Can a small business really create a plan on a postcard?

“Yes! An effective small business plan that covers no more than a postcard is more than possible, it’s practical and effective”

=> Business Plan Australia

America’s Millionaire Capitals

Where do this country’s most prosperous citizens hang out? How much money do they have? President Obama wants them to pay a bit more in taxes. But how much are they coughing up now?

Answers to these questions can be extracted from a little-utilized IRS database of income tax statistics. The file sorts tax returns by income range and by zip code.

Wary of releasing any data that might reveal something about individual taxpayers, the IRS slices its statistics into broad ranges. In this data set the top tier of income is $200,000 and up. Except, perhaps, to a politician looking for revenue increases, this scarcely qualifies a taxpayer as wealthy.

So I put a finer sieve on the database, zeroing in on communities where the average income within the 200K-and-up set is at least $1 million.

Result: a set of 130,400 tax returns from 64 hot spots of prosperity – suburbs, islands, parts of cities. The list of ritzy places ranges from Fisher Island, an enclave of yacht owners off Miami, to the Tribeca area of Manhattan, where wage slaves with seven-figure salaries have their chic loft apartments.

Ranked by income, the list of rich places starts with Fisher Island, at $3.2 million per high-bracket taxpayer. Then come Purchase, N.Y. at $2.2 million; two more New York City suburbs, New Vernon and Alpine, N.J., both at $2.1 million, and Atherton, Calif. at $1.9 million.

Residences on Fisher consist for the most part of ritzy condos with very stiff maintenance fees. You can’t get on the island except by boat. Mel Gibson and Oprah Winfrey have had places there.

I did something more with the data that the IRS doesn’t do: estimate net worths, using figures on dividend, interest and business income as starting points.

In estimated net worth, the richest five communities are: Fisher Island, at $57 million per high-bracket return; Alpine, at $28 million; Medina, at $26 million; Palm Beach, Fla., at $23 million, and the King’s Point/Great Neck area on Long Island, at $22 million.

The recent stock market swoon did some damage to net worths, but not as much as you might think. The moneyed set in this country hold a lot of bonds, too, and bonds have done well this year.

Where do the rich get their income? Just under half of the money coming in is from working: salaries, pensions, Social Security, IRA payouts. The upper-bracket folk in the 64 rich hot spots take in 52% of their income from property: stocks, bonds, real estate, oil wells and businesses.

For the average American taxpayer, property income is only 17% of the pie.

The fraction of income from property peaks at 85% for Fisher Island. Property accounts for 75% or more of income in two other Florida communities, Boca Raton and Key Largo, and in Charlottesville. It hits bottom in fast-paced New York. Tribecans get only 25% of their income from investments.

Tribeca, in other words, is for up-and-comers. Fisher Island is for people who made it a long time ago and are sitting on fat brokerage accounts.

No. 5 – Kings Point, N.Y.

No. 4 – Palm Beach, Fla.

No. 3 – Medina, Wash.

No. 2 – Alpine, N.J.

No. 1 – Fisher Island, Fla.

By William Baldwin, Forbes.com

Click here to see more of America’s Millionaire Capitals.

Proceed now to => Corporate Solutions

Can a small business really create a plan on a postcard?

“Yes! An effective small business plan that covers no more than a postcard is more than possible, it’s practical and effective”

=> Business Plan Australia

5 Easy Steps to Becoming a Millionaire

Who wouldn’t want to be worth a million dollars? Many of us dream of achieving this goal, more often than not for the sake of the freedom financial stability would bring. So how can we get there?

The answers are actually much easier than you might expect. Here are several easy steps to get you into the millionaires’ club. (With a little discipline and the help of some powerful savings vehicles, anyone can hit this mark.)

1. Live Off One Income

One of the advantages of having a life partner is the potential to pull in two incomes. If you are able, consider structuring your set expenses based on only one income, and save what comes in from the other income. Doing so strengthens your financial position in two ways: In case of an emergency or if one partner loses their job, you will not only have less set expenses to cover, but you will also have built up your net worth as a safety measure.

2. Only Marry Once

According to “The Millionaire Next Door” by Thomas J. Stanley, Ph.D and William D. Danko, Ph.D, the average millionaire is married with three children. The wives of these millionaires are good budgeters and most often described as even more frugal than their husbands. Interestingly, according to Stanley and Danko’s survey, half of these wives do no work outside the home and of those who do, they are most likely teachers.

One upside of only marrying once is avoiding the costs of divorce and of subsequent weddings. The cost of a divorce depends on many factors including income, attorney fees, court fees, and the assets a couple has and how they are divided. The average wedding cost in the United States in 2010, according to The Wedding Report.com, was $24,070.

3. Put Your Money in Appreciating Assets

According to Stanley and Danko, the millionaires in their survey invested nearly 20% of their realized household income each year. Nearly 20% of the household’s wealth is held in “transaction securities such as publicly traded stocks and mutual funds” and the millionaires tended to rarely sell their equities. Only a very small number of the millionaires surveyed had ever leased a car; few even drove the current year model. Half of those surveyed had lived in their homes for more than 20 years, which, as the authors point out, means they have likely enjoyed “significant increases in the value of their homes.”

The end result? These people put a financial priority on assets that will make them money, from their homes to their businesses.

4. Choose the Right Career

According to The Millionaire Next Door, “self-employed people make up less than 20% of the workers in America but account for two-thirds of the millionaires.” The book goes on to list an average of 45 to 55 hours spent working per week, so by no means is this the self-employed fantasy of playing golf while your business grows.

The idea of the “right” career can encompass a myriad of factors. Ideally, this would be a career you enjoy, otherwise you likely won’t be putting in the dedication required to be successful. The right career would also coincide with overall working trends, or at least not work directly against them. For example, starting a career in typewriter manufacturing may be something you are passionate about, but it would likely suffer due to the current technological trends.

5. Don’t Live the Millionaire Lifestyle

Warren Buffett’s frugal lifestyle (especially relative to his net worth) is the go-to example for this point. The average value of the surveyed millionaires’ homes was $320,000. The bottom line is, those who spend their money on non-appreciating assets cannot put that same money in an asset that will net them a return and increase their wealth. If it is important to you to build your financial worth, stop spending it on new cars, toys and clothes. (The Oracle of Omaha has a net worth in the billions, but his lifestyle is not as rich as you may think.)

The Bottom Line

Becoming a millionaire is easier than ever. While this is a dream that will take work and discipline to achieve, it isn’t as far out of reach as you might think. Be smart with your money and before you know it, you’ll be able to count yourself among the world’s wealthier citizens.

Erin Joyce, Investopedia.com

Proceed now to => Corporate Solutions