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It’s no wonder that so many people are jumping on this bandwagon. We’ve seen increases in our health insurance, our property taxes, and more. It sounds like there’s more to come.

The three-income family

Isn’t it interesting, though, that just a few generations ago, most families got by on one income? Then we added a second one in the household with more and more women joining the workforce.

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I don’t think it was purely a financial decision. It was also about fulfillment for many women, but it certainly helped the family’s income.

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Now a number of people can’t get by on two incomes. They need three or maybe more. If you find yourself in this position, it may be good to ask if all the obligations are really worth it.

Is that life on your own terms – being weighted down by the cost of things you thought you wanted? With careful analysis, you may realize they’re not so important – especially if you find you can’t enjoy life because you’re working so much.

So if you feeling that you need a third income, it might pay to look at your obligations to see if there are areas where you can cut. Spending time finding ways to reduce your obligations might get you further faster than spending that same time trying to make some extra money.

This new trend is about something more important than income.

Many of us now realize more than ever how much we want to be in charge of our own lives. The TrendWatching report mentions that people fantasize about being their own boss, even if it’s just for a few hours a week.

Bigg success is life on your own terms. You’re the entrepreneur of your life whether or not you’re an entrepreneur in the traditional sense.

Some people want to be the boss all the time. According to this new report, that trend is still alive and well. But more and more people are finding ways to be the boss at least part of the time.

They have the security of a full-time job along with the freedom that being in charge gives you part of the time. Freedom with security … what a great combination!

When you find fulfilling ways to make extra money in your spare time, you’re getting synergy working in the five elements of bigg success. If you make the right moves with that extra money, you can accelerate your journey to bigg success, to life on your own terms.

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Turning $3 into a multi-billion dollar business

One way that people are making extra money is by selling their expertise. Another way is by selling, or renting, assets. One clever example of this is ParkingSpots.com, which helps people rent their extra off-street parking spaces.

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I heard Michael Krasny tell his story of the founding of what became CDW. Most of us have probably done business with them. They do a great job. Back in 1982, Michael had a used computer he wanted to sell. The Chicago Sun Times was running a special on classified ads – 3 lines for 3 days for $3. He ran an ad and his phone started ringing off the hook. He realized he had a business here. He was right – within about ten years, the business he started from that classified ad became a Fortune 500 company. Michael Krasny became a multi-billionaire, recognized on the Forbes 400 as one of the richest people in the world! Now that’s bigg success!

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You never know … your idea for making a little extra money may turn into the next Fortune 500 company!

What do you do for extra money?

Share that with all of us by leaving a comment below. You never know … you might earn a little spare cash!

Thank you so much for reading our post today.

Do you think you don’t have enough spare time to make any spare cash? Please join us next time to see how one group people found the time.

Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00366-040609.mp3

Related posts

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What’s Hot in 2009: Businesses

The Dirty Truth About Being an Entrepreneur

(Image in today's post by penywise)

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It’s understandable that baby boomers are looking for alternatives because many of them are so close to retirement.

But what if you’re not about to retire … should you stick with stocks?
We’ve heard a lot about how the recent decline in stock prices has wiped out all of the last ten years worth of gains. So it’s a really good question. We decided to do some analysis of our own.

Before we start, allow us to make one disclaimer: We’re going to provide an example to help you understand how the market works. Your decisions about your portfolio should be based on your specific situation. We recommend that you talk with a certified financial advisor to help you with that.

Stocks and Certificates of Deposit

To keep it simple, we looked at just two assets – stocks, represented by the S&P 500 (Source: Yahoo! Finance) and risk-free investments, represented by one-month CDs (Source: Federal Reserve) in FDIC-insured institutions.

There may be better assets to invest in (e.g. a broader stock market index), but we still felt that these represented risky assets and risk-free assets relatively well. We were curious about what has happened in the past, looking at various scenarios, with these two assets. This is a good place to insert a couple of caveats:

• We are looking at historical numbers. We’re not psychic nor do we possess any other ability to project the future.

• We used nominal pre-tax rates of return, so inflation and taxes have not been factored in to the returns we’ll discuss.

The last ten years
When we look at the last ten years (going back from December 31, 2008), we see that the stock market underperformed its historical average through almost the entire decade.

The best mix of these two assets for the last ten years would have been no mix at all. Investing 100 percent in CDs provided the best return. Even then, the return was not that great: 3.62% per year by our calculations. The worst return, as you might guess, was being 100 percent invested in stocks over the last ten years. They lost about one percent per year.

What about prior ten-year periods?
One ten-year period isn’t all that instructive. So we went back ten more years (January 1, 1989 to December 31, 1998) and looked at those returns. The highest returns in that period came from a portfolio of 100% stocks, which returned 17.28% annually.

So stocks are one for two. Let’s break the tie and go back another ten years. Can you hear the disco music playing?

A portfolio that was fully invested in stocks delivered the best return in that period (January 1, 1979 to December 31, 1988) as well. They earned a return of 14.36% per year.

Is ten years long enough?
Financial advisors have said for years that stocks perform best over longer periods of time. They used to tell us that we should have at least five years before we needed the money or we shouldn’t invest in stocks. Now we’re hearing more and more that ten years is the magic number.

But here’s the thing … we really shouldn’t even count on that as we’ve learned the last ten years.

How long until you retire?
Let’s think about this … if you’re 40-years old, you might have twenty years before you want to retire. At 30, let’s say you have 30 years. How have the returns looked over that period?

Looking back twenty years, even with the most recent decade, our best bet would have been to be fully invested in stocks. Our return would have been 8.14% annually. It’s ditto for the most recent thirty years. An all-stock portfolio returned 10.21% per annum, about its historical average.

So, our research shows that history shows that you should stick with stocks over the long term. But is there a way to lower your risk without sacrificing returns unjustly?

The price of a higher return
There is a price to pay to get a higher return. That price is more volatility and volatility equals risk. Riskier investments should pay more to compensate you for the risk you’re taking. Stocks are riskier than CDs; therefore, they should pay more.

The price of less risk
We just said that riskier investments generally offer higher returns as compensation for the risk. So why not just invest in CDs and other risk-free assets? Because they may not return enough to get you where you need to go. There is a better answer.

Diversification smoothes it out
When you diversify your assets – investing part of your portfolio in risky assets like stocks and a portion in risk-free assets like CDs, you smooth out the volatility, relative to just investing in stocks, while still getting a higher return than if you invested all your money in just CDs.

Example: A 50/50 Mix

As we discussed earlier, had you just invested in stocks over the last thirty years, you would have made about 10 percent per year on your investment. However, you would have lost about one percent a year in the most recent decade.

What if you can’t stomach losses like that?

Obviously, any money invested in stocks is at risk. However, if we had invested 50 percent in stocks and 50 percent in CDs over the last thirty years:

• We wouldn’t have lost money over the last decade. In fact, we would have made 1.31% per year.

• The thirty-year return on our portfolio would have been 8.32% a year. While it’s less than the 10 percent we could have earned by just investing in stocks, it’s not that much less. Looks pretty good right now, doesn’t it?

We want to emphasize again that we’re not saying a 50/50 mix is right for you. Consult your financial planner. We just picked 50/50 to see what would have happened with an even mix of these two assets.

Long on stocks
As you can see from the returns we quoted earlier, the experts are right – stocks are good long term investments. If you need the money ten years from now, you need to be careful. If you’re a 30- or 40-year old funding your retirement, a good basket of stocks as part of a well-diversified portfolio is a great place to stick your money.

Short on dollars
Going back to where we started, more people are investing very conservatively in treasuries right now. The problem is, if you invest too conservatively, you have to make a choice. Will you be short on dollars now or at retirement?

If you choose to fully fund your retirement, it means you’ll have to invest more now to reach your goal, which means you’ll have to sacrifice more now than is probably necessary.

We still don’t know if we’ve hit bottom on the stock market. But here’s what we do know – most market timers get it wrong most of the time. That’s why we won’t try!

If you have time until you need the money, invest in a well-diversified portfolio. You won’t be quite as happy in the good times, but you won’t be nearly as upset during the bad. 

We really appreciate you spending some time with us today. Join us next time when we interview John Jantsch, The Duct Tape Marketer, about how to make customers stick without busting the bank. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00265-111408.mp3

Related posts

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(Image in today's post by woodsy)