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Making Money With Food

It’s been said that the way to a man’s heart is through his stomach. This saying certainly rings true for not just Jamaican men but women as well, as it is part of our culture to enjoy a good meal. Practically every month a food festival is held somewhere in the country, and people will travel far and wide to partake in the offerings.

With the universal love for eating out, it’s ironic that the restaurant business holds the dubious distinction of having a 90 per cent failure rate. Although researchers debunk this statistic as an urban myth, many persons are still wary of venturing into the food industry because of its varied challenges.

Despite the possible setbacks, there is nothing as satisfying as food preparation for those persons who are naturally talented in this area. The good news is that you don’t have to inject significant financial capital and spend extended hours to benefit from the food business, as it also presents several opportunities for earning part-time income. Let’s look at some tantalizing options:

Breakfast Snacks

The pressures of modern-day society rob many people of the time to enjoy some of the traditional pleasures of life. Leisurely breakfasts have been sacrificed in the daily job commute, and there are many offices where the employees arrive at work without eating a morning meal. You don’t have to possess any major culinary skills to take advantage of this opportunity - providing simple dishes such as porridge, festival or muffins to hungry co-workers can give you a steady income.

Theme Snacks

It’s rather disappointing that the majority of children’s snack manufacturers fail to use innovation to create new and exciting products to attract their target market. However, this opens up great possibilities for part-time bakers to use their imagination for profit. How about forming unusual shapes with cookie dough to produce visually appealing snacks? I particularly love the concept of a cookie shaped like a dollar sign!

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Cooking Classes

Increasingly, Jamaicans are expressing appreciation for non-traditional cuisine such as Italian and Middle Eastern fares. However, while generations of grandmothers have passed on instructions on making conventional Jamaican dishes, there aren’t many places to learn how to properly cook more exotic menus. If you have a knack for preparing authentic meals from other countries, why not share your expertise in a cooking class? Open up your kitchen and you might be surprised at the response.

Fruit Bouquets

Jamaica is blessed with a variety of fruits in season at different times of the year, so it’s a good idea to take advantage of these crops to make money. One exciting new trend in food is the creation of fruit bouquets, where attractive, edible designs are crafted with fruit instead of flowers. With basic implements such as flower-shaped cookie cutter and bamboo skewers, you can easily create eye-catching gifts and event centrepieces. Search online for instructions on making fruit bouquets.

Fruit Preserves

One of my pet peeves is to see so much delicious fruit going to waste in the height of the mango season. With a little effort and dedication you can turn a variety of ripened produce into preserves by bottling them in jars. If your homemade efforts develop an enthusiastic following of buyers, then you can contact the Scientific Research Council for technical guidance on how to professionally bottle these confections for a wider market.

Natural Juices

Another way of making use of our bountiful harvest of fruit and vegetables is by producing natural juices for sale. There is currently more awareness of the benefits to be derived from healthy eating, and fresh juices are in demand for their high nutritional value and cleansing effects. If you have the ability to whip up an assortment of natural juice recipes, then a small investment in a juice extractor may bring you big returns.

Specialty Catering

One of the biggest challenges for persons with strict dietary requirements is the difficulty of finding food providers that can accommodate them. Many caterers assume that vegetarians only eat basic salads, while people with chronic illnesses such as diabetes and hypertension have to suffer with meals containing too much sugar and salt. There is also demand for gluten-free foods for children with learning disabilities. If you are looking for a profitable niche market for food preparation, then cater to persons with special food requests.

Natural Foods

The back-to-natural-food bandwagon is not just being promoted by those with special health needs, as more persons are realising the tremendous dangers of food additives and preservatives. Although most people might admit that their food choices are unhealthy, oftentimes the convenience of junk food wins out over hard-to-get wholesome fare. I encourage part-time food providers to supply more nourishing alternatives including fruit, vegetables and whole grains to a nutritionally starved market.

Whichever area of food delivery you choose as a means to earn extra income, make sure that you follow all the relevant regulatory guidelines. Next week, we will examine several other practical ways to make money in your spare time.

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, July 22, 2010

Making Money With Your Home

Over the past weeks we have been encouraging persons to get innovative in looking for ways to become more productive. It makes no sense to merely complain about a shortage of money - you have to focus your efforts on creating solutions to earn more. Fortunately, there are dozens of methods of generating income; it’s wise to choose one that best fits your personality and situation.

In your quest to improve your finances by finding a practical means to earn more money, you may encounter some roadblocks. You may have a job that expressly prevents employees from marketing things at the workplace or having any outside employment. You may find it hard to discover your inner talents to exploit for profit. Maybe you’re hopeless at sales and couldn’t even sell water to a thirsty person.

If you have a challenge identifying a viable product to sell or making use of your talents to serve others, don’t despair. There may be several earning opportunities lying undiscovered right at home. Many people don’t recognise that their residences are ‘lazy’ assets - they have monetary value but never contribute any income into their pockets.

If you’re determined to find an additional earning source, maybe some of these possibilities to earn with your home might appeal to you:

Boarding Facility

One of the simplest ways to make extra money from your house is to rent out some of your rooms to boarders. If you have a self-contained space with bedroom and bathroom facilities and can provide access to the kitchen, then it should be relatively easy for you to earn. If you live near to a tertiary education institution and would like to take in students, you can register your property with the proper department which can advertise it for you.

Want to learn how to ‘think and grow rich’? CLICK HERE!

Bed & Breakfast

Jamaica is an in-demand tourist location, but most people don’t realise that they can participate in this industry without having a hotel. There are travellers around the world who are looking for bargain rooms or prefer to experience an authentic vacation with real residents. If you have an entertaining personality and adequate room space, this might be a great option. You can market your property on websites that cater to this type of tourist or contact the Ministry of Tourism for more information.

Child Care Facility

If you live in a community with young children whose parents have to go out to work, you could consider using your home as a facility for day-time child care or for after-school accommodation. You would have to take extra precautions to ensure the safety of your environment and that you have properly trained persons to look after the children. Do the necessary checks to determine if your home can be legally used for this purpose.

Land Lease

There is a lot of idle land in this country that could be put to productive use for agriculture or other purposes. If you’re fortunate to have a big backyard, but lack the desire or ability to plant crops on it, how about leasing your land to an enterprising farmer? Depending on the location of your property, it could also be used for light manufacturing or rented for a billboard site. Observe your yard with an analytical eye, and think of entities that may find your property valuable in some way.

Virtual Business Address

Some home-based entrepreneurs would prefer not to use their residences as their business addresses for privacy reasons or because of inadequate mail service. If your home is easily accessible for the delivery of packages, and your address sounds like a professional location, then it’s possible to earn from simply renting out your mailbox as a virtual business address. Check with small business groups to find trustworthy clients.

Photo/Video Location

Real estate professionals say that the key to making profit with your property is all about “location, location, location.” If you’ve created a beautiful garden at home, or have been blessed with eye-catching scenery, you could consider offering your property for use in music videos or specialty photography. If you’re located near to a church or school, hand out flyers advertising your backyard as the perfect setting for group photos and videos.

Storage/Parking Facility

Another option for making money with your home is to rent out idle rooms to persons who are in desperate need of storage space. You could store furniture for persons who have to downsize their living arrangements but don’t want to get rid of their belongings, or stock imported items for a shop owner. How about also making use of your empty driveway? If you live in high-traffic environs such as New Kingston or Spanish Town, you could easily find customers for rented parking space.

If you plan to use your home to generate income, ensure that you comply with any regulatory guidelines that might govern your activity. Next week we will search for other practical methods of making more money.

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, July 8, 2010

Making Money From Training

IN these tough economic times, it’s important for us to focus on income possibilities instead of just worrying about our financial problems. If we can envision a more prosperous future and then channel our energies into productive activities, then we will eventually overcome the money challenges that burden us today.

Over the past weeks, we have been highlighting a variety of options to earn extra money. If you are looking for part-time income, remember to concentrate on opportunities that fit your natural talents, which can be carried out after regular work hours or on weekends. Today, let’s look at ways to create income sources from training.

In this information age, many people recognise the importance of training to attain their goals. However, the problem is that most educational sources are priced beyond the means of the average consumer. In offering solutions to the market, you can gain a competitive advantage by charging lower rates and being more flexible to meet customers’ needs.

People who will succeed in the training arena should have these competencies: a thorough knowledge of their subject area; the ability to impart key concepts to others; the patience and persistence to work with persons who may be slow to learn; the desire to see others achieve their goals; and a genuine love for teaching.

Here are some possible ways that you can earn extra income from training:

Homework Centre

Many people are feeling very pressured about helping their children with homework. After a hard day’s work, most parents have little energy left to figure out the intricacies of their kids’ curriculums, but they would like them to get the necessary assistance to succeed. With a little space on your patio or at your dining table, you could easily create a small homework centre and provide this necessary service for a few students.

Want to learn how to ‘think and grow rich’? CLICK HERE!

Math / English

One of the challenges for a large number of adults in Jamaica is that they never passed the all-important subjects of English and Mathematics in school. This situation hampers their job-hunting success and their ability to perform in the workforce. If you have a knack for these subjects and the willingness to work patiently with adult students, then you could create a satisfying income source.

Specialty Subjects

Due to the lack of qualified teachers for certain specialty subjects such as geography or technical drawing, some schools don’t offer these topics for external examinations. However, there are students who will need to pass these subjects in order to attain their desired occupations. If you have the knowledge to successfully train people in these subjects and take them to exam success, then this may be a great option for you to earn.

Children with special needs

In recent years, there has been more awareness of the needs of children with disabilities, especially those with intellectual challenges. One of the biggest problems for parents of children with autism, attention deficit and hyperactivity disorder (ADHD) and other learning impairments, is the shortage of institutions and trained special educators that cater to them.

Many of these children also need extra reinforcing after school to help them to retain what they learnt. Even without specialised training, persons who have a talent for using stimulating exercises to teach the basics of reading, writing and math can earn extra income by offering tutoring services to children with special needs.

Computer / Internet

In our technologically driven society, it is increasingly difficult for persons to survive without using a computer or the Internet. Senior citizens, persons without access to personal computers and small business operators, are all prospective customers for an enterprising person who wishes to teach basic computing skills. With a few computer stations and a little patience, you could develop a very lucrative side job.

Accounting Packages

Providing services for the small business community has tremendous potential for the enterprising entrepreneur. One area of immediate need for micro operators is training on the use of simple accounting packages such as QuickBooks, given the increased efforts of the Tax Administration to get small enterprises tax compliant. If accounting is your specialty, you can develop a course that demonstrates how to use this software to satisfy their bookkeeping requirements.

Customer Service

Another major area that bedevils many small enterprises is the low level of customer service provided by their staff members. The typical entrepreneur lacks an understanding of human relations practices that can help to streamline their service delivery. Using innovative techniques and the wealth of information available on the Internet, you can create a training module that addresses this need.

If you focus on where people have a need for training, then you can think of several other areas to target for a tutoring business. You can advertise your services by putting up attractive flyers at offices, schools, supermarkets and churches, and by word of mouth from your satisfied customers.

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, June 24, 2010

Making Money From Your Backyard

Many persons find it challenging to think of practical ideas to earn extra income. The key to making more money is first to identify where people have unmet needs or pressing problems that you can solve for profit. When you are trying to create a part-time source of income, you should always stick to options that fit in with your natural talents or the resources that you already have on hand.

Using these basic principles, it should not be difficult to find several opportunities to become more productive in your spare time. Today, let’s look at how you can use your backyard, whether big or small, and a little elbow grease to work your way into extra cash.

Producing Seedlings

The Ministry of Agriculture is currently encouraging persons to focus on backyard gardening, so it’s an opportune time to piggyback on this campaign. Even if you don’t have a green thumb, it is relatively simple to produce seedlings for basic crops such as lettuce, cabbage, string beans and tomatoes for supply to your friends and colleagues. The advantage to growing seedlings is that you can harvest a large crop in a relatively small space.

Growing Organic Vegetables

While some people will gravitate towards growing what they eat, even more will be happy to buy fresh produce directly from you. You can create a steady income by cultivating vegetables and seasoning produce in a small area of your garden. If you produce crops without using pesticides and chemical fertilisers, then you can tap in on the increasing demand for organic food items.

Want to learn how to ‘think and grow rich’? CLICK HERE!

Preparing Container Gardens

There are many people who would like to grow their own food items but lack the necessary backyard space to do so. Here’s a perfect solution - you can prepare and sell ready-made vegetable gardens in containers such as large pots or recycled five-gallon paint buckets. After reaping the produce, your customers can return the containers and purchase a fresh supply.

Planting Herbs

There is tremendous demand for natural remedies for chronic illnesses, and the market for herbs and spices offers great possibilities. Check around at health food stores to see which types of products are best sellers and then do a little research on how to cultivate and package them. With care and effort, you may even develop an export-quality product that can earn foreign exchange.

Cultivating Grass

A unique option for persons who don’t mind getting their hands dirty to earn any honest living is grass cultivation. The popularity of home and garden television shows has spurred many homeowners to become more focused on creating the right curb appeal for their properties. With minimal space and a little technical know-how, you can cultivate grass sod for lawns and supply landscaping companies or homeowners directly.

Raising Exotic Plants

The market for ornamental flowers will always be an option for income generation, even in challenging times. If you have a knack for growing plants, why not convert your talent into money? Turn your backyard into a greenhouse and raise exotic flowers such as orchids or anthuriums for gifts. You can also cultivate attractive plants for rental or sale to offices or for decorating events.

Making Potting Soil

If you’re totally hopeless in the garden and everything you touch turns brown, there’s still hope to earn cash from your backyard. You can create a compost heap with vegetable peelings and other discarded foods to produce enriched soil for other backyard gardeners. Search online for simple techniques and inexpensive machines that can turn decaying leaves into organic potting soil.

Raising Bees

Plant cultivation is not the only option for backyard enthusiasts. If you are located in a more rural setting, then beekeeping might be a viable alternative. Jamaica’s climate is ideally suited to raise bees, and you can take advantage of the huge worldwide demand for products such as honey, bee pollen and beeswax. Due to the stringent controls on beekeeping you have to be registered with the Ministry of Agriculture to legally maintain an apiary in Jamaica.

Rearing Chicken/Rabbits

If the thought of getting stung by bees is a major fear, then you can consider rearing animals on a small scale for consumption. With some technical assistance and a little investment capital, you could create income from raising organic chickens to supply consumers’ desire for hormone-free poultry, or capitalise on the growing appetite for rabbit meat in Jamaica.

There are several departments in the Ministry of Agriculture that can provide all the guidance and support to help you be successful in your backyard gardening efforts, so take advantage of this assistance. Next week, we’ll continue our focus on other practical ways to earn part-time income.

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, June 24, 2010

Multiple Streams of Income

“Then the Lord God planted a garden in Eden in the east, and there he placed the man he had made. A river flowed from the land of Eden, watering the garden and then dividing into four branches.” - Genesis 2: 8, 10 NLT

When it comes to their finances, many people are currently experiencing severe drought conditions. The reservoirs of their bank accounts are running dangerously low, as the constant outflows of money are not being replenished by new inflows of savings. The Jamaican proverb, “Rain a fall, but de dutty tough,” aptly describes the inability of their scattered income showers to nourish their parched budgets.

Some persons whose steady earnings have regularly flowed from their work pipelines, now find their taps painfully dry. Everywhere you look, people are engaged in a desperate search for fresh income sources to meet basic requirements and to store up for the future.

While the drought analogy might be appropriate for the financial challenges that many of us are facing today, remember that money is still in abundant supply even though it might not be obvious in our pockets. Just like water, money can turn up in our lives if we know where to look for it and how to harvest it.

Over the years, we have been socialised to depend on a single source of income to satisfy our needs. We expect that in return for giving everything to our nine-to-five jobs, we will be rewarded with all the necessary perks and receive comfortable retirement plans. While this may have been the reality 30 years ago, times have changed.

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We can no longer look to our employers as benevolent cash cows who can provide for our every desire. Modern-day methods of production and service delivery require that companies become more cost-conscious to remain competitive in a global marketplace. Employees must now learn how to fend for themselves to ensure that their financial goals are met.

Expand your earning sources

It is absolutely essential in this economic age for you to become focused about earning extra money. It is your responsibility to use your time efficiently and productively in order to create the necessary income to pay your bills, get out of debt, save for emergencies, and put something aside to meet your goals.

I always encourage persons to create more than one source of income. When there is only one major supply of money, then you are at risk if it dries up. In the same way that a river has small tributaries that can transport water to nourish various areas of the land, so should you have multiple outlets that will sustain your different needs.

While you may recognise that earning more is the only answer, it can be challenging to identify practical options to expand your income sources. With limitations of time, money and ability, how can you get extra money rolling in?

The first step is to calculate exactly how much more you need to earn each month. Preparing a detailed budget can help you to identify income shortfalls and thereby set a targeted amount to work towards. When you are clear about how much extra money you need to improve your finances, then you will be more motivated to succeed.

How to find earning opportunities

When looking for income-earning possibilities, consider your personal situation carefully. If you already have a job, be careful not to get involved in projects that are too time-consuming. Your part-time option must be generated without threatening your regular pay cheque, so it shouldn’t leave you too tired to carry out your normal job, or be in conflict with your terms of employment.

It’s also important to look for activities that you really like to do, as you don’t want to feel burdened with another demanding chore. Consider a hobby that you could already be doing for free, but which has value to others. You could easily convert your pastime into an income source that is financially and personally fulfilling.

You need to identify where you have access to large groups of people such as a school, church, community or even your own workplace. The idea is to be able to supply a lot of persons with the least amount of effort on your part. Look keenly for their unmet needs or glaring problems and think of how you can solve these for profit.

In our fast-paced society, people desire immediate gratification. If you can figure out how to supply existing products or services more conveniently and at cheaper prices, then you can create willing customers. Use innovation to design something unique, or be creative in the use of your existing assets. Make sure that you consider any legal restrictions or the tax implications of the income-generating options you choose.

Over the coming weeks, I will explore several methods of earning extra income to help you to find the right opportunity for you.

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, June 17, 2010

Networking for Earning

Over the past weeks, we have been examining the age-old question “How can I earn more money?” If you’re seeking an answer to this problem, but you have insufficient time to increase your income, then you may have to change your method of making money.

As discussed, most persons earn a living by pursuing linear income, and have to continually put in work time in order to get paid. Linear income puts a ceiling on your earning ability, as time is a restricted resource. Also, if you have to physically stop working for any time above your vacation or sick leave allowance, your income is negatively affected.

Looking for options, we considered residual income, where you are able to earn continually from some type of work or investment that you carried out once. For example, you can earn residual income on royalties from book or record sales. We also examined leveraged income, in which you can multiply your total income by utilising the efforts of other people. If you employ others to work in your business, then you make use of this type of income.

Although residual and leveraged income sources can help to exponentially boost your earning power, the reality is that it can be difficult to make practical use of these options. Not many people will achieve financial success by writing books or recording music; and being a profitable business owner takes time, money and knowledge, which may elude the average person.

Is there a way to earn extra income without actually creating your own products or business? What if you could make money by buying products that you like and use all the time, and then recommending them to others?

Referral revenue is real

Referring your friends to try products and services is an everyday activity; you rave about the latest movie, you suggest the tastiest dish at your favourite restaurant, you insist that your hairdresser is the best stylist in town. Although your efforts may increase sales for these businesses, you don’t usually get paid for your endorsements.

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The good news is that many companies have realised that personal recommendations for their offerings is a powerful marketing tool. The immense value of regular people directly promoting products and services to their friends and colleagues has spawned a method of distribution called network marketing. This direct selling method is widely used by industries involved in wellness, household products, communications, cookware, skin care, office supplies and many more.

In other words, there are companies out there that will pay you to buy their products and refer others to do the same.

The networking model

The structure of network marketing is based on two fundamental principles. A company offers individuals the opportunity to become independent representatives or business owners to distribute its goods. This process redirects the company’s sales expenses from costly advertising campaigns and retail middle-men, and puts the money into the pockets of the end users.

This distribution model also utilises an extra incentive to boost sales, by allowing the representatives to create their own network of independent business owners. For their efforts in increasing the marketing of its goods and services, the company will reward business builders with a percentage of the revenue generated by their teams’ efforts.

Network marketing offers both the residual and leveraged income options that we have highlighted. Once you establish dedicated customers for the products that are available, you have the ability to get repeat revenue. You take advantage of leverage when you earn from the sales of your network of distributors. This opportunity also comes without the hassle of actually creating your own products or business.

Evaluating an opportunity

In Jamaica, there are several established network marketing companies such as GNLD, Herbalife and Avon, as well as many new options. Like any other business, it’s important to do the groundwork to determine if a network marketing opportunity is right for you.

Some considerations include:

- Do you like the products or services that are offered?

- Are the products consumable (used repeatedly) and in demand?

- Is your earning directly tied to sales volume?

- Does the marketing plan sound too good to be true?

- Who are the owners or principals in the business?

- Does the company provide effective training and support?

- Is there a focus on personal development for the distributors?

Some people have an erroneous impression that network marketing is a way to get rich quick. The easiest thing about this opportunity is that the products, distribution system and earning plan are already created for you. To be successful you still have to work hard; you must be willing to learn the business, create a customer base, motivate and train your team members, and develop your leadership abilities.

So, whether you are looking for some extra income or desirous of running a business full-time, network marketing could be a profitable choice!

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, June 10, 2010

Using OPT to Earn More

One of the biggest financial challenges many persons face today is the need to earn more money to make ends meet and achieve their goals. As most people obtain their incomes by selling their time for dollars, their ability to increase their remuneration is severely limited by the number of hours in a day.

Many employees and self-employed persons neglect to pursue earning options from sources that are not wholly dependent on their physical efforts. They believe that work security lies in their own ability to complete a task and receive a payment for it. In reality, this is not a very secure way of earning, as circumstances such as pay cuts, job loss or illness can derail expected income.

One solution to this problem is to create a passive income source that pays you repeatedly without your continued personal effort. As your earning potential is not completely dependent on your time, it is easier to make more money to supplement your regular pay cheque and channel excess money to invest in long-term goals.

Passive income is vital for attaining true financial freedom. The ability to earn from additional sources can allow you to decide when and where to work, and to spend more quality time with your family or in other pursuits. The ultimate benefit of passive profits is to supply retirement income that will continue to fund your lifestyle when you choose to stop working.

Learning about leverage

Last week we looked at ways of earning residual income by focusing on creating and selling items that people will want to purchase repeatedly, or investing in assets that will supply continuous income. Today, let’s consider how to apply the concept of leverage to earn more money.

Throughout the ages, humans have progressed by using inventions to make it easier to carry out important tasks. One device that has transformed our lives is the simple machine called a lever. A lever works by placing an object on a turning point called a fulcrum, which then transforms a small work effort into a bigger force. Think of using a hammer to pry a nail out of a board, and you will understand the power of leverage.

Most of us have been taught about the value of hard work and personal diligence; and as Genesis 3:19 states: “by the sweat of your brow you will eat your food.” In today’s economy, unlike in our forefathers’ time, our individual effort will probably never be sufficient to meet our basic needs, much less to create wealth.

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In the same way that it can be used to move a substantial object with little physical exertion, leverage can be applied to multiply the results from our work efforts. As one of the major deterrents to earning more is limited time, what if we could find a way to leverage other people’s time to increase our output and consequently our income?

Other People’s Time (OPT)

Leveraged income comes from working in conjunction with other people in order to improve your overall work effort and the resultant earnings. The idea is to multiply your personal input into a massive force that creates much more value than you can accomplish on your own. In fact, your employer uses leverage by hiring several persons with different capabilities to carry out all the business tasks.

Let’s use our previous example of earning extra money by mathematics tutoring. A linear income source (one which is solely dependent on personal effort) can be gained by setting up classes after work and teaching some students yourself. If you produce and market a math-training DVD, then you can earn residual income. If you hire other persons to tutor additional classes, then you will be utilising leveraged income.

Here’s another example of leveraging other people’s time. On the weekends, you can earn JMD$2,000 each time you mow a lawn in your community. However, you can only service two properties each day. You decide to buy two more lawnmowers and pay two persons JMD$1,500 for each lawn they cut, but you still charge your customers JMD$2,000. With leveraging, instead of making JMD$8,000 over two days, you now have total earnings of JMD$12,000 with the same amount of effort on your part.

Apart from hiring people to increase your work effort, you can reward persons who sell your products and services. In our math tutor example, increased sales can be made by offering commissions to persons who market both the DVDs and the classes. This strategy, called affiliate marketing, can be a more effective method of increasing revenue as against traditional advertising.

For entrepreneurs, franchising a business is the ultimate form of leveraged income. By allowing other persons to purchase the rights to use your business model and earn their own income, you can exponentially increase sales of your products and/or services.

Next week we will look at a method of creating passive earnings that combines the concepts of residual and leveraged income.

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, June 3, 2010

How to Work Less and Earn More

With some amount of trepidation, you decide that you’re finally going to get a grip on your budget. Armed with months of bills and receipts, you painstakingly recreate an outline of your spending plan for the year. After adding up all your expenses, you’re shocked to see that the total monthly income needed to finance your lifestyle is way in excess of your current earnings.

“That explains why I’m so dependent on my credit cards every month,” you mutter to yourself. “I’ve got to reduce these expenses if I’m ever going to get out of debt.”

Determined to cut back all unnecessary costs from your overblown budget, you examine each expense category for items that you can do without. Unfortunately, your search reveals that you already exist on the basics - any reduction will only lead to deprivation for you and your family.

Frustrated by your budget-trimming attempts, you decide to take a hard look at the income side. “My salary is just not enough,” you admit. “What I need is a way to make some more money.”

As you rack your brain for ideas to fill the earnings gap, you realise that every option you think of requires a lot of time to be accomplished. You work nine to ten hours on the job, your commute takes up another two hours, and the children’s activities consume the rest of your day. How on earth are you going to find the time to make more money?

Working by time limits your income

The need to earn extra income is a common concern for most people. Whether you require additional income to balance your budget, reduce your debt, save for goals, invest for retirement, or live a more relaxed lifestyle, the challenge is usually the same - how can you work more when you’re already so busy?

One solution to this problem is to try to earn a higher rate from the hours you are already working. However, in today’s tight economy it’s practically impossible for most employees to get a pay raise, much less switch jobs to receive a better income. Many self-employed people also struggle to increase revenue, for although they can theoretically work harder and earn more, they are bound by time constraints and their physical limitations.

Need ideas to create more money? CLICK HERE!

The underlying issue that all employees and many self-employed persons face is that they earn income by trading their time for dollars. So the effort they put out for a day earns money only once; to make more money they have to repeat the work activity. If they reduce or stop working, then the income is negatively affected. This form of earning is called linear income.

Earning repeat income is possible

The only way to sustainably earn more in the 24 hours available in a day is to create an income stream that is not dependent on your personal, direct efforts to produce money. Money that you earn without physically working for it is called passive income. Creating a passive earning source will usually require a lot of hard work initially, but the satisfying end result will be a system that continues to earn while you sleep.

One way to earn money passively is to create a residual income source. Residual income simply means that once you have worked on a project, it continues to pay you over and over again. To generate this type of money, you have to create some item that people will want to purchase repeatedly, or invest in an asset that will continually supply an income.

Here’s the difference between creating linear income where you physically work to get paid and focusing on residual income. Let’s say you have a talent for teaching mathematics and wanted to earn income part-time. You could choose to set up tutoring sessions after work and earn an hourly rate, or you could create several training CDs or DVDs and sell them through stores and schools.

In the first scenario, your initial effort will reap quick rewards as your students pay you immediately. However, it is difficult to increase your income this way, as you can only physically teach a limited number of people. In the second option, you may work for a long time creating the material without seeing any returns, but once the project is completed you could reap lifetime earnings.

Other examples of linear income versus residual income are: a musician who gets paid for doing live shows and one who produces an album that can be sold repeatedly; an artist who designs one painting for sale and one who uses a piece of artwork to make hundreds of T-shirts or postcards; a doctor who treats chronically ill patients every day or one who creates and markets a natural remedy to relieve their symptoms.

If you are looking for a means to earn extra income, try to use your talents to create an asset that can pay you repeatedly. Next week we will continue to look at other ways to generate passive income.

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, May 27, 2010

Mistakes, Miscalculations and Memories about Money

As I reflect on all that’s happened in my journey to financial freedom over the past nine years, I realise that most of the important lessons that I have learned have come from some major mistake or miscalculation on my part.

Today, I’m not afraid to share with my clients, readers and audiences some of the stupid things that I’ve done around money (some of which leave me wondering, “What on earth were you thinking, Cherryl”?) I know that my openness to admit my financial mess-ups will give them the freedom to know that they too can learn and rebound from their own money mistakes.

Although making mistakes can have consequences that are often painful to deal with, don’t be ashamed of your financial past – what’s done is done. The important thing is to understand where you went wrong, make amends if necessary, and resolve to do the Financially Smart thing in the future.

Looking forward to sharing more of my mistakes, miscalculations and memories in my upcoming book, The 3Ms of Money!

Are You Tired of Being in Debt?

“It’s the same story every month. I promise myself that I’m going to make a big dent in my credit card bill, yet within two weeks after payday, I’m forced to swipe the card to buy groceries. This month the car required major repairs and I just didn’t have the money to deal with it. It took me a long time to pay down $40,000JMD off my debt, but it disappeared in an instant after purchasing car parts. I’m sick and tired of owing this money; I feel like all I do is work hard to pay interest to the bank. When am I ever going to get rid of this debt?”

This heartfelt cry of a client who is stuck in a debt quicksand could easily have been echoed by thousands of concerned consumers who are similarly mired in a vicious cycle of borrowing to survive. Despite their strong desire to pay off their obligations, their financial reality makes it challenging to break free of the chains of debt.

The high level of consumer debt is one of the most pervasive economic problems in Jamaica today. It’s a problem that faces high-income professionals and lower-income labourers, retirees and recent graduates alike; our propensity for borrowing cuts across all levels of the society.

Although many people are fed up with their debt situation, they are even more frustrated because they can’t figure out how to get out of it. The first step in creating a debt reduction plan is to determine the reasons why it was necessary to borrow in the first place.

Debt by Deficit

With the rising cost of living and stagnating income levels, most consumers are simply not earning enough to meet their spending requirements. When faced with budget shortfalls, many people immediately think, “I need to borrow some money.” While having access to a quick loan might be seen as the answer to their deficit, this process actually creates a dependency on debt that is hard to break.

Let’s say you need an extra $1,000JMD to pay your bills. Since it’s such a small amount, you choose to borrow this money from a friend, and you think that your problem is solved. Since you haven’t addressed the underlying reason for your shortfall, next month your budget is still out by $1,000JMD. However, now your shortfall is even greater, as you have to find another $1,000JMD to repay your loan.

You decide to borrow once again to pay the $2,000JMD that is not covered by your earnings. However, in the following month, your shortfall actually increases to $3,000JMD. This cycle will continue until you are unable to access any more credit and most of your income is being channelled into loan repayments. At this point, getting out of debt is an extremely difficult, but not impossible task.

Need help with getting out of debt? CLICK HERE!

Debt by Desire

While some persons are crippled by insufficient income, others get trapped by trying to attain lifestyles that are way above their means. Many consumers have got lost in a maze of debt because of their desire for the finer things in life and their inability to wait for the natural course of time to acquire them.

Their attitude is that once they can afford to make the monthly payments, then they have no problem in using the convenience of credit to maintain an inflated standard of living.

Eventually they become addicted to debt, and as Proverbs 22:7 states, “…the borrower is a servant to the lender.”

You should realise that the interest you pay to the financial institutions is really your potential wealth being transferred over to them. To fully grasp how much you have sacrificed for your debt habit, run a tally of the interest you have paid on credit cards, payroll advances and hire purchase loans over the years, and think of the assets that you could have bought with this money.

Debt by Default

Sometimes, unforeseen situations will leave people with no other option but to borrow money. Job losses, medical emergencies, natural disasters or even death can force even the most disciplined spender to turn to debt to survive.

One of the main reasons why financial advisors always encourage persons to focus on saving early in life is to build up an emergency fund that will give them the ability to deal with life’s unpleasant eventualities.

Whatever the root cause of your indebtedness, you have to try to regain a balance in your budget by becoming aware of your expenses and making adjustments to your spending habits in order to stay within your income. If you have cut back on costs as much as possible and you still require more money to meet your basic needs, then the only answer is to look for ways to earn more.

This is where the challenge lies for many persons, as they find it difficult to think of practical ideas to create extra income. Look out for future columns which will offer simple ways to increase your earnings.

Copyright © 2010 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, May 13, 2010

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