Bootleg cigarette plant in the polder

A couple of weeks ago I noticed a news item about a bootleg cigarette plant in the polder. First I was a bit surprised, because who would make all that effort of setting up an illegal factory in one of the most regulated countries in the world. And then trying to sell a product which is a bit bulky for a small price.

The magic word of course is “tax”. To give you an idea of the break down of the price of a package of cigarettes (19 pieces) of 6 EURO:

€ 3,31 excise
€ 1,04 value added tax
€ 1,65 margin for producer and retailer (production costs etc.)
€ 6,00 total

That makes 4.35 EURO tax on a package of 6 EURO. You can imagine that one could make a nice profit selling cigarettes illegally. Even better, why not setting up a bootleg cigarette plant in the polder close to your customers. Still, it must be a pain to distribute a product which is mostly air to thousends of people right under the nose of the cops.

Now, I’m not a smoker and never have been. Disgusting habit actually. But that’s not the point. The case that the Dutch governmant is a champion in taxing its subjects, is! Last two years it was one tax increase after the other. If not in plain sight then in disguise, for instance a hefty increase in rents forced upon the building societies.

The question is, will all these increases help the government meet its budget goals. Already business near the border with Germany and Belgium are going bankrupt, because citizens shop abroad. Not only will this translate to less tax revenues, but also we have to pay for extra unemployment benefits.

The situation close to the border is depressing, the population at large isn’t happy either. Consumers keep being very tight with their money and the economy is noticing. Recovery of the economy in Holland is one of the slowest. Could it be that making sure that every household would feel the pain by means of widespread tax increases is actually a very dumb idea? Even punishing those households who have their finances in order and should be the first to help the recovery?

March 19th we have elections for the municipalities. It is predicted that the present coalition is going to suffer severly. A case of one excise too far.

Digital Homestead – making money online with Zazzle

Making money online with Digital Homestead. Yes, I’ve got a new website and it’s purely for commercial purposes. Getting a domain name and hosting isn’t difficult, but it took me about a week to make it look like a proper website. I used the twenty thirteen theme from the good people of WordPress. I don’t have to waste time with coding and the lot. The theme is also suitable for mobile devices. So, I’m a happy camper.

Why “Digital Homestead”? Well, I’ve got a longer explanation here. But the short story is that it isn’t really a full fledged company. It is more like getting a cheap plot of land and commit myself for a couple of years to make it work. Just working the “digital land” and hopefully it’ll produce a living.

Digital homestead - making money online
Making money online with a digital homestead.

Unlike this website I’ll try to keep Digital Homestead clean and focused. That is, just making money online. For instance with Zazzle selling Apple iPhone and Amazon Kindle cases. So no politics or economics. Maybe an opinion about making money online. Which reminds me, I’ve got a new design in my store 🙂

Chosokabe Mon Zazzle merchandise in the store

I recently added some Chosokabe Mon Zazzle merchandise to my store with he help of the quick create facility of Zazzle. The reason is that I really want to put more products in the store and maybe create a bit more revenue. Quick create of Zazzle allows for the creation of a whole range of products in one go. One of the results is this example:

Earning a steady income from Zazzle is more difficult then I previous thought. I did some research in order to find some succesful Zazzle sellers and I found one paricular seller on which I’ll blog perhaps later. A couple of things I found out was that to be succesful you really need more products than a couple of hundreds, more likely in the thousends is desired.

Another thing is marketing your products. Most often a succesful seller has websites specifically to sell categories of products. Or a blog to attract trafic to your merchandise. The blog or website can also be used for advertisement, such as Google Adsense or sponsered links in the blog post itself.

Obviously my marketing is pittyfull and I need to come up with a solution. This website is unfit for specifically marketing for instance Chosokabe Mon Zazzle merchandise. The website name and URL is not very interesting for this purpose. The design of the website is a bit old and not ery suited for displaying product.

Therefor I was thinking to start a new website with a new URL, geared towards selling stuff on the internet. I’ll use a standard template, because I don’t want to waste time and energy in building a website. I just want to configure it. It’ll be only a small investment and a good experiment. It should be possible to create a steady income stream from the internet, so I’m not giving up yet.

Putting money where your mouth is

Over the last year I did some writing about propping up your finances. Now, I’m not really a finance guru and my idea was only to write about my own experiences. Specifically about how to save money enough to last a lifetime, because if I want to witness that marvellous “space future” I’m in for a long trip. Also, I actually might become a hundred years old. I better have a nest egg, for whatever reason.

Saving and investing won’t get you very far, though. The most obvious advice is to increase your income, for instance by asking for a raise with your boss. In Holland? Fat chance. It is much better to do something on the side. Try to sell something, preferably with a profit. Or create a service and sell your “time”. Make money.

My first step is to try to sell stuff by means of websites like Zazzle and Cafepress. Here I can put my own design on shirt, mugs and the sort. It’s an easy way to make a buck. Since I want to increase my artistic capabilities anyway, a web-shop like Zazzle is a good start. By the way, I want to be a little bit more artistic because I don’t want to depend solely on my IT-skills. Why? That’s a subject for another post. Firstly, my newest addition to the shop. Come on, click on the image.

money making with zazzle

Taking “Stock”

And an important correction. So, how did I go last year. It’s been a strange year, 2010, a year ago I feared for my job and Euroland was heading for a meltdown. I still got my job, at least for 2011, and the Euro didn’t collapsed, yet.

Money wise I saved like crazy and I was capable to make some gains. Unfortunately my spreadsheet contained a mistake by which my gains looked way too positive. I look of course to the real amount so I didn’t noticed. My fictive total amount in assets stood at 130 (I started at 100 December 1st 2009) and that was a little bit too steep. The last two moths witch corrected data look like this:

January 1st 2011

Amount Percentage
Stock 7.09 6.18%
Bonds 0.00 0.00%
Cash 103.12 89.81%
Gold 4.61 4.02%
Total 114.83 100.00%

December 1st 2010

Amount Percentage
Stock 6.42 5.79%
Bonds 0.00 0.00%
Cash 100.08 90.36%
Gold 4.26 3.84%
Total 110.76 100.00%

All in all, last year I increased my assets with more than 10% and I’m completely debt free. The amount is nicely going in a direction I’m aiming at. Also, I started buying commodity funds for my “Gold” asset class and in two months it did quite well. Resolutions for 2011, less Cash more funds.

Wrong data in previous will be corrected, by the way.

Going English…

It’s been a while since my last post, so a quick update is in order. First things first, I’m changing from Dutch to English. Hopefully I’ll get a bigger audience, because last years I got very little response. Also there’s another reason. This year I started to blog a bit about financial issues, mainly about keeping alive long enough to witness a wonderful space future.

One way to be part of a space future is, besides a good health, a fat bank account. Now you can save and invest your savings all you like, but it won’t make you exactly rich. Most people just have a salary and even with a frugal life, accumulating enough wealth is difficult. And a pile of wealth is what we’re aiming at. A couple of years ago I bought the book “The Millionaire Next Door”. The authors in this book explain why some people acquire wealth and others only debt.

I’m not going to explain the whole book, you better buy it yourself because it so well suited to an ordinary individual with a job. One thing I’ll mention and that is the rule of thumb the authors use to figure out if you’re accumulating wealth fast enough or if you’ll have a very poor pension. The rule is, multiply your age with your income before taxes and divide by 10. This should be you net worth if you’re an average saver. Also calculate your true worth, that is all your assets (f.i. your house) minus your debt (your mortgage). Divide your true worth by the ideal worth. If this number is lower than 0.5, woe unto you, if it is higher than 2, start dreaming about retiring.

So how did I fare?

2002 0.67
2003 0.73
2004 0.76
2005 0.89
2006 0.89
2007 0.91
2008 0.89
2009 0.94

Not very fast, I’d say. Almost average. What my income is and what I posses, a house f.i., that is not for the world to know, but this way I’ll stay average. By saving alone nobody gets rich, therefore one needs extra revenues. One way is to monetise this website, but I’m still guessing how to do that. That was a very long explanation why switching from Dutch to English. Sorry.

Now, I also need to update my Permanent Portfolio status, so there:

August 1st.

Amount Percentage
Stock 5.60 5.10%
Bonds 0.00 0.00%
Cash 104.11 94.90%
Gold 0.00 0.00%
Total 109.71 100.00%

September 5th.

Amount Percentage
Stock 5.89 5.37%
Bonds 0.00 0.00%
Cash 103.95 94.63%
Gold 0.00 0.00%
Total 109.85 100.00%

Still no changes, savings are going well and the Euro is going strong. Last months, whole summer really, it was really busy and I hadn’t the time to give PP the attention it deserves. Nevertheless I need to start to allocate my little bit of cash. It’s getting risky with all my eggs in one basket.