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How to Save Money for Your Dream

Posted by Home Morgage | Personal Finance | Thursday 2 September 2010 8:18 am

Everyone has that one extravagant possession he’s always wanted, but never had the money for. Even you probably think about your dream wedding, vacation or home every now and then and long for the cash you need to buy it. So why keep wishing when you can start saving instead? If you want something bad enough, you’ll have the ambition and persistence necessary to make that dream a reality. Take a look at how you can do it…

Photo by Honza Sterba via Flickr

What It Takes to Make It Happen

Here’s the bottom line: saving a large sum of money for a “dream” expenditure is not going to be fun. You have to reprioritize your wants and needs, which means simplifying your needs and pretty much eliminating wants all together. You have to consider what’s more important to you — buying fun stuff now, or meeting your goal in the future.

You’ll need to pack a lunch instead of eating out, stop buying new clothes, and learn how to entertain yourself on a Friday night for free. The newest iPhone upgrade will have to wait and daily lattes must be eliminated.

Don’t worry; it sounds bad, but it will be worth it.

Devise a Solid Savings Plan

Accomplishing a goal is much more difficult when it isn’t concrete. Consider the difference between “I want to travel to Italy some day” and “I want to save $5,000, so I can go to Italy two years from now.” Having a specific goal and planning milestones to meet it will ensure you stay on track.

So what’s the best way to do this?

First, calculate exactly how much the dream will cost. We can stick with the $5,000 dream vacation in Italy example. Next, break down the total cost by the amount of time you plan to save. $5,000 in two years means $2,500 per year, or $208 each month, or just $48 per week.

If you don’t already follow a budget (and if not, that’s another problem to tackle), plan one out and look for areas of spending that can be reduced or completely cut out. Keep slicing and dicing until you make room for your dream savings and then stick to your new plan. Whatever you do, don’t reward yourself by spending money! A sense of satisfaction is all you’re going to get.

One BIG Caveat

You should never, by any means, sacrifice your financial security for your dream. The above savings plan is not designed to include your emergency savings, which is essentially your financial safety net. That’s off limits.

A fabulously grandiose wedding is not worth it if you and your spouse lose the home into which you were going to move. A Ferrari will not fill the void of your empty 401(k) in retirement.

Once you have established your all-important emergency fund of at least three months’ salary, then you can start working toward that dream. Good luck.

9 Great Personal Finance Articles to Start Your September

Posted by Home Morgage | Personal Finance | Wednesday 1 September 2010 8:18 am

It’s unbelievable that August is over and September is upon us already. Next thing you know, it will be Christmas! To kick off the last trimester of the year, I’ve scoured the blogosphere to bring you some interesting personal finance articles from around the web. Check out these articles at your leisure and enjoy.

Are You a Financial Nerd, Geek, Dweeb or Dork? from Go Banking Rates — An interesting look at your financial alter ego. May be one just doesn’t describe you well enough, so go ahead and pick two — may be you’re a Nerdy Dweeb?

Image from Go Banking Rates

What Is A Secured Credit Card? from Free From Broke — Some basics about how secured credit cards work, why do they exist, and who needs them.

12 New Rules for Your Money from Kiplinger — In this era of high unemployment, flat home prices and do-it-yourself retirement savings, some traditional rules of saving and investing are due for an overhaul.

Internet Business Scams – 7 Steps To Keep You Safe from Wealth Pilgrim — There are a lot of scams out there, here are 7 steps to protect you from these scammers.

How to Protect Your Credit After Divorce from Credit Karma Blog — The end of a marriage is often associated with heartbreak and emotional upheaval, but your former soulmate could be walking away with half of your assets as well as leave you in a bad credit situation. Check out the ways to protect and rebuild your credit after a divorce.

A Simple Way to Build Wealth from My Wealth Builder — By paying ourselves first, we guaranteed that we were increasing our wealth every time we received a paycheck.

6 Strategies for Beating Inflation from Cash Money Life — With talk of a possible double-dip recession becoming more common, inflation may not be on your radar. However, over the long term, prices do tend to go up. Here are 6 strategies you might employ to beat inflation.

Dumb Money Strategies Exposed from Studenomics — There are many great tips out there. Unfortunately, many DUMB money management and personal fitness tips get carried out and treated as fact over the years.

Four Thing I Learned From My Yearly Social Security Statement from Own the Dollar — This year Social Security statement came with a little bit of extra information. In case you missed it, this article gives you a quick summary.

For more articles, take a look at Emily’s list: Hurricane season edition. Also, be sure to check out Surviving and Thriving by Donna Freedman.

How to Support a Family on a Single Income

Posted by Home Morgage | Personal Finance | Tuesday 31 August 2010 8:18 am

I often get asked the question – “How can my family live comfortably off of a single income?”. In my response, I always let people know that it is possible and is not that hard. My wife and I have chosen to support our family on one income (by me) and have her stay at home with our two children. While there can be some ups and downs and financial uncertainty raising a family from a single income, the benefits are well worth it.

Photo by Kevin N. Murphy via Flickr

So how can we afford to live a comfortable lifestyle in today’s society on a single income? Mostly by proper planning and having a good understanding of our financial situation. If you are interested in hearing more, I strongly urge you to keep reading. I have included a few examples of common daily activities that we use to make it work. Hope you enjoy!

Using Coupons & Shopping Clearance

Using coupons and shopping the bargains is one way that my family is able to live comfortably off of a single income. We are sure to scan the weekly ads to all of the grocery and pharmacy stores looking for the best deals of the week. This can become very time consuming, but taking advantage of websites like Money Saving Mom and Couponing 101 have really helped us to match up coupons with the latest deals. There isn’t a week that goes by when we don’t get something for FREE!

Besides groceries, there are other items that we try to save on. Shopping for clearance seasonal items usually help us find some great presents and gifts for upcoming holidays. We also take advantage of credit card rewards by banking points. These points are redeemed normally right before the holiday’s for gift cards that are used to purchase presents for family. We have been known to redeem over $300 in gift cards just from using these points!

If you decide to shop online, there are plenty of additional deals that you can find. Be sure to always look for a coupon code before you make any purchase. Look at sites like RetailMeNot as a starting point. Even if there is no code, you can still use sites like eBates or SwagBucks to earn rewards for online purchases.

Alternative Income Streams

Creating alternative income streams is not a luxury, it has not become a necessity for single income families. Just look at what has happened with the most recent economic downturn? Unemployment is rising, people are losing their jobs, and families are struggling to pay their monthly bills. Adding additional income streams (other than your main income source) can help protect you and your family during lean economic times.

My wife and I have made it one of our goals to create these alternative income streams to help protect our finances. If you need some help thinking of ideas, check out 40+ Alternative Income Ideas and Resources for some really great tips.

Reduce Energy Costs

Do you own your own home? Are you a renter? Either way, you probably have had to pick up a utility bill at some point that can put a real strain on your monthly budget. There are electric costs, gas bills, water and sewer fees that typically come with owning or renting. Unless you want to live in a tent, these monthly fees are unavoidable. The key is to try and limit your energy and utility usage so that you can maintain a decent way of life without breaking your budget.

So how can a family limit their energy and utility costs? There really isn’t one solution that will drastically reduce your bill without shutting off the utility. However, there are plenty of opportunities that collectively will reduce your monthly payments and put money back int your pocket. Conserving and limiting your utility and energy expenses is an important part of surviving comfortably on a single income.

Use Windfalls Wisely

What do you do with financial windfalls (large sums of money) you may get from time to time? Do you invest this money or put it into your savings account? Maybe you use it to buy a new television or car? If you are living in a single income family, this money can actually be put to good use by paying down debt, paying off additional principal on your mortgage, or even purchasing some dividend paying stocks. The key here is to use any windfalls to your advantage instead of squandering them on frivolous items.

Don’t think you ever get back any financial windfalls? Getting back money from your tax return is a good example. This is money that you probably had not expected, so avoid the temptation to spend it and put it to good use! Every year my wife and I put our federal tax return money directly back into 529 College Savings plans for our children. This allows us to continue to live on a single income while still investing in our kids future.

What tips can you provide for raising a family on a single income?

How to Build Passive Income Stream With Rental Property

Posted by Home Morgage | Personal Finance | Monday 30 August 2010 8:18 am

Out of all of the personal financial strategies, one of the most lucrative financial moves is that of purchasing property to lease out to renters. Doing this, if done correctly, can earn you a fantastic return for your investment, as well as earn you a passive income. If you follow some basic guidelines, it could be a viable option for you. Below is a basic real estate investing guide for beginners, with answers to basic questions first time rental investors often ask.

Photo by Skaneateles Suites via Flickr

What is passive income?

Any time you make money, the IRS will have to be involved, so it is important to know their rules and definitions. The IRS states that passive income is income “from trade or business activities in which you do not materially participate”. Basically, if you are not physically active in making your money, then it is passive income.

If you go to work at a job and collect a paycheck, that is active income. One of the most common forms of passive income is rental properties — second popular only after dividend investing. This is not true if renting out properties is your main source of income and how you spend your time, but for those who have a rental property or two in addition to another active job, it is indeed passive income.

What are the different kinds of rental properties?

There is the possibility of buying a commercial building and renting to a business, but the financing for that becomes tricky since you have to go the commercial lending route. Most investors choose to rent residential properties. The absolute most common is to rent out a single family home. This will be the easiest to find a tenant for, and easier to sell later.

You can also purchase duplexes, triplexes, and four-plexes to rent. As long as there are fewer than five units, you can finance them as homes, making that part of the deal much easier.

You can choose to go with low income housing, and although your collected rent will be less, so will all related expenses. Last, but not the final choice by any means, you can buy vacation homes and rent them on a daily or weekly basis. There are many other creative ways to buy and rent buildings, but these choices give you a defined outline of the options.

Do I need to hire a property management company?

Can you handle all the necessary requirements of being a landlord on your own? If you can answer yes to any of the following questions, you may want to consider hiring a property management company:

Do you live quite a distance from your property or properties?
Are you prepared to deal with the hassles and possibly messy situations (collecting late rent, fights on the premises, etc.)?
Are you already overwhelmed by the pending duties and responsibilities?
Do you need help finding tenants?
Are you aware of the laws and tax ramifications and ready to do all the record keeping these require?
Are you able to be on call for your tenants at all times?

I’m a huge fan of outsourcing the work to a property management firm — this makes your income more passive, and gets rid of a lot of the headaches associated with rental property.

How do I hire a property management company?

Keep in mind that the company will act on your behalf in many situations, so be sure they will represent you well. Make sure to compare the fees to what they offer in exchange. The cheaper company may not do as much for you and create more expense for you in other ways. Review the details of any contract before signing and make sure you know all fees you must pay as well as all the fees they pay. Do a background check on any company you are seriously considering and check their references.

Personally, I’m all for hiring someone to outsource the dirty work — this allows you to focus on other ways to earn a passive income. Outsourcing allows you to focus on expanding your income, rather than with just keeping what you already have.

What kind of return can I expect?

There is no set answer to that question, but what your tenant is paying will be the key factor. It is smart to pick a rent charge that will cover your mortgage payment, real estate taxes, and any insurance you are required by state law to have on the building. In addition, you should be putting some money into reserves for future repairs and maintenance.

Also be sure to have some funds saved up for tax time. Any income you make on paper will be taxed. When you file your yearly federal tax return (and possibly state) you will file a Schedule E along with it. This form will detail your rental income and expenses. Applicable expenses are mortgage interest, insurance, real estate taxes, repairs and maintenance, the property management fees if you use a company, and a depreciation value for the building.

The difference between your income and these expenses will be your taxable passive income. Any professional tax preparer should be able to help you with this, and their fee is tax deductible as well — one of the reasons you should hire a tax professional. Don’t forget to also factor in the interests on any debt you’ve collected because of debt; all costs will eat away at your overall profit margin.

The information here is not all inclusive, of course, but should help you decide if building a passive income with rental property is a good avenue for you. Make sure to read the guide to investing in fixer-upper rentals. Once you do all the groundwork, building a passive income from rental property is one of the best passive income streams.

How to Budget in Less than 20 Minutes a Week

Posted by Home Morgage | Personal Finance | Friday 27 August 2010 8:18 am

One of the most common misconceptions about budgeting is that is takes a l-o-n-g time. Most people who do not learn how to make a budget do so because they believe they don’t have the time to budget. But, if your budget is doing its job you should be able to budget without a major disruption to your schedule.

While some people work for different reasons, most people work to pay the bills. Some even hate or begrudge their jobs. Yet they continue to put in 40 plus hours a week to earn money to pay the bills. However, for most people, taking 20 minutes a week to budget could dramatically reduce their expenses which would also decrease the need to earn so much money. Remember, a penny saved is more than a penny earned.

Photo by Aaron Geller via Flickr

5 Steps to a 20 Minute Budget

1. Set up the budget.

Yes, this part of the process will take more than 20 minutes. This is where you actually make your budget and set budget categories.

Time commitment every 2-3 years: 1-3 hours.

2. Keep a written record for every purchase.

Collect receipts every time you spend money. If you don’t get a receipt, just take a receipt you already have and make a note on the back of the receipt. Include the item purchased and total cost.

Time commitment per transaction: 0 seconds if they give you a receipt and 20 seconds if they don’t.

If the average person makes 10 purchases a week where they don’t get a receipt, it will cost them 2 minutes of their week.

3. If married, schedule a budget date one day a week.

Yes, call it a date. When you’re on the same page with your finances, your marriage will be better.

Have one person enter the information and the other read the information from the receipts you’ve been collecting. In our case, we budget on the computer using Moneydance. You Need A Budget is also a good computer budgeting program. My wife reads the charges and I enter them.

Time commitment per week: When the computer is on, you can enter all our receipts in about 15 minutes.

4. Analyze the budget once a month.

At the end of the month, you’ll need to review your budget and make changes if necessary (i.e., you overspent on a category). When you start to get a handle on budgeting, you’ll need to decide how you want to use unspent money.

There is no point in keeping a budget unless you plan to change spending habits based on your monthly spending totals. Review the budget and make the necessary alterations.

Time commitment per month: 10 minutes.

5. Make changes only when necessary.

Each month use the same amounts in each budget category. For simplicity just take the same budget and use month to month. There is no reason to reinvent the wheel. On occasion, however, changes must be made. They might be significant changes like the loss of income or minor changes like family visiting for a week. Reallocate some dollars to cover the new charges.

Time commitment 1 hour per year.

Final Tip: Keep it simple.

If your budget is taking more than 30 minutes per week, it is way too complicated so it will be hard to stick to your budget. Setting an alarm for 25 minutes and complete all of your budgeting in that amount of time. When the clock is ticking, we always seem to work more efficiently. After you master 25 minutes, try doing it in 20 minutes. Once again, when put to the text you’ll find a more efficient way to budget.

What tips do you have for budgeting efficiently? Do you think it is possible to budget in less than 20 minutes per week?

Wealth Building 101: The 3 Basic Ways to Make Money

Posted by Home Morgage | Personal Finance | Thursday 26 August 2010 8:18 am

Holding down a steady job and earning regular paychecks is both the easiest and most common form of earning an income. Building a solid foundation of deep wealth however, requires time, planning and a considerable amount of research. There are three general means to creating wealth: active income, portfolio income, and passive income.

Photo by Linus Bohman via Flickr

While these three concepts of wealth building are reasonably easy to understand and initiate, hordes of people continue to muddle through work days feeling trapped in their current job. Discovering other enjoyable ways of earning money is the simple key to financial success and happiness.

Almost everyone is interested in looking for ways to make some extra income, and almost everyone can utilize at least two of the following wealth building methods.

ACTIVE INCOME: Actively Working for Every Dollar.

The premise of being paid for the work a person completes that provides the worker with little to no control over the payment amount is a prime example of active income. Some companies do provide production bonuses or profit sharing as employment benefits, but the position is still considered a source of active income. Some jobs are dead ends, but that doesn’t mean the employee is really stuck — there are always ways to get a promotion or another job.

While most jobs still require regular daily attendance at the company’s specific location, many people are beginning to take advantage of technological advances to become freelancers. Freelancing provides a number of benefits over a traditional job.

The ability to work from home is a valuable commodity in a society that is continuing to emphasize family time and quality of life over years of sacrifice and commitment to a single company. Taking control over work schedules and work location coupled with the ability to be personally available to care for children or aging family members are some of the top reasons more people are seeking freelance jobs.

An attractive alternative to creating active income through employment is to become the employer. Achieved through entrepreneurship, it consists of creating and managing a company that offers a unique product or service. Though it requires significant risks of capital, it also offers the possibility of tremendous rewards. If you do this correctly, it’s certainly the most powerful wealth building strategy you can possibly achieve — owners/employers typically take the lion’s share of a company’s income as their own.

PORTFOLIO INCOME: Managing Money to Make Money.

With the exception of entrepreneurship, active income is seldom the path to significant wealth building. However, using active income to fund the creation of portfolio income can be. A balanced portfolio often includes a broad selection of investment options that can be obtained using accumulated active income. These investments can be gold mutual funds, high-interest savings accounts, index EFTs, gold and silver bullion, flipping real estate and many others.

Speculation can also be part of portfolio income though relatively few people understand that there is a difference between investing and speculation. While there is a certain amount of risk associated with both activities, investing is a process involving research into many different companies within a specific sector and having balance sheets and profit and loss statements documented by the companies to support the investment.

Speculation often involves a heavy dose of emotion. Excitement generated within the investing community can lead potential investors to conduct little to no research and instead rely on a “good tip” from a financial insider. Speculation often relies heavily on past performance and a good deal of hope and luck.

PASSIVE INCOME: Make Money Automatically.

Of the three means of creating wealth, passive income is the preferred method as it involves little to no work beyond initial implementation. Owning rental properties where the owner is not responsible for the maintenance, dividend investing, multi-level marketing and outsourced businesses are the most common types of passive income.

To learn more about building a passive income, check out these ways to earn a passive income.

Rental Properties. Renovating rental homes purchased below market value is one way to leverage capital. After obtaining a low interest home loan, the amount of money collected from renters each month creates passive income that pays the loan and interest amounts. This allows the property owner to pay off the mortgage without using additional capital.

Dividend Investing. Research can yield a list of companies that pay consistently high dividends to their shareholders. Rather than receiving the dividends as income and paying tax on the gains, investors looking to create passive income simply reinvest the dividends by purchasing additional shares of the company’s stock. Many companies offer low transaction fees for this service and investors benefit from the deferred taxes. Dividend stock investing is the easiest way to get into passive income with the least amount of up-front spending.

Multi-level Marketing. Often touted as guaranteed, get-rich-quick business opportunities that require fast action, multi-level marketing plans have a tendency to be fraudulent schemes or gimmicks. Researching various marketing programs may yield a few low-yield opportunities, but valuable research time is almost always better spent on other reliable options for creating wealth.

Outsourced Businesses. This is the top model of creating passive income. It involves creating one or more businesses that utilize outsourcing the majority of work to employees, contractors or agencies. The cost of outsourcing is far outweighed by the passive revenue created and the opportunities are limitless.

Maintaining a traditional job or expanding into freelancing is an excellent way to pay for daily expenses and accumulate seed money to begin accumulating true wealth using portfolio and alternative income streams. Having the skills and information required to create all three types of income simultaneously is critical to maintaining a steady income while building a strong financial foundation.

8 Home Maintenance Tasks And Repairs To Do This Fall

Posted by Home Morgage | Personal Finance | Wednesday 25 August 2010 8:18 am

Home maintenance can be expensive but not nearly as costly as the price of neglect. Not only can you avoid costly repairs by keeping your home well maintained but you can also avoid serious risks to your family’s health such as mold and carbon monoxide poisoning. That said, here are the tasks that you should do this fall to keep your home and appliances in good working order. If you rent, ask your landlord if and when they plan on performing these maintenance tasks. Even if you don’t have ownership interest in the property, you could still have extra expenses from poorly functioning appliances and the health risks are the same for owners and renters.

Photo by Nathan Reed via Flickr

Inspect Heating System

You should have your heating system cleaned and inspected every year before you turn it on. This will help the system to work at peak efficiency and can identify potential hazards such as poor ventilation and cracked or damaged parts. Be sure to change the filters throughout the year as recommended by your owner’s manual.

Clean Gutters and Rain Pipes

These should be cleaned of all debris after all of the leaves fall to ensure that rainwater and melting snow drain away off of your roof and away from the sides of your house. Clogged gutters and drain can result in leaks and other water damage to your home.

Change Batteries on Safety Alarms

An easy way to stay on top of this critical task is to remember to change the batteries on your smoke and carbon monoxide alarms twice a year during the time change. You’ll also want to check to make sure they are in good working order and replace as necessary. While you’re at it, check all of your fire extinguishers to make sure they are not expired.

Remove or Insulate Air Conditioner

If you have a window unit put a weather cover on it to avoid drafts or if practical, remove it altogether.

Inspect Chimneys and Fireplace

Have all chimneys professionally cleaned and inspected. Get your fireplace ready for use by making sure all ashes and soot are removed.

Flush Water Heater

Drain it completely and flush all the sediment out to prevent build up that can affect the flow and quality of your hot water.

Install Storm Windows

Take off any screen windows that you have and if you have them, put on the storm windows. Seal any drafts or cracks around windows and doors to make sure that the cold air doesn’t get in and your warm air doesn’t escape.

General Cleaning

Fall and spring are great times to do a thorough deep clean of your house. Thoroughly clean behind your refrigerator including vacuuming dust off all the coils, your range hood, your dryer vent and other seldom-seen areas where grime and dust can accumulate to create a fire hazard. Take inventory of your storage areas and take all hazardous materials that you no longer need (leftover paint, old batteries, etc) to be properly disposed of.

Many of these maintenance tasks can be do it yourself projects but don’t hesitate to call a professional if you don’t know what you are doing and to get inspections done. A little money out of pocket can save you a lot of cash, time and aggravation down the road not to mention help to keep you and your family safe and healthy. In the future, consider taking the pain out of these seasonal expenses by starting a home maintenance fund.

National Money Night Talk: Money Tips for Teen Giveaway

Posted by Home Morgage | Personal Finance | Tuesday 24 August 2010 8:18 am

Families around the country are encouraged to sit down and talk about money and financial responsibility on September 16, 2010 in honor of National Money Night Talk. In a joint effort by American Express and Jean Chatzky, parents can visit www.moneynighttalk.com to make a pledge and get prepared to have “the money talk” with their kids by accessing exclusive Jean Chatzky videos, FAQs, talking points and resources endorsed by the Council for Economic Education.

This free online resource is available in three different tracks based on age:

middle school,
high school, and
college

So parents with young adults ready to head off to school can go online now to start and sustain the money dialogue.

Nearly nine in ten parents (88%) and 79 percent of kids are already discussing financial responsibility with one another, yet nearly 40 percent of parents wish there were tools to help monitor their kid’s spending.

American Express has several options for parents looking to stay in control of family spending, while still extending financial empowerment to their teens and young adults.

American Express Cardmembers can add an Additional Card with Custom Limits^SM to their account to manage and track a spending limit created for their teen (age 15+). Parents can easily go online and adjust the limit for their child’s card at any time, and for those 18 and up, the Additional Card positively impacts the teen’s credit score.
PASS from American Express is another great option for parents to have peace of mind when handing plastic to their teen. PASS is a prepaid, reloadable card parents give to teens. It’s a smart alternative to cash, credit and debit — teens don’t have to carry large amounts of cash, there’s no risk of overspending, and funds can be replaced if the card is lost or stolen.

Check out the website for more information and follow the online discussions or “talks” on Twitter leading up to the night with #TheTalk hashtag.

National Money Night Talk Giveaway

In celebration of National Money Night Talk, we are hosting a giveaway around family finances! We want to know from you…

What is one tip you have given your teen or young adult on ways to manage money better?

Post your answers in the comment section and enter to win a $50 Amazon.com Gift Card, courtesy of American Express. In addition to winning the prize, American Express will pick their favorite tips from this giveaway to post on the National Money Night Talk website!

Spread the Word!

You can help us spread the word by sharing this article with your friends and family.

Via Twitter:

Give us your best college-bound money tip for National Money Night Talk and win! http://bit.ly/bu5ER5 (via @moolanomy) #TheTalk

here’s another tweet you can also use:

Check out the National Money Night Talk giveaway @Moolanomy blog and win! http://bit.ly/bu5ER5 #TheTalk

Thank you for your help! Write your comments in today, and good luck.

10 Surefire Ways to Earn Passive Income

Posted by Home Morgage | Personal Finance | Monday 23 August 2010 8:18 am

Everyone wants to make more money, but very few want to work more hours. The best way to work less and make more money is to learn how to generate passive income. Passive income can be described as income that is received at regular intervals that does not require a lot of work to sustain it — money that you automatically make whether you work any more or not.

Photo by ErRbBbiiIE via Flickr

We have covered some wealth building tips in the past, like the list of alternative ways to make money. If you want to earn more money, the following are 10 ways to make money passively in no particular order for income potential:

1. Dividend Investing

Becoming a stockholder in a company is a great way of earning income with very little time involved. Buying shares in the business, you can then decide whether you wish to receive quarterly dividend checks (money earned from your investment) or to reinvest the money back into more shares. Dividend investing is easily one of the most popular sources of passive income.

2. Rental Property

When you buy rental property, you can start receiving monthly income almost immediately. The work involved requires buying the property one time only. After your mortgage on the property is paid, anything left over is considered passive income.

3. Peer-to-Peer Lending, e.g., Lending Club

Online you will find a wide variety of peer lending groups. When you become an investor, you are simply lending a certain amount to other members of the group who need to borrow money. With Lending Club, you can expect to earn a 9% interest on average.

4. Building Websites

If you have a knack for building websites that can generate a high amount of traffic, you have a great opportunity to earn passive income. Many people find that by simply creating an information site about a topic they are passionate about, they can get high traffic and earn income by either selling the advertising space on the site or by joining an ad revenue sharing program. Website building is hands-down the most reliable way to make money online.

5. Bank Accounts

If you like money, you will like seeing it grow. Instead of putting your money in low-interest earning accounts, shop around and find the banks and accounts that will pay you the most money. The money earned on interest may seem small, but the longer you keep it in the bank, the more money you will make. Check out these high interest savings accounts to find the best rates.

6. Bonds

Many individuals are earning a lot of passive income by investing in bonds. These treasury bonds, also known as T-bills or T-bonds, are long-term investments. When the bonds mature or come due, you earn money on them. For example, you could purchase a $100 U.S. Savings Bond for $50, but when it comes due, you get the $100.

7. Writing a Book

If you write a book, you can earn royalties for as long as people keep purchasing it. Many great authors receive monthly royalty checks on books they wrote twenty years prior. All you have to do is look at authors like Stephen King and Danielle Steele to know this is quite possible. Even if your book in not on the best seller’s list, you still have a great chance of earning a passive income from it.

8. Writing for the Web

Another way to earn passive income from your writing is to join some of the online article sites. Many of them pay you for the views your articles get each month or when someone clicks on ad that has been placed on your article’s page. Many writers are earning as much as $300 or more each month in passive income from these sites. Hubpages.com, Squidoo.com, and eHow.com are just a few examples.

9. Residual Affiliate Marketing

When you become an affiliate or network marketer, your goal is not just to sell the products; you will also work to recruit other people to become an affiliate, as well. When they sell anything, you earn a percentage of the commission. With enough recruits in your downline, you could earn several thousand dollars a month in passive income. This is extremely rare, of course — and watch out for scams and hype.

10. Selling Insurance

When you sell insurance, every time one of your customer’s renews their insurance, you will earn another commission. Signing up several customers each week ensures your future income, as the majority of your customers will renew their policy each year.

As most people already work forty to fifty hours each week, the last thing they want to do is put more time in to make more money. Instead, they could be earning passive income. By investing some time into learning the different methods of passive income generation. With passive income, you could stop working so many hours and still make more money than you were before. It is all a matter of understanding how wealth building works and how to make it work for you.

How To Ace Life Insurance Medical Exam and Save Money

Posted by Home Morgage | Personal Finance | Friday 20 August 2010 8:18 am

I recently switch my life insurance from Liberty Mutual to Genworth. The first time I got my term life policy, it was difficult for me to get a decent policy because I ran into a shady agent who somehow got me into a poor health bracket and recorded the information in the Medical Information Bureau (MIB). Fortunately, the agent at Liberty Mutual helped me worked through it and got me a decent policy with $500,000 coverage.

However, my life situation changed over the past 12 months and I wanted to increase my policy to a 30-year term life with $1 million coverage. After asking a few friends about who they carry a policy with, I settled on working with Genworth. Turn out this was a good move since I am only paying about $10 more per month for the extra $500,000 in coverage.

Anyway, I just want to share this email I got from my agent when I was going through the application process, which I thought has a lot of useful tips to help you get the best possible rate:

Money Saving Exam Tips

Your exam affects your life insurance rate, so it’s important to prepare. We need to have you fresh and fasted, so be sure to schedule your exam for first thing in the morning. You only have one chance to get the best lab results and the following tips below will help make that happen:

5-7 Days Before Your Exam

Stick to a healthy diet the week prior to your exam. Minimize the use of salt and avoid sugary and excess fatty foods.

3 Days Before Your Exam

Do not drink any alcohol products for 72 hours prior to the exam. Alcohol is processed by the liver and can cause liver enzymes to become elevated.

1 Day Before Your Exam

Stay away from ALL caffeine products . Caffeine can elevate blood pressure.

Avoid nasal decongestants and pain medication such as aspirin, acetaminophen and ibuprofen (unless directed otherwise by your doctor).

Do not participate in any strenuous exercise . No jogging, weight lifting or swimming. This can cause elevated protein in the urine.

Fast 8-10 hours prior to the exam-taking place. If your exam is scheduled for 8:00am, begin your fast the night before at 10:00pm. Do not eat or drink anything except for water until you complete the exam the next morning.

Get a good night’s sleep .

The Morning of Your Exam

Don’t eat breakfast or use tobacco .

Have a list of your doctors, including addresses and phone numbers on hand.

Relax . If you followed these exam tips you have nothing to worry about.

Obviously, you should or should not be doing some of these things on the list. For example, you should be eating healthy diet regardless of insurance medical examination, and stop smoking for 7 days is not all that useful either.

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