What Happens When You Stop Paying Credit Cards?

Will you get arrested and thrown in jail?

No.

But if you stop paying your credit cards, you could destroy your future financially.

When you add it all up, you’ll pay hundreds of thousands of extra dollars over your lifetime. Here’s a few of the financial hits that you’ll take:

• Credit card late fees
• APRs on your credit cards will spike
• Any loan you apply for in the future will have a much higher interest rate
• Mortgages will cost more
• Car loans will cost more
• You’ll get declined on the best credit cards, missing out on cash back and rewards programs
• Many landlords will deny your rental application
• Jobs could turn you down if they do a credit check

Basically, every part of your financial life gets harder. When applying for new loans, you’ll get denied more often and have to pay a higher interest rate.

Here’s exactly what happens when you stop paying. 

The Consequences of Not Paying Your Credit Card Bills

While I strongly recommend paying your cards off in full every month, paying the minimum payment is a lot better than not paying at all. I’d do anything it takes to make that minimum payment. You’ll avoid all sorts of consequences.

But let’s assume this isn’t an option. What happens next?

1 Missed Payment or 30 Days Late

If you think you’re not going to be able to pay your credit card bill, the first thing you need to do is call your credit card company. Explain to them your situation. Be nice and honest while telling them why you cannot pay the bill.

There’s a good chance they will sympathize with you. They might even waive off the late fees and not add the late payment to your credit report. Here’s a script to help you out:

YOU: Hi, I noticed I missed a payment, and I wanted to confirm that this won’t affect my credit score.

CREDIT CARD REP: Let me check on that. No, the late fee will be applied, but it won’t affect your credit score. (Note: If you pay within a few days of your missed bill, it usually won’t be reported to the credit agencies. Call them to be sure.)

YOU: Thank you! I’m really happy to hear that. Now, about that fee . . . I understand I was late, but I’d like to have it waived.

CREDIT CARD REP: Why?

YOU: It was a mistake and it won’t happen again, so I’d like to have the fee removed.

Don’t say, “Can you remove this?” Say, “I’d like to have this removed.” At this point, you have a better-than-50-percent chance of getting the fee credited to your account. But just in case you get an especially tough rep, here’s what to say.

CREDIT CARD REP: I’m very sorry, but we can’t refund that fee. I can try to get you our latest blah blah marketing pitch blah blah. . . .

YOU: I’m sorry, but I’ve been a customer for four years and I’d hate for this one fee to drive me away from your service. What can you do to remove the late fee?

CREDIT CARD REP: Hmm . . . Let me check on that. . . . Yes, I was able to remove the fee this time. It’s been credited to your account.

With a bit of luck, you can avoid all the consequences from missing one payment.

2 Missed Payments or 60 Days Late

If you miss two payments, you won’t be able to talk your way out of it. Worse, all the extra fees and interest start to grow exponentially.

The late fee from the first month doesn’t just sit there. You then pay interest on it. Now add more fees and more interest.

Even if you dodged the fees on the first missed payment, you should definitely expect these consequences by your 2nd missed payment:

• Multiple missed payment fees, around $35 each
• Your credit score will drop by more than 100 points
• Your APR will spike, possibly up to 30%
• The APRs on your other cards will also jump even if you haven’t missed a payment

The fees and interest won’t have grown too badly by this point. There’s still a chance to get ahead of it, pay the card down, and recover. It will take you years to get your credit score back to the same point but you’ll be fine in the long-run.

Even if you can only make minimum payments at this point, find a way to make it happen. That will buy you time and prevent the serious consequences from kicking in.

3 Missed Payments or 90 Days Late

If you haven’t paid your bill for more than three months, the credit company believes you are in financial trouble.

At this point, there’s a high chance that the credit company will cancel your account.

You will again be charged a late fee in addition to the accumulated interest. Your credit score will nosedive, and your missed payments will be recorded for 7 years.

The credit card company could also hand over your account to an internal or external collection agency. In most cases, the creditor will try to work out an alternate payment plan with you. This is called a settlement offer. It gives you one last chance to get off the hook by paying the amount you owe as a one-time payment. When they reach out to you with the offer, take it really seriously. Find any way to get it paid. Things only go downhill from here.

6 Missed Payments or 180 Days Late:

The late fees and interest will be completely out of control by this point. You’ll look at your balance, how fast it’s growing, and wonder if you’ll ever get it paid off.

At this point, the credit card company assumes that you will never pay them back. If Your account hasn’t been closed yet, it definitely gets turned off at this point. The debt also gets passed to a collection agency. 

A collection agency will try to recover the amount you still owe. It will contact you and try to work out a deal. If even that doesn’t work, your debt may be sold to different collection agencies. All of them have the same rights as the credit card company.

Expect to get harassed on every turn. If you have a landline, it won’t stop ringing. You’ll get relentless calls on your cell. Endless emails. Collection agencies won’t give up until the debt gets paid.

If you cannot settle your debt, the creditor or collection agency may file a lawsuit against you.

The Math Hurts: Interest Rates and Late Fees

One of the nastiest parts about not paying credit cards is how the fees and interest rates start to compound on each other.

Let’s assume you have a credit card with a $1000 balance and a $15% APR. Then you stop paying. 

Day 1:

• Late fee: $30
• Interest: 15% on your original $1000 balance
• Total balance: $1042 

30 Days:

• Late fee: $30
• Interest: Increased to 30% from the late payment
• Total balance: $1098 

60 Days

• Late fee: $30
• Interest: 30% on the previous month’s balance
• Total balance: $1155 

90 Days

• Late fee: $30
• Interest: 30% on the previous month’s balance
• Total balance: $1214

After a few months, we already owe an extra $214 on the card. Our balance increased by over 20%. This also assumes we haven’t used the card at all, doesn’t account for APR increases on other cards, and that the credit card company didn’t hit us with more fees along the way. In reality, the total owed from missed payments will be higher.

How Your Credit Score Will Be Impacted

A credit score is a fancy term that grades you between 300 and 850 on how likely you are to pay back a loan. The most popular credit scoring system has been developed by a company called Fair Isaac Corporation or FICO for short.

There’s a lot of factors that produce your final credit score. But there’s two that get impacted directly by your credit cards:

Payment history: This makes up 35% of your total credit score. Ideally, it should show a long history of flawless payments every month on all your credit cards. If one payment gets missed, it drags your overall credit score down a lot.

Amount owed: The money you owe makes for 30% of your total credit score. Non-payment of your credit card bill is going to increase the amount you owe relative to your income and credit limit. That will further lower your credit score.

If you haven’t paid your bill for 30 days, a credit score can DROP by 110 points.

Every additional payment will keep reducing your credit score as every new missed payment gets reported. And if the account goes delinquent, that appears on your credit report for the next 7 years. This massively lowers your score until it’s finally removed.

Why does the credit score matter?

With an awesome credit score, you can borrow money cheaply and get approved for the accounts that you want. On the other hand, a low credit score will impact your chances of getting another credit card, a home loan, auto loans, renting an apartment, getting insurance, or even a job in the future.

A lower credit score makes every part of your life more expensive.

A high credit score = lower interest rate = lots of savings.

A credit score above 760 is considered GREAT. You will start feeling the pinch if it drops under that.

Here’s an example of how your credit score affects the amount of interest you pay on loan:

Let’s take a 30-year fixed loan of $200,000.

• If your credit score is between 760-850, you will pay a total interest of $119,626 at an APR of 3.408%
• If your credit score is between 700-759, you will pay a total interest of $128,560 at an APR of 3.63%
• If your credit score is between 680-699, you will pay a total interest of $135,776 at an APR of 3.807%
• If your credit score is between 620-639, you will pay a total interest of $186,380 at an APR of 4.997%

In this example, having a better credit score would save you $66,754 for the exact same house.

Dealing With Collection Agencies

Getting contacted by a collection agency is stressful. It’s not an ideal situation to be in, but it’s far from the end of the world.

So, first of all, take a deep breath.

Keep the following points in mind:

Communicate

Remember to be honest and open in all your communication with the collection agency as it will make the experience more positive. Don’t ignore the collection agency and reply to them when they contact you.

Get everything in writing

Within five days of being contacted by a collection agency, you should have been sent a written notice that contains all relevant information about your debt. It includes stuff like the creditor’s name and a breakdown of the amount you owe.

Check the numbers against your own records. Report inconsistencies, if there are any. If the collectors verbally promise a deal to settle for a lower amount, then make sure you get it on paper. Similarly, if you have any requests, make sure you have a written note of it.

Prepare for the worst

While everything may seem chaotic, you need to know your rights as a consumer.

Many states have laws that prevent harassment from collections agencies. But they’ll stretch these rules to the absolute limit. They might not call during “off-hours” but they’ll call relentlessly during the day. Not every agency pushes the limits but many do.

Hire a lawyer

If a collection agency files a lawsuit against you, you need to get a consumer lawyer. Having representation in court increases your chances of a fair and accurate trial. The lawyer will also advise you on stuff like the statute of limitations and the best way forward.

Sharing information

Always be cautious while sharing data with collection agencies. You don’t want to hand them any information that can be used against you. This includes sharing your bank account statements and sending them money directly from your bank account. It’s better to use a third-party service provider in such cases.

The debt collection agency can use any information you share to recover dues from you.

Verify the agency

While there are legitimate debt collection agencies, some are scams and frauds. Always be sure to check the agency’s name, address, and number to be sure you are dealing with a genuine agency.

Pay immediately to save

Collection agencies know that the longer a debt goes unpaid, the odds of collecting it go down. Yes, they want to get paid the full amount but they really want to get paid right now.

They’re often willing to give you a discount on the total owed if you pay immediately.

The one time I dealt with a collection agency over an unpaid medical bill that I missed, I was completely willing to pay it in full. I just needed a few days to transfer funds between accounts. The collection agency asked me if I could pay a lower amount immediately and I said yes. I paid, they closed the debt, and that was the end of it. I inadvertently saved a few hundred dollars.

Better Options to Consider

You may try your best to pay your debts, but you just can’t do it. If you’re unable to pay your credit card bill and your financial situation is not improving, you have a few options.

Earn More Money

Earning more money may seem hard, but it’s the most straightforward way to pay your debt. If you work extra hours at your current job, take up a part-time gig, or sell stuff online, you will earn extra cash. Even an extra $25 each month can make that minimum payment, buying you more time.

Liquidating Assets

If your credit card debt is getting out of hand and you just can’t pay it, you could sell your stuff to pay dues. I know you will be emotionally attached to a lot of things, but paying back overdue debt can give you mental peace.

Credit Counseling Agencies

Reach out to a credit counseling agency. They will speak to the creditors on your behalf. Their aim is to consolidate your debt and create a plan that works for both you and the creditors. Such counseling agencies might charge a fee for their service.

Debt Settlement

You only pay a fraction of the amount you owe when you go for debt settlement. This may seem like a good idea, but the amount can still be a large sum. Opting for debt settlement also hurts your credit score.

Filing Bankruptcy

If all else fails, as the absolute LAST resort, you can file bankruptcy. Think long and hard before taking this step and consult a lawyer before doing it.

Chapter 7 bankruptcy wipes out your debt from unsecured loans like credit card bills. Chapter 13 bankruptcy restructures your debt with a long-term payment plan.

Bankruptcy will stay on your credit report for up to a decade. Opening new accounts in the future will be extremely difficult.

What Happens When You Stop Paying Credit Cards? is a post from: I Will Teach You To Be Rich.

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Don’t Give Up Until You Do The Math

In the time I’ve been doling out personal finance advice online, I’ve been called everything from privileged and out of touch, to colorful names I will not repeat. I know I don’t have the soft touch many other personal finance gurus have. But I have to be harsh with you because you need to know [...]

The post Don’t Give Up Until You Do The Math appeared first on Money After Graduation.

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How to Invest in Real Estate in 2020

Real-estate investing offers a way to earn money while building for your financial future—but it’s also an easy way to lose your shirt if you’re not careful.

If you do your research and commit to tried-and-true systems, you can make your money back and then some.

That’s why we want to go through 8 ways you can make money by investing in real estate. They’re all different, and we certainly don’t suggest you try all 8 methods. But this is a great launching point if you’re just starting out.

How to invest in real estate in 8 ways

Here are the 8 ways you can invest in real estate. The method you choose ultimately depends on your financial situation and what you hope to achieve. If you want to learn more, check out our article on real estate investing myths.

#1: Real-estate investment trust (REIT)

If you’re looking for a way to invest in real estate that’s lower risk than buying property, this is the method for you.

Real estate investment trusts, or REIT, act like mutual funds for real estate. Think of them like a basket. In the basket are different properties you can invest in. Instead of investing in individual ones, you invest in the entire basket along with other investors. REITs are typically managed by a company (i.e. a trust).

Your investment goes towards buying and developing the properties to turn into eventual profit. Investors get paid dividends with REITs like a normal fund.

REITs are typically managed by a company (i.e. a trust). They also come in a variety of different forms. You can invest in REITs that focus on healthcare buildings like hospitals or retail buildings like shopping malls.

Overall, REITs are a great place to start if you’re looking to get your toes wet in real estate investing. Not only do you not have to worry about paying enormous amounts for a property, but you get started today with a broker.  They are an excellent and low-risk way to diversify your portfolio into real-estate. And you never have to think about it just like a normal index fund.

For more, check out our article on mutual funds to learn how to start investing with a broker today.

#2: Rental property

Admit it: You’ve flirted with the idea of buying a single-family home and renting it out for passive income.

If you’re careful about the property you buy and the person you rent it to, it can be a great way to make some money while you pay off the mortgage for the property. And as rent prices rise each year, your mortgage will remain relatively fixed—increasing your earnings as a result.

However, you need to keep in mind the phantom costs of purchasing a home. These are the unseen but consequential costs such as regular maintenance and repairs that many would-be homeowners don’t consider when they first purchase a house.

And since you’ll be the landlord of the property, you’re on the hook for any issues that might arise when your tenet calls you at 3am complaining about a burst pipe.

Also, many folks assume that landlords can set any rent they want. That’s not true. They can only set rent at a price that the market will support. If the local economy begins to struggle, you could be forced to rent the property at a rate that’s less than your mortgage. You’d start losing money every month.

If you’re willing to put in the work to be a good landlord, here is our article on how to buy a house.

#3: House-hacking

House-hacking sounds like you’re trying to access the mainframe of your house in a cheesy hacking montage.

But it’s actually a lucrative way to make money in real estate.

Here’s how house-hacking works: You purchase a multi-flat building. Then you live in one unit while you rent out the other ones. This allows you to generate money via rent while you cut down on your own expenses by living on the property.

This is similar to purchasing rental property. But instead of being on the hook for maintenance and repairs for one property, you’ll be responsible for all of your units. This can be a big drawback for those looking to get involved in house-hacking.

However, if you have the funds to hire repair people or property managers (or if you just want to do it yourself), house-hacking could be a great way to make some cash in real estate.

#4: Flipping property

Flipping properties seem straightforward: Buy a house, renovate it, and then sell it for more than you bought it for—and more than it cost to renovate it.

However, would-be house flippers should know that this is one of the most time, money, and energy consuming ways to make money in real estate. Not only do you need the money to purchase a property, but you also need to put in the sweat equity to renovate a house.

Some of the best advice I’ve been given is to only consider flipping if I had a network of trusted contractors that I could rely on. Otherwise, it’s really easy for costs to get out of hand.

And even when you renovate a house, it’s not guaranteed that it’ll sell any better than before. Factors such as the real estate market, the economy, and the location play a massive role as well.

That said, it still has the potential to give you massive profits if you play your cards right.

#5: Short-term room rentals

Much like house-hacking, this method involves you renting out property you already live on. However, there’s a slight difference to this one: You don’t even have to own the property in order to rent it out.

With the advent of websites like Airbnb and even Craigslist, you can rent out different rooms in your house or apartment for cash.

And with the combination of the right listing and the right location, you can make a good amount of money from those sites—like this enterprising I Will Teach reader:

For more on how to get started with Airbnb, here’s the official how to article from the company itself.

Also, here’s another great guide from our friends over at The Points Guy.

#6: Real-estate funds

These act like REITs where you invest in a mutual fund with other investors in companies that actively manage different properties for you. The difference is that real-estate investment funds also include direct investments into real estate properties.

REITs act much like stocks and other equities, whereas real-estate funds are like your typical mutual funds.

“Real-estate funds generally increase in value through appreciation and generally do not provide short-term income to investors as do REITs,” explains Stuart Michelson, a finance professor for Stetson University. “Real estate funds gain value mostly through an increase in value of the assets.”

You should expect higher fees than a standard REIT.

#7: Online real-estate investing

This method relies on web platforms such as Fundrise to get your investment done for you.

These platforms allow real-estate managers to connect with potential investors to help fund the purchase or investment of different properties.

Think of it like Kickstarter for real estate. But instead of a dumb cooler that will never get delivered to you, you can receive returns like a typical stock or bond investment.

And with a web platform, it can be a much more intuitive experience.

If you’re interested, here are a few online real-estate investing platforms you can use to get started:

• Fundrise
• Prodigy Network
• RealtyShares

#8: Private equity funds

Much like mutual funds, private equity funds pool the money of different investors together in order to invest in property. Unlike an REIT or real-estate trust, though, these funds are typically only available to accredited investors who have a lot of money on hand to start investing.

To start, you need at least $100,000 to begin investing. That number can easily start to get in the seven-figure range depending on the fund.

As such it’s not as accessible to the layman as many of the other options on this list. However, it’s still worth noting just in case that applies to you.

Is real-estate investing right for you?

Real-estate investment can be an interesting and fun way to diversify your assets. If you play your cards right and do your research, there’s no telling how much money you can make through these investments.

But you have to be careful. Real-estate tends to be a very volatile market, and there are a lot of dangers that go into it if you don’t keep in mind certain elements. To learn more about this, be sure to check out our very best resources on the topic below:

• Real estate investing: The myths, facts, and ways to get started
• The Real Scoop on Real Estate (the first of a 7 part series)
• Don’t buy a house without asking yourself this question
• Real estate is an overrated investment

How to Invest in Real Estate in 2020 is a post from: I Will Teach You To Be Rich.

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How much does it cost to drive? Driving cost calculators and tools

My girlfriend recently bought a new car. After 23 years, she sold her 1997 Honda Accord to a guy who's more mechanically inclined than we are. Kim upgraded to a 2016 Toyota RAV4, and she loves it.

One of her primary considerations when searching for a new car was the cost to drive it. In her ideal world, she would have purchased a fully-electric vehicle but it just wasn't in her budget. The RAV4 hybrid was a compromise. According to fueleconomy.gov, it gets an estimated 32 miles per gallon. (And actual users report 34.7 miles per gallon.)

Kim's quest for a fuel-efficient car prompted me to revisit apps and online tools that help users track their driving and fuel habits. I've written about these in the past — and, in fact, this is an updated article from 2008! — but haven't looked into them recently.

Here's a quick look at some of my favorite driving cost calculators, tools, and apps.

Cost to Drive

Cost to Drive (stylized Cost2Drive) is an easy-to-use web app that estimates how much you'll spend to drive from point A to point B. Enter your starting point (address, city, state, or zip code) and your destination, enter your vehicle information, then click a button.

That's it. Cost to Drive calculates travel distance, approximate driving time, and an estimate of your fuel costs. Here, for instance, is how much it would cost to drive from Portland to visit Kim's brother in Groveland, California.

This tool is handy for road trips, of course, but it's also useful for extended journeys. Before Kim and I set out on our R.V. trip across the U.S., I used Cost to Drive to estimate how much we'd spend on fuel. (I was way off, but that's not the fault of the tool. I overestimated the fuel economy of our motorhome!)

This isn't the sort of tool that you'll use every day, but it's certainly useful enough to bookmark for later use.

Folks in Europe — and possibly the rest of the world — might want to play with the Via Michelin app, which offers route planning and driving cost calculations.

Fuelly

While we only used the Cost to Drive once for our R.V. trip, we used the Fuelly app every single day. And I still use it today.

Fuelly is primarily a smartphone app with which you can track your vehicle's fuel economy. Whenever you stop to pump gas, you enter mileage and pricing info into the app, and it computes how much it costs to drive.

Here, for instance, are two screencaps from Fuelly showing how it tracked info for our motorhome.

  

To get more accurate estimates of the cost to drive your vehicle, you can also log maintenance info in Fuelly. And, as you can see, the free version of the app is ad supported. Ad-free premium versions are available, and they include added features.

While the Fuelly website doesn't offer a lot, there's one feature that I think GRS readers will find interesting. If you select the browse vehicles option from the main menu, you, you can get a profile of driving info for all Fuelly users. Here, for instance, is what the app has tracked for other folks who own a 2004 Mini Cooper, like me.

GasBuddy

A decade ago, GasBuddy was a gas price aggregation tool. It collected fuel price info from across the United States, and served it up so that visitors could find the best prices in their area.

Today, GasBuddy is still that website, but it's a whole lot more. For instance, you can look up a chart of gas price trends over the past couple of years.

Or you can find local maps and national maps of current gas prices.

And because it's 2020 now, GasBuddy offers a smartphone app featuring all sorts of tools to help you calculate (and reduce) your fuel costs.

FuelEconomy.gov

FuelEconomy.gov is the official U.S. government source for fuel economy info. Like all U.S. government sites, it's a treasure trove of data and resources.

The site includes a car finder (and comparison) tool (also available for iOS and Android devices), a vehicle power search, a fuel savings calculator, and more. There's even a page exploring extreme MPG!

The site also provides some widgets for site owners (like me!) to share with their audience. Here's

Find a Car Tool This tool lets you look up official EPA fuel economy ratings for vehicles back to the 1984 model year.

Gas Mileage Tips This tool displays a fuel-saving tips and provides links to additional tips on fueleconomy.gov.

Each year, the U.S. Department of Energy and the U.S. Environmental Protection Agency produce a Fuel Economy Guide to help buyers choose fuel-efficient vehicles. You can find guides from recent years in the Get Rich Slowly file vault, if you're interested: 2020, 2019, 2018, 2017, 2016, 2015.

If you're into alternative fuels and advanced technology vehicles, the U.S. Department of Energy has a bunch of different widgets to play with at their Alternative Fuels Data Center.

Sidenote: Many folks want a new Tesla or Prius in order to minimize their impact on the environment. This isn't as straight-forward as it might seem. The calculations are complicated but the bottom line is this: In many cases, it makes more sense to keep (or buy) an older fuel-efficient vehicle than to buy a new one. That's because the manufacturing process itself is the source of roughly 25% of a car's environmental impact.

The Bottom Line

It's important to note that even the best driving cost calculator has limitations. Most of these tools track only fuel costs, which are a small portion of the overall cost to drive your car.

Your true cost of car ownership includes the purchase price,insurance, maintenance, and more. According to the American Automobile Association, the average new vehicle costs 62 cents per mile to drive. AAA figures the average driver spends $9,282 per year on her automobile.

To truly determine how much you're spending to get around, you need to take matters into your own hands. Find a cheap notebook or pad of paper. Grab a pen or pencil. Whenever you make a trip – even if it’s just down the street – log the time and the distance. Write down how much you spend on fuel and maintenance. Tally your car and insurance payments.

Do this long enough and you'll begin to get a picture of your personal driving costs. At any point, you can simply divide the amount you've spent on your vehicle by the number of miles you've driven to learn how much it costs to drive.

What you do with this info is up to you!

Note: This is an updated article from the GRS archives. The original version from 03 December 2008 was woefully out of date. Some older comments have been retained.

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How to Make Money on Amazon in 2020

Amazon is the world’s largest online retailer.

There are 2.5+ million sellers offering nearly 120 million different products on the Amazon marketplace.

That means there’s tons of money to be had. Lots of people are getting rich from Amazon. With no signs of slowing down in the near future.

There are plenty of ways to make money with Amazon, you don’t even need a product.

If you want your share of the pie, check out these top 16 ways to make money from Amazon. 

Sell Products With Amazon FBA

FBA stands for “fulfillment by Amazon.” In a nutshell, here’s how it works:

1. Become an Amazon seller.
2. Buy wholesale products (from Alibaba or similar platform).
3. Ship your inventory to an Amazon fulfillment center.

Once you join Amazon’s FBA network, Amazon will deliver the products to customers for you. You could always ship the products yourself to avoid extra Amazon fees, but FBA is the best way to sell products at scale.

You make money if you can sell products on Amazon for a higher price than you pay for them.

To begin, register to start selling on Amazon here. Then you can sign up for Amazon FBA here.

Retail Arbitrage

Sourcing inventory from overseas means you’ll have to pay hefty shipping costs. Lots of sellers avoid this by leveraging retail arbitrage.

Retail arbitrage will require a bit more work. It’s essentially the process of buying inventory from local retailers and then selling them on Amazon for a profit.

Go to your local Walmart, Target, etc. and search for discounted products. Then simply list those items on Amazon with a markup.

You could also consider online arbitrage. Buy directly from these websites and benefit from free shipping. But usually, the best discounts are found in-store. Ebay is another good source for finding cheap products to sell.

While there is definitely money to be made with retail arbitrage, it’s a competitive space and difficult to scale. It can make a great side hustle if you personally enjoy hunting for deals.

Publish Your Own Books

Are you a good writer?

You can publish digital books through Amazon Kindle Direct Publishing (KDP). It takes less than five minutes to publish, your book will be available on Kindle stores across the globe in 24-48 hours.

Amazon lets you set your own prices for self-published books. You’ll earn up to 70% of royalties on Kindle sales.

You can also make changes to your content at any time.

In addition to digital format books, you can use CreateSpace to publish physical copies of your book. Consider using ACX to create an audiobook that can be sold on Amazon as well.

Sell Wholesale Products

Instead of targeting consumers, you can sell products in bulk via Amazon Business.

This is a B2B marketplace on Amazon. It provides business customers with special prices and the convenience of shopping with Amazon.

As a seller in the Amazon Business marketplace, you’ll have unique business features. For example, you’ll have the ability to accept requests for quotes. Amazon allows you to display different quality and diversity certifications on your page as well.

55 different Fortune 100 companies are Amazon Business customers. More than 50% of the biggest hospitals in the United States and 40%+ of local governments in densely populated cities buy from this B2B marketplace.

If you know a particular B2B vertical really well, you can move some serious product volume this way.

Affiliate Marketing via Amazon Associates

Leverage your existing website or blog by joining the Amazon Associates program.

This is a great way to make money on Amazon without selling anything. The program allows you to earn up to 10% in advertising fees from qualified purchases.

Examples of commissions by product category include:

• Luxury, beauty, and Amazon coins — 10%
• Furniture, home, home improvement — 8%
• Lawn & garden, pets products, pantry — 8%
• Outdoors and tools — 6%
• Digital music, groceries, physical music, handmade, digital videos — 5%

You can view the full Associates Program standard fees schedule here.

It’s easy to join and get approved. Amazon also provides you with a wide range of linking tools to embed on your website.

Since Amazon is so ubiquitous these days, you end up getting commissions on all sorts of random products that people buy during the cookie window after clicking your link. If you can build high traffic sites and get lots of clicks to your affiliate links, the earnings add up fast.

Sell Professional Services

Most people don’t realize it, but Amazon is more than just a marketplace for tangible products. You can also sell professional services through Amazon Services.

There are no upfront costs or monthly fees to join this program. You’ll only pay a portion of your revenue share for completed jobs based on the service type offered.

Some popular service categories include:

• Apparel and jewelry
• Business
• Consumer electronics
• Education
• Events
• Health and beauty
• Home maintenance
• Pets
• Lawn care and landscaping
• Vehicles

Both freelancers and registered businesses can join Amazon Services. So if you have a skill that falls into one of these categories, apply online to join the network. 

Sell Products Under Amazon’s Private Brands

The Amazon Accelerator program is an incentive for manufacturers to create their own brands with innovative products. You’ll sell those products exclusively on Amazon as a private brand supplier.

Amazon guides you through the entire onboarding process, providing you with useful tools to create your brand. You’ll also benefit from a suite of marketing support.

If you’re unsure about what types of products will perform well, Amazon can facilitate product testing and customer feedback.

For those of you with direct access to manufacturing, becoming an Amazon Accelerator brand can be a great way to make some cash with substantial margins through this marketplace. 

Sell Handmade Goods

There is a high demand for handcrafted goods. If you’re crafty and have a passion for making things at home, you can join Amazon Handmade.

Sellers from more than 80 different countries are selling handcrafted products via Amazon.

Amazon has an artisan-only application and audit process. This ensures that the products are genuinely handcrafted.

The pricing for handmade sellers is very straightforward. There are no hidden fees or listing fees at all. You’ll just pay a 15% referral fee to Amazon for each sale made. 

Work From Home as an Amazon Rep

You can get a job working directly for Amazon from the comfort of your own home. The customer service team supports 16 languages from over 130 locations worldwide.

Many of Amazon’s employees work remotely.

You can become a virtual customer service representative and do the same. If you want to help Amazon customers while sitting in your pajamas, this could be the job for you.

Amazon is constantly updating its Customer Service Associate jobs. Check this page to see if there’s a full-time or part-time job you meet the qualifications for. Then simply apply online.

Create Custom Merchandise With Merch by Amazon

Do you have a clever design idea for a t-shirt or a coffee mug? Don’t have the resources to produce hundreds or thousands of these on your own?

Merch by Amazon can turn your idea into a reality.

All you have to do is upload your design. Then simply select a product type and color.

Amazon will create a product page for you. They’ll also take care of all production, shipping, and customer service. You’ll earn a royalty for every product sold that you designed.

There are no upfront costs to join Merch by Amazon. But you will need to fill out an application to be considered for the program. Not everyone will qualify. 

Deliver With Amazon Flex

You’ve probably realized by now that Amazon runs its own delivery service. I’m sure you’ve seen drivers delivering packages around your neighborhood and even to your own door.

If you’re looking for a part-time job, you can become one of those drivers through Amazon Flex.

The majority of drivers earn between $18-$25 per hour. All of your earnings can be tracked through the Amazon Flex mobile app.

As the name implies, the position is flexible. Create your own schedule with available opportunities seven days per week. 

Trade In Used Goods

Technically, trading in your used products won’t put cash in your pocket. However, you’ll receive an Amazon gift card which is almost as good.

There are thousands of eligible products that qualify for Amazon’s trade-in program.

Top categories include:

• Amazon products (Kindle, tablets, Echo, etc.)
• Cell phones
• Gaming
• Books

If you have unwanted merchandise lying around the house, see if it’s eligible for a trade-in via Amazon. 

Join Mechanical Turk

Mechanical Turk (MTurk for short) is Amazon’s crowdsourcing marketplace.

The platform allows businesses and individuals to outsource tasks and processes to a virtual workforce. Things like data validation, content moderation, data entry, research, and surveys fall into this category.

If you have the time, ability, and resources to perform microtasks, then consider joining MTurk. Many tasks will earn between $0.10 and $1. They’re pretty easy to complete too. So the goal is to complete as many as you can.

Some of the tasks are pretty boring and tedious. But you can work part-time on your own schedule and get paid for it.  

Write Reviews For Amazon Vine

This is another example where you won’t actually receive any cash for participation. Amazon Vine rewards you with free products.

If you’ve already written lots of helpful reviews for products on Amazon, you could be eligible for the Amazon Vine program.

The purpose of Amazon Vine is to encourage honest, unbiased, and helpful feedback. Products are sent for free in exchange for reviews.

You’re not required to leave a favorable review just because you got the product for free. That defeats the purpose of the program. The best way to increase your chances of getting invited to Amazon Vine is by leaving reviews for Amazon products you’ve already purchased. 

Become an Influencer

Amazon Influencers is another affiliate program. But it’s different than the Amazon Associates program we talked about earlier.

The influencer program is designed to promote products via Instagram, Facebook, Twitter, and YouTube. It’s a great opportunity to leverage your existing social following.

If you become an approved influencer, Amazon will give you a unique URL to your own Amazon page. The page will showcase products that you want to recommend to your followers. You’ll earn a commission for qualifying purchases.

How to Make Money on Amazon in 2020 is a post from: I Will Teach You To Be Rich.

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A Guide on Home Equity Lines of Credit (HELOC)

Building equity over time is one of the best parts of home ownership.

You can leverage that equity to secure funding in the form of a home equity line of credit, better known as HELOC.

A HELOC is a great way to get lower borrowing costs since your loan is backed by your home. Lenders are more likely to offer fair terms when something of significant value, like your house, is used as collateral.

So if you need cash and you own a home, use this guide to learn if a HELOC is right for you.

What is a Home Equity Line of Credit (HELOC)?

A HELOC is a revolving credit line, similar to a credit card, secured by your home. You can draw from your home equity line of credit and pay it back on a monthly basis, incurring interest on the amount borrowed.

A home equity line of credit is also referred to as a second mortgage.

There are two phases to a HELOC:

• Draw period — During the draw period, you’re able to borrow from the credit line. Minimum payment amounts are usually interest-only, but you have the option to pay the principal as well. The typical length of a draw period is ten years, although it varies.
• Repayment period — You can no longer borrow money against your line of credit during the repayment period. During this time, you’ll pay back what you owe in monthly installments, including the principal plus interest. The length of the repayment period is often 20 years.

To calculate your home equity, simply subtract the outstanding balance on your mortgage from the value of your property.

Lenders typically let you borrow up to 85% of your home’s value, although this will vary based on the lender and your financial track record. Some lenders will let you borrow more or less.

Here’s an example. Let’s say your home is appraised at $300,000. You still owe $125,000 on your mortgage, and a lender will let you borrow up to 80% of your home’s value.

1. $300,000 x 80% = $240,0000 maximum allowable amount
2. $240,000 – $125,000 = $115,000 amount still available after your mortgage

In this case, your home equity line of credit would be $115,000. This is the maximum amount that you can borrow during the draw period.

The majority of HELOCs have variable interest rates. As baseline interest rates fluctuate, so will the rate on your line of credit.

Home Equity Line of Credit Vs. Home Equity Loan

HELOC is often confused with a home equity loan. While the two terms do have some similarities, they are not the same thing.

Home equity loans and lines of credit are both considered “second mortgages.” Each type of financing allows you to borrow against your home equity.

A home equity loan is funded in a lump sum of cash, similar to a personal loan. You’ll have fixed interest rates and make fixed monthly payments for the duration of the loan term. The length of a home equity loan will vary based on your lender, but the terms are usually between five and 30 years.

Your house is used as collateral, whether you get a HELOC or a home equity loan.

Here are a few significant differences between a home equity line of credit and a home equity loan:

• Interest rates — HELOC is variable. Home equity loans are fixed.
• Funds disbursement — Borrow as needed with HELOC. Lump sum of cash with a home equity loan.
• Payment schedule — For HELOC, the payment amount depends on how much you borrow. You won’t have to repay any principal during the draw period. A home equity loan has fixed monthly payments for the duration of the loan term.
• Closing costs — A home equity loan usually has additional fees and closing costs in the range of 2% to 5%, similar to your first mortgage. With a HELOC, these costs tend to be much smaller, if applicable at all.
  

In both cases, you can technically use the money borrowed for anything. From debt consolidation to paying for college or purchasing appliances, you can do whatever you want.

However, it’s common for people to use home equity loans and HELOCs for home improvement projects. Adding significant value to your home is the best way to get the most out of a second mortgage.

Generally speaking, a HELOC is best for situations when you’ll need access to money at different times. Home equity loans are better for one-time needs.

Home Equity Loans and Credit vs Refinancing

A second mortgage isn’t the only way to access extra cash using your home equity. Another option is known as a cash-out refinance.

With cash-out refinancing, you’re replacing the current mortgage on your home. When the new loan is larger than the balance on your original mortgage, you can pocket the extra cash.

Here’s an example. Let’s say your home is worth $300,000 and you owe $100,000 on your mortgage. You refinance the mortgage for $120,000. $100,000 would replace the previous mortgage, and the remaining $20,000 would be received in cash. But now you have a debt of $120,000 instead of $100,000.

Similar to a home equity loan, refinancing comes with fixed interest rates and fixed monthly payments.

A cash-out refinance usually is a good option if you can get lower interest rates on a new mortgage, compared to what you’re currently paying. I would shy away from refinancing if the new terms come with higher interest rates.

The process to get approved for cash-out refinancing is similar to your first mortgage, which can be a bit cumbersome. With that said, it’s usually easier to qualify for refinancing than a second mortgage.

The Benefits of HELOC

There are lots of advantages to a home equity line of credit:

• Only borrow what you need.
• Low upfront costs and fewer fees than other loans.
• Only pay for the amount borrowed rather than the full amount of the credit line.
• Interest-only payments during the draw period.
• Use funds for multiple situations over time, as needed.
• Ability to use the money for anything.
• Interest on money used for home improvements is tax-deductible.

The Drawbacks of HELOC

Before you apply for a home equity line of credit, you should weigh the potential downsides and risks against the benefits:

• Variable interest rates could rise, therefore increasing your payments.
• Your home is being used as collateral. If you can’t make payments on time, you could lose your home.
• Payments increase over time after the draw period ends and principle is owed.
• The revolving credit line is not available for the duration of the loan term.
• Some lenders require an initial minimum draw, even if you don’t need the money right away.
• You need to own a considerable amount of equity in your home to qualify.

Remember, your home is being used as collateral.

Avoid a HELOC if you don’t have a stable income. If you fail to keep up with your payments, the lender can take your house. Don’t get a HELOC if you can’t afford the interest rate to increase. Review the loan paperwork to see the highest possible rate, or the lifetime interest cap. If you can’t pay that rate, don’t get a HELOC.

Home equity lines of credit should be used for large purchases, as opposed to meeting basic needs.

Where to Get a Home Equity Line of Credit

A home equity line of credit is best for people who need access to funding at different times. For example, let’s say you’re planning to do multiple home renovations over the next five years.

This year you’re replacing the roof. Next year you’re remodeling the kitchen. The following year you’re adding a porch to the backyard. Rather than getting a loan for each occurence, you can simply draw against your line of credit.

Most banks that offer mortgages will also offer a HELOC. Going to the same bank that provided your original mortgage is usually the best place to start since you already have a pre-existing relationship.

The Best Lenders For a HELOC

Before you apply for a home equity line of credit, you should shop around to get the best loan terms and interest rates.

These are some of the top lenders for a HELOC. I’ll give you the quick highlights and benefits of each lender below.

Chase

• Credit lines from $50,000 to $500,000
• 5% to 7.64% max APR
• Up to 0.62% off the standard variable rate for qualified borrowers
• $50 origination fee and $50 annual fee (no other application fees or closing costs)
• Option to get a fixed-rate lock

US Bank

• Credit lines from $15,000 to $750,000
• 3.85% to 9% APR
• 0.50% interest rate discount for automatic payments deducted from US bank checking
• Easy online payment calculator
• Fixed-rate options available

Third Federal

• Borrow up to 80% of your home equity
• No minimum draw requirements, closing costs, or prepayment penalties
• Lowest rate guarantee (they’ll beat the lowest rate you find or pay you $1,000)
• 3.74% variable APR
• $65 annual fee waived the first year

Citibank

• Borrow up to $1 million (up to $500,00 for online applications)
• 5.49% variable APR
• Option for interest-only draw period vs. principal and interest draw period
• Ten year draw period. 20 year repayment period.
• Special rules for collateral property located in Texas

PenFed Credit Union

• Credit lines from $25,000 to $500,000
• 3.75% to 18% APR
• $99 annual fee (waived if $99 in interest was paid during the previous 12 months)
• Most closing costs covered by PenFed
• Credit lines available for non-owner occupied homes

Flagstar Bank

• Credit lines from $10,000 to $1 million
• Intro 3.49% APR for six billing cycles
• 5.49% to 21% variable APR thereafter
• 0.50% interest discounts for automatic ACH withdrawals from Flagstar account
• No bank-imposed fees if HELOC remains open for 36 months

Navy Federal Credit Union

• Home equity lines from $10,00 to $500,000
• Borrow up to 95% of your home equity
• No application fees, origination fees, annual fees, or inactivity fees
• 0.25% interest discounts for automatic payments
• Interest-only equity lines available

SunTrust

• Credit lines from $10,000 to $500,000
• Intro APR of Prime -1.51% for 12 months
• 4.50% to 6.14% APR after
• Option to choose between fixed or variable rate
• No closing costs

If you think a home equity line of credit is right for you, I’d recommend the lenders listed above. Make sure you shop around to ensure you’re getting the best deal.

Also consider a home equity loan or cash-out refinancing as an alternative to a HELOC. All of these options come with advantages and potential drawbacks.

A Guide on Home Equity Lines of Credit (HELOC) is a post from: I Will Teach You To Be Rich.

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Everything You Need To Know About The 2020 RRSP Explained

The 2020 RRSP deduction limit (contribution room) has increased to $27,230. This is up from the 2019 limit of $26,500. That is the main change you need to know for planning your 2020 RRSP contributions this year. Are you new to RRSPs or have some questions on what they are and how they work? Wondering [...]

The post Everything You Need To Know About The 2020 RRSP Explained appeared first on Money After Graduation.

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Can You Have Too Many Credit Cards?

Most of us use credit cards daily. With credit card companies offering outstanding benefits and enticing sign-up bonuses, it can be tempting to get new cards on a regular basis.

This begs the question, how many credit cards should I have?

There is no golden rule response to this question. It makes sense for some people to have more credit cards than others. In July 2019, Zheng Xiangchen set a Guinness Book World Record for holding 1,562 valid credit cards.

I’m not sure how many credit cards is too many but that definitely counts. I don’t need 1,562 cards.

Before you pull the trigger on all the snazzy signup offers, there are several factors that need to be taken into consideration.

How The Number of Credit Cards Will Impact Credit Score

The number of credit cards you have will have a direct impact on your credit score.

In some cases, having more credit cards can help boost your credit score. Before we get into the specifics, you need to understand how your credit score is calculated.

Your FICO score is comprised of five different categories, each carrying a different weight:

• Payment History — 35%
• Amounts Owed — 30%
• Length of Credit History — 15%
• New Credit — 10%
• Credit Mix — 10%

Payment History

This is the most significant factor in determining your credit score. It consists of credit payments from all forms of debt (car payments, mortgage, loans, etc.), but credit card payments hold substantial weight.

That’s because credit card companies tend to be unforgiving when it comes to late payments. If you’re tardy or miss a payment, it will be reported to credit bureaus immediately, which has a negative impact on your score.

So if you’re juggling too many credit cards and forget to make a payment, it can significantly hurt the largest factor of calculating your credit score. In other words, never get more cards that you can comfortably manage and pay every month. Otherwise, it won’t be worth it at all.

Amounts Owed

This is also referred to as your credit utilization or debt-to-credit ratio.

Credit utilization is calculated by measuring the amount of your outstanding credit card debt against your total available credit. In short, it measures how close you are to reaching your credit limit.

Just because you have a $10,000 credit limit, it doesn’t mean you should be charging $10,000 per month. This will raise your debt-to-credit ratio and effectively lower your credit score.

Always keep your credit utilization below 30%.

In this case, having multiple credit cards can help boost your credit score because you’ll have a lower debt-to-credit ratio. If your average monthly credit charges are more than one-third of your total credit, getting another card is one way to increase your score.

Getting new cards is actually the easiest way to boost your credit score, especially if you haven’t asked for a limit increase. If your credit score has improved a lot since the last card you got, you could get a new card with a limit that’s 2-3X the limit of your old one. That will dramatically lower your credit utilization assuming you keep your monthly spending constant.

Length of Credit History

Your length of credit history is determined by a few different factors.

• Age of your oldest credit account
• Age of your newest credit account
• Average age of all credit accounts

The time since new accounts have been established and how long it’s been since certain accounts have been used also fall into this category.

Getting a new card, or multiple new credit cards will change the average of your credit accounts. Even if you have old accounts, that average age can easily be dragged down by opening too many cards in the present.

But this is a short term hit. Over time, that average gets older and older. Eventually, you’ll have a batch of really old accounts that give you a boost.

New Credit

While new credit isn’t weighted as heavily as other factors, it still has an impact on your credit score. Each time you open a new line of credit, expect your score to drop at least a few points.

Your score can actually drop twice when you’re applying for a new credit card.

1. When the creditor makes the initial inquiry on your credit report.
2. When the account is officially opened.

Applying for too many credit cards in a short period of time is a big mistake. Not only will the inquiries lower your score, but it’s often a red flag for credit bureaus. So go slow as you build out your ideal mix of cards. And never apply for new cards before taking on a major loan like a mortgage or a car loan.

Credit Mix

Your credit mix shows the different types of credit accounts you have. People with high credit scores have a credit portfolio that includes credit cards, auto loans, mortgages, retail accounts, and installment loans.

If your entire credit mix is comprised of just one type of account, it won’t be as high as it could be.

The Average Number of Cards People Have

According to a recent study, the average American has 2.6 credit cards. However, this number is a bit skewed since it includes the percentage of Americans who don’t have any credit cards.

If you eliminate that group and only include Americans who have at least one credit card, the average jumps up to 3.7 cards.

Let’s break these numbers down even further:

• 29% of people have zero credit cards
• 33% of people have 1-2 cards
• 18% of people have 3-4 cards
• 9% of people have 5-6 cards
• 7% of people have 7+ credit cards

As you can see, the biggest chunk of American credit card holders falls in the 1-4 range.

This doesn’t necessarily mean that the national average is the perfect number for you. In fact, the same study revealed that people with an average FICO score above 800 (which is excellent) have 10 open revolving credit lines.

With that said, this includes other types of revolving credit, such as a bank line of credit. But most people won’t have more than one of those. So it’s safe to assume that the average American with a credit score above 800 has 4 or more credit cards.

This seems logical since people with high credit scores will qualify for more cards with attractive terms. So it gives them more of an incentive to have additional credit cards.

However, this takes time. If you currently have a credit score above 800 with just two credit cards, applying for five new cards tomorrow is not a good idea. This will lower your score for all of the reasons that we previously discussed.

Does The Number of Cards Really Matter?

In most instances, yes—the number of credit cards you have does matter. Having too many credit cards or opening too many credit accounts will ding your credit score.

Low credit scores can hurt your ability to get favorable loan terms. So if you’re eventually planning to buy a house or a car, you’ll want your credit score to be as high as possible. This will save you money in the long-term on interest payments.

If you have a low credit score, you could even run into problems getting approved to rent an apartment.

Other potential issues with having too many credit cards include:

• Paying high annual fees
• Losing track of your bills and payment status
• Falling into the trap of spending more money

With complexity comes more chances to make a mistake. One missed payment on a credit score will do more damage to your credit score than all of your optimizations combined.

If you’re not 100% confident in your ability to never miss a payment, I recommend sticking with 1-2 cards. And only get 4+ if the extra perks are truly worth it to you. Err on the side of having fewer cards rather than more.

Why Have More Than One Credit Card?

Having more than one credit card is a great way to build credit. If you have a long history of making on-time payments with multiple creditors, your score will increase.

Getting new credit cards will lower your utilization ratio, which is another factor in having a strong credit score.

When your score is high, it’s an excellent opportunity to apply for a new card. Just make sure you understand how your credit score will be impacted by this decision. Don’t get a new credit card if you’re planning to apply for a mortgage in the subsequent months.

Having more cards is a great way to unlock a ton of perks. Especially across travel credit cards, you could make a case for having:

• A Chase rewards card
• An American Express rewards card
• 1-2 airline cards
• 1 hotel card

That’s 5 cards which would give you broad access to airport lounges, tons of flexibility on how to redeem points, perks on most of your flights, free nights and room upgrades to hotels, and free status to airline, hotel, and rental programs which give even more perks. It’s definitely an advanced rewards system for folks that love to travel but still simple enough to manage.

Even having 1 extra airline card can unlock great perks when traveling. It really comes down to if you think the extra annual fees are worth the perks that you get on each card.

Can You Have Too Many Credit Cards? is a post from: I Will Teach You To Be Rich.

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A brief guide to cybersecurity basics

Last Monday, I got an email from Spotify saying that somebody in Brazil had logged into my account.

I checked. Sure enough: A stranger was using my Spotify to listen to Michael Jackson. I told Spotify to “sign me out everywhere” — but I didn't change my password.

On Wednesday, it happened again. At 2 a.m., I got another email from Spotify. This time, my sneaky Brazilian friend was listening to Prince. And they apparently liked the looks of one of my playlists (“Funk Is Its Own Reward”), because they'd been listening to that too.

I signed out everywhere again, and this time I changed my password. And I made a resolution.

You see, I've done a poor job of implementing modern online security measures. Yes, I have my critical financial accounts locked down with two-factor authentification, etc., but mostly I'm sloppy when it comes to cybersecurity.

For example, I re-use passwords. I still use passwords from thirty years ago for low-security situations (such as signing up for a wine club or a business loyalty program). And while I've begun creating strong (yet easy to remember) passwords for more important accounts, these passwords all follow a pattern and they're not randomized. Worst of all, I maintain a 20-year-old plain text document in which I store all of my sensitive personal information.

This is dumb. Dumb dumb dumb dumb dumb.

I know it's dumb, but I've never bothered to make changes — until now. Now, for a variety of reasons, I feel like it's time for me to make my digital life a little more secure. I spent several hours over the weekend locking things down. Here's how.

A Brief Guide to Cybersecurity

Co-incidentally, the very same day that my Spotify account was being used to stream Prince's greatest hits in Brazil, a Reddit user named /u/ACheetoBandito posted a guide to cybersecurity in /r/fatFIRE. How convenient!

“Cybersecurity is a critical component of financial security, but rarely discussed in personal finance circles,” /u/ACheetoBandito wrote. “Note that cybersecurity practitioners disagree over best practices for personal cybersecurity. This is my perspective, as I have some expertise in the area.”

I won't reproduce the entire post here — you should definitely go read it, if this subject is important to you — but I will list the bullet-point summary along with some of my own thoughts. Our orange-fingered friend recommends that anyone concerned about cybersecurity take the following steps:

1. Get at least two hardware-based security keys. My pal Robert Farrington (from The College Investor) uses the YubiKey. Google offers its Titan Security Key. (I ordered the YubiKey 5c nano because of its minimal form factor.)
2. Set up a secret private email account. Your private email address should not be linked in any way to your public email, and the address should be given to no one. (I already have many public email accounts, but I didn't have a private address. I do now.)
3. Turn on Advanced Protection for both your public and private gmail accounts. Advanced Protection is a free security add-on from Google. Link this to the security keys you acquired in step one. (I haven't set this up because my security keys won't arrive until this afternoon.)
4. Set up a password manager. Which password manager you choose is up to you. The key is to pick one that you'll use. It's best if this app supports your new security keys for authentification. (I'll cover a few options in the next section of this article.)
5. Generate new passwords for all accounts. Manually create memorable passwords for your email addresses, your computers (and mobile devices), and for the password manager itself. All other passwords should be strong passwords generated randomly by the password manager.
6. Associate critical accounts with your new private email address. This will include financial accounts, such as your banks, brokerages, and credit cards. But it could include other accounts too. (I'll use my private email address for core services related to this website, for instance.)
7. Turn on added security measures for all accounts. Available features will vary from provider to provider, but generally speaking you should be able to activate two-factor authentification (with the security keys, whenever possible) and login alerts.
8. Turn on text/email alerts for financial accounts. You may also want to turn on alerts for changes to your credit score and/or credit report.
9. Activate security measures on your mobile devices. Your phone should be locked by a strong authorization measure. And each of your individual financial apps should be locked down with a password and any other possible security measures.

/u/ACheetoBandito recommends some additional, optional security measures. (And that entire Reddit discussion thread is filled with great security tips.)

You might want to freeze your credit (although, if you do, remember that you'll occasionally need to un-freeze your credit to make financial transactions). Some folks will want to encrypt their phones and hard drives. And if you're very concerned about security, purchase a cheap Chromebook and use this as the only device on which you perform financial transactions. (Believe it or not, I'm taking this last optional step. It makes sense to me — and it may be a chance for me to move beyond Quicken.)

Exploring the Best Password Managers

Okay, great! I've ordered a new $150 Chromebook and two hardware-based security keys. I've set up a brand-new, top-secret email address, which I'll connect to any account that needs added security. But I still haven't tackled the weakest point in the process: my text document filled with passwords.

Part of the problem is complacency. My system is simple and I like it. But another part of the problem is analysis paralysis. There are a lot of password managers out there, and I have no idea how to differentiate between them, to figure out which one is right for me and my needs.

For help, I asked my Facebook friends to list the best password managers. I downloaded and installed each of their suggestions, then I jotted down some initial impressions.

• LastPass: 16 votes (2 from tech nerds) — LastPass was by far the most popular password manager among my Facebook friends. People love it. I installed it and poked around, and it seems…okay. The interface is a little clunky and the feature set seems adequate (but not robust). The app uses the easy-to-understand “vault” metaphor, which I like. LastPass is free (with premium options available for added cost).
• 1Password: 7 votes (4 from tech nerds) — This app has similar features to Bitwarden or LastPass. The interface is nice enough, and it seems to provide security alerts. 1Password costs $36/year.
• Bitwarden: 4 votes (2 from tech nerds) — Bitwarden has a simple, easy-to-understand interface. It uses the same “vault” metaphor that products like LastPass and 1Password use. It's a strong contender to become the tool I use. Bitwarden is free. For $10 per year, you can add premium security features.
• KeePass: 2 votes — KeePass is a free Open Source password manager. There are KeePass installs available for all major computer and mobile operating systems. If you're a Linux nut (or an Open Source advocate), this might be a good choice. I don't like its limited functionality and its terrible interface. KeePass is free.
• Dashlane: 2 votes — Of all the password managers I looked at, Dashlane has the nicest interface and the most features. Like many of these tools, it uses the “vault” metaphor, but it allows you to store more things in this vault than other tools do. (You can store ID info — driver license, passport — for instance. There's also a spot to store receipts.) Dashlane has a free basic option but most folks will want the $60/year premium option. (There's also a $120/year option that includes credit monitoring and ID theft insurance.)
• Blur: 1 vote — Blur is different than most password managers. It quite literally tries to blur your online identity. It prevents web browsers from tracking you, masks email addresses and credit cards and phone numbers, and (or course) manages passwords. I want some features that Blur doesn't have — and don't want some of the features it does have. Blur costs a minimum of $39/year but that price can become much higher.
• Apple Keychain: 1 vote — Keychain has been Apple's built-in password manager since 1999. As such, it's freely available on Apple devices. Most Mac and iOS folks use Keychain without even realizing it. It's not really robust enough to do anything other than store passwords, so I didn't give it serious consideration. Keychain is free and comes installed on Apple products.

Let me be clear: I made only a cursory examination of these password managers. I didn't dive deep. If I tried to compare every feature of every password manager, I'd never choose. I'd get locked into analysis paralysis again. So, I gave each a quick once-over and made a decision based on gut and intuition.

Of these tools, two stood out: Bitwarden and Dashlane. Both sport nice interfaces and plenty of features. Both tools offer free versions, but I'd want to upgrade to a paid premium plan in order to gain access to two-factor authentification (using my new hardware security keys) and security monitoring. This is where Bitwarden has a big advantage. It's only $10 per year. To get the same features, Dashlane is $60/year.

But here's the thing.

I started actually using both of these tools at the same time, entering my website passwords one by one. I stopped after entering ten sites into each. It was clear that I vastly preferred using Dashlane to Bitwarden. It just works in a way that makes sense to me. (Your experience might be different.) So, for a little while at least, I'm going to use Dashlane as my password manager.

The Problem with Passwords

My primary motive for using a password manager is to get my sensitive information out of a plain text document and into something more secure. But I have a secondary motive: I want to improve the strength of my passwords.

When I started using the internet — back in the 1980s, before the advent of the World Wide Web — I didn't spare a thought for password strength. The first password I created (in 1989) was simply the name of my friend who let me use his computer to access the local Bulletin Board Systems. I used that password for years on everything from email accounts to bank sites. I still consider it my “low security” password for things that aren't critical.

I have maybe eight or ten passwords like this: short, simple passwords that I've used in dozens of locations. For the past five years, I've tried to move to unique passwords for each site, passwords that follow a pattern. While these are an improvement, they're still not great. Like I say, they follow a pattern. And while they contain letters, numbers, and symbols, they're all relatively short.

As you might expect, my sloppy password protocol has created something of a security nightmare. Here's a screenshot from the Google Password Checkup tool for one of my accounts.

I get similar results for all of my Google accounts. Yikes.

Plus, there's the problem of account sharing.

Kim and I share a Netflix account. And an Amazon account. And a Hulu account. And an iTunes account. In fact, we probably share twenty or thirty accounts. She and I use the same easy-to-remember password for all of these sign-ins. While none of these accounts are super sensitive, what we're doing is still a poor idea.

So, I want to begin moving toward more secure passwords — even for the accounts I share with Kim.

The good news is that most password managers — including Dashlane — will auto-generate randomized passwords for you. Or I could try something similar to the idea suggested in this XKCD comic:

The trouble, of course, is that each place has different requirements for passwords. Some require numbers. Some require symbols. Some say no symbols. And so on. I don't know of any sites that would let me use four random common words for a password!

For now, I'm going to take a three-pronged approach:

• I'll manually create long (but memorable) passwords for my most critical accounts. This is the XKCD method.
• For the accounts I share with Kim — Netflix, etcetera — I'll create new, memorable passwords that follow a pattern.
• For everything else, I'll let my password manager generate random passwords.

This seems like a good balance between usability and security. Every password will be different. Only the ones I share with Kim will be short; all others will be long. And most of my new passwords will be random gibberish.

Final Thoughts on Cybersecurity

In this short video from Tech Insider, a former National Security Agency security expert shares his top five tips for protecting yourself online.

You'll note that these are similar to the Reddit cybersecurity guide I posted earlier in this article. Here are the steps he says to take to keep yourself safe:

• Enable two-factor authentification whenever possible.
• Don't use the same password everywhere.
• Keep your operating system (and software) up to date.
• Be careful with what you post to social media.
• Do not share personal information unless you're certain you're dealing with a trusted company or person.

I won't pretend that the steps I'm taking will protect me completely. But my new system is certainly an upgrade from what I've been doing for the past 20+ years — which was, as I've mentioned, dumb dumb dumb.

And I have to confess: I like the idea of restricting my online financial life to one computer — the new $150 Chromebook. I'm not sure if this is actually doable, but I'm going to give it a go. If this works, then I may see if I can find a money-management tool that I like for the machine. Maybe then I can finally leave Quicken 2007 for Mac behind!

What have I missed? What steps have you taken to protect your online accounts? Which do you feel is the best password manager? How do you create memorable, secure passwords? How do you handle shared accounts? Help other GRS readers — and me! — develop better online security practices.

from Get Rich Slowly https://ift.tt/3cbONXh

Passive income ideas you can try today

Earlier this week, J.D. wrote about what he calls the biggest truth in personal finance: You can't get rich through frugality alone. As Liz at Frugalwoods says, “You can't frugalize income you don't earn.” Income is one-half the fundamental personal-finance equation, and it's probably the most important half.

J.D. advocates a three-pronged attack for boosting income: becoming better educated, becoming a more valuable worker, and learning to negotiate salary. But I think he's missing a fourth important income source: the proverbial “passive income”.

I know, I know. Passive income has a bad reputation. Actually, passive income has a terrible reputation. And deservedly so. The Land of Passive Income is populated by scammers, hucksters, and charlatans. “Hey, little boy, wanna buy my course?” (Sorry, no links. They're easy enough to find without us helping them.) That's too bad because legit sources of passive income can be a great way to make more money.

What is Passive Income?

First up, let's be clear: Actual passive “passive income” (as pitched by the scammers) is a lie. It doesn't exist. When we talk about passive income, we're talking about ways to make minimal money with minimal effort. Does that make sense? And it's a supplement to your main income, not the primary source.

To me, passive income is money that’s earned, usually on a recurring basis, without a significant time investment.

For example, if you own a rental property that brings in $1500 each month, but only requires two or three hours of time to manage, that's (mostly) passive income. Most nine-to-five jobs are the opposite of this. The income you earn is tied closely to the amount of time you spend at the office.

That’s not to say that passive income doesn’t require effort, though.

Often, there’s a lot of upfront work required before income can become passive. Using the same rental property example, before you can make any money, you have to purchase and renovate the property, and spend time advertising and interviewing potential tenants. All of that takes time and money.

Or, take J.D.'s book as an example. When I asked, he told me that he spent four months working full-time in 2009 and 2010 to write Your Money: The Missing Manual. That's not passive! But he hasn't touched the thing since then, and he continues to receive $50 checks every month. That is passive.

Passive Income Ideas You Can Try Today

Some degree of passive income is possible — and without shyster shenanigans. In this article, I’ve compiled 40 passive income ideas for you to consider. Not all of these passive income ideas will be right for you. In fact, maybe none of them will fit you. That's okay. But I'm willing to bet that many GRS readers will find at least one source of inspiration here that they can use to help increase their income…even if it's only a few dollars per month.

Pay Down Your Debt

Debt reduction isn’t the first thing that comes to mind for most people when they’re looking for ways to increase their income. But it should be.

Monthly payments on anything from high interest credit cards to expensive car loans can be a real drain on your bottom line. Sometimes the easiest way to improve cash flow is not to make more money, but to lower your expenses.

I recommend that you start by totalling up your debt, and then look for ways to pay it down more quickly. Depending on your situation, you might consider combining everything into one manageable payment, by taking out a consolidation loan. If you do have a large car loan payment, and are feeling stuck, you might be better off in the long run cutting your losses, and downgrading to a more modest vehicle.

(Need more help? Here's our guide on how to get out of debt.)

Invest in a High Interest Savings Account

There’s no longer an excuse to have your cash sitting in a checking or savings account not accruing interest. These days, you can find a ton of online savings accounts offering a solid yield. Everything about this income is passive. In most cases, you can open an account within minutes from the comfort of your living room, have your funds transferred in, and start earning interest on your cash savings almost immediately. You won’t get rich with a savings account, but it’s a great way to get your emergency fund working for you. Here’s a list of some of the top savings accounts available today. Remember that rates are subject to change:

Invest in Certificates of Deposit

If you are interested in earning a higher yield on your money than a savings account will offer, without the volatility that comes with stock market investing, a Certificate of Deposit (CD) can be a nice alternative that will earn passive income. CDs are commonly offered by banks and credit unions, and allow you to invest your money for a fixed time period, from just a few days to several years. Typically, the longer you lock in your money, the higher the return. CD yields should keep pace with inflation, with the downside being that you don’t have access to your funds on a day-to-day basis. What they do give you is a source of passive income without the risk.

Earn Income in a Checking Account

Checking accounts are not known to be a place where you can earn income, that’s what savings accounts and other investments are for. But these days, there are a growing number of checking accounts that will pay you a tiny percentage yield on your balance. While it may only be a couple of dollars here or there, it can help to negate some of the other fees you might incur on your account.

Robo-Advisor Investing

AI technology has reduced the amount of effort required to do so many things, including investing. You no longer need to meet face to face with an investment advisor to build a suitable investment portfolio.

Nowadays, you can sign up with a robo-advisor like M1 Finance or Acorns, and have a customized portfolio ready in minutes. From there, you’re on your way to building passive investment income. Of course, you’ll need to provide your robo-advisor with the pertinent details, such as your investment objective, risk tolerance, and investment time frame, but from there, your money will be invested in a hands off, low fee ETF portfolio that is automatically rebalanced on a regular basis.

Invest in Dividend Stocks

One of the ways publicly traded companies return value to their shareholders is in the form of dividends. One of the best ways to create passive income is by buying stocks that have a history of paying dividends. As the value of your investment grows, your dividend will also grow, creating a steady source of passive income.

If you stick with it long enough, you may earn enough to live off of the dividend income, while leaving your capital to appreciate in value as share prices rise. The combination of dividends and capital gains makes for a great 1-2 punch of passive income. With most discount brokerages like E-Trade and Charles Schwab now offering free stock trades, investing in the stock market has never been more affordable.

And here's our introduction to dividend reinvestment plans.

Invest in a REIT

Real Estate Investment Trusts (REITs) are an easy and affordable way to invest in a well diversified real estate investment portfolio. The income from a REIT is even more passive than owning a rental property, because you don’t have the upfront work of finding tenants, not to mention the ongoing maintenance. A REIT is similar to a mutual fund, in that you purchase units of a REIT. Income comes in the form of profit earned by the REIT. Companies like Fundrise have made REIT investing even easier with their crowdsourcing approach, allowing you to get started for as little as $500.

Invest in artwork 

This has got to be one of the more unique passive income opportunities on this list, and it really is passive. For centuries, the world’s most exclusive artwork has only been available to the wealthiest segment of society. But that is changing, with the help of companies like Masterworks. They source paintings by top performing artists, then issue a circular with the Securities Exchange Commission (SEC) to offer it to the public. Once this happens, you can purchase fractional shares of the painting, in essence owning a tiny piece of valuable artwork. Over time, when the artwork has appreciated in value, it is sold at a profit, with each individual investor receiving a percentage of the proceeds. One thing to keep in mind with this type of  investment is that it is purely speculative, and relatively illiquid. In other words, you must be willing to part with your entire investment. 

Peer-to-Peer Lending

Peer-to-peer lending, otherwise known as P2P lending, is an online platform that matches lenders and borrowers. Here’s how it works. Individuals, or in the case of a lender like Worthy, small businesses, borrow money from hundreds, even thousands of individual lenders, who have pooled their money together. Once the borrower repays their loan in full, the lender gets their principal investment back, along with interest. Because they lack the high overhead of traditional brick and mortar lenders, peer-to-peer lending companies are able to issue loans at lower interest rates, while providing better than average returns for investors. Here are a few of the more well known P2P lending companies:

Peer-to-Peer Lenders

• Lending Club
• Street Shares
• Worthy

Use a Rewards Credit Card

One of my favorite ways to make passive income is by using a rewards credit card. Every month, I run the majority of my spending through my travel credit card, which in turn earns points that I can use to pay for flights, hotels, car rentals, you name it. The card also comes with private airport lounge access, and a full suite of complimentary travel insurance.

Of course, credit card points will only benefit you if you are able to pay off the balance in full every month. If not, the interest you’ll pay will far exceed any points you’ll earn towards free travel or cash back. If you don’t already have a travel rewards credit card, or aren’t happy with yours, check out our handy travel credit card comparison tool.

Buy Vending Machines

Vending machines have been around forever, and they remain a tried and true way to earn passive income. You’ll need to check on your machines regularly and keep them filled with product, but otherwise there’s little to no work involved in the day-to-day operation. If you can find the perfect locations for your machines, it’s like having your own personal ATM. Vending machines can vary from a simple gumball dispenser, to a snack or soda machine.

Rent Your Space

If you have a spare room in your home, or an entire house you can make available to guests, you can earn passive income by renting out your space through sites like AirBnb and VRBO. This is a great way to get your property working for you, and for the most part, the income is passive. You don’t even have to worry about marketing, as the sites you list on will bring your customers to you. Your job is to decide when and how often you want to list, and that the space is clean and ready to accept guests.

Buy a Rental Property

There are a number of ways you can create passive income with real estate, one of them being to own a rental property. Often, the lowest barrier to entry is to keep your existing home as a rental when you move. Not everything about owning a rental property is passive, mind you. You’ll need to look after any required maintenance, and of course, screening potential tenants takes time. But if you can find a solid tenant for your rental, you should be able to sit back and watch the money roll in.

Here's our guide to getting started with real estate investing.

Purchase a Self-Storage Facility

With the industry now approaching $40B, self-storage facilities have become a massive business in the US. While there is a large upfront investment required, if you have the resources, building or buying a self-storage facility can be a great way to earn passive income. The revenue is recurring as well, with most customers renting units on a monthly or annual basis.

Display Ads on Your Car

Did you know? There are companies that will pay you to wrap your car in advertising. If you don’t mind driving a billboard on wheels, Wrapify will pay you upwards of $100/week to display advertising on your car. The amount of passive income you’ll make will depend on how far you drive, and where you live. By connecting to an app on your mobile device, Wrapify can track your mileage as you drive.

Rent Out Your Car

The sharing economy has brought about plenty of side hustles that make it possible to earn money by letting others use your stuff. Take your car for example. If you have a late-model vehicle sitting in your driveway for hours at a time, you can make some extra cash by renting it out on an app like Turo.

Turo connects vehicle owners with people who need a car to drive, and are looking to avoid the high prices that car rental agencies charge. The nicer your car, the more money you can charge. The best part is that Turo does most of the heavy lifting, by bringing customers to you, and managing the payment and insurance component of the transaction.

Rent Out Your RV

Owning a motorhome is enough to stretch most people’s budget, but thanks to companies like Outdoorsy and RVShare, you now have the option of renting out your RV when it’s not in use. They connect you with renters via a mobile app, and you get to set the price, and the time period when your RV will be available. With an average rate of around $200/day, you could even make enough money to pay for your own RV adventures.

Rent Out Your Boat

If you own a nice boat, you can list it on sites like Boatsetter, and rent it out to someone who will use it for fishing, sailing, or watersports with friends. Depending on how passive you want this to be, you can choose to captain the boat, or leave it for your guests to manage on their own. Like RVs, boats are a luxury item that don’t often get used, making this an ideal passive income source. I ran a couple of searches on Boatsetter and GetMyBoat, and found rates in excess of $1000 for a full day.

Rent Out Your Stuff

We’ve covered cars, RVs, and boats, but the list of things you can rent out doesn’t end there. You can list cameras, tools, even sports equipment on a site like Peer Renters, and make money by renting them out to people who perhaps can’t afford to purchase the items outright, or just have a limited use for the item.

Sell Handcrafted Goods on Etsy

If you are crafty, you can sell your creations on Etsy, a massive online marketplace for handcrafted goods. Depending on the amount of labor involved in making your product, this might be a less passive form of income, but Etsy allows you to expand your reach beyond local craft shows. Whether it’s handcrafted jewellery, clothing, soap, or kids toys, Etsy places your creations in front of a global audience.

The former Mrs. Money Mustache uses Etsy to earn extra income.

Design and Sell T-shirts Online

Through marketplaces like Merch by Amazon, you can make your own t-shirt designs and sell them online. What makes this a great side hustle is that there is little to no upfront cost. You simply upload your designs, and Amazon fulfills your orders on-demand, including shipping. You earn a royalty for every shirt that’s ordered. All you need to do is come up with a great design that will sell.

Dave from Accidental FIRE designs and sells t-shirts online. (J.D. says he wants a few of these!)

Become a Rideshare Driver

If you have a decent car, enjoy driving, and don’t mind interacting with people, you can make decent money by driving for a rideshare company like Uber, or Lyft. One nice thing about this side hustle, is the flexibility. You choose when and how often you want to work. Of course, this income source isn’t purely passive. You’ll need to trade your time to make money. That said, there are plenty of jobs out there that are a lot more labor intensive than chatting with customers as you shuttle them around town.

Last year, our pal Josh Overmyer shared the pros and cons of becoming a rideshare driver here at GRS.

Get Paid to Shop Online

Websites like Rakuten (formerly Ebates) pay you to shop online. When you shop at your favorite retailers directly from the Rakuten website, you’ll earn up to 20% cash back, which is paid to you via a monthly check or PayPal. You can also redeem your rewards for gift cards to your favorite stores. Sign up for Rakuten, and start earning passive income while you shop.

Complete Online Surveys

Let’s be clear, no one will ever get rich by taking online surveys. In fact, there are a lot of scams out there that are nothing more than a complete waste of time. But if you have some time on your hands, and you just want to make a few extra bucks, online surveys can help. You can complete surveys while doing other things, like watching TV, or riding on the bus. Survey Junkie and Swagbucks are two of the more reputable sites out there.

J.D.'s girlfriend has tried online surveys. Her verdict? They're fun and you can make some extra money while watching TV, but you won't get rich with them.

Earn Songwriting Royalties

If you love to write music, you can create passive income by recording your songs and then publishing them through a variety of channels. You earn royalties anytime your music is played on streaming services like Apple Music, or Spotify, or played on the radio. You can even license your music for TV, movies, and videos without the backing of a major record label. Companies like Tunecore and CDBaby work with independent artists by publishing their music worldwide, then collecting and paying out any royalties that are due. This is a great passive income stream that can last for many years.

Purchase Music Royalties

Perhaps your talent isn’t to write music. That’s ok, you can still get into the music royalty game by purchasing the rights to song catalogues owned by other artists. Royalty Exchange is an online auction that allows you to bid on existing music catalogues. These are songs that are already earning regular, passive income for their current owners. When you purchase music royalties, you’re buying the future cash flow, which is purely passive income.

Photo Licensing

Photographers can build passive income by selling stock photos online. You’ll need to produce lots of content to earn a decent amount of money, but it can be a nice supplement to other, more labor intensive work, like wedding or family photography. One benefit to stock photo licensing is that you can sell the same pictures to many different buyers. There are no shortage of stock photo websites where you can sell your work. Dreamstime and Snapwire are just two of the more popular stock photo sites out there.

Record an Audiobook

One of the best ways for content creators to increase their income is by releasing their content in as many formats as possible. For example, if you’ve written a paperback book, or even an ebook, you’ll want to consider recording an audiobook version. There are no shortage of people who prefer listening to books instead of reading them. You can record the audio yourself, or pay someone else to do it for you. Once your audiobook is ready to go, it can be available for purchase online for years, making it the ideal passive income source.

Sign up for Sleep Studies

To some, this may seem like the dream way to earn passive income, no pun intended. Sleep researchers need test subjects for their studies, and it’s a gig that can pay very well. That said, it’s not as easy as it may sound. Often, participants are required to put on hold many of their daily routines ie. social media, extracurricular activities. If this is something you think you’d like to do in the name of science, you can begin by searching this government website for available opportunities.

Sell Your Data

I’m personally not a fan of this passive income idea, because I value my privacy, but there are companies that will pay you to share your smartphone data with them. For it to work, you need to install an app on your phone that records your activity throughout the week. The money isn’t great, $5 or $10/month, but if you’re open to this kind of thing, it certainly qualifies as passive income.

Buy an Existing Website

If you prefer to start earning passive income instantly, you may want to consider purchasing an existing website or blog that’s already generating cash flow. This is a great way to get involved in an online business without having to build it from scratch. There are thousands of websites available for sale through online marketplaces like Flippa, and in many cases, these businesses are already producing a positive cashflow every month.

Of course, the more income they’re producing, the higher the purchase price. On average, you can expect to pay a 2-3X multiple on the annual income earned by the website. Also, it’s important that you do your research before you buy. Make sure the monthly income is stable, and that the potential is there for continued growth. Also, I recommend sticking with a niche that you understand, and have some expertise or prior knowledge of.

Buy and Sell Domain Names

Buying and selling domain names is a bit like trading on the stock market. The goal is to buy low, and sell high, but there can be some risk involved. There are people who earn good money buying domain names that they believe will increase in value over time, with the hopes of selling at a profit. If this sounds like a passive income strategy you’d be interested in trying, here are some tips on selling domain names for profit.

Of course, you could always be like J.D., who owns dozens of domains that he'll never use. Silly man.

Start a Blog

Whenever I write about blogging as a way of making money, it’s usually good for a few raised eyebrows. It seems everyone is starting a blog, hoping to make money. Can it be done? Absolutely, but you need to be willing to play the long game.

Over time, it’s possible to create multiple passive income streams with a blog, through affiliate marketing, or display advertising, for example. But building a blog from scratch is anything but passive. You’ll need to be consistent in creating new content, and spend time promoting your blog. One of the best things about blogging is the low barrier of entry. If you have a computer and a wifi connection, you can get started for as little as a few dollars per month.

But maintain realistic expectations. Even this website doesn't produce a full-time income at the moment!

Start a Podcast

It seems everyone has a podcast these days, and while many people do it out of pure enjoyment, there’s a lot of money that can be made. As you build a reliable following, you can begin selling advertising via sponsorships to brands that wish to get in front of your audience. Make no mistake, there’s a lot of work involved in finding guests and conducting interviews, but the opportunity to build a passive income stream is there. One way to reduce your workload is by outsourcing tasks to writers, podcast editors, and graphic designers.

Start a YouTube Channel

If you can consistently create videos that people want to watch, you can build an audience on Youtube. This is important, because with an audience, you can begin to make money, by joining the YouTube Partner Program. Most of your earnings will come from ads, which are aired within your video content, however, there are more ways to make money. YouTube can also drive traffic to your website and social media channels, making the passive income opportunities endless.

Sell Digital Products/Downloadables

Thousands of people earn passive income by creating digital products that people can download and use. From spreadsheets to productivity tools, calendars and checklists, the possibilities are endless. Once you’ve created your winning product, you can make it available for download on your own website, or through a third party platform like Gumroad.

Develop an Online Course

If you have expertise in a specific area, rest assured there’s someone out there willing to pay you for your knowledge. You can create an ebook on the topic, or develop an online course, and then sell it on your own website, or on an online learning marketplace like Udemy. No skill is too small to share with others. You could sell a course on creating a killer resume, starting a podcast, or how to travel hack a trip to Europe. With online courses, most of the hard work happens early on, when you’re creating the content. From there, with an effective marketing strategy, you’ll have yourself a nice, passive income stream.

When J.D. created his Get Rich Slowly course in 2014, it took several months of full-time work. But when he was finished, he had a nice source of passive income.

Run Website Display Ads

If you have your own website, you can sign up to have ads displayed within the content on your site. The most well known ad service is Google Adsense. Adsense displays ads that are relevant to your site content and that match your visitors preferences. When guests engage with an ad, you make money. Also, the higher your site traffic, the higher your income. What I like about display ads is that it really is passive income. Once your ads are set up, there is no work involved, leaving you to focus on what you do best, which is run a great website.

Affiliate Marketing

If you have your own blog or website, one of the best ways to make passive income is through affiliate marketing. Affiliate marketing involves promoting someone else’s product or service, and earning a commission whenever a sale is generated directly from your recommendation. The most well known affiliate program may be the one run by online retail giant Amazon, but there are thousands of other companies with programs of their own. Affiliate income takes time to build, but if you’re successful, it can be one of the best ways to make passive income.

Dropshipping

Dropshipping is a form of e-commerce where the seller doesn’t hold the product, instead, it’s shipped to the customer directly from the supplier. The seller’s job is to find products to buy at a wholesale price, and then sell them at the retail price, by advertising them through an e-commerce store, like Shopify. When orders are placed, they go directly to the supplier who ships the product to the customer. The seller profits from the spread between the retail and wholesale price. Dropshipping has become very competitive, but if you can find a product that people want, and sell it at a profit, there’s lots of passive income to be made.

Learn to Outsource

If you’re an entrepreneur, chances are you have a tendency to want to control all aspects of your business. After all, no one else understands it like you do, nor is anyone else as invested as you are. But the problem with doing everything yourself is that the money you make becomes anything but passive.

Many business owners burnout simply because they’re not willing to outsource tasks to others. These days, it’s easy to hire a virtual assistant, or other freelancers who can perform a wide variety of tasks. This frees up time for you to focus on doing the things that only you can do. Upwork and Fiverr are good places to start looking for freelance talent.

Final Thoughts on Passive Income

Back in 2007, when this blog was young, J.D. reviewed Don Lancaster's 1978 book, The Incredible Secret Money Machine, a book loved by J.D.'s father. (The book is now available as a free PDF from the author's website.)

The book's premise is simple: Create a series of “money machines” that generate a steady supply of “nickels”. Although the book is overtly about creating small, hobby businesses, it covertly embraces the “passive income” mentality. Lancaster urges readers to create lifestyle businesses that require minimal effort to maintain.

I hope this list of passive income ideas can act as a source of inspiration for some of you seeking to build your own money machines. You won't get rich with any of these suggestions, but you could find a way to produce a stream of nickels to supplement your income. That's not so bad, is it?

There's no shortage of ways to make passive income. What’s interesting, is that most of the ideas I’ve come up with are things that you can do online, from the comfort of your home. Of course, it’s important to remember that passive doesn’t mean easy. There can be weeks, months, even years, of hard work that goes into building an income stream. And sometimes your effort won't pay off. (J.D.'s girlfriend tried to start an online business a few years ago. If it had worked, she would have had a stream of nickels. She only got pennies instead, so decided to shut it down.)

Passive income takes time and effort. But if you’re patient, the payoff can be worth the effort.

from Get Rich Slowly https://ift.tt/2w6g7WF