Tailor your circumstances to your strategy. Sounds a bit backwards, doesn't it? Most of the time, we take the path of least resistance and tailor our strategy to our circumstances. And that can certainly work if all your finances need is some minor tweaking. But if you have a large goal in mind or you need to address debt, you may need a different approach.
Prioritizing circumstances and strategies
Defining the life you want to lead entails setting the balance between your current circumstances and which strategies you'll employ to reach your future goals. If you look at your circumstances as being fixed, you may have to accept a certain strategy that's available or suits your current situation. You tailor your strategy to suit your circumstances. But if you're willing to change your circumstances, then you may open yourself up to employing a different set of strategies -- and this may help you reach your goal faster.
I'm certainly not saying that tailoring your strategy to your circumstances is easy. After all, one of the basics of personal finance is inspired by this mindset: Spend less than you earn.
Who doesn't want a little extra money each month? The best side jobs or "side hustles" are popular ways to earn cash quickly, but it's also a fact of everyday life for many Americans now. According to the most recent data from the Bureau of Labor Statistics, 6.1 million U.S. workers are "involuntary part-time workers" or those who would prefer full-time employment but can't because their hours have been cut or they can't find full-time employment.
To find the best side jobs you need to be armed with enough information to avoid scams but also a sense of whether its a match for your particular skills and situation. For example, if you have small children and care is either unavailable or prohibitively expensive, things you can do from home in the off hours (nap-time, evening) is essential. To help, we've researched gigs that offer flexible hours, a reasonably simple way to get started, and what appears to be a fair wage. Our methodology is a subjective look into the benefits of each side job using the three factors we deemed most important:
Once upon a time, I decided it was high time I sell some of my stuff on eBay to make some extra cash. Since it was just after the holidays, I decided to get the ball rolling with a new shirt I had just received for Christmas.
Even though it was cute, the shirt fit a little small for my taste. And even worse, the store it was purchased from was out of state, which meant no returns. So, after taking some pictures and crafting a snazzy description, onto eBay it went. Priced at $6, the shirt sold right away.
Off to a Good Start, Until...
Unfortunately, the buyer later wrote to say the shirt had a hole in it and demanded a refund. I asked for a picture and, when they wouldn't produce one, denied their request for their money back.
You've heard it before, many times probably: Investing in yourself is the best investment you can make. Really? How do we know that's true?
Google the term "investing in yourself" and you'll find numerous references to things like explore your creative side, nurture your mind and body, sleep and relax, say no to others, do things you love. You get the picture. The term is commonly used as a metaphor for self-improvement, and that's fine. But since Get Rich Slowly is a site about money, we should attempt to bring a more precise understanding of terminology like "investing" to the table. Maybe we should explore what "investing in yourself" actually looks like, from a financial point of view to better understand when it would be a wise move.
What is an investment?
People who know a little about accounting understand that, when you spend money, it can be classified as an expense (gone forever) or an asset/investment (around for a long time). To qualify as an investment, dollars spent must have three attributes:
What do you do when you want to pay off your debt but you calculate it will take 25 years to do so on your current income?
Well, if you're Adrienne Dorison, you start a side business and start shoveling yourself out of debt faster!
Another reason to get out of debt
Before her income grew, though, she still had a large student loan when she started dating The One. She explains that he was a Dave Ramsey fan and, consequently, good with money. The thought of bringing debt into their marriage (now that they're engaged!) embarrassed her.
So you're thinking to start a side gig. Congratulations! Whether you are trying to pay off debt or just trying to fully fund your savings account, a side gig can help you reach your financial goals.
But be aware: There is a grain of truth to the old adage, "You have to spend money to make money." Exactly how much money are we talking?
The cost of starting a side gig depends on several factors, so let's explore some of the costs you are likely to encounter regardless of your new business focus.
If you have the opportunity to go into business for yourself, I would recommend you do it. It's an experience marked by creativity, ingenuity, and extreme growth. It is one of the most challenging, exciting, rewarding, creative, and scary things you can do in life. At least that was my experience.
If you've never started your own company, your perspective might be colored by some of the romantic notions people have about what it's like. They latch onto the benefits like:
- You can call the shots as to when and where you work.
- You won't have to work for The Man.
- You can pursue your passion.
If you have done it, your perspective might be, shall we say, more precise. For example, I used to describe the freedom over your hours by saying… Continue reading...
When will you declare your independence? Your financial independence, that is.
What is financial independence?
Ah, financial independence -- the freedom to work only if and when you want to (because you no longer need the paycheck you earn from your job).
Even typing the word "freedom" makes me sit up a little straighter.
(Since April is Financial Literacy Month, a number of articles will be devoted to more educational topics. This is Part II in a four-part series about how understanding economic cycles could inform your financial decisions. Part I is Understanding economic cycles: An introduction. Part III is The fall and winter seasons of the economic cycle. Part IV is How to profit from economic cycles.)
In Part I of this series, the introductory post about economic cycles, we discussed the fact that the economy, while growing over the long term, moves in up-and-down cycles and that each cycle can be broken down into four phases that mirror the four seasons of nature. In this section, we will explore what we identified as the spring and summer seasons of the economic cycle by considering two fictional crop farmers (Farmer Fred and Farmer Claude) whose livelihoods depend on how well they manage their work each season.
Farmer Fred is a successful farmer; but his neighbor, Claude, less so. (We'll just call him Farmer Clod.) But let's dive into the seasons and see what each does that causes them to be successful or not. Nature programs always begin with the newness of spring, so why don't we start there?
Speaking about building wealth, J.D. Roth felt that he could never make this point emphatically enough: "Frugality is important, but if you want to make real progress, increase your income." It's in this context that being able to ace an interview becomes a very important skill. And certainly part of the interview process should include your asking questions of a prospective employer to make sure that the job and the company are right for you.
If you are early in your career, though, it is natural to approach a job interview as if it's a test that you might or might not pass. But this perspective could lead to some undesirable results:
- Firstly (and ironically), it may prevent you from highlighting your strengths.
- Secondly, it may keep you from finding out the things that you need to know in order to properly consider a job offer if they do want to hire you.
Here are three more ways having a test mentality can affect how you conduct your interview and some strategies for how to avoid potential missteps.