As the Owner of your Own Business, what kind of Salary, Compensation and Benefits do you Owe Yourself?

If you are a small businessman with your own 10-employee business, you certainly know how to determine what the contribution of each one of your employees is worth. What about the salary, compensation that you pay yourself every month out of the revenues that come into the business? Executive compensation has been an emotional topic of discussion for quite a while. Everyone clearly hates how top CEOs just pay themselves millions and give themselves salary hikes each year. What are you supposed to do as the owner of the small business? How do you know what you're worth, how much you pay yourself and what would be fair for your business? Only about 60% of American small businesses have any kind of proper written philosophy over what the company is to pay the owner. Everyone else just does whatever feels right at the moment.

Often, the salary that you pay yourself is whatever is left over after all the suppliers and employees and expenses are paid for. But if there is enough to go around that you could raise it or lower it as you wished, there are a few things you need to consider. A good way to put a price on the contribution you make to your company would be to think about what an independent investor in your company would think about what you bring to the table and would he be comfortable with what you get paid. A good way to estimate want your contributions are worth would be to list out all the important things you do for the company one after the other and then pay each kind of responsibility you carry out whatever the going rate is in the market.

But even if you can arrive a figure once you list everything out that only has to be the theoretical amount you get paid. Since seeing the company grow is a kind of compensation in itself, for going a bit of salary, compensation or benefits for the betterment of the company may not be such a bad idea. Plowing back profits into the company can be a form of investing in your own future and the future of the company that will reap you better profits and time. Owners of startup businesses usually accept next to nothing in compensation for the first few years until the business finds its feet.

You could also use industry benchmarks to determine for yourself what your job might be worth. To know what other business owners in your position make can be a great indication. You could just go on the Internet and look for what kind of salary, compensation and benefits people in your position make. You'll find free compensation figures at lots of websites. But in these things, you usually don't get very good information for free. The best estimates cost thousands of dollars. Whichever estimate you choose, you need to take with a pinch of salt.

In general, before you make your mind up about what you owe yourself, you need to consider the general economic climate at the time, the size of the company, the complexity of the business, educational qualifications and the kind of industry you work in.

When Graduate Jobs in America Involve a Broom, a Bartender's License and an Apron

There's something about America that feels a lot like India these days. In India, you're often likely to find that in the cities, every low-paid clerk at the grocery store, the cab drivers, the office gophers and construction workers, hold graduate and postgraduate degrees. Back in America today, you're likely to find lots of similar stories. You'll find someone with an MA in classical languages stocking shelves at Target; you'll find that your bartender has a degree in psychology; and you'll find that that bright political science from down the street works a phone for a little money. These are the new graduate jobs. These are the jobs that young people take out student loans that they pay back for the rest of their lives for.

When you hear that the recession is over and that the economy is back on track, don't believe it. One of the worst things the recession has done has been to take hope away from today's generation. And education was always supposed to be one's ticket to a better life. Today, with people with graduate school under their belt flipping burgers and scooping french fries at McDonald's, one wonders what people with only high school or a year of college are doing.

The really lucky ones do find suitable graduate jobs; but they find that those jobs pay sharply lower salaries then they would have three years ago, before the recession. On average, the starting salary of a young person last year with a four-year degree under his belt, was $27,000. That's $3000 less than what it used to be before the recession. And this is a period of time that prices have risen quite spectacularly. So if you think about it, that's actually a $5,000 salary cut when you adjust for inflation.

When you hear that unemployment around the country is at 9% or 10%, does that sound truly alarming to you? How does 45% sound? That's the unemployment figure among new graduates from last year. It used to be before the recession, that only 10% of those who graduated with a four-year degree had trouble finding a job right away.

Of course, not all graduate degrees are the same. When it comes to finding graduate jobs - or jobs that actually require a graduate degree (unlike the aforementioned jobs tending bar or stocking shelves at Target), young people who have degrees in teaching or engineering are more likely to find a job today. Young people who have a degree in political science or the classical languages are the least likely to find graduate jobs.

People who suffer this way react often by resorting to further education with a vengeance. They go back to school trying to get a PhD or something. What could they do? It's their only shot.

Selling Gold - the New National Pastime

What kinds of treasures lie in your attic? To families across the country, digging out poorly-used and very old silver items from storage and bits of broken gold jewelry from deep in some drawer are becoming quite a profitable pastime. The price of gold and silver have been soaring on the backs of vigorous investing activity for quite a while now; and people are beginning to realize that this could be a great time to bring long forgotten pieces of precious metal out in the open. As people begin to hear the news of how they are in the middle of a rare opportunity to turn forgotten scraps of precious metal into cash, with gold and silver prices at record highs, they have taken to everything short of digging out their fillings to cash in. Selling gold has become the new national pastime.

The price of gold jumped up 50% in the first quarter of this year alone. It's the highest it's been since the 80s. And jewelers of every description have begun to change the recipes they use for their designs. Gold, long the mainstay of the wedding ring, is beginning to give way to silver. In some cases, jewelers are trying to construct rings almost entirely without metal - mostly with precious stones like emeralds. As the marriage season picks up steam, even Indian weddings, long dependent on the luster of gold to make things look classy enough, are changing their ways.

With everyone getting in on the act, selling gold and silver, one of the first kinds of business to benefit has been the pawn shop. Corporate-owned businesses like First Cash Financial and EZCorp have been doing spectacularly well. They've seen growth that's about 50% higher than even a couple of months ago, with customers and bringing in every scrap of gold and silver they can lay their hands on.

Investors who wish to get in on the precious metals are in many cases worried about how they've missed the boat with gold. At $1600 a troy ounce, this isn't any market for investors to be getting into for the first time. It's for investors who have already bought in and who wish to be selling gold to cash out. Silver, at about $50 a troy ounce is priced exactly right for those who may wish to make a killing. Silver has never been really considered a precious metal; it is not a base metal, of course; but it hasn't quite been in the same leagues as gold or platinum.

Basically, jewelry makers who design stuff for the affordable end of the market are trying to switch to base metals. Even silver is too expensive these days. Go to stores like Nordstrom or Saks, and the jewelry you see there that sells for $300 or so is usually gold-plated brass these days.

Positive Motivation - Why Don't Businesses Offer More Pay for More Efficiency?

Because Positive Motivation Only Goes so Far

The first thing that companies do in response to poor demand in a recession is usually to lay workers off. Somehow, almost never do companies decide to keep employees but to ask everyone to take a pay cut. They know that while people may be grateful for a new job with lower pay once they are fired, they don't actually think that way when they haven't been fired yet. In other words, if a company tries to keep everyone on rather than fire them, workers will consider that as negative motivation and stop working well. Positive motivation can be a pretty popular choice too - Henry Ford, to appeal to the best workers and technicians in the country, paid twice what anyone else paid for similar skills. He called it efficiency wages. Positive motivation has been a well-known principle of employment - pay people more than the going rate, and they show you their appreciation by working harder.

But economists and hiring managers know the bigger truth in that today. When you offer someone higher wages as positive motivation, the goodwill they feel for you can be real. And it will certainly make them want to work harder and work better for you. The problem is, that people need new stimulation all the time. Pretty soon, the higher pay that you give them is going to be taken for granted, and efficiency will quickly slip. Well, so much for the positive motivation.

How about what happens to a worker when you cut pay without an explanation? Do they still work well because they are appreciative of having some job to go to during a recession? Or do they not care? Do they take their opportunities for granted and slack off? If you picked choice B, you really are remarkably astute. That's the way people's minds work.

People's minds work by comparing what they've been through with the experience of other people. If they look around them and find other people are making more money, they are going to resent this completely. And this resentment will never be forgotten. What the scientists are trying to tell us is that while positive motivation at least works for a short period of time, negative motivation - a pay cut for poor performance - breeds resentment forever.

So there you have it, psychology is an important reason for why there are so many in America who are jobless. If employers were to take pity on workers by lowering wages but still retaining them instead of firing them, they would hit back by working inefficiently, rather than be grateful. But a lot can depend on how exactly an employer imposes a pay cut. If it's done with no explanation at a time when the company is obviously doing well, of course it's something that won’t go over well with any worker. If it's done with a proper transparent explanation, things could go far better.

A New Personal Payment Solution to Make Splitting a Restaurant Check Easier.

And it's from Visa!

People love going out to dinner with friends; inevitably, everything goes well, until it comes time to pay the bill. Often, no one person seems to have enough in their wallet to actually pay their share. So everyone reasonably, decides to pay by credit card. Of course, that would mean that this restaurant would have to come up with five bills, one for each diner. Needless to say, the restaurant doesn't see any sense in this, and it asks the diners to deal with it. And so, after a lot of serious negotiating the whole sorry affair ends with a set of payment agreements so complex, it would do a hedge fund manager proud. Do things really have to be this difficult? Can't we have a personal payment solution where people can just use their cards to pay one another not always a business?

As sophisticated a financial world as we live in today, there still is no real remedy for this. If you ran out to the ATM, you would have to pay fees. PayPal exacts its pound of flesh too. Why does America not have a way by which people can just pay each other without cash in hand?

Visa seems to think that it's ridiculous that we don't have a solution to this. They announced in March that they would soon have a person-to-person payment solution ready for the market. From now on, splitting our checks, paying the kid who mows your lawn, paying allowances, everything becomes easier. Starting this summer, anyone who has a Visa card will be able to send money to another Visa cardholder, no matter what bank they go to or where they live. You get your babysitter’s Visa account number or their cell phone number, and the money you send just appears in their account. It's as simple as that. You don't even have to mess with any tiny credit card readers that attach your iPhone (recall The Square).

This could really revolutionize the whole credit card industry and small business. No longer do small merchants have to pay a punishing 5% processing fee every time they process a credit card the way they would in the conventional way. The surprising thing is, that America is last among the developed countries to come up with such a thing.

Visa says that it needed all this time to bring this payment solution to America because it needed to upgrade VisaNet in America before it could get the process rolling. It needed time to form strategic partnerships with companies and it needed to work with banks so that they would be able to actually get the money coming and going. Of course, that's a non-explanation. Because somehow, Visa was able to get all of this in place years ago and other countries.

The problem in America has basically been the banks. The banks have been reluctant to allow transfers like this for free. They've always made a lot of money on these transfers; if they allowed Visa into this space, they'd lose a huge income stream. Visa plans to charge no more than a dollar for a transfer. If Visa’s plan is successful, PayPal should be the company that loses the most. Maybe the new Visa program will make PayPal cheaper and better.

529 Savings Account Plans Hand Out Cash Tips to Help Tip the Scales in Their Favor

The recession hasn't been kind to the 529 savings account plans that many states offer. So now, here they are, trying to inject some fresh appeal into the whole idea. And they have a pretty great crowdpleaser of an idea too - it's free money. They are hoping that if they dangle enough money before families, they will tempt to enough of them to start investing with the state. And it'll be a great way for the state to come by a little extra cash.

So are they offering generous bonuses? Of course not - the states are cash-strapped. Still, in the state of Virginia, if you are a student who qualifies (with enough grades and finances), you get to put your hands on a $2000 bonus when you are ready for college. If you are a parent and you start your child's 529 savings account before his first birthday, you get an extra hundred dollars. It's the same in lots of states - Oregon, Rhode Island and others. These plans are doing so well attracting new families to the 529 fold that states all over the country are jumping in. In fact, the federal government is trying to bring in laws that make 529 plans a lot more worthwhile for everyone.

The states have other sources of motivation for doing this of course. For instance, states like Oregon have had quite a bit of bad publicity to do with how they lost a lot of their value in the stock market crash two years ago. They know that people don't really want invest with them anymore. A little $2000 tip, they hope, will tip the scales in their favor again. These are a great way too by which states can hope to clean up on the administrative fees they get to charge and also the money that's left over after they pay out whatever a college course needs for any given student. But apart from these reasons, the hope that 520 plans have a larger effect on the health of the state itself. They hope that students who graduate with the help of a 529 savings account will embark on life with less student debt. That will mean more money for better education and a better life. And that overall, contributes to the health of the state, they feel.

So should you bite when your state offers a plan like this? This certainly is a good time to get started thinking about a 529 savings account for your child. The markets look better each day, and there are many states that even offer savings account options. The administrative fees have dropped by about 10% too. In the end, you probably should pay attention to a little statistic when deciding on opening a 529 savings account for your child. Studies show that families that have 529 plan somehow end up saving a lot more for college didn't families that don't.

We Should All Be Against Age Discrimination

I never really thought much about age discrimination when I was younger. To me, that was something that happened to old people and in my short time on earth, I really did not know too many of those. My grandparents were already retired and seemingly quite content, and it just did not seem like that big of a deal. It was not until my father got laid off in his early 50s that I begin to understand that we should all be against age discrimination.

My father had never really been one to stick with a job, and I had always worried that it would eventually catch up with him. He was working at a sheet metal manufacturing plant, and was absolutely miserable, so he decided to quit. The problem was, he was 51 at the time, and as his savings started to run out, he became pretty desperate.

I don't think he realized that a lot of companies are not as likely to hire someone who is closer to retirement age, because they don't want to pay more money to someone with more experience, and they want to have someone who will be there for a longer time. While most companies like to talk the talk and come out against age discrimination, it has been my experience that most companies to not actually put that into practice.

It was sad for me to watch my father put in application after application to no avail. On those rare occasions that he actually got an interview, he almost always came home disappointed. He would say that he thought it went pretty well, but we knew that was mainly for our benefit. It was at that time that I realized how important it is that we work to end age discrimination, because my father did nothing wrong but was being punished because of something over which he had no control.

It was quite a relief when my father finally found a job with the local police department. I would talk to him occasionally about the need to come out against age discrimination, and he would typically just smile and thank me for my concern. I realized that he was just happy to have a job that he actually liked and enjoyed working.

I don't know if there is much that we can do about age discrimination as a society, but I do believe that if people point out that it is wrong and not acceptable, it will help a lot. If history is any indicator, when people agree that something is wrong and needs to be changed, it eventually does change.