Earn Extra Money in Retirement or Quickly Boost Your Retirement Savings

elderly working at mcdonaldsIf the thought of working until you’re 70 or 75 isn’t appealing, how about doing more NOW so you can enjoy it later?

If you’re already in your 50s or 60s, you’ve probably got a wealth of skills and knowledge to capitalize on plus, your children don’t need 24 hour supervision so a second, part-time job, changing jobs or a side business are more doable.

Consider which of these options will work for you:

  1. Get out of your comfort job – look for a new employer who will pay more for your skill set.

It’s a well documented fact that changing employers, even in a lateral move, can increase your salary by 15, 20 even 25 percent or more.

If you have skills that can transfer to a variety of businesses (human resource management, finance, marketing), seek out employers in growing sectors. For example, if the oil business is a down cycle with prices and production falling, the car manufactures and sellers tend to benefit because drivers buy bigger more expensive and profitable vehicles.

The longer you’ve been with your current employer, the more underpaid you’re likely to be. Find out what you could be earning by browse sites like Payscale.com, Glassdoor.com, and Salary.com.

Shopping around while holding down a full-time job isn’t always easy but it’s a whole lot less stressful than job hunting when you really need a job. Make a list of requirements and of perks you’d like to acquire and be sure you brush up on your negotiation skills to get the most bang for your job change. When you get up-to-speed on social media and online networking in your field, you may find a great new job comes knocking at your in-box!

In addition, you may have a sizable 401k you can roll over into an IRA and reduce the fees you’re paying the custodian so you keep more of what you’ve already saved.

  1. Ask your current employer for a raise.

If you have an offer from your job search, or your research reveals that you’re severely underpaid, you may be able to leverage that into more money (as salary or deferred compensation) at your current employer.

You’ll want to prepare a convincing presentation based on your productivity and your market research. By boning up on your negotiating skills, you may be able to take home a bigger paycheck without making a drastic change.

  1. Add freelancing to your routine. 

Here’s another way to use your existing skills without changing your day job. Use your off hours to help other businesses or individuals (but avoid direct competitors of your employer) and increase your earnings.

Freelance opportunities, online and off, are almost endless. You can work through an established site like upwork.com (formerly odesk) or elance or directly with clients you find via networking online at sites like LinkedIn or in-person at industry events and associations.

Remember that you will receive a 1099 Misc. Income form and will be responsible for paying all the taxes including the employer portion of social security and medicare taxes. A  good rule-of-thumb is your freelance rates need to be at least 25% higher than your salaried rates to cover the taxes.

You’ll also want a simple contract to clarify what your duties are and how you’ll be paid.

  1. Start a side business. 

Are you free on the weekends or evenings?

  • If you like animals, start a pet sitting business.
  • If you prefer young children, start a nanny (babysitting) business.
  • Like to garden? Offer to design and set-up a backyard garden for your brown-thumbed neighbors!

These are just a couple possibilities. Almost any skill or aptitude you have developed over your lifetime can be parlayed into a small side business. 

  1. Teach what you know.

Do you have knowledge others will pay for? Quite probably. work-woman-tutoring

  • Maybe you’ve successfully obtained a certification or entry into a prestigious program.
  • Maybe you successfully negotiated a tricky personal or career transition.
  • Maybe you know how to teach people to trim a poodle. Or,
  • Maybe you are an expert at handmade arts?

These are all things others will pay you to show them how to do!

You can leverage your knowledge by becoming a coach, a tutor or by producing informational products (books, videos, courses) to sell. Sites such as Udemy, Linda.com and Skillshare host and sell hundreds of training programs for independent instructors. Publishing a Kindle ebook on Amazon is quick and almost free. 

You can also sell finished products without spending your weekends at craft fairs. Sites like Etsy.com and Amazon’s Craft Marketplace get your handmade items in front of a worldwide audience at reasonable cost.

  1. Become part of the Gig economy.

If you’ve got more time, you can set yourself up to lead tours of local tourist attractions, or become a driver for hire via Uber or Lyft.

You can do seasonal work at businesses that experience big surges during certain times of year (i.e. the end-of-year holidays for retailers and etailers), do household chores through sites like taskrabbit.com or run your own classified ads on Craigslist.

Do you know how to cook? Start a personal chef business or do the cooking for working families via www.kitchensurfing.com.

There must be something in this list that could help you increase your income to supplement your retirement accounts. Give one or two a try and see how much extra you can add to your savings now so you can enjoy your golden years even more later. 

Live long and prosper, Leah the MoneyDiva.com

Crowdfunding – A Modern Day Investment Scam?

Crowdfunding has exploded onto the financial scene. Since the “qualified investor” requirement for funding small businesses was modified in 2013 we are all allowed (or pretend) to become venture capitalist or angel investors via crowdfunding.

crowdfunding names

It’s easy to find lists of over 100 sites that crowdfund everything from cutting edge new businesses to credit card refinancing.

I periodically end up on one or two of the crowdfunding sites. Checking out a friend’s GoFundMe campaign or funding the initial building of a revolutionary standing desk for grade schoolers are a couple I’ve visited recently. I also participate as a lender at Lending Club and by adding my two cents to the occasional political fundraiser I believe in.

But, I’m always careful to delay making any financial commitments until further research – both of the site and the offer – can be completed. That’s because crowdfunding is a scam artist’s newest way to separate a fool and his money. Even well established sites like Kickstarter, Indigogo and GoFundMe can unknowingly host scammers.

They even tell you so, as Kickstarter clearly states on its website:

“Kickstarter does not guarantee projects or investigate a creator’s ability to complete their project. On Kickstarter, backers (you!) ultimately decide the validity and worthiness of a project by whether they decide to fund it.”

So, why not join the party (as a lender or funder)? IF you use discretionary spending money and don’t think of it as a traditional investment; well, go for it. But use some common sense. crowdfunding piggybank

Apply these criteria when considering a crowdfunding opportunity:

You can’t expect the crowdfunding platforms to protect your “investment”

As we noted above, the platforms that make money from connecting start-up businesses, proposed books and software applications. They explicitly state they cannot be relied on to protect you from fraudulent offers or funders who fail to deliver on their promises.

They TRY, because their reputations are tarnished by fraud and failures but they come with NO guarantees.

In most cases, it’s a donation – NOT an investment.

Unless you are offered an ownership interest, don’t expect a return outside the “gift” in the listing. Peer-to-Peer lending is an exception. You act as a lender, not as a donor, and your losses (defaulted loans) offset earnings.

Also, almost none of the businesses looking for crowdfunding are legal non-profits so you won’t be getting a tax deduction either. But, if you believe in the cause or product, and your donation helps bring it to market, you can pat yourself on the back!

Many crowdfunding campaigns fail – and that doesn’t guarantee the donors will get their money back.

This policy varies by platform. Kickstarter refunds the money, Indigogo doesn’t. So, read the fine print for both the campaign and the platform before you give.

Vendors often over promise (and under deliver). A few are outright scams.

A guy gets an idea, his buddies tell him it’s great, and he decides to get crowdfunding and make it into a business – what could possibly go wrong??

You must do some due diligence (investigation). Click here for a good article from CrowdCrux.com on how to look into a campaign to see if it’s A) legit and B) worth your money.

One way is to use social media to leverage other people’s knowledge via a platform like Reddit (here’s the Kickstarter subreddit link).

And, I’ll echo the CrowdCrux.com the call to report scams. It’s a quick way to shut down scammers and clean up the crowdfunding space (and makes you a good web citizen). The list of scam reporting sites includes:

It sounds scary but I find spending a little time perusing (and donating a few dollars) inspiring. Seeing all the great ideas for products that can improve our lives gives me a little lift! Just don’t bet your lifesavings (or the rent money) on any one of them changing the world!

Live long and prosper, Leah the MoneyDiva.com

Is Pet Insurance a Good Investment?

money questionsRecently, during a Q&A, an audience member asked this question. Now, I’m a bit of a skeptic about a lot of financial products – insurance being a big one – so my standard answer is probably not.

After-all, there’s a reason most of us run the other direction when we meet an insurance agent at a party! But, to be fair, I went and did some more research on insurance and pet insurance particularly, and here’s a more detailed answer.

Risk – of almost any kind – make most humans crazy.

The entire insurance industry, from asset protection (property and casualty), income (life and annuities) to cost containment (health, travel and pet) sucks over four hundred twenty one BILLION dollars (2.5% of GDP) from the US economy annually.

They’d like you to think they have your best interests at heart but many of the products they sell you have an obscenely high profit margin.

According to the Insurance Information Institute:

  • There were 6,086 insurance companies in 2013, including P/C (2,623 companies), life/annuities (904), health (835), fraternal (87), title (58), risk retention groups (256) and other companies (1,323), according to the National Association of Insurance Commissioners.
  • Insurance carriers and related activities accounted for $421.4 billion, or 2.5 percent of U.S. gross domestic product in 2013, according to the U.S. Bureau of Economic Analysis.
  • The U.S. insurance industry employed 2.5 million people in 2014, according to the U.S. Department of Labor. Of those, 1.5 million worked for insurance companies, including life, health and medical insurers (838,200 workers), P/C insurers (596,000 workers) and reinsurers (25,200 workers). The remaining 1 million people worked for insurance agencies, brokers and other insurance-related enterprises.

And, for the 2014 year the III reports:

“an underwriting profit of $12.3 billion (compared to $15.2 billion in 2013). The industry’s overall net income after taxes (profits) for the year tallied $55.5 billion (though down from $63.4 billion a year earlier)… Overall industry capacity rose to a record $674.7 billion as of December 31, 2014—up $21.3 billion, or 3.2 percent, from $653.4 billion as of year-end 2013.”  

But, today’s question is: Does pet health and accident insurance protect you from a real risk or is it another profit center for the insurance issuers?

Let’s start with some numbers –

Pet Number US House-

holds with Pets

Number of Pets in

US Households

Bird        6.9M        20.6M
Cat      45.3M         95.6M
Dog      56.7M         83.3M
Horse        2.8M           8.3M
Freshwater fish      14.3M       145.0M
Saltwater fish        1.8M         13.6M
Reptile        5.6M         11.5M
Small animal        6.9M         18.1M
*Source: http://www.iii.org/fact-statistic/pet-statistics Dog ill pet insurance
American Pet Products Association’s 2013-2014 National Pet Owners Survey.

If you’re (like me), one of the 56 million plus dog owning or 45 million plus cat owners in the United States, you probably know that an unexpected injury or illness of your furry friend can bust your budget.

Veterinarians now treat household animals for cancer, heart disease and other chronic illnesses plus fit them with artificial limbs and do complicated reconstructive surgeries on injuries that would have sent previous generations of pets off to the Rainbow Bridge.

Pets are big business in the USA – everything from food and clothing (yeap, my pit bull Indo needs a sweater in the winter) to special medications cost us about $55.5 BILLION in 2013*.

None-the-less, the American Veterinary Medical Association reports that in 2012 we spent an average of $227 per dog and only $90 per cat on routine vet bills and about $600 on dog surgeries, a bit under $400 for cats. So, it would seem that pet health and accident insurance is not something the average pet owner needs.

Two types of pet owners might be better off covering the risk:

  • Those who are unable to save an emergency fund to cover unexpected bills and
  • Those who are so emotionally attached to their furry family member that they’ll spend “whatever-it-takes” to prolong their lives.

Typical pet insurance runs $25 – 30 a month or $300 – 360 per year. Older or already ill pets will cost more. Over a typical 10 – 15 year lifetime that adds up to about $5,000.

Most policies don’t cover routine vet visits, just accidents and certain illnesses. If you do decide to purchase pet insurance, look carefully at the deductibles, exclusions (pre-existing conditions) and policy limits; be sure your vet accepts the insurance and compare prices. It’s likely you’ll still pay a portion of the additional expenses plus the insurance.

So, I suggest it’s better to save $5,000 as a pet fund unless you fit into one of two types above (and if you’re the non-saver, I suggest learning to save, instead!). Most pet owners will never spend that much in vet bills and in general, it’s unwise to purchase insurance to cover relatively small risks of any kind.

Final Answer: NO.

Skip the insurance and create a pet emergency savings account!

Live long and prosper, Leah the MoneyDiva.com

Why You Need to Know How to “Talk Money”

Learn financial termsYeah, we keep harping on it – the need for everybody (especially women) to be financially literate.

NOT knowing the meaning of financial terms, and how the system works can, in the words of John Lanchester whose 2013 book is titled How to Speak Money, says in this 2014 New Yorker article, WILL hurt you financially.

“…when the finance industry says ‘credit’, what it really means is ‘debt’. If you don’t know that, you are likely to get into trouble.”

He goes on to give us really good, readable and interesting explanation of why in the rest of article.

The world is full of priesthoods. On the one hand, there are the calculations that the pros make in private; on the other, elaborate ritual and language, designed to bamboozle and mystify and intimidate.

Lewis book Big ShortThe latest episode (the 2008/09 crash) had even many so-called-experts fooled. If you haven’t read the Michael Lewis book The Big Short about the mortgage mess, the movie (staring Brad Pitt) is coming soon and I recommend it.

Reading this Money Talks article will give you a good basis for understanding Lewis’ book. As Lanchester explains:

During the recent credit crunch, many suspected that the terms for the products involved were deliberately obscure: it was hard to take in the fact that C.D.S.s were on the verge of bringing down the entire global financial system when you’d never even heard of them until about two minutes before.

BTW, reading Lewis’ latest book Flash Boys… Lewis book Flash Boyswill clue you into the current financial center scam!

While I certainly don’t recommend anyone spend time watching daily financial media like CNBC or Bloomberg TV, understanding how the financial sector functions is a critical part of building wealth in the 21st century.


Live long and prosper, Leah the MoneyDiva.com