10 ways to make Extra Money

makemoney

  • Do you want to make extra cash and still have your full-time job?
  • Are you studying full-time but want to make extra cash on the side?
  • Are the bills piling up and you need extra income to clear your debt?
  • Have you been made redundant and need money to get going while you find another job?
  1. Selling on eBay: This is probably the easiest way to make extra cash (at least in my opinion). It takes about 30 mins to get started on eBay. EBay is a place you can sell used and new items, for some if you look around your house you would find something that has no use, so why don’t you sell it and make extra cash and also have a cluster free life. If you have a good eye for things that you think people would like to buy, you can do a little research online to find deals and how to get it cheaper and start selling it on eBay for a profit. Remember, if you are selling for profit making, you should open an eBay business account and register the company. Did you know you can register as a sole trader in less than 20mins online? There are a lot of websites that allow you to achieve this without using an accountant. This article is a summary and I will go into detail at a later time. I will tell you where to find deals, how to negotiate, what to buy and etc.
  2. Buying financial Assets: Financial investments are shares, bonds, ETF’s, mutual funds etc. This requires a lot of dedication, risk, money and research. If you have limited funds I will suggest you don’t use this method to make extra income. One advantage of getting extra money via financial investment, is the ability to earn passive income (passive income is income you enjoy regularly without having to do anything an example is a dividend you receive from owning shares in a company or interest from bonds or prize draws from premium bonds). This is a big topic that I would deal with in a later post.
  3. Tutoring: Are you the smart intelligent book worm? If you are, then that’s great news for you. If you have a full time job or studying, you can tutor in the evenings or/and weekends. It’s a great way to make that extra cash plus the money can be REALLY good. If you really want to do this, but have no idea on how to start, I will highly recommend you use Gumtree to advertise yourself, and word of mouth, make sure you tell friends and family members. You only need 2 or 3 students to make a good income. If you need motivation I have that too. I remember paying a tutor £200 for 3 hours of work to help me out with University work and I found him through Gumtree. If you like to tutor but you don’t think you can handle University students, then just put an advert for what you feel confident doing, Gumtree is a great place to advertise your talent. For more ideas on how to make money tutoring, please leave a comment below and I will make a separate blog post about it.
  1. Blogging: Blogging is fun to be honest, and you really need to blog about something you are passionate about, or else it will become a burden. Just like being a YouTube, you really have to start blogging as a hubby rather than having the mindset of making money. You won’t see any income from blogging immediately so if you have a get rich fast mentality, I say think twice about this option. If you like travelling, all you need to do is take quality pictures of your travel destination and show your readers. If you like fashion, beauty, tech stuff etc. There is no rule, just do what makes you happy and willing to come back to on a regular.
  2. Writing an eBook: These days writing an eBook has been made easy. What do you like to do? Or better still what do you enjoy doing? These are questions only you can ask yourself. I want to share a few ideas here. Do you like cooking? Then get creative, start writing recipes, if you wrote one recipe a day, in a month you should have 30 recipes. Ok ok ok, that’s a bit extra, but if you create one a week, in 5 months you would have created 20 recipes. Are you good with technology? You can create a “how to do” list and help someone who is not computer savvy as you are.
  3. Market research online: Doing Market research for companies is another way to make extra money. There are a lot of companies looking for market researchers, and all you need to do, is find them. Use LinkedIn, search on Google.
  4. YouTube: Out of the 10 I have given, this is one of the slowest ways to make extra cash. It takes time, money and confidence. You really have to be patient and be willing to get a punch in the face when you say something wrong. I know I started by putting you off but it’s the truth and the truth is bitter. This is certainly not for the people who are desperate to start making extra income fast, you shouldn’t aspire to make extra income in a rush either because you might get disappointed when reality hits you like a thunder bomb. You have to start YouTube as a hubby in order for you to grow well. I can’t tell you exactly word for word how to go about starting a YouTube channel but I can recommend good videos for those interested.
  5. Photography (selling your pictures): If you are talented in this area, it’s a win for you. However, you really don’t need to be a professional to get extra income from taking great pictures. I know people who are not professionals but have a good DSLR camera, which they use in taking very good pictures. These days you don’t need to spend a lot of money to get taught how to use a DSLR, because there are hundreds of videos on YouTube to teach you the techniques. Once you have mastered picture taking, you can sell the pictures online or you can upload the pictures on instagram to build following and recognition. You can also get bookings for weddings and children parties on the weekends if you have a 9-5 job or studying.
  6. Babysitting: Babysitting is a good way to make extra cash. If you already have a full-time job, this is probably going to be a weekend gig. You can sign up with a few agencies online or help a friend or family, but you can’t just advertise yourself except you are certified.
  7. Uber driving: This is another easy one, all you need to do is to go on the website and follow the instructions on how to become an uber driver.
  8. Bonus (teaching language) with italki: Ok, so this one is pretty good, italki is a platform used for people interested in learning a language, if you are bilingual, you can offer your services and get paid online. The cool thing is that you really only need a laptop and internet to get started, and you can start earning almost immediately.

These are My 11 ways to make extra income, this list is not exhaustive and there are other ways. Please feel free to like this post and follow my blog, share with a friend, and PLEASE share your ideas on the comment section below on your ideas of making extra cash. This might help someone out there. The pictures are not mine. Thanks for reading

Snapchat worth the investment

Snapchat a mobile app used for image messaging, short video recording and picture taking was created by Evan Spiegel and Bobby Murphy. These Stanford University graduates first had the idea and created the app while in University. An idea coined out of a college project is now worth millions of Dollars.

This 4 year old business is ready to hit the streets, with an IPO (Initial public offering) expected to lunch early 2017, investors can get ready to jump in and have a piece of the cake, or a dry bone, oops!!. Reuters.com has it that the chosen underwriters for the IPO are Morgan Stanley and Goldman Sachs. The question is …If everything turns out as speculated, do you think it’s a good investment?

The primary source of income comes from advertisements. Snapchat introduced “Discover “which allows media publishers have a daily content on the app, there are about 11 publishers including CNN, ESPN, Cosmopolitan and etc. These companies get charged a lot to feature on the app and therefore generate income for Snapchat.

The company Snap.inc definitely has the potential to be a good investment. Why? The answer – Facebook offered to buy Snapchat for $3 billion in 2014 but Spiegel and his team declined the offer. Snapchat has about 100 million active users attracting 60% aged 13 to 24. This makes it attractive to companies who want to showcase their products or services. The company is also likely to go into the camera business the “Spectacles” (a sunglass that records short videos). Furthermore, in 2015 the total revenue worldwide was $59.2m, in 2016 went up to $366.7m and its expected to go up to $935.5m in 2017.

This is all great news for small investors, but until the IPO is out you just have to sit and wait but don’t sleep off when the cake arrives.

Please read my disclaimer page.

EU Referendum

brexit_-_Google_Search_-_2015-08-18_22.25.30.png

eureferendum.blogspot.com

The UK won’t leave the European Union

The benefits outweigh the disadvantages. There are also good reasons to leave the EU and I can honestly say it’s a double edged sword and this is why it’s very unpredictable what the outcome would be. The EU has always pursued economic integration as a means to prosper and create a great strong force for its members. The economic benefits of remaining in the EU are great and it will be detrimental to the UK economy if they leave the EU. Whether in the long term or in the short term.

The effect of leaving the EU

Turbulence in the financial market: as soon as the EU decides to leave, the turbulence would kick in straight away. We can expect big financial companies to move their headquarters to other favourable regions. At the moment there is a halt in investments and job recruitment because of the referendum. It is difficult to operate in an unstable economy and so if Brexit happens, there would be a prolonged period of uncertainty, of course the situation would stabilize but a lot of damage would have been done. A typical example stems from the 2008 financial crisis; it was evident that a sharp downturn took the UK a long time to recover. The question is this: is it wise to put a strain in the UK economy just to have control over the borders and make laws that are suitable?

Trade with EU: a change in the terms of trade with the EU will be renegotiated, The UK is unsure on what will change. The question is could Britain win a better deal by leaving the EU? It is nearly impossible to imagine a deal that would match the status quo.

Increase in prices: several economic factors will cause prices to increase. If the UK vote to leave we can expect the pound to plummet which means that we would need more pounds to import goods into the country thereby increasing the prices of goods. Also, once the UK leaves, all goods coming into the UK from Europe will be subject to custom fees which will increase the prices of goods. Inflation is likely to kick-in in small doses as it will be noticeable first with food and clothes but it usually spreads out to other commodities.

Change in Immigration status: if the UK votes to leave, there will be no immediate change in the number of immigrants from other EU countries because the EU nationals already in the UK will be allowed to stay. Also, for the 2 years of Brexit negotiations, there will be free movement of EU workers. However, it is unknown whether or not that will change after the 2 years.

My Opinion: it’s simple, Let’s just stay in the EU.

REITS – Real Estate investment trusts

reit

http://www.dnaindia.com

REITS

This is a type of investment security that focuses on investing in real estate. A REIT typically operates like an investment trust. REITS is comparable to a mutual fund which enables small and large investors to acquire ownership in real estate ventures. REITS are often traded on major exchanges just like shares.

REIT companies like Ventas invest in commercial real estate like offices, apartment buildings, warehouses and hospitals, but they also invest in residential homes.

Why should you invest in REIT?

Interestingly, by Law REITS are required to pay out at least 90% of the dividend payout to shareholders.

Diversification: Risk is reduced when you invest in REITS. Different REIT focuses on different properties in the commercial and residential real estate. When a specific market is slacking, others may be doing well, so the risk is reduced since the loss can balance out with your gains.

Tax: REITS are exempt from corporation tax. Instead you pay income tax on your returns.

Access to the property market: By investing in REITS, you can participate in the property market and benefit from the advantages, but you don’t need to spend so much or go through the hustle with getting an actual property. All of the work is done by the REIT company.

Liquidity: REITS are traded on the stock exchanges. So buying and selling is very easy. Just imagine if you had to sell an actual property? That would take time to get the cash.

As an investor, you have no business maintaining the property.

Types of REITS

  1. Equity REITS: most of what have been explained above best describes an equity REIT. Equity REITs own and invest in properties. REIT companies get their revenue from leasing, and this revenue is then distributed to the shareholders as dividends. Examples of REITS include Ventas (trading as –VTR), Simon property group (SPG).
  2. Mortgage REIT: The REIT companies invest in property mortgages and own property mortgages. They loan money to real estate owners or they buy already existing mortgages or mortgage-backed securities. A mortgage-backed security is a type of asset-backed security that is secured by a mortgage or a collection of mortgages. These mortgages are packaged into securities and sold to investors. Revenue is made through interest earned either directly from mortgage or from mortgage-backed securities.
  3. Hybrid REIT: A hybrid REIT is one which combines both equity and mortgage REIT. In other words, income is generated from rents and capital gains. It also receives interest like a mortgage REIT. Example is the Vanguard REIT ETF (VNQ).

 My Opinion

I think investing in REITs is a good investment, especially in a stable economy. Certainly not in a period of financial crisis, as that investment will suffer loss. However, you can buy cheap if you enter at the right time so that when the economy stabilizes you can make a good profit. It really depends on how much risk you are willing to take. What is your risk preference?

LIBOR RATE

LIBOR Rate

The London interbank offered rate (LIBOR) represents the average of the interest rates charged by the leading banks in London. The LIBOR is considered to be an important interest rate in finance. The LIBOR is the most widely used benchmark for short term interest rate. The primary function is to serve as a reference point for debt instruments such as government bonds, corporate bonds, mortgages, loans, credit cards etc. The LIBOR is the average interest rate that banks can borrow from each other. The LIBOR rate is not just for the banks in London. It is called the London interbank offered rate because the benchmark is set in London. The calculations are performed by Thomas Reuters.

How is the rate calculated?

The LIBOR is based on 5 currencies namely: US dollars (USD), EURO (EUR), Sterling (GBP), Japanese Yen (YPN), and Swiss Franc (CHF). Also, there are 7 different maturities: the overnight, one week, and 1,2,3,6 and 12 months making a total of 35 different LIBOR rate each business day. A selection of panel banks for top banks such as: CITI group, JP Morgan Chase, Bank of America, Barclays, UBS and others estimate the amount of interest they are willing to borrow another bank in the short term. The process is overseen by the ICE benchmark Administration (IBA) and calculated by Thomas Reuters.

Why is LIBOR so important?

Benchmark: As mentioned, the LIBOR is very important as it sets the base rate for short-term interest rates

Economic evaluation: the LIBOR rate helps to evaluate the current state of the worlds banking system. The financial institutions are very important when considering the health of the economy. So that’s why investors keep a close eye on the LIBOR rates.

Central bank interest rate: professional analyst monitor the LIBOR rate as it guides them or sets an expectation for future central bank interest rate changes.

The LIBOR Scandal

The scandal was made known in 2008 during the financial crisis. Financial institutions have been accused of fixing the LIBOR. Being an important indicator of the interest rate and used by so many institutions, bankers from various financial institutions that provide the interest rate were accused of understating the interest rate to artificially keep the LIBOR rate low. The effect on the economy at the time was that, since it’s an indicator of the health of the banks, during the 2007-2008 financial crisis, some banks appeared stronger than they actually were.

My Opinion

As an investor it’s important to constantly look at the graphs  plotted on the LIBOR rates as this can give you a sense of how and when to invest over a period of time. Investment banks use it and its available to individuals as well. Happy investing!!!!

Oil Prices

oil

financialtribune.com

The downturn in the oil industry has been in the top list of the most discussed topics. The downturn in oil price is not just bad news, but its good news too. Consumers are able to save a few bucks in their pocket because of the low prices. However, the story is different for the oil producers. Whether its the companies or countries that depend on exporting crude oil. The cost of a barrel of oil has fallen about 70 percent since 2014.2016 has seen the lowest price drop since 2003. Oil prices have been in the range of $70 – $100 a barrel but in 2016 the price went as low as $27 a barrel. The low prices have caused loss of jobs, a halt in exploration and production, bankruptcy etc. A few factors have contributed to the drop in prices.

Why the drop in oil Prices?

Increase in oil production

Overtime the US has almost doubled their production which has kicked out countries that were once exporting oil to the US. This means countries like Saudi, Algeria and Nigeria are forced to sell to other countries. Canada, Iraq, and Russia have also increased production.

Iran sanction Lift

Mid January 2016, the Iran sanction was lifted after the United Nations nuclear agency declared Tehran fulfilled the commitment to scale back its nuclear program.

Technology advanced cars

The demand for fuel is lagging behind because vehicles are becoming more energy efficient. This doesn’t have as much effect as the other points mentioned. However, it’s a factor to consider in the future.

Going forward

Russians and Saudis have agreed to freeze production. Major producing countries will meet on the 17th of April in Qatar, to discuss a possible price freeze to stabilize the price. Some analysts say we might see a possible increase in oil price. At the moment, global oil supply is at 95.4m Barrels per day vs. a demand of 93.9m barrels estimated. So it’s a 1.5m barrels per day over supplied. According to Mike Kelley from the seaport global securities, he sees a balanced demand and supply in 2017.

Who is affected?

Oil producers have been hit really badly during this downturn and also companies that support energy sectors have seen their share prices drop. The oil industry can be grouped into the upstream companies and downstream companies and the integrated companies. The upstream companies have been affected the most because they are involved with exploration and production of crude oil. On the flip side, downstream companies deal with refining and distribution. Since the price at which the upstream companies sell is regulated by the market they are hit the hardest, and most of their cost of production are fixed. However, most large oil companies are integrated companies meaning that they have both upstream and downstream operations. These companies have experienced a hit due to their upstream operations. Companies such as Exxon, Chevron and BP are integrated oil companies. Until an agreement is made on regulating production of crude oil, the prices are likely to remain low.

Understanding Mutual Funds

Mutual funds

www.murraycoulterandassociates.com

What is a fund?

A fund is explained as a pool that contains a number of securities such as shares, bonds, money market etc. The fund is owned by investors

A mutual fund is a professionally managed fund. A fund containing a number of securities is owned by shareholders for the purpose of making a gain. The financial securities are owned by investors from all over and each investor has a portion of the holding of the fund.

Advantages

Professional management: This type of funds is managed by professionals who are in charge of picking securities and making sure that the fund is profitable. This sort of investment is suitable for people who don’t have the time, a lot of money or expertise to manage a portfolio.

Diversification: A diversified portfolio contains a variety of financial securities e.g. stocks, bonds, money market fund etc. The investment risk is minimized, because if there is a loss in one security, there will probably be a gain in another which offsets the loss. A typical fund has a large number of different securities. It is very expensive for just an individual to create such a diversified portfolio.

Liquidity: A mutual fund is fairly liquid, at any point if you want to cash your holdings, you can request that your shares be converted to cash

Economies of scale: This is the cost advantage the enterprise obtains because of the size, output or scale of operations since mutual fund managers buy and sell large amount of securities. The transaction cost is low compared to an individual.

Earning: Depending on the fund you have invested in, income is earned from dividends and or interest from bonds. Also, if the fund makes a profit from selling a security that has appreciated in value, this is distributed to the fund shareholders.

Disadvantages

Professional management: there is a debate as to whether or not professional managers actually manage the fund for the interest of the shareholders to increase profitability or for their own managerial benefits. The issue here is that whether or not the fund makes a gain, the managers still get paid.

Fees: A mutual fund involves a lot of fees, from the creating fee, distribution and the running of the fund. The investor pays the fees. Every pound spent has no opportunity to grow overtime, so it is important to take this into consideration before you invest in mutual funds.

Tax: if you are concerned about tax, you need to do more research n how to mitigate taxes. When the fund manager sells a security, a capital gains tax is triggered. It is important to speak to a fund manager for more advice on taxes.

As at September 2015 the top open-end managers in US were

The Vanguard group – https://investor.vanguard.com/corporate-portal/

Fidelity Investments – https://www.fidelity.com/mutual-funds/overview

America funds – https://www.americanfunds.com/

JP Morgan Chase – https://www.jpmorganmf.com/wps/portal/

T.ROWE price – https://www3.troweprice.com/usis/iinvestor/en/mutual-funds.html?van=funds

Blackrock – www.blackrock.com/UK

 

Reference

investopedia.com

fidelity.com

https://en.wikipedia.org/wiki/Mutual_fund

www.murraycoulterandassociates.com

Exchange Traded Fund (ETF)

etf_large

Exchange Traded Fund (ETF)

An exchange traded fund (ETF) is a marketable security that trades like a stock on the stock exchange. Just like a stock the prices fluctuate during a trading day. It is essentially a portfolio of securities from a specific sector or region e.g. equity, fixed income, commodities etc. An ETF tracks a marketable security such as an index, bonds, commodity or an index fund (index fund is like a basket of assets).

Owning an ETF does not directly mean that you own the asset or have any direct claim but rather, you indirectly own the underlying asset. You are entitled to a portion of the profit such as interests and dividend paid, but you do not own the underlying asset.

Advantages of ETF’s

Accessibility

There are thousands of ETF’s available, so you can access a broad range of markets easily, they pretty much readily available for you to buy.

Diversification

ETF’s gives you the benefit of diversification like an index fund. Diversification is a process of reducing the risk or exposure experienced by owning just one type of asset. Therefore, investing in a variety of assets gives you a safety net. ETF gives that safety net because it’s a fund consisting of a variety of assets.

Transparency

Most ETF’s show their holdings on a daily basis. Investors are able to see the holdings contained in the particular ETF they hold

Cost effectiveness

ETF investors can purchase as little as one share and there is no minimum deposit required. You pay same commission to the broker like any regular order unlike mutual funds which will cost more.

Liquidity

The ability to buy and sell ETF shares on the stock exchange during trading hours means that you can easily turn your shares into cash.

Interested in ETF’s?

Here are some of the widely traded ETF’s

Spider (SPDR) – tracks the S&P 500

IWN – tracks the Russell 2000 index

OIH – tracks oil companies……. etc

Reference

Image – http://www.fool.com

investopedia.com

bloomberg.com

 

 

 

Negative Interest Rate

Negative interest rate: This is when the central bank sets interest rate to negative (less than Zero). This means the banks and the central banks charge depositors on their deposit. It is an unconventional monetary policy tool that is used by central banks during a period of deflation. Bloomberg explains it as an act of desperation. It is usually used when conventional monetary policies have not made an impact on the economy or rather proved ineffective.

Why negative interest rate?

Central banks decide on using negative interest rate for several reasons such as

During a deflationary period: when people are not spending money but hoarding money, a negative interest rate forces banks to lend money and individuals to invest, spend or lend money because it doesn’t benefit an individual or a corporation to pay a fee to hold their money.

Send investors abroad: negative interest rate can discourage investors from investing in a particular country, if an investor will get better returns abroad, why would they invest in a country that has negative interest? They are more likely to take their money elsewhere. It might sound bad for the economy but it isn’t if an economy is suffering from deflation. When investors start to take their money elsewhere, in the long run, the currency is likely to depreciate.  When the country’s currency depreciates, the price of imports will increase thereby combating deflation and enhancing export growth. A typical example can be taken from the ECB, in 2014 a negative interest rate was introduced and since then, the Euro has falling against the dollar by 0.2%. Other economies are adopting the unconventional negative interest monetary policy like Denmark, Sweden, Switzerland and Japan.

How does it affect the banks?

Negative rates can affect banks in different ways

Squeeze bank profit: banks are affected because they may not want to charge customers a fee for holding their money, so they are willing to absorb the cost thereby reducing their profits.

References

www.theguardian.com

www.bloombergview.com

www.investopedia.com

Negative Interest Rate

Negative interest rate: This is when the central bank sets interest rate to negative (less than Zero). This means the banks and the central banks charge depositors on their deposit. It is an unconventional monetary policy tool that is used by central banks during a period of deflation. Bloomberg explains it as an act of desperation. It is usually used when conventional monetary policies have not made an impact on the economy or rather proved ineffective.

Why negative interest rate?

Central banks decide on using negative interest rate for several reasons such as

During a deflationary period: when people are not spending money but hoarding money, a negative interest rate forces banks to lend money and individuals to invest, spend or lend money because it doesn’t benefit an individual or a corporation to pay a fee to hold their money.

Send investors abroad: negative interest rate can discourage investors from investing in a particular country, if an investor will get better returns abroad, why would they invest in a country that has negative interest? They are more likely to take their money elsewhere. It might sound bad for the economy but it isn’t if an economy is suffering from deflation. When investors start to take their money elsewhere, in the long run, the currency is likely to depreciate.  When the country’s currency depreciates, the price of imports will increase thereby combating deflation and enhancing export growth. A typical example can be taken from the ECB, in 2014 a negative interest rate was introduced and since then, the Euro has falling against the dollar by 0.2%. Other economies are adopting the unconventional negative interest monetary policy like Denmark, Sweden, Switzerland and Japan.

How does it affect the banks?

Negative rates can affect banks in different ways

Squeeze bank profit: banks are affected because they may not want to charge customers a fee for holding their money, so they are willing to absorb the cost thereby reducing their profits.

 

References

www.theguardian.com

www.bloombergview.com

www.investopedia.com