5 ways to start making money online today

This is the first post in the Making Money Online series.

Want to live somewhere cheaper to top up your savings? Somewhere sunnier to top up your tan? Maybe you want a flexible way to make some side income. Maybe you just hate the commute. Making money online means the freedom to work – and live – anywhere, anytime.

The only question is: how? When it comes to making money online, the most common advice is to “follow your passion”. If you already know what you passion is, great. Give it a go. If not, here are some practical ideas to get you started. You should be able make one of the following options work with enough effort. I’ve scored each one against earnings potential, how hard it is to start, and the level of risk. There’s one key factor I’ve missed out: fun! That’s because only you know what you’ll enjoy, but don’t forget it’s not all about the money.

 

Online money making infographic

 

English tutor

People often overlook this skill. If you’re reading this, I’m going to go ahead and assume you have a decent command of English. Congratulations! You already have a valuable skill you can sell online.

  • Earnings potential – moderate. A tutor can expect to earn roughly $30 per hour with a bit of experience.
  • Difficulty of starting – moderate. Registering with a tutoring website is pretty easy, but getting your initial clients isn’t so easy.
  • Risk – low. Signing up is free, so you don’t lose much if your tutoring career doesn’t take off.

How: Register with a site like Tutorful, or Preply.

Grapic designer

A lot of people, myself included, enjoy playing with graphic design. If you have the skills and enjoy this kind of work, there’s plenty of customers out there.

  • Earnings potential – moderate. You’re likely to be paid per job so it all really depends on how quick you are. An example gig on Fiverr costs around $20 dollars, and could take a reasonable graphic designer less than an hour.
  • Difficulty of starting – moderate. As with tutoring, easy to register, harder to get customers. Once the ball gets rolling with good reviews, work is likely to become far more plantiful.
  • Risk – low. Offering your services costs nothing.

How: Register with a site like Fiverr [affiliate link].

Blogger

Close to my own heart. Blogging is good fun, and the rockstars of the blogging world are making money online hand over fist.

  • Earnings potential – astronomical. Whilst most bloggers make next to nothing, at the top end bloggers are making millions.
  • Difficulty of starting – low. You don’t even need your own site. You can start blogging on Medium in the next 5 minutes for free.
  • Risk – high. Creating quality content is time consuming. You’ll put in the hard yards, but there’s no guarantee anyone will read it, never hand over any of their hard-earned cash.

How: Start off on Medium – especially if you want to blog for money – to see if there’s any interest in what you have to say.

Photographer

If photography is already your hobby, why not turn it into a money-maker?

  • Earnings potential – low to moderate. Royalties from stock photo sites tend to be low – around 15% – which is likely to translate to only a few dollars per download. Unlike teaching English, however, once you have your portfolio, the income becomes passive and can scale without limits.
  • Difficulty of starting – high. Taking quality photos which will be accepted by sites and desirable to purchase means not taking photos every man and his dog can take on their iPhone. This means potentially expensive camera and lens equipment, as well as a high level of skill, to see real progress.
  • Risk – high. Building your portfolio will take time, money and skill and at the end of it, there’s no guarantee of any pay-out.

How: Upload your portfolio to iStockPhoto, ShutterStock, or BigStock, or upload your photos to Flickr and license them through Getty Images.

 

Virtual assistant

I’ll take a wild guess this isn’t a hobby of yours. Don’t write it off too quickly, though. It’s a solid route to making money online.

  • Earnings potential – moderate to good. $40 per hour is totally feasible here for services varying from proofreading and formatting online content, to producing marketing content and social media management.
  • Difficulty of starting – low. You can get set-up on a site like Upwork to offer your services in minutes. I have done this myself, and in my experience it wasn’t very difficult to get work.
  • Risk – low. There’s not much upfront work to do before you start getting paid.

How: Get yourself set-up on Upwork and look around. Once you land your first few jobs, try to turn them into stable, repeat business. AngelList is also useful for looking for certain kinds of work. They might often be somewhat specialist – e.g. marketing and SEO – but can be more lucrative than Upwork contracts. Alternatively, reach out to businesses yourself and tell them what benefits you can bring them.

 

Have you ever made money online? How did you do it? Was it worth it?

 

 

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15 things every millenial should remember about home ownership

It’s a fact: even as many millenials resign themselves to a life of renting, most of us are still obsessed with dreams of bricks and mortar. In many parts of the world, millenials have grown up with house prices that only ever seem to go in one direction: up. This feeds into a general idea that home ownership is a golden goose, and many of us feel a pressure to hurry – bordering on panic – in order to get on the “property ladder” before it’s too late.

 

Home ownership is a common dream for many of us. But is it the best one?

 

In our enthusiasm, though, we forget that buying a house is a massive financial decision. For most of us, it’s the biggest purchase we’ll ever make. So it’s surprising that the question of whether or not it’s even a good idea to buy a house is often considered less than where to go on holiday next year.

The best way to approach such a big decision is to go in armed with the facts. Understanding the possible pitfalls will help you approach home ownership with maturity, wisdom and good sense. You will be able to look back in 20 years and look back on the decisions you made without regret. Here are some thoughts to get you started:

1. Affordability. A mortgage is a type of “secured” loan. This means that if you stop paying, the bank has a claim on your house. It doesn’t take a long memory to know that this threat has teeth. Psychologically, you should consider a mortgaged property as being owned by the bank.

2. Interest rates. At the time of writing, interest rates are really low. The Bank of England base rate, for example, is close to zero. In the 1980s, though, it was more like 10-15%.  Over in the States, the fed funds rate similarly reached a high of 20 points in 1979 and 1980. Could you afford your mortgage repayments doubling or trebling?

3. Opportunity cost. My dad always told me that rent is money down the drain. That’s only half true. To illustrate the point, we’re going to imagine being already pretty well off. You might rent a $200,000 property for $10,000 per year which you could have bought outright. If you buy it, you save $10,000. If you don’t, you might put that money into an investment which yields 7% – $14,000. You just won $4000 per year by skipping home ownership. Of course, we’re not factoring in leverage (see below) or the tax implications and stability of that return.

4. Leverage. Property can be a powerful investment due to leverage – you can put in e.g. 20% and borrow the rest. The ordinary citizen is gonna find it hard to get a similar financing arrangement on their stock portfolio. If the value of the property goes up, you keep 100% of that additional value. Just don’t forget that this cuts both ways. Property can go down in value too, eroding all of your equity and more, and you still have to pay the mortgage.

5. Stamp duty. Some countries – like the UK – have a government tax on transferring land or property. This can go up to a hefty 12% for the most expensive properties, so can be a significant added cost of home ownership.

6. Conveyancing. Most UK buyers will use a solicitor or conveyancer to conduct searches on a property they want to buy (e.g. to check ownership or flood risk), and then to exchange contracts and complete on the property.  This doesn’t scale with the cost of the property, so could easily add 1% to the cost of buying a cheaper property.

7. Survey. A full structural survey can cost hundreds. Whilst cheaper options are available, bear in mind that buying a house is a huge financial decision for most people. Weigh up other factors like the age of the house, and whether you’re in a position to cope with a large unexpected maintenance bill, to decide what the most appropriate option is here.

8. Valuation fees. Some mortgage lenders will charge a valuation fee, which could run well over £1000.

9. Mortgage early repayment costs. This one is important for us Financial Independence types. We might be in a position to pay back our mortgages faster than most. However, typically the charges range from 1–5% of the value of the early repayment. Consider looking for a mortgage with no early repayment charge if this is a path you’re looking to take.

10. Moving costs. Are you moving far? Don’t forget that you need to get your stuff from A to B. If you don’t plan this right you could be hit with significant costs, especially if you’re moving long distance.

11. Property taxes. This is really specific to where you live. An average American household spends a couple of thousand on property taxes on their home. Council tax in the UK goes to local councils to pay for services like bin collection, but households end up paying a similar amount.

12. Maintenance. Upkeeping your home can be a significant expense – one that you don’t need to pay in most countries if you’re renting. 1% of the home’s value per year is a common rule of thumb, though you will want to consider other factors like age, climate/weather and who’s living there.

13. Leasehold/Ground rent. In some parts of the UK and US, home ownership is not always quite as simple as owning outright. Especially some parts of England and Wales, and on apartments, “leasehold” is common. This means that instead of buying a property, you are buying a long-term lease on it. You do have all sorts of rights, and a level of security not usually associated with being a tenant. In the case of leasehold houses you should also be able to buy the “freehold” (~complete ownership). That process can be expensive, though. You also have an ongoing cost – ground rent – to use the land the property is built on.  Be doubly cautious when buying a relatively newly built house. The leashold agreement can leave you with spiralling costs, and a house that is difficult to resell.

14. Insurance. Not one of the biggest costs of home ownership, but still factor in another couple of hundred in the UK or around a thousand in the US year after year.

15. Anchoring effect. Some of us like roots, some of us like wings, some of us a bit of both. Our 20s and 30s can be a great time to indulge our wanderlust or explore living in new places before deciding where to put down roots. Whilst it’s never too late or too hard to make a change, the costs of home ownership we just covered will make you think twice about packing your bags overnight and moving somewhere new.

 

What do you think? Is home ownership worth it? Does it increase or decrease your freedom? Is it necessary for Financial Independence?

 

 

 

Why your dream of the quiet life is (probably) doomed to fail

When I first heard about Financial Independence as a structured concept, it was through the Early Retirement Extreme blog. Here was a guy who had saved like an absolute lunatic for five years and amassed enough money never to have to work again. I was hooked. If I could just pull through the hard bit, this could be me full-time in a few short years:

 

https://i0.wp.com/images.pexels.com/photos/871060/pexels-photo-871060.jpeg?resize=591%2C394&ssl=1

 

Well, here I am five years later, and I’m still not retired. Why? Was I too lazy to save hard enough? Did the Protestant work ethic get to me? Not exactly. The fact is, whilst I’m a big advocate of Financial Independence, I can take or leave the Retire Early part of the FIRE movement these days. Here’s why:

  1.  Pure idleness is unhealthy. Humans have evolved psychologically to work hard, so in the same way as it’s not natural for a tiger to be cooped up in a cage, it’s not natural for a human brain to be cooped up in its own inactivity. “Work” definitely doesn’t  have to mean the typical 9-5. There are plenty of other ways to get mental stimulation. But some form of meaningful structured work can be a good source of stimulation.
  2. Work becomes much more fun when it’s optional. A lot of the stress of work is knowing that you have to take the bullshit because you can’t afford not to. The mere fact of knowing you could tell your boss where to go can turn a horrible job into a decent experience overnight – for example by daring to ask for homeworking, part-time hours, or using your newfound freedom to take more risks (which actually often improves your performance).
  3. Some goals are far easier to hit in work. Let me give you an example. If you want to have a positive impact on your community by improving the design of your city, this will probably be a lot easier if you work at the city’s planning department, and piggyback on their resources, rather than building your own solo initiative from the ground up.
  4. It’s hard to shift from 100 miles per hour to zero. If you have the drive to save up a lifetime of wealth in five years, you probably have too much drive to be satisfied with lazing on the beach long-term. A bit of decompression – sure. But as a permanent lifestyle, it’s something that requires slow, gradual adjustment if that’s genuinely a transition you really want to take.

 

None of this is to say that you shouldn’t kick the day job as soon as you hit a “magic number” and move to the Bahamas. But as with everything, it’s probably worth a bit of introspection first!

 

What would you do if you could retire tomorrow? Would you still do your current job? Would you still do any kind of “traditional” work?

 

 

 

5 ways to practise gratitude and start thinking positively

Financial Independence is a great goal. Making and saving money is totally worthwhile. But ultimately, it’s just a means to further life, liberty and the pursuit of happiness. Almost all of us can agree that our wellbeing is more than just a sum of our material conditions. And that’s why gratitude can be a useful practice in the pursuit of a good life

 

Gratitude

 

The science backs this up. Studies show that gratitude increases our sense of subjective wellbeing. It also plays a critical role in our relationships with others. Robert Emmons in particular has devoted much of his life to explaining the scientific benefits of gratitude – physical, psycohological and social.

Despite the evidence, though, the only real way to know if gratitude will enhance your life is to give it a go. So why not try out one of these five simple techniques:

  1. Keep a journal. Set aside five minutes per day to write down one thing that you are grateful for. This could be a loving relationship, your health, the way you tackled a particular challenge, or just something nice someone said.
    • BONUS: Look back through your earlier entries and feel the warm, nostalgic glow of gratitude all over again…
  2. Look out for silver linings. Get in the habit when something goes wrong, or feels negative, of challenging yourself to see something positive in the situation. This can nip the negative feelings in the bud and stop them bleeding through into the rest of your day.
  3. Tell someone. My girlfriend is much better at this than me, but if you’re grateful for a relationship – family, friends or lovers – any time’s good to send a text and let that person know.
  4. Play with pessimism (not for everyone!). If you’re having a frustrating conversation, imagine what it would be like if that person were to die before you could speak again, leaving things on a sour note. Be grateful that you have the opportunity to turn this around into a positive moment.
  5. Get stuck into nature. Getting lost in nature can be a great way to strip everything back by seeing the simplicity of what really makes life tick (it’s not iPhones or corporate meetings). Getting rid of modern distractions can be soothing and can help us see that many of the things that stress us are just relatively trivial.

 

Did you try them? How did they work for you? How else do you practice gratitude?

 

 

 

Financial independence is feminist. Let me mansplain why

As a middle class millenial, conversation about identity and “privilege” is something that has been swirling around me constantly for a good few years. Still, the feminist cause is very much at the forefront of the wider public consciousness in the West too at the moment. There’s the #metoo movement of course. And in the UK, 2018 marks 100 years since Parliament passed a law which allowed the first women to vote.

At work, there is also a real push to promote women further and faster. I do have some misgivings about who that really benefits (mostly privileged, middle class women from what I’ve seen – intersectionality, anyone?). Still, I’m quite happy to call myself a feminist. After all, who can really argue with equality? So far so good. The thing is, though, there’s only so far that mere advocacy can go:

 

You change existing systems with disruption not protest. Existing power structures always resist change. If you think taxis are a bad gig, you don’t lobby for cheaper taxis; you start Uber. Taylor Pearson

 

Feminist enjoying freedom on the beach

Not all strong, independent women are to be found in a boardroom

The “underdog” narrative which underpins much of the debate can inadvertently cast women into a passive protest role. Not exactly the feminist spirit if you ask me. So why not disrupt the system instead?

(Enter Financial Independence, stage left.)

The Financially Independent feminist doesn’t need to complain about the cards they’ve been dealt. FI means you get to pick your own cards. Hell, it means you get to play a whole different game if you want to:

  1. Money is power. Whether we like it or not, money is a tool to make things happen i.e. a source of power. If feminism is about challenging an imbalance of power, then there are worse places to start than with finances.
  2. Negotiate with strength in the workplace. The common wisdom is that women are less willing to negotiate pay rises. I’ve no idea if there’s any scientific truth to that, but hey – knowing you can walk away is crucial to any meaningful negotiation. Financial Independence gives you that.
  3. The cold, hard maths of Financial Independence. Compound interest doesn’t care about your genitals. Enough said.
  4. FI is about personal responsibility. Changing society for the better is a worthwhile goal. However, we should all focus first and foremost on what’s within our control. If all of us were to do that, well “there’s no such thing as society. There are individual men and women and there are families” – surely that would add up to a positive change?

 

What do you think? Does FI sit well with feminism? Is there anything unfeminist about FI?

 

 

 

Introduction: Meet the Captain

The secret to happiness is freedom, and the secret to freedom is courage – Thucydides

 

The Captain on Compass Background

Hi there. If we haven’t met yet, I’m the Captain. For as long as I can remember, I’ve always been a bit of a misfit. Not a rebel. Not someone who railed against social norms. Just someone a little quirky who didn’t always see the logic in everything “normal” people did.

One of the things I wondered from childhood is why high earners didn’t just save and retire early. It took me till I was 21 to find out I wasn’t the only one to wonder this. One sunny day in 2012, an idle internet search led me to Early Retirement Extreme, which opened my eyes to the possibility of saving hard for 5 years to generate enough passive income to retire.

I spent the next year or two saving hard and sailing the seven seas (the inspiration for the nautical theme to the blog). Although ERE inspired me to some pretty hardcore saving by most people’s standards, I realised I had fallen into a trap of chasing the destination with no real thought to the journey. I was still slave to a materialist dream*.

Fast forward a few years. Despite easing on the saving, I found myself aged 26 – a land-lubber once more – with a paid-off house and a modest investment pot. I also found I no longer had any burning desire to retire. I looked back and realised I’d sleepwalked into living the dream. The magic ingredient? Freedom.

I’m not saying this to brag. You may well be cleverer, wealthier and better-looking than me. Actually scratch the last one – nobody’s better-looking than the Captain. And if you’re already happily retired, or plan to work till you die, or love nothing more than buying flash cars, this blog probably isn’t for you. But if you want to hear more about what I’ve learnt so far and – hopefully – share what we’re learning too, step aboard. Financial freedom isn’t easy, but hey – few of the best things in life are.

What’s your experience? Where are you in your financial journey?

 

*This is totally not the message of ERE – it’s a great blog – just the way that I ended up taking it

 

 

 

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