Money Boss 2016: Year in Review

Wow! What a great year!

Despite some of the stuff I’ve seen from other folks on social media lately, 2016 was a fantastic year for me — and for Money Boss.

Personally, I had a lot of fun. Kim and I started the year in Savannah, Georgia during a hiatus from our cross-country RV trip. In late March, we hit the road again. We spent three months winding our way through the South on our way back to Portland. The experience was terrific. We had tons of fun, met a lot of friends (new and old), and even picked up a puppy along the way.

That puppy is both a blessing and curse. We love her, but she’s come to dominate our lives. I resented that at first, but have learned to mesh my life with hers so that I can once again be productive.

After months of grousing about not being able to find a schedule, I finally shut up and fixed the problem. After attending Ramit Sethi’s Forefront event in early October, I realized I was being just as bad with my business as some people are with their personal finances. I was making excuses instead of making things happen.

So, I spent a few weeks deliberately organizing my life and setting up systems. My goal was simple: After speaking in Ecuador in early November, I wanted to return to real life and treat Money Boss like my top priority. And that’s what I did.

For six weeks, I focused on creating as much quality content as I could for this site. During those 42 days, I produced twenty articles — about one every other day. At first, this pace was a struggle. But after I got back in the rhythm of things, it felt great!

Not counting this end-of-the-year roundup, I published 63 pieces at Money Boss in 2016 — or about five posts per month. These articles contained a total of 111,086 words, which is a bit more than Harry Potter and the Prisoner of Azkaban or The Adventures of Huckleberry Finn. The average article length was just over 1750 words.

This pace is nowhere near my former production at Get Rich Slowly. In the good ol’ days, I churned out about 40 articles per month and wrote nearly half a million words per year. (No joke!) But my goals here at Money Boss are different. For one, I want to have fun. I don’t want to burn out. Plus, I’m trying to focus more on quality than quantity.

The Best of 2016

Based on a combination of reader feedback and my personal preference, here are the best articles from Money Boss this year:

• What to do when the stock market crashes — My response to the doom and gloom scenarios promulgated by the mass media every time the market drops? Buy! The S&P 500 is up 20.41% since I wrote this article (and finished with a 9.54% gain for the year)
• The millionaire mindset — A quick survey of 53 habits that foster wealth and success, as gleaned from authoritative books and articles.
• In March, I published what I think are two of the best articles I’ve ever written: How to build confidence and destroy fear and How to be happy and lead a meaningful life. The material here forms the core of many of my talks. I still need to finish the final part of this trilogy, which is about personal and financial freedom. (Then I can compile all of this and publish a new ebook!)
• Speaking of ebooks: In April, I published the completely free Money Boss Manifesto [3.6mb PDF]. This “brief guide to financial freedom” collects all of the core material from the Money Boss crash course into a convenient PDF. I don’t even ask you for an email address because my goal is to get this into the hands of as many people as possible.
• In July, I published a rant about how traditional retirement advice is wrong. It makes zero sense to base your planning on income; you should base it on expenses instead. While this received a lot of positive attention, I also got some excellent constructive feedback from smart folks I admire. That feedback didn’t change my mind, though. I still think it’s stupid to base financial planning on income instead of spending.
• A month ago, I wrote about the five types of retirement: traditional retirement, early retirement, temporary retirement, semi-retirement, and mini retirements. Since then, I’ve been on an informal quest to write about each type of retirement in more depth using a popular book as a example.
• Finally, last week I published a piece explaining social capital: What is it and why should you care? From my experience, social capital is just as valuable as financial capital — sometimes more so. Because this is such an important idea, I wanted to write about the basics so that I can refer back to them again and again.

Perhaps the high point of 2016 — personally and professionally — was when Money Boss won the Plutus Award for best new personal finance blog at FinCon16. I’m honored.

My work here involves more than just writing. I also meet regularly with readers and colleagues. And, of course, I speak. This year, Mr. Money Mustache and I presented a three-hour workshop at World Domination Summit. I also made my annual trek to Ecuador for the chautauqua on wealth and happiness.

In 2017, I plan to do more of the same. In a couple of weeks, I’ll fly to Florida for Camp Mustache Southeast. (My topic is crafting a personal mission statement. I hope to share a written version of the presentation here at Money Boss.) In July, Paula Pant and I will present a joint workshop at World Domination Summit. And, as always, I’ll be back in Ecuador to talk about money and well-being in the autumn.

Company Financials

After several years of dormancy, my business is beginning to earn money again. I guess it’s been earning money right along, but mostly it’s been passive income (which is the Holy Grail for some people). In 2016, I actively took steps to generate revenue in the future.

This year, my business received $4,233.36 in revenue. Not a lot, I know, but not bad considering I’m not passionately pursuing income just yet. Here’s where that money came from:

• Personal Capital — $200.00 (earned when Money Boss readers sign up for their service through my link)
• Your Money: The Missing Manual — $570.74 (earned for sales of my 2010 print book — I get about a buck a book)
• The Get Rich Slowly course — $2,729.60 (earned for sales of my 2014 course produced with Chris Guillebeau — I earn between 20% and 40% of each sale)
• Amazon — $324.81 (earned when you folks use my Amazon link to buy personal finance books and other stuff)
• Google — $403.87 (in October, I introduced Google ads to Money Boss)
• Killer Aces Media — $4.34) (years ago, I contributed a single chapter to the Wise Bread book)

Out of curiosity, I looked at the numbers only for December. This isn’t money I received, but sales I generated. (Subtle difference but important.) For the programs where I can access numbers, the business has $398.54 in sales. I expect $100-$250 in sales from the programs where I don’t get to see the numbers. That means Computer Resources Northwest LLC generated between $500 and $650 in sales during December.

As a point of reference, this is about what Get Rich Slowly was earning in September 2006, six months after I launched the site. Of course, GRS had twice the traffic at that point! For fifteen months into Money Boss, I’m okay with where things stand.

Note: As always, I receive zero dollars for my speaking gigs. I do that stuff for free. It’s my way of giving back to readers and colleagues. I earn social capital for these events, not financial capital.

My goal for 2017? I’d like to triple revenue — and really I’d like to quintuple it. When I write this summary a year from now, I hope to be telling you my company has generated between $15,000 and $20,000 in revenue. To make that happen, I need to continue producing great material, do a better job of promoting it, and — especially — begin to incorporate more money-making opportunities at the site.

The challenge for me, though, is that I refuse to make money simply for the sake of making money. That is, I won’t compromise quality in order to make a quick buck. I’m not going to spam pop-up ads, post “advertorial” articles, or run obnoxious display ads that take over the site. And I won’t promote products unless I believe they’re helpful to readers. That means it’s a much slower path to producing income.

Fortunately, I’m in a position that I don’t have to make money. That’s one advantage of being Financially Independent: I can afford to take my time and do things in a way that feels right.

Coming in 2017

I’m excited about what 2017 holds for Money Boss and me. Personally, I’ve already begun to refocus on fitness, which seems to be a perennial challenge for me. I also intend to track every penny I earn and spend so that I can (a) be certain I’m living within my means and (b) cut back on some of the areas that have gotten out of control. (Examples? I’m guessing alcohol, Amazon, and iTunes.)

As I track my personal finances, I’ll share that data here at Money Boss as one of two ongoing projects. I want to document what it’s like for somebody in early retirement to manage their money, balancing the “fixed income” aspect of things with actual wants and desires. My other project this year is to launch another blog and write about the process. My hope is to show how average folks can make some side income online.

Finally — and most importantly to you, the Money Boss readers — I want to publish ten articles per month at this site. Maybe more. That’s twice my output in 2016, but I think it’s doable. (The last six weeks have proved that!) I want one or two pieces each month to be long and thoughtful, but I also want to get into the habit of highlighting weekend features — reader questions, Money Boss Theater, reader stories — and quicker-to-produce reaction pieces during the week.

The bottom line is I’m pleased with how Money Boss has developed, and I hope you are too. As always, if you have questions or suggestions, please drop me a line. (You can leave a comment below or send me an email.)

Best wishes for you and yours in 2017. I hope the year is awesome for you!

The post Money Boss 2016: Year in Review appeared first on Money Boss.

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How I Use Evernote, My Most Essential Free Online Tool

A few weeks ago, I answered a mailbag question from Jim, who wanted to know how I use Evernote. I gave him an answer that almost stretched into something that needed to become its own article, but instead I cut it short and asked for readers to contact me if they wanted a full article about my uses for Evernote. Over the next few days, several readers contacted me requesting the article (and more than a few swapped some Evernote tips with me), so what follows is that requested article: a detailed guide to how I use Evernote, my most essential free online tool.

So… What Is Evernote?

Evernote is a simple digital tool that lets you keep and organize notes of all kinds – text, pictures, sound recordings, and mixed media. They store all of the notes for you in the cloud and you can access these notes from anywhere. There’s a very smooth app available for iOS, Android, Mac, Windows, and Linux, plus their website itself allows you to access and edit notes, so you can access them pretty much anywhere.

I absolutely do not recommend storing any valuable personal data in Evernote, but that’s not the purpose of it. The purpose of it, at least as I see it, is to serve as a mental filing cabinet for ideas and bits of information that you’re going to want to use and access later.

I personally use Evernote perhaps two or three dozen times a day. I’m not kidding or exaggerating in the least. It is such an essential part of my daily activity at this point that I would really struggle without it. For me, it’s a mix of an infinitely long pocket notebook and a filing cabinet with magic search capabilities that takes up essentially no space.

How I Use Evernote

I currently have Evernote installed on my desktop (where I do most of my writing), my laptop (where I write when I’m traveling), and my phone. All of them are synced up to the same account, obviously, so I can seamlessly share notes and access them between all of those devices. In the rare event that I need to access Evernote somewhere else, I can look at the web version, but I genuinely cannot remember the last time I did that.

“Things”

Throughout the day, I have one note in Evernote that’s constantly open and being added to; I call that note “Things.” In “Things,” I just add anything and everything as I discover it or think of it. I might add a photo of a gift idea for my son, followed by a quote that I read on some website, followed by an article idea for The Simple Dollar, followed by the Twitter handle and name of someone I just met along with a reason that I should follow up with that person, followed by an appointment three weeks from now that I should stick in my calendar… you get the idea.

My “Things” note within Evernote is much like a pocket notebook, in other words, except it’s just one long run-on note. I separate the notes by just hitting return a few times, typing “=======” (or something similar), then hitting return a few more times and adding the next item. It’s pretty straightforward.

I probably find myself adding something to “Things” twenty times a day. It’s just a catchall for things I need to do, things I need to remember, and things I want to refer back to later for some reason.

Processing “Things”

Once or twice a day, I’ll sit down at an actual computer – either my laptop or my desktop – and process the content of “Things.” I go through each item in that note and decide what I need to do with that item.

Items that are obviously tasks that need to be done later go into my to-do list manager (I currently use Omnifocus, but Todoist is a similar and much cheaper alternative); if they’re really quick tasks, I just do them immediately instead. I then delete that item out of “Things.”

Upcoming events go straight into my calendar (I currently use Google Calendar). I then delete that item out of “Things” once it’s in my calendar.

Most of the rest of the stuff is moved into standalone notes within Evernote, usually sorted into various notebooks. I have a pretty hefty number of these notebooks: a “Future Projects” notebook for things that might develop into larger projects down the road, a “Recipes” notebook for various recipes (though these tend to wind up in Paprika these days), a “Thinking” notebook with things that I want to give further thought to in the future, a bunch of notebooks devoted to various ongoing projects, and on and on and on like this. I’ll talk about a bunch of these below.

My goal is to empty out “Things” at the end of that little session, leaving a blank note, a few little tasks done, and items that are where they’re supposed to be.

Naming Notes

I have a few simple rules of thumb that I follow when creating notes.

First of all, I want the name to convey as much information as possible about what’s in the note. Aside from “Things,” my note names are pretty descriptive. Quite often, the names of notes about Simple Dollar articles wind up being part of the name of the actual finished article, for example.

Another great example is how I store gift ideas. Often, the name of the note lists both the recipient and the name of the gift idea. The note itself usually just contains a picture, a link, and/or some description of the idea. That way, when I’m browsing through my “Gift Ideas” notebook, I have what looks like a long list of ideas. (I can filter that list based on tags if I so choose).

Tagging

Each time I create an individual new note, I also add tags to it. I just use the ten or so most obvious words or brief phrases I can think of that are associated with this particular note. I try as hard as I can to not overthink this and usually the tags are really obvious.

Why use tags? The truth is that I have thousands of notes in Evernote. Some individual notebooks have more than a thousand notes themselves. Even if I’m really great at giving smart names to my notes, tags make it possible to quickly pull up subsets of notes on a particular topic.

For example, my “time management” tag has 46 notes currently associated with it. It looks like about ten of them are potential Simple Dollar articles, another 20 or so are book quotes, another ten or so are future projects, and there are few more sprinkled in other areas. This quickly reduces what could have been a very arduous task of searching for my notes on “time management” down to a couple of clicks and a much more concise and focused list of notes.

Sure, it takes an extra few seconds when creating a note to come up with a number of tags that might be appropriate for it, but when I’m actually looking through those notes later on, having them all tagged is really, really valuable.

Article Drafts

Pretty much every article that you’ve read by me on The Simple Dollar in the past year has been drafted in an Evernote note. Using Evernote, I can start rough drafts of articles, polish them up, and then post them quickly to The Simple Dollar when I think they’re ready. The fact that the articles are available on every platform that I might ever want to use with a consistent format and consistent tools is wonderful, and the fact that they’re all stored in one place is even better.

I keep the articles for The Simple Dollar in one “stack” of notebooks (a “stack” is simply a collection of notebooks on one topic; it’s a way to better organize notebooks). One is named “Ideas,” another is named “Outlines,” a third is named “Unpublished Drafts,” and a fourth is named “Published.”

When I have an idea for an article for the site, usually little more than a possible article title and a sentence or two in description, it’s a new note in “Ideas.” At some point, usually when I’ve looked into a particular idea and brainstormed some more, I’ll flesh that particular idea into an outline of a post, usually a brief phrase or a sentence describing each paragraph along with any key links I might want to include and any key pieces of information I’ll want to share. That note moves from “Ideas” to “Outlines.” When I then turn that into a full article that I haven’t quite decided to post yet, it sits in “Drafts” – these usually need editing or can be pulled from in an emergency. If I actually use an article, I move that note to “Published” and add the published date and URL to the note.

This enables me to keep a nice archive of my writings all in one place.

Book Manuscripts

I have four (yep, four) ongoing book manuscripts for books that I’m researching or thinking about or working on in some stage. Each one is – surprise! – stored in Evernote as a “stack” of notebooks.

I actually follow a model much like the notebook for The Simple Dollar. One notebook is usually notes for the book, usually organized by potential chapter, but also with plot and character notes if it’s fiction. A second is for outlines of each chapter. The third/fourth/fifth/etc. notebooks are for individual chapter drafts.

One advantage to keeping notes and drafts like this within Evernote is that it’s easy to transform a finished product within Evernote into something I can publish to the Kindle Store or other e-book stores using FastPencil, which can literally slurp out my notes and convert them straight into a document that can be edited a bit and then almost directly uploaded to the Kindle Store. Once I hit a final draft I’m happy with, it will be pretty easy to self-publish it should I choose to go that route.

Daily Journaling

As I’ve mentioned often on The Simple Dollar, I do some journaling every single day, usually in two sessions – one in the morning to “vision” the day ahead and again in the evening to reflect on the day’s successes and failures. Again, this is stored in Evernote.

I just have a single “Daily Journal” notebook, within which I add a note named with the date and, if there was a noteworthy event that day, a very brief description of that event as well. Most of my notes are just titled with the date.

The first half of the note is my morning “visioning” of the day. I usually write down what my main focus or two of the day is, a few things I’m grateful for in my life, and a reminder to myself of any new habits I’m trying to build so that I keep them front and center. I do this on paper and take a picture of it into Evernote, for the reasons described above on notes for classes.

I do the same thing in the evening. I take out a sheet of paper, look at my morning notes from Evernote, and then reflect on the successes and failures of the day. Did I do things well? If I did, what caused that success and how can I keep it? If I didn’t, what went wrong and how can I avoid it? I also usually list five to ten memorable events from the day.

Notes for Classes

Evernote is really good at storing class notes or notes from a book if you’re trying to learn about a topic or taking a class of some kind.

Having said that, I am also a huge believer of taking notes by hand for classes and for actually integrating information. If I’m trying to learn something from a book or an online lecture, I use exclusively handwritten notes. I find that I retain and process that information far better if I do it by hand. This is a concept that has a lot of scientific evidence to support it; in other words, it’s a practice you may want to consider yourself for note taking. Just leave the electronics closed, listen and/or read, and take notes with a pen or pencil right onto the paper.

So what does this have to do with Evernote? It’s where I actually store all of those notes! Whenever I fill up a page with notes, I take a photo of that page with my phone within Evernote. I add it to a notebook that’s centered around the book that I’m studying or the class I’m taking as its own note.

The magical part is that Evernote makes the text in that page of notes searchable. If I’m looking for instances where a particular term shows up in my notes, I can just search that notebook and, like magic, all of the places where I wrote that term in my notes are returned to me as results. Along with tagging those pages of notes, I can pretty much zip through my notes on any topic.

As a result, Evernote now contains more than a thousand pages of my handwritten notes that I’ve taken over the years from online classes, books, and other things. I just took a picture of each page of notes straight into Evernote, gave it an appropriate title with some appropriate tags, and now I can find and search all of them and I don’t have to retain the physical notebook.

How do I organize them? As I said, I usually start a notebook – a collection of individual notes within Evernote – for each class that I take and each book that I’m studying in depth. So, for example, I have a notebook called “Yale Pl Sc 114 – Introduction to Political Philosophy,” which contains all of the lecture notes I took as I went through the free Open Yale course Introduction to Political Philosophy. Each page of notes was named after the lecture title, so the first one is named “#1 – Introduction: What Is Political Philosophy? (1/6)” (because I have six pages of notes on that lecture. Within that note is just an image of that particular page from the notebook I was using.

To me, this is the absolute best way to store notes from your classes and from any books you’re studying in depth. It takes no physical space, you can see your original notes in full, you can search them with ease, and they’re available on practically any device.

(This is usually a task that I do independently of my general “Things” note, as are many of the specialized tasks that I mention here. “Things” is just a catch-all for items that I don’t really know what to do with immediately or want to tag later.)

Receipts

This is something that I’ve just started doing in the last few months, but I’m basically never returning to any other method of doing things. I use Evernote to take pictures of my receipts and then toss them in the trash afterwards.

This takes advantage of the text recognition feature that I discussed above so that I can quickly search my receipts for, say, “milk” or for the last four digits of my credit card number or for a particular store and pull them all up instantly. I find that this works insanely well along with You Need a Budget 4 for the purposes of digging through my receipts and figuring out where all of my spending went.

Pictures of Insurance Policies

This is as close to “personal information” as I keep in Evernote, but this is so useful and will be beyond useful in the case of a true emergency, so I go ahead with it.

I have a notebook in Evernote that stores recent images of our key insurance documents. I have pictures of our recent car insurance, homeowners insurance, life insurance policies, and health insurance card. This is a great backup to have in the case of a serious accident or a house burning down or a major crisis when I’m not able to find the documents. I know I can just turn to Evernote at those moments and the info I need is right there.

Miscellaneous Things

I use Evernote for so many things that I could honestly go on listing them all day long.

I have a long note full of books I want to read someday. I reference that list almost every time I go to the library. (This is in a “Misc. Lists” notebook.)

I have a long note full of movies I want to watch and TV shows I want to binge-watch at some point, though this list seems to grow and rarely has anything removed from it, as I just seem to spend less and less time watching TV and movies.

I have a notebook with literally hundreds of projects I’d love to work on someday. I’ll make a note where I’ll throw down all of my ideas and excitement related to a project, but often just doing that is enough for now. I’ll probably never return to 95% of these projects. If a project ever blows up into something I want to actively work on beyond just a quick brainstorm, it turns into its own notebook.

I use Evernote Web Clipper a lot. It’s a tool that’s integrated into my web browser which allows me to just click a button and save the text and images from that article into a note in Evernote. I give it a few tags and save it in an “Articles” notebook. This is great for searching down the road!

I take pictures of business cards when I receive them, along with a note on who this person is and why I would want to follow up with that person.

I could literally list minor uses like this all day, but I think the idea is clear: Evernote is just really, really useful and I’ve come to rely on it as something of a filing cabinet extension of my brain.

The “Freemium” Question

So, as I mentioned at the start, Evernote is free to use. The free version of Evernote allows you to upload 60 MB of text, images, and audio to your account at no cost. If that’s not enough space for you, they have enhanced accounts at various levels that add greatly to that monthly upload limit, allowing you gigabytes of monthly storage.

My philosophy with online tools that use a “freemium” model is a simple one. If a tool seems useful in concept, I start using the free version. Many, many tools stop right there; they’re not useful enough to me to replace other tools or they don’t create their own niche. They don’t become essential, in other words.

When a tool does become essential, two things happen. One, I usually have some significant need for the features of the “premium” account. With Evernote, I blow away that 60 MB of uploading each month. Two, I don’t want that product to ever go away because I’ve come to rely on it, which is absolutely true with Evernote.

So, I invest the money each year to pay for the premium version of Evernote and I don’t look back. It’s an essential tool for me.

What About You?

If you haven’t already tried it, I strongly encourage you to give Evernote a try with a free account. Sign up, put it on your phone and in a clear place on your computer, add the Evernote Web Clipper to your browser, and try using it for some of the things I mention above.

For some of you, it’ll click and you’ll start using it more and more. For others, it’ll become a forgotten tool, and that’s okay. Everyone organizes their lives differently, and I think Evernote just clicks with some people and doesn’t with others.

Good luck!

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What to Do if You Win the Lottery: Five Steps to Take When You Hit the Jackpot

Over the course of a few hours, you’ve gone from regular middle-class schmuck to millionaire. How? Despite shark-attack odds, you purchased a winning lottery ticket worth millions of dollars.

Step one to not mucking this up is to sign the back of your lottery ticket, like now. If you should drop it or lose it without your name slapped on the back, it would be far too easy for someone else to claim your jackpot as their own.

What goes down next depends on you. With the right moves, your lottery win could boost your lifestyle across the board. But, with the wrong moves, your winnings could easily cause your life to fall apart.

That’s right: Winning millions of dollars overnight isn’t always the dream it’s made out to be. For every lottery happy ending, there’s at least one person who lets their newly-won millions destroy them.

Five Steps to Take When You Win the Lottery

If you don’t want to be a statistic, it’s wise to read up on the best ways to handle your lottery winnings before the unthinkable happens. That way, you’ll know exactly what to do if you actually win.

To learn the next best steps for any lottery winner, we reached out to several financial advisors to hear their advice. Here’s what they said:

Step 1: Keep your mouth closed while you hatch a plan.

While winning the lottery might make you want to scream from the rooftops, telling everyone of your good fortune is probably the last thing you should do.

“Keep the big win quiet and to yourself,” says financial advisor David G. Niggel of Key Wealth Partners in Lancaster, Pa. “The news will spread quickly and you’ll be attacked by some unscrupulous characters asking for a handout.”

Trust us, you don’t want to hear from all 367 of your extended family members while mapping out your lottery winnings. By keeping the story secret, you can have some time to think.

Furthermore, staying mum on the topic will give you time to bring in professional help.

Step 2: Hire a team of professionals.

Speaking of professional help, you need some… and quick. Before you cash in your lottery winnings or tell anyone outside of your immediate family, you need to make sure you’ve got your ducks in a row.

But, who should you hire? According to Niggel, your team should include a “fee-only financial advisor to handle investments and planning” for starters.

Notice he suggests a fee-only advisor. Where some financial advisors earn huge commissions from selling certain investment products, fee-only advisors are paid a flat fee for their advice and are obligated to act in your best interest, not their own. Since you have millions of dollars at stake here, the last thing you need is a financial advisor who earns a percentage of what they sell.

Other professionals you need include a CPA to handle your taxes, and a lawyer to set up family trusts and help you avoid scams, notes Niggel. Make sure you’re hiring individuals who have clear-cut fee schedules that show exactly how much you’ll pay.

• Related: The Ultimate Guide to Selecting a Financial Planner

Step 3: Get ready to pay up.

While winning the lottery can mean pocketing millions in cash, it also means paying out… you guessed it, millions in cash. Not only will you lose more than half of your winnings if you take the cash up front — the advertised jackpot is usually based on the long-term payout schedule — but you’ll need to pay taxes, too.

Let’s say you win a cool $60 million playing Powerball. If you take the full $60 million over 30 years, you’d 30 average annual payments of around $2,000,000. Out of that money, however, you’d have to pay federal and state income taxes. With most of that money falling in the top tax bracket of 39.6%, you’d owe almost $800,000 in federal taxes alone every year.

If you chose to take a lump sum up front, on the other hand, your $60 million jackpot would immediately fizzle to $35.9 million. That year, you would owe more than $15 million in federal taxes alone.

State taxes obviously vary based on where you live, so you’ll need to figure out that part quickly. While winning the lottery can be a load of fun, it can also be a case of “mo’ money, mo’ problems.” The more you make each year, the more money you’ll need to pay out.

Step 4: Have some fun, but also save up for a rainy day.

When you win millions of dollars, it can be tempting to splash some cash around right away. If you want a new Cadillac Escalade, for example, you can just go buy one. Want a mansion? You can afford that, too. Want to take your kids to Disney World? Load the kids in the van and you’re off.

While all of this is great, you’ll want to be smart with your money, too. And this is where your team of professionals will come in handy. They may tell you some of what you want to hear, but it’s their job to help you stay rich, remember?

While the advice you get from your financial advisor may vary, Seattle-based financial advisor Josh Brein says the best thing you can do is diversify your investments.

In other words, don’t bet the farm on anything – no matter what anyone says.

“The best way to protect yourself against losing that money as fast as you made it is to not put it all in the same spot,” says Brein. “You may be tempted to go heavy on real estate or buy a ton of company stock from just one company because you think it’s a smart investment. However, you should resist the urge to risk too much of that money at one time and in one place.”

As Niggel notes, you should also try to avoid rushing into any big financial decisions. While spending and investing can be exciting – especially at first – you don’t want your enthusiasm to cloud your judgment.

“Take some time to let the winning sink in before you quit your job or go out and make some large purchases, such as the gated mansion or luxury vehicles.” Says Niggel. “Be patient and cautious and listen to your gut about decisions that need to made.”

Step 5: Watch out for pitfalls and predators.

While winning the lottery may seem like a dream come true from a distance, the reality of winning doesn’t always pan out the way you think. A quick google search of “curse of the lottery” will turn up countless stories of lottery winners whose lives fell apart, for example. Try as they might, many people just cannot handle having a large sum of money at their disposal.

Take Jack Whittaker of West Virginia, for example. It was 2002 when Whittaker won the $315 million Powerball jackpot on Christmas day. As ABC news notes, Whittaker’s initial lottery plans were golden; he planned to build churches in the area and give back to his community, all while creating the perfect life for his family.

Within a few years though, the money had reshaped his life in ways he never wanted. Constantly inundated with requests for cash, Whittaker was afraid and alone. His granddaughter, who had once been the light of his life, was found dead behind a dumpster – the victim of both drugs and crime. Years later, Whittaker wishes he would have ripped up the lottery ticket the day he won.

“More than 70% of people who win the lottery end up being broke within a few years,” says wealth advisor Kirk Chisholm of Innovative Advisory Group, adding that professional athletes who suddenly earn millions have a similar failure rate.

“The problem is human psychology,” says Chisholm. “Most people are not disciplined with their money. They spend what they have and save the rest. Ideally, they should save first and spend the rest. Saving should always come first, otherwise you will rarely have enough to save at the end of the year.”

This is yet another reason you should keep quiet about your winnings and hire a team of professionals first. With professional help on your side, you can set yourself up for life while setting limits on the “fun money” you can spend.

Final Thoughts

If winning the lottery is one of your goals this year, it’s smart to prepare your finances now. By learning to live with a budget, paying off debt, and investing regularly, you can build positive money habits that can carry over to your post-lottery lifestyle.

And even if you don’t win the lottery, making smart moves with the money you do have will still leave you better off. While a lottery win can help you become rich, it doesn’t guarantee you’ll stay rich. To build real wealth, you need to learn to hold onto the money you have.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

Related:

• Why the Lottery Isn’t the Answer to Your Problems
• Personal Finance and Magical Thinking
• 60 Simple Rules of Personal Finance
• The ‘Billion-Dollar Lottery’ and You

What would you do if you won the lottery? Would you add any tips to this list?

The post What to Do if You Win the Lottery: Five Steps to Take When You Hit the Jackpot appeared first on The Simple Dollar.

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Making money with a side gig

How do you take your hobbies and skills and turn them into a profitable side gig?

Let’s say you have a passion for organizing, or you like to write in your spare time. How can you help that make you $200/month, $500/month, or even $5,000/month on the side?

I’ve worked with thousands of students and I’ve found the #1 reason people don’t start making money on the side is this: They don’t know where to start.

So today, I’m going to show you:

• Why freelancing is an easy way to make more money — even with a full-time job
• How I used a seemingly common “skill” to make money in college
• How to turn your skills and hobbies into a service people will pay for
• My “Idea Generator Tool” for finding your first side gig

Freelancing: The easiest way to make more money on the side

There are a few things that we need to acknowledge up front:

• Out of the 3 easiest ways to make money, the easiest way to earn money on the side is to freelance. You can start earning money immediately, you can rapidly test your offerings, and you can cut through the unnecessary work of productizing and increasing your salary.
• 95% of jobs can translate into related side gigs. But 5% of jobs could not: For example, you don’t see any freelance cardiothoracic surgeons.
• Just like dating, it will probably take repeated failures to find a good match between your hobbies and what the market wants.

That last point is very important. Sometimes people spend so much time building up a business — with business cards and websites and licenses — that when they actually launch and find the market won’t pay for their offering, they give up, exhausted and frustrated. I’ll show you how to streamline the process so you can rapidly test ideas and refine them (OR, skip ahead to my Idea Generator Tool).

Two examples: Turning hobbies into side gigs

Example #1: How I used these principles to launch this site

I originally started “I Will Teach You To Be Rich” as a 1-hour free course that I taught at Stanford. It was never designed to make money, it was just something cool that I wanted to do. When I’d hear friends complaining about money at the dining hall, I’d say, “Hey, you should come attend this class I put together…it’s free and it takes about an hour, and I’ll show you all the basics of money — banking, budgeting, saving, and investing.” The response was VERY positive. People said, “Wow, that sounds awesome!”

And then they would never show up.

Repeatedly, over 1.5 years, I struggled to have anyone show up. I would wonder to myself, “Why am I trying so hard to give people GOOD, FREE information about stuff they really need to know?” I felt like a career counselor, one of the most under-appreciated (and hopeless) jobs.

After trying all kinds of strategies to get people to attend, including emailing THEM and trying to coordinate times, I switched approaches. Instead of in-person events, I launched iwillteachyoutoberich.com so people could read it out of the comfort of their own dorm rooms. Later, I learned why this was so successful: People don’t like attending events about money because (1) it makes them feel bad about themselves, (2) the events are usually boring and/or scammy, and (3) people have to publicly admit they don’t know about money.

It was a classic mistake of not understanding my users (substitute “customers” in your business).

Lesson learned: You MUST get into your clients’ heads. What are their fears? Hopes? What do they care about most (Hint: How much it costs is almost never the first priority.) Similarly, once you get in their heads, you learn that the medium in which you serve your clients matters. (Is it an in-person event or a blog or a weekly phone call?) The way you approach your client matters. And the way in which you sell to prospects matters.

Example 2: How I consulted for venture capital firms

Like all of us, I know how to use YouTube, Facebook and Instagram. During college, I was able to turn that into consulting gigs with multiple venture-capital firms who wanted to learn how young people were using consumer services on the web. This consisted of me giving them a course each week — online music, videos, social networks, etc.

Would you have ever thought you could turn your daily routines into a side gig? I wouldn’t have before I landed those gigs. But people were willing to pay for it because they had concrete needs: They wanted to understand how young people were using new technologies so they could remain sharp investors. Money wasn’t an issue, but time was: They’d rather hire someone who lived it than try to learn themselves. Once I’d established that I was skilled at these services — and more importantly that I could create an effective structure for teaching the VCs — they hired me.

Lesson learned: It’s not enough to simply be good at something, whether it’s freelance writing, dog walking, or graphic design. You need to know why people want your skill.

Everyone has skills that someone else would pay for

Two points that are important here:

1. Your job does NOT have to be the source of inspiration for freelancing. If you’re a project manager by day, you can be a creative writer on the side. Both share similar skills, anyway! You have to be organized, create structure out of chaos, and focus on delivering on time, every time. Now you see why turning your hobbies into income isn’t some cookie-cutter formula. Because if a project manager can earn $1,000 on the side being a creative writer, what could you do? Suddenly, it’s overwhelming.
2. Your job skills CAN be transferred, no matter how unique you think you are. So you’re a dolphin trainer at SeaWorld. Wow, unique job! Not really. You have skills in working with animals, obviously, which would suggest training pets. But you also have expertise in behavioral change, which many academic labs and companies would love to tap — and pay for. You can tutor children. You can help people stop biting their nails. Or 100 different options.

Don’t simply say, “I’m a process engineer! Nobody hires freelance process engineers. I give up!”

Instead, ask yourself: What do I enjoy? What am I good at?

Here are just a few of my students who have made money with their side gigs:

A circus performer:

A cellist:

A full-time dad:

The simplified process: Matching your hobbies and skills to a side gig

It’s overwhelming to consider that you could literally have 500 potentials ways of earning money. That’s why people love simple SEO or other automatic ways to earn money on the side, which give you a repeatable formula…but rarely work.

Take it one step at a time.

What industry are you in?

Oh, finance? Ok, you probably don’t want to be a freelance investment banker. But…hmm…you spend all day doing analyses. How can you use that?

Example 1: Excel is a breeze to you. Maybe there are people (like me) who HATE Excel yet need detailed analyses for their business. Could you build models for other people?

Example 2: You’re really good at doing valuations of industries. Are there pre-launch founders who need that skill? (Alert: Observant readers will have noticed a BIG RED FLAG when it comes to pre-launch founders: They can’t pay you. So if your goal is to generate revenue, you want to re-think your target market to make sure they can afford to pay you.)

Identify your hobbies and skills — then think more broadly. 

The most common thing I hear is, “I’m a really good communicator…but I don’t know how to turn that into a side income.” That’s because you can’t.

Nobody hires a “good communicator.” They hire people to solve their problems. What does a good communicator mean, anyway? That’s just a lazy way of saying you haven’t spent the time doing research on the available options you have to channel your skills into something that’s worth money.

Get specific. Are you great at writing press releases? (I’d pay for that.) Are you great at training public speakers? (You might be able to find a specific segment of people who’d pay for that. This one is tricky, though. Can you identify why?) Are you a good communicator because you can speak Chinese? Boom, I’d instantly be a tutor for Chinese kids since their parents will love/trust someone who speaks Chinese — even when tutoring their kids for any subject.

If you don’t have any marketable skills, there are still options.

Etsy is a perfect example of people making great side income — and many of them don’t have any skills that would commonly be considered “valuable.” Yet they do well selling niche products to a niche audience.

If you aren’t some professional with software-engineering skills or online-marketing experience, that’s okay. Can you hammer something into a wall? (I’d pay for that.) Can you cook? (I’d also pay for that…in fact I am.) Can you walk dogs? Tutor kids in 4th-grade math? Help moms with routine tasks?

You can make money on all of these things — good money — without having to have some hard technical skill…as long as you find a market that will pay for them.

I want to go a bit deeper.

People are very bad at identifying their own skills. They’ll say things like, “I dunno….I guess I’m good at writing and communication, and, like, general organizational skills…” AMAZING!! HERE’S a $4,000/MONTH RETAINER!!! (Sorry, won’t happen.)

Repeat this over and over: People pay for solutions, not your skills.

For example, I was on a webcast where I was suggesting ways for people to earn money on the side, and I mentioned that I hate cooking, am not good at it, and would love it if someone cooked for me. I got an email later that night from someone who said, “Ramit, I can help. I can teach you everything you need to know over one weekend, and you’ll know 3-5 great dishes to cook.” I appreciated the offer, but wrote back, “Thanks for the offer! But you don’t understand. I don’t want to learn — I want someone to do it for me.”

Again: People have problems. They want solutions.

They don’t care what you’re “interested” in. Are they too busy to organize their closet? Do they need someone to help them redesign their website? Maybe they want someone to teach their kid how to play flute.

When you make your offer, you’ll have to deeply understand what the market — your prospective clients — want. And then you’ll be able to turn your service offering into something so compelling…that they’ll actually pay you for it.

Find the right side gig idea for you

While it seems like finding a profitable business idea would be the easiest part of making money on the side, this simply isn’t the case. In fact, it’s often the HARDEST part of earning more.

After working with thousands of students, the two most common problems people have are:

1. “I don’t have an idea!”
2. “I have too many ideas. How do I decide?”

And once you have an idea, how do you KNOW if it’s any good?

I want to help you with all of these questions. That’s why I’ve put together a special Idea Generator Tool to give you faster results. You’ll get an exclusive audio excerpt from my flagship course on earning more, as well as two PDF guides to help you find your idea TODAY.

Just enter your email below so I know where to send it.

Use my Idea Generator Tool to find a profitable side gig

Name:

Email:

100% privacy. No games, no B.S., no spam.

Making money with a side gig is a post from: I Will Teach You To Be Rich.

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#money #finance #investing #becomerich

Stop being a martyr

Tony Robbins said something fascinating in a talk about feeding 100 million families.

He pointed out that if you think of your work as a “sacrifice,” you’ve set yourself up for failure.

As soon as you use words like “sacrifice,” you transform yourself into a martyr — and no one recovers from being a martyr. That identity creates a box for you to live in.

I want to talk about the psychology of being a martyr. Tony was speaking to CEOs, but once you understand the martyr mentality, you see it everywhere.

• WORKAHOLISM: “When I’m sleeping, someone else is hustling. My employees are counting on me. I have to work 16 hour days.”
• BAD RELATIONSHIPS: “I want to be single, but my boyfriend threatened suicide last month. He’ll fall apart if I leave.”
• PARENTING: “Jane has ballet rehearsal. These clothes won’t fold themselves. And there are toys everywhere. So much for going out. Supermom to the rescue!”

Can you spot the pattern?

Hint: Anyone who says “I can’t be happy because of X” has turned themselves into a martyr.

Curiously, you can give martyrs 10 ways to overcome that problem and it won’t help. Martyrs believe they need to be miserable for other people to be happy. And they use a secret vocabulary to stay that way.

For example, “supermom” sounds amazing. Who wouldn’t want to be a supermom? Yet many moms use this label to justify putting themselves last. Want proof? Offer solutions and watch what happens:

• If you recommend a nanny, she’ll say “too expensive”
• If you suggest afterschool programs, she’ll say “kids need quality time”
• If grandparents offer to babysit, she’ll say “we can’t put you out”

Slowly, you realize what’s actually going on. Martyrs have written an identity of powerlessness. And they won’t give it up without a fight.

After all: If you go out and have a blast with friends, what does it say about the last 5 years you stayed home?

Pretty painful to admit you had the power all along. Much more comfortable to stick with the identity you know.

Let’s do a show of hands. Have you ever made yourself into a martyr? If so, how? What did you tell yourself to avoid changing?

Let me know in the comments below.

-Ramit

P.S. I’ll share first. If there’s one thing I hate, it’s losing something. I HATE IT. Where are my keys? Where did I put that piece of paper? Why isn’t my apartment as organized as it should be?

After a while, I got used to the clutter.

And then I started saying things like “I’ll never get this place straightened out.” Like my apartment made itself messy. Like I had no say! (That’s the martyr mentality.)

Then I hired Andrew Mellen, a professional organizer and the author of Unstuff Your Life. Andrew’s system saved me so much time that I decided to interview him for you. Pay attention to what he says at 4:12 about holding on to “precious” items.

Stop being a martyr is a post from: I Will Teach You To Be Rich.

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#money #finance #investing #becomerich

Using Your Credit Card Bill as a Wake-Up Call

Here’s a little exercise for you to try out. Take out your latest credit card bill from your most frequently used credit card. Print it out if it’s an electronic bill; otherwise, just grab a pen and put the bill on the table in front of you.

Now, go through each item and ask yourself a couple of simple questions about each one.

“Was this thing a necessary purchase?” If it is, put a little + beside that item on your bill. Easy enough – these expenses should be obvious.

“Was this purchase not necessary, but actually really fulfilling when I look back on it?” Just leave it blank. Don’t mark anything beside it.

“Was this purchase not necessary, but not really all that great when I look back on it?” Put a – beside that item.

“I don’t remember what this item was at all, but I’m pretty sure it wasn’t important.” Put a – beside that item.

Now, go through and total up all of the items with a – beside them and see how much those items add up to.

That’s the amount of money you spent on things that are truly forgettable, that weren’t necessary and didn’t have any sort of positive impact on your life.

That money could have been used to pay down debts. It could have been used to save up for a down payment on a home or on a car. It could have been used to save for retirement through a Roth IRA contribution. Those things quickly turn a – into a +.

Even if you didn’t want to necessarily spend that money on those things, it could have at least been used on things that were really fulfilling when you look back on them, like a meaningful day at the zoo with your family or gas for a day trip to see your grandmother. Those things move, at the very least, into the neutral column.

This exercise isn’t meant for you to beat up on yourself. The truth is that everyone makes spending mistakes. If I go through my own credit card statements, you better believe that I’m going to mark some things down with a -.

The real purpose of this exercise is twofold.

First, it helps you to recognize how much of your spending goes toward things that are completely forgettable and have minimal life impact. People often wonder at the end of the month where all of their money has gone, and the truth is that a lot of it goes toward completely forgettable things with little impact. While it’s easy to acknowledge that truth in a general sense, this exercise makes it very specific and personal. It shows you how much of your spending is forgettable and low-impact. It even shows you exactly what those expenses are.

Second, it gives you a great deal of insight when it comes to your future spending. To me, this is the real value of this type of exercise. It shows you, front and center, how much money you’re spending ineffectively, plus it tells you exactly where you’re spending it. You can take that information and use it to improve your spending habits going forward.

How? Here’s how you can use that information to really reshape your spending.

First, look for patterns in the data. Where do you often spend money in a forgettable fashion? Is it at a bar? A gas station? A particular store? A website? Are there particular kinds of products that you often buy that you just forget about? Soda? Alcohol? Coffee? Entertainment? Look for things that show up again and again in your spending and see if you can make a short list of a few of those patterns.

Second, identify clear, specific life changes that will slash your spending in terms of the patterns you noticed. You have a few clear patterns that define your forgettable spending. What are you going to do about those things? For example, if you spend a lot of money on forgettable stuff online, consider deleting your credit card number from online stores that you frequently use, especially the ones where you buy forgettable things. If you often buy sodas or alcohol or other consumables that you simply forget about, make it your goal to cut those habits (it’s probably better for your health, too). If you find that there’s a ton of expense associated with a particular friend or social group, dial down your time with those folks and build up time with friends that don’t require spending.

Third, implement those changes. Ideally, you now have one or two real tangible changes that you can implement… so implement them. This can be a hard thing to do, so here are a few suggestions on making them click.

First, remind yourself of these initiatives every morning, early in the morning. Put aside a few minutes to specifically think about these goals. Put them on a big note on your bathroom mirror so you can think about them when you’re brushing your teeth, or put them as the lock screen on your smartphone by making an image with those ideas. I find that looking at these focus points right before or right after meditation or prayer (something I do every morning) is very helpful in terms of locking those ideas into my skull.

Second, focus just on today. Don’t worry about the failures of the past or the path ahead of you. Just worry about making sure you take care of those things today. If one of your initiatives is to cut online spending, just choose not to spend any money online today for anything. If one of your initiatives is to stop drinking alcohol, focus on not drinking today and use other outlets for your emotions. If you have an initiative that involves making social changes, make an active choice to spend some time cultivating a new friend or two today. Today is what matters.

Third, evaluate today before you go to bed. Much as you did in the morning, spend a moment or two reflecting on your initiative for the day at the end of the day. Did you manage to avoid drinking? Hooray! Success! If you didn’t, why did that happen? It’s not life-ending to have made a mistake, but it should be seen as an opportunity to figure out why you made a misstep and focus on making sure that you take care of the reason behind the curtain. I find that repetitive failures means that I need to be working on something else in my life as a daily goal because there’s some other challenge in some other part of my life that’s not working out right, so fixing that other challenge needs to come first.

Fourth, make (and continue) success chains. When I’m working on establishing a new “normal” in my life, it usually comes from consciously repeating a daily habit until it’s so normal that I don’t have to think about it any more. I find that it starts to happen around the 30 day mark but doesn’t really “lock in” permanently for at least 90 days of steady repetition. To keep myself motivated, I use the “success chain” system. I have a white board in my office where I have my top two or three daily goals listed. Next to each goal is a line of Xs. Each day, when I’ve successfully done that thing, I add an X to that line. If I haven’t successfully done that thing, I erase the whole line. I often look at this board during my morning evaluation of my daily goals, because maintaining that chain of Xs has a great deal of psychological power.

Use these strategies together to implement the changes you identified and actually cut that needless spending from your life.

Finally, see how those changes affect your spending in the next billing cycle. Skip a month, then take a close look at the first full billing cycle after you started implementing these changes. Go through it and do the same “+,” ” ,” and “-” exercise described above. Ideally, you’re going to notice a lot of positive change, probably enough that you immediately notice it in your lower-than-usual credit card balance or your higher-than-usual bank balance.

It feels good. Real good. The best part? Since it’s spending that really doesn’t matter to you, it’s easy to keep it going. You can do this.

It’s this type of cyclic pattern – looking for mistakes you’re making, looking for actionable steps to improve them, implementing those steps, and then checking the results – that is behind almost every kind of positive change people implement in their lives. Personal finance change is no different.

Weeding out forgettable spending is a particularly powerful type of change because you’re letting go of stuff that really isn’t very meaningful for you and replacing it with much more meaningful uses of your money, plus you can clearly see the impact month over month on your bank statements and credit card bills.

Give this little technique a shot. You’ll be pretty happy with the changes it brings.

The post Using Your Credit Card Bill as a Wake-Up Call appeared first on The Simple Dollar.

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31 Days to Financial Independence (Day 20): Finding a Better Job

“31 Days to Financial Independence” is an ongoing series that appears every Thursday on The Simple Dollar. You might want to start this series from the beginning!

Last time, we took a serious look at the steps that you should take to put yourself in position for a promotion at work. Today, we’re going to to take a look at building a game plan for moving yourself from your current job to a new one.

Why would you make that choice? There are many reasons, of course, but the one that really deserves consideration here is that changing jobs can often improve your true hourly wage significantly or else put you in a position where it will improve quickly.

The obvious route to that success is through higher wages. If your pay goes up, it’s very likely that your true hourly wage will also go up. (Remember, your true hourly wage is the total income you make in a year minus all work expenses divided by the total number of hours devoted to work plus things like commuting.)

However, you might see financial benefit from switching jobs if it drastically reduces your commute or enables you to no longer have to pay for child care or if it opens the door to a completely new ladder of potential promotions or if it gives you equity in a company. Those things indirectly impact your true hourly wage either by reducing your job-related expenses, reducing the hours you devote to work, or opening up potential increases in your wages.

It’s not just about the pay, in other words.

Is a job switch the right move for you? It’s usually a good idea if you’re unhappy at your current job or if you feel like there is little opportunity for advancement or pay increases at your current job. It’s usually a poor idea if there is plenty of room for pay increases or advancements at your current job and you’re happy there. Don’t switch just for the sake of switching.

Exercise #20 – Laying the Groundwork for Finding a Better Job

If you do see a job switch as something that’s right for you, something that will improve your financial outcomes, here are some strategies to start employing right away that will set you up for a job switch in the future, along with some strategiest to make that switch as effective as possible.

Identify a number of jobs you’d ideally like to have and discover what the requirements are. If you’re considering switching jobs, what exactly is it that you’re hoping to switch to? Are you just trying to escape a poisonous work environment? In that case, you’re likely just looking for the exact same job you have now, just elsewhere.

Many people, however, are focused on finding a new job that provides the financial benefits described above. It increases their pay, gives them opportunities to move up, or provides new challenges. Generally, these jobs tend to be ones that you’re mostly qualified for, but a bit underqualified for in a few areas.

Find listings for those jobs (LinkedIn is a good place to start). See what is actually required of them. If at all possible, talk to people who are in that position that you won’t be competitive with (people you may be competitive with may have ulterior motives for not giving you the full picture) and see what the job is actually like.

In other words, understand what your target is.

Make those new requirements your checklist going forward. Your search for new positions should have provided you with a long list of requirements and highly desired traits. Take that long list of requirements and traits, cross off all of the things that you clearly already have, and turn the rest of them into a giant checklist for the coming months in your life.

It may be that you need more education. In that case, start taking classes and progressing toward the degree that you need.

It may be that you need more experience. In that case, stick with your current job if it gets you that experience, or move sideways into another job that will give you that experience.

It may be that you need certain skills. Take classes to help develop those skills, or else find ways to work on those skills in your current workplace.

You absolutely should talk to your current supervisor about polishing and building up certain skills, even if your intent is to move to a new workplace. Just simply say that you’ve self-identified some skills that you’d like to improve and ask for opportunities to do that. This is particularly helpful if those skills are ones that show up on the performance reviews at your current job anyway.

Take on tasks at your current job that are specifically chosen to bolster your resume. Many job listings are actually looking for people willing to take on extra challenges of various kinds, and many jobs offer great opportunities for taking on new challenges. When a challenging task that will fit perfectly on your resume shows up at your current job, jump on it and do it to the best of your ability.

Not only will completion of that project give you something to add to your resume that looks impressive and enable you to potentially fulfill specific requirements of the job that you want to have, it also teaches you new skills – both in terms of the technical aspects of your job and transferable skills like time management and project management – that you’ll be able to apply elsewhere.

The people that step up to the plate and take on challenges and difficult tasks are the ones that build up a nice resume and get the rewards. If you want a better job, that needs to be you taking on those challenges.

Build up lots of transferable skills. Transferable skills are skills that are useful in almost every profession out there. Communication skills, both written and verbal. Public speaking skills. Leadership skills. Time management skills. Information management skills. Project management skills. Self-directed and independent working habits. Research skills (this does not mean “know how to use Google”). Many, many, many jobs want those skills.

Think about the job that you want to have and ask yourself what transferable skills would really shine in that job. We’re not talking about the job-specific technical skills here, but the other elements that would make you successful there. What are they?

Work on them. There are opportunities in every workplace to polish those skills and there are many classes you can take to build up those skills as well. Learn to use them, not just because they look good on a resume or during an interview, but because they’ll make you a more effective employee both in your current job and your destination job.

Cultivate strong positive relationships with professional peers outside of your workplace. If you’re looking to advance within your organization, as we discussed in the previous installment of this series, cultivating relationships with people within your company is a great move. However, if you’re looking to move out, the relationships that become the most valuable ones are the ones outside the company, with people who may be evaluating you, employing you, and working with you.

If you have any interest at all in switching employers, you should be involved in local and national professional organizations. You should be attending conferences and meetings if at all possible. You should be looking for opportunities to present things to people outside your organization. And, in all of those situations, you should be focused on meeting lots of people and building real, meaningful relationships.

That’s a hard thing for some people to do (myself included). I found that simply mastering the mechanics of How to Win Friends and Influence People helped immensely with face-to-face situations, and the mechanics of Never Eat Alone helped greatly with regards to building and maintaining relationships outside of face-to-face interactions.

Which brings me to my next point…

Get involved in social media from a professional standpoint. Social media, particularly Twitter and LinkedIn, provides a great opportunity for you to get to know professionals in your field, hiring agents who may want to hire you, and many other valuable folks in terms of elevating your career. You can build relationships, learn new things, and raise your public profile from pretty much anywhere.

Many people use social media personally, but turn that idea on its ear and use it professionally. Use it to share your professional knowledge, build relationships with people in your field all across the world, and follow up on face-to-face relationships that you’ve launched.

I often use social media as a tool for following up on potential professional contacts. I’ll immediately suggest following them on Twitter or connecting on some other social media network (LinkedIn, Facebook, etc.) and then do it immediately on my phone. I usually make a note as well regarding something that I can follow up on with that person, because following up is key for building a professional relationship (or a personal one for that matter).

Make sure your resume is up to date. It is really easy to let your resume atrophy over time, especially if you’re comfortable in your current job. Don’t let that happen, especially if the idea of switching jobs is on your radar at all.

It’s a good idea to keep a current resume up on LinkedIn at all times. Review it at least once every few months, if not more frequently, and be sure to add any and all relevant skills to it. It’s not a bad idea to keep resumes on other job sites, too, particularly ones focused on your career area.

A valuable tip: don’t be afraid to highlight your unusual experiences or skills, as they’re almost always a benefit rather than a drawback. If you can speak, say, Norwegian, list that on your resume even if you don’t think it’s potentially relevant to anything you might be applying for. It might be a subtle skill that’s a big benefit at a particular company, or, at the very least, it might be a differentiator between similar candidates or a talking point in an interview.

Another valuable tip: avoid using overused terms on your resume. Don’t bother with terms like “dynamic” or “team player” or “detail oriented,” as they’re practically meaningless unless you can tie them to specific experience that you can describe. As generic descriptors, you’re better off without them.

Have a broad focus when applying for that new job. When you start actively searching for a new job, it’s tempting to look for jobs with a very tight focus. You might just look for a job in your current area that pays at least a certain amount in a certain field, for example, which quickly narrows your options.

Expand your search as much as possible. Look at jobs that pay a little less that have clear advancement opportunities or the potential for earning equity. Look at jobs that would require you to move to a new area. Look at jobs that might be a little different than what you might normally look for, like a computer programmer considering a job in IT.

The goal is to find a job that matches your skills, offers an increase in your true hourly wage, and offers opportunity for advancement. Finding a job like that might mean letting go of other factors like location.

Look for jobs based on a company rather than a job title. If you know of some companies that are known to be great to work for, look for positions within that company that you might be able to match up with. In this case, you might want to stretch even further than normal in terms of the type of job you might be looking for.

For example, if you know that a particular local employer is really great to work for and has a ton of opportunity for internal advancement, look at all of the job listings there and see what they have available. You might find something that works well for you that’s outside the scope of what you might normally be searching for.

Practice your interviewing skills. Many jobs whittle their potential candidates down based on their resumes to a small group, then interview those candidates. At that point, it’s usually your interview that decides things (unless the “fix is in” and there’s already a vastly preferred candidate for reasons you may not see… which is why it’s a great idea to build relationships so you can be that preferred candidate).

The best way to practice, honestly, is by interviewing at every opportunity until it begins to feel natural. Accept any and all interviews that you get, even if you’re pretty sure you wouldn’t take the job.

If that opportunity isn’t open to you, simply find sets of interview questions for your job and have a friend interview you. I’ve actually done this for a few of my closest friends in order to make them feel more confident about job interviews and, in at least one case, I’m absolutely certain it improved his interviewing skills and helped him get a job in his field.

Dress appropriately for the interview. Don’t show up to a job with wrinkly clothes and without taking a shower or brushing your teeth. That’s just begging for them not to hire you. Instead, show up dressed as though you want this job and you’re ready to start right now. Imagine you’re about to have a meeting where your job is on the line with your supervisor’s supervisor and 80% of the judgment is going to be a snap judgment when you walk in the door. How would you dress?

For many people, really knowing what to wear in such situations can be a bit of a mystery. I usually rely on DressCodeGuide.com for advice. For example, the advice given for business professional men seems to be utterly spot on and can be a great guide for selecting a wardrobe.

If you’re still not sure, ask around. Ask people who have earned the position you’d like to have what they would wear to an interview and do that. Make sure you’re clean, presentable, and not wearing wrinkly clothes.

Interview them as they’re interviewing you. A good interview will involve you being asked a lot of questions about your background, your skills, your personal philosophies, and so on. However, a great interview is a two way street, where you find out things about the organization and the people who work there.

During the interview, don’t hesitate to ask questions about the specifics of the job, the company itself, the company culture, and so on. Find out what the interviewers like about working there and don’t like about working there.

This can help you quickly figure out whether this is a job that you actually want or not and whether or not this position would be a good fit for you.

If you get a job offer, negotiate a little. The initial offer you’re given is usually at least a little flexible. Don’t be afraid to ask for a higher salary, particularly if you have documentation that the salary is on the low end of the expected scale.

You may also want to ask if the company offers a signing bonus or some money to help with the costs of moving. Again, it does not hurt to ask for these things; they’re not going to rescind an offer and restart the job interview process just because you asked such a question.

Another great perk to ask for – and one that I have heard “yes” to every single time I’ve asked it – is for some extra leave in your personnel account at the very start of your job. Most jobs offer some amount of annual leave and accrue that leave at some regular rate. Simply ask for some leave to already be accrued for you, so that rather than starting with zero leave, you already have, say, a few weeks of leave accumulated. Many jobs, especially in the private sector and in larger government organizations, can easily accommodate this perk and it’s one that doesn’t affect their bottom line directly, so they’re often happy to offer it if asked. You might also ask for a higher rate of leave accrual, though that’s less likely to be given, especially in government positions where such accrual is highly regulated.

Don’t burn bridges at your current job at any point in the transition. If you’re leaving a job where you don’t like the work or the conditions or have painful relationships with coworkers or simply don’t like them, it can be very tempting to burn some bridges on the way out in various ways, whether through confrontation or through leaving your job in an unstable place.

Avoid that temptation like the plague. It will bite you, especially if you’re staying in your current field.

Instead, do everything you can to transition peacefully and smoothly to your new job while preserving the best possible relationship that you can with the people you leave behind. Don’t use your last days to tell people off or to twiddle your thumbs. Use those days to cement relationships and to document standard work protocols. That time you spend will reflect incredibly well on you moving forward, which can do nothing but help your future career steps.

Next time, we’ll talk about strategies for starting a “side gig” that can provide supplemental income.

The post 31 Days to Financial Independence (Day 20): Finding a Better Job appeared first on The Simple Dollar.

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