I recently had an interesting and eye-opening conversation with one of my children, who is very keen to accumulate some money, and excitedly shared his entrepreneurial idea with us. Unfortunately, we had to burst his balloon as the idea was not relevant for several different reasons. We suggested what we considered to be more age and lifestyle appropriate ideas – ranging from babysitting to gardening and pool cleaning. His immediate response was “but I don’t want to work to make money”! And I realized that he summed up the attitude of so many kids … and adults.
It’s really important for our children to be gainfully occupied and/or employed in the summer. Take a few minutes to visit my website and read a couple of articles I wrote on the subject http://labinsky.com/summertime-let-the-education-begin/ and http://labinsky.com/finances-from-a-teen-perspective/ to list just two. You can also listen to my podcast https://soundcloud.com/user-410257218/episode-1-kids-summer-and-budgets. The tips and advice in both articles and podcast will help improve the quality of your summer and that of your kids. But my focus in this article is not directed towards our children, but rather towards ourselves. And the question begging to be asked is ‘can we make money without working?’
Yes, it is possible to make money without working
Most of us would like the option of having more income without putting in an increased number of hours. And the reality is that there are options that are potentially available to everyone who is prepared to think out of the box.
Many people earn an hourly, monthly or annual salary for their specific job. In those cases, your income is a direct result of the amount of time you spend working. If you want to increase your income you have to increase your working hours. And everyone is limited by the number of hours in the day.
However, if you can develop an idea into a project/business in which other people are also active, you, as the originator of the idea, are then able to earn income as a function of the success of the business where others can be employed to perform the labor.
Similarly, consider if you can adapt a tangible asset that can ‘work for you’. Airbnb, for example, has opened up a whole market for people who rent part or all of their homes, and gain extra income with relatively little effort. Whereas the originators of the Airbnb idea are obviously the biggest earners by receiving a ‘host fee’ and a ‘traveler fee’ for every transaction, each individual Airbnb host also makes money from their asset.
The income received is no longer correlated with the physical number of hours that you can work in a day. You have broken that time equals money equation and can start making money “without working”.
For those who are thinking, ‘yeah that sounds wonderful but it’s not a reality I can ever create’ please continue reading for two other directions to diversify your revenue streams.
Too many people are stuck in the salary for their specific job scenario. Of course I’m not advocating that anyone throw away their safe job and salary in the hope that some idea might make them a millionaire. However, try not to be limited by the boundaries of your employment. While we often define ourselves by our nine to five career-based work, developing other side jobs to supplement income during slow times, unemployment and under employment, and in retirement can be an excellent source of additional valuable income. And an ‘out of the box’ side job has two potential advantages in addition to the added income. You may find greater job satisfaction and the side job might be able to offer more lucrative opportunities.
The millennials currently in the work force (those born from 1980 – 1994) have a very different work attitude to the baby boomer generation and generation x (born between 1946 – 1979). According to the old work ethic people looked for job security, often remaining in the same job until retirement if possible. Technological advances have changed the work market beyond recognition. And that is reflected in the way careers are now viewed for the short term, with people changing jobs and career paths much more frequently than in previous generations. And whereas the old school way of thinking might view this change as irresponsible and a display of lack of discipline, the new school of thought sees dynamic candidates ready for new challenges.
Even if you are ‘old school’, open yourself up to the changing mindset, and see if you can make it work for you, if only on a part time basis. If you are retired and want to continue working, readjust your thinking and see if with your lifetime of work experience you can offer something that others can’t. Don’t be constrained by your previous professional life; focus on the new reality and see how your unique skills can be utilized to increase your income and financial security.
Look around and see if there is a niche that you can develop and fill that will generate more income for you. Be prepared that you might well have to leave your comfort zone, but you will be the better for it. Your hard skills are those that define you as being skilled in your particular profession, but you may need to work on your soft skills – your interpersonal skills and your ability to market yourself. You might need to train in a certain field in order to realize an idea or project you want to develop. Open yourself up to that possibility and look ahead.
And finally, those who have assets – either from your savings or by virtue of being a beneficiary of funds – are somewhat justified in thinking that you “don’t want to work to make money”. However, you must ensure your assets are wisely invested as that will give you the ability to grow your savings. Buying a property as an investment is one way to make your money work for you, as in addition to the capital yield you also benefit from rent. But do your research first and study which areas offer the highest rental yield for the sum you plan to invest.
Investing in financial markets is another option. But you must ensure you have an investment plan that matches your risk profile and your long-term goals. Often investors can be too conservative and not invest in a way that will see long term growth or income generation. Ideally you want to create a system where the money is working for you, whether it’s through market-based investing, real estate or alternative investing. Just get started as time is really money when it comes to investing.
If coming up to the summer we tend to focus on how to educate our children so they have a productive summer, we should examine ourselves too. Take the opportunity to develop yourself and be better prepared for more and new challenges. Yes, we all probably do have to work to make money but with creative thinking we can also make our money work for us.
Is there a financial issue you would like us to cover? Email firstname.lastname@example.org with your suggestions.
Baruch Labinsky, author of ‘A Financial Guide to Aliyah and Life in Israel’ is the founder of Labinsky Financial, an investment management and financial planning firm located in Ramat Beit Shemesh. Licensed by the Israel Securities Authority as a portfolio manager, Baruch specializes in working with olim who are looking to successfully transition their finances to Israel. Baruch’s book ‘A Financial Guide to Aliyah and Life in Israel’ is available via Amazon and through Labinsky.com. Contact Baruch at Baruch@labinsky.com.