Sprout Wealth

This is a post for Sprout Wealth by Donny. It provides a wealth of information!

A lot of people wonder how they can crash out of their 9-to-5 jobs, and find a way to make a better living than they are now. It’s actually possible to do that, probably more so than ever thanks to the Internet. But first you have to figure out exactly where you are right now, crunch some numbers, decide where you want to go – then create a plan for how you’ll get there.

Balance is the Key to Financial Success

The ultimate goal is achieving financial independence. The best way to do that is to identify what it is that you are good at, then creating a plan that will help you to maximize the amount of income that you can earn from it.

But there’s another side to that plan, and that’s figuring out a way to match your lifestyle and expenses with your new income.

We can think of these two aspects – income and expenses – as being the “A” and “B” sides of the same record (or CD in today’s world).

Here’s what I mean…

Figure Out How Much You Need to Earn Each Day to Survive

People usually start with the income side of the equation, but it may be a better idea to first identify exactly how much income you need to produce. That starts with figuring out how much you need to earn each day to survive. If that sounds ridiculously basic, that’s because it is.

In sales this is sometimes referred to as “knowing your numbers”, which can refer to knowing how many cold calls you have to make in order to get an appointment, and how many appointments you need to generate a sale. Whatever the income venture is, you have to know your own numbers.

That starts with knowing how much money you need to survive. You can do this by adding up and organizing how much money you’ve spent over the past six months or even a full year. It’s something like a budget, and it lets you know exactly where your money is going. It will also help you to sort out necessary expenses from other kinds.

Break down your spending into three categories:

1. Necessary expenses. These are your basic living expenses only, such as rent/mortgage payment, critical utilizes, insurance, food, debt payments, car repairs and the like. What you’re trying to do here is to identify your survival expenses – but more on that in a minute.
2. Important, but not necessary expenses. This can include what we might think of as being second-tier expenses, such as gym memberships, cable TV, cell phone plans, household services (cleaning, landscaping, etc), and any other expenses that may be desirable but not critical to your survival.
3. Luxury expenses. This is basically your fun money expenses. It includes entertainment, going out for dinner, buying clothing beyond the minimum, vacations, hobbies, and memberships, such as at a golf club.

Category #1 are the expenses that you want to pay the most attention to. These are your survival expenses, that will enable you to live, but not necessarily to live well. But if you are starting out on a new income venture, you’ll need to know what this number is, so that you can be sure that you will at least be able to cover this number. If you can cover it, you’ll cross an important goal line, in that the new venture will least enable you to survive.

If you can earn anything beyond – to cover other expenses, or new financial goals – you’ll be thriving.

If you can break your survival number down to a daily number – which you can do simply by dividing your monthly totals by 30 days – it will help you to know how much money you’ll have to earn each day in order to survive. For example, if your survival expenses total $3,000 per month, you will know that you’ll have to earn at least $100 each day in order to survive.

Why is that number so important?

First, it gives you a built-in daily target to reach for. But second, and more important, it can make earning income much more doable. For example, if you are beginning a new business venture, the idea of earning the $3,000 per month that you need to live may seem to be beyond your capabilities right now. But $100 per day may seem to be a very doable, particularly if you have a proven routine as to how you can make that much money each day.

Surviving from your new venture may seem less intimidating if you can break it down to a daily balance between what you need to survive, and how you can earn enough to cover it.

Five Easy Ways to Make Money Now

Let’s shift gears now, and go to the income side of the equation. In truth, you can find ways to make easy money simply by identifying your highest and best skills and talents. But since a lot of people are not entirely aware of what those are, let’s consider five easy ways that many thousands of people are using right now, so you know that it’s possible and very doable.

1. Sell a Product. The Internet has made this easier to do than ever. Even if you don’t think of yourself as a “salesman/woman”, pick a product or service that you strongly believe in – one that you use yourself – and feel that you can promote without conflict. You can pick just about any product or service that you like, because many companies have very generous affiliate programs, that will allow you to sell their products and services at a substantial markup. You can usually sell on a dedicated website, and the fact that you generally don’t need to keep an inventory makes it pretty much a cash-and-carry business. Do some research on e-commerce and see what you can come up with.

2. Buy (and Sell) Failed Blogs. You know all of those thousands of blogs that are out there on the web? A lot of them have crashed and burned, even though the original site content may have been solid. If you have an interest in blogging, you can purchase an existing blog for very little money (a few hundred dollars or less) particularly if the site has been downgraded by Google. You can take over the site, improve on the content, get rid of the bad links, and when the site is once again producing a generous amount of ad revenue, you can sell the site for several times more than what you paid for it. Blogs usually sell for 24 times their stable monthly revenue.

3. Freelance Blog Writing. Are there any topics that you feel passionately about, or have above average knowledge in? If you have at least decent writing skills, you can start a business writing articles for websites and blogs that are in your area of expertise. Every blog and website has a need for content. If you can provide it, you’ll be in business. The great thing about freelance blog writing is that you won’t need any capital or special equipment. You can work it on your own schedule, and it’s completely portable.

4. Buy Low/Sell High. In #2 we talked about buying and selling failed blogs. But you can apply that p rinciple to just about anything available. It’s simply a matter of buying on the cheap, and selling at a profit. You can do this with used cars, appliances, sports and fitness equipment, jewelry and even art. People are making money selling all kinds of goods on websites such as eBay, Craigslist, and even Amazon.com. Pick a line or two of goods where you have above average knowledge, then learn all that you can about pricing. After you do, you can buy at garage sales, flea markets, estate sales, thrift stores, and pawnshops. (A good read on the subject is The Garage Sale Millionaire by Aaron LePedis.)

5. Sell Your Computer Skills. If you are above average in just about any computer skill, it’s likely that you can convert that into a business that you can take just as far as you want. This can include creating and maintaining websites, graphic design, troubleshooting computer problems, search engine optimization, or even popular applications, such as PowerPoint or Adobe. There are a lot of small businesses that are run by people with something close to zero knowledge of any of those skills. Approach small businesses and website- and blog-owners, and offer your skills. Once you get rolling, it’s likely that you’ll have plenty of business.

If you want to break out of the rat race, determine how much you need to survive each day – then figure out how you can cover it by doing something that you really like. That will be the most basic step in achieving financial independence.

Author Bio:

Donny Gamble Jr. is the founder of Personalincome.org, a published author and investor. He graduated from The Ohio State University and has a passion for teaching others about alternative investment and retirement strategies. He is also a contributor for Huffington Post and Allbusiness.com.