Most people that currently work in “Corporate America” are really feeling trapped today. They are grateful that they have a job and can still support the family, but since many of their co-workers have been laid-off, they are overworked and under-appreciated. Since the economy is still at a lull, there’s just nowhere else to go. They just need to keep their head down and stick it out. But, do they really need to? What are the other options?

If you are a regular visitor, you have seen John’s progress toward creating a passive income. I do not know if he is attempting to replace his day-job income, but within another year or so, I bet he’ll have the option to do so! He is a great model for the topic at hand today: How to quit your day job with little risk.

Step 1: Find Your Reason Why

Before you even start to think about quitting your job, ask yourself why you would consider it. Is it….

• because you despise your tasks every day?
• because of the people you work with?
• because you’d like to earn the income you deserve?
• because you’d like more time with the ones you love?

Whatever it may be, make sure that you write it down, and remind yourself of this reason as you go through your journey. If you do not have your reason readily available, you will most likely fade off from the path of success and continue working at the job you hate. Why? Because there WILL be obstacles, and without a good reason, it will be much easier and more convenient to go shrug your shoulders and go back to your familiar lifestyle.

Step 2: Begin Brainstorming Ideas for a Side Business

The best way to quit your job without risk is to already have some cash-flow coming in from a side business. Once it replaces your current income, vwala! the day job may no longer be needed. 

Begin to think of work that will generate income, but also fulfill your needs that you expressed in step 1. Also, make sure that you have a passion for your possible side income. If you love the work you do on the side, you will have a much better chance at replacing your day job income.

Step 3: Find the Time

Many of you are saying, “How in the world am I going to find time to work MORE?” This is an incredibly valid question. Those of you that really want to quit your job will find the time. Those of you that don’t want it quite as badly will not. For those of you that truly want to leave that day job, read on.

Do you have a television? How often do you find yourself in front of it? An hour a day? Two hours a day? Maybe even more? Start to check out the clock and discover how much extra time this could free up (especially on the weekends). How exciting is television really? Half the time I don’t even remember what show I’m watching during the commercial break.

Learn to schedule everything! Outside of work, many of us do not have much of a schedule. We get home, tinker around a bit, eat dinner, and then the time just slips away until it’s bed-time! Start documenting how you are spending your time and learn to utilize a daily calendar. Once you get pretty good, you will have your day scheduled by every quarter-hour. You’ll be amazed how many extra things you can squeeze in when your day is planned on paper!

Step 4: Get Started!

There is really an infinite amount of side-businesses you can start. I have heard of quite a few creative ventures, but even though some of them sounded off the wall, they provided the income necessary for those individuals to get out of that daily grind.

You might be struggling for some ideas, so let me get your brain juices flowing with a few:

• Blogging – Many people are trying this to create some income (including myself), but to be honest, most of the incomes are not large enough to replace the day job income. To do this, you’ll need to operate multiple sites, or try your hand at the next option.
• Freelance Writing – If you decide to blog for some extra income, once you become somewhat established, you will have some options to do some freelance writing. You will most likely get paid per article, but if you have enough gigs, this could surpass your current income shortly.
• Wedding Planning – Since most weddings are on the weekends, this is a great way to earn some extra income, and if you’re good – replace that regular income.
• Photography- you could photograph children, families, weddings, events, or even sell your photos online! There are so many options here (as I’ve learned from my wife – this is her fortay, and she’s starting to earn her income through this medium).
• Day Care – some of you are new moms and can’t bear the thought of going back to work. With the proper licensing, you could watch some other kids along with your own and make a pretty good living. Plus, you get to see your kids grow up instead of your co-workers (actually, some co-workers never really grow up do they…)!
• Pet-Sitter/Walker – People love their pets and make sure they are taken care of. If you have a love for animals, this one is for you, and it can be quite lucrative if you schedule your day properly!
• Cell Phone Repair - I just had to include this one since I recently heard the story. A kid dropped his cell phone and broke it. Through a little research online, he was able to fix it, and then started a business fixing other people’s cell phones! He’s now franchised his repair business and is making thousands of dollars a month! Turns out, he won’t need to look for another job after college.

What ideas do you have for a side business? Are you currently making money on the side already? I’d love to hear your story.

This post was written by Derek.

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There are quite a few people today that are beginning to dig their way out of debt. They have monitored their spending, created a budget, and have done the best that they can to stick with it. But, as many of you have experienced, the excitement of becoming debt-free gets pretty old after a while. It was fun to eat out with friends and spend money without regard. This new regimented budget is cramping your style! Well, let’s find out how to speed up the process and get you out of debt faster than you planned!

1) Stick to the Budget – This is the most import step. If you do not learn to stick to your budget, none of these other steps matter. Think about it, it’s the same premise that put you into debt. When there are more dollars in your expense column than your current income, the only result is debt! If you do not stick to your budget, you might be making some progress, but it’s going to take so much longer to reach your goals!

If you truly know the categories of your budget and agree to stay within their limits, buying those Cheetos at lunch will be less tempting, don’t you think?

2) Clip Those Coupons – Clipping coupons is not the chore it used to be. You can easily save $5-10 on every trip to the supermarket by spending less than 10 minutes online. Take a look at coupon sites like http://www.couponmom.com/. This site will show you where the deals are, and they’ll provide you with all of the weekly coupons for printout.

I have to be the worst coupon clipper ever, but I’m still able to save about 20-30% on the groceries every week! You don’t need to spend a bunch of time digging into the buy one get one free sales and double-couponing (if you are good at it though, you’ll save a bundle!); just print out the coupons and use them. They really add up!

3) Create New Income Streams – One of the best ways to pay off that debt in a hurry is by making more money! Let’s say you only have $100 extra a month on your current income. If you find some side jobs that can pay you an additional $400 a month, you’ve just enabled yourself to get out of debt 5 times faster! If you were $1,000 in debt, it would have taken you 10 months to be debt-free before, but now you’ll be free in only 2 months!

My wife and I decided to really tackle our debts in 2011 and started by finding some additional income.

• Cat sitting – dropped by my friend’s house once a day for a week to feed them and take care of the litter boxes = $90
• Baby sitting – my wife worked for a few days taking care of kids = $100
• Dog sitting – taking care of a very well-mannered dog for 5 days = $160
• Web income – picked up a few writing gigs online = $100

With those 4 efforts, we were able to create $450 of additional income that will go straight to our debts!

4) Sell Your Stuff – Everyone has a few things that they really don’t need. My wife and I had two TVs, but we really didn’t need one in the bedroom. In fact, I had one of those ginormous tube televisions, and it was bending our TV stand, so I sold that for $60. The PS2 was collecting dust, so that earned me another $75. My surround sound was an easy sell at $150. We even sold some bedroom furniture that we decided we could do without ($550)!

5) Keep Your Mind in the Future – You might still be saying, “How could you get rid of your bedroom furniture!?” It’s quite simple really. I’m already picturing myself in my dream house (my dream beginner house that is) with a nice big screen TV mounted on the wall. I’m willing to sacrifice some stuff today, because I know how much sweeter those days in the future will be!

If you keep thinking about those future days when you are free from debt and living the life that you’ve always wanted, the sacrifices in the present day will seem much less severe.

Are you currently digging your way out of debt? Have you sped up the process by doing any of the things outlined above? What did you do?

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Solar and wind power often make the news headlines because of their ability to lower the impact of our lifestyle on the planet. For most people, however, greater appeal is found in the way solar and wind power can save them money.

Still, for some people like you, renewable energy means more than just helping the environment or saving money: for them, the appeal is the renewable income stream that comes with these power sources. The secret to making money from your renewable energy source is to reduce your own power consumption so that you can sell surplus power to the electric company.

Here are some useful tips that will help you realize an important benefit from solar & wind power: create a renewable income stream & save on utility bills.

1. Spend as little money as possible so you will realize a profit from your venture sooner: By this, you need to be smart, not cheap. Federal tax incentives are in place that make solar and wind energy sources affordable. By understanding what the laws and regulations stipulate, you can maximize the amount of production capacity you have while minimizing the cost of the system. As you sell your excess power back to the electric company, you will be able to recoup your initial investment and start turning a profit on the power you generate. By keeping your initial investment low, you can start profiting from it sooner.
2. Switch off your electronic gear: Electronic equipment such as your computer, printer, speakers, router, DVR, etc. sucks up power all day if you leave it turned on. Some equipment consumes power even when you have them turned off. To make it easy to reduce this power consumption (and increase the surplus generated by your solar or wind equipment); plug all your gear into switchable electric outlet strips. This makes it easy to cut off all power to your equipment, reducing your power demand and increasing your revenue from surplus power.
3. Set up annual HVAC inspections: A well tuned HVAC system will consume less power than one that is never maintained. Through annual reviews, you can always make sure your equipment is in optimal operating condition so that your power consumption stays under control.
4. Turn off lights when no one is in the room: Make sure everyone in your household understands that a burning light is burning money. Rather than using your surplus wind and solar power illuminating empty rooms, why not sell it back to the power company for cash?
5. Reset the thermostat: Rather than creating an arctic freeze inside your house during the summer and sweltering heat in winter, moderate your thermostat. A willingness to be a little warm in the summer and a little cold in the winter could be what it takes to reduce your electric consumption to the point where you have surplus power that can be converted into cash.
6. Change your light bulbs: Thanks to the wizards in Washington D.C. you soon will be a criminal for having incandescent bulbs in your house. Get a head start on compliance by replacing all your traditional light bulbs with new, energy efficient florescent models.
7. Open the shades: If you are a home office worker or someone who is home during the day, open the shades and the curtains to allow the daylight to illuminate your room. Sunlight is free, but lights are not, so it only makes sense. By keeping the lights off during the day, you will contribute to the surplus power you have available to sell back to the power company.
8. Invest in new energy efficient appliances: New energy rules allow you to get tax credits on many energy efficient appliances. Through these subsidies, you can reduce the amount of power it takes to sustain your household, increasing the amount of solar or wind power you are able to sell.

You now have 8 ways to reduce power consumption to augment your solar & wind power: create a renewable income stream & save on bills so you can make the most money possible as you help save the planet.

John’s Comments – I was excited when Tom approached me about writing on renewable energy sources and the potential income streams they could produce. I have been doing a lot of research lately into passive homes and hope to incorporate some of my thoughts into future posts.

Tom Becker works as a writer for Money Choices where you can compare interest rates and read thorough reviews of financial products.

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Picking up freelance work can be a great way to earn extra income. The money earned from these type of gigs can be used to help supplement your current income, pay off debt, or build passive income through a high yield investment. As the job market continues to feel the pain of the global recession, freelance jobs are becoming more and more critical.

With employers still reluctant to hire full-time workers and employees lack of trust in most companies, freelancing can offer some financial security. As this trend continues and as technology makes it easier to obtain freelance work, it is hard to ignore this potential income stream.

If you are interested in finding freelance work, here are 3 places you can start looking for opportunities.

1. Freelance Websites

Technology has opened up many opportunities for freelance work that were just not available 10 or 15 years ago. On the downside, it has also increased competition for freelance jobs and introduced foreign competition. Websites like oDesk and Elance provide a place where those looking for freelance work can bid on open jobs posted by employers.

Some of the more popular forms of freelance work posted on these sites include – website design, technical writing, blog and article writing, software development, graphic design, and much more. If you have any of these types of skills, you may want to start checking out a couple of these websites.

2. Former Employers

Former employers can be an excellent place to find freelance work, provided you left on good terms. A previous employer may be inclined to hire you back on a contractual basis to work on a project or specific set of tasks. By hiring a former employee, the company saves in training costs and understands the type of worker they are paying for.

I recently completed my first paid freelance assignment through a previous employer. My former employer actually contacted me for the job, as they felt I had the skills and prior knowledge of the work that needed to be completed. The employer saved money as I began working on the project immediately while I added a profitable short term income stream to help out our finances.

If you are looking to earn some extra income, then I highly suggest contacting a former employer to see if they have any freelance opportunities.

3. Networking

Networking is one of the most important tools used to find freelance work in today’s economy. Social networking sites like LinkedIn create an environment where freelancers can network with potential employers for future freelance work.

The nice thing about sites like LinkedIn is that they can be used at no charge to promote your services and skills to potential clients. Some freelancers also leverage popular sites like Twitter and facebook as another way to advertise their services at no cost.

I have received a few inquires about potential freelance job opportunities just from my LinkedIn account. While the timing did not fit with my schedule from these opportunities, I am planning to leverage this tool to find other freelance work that may become available in the future.

Final Thoughts

The traditional work environment is changing from what it once was. Most people I know from the baby boomer generation stayed employed with one company their entire careers before retiring. That just does not seem to be the case anymore. Whether it is the poor economy or improved technology, the trend of earning an income from freelance work is growing.

Freelancing is a great way to start a side business or begin a full-time job on your own. As the economy continues to struggle and companies are hesitant to hire on full-time employees, freelance opportunities will continue to grow. Employers who need specific jobs or projects completed are turning to part-time help to get by until they are confident of hiring again.

Now may be the best time to start considering adding on freelance work as a new income stream. I know that I am exploring several opportunities in this area to help supplement my income and work to become financially independent once and for all.

Do you pick up any side freelance jobs to help supplement your income? What other places can you suggest to find opportunities for those starting out?

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What is passive income? There are many different definitions that are thrown around depending on where you look. Some critics argue that there is no such thing and that anything claiming to be must be a scam. On the other hand, there are a large group of people who misinterpret the terminology and claim anything earned online is passive. The real definition fits somwheres in between these two extremes.

Let’s check out a few well respected online sites to get a better understanding of what some of the experts are saying.

The Simple Dollar says that it is – “… any source of sustained income that you earn without any additional work.”

Wise Geek states that these earnings are “… a type of income that once setup, requires no further input from the recipient.”.

Moolanomy definition states “… This is the opposite of active income. Once you stop spending time on these income sources, the income flows don’t necessarily stop. Of course, there are varying degree of passitivity and it’s desirable to have highly passive alternative income sources.”

IRS Definition

The United States Department of the Treasury has it’s own classification that is probably different than what you have heard in the past. According to the tax classification –

Passive income can only be generated by a passive activity. Just because the taxpayer did not work for the income does not mean it is passive. There are only two sources for passive income:
1. a rental activity; or,
2. a business in which the taxpayer does not materially participate.

The federal government goes on to say that the following types of income cannot be considered passive -

• Interest Income
• Dividends
• Royalties
• Gains on Stocks and Bonds
• Annuities
• Lottery Winnings
• Salaries

Definition of “passive” & “income”

Take a look at the definitions of what the words “passive”, “income”, and “passive income” mean according to Dictionary.com –

passive – “not participating readily or actively”

income – “the monetary payment received for goods or services, or from other sources, as rents or investments”

passive income – “Earnings an individual derives from a rental property, limited partnership, or other enterprise in which he or she is not actively involved”

The Passive Family Income Definition

It is absolutely necessary to honor and abide by the IRS classification of passive income for tax reporting purposes. However, that does not mean that we cannot consider dividend or interest income as passive for example. Regardless of how the income is classified for tax reporting purposes – a passive form of income requires less of your time so that it can be used on something else.

Here are 3 traits that can help clarify the definition listed above -

• Upfront Investment – An initial upfront investment of time is required. There is no such thing as a get rich quick method for creating this form of cash flow stream. Instead, it takes an initial investment of your time to build a successful and sustainable passive income stream.
• Limited Participation – Once a passive income stream has been established there is still some limited participation required. While the level of participation may vary, it is virtually impossible to completely ignore this type of income stream. The key however is that this type of income does not require full time participation by you.
• Potential for Recurring Income – Creating passive income has the potential but does not guarantee continuous recurring income. Once the initial time investment is made, the income stream has the possibility to earn income over and over for years to come.

What is your definition of passive income? I would love to hear back from you and will consider adding your definition to this list (positive or negative).

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