Not long ago, I wrote an overview of how to reach millionaire status. The nature of the process is simple: earn money, spend less than you earn, save and invest, and repeat the process.
The Million Dollar Question – How much extra money do you need to earn to become a millionaire?
Obviously, The more money you earn, the easier it is to become a millionaire, provided you spend less than you earn and are able to save and invest the difference. But how much do you need to earn?
As I mentioned in my previous article about how to become a millionaire, you don’t necessarily need to earn six figures to become a millionaire. A New Jersey man became a millionaire several times over and never earned more than $11/hr. He amassed his fortune and decided to donate over a million dollars to a local college. He made his millions through hard work, simple living, and wise investments including real estate and stocks.
While it is very difficult to become a millionaire on $11/hr, especially in today’s society, it is possible to become a millionaire on much less than a six-figure income. The important thing is to start young, live well within your means, make wise investment decisions, and repeat this process over many years.
If you want to speed up the process, you can do one of several things: earn more money, save more money, and receive better returns on your investments. In this article, we will share some ways to make extra money.
How to Make Extra Money
How much do you need to earn to become a millionaire?
Many people only think about earning money in terms of their day job – be it a salary or an hourly wage. For most people, this is probably the majority of their income. But there are many ways to earn extra money outside of your day job.
The best way to supercharge your income is to combine these strategies and increase your income from your day job and find additional ways to make extra money through part-time jobs, consulting, investments, and other opportunities. Here are some ways you can increase your income for your day job and outside your day job.
Increase Your Income from Your Day Job
Depending on your type of employment, earning more money from your day job may be as simple as working overtime or obtaining additional education or certifications to get a raise. It could be as simple as asking for a raise during your next performance review. Sometimes the best way to get a raise is to find a new job.
Unfortunately, it’s not always possible to earn more money from your day job. Some jobs, especially those in the government or public sector, are locked in to raises based on the cost of living or other factors. If you can’t easily earn more money from your day job, there are other ways to earn more money.
Earn Extra Money from a Business or Side Job
There are many ways to earn money through a small business or part-time or seasonal jobs. You can make money from your hobbies, start a candy vending machine business, do freelance consulting or writing, do seasonal yard work, hang Christmas lights on houses, write a book or an eBook, or do other odds and ends. A good friend of mine works in corporate taxes, but takes on extra work during the tax season filing personal taxes. A few hours a week at a high hourly rate adds up quickly!
I started a successful and profitable blog, which later turned into my full-time job. I have friends who started online stores. I know several people who have started dropshipping businesses, which is where you sell things through your own site, and another company fulfills the orders.
The possibilities are limited only to your creativity or abilities. They key here is the willingness to work outside of your day job and to dedicate the time and energy to get started. It can take time and effort to build a successful side hustle. But the sacrifice is worth it.
Here are some more ways to earn:
Invest for Cash Flow
Cash flow is one of the most underrated aspects of a strong financial plan. Cash flow is defined as how much free cash you have each month after you account for your income and expenses.
You can determine your cash flow with a cash flow chart to help you visualize your earnings.
Why is cash flow so important?
Because it doesn’t matter how much money you make if everything that comes in goes right back out. There are plenty of people earning a six-figure income who have very little to show for it except a stack of bills and a few nice toys. What you do with your money is much more important than how much you earn. Because of this, investing for cash flow should be part of every good financial plan.
Examples of investing for cash flow include investing in dividend stocks, rental income, operating a small business, buying a franchise, investing in peer to peer lending, and similar investments that make regular cash payments.
Related Post: How We Manage Our Money on a Daily Basis
Earn Money from Alternative Income Sources
Alternative income is loosely defined as income that doesn’t come from your day job.
Last year I made over $4,000 without working.
My main sources of alternative income were earned interest from savings accounts, dividend earnings from stocks and mutual funds, bank account sign up bonuses, credit card sign up bonuses, and other sources of free money.
These are all little things that anyone can do if they are willing to save and invest, or have decent credit and half an hour of time to set up an account online. Even though most online bank accounts have lower interest rates than a few years ago, I hope to improve on my $4,000 earnings from last year.
There are other forms of alternative income as well. Rental income, royalties, and patents, are just a few of many sources of income outside a traditional day job.
The key to financial health is spending less than you earn. But sometimes the better solution is to earn more than you spend. If you want to earn more money, go out and do it.