How to manage crypto investing risks for new investors

Tara Investing in Cryptocurrency August 25, 2021October 18, 2021Decentralised Finance, Financial freedom, financial independence, investing in cryptocurrency

It seems like everyone in crypto has a war story they like to tell about the time they lost a bunch of coins because of some rookie investment move. But I think the one about UK IT Engineer James Howells who dumped 7500 Bitcoin on a hard drive back in 2013 takes the cake. He lost a measly $361 million at today’s Bitcoin price. The moral of the story for the crypto uninitiated? Losing your coins is just one of the many crypto investing risks for new investors. So before you invest your hard earned into the space, we’re here to help you get informed on what it takes to invest successfully in crypto and get to financial freedom.

Hopefully you come out the other side of this article with the know how to bag a fat stack of coins and to keep them.

What do we mean by cryptocurrency investing?

As a new crypto investor, it’s likely you’ll start off with more straight forward types of crypto assets so we’ll focus on those. By crypto investing, we mean investing in cryptocurrency projects that have associated coins and tokens.

We also mean investing in Decentralised Finance products and services to earn interest on your cryptocurrency assets.

We are not talking about complex crypto day trading, margin trading, futures trading or options trading.

Is crypto risky?

Yes it is. It’s new technology and the market is largely unregulated. Crypto assets are also non-custodial. These features can heighten crypto investing risks for new investors if you don’t understand the investing landscape.

However, we would argue it’s also risky NOT to invest in crypto!

Cryptocurrency, in its decentralised and non custodial design, aims to be an alternative to the awful global monetary and financial policy we’ve suffered since the GFC. Crypto is also about more than the coins themselves. It’s about disruptive technology that is here to stay and that we think will shake out some large industries, with finance being just one.

The point we’re making in this post is that you can still invest and manage risk. That’s why we’re sharing everything we’ve learned and do to identify and manage our crypto investment risk exposure.

Know before you invest in crypto that you are in control and that’s the way the ecosystem is designed! No-one is responsible for actively managing your assets and your investing risks but you.

Is the risk worth it? It has been for us because it’s still early stages and we argue the technology development curve is yet to hit exponential growth. But you make up your own mind, hopefully after considering the risks and how to manage them.

Why do you need to know how to manage crypto investing risks?

Because cryptocurrency is non-custodial and decentralised. There are no middle men to transact for your or look after your assets. You need to do this yourself and if you don’t understand how to manage the risk of being custodian of your own money, then it’s likely you’ll fail at that important task.

Besides, there is little to no regulation to fall back on if something happens to your coins. There are no government bank guarantees and very few consumer protections in crypto. And that’s the way the industry likes it. It’s an asset class designed around non-intervention of governments and middle men. All of this means you have to know how to take care of your assets yourself. The way it should be!

If you are a first time cryptocurrency investor, you’re probably new to crypto market idiosyncrasies. Have a read of this post about what makes cryptocurrency prices rise and fall. If the concepts are new to you then it’s super important that you learn how to manage risks because your risk profile is high as a newbie investor.

Risk comes from not knowing what you’re doing.
Warren Buffet

You also need to know how to manage crypto investing risks because as an asset class crypto is potentially one of the greatest asymmetric investment opportunities out there right now. Asymmetric investments are when you risk a small amount of capital for the opportunity to earn much larger returns. This is entirely possible in crypto – we’ve seen it ourselves.

13 crypto investing risks for new investors and how to manage them

Here are our top 13 crypto investing risks for new investors and how to manage them:

Price volatility – price swings in the double digits daily
Illiquidity – you buy in to an asset but can’t sell it when you need to because trading is too thin
User complexity – technical complexity of blockchain transactions for new users
Crypto exchange crashes – platforms go down with your crypto on them
Project collapse – and the associated coin and token goes with it
Hard Forks – a project splits and so does the value of the coin or token
Smart contract failure or hack – hacks are rife and often unrecoverable (or at least uninsured)
Regulatory risk – risk of non-regulation and new regulation
Human error – goes with the technical complexity of crypto
Market manipulation – whales throwing their weight around causing prices to pump or dump
Theft or hack – physical or cyber, how do you protect yourself?
Scams – mostly online and completely insidious, millions have been lost this year alone
Rug pulls – DeFi fly by night operators absconding with your treasured coins

Now read on to learn about each risk and how you can protect your crypto assets….

1. Price volatility

The price volatility of crypto is enough to put hairs on your chest. But what is price volatility anyway? Investopedia sums it up as the range of price change a security experiences over a given period of time. Now check out this epic chart from the guys at Trading View showing Bitcoin volatility over two historic market periods – 2017 and 2021. Price corrections of between 20% and 50% are run of the mill for BTC.

It’s worth understanding in context that Bitcoin is less volatile than other small cap coins. So you get the picture – volatility is real in crypto with coins capable of moving hundreds of percent in a day. If you can’t take the heat stay outta the kitchen.

But what are the actual risks of price volatility for an investor? Good question right! The price may move up or down dramatically, but this can be as beneficial to investors as it is risky. It all depends on your entry and exit as well as your investment horizon. If you buy the dip, then price volatility can be totally fly. But if you buy the top it can crush you.

Here’s how to manage your risk

Learn how to read a price chart and charting indicators. Understand from the chart what part of the market cycle you are investing in. If you have a clear view of this, short term volatility is less draining emotionally. For example, if you’re riding a mark down phase (which would be dumb, but it happens) you’re going to be more worried about price volatility (compounding losses) than you would if you’re in a mark-up phase.

Traditional market cycle – knowing what phase you’re in can help you manage short term price volatility.

Set an investment plan before you invest. What is your aim and your timeframe? What is your break point?

Use trading tools like stop losses to avoid price crashes if you’re not investing for the long term.

If you’re an anxious investor, set your stop losses and don’t check your coins every other day! In crypto there’s ‘weak hands’ – investors that don’t have the conviction of their investment plan and sell out with price weakness, which is inevitably selling at the wrong time. There’s also ‘diamond hands’ – investors who are undeterred by large swings in price.

Which one are you?

2. Illiquidity

Crypto has a low barrier to entry which means that new projects, with their own coins and tokens, are popping up all the time. Some crypto assets, particularly the new projects with micro or small market capitalisation, are traded very thinly. If you’re looking to invest in these projects there’s not a lot of volume. This all means it can be hard to find a buyer or someone to trade with if you want to sell or swap your investment. Particularly if you’re selling at a volatile time.

Here’s how to manage your risk

When you buy a crypto asset, ask yourself “Will i be able to sell when the time comes”? “What is my exit strategy?”

Buy assets that are well traded on exchanges with large volume. This may prevent you from buying some micro caps that are only available on smaller centralised or decentralised exchanges. But that’s the risk mitigation bit in force. If you do buy thinly traded crypto you should understand how to time your exit and sell in small amounts, such as by using bots, to offload your investment. This is also good practice if you have a bag full of the asset and you don’t want to tank the price as you sell down your holdings.

3. User complexity

Crypto is still an early adopter asset. The technology is nascent. This means it’s not necessarily user-friendly to transact with. I remember the first time I sent some crypto through cyberspace I was freaked out. I only sent $100 worth because I wasn’t sure I’d done it right and didn’t trust the technology. But the crypto arrived and the rest was history.

Seriously though, if you ask any crypto investor the first time they put money into a new product, service or protocol there is always that nervousness about how to make it work. Seeing your money disappear into cyberspace when you’re not completely sure it’s going to reappear where you want it to can be heart stopping.

The thing to understand is that crypto transacting is different to bank transacting. It uses different processes and technology and you have to get used to that. Banks have had years to perfect the simplicity of their services (and many still haven’t got it right). Crypto on the other hand has been around for a couple of decades and until 2020 has been the bastion of super brainy IT nerds and tech savvy gamers. There’s been no driver until now to make it user friendly and that means in most cases it’s still involves a learning curve.

Here’s how to manage your risk

The best way to overcome user complexity is by learning the technical and market basics.

Read up on the information we have posted about how to make money with cryptocurrency here and here. Follow these tips on managing risk as you learn the ecosystem:

Crypto investing – Use the financial service providers you do know – like Paypal – to start investing in larger cap crypto assets like Bitcoin. Paypal provides an ‘on-ramp’ to crypto that many people will recognise and be able to use easily on first attempt. If you do use these conventional on ramps to start your investing just know that you will be paying a premium on the exchange rate from fiat currency into crypto. Think of it as the price of convenience but once you learn how to navigate the ecosystem there cheaper ways to transact.

Making money with DeFi – start with Stablecoin interest earning products. These are simple to understand as they’re just like bank interest. The least complex way to do this to sign up for a Celsius account and download the app on your mobile phone. If you’re worried about where to buy Stablecoins like USDC and USDT, Celsius will let you buy them directly via credit card. They will charge 3.5% fee on the transaction, which is high in crypto terms. But they do offer 8.8% interest on your USDC and USDT once you have it.

Earning interest on Stablecoins means you’re not subject to the same price volatility as other crypto because these coins are pegged to the dollar. It’s just an easy to manage way to dip your toe in the water of crypto investing, but it’s not where the real money is made.

4. Crypto exchange crashes

Exchange crashes are rare but we’ve seen them happen at the most inopportune times. One very large crypto exchange went down right in the middle of a gigantic market dump in 2020 and all anyone could do was sit back and watch. Technical issues took them a couple of hours to fix but by the time the platform was up again the market meltdown had eased. It meant at the time that we were able to buy the dip on that exchange. Luckily we had other exchange accounts with some crypto in them that we could use to transact.

Here’s how to manage your risk

Keep your crypto hodl bag (the crypto you plan on holding for the long term) in a hardware wallet. If your assets are secure in your hardware wallet it means you have full control of them at all times. You can load them onto different exchanges at any time as you need to sell or swap.

Also, set up accounts on at least three different exchanges. Pick ones that are not all based in the same country (helps to manage regulatory risk). That way you have back up accounts to transact from when one exchange goes down.

We recommend that you set up separate accounts with Binance (largest volume, loads of coins), CoinsSpot (starter exchange for Australians), and Kucoin (micro and small cap coins).

5. Project collapse

When you invest on cryptocurrency you are investing in technology projects, run by teams of talented developers, cryptographers, programmers, and so on. Just like any project, crypto projects can collapse if teams implode or important personnel leave the project. Or maybe the project was based on a dumb idea, poor tokenomics or flawed code. This article from the Fool indicates more than 2000 cryptocurrencies have failed. If a project collapses, that’s usually the end of the associated coin or token.

Here’s how you manage your risk

This is a tough one to manage. You can of course keep your investments to well known projects with substantial funding and strong tokenomics. If you do want to invest in some true speculators then your risk management options are all about early exit. Keep your ear to the ground on Twitter. Follow the project and the crypto news. You’re aiming to get any adverse news about the project before it hits mainstream and tanks the price.

6. Hard forks

Many decentralised crypto projects use consensus models to govern project development. Coin or token holders can vote on key project decisions and consensus is sought. Hard forks can occur when there is no consensus on an important project decision.and the project literally forks in two different directions. Depending on their nature, hard forks can erode the value and adoption of a project’s coin or token, causing the coin’s price to decline.

Here’s how to manage your risk

Stay up to date with project developments on the project website. Understand any upcoming forks and their timing (they can take some time to play out) and make a conscious decision about whether you will divest, and when.

7. Smart contract failure or hack

Smart contracts are automated ways to handle value exchange between two parties, without involving a middleman, such as a bank. Because they are bits of code that execute in a decentralised way, they can be buggy and suffer from vulnerabilities like any other code.

According to this article from popular crypto exchange Coinbase, smart contract are susceptible to operational risk, implementation risk and even design risk. Poorly constructed smart contracts are also susceptible to theft by hacking.

One feature of the crypto ecosystem is that project teams offer bug bounties or rewards for tech savvy internet nomads to identify bugs within smart contracts so they can be fixed. Smart contracts can also be audited independently to try to identify vulnerabilities.

The real problem occurs when vulnerabilities are not identified and smart contracts with millions of dollars invested fail or are hacked.

Here’s how to manage your risk

Smart contract risk is an all or nothing deal, so the first rule is don’t put in what you can’t afford to lose. Be as safe as possible with your investment and due your own due diligence. Only put your money into smart contracts that have been audited and where the audit results have been made public. You can also get on reddit.com and see what other developers and programmers are saying about a particular protocol or smart contract. Some projects offer insurance on their smart contracts as a way to attract new investors, although insurance products like these are new to crypto and have not been put to the test.

8. Regulatory risk

Let’s face it, regulatory risk exists with every money making venture. You never quite know which direction government policy makers will pivot to next. But in crypto regulators are a quantum leap behind the 8 ball. In the US for example, government still hasn’t ruled on some of the most fundamental matters, such as whether crypto is a security or some other type of asset. This means the regulatory risk exposure is akin to highly speculative financial products. And it’s not just in the US. Around the globe there are crypto friendly governments, and some not so friendly. So how does all this present risk for your investments?

Firstly, rumours of regulatory action can cause FUD in crypto markets – Fear, Uncertainty and Doubt. FUD is market sentiment that can move the price action of a particular asset, mostly in a downward direction.

Real regulatory action can also move the market. Sometimes regulation moves the market up (if it’s crypto friendly) because having regulation in place provides certainty for investors. Sometimes regulation can cause a sell-off and move prices down if it’s perceived as punitive or as hampering development of the space

Here’s how to manage your risk

Keep up to date on crypto regulatory news from the US (as primary market) and from your home country in particular. If there is major regulatory change afoot you will hear about it on Twitter. Follow some crypto projects and personalities like Cameron Winklevoss, Michael Saylor or Mike Novogratz. Once you know about a potential regulatory change you can make your own mind up. Will it support crypto or will it hamper growth? This knowledge will help determine what you do with your investment.

9. Human error

This one goes hand in hand with the non-custodial nature of cryptocurrency. If you lose the private key you need to transact your crypto assets, you will need to have your recovery seed phrase at hand. If you have a particularly human moment and lose your seed recovery phrase, you’re done. That’s it. Drop the mic – your crypto is gone.

Here’s how to manage your risk

This one’s simple – do not lose your seed phrase!. Here’s how to go about it…

Keep your crypto secured with a hardware wallet.

Get a metal crypto wallet for the recovery phrase that backs up your hardware wallet.

If you don’t have a hardware wallet or metal seed storage wallet then you’re exposing yourself to cyber hack. We recommend this site – cryptowalletreviewer.com to find the best hardware and metal crypto wallet. We personally have the Ledger Nano X and the Billfodl metal wallet to keep our crypto safe.

Treat both your hardware wallet and your metal seed phrase wallet as though they are little bars of pure gold. Store them securely in different locations (never together).

10. Market manipulation

Ever heard of crypto whales? Whales are large holders of particular assets, for example Bitcoin whales or Chainlink whales. Whales can and routinely do use their large holdings to manipulate price action in crypto markets. So how do they go about it?

Whales can place very large sell orders at a price below other sell positions in the market creating volatility following which prices can fall. The falling price can then cause a chain reaction as stop losses set by other traders are triggered.

That’s just one example of how whales might use their coin bags to manipulate price in the crypto market.

Here’s how to manage your risk

Cryptocurrency blockchains are publicly viewable which means if you know how to read the data you can work out whether ownership of the coin is concentrated in the hands of the few. Coins with concentrated ownership are ripe for the picking by manipulative whales.If you don’t want to go through the laborious task of doing this analysis yourself or are not technically inclined, you can use Glassnode or CryptoQuant – blockchain analytics services.

Or you can do absolutely nothing – accept this risk as a part of crypto price volatility and move on. That’s what we do, along with not putting too much of our money into a single crypto asset.

Diversification in crypto is a foundational risk management approach – use it! Diversify across assets, across DeFi protocols, across exchanges, and platforms. Divvy up your investments into smaller bags that you could afford to lose if something goes wrong.

11. Theft or hack

There are two types of theft you need to manage risk for in crypto

Cyber theft or hack – just as it sounds, this is the theft of your crypto on the internet. It can happen to your directly – where coins are stolen from your online wallet – or through a third party like a crypto exchange or DeFi protocol. Exchanges and protocols are hacked regularly, with the latest being a $600 million white hat hack of PolyNetwork.
Physical theft – you might be wondering how physical theft can occur in crypto if your coins are non-physical objects. Ever heard of the “$5 wrench attack”? It’s basically where someone steals your hardware wallet and with it the private keys to your cryptocurrency.

Here’s how to manage your risk

Good cyber hygiene –
- keep your apps and operating systems up to date always.
- Use a password service like LastPass to manage your passwords.
- Make sure you have unique passwords on your home WiFi and modum.
- Use 2 factor authentication on websites and apps associated with crypto.

Use hardware wallets and metal crypto wallets – you don’t have full control over your coins if they are on an exchange. The best way to avoid theft via an exchange or protocol is to transfer your coins to a hardware wallet. If anything happens to your hardware wallet you can recover your coins with the wallet’s recovery seed phrase. This is why you also need a metal crypto wallet as well as a hardware wallet. A metal crypto wallet is an indestructible and secure place to store the recovery phrase for your hardware wallet in case you need to restore your crypto nest egg.

Proper physical custodianship of your hardware wallet and metal crypto wallet – keep them secure and apart. If one is stolen with the other your coins are gone and unrecoverable.

12. Scams

Scams in crypto are rife and understandably this is very off-putting to new investors. According to the US Federal Trade Commission, the most common crypto scams are:

Giveaway scams – members of particular online crypto communities get free coins if by send their coins to a posted wallet address
Bogus websites – with scam investment opportunities offering block buster returns using fake testimonials
Impersonators – Elon Musk impersonators have duped unsuspecting coin holders out of $2 million collectively
Online dating apps – used to lure people into cryptocurrency investments (yeah I know I can’t believe it either…)

Here’s how to manage your risk

Scams are a problem that you can overcome by knowing what you’re investing in and by doing your own due diligence. If you come into crypto understanding that it’s designed to be decentralised and non-custodial, you’ll appreciate that you alone are responsible for the security of your assets. If you get this, you’ll do your own due diligence and only invest in crypto with demonstrated real world use cases. You’ll accept that investing in anything else is either highly speculative or you’re at risk of being scammed.

Here are some tips to avoid getting scammed if you’re new to crypto investing:

NEVER send your crypto to wallet addresses sent to you in unsolicited emails, social media, group chat apps like Telegram and WhatsApp.
If you come across an ‘investment opportunity’ that seems too good to be true then it just is.
Don’t respond to unsolicited offers. If someone reaches out to you to join a crypto community or promote a killer crypto investment opportunity over social media, via email, in Youtube comments or in any message group forums it is likely a scam.
Make sure you have the genuine website or app. Fake websites, apps, groups or project profiles are a big issue in crypto. Type the web address in every time and don’t use autofill. Link to the project app directly from the developers website and don’t search it on Google Play or The App Store.

13. Rug pulls

A ‘rug pull’ is a phenomenon specific to decentralised finance (DeFi). A DeFi rug pull is when a team of developers disappear with all of the liquidity added by users to a particular DeFi Protocol liquidity pool. If you want to know more about DeFi lending and liquidity pools (and how to make money from them) check out our How to Invest in DeFi post.

Rug pulls and other types of DeFi exit scams are on the rise as more capital flows into the DeFi space with a reported $240M lost in just the first 5 months of 2021.

How to manage your risk

Avoid new DeFi projects – early projects is where the serious money is made, but it’s also where authenticity and legitimacy are questionable. At a minimum avoid low initial liquidity projects. Just like in the fiat world, scammers find it tough to raise large bags of initial capital for new projects.
Make sure there is a project whitepaper and read it. Compare it to other legitimate white papers.
Watch out for social media campaigns on tokens with claims of benefits that are too good to be true. Fake hype on Telegram and Twitter is a telltale sign.
Research the project – is the developer team transparent and known in the crypto community? If not, do you really want to trust them with your assets?
Get on to Reddit and research the token and the project and any red flags raised by other developers.
Check that there is an audit of the protocol by an independent know auditor. Audits are expensive and having one helps legitimise the project.
If you are more technically savvy, check the smart contract history on Etherscan or Polygonscan.
Watch the token price. If the price starts to tank, get your coins out immediately. Offload the scam token and get your valuable tokens back in to your hardware wallet!

How to be financially successful in your 20s

Tara Achieving financial freedom, Finance for twenty-somethings, Financial literacy August 13, 2021September 13, 2021Financial freedom, financial independence, millennial finance

Millennials are coming of age and changing the world as we know it. They’re about to be the most influential generation since the boomers. But they’re also facing strong headwinds. The pandemic has hit many young millennials in their peak earning years. Encumbered with historic public debt, rising home prices, stagnant wages and less money to spend, young millennials will need more financial nous earlier in life to get ahead. If you’re a young millennial and want to know how to be financially successful in your 20s, this post is written for you.

What does financial success look like in your 20s?

Success is all about achieving a desired outcome so let’s first establish what that outcome should be for your finances in your 20s. You can’t hit a target you don’t know exists right?

What success looks like for you will be personal. But at a minimum, you want to be doing better at wealth building than your millennial peers. In some areas of finance that really matter, you’ll want to be doing A LOT better. If you’re a high achiever, then financial success in your 20s is all about setting yourself up for financial freedom in your 30s, which leaves you half a century to do work you love and enjoy a beautiful life. Sound totally fly to you? Let’s get on with it then.

Whether your aims are for total financial freedom or to simply be more financially secure, by the end of this post you’ll have tangible and concrete goals and steps to help you on your way.

The millennial financial footprint

Gross generalisations are generally unfair 🙂 so we’re going to take a look at some annual research statistics about millennial finance. Since recent stats are hard to find, we’ve had to dig back to 2015 for some of our benchmarks which are from the US.

Income – average millennial income in 2015 was a tick over $56,000. That’s gross. Take home income would be a smidge less than $50,000.

Expenditure – on average is just north of $47,000/y.

Savings – this leaves implied savings of, well, diddly squat and explains why around half of millennials report living paycheck-to-paycheck.

Debt – younger millennials report having student debt of around $26,000 and credit card debt of around $4700. Of those with debt, 16 percent say they owe $50,000 or more.

This all paints a grim picture for many millennials and it’s likely things have gotten tougher since 2020. The good news is that with different money habits, you can be different. And the pandemic just might be a great opportunity to get ahead for financially savvy twenty something millennials.

Your twenty-something financial habits

Here are the financial habits you need to set in your 20s if you want to be successful with money:

Earn more than you spend
Avoid bad debt
Save like crazy – 30% + of your take home income
Start investing those savings in assets

It sounds easy but if it were, everyone would be doing it. So let’s break it down with 5 steps that you can start today if you want to be a financial success in your 20s.

5 steps to be financially successful in your 20s

Here’s 5 steps you should be taking in your 20’s to be financially successful. None of this is financial advice my millennial money masterminds. These are the 5 things we wish we’d known when we were in our 20s to win our financial freedom earlier.

Step 1 – Put your finances first

Literally no-one does this in their 20s, so if you can pull this off you’ll be well ahead of the pack.

Putting your finances first means becoming financially literate; learning about how to build and manage wealth and then starting to apply what you learn.

The first thing to know is that school doesn’t teach you anything useful about building wealth. All it does is teach you how to get a job, which is not going to translate to financial success or freedom. The other way people learn about wealth is from their parents. So if your parents are good money managers then you have a head start. If not, you’re starting from scratch. But that’s ok! Scratch is where we started and we got ourselves financially free in about 8 years.

Our tip is to focus on these things:

Learn about assets, liabilities, good debt, bad debt, cashflow and tax effective income and investment structures.

Here’s how to start today for under $100

Read our blog. We mean all of it. Start here and here And we’ve got a total bonus for you – its free!
Read these books on building wealth – sign up for Audible for less than $15 a month and get to it.
Watch this webinar featuring wealth educator Robert Kiyosaki about investing in assets and using good debt. It costs a buck.

We promise won’t regret the hundred dollars spent.

Investing in yourself and your financial knowledge is the one thing most likely to determine where you end up in the next few years.

The learning doesn’t end once you’ve nailed these concepts, but there’s enough information in these resources for you to start applying what you’ve learned. Steps 2 to 5 assume you have your head around these concepts and are ready to put them to work.

Step 2 – Get an internet side hustle

The problem with wage earner income

Wage earner income is generally the go to income source straight out of school for most of the population. But it’s also the most highly taxed and time consuming type of income. Having come through 2020, wage earner income is also looking a tad risky. Earning all of your income through the one source that is out of your control means you’ve got nothing to fall back on if that source is suddenly taken from you.

What we are saying is wage earner income is likely where you’ll start, but it is not where you want to put all of your effort. There are income streams that don’t trade time for money directly and you can set them up to be far more tax efficient than a job. Meaning you’ll get to keep more of what you earn. Earned income is not how the rich make their money, if you get my drift…

In your twenties, spend the extra time you’d spend at work to get a promotion on smarter ways to make your money from multiple sources.

These smarter ways take time to build up – so you need to start now!

To be financially successful in your 20s the aim is to build alternate income streams using the skills you already have as… well, a millennial.

Learn how to make money online

Millennials are the first digital native generation which is a killer advantage when it comes to making money from the internet, so go and get yourself at least one alternative internet income stream in your 20s.

Why internet income? Internet income is super powerful because it gives you leverage. Leverage is when you do something once with a fixed cost or time, and it pays you over and over. The internet is where you can use Google, algorithms, coding, bots and online marketing to make money multiple times from one piece of work.

Millennials are really the first generation in history born online. Your 20s is when you need to put this early mover advantage to work.

And the lockdowns of 2020 proved a watershed for internet commerce. More of the world moved online than ever before so its no surprise that we think that is where there’s money to be made.

If you want to know more about leveraged income options, check out this page as well as our Fat Stacks blog where we share tried and tested passive income ideas.

You will need leverage to build wealth and get to financial freedom faster because in your 20s you don’t have access to a lot of capital. Deploying capital (savings and borrowings) is the other primary way you can build wealth and get to financial freedom. If you were in your 30s, we’d look at ways to build wealth using capital.

Step 3 – Become a seriously savvy saver

We’re not talking here about curbing your avocado toast munching, latte-swilling habits (a stereotype I know but a fun one). You need to get serious about squirrelling away your disposable income to be financially successful in your 20s.

Why? Because your savings rate is inversely correlated with your working career. In other words, the more of your income you save, the less of your lifetime you’ll need to spend at work. In your 20s you should be smashing this savings gig out of the park.

Also, because if you want to leverage other peoples money to build wealth in your 30s, you’re going to need some of your own money behind you.

How much should you save?

To put this question in context, average savings rates in the US, UK and Australia are around 10 to 15% of take home income. This won’t make you financially successful in your 20s. It won’t get you to financial freedom. Ever.

You should be aiming to save at least 30% of take home income in your 20s. If you want to be financially free in your 30s, it needs to be more like 50%.

In Australia the average weekly earnings before tax for a 21 to 34 year old is $58,600 a year, or roughly $49,000/y post tax. That’s $942 income a week. If you save 30%, you’ll have $650 a week to live on. Now that’s not a lot, which is why 30% savings is already way better than most twenty somethings.

But, here’s the clincher. You’ll also be saving $14,600 a year.

And this is where compound investing and youth make magic together. $14,600 invested, with a regular investment of $280 a week (your savings) gets you to $255,000 after 10 years. That’s with an annual compound return of 8%, which is less than the long term stock market and real estate return in Australia. We’ll talk about what it means to invest and get 8% annualise returns below.

In the meantime, let me shout it from the rafters – saving is massive part of being financially successful in your 20s. If you want to start your 30s with a net worth of a quarter of a million bucks, we’ve just shown you how.

Saving tips

To master saving you need to learn how to budget and practice delayed gratification. This is tough, when it seems like your besties are out splurging all of their disposable income (because they probably are!). Saving is about trade offs. Every dollar adds up and everything you don’t buy now will get your closer to financial security and if you want it, financial freedom.

If you can’t afford to buy it outright, don’t buy it.
Budget your online streaming, food delivery and ride sharing expenses – young Aussie millennials are spending way more on these things than they realise.
Put your savings somewhere you can’t get to them easily.
If you have to use credit, pay it all off in the interest free period. No exceptions.
Use your online bank app to track income and expenses and manage your money.
Under no circumstances should you be tempted to upgrade your lifestyle as your income grows. Keep it humble,

If there was a silver lining to the whole damn lockdown situation it is that we’re saving a lot more of our money. If that’s you, don’t be tempted to spend up big when restrictions ease! Invest that money instead.

Step 4 – Start regular investing in real assets

If you’ve invested time in your financial education, then you should have an understanding by now about assets and liabilities and how to use them to build wealth.

Your mission, in the game of money, is to accumulate assets and avoid liabilities. The younger you start, the greater the compounding benefits you receive. Huzzah!

Investments are only assets if they put money in your pocket each month. These are not easy to find or build – if they were everyone would buy them. You have to be creative. Here’s some investment classes you might think about that can put money in your pocket each month depending on what and when you buy. Some will get you more than an 8% annualised return (with more risk), some less. The lower down the list, the more capital you’ll need to get started. You may get to property investing by the end of your 20s, if you’re super disciplined with saving and investing.

Bitcoin, Ethereum or other cryptocurrency with demonstrated real world use cases
Digital assets – building, buying, renovating selling them
Dividend stocks
Exchange Traded Funds
Investment properties

Consider dollar cost averaging in to your investments if you don’t have much in the way of savings to start. A regular investment will smooth out price bumps and also help you take full advantage of compounding over time.

Our Ms Mogul blog features a bunch of posts to to help get your head around the crypto asset class as well as the best resources to get you started in cryptocurrency.

When you get the capital behind you, think about buying an investment property before buying your own home. Also, think about buying a cheap home and doing it up while you live in it. These are all strategies we’ve used to build wealth and keep more of the money we make. If you want to know about our specific investment property strategy to build wealth and rental income, you can read all about it here.

Step 5 – Crush your credit score

Once you’ve built up enough capital you’ll probably want to leverage good debt to invest and build wealth, for example by buying investment properties. To do this, you’re going to need a good credit score.

Makes sense right? You need to demonstrate that you are financially responsible before lending institutions will lend to you. So what’s a good credit score and how do you go about getting one?

If you’re in the US, you’ll probably have a FICO score. The Australian system uses similar ratings to FICO, which are:

800 and above — Excellent
740-799 — Very good
670-739 — Good
580-669 — Fair
Below 580 — Poor

To borrow money for investments, you’re aiming for a rating of ‘Good’ or above.

Credit score tips

Open a savings or checking account – most will already have this, but if not it’s way past time
Establish a steady income paid into your bank account
Put some bills in your name and pay those bills in full, on time.
Get a low limit, low interest credit card and pay it down each month
Don’t use all of the available credit on your credit card. Stick to less than 50%.
Check your credit history and credit score once a year.

The final word – here’s to your financial success twenty-somethings!

So here’s what we would do if we had our time again, to be financially successful in our 20s:

Become top 5% financially literate among peers
Build multiple income streams – get an internet side hustle
Save at least 30% of your income and don’t spend more as you make more
Dollar cost average invest your savings aiming for 8% compound returns at least
Pay your bills and your credit card each month and check your credit score annually

This my millennial co-conspirators in wealth is what financial success looks like in your 20s if you want to be financially secure in your 30s. If you want financial freedom, then your mission doesn’t end here. Take a look at this post to help you free your 30-something self. Here’s the good news for you – because you started in your 20s and are ahead of the game, skip straight to step 9. It’s time to put the pedal to the metal and win back your life.

Til next time, have fun, be happy and do good!

Can you really make money with cryptocurrency?

Tara Investing in Cryptocurrency August 10, 2021May 9, 2022Decentralised Finance, Financial freedom, investing in cryptocurrency

When my first transaction completed on the blockchain in early 2020 I had no idea whether I’d make money with cryptocurrency.

I just new that the world had changed overnight, and I wanted a hedge. So I bought some Bitcoin at $7800 and some Ethereum at $222.

I’d wager a bet that there are many crypto curious investors out there today that want to make this same leap but haven’t. You might be one of them.

You’re worried about the volatility of crypto assets. Perhaps you’re concerned that the market has topped. Maybe you’re torn so you’re sitting on the sidelines waiting for some kind of sign that it’s safe to invest…

In this post we’ll try to help answer the one question that you and other new investors want to know before jumping in:

Can you really make money with cryptocurrency?

Spoiler alert! The answer is Yes but it’s not guaranteed of course….. Now let’s find out why.

7 legit reasons you can make money with cryptocurrency

The macro investing environment is increasingly accepting crypto as a new investment class. Are you picking up the signs? Check these 7 legit reasons you can make money investing in crypto:

You’re investing in disruptive technology not cryptocurrency
Institutional, corporate and venture capital investors are getting in now
The technology is still early on in its adoption
Monetary and fiscal policy may not help you any time soon
Surveys show record numbers of retail investors plan on jumping in
Profits have been strong for many early investors
The barriers to investing can be overcome with good risk management

1. You’re investing in disruptive tech not cryptocurrency

Cryptographic currency really started as a way of incentivising and enabling the operation of online ledgers so that two parties could exchange value without middlemen like banks. It’s technology that automates the decentralised exchange of value. Because of this, crypto is more about the tech than it is about the coins and the tokens. It’s important to understand this if you’re searching for greater assurance about investing in crypto.

The ability to automate and decentralise the process of exchanging value will disrupt and transform multiple industries and create new ones.

Ark Invest, one of the world’s top innovation investment funds managers, sees cryptocurrencies as enabling a new paradigm for monetary systems and mechanisms to store and transfer value. Think banking, finance, money markets, logistics, gaming, health, food, and the list goes on. There are real use cases for blockchain technology in most of these industries today.

The upshot? Blockchain tech and crypto are not going anywhere.

2. Institutional, corporate and venture capital investors are getting in now

We wrote a post in April where we offered up 7 reasons why Bitcoin should be on your radar. It’s worth a read before you go any further.

One of the reasons we raised back then was the money flowing into cryptocurrency from corporations, venture capitalists and more speculative institutional investors. As an indicator of this, investments in Grayscale’s Bitcoin fund jumped 18X from $500 million to $6 billion in 2020. Mainstream institutional investors are not even invested yet due to a lack of regulatory clarity according to this Forbes article.

Since when have you had the chance to get in on the ground floor and front run mainstream institutional investors?

Add to that recent reports from Bloomberg that venture capital funds have made a $17 billion bet on cryptocurrency and blockchain.

Our point is, if you follow the money flows at some point you’ll end up in crypto.

3. The tech is still early on in its adoption

How many people do you think own cryptocurrency today?

It’s a simple question, but one that’s difficult to answer because the holdings and data is decentralised by design. You’ll find different answers to the question of how many people own crypto depending on where you look.

One NYDIG survey of cryptocurrency investors estimates that 46 million Americans now own Bitcoin. And that’s just one cryptocurrency (albeit the most ubiquitous one).

For Australia, that number is roughly one in six adults or 17%.

And the thing about crypto is that it’s borderless. It’s literally global, which makes for a huge potential market for use and adoption.

What this all means is, we’re still early! If you’re familiar with innovation adoption S-curves, here’s a graph that demonstrates how early we are when compared to other disruptive tech adoption throughout recent history:

If surveys indicate adoption rates at below 20% for retail investors, this means we’re still right at the beginning of the S-curve. That doesn’t mean all blockchain projects will make you money. But if you get it right the risk to reward ratio can be asymmetrical for early investors (small risk, large reward).

4. Monetary and fiscal policy may not help you any time soon

Governments have been printing money and kicking the fiscal and monetary policy can down the road since the GFC in 2008. It’s gotten worse since 2020. The purchasing power of retail investors is being systemically eroded on a global scale across major economies. Some estimate to the tune of 15% a year. People are literally watching their hard earned wealth erode in front of their eyes.

But did you know that Bitcoin was borne from the GFC to remedy this very scenario?

We think that cash is trash and we chose to need to have our wealth in other value vehicles. As monetary policy continues to play out, our view is that more people may see crypto as a hedge against monetary policy – just as we did in 2020.

5. Survey’s show record numbers of retail investors plan on jumping in

It’s no coincidence with the flow on effects of rubbish fiscal policy that a number of surveys now show retail investors continuing to buy in to crypto in record numbers in the coming 12 months.

This Gemini survey of 3000 people estimates another 50 million Americans plan buy cryptocurrency in 2021. The Australian reports that 13% of Australians are planning on investing in the next year.

So why are they planning on investing?

The Gemini Study found that 69% of crypto investors today see it as a long term investment strategy and 36% of investors trade crypto to make a profit.

For early investors, continued retail interest in crypto assets means rising demand for coins and strong network effects for key blockchain networks.

6. Profits have been strong for many early investors

How does that old caveat go? Historic returns are not an indication of future performance. But we always look at it anyway because none of us have a crystal ball right? So let’s look at the performance stats for some core cryptocurrencies.

According to blockchain analytics firm intotheblock, in late 2020 at the peak of the market, 97% percent of all Bitcoin wallets and 88% of all Ethereum wallets were in profit. Here’s the data:

Large price corrections in crypto in May 2021 will have dampened these numbers. And keep in mind, what goes up can always come down. Markets are cyclical and prices move accordingly. The overwhelming long term trend of large market cap crypto like BTC and ETH has continued on an upward trajectory since their inception around 13 years ago.

7. The barriers to cryptocurrency investing can be overcome with risk management

Here are 5 common barriers to cryptocurrency investing raised in surveys and in the mainstream media, as well as ideas for how to overcome them:

Volatility – It’s true that crypto is a volatile asset. Prices for large cap coins can move 20% in a single day. It seems that this volatility is the single biggest deterrent from new investors getting into the crypto asset class. Volatility can be managed like volatility in other stocks. How? These are the methods we’ve researched on the internet 1) Dollar cost average in to your investment. 2) Don’t bet the ranch all on crypto – only invest what you can afford to lose. 3) Don’t short term trade unless you know what you’re doing – the graph below indicates returns as high as 300% annualised for those that have held their Bitcoin for 5 years.
It’s complex – crypto is still early stages so it’s not user friendly to transact with. When you’re sending your wealth around in cyberspace it can be downright scary for some people. But there are ways to overcome this by learning the technical basics. Start with the information we have posted about how to make money with cryptocurrency here and here. Start with more ubiquitous assets like Bitcoin which is easy to buy through Paypal, and start with interest earning Stablecoin products.
Fear of buying the top – cryptocurrency prices have retraced from their historic highs of May 2021. Some investors are fearful that May was the top for crypto. Investors that bought crypto between early February and early May 2021 and in late 2021 are likely underwater. But the counterfactual is that if you bought at the top of the last crypto bull run in 2018, you’d be ahead today by almost 30%. Check out the graph of Bitcoin annualised returns over 5 years below from New York Digital Investors Group.
Its a bubble – you’ll hear commentators in the news: cryptocurrency is a huge bubble just like the dot com era. Crypto is hugely overvalued and all bubbles burst. Ask yourself though, overvalued compared to what? If it’s fiat currency we are comparing with then everything’s a bubble – the stockmarket, commodites, real estate. Start comparing assets ratios with reserve bank holdings and you’ll get a different picture. This kind of commentary is a great headline grabber and is bound to create fear in many crypto curious. We think it’s worthwhile doing two things before falling for this old chestnut – 1) take a look at the vested interests of the commentators and whether they heavily tied to existing financial systems and assets; and 2) take a look at what respected investors do not what they say. Then make up your own mind.
It’s full of scams – there are loads of scams in crypto and understandably this is very off-putting to new investors. But it’s a problem that you can overcome with mindset and by doing your own due diligence. If you come into crypto understanding that its designed to be decentralised and non-custodial, you’ll get that you alone are responsible for the security of your assets. If you get this, you’ll do your own due diligence and only invest in crypto with demonstrated real world use cases. You’ll accept that investing in anything else is purely speculative and could even be a downright scam.

The final word – is it time to rationalise your fears?

We’re not here to convince you to buy cryptocurrency. We’re here to share different information than you might hear or read in the mainstream media, so you can make up your own mind. We’ve made the case that you can make money with cryptocurrency and offered up 6 reasons why. We’ve shown how you can overcome 5 common barriers to investing in crypto. Our plan is to make money with cryptocurrency by focusing on real world use cases and investing for the longer term.

None of this is financial advice peeps – in fact if you asked a financial advisor they’d probably tell you to stay the hell away from cryptocurrency! 🙂 But here at the LLP we’re huge fans of taking control of our own finances and making our own decisions. No-one cares as much about your wealth as you do after all!

If you want to know more about crypto markets, here’s a super useful post about understanding crypto market structure. Please read it before jumping in if you decide to do so!

If you do purchase crypto assets you’ll need to safely secure them. We recommend using this site to get your hands on the best cryptocurrency hardware and seed phrase storage wallets. You’ll need these to protect your assets from theft and cyber attack. They’ve even got some useful FAQs to explain what all that means!

Til next post have fun, be happy and do good!

Working too much? How to avoid the 24/7 work trap

Tara Achieving financial freedom, Financial Independence Retire Early August 1, 2021September 13, 2021Financial freedom, financial independence, financial independence retire early

Working too much was the biggest regret she had looking back at her life….

When I’m in my 80s, I don’t want to be this woman. I don’t want to feel like I missed out on my life because I slipped into the habit of working too much.

So I did some things to make sure this wasn’t going to be me and The Live Life Project was born.

But the sad truth is, more and more of us are Googling this very thing. And it’s a world wide phenomenon. We are literally going to Google en masse to search for answers. In a clear upward trend over the last 15 years, we as humans are searching for more.

Well in this post we’re going to give you some answers. We’re going to share 10 legitimate ways to avoid the 24/7 work trap, win back your life, and put a smile on the dial of your 80 year old self.

Working too much? You’re not alone

Here’s a scary picture – the 15 year trend of Google searches for the words “working too much’. See the pronounced upward trajectory? And the data doesn’t even include the impact of global work-from-home changes during 2020. People in the US, Canada, the Phillipines, the UK and good old Oz are feeling the most overworked.

Google trends for the search term ‘working to much’

How much of your life is spent at work?

Have you ever wondered how much of your life you’re going to end up spending at work?

Take a look at this table we’ve pulled together. Try not to completely flip your lid about how much of your adult life you’re going to spend at work if you keep on doing what you’ve always done.

The average work week is around about 40 hours which means the average person is going to spend 10 years straight at work, during their adult life. If you’re working 70 to 80 hours, then be prepared to spend a total of 18 to 21 years (solid) of your adult life at work.

LIFE SPENT WORKING	TOTAL DAYS	TOTAL YEARS	% OF ADULT LIFE
20 hours per week	1875	5	10%
30 hours per week	2813	8	12%
40 hours per week	3750	10	17%
50 hours per week	4688	13	21%
60 hours per week	5625	15	25%
70 hours per week	6563	18	29%
80 hours per week	7500	21	33%

Based on a 45 year career, 80 yr life expectancy

Why are you working too much?

Before we get to how to avoid the 24/7 work trap, here are 10 common reasons people work long hours:

You love your work – this can be a legit reason you’re working long hours, but if you’re googling ‘working too much’ its unlikely to be why you’re here.
Systemic expectation – we are part of a system that educates that we have to work to live. We learn to believe that the more and the harder we work, the better off we’ll be. We at The LLP we don’t buy it. There are other options!
Workplace culture – your workplace rewards long hours over outcomes. You’ve got to fit in.
Expanding lifestyle – you’ve got more and bigger bills to pay. Most of us experience lifestyle creep as our earning capacity increases. But it can be a total trap. The more you earn, the more you spend, the more you have to work. Until you’re 80 and full of regret that you missed your life.
Your examples in life – your parents taught you to get a good job and work hard. So you did.
Your own notions of success – equating working long hours with doing a good job is common but it’s rarely accurate.
Avoidance strategy – you’re spending more time at work to avoid your life, and whatever is going on it.
Upward management – you’re not that great at managing the never-ending expectations of your boss, or you’re covering for them.
Poor work from home boundaries – you feel compelled (or obligated) to stay at work, even though its home time, because your work is at home with you.
To make more money – you’re paid by the hour and you want to increase your income (irrespective of your lifestyle) so you work more hours.

A recent UK study found the most common reasons for working longer hours is more pay, where overtime was paid. The Economist surveyed people in 65 countries during 2020 and found that people working from home were working longer days.

But would we totally blow your mind if we said this:

The 40 hour work week is a relic of the industrial age.

Because that’s where it comes from. Things have changed since 1817. Technology, lifestyles and ways to make money have changed. So why hasn’t our thinking changed with it?

How to avoid working too much

If you stand back and take a look it, most of the 10 reasons we’ve listed above relate back to three things; values, education and finances.

So we’re going to tackle the issue at its root cause. We’re not going to tell you to get another job or go home earlier. Instead we’re going to offer you a different perspective and some more choices! If any of those 10 reasons above sound like you, here’s some ‘hopium’ that there is another way!

10 ways to stop working too much and avoid the 24/7 work trap:

1. Re-frame how you think about work

I totally understand how your personal beliefs about your self worth can be attached to what you do for work. Mine was. Our DNA is coded to think this way. We’re educated to think this way. We even introduce ourselves and socialise based on ‘what we do’.

But ponder it for just a second. Does working for 45 years so that you can live the life you want once you get to 65 even make sense to you? We’re here to encourage you to think your own thoughts. Tread your own path. Determine your own financial future.

2. Re-train your money brain (or at least read these books on your commute)

Money doesn’t have to come from a job. Only around 25% of our income is classed as ‘earned income”. So number 2 is about broadening your earning potential.That doesn’t mean heading back to university or doing a work sponsored training course. You need to swat up on your personal finance knowledge.

Learn the things about money that aren’t taught in school. Learn the things they don’t want you to know. Read these books. But be ready. These books will challenge what you think about work, life and money. They’ll also open doors to making money you couldn’t see before.

Our list if recommended personal finance books.

3. Work from home – with boundaries!

What if we said you’re working more hours just for the privilege of going to work? You can actually save a tonne of money – on things like coffees, transport, clothing, lunches – by working from home.

We saved $15,000 in one year working from home, which is the equivalent of a $20,000 pay rise (accounting for tax).

Just by working from home you can work one whole day less per week without impacting your financial situation.

Why? Because the cost of going to the office to work!

Check out this article where we show you how ….

But if you are going to work from home so you can work less, you have to set and stick to boundaries. Turn off the computer at home time. Make sure your boss understands this.

4. Cut your living costs

If you cut your living costs, you can cut your working hours.

Start with a budget and look at all of your monthly costs. For every expense over the last month, ask yourself: “How many more hours will I have to work to pay for this?”. Take the cost of any expense and divide it by your hourly wage to work this out.

This process makes me think about whether I really need that item or not and helps me pair back and stick to my budget each month.

Is a straight-off-the-showroom-floor SUV worth the extra 250 hours you’re going to have to work to pay for it? Or can you make do with a demo model? Do you really need Netflix and Stan and Amazon Prime?

Cutting your living costs will give you some breathing room so you don’t feel like you need to work all the time just to pay your bills.

“Normal is getting dressed in clothes that you buy for work and driving through traffic in a car that you are still paying for – in order to get the job you need to pay for the clothes and the car, and the house you leave vacant all day so you can afford to live in it.”

5. Prioritise living life

Our time goes where our priorities are. When you’re about to ascend the Pearly Gates or whatever you believe, you’re probably not going to reflect at that moment on what a great work life you had. You’re more likely to think back on the richness of your life. Your family. Your friends. Your experiences. When you were happiest. So prioritise those things with your time!

“We have two lives and the second begins when we realise we only have one.”

– Confucius

6. Stop buying in to the “time for money” trade

Working more hours is not the only way to make more money. In fact, overtime may just be the hardest way to earn more money if you understand the rules of the money game. The more you trade your time for money, the more tax you’ll pay. It’s just how the system has been set up.

Instead of working more hours or getting a raise, think about starting your own side hustle. And don’t earn as an individual. There are more tax efficient ways if you want to keep more of the money you make. If this has piqued your interest, take a look at this post that explains how to make money so you get to keep more of it.

7. Diversify where your money comes from

If you only earn your income from your job, then it’s understandable you’d feel trapped into working more to earn more. But there are lots of different income streams other than earned income.

The freedom of multiple income streams gives you a greater sense of financial security and helps you set boundaries and say ‘no’ at work when the inevitable overtime expectations begin.

We have 5 different income streams that we’ve built up over time specifically because we don’t want to feel beholden to a job and an employer for our security.

It’s not something that you can do overnight, but if you never start you’ll never get there. For the traditionalists, dividend income and rental income are pretty common secondary income streams. But there’s a whole new world of making money online that is open for the taking. It’s not the ‘trading time for money’ kind of income you’re looking for. Instead, it’s income that pays you multiple times for the one piece of work. It’s called ‘leverage’, and if you want some more ideas about how to make money this way, check out our page about it here.

8. Divert your overtime hours into investing

If you’re tempted to work overtime for the extra money, spend this time on your next investment instead. I’ve refused opportunities for promotion at work because I knew they came with the expectation that I’d spend more of my time at work. Or they came with an ‘on call’ expectation. We say don’t give your time away so freely and easily – it’s the most precious thing you have! The one thing you can’t buy more of.

Instead of spending more time at work, spend it research investments and on investing. Use the knowledge you’ve learned from the books and resources we recommend here, and elsewhere. You don’t need to start with a fortune. But the sooner you do it the more you’ll benefit from the compound nature of investing.

Have you thought about joining an investment club or personal finance group? You can find them online and many are free. It may sound unrelated but if you’re surrounded by wage earners all working long hours, then maybe it’s catching. Just kidding. But it could be all you really see in front of you. Find some people who are doing things differently and hang out with them. Virtually or in real life. See how they make their money and what they do with their time. You might be inspired and you might find opportunities to work less that you could never have dreamt up yourself!

9. Resist the upsell on upsizing

Upsizing your lifestyle feels like the natural thing to do when you get a raise or a better job. The desire for more, for bigger for better – you earned it after all! It’s what your friends are doing; getting larger mortgages and fatter credit cards to buy bigger houses, better cars, more toys. But it’s also the very thing that is keeping a lot of high income earners working longer and longer hours. The question you might ask yourself if you’re working too much is: is bigger and flashier worth it?

“Desire is a contract you make with yourself to be unhappy until you get what you want.”

– Naval Ravikant

Every time you upgrade your life, you’re committing to working more.

The desire to upsize your life is the modern version of indentured servitude in our view. Except your servitude is not to the middleman recruiter, it’s to your bank!

Earning more but keeping your lifestyle at the same level means you’ll have money left over to save and invest. Over decades, you’ll save hundreds of thousands of dollars in mortgage and car loan interest. This is money you can use to invest in assets that put money in your pocket so in the future you can work less!

10. Make finance a family affair

Let’s face it, your children are not going to learn anything useful about money at school. They’re just going to learn that the way to make money is to get a job. So it’s all going to come from you! We’d say, teach your children about the rules of money as you learn them yourself. This is what the rich do! Make saving and investing a family affair. Get everyone involved. Practice delayed gratification in front of your children. Explain why you’re doing what you’re doing. You may just face less friction when it comes to applying these steps so you can escape the 24/7 work trap. And chances are the ‘working too much’ cycle that you probably learned from your parents may just stop with you.

We bought a new home with cash!

Tara House hacking, Our story, Real estate, Sustainable living July 29, 2021February 27, 2022Financial freedom, financial independence, financial independence retire early

Here’s the first of our updates on our personal assets, income and savings. Our big news for July? We bought a new home with cash!

So here we are in July 2021…we’ve pulled it off!

When we decided to sell up in Brisbane move to Tasmania in mid 2020 we had one thing on our mind. Financial freedom. We cooked up a plan during the lockdowns of 2020 to pimp our home with some clever DIY renovations and sell up. Our aim was to take our profit and our savings and buy a house for cash.

It’s a strategy called geo-arbitrage and you can use it to bring forward your financial freedom date, just like we have.

We worked out that Tasmania was a viable option for us to pull off some crafty geo-arbitrage. Tassie also provided the sustainable living, self-reliant lifestyle we were after. We wanted no neighbours, a spectacular view and some room to grow food. Most of all, we wanted to lower our living costs.

After three months of careful searching, we’ve pulled it off!

Views to the mountains over our back fence

How geographic arbitrage smashed our housing costs

In many cases homes are not assets (an asset puts money in your pocket at the end of the month). This is generally dependent on the type and cost of housing. When we moved to Tasmania we wanted to buy a home that we could count as an asset. Let me explain how we’ve found exactly that.

Our cost of housing in Tasmania will be around $3500 per year.

Here’s the breakdown.

Typical housing costs	Our new home
Mortgage	$0 – owned outright
Water	$0 – two tanks and pumped creek water
Sewage	$0 – Septic
Grey water	$0 – pumped grey water system
Power	$1900 – grid but soon to have solar PV
Heat / cooling	$800 – daytime from solar + wood heater
Council Rates	$874

The way we’ve wrangled it, as long as our home appreciates in value by >$3500 per year, we can count it as an asset. We figure that’s likely given the strapping pace of inflation, at least in the near term. We also calculated our Brisbane housing costs by way of comparison. Here’s what that looks like:

Housing cost	Brisbane	Tasmania
Mortgage	$22,600	$0
Water	$1040	$0
Sewage	See Rates	$0
Grey water	See Rates	$0
Power	$1400	$1900
Heat / cooling	See power	$800
Council rates	$1420	$874
TOTAL	$26,460	$3,574

What this means for us is that we have to make $23,000 less in income each year to live in Tassie. And that’s just housing costs. It’s not living costs.

Geo-arbitrage is an underrated weapon in the arsenal of any financial freedom seeker because you can use it to cut one of your biggest living costs – housing.

Our net worth

As at July 2021, our net worth is north of $1.5M. Just goes to show you don’t need millions to be financially free! You just need to kick ass crafty about it. 🙂

Our good debt position

Our net worth is calculated after debt is deducted.

We hold (indirectly) good debt on our investment properties. I say indirectly because we have company and trust structures in place. So the debt is not on our personal balance sheet. These mortgages are paid by other people, through the property investment and management company we run. These investment properties are assets not liabilities because they put money in our pocket each week as you’ll see when we get to “Income’ down below.

Our bad debt

$10,000

We have zero bad debt at the end of each month (bad debt takes money out of your pocket). That’s right. Zero. The only bad debt we carry is credit card debt, which is cleared in an auto sweep of the card. Every. Single. Month.

We do use our credit card to give us free stuff. We direct all of our expenses through the credit card to earn cash rewards, which we use to buy groceries. So far this year we’ve earned roughly 77,000 points or $350 worth of free food.

Credit cards can make you money if you use them the right way.

Our July income

About half our income this month was rental income. We worked 4 to 5 hours a week for this income. We’re still keen to save and invest so we had earned income in July as well. Our capital gains is mostly from shares we own. We also had a small bit of income from cryptocurrency. Our profit income covers things we like to do on the side – retail arbitrage (reselling), cash rewards, and other online income. We’re working on diversifying our income streams further in the medium term.

Our July savings rate

75%. Huzzah!

Our next asset investment?

A solar PV system.

We’re still a bit too heavy in cash so we are looking for new investments. (Cash is trash). We’ll likely buy a solar power system, which we expect will produce an ROI of 23% year-on-year, with a payback of 4.25 years. Not a bad outcome.

We’re also busy building digital assets that will pay us an income in the future. More about that later….

How to be financially free by 30

Tara Achieving financial freedom, Financial Independence Retire Early, Financial literacy July 28, 2021September 13, 2021

Congratulations on the most important decision you’ll make today. Maybe even this week. Hell, this year! If you are new to personal finance, your future (hopefully 30 year old) self will thank you for it. Because you are about to learn how to be financially free by 30.

So turn the music down and your phone onto silent. It’s time to become a money badass.

How long does it take to be financially free?

If you really knuckle down to it – a realistic expectation is 7 to 10 years. It took us 8 years but we started in our 30s.

In reality, how long it takes you to be financially free depends on where you are at today. If you’re thinking you’re going to be financially free in 2 years, it’s pretty unlikely. But 7 years is doable depending on how aggressive you are about it. And hopefully you’ll read our blogs and learn a few short cuts along the way.

The three key ingredients to cooking up your financial freedom fast are:

your income
your savings
your time

If you want to know how these combine to serve up a great big steaming hot dish of financial freedom, check out this post that explains the concepts.

How to be financially free by 30 – in 12 steps

Here are 12 steps to be financially free by 30 that will totally transform your life if you want them to:

Value your financial freedom above everything
Spend more time learning than earning
Set financial goals
Kick bad debt to the curb
Nail a monthly budget
Start a side hustle
Save your butt off
Make friends with your credit score
Get a lawyer (to structure your future investments)
Get leverage and buy or build assets
Pimp your assets (manufacture value)
Reinvest your equity and income

Once you’ve done these steps, rinse and repeat…The ‘rinse and repeat’ should go on until your assets produce enough income to cover your expenses. Once you reach this point – boom! You’ve made it.

Oh, and order matters peeps! Some steps must come before others. If you mix the order, there’s a risk you mightn’t have the financial wherewithal to be successful. Now let’s take a quick look at what you need to do for each of these steps.

1. Value your financial freedom above everything else

This first step is about mindset. No its not all rah, rah unicorns and fairies. It’s just a simple fact. If financial freedom isn’t your most important value, then you’re unlikely to get there. You certainly won’t make it by 30.

The reason? Because it takes trade-offs, sound decisions, dedication and commitment. If you want to be free by 30, you won’t be able to do what other twenty-somethings are doing. But it can also be really fun and its totally freakin worth it.

I can’t help you with this step. All I can say is that Step 1 is going to be tested at every other step along this journey. Not everything is going to go the way you planned. Your values are what will keep you full steam ahead when this happens.

“Be unapologetic about your financial freedom. Be a Mogul. Build wealth. Keep it. Learn to live off it. “

Flip the bird at anything or anyone that tries to distract you. You’re gonna need that single-minded focus to get where you’re going….

2. Spend more time learning than earning

You need to kick things off by learning about finance. This is particularly true if you’re in an employee in a wage earning job. There are a few things you’re going to need to change about how you earn money if you want to be financially free. There’s a whole game of money you need to know how to play, with a tonne of tricks to it. But we’ll get to that.

Dedicate a minimum one hour a day to reading about personal finance. I used to do it on the commute to work each morning. Hell, you can even put on an audio book if you drive to work. You can learn and earn at the same time, just get started today with your learning and keep on with it.

What you need to know about personal finances to become financially free

Here’s a little bonus for you. Personal finance is a huge space and we don’t want you to get bogged down at the start. So just focus on this helpful list of what you need to know about, with links to the best resources to get you started:

The rules of money – what are assets, liabilities and cashflow, and how can you use them to become financially free

This is the resource that changed how we think about money and got us started – the Rich Dad education suite.

Financial freedom strategies – what works and what will work for you

Here are the financial freedom books we learned the most from. And here are the financial freedom strategies that we have used and know work (most of which we learned from the Rich Dad education).

Tax effective investment and income vehicles – how to earn income so you can keep it (pay less tax!), how to benefit from corporate tax deductions, and how to use family and discretionary trusts

There’s no, one compelling resource that will give you all the answers here. We’d suggest starting with the Rich Dad education to learn about how to earn income tax-efficiently. Then google ‘tax’ for the particular type of assets you’re looking at – whether it be property, stocks, digital assets.

Personal finance products and how to use them to your advantage – credit cards, offset accounts, ETFs, managed funds, loan products, loan to value ratio

Here’s where we explain each of these products and how they’re relevant to your financial freedom.

Side hustles and secondary income streams (for when you get to Step 4).

Here’s a link to our growing list of secondary income and passive income ideas. Remember to check back as we keep adding to this list.

3. Set 1, 2 and 5-year financial goals. Reverse engineer your 1 year goal.

Some people hate this step and some love it. We say just do it. Write down what you want (financially), why you want it (usually not financial) and by when. Set a 1-year goal, a 2-year goal and a 5-year goal.

“If you fail to plan, you plan to fail.”

Financial freedom goals

Be specific and write down your financial goals as though you have achieved them. Here are some examples to get you started:

It’s September 2021 and I have eliminated my credit card debt.
It’s July 2022 and I have a side hustle doing X that earns me an extra $X per month.
It’s December 2021 and I’m saving X% of my income each month
It’s July 2023 and I make $X in annual income
It’s July 2022 and I own X investment properties
It’s December 2021 and I currently invest $x per month of my savings into X

Now here’s the bit where the rubber hits the road. Backwards engineer each of your 1-year goals, month by month. Write down and map out what you will need to do each month for the next 12 months to hit that goal. Excel is a great way to do this.

Check back on your goals from time to time and track your 1-year goal closely. Do everything you’ve written down.

If you’re not willing to take this step, then do not pass go and do not collect $200. Just kidding. But maybe financial freedom isn’t your most important value.

This is also where Step 2 comes in handy. If you haven’t swatted up on assets, liabilities and cashflow, you’ll probably have no idea what steps you’ll need to take to hit your 1-year goal.

4. Kick bad debt to the curb

Bad debt is a trap that keeps you poor. Simple as that. Don’t buy anything with borrowed money unless it puts cash in your pocket at the end of the month. Want a car? Save until you can pay for it in full. Same goes for a holiday.

“Delayed gratification my friend, is the secret sauce to your financial freedom.”

Pay down your most expensive debt first. This usually starts with a credit card. Pay down your credit card to zero. Arrange in your bank app to set up an auto sweep of your credit card each month so that you pay zero bank interest. Never use your credit card to withdraw cash.

Pay off your car loan or any personal loans you may have taken out.

Cup up your store cards unless you use them to buy things you need (like groceries) and they pay you cash rewards for doing so.

Any time you feel the urge to buy something, calculate what it’s worth in terms of hours of your life. Divide the cost by your hourly wage. Ask yourself “Is this new TV worth the 28 extra hours I’m going to have work to pay it off?” It sounds dramatic, but it works for me. 90% of the time, my answer is no! (and that’s how I know financial freedom is my most important value).

5. Nail a monthly budget

We recommend a monthly budget because it allows you some flexibility to move the timing of expenses around. It’s easier to manage your money and still come in on budget at the end of the month. But if you’re bad with budgeting, we’d suggest 2 weeks. If you want to nail your budget it’s easier when you practice these habits:

Pay yourself first – set aside your savings as soon as you are paid
Put your savings somewhere you can’t get them
Have some reward money set aside for when you make budget for 3 or 6 consecutive months – budget this in.

6. Start a side hustle

We say start a side hustle but what we mean is increase your income. We did this with a side hustle because you can structure it in a way that means you keep more of the money you make.

You can also increase your income by negotiating a raise at work or getting a higher paying job, but you’ll also lose more your ‘hard earned’ to tax. Why? Because wage earners pay the most tax. Pfffst!

We started some side hustles, set up in a corporation. You might want to skip to Step 9 before you get started on this step. Get some professional advice from someone qualified in tax effective income and investment structures. This advice can help you keep 15% more of the money you make (in Australia). And you get a shed load of tax deductions. So even if you have to pay for this advice, it should pay you back in spades.

By far the best side hustle this side of 2020 is Airbnb. And as you haven’t hit step 10 yet, you may be interested in this post on How to earn money on Airbnb without owning property. Yep, without owning any property yourself. You can set it up and be earning thousands in extra income all within 6 months. We know this because we did it.

We’ve had a lot of success with this side hustle. Just check out how much we made in one month with this one apartment that we didn’t own.

If Airbnb is not for you then check out our other passive income ideas.

7. Save your butt off

There’s lots of different theories about how much of your income you need to save to be financially free. There’s a direct correlation between how much you save and how quickly you get to financial freedom. You’re not saving to have cash in the bank though, you’re saving to invest.

Your savings rate is the key defining factor that makes you different from folks that follow the conventional route to retirement. If you’re saving 10% to 15% like they are, expect to work for 45 years like they will.

“From our experience, you need to be saving 50% of your income and then some.”

But if you’re at 47% don’t sweat it! There’s two ways to save more:

cut back non-essential expenses
make more money

This is why you’re starting a side hustle before you knuckle down on your savings. Starting your side hustle first is designed to boost your savings rate (because that’s exactly what you should be doing with the side hustle income). It will generate momentum, and keep you on your financial freedom path.

8. Make friends with your credit score

You’re going to need this when you get to Step 10, so start now.

What is a credit score, why is it important, and how do you get a good one?

A credit score is a rating that lenders like banks use when they decide whether to lend you money or not. It’s based on how much you borrow, whether you pay what you owe on time, and how many credit applications you’ve made.

A credit score is important so that you can leverage ‘good debt’ to invest later on. Good debt is used to buy assets that put money in your pocket each month.

Your credit score is something that you need to build up over time. It’s a history of your behaviour with money. If you’re in your early 20s, you’ll be at the start of this process. If you want to be financially free by 30, you’ll need to go about consciously building your credit score as early as possible.

You can get your self a good credit score by:

Getting yourself a credit card and showing that you can pay it off in full each month
Paying your bills (mobile, rent, etc) on time each month
NOT making excessive credit applications – just the one credit card with a small limit is enough.

9. Get a lawyer (to structure your future income and investments)

Not all income is equal. There is highly taxed income and then there are rich people that pay very little tax because they paid for good advice instead. Those rich people don’t earn highly taxed income. They structure their investments and income in ways that allow them to pay as little tax as possible. They also use the same structures to claim tax deductions that are not available to average income earners.

All of this means that if you want to keep the money you earn, you need to get good advice on how to set up your investments and income. This should ideally happen before you own assets or income producing vehicles, as its tough to change ownership once you’ve started and often there’s a cost (a tax of course!) to do so.

We’ve probably spent around $10,000 on tax effective structures and advice over the last 10 years. But that investment has paid us back around 18 x. Not a bad return…

10. Get leverage and buy or build assets

When we say leverage, we mean either capital or programming code. No, you don’t have to be a programmer. If you are lost at this point take a look at this page where we explain these two different types of leverage you can use to buy or build assets.

Financial independence (the traditional way) uses capital (or other people’s money) to build wealth.
‘New financial independence’ uses the internet (or code) to build wealth.

What you’re trying to do is buy and build assets. An asset can be digital – like a website or cryptocurrency. It can also be tangible – like property or a business. If you remember the Rich Dad education resources from the beginning, then you’ll know this one vital thing:

An asset is something that puts money in your pocket.

Don’t buy assets that cost you money each month. That won’t get you financially free by 30.

Everything you’ve done so far has led you to be successful at Step 10.

Step 1 is your mindset that has gotten you to this point…
The knowledge you’ve gained at Step 2 means you know what sort of assets to buy, why ‘good debt’ is a critical financial freedom tool, and how to manage both.
If you’ve completed Steps 5, 6 and 7 you should have a nice nest egg to invest.
Steps 4 and 8 have helped you build up a great credit score, which means the banks will lend you capital.
Because of Step 9, you’ll know what ownership vehicle to use for the asset, regardless of whether you build or buy it.

11. Pimp your assets – manufacture value

Step 11 is just about squeezing the most out of your assets – both in terms of income and capital growth.

You can’t do it with all assets, but you can do it very effectively with the following types of assets, which makes them great leverage options.

Real estate – by buying well and renovating cleverly
Companies – by building the business and earnings
Digital assets like websites – by improving them and their monetisation.

You can also maximise your assets using a range of new online services, technologies and platforms that are collectively referred to as ‘the share economy’.

We’re big on using the share economy to generate more income from our assets.

You should be too, if you have a goal to be financially free by 30.

12. Reinvest your equity and income

This final step is about compounding your income and capital growth.

Your aim is to grow your assets to a sufficient level that they produce enough income to cover your expenses.

Some examples here might be:

Refinancing a property investment and drawing out any equity. Then using that equity as a deposit on your next investment.
Diverting business earnings into business growth
Automatically reinvesting dividends into more dividend producing stocks.

You want to look to do this once every 12 months.

By the time you get to Step 12 you need to have the lived experience of every single previous step. Especially if you’re leveraging further good debt. You need to know exactly how to manage cashflow and risk. You need to have a buffer built up in savings. Your lender will look for these things in order to lend to you. By Step 12 you’re officially a money badass so you need to have the skills of a badass to make it.

The final word – how pass ‘go’

Remember Monopoly? Well, just like in Monopoly you can roll the dice on your financial freedom and pass go in plenty of different ways. How you become financially free by 30 is ultimately up to you.

But unlike other blogs with their vague ramblings about how to be financially free, this ‘step by step’ guide is tried and tested. We know it works because we’ve done it.

We muddled through in 8 years. Now, with this guide at your fingertips and our kick-ass blog, you don’t have to.

So what are you waiting for?

Til next post, have fun, be happy, do good.

If you dig the vibe here, please share our post and help us get the word out!

Make money on Airbnb without owning property – $6,400 in one month with this apartment

Tara Airbnb profit, Passive income ideas July 21, 2021May 10, 2022make money on Airbnb, passive income ideas 2 Comments

You might think all of the stories going around about people making money on Airbnb with no property are just a bunch of marketing BS. But we can say hand on heart that you can make money on Airbnb with no property. And you can do it without any prior experience, if you know what you’re looking for and what steps to take.

We know this, because we have made good money on Airbnb with three rental properties – none of which we owned personally.

In this post we’ll show you the first Airbnb property that we rented and then listed on Airbnb. We’ll explain what sort of property we looked for and how we turned that property into a great side hustle income, with zero previous experience. The only caveat is, you need to know what to look for and how to set it all up if you want to succeed. But don’t worry, if this kind of Airbnb side hustle is for you then we’ve got you covered.

We’ll also dive into the costs, gross income and net profit so that you can get a feel for how the numbers really work.

We’ll assume in this post that you know how the basic business model works that enables you to list other peoples property on Airbnb and make money, If you don’t know but want to, check out this post here before reading on.

What kind of property will make money on Airbnb?

Our zero property Airbnb side hustle started in the capital city of Brisbane, Australia.

After we decided we wanted to make money on Airbnb with this strategy, we started by working out what kind of property we were looking for and where in Brisbane.

To understand this, we had to learn about what factors make a successful Airbnb listing and then research those factors.

If you want to learn more about the exact formula for identifying great potential Airbnb properties we highly recommend this course that steps out everything you need to know in a formulaic approach that you can replicate across multiple locations and property types.

Where to research and what to look for

The first thing you need to do is get an idea of where Airbnbs are already running successfully in your area.

The free way to do this research is on Airbnb itself but it will be time consuming and a bit complex. Here is how we’d go about kicking things off:

Location search – Do a map search of different locations in your areas to see where existing properties are concentrated.
Property search – Then drill down into those locations to find out what type of properties are listed there – is it apartments or houses? How many bedrooms, bathrooms? Take notes about the condition of the properties and amenities.
Calendar search – then for each of the properties in that location open the listing on Airbnb as though you were going to book it. Use the web browser as it has better functionality. Look at the how full the listing calendar is for that month and the three months after. You need to see good upcoming bookings in the calendar.

This is really something you’d want to spreadsheet out. If you do this research you’ll start to understand what suburbs are good and what types of properties are getting good bookings in those locations.

The much easier way to go about this due diligence step is to just use the premier Airbnb data source and service – AirDNA. They’ve done all the data analysing for you and just give you the results.

For a small monthly subscription (ours was about $40 I think), which you can cancel at any time, AirDNA will give you access to critical listing performance data you need to make money on Airbnb without owning property:

occupancy rates per location
booked nights per month
booked prices
Property types per location
actual earnings of potential competitor properties in that location

This data is presented in nice tables with maps and graphics – all easily digestible. And will make it easy and quick to work out where to look for property and what type of property you need to find.

The rental property we found

We decided on Brisbane City as the best location for our first Airbnb rental arbitrage property. We also worked out from the AirDNA data that there were very few 3 bedroom properties listed, so we targeted that under supplied part of the market.

In our CBD location, all of the properties were apartments rather than houses. Because we were looking for a large 3 bed apartment, we also wanted it to be at least partly furnished. This would reduce our set up costs to list it on Airbnb. The rental needed to include good quality beds, a sofa, dining table and chairs, a TV and TV unit at a minimum. We also knew, from the training we had done, that a large property needed two bathrooms to appeal to different combinations of guests. Our ‘wish list’:

3 bedrooms
2 bathrooms
furnished
CBD location
a wow factor, to beat the competition for bookings

So with this wish list we started to search online and attend rental inspections to identify suitable property.

Now lets take a look at the property we found, and ended up renting with the owners permission to list on Airbnb:

The apartment was a 2 bed 1 study apartment with two bathrooms. The study was key to our strategy because it allowed us to list the property on Airbnb as a three bedroom apartment, which meant a higher nightly price and more revenue.

All of the furniture you see in the photos came with the rental and was owned by the landlord, with the exception of the single bed we set up in the study. The kitchen items, decor and linen was supplied by us.

This apartment was located on the 72 floor of Brisbane’s highest residential building with towering views of the city skyline and sweeping panorama out to the ocean. This, and the fact that the building was new, made up our wow factor – the reason guests would chose our listing over the competition.

How much can you pay in rent and still make money?

We knew from our research on AirDNA the gross revenue that we could expect from renting similar a 3 bed 2 bath property in Brisbane City. AirDNA shows you the average occupancy level (nights per month) and nightly booked price for a particular area and a particular type of property. You can validate this by viewing the real earnings of your competitors, also using AirDNA.

We then estimated, from the training material we had, what our costs might average out at per month to run the Airbnb listing, in addition to rent. These costs covered things like power, water, internet, laundry, snacks, insurance and any small maintenance issues that we might need to fix.

From these figures, we were able to calculate the most we could afford to pay in rent and still make a good profit each month. That maximum rent was $1000 per week, which was right on market for a furnished 3 bed, 2 bath new build property in Brisbane City. This is another critical reason to use AirDNA and to get access to all of the templates available through the BNB formula course if you’re serious about turning this Airbnb strategy into a full time income or business.

Our Airbnb costs, gross income and net profit revealed

This is the first time we’ve revealed the numbers from the inside on one of our Airbnb listings where we didn’t own the property. We’re sharing it because we hope it benefits you if you’re thinking about making money on Airbnb without any property of your own and trying to understand the cash flow proposition and business risk.

Item	Monthly Expenses
Rent	$4,333
Power	$177
Internet	$80
Gas	$40
Water	$30
Laundry & cleans	$1120
Key service	$50
Consumables	$77
Other	$20
Total Expenses	$5,927
Airbnb Gross Revenue (after fees)	$10,583
Other revenue (after fees)	$1,735
Total Gross Revenue	$12,318
Net Profit	$6,391

Expenses in Australian Dollars

So what does these figures mean?

Here’s three valuable take home points from the actual monthly figures we’ve shared today that will help you to succeed:

1.You need to be confident your revenue from bookings will more than cover your monthly costs.

In our case, these monthly expenses of $5927 were fairly typical. No expenses for maintenance were incurred that month but you’d want to factor a maintenance cost in. You also need to factor in expenses to run this type of Airbnb business. These include insurance, your own internet costs and computer costs, and any other administrative expenses you might have.

The way you develop this confidence? Look at the data you can get on AirDNA and do your sums. Our advice is don’t sign a rental agreement on any property to list it on Airbnb before you do your homework.

2. There are peak and off peak seasons with most areas. You need to stay right on top of monthly pricing to make a profit like this.

Know when your season peak price nights are and charge accordingly. This month was so profitable because we knew a peak event occurred in the city during the month. The nightly booked price for apartments with a spectacular view of the city skyline on one particular night was $2000. Imagine if you missed that and just charged the normal rate?

You can find nightly advertised prices and forecast future nightly prices (based on booking demand) in AirDNA.

There are also pricing services that you can use to make sure you take advantage of changes in demand for accommodation in your market. One such service is PriceLabs.

3. Occupancy rates matter to your success. Which means the quality of property you pick to list on Airbnb is critical.

You can find average occupancy rate data in AirDNA. You need to hone in on the rates that apply to your particular type of property. One bedroom places will book differently to 3 bedroom places. The quality of property your rent and wow factor will influence your booking rate.

But once you know the average occupancy rate for your area and have found a quality property with wow factor, just focus on the top earning properties in that area and either copy what they do (in terms of styling, listing, added value), or do it better. If you follow this advice, you will almost certainly beat the average occupancy rate you find on AirDNA. We routinely beat the average occupancy rate by 10% to 20% with this property, and some months were 96% booked.

The final word – in God we trust, all others bring data

Making money from Airbnb without owning property is a fantastic side hustle. It’s entirely doable with no experience. It’s fun and it doesn’t take long to start making a good secondary income stream. With a couple of properties like this you could literally quit your job and make a different life for yourself and a better lifestyle.

But you can’t just jump in and expect immediate success without knowing what you’re doing and without looking at the data. There is a bit to it, some stuff to learn. It’s all entirely do-able though. We can vouch for that.

The two tools we used and that were critical to our success we have shared with you today -:

AirDNA

BNB formula.

We can’t recommend these highly enough. They do cost some money. But it’s one of the best investments we’ve made in ourselves because of the money we made.

If you’re interested in reading more about making money on Airbnb check out our other great posts:

Til next time have fun, be happy and do good freedom seekers!

And please give us a like or share if this post gave you value you couldn’t find elsewhere on the internet!

How to make passive income from property, double your money & pocket a 15% annual return

Tara Passive income ideas, Real estate July 14, 2021July 25, 2021financial freedom australia, passive income from property, passive income ideas

If I said you could make an extra $9360 a year passive income from property with just $60,000 invested, would that get you to read this post?

It should, because you can.

And I know you can because we did. As first time property investors. We also doubled our initial investment while doing it.

In this post we’ll share how we created an a cool passive income stream and 15% annual return from our first investment property using just $60,000 of our own money. We’ll also share how we doubled that initial investment in just 12 months and reveal just how much our $60,000 initial investment will make us all up.

The wealth building potential of dual income property

This is the second article in our property investing series on the wealth building potential of dual income property.

To get the background you need for this post to make sense, check out our first post in the series which covers what a dual income property is. The second post explains how to buy the right dual income property.

For now, we’re going to assume that you’ve had a read through the series and already know why dual income property can be a great property investment strategy for financial freedom. We’re also going to assume you know what sort of dual income property we recommend investing in. As a quick recap, here is a photo of our dual income property taken from when we bought it in 2012. The property is a triplex, which means it is made up of three apartments on the one title.

Why not all property investments are equal

Step 1 – buy the right dual income property

This is where it all starts with manufacturing capital gains making passive income with property – you need start out buying the right property. So what are you looking for exactly?

We started with by apply what we learned from Robert Kiyosaki’s Rich Dad education – An asset is something that puts money in your pocket.

A lot of property investors don’t realise this and so are actually buying liabilities when they invest in property. Liabilities take money out of your pocket. This is also where a lot of people fail at property investing – they buy, then find out they don’t have the cashflow to hold the property and have to sell. Sometimes for a loss.

So we knew we were looking for a property that could produce enough income to cover its holding costs and put a little money in our pocket. If you’re read part 1 in our dual income property series, you’ll know to end up with money in your pocket each month you need a rental yield of around 10%.

That knowledge led us to to start looking at dual income property because of the multiple rental income streams.

How to make passive income from property using a dual income property strategy

As we were looking at dual income property we found that most were advertised with a gross rental yield of around 6%, which was not enough to put money in our pocket after holding costs. So we had to improvise. We needed to find a way to increase the rent of any property we invested in, for as little outlay as possible. Here’s what we started looking for:

A dual income property with apartments or units that are rented at below market rates. This means becoming familiar with the rent prices for similar types of properties in the local area.
Apartments that were tenanted with upcoming lease end dates if possible. We’ll reveal the reason for this later.
A structurally sound building with cosmetic renovation potential.

Our triplex investment

Our triplex has two x 2 bedrooms apartments and one x 1 bedroom apartment. At the time we purchased it, two of the units were rented with one approaching its lease end date in 3 months. The third had just come out of a rental lease and was vacant. The rents were:

Unit 2 – 2 bedroom 1 bath 1 car – $190/week
Unit 3 – 1 bedroom 1 bath 1 car – $160/w
Unit 1 – 2 bedroom 1 bath 1 car – vacant but was rented for $190/w

Total rent – $540 per week.

So we went onto the local property rental app and researched exactly what similar properties (but more up to date) were renting for.

We found that similar 2 bed 1 bath 1 car walk up apartments were renting for $240 per week.

1 bed 1 bath 1 car apartments ranged from $180 – $210 per week.

Based on this, we knew that if all of the apartments were modernised we could achieve a weekly rent of at least $690 per week. $150 per week better than what the current owner was getting. We also knew that vacancy rates in the area were tight, hovering at around 1%. Given anything below 3% means that rental demand is higher than supply, we were confident of being able to raise rents further in the near future.

So, Box 1 and 2 ticked and high fives all round…

The triplex we ended up buying was also structurally sound with PLENTY of renovation potential. The brick footings, walls and timber framing was all as solid as a rock but each of the units were like time capsules back to the 1970s.

Box 3 – ticked also..

Here are some photos and yes, this is really what the units looked like in 2012!

Step 2 – use other peoples money

We had a promising property on our hands so the next step was to make sure that we invested in the asset in a way that would allow us to pull off our passive income and capital gains plans.

The property was listed for sale at $438,000. We had roughly $140,000 in the bank and knew we needed some of that money to renovate. We also wanted some of our savings to stretch to a deposit on a home to live in.

We needed to make our cash go as far as we could. So we offered $400,000 and applied for a bank loan on that basis, with a 90% loan to value ratio (LVR). This meant we were required to put in $40,000 plus the buying costs of around $14,000 (thanks to stamp duty – or property taxes for non-Aussies).

Our offer was accepted so we invested $54,000 of our own money into the initial purchase. This left us with cash of around $40,000 to renovate and a $45,000 deposit on a home.

Step 4 – vacate and renovate one apartment at a time

The lease arrangements on a dual income property are critical when you’re buying. Existing leases provide proof of rental income for the bank, which is good for your loan application. But the timing of leases is especially important if you know you’re going to renovate the apartments. This is because renovations take time and you still need to cashflow the property (make your loan payments) while you do those renovations.

The rental agreements in place across our triplex were ideal as we could renovate Unit 1 immediately and still have the rent from Units 2 and 3 ($350 per week) to help pay the $360,000 mortgage we had just taken on. The lease on Unit 2 was due to expire within 6 weeks of us owning the property, which meant we could renovate the two 2 bedroom units back to back.

Multiple rental income streams provide one of the biggest benefits of investing in dual income property – income diversity. This helps you manage investment asset risk overtime.

The rent we were getting was not enough to cover all of the property’s holding costs, so make sure you budget some holding costs out of your own pocket over the period of the renovation. You should also factor in a reasonable time to advertise and rent out the newly renovated apartment. We allowed 10 weeks for in total for two back to back unit renovations and listing of both. This was a short and ambitious timeframe, but the builder was fine working with us to this schedule.

Our Triplex renovation

We started the renovation of Unit 1 immediately after the property settled. We had negotiated access to the empty unit during the purchase period to get builders quotes and signed a contract with the builder who was available and reasonably priced.

The most critical part of the renovation piece? Not to over capitalise.

We could have gone nuts with the renovations on these apartments given they were straight out of the 80s. But we didn’t. The target market research that we did was critical here. Our target tenant was a new renter or young couple, looking for affordable but modern accommodation. We’d also looked at what similar rental properties were offering to achieve the target rent we wanted for each unit.

What we didn’t spend our money on was just as important as what we did.

We didn’t install aircons, dishwashers, new built in wardrobes, high end fittings or a high end kitchen. We went for a functional but affordable kitchen and a paint and repair on existing wardrobes. We spent most of our renovation budget on a solid, long lasting bathroom and on bringing up a ‘hero piece’ in each of the units that would get renters to rent the place. In this case, it was the polished timber floors that we found under the disgusting 40 year old carpet…

Here are some before and after shots for your viewing pleasure 🙂

Bathroom before and after

The one bedroom unit before and after…

One of the 2 bedroom units before and after

The renovations cost $20,000 per unit with around half of that being spent on gutting and installing new bathrooms. We also moved some walls in the 1 bed unit to improve the design by providing a more open living dining space and access to the bathroom from the living instead of through the bedroom.

Step 5 – re-list each apartment with new photos and higher rent

The renovations of units 1 and 2 were completed within 8 weeks. We then had the real estate agent take new photos and re-list the properties. They took around 3 weeks to rent. As we expected, the market had moved a little since we put the triplex under contract. We rented both units out for $245/week. We were able to increase the rent further to $255 per week within 12 months.

The one bedroom unit was not renovated until the lease ended – which was around 10 month later. We achieved a rent of $220 per week for that unit.

Our $9360 a year passive income stream

By renovating each apartment our total rental income went from $540/w to $720 per week. So within 3 months we had created a $180 per week passive income stream from the renovation. Annualised, we made an extra $9360 passive income from property with this strategy. Thats an annual Return on Investment of 15.6%.

If you consider the upgrades we did have use life of 15 years for the kitchen and probably 20 for the bathroom that’s a payoff of $140,000 on a $60,000 investment over that period.

And that’s only half the story.

How we doubled our initial investment

The other equally important aim for this, our first asset investment, was to be able to leverage it into other assets. That’s why we chose a dual income property. It helps with future loan servicing requirements of banks because of the cashflow. Value creation strategies like renovating can also increase the value of the property allowing you to take out equity for future investments.

After renting the property out for 12 months we had it revalued by the bank. The valuation came in at $520,000, which meant we had created $120,000 in equity from the renovations. In addition to the extra passive income we had doubled our initial investment of $60,000.

Our total capital gains and passive income profit on the $60,000 we spent? Somewhere in the vicinity of $200,000.

The final word – passive income takes work (at the start)

As is true of all passive income, this investment took work. It took time and research to find the right property and plan the right kind of renovation.

It also took financial literary – particularly in how to invest in good real estate assets. We got that literacy through a Rich Dad education and you can too – it literally costs just a buck to start!

It took sweat equity – we did all of the painting and installed the blinds and some of the fittings ourselves, spending holiday leave from our wage-earning jobs hard at work

It took risk too. But as we’ve explained, we calculated and took steps to manage that risk.

To us, the pay off for all of that hard work has been and continues to be worth it. You see, the story doesn’t end here and neither does our profit. In part 3 of this series we’re going to explain how we were able to double down on the capital gains from this one property.

For now, I hope you got value from this post where we step out, in a way that you can replicate, just how we made $9360 extra passive income from property within 3 months and turned $60,000 into a $200,000 profit.

Til next time have fun, be happy and do good!

Oh, and by the way we did get that home with our $45k 🙂 More about that later… please give us a like if you want more content like this!

Want to save money faster? Work from home

Tara How to save money faster July 12, 2021July 30, 2021Financial freedom, remote work, save money by working from home

What if I said you are working more hours just for the privilege of going to work?

If you commute into an office or have pets, or just even if you’re female, I’d wager a bet that this statement is true.

Not only is it true, if you stand back and take a look at it you’ll probably start wondering if it’s flat out ridiculous.

– Ellen Goodman

Anyone else feeling a little craziness about this kind of ‘normal’? Well financial freedom seekers, all is not lost!

In this post, we’re going to find out exactly how much money working from home can save you and how quickly those extra dollars can mount up. We all know that cutting expenses and saving income is a critical step in becoming financially free. Here’s a different take on how you can save money faster, and use it to crank up your financial freedom plans.

The true cost of work

How much does it cost you to go to work each week?

The answer to that is going to be different for everyone based on where you live, where you work, and your situation at home. So we’ll take our household as an example that you can use to do the math for yourself. In this real life example is me – a former urban dweller living in a capital city of Australia. I had a car, two dogs and no kids. I commuted into the city to work five days a week spending about 1 hour 10 minutes one way. Here is what it cost me to go to work:

Weekly cost of going to work

Most of the expense items in this table below, like doggy day care, train fares, lunches and coffees were real expenses over an average work week for me. Other things like clothing, shoes and work events are estimates. The cost of cosmetics is taken from this 2017 study, so its probably a bit conservative 4 years later. But then again my spend on make up would not be high among peers.

Expense item	Weekly cost
Train fare**	$54.00
Work suits**	$35.00
Heels**	$25.00
Cosmetics*	$70.00
Lunches**	$20.00
Work events**	$10.00
Coffee**	$25.00
Vitamins*	$5.00
GP visits**	$5.00
Doggy daycare**	$120.00
TOTAL	$369.00

My weekly cost of work

In the table I’ve double starred ** the expenses I straight out avoided by working from home during 2020…

…and single starred * the expenses I reduced by working from home.

The truth is that by working from home I didn’t need to catch the train each day (leaving my expensive car at the station). And because I wasn’t jammed like a sardine into a metal test tube hurtling along a steal track for 90 minutes a day, I didn’t end up with half the viral infections I normally would. Avoiding the GP saves dosh y’all.

Working from home, I wasn’t tempted to buy lunch once a week or go on a daily coffee run with my colleagues. I wasn’t morally obligated to join in on after work drinks where I would inevitably end up shouting a round or two. Nor did I need to front up in suits each day or wear out my shoe collection traipsing endless city blocks from the train to the office.

$20,000 pay rise not on the cards? Just work from home

Over the course of a year, working from home saved me around $15,000.

An unexpected bonus during an otherwise sh*tty 2020.

That’s net savings peeps. Now think about the equivalent pay rise you’d need to be in the same financial position at the end of the year.

Depending on pay scale and tax rate, to be $15,000 better off, I would have needed a $20,000 pay rise. That’s based on an average middle income tax rate of around 30%.

What are the chances of walking into your bosses’ office and then walking out with a $20,000 p/a pay rise?

If you’re renting and trying to save up big for a home deposit, need some cash fast for whatever reason, or just starting out on your financial freedom plan – think about this:

Instead of walking into your bosses office and trying to negotiate a pay rise, try negotiating a work from home agreement.

In all likelihood you’ll end up with more coin in your pocket WITHOUT all the extra expectations that a pay rise would bring.

Now granted, not all jobs can be remote but from my experience, even if it’s a couple of days a week, if you can wangle it the savings are worth it. Perhaps you are thinking ‘that’s all good but there are also extra costs to work from home’. And you’d be right. You can expect your water and your power bill to go up. But these are tax deductible. And you’d be getting better value for money from your rent or mortgage each day. 🙂

Work from home part time for the same money

Equally, if you want to move to part time work but think you can’t afford the drop in pay, consider approaching the problem with an ‘out of the box’ solution – work from home! By way of example, if my wage was $55.00 per hour gross, that means I was working nearly a whole day a week just for the privilege of going to work!

Think about what that means for a minute…If you could work entirely from home, you’d be able to work a day less per week and still be in the same financial position!

What the…?

You’d be buying back a day of your life every week just by working remotely. And that’s not the only time you’d save. For me I had 2 hours and 20 minutes extra in my day each day just by avoiding the daily commute. That’s an extra 11 hours of ‘me time’ each week! Yay… 🙂

Work from home opportunities

I hope this post has given you food for thought on the different opportunities that are out there now to work from home, save money, improve your lifestyle and take a step closer to winning your own financial freedom. And there are tonnes of work from home opportunities. If you want to be employed by someone else a search on Australia’s biggest job search website seek.com.au revealed 27,983 work from home jobs found across all categories and over 16,000 on indeed.com.

And then there’s remote work of the self-employed variety. Here’s where the opportunities truly abound. Why? Because you’re suddenly part of a global workforce sitting at home on your computer. The world of freelancing and virtual work has exploded since 2020 and it may be time to get your share of the pie.

Where to start?

Fiverr. It’s a freelance services marketplace and simply the biggest and most diverse market to sell your unique skills and expertise to a global audience.

Just take a look at the good money you can earn as a social media copywriter on Fiverr:

Freelance social media jobs like this didn’t even exist 5 years ago. But digital skills like these are becoming more valuable than every as more business and consumer retail moves online.

In fact, the World Economic Forum has just compiled a list of the top 10 hottest jobs of the future and 8 out of 10 of them are remote work opportunities. We’d say in a few years you’ll find these kinds of jobs by advertising on global marketplaces just like Fiverr. And digital skills are just the start. There’s lifestyle, business, programming and tech, graphics and design, video and animation and data jobs for the taking.

The final word – remote working can free you sooner

I’m gonna go out on a limb here and say for many of us seeking financial freedom remote work is one of the biggest opportunities to come out of 2020.

Could an army of office workers discovering the benefits of remote working explain why unfilled jobs in the US have soared to record levels this year? Maybe…

In an upcoming post I’ll explore the one of the biggest benefits of remote working and working from home that no-one is really talking about – so stay tuned!

So, fast forward into the future 12 months… now that you’ve taken the plunge, started your remote working career and have an extra $15,000 in the bank, make sure you put it to good use! Remember cash is trash peeps!

Invest it as capital using one of these Traditional wealth building strategies or invest in learning some of these new leveraged ways to build wealth – you got it, mostly from home!

Til next post, have fun, be happy and do good!

And as always, please share the love if you appreciate the content!

How to make money on Airbnb without owning property

Tara Airbnb profit, Passive income ideas July 8, 2021May 10, 2022Financial freedom, how to make money on Airbnb, passive income 2 Comments

If you think it’s impossible to make money on Airbnb without owning property, our personal experience will convince you otherwise.

In fact, we’ve made a lot of money on Airbnb without owning property.

And it’s a lot easier than you think.

In this post, we’ll share the Airbnb business model basics that took us 3 months to go from $0 to $10,000 per month profit. We’ll also share 5 alternative Airbnb income streams that you can use to start making money from Airbnb TODAY. All without owning any of your own property.

How to make money on Airbnb without owning property

The truth is there are a lot of ways to make Airbnb profit with none of your own property. We are going to share the most lucrative model for you. The model you can use to build passive income quickly and quit your job. But don’t forget to read to the end of this post to see the abundance of opportunities out there to make good money from Airbnb.

Before we get into the how, lets look at what it means to make money hosting on Airbnb without owning property. We’ll also run through why property investors would want to partner with you, and how much moolah you can make with this Airbnb strategy.

What is hosting on Airbnb without owning property?

It’s just partnering with other property investors to list their properties on Airbnb, with their permission, so that you can arbitrage the rental income. It’s entirely legal if you do it with the right arrangements in place.

If you’re keen to learn more what rental arbitrage is and how we made it work for us, check out this article “Can you really make money from rental arbitrage“.

Essentially, rental arbitrage is where you take out a rental lease on a property as a tenant. The rental agreement must include that the owner/landlord agrees that you’re going to list the property on Airbnb.

Then you set up the property as an Airbnb listing – which means all furniture, styling, appliances, linen, kitchenware and so on comes out of your pocket. Once it’s all set up, you list the property on Airbnb and manage the entire thing – online listing, property operation, and Airbnb income.

You pay the rent, the power, the water, the WiFi bill and cover basic maintenance costs.

Each month, you need to make more money in Airbnb bookings than your cost of rent and your operating costs. This is your profit at the end of the month and what some folks call ‘rental arbitrage’. And, it is entirely possible to turn this into passive income if you know the systems to use.

Why would property investors agree to you listing their property on Airbnb?

We’ve been landlords to long-term tenants. The truth of our experience was that neither the tenant nor our property manager gave a toss about looking after our investment asset. 5 years after a complete internal renovation, our properties were looking tired and old again from a lack of care. This simply can’t happen when a property is listed on Airbnb.

A property on Airbnb MUST be keep in great condition or it just won’t get bookings. So owners know it will be cleaned multiple times a week and that you’ll take care of maintenance costs for them. If the property doesn’t get booked, you don’t make money.

You should also take out short term rental insurance and show this to the property owner. This will give them peace of mind that if anything goes wrong your insurance will cover it not theirs.

Can you make money with this Airbnb strategy?

The answer to that one is a big yes! You can make a flood of passive income listing other peoples properties on Airbnb – if you do it right!

We’ve done it with three properties. We made $10,000 PROFIT in a month listing these three properties below that we didn’t own. You can read more about it here.

Hosting other people’s properties on Airbnb is truly one of the lowest cost, highest cashflow income opportunities we’ve come across in all of our financial education and money making endeavours. And did we mention it’s one of the best passive income ideas out there.

Check out this post where we reveal how much we made in one month with this single property that we didn’t own – the full cost, revenue and profit figures are all laid out for you..

And check out this case study that shows the full income, expenses and profits from one of our rental arbitrage properties.

So how do you get started?

We started by learning how to do it from the experts and you should too.

Why? Because you want to make sure what you do works! You need to know the following before you leap:

what sort of properties to look for,
how to find and pitch property investor partners,
what legal agreements to put in place,
why its important NOT spend too much money setting up your listing,
an insight into the Airbnb algorithm,
how to guarantee immediate bookings,
how to fill your calendar from day one.

We followed a step by step formula and within 4 months we had paid back the set up costs and we were making a cool profit of $4000 per month on average. In month six, we turned a $10,000 profit in one month across the three properties. That was peak season Airbnb profit AFTER all operating costs and rent. Made bank peeps. Fat stacks of passive income in our pocket.

If you want to get started making sweet cash and being your own boss, we’d recommend taking up this opportunity to learn from the best. It’s an online course called the Bnb Formula. You’ll get the literal step by step formula to follow, with training, templates, tools, landlord pitches, legal info and a bunch of bonus – all done for you. This training is gold and works just about anywhere in the world – the steps are the same!

If you don’t want to shell out for a course just yet, then bookmark our Host Hub page. This is where we’ll be launching our upcoming eBook series “Making money with Airbnb“. The series will cover how to make money on Airbnb without owning property.

How to make bank on Airbnb without hosting

We’re Airbnb Superhosts of multiple properties and we know what it takes to run a successful Airbnb listing. You’re essentially a mini hotel, which means you need to take care of a lot of the same stuff that hotels take care of for their guests.

A beautiful place to stay and relax, cleaning, linen, maintenance.

Check in, check out, local information services.

Gifts on arrival, instructions for how to use the home and all its gadgets and appliances…

These are some of the things that Airbnb guests expect in 2021 when they book your listing. But they also create a killer opportunity to make money from Airbnb, without owning investment property.

You see, because of the growing expectations of Airbnb guests a whole ecosystem of service providers has popped up around Airbnb stays. Services to Airbnb hosts and owners that either can’t or don’t want to manage all of their Airbnb hosting tasks on their own.

We use multiple service providers to help run our Airbnbs and still find there are gaps in finding all of the services and the quality that we need – particularly in regional areas.

These services are also important because the little known fact is that many Airbnb hosts run their listings remotely and rely on other people and apps to help them.

So let’s run through the opportunities that you can take advantage of TODAY to make a nice side income from Airbnb or even turn it into your full time employment.

All with zero property to your name…

Here’s our top 5 ways to make money on Airbnb without hosting any property

Bundled cleaning and linen services
Maintenance services
Concierge services
Cohosting services
Property Management services

#1 – Bundled cleaning and linen services

It’s no secret Airbnbs require cleaning between each guest. You’d think it would be easy therefore to go online and find a cleaner from the many businesses and websites advertising. But it’s not. Why? Because Airbnb hosts need cleaners that also do linen. This is a gap in the market for anyone looking to start up a side hustle or business.

Good Airbnb bundled cleaning and linen services are hard to find, particularly in regional areas. That means an opportunity for you to be self employed and to make money from Airbnb.

#2 – Maintenance services

We hire a maintenance guy to look after our yards, gardens and any small maintenance jobs in our Airbnbs. These can be things like changing light bulbs, re-attaching fittings, small repairs, and smoke alarm testing. The same guy does our lawns, waters plants, empties the trash and keeps outdoor areas tidy. If you’re the outdoors type this can be pretty easy work to do and with a going rate of $30 – $50 per hour it pays well too.

#3 – Concierge services

This is when you become the eyes and ears ‘on the ground’ for Airbnb hosts that manage their listings remotely. An Airbnb concierge would take care of tasks like random cleaning inspections, stock inventories (toiletries, linen, kitchenware, any pantry supplies), inventory replenishing and back up cleaning. They would also handle problems with lost keys and guests unable to check or use an appliance at the property like WiFi.

#4 – Cohosting services

Cohosting services involve managing the ONLINE part of running on Airbnb. So your target market is perhaps the non ‘tech savvy’ Airbnb host or the side hustle Airbnb host.

Your job would be to manage the online listing so that it is well booked. Making sure the listing appears on the first page of Airbnb guest searches. Airbnb has an algorithm with requirements that each listing must meet to appear at the top of property searches. You’d need to know what these requirements are and meet them.

Daily tasks might be managing guest communications, making sure the listing details are up to date, that the calendar and pricing are up to date and that you’re doing everything you can to hack the Airbnb algorithm.

Co-hosting can even extend to managing the rental income and doing the books (income and expenses for tax time) for the Airbnb host, depending on your skill set.

The best thing about this job is that you could do it virtually, from anywhere. So you’re like a virtual assistant for busy Airbnb hosts and you can take on and cohost properties anywhere in the world. Airbnb provides the separate login access for co-hosts that provide these kinds of services.

#5 – Property Management services

Property management services are just that. Providing an entire A to Z property management coordination for the busy Airbnb Host. It would include managing the listing online and coordinating all services needed to run the Airbnb – cleaning, linen, trades and inventory etc.

In Australia, this requires a real estate license, but the fees you can charge are about double that of managing long term rentals. The secret is that a lot of the coordinating of Airbnb ecosystem services can now be automated with apps. If you know how to do this then providing property management services to Airbnb hosts can be quite lucrative.

Where to find Airbnb side hustle income streams

If you want to set up a side hustle Airbnb income, you’re going to need to advertise your services somewhere Airbnb hosts will be looking for them.

If you’re looking to provide cleaning, linen, maintenance or concierge services we’d recommend jumping onto Facebook and searching for Airbnb forums. There are tonnes of Airbnb host communities online and many start with Facebook. You could also advertise in Oz on Gumtree or Oneflare for your local area.

If you’re offering cohosting services you can advertise on popular online platforms. Airtasker is popular in Australia, but great a site to use is Fiverr where you can offer both VA and cohosting services.

If you want to make a full time income from Airbnb Property Management it’s probably best to start with your own website and Facebook page.

The final word – if we can do it, anyone can

So Airbnb side hustler wannabes, there’s plenty of opportunity around to make awesome money with Airbnb. And it’s only going to get better with Airbnb bookings forecast to grow in 2021 and 2022. It’s time to get your share of the wall of money that’s coming as countries open up and get back to the business of travelling and having fun!

Next steps for your Airbnb learning

Firstly, this Bnb formula online training can help you get started with hosting other people’s properties.

Secondly, here are some of our best articles on how to make money on AIrbnb:

Thirdly, bookmark out Host Hub and watch out for our new eBook series “Make money with Airbnb”. Check out our other Airbnb articles in the Host Hub for more gems like this!

Or lastly, get going on Fiverr offering your services to Airbnb hosts.

If we can make money without our own property on Airbnb, anyone can!

Until next post, have fun, be happy and do good!

And don’t forget financial freedom seekers, if you dig our content, please share the love!