Your Money_ The Missing Manual - J. D. Roth [58]
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You may also want to read a book or two on the subject:
Pamela Slim's Escape from Cubicle Nation (Portfolio, 2009) gives advice about leaving a safe career to start your own business. Slim advocates a "life first, business second" philosophy: By setting clear, meaningful goals, you can develop a business that fits your lifestyle. (Slim has a blog at www.escapefromcubiclenation.com.)
In Career Renegade (Broadway, 2009), Jonathan Fields explains how to turn your passion into a business. He includes lots of stories about people who've made a great living doing what they love. (You can read more from Fields at www.careerrenegade.com.)
In Go It Alone (Harper, 2005), Bruce Judson argues that to succeed with a small business, you should focus on what you do best and automate or pay others to handle everything else. For example, if you're a good photographer, focus on taking great shots and hire someone to balance the books.
On The Money: Outearning Spending
"You can't outearn dumb spending," financial author Greg Karp likes to say. Some people believe they can always earn more money to maintain their lifestyles—but their spending usually grows to match their income. (For some examples, see the box on How Much Is Enough?.) And you never know when the economy is going to take an unexpected turn, making it hard to find a job.
When you earn more, resist the temptation to spend more. If your spending increases with your earnings, you'll get stuck on the hedonic treadmill (Caught Up in the Rat Race) and be at risk of a financial crisis if you lose your job. If, on the other hand, you keep your spending steady, you can use that increased cash flow to pay down debt or save for the future.
By spending smart (see Chapter 5), you can make the most of your income and enjoy life.
Money-Making Hobbies
Even if you're not interested in owning a business that you work at full time, a small-scale venture might be right for you. Why not build a business around one of your hobbies? You won't get rich by playing your violin at weddings or weaving baskets, but it never hurts to earn a little extra cash from things you'd do anyhow. This section suggests some key ways to make money from your hobbies.
Do what you love
Choose a hobby you enjoy, and then try to find a way to make money from it. Don't dive into a hobby simply because it might be profitable. You should do this thing because you love it; any income should be secondary. Keep it fun and it won't become a chore.
Example: I love to write. When I was struggling with debt, I read personal finance books, and then summarized what I'd learned on my website. Eventually, this grew into Get Rich Slowly. I've managed to make a career out of writing about personal finance, but I didn't start doing it for the money—I was passionate about the subject.
Be creative
If you don't know which hobby to pursue, think outside the box. What skills do you have that others don't? Define the term "hobby" broadly so you don't limit yourself. Find something that you can do that most others can't—and that people might be willing to pay for.
Example: One of my friends loves to travel, and he discovered that he can fund his adventures by writing about the places he visits. He makes money selling e-books, and gets paid to write for newspapers and magazines.
Don't expect too much
You probably won't get rich off your hobby. In fact, you likely won't even earn enough to quit your day job. But you might be able to earn enough to make the hobby self-sustaining, meaning you earn enough to cover the cost of new tools and equipment.
Example: My brother builds speakers and works with audio equipment for fun. He makes a little spending money doing speaker jobs for other people, but he's not interested in turning his hobby into a full-time