Today I want to talk about things I’m doing now to make money, and what’s been working for me. I’m a strong believer in creating multiple streams of income to get a head in life, and to get to where you want to be financially.
What that means for me right now is debt free. I don’t carry credit card debt, I paid for my car in cash, and when it comes to debt, my biggest concern right now are student loans.
I started out with a principal balance of $45,000 and at the moment I’m down to $35,000 which doesn’t seem terrible however if you look at what I’ll actually pay over the life of the loan with interest I calculate it to be about $61,500, and that doesn’t take into consideration the fact that I’ve switched to an income based repayment plan which stretches the term, and adds more interest over the life of the loans.
I know some of you out there are much worse off and carrying significantly more student loan debt than I am, and I feel for you. This article is for you. The more money you can make, the faster you can pay off the debt, the less interest you’ll end up giving to the banks, and the sooner you’ll be able to pocket the money that once was out the door to a monthly obligation.
Aside from student loans, the only other debt I have on my credit report is my mortgage. I own a double so the rental income covers the majority of that expense. Because that debt is directly creating a stream of income I’m not as concerned about it. Also, the interest rate is fairly low. I will be adding a second mortgage, which is to purchase an investment property, so that too is not a huge concern. I’ll get into that more in a moment.
So what have I been doing lately that has been working for me? Let’s start out with the main ingredient to my income at the moment, that being my 9-5 job where I engage in the barter of my time in exchange for money. Over the past two months my salary has increased by 23.1%. How did I do it?
Well let’s just say that sometimes things don’t go according to plan and a bad situation can force you to do whatever it takes to improve your circumstances. I was working a job where I felt I was drastically underpaid, so I began looking for promotion opportunities internally within the company. The company was fairly stagnant, and I’d say, more so in damage control mode from an ugly acquisition than growing and expanding.
There were a lot of complacent people above me with no desire to leave, so with no new jobs being created, and no sign of anything opening up, my options were slim.
If you’ve ever been in an environment like this, I’ve noticed that those above you will attempt to make you believe that opportunities are there, but you’re not good enough quite yet. From their perspective it makes sense to do this because if they were open, and honest about the lack of opportunity you’d be out looking elsewhere immediately. If they can make you think you’re not good enough it buys them time and pushes you to be even more productive in an attempt to qualify yourself.
It’s important to know what you’re worth, and know where you stand. When you’re more educated than your colleagues and your productivity, and responsibilities exceed that of the majority of people above you then there’s a miss match between where you are, and where you belong. If management can’t see the value you offer and go out of their way to retain you, then you’re working for an incompetent leader and you need to take your talents elsewhere.
After the internal job search flopped it was time to expand my horizons to different companies. To make a long story short I began my search by applying for three jobs, got called to interview for two right away, was made an offer on the spot for the first one, and the interview process was just beginning for the second. I was told the decision wouldn’t be made for a few weeks and accepted the offer from the first one.
After a little negotiation, just like that, my salary jumped and now my time was worth more money. The story doesn’t end there. It turns out my new manager is absolutely psycho to the tune of yelling, screaming, swearing, and throwing things in the office. You can’t fully comprehend the stress and tense environment that comes with this territory until you’ve experienced it first hand.
First off, you’re new and on a probation period. Secondly, its your manager, so he has a position of power over you. Third, this is your primary source of income, so you need the job to pay the bills. Lastly, you just switched jobs, moved everything over, handled all the benefits and all that fun stuff, and you realize it’s not going to work out.
Luckily for me, there was that third job I had applied for in the beginning, and it just happened that I received a call to interview days after things started to get ugly.
So it was time to pull the suit out one more time for another interview. Again, I got the offer, negotiated, and my time was now worth even more money. Most people in the industry get about a 2% raise per year on average. I just compiled over 11 years of those type of raises into two months.
I wouldn’t recommend jumping jobs like this, but when you’re in an intolerable situation under someone who is absolutely unprofessional you have to do what’s best for you.
Let’s call that #1 for what I’m doing now that’s been working. It’s funny how one minute I’m hoping for a promotion internally, and a few weeks later what that promotion actually would have gotten me is laughable compared to where I ended up.
On to #2. Capitalizing on retail arbitrage and the ability to use Amazon’s infrastructure to sell large quantities of relatively small products. I’ve been selling on the internet ever since I was a kid. I remember putting a package in my back pack, hopping on my bike, and riding it down to the post office to ship things I was at the time, selling on eBay.
It was always a nice way to make some extra cash, or get rid of things I no longer had a use for. When I first heard about Fulfilled by Amazon (FBA) I immediately thought that this is something I need to be doing. Basically how it works is you go out shopping for items that are typically on clearance, or priced at a third, or less of what they’re selling for on Amazon, that are also ranked well.
Amazon has a ranking system and the lower an item is ranked numerically the faster it’s selling, broken out by different categories. Also, the faster an item sells, the higher up it will rank in searches, and the more frequently it will be shown to you in the section that says people who purchased this also bought:. It’s basically a form of search engine optimization, and putting items that sell the best in front of customers most frequently to maximize up-selling.
So you go out shopping equipped with a smart phone, professional sellers account on Amazon, and an app such as ProfitBandit, which will tell you the rank, what the item is selling for, how much profit you would make based on your purchase price, and selling price, break down of all the fees you will incur, and link to the item on Amazon. You can pull this up by scanning the bar code, or by searching for the item by it’s name/description.
I’ve partnered up with my girlfriend and since March 1, 2014 up until right now (September 18, 2014), we’ve managed to reach $47,350 in total sales revenue. UPDATE: Through January 2015 we are now up to $90,481. Not bad for two people working full time jobs, and taking this on in our spare time.
The process in its most simplest form looks like this:
- Go out and search for inventory.
- Purchase profitable items in largest possible quantity.
- Bring them home and remove all the price tags from each item.
- Add the item to your inventory on Amazon.
- Select the items you want to ship to Amazon to fulfill on your behalf once they are sold.
- Create a new shipment and enter in the quantity of each item you are going to ship.
- Print out bar code labels which will be used by Amazon to keep track of your inventory.
- Put the bar codes on your individual items covering up the UPC.
- Create a shipment plan. At this point Amazon will typically break up your shipment into multiple shipments, each going to a different fulfillment center.
- Break the shipment up accordingly and be sure to know which pile is going where.
- Box your shipments and weigh them.
- Input the weight of the box item Amazon, accept the shipping charges, and print the shipping labels for all boxes.
- Put the labels on the boxes, take them all to the nearest UPS store and that’s it.
Once everything arrives at the fulfillment center the items will be checked in and become available for purchase on Amazon. Then the money starts coming in and you earn your profit. Dealing with Amazon can be a hassle because there really isn’t much they’re willing to do for you as a seller. Fees will not be waived, or reversed, if you call them you’ll be put on hold, transferred around, talking to people who speak broken English, and wasting a whole lot of your invaluable time.
It’s best to do your research on Google and not bother talking to Amazon unless absolutely necessary. Additionally you’re going to run into price competition and have to choose between lowering your prices, or letting your items sit for awhile. A lot of times your biggest competitor will be Amazon who will sometime under-price you by a significant margin after you’ve sent your inventory in.
I’m not saying this to discourage anyone, but rather to prep you for things you will encounter so it won’t be disappointing if/when it happens to you. All in all, it’s a great way to earn extra money on the side but these are just some of the situations you’ll encounter an occasion if you choose to use FBA to make extra money for yourself.
The last thing I’ll mention is that Amazon is all about the costumer at the expense of the seller. The seller is the bad guy, and the customer is the good guy from their perspective. You’ll come to realize that returns happen on Amazon much more frequently than you’d think, and that Amazon will accept anything back as a return regardless, or not of whether it’s broken, missing pieces, not in the original box, etc. If it’s returned the customer gets their money back and the item will not go back up for sale.
You have to retract these items and they’ll be shipped back to you. You’ll have to find clever ways to salvage what you can, or replace them. Is it worth putting up with this on occasion? In my opinion, yes. I’m making thousands of dollars this way that I would not have otherwise, and once you get used to the process it becomes pretty second nature.
I’d also recommend finding a local business or someone who works somewhere that has a ton of boxes to get rid of because you’ll need them. Buy shipping labels to print your packaging labels on, get a tape gun, plenty of ink cartridges, scissors, a scale, mailing labels for the bar codes, sharpie markers to cross off bar codes on the boxes you’re shipping, bags for items that require bagging (rare but you’ll encounter this over time), suffocation labels that are required to go on all bags, and folders to organize all your receipts.
I can talk more about FBA in another post that focuses strictly on that, but for now that’s a great starting point.
#3 purchasing my first investment property. I happened upon a property that was relatively cheap, well maintained, and brought in a huge monthly cash flow. I wasn’t in the market, nor was I in a position to come up with the 20% down payment, and closing costs so I found a partner and we purchased the place together. We formed an LLC which will own the property with each of us 50% owners. After all expenses are covered this property should bring in $1,100 per month for us to split.
Why trade your time for money when you can own an asset that generates income for you? Eventually I would like to replace my salary with income properties, so work becomes optional. Which leads me to my next point.
Remember how I worked for the crazy guy and had to find a new job? Well by having multiple streams of income I didn’t feel obligated to endure another two weeks of insanity, so instead of tolerating that, I quit. If you don’t have other income streams in place you may be forced to stick around and take abuse in that situation. By having other ways to make money I decided enough is enough, and I could care less about the two weeks without a pay check.
The point is, by creating multiple income streams you empower yourself above that of a common worker who has all their eggs in one basket, and is so dependent upon that job that they’ll tolerate almost anything; like those who are still working for that nut job. You don’t want to be in this position. Empower yourself. I was able to work the Amazon business model full time by being off and build up a nice inventory now when it’s most beneficial just a few months before the Holiday season.
#4 and this will be my final point for today. If you’re going to have money sitting in the bank you might as well get the most out of it and I accomplish this through a Discover online savings account. It has the highest interest rate I’ve been able to find, and no minimum balance requirement. If you’re holding on to money, get the biggest return possible out of it by moving it here.
That’s all for now. I’ve got more in the pipeline and numerous projects still in their early stages. Notice the blog has not made me a dime. I do this for you for free! And also because I enjoy doing it. It’s a dream of mine to one day turn this into my primary source of income, but we’re a long way from that. Thanks for taking the time to read all that I’ve shared today. It was a bit of a long one but I’ve had writers block lately trying to determine what I wanted to say in this post.
I just covered ways of making money but if you’re interested in saving more of what you’re making then check out my post 10 Ways To Start Saving Money Now.by