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More Ways To Earn
More ways ro reward yourself.
13 points for every $1 you spend on qualifying hotel stays - when you use your Wyndham Rewards MasterCard credit card at these participating hotel brands.§
Wyndham Hotels & Resorts, Ramada, Days Inn, Super 8, Wingate by Wyndham, Baymont, Howard Johnson, Travelodge (US hotels only), Knights Inn and Amerihost Inn.
2 Points for every $1 you charge on all other purchases§

• 0% Introductory Annual Percentage Rate (APR)† for Cash Advance Checks and Balance Transfers through your first 12 billing cycles* (subject to a 3% transaction fee, no less than $10).


• No Annual Fee


• 24 hour Online Access


• Complete Fraud Protection


• Credit Protection Available

DID YOU KNOW?

	It’s now almost two years since I started dabbling on the internet, trying to make money online. At that time it was a bit of an experiment, kind of like a hobby - something that I did partly for the enjoyment and partly in the hope that I would make enough money to leave my day job. Now, 20 months later my hobby has turned in to a business and it is generating enough income from for me to happily go part time at work. Should I decide to do this I’ll be taking the huge step from working on my business in my spare time to earn some extra money, to working half the week for myself. I will then be depending on the money from my own business to pay my mortgage and bills. If I manage to achieve the same success working from home during the day as I have over the last year working a few hours here and there in my spare time I’ll be well on my way to becoming a full time home business entrepreneur. I know this sounds fantastic, but what if something goes wrong? If I eventually work full time for myself I’ll be giving up a regular full time salary, not to mention company pension, sick pay and bonuses. For this reason I decided to ask myself a few questions. I’ve put together a list of 5 questions that you need to ask yourself before you leave your day job 1. Do you have a financial cushion? Before you give up your full time or part time job, make sure you have some money in the bank in case something goes wrong. Preferably you should make sure that you have no credit card debts or loans and have at least 3 months salary in the bank just to allow you to get back on your feet if the worst happens. 2. Are you making enough money? Sounds obvious, but remember to add up your current outgoings to see if your online income will cover everything. Remember to take into account tax payments and allow for the fact that you’ll no longer receive paid holidays, health insurance, sick pay and a company pension. If you have a big purchase coming up in the near future, such as a new house, you may want to postpone your full time online career until you’ve secured your mortgage. 3. Are your income streams diverse enough? Are you making all your money from one source? If you’re currently making all your money selling similar items on Ebay or earning an income from a small number of affiliate programs or making money from a single program such as Google Adsense, you could be putting yourself at risk. What if the market for the products you are selling disappears? The affiliate programs you are promoting shuts down? You need to take a close look at the sources of your income. Ideally your income should be coming from numerous sources e.g. selling your own products, promoting different affiliate programs, using multiple websites in different niches. 4. Do you have a business plan? Since you are considering taking such a big step you need to have a business plan. This should include a description of your company and the products and services you provide, the analysis of your market, strategy and implementation along with a financial plan. 5. How will you cope with working alone? If you enjoy working with other people every day, it’s likely that you may find the transition to working alone quite difficult. You should consider possible strategies to cope with this change. For example you may want to make sure that part of your business involves working with other people – perhaps providing a service locally or consulting. Or you could fill the vacuum of not meeting people at work by joining a club or taking a part time training course. Making an effort to stay in touch and meet up with friends and former colleagues regularly will also help. If you consider all these factors before quitting your day job, this should give you the best chance possible of becoming a successful full time internet marketer.

The yield curve refers to the interest rates on bonds of varying maturity. Normally, we expect the yield on bonds with longer maturities to have a higher yield than those of shorter maturity bonds. Because it is less of a burden to tie up one’s money for three months or a year, rather than five years or ten years, investors must be given an incentive to place their funds in bonds of longer maturity. This incentive takes the form of a higher interest rate paid on bonds with longer duration. Similarly, we can justify the higher yields on longer maturity bonds based on risk: the foreseeable risk to the economy over the next three-months or year is much less than the risk over five or ten years. Thus the higher yield on long-dated bonds is required to compensate for the added risk of holding an investment that long.

On December 30, 2005, many newspapers heralded the fact that the yield curve on U.S. government bonds had become inverted. In fact, the curve was not consistently inverted. The yield on two-year Treasury notes (just under 4.4%) barely exceeded the yield on ten-year Treasury notes (4.39%). Ordinarily, this type of yield structure will be a self-correcting problems. Investors will no longer choose ten-year bonds, when they can get the same interest rate or even a higher one on two-year bonds. With fewer people wanting to hold ten-year bonds, the interest rates will rise on these in order to clear the market and induce investors to hold ten-year bonds once again.

But when long-term interest rates rise, so too do rates on 15-year and 30-year residential mortgages. If the costs of obtaining a mortgage loan rise, then fewer people will want to buy houses. The result could be either a cooling of the previously hot real estate market, or a potential collapse of some regional price bubbles on real estate.

If inverted yield curves were merely a transitory phenomenon with little or no economic impact, except for people in the business of trading interest rate derivatives, swaps, and bonds; then no one would worry. However, inverted yield curves have often signaled a recession will follow, and the potential for a recession is a legitimate cause for worry.

It would take more than one sign of an impending recession before most economists would start to worry. At the start of 2006, American businesses are expected to increase investments on capital equipment, which should be a boost to the economy. The major cause for concern is the seemingly ever rising foreign trade deficit. Americans consume more than they produce and make up for the difference with imports. Foreign businesses that sell goods to America often invest the proceeds in U.S. government bonds. Because so many of our imported goods are produced in China, the U.S. now has a significant portion of its long term government bonds held by Chinese investors. The U.S. faces political risk that the Chinese investors may one day decide to cut back on their dollar holdings and place their cash in some other government’s bonds.

An article published on Dec. 31, 2005, in the Financial Times (London, England) noted “Each of the last six US recessions has been preceded by an inverted yield curve, [but] . . . it has sent out two "false positives", inverting in 1966 and 1998.” As noted above, with yields of 4.39% and approximately 4.40%, the yield curve between two-year and ten-year is actually more flat than inverted. For now, in the first week of January 2006, the best course is to wait and see if the yield curve becomes more inverted or reverts back to its normal shape. As a professional economist, I will not begin to worry unless the yield curve remains flat for over a month, or the inversion increases from 0.01% to 0.50%.

For additional articles by this author on financial economics, please see http://michaelguth.com/finecon.htm