A brief guide to cybersecurity basics

Last Monday, I got an email from Spotify saying that somebody in Brazil had logged into my account.

I checked. Sure enough: A stranger was using my Spotify to listen to Michael Jackson. I told Spotify to “sign me out everywhere” — but I didn’t change my password.

On Wednesday, it happened again. At 2 a.m., I got another email from Spotify. This time, my sneaky Brazilian friend was listening to Prince. And they apparently liked the looks of one of my playlists (“Funk Is Its Own Reward”), because they’d been listening to that too.

I signed out everywhere again, and this time I changed my password. And I made a resolution.

You see, I’ve done a poor job of implementing modern online security measures. Yes, I have my critical financial accounts locked down with two-factor authentification, etc., but mostly I’m sloppy when it comes to cybersecurity.

For example, I re-use passwords. I still use passwords from thirty years ago for low-security situations (such as signing up for a wine club or a business loyalty program). And while I’ve begun creating strong (yet easy to remember) passwords for more important accounts, these passwords all follow a pattern and they’re not randomized. Worst of all, I maintain a 20-year-old plain text document in which I store all of my sensitive personal information.

This is dumb. Dumb dumb dumb dumb dumb.

I know it’s dumb, but I’ve never bothered to make changes — until now. Now, for a variety of reasons, I feel like it’s time for me to make my digital life a little more secure. I spent several hours over the weekend locking things down. Here’s how.

A Brief Guide to Cybersecurity

Co-incidentally, the very same day that my Spotify account was being used to stream Prince’s greatest hits in Brazil, a Reddit user named /u/ACheetoBandito posted a guide to cybersecurity in /r/fatFIRE. How convenient!

“Cybersecurity is a critical component of financial security, but rarely discussed in personal finance circles,” /u/ACheetoBandito wrote. “Note that cybersecurity practitioners disagree over best practices for personal cybersecurity. This is my perspective, as I have some expertise in the area.”

I won’t reproduce the entire post here — you should definitely go read it, if this subject is important to you — but I will list the bullet-point summary along with some of my own thoughts. Our orange-fingered friend recommends that anyone concerned about cybersecurity take the following steps:

1. Get at least two hardware-based security keys. My pal Robert Farrington (from The College Investor) uses the YubiKey. Google offers its Titan Security Key. (I ordered the YubiKey 5c nano because of its minimal form factor.)
2. Set up a secret private email account. Your private email address should not be linked in any way to your public email, and the address should be given to no one. (I already have many public email accounts, but I didn’t have a private address. I do now.)
3. Turn on Advanced Protection for both your public and private gmail accounts. Advanced Protection is a free security add-on from Google. Link this to the security keys you acquired in step one. (I haven’t set this up because my security keys won’t arrive until this afternoon.)
4. Set up a password manager. Which password manager you choose is up to you. The key is to pick one that you’ll use. It’s best if this app supports your new security keys for authentification. (I’ll cover a few options in the next section of this article.)
5. Generate new passwords for all accounts. Manually create memorable passwords for your email addresses, your computers (and mobile devices), and for the password manager itself. All other passwords should be strong passwords generated randomly by the password manager.
6. Associate critical accounts with your new private email address. This will include financial accounts, such as your banks, brokerages, and credit cards. But it could include other accounts too. (I’ll use my private email address for core services related to this website, for instance.)
7. Turn on added security measures for all accounts. Available features will vary from provider to provider, but generally speaking you should be able to activate two-factor authentification (with the security keys, whenever possible) and login alerts.
8. Turn on text/email alerts for financial accounts. You may also want to turn on alerts for changes to your credit score and/or credit report.
9. Activate security measures on your mobile devices. Your phone should be locked by a strong authorization measure. And each of your individual financial apps should be locked down with a password and any other possible security measures.

/u/ACheetoBandito recommends some additional, optional security measures. (And that entire Reddit discussion thread is filled with great security tips.)

You might want to freeze your credit (although, if you do, remember that you’ll occasionally need to un-freeze your credit to make financial transactions). Some folks will want to encrypt their phones and hard drives. And if you’re very concerned about security, purchase a cheap Chromebook and use this as the only device on which you perform financial transactions. (Believe it or not, I’m taking this last optional step. It makes sense to me — and it may be a chance for me to move beyond Quicken.)

Exploring the Best Password Managers

Okay, great! I’ve ordered a new $150 Chromebook and two hardware-based security keys. I’ve set up a brand-new, top-secret email address, which I’ll connect to any account that needs added security. But I still haven’t tackled the weakest point in the process: my text document filled with passwords.

Part of the problem is complacency. My system is simple and I like it. But another part of the problem is analysis paralysis. There are a lot of password managers out there, and I have no idea how to differentiate between them, to figure out which one is right for me and my needs.

For help, I asked my Facebook friends to list the best password managers. I downloaded and installed each of their suggestions, then I jotted down some initial impressions.

• LastPass: 16 votes (2 from tech nerds) — LastPass was by far the most popular password manager among my Facebook friends. People love it. I installed it and poked around, and it seems…okay. The interface is a little clunky and the feature set seems adequate (but not robust). The app uses the easy-to-understand “vault” metaphor, which I like. LastPass is free (with premium options available for added cost).
• 1Password: 7 votes (4 from tech nerds) — This app has similar features to Bitwarden or LastPass. The interface is nice enough, and it seems to provide security alerts. 1Password costs $36/year.
• Bitwarden: 4 votes (2 from tech nerds) — Bitwarden has a simple, easy-to-understand interface. It uses the same “vault” metaphor that products like LastPass and 1Password use. It’s a strong contender to become the tool I use. Bitwarden is free. For $10 per year, you can add premium security features.
• KeePass: 2 votes — KeePass is a free Open Source password manager. There are KeePass installs available for all major computer and mobile operating systems. If you’re a Linux nut (or an Open Source advocate), this might be a good choice. I don’t like its limited functionality and its terrible interface. KeePass is free.
• Dashlane: 2 votes — Of all the password managers I looked at, Dashlane has the nicest interface and the most features. Like many of these tools, it uses the “vault” metaphor, but it allows you to store more things in this vault than other tools do. (You can store ID info — driver license, passport — for instance. There’s also a spot to store receipts.) Dashlane has a free basic option but most folks will want the $60/year premium option. (There’s also a $120/year option that includes credit monitoring and ID theft insurance.)
• Blur: 1 vote — Blur is different than most password managers. It quite literally tries to blur your online identity. It prevents web browsers from tracking you, masks email addresses and credit cards and phone numbers, and (or course) manages passwords. I want some features that Blur doesn’t have — and don’t want some of the features it does have. Blur costs a minimum of $39/year but that price can become much higher.
• Apple Keychain: 1 vote — Keychain has been Apple’s built-in password manager since 1999. As such, it’s freely available on Apple devices. Most Mac and iOS folks use Keychain without even realizing it. It’s not really robust enough to do anything other than store passwords, so I didn’t give it serious consideration. Keychain is free and comes installed on Apple products.

Let me be clear: I made only a cursory examination of these password managers. I didn’t dive deep. If I tried to compare every feature of every password manager, I’d never choose. I’d get locked into analysis paralysis again. So, I gave each a quick once-over and made a decision based on gut and intuition.

Of these tools, two stood out: Bitwarden and Dashlane. Both sport nice interfaces and plenty of features. Both tools offer free versions, but I’d want to upgrade to a paid premium plan in order to gain access to two-factor authentification (using my new hardware security keys) and security monitoring. This is where Bitwarden has a big advantage. It’s only $10 per year. To get the same features, Dashlane is $60/year.

But here’s the thing.

I started actually using both of these tools at the same time, entering my website passwords one by one. I stopped after entering ten sites into each. It was clear that I vastly preferred using Dashlane to Bitwarden. It just works in a way that makes sense to me. (Your experience might be different.) So, for a little while at least, I’m going to use Dashlane as my password manager.

The Problem with Passwords

My primary motive for using a password manager is to get my sensitive information out of a plain text document and into something more secure. But I have a secondary motive: I want to improve the strength of my passwords.

When I started using the internet — back in the 1980s, before the advent of the World Wide Web — I didn’t spare a thought for password strength. The first password I created (in 1989) was simply the name of my friend who let me use his computer to access the local Bulletin Board Systems. I used that password for years on everything from email accounts to bank sites. I still consider it my “low security” password for things that aren’t critical.

I have maybe eight or ten passwords like this: short, simple passwords that I’ve used in dozens of locations. For the past five years, I’ve tried to move to unique passwords for each site, passwords that follow a pattern. While these are an improvement, they’re still not great. Like I say, they follow a pattern. And while they contain letters, numbers, and symbols, they’re all relatively short.

As you might expect, my sloppy password protocol has created something of a security nightmare. Here’s a screenshot from the Google Password Checkup tool for one of my accounts.

I get similar results for all of my Google accounts. Yikes.

Plus, there’s the problem of account sharing.

Kim and I share a Netflix account. And an Amazon account. And a Hulu account. And an iTunes account. In fact, we probably share twenty or thirty accounts. She and I use the same easy-to-remember password for all of these sign-ins. While none of these accounts are super sensitive, what we’re doing is still a poor idea.

So, I want to begin moving toward more secure passwords — even for the accounts I share with Kim.

The good news is that most password managers — including Dashlane — will auto-generate randomized passwords for you. Or I could try something similar to the idea suggested in this XKCD comic:

The trouble, of course, is that each place has different requirements for passwords. Some require numbers. Some require symbols. Some say no symbols. And so on. I don’t know of any sites that would let me use four random common words for a password!

For now, I’m going to take a three-pronged approach:

• I’ll manually create long (but memorable) passwords for my most critical accounts. This is the XKCD method.
• For the accounts I share with Kim — Netflix, etcetera — I’ll create new, memorable passwords that follow a pattern.
• For everything else, I’ll let my password manager generate random passwords.

This seems like a good balance between usability and security. Every password will be different. Only the ones I share with Kim will be short; all others will be long. And most of my new passwords will be random gibberish.

Final Thoughts on Cybersecurity

In this short video from Tech Insider, a former National Security Agency security expert shares his top five tips for protecting yourself online.

You’ll note that these are similar to the Reddit cybersecurity guide I posted earlier in this article. Here are the steps he says to take to keep yourself safe:

• Enable two-factor authentification whenever possible.
• Don’t use the same password everywhere.
• Keep your operating system (and software) up to date.
• Be careful with what you post to social media.
• Do not share personal information unless you’re certain you’re dealing with a trusted company or person.

I won’t pretend that the steps I’m taking will protect me completely. But my new system is certainly an upgrade from what I’ve been doing for the past 20+ years — which was, as I’ve mentioned, dumb dumb dumb.

And I have to confess: I like the idea of restricting my online financial life to one computer — the new $150 Chromebook. I’m not sure if this is actually doable, but I’m going to give it a go. If this works, then I may see if I can find a money-management tool that I like for the machine. Maybe then I can finally leave Quicken 2007 for Mac behind!

What have I missed? What steps have you taken to protect your online accounts? Which do you feel is the best password manager? How do you create memorable, secure passwords? How do you handle shared accounts? Help other GRS readers — and me! — develop better online security practices.

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Passive income ideas you can try today

Earlier this week, J.D. wrote about what he calls the biggest truth in personal finance: You can’t get rich through frugality alone. As Liz at Frugalwoods says, “You can’t frugalize income you don’t earn.” Income is one-half the fundamental personal-finance equation, and it’s probably the most important half.

J.D. advocates a three-pronged attack for boosting income: becoming better educated, becoming a more valuable worker, and learning to negotiate salary. But I think he’s missing a fourth important income source: the proverbial “passive income”.

I know, I know. Passive income has a bad reputation. Actually, passive income has a terrible reputation. And deservedly so. The Land of Passive Income is populated by scammers, hucksters, and charlatans. “Hey, little boy, wanna buy my course?” (Sorry, no links. They’re easy enough to find without us helping them.) That’s too bad because legit sources of passive income can be a great way to make more money.

What is Passive Income?

First up, let’s be clear: Actual passive “passive income” (as pitched by the scammers) is a lie. It doesn’t exist. When we talk about passive income, we’re talking about ways to make minimal money with minimal effort. Does that make sense? And it’s a supplement to your main income, not the primary source.

To me, passive income is money that’s earned, usually on a recurring basis, without a significant time investment.

For example, if you own a rental property that brings in $1500 each month, but only requires two or three hours of time to manage, that’s (mostly) passive income. Most nine-to-five jobs are the opposite of this. The income you earn is tied closely to the amount of time you spend at the office.

That’s not to say that passive income doesn’t require effort, though.

Often, there’s a lot of upfront work required before income can become passive. Using the same rental property example, before you can make any money, you have to purchase and renovate the property, and spend time advertising and interviewing potential tenants. All of that takes time and money.

Or, take J.D.’s book as an example. When I asked, he told me that he spent four months working full-time in 2009 and 2010 to write Your Money: The Missing Manual. That’s not passive! But he hasn’t touched the thing since then, and he continues to receive $50 checks every month. That is passive.

Passive Income Ideas You Can Try Today

Some degree of passive income is possible — and without shyster shenanigans. In this article, I’ve compiled 40 passive income ideas for you to consider. Not all of these passive income ideas will be right for you. In fact, maybe none of them will fit you. That’s okay. But I’m willing to bet that many GRS readers will find at least one source of inspiration here that they can use to help increase their income…even if it’s only a few dollars per month.

Pay Down Your Debt

Debt reduction isn’t the first thing that comes to mind for most people when they’re looking for ways to increase their income. But it should be.

Monthly payments on anything from high interest credit cards to expensive car loans can be a real drain on your bottom line. Sometimes the easiest way to improve cash flow is not to make more money, but to lower your expenses.

I recommend that you start by totalling up your debt, and then look for ways to pay it down more quickly. Depending on your situation, you might consider combining everything into one manageable payment, by taking out a consolidation loan. If you do have a large car loan payment, and are feeling stuck, you might be better off in the long run cutting your losses, and downgrading to a more modest vehicle.

(Need more help? Here’s our guide on how to get out of debt.)

Invest in a High Interest Savings Account

There’s no longer an excuse to have your cash sitting in a checking or savings account not accruing interest. These days, you can find a ton of online savings accounts offering a solid yield. Everything about this income is passive. In most cases, you can open an account within minutes from the comfort of your living room, have your funds transferred in, and start earning interest on your cash savings almost immediately. You won’t get rich with a savings account, but it’s a great way to get your emergency fund working for you. Here’s a list of some of the top savings accounts available today. Remember that rates are subject to change:

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Invest in Certificates of Deposit

If you are interested in earning a higher yield on your money than a savings account will offer, without the volatility that comes with stock market investing, a Certificate of Deposit (CD) can be a nice alternative that will earn passive income. CDs are commonly offered by banks and credit unions, and allow you to invest your money for a fixed time period, from just a few days to several years. Typically, the longer you lock in your money, the higher the return. CD yields should keep pace with inflation, with the downside being that you don’t have access to your funds on a day-to-day basis. What they do give you is a source of passive income without the risk.

Earn Income in a Checking Account

Checking accounts are not known to be a place where you can earn income, that’s what savings accounts and other investments are for. But these days, there are a growing number of checking accounts that will pay you a tiny percentage yield on your balance. While it may only be a couple of dollars here or there, it can help to negate some of the other fees you might incur on your account.

Robo-Advisor Investing

AI technology has reduced the amount of effort required to do so many things, including investing. You no longer need to meet face to face with an investment advisor to build a suitable investment portfolio.

Nowadays, you can sign up with a robo-advisor like M1 Finance or Acorns, and have a customized portfolio ready in minutes. From there, you’re on your way to building passive investment income. Of course, you’ll need to provide your robo-advisor with the pertinent details, such as your investment objective, risk tolerance, and investment time frame, but from there, your money will be invested in a hands off, low fee ETF portfolio that is automatically rebalanced on a regular basis.

Invest in Dividend Stocks

One of the ways publicly traded companies return value to their shareholders is in the form of dividends. One of the best ways to create passive income is by buying stocks that have a history of paying dividends. As the value of your investment grows, your dividend will also grow, creating a steady source of passive income.

If you stick with it long enough, you may earn enough to live off of the dividend income, while leaving your capital to appreciate in value as share prices rise. The combination of dividends and capital gains makes for a great 1-2 punch of passive income. With most discount brokerages like E-Trade and Charles Schwab now offering free stock trades, investing in the stock market has never been more affordable.

And here’s our introduction to dividend reinvestment plans.

Invest in a REIT

Real Estate Investment Trusts (REITs) are an easy and affordable way to invest in a well diversified real estate investment portfolio. The income from a REIT is even more passive than owning a rental property, because you don’t have the upfront work of finding tenants, not to mention the ongoing maintenance. A REIT is similar to a mutual fund, in that you purchase units of a REIT. Income comes in the form of profit earned by the REIT. Companies like Fundrise have made REIT investing even easier with their crowdsourcing approach, allowing you to get started for as little as $500.

Invest in artwork 

This has got to be one of the more unique passive income opportunities on this list, and it really is passive. For centuries, the world’s most exclusive artwork has only been available to the wealthiest segment of society. But that is changing, with the help of companies like Masterworks. They source paintings by top performing artists, then issue a circular with the Securities Exchange Commission (SEC) to offer it to the public. Once this happens, you can purchase fractional shares of the painting, in essence owning a tiny piece of valuable artwork. Over time, when the artwork has appreciated in value, it is sold at a profit, with each individual investor receiving a percentage of the proceeds. One thing to keep in mind with this type of  investment is that it is purely speculative, and relatively illiquid. In other words, you must be willing to part with your entire investment. 

Peer-to-Peer Lending

Peer-to-peer lending, otherwise known as P2P lending, is an online platform that matches lenders and borrowers. Here’s how it works. Individuals, or in the case of a lender like Worthy, small businesses, borrow money from hundreds, even thousands of individual lenders, who have pooled their money together. Once the borrower repays their loan in full, the lender gets their principal investment back, along with interest. Because they lack the high overhead of traditional brick and mortar lenders, peer-to-peer lending companies are able to issue loans at lower interest rates, while providing better than average returns for investors. Here are a few of the more well known P2P lending companies:

Peer-to-Peer Lenders

• Lending Club
• Street Shares
• Worthy

Use a Rewards Credit Card

One of my favorite ways to make passive income is by using a rewards credit card. Every month, I run the majority of my spending through my travel credit card, which in turn earns points that I can use to pay for flights, hotels, car rentals, you name it. The card also comes with private airport lounge access, and a full suite of complimentary travel insurance.

Of course, credit card points will only benefit you if you are able to pay off the balance in full every month. If not, the interest you’ll pay will far exceed any points you’ll earn towards free travel or cash back. If you don’t already have a travel rewards credit card, or aren’t happy with yours, check out our handy travel credit card comparison tool.

Buy Vending Machines

Vending machines have been around forever, and they remain a tried and true way to earn passive income. You’ll need to check on your machines regularly and keep them filled with product, but otherwise there’s little to no work involved in the day-to-day operation. If you can find the perfect locations for your machines, it’s like having your own personal ATM. Vending machines can vary from a simple gumball dispenser, to a snack or soda machine.

Rent Your Space

If you have a spare room in your home, or an entire house you can make available to guests, you can earn passive income by renting out your space through sites like AirBnb and VRBO. This is a great way to get your property working for you, and for the most part, the income is passive. You don’t even have to worry about marketing, as the sites you list on will bring your customers to you. Your job is to decide when and how often you want to list, and that the space is clean and ready to accept guests.

Buy a Rental Property

There are a number of ways you can create passive income with real estate, one of them being to own a rental property. Often, the lowest barrier to entry is to keep your existing home as a rental when you move. Not everything about owning a rental property is passive, mind you. You’ll need to look after any required maintenance, and of course, screening potential tenants takes time. But if you can find a solid tenant for your rental, you should be able to sit back and watch the money roll in.

Here’s our guide to getting started with real estate investing.

Purchase a Self-Storage Facility

With the industry now approaching $40B, self-storage facilities have become a massive business in the US. While there is a large upfront investment required, if you have the resources, building or buying a self-storage facility can be a great way to earn passive income. The revenue is recurring as well, with most customers renting units on a monthly or annual basis.

Display Ads on Your Car

Did you know? There are companies that will pay you to wrap your car in advertising. If you don’t mind driving a billboard on wheels, Wrapify will pay you upwards of $100/week to display advertising on your car. The amount of passive income you’ll make will depend on how far you drive, and where you live. By connecting to an app on your mobile device, Wrapify can track your mileage as you drive.

Rent Out Your Car

The sharing economy has brought about plenty of side hustles that make it possible to earn money by letting others use your stuff. Take your car for example. If you have a late-model vehicle sitting in your driveway for hours at a time, you can make some extra cash by renting it out on an app like Turo.

Turo connects vehicle owners with people who need a car to drive, and are looking to avoid the high prices that car rental agencies charge. The nicer your car, the more money you can charge. The best part is that Turo does most of the heavy lifting, by bringing customers to you, and managing the payment and insurance component of the transaction.

Rent Out Your RV

Owning a motorhome is enough to stretch most people’s budget, but thanks to companies like Outdoorsy and RVShare, you now have the option of renting out your RV when it’s not in use. They connect you with renters via a mobile app, and you get to set the price, and the time period when your RV will be available. With an average rate of around $200/day, you could even make enough money to pay for your own RV adventures.

Rent Out Your Boat

If you own a nice boat, you can list it on sites like Boatsetter, and rent it out to someone who will use it for fishing, sailing, or watersports with friends. Depending on how passive you want this to be, you can choose to captain the boat, or leave it for your guests to manage on their own. Like RVs, boats are a luxury item that don’t often get used, making this an ideal passive income source. I ran a couple of searches on Boatsetter and GetMyBoat, and found rates in excess of $1000 for a full day.

Rent Out Your Stuff

We’ve covered cars, RVs, and boats, but the list of things you can rent out doesn’t end there. You can list cameras, tools, even sports equipment on a site like Peer Renters, and make money by renting them out to people who perhaps can’t afford to purchase the items outright, or just have a limited use for the item.

Sell Handcrafted Goods on Etsy

If you are crafty, you can sell your creations on Etsy, a massive online marketplace for handcrafted goods. Depending on the amount of labor involved in making your product, this might be a less passive form of income, but Etsy allows you to expand your reach beyond local craft shows. Whether it’s handcrafted jewellery, clothing, soap, or kids toys, Etsy places your creations in front of a global audience.

The former Mrs. Money Mustache uses Etsy to earn extra income.

Design and Sell T-shirts Online

Through marketplaces like Merch by Amazon, you can make your own t-shirt designs and sell them online. What makes this a great side hustle is that there is little to no upfront cost. You simply upload your designs, and Amazon fulfills your orders on-demand, including shipping. You earn a royalty for every shirt that’s ordered. All you need to do is come up with a great design that will sell.

Dave from Accidental FIRE designs and sells t-shirts online. (J.D. says he wants a few of these!)

Become a Rideshare Driver

If you have a decent car, enjoy driving, and don’t mind interacting with people, you can make decent money by driving for a rideshare company like Uber, or Lyft. One nice thing about this side hustle, is the flexibility. You choose when and how often you want to work. Of course, this income source isn’t purely passive. You’ll need to trade your time to make money. That said, there are plenty of jobs out there that are a lot more labor intensive than chatting with customers as you shuttle them around town.

Last year, our pal Josh Overmyer shared the pros and cons of becoming a rideshare driver here at GRS.

Get Paid to Shop Online

Websites like Rakuten (formerly Ebates) pay you to shop online. When you shop at your favorite retailers directly from the Rakuten website, you’ll earn up to 20% cash back, which is paid to you via a monthly check or PayPal. You can also redeem your rewards for gift cards to your favorite stores. Sign up for Rakuten, and start earning passive income while you shop.

Complete Online Surveys

Let’s be clear, no one will ever get rich by taking online surveys. In fact, there are a lot of scams out there that are nothing more than a complete waste of time. But if you have some time on your hands, and you just want to make a few extra bucks, online surveys can help. You can complete surveys while doing other things, like watching TV, or riding on the bus. Survey Junkie and Swagbucks are two of the more reputable sites out there.

J.D.’s girlfriend has tried online surveys. Her verdict? They’re fun and you can make some extra money while watching TV, but you won’t get rich with them.

Earn Songwriting Royalties

If you love to write music, you can create passive income by recording your songs and then publishing them through a variety of channels. You earn royalties anytime your music is played on streaming services like Apple Music, or Spotify, or played on the radio. You can even license your music for TV, movies, and videos without the backing of a major record label. Companies like Tunecore and CDBaby work with independent artists by publishing their music worldwide, then collecting and paying out any royalties that are due. This is a great passive income stream that can last for many years.

Purchase Music Royalties

Perhaps your talent isn’t to write music. That’s ok, you can still get into the music royalty game by purchasing the rights to song catalogues owned by other artists. Royalty Exchange is an online auction that allows you to bid on existing music catalogues. These are songs that are already earning regular, passive income for their current owners. When you purchase music royalties, you’re buying the future cash flow, which is purely passive income.

Photo Licensing

Photographers can build passive income by selling stock photos online. You’ll need to produce lots of content to earn a decent amount of money, but it can be a nice supplement to other, more labor intensive work, like wedding or family photography. One benefit to stock photo licensing is that you can sell the same pictures to many different buyers. There are no shortage of stock photo websites where you can sell your work. Dreamstime and Snapwire are just two of the more popular stock photo sites out there.

Record an Audiobook

One of the best ways for content creators to increase their income is by releasing their content in as many formats as possible. For example, if you’ve written a paperback book, or even an ebook, you’ll want to consider recording an audiobook version. There are no shortage of people who prefer listening to books instead of reading them. You can record the audio yourself, or pay someone else to do it for you. Once your audiobook is ready to go, it can be available for purchase online for years, making it the ideal passive income source.

Sign up for Sleep Studies

To some, this may seem like the dream way to earn passive income, no pun intended. Sleep researchers need test subjects for their studies, and it’s a gig that can pay very well. That said, it’s not as easy as it may sound. Often, participants are required to put on hold many of their daily routines ie. social media, extracurricular activities. If this is something you think you’d like to do in the name of science, you can begin by searching this government website for available opportunities.

Sell Your Data

I’m personally not a fan of this passive income idea, because I value my privacy, but there are companies that will pay you to share your smartphone data with them. For it to work, you need to install an app on your phone that records your activity throughout the week. The money isn’t great, $5 or $10/month, but if you’re open to this kind of thing, it certainly qualifies as passive income.

Buy an Existing Website

If you prefer to start earning passive income instantly, you may want to consider purchasing an existing website or blog that’s already generating cash flow. This is a great way to get involved in an online business without having to build it from scratch. There are thousands of websites available for sale through online marketplaces like Flippa, and in many cases, these businesses are already producing a positive cashflow every month.

Of course, the more income they’re producing, the higher the purchase price. On average, you can expect to pay a 2-3X multiple on the annual income earned by the website. Also, it’s important that you do your research before you buy. Make sure the monthly income is stable, and that the potential is there for continued growth. Also, I recommend sticking with a niche that you understand, and have some expertise or prior knowledge of.

Buy and Sell Domain Names

Buying and selling domain names is a bit like trading on the stock market. The goal is to buy low, and sell high, but there can be some risk involved. There are people who earn good money buying domain names that they believe will increase in value over time, with the hopes of selling at a profit. If this sounds like a passive income strategy you’d be interested in trying, here are some tips on selling domain names for profit.

Of course, you could always be like J.D., who owns dozens of domains that he’ll never use. Silly man.

Start a Blog

Whenever I write about blogging as a way of making money, it’s usually good for a few raised eyebrows. It seems everyone is starting a blog, hoping to make money. Can it be done? Absolutely, but you need to be willing to play the long game.

Over time, it’s possible to create multiple passive income streams with a blog, through affiliate marketing, or display advertising, for example. But building a blog from scratch is anything but passive. You’ll need to be consistent in creating new content, and spend time promoting your blog. One of the best things about blogging is the low barrier of entry. If you have a computer and a wifi connection, you can get started for as little as a few dollars per month.

But maintain realistic expectations. Even this website doesn’t produce a full-time income at the moment!

Start a Podcast

It seems everyone has a podcast these days, and while many people do it out of pure enjoyment, there’s a lot of money that can be made. As you build a reliable following, you can begin selling advertising via sponsorships to brands that wish to get in front of your audience. Make no mistake, there’s a lot of work involved in finding guests and conducting interviews, but the opportunity to build a passive income stream is there. One way to reduce your workload is by outsourcing tasks to writers, podcast editors, and graphic designers.

Start a YouTube Channel

If you can consistently create videos that people want to watch, you can build an audience on Youtube. This is important, because with an audience, you can begin to make money, by joining the YouTube Partner Program. Most of your earnings will come from ads, which are aired within your video content, however, there are more ways to make money. YouTube can also drive traffic to your website and social media channels, making the passive income opportunities endless.

Sell Digital Products/Downloadables

Thousands of people earn passive income by creating digital products that people can download and use. From spreadsheets to productivity tools, calendars and checklists, the possibilities are endless. Once you’ve created your winning product, you can make it available for download on your own website, or through a third party platform like Gumroad.

Develop an Online Course

If you have expertise in a specific area, rest assured there’s someone out there willing to pay you for your knowledge. You can create an ebook on the topic, or develop an online course, and then sell it on your own website, or on an online learning marketplace like Udemy. No skill is too small to share with others. You could sell a course on creating a killer resume, starting a podcast, or how to travel hack a trip to Europe. With online courses, most of the hard work happens early on, when you’re creating the content. From there, with an effective marketing strategy, you’ll have yourself a nice, passive income stream.

When J.D. created his Get Rich Slowly course in 2014, it took several months of full-time work. But when he was finished, he had a nice source of passive income.

Run Website Display Ads

If you have your own website, you can sign up to have ads displayed within the content on your site. The most well known ad service is Google Adsense. Adsense displays ads that are relevant to your site content and that match your visitors preferences. When guests engage with an ad, you make money. Also, the higher your site traffic, the higher your income. What I like about display ads is that it really is passive income. Once your ads are set up, there is no work involved, leaving you to focus on what you do best, which is run a great website.

Affiliate Marketing

If you have your own blog or website, one of the best ways to make passive income is through affiliate marketing. Affiliate marketing involves promoting someone else’s product or service, and earning a commission whenever a sale is generated directly from your recommendation. The most well known affiliate program may be the one run by online retail giant Amazon, but there are thousands of other companies with programs of their own. Affiliate income takes time to build, but if you’re successful, it can be one of the best ways to make passive income.

Dropshipping

Dropshipping is a form of e-commerce where the seller doesn’t hold the product, instead, it’s shipped to the customer directly from the supplier. The seller’s job is to find products to buy at a wholesale price, and then sell them at the retail price, by advertising them through an e-commerce store, like Shopify. When orders are placed, they go directly to the supplier who ships the product to the customer. The seller profits from the spread between the retail and wholesale price. Dropshipping has become very competitive, but if you can find a product that people want, and sell it at a profit, there’s lots of passive income to be made.

Learn to Outsource

If you’re an entrepreneur, chances are you have a tendency to want to control all aspects of your business. After all, no one else understands it like you do, nor is anyone else as invested as you are. But the problem with doing everything yourself is that the money you make becomes anything but passive.

Many business owners burnout simply because they’re not willing to outsource tasks to others. These days, it’s easy to hire a virtual assistant, or other freelancers who can perform a wide variety of tasks. This frees up time for you to focus on doing the things that only you can do. Upwork and Fiverr are good places to start looking for freelance talent.

Final Thoughts on Passive Income

Back in 2007, when this blog was young, J.D. reviewed Don Lancaster’s 1978 book, The Incredible Secret Money Machine, a book loved by J.D.’s father. (The book is now available as a free PDF from the author’s website.)

The book’s premise is simple: Create a series of “money machines” that generate a steady supply of “nickels”. Although the book is overtly about creating small, hobby businesses, it covertly embraces the “passive income” mentality. Lancaster urges readers to create lifestyle businesses that require minimal effort to maintain.

I hope this list of passive income ideas can act as a source of inspiration for some of you seeking to build your own money machines. You won’t get rich with any of these suggestions, but you could find a way to produce a stream of nickels to supplement your income. That’s not so bad, is it?

There’s no shortage of ways to make passive income. What’s interesting, is that most of the ideas I’ve come up with are things that you can do online, from the comfort of your home. Of course, it’s important to remember that passive doesn’t mean easy. There can be weeks, months, even years, of hard work that goes into building an income stream. And sometimes your effort won’t pay off. (J.D.’s girlfriend tried to start an online business a few years ago. If it had worked, she would have had a stream of nickels. She only got pennies instead, so decided to shut it down.)

Passive income takes time and effort. But if you’re patient, the payoff can be worth the effort.

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A brief guide to cybersecurity basics

Last Monday, I got an email from Spotify saying that somebody in Brazil had logged into my account.

I checked. Sure enough: A stranger was using my Spotify to listen to Michael Jackson. I told Spotify to “sign me out everywhere” — but I didn’t change my password.

On Wednesday, it happened again. At 2 a.m., I got another email from Spotify. This time, my sneaky Brazilian friend was listening to Prince. And they apparently liked the looks of one of my playlists (“Funk Is Its Own Reward”), because they’d been listening to that too.

I signed out everywhere again, and this time I changed my password. And I made a resolution.

You see, I’ve done a poor job of implementing modern online security measures. Yes, I have my critical financial accounts locked down with two-factor authentification, etc., but mostly I’m sloppy when it comes to cybersecurity.

For example, I re-use passwords. I still use passwords from thirty years ago for low-security situations (such as signing up for a wine club or a business loyalty program). And while I’ve begun creating strong (yet easy to remember) passwords for more important accounts, these passwords all follow a pattern and they’re not randomized. Worst of all, I maintain a 20-year-old plain text document in which I store all of my sensitive personal information.

This is dumb. Dumb dumb dumb dumb dumb.

I know it’s dumb, but I’ve never bothered to make changes — until now. Now, for a variety of reasons, I feel like it’s time for me to make my digital life a little more secure. I spent several hours over the weekend locking things down. Here’s how.

A Brief Guide to Cybersecurity

Co-incidentally, the very same day that my Spotify account was being used to stream Prince’s greatest hits in Brazil, a Reddit user named /u/ACheetoBandito posted a guide to cybersecurity in /r/fatFIRE. How convenient!

“Cybersecurity is a critical component of financial security, but rarely discussed in personal finance circles,” /u/ACheetoBandito wrote. “Note that cybersecurity practitioners disagree over best practices for personal cybersecurity. This is my perspective, as I have some expertise in the area.”

I won’t reproduce the entire post here — you should definitely go read it, if this subject is important to you — but I will list the bullet-point summary along with some of my own thoughts. Our orange-fingered friend recommends that anyone concerned about cybersecurity take the following steps:

1. Get at least two hardware-based security keys. My pal Robert Farrington (from The College Investor) uses the YubiKey. Google offers its Titan Security Key. (I ordered the YubiKey 5c nano because of its minimal form factor.)
2. Set up a secret private email account. Your private email address should not be linked in any way to your public email, and the address should be given to no one. (I already have many public email accounts, but I didn’t have a private address. I do now.)
3. Turn on Advanced Protection for both your public and private gmail accounts. Advanced Protection is a free security add-on from Google. Link this to the security keys you acquired in step one. (I haven’t set this up because my security keys won’t arrive until this afternoon.)
4. Set up a password manager. Which password manager you choose is up to you. The key is to pick one that you’ll use. It’s best if this app supports your new security keys for authentification. (I’ll cover a few options in the next section of this article.)
5. Generate new passwords for all accounts. Manually create memorable passwords for your email addresses, your computers (and mobile devices), and for the password manager itself. All other passwords should be strong passwords generated randomly by the password manager.
6. Associate critical accounts with your new private email address. This will include financial accounts, such as your banks, brokerages, and credit cards. But it could include other accounts too. (I’ll use my private email address for core services related to this website, for instance.)
7. Turn on added security measures for all accounts. Available features will vary from provider to provider, but generally speaking you should be able to activate two-factor authentification (with the security keys, whenever possible) and login alerts.
8. Turn on text/email alerts for financial accounts. You may also want to turn on alerts for changes to your credit score and/or credit report.
9. Activate security measures on your mobile devices. Your phone should be locked by a strong authorization measure. And each of your individual financial apps should be locked down with a password and any other possible security measures.

/u/ACheetoBandito recommends some additional, optional security measures. (And that entire Reddit discussion thread is filled with great security tips.)

You might want to freeze your credit (although, if you do, remember that you’ll occasionally need to un-freeze your credit to make financial transactions). Some folks will want to encrypt their phones and hard drives. And if you’re very concerned about security, purchase a cheap Chromebook and use this as the only device on which you perform financial transactions. (Believe it or not, I’m taking this last optional step. It makes sense to me — and it may be a chance for me to move beyond Quicken.)

Exploring the Best Password Managers

Okay, great! I’ve ordered a new $150 Chromebook and two hardware-based security keys. I’ve set up a brand-new, top-secret email address, which I’ll connect to any account that needs added security. But I still haven’t tackled the weakest point in the process: my text document filled with passwords.

Part of the problem is complacency. My system is simple and I like it. But another part of the problem is analysis paralysis. There are a lot of password managers out there, and I have no idea how to differentiate between them, to figure out which one is right for me and my needs.

For help, I asked my Facebook friends to list the best password managers. I downloaded and installed each of their suggestions, then I jotted down some initial impressions.

• LastPass: 16 votes (2 from tech nerds) — LastPass was by far the most popular password manager among my Facebook friends. People love it. I installed it and poked around, and it seems…okay. The interface is a little clunky and the feature set seems adequate (but not robust). The app uses the easy-to-understand “vault” metaphor, which I like. LastPass is free (with premium options available for added cost).
• 1Password: 7 votes (4 from tech nerds) — This app has similar features to Bitwarden or LastPass. The interface is nice enough, and it seems to provide security alerts. 1Password costs $36/year.
• Bitwarden: 4 votes (2 from tech nerds) — Bitwarden has a simple, easy-to-understand interface. It uses the same “vault” metaphor that products like LastPass and 1Password use. It’s a strong contender to become the tool I use. Bitwarden is free. For $10 per year, you can add premium security features.
• KeePass: 2 votes — KeePass is a free Open Source password manager. There are KeePass installs available for all major computer and mobile operating systems. If you’re a Linux nut (or an Open Source advocate), this might be a good choice. I don’t like its limited functionality and its terrible interface. KeePass is free.
• Dashlane: 2 votes — Of all the password managers I looked at, Dashlane has the nicest interface and the most features. Like many of these tools, it uses the “vault” metaphor, but it allows you to store more things in this vault than other tools do. (You can store ID info — driver license, passport — for instance. There’s also a spot to store receipts.) Dashlane has a free basic option but most folks will want the $60/year premium option. (There’s also a $120/year option that includes credit monitoring and ID theft insurance.)
• Blur: 1 vote — Blur is different than most password managers. It quite literally tries to blur your online identity. It prevents web browsers from tracking you, masks email addresses and credit cards and phone numbers, and (or course) manages passwords. I want some features that Blur doesn’t have — and don’t want some of the features it does have. Blur costs a minimum of $39/year but that price can become much higher.
• Apple Keychain: 1 vote — Keychain has been Apple’s built-in password manager since 1999. As such, it’s freely available on Apple devices. Most Mac and iOS folks use Keychain without even realizing it. It’s not really robust enough to do anything other than store passwords, so I didn’t give it serious consideration. Keychain is free and comes installed on Apple products.

Let me be clear: I made only a cursory examination of these password managers. I didn’t dive deep. If I tried to compare every feature of every password manager, I’d never choose. I’d get locked into analysis paralysis again. So, I gave each a quick once-over and made a decision based on gut and intuition.

Of these tools, two stood out: Bitwarden and Dashlane. Both sport nice interfaces and plenty of features. Both tools offer free versions, but I’d want to upgrade to a paid premium plan in order to gain access to two-factor authentification (using my new hardware security keys) and security monitoring. This is where Bitwarden has a big advantage. It’s only $10 per year. To get the same features, Dashlane is $60/year.

But here’s the thing.

I started actually using both of these tools at the same time, entering my website passwords one by one. I stopped after entering ten sites into each. It was clear that I vastly preferred using Dashlane to Bitwarden. It just works in a way that makes sense to me. (Your experience might be different.) So, for a little while at least, I’m going to use Dashlane as my password manager.

The Problem with Passwords

My primary motive for using a password manager is to get my sensitive information out of a plain text document and into something more secure. But I have a secondary motive: I want to improve the strength of my passwords.

When I started using the internet — back in the 1980s, before the advent of the World Wide Web — I didn’t spare a thought for password strength. The first password I created (in 1989) was simply the name of my friend who let me use his computer to access the local Bulletin Board Systems. I used that password for years on everything from email accounts to bank sites. I still consider it my “low security” password for things that aren’t critical.

I have maybe eight or ten passwords like this: short, simple passwords that I’ve used in dozens of locations. For the past five years, I’ve tried to move to unique passwords for each site, passwords that follow a pattern. While these are an improvement, they’re still not great. Like I say, they follow a pattern. And while they contain letters, numbers, and symbols, they’re all relatively short.

As you might expect, my sloppy password protocol has created something of a security nightmare. Here’s a screenshot from the Google Password Checkup tool for one of my accounts.

I get similar results for all of my Google accounts. Yikes.

Plus, there’s the problem of account sharing.

Kim and I share a Netflix account. And an Amazon account. And a Hulu account. And an iTunes account. In fact, we probably share twenty or thirty accounts. She and I use the same easy-to-remember password for all of these sign-ins. While none of these accounts are super sensitive, what we’re doing is still a poor idea.

So, I want to begin moving toward more secure passwords — even for the accounts I share with Kim.

The good news is that most password managers — including Dashlane — will auto-generate randomized passwords for you. Or I could try something similar to the idea suggested in this XKCD comic:

The trouble, of course, is that each place has different requirements for passwords. Some require numbers. Some require symbols. Some say no symbols. And so on. I don’t know of any sites that would let me use four random common words for a password!

For now, I’m going to take a three-pronged approach:

• I’ll manually create long (but memorable) passwords for my most critical accounts. This is the XKCD method.
• For the accounts I share with Kim — Netflix, etcetera — I’ll create new, memorable passwords that follow a pattern.
• For everything else, I’ll let my password manager generate random passwords.

This seems like a good balance between usability and security. Every password will be different. Only the ones I share with Kim will be short; all others will be long. And most of my new passwords will be random gibberish.

Final Thoughts on Cybersecurity

In this short video from Tech Insider, a former National Security Agency security expert shares his top five tips for protecting yourself online.

You’ll note that these are similar to the Reddit cybersecurity guide I posted earlier in this article. Here are the steps he says to take to keep yourself safe:

• Enable two-factor authentification whenever possible.
• Don’t use the same password everywhere.
• Keep your operating system (and software) up to date.
• Be careful with what you post to social media.
• Do not share personal information unless you’re certain you’re dealing with a trusted company or person.

I won’t pretend that the steps I’m taking will protect me completely. But my new system is certainly an upgrade from what I’ve been doing for the past 20+ years — which was, as I’ve mentioned, dumb dumb dumb.

And I have to confess: I like the idea of restricting my online financial life to one computer — the new $150 Chromebook. I’m not sure if this is actually doable, but I’m going to give it a go. If this works, then I may see if I can find a money-management tool that I like for the machine. Maybe then I can finally leave Quicken 2007 for Mac behind!

What have I missed? What steps have you taken to protect your online accounts? Which do you feel is the best password manager? How do you create memorable, secure passwords? How do you handle shared accounts? Help other GRS readers — and me! — develop better online security practices.

The post A brief guide to cybersecurity basics appeared first on Get Rich Slowly.

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Passive income ideas you can try today

Earlier this week, J.D. wrote about what he calls the biggest truth in personal finance: You can’t get rich through frugality alone. As Liz at Frugalwoods says, “You can’t frugalize income you don’t earn.” Income is one-half the fundamental personal-finance equation, and it’s probably the most important half.

J.D. advocates a three-pronged attack for boosting income: becoming better educated, becoming a more valuable worker, and learning to negotiate salary. But I think he’s missing a fourth important income source: the proverbial “passive income”.

I know, I know. Passive income has a bad reputation. Actually, passive income has a terrible reputation. And deservedly so. The Land of Passive Income is populated by scammers, hucksters, and charlatans. “Hey, little boy, wanna buy my course?” (Sorry, no links. They’re easy enough to find without us helping them.) That’s too bad because legit sources of passive income can be a great way to make more money.

What is Passive Income?

First up, let’s be clear: Actual passive “passive income” (as pitched by the scammers) is a lie. It doesn’t exist. When we talk about passive income, we’re talking about ways to make minimal money with minimal effort. Does that make sense? And it’s a supplement to your main income, not the primary source.

To me, passive income is money that’s earned, usually on a recurring basis, without a significant time investment.

For example, if you own a rental property that brings in $1500 each month, but only requires two or three hours of time to manage, that’s (mostly) passive income. Most nine-to-five jobs are the opposite of this. The income you earn is tied closely to the amount of time you spend at the office.

That’s not to say that passive income doesn’t require effort, though.

Often, there’s a lot of upfront work required before income can become passive. Using the same rental property example, before you can make any money, you have to purchase and renovate the property, and spend time advertising and interviewing potential tenants. All of that takes time and money.

Or, take J.D.’s book as an example. When I asked, he told me that he spent four months working full-time in 2009 and 2010 to write Your Money: The Missing Manual. That’s not passive! But he hasn’t touched the thing since then, and he continues to receive $50 checks every month. That is passive.

Passive Income Ideas You Can Try Today

Some degree of passive income is possible — and without shyster shenanigans. In this article, I’ve compiled 40 passive income ideas for you to consider. Not all of these passive income ideas will be right for you. In fact, maybe none of them will fit you. That’s okay. But I’m willing to bet that many GRS readers will find at least one source of inspiration here that they can use to help increase their income…even if it’s only a few dollars per month.

Pay Down Your Debt

Debt reduction isn’t the first thing that comes to mind for most people when they’re looking for ways to increase their income. But it should be.

Monthly payments on anything from high interest credit cards to expensive car loans can be a real drain on your bottom line. Sometimes the easiest way to improve cash flow is not to make more money, but to lower your expenses.

I recommend that you start by totalling up your debt, and then look for ways to pay it down more quickly. Depending on your situation, you might consider combining everything into one manageable payment, by taking out a consolidation loan. If you do have a large car loan payment, and are feeling stuck, you might be better off in the long run cutting your losses, and downgrading to a more modest vehicle.

(Need more help? Here’s our guide on how to get out of debt.)

Invest in a High Interest Savings Account

There’s no longer an excuse to have your cash sitting in a checking or savings account not accruing interest. These days, you can find a ton of online savings accounts offering a solid yield. Everything about this income is passive. In most cases, you can open an account within minutes from the comfort of your living room, have your funds transferred in, and start earning interest on your cash savings almost immediately. You won’t get rich with a savings account, but it’s a great way to get your emergency fund working for you. Here’s a list of some of the top savings accounts available today. Remember that rates are subject to change:

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Invest in Certificates of Deposit

If you are interested in earning a higher yield on your money than a savings account will offer, without the volatility that comes with stock market investing, a Certificate of Deposit (CD) can be a nice alternative that will earn passive income. CDs are commonly offered by banks and credit unions, and allow you to invest your money for a fixed time period, from just a few days to several years. Typically, the longer you lock in your money, the higher the return. CD yields should keep pace with inflation, with the downside being that you don’t have access to your funds on a day-to-day basis. What they do give you is a source of passive income without the risk.

Earn Income in a Checking Account

Checking accounts are not known to be a place where you can earn income, that’s what savings accounts and other investments are for. But these days, there are a growing number of checking accounts that will pay you a tiny percentage yield on your balance. While it may only be a couple of dollars here or there, it can help to negate some of the other fees you might incur on your account.

Robo-Advisor Investing

AI technology has reduced the amount of effort required to do so many things, including investing. You no longer need to meet face to face with an investment advisor to build a suitable investment portfolio.

Nowadays, you can sign up with a robo-advisor like Betterment, or Wealthsimple, and have a customized portfolio ready in minutes. From there, you’re on your way to building passive investment income. Of course, you’ll need to provide your robo-advisor with the pertinent details, such as your investment objective, risk tolerance, and investment time frame, but from there, your money will be invested in a hands off, low fee ETF portfolio that is automatically rebalanced on a regular basis.

Recommended robo-advisors

• Betterment
• Wealthsimple
• E-Trade
• Acorns

Invest in Dividend Stocks

One of the ways publicly traded companies return value to their shareholders is in the form of dividends. One of the best ways to create passive income is by buying stocks that have a history of paying dividends. As the value of your investment grows, your dividend will also grow, creating a steady source of passive income.

If you stick with it long enough, you may earn enough to live off of the dividend income, while leaving your capital to appreciate in value as share prices rise. The combination of dividends and capital gains makes for a great 1-2 punch of passive income. With most discount brokerages like E-Trade and Charles Schwab now offering free stock trades, investing in the stock market has never been more affordable.

And here’s our introduction to dividend reinvestment plans.

Invest in a REIT

Real Estate Investment Trusts (REITs) are an easy and affordable way to invest in a well diversified real estate investment portfolio. The income from a REIT is even more passive than owning a rental property, because you don’t have the upfront work of finding tenants, not to mention the ongoing maintenance. A REIT is similar to a mutual fund, in that you purchase units of a REIT. Income comes in the form of profit earned by the REIT. Companies like Fundrise have made REIT investing even easier with their crowdsourcing approach, allowing you to get started for as little as $500.

Peer-to-Peer Lending

Peer-to-peer lending, otherwise known as P2P lending, is an online platform that matches lenders and borrowers. Here’s how it works. Individuals, or in the case of a lender like Worthy, small businesses, borrow money from hundreds, even thousands of individual lenders, who have pooled their money together. Once the borrower repays their loan in full, the lender gets their principal investment back, along with interest. Because they lack the high overhead of traditional brick and mortar lenders, peer-to-peer lending companies are able to issue loans at lower interest rates, while providing better than average returns for investors. Here are a few of the more well known P2P lending companies:

Peer-to-Peer Lenders

• Lending Club
• Street Shares
• Worthy

Use a Rewards Credit Card

One of my favorite ways to make passive income is by using a rewards credit card. Every month, I run the majority of my spending through my travel credit card, which in turn earns points that I can use to pay for flights, hotels, car rentals, you name it. The card also comes with private airport lounge access, and a full suite of complimentary travel insurance.

Of course, credit card points will only benefit you if you are able to pay off the balance in full every month. If not, the interest you’ll pay will far exceed any points you’ll earn towards free travel or cash back. If you don’t already have a travel rewards credit card, or aren’t happy with yours, check out our handy travel credit card comparison tool.

Buy Vending Machines

Vending machines have been around forever, and they remain a tried and true way to earn passive income. You’ll need to check on your machines regularly and keep them filled with product, but otherwise there’s little to no work involved in the day-to-day operation. If you can find the perfect locations for your machines, it’s like having your own personal ATM. Vending machines can vary from a simple gumball dispenser, to a snack or soda machine.

Rent Your Space

If you have a spare room in your home, or an entire house you can make available to guests, you can earn passive income by renting out your space through sites like AirBnb and VRBO. This is a great way to get your property working for you, and for the most part, the income is passive. You don’t even have to worry about marketing, as the sites you list on will bring your customers to you. Your job is to decide when and how often you want to list, and that the space is clean and ready to accept guests.

Buy a Rental Property

There are a number of ways you can create passive income with real estate, one of them being to own a rental property. Often, the lowest barrier to entry is to keep your existing home as a rental when you move. Not everything about owning a rental property is passive, mind you. You’ll need to look after any required maintenance, and of course, screening potential tenants takes time. But if you can find a solid tenant for your rental, you should be able to sit back and watch the money roll in.

Here’s our guide to getting started with real-estate investing.

Purchase a Self-Storage Facility

With the industry now approaching $40B, self-storage facilities have become a massive business in the US. While there is a large upfront investment required, if you have the resources, building or buying a self-storage facility can be a great way to earn passive income. The revenue is recurring as well, with most customers renting units on a monthly or annual basis.

Display Ads on Your Car

Did you know? There are companies that will pay you to wrap your car in advertising. If you don’t mind driving a billboard on wheels, Wrapify will pay you upwards of $100/week to display advertising on your car. The amount of passive income you’ll make will depend on how far you drive, and where you live. By connecting to an app on your mobile device, Wrapify can track your mileage as you drive.

Rent Out Your Car

The sharing economy has brought about plenty of side hustles that make it possible to earn money by letting others use your stuff. Take your car for example. If you have a late-model vehicle sitting in your driveway for hours at a time, you can make some extra cash by renting it out on an app like Turo.

Turo connects vehicle owners with people who need a car to drive, and are looking to avoid the high prices that car rental agencies charge. The nicer your car, the more money you can charge. The best part is that Turo does most of the heavy lifting, by bringing customers to you, and managing the payment and insurance component of the transaction.

Rent Out Your RV

Owning a motorhome is enough to stretch most people’s budget, but thanks to companies like Outdoorsy and RVShare, you now have the option of renting out your RV when it’s not in use. They connect you with renters via a mobile app, and you get to set the price, and the time period when your RV will be available. With an average rate of around $200/day, you could even make enough money to pay for your own RV adventures.

Rent Out Your Boat

If you own a nice boat, you can list it on sites like Boatsetter, and rent it out to someone who will use it for fishing, sailing, or watersports with friends. Depending on how passive you want this to be, you can choose to captain the boat, or leave it for your guests to manage on their own. Like RVs, boats are a luxury item that don’t often get used, making this an ideal passive income source. I ran a couple of searches on Boatsetter and GetMyBoat, and found rates in excess of $1000 for a full day.

Rent Out Your Stuff

We’ve covered cars, RVs, and boats, but the list of things you can rent out doesn’t end there. You can list cameras, tools, even sports equipment on a site like Peer Renters, and make money by renting them out to people who perhaps can’t afford to purchase the items outright, or just have a limited use for the item.

Sell Handcrafted Goods on Etsy

If you are crafty, you can sell your creations on Etsy, a massive online marketplace for handcrafted goods. Depending on the amount of labor involved in making your product, this might be a less passive form of income, but Etsy allows you to expand your reach beyond local craft shows. Whether it’s handcrafted jewellery, clothing, soap, or kids toys, Etsy places your creations in front of a global audience.

The former Mrs. Money Mustache uses Etsy to earn extra income.

Design and Sell T-shirts Online

Through marketplaces like Merch by Amazon, you can make your own t-shirt designs and sell them online. What makes this a great side hustle is that there is little to no upfront cost. You simply upload your designs, and Amazon fulfills your orders on-demand, including shipping. You earn a royalty for every shirt that’s ordered. All you need to do is come up with a great design that will sell.

Dave from Accidental FIRE designs and sells t-shirts online. (J.D. says he wants a few of these!)

Become a Rideshare Driver

If you have a decent car, enjoy driving, and don’t mind interacting with people, you can make decent money by driving for a rideshare company like Uber, or Lyft. One nice thing about this side hustle, is the flexibility. You choose when and how often you want to work. Of course, this income source isn’t purely passive. You’ll need to trade your time to make money. That said, there are plenty of jobs out there that are a lot more labor intensive than chatting with customers as you shuttle them around town.

Last year, our pal Josh Overmyer shared the pros and cons of becoming a rideshare driver here at GRS.

Get Paid to Shop Online

Websites like Rakuten (formerly Ebates) pay you to shop online. When you shop at your favorite retailers directly from the Rakuten website, you’ll earn up to 20% cash back, which is paid to you via a monthly check or PayPal. You can also redeem your rewards for gift cards to your favorite stores. Sign up for Rakuten, and start earning passive income while you shop.

Complete Online Surveys

Let’s be clear, no one will ever get rich by taking online surveys. In fact, there are a lot of scams out there that are nothing more than a complete waste of time. But if you have some time on your hands, and you just want to make a few extra bucks, online surveys can help. You can complete surveys while doing other things, like watching TV, or riding on the bus. Survey Junkie and Swagbucks are two of the more reputable sites out there.

J.D.’s girlfriend has tried online surveys. Her verdict? They’re fun and you can make some extra money while watching TV, but you won’t get rich with them.

Earn Songwriting Royalties

If you love to write music, you can create passive income by recording your songs and then publishing them through a variety of channels. You earn royalties anytime your music is played on streaming services like Apple Music, or Spotify, or played on the radio. You can even license your music for TV, movies, and videos without the backing of a major record label. Companies like Tunecore and CDBaby work with independent artists by publishing their music worldwide, then collecting and paying out any royalties that are due. This is a great passive income stream that can last for many years.

Purchase Music Royalties

Perhaps your talent isn’t to write music. That’s ok, you can still get into the music royalty game by purchasing the rights to song catalogues owned by other artists. Royalty Exchange is an online auction that allows you to bid on existing music catalogues. These are songs that are already earning regular, passive income for their current owners. When you purchase music royalties, you’re buying the future cash flow, which is purely passive income.

Photo Licensing

Photographers can build passive income by selling stock photos online. You’ll need to produce lots of content to earn a decent amount of money, but it can be a nice supplement to other, more labor intensive work, like wedding or family photography. One benefit to stock photo licensing is that you can sell the same pictures to many different buyers. There are no shortage of stock photo websites where you can sell your work. Dreamstime and Snapwire are just two of the more popular stock photo sites out there.

Record an Audiobook

One of the best ways for content creators to increase their income is by releasing their content in as many formats as possible. For example, if you’ve written a paperback book, or even an ebook, you’ll want to consider recording an audiobook version. There are no shortage of people who prefer listening to books instead of reading them. You can record the audio yourself, or pay someone else to do it for you. Once your audiobook is ready to go, it can be available for purchase online for years, making it the ideal passive income source.

Sign up for Sleep Studies

To some, this may seem like the dream way to earn passive income, no pun intended. Sleep researchers need test subjects for their studies, and it’s a gig that can pay very well. That said, it’s not as easy as it may sound. Often, participants are required to put on hold many of their daily routines ie. social media, extracurricular activities. If this is something you think you’d like to do in the name of science, you can begin by searching this government website for available opportunities.

Sell Your Data

I’m personally not a fan of this passive income idea, because I value my privacy, but there are companies that will pay you to share your smartphone data with them. For it to work, you need to install an app on your phone that records your activity throughout the week. The money isn’t great, $5 or $10/month, but if you’re open to this kind of thing, it certainly qualifies as passive income.

Buy an Existing Website

If you prefer to start earning passive income instantly, you may want to consider purchasing an existing website or blog that’s already generating cash flow. This is a great way to get involved in an online business without having to build it from scratch. There are thousands of websites available for sale through online marketplaces like Flippa, and in many cases, these businesses are already producing a positive cashflow every month.

Of course, the more income they’re producing, the higher the purchase price. On average, you can expect to pay a 2-3X multiple on the annual income earned by the website. Also, it’s important that you do your research before you buy. Make sure the monthly income is stable, and that the potential is there for continued growth. Also, I recommend sticking with a niche that you understand, and have some expertise or prior knowledge of.

Buy and Sell Domain Names

Buying and selling domain names is a bit like trading on the stock market. The goal is to buy low, and sell high, but there can be some risk involved. There are people who earn good money buying domain names that they believe will increase in value over time, with the hopes of selling at a profit. If this sounds like a passive income strategy you’d be interested in trying, here are some tips on selling domain names for profit.

Of course, you could always be like J.D., who owns dozens of domains that he’ll never use. Silly man.

Start a Blog

Whenever I write about blogging as a way of making money, it’s usually good for a few raised eyebrows. It seems everyone is starting a blog, hoping to make money. Can it be done? Absolutely, but you need to be willing to play the long game.

Over time, it’s possible to create multiple passive income streams with a blog, through affiliate marketing, or display advertising, for example. But building a blog from scratch is anything but passive. You’ll need to be consistent in creating new content, and spend time promoting your blog. One of the best things about blogging is the low barrier of entry. If you have a computer and a wifi connection, you can get started for as little as a few dollars per month.

But maintain realistic expectations. Even this website doesn’t produce a full-time income at the moment!

Start a Podcast

It seems everyone has a podcast these days, and while many people do it out of pure enjoyment, there’s a lot of money that can be made. As you build a reliable following, you can begin selling advertising via sponsorships to brands that wish to get in front of your audience. Make no mistake, there’s a lot of work involved in finding guests and conducting interviews, but the opportunity to build a passive income stream is there. One way to reduce your workload is by outsourcing tasks to writers, podcast editors, and graphic designers.

Start a YouTube Channel

If you can consistently create videos that people want to watch, you can build an audience on Youtube. This is important, because with an audience, you can begin to make money, by joining the YouTube Partner Program. Most of your earnings will come from ads, which are aired within your video content, however, there are more ways to make money. YouTube can also drive traffic to your website and social media channels, making the passive income opportunities endless.

Sell Digital Products/Downloadables

Thousands of people earn passive income by creating digital products that people can download and use. From spreadsheets to productivity tools, calendars and checklists, the possibilities are endless. Once you’ve created your winning product, you can make it available for download on your own website, or through a third party platform like Gumroad.

Develop an Online Course

If you have expertise in a specific area, rest assured there’s someone out there willing to pay you for your knowledge. You can create an ebook on the topic, or develop an online course, and then sell it on your own website, or on an online learning marketplace like Udemy. No skill is too small to share with others. You could sell a course on creating a killer resume, starting a podcast, or how to travel hack a trip to Europe. With online courses, most of the hard work happens early on, when you’re creating the content. From there, with an effective marketing strategy, you’ll have yourself a nice, passive income stream.

When J.D. created his Get Rich Slowly course in 2014, it took several months of full-time work. But when he was finished, he had a nice source of passive income.

Run Website Display Ads

If you have your own website, you can sign up to have ads displayed within the content on your site. The most well known ad service is Google Adsense. Adsense displays ads that are relevant to your site content and that match your visitors preferences. When guests engage with an ad, you make money. Also, the higher your site traffic, the higher your income. What I like about display ads is that it really is passive income. Once your ads are set up, there is no work involved, leaving you to focus on what you do best, which is run a great website.

Affiliate Marketing

If you have your own blog or website, one of the best ways to make passive income is through affiliate marketing. Affiliate marketing involves promoting someone else’s product or service, and earning a commission whenever a sale is generated directly from your recommendation. The most well known affiliate program may be the one run by online retail giant Amazon, but there are thousands of other companies with programs of their own. Affiliate income takes time to build, but if you’re successful, it can be one of the best ways to make passive income.

Dropshipping

Dropshipping is a form of e-commerce where the seller doesn’t hold the product, instead, it’s shipped to the customer directly from the supplier. The seller’s job is to find products to buy at a wholesale price, and then sell them at the retail price, by advertising them through an e-commerce store, like Shopify. When orders are placed, they go directly to the supplier who ships the product to the customer. The seller profits from the spread between the retail and wholesale price. Dropshipping has become very competitive, but if you can find a product that people want, and sell it at a profit, there’s lots of passive income to be made.

Learn to Outsource

If you’re an entrepreneur, chances are you have a tendency to want to control all aspects of your business. After all, no one else understands it like you do, nor is anyone else as invested as you are. But the problem with doing everything yourself is that the money you make becomes anything but passive.

Many business owners burnout simply because they’re not willing to outsource tasks to others. These days, it’s easy to hire a virtual assistant, or other freelancers who can perform a wide variety of tasks. This frees up time for you to focus on doing the things that only you can do. Upwork and Fiverr are good places to start looking for freelance talent.

Final Thoughts on Passive Income

Back in 2007, when this blog was young, J.D. reviewed Don Lancaster’s 1978 book, The Incredible Secret Money Machine, a book loved by J.D.’s father. (The book is now available as a free PDF from the author’s website.)

The book’s premise is simple: Create a series of “money machines” that generate a steady supply of “nickels”. Although the book is overtly about creating small, hobby businesses, it covertly embraces the “passive income” mentality. Lancaster urges readers to create lifestyle businesses that require minimal effort to maintain.

I hope this list of passive income ideas can act as a source of inspiration for some of you seeking to build your own money machines. You won’t get rich with any of these suggestions, but you could find a way to produce a stream of nickels to supplement your income. That’s not so bad, is it?

There’s no shortage of ways to make passive income. What’s interesting, is that most of the ideas I’ve come up with are things that you can do online, from the comfort of your home. Of course, it’s important to remember that passive doesn’t mean easy. There can be weeks, months, even years, of hard work that goes into building an income stream. And sometimes your effort won’t pay off. (J.D.’s girlfriend tried to start an online business a few years ago. If it had worked, she would have had a stream of nickels. She only got pennies instead, so decided to shut it down.)

Passive income takes time and effort. But if you’re patient, the payoff can be worth the effort.

The post Passive income ideas you can try today appeared first on Get Rich Slowly.

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The biggest truth in personal finance

For the past six weeks, I’ve been hard at work writing my “introduction to financial independence and early retirement” project for Audible and The Great Courses. It’s been challenging — and fun — to rework my past material for a new audience in a new format.

Naturally, I’m emphasizing two important points in this project: profit and purpose.

• I believe strongly that you need a clear personal mission statement in order to find success with money (and life).
• I also believe that the most important number on your path to financial freedom is your personal profit, the difference between your income and your spending. (Most people refer to this number as saving rate. I prefer the term “personal profit” because it’s, well, sexier.)

That last point is important.

Too many people want magic bullets. They want quick and easy ways to get out of debt and build wealth. They believe (or hope) that there’s some sort of secret they can uncover, that somehow they’ve missed. Well, there aren’t any secrets. Money mastery is a combination of psychology and math. And the math part is so simple a third-grader could understand it. Wealth is the accumulation of what you earn minus what you spend.

There are only two sides to this wealth equation — earning and spending — but a disproportionate amount of financial advice focuses on the one factor, on spending, and that’s too bad. Sure, frugality is an important part of personal finance. And if you’re in a tight spot and/or have a high income and still struggle, then cutting expenses is an excellent choice. But the reality is, you won’t get rich — slowly or otherwise — by pinching pennies alone.

The Biggest Lie in Personal Finance

Recently at his excellent blog, Of Dollars and Data, Nick Maggiulli wrote about the biggest lie in personal finance. What is that lie? He writes:

While there are lots of people who are in financial trouble because of their own actions, there are also lots of people with good financial habits who just don’t have sufficient income to improve their finances.

That’s why the biggest lie in personal finance is that you can be rich if you just cut your spending. And the financial media feeds this lie by telling you to stop spending $5 a day on coffee so that you can become a millionaire.

With charts and graphs and data, Maggiuli demonstrates that the problem facing people with low incomes isn’t their spending — it’s their earning. If you’re living at the poverty line — currently $26,200 per year for an American family of four — you’re not going to escape through thrift. Thrift is an emergency measure, a stopgap. It’s a bandage on a major wound.

Here’s the bottom line:

• If you’re poor and hope to be not poor, your attention should be focused on increasing income, not on cutting costs. Your expenses are likely already very low.
• If you have an average household income — currently $63,179 according to the U.S. Census Bureau — your path to building wealth will probably include both frugality and income enhancement.
• If you have a high income but still struggle to make ends meet, your attention should absolutely turn to cutting costs. You need to rein in your lifestyle. But you won’t accomplish this with frugality; you’ll do this by optimizing the big stuff.

Maggiuli is fed up with the Biggest Lie. It “triggers” him.

“This is the same financial media who write stories about how people save money by living in a trailer, making their own dish soap, or reusing their dental floss,” he writes. “Yes, it’s that ridiculous. But what really gets me is how these examples are provided as ‘proof’ of how cutting spending can make you rich.”

From my experience, this sort of stuff is perennially popular because it’s easy. It’s easy to write and it’s easy to read, even if it doesn’t offer any real solutions. It’s more difficult to write about boosting your income. And, it’s more difficult to act on that information because it takes time, effort, and actual sacrifice.

Real-Life Examples of the Biggest Lie in Action

Just this morning, Trent at The Simple Dollar published an article about optimizing dishwashing for money and time. Trent writes:

If I can invest some time and thought and effort into optimizing a routine I do three times a week, and that optimization trims off five minutes of effort and $0.50 in cost, I’m literally saving 13 hours per year and $78 per year for the rest of my life.

Trent isn’t wrong. If his math is correct (and his discipline too), he will literally save 13 hours and $78 each year by optimizing how he does dishes. This isn’t a lie. In this case, the lie comes from what is implied: Do this and you’ll grow rich. You’ll reach financial freedom by becoming a smarter dishwasher.

Here’s the truth:

• You don’t reap the thirteen hours and $78 annual benefit as a one-time win. You’re saving five minutes and fifty cents per day. This may seem like a niggling point, but it’s important. If you gain thirteen hours or $78 at once, that’s something real and tangible, something you can work with. But an extra five minutes and fifty cents per day? Not so much.
• Trent loves to calculate the dollars per hour he saves through various actions. He didn’t do that in this case, and it’s easy to see why. If he’s saving $78 in 13 hours, that’s the equivalent of $6 per hour. I don’t know about you, but it’s easy for me to brainstorm ways to earn more than $6 per hour with my time.

I’m not saying that you shouldn’t optimize your dishwashing routine. Do it! But don’t expect it to make you rich. Because it won’t.

Here’s a bigger example of the lie in action.

Elizabeth Willard Thames writes at Frugalwoods, which is one of my favorite money blogs. Recently, especially, Liz has been publishing lots of amazing stuff. I look forward to each new article. (Those of you who make use of the Spare Change list of links on the GRS front page have probably noticed that I bookmark Frugalwoods frequently.)

As you might guess from the name of her blog, Liz focuses (almost?) exclusively on thrift. She and her husband practice extreme frugality. She wrote a book, Meet the Frugalwoods [my review], that documented their journey from poor college students to achieving financial independence on a 66-acre farm in central Vermont.

Now, there’s no doubt that Liz and Nate are thrifty. They practice what they preach. But their frugality is not the reason for their wealth, the reason they were able to retire early. You can’t buy a 66-acre farm in Vermont simply by optimizing your dishwashing routine. Or clipping coupons. Or hosting potlucks. To to this, you also need a high income. And that’s a part of the story that Liz doesn’t share with her readers. She and her husband made a lot of money, and that’s how they got rich — not through frugality.

I’m sure Liz doesn’t mean to obfuscate the truth, but that’s the net effect. She’s complicit in “the biggest lie in personal finance”.

To her credit, Liz seems to be incorporating more of the truth in her writing. Today, for instance, the About page at Frugalwoods acknowledges their high incomes. This didn’t used to be the case.

Now, I don’t mean to dog on Liz and Trent. They’re both good people and fine writers. But I think they do their readers a huge disservice by covering just one aspect of the wealth equation, by rarely (if ever) mentioning income. They’re active participants in Maggiuli’s “biggest lie”.

And I’ll confess: For a long time, I was guilty of the same thing. Sometimes, I still am. Hell, I’ve spilled a lot of words lately about my quest to optimize my food spending, haven’t I? I’m not claiming to be any better than Liz or Trent. But I want to at least acknowledge the lie — and the reciprocal truth.

The Biggest Truth in Personal Finance

If frugality isn’t the path to riches, what is? The answer is simple: Big Wins. Big Wins are the quickest way to wealth.

You can scrape your dishes and rinse them in cold water every day for the rest of your life, and you still wouldn’t match the benefits you’d obtain by purchasing a cheaper home. Or choosing a more fuel-efficient car. Or negotiating your salary.

The best way to spend less is to cut back on the big stuff.

If the average American family were to trim their housing costs by 10%, they’d save roughly $150 per housing payment — more than twenty times the benefit of optimizing your dishwashing routine. Transportation offers similar opportunities. According to the American Automobile Association, the average driver spends just over $9000 per year on her vehicle. Reduce this spending by less than one percent and you’ve accomplished the same thing as a year of diligent dishwashing.

But, as Maggiuli notes in his article, income is the elephant in the room, the subject that too many writers ignore.

You can only cut costs so far. There’s no way to reduce your spending below zero, and most of us can’t come close to that. As I mentioned earlier, the U.S. poverty line for a family of four is currently $26,200. (For two people, it’s $17,240.) Not counting his business, Mr. Money Mustache (a famously frugal fellow) spent $13,068 in 2019.

If you’re living like this and want to escape, your shouldn’t look for ways to cut costs. That stuff is useless to you. If somebody tells you otherwise, they’re lying. In these circumstances, you should be trying to increase your income. And even if you have a standard middle-class salary, boosting income is usually the best way to meet your goals.

There are three primary ways to earn more money.

• First, become better educated. Despite the dire details in the gloomy mass media, this is undeniable: The more you learn, the more you earn. In the U.S., education has a greater impact on lifetime earnings than any other demographic factor. It’s more important than your race, your religion, your gender, your location. (In fact, the Census Bureau says education has five times the impact of gender on annual earnings.) That’s great news because while you can’t control your age or race, you have total control over your education.
• Second, become a better employee. I read a lot on Reddit (and other places) where people piss on their employers, complaining about how their boss (or company) is out to screw them. This stuff is counter-productive. Sure, there are some shitty employers out there, but most are happy to promote and reward their best workers. If you want to earn more, work longer and harder than others will. If you’re in a situation where hard work goes unrewarded, switch jobs.
• Finally — and most importantly — learn to negotiate your salary. Study after study shows the same thing: Failing to negotiate your salary can cost you over half a million dollars during the course of a typical career. Half a million dollars! For over a decade, I’ve been pushing Jack Chapman’s book, Negotiating Your Salary: How to Make $1000 a Minute. Let me do so again.

“You can’t frugalize income you don’t earn,” Liz writes in Meet the Frugalwoods. She speaks the truth! The biggest truth.

I’m no enemy of thrift. Yes, absolutely, pinch your pennies, if that makes you happy. Frugality is an excellent way to build good habits. Over the long run, many frugal habits combined can make a big difference to your financial situation.

But if you have a low income, do not focus on thrift. It’s a red herring. Instead, turn your attention to Big Wins. And, especially, to increasing your income. Because this is the biggest truth in personal finance: You can’t get rich through frugality alone.

The post The biggest truth in personal finance appeared first on Get Rich Slowly.

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Choose the Right Mortgage Lender

Getting a mortgage loan is a huge decision, especially for people buying homes for the first time. Choosing the right lender will make a world of difference and will help avoid problems in the future. Given below are four steps which will help determine the right mortgage lender:

Learn about the different types of mortgage lenders

The first thing is to know about all the types of mortgage lenders. Most people go to banks, which provide credit whose interest rate depends on market performance. There are mortgage brokers who help people find the right lenders. 

Another option would be to approach a credit union, which provides credit at lower rates of interest. However, it is essential to be a member of these institutions to qualify for one. The last option is mortgage lenders, who provide these types of loans. They tend to be the quickest when it comes to providing credit.

Find out if there is a pre-approval option

Pre-approval is an excellent option to make it easier for first-time buyers to find the right house. When people get to know that they can get a mortgage, they will be able to shop for properties that fit within the approved amount. Several mortgage lenders will perform various checks to ensure individuals can afford to take credit. 

Compare the rates

Never make the mistake of approaching one lender and taking the mortgage. The reason is that there are several companies which offer similar services. As some of them offer different rates of interest, comparing these figures will help pick the right one. 

Read about the lender’s reputation

Before making the final decision about the mortgage lender, it is vital to know about their reputation. Go online and take a look at the reviews left by previous customers. Find out if the customer service is good and how many hoops one has to jump to qualify for the mortgage. 

By following these four steps, first-time buyers will be able to select the right mortgage lender!

from Robert Scott Batchelar | Finance http://robertscottbatchelar.com/choose-the-right-mortgage-lender/
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How to Overcome a Business Crisis

Every business will have to face challenges from time to time. Regardless of the magnitude of the setback, it is essential to remember a few navigation techniques. Through the entire process, it is crucial to remain attentive to new events and past lessons. 

Start off by tackling the problem head-on. There is no merit to beating around the bush. Identify the issue and begin a resolution strategy. It is almost impossible to be able to foresee every minor difficulty in the course of building a brand. However, focusing on the problem as and when it arrives and shifting attention to it can help ride out the stormy weather.

Remember to stay transparent about the setback. Address the issue skillfully and honestly. Pay attention to conversations around the topic and remain open to suggestions from trusted sources. 

A useful tip for new entrepreneurs who’re just getting started is to establish meaningful connections with skilled seniors from the industry. In all likelihood, they may also have faced challenges in their time. Be respectful to their advice and use your intuition to make the best choice for the business. 

The essence of damage control is to bring attention to the fact, as opposed to maintaining dead silence. Until you have figured out the pitfalls, address the problem with a willingness to resolve it.

In a financial crisis, remember to prioritize projects that generate the most revenue. When the business is short on cash, expenses will definitely need to be cut. To take it a step further, utilize time and energy to making the most out of the business areas that work well. 

Remember that optimization is key. When in doubt, remember how Steve Jobs made the most out of a crisis and molded Apple to the company it is today.

In hard times, it is essential to know that the nature of business is fickle. Remember to maintain your integrity and find your source of strength and resilience.

from Robert Scott Batchelar | Business http://robertscottbatchelar.net/how-to-overcome-a-business-crisis/
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My travel and speaking schedule for 2020

It’s that time of year! I’ve been sorting through speaking invitations and comparing event schedules to my personal plans. I now have a rough idea of where I’ll be in 2020 — and when. (As I finalize details, I’ll update this post to reflect any changes.)

This year, I’ll be traveling much less than last.

In 2019, I was away from home something like 3-1/2 months out of twelve. That was too much. In 2020, I’m deliberately saying “no” to opportunities. Still, I enjoy meeting and connecting with other folks who want to improve their lives — and the lives of others. So, I’ve agreed to a handful of engagements.

Here are the highlights from my “money event” calendar for the next few months.

“Intro to FIRE” Project (March 31st)

Before I do any travel, I have to do some work.

At the moment, most of my energy and attention is devoted to a five-hour audio-only project that I’m writing for Audible and The Great Courses. They’ve recruited me to create an introduction to financial independence and early retirement. It’ll contain ten half-hour lessons on topics ranging from purpose to profit.

My first deadline for this project was January 31st. I turned in half of the course (which totaled about 20,000 words) and am awaiting feedback. The final five lectures are due by March 31st. My aim is to finish these by March 25th, my birthday. (I’d love to have more review time for editing and other improvements.)

In early May, after a speaking gig in St. Louis, I’ll fly to Virginia to record the course. I’m not sure when it’ll be released, but I’ll be sure to keep you updated.

Plutus Voices: Portland (April 16th)

Get Rich Slowly turns fourteen on April 15th. To celebrate, I’ll be hosting a Plutus Voices event here in portland.

The Plutus Foundation is a financial-literacy non-profit for which I am a board member. Plutus Voices is “a series of learning and networking events for the financial media bringing attention to important topics”. The Phoenix event, for instance, discussed meeting the financial needs of underserved communities. In Denver, we discussed financial independence and women.

On April 16th (or perhaps the 15th), Luna Jaffe and I will co-host a Portland event during which we’ll explore our changing relationships with money. We may or may not be joined by our pal, Dougls Tsoi.

We’re in the initial planning stages for Plutus Voices: Portland. I’ll post more info (such as time and location) when I have it.

Financial Freedom Summit: St. Louis (May 1st to 3rd)

In early May, I’ll fly to St. Louis for the first-ever Financial Freedom Summit. This event is “for anyone interested in pursuing financial freedom”, whether you’re just starting you’re journey toward F.I. or you’ve already reached early retirement.

Because this is the first FFS, I can’t comment on what it’ll be like. I have no idea. But it’s being organized by some smart folks, so I’m hopeful that it will grow into an annual mecca for money nerds. I’ve agreed to speak in some limited capacity — possibly an on-stage Q&A about life after early retirement — but mostly I’m looking forward to hang out with readers and colleagues.

Camp Mustache: Seattle (May 22nd to 25th)

Several years ago, a group of Mr. Money Mustache readers got together at a retreat center outside Seattle over the long Memorial Day weekend. They’ve repeated this gathering every year since. This year, Camp Mustache tickets sold out in twenty seconds.

Camp Mustache is fun for a variety of reasons. It’s low-key. It’s egalitarian (meaning there are no “speakers” per se; anyone can present). And it’s a place for like-minded folks to share their stories of extreme frugality and travel hacking. For me, it’s an opportunity to spend time with people that I don’t get to see as often as I’d like.

Chautauqua: Ecuador (August 29th to September 5th)

My big event for the year will be yet another money chautauqua.

In 2013, J.L. Collins from The Simple Path to Wealth partnered with Cheryl Reed to host the first-ever F.I. chautauqua, a week-long retreat for like-minded folks to discuss the path to financial freedom — and what comes after.

That year, I spoke for the first time about about the connection between money and meaning. Since then, I’ve returned to give the same presentation in 2014, 2016, and 2019. I’ll do it again in 2020.

Out of all the money events I’m a part of, the chautauquas (chautauquae?) are my favorite. They’re intense. For an entire week, a group of twenty or thirty people spend nearly every waking moment together to talk about money. Each speaker gives a two- or three-hour presentation. Plus, we have hour-long meetings with interested attendees.

Today, there are two different chautauqua events.

• The official J.L. Collins chautauqua hops around Europe. In 2018, it was held in Greece. Last year, we met in Portugal. This year, folks will fly to Croatia. From my experience, this event is targeted at folks who are “fatFIRE”, those who tend to have higher net worths and higher spending. It’s deliberately designed as a “premium event”. Dates and speakers for this year’s European F.I. chautauqua aren’t out yet, but should be announced soon.
• The Ecuador chautauqua tends to have a different focus. It’s more geared toward the “leanFIRE” crowd. Presentations are often about the Big Picture rather than simply about wealth-building. And some years are barely about money at all. (In 2016, I hosted a week with Leo from Zen Habits and David from Raptitude. Not really a money event!)

For this year’s Ecuador chautauqua, I’ll once again be speaking about money and meaning. (This is my life mission, after all!) Right now, it looks like I may also cover the nuts and bolts of FIRE — the basics — but that’s not certain yet. And, as always, Cheryl will present on happiness and well-being.

I’m excited to be joined by some of my favorite colleagues:

• Piggy and Kitty from Bitches Get Riches, which is one of my favorite money blogs. (I love it so much that I send them money every month via Patreon.) The Bitches think they’ll be speaking about “how to lift as you climb”. What should you do with your financial independence? Share the wealth, contribute to the success of others, and use your newfound power and autonomy to help others achieve the same.
• Tanja Hester from Our Next Life. I just had dinner with Tanja and Mark last Saturday. She told me that she hopes to talk about using money for good, toward purposeful ends. But she’ll probably cover more about life after FI rather than the journey itself.

Want to join us? You should book a spot for the Ecuador chautauqua today!

Note that Tanja will host another week in Ecuador. That event — from August 22nd to August 29th — is only for women.

Fincon: Los Angeles (September 30th to October 3rd)

No surprise that I’ll be at this year’s Fincon Expo, the annual convention for money media — not just bloggers, but newspaper columnists, television journalists, and more. This year, to celebrate its tenth year, Fincon will be held in Los Angeles. (Long Beach, to be precise.)

At this point, I have no plans to speak at Fincon, but that will probably change. I’m sure I’ll end up on a panel, or moderating a panel, or participating in some other way. The Fincon folks have become my family. I love them. (And, in fact, I’m writing this while on a week-long ski trip with 25 other Finconners!)

Other Possibilities

It’s possible that I’ll add other travel and/or speaking to my year, but it’s unlikely. If I do anything else, it’ll probably be to fly to Lake Geneva, Wisconsin to help remodel the caboose commune.

A few folks in the FI blogging crowd have begun to buy adjacent units from an old caboose hotel. The group currently owns three cabeese, and may soon add a fourth. Two of the cabeese need hard-core renovations, so we’re hoping to get together for a work party. But whether I can join the fun is currently up in the air.

I may also be able to make it to one of the Camp FI retreats held across the U.S. I love these gatherings, but it’s getting more and more difficult to justify the expense of traveling to them. If I can make it fit with other travel, I’m glad to go. (Camp FI is an outgrowth of Camp Mustache. It’s generally held on holiday weekends at retreat centers around the U.S.)

Lastly, there’s a small chance that I’ll return to Europe this winter to re-visit the Christmas markets. My cousin Duane continues to defy the odds and beat his throat cancer (yay!). He’s hinted that he’d like to repeat our trip from December 2018. I would too, and maybe Kim could join us this time. We’ll see. I’m guessing that we’ll start serious planning for this in October if it still seems appealing.

As always, I’m happy to meet with GRS readers when they find themselves in Portland — especially if they’re able to come my direction. Now that I have office space in Lake Oswego, that makes a perfect meeting space. Let me know if you come to town! We can meet up for beer or coffee — or a dog walk.

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Why you should track your spending (and why Quicken sucks)

Last year wasn’t good for me. Depression and anxiety reigned supreme. By objective standards, my life was pretty good. But subjectively, life sucked. Going into 2020, I decided I needed to make some changes. I’m pleased to report that the first five weeks of the year have gone swimmingly. Life is grand.

I’ve made three specific changes that I believe have contributed to this improvement:

• I’ve rented office space outside the house. My office is for work only. I do not allow myself to play games (or engage in other shenanigans) at the office. Zero tolerance.
• I’ve begun getting up early. I tend to be an early riser anyhow, but early for me means about six o’clock. This year, I’m generally rising at 4:00 or 4:30, which means I’m at the office by five.
• I’ve curtailed my drinking. In fact, I didn’t touch a drop of alcohol during January. I’ve had a few drinks in February, and it’s been interesting to see how it affects me, both in the moment and then for days after.

Taken together, these three changes have mitigated my mental health problems and made me more productive. I love it. Over the next six weeks, I plan to integrate two additional changes into my life: I’m going to begin exercising regularly and I’m going to cut back on videogames. I expect this to provide an additional boost to my well-being.

There’s been an unexpected benefit to my quest to become a better version of me. January was — by far — my best month with money in years.

My January 2020 Spending

As you know, I track every penny I spend. I’ve been doing this since 1993 (with occasional breaks). It’s a valuable practice.

Earlier this decade — after my divorce but before my RV trip — my monthly spending averaged about $4000. After returning from our cross-country adventure, that number spiked. From 2016 to 2018, I was spending closer to $6000 per month. This led me to push for austerity measures last year, measures that worked. My 2019 spending averaged $4221.27 per month.

In January, I spent $3212.24. This is a fist-pumpingly fine number, one that I’m proud of. But I’m even prouder of how I achieved those cuts. My top financial goal for this year is to spend less on food. I did that. And because I didn’t drink, I spent nothing on alcohol.

Because I was curious, I decided to explore my spending over the past few years. I think you might find it interesting too. Here’s a snapshot:

This spreadsheet shows monthly spending in select categories during the past five years. The 2016 numbers are for December only (because that’s when I resumed tracking after our RV trip). The numbers for last year are only for the first half of the year. And, obviously, the numbers for this year are only for January.

Some thoughts:

• Generally speaking, my vehicle costs are low. They were high in 2017 and 2018 because my 2004 Mini Cooper needed repairs. They were high last year because I spent $1900 to buy a 1993 Toyota pickup.
• My entertainment spending is dominated by three specific expenses: my Portland Timbers season tickets, our subscription to Broadway in Portland, and my iTunes movie and TV purchases. The theater tickets are a one-time expense each February. The Timbers tickets (which I may not renew this year) are a one-time expense each August. I continue to work to keep my iTunes purchases under control.
• I spend more on our pets than I thought. A lot more. I love our dog and three cats, but wow! I paid $142 to support them last month, and there were no vet expenses in January. Much of this spending is for pet-sitting when I travel.
• Look at my food spending! Holy cats! I’ve been pushing hard to reduce this over the past five years, and January was a shining example of what I can get this down to if I try. Kim and I didn’t feel deprived. We just made smarter choices.
• Finally, when I’m not drinking, my spending on sin — which includes alcohol, occasional tobacco, and legal pot — falls off a cliff. Obvious, but also wow.

I know I’ll spend more in February than I did in January. Our theater tickets renew and that’s a $1500 expense, for instance. Still, I expect that I’ll continue this trend toward reduced spending, and I’m glad. It makes me happy. It’s yet another way that 2020 is off to a better start than 2019.

Why It’s Important to Track Your Spending

It might seem strange that I’m such a vocal advocate of expense tracking. After all, don’t I have all of the money I need? I do. But I think part of the reason I keep that money is because I’m so vigilant with my spending.

In fact, this seems to be a key habit with most wealthy people I know. They keep tabs on where there money goes. In The Millionaire Next Door, the authors write that the three words that best describe the wealthy are “FRUGAL FRUGAL FRUGAL”. They also point out that most millionaires keep budgets.

Tracking your spending demystifies money. You begin to perceive it as a tool. You gain a sense of power; you no longer feel that money controls you, but that you control money. Your awareness of your money habits is heightened, allowing you to make changes to improve your situation. You begin to understand how your one-DVD-a-week habit affects other parts of you your life.

When you track your spending, it’s important not to make judgments in the moment. This activity is meant to describe your money habits, not to change them. (You probably do want to change them, of course, but that’s a different task.)

To make it easier to track your spending, remember the following:

• Be careful with transactions that are easy to forget. Some transactions – cash transactions, online transactions, transactions without a receipt – are quickly forgotten. Take special steps to remember these, such as…
• Get a receipt for everything. It’s easy to forget where you spent your money yesterday morning. Make a habit of always asking for a receipt. Keep them in one place so you know where to find them.
• It’s best to process your transactions daily. The more diligent you are about recording your expenses, the less likely you are to forget something. But daily book-keeping can be a chore. Try to do this weekly at the very least. (Make it a habit, a ritual. Do it at the same time every Saturday morning, for example.)

Expense tracking paints a picture of your spending habits as they actually exist – not as you think they exist. You can use this information to build a budget and to set financial goals. At the very least, you’ll get a snapshot of where your money has been going. Without doing this, it’s difficult to know how much you’ve really been spending – and what you’ve been spending it on.

Plus, if you’re a money nerd like me, it’s fun to track your spending. I love putting the numbers in by hand, then looking at the data with different graphs and reports.

How to Track Your Spending (and a Rant)

During the 1990s and 2000s, it was easy for a curious person to track her spending. There were a variety of tools she could use: Quicken, Microsoft Money, Andrew Tobias’ Managing Your Money. Nowadays, though, your pickings are slim.

Yes, I know there are all sorts of apps out there that purport to track your spending. My business partner Tom uses Mint. Many folks are fans of Personal Capital. And, of course, Quicken still exists.

Although I do use Personal Capital (here are my thoughts on the pros and cons of Personal Capital), I do so primarily for its nifty retirement planner. I’m not a fan of automated money trackers, those that download and categorize info from your financial institutions. I feel like Mint and Personal Capital don’t do a great job at this. Plus, I track my spending because I want awareness. Manual data entry helps with this.

That means I want a tool like Quicken, which allows me to enter info by hand.

But even Quicken has become problematic. Are you ready for a rant? Tough. You’re going to get a rant.

For years, I used Quicken 2007 for Macintosh. I love Quicken 2007. It’s everything I could want in a money-management tool. It replicates the feel of a check ledger, which appeals to old men like me. It’s ugly, but that’s okay because it’s filled with functionality. I’ll take personality over pretty any day!

The downside? It doesn’t run on modern versions of the Macintosh operating system. To keep using it, I have to hold on to an old iMac with an old version of the OS.

Quicken 2017 is…okay. It’s certainly much prettier than the older version, and it does its job reasonably well, but that’s about the best I can say for it.

Entering transactions manually (which is how I enter transactions) is maddening. There’s no way to do this quickly. There’s a serious lack of reporting tools, and what reports do exist have limited functionality. (Want to get a net worth report for a specific date? Sorry. You can’t.)

Here’s my detailed comparison of Quicken 2007 and Quicken 2017.

How frustrating is it to enter transactions into Quicken 2017 compared to Quicken 2007?

Today, it took me nineteen minutes to enter twenty transactions into the new version. This is partly due to the crappy UI and partly because I had to track down (and fix) a couple of strange ways it handled account transfers (such as paying a credit card from a checking account). When I drove home and re-entered these same twenty transactions into Quicken 2007, it only took me six minutes and everything worked as expected without any fuss on my end.

Despite this, I had made the decision to move everything to Quicken 2017. Last October, I made the switch. Then, last week, I got this email from Quicken.

As of 30 April 2020, Quicken 2017 will no longer support downloading stock prices. In fact, all automated downloads and connections will be disabled. But hey! If you upgrade to the new version of Quicken — which is now a subscription-only product (meaning you have to pay every single frickin’ year) — you get to save 10%.

This is bullshit of the highest order.

When companies do this, it makes me livid. There’s no way in hell I’ll upgrade, and there’s no way I can in good conscience encourage you, my readers, to support Quicken if they’re going to pull this sort of bullshit.

So, I’ll be sticking with Quicken 2007. Thankfully, Quicken doesn’t have the power to disable features in that version of the program. They can’t force me to upgrade. And since it’s a superior product to 2017 anyhow, I’m okay with that. But it means I have to keep one computer on hand that I don’t upgrade to a new version of the OS.

What if you don’t have access to Quicken 2007? How should you track your spending? Here are a few possibilities:

• If you’re in the early stages of money mastery, I recommend You Need a Budget. Yes, YNAB uses a subscription-based model, but I’ve heard enough people rave about it to recommend it. (Plus, I like the YNAB philosophy.) Here’s my YNAB review.
• If you don’t want or need manual data entry, use an app like Mint or Personal Capital. Personally, I’d go for Personal Capital. I’ve heard reports that more and more, people feel like Mint is fading away.
• If, like me, you want an online tool that allows manual entry, find an older version of Quicken somewhere. If you’re a PC user, you might consider using Microsoft Money. This product is no longer published (or supported) but Microsoft offers a free download of the final version of Microsoft Money Deluxe from ten years ago.
• If you use Quickbooks or something similar to manage your business finances, it’s possible to also track your home finances with that software. (But I don’t think accounting tools will integrate investments. I could be wrong.)
• Many people actually use home-brewed systems for expense tracking. Most of these are built around customized spreadsheets, although I’ve also seen people who use pen and paper (!!!) to track their spending.

Ultimately, it doesn’t matter which tool you choose. What matters is that you track your spending.

Conclusion

Expense tracking is one of the cornerstone habits of smart personal finance. Not everyone needs to do this, of course. Some folks have so much money and spend so little that expense tracking becomes unnecessary. Others are naturally hyper aware of their behavior. But for most of us, expense tracking grants keen insight into how we use our money.

Unfortunately, there’s no great solution right now for folks who want software that allows manual data entry.

The last time I complained about this, one GRS reader suggested that I create my own software tool. Honestly, that’s not a bad idea. I probably no longer possess the skills to code this myself, but I do possess the experience, knowledge, and opinions that would help me design a piece of software that could be useful and effective. Plus, I’m not motivated by greed, which I think is a bonus.

For now, I’ll continue to use Quicken 2007. It’s a small hassle to keep an old iMac around with an old version of Mac OS, but I can do it. When that computer dies, though? Well, I’m not sure what I’ll do.

Like me, my buddy John at ESI Money is a long-time Quicken user, with data going back to 1994. Like me, he enters transactions by hand. Like me, he recently tried to upgrade. Unlike me, he intends to continue using the new version of Quicken.

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Effective tax rates in the United States

For the most part, the world of personal finance is calm and collected. There’s not a lot of bickering. Writers (and readers) agree on most concepts and most solutions. And when we do disagree, it’s generally because we’re coming from different places.

Take getting out of debt, for instance. This is one of those topics where people do disagree — but they disagree politely.

Hardcore numbers nerds insist that if you’re in debt, you ought to repay high-interest obligations first. The math says this is the smartest path. Other folks, including me, argue that other approaches are valid. You might pay off debts with emotional baggage first. And many people would benefit from repaying debt from smallest balance to highest balance — the Dave Ramsey approach — rather than focusing on interest rates.

That said, some money topics can be very, very contentious.

Any time I write about money and relationships (especially divorce), I know the debate will get lively. Should you rent a home or should you buy? That question gets people fired up too. What’s the definition of retirement? Should you give up your car and find another way to get around?

But out of all the topics I’ve ever covered at Get Rich Slowly, perhaps the most incendiary has been taxes. People have a lot of deeply-held beliefs about taxes, and they don’t appreciate when they read info that contradicts these beliefs. Chaos ensues.

Tax Facts

When I do write about taxes — which isn’t often — I try to stick to facts and steer clear of opinions. Examples:

• The U.S. tax burden is relatively low when compared to other countries.
• The U.S. tax burden is relatively low when compared to U.S. tax burdens in the past.
• A large number of Americans (roughly one-third) pay no federal income tax at all.
• Despite fiery rhetoric, no one political party is better with taxing and spending than the other. The only period during the past fifty years in which the U.S. government had a budget surplus was 1998-2001 under President Bill Clinton and a Republican-controlled Congress.

Even when I state these facts, there are people who disagree with me. They don’t agree that these are facts. Or they don’t agree these facts are relevant.

Here’s another fact that can stir the pot: The United States has a regressive tax system. That is, low-income earners pay a larger share of their income to taxes than high-income earners do. I’m not here to comment on whether or not this is a good thing or a bad thing, but it’s a fact.

Yesterday, I read an article that complained the wealthy are taxed too much. (I wish I could find the article again but I can’t. It was an aside in some other piece, and I can’t figure out which one.) The author made an argument along these lines: “The top five percent of income earners pay half of all taxes in the U.S.” (My numbers aren’t quite right there because I can’t find the source, so don’t focus on them. But you get the gist of the author’s argument.)

While this statement is true, I feel that it’s meaningless in isolation. What percentage of income do these top earners make? I’d bet big money that their share of the income pie is much larger than their share of the tax pie.

Effective Tax Burden

To me, what matters most is each individual’s effective tax burden. Your effective tax burden is usually defined as your total tax paid as a percentage of your income. If you take every tax you pay — federal income tax, state income tax, property tax, sales tax, and so on — then divide this total by how much you’ve earned, what is that percentage?

This morning, while curating links for Apex Money — my second personal-finance site, which is devoted to sharing top money stories from around the web — I found an interesting infographic from Visual Capitalist. (VC is a great site, by the way. Love it.) They’ve created a graphic that visualizes effective tax rates by state. Here’s a summary graph (not the main visualization):

As you can see, on average the top 1% of income earners in the U.S. has an effective tax rate of 7.4%. The middle 60% of U.S. workers has an effective tax rate of around 10%. And the bottom 20% of income earners (which Visual Capitalist incorrectly labels “poorest Americans” — wealth and income are not the same thing) has an effective tax rate of 11.4%.

Tangent: This conflation of wealth with income continues to grate on my nerves. I’ll grant that there’s probably a correlation between the two, but they are not the same thing. For the past few years, I’ve had a low income. I’m in the bottom 20% of income earners. But I am not poor. I have a net worth of $1.5 million. And I know plenty of people — hello, brother! — with high incomes and low net worths.

Is this system fair? Should people with high incomes pay more? Are we talking about numbers that are so close together that it doesn’t matter? I don’t know and, truthfully, I don’t care. I’m concerned with personal finance not politics. But I do care about facts. And civility.

The problem with discussions about taxation is that each side talks about a different number. When Republicans say high-income earners pay more, they’re talking about raw numbers. And they’re correct. When Democrats say low-income earners pay more, they’re talking about taxes as a percentage of income. They’re also correct. But this is like comparing apples to oranges.

Final Note

Under the Digital Accountability and Transparency Act of 2014, the U.S. Department of the Treasury was required to establish a website — USASpending.gov — to provide the American public with info on how the federal government spends its money. While the usability of the site could use some work, it does provide a lot of information, and I’m sure it’ll become one of my go-to tools when writing about taxes. (I intend to update a couple of my older articles this year.)

The USA Spending site has a Data Lab that’s currently in public beta-testing. This subsite provides even more ways to explore how the government spends your money. (I also found another simple budget-visualization tool from Brad Flyon at Learn Forever Learn.)

Okay, that’s all I have for today. Let the bickering begin!

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