What’s Your Destination? – How To Plan For Success

What’s Your Destination? - How To Plan For Success

Some people wait for the future to happen. Others create their futures. The former depend on the luck of the draw while the latter cut their own deal.

How do you create your own future? By forming a vision and expressing it through a mission statement. Your dream now glitters on the horizon of the future. But you are standing in the reality of the here and now. How do you close the distance? You can’t dream your way into the future. You must have a plan. You have to know where you want to go and decide how you’re going to get there. The important word is „how.” The word „if” won’t take you there. You must approach your future with a sense of certainty that your dream is achievable.

Hannibal, the great general from ancient Carthage, once asserted: „We will either find a way, or make one.” Be like Hannibal.¨A plan will establish a route to your destination. It will prevent you from drifting aimlessly through life. A good plan will have these characteristics:

  • It will specify actions. By deciding what actions you will take to bring your vision to reality, you take control of events instead of responding to them.
  • It will set a timetable. Without a specific timetable, your plan loses cohesion and never gains momentum. Nothing gets accomplished „sooner or later.” It gets accomplished at a specific time and specific place.
  • It will be flexible. You can’t anticipate every event and circumstance that might have an impact on your future, but you can allow for contingencies.

You formed your vision in the creative right side of your brain. To create a workable plan, you need to bring the logical left side of the brain into the picture. Use your left brain to pass ultimate judgment on the ideas you’ve generated, to set priorities, and to devise workable action plans.

You begin the planning process by revisiting your vision and reviewing your mission statement. Assess your present circumstances and measure the gap between where you are and where you want to be. Then follow these steps:

  • Set goals.
  • Set priorities.
  • Develop strategies.

Your present circumstances establish a starting point, but they don’t determine your destination. Where you are very quickly becomes where you’ve been. So keep your eyes focused on the future and where you want to go, instead of on the past and where you’ve been.¨Have a good trip.

6 Easy Ways to Make $1,000 This Weekend

6 Easy Ways to Make $1,000 This Weekend

Forget those „make money fast” spam emails. Whether it’s for shoes or savings, here are the simple and real ways to score extra cash.

When I told my husband last summer that I wanted to throw a big weekend yard sale, he took in the news with his usual stoic resolve. He’s seen my cockamamy moneymaking schemes before: the eBay store that quickly fizzled, the „resellable” cupcake stands from our wedding that are still moldering in the garage, previous yard sales where I mostly chatted with neighbors before lugging our stuff back inside. Expectations were not high. So this time, I really worked it. I advertised ahead of time on Craigslist and in local papers, put a sign in my yard days ahead, and prepriced everything so people wouldn’t have to ask. We made $700 in two days.

“Done right, yard sales can bring in good money,” says Chris Heiska, founder of the website yardsalequeen.com, where I gleaned many of my tips. Another yard-saler, Carrie Grindle, a mom in Oregon, OH, regularly clears $500 a day at her sales. Her strategy: Any time one of her kids outgrows a piece of clothing or tires of a toy, she prices it before tossing it in a box to await the next sale.

“Everyone needs a side hustle,” says Jason White, who started the personal finance blog frugaldad.com as a hobby that now brings in cash from ads. „In this economy, it’s risky to depend on one source of income. And for most of us, it’s the best way to pay down debt.” The secret, White says, „is to cultivate a business around something you’re already good at.” Learn from these five smart-cookie readers, who found ways to make bank without a lot of extra time.

Tonya Bice, 38, Geneva, IL


When Tonya, a former stock trader turned stay-at-home mom of four, saw a glorious wreath at Pottery Barn eight years ago, she was bummed that it was out of her price range. „I decided if I couldn’t buy it, I’d learn how to make it ” she says. Now the craft project is her full-fledged business, Twoinspireyou, which she started two years ago when she joined etsy.com, the online marketplace for handmade goods. „I had done craft shows before, but I wasn’t great at pitching the products in person,” she says. „Etsy really catapulted me to the next level. Thousands of people saw my work, and it spoke for itself.” During one of her biggest weekends, Tonya made $1,831 after offering repeat customers free shipping. For newbies looking to cash in, Danielle Maveal, Etsy’s manager of seller education, suggests joining one of the site’s „sale teams,” where like-minded crafters can connect online to get advice from successful designers. „They’ll offer tips, such as how to tag your product so it pops up more often when people search on the site. It’s all about making it easier for shoppers to find you. Once they do, it’s like sparks flying.”

Susan Jumonville, 42, Syracuse, UT


When Susan heard from a neighbor that Once Upon a Child, a child-oriented consignment chain, was opening up in her town, she decided it was time to sell all her daughter’s outgrown but carefully stored clothing and toys. Over three days, she dropped off five SUV-filling loads. Susan credits her success to the state of her goods. „Take the time to wash and iron old clothes,” she suggests. „They should look like things you’d buy yourself.” Susan was surprised when the store rejected brand-name items by Ralph Lauren and Laura Ashley, only to accept stuff from Target But according to longtime consignment-shop owner Kate Holmes, whose site, howtoconsign.com, offers tips for resalers, „Store owners know their customers and what sells.” So before you lug bags and bags of stuff to your neighborhood thrift shop, stop in to see what the place usually stocks, and edit your giveaways to meet their needs.

Nanette Torres-De León, 33, Guaynabo, Puerto Rico


Nanette first heard about Pure Romance when a friend invited her to one of the company’s Tupperware-style sex-toy parties at the end of 2009. „I immediately knew this was something I wanted to do. As a rep, you have to be confident in yourself and manage people’s inhibitions toward sex. When I talk to a customer, I try to figure out what this person needs but is too mortified to admit,” says Nanette, who works as an actuarial analyst during the week. Her initial box of supplies arrived in January 2010, and over the course of several parties she hosted the weekend before Valentine’s Day, she pocketed $1,300. (Pure Romance spokesperson Genine Fallon says reps usually take home between 30 and 60 percent of their sales.) „It’s never just about making a sale,” says Nanette, who keeps meticulous notes on her customers, including their birthdays and anniversaries. „I call them up and say, ‚Congratulations!’ and they always end up asking, ‚Got anything new?’” If you’re turning red just reading this, visit the Direct Selling Association at directselling411.com for loads of much tamer goods — from cosmetics to kitchenware — that you can sell simply by having a party.

Crystal Senter Brown, 36, Chicopee, MA


Crystal, who works for the American Cancer Society during the week, decided to become the marrying kind 10 years ago, when, as a Baptist marrying a Jehovah’s Witness, she had trouble finding a justice of the peace, or JP, to perform her own wedding. „It was harder than I expected to find someone who would honor both of our beliefs,” she says. So afterward she applied for a JP license, which cost $75 and required six letters of recommendation. States need only so many JPs, but Crystal lucked out because a JP in her town was retiring, and local officials accepted her application to take his spot. To date, she’s officiated at nearly 300 weddings, at roughly $150 a pop, including one couple who asked her to climb a mountain with them so they could get hitched at its peak. Brown’s best weekend of back-to-back weddings brought in $600. She’s also built a relationship with a wedding venue in her town, and now, she says, „I’m booked solid for the next five months.”

Christina Auer, 47, Lake Worth, FL


It’s the mother of all big-fish stories: In 2008, a friend of Christina’s told her about a new and different fantasy sports league, FLW Fantasy Fishing, in which participants guess the winners of 10 weekend fishing tournaments over a season. It’s free to enter, and the prizes, paid by sponsors, are big and plentiful: from $100,000 for winning the whole thing down to a $10 Walmart gift card for 50th place. Christina and her husband, leisure-time anglers who often took their then-13-year-old twin boys fishing, decided to try it. „My husband got into studying the players and looking up their stats. He was online for hours,” says Christina, a makeup artist by day. „I came in third in a tournament without doing any real research! One guy was competing on his home lake and had come in third the year before. I figured he’d really want to win this time, so I picked him to come in first.” The lucky guess netted her $1,500. Christina admits it was a fluke, but adds, „Anybody can do this, so just have fun with it.”

10 Things Rich People Know That You Don’t

10 Things Rich People Know That You Don’t

As a financial adviser, I have occasionally found myself feeling envious of certain clients. Not because of their wealth — but because they were disciplined and determined enough to do all the right things that enabled them to accumulate their wealth and, in many cases, retire early. Despite my expertise, I, like a lot of people, sometimes struggle not to do the wrong things that make being rich, let alone retiring at all, a pipe dream.

Financially responsible and successful people don’t build their wealth by accident — or overnight. Becoming rich takes serious willpower and long-term vision. You have to be able to keep your eye on the prize of financial freedom, be willing to sacrifice your present wants for the sake of your future and develop good habits to win. Here are 10 habits you can start putting into practice now.

As the old saying goes: The early bird catches the worm…or, in this case, gets to retire in style. The sooner you put your money to work, the more time it has to grow. Earning a paycheck, whether you are self-employed or work for a company, means the opportunity to contribute to an IRA, which you should seize ASAP. If you’re fortunate enough to get a job with a company that offers a matching contribution to their retirement plan, you need to make it a priority to enroll in the plan as soon as you are eligible. It can be the difference between retiring early and never retiring.

Think about this: If you invested $10,000 and left it to grow for 40 years, assuming an average return per year of 8%, you would end up with over $217,000. But if you waited 10 years and invested $20,000 — twice as much — you would only end up with just over $200,000.

Whatever your situation might be, saving and investing money today is better than waiting until tomorrow. Start now.


You can be your own worst enemy when it comes to financial success. It’s all too easy to procrastinate and neglect what needs to be done and, meanwhile, give in to temptation and spend more than you should. It’s the perfect recipe for not becoming rich.

The best way to protect yourself from yourself is to automate your savings. That means setting up recurring transfers on a regular basis from your checking account to your savings and investment accounts (or setting up auto deduction from your paycheck to your employer-sponsored retirement plan). This way, you force yourself to avoid bad money habits and save what you would likely otherwise spend. If you haven’t already, set aside 15 minutes on your calendar now to do it. Not later, now. Your rich future self will thank you.

Maximize contributions

When it comes to retirement account contributions, you’ve probably been told to start small and then try to increase the amount by at least 1% every year until you max out. If you’ve been procrastinating, then yes, even a small starting contribution is better than none. The problem is that small efforts can lead to small results. If you want to be rich, you have to save like you mean it. And that means contributing the max amount allowed from the get-go (and at least as much as your employer will match in your 401(k) plan).

This is especially true if you are starting to save later in life and need to play catch up. You might worry that maxing out your contributions will squeeze your cash flow too tightly, but it is easier to get in the habit of spending less if you don’t have that extra to money to spend in the first place. It’s much harder to increasingly scale back your budget year after year to accommodate for increasing contributions.

Never carry credit card balances

Revolving, high-interest debt is one of the biggest threats to your financial freedom. It can seriously drag you down, costing you thousands in unnecessary fees and interest charges — and prevent you from saving more. If you ever want to be rich, you have to ditch the bad habit of carrying credit card balances, along with the minimum payment mentality.

Instead, you need to learn how to use credit wisely, rather than as a crutch, and commit to paying off your balances in full each month. Smart credit card holders know and practice the tricks to maximize rewards, points, discounts and monthly cash flow without getting in over their head. Of course, living within your means is key to your success.

Live like you’re poor

Have you ever met someone who is unassuming and modest and then were surprised to later learn that they are actually rolling in dough? I had an older client who was stuck in 1983: he wore ugly brown suits and running shoes, drove a beat-up baby blue Volvo station wagon and lived in the same modest house he bought 40 years ago. Turns out, this man was an uber-successful entrepreneur and multimillionaire — and even richer because of his humble habits.

Millionaires are all around us, and many of them are probably not who you would think. This is because they smartly live below their means and save their money rather than showcase it. Of course, it’s easy to live below your means when you have millions, but even if you have far less, getting into the habit of spending minimally now will help you have a lot more later. The trick is adopting a “less is more” mentality and sticking with it, even when your income and net worth increase in the future.

Avoid temptation

The temptation to live large and beyond our means is all around us: TV, magazines, friends, family, colleagues, “the Joneses.” It is nearly impossible to escape the pressure to spend, spend and then spend some more. The problem is that overspending often leads to debt accumulation, undersaving and long-term financial insecurity.

Force yourself to avoid negative financial influences as much as possible. That means going cold turkey: Avoid malls, unsubscribe from all those retail emails and don’t sign up for new ones and say “no” to invitations that you know will cost you.

Then, replace these temptations with things that motivate you.

Be goal-oriented

Have you hit a snag with your office mentor?

Young employees sometimes hit snags in their relationships with their office mentors but there are ways to salvage the relationship.

Goals inspire us, motivate us and give us purpose. Many of us have common goals, such as paying off debt, buying a house and retiring by a certain age. Maybe you have another goal of starting your own business or buying a second home. Unfortunately, goals are easily overshadowed by the daily stresses of life and all too often forgotten and neglected. When goals are just fleeting thoughts in your mind, they lose their meaning and influence over your behavior. This leads to bad financial habits, and your dream of becoming rich stays just that — a dream.

To make it a reality, stay focused on your goals by committing the time to think about them, prioritize them and assign a target saving amount to each of them if possible. Then you should display your goals in places where you can be reminded on a regular basis, which will keep you accountable and help you stay on track.

Get educated

Successful investors take the time to study key financial concepts, learn the dos and don’ts and stay abreast of current trends. They take advantage of opportunities to strengthen and expand their understanding and expose themselves to financial information on a daily basis. Take a cue from them and subscribe to The Wall Street Journal NWS, +0.00%  , watch CNBC CMCSA, +1.51%  , pick up Fortune TIME, +1.87%  instead of a gossip magazine and follow financial experts on Twitter TWTR, -0.43%  . Become a devoted student of money, and you can master the science of getting rich.

Be careful not to overwhelm yourself, and only follow advice from credible sources, so you don’t fall victim to progress paralysis or unsuitable and potentially dangerous investments.

Diversify your portfolio

Successful investors also know not to put all of their money eggs in one basket—or two baskets, for that matter. They spread their wealth across a variety of investments, from stocks, mutual funds, ETFs and bonds, to real estate, collectibles and startups. A diversified portfolio means that you can potentially take advantage of multiple sources of growth and protect yourself from financial ruin if one of your investments bombs.

An easy way to achieve diversification is to invest in an asset-allocation fund, such as a target-date fund or “life strategy” fund that is based on your risk tolerance. And if you don’t have the means to buy property outright, you can explore investing in real estate mutual funds, ETFs or investment trusts (REITs), which can even offer steady income in some cases. Learn more about crowdfunding, which now gives the average investor the ability to support startup companies. Just be careful not to concentrate your money too heavily in any one investment.

Spend money to make money

Warren Buffett

It’s true that there’s a price to pay for wealth, but unless you’re Warren Buffett, it is not gambling — and losing — on stock picking. Impulse, naiveté, and emotions, particularly greed and fear, can seriously hinder your chances of being rich if you let them. The best way to protect yourself and get a step up on your financial goals is to first invest in a team of financial professionals. This means hiring a qualified and experienced financial adviser, accountant and in complex cases, an estate planner. Yes, working with pros will cost you, and you can still do some DIY investing, but their objectivity, expertise, personalized guidance and ongoing monitoring can be well worth it (and relieve you of the huge burden of figuring it all out on your own).

Make sure that you interview several candidates so you can find pros you trust, feel comfortable with and whose approach is a good fit for your situation. And even if you work with an adviser, make sure that you’re still involved and aware of where your money is going — and why.

The Boring Secret to Getting Rich

The Boring Secret to Getting Rich

It’s boring, but that doesn’t mean it’s easy.

The media likes to paint a certain picture of what it means to be rich — huge mansions, expensive cars, high-powered Wall Street or tech-startup-type jobs. If you buy into that image, being rich may feel like an impossible dream.

But the truth is that most “rich” people live very normal lives. You probably wouldn’t even know they were rich if you saw them because they don’t fit the stereotype. Most rich people are a lot like you and me. They just know a secret that, while incredibly effective, isn’t very sexy.

The secret to getting rich

The secret to getting rich is as powerful as it is unexciting: live below your means.

That’s it. The bigger the difference between what you earn and what you spend, the sooner you’ll find yourself with enough money to do what you want with your life.

Now, I realize that “live below your means” may sound obvious or trite. That doesn’t make it easy. It’s actually much harder than it sounds. Many of the people you see with big houses and fancy cars are up to their eyeballs in debt, which means they’re violating this basic principle. They aren’t rich at all. They’re in debt.

The challenge is recognizing that you can’t amass real wealth if you try to keep up with such people. Real wealth comes from spending less than you earn, again and again, month after month, year after year. It’s a slow and steady process. It isn’t particularly exciting. But it is the surest way to reach your biggest financial goals.

Practical ways to live below your means

So if the key is living below your means, does that mean holding onto your ratty old futon from college rather than buying a comfy couch? That kind of thing is certainly an option. But here are some more practical steps to could consider:

Ditch your big monthly bills. Switch to a low-cost cellphone company. Or get rid of cable. Technology is allowing us to do more for less, and you can take advantage.

Automate saving by transferring money out of checking and into savings at the beginning of every month. This forces you to live on less.

Increase your savings rate by 1% every six months. Set a calendar reminder to help you remember. You’ll hardly notice the difference, and it will really add up over time.

Put 50% of all raises towards savings. You still get to increase your lifestyle, but you do it in a sustainable way.

Redefining rich

Central to all of this is redefining what it means to be rich. If you need a huge home and an expensive car to “feel” rich, then this advice won’t work for you. But if you define affluence as the ability to spend time with friends and family, to travel, to do work you love and to stop worrying about money, then living below your means is all it takes.

Real freedom is the ability to make life choices that make you happy. Frugality puts money in your pocket so you can do just that.

6 Ways to Keep Your Dream Retirement on Track

6 Ways to Keep Your Dream Retirement on Track

Are you a retirement “do-it-yourselfer,” convinced you can plan for your own retirement without paying for a financial adviser? That’s all well and good, but given that money managers work with people in a variety of financial situations, their experiences with the problems that prevent people from retiring can offer insights into how to overcome those challenges.

I spoke to a few experts to find out how they handle that difficult situation: a client who wants to retire but whose financial picture suggests she shouldn’t yet do so.

But sometimes people don’t show up at the adviser’s office until they’re eager to leave the workforce for good. In those cases, she said, advisers sometimes are forced to deliver bad news.

“We just had that situation with an individual and his wife,” Skeans said. “He’s thinking about retiring in two to three years. It was very obvious to me when I looked at his balance sheet, coupled with what I backed out as to their spending, that if they retired immediately they would put themselves into a precarious situation.”

One red flag was that this couple hadn’t accounted for their retirement tax bill. “All of their assets were in tax-deferred accounts,” Skeans said. “Every dollar they spend is going to be a dollar plus the taxes. That means, if you’re trying to support a standard of living after tax, you’re going to have to gross that money up.”

So, one lesson is to remember that the government is going to take a bite out of your retirement account. Here are more lessons financial advisers say they’ve been forced to teach new clients:

  1. Be disciplined about a budget

In 2008, Skeans said, a client who was about 64 years old was laid off. “He decided he wasn’t going to look for other work,” she said. “We ran the projection. Obviously, at that point in time the portfolios were down because of the market and I was deeply concerned.

“Fortunately the guy was a finance guy, a controller for a small company. He heard us loud and clear that the biggest thing he and his wife needed to do was stay within a budget,” she said.

At the time, Skeans talked with the couple about how to stabilize their finances through reduced spending. “He was very adamant he did not want to go back to work,” she said. “We were able to help him and his wife structure a budget and they have stuck to it and continue to do so.”

And now? “Eight years later, their portfolio is just slightly below where it was eight years ago,” Skeans said.

  1. Take a practice run

People sometimes underestimate what they’ll spend in retirement, especially in the early years when they suddenly find themselves with plenty of free time and energy, said Tripp Yates, a wealth strategist at Waddell & Associates in Memphis, Tenn.

“I’ve seen it where people do a budget for retirement and they tell me, ‘OK, we’ve done all the numbers and we can live off $50,000 a year,’” Yates said. Too often, that’s a bare-bones budget that doesn’t take into account travel and other activities. “The first five to 10 years of retirement, people are probably going to spend more rather than less, because they’re in fairly good health and want to enjoy that time,” he said.

One way to get a good handle on your spending is to test-run your retirement budget, he said. In one recent conversation with a couple, he told them: “Maybe one spouse who really wants to retire can. The other spouse continues working and maybe we take six months to a year and try to live on that budget, practice, see if it’s actually doable before both husband and wife call it retirement,” Yates said.

  1. Don’t focus on the market

Given the media’s attention on the market’s every move, it’s no surprise that people seeking help from an adviser often fret about what happen next. That’s the wrong focus, said Robert Klein, president of the Retirement Income Center in Newport Beach, Calif. (Klein is also a writer for MarketWatch’s RetireMentor section.)

“People read so much in the media about performance and that’s naturally their focus until you show them on paper it’s all about your goals and planning for those and controlling what you can control,” he said. While investors must make sure their investments are diversified, there’s no way of knowing when the market might take another steep plunge.

“You have to control what you can control and develop prudent strategies that are going to work no matter what the market does,” Klein said.

  1. Be clear about your goals

Retirement planning is about more than “just having X dollars in income,” Klein said. Figure out what you want retirement to look like, and then work from that. “It’s about a lifestyle in retirement. What are they going to be doing day-to-day in retirement?” he said. “Then you can focus on the finances: ‘What is it going to take so I can do that?’”

For some people, a hard look at a retirement lifestyle leads them to choose to work longer, Klein said. “A lot of people are better off working longer even if they can afford to retire. They just don’t have the hobbies. It’s a whole different routine when you retire,” he said. “Phased retirement is really good for a lot of those people, so they can take baby steps into retirement,” he added.

  1. Use software that provides a picture

If you’re planning your own retirement, are you using financial software that will create projections as a chart? “Most people don’t communicate with numbers, they communicate pictorially,” said Kimberly Foss, founder of Empyrion Wealth Management Inc. in Roseville, Calif.

Foss said she shows clients a simple chart depicting how long their money is likely to last if they retire now. In some cases, she might produce a second chart that shows how spending less might make their outlook improve, and then talk with the client about options, such as downsizing the house or refinancing, working longer or delaying the purchase of a new car.

For one couple, seeing those pictures and having that discussion made all the difference, Foss said. They wanted to spend the same amount of money in retirement that they’d been spending while they worked, but the size of their savings account didn’t support that goal. So, they switched from the country club to a lower-cost health club, refinanced into a cheaper mortgage and started cooking at home more rather than eating out.

Reducing those costs and others preserved their portfolio for the long haul. Said Foss: “It created the income so that they could retire.”

  1. Get real with your adult children

In some cases, people retire but unforeseen expenses put their financial security at risk. Skeans said one client unexpectedly found herself supporting her adult daughter and grandson, who live in her home, even as she herself recently entered a care facility.

“She’s taken out enormous amounts of money to help her daughter and grandson,” Skeans said. “She’s supporting their household and she’s paying the cost of assisted living. I said, ‘If you continue at this pace, this portfolio is going to be gone in five years.’”

Skeans said if the client sells her home—that is, asks her daughter to find her own place—that money would bolster her finances. “She should be able to make it and still leave something to this daughter in the end,” Skeans said. “She said, ‘I’m going to talk to my daughter about that.’”

The Single Most Effective Way to Get Rich

The Single Most Effective Way to Get Rich

Contrary to popular belief, you don’t have to be an expert about personal finance to get rich.

You don’t need to use fancy economic jargon or know this year’s „hottest stock.” You don’t have to come from an affluent family, and you don’t even have to earn a massive paycheck.

For most people, it all boils down to one thing: investing.

“On average, millionaires invest 20% of their household income each year. Their wealth isn’t measured by the amount they make each year, but by how they’ve saved and invested over time,” writes Ramit Sethi in his New York Times bestseller, „I Will Teach You To Be Rich.”

“In other words, a project manager could earn $50,000 per year and be richer than a doctor earning $250,000 per year — if the project manager has a higher net worth by saving and investing more over time.”

Sethi gives an example of the power of investing just $10 per week:

After five years (assuming an average 8% return), you would have $3,295, and after 10 years, you would have $8,136. And that comes from simply setting aside a little over a dollar a day.

Putting away $50 a week would result in $16,473 after five years and $40,678 after 10 years. Imagine how much money would accumulate if you set aside a bit more each week, and did that for several years.

The earlier you start, the better.

This chart from JP Morgan Asset Management, which shows the power of taking advantage of compound interest from an early age, explains why it’s so important to get started now and invest consistently, even if you think you don’t have enough money to make a difference:

You don’t need to be rich to invest, yet so many of us fail to get started managing our money because we’re intimidated or don’t know where to start. Fear of losing money is also a common concern: „That’s fair,” writes Sethi, „Especially after market losses during the global financial crisis, but you need to take a long-term view. Despite wild rides in the stock market, with a long term perspective, the best thing you can do is start investing early.”

Investing is not as complicated or daunting as we make it out to be. The simplest starting point is to invest in your employer’s 401(k) plan; make sure to take full advantage of your company’s 401(k) match if they offer one.

Next, consider contributing money towards a Roth IRA or traditional IRA, individual retirement accounts with different contribution limits and tax structures (which one you can use depends on your income). If you still have money left over and are hungry to continue investing, you can research low-cost index funds, which Warren Buffett recommends, and look into the online investment platforms known as „robo-advisers.”

A Freelancer’s Guide to Making Money

A Freelancer’s Guide to Making Money

I would say that one of the best ways to make money is to start freelancing.  I have been a freelancer for a number of years.  I learned how to write code when I ran my online e-commerce business and then grew from there.  Many people always ask me about freelancing and most of them feel that it is unreachable for them.  They feel that they have no marketable skills or have no idea what they would sell.  I am going to say here and now that anyone can freelance. Yes, anyone!  In the spirit of making money, I wanted to share my version of a freelancer’s guide to making money.  There are many ideas on how you can make money, and I am not going to cover that.  Right now, I am going to cover what you need to do in order to start freelancing and how to be successful.

Identify Your Skill Set

The most important part of freelancing is understanding what you can sell.  Most freelancers sell their services.  Whether those be writing content, providing businesses with ideas, product design, online marketing, blog management, website design, website testing, coding, and many more.  There is a wide range of service that people can do.  Though most of what I have done has been online, there is a wide range of opportunities offline.  They might be harder to find, but they are still there.

Everyone typically has some type of marketable skill. Whether it be enough for full-time employment or not is another story.  People tend to be good at least one thing.  It could be a variety of things, but they still are good at one thing.  Many people don’t think about selling that skill to others.  This is usually because some people just don’t think outside of the box.  If you want to succeed being a freelancer, then you need to understand your skill set and see if it is marketable.

What’s Your Value Proposition

Wait?  My value what?  Before I start digging into the VP as I like to call it, I am going to throw down a little definition for you.  This is how Investopedia defines a value proposition.

A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

In the freelancing world, you are most likely not going to be alone in the services you offer.  I can almost guarantee that one.  If you do have a unique service, then you might want to consider creating a full time business off of it.  That is only if you have a great value proposition.  This statement is to define why your service should be picked above all others.  Why would your service be any better?  What makes your service special?  These are  a few things that you need to answer when you come up with your value proposition.  Do you charge less, yet deliver more?  Do you just kick ass in general and you should be paid for it?  Before you become a freelancer, you need to understand your value proposition.

How Will You Market Your Services?

Alright, you have now figured out your skill set and what sets you apart from the pack. Congratulations!  Here comes the hardest part in a freelancer’s job.  Now you have to market yourself in order to get clients.  Anyone that has freelanced before knows that marketing can be a hard thing to do.  You have to appeal to people looking for your skills in a sea of freelancers.  This is especially true online.  When you jump online hoping to make money, you better know how to market yourself.  There are a few ways that can set you apart from others.

Start a blog – Running a blog can be a great way to meet people in the niche you are targeting. Obviously, you will want to cover topics that relate to your skills.  If you start a blog and network with other bloggers, then you can find jobs that way. This is how I get a lot of my freelance jobs.  There is some power in adding a little “hire me” link to your site.  If you want to know how to start a blog, then check out my little guide.

Be Active on Social Media – Connect and network with other people on social media.  When you are active on social media and converse with those in your niche, then you can make friends.  Networking is powerful and social media just enables that networking to be much easier.

Join a Freelance Jobs Board – There are too many jobs boards out there to name, but when it comes to freelancing, Odesk and Elance are great options.  You can easily setup an account there and start selling your services.  Don’t be discouraged if you don’t get a job right away. There are many other freelancers on these boards to compete with, but just stick with your value proposition.

Contact Companies Directly – This method might not always be successful, but you can and will get jobs from it if you are good.  If you know of a company that could use your services, then reach out to them.  Contact them and see if they need help. You never know where it will lead.  I have been flat out rejected, not responded to, and asked not to contact them again.  There have been other times when I have received steady work.  You never know.

Pricing and Delivery

Welcome to the next step in freelancing.  If you are going to sell services, then you better know what you want to charge. This is a very hard thing to do for most freelancers.  The reason is that the knowledge to set correct rates and delivery times comes from experience. You don’t get experience until you have a few completed jobs under your belt.  This is where you need to be flexible.  Your first few jobs might pay you less, but they will get you experience.  If you jump into conversations about pricing with a high price, then it will be an immediate turn off.  This is especially true if you  have no credentials to back up your pricing or any testimonials.  Pricing is truly an art when you freelance, so don’t be afraid to change it up.

Once you start working and selling your skills, then you will need to deliver.  This step also comes from experience.  If you are writing, then you need to know how long it will take.  If the people that hired you ask if you can finish said task in a certain time, then you better know if you can finish it.  There are too many other freelancers out there that will take your job in a heartbeat.  Don’t miss your deadlines.  If you think you are going to miss your deadline, then reach out to your contact and tell them why.  Be honest and transparent.

That will keep you on the job.

So there you go.  These are my keys to making money as a freelancer.  You need to know your skill set, understand your value proposition, market said value proposition, then price it right and deliver.  This guide might make it sound easy, but there are not too many freelancers that make a ton of money.  Just don’t get discouraged. This is not a get rich quick kind of thing.  You will not become a millionaire overnight.  You may never become one.  The point of freelancing is to earn extra money on the side and do something that you enjoy.  It might even turn into a full time job like our friends at Club Thrifty and Making Sense of Cents.

Are you a freelancer?  What tips do you have for someone just getting started?