We all dream of a perfect, worry-free retirement, but many of us find that reality presents a different picture. Many people who retired in recent years are faced with diminished nest eggs, thanks to the global economic meltdown of 2007-2008. Others simply never saved enough to begin with. Sudden medical emergencies can cost tens of thousands of dollars. Most retirees facing situations such as these will have to continue working in some capacity, or at least find some way to bring in extra cash.
What are the 5 most popular ways to earn extra income during retirement?
1. Become involved with the Internet.
With each week that passes by, deskbound entrepreneurs find new ways to milk the Internet. With a little research, ingenuity, and initiative, you too can benefit from this cash cow. Thousands of people earn good money trading goods on eBay; there are scores of books explaining various strategies on how to do it. You don’t even have to keep inventory, or sink much seed money into an eBay operation; you do need to know your products and your competition.
Or, if you’re technically savvy, set up your own websites on topics that are of interest to you, register with Google, and participate in Google AdSense. Google places targeted ads on your website, and each time someone browsing at your site clicks on an ad, you make money (as does Google of course!). The key here is to make your website interesting enough to rank high in Google searches, generating sufficient traffic; you need to produce good content. There are various keyword strategies that will help your website rank higher than others, and these strategies are constantly shifting as Google attempts to stem the proliferation of spam websites, so you’ll need to stay on top of the game. If you’re running several websites, this can become a full-time occupation.
2. Invest in Real Estate.
Given the housing bubbles of the late 2000s in the United States and elsewhere in the world, sinking good money into real estate might sound like an insane idea. However, following the dictum “Buy low, sell high,” now might be the perfect time to buy. Many popular markets such as Phoenix and Las Vegas remain depressed; overseas investors might look for bargains in troubled economies such as Irelandand Greece. The news has been filled with stories of speculators snapping up single-family houses in Detroit for under $20,000, renovating them at low cost, and immediately renting them out for $800 a month.
Obviously, this is not a business for the faint of heart, and it requires substantial seed money. You’ll need to do extensive research, and if you become a landlord, your work will be ongoing and often stressful. However, with any luck, you might do better than simply earn “extra income”; you may find yourself accruing substantial wealth!
3. Trade Stocks.
For those who enjoy taking a little risk, stock trading can be enjoyable and lucrative. Open a brokerage account with a discount broker — you shouldn’t be paying more than $10 a trade, and many online brokerages such as Scottrade and TradeKing are considerably less. (Note that broker-assisted trades involve additional costs.) When picking stocks, don’t just follow the latest trends — do plenty of research, target stocks you’d like to own, and establish target “buy” prices. Don’t fall into the habit of day trading — you’ll rack up excessive trading fees and will likely lose money. Buy stocks for the long haul, and if prices then go up, sell only part of your holdings.
No one can predict market performance, and the money you put in the stock market is at risk. Have a substantial portion of your portfolio in blue-chip stocks that pay dividends, so you’ll have income even if stock prices fall, and — most important — designate only a fraction of your total nest egg toward your trading. If you make bad choices or if the market tanks, you don’t want to lose your entire savings.
4. Open a Bed and Breakfast.
If you enjoy entertaining and cooking for other people, then a bed and breakfast might be just the right retirement occupation for you. Start-up costs will be substantial — you’ll need a large house with several bedrooms in a community popular with tourists, so real estate alone might cost you $1 million or more. Plus renovation. If you have to purchase the property and are starting from scratch, it’s unlikely you’ll see a net profit in your lifetime, but you can convert a sum of cash into an income stream and leave a valuable legacy for your heirs.
Finding the right community can be tricky — the most popular seaside or mountain resort towns are already chockablock with bed and breakfasts. Follow trends and try to identify the “next big thing,” whether an as-yet little-known mountain community or a beach town that somehow people haven’t quite discovered yet. And market yourself extensively. If you’re in a smaller, undiscovered location, then target independent travelers looking for quiet destinations. Offer something unique (and delicious) in your menu to set yourself apart from your competitors. Put together a bang-up website and get listed on popular traveler sites such as Trip Advisor. Eventually, if you have a good product, word of mouth will work for you, but be prepared to lose money for some time before that happens.
5. Convert a Hobby into a Business.
During our working years, it often happens that we simply don’t have time to pursue a favorite hobby. If you’re retired and can now pursue your hobby full-time, is there some way to draw an income stream from it? If your hobby involves making something — whether lace doilies or birdhouses — then start selling your creations. If you’re an amateur painter, then start displaying your work at local galleries, where people know you — you’ll make some sales locally, at least from friends and acquaintances. If you collect model trains or die-cast collectible cars, then start trading them.
Your new business can be as lucrative as you wish, depending on the effort you wish to expend. However, if converting a hobby into a business takes all the pleasure out of it, then look elsewhere for your income.
Working in retirement does not mean continuing with your high-pressure career in some fashion, or settling for drudgery such as serving fast food or cleaning houses. You can do what you love to do and earn money doing it. Just think creatively — think outside the box — and soon you’ll have that extra income you need to be comfortable in your retirement.