Cash flow tip: solar energy as an investment

Turning to solar energy as an investment may be a personal cash flow tip worth pursuing.

Pursol Solar out of San Diego is one of the many private companies supplying residential and commercial solar applications.

Investors looking for returns outside the traditional stock market and mutual fund offerings may find investment opportunities in solar energy. The solar industry is growing about 40% per year while government incentives and mandates are strengthening the market for companies focused on supplying alternative energy.

In California, Governor Schwarzenegger recently signed an executive order that requires state utilities to get a third of their power from renewable sources by 2020.

Homeowners and commercial building owners may find that the cost of energy they’re currently paying is already higher than what they would be paying with solar.

There’s also a tax incentive for people looking to place their money in solar energy growth. This may appeal to accredited investors who want to explore profitable companies in the alternative energy industry.

To keep up with its rapid growth, the four year old company is starting construction on both a new manufacturing plant and a power plant in Q1 2010.

Pursol is registered to go public in within 24 months, he said, and the company has had over $ 13 million in residential sales so far this year.

There’s also contracts pending with two casinos totaling $ 18 million as well as with a national hotel chain. The hotels and casinos will be able to write off the cost of converting to solar over a 5-year period and then their energy costs are free.

Cash Flow Tips: Employee 401K Alternatives

Companies watching employee 401K savings dwindle do have alternatives for retirement plans.

This post examines investing via insurance vehicles. I recently spoke with investment advisor Idelle Steinberg serving South Pasadena and the greater Los Angeles area and why she offers insurance-based products as alternatives to the 401K.

Cash Flow Tips: Describe the type of retirement investing you’re promoting and the vehicle that makes it possible.

Idelle: About five years ago the federal government changed regulations for financial institutions (banks, brokerage firms, insurance companies) creating a level playing field. The Insurance companies are now able to do what the brokerage firms were doing but with more financial safely, and they are vying for the business.

Properly set up, a retirement plan through an insurance policy contract will produce income that is totally tax free and IRS approved. The fees are level and will not go up regardless of how high the balance accumulates on the account.

And since the principal is never directly invested into the stock market, there are no losses to principal, guaranteed. But you have the opportunity to earn market like gains.

In sum, there are:

• Low Fees

• Zero Stock Loss

• No Taxes

Cash Flow Tips: I believe most people think of insurance companies as offering low yield annuities that aren’t suitable for investors seeking growth. How is your investment program different?

Idelle: Annuities are a different subject, but a good one. People are leaving the stock market in droves as they realize that money efficiency and safety is at least 3x more effective than chasing higher returns.

So many people are turning to annuities for building retirement that inventory has diminished and some insurance companies have temporarily closed their doors to new business.

As far as yields, annuities can presently offer guaranteed 8% fixed, something you would only dream about in today's stock market. There are many different types of annuities available, making it possible to find something for almost everyone.

Annuities offer safety and protection against stock market loss, no fees, and when done as ROTH, they can also be tax free.

Cash Flow Tips: What are minimum investment amounts?

Idelle: We have two different subjects going here. One is building retirement through an insurance account which can yield income tax free, level fees and no loss to principal through market volatility. The amount invested can depend on several factors, but usually on how much someone wants to invest.

Minimum investments in annuities can start as low as $1000.

Cash Flow Tips: Is this something companies can use to offer their employees as part of a benefits package?

Idelle: These are great as part of a benefits package because the employee is in control, there are no adminstrative costs as fiduciary fees, and it can be taken intact with the employee if they ever leave the company.

Readers may call Idelle Steinberg (Ca Lic. #0E18530) for additional information: 626-441-7332.

This is not a sponsored post nor an endorsement of services. However, cash flow -- whether for companies or individual employees -- deserves research into the best vehicles and strategies for preserving or building capital.

Cash Flow: Price and Value Lesson

Making decisions with cash flow includes deciding whether to buy on price or value. Often, customers (clients) try to combine both.

Here's a price and value lesson I learned today when stopping for a quick afternoon lunch on the way home.

I saw a Quizno's restaurant and stopped in for a quick sandwich to take with me. I paused because I knew Subway has $ 5 footlong sandwiches. I ever stopped at a Subway because I felt their sandwiches were overpriced. I still rarely stop at one but once in a while when driving on the road I feel they're a good option.

But I didn't want to drive around looking for one. So I walked in to the Quizno's and saw they had 3 sizes with the middle size being a regular for just over $5.

I selected that one based both on price and value. The picture looked like a footlong sub. It looked a bit smaller when the person behind the counter sent it through the oven. And when I paid for it (with tax it was over $6) and then opened it up, it certainly looked less than a foot long.

The price increased and the value decreased in my opinion.

While the sandwich tasted fine, I was disappointed in the value I received for the price I paid. I told myself I could have bought a Chinese meal, a filling Mexican burrito, or a few hamburgers from Wendy's with a side salad for the same price.

How is your price and value proposition? Do customers (clients) appreciate what you offer for the price they pay and the value they receive?

How the Internet Can Rob Your Cash Flow

Forget credit card scams. "Phishing" may not even be your biggest worry. If you're looking at ways to make money on the Internet, or track investments, etc., the biggest concern you may have to worry about is . . . YOU.

Now, if you're like me, you might think that's nonsense. My wife and I are fairly frugal with our money. We don't spend wildly and we're careful when we shop online.

However, I got a subscription to a reputable online real estate research tool . . . and it was so easy to sign up for it at the time I wanted to do some research . . . and now I'm not sure how much I paid . . . and then from that I've received two copies of a research guide in the mail . . . and I might be charged a monthly fee . . .

And then I had signed up for Netflix and was paying $ 4.99 a month since last April . . . and I had never used the service. I didn't realize I could watch up to 2 hours in movies per month for the cost.

It's so easy to move quickly from one web site to the next and sign up for . . . subscriptions, one-time purchases that can easily lead to additional purchases . . .

So before you make that purchase online . . . no matter how valuable the purchase seems to be . . . stop and ask if you really need the information and then make sure you're not signing up for any subscriptions that you don't really need!

Can you afford a vacation?

Taking time off work for a vacation may seem like a bad strategic cash flow move in a down economy.

I spoke with a friend of mine who's in engineering with a government research organization and he told me, "we're headed to Hawaii between Christmas and New Year as part of my wife and mine 20th anniversary celebration. But maybe it wasn't so smart a move since I don't think the government is going to fund us forever."

But maybe taking a vacation isn't such a bad idea even if it means spending money.

Here's a cash flow tip.

Consult with a travel agent on the right trip for you and your family before spending time booking a vacation or looking for bargains online.

Why?

I spoke with Mike Day and Denise Harvey of Monrovia Travel Service, Monrovia, California and they said a travel agent may be able to locate bargains in quality places or make recommendations based on your personal budget and travel desires.

A travel agent acts as a personal consultant and can even help find the best value for the travel dollar.

“I had someone who wanted to vacation in Hawaii and was looking at spending up to $ 5,000,” said Denise. “I was able to find them a site in Mexico which was more beautiful with a price tag of only $ 2,500.”

Denise and Mike explained that a down economy isn’t a reason to scrimp on taking a dream vacation.

“Look for terrific travel bargains in 2009,” said Denise. “Great deals are constantly changing as the suppliers such as cruise lines are offering wonderful bargains.”

A travel agent also has personal experience so they can advise clients on the right documents. Denise said she travels about 3 to 4 times per year and she took the picture of this bay on Italy's Amalfi Coast.

So check with a travel agent to book a vacation that may be of strategic benefit for you -- whether you're traveling in the U.S. or around the globe.

Beat the Credit Card Companies

How do you beat the credit card companies and the banks that control them?

Get out of debt - or at least manage your high interest rate debt.

A friend of mine said he believes there should be an interest rate limit on what the companies can charge. Congress, however, has never enacted such laws.

Meanwhile, for background on how credit card companies operate and more links, log on to this article that I wrote about credit card companies and why they want you to stay in debt.

Your high interest rate debt equals their profits.

You can learn more about getting out of debt and the history of the banking system by logging on to Federal Debt Relief Systems and watching their many videos posted on the subject.

High interest rates that are not paid down are a threat to building wealth and developing a positive cash flow for your personal finances -- or even your business.

Saving Money: Sell the Car, Buy a Motorcycle

Financial help for families

can mean getting rid of expenses that can erode personal cash flow and replacing them with items that save money.

We are having a debate in our family about selling one of our cars and buying a motorcycle for my son to save money on gas, thereby preserving cash flow. I say "debate" but my wife and son want to sell my favorite car while I have remained silent.

Here are our vehicles:

• Chevy Astro van

year 2000 with gas mileage in the teens. We bought it on eBay in 2003 for less than $ 7,000 and it runs well. It has 140,000 miles. We drive it about 800 miles per month.



• Nissan Pathfinder

year 1998 with about 18 mpg. We bought it from our mechanic and it runs well. It has about 133,000 miles and I expect it to reach 250,000 to 300,000 miles. I drive it about 1,000 miles a month.



• Ford Taurus

year 2000, gets about 23 mpg. We bought it for less than $ 4,000 a few years back and it runs fine, too. It has about 122,000 miles but I don't expect it to get more than 175,000 miles without problems. Perhaps I'm wrong.



• Nissan Maxima

year 1988, gets close to 30 mpg. We bought it from a friend for $ 1,000. It has almost 160,000 miles and we use it to putt-putt on errands. It runs okay.

So my son and wife want to sell the Pathfinder since we can get the most money for it and use the money to buy him a motorcycle to save on gas expenses. He goes to college at Azusa Pacific University about 20 miles from our house.


I would prefer to sell the Taurus since I believe it won't last as long as the Pathfinder. I believe the gas savings with the Taurus may be offset by potential mechanical problems.

What do you think? My next step is to calculate the monthly cost on gas between the Pathfinder and Taurus and see if the savings are worth it.

A Home Accelerator Program or Not?

Does it make sense or not to completely pay off your home?

I first heard about the home accelerator program 3 months ago at a free real estate seminar in Pasadena. My friend, a CPA who I wrote about last year when he bought a rental home in Houston, felt it is a good idea.

My wife and I are applying for a home loan on an investment property out of state and we looked into the accelerator program. I had a discussion with a mortgage representative today as well.

The idea is you can pay off your home in half the time of a conventional mortgage by using your home equity as a line of credit. You deposit your income into the account and the unused cash helps reduce your principal at a much faster rate since interest is calculated at the end of the month on the principal rather than on the interest.

The attractive part for us is you could use your home equity to invest in other properties without having to take out a loan.

The idea, the representative told me, is you can have up to 80% of the equity in your home available to use.

And that started me thinking . . . why would I want to do that?

I kept coming back to a small amount but she reminded me that I could use up to 80% of my equity.

We live near Pasadena, California and even though real estate prices have dropped we nevertheless have owned our home for 14 years. It has more than tripled in value since we first bought it meaning we have lots of equity available . . . maybe too much if we weren't disciplined.

That got me to thinking, do I really need a home accelerator program? Why can't we just make extra payments to principal?

In my next post, I'll share what information I've uncovered.