For me, this means going through the books of my freelance writing business, but it also means dealing with my personal finances. As you may already know, 2011 was a monumental year for me as I finally entered the demographic known as home owners. And with that came a mortgage. And with that came more complexities and more decisions.

The good news is that I do have some “extra” (and I use that term very loosely) money around and I wanted to see what was the best way to handle it. One decision that many Canadian homeowners face around this time of year is whether the “extra” money should be put toward paying off the mortgage or if it should be invested into a retirement fund via an RRSP. So, which is the sounder decision?

Buy More RRSPs If…

Even though your personal income tax return isn’t due until the end of April, you only have until the end of February to buy more RRSPs for the 2011 tax year. That’s the same kind of RRSP deadline we’ve seen for previous years.

There are several advantages to investing in your RRSPs. You’re saving for your retirement, to be sure, but you also “save” on your current income taxes. The tax liability doesn’t disappear, but it is deferred and the assumption is that you’ll be in a lower tax bracket upon retirement. That said, does it make sense to invest in your RRSPs in lieu of putting that money toward paying off your mortgage?

If you have “extra” money, you should invest that in RRSPs if doing so triggers a larger tax refund and if the expected rate of return on your investment is higher than the interest rate you are currently paying on your mortgage. If you are reasonably confident that you can earn a 5% return, for example, and your mortgage is currently at 3%, then it is a sound decision to invest in your retirement.

Pay Down the Mortgage If…

When, then, is it appropriate to pay down the mortgage in lieu of putting that money toward buying RRSPs? First, if buying those RRSPs only has a minimal impact on the size of your tax refund, then I wouldn’t bother. Not surprisingly, the other huge factor is the difference between your expected rate of return on your RRSP investment and the interest rate on your mortgage.

If the mortgage interest rate is higher, then you should focus on paying down that debt. It doesn’t make sense to “earn” a 2% return on your investment product, only to pay 3% interest on your mortgage. This also assumes that your mortgage allows for lump sum payments, above and beyond your regular payments. If you have outstanding debts with a higher interest rate than your mortgage, as would be the case with credit card debt, then you should focus your energies on paying those down first.

As Always, It Depends

In my case, even when we bought the house, I made a conscious decision to remain reasonably liquid. That’s because I still needed the cash on hand to pay for my wedding and I expect to have a few other major purchases related to my house in the next couple of years. As such, I want to have enough cash on hand to deal with these expenses, as well as a rainy day fund for “in case” purposes.

Given the current volatility of the market and the relatively low interest rates, I’m likely going to put some of that “extra” money toward the mortgage and leave the RRSP cap room for future investment. Keep in mind that I am no financial expert and your individual situation will surely vary. If you’re not sure, check with someone with more expertise and who has your best interests at heart.

In fact, just like any other business, I’m at the mercy of several factors that are outside of my control. I’ve been hit by all three of the examples listed below in varying degrees.

Shifts in Currency Exchange

Over the course of my freelance career, I’ve seen the exchange rate between the US dollar and the Canadian dollar go as high as 30%. This meant that if I charged $100 US to a client based in the United States, I would effectively earn $130 Canadian. Fast forward to today and that same $100 US translates to about $97 Canadian. In effect, I’ve “lost” $37 in income. Extend that to all of my US-based clients and you can see how much of an impact this has on my bottom line.

Since I have a healthy nest egg saved up and I have some faith that the American dollar will bounce back in the long run, I’ve been trying to avoid converting my US funds to Canadian. The wait can only last so long, of course, but the shifts in currency exchange are entirely outside of my control. The alternative would be to insist on getting on paid in Canadian dollars, regardless of the client’s physical location.

Slumps in the World Economy

A little over two years ago, I wrote a blog post on a freelancer’s relationship with the recession. The world economy is still hurting and this does have a significant impact on my writing business too.

Remember that a number of my clients run websites for the purposes of earning money through advertising. If the businesses of the advertisers aren’t doing so well in today’s economy, they’re going to have smaller advertising budgets. Thus, my clients may be earning less money and, by extension, they’ll have less money to spend on my freelance writing services.

There are some strategies to consider that may work this in my favor — like writing for companies that thrive in down economies (debt reconciliation, for instance) or shifting more toward copywriting rather than standard web copy — but it’s undeniable that the world markets affect my profitability too.

Changes in the Google Algorithm

This is partly related to the previous point, but it is also a separate consideration altogether. Many of the sites that use my writing run Google AdSense as a revenue stream. Many sites may also rely on search engines to get a large proportion of their traffic.

So, what happens with Google “adjusts” its search engine ranking algorithm? Many of these sites that may have once ranked very highly for target keywords may suddenly fall onto the second or third page of results. This drastically reduces traffic, which drastically reduces revenue. That, in turn, means that they also have less money to spend on freelance writers (e.g., me).

I completely recognize how Google dominates my life, but I also recognize how much of an impact it has on other people’s lives, businesses, and websites too. This makes for a profound domino-like effect.

Not the Whole World in My Hands

At the end of the day, you can only control what you can control. To overcome these other factors, you may need to diversify, specialize, adjust your marketing strategy, or do any number of other things. Just because some things are outside your circle of influence doesn’t mean that everything is outside of your circle of influence.

In the United Kingdom, the riots that ravished city streets last week have ceased, but the potential for such activity to surge up again is hardly a remote possibility. Across Europe tear gas stocks have risen as the continent nears a level of financial uncertainty it hasn’t seen since 2008. Governments are cracking down, which may very well only lead to escalating instances of rioters clashing with police. The more the European economy slides into disruption the more likely an equal reaction will be seen on the streets of the Eurozone.

Similar activity is being exhibited in the United States as well, only in a more peculiar and unconventional fashion. “Flash mobs” were originally harmless dance routines and other acts performed in public places by large groups of individuals coordinated through social networks. However, flash mobs have recently evolved into a manner of criminal mischief.

Nearly 30 people swept through a Maryland convenience store the other day and stole countless items in only a few seconds, in what police suspect was a preplanned attack. This is only one of several recent examples of such crimes being committed by large groups of individuals. Many of these flash mob attacks include instances of violence.

While the behavior exhibited by American flash mob participants is relatively mild compared to the firebombing of British police stations, there seem to exist similar sentiments held by either perpetrators. It’s a disregard for law and order and more shockingly a collectively premeditated decision to engage in social deviancy for personal pleasure. Both styles of social deviancy attempt to outright defy basic parameters of society by-way of organized guerrilla-style “attacks on the system”.

But the perpetrators all have another thing in common: nearly all of them are under the age of 25; the same demographic hit the hardest by unemployment. These aren’t just the adolescents that make up the juvenile criminal element every society possess at any time. An untold percentage of rioters and flash mobsters are either sitting on degrees from nursing schools and other academic accomplishments with no hiring in sight.

In essence, we have an enormous amount of young people out there with nothing to do. Historically, that is always a recipe for desire. Twenty somethings need to be working. They need to feel like they have a role in society and they need to see that good comes from being a willing participant in a system of law and order. Otherwise, they become excessively cynical and take to the streets. This trickles downward and inspires the criminal element to engage in audacious behavior otherwise only rarely documented.

The result in some cases are pseudo-poetic actions against society. Mostly just unjustifiable examples of degenerative behavior, but calculated to the point of eerie precision. It’s energy that could otherwise be used to rebuild bridges and update all realms of our failing infrastructure, but is instead wasted in the execution of childish criminal behavior.

The only solution is to put these kids to work. Not all of them will go along with it, but that was always going to be the case. We need to worry about the young minds out there with potential and no ability to exercise it effectively. Its this group that turns the ordinary band of four Saturday night hooligans into a flash mob of 30. Take them out of the criminal equation and into employment and an enormous amount of this nonsense will disappear.

In the meantime, get used to flash mobs, because they seem to be popping up everywhere that jobs aren’t.

The preceding was a guest post written by Brandy O. and does not necessarily reflect the opinions of Michael Kwan or Beyond the Rhetoric.

I am not an economist, nor do I play one on television. I am also not terribly interested in American politics, but there’s no way to avoid following the saga about raising the debt ceiling and how the American economy could suffer. Granted, most of my perspective on the matter is coming by way of Jon Stewart and Stephen Colbert, but the current state of affairs is troubling to say the least.

And so, with that August 2nd deadline looming just over the horizon, I’m left asking whether I should convert my American money over to Canadian. With all that uncertainty, who knows where the American dollar will end up on the international money markets next week?

This certainly isn’t the first time that I’ve faced this conundrum. In fact, I’ve been facing it for the entirety of my freelance career, since I do have clients who pay me in American funds. The Canadian dollar eclipsed the American dollar four years ago, but it bounced back. Now, it looks to be heading toward a downward spiral in relation to the Canadian dollar. The mid-market rate as I write this post today is 0.9513 (1.0511 if you’re going in the other direction).

But look at that trend! The chart at the top of this page, courtesy of Yahoo! Finance, charts the USD-CAD exchange rate over the course of the last 12 months. Aside from a slight upward swing in May 2011, the trend is quite clear. With the whole debt ceiling fiasco going on, I’m not exactly optimistic in the short run either.

That said, in my heart of hearts, I’m reasonably confident that the American dollar is a good investment in the long run. It will surely bounce back again, but there’s no saying what kind of timeline we have to consider here. I do have an American bank account in US funds, as well as a PayPal account with US funds, so it is possible for me to “sit” on the American money for now. At the same time, it’s disheartening to see the relative value of that money drop steadily with each passing day.

The good news is, despite buying a new home and planning for a wedding, I don’t need access to those funds in the short term. That might change, but it still makes me uneasy about the money I have in American funds. What do you think? Would you “cash out” some US money at this point? Or stick it out for the long haul?

This is a concept that many small business owners fail to grasp. It’s especially true when they are looking for investors who can fund the development or expansion of their businesses.

Let’s take the example of an Internet startup. For someone to get that off the ground, they’ll likely need some money to register a domain, pay for hosting, hire a web designer, hire a web coder, hire a copywriter, and so forth. This all costs money and it’s what this person would need if he or she wanted to move forward. That’s what the entrepreneur needs to get started.

But that’s not the same as how much this “company” is worth.

At this point, the business is little more than just an idea. To an investor, this is a huge gamble. With no proven revenue stream, the business is effectively worth nothing. The investor is left asking, “Where is your value?” What’s in it for me? How will I get a return on my investment?

A prime example of this would be a freelance writing business like mine. Sure, it generates enough money for me to make a reasonably comfortable income, but it wouldn’t make nearly as much sense for an outside investor. I am necessarily limited by time, as I am just one person. I may need money for this project or that, but it’s not what it’s worth to an investor.

On the flip side, let’s say that I wanted to start a course to teach other people how to become professional writers. Let’s say that I already had a few sets of students come and go. If that were the case, then this could be suitable for outside investment if I wanted the money to be used for larger venues or more course materials. That’s an entirely different kind of business.

Just the very business of providing a service works in much the same way. I may want to earn a certain amount of money for completing a certain project, but that doesn’t mean that the potential client feels that project is worth that amount of money. Again, it comes down to the old adage: What’s in it for me? Where is the value?

The value of the product, service, or business needs to be disassociated from the needs of the person providing that product, service, or business. These are two entirely different things.

Once upon a time, starting your own online business was largely an unconventional move. Today, attitudes are quickly shifting and that’s led to the topic for this week’s speedlink. It’s all about making money and building a career on the Internet.

We start out with John Chow. You might remember an episode of Dot Com Pho where he mentioned an upcoming workshop about serious interactive marketing. Well, you can now register for codename: Simple. It’s set to take place on July 28 and it’s completely free to attend; you just have to sign up.

Next up, we have Derek Semmler. He’s expanding his online scope by launching Teague Publishing, an independent e-publishing house that specializes mostly in short stories. That said, they are “more interested in doing what we can to help writers achieve their dreams.” Good luck!

Flipping common sense on its head, Jennifer Mattern urges all the freelancers out there to get more rest if they want to get more done. Pushing yourself to your limit everyday is going to be draining and the quality of your work is just going to suffer. You’re only doing your clients a disservice by burning the midnight oil every night.

Over at Copyblogger, Demian Farnworth provides ten ways to beat online obscurity. With literally millions of blogs on the Internet, it’s very hard to get noticed. Demian suggests you give away content, promote other people (ahem, What’s Up Wednesdays!), and wear an eye patch. Be quirky, be recognizable, and most importantly, be memorable!

You might find the “dot com lifestyle” to be very alluring, but Tyler Cruz has a big piece of advice for you: don’t quit your day job yet. Making money online is not nearly as easy as it may seem and earning consistent income will be a real test. Until you’re able to demonstrate a consistent ability to generate reliable income on the Internet, you might want the safety net of a conventional job.

It’s a discussion that pops up from time to time: does it make sense (cents?) to stop production of the penny. The one-cent coin is virtually worthless, for most intents and purposes, so why do we keep making it?

Canadians might remember the story that came out about a week ago, saying that Finance Minister Jim Flaherty is still apprehensive about scrapping the penny. He wants to keep it around, even though it actually costs about 1.5 cents for the Royal Canadian Mint to produce a single one-cent penny.

We’re talking about the Canadian penny, but it could just as easily apply to American money too. I’d argue that we don’t need the penny. It costs too much to make, too many get “lost” in circulation, and it just ends up in forgotten penny jars and in between couch cushions.

The thing is that the elimination of the physical penny would only have an impact on cash transactions. When you pay online or use a credit card in a store, you still pay the actual amount. If the total is $12.97 at the dollar store, you pay $12.97 on your MasterCard.

If you’re paying cash, though, you’d then fork out $12.95. If the total were $12.98, you’d then round up to $13.00. As an aggregate, the retailer would neither gain nor lose money, as everything would average out. It’s the same with the fractions of a penny that happen with interest, tax, gas prices, and so forth. I’d rather the actual prices get rounded to the nearest nickel or dime officially, but this system is fine.

And it’s a system that, as far as I know, works swimmingly in Europe too. Round up or down for cash transactions, charge the actual amount when paying with plastic. We might have to bid adieu to penny candy, but I think that ship has long-since sailed.

Making money online can sound like a very cryptic endeavor. That’s because it is. There are so many ways that you can approach it, just as there are so many ways to get into a more traditional business. One path that you may want to consider is the buying and selling of website properties.

This comes with its own unique set of challenges, which is why it helps when you get the guidance of someone who has been there, done that, and been very successful at it. You may already know Zac Johnson as an Internet marketer, but he’s also done quite well with flipping websites. Now, he’s just released a useful guide on replicating his same success: Flip This Web Site: How to Buy, Improve, and Sell Web Sites on Flippa.

The guide, which is over 100 pages long, really does run through everything you need to know about buying and selling websites. You have to realize that websites and their domains are just like other commodities with varying values. Think of them like stocks; buy low and sell high. Zac helps you achieve that kind of flipping success.

You get an introduction to the different business models for flipping websites, what to watch out for, how to use Flippa, how to build up a site’s value, and so on. He effectively uses a range of real world examples, including a few from his own portfolio, to illustrate these points.

To help you get started with the “art of buying and selling websites,” Zac has also worked out a deal with Flippa so that he provide all of his readers with 10 free Flippa credits. In addition to the 150 pages of content, you also get six videos, a mini niche website guide, and other bonuses. Better still, if you’re not completely satisfied with the guide and what it has to offer, he’ll issue a full refund in the first 60 days, no questions asked.

If you have even a smidgen of interest in making money from flipping websites, I recommend you give Zac’s e-book guide a shot. You quite literally have nothing to lose and everything to gain.

CLICK HERE TO BUY “FLIP THIS WEB SITE” BY ZAC JOHNSON

Full disclosure: This was not a paid review, but I do earn a commission for each successful sale that I refer. Even so, the opinions expressed are wholly my own and I genuinely endorse Zac’s e-book. It’s a great read. I would know, since I was a part of editing process.

On the television show Dragons’ Den (the American version is called Shark Tank), entrepreneurs approach a group of investors, hoping that they can get some cash for a portion of their business. These investors (referred to as dragons/sharks) watch the presentation given by the entrepreneur and then they pepper them with questions about why they should invest in their business.

Do you own the patent? Do you have distribution? What’s stopping someone else from copying you? What were your sales figures last year? What has stopped you from getting into major retailers? Why haven’t you approached a larger manufacturer and simply licensed your product?

Curiously enough, I find that guys like Robert Herjavec and Kevin O’Leary rarely ask questions related to long-term viability. And that got me thinking: Is long-term viability really that big of a concern anymore? The world is in a constant state of flux. What might be wildly lucrative today could prove to be remarkably pitiful tomorrow. A good example of this is Motorola.

Worry About Tomorrow, Tomorrow

The mobile phone (and infrastructure) company never really bothered to balance its short and long term goals; instead, it only looked in the short term and did very well in the short term. Remember the RAZR? Everyone had one and Motorola milked that cash cow for all it was worth. The trouble was that other cell phone companies continued to innovate and the RAZR soon fell behind the times. Motorola started hurting.

It wasn’t until the last couple of years when Motorola really pushed its DROID line of smartphones (and eventually broke off Motorola Mobility isn’t a separate company) that it started to see some real success again. They don’t nearly have the same kind of market share they enjoyed with the RAZR, but they’re doing quite well for themselves.

It’s About Adapting to the Times

So, do we really need to concern ourselves with long-term viability when considering the success of a business? Yes and no. The world is constantly changing and there are very few products that sell as well today as they did 20 years ago. However, it is important to consider the long-term viability of a business model and the viability of the people involved. You may have a cash cow today (which is great), but can these same people come up with another cash cow tomorrow?

Good ideas can pay off in the short term, but you have to be prepared to adapt and adjust to suit the current marketplace. You need to be flexible and, in doing so, you might even find success by accident. Just know that it really is no accident when you have the right people doing the right things. And that’s how you ensure the long-term viability of your business.

Just because a company offers you some sort of special combo does not mean that you are actually saving any money. It’s a very common misconception, really. If you see that there is a special “deal” of some kind, it has to be cheaper than regular price, right? Not exactly.

Take a look at the example above. I saw a full page advertisement in today’s newspaper from BCLC, announcing its new “all in one” Lotto Pack. For $10, you get entries into the five major lotteries available in our area (including both Extras). Casting aside for a moment that lottery tickets really represent investment for dummies, the deal doesn’t really work out.

When purchased individually, a Lotto Max ticket is $5, a 6/49 ticket is $2, a BC49 ticket is $1, and each of the two Extras is $1. Add that all up and you get… $10, the same price as the “All in One Lotto Pack.” Not a deal. It’s possible, though, that they’re trying to sell you on the convenience, but it’s an upsell either way. You do want to super size your meal, don’t you?

That said, at least the combo is the same price as if you were to purchase the items individually. Such was not the case a few years ago, as you may recall, when I came across a pizza deal that was actually the opposite of a deal. Buy two slices and pay more per slice than if you were to buy just one slice of pizza twice. This is why, when you go grocery shopping, you should break down the cost on a per gram, per litre, per gallon, or some other related per unit basis.

The whole mantra of “spend more, save more” doesn’t really hold up to real life conditions. If you buy a Costco-sized pack of ground beef, but you end up throwing away half of it, you really haven’t saved any money at all. Realistically, the best way to save money is to live below your means. After all, a penny saved is even better than a penny earned.