Money Matters » Snowflakes

Ten Dollars a Day

debtfree — Thu, 03 Dec 2009 20:20:14 +0000

Ten dollars doesn’t seem like very much. If you’re like a lot of people, if you found ten dollars on the street it likely would be spent by the end of the day. If you lost ten dollars, it probably wouldn’t seem like a huge loss. If you spent ten dollars on something you didn’t really want or need, you probably wouldn’t feel it was overly extravagant. The problem, though, isn’t that ten dollars isn’t very much money. The problem is that ten dollars doesn’t seem like very much money. Actually, ten dollars can break you or make you, because over time ten dollars a day can add up to a lot of money.

Let’s say you’re like a lot of people, living paycheck to paycheck. You’re not racking up any bills, but you’re spending everything you earn – nothing is going into savings. Then, something or a combination of things happen and your living expenses go up by ten dollars a day. What happens? Unless you can increase your income to match or get the money from family or friends, you’ll probably have to put the extra spending on a credit card. Let’s assume the interest rate on the card is 17%. In just one month, that will bring your unpaid balance to $300, which will start adding around $4.50 in interest each month to your balance. If this continues for just 10 months, you could have an accumulated unpaid balance of about $3240, wich will generate about $45 in extra debt every month until you get it paid off. I know this can happen because I let it happen to me a long time ago. Spending ten dollars a day more than you make, over time, can easily break you.

Let’s look at it from the opposite side though. Let’s say you’re spending what you earn each month and you have $3240 in credit card debt. If you could figure out a way to cut your spending by ten dollars a day and apply that ten dollars to your credit card, you could have the debt paid off in about 11-1/2 months (it takes longer to pay it off than it did to accumulate it because the unpaid balance keeps racking up interest charges). So, while over spending ten dollars a day can get you into substantial debt very quickly, under spending by ten dollars a day can get you out of that debt almost as quickly.

If you have no debt, ten dollars a day goes back to not sounding like very much. Even saving for a month and having $300 to show for it may not sound like much. But think about it. If you did it every month for 10 months, you’d have over $3000 saved. Even if you only did it for one month, the $300 could be leveraged. For example, if you wanted to take a shot at making money by blogging, $300 would easily pay for a domain name and hosting for a year with enough left over to have a custom logo done for your web site. There are other part time businesses you could get into as well for $300 in startup costs.

The other thing about small amounts of money (snowflakes) is that over time they can snowBALL. It’s really easy to come up with a few ways to make ten dollars, but dificult to do it consistantly every day. Over time though it gets easier, and you eventually could find yourself making an extra ten dollars each and every day. What then, quit? I’d suggest start working on ways to make a second extra ten dollars a day. How far can you go with this? That’s up to you. The sooner you start though, the faster you’ll get there.

Selling Stuff on Ebay in Today’s Economy

debtfree — Mon, 08 Dec 2008 17:23:32 +0000

I’ve done pretty well on EBay over the last couple of years. I mostly sell items that have some collector value – models railroad items, vintage electronics, etc. In other words, stuff that probably wouldn’t sell if I was limiting my sales to a local market. The beauty of EBay, of course, is that you have a potential market of thousands, and it only takes a couple of them to decide they really want your item in order to get a good price. As recently as 6 weeks ago, I got $47 for a set of 5 magazines, $71 for a small model engine part, and $153 for a CDROM of obsolete computer software.

In the past month, though, I’ve started to notice a trend – less bidding and lower selling prices. I guess the econmomy is finally starting to affect sales on EBay. As a result, I’m changing the way I do business on EBay. Here is what I’m doing different:

Setting higher starting prices. Previously, I would just set my starting price at $0.99, both for the lower insertion fee and to encourage earlier and more plentiful bidding. Buyers were prevalent, and the price would soon go up to “market value” or higher. Lately though, many items might only get 1 or 2 bids. Setting the minimum price to $0.99 could very well result in the item selling for that price. Now, I set my starting price to the minimum I am willing to sell the item for. I figure the higher insertion fee into my price. It may discourage bidding, but at least I don’t get low-balled.
Maximize visibility. I’m not talking about the extra cost options that EBay offers, but making it easier for buyers to find and bid on my items. Previously, I did both 5 and 7 day listings, not worrying too much about what day the auction ended, or what time. Now, I list all my auction items for 7 days, and make sure they end on a Saturday or Sunday. This gives potential buyers more time to notice my items. I also make sure my auctions end between 1:00 and 5:00 pm. This makes it more likely buyers will have time to get in a last minute bid and not be busy doing something else.
Being more consistent. EBay has always been sort of a haphazard affair for me. I’d need some extra money, I’d look through my stuff to find a couple things I didn’t want or need any more, and just like magic, I’d have an extra $200 or so. Since I can no longer depend on a few desirable items selling at a high price, I’m relying more on less expensive, “bread and butter” items. It takes more work to generate a certain level of revenue this way, but the upside is that I’m getting rid of a lot more stuff than I otherwise would. I try to consistently prepare 3 items per day to list. I photograph the items and write descriptions throughout the week, then list them on Saturday or Sunday.
Pulling items with no bids. One thing I’ve noticed is that some items attract a lot of watchers but no bids. Before, I would just let the auction run its course, counting on late bidders to drive the price up. Now, it’s more likely that a single bidder will get the item for your starting bid. Even when following New Rule #1 above, sometimes I feel an item has better potential than my minimum acceptable price. In such instances, I will pull the auction early if I’m within 30 hours of ending time and the item has no bids. If the item does have a bid, you are ethically bound to sell, even if you’re not happy with the price.

I still think EBay is still a good way to make money, but the old ways of doing business don’t work as well any more. The changes I have made have helped me keep my income level consistent. If you sell stuff on EBay, I hope you find these suggestions useful.

Cheers,

Ken

A $100 Hour – Cleaning Out Your Space

debtfree — Tue, 18 Nov 2008 20:56:21 +0000

Do you have a hobby? If so, chances are that you have accumulated lots of stuff related to your hobby over the years. How much stuff do you have? If you’re like me, maybe quite a lot. How much of it do you think you don’t need? If you’re like me, maybe you think you still need all of it. I’m a pack rat, and I hate getting rid of stuff I’ve accumulated. However, if you go through your hobby stuff, you may just find that you can in fact find some stuff you’d be willing to part with after all. As it turns out, parting with this stuff can bring in a good amount of cash – $100 or more is easy, depending on your hobby.

For example, one of my hobbies is model railroading. I tend to only buy things I like, so I only get rid of things if I can convince myself I’m never going to use them. Last week I found a brass locomotive part – we’re talking a small piece of cast brass about 1/2 x 3 inches – and managed to sell it on EBay for $71. I’ll admit I was shocked by how much it went for went for. A few other train items I sold the same week easily put me over $100 even after paying the EBay and Paypal fees.

I suppose it could be argued that this isn’t really income, because it doesn’t take into account what I spent on the stuff originally. I disagree. The money spent is money that is long gone, forgotten about, income from an earlier period in my life. The $100 or so in my bank account sure looks like extra income for the month.

What are your hobbies and interests? Look around and see what you have. You just might be surprised at how much stuff you can get rid of, and how much money it might bring in. I’m not talking about monetizing your hobby – that will be a topic for another post – just getting rid of hobby items you no longer have a use for.

Cheers,

Ken

A $100 Hour – Sell Vegetables at a Farmer’s Market

debtfree — Mon, 29 Sep 2008 15:24:47 +0000

Yesterday I was talking with a friend who likes to garden. He grows a lot more than he can use himself, so he gives some away and sells the rest at the local Farmer’s Market. I’d always known about this, but I never realized how much money he makes. It turns out he net a substantial amount each year – over $2000 in fact. Since he would be gardening anyway, this is essentially free money.

Of course, it’s a little late to get started this year since the growing season is just about over, but it’s a great time to start planning for next year. According to my friend, the best selling items are cherry and “heirloom” tomatoes, garlic, blackberries, and various herbs (he puts the herbs in little arrangements in small vases). My friend has a huge garden each year, but just about anyone has room to grow cherry tomatoes or herbs. I’m planning on growing some in containers on my patio. I think it’s a good combination – fresh organic vegetables and some extra spending money as well.

Cheers,

Ken

A Working Vacation

debtfree — Fri, 26 Sep 2008 00:20:42 +0000

Starting next Thursday, I’m taking vacation through October 5th. Eleven whole days of nothing to do. Except for spending 3 days in paradise, I hope to get a lot of stuff done, so it’s really going to be a “Personal Finance” vacation. I hope to accomplish several things:

The Wisdom Journal has a great list of 50 frugal things people should be doing. Although I have done some of the things on his list, I’d like to work through and finish all of them that apply to me.
I need to clean out my garage and dump a lot of stuff on EBay.
I have another web site that needs a lot of update work done and an Amazon A Store added.
I want to spend time doing research for an article on tithing I want to write.
I hope to net $50 every day during my time away from work.

I have a real problem with time management and self motivation, so this is kind of a test for me. If things work out (or not) at my job, I may be “Joyfully Jobless” next July, so I’m starting to look for alternative sources of income now.

Cheers,

Ken

A $100 Hour – Recycle Aluminum Cans

debtfree — Mon, 22 Sep 2008 18:45:14 +0000

Isn’t that what homeless people do? Isn’t it a waste of time? Isn’t the money you can get from recycling cans minuscule? No, I haven’t lost my mind. Recycling aluminum cans is, in fact, a viable way to make $100 or more in a relatively short period of time. How do I know this? When my in-laws lived with us, they recycled cans, and I took then to the recycling center for them. The last time I went, they had 231 lbs of cans, which netted them $115.50. Of course, it can take a long time to collect this many cans if you get them by walking down a lonely stretch of highway picking up peoples’ throw aways. Fortunately, there are better (and safer) alternatives.
My in-laws collected most of their cans on “recycling days.” Every other week, the local disposal company collects aluminum cans and other recyclables that are put in special containers and left curb side. On these days, they walked the neighborhood collecting the cans (They had had previously asked permission from the home owners to do this, which is probably a good idea. Most people don’t like strangers poking around in their trash early in the morning).
Another place they picked up quite a few cans was at a local park. During the summer, many people use the park for wedding receptions, company picnics, etc. After these events, the trash cans would have many aluminum cans (along with the trash of course). After getting permission from park personnel, they would collect these cans – making sure not to make a mess while sorting out the cans.
Other possibilities could include putting a can collection basket in a break area at work, asking friends and relatives to save cans for you, and even wandering a stretch of highway.
How much can you make (and how soon)? I turned in cans for my in-laws every other month (8 weeks). While $115.50 was the most they made in an 8 week period, the average was about $90, and they never made less than $70 – not bad for a few hours of work each week.

Cheers,
Ken

The $100 Hour

debtfree — Mon, 15 Sep 2008 21:25:56 +0000

One of the best ideas I’ve found while reading Making A Living Without A Job is “The $100 Hour.” Basically, you make a pact with yourself to set aside time every day (if possible) or at scheduled intervals and dedicate it to finding an idea that will net you $100. You don’t need to implement the idea in an hour, just come up with it.
The idea is beautiful in both scope and simplicity. If you are just getting started on the road to financial independence, having a few small successes can have a really positive effect not on just your self confidence, but on your cash flow as well.
So what qualifies as a $100 idea? The author gives 18 starter ideas in the book. I would say that in order to qualify as a “good” idea, it should at least meet most of the following criterea:

The $100 should come fairly quickly, like within 12 weeks. This means saving 10 cents a day, every day for 3 years, although it will net you over $100, probably doesn’t qualify as a “good” idea.
Not take an inordinate amount of time or cause undue disruption to your life. Doing consulting work at $25 per hour or more could probably be considered a good idea. Any work at minimum wage or less, probably not.
Requires little or no money to implement. We’re talking cash generation here, not investing or building a business.
(Relatively) risk free. No day trading.
It should be legal. Getting caught doing illegal things might allow you to have a free place to stay (with meals!) for awhile, but doesn’t do anything to help you eliminate debt or build wealth.

How easy is it to come up with ideas? The author gives you 18 to get started with, so even if you can’t think of anything on your own you have a place to start. I was able to come up with 5 ideas of my own in the time it took me to read this section of the book. Yesterday before church I sat down with a notebook to seriously brain storm this and came up with a list of 70 more, and I am not exactly a model of creativity. I’ll be presenting them here over the next few months. In the mean time, time to start implementing them. If you see one you like, feel free to use it yourself and let me know how it goes.

Cheers,
Ken

Divide and Conquer Your Way to $10,000

debtfree — Fri, 12 Sep 2008 22:00:51 +0000

I’ve been reading about the importance of having a definite goal, so I decided that my goal this year is to earn $10,000 over and above my salary, by the end of this year. I don’t know about you, but to me that is a lot of money to come up with in a little less than 4 months. In fact, if I spent the next 4 months thinking about a way to make $10,000 I would probably fail. In fact, I would probably not be able to come up with a way to make $1,000.

Breaking it down, though, makes the task seem a lot easier. 10,000 is really just 100 times 100, and I can think of at least several ways to earn $100 – maybe not 100 ways right now, but at least enough to get me started. In fact, last week I sold 9 items on EBay and netted over $200. That isn’t sustainable forever, but I estimate that I have at least $800 worth of stuff left to sell.

Another book I’ve been reading, Making A Living Without A Job, talks about “The $100 Hour.” The idea is to set aside 1 hour each day to come up with an idea that will net you $100. EBay is one easy way to net $100, and the book gives 18 more ideas. I tried this today, and came up with at least 5 ideas – some of which will be sustainable over a long period of time.

Will I be successful in my quest for $10,000 in just 110 days? Time will tell, but I know for sure that earning $100 a hundred times will be a lot easier than earning $10,000 once.

Cheers,

Ken

5 Reasons Garage Sales Don’t Thrill Me

debtfree — Thu, 04 Sep 2008 17:41:40 +0000

Many people enjoy holding garage sales, and why not? You get to spend time outside, you can get rid of a lot of clutter, and you can generate a little spending cash. Some people enjoy them so much that they become serial Garage Salers. When I was growing up, the neighbors across the street would shop garage sales for 3 or 4 weeks, then use all the stuff the bought to hold their own. They had at least 5 or 6 garage sales every year.
There are some good tips to follow if you want to run a successful garage sale, and if you’re just doing it for fun, I guess it’s not a bad way to spend a Saturday. However, from the stand points of getting rid of clutter and earning some money, I don’t think a garage sale is a good investment of time. Here are 5 reasons why I think garage sales aren’t really all they’re cracked up to be:

Your market is limited. Every city is different, but where I live, getting 50 – 80 visitors to your garage sale is having a really good day. If you’re hoping to sell all your stuff, that is not a lot of customers, unless you’re selling really cheap or it’s all really desirable stuff.
You don’t have much control over the process. When you do a garage sale, one of the first things you’ll notice is that some people will show up early. Not just a little early, but 5:30 AM early – even if your add specifically states “No Sales Before 8:00 AM” or something like that. I guess you cant blame them, they just want to get first crack at any bargains, but is the extra hassle worth it to you? After the sale, you’ll probably get people coming by late, looking to score something extra cheap that didn’t sell during the advertised sale time. I’ve even had people come knocking on my door on a Sunday morning when the add explicitly stated Saturday Only.
They tie up a lot of your time. I value my time at $20.00 per hour, so for a 5 hour garage sale I’d have to net $100.00 to make it worth my while. If I count the time sorting, pricing, setting up, and cleaning up afterwards, $200.00 is probably more like it, and it’s not likely that I’ll net that much.
Buyers are looking for bargains, not value. Besides having a limited market, most of the customers you do get will be looking for fantastic bargains, not looking to pay a fair price for fair value. For example, an RC airplane that may be worth $50.00 might only sell for $20.00 or less at a garage sale. A lot of stuff just won’t sell at all unless you’re practically giving it away.
They put you at risk of being a crime victim. I hadn’t thought thought of this before, but one of the commentators on the garage sale tips relates an interesting story. The risk might seem small, but by having a garage sale, you’re giving every interested burglar in your area the perfect opportunity to “case” your house.

So are garage sales a waste of time and energy? It depends on you. If you enjoy the social aspects, then holding a garage sale might be worth the time and effort. If you are looking to get rid of a lot of junk and maximize the money you get for it, you might be more satisfied with other alternatives such as Craig’s List or sell it on EBay. As for myself, I can think of ways to spend 5 hours on a Saturday that are a lot more enjoyable and profitable than hosting a garage sale.