• Home
  • Millionaire Minter

Having a Side Hustle Can Make You a Millionaire

Am I Meeting My Goals With my Side Hustle?

What is a Side Hustle?

You may have heard or read about the term “side hustle” in the last few years or months and wondered, what is that? Well, a side hustle is any sort of way to make money outside of your regular day job. You will read about stories of individuals who have made significant sums of money through a side hustle and learn many ways to make money part time or on a commission basis by doing things such as survey completion, freelance writing, answering online questions, mystery shopping, joining marketing groups, etc.

What Can a Side Hustle do for me? 

Having a side hustle can do a few things for you. If you find something you enjoy, it can offer a creative outlet, which can provide additional satisfaction and relaxation in your life. It can offer a way to make substantial sums of money if you are truly invested and continue to work hard, putting in significant effort to passionately grow the side hustle into a full blown business. It can also offer a way to make some part time money to pay for individual items (saving for a vacation, car, etc.) or it can provide you with extra money to invest for long term growth and wealth (for those looking to become millionaires and beyond).

Is a Side Hustle Right for me? 

A side hustle may or may not be right for you in my opinion. Depending upon what your goals are, and your present work situation. Perhaps you could gleam more value in your present career by putting in more time at work, finding ways to bring your employer more value. One problem which can occur with side hustles is having too many and by being so spread out or spread thin, the only money being made with side hustles is not too significant and may never give you the type of freedom you want or income you want (if your true dream is to have financial freedom, free up your time, become a millionaire, grow long term wealth). If you are running from side hustle to side hustle and only making a few hundred here and there and not able to invest it to grow your wealth, and don’t feel that one of those side hustles is growing into a long term underlying business that you can continue to develop, then perhaps you should reconsider. By refocusing and either limiting your side hustles, or finding one that may grow into a long term business and focusing more on that, you may hit your goals faster and develop real cash flow to get to your target sooner.

Invest Your Side Hustle Money Automatically

Why You Should Side Hustle for Money to Invest

A side hustle takes your valuable time and effort just like most ways of making money do. Therefore, wanting your side hustle to grow or turn into a larger income stream, or using it as a way to grow your wealth makes more sense to me than just as a way to pay for extra things (eventually we all learn that just having extra stuff does not make us happy long term). Although it is important to earn enough money to pay your bills, and to learn to live on less, or even better, completely without carrying a debt load (i.e. saving for things in advance), the entire purpose of a side hustle (a way to earn income in addition to your job) is to make extra money. This extra money can then be used to either achieve instant gratification in purchasing something you have been wanting for a while, or it can be used to help push you toward a larger goal of financial independence, financial freedom, an earlier retirement, growing a business, having enough cash flow to quit your job, becoming a millionaire, etc.

One of the best ways you can use this extra money is to invest (absent needing to put that money back into the business to continue to grow the business if that is your plan, as growing a business can also be an incredible way to build wealth for some). For example, let’s say you are making an extra $250 per month in side hustle money. You can automatically invest in a mutual fund with T. Rowe Price, or another company. This money can then earn additional interest every year and the growth will continue. If you have started early enough this can grow into a substantial sum. However, just to be clear, tax advantaged accounts should always be prioritized first (401k’s, IRA’s). If you don’t have one and are considered self employed for purposes of your side hustle income, you can simply and easily start a SEP IRA with a number of big financial firms and then put in money tax free. Taking advantage of tax free compound growth is one of the best ways to build your wealth long term, or to make your way to financial freedom in retirement.

Conclusion

Having a side hustle can be very beneficial, but based upon your individual goals it is important to determine whether the side hustle(s) you choose are serving your purposes or not. If you have too many which take too much time and you are not planning to build them into a long term business, make sure you are investing for long term wealth growth. Ensure you are working toward your goal of financial independence or financial freedom if that is the path you choose. Remember, it only takes $50-$250/month to start auto-investing (Acorns, T. Rowe Price, etc.) so you can build wealth without significant effort, it just takes time. Use your side hustle to build a better life long term. Don’t lose sight of your overarching goals so you will get where you want to go.

Should You Roll Your 401k Balance Into a Self Directed IRA?

A Self Directed IRA Rollover Can Allow for Individual Stock Investments and Purchase of Low Cost ETF’s.

Why Should I Rollover my 401k Balance Into a Self-Directed IRA as Opposed to my new Workplace Plan? 

If you are leaving your old job and transferring to a new employer, chances are you may have accumulated a retirement plan balance (hopefully), and will need to determine what to do with that balance at some point after you leave. Typically the old plan will only allow you to leave the funds with them for a period of time before they either charge additional fees or send you a check (indicating they cannot retain your funds within their plan). You can then either roll these funds over to your new employer’s plan, or start a self directed IRA with a number of large investment brokerage houses who would be happy to open the account and offer you a wide array of investment choices. Some of these brokerages include Merrill Edge, Fidelity, T. Rowe Price.

One of the biggest questions you may have about doing so is what benefits would there be to rolling over into a self directed IRA versus putting the money into the new workplace plan? In some cases, there will be little difference (as some plans offer their employees a wide array of investment options including individual stocks, and etf’s within their plans). However, in other cases, there is a large difference as the new employer plan may offer very limited investment choices (a handful of funds to choose from which may charge excessive or low maintenance fees). Although sometimes it can make life easier to consolidate financial accounts, the choice of rolling over into a self directed IRA is not one that should be overlooked. A self directed IRA allows one to invest in individual stocks and ETF’s, thus a wide array of investment options with varying amounts of risk and varying fees. However, if your new plan is restrictive and only has funds with higher annual maintenance fees or not a great track record of past success in terms of annual returns, a self directed IRA would fix this.

What You Need to Know about Rollovers
An IRA-to-IRA rollover occurs when you take an IRA distribution in your personal possession and deposit the funds and/or assets back into the same type of IRA within 60 days of the date from which you received the funds. Returning the funds back to the same type of IRA allows you to avoid tax on the distribution and a 10% penalty tax. These will commonly need to be completed upon leaving a job or transferring from one company to another. Your old plan will typically allow a period of time where you may retain the funds with them, after that you will need to move it or possibly incur additional fees, eating up your account equity. You will then have the option of rolling over your old 401k or IRA to your new employer’s plan, or you can roll your 401k over into a self directed IRA.

Rollover IRA – 3 Easy Steps
Rolling over a previous 401(k) or existing IRA to a self-directed IRA.

  • Open a Self-Directed IRA,
  • Rollover your IRAs to the newly opened account,
  • Choose your investments.

 

When does the 60-day period begin?

Generally, a rollover of cash or other assets from one retirement account to another is a tax-free distribution to you as long as you deposit the cash and assets distributed into another IRA. This type of deposit is considered a contribution or you may have heard this called a “rollover contribution.”

The rollover contribution must be deposited into the IRA by the 60th day after the day you receive the distribution from your IRA or your employer’s plan. The day following the day of receipt is considered day one. There are no rules with the IRS granting an extension of the 60-day period if the 60th day falls on a Saturday, Sunday, or legal holiday. It is safest to count sixty calendar days from the time you receive the funds and assume there are no exceptions to which the 60th day falls. Generally you will want to simply complete the transfer as soon as possible to leave nothing to chance. You don’t want to be in a position where you are disputing the IRS as to the 60 day window.

Remember: The date the funds were disbursed and sent from the IRA does not start the 60 day period. It starts on the 60-day period. If the rollover is not completed within 60 days, the portion of the distribution not deposited into an IRA must be reported as income for the calendar year in which the distribution occurred.

What type of tax forms will I receive when I do a rollover?

A 1099 tax form is issued for the distribution and the receiving institution reports the rollover on a 5498 tax form. If the rollover is less than the original distribution amount, you must report the difference as part of your federal tax return. Funds that are not deposited into an IRA as a contribution are considered income. Taxes and penalties may occur if you do not meet the distribution requirements for the type of IRA you hold.

 

How many times can I do a rollover for my IRA funds/assets?

You are allowed to do one rollover per 12-month period per IRA. The 12-month period begins on the date you receive the funds/assets, not the date the funds/assets were sent to you from your IRA custodian. The 12-month period does not start on the date you return the funds/assets back to the IRA as a contribution.

If a second distribution is made during the 12-month period it will not be eligible for rollover. This means the distribution is a taxable event and is subject to the 10% penalty tax, if applicable. In addition those funds are invalid to deposit to the account as a rollover contribution. They will be treated as a regular contribution for the current year, which result in an excess contribution.

Conclusion: 

A self directed IRA is a good option when leaving a prior job and should not be overlooked. Rolling over into a self directed IRA would maintain the tax free status for the period with which you are investing and growing said funds (prior to having to withdrawal funds at 70 1/2 years of age (or upon retirement). Rolling into a self directed IRA would also provide a broad range of investment choices if you chose to do so with one of the large brokerage firms which offer a self directed IRA. This can be a very important reason for rolling your funds into a self directed IRA as you may very well want to invest in individual stocks (in a tax deferred retirement account) allowing for a higher risk/higher reward scenario, or simply want the choice of investing in more low cost funds or low cost ETF’s (which you do not have the ability to do in your new plan).

 

 

Investing in Robotics & Artificial Intelligence

How Can I Invest in the Future of Artificial Intelligence? 

You may have read a technology article, or perhaps your work involves some sort of artificial intelligence component, perhaps you have been looking at trends in the workforce and wondering whether your industry will someday be replaced or shrink due to use of robotics and artificial intelligence. In recent years there has been a growing notion that at some point that the landscape of the workforce will change. Many industries could be replaced or shrink the workforce due to use of machines, robotics, and artificial intelligence. We have seen since the 1990’s how rapidly technological advances can occur and the radical changes they can make. Therefore these seem to be legitimate concerns and it seems to be an area of opportunity for investors who have foresight and are looking to profit from the long term trend (in my humble opinion of course).

One way to invest in this trend is through an exchange traded fund by the ticker symbol (BOTZ) Global X Robotics and Artificial Intelligence ETF. This ETF has over $2.44 Billion in assets. The investment seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Robotics & Artificial Intelligence Thematic Index. The fund invests at least 80% of its total assets in the securities of the underlying index. The underlying index is designed to provide exposure to exchange-listed companies in developed markets that are involved in the development of robotics and/or artificial intelligence as defined by Indxx, the provider of the underlying index. The fund is non-diversified. Additionally, as with other ETF’s there is a maintenance fee of .68% here (which is in line with other similar ETF’s; also please note that ETF fees are typically lower than corresponding mutual fund fees). As you know, fees are an important consideration for any potential investment involving ETF’s or mutual funds and should always be considered. Overall, BOTZ seems to be a great low cost investment to speculate on the future, or growing trend of robotics and artificial intelligence.

 

 

Why I Bought More Tron (TRX) at $.038 cents


Why Did I Buy Tron(TRX) at $.038? 

First of all, it’s one of the cheaper top 20 coins (those with the highest market caps). Is this a great reason to buy either a coin or a stock? No, as whether something is truly cheap in relation to its competitors must be based upon some underlying rationale such as it having a lower PE ratio, etc. Here there does not appear to be any such rationale. In fact the opposite may be true, as the overall market cap for TRX is around $3-4 billion at these prices, Meaning if you believe that the overall market cap cannot or will not exceed that of Bitcoin (the coin with the biggest market cap) TRX may not have much room to run from its present .038 or so, possibly to $1, maybe $2 if the market really heats up. However, based upon the fact that there has been much irrational exuberance surrounding the overall cryptocurrency market fairly recently (within only the last few months; with Bitcoin hitting a high of over $19,000 in December 2017) I think there is a good chance that TRX could make a bit of a run if the overall market goes on another run up possibly to $1-2 and maybe more. I can’t provide a specific target, but it previously hit a high of around $.36 cents and I believe it will exceed that target at some point in the next year or two, should the overall market run up.

Second, TRX has many upcoming possible catalysts including its Beta test launch, release of its Main net, and a coin burn (the effect of which is unknown) coming up at the end of March and May 2018. These potential catalysts provide potential investors with a huge potential opportunity to profit. Is there downside potentially? Yes, it is possible that TRX could go down as it was in fact much lower a year ago (it has run up in excess of 1,000% this past year). However, my personal opinion is that if the overall market heads up, TRX has the potential catalysts in place to send it flying much higher, and I believe it’s worth risking a few thousand dollars. $3,080 the other day would have bought 100,000 coins. Meaning you would then have $50,000 if the price of the coin went to $.50 (remember this shot up to $.36 in December briefly). To me, that seems to be an acceptable risk to reward ratio.

Finally, of all the coins out there, TRX is the one created and run by Justin Sun, a protege of Jack Ma (Alibaba Founder and Billionaire). Justin Sun has previously created and runs PeiWoo, a successful online venture with over 10,000,000 users and has a huge support base. His track record of success and his dedication to this company so far, along with the investment in talented internet professionals who are working on development of the underlying technology makes me feel this is a better investment than many of the no name coins out there which are simply trying to take advantage of the irrational exuberance surrounding bitcoin (those with no technological background or track record for success). Why would anyone invest in those coins? I find it hard to understand. I do however, think that Justin Sun, can and will produce something favorable for investors here and is dedicated to this company.

Conclusion:

TRX is a risky, speculative investment, as is any other cryptocurrency (there are regulatory risks, etc.). However, within the overall cryptocurrency market it is an excellent choice, run by a founder with a successful track record in the technological arena. It also has many positive catalysts coming up which in favorable market conditions will send this coin much higher. I have purchased at various stages with an overall price of .075 cents. at present the price is at .0478. The overall risk to reward seems acceptable to me and I believe it is worth the risk for anyone willing to make a bet and potentially lose a few thousand, there is a decent chance of profiting well in excess of the money invested here.

Why I Don’t Diversify My Investments


Why Don’t I Diversify My Investments? 

The simple answer is that i am attempting to go for excessive returns and have made the decision to take on the risk that one losing investment could wipe out a significant portion of my investments. My rationale being that even if I lost everything I have sufficient income to replace what is lost and sufficient time prior to retirement where i can still go back, replace losses, invest in a safer/diversified manner and end up with a sufficient amount to retire well. Without this I would never take on the levels of risk that I do.

What is Diversification?

Diversification is the process of spreading out your investments into various asset classes and sectors and spreading them among investments even within the same asset classes or sectors as well to ensure your portfolio is not subject to too much risk of loss from any one investment. The idea is to lessen the risk of one bad investment wiping out or depleting a significant portion of your assets. Diversification reduces risk (of exposure to significant loss from any one investment). Thus this increases your chances of having a successful long term investment returns as opposed to losses. Diversification is always recommended and is one of the bedrock financial principles that financial advisors will recommend. They do so for good reason. Most individuals don’t want to risk losing there entire portfolio from one bad investment and feel they could not recover from the same.

What is My Risk Tolerance?

People also have very different levels of risk tolerance (meaning the amount of ups and downs in the market they can handle). Some have very minimal risk tolerance (and would be extremely upset with any dip 1%, 3%, etc. Others, such as myself, can handle dips of as much as 20-30% or more without losing any sleep. Its not that I like the feeling of losing money, i just think about things differently. If I choose to invest in something, its because I believe in it and understand the risks involved. I know ahead of time what the possibilities are and what I am willing to risk. This makes me extremely comfortable. Yes, sometimes I get upset if things aren’t going my way, but i do not panic as I knew this was a possibility and don’t risk more than I’m willing to lose. What is your risk tolerance? This is something to think about before ever investing a dime. You don’t want your emotions throwing off your entire investment plan and causing you to make sudden and harsh decisions that could affect you for a long time to come. For example, within the last two years I owned over $100,000 worth of SWKS stock, and watched it dip down to $60/share from a high of $113/share. i held because this is a long term investment, which i want to grow over time. Had i panicked and sold at $60 I would have lost a good amount of money. instead, I held on, took my dividend in the meantime, bought more while it was lower, and still own these shares which again recently traded as high as $115/share and have paid another dividend since the big dip.

What Happens if I Don’t Diversify My Investments? At this point in my life I personally choose not to diversify my investments. I hold for periods of time, heavily concentrated positions with the belief and hope that the investments will go the way I want. This is a very risky proposition at times due to the heavy concentration where one bad investment could create a substantial loss for my overall portfolio. However, I am aware of these risks and yet i continue to do so….Why? i am not at the level of wealth I want to be at. i have used financial calculators and estimated how much wealth i could have in 30 years from putting away a certain amount each month and investing at the historical rate of return 7% of the stock market. In doing so, I have seen that this plan could net me a significant amount of long term wealth and I will have financial security, it results in quite a bit of money. However, this is not the story I have painted for myself and i am at a point in my life where I make a good amount of money and feel that I am willing to take on more risk of loss in the present (for at least a few years, as much as the next 5 years or so) to attempt to achieve higher than normal returns on my investments. Once i attain a certain level of wealth (if I am able to do so) I plan to allocate or diversify some to push more of the wealth toward a safer and less volatile method of wealth building.

To support my position on wealth building by going against traditional diversification advice, I must point out that one notable, famous investor, Warren Buffet who is considering one of the world’s premier investors, has for many years gone against traditional investment advice, sometimes having as few as a couple of investments with billions invested in each. Warren Buffet has also been confident in himself and his investments and their long term potential, never worrying about the ups and downs and only focusing on the value he saw in the underlying companies (basically indicating to ignore market fluctuations if you own a quality company and know there is value there, the value will eventually come through to the stock price). That being said, Warren Buffet is a smart guy and as a value investor, does not buy companies which are not solid financial investments. He has been known at this point to make some very shrewd deals, including getting government guarantees on his financial investments during the financial collapse around 9 years ago to invest in and support the rehabilitation of a large well known financial institution.

Examples of What Could Happen With and Without Diversification

To illustrate, mutual funds are typically considered to be diversified investments, although for true diversification you would need to invest across various asset classes to reduce risk of any one area harming your overall portfolio significantly. However, using the mutual fund example, let’s say a typical mutual fund in a great year makes 25%, with a downside risk of 15% tops. in a bull market, investor A buys $10,000 worth of a Mutual Fund and makes 25%, he then makes 15% the next year, and 20% the third year as the bull market rages on. He started with $10,000 and now has $17.250 after 3 years. Quite a return and he/she is extremely thrilled. As he was well diversified he was risking a downside of at most several thousand dollars a year and has achieved a significant return, almost doubling his money. Now let’s look at a more risky investor, Investor B buys $10,000 worth of GBTC the bitcoin ETF this year. This is an extremely volatile investment which some say will go to $0, others say will double this year. investor B gains 100% in year 1, gains 40% in year 2 and gains 50% in year 3 and ends up with $42,000. These are fairly extreme examples, but quite possible if one invests a substantial amount of money in one growth stock for a period of 3 years. However, the risk of losing the money for investor B is much greater as well. Growth stocks and GBTC for example, could lose value of as much as 80% or more in a matter of months or a year. If you took the example of investor B and had him/her lose 80% in year 2, the portfolio would have been down to $4,000 (even after being at $20,000 the year before) and only $6,000 at the end of year 3 despite having a 50% return that year. As you can see, more risk equals more potential for higher returns, but also more potential for higher losses. You have to be willing to lose money to invest that way.

My Risk Tolerance

I presently own a large stake in Skyworks Solutions over $100,000. Could it falter? yes. Could it go much higher? I believe so. Am I willing to take the risk? Yes, as i believe it is a good company in a good market with lots of growth potential and can withstand the ups and downs should the stock falter some. I strongly believe over time my investment will grow in value and this conviction keeps me able to withstand the ups and downs. Only time will tell how SWKS will do, but I believe it’s a good company and it’s balance sheet shows that it is a strong company with very little in the way of liabilities compared to the tremendous amount of assets on hand, including over a billion in cash.

Conclusion:

Should you diversify? Typically yes, but this is a personal decision which depends upon your age, income, whether you can sufficiently replace any significant losses with time to recover enough prior to retirement to the point where taking on the extra risk at your current stage would not lead to complete and utter financial ruin for the rest of your life. I think everyone should take on some risk to be able to grow long term wealth, the only question is how much, and that depends upon many factors including risk tolerance, and the ability to replace lost income should things not turn out the way you want.