Passive Family Income » recession in america

What does eHow and the Recession Have in Common?

John S. — Wed, 27 Jan 2010 22:46:08 +0000

Let’s face it, the recent drama around the eHow UK site and the article sweeps last year have left many eHow writers with a bad taste in their mouth. What once was a very promising and reputable site has been under protest by many long time loyal writers.

I would be lying if I said that I wasn’t concerned, frustrated, and just plain annoyed at how these events have transpired over the past several months. Instead of focusing my attention on the negative and complain about why eHow is bad and threaten to pull my articles, I want to focus on what we can learn from this experience.

Interestingly enough, the economic recession has also been in the spotlight for over a year now and there are a lot of lessons we can learn from there as well. When you get down to it, there are actually a lot of commonalities between the recession and the events that have transpired on eHow.

Instead of focusing on what is wrong with our economy and eHow, let’s learn from what has happened and take advantage of the situation. Here are a few lessons that I have learned that hopefully you can as well!

Diversifying Your Income

The global recession has been rough on everybody. From lost jobs to foreclosed homes and wiped out pension plans, the economic slowdown has had an impact on many lives. If there is one thing you should have learned during this recession is that relying on a single income from your job is risky business.

The same can be said about generating passive income solely from eHow. While eHow may be the fastest and simplest opportunity to build online income streams, it should only be part of your overall portfolio. The recent earnings drop that many eHow writers are experiencing has been a painful realization that they are not properly diversified.

Just as your stock broker has told you for many years to diversify your assets, the same can be said about your income. Proper diversification of income streams has become just as critical as spreading your savings across multiple assets. The recession has taught many of us this tough lesson, just as some eHow writers are experiencing the same thing through their efforts.

New Opportunities

One of the best side effects of a recession are the innovations and new ideas that come from it. Job loss forces many people and businesses to begin to think creatively. In many cases, an employee who is let go is forced to find other means of income. This eventually spawns new business that may have never been seen during fat economic times.

I have been a huge supporter of building recurring income streams by publishing online content to eHow. While it is only open to writers living in the U.S., there are plenty of advantages. First off, it is FREE so you are only out the time invested in publishing content. It is also probably the quickest way (that I have found) to start earning income immediately after you publish an article.

Unfortunately, for all the reasons on why to love eHow, it makes many of us comfortable. It is just human nature to migrate towards doing what is comfortable to us. Many eHow writers (including myself) continued to publish content on the site knowing they wouldn’t have complete control once it went live.

Do yourself a favor and learn from the events of recent months. Build income streams that have long lasting power that you can control!

Build a Stronger Model

Recessions tend to expose weak areas in the economy and send poorly run companies out of business. For example, the housing bubble has been exposed as well as people who had been living beyond their means in the most recent recession. These specific areas have been exposed in the downturn, while well managed companies have come out stronger.

The same thing can be said about the eHow income model. While times were good, nobody was complaining about the eHow income model. Post an article, wait a few days, and watch the earnings add up. Now that things have changed there, writers are complaining about significant drops in views and earnings.

The facts are that every eHow writer should have known that you are not in 100% control of your articles. If eHow decides to make a change to their earnings model, they can and there isn’t much you can really do about it. The stronger model in this case is writing content for sites that you own outright and control. While these income streams may not be as easy to start and will take longer to earn siginficant income, it is a business model that can withstand the ups and downs of the future.

Final Thoughts

Do I plan to start pulling my articles from eHow? Will I stop writing any new content to eHow? Will I boycott eHow and begin protesting their recent actions? The answer to all of these questions is – NO!

I don’t plan to overreact in the short term to what is going on right now with eHow. My earnings have really slumped in the past couple of weeks, but they slumped back a few months ago and then quickly turned around. For the near term, I will monitor things closely and continue to submit my 20 – 25 articles per month.

While I still plan to include eHow in my passive income model, I will do so with caution always focusing on building and growing my own content along the way.

How do you leverage difficult economic times (like a recession) to your advantage? Are you able to grow stronger as a result?

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Recession in America – Building Your Savings

John S. — Mon, 06 Apr 2009 11:36:02 +0000

Today’s post marks the final installment of the Recession in America series here on PFI. What better way to wrap things up than to discuss a topic that I am passionate about – Personal Savings. Yep, the statistics are starting to show that in the last year, Americans are starting to save more of their paychecks than they have for many years. Prior to the recession, personal savings was often unheard of for the average person. Why save when you can borrow the money just as easily seemed to be the mantra of most. Unfortunately, that mentality was a factor that led us to the worse economic downturn since The Great Depression.

There are several advantages and even disadvantages of increasing your personal savings. I have broken down these pros and cons below as well as offered a happy medium of balance that I believe is key.

Savings Benefits
Increasing your personal savings is a way to protect yourself from emergency situations like job loss or unexpected medical bills. In years past, Americans were spending more than they were bringing in, which hurt our economy over the long term. Instead of borrowing money to pay for items, one should avoid these behaviors and turn their focus on increasing how much they save every paycheck. This nest egg overtime will add up and can be used to pay your mortgage or car payment if you lose you job.

Living within your means is now becoming reality for most people who have been impacted by the recession. Part of living within your means includes taking responsibility for your finances and controlling your costs while increasing your savings. An important benefit of increasing your savings is that you can begin earning money off of that savings that can work for you. No matter how much your personal savings is, you should consider creating a passive income stream with it that can be used to generate additional income for many years. Consider putting your extra income into a high yielding checking or savings account. If you have over $1,000 worth of savings, then look at investing it into a certificate of deposit.

Downside of Savings
Unfortunately, the downside of increasing your savings is felt on the macro economic level. If everyone globally continues to hoard their cash and increase savings, then nobody is spending any money. If money is not being spent, businesses must cut back their workforce which leads to higher unemployment and job loss. When people are unemployed, they can no longer pay their bills, or at least until their savings runs out. This is a nasty viscous cycle that is starting to show up in our economy.

While saving as much as you can will probably benefit everyone over the short term, it really does not help the overall economy. Eventually it seems to trickle back down to the average person in the form of layoffs and other economic hardships.

Savings Compromise
It seems that we have almost swung from one extreme to the next. Years and years of out of control spending helped push us into a deep recession. Now the change in focusing on penny pinching and savings is accelerating this recession leading to struggling businesses and high unemployment. It seems like there must be a happy medium out there.

Instead of hoarding all of your cash, look at spreading your savings out across several different investments. As mentioned earlier, look at creating some passive income by investing your money into a high yielding account. As long as you are under the FDIC insured limit, your money will be safe. This money that has been invested can then be used by the banks and other lending institutions to conduct their business and lend that money back out to businesses and other individuals which stimulates the economy.

If you start to earn passive income off of your investments, consider using that money to purchase items that you may have done in the past or use it to go on a vacation. Since this money is not part of your true savings you started with, you can take a portion of your income generated and use it to stimulate the economy.

While the scenario noted above is not going to change the world on it’s own, it is just an idea to consider. There are many other concepts and ideas that can be practiced to find a happy medium between savings and spending. While both savings and spending are important in their own respect, too much of either is not a good thing over long periods of time. Hopefully we can find a happy medium along the way that will help turn our economy around.

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Recession in America – Do It Yourself

John S. — Mon, 30 Mar 2009 11:58:26 +0000

A few weeks ago I discussed how an increasing number of families are turning to gardening as a way to bring down their expenses and cope with this recession. That is a perfect example of how people are shifting to do it yourself projects in order to save some money instead of paying someone else for a service. The trade off of saving money is investing your time and sweat equity into a project that will help your pocket book.

Fresh off of completing my income tax returns recently, I read that several of the tax preparation companies are reporting lower numbers of customers this year. Where are these people gong? Instead of paying a company to prepare their taxes, people are switching over to filing taxes on their own using software packages like TurboTax to save money. This is yet another trend that is a direct result of the recession and the impacts it is having on people.

Here is a lit of a few growing DIY trends that are catching on during this recession -

Taxes – As mentioned above, many people are switching from tax preparation services to file their income taxes and are using software applications to complete their taxes. Depending on your financial situation, you may be able to save over $100 just by spending a few hours to do your own taxes!
Home Improvement – Home improvement projects have always been a place where do it yourself work has always seemed to thrive. However, this trend is increasing as the recession grows bigger. Home improvement superstores are now marketing their products more and more around small home improvement projects that home owners can complete on their own.
Yard Maintenance – Very few people enjoy cutting their grass (except for me), but many people are canceling their lawn service in an effort to cut costs. Instead, people are planning to maintain their lawns on their own this year. This is a great way to save several hundred to thousands of dollars by doing it yourself!
Gardening – The topic of a previous Recession in America post, people are turning towards gardening as a way to cut back on their grocery bills. The number of gardens estimated to be put in this year is expected to grow by double digits. People are looking to start growing their own produce instead of paying a premium for having someone else do it.
Brown Bag – Many workers are beginning to make their own lunches to avoid spending money each day on prepared food from restaurants and cafeteria’s. Spending a few minutes each day packing a lunch instead of eating out could save you well over $25 every week.
Cup of Joe – Like the brown bag example, many people are starting to brew their own coffee instead of paying $4 – $5 bucks for a premium coffee at Starbucks. Again – another great way to save a good amount of money every week.
Cleaning Services – Another nice to have service if you can afford it, is to hire a cleaning service to come into your home or business. Individuals looking to cut back on costs are now dropping these services and completing the work on their own. Even companies are dropping cleaning services or at least cutting back. They now have their employees completing these tasks in an effort to reduce overall expenses.

Most of the examples I have listed are very easy for the average person to complete. After all, making coffee and your own lunch don’t take a lot training and background. Buying prepared goods like coffee and lunch was more of a convenience purchase than one that paid for expertise in something. On the other hand, home improvement projects and lawn maintenance could be considered purchases for convenience as well as paying for expertise.

Do it yourself projects or tasks can come in many different forms as I noted in the list above. Regardless the reason of why people paid for these services in the past, many are moving away from these services to reduce costs. People are now finding they can easily do without these services and complete the work on their own to put more cash in their wallets. On the flip side, the companies who specialized in these services are struggling with many of them going out of business.

I wanted to note that sites like eHow are gaining a lot of popularity as a result of a do it yourself mentality. Instead of purchasing books and manuals on how to complete a certain task, people are turning to the internet for free information. If you are looking to make some extra money, you should strongly consider opening up an eHow account to write about your experience with do it yourself projects. You will be helping someone else out while earning a little extra cash along the way!

What DIY projects have you started yourself that you would have normally paid for?

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Recession in America – Long Distant Families

John S. — Mon, 23 Mar 2009 11:33:46 +0000

This is the eighth in a series of ten posts focusing on the Recession in America and the impacts it is having on things other than your 401k and personal finances. Check out the first seven posts in this series titled -
Recession in America – What about our pets?
Recession in America – Home Foreclosures
Recession in America – Unexpected Landlords
Recession in America – Abandoned Subdivisions
Recession in America – Trading Stocks not Investing
Recession in America – Freelance Jobs
Recession in America – Gardening

I recently read of yet another growing trend that is a direct result of the recession in America. Because of skyrocketing job loss and unemployment, husbands and wives are looking for work any place they can find it – even if it is out of state. Jobs are hard to come by these day which is why couples are looking for any type of open jobs they are qualified for. This has led to a number of families being broken apart for months if not years because of the economic recession.

It appears that often times an out-of-work spouse will find a job that is at least several hours away making it an impossible daily commute. This means that the other spouse is left behind more than likely with the children to continue on managing the household – sometimes trying to sell or rent out the home so they can move to the new location. This has caused a lot of stress and strain on marriages and relationships for these long distant families.

It is very unfortunate that families are being forced into these types of situations. I know from first hand experience (see below) that it can be very difficult living away from a spouse and child for an extended period of time. I just hope that these families can get by during these hard times and everything will work out for the best.

My Long Distant Story
Almost two years ago, my family went through a similar situation. While I had a good job and stable income from my employer, my wife and I were looking for a way for her to quit her job so she could stay home with our children. In order to make that possible, I needed to find another job that paid much better so we could financially support ourselves. We also wanted a larger home to make room for our new addition (youngest son) who was to be born in a couple of months.

I decided to start job hunting in other locations besides the state we lived in, as unemployment had already been on the rise there. I was fortunate enough to find a new job that would give me a 20% raise from what I had been currently making. The only catch was that the job was 12 hours away from where we were living. After long debate, my wife and I decided to make our life changing decision and I accepted the job offer.

As a transition period, I was separated from my wife and oldest son for two months while she stayed back to prepare our home for sale and to work out any other details before our official move. As I needed to be at my new job, I moved several months before the rest of my family and stayed with friends until my wife and son officially moved.

From first hand experience I can tell you that this was the longest and hardest two months of my life. I often second guessed our decision as I really missed my family. I can’t imagine how hard it must be for other families to go even longer without seeing each other. I give a lot of credit to people going through this and to all the military families who go through longer separations from their loved ones that my family experienced.

Final Thoughts
I would just like to end by mentioning another reason why I am working so hard to create passive income. Creating passive income will allow my family and I to live a very flexible life. If I were to lose my job, I would probably have to look for new employment in another state. I don’t want to be separated from my wife and two young boys again. I want to be there for them every day to see them grow up. I will even go a step further and say that I want to create passive income so that I can drop them off at school someday and go to their baseball games without worrying about work and getting the time off. Just another great example of how passive income can change your life!

Have you experienced being separated from your loved ones for an extended amount of time?

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Recession in America – Gardening

John S. — Mon, 16 Mar 2009 11:20:23 +0000

This is the seventh in a series of ten posts focusing on the Recession in America and the impacts it is having on things other than your 401k and personal finances. Check out the first six posts in this series titled -
Recession in America – What about our pets?
Recession in America – Home Foreclosures
Recession in America – Unexpected Landlords
Recession in America – Abandoned Subdivisions
Recession in America – Trading Stocks not Investing
Recession in America – Freelance Jobs

Today I would like to cover a new trend that is forming as a direct result of the economic recession we are facing. This trend is actually something I believe is a good thing and will actually help our environment. This latest trend that I am writing about is the gardening boom that is going on. Because of the recession, families are looking for any way to cut back on expenses – including groceries. Besides meat, some of the more expensive grocery items are fruits and vegetables. As a result, families are beginning to go back to a lost tradition of gardening.

Home gardens are expected to grow by double digits this year and some gardening companies are actually running out of vegetable seeds already – and spring hasn’t officially even arrived yet. Depending on the amount of fruits and vegetables you purchase at the store, you could cut out $50 a week or more by growing your own produce. I calculated that my family spends on average about $30 per week on fruits and vegetables during the spring and summer months. While there are some items that we wouldn’t grow in a garden (i.e. apples), we could save about $15 per week by growing our own garden.

There are some other benefits to starting your own garden besides saving money. Here are some noticeable benefits to starting a garden besides the obvious money savings you will notice -

Environment – Starting a garden and taking care of it is good for the environment. If you are growing your products locally, then they don’t have to travel on a truck that wastes gas and puts harmful emissions into the atmosphere.
Pride – I personally enjoy gardening and my landscape design around my home. I take a lot of pride and ownership in what I grow. Growing and maintaining a garden can give you a feeling of accomplishment and pride in the hard work you have completed.
Stress Reducer – Being outdoors and taking care of a garden is a useful way to lower your stress from the daily grind. You are outside getting fresh air and taking care of something. What better way to unwind at the end of the day than to go outside and pick some fresh veggies for dinner!
Family Project – If you have young children, a garden can be an excellent way to teach your children about nature. Have your kids help you with the garden and teach them about plant life and fruits and vegetables along the way!
Health Benefits – Starting a garden also has the obvious health benefits (other than reducing stress). Eating fresh fruits and vegetables in your diet will help you lose weight and promote a healthy lifestyle. If you have the opportunity, try and start an organic garden to reduce the amounts of harmful pesticides that are put into the environment.

My Family Garden
Last year, my oldest son and I started a small garden in our backyard to grow some of our favorite fruits. We planted several watermelon and cantaloupe seeds so that we could enjoy the fruit all summer long. While we did not start this mini garden to save money, we did see some costs savings along the way. We actually started the garden as a project for my son and I to work on together. He loves watermelon and was very interested in how the plants grew and where they came from. What better way to teach him this than by growing our own plants right in the backyard!

After some discussions with my wife a few weeks ago, we have decided to go all out this year with our garden. My wife and I have tried to start buying more organic fruits and vegetables to eat. So instead of spending a lot more for these products at the store, we plan on growing a lot of different fruits and vegetables on our own to offset some of the costs. This project will also help to teach our children more about the environment as they will see how different plants grow. In addition, our oldest son will be responsible for watering and weeding the garden throughout the week which will give him something to be responsible for. These activities will also get him outside away from watching television all summer long!

Do you grow your own fruits and vegetables?

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