Who says side income has to be hard work?
Everyone needs side income these days. Thanks to inflation and the rapidly rising cost of living, one income is too close to having none. Many people work two or even three part-time jobs if they don’t have a solid main source of income. Wealth “gurus” will sell you all sorts of complicated programs guaranteed to make you rich.
The effect of all this is PRESSURE. Pressure to make more. It can all seem complicated, difficult, and time-consuming. Luckily, there are some very simple, stupidly easy (and lazy) ways to supplement your income. Every little bit helps, even if it’s just a few dollars. Here some methods I use.
1. High Interest Savings Accounts
This one may seem obvious, but you’d be really surprised how few people take advantage of this. Even though the Federal Reserve just recently lowered rates by half a point, there are still opportunities to earn decent yields. Just go to an aggregate site like Bankrate and look under their high yield savings account section. As of now, October 2024, you can still find savings accounts with reputable FDIC-insured banks offering 4.00% to as high as 5.30% APY. Some banks even offer decent savings rates in their checking accounts, though this is not often.
Another key to taking advantage of this is to have multiple savings accounts. I do this with bank accounts in the interests of safety and diversification, should one of my accounts become compromised or I lose a debit card. But it’s also good to have at least one seperate account that you can transfer money to. This can even motivate you to save money, because you wont see it everyday in your regular bank. “Out of sight, out of mind,” as they say.
Right now, between all my accounts, I earn over $50 a month from interest. I expect to make at least $600 this year.
2. Credit Card Reward Points
This will bother the Dave Ramsey fanatics, I know. The money management radio host is famous for his devout stance against credit cards no matter what. I used to think the same way. But if you’re disciplined, and you use them for things you would be spending money on anyway, then there’s no reason not to take advantage of their cash back rewards.
My one card pays 1.5% cash back. I have a number of bills that automatically deduct from that card every month, that add up to anywhere between $300-$500. This means at the end of the month I can apply $5–$8 to my bill. I always pay my bill in full. I’m a proud “deadbeat,” as the credit card companies refer to those who never maintain a revolving balance. Even though $8 may not seem like a lot, that’s basically a free $96 or more every year, that you can make without having to really think about it. Put another way, if you saw $96 lying on the sidewalk, would you not bend down to pick it up? Of course you would.
Cash back can also help when you have a big purchase. If you were to spend $1,000 on something like a new computer, that would translate to a $15 “discount” due to the cash back feature. Some credit cards even offer higher cash back rewards with certain companies.
Again, the key here is to buy things you would anyway. Don’t just buy something to “get a discount.” That’s what gets people in trouble, and why Dave Ramsey is mostly right about avoiding credit cards altogether. But if you’re savvy and disciplined enough, there’s no reason not to look for ways to save even just a few dollars.
3. Dividends On ETFs/Index Fund Stocks
This one requires some clarification. I don’t personally buy dividend stocks. I stick to low-cost ETFs that track the S&P and Nasdaq. Namely SPY and QQQ. This goes for both my retirement accounts and my personal brokerage account.
Many people will recommend this dividend stock or that, looking only at the yield. I don’t really care. Many dividend stocks tend to go down in value over time, essentially making any gains you make from the dividends a wash. For example, AT&T (T) offers a nice 5.15% dividend, or about $.27 a share, but its stock has declined by almost 50% over the last five years. If you had bought 100 shares in 2019, you’d have made around $550 in dividends so far. But your position overall in terms of the value of the stock would be down almost $740. Meaning you’ve lost about $200 on paper. AT&T has gone up this year, but it’s long-term trend is down. This is not the case with every dividend stock, of course. Some may actually be good deals, but they’re just not for me. Do your own research here.
My personal brokerage allows me to see an estimate of future earnings from my dividends. As of now, I earn about $100 a quarter from my SPY and QQQ holdings. SPY offers a “low” 1.21% yield, while QQQ only gives a “measly” 0.61%. But these ETFs track the market, including the largest and most successful companies. SPY has gone up over 50% over the last five years. QQQ has more than doubled in the same time span. You have to look at the overall value of the asset and the risk involved in holding it, not just its annual yield. A dividend stock may offer a decent yield one year, then cut it the next. But even if SPY and QQQ were to cut their dividends entirely, they would still track their indexes. Whereas a dividend stock’s price might drop big because a flood of investors exit over its diminished yield.
Adding up these three brain-dead easy ways to make extra money comes out to almost $1,000. Or about $83 a month. That’s like getting an annual “performance bonus” from a job. A thousand may not seem like much. But it’s enough to pay rent for a month. Or get a “free” computer every year.
The best part is I don’t have to do anything really to get this $1,000. I consisently save money. I use credit cards to conveniently centralize monthly payments. I invest into my personal brokerage regularly. An extra thousand bucks is just a nice incentive for doing things I’d be doing anyway.
Dean Brooks 