Money is something we all need. Earning more money can be challenging! Here are 6 simple ways to earn more money.
1. Earn more money by getting a job
This might seem overly simple, but jobs are by far the fastest way to earn more money. By providing services to a business you provide a limited resources that they cannot simply manufacture, though with technology many jobs are being replaced with machines. This is increasing making labor jobs in shorter supply. In a traditional job you will earn more money by training your time for income. However you need to understand that in some states and in most countries, there are taxes imposed for income generated through working in a job, so your income will be reduced and it can make earning more money harder as the more you earn, the more you pay taxes.
2. Earn more money by making your money work for you
Some people who have at least some money can then use that money by investing it to then create more money. This can be difficult for someone who does not already have some money to invest or whose expenses currently exceed their income so all the money they earn is spent on living and there isn’t any left for investing. This however can be a powerful way to earn more money as it does not require physical labor to increase your income. The idea is to take money, invest it and earn more money while NOT spending the money you initially invested, then simply use the earnings to spend, but never removing the original investment. Many refer to this as passive income.
3. Earn more money by paying less taxes
This strategy might not seem that obvious to many people who want to earn more money, but it is a simple accounting principle that when you need more money you can either increase your income or reduce your expenses. One of the biggest expenses most people have, but aren’t even aware they have is taxes. This is because most people have a traditional job wherein they receive a paycheck. This paycheck however is not the full amount of their gross earnings assuming they have filed the proper paperwork and their employer follows the laws. For many people the income taxes come out of their paycheck BEFORE they even see it. So this is an expense though it isn’t one you see, therefore it can be hard to imagine how to change it.
3.1 How to reduce your tax expense
Income taxes are some of the highest taxes you will pay. Some states do not have an income tax. Typically where you earn the income is where you will pay tax on that income. So if you live in say Texas, but work in Louisiana, typically you will pay the income tax of that state of Louisana. This can be powerful if you either live in a state with no income tax or live VERY near a state with no income tax. If possible try to find work in a state with no income tax as this will reduce the penalty for earning more money. Beware that states have to generate income in other ways, so if there is no income tax in the state where you live or in a nearby state where you can find employment, then likely there is another tax or way for the state to make revenue, so be aware of sales tax, property tax etc. As these will also penalize you for living where you live and/or spending your money. Which leads me to the next strategy.
4. Earn more money by shopping in states without a sales tax
If possible spend your money in states with no sales tax. Therefore they do not penalize you for spending your money. Depending on which state where you earn your money and if you are able to spend money in a different state with no sales tax, this could potentially save you over 16% of your income. A substantial amount if you have a income that is heavily taxed and need to spend a lot of money to maintain your standard of living. Think of taxes as an expense and reducing your expenses is often the best way to earn more money without doing any more work.
5. Earn more money by starting a simple business
A secret that many people have heard of, but don’t fully understand is the power to earn more money by starting your own business. Many people envision having dozens or hundreds of employees and sitting on a beach in the Caribbean Sea drinking mojitos, but few know that this is one of the easiest ways to save a ton of money, once again, but adding income and by reducing your taxes.
5.1 Earn more money working from home
Home based businesses come in every shape imaginable and there is one that fits the interests of everyone. The power of a small home based business is they typically have a very low initial investment, they are designed to limit your liability, the marketing, manufacturing and delivery systems are all built for you, so you can focus on strictly selling. Typically many of these businesses have a system built in to help you create passive income also, which is income you work once for, but pays you over and over again. Typically these businesses include selling product as well as enrolling more people in the business who then do the same thing and through this process you build a group of people who are working under you in the business and each time they sell a product or they enroll another partner, you earn money.
5.2 Earn more money by reducing your tax liability on your income
A home based businesses typically allow you to access tax provisions that aren’t available to what we call W2 income, or income earned through a traditional employer. These provisions include the ability in most cases to reduce your income (and therefore you tax liability, since the less “income” you have, the less tax you pay) by using what is referred to as a deduction for things that you might normally to be able to use to reduce your income. For instance, if you use an area of your home exclusively for your business such as an office or to hold inventory (such as candles, supplies etc) you most likely are able to then claim this area and an equal portion of your utilities etc as a deduction on your income taxes and therefore will reduce your income tax liability. Many other things can be used in this capacity such as internet service, phone service, mileage you drive for business purposes such as meeting with clients, going to the bank, picking up supplies, traveling, eating meals far away from home, office supplies, automobile expenses such as fuel and much more. Before you engage in a tax strategy you should always consult with an accountant or attorney to ensure you are not putting yourself at risk for audits or violating tax laws.
5.3 Earn more money by gaining more control over your money
A home based business can also allow you to earn more money by giving you more control over your money. This is a simple principle which goes like this. As long as the money is in your pocket, you have control over it. What do I mean? I mean if you have the money, you can decide how to spend it. So lets say for example that you earn a large amount of income in a single month and you don’t have income taxes taken out of it immediately, such as in the case of a W2 income, you will have additional income that you can now leverage or use to create earn more money. Perhaps you have an opportunity come your way or could purchase additional products to then resell and earn more money. The point is that when you control ALL of your money, you can then take advantage of many new things that would otherwise pass you by. Depending on your tax circumstances you may only need to pay your income taxes once per year (most times you are required to make quarterly tax payments, though even this is better than having these taxes taken out of your paycheck every two weeks, as this gives you time to leverage that income and make more money or spend it strategically to reduce your income and grow your income sources before you have to account for it ot the government and pay income taxes on it.)
6. Earn more money by earning passive income
Passive income for many people is just a dream. However not all passive income is created equally. Passive income is not a legal tax term, but a term used to describe income you work for once, but pays you over and over. This type of income can come in several ways, but they way to earn more money we want to review today is investing. There is a tax term referred to a capital gains tax. This is a tax very different than traditional 1040 income. It is taxed very differently. This is one of the many secrets of the ultra wealthy. If you do careful research you will find out that they have no income. They don’t have a job and therefore do not pay social security tax, unemployment tax, FICA tax, state income tax etc. They instead invest in other source of income which pay them “investment income” which the government taxes at nearly half the rate of income tax. Also in most cases, unlike income tax, capital gains tax does NOT increase as your income goes up. Therefore the more you earn, your tax scale does not increase. Search for ways to earn more money by investing in sources of income which pay you “investment income” and then you will only be liable for capital gains tax. One of the most notorious ways to earn this type of income is through investing in stocks and real estate.
What are some ways you have found to earn more money? Tell us below!
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