Free Money Finance

Paying for a Car with a Credit Card

In this piece from Consumer Reports on how to deal with car dealership closures, they make this statement:

Use a credit card. Whether you’re making a down-payment, ordering parts or accessories, or getting repairs or service, use a credit card. If the dealer fails before your vehicle or parts are ready or before you have a chance to complain about shoddy or incomplete work, you can challenge the payment with your card issuer. If you pay with cash, check, or debit card, you’ll likely be out of luck. Just be sure to use a credit card with no balance so that you don’t pay finance charges.

I'm still fascinated (excited?) about the idea of paying at least a portion of a car's purchase price with a credit card. Why? Well, if you're using a 2% cash back card like the new Schwab card, a $20,000 charge for a new car can net you an easy $400. And even if they "only" let you charge $5,000, that's still $100 you can earn for doing nothing, right?

Of course you'll want to pay off the charge right away, but if you've already saved up the money, that's no big deal.

I'm still a couple years away from needing a new car, but I'm certainly going to add this to my tried-and-true method of buying a car using the web.

Now for a question: anyone out there ever pay for their car (or part of it) using a credit card?

How to Get the Most from Rewards Cards

As most of you know, I'm a user of cash-back rewards credit cards. Currently I'm using the Blue Cash from American Express and Chase Freedom Cash Visa cards in an effort to earn 2.6% cash back, though I am interested in the new Schwab card. I still need to do the analysis to see what is the best option for us, but I know for sure that 1) we'll use a cash back card (or cards) and 2) at the most, we'll use two cards. Yeah, we could earn a bit more, but once the number of cards gets over two, it's simply too much of a card management hassle to get the extra money.

Anyway, this piece on getting the most from rewards cards made a couple points that stood out to me. Here's the first:

Assess your spending. Most cards offer reward bonuses for spending in certain categories, either as a regular feature or a temporary promotion. Choose a card that lines up bonuses in categories where you spend the most.

Exactly! This is one of the keys to selecting the best credit card -- to get a card that gives you the best rewards (highest rate of cash back) where you spend the most money. This is a key issue for us as many cards give top levels of rewards for food, gas, and drugstores. But we only spend about 30% (my guess) of our total charges in these categories, so we need to look for something that gives us big rewards on "normal" purchases (hence my interest in the Schwab card.)

Next, they make this comment:

Skip the stuff. Redeeming points or miles for merchandise is often the worst way to spend rewards. With Bank of America's program, for example, it takes 25,400 points for a blue 8GB iPod Nano. For 25,000 points, you could get $250 cash, enough to buy the player at Apple.com for $149, with $101 and 400 points left over.

Exactly again -- just what I said. I think most of the points programs are simply an attempt to make you think you're getting a good deal when you could most likely earn cash instead and buy the item for much less (whether it's a flight, a hotel room stay, a blender, or whatever.) Besides, cash is much more flexible -- you can use it to buy anything and aren't locked into a predetermined set of choices. And, of course, there are no blackout dates for cash. ;-)

An Example of How a Hobby Can Turn into a Big Income

One of my tips for making more money is to turn your hobby into an income. I've done this twice now -- both with writing (magazine articles) and blogging -- and with the right hobby, some creativity, and a good amount of hard work, you could probably do the same.

Today I want to share an example of someone who turned his hobby into a pretty big income -- so big that he could leave his day job. Here are the details from CNN:

A former ATM software designer for a large bank, Demeter created "Trism" in his spare time and pitched it to Apple last spring. The company made the game available for download with the July launch of its App Store, an online provider of applications for its iPods and iPhones.

Priced at $5, "Trism" earned Demeter $250,000 in profits the first two months.

And now with all this publicity, he'll probably make much, much more than that in the future.

So, in short, he combined skills he had (programming) and his hobby (gaming) and created something he liked. He then sold the concept, got it included for consideration (in the App Store), and it was a hit. It's a great story!

Now most of us won't come up with something that earns $250k in two months, but we can develop an idea that maybe makes us an extra $5k or $10k a year. And that can come in quite handy to most people's budgets. Besides, if it's a hobby you really enjoy, it won't seem like work at all to earn that extra $$$$$. ;-)

How to Sell a Coin Collection

I recently had a reader ask about how to sell a couple collections (stamps and matchbooks), so I thought this piece on how to sell a coin collection would round out my "collection" of "how to sell a collection" pieces. ;-)

Anyway, the Wall Street Journal comes up with a great answer for how to sell a coin collection: it depends. I know, really helpful.

Thankfully the advice doesn't stop there. Here's an overview of the two main options they offer:

If you're trying to unload a coin collection quickly and you're willing to leave some (potential) profit on the table, a coin dealer is your best bet. But if you think your coins are worth at least several thousand dollars and you're willing to work with an auction house to try to beat the wholesale price, you might get a larger return on your sale through an auction.

They go on to give a few details -- those of you interested can click through and see their suggestions.

I'd suggest you do a little pre-work before you go to a dealer or auction house. Ask friends who are coin collectors and are knowledgeable on the subject (in other words, "real" collectors, not pretend ones) what they think the value of your coins are in advance. Then when you approach a dealer or auction house, you at least have a decent feel for what the coins could be worth.

As another option for selling your coins, your collector friends may want to buy them. This is why I'd always ask a few friends to give you their estimates on the value of your coins -- just want to make sure one person doesn't try to low-ball you. ;-)

When I mentioned that I was thinking of selling my coin collection, I had a few friends contact me about them. I gave them each a list of what I had and they all came back with the same conclusion -- my coins weren't worth much. Bummer.

So maybe you're not the nerdy type who has hundreds of coin-collecting friends -- what do you do in that case? Maybe ask your friends and family if they know of any coin collectors. If you get some good references, you can then ask them for estimates. If you don't get any, then you may be at the mercy of a coin dealer -- though you could always go to several dealers and take the best offer.

Anything I'm missing? If any of you have some better advice on this subject, I'd love to hear it.

Make Money by Selling Parts of Yourself

In the past, I suggested that people could make money by selling their blood. Turns out that's not the only thing they are selling to earn a few extra bucks. For instance:

Increasingly, industry officials say people are hoping to trade spare body fluids, tissues and other parts for payments that can range from $20 to $50 a pop for blood plasma to $60 to $100 for a shot of sperm, $200 for a shiny ponytail and up to $7,000 for a fertile egg.

More and more people are considering selling parts of themselves due to the poor economy in the U.S.:

“I am seeing a huge increase,” said Mary Fusillo, director of The Donor Solution, an agency in Texas. She says egg donor applications have jumped in the past six weeks from two to five a day to 20. “It’s people who suddenly see it as a viable way to make a chunk of change all at one time.”

Visits to BloodBanker.com, a Web site that lists locations and reviews of cash-for-plasma centers nationwide, are up 50 percent this fall, and TheHairTrader.com, a site that lets users shill their long locks, is about 20 percent busier with people desperate for cash.

“I just got laid off and I really need the money for house payments” is how the owner of a 32-inch reddish-brown braid put it on Nov. 3.

“They’re donating due to economic things,” said Jacalyn Elise, an executive partner with the Murietta, Calif., hair clearinghouse, whose clients range from college students to homemakers. “I’m seeing more ads from people saying they want money for the holidays.”

I'm not sure what to think about this, but here are a few comments this piece made come to mind:

1. Seems like an ok way to earn a bit of extra money. Why not sell your blood, sperm, eggs, hair, etc.? (FYI, for an inside look at leaving a sperm sample, see this post.)

2. Are people really living that close to the vest that they need $20 here, $50 there, etc.? Sure, $7k for an egg is one thing, but people appear to be needing even "trivial" amounts in this economy. Where are the emergency funds? Where is the cushion between what people make and what they earn? Then again, if you just lost your job, almost everything's on the table when it comes to earning money, huh?

3. If you're facing hard times, here's a list of all the ways I've suggested to make money and save money. Could be useful to you.

Dealing with the #1 Issue in Making More Money

Want to know the #1 objection I get when I suggest people work to make some extra money? Time. They claim they simply don't have to time to work on something else.

Then I see reports like this:

Nielsen Media Research said Monday the average American watches 142 hours of TV in a month. Last season the typical home had a television on for eight hours and 18 minutes each day. That's up an hour per day from just 10 years ago.

Ok, I'm missing something. "142 hours a month" and "eight hours each day" don't add up. Wouldn't 142 hours equal four plus hours a day and wouldn't eight hours a day equal 240 hours a month? Maybe the difference is that the 142 hours is actually watching TV while the eight hours per day is the total time the TV is on (which means the TV is on roughly four hours per day with no one watching it.)

Anyway, the conclusion is still the same regardless of which number is accurate: there's a lot of time being spent on watching TV -- time that could be spent earning extra money.

Now I know that:

• People need entertainment. Certainly some daily allotment of entertainment is acceptable and, probably, good for people.
• Life isn't all about earning more money.
• The "averages" are not everyone. The average guy may be watching TV until his eye fall out, but many others work 12+ hours a day and don't watch at all.

That said, I still hear quite often that "I don't have time" when I suggest ways that people can earn extra money. And in many cases, these are people who have written me asking for help earning more.

So I'm suggesting one place where people can find some extra time -- turn off the TV.

Seven Ways to Make Extra Holiday Cash

US News lists seven ways to make extra holiday cash as follows:

• Cash in at cash-back shopping sites.
• Sell back your old books. 
• Get rid of your dated gadgets.
• Cash in your coins.
• Sell back your gift cards.
• Hold a garage sale.
• Sell your stuff on eBay.

The idea of holding a garage sale made me laugh. I can just see us setting up such a sale now -- at 20 degrees and with six inches of snow on the ground. Besides, does anyone really go to garage sales in December? I'm sure we'd be swamped with customers. ;-)

We're not doing anything special to make extra holiday cash this season. How about you?

I May Have Just Found My New Credit Card

I'll write more on this in a couple weeks after I've looked at the numbers, but I think I may have just found my new credit card. Details can be found here and are:

• The Schwab Bank Invest First™ Visa Signature® credit card
• Unlimited 2% cash back on purchases
• No minimum monthly purchase amount
• And no annual fee or foreign exchange transaction fees

Of course you do have to have a Schwab brokerage account (where the cash is deposited), but you only need $1,000, so it's no big deal. I'll run the numbers soon and get back to you on what I'm doing.

And, FYI, the cash back is deposited MONTHLY...

How to Make Money and Save Money

I'm getting a lot of email lately from people who are going through tough financial times. They usually ask me for ideas on how to make money and/or save money, so I thought I'd do a post on the topic for everyone's benefit.

If you're coming to Free Money Finance and want some tips on how to make more/some extra money, here are a couple links for you:

• Pre-2008 money making ideas

• 2008 money making ideas

• 2009 money making ideas

And here are some tips (several hundred) on how to save money:

• Pre-2007 money saving ideas

• 2007 money saving ideas

• 2008 money saving ideas

• 2009 money saving ideas

Each of these links leads to a "category" here at FMF and contains a series of posts on either how to make or save money. If you want to see all the ideas (in reverse chronological order), simply scroll down and read as you go. It's that easy.

Obviously, not every idea is for everyone. But with over 300 posts on how to make money and almost 1,000 posts on how to save money, surely everyone can find at least a few ideas that they can use to improve their finances.

Blue Cash® from American Express

Blue Cash® from American Express Review

Good Luck Finding a Holiday Job

Here's a followup on our discussion about making extra money during the holidays:

The odds of landing a part-time job at department store operator Bealls Outlet Stores Inc. this holiday season are slimmer than getting into Harvard: It's one out of every 45.

Don't think the chances are any better at 7-Eleven. One California store received more than 100 applicants in a week and a half for jobs that pay $8.50 per hour — and the retailer doesn't even usually hire holiday workers.

From department stores and convenience chains to call centers, managers who only a year ago had to scramble to fill holiday jobs are seeing a surge in the number of seasoned applicants — many of them laid off in other sectors and desperate for a way to pay the bills.

Yikes! Not that I'd want to work at a department store or 7-Eleven, but many people do. And I thought these sorts of jobs would always be in supply.

Just another sign of how poorly our economy is doing these days.

Anyone Out There Make Extra Money During the Holidays?

This piece from Consumer Reports on how to get a holiday job got me to thinking:

Does anyone out there take a part-time holiday job in order to earn a few extra bucks? Or maybe you don't work for someone else but have your own mini-business where you sell something or perform some service that brings in a bit more cash.

I don't do anything different during the holiday season, though I have been trying to get my wife to make and sell her homemade heating bags. We've given them as gifts and people love them -- but she doesn't want to be "bothered" with it. ;-)

My son will likely make some extra this year as he's now old enough to shovel driveways. It's pretty good money for a 12-year-old.

How about you? Do you make any extra money during the holidays?

Another Way to Make Money

Here's a comment that was left this week on my post titled Can You Save Money by Hunting?:

You can add this to your "more ways to make money column". A friend of mine guides hunts on weekends. He charges $100 per person per day. I think he limits it to four hunters at a time. There is some investment involved. You have to know property owners that will let you use their land. Some let him use it for free. Others lease it to him. He gets a lot of satisfaction from it, especially when he gets the chance to take young kids on their first hunt.

Ok, so he's not making a fortune, but he's having fun, doing what he loves, getting to hunt himself, AND making money. Seems like a good deal (kind of like turning your hobby into an income, huh?) ;-)

Seven Industries Where You Can Make $1 Million

US News has a list of seven industries where you can make $1 million as follows:

• Wine -- You'll find opportunities in everything from wine bars to wine tastings to the wine aftermarket.

• College Planning -- At one time, applying for college was simply the first step in getting a higher education. Now it's a competitive process that has given birth to a whole industry aimed at preparing and positioning students for college.

• Staffing -- If you're a people person and don't mind being caught in the middle, the staffing industry might be the perfect fit.

• Senior Care -- people age 85 and older constitute the fastest-growing segment of the U.S. population: About 4 million people are currently in this age group, and that number is expected to grow to 19 million by 2050.

• Children's Services -- The economy can plummet and gas prices can skyrocket, but one thing remains constant: Kid-focused businesses are continuing to grow. Even as purse strings tighten, spending on kids—from their tutoring to their art classes—remains generous.

• Pets -- In homes across the U.S., animals of all shapes and sizes get the red carpet treatment. Americans are obsessed with their pets: The American Pet Products Association, or APPA, estimates that Americans will spend a whopping $43.4 billion on their furry companions just this year.

• Green -- Across all industries and all generations, a single word has people talking and taking action: green. These days, if you're doing good for the environment, consumers want to do good by you and show you another kind of green.

Here's my take on each of these:

• Wine -- Not interesting to me.

• College Planning -- I think this could be HUGE! Everything from what to do in high school to prepare for college, applying for/getting into college, scholarship counseling, test coaching and on and on. Seems like there's a gold mine here.

• Staffing -- Headaches 'R Us. No, thank you.

• Senior Care -- Another HUGE opportunity -- if you want to deal with all the downsides.

• Children's Services -- People will keep spending on their kids no matter what happens with the economy. I can only think of one thing that trumps spending on kids...

• Pets -- ...yep, this is it. I've already said enough about how much people spend on pets and how expensive they can be, so I won't add anything there. But on the other side of "cost" for pet owners is "fortune to be made" by pet-related businesses.

• Green -- Not really an industry by itself (unless you're thinking alternative sources of energy), so this one is a bit had for me to wrap my mind around.

Any not on this list that you think could be a big hit in the future?

How to Start Your Own Business While Working Your Current Job

Yahoo has a piece titled 6 Smart Ways to Escape from a Stagnant Job which I originally thought would be about how to get a new job. But it's really about developing your own business (while you're still working), building it up, then making the transition to doing it full-time. It's not that detailed of a piece, but it does cover all the basics.

The piece says that you "may" need to keep working at your current job while you build up your own business. My advice: you need to stay at your current job until you have some assurance that your new business will thrive. Just like you shouldn't quit your old job until you find a new one (if you're moving from job to job), I tell new entrepreneurs to keep their day jobs until they get at least a decent start on their new business.

I know some people will disagree with this advice -- they'll say the only way to start a new business is to plunge in with everything. This has certainly worked for some people, but it's risking your greatest financial asset without knowing whether or not you're going to have a steady income. This is just too great of a risk for me.

What do you think? Which is the better way to start your own business -- build it up while you work or quit now and start your own company?

12 Ways to Earn More Money Using Your Home

MSN Money lists 12 ways your home can help you earn more money. A summary of their list:

1. Attract a crowd with yard sales. Yard sales have one built-in advantage over garage sales or indoor sales: curb appeal.

2. Fire up a bakery or production kitchen. Do you have an unused mother-in-law apartment or an industrial-size kitchen that sits vacant all day? Rent it out as a food-production facility.

3. Make room for renters. Renting that spare bedroom or mother-in-law apartment to a college student or a quiet single can be a great way to turn empty space into cash, as long as local ordinances permit it.

4. Create a home studio.

5. Throw party sales. Some homes are natural gathering places. Turn yours into a selling place by hosting a party sale.

6. Share your garage. If you have a garage you never use -- or just an extra spot in a two- or three-car garage -- consider renting out that unused space.

7. Go to the dogs (and cats). "Consider opening your house as a boarding place for dogs and cats," Brabec says. "Think of all the widows who are tied to their home because they can't get anyone to take care of their pets."

8. Grow your own money. Commodities such as wheat and cattle are well beyond the scope of most backyards, but berries, flower bulbs, vegetables, grapes, florist products and landscape plants can be cultivated and sold to wholesalers, at farmers markets or on your front porch.

9. Seek inner fulfillment. Home-based entrepreneurs create products for shipment all over the world. Somebody's got to do the shipping, and that's where your spare space can help.

10. Make a day-care connection. If you're a parent, you know that good day care is expensive. Enterprising stay-at-home parents may consider starting a home day-care facility.

11. Ready for your close-up? Does your home have star potential? You might be surprised. According to Gary Bond, the director of film marketing for the Austin Film Commission, ordinary houses can be the hardest to find for film locations in Texas.

12. Become a sitter, baby! It may seem old-school, but baby-sitting is also one of the easiest and most lucrative ways to make money in your home.

Not a bad list. Add them to my 11 great ways to earn more money and how to make more money lists and you HAVE to find something that works for you.

Here are my comments on MSN Money's ideas:

1. Yard sales -- Lots of work for little reward IMO.

2. Bakery -- Interesting idea. This basically gets at the "use unused parts of your home", an idea that we'll see later on in this list.

3. Renters -- I've suggested this idea before. A couple of times.

4. Create a home studio -- I have zero creative skills, but my wife has a few that could turn into some decent money makers.

5. Throw party sales -- Personally, I hate these. The products always seem way over-priced.

6. Share your garage -- I've suggested this as well (it's very similar to #3 -- renting out unused space.) You could make a boatload by becoming a small part of the storage industry (assuming your local laws allow you to do this.)

7. Go to the dogs (and cats) -- I've considered this before as part of getting a new home. You'd certainly need a special area to pull it off with excellence.

8. Grow your own money -- One of the homes we looked at this year had strawberries and blueberries on the land and the owner estimated $30,000 per year in income from it. But we saw ourselves spending March through September tending, growing, and picking, and didn't like the view. ;-)

9. Seek inner fulfillment -- Another decent idea, but you'd have to find a rather unique set of people to get business from.

10. Make a day-care connection -- Can make some decent money here, but it's probably also the most labor intensive.

11. Movie -- I don't live in Texas and not sure many movies are shot in Michigan.

12. Baby sitter -- Tough way to earn anything substantial, but for young adults it could be a great job.

Two Steps to Being a Millionaire and Retiring in Your 40's

Here's a Money magazine article on a pair of 27-year-olds who are well on their way to being millionaires (current net worth of $516k) and to retiring when they hit 40. As I read the piece, I was struck at the simplicity of how they were growing their net worths -- it was just two simple steps. They are:

Step #1 -- Earn a good income. From the article:

At age 27, John and Gina already earn a combined $174,000 a year.

Step #2 -- Spend less than they earn (significantly less). From the article:

John and Gina...save half of what they make.

Do either of these steps sound at all familiar to any FMF readers out there? ;-)

They should sound familiar -- I write about them all the time. I've even listed what I consider to be the three steps you need to take to become rich.

I don't really have much more to say on this topic (haven't I said enough already?), but I thought I would list some of my key posts out there for those of you who would like to make more money, spend less money, or both.

Some posts on how to make more money:

• 11 Great Ways to Earn More Money -- A great summary of my best money-making ideas.

• How I've Grown My Income -- Details on how I've grown my income through the years.

• Making Money 2008 -- 58 different money making posts (scroll down to see them all) from 2008 alone.

• Making Money pre-2008 -- 202 different money making posts (scroll down to see them all) from before 2008.

Some posts on how to save money:

• The 10 Most-Hated Money Saving Tips -- You might hate these ideas, but they'll save you tons of cash.

• Saving Money 2008 -- 162 different money saving posts (scroll down to see them all) from 2008 alone.

• Saving Money 2007 -- 220 different money saving posts (scroll down to see them all) from 2007 alone.

• Saving Money pre-2007 -- 519 different money saving posts (scroll down to see them all) from before 2007.

11 More Great Ways to Earn More Money

Here's a good comment left on my post titled 11 Great Ways to Earn More Money. I know almost everyone is interested in ideas for making more money, so I felt this comment was worth a re-run.

For me the 11 Great Ways to Earn More Money are the following:

1. If you have pet dogs, stud them, if you are lucky, selling breeds like poodle and chiwawa can augment your income;

2. If you have extra rooms in your house which remain idle hire boarders, there will be plenty of coeds/students who will be interested to lease your rooms at a reasonable fee of dollars. Find one however whom you can trust, check their backgrounds for your own security;

3. If you are inclined to art, make some landscape paintings, have it well framed but your work must be original so that it will command a price, then search for stores who would be willing to post your work for a commission. Once it sells both the store owner and you could earn additional income;

4 If you have some idle backyard, try some gardening. Cultivate the soil and buy some seeds like carrots, tomatoes, potatoes or even grow flowers. If your flowers will bloom try to commission it in the markets or sell your carrots, tomatoes and potatoes for a farmer's price, this can add your income;

5. Learn the techniques of being a clown to entertain children during special occasions. Clowns who are hired to entertain children during birthday celebrations are paid reasonably;

6. Never throw away empty plastic containers, bottles, and cans. There are plenty of groups who are willing to buy those stuffs for recycling purposes. It can however convert your thrash into some dollars;

7. Do not be afraid to buy products under promo items. Companies sometimes would attract customers by giving them some extra perks by providing some promotional discounts as a gesture of customer's loyalty and gratitude. People sometimes berate buying their goods under promotional sale, they tend to have the impression that they are buying low quality goods which is a great mistake. Discounts are money savers as well as earners, you don't have to part additional monies, hence it is earned;

8. Sell all your items at home which are all stock in the warehouse. It can augment your earnings. Do not clutter things in your house, sell them at garage sale. Your neighbors would be interested to buy some of your unused utensils, decors and stuffs. If it is not sale able post them in the local newspapers, it can easily attract buyers;

9. Post a pocket card if you have the time and advertise that you are willing and accepting tutorial jobs for children needing some lesson tutorials. This will add your income and even pay some of your city services;

10. Idle monies must be invested, whether in TDs, trust indentures, treasury bills, stocks, bonds or index funds. Money are like seeds once you plant and invest it, it will grow, grow and grow and you will be harvesting its fruits and interest income. The income then will again be invested and it will again bear fruits until you will be surprised how affluent you can be. The latest news that retirement endowments invested in some firms had earned 900% earnings in its original principal capital is really a very encouraging move;

11. Part some of your money for charitable purposes. If you give ten percent to charitable institutions whether it is the church, orphanage institutions and street children organizations, it will return to you for the nth times. What comes around goes around. If you want to be rich and you want more, you have to give more to your community.

How Cool is This Job?

Turining your hobby into an income is one of my suggested methods for making more money. Here's an example of a guy who did something similar -- he turned his hobby/passion into a career.

How Much Can Michael Phelps Expect to Earn from His Gold Medals?

With all the gold medals flying around Michael Phelps, I started to wonder "how much will he make from all of this?" A couple articles today work at answering the question. Here's the first from Yahoo Sports:

Peter Carlisle, who leads the Olympic and action sports division there, told The Wall Street Journal in a story Monday he expects Phelps’ current earnings of between $3 million and $5 million a year should at least double, or more, because of his performance in Beijing.

“What is the value of eight golds in Beijing before a prime-time audience in the U.S?” Carlisle told the paper. “I’d say $100 million over the course of his lifetime.”

$100 million, huh? But that's from his agent, so what do you expect him to say?

Here's a more balanced perspective from MSNBC. They say he'll make a good amount (of course) but that he'll be limited because swimming isn't exactly the most popular sport in the world:

Had his talents been applied to a different sport, he might have ended up as one of the top 10 most marketable athletes in the U.S. No doubt Phelps will earn $10 million or so in the next year from his heroics — a record among swimmers — but stars like Woods and other athletes will remain the top medalists in the marketing game.

Of course, $10 million alone is a HUGE number -- and that's just in the next year. I think we can rest assured that he'll be financially secure as long as he spends/invests his money wisely.

How to Make Money Tutoring: Real-Life Story

I love to hear how people have turned their hobbies into incomes (especially since it's one of my suggested ways to make more money). The following story is from Andy, the same guy who blogs at Saving to Invest. He shares the story of how he turned his skills into a nice side business -- something many of us can do if we put in the time and effort.

It's strange how things can sometimes work out in life. For example, how a hobby or part time activity, can lead to a nice financial windfall and provide a huge amount of personal achievement and satisfaction.

This story started when I was in University doing a Mathematics and Finance Degree. I have always had an affinity for numbers and so math related topics were something I enjoyed and was good at. Knowing this a family friend approached me to provide math tutoring to his son, Matthew (Matt), a subject that he was struggling with at school. In fact half way through the school year, Matt had not passed a single math test and was in danger of being held back. Matt's parents tried other tutors but his results were not improving and he was getting more frustrated. Also they were on a budget, so couldn't afford some of the expensive professional tutoring services.

Without going into details about my teaching style, I believe being good at math is about understanding the basics and how each concept from addition to complex derivatives builds on each other. Generally those who struggle with math, don't understand the basics and so get more frustrated and defeated as they move on to more complex topics. This same parallel could just as easily be applied to personal finance, where understanding the basics of budgeting, saving and investing are so important in achieving financial freedom.

Anyway I agreed to take Matt on as a student and my hourly rate was $25 for two, one-hour lessons a week. There was no complex science in coming up with this rate, I just looked around at what other tutors charged and also what Matt's parents could afford. After a month of lessons, eight in total, he had his first major math test. We had prepared hard for this Algebra test and I felt he was more than ready. Matt also seemed confident and while his parents were nervous they reassured him that no matter how he does, they were proud of all the effort he put in to his after school tutoring. Great parents. A week later, he got his results and he passed! The first time for him in a long time and I think his parents and I were happier than he was. By the time the year was up, he was in the top 20% of his math class.

Before I knew it I started receiving calls from Matt's parents other friends who had kids in similar grades. I guess through word of mouth, my name spread and given I was relatively inexpensive (and got results) I was a good option for a lot of parents in the area. Also, I think Matt's parents were great references. Sometimes I felt like they were my agents and biggest supporters, the way they promoted me. Another life lesson - Do what you do well and the rest will follow.

I soon realized that I could make some decent money from this part time job. It is something I enjoyed and I think good at, so it was a perfect situation. My university schedule was not very taxing and so I also had the time to take on more work. As I got serious about tutoring I even put up some fliers at the local community center and mall. At the peak of my tutoring "career" I had 10 students (one to two lessons a week) and factoring in a few cancellations per week I was pulling in about $350 in cash per week. This was about 15 years ago so it was a lot of money at the time. My average hourly rate was about $20 to $30 (depending on grade), which was more than double what my friends were earning. Plus, and most importantly, it was a hugely satisfying job. You are having a direct impact on someone's life and seeing them grasp a concept that was so hard for them previously is a feeling that I cannot describe. It is akin to seeing your child learning new words.

So this hobby or part time job that I fell into ended up funding most of my living and social activities through university. It also allowed me to start investing in the share market (that's another story). Once I started working, got married I had to stop tutoring due to time restrictions. It was really tough to say bye to the students at those last lessons. I still think of it as my first real job and it taught me a lot of skills I use today - effective communication, leadership and mentoring. I met a lot of great people and especially a lot of smart kids, who just needed a little guidance. It was a gratifying experience and I whenever I run into some of "my" kids today (most are working now), they still look at me as their "teacher" and more than one has thanked me for all I did in helping them. That is reward in itself.

FMF Reader Makes a TON of Money Using Blue Cash from American Express Card

Here's an email a reader recently sent me about his success with the Blue Cash from American Express card:

I know you love getting these, but here's another.  I still have a month to go but I'm constantly forgetting to check how much it is:

• Gas, Grocery & Drugstore: $9,809.99 -> $409.14 (4.17%)
• Everywhere Else: $27,374.59 -> $365.96 (1.34%)
• Total: $37,184.58 -> $775.10 (2.08%)

Finance Charges YTD: $0

This is the only card we use, given the choice (there are a few places that only take MC, so we have a Citicard).  We put just about everything on there.  In fact, we probably only spend about $200 a month in cash.  We had a baby this year, so a lot of the "everywhere else" spend is medical that gets reimbursed from our flex spending account.  We had another bunch of those charges this month, so I'm pretty sure the total reimbursement will be almost $900.

A few thoughts here:

1. A clear example why the Blue Cash from American Express card is consistently rated the best card for big spenders.

2. He's making the most of his card by following two of the major principles in maximizing your cash back rewards -- charging all he can on the card and picking a card that's tailored to his spending. The high charges in the g/g/d areas is what makes this card a real winner for him.

3. Over 2% return is GREAT!!!!! Hard to beat -- especially with a single card strategy.

My Best Advice for New Entrepreneurs

The Money Blog Network is doing a group writing project this week on the best advice for new entrepreneurs. This is my contribution.

I've never been a "true" entrepreneur. Sure, I've had side businesses and hobbies that have made some decent money, but I've never fully committed to entrepreneurship by quitting my job and going out on my own. So my advice may be "tainted" a bit accordingly. Just wanted to state that upfront so you all know where I'm coming from.

Anyway, here's my best piece of advice for new entrepreneurs:

Don't quit your day job until you've got at least a decent start on your new business.

Just like I wouldn't quit my job until I had a new one, I wouldn't quit to go out on my own until I had at least a start (or hope of a start) at making some money from the new venture. To do otherwise would simply be too risky for me given that there are a lot of other ways to make more money without quitting your job. That said, I understand that this advice might be contrary to successful entrepreneurship -- it might slow you down or even keep you from ever going out on your own. Maybe that's why I'm not an entrepreneur -- I'm not willing to take on that much risk.

What do you think of this advice -- is it good or bad? And what is your best piece of advice for new entrepreneurs?

Here's more on this topic from other MBN sites:

• Create a Business Plan by Answering 4 Simple Questions
• Are you thinking of quitting the nine to five?
• Can You Be an Entrepreneur in Your Spare Time?
• My Best Thoughts For The New Entrepreneur
• 5 Tips for Starting a Small Business
• Advice for Entrepreneurs
• Encouraging your budding entrepreneur - Part One: Benefits

Readers Love Blue Cash from American Express

Lots of readers are earning a TON of money using the Blue Cash from American Express credit card. Here are a few comments from my recent blog post titled Reader Earns a Ton with Amex Blue:

My wife and I just got back $696.44 on our AMEX Blue in our first year using it! We use a combination of the AMEX Blue and Chase Cash Freedom card. We use the Chase Cash Freedom card for our monthly expenses of the following three categories to get 3% cash back: (1) telecommunications; (2) cable/satellite TV/Internet service providers; and (3) gym/recreation memberships. We then use our AMEX Blue for everything else, including of course the Gas, Grocery and Drug store. From the AMEX "Cash Tracker" it appears that for our purchases about 20% where for Bonus Categories, and the other 80% was for regular purchases. I was extremely happy about our bonus program! I am a huge fan of the card and think it is a great way to earn some extra money, while paying off the card multiple times a month, so I never carry any balance.

Sounds like they are using the same strategy I am to maximize cash back rewards.

Here's another commenter doing the same thing:

We got turned on to the blue cash card last year after starting to read your blog... two months ago we reached our 1 yr anniversary w/ a $847 payout. We are now pursuing the two-card option with the addition of the chase freedom card. I really enjoy having the AE/VISA combo as an option, with the additional 3% float for 15-20 days each month, and no free cash in my pocket.

$847 is nothing to sneeze at!!!!!!

One more comment:

I got $652 for my first year with Amex Blue Cash. The return rate was 2.12%. My wife and I put everything possible on the card and pay it off each month. Our normal expenditures include tithe, gas, groceries, insurance payments, and auto service. We also eat out once every week or two with family and friends. We pay the bill with our card and they pay use cash for their portions of the bill. I need to look into paying my mortgage with the card. That would add another $400 or so to our rewards.

Any cash back return over 2% -- especially using one card only -- is a GREAT result in today's market, especially since 1% cash back is what many people are settling for.

How to Turn a Photography Hobby into a Business

I've suggested several times that one way to earn extra money is to turn your hobby into an extra income. I've also highlighted several examples of how people have done this including ham radio users, wet shavers, bloggers, artists and more. As such, I'm excited about today's guest post from Stephanie Simpson. She's a Los Angeles-based family photographer (you can visit her website for more info), who's also a contributing member of Digital Photography Blogs, a collective of photography blogs for shutterbugs of all levels. Stephanie has turned her photography hobby into a business and now shares her suggestions on how you can do the same.

About a year ago, I decided that it was time to make some changes.  My daughter was about to start preschool and I was going to have nine glorious hours to myself every week.  That's when I knew what I had to do.  I've had a camera in my hands most of my life, and even have a Master's Degree in Cinematography.  But still photography has always been just a hobby, until last year, when I decided to start my own family photography business. 

Ok, now what, I asked myself?  Where to begin?  I spent months doing research and setting up my business before actually launching, and here's what I learned along the way.

Know Thyself

Before delving into the nitty gritty of a photography business, it's critical that you first examine yourself.  Are you the kind of person who can run a business, live with unsteady income, keep on top of the paper trail, work easily with clients, look for work every day, and constantly market yourself?

Not everyone is cut out for freelancing.  Knowing how much income is coming in every month is a big deal, and the unsteadiness of freelance can be very stressful if you're counting on the money.

I freelanced for years in the motion picture industry, but when my belt got a little too tight one year, I chucked it all for a regular job at Warner Bros. Studios.  I loved the regular paycheck, but my days were filled with drudgery.  But my life situation has changed now, and I no longer have to fully support myself with my freelance earnings.  This takes the pressure off and allows me to build the business gradually with diminished stress.

Do a Lot of Research

If you are interested in Stock photos, product shoots, food photography, headshots, or Weddings, learn as much as you can about those unique industries, and the best practices for those businesses. 

Research your home market.  What do local photographers charge for the services you plan to offer?  How do they market themselves?  How is your photography different from theirs?  What can you offer that they can't?  This can help you to brand your business and tell you how to position yourself in the market. 

I find that my photography is a lot more colorful and fun than some of my competitors.   My pictures are as strong as some of the big players in Los Angeles, but I bring a unique playfulness and color to my shoots.  Knowing this helped me to design my website to reflect my strengths.

For thorough details about starting your own photography business, check out the book, "Photography: Focus on Profits," by Tom Zimberoff.

There are great resources for photographers on the web, such as www.digitalphotographyblogs.com and  www.photo.net.

Build a Portfolio

The big question is, what kind of photographer do you want to be?  Do landscapes light your fire?  Do you dream of photo shoots on the Serengeti, or are blushing brides more your speed? 

I like photographing people, and I love capturing the personalities of little kids just being themselves.   It seemed like a natural fit for me, so the next step was to build my portfolio.  I did this by offering to photograph my friends' kids for free in return for using the images on my website.  They got something out of it, and I got to practice what I do.

This gets a little complicated if you really want to photograph bats in South America, but there are ways to explore your genre in your own neighborhood. 

Start Small

Many photo business books focus first on the equipment you will need to buy, the studio space you will have to lease, and the start-up money you will have to spend.  My advice is to start small and build gradually. 

1) Don't quit your day job.  The beauty of a photography business is that you can start small, build your business and portfolio gradually and then be in a much better position to decide whether you are able to do this full-time.  This was a perfect solution for me as a stay-at-home-mom wanting to bring in extra income.

2) Keep your expenses small.  Since you're already interested in photography, you probably already have a pretty nice camera and some lenses.   Instead of splurging on a lot of sweet new gear, make a personal rule that you won't buy more equipment until you've earned the money to buy it through your photography. 

3) Outline your services and set your rates.  Based upon the rates of the competitors in your market, how much do you want to charge for your services?   What is included in the package?  Will you offer prints?  Will you deliver on CD?  Be as specific as you can. 

4) Build a nice website.  Your website is probably the first place a potential client will go to view your work.  It should look like you and reflect the kind of work you do and the kind of clients you want to attract.  Here's mine.

5) Be prepared to wait.  The jobs are not going to come rolling in by magic.  There may be long periods of time with no work at all.  That's why you didn't quit your day job, after all.  If the phone isn't ringing off the hook, it's probably time to step up your marketing efforts. 

Setting Up Your Business (the paper trail begins)

1) Name your business, file for a DBA to establish yourself as a business entity, and file for a Federal Taxpayer ID so you can get a bank account in your business name. 

2) Research the tax laws in your state with the Franchise Tax Board to determine if you need to charge sales tax for all your services or just your prints. Every state is different.

3) Consult an accountant.  Most first conversations with accountants are free, and they can let you know if you have to file quarterly or just once a year.  My accountant helped me choose accounting software, and advised me about what home business expenses I can deduct and how to track them.

4) Consider business insurance.  One client tripping over your tripod could send you to bankruptcy.  I worry that I'll ask a child to sit on a stool, they'll fall off, get hurt, and I'll get sued.  Scary proposition, so I've invested in good liability insurance.  This will also protect your gear, if it's ever stolen. 

5) Set up a contract template.  For a great resource of generic photography contracts, check out the book Business and Legal Forms for Photographers, by Tad Crawford)   It also has a CD with the templates that you can customize for your own business.

Taking the Plunge

Photography is a great baby-step business.  You can get your business off the ground with very little start-up capital.  It's not like opening up a restaurant!  If you've got the photographic skills and your portfolio is strong, if you are self-motivated and you are organized enough to run your own business, maybe now's the time to be paid for your pictures.   Happy shooting!

Reader Earns a Ton with Amex Blue

Here's an email I received from a reader who earned a good amount last year using her Blue Cash from American Express card:

I read on your site a lot about using Amex Blue Cash for the cash back rebate. I just want to report that after a year of charging almost everything on the card (and paying it off each month), my husband and I earned about $566! Our return on our total charge amount was around 3.7%, enough to purchase a new laptop for my husband, which he really needed. We're really happy with the program and look forward to our rebate next year.

Ok, that 3.7% seems really high. I tried it mathematically and the only way to earn that kind of return is if they spent everything on gas, groceries, and drugstores (these earn 1.5% initially and 5% after the first $6,500 in charges) and $16,000 in total. This gets $568 in cash back and 3.57% return. Close enough to what she said happened to prove it's do-able. Then again, maybe she got some sort of bonus sign-up incentive that made the card even more lucrative. In that case, 3.7% is certainly achievable.

Just goes to show you -- if you match the right card with how you spend your money, you can really maximize your cash back.

An Example of Turning Your Hobby into an Income

One of my 11 great ways to make more money is to turn your hobby into an income. And recently I suggested that you could make some extra money by renting out part of your home. Well, here's a couple that's combined the two ideas into one. In MSN Money's list of six smart ways to retire sooner, they detail this story:

"I wanted to buy a lot of great ham radio equipment," confesses Brad Goersch, a retired technology executive who moved to Saint Croix in the U.S. Virgin Islands last year with his wife, Donna.

So to justify the purchase of powerful radios and giant towers on their newly purchased hillside property -- and to generate some extra income -- the couple rent out their ground floor, a self-contained apartment, to fellow ham-radio buffs who travel from as far afield as Japan and Belarus in order to broadcast from the exotic locale.

If you're willing to be creative and a bit flexible, there are lots of ways to make a bit more money.

How about you? Anyone out there have some unusual ways to make a bit more income?

Get 3% Back on FIVE Chase Freedom Visa Categories

As I've discussed before, I'm using the Chase Freedom Cash Visa Card as part of my effort to maximize my credit card cash back rewards. The card offers 3% cash back on the three most-used categories you charge in each month (out of 15 categories total.) Or at least that's the default plan. I recently found a way to expand it a bit.

I received a mailing that told me I could get 3% back on five (not just three) categories if I opened up a Chase checking account and linked my card to it (not direct payment, mind you, just had the two linked. BTW, this makes it more convenient too since if you do so you can see both the checking account and credit card info online in one spot.) Obviously, the mailing was an effort to get more people to open up Chase checking accounts. But I already have one. So I simply went in to my bank, asked for the deal/linkage, and they set me up in about three minutes.

It's probably not worth it for you if you're not a Chase checking account holder already. But if you are, here's a good and easy way to earn higher cash back rewards for a very minimal amount of effort. Simply stop into your bank and ask for the deal.

Credit Card Myths

Here's a piece from MSN Money listing nine credit card myths. Number three caught my attention:

Myth No. 3: Merchants may require identification, such as a driver's license, when you pay with a credit card.

Merchants' agreements with Visa, MasterCard, American Express and Discover specifically forbid them from requiring identification. Your signature is supposed to be enough.

Furthermore, merchants' contracts with Visa and MasterCard are supposed to prevent them from even asking for ID. American Express and Discover don't prohibit asking but strongly discourage it.

Merchants typically ask for ID because they're trying to reduce their own fraud costs. But if a clerk memorizes or writes down vital information from your driver's license -- your address or date of birth, for example -- you're the one who could be at greater risk of identity theft.

We discussed this issue here a couple months ago. People had mixed opinions on whether or not it was a good idea for stores to do this, whether or not they minded, and whether or not it was even legal given the credit card companies' policies. Now at least the last issue is settled -- it's not acceptable as part of the agreements.

Myth #4 also was worth considering since it's related to #3:

Myth No. 4: You can deter identity theft by writing "Ask for ID" instead of your signature on the back.

See above. You'll certain deter use of your card, because merchants aren't supposed to accept one that's not signed on the back, and that could affect you as much as any thief.

I always sign my cards -- like they can read the signature anyway. ;-)

And finally, a myth all FMF readers know is false:

Myth No. 9: Rewards cards are pretty much the same.

This myth takes different forms, including "the best rebate you can get is about 1%" or "you have to pay an annual fee to get a rewards card" or "the rewards aren't worth the effort to redeem."

Ha! We know you can do MUCH better than 1% on a rewards card, huh? ;-)

An Example of How to Turn a Hobby into an Income

One of my 11 great ways to earn more money is to turn your hobby into an income. Today we have a post from a Free Money Finance reader who did just that.

A few months ago, I arranged two guest posts from Badger and Blade about ways to save money on shaving (Save Money on Shaving, Save Money with Straight Razor Shaving).  In full disclosure, I mentioned to FMF that I have a hobby-turned-small business in the same industry. While the first two posts were published, I believe FMF was more interested in my story of how I turned a hobby into a small business!

I'll be upfront with this; my small business was an accident.  While I do have a strong entrepreneurial spirit, I stumbled into this business because I was trying not to get in trouble with my wife.  Hopefully, you can use what I've learned to help you see your hobbies and interests in a new light.

When I started experimenting with traditional wet shaving (brush, soaps, double edge razor, etc…) I wanted to try different razor blades, as I had read that they all perform differently.   However, this was not easily done because some of the blades were only available in bulk, while others were found only from sources outside of the USA.  If I wanted to try the blades at once, I would have had to order from multiple sources, pay a lot in shipping charges, and be stuck with piles of blades I may not like.  I figured I'd be in a bit of trouble for "wasting" $100 on razor blades.   Instead, I hatched a plan and asked around on Badger & Blade to see if a few people would be interested in buying my excess blades, i.e. a sample of the popular blades.  A couple people said they'd be interested, so my wife gave me the OK.  I did, and sold the blades at cost, and figured that was it.  To my surprise, I received a few messages from people asking if I'd do it again.  I'm not exactly sure why I agreed, other than to be nice to a group of people that were nice to me, but I ordered more blades and either sold them off at cost again or traded them for other shaving items I hadn't tried.

Fast forward a few months and I started ordering enough so that my suppliers gave me slight discounts.  Now, instead of selling or trading at cost, I made a little bit of money.  At this point I realized continuing to offer the razor blade sample packs was worth doing. Over the course of the next few months, West Coast Shaving was born.

Front this point, the story turns into how to run a small business, and not something easily covered in one post.  Suffice it to say, there was a lot of work, a lot of planning, and a lot of investments to turn a budding idea into a real business.  I happened to "pick" an industry where margins are slim and information is scarce.  It wasn't easy getting to where I am right now.  I've learned this the hard way, so be aware of the industry structure before you decide to open shop.  Additionally, looking back over the last two years, I recognize three important concepts that made this work.

1. Fill a need - This is the most important concept.  With any industry, there are needs that aren't being met. Start thinking about the things YOU wish were available with a hobby.  What problems did you encounter when you started?  Those are areas with business potential.

2. Be different – Early on, I decided not compete directly with established vendors, but instead, compliment them.  In addition to not diluting the market, it has led to fun and profitable partnerships with well established vendors.  Online retail has enough competition.  Be different and people will notice.

3. Be efficient – I have a wife and kids, a demanding full time job, a church to support, hobbies to enjoy, and a few other projects I'm working on.  We're all very busy.  I decided to keep the options simple so that order fulfillment would be as efficient as possible. Margins are slim in the shaving industry as it is, if I couldn't fill orders and balance the books quickly, I would be better off taking a part-time job. For this type of part-time business, I believe in doing something simple, and doing it well.

It still makes me smile when I recount the origin of my small business.  I hope my story has inspired you to take a look around.  Business opportunities exist everywhere you look.  You just need to know how to look.  Lastly, if you decide to start a small business, make sure you have fun with it!

How I Made an Easy $10 Off Chase

Here's an update on the $10 bonus cash I talked about -- earned by using the Chase Freedom Cash Visa Card Blink system three times in the promotion period. All three of my purchases ended up being at CVS and here's what I bought:

• Two deodorants (B1G1F) for $2.18
• Two boxes of cereal (B1G1F) for $4.29
• One half-gallon of ice cream for $0.99 (I had a MAJOR coupon)

So my total spent was $7.46 and I received waaaaaay more than that in merchandise. And now Chase owes me $10 too! Cool!

All three transactions were specially marked on my credit card statement, but I haven't received the $10 credit yet. I think I'll get it in the next period since the last purchase of the three was on my last statement. Obviously, I'll be watching the statement to be sure I receive my $10.

Great Idea for Getting More from Your Rewards Credit Card

Here's a creative idea for how to make even more money from the use of your credit cards (left as a comment here recently):

Just an idea for using cards: my wife has terrible teeth (she brushes, flosses and uses fluoride twice a day, so I have no idea how) and is always getting mondo-expensive work done. We make sure her dentist accepts AMEX and use the Blue cash card for it! Instant rebates! Better yet, you then submit the expense to the flexible spending account, basically making an additional amount equal to your tax bracket!

Excellent idea! I always pay my medical costs directly from our HSA checking account, but why not simply pay with a credit card and then reimburse yourself from the HSA? Sounds like a great way to squeeze out even more credit card rewards.

Make Money by Renting Out Part of Your Home

Here's a piece from MSN Money that suggests you can make some extra money by renting out part of your home. It tells the following story as an illustration:

In 2001, Baschke remodeled the basement of her 1914 home into three more rooms and opened Connie's Bed & Breakfast and Boarding House.

Income from her six units -- including three to four full-time boarders at $550 a month and two to three seasonal bed-and-breakfast weekenders at $65 to $75 per night -- averages more than $30,000 a year.

This isn't a bad idea, but you don't have to take it to this extreme (remodeling/setting up a full-scale business) to make some extra money. Here are a couple other options that are less complicated, though they also will earn you less:

• Rent out ONE ROOM to a college student or some single person. If you have a spare bedroom and can find someone compatible, then it's a good way to pocket some extra cash.

• Rent out part of your house as storage space. The self-storage business is a goldmine. You could be part of it. ;-)

If none of these ideas work for you but you still want to earn some extra money, check out 11 Great Ways to Earn More Money.

Make a Fortune Being a Tutor

Here's a comment left on my post titled 26 Ways to Make More Money:

I am a student and a tutor. I teach economics, mostly for law and business students. They tend to have the most money.

The rate per student per hour has been 25 euro for years, bur recently went up to 30 euro ($47 at the time of this writing). There also is a entry fee of around 170 euro ($265 at the time of this writing), although this is often used as a first degree price differentiator. (So we have a first talk with the parents, look at their clothes, car, manners, negotiation skills etcetera and give a discount on the entry fee if necessary, but never on the hourly rate.)

I receive half of the revenue, the other half is for the company that recruits the students. It gets juicy when we start teaching to groups of up to 3: 45 euro per hour ($62 at the time of this writing). I did a lot of that last year and saved over 600 euro per month ($935 at the time of this writing) working less than a day per week.

So yes, it's a great business as a tutor. Not so much as a company, because a lot of tutors run away with the clients and the business model is therefore not that scalable.

He said he can make $62 per hour with three students, but there's no reason he couldn't have more and work more hours (though I will assume that this is the most that can be earned for the numbers I'll share below.) Consider the following:

• If he can work 50 weeks per year for 40 hours a week, at $62 per hour, that's $124,000 per year.

• Let's say he can only earn half that amount per hour or only work half that many hours per year. That's still $62k per year.

• But let's say he runs his own business (doesn't have to give half to the company) and works full-time. He'd double his salary to $248k plus the entry fee (which could be substantial.)

So what's this say for the rest of us who have jobs? Couple thoughts:

• Could be a GREAT part-time money-maker.

• Eventually, it could then be developed into a full-time business.

How to Tell a Work-at-Home Scam from a Real Opportunity

File this under the "this should go without saying but it still trips people up" category. Hence I'm going to run it.

Yahoo has an article on how to tell a work-from-home scam from a gem which includes the following:

Know the signs of a scam. This is where your instincts come in. If it sounds too good to be true, it probably is. That said, there are some distinct signs of a work-at-home scam, starting with overstated claims of what you'll be able to earn, of a product's effectiveness.  A safe rule of thumb to follow is if you're asked to pay money up front, forget about it.

Know common work-at-home scams. Some of the more prevalent scams include at-home assembly jobs, such as craft kits. Think about it: Have you ever had to pay an out-of-the-home employer money before you are paid a salary or commission? (Excluding franchises, that is.) Other common scams involve envelope-stuffing jobs, chain letters and "online business" opportunities that, again, ask you to send money for a disk, which often turn out to be poor business leads that you have to pursue on your own.

Use reputable web sites to find and vet work-at-home opportunities. There are work-from-home jobs that will provide the flexibility and pay many are seeking, but you've got to do some research to make sure they are legitimate. To check out a company, start with the Better Business Bureau. If you've got a sneaky feeling that a work-from-home job ad is really a scam, you may find it at scambusters.org, which gathers info on all kinds of online and offline scams.

Basically, use common sense. If it's too good to be true and/or if you're asked to do something strange (pay them in advance, provide a credit card number, etc.), then you should move on quickly.

Here's my question -- what VALID work-at-home opportunities are there in mass quantities? I understand that you may be able to find a local employer that lets you work out of your house, but is there a site somewhere that offers a wide variety of work-at-home jobs? I guess if you have some skill like writing, graphic design, etc. that you could offer your services on elance.com. But is there a list somewhere of ready-made opportunities where someone with any skill level can find an opportunity?

Or what about jobs you create on your own that allow you to work from home? Any ideas out there?

American's Losing Earning Ground

Some food for thought:

Here's another excellent reason to take a scalpel to household spending.

On Friday the Bureau of Labor Statistics revealed that the average American worker is losing ground in real terms. Again.

After counting inflation, American workers actually earned less in May than in April, and substantially less than a year ago.

For some money saving tips, check out my laundry list of ideas.

Make More Money by Working at Night

If you're looking for a way to increase your income, here's an idea to add to the list: start working the night shift. It seems that there's more money to be made if you work when others are off. The details:

Most industries offer a financial premium for employees who work into the wee hours of the morning. Pharmacists, police officers and Postal Service mail sorters make up to 10% more overnight, according to Payscale.com. Some TV and radio news writers earn 15% more, and nannies can earn a 20% premium.

Money isn't the only benefit. There are other intangibles, such as greater autonomy, fewer meetings (all the higher-ups are sleeping) and the likelihood of getting promoted sooner, because there are fewer people to compete against.

Click here for a list of jobs that earn more working the night shift than in the day.

Ok, so you can make more money, but what about your family? If you have one, it will be tough seeing them since you'll be asleep when they're up and vice versa. In addition, working the night shift might be bad for your health. Are these downsides worth the 10% to 20% increase in pay?

Anyone out there a night shift worker? What are your thoughts on the issue?

Can You Really Earn 6% Interest in a Rewards Checking Account?

I recently received the email below from a regular reader and wanted to share it with all of you.

Remember that old adage that "if it's too good to be true, it probably is"?  Well, this one has me a bit stumped, but I'm still intrigued.

It's the "Rewards Checking" phenomenon.  Numbers of banks and CU's seem to be offering them these days.  The details vary, but a typical offer is:

• No maintenance fees
• Free ATM withdrawals from any U.S. ATM, meaning they do not charge a fee for using anyone else's ATM and will actually reimburse you for any fee another bank charges you
• Interest of 6.01% on the first $25,000 of balance

It's that last one that really made my eyes pop out.  I'm thinking, why in the heck do I have money in a savings account earning 3.6%?  Or even in a CD earning 5.25% (I thought I was doing well with that!)?  Not to mention the average of $500 or so I keep in my 0.1% checking account, the $200 or so I keep in my backup savings account at .75%, or the $2,000 or so I keep in my money market brokerage account at <2%, all to transfer money into my checking if I need it.  If I had a $25,000 cushion, I wouldn't need to have those backup accounts.  And I'd be earning >6% on my money while I was waiting for checks to clear.  For that matter, why not tap that HELOC and put the money in a rewards checking account and make money on the spread?

There are a few requirements:

• Must get online-only statements (I won't really miss the paper)
• Must check your account online at least once a month (once a day is more like it)
• Must make one ACH Debit or Credit transaction per month
• Must make 10 debit card transactions per month

That last one is probably the biggest pain.  But really, it should be pretty simple to put ten transactions on the debit card instead of one of my rewards cards, and the hit to the rewards will be minimal compared to the interest I'm making in return.

Let's say, for sake of argument, that the entire $25,000 is money that would be in savings instead.  So, I'm making 6.01% on that instead of 3.60%.  That's a spread of 2.41%, for a monthly gain of $50.  Even at my best cash back rate of 6%, I'd have to be diverting $836 of spending from that card before I'd lose more than $50 of credit card cash back rewards.  Surely I could come up with 10 transactions which averaged less than $83.60.  More likely, I'd be diverting transactions that would otherwise be earning 2% or so, and probably more in the $10 range.  So, if I diverted 10 $10 transactions from my 2% credit card to the debit card, I'd be giving up $2 in cash back rewards for $50 in interest.  I'll take that.

My biggest question here is what's in it for the bank?  I understand rewards credit cards and 0% balance transfers.  Sure, the bank can lose money on the former and certainly does on the latter.  But the bank is betting that you'll start carrying a balance at some point and they'll make money on the interest.  I haven't figured out the hook for the bank on rewards checking yet.

Nevertheless, I've opened a rewards checking account, and will probably open another.  We'll see how it goes.  I'll be sure to let you know my experience.

But I would be interested in knowing what you think about these accounts, whether you have any experience with them, and if you see some downside I don't.  I think your readers would likely be interested as well.

Has anyone else heard of anything like he's describing? (I haven't.) What are the pros/cons? Looks like a decent deal to me.

John McCain Racking Up Credit Card Rewards

Check this out:

Sen. John McCain (R-Ariz.) and his wife reported more than $100,000 of credit card liabilities, according to financial disclosure documents released Friday.

The presidential candidate and his wife Cindy reported piling up debt on a charge card between $10,000 and $15,000. His wife’s solo charge card has between $100,000 and $250,000 in debt to American Express. Another charge card with American Express, this one for a “dependent child,” is carrying debt in the range of $15,000 and $50,000.

Looks to me like McCain is trying to maximize his credit card rewards -- and with spending like that, he'll be earning a TON!!!! My guess is that he pays it off every month. Why do I think that it's not revolving debt? Because these figures are a drop in the bucket for their family -- especially for his wife. It's like me charging $1,000 a month (which I do every month -- even more than this) -- it's just not that much relative to income/planned spending.

On the other hand, something's up with Obama:

Democratic candidate, Sen. Barack Obama (D-Ill.), reported no liabilities in his annual financial disclosures.

First of all, who has NO liabilities? Even I have liabilities of some amount every month (before my card is paid off -- and even when it is paid off, other charges that have occurred since the end of the billing period have hit it.) Really, he has NO liabilities? Hmmmm.

Second, he's leaving a TON of money on the table. We all know that Obama has raised a boatload of money. If I was him, I'd pay for all my ads, trips, gas, staff, etc. -- everything I could -- with a Blue Cash from American Express card. And I'd earn a good deal of cash back in the process. ;-)

The Ins and Outs of Reward Credit Cards

Here's a CNNMoney piece that quotes Consumer Reports on the value of rewards credit cards. The article starts out talking about how reward credit cards are usually not a good deal for consumers:

About 85 percent of U.S. households participate in at least one rewards program, according to a study released Monday by Consumer Reports. And though rewards do spur consumers to spend more, the study found that confusing rules and restrictions make most reward cards more trouble than they're worth.

"They make it 100 times more complicated," said a former marketing executive at CitiCards, referring to the popular rewards programs. For example, when you read the fine print, you might find that some rewards are limited to certain brands, or expire if not used within a certain timeframe.

I have to agree here. Some of the cards out there (especially points programs) are so confusing and complicated it's amazing to me that people sign up for them. This is one reason I like to keep it simple -- give me cash! It appears that many others are the same way because the article says cash back programs are the most popular. But the article gives a downside to them:

And while cash back, gas and grocery rewards credit cards can offer some relief for costly essential items, they often carry higher annual percentage rates than traditional credit cards, Consumer Reports said. Looking at some of the more generous credit card rewards programs, the study found that rates varied from 9.74% to as much as 19.99%.

Here's my response to that comment -- WHO CARES WHAT THE APRs ARE? I don't have any idea what the annual percentage rates are on any of my cards. Why? Because I NEVER carry a balance on them. Translation: I pay them off every month. If people can't do this, then of course having a reward card isn't "worth it." They'd be much better off not having one and not paying the associated interest. (And a related tip -- you don't need to pay an annual fee either. I certainly don't.)

The piece also lists several tips to get the most from reward cards including:

• Consider where you shop. Opt for cards that will earn rewards at stores and services you use most often, or offer savings on items that you actually buy regularly.

• Project your spending. Figure out how much you're likely to spend, and translate that into cash back or points, depending on which program your card uses.

• Favor cash back. Cash back accumulates without you actually having to do anything. Plus, Consumer Reports found that cash back cards tend to offer better rewards than point equivalents.

• Skip credit if you carry a balance.

• Do the math on do-good programs. You're probably better off going with the cash back, and then sending money to a charity yourself.

• Use airline miles fast. Airlines are always changing their redemption rules, and considering how much the big carriers are struggling these days, holding onto unused miles can cost you.

• Avoid temptation. Overspending for a "freebie" often doesn't pay.

This bears repeating: "Consumer Reports found that cash back cards tend to offer better rewards than point equivalents." They're simpler to manage as well (not as confusing) and the rewards (cash) can be spent on anything. What's not to love?

I can't find it online, but in the actual copy of Consumer Reports for July, they list the best reward credit cards. The best cash back cards are the two that have been at the top of the list for some time: Blue Cash from American Express and the Chase Freedom Cash Visa Card. This is great news for me since I'm using both of these cards to try and maximize my cash back rewards this year.

26 Ways to Make More Money

Here's a list of 26 ideas for making more money. Some of the ones I like best include:

1. Pet sitter. Right now I’m looking for a pet sitter for my miniature dachshund. The kennels charge at least $20/day. Could you undercut the kennels, charge $15/day and keep a few pets in your home?

Might as well make some money off all those pet lovers, huh? ;-)

4. Tutor. If you have a college degree, use your downtime to tutor kids in the summer or even over the Internet.

I wonder what the going rates for this are. Must be good since whole businesses are built on tutoring.

10. Teach at your local community college.

Marketing? Business? Personal finance? Growing roses? There's a lot I could teach.

14. Do you love to garden and use organic methods? Depending on how large your harvest may be, you could offer “in season” locally grown, organic vegetables and fresh herbs for sale to a restaurant.

This could be part of my future plans if we find the right new home.

22. Make jams and jellies.

This goes with #14 to me.

25. Freelance writing.

I've done this one. Decent money for the time investment.

See any on the list that you like better?

How to Make It Rich: Marry a Go-Getter

When I saw this piece on the Girl Scout that sold over 17,000 boxes of cookies, my immediate thought was that whoever married her was probably going to be set financially. After all, with a go-getter like that for a wife, it seems like the couple would be destined to do well (as long as they could control their spending, of course -- you have to play both great offense and defense to do well financially.)

So why did I think this? Because if you can sell, you can make a great deal of money. And someone that has the drive and ability to sell that many boxes of Girl Scout cookies certainly has the drive and skill to make it big in her career.

Ok, this post is obviously a bit tongue-in-cheek. Before I get blasted in the comments let me say that I know there are many more important reasons to marry than for money. But I did (and still do) think she'd make a great catch -- assuming all the other factors were met, of course.

Hey, I just noticed, she's from Michigan. I wonder if she'd wait a few years until my son is ready to be married. ;-)

Make Extra Money by Selling Your Hair

Smart Spending recently shared a piece on how to sell your hair for cash. The piece pointed to this woman's site -- where it shows that she sold her hair for $1,075. A few things stood out to me:

1. Wow, you can make serious money selling your hair.

2. It took her four years to do, so that's only a bit over $250 per year. Not the greatest, but if you like long hair anyway, why not?

3. She really marketed her hair well. Notice all the great selling points she lists.

My wife grew her hair out one time for a charity and it was a nightmare. For months she simply had long, straight hair that wouldn't do anything but hang like a limp towel. It was like I was married to a hippie gal from the 60's. But it was for a good cause (charity), so I dealt with it. Once. That said, if you like the way your hair looks when it's very long, why not grow it out and sell it?

And if you want a few more ideas for making some extra money, check out 11 Great Ways to Earn More Money.

The Art of Money Getting

Here's a summary of chapter four from 50 Prosperity Classics: Attract It, Create It, Manage It, Share It (50 Classics). This chapter is written by P.T. Barnum, author of The Art of Money Getting.

Key Quote

"The foundation of success in life is good health: that is the substratum of fortune; it is also the basis of happiness. A person cannot accumulate a fortune very well when he is sick."

Summary of the Chapter

There are no shortcuts to wealth, aside from right vocation, good character, and perseverance -- and don't forget to advertise.

My Thoughts on This Subject

1. I agree that good health is one key to growing your net worth. In fact your good health is more important than money. Without health, it's hard to maximize your greatest financial asset.

2. I especially echo the thought on perseverance. It's the third step in how to get rich.

3. As a marketing executive, I love "don't forget to advertise" as advice. One way "advertising" helps people financially is when they promote their careers and accomplishments.

Multiple Streams of Income

Here's a summary of chapter two from 50 Prosperity Classics: Attract It, Create It, Manage It, Share It (50 Classics). This chapter is written by Robert G. Allen, author of Multiple Streams of Income.

Key Quote

"Prosperous people have always known...If one stream dries up, they have many more to tap into for support. So-called ordinary people are much more vulnerable. If they lose one of their streams, it wipes them out...In the future, you will need a portfolio of income streams -- not one or two, but many streams from completely different and diversified sources -- so that if one stream empties, you'll barely notice. You'll be stable. You will have time to adjust. You will be safe."

Summary of the Chapter

The prosperous do not depend on only one source of income, but grow orchards of "money trees."

My Thoughts on This Subject

1. I read Allen's book a long time ago. I can't recall the specifics, but I remember agreeing with the principles but discounting some of his ways to implement those principles.

2. I agree that the more streams of income a person has, the better.

3. I currently have the following streams of income: my job, investments, this blog (though I give all the proceeds away), and freelance writing. I'm working on developing a few more -- and ones that are less dependent on my time to succeed.

4. Even with the few streams I have, my job is by far the dominant income producer. It would be nice to have a strong #2.

5. Many people don't have multiple streams of income. Some ideas to get more are listed in 11 Great Ways to Earn More Money.

6. This chapter is about playing great financial offense. Just a note that good financial defense is just as important and is often easier to influence/control. Spending significantly less than you earn is also a great way to protect yourself from a stream of income drying up.

The Path of Prosperity

Here's a summary of chapter one from 50 Prosperity Classics: Attract It, Create It, Manage It, Share It (50 Classics). This chapter is written by James Allen, author of As a Man Thinketh.

Key Quote

"Rectify your heart and you will rectify your life. Lust, hatred, anger, vanity, pride, covetousness, self-indulgence, self-seeking, obstinacy -- all these are poverty and weakness; whereas love, purity, gentleness, meekness, compassion, generosity, self-forgetfulness, and self-renunciation -- all these are wealth and power."

Summary of the Chapter

You will only become truly prosperous when you have disciplined your mind. Paradoxically, wealth (and happiness) comes most easily to those who forget themselves in service to others.

My Thoughts on This Subject

1. Interesting way to start a book on prosperity.

2. I agree that personal character and the traits they note above are important to living a successful life -- not just financially but successful in all areas of life.

3. Discipline is one key factor that separates the financially successful from those that just can't seem to get their heads above water.

4. Connection between wealth and giving again. Does giving make you wealthier? We know it makes people happier.

5. Living in service to others is not a popular concept today, though I agree it has the benefits he mentions above.

6. I wonder if Allen's book is a hard read. It was written so long ago, it could be difficult to understand. Anyone read it?

Make Money Blogging

Since I've suggested that people can make some extra income by starting their own blog and since I run a fairly successful blog myself, I regularly get questions about how to start and run a blog that can earn some extra money. In the past, I always referred people to my series on how to make money blogging. But that piece is a bit dated (I've now had over 2.7 million visitors -- not just 100,000) and I need to update it (though, I must say, the tips there are still pretty right on.) Plus, there are those of you who need a bit more detail on the various steps to take to set up and develop a money making blog. Well, I've got good news for you.

Darren Rowse of ProBlogger fame has written a new book titled ProBlogger: Secrets for Blogging Your Way to a Six-Figure Income. My advice for those of you interested in making money with a blog: get it. Buy it or go pick it up at your local library. It's a fairly quick read (at least it was for me -- it will probably take longer for someone not used to the various issues associated with blogs) and chock full of great tips (I found several that I'm going to apply myself.) Darren is a great expert on making money with blogs, and that certainly comes through in this book. It's a must read for those of you looking to pad your income a bit with a blog.

By the way, if you're interested in more details on making money with a blog, here are three sites that can give you more information and details on how to do so:

• ProBlogger
• John Chow
• Shoemoney

I read these three and almost always learn something new to make this site better.

Chase Offering Bonus Cash

I got a mailing a couple weeks ago touting Chase's Blink charge system. The system is basically a way you can charge on your card by simply waving it in front of a special scanner versus swiping the stripe as normal. Anyway, the mailing told me I could earn $10 in cash back simply by completing three "blink" transactions before June 6. I'm all over this! I can get $10 for probably $30 in purchases (or less.) Plus, the $10 will help me get to my award level faster with my Chase Freedom Cash Visa Card, so why not?

My plan is to buy something fairly inexpensive at the following places:

1. Arby's -- Chase sent me a coupon for a free sandwich when I buy fries and a drink -- and my daughter LOVES Arby's.

2. CVS -- They always have great buy one, get one free deals anyway, so it's an easy spend.

3. Office Depot -- The Chase people sent me a $5 off purchase off $25 coupon and we always need something from there.

Anyone else get this offer and/or used it?

Update: I actually wrote this post a few days ago and set it to publish today. Since then, I have made two Blink purchases at CVS -- one a buy one get one free deodorant for a total of $3 and another a buy one get one free cereal at $4.50. I'm now one purchase away from my $10!!!!

Do You Take Pay Instead of Vacation Time?

Here's an email I recently received from a reader:

I have a job that I can sometimes leave a little early or take low census days without pay.  I then supplement my pay check with my vacation pay.  Do to the fact we are having a hard time insuring my smoker husband, I've been fussing about what to do to help supplement our emergency fund.  It occurred to me that if I let my paid time off alone it would really start adding up.  It would be a substantial part of an emergency fund if I became temporarily disabled or I had to take time off work to take care of my husband. 

We can accrue over 200 hours.  That means an addition to our emergency fund of several thousand dollars.

My company lets us choose to be paid for vacation time at the end of the year or roll it over to the next year. I roll mine over if I have any left because I need/want to take my vacation time and don't need the extra funds. But this got me thinking -- how many of you out there choose to do the opposite? How many of you supplement your pay by limiting vacation time and getting paid instead? And for those of you who don't, why not?