Tag Archives: cash

Three Ways You can Make Side Money This Year

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Most folks in the U.S. struggle with money. Whether that means they don’t know what to do, or they don’t have the discipline to do what they know. Whatever the reason, there’s no doubt that often an extra flow of income can help bridge the gap between making your goals and falling short.

The following are three ideas of ways you can make money this year and every year after:

Plasma Donation

This is often one of the toughest ways to make money, especially for those who faint a the sight of a needle. I know for me personally I used to literally walk out of movies that had needle-type medical scenes.

However this past winter I have been overcoming my fear and at the same time making decent money! I have made about $300 in the past month with limited time commitment as well as gaining confidence in myself. (Not to mention plasma donation is literally saving lives.)

I have found you can make about $40 to $45 per day on average for just an hour or two, depending on where you go and the bonuses they provide.

Online Ads

If you have a blog, youtube channel, or some other form of online website, you are able to add ads and make the site profitable. This obviously doesn’t happen over night. But given some time, you will be able to make some extra cash.

I have recently set up an Adsense account and am working on creating an extra income stream from writing.

Online Resale

If you’ve ever gone to a thrift store, or bought something on craigslist you know that it’s possible to buy online and resell for a profit. While there are no guarantees, it’s definitely possible to develop a niche and eventually make decent money with limited time commitment.

Conclusion:

There are no clear answers to the income question. Ultimately income alone won’t improve your finances. Managing the money you have is a first step. But for many people extra income is a massive boost. For those people this might be the push that you need.

3 Things Young Adults can do to Prepare for Their Future

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As millions of young adults enter the workforce, finish education, and begin a life of financial responsibility, there are many of us who have a lot of uncertainty for the future.

The following are three key things to anticipate for the future:

An Older, More Diverse Population

Let’s face it, as time progresses there will be more and more old folks in the economy. This isn’t necessarily a bad thing (after all, someday we’ll be those old folks), but this is just one more thing to anticipate in the future.

In addition, there will likely be more ethnical and gender diversity. More and more women will enter the workforce, as the population of African Americans, Hispanics and Asians increases in the U.S..

These are all positive changes. Not only will we be experiencing more diversity of creed, religion, nationality and ethnicity, but we will also be seeing more and more women in the workforce. This is all at a time when we are living longer and longer.

More Technology and Automation

Unless, in the unfortunate event the world enters WWIII, we will likely see continued progression of technology both in terms of software, like AI and automation and in terms of machines and physical advancement.

Key areas to keep and eye on are in the medical field, biotech, vehicle automation and AI. These massive changes will likely lead to an ever-evolving need for labor. Automation will likely destroy certain jobs forever, while technology will create new demand and new industries.

Potentially Higher Taxes

At this moment taxes are historically low. After the tax cut of 2018 there are many economists and financial advisors anticipating higher taxes in the future to cover our increasing deficit. While there is no crystal ball that can see the future, we do know that it’s unlikely for rates to stay this low forever.

That said, it would be prudent to plan for this by utilizing tax-advantaged accounts like Roth IRA’s and Roth 401K’s.

Conclusion:

Preparing for the future doesn’t have to involve knowing all the details. While you don’t have to know everything, you should prepare for what’s likely to happen.

The advice contained in this blog is meant to be taken at the reader’s discernment. Talk to your financial planner to see how the advice may or may not apply to you. Ultimately you are fully responsible for your finances so make sure you have someone who is willing to walk with you on your journey.

What is Personal Finance

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What is personal finance? And Why does it matter?

Those are two very interesting and important questions to ask as one either begins their life as adults, or being asking questions they’ve never approached before. For the past five months or so, this blog has predominantly been centered around personal finance, both the investing side, as well as the money management side.

I realized that before I continue this journey with all of you, I need to take a moment to explain what Personal finance actually is. Personal finance clearly deals with how individuals manage their money.

While the topic briefly touches on the analysis and performance of businesses and organizations for investment purposes, it predominantly centers around the individuals’ approach to managing each dollar in and each dollar out.

Personal finance answers questions like:

What are my financial goals? What use do I have for money? What should my investment approach be? How much do I need to be saving? How large should my house purchase be? Should I buy this trinket or save the money?

Many of these questions are simply answered through quiet reflection or by asking your friends and family for feedback. However, some of these more complex questions like how to invest your money, or how to craft a financial plan can often be better answered by a financial advisor.

Why does personal finance matter? 

There are three basic reasons why you should pay attention to your finances:

1. Money has impact

2. Money can be complicated

3. Money is emotional

While we of course don’t have the time to go into the details of Personal Finance in one blog post, I hope this gives you a great picture of what this topic is all about.

Meeting A Different Donald: Real Estate and Ways to Invest

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Most people, if not almost everyone, has heard of Donald Trump. As the 45th president of the United States, he has been a real estate developer and the previous host of the Apprentice show.

But have you heard of Donald Bren? He grew up as the son of two relatively successful parents. His father was a movie producer and real estate developer like him. His mother was a civic leader. After majoring in Economics and Business a the University of Washington, Bren attempted at Skiing in the Olympics but had to quit due to an injury. In addition, Bren became an Officer in the U.S. marine Corps.

After that he took a $10,000 loan out in 1958, he began developing and flipping homes until he had built up a business which he sold. He started another one, sold it, and then took the proceeds to buy a third stake in the Irvine Company. He eventually bought the outstanding ownership and now has a net worth of over $16 Billion.

Donald Bren took one path to real estate. But there are others. I want to briefly cover the three main ways you can approach real estate investing.

1. Direct Investment

A direct investment in real estate, like what Donald Bren did, involves purchasing property either directly or through a business entity. Either you focus on property appreciation, resale, or cashflow. With these metrics in mind, you seek to partner with others to produce above-average returns over the long-term. This is what Bren did.

2. Indirect Investment

The second, more modern way to invest in real estate is less direct. With an indirect investment you buy a company that invests in real estate. Usually this is either a REIT (real estate investment trust) or some sort of real estate syndication.

3. Hybrid

The last option is some sort of mix. It involves partnering with others so that you own the real estate but you don’t necessarily control management of it directly. An example might be a partnership between a handful of people in which you own, say, 20% of the upfront investment. You put a shared investment with say, 2 other people. One person is in charge of management, and the other two people sit passively by but provide the capital.

A hybrid between direct and indirect is usually less risky but also less financially rewarding if your investment becomes a success.

Conclusion:

Part of investing in real estate is understanding yourself. How much involvement do you want? Often the answer is not much, but for those adventurous few, you never know, you might become the next Donald Bren.

Acquiring a Domicile: How to Rent an Apartment

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Most people have or will rent at some point in their life. What often comes up is concern about rising prices or lack of adequate amenities. These issues will always be a concern. However the following steps will help prepare you for a move into someone else’s rental.

1. Determine your Renting Criteria

As soon as you decide that you want to rent, you need to determine what you’re after. What kind of budget are you looking at? What square footage? What types of Amenities do you want? What are your needs verse what are your wants? In which location specifically does this rental need to be?

Answering these questions will give clarity, allowing you to start the next step…

2. Narrow Search to 10 Rentals

As soon as you’ve determined your renting criteria you will be ready to begin screening. Similar to how a landlord screens potential tenants, you will be screen potential landlords. Find ten places that most closely meet your criteria.

Some places you can find rentals include:

Pad Mapper, HotPads, Lovely, Trulia and Walkscore

3. Visit Your List and Come Prepared

With your list in mind you can begin visiting each one. To come prepared, bring a checkbook, wallet, or some means of payment in case they want to charge you for an application fee. Also bring proof of income such as a pay stub or other documentation. Lastly, you’re going to want a photo ID.

At this point you should be well on your way to both knowing which locations fit your needs, and entering yourself into the landlords application process. Assuming you meet the rental criteria, you will probably get one of your applications responded to within a week or to.

You’re on your way! I hope this helps you on your rental journey.

Dollar-Cost Average or Lump Sum into the Market?

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Dollar-Cost Averaging is the process of purchasing securities over an extended period of time with the same dollar amount each time. Lump Sum investing on the other hand, involves just putting all your money into the market at once.

For example if you’re wanting to invest $100,000 should you put it all in the market all at once or over a few months? Many people might suggest putting it in over a period of time. However my suggestion is that for most cases, the opposite is actually the wisest move. Let me explain.

If you were to run with the $100,000 example, a simple dollar cost average might look like putting $5,000 in the market for 20 months. The other scenario is just putting the $100,000 in right now.

In most cases putting everything in is a better move because on average, the market goes up most of the time. So if you dollar cost average, you’d, on average, be missing out on the growth by keeping your money out of the market.

In the smaller percentage of times that the market goes down directly following investment, then dollar-cost averaging can make sense. For example if the market has been Bullish for many years with PE ratios climbing, looking at dollar-cost averaging can make sense.

Before I finish, please click here to take a look at a blog page that covers many investment topics. He has a post from early this year that covers this topic concisely: Exploring Dollar Cost Averaging Verses Other Strategies

Thanks, hope you have a great day.

Becoming the Squirrel of Personal Finance: 4 Places to Stash Your Cash

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Most folks around the world understand the concept of saving more; you can only increase savings when you either increase income or decrease spending. However if instead of investing, what if one were to put the money into savings? Where should they put it? That’s what I’d like to explore.

When considering where to put your savings there are two main factors: Risk of Inflation, and Risk of the Need for Capital.

Risk of Inflation:

When you put money into savings there’s not really a real risk of losing your money to a drop in the stock market. That’s a good thing. But the risky part is that with slower interest and growth on your money, you’ll have a harder time keeping up with inflation. Often the savings interest won’t even be enough to cover the different.

Therefore with saving there is always a risk your purchasing power can do down.

Risk of the Need for Capital:

What if you put money in a CD (Certificate of Deposit) and find out a few days later that you need the money for an emergency?

First, at least some of your money should have been in a liquid asset for emergencies. But secondly, if you have to take the money out, a CD will usually penalize you. So you should always be aware of the chance you’ll need the money and what you’ll do if you do.

With those to risks in mind, the need for capital and inflation, let’s explore the options for saving:

Conventional Saving Accounts

These usually command the lowest interest rates because of the relative liquidity of funds.

Online Savings Accounts

These are online accounts that you set up in which you usually receive higher rates of interest because there isn’t any brick and mortar building to maintain.

Certificates of Deposit

These are the best for funds you’re sure you won’t need for a short period of time. For example if you know you’re going to purchase a car in 3.5 months, then maybe taking out a 3 month certificate of deposit isn’t a bad idea if it gives you are larger return of interest.

Conclusion:

Decide your reason for saving and how much liquidity you’ll need. If you can stomach tying up your money for months or even a year at a time, maybe a T-Bill or CD is worth it. Otherwise, consider a regular bank account or Money Market.

The Stock Market is Falling: What Should I Do?

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The last few weeks started as a few percent decline in the market. As gurus and commentators covered it, they viewed the decline as a temporary, week-long or even a few day-long event. However a few weeks later here we are, still waiting and wondering when the market will rebound.

As a long-term investor this is exciting for me. Not only have stock declined roughly –% from their high, they continue to fall to increasingly discounted prices. Everything might not be a bargain at this point, but after falling about 9% the market is a lot closer to reasonable pricing than it was a month or two ago.

So when prices drop like this, what should an investor do?  They should do what the best investors do – find good companies and buy them at favorable prices. This might mean waiting and watching for a good company to drop below your perceived value it.

But for index and active mutual fund investors slowing dollar-cost-averaging into the market may make the most sense. Understand that the market will come back. It’s just a matter of how quickly it does.

A Logical Approach to Getting into Debt

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The largest expense most folks in the U.S. incur is a home. When buying a home most Americans choose to take out a home mortgage. So how do you go about buying a home? I’ll share that with you in the steps below.

To be honest, I have never purchased a home of my own, however, I plan to. These are the steps I will take in a couple years when buying my first place. I also will incorporate the experience and knowledge I’ve learned from my Father who was both a home builder, carpenter and owner multiple times during my teen years and still is today.

Place and Purpose

Where and why you want to purchase a home are some of the most fundamental questions. For example are you wanting to buy in San Fransisco, CA? In that case you’re probably okay with a price range of $300K-$400K+. Thinking about Lansing, MI? It’ll cost you around $75K-$250K. These ranges are drastically different so deciding on where you want to buy is the first step.

Then ask, why am I buying? Maybe you intend to “house hack” and move out a year later to turn it into a rental, or maybe you want a quiet family home in the country that you can live in for 30 years. Maybe you just want a place large enough to house your aging parents as well as your growing family? There are many reasons for buying.

With those two things in mind, your location and your reasons behind buying, you are ready for the next crucial step, Financing and Finances.

Financing and Finances

Financing and Finances are the most analytical and numbers-based part of purchasing a home. First look at your finances. How much house can you afford? How much home do you actually want or need for your situation? In which ways will a home limit or help you financially?

Financing a home is fairly straightforward and complex at the same time. One one hand all you have to do is go to a bank, get approved for a loan, and then pick a house to buy right? While this is certainly the gist of it, there are most considerations and steps involved.

For example how much downpayment are you putting down? This will determine whether or not you need an FHA loan or conventional loan. What interest rate will you most likely have? What kind of monthly payment will that mean and will you be able to afford it? This kind of ties back into the realm of Financial analysis.

Comparing, Choosing and Closing

In you first step you decided on what you wanted generally speaking and where you wanted to live. In the second step you got approved for a loan and made sure you knew how much you were willing to spend and if you could afford it. Now it’s time to find a place.

First you’re going to need a realtor. This real estate agent will be able to help you locate properties in the area you identified. As they show you properties you will get a feel for the characteristics that you like and the ones you don’t. You’ll ask questions like, “would I  be willing to pay more for a pool?” Or, “Should I pay less for no garage?”

After looking at enough properties you will decide upon one or two that suite you. Get you Realtor to put in offer and you may have to negotiate a little. After agreeing on a price and terms (which is often a long process) you will come to sign the contract. As the day of closing comes near you will have to be aware of the following closing costs:

Realtor Commission

Property Appraisal Fee

Due diligence costs

Attorney fees

Other closing costs

These closing costs and others will usually range between 5% to sometimes even 10%.

Next you’ll have to start moving in, which is a whole different process. But for now I hope I’ve helped you develop a plan for your own home buying.

Building An Empire: Your Real Estate Investing Options

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Real estate investing has become a sexy topic for many real estate channels, blogs and books. There are those who say buying a home is a great financial step. However those who want to go beyond the typical goal of homeownership, there are a wide variety of options.

Direct vs Indirect vs Hybrid

When you first decide to put money into real estate, you have to ask yourself how much you would like to be involved in the process. For those who want to buy or manage property directly, there is direct real estate investing.

If you don’t want any part in the investment process you can consider the real estate indirect investment options. These are things like REIT (Real Estate Investment Trusts) and syndicated real estate funds.

The hybrid between indirect and direct investing is partnerships. With a partnership you find someone to either provide the money and credit or do the more involved part. Basically you only are require to take part in part of the real estate investing process, whichever you decide as partners.

Step 2: Picking your strategy

If you decide to invest indirectly into an REIT or syndication you will need to do research and decide on one. For those who determine on either a hybrid or direct investment approach exploring strategy is your next step.

There are many strategies out there like flipping, buy and hold, BRRRR method (Buy, Rent, Repair, Refinance, Repeat), property development, house hack and a few others.

Finally: Choosing your Property Type

After picking which strategy to deploy, you have to determine which kind of property you’d like to buy. Examples include single-family, multi-family (duplex, triplex and four-plex), commercial office, commercial retail, industrial, commercial residential (apartments)

Funding

The last step in acquiring property is deciding upon a funding method. There are a few ways to do this. You can either buy the property cash, which of course is less common, or you can buy one using other people’s money (OPM).

Funding a property using other people money can either come from a bank or somewhere else. If you’re using a bank to buy residential property there are two basic kinds of loans that are usually deployed, either a conventional loan or an FHA loan. The FHA loan is basically a loan that requires less of a downpayment in exchange for paying (PMI insurance).

With an unconventional funding source there are usually two places to get it from: the seller (called seller-financing) or outside places. Seller financing can be fairly straightforward but let me explain that the other outside sources of financing can come from friends, acquaintances, or private lenders.

Conclusion:

Whichever form of real estate you decide to buy, whatever strategy you decide to employ,  and whatever funding method us use to buy them, real estate remains a solid investment option. Real estate can be consider a reputable option up there with stocks and business ownership. Next time you’re thinking you want to invest use these steps to uncover your own real estate path.