Kicking Financial Ass

by Paul Christopher Dumont

  Option 2: License a Product

  This is the most complicated way to sell. As a licensor, you can create a product, and then license it out to others to manufacture, collecting a paycheck for every item sold. Typically, you make 10% of the wholesale price, with the rest being kept by the licensee.

  The other way is to be the licensee, allowing you to create and sell the product. The licensee keeps most of the profit, but the role requires a lot of negotiating and legal work. Which leads us to the third option, which is the least complicated and most profitable.

  Option 3: Create a Product

  There are three ways to do this:

  1.Create the content yourself, using a variety of sources and mixing and matching them to create a unique product.

  2.Repurpose information that is in the public domain that is not subject to copyright law.

  3.License content or hire an expert to help create the content.

  Options #1 and #2 require you to be an “expert” on the subject matter you are catering to. Being an expert does not mean you need to know everything. It means you must know more than 80% of what the general public knows on a subject. If you have a passion, then you are already there. Add a little more research, and you can easily create a product based on your knowledge.

  An alternative to knowledge-based products is to start a drop shipping business. It allows you to sell a product directly to the customer without having to buy any inventory. You do not invest money in purchasing products, keeping your risk low. The manufacturer not only carries the stock, but they also ship it directly to the customer for you. Your main focus is marketing and customer service. With drop shipping, you can start a business with any of your favorite passions. Almost any niche can be sold using this method. You can either create your own product (recommended), outsourcing production and inventory management, or resell an existing product.

  Pricing Products

  If you decide to create a product, the product should cost between $50 and $200. Pricing low is shortsighted because you want to provide value to your customers, and often it can be difficult to provide value if the product is priced low. Moreover, focusing on price alone can lead to a race to the bottom mentality. Many companies are switching to upmarket products in search of growth. Some examples are Starbucks, who charge as much as $12 a cup in response to specialty roasters, and movie theaters, who offer a more premium experience to compete with Netflix. Besides giving people more value, look at three more reasons why you should price your product high:

  1.Higher pricing means you can sell more units with less work. It often takes just as much work to sell a lower-priced product as it does a higher-priced product.

  2.Higher pricing attracts low-maintenance customers, which can save you time.

  3.Higher pricing usually means higher profit margins.

  Tim Ferriss recommends pricing your product with an 8x to 10x markup, which means if the product costs $10 to make, then aim to sell it between $80 and $100. If you go the retail route, by the time wholesalers and retailers take their cut, you still want enough left over to make it worth your time. The exception to this markup rule is if your product is information, like selling a guide or a how-to tutorial. It did not cost you anything to make other than the initial time investment, so your markup is exponentially higher. An additional benefit of selling information-based products is that it takes a lot more effort for others to copy your idea.

  MAKING MONEY WITH SERVICES

  Services are providing an intangible benefit to the end consumer and are a little more hands-on to execute than products. With services, you are essentially selling hours for money. With the U.S. transitioning from a manufacturing economy to a service-based economy, more and more businesses are moving toward the service-based model, which can be quite lucrative if done properly. If you choose to offer a service, consider these ideas:

  Freelance Writing

  Everybody needs good content, and the best part is you can write in your spare time. Freelance writers are typically paid by the post or project, so wages vary.

  Find a niche by identifying topic areas that you are knowledgeable and passionate about. You will not produce quality work if you are not excited about your subject matter, so make a list of your top 10. Narrow down your list to your top three, and then find 10 publications per passion. These can be blogs, websites, or industry publications. All in all, you should have 30 potential publications you can reach out to.

  The next step is to create a website, using WordPress or Squarespace, to highlight your work as a writer. Keep it simple using the following website layout:

  1.About: Focus on your professional accomplishments.

  2.Portfolio (or Blog): Highlights of your professional writing work.

  3.Hire Me: Include the topics you are interested in and a contact form where clients can put their name, email, and subject. Include a rate table once you have built up a large enough portfolio. Look up pricing grids based on the type and length on GhostBlogWriters.com or Scripted.com.

  4.Contact: Include your social media pages, email address, and telephone number, optional.

  For your social media presence, have at least a LinkedIn page for professional networking. Signup for one or more of the following freelancing sites:

  •Upwork

  •Freelancer

  •Fiverr

  •Contena

  •Mediabistro

  •ProBlogger

  •WritersWeekly

  •PayPerContent

  •FreelanceWriting

  Also, tell your friends that you are writing on the side for potential referrals.

  Don’t have a portfolio yet? First, start with a blog that can build credibility, and then you can write for other people’s blogs. Your writing should be well-researched, well-written, and delivered on time. Do that so that more work comes in from your first clients. Repeat clients mean you spend less time searching for new gigs and more time earning money. Also, if you incorporate search engine optimization (SEO), you can charge higher fees. The key is to create a habit by setting aside time every day to write.

  Rideshare

  If you have a car and live in a city, chances are services like Uber and Lyft exist. Instead of using the service, why not be a part of it and generate income on the side? The best part of doing this is you decide when you work. You can do it before work, pick people up on the way to work, work evenings and/or weekends. Be aware of “surge pricing” during high-demand periods like New Years and other holidays. If you time your shift correctly, you can make a lot more than during regular hours. At the time of writing, Uber rates were $1.10 per mile, $0.21 per minute, and $0.80 per trip. The pay structure is simple:

  Earnings subtotal=

  Base Fare + Time + Distance

  For every minute you have a passenger in your car, they are charged. On top of that, every mile you travel is also charged, like how taxis work. If driver supply is low and passenger requests are high, then surge pricing occurs to encourage more drivers to hit the road. This is a multiplier,46 and its value depends on the gap between driver supply and passenger demand. This is how your fare looks after surge pricing:

  Passenger fare=

  (Earnings Subtotal x Surge Pricing) + Service Fee

  It is important to note that Uber keeps 20% of that total. So, you keep 80% plus any tips the passenger gives you. It is always a good idea to provide excellent customer service so that you get a high rating and potentially a larger tip.

  Moreover, keep in mind the costs of running your car, like gas, insurance,47 and maintenance. A rough rule of thumb is expenses eat up another 20% of your passenger fare, which means after Uber’s cut and expenses, you are taking home about 60% of your fare plus any tips. On average, Uber drivers make $15 to $20 an hour,48 so it can be a way to bring in flexible side income.

  Both Uber and Lyft are good starter ideas and offer a “Destination Mode,” which basically allows you to make money on your way to and
from work by telling the app the direction you are headed and only accept the riders that are along your route. The only limitation with this side business is the money you make is limited to the time you are driving.

  Here are a few more tips to make the most out of ridesharing:

  •Use the referral and bonus system. The amount varies depending on your location but typically ranges from $250 to $1,000. This is a big incentive to invite your friends to become drivers as well.

  •Use the lowest cost and most fuel-efficient car you can afford. Uber has restrictions, such as having a car that is less than 10 years old, so get something newer but with few miles on it. Saving money on gas is essential when working in ridesharing.

  •Aim to drive during surge pricing hours to maximize the money you make.

  •Choose trips that involve highway driving since most income comes from per-mile charges.

  •Turn on destination mode so that you can take rides on your way to a location you are already planning to go to.

  •Provide good customer service to increase the odds of getting a tip. Making money from driving itself can be hard.

  Rent Out Your Car Using Turo

  If you have a car and rarely use it, rent it out using Turo, an online platform similar to Airbnb for cars. You can rent out your car on an hourly or daily basis. According to their site, the average car sits idle 22 hours a day, so make money on it while it is not being used. The company handles all the insurance. The best part is you do not have to be using your time to drive people around.

  For example, say you rent out your car for $40 a day, and your daily expenses amount to $15 a day. You are making $25 a day profit. If you only need your car on the weekends, rent out your car during the week. If you rent your car 20 days a month, then you make $500 a month in profit on one car. If you want to take it a step further, research and see how much it would cost to lease a car compared to your daily rental rate. If you can rent it for more than your lease payment and other expenses, it might be worth scaling up this side hustle by leasing cars and then renting them out.

  Airbnb

  This is an easy and cost-effective way to make extra income. I rent out my condo when I am out of town and have used Airbnb myself on numerous occasions when traveling. If you have a spare bedroom, it is even better since you have more flexibility as to when you can rent it out. Look up the rental rates in your area and see what the average rate is. You may have to start with a lower rate to build up a record of positive reviews. Then, increase your rate over time to match the market. Make sure you have nice photos and a great description of your place. If you are more ambitious and do your research, having multiple properties on Airbnb can bring in a lot of money. Be sure to check to see if Airbnb is permitted where you live. Some condo buildings do not allow it.

  Additional service ideas:

  •Tutoring. You can tutor something related to your work or something you are good at. You do not even need to limit yourself to a local presence if you use a service like WyzAnt.com, which is one of the largest operators in the online tutoring world. If you are proficient at playing the piano, teach piano lessons. If you made a good score on your SAT or GMAT, tutor that. I used to tutor for the CFA exams. The possibilities are endless.

  •Teach English. You can earn between $14 and $22 an hour teaching English to young students in China with VIPkid.com. The only requirements are that you are eligible to work in the U.S. or Canada, have a bachelor’s degree, and a year of teaching experience. Tutoring, mentoring, and coaching all qualify as teaching experience.

  •Delivery Service. With companies like Uber Eats and SkipTheDishes, you can earn a side income similar to Uber. The average delivery driver makes around $14 an hour. The wage is dependent on how many deliveries are made per hour, which is influenced by traffic, restaurant wait times, and parking.

  •Teaching Online. If you are knowledgeable about a certain topic, create your own course using Udemy.com or Thinkific.com, and set your own tuition rate. If you already have an online audience, it would be better to sell to your audience directly and save what you would pay to Udemy.

  •Become an Adjunct or Part-time Professor. You may need a graduate degree for this, but you can make good side income by teaching once a week at your local university or college. A friend of mine teaches part-time and makes about $5,000 a semester per course.

  •Being a TaskRabbit. TaskRabbit.com is an on-demand errand-running and labor service. You have the freedom to work your own hours in your spare time.

  •Selling on eBay/Kijiji/Craigslist. First, start with finding things you no longer need and sell them for extra cash. From there, look for market opportunities like going to garage sales and flipping rare finds for a profit. I used to pre-order video game systems and high-demand electronics and flip them. I also sold things for family and friends and took a small cut of the sale, essentially being a virtual eBay merchant. All in all, I sold over $100,000 of products on eBay during my undergraduate days.

  •Selling on Amazon. Like eBay, if you can find products for cheap, whether you import them or find them at liquidation stores, farmers markets, or garage sales, you might be able to resell them on Amazon for a profit. The nice thing about Amazon is their Fulfillment by Amazon (FBA) program that allows you to use their warehouse space for a fee, and they will process and ship your online orders for you.

  •Selling on Etsy. Etsy.com is the world’s largest online marketplace for hand-crafted goods. I have numerous friends who knit and craft and then sell on Etsy.

  •Consulting /Coaching. Consulting is a broad field, but demand for practically every area of expertise exists. What area can you offer advice on that people would be willing to pay you for? Or, another way to look at it is what credentials do you have that give you credibility? Look up what the average rate is for that area and start marketing. It may take some time to develop a reputation and a clientele, but it is worth it. With platforms like Clarity.fm, you can get started quickly and charge up to $60 an hour.

  •Cover Letter and Resume Service. If you have experience in HR, this can be a great way to make a side income. People looking for a job are willing to have a professional look over their resume and cover letter to provide valuable feedback.

  •Dog Walking. Providing a service for those who work downtown and have to leave their dog at home in the suburbs can be a lucrative job. Post ads in your neighborhood or, if you are in the U.S., use a site like WagWalking.com. If you are in Canada, use GoFetch.ca. Dog walkers charge between $15 and $25 per day per dog for their services.

  •Pet Sitting. When homeowners travel, many opportunities exist for pet sitters. In Calgary where I live, doggy daycare centers cost around $40 a day.49 If you like animals, price your services accordingly and offer great customer service. This gig may be a great way to make additional income.

  •Yardwork. I used to do this after my day job, working for a school teacher who did this for his side hustle. He charged $10 per lawn to mow once a week, built up his clientele, and at his peak, was mowing over 10 lawns each day after work, and more on weekends. Doing the math, he was making over $1,000 per week mowing lawns in addition to his teaching job. Not too bad!

  •Referee a Sport. Leagues are always in need of referees, and if you have experience in the sport, it can be a good way to earn money.

  •Blogging. It takes a lot of work and dedication to build an audience. Like freelance writing, focus on a topic you are passionate about, be it a product review site, a niche you are into, or really anything. WordPress.org offers free templates you can use and set up in no time at all. Typically, posts over 1,000 words get better SEO results so focus on length, and not putting out short low-quality posts.

  •Affiliate Marketing. Refer website visitors to buy products you recommend online and earn a small commission. It works best if you have personally used the product, whether you do a review on it or recommend it.

  •Child Care. A nicer way of referring to babysitting, c
hild care can bring in a good side income once you build a client base. If you are in the U.S., use a site like SitterCity.com to find people who need your services. In Canada, look at CanadianNanny.ca.

  •Podcasting. I am an avid podcast listener and highly recommend them. Over the past year, I listened to over 400 hours of podcasts, and I am not alone. It is estimated that in 2017, over 112 million Americans listened to a podcast.50 That number is up 11% from 2016, and over 40% of Americans aged 12 and up have listened to one. It is big business. Advertising rates are about $25 to $50 per 1,000 listeners. If you build an audience of 10,000 users, you could make between $250 and $500 an episode. Not bad! Tim Ferriss, the founder of the Tim Ferriss Show Podcast, has the #1 business podcast of all-time, passing 100 million downloads. He is on record saying his podcast makes more than all his books combined.

  •E-Book Publishing. Whether you use Amazon’s Kindle platform, Apple’s iBook store, or sell directly from your website, selling e-books on a subject you are passionate about can provide a nice side income. You do not have to be a professional writer or have been previously published to start an e-book. You just need an idea and to start writing! Be sure to get feedback from family and friends, have it professionally edited, and hire a designer for an appealing book cover to boost sales. Another idea is to start a blog first to gauge interest in your topic and then create an e-book based on your blog.

  •Online Dating Specialist. If you have experience in the online dating realm, you would be surprised at how many wealthy people do not want to spend the time to create a profile, text, and arrange dates. You can do this for them.

  •Home Automation Expert. The internet of things (IoT) is growing every year, and people want their home connected. Do some research, and you could provide this service to them

  •Website Design. If you have experience using WordPress, Squarespace, or another website design website, you can charge to create websites for other people. The best part is a lot of the templates offered require zero to little coding experience.