By Kevin M

Last night my wife learned something disturbing—not for herself but for some of her coworkers. She has a part time job with a company that just announced that fulltime employees are losing their benefits and being converted to part time status.

Now the optimist may say, “it could have been worse—at least they didn’t lose their jobs”. And while there may be a grain of truth to that assumption, the bad news outweighs the good here, and I’d say by a wide margin. First of all, part time isn’t full time—it’s part time. That means even if you keep your hourly rate of pay, there’s no guarantee of 40 hours a week, or even of 30 or 20. That looks an awful lot like a pay cut to me.

Second is suddenly going from a job with benefits to one without—that includes health insurance. Charles Hugh Smith has made a strong case that the middle class isn’t middle class without health insurance coverage, and I think that point is beyond debate. What we’re looking at here, in addition to the pay cut, is the loss of socio-economic class status. They’ve been demoted to “the working poor” without ever losing their jobs. That’s pretty radical.

There ain’t no more job security

The example on my wife’s job isn’t isolated either. More employers are moving toward some variation of this all the time. Here’s the bottom line: from day to day, you can never tell what will happen with your job. A full-time job can turn into semi-employment with a single policy decision by people you don’t even know. It isn’t just layoffs anymore; its hours and schedule, pay cuts, job re-classification, job stagnation, loss of benefits—you name it. I’d even argue that the unemployment rate issued by the government is now mostly irrelevant.

Employment Realty #1 is that employers are figuring out ways to eliminate people and payrolls through a relentless shift to cheaper workers offshore, the latest computer technology or a combination of both. Translation: as much as we want to buy into the economy-is-recovering projections, it’s becoming painfully obvious that if that is happening, it’s fully capable of doing so without employees. The stagnant employment picture has less to do with the state of the economy than it does with the progression of options available to employers.

At least since World War II job security and benefits have always been major reasons why most people prefer to work for someone else rather than for themselves. Job security means insulation from the ups and downs of both the economy and the employers business, and benefits provided the safety net protecting against many of life’s uncertainties. Who wouldn’t want that if they could get it?

Now that neither job security nor benefits are guaranteed through employment, has the playing field been leveled, is there now less risk in being self-employed than there has been in the recent past? I think so.

Job security and self-employment

Here’s why I think that the case for self-employment is growing all the time, and why it may be the ultimate solution to the employment meltdown of the 21st Century:

1. As discussed above, jobs no longer carry the promise of stability or benefits
2. Self-employment was the primary income source of most people for thousands of years prior to the 20th Century—it is entirely possible that after nearly 100 years of large scale employment by large organizations, conditions are now returning to the historic norm of the family farm or shop (though it won’t look that way)
3. The same computer technology that’s putting people out of jobs is also making it easier to start your own business—we’ll spend a bit of time on this one in a minute
4. As the number of people who are self-employed expands, so will networking opportunities. The way you used to job network with people at other companies coverts to networking with those in the same or related businesses
5. The same instability that is making the job market less secure also opens up opportunities for part time, seasonal or contract work that can be used to supplement self-employment income—in the start up phase and later on an “as needed” basis
6. Employers who are reducing staff are often subbing out the work once done by employees—that’s an opportunity for a small business
7. Because you’re smaller and have much greater freedom in a small business you may be in a better position to react to changes in the economy, such as the ones we’re seeing now

This really is a “glass half full” situation—if we recognize what’s really happening and learn to use it to our advantage. Reality is going where reality is going; we can either embrace change as an opportunity, or let it roll over us while we look to the past for answers.

How the internet helps the self-employed

Many might curse computers and the internet for the negative affect they’re having on employment, but that’s the wrong approach.

In #3 above we touched on how computers are making it easier to be self-employed and that’s absolutely true. I’m an example of this. Earlier this week, in How Blogging Solved My Mid-Life Career Crisis, I spilled my guts about being disenfranchised at the age of 50. I was a textbook case of an economic casualty. But I chose to embrace the change rather than fight it.

Here’s the thing…people are making money working from home on their computers, and I decided that I needed to join them. Difficult? Most certainly. Impossible? No way!

Yes, there is more than enough get-rich-quick-on-the-internet snake oil being peddled out there, but beneath the phony claims, thousands of people are making a living (or better) on the internet.

I’m not saying that everyone could or should blog like I and many others are doing. But at a minimum you can use the internet to grow a local “bricks and mortar” business, in a way that wasn’t available even ten years ago. One of my best friends is running a very successful trash hauling business here in my neck of the woods and gets nearly all his business from the web. I believe that’s increasingly possible for most businesses.

If you have any idea for a business, fully investigate how you can use the internet to make it work. And if you don’t have any, look closely into ways you can make money on the web. Some ideas include blogging (my favorite!), freelance blog writing for other sites, and providing marketing, technical and administrative support to the many commercial websites and blogs that are out there on the web.

Because of the internet, nearly any skill you have or can acquire can be converted into some form of self-employment, if only as a side business. And these days, that’s looking a lot more secure than the average job.

Have you considered starting some sort of internet business? If not, what’s stopping you?

Monday’s post: Self-employment in the Internet Age

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Starting a Side Business – Why Now is the Time

By Jessica Wagner

Saving, whether it’s for retirement purposes or otherwise, is tough enough without having that added difficulty of being self-employed. Many people have found the benefits of being their own boss and making their own hours but putting money away isn’t as easy when you don’t have a company with good retirement plans.

It’s important to know that you can do this even if you are self-employed. Small business owners and online entrepreneurs alike have found ways to build up their retirement and savings funds. There are many ways to do this and there isn’t just one savings plan that you can invest in and IRAs have long been one of the most popular avenues for retirement savings.

Tax deferred retirement plans

An IRA is an account held by a custodial institution such as a bank or brokerage firm. Generally, IRA’s are designed for middle-income investors. There are no income restrictions for most middle class taxpayers and an IRA is available to everyone.

With a traditional IRA, you can contribute up to $5,000 per year ($6,000 if you’re over age 50) and the tax deduction of the investment is determined by your Adjusted Gross Income (AGI). Depending on your filing status (single, joint, etc.) your contributions can range from fully deductible to completely non-deductible. If you withdraw before 59 ½ then you will be subject to a 10 percent penalty fee. This is subject to exceptions so consult the IRS web site to see if this applies to you.

Traditionally, 401(k)’s are available to those who work for a company that has a plan set in place for their employees, but there are also Self-Employment 401(k)’s available. These plans allow self-employed individuals or business owners to contribute to this plan while receiving tax breaks for the money they put away.

This plan generally allows the participant to contribute up to $16,500 per year, which not only represents a large contribution to retirement savings, but also a substantial tax benefit. Contributions to both and IRA and a 401k are deductible not only for federal income tax, but also for state income taxes. (Neither however results in a deduction for FICA taxes however.)

Creating income streams to fund your savings plans

If you do have your own business and you don’t have the available income to invest larger sums, you might want to consider making extra cash through different opportunities. And some of the best income earning opportunities can be found online so you don’t even need to leave your home or your place of business to make them happen.

Some of these options in fact can prove to be quite lucrative and range anywhere from freelance writing to taking market research surveys. Such opportunities can provide the steady additional cash flow needed to fund savings, and do it in less time than you might think.

Be sure that any income earned from side ventures will in fact be targeted for savings, and not blended with your regular budget. If the extra money is put into retirement savings, there will be little or no income tax on it, which should make your portfolio grow even faster.

Other savings options

You can also choose to set up a savings account or even certificates of deposit (CDs). In this way you can either save money until you’re ready to commit it to long term retirement plans, or build it up separately as a savings source in addition to your retirement investments. It’s always best to have some money in retirement plans and some outside since you never know what can happen between now and the time you retire.

If done wisely, you can start saving for your later years with very little effort. Set aside the extra cash you make and place it directly in various investment alternatives. It doesn’t have to be a savings account or CD. You can choose to invest in the stock market but this option comes with some risk in addition to a return that can be much greater than low interest accounts.

There are many savings choices available for those who are self-employed and these are just a few options. While searching for additional income and investment opportunities—on the internet or elsewhere—be careful of any offers promising huge returns for a nominal investment. There are many scams out there so make sure that any savings plan you invest in and any business opportunity you take on is legitimate.

If you’re self-employed, what are you doing to fund your savings and retirement plans?

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7 Reasons to be Self-Employed

Kevin M

There’s probably never been a better time to have your own business. I know that sounds downright loony to some, but it’s the reality of our time. On the plus side, the internet has opened up opportunities for small business ventures because it provides incredible leverage and it can make the little guy look like a big guy. On the negative side, employment has never been less certain or less satisfying, at least not in the past several decades.

Not convinced? Consider the following reasons—you can probably come up with a few more.

A sense of control

When you’re on someone else’s payroll, you’re also beholden to them. Your employer can change your work assignments, your seating assignment, your title, your pay, or even eliminate your job. In any of these instances, you may have little or no say in the decision making process—especially if you’re about to be fired or laid off.

Being self-employed gives you a strong measure of control over all of that. Many people are willing to make less money working for themselves precisely because it provides a greater sense of control over their careers, and by extension, their lives.

Unlike a job, self-employment isn’t “either/or”

Jobs are very much either/or arrangements; either you have a job and all is well, or you have no job and desperation is a constant traveling companion. In most instances, self-employment doesn’t put you in that position, especially if you have income streams coming from different sources.

In the worst of times you’ll probably have an income, even if a reduced one. What’s more, self-employment can give you the flexibility to pursue other income sources as needed. With jobs, you often don’t have the time, and some jobs even restrict your ability to earn money apart from your job.

The self-employed mindset

Back when I was in the mortgage business, an attorney I did a lot of business with made an astute comment over lunch one day. We were complaining about how clients often asked us to perform extra services without additional compensation, and he said “People who are in salaried jobs don’t understand; they get paid no matter what. We only eat what we can kill.”

If you’re a salaried person that comment might sound harsh, but if you are or ever have been self-employed you know exactly what he meant. The last sentence is an obvious reference to predatory animals and while graphically extreme, it serves to highlight the vastly different mindsets between people on salaries and those who are either self-employed or on commission. When you’re self-employed, there’s nothing “automatic” about your income—you have to earn it everyday.

On the surface, that sounds like an obstacle and I suppose it is. But once you grasp the concept that your paycheck is somewhere “out there”—in the community, on the web, on the phone or where ever the client base happens to be—and you learn that getting it is actually doable, then the whole process becomes liberating!

Once you learn how to make this happen, and that it can be repeated, you’ve crossed the line into self-employment. You begin to realize that anything is possible and you see opportunity all around you. There’s no security—but there are no limits either. That’s the self-employed mindset; you’re no longer looking for a job—you’re seeking opportunities. That’s a mindset that can be learned only by doing it, and once you have, it changes everything.

Retirement income

A lot of people fret over having enough money to retire comfortably, but here’s the reality for most people: you’ll never have enough money, so get over it! The rising cost of living will just about guarantee that the vast majority of people—outside the richest 5-10% of the population—will ever be able to enjoy a full retirement with no financial worries.

The best remedy to that problem is to have a business of your own, one you can work at for as long as you live, with no threat of being “put out to pasture”—as is the case with jobs. If it’s your business, you won’t ever need to retire from it and it can provide for you for many years past traditional retirement age.

Potential for unlimited income

Ever wonder why you reach an income ceiling on a job? It’s not your imagination—most jobs are “static” (I read that in a how-to-get-a-job book by an HR guy). An employer—any employer—will only pay so much for a given job, even if you’re doing the best work possible. Worse, once you reach the top earnings threshold, you’re trapped in the job because a move to another employer may mean a decrease in pay.

When you’re self-employed, you can earn as much as your time, talent, and effort will allow. In theory at least, there is no limit as long as you continue to grow and expand your business and your abilities.

You don’t have to quit your day job

One of the great aspects about starting your own business is that you don’t need to quit your job to do it—as we discussed above, self-employment isn’t either/or, and often involves the pursuit of multiple income streams.

You can start and build your business as a side venture until you’re ready to go full time. Maybe you never go full time, but you’ll have it as a second income and as a place to do the things you never could on your full time job. Sometimes having a side business makes your full time job more tolerable because it gives you what your job can’t.

One thing to keep in mind though; when filing taxes each year, working with a single employer and W2 forms, you can use a simple free IRS efile and do your own taxes online. Being self employed often opens up the possibility for significant deductions, and with multiple revenue streams, it may be in your best interest to consult a tax professional if you don’t feel comfortable doing it on your own.

Advance preparation for a job loss

This reason almost makes a necessity of being self-employed. This isn’t your grand-father’s economy—it isn’t even your father’s economy—the rules have changed and are still evolving. The past ten years have been very unstable and the future doesn’t look any better if “stable” is your definition of normal times.

Every one of us needs to have a plan (or better yet, plans) for a job that won’t be there in the future. Just because you kept your job through the last recession doesn’t mean you’ll have it until you retire. No job is safe any more, and the worst part is that if you do lose your job it will probably come at a time when thousands of people in the same line of work are losing theirs. That means there will be long lines of candidates applying for any job available.

In your own business, you can (and should) develop multiple income streams that will provide you with at least some income, plus the ability to find new ones. You can even take a part time job to help in a pinch.

There are businesses and industries that grow even in recessions. I’m doing freelance blog writing, and that business has actually grown substantially during the recession. There are opportunities for growth all around and having your own business can help you find them. If you’re doing it right—meaning you’re always searching out opportunity rather than a job—you have a good chance of surviving and even thriving, what ever happens in the economy.

If you’d like to start a business of your own, but don’t know which to go into, check out my post, The Freelance Blog Writer Side Hustle. Blog writing is a chance to start a business small and to grow it–risk free. Even if you’ve never written professionally in the past, this post can get you started.

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By Kevin M

Even in the face of an apparent economic recovery, many millions of people are stagnating in their jobs, unable to get a promotion or to move to a more promising position with a competing company. Many more are still unemployed or even under-employed. That may be the reality of our time, but should we sit still and wait for better times? Is that even a strategy?

Cutting living expenses is one way to deal with a comatose employment situation, but I’ve argued in the past that frugality has its limits. When all is said and done, you can only cut your expenses so much before finding new income sources becomes an absolute necessity.

If you aren’t content to continue to just muddle through, and want to make things happen in your life, increasing the number of income streams will be the most constructive way forward. And starting a side business is the single best way to do this.

How can starting a side business build a better future?

Moving forward in an uncertain job market

Job security is a thing of the past. We could write books about how that’s playing out but it’s completely unnecessary. The more important issue is how we deal with that reality?

If jobs are uncertain, the best thing we can do is to prepare ourselves for self-employment. Since most people have never been self-employed, the lowest risk way to do this is to begin a business as a side venture while you’re still employed by your company. You’ll have the cash flow from your job, and that will give you as much time as you need to get your business up and make it profitable.

If you haven’t been promoted in a long time, and there’s little prospect of getting a better job elsewhere, it’s time to get started with a side business now. In time, your business can grow into a full time venture. And even if it doesn’t, and it merely functions as a part time business, it can either supplement your income or be one source among several income streams in the event you lose your primary job entirely.

Coping with the rising cost of living

Despite official declarations of an inflation rate sitting reliably within the 1-4% range, the cost of goods and services that we need—food, energy, utilities, healthcare and education have soared. If you aren’t being promoted, and the raises you get are only of the token variety, you’ll have to increase your income outside your job. A side business is a logical way to do this.

Retirement planning

Will Social Security be there when our turn to retire comes around? I think so, but it will almost certainly be at a level well below what today’s retirees are enjoying. Maybe it will be pushed out to age 70, or maybe it will be means-tested—we can’t know. And as pretty as self-directed retirement plan projections are, none can adequately account for the effects of one or more stock market crashes, or of a prolonged period of unemployment.

A successful side business can provide a workable Plan B against these possibilities. It can be a much needed income stream to supplement a reduced Social Security check and a less than expected return on a 401k. This is real life—even in retirement we’ll need options.

Building up savings and investments

It’s tough enough stretching a paycheck to cover necessary living expenses and—hopefully—a little bit for extras. But savings and investing can be lost in the course of just surviving! There always seems to be yet another bill to pay, another unexpected expense soaking up every extra dollar.

Often, the only way to develop a serious savings and investment plan is to create another income stream to fund it. A side business can provide the source not only for building savings, but also to pay down and pay off debt, and to increase investments for retirement.

Bringing out your “inner entrepreneur”

Do you ever dare to ask yourself ”what do I truly want to do with my life?” It can be a lot of fun, but it often gets short-circuited on the but-I-have-bills-to-pay issue. And yet despite this cold dose of reality, most of us are fascinated by the possibilities. Deep inside, we all sense that we could be more than we are–if only…

Why is it important to be an entrepreneur? If we can’t rely on jobs to provide for our futures, then we need to rely on ourselves! That almost certainly means some form of self-employment. But beyond the question of earning a living, self-actualization is a very real human need. We all want to be the captains of our own ships “some day”, to create our own unique paintings of our lives.

If you don’t feel that that’s happening through your main occupation, a side business gives you another shot. Who do you want to be in your life and your occupation? Maybe the answer to that question is closer than you think. A side business may provide that answer—and a whole bunch of other good things along the way.

If you think that building a side business may be the right path for you, but you don’t know what kind of business to go into, check out my post, The Freelance Blog Writer Side Hustle. Blog writing is one of the most promising side ventures you can enter because it’s growing rapidly and has excellent potential to lead to still more opportunities. Even if you’ve never written professionally in the past, this post can help you get started.

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By Kevin M

One year ago—just about to the day—I took my first stab at this topic in Why Earning More Money is More Important than Frugality. It was one of the most popular posts I’ve done in the two years that I’ve had this site up and running. It seemed for a while that I’d covered the topic as thoroughly as I could imagine, but the subject has hit the blogosphere with a vengeance in the past couple of weeks stimulating additional thinking.

That doesn’t mean I’ve changed my original thoughts on frugality—quite the opposite. I’m now even more convinced that I was heading in the right direction on the first go round. My comment on Len Penzo’s 100 Words On: Why Frugality Has Its Limits made me realize that the subject is even more important than I imagined and that it’s time to take it on with some fresh ideas.

Frugality in a changing world

I believe we’re in the early days of a massive era of change that will eventually earn itself a chapter or two in the history books. Think Industrial Revolution here—an event so all-encompassing that it will change life as we know it. Space doesn’t permit presenting all of my thoughts here so it’ll be the topic of a future post that I’ll roll out as soon as I get the bugs worked out of my crystal ball.

In the meantime, we can safely say that at the moment we’re living in world of changing circumstances—I’d dare say negative for most, though I think the very long term will hold many positive surprises.

When change comes, and it seems disruptive in nature, we can do one of two things. We can either circle the wagons and work to protect what we have, or we can plunge forward and try to reinvent ourselves to thrive in a very different looking world.

The obsession with frugality strikes me as part and parcel of the circle the wagons strategy. Inside the wagons, we may feel secure and think that we’re in control, but as conditions outside deteriorate they’ll eventually drag us down in spite of our best efforts.

Frugality works best when you have something approximating employment for life, in a job that pays a living wage WITH full benefits AND predictable increases in pay. In that situation, your income is reliable and rises with time. By cutting expenses and saving the difference you save your way to prosperity.

But that’s not the world we live in any more. Jobs and long term employment are no longer certain, benefits are being cut, and raises–if you get them–are puny. Frugality doesn’t work as well in that situation and isn’t a long term solution to that problem.

The ultimate solution is to move beyond the circle, charge forward and work to cut a new path. Frugality doesn’t prepare us for that, at least not the way it’s generally used.

Micro-frugality vs. macro-frugality

So I don’t risk painting with too broad a brush, let me say that I think there are different types of frugality, and I can identify two as general categories.

Micro-frugality. This type of frugality is searching two dozen expenses for savings in each in the hope that collectively they’ll reach the level of real money. While that may (or may not) happen, the effort itself is exhausting, and requires constant vigilance. It has us researching, analyzing, discussing and executing cuts in nearly all expenses that make up our financial lives, and the effort can easily rise to the level of a part time job.

Macro-frugality. This is cutting the two or three biggest expenses that have the greatest impact on your finances. If your house is costing you $2000 per month between the basic house payment, utilities and upkeep, you replace it with one that you could live in for $1200 a month. A car with a $600 payment is replaced by a used car with no payment.

Macro-frugality makes abundant sense, especially if you’re trying to lighten your load to make a career push forward. You cut the structural expenses—which often causes other expenses to drop as well—and let the rest go. It’s better because you make two or three major changes and then move on. Simple, with maximum effectiveness.

Micro-frugality on the other hand, has us buried in small details. While we should be focused on generating fresh income streams, we’re busy plugging small leaks in our budget. What’s the end game to that strategy?

Is frugality motivated by a hatred of work?

That’s a strong statement but before you judge me too harshly for writing it, I came up with it while reading the comments posted on a New York Times article, Forget Frugality: Focus on Earning More.

The article was written by Ramit Sethi at I Will Teach You To Be Rich, an author and personal finance blogger who’s been very outspoken in his criticism of the frugality faith. There were 90-something comments responding to the article, and from the 40 or so that I scanned, the responses were overwhelmingly negative. I’d even go so far as to say that some of them were hateful, as though Ramit struck a deep emotional nerve.

Why the rabid responses? Ramit was suggesting that rather than use their free time to find new ways to save money, that they instead find ways to earn more money. That was the bone of contention—the frugal wanted to save money precisely so they wouldn’t have to work more.

But was Ramit suggesting that they become workaholics? Hardly. He was suggesting that they think long term. What he was pointing out was that the better use of spare time is to use it to earn more money so that credit cards and other loans can be paid off or savings can be accumulated. With less debt and/or more savings, structural improvements in life take place ultimately resulting in less work, more free time and more money. Its old fashioned work-save-invest, but the masses apparently want no part of it—too much work in the short run.

The primary risk of over-emphasizing frugality

Ever wonder why human beings are creatures of habit? It’s because life is easier that way. We don’t want to have to stop and think about everything we do, to hatch new ideas for the things we do every day, especially those that are mostly about survival. Going into automatic pilot is what we might think of as “brain save mode”, and there’s a good reason for that.

Each of us has only so much creative capacity, and so much time. True, some people are more creative than others, but all of us have the ability. The difference is primarily that some people make better use of their creative skills than others. The same is true of time. Each of us have only 24 hours a day, and much of that is consumed by work and sleep, leaving precious little time for much else.

That begs an obvious question: what are we spending our creative energy and time on?

Are we going to spend it analyzing four cell phone plans to see which is the cheapest? Running from store to store to see who has the best price on laundry detergent? Investing 100 hours of our time on research and efforts to weather proof the home so we can save $25 a month on energy bills?

All of these can seem like noble pursuits, but making a deep dive into details can also be a form of creative avoidance–that’s majoring on the minors, and it’s guaranteed to keep us right where we are.

That’s the risk that frugality brings—that the lions share of our creative energy and time will be dedicated to what amounts to an effort to keep what we have. In a period of changing circumstances and declining economic fortunes, will that be enough? Will it move us successfully into the future? I have serious doubts.

Yes, income generation IS more important

Frugality has its place—certainly macro-frugality does—but what I’m challenging is the notion of frugality as some sort of overriding financial guiding principal. That’s a role it can never fill. If your income shrinks down to zero, you won’t be able to cut enough expenses to survive.

Only by increasing income and generating new sources can we move forward, but it may be even more important than that. Why?

1. Jobs and careers are disappearing fast, and many of us need to completely retool in order to be economically relevant

2. Employers are no longer providing the type of training that will lead us to relevant new careers (they too are circling the wagons and have largely abandoned forward strategies like training in favor of cost cutting and survival)

3. Entrepreneurial skills are becoming critical as the choice for the unemployed is increasingly between self-employment and no employment

4. Developing multiple income streams may be the single best survival strategy in a world where fulltime, fully benefited, living wage jobs are becoming increasingly rare

5. University educations are not only prohibitively expensive, but the coursework is increasingly out of step with the most recent developments in the economy and job markets

6. Developing new businesses and income streams will take time, so the time to get started is now

Income earning ability is our single greatest financial asset. Our overriding financial principle then needs to be that we’ll always have an income—preferably a generous one. Making that happen is now completely up to us, and where we spend our creative energy and time will determine how well we do on that front more than anything else.

If you’re looking for a way to spend more time earning income to help your cash flow, check out my post, The Freelance Blog Writer Side Hustle. Even if you’ve never written professionally in the past, this post will help you get started converting your passions and interests into an income earning business that you can work in from the comfort of your own home.

Your thoughts?
 

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Guest post by Clair Schwan

Working a business in the online environment can be exciting. After all, it’s cyberspace – a new frontier. And, there is little doubt that many sources of information, ways of interacting with one another, and doing business will continue to expand in popularity and effectiveness on the web. Many wanna-be business owners have jumped onto the bandwagon of the Internet and gotten themselves immersed in an online business or two. And many have been very disappointed with the results, simply because they weren’t realistic in terms of expectations.

It’s commonly known that most online businesses fail. It’s largely because those involved pull the plug and abandon their efforts. Much of this retreat in the online marketplace is attributable to inadequate planning that fails to temper expectations. The Internet works at the speed of light, but revenue and profit doesn’t necessarily follow at the same pace. Let’s look at some of the areas in which we need to be much more realistic when it comes to our expectations for success in an online business.

• Time in service – a website created today doesn’t mean a throng of readers tomorrow. The most successful sites out there have been up and running for years. Sure, a website or blog can become a hot item, but this is something that’s rare. I spoke with a lady recently who was disappointed that her Ebook hadn’t sold a single copy, and yet she had the book advertised for sale on her website for two days, and there was hardly a page on the website that didn’t mention the book or provide a link to the sales page – including the home page. Two days? I wouldn’t be surprised if there were no sales during the first two months.

  Time in service provides the basis for several things. First, it allows the search engines to find your site and today it’s search engines that direct much of the traffic to a website or blog. Second, time in service allows readers who find you to become more comfortable with what you have to offer. Third, being online for a while allows others to recognize you as an expert, and this adds to the comfort that your visitors have. Comfort leads to trust, and trust leads to sales.

• Search engine optimization – in the ever-changing landscape of the Internet, we see search engines responding to our site content much more like humans, and less like mindless algorithms. So, it’s necessary to learn what pleases search engines, and play that game. Staying up with what search engines like is just another investment that we need to make. Also, if we’re smart, we won’t try to game the system. That’s a sure way to get ignored by the search engines.

  Also, we need to understand that search engines won’t find our site right away – it takes time, sometimes a month or more. And, search engines aren’t going to settle into our site with their “spiders” and “bots” and thoroughly go over all of the content and categorize each page – at least not right away. It will take several visits before they have a “feel” for our site, and then it takes more time for them to watch our visitor traffic to see if what visitors came to our site to find is really what we’re offering.

• Niche popularity – oh boy, you’ve got an exciting idea and you know it’s going to be big. That’s great, but does anyone else think it’s a great idea? That’s what counts. You might know plenty about pruning fruit trees, and that’s probably a niche market, but have you asked yourself some of the most important questions?
   
  • Who really cares about this subject, and how many potential visitors can I expect?
  • How much competition am I facing?
  • What can I do to bring the marketplace to my door?
  • Is this a profitable niche?

  Just because you’re all excited about something doesn’t mean someone else will be. What you create has to be interesting, compelling, remarkable and marketable. Otherwise, you’re not going to attract and retain loyal readers, and you won’t have a foundation for making revenue. Spend lots of time thinking about what you’re going to create, how you’re going to fit into the marketplace of products, services and ideas, and how you’re going to capitalize on your web presence.

• Quality content – no serious visitor will ever be interested in pedestrian level content. Your writing has to be good and attractive. We’re talking about knowledge, insight, a good “take away” for your readers, ease of reading, respect for their time, and something appealing like photos, audio and video. Getting good content together requires time and effort. You can’t simply highjack someone else’s stuff and expect readers to place trust in you – the highjacker.

  One of the advantages of the Internet is it levels the playing field – you can have your own brand and compete with others. Therefore, you need to show your visitors who you really are. They need to understand what your brand means and why they should trust what you say, advertise and sell. That requires your voice across the content of your site. Create quality content that has your own voice, and you’ll engender trust among your readers. That means they’ll be more likely to return for additional doses of you, and that ups the chances that they’ll be contributing to your revenue streams as well.

• Promotion – so you have good content, you’ve been around for a while, you have a good subject for your site, and you’re search engine friendly, so that’s about all you need, right? Not quite. You’ll still not be “taking off” like you could unless you actively promote your site. There are many ways of promoting your site. Let’s look at just a few of them.
   
  • Blog carnivals
  • Guest posts
  • Blog comments
  • Article marketing
  • Expert article sites
  • Contributing to “answer” sites
  • Starting a complementary blog/website
  • Print publications
  • Ad campaigns
  • Discussion on forums

  Just when you thought you were finished with all the work, it seems that the job of promoting your site is as big as building the site, and there is no end in sight. That’s about right. It’s a big job that never ends until you’ve gone viral and your site popularity is such that additional traffic is self generating and in the range that you’re satisfied with. Even then, you need to keep monitoring your traffic and revenue to make adjustments in response to the ever-changing marketplace on the web.

  Two of the big keys to promotion are to make your efforts provide you long term payback, and to be certain that you’re promoting something worthwhile. Examples of long term payback would be “evergreen” articles and blog comments that stay on the web for years and point back to you and your web presence. And, when your promotional activities are effective in bringing traffic to your site, you’d like the visitors to “stick.” That’s where good content comes into play, so start heavy promotion of the site after you have enough quality material to make it worthwhile for your visitors to stay, comeback, and recommend your site to their friends.

  If you’re reading between the lines here, you’re keenly aware that an online business requires good planning, dedicated effort, focus in and on the marketplace, smart work as well as hard work, and quite a bit of patience. In America we’re constantly fed “sound bites” and little video clips that don’t give us the entire picture of what’s going on. We’re also very accustomed to getting many things in a convenient package, perhaps something that’s instant and obtainable via a drive-up window. We need to forget about that and stay focused on the long view as any good business manager would do.

  Although running an Internet based business is different than a brick and mortar presence in the traditional marketplace, there are still many similarities between the two. A business plan is one of those similarities, and like any good business plan, we need to address various aspects of startup and operation, and that includes having realistic expectations about what we’re getting ourselves into.

  Clair Schwan is the host of Sensible Small Business Ideas, a website dedicated to encourage others to engage in self employment, whether on or off the Internet. He’s a big proponent of self employment simply because the only business you’ll really ever be part of is your own.

  Do you have an online business story to tell? Can you offer advice to someone running or starting one?

  ( Photo courtesy of danielbroche )
  ]]> http://outofyourrut.com/blog/2010/08/05/a-successful-online-business-requires-realistic-expectations/feed/ 8 http://outofyourrut.com/blog/2010/02/02/starting-a-side-business-why-now-is-the-time/ http://outofyourrut.com/blog/2010/02/02/starting-a-side-business-why-now-is-the-time/#comments Wed, 03 Feb 2010 04:43:39 +0000 Kevin M http://outofyourrut.com/blog/?p=898

  By Kevin M

  Unstable employment may be here to stay. 10% of the work force is now unemployed, and millions more are under-employed, working at temporary or part-time jobs. By some indicators the economy is showing signs of recovery, but globalization, advances in technology and rising healthcare costs have been gradually cutting away at employment long before onset of the Great Recession.

  In Multiple Income Streams to replace One Man-One Job?, we discussed different options to deal with the increasing unreliability of permanent, full-time, fully benefited jobs. Starting a side business is at the center of that discussion.

  Why start a side business?

  Even if your job seems secure at the moment there are a number of reasons you should be interested in having your own side business:

  1. Many of the jobs now in jeopardy were once considered “safe” only a few years ago. Banking was one of these, but we all know how that’s playing out now. Could your field be next?

  2. Even in jobs that are relatively safe at the moment, opportunities to advance have diminished. While your job may provide some security, you may need to look elsewhere in order to move ahead in your livelihood.

  3. Having an established second income could cushion the fall in the event of an unexpected layoff, freeing you to accept less than full-time work if necessary.

  4. Retirement. Few investment projections adequately account for the effects of inflation on future portfolio values. Relying exclusively or even primarily on overly optimistic retirement investment projections could leave us far less prepared than most of us assume.

  5. A solid second income could reduce the stress that comes with being dependent on a single source for your livelihood.

  6. Work for a living on your job, but a side business can offer an opportunity to do what you love.

  7. What starts out as a side business could grow into a future full time career.

  8. Any time we step into a new venture, we develop and expand opportunities and skill sets that weren’t available to us before we started. You never know what parallel opportunities could result from having a side business.

  Stop waiting for “someday”

  Who hasn’t fantasized about striking out on their own to start a business? What keeps us from doing it? A steady paycheck is one reason; a benefits package is another.

  You don’t have to give any of that up. In fact, being securely employed and dealing from a position of strength is probably the best launching pad from which to start a business. Keep your regular job and start your business as a side venture.

  To use a sports metaphor, think of your regular job as your defense where you fortify your household and don’t take chances. Your side business is your offense—the venture in which you take chances in favor of achieving long term financial independence or even real wealth.

  Choose a business that you would like to do—a hobby, a business that really interests you or something for which you have a natural talent. Many people work in careers they don’t particularly like because it pays the bills, or worse, because it’s what they’ve always done. Having a side business should be about preferences—doing what you really like. Think of it as an opportunity to break out and to try something fresh and new.

  Part of the reason you’ll want to start now is that it often takes longer than we think for a new business to start generating a positive cash flow. But start now, while you have a cash flow from your regular job, and you’ll have the staying power necessary to make the venture a success. Wait until you lose your job to start and the whole dynamic will shift from strength to desperation.

  Side business suggestions

  Here are some side business ideas just to get the creative juices flowing:

  • Tutoring. Were you a strong student in school? If so, you can tutor students or adults in a favorite subject. English as a second language is in great demand right now due to the influx of immigrants.

  • Blogging. Like to write? Have some great ideas? There are blogs on virtually every subject. Find one or two you like, visit blogs, leave comments and see how the process works. Get enough visitors to your site and you can earn income through ad programs like Google Adsense as well as affiliate programs. In addition to making additional income, blogging also offers a way to get your ideas out into the world.

  • Repair work. If you have knack for fixing broken things, a side business in repairs could work for you. Cars, houses, computers all need to be repaired and with the current emphasis on college norm careers, there aren’t always a lot of people around who can do that kind of work anymore. Start in your local area, and spread out from there.

  • Home remodeling. Given the weak economy and the even weaker housing market, a lot of homeowners are opting to renovate rather than move. I know a few people in home remodeling and they’re busier than ever.

  • Sell a product. . Most people work in service businesses these days and products often get overlooked. Find a product or product line that you believe in, that you actually use and can endorse without reservation Since most consumer goods are produced overseas, finding an inexpensive product source should be relatively easy.

  • Parlaying your full time job into a profitable sideline. Can you take the work you do on your primary job and turn it into a side business? This can be the easiest way to start earning money quickly and should be the first business type you consider.

  • Converting a hobby into a profitable sideline. Do you have hobby you really enjoy and where you’re really knowledgeable? This can be something you can blog about, earning revenue not only from ad sales on your website, but eventually from product sales related to your hobby.

  • Professional speaking/promoting. Most people have an almost mortal fear of speaking in public, which puts a natural lid on the number of people who do it. If you like speaking before groups, find out if there’s a way you can monetize that skill.

  • Pet care. The dual career household is now a cultural fixture, but who’s minding the family pet when everyone is at work or school? This is a business you can start in your own neighborhood—where you have credibility—then branch out as your referral base builds.

  • Web design/marketing. Websites and web marketing have become major advertising venues, so nearly every business needs help in this area. If you have skills in web design or web marketing your potential market is nearly the entire business community.

  You can come up with as many ideas as you have interests and skills, but the important thing is to get started now while time and circumstances are on your side.

  If you think that building a side business may be the right path for you, but you don’t know what kind of business to go into, check out my post, The Freelance Blog Writer Side Hustle. Blog writing is one of the most promising side ventures you can enter because it’s growing rapidly and has excellent potential to lead to still more opportunities. This post can help you get started if you think it could be a business for you.

  ]]> http://outofyourrut.com/blog/2010/02/02/starting-a-side-business-why-now-is-the-time/feed/ 11 http://outofyourrut.com/blog/2010/01/28/multiple-income-streams-replace-one-man-one-job/ http://outofyourrut.com/blog/2010/01/28/multiple-income-streams-replace-one-man-one-job/#comments Fri, 29 Jan 2010 02:46:17 +0000 Kevin M http://outofyourrut.com/blog/?p=884

  By Kevin M

  You may be employed at the moment; in fact you may even be well-employed. But look at many others around you and what do you see? With millions unemployed, millions more under-employed, and hundreds of thousands of jobs being outsourced to lower wage countries, what does the future of employment hold? Is it possible that the sun is setting on the traditional one man/one job model of employment and income?

  Before dismissing the possibility, consider that only 40 years ago tens of millions of workers were employed in largely high paying, mostly unionized factory jobs. Just over 100 years ago the majority of Americans were employed in agriculture. Where are all of those jobs now? And if one man/one job is going the way of the factory job, what are our options?

  Developing multiple income streams may become a necessary reaction to an environment where the unemployed often return to the work force in lower paying jobs.

  
  In Survival+, Structuring Prosperity for Yourself and the Nation, Charles Hugh Smith introduces the concept of hybrid work:

  “…one finger in the wage economy, one in growing food, another in creative pursuits, another in trading childcare for eldercare, another in hedging/investing to preserve purchasing power, another in helping to develop locally owned distributed energy as either a technical innovator, an investor or provider of labor/supervision and yet another in local schooling.”

  While I’m not going to follow this definition to the letter, I am going to use it as model in developing a practical outline on how each of us can broaden our income bases and provide ourselves with a measure of employment and income security that the traditional one man/one job model is increasingly failing to provide.

  Start a side business—now!

  Multiple income streams are at the heart of hybrid work. Anyone can and probably should have some sort of business, at least as a sideline. At the core of self-employment is learning to trade with others, a basic skill we need to get reacquainted with.

  First don’t quit your day job. Second, think about what you actually like to do, what you truly feel passionate about. You work at your day job to pay the bills, now do something you feel good about. Passion will drive you to keep at it when failure seems inevitable. A lack of passion will doom it to failure.

  Get started now, and don’t worry about making money—it’s typical that new ventures don’t make money for months, a year or longer. But that’s why you keep your day job. Play at it for a while and learn the ropes.

  Even if your day job looks safe, you want to start the venture as soon as possible so the business will be rolling at a future date when your job situation may look less certain, or when you just might feel like pitching the job to become a full time entrepreneur.

  Develop a web presence

  The internet offers an inexpensive way to market products and services, but equally important, it opens up virtually the entire world as a potential market. Operating without it is the equivalent of looking for a job without a drivers license–there are just so many jobs on the bus route.

  Set up a simple website or weblog for any purpose or topic you choose. Then get on Twitter, Facebook, Linked In or as many social media as you can. Take on one at a time and just start chatting and asking questions. Even if you don’t need it now, you want to have a web presence established for the day when you do.

  I started seriously working Twitter in mid-November, beginning with just seven followers and zero knowledge. But as of today, just two months later, I have over 700. If I can do this, anybody can.

  700 followers is chicken feed; many Twitter veterans have thousands, even tens of thousands. Think of what you could do with 20,000 followers, or 50,000? Develop your contact base now, even if you have nothing to sell. When you do have something, you’ll already have a market in place.

  If you’re self-employed, look for part-time, seasonal and contract work

  If you already have a profitable business you’re ahead of the curve. But you’re also not immune to the cycles of perpetual change that technology and globalization are imposing economy wide. Also, many businesses are seasonal, having busy peak seasons followed by frightening lulls. Part-time, seasonal and contract work may be a way to even out the income flow and, just as important, broaden revenue sources.

  Optimally the wage arrangement should be in a business unrelated to yours, so that if your industry tanks you’ll have a cash flow and a “next career” to go to.

  I was on the front lines for the mortgage meltdown, and when the industry started going down there were few opportunities to remain in the business, and the lines to get them were extremely long. Some pre-positioning would have made the descent easier.

  Join and participate in networks

  This is how you keep you’re ear to the ground. Join network groups related not only to your business, but also to any business you think you might be interested in. It’s an opportunity to find out what’s going on “out there” in the real world that’s happening behind the often oversimplified version the media reports.

  Broaden your contacts, find people who are doing what you’re doing (or want to do) and “swap recipes”. It’s amazing what information can be gathered from casual contacts.

  Seek soft barter arrangements

  Let’s say you can do web design and you have an acquaintance who fixes cars—can you find a way to swap services? Inventory your skills and think about what people in your orbit can do; are there any barter opportunities?

  Develop a “hands-on skill”

  People who can produce or fix things often have the greatest job security. Ours is a world of machines, and all of them break or need service sooner or later. Being one of the people who can keep them going is a solid start to a side business.

  You don’t need to be a jack-of-all-trades; a single skill can open up barter arrangements or a second income opportunity. A guy in my neighborhood started fixing things for neighbors; in a short while he was doing it for money. After he lost his IT job, he went full time as a handyman, and has been at it for several years. Because of the real estate bust people are fixing their homes instead of moving, and his business is booming.

  Actively search for new opportunities

  While others are lamenting the bad economy, see the world as a cornucopia of fresh ideas and opportunities and be prepared to move on short notice. The world economy is moving very fast; as one income opportunity fades, be ready to replace it with a new one.

  Live beneath your means always

  Many opportunities are available to those who travel light in life, unburdened by outsized mortgages, late model cars and other trappings of the high cost lifestyle so many aspire to. Seek enjoyment in freedom, simplicity, people and meaningful work.

  Save and invest intelligently

  A healthy bank balance means more opportunities and better sleep. We all need more of both. If you have two or more income sources, you may be able to allocate one specifically for savings. Savings can even out an erratic income stream and free you up to take chances that debt surfs can only dream of.

  Be conservative in your investing; two stock market crashes in the last 10 years should cure us the desire to put 80-100% of our money into risk investments. Take your chances in the business world, not with money you’ve already earned and may need to pay bills with one day.
   

  It may not be possible to take on all of these activities simultaneously, but they can be integrated over time. Pick one to implement immediately, then one add each month or two as your circumstances warrant. There is no goal line here, forward motion is the key.

  How do you see the economy playing out over the next few years? Do you think the end of one man/one job is a possibility? What are you doing to stay afloat and find new opportunities?

  ]]> http://outofyourrut.com/blog/2010/01/28/multiple-income-streams-replace-one-man-one-job/feed/ 12 http://outofyourrut.com/blog/2009/12/07/cultivate-multiple-income-sources/ http://outofyourrut.com/blog/2009/12/07/cultivate-multiple-income-sources/#comments Mon, 07 Dec 2009 10:48:40 +0000 Kevin M http://outofyourrut.com/blog/?p=386

  STRATEGY #5 TO SURVIVE A DOWN ECONOMY

  By Kevin M

  In the dreary job market of the moment, people are having difficulty with two major areas in particular: keeping a steady income flow and increasing that flow. The increasing level of unemployment is not only eliminating jobs, but it’s also putting a lid on raises and promotion opportunities. This is in large part, the driving force behind the credit crisis and the epidemic of foreclosures and bankruptcies. Is there a way to deal with it without taking unnecessary risks?

  In 10 Ways To Survive a Down Economy (published on Christianpf.com June 1) we listed ten strategies to help us deal with the bad economy. Our topic for today, Strategy #5:

  Be prepared to cultivate and balance multiple income sources. You may have a full time job and a part time business, or vice versa. Think of your work in terms of an investment portfolio, in which diversification adds strength. There are probably several jobs you are potentially good at; always be on the lookout for new opportunities.

  Why increasing income or broadening the income base matter

  
  Recessions produce a storm cellar mentality, a time when most people become concerned primarily with keeping what they have. But even if you keep what you have—your job and your current income level—you’re still falling behind. Official consumer price index (CPI) numbers aside, most of us realize that it costs more to live each year. Health care costs, education, utilities, real estate taxes, auto insurance, car repairs and many other expenses that we pay for products and services we can’t live without have been rising much faster than published numbers suggest. Meanwhile, gasoline and food costs bounce in unpredictable patterns. And what about preparing for retirement? If it often seems overwhelming it’s because it is!

  If you’re in a job or business in which options to expand income are limited, it may be time to look outside the box for solutions. If you have a job that’s stuck in neutral, a part time job or side business may be the only way to increase your income. If you have a business already, it may be time to consider working in lines that are unrelated to what your business does as a primary function. If you can take on business lines that run in counter cycles to your main business, one for which peak season occurs when your mainline is in slow season, you may have found a solid way to even out your income stream.

  Additional income aside, adding multiple sources will help to strengthen your income base, making you less vulnerable to job loss or income declines. Just being involved in different lines of work can often open doors to opportunities that would never surface if you stay exclusively in your regular occupation. Think wide, rather than deep!

  I’m not saying that this is going to happen, but I will suggest the possibility…we may be on the edge of a time when job and income security can no longer be trusted to a single job or employer. We’ve known since well before the current recession that we don’t have anything like the job security workers enjoyed a generation or two ago. In fact, it’s now close to impossible to plan as much as a five year stint with one company with any certainty.

  It’s worth noting that major changes often take root in society years before they’re even identified and labeled. True, we’ve been operating in an environment of one worker/one job for decades, but there’s more than a remote chance that a change to multiple income streams is in the pipeline already. Recessions often amplify and accelerate trends that were developing before the downturn hits. We can’t know for certain if that’s the case right now, but it may be worth some preparation just in case.

  I’m having trouble keeping one income source, how do I get a second, or a third?

  While it might be tempting to throw up our hands and resign ourselves to the fact that the economy stinks, and there’s little to do but hold on to the job or business we have and hope to tough it out until the next recovery comes and lifts all boats—including ours—but is that a plan or just a hope? I’ll dare to suggest that we need to be proactive, even now when opportunity seems to be hard to achieve. For the following reasons there may be more opportunity out there right now than there has been in a long while…

  1. Many companies can no longer afford full time employees and are hiring part timers and outside contractors
  2. With large numbers of people unemployed and underemployed, non-traditional work arrangements are becoming more common and accepted than ever
  3. Un-/under-employment is advancing networking as the unemployed and marginally employed band together seeking opportunity
  4. The internet has enabled would-be entrepreneurs to market to people across the globe at relatively low cost
  5. In nearly every industry, large enterprises are in retreat, opening markets to upstarts and smaller competitors who can offer a better way
  6. New trends—like thrift, energy efficiency, and cleaning up the credit mess—are emerging creating opportunities that didn’t exist two years ago
  7. Financial hardship is causing both people and organizations to seriously consider new ways of doing business that they wouldn’t have entertained in more prosperous times

  Each of these factors represents a single overriding dynamic: change. And each presents an opportunity either to stabilize or increase our incomes.

  Worried that you job is in jeopardy? Offer to stay at your current job at reduced hours, making up the income loss with a similar arrangement with another company. Did you try a business idea a few years ago that didn’t make it? Maybe it’s time to dust it off and try again—a lot of the competition has quietly disappeared. Have a product or service that you haven’t had much luck selling locally? Maybe you were thinking too small; start a website, link it to other websites and try peddling to the whole world—you can have a marketing budget of zero, which will give you the staying power to keep at it until it works. Not having any luck finding a new job? Get connected with anyone and everyone you can on the social networks—Facebook, Linked In, etc.—and start looking for an *opportunity* rather than a job.

  The point is, part time jobs, job sharing, contract arrangements and side businesses are out there, but require a bit more thinking than in the past. Start looking at situations from outside the box, and the opportunities may be more obvious. The part time side business you start today—yes, right here in the middle of the worst economy since the Great Depression—may be your full time career a couple of years from now.

  ]]> http://outofyourrut.com/blog/2009/12/07/cultivate-multiple-income-sources/feed/ 4 http://outofyourrut.com/blog/2009/12/05/start-and-grow-your-nest-egg-even-if-your-broke/ http://outofyourrut.com/blog/2009/12/05/start-and-grow-your-nest-egg-even-if-your-broke/#comments Sat, 05 Dec 2009 11:02:41 +0000 Kevin M http://outofyourrut.com/blog/?p=415

  By Kevin M

  If you’re living paycheck-to-paycheck, and struggling just to get by each month, that situation won’t improve until you reach the point where you have a cushion to back you up. You might think that the pressure would be eased by an additional income source, but the problem with higher income is that in a short time it tends to get swallowed up by Lifestyle Inflation—the more we earn, the more we spend.

  Some financial types recommend paying off high interest credit cards before beginning a serious savings account. They cite math equations pointing out the numeric absurdity of carrying high interest credit cards (13% or more) while earning close to nothing in interest (1-2%) on savings. On paper, backed up by numbers, this looks very compelling.

  
  But I disagree. Completely. Life is not a math equation! You will not wean yourself from credit cards until you learn to live without them! And you won’t be able to live without them until you become fully self-financing. That will mean living at least a little bit beneath your means and having a pool of savings to tap for the things you now charge on credit.

  Filling an empty bank account

  The most important step is to get started. Most people don’t have savings because they’ve never made that crucial first step. That step can be more effective if it’s accomplished quickly, that way circumstances (and fatigue!) don’t wear you down before you accomplish your goals. The following will help you to get some money into your savings account in anywhere from a few days to a few months.

  Sell your stuff Most of us have garages, basements or spare rooms overflowing with stuff we seldom or never use. Sell as much as you can. Take the better stuff, those items small in size but relatively high in value, and sell them on Ebay (see Marsha Colliers’ Starting an Ebay Business For Dummies if you’re unfamiliar with the process.) Everything else, sell through a garage sale. You’d be amazed the “junk” you have that someone else might be willing to pay a few bucks for! You can probably raise several hundred dollars doing this.

  Sell your BIG stuff Selling stuff usually isn’t a big deal, but selling big stuff is where things get tough. By big stuff, I mean a second car (if you can get by with one), boat, motorcycle, ATV, camper or even a second home. If you’re struggling with finances and you’re serious about getting out from under, anything that isn’t necessary to your survival has to be fair game. Ask yourself which would give more peace of mind, the big thing or an equivalent amount of money in the bank? My money is on the bank; get your financial house in order, and you may be able to buy a bigger, better replacement later.

  Bank a bonus We all have almost limitless needs and wants for our money, and that will never change. But what has to change is your determination to take control of your finances. Since you’re accustomed to living on your regular paycheck—even if it’s a tight squeeze—when you get a bonus, immediately deposit it into your savings then forget you ever had it. Doing without some of your income is the only way to become a regular saver; that’s often easier to do with income windfalls. The sudden boost in your bank balance should also be a great motivator to keep the cycle going.

  Take a part time job—temporarily. While it would be admittedly difficult to work full and part time jobs simultaneously for an extended period, doing it for a few months might be very doable. Get a seasonal part time job, working it just for a few months so you can juice your savings account. The trick is to continue living on your regular income while putting the checks from the part time job straight into the bank.

  Make minimum payments on credit cards and redirect the extra to savings. A lot of financial people advocate making more than the minimum payment on credit cards as a way of accelerating payoff. That makes abundant sense, but if you’re looking to build a savings cushion so you don’t have to rely on credit in emergencies, it might be better to make minimum payments on the cards, directing the extra that you would pay into the bank. This isn’t a long term plan, but only something you’d want to do until your bank balance reaches a level at which tapping the credit cards would no longer be necessary.

  Forego some luxuries until your savings reach a desired level Often, our money isn’t finding it’s way into our bank accounts because we have some expensive hobbies and past times. Try giving up your golf game for a few months, canceling some memberships you have, or going cold turkey on buying new computer games. We’re not talking about cutting necessities here, but preferences. This isn’t forever, but in a few months time you can probably save several hundred dollars without even leaving your house! If you’re bored, just think about how much more you’ll enjoy your golf game when you’re back out on the greens playing, knowing you have money in the bank. Is that worth waiting for?

  Go on a spending diet. This is a variation of the suggestion above, only you’re not targeting any specific outlays. Look at your entire household budget, and decide to cut your expenses across the board for a few months. If your household budget is $4000, and you can cut it by 10%, you’ll save $400 for one month, $1200 for three. You can cut some expenses less, others more, but the key is to hit the overall target.

  Take on a side project or contract job There are all kinds of jobs we can take on depending on our talents. You can take on special projects at work, or contract for another company on the side. You can cut a neighbor’s lawn for the season or paint a friend’s house for less than a painting contractor would charge. You can tutor others in subjects you’re strong in, teach English to immigrants or offer instruction in a sport or instrument you play. Inventory your skills to determine what you can do here; everyone has skills in one or more areas that they can sell to others.

  Any one or a combination of the above would enable just about anyone to accumulate a few thousand dollars in just a few months. If you’ve never had a decent sized savings account, you might feel great liberation at seeing a balance sufficient to cover your living expenses for a month, or two, or maybe three. I’d be willing to bet you’d be a little less concerned about your pile of monthly bills and you’d be sleeping better at night too.

  Once you get a few thousand put away, you’ll begin to sense hope in your finances. You can then begin to build on that hope, first by continuing to save out of your regular income, even if it’s just a little bit, and also to resume paying extra on your credit cards. It’s amazing how much more quickly credit card balances go down when you aren’t adding fresh charges to them.

  In short order, you’ll begin to feel some control over your finances, and maybe even begin to envision…prosperity!

  How are you building your nest egg?

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