It’s the beginning of the year and as usual there is no shortage of financial advice on how to right the proverbial ship this year. I’m a personal finance blogger but even I get annoyed seeing all of the generic and regurgitated financial articles that seem like re-spun articles from years past. So far this year, for the umpteenth time, I have read about how we all can get ourselves out of debt if we spend less money on Starbucks lattes and use couponcodes when shopping. Ummm, didn’t we already know that? Don’t the author of these articles realize that we know spending less money will help us keep more in our pockets? What I don’t see enough advice about is earning more money. Any simpleton knows that the only way you can pay down debt and save more money is to either spend less or make more, or some combination of both. My article will focus on the latter. It is significantly more difficult to earn more, but it’s also much more effective for increasing one’s net worth.
Earning more money isn’t easy, if it was then everybody would simply push a button and earn more. It usually takes some sort of catalyst to even prod someone into wanting to earn more money. For me it was buying my first home about 5 years ago and then promptly getting laid off just two months later. I had taken out an FHA loan so I had virtually no equity in the house. My only savings was about $30,000 in a pre-tax 401k account, and that was fully negated by over $30,000 in student loans coupled with about $10,000 in high interest credit card debt. This was probably the first time in my life that I was ever concerned about my finances, which is a shame because after working my butt off at my job for nearly 6 years I had very little to show for it financially. I drove a nice car and had a nice house, but it was all possible based on borrowed money. Fortunately I found a better paying job only a couple months later. The problem was that I couldn’t shake off that nagging worry about losing my job again. It was weird because I had always felt secure when it came to my job and finances, but now I constantly worried. A few months later January rolled around and I was seeing the onslaught of financial articles that pop out this time of year, and one came out regarding building multiple income streams…a term I wasn’t really familiar with at the time.
Multiple income streams means you earn income from more than one place. Seems simple enough, right? My sole income stream had always been my office job, in fact, I had never even considered the possibility of earning more money from somewhere else. On that snowy January day I decided to shut my TV off and get down to business. I opened up a hosting account, registered a domain, and presto I had my very own personal finance blog. I worked tirelessly at it for about 6 months with very few visitors and not making a single dollar. Then one day the visitors started coming in and the advertising offers started to come my way. By no means am I rolling in the dough today, but I have successfully built a small business using my free time and a small amount of money. I no longer stay up late at night worrying about losing my job, because if I do, then at least I have something else to fall back on just in case. Eventually I would have to get a day job again, but I wouldn’t have to panic if it didn’t happen within a week or two. There are no words to describe that sort of peace of mind, something that I wish I had had 5 years back. The question is, what can you do to earn more money? Hopefully I can give you some ideas that might help.
Start a Blog
This is precisely what I did to earn more money. In fact, I know a ton of people who have done this and earned a healthy side income from it. Some people I know have even fully retired from their day jobs and this has become their sole source of income. Because I’m a fan of multiple income streams I will say that I prefer keeping the day job and only allotting my spare time to facilitate this side gig…but to each their own. There are truly a number of ways to earn money once you start a website, probably too many for me to name. I will say that traffic and content are key, so make sure you spend time on the articles and do some research on how to effectively build up an audience. Most of all, have patience, nothing happens overnight.
Get a Second Job
For those of you who aren’t very tech savvy then a second job could be a better option. The second job needs to fit your lifestyle and skill set, and most importantly it can’t negatively affect your day job. This can sometimes be a difficult conundrum for people who simply don’t have the time or flexible hours to support a second job. There was a blogger I used to read up on quite a bit years ago who had gotten himself out of debt by moonlighting as a pizza delivery driver. All told, he earned a healthy $20 an hour working flexible hours that didn’t interfere with his day job. He didn’t have much free time during those years, but he successfully paid his way out of debt and was able to save a cushy emergency savings funds that allowed him to eventually quit that second job. Remember, it’s all a means to an end, and hopefully that end is a comfortable retirement.
There are other more “glamorous” jobs that can be done on the side, if you have the skill set of course. I have a CPA friend that works in the public accounting sector for a prestigious firm. Though he earns extra money this time of year by doing his friends and families tax returns. Truth be told, with all of the accounting software for professionals out there it isn’t incredibly difficult. I have even done a few tax returns for close friends myself, and know someone else who is starting a business using this very same tactic. Accounting software takes all the guesswork out of tax preparation and just about anyone with a little experience using them can effectively create an accurate return.
Snazzy with Microsoft Word, Powerpoint, or Excel? There are plenty of online and virtual jobs on various job boards that are just begging to be filled. Small companies that can’t afford to pay expensive contractors, or don’t have the need for full time employees, are willing to pay good money for one time services like creating a budget or business plan for them. Sites like eLance and Odesk come to mind. Getting selected for positions can be a bit difficult before you build a credible history, so I would charge a little less than the average person to start. Once you have a good history and several reviews you can begin to charge more than the average person.
Passive Income Stream
So far I have focused on how you can go about physically earning more money with promotion codes, but the end game has been and always will be building a passive income stream. Passive income is money that you earn for not doing a thing. This always comes in the form of investing money! What you invest in is entirely up to you. The goal is that you take the money you make from your website, or a second job, and parlay that into a passive income stream. I know a blogger that has taken all of his extra earnings and used it to buy dilapidated houses and fixed them up as section 8 rentals. Meanwhile, I have used my extra earnings to invest more in the stock market. With the incredible gains the past few years I am certainly glad I have. I boosted my 401k, IRA, and general savings accounts with any extra money coming in. These all earn interest, dividends, and capital gains. My hope in doing so is that I can earn myself an early retirement. That’s still a long ways away, but any year I can retire before age 65 (traditional retirement age) I will consider a win in my book.
The morale of the story, is that you shouldn’t simply focus on spending less. Rather, you should focus on earning more. Once you have accomplished that amazing feat don’t squander that money on junk. Invest and let it grow. You have heard this before but make your money work for you!