Lazy Man and Money

Income Streams: The Forgotten FIRE Ingredient

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income streams

Are you looking for a safe retirement? In these uncertain times, the best plan is to have multiple income streams. For the first time in 11+ years the stock market has fallen fast. (It’s recovered over the last few days, but I feel it is temporary.) The last time the market had this kind of drop it was 2008. While there was a concept of FIRE in the personal finance community, the acronym of Financially Independent/Retire Early simply wasn’t used. It was a lot like Kim Kardashian in 2006. She existed, but not many people knew who she was.

This is the first time that there’s a “trial by fire” of FIRE. Everyone is an investing genius when there is a decade-long bull market. This is the time that all those plans get put to the test.

I hope all the FIRE folks are doing well. I think the vast majority of them are. I haven’t heard any stories of financial ruin, yet.

I have faith that the FIRE crowd is doing well. I asked this question:


Only two people responded that they were only dependent on investments. I hadn’t followed or heard of either of either one. They seem to be doing okay.

Mentally, I thought of all the people I know who are FIRE and they all had one thing in common: an income stream other than stocks/dividends. Most are bloggers and earn an income from their blog (*raises hand*, though we’re not really FIRE). Some have books. Some are money coaches on the side. Even if I didn’t have this blog, I’d still make money dog sitting. And many bloggers have a spouse that still works. Even if they don’t necessarily need this income it surely comes in handy with health insurance and providing a safety net when the unexpected happens. (Not that we’ve had anything unexpected happen in the last few months, right?)

Income Streams, Income Streams, Income Streams

I’ve read that if you say something three times, people get it. The most popular example is the real estate mantra, “Location, Location, Location.”

However, my favorite one is this:

My memory failed me. I thought he only said it three times. Still, it’s too funny not to share.

It’s hard to understate how important income streams are to FIRE. They are the ultimate safety net. Most of the people in the FIRE community are very good at reducing expenses when necessary. By definition, they’ve been focused on their money for a long time. An extra $10,000 a year can go a long, long way.

What we’re learning with COVID-19 is that sometimes income streams go away. It’s hard to say anyone has a solid business now – unless you happen to own a toilet paper or a hand sanitizer factory.

I’ll use my income streams as an example:

  • I have zero customers in my dog sitting business. Usually people get dog sitters when they travel. No travel, no need for a dog sitter. It’s about as viable as a cruise ship business now. That’s one income stream gone.
  • The stock market has been down as much as 35%. This would be the wrong time to have to take money out to live on. This is why you want to have a strong emergency fund. We’ll count it as a half an income stream.
  • The blog income isn’t doing well. I wasn’t sure why until someone told me that companies aren’t spending on ads since their business is on hold until the coronavirus clears up. I’ll count this as losing another half of an income.
  • We have 3 rental properties, but in total they lose a little money each month. We took aggressive mortgages on them and they’ll be paid off in 10 years. However, when they are vacant or a tenant can’t pay, it causes a lot of stress. This isn’t an income stream now, but it could become an income drain in the near future. If we get the mortgages paid off, this will become around a $3500/mo. income stream.
  • One of the companies that I did freelance work laid off most of their staff (pre-COVID-19), but the other is still steady. That’s another half income.

When everything was working, I’d have a very good income, especially since I need the flexibility to take care of the kids. Now, after losing two and a half of my income streams, it is not as good. However, we can get by on it. Fortunately, we don’t have to depend on what’s left of this income, I’m one of the FIRE bloggers whose wife still has a traditional job.

Having multiple income streams is like having multiple back-up plans. A lot of people have told me that COVID-19 was worse than they could ever have imagined. Having all these back-up plans in place puts us in a much better financial position than most.

If you are looking to FIRE, have you looked at adding new income streams? Let me know in the comments.

Middle Class Income Numbers are a Myth

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Yesterday I came across a Tweet from The 76K Project asking about “middle class income” in “cold hard numbers”:

My first thought was that this sounds like an exciting article and I hope to read it when it is completed.

However, that quickly changed to, “I don’t think this is going to go well.” My response:

(I’m 95% sure I’m done quoting the Twitter conversation and can get back to the point.)

The point was that trying to find a middle definition of a wide variety is not very useful. I’m sure there are statistical ways of determining the average weight and caloric intake of mammals, but you’ll always be stuck with a disclaimer of “YMMV” (Your Mileage May Vary). Even if we narrow it down to adult humans, we quickly realize that the range is pretty wide.

The more information we have about a person, the better we can tailor the answer. However, for someone writing a general audience, we’re forever doomed with writing in abstract terms and hoping the reader can personalize the information on their own.

Here’s a personal example on how even when income doesn’t change much, it can feel very different.

I haven’t lived all over the United States, but during the years of publishing this blog (12 years), I’ve lived in Metro-West Boston, Silicon Valley, and Newport, Rhode Island. I looked up the median household income for all three places and it was generally $68K, $135K and $68K, respectively. I also did some searching and found that the cost of living index for the three places (rounded slightly) are 140, 325, and 140. (Source: Sperling’s Best Places)

Here’s a table:

LocationMedian IncomeCost of Living Index
Metro-West Boston$68,000140
Silicon Valley$135,000325
Newport County, RI$68,000140

The Metro-West Boston and Newport County areas are the same. I didn’t plan it that way. A better, less personal, statistical analysis would be to compare places all over the country.

The interesting thing is that our income hasn’t changed that much over 12 years. My wife has gotten some promotions over the last ten years. Blogging has gone up and down a bit and side gigs have come and gone. It certainly has gone up, but if you assume 3% inflation the costs of living in general have gone up 34% in that time.

In all places we’ve had a higher than average median income. I don’t claim to be middle income. However, I certainly felt a lot more “middle income” in Silicon Valley. We weren’t too much higher than the median and the cost of living index was extremely high. Of course Silicon Valley is not normal. That’s kind of the point.

At least the Boston suburbs and Newport County are more normal. However, they aren’t very normal either. A quick Google search for U.S. median household income shows a census report at around $58,000. (The census report was a little difficult to read, so I chose to go with Business Insider’s analysis.) So while both place have higher median incomes they are only 18% higher, while their costs of living is 40% higher.

In the Boston suburbs or Newport County having a median income would likely feel like being below average. I don’t think it would be strange for a household making $80,000 in these areas to claim they are middle income even if that’s not accurate according to the rest of the country. For the costs of living in their area (40% above the US average).

Imagine how someone with median income in a below average cost of living place feels reading about the woes of “only” $68K or worse “only” $138K? It’s probably not going to go over well.

But What About Feelings?

Up until now, I’ve mostly been making a case about the numbers. That was the main point I wanted to make. However, I realized there’s more to the story.

When someone writes about being middle income, it could also be in terms of how they feel. That may not be technically correct, but it could be a short-hand way of saying that he/she feels he/she lives an average financial life. That might be where some confusing in personal finance blogging comes in, because we can each feel differently about the same thing.

Take for example, someone’s social circle. If you were friends with a group of lawyers who made $150,000 a year, how would feel if you only made $100,000? You still might feel successful, but you could also feel like you are closer to middle income.

Let me make this example a little more personal like I did above. My wife’s active duty status provides a very generous scholarship for our children at a local private school. It’s a social circle where the incomes are often double ours. In addition, we’re using as much as our income as possible to invest. That’s normal FIRE blogger behavior, but it isn’t normal for a typical social circle, much less this one.

Not only do they make more, but it seems obvious that they are willing to spend it. When you combine the two, it barely feels like we live a middle income lifestyle. That’s another reason why we don’t feel rich.

Final Thought

Much of personal finance is relative to one’s personal situation. I think we need to keep these relationships in mind and readers should do the same.

I try not to write things that place assumptions on what other can or should be able to do. Instead, I typically write about we are doing. Sometimes, I’ll write about what might happen if someone were able to do something (How to be a Millionaire in 20 Years).

We aren’t going to find people who live the exact same lives as us. Instead we may be able to find some people who have similar goals and exchange thoughts that we can adapt to our own lives.

Writing Student Essays for Money Online

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Student essays can be a challenging endeavor

It is especially on the graduate level that the projects which is given to students can become very challenging and it will require a large amount of careful research before a freelance writer can even start with the process of writing suitable content. There is certainly a lot of information available on the World Wide Web which could be of use to the industrious writer and many of this advice is simple and straightforward, but some of it is also rather complicated and it may require adequate background experience before a freelance writer might be able to effectively use the advice which has been provided. It is especially the use of correct grammar which is one of the primary reasons why some freelance writers is often disqualified from certain projects. Also on the post graduate level and on projects such as those which is given to honors degree, Masters or doctorate students, many freelance writers may encounter many obstacles which they may find difficult or even impossible to navigate.

College students writing an essay

Different projects may require a different approach

Freelance writers may be amazed to learn how many approaches is possible in order to complete one specific student essay. It is only with several years of experience that freelance writers is able to distinguish between the different approaches which is possible for different projects but once that experience has been gained, results might be easy to come by and the services of such a freelance writer may become a sought after commodity. Many of the freelancer sites available today will have a system in place which is rating the services which is provided by a freelancer. Those with excellent ratings will often be the ones which is most likely to be considered by people who are looking for someone to do their projects for them. Any student who desires to make use of the services of a freelancer will also have to approach such a situation very carefully and several things has to be considered such as the nature of the project which has to be completed, the level of expertise required and also the results which is expected.

It is best to work according to an effective guideline

When it comes to professionally written student essays it may be difficult or impossible to obtain the desired result unless the freelancer is following a proven and well tested guideline. A lot of research has been done over the last couple of decades and this is why educational institutions as well as the students which is studying at those institutions is fully aware of the standards which is required especially when it comes to student projects. This is why any professional freelance writer who are providing their services to students or other academics should themselves have adequate experience regarding the expectations of examiners. Without this basic information it will be impossible to provide the kind of content which will ensure excellent grades for the student who has to present that content to the examiner. Besides the expectations of the student and the examiner there are many challenges which has to be overcome by the freelance writer before they will be able to provide the student with high quality content. Some of those challenges may be writer’s block, there is also the issues of time management because it may happen that emergency situations arise which can put a lot of pressure on the time of the freelance writer and this may sometimes result in deadlines which is missed.

The simplistic approach

This is a term which is familiar even in the fashion industry where high quality garments which is manufactured according to a simplistic design is often the most popular and the most frequently used. Likewise when it comes to producing satisfactory content it is often best to keep things as simple as possible and this is why it is mostly best to use an effective guideline which is certain to satisfy the needs of the client. Another problem which is often encountered is that freelancers include a large amount of details into the content which they think results in better content when in fact all those unnecessary details is actually resulting in content which is confusing, which deviates from the main topic and often results in a very poor grade for the student. This is why it is critical to stick religiously to the main topic of that essay and to ask questions which deals specifically with that main topic and then provide the reader with well researched reasons why your opinion about the matter should be accepted. When this is done correctly the end result can be very satisfying and likewise the resulting grades will be excellent and this will result in a client which is satisfied and who will provide the freelance writer with positive feedback which will ensure that other clients will likewise entrust the freelancer with their projects.

Learn from the experts

One of the best attributes in life is the ability to accept instruction. Many people is walking around with the attitude that they know everything and therefore they are very resistant when they encounter people who is trying to add to their knowledge base. This is a very foolish attitude especially for someone such as a freelance writer or a student. The student is paying thousands of dollars for the opportunity to engage in a University or college qualification program and therefore if they are not hungry for knowledge they may very well be wasting their money. This same thing is true for the freelance writer and the moment when you stop to look for new things and new ways to accomplish something, then you have stagnated and any further progress will become impossible because you have effectively severed yourself from any further progress. This is why it is important to never become a know it all person because despite what you may think there will always be someone that has a fresh outlook on things which might provide you with knowledge which you might not possess already.

What You Can Do To Get Your First Paid Freelancing Client

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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:

  1. Create quality work for free or a low cost to let people know what you have to offer and to build your portfolio.
  2. 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.

How to Build Growing Income Streams with Dividend Growth Investing

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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:

  1. The Dividend Achievers List: 200+ businesses with 10+ years of consecutive dividend increases
  2. The Dividend Aristocrats List: 50 businesses with 25+ years of consecutive dividend increases
  3. 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:

  1. Businesses you understand well (the Coca-Colas and Procter & Gambles of the world)
  2. Stocks trading below a price-to-earnings ratio of 20 (at most), and preferably under 15
  3. Stocks with long histories of dividend increases every year (I prefer 25+ years)
  4. 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.]