Apart from taking on full or part time work, selling off what we own, or selling off bodily fluids and organs, it may seem nearly impossible to live off the income of two people per household, and just as impossible to increase that income to a breathable level without taking on a second job.
The approach found here is a learning process and asks that you see your job and life as one unit, not as a something you do and then go home to your normal life. So, if you are not working at a job where you feel you are making a difference in this world, then make it your mission to make that change first. Then, come back to these strategies to start working on your bottom line.
Remember, “Success is the sum of small efforts, repeated day in and day out,” -Robert Collier
Create a plan of action using as many of these ideas as possible which appropriate for your situation, with steps you can easily follow daily, weekly, monthly, and yearly. Stick to is as much as possible, and edit only when absolutely necessary.
1. Diversify Investments
Quantity does not equal quality or diversity. Start by taking a closer look at these: 401k and IRA , Bonds, Cash on Hand, Health Insurance, Investment Accounts, Life Insurance, Pension, Real Estate, Retirement Account, Savings and CDs, Social Security, and Stocks.
401k and IRA ( Retirement Account) – If you are self-employed or own your own business, make sure you still invest in your Social Security Account, back these up with a 401k and an IRA. Don’t withdraw from either until after age 70, to increase monthly payout and avoid stiff penalties. (Roth IRAs are tax free and penalty free after age 59 ½.)
Bonds, Stocks, and Mutual Funds – These types of funds create predictable streams of income in retirement that keep up with inflation. Bonds also limit potential for losses. These promise rates of return above inflation.
Cash on Hand – Start by increasing the amount of cash you have on hand. Make sure you have enough tucked away to cover a months expenses, then keep adding months until you have three to five years income saved up to cover expenses should anything happen.
Health Insurance – Investing in health care now and medicare for the future will eliminate any possible set-back from unexpected medical expenses.
Investment Accounts – Check into your company or place of employment and see if they offer investment accounts. Then, check and see what their worth is and how their worth fares before investing.
Life Insurance – This is more than insurance, this is a type of investment with a high interest rate. You pay into a savings type of account and the insurance company uses that money, like a guaranteed loan, to invest. They pay you back at possibly the highest interest rates possible the only catch is, you can only use it as a life or death emergency fund until the matures.
Pension – If you are not the lucky government employee who gets a pension, make your own by purchasing an annuity.
Real Estate – Owning a house means that you will eliminate the biggest expense, that of rent or mortgage. Homestead it to also receive a tax break on the land.
Savings and CDs – Put each years worth of saved income into savings that draws high interest, then invest this at the end of the year into a CD to earn more interest. Although the interests is low, the income is easy to get to as CD terms are short.
Social Security – Make sure your social security is being taken out of your check and is still active on your stubs. But, do not rely on this form of savings to protect your retirement.
The trick is starting as young as possible. Someone in their 20s who invests regularly could come into a retirement in the millions, while someone investing in their 40s or beyond can only hope for a small passive income. To learn more, take a course on personal finance at your local community college.
2. Create a Passive Income
A passive income can be as involved or not as you desire. While to some this suggestion means joining an MLM company and delving into network marketing, for others it means turning a hobby into an income stream. Ideas include:
- Take a personal hobby such as jewelry-making or plant husbandry into a part time job.
- Turn a hobby or your desire to write about a passion into a money-making blog.
- Write a book or an ebook
- Turn a passion into night classes you can teach. If you are good at public speaking, or if you can see yourself facilitating workshops, this is a great opportunity to turn your passion into someone elses knowledge.
- Buy things cheap at dollar stores, garage stores, or thrift shops and resell them online.
- Take on private students and tutor them in something you are good at.
3. Create a Part Time Job
While the idea of starting a second job on top of your primary one may not seem logical at first, consider swapping out television or gaming time for something more productive. Here are some simple at home jobs you can easily fit around your schedule and use to fund those investments in section one:
Stock photography, surveys, secret shopping, mowing lawns, yard care, pet sitting, product reviewing, freelance writing, plant sitting, newspaper delivery, collecting items to sell, laundry, mending clothes, networking, personal assistant, call center (yes, from home and still set your own schedule), and “get paid to” sites.
Putting money in a bank is considered a loan to the bank, what we mean is becoming a lender. Lending to friends and family is not always a wise idea, if you have a business savvy colleague, consider setting your sites in signing contracts with companies who lend to small business owners, women business owners, and women in other countries. The payout in a month or a year can be double or more of the original investment.
5. Grow Food
Consider obtaining permits to grow and sell food from your property or a friends property with the right zoning for it. The produce from patio pots, small scale gardens, fruit trees, or even a small ½ acre farm may do well enough to purchase a spot at a flea market during the summer and fall months. At the very least, you can inexpensively create a website about your gardening experience and encourage your neighbors to buy local, from you!
6. Reallocate Existing Income
Reallocate funds from your existing budget by figuring out how to spend less. This is often considered to be found money. Easy methods include finding a less expensive utility company, shopping at discount retail stores for groceries and clothes, cooking more food at home, cutting out sweets and sodas, getting netflix instead of cable or the movie theater, and finding a cheaper place to live or a cheaper car to drive.
A healthy financial life consists of spending less, earning more, and driving home a passive income that doesn’t need much more than your original effort. Make your money and time work for you. Work on improving your bottom line by investing in accounting software to keep your eye on the bigger picture and making budgeting easier.