Lazy Man and Money

Alternative Income Streams – January 2009

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If you are a regular reader, you are probably aware that each month, I post my alternative income earnings. These are earnings that I make not by directly working for a a set salary or hourly wage. For instance, dividends or investment gains fit the bill of alternative income. Earnings from this website counts too… I never know exactly how much I make, but I know that I’ll make something even if I disappear to Australia and Thailand for a month (as I did last year). I’m a huge fan of alternative income. When paired with frugality, it allows me to live a relatively Lazy existence. The dollar numbers aren’t putting me on easy street yet, but I see a lot of growth ahead.

Let’s get down to the nitty-gritty, shall we? Last month, I made $1971 after taxes on my websites. December is always an odd month for Lazy Man and Money. Traffic is down because people are out shopping, attending holiday parties, or simply doing stuff that’s probably just a touch more fun than reading about personal finance. On the positive side, if I make good gift recommendations on my websites, I can earn a small percentage of the sale from the merchant as a commission.

For those keeping track at home (and I doubt you are), I made $9 more in alternative income in December 2008 as I did in January 2008. Maybe I should take back the previous comment of seeing growth ahead. It was a topsy-turvy year where most of ad sales started as direct sales, but ended as mostly AdSense or affiliate sales. Bloggers that are more popular than I say that’s healthier mix for long-term growth.

While on the topic of alternative income, I should mention that in the next few days/weeks, I’ll be profiling someone who is making more than 5 times as much as am I a month – chances are you never heard of him.

Getting Ready to Buy Some Stock

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Wednesday my wife said, “You know we have a lot of cash sitting around, we should start to invest it while everything is cheap.” It’s amazing how I can write about this stuff everyday, while she spends about 4 minutes a year on it, and we both come to the same conclusion. Then Thursday happens and the stock market store just slashed prices another 7%. Friday morning, I hope to open up a Zecco account (why do people pay commissions?) and see how quickly we can get some money in the market. I say “hope”, because I expect them to give me lots of paperwork and/or ask for me to fax something. Faxes don’t work well with my Vonage phone lines.

I make it sound like an easy decision to invest. We have a long-term view and could wait out quite a bit of a downfall. I realize that earnings and cash-flow are likely to drop making stocks, even at this price, fairly valued. Still, I have to agree with Chad at Sentient Money when he says, “This market might be the best buying opportunity in the next 10 years.”.

So what would I buy? I think, I’ll stop by Vanguard and look for some cheap broad-based ETFs. My first target will be to load up on Total Stock Market ETF (symbol: VTI). I’ll add some Small-Cap ETF (symbol: VB), just to overweight ourselves in that area a little bit. I would also look to their REIT ETF (symbol: VNQ) to diversify quite a bit. I may then look to diversify more by looking at PowerShares DB Oil Fund (symbol: DBO) and PowerShares DB Agriculture Fund (DBA). These last two typically go up as oil and food prices go up. This is a great hedge and if oil goes back up to $140 a barrel, we’ll have solid stock gains to offset the pain at the pump.

Would you buy tomorrow? If yes, how would you reduce risk, but still try to capitalize on these relatively cheap prices.

Update: Looks like it might take a few days to get the Zecco account set-up. I did everything to set up an active account yet it doesn’t look like I have an account set up to fund. Once I do have an account set up, I will need to decide how to fund it. If I go with the free ACH method it’s going to take 5 days. If I going with the wire transfer it will cost $20, but be quick. I’m leaning towards the wire transfer at this point.