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Ah! The Spoils of Credit Card Usage

earning credit card rewardsI like to consider my battle with debt as a little war.  I waged on for four years fighting back the enemy of credit card debt and learning so much along the way.  I know I gave so much to the credit card companies in the form of interest payments. They laughed all the way to the bank uh…front door?  Luckily for me, I lost a few battles, but ended up winning the war. I have been credit card debt free since 2012.  I have enjoyed not having to make monthly payments to the credit card company, which mostly consisted of interest.  Though my battle put a sour taste in my mouth, it didn’t throw me off from using credit cards again.  In fact, I picked up a new credit card a few months later to start using the methods I learned during battle.

To the victor go the spoils!

How many of you have heard that line before? Do you know what it means?  It basically means whomever wins a conflict wins extra benefits beyond the conflict. This is a perfect quote for me based on the way I use credit cards now.  I won the battle with credit card debt and now I enjoy the benefits of credit card rewards.  Yes, that is right my friends. I use credit cards to get sweet, sweet rewards.  I don’t stop at cash back. Oh no!  I love me some travel rewards as well.   There is nothing better than racking up points and then getting to use those points to pay for a nice little getaway.  Oh yes, the spoils!

Credit Card Rewards Are Rewarding!

I would never tell someone in debt to start trying to earn credit card rewards.  I learned a valuable lesson during my four year debt repayment journey.  The most valuable lesson of all was the real reason behind my uncontrollable spending.  Once I got that under control and behind me, I was able to use credit cards wisely.  There are some who read here and other blogs that say credit cards are evil!  Those little devilish b**tards!  How dare they force you into uncontrollable spending with no regard to your feelings.  If you couldn’t tell from that line, I was lining it with heavy sarcasm.  Credit cards are not evil.  They can be a very useful tool in your financial toolbox.  When used appropriately, you can realize some great benefits.

I got my first taste of credit card rewards when I got my first American Express card.  I used the card for gas and groceries and earned money back. I got to put that money toward the balance and it felt good.  Now, I haven’t spent more than I would on my debit card and that is a secret to using credit cards wisely.  If you spend like you normally would, why not earn some benefits?  I don’t see a problem with it.  I am not being hypocritical because I never blamed credit cards for my problem.  I was the problem, not the piece(s) of plastic.

An Almost Free Trip to New Orleans

My latest taste of credit card rewards came in the form of a trip to New Orleans.  There is a sweet blogging conference down there and I have been wanting to meet up with some of my favorite bloggers.  Well, my wife heard it was in New Orleans and wanted to come as well. She has no interest in the conference, but really wants to go to New Orleans.  Luckily for us, we have some credit card rewards ready to go.  I signed up for the Barclaycard Arrival Plus World Elite card and earned enough miles to cover the entire trip, less $50. So for a trip for two down to New Orleans, including flight and hotel, we only had to let go of $50!

As I look at it, I realized I can get that $50 covered with the dividend Barclaycard gave me. You get 10% back in miles when you redeem. Sweet candy pie ladies and gentlemen!  Just so you know, they still offer a 40,000 mile sign up bonus when you spend $3,000 in the first 90 days.  That is equal to $400!

This will be the first trip my wife and I take alone since we had our son almost two years ago.  We are really looking forward to enjoying New Orleans and meeting new people.  All of this was funded by credit card rewards.  I didn’t do anything special.  I didn’t even manufacture my spending (OK, I did a little..).  I just spent like I normally would and just put it all on my credit card. The key to earning rewards is to never let your balance go unpaid each month.  You have to pay your balance every month.  I have not paid a cent in interest to any credit card company since I paid off my outstanding debt.  It feels good. I just can’t wait until I can earn enough rewards to recoup all of the money I willingly gave the credit card companies.  That will feel really good!


Image via Tax Credits

Dividend Paying Stocks: One Way to Make Money in the Stock Market


Dividend Paying StocksIf you’re a regular reader of Sprout Wealth then you know we like to talk about different ways to make money. Some of those are uncommon ways while others are more common. Investing in the stock market, in my opinion at least, is one of the more common ways to make money and grow your wealth.

With that in mind, one of my favorite ways to make money in the stock market is through dividend paying stocks. Dividend paying stocks, while not always foolproof, are one of the best ways to make money in the market as they’re as close to passive income as you can get…from the stock market that is.

Although the market or the dividend stock itself may go up or down you still get the dividend (I’ll discuss more on this later) which is money in your pocket. That’s not too bad in my opinion. Seeing as Warren Buffett is a huge fan in dividend paying stocks, I think I’m in pretty good company. 😉

Dividend Paying Stocks Bring a Known Return

If you’re not certain what a dividend paying stock is, it’s essentially done by the given company as a way to return wealth to its shareholders. These are typically not growth related companies (think technology companies and newer companies) but rather more mature companies.

Depending on the company, most dividend paying stocks will pay shareholders a certain amount of money per share on a quarterly basis. Others will do it on a monthly or semi-annual basis, but most are quarterly. These payments can either be received in cash or reinvested to buy additional shares of the stock.

Personally speaking, I like to reinvest into additional stock as I’d rather have it work in the stock market for me, but either works just fine. Simply put, I love dividend paying stocks as they bring in passive income that I do nothing to gain. Other than free money through a 401k match, there’s not much better I can think of.

Getting paid a dividend is great, but some dividend paying stocks are better than others. When I’m investing in dividend paying stocks, I tend to focus on Dividend Aristocrats. These are dividend stocks that have increased their dividend payout every year for the past 25 years. You can find a list of the Dividend Aristocrats here and it’s an understandably short list. That said, I love to look at solid dividend paying stocks as a way to bring in some known return when investing in the stock market.

One Warning on Dividend Paying Stocks

It may seem as I’m all sunshine and lollipops on dividend stocks. While I do think they can be a great addition to a portfolio, they’re not without issues. First and most important, they can change.

Do you remember what happened with BP a few years back? They had been a solid dividend paying stock that many retirees had as a part of their portfolio. Well, they canceled their dividend to help pay for the cleanup of the Gulf. The same thing happened with GE during the recession. They slashed their dividend by 2/3 as a way to not pay out too much. The point being is that they’re not guaranteed and if counted on for income it hurts to be impacted.

There is also the belief that dividend paying stocks perform better when the stock market is down, though I’ve seen no evidence to support that. The other issue that many overlook is that when you receive a dividend it is considered taxable. I spoke to upset investors on a daily basis who had no idea that dividends were taxable. The amount may vary by individual, but they are taxable. The way I get around this is by only investing in dividend paying stocks in retirement accounts, so you will want to keep that in mind.

Diversity is Key

Now that we’ve sort of taken a pro/con look at dividend paying stocks, it’s worth pointing out that diversity is key when it comes to investing. I believe solid dividend paying stocks can be a great addition to low-cost index funds in order to be more fully diversified. That’s also not to mention the fact that they can be a great way to gain income through investing. Of course, you need to be mindful of how your portfolio is performing, but slow and steady wins the race when it comes to investing so you need to keep that long-term view as opposed to being unwieldy.

If you’re looking to invest in dividend paying stocks, there are various ways you can accomplish that. There are numerous index/mutual funds that specialize in them; you can invest in the individual stock itself; or, you can create your own fund through places like Motif Investing that allow you to create your own dividend portfolio. I personally like to go the cheapest and easiest way to accomplish a goal, though that’ll look different for everyone based on your specific situation.


Do you invest in dividend paying stocks as a way to bring in more income? What are some other ways you look to make income from the stock market?


Photo courtesy of: Lending Memo



*This post was featured on Home Money Easy, Frugal Students and His Finance.

What is MLM and Why Do Only a Few Succeed?


I got an email from someone the other day talking about his idea of trying to help others get out of debt and grow wealth.  Since I do love the idea of teaching people to grow wealth, I read his entire email.  After a few more paragraphs (the email was long…), I realized all this guy was talking about was a multi-level marketing program or MLM.  He was just a guy trying to recruit people to work under him, so he could score some sweet commissions.  All I could do is laugh, but then I figured I would talk more about MLM here on Sprout Wealth.  The reason I want to talk about it is because it is extremely hard to succeed in these programs and many of them are scams.

What is MLM?

As I indicated, MLM stands for multi-level marketing and they are essentially programs where salespeople are compensated for items they sell, but for the items the people they recruit sell.  So, if you are a salesman and you  recruit five other people to sell the products, then you are compensated for the items the people you recruited sell.  If your recruits get people under them, then you will get a part of their sales as well.  If you draw this out, guess what it looks like?

Multi-Level Marketing

It looks kind of like a pyramid doesn’t it?  That is because it really is.  The person or persons who start the marketing program are the ones that benefit the most.  They either charge the people below them fees to be a part of the program and then take some commissions or they tell them they have to buy and use the products they sell and also take a cut of any thing they sell.  It is the classic pyramid.

The funny/sad thing about these programs is they are still very popular around the US and the world. Why so?  It is the allure of being your own boss and making money on your own.  Who doesn’t love the thought of being rich and being their own boss?

Why Only a Few Succeed at MLM Programs

There is no mystery the top few make the most in MLM programs.  The reason is the power of minions (ie…salespeople).  As you can see in the graphic above, the top person has a number of salespeople under him.  Most MLM programs require those below you to pay you a part of their sales in commissions.  The more people you recruit, the more money you make.  If you are good, then you can have a salesforce of thousands all working to sell products.  Anytime a sales is make, the commissions flow up.  If you are the bottom, then your sale gets commissioned all the way up the chain.  As the salespeople increase, the original top level people get less cut of commissions, but they get get more sales.  This just means more money flowing into their pocket.

At one point, there was a statistic where anywhere between 60 and 90% of people in MLM programs quit within the first year.  The reason this is so high because most people realize there is no money to be made.  Though the turnover is incredibly high, there are so many prospects to take up that spot, so these programs keep on thriving.

It is incredibly difficult to make money because these programs let anyone in.  You don’t need to have any skills or knowledge of the product.  Some programs require their recruits to pay for the program and marketing  materials.  This fee is then distributed up the stack.  Others just require you purchase their products and use them. This creates a buying cycle of these products.  If there are very few requirements, then really anyone can become a part of these programs. Because of this, there is increased competition.  If you live in a big city and you recruit people in your network, then you are instantly competing with them to sell products. As your network builds, it is harder to sell the products.  It is the simple process of over-saturation.

Are MLM Schemes Scams?

Go into Google and type “MLM scams” and see what you find.  There are so many stories of programs which swindle their people and sell products which are overpriced and over-promise. While I can’t say all MLM programs are scams, there are too many which are. This is why they have bad names and get a bad rap.  Technically AVON and Amway are MLM programs, but many don’t think they are scams.  It really depends on how these programs are run. When you tell people to sell products which are crap or overpriced, then you are setting up your network to fail.  Over time, customers realize this and stop buying product or air their grievances.

I would never recommend anyone get involved in these programs. Why?  I used to be a part of one and I learned quickly the error of my ways.  I had spent over $200 in college to become a “seller” of products on eBay.  I could recruit more people to sell these products and I would get a cut.  Low and behold, there were so many people selling these crappy products that there was no way you could compete.  It was stupid.  Also, you need to remember you don’t own your business nor are you a business owner.  You are technically just an independent contractor to the main company.  You can even just be considered a salesperson or affiliate.  If your dream is to become a business owner, then MLM is not it.  Go check out other ways to make money here on Sprout Wealth for legitimate ways to earn that dough.


Have you seen MLM programs or thought about becoming a part of one?



*This post was featured on 2 Copper Coins

Why Working for Yourself Isn’t All That it’s Cracked Up to Be


Working for yourselfOur good friend, DC, over at Young Adult Money wrote a great post a few weeks ago on 4 Reasons Not to Quit Your Job to Start a Business and it really got me thinking as it can apply to us here at Sprout Wealth.

For those who don’t know, I quit my day job a little over two years ago to help manage the budding business my wife started several years prior to that. It would be easy to think that since I’ve told the man where to stick his job that I’d be all for people quitting theirs. That couldn’t be farther from the truth. In fact, I think working for yourself is a something you that you should tread into lightly. Why? Hear me out.

Working for Yourself Sucks

I’ve always wanted to work for myself. In fact, I had wanted to start my own business for decades. I had visions of sleeping in to whatever hour I wanted. I thought I’d be putting in little in terms of work hours. I don’t know where on earth I got that idea, because that’s not at all the reality of running your own business. I’ve worked more days in the year and longer hours in each day in the past two years than I have at any other point in my life.

I’m not complaining. I’m, just trying to be real about what it’s like to work for yourself. While the “man” might feel burdensome, just think of some of the things you give up the second you quit your job:

  • A paycheck…duh, the easy one 🙂
  • 401(k) plan
  • Health insurance – though this one is likely on its way out in some form or fashion
  • Continuing education
  • Tuition reimbursement
  • Plus a whole host of other benefits depending on the job

You can have all of those things when you work for yourself with a small but significant difference…YOU are responsible for them. That’s also not to mention the fact that you’re responsible for crazy things like finding the business and making sure you have an appropriate emergency fund in place when business slows down. As someone who has seen the latter, it does happen! Be prepared for it.

Why it Sucks Even More

If the above isn’t enough to scare you off from working for yourself, consider this: Potential clients are going to lie straight to your face. It happens to us all the time. People take forever to pay you. We have a client we did a one off job for four months ago that we’re still waiting to be paid for.

Do you feel expendable at your current job? You’re even more expendable when you’re a contract worker. If you’re not there in person then you’re likely one of the last things on their mind. Times get tough and your business is likely the first expense to get cut. That’s also not to mention that a non-working vacation is next to impossible.

Why Do I Do it Then?

The easy answer would be that I’m just a little bit…ok full blown…neurotic. That aside, I do it because I love it. I love that my wife and I can work on work we enjoy and choose. I love that we can set our own schedule. I love that when it comes time to get paid that money is ours thanks to our hard work. Granted we get the privilege of sending a massive chunk of it to the IRS, but that said, it’s ours.

You might be asking yourself what this has to do with building wealth and that would be a fair question. I don’t talk about our income often, or really at all, but we’re making more than we ever were when both of us were in the corporate world. It feels good to be able to say that because it shows me how far this little side hustle my wife started five years ago has gone. That just pushes me even more. To not only earn more, but to meet more people, to help more businesses and to teach our kids not to feel held back if they want to be entrepreneurs.

The other reason why I love it is that I’m a visionary. That would surprise some as I’m a big detail guy, but I love setting a vision and then working to reach it. It drives me and pushes me to achieve my best. Not everything is a success, though you learn from your mistakes and it pushes me more. That is how I am with our business.

Where Should You Start

I realize that I’ve sort of been all over the place with this post. I guess the point is that if you are thinking of working for yourself to take the decision seriously. On one hand, you’re in good company. An old study from Intuit states that at least 40% of the work force will be self-employed by 2020. That is less than six years away. While you may be surrounded by excitement to quit your job and begin working for yourself know that it’s a serious decision. Don’t let excitement around you convince you to make a decision that could be unwise.

Instead, look for areas where you can grow yourself and expand what you have to offer in order to grow your side hustle. Diversify that so you can weather ups and downs if you do eventually take the plunge into self-employment. Take advantage of what learning opportunities your employer offers so you can grow yourself. If it’s free, by all means, take advantage of it.

Beyond that, have a vision in mind. I’m not saying know where you want to be in 20 years, but have an idea of where you want to take your aspirations. That will help remind you why you’re doing what you’re doing. That also means being honest with yourself as to what your role is going to be while working for yourself; if you’re a contract worker, the only difference between you and an employee is inconsistency and uncertainty about where your next gig will come from.

Simply put, don’t jump into self-employment without a plan as you’ll likely only regret it in the long run. You can still do great things with a side hustle that will help you grow your income and in turn your wealth. If you can grow that into a self-sustaining business, that’s even better!


Do you want to work for yourself/start your own business? Why or why not? If you do work for yourself, or have in the past, what is the biggest challenge you’ve encountered and how did you handle it?




Photo courtesy of: PT Money

What Is Your Money Making Value Proposition?


value propositionI wrote some time ago in our freelancer’s guide to making money about one’s value proposition.  I figured I would expand on this topic as it is not only an important part of business, it could be the part the really makes or breaks your business idea.  There are millions of money making ideas out there, but that doesn’t mean they are all good or viable.  Making money requires a couple of things to come together before you can succeed.  These are typically offering a service, having a good price, taking care of your customers, and knowing your value proposition.  I want to focus on the last part, the value proposition, as it encompasses everything else.

What is a Value Proposition?

A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

What sets you apart from your competition?  This is really what it all comes down to. There are millions of blogs, millions of sellers on eBay, and millions of people selling on Craigslist.  What makes you different from these people?  Most people I talk to try to compete solely on price.  That is a losing game for sure.  While pricing is important in any business, it is not the only thing, and sometimes isn’t even the most important aspect.

When I was running my e-commerce business, I tried to compete on price.  After some time, I realized I was dedicating my time to price wars. This was cutting into my already razor-thin profits, so I had to think of something else.  After going back and forth, I realized my value proposition was my customer service and fast shipping.  While people love a low price, they really enjoy customer service more.  I slowly made a name for myself for awesome and responsive customer service.  This is what brought people to my online store and what pushed them to buy.  Before I shut down my company, I was selling over $1 million each year.  Not bad for a one man show!

How to Find Your Value Proposition

There are many times you might  not know what your value is to your customers.  It isn’t always apparent when you first start your business or money making idea.  That is OK, but you do have to take time to realize your proposition and then market it to your customers.  I run a WordPress blog management service, where I help people care for their blogs on the technical side.  While there are other services such as mine, I try to provide a personal touch.  I make sure my customers know what is going on and I go above and beyond what they pay me to do.  I also make sure I am fast to respond to their questions or concerns.  While I do have a competitive price with regards to such a service, I don’t market that point.  I market my responsiveness and attention to detail.  My customers trust me in managing their blogs and that is what I sell.

I didn’t know what my value proposition was when I first started my service.  I thought I would compete and price and that alone.  This was until a customer sent in a nice review about how responsive I was.  I heard that from a few more customers.  After seeing it a number of times, I realized my value had just fallen into my lap.  While I didn’t focus on it when I started, I do now.  This is what sets me apart from others.

You may not stumble across your value proposition early in your new business or money making idea, but you have to find it soon.  Maybe one of your first customers can nudge you the right way with a comment or email.  You never know where it might come from, but once you find it, market it!  It is becoming increasingly difficult to find a unique product or service these days.  Instead of trying to find the next big thing, just tweak a service that offers customers a different value.  That is how you make money and succeed!

If you are a freelancer or own a business, what is your value proposition?

Do You Have What it Takes to Churn Credit Cards?


Credit CardsWe like to talk about credit cards here on Sprout Wealth. While both Grayson and I have had our share of credit card debt to deal with in the past, we have both come to see that credit cards are not evil. In fact, when used wisely they can be a great tool in your financial toolbox.

Since I have been long reformed in my unwise spending ways I have come to love credit card churning. I know it might seem a bit counterintuitive to some, but there is a point to it…I get free stuff out of it. That said, I know that there can be some fear and apprehension at the thought of credit card churning and I hope to address that here.

An Unconventional way to Make Money

I have come to enjoy churning credit cards because there is real money in it. My wife and I funded two trips last year thanks to churning and will likely be doing the same this year. In 2014 alone we have earned thousands of dollars in either free flights, like the US Airways credit card, or other basic travel-related activities.

You might say that we had to spend money in order to earn this and you’d be right, but all of this spending had already been planned; we did not overspend to earn the rewards – which is key. Simply put, we planned our spending around the offers we were looking at so we could maximize our earnings. If it were not for the rewards, we would have to spend our hard earned money for the traveling we want to do which would also mean we wouldn’t have the money to put away for other things like investing and growing our business. At the end of the day, credit card companies offer these crazy rewards to get more clients. We’re just bad customers by not carrying balances. 😉

Churning Credit Cards Requires Discipline

Ok, now that I’ve painted a glowing picture of churning credit cards let me step back. Before I got into churning I didn’t realize all the discipline involved in it. Of course there is the issue of staying on top of the payments and not overspending. However, there are other things like staying on top of the annual fees hitting and keeping all your cards straight in terms of minimum spends, rewards and the like.

Between my wife and I we have about 20-25 credit cards. That’s a lot to keep track of, though I know it’s nothing compared to what others have. If I wasn’t disciplined and organized, it would be a mess. If you’re considering churning credit cards then likely the best thing you can do for yourself is set up a simple spreadsheet to keep track of all your credit cards.

You will want to track such things as:

  • When you applied for the credit card
  • What the minimum spend is
  • When the annual fee is going to hit
  • When the minimum spend is required to be hit

Those are just a few of the things you want to keep track of and it’s all with the idea that it makes managing the credit cards simpler to stay on top of.

Don’t Go Overboard

If you’re like me then it can be easy to go a little overboard when you find something you like or that provides good value. This is not the time to do it. Yes, I know that it sounds a bit on the hypocritical side after sharing how many credit cards my wife and I have. One thing to remember is that we have two individuals as well as our business that we can spread our churning across.

Anyway, the reason you don’t want to go too overboard is obviously that you don’t want it to impact your credit score too much. If you’re applying all the time to get new rewards credit cards then it’ll likely impact your score negatively. There is also the point that you can only have so many cards at once until it becomes too difficult to manage.

The main point though is that you really should focus your credit card churning. Do you simply want cash back? Then go after the best offers. Do you want to travel somewhere specific? Then focus on the credit cards that will allow you to make it a reality. For example, we want to go to Europe next year so we’re focusing on churning cards that will make that a reality.

Churning credit cards can take a lot of work, but if you balance it right it can be a nice way to earn some rewards and even travel for free. The key is to be purposeful about your churning.


Do you churn credit cards? If you don’t what has held you back? If you do, what do you do to stay on top of your cards?



Photo courtesy of: Lending Memo


*This post was featured on Penny Thots

How Much Do You Need to Save Before Having Children?


money saved before babyIf we’re being honest, I think we can agree that no one has kids for the financial benefits. They simply aren’t a reliable return on investment. On the other hand, kids provide spiritual, emotional, and developmental benefits. Just don’t expect to have a lot of spare money lying around.

The average American child costs more than $240,000 to raise to the age of 18. So if you’re in the process of deciding whether or not you’re ready to have kids, it’s worth doing a little financial homework to make sure you’re in the best shape possible. Here’s a thoughtful checklist to see how much you need to save before having children.

Building Reasonable Savings

It’s easy to look at a big number like $240,000 and think there’s no way you’ll ever be able to save enough. But it’s important to look at the daily and monthly picture rather than the 18-year picture.

To make sure you’re prepared for life’s emergencies and the monthly costs of raising a child, experts agree that you should have 3-6 months of savings in a liquid savings account.

So take a look at your situation: do you struggle to maintain an emergency fund like the majority of Americans? How much do you think you could save before you have a child? Make sure it’s in this range of 3-6 months of your cost of living to provide a secure home environment for a child.

Considering Your Assets

Not everyone has their whole new worth in the form of a savings account or a retirement account. It’s also important to be building a portfolio of assets that can grow over time as your family grows with as little daily maintenance and worry as possible.

For example, if you have stocks, bonds, real estate, or other investments, tally those up inside your net worth and see where that puts you, financially. Evaluate what you have, what you plan to have, and how those costs will figure into your net worth over time.

If you don’t have any investable assets, the time to change that situation is now. Look into researching a few options and see if you can invest in growing your portfolio before you grow your family. That way you can reap the rewards that come with investing early, compounded interest, and take some financial pressure off of your future self.

Evaluating Potential Income

The process and experience of having a child is all about building a future for your family. The same goes with the process and experience of preparing your finances for having a child; it’s not just about what you have right now but about what you will have in the future and as time passes.

When you evaluate your current financial situation, take a look at the future, too. You should take into account the potential future income you will be able to earn. In many industries, the more experienced you are, the more you’ll be able to charge for your services and your position. That means your earning power will rise over time, making that $240,000 seem less and less of a financial iceberg.

Understanding Needs and Wants

Another important factor to keep in mind is that once you have children, your needs and wants are likely to change drastically. Things that seemed important or worth the cost may not seem so important or worthwhile as they did before. This goes for anything from fancy dinners out to vacations across the country.

While your child-related costs may increase, your childless-costs may decrease too, evening out some of those costs. Having a better understanding of your needs and wants as they are now may help you identify places within your budget that can be decreased accordingly.

At the end of the day, there’s no such thing as “enough” when it comes to raising kids. Emergencies and accidents happen, costing you more money than you thought you’d need in the first place. On the other hand, your child might also surprise you with how little you need compared to what you planned for.

At the end of the day, you need to be able to cover your rent and financial responsibilities while saving a little for the future — and a little one adds to those responsibilities. Take a good hard look at your current level of savings, try to build your assets as much as possible, and keep your future earning potential in mind.

Author Bio: Rich Ellinger is a serial software entrepreneur with a passion for investing. His latest company, Wealthminder, strives to help do-it-yourself investors create a workable financial plan and then marry that plan to a sensible investing strategy, all online. You can read more of his work at The Enlightened Investor.


Image via Meagan




*This post was featured on Momma Makes Cents, Business Action for Water and Aspiring Blogger.

The Key to Making Money from Affiliate Marketing – Diversity


affiliate marketingSince my first post on affiliate income tricks I’ve been asked a number of questions about other keys to making money from affiliate marketing. I won’t rehash much of my original post, but the basic gist is that you need traffic, and targeted traffic at that, to really be successful with your affiliate marketing strategies.

Many, though not all, bloggers dream of starting a blog, promoting a single product on their website and hoping the heavens will open up and dump massive amounts of money into their laps. Allow me to let you in on a little secret…it’s not going to happen. Yes, there are some outliers, but by and large you’re not going to promote one item and have it become a wild success. That’s just not how it works.

That doesn’t mean that you won’t have success, just that there is a lot of time and effort that goes into making money from blogging. With that in mind, one of the keys I’ve found to be true about increasing your affiliate income is diversity. Simply put, promoting more than one item or product.

Making Money from Affiliate Marketing is Similar to Investing

I know the comparison breaks down at some point, but it is still a valid one. You want to think of affiliate marketing like you do investing in the stock market. If you know anything about investing, you don’t want to invest in two or three individual stocks and call it a day. That would open you up to a variety of risks. With that in mind, you want to have a relatively broad and diverse portfolio. Though not perfect, this allows you to better withstand what may be going on in the stock market.

Making money from affiliate marketing works in a very similar way, though it took me some time to figure that out. A variety of factors impact the level of affiliate income you’re able to make. Things such as:

  • Seasonality of products (like tax season or the Holidays)
  • Lower traffic periods (like the summer)
  • The ever changing whims of Google

If you’re promoting only one or two products, especially those that are seasonal in nature, your affiliate income is likely going to take a massive hit once that season is over. Take tax products for example. We all know that people work on their taxes in the beginning of the year and even up to the last minute. You also have those who filed for extensions and are working on them in October.

If you depend on a tax product for a bulk of your affiliate income, then from late Spring all the way through Summer, your affiliate commissions are likely going to look somewhat bleak. Thus, you want to find other products to add to your affiliate marketing arsenal to help smooth things out. You will still likely feel the loss of income somewhat, but having a broader affiliate marketing portfolio will help you not feel the hit as much.

I know what you might be thinking…’I don’t know how many products I can promote.’ I have dealt and deal with that as well and it does beg a question.

Should You Use Products You Promote?

I’m not really wanting to start a debate over whether or not you should use products you promote as that’s not really the point of the post. I believe there can be decent arguments made on both sides. I can see people thinking that since I run an advertising business I would promote anything I wanted through affiliate marketing channels.

However, I would say that I generally either currently use, have used in the past, or have extensive experience with at least 90% of the affiliate products I promote on my sites. What works for me may not work for you, but this is the approach I’ve decided to take.

My reasoning for this really comes down to one thing: I have experience with those products. I can write about them naturally and avoid sales jargon. Having experienced them myself, it allows me also to know what the pros and cons are a little better and thus not communicate in a gushing way about certain products. I would also wager to guess that the same would be true of you and the affiliate products you can promote. Whether you believe it or not, readers can pick up on this, so it can impact your affiliate marketing success to a certain extent.

Affiliate Marketing Takes Time

If you want to have diversity in your affiliate marketing efforts, you must realize that it takes time. If the skies rained money after putting up a website and there was no effort required, everyone would be doing it and we’d all be rolling in money. As Grayson discussed in his basics of affiliate marketing post, that time goes back to a number of things: finding the right affiliate network, getting approved for advertisers, promotion, and much more.

More importantly, you need to build trust with the reader. If you’re constantly selling to them, it’s likely you’re going to garner less trust. You need to be willing to promote items you get nothing from financially. While I love to make money from affiliate marketing, it’s also important to note that we have an obligation to point readers to products and services that save them money or improve their lives in some way, regardless of whether or not we’re making something from it.

Lastly, time is an issue because you will have instances where you will need to test out different strategies to see what works and what doesn’t. What I have found in my affiliate marketing efforts is that I’m always making tweaks until I get to the level of success I want. By having a diverse affiliate marketing portfolio you can afford to take that time knowing that you have other products that are picking up the slack when you’re working to improve on other fronts.


What are some ways you can add diversity to your affiliate marketing efforts? How long did it take you to see that affiliate marketing takes time to build?



Photo courtesy of: Andrew Magill

Are You a Side Sloucher or Side Hustler?


sloucher versus hustlerI was having a conversation with a friend the other day about work.  This was more of the “how is work going” kind of talk, but then it morphed into my ever so popular side hustles.  Most of my friends know I work on the side. They just don’t know how hard I work ;).  When friends pry, I don’t mind spilling the beans.  They typically don’t understand how I can make money blogging, but that is not my problem.  I tell them the honest truth about it and how hard I work each and every night.  There is a ton of work going on in my household once my son goes to sleep.  My fingers are tamping down on plastic keys until midnight comes around.  While most think it is cool, they also think I work too much.  I do, but I have goals.  I’m a side hustler, baby!

I’m No Slouch

This particular conversation turned into what we do on the weekends and at nights.  My friend comes home, eats dinner, then relaxes in front of the TV or with Netflix on.  I, on the other hand, come home, play with son and hang out with my wife.  When my son goes to bed, my wife and I eat dinner.  Most nights I watch a little tube with her, but then when she heads off to bed, I get down to business.  I am a night person through and through.  I can run most nights easily past midnight and have no problems.  I am no morning person and don’t pretend to be one.  Unfortunately, my full time job calls me each and every morning during the week.

I have always been someone who works on the side. I get a thrill from building something from the ground up and it succeeding.  Not everything I do works well.  Hell, most things I do don’t work well, but I still keep going.  I never quit.  The reason?  I am determined to change my financial future with my actions today.  Only I have control over what happens to me financially.  If I want to be financially independent, then I have to make that happen.  I don’t count on winning the lottery (you can’t win if you don’t play) and I don’t plan on getting any windfalls.  I will be earning my financial independence one dollar at a time.

The Slouch Vs. The Hustler

I am not really calling my friend a slouch here.  That would be rude and he works quite hard during his work hours.  With the term “slouch” I am referring to wasting time watching TV when you can be making money.  I don’t mind watching television, but if I am, I will also be working on my computer. I multitask like the best of them.  All the time I spend on my computer is possible money in my pocket.  Yes, not everyone can make money on a computer, but the possibilities are growing. We show you how here on Sprout Wealth, along with traditional ways to earn more cheddar.

So, when you are sitting there watching what the real housewives of some place are bitching and complaining, I will be earning money.  When you are watching mind numbing commercials one after the other, I will be making money.  Do you see the trend here?  While some choose to relax after a day’s work, I choose to keep grinding it out.  While I am working hard now, I won’t be working hard in the future.  My hard work now will pay off sooner and I will be able to make financial steps to secure my independence before most.  I am not talking about retiring early.  I am just talking about having many options to choose from and picking what is best for me.  I work for money now, so money can work for me later.


So what about you?  Are you a sloucher or a hustler?

Want to Make Money Blogging? Here is the Honest Truth!

The truth about making money bloggingI get constant emails from people asking the same question.  “How do I make money blogging?”  Well, isn’t that the million dollar question.  Luckily my blogging friend, Michelle from Making Sense of Cents, just wrote a great post about different ways to make money while blogging.  She listed some of the most popular ways to earn that cheddar when you run a blog.  I actually use most of them on my blogs, including this one.  Instead of answering this very generic question, I am going to break down a statement Michelle put in her post.  She did go a little into detail about it, but I wanted to share even more information about the behind the scenes of a blogger.  First, her is what she said in her post.

Blogging is not an easy way to make money.

Such a simple sentence, yet it is truly powerful.  The first thing I say to people wanting to jump into the blogging game is to realize it is a lot of hard work. When I say a lot of work, I mean

A Lot of Work!

Did that work for you?  I have been blogging since WordPress was first released back in 2003.  I have not been on the same blog ever since, but I still have been in the game.  One of the most common things I see is when a blogger comes onto the scene and then disappears a few months later.  The reason is they underestimated how much work blogging really is.

This is magnified when you want to make money from your blog.  Yes, it is possible to earn money blogging. I have met many of the great bloggers who make thousands upon thousands each month from blogging.  They share their story and how they do it.  What they don’t divulge as much is how much work they did before they “hit it big.”

There are No Overnight Successes

When you see other bloggers making money, you might get excited. If they can do it, then why can’t you?  I love the enthusiasm and I encourage it. I don’t ever want to discourage a new blogger, but I do want them to know the effort it takes to make even just a few dollars.  While your readers might see just a new post on the site, they don’t see what goes on behind the scenes.  Here is what happens when a blogger needs to put up a post.

  • Create a list of topics for posts
  • Pick the post topic
  • Research
  • Writing
  • Finding Images
  • SEO (search engine optimization)
  • Scheduling post
  • Sharing new post on social media

These are just some of the things that need to be done just to put up one blog post.  This doesn’t even touch marketing your blog, networking with other bloggers, answering emails, dealing with technical issues, designing the blog, and many other things.  There is a lot of work in order to have a successful blog.  You constantly have to think of new post ideas along with new ways to attract readers.

Treat Your Blog Like a Business

One of the biggest mistakes I see from new bloggers trying to make money is they don’t treat their blogs like a business.  If you make the plan to monetize your blog, then you need to treat it like a business.  Make sure you keep cash flow positive and you make good business decisions.  When your blog is just personal, then you can post when you want and the content can be all over the place.  When you blog for the reason of sharing information and making money, then you need to crank out targeted content for the type of people you need to reach.  This means keeping a steady posting schedule and working with other bloggers to get your name out there.

Don’t Be Discouraged. You Can Make Money Blogging

One big point I want to get across is that you CAN make money blogging. I do it, John does it, and many other bloggers do.  The statistic will show that the minority of bloggers make money. Very few make anything.  The majority of bloggers do not make one dime during their tenure.  That is just how it is.  The difference between those who make money and those who don’t is the drive.  You can’t just build it and expect people to stop by.  That is not how the internet works.  There are more than 60 million WordPress powered blogs and that is not all of them.

If you really want to make money blogging, then you just have to ask a blogger who already does.  Most of us will be happy to share some of our tips.  Just realize blogging is not a get rich quick scheme. You will not make money over night. You might not even make money in your first year.  The key is sticking with it and trying different methods.  If you keep going, you are more likely to succeed.

Related: Click here to get a WordPress blog installed for free!

Have you made money blogging?  What is your number one tip for new bloggers?


Image via jmoneyyyyyyy