a chance to get out, and stay out, of the debt hole. Live within your means, create a budget, and use credit only when it's necessary. Also, remember that if you can't afford it now, you probably don't need it. Make these simple changes and take control of your financial life.

Five Ways to Improve your Credit Score

Credit touches almost every facet of a person's financial life. Unfortunately, some people haven't made the best use of credit and as a result, have a less than spectacular credit score. With a poor credit score, a person may lose out of certain types of employment or housing. They will also be subject to receiving higher interest rates on loans, if they are lucky enough to qualify for a loan at all. If you find yourself with a poor credit score, there are steps you can take to help improve it. Here are a few.

Pay Bills before They're Due

Having the habit of waiting until the last minute to pay your bills only increases the likelihood of you being late. To avoid making a past due payment, simply pay your bills well before the due date. By practicing this habit, you will never have to worry about being late ever again. No late reports of payment to the credit agencies keep your credit score from enduring any unnecessary hits.

Mix up Credit and Use it Wisely

If you have one credit card, great. Use it responsibly. However, having a nice mixture of credit on your credit report can do wonders for your score. A mixture of credit doesn't mean having a department store card, a gas card, and a major credit card. It refers to possessing both revolving accounts and installment accounts. Credit cards fall in the revolving account category. Loans, such as those for a home or car, make up the installment account category. For building a good credit score, it's good to have at least one of each.

Stay Away from "Max"

With your credit cards, using them responsibly means keeping the balances they carry low. Try to use only 30% of your available credit limit. Never "max out" your credit cards. This will prove disastrous to your credit score. High credit card balances scare away potential lenders. If anything were to happen to your income, the last thing you would worry about paying would be your high credit card bills. This leaves them vulnerable to default. Stay on top of your credit card bills by keeping the balances down and paying more than the minimum balance due if you can.

The Older, The Better

The older your credit history, the better your score will be. If you have an older credit card that you haven't used in a while, pull it out and put it to work. This gives the impression that you have been using credit wisely for a long period. Positive usage of an old, active account will provide your credit score with a nice little boost.

Check your Credit Report

Finally, always be aware of what's on your credit report. It's good to obtain at least one copy annually. Make sure that it shows no errors, such as accounts that don't belong to you or incorrect reporting of account information. If you notice any errors on your credit report, begin to dispute the information as soon as possible. Also, when disputing, make sure to keep accurate records of any communication between yourself and the credit reporting agencies. Removing errors from your credit report will help improve your credit score. You can get one free copy of your credit report per year. Go to for details.

Be proactive when working to improve your credit score. Paying bills responsibly and using credit wisely will afford the greatest benefits to your credit score. Doing these things over time will only compound the positive effects. Start today and before you know it, your credit score will begin to climb.

Monday, August 14, 2017

6 Stocks of Companies Started by Black Professionals

While doing some research for a book I'm trying to write, I discovered something that I'm certain very few people, especially those in the black community, know about.

Currently, there are 6 companies started by Black professionals that are publicly traded companies. 

That's right. You can buy shares of stock in these companies through your broker as they are listed on either the NASDAQ or the NYSE MKT LLC, formerly the American Stock Exchange (AMEX).

While I felt it necessary to share this information in hopes that those of you that are investors will look into the possibility of adding these companies to your investment portfolio, this is in no way an endorsement of their stock offerings. As with any investment, it is up to you to determine if adding any of these stocks to your portfolio fits your goals as far as your investments are concerned.

At the same time, I'm big on supporting Black-owned businesses and while these companies can't really be considered to be Black-owned since they are publicly traded, investing in these companies supports what the original founders of these companies intended when they decided to pursue IPOs for these companies.

During my research, I also found several companies that have stock issues that can be purchased on the Over-the-Counter Bulletin Board (OTCBB). Stocks listed on the OTCBB are generally considered very risky and I have decided to omit those companies at this time.

Here are those 6 companies that are publicly traded:
  1. Carver Bancorp Inc. (CARV - NASDAQ)
  2. Broadway Financial Corp. (BYFC - NASDAQ) doing business as Broadway Federal Bank
  3. RLJ Entertainment (RLJE - NASDAQ)
  4. RLJ Lodging Trust (RLJ - NYSE MKT LLC)
  5. American Shared Hospital Services (AMS - NYSE MKT LLC)
  6. Radio One (UONEK - NASDAQ)

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