In 2008, I started this blog as a hobby with a goal of making a few bucks in extra income. It took a lot of hard work, but this site is now generating about 15% of my annual income before taxes. That is pretty sweet! Here are some tips to turn your hobby into income.
“Anybody who tells you money is the root of all evil doesn’t f***ing have any.”
-Jim Young (Boiler Room)
There has been a lot of talk lately about rich people vs. poor people. In the height of the political season, fingers are being pointed, people are being accused, and even Fortune magazine took time to ask if it is still okay to be rich today in America.
This weekend, I had the pleasure of watching my sister graduate Summa Cum Lade from the University of Arkansas. While in Fayetteville, I watched thousands of students receive their degrees, but I realized that most did not get a financial education on par with their newly minted degrees.
Here are some top tips for new graduates around the world.
One of my life list goals for 2012 is to start a niche site that makes money. Having never done this before, I was not sure exactly how to start and where to go. Rather than try it alone, I joined forces with my friend Jeff at Sustainable Life Blog to start our first niche site together.
I am always intrigued by the idea of selling my old stuff on eBay or Craigslist to make a few extra bucks. However, I rarely put in the time or effort to make it happen. My occasional listing on Craigslist did nothing, so I put the idea on the back-burner. However, a new option to sell your stuff has piqued my interest.
February was a month with a lot of income and relatively low expenses. I was able to focus my money where I wanted to give myself freedom to invest more and beat down my quickly shrinking student loans.
There is a famous saying that money does not buy happiness. I have heard it dozens of times. But is it true?
While they are not in all the headlines anymore, the Occupy movement is still going strong around the country. From Occupy Wall Street in New York to Occupy Denver in my neighborhood, the movement has gained media attention and thousands of supporters, but what are they really doing and what are they all about?
I am on the “every other Friday” payroll, as with many people around the United States. This year, September is the second of two months where I get three paychecks. Because I am used to two paychecks per month, it is like a bonus check.
What do I do with my bonus money? Great question! Here are my ideas for the best use of a third paycheck.
Extra Loan Payment
I often write about paying your loans bi-weekly rather than monthly. There are a couple of reasons for this. First, you match your income stream to your expenses. If you don’t get paid monthly, why should you get hit with a giant loan payment monthly?
Second, paying every payday saves you mortgage interest. Loan interest compounds daily, so paying more often will lower the compounding effect and save you money.
But, twice a year, you will make an extra half payment. That equals one full extra payment per year. That helps you pay down the debt faster, build your equity faster, and save a ton of money on interest over the life of the loan. If you want, you can even round up your payment for a faster payoff.
You can save up to $5,000 per year in a Roth IRA. Most people do not do that. With two extra paychecks, you can make a big dent.
Do you have an emergency fund saved up? What if you were fired tomorrow? How long could you survive? If the answer is less than three months, you should put that extra paycheck into a savings account for a bad day.
I have a long life list with big goals on it. Many of them involve international travel. Some involve taking up new hobbies or skills that require expensive equipment or classes. An extra paycheck goes a long way toward a flight to Europe or a set of DJ turntables.
What do you do with the third paycheck if you get one? If not, what would you do with it? Please share how to save money in the comments.
Image by Mark Strozier.
Also, a quick thanks to Kevin at Invest it Wisely for including Narrow Bridge in this week’s Carnival of Personal Finance.
In Colorado, there is no shortage of gambling opportunities. Just 45 minutes up the road in Blackhawk and Central City, we have large casinos that rival most Indian reservations. We have legalized bingo halls all over town. But the dream is to win the lotto.
Where the Dream Comes From
After recent epic winnings in the Power Ball, I got to thinking about my lotto list.
Dreams of Unlimited Money
If I had virtually unlimited money, what would I do?
I would buy a massive mansion in my hometown, Denver, or a giant Penthouse downtown. I would have a vacation home in the mountains, probably in Beaver Creek. I would buy a beachfront home in Miami overlooking South Beach. I would buy two apartments in the Old City in Jerusalem (one for Passover, one for the rest of the year). Oh yeah, and I can’t forget the Manhattan penthouse.
I always talk about my practical car, which I love, but who would want a McClaren F1? That is the top of my list. I also want a Tesla Roadster, 1968 Camaro, a James Bond decked out Aston Martin, a shiny new Ferrari Scaglietti, and a Bugatti (not too picky on the model).
Honestly, my many homes would be empty most of the year. My real home would be the entire world. I want to travel and see every place that I can safely see that I have never been. I would love to be able to hop on a plane at my leisure to visit the most beautiful and cultured places in the world.
What I Would Really Do
If I really were to win a windfall lottery income, I would probably be a little more thrifty with my money than the list above.
I really would have a comfortable home in Denver and an apartment in Jerusalem. The others are negotiable.
I really would have to buy a McClaren F1 if I had over $100,000,000, but beyond that I would probably stick with a luxury sedan for my daily driving and an SUV for the Colorado winter.
I would really travel the world. I want to see everywhere, and having an extra nine figures in the bank would make that dream come true.
I would also donate generously to the organizations that have given me so much and ones that help people who really need it. I would also make sure my parents and sister lived incredibly comfortably for the rest of their lives.
Most importantly, I would invest and secure my fortune in a way that ensured I would have enough money to live comfortably for the rest of my life.
The Pitfalls of Instant Fortune
I have read stories of people winning $300 million jackpots and struggling with drug addiction and bankruptcy just a few years later.
The best example of this is Jack Whittaker. Whittaker was a successful construction manager with a great family life. One day, he walked into a store for a sandwich, gas fill up, and a lottery ticket. He won the largest lottery in United States history ($315 million) and took home a lump sum of $113.4 million.
Within four years he was robbed several times, arrested, sued, and been implicit in the death of his Granddaughter and two of her friends (separate incidents) related to drug use. After a string of legal problems, nearly ending up in bankruptcy, and burying his grandchild, he said that “if he could do it all over again, he would have just filled up his tank, bought a sandwich and gone on his merry way.”
My Plan to Win the Lottery
I am going to win the lotto, I should probably buy a ticket. Doing the math, however, shows that putting money into an index fund has a much higher rate of return than the predicted average income from the lottery. I will put my dollars into a sound investment instead. I guess this is one dream that will never come true.
Fair Usage Image (c) The Walt Disney Company
The following is a guest post from Barbara Friedberg, MBA, MS, who is editor-in-chief of Barbara Friedberg Personal Finance.com, where she writes to educate, inspire, and motivate for wealth in money and life. This post is part of the Yakezie blog swap. You can view my post at Faithful with a Few and see a post from Money Talks at Barbara’s blog. Be sure to check out all of the blog posts in our swap. We shared this topic: “You’re homeless/poor, how would you change your situation?”
A BIT ABOUT ME
I confess. I’m a worrier. I think I was born this way. Although I’m determined to be a “glass half full” girl, I always have a “what if” plan.
What if we lose our jobs?
What if the market tanks?
What if we have to lower the price on our “for sale” home (already happened)? What if the house burns down?
You get the idea.
I’ve thought about the “what ifs” of a financial catastrophe and how I would make ends meet. With the proper confluence of events, anyone could become poor. After all, look at the recent tsunami in Japan. In California, earthquake insurance is prohibitively expensive, as is flood insurance in the Midwest. A bad earthquake or flood could cause widespread ruin.
You can plan as much as you want, but, bad stuff happens.
Before I go on with my response, I must give a shout out to two inspirational simplicity figures; Jacob Lund from Early Retirement Extreme and Tom Shadyac the famous movie director of Liar, Liar, Bruce Almighty, and The Nutty Professor (to name a few). Jacob saved most of his income for several years, and left the conventional work force. He lives what might be called an inexpensive minimalist lifestyle.
Shadyac, a wealthy Hollywood figure who previously owned multiple mansions and other trappings of the super rich, drastically changed his lifestyle. After selling all of his multimillion dollar mansions and firing his extensive staff, he now lives in a double wide 1,000 square foot trailer in Hawaii. By Hollywood standards, he is definitely roughing it!
Both men are living the simple life by choice.
These choices aren’t the same as being forced into poverty by situations outside your control. Yet, they illustrate how most of us are living lives with way more than we need.
Although I try to be mindful of waste and excess, I acknowledge that I own and consume lots more than I need!
What if simple living is not your choice, you are just poor? Then what?
Here’s what I would do if I lost it all.
- I’d remember to be grateful for what I already have; my health, friends, and family.
- Short term, I’d sell whatever I could to raise cash; car, furniture, stuff.
- Next, I’d take a room at the YWCA to cut living costs.
- I’d eat as cheaply as possible; beans, rice, peanut butter, and whatever veggies were on sale.
- I would get a job FAST to bring in money immediately while I looked for a career job. My top employment choices would be Lowe’s, Home Depot, and fast food. Why? I love the hardware/home improvement stores. Fast food is always looking and they pay more than minimum wage.
- When I wasn’t working, I’d relentlessly call, write, and contact anyone who might help me find a career job.
- Every single expense would be cut to the bare bones, no exceptions. Shop for necessities at the dollar stores, haircut at Super Cuts, no new clothes etc.
- Every day I would wake up and problem solve ways to generate cash.
- I would ask my place of worship or other social service agencies for help, if necessary.
This activity was both uplifting and confronting. Having a “worst case scenario” plan makes me feel in control and able to handle anything. I empathize with those in need and even feel a bit guilty for my good fortune. In fact, I frequently feel that I could do more for others.
As Albert Ellis, the great psychologist once said, “Except death, every other problem is at worst, 100% inconvenient.” No matter what the challenge, I try to keep this mindset and maintain a solution oriented attitude.
How would you handle poverty or homelessness?
Photo by BlatantNews.