Category Archives: Income Streams

8 Tips for Setting Up a Home Office on a Budget

Income Streams, Retire Often, Working In Retirement

This article was contributed to Leisure Freak by Michael Everett, who is a chemistry teacher with a passion for house design.

Whether you’re a worker who switched to working from home or a freelancer working after retirement, you’ll need a comfortable working environment you can call your own. Although this space is essential if you want to remain productive, that doesn’t mean you will need to burn a hole in your wallet designing it. After all, not everyone has enough space for a separate room or enough of a budget to get help from professional interior planners. Luckily, you can do it yourself with the help of some of our tips. Don’t worry; these eight tips for setting up a home office on a budget won’t compromise your wellbeing. They will help you remain frugal, comfortable, and happy.

A woman working at her desk in her home office, writing something in a notebook.

Featured image source.

1- Create a budget beforehand

As with any other home design endeavor, you must create a budget. This will not only help you better understand how much money you can spend, but it will also enable you to control your impulses while making purchases for things your workplace needs. Go through your monthly expenses and put aside the money needed for this project. Be realistic about it, and do not spend more money than you can comfortably handle. This budget is the foundation the rest of the tips will significantly depend upon.

 

2- Designate a spot for your home office

As previously mentioned, you most likely won’t have enough space in your home for a separate home office. This is perfectly alright! Even a tiny, peaceful corner of your living room will do. On the other hand, if any of your other rooms have an odd spot you cannot seem to utilize, why not transform it into a cozy working area? Walk around your home and think about where your future office space would make the most sense. Opt for areas that have less traffic and are less noisy to stay productive even when working from home.

3- Remove any unnecessary items

A great tip for setting up a home office on a budget includes decluttering. Decluttering is an accessible way for you to maximize your home office space. Furthermore, it may even earn you some money! Clear out the space in your designated home office by either selling, donating, gifting, recycling, or throwing away any unnecessary items. However, you may rent a storage unit if you’re not ready to part with some belongings. It is also one of the top reasons why Americans rent storage units in the first place. You can use it when working from home and still keep an eye on your belongings. Alternatively, it will also give you the chance to deal with them at a later time.

4- Prepare a floorplan and a list of the necessary items

Preparation is vital if you want to reduce the number of funds you spend on redoing things you’ve done wrong. Measure the area you will turn into a home office and create a precise floor plan. Additionally, make a list of items you want in your new home office. This list should be categorized so that the absolute essentials are separate from things you may want but not need.

Some of the most notable essentials are:

  • A surface to work on
  • A seat
  • Devices such as computers, laptops, and tablets
  • Office and specialized equipment

5- Repurpose, bargain, DIY, or trade for needed items

We do not advise buying new office items straight away, even though you might be tempted to. Be creative and choose either DIY projects or repurpose old furniture or objects. If you have an old table that needs a bit of love, why not give it what it needs and save yourself some money to spend on other things? Also, do not neglect the benefits of used items! They are always more affordable, and you may find some hidden gems. For example, used art tools can be quite beneficial if you plan to start earning from your hobbies. Lastly, if you need to purchase items, always look for ones that are on sale or that you can bargain for.

6- Do not forget about ergonomics

Remember to take care of your comfort and wellbeing despite your desire to cut down on anything unneeded. After all, you will use your home office for many hours during the day! If your monitor is not at eye level, reuse old boxes or books to prop it up. On the other hand, if your chair is uncomfortable, invest in one that is more ergonomic. Whatever is troubling you shouldn’t be disregarded. Keep a close eye on how your home office makes you feel and make any necessary adjustments.

7- Decorate using items you already have

The decor you use in your home office is one of those things that can not only satisfy your eye but may also inspire you. And who doesn’t need a bit more extra motivation to work? You can choose different decor based on your style and budget. We suggest using whatever items you already have by giving them a new purpose or space. Place a clock above your desk to monitor the time or plenty of lovely photos to calm your mind. Plants will add a sense of life, quotes may motivate you, and candles can make your home office smell divine. If you ever decide to purchase something, keep in mind the mentality of “I deserve it” can be harmful if brought to an extreme. Especially if it makes you purchase more items than you may need.

8- Let the light in

While designing a home office, you may forget about an essential factor besides peace and quiet, and that is light. Good lighting can make or break your working mood and create a different ambiance. Make sure to have at least one source of natural light in whichever space you decide to set up your home office. Use mirrors and lighter hues to make the light bounce about the room. However, you most likely will require additional light sources. A good light, whether it is a desk, wall, or floor lamp, will help you stay focused and avoid eye strain. We suggest using lamps you may have already if you’re working on setting up a home office on a budget. When possible, pick those whose intensity can be altered and that do not add glare to your devices. 

 

Thank you Michael Everett for your insights on creating a home office on a budget in a time when work from home opportunities are very attainable.

Author Bio: 

Michael Everett is a chemistry teacher by profession but a passionate house designer at heart. He has been sharing his knowledge as a self-employed content creator for numerous websites, including Zippy Shell Northern Virginia. His favorite hobby is spending time with his cocker-spaniel dog named Ruffles.

Ways to Turn Your Home Into a Money-Making Property

Income Streams, Renting Out A Room

 

This article was contributed to Leisure Freak by Amanda Hill.

Owning a home is seldom cheap. Even if you take care of property taxes, utilities, and mortgage payments, you will still need some leftover funds for repairs and renovations. Fortunately, your home doesn’t have to eat up your money but can also help you generate it. This article will go over different ways to turn your home into a money-making property and what to consider before you do so.

Two people holding a model of a home.Image Source

How to turn your home into a money-making property

The main trick to turning your home into a money-making property is understanding its potential. Every house, be it small or big, has some way to monetize it. In fact, most passive income ideas for retires rely on using extra space. The sooner you can recognize the potential of your home, the sooner you can start generating some serious revenue.

Rent out a suite

The easiest way to start making money from your property is to add a rental suite to it. Mind you – depending on where you live, you might have to adhere to some legal regulations and standards. But, if you can, adding a suite and renting it out is an excellent way to earn some extra bucks. Some homes already have the capability for a rental suite and only require minimal renovation to make them operational. On the other hand, there are those where adding a rental suit means building it from the grounds up. So, try to plan out what your property needs before you start renovating.

Researching before the renovation is also essential for organizing your everyday life. It is usually a good idea to move out of your home during the renovation, as they will be too loud. And while it is possible to organize a move in seven days’ time, you really ought to plan it out as soon as possible. You can even use the renovation as an excuse for an early vacation.

Rent out accommodation

If you cannot rent out a full-fledged suite, you can always opt for providing accommodation. A spare bedroom in your home can easily be turned into a room-for-rent, especially if it has its own bathroom.

If it doesn’t have one, you might still be able to rent it. Areas close to universities are always filled with young professionals looking for a quiet room to rent out. But if you go with the shared bathroom option, know that it will be at a lower price. Furthermore, you might have to organize your life in accordance with your tenant. So, all in all, it might bring you some headache.

Run a bed and breakfast

Running a b&b can be a great idea if you live in a tourist-heavy area. The more bedrooms you can spare, the more tourists you can accommodate. But, keep in mind that running a bed-and-breakfast isn’t simply about collecting money from tenants and cooking them breakfast. To run a decent B&B, you have to consider numerous factors and take care of many problems in advance to run a decent B&B. Do yourself a favor and read up on what running a bed-and-breakfast is truly like before you go at it.

Rent out storage space

Does your property come with a garage? If so, a garage can be an easy way to turn your home into a money-making property. You can easily use it as rentable storage space. A lot of people need extra storage room, either for their everyday items or something larger like their car, boat, or furniture. This can be especially useful if you live in a densely populated area lacking storage space. In that case, renting out your garage can be a great source of revenue, especially if you can guarantee safety. You can insure your garage with minimal investment and make it viable storage space. Just make sure that you take care of the legal aspects of storage and take on tenants that seem trustworthy.

Gardening

Let’s say that you have no extra room for any renting. Is there a way for you to utilize your property to generate revenue? Of course, there is, especially if you have extra time. Namely, one of the options is to use your property as a garden. You can easily turn your home into a functional garden with modern gardening tools. Homegrown, well-maintained, zero pesticide food is always in demand. And you’ll likely be able to get a reasonable price for it, especially if you tackle your marketing correctly. The bigger your property is, the more space you can use for gardening. But, if you have limited experience, we suggest that you start small and calculate your expenses carefully.

Run a home business

Gardening is only one instance of a much broader spectrum of using your property for revenue. Namely, there are tons of business ideas where your home can be all you need. Depending on your skills and preferences, you can easily find work that you can do from the comfort of your home. To give you some examples, you can:

  • Work as a translator.
  • Film online tutorials.
  • Make travel plans for people.
  • Take care of pets.
  • Take care of kids.
  • Create and sell items.
  • Design clothes.
  • Massage people.
  • Train people.
  • Plan events.

The more you look into it, the more you will see just how many jobs are available and surprisingly lucrative if you own a property.

Final thoughts

To turn your home into a money-making property, you need to have a firm understanding of the finances behind it. Extra taxes will likely be a part of your business endeavor, as well as additional expenses for utilities and renovation. So, do yourself a favor and have a clear idea of how much money you need to make for your business to be profitable.

Thank you Amanda Hill for contributing this informative post which provides timely money making tips to Leisure Freak.

Author bio:

Amanda Hill worked as a business consultant and project manager for over 20 years. She now focuses on raising her daughters and writing helpful articles for companies like number 1 movers.ca. Her main interest lies in commercial relocation and commercial planning.

How to sell your old furniture for the best price

Downsizing, Income Streams,

This post was contributed to Leisure Freak by antique furniture enthusiast Robert Plane.  

So, you’ve been thinking about downsizing lately? You still haven’t figured out what to do with some of your old furniture? Since you’re reading this, there’s a good chance you’ve decided to sell it. We know it’s not the easiest thing to do. Saying goodbye to pieces of furniture that have been in your home for god knows how long is never easy. Still, we’re going to help you get the best offer. In the article below, you’ll find some tips on how to sell your old furniture for the best price. Stick around for some helpful info.

Sell Your Old Furniture-An old wooden table

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How to determine value?

Since you’re probably new to selling old furniture, here we’ll try to show you how to determine the value of your possessions. First and foremost, see what you already know about the item you’re planning to sell. Here are some questions you might need answers to: Was it made by a famous manufacturer? How old is it? What’s the current shape of it? If you lack answers here, you might want to consult an expert antique dealer. You might want to get a quote from a couple of them. Also, check the online market for similar items and see how they’re priced. Now, your furniture doesn’t have to be antique-kind-of-old to sell it for a good price. 

The inside of an antique shop, representing how to sell your old furniture for the best price.
If your furniture’s antique, you might want to get a quote from a couple of antique dealers.  Image Source

Try to be realistic

While determining the price before putting your item(s) on the market, try to be realistic. What do we exactly mean by that? Well, imagine you have a wardrobe that once belonged to your grandmother’s mother. You don’t want to underprice it, right? Since you’re emotionally attached to it, there’s a chance that you’ll overprice it so much no one will want to buy it. Keep in mind that the potential buyers don’t have that kind of bond with the objects you’re trying to sell. The best price is the one you can achieve by never going too low or too high. Finding something in-between is, as always, the best option there is. On the other side, being a bit more optimistic won’t hurt, not just when selling furniture. Find the balance!

Where to sell? (the price depends on the place)

When wondering how to sell your old furniture for the best price, it’s crucial to figure out where you will sell it. Here we’ll show you a couple of options when it comes to choosing the place where you’re going to sell your stuff.

Organize a good old yard sale (offline mode #1)

Now there’s a picture pretty much branded into our brains. Nothing like a good old yard sale! Raymond Carver covered it in his stories and poems, so it’s pretty safe to say that yard sales scream Americana more than anything else! If you have a lot of furniture to sell and some time on your hands, you might want to try this option. Maybe you’re a natural bargainer, and this option might help you get the best price.

A yard sale. 
If you’ve got some time on your hands, organize a yard sale!  Image Source

Contact a consignment store (offline mode #2)

If you’re a bit short on time, this might be the best option. Contact a consignment store and see if they can send someone over to check your stuff. Please note that you probably won’t get a good offer since they plan to profit from selling your furniture later on. As we’ve mentioned, this comes in handy if you want to save on time.

Put in on the web

If you’re putting your items on the web, uploading quality photos is a must. Put yourself in the buyer’s shoes and imagine what you’d think if someone didn’t include the images in the ad. Also, try not to provide false information. Be honest with the buyer about every little thing that might need some repairing. Buyers know how to recognize fraud nowadays, and they’re more likely to buy an item that seems believable. 

Preparing your items for shipment

Imagine someone bought the king-sized bed you put up for sale a couple of days ago. The buyer is not from your town and says they will organize the shipment; you just need to pack it the right way to avoid getting damaged during the transport. Don’t worry; we’ll tell you how to prepare it with ease. It’s very simple: first of all, clean it like a pro. Secondly, see if you can dismantle it into parts and wrap everything in bubble wrap and plastic sheets. If the bed goes as a whole, put a blanket underneath it and carry it safely to the truck.

A king-size bed.
Make sure to clean the object you’ve sold before shipping it to the buyer.   Image Source

Learn some negotiating skills

Now, this is something that comes naturally to some people. We all have that one friend that’s a great bargainer. Let’s assume you’re not so good at it. The first rule of the process is: try not to lose your cool. Always know you have the option to turn down any offer you find unjust. By being honest with yourself, you’ll seem more confident to the buyers. As we’ve mentioned before, be reasonable when naming the price. That way, you’ll probably earn the trust of your buyers, and there won’t be any need for some serious haggling. Still, it would help to be well-prepared for the ordeal.

Final words

Those were some tips on how to sell your old furniture for the best price. We’re sure that by following the simple tips we’ve mentioned above, you’re bound to get the best offer for your old pieces. Put some of your natural trading skills into action! Most folks have them; they just don’t use them!

Much thanks to Robert Plane for contributing this timely article to Leisure Freak. There’s no time like the present to find ways to downsize, pickup some needed cash, and at the same time put unused or unneeded furniture into the hands of those who can use it. 

Author’s bio:

Robert Plane is an antique furniture enthusiast with an almost religious approach to indie video games and 80’s VHS culture. A weird combination, but one that works.

 

Tips For Achieving Job Success

Career, Income Streams, Working In Retirement,

This post was contributed to Leisure Freak by the site Value of Stocks. The first step in reaching financial independence is earning income which requires having a level of job success. Here are some tips for effectively choosing how best to do that.

It is fairly easy to get lost in this life. Not knowing which path to take to reach your goals is fairly common. We all want to achieve some kind of success, probably in different areas. Wealth perhaps, or financial freedom. There are multiple ways to achieve your dreams and your goals. Not all of them are the same, but they require a solid foundation that is similar and independent from the path you choose to take. 

Tips For Achieving Job Success

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Think Of Job Success As More Than Money

Find Your Calling

This is perhaps the most important step to achieve success. I am not talking here about financial success but a successful craft in which you can specialize. Finding what you love to do is perhaps one of the most important steps to become happy and successful. No matter how much financial success you achieve, it isn’t worth doing something just for the money and the final outcome. You should focus on doing what you love, and doing it everyday. This is one of the keys to achieve your ultimate goals. Finding your calling is as important as finding the path to financial freedom. It is perhaps the most important step you should take. 

Although the numbers are debatable, it is estimated that 85% of all the people are not happy with their jobs. It is just foolish and masochist to spend your whole day doing something you don’t like, in order to get promoted and still do something you don’t enjoy. Just for the possibility of reaching a certain financial goal. It is rather important that you spend most of your time doing what brings you joy. This may certainly not be the most profitable job you have in the first place. But your love for that activity will ensure that you can constantly get better.

Working for Someone or Be Your Own Boss

It takes a special trait of character to go into business. Entrepreneurs are people that are willing to take a risk, working multiple hours for something that might ultimately fail. This should not discourage you at all. Most of the time entrepreneurs fail, but the lessons you can learn from failing are far greater than the ones, success might teach you. It also has to do with personality, some people like to have a fixed job, and are perfectly happy working for a company for a long time. I am not forcing you into any direction here, it should be a personal decision, and you must take that decision early on in life. Mainly because failing as a young entrepreneur is something uncomfortable but rather easy to overcome. When you reach a certain period in your life, where you have multiple responsibilities. Your family might even be dependent on you, there is very little room for failure. The sooner you start your entrepreneurial endeavour the better.

Start a Company

If you are starting a company there are three main ways to succeed. I will try to explain all of them so you get a better perspective.

1- Better Product/Service

One of the ways to succeed is to start a company which has a superior product or service. This is extremely difficult, because most of the time there are many other competitors trying to reach the same objective. Although it is not impossible it is still a far fetched idea, that might help you achieve this goal.

This is not by far the only way of achieving your goals. There are a number of ways to succeed without being an incredible innovator. Just look at Facebook as an example, at the time, there were numerous other social media platforms that were already up and running. This should also reinforce that no matter how good your idea for the product or service is, you have to execute it perfectly. Business success is much more about execution than the idea itself. Many people might have the same idea, but the execution is the key differentiating factor. This leads us to number two.

2- Better Way of Doing Things

This is the key for most of the business success. It is not about the idea itself it is all about execution. You will also find that some business opportunities lie in identifying a way some things can be done better. Let’s look at Walmart, there were retailers before them. What made them stand out, was their execution. There wasn’t any revolutionary product or service, just a much more efficient way of doing things. 

3- Cheaper Way of Doing Things

This leads us to number three. Executing with the lowest cost. This is another way that sets apart companies, solely based on their profitability. It is inherently tied to the execution part of the business and more specifically regarding efficiency. If for some reason you think there is a better, or more efficient way of conducting a certain business. And that translates into cheaper cost. You can pass that towards your consumers and it should allow you to grow over time.

Conclusion

I hope you were able to learn something from this. I would go even further and I expect you to find what you love doing, and spend the rest of your life doing it. Just like I love to write about finance, and try to help people think outside the box. Life is short and I wish you all the success and happiness you can achieve. Remember life is not about the material things, it is about doing what you love and meaningfully impacting the ones you like the most, family and friends. You won’t be in your deathbed missing all those hours spent doing something you hate, for that hefty paycheck or the large amounts of money you made. Focus on what is important and good luck.

This article was contributed to Leasure Freak by the site Value of Stocks. 

Author bio: Value of Stocks is an independent financial information provider. Focused on analyzing stocks with a value investing approach. Our main goal is to help investors make better investment decisions.

Passive Income Ideas for Retirees

Funding Retirement, Income Streams

Passive income is always a great way to supplement your main source of income and earn more money each month, and many people use it to retire early. That said, you don’t have to stop generating passive income after retiring. In fact, most retirees have even more time to spend managing alternative forms of income than they did while they were working.

This article will cover some of the best ways for retirees to earn substantial passive income and continue to make money throughout retirement. Once you take the time to set them up, these ideas offer a surprising amount of income and require very little ongoing work.

Passive Income Ideas for Retirees

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Renting Out Space

Renting out space is one of the simplest strategies for adding passive income, and many retirees have extra rooms in their homes. Depending on your location and the size of the space, you could earn hundreds of dollars per month by renting out a single room.

Websites like Airbnb are the most common way to rent out space as a secondary source of income, and they facilitate important aspects of the transaction like payment and vetting tenants. Even small rooms can be worth a lot of money if you live close to a major city.

Renting Out Storage

While most people think of short-term tenants when they think about renting out space, you can also earn money by renting out extra space for storage. Storage space typically doesn’t demand as much money, but there are a few reasons to consider this approach.

The most obvious benefit of renting out space for storage is that you don’t have to host visitors in your home. While the vast majority of guests are respectful, living with a stranger will likely impact your comfort at home. Some people are willing to give up some of the money they could have earned in order to maintain their lifestyle.

There are a growing number of services designed to connect renters with storage space, although demand and availability still vary widely from one location to another. Look into the options in your area if you’re interested in renting out extra space for storage.

Peer-to-Peer Lending

Most loans are provided by a bank that offers money upfront, but you can now earn money as a lender by contributing to a peer-to-peer lending fund. These solutions offer lower interest rates to borrowers relative to those available with most banks and credit unions, and they give lenders the opportunity to earn more in interest than they could with a savings account or certificate of deposit.

Lending obviously comes with certain risks that aren’t involved in other methods of saving and investing, but peer-to-peer lending services mitigate risk in a number of important ways. Like conventional lenders, they perform credit and background checks to ensure each applicant is a qualified borrower.

Depending on the service you use, you may be able to make offers on individual loans or contribute to a fund that’s used to cover a wider range of loans. As with any other investment, diversifying loans helps mitigate risk and prevent a single bad borrower from ruining your investment.

Similarly, you can target higher returns by bidding on loans with a higher level of perceived risk. More risky borrowers are more likely to default, but you’ll be compensated for that risk with a better interest rate. The right balance for you depends on your risk tolerance and whether you could afford to lose the money.

Peer-to-peer lending services often work with people who couldn’t qualify for traditional loans, so this form of passive income also provides an opportunity to help people in difficult financial situations. Of course, it’s up to you to determine which applicants you can trust to pay back the loan.

Investing in Real Estate

Investing in real estate is a common financial goal for people of all ages, but retirees are in the unique position to dedicate their time and resources to this kind of passive income. Real estate can be a time-consuming field, so it isn’t always easy to manage if you’re also working a full-time job.

If you’re new to real estate, consider starting with a rental property to start earning consistent income after making your initial investment. Keep in mind that you’ll need to budget for operating costs and other expenses, especially if you’re planning to manage multiple properties.

In addition to the money you earn in rent, real estate offers the potential to increase in value over time. Of course, these changes are dependent on the housing market in your area, so it’s important to understand market trends before investing.

It will likely take years to break even on your rental, but property is a worthwhile investment that will continue to hold value throughout the rest of your life and beyond. Properties are also relatively liquid, so you should be able to find a buyer if you ever change your mind.

Flipping Properties

While most new investors focus on rental properties, you can also make money by buying old or rundown properties, fixing them up, and selling them at a higher cost. Flipping homes involves a wide range of skills and knowledge, so it’s not right for everyone. That said, you could potentially earn a substantial amount of money if you’re able to identify good values.

If you’re new to flipping properties, consider working with someone who has firsthand experience on similar projects. They’ll probably be willing to work with you if you offer funding along with a cut of the profits, and their expertise will help you manage renovations while minimizing unnecessary costs.

People of all ages can pursue lucrative passive income projects, but retirees often have even more time to invest in a new source of income. These are just a few of the most effective ways to generate a reliable income without going returning to your career or taking a part-time job.

 

This informative post was contributed to Leisure Freak by Logan Allec at Money Done Right.

Logan is a CPA, personal finance expert, and founder of the finance blog Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money.

Why I’m Fascinated With Dividend Investing

Income Streams, Investment Strategy, Retirement Plan, Risk Tolerance

I’ve been fascinated with dividend investing for many years. It goes back long before I started my journey to financial independence and early retirement. It seems so simple. You buy a company stock that is stable and has dividend history on their side. A stock that figures for a potential future of continued business with dividend and stock growth. They then return to their investors a dividend that can either be reinvested to buy more of their stock or distributed as cash. My wife and I have financially benefited from dividend investing. We have dividend stocks in Mutual Funds and ETFs¹ within our portfolio. We have also benefited from growing wealth with reinvestment and harvesting distributions by owning individual stocks within our retirement accounts.

Why I'm Fascinated With Dividend Investing

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Some Folks Aren’t As Fascinated With Dividend Investing As I Am

Dividend focused investing doesn’t thrill everyone. A quick internet search will reveal opinions where fans of dividend investing will explain how they build their wealth and even divulge their monthly passive dividend income. You can also find just as many who aren’t fans of dividend investing who will explain why growth stock investing is the best and the only way to invest. 

The real appeal I see with dividend investing is that we have options to how dividends can be used depending on our financial situation. At least that’s my argument for using dividend focused investing as part of our retirement portfolio strategy. For those dividend investing naysayers who tell me to just buy some bonds, well I do have bonds as part of my portfolio diversification² strategy. They just don’t do it for me like dividend paying stocks do. Bonds feel like a loan I’ve made, one that can be paid off early. Once mature I get my money back but then other bonds have to be bought to replace them. Dividend investing feels much different. I like owning a piece of the company.

My Story With Dividends

Using dividends to pay down debt

All of my 401K match was in company stock in the first 20 years of my career. That was before my company was eaten by a growth company. There was no option to reinvest so every year I would receive an end of year dividend distribution. What I did was add it to my house payment and applied it to my mortgage principal to pay off my mortgage faster. It equated to about 3 months in additional principal payment. It was a painless way to reduce what I would end up paying in mortgage interest. Which at the time was at the going rate of 8%. Wow!

Reinvested dividends to increase wealth until needed for retirement

Today my wife enjoys a quarterly distributed dividend in her early retirement from her old ESOP. It is part of her retirement funding. The dividends come from owning her employer’s stock. Existing share to dividend yield is 5%. Over her career she had her investment split where 50% was invested in their Class A shares which reinvests dividends and 50% in their Class B shares that distributes quarterly dividends. 

After 20 years of equal amounts invested, the dividend reinvested Class A shares fund has 71% more in it than the Class B side of the account. It shows that even with a stable value stock that’s unlikely to rocket in share price appreciation, reinvested dividends do work through compounding to increase overall wealth until electing to use dividend distributions as part of a retirement income strategy.

A friend’s investment move that feeds my fascination with dividend investing

A company executive that I worked with told me something regarding dividend investing that seared into my brain. It was March 2009 and I lamented my portfolio losses right when I was planning to retire early. He had pulled out of investments in 2008, several months before the market found its bottom. He was planning to retire in 3 years while in his lower 60s. He told me that he just moved $800,000 of cash holdings to be split between AT&T (T) and Verizon (VZ). At that time their stock price to dividend yield was about 8%. It was a risky move, even with understanding the telecom industry we were part of, but he told me: 

I don’t care if these stocks ever rise another dollar. I am locking in at an 8% return. I will reinvest the dividends until I retire and then take distributions to use for retirement income. 

Both stocks have climbed since then³. A quick look at AT&T shows it was $25.XX a share around that time and recently traded at $33.70, about a 30% increase. Its current dividend yield is in the 6% range. Verizon was trading then at $28.XX, now $57.37, a 101% increase. It’s current dividend yield is 4.26%. Was he lucky? Genius? Stupid? Risky? Whenever I tell this story I hear it all. Personally, I wouldn’t risk going all-in with a large sum like that on two dividend paying stocks, especially within a single industry segment, even if I had an equal amount to invest elsewhere. 

But here’s the overall message that I took from him. 

What imprinted on my brain is the concept of being satisfied with locking into a return based on the share price to dividend yield percentage you buy in at. That is of course as long as the dividend payout is sustainable, which is always the question. With this mindset, any stock price appreciation is just gravy. In a way, dividend investing with this mindset is like having an annuity that you can sell out of at the stock’s share price whenever you feel you should, need to, or want to. 

What To Consider When Buying Dividend Stocks 

Sustainable Dividend

A key aspect of dividend investing is owning stocks in healthy companies that can sustain the dividend it pays for years going forward. This takes analysis of the industry, company prospects, direction, management, financial strengths, etc. 

Dividend Payout Ratio

How safe is the dividend? Look at the payout ratio, the percentage of company income the company pays out in dividends. Having too high a percentage could spell trouble. There isn’t much left for the company’s retained earnings to promote growth. A lower percentage can mean there is sustainability and room for dividend and/or stock growth but may be too little to meet our goals.  

Avoid High Yield Seduction

Don’t be blindly seduced by high yield dividends. Safe, sustainable, and reasonable are the goals. Some high yield dividend stocks are risky. If the numbers don’t add up for the business or industry sector there is a chance the company will have to cut its dividend in the future. If that happens the market can sour on the company, causing the stock price to significantly drop too. Meaning we not only lose the high yield dividend we were chasing but also experience a loss in share value. 

Diversification

Keeping a diversified portfolio is still the goal. It’s ill advised to go all-in with a single dividend paying stock or even stocks within a single industry. The amount of dividend stocks we add to our portfolio should fit within the portfolio’s overall diversification strategy. One that’s aligned with our risk tolerance and goals. 

Buying Dividend Stocks

A Common Method of Dividend Investing is Buying an ETF 

Exchange Traded Funds are bought and sold like stocks. The single ETF contains many company stocks but is traded as one under its own stock trade symbol. They aggregate the various company dividend yields. Buying an ETF takes away all the required company stock analysis of dividend investing out of the equation as they are invested across entire indexes. 

Some high dividend yield ETFs emphasize holding large-cap equity stocks that are forecasted to have above-average dividend yields. They may have aggregated ETF dividend yields in the 3.3% range. Others provide a convenient way to track the performance of company stocks having a record of growing their dividends with ETF aggregated dividend yields around 1.85%. 

Seems simple enough. Go to any of a number of brokers who offer Dividend focused ETFs, select the index or type that meets your needs, and happily collect or reinvest your dividends. However, what we gain in convenience and possibly lower risk we lose in stock holding selection. That and the possibility of getting better stock appreciation and yields that better meet our individual goals if we had a more targeted investment approach. ETFs are a low cost but broadly spread out investment choice. Not that there’s anything wrong with that.

Buying and Owning Individual Dividend Paying Company Stocks
DIY Stock Purchases

If we’re able to do all of the company analysis ourselves, then picking individual dividend stocks to build our dividend investment portfolio is another option. This way we can concentrate on the companies and industries we believe have long term sustainable dividends and the business potential for possible stock and dividend growth. We could also craft a higher dividend yield portfolio.

Once decided on the companies, diversified investment strategy, and dividend yields that meet our goals, just open a brokerage account. Choose an online low cost brokerage like Ally Invest where each stock trade is a flat $4.95. These types of online brokerages allow for dividend reinvestment or distribution. But if planning smaller monthly deposits, take into consideration that low flat trade fee could add up if we’re constantly buying various stocks to build up our diversified dividend investment portfolio.

With this approach we will have to manage our portfolio ourselves. Looking for signs of future company dividend distress, business pressures that can affect stock value, etc. Also needed is yearly portfolio rebalancing* analysis and making any necessary trades to bring it in line with the overall diversification strategy.

CFP Managed Portfolio

Including a dividend investment strategy through a Certified Financial Planner (CFP) is another option. They can work with us on the company stock analysis and diversification strategy. There will be obvious CFP type fees to pay. Depending on our portfolio size those frees can range from 1% to 2% or more plus any brokerage trade fees. 

It does however mean that their knowledge and systems are in place to handle our rebalancing. They are also able to setup a dividend investment portfolio aligned with our goals and within our risk tolerance.

Online Robo Advisors Specializing In Dividend Investment Stock Ownership

There is a newer robo stock dividend investment option. Instead of our having to do all the important stock and sector analysis ourselves, they take care of that and offer dividend focused stock ownership. Rather than having a broad stroke index investing strategy as with ETFs, or paying a CFP’s high fees, they can build a dividend investment portfolio owning company stocks that is focused and tailored to our goals. Also one that’s within our risk tolerance, all without the higher CFP type fees. 

Like any stock investment, dividend investing has risks 

The rules of the investment universe are always with us. Even with complete and proper analysis, there’s no guarantee that investors will get the same results of a stock’s history, its expected returns, or dividend rate going forward. There’s no guarantee stock investors won’t lose money either. Investors should always consider the risks of any investment being made and remember the general rules of investing- Higher expected returns usually comes with expected higher risk. 

Having a diversified portfolio within the investor’s risk tolerance that’s aligned with their unique financial situation is always advised. That investment balance includes considering the allocation of both growth and value (dividend) stocks. 

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  •  1.Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
  • 2.Asset allocation and diversification do not guarantee a profit or protect against a loss in a declining market. They are methods used to help manage investment risk.
  • 3.Past performance is no guarantee of future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.
  • 4.Rebalancing/Reallocating can entail transaction costs and tax consequences that should be considered when determining a rebalancing/reallocation strategy.

 

6 Intriguing Home-Based Business Ideas For Retirees

Funding Retirement, Income Streams, Retirement Business, Working In Retirement,

 

Home-Based Business Ideas For Retirees

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Retiring doesn’t have to mean you stop working if you don’t want to. Keeping busy and challenging yourself is a great way to stay active, both mentally and physically. In fact, retiring is the perfect time to start a passion project, creating a business just because you want to do it — not because you have to. Here are some great ideas for you to start your own business, right in your very own home.

Get writing

A lot of budding writers say their least plentiful but most valuable resource is time. There’s just not enough hours in the day to work fulltime and write as well! But now you’re retired, you’ve got an abundance of time, and these days there are plenty of ways you can make money from writing.

For a start, you could start blogging. Writing regularly about something that interests you can be a great way to build up followers online who share your interest. Once you’ve amassed a following, you could place PPC, CPA or CPM ads to earn a little money on the side.

Or you could host sponsored content on your site from businesses related to your blog, charging a little each time. There’s lots of ways to make money blogging, so do a little research and see what’s on offer.

On the other side of blogging, there is the ever growing self-publishing and copy-editing industry. With a huge need for high-quality online content, you can help businesses with their content, or fulfil your dreams of becoming an author. The best self-published books tend to be in a popular sub-genre, don’t cost a lot of money, and come as a series. To establish yourself as a copy-editor, put some listings up on freelance sites, and collect client testimonials and ratings.

 

Start your own radio station

If you’re passionate about something but you don’t have the chops required to write regularly about it, why not start your own radio station? With the rise of the internet, you don’t need to have an aerial and sophisticated recording equipment anymore. Instead, all you basically need are an internet connection and a microphone!

There are plenty of affordable radio hosting services online that make it quick and easy to start broadcasting. Once you’ve gotten your name out there and built up a good listenership, you can start offering ad space to businesses from your field of interest.

Similarly, podcasting hosting is something that more and more people are embracing. It’s a pretty low-cost business idea, and if you can find a good topic to podcast about, it’s one that is likely to take off pretty quick as the popularity of podcasts continues to grow.

 

Become a professional coach

Throughout your career, you’ve probably accumulated a wealth of knowledge, skills, and wisdom. A lifetime of learning (and making a few mistakes along the way of course!) has given you a deep well of experience. But just because you’ve retired doesn’t mean it ends there. Why not share it with others and become a professional coach?

There are plenty of people out there who want to learn from you, to get firsthand advice that will help guide them in their career. Maybe you managed a successful business before you retired — that will have given you exactly the kind of hard-earned knowledge that young entrepreneurs could benefit from. Create an online profile that showcases your work history and start networking. You’ll find scores of people willing to learn from you!

 

Become a tutor

Instead of passing on your knowledge to people in the workplace, why not pass it onto people in school as well? Parents want their kids to do the best they can, and will happily pay for someone to give them extracurricular lessons outside of normal school hours if it gets them ahead.

You don’t necessarily need to have any qualifications to do this, you just need to be knowledgeable about something. It could be a hobby like playing an instrument or a sport, or you might have a passion for maths or history that you’ve nurtured over the years. Pass on your knowledge and passion to the next generation and help them grow because of it.

 

Start a second-hand store

After a lifetime of working hard and raising a family, you’ve no doubt accrued a trove of bits and bobs. Record players, furniture, collectibles, clothes — the ephemera of life can build up very quickly without you even realizing it. It might be tempting to just take them all down to the junkyard and get rid of them, but as the old saying goes: one man’s trash is another man’s treasure. So why not sell them online?

Now you’ve retired, you’ve got plenty of time to start going through your old things and finding what can be reused. Even if it’s broken, you might find it a nice little side project to fix it up too. Digital marketplaces like Amazon, Etsy, and eBay are easy to use, and with the entire internet at your fingertips, you’re bound to find someone willing to buy what you’re selling.

 

Turn your hobby into a business

Most of you reading this will have a hobby of some kind: gardening, playing an instrument, baking, photography, model-making, the list is endless. While it might have kept you busy in your leisure time before retiring, and even provided some comfort to you when you needed a distraction, you might never have imagined it could provide you with an income.

However, retirement is the perfect time to start making money out of that thing you enjoy doing most. For example, if you enjoy gardening, you could offer your services out to others, of course. Or you could create an ebook or video tutorials on gardening to share your knowledge with others. Almost every hobby can be monetized, you just need to find the right angle….

 

For some, retirement might be the perfect time to put your feet up and have a well-earned rest. But for others, it might be an even better time to really get busy. With so many business ideas out there that you can start today from your own home, why sit around twiddling your thumbs? Get thinking and start your business today!

**If you want to see more on starting a home business, check this out- How to Set Up a Small Business at Home. 

This is another informative post contributed to Leisure Freak by author Kayleigh Alexandra.

Kayleigh Alexandra is a content writer for Micro Startups — a site dedicated to giving through growth hacking. Visit the blog for your latest dose of startup, entrepreneur, and charity insights from top experts around the globe. Follow us on Twitter- getmicrostarted.

Income Streams: Tips for Successfully Renting out a Spare Room

Income Streams, Renting Out A Room, Retirement Business

If renting out a spare room or suite in your home is on your mind, you have lots of company. Many homeowners are looking for supplemental income in retirement or are saving for that milestone. Shared households are more common than most people realize. More than 22 million U.S. households fell into this category in 2012, meaning they included a primary resident and at least one other adult. Sharing is particularly popular with the younger crowd, 9.7 million of whom are between 25 and 34.


Income Streams: Tips for Successfully Renting out a Spare RoomPhoto by Kate Ausburn on Unsplash

Two Common Options

Homeowners can choose between two basic paths when it comes to renting out space. Some find hosting overnight or short-term guests through sites such as Airbnb. Hosts typically set a per-night price that includes essentials like clean linens. Their listings include photos and prices. Homeowners receive payment, minus a service fee, via electronic options and are able to message guests prior to arrival.

The second option is a long-term rental to one or more occupants, beginning a homeowner’s journey into real estate investment in a sense — or at least letting them dip their toes in to see if it’s something they’d enjoy. The homeowner rents space using a rental agreement that specifies the exact space, price, duration of occupancy, and any other important terms.

Regardless of which option is the better fit, a homeowner who becomes a landlord will need to manage the rental and maintain an arrangement that’s stress-free. Here are some important tips on how to do just that.

 

Understand Local Laws

One early have-to is being aware and keeping abreast of local laws related to rentals. Many locales have specific regulations on what they allow, the permits required, and occupancy taxes. Fines for non-compliance could be hefty. Communities typically restrict the number of occupants in a home. Some also require that each individual have a certain amount of square footage of space. If remodeling to rent is a consideration, it’s essential to check on rules regarding access to exits in case of an emergency. Sites such as Airbnb might offer guidance on requirements in major cities. However, a wise homeowner is one who regularly checks local regulations for updates.

 

Get Your Home Ready

Preparing to rent space requires making decisions to get a home ready. A major one is whether you’ll need to remodel or add one or more rooms. Homeowners with children typically have privacy concerns. The way to start is to go through each room and figure out what realistically needs to be done to make the property acceptable for a renter.

Getting ready might require updates such as a bathroom renovation. Ensuring the safety of possessions could require purchasing a fireproof safe. If kitchen privileges will be available, now is the time to replace that aging microwave.

 

Determine a Rental Rate

Sites like Craigslist are a good resource for learning about the local market. A homeowner should be sure to wrap into the rate the cost of home maintenance, utilities, and insurance.

For long-term rentals, some homeowners quote a weekly rent to make the rate more appealing.

 

Get Everything in Writing

Hosting sites take care of this in their terms and conditions. A landlord’s rental agreement should be written and signed by both parties. It should specify:

The dollar amount of the rent.
Date when rent is due.
How utility usage will be charged.
Usage specifics for common areas such as the kitchen and the laundry room.
Any special concerns such as cleaning or parking.
Talk to Your Insurance Agent.
Homeowner’s insurance might not cover injury of a renter on the premises or any losses from theft. An insurance agent can recommend the right policy.

 

Find the Right Renters

In addition to placing free ads on sites such as Craigslist, consider some fee-based sites. Many first-time landlords are surprised, however, at how well word of mouth sometimes works for finding renters. Great prior or present tenants are sometimes perfect sources to ask for suggestions of anyone they know looking for space to rent.

An interview and reference checks are the first step. A tenant credit check should follow.

 

Get a Grip on Taxes

Many would-be landlords don’t realize that rent might be subject to federal, state, and/or local income or other taxes. This applies whether the tenant pays directly or a hosting service collects it.

Landlords might also lose a property tax exemption. However, keeping accurate records can minimize taxes by documenting deductible rental expenses.



Wondering exactly how to get started with renting out your spare room? A local real estate professional can offer important tips on how to make the most of your experience as a landlord for short-term guests or long-term renters. An agent’s input is particularly valuable when considering whether to spend money on your home to create a suitable rental for meeting retirement goals.

 

This informative article was contributed to Leisure Freak by Preston Guyton.

Preston Guyton is a native of the Grand Strand and Broker in Charge/Managing Partner of CRG Companies.