A couple things need to be said before I get into the meat of what I’m writing today.
Firstly, our thoughts and prayers are with the residents of Louisiana and the Gulf Coast who withstood 7 trillion gallons of rain in just one week, and this disaster is shaping up to be extremely significant.
As usual, the best way we can help is to make cash donations to trusted organizations — as in many tragedies, scum-sucking scammers quickly poke their heads out of the mud and try to use our heartbreak to line their own pockets. There are many great organizations, obviously, but here is a page for the Salvation Army’s special relief fund.
Secondly (and speaking of scammers), back-to-school season is upon us all, and the IRS has issued new warnings about how many people are being hassled for what is being called a “federal student tax”. There is no such thing. Don’t fall for it.
As a reminder, the IRS has already told us that they will NOT:
- Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you several bills.
- Call or email you to verify your identity by asking for personal and financial information.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
- Require you to use a specific payment method for your taxes, such as a prepaid debit card.
- Ask for credit or debit card numbers over the phone or email.
- Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
So if you ever receive such a call or communication (and especially if you do not owe tax), don’t engage with the scammer and do NOT give out any information. Just hang up.
Lastly, with the Olympics in our rearview mirror, there’s been lots of angry talk about Olympians getting taxed for their medals. And, as is always a good policy, it’s a good idea to check Snopes about that.
Now, while earning a cash bonus from the United States Olympic Committee might not work as a “side income” for all of my clients, I do get asked from time to time if I have ideas for what might help earn some additional spending money, so I’ve put together some ideas here for a possible “side hustle”…
Dennis Fritz’s Five Ideas For Establishing A Side Hustle
“Defeat is not the worst of failures. Not to have tried is the true failure.” -George Edward Woodberry
Continued economic uncertainty (especially with so much political turmoil) has brought clients to me who are looking for ways to “trim the fat” … and so, to continue the metaphor, how about *adding* some “lean”?
You see, when trying to save money, eventually you’ll come to a point where you have cut as many expenses as you can and there are no additional steps you can take to free up money from your current income. The next step to saving more could be to look for other sources of income. These are a few common ways to make extra income with which I’ve seen many clients succeed:
* One of the most obvious has to be getting a second job. While this can eat into your free time, it’s an immediate way to bring in a dependable, set amount of income. You could try to make it more enjoyable by choosing something you’re interested in. For example, if you are an avid golfer, then work in a golf store. Not only will you enjoy the job more, you may have a discount that will benefit you as much as the pay check.
* When you invest in dividend paying stocks, you can receive 3-6% annually in dividends from some of the top financial and utility stocks.
* Rental property can be a great form of income, as long as it’s “cash flow positive” — meaning that the rent you bring in more than covers all the expenses. You don’t want your only hope of making money to rest upon the future value of the property. With the exception of the occasional real estate bubble, the actual appreciation on a house makes a terrible investment, believe it or not.
* Sell things around the house that you don’t use anymore. This could be done with a garage sale (often more hassle than it’s worth) or more efficiently online on eBay or Craigslist. If you get comfortable with selling on these sites, you could even buy things at other garage sales or wholesaling sites that are undervalued and sell them online yourself. If you enjoy a certain hobby, like crafts or woodwork, you might be able to make something that you can then sell online on Etsy or other similar sites.
* If you have “freelance” skills, a great site to find work is www.upwork.com.
While not all of these ideas will make a lot of money, even bringing in an extra $100 a month to invest and earn 7% will give you extra savings of around $117,000 in 30 years. And I like the sound of that for you.
I hope this helps.
Dennis Fritz CPA