Free Money Finance

Achieving Balance Between Life and Your Side Gig

The following is a guest post by Sunil from The Extra Money Blog.

Working part time on the side is becoming an increasing trend in today’s economy.  Without getting into the reasons behind the “why”, I will focus on the “how” part of striking a balance between work, life and your side business or business-es.

If you are already in this situation, you know how difficult it can be to juggle the multiple responsibilities and obligations on your plate.  If you are contemplating getting into this situation, I hope this post provides some value in preparing you to handle what’s to come.

Your personal situation and circumstances mostly dictate how much free time you have for a side gig.  For example, a single individual likely has more free time compared to someone who is married with children.  A senior manager in a public accounting firm likely is busier and spending more hours working than a new associate. Similarly, where you stand in life compared to your neighbor will dictate how much capacity you have to delve into extra-curricular activities.

Assuming that you have the time, how do you maintain a healthy balance given the existing priorities that are constantly competing for your limited time? I hope the following can help:

• Passion in your side gig – it is often said that having passion in what you do is the single most critical component of success.  Passion however is also a critical component of satisfaction and integration between your personal life and your side business.   So while your side gig has to make sense from a financial perspective, pick a subject you are interested in so work doesn’t feel like work.
• Pick a side gig to revolve around your life – I’ve said it repeatedly, but always worth reiterating that the American culture has this the other way around.  In America, we chase jobs and opportunities.  In many other countries, people choose where they will be happiest, typically near family and friends, and then build a business, big or small, around where they are.  Starting a side gig gives you the opportunity to shape it exactly the way you want it on your own terms.  Make sure the business revolves around your life, not the other way around.
• Give your all at work – you might be tempted to work on your side gig at work, after all you are likely more passionate about it than your job.  But do not make this mistake.  There are significant risks involved and you don’t want to lose your steady pay check, especially if it’s a job you like or don’t mind.  Sophisticated information technology tools can detect all kinds of activity on your work computer and network.  Besides, it’s just the right thing to do.  Only work on your side gig during non-work hours.
• Set clear priorities and establish boundaries around them – pre determine the number of hours and specific times that you will be working on your business and stick to this commitment.  It is easy to neglect your health and family when you catch the entrepreneurial bug.  Be clear on your priorities and dedicate time to each.  Because it is your side business, you don’t have to grow it overnight. Take your time and enjoy the journey, and share it with ones nearest and dearest to you.
• Set financial limits – similar to neglecting other priorities in life, it is easy to get carried away with spending to grow your side gig.  Pre determine what your spending limit is, and share it with your significant other or anyone else who has a vested interest in your finances.  Keep an eye on your spend and stay within the limit.
• Develop a support system – things may get overwhelming at some point, and even if they don’t, it’s good to have a go to sounding board to voice your ideas, opinions, troubles and frustrations.  A strong support system can help you get through challenging times, even if it is just in form of an independent third party advice or opinion.

These tips are not a comprehensive list by any means by which you can achieve better balance in life.  However, from personal experience, these tips have helped me maintain a good balance between never ending priorities and obligations that seem to stretch me in different directions on an ongoing basis.

You might be nodding your head right now if you can relate to this.  But take comfort in the fact that with the appropriate discipline, it is possible to have a wonderful career, a successful business on the side, and a great life too with loving and caring family and friends around you.

Two Solid Tips on How to Freelance Effectively and Profitably

The following is a guest post by Sunil from The Extra Money Blog.

I have written quite a bit previously about freelancing on the side and how working on the side for your own clientele in the same field as your career can triple your effective hourly wage and get you more time off from work too.

If you are in a service related profession, such as an attorney, CPA, clinical psychologist, decorator, logistics planning and similar professions, freelancing is arguably the easiest and most turn-key approach to making more money on the side.

That said, many aspiring freelancers make it a lot tougher to get started than it actually is, and often end up overspending on non-value add expenditures (or garbage) way before their business ever gets a chance to get off the ground.  Other psychological challenges faced are shortage of start-up capital and a dry pipeline of clients.  Without making this an ultra long thesis paper on freelancing, I will briefly discuss two areas of focus that can help you as a freelancer. 
What qualifies me to do so?  Although freelancing is not my main source of income, I have earned tens of thousands of dollars over the past few years taking up selected freelance projects, mainly within the capacity of conducting financial due diligence on business purchase deals, business and life coaching, search engine optimization and internet marketing strategy and implementation.

So without further delay, here are two areas of recommended focus for soon to be successful freelancers:

Line Up Your Ducks

It’s a common tendency for anyone starting a business for the first time to be ultra particular about getting all the start up details right.  While some things are critical to take care of, others can be overlooked.

Business set up is one example.  When first starting out, focus on acquiring your business before you incorporate your business entity.  Investing the time and money to set up your business before you get any business will be a big waste of limited resources.  Remember, one thing busy corporate professionals don’t have much off is time, so make sure to use your time wisely.

Most freelancers typically engage in projects tied to their professional skill-set.  If you are in this boat, focus on getting commitments from clients.  Your service offering should be something you already know and can speak about well enough, so it shouldn’t be any problem approaching potential clients with your skill-set.

One way to start spreading the word is by beginning with your inner circle.  Tell your family, friends and social colleagues about what you are doing, and get referrals when possible.  Set up your business formally only after getting a few commitments in your pipeline.

Some immediate business set-up tasks to consider are the following:  get business cards published, launch a website or a blog, file papers for business entity incorporation (I recommend an LLC to start off), get your Employer Identification Number (EIN), open up a business bank account and start developing a relationship with an accountant you trust (preferably referred through word of mouth).

Remember, while it is good to pre-plan, you don’t have to be meticulous about every single thing, particularly when first starting out.  Avoid the paralysis of analysis and just do it.

Hit the Trenches

The big business deals are made in the trenches, whether on the golf course, cocktail party or the football stadium.  The point is to get out there and network.  Sure you’ve told your family and friends, but as a freelancer, you can’t expect business to walk over to your doorsteps. 

Get out of your comfort zone to network and meet people.  Identify areas where you have the best chance of finding your ideal client and hang out in those areas.  For example, if you are a search engine optimization (SEO) expert, you might want to attend web development seminars and mixers where web masters are likely looking to team up with folks who know SEO.  Connect with local business organizations through the chamber of commerce in your area, or find a business network group to join.

If you are very good at what you do, and given some time and projects under your belt, your clientele will help you acquire more business through word of mouth referral.   To improve your chances of benefiting from word of mouth referral, in addition to doing a bang on job, make it a point to periodically touch base with them. 

It is important to stay in front of your clients so they don’t forget about you, even if it is via an occasional email greeting during holidays.  Marketing and sales is all about frequency of exposure or point of contact. At the end of the day, we are all in the profession of marketing, whether we are pitching a promotion or a raise, or trying to sell a product or service.

Of course, don’t forget Facebook and Twitter, the two single biggest social networking platforms.  If used appropriately, these alone can fetch you more business than you could handle.  Incorporate both of these into your website or blog.  If you have a website, consider attaching a blog to it where you can write more frequently about recent developments in your business and industry.

Concluding Thoughts

Personally, my network and recently my blog have been the most effective tools in bringing me high quality and highly paid freelance work.  I do want to emphasize the fact that as a new business, you won’t be banking big bucks right away.

Developing any business takes time, patience and persistence over an extended period of time.  It may take you weeks or months along with several rejections to get your name out there and secure a gig, but you will eventually if you keep chugging along.

It helps to have a full time job when starting out so that you are not desperate about acquiring freelance business.  But with the right and consistent approach over time, you may grow your part time freelance business big enough where you could quit your job if you wanted to.

How to Get a Minimum of 2% Cash Back When Shopping at Costco or Sam's Club

There were two especially insightful comments left on my post titled Time to Make a Credit Card Change. They both offered new ideas on how to get additional cash back credit card rewards at the two largest club stores.

The challenge is that both Costco and Sam's only allow certain credit cards to be used: Costco offers American Express and Sam's uses Discover. Unfortunately most Amex and Discover credit cards only offer 1% cash back at these establishments (the lone exception is the Fidelity 2% Amex that can be used to get 2% back at Costco.) So how can you do a work around the system to get at least 2% at Sam's or Costco? Here's the basic strategy:

Buy gift cards for Sam's/Costco from alternative sources that allow you to get a higher percentage back on your cash back credit card.

Here's how it works for Costco:

1. Go online to Costco.com.

2. Purchase Costco gift cards using your 2% "Schwab" Visa (Costco.com differs from the stores and accepts all types of cards -- which is the key here), the 2% Fidelity Amex, or another card that gives you at least 2% (maybe more?) on club store purchases.

3. Use the gift cards to make your purchases at Costco.

Here's how it works for Sam's:

1. Go to Walmart.

2. Purchase Walmart gift cards (which can be used at Sam's) using your 2% "Schwab" Visa, the 2% Fidelity Amex, or another card that gives you at least 2% on such purchases (FYI, if your Walmart is set up in the credit card's system as a grocery store you can easily earn more than 2% since many cards give even higher levels of cash back for grocery purchases.)

3. Use the gift cards to make your purchases at Sam's.

Yes, these solutions require a bit of work and are not for everyone. But if you make a lot of purchases at Costco or Sam's, it's likely that this strategy can earn you a decent amount of money over time.

Why Should Successful Corporate Employees Not Start a Side Business?

The following is a guest post by Sunil from The Extra Money Blog.

I just realized that everything I have been blogging about to date has been horse crap.  It is absolutely false information that has misguided so many aspiring corporate employees to start a side business.  As a result, an outraged group of “side-giggers” set my house on fire.  But then I woke up this morning and realized that it was just a bad dream.

Yeah. I made that dream up. A dream which is counterintuitive to everything I stand for and talk about on my blog.  But hang with me for a few sentences here and there might be a valuable take away for you, especially if you are in a successful corporate career.

The Value of Your Time

Should you start a side business?  That question can be partly answered if you know the value of time.  Do you know what your time is worth to you and to your employer?

Consider this example. Let’s hypothetically assume you are a consultant and make the equivalent of $60 an hour.  What do you think your employer makes for every hour you work on your client?  Your client is really your employer’s client, and because your employer has to pay you as well as for your computer, office rent, lavish lunches and dinners and much more, they likely bill your client 5 times what you make, or $300 per billable hour that you work.

From the above example, we can conclude that one hour of your time is worth $300 to your employer and $60 to you.  Do you see an opportunity here?  Are you thinking about getting on your own and providing the same consulting services to your own clients at a rate much lower than what your employer charges but much higher than the $60 you get paid?

Although you may not be able to charge the full $300 to your client if you worked for yourself, you may be able to triple your hourly wage easily while getting more time off from work too.  The fundamental question to answer is what is your time worth to you? Is it $60? Is it $120? Or is it $180?  In other words, are you willing to simply work more hours and make the same $60 you make at work?  Or is your free time worth more than that? If so, how much?  What can you reasonably expect to command and get paid if you worked on the side for yourself?

When Should You Start a Side Business?

If you are confident that you can make a lot more working for yourself, then starting a side business as a freelance consultant or contractor might sound like a no brainer to you at this point.  However, consider that there are limited hours in a day and the things you like to do with your free time.  How do you put a price tag on hours spent with friend and family, for fun and pleasure?

While the answer varies across the board depending on personal situations and preferences, only you can answer this question for yourself.  Whatever that monetary value or worth is, be sure that you are clear on it.  Lack of clarity can cause confusion, and often leads to professionals to accept side gigs that pay less than what their spare time is worth to them.

When Should You Not Start a Side Business?

Hopefully the answer is quite obvious at this point.  You shouldn’t start a side business if the return on time invested is lower than what’s acceptable to you.  I can appreciate that there are several other factors involved as well that may contribute to you taking up a lesser paying task in your free time such as a burning passion for an activity. 

For example, I am quite confident that FMF makes more per hour in the office than he does refereeing soccer games.  However, being out there on the field allows him to pursue his passion while spending time with his son.  The money is simply icing on the cake.

However, strictly speaking from a financial perspective, starting a side business makes sense if you project your business to earn you more money per work hour input compared to your career or job, therefore increasing your effective hourly wage rate.

Sure, you will still end up trading spare hours for dollars, but can you increase the dollars per hour significantly enough to compensate for lost free time?  Again, this is where the clarity of the value of your free time comes in to play.

If the answer is no, you might be better off spending your free time with family, friends and other activities that you derive pleasure from, unless of course you either desperately need the money, are bored or want to purposely indulge in activities knowing that it is a poor decision from a financial perspective.

Concluding Thoughts

Personally, it takes quite a bit for me to pursue a task that eats into my personal time.  I have done it sparingly on a selective basis, but the reason I have worked over the years to design systems and processes that work on auto pilot is so that I can increase my “personal time”.

I do realize that not everyone is in the position that I am in.  For numerous reasons, may successful working professionals start side businesses, and while I am a big advocate of doing so, many fail to calculate what their time is worth to them and therefore end up working for peanuts when compared to the alternative.

There are countless opportunities out there to make money, and some are better than others from a financial perspective.  A thorough evaluation of each opportunity is critical to ensure you are spending your time in a manner that provides the highest return on time invested.  Some factors to consider are scalability, investment capital, initial time requirement, ongoing time requirement, compliance requirements, cash out potential such as a sale, etc.

There are many blogs and websites, including mine, that constantly publish the top X business ideas, top side gigs, this, that and the other.  However, take a step back and evaluate your individual situation before diving into one.  Only you can answer what your spare time is worth to you.  Get clarity, pick wisely and don’t sell yourself short.

Ways to Earn More If You're a Chase Freedom User

I just received an email notice from a company I do business with of the following:

For 5 days only, Chase Freedom cardholders can earn 8% bonus cash back for every dollar spent when shopping at the following select merchants: Apple Online Store, Gap, Toys "R" Us, Barnes & Noble, Dick's Sporting Goods, Sears and Macy's.

This promotion is valid from November 26th (Black Friday) through November 30th (Cyber Monday).

I don't have any extra details, so you may want to call Chase (the number is usually on the back of the card) to validate this offer/get the details. If you have the card and plan to shop at any of the retailers above, it will be a great way to earn some extra cash back.

Good shopping to you all!!!

Time to Make a Credit Card Change

Last year I earned over $800 in cash back credit card rewards. That amount included some really big charges (like our new furnace) and some bonuses, so I don't think I'll be matching that number again this year (though I won't be far off.) I'll be sure to share the specifics of how I did sometime in January.

One thing that has hampered me a bit is that I've held on to my Blue Cash® from American Express card. I prefer a two-card, simple to execute strategy (versus a higher-rewarding though tougher to manage multi-card strategy). The "Schwab" Visa (in quotes since it's no longer associated with Schwab) 2% cash back card is my main credit card, and the Blue Cash Amex is my back-up. I keep it for three reasons:

• I need an Amex to shop/get gas at Costco
• I like having cards from different companies
• It's a decent cash back card -- it was my mainstay for years.

Overall, I thing the Blue Cash® from American Express card is one of the top cash back credit cards out there. But it works well only if you charge a ton (over $20k) on it each year. Since it's my backup, I don't charge anything like that on it -- I just use it for purchases at Costco. And for this only, it's not a great option.

A better choice for me is the TrueEarnings® Card from Costco and American Express. This card offers 3% back on gasoline and restaurants, 2% back on travel, and 1% back on everything else (including at Costco). And you don't need to spend $20,000 to get the benefit from it -- it starts working at $1. So I intend to get one of these and use it for gas, travel, and Costco purchases, then use my 2% Visa for everything else (plus they're currently giving a $25 statement credit for the first purchase made with the Card.) I figure that doing this will add an extra $25 to $50 in cash back every year -- which is nothing to sneeze at for buying stuff I'd purchase anyway. ;-)

How about you? Anyone out there using the Costco Amex card? What do you think about it?

More Thoughts on the Best Credit Cards

People keep leaving useful comments on my various cash back credit card posts and I want to be sure you all get the chance to see them. As such, I'm going to publish them here.

The first comes from my post titled The Best Cash Back Credit Card:

I just got a letter in my Blue Cash® from American Express statement and starting in December, you will be able to redeem your cash back as a statement credit any time you reach $25. You no longer need to wait to get the statement credit annually.

This is an improvement as for as I'm concerned and makes this card simply the best cash rebate card.

I agree that this is an improvement. I always hated to wait a full year to get my credit with that card. And while it's a great cash back credit card, it's not the best cash back card IMO. I think the 2% "Schwab" (in parentheses because it's no longer associated with Schwab) is -- though I don't know if they are taking new applicants (and the Amex is one of the best cash back cards (IMO) that's open to new applicants).

For those of you who do own the Schwab card, here's some good news from my post titled Schwab Visa Down for the Count?:

Since the switch, I've received two deposits to my checking account (not to my brokerage account anymore) for the full 2% on every FIA card purchase. Card still works the same way as before, only difference is you can't see the balance at schwab.com.

This is an improvement as well. Instead of having the rebate deposited in a Schwab account, it can now be sent to any account. I'm going to set up mine to go to my checking account (and close down my Schwab account.)

I'll be updating my thoughts on the best cash back credit cards in an upcoming post, but I'll give you a preview now: Blue Cash is one of them as is the Chase Freedom card (especially since it currently has a $100 bonus associated with it -- for details see Chase Freedom® Visa - $100 Bonus Cash Back or Chase Freedom® MasterCard - $100 Bonus Cash Back.)

Any other cash back credit card tips out there that we all should know about?

Digital Moonlighting: The Best Ways to Earn a Little Money Online

Note: This is a guest post by Chris Foley of SuretyBonds.com.

Taking advantage of the seemingly infinite possibilities of the internet is a great way to make some extra cash in your free time. Finding a starting point, however, can be intimidating. Here are some basic ideas for achieving your online financial potential.

For the Tech Savvy

• Design, Develop & Maintain Websites: Creating and establishing websites as a freelancer can be a quick and easy way for somebody with programming skills to make some extra cash on the side. Some companies look for professionals to simply come up with a viable concept that will best serve their audience. Others pay big bucks for the upfront design and set-up. A few might even offer you a contract for maintaining the site over time, although this might require more work and dedication than desired.
• Flip Websites: This option is especially viable for those who have a knack for spotting the next big trend. To succeed with this opportunity, it's best to keep up on emerging controversies, current events, and social commentaries. It's possible to for a seemingly inconsequential domain name that only cost $10 to be worth thousands after just a short time. However, don't be afraid to sit on domain names for awhile while waiting for a better offer. Flipping websites and domain names requires minimal effort if you don't feel the need to increase their net worth. Conversely, if you make the extra effort to provide viable content that attracts an audience, the site will be more valuable to potential buyers within the industry. Check out Flippa.com for examples of website flipping that are happening right now.
• Technical Support: Technology-based companies like cable providers, phone companies, and computer behemoths need individuals with a thorough understanding of technology to provide struggling customers with technical support via e-mail, chat, or other online services. Some companies allow support team members to work from home part-time. Such enterprises need professionals 24-hours-a-day, so tech support for even irregular hours is a sought-after commodity.

For the Wordsmith

• Become an Online Freelance Writer: Every significant professional website offers a substantial amount of information for potential consumers and clients. With the current boom of online marketing, professionals everywhere are looking for writers who have a knack for conveying complex concepts in simple terms, or turning potentially boring topics into must-read information. Writing for others can be rewarding for those who know how to turn a phrase. Bonus: writing content for websites allows you to become familiar with a wide array of new professions and subject matter.
• Start a Blog: Advertisers pay to be featured on blogs that offer quality content that is widely read. There are many options for setting up a blog and they range from user-friendly - set up a site on Blogger or Tumblr - to more advanced - purchasing a domain and web hosting and developing a custom blog using web software like WordPress. WIth the more custom approach you will have greater flexibility in setting up advertising through services such as the popular Google AdSense.The key to making money online is building an audience. The key to building an audience is to provide content is useful, informative or entertaining. There are ways to market and promote your site, but great content is your foundation. Great content virtually spreads itself - or, in tech-speak, it goes viral! Thus the maxim: content is king.
• Write for a Professional: Most successful professionals set up blogs, newsletters, or other publications to increase their marketability, but few have enough time to consistently produce valuable content. As a result, many professionals hire writers who have experience in the field. If you don't want to start your own blog, you can still leverage your expertise by writing for someone else. Writing for a professional usually allows for a great deal of freedom: as long as certain topics are covered writers typically determine the content, tone, and format of the text.

For the Entrepreneur

• Take a Marketing Class: Understanding the importance of marketing across the board can help you get ahead no matter your career. Check course lists of local universities and colleges to find one that would benefit your current career and fit your schedule. Knowing how to effectively market yourself online in your free time can increase your overall profits while at work. If you study marketing seriously you could potentially make money by offering other professionals marketing advice in the future. If you are a self-taught person, I would recommend checking out the blog and books of Seth Godin for more information on the future of marketing.
• Find a New Niche: What are your hobbies? These days there's a way to use the internet to make money off virtually any skill or interest. Photography can easily become profitable when correctly managed online. Collectors can sell their treasures for higher prices online because interested buyers across the world have access to collections and can (hopefully) start bidding wars.
• Sell Real Estate: Many successful real estate agents say they got into the field as an extra way to make cash on the side. After realizing their potential they turned it into a career. If you're wanting to turn a quick profit, you're going to have to give the property some serious attention. Making a good profit with real estate sales is directly correlated to time and effort put into the project (not to mention market fluctuations).

You might be wondering how exactly to find these opportunities. Never fear, after all, you have the internet at your fingertips. There are plenty of online resources available to unite freelance professionals with those seeking their services. Think online dating sites for professionals. With that in mind, remember to be upfront about your availability, commitment, and priorities when building a relationship with other professionals in your free time. Your digital moonlighting experience could just be a fling, or it might just grow into a long-term commitment.

Make Money Buying and Reselling Things You Know About!

The following is a guest post from FMF reader Nate Bredeweg.

I wanted to share some powerful insights with you today about how you can make serious money buying and reselling almost anything for an exceptional profit!  How in the world is that possible you ask?  It’s actually quite a simple transaction that takes a good bit of patience and practice to master.  Once you have learned how to do it, you can make some extra money to pay down debt, save, give or buy something else you really want!

What does it take?

I have been buying and reselling products for a profit nearly my whole life starting with candy bars in my neighborhood.  I learned that I could buy 5 Nestle Butterfingers® for a $1 at my local grocery store on sale and flip each for $.75 apiece to my neighbors who were more than willing to help a young entrepreneur out ;-)  One of the most important attributes you must possess in order to buy and resell a product for a great profit is a strong knowledge of what the product is worth (its market value).  Why does that matter so much? Because when you know what the product is worth, you know when it is being sold for less than it is worth.  Then you can buy it – and sell it for more (and in many cases MUCH MORE) than you paid for it.

Now I know some of you are thinking to yourself, “DUH Nate! I mean come on dude – everyone knows when something is being sold for less than it is worth”…  On the contrary my friend; in my experience, most people have no idea what 90% of what they buy is actually worth.  I mean they might know approximately what it is worth -- “it’s worth like $20, bro”.  So is it really worth $20?  Or is it worth $10 -- $15 or maybe even $30?  Let me give you an example to drive the point home:

You see the gorgeous compilation of high quality leather and classic design below?

 

I believe this might be called a purse or something to that affect (forgive my man mind)…

I can tell you with absolute certainty that if I came across this purse at a steep discount from its true value, it wouldn’t matter. I would have NO idea what it was worth.  Not a clue.  I know it is pretty, and most every female in my family would love to own it. If I had to make a guess – I would say it is worth $150 or something like that.  I actually just checked and this puppy sells for $6950. It is highly unlikely that I could ever buy this or any purse for that matter and resell it for a profit, because I don’t possess a strong knowledge of what it is worth.

I can hear even the purse fanatic saying, “Oh my gosh Nate – that is a horrible example.  Most people are not going to know what a purse like that is worth.  I don’t even know anyone that could afford that”. SHAME ON YOU!  Why don’t you know what it is worth?  I mean if I were you, I would make sure I knew what a purse like this is worth, so that when I came across one being sold by and ignorant man at an estate sale I could buy it for like $100 and make a profit equal to what you made working your entire first year in college…

So why don’t I become a price expert for high end purses, so when I come across a bargain I can make some good money?  I will tell you it is because I don’t have a passion for fashion!  You see, I don’t have the time or the interest to have a very intimate knowledge of what high end purses are worth.  Maybe you do? It is my (strongly held) opinion that many people have, or could readily develop, the knowledge and passion for a certain product that they could monetize (make money) through buying and reselling.

Show Me How It Works

I love fast cars.  My freshman year of college, I purchased a brand new Ford Mustang.  I paid WAY too much for it (cars do in fact go DOWN in value over time). However, after realizing how much I overpaid for the Mustang, I began learning how to determine what cars were worth so I wouldn’t get burned again in the future. I set out to learn the market value of various years, makes and models cars.  I spent significant time researching car values via the internet, books, magazines, and talking to mechanics and other car enthusiasts. 

At some point I realized that I had a very strong knowledge of what a given car was worth.  I could walk into parking lot and look at a given car and predict its market value with serious accuracy (which I would verify by running the KBB on it among other car valuation tools).  Note: I can’t fix a car (although I surround myself with qualified people who can).  I simply know how much they are worth.

I was reading the classifieds in the paper one day and saw a SUPER FAST 1989 Ford Mustang for sale.
 
I knew that if the car was in good shape it would be worth close to $1600 in my area of the country.  So I drove out and met the guy selling the car.  I negotiated the price, and bought the car for $900. My brother-in-law and I made a few small repairs ($200.00) and cleaned it up.  I had a blast driving it around town for a couple months and then I sold it for $1600 even.

I made a $500 profit simply because I was acutely aware that the car I came across was being sold for less than it was worth.

Sometime after that I bought an old model JMC Jimmy for $600 that was sitting in a neighbor’s yard with a for sale sign on it.

I knew that it was likely worth a couple hundred dollars more than the asking price.  Stephanie and I used it to haul trash to the dump and our gear to play tennis down the road from our house.  I sold it a couple months later within 24 hours, in exactly the same condition I found it, for $900.

Again – I made a $300 profit simply because I knew the product I was looking at was undervalued.

I also have a strong knowledge of how to price many consumer electronics.  I once bought a computer ($5) and LCD monitor ($25) at separate garage sales and resold them together for $300.

I found a fabulous Lexus LS400 (my current daily driver) for several THOUSAND dollars below market value from a car auction. I purchased this car with cash; much of which was from my profits buying and reselling undervalued cars, electronics, stereo equipment etc.

Maybe you have no interest in what a car is worth (well you should at least get a good deal on the one you plan on driving every day!).  However, you could become a price expert for ANY product that you have an interest or passion for.   I talked to a woman the other day that makes $15,000 a year (net) buying and reselling baby clothes online. 

On the extreme scale, I have a coworker who buys (cash) real estate and sells it for a profit after reconditioning and holding and the property for 1-2 years.   He only has a strong knowledge of the value of property within his city limits.  He doesn’t try to buy property in markets he doesn’t know or understand. 

A few final notes:

Once you have learned the market value of a product you wish to buy and resell, be patient and wait for the right opportunity.  You assuredly aren’t going to have deals jumping in your lap every day, but with a keen eye constantly on the lookout, an opportunity will come your way!

Have you ever bought or sold something for a profit?  Tell us the story!!!

Updates on Schwab 2% Visa

Here are a couple useful comments left recently on my post titled All Ok with "Schwab" Visa? First one:

Schwabbankcreditcard.com also works and redirects back to https://www.ibsnetaccess.com/ where you can log into your card account.

Click on "REWARDS" and you can change where your 2% goes to any checking or savings account.

In other words, you can have the rewards deposited into an account other than a Schwab account. This certainly appears to be good news.

The second comment:

My first 2% cash back deposit posted to my personal checking account today. I'm happy.

Yes, this is good news...

Stop Looking for a Job – Become an Entrepreneur

The following is a guest post by M.W Larsson from The Daily Middle. 

"All courses of action are risky, so prudence is not in avoiding danger (it's impossible), but calculating risk and acting decisively.  Make mistakes of ambition and not mistakes of sloth.  Develop the strength to do bold things, not the strength to suffer." - Niccolò Machiavelli

For better or for worse, modern life requires money. There is no way around that fact. Even if you wish to become a hermit, sooner or later, you will need some money.

For most of us, this means having a job. We can talk all we want about work as fulfillment, etc, but at its most basic, a “job” is a way to obtain income to live your life. You trade your time and skills for money. And looking at it in that basic sense begs the question, “if you are going to trade your time and skills for money, why not do so for yourself?”

But before we answer that question, let’s take a look at “jobs” and see why they are becoming less and less desirable.

In terms of economics, a “Good Job” should provide two things: enough income coming to live a comfortable life, and a sense of stability that the job will be there in the future (hence, giving workers enough confidence to take a loan to buy a home, etc.)  

However, something has happened in recent times that is undermining this equation – “jobs” that both provide enough money to live comfortably, and also carry the sense of stability that comes from knowing that job will always be there, are quickly disappearing. There are several reasons for this:

• Outsourcing – More and more, jobs and industries are being outsourced. Why pay top dollar when someone else will do the same job much cheaper? And why pay for a product made in the US when China can make it for one tenth the price? The council of foreign relations estimates 400,000 service jobs have been shipped overseas in the past decade, and more than 2 million manufacturing jobs have been lost in the past 20 years (and since companies are not required to keep this type of data, these numbers are from 2004 )
• Increased Competition – So, service and manufacturing jobs vanish…. But the workers remain. That means increased competition for any job.
• A “Faster” Pace in Everything – This may sound odd, but think about it – we now judge a company’s financial health not on a decade, or even a year, but on a quarterly basis. Business moves (and changes) rapidly today. One internet story, and a stock price plummets. There is no safe job anymore. Not even Government work.

So what’s the solution? Easy – take matters into your own hands and work for yourself.

If you break down a “job” into trading time and skill for money, and add in the fact that no employment is secure, the prospects of working for yourself become a lot less daunting. And ask yourself – who better to take care of you than… you?

In all honesty, we feel the key to survival and happiness is not to become a wage slave. Taking care of yourself by providing your own source of income is bold, to be sure, but also prudent, given the alternatives.

"‎The average man is a conformist, accepting miseries and disasters with the stoicism of a cow standing in the rain." - Colin Wilson

Some Work for Yourself Tips

There has never been a better (or easier) time to be your own boss and provide your own income. Many of the characteristics that work against jobs (outsourcing / the fast pace internet) actually can work for an entrepreneur.

The big key with working for yourself is to find a need and fill it. This isn’t an article to tell you “what” to do in this respect (there are four million books out there on starting a home based business). However, we can state that almost any job done at a desk can be done from a desk anywhere. Use your imagination.

Whatever business you choose to start, the key is to start a business with the following characteristics:

No Fixed Asset Requirements (i.e. renting office space/buying expensive equipment/hiring employees).

The ideal business is home based, maximizing fixed costs you're already paying (which can lead to tax deductions based on the square footage of that space used in your home.)

Area Served

The product or service you provide should be able to be marketed nationally, or better yet, internationally...starting a business with a product or service only marketed locally significantly limits your upside. This is the age of the internet – there is no good reason you can’t sell a service abroad.

Based in Economic Reality

The product or service must reflect the current and future economic realities of this country. And while we mentioned foreign outsourcing earlier, outsourcing means not just foreign workers, but independent contractors right here in the US (experts think more than 40% of all workers will be contingent-workers in the next ten years). Here are some statistics that may give you an idea of the economic future in this country (perhaps think twice about developing a business around luxury products as an example):

• The official National Debt has just surpassed $13 Trillion (not including the massive debts of Freddie Mac and Fannie Mae which are backed up by the Federal Government, estimated at $6.3 Trillion.)
• Our Unfunded Liabilities (Social Security/Medicaid/Medicare) are approximately $60 Trillion.
• Our National Debt is now growing 3 ½ times faster than decades ago.
• We are the world's largest debtor nation with a National Debt that is 14 times larger and 89% of GDP (not including Fannie/Freddie debts and unfunded liabilities.)

The point of the above is not to “scare” you into starting your own business, but to show you that if you just look at the cold hard facts, “taking care of yourself” is a very desirable goal. In fact, if you ask yourself the question of “how will I survive in the coming years?” entrepreneurship is the most logical conclusion one can reach. The simple truth is this: the economic numbers above do not bode well for those in “jobs”. Plan accordingly.  

There’s much more to the topic of entrepreneurship (and we’ll likely explore it deeper in the future). But we’d like to leave you with one final thought: In order to become successful, study success. Hey, this is America!  Within a few miles of almost everyone is a bookstore or library (yes, they do still exist!). There are hundreds of books on successful people, successful businesses and business practices, motivation and self improvement, and every “success” magazine you can think of (Entrepreneur/Inc./Fortune/etc), Audiobooks, DVD's, and everything else you’ll ever need in starting a business.

Take advantage of what’s out there, and take control of your future.

All Ok with "Schwab" Visa?

Here's a comment left by a reader on my post titled Schwab Visa Down for the Count?:

Just spoke on the phone with Schwab and FIA.

They are planning no change to benefits except that the new card will have no Schwab logo on it and you won't be able to see it on the Schwab website.

The replacement card will be a 2% cash rewards FIA card.

Credit line and APR remains the same.

There will continue to be no fees on international transactions.

Cash rewards will continue depositing into the Schwab brokerage account but you can switch to a non-Schwab account after the transition if you want.

I sure hope this is true. I guess time will tell...

Schwab Visa Down for the Count?

I've received numerous emails and comments on past posts about updates to the Schwab 2% Visa card. Readers have been getting letters saying that as of September 30 Schwab is no longer supporting the card and that FIA Card Services will be taking over theaccounts. The letter doesn't say anything specifically about the rewards, but the speculation is that the 2% reward will drop to 1% as FIA Card Services makes it a "basic" rewards card (and as I understand the card's structure, it's always been a 1% cash back card with Schwab kicking in the extra 1% -- now Schwab goes away and it just seems very likely that the card will be a 1% card.)

A few comments on this situation:

1. Many of you have asked if I've received my letter yet. No, I haven't. But I've been out of town a couple days and will have three days' mail waiting for me when I get back home tonight. Perhaps it's in there.

2. Thanks for the advance notice, Schwab. If the card really does change over on September 30, they've given us basically no time to make alternative plans. Nice customer service, huh?

3. I think Schwab's image will take a hit on this one. I had been a Schwab customer in the past and had moved away from them because their fees were way too high compared to alternatives (that may not be the case now, but I haven't checked lately.) I opened an account with them once I got the card, I liked it, and they were starting to win me back as a customer. If they kill the card, they've killed their chance with me for a loooooong time.

4. I still have the Amex Blue card as my back up, but it works best when you can load a ton of charges up on it over the course of a year. It won't do me much good at this point.

5. Auto payments, ugh. Schwab had just changed my account number (for some unknown reason -- perhaps to make the transition to FIA Card Services easier) so I recently contacted all the companies I have set up with automatic bill-pay to my card (to give them my new number.) Looks like I'll need to do that again (I'm assuming I'll need to get a new -- better -- card.)

And those get us to the big question: what's the new "best" cash back credit card? I put "best" in quotes because much of the answer depends on how an individual uses a card -- what he buys, where he buys it, how much he buys, etc. The answer is also dependent on whether you like a one-card strategy (like I do -- I don't want to carry a boatload of cards with me) or are willing to deal with multiple cards to give you the best total return (you will get a better return with more cards, but you also will have more hassle. And if you're managing cards with more than one person -- like I am, my wife uses them too -- communicating and executing a multi-card strategy can be difficult.) Let's assume for now that we're looking for the "best" option for a one-card strategy. What would you suggest as the card we all should consider?

This Money Making Idea is Going to the Dogs

Smart Spending lists five ways to make money from dog owners as follows:

• Pet sitter: $600 a week is quite possible for part-time work.
• Dog walker: According to Professional Dog Walkers, you can earn up to $3,600 a month.
• Pet groomer: Some groomers can make six figures a year, but it takes money to make that much because you have to invest in the equipment.
• Pet masseuse: You can make money, but it'll take not only money but time -- you need to be trained.
• Pooper scooper: Some members boast they make $100,000 a year for this unpleasant task.

IMO, there's a gold mine here. I'm trying to get my daughter to start developing "dog services" as a business (she loves animals) since I think she would do quite well with it.

Friends of ours regularly pay $40 per night to have their dog stay at a kennel (this piece quotes $15 to $35 a day). Even if you "only" charged $20 per day, you'd still earn a decent amount, save the owner a bundle, allow the pet to stay in its home, and save the owner the hassle of dropping off and picking up the pet at the kennel (which can cost an extra day's stay if the owners get home too late.) It's a big win for everyone!

Here's how it could work for us/others:

• We have a few hundred homes in our development. Many of them have dogs. It's a built-in market very close to our home.
• Let's say you could always have at least one dog being watched on average (sometimes you'd have none, sometimes you'd have several.) At $20 per day, this is $140 per week, $600 per month, and $7,300 per year. This would be a fortune for either of my kids!!!!
• The $20 would get the pet checked on, let out for a bathroom break three times a day, and fed. That's it.
• If the owner wanted other "services", they could be added on. For example, they could pay extra for a dog walk, to have their yard de-pooped (big money here -- if you're willing to do it), simple grooming/brushing, or extra checks/playtime with the pet.
• In addition, non-pet services could be offered to the owner while he was gone. Some options: mail/newspaper pick up, cleaning services, etc. -- anything that you could do easily because you're already at the house.
• Another option would be to charge more than $20 (say like $30) and include some services like one walk around the neighborhood and picking up mail as "free". Another option would be to have levels of services -- silver, gold, and platinum -- that the owner could select from.
• Any extra pets would be an additional charge. Cats, fish, birds, etc. Personally I wouldn't sit for dangerous pets like snakes, but you could do that if you were ok with it.

As you can see, this could add up quite nicely for a responsible young adult or a stay-at-home parent to bring in some side income. Of course it would take some time to build up your business, but once things got rocking, I think you could do quite well.

What do you think? Anyone out there doing this now? Or maybe you're a pet owner and you pay for services like these (either in-home or at a kennel). What do you pay for this sort of service?

$1 Gold Coin Update

It's been awhile since I gave you all an update on what I'm doing with gold $1 coins (if you want to see the last update, read Update on My Gold Coin Purchases). For those of you new to this issue, I'm talking about the $1 coins the US Mint is issuing in an attempt to replace the $1 bill. They are gold in color but are NOT made of gold (hence their value is $1 each.) For more on them, see this link. 

I'm still buying gold $1 coins in rolls of 25 (minimum box is $250.) They ship these to me free of charge. I charge them on my Visa and earn 2% cash back. I'll give you an update on how much I've ordered for sure when I do a credit card rewards summary in January, but as of now I've bought $6,500. Since I get 2% back on everything I charge, that means I've earned $130 in credit card rewards cash simply by buying these. :-)

My only commitment to the US Mint is that I do not simply take these coins and deposit them back in the back. I have to USE them (get them into circulation). As you might imagine, getting rid of $6,500 in coins is not an easy thing (especially when we spend most of our money via credit cards -- which we pay off every month BTW.) But here's what I've done so far to get rid of a good number of coins:

• I gave a bundle of them to our church as part of my annual giving. Since they are cash, I took them into the office and waited while they were counted. Then I got a receipt for them so I could be sure and get the appropriate tax deduction.

• We're still giving out blessing boxes. These continue to be great fun and a unique way to give people a gift.

• In addition to blessing boxes (that are for those in need), we give gold $1 coins for birthdays, showers, wedding presents, etc. We put them in some sort of a unique box or container that is a gift as well (it can be reused for something.) This is a nice way to give cash without being so boring by giving "plain old" paper money (and people really seem to love the gold coins.)

• Toll booths are a great way to use these coins.

• "Small purchases." I keep some of these in my car so when we stop for fast food, a quick drink somewhere, or even a movie (I give everyone their own coins to carry so I'm not walking in jingle jangling like someone who just robbed a bank) the coins are handy to use.

• I am keeping an emergency stash of coins in my house. I figure if there's some sort of disaster (like a fire or flood), the coins won't burn/be destroyed and will give us some quick cash we might need.

• The coins are GREAT for tips. I usually leave two or three per night I'm in a hotel. I never get to see the response of those receiving the coins, but I bet they appreciate them.

Anyone else out there doing the same thing? How to you use the coins? Or if you have some suggestions on how I can use them, please give me your thoughts in the comments below.

P.S. Here's a research report of the US Mint's test market results for the gold coins. Anyone else find it interesting that Grand Rapids' results are better on almost every measure? Can I get a thank you from the US Mint, now? ;-)

Three Myths About Earning More Money

The following is a guest post by Ramit Sethi, founder of I Will Teach You To Be Rich and a new course on earning more money. Ramit is a personal finance blogger and author of the NYT bestseller I Will Teach You To Be Rich. For a free mini-course on how to start your own side business, visit Earn1K.com.

Whenever a friend tells me they wish they could earn more money, I'll ask what's stopping them from doing it right now. The resulting conversation usually goes something like this:

"I can't," they say, "I have a job."

"Okay," I say, "so start it in on the side."

"But I don't have enough time."

"How much time can you spare each week?"

"Maybe only 10 hours."

"Perfect, that's plenty. Do some brainstorming and come up with next steps - I'll check in on your progress in two weeks."

"But... but... it's just not that simple! Waa..."

But be honest with yourself: Think about something you've gotten good at by sustained practice. Let's say you've lost 20lbs in the last 12 months. What would you say to yourself from a year ago? "It's really as simple as eating less and exercising more."

That doesn't mean it's EASY, though. It's HARD to try new things and to admit what you don't know. It's a lot easier to make excuses, procrastinate, and dream about how things will be different some day. Unfortunately, most people take the easy route, and that's why they'll never start the businesses they keep talking about.

FMF readers might remember that I posted a guest post here last year called "Trying to earn more money? Stop wasting your time."

If you want to be different and really start earning more money, you'll need to be able to identify and overcome three big myths of entrepreneurship:

Myth #1. "I need a lot of money to start a business."

I call this the myth of resources, where people claim they'd start a business if only they had more time, money, experience, or contacts. In fact, there are LOTS of ways to start a business on just a shoestring budget and a few hours a week, especially if you focus on providing a service (like consulting, tutoring, or dog-walking) instead of selling a product.

The simplest way is to directly email a person you'd like to work for and offer them your services. Every one of you reading can try that today, and it would take you ten minutes, zero dollars and no website.

(In fact, I pay someone on my staff over $10,000/month and he has no website or significantly social media presence. He's a highly valued consultant who simply solves my problems.)

Of course, there are some businesses that do require lots of time and money to start. But even if this type of business is your ultimate goal, you need some sort of plan to get there. I'm strongly in favor of starting any business you can with the resources available to you, and using your first business as a launching pad for your next.

Myth #2. "I don't think I'm a big enough risk taker to do it."

This is the myth of type. Wishful entrepreneurs often have a habit of convincing themselves that they're just not cut out to do business. Maybe they're just too risk-averse, or they don't like promoting themselves. Or maybe they weren't born smart or creative enough. In fact, if you say this, you've just selected yourself out of the pool!

Our own popular culture is partly to blame for perpetuating this myth. We always hear stories about entrepreneurs who risked everything and ended up with billions, and never about the ones quietly running safe, "boring" businesses.

Don't fall for that. For every supposed must-have entrepreneurial personality trait, I could find you plenty of success stories of someone who's the exact opposite. In fact, one of my program members who teaches violin told me she was afraid of being "financially illiterate" and would be my "worst student ever," but she ended up making $80,000 in 8 weeks (for the free in-depth case study, visit Earn1K.com).

You don't have to have been born an entrepreneur to start thinking entrepreneurially.

Myth #3. "I just can't think of any lucrative ideas to go after right now!"

This is the myth of opportunity. You've all seen this phenomenon - it's the crazy uncle living in the attic, still working on patenting his million-dollar invention. Or the guy who says he'll do it when the economic conditions are perfect, or when he finds the perfect mentor or business partner.

Of course, the timing is never right. The perfect mentor or business partner doesn't really exist, and of course, great ideas are vastly overrated. What you end up with here is a really bad case of procrastination - and not much more.

The truth is, there are opportunities all around you. There are people starting businesses every day. EVERYBODY has skills and the ability to learn something new. And it's always a great time to make money. So what's holding you back?

So what's the biggest barrier?

In my research, the biggest barrier is finding the right idea. People often think their idea has to be unique ("I can't just be another freelancer writer / IT consultant"), when in reality, the more competition you have, the better. Others think the idea has to come from within, when really, nobody cares about your initial idea -- almost everyone should be looking to the market to see how you could combine your idea with what people will pay for. If it helps, I've put together a free Idea Generator Tool that will show you how to identify and test a profitable idea.

When you start earning money, you'll find the myths that held you back will slowly melt away. This is true of losing weight, improving your career, managing your time, and...earning money.

NOTE FROM FMF: The post Ramit wrote for FMF last year on not wasting time was a big hit. Lately he's been talking about earning money and he knows his stuff. So if you're interested, I encourage you to check out his free preview course on earning money. And no, I wasn't paid for this post or for recommending his program. ;-)

Debit or Credit: Which Card to Use?

Consumer Reports notes that 52% of all payment-card transactions will be on debit cards in 2010 -- and they expect the trend towards more use of debit cards to continue. But they note (kinda) that there are times we should use debit cards and times when we should use credit cards. Here's how they break the two down.

Use a credit card:

• For big purchases. Credit cards allow you to withhold payment if something goes wrong with your purchase, and the card issuer often investigates the problem for you. Some credit cards add up to a year to the manufacturer's warranty on the products you buy with them. You may also get additional protections against fraud, damage, identity theft, or plain old theft.
• For gas, hotels, and car rentals. Some hotels, gas stations, restaurants, auto rental companies, and retailers put a hold on the money in your checking account until a debit transaction is processed, which might take up to several days for signature-based payments. What's more, the amount that's blocked can significantly exceed the amount of your purchase. These holds can prevent you from accessing the funds in your bank account and result in bounced checks, declined transactions, or overdraft charges.

• To earn rewards. Fewer debit cards have rewards programs, and the programs of the ones that do aren't as good as those of credit cards.

When safety is paramount. Under federal law, your liability for fraudulent charges on a debit card can be greater than it is for a credit card. You're responsible for up to $50 in unauthorized purchases on your credit cards. But with a debit card, you can lose up to $500 if you don't report the theft or loss of your card or PIN within two business days of discovering the problem.

Use a debit card:

• For budgeting. You may be inclined to spend less using debit, since you generally know how much money you have in your bank account.

Ok, so much for the benefits of using a debit card. If you can't keep a handle on spending, use a debit card. Otherwise credit cards are always better. Is that what they are saying?

Personally, I prefer credit cards, especially for the rewards. I'm going to rack up a boatload of extra cash this year by using my 2% Schwab Visa on things I would have paid for by check or cash -- so why not get the extra 2%? I'll give you the final details at the end of the year, but I'm  guessing it will be $600 or so by the time the year is over. I'll take it!

How Much I Made This Spring Refereeing Soccer

Last fall I noted that my son and I had started refereeing soccer games as an added source of income. This post will give you an update on how we progressed in this effort since then.

Between the fall and spring soccer seasons, there was one major event that took place. I went to a class and passed the test to become a Level 8 US Soccer Federation referee. I know this doesn't mean anything to most of you, but the summary is that with this level of certification I was now able to be a center referee at our paid games -- which generally pays twice as much or more than what assistant referees (ARs, aka linesmen) are paid. BTW, my son wasn't able to take the class/test because he's not old enough. So he remained a Level 9 referee and was still able to be an AR for paid games.

This year's money-making effort was complicated by the fact that my son decided to PLAY soccer this season as well as referee. And he played not just for one team but for two of them. Since 95% of soccer games in our area are on Saturdays, this meant that much of the time that could have been spent making money was instead allocated to playing/watching soccer. That was a trade-off I was happy to make, but it certainly did impact our earning results. (BTW, I did referee several of his games -- they were AYSO/non-paid games -- and was about 10-yards away from him when he scored his first goal of the year. Priceless!)

Anyway, here are our results (for both of us combined):

• Number of games: 13
• Amount earned: $440
• Amount earned per game: $33.85

And for comparison, here are last fall's results:

• Number of games: 19
• Amount earned: $465
• Amount earned per game: $24.47

And a few other pieces of information:

• Non-paid/volunteer/community/AYSO games refereed this spring: 17 (including 7 at a year-end tournament)
• Costs incurred (equipment, classes, etc.): $80
• Mileage incurred: 265
• In addition to the pay above, we received $60 in Applebee's gift cards and some free referee equipment (not to mention all the food we could eat from the snack bar) for working a tournament at the end of the year.

A few comments given this information:

• We only did 13 games this season but we made much more per game (due to the fact that I center reffed many games as well as the fact that we reffed higher-level -- thus better paying -- games this season). Thus we ended up making almost as much in absolute dollars.
• When you look at the expenses (and assume a cost of $0.50 per mile), you'll see that we made very little, roughly $230. On a per hour basis, this pay is really low.
• My son, who pays none of the costs and to whom $220 is a lot of money, LOVES this deal. He's rich! Me, not so much.
• We do have fun at it, get some exercise, and enjoy being together doing something we both like. So what I think we have more than anything else is a hobby that just happens to pay us a bit of money.
• If we wanted, we could make a lot more. My son could quit playing and we could stop doing volunteer games. This would give us more time to ref paid games and likely make $75 or more every weekend. Then we could add tournaments to the mix and really clear some "big bucks" (relatively speaking.) But we enjoy my son playing as well as helping the community AYSO league by volunteering, so we're not likely to do this. But if I ever found myself out of a job, I could ramp up refereeing and make a decent supplemental income. I have one friend who does this. His hours at work were cut, so he added more refereeing, including high school games, to make up the difference.
• We have all of our equipment as well as our certifications through 2010, so this fall the only regular expenses we'll have will be mileage. I'm sure we'll ref 13 games or so again and should have lower expenses than this spring.

I'll give you all a performance update at the end of the fall season this year. Stay tuned.

Would You Waste a Year of Your Life for $100k?

Here's a story of a man who has agreed to try and live on coupons only (no cash) for a year. If he does, the coupon site Groupon will award him $100k. The details on the rules of the contest:

Groupon's contest requires the participant to abandon his job, leave his apartment and put his belongings in storage. He's only allowed "limited" visits with his close friends and girlfriend during his yearlong adventure. The company pays for a one-year hotel stay and provides an unlimited number of free coupons. The discounts, also called "Groupons," are typically for fun activities and restaurants, so the challenge is to find ways to cover practical costs, such as clothing and toiletries.

This sounds like a nightmare to me. This guy is giving up his life for a year (he can only see his friends and girlfriend only once in awhile) to live off coupons (which won't be easy or fun) for the chance to win $100k. Nope, not me. I'd pass on this one in a second. In fact, I think I would be more likely to change my name and get a tattoo. :-)

How about you? Would you take this challenge for the chance to earn/win $100,000?

A Budgeting Guide For The Burgeoning Entrepreneur

The following is a guest post from Financial Planning Tips.

About five months ago, some events transpired in my personal life that set the small flame of entrepreneurship - that I’ve had inside for years - into a raging fire.  My longstanding desire to get out of the corporate game and work for myself in some capacity has finally been set in motion after years of fears and doubts.  Given that I’ve worked a day job for most of my life, I knew that my mindset around my finances and budgeting - or lack thereof - had to shift completely.  I still am working my day job and moonlighting on nights and weekends, while I begin to make money in the world of blogging and online business.  I’m quickly seeing the fruits of my labors beginning to pay off, while concurrently locking down my finances to ensure success in the long term.

A Complete Shift In Financial Mindset

A seemingly small but important shift had to occur in my mind. As a worker, I’ve primarily been concerned with either saving or spending money for personal use.  As an entrepreneur, I’m now far more concerned with having capital that I can use to grow my business, and to actively generate cash flow every month.   When I think of spending money now, it’s on tools and resources to make more money for the business.  I’ll spend on something if it’s going to make me money, otherwise I guard my cash stash.  I also resist personal spending more than ever before.

From Carefree Spender To Budget Master

Not that you have to be poor by any means, but when starting out on the entrepreneurial path, I believe you must take a good, hard look at where you spend money, especially in terms of what you actually need to make you happiest in life.  Then you can ask “what are my monthly income goals for my business and dream lifestyle as an entreprenuer?”  Every last precious dollar that you save will be going into your business - you can count on that.

For three months I tracked all of my expenses, right down to the can opener I bought for $2.97 at the local drug store, when my old one broke. As a single working-class male in New York City, my expenses came to around $4000 per month – and I don’t spend my money unreasonably in any way, just perhaps a bit loosely. I definitely have friends that spend loads more.

After taking a look and deciding where to trim the fat, I was able to quickly crank my spending down to around roughly $2600/month.

Six Easy Areas To Reduce My Entrepreneurial Budget

Here’s what I did to cut my monthly budget by almost $1400/month in one-fell swoop:

• Entertainment: Cut out almost all entertainment expenses –meals out with friends, karaoke, drinks out and at home. This was not hard to do as I spend most of my time working now. Money saved: ~$350/month
• Housing: Going back from living alone to back to living with a roommate to cut rent by ~$600/month. If you own an apartment or home, this is a great place to consider renting out a room or two to cut back on monthly mortgage payments.
• Subscriptions: Cutting out non-essential subscriptions/memberships that I won’t have time to participate in or read. This also help keep down distractions when working from home, to increase business revenues. Money saved: ~$100/month.
• Over-Indulgent Luxuries: Dropping expensive little luxuries like Starbuck’s, dark chocolate bars. Also junky luxuries like late-night Doritos or gummy worm binges. I’ve noticed this is a double-whammy, as many consumer expenses also tend to be unhealthy – so you gain health benefits here as well.

I found this is really an easy thing to do.  Just ask yourself “what do I enjoy the most?” and order your list accordingly. Pick your top 3 things and cut out all the rest.  It’s most likely that as you go down the chain of your luxuries, so does your percentage of enjoyment in them.  I would also throw clothes/fashion into this category – though I’m not a big spender on clothing, and haven’t bought any clothes in many months.  You might even find you don’t need any of these luxury items for your happiness.  Money saved: ~$100/month.

• Cell phone: Plan dropped to minimum monthly minutes, but with unlimited text option. I’ve started using Skype regularly to talk with business associates, friends and family for free. I use text messaging for most all communication needed via cell phone. Money saved: ~$40/month
• Eating Out: Buying cheap, bulk food to make at home, replacing most meals that I used to eat out - that weren’t entertainment based. Once I began to see what I ate, and also how much nutritional value, how filling the meal was, etc, it was very easy to cut food expenses. This country sells an inordinate amount of junk food; most of it is worthless nutritionally and thus monetarily. Since I’m spending loads of time at home working, I’m also becoming a rather handy cook. Money saved: ~$200/month.

A Few Extra Tips

• If you are going to buy a tool or resource to grow your business, make sure you really need it. It’s easy to get caught up in all the gadgets and promo ideas other entrepreneurs sell to entrepreneurs. We don’t want these expenses replacing our Starbuck’s lattes for no reason. Although if you think it could benefit you in growing your business in any way, get it. Just don’t fall into the craze of buying a bunch of tools you won’t use, or playing around with them and you don’t get any work done.
• Get a free or low-fee rewards credit card and pay for both personal and business expenses on it. Since you’ll be spending plenty of money along the way for your new business, why not reap the rewards?
• Selling off old clothes you no longer wear, and household items you no longer use on eBay or Craigslist. It’s more seed money to use for growing the new business. Especially if you’re on the path of the “digital nomad” like I am, where traveling is a big part of the future, it pays to reduce one’s belongings. Heck, it just pays in general to have less stuff.

So that wraps up the budgeting guide. I find that becoming an entrepreneur really is an exciting mixture of fun, fright and worthwhile challenge.  Every day is a new adventure and I can’t believe how far I’ve come in only a few months time.  Can’t wait to see where it all leads.  Until then, remember to use budgeting as a tool to bring your entrepreneurial dreams to life!

How to Make Money Online

I read a few blogs on "how to make money online" (I don't take much of their advice since I'm not really trying to make money on this blog, but I do like to keep up-to-speed with the latest tips and trends.) Out of all the big name "make money online" bloggers, the one I like best is John Chow. To me he has the right combination of experience, common sense, practicality, craftiness, humor, perspective, and attitude that make his blog great reading. And since he makes $40,000 a month from his blog, he knows what he's talking about.

Well, he's now written a book titled Make Money Online: Roadmap of a Dot Com Mogul and I wanted to let you know what I thought about it.

A good part of the book is information you can find online. In fact, it's not much different than what I detailed in the series How to Get Your Blog to 100,000 Visitors and Beyond. That said, John adds much more detail and some GREAT tips (I wrote down several that I could use here at FMF) so that even an advanced blogger can learn something. In addition, he adds fascinating stories that make the book entertaining and especially interesting if you read his blog (it's always cool to get extra insight into how someone "made it.") In fact, this was the best part for me -- reading another biography of a successful person that shows that most wealthy people weren't handed their wealth -- they earned it.

I also really liked John's success formula (listed at the end of the book) that summarizes his steps for making money with a blog. The five things he lists include (along with my one-sentence summary for each):

1. Quality content - write great stuff people want to read
2. Marketing skills - get the word out about it
3. Dedication - stick with it and don't give up
4. Adaptability - change as need be to be successful
5. Maximizing revenue - take advantage of all opportunities and try new things

There, that's simple, isn't it? ;-)

Seriously, it all really does boil down to those five things. Do them well and you WILL make money blogging.

Finally, one other thing I admire about John is that he's a giving person. Every once in awhile his blog has some sort of charity challenge like "you donate $1 to this and I'll match it." His book ends in the same spirit of giving and features a chance to give to John's local Habitat for Humanity branch (BTW, I support Habitat as well.) Good for him!

Overall, I'd say it's a solid book for those who know little about blogging and for those who read John's blog (80k subscribers) and want to know more about him. Check it out at your local library or, if you want to use it as a guidebook to develop your own blog, buy a copy and mark up all the great ideas in it.

Anyone out there read this book? What do you think of it?

How I Transformed My $45,000 Income into a Six-Figure Income

The following is a guest post written by FMF reader Nate. He left a comment on a recent post saying an FMF piece had encouraged him to start working on growing his career/income. He said he was on the verge of making a six-figure income (from $45k) after only a few months of putting my advice into action. I asked him to write a guest post and he agreed.

The FMF article, Five Steps to Six Figures in Seven Years stirred up a burning desire from within me to increase my income.  This article pushed me to set some pretty unrealistic (or so I thought) goals!

I have always been attracted to the idea of Financial Independence (Financial Peace).  I wanted the ability to provide a good life for my future family and help others around me in a very intentional way. I wanted the ability to quit my job… or lose my job… or create my own job, without worrying how I would pay the bills next month.  I discovered that the only tried and true method to accomplish this was to increase my income as rapidly as possible and not give all of that income away to expenses. In other words: live below my means.

At 24 years of age I decided I wanted to transform my $45,000 a year income into a 6 figure income by the time I turned 30.   I looked at the FMF article and started checking off the 5 steps required to attain a 6 figure income:

Step one: Get a high-earning degree from a good school

I had earned several bachelor’s degrees in IT and business (real estate finance and entrepreneurship) from the University of South Carolina.  Check!

Step two: Work for a name-brand employer at your first job

I worked for a large name-brand insurance company for 2 years straight out of college.  Check!

Step three: Perform

I was performing like a super star! NO I WASN’T! I actually was simply doing a good job. I was coming in at 8:30AM and staying until 4:30PM, Monday-Friday; doing everything that was asked of me in-between. 

I considered myself indispensible simply because I was good at what I was doing – and both my employer and I knew that they were getting my labor for a discounted rate.

So… half-check!

Step four: Manage your career aggressively

I wasn’t doing this as well as I thought I was at the time… Looking back on the situation, I was passively maintaining my career.

Step five: Have some luck

I have never believed in luck as people perceive it to be.  I knew that luck was when relentless preparation and skills meets the right opportunity.  I just wasn’t preparing nor positioning myself to snatch the right opportunity. At least not for a 6 FIGURE opportunity…

No check

Turning things around

I had some work to do!  I desperately needed to work on steps 3, 4 and 5 if I had a fighting chance of reaching my goal. I decided I needed to open a new business...  A great business that would give me 6 figure income potential.  I just couldn’t decide what kind of business I wanted to run. I realized I needed to start selling myself (not in a creepy way)!

Me Inc. was in business. I only needed one client who was willing to purchase my product (i.e. my employer, or possibly another employer).

A snapshot of the kinds of things I have done over the past year in pursuit of a 6 figure income:

• I married a fantastic woman (shout out to my Stephy poo!) who has supported me and pushed me to do whatever I felt necessary to win for our family.

• I began reading lots of books on leadership, teamwork, influence, career building etc.

• I actively managed my online presence (Facebook etc.). Because we all know employers look at your online presence now – it doesn’t matter if you think you are only sharing information with friends and family. My new employer aggressively vetted my online identity.

• We (my wife and I) learned how to manage money like our lives depended on it (frugal, saving, investing etc.). We built up a 6 month emergency fund (on my $45,000 income). This actually gave me the confidence to begin taking chances at work – and ultimately switch jobs (paying for all the moving expenses with cash).

• I built a credit score of over 800 – very important for any possible future job switches.

• I learned how to write a fantastic resume.

• I took on VERY high profile projects that I would have historically just casually participated in or taken orders from someone else. I worked extremely hard to exceed every deadline/responsibility I was given. I made my company tons of money in very visible ways. I also worked to save them as much money as possible. A big win here was assisting my company win a multi-million dollar contract with our largest client, with whom I had developed an outstanding relationship. I kept records of the contributions I was making (even if it was on a scratch piece of paper I threw in the office after working really late).

• I invested in relationships with people (a lot!!!). I began connecting with people in dynamic and substantial ways. They started trusting me. They started listening to me. They started reporting to me. I started networking very, very aggressively. I wasn’t simply trying to suck resources and favors out of other people. On the contrary, I focused on injecting as much value into my relationships with friends, family, co-workers and professional acquaintances as possible. I became obsessed with creating win-win situations. One of my major successes in the relationships department was befriending a VP (and later the Sr. VP) of the company I now work for.

Reaching the goal!

Nearly a year has gone by since I started outperforming at work, managing my career aggressively and preparing for the right opportunity (luck) that would lead me to a 6-figure income before I turned 30.

Two months ago I was pursued by a VP from a small/midsized IT company that had been paying attention to the valuable work I had been diligently producing for the large insurance company I had been working for.  They made me an offer for close to 6 figures with a sizable end of year bonus.  We also make about $12,000 a year in income from our rental property.

I should also mention that I make a decent side income (couple thousand dollars a year) buying things from garage sales, auctions, estate sales, friends, family and strangers and reselling them.  My wife and I go out and look for deals as a hobby.  I almost exclusively look for items that have an immediate ROI (I just purchased a computer for $5 and resold the next day for $225.00).  My wife on the other hand looks for clothes, accessories, jewelry, books, appliances and decorations etc.  She saves us tons of money by making these purchases tax free for pennies on the dollar as opposed to purchasing items at full retail.

Armed with my new salary + end of year bonus + rental income + resale of assets purchased at a discount, we are on track to making well over 6 figures this year.

WOOHOOOOO!!!!!!!!!  Live like no one else so that later you get to LIVEEEEEEE like no one else!!!!!!!!!

A Rich Guy Tells How to Become Rich

When you want to get rich (or at least become well-off financially), doesn't it make sense to listen to someone who's there now? I think so. So it's probably worth at least a bit of time to stop and listen what billionaire Mark Cuban has to say about how to get rich, isn't it? Yep, I think so.

Now he admits that there are many paths to wealth and he offers one. In addition, it's find-your-own-business in nature and may not be for everyone. The basics are 1) get money, 2) get educated, and 3) hit the right opportunity. Let's start with how he suggests we all get money:

So what should you do to get rich? Save your money. Save as much money as you possibly can. Every penny you can. Instead of coffee, drink water. Instead of going to McDonalds, eat Mac and Cheese. Cut up your credit cards. If you use a credit card, you don't want to be rich.

If you can, you will quickly find that the greatest rate of return you will earn is on your own personal spending. Being a smart shopper is the first step to getting rich. Yeah you have to give things up and that doesn’t work for everyone, particularly if you have a family. That is reality. But whatever you can save, save it.

Hmmmm. This sounds really, really familiar. I wonder where I've heard it before. ;-)

Now let's move on to getting educated:

The 2nd rule for getting rich is getting smart. Investing your time in yourself and becoming knowledgeable about the business of something you really love to do.

Before or after work and on weekends, every single day, read everything there is to read about the business. Go to trade shows, read the trade magazines, spend a lot of time talking to the people you do business with about their business and the people they buy from.

This is not a short term project. We aren’t talking days. We aren’t talking months. We are talking years. Lots of years and maybe decades. I didn’t say this was a get rich quick scheme. This is a get rich path.

If buying/building your own business is the path to wealth you want to take, then I agree 100% with his advice. If not, you can still invest and become educated in a way that will profit you. I call it making the most of your most valuable financial asset.

Cuban continues:

Now you wait for times of uncertainty and change in your business. The time will come. It may  come quickly, it may take years and years. But it will come. The nature of our country’s business infrastructure  is that it is destined to be boom and bust. Booms are when the smart people sell. Busts are when rich people started on their path to wealth.

You will know when that time is here for you because you will know your business inside and out. You will be ready because you will have been saving up for this moment in time.

Again, it's pretty grow-a-business focused. But you can do the same thing with a career. There will be times of opportunity that appear over the course of a career. If you seize and make the most of them, you can rise quickly in both responsibility and pay. Look for those times of change to make your move and jump on the opportunities when you think you can make a difference. If you deliver, chances are you will be well-rewarded for it (because you will deserve it).

Making Money Taking Surveys: Worth It or Not?

Here's a piece from Smart Spending about earning extra income taking surveys. Their summary of the potential money-making opportunity it provides:

You can't retire on this kind of income. Some sites offer low payback relative to the time involved. And yes, some are outright scams.

Pick your spots, though, and you can earn anywhere from $50 to $250 a month for "work" that can be done while you watch your kids play in the yard. Because some surveys are about new products, you might also score free shampoo or toilet paper.

No, it's not a fortune. But it's one more way to build an emergency fund out of thin air, save for the holidays, pay down debt or cover extras like Little League fees or an occasional date night.

I guess this may be worth it if you're just starting to build your financial empire, but the time/reward ratio doesn't work for me. It seems like it's a lot of time and effort for not much reward.

Anyone out there with experience getting paid to take surveys? How do you like it? How much do you earn? Is it worth the time you put into it? Why or why not?

If Shopping is Your Passion, then Get Another Hobby

The following is an excerpt from In The Trenches: Financial Survival During Times of Hardship. One suggestion to add to what's below: you may want to turn your hobby from an expense into an income producer.

There’s one thing we can agree on. Shopping costs money. Even if you go out with the best of intentions, a list, and a maximum limit it is oh so easy to spend more. As you bring home all your treasures and put them away the sense of accomplishment almost out shouts the small feeling that you spent more than you should have.

I for one am not much of a shopper but every few years I can go out and spend thousands. I guess I save up my shopping tendency and have occasional blowouts where I lose it and buy all the things I have thought of for the last 10 years.

Even though I am not a regular shopper I have known many people who are and these are my conclusions after many years of observation. Maybe you will see yourself and having once done so you can develop a plan for cutting down.

• Shopping is a social event. Malls are one of the few places that still welcome children and they don’t even have to behave well. As long as they think that you might spend money they invite you to come on in. Friends are also welcome. Just make a phone call and your best friend can join you for an evening of fun. And best of all, you can get all dressed up or come as you are.

• Regain your power. This sounds strange but I have seen it often. A break up with a boyfriend. A job lay-off. Even the rumor of a lay-off. All of these things make a person feel like they have lost some of the power over their lives. It causes a person to realize that despite all that we hear about taking charge of our lives there are some things outside of our control and the people who have control don’t always treat us the way we want or deserve to be treated. But since we cannot always change these events we shop to take charge of our lives and soothe our bruised or broken ego. Sometimes this is okay. A new haircut, a workout program at the gym, a new wardrobe, all of these things are good for us and maybe we should have done it long ago. But we can’t ignore the financial impact it has, especially if we pull out the charge card to do it. If we do come home and haven’t spent anything we can still pat ourselves on the back because we have held on to our money and we can tell ourselves that we exercised self-discipline.

• Compensate for our inability to achieve the other things. When we feel like or know that we can’t afford the more expensive things we need or want we try to compensate by finding something we like and get that instead to try and cover our feelings of hopelessness. An extreme example is those who live in deplorable housing conditions but have a beautiful new car. They feel they can’t afford to make a $1,500 month house payment but they can pay a $500 per month car payment. They drive the car proudly to show to themselves and the world that they are somebody. But that is the extreme. Maybe you can’t relate. How about when you can’t afford the house of your dreams so you lavish your apartment with dynamite furnishings? Getting closer? Or, how about the bills are too high so you go to a restaurant or the grocery store and find the best steak you can’t really afford? This last example is probably the most common because it is so easy to rationalize. But the more often you indulge this feeling the farther you will be from your long-term goals. Why is it indulgent? Because it is a substitute for your bigger goals and is out of balance with your overall financial situation.

• Boredom. Shopping provides some instant gratification and is a lot easier than sitting home every Friday night.

• Laziness. Sounds terrible and if this is you you’ll be tempted to say it’s not. But maybe after consideration you can name someone who falls in this category. Shopping really doesn’t require much creativity. The stores have worked hard to coordinate all the clothing, linens, and even the make-up. But the trick is that it is set up so that we feel creative as we pick up all the items and put them together. Another form of laziness is that most people I know that are avid shoppers don’t have any or few other interests that they pursue. Whether it is calligraphy, reading, sewing, or scuba diving, all of these things take effort and time to study and become good at. Shopping is easy. All you have to do is look, pick, and pull out your wallet.

• Creativity. I know that I said that little creativity is involved but by the same token it can be extremely creative to shop 100 stores just to find the exact right piece of furniture to go in that empty corner of the living room. So it is just as valid to say that people use shopping to explore and fulfill their creativity.

• To relieve tension. There are times when shopping can be a mental and emotional release from the problems and day to day routines we all have. A time to just look around. To remember our dreams and goals. A time to make some new goals and figure out what we will do with that awful kitchen. Even if our dream kitchen never comes to reality it was good just to have dreamed it and refreshes us to go back home to do the dishes.

These are the biggest reasons I have observed why people shop. None of them are bad. But in order to reach our financial goals we have to look at how we spend our money and decide if we are maximizing our assets, time, and resources.

If we want to cut down our spending or maximize our dollars we have to see why we are shopping and try to fulfill those emotional needs within our budget. But why now refer to them as emotional needs? Didn’t you notice how often I used the word “feel” when referring to why we shop. The word feel indicates that it is our emotions and not our actual physical needs or logic that drive us to the mall. That is why so often we have things that we hardly use, don’t need, and wonder why we bought it in the first place. The bright pink blouse that matches nothing – we needed to feel cheerful. The black dress we have worn twice? We may have felt bad and the dress expressed our feelings at the time. Or the jazzy party dress? We wish we went out more. These are just speculations but it is easy to see how we can buy things to express how we feel, compensate for how we feel, or show how we want to feel or who we wish we were. I have a pair of new ballet shoes that I bought, took one lesson, but can’t seem to get rid of because it would be really cool to be a ballerina. Go ahead and laugh then check your own closets and see what strange and wonderful things you have hidden away.

The reasons people are passionate about shopping are many. But there is one solution that applies to all: Get a hobby. The word itself is almost obsolete and comes from past generations. Therefore, we have to look to past generations to get some ideas of what a good hobby might be. The one criteria required for our purpose is that the hobby must require more time than money. Many modern day activities involve more money than time. The reason is simple. We are introduced to them by the companies selling the pieces, parts, and equipment to perform the hobby. Even Christmas now is primarily promoted by the stores.

Below are some ideas for lower cost hobbies. If they are totally new then consider it an adventure to shop for a hobby. Try them all on to see how they fit before deciding it’s not for you. Also, remember that many of these involve acquiring a skill. At first it will take some work and mistakes and maybe frustration before you get the hang of it. You probably won’t be good at it at first. Start with a minimum investment and set yourself a limit you can afford before you go hobby shopping. You don’t want a lot of half finished projects around the house but on the other hand if you spend $20 on your new test hobby and spend weeks of evenings at home before you decide you hate it and toss it aside you still have probably saved a lot of money by not going shopping.

So here are the ideas:

1. Read to your children. Let them read to you.
2. Embroidery.
3. Learn to play bridge and teach your best friends.
4. Knitting.
5. Yard work.
6. Crochet.
7. Play board games.
8. Paint-by-the-number. (You don’t have to create a masterpiece. Just have fun.)
9. Models.
10. Make doll clothes from scrap material.
11. Walk and keep track of how far you walk.
12. Bird Watching. Get a book and mark and date the ones you see.
13. Needlepoint.
14. Cooking.
15. 1000 piece puzzles.
16. Learn to play chess.
17. Take dance lessons.
18. Fishing.

The local community centers and senior centers have many low cost classes. For about $25 you can get an introduction to a whole new craft, skill, or activity. Through adventure and experimentation you may find a whole new outlet for your individuality and buried creativity. The diamond in the rough in this case is you.

The Annual 50%

The following is an excerpt from In The Trenches: Financial Survival During Times of Hardship. It goes nicely with my piece titled Make and Save Money by Getting Rid of Your Junk.

This will be fun, challenging, or almost impossible depending on your personality.

It is very easy to explain. Once a year go through every closet, every drawer, and every other storage area you have and try to get rid of 50% of everything you own. Sounds impossible but if you try it you will be shocked and surprised to find that you can actually do it. A friend and I did this together, we called ourselves essentialists.

I’m sure you’re asking why you would even consider doing this. Very simply, most of us have far more than we need or use. As a result we keep on spending more money on more things that we don’t need or use. Our houses get cluttered so we think we need a bigger house. Not only does it take money to buy, store, and maintain these items but it also takes time to buy, store and maintain these items.

The worst part about the whole situation is that if you go to sell these items, in most cases, and if you are lucky, you might get half of what you paid for it even if the item still has a price tag. At a garage sale the item often goes for pennies on the dollar. That, I think, is one of the main reasons we hate to get rid of extra stuff. We get internally outraged that no one wants to pay us “What it’s really worth”. So hidden in our closet we can keep on telling ourselves that it is hidden treasure and that we are lucky to have it.

The clothes closet is usually the easiest place to start with our 50% reduction. Usually it is easiest to start with someone else’s clothes other than our own. Don’t start with your spouse though. It can be a major issue if you get rid of their favorite shirt no matter how worn out or gross you think it is. So it’s either your own clothes or your younger kids.

Take everything out of the closet. Everything. Now count how many pair of shoes you have. 20? 50? Okay. What is half? Go through and get whatever is never worn, worn out or just a weird color that you love but never wear. Throw it all in a box. And move through everything until the whole closet is done. There will be some very easy decisions and some very hard ones. There is a common rule that says to get rid of everything you haven’t worn is a year. That works but for me some of the stuff I wear everyday is the stuff I most need to get rid of. Besides maybe you didn’t wear it for a year because you completely forgot you had it.

After all of the sorting it is time to put away everything you have kept. Wow. How did the closet get so spacious? This is also a good time to reorganize how you keep things. Shirts together, slacks, and jackets. Everything neat and organized. I go so far as to color arrange everything like the rainbow and it looks great. Color and type organizing also helps you to notice that you still have 10 pairs of slacks and 3 shirts or a beautiful red blouse with nothing to go with it. I once noticed that almost everything I owned was black. If you do need to go shopping you have a better idea of what you really need.

The sock drawer is always great fun. Small children love to help you work on this one. After going through all the pairs of mismatched and holes in the heels you might find you only have three really good pairs. Or conversely, someone once gave me a big garage bag of socks that I washed and sorted and got about 60 good pairs of socks. I was able to give them to someone who needed them.

It is also a good time to add a new bar or shelf to your closet if needed.

Now, having successfully gone through 1 closet or 1 drawer what are you going to do with the stuff you have decided you don’t need? Nothing. Just find a place to set it aside and out of the way for 3 months to 1 year. Sounds silly but a necessary part of the process. In two months you may find yourself digging through the box to get that winter scarf that you really shouldn’t have gotten rid of.

Just as an experiment select a few items you are planning to get rid of. How much did the item cost? How much is it now worth if you were to sell it at a garage sale? How many times did you wear it? This might surprise you. Let’s say you spend $100 on a dress you wore 4 times. That is $25 per each time you wore it. Now look at those favorite $7 sweatpants that you wore almost everyday after work and you are now getting rid of because they have been washed hundreds of times and are now an embarrassment.

So what is the point? The money spent is your investment dollars. Which item was the better investment? The question can be answered in two ways and it comes back to our needs, wants, and desires idea. The sweats were a much better investment from a usage standpoint so you might want to buy 3 more pairs just so they don’t get so worn out. The dress was maybe a waste of money unless it helped you land your great job or attend your son’s wedding. There is no right or wrong answer but by thinking about it you can make better decisions in the future.

After a few months have passed it’s time to do something with all the stuff. If you haven’t done so already, don’t forget to dispose of the items that are stained, ripped, or otherwise unusable. You could have a garage sale. You could donate it to a thrift store. Or, you could take the items to your favorite charity. You can get a receipt for a tax-deductible contribution. My personal favorite is the pass around club, which I’ll talk about in the next chapter.

I never finished answering the first question. Why would you want to do this?

1. Gives you more space for things you really do need or want to keep.

2. Someone else can use all the stuff you don’t want or need. They may even be delighted.

3. I hate to mention this one but having lots of stuff attracts mice and other pests.

4. By going through all of your stuff you can learn a lot about your weaknesses and spending habits. Do you have a weakness for buying shoes? Do you buy clothes on sale that don’t match anything else you own? Do you have clothes in your closet with price tags on? Or, do you love to buy fancy clothes that you never have anyplace to wear? Do you hate to mend and have many great clothes with missing buttons and hems coming out?

By taking the time to look at your spending habits you may come up with some better ways to use your money. This section has focused on clothes but the same methods and principles apply to all items in your house. Are your towels so worn out that they need to be replaced? Maybe having a garage sale will help you come up with the money to get some. Oh, and finally, check out the condition of your dishtowels and potholders. If you don’t know what I’m talking about then good for you.

Toys, Toys, Toys.

A special note about toys. With all the birthdays and Christmas’ that go by a child can end up with so many toys that they don’t want to play with any of them. A couple quick tips. Get rid of all the broken ones. Designate a specific place where the toys are to be kept that limits the space available like a toy chest or a bookshelf. Pick out the favorite toys and box up the rest. Rotate the toys every couple of months. Kids love it when they get a fresh supply. But just make sure not to try and hide the favorite stuffed animal or doll. We are not trying to break any hearts here.

Pass It On

After doing my first essential 50% sorting I was ready to do something. Some items went to the thrift store but we happened upon a great alternative. I took all my bags to a friend’s house and they sorted through, took what they wanted and passed it on. We continued the passing and friend after friend had a chance to go through it. They took what they wanted and added some more. Pretty soon we were passing everything from clothes, to drapes, to furniture. We all got blessed and it was surprising to find how often something we did not need was just the special thing that someone else needed and was glad to have. And we all were glad to get rid of stuff.

And that’s all it is. You can be the one to start your own pass it on circle. Depending on what you have pick a person you think might be interested. No strings attached. That’s the important part. Some people may take much and some just a little. Some may give much and some little. Don’t worry about it. Remember these are things you don’t want or need anyway.

If you don’t have anyone to give them to you can check with the school to see if there is a needy family.

And, of course there are other ways to pass on your unneeded items.

• Thrift stores – Many will give tax-deductible receipts.
• Garage Sales.
• Advertise in the newspaper or at the grocery store bulletin board.
• Swap meets.
• Craigslist.

Six Ways to Get Top Dollar for Your Car

MSN Money gives us six ways to get top dollar for your car as follows:

1. Think like a dealer. Dealers know that even a clunker can look like a cream puff when it's cleaned up.

2. Fix the little things. If your car needs major work, that's another story. But a burned-out brake light or ratty floor mats may leave a potential buyer wondering what else you haven't fixed.

3. Research what it's worth. Kelley Blue Book, NADA Guides and Edmunds have calculators to determine a used car's value. Enter the make, model and trim, plus mileage, options and condition, to get an idea of what your vehicle is worth.

4. Post a killer ad. Pepper the Internet with your ads. Take as many pictures as you can, including exterior shots from several angles as well as interior ones to show detail. Highlight improvements, such as a new stereo system and speakers, as well as any flaws, such as a dent in the door.

5. Document, document, document. If you have records of repairs and maintenance, make them available to buyers. Get a Carfax vehicle history report ($35) to show how many owners the vehicle has had and whether it has been in any accidents. Offering a report free to buyers should persuade them that you're being honest, and it's one less thing for them to do.

6. Be flexible. Buyers will almost always try to haggle on the price, so you may want to list the vehicle for a little more than your bottom-line price. The better informed you are -- from the price guides and from ads for similar vehicles -- the more confident you will be rejecting lowball offers.

Since I'm starting the car-buying process, I'm also starting the car-selling process. In the past we've simply given our old cars away. But this time we're going to sell the car, so I'm tuned into pieces like the one above.

Here's my take on their suggestions above:

1. I think I will get the car detailed. It's money well spent IMO.

2. There's not much that needs to be fixed in the car. I did just take it in to have some chips in the windshield repaired, and it now looks MUCH better.

3. Of course I'll check out what it's worth. Who wouldn't?

4. Any tips out there on what the "best" places are to put a car ad? Also, any suggestions on how much to spend on ads?

5. I have all my maintenance records -- every oil change, tire rotation, and so on. Yes, I'm a geek about stuff like that -- tracking dates and mileage for everything -- but it looks like it's going to pay off when I go to sell the car.

6. I'm going to set a price and am certainly willing to be flexible. I'm not going to reject an offer a couple hundred dollars below what I want simply because I'd rather have it sold and gone than deal with it for a longer period of time. That said, the lower the offer, the more likely it is to be refused.

I also have a few questions. Maybe some of you more experienced car sellers can answer these for me:

1. How do you conduct test drives? Go with them? Take a deposit (like a copy of a driver's license or some cash)? Simply hand over the keys and let them go?

2. I have the car's title in my possession (no debt on it, of course.) Will I simply need to sign it and turn it over to them to sell the car?

3. What sort of payment should I accept? Cash and cashier's check, of course. Anything else?

4. Once I sell the car, I'll notify my insurance agent. Anything else I need to do to be released from liability in case there's an accident with the car? Do I need to contact any state agencies? And for that matter, do I remove my license plate when I sell the car or leave it on the vehicle?

Schwab Visa on the Ropes

Here's a piece from the WSJ Bucks Blog that says that Schwab has officially stopped accepting new applications for its 2% rewards Visa credit card. Turns out that most of the people using the card are not carrying a balance (which is bad for Schwab.) As such, they're not making as much money (any money?) as they thought they would, so they're stopping new applications to limit the damage.

Fortunately, those of use who have a Schwab Visa are not affected -- we'll still keep our cards and the associated benefits. That said, the Schwab spokesman was quoted as saying, "there “are no changes to existing clients at this time.” Note the "at this time" wording. I think the Chase Freedom card once said the same thing and look where that got us.

If Schwab drops the rate on this card, I'll bail on it, close my Schwab account (the only reason I have one is to get my card rewards), and move over to the Fidelity American Express card (on the left under "credit cards" -- they don't have a direct link to it). It's 2% deposited into a Fidelity account, exactly the same as Schwab's card. I have a Fidelity retirement account for my 401k, but I'd need to open a new one to get deposits for this card. In fact, I might do this anyway since I have an American Express Blue card that I use at Costco, and I'm not getting close to 2% on it since it's not my main card (and it only works well when you charge a lot on it.)

And if this strategy doesn't work, I'll look at these cards to see if there's one I like there.

Would You Do This for $100k?

Here's an interesting money-making opportunity. The summary:

[Texas Motor Speedway President Eddie] Gossage offered the host of a Dallas country music station $100,000 to change his name to TexasMotorSpeedway.com for one year and get a permanent TMS tattoo. Terry Dorsey, a DJ on 96.3 KSCS, has exactly 24 hours to make the decision.

So here's my question: would you take this deal? (Or even a similar one -- would you change your name for a year and get a tattoo for $100k?)

Personally, I wouldn't. I'd do the name change, but not the tattoo (unless it was small and in a hidden place.)

BTW, I'm thinking of offering Barak Obama, Brad Pitt, or Tiger Woods $100k to change their name to FreeMoneyFinance.com. Think any of them would take it? ;-)

Are You Earning Less Than 2% in Credit Card Rewards? It Might Be Time to Switch.

The following is a guest post from Nerd Wallet.

Not too long ago, it wasn’t unusual for a credit cardholder to earn 3-5% in rewards on card purchases.  But lately, banks have started to get stingy.  Credit losses from the recession plus new regulations have eaten into their profit margins, so they’ve been raising fees, raising interest rates, and cutting back rewards programs.  Nowadays it’s generally accepted that a 1% reward rate is the industry standard. 

But just because it’s the “standard” doesn’t mean that you have to settle.  There are at least nine different cards out there that could earn you 2% on your purchases, and there are many more that could end up earning you at least that from bonus categories if you play your cards right.

How Come I’ve Never Heard of These Before?

The main reason is because a lot of these cards are loss leaders for their issuers, so they aren’t well advertised.  The auto cards are a good example of this, because the car manufacturers view them as a marketing expense to convince you to buy one of their cars.

The other reason you probably haven’t heard of them is because credit card sites have no incentive to tell you about them.  The online credit card search world lives on affiliate fees, where card issuers pay them whenever you sign up for a new card.  Most of these cards don’t pay these fees, so no one bothers to pitch them to you.

Great, So Which Cards Will Pay Me 2%?

• Brokerage Cards – Schwab offers a Visa tied to your brokerage account.  They pay you 2% back in cash on all of your purchases, and that money goes right into your brokerage account.  Fidelity also offers a couple of cards that pay 2% cash back – an Amex tied to your checking account, your IRA, or your 529 college savings plan, plus a Visa tied to your checking account that pays 1.5% for your first $15,000 in purchases and 2% after that.

• Auto Cards – GM and Subaru both offer cards that pay not just 2%, but 3%, on all purchases with the caveat that the rewards are used toward the purchase of one of their vehicles.  Depending on the car you plan to purchase, GM limits your redemption to anywhere from $1,000 to $3,000, but they will still pay you 1% in cash on any points you don’t use toward a car purchase.  Subaru limits you to $500 annually, and there’s no cash option, but you can use the rewards on parts, maintenance, leasing, or anything else you buy from Subaru. 

• Navy Federal Credit Union – If you or anyone in your family was ever in the military or employed by the Department of Defense, then you may be eligible to join their credit union.  If so, they offer a Flagship Rewards card that pays 2%, redeemable toward flights on any airline.  They also offer a Business Card that pays 1% on up to $4,000 in purchases, then 2% beyond that.  And who’s to say you’re not a business?

• Discover Escape – It’s actually quite surprising this card doesn’t get more notice, because it is actually a sponsored card, and it pays 2% in Discover Miles that are effectively the same as cash.  These “miles” are redeemable toward travel certificates that can be used on any hotels, airlines, or car rentals of your choosing.  The card has a pretty hefty $60 annual fee, but you get 1,000 extra miles per month for the first 25 months you use the card.  That more than makes up for the fee for at least the first few years.

• Capital One Venture Rewards – Here’s another card where you redeem your miles for statement credit against travel expenses.  So these “no hassle miles” are effectively cash.  It also carries a $59 annual fee, but that’s waived for the first year, plus you get 10,000 miles if you spend $1,000 in the first three months.

None of Those Cards Are Right For Me, So Am I Out of Luck?

Not quite, there are a few other cards that have generous rewards for bonus categories that can still average 2% or more if you take advantage of them.

• Amex Blue Cash – With this card, after you’ve spent $6,500 in a given year, you can earn 1.25% on all purchases, plus 5% on “everyday purchases” at grocery stores, drugstores, and gas stations.  Before that it’s 1% on everyday items and 0.5% everywhere else.

• Citi Forward – Pays 5% on dining, books, movies, and music, then 1% on everything else.  This could be a huge benefit if you live in a place like New York where you are constantly eating out.

• Chase Freedom – The rewards on this one are a little hard to follow.  They pay you 5% cash back on a rotating quarterly schedule of bonus categories, and then 1% everywhere else.  They don’t specify in advance what the category schedule is going to be, but as an example if they choose furniture for next quarter and you happen to be refurnishing, this could add up.

• Gas Cards – If you spend a lot of money on gas each year, there are a ton of cards that pay up to 5% on gas.  Aside from the Blue Cash, we like the Chase BP Card and the PenFed Platinum Cashback, which both pay 5% on gas and 1% on everything else.

So take a look at the cards in your wallet.  Are you being underpaid?  If you’re earning less than 2% on your purchases, chances are the answer is yes.  But now you have all the information you need to fix that little problem.

How to Start an eBay Home Business

The following is a guest post from Start an eBay Home Business.

So you want to have some more money at the end of the month to save for the future, to live a bit better or to be able to afford that new mobile phone? Consider selling stuff on eBay, almost everything you've got at home can be made into money. (What is the best Stuff to Sell on eBay?)

eBay as a Top Money Maker

But this article is not for occasional sellers who want to make a few hundred bucks. We are talking business here, and constructing an eBay home business works just as any other business works, by professionally doing what it takes to get a good profit out of your transactions. Thousands of so-called "Powersellers" on eBay make an entire living out of the site, and with eBay's growing audience worldwide, this isn't going to change anytime soon. Most probably more and more people will use online shops to sell their products, because it takes away the hastle of setting up a real physical shop, paying employees to sell, clean the shop and so on. With drop-shipping, a service offered by many wholesalers to send the bought product directly from them to the client without passing your hands, it is even possible to completely take away the usual paper work and added fees for shipping! And in this case, your own eBay home business is really just a matter of presenting a product and taking the cash once it has been bought - everything else is taken over by the wholesaler.

Successful Selling requires Professional Work

Sounds pretty cool, right? Well, it is. But it is work, and nobody could ever keep that fact from you if he wanted to actually tell you how to get into making a larger profit on eBay. The major advantage over other methods to make money is, of course, that it works through a simple buy and sell scheme: you buy for a low price and sell for a high price and the difference is your profit. That way, as soon as you sell something you will get profit, it is not as with so many other earning possibilities where you have to build something up from zero or where you have to develop a specific faculty of doing something well, because buying and
selling is what works in the real world, too. There is no way to fail at this business if you just have a good look at a few basic guidelines which I will show you now.

1) Building an eBay home business is first of all a matter of getting a well organized system. You have to make a plan to find out what it is you want to sell, because you'll need to figure out whether there is a demand for that product, how to present it and you'll need to find a wholesaler who can give you that product at a low price. Start by deciding what actually interests you as a person, because if you sell items that you know about it'll be easier for you to describe the article and to answer questions of your potential buyers. Then you should see if that product you chose sells well on eBay. Use eBay Pulse for that purpose (you can check different categories and see what sells best) or generally look at the auctions of that product by other sellers - you'll see at what price it can be sold for and how it is presented professionally. Find out where you can get that item from at a decent price and contact the wholesaler to see how you will have to organize yourself, what it will cost to send the products to either you or your buyers, including the additional charges for customs if you get them shipped to your place. Once
you've established that business relationship you should sign up for an eBay account and a paypal account, if you haven't done so yet.

2) Assuming you know what you want to sell and where to get it from, you will have to find out how to present the product. Look at other auctions on eBay to find out how successful other people do it, and start by imitating them. Imitation is the best way to learn here, but be sure not to copy any text or pictures from them because of the copyright law. Some general rules apply, though, to build a good presentation:

• Add good, detailed photos of the product, preferably photos you took yourself, this acts like a proof that you actually own the product and that it is not a mock-up
• Give all the necessary information; technical specifics, the condition that the product is in (used or new)
• State clearly what the shipping costs or additional charges will be, and be sure to explain everything about the warranty (if need be)

3) Rinse and repeat. The steps are always the same, and if you're selling the same product over and over again the work that goes into the description and photos will only have to be done once. Be sure to be very friendly to your buyers. If ever somebody asks to return something, think hard if you shouldn't refund him! Once your eBay feedback score is down because you were unfriendly or failed to provide a refund even though you offered one in the article description, nobody will buy from you anymore. Most people on eBay only buy from seller with at least 99% positive ratings, so keep that in mind. It's better to loose 80$ through a refund once and make 160$ the following day by selling to another person than keeping the 80$ and not
selling anything anymore because you didn't refund and you got a bad rating!

Keeping all this in mind, you should be ready to go and to start your own eBay business. Of course it's a slow earning system at first, because you need to acquire the necessary routine to doing everything right and fast, and that can only be acquired through trial and error. But once you know the nuts and bolts, nothing's easier than that. The more profit you make, the more products you can buy from a wholesaler and the more sales you can make. At some point you might even consider getting an employee to do the work in your stead if you're making enough money! There really is no limit as to the amount of money you
can make on eBay if you're willing to work of it and if you have the patience to do it.

Money-Making Hobbies

The following is an excerpt from Your Money: The Missing Manual, an excellent book written by JD Roth from Get Rich Slowly. Copyright 2010 O'Reilly Media, Inc. All rights reserved. Used with permission. (A sidebar appears at the end in red.)

Even if you're not interested in owning a business that you work at full time, a small-scale venture might be right for you. Why not build a business around one of your hobbies? You won't get rich by playing your violin at weddings or weaving baskets, but it never hurts to earn a little extra cash from things you'd do anyhow. This section suggests some key ways to make money from your hobbies.

Do what you love

Choose a hobby you enjoy, and then try to find a way to make money from it. Don't dive into a hobby simply because it might be profitable. You should do this thing because you love it; any income should be secondary. Keep it fun and it won't become a chore.

Example: I love to write. When I was struggling with debt, I read personal finance books, and then summarized what I'd learned on my website. Eventually, this grew into Get Rich Slowly. I've managed to make a career out of writing about personal finance, but I didn't start doing it for the money—I was passionate about the subject.

Be creative

If you don't know which hobby to pursue, think outside the box. What skills do you have that others don't? Define the term "hobby" broadly so you don't limit yourself. Find something that you can do that most others can't—and that people might be willing to pay for.

Example: One of my friends loves to travel, and he discovered that he can fund his adventures by writing about the places he visits. He makes money selling e-books, and gets paid to write for newspapers and magazines.

Don't expect too much

You probably won't get rich off your hobby. In fact, you likely won't even earn enough to quit your day job. But you might be able to earn enough to make the hobby self-sustaining, meaning you earn enough to cover the cost of new tools and equipment.

Example: My brother builds speakers and works with audio equipment for fun. He makes a little spending money doing speaker jobs for other people, but he's not interested in turning his hobby into a full-time business.

Don't underestimate yourself

When you truly love something, your experience can give you skills and knowledge that you may take for granted. But just because you know all about growing orchids doesn't mean everyone else does. If you're an expert on a subject, think of ways to share it with others—for a fee.

Example: If you're passionate about cycling and want to help others learn the sport, start a bike-fitting service or open a part-time bike repair shop. Doing these things may seem simple to you, but others will gladly pay for the help.

Market yourself

To earn an income, you need customers. Many people are uncomfortable promoting themselves, but you have to if you hope to earn money from your hobby: People need to know you're available before they can hire you.

Example: There's no shame in discussing your money-making hobby with friends, family, and neighbors. You don't need to be pushy; just bring it up naturally in conversation. Eventually word will get out about what you do, and people will call for your services.

Hone your skills

You know the old mantra: Practice, practice, practice. The more time and energy you devote to your hobby, the better you'll get at it, which will improve your chances of earning money.

Example: Love photography? If you take a hundred shots a day and read up on how to compose images, you can improve your skills quickly. You may never become a professional photographer, but you might be able to sell images to stock photo agencies (like iStockPhoto.com) or enter (and win) photography contests.

Choose carefully

Not every hobby is a good source of income. Some—like collecting—can actually be huge drains on your budget. And remember: You probably won't get rich off your side business, but you can improve your cash flow, which will help you get out of debt and build wealth that much quicker.

Your Money And Your Life: Cash for Cupcakes

Jessie Smith graduated from college with an art degree and no firm career plans. When the economy tanked in 2008, she began to wonder what she could do with her degree. "There were all these articles about women losing their jobs," she says. "I read an article about a grandma who started her own peanut brittle company, selling it at farmers markets." This gave Jessie an idea.

With encouragement from friends and family, she started Confectionery, her own cupcake business. Jessie bakes and decorates cupcakes and sells them at local stores and farmers markets. "They're pretty elaborate and creative," she says. "I get satisfaction out of that." This isn't how she planned to use her art degree, but she's having fun while learning new skills.

Starting a small business is a scary prospect, but Jessie figured that at age 24, she could afford to take a chance: "When you're young, that's the time to make mistakes."

Jessie doesn't have any employees, and it's her own money at risk. Despite some bumps along the way, she still came close to breaking even her first year. Now she's taking a business class to help her with the non-creative side of the cupcake trade, and she believes she'll do much better in the future. She's found an outlet for her creativity and enjoys what she does, which is just frosting on the cake.

How to Earn 2.75% Cash Back on a Credit Card

Here's a comment a reader recently left on my post titled The Best Cash Back Credit Card:

I don't think this has been mentioned, but this is a rather unusual method of accumulating cash back rewards I have adopted. For those who have had a PayPal debit card for many years, you will earn 1.5% cash back on signature purchases (the newer accounts only get 1%). Inside of your PayPal account you can also have a PayPal Plus Credit Card (gives 1-1.25% cash back depending on the number of points you accumulate prior to redeeming your reward). You can setup your PayPal plus credit card as a "backup" funding source for your PayPal debit card, so that if you have a $0.00 balance in your PayPal account, a signature based transaction will still go through.

I inquired the PayPal department about this situation several years ago, and I asked if, in the event that I had $0.00 in my PayPal account and I did a signature based transaction on my PayPal debit card and the PayPal plus credit card was used as a backup funding source, would I receive both 1.5% cash back on the debit card AND the PayPal plus credit card reward points. They answered in the affirmative, so I proceeded to do all of my daily expenses like this. It is effectively 2.75% cashback unlimited.

Granted, it's an unusual circumstance -- I'm guessing many people don't have PayPal accounts and credit cards. Then again you could get both of them. And for those of you who have them already, this seems like a great way to earn a good cash back amount. 

Anyone else ever done this?

Thousands of Ways to Make and Save Money

If you've been reading Free Money Finance for more than 15 seconds, you know that my basic philosophy is this:

The way to become well off is to make more money, save a good portion of it, and do this over a long period of time. (If you want more details, see How to Get Rich in Three Easy Steps.)

To this end, I often write about how to make more money (both with your career as well as with other activities) and how to save money. But you may not realize where you can find the posts related to these topics. Well have no fear, because this post will lead you to them all!

Growing Your Career Ideas

Let's start with making more money. I have several career categories -- one for before 2008, another for 2008, one for 2009, and a final one for this year). Simply click on any of the preceding links and scroll down to read all of the ways you can make more money by growing your career. There are 550 posts in all, surely enough for everyone to find some suggestions they can use.

Money Making Ideas

If you're looking for money making ideas outside of your career, check out my money making posts for before 2008, 2008, 2009, and 2010. There are over 340 ideas listed, so you're bound to find at least a few ways to make an extra buck or two.

How to Save Money Ideas

And if you're interested in how to save money, you have a lot of options here at Free Money Finance. As of now I have over 1,100 posts on have to save money listed in the following categories: prior to 2007, 2007, 2008, 2009, and 2010. Click on any of these links and start making your list of ways to save a bundle of money.

And, of course, there are many other ways you can grow your net worth here at Free Money Finance. You can write to me and ask a "help a reader" question, you can sign up to win some freebies, and, of course, you can always subscribe to the site using your feedreader so you can get new ideas for how to grow your net worth every day. Click any of the preceding links to take advantage of any of these options.

Please feel free to pass this post along to those you may know who can also benefit from these ideas. I'd like to see more and more people taking advantage of the simple steps it takes to grow their net worths.

What War Strategy Games Teach About Building Our Own Financial Empires

The following is a guest post from Realm of Prosperity. For posts related to this one, also see How The Game of Life Teaches Personal Finance and Money Lessons from Monopoly. For more on earning extra income check out Three Easiest Ways to Earn More Money, 11 Great Ways to Earn More Money, and Five Steps to Six Figures in Seven Years.

Personally, I like FIFA 2010 for learning about money. I use the manager mode to run a full team -- buying and selling players, deciding on sponsorship options, negotiating salaries, and adding to my stadium to make more money. Very fun IMO.

Age of Empires. Starcraft. Warcraft. Are you recalling a time in your life when one of these titles was a reason for you being glued to your PC?

These multiplayer war games feature a style of gameplay that is pretty intuitive: gather resources, build an army, and kill your enemies. For those who never cared for such war games (probably most ladies and older folks), you can grasp the concepts by simply looking at the historic events of how global empires were built. Even until today, global conflicts occur over precious commodities such as oil and diamonds.

The art of war isn’t an exact science but building a formidable empire, whether in the real world or the virtual world, entails acquiring new resources. Likewise, building substantial wealth asks that you find additional or higher streams of income and saving it. Despite serving the sole purpose of entertainment, these addictive war strategy games can teach a thing or two about building our own financial empires.

Conquering New Resources

Of course, I was one of those guys who had my eyes locked on the PC monitor and my hand glued to the mouse for hours on end – with very little success in beating my friends. In my mind, I kept wondering “why do I keep losing?”. Evidently, I realized that they were able to build “empires” three times as large as mine!

After some self-evaluation, it became apparent to me that I refused to expand my “empire” by taking over more land and resources. To improve my win-ratio, I needed to create a big, bad(ass) empire by venturing out into unknown lands and find new resources. With more resources coming in, I can afford to grow bigger and stronger.

Similarly, if you want to increase the numbers in your bank account statements, you should seek out other forms of extra income. A surplus of $50 per month can go a long way towards your financial goals. I learned that conquering new resources is essential to building more wealth. Stepping out of your comfort zone into the abyss may be risky but the rewards are worth it.

What can you do to acquire new resources? Well, check out some of these ideas:

• Ask for a raise
• Discover a profitable hobby
• Starting a side business
• Turn your blood into money

If you want to turtle in the same size “empire” like I did, you may be able to sustain yourself but you will be lacking in growth. There are many other competitors out there who are willing to do what you don’t want to do. If I didn’t try to pick up a freelance writing job, the person next to me will. So why not seize the opportunities for extra income?

Keep Your Edge Over the Competition

It is quite disappointing to see that as the game progresses, my enemies who gathered more resources earlier in the game were able to continue to gain more resources faster. Soon, they grow to such an enormous size that no one can possibly take them out. Then, they’ll being inching into my territory.

In our world, the uneven distribution of wealth supports the common notion that the rich get richer and the poor get poorer – the top 2% of the world wealthiest own about 40% of the global wealth. They can afford to invest in the most profitable industries and businesses while the poor are stuck with fewer options.

To keep my edge over the competition, I’ll have to use my resources to obtain more resources. In personal finance, this resembles the great mathematical phenomenon of compounding. Wealth creation entails using money to make more money. It can be as simple as putting your money in a high-yield savings account or usig a more ambitious route with investments in the stock market. But most importantly, I must make my money work for me.

It reminds me of the story of a miser who hires two teenagers to tend to his livestock while he was away for 30 days. One teen gets paid $100 and the other starts at one penny at a rate that doubles every day afterwards. Of course, the latter came out with significantly more.

Go out into the unfamiliar lands and conquer the new sources of income that are available to you. Use the extra money you earn to build your wealth into a financial empire. You’ll find that your initiative will reap many rewards.

So, don’t shun strategic war video games as a pointless waste of time because they are based on actual concepts. Come on guys, I know many of you have played them. Has a video game ever taught you a money lesson?

Update on My Gold Coin Purchases

Early last year I suggested that we all could make money by buying US $1 gold dollar coins. In part of that strategy it said to "deposit the money at your bank (or use it yourself)" once you had the coins. I had a reader recently leave this comment on that post:

I heard today that the US Mint has now stated that credit card purchases will be recorded as cash advances rather than credit card purchases. They said credit cards typically do not give reward points for cash advances. I think this is to stop people from earning points or miles on the coin purchases.

The commenter then linked to this article that noted the US Mint had changed its policy because people were loading up on the coins (one buying $800,000 worth -- yikes!), simply returning them to a local bank, and pocketing the rewards.

I'm not sure how this was done since the limit for the free shipping program was two boxes ($500) per president, but I'll let it go since the Wall Street Journal reported that the $800k is true.

On a later, related post titled Free Money Finance Makes Gold Dollar Coins a Success, a different reader recently left this comment:

The intended purpose of the Circulating $1 Coin Direct Ship Program is to make $1 Coins readily available to the public, at no additional cost, so they can be easily introduced into circulation–particularly by using them for retail transactions, vending, and mass transit. Increased circulation of $1 Coins saves the Nation money.

The immediate bank deposit of $1 Coins ordered through this Program does not result in their introduction into circulation and, therefore, does not comply with the intended purpose of the Program.

I've covered before what I've done with the coins (see A Creative Use for Dollar Coins, Blessing Boxes Keep on Blessing, and Giving Blessing Boxes), but I wanted to give you all an update on where we stand with them.

As a recap, I bought somewhere in the neighborhood of $2,500 in gold coins (the max two per president that qualified for free shipping), earning somewhere in the neighborhood of $45 for my effort. Since then, we've given the coins away in the manners described above, but have also given them:

• To people we know in need (friends, church acquaintances, etc.) -- this is basically what the "blessing box" idea is
• As birthday presents
• As Christmas gifts
• As payment for a local (charitable) paper we receive
• As spending money (I keep them in the coin box of my car)

In other words, I have been circulating them (I didn't take them to the bank.) People LOVE getting the coins since they are still relatively rare, so we keep our stash on hand and give them out here and there as a need arises. We have about $1,000 or so of them left, and once those are gone, I'll likely buy more for the same sort of uses.

Just wanted to update you all and clarify the record -- in case anyone thought I wasn't following the rules. ;-)

How about you? Anyone out there buying/using gold $1 dollar coins?

Three Easiest Ways to Earn More Money

I Will Teach You to Be Rich lists the three easiest ways to earn more money as follows:

1. Freelancing
2. Productizing (creating a product and selling it)
3. Getting a higher salary

I've covered all of these in one form or another in my list of 11 great ways to earn more money. But if I was forced to list my top three in order, here's how I'd rank the three easiest ways to earn more money:

1. Your career. You can do a lot to make more money from your career -- ask for a raise, get a promotion, or change jobs/companies (which usually comes with a pay raise.) In addition, the one thing I like best about this tip is that the gains are cumulative -- a 6% raise this year is on top of the 5% raise last year and on and on. They build upon each other over time and thus can have a huge impact on what you earn. The keys to being successful in this area are demonstrating that you deserve more money and marketing yourself appropriately. And remember, you'll have some years where you get minimal raises, but others where they can be much bigger. Hopefully they work together to give you a good average increase through the years of your career.

2. Create your own side business. The two best sources for what sort of business you might be able to create are 1. what you do in your current job (you could turn these into consulting, freelance, or teaching jobs) and 2. your hobbies (think bike repair, creating and selling crafts, dog sitting for pet lovers, etc.) This will take more effort for less reward than #1, but once you build up the business, you can generate a good side income. In addition, it could eventually grow to the point where it replaces your current job.

3. Maximizing your investments. This may not seem like a great way to earn more money (or grow your wealth, if you prefer since much of the gain could be in price appreciation), but it can be a significant source for growing your net worth. Simply earning an extra 1% on your investments versus what you currently get will make HUGE difference in what you earn. How do you do this? Be sure you select the proper asset allocation (4 rules for asset allocation can be found here) and you regularly rebalance your investments (more on this here, here, and here). If you've done those things and still would like to do more, the best way to do so is also the easiest: save more and do it now. Yep, TIME is actually the #1 factor in making the most of your investments. Thus the old adage, "save early and save often."

If you're interested in earning more money, I have over 360 ideas on how you can go about doing so. For instance, here are 198 money-making ideas from the early years of Free Money Finance, 82 money-making ideas from 2008, and 61 money-making ideas from 2009. Check them out if you'd like to make more money.

I Earned Over $800 in Credit Card Rewards in 2009

I had a strange year in 2009 with my cash back credit card rewards. Why was it so unusual? Because I had three different cards as my "main" credit card last year. The details:

• American Express Blue Cash started the year as my top card. Then they changed their rewards structure so that it was less lucrative, so I bailed on them (as my main card -- I do still use them at Costco).
• In May, I used my Chase Freedom card. But as I got going with them, they changed their program around too. As a result, they were dumped as well.
• So I applied for the 2% Schwab Visa and used it from June through the rest of the year (and it's still my main card.)

As for rewards, I earned over $800 in cash last year as follows:

• $250 ($200 for charges and $50 bonus) from Chase Freedom on charges of $3,322 (FYI, a HUGE amount of this was earned in 2008 and I just "topped off" in 2009 to get the full bonus.)
• $69.37 from American Express on charges of $8,670. Ugh. 0.8% return. This card only worked well in the second level (which kicks in at $6,500 charged), so it didn't have the opportunity to really return much (I stopped using it right after the higher levels kicked in because Schwab was better.).
• $526.10 from Schwab on charges of $26,305 (2% return.) This was helped by putting some big purchases on the card -- namely our furnace, all our Christmas shopping, a new couch, a snowblower, and some other furniture (all paid off on the next statement and with no interest charges or fees).

So in all, I earned $845.47 with purchases of $38,297 for a return of 2.2%. Again, this is highly skewed by the Chase charges that earned me $250, most of which were in 2008.

In the end, I feel pretty good about the results -- it's another good chunk of money earned for doing nothing differently than I'd do otherwise. For 2010, I'm sticking with Schwab and hoping they keep their 2% rebate going. If they do, I'll be looking at another $800 in earnings!!!