passive income

What to Do if You're Laid Off Before You Retire

Tim Lemke — Fri, 12 Jan 2018 09:30:09 +0000

You had a plan. You were going to work for a few more years, and head gracefully and gleefully into retirement. But your company didn’t cooperate. You’ve found yourself laid off, and wondering what to do next.

The job market is tough for older people, and if you are a few years away from your intended retirement date, you may be unsure of the best next steps. Can you retire early? If not, what jobs are out there for people your age? Do you even want to work full-time anyway?

Everyone’s situation is different, but there are options for older people who find themselves laid off before their planned retirement.

Look for a new full-time job

There’s no question that folks over 50 may have a tough time in the job market. Ageism exists, especially in fields where employers assume young people will have more technical skills. But it’s entirely possible to find a new position, and there are companies that will value the experience and knowledge of an older worker.

The American Association of Retired Persons (AARP) names several great jobs for people over 50, including accountant, personal trainer, landscaper, and interpreter. Just keep in mind that it may take weeks or even months to land a position you want. This is why it’s important to maintain an emergency fund with at least three to six months' worth of living expenses.

Find a fun part-time job

Recently, my family and I went to Pittsburgh and took a tour of the ballpark. Most of the tour guides were older men who appeared excited to be there, and the team seemed to appreciate the knowledge and enthusiasm they brought to the job.

If you feel like you need to work to stay busy and bring in some dollars, but don’t need to work full-time, try to find something that channels your passion. Maybe it’s working outside doing landscaping or lawn care. Perhaps it’s doing home improvement work, or tutoring students in English. If you can find something you enjoy and get paid for it, that may be better than landing a full-time job. (See also: 6 Great Retirement Jobs)

Seek consulting gigs

While companies aren’t always eager to hire older workers on a full-time basis, they have been known to rely on them for expertise on a contract basis. Companies still must rely on older workers who have institutional knowledge and some specific experience. In fact, it’s not unheard of for workers to be laid off only to return as a consultant, doing similar work. (I once met a guy who was brought back and found himself sitting at his same old desk!)

If you do find yourself laid off, consider marketing your services on a contract or as-needed basis. You may be surprised at how lucrative some of these opportunities are, and you will have some job flexibility that may help you phase into retirement for good.

Adjust your budget

The good news about being laid off when you are older is that your living expenses are generally lower. But you’ll still need to reduce your spending if you find yourself without a job. Track all of your expenses and see where you can cut costs. Savings may come from canceling your cable TV subscription, or reducing your food budget. You may save money on gas and other car expenses if you aren’t working. You’d be surprised where you can find ways to cut costs, and you may even find that you will be comfortable with a lower standard of living, allowing you to retire for good. (See also: 6 Ways You Can Cut Costs Right Before You Retire)

Go ahead and retire

Perhaps you planned to stop working at 63, but you were laid off at 59. You may think you need to keep working to hit your retirement savings goal, but you might be much closer than you think. Maybe your savings goal was larger than necessary and you’re actually right on target. Perhaps you only need to make modest adjustments to your standard of living, like reducing your spending for a few years, or adjusting your investment strategy to boost your income now while still growing your nest egg.

You may find yourself retired early, but those few years may not make much of a difference. If you have a financial adviser, talk with them about how to make your money work for you now and last a little longer. Your adviser may also be able to help you avoid any penalties and taxes from withdrawing money from your retirement accounts early. (See also: 5 Ways to Handle a Forced Early Retirement)

Check if you can collect Social Security

Let’s say you find yourself laid off at age 62. The good news is that you are old enough to begin receiving Social Security benefits, though your payments will not be as high as they would be if you waited another five years (until your full retirement age). At age 62, you’ll receive about 70 percent of the maximum monthly benefit.

If you can wait until you are older to collect, you’ll end up receiving more benefits in the long run. But even a partial benefit is better than nothing, and may allow you to retire early. (See also: 5 Questions to Ask Before You Start Claiming Your Social Security Benefits)

Identify passive income sources

If you are unable to find a new job or unsure if you want to return to the workforce, it may be time to get creative in how you make money. It’s entirely possible to earn money without a “real” job, if you know where to look. Adjusting your investment portfolio to earn money from dividend stocks is a popular option among older Americans. With dividends, companies pay a portion of their income to shareholders, and returns can be much higher than interest from the bank.

Real estate can offer a passive income source as well. If you have the funds to buy an investment property, consider renting it out and earning money from tenants. (Just keep in mind there may be some work and expense associated with ownership.)

If you are computer savvy, you may be able to make money from blogging or hosting videos on YouTube. This content can earn you money from advertising long after you’re done producing it.

The job market may be tougher for older citizens, but that doesn’t mean you can’t earn money. And who knows? Some of these sources may be able to continue to bring you income even after you retire for good. (See also: 5 Ways to Make Passive Income Online)

Start a business

Maybe you spent your work life wishing you could be your own boss, but the stars never quite aligned. Perhaps now is the time to take the plunge and become an entrepreneur. There’s obviously some risk in starting a business, but you may be at a point in your life where you have some money saved and relatively low living expenses. You may have years of work experience that you can bring to the table to get the business launched, and you can now set your own work schedule.

Your business doesn’t necessarily have to involve starting the next Amazon.com. It might be something more low key, like a math tutoring business, a small handyman company, or selling handmade items.

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

3 Online Affiliate Programs That Can Make You Extra Cash

Nick Wharton — Fri, 29 Dec 2017 09:30:06 +0000

The web is awash with deceptive stories and clickbait ads claiming you can make millions online with little or no effort. So it's no wonder people think earning money via the internet is a shady and fruitless endeavor. However, there are plenty of legitimate methods of making money online, and affiliate marketing is one of them.

There are thousands of reputable companies looking to work with publishers to help promote their products and services. Whether you're looking to earn a full-time salary or supplement your income with a few extra dollars each month, affiliate marketing is a great option to explore. Here are three affiliate programs that can earn you money online.

What is an affiliate program?

Affiliate programs are a form of online marketing employed by advertisers seeking referrals from a wide range of sources. They usually offer a commission, which reflects a percentage of every sale made from the referral link. So if you have a website or a mailing list and you link to a product or retailer using a tracking link, the advertiser will know that that customer came from your link and if they buy, you will be paid commission.

It's beneficial for the company because it receives both advertising and sales leads that it wouldn't necessarily be able to access otherwise. It's also beneficial for you and their other affiliate publishers, who are able to make money from sales without actually having to get involved in handling the transaction. Since all you're doing is essentially connecting people with products, affiliate marketing can be one of the most time- and cost-effective methods to make money online. (See also: 5 Ways to Make Passive Income Online)

How to set up your affiliate program

If you have an established following, whether it's on your company website, a personal blog, or on social media, then it's easier to find an affiliate program you can implement. Some have requirements that you'll need to meet before being accepted as an affiliate, but many are open to anyone and have a very basic registration process.

Once you've signed up, you'll be able to create unique links that allow the company to track them back to you so you get credit for the referrals you provide. It's important to read the fine print to know the limitations of how and where you're allowed to include the links because it varies from program to program. You can then start dropping these links into places where readers are likely to click on them and buy whatever is being advertised. These places include blog posts, newsletters, and Twitter and Facebook posts. (See also: How to Earn Extra Income With Twitter)

One of the most effective ways of making money from affiliate programs is to link to the promoted products or services from your own website or email list. This allows you to build, analyze, and target your audience effectively. It's quick and easy to start a website if you don't already have your own, and it's possible to begin earning affiliate income within a matter of hours once the website is up and running. (See also: How to Turn Your Instagram Account Into a Paying Gig)

Booking.com

As one of the top accommodation booking sites on the internet, Booking.com offers more than a million properties for travelers, including everything from hostels to luxury apartments. The Booking.com affiliate program is also one of the foremost and well used programs around.

Commission is only paid when people book via your referrals and then complete their stay at their chosen property. Because of this, and the fact that customers sometimes cancel their bookings, the payment cycle is often slightly more complicated than those of other affiliate programs, but the platform allows you to easily track and analyze your earnings.

Thanks to the way the commission payments are structured, the more bookings that users make through your links, the higher the commission you'll receive. The rates start at 25 percent and go up to 40 percent once you've surpassed 501 bookings. To clarify, that means 25 percent to 40 percent of Booking.com's commission, so don't expect to get that percentage of the overall cost of the hotel stay.

Amazon

The Amazon affiliate program, Amazon Associates, is probably the best known program on the market. When it launched the program in 1996, Amazon was one of the pioneers of what was a new form of online marketing at the time. Many people attribute a large part of the company's resulting success to it.

One of the reasons that it's so successful is because the program is free and extremely simple to join. The interface is also easy to use. This means that you can start earning money right away once you've signed up. You earn money when a customer clicks on one of the links you're promoting and then buys something on the site. It doesn't even necessarily need to be the product you've recommended.

If they purchase anything within 24 hours, you'll get commission, and even if they just place items in their cart during that time, but purchase them within 90 days, you still earn. This is basically a 90-day cookie for any cart items, which is a very generous cookie duration.

Amazon's main site is renowned among affiliate partners for being a conversion machine, which means that just by providing links, the likelihood of the reader clicking and then buying something is relatively high. With Amazon Associates, you have various tools that allow you to implement the links in different ways such as banners, image links, and text links. You can earn up to 10 percent in fees.

ClickBank

Started in 1998, ClickBank is a go-between entity that connects vendors wishing to market their products and services, and publishers looking for relevant products to promote to their audiences. Whereas Amazon Associates is an affiliate program with a defined fee structure, ClickBank is an affiliate network that takes care of multiple vendors’ affiliate programs, so the commission structures vary. The vendors choose the commission rate, which is typically between 30 percent and 50 percent (though it can range from 1 percent to 75 percent). That’s significantly higher than Amazon rates of 1 percent to 10 percent, but of course, Amazon generates a much, much higher volume of sales.

ClickBank’s products and services, many of which are digital, are different from Amazon’s product line. So, many affiliate marketers will sign up for both ClickBank and Amazon to maximize their product portfolio and potential profits.

Signing up for ClickBank only takes a few moments, and it costs you nothing to join as an affiliate. There's no screening or approval process, and once you've joined, you can start making commission right away. There's a wide range of products for you to start marketing, so whatever niche you're in, you should find something relevant.

The great part about ClickBank is, your account is credited in real time, meaning you can keep close track of how your affiliate sales are performing.

Be sure to follow FTC endorsement guidelines

When promoting affiliate products online or within emails, it's important that you follow the guidelines from the Federal Trade Commission so that your readers and followers are well aware that they are clicking on affiliate links and you will be making money from their purchase. It's simply good business to be completely transparent about the nature of the transaction.

According to the FTC Website:

"If you disclose your relationship to the retailer clearly and conspicuously on your site, readers can decide how much weight to give your endorsement.

In some instances — like when the affiliate link is embedded in your product review — a single disclosure may be adequate. When the review has a clear and conspicuous disclosure of your relationship and the reader can see both the review containing that disclosure and the link at the same time, readers have the information they need. You could say something like, "I get commissions for purchases made through links in this post." But if the product review containing the disclosure and the link are separated, readers may not make the connection."

What to watch out for

Not all affiliate programs are created equal, so if you're trying to maximize your affiliate revenues, it's important that you know a few key things that will help you to ensure that you're getting paid for every referral.

Percentage of sale (commission rate)

Of course, the number one thing you want to look at is the commission rate. What percentage of the customer’s payment will you receive? In some cases, there is a flat fee for every sale made, and sometimes you will get a percentage of the total sale. Keep your eye out for "percentage of commission" sales, as this means that you're not taking a percentage of the total sale, but rather a percentage of the company's commission.

Average sale value

Once you know what the commission rate is, it's a good idea to check what the average sale is so that you know how much you can expect to earn (on average) from each sale.

Cookies

Affiliate marketers love cookies! Cookies are small pieces of data retained on computers by browsers that contain various pieces of information in regards to a specific website visit. In the case of affiliate programs, most of the good ones include a 30-day cookie or longer, meaning if someone clicks your link and visits the site, you'll still get paid as long as they return to the site and make a purchase within 30 days. Cookies that linger even longer are a bonus!

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Simple Money Milestones Anyone Can Hit

Tim Lemke — Wed, 15 Nov 2017 10:00:06 +0000

Achieving financial freedom is really about setting big goals and going after them. But these goals can sometimes seem overwhelming. Saving enough for retirement, a new home, or a college degree is a big task. Eliminating debt can also feel impossible.

That's why it helps to set smaller, more manageable goals and work from there. You won't save all of your retirement nest egg or pay off all of your credit cards tomorrow, but there are steps you can take to build your confidence and get you on your way. Here are some achievable financial milestones that you can go after.

1. Open a retirement account

Just open the account. You don't even have to invest more than the minimum: Simply take that first step and open your 401(k) or individual retirement account. By checking this off your list, you have removed a big mental hurdle from investing, and you may even begin getting matching contributions from your employer even if you are not contributing much yourself.

With the accounts open, you'll be able to begin putting more sizable chunks of money aside and buying stocks and mutual funds when you feel you are ready. But if your accounts aren't open to begin with, you might talk yourself out of getting started. (See also: 5 Retirement Accounts You Don't Need a Ton of Money to Open)

2. Be independent

Do you still rely on your parents or other friends and family for financial help? Do they assist you with rent payments, credit card bills, and other expenses? Getting help from others isn't a bad thing, but there comes a time when a young person must learn how to maintain financial independence.

This means being able to live on your own, pay your bills, and avoid debt without seeking "loans" from the Bank of Mom and Dad. This is not always easy, especially in an era when many young people have student loan debt — but this should be a goal for anyone in their 20s. (See also: 11 Money Habits That Make You Look Financially Immature)

3. Reduce your credit card debt

Ideally, you want to pay off the whole credit card balance as soon as possible. But for some of us, we just want to keep the balance from growing. Sometimes, we're stuck in a spiral of making minimum payments, while interest charges are adding to the debt. You may not be able to get rid of your credit card balance overnight, but you can take a big step toward that goal by simply reducing the balance the next time your bill is due.

This will mean paying substantially more than the minimum required to make a real dent into the principal. If you can do this once, you'll prove to yourself it's possible to reduce your debt burden and eventually get rid of it entirely. (See also: The Fastest Way to Pay Off $10,000 in Credit Card Debt)

4. Get your credit score over 700

Many people have trouble getting ahead financially because they are saddled with a bad credit score. A low credit score makes it hard to get favorable rates on loans, and can lead to a spiral of debt that's hard to escape. The good news is that you can fix your credit score over time by making the right financial choices, and your bad finances of the past don't have to burden you forever.

A credit score of 700 is considered "good" by most credit bureaus. To get there, you need to pay your bills on time and try to pay off all balances in full. If you have missed payments, get current as soon as possible. You don't want to close your credit cards after paying them off, as this can lower your percentage of available credit and ding your credit score. But you should avoid the temptation to open new cards, as that only increases your potential for adding debt. Your credit score may take time to rise, but hitting 700 is achievable if you make the right moves. (See also: 5 Ways to Improve Your Credit Score Fast)

5. Earn $1,000 in passive income

One of the great ways to give yourself some financial breathing room is to get revenue from sources that don't require a lot of work. This could mean purchasing dividend stocks, in which companies pay out portions of their earnings each quarter to shareholders. It might mean buying and renting out properties, licensing your creative works, or building a website that generates some ad revenue. Passive income may require some work and expense up front, but could provide you with a solid amount of extra cash without extra effort over time.

Try to earn a spare $1,000 in the next year. Then try and boost that figure. Before you know it, proceeds from these passive sources could be a significant total of your overall income. (See also: 5 Ways to Make Passive Income Online)

6. Save $100 in a month

When your income is barely covering your living expenses, it may seem impossible to save even a few bucks a month, let alone $100. But most people should be able to hit that $100 milestone by taking a good look at their spending.

Begin by tracking your spending in a detailed way, making a note of where every dollar goes. Then categorize your spending. You might have a category for eating out, and another for gas or kids' activities. By examining your spending this way, you will likely find areas where you can cut costs. You may have to make some hard choices, but they will be worthwhile. A few dollars here and there can add up to $100 or more. And $100 a month can add up to thousands of dollars over time.

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Ask the Readers: Do You Have Passive Income?

Ashley Jacobs — Tue, 17 Oct 2017 08:30:06 +0000

Editor's Note: Congratulations to Alan, Daniel, and Mhepz for winning this week's contest!

Most strategies for building wealth involve developing one (or more) streams of passive income. It can take some work to set up, but once you have your operation running, producing income should require no or very little effort on your part. Some examples include publishing a book, becoming an affiliate marketer, selling professional photos online, and earning real estate rental income.

Do you have passive income? What do you need to do to keep the passive income stream running smoothly? If you don't have passive income right now, are there any ideas that you can see yourself trying?

Tell us if you have passive income and we'll enter you in a drawing to win a $20 Amazon Gift Card!

Win 1 of 3 $20 Amazon Gift Cards

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Good Luck!

Tell us if you have passive income and we'll enter you in a drawing to win a $20 Amazon Gift Card!

This article is from Ashley Jacobs of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways to Make Passive Income Online

Anum Yoon — Wed, 27 Sep 2017 08:30:11 +0000

The internet is responsible for many wonderful things, from letting you shop whenever and wherever you want, to the ability to view unlimited cat videos. And if you're savvy, the internet can also be a great place to develop income-producing assets for yourself.

Income-producing assets are products you create or invest in that earn passive income. In essence, passive income allows you to earn money without having to do additional work after creating the asset. There are several ways you can do this online. (See also: 7 Surprising Ways to Earn Money Online)

1. Sell a course or ebook

Everyone's an expert on something, right? And the world is full of people looking to learn. One income-producing idea is to develop an online course. People will pay to learn what you know about the best travel spots in Europe, how to be a better public speaker, and everything in between. There are multiple online platforms where you can host an e-course (though you will have to pay for most of them), or you can host the course through your own blog or social media channels. (See also: Can You Really Make a Living as an Ebook Writer?)

There are plenty of tutorial, video course, and ebook content creators out there generating a steady monthly income. How you design, develop, and create your course or ebook will be very dependent on what you teach, how you teach, and the best way for your readers to learn. This all requires some legwork upfront, but if you can get the ball rolling, your online book or course can continue generating passive income well into the future. (See also: How I Made $400 in 10 Days by Selling an Online Course I Created)

2. Earn interest on a loan

If you have some cash to spare, you could earn a nice return by investing in peer to peer lending. Peer to peer lending removes financial institutions from the equation. With sites like Prosper or Lending Club, you can put up a sum of money — whether it's a few hundred dollars or a few thousand — to fund a personal or business loan yourself. Just like if they had worked with a bank, borrowers then pay the loan back with interest, which acts as a passive income stream for you. Most sites report lenders see a return of between six and seven percent. Note that each peer to peer lending site will have its own qualifications and terms and conditions, so do some research to find the best option for you. (See also: Everything You Need to Know About Peer-to-Peer Investing With Lending Club)

3. Become an affiliate

Affiliate programs pay you in exchange for sending them customers via your website, blog, or social media channels. The best-known example of a popular affiliate program is Amazon, which pays "Associates" commissions of up to 10 percent.

Here's how it works: Say you run a food blog where you showcase your favorite recipes. People who read your blog are likely interested in all things cooking: cookware, cookbooks, kitchen remodeling — you get the picture. If you include an Amazon affiliate link to a mixer you're using, for example, you'll earn money any time a visitor clicks through from your blog and makes that purchase. (See also: 5 Easy Ways to Make Extra Money Blogging)

If you want to expand your affiliate partnerships beyond Amazon, you can join networks that connect you to companies looking for affiliates — ShareASale can help you do this. Also, if there is a particular company you would like to work with, check out their website. Usually at the very bottom of the page, in the footer bar, you'll find a link to learn about any affiliate program they might offer.

4. Use AdSense

AdSense, an advertising service run by Google, operates in a similar fashion to an affiliate program. To use AdSense, you'll also need to have a content site, YouTube channel, or blog with views. But rather than letting you promote or link to a specific item or brand, AdSense automatically places relevant ads on your site for readers to click through. These ads won't be random; they'll relate in some way to the type of content you normally post. You'll automatically earn money for views and clicks on your ad. The more views you get, the more money you can make. (See also: Can You Really Make Money by Starting a Blog?)

5. Sell your photos

Do you have a good eye for photography? Are friends and family always commenting how much they'd love one of your photos hanging on their wall? Take the hint! Build a portfolio storefront with sites like SmugMug or Zenfolio where fans of your photography can purchase prints. Many gallery sites do require paying for a monthly "plan" and may take a small commission, but their bottom tier packages are often fairly affordable at a few bucks per month. Many also have plugins that allow you to process print orders with high-quality photo labs and drop-ship directly to your customers. (See also: Earn Extra Income With Your Smartphone Camera)

You could also sell your own photography to be used as stock photos. While there are many big-name stock photo agencies out there, such as Getty Images and Shutterstock, becoming a contributor often involves a lot of competition and a lengthy application process. Selling your stock photography on your own website allows you to set your own prices, licenses, and keep 100 percent of the earnings for yourself.

The internet has opened up a world of opportunity for anyone to earn a little extra money. Think of what you're passionate about, what skills you have that someone might be willing to pay for, and create a revenue generating asset that will keep extra cash flowing into your budget. (See also: 13 Ways to Make Money Online That Aren't Scams)

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This article is from Anum Yoon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: 30+ Passive Income Ideas That Will Make You Money

Amy Lu — Thu, 10 Aug 2017 08:30:05 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on ideas for passive income, tips to organize your garage, and effective ways to meet your new neighbors when you move in.

Best Money Tips: How to Start Earning Passive Income — Today!

Amy Lu — Tue, 09 May 2017 08:00:10 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on passive income ideas you can start today, tips for getting through the airport faster, and why you should buy your next car online.

8 Money Moments That Should Be On Everyone's Bucket List

Paul Michael — Mon, 02 Jan 2017 10:00:07 +0000

The big house. The fancy car. The 'round-the-world vacation. When you think of a bucket list, and mention money, it's easy to start daydreaming about things that cost a fortune.

However, you don't have to have your head in the clouds to achieve a bucket list of money moments. Here are eight of the big ones. Many of them are already within your reach.

1. Becoming Debt Free

Let's start with the most obvious money moment we should all be striving for — eliminating our debt. It's certainly not easy, and it's not something that can be done quickly. This requires careful planning, a lot of willpower, and the willingness to forgo the little luxuries we all like to have in our daily lives. But, it can be done.

One way to do this is by snowballing your debt. You take the smallest debt you have, perhaps a store card or a loan, and you figure out a way to pay as much off that balance as you can each month. While you're doing this, you pay the minimum on your other debts. When that small debt has been paid off, you apply that to the next debt on your list, and just keep going. Eventually, you'll have everything paid off, including the car and the mortgage. What does "eventually" actually mean? It might be a few years, but if you stick to it, you'll achieve your goal.

2. Putting Work That You Love Ahead of Salary

All too often, we do work that doesn't really fulfill us, but gives us the money to pay the bills, save for a college fund, and go away on vacation every year. However, as we spend most of our lives working, it makes sense that the job should be one that really brings us happiness.

By following some of the advice mentioned earlier, it is possible to put salary and benefits second to job satisfaction. And when you don't need the money, the job market looks very different. Suddenly, your options are wide open. If you love working with animals, you can leave the rat race to care for dogs and cats. If you love working with children, or the elderly, you can find careers in those fields. They don't pay as much, but the rewards to your soul are much greater.

3. Building a Solid Emergency Fund

Some 50 years ago, you could start a job at a company in your youth, and with hard work and dedication, retire from that same company 40 years later. That time has passed. These days, corporations are constantly looking for ways to cut costs and give greater value to their shareholders. That means mergers, streamlining, and of course, layoffs.

When the worst happens (and it will probably happen more than once in your lifetime), you need to be adequately prepared. Experts say your emergency fund should have three to six months' living expenses in it. Some say more, especially when the economy tanks and jobs are scarce.

How do you do that, especially when you're trying to pay down debt? You need to first set a target — how much will be in the fund? Then, you need to take advantage of great interest rates, low or no-fee accounts, and apps like Acorns that invest the change from every transaction. Put a dedicated amount to one side each month, and stick to it. If that means no eating out, or no trips to the cinema, so be it. Once your fund is established, you can loosen the reins a little.

4. Creating a Last Will and Testament

Very few people like the idea of creating a will. The whole idea of planning for a life that does not have you in it is morbid to say the least. But, it's essential, especially if you have family and have specific ideas about who gets your possessions.

With a will, you can ensure that your last wishes are met. You can name an executor, who will take on the task of wrapping up your affairs. You can be very specific about who gets what, and how it is all divided. You can name a guardian for your children and pets, and a property manager. This is all very important. If you do die without a will in place, it can lead to a lot of infighting and malice. And in some cases, it can split families apart. The state will decide how to distribute your belongings, and it will not be done with the delicacy or care that you would like.

5. Earning Passive Income

Passive income is a way to earn money using little-to-no effort, usually from a business or venture you have set up yourself. Examples of passive income include earnings from rental properties, royalties from intellectual property (books, songs, software, etc.), investment portfolios, renting out tools and equipment, and even interest from lottery winnings. The latter is not something you have much control over, but everything else is achievable.

Look for ideas on ways to make lucrative money on the side without the need for a lot of regular work. It may take some serious elbow grease on the front end, but once that's established, you can sit back and watch the money come rolling in.

6. Buying Something Big With Cold, Hard Cash

This one is certainly not as important as the money moments preceding it, but it's worth aiming for. When you can buy something big (a car, a house, a boat, an RV) with cash, you have so much more power to negotiate. And you will save a staggering amount of money because you are not paying compound interest.

Let's look at a home. Cash buyers usually get a discount, and even if it's only 3%, that can mean $6,000 on a $200,000 home. So let's say the cash price is $194,000, versus the $200,000 mortgage price, and the mortgage buyer puts down 10%. Over 30 years at 4%, that $180,000 loan has become around $310,000! By paying cash up front, you are literally saving the cost of another smaller home. It's not easy, but once you pay off your debts, you can quickly accumulate income. With some savvy investing, you could one day feel the satisfaction of saying "And how much if I pay cash… right now?"

7. Negotiating a Higher Salary

Some people work hard, put in the hours, and accept the 3% raise they get each year, which barely covers the rising cost of living. Other people grab life by the throat, and get a bump in pay simply by asking for it. Before you do it, you'll need some good data on your side.

First, look at the position you are in on Salary.com and Glassdoor. What are people being paid at other companies in your area? Are you earning a competitive salary, or are you underpaid? (If you're overpaid, you may want to hold off on asking for even more…that could backfire).

Next, assemble all the reasons that you believe you are owed more money. Did you save the company a lot of money? Did you bring in new accounts? Did you work 70-hour weeks all year long? Just like buying a car, you want to do your homework. Then, call a meeting with the boss, and lay it all on the line, politely but assertively.

8. No Longer Living Paycheck to Paycheck

The number of people living paycheck-to-paycheck in America may surprise you. It's not one in four, or even half of us. No. Three out of every four Americans are struggling to make ends meet.

For many, it's a case of not being paid enough, or having crippling debt repayments. For others, it's more about bad budgeting and excessive spending. Whatever the reason, you should have a plan to get beyond living paycheck to paycheck. Have a big enough cushion in the bank to make life more comfortable. And, cut out the expenses that are dragging you down. With dedication, you could be one of those people who doesn't count the days to the next check going in the bank.

This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

15 Ways to Make Money Outside Your Day Job

Philip Brewer — Thu, 19 Nov 2015 19:03:04 +0000

Extra money is great. At a minimum, extra income is more change in your pocket. Beyond that, it can diversify your income sources and make your finances less vulnerable to a disruption.

There are many types of non-salary income, but one way they're often divided up is passive versus non-passive. Consider these 12 sources of additional income.

Passive Income

Passive income tends to be investment income: Money you get for letting someone use your money or your stuff. Here are the classic categories of passive income. (By and large, this whole category is only available if you have money to invest.)

1. Interest

Interest is money you get from something like a bond, CD, or savings account, where someone pays you to use your money.

Not so long ago — before the financial crisis — there were plenty of reasonably safe interest-bearing investments that paid 3%, 4%, or even 5% over inflation. Those days are long gone. Now, CDs or bonds can barely beat inflation, and that's only if you're willing to tie your money up for a long time. Still, interest income can serve as a secondary income stream, and the opportunities are likely to get better in the near the future. (So, be careful about locking up your money for the long term at current rates.)

2. Dividends

Dividends are your share of the income earned by companies in which you own stock, and are also earned from baskets of investments that hold stocks, such as ETFs or mutual funds. Unlike the interest earned on a bond or CD, dividends can rise or fall unpredictably, depending on the success of the firm or the fund. Although some risky companies can pay high dividends, stable companies tend to offer modest returns, typically under 5%.

3. Rents

In theory, rents can be pure investment income, like interest and dividends, but in practice, being a landlord is more like taking on a second job — you have to find tenants, accept rent payments, keep the building maintained, deal with broken appliances, and so on. You can hire a management company to do that work, but that's an extra expense — and the income still isn't purely passive, because you still have the work of managing your relationship with the management company.

Still, rental income can be an incredibly flexible second income stream. Airbnb, RelayRides, and similar companies now enable individuals to rent out things like spare bedrooms, vehicles not in use, and earn extra income with less effort.

4. Royalties

Royalties are money that you get for letting someone make more limited use of something that you own. If an oil company operates a well on your land, they'll pay royalties. If a publisher sells a book that you wrote, they'll pay royalties. The possibilities are vast, and in essence include anything people can use — land, books, photos, patents, trademarks, etc.

It's worth noting that most people who sit down to write a book don't end up getting any significant income from it. That's probably even more true of people who sit down to invent something. Still, books, online stock photography, and even less-successful inventions can all generate extra income and diversify your earnings.

Non-Passive Income

Non-passive means you have to get out there and hustle up this extra income in your spare time. Some take a lot of hustle.

5. Working Another Regular Job

For someone working for wages, a second (or third or fourth) job is a classic source of extra income. If you're working for a salary, you'd probably be breaking your employment agreement to work another job, but there are ways to work for pay without breaking the rules. Check with your employer to determine your company's specific policies.

6. Working at an Irregular Job

Not all jobs require a regular time commitment. Some can be done on an ad-hoc fashion, such as:

Casual labor, like a handyman, house painter, gardener, house cleaner, or dog walker.
Freelance work (usually skilled or semiskilled labor done outside the range of regular employment), such as a web designer, photographer, adult education instructor, bicycle messenger, etc. Many occupations that fall into this category require special training, certification, or even licensing.
Seasonal work, such as a department store Santa, sheep shearer, etc.

7. Service Something That Makes Money

The classic option here is a vending machine. Your investment is modest — the cost of the machine, and the cost to stock the machine the first time. Your labor is modest — visiting the machine to restock it and remove the cash.

Vending machines used to be a great way to make a modest amount of money, especially if you knew someone who would let you put a machine in a reasonably high-traffic area either for free, or for a piece of the action. You could start small and then buy more machines. Back in the day when coin-operated video games were a thing there wasn't even any restocking needed — you just went as often as necessary to take out the money.

8. Running a Small Business

Running a small business can be a great way to make money from a source other than your salary. The range of options for small business are infinite. Just for starters, virtually all the "irregular job" items from the previous section could be just as easily arranged as a small business. Instead of painting houses or walking dogs, you start a house painting or dog walking business. Plus, running a business may confer certain tax advantages (deductions, anyone?) which can make it an even healthier secondary income source. The next two ideas can also be structured as small businesses.

9. Sell Something You Make

The list of things you can make and sell is endless — jellies and jams, soaps, jewelry, garden produce, baked goods, maple syrup, pottery, scarves, etc. I wrote a bit about the line between hobby and small business in my post Make Your Hobby Pay Its Way.

10. Sell Copies of Something You Made

This is a variation on the point above about royalties. Instead of letting another company sell copies of something that you've created in return for royalties, you can sell the copies yourself.

The classic case is self-publishing a book, but there are a lot of other possibilities that fall into this category. For example, If you know how to do something, you could create a video teaching how to do it, and then sell it on DVD.

This option really lends itself to digital sales, because the cost of production is zero — ebooks, online video courses, phone apps, etc.

It's tough to make much money this way, because there's so much stuff out there already, often for free. Sales are likely to be low, and unless you have a very narrow, very focused niche, you're going to face a lot of competition.

Still, this can be a win, especially if you want to create something for your own reasons — a phone app that does something you want a phone app to do, a drawing that speaks to you, etc. If you're making the thing because you want to, the extra effort to sell copies is quite small, and will probably bring in a little money.

11. Sell Something You Gather

There are still places where it's legal to collect things and sell them — mushrooms, pine boughs, sea shells, rocks, insects, etc. Success requires access to a place where you can collect, and usually requires more than a little skill in knowing what's worth collecting, and how to sell it.

12. Sell Something You Buy

If you can buy something cheap and sell it for more than it cost, you can make money on the markup. To make a reasonable profit, you usually have to add value in some way. The two classic ways are: Import the item, or repackage a cheap, bulky item into smaller units.

Importation: Say you find something sold overseas that you really like — a clothing item or a gadget or a tool — that just isn't a thing in the U.S. You can find the manufacturer, buy a modest quantity at wholesale, import them into the US, and sell them at a markup. Your added value is the capital to buy the stock and the effort handling the complexities of importation.

Repackaging: Almost anything is cheaper in bulk, sometimes a lot cheaper. My wife buys a brand of quilt soap that's good for washing wool. She can get it in 8-ounce bottles for $8 or $9 dollars — about $17 a pound. The stuff has a single ingredient: sodium lauryl sulfate, the detergent in baby shampoo. If you buy by the barrel, sodium lauryl sulfate costs less than $1 a pound — highly profitable, even after paying for bottles. Anybody can do the same thing with anything that's cheap in bulk but can be sold for more in reasonable quantities.

13. Teach a Class

If you have some skill — and if you also have some skill at teaching — you can make money offering classes. Where I live, people can arrange to teach classes through the park district, recreation center, the local library, YMCA, community college, and at least two different senior organizations. Many of the stores that sell arts or craft supplies also offer classes with local artists and craftspeople as teachers. And if you're adequately entrepreneurial, you don't need to teach under the auspices of some other organization at all. You can find your own students and teach out of a location of your choice.

14. Put Ads on a Website

Creating a blog or static website and putting Google Ads (or other affiliate programs) on it can generate extra income — just how much depends on the traffic and ad clicks your site generates. It's a competitive space, but if you can produce a quality site with adequate traffic, it may provide a regular source of additional income.

If you have some sales skills, you can also market your site to individual companies and get them to buy ads for a lot more money. That's another piece of work, however. It would make your income a little less passive, because now you're a salesman on top of everything else.

15. Create a YouTube Channel or Podcast

If you like making videos, this can be a source of modest income. If making videos seems like a lot of work, you're going to quit before you make any money from Google Ads on your YouTube channel. Still, if you make videos that go viral, there's the potential to make quite a bit of money. Some YouTube stars derive significant income from their videos.

Podcasts are a little more complex to monetize, because you don't have the option of just putting ads on the page somewhere; you actually have to include the ad in the podcast itself. On the other hand, the ads are worth more, because the listener is pretty much stuck listening to the ad from beginning to end.

There are podcast networks that offer tools to help with creating and making them easy for listeners to find. Some of them also have ad networks, although you'd probably make more money if you did the work of selling your podcast to sponsors.

How do you earn extra income?

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This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Winning Ways to Build Passive Income

Ashley Jacobs — Thu, 17 Jan 2013 11:00:33 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some great articles on building a passive income, getting your financial house in shape, and researching your potential house before you buy a home.

How Much Should You Invest?

Xin Lu — Wed, 12 Dec 2012 11:00:31 +0000

"How much should I invest?" is a question frequently asked by savers who want to start making their money work for them. This simple question can actually be quite difficult to answer since there are so many ways to invest and different people have different levels of risk tolerance. Here I will try to answer the question by explaining a few ways to invest and how risky they are, and you can be the judge on what path you should take. (See also: Investments Worth Making With $50 or Less)

Almost Zero-Risk Investments

If you absolutely don't want to lose your money, then you can put it in a high-yield savings or checking account, money market account, certificate of deposit, or U.S. treasury bond. You can put all your money into these investment vehicles and most likely be guaranteed that you won't lose any. The downside is that right now most of these are paying very little interest, so the purchasing power of your money could be eroded by inflation. If you don't have a lot of money and don't want to lose any of it, though, then this is probably the way to go.

Slightly-More-Risk Investments

If you have more than a few thousand dollars to invest and do not want to do too much work, then it is quite easy to just put your money in a mutual fund. However, there are thousands of mutual funds that put money in a variety of investments, and you need to investigate which is best for you. Personally I have invested in one of Vanguard's Target Retirement funds that invests in a variety of index funds. It is a low-cost and low-maintenance option if you want to invest for the long term without having to do much work. However, if you do take this path and you invest in mutual funds that are mostly stock based, you need to know that it is possible for the funds to vary wildly with the ebbs and flows of the stock market. If you tend to panic when you watch your money go down or if you need the money right away, then this is probably not for you.

Investments With More Risk and Work

If you are into research and do not mind watching your investments often, then you can try your hand at building your own stock portfolio by buying individual stocks or ETFs. I have not done this before, but I do have friends and family who like to do technical analysis on the stock market and trade stocks for the short term. They usually park a lot of money in cash and then only place a small portion of their capital on each stock pick or "bet." Many times the stock or ETF is sold within hours or days of their purchase. Some people also trade options, but that's not for beginners. If you want to try your hand at picking stocks, then I would suggest not putting all your money in right away, because it is possible to lose a large chunk in the matter of days. Some people call this speculation, not investing.

Investments With Lots of Risk, Work, and Possible Reward

When you know some investments well, it is possible to invest without putting up any of your own money and instead borrow the capital you need. For example, some real estate investors will borrow 100% of the money they need to buy houses and then either quickly flip the house or rent the house out and then refinance. Other investors borrow the capital for a business and then pay the loan back over years with the business's cash flow. These methods of investing require a lot more work, and if you don't know what you are doing, you are almost guaranteed to lose money. The upside is that if you make money, you are doing it with other people's funds and you can repeat the process and make more money. If you want to go down this path, you would need to do a lot of research and learn about the business you are targeting. You also need to invest quite a bit of your own time.

I have left out a lot of other investing possibilities in this brief article, but the truth is that how much of your time and money you should invest to make more money is completely up to you. That may not be the clear cut answer you were expecting, but what is clear is that if you have saved money, you should probably invest as much of your capital as you can so that eventually you will have an income stream that lets you be financially independent.

How much of your money and time do you invest to make more money?

This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Great Ways to Generate Passive Income

Debbie Dragon — Fri, 04 May 2012 10:24:15 +0000

Earning income passively is a dream for most people, since it essentially means you make money without putting in a significant time investment. Most sources of passive income will require time and some money to get started, but if successful, these opportunities can generate income for you long-term and without your direct involvement. (See also: 4 Reasons Why Everyone Needs Side Income)

Here are some great ways to generate passive income.

Create a Product

You can earn passive income by creating a digital product, whether it is an e-book, audio file, video, or some type of presentation, and then sell it over and over again automatically. Once the initial creation of your product is complete, the sales of the product become passive if you set up an automated system to deliver prospects to your sales page, collect payment, and send out their purchased product.

Other opportunities for passive income by creating a product might include writing a physical book and getting it published — ongoing sales of your book are earned passively. Some people become television writers, and when their series is picked up for reruns, royalties earned are considered passive income.

Sell Advertising

As a website owner or publisher of a popular e-zine, magazine, blog, or newsletter, you can sell advertising space. While you will have to do the initial legwork to create a successful website with a large following, once established, advertising revenue is a passive income opportunity where other business owners will pay you to include an advertisement on your website or in your newsletter.

Own a Business

When people think of passive income, chances are they will immediately think about an online business of some type. The internet makes it possible to start and run a business with low start-up costs and low overhead expenses — which means more profit in your pocket. It also creates opportunities for automation, and anything you can automate provides a potential passive income stream.

While it’s often easier to break into the world of passive income online, passive income is not limited to the internet. Any business you own can generate passive income for you if it is established the right way. If you hire people to fulfill the day-to-day activities of your business, your business should generate a profit after all the expenses are paid. The profit you receive as the owner of the business is passive if you aren’t directly involved in the daily operations.

Become a Landlord

People who own apartments or commercial space earn passive income through the rent payments they receive from their tenants. You receive the payment every month simply because you own the property; and you aren’t exchanging a direct service or time for the rent payment. There are of course, responsibilities that come with being a landlord — but many people find the experience rewarding and a way to establish consistent income without directly trading their hours for dollars.

Investing

A variety of social lending opportunities online allow you to earn a return by helping fund other people’s loan requests in peer-to-peer lending. Your total investment in the peer-to-peer lending site is generally divided up across multiple borrowers to help reduce your risks, but your money helps others gain the money they need, and you benefit by earning a return on the investment in the form of interest. Two of the more popular social lenders include Prosper and Lending Club.

When saving your money in a bank, take some time to compare savings accounts to earn as much interest on your money as you can. If you meet minimum balance requirements, you can also earn interest on money saved in a checking account. Earning interest on your money is a passive way to increase your income, so you may as well take some time to discover your highest earning potential.

You can also build an income investing portfolio to create passive income while growing long-term investments. You may include a variety of investments from dividend stocks to CDs, bonds, and annuities, with the goal of earning money quarterly, semi-annually, or annually without having to sell the investment.

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Trading Work for Never-Ending Weekends: How to Retire Early

Tara Struyk — Tue, 20 Mar 2012 10:00:20 +0000

I’m a long way from retirement, but I’ve definitely had those days. You know the ones I mean — when you’re tired and irritable, when it’s cold and gray and windy, when everything feels like more of the same old thing, when you haven’t had time to do your laundry let alone spend time with your friends, and, on top of it all, the thought of grinding out a few more decades at the office seems utterly insurmountable.

If you hear the word “retirement” on a day like that, it probably sounds a lot more like “emancipation” (I know it does for me). After all, if you didn’t have to work, you could spend more time with your family and your friends, catch up on your golf game, take up new hobbies, travel the world...

Hold on a minute. If you’re slipping away into sweet reverie, you might need a reality check. Here it goes. Retiring early is no dream — it’s a goal, and an ambitious one at that. That isn’t to say you can’t or shouldn’t go for it. But unless you strike it rich in the lottery, succeeding at retiring early will mean careful planning, hard work, and near-superhuman self discipline. Here’s what you’ll have to do to make it happen. (See also: Deciding What You Want Out of Retirement)

Save — a Lot

You probably already know that experts recommend that you save a lot for retirement. Exactly how much is a matter of debate. It’s also highly personal, as it depends on your lifestyle, what you want to do during retirement, and (everyone’s least-favorite calculation) how long you think you’ll live. This is where things get tricky in terms of retiring early. In essence, working for a shorter period of time puts you at a disadvantage on both ends of the saving equation: you’ll have fewer earning years, and more years during which you’ll have to rely on your savings.

So how much might you need to save? Rather than start with someone who makes six figures, let’s look at averages. The medium income in the U.S. is $50,000. Average life expectancy is almost 78 years. If you are 35 and would like to retire at 60 with 80% of your pre-retirement income, you will need to save about $1 million — and that’s assuming you get the estimated Social Security payment. You can check out the retirement calculator I used to figure this out, but no matter how you fiddle with the numbers, retiring early will add up to a big one.

Live Cheap

Saving enough to retire early will mean living on less than you make, and you’d better get used to it; your Spartan lifestyle will become even more crucial when you stop working. When you’re working eight (or more) hours a day, a wide-open schedule can seem like a dream come true. But there’s another financial benefit to working that you may not have thought of — being stuck at work all day leaves you with much less time to spend money.

So what about when you’re retired and have nothing but time? Can you keep yourself occupied and keep your spending in check? This can be a real challenge, especially when expensive hobbies and travel are part of your plans. This is why having a lot of savings and using careful planning are so important. A good financial planner can help you with this, but when you don’t have earning power, you need a good cushion to ensure your money lasts. After all, the last thing you need is to run up against the end of your savings when you’re too old to go back to work.

Stick to the Plan

Because retiring early is a challenge, it’s important to have a clear plan for how you’re going to get there. Exactly how early do want to retire? How much will you need to save to make that possible? These are questions you need to answer to ensure you’re on the right track to making your goal a reality. A financial planner can help you run the numbers. Then it’s up to you to keep that plan on track. The numbers make it sound easier than it really is, at least for most of us. Living on less can be tough — especially when everyone around you is spending like there’s no tomorrow.

Find a Source of Passive Income

If you’re not familiar with the term passive income, you’re missing out on one of the sweetest deals in the investing world. In essence, passive income is income that’s generated without your labor. In other words, you don’t have to work for it — or at least not as hard as you have to work for most of the other income you’ll earn in your life. Investments such as dividend stocks and real estate, or royalties generated from something you’ve created such as a website or book, are considered passive income. Once a source of passive income is up and running, all that’s left for you to do is accept the check in the mail.

Rethink “Retired”

A member of my family retired in his 60s, but was soon back to working part-time. Why had he chosen to go back to the grind?

“You can only play so much golf,” he told me. As an energetic, healthy, and active guy, he just wasn’t happy without some real work to do. He has flexible, part-time work that he enjoys, and he’s still home in time to have lunch with his wife.

Retiring at 65 used to mean a handful of years of retirement. Now, it can mean 20 or more. So, while you may relish a lazy Sunday now, those long, uneventful days may not have the same appeal when they become an everyday reality. If you’re hoping to retire early, consider including work in the picture. It’ll make it easier to afford the things you enjoy. Plus, the time you spend working might even make that extra leisure time more enjoyable.

Understand the Risks

Retiring early isn’t easy. It does have its rewards, but it isn’t without risk. Medical or other unexpected expenses can dry up your savings too soon; you may not enjoy a life of leisure as much as you’d hoped, and, not least of all, the financial and personal sacrifices you have to make to retire early can have a cost, too. If it’s really a different kind of life you want, you might want to ask yourself whether you can start living it now, perhaps by pursuing more of the things you love, or finding a job that you can be happy going to for a few more years. No matter what you choose, just be sure to avoid jumping at a dream. Those coveted post-work years can be sweet, but don’t kid yourself — it’ll take a lot of hard work to get there.

Are you working toward punching out early? Or have you successfully made the leap to early retirement? I'd love to hear about how you made it happen!

This article is from Tara Struyk of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways Everyone Can Make More Money

David Ning — Tue, 23 Nov 2010 14:00:05 +0000

If someone asks you whether you'd like to make more money, I bet most of you would say yes. The follow-up question would be "Why aren't you making plans to make more?" When a specific method to make money is mentioned, people usually make a quick decision as to whether it's feasible. Some people can quickly adapt to the method and start making money, but what if you are the type who keeps saying no? Are you actually ready to make more money? To help you figure this out, let's look at the handful of ways people are cashing in, and see if you are willing to do what it takes. (See also: 25 Ways to Make Money Today)

1. Start a Business

Many people find their riches from a company that they started, but opening for business doesn't always mean looking for capital from investors and trying to materialize an idea that may take years. An entrepreneur who mows his neighbor's grass runs a business, and the lady who consults on makeup for people's weddings has a business too. I started MoneyNing.com with no funding, and it's grown to an enterprise that supports multiple people. You can start small too.

2. Change Jobs

Loyalty is cherished in any company. There's no doubt about it, but there are very few success stories of a person who moved up the ranks of the corporate ladder working for only one company. For most people, the big break (in other words, the huge increase in salary) really only occurs when they change positions to a totally different company (or at least department). Do you want to make more money? Perhaps you should dust off your resume and start trying to land interviews. People are paid to contribute, and one of the best ways to improve a business is to hire someone from a totally different company who can inject fresh ideas. Who knows? You might become the star at your new job just because you adapted what you already know from your old company to the new culture.

3. Ask Your Boss

If you like sticking with the same company, then ask your boss how you can earn more. Let him know, respectfully of course, that you'd like to earn more money and see if the pair of you can work out a plan. You will want to have specific goals with a reasonable timeline so when review time comes, you can be factual about your progress.

4. Get a Second Job

Using more hours of your day to make more money is tough work, but it's probably the quickest way to earn more bucks. I would argue that you should find part-time work that can grow into a better source of income than your primary job, because when you work two jobs, the first job will usually suffer. Examples include a small business you are trying to start or a different career that you think is more promising. Either way, don't take this decision lightly and weigh the pros and cons.

5. Start Saving, and Enjoy Passive Income

Once you have amassed a small fortune, you will see the benefit of saving as your passive income grows without much intervention. Dividends, interest payments, and appreciation are mainly why so many people can seem to live without doing much work. There are ups and downs, but if you can stay the course, the long-term picture is usually pretty.

These five methods are how people generally earn more. I bet you already knew all these right? But if you always thought you wanted to make more money and haven't yet, re-read all of the above and honestly ask yourself whether you are willing to do what it takes. Are you really ready? If you are, here are 15 more specific ways to earn more money.

This article is from David Ning of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Passive Income for Every Entrepreneur

Scott Allen — Sat, 17 Jul 2010 02:55:46 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/passive-income-for-every-...

Archimedes once said, "Give me a lever long enough, and a fulcrum on which to place it, and I will move the world." Leverage is a powerful concept. It's the fundamental difference between being a freelancer and being an entrepreneur: being paid for your time vs. making money off the efforts of others or your own past efforts.

Passive income is that concept carried to its logical conclusion: maximizing your income with a minimal amount of effort by yourself or your employees. There's no such thing as 100% passive income — even putting money in the bank takes a little bit of effort. And there's no specific cutoff point at which active income becomes passive income, i.e., there are degrees of passivity.

For example, taking orders online and having the product drop-shipped from the manufacturer is highly passive, yet it still requires maintaining the site, engaging in marketing, etc. Taking orders by phone is slightly less passive, since it requires having employees to answer the phones. But if the profit from the sale is significantly disproportionate to the cost of the order-taker's time, it's still passive. If, on the other hand, your sales process requires an actual salesperson to call on prospects, possibly multiple times, it's not passive income.

Now that we have a better picture of what passive income is, why is it important for every entrepreneur? Let's consider five ways in which passive income can be incorporated into your business strategy.

1. Cash Flow Stabilization

Entrepreneurship is a rollercoaster ride. In bootstrapped companies, cash flow is even more important than sales. When the cash stops flowing, your business is dead. By investing early in creating passive income streams, you can ease the pain of the cash flow shortages that will almost surely come. The first time those few hundred or few thousand dollars of passive income help you meet payroll, pay rent, or keep you from overcharging your credit cards, you'll be glad you spent the time to set it up.

2. Revenue Maximization

Passive income is all about making more money with your available resources. Isn't that actually one of the main goals of every business? Passive income strategies will improve your bottom line, period.

3. Exit Strategy

So long as you are personally involved in the day-to-day operations and generation of revenue, you can't retire, or move on to your next venture, or spend the summer on a round-the-world cruise. You'll also be locked in to being an employee of the company for a period of time if you ever sell it.

4. Employee Benefits

Your employees are locked in just like you are. The more you can apply passive income principles in the business, the more you can give your staff freedom of time and location, and pay them based on the value they create, rather than just for the hours they work.

5. Self-supporting Marketing

Many forms of passive income also serve as marketing for your core business: books, white papers, special reports, videos, etc. And the beauty of it is that once you have it going, that marketing channel pays for itself, at least partially.

There are many different models for passive income. While some businesses may lend themselves to it more readily, nearly every business can figure out some kind of passive income stream that's related to their core business in some way.

Passive income can generally be broken down into two categories:

Residual income, which is received over time from a one-time initial effort, e.g.:

A consulting firm that creates and sells a collection of special reports and white papers
A yoga studio that produces a video and sells it, both in their own shop and online
A CEO who publishes a book related to the company's core business
A local tour company that takes photos of the city's landmarks, makes them available on stock photography sites, and receives a royalty when they're sold
An innovative product company that licenses its patent to other companies to build similar products. You can make money from your competition!

Leveraged income is money you make from the efforts of other people, particularly those who don't represent a fixed overhead for you, e.g.:

An online retailer selling through affiliates
A real estate broker, who makes money from the efforts of individual agents
Direct sales as a distribution channel
Franchising your business (the ultimate leverage of your business model)

How can you apply these principles in your business? Can you create an information product of some kind? Do you have intellectual property that you could license to other companies? Who can you get to sell your product for you on a commission-only basis? Is there a product you can sell that can be drop-shipped from the manufacturer? Are there other companies with complementary products that you could sign up as an affiliate with and promote their product?

No matter what your business, you can apply the concepts of passive income as a key part of your financial strategy. Master them, and maybe we'll see each other on that round-the-world cruise!

This article is from Scott Allen of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

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