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How to Be Your Own Boss with Little (or No) Money

How to Be Your Own Boss with Little (or No) Money

It is easy to get sick of the grind: the dismal 9-5 system. Maybe you spend too much time for too little money. This is so ingrained in our minds that any alternative way of making money or becoming our own bosses seems to be a Herculean task. However, this difficulty is illusory. The secret to being your own boss and making decent money relatively easily away from traditional work may just lie in network marketing.

What’s Network Marketing?

Network marketing is a popular method of business and an alternative form of product distribution.[1] The traditional method of distributing products to customers is one we’re all pretty familiar with. Products are manufactured somewhere, then sent to a distributor who sends it to stores to be brought by customers. Its relatively straightforward and lots of people profit along the way. However, network marketing provides a different system.

With network marketing the distribution is done through a network of agents who market the products to other individuals. These agents may have other people under their leadership who market goods to others. Profit is made via direct sales and distribution of the products.

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“Wait. Is this a….?I know what you’re thinking. “Pyramid scheme”, right? While they are admittedly similar systems, there is one crucial difference.

Pyramid schemes focus on the money being made through the recruitment of others. These people may be duped into thinking that through the pyramid scheme they will easily find their fortune, when really they are just the means for others to make money. With network marketing the focus is on selling and distributing the products- not the recruiting of others.

It can be such an effective system that some very well-known companies operate and sell their products through network marketing. One of the most well-known examples of this is Tupperware.

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The good things about network marketing:

  • Why should you consider network marketing? For a start, it gives you a degree of freedom that an ordinary 9-5 job can’t possibly offer.[2] To an extent (meaning you’ll still need to get things done), you will be able to tailor your marketing around your life, working from home as you do so. There is no income cap. If you get really good at selling you will earn more money.
  • You’ll be your own boss without worrying about hiring and firing because there will be no employees. Whilst you may form relationships with other agents and marketers, you won’t need to worry about paying wages and all of the other responsibilities the boss of a regular business must handle.
  • Even when you’re not on the clock you will still be able to generate income. Network marketing relies on it.[3] You’ll be able to benefit from residual income if you help others start in the business.
  • Many of us have had to suffer the pains of being laid off or fired.
    Assuming you are successful at getting your network marketing business off the ground, you will have unbeatable job security. You’re your own boss after all!

The not-so-good things about network marketing:

Now before you think I’ve drunk the cool-aid and am now off to start a pyramid scheme, there are some negatives that are very much worth consideration. The most obvious is the clear similarity to pyramid schemes. If you do plan to involve yourself, you need to be sure that you are engaging in a legitimate network marketing system – not a pyramid scheme which is illegal. This will require significant diligence and research on your part to be sure, but a good rule of thumb is to note how the money is made.

The Federal Trade commission says the following about the difference between network marketing and pyramid schemes:[4]

“They all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program- not based on profits from any real investment or real sale of goods to the public.”

However, with direct marketing, the focus is money made via sales – not recruitment. When it works, network marketing can be hugely beneficial for all parties involved.

There are other considerations too:

  • Most sales you’ll make will be face to face.[5] Only a small fraction of sales through network marketing occur online and instead will be face to face or over the phone. This is something you’ll need to be comfortable with.
  • Even if you are comfortable with selling face to face, you will have to get used to rejection.
  • It is not usually a get rich quick scheme. It can take time and some investment to set up and even then you’ll be competing somewhat with other agents. Although it’s possible to make a lot of money, it probably will not happen fast.

So, how do you start?

The good news is that getting started in network marketing is a relatively simple process.[6]

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Firstly you need to decide on a product that you want to sell.

A popular choice is nutritional products.[7] Initially you will have to invest some money to register with the company and buy the product you wish to sell.

These prices can vary but often begin around $100. Companies like Tupperware, who are built around network marketing, offer down payments. Considering the amount of money they charge to get started is crucial because whatever is required you will have to recoup before you can make a profit.[8]

Many people are experienced and successful in network marketing and can serve as mentors.

It is advisable to listen to what they say. Companies experienced with network marketing will likely have systems in place to help you get started. After all, you’re part of the way they will make money.

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Spread the word that you are in business.

You should consider building a website, or market through social media, classified ads, and even to friends and family. (We’ve all heard of Tupperware parties which for all intents and purposes, are super-casual trade shows.)

After considering this information, all you need to do is select your company and get selling!

Reference

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

Reference

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