MONEY 101: HOW TO SUP­PLE­MENT YOUR IN­COME

Finweek English Edition - - FRONT PAGE - BY KRISTIA VAN HEER­DEN

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.

UP-SELL­ING

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.

We are of­ten paral­ysed by the idea of in­vest­ing, but be­com­ing a suc­cess­ful in­vestor starts long be­fore you make your first in­vest­ment. In this se­ries of ar­ti­cles, Finweek draws up a road map to get you from fi­nan­cially flus­tered to in­vest­ing with con­fi­dence.

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.

AS­SETS

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.

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