MONEY 101: HOW TO SUPPLEMENT YOUR INCOME
In the first article of this series, we explained how to make sense of your payslip. If you missed it, that article and the rest of this series will be available on Finweek.com.
I f ever y t hing on your payslip pans out, you might f i nd you stil l aren’t saving as much as you’d l ike to. This week, we share a few ideas on supplementing your income and look at the tax implications of doing so. If you don’t earn a salary, any of these options can be applied to a small business, but t he ta x i mplications might differ. Consult a tax expert to help you navigate the pitfalls.
BE BRUTALLY HONEST
Before you set out to find more money, ask yourself whether you aren’t living above your means. Finweek investment expert Simon Brown’s top t ip for becoming wealthy should always be front of mind: spend less than you earn, invest the difference. Whether you’re overspending on luxury items or buying groceries that end up in the bin, there’s always more room for savings than you think.
Rory Sim, f i nancial planner at Lifestyle and Wealth Management, agrees that reducing your lifestyle costs and understanding the opportunity costs of your purchases should be your first point of departure. “A lower income requires less capital to retire, but if you save all your additional free cash f low, you can retire earlier,” he says.
Once you have your spending under control, ask for a raise before taking on more work, advises Sydney Sekese, a certified f inancial planner. “Even in a tough job economy, sitting down at the bargaining table with politeness, confidence and respect for yourself and the organisation can have great benefits,” says Sekese.
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If a raise is out of the question, you have two options to supplement your income: sell your time and skills or put your assets towards earning an income.
TIME AND SKILLS
Selling your time is often the easiest way to supplement your income because you don’t need anything but yourself to get started. You can sell services within your current skill set, sell your hobbies or choose something that requires no formal qualifications. Sim and Sekese recommend considering the following options:
▶ SELL YOUR CURRENT SKILL SET: Your expertise might not be worth an increase to your boss, but that doesn’t mean other companies or start- ups can’t benefit from your skills. Consulting or freelancing for other companies can earn you a fair bit of i ncome, but be sure to get approval from your current employer to avoid inadvertently breaching your contract.
▶ SELL YOUR HOBBIES: While you probably need a li t tl e money to get started, Sim says that selling your hobbies can earn you a little additional income. “If you like baking, bake cakes for friends and family. If you like cycling, do reviews on bikes and components, and sell them.”
▶ GET AN ONLINE GIG: All you need for online jobs like testing websites, capturing data, writing reviews or doing transcriptions is a personal computer and an internet connection.
▶ TUTOR: Says Sekese: “If you excelled in maths or science at school, there i s a huge market for parents and children looking for private tutoring. This will go a long way in improving t he s ki ll s gap t hat i s currently prevalent in South Africa.” This is not limited to helping children. Sim says you can help anyone learn new things or improve current skills. Consider becoming a business coach, coaching a sports team or teaching people how to trade on the JSE.
Also consider lower-paying options like baby or petsitting, bartending or becoming an Uber driver. If all else fails, get married. Sim says dual-income families will always be able to save more, just make sure the wedding doesn’t cost a fortune.
You can supplement your income by putting the assets you already own to work or by selling your assets.
▶ GET MORE I NTEREST ON YOUR
SAVINGS: The money you’ve saved so far could earn you more money. Shop around for savings products that offer high interest rates or open a tax-free savings account. We’ll have more information on these options in later articles.
▶ CAR BRANDING: Some companies will pay you to brand your car using their logo. A quick Google search will put you in touch with service providers.
▶ SELL YOUR WHITE ELEPHANTS: Most of us have fallen victim to a slick salesman who sold us a product we didn’t really need. Once you get over the embarrassment, sell these items on online platforms like OLX or Gumtree. Traditionalists can hold a yard sale. ▶ VALUE YOUR ANTIQUES AND COLLECTIBLES: “Get your collectibles and antiques appraised. You may be selling rare valuable i tems at underpriced rates without knowing it,” says Sekese.
▶ SHARE YOUR SPACE: Whether you take on a tenant or rent out your extra space for a few nights using Airbnb, your property can become a great source of income.