Passive Income Through Dividend Reinvestment Plans (DRIPs)

A dividend reinvestment plan, commonly referred to as a DRIP, is a special type of plan in which all proceeds from dividends are used to buy more shares of the underlying company.

One of the simplest and most reliable forms of passive income is the collection of dividends from publicly traded companies. For those unfamiliar with dividends, a dividend is a payment made to shareholders as a way of sharing corporate profits with individual investors. Dividends can be made quarterly, monthly, or even annually depending on the company profile and philosophy. The payouts are made on a percentage basis and can range from 2-3%/year up to 5-10%/year (or more!). Once paid to investors, this money belongs solely to the shareholders and can be either reinvested in the company or cashed out and deposited into any bank account.

A dividend reinvestment plan, commonly referred to as a DRIP, is a special type of plan in which all proceeds from dividends are used to buy more shares of the underlying company. The reason for this re-investment is the power of compounding interest. (Anyone familiar with a typical 401k plan is likely aware that compounding interest can build substantial gains over a long period of time.) While the number of shares of a company grow over time, the total value of the annual/quarterly dividends grows as well. In addition, if the price of the underlying security grows in value, the gains are multiple even further!

Increasing the multiplicative power even further, some brokers will even let you invest a portion of your monthly earnings to purchase additional shares of the company. Typically allowing investments as little as $100/month, these additional share purchases can lead to further gains or help to spread investment risk over a variety of dividend paying companies.

Let’s take a look at an example:

If I were to spend $2,000 buying shares of Coca Cola (Ticker = KO) at today’s prices, I would wind up with about 50 shares. These 50 shares would each earn $1.24/year of dividends, for a total of $62/year. That may not sound like much, but by reinvesting that money into buying further shares of Coca Cola, I would own an additional 1.5 shares in just the first year alone.

I then decide turn off my laptop and leave this investment alone for the next 20 years. Logging back on sometime in the mid-2000’s, I would then find that I own over 85 shares after only a short period of time. Remind you, that’s 35 shares for FREE! Not only can those shares increase in value, but they will also earn their own dividends over time!

TwoWeekNoticeDRIPs

Now, lets take things a step further…

Let’s say I really believe in the future of Coca Cola and expect that the company will continue to grow over the coming years. To put my money where my mouth is, I choose to invest in a DRIP program through a broker and contribute an additional $100/month to my investment. I turn my laptop off just like before, except now when I turn my computer on 20 years later I find that I own nearly 600 shares, which is 12x what I started with!

TwoWeekNoticeDRIP

At this point, I decide I want to retire, so I can decide to either cash out my future dividends of $750/year, or the entire value of the investment, which has grown substantially in value.

Rinse and repeat this strategy with a variety of different dividend paying companies, and you’ll have a portfolio that’s the envy of any Wall Street investor. So tell me, what’s your investment strategy? Do YOU have a favorite dividend paying company to share?

 

5 Ways to Increase Your Income in 60 days

It doesn’t take a rocket scientist to realize you ultimately have two options to pay off your debt and achieve financial independence. You either increase your income, or you decrease your spending. For most of you, the answer lies somewhere in-between.

As of 2014, American consumer debt has surged to $11.7 trillion dollars. The net result? The average U.S. household owes $154,360 in mortgage debt, $33,600 in student loan debt, and $15,200 in credit card debt. It doesn’t take a rocket scientist to realize you ultimately have two options to pay off your debt and achieve financial independence. You either increase your income, or you decrease your spending. For most of you, the answer lies somewhere in-between.

Although significantly important, too many blogs and personal finance articles place too much emphasis on reducing your debt without addressing the equally compelling option of increasing personal income. The key to success with this strategy is to raise your monthly pay quicker than your level of debt rises. Note that this does not imply that raising your income will be free nor that it will be “easy”, simply that increasing income rate faster than the rate of debt, you will ultimately end up with a monthly surplus. Allocating resources to this strategy properly will thus enable you to develop a rinse-and-repeat method that will gradually pay off any outstanding debt. Furthermore, should you develop a highly lucrative opportunity, additional income could be made by outsourcing the work and allowing freelancers to make money for you!

So, what are some (realistic) options to increase your income in the next 60 days?

1 – Get a second (part-time) job

The most “conventional” approach to earning additional income, a second job offers some highly compelling advantages that often significantly outweigh the effort of working multiple occupations. First and foremost, an hourly job not only provides a new source of income, but it also provides a safety net should your primary career experience an unexpected bump in the road such as reduced hours or layoffs. In addition, a second job also offers a consistent rate of return, such that you work a number of hours each week, and are paid a fixed sum in return for your efforts. While it is expected that you maintain a certain level of professionalism and work ethic, your pay for a part time job generally does not hinge directly on your ability to sell products or services to end users. Lastly, there may be other benefits such as health insurance or retirement benefits that you may not have access to at your primary occupation.

To locate local part time jobs, most people often turn to Craigslist due to the biggest variety and most up-to-date postings for your area of expertise. While you may be able to find both hourly and “one off” jobs through this type of service, most respectable companies that hire for long term positions will list their openings on major job boards such as Monster or Indeed. Furthermore, you will likely find that your specific skills are a better fit for these quality positions which often offer a higher wage than typically found through less reputable sources.

2 – Get a raise

Depending on your personality type, you may see this as one of the more “uncomfortable” strategies for increasing personal income levels, simply asking for a raise is by far the quickest approach to an improved lifestyle. Most employees fail to recognize that their job is simply an ongoing negotiation with their employer, whom will likely pay them the least amount of money possible while maintaining your services. Most workers fail to properly negotiate their starting salaries and are thus at a disadvantage for the remainder of their career.

For example, let’s look at two workers, named Adam and Brian, whom both work the same job at the same company. Adam is able to properly negotiate a starting salary of $50,000 while Brian accepts his first offer for $47,000. Assuming an annual raise of 4%, after a total of 20 years, Adam will actually make more than $6,000/year more than Brian for the exact same work! If Brian were to respectfully approach his employer and ask for a raise, he could easily see an immediate return of $6,000 simply by opening a fair and honest negotiation for his services.

Of course, in order to receive a raise it is necessary to approach the topic with grace and humility. No negotiation should ever be considered a hostile experience (for either party) and you should never threaten your employer with quitting if they don’t honor your request. Take time before meeting with your employer to documented your specific achievements and examples of your ability to go above and beyond the expectations of the position. Setup a formal time with your boss and provided adequate notice regarding the meeting subject, so that they are not blind-sided with your request. Lastly, be prepared to offer concessions if necessary, such as extra hours worked or further roles and responsibilities.

3 – Rent out a spare room

If you are like most Americans, your single largest expense is housing. Whether you own your own home or rent an apartment, leasing out spare bedrooms can bring in substantial income, especially if located in an urban environment. If a long term tenant isn’t in the cards for your situation, consider a night-to-night arrangement through either Airbnb or Roomorama, which allow single night rentals that can earn over $100/night! These services will take a portion of the booking fee paid by the guest, but in exchange offer background information on your guests, which tends to attract a higher quality tenant.

Before you run off to list your available space, you’ll need to ensure your local laws and ordinances accommodate this type of arrangement, and you’ll have to pay taxes on the rental income, but making an extra $10,000-$20,000/year is certainly within the realm of possibility. Even if you don’t have outstanding debt to pay off, think of all the free equity you could build in a single year if you on your own home!

4 – Peer-to-peer lending

A wonderful form of passive income for the internet age, peer to peer lending allows investors to take on the role of a private bank for online lenders who need personal loans. These types of loans typically offer high % rates, but beware that the high rate of return is often due to the risky nature of the loans. Most lenders looking outside of conventional brick & mortar banks typically have bad credit, but blending your available funds across a variety of investment options and minimizing the capital associate to each loan can offer a low risk investment with substantial yield potential.

Buyer beware! One of the newest and fastest growing forms of peer to peer lending online involves leveraging Bitcoin payments. Offering incredibly high rates of return is standard practice, but the unregulated nature of the Bitcoin ecosystem and the highly fluctuating price typically do not justify the associated risk. As all transactions are anonymous, there is also little to no hope for recovering funds in the event of fraud. I highly recommend avoiding this type of loan until further legislation is made to govern Bitcoin transactions and prevent malpractice.

5 – Cash in on your hobby

If your passion involves crafting handmade products or artwork, sites like ArtFire or the ever popular Etsy offer a huge audience to sell your homemade products. Avoiding the large listing fees from eBay or other bidding sites, you’ll find that you can make money selling just about anything, at a fraction of the cost (Etsy charges 3.5% on each item). For product ideas for the less crafty among us, you can browse the current listings to track the hottest selling items within your range of expertise and calculate the expected cost to produce each item. After you calculate the estimated net profit (profit – cost), head on down to your local craft store and create a test product! As you net a profit on your first sale, the extra money can either be reinvested in your growing online craft business, or applied to help pay down your debt or other expenses! The key to success in the online hobby business is keeping your expenses as low as possible, so may sure you check out the local paper for coupons and don’t forget to check the clearance bin!

There are numerous other opportunities to earn income online, but I’ve only highlighted the most tried and true approaches in this article. In the future, I’ll discuss some of the more “unconventional” ways to make passive income online, but I’d love to hear your thoughts on other opportunities I may have missed. Share your ideas below and let’s discuss some guest blog posts!

Why You Should Pay For Content

Hiring freelancers, contractual writers or a team of writers and paying them for content has become more than just a trend. Millions of online posts, blog entries and all types of content being published across the world are written by writers who are paid to do the job by their clients. Whether you have a website, blog or wish to run a general online resource of information, paying for content is constructive and beneficial.

Hiring freelancers, contractual writers or a team of writers and paying them for content has become more than just a trend. Millions of online posts, blog entries and all types of content being published across the world are written by writers who are paid to do the job by their clients. Whether you have a website, blog or wish to run a general online resource of information, paying for content is a constructive and beneficial thing to do.

Here are four reasons why you should pay for content and hire professional writers.

Unique Writing Style

Writers have a distinct style of writing and unless it is extremely common, each writer’s style would be unique. In all likelihood a writer’s style would certainly be different to yours. This offers a much needed variety on the contents that you are looking forward to publish online. Furthermore, if you are not a writer then it would always be desirable to hire one and pay for content.

An Expert Take On A Topic

Every writer has expertise on certain domains. Some may be experts in technology while others in alternate health. It is quite possible to have writers with experience in all domains unless it is applied physics. Professional writers learn and create content on their acquired knowledge. This makes the content relevant, factual and also hard hitting. Many bloggers use experts to create content for their product reviews or affiliate marketing articles. This is because of the relevance and factually correct information that a writer comes up with. Furthermore, writers generally are more acquainted with current affairs and all the latest developments around the world. This makes them more informed on a given topic than someone who doesn’t write regularly.

Literary Value

Writers would have a certain level of literary skills. While not everyone would be looking for a bombardment of vocabulary that is least relatable for the common audience, some level of literary excellence is always desirable. Content should not always read like a comment posted on social networks or just a tacit personal opinion.

More Effective

Some writers have experience with sales oriented content while many are good with cross promotion or indirect appraisals. Persuasion, convincing tone or reporting undertones are all some of the qualities of different writers. Your content will have an objective and a professional writer would be able to create an effective content that makes an impact.

Later, I will review various sources that I use frequently to find quality freelance writers. Options vary wildly from “cheap & quick” gigs to “expensive but high quality” work. Ultimately, your chosen source will be dictated both by your budget and the quality of the work expected.

 

Cryptocurrency Mining Introduction

As part of a diversification effort on the Two Week Notice Project, alternative income sources will consistently be reviewed as opportunities arise. The latest craze on Wall Street is now coming to a computer near you: Cryptocurrency Trading and Mining! Aside from the occasional “WTF” response, the most frequently asked question for new comers to the cryptocurrency craze is: What is it?

As part of a diversification effort on the Two Week Notice Project, alternative income sources will consistently be reviewed as opportunities arise. The latest craze on Wall Street is now coming to a computer near you: Cryptocurrency Trading and Mining!

Aside from the occasional “WTF” response, the most frequently asked question for new comers to the cryptocurrency craze is: What is it?

Cryptocurrencies are digital currencies that are decentralized on the internet. A decentralized currency has no common owner (i.e. – manipulator) such as the Federal Reserve Bank in the United States. These currencies are the byproduct of computer programming algorithms used to track transactions online (think Amazon.com purchases), and offer anonymity when conducting online business. The most common of the currencies, named Bitcoin, is “mined” (earned) by lending your computer processing power to tracking and encrypting these transactions. (For further details, you may also refer to Bitcoin Wiki, which further describes the background and financial system that enables this type of currency.)

How much can I earn?

Mining (earning) rates for various cryptocurrencies depend on a number of factors, which will be reviewed in later posts. Essentially, however, the total dollar value earned per day by using some of your computer processing power to track these transactions can range from $1.00 – $10.00, depending on the power of your computer. These figures can vary wildly, but a high end computer can earn an extra $300/month, just by running free software as a background application… not bad!!

How do I get started?

  1. Research!
    • This may seem like an obvious starting point, but the best approach to getting started with Bitcoin starts with good ol’ fashioned reading. Parse through additional articles on The Two Week Notice Project and review background on cryptocurrencies before you proceed!
  2. Download the Bitcoin client software
    • The Bitcoin software can be downloaded here from the main Bitcoin website. There are a number of alternative applications available with similar platforms, but this is the tried and true original that will be referred to throughout the 2WNP.
  3. Update your wallet
    • After downloading and installing the Bitcoin client (otherwise referred to as a digital wallet), the software will need to download the latest archive of all past Bitcoin transactions. This WILL take some time as there are several years worth of data to collect. Allow the software to complete this download (6-8Gb) before attempting any further use of the Bitcoin wallet.
  4. Join BTC Mining Pool
    • Once your wallet is updated, head over to BTC Guild and join the site with your new wallet ID (found under the “Receive” tab shown below). “Pooled” mining allows users to combine computing horsepower and increase earnings exponentially. Do not attempt to proceed without first joining a pool unless you have an extremely powerful PC!
  5. Download Mining Software (CG Miner)
    • Once your information has been updated in the BTC Guild portal, you can start mining! In order to do so, you will need to download a Mining Client, which is the software application which shares your computing bandwidth. There are numerous software applications available, but the most common mining software is cgminer. You will need to download the application and CAREFULLY review the provided read me file to properly setup your login credentials. The most common command prompt setup is: “cgminer -o http://yourpoolurl:#port -u YourUserName -p YourPasswordHere”, which will launch your cgminer instance and login to your pool as desired.
    • For example, “cgminer -o http://btcguild.com:8332 -u 161619926_4 -p= “, will launch an instance of cgminer with a standard test user through BTC Guild.
  6. Download Mining Software (RPC Miner)
    • If you do not have an on board graphics card, an alternative client, RPC Miner, can be used to mine with a computer CPU. Simply download the executable file and CAREFULLY review the provided read me file to properly setup your login credentials. Extract all files to “C:\RPC Miner” and create a new shortcut to the following directory to run the application. “”C:\RPC Miner\rpcminer-cpu.exe” -url=http://btcguild.com:8332/ -user=161619926_4 -password= -threads=4 -workrefreshms=5000″
  7. Watch the Bitcoins roll in!
    • The cgminer application will run in the background of your computer while you work! Check back in once or twice a day to BTC Guild to ensure the miner is properly configured and your funds are being held. Once the minimum account balance is reached, your funds will be deposited in your Bitcoin Wallet!
  8. Donate!
    • If the above guide has helped you, or you simply want to contribute to the 2WNP, all donations can be sent to address # 1HN9jKX5b7ptyyUXMuTkrheRwYPCPnHmGK. 

Suck It Up

Have you ever thought to yourself: “I don’t want to write today”? Of course you have, because you’re human. The real question, is what are you going to do about it?

One of the most common problems faced by entrepreneurs is lack of motivation. Blog writers are some of the most prolific and driven writers in the world today—there are millions of blog available online, and each day, bloggers’ post insightful and informative posts to entertain their readers. However, if you’re a writer, you have no doubt experienced blogger burnout and have days where you sit at your desk and stare at a blank entry and realize that you’d rather be doing anything but writing…

Have you ever thought to yourself: “I don’t want to write today”? Of course you have, because you’re human. The real question, is what are you going to do about it?

One of the most common problems faced by entrepreneurs is lack of motivation. Blog writers are some of the most prolific and driven writers in the world today—there are millions of blog available online, and each day, bloggers’ post insightful and informative posts to entertain their readers. However, if you’re a writer, you have no doubt experienced blogger burnout and have days where you sit at your desk and stare at a blank entry and realize that you’d rather be doing anything but writing. If this has ever happened to you, then you know it can be disastrous, resulting in a loss of readers or, if you’re a paid blogger, a loss of money. There are ways to stay motivated and on track though, and if you develop good habits and get rid of some bad ones, you will be well on your way to being motivated once again.

Change Your Habits

Even the best blog writers have a number of bad habits that keep them from staying focused and on task, and the one bad habit that most of them are guilty of is being distracted by the Internet. Have you ever been in the middle of a post and find yourself distracted by a notification from Facebook, Twitter, or some other social site that you end up on there for twenty or even thirty minutes, looking at other people’s posts as your post is left unfinished? One of the best ways to develop better writing habits is to close your Web browser while you’re working and to set your e-mail alert to a visual notification so you can glance at the sender to see if it needs immediate attention or if it’s something that can wait. Turn off the television while you’re working, too—it’s a huge distraction that you cannot afford. Quiet background music is a better choice. (Pandora: Ron Hope Radio is my drug of choice)

Set Rewards

If you’ve managed to make sit down and achieve your daily goals, go ahead and reward yourself for sticking to your goals to the end. For example, if you finish on time or early, you can reward yourself by indulging in a book or a movie that you have been saving. If you fail to meet your goals, your hobbies should be shelved until you’re caught up on your work. This not only creates better work habits, but it will motivate you to write more often and with better focus.

Alternatively, your rewards may also better serve your business if you so desire. For The Two Week Notice Project, every 10 new fans on the Facepage Page earns the business PayPal account an extra $5. This not only encourages future growth of the Facebook page, but also allows for future growth opportunities with funds that have been set aside to expand the business!

Suck It Up

Now, if all else fails; suck it up. Just because you don’t want to work today doesn’t mean the World is going to sit back and wait for your mood to improve. So, take the next 10 minutes and do something selfish for your business. Make a new Facebook fan page, work on that stubborn project that you’ve been putting off for months, or connect with another entreprenuer online. You’ll be glad you did!