Day#18: Pick a hobby you can monetize.

Posted by FrugalPinoy on Dec 7, 2009 in 25 Days to Healthier Finances, Earning and Income | 0 comments

This is Day #18 of “25 Days to Healthier Finances”, a series of blog posts where Frugal Pinoy readers and myself work on 1 task a day to make our financial lives better. Please stay tuned for the next installment of this series, which will be up tomorrow. Here’s today’s installment:

Let me start today’s task with some background information about my main source of income – writing. I started working as a writer when I was still in college. I needed money to support myself and pay for tuition, but also needed a flexible schedule so I could attend my classes. Writing was my favorite hobby, something I did non-stop since I learned how to do it. Ever since I was twelve I’ve been keeping journals and writing notebooks as a habit. This made me think that maybe I should start doing that for a living. Something I truly enjoy. Something I’m obsessed about. Something I was doing anyway.

So I started working as a freelance writer. This has been my major source of income and I’ve never had the need to apply for a regular office job because of it. It feeds and houses a family of four, keeps me debt free, and allows me to have a stable emergency fund. Plus, it’s personally fulfilling.

Not bad for something that was “just a hobby”.

Today’s Task: Pick a hobby you can monetize.

Hobbies. We all have them. They can provide relaxation and escape, or they can become a lifelong passion. If you plan it well enough, it can be a source of income too.

List your hobbies, every single one of them, no matter how trivial or insignificant some may seem. Cooking counts, even if most people can cook. Yes, riding a motorcycle counts too, so does drawing. If you’re obsessed with a certain genre of books/film/music, there might be opportunities there too. If you like to collect things such as stamps, dolls, etc., that counts as well.

Then, looking at your list of hobbies, pick two or three that you spend the most time on. Explore and jot down ideas on how you can possibly monetize them. Here are some examples:

• Sell products and services related to your hobby. If you like making jewelry, why not try to sell some of your work via eBay or Sulit? Alternatively you can supply materials related to your hobby if they are hard to buy locally. I have a friend who made thousands of pesos from just selling special  Magic: The Gathering cards.
• Write a blog about it. Many people are now monetizing their blogs. If done well, your blog can become a great source of additional income (see The Personal Blogging Degree for more information on making money from a blog.)
• Teach others how to do it. This can be in a form of a class, a book/ebook that people can pay for, or even just a lecture or speaking engagement.When I was young my mother made extra income by teaching a baking class from our home, and I once got paid to teach a summer art workshop for kids.

Your hobby doesn’t need to develop into a complete business, buy you need to entertain (and act on) any urge you may have of monetizing it. Even a few hundred pesos each month won’t hurt, especially if you’re doing something you love anyway. Not everything you start will be successful, but you can always do enough research/planning/practice/testing to minimize that risk.

Have you ever made money from a hobby? How did it turn out for you?

Image by lusi from sxc.hu

My Investment Strategy

Posted by FrugalPinoy on Feb 25, 2009 in Earning and Income, Investing | 2 comments

Defining “investment”

For a simple definition, I’ll turn to Wikipedia:

Investment is the choice by the individual to risk his savings with the hope of gain.

What does this include? Most people think about stocks when they hear the word ‘investing’, but it could also mean a variety of things. This might include buying a very cheap second hand car for the purpose of selling it again. It’s also an investment if you buy old houses or apartments so you can fix them up and rent them out. The capital you use for a business can also be considered investments. In high school, my sister used her allowance to buy cheap sign-pen ink by the bulk and sell them at school for a profit – even that is considered an investment.

But there are also broader definitions of the word. Some people might say that buying a good suit to wear for a job interview is an investment.Taking part in a paid workshop or seminar might also qualify. The point is that the word “investment” can mean different things to different people, but for the purpose of this blog post, I’ll use the definition above.

My own investments

To give an example from my own background, let me list some of my major investments:

• Businesses that I understand well. The first major venture I invested in was Web Content Wow, a web content provider. At that time (it was 2003), I spent around $10 for the domain name, $6 for the hosting, and around a total of $150 on other miscellaneous resources. I also hired some writers I knew who could work with me. Considering the low capital, I made a profit within the first month.
• “Virtual” real estate. Domain names, blogs, and websites are the houses and condos of the internet. You can buy and hold, develop them, or sell them to others when they become more valuable. If you want this investment to be more passive, you can hire other people to do the maintenance for you.
• Information products meant for sale. I recently got into selling information products as an investment. This includes e-books that I publish or e-books from affiliate programs. Someday, I hope to include audiobooks into the mix. This is an investment because I pay for some start-up costs, and unless I write the e-book myself, this includes hiring some writers to do the work.

Although some of those investments produce “active” income, such as services I have to provide or projects I have to run, I still prefer “passive” investments that require little or no maintenance. Why? Because if you have to work too much to profit from your capital, then it’s more of a job rather than an investment. Your income still depends on your participation and effort.

What I do is try to make the above investments as passive as possible. I may put in some initial effort, but there should be no or little maintenance involved on my part in the long run. This ensures that I’ll won’t just be trapping myself into new tasks/jobs when I start a new investment.

What should you invest in?

If you haven’t gotten the idea from my own investments, here’s the most important rule I apply:

I invest in ventures that I understand well. If I don’t know anything about a business, an investment vehicle, or an industry, either I don’t invest in it or I try to acquire above average knowledge about it.

This may sound like a limiting rule, but at least it keeps my investments in an area where I have more control. I’m less prone to being scammed and fooled because I always know more than the scammers do. Also, this means I’m not dependent on other people making these investment decisions for me. And what’s the result I got from sticking to this rule? All my investments have profited.

Of course, this rule is a personal choice. Many people I know invest in things they only have a vague understanding of, if they have any understanding of it at all. But my money is such a personal tool for me that I wouldn’t want to invest it in something that I had no above average knowledge of – such as stocks. There might come a time that I’ll be knowledgeable in such things, but until then, I’m sticking to the things I know I excel in.

How about you, what is your investment strategy? How is it working for you?

Image by Fran Priestley