Building Wealth

For the first 30 or so years of working, saving and investing, you’ll be first in the mode of getting out of the hole (paying down debt), and then building your net worth (that’s wealth accumulation.). But don’t forget, wealth accumulation isn’t the ultimate goal. Decumulation is! (a separate category here at the Hub).

14 creative ways to make Extra Money on the side

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What is one way to make extra money on the side?

To help you find creative ways to make extra money on the side, we asked career coaches and business leaders this question for their best insights. From doing freelancing through Upwork to engaging in pet care, there are several easy ways to start making extra money in addition to your regular day job.

Here are 14 creative ways these leaders recommend for making extra money on the side:

  • Do Freelancing Through Upwork
  • Put Ads on Your Car
  • Sell Informational Products
  • Offer Gaming Services Online
  • Do Social Media Marketing
  • Become a Food Delivery Driver
  • Donate Blood Plasma
  • Sell Old Electronics
  • Try Random-Rewards Banking
  • Rent Free Space on Airbnb
  • Work as a Virtual Assistant
  • Become a Video Game Tester
  • Teach English Language
  • Engage in Pet Care

 

Do Freelancing through Upwork

We have hired a lot of freelancers from Upwork over the years who have their normal day jobs but do the same type of work on their own through Upwork in their spare time. Upwork makes it very easy to list your skills and have a company hire you for small projects. We have worked with one candidate through Upwork for over 5 years now. We will have website redesign projects and he will help us. I know this is a side gig for him and we work around his schedule, but it also saves us a lot of money not having to hire through a marketing company and getting the same level of talent. If you have any good computer skills you can find a task that you can help someone with through Upwork. It can be as simple as data entry or replying to emails, there are all types of jobs available. Being an online freelancer is nice because all you need is a computer and internet connection, there is very little up front cause to start earning extra money on the side. — Evan McCarthy, SportingSmiles

Put Ads on your Car 

A super easy way to make anywhere from $100-$300 in extra income is by simply driving your car as you normally would through car-wrapping ads. There are usually a few general requirements for legitimate car wrapping ad companies in larger cities: such as a minimum driving time as well as driving a newer car that is still in good condition. Assuming you meet these requirements, however, you can comfortably earn an extra income without making any changes to your day-to-day life. –– Kristine Thorndyke, Test Prep Nerds

Sell Informational Products

If you’ve got enough knowledge or hands-on experience in a particular field of interest, selling informational products like e-books, audiobooks, or courses is a great way to make some extra money. The best part about informational products is that once you’ve poured in your time and energy to create them, they won’t need constant attention or time: literally making you money while you sleep. — Harry Morton, Lower Street

Offer Gaming Services Online

If you’re an ardent gamer or someone who dedicates a lot of time to video games, you could make some extra money by selling gaming services online. There are a few different ways of going about this. You could offer coaching services to help others improve their gameplay or even sell in-game items and currency that you’ve acquired. You could also stream your gameplay on platforms and earn income from advertisements. The amount of income depends on how many hours you’re willing to commit and the type of services you offer. But if you’re able to build up a large following, you could potentially make a career from this side hustle job. –– Demi Yilmaz, Colonist.io

Do Social Media Marketing

In this digital world, businesses are always searching for strong social media marketers. The millennial generation or Gen Z can thrive in these positions as they spend the majority of their time on popular platforms such as Instagram and TikTok. This side gig can easily be done on your own time as freelancers can schedule posts through third-party apps like Later, and work on an influencer marketing strategy through Aspire IQ. Graphics can be made through free websites such as Canva, and all community management can be handled straight from your home office. While a content role such as social media may feel like it’s never-ending, it’s a great side hustle for those looking to advance their digital skills. — Corey Ashton Walters, Here

Become a Food Delivery Driver 

One way to meet fitness goals while making cash on the side is to run food for a food delivery app. Professionals can handily make over a thousand dollars a week part-time by working in busy delivery areas during peak hours. Depending on the area, delivery drivers can bike or use a car to maximize total deliveries during their shifts. In particularly busy cities for food delivery, such as New York, orders are certain to be nonstop on specific days of the week, guaranteeing flexible supplementary income.  Continue Reading…

Keep calm and dividend on

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By Mark Seed, myownadvisor

Special to the Financial Independence Hub

The markets are down, inflation remains hot, and interest rates are moving higher.

Are you worried?

I’m really not that worried.

I’ve been preparing for higher interest rates for years, well before the pandemic.

Case in point: this post is literally from five years ago. 

Where am I going???

Well, readers of this site will know I’m a big fan of companies that reward shareholders with dividends.

And why not love dividends?

Although I use a few indexed products in my investment portfolio, for extra diversification just in case, getting paid on a consistent, growing basis from Canadian and U.S. stocks: that’s a beautiful thing. I got another raise this week that I’ll link to below!

Digging deeper, I’m not that worried about the markets or inflation right now. There is a reason why dividends matter to me. Why do dividends really matter?

Beyond the Canadian dividend tax credit, beyond consistent payments and ever growing income I’ve experienced to date, dividends help me stick to my plan.

There is no financial advisor in my plan, nor fees paid to any advisor in my plan.

There is no day trading, there are no wasted fees or losses for trading.

There is no wild market speculation, I’m not trying to time anything.

I focus on my savings rate for investing and I invest more money when I have it. It’s that simple. 

Recall that dividends paid is real money paid from real company profits. Buying and holding an established company that has paid dividends for decades is a good sign (at least from a historical perspective) that this company had enough cashflow to reward shareholders and stay in business.

Companies that don’t pay dividends tend to use their money for other means, grow their business; make acquisitions or buy back shares, pay down risky debt, therefore driving the stock price higher over time.

These are not poor management decisions by any means: far from it. There are lots of ways shareholder value is created and to be honest, acquisitions, share buybacks and other company reinvestments could be better company decisions in the long-run!!

When it comes to the capital gains versus dividend income debate, there really isn’t a debate to be had, since every dollar you earn in capital gains from a stock is worth just as much as your dividend dollar paid. I love the graphic shown at the top of this blog.

Continue Reading…

Defined Benefit pensions lagged in third quarter but continue to withstand volatile markets and historic inflation: Mercer

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Unlike the first half of 2022, the financial position of most defined benefit (DB) pension plans “decreased slightly” in the third quarter, as they were buffeted by inflation and volatile stock markets. Investment returns were mostly negative in the quarter, and yields on long-term bonds were lower at the end of the quarter than they were at the beginning, according to The Mercer Pension Health Pulse (MPHP), released on Monday.

The MPHP tracks the median solvency ratio of the DB pension plans in Mercer’s pension database, which decreased from 109% as at June 30, 2022, to 108% as at September 30, 2022.

Of the plans in Mercer’s pension database, at the end of Q3:

  • 72% of plans were estimated to be in a surplus position on a solvency basis,(vs. 73% at the end of Q2)
  • 17% of plans were estimated to have solvency ratios between 90% and 100%,(vs. 16% at the end of Q2)
  • 5% have solvency ratios between 80% and 90% (unchanged from Q2), and
  • 6% have solvency ratios less than 80%. (also unchanged from Q2).

In a press release, the Calgary-based Principal and leader of Mercer’s Wealth business, Ben Ukonga,  said that “In spite of the significant market volatility, the financial health of most DB plans would have experienced only a slight decline in the third quarter of 2022. As for what can be expected for the remainder of the year, plan sponsors should continue to expect significant volatility.”

Mercer says experts “urge caution and encourage plan sponsors to be prepared for anything, with more volatility on the horizon. Markets will most likely remain volatile in the short to medium term due to numerous risks such as the continued war in Ukraine, the upcoming US midterm elections, the potential confrontation between the US and China over the status of Taiwan, risks of a global energy supply shortfall, and of course, the ongoing inflationary environment.”

Continued short- and medium- term volatility

Markets will most likely continue to remain volatile in the short to medium term due to numerous global risks, including the war in Ukraine (and the Russian Government’s actions in response to Ukraine’s recent successes on the battlefront, such as the recent annexation of parts of Ukraine in violation of International Law, and the geo-political fallouts from these actions). Mercer is also cautious about the upcoming US mid-term elections, the increasing political gridlock and polarization in the US, and the potential for a confrontation between the US and China over the status of Taiwan. The recent volatility in the UK currency and bond markets and the risk of contagion to other markets.

Mercer also sees risks from a global energy supply shortfall, and the effect such a shortfall would have on the global economy: “… plan sponsors should pay attention to the risks associated with energy insecurity in Europe – such as the risk of the Russian Government using Russian gas supplies against Europe in retaliation to sanctions on Russia, and the effects on European economies if their energy supplies are curtailed.”

Inflation at levels not seen in 30 years

With inflation running at levels not seen in over 30 years, central banks globally are “on an aggressive monetary tightening mission in order to get inflation under control. Will they succeed without triggering a hard-landing global recession? Will higher interest rates make governments, corporations and households unable to meet the interest payments on debts they accumulated during the very long period of low interest rates? This could lead to an increase in bankruptcies and crowding out spending and investments, further exacerbating the risks of a hard landing global recession.”

As workers see a decline in the purchasing power of their wages, there will be increased pressures on employers for higher wages, Mercer says. “Sponsors of indexed DB plans will see increases in the cost of these arrangements, and sponsors of non-indexed DB plans may face pressure from their pensioner groups to provide ad hoc cost of living adjustments. Coupled with labour shortages, some employers may have no choice but to increase their labour costs. And companies that are unable to pass these increased costs to their customers will face profit margin pressures and reduced profitability, hurting their future economic outlook.”

Covid still poses macro risk

The global health landscape also poses a macro risk, Mercer says. “As the western hemisphere is entering the winter months, will a new vaccine-resistant strain of the COVID-19 virus appear? And how will governments and citizens deal with such a resurgence? Will the Chinese government continue with its zero-COVID policy? And how much of a negative impact will this policy, along with what some would call draconian lock down measures, have on the Chinese economy? And how deep will the negative knock-on effects be on China’s trading partners?” Continue Reading…

Avoid new issues but high-quality stocks likely to gain in value over next year

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The IPO or “Initial Public Offerings” market — more commonly known as the new issues market — has gone through an extraordinarily bad time this year. It’s been bad for all three of the groups that take part in this market. They are as follows:

Investors who put their money in new issues have lost substantial sums in the past year. On average, new stock issues tend to do worse than the rest of the market in their first few years of public trading. This past year, they performed much worse than ever.

Financial institutions that bring new issues to market for sale to investors have suffered, too, because demand for new issues has dried up. At this time of year in 2021, the new issues market had raised around $100 billion. So far this year, it has raised just $5 billion. In the past quarter century, the new issues market raised an average of $33 billion at this point in the year.

Companies that raise capital for themselves through the new issues market are suffering as well. When the new issues market began drying up as a source of corporate funding, many would-be issuers of new stocks found it was harder and more expensive than ever to find alternate sources of financing.

This will be worst year for IPOs since 2009

This will be the worst year for raising money in the new issues market since 2009, when the economy was struggling to pull out of the 2008/2009 recession.

As long-time readers know, we generally advise staying out of new stock issues. After all, there’s a random element in the success or failure of every business, especially when it’s just starting out. But new issues expose you to a special risk that you avoid with stocks that have been trading publicly for some time. That is, you can only invest in new issues when they come to market.

This is just one more example of a conflict of interest, which we’ve often referred to as the worst source of risk you face as an investor.

Companies only come to the new issue market to sell their stock when it’s a good time for the company and/or its insiders to sell. The insiders can’t predict the future, of course. However, they do know much more than outsiders do about their company. Continue Reading…

Nasdaq 100: Exposure to the Modern Economy

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Image via Pixels/Anna Nekrashevich

By Sa’ad Rana, Senior Associate – ETF Online Distribution, BMO ETFs 

(Sponsor Content)

Indexed investing, when done properly can be an efficient and low-cost way of gaining exposure to various markets. Investment vehicles such as exchange-traded funds (ETFs), make it possible for individuals to invest in these indexes, i.e., the Nasdaq-100 index.

Nasdaq-100 & Exposures

Launched in 1985, the Nasdaq-100 is one of the world’s most well-known large-cap growth indexes. The companies in the Nasdaq-100 include over 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. It is mainly comprised of technology, consumer, and health companies – with a slight exposure to industrials and telecom.

When looking at what is powering economic growth in the 21st century, we look to those new economy sectors that are highly digital. These are disproportionately tech or consumer companies like Amazon, Microsoft, and Google. This index gives you exposure to the biggest Nasdaq-listed names, along with others that follow closely behind these leaders in technology.

Nasdaq-100 vs S&P 500 Volatility & Performance

When looking at volatility, one may think of the Nasdaq as being a more growth-oriented index, and if looking at returns alone, these have certainly shown to be significant over the years. Investors may assume that the indexes’ higher performance leads to higher volatility compared to other leading indexes. However, if we take a look at the chart below, which is more of a longer-term picture, you are getting a pretty significant consistent volatility range. Of course, if you look at this year in comparison inflation has been at the forefront of headlines, growth-oriented companies have been taking a harder hit than more cash-up-front companies: you see more volatility in the Nasdaq this year vs the S&P 500.

Both the Nasdaq-100 and the S&P 500 have had very similar volatility over last 15+ years

Index returns do not reflect transactions costs or the deduction of other fees and expenses and it is not possible to invest directly in an Index. Past performance is not indicative of future results.

The big story for everyone is the performance of the Nasdaq-100 vs. the S&P 500. The long-term performance of the Nasdaq-100 shows an upward trend. If we look at post-2008, generally monetary policy had been very supportive of market growth, and companies had been able to invest in research, helping them grow over time. You see this reflected in the Nasdaq-100, where thanks to the underlying companies in this index, there is outperformance. The chart below showcases this quite well. It tells us that the Nasdaq-100 is a valuable holding in a portfolio based on performance.

Index returns do not reflect transactions costs or the deduction of other fees and expenses and it is not possible to invest directly in an Index. Past performance is not indicative of future results.

Market Considerations: Performance vs Interest Rates

The chart below shows what happened the last time rates went up by a similar amount. You can see a gradual stairway up from almost 0% to about 2.5%. You can see the dip in the NDX price (grey line), which looks like a blip, almost not noticeable (but it was 23%). This isn’t very far from the drawdown this year to date. Albeit the Fed is raising rates much faster.

Based on experience, the Fed may keep rates high until inflation gets under control into that sort of two to three per cent range. The question for investors is, what happens to stocks if rates get to 3%, 4% or maybe 5% and perhaps stay at that level for a few years? This is where it is imperative to look at the amount of debt these companies have on their balance sheet, how much the interest costs will go up and what their earnings power looks like. Will they be able to remain competitive with the price of everything rising? Will consumers continue to pay for these products vs. downsizing or even substituting for cheaper alternatives? Continue Reading…