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4 Investment Fees That Will Kill Your Portfolio

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Investment FeesWelcome back to another post in our investing in the stock market series here at Sprout Wealth. We all want to grow our wealth and investing is a key part to that. The issue we’re going to look at today is investment fees.

If you’re like me, then you hate paying fees and investment fees are among the worst offenders in my opinion. I regularly saw investors throw away their hard earned money out of ignorance because they were not paying attention to the fees associated with their investing. With that in mind, we want to help you make more informed decisions so you can have more of your money working for you as opposed to working for someone else.

Investment Fees Drag on Your Portfolio

Investment fees might seem like a small thing and you’d be right in many occasions. The problem is that many investors do not look at the long term impact of those fees. Paying 1% or more to invest in a mutual fund may seem like nothing today, but at the end of 10 years, or longer, that’s going to add up to thousands of dollars that could’ve been working in the market for you.

While you’re intending to invest in the stock market to make yourself wealthier you’re betraying your desires and ultimately making someone else rich. When I’m investing in the stock market, I’m doing so to grow my wealth, not someone else’s. This will require you to do some homework, but your future self will be thankful you did.

If you want professional management of your investments it can be a challenge to keep fees to a minimum. This is why I’m a fan of robo-advisors, like Wealthfront, that offer professional management for such a low price. Add that to a low minimum to open an account, it makes robo-advisors a worthy consideration for those who want management without the high cost.

Trading Commissions

One of the main fees associated with investing is commissions. This will especially be the case when you’re investing in individual stocks. Having worked in the online brokerage industry, I can tell you that most brokerages pay only $2 or $3 to place your trade. Now, I’ll let you do the math in terms of how much profit they’re making off of your trade. Are you mad yet? If you’re paying anything more than $7 per trade then your blood should start to boil.

What many investors don’t realize is that brokerages will often negotiate your commission charge. This will, of course, vary by the brokerage and amount of money and trading you do with them. However, don’t overlook this if you do any type of investing in individual stocks. Many of the bigger online brokerages make millions of dollars per day when it comes to commissions. With a little work you can keep more of that money in your pocket as opposed to being eaten up by investing fees. This is why I like to do our investing through both Scottrade as they are low in terms of cost and offer a flat commission structure.

Expense Ratio

When you’re looking to invest in a mutual fund or ETF then one of the first things you’re going to want to look at is the expense ratio. The expense ratio is essentially the cost of doing business and includes some of the following:

  • Management fees
  • Administrative fees
  • Operating costs
  • Many other things

The go-to source, in my opinion at least, to find out about expense ratios is Morningstar. The Morningstar site provides a wealth of information for mutual funds and ETFs and one of the best tools they provide is the Expense tab. On that tab, they’ll break down for you the cost to hold the fund, per $10,000 invested, for three, five or ten years. That is often the first tab I go to as it tells me in black and white what kind of investment fees I’ll be subject to.

Generally speaking, you’re going to see much lower fees in ETFs than you will in mutual funds, but not all the time. It’ll require work on your end to find a fund that has the lowest fee possible, while still fitting with your investment needs of course. That said, I’d be hard pressed to pay anything over 1% for a mutual fund. It’s just not worth it in the long run as it means more money in someone else’s pocket to manage an investment for you as opposed to in your portfolio.

12b-1 Fees

Perhaps the worst offender, in terms of investment fees, is the 12b-1 fee. Technically speaking the 12b-1 fee is a part of the expense ratio. The 12b-1 fee is associated with marketing a specific mutual fund to you as an investor. What makes matters worse is that the 12b-1 fee can vary, so it can be hard to nail down a specific amount it’ll cost you.

One of the main reasons why I have an issue with the 12b-1 fee is that it incents sales reps to sell a specific fund to you. You get nothing special in return for it, other than less money in your pocket and does nothing to improve your returns. If you do like investing in mutual funds, do yourself a favor and find one without 12b-1 fees, which is actually shown on that same tab on the Morningstar site – there are plenty to choose from. Or, you could just choose to invest in ETFs as they do not charge 12b-1 fees. 🙂

Annual Account Fees

One of the other dreaded investment fees is the annual account or maintenance fee. Thankfully this has started to die at most discount brokerages, albeit very slowly. There are still a good number of brokers that charge an annual fee. It does you no good and is only a way for the brokerage to make more money off you. Ignoring whether or not you’re paying an account maintenance fee will only take money out of your pocket and hinder what you have working for you in the long run.

If you want to avoid paying an account maintenance fee, then it’ll require you to do some reading, but it’ll be well worth your time. They will vary by brokerage, but I’ve seen them as high as several hundred per year which is ludicrous. Some brokerages will be tricky with this investment fee and say you need to have a certain number of trades or have a certain amount invested with them. So, if you don’t trade much or are investing with $1,000 or less then you want to make sure you don’t fall prey to this investment fee.

Investment fees are a reality of investing in the stock market. I have no beef with that. I do take issue with investors who don’t do their homework and end up hurting themselves in the long run by not earning as much money. It’s up to you to find out what you’re investing is costing you in terms of investment fees.

 

How much do you pay in investment fees per year? Is it something you keep track of? Are you willing to pay someone to manage your investments in the hopes they can beat the market?

 

Photo courtesy of: Tax Credits.net

 

 

Successful Entrepreneurs Know When to Walk Away

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The gamblerHave you ever heard of the song from Kenny Rogers called “The Gambler?”  There are a few lines in there that makes this post easier to understand.  Even though the song is about gambling, I like to use this quote often when talking about business.

You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
Know when to run

I consider myself a successful entrepreneur.  I have owned and operated businesses since I was a teenager.  I just have that mindset that likes to turn every idea into a business.  While I always have dreams of grandeur and expect all of my ideas to make me money, I have found that it just simply doesn’t happen.  I can’t even count how many businesses I have started and run, but then found out they were duds.  Hell, one of my biggest businesses, which sold millions of dollars worth of  merchandise, didn’t succeed.  I ran that business poorly and wasn’t paying attention to the cash flow.  There are some other reasons why that business didn’t succeed, but those don’t really matter.

Know When to Walk Away

Kenny Rogers said it best in his song.  The best gamblers know when to hold ’em and know when to walk away.  It is the same concept for entrepreneurs.  When I first started my businesses, I thought they were going to go the distance.  Most of them failed and I am OK with that.  I learned quickly that in order to succeed, I didn’t need to keep pushing those business ideas.  I just needed to find one that worked best for me.  I used to follow the money.  I would start a business in an industry which had high profit margins.  The problem is the competition was fierce.  The more competition you have, the less chance you have a breaking into the market.

If I would have continued pushing myself with my e-commerce company, I would have been in a very bad state. My health would have deteriorated and I would have been in even more debt.  While the dream was still alive, I knew I had to fold ’em and walk away.  It wasn’t my time to succeed in that business.

Knew When to Hold ‘Em

The most successful entrepreneurs know when to hold their business ideas and keep pushing.  While I am not the most successful person out there, I consider what I have done a success.  I run a small media company which owns and manages blogs, but I also provide freelance services such as writing.  My business has grown over the years and even more so since I started Debt Roundup and this site.  I understand I have a good thing going and I am going to hold onto it.  I am also going to continue to push its growth.  You should never just sit on a business idea and hope it runs itself.  You  have to continue each day to push hard.  Running a business is not easy and it requires a lot of dedication, time, and sacrifice.

I most recently expanded my services to include technical blog management.  I have been working on many blogs throughout the past year.  I noticed there was a niche not being filled properly.  I had good connections, understood the needs of other bloggers, and could provide that service.  Since the launch, my client base has grown considerably and I see this new model is one I want to hold onto.  It fits right into my wheelhouse and allows me to pursue one of my passions.

My advice to all entrepreneurs is to understand these few lyrics of the Kenny Rogers song.  They work very well for small business and they should be followed. You need to know when you have a great business.  If you do, then continue to focus on it and grow it.  You also need to understand when it is time to throw in the towel.  Yes, you might consider it a failure, but failure is one of the best teaching mechanisms.  You might have to walk away from a few business ideas until you find one you can hold on to.

 

Have you ever had to walk away from a business idea because it just wasn’t working out?

 

Image via mescon

How to Turn Your Business Idea Into Reality

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Business IdeaI had a conversation with a client the other day that I wanted to share with you here on Sprout Wealth because it was one of those ‘aha’ moments for me, and I thought it might be for you, too. My wife and I run a small advertising business, which is a lot of work but a lot of fun too. We’re always meeting new creative people and businesses that we get to help with marketing, communication, and advertising efforts.

A Prosperous Personal Conversation

This conversation was unique because it involved a money-making opportunity that our client was just sitting on. This particular client loves graphic t-shirts. A designer by trade, he has all the skills, talent, and ideas necessary for creating t-shirts that people would actually want to wear. He’s been doodling ideas and gathering them in a notebook for eight years, but to this day hasn’t made a single t-shirt.

Cost-effective technology now exists for him to be able to run an online graphic tee business without having to physically stock inventory or print shirts. He can just showcase his designs online and outsource the rest. It’s a great idea that he’s passionate about and which he could actually make money on. It’s not a way to make money quick like donating bodily fluids or selling stuff; it requires more work, planning, and preparation, but it can reap rewards in the long run.

So, what is he waiting for? As he shared his idea, I could relate, as I have my own ideas that I’ve been sitting on for years and just haven’t made the time to do anything about yet. We discussed a few ‘steps’ that he could take to turn his business idea into a reality, which I’ve captured for you below. I hope they’re as helpful for you as they are for me, and our client. 🙂

Make Time for Making Money

Many times, the lynch pin that turns a business idea into a money-making reality is actually treating your idea like a paying job, even though it’s not yet. We’ve discussed this notion of making time for making money on Sprout Wealth before. If you do any freelancing work at all, or any project or hourly paid work as part of a side gig, you probably have a to do list of some sort or another. All our client work goes on a weekly list with deadlines that we have to hit. We take this work seriously because our livelihood depends on getting it done.

What I suggested to our client and what I plan to do with my own business ideas is to treat them like paying work, even though they’re not yet. I’m adding them, one at a time, to my weekly list so that I force myself to make progress on my business ideas, just like I would work that’s putting food on my table.

Cast Fear Aside and Just Start

We all say we can’t find the time to work on the business ideas we’re passionate about but the truth is that sometimes we just don’t want to make the time because we’re afraid that if we do launch our business idea, it’s not going to be successful. We tell ourselves that no one’s ever going to read our book; or pay for our course; or buy what we make. But we don’t know that. Sometimes the best way to overcome fear of failure is to take a step back, try to distance ourselves emotionally from our work and just start.

If we can treat our business ideas like paying work, one day they just might make us money! Compartmentalizing our ideas and making weekly progress on those things that need to happen to turn our business ideas into realities is a great place to start.

 

Have you been sitting on a business idea for a few years? What’s holding you back from taking that first step in turning your business idea into a reality?

 

Photo courtesy of: Hannah

Make Money Series – How to Sell on Craigslist

Make Money SeriesI will admit that I am a huge fan of Craigslist.  I have sold many things on the site and have even sold quite a few vehicles. There things to understand about Craigslist, especially when you are tying to sell a car quick and safely.  I believe the attraction to Craigslist is the site is really easy to use and it is free to list and sell your items.  You can also buy and have your item quickly because most sales are local.  Since I have been selling on the site from the beginning, I figured I would share my thoughts on how to sell on Craigslist successfully.  There are some tips that can help you a long way to making a sale and continuing to make sales.  Who doesn’t love making a little extra cash?

The Process of Selling on Craigslist

I have spoken to many people about selling on Craigslist.  Quite a few of them think you can just throw up an item and then bring in the cash. While that may be the case here and there, there is an art to selling anything.  Craigslist is no different.  There tends to be a lot of competition, so you need to make sure you differentiate yourself and the item you are selling.  Here is how you can sell an item successfully on Craigslist.

Do Your Market Research

You should always check the competition.  You should also check to see if your item is popular.  This “market research” shouldn’t take a long time, but it can tell you if an item is going to sell and for how much. These are two very important factors in selling anything.  If you have an item that is very unpopular, you are going to end up holding it for some time.  You will also have to relist it constantly, so it stays up in the current results.

Market research on Craigslist really only consists of you searching for the same item you plan on listing. If there are quite a few listings for the product, then it is a common one.  People tend to look for more common products on Craigslist.  If you see one or two other listings, then you might not have a popular product.  You should also take into account the price others are trying to get.  Read over their descriptions and find out how their product relates to yours.  This is crucial information.

Describe the Hell Out of Your Item

Descriptions are what sell products on Craigslist.  Well, that and price.  People want to know about your product.  What is it?  What are the problems with it?  Is is new or used?  Are there any missing items?  There are a lot of questions that can easily be answered with a quality description.  You should always include as much information as you can.  The more you include, the less questions you receive.  A quality description can sell the item.

You should include the age of the item, brand, make, model, issues, malfunctions, add ons, and anything else you think is pertinent information.  If you would like to have the information when you are buying it, then it is likely other people will want the same information.  Don’t be shy with your descriptions.  People that go light on the description will see their listings stay active on Craigslist much longer.

Show the Photos

Photos are really important and an awesome add on to the selling process. Craigslist allows you to have multiple images for each listing.  No matter the product, you should include at least one photo. If you can take different angles of the item, then make sure to include those.  I like to also take photos of the tags (if applicable), any blemishes, and a few angle shots.  I want all of my basis covered before people want to actually see the item.  Great photos can really help sell a product.  Good photos result in good sales, but terrible photos are going to get you nowhere.

Show Competitive Pricing

While I say the description is what sells items on Craigslist, it probably is the price. People are price conscious these days, so Craigslist is a natural beneficiary.  You can almost always get a great deal and that is to be expected. Other people are selling their items for a number of reasons, buy they know they probably won’t get their asking price.  Deals on Craigslist are all about bartering.  You give the asking price and a buyer will give you their counter. You can go back and forth a few times, but that is typically the game.

The key to staying competitive is to watch the other listing.  What are they selling their items for? Are they lower than you?  Why?  If you want to sell your item quickly and efficiently, then price is going to be a major factor.  Don’t be afraid to start high and then go lower.  If you start out high, then you have a lot of room to negotiate.  The art of negotiation works best when you give the buyers the idea they have control over the price.  Think about it!

Respond Quickly

We are a nation of “I want it now!”  We want things quick and without hassle.  When you list an item on Craigslist, you will want to respond to any inquiries quickly.  You should never wait a long period of time after a person contacts you. That is extremely rude for one, but it also makes the potential buyer wonder.  You should never allow people’s mind wander when it comes to selling them an item.  Take the time to respond to your potential customers.  They are contacting you for a reason, so be kind and respond back.

Meet in Public Places

This is all about safety.  I have only once allowed someone to come to my home and look at an item. That was only because it was broken and I couldn’t move it.  Other than that, I have always requested people meet me at a public place.  There is no need to have people come to your home.  If you meet them in a public place, there is less chance something bad might happen. It is a simple step that I recommend to everyone.  You can’t trust everyone you meet online, right?

 

What other steps would you include in this how to sell on Craigslist article?  What are your favorite ways to earn cash with Craigslist?

Never Be Afraid to Fail

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success versus failureThat dirty little word that everyone hates is going to come up a lot in this post.  Failure!  That is right, the word that so many are afraid to think about because of what can happen.  How do you handle failure?  Do you dislike the thought of it or do you embrace it?  For those that don’t know me very well, I am the type of person that likes to give it to you straight.  Look at my post last week about how credit cards are not evil.  Some may not like how I deliver my message, but it seems to resonate with others.  I am OK with that. I have always enjoyed people that don’t beat around the bush.  I am a no BS kind of man.  I am about to lay down some more truth today!

Failure Sucks

Don’t get me wrong, there is nothing fun about failing at something.  No matter what you are trying to accomplish, failure doesn’t feel great. I have never met anyone that goes out and strives to fail. That type of mentality wouldn’t get you far.  There are really two types of people when it comes to failure.  Those that embrace it and learn from their failures and those who are so afraid to fail that they never try to succeed.  I am one that embraces failure.  I don’t like failing, but I understand that I will many times in my life.  The key take away is to move on from it.  Failure sucks, but you don’t get to succeed unless you try!

Let Failure Motivate You

I can’t even count all of the ways that I have tried to make money over the years.  I have been a part of a few get rich quick schemes.  Those failed miserably.  I have tried to sell wholesale items on eBay.  I have tried many different businesses as a kid.  My mind is always about being an entrepreneur.  While not full time, I get my kicks out of earning side income.  I thrive on it, but I sure have failed numerous times in the past.

What makes me different than some is I continue to strive to succeed. If one failed venture gets me down, I learn from my mistakes and I try again.  I created and ran 15 other blogs before I did it right with Debt Roundup.  I ran two other consulting companies before I got it right with my current one.  I have failed. I will continue to fail. I will continue to get up, dust myself off, and get back on the damn horse.

I am fully motivated by my previous failures.  I have had quite a few, but I never let them get me down. Yes, I might step back for a bit and let the realization that I failed sink in, but I never just stop striving for more.  When you quit because you can’t handle failure, then you will never be the type of person that succeeds in making more money.  You need to be a go-getter. You need to be a hustler, baby!  Making money is all about willingness to try new things.  People make money by being different.  They make money by providing something other people are willing to pay for.  They also work hard to stand out from the crowd.  That is how you make more money.

Let Failure Guide You

Before I start running through this one, let me stop and give you a definition of insanity by our good friend Einstein.

doing the same thing over and over again and expecting different results.

There are some that continue to fail at the same thing, but try it again hoping for a different result. That is insane.  You need to let your failures guide you.  Let them help you tweak your system.  If you don’t take the time to learn from your previous failures, then you will never find the path toward success.  Success is only achieved by constantly learning how to better yourself and your process.  If you just follow the same path, then you will end up knocking on failure’s door each and every time.  Making extra money is not easy, nor is it quick.  It takes time and energy to achieve. It takes the drive to make whatever venture successful. It also takes guts to get over the failures and keep on going.  If you aren’t learning from failure, then you aren’t doing it right!  Failure should be embraced, but never accepted.

 

What do you think of failure?  Do you think it is necessary to fail before you can truly understand how to succeed?

 

Photo via StockMonkeys.com

3 Times it’s Ok to Make Less Than You are Worth

Make less than you are worthBefore you pick up something to virtually chuck at me for talking about it being okay to make less than you are worth on a site devoted to teaching you how to make more money, understand that I’m NOT saying you should be ok with making less than you are worth. I am saying that you should have a long-term view of things when it comes to making more and growing your wealth. Our good friend Kim, at Eyes on the Dollar recently discussed this topic and thought I’d share some of the times when it’s ok to make less than you’re worth.

My wife and I deal with this issue quite a bit in our own business and know that many other business owners do as well. It’s also prominent with those who have side hustles so I know I’m not the only one who has worked for less than my time is worth. While I hate making less than what I know I can possibly make I also know that it pays to be flexible in some cases. Before I get on with when it’s ok to make less than you are worth I will point out that you want to be very picky about this type of arrangement. It may be nice to pick up extra work, but you’ll end up only harming yourself in the long run if you continue to take lower paying work as it’ll bring the market down as well as not leave you the time you need for higher paying, standard rate work.

When it Comes as a Package Deal

Many small business and side gigs thrive on having more work. When it’s a chunk of work from one client then it’s even better…more money is better…right?! Anyway, what many clients will ask for is for a package deal or a lower rate because of the amount of work they’re bringing you. This is similar to when you’re spending a lot of money at a particular store – you’re going to haggle. It’s the same way with this.

Take for example if your standard rate is $100 per hour and a potential client comes to you with a good amount of work but asks for your rate to be $80 per hour. Do I like “losing” that 20%? I certainly don’t, but am I willing to give up 100% of the $80 because I don’t want to take the lower paying work? In many cases I’m not, especially if they’re a good client and carry the potential for more work in the future. Yes, this may mean that you’re making less than your worth but I’d rather have a regular client who provides a decent amount of work than having to find other jobs to make up for it. This is something that can be quite common if you’re involved in freelance writing and should generally be looked at on a case by case basis.

You Believe it Creates Opportunity

Making more money usually means that you need to be on the lookout for opportunities. It’s sort of a no-brainer, actually. The problem is that not every opportunity is necessarily going to be a good one for you and your moneymaking endeavors.

That said, there have been times I’ve taken on lower paying gigs because I believed they created unique opportunities or looked good on my resume. I’ve even worked for free in certain circumstances in order to get a certain opportunity. As I’ve said previously though, this is something you’re going to want to be highly selective about; otherwise you’ll just end up hindering your overall efforts.

When it’s Something New

The first two situations deal largely with a side gig or your own business and this time it’s more to do with a traditional workplace setting. The issue of if your employer is paying you less than you’re worth aside, it can be ok to take on new roles at work even if it means you don’t get paid for them.

Think of this as taking one step back to take two steps forward. Assuming you’re able to master the new skill or challenge, that opens up potential for you to turn around and monetize it. As with the other strategies, you’ll want to be selective about this. However, you don’t want to be so hung up on making less than you’re worth that you pass up greater long-term opportunities.

 

Ok, now I turn it over to you. When is it ok to make less than you are worth? Have you ever worked for free with the hopes of it turning that opportunity into something better?

 

Photo courtesy of: Tax Credits

Why Credit Cards are Not Evil

Evil credit cardsI am going to put it out there and say credit cards are NOT evil!  That is right, I don’t see why there are so many people that think these little plastic cards are so bad.  There was a great article yesterday asking if credit cards are evil and I still say no! Before you start shouting at your computer screen, hear me out.  If you don’t know me, then here is some background on how experience with credit cards.  I used to be in over $50,000 worth of credit card debt.  With that amount of debt, I have a little knowledge on how they work.  This credit card debt also gives me a little credibility when I talk about cards not being evil. I have been there and done that.  I paid off my credit card debt through hard work and determination.  Mix in a lot of side hustling and you got a man who has been credit card debt free for almost two years.  During the four years it took to pay off my cards, I gained a little insight into the world of credit and what I was doing wrong.  It was quite eye opening.

Credit Cards Get All the Blame

Running a personal finance blog, you tend to hear a lot of personal stories. That is really one of the awesome benefits of being a blog owner.  I love hearing about people’s stories.  Some are good and others are bad.  The one thing that I hear time and time again is how credit cards allowed people to get into debt.  Those little plastic cards allowed people to spend beyond their means.  While on the outside, that is completely true.  Credit cards do allow you to spend more than what you have in your bank account.  Since credit cards are not tied to your bank balance, you can just keep spending and spending until you reach your limit.

Along with this theme, I have realized that people are just really placing the blame onto the card and the card issuer.  They are made at the credit card company when they owe them so much money.  They cut up their cards and curse off credit for good.  I don’t have any problem with people not using credit. There is absolutely nothing wrong with that.  Credit should only be used by those that understand how to use it wisely.  The issue is this is not really how it is.  There are so many with credit card debt, amounts into the billions racked up on their cards.  It is a national problem at this point, along the same lines as student loans.

The Blame Lies with You

I hate to be blunt, but this has to be said.  If you have credit card debt, then you can’t blame anyone or anything else, but yourself.  Credit card debt doesn’t just happen.  It is typically accrued over time.  I never once blamed my credit card for allowing me to incur so much debt.  Main reason is such actions are unproductive.  Blaming a credit card for your spending problem is going to get you nowhere.  Let me give you a quick example.

Blaming a credit card for your credit card debt is like blaming a screwdriver when you injure yourself trying to break up ice.  A screwdriver is just a tool that you use.  It has a single purpose dedicated to screws.  There are different types of screwdrivers depending on the need.  If you take a screw driver and decide to use it as an ice pick, then you are responsible for anything that happens.  The screwdriver is not designed to break up ice.  If you then blame the screwdriver for something happening, then you are just deflecting blame.  This is the same thing with a credit card and so many people do it.

Another personal finance issue similar to the misuse of credit cards is how consumers misunderstand the purpose of life insurance. Many insurance experts recommend separating your life insurance and investment needs, meaning never using your life insurance policy as an investment vehicle. Unfortunately, some U.S. consumers still fall prey to agents and brokers touting whole life insurance is a good investment when simple research will explain why whole life insurance is a bad investment for more than 95% of the population. Years later, most whole life insurance policies are cancelled because again, life insurance is a great estate planning tool, but if used inappropriately, can yield bad financial results.

Credit Cards are Not Evil

Yes, a credit card can be used for different things, but they have rules.  You don’t follow those rules, then you face the consequences.  When I hear about people calling credit cards and the companies evil, I just think of this screwdriver analogy. A credit card is just a tool, just like other financial solutions to our disposal. When you use it correctly, then there should be no issue.  When you don’t use it the right way, then that is when things go wrong.  You can’t blame a tool when you don’t know how to use it properly.

Ever since I paid off my last credit card, I actually started using them for every purchase.  I have two go-to credit cards, which are both rewards cards.  I now earn great travel rewards or cash back with ever purchase, but I don’t pay a dime in interest.  I follow the rules and understand that if something happens, then I am to blame.  If I carry a balance, then I spent more than I should have. If I miss a payment, then I didn’t keep up with the bill.  These are both issues that are on my shoulders.

You can argue with the record profits that credit card issuers are getting, but that can all go back to this argument.  They wouldn’t be making billions of dollars if people were not using them incorrectly.  If you use the tool correctly, things tend to go OK.  Of course, credit card companies don’t mind when you don’t pay your bill on time or let balances float, but you are only hurting yourself.  All I ask is that people stop calling credit cards evil.  I have found a great use for them and realize that blame was only with me.

When You Stop Learning, You Stop Earning!

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stop learning and stop earningI am a huge advocate for education. I think education is really the only way we can be successful.  Now, there are big differences between formal and informal education, but I believe that anything which teaches us lessons or gives us information is a good thing.  One of my goals every year is to learn something new and then expand upon that knowledge.  Some years I strive to learn something new everyday.  While those new tidbits of knowledge might not be huge, they are very important.  I strive to never stop learning.  The key to never stop learning is always making sure you use what you learn.  What is the point of learning something if you don’t plan on using it?  I think John would agree with me that you are only limited by the amount of knowledge you obtain and what you do with that knowledge.  Acquiring knowledge and applying it are two very different things.

Where Your Earning Potential Stops

Your earning potential is limited to your experience and your knowledge.  Most people think that college is necessary to gain highly paid jobs. While I do think college is important to get your foot in the door of many professions, I don’t think it is really the key to increasing your earning potential.  Let me explain what I mean.

I graduated college with a marketing degree.  I got a job when I got out of college using the skills that I had learned.  It was a good job that taught me a lot about the professional atmosphere.  I am very thankful for that job, but it was not very fulfilling for me.  While I could apply what I learned to the position, I wanted to learn more.  I took on different roles inside the company to see where I would fit in.  I learned new things almost every day.  I would harness that knowledge and then use it to increase my earning potential.  My career took a drastic turn when I decided to use skills that I taught myself over the years.

I started an e-commerce business in college. I sold consumer electronics and it was a good business. I made some money, but made some bad business funding decisions.  It is what it is.  I taught myself on my own time how to start and run an e-commerce business. I was learning by doing.  I taught myself how to code, design, market, and everything else in between.  While I loved the business, my real passion was just doing the technical stuff.  I took time to learn as much as I could. I read books, learned by doing, and kept pushing myself to absorb more knowledge.

Where My Knowledge Took Me

All of the things that I did on the side of my regular job is what got me to where I am today.  I landed a job that I love because of my skills that I taught myself.  My degree was just the icing on the cake.  My employer was sold on the fact that I could learn quickly and had great passion for the industry.  My job has nothing to do with marketing, so I have to thank my extra-curricular learning for my career path.

I didn’t stop with my current job though.  I have been there for seven years. I have enjoyed every moment of it.  I learned how to do my regular job fairly easily.  It was stuff that I was already doing for my e-commerce business.  After I mastered the tasks, I taught myself some crazy Excel tricks in order to do my work quicker.  After some time, I was automating much of my daily work.  After I did that, people caught on and then wanted me to automate their repetitive tasks.  After some time, I was the go-to guy for automation.

Some of the higher up managers got word of what I was doing and a new position was born just around the skills that I had taught myself.  With the new position came higher pay and more responsibility.

You Stop Learning, You Stop Earning

The whole point of this post is to tell you that in order to grow your wealth, you need to continuously expand your knowledge-base.  This doesn’t mean you need to go back to school in order to learn a trade. You can learn a lot of things from other people.  I had a friend one time that wanted to learn how to become a diesel mechanic, but didn’t have the money to go back to school. He asked a shop owner if he could be an apprentice and he was able to get it. It didn’t pay anything, but after working on the weekends with the diesel mechanic, he was able to learn the basics and got a job at another shop.  My friend’s experience just goes to show that if you are willing to learn something new, then you can achieve what you want.

If you want to grow your wealth and continually make more money, then you need to continue your education.  It doesn’t matter if it is a piece here or there, but as long as you are learning, then you are earning!  Once you stop expanding your knowledge, then you don’t keep up with other people outpacing you.  I never know what pieces of information I pickup are going to be useful, but that won’t stop me from doing it each and every day.

 

How do you continue your education?  Do you like to learn new things on your own or in a structured manner?

 

Image via Sean MacEntee

How to Start a Side Hustle While in a Day Job

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Start a side hustleThere was a comment in a recent post that touched on the difficulty some may have in starting a side hustle while having a day job. There are some industries which frown upon having a side gig, and require certain approval to start freelancing.

With that said, there are many that encourage having a side hustle which is great because we all want to make extra money, right?! Given that you’re reading this I’ll venture to guess that you do. 🙂 So, if you’d like to start a side hustle and you work in an industry that is fine with it I thought I’d share some ways to do so – even if you’re busy at your day job.

Start a Side Hustle in Your Free Time

This is a no-brainer, I know, but many believe they can’t start a side hustle because they have little free time. I admit, this can be easier said than done at times and I’ve definitely felt this way myself, especially when I first set up my blog and became an online entrepreneur. However, if you’re wanting to make extra money it is possible to run a successful side gig when you want it bad enough.

This will mean you’ll be dealing with competing interests, so it requires discipline. It can mean waking early in the morning before going to work or staying up late. This does mean sacrifice is required, but starting a side hustle (and one that is hoping to be successful) will require sacrifice.

Look for Professional Organizations to Join

Now that we’ve got that out of the way, let’s look at the more practical ways of starting a side hustle. Depending on the industry you’re in, there’s likely going to be a number of professional organizations you can join. These can range from leads groups to honest to goodness professional organizations.

This does somewhat fly in the face of managing your time, but these can be great sources of potential clients for your side hustle. Personally speaking, there are a wide number of different organizations in the creative and marketing industry. Many of these individuals are either looking for freelancers to hire things out to or have their own side hustle.

My suggestion is to be purposeful about the ones you do join and don’t pay too much in terms of membership fees. These organizations can be great as you start your hustle and going forward as you continue to meet others.

Look for Things You’re Already Good At

The common theme you’re seeing is that balancing a side hustle while having a day job can be a challenge in regards to time. In light of that, don’t reinvent the wheel with your side gig but look for things you’re already good at and monetize them. These can be as simple as hobbies like photography or making crafts to skills you already have like writing articles, website testing or website design.

The main purpose behind this is you want to be efficient with your time so you can maximize money-making opportunities. One of the worst things you can do is start a side hustle that isn’t efficient because an inefficient side hustle just makes it harder for you to make money and easier to give up.

Take on New Challenges at Work

I thought this was an article about starting a side hustle? It is, but a big key to doing so is looking for opportunities – wherever they may lie. Your employer, assuming they’re aware and ok with you having a side hustle, can be a great source of opportunity. How do you do this? It can be quite simple really; when you’re asked to take on a new project or when you see an opportunity to try something new, take it!

Why would you do this? You would do it because it can potentially allow you to learn more skills that you can turn around and monetize for your side gig in the future. Just make sure you don’t go after your employer’s client after doing so. 😉

 

What challenge did you face with starting your side hustle while working in a 9-5 job? How do you manage your time to maximize money making opportunities?

 

Photo courtesy of: Winnifredxoxo

When Making Money Makes You Unhappy

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Making MoneyThe following is a contribution from our friend Shannon, at Financially Blonde. If you’re interested in contributing to Sprout Wealth, please contact us.

I just recently wrote a post about how you can find more time to make more money, and I like to think of this as the follow up to that post. Imagine that you took my advice, you worked your schedule hard and found time in it to make more money, and you did. The problem you have now is that you feel as though your life is out of balance because you replaced time used for other activities with the pursuit of making money. This is akin to the never-ending debate about “work-life balance.”

For the record, I hate the phrase “work-life balance,” and really hated it when I was asked to speak about it in front of groups of women, yet my former employer never asked my male counterparts to discuss it. I don’t care if you are a man or a woman; we all have to manage the finite resource of time.

So, if you are feeling as though you are “unbalanced” and not getting enjoyment out of your life choices, you need to take a step back and look at your life pie. I like to think about my life as a pie chart represented below where everything that is important to me is given a slice of the pie. What slices are in your pie? The issue we all face is the fact that our pie will never grow, until we figure out how to clone ourselves, we only have this one sized pie.  And the only way we can maintain our sanity and our happiness, is working on our individual pies to the best of our ability.

 

The last time that I think I felt as though my life was balanced was in elementary school. From that point on, I kept slicing up my life pie more and more whether it was school activities, a job, friends, or boyfriends. And this process has only continued on as I have grown older and added a serious job, a husband, a child, old friends, new friends, clients, family, physical health, mental health and the list goes on. If you are feeling the burden of being sliced up into too many pieces, here are some thoughts to help you.

Allow Time for Reflection

The more ways we slice up our life, the more chaotic it gets, and if we don’t take the time to stop and reflect on where we are, the crazier we will feel. I used to not recognize the chaotic feelings in my life until I literally almost reached mental breakdown, lock me up in a padded room type feelings. Over the past few years, though, I have gotten better about reflecting on where I am before I get there.

Typically when I reflect, I take a few moments, usually while I am working out or in the shower and think about what I have going on now or what I have coming up. If I know that work will consume a good portion of my time, I think about when I can devote time to my family and friends, sometimes that leads to emails and scheduling or sometimes it is a phone call or text to figure out what we need to do. The reflection time is critical for me to take a pulse on my life and determine if adjustments need to be made.

Communicate with Important People

If you know that work will be busy for you or that one area of your life may start to take over, communicate with the people who matter to you about what is going on. When I was a financial advisor and attended work functions at night, the men I worked with always said, “But what about your husband and son? What are they doing?” And I responded, “That’s none of your business,” because it wasn’t.

My husband and I frequently speak about my schedule and what is happening with work, and while doing that, we speak about how I will “balance” it at home. I could have stayed later at the office on many days, but I made an agreement to be home and devote time to my family to make sure I was staying on top of my life. Honest and open communication really helps maintain your life pie in a healthy way.

Give Yourself a Break

I am a Type-A Overachiever and I have been since I was in Kindergarten. The concept of “giving myself a break” is one that does not come easy to me. I have high expectations I put on myself and hate when I feel as though I am never excelling at anything. When I feel as though I am failing at my own life, I stop and tell myself to “let up” and give myself some slack. The fact is that because we only have so much capacity in our lives at any given moment, we are not going to excel at everything; it is just a physical impossibility.

That being said, it doesn’t mean that we are not doing really well at what we are doing. We are typically our harshest critics and when we give ourselves a break, we give ourselves the freedom to accept where we are at that point and it is probably a better place than we thought we were. A few years back, I remember crying to my hubby that I was the “Worst wife ever because I spent so much time at work” to which my hubby surprised me by saying, “I actually think you are the best wife ever. Yes, you work and have a job, but the time you give me is precious and special. You make it “worth it.””

Understand that “Imbalance” is Part of Life

I recently had a conversation with a friend where I stated that I didn’t feel as though I did any one thing “well” in my life, and for the first time, I am okay with that. This is why I hate the concept of “work-life balance” there is no such thing. I don’t think there has ever been a time in my life where each slice of my pie was divided up equally.

What I have discovered is that there will always be some component that requires extra time from me whether it is my job, my husband, my son or my family, and when that happens, I put in the energy toward that part of my life and I rebalance the rest over time. I understand that I will never feel fully balanced at any given moment, but knowing that “imbalance” is a constant helps me manage through my balancing efforts in a healthier manner.

So if you are taking some time to focus on the slice of your life that is dedicated to making money, don’t feel bad. The great thing about dedicating time to this slice is that it helps a number of the other areas of your life. If you have a spouse and children, talk about this with them and discuss the importance of it. I explain my work requirements and efforts with my eight-year-old son and he understands that those efforts provide him the “things” that he loves, and I carve out time especially with him to balance this out. I have been working hard at building up my business recently; however, I just took a few days “off” to take my son to Florida for his Spring Break. I had to put in time before the trip and lots of time after to “catch up” but I made the balance between the two. With reflection, communication, forgiveness and thought, you can not only devote time to making money, but also continue to maintain your happiness along the way.

 

Do you feel out of balance when you devote more time to making money? How do you rebalance your life when that happens?

 

Photo courtesy of: 401(k)2012

 

Shannon McLay is a financial planner who left a “traditional” financial services firm to start her own company, NextGen Financial, to help clients in their 20s and 30s get financially fit. Through her blog, Financially Blondeher book and her company, Shannon is committed to making financial fitness fun, easy and accessible for others.