Creating Your Own Blog
17 years ago
If today's economy has left you in need of more cash, consider this emerging trend: Millions are using the Internet -- and a minimal amount of time -- to bring home extra bacon. Whether delving into e-commerce or selling ad space on a blog, Internet sellers often benefit from a rock-bottom initial investment, the convenience of working wherever and whenever they please, and the freedom of being their own boss. However, before you quit your day job, it's important to consider the potential pitfalls of selling on the Internet. These include startup time, extenuating costs and stiff competition. "There are a lot of people trying to do the same thing," says Robert Spector, author of the book "Amazon.com: Get Big Fast," a book covering the history and development of the Web giant. "What's going to differentiate the book I get from you versus the book I get from your competitor?" Following are four ideas for turning the Internet into your own personal cash cow, and suggestions for staying ahead of the competition. Making cash online :-
Looking for extra cash to keep your household afloat in this storm-tossed economy? Maybe it's time to turn your hobby into a business. Whether you wade in part-time or dive in full-time, there are several advantages to launching your hobby as a business. For starters, you already enjoy it. You also have the knowledge base and skill set upon which to build, and may have a network of fellow enthusiasts to help get you started. It's likely that you also have a sense for pricing and market dynamics surrounding your hobby. Finding the time and space to create a new business can be challenging, especially if you're working another job as well. But with a few simple marketing moves and the help of a willing mentor or two, you can turn your pastime into cash time in no time. "Your hobby has to translate into a product or service for which there is an identifiable market," says Barbara Brabec, author of "Handmade for Profit" and a 25-year veteran of the arts and crafts world. "You may love the product you make, but the bottom line is, will anyone actually buy it?" Brabec says the biggest fear for most hobbyists is ... well, fear itself. "Everybody is scared because they're stepping outside their comfort zone. The only way you can get past this is with some experience and doing it more than once," she says. "You have to be able to take some rejection. It's not rejection against you personally; it's the product or service you're offering. It's not you that's being judged." Ready to take the plunge? Here are six lucrative hobbies you can start from home today. Custom bakingA few years ago, 27-year-old Katie Schwarz, a special education teacher in Austin, Texas, took a cake-decorating class and fell in love with it. Soon, she was decorating cakes and treats for children's birthday parties. In 2007, inspired by the trendy treat of choice in New York City, she started Let Them Eat Cupcakes, a Web and phone-order home business. Let Them Eat Cupcakes specializes in custom-decorated cupcakes in more than a dozen flavors, including margarita and s'mores. The cupcakes are delivered directly to the customers' doors.
A hodgepodge collection of efforts has put us all on the hook for piles of money, and what do we have to show for it? A still-terrible market and a recession.
Unfortunately, despite some 12 financing facilities created by the Treasury and the Fed, massive interest rate cuts and various bailouts, the government has little to show for its attempts to dictate where markets should trade.
The Fed's own balance sheet has exploded from roughly $900 billion worth of debt in August to around $2 trillion as of last week. Knowledgeable sources expect that to reach $3 trillion by the end of the year.
That means that it will have grown from approximately 6% of gross domestic product to more than 20% in the space of four months. (For perspective, Japan's balance sheet grew from roughly 9% of GDP to 29% over the 10-year period from 1994 to 2004, as it pursued "quantitative easing," which basically involves the central bank making more cash available to banks to ease lending.)
· Talk back: Your views on $2 trillion national debt?
These numbers and rates of growth are so enormous (and unprecedented) as to be utterly incomprehensible. Does anybody actually think the government has any idea what it's doing?
I think it's certainly dawning on folks that when the government "does something," it often creates more problems than it solves. In this case, as it props up poorly managed companies, it may only be allowing them to rain further havoc on the better ones in their industry. American International Group (AIG, news, msgs) is an example of this, and I'm sure many other financial entities will turn out to be as well. (As an aside, notice all the idiotic executives, across a wide range of industries, who have bought back hundreds of billions of dollars' worth of shares at stupid prices -- a classic example of blowing up their businesses in an attempt to manage the stock price.)
Parched for work in arid times
Though the government hasn't admitted it yet, we are in a recession, and in this particular instance, it seems to me that creating jobs will be an unusually severe problem. That's because the economic expansion we saw from 2002 to 2007 was essentially just a function of speculation (as I have stated often -- and I explain in my book "Greenspan's Bubbles"). I just cannot stop worrying about where the jobs are going to come from prospectively.
When I wrote that book, I pretty much exorcised my own demons regarding my revulsion and anger at the policies of former chief Alan Greenspan and his Federal Reserve. Recently, though, I couldn't help but think how much better off everyone would be had the United States used the time after the equity bubble and the 9/11 attacks to pursue sound policies, as well as encourage folks to save money and prepare themselves for the demographic challenge of Social Security and rising health care costs.
Instead, Greenspan created a multiple-GDP-sized housing bubble, during which folks took on huge amounts of debt instead of actually saving money. It was only ridiculous financing (which has since imploded the banking system) that allowed so many folks to pay absurd prices for houses -- and take money out of them at the same time via home-equity loans.
Of course, one of the most misguided government ideas was trying to prop up home prices. (Secretary Hank Paulson essentially conceded as much last Wednesday when he announced that the Treasury Department was abandoning its plan to purchase troubled mortgage assets.)
House prices need to come down to where folks can afford them. And prices may have to fall even further than we might have thought in the first place, because there's going to be high level unemployment and probably not a lot of wage growth.
This is going to be a very unpleasant period, I'm sorry to say. The outcome we are witnessing is exactly why, during both the stock mania and the housing mania, I was so vociferous in my criticism of Greenspan. He is the one man who continually meddled with the market and continually advocated that folks behave in an irresponsible way.
I find it outrageous that this buffoon is still making speeches (and commanding huge fees) when the entire country, and perhaps the world, is paying for his crimes against finance.
At the time of publication, Bill Fleckenstein did not own or control shares of any company mentioned in this column.
twelve ways your home can be a cash cow
With home studios, room rentals, pet care and 9 other kinds of enterprises, you can make money from home while cutting your taxes. How about turning your house into a movie set?
Want to earn some extra cash? Turn your home into a moneymaking machine.
If you're like most people, you've never made a dime off your dwelling (aside from appreciation), even though your house and yard likely represent your largest asset.
What's up with that? You've got tons of extra space in that spare bedroom, garage or basement that you're already heating, cooling and paying taxes on. And don't forget the idle front and back yards.
Why not make the old homestead earn its keep?
"There's something very positive to be said for becoming self-sufficient through assets you already own," says Katina Z. Jones, the author of "The 200 Best Home Businesses." "With gas prices being what they are these days, there's a huge financial advantage to keeping your overhead low with a home-based source of income. The tax deductions associated with operating a business from home help on the back end as well."
Barbara Brabec, the author of "Handmade for Profit!," agrees. She says: "Every dollar you can cut in expenses is a dollar you don't have to bring in. The need for extra income right now is so severe."
Of course, local ordinances and homeowners association rules may prohibit or restrict your moneymaking plans. Always check first with local authorities, and be sure to ask about licenses, fees and other requirements. And whatever you do, don't forget to report your earnings on your income-tax return.
Disclaimers aside, you're sitting on a gold mine, friend. What are you waiting for?
Here are 12 ways to get your home a part-time job:
Attract a crowd with yard sales
Yard sales have one built-in advantage over garage sales or indoor sales: curb appeal.
"One crafter who had steady traffic in front of her house decided one day to put several items out in her front yard," Brabec says. "She had a big shade tree and made it very festive with an umbrella and a couple of eye-catching items, and she sold up a storm that day. She didn't have to advertise or anything."
In addition to gently used clothing and household items, consider selling homemade jams, jellies, cakes and breads, but only where local and state laws allow it. Also be aware of local zoning and homeowners association restrictions pertaining to yard and garage sales.
No product? No problem. Rent out your attractive front yard to apartment dwellers or other yardless folks looking to clean out their storage units. Craigslist is a great place to advertise your own sale or to farm out your yard to someone else who wants to sell.
Fire up a bakery or production kitchen
Do you have an unused mother-in-law apartment or an industrial-size kitchen that sits vacant all day? Rent it out as a food-production facility.
Custom cookies and cupcakes, delivered gourmet meals and birthday-party catering are popular services that don't require a storefront but may need additional ovens and kitchen space.
"Food-oriented businesses tend to be very successful," Jones says.
Make room for renters
Renting that spare bedroom or mother-in-law apartment to a college student or a quiet single can be a great way to turn empty space into cash, as long as local ordinances permit it.
For homeowners with the skills, taking in elderly roomers on a room-and-board basis can generate even more income.
"For someone who is a retired nurse or who has experience in geriatric care, this could be a good option," Brabec says. "You don't want just anybody taking care of your mother, but this could work for a nutritionist or somebody with experience in the field."
With home studios, room rentals, pet care and 9 other kinds of enterprises, you can make money from home while cutting your taxes. How about turning your house into a movie set?
Want to earn some extra cash? Turn your home into a moneymaking machine.
If you're like most people, you've never made a dime off your dwelling (aside from appreciation), even though your house and yard likely represent your largest asset.
What's up with that? You've got tons of extra space in that spare bedroom, garage or basement that you're already heating, cooling and paying taxes on. And don't forget the idle front and back yards.
Why not make the old homestead earn its keep?
"There's something very positive to be said for becoming self-sufficient through assets you already own," says Katina Z. Jones, the author of "The 200 Best Home Businesses." "With gas prices being what they are these days, there's a huge financial advantage to keeping your overhead low with a home-based source of income. The tax deductions associated with operating a business from home help on the back end as well."
Barbara Brabec, the author of "Handmade for Profit!," agrees. She says: "Every dollar you can cut in expenses is a dollar you don't have to bring in. The need for extra income right now is so severe."
Of course, local ordinances and homeowners association rules may prohibit or restrict your moneymaking plans. Always check first with local authorities, and be sure to ask about licenses, fees and other requirements. And whatever you do, don't forget to report your earnings on your income-tax return.
Disclaimers aside, you're sitting on a gold mine, friend. What are you waiting for?
Here are 12 ways to get your home a part-time job:
Attract a crowd with yard sales
Yard sales have one built-in advantage over garage sales or indoor sales: curb appeal.
"One crafter who had steady traffic in front of her house decided one day to put several items out in her front yard," Brabec says. "She had a big shade tree and made it very festive with an umbrella and a couple of eye-catching items, and she sold up a storm that day. She didn't have to advertise or anything."
In addition to gently used clothing and household items, consider selling homemade jams, jellies, cakes and breads, but only where local and state laws allow it. Also be aware of local zoning and homeowners association restrictions pertaining to yard and garage sales.
No product? No problem. Rent out your attractive front yard to apartment dwellers or other yardless folks looking to clean out their storage units. Craigslist is a great place to advertise your own sale or to farm out your yard to someone else who wants to sell.
Fire up a bakery or production kitchen
Do you have an unused mother-in-law apartment or an industrial-size kitchen that sits vacant all day? Rent it out as a food-production facility.
Custom cookies and cupcakes, delivered gourmet meals and birthday-party catering are popular services that don't require a storefront but may need additional ovens and kitchen space.
"Food-oriented businesses tend to be very successful," Jones says.
Make room for renters
Renting that spare bedroom or mother-in-law apartment to a college student or a quiet single can be a great way to turn empty space into cash, as long as local ordinances permit it.
For homeowners with the skills, taking in elderly roomers on a room-and-board basis can generate even more income.
"For someone who is a retired nurse or who has experience in geriatric care, this could be a good option," Brabec says. "You don't want just anybody taking care of your mother, but this could work for a nutritionist or somebody with experience in the field."
now almost universally know as "blogs" -- were once the sardonic voice of dissent on the Web. Now, everyone seems to have a space on the Internet where they offer opinions or other reflections.
If your blog captures the imagination of the public, you could earn money while you entertain.
Eden Kennedy of Santa Barbara, Calif., started Fussy.org when her son was 3 months old. She's been blogging about parenting, marriage and the hilarity of daily life for almost seven years.
Kennedy says she built a readership by reading, commenting on and showing interest in the blogs of others.
Eventually, Kennedy had enough of a following to sell advertising space on her blog.
She works with several different advertising networks, each of which compensates her with anywhere from $100 per month to several hundred dollars per month.
One day, Kennedy had another flash of entrepreneurial insight: She decided to sell T-shirts to her readers.
She had shirts printed up with the phrase "Writing well is the best revenge" and watched the orders roll in.
"Just that phrase, it hits people pretty well," Kennedy says. "Actually, a lot of academics buy the T-shirt."
Kennedy now earns roughly $200 a month selling T-shirts. That income is in addition to the advertising dollars she rakes in.
Kennedy says her online pursuits have been more fruitful and less time-consuming than her former "real world" job working in a bookstore.
"Usually a post, no matter how long it is, takes me about an hour to write, and lately I haven't been updating more than twice a week," says Kennedy, who adds that designing her blog and dealing with advertisers takes an additional five hours per week.
If your blog captures the imagination of the public, you could earn money while you entertain.
Eden Kennedy of Santa Barbara, Calif., started Fussy.org when her son was 3 months old. She's been blogging about parenting, marriage and the hilarity of daily life for almost seven years.
Kennedy says she built a readership by reading, commenting on and showing interest in the blogs of others.
Eventually, Kennedy had enough of a following to sell advertising space on her blog.
She works with several different advertising networks, each of which compensates her with anywhere from $100 per month to several hundred dollars per month.
One day, Kennedy had another flash of entrepreneurial insight: She decided to sell T-shirts to her readers.
She had shirts printed up with the phrase "Writing well is the best revenge" and watched the orders roll in.
"Just that phrase, it hits people pretty well," Kennedy says. "Actually, a lot of academics buy the T-shirt."
Kennedy now earns roughly $200 a month selling T-shirts. That income is in addition to the advertising dollars she rakes in.
Kennedy says her online pursuits have been more fruitful and less time-consuming than her former "real world" job working in a bookstore.
"Usually a post, no matter how long it is, takes me about an hour to write, and lately I haven't been updating more than twice a week," says Kennedy, who adds that designing her blog and dealing with advertisers takes an additional five hours per week.
Amazon.com and eBay revolutionized e-commerce in the 1990s. Since then, countless individuals have made money selling books, movies, clothes and every other commodity under the sun.
E-commerce is becoming easier than ever, and the complications of arranging payment over the Internet are disappearing fast, Spector says.
"A lot of the uncertainty is taken out of the equation thanks to the technology," he says. "You're going to get paid before you send out the product."
Spector says sites like Amazon can help small-volume sellers reach a wider audience.
"(Amazon) makes it easier and more beneficial for small book collectors who obviously have either rare or out-of-print books to do business ... it's worth it for them to give Amazon a little piece of that business in order to be in a very high-profile space," he says.
Mick McClain has been selling music on the Internet for nine years. He sells everything from rare and out-of-print compact discs to new releases and used albums.
McClain uses eBay and Amazon.com to market his products. He also operates a Web site where potential customers can peruse his collection.
The San Diego resident says his startup costs were minimal. He had to spend to buy a "little bit better computer" and to build up his inventory, 90 percent of which comes from brick-and-mortar stores.
For newcomers to e-commerce, McClain recommends sticking to something you know.
"Your mind has to be a database," he says. "That's why I have never gotten into anything other than music because I would get eaten alive by the people who were the authorities on (other products)."
Spector offers two tips to aspiring e-merchants.
"First of all, have a unique product," he says. "There needs to be something separating you from your competitors."
Spector's second tip is to make sure you can deliver on your product promises.
"Live up to what you promise," he says. "If you promise a book ... in a particular condition, at a particular price, and guarantee it to arrive on a particular day, then do that."
hobbiesCrafters, photographers and artists also are tapping into the Web's potential as a marketplace for their goods.
Notley Hawkins, a fine art photographer from Columbia, Mo., started selling online by uploading his photographs onto Flickr, a popular digital photograph storage Web site.
Flickr subsequently partnered with Imagekind, a Web site that specializes in selling fine art prints. Since then, Hawkins has sold about 50 of his prints through Imagekind.
Hawkins has found that having a Web site and selling photos online helped to enhance his reputation offline. He says his online presence helped him gain credibility with area travel magazines, for which he does freelance work.
"It's helped my career in many ways," Hawkins says of Imagekind. "It's helped me make some money, which is very important."
Hawkins urges budding photographers to start gradually by posting their photos to a site like Flickr.
"Try to establish a reputation online by publishing online," he says.
In the crafting world, Web sites such as Etsy offer merchants of handmade goods a way to expand their customer base while conveniently selling their products. Sellers who use Etsy can use the service to take payments via PayPal or money orders.
Other craft-selling Web sites include FreeCraftFair.com and Handmade Catalog.
Adam Brown, spokesman for Etsy, says handmade jewelry and craft-making supplies are two of the site's most popular categories.
To make money online, Brown says sellers must pay particular attention to posting good photos of their products and writing eye-catching descriptions. These skills are important, since the Web page has to substitute for a tangible product.
Brown also recommends the age-old suggestion of good customer service.
"When people contact you, you should always respond quickly," he says.
He says other smart marketing moves -- such as throwing in freebie extras when a customer orders something -- can build customer loyalty.
"Adding a personal touch really helps," he says.
4 - Contributing to a Web siteAll over the Web, passionate fans are providing their expertise in music, movies and sports to niche Web sites. Many are earning sizable amounts of cash for doing things they love.
Brian Swaw of Chicago hires seven staff writers for his content fantasy football Web site, GameTimeDecisions.net.
Swaw's writers get paid roughly $100 per month, and in return each writes one to two articles about football players and fantasy draft picks every week.
Want to pen about your passion for a Web site? Swaw recommends volunteering to start.
"That's how I did (it)," he says. "There's a ton of sports Web sites out there that are looking for volunteers and it's a good way to get your name out there."
On the Internet, there are sites indulging just about every hobby, so opportunities abound.
EHow is an informational Web site where you can get paid writing how-to instructions on just about anything.
If you're into video games, you might try GameZone and GameFAQs. For movie reviews, check out Badmovies.org and the All Movie Guide.
If you have a green thumb or a sweet tooth, try gardening sites (such as The Growing Edge) or cooking sites (such as Cooking For Engineers) that pay small wages to contributors.
Music geeks should try the All Music Guide, a popular music review site that pays its contributors. Music Emissions is an alternative music Web site that accepts reviews from all members and will promote you to their editorial team if they like your stuff.
Finally, most major cities have a slew of entertainment Web sites, some of which pay reviewers. CenterstageChicago.com, for instance, proffers clear and simple instructions on how to contribute to the site and get paid.
Check your city's entertainment Web sites, and don't be discouraged if there aren't instructions for reviewers -- try e-mailing the editor.
All that glitters ... Sellers, writers and others who are clever and persistent often make a profit through their online activities. However, not everybody makes money, and there are many potential obstacles to success.
Some ventures, such as craft sales and blogs, can take a long time to get started. You may find yourself investing a lot of time and effort -- and even some money -- before you begin to see a return.
Brown says it's all too easy for craft sellers to take dismal sales personally and start doubting the quality of their artistry.
"People tend to get discouraged very easily," he says.
Another downside of e-commerce is that Web sites often charge fees to sellers.
For example, while eBay and Amazon.com offer a window into a world marketplace, some say there's a steep price for prime access.
"When I first started selling on eBay, the fees were very low," McClain says. "As with anything else, when a corporation smells blood in the water, they put out more chum and the fees go up dramatically."
McClain says he also has noticed increased postage prices for mailing packages to customers.
In addition to rising rates, e-venders must also contend with the stiff competition that manifests itself in a massive online market.
"The inherent problem is (that) everybody that you're competing with is selling at the same place," says McClain. "When you're selling on the Internet, you're competing with every single person that has the same product line and interest in the world."
In addition, some people find it difficult to find an outlet for their interests that will also generate revenues.
Freelance music writer Philip Sherburne said he has a hard time getting paid to write about the music he likes.
"I'd say the biggest struggle is simply finding outlets that share my musical interests, since I've always specialized in electronic and experimental music," says Sherburne, an American expatriate now living in Spain.
Pop and indie rock are music genres with a broader online following than electronic and experimental music. However, those types of music don't interest Sherburne as much.
"I'm rapidly losing any kind of grounding in the worlds of pop or indie rock," Sherburne says.
Despite such challenges, determined sellers continue to find success. If you're interested in making money on the Internet, a little perseverance and luck will go a long way.
"If you go on our blog there's a 'quit your day job' series; we actually have people who have really awesome stuff and they ... quit their day job," Brown says. "Now, they support themselves by what they make."
A number of the people profiled in "Millionaires tell how they did it" made their millions as entrepreneurs. But working for the Man doesn't mean you have to be a wage slave or resort to buying lottery tickets to strike it rich. The trick is to maximize your income on the job (and know when to move on), make the most of your employee benefits and tax breaks and use that extra money to start investing. 1. Keep your eyes peeled for better ways to do your job. Streamline a procedure, shave costs, create a new profit center, become an expert on a specific topic, volunteer for a company committee -- anything that will make you stand out as a prime candidate for a promotion or a pay boost.
2. Don't be afraid to negotiate. In a study of master's degree graduates from her university, Carnegie Mellon economics professor Linda Babcock found that those who negotiated their first salary boosted their pay by 7.4% compared with those who didn't bargain.
3. Get your ducks in a row and your numbers on paper. If possible, quantify how much your efforts add to the company's bottom line. If that's not feasible, spotlight your value with comparable salaries for workers in your position from a Web site, such as Salary.com, or from a professional association. · Talk back: Do you hope to be a millionaire?
4. Plot your strategy when it's time to move on. Create a professional-looking page on MySpace that tells prospective employers why you're an exceptional candidate, recommends John Challenger of the outplacement firm Challenger, Gray & Christmas. And don't neglect more conventional networking: Join a professional association or show up at school reunions toting business cards. Milk your benefits
5. Contribute as much as you can to your 401(k) and other tax-deferred retirement plans. You'll not only build a bigger nest egg, but you'll also cut your tax bill. In the 25% federal tax bracket, every $1,000 you contribute to a 401(k) trims your taxes by $250. And you'll save on state income taxes, too.
6. Flex your tax-saving muscle. Contribute pretax dollars to a flexible spending account to pay for dependent care or out-of-pocket medical expenses. If you set aside $1,500 per year and you're in the 25% bracket, avoiding federal income and Social Security taxes means Uncle Sam will subsidize almost $500 of your expenses. 7. Review your tax withholding. If you're expecting a refund this spring, you're having too much tax withheld from your paycheck -- and making an interest-free loan to Uncle Sam. That's no way to become a millionaire. Put more money in your pocket by using Kiplinger's withholding calculator and then filling out a new Form W-4.
8. Stash savings in a Roth IRA if you're eligible. Withdrawals in retirement, including decades of compounded earnings, will be tax-free. This year, income-eligibility limits for a Roth increase to $114,000 for individuals and $166,000 for married couples. Invest like crazy
9. Don't delay. The quicker you get a jump on putting money aside, the easier it will be to stuff a seven-figure cushion. If you start at age 25, for example, investing $286 per month will get you $1 million by age 65, assuming you earn 8% annually.
10. Invest automatically, either through your employer's retirement plan or by setting up a regular deposit to a mutual fund or broker. You'll never miss the money, and you'll avoid two big mistakes: buying too much when stock prices are high and not buying at all when prices fall.
11. Watch for fund fees. The more you pay, the tougher it is to earn an above-average return. The typical hedge fund, for example, takes 20% of any gains, a huge hurdle to overcome. A better bet: no-load mutual funds with expense ratios of 1% or less. If you trade individual stocks, watch those commissions.
12. Keep it simple. Be wary of get-rich-quick schemes or sales pitches for complex investments, such as oil-and-gas partnerships, that trade on the millionaire cachet to lure investors into buying high-fee products they don't understand. Most millionaire households accumulate their wealth over the long term by sticking to a regular investing plan in a balanced portfolio.
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