Guest Poster, Author at Lazy Man and Money

What You Can Do To Get Your First Paid Freelancing Client

July 13, 2016 by Guest Poster 1 Comment

The following is a guest post from Martin of Studenomics, where he writes about financial freedom in your 20s without missing a party. For more tips, check out his book, Next Round’s On Me.

“He said that I didn’t charge enough so he offered me more money because he felt bad for me.”

A student of mine actually told me this. He wasn’t confident enough to ask for a higher rate so he put out a low offer just to get the gig. He wanted to charge $120 for the two hour gig. The guy offered him $150 since that was his budget for the project. I’m happy for him that he’s finding clients now. He’s actually struggling to keep up with all of the demand now.

Let’s go back a few months…

Trevor was struggling to find any clients. I told him that I had a friend who wanted some video work done (Trevor produces videos). The good news was that he could get some experience. The bad news was that he would only get paid in experience. The friend was only offering $20 and dinner. I told Trevor to take this because this friend has a deep network (he knows lots of cool people).

Trevor and this guy hit it off. They were recording until 4am and cracking jokes (hopefully not about me). This guy even ended up giving Trevor a ride to a presentation an hour away when nobody else was available. Once the video went live, everyone was asking about who created this video.

Suddenly Trevor had a new paid client. The pay would only be $20 a video. The good news was that this guy wanted videos done on a weekly basis. Once again, this client led to more paying clients.

How can this story help you find your first freelancing client?

Don’t feel sorry for yourself if nobody’s paying you yet.

You haven’t established yourself. That’s okay. We all start somewhere. Nobody’s going to throw money at you just because you put up a business page and ordered a stack of business cards.

You have to offer high quality work for free. Just because you’re not getting paid it doesn’t mean that you have permission to slack off. You have to prove your worth to the world. You have to build up a portfolio so that we can see what you’re capable of.

Would you ever pay someone for anything without seeing at least some proof of their abilities?

Stop worrying about the useless stuff.

Yes, business cards are great. No, you don’t need them. You don’t need to spend money on printing business cards when you haven’t made a penny yet.

You don’t need to worry about getting an expensive design for your website either.

You have to find people willing to trust you to take you up on your service.

Too often do I see new freelancers get lost in the world of useless stuff. Focus on becoming the best at the service that you provide and then get the word out. That’s all that matters when you’re getting going as a freelancer. The world doesn’t need another fancy business card.

“Great marketing is all about telling your story in such a way that it compels people to buy what you are selling.” — Gary Vaynerchuk

Remember that nobody cares about your problems.

We hire freelancers and outsource work to make life easier. We want problems solved. That’s all. You do the work and that’s that. Nobody wants to hear about your problems. You’re now a problem solver. You have to be able to solve every problem that comes your way. Never respond with an excuse.

Promote the hell out of your work.

You need to create some quality work and then promote it.

This can be your highlight reel, your portfolio, a sample of your work, or a happy customer.

You have to get the word out. Let us know about what you’re doing and how amazing it is. You’re never going to find a paying customer if you keep your best work a secret.

Ask for testimonials and referrals.

Nobody wants you until somebody has you. We all ask a friend before we try anything (from a new place to eat to logos for a website). This is why you need to ask for testimonials and referrals. Testimonials help because the more people who promote your work, the more likely someone else is to pay you.

The two most important steps here in the process are:

Create quality work for free or a low cost to let people know what you have to offer and to build your portfolio.
Ask for testimonials and referrals.

You do this a few times and you’ll have no trouble finding clients. We all tell our friends about a great service. The toughest part is getting started. Once you get the ball rolling you’re going to be fighting clients off.

That’s how you can get started with freelancing and find your first paying client. Good luck to launching your freelancing career.

Four Ways to Earn Passive Income by Investing in Real Estate

June 9, 2016 by Guest Poster 1 Comment

[Editor’s Note: The following is a guest post by Ben Miller, CEO & Co-Founder, Fundrise.]

Most of us earn a living based on the work we do five days a week and then every few weeks or so we receive a paycheck. When we quit working, the paychecks stop and we’re left with whatever money we may have saved. This is called active income.

However, some people (likely including the visitors to Lazy Man and Money) are fortunate and smart enough to strive to build what are known as residual or passive income streams, payment that you continue to earn even after the work required is done.

How can you earn residual income?

When given the option, most of us would much prefer to continue to reap the benefits of our work even after we’re done. Why then do so many people support themselves only through active income? One answer is that most assume the ability to earn residual income is a luxury that can only be created if you’re already wealthy. However, there are many ways to create residual income streams that don’t require huge upfront investments.

One of the most well known forms of residual income is owning stock in a publicly traded company. Residual income streams can also include royalties from the sale of a book or song. Additionally, real estate — both residential and commercial — has become one of the most popular ways to build residual income. Historically, building a residual income stream through real estate has required a large upfront investment, both of time and money, but thanks to new investment vehicles those wanting to earn passive income through real estate have many options to choose from.

Ways to Build Residual Income through Real Estate

Real Estate Investment Trusts (REITs)

In the 60’s, Congress passed a law creating Real Estate Investment Trusts, large portfolios of income-producing real estate. A REIT is required by law to distribute 90% of its earnings to investors each year. Due to their special tax status, REITs must follow strict compliance standards and thus carry a certain quality standard for both the vehicle’s investment strategy and the real estate experience of the managing team.

Today, an estimated 70 million Americans invest in REITs.

There are two primary types of public REITs: traded and non-traded. Traded REITs offer the benefits of being traded openly on an exchange, giving investors liquidity. However this liquidity is likely to be priced into the value of the shares, resulting in a “liquidity premium”, or lower relative returns for all investors, regardless of whether or not they choose to sell their shares. Furthermore, traded REITs tend to be correlated to broader market volatility, meaning that the value may fluctuate depending on how the stock market is doing, regardless of whether or not anything has changed with the underlying properties owned by the REIT.

On the other hand, non-traded REITs have become more popular because of the perceived consistent double-digit dividends. However, non-traded REITs have recently come under heavy scrutiny because of the large upfront fees often charged to investors — and dubious practices around the disclosure of those fees.

New Technology Platforms

In the past few years, new platforms have emerged that use technology to make the process of real estate investment more efficient, resulting in increased transparency, lower fees, and higher returns. As the broader financial technology space grows, more and more investors are moving to online platforms that give them more control over their finances and take advantage of the efficiencies that transacting on the web can offer.

These companies aim to offer the benefits of public market access, but with lower fees that potentially help investors earn better returns. Fundrise, one of the pioneers in the space, has leveraged both technology and new federal regulations to offer investors the first ever low-fee, diversified commercial real estate investment available directly online to anyone in the United States, no matter their net worth.¹ Fundrise is working to do to real estate what Vanguard did to stocks – create a low-cost way for individuals to invest a diversified pool of assets. The savings they generate through more efficient technology are passed on to investors in the form of potentially better risk-adjusted returns.

Over the past six months, the company has launched the first ever eREIT^TM investments – two different $50 million real estate investment trusts both with direct online distribution models. You can learn more about Fundrise here.

However, it’s important to remember that every platform uses a different set of due diligence criteria to determine what investments it offers its members and, as with any investment, investing in real estate through an online platform carries significant risk.

Investment Property

An investment property is an asset purchased with the sole purpose of earning revenue, through leasing space within an asset or an eventual sale. Owning an investment property can result in both potential appreciation value over the long-term and direct tax benefits of depreciation.

However, acquiring an investment property often requires a large upfront investment ($100K to several million dollars depending on the type of asset) and lots of hands on work. Furthermore, as with any investment, investment properties carry the risk of large, unexpected, and costly problems, which many investors do not have the experience or time to effectively handle. An investment property is relatively illiquid — meaning you can sell at any time, but the sale process can often take months and may be unsuccessful.

Private Equity Funds

Conversely, a private equity (PE) fund is a collective investment fund that pools the money of many investors to invest in real estate. Private equity funds often consist of several different investments, which increases diversification for investors. Additionally, PE funds are often managed by real estate experts with very rigorous underwriting standards.

Traditionally private equity fund investments are illiquid and carry high investment minimums. Private equity funds are often formed by institutional investors and high worth individuals with a “two and twenty” fee structure, meaning a 2% annual asset management fee, and 20% of any profits earned by the fund.

Regardless of which avenue you decide to pursue to earn residual income, an essential part of the investment process is objectively evaluating each opportunity as it arises and working hard to remove any preexisting biases. Take your time to figure out which approach makes the most sense for you and your investment goals and remember that diversification into different asset classes is one of the most effective ways to build unique streams of residual income, and a profitable portfolio!

This information does not constitute an offer to sell nor a solicitation of an offer to buy securities, nor does it contain any individualized tax advice. The information contained herein is not investment advice and does not constitute a recommendation to buy or sell any security or that any transaction is suitable for any specific purposes or any specific person and is provided for information purposes only. Each investor should always carefully consider investments in any security and be comfortable with his/her understanding of the investment, including through consultation with investment and tax professionals.

1. However, under the Regulation A+ rules, each investor is limited to investing no more than the greater of 10% of such investor’s net assets or gross annual income.

Betterment: Investing the Lazy Way

May 18, 2016 by Guest Poster Leave a Comment

I’m testing a new writer today. I’ve been meaning to write about Betterment (and other Robo-Advisors), but I thought I’d get another perspective. Let me know what you think in the comments.

Betterment is a complete online investing company that assists you in tailoring and determining your financial future. Betterment takes a look at your current financial situation in relation to your fiscal goals and where you’d like to see yourself in the short versus the long term. From there, it develops a personalized plan so that you can achieve your specified financial goals. Award-winning experience, smarter automation and better retirement planning are all part of the Betterment experience.

Betterment Trading Platforms

Betterment capitalizes on an assorted selection of exchange-traded funds. What Betterment does is invest in fractional shares—a unique strategy implemented so that you can reevaluate your investment goals in a shorter time frame. You define the precise amount you would like to invest and Betterment takes cares of the rest. By looking at your dividends and deposits, the automated investment broker rebalances your objectives, all while maintaining a low tax bill by reducing the need to rebalance (via selling). Betterment’s trading platforms work with six decimal points of accuracy, using all income funds to round up any imbalances in your situations

Betterment Fees

Betterment differentiates itself from competitors by utilizing an advanced technology which affords clients lower monthly and yearly fees. Where traditional account fees will run you approximately $83 per month at 1% annually, Betterment only charges $13 per month at 0.15% annually –a substantial difference, especially over a long period of time. The basic tenant of Betterment is that it lets you have more money to invest and the more you invest, the fewer fees you pay.

A few other advantages include no trade fees, no transaction fees and no rebalancing fees.

Betterment Account Minimums

Those who invest with Betterment have peace of mind knowing that they pay absolutely zero in commissions or transaction fees. Customers’ investments are collected via a three-tier foundation, which is dictated by account balance.

There is no account minimum with Betterment but it is suggested that you invest at least $10,000 in order to avoid paying additional management fees. Accounts that maintain a balance less than $10,000 are subject to an annual fee of 0.35% of the account balance, with a minimum of $100 a month in auto deposits. In the event that you cannot deposit $100 a month, a $3 monthly service fee will be charged. For those accounts of $10,000 to $100,000, the annual fee goes down to 0.25% and then down again to 0.15% with accounts that maintain more than $100,000.

Personalized Goals

We all have a vision of where we’d like to see ourselves during those retirement years. Betterment includes well thought-out goal-setting exercises so that the perfect investment plan can be determined for you. Factors such as age, current annual income, and expenses are all part of the questionnaire. Why do they ask? In order to determine your precise objectives.

The Smart Deposit feature that Betterment offers, takes out unnecessary funds from your checking account and automatically deposits them into your retirement investment. This is done through weekly monitoring where Betterment Smart Deposits looks at your weekly expenses and allocates how much you need. A determined sum of access funds are then transferred from your checking account to your investment account.

Tiers

Betterment Investments offers three tiers to you: Builder, Better and Best. Builder offers 0.35% of average balance with $100 per month direct deposit required. Better offers 0.25% of average balance with a $10,000 minimum account balance. Best offers 0.15% of average balance with a $100,000 account balance minimum.

Feature of Betterment

Apart from being completely self sufficient in its investment plans, goals, strategies, objectives and projections, Betterment offers portfolio rebalancing, tax loss harvesting, goal setting, and automated deposits. Your funds are situated where they will be optimized and where they use low cost, liquid ETF’s. You ultimately have complete control and the ability to maneuver your funds in any way you see fit with Betterment. Betterment simply suggests the best possible options for optimizing your funds. You maintain the freedom to adjust, change, eliminate or add anything you want to your investments whether it’s risk preference or smart deposits.

Betterment lives up to the utmost in security so rest assured that your accounts and investments are in compliance with the banking industry standards.

How to Build Growing Income Streams with Dividend Growth Investing

May 3, 2016 by Guest Poster 3 Comments

This is a guest contribution from Ben Reynolds at Sure Dividend. Sure Dividend uses The 8 Rules of Dividend Investing to build high quality dividend growth portfolios.

Here’s a novel concept… Your investments should pay you money every year. Even better, your investments should pay you more money every year.

There was a time when most investors thought this way – and so did publicly traded companies. The S&P 500’s historical average dividend yield is 4.4%.

But things have changed. Lazy Man at “Let’s Generate Cash” sums the zeitgeist up nicely:

“Sometimes I forget that people once bought stocks to generate cash. Companies would pay out profits to shareholders and shareholders could use that money, to well, buy stuff they need. It was a good little system. I speak of it in the past tense because many companies stopped paying dividends and instead kept the money to grow profits.”

Today, the S&P 500 offers investors a dividend yield of 2.1% – less than half of its historical average. You may be wondering “what happened”?

Why Yields Have Fallen

There are various contributing factors. The primary factor is a change in corporate policy. Share repurchases have dramatically increased. Instead of paying money out to shareholders in the form of dividends, businesses are buying back their own stock.

Don’t get me wrong, share repurchases are beneficial. When you reduce the number of shares outstanding, each share remaining entitles you to a bit more ownership of the business.

Share repurchases are great for managements. That’s because management compensation is often tied to share price increases. Share repurchases help to boost share prices – and trigger incentive packages for management… But they do not put cash into the hands of shareholders.

So that’s what happened.

The good news is, there are still many companies that pay high dividends and increase their dividends every year. This article explains how to invest in these dividend growth stocks to build growing income streams.

Where to Find Dividend Growth Stocks

Dividend growth stocks are companies that:

Are still growing
And paying dividends

Pretty straightforward, right? They pay growing dividends over time. The best dividend growth stocks increase there dividend payments every year.

The amazing benefits of compounding this creates will be discussed a bit later… For now, here are some places you can quickly find dividend growth stocks:

The Dividend Achievers List: 200+ businesses with 10+ years of consecutive dividend increases
The Dividend Aristocrats List: 50 businesses with 25+ years of consecutive dividend increases
The Dividend Kings List: 15+ businesses with 50+ years of consecutive dividend increases

These are all great places to find high quality businesses with long histories of paying rising dividends.

Dividend Aristocrats in particular have done well for investors. They have outperformed the market by over 3 percentage points year over the last decade.
Source: S&P Dividend Aristocrats Factsheet

The real benefit to owning these businesses is how they increase your dividend income over time.

Investing Monthly & Compounding

You don’t have to be rich to start your dividend growth portfolio, you just have to be consistent. It pays to invest monthly.

Imagine you invest $600 a month into different dividend growth stocks. Now imagine that (on average) you are investing in businesses with 3% yields that increase their dividends by 6% a year. You are also reinvesting your dividends back into the market.

These are very reasonable targets when selecting from the lists discussed earlier.

After 1 year, you will have invested $7,200. Your investment will (on average – remember, the market fluctuates) be worth $7,492. That extra $292 is from both growth in the businesses you invested in, and the dividends they pay.

Now if you stopped saving after year 1 and spent the dividends on random expenses you’d get $225 in extra income every year… But you’d get a 6% raise (on average) every year without having to invest any extra money. The next year, you’d get $238, then $253, and so on. Your investment would keep paying you more every year.

That’s because the underlying businesses in which you invested in keep growing and raising their dividends.

That’s what would happen if you only saved one year and then stopped reinvesting your dividends. If you keep saving and reinvesting your dividends, you’d be a millionaire in 30 years – and would be generating over $30,000 a year in passive income that would still be growing every year.

Ideas To Start Your Portfolio

Here’s how you can start your portfolio.

Step 1: Get your budget in order. Start saving, today.
Step 2: Open a discount brokerage
Step 3: Being investing!

You probably have some questions on step 3. There’s 2 ways to do this. The ‘easy way’, and the ‘cost effective way’.

[Editor’s Note: I’ll give you what I believe is the perfect combination of “easy” and “cost effective” at the end of the article. You don’t want to miss it.]

The easy way is investing in an excellent dividend growth ETF. The Dividend Aristocrats ETF (NOBL), the Vanguard Dividend Appreciation ETF (VIG), and the First Trust Value Line Dividend ETF (FVD) are all very good choices.

The downside to all these ETFs is that they have expense ratios – you have to pay every year to invest in them. You also don’t get to select what businesses you want to invest in. The upside is you save a lot of time.

The cost effective way is to select businesses from the 3 lists outlined earlier in this article. I recommend looking for the following:

Businesses you understand well (the Coca-Colas and Procter & Gambles of the world)
Stocks trading below a price-to-earnings ratio of 20 (at most), and preferably under 15
Stocks with long histories of dividend increases every year (I prefer 25+ years)
Stocks with dividend yields above 3%

If you invest in businesses like this every month, over time you will build a well-diversified portfolio of high quality dividend growth stocks trading at fair or better prices.

[Editor’s Note: I highly recommend readers look into Motif Investing which is a perfect combination of easy and cost effective for dividend investing. Read my review here.]

Understand the Psychology of Spending and Overcome it

April 11, 2016 by Guest Poster Leave a Comment

The following is a guest post by Tina Roth. She advises about developing positive habits to help you live a rich and financial secure life. Her finance blog was created to inspire people to explore more on frugal living and especially, to help you craft a financial secure life.

Earlier, mistakes were just mistakes. But after the discovery of the subconscious mind, some mistakes came to know as Freudian slips. We commit those mistakes because the subconscious mind compels us, and the conscious mind couldn’t recognize the compulsion.

Psychoanalysts believe such compulsions are behind habits. Many habits including the habit of spending are the results of psychological impulses. The era of globalization has taught us to identify ourselves as consumers, so impulsive spending appears justified.

Habitual spending

But spending out of impulse is financially disastrous. In this article, I discuss the psychological factors that trigger spending, and how to make peace with them.

Imaginary competition

We feel we need to compete with others when we don’t. Imagine your neighbor has bought a Land Rover recently. When you see him driving his new car, a subconscious impulse of competition will kick in. You’ll probably end up buying the latest model of Chrysler.

Big brands are responsible for this. Through advertisement, they create this false sense of competition, so their products get sold. And we end up buying stuff that we either don’t necessarily need or already have the inexpensive replacement. If you could resist advertisement, and ignore others, who show off, your personal finance will stay safe.

Discount offers

It’s a sales hack that forces someone to buy. Behavioral psychologists hold when we see sales pitches like “Save 60%” or “Offered at 50% Discount”, the psychological impulse to buy the so called discounted product triggers. The product that you are buying may not be coming with a discount at all.

How can you get over this impulse?

You need to keep two things in mind. Firstly, the discount may be fake. If a retailer is selling something to you at a price of $200 and claiming to offer you a 50% discount, then the original price of the item is $400. Are other retailers selling the same item at $400? If not, then it was a phony discount only to lure you. Besides, Getting a product at a discounted rate doesn’t mean you are getting it free. You are still spending money. Is the item worth spending buying?

Spending out of boredom

You might find it hard to believe, but it’s true. A lot of people spend money because they are too bored to do other things. This segment of consumers mostly includes females. As a matter of fact, some psychotherapeutic techniques use shopping to alleviate stress.

The best way to overcome spending out of boredom is to do something else instead of shopping when bored or stressed out. Watch movies on Netflix, play with your kids, listen to music. Spending money when you are bored may give you a pleasant experience, but hurts your finances.

Credit cards

Some people attempt to justify spending saying it’s an investment. But that’s always true. One example such example is having an extra credit card.

Some might argue that having more credit cards help to increase the credit score. Well, that’s only partially true. Having more than one card doesn’t increase the score alone. The cardholder needs to keep the credit utilization ratio low, which is possible only if he spends only 10% of the credit limit.

Very few people keep their cards under-utilized, rather they spend money lavishly, which increases their debts and hurt their finances.

Instant gains

A survey was done by a group of psychologists. They gave the surveyees two choices. The surveyees could either receive $50 instantly or wait for a year and then receive $200. Most surveyees went with the former option. This has made the surveyors conclude instant gratification is a basic tendency.

Putting a leash on the desires for instant gains is necessary. Or else, one would spend money for frivolous purposes and ignore serious ones. For example, investing in health insurance or life insurance can bring substantial gains in the foreseeable future. But due to the urge for instant gratification, one might spend the money for a trivial purpose.

Budgeting skills

Budgeting may appear like an uncomplicated and simple task, but it can be daunting at times, especially if you don’t know how to budget. Budgeting can make you a prudent and frugal person, who knows his finances, and spend only when it’s necessary to spend.

Shopaholics are known to overspend. The majority of them are either in their 20s or 30s. This is the time in one’s life when he should learn to manage and understand money. Budgeting skills help you to manage your money better. As you create two tabs, one for earning and another for spending, you get to see from which areas, money is coming and how it is flowing out.

You’ll eventually want to stop the outflow and increase the inflow. This drive will replace the urge to spend and turn you into a saver from a spender. Budgeting in your 30s and 40s is very important because this is the time when people earn, try to save and fail.

What do you think of the article? Do you understand the psychology behind spending? Would you follow the tips given here to overcome impulse spending?

What You Can Do To Get Your First Paid Freelancing Client