I guess it depends on what you do to make extra cash.
Let's dive into the different phases of what I have been through and what I would anticipate would happen.
In My Youth – How I Make Extra Cash
When I was a younger I would rely on my allowance from my parents to make extra cash to pay for my toys and such. I remember I was getting like $5/week from my parents which was a pretty good deal in exchange for chores. I would clean some dishes, vacuum the house, wash the cars, and mop the house when needed.
For most $5 per week was on the low end but it was just enough to get a comic or 2 whenever I wanted them and also save up for the time we would roll on over to Toys R Us and I would get like a transformer or get a videogame (NES back in the day).
All the way back as far as I could remember I was looking to make extra cash to pay off the things I wanted which at the time seem a little bit out of reach, like a better bike.
See, at the time I was capped at $5/week regardless of what I did. I had to wait for the big holidays to break out like birthdays, christmas, and chinese new year to get that bonus I needed to make it out with some bigger toys.
Looking around at people I teach and people who look for guidance to what I do online things haven't changed for many, many people because people still will always want to make extra cash.
They continue to trade their time for a set amount of money. Many work hard in hopes of a bonus (yearly bonus which isn't set in stone). Hard work pays off to an extent. Once you start working for people you realize there is the amount of effort needed to keep your job then the effort needed to rank advance.
There are situations where rising in rank won't happen due to current seniority in place or the fact your unwilling to relocate. The company man is exactly what company's want. They want to lock you down and not help you make extra cash which could then help you leave the company.
So How Do Grown Ups Make Extra Cash?
Times may change but the same issues will always come up. Toys get bigger and more expensive then comes along the responsibility of taking care of your young ones. Trading time for money only works out for the select few.
I know what your thinking.
You know many people who work a salary or commission JOB that do very well.
Let's take out the CEOs of the world which account for a small fraction of the population and talk about normal people.
I was reading a book where a Doctor would made a good amount of money. The details of the exact numbers escape me but it goes something like.
Salary: $300,000 year or $25,000 month
Income Taxes, Mortgage, Car lease, School dues, Private school for kids, College tuition savings, Health care, Club memberships, Travel expenses, Food, Entertainment, Shopping, Retirement funds, Insurance, Charity, and Savings
I didn't cover those in order but that was what I remember. The thing that stood out the most was that there was a pretty good source of income per year but from what I remember the Charity was under tithing to a church and it was $500/month. $500/month is 2% of your gross income. I'm not going to get on my high horse that I do more (well I do) but 2% of your income going to one of the most important aspects of your life… some will say that's better than nothing but those of you who believe in your church and tithing to help your community I find that odd.
I'm sure there are other charities that would be included but the quick list of charities was pretty small and tithing being $500/month I think really is a common situation versus being an odd ball one. I think more people tithe less than 5% let alone 10%.
I mean who can afford to give these days right?
The bigger thing I was was that for monthly savings was about $1,000 per month.The retirement fund wasn't that well funded from what I remember.
After all of the expenses only about $1,000/$25,000 was saved in the bank = 4%.
Now retirement funds should be all that they need to save you say?
I disagree. Liquid equity and cash on hand is pretty handy in my book. Well, let's get back to the book.
The author was diving into the common misconception that people with a large salary are indeed “rich”.
So this is a good time to think about: What do you define as being rich and not just looking to make extra cash here and there?
Make Extra Cash – To Break Free
My definition of being rich is to be able to afford the things I want to do. There is no set amount. No one really wants to be a millionaire. They just want the “benefits” of being a millionaire.
With the break down of the above Doctor the author was driving home that his expenses of daily living made him strapped to continue working to continue living his current lifestyle.
The doctor was a prisoner to their own lifestyle.
I'm sure some of you can relate.
Get a new job, make extra cash on the side, and even hustle from time to time. That extra shot of income then goes to out going expenses that need to be maintained like a bigger house, bigger utilities, and more expensive cars.
All of this needs to be fed like a hungry animal.
The cycle of feeding that animal has people imprisoned in their own man made jail cell.
Yeah, I said it.
Bigger toys comes higher expenses that lock you into paying them off.
But here is the oddity in this story.
Many people I talk to are in a ceiling bound salary (you work harder for hopes of a bonus) and others are in commission based businesses.
The commission based business has leverage in the fact their time traded for money can give them a good buffer. Check out a successful real estate agent and you can tell even though they aren't paid by the hour they make good money per the hour.
Salary based employees, even doctors, are required to report into work or they will NOT get paid. But it's not like they can make it up by taking 2 months off and working 2x as hard the 3rd month. No employer would do that.
This is where a commissioned based income stream can help ANYONE.
Commission sales people understand this. They can bust it out hard and take it easy if they wanted to. Salary people can bust it out hard and get nothing more. Sure a good review might lead to a bonus but do you really want to work ALL YEAR LONG for hopes of a bonus? That bonus better be big.
My bonus as an engineer range from $0 in a bad year to $8,000 which isn't too bad. But compare this to other industry it's peanuts. My wife was getting closer to $15,000 in our old job. Her other friends who were in high stress positions would be getting $30,000+ for a bonus.
These situations I've been seeing are rare but then again.
Work hard the entire year for hopes of getting a bonus.
That is some serious dedication to the company. That is true “delayed gratification”.
Now for the rest of the normal workers there is a better way to make extra cash.
If you have been reading books like 4 hour work week or rich dad poor dad then you realize there is a huge need to build assets. Assets are things that bring money in = income.
Too many people get caught up in the expense game and incur a large monthly ongoing debt. This is not healthy and actually dangerous to you and your family.
So what I encourage, like suggested in both books, is to make extra cash using the internet and information.
Information marketing is huge and the internet is pretty darn cheap as a medium to build a business in. I make extra cash using information marketing and wanted to give you my free 7 day training on how I use the internet to generate a path to exit the salary ceiling.
Make Extra Cash Online
PS. Comment and discuss what you have been doing to make extra cash and how your going to get out of the cycle of incurring debt but instead build assets.