The Path to Become a Frugal Millionaire

Eighteen Creative Ways to Make Money for the Unemployed

2009-09-24T22:34:00.000-07:00

More Ways to Generate Extra Money

For most of my life I worked at hourly or salary jobs at big corporations. I quit full time work to raise our kids. Luckily I have never had to go back to a full time job. When my kids were little I made web sites just to keep from losing brain cells. Then I found out I could make money by putting ads on my web sites and that was it - no more full time work for me. Actually I do work full time, only it is in a spare bedroom and only whatever hours I want to work.

Part of making money from nonjob sources is that it just kind of requires a different mindset. Listed below are my creative ways to make money without a regular job.

Alternative Income Ideas

1. Take photos, upload them to stock photo sites, and get royalty payments when people buy your pics at places like iphotostock.com.

2. Write an ebook and have affiliates sell it for you for a share of the profits at Clickbank.

3. Clear out your clutter and have a garage sale, or sell your stuff on Ebay or Craiglist.

4. Make crafty items and sell them on Etsy.

5. Write articles, either for money upfront or a share of the ad revenue, at places like Hubpages, Associated Content and Squidoo.

6. Check your change for old, collectable coins.

7. Sell your old jewelry or other gold items at a pawnshop or precious metals dealer. (Don’t just send your money into to one of the web places that buys gold as their prices are often uncompetitive.) Shop around locally for the best price.

8. If your state has a bottle refund law, return your old bottles to the store for a redemption credit.

9. Go to garage sales and thrift shops and resell items on Ebay. There are actually people who do this for a living. The ones that I know of that make a full time income specialize in a specific type of product, like wedding dresses or body building equipment.

10. Turn your hobby into a business. The tax savings for small business owners in the U.S. are huge. You can set up your own 401K plan, deduct health insurance costs, and deduct business related expenses like your Internet cable fees, software, etc.

11. Write and self publish your own books at places like Lulu.com.

12. Make cool blogs or web sites and then sell them at flippa.com.

13. Cut coupons and sell them on Ebay. Check it out – there really is a market for this kind of service.

14. Enter free contests and sweepstakes. We have a retired friend who does this and has won all sorts of prizes over the years including a couple of all expense paid vacations to exotic locales. One of her tips is to listen to radio stations during the day that have call in contests.

16. Sell your old gift cards on Ebay before they expire or service fees erode all of the value.

17. Buy TIPS – Treasury Inflation Protected Securities. They pay interest rates guaranteed to keep up with inflation. (Because of taxes, they are best held in a tax deferred retirement account.) They are sold at auction 4 times a year. You can buy them without any sales charges through Fidelity.com.

18. Start a vegetable garden and grow your own food.

There you have it. Eighteen ways to make extra money all without waiting for someone to hire you.

Extra Income Resources:

40+ Alternative Income Ideas from Moolanomy.com

Five Ways to Create Passive Income at Genius Types

Tips to Make Money When You are Unemployed from Always Frugal

Creative Ways to Earn Extra Income

2009-02-18T11:59:00.001-08:00

With 401Ks imploding, home prices melting down faster than the polar ice caps, and jobs disappearing faster than the Amazon rain forest, it's not a bad idea to try to make a little extra income any way you can these days. Listed below are four easy ways to make some extra money each month.

1. Make your money work for you by moving your checking account to a high yield checking at a credit union. We went from making 0% annually at a local bank to 3.7% at a local credit union. If we keep $3,000 on average in our account, that is an extra $111 a year we will be earning in interest. Over ten years time we will have made over $1,110. plus $204.28 if we reinvest the money we save into the same account (assuming a 3.7% constant interest rate), for a total of $1,314.28. That is not a bad return on our time the few hours of time it is taking to switch over accounts.

You can find a list of high yield checking accounts at: http://bankdeals.blogspot.com/.

Your own 10 year savings total of switching to a high yield checking account can be calculated by using the periodic savings calculator at: http://www.hcuonline.com/HCU_Calc_PeriodicSavings.html

2. Make your own blog and earn income by putting ads on it. The blogger behind Get Rich Slowly (http://www.getrichslowly.com/) quit his day job when his blog started making $60,000 a year. I'm sure, as they say in the diet ads, that those results aren't typical. But for many people blogs could be an extra $100 or $200 a month in income. If you want to blog to make money and not just for fun or self expression, be sure to pick a topic that will attract ads. You can't just pick any old topic and expect to make money. A blog on reviews of car stereos is most likely going to make more advertising money than a blog about 100 different kind of egg recipes, because car stereos are expensive and something people will buy online, while eggs are an inexpensive, offline purchase.

The cool thing about blog income is that you can make money from ads while doing something totally different. Your ads still show 24 hours a day whether you are working on your blog, showering or sleeping. I just made a couple of dollars in Adsense money on one of my other blogs while I was taking out the garbage cans. Once I made fifty cents in the time it took to pull up my socks. I know these are small amounts but with enough blogs and enough time the income really adds up over the years.

Dan Lyons, who man wrote the now defunct, once famous Fake Steve Jobs' blog, laments in a recent article in Newsweek, that blogging isn't the road to riches. Well, I think that is partly true. Blogging about Steve Jobs probably isn't the road to riches, because people looking to read a funny blog about an eccentric Silicon Valley billionaire aren't necessarily in the market to buy anything. If Mr. Lyons, a technology writer, had written a blog about the best flash drives to buy online, his results may have been quite different, even if he had a lot less readers. If setting up your own blog seems too daunting a task, visit the site Always frugal for creative ways to earn extra income by wrtiting articles for other people's web sites and blogs.

3. If you have any unused gift cards lying around, those can be found money. In fact, it is a good idea to use them up now before the stores they are from go out of business. I found that out the hard way when Mervyn's started closing down. They refused to honor a $50 gift card I had gotten as a gift one Christmas, tucked in a drawer and forgotten about. The good news though was that I also had a Linen's N Things gift card that I sold on Ebay before it expired for almost full price, less Ebay expenses. The gift card was worth $50 and to my amazement it sold for $45, only $5 less the original value.

4. If you pay your charge cards off each month, then reward cards can help to make a little extra income each month. I have Amazon personal and business rewards VISA cards. With the cards I get 1% back on the regular purchases, and 3% back on Amazon purchases. I'm a member of Amazon prime, so I don't pay for shipping costs, after my once yearly prime fee. (I order from Amazon on a weekly basis including many staple items, so for me the Amazon prime fee comes out to less than $1 shipping charge per order.)

Recently I bought a GPS for my husband as a gift. The one I wanted was on a coupon sale at Costco, but I actually ended up getting the device cheaper at Amazon because of the 3% VISA card rebate on Amazon purchases, the free shipping from being in the prime club and no sales tax on my purchase. Plus with Amazon I didn't have to even go to the store. I ordered the GPS online and the package was delivered right to my door 2 days later. I'm self employed so to me not having to take time out of my day to go to the store is worth a lot, in addition to the amount I saved on the GPS itself.

I also use my rewards card for groceries these days. I spend at least $200 a week at the grocery stores, so by using my VISA rewards card that gives me an extra $104 a year in Amazon gift certificates (which I use to order seleted bulk grocery items from Amazon). Over ten years switching from cash to my rewards card for groceries alone should earn me an extra $1,040 of Amazon goods. It only took me a few minutes to apply online for the Amazon cards, so $1,040 in gift certificates over ten years is a pretty good return on my time.

How Rich Are You, On a Global Scale?

2008-11-30T12:08:00.000-08:00

There is a site where you can enter your income and find out how rich you are compared to other people in the world. It is at http://www.globalrichlist.com. If you live in the U.S. and are feeling poor, it might help put things into perspective a bit.

Financial Tips for Couples

2007-09-13T22:05:00.000-07:00

If you are married and both work, try save at least 20% of your income. If you can do it, live off one income and save the other. Read the book The Two Income Trap for some interesting insights on how easy it is to get into financial trouble when your fixed expenses depend on two incomes. If you can find a way to live on one income, then if one spouse loses his or her job, your family still has one income coming in and you also should have a nice savings cushion built up from when both spouses were working.

How Many Hours of TV Do You Watch Per Week?

2007-09-13T17:08:00.000-07:00

"Man must make his choice between ease and wealth; either may be his, but not both." - Newell D. Hillis

Cut out, or at least back, on TV. The average person spends 4 hours a day (28 hours a week) watching TV! That is 1,460 hours a year. Over ten years a person could use that time instead to get an advanced degree, start his own business, or become an expert in his field through extra study and training time.

Always ask yourelf, is what I am doing right now going to make a difference in a year or two? If you really want to get ahead in life, in most cases TV viewing, such as watching mindless sitcoms with laugh tracks, simply isn't the best use of your time.

Pick the Right Career

2007-09-13T15:43:00.000-07:00

As Confucius said, "Find a job you love, and you will never have to work a day in your life."

Whether you are an employee or self employed, try to go into a low competition, high demand field.

Invest in a good education in a high demand field, but if you can help it, don't go into debt to do it unless there is a relatively certain payback, such as with a medical degree. In general, the higher level of education you have, the more money you will make. However this can vary depending on the field you are in.

A good article on which degrees are worth the money is, "Is your degree worth $1 million -- or worthless?"

Also the article "The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings" is a good read and shows the average incomes for different education levels.

Develop Your Own Business

2007-09-13T09:23:00.000-07:00

Self Employment

Start your own business. In the book, The Millionaire Next Door, two thirds of the non retired millionaires owned their own businesses. I believe there are two main reasons why so many millionaires are self employed. The first is that when you own your own business, there is no upper limit on how much money you can make. If your business does well, you can double or triple your income in a year. Self employed people don't have to work hard for a 3% merit raise. The second reason is tax deductions. The tax laws in the U.S. allow for many more tax deductions for business owners than they do for people who earn W2 income, thus allowing them to shelter much of their income from taxes and freeing it up for investments instead.

Living the Frugal Life

2007-09-11T22:54:00.001-07:00

"The wisdom of life consists in the elimination of nonessentials." - Lin Yutang

My Best Frugal Living Tips

Don't try to keep up with your neighbors' possessions. Your neighbors with the Jaguars and Beamers in the driveway might have leased cars and could be up to their eyeballs in debt. Many people in the U.S. are not saving enough and have too many debts. If you want to be rich you can't follow the herd because most of the people in the herd are never going to be rich.

Related link: Luxury Homes On The Block.

Don't spend a lot of money on the latest fashions that will be out of style next year. Buy basic, well made clothes you can wear until they wear out.

Buy modestly priced new or slightly used cars with good repair records and drive them until they wear out. A used Honda can go the speed limit and get you to your destination just as effectively as a Jaguar. The Honda also will depreciate less, cost less to repair and less to insure.

Related Article: The Real Reason You're Broke (hint - it might be your cars) - a good article from MSN Money

Always think of costs and gains of purchases and investments over a ten year or more horizon. An extra $10,000 spent today on a new luxury car means a lost opportunity cost of investing that money. At an 8 percent return, a $10,000 lump sum invested today would be worth around $20,000 in nine years. (An easy way to remember this is the rule of 72 - divide 72 by the interest rate and that will give you approximately how many years it will take to double your money.)

Books to Help You Become Wealthy

2007-09-11T10:18:00.001-07:00

"Even a millionaire will ease his toils, lengthen his life, and add a hundred per cent, to his daily pleasures if he becomes a bibliophile ; while to the man of business with a taste for books, who through the day has struggled in the battle of life, with all its irritating rebuffs and anxieties, what a blessed season of pleasurable repose opens upon him as he enters his sanctum, where every article wafts to him a welcome, and everybook is a personal friend." - William Blades

Book Recommendations

Read the book The Millionaire Next Door. It is based on years of research by two professors who study the affluent for a living. You don't have to reinvent the wheel to get rich. Just study people who are already rich and try to do what they do.

Be sceptical of the advice in the book Rich Dad Poor Dad. It is based on only one person's experience, and to my knowledge it has never been independently verified that the person who wrote it was ever actually a millionaire before he wrote the book. The only thing I think the author is good at is having catchy book titles and being effective at marketing to gullible people. The author of Rich Dad, Poor Dad has many traits associated with the "big hat, no cattle" types (people who give the appearance of wealth but have low net worth) listed in the Millionaire Next Door. There are many logic flaws and inconsistencies in this book that people who want to get rich quick seem either unwilling or unable to pick out, perhaps because they want to believe so bad that the get rich quick advice, including the advice that I-don't-need-no steenking-education in the book is true. Study after study shows that for most people higher education lead to higher income levels.

If you are in debt now or struggling with how to manage your money, read the book "All Your Worth" and follow the advice.

Become an expert in your field. Contrary to conventional wisdom, recent research shows that most experts are made, not born. For tips on how to become an expert, read the book, Cambridge Handbook of Expertise and Expert Performance. For the short version, read this article from Fast Company, The Expert on Experts.

My Recommended Book List

The Millionaire Next Door
The Millionaire Mind
The Millionaire Women Next Door
Asset Allocation by Richard Ferri
The Cambridge Handbook of Expertise and Expert Performance
The Two Income Trap
All Your Worth
Asset Protection by Jay Adkisson and Chris Riser

Plan for Retirement

2007-09-11T00:30:00.000-07:00

Contribute as much as you can to your 401K and any other retirement plans at work, if you work for an employer. If you are self employed, work with an actuary to develop a pension plan that allows you to contribute the most amount of money you possibly can.

Think twice about rolling over your 401K plan when you retire or change jobs. Most 401k plans for businesses with employees are covered by ERISA laws, and are generally protected assets in case of a bankruptcy or lawsuit. IRA plans may or may not be protected, depending on the amount in your IRA and the laws of the state in which you live. Most brokers and mutual fund reps will try to get you to roll over your money so they can manage it for you, but for many people it may be more secure to leave your money your employer's 401K plan.

Related link: IRAs Could be Fair Game in Lawsuits

How to Become Wealthy - The Slow Way

2007-09-10T00:43:00.001-07:00

"A penny here, and a dollar there, placed at interest, goes on accumulating, and in this way the desired result is attained. It requires some training, perhaps, to accomplish this economy, but when once used to it, you will find there is more satisfaction in rational saving than in irrational spending". ~ The Art of Money Getting, by P. T. Barnum

Investments

Invest your money in assets that tend to appreciate over time like stocks, bonds and your house. Minimize your investments in assets that depreciate, such as furniture and boats.

Dump your stock broker and invest your money in low cost index funds. Most professional money managers cannot beat index funds over time, due in part to the law of averages and in part due to transaction costs associated with buying and selling stocks. You will also generally save money on taxes with income funds by minimizing your short term gains, which are taxed at a higher rate than long term gains. Studies show that in a given year index funds beat 80% of the managed funds, and those number don't even take into account the higher taxes people tend to pay on managed funds due to a much higher portfolio turnover than index funds. So there is no logical reason for most average investors to hire a professional money manager. For a good article on this subject, read The S&P 500 Index Fund from the Motley Fool.

For most people it is not a good idea to hire a financial advisor whose only job is to find someone else to manage your money. If you pay this "finder" advisor 1% of your assets and the actual manager another 1% per year, then that is 2% of your assets going to nothing but management fees. You can invest in a fund like Vanguard 500 Index fund for a management fee of less than .2% per year instead, a saving of 1.8% per year on management expenses. As of the writing the Dow Jones Industrial Average had a ten year return of just under eight percent, so 2 percent in management fees is a huge percent to have to make up. With advisers with fees like these, after inflation and taxes, you would be getting almost no real return at all. At 2% fees your money money managers would have to outperform the market by almost 25% just to break even with an index fund in order to make up for their costs. Because of this, study after study shows that over time most managed funds simply cannot outperform index funds.

Diversify your investments. The best book on the subject that I've read is Asset Allocation by Richard Ferri. Books on asset allocation by William Bernstein are also popular, but I personally found his writing style to be condescending and closed minded. I thought the Ferri book was more professionally written.

Strive to generate passive investment income. Passive investments are investments that make money with little or no effort on your part. These may include stock, bonds, CDs, book royalties, ebook sales, and possibly web site income (if you have a low maintenance site). Some people include real estate as a passive investment income, but to me buying, selling, maintaining and insuring rental property takes a lot of work. I was really excited awhile back when I made a small web site that started making $4 a day. One of my friends thought I was crazy to be so excited over $4. But that web site only took me an afternoon to write, and it is evergreen content that will still be valid for years to come. In the last few years I haven't changed the site very much, yet it has made several thousand dollars. That is a pretty good return for not too much more than one afternoon's work.

Home Ownership

Buy a house in an appreciating area with good public schools and live there a long time. It costs a lot of money to send your kids to private schools. It also costs a lot of money to move due to moving costs, realtor fees, closing costs, disruption to your life, time spent moving instead of working on your business, etc.