CNBC make it 2024-05-03 02:00:55


Richard Branson says money isn’t a good way to measure success: Focus on this 1 word instead

Richard Branson doesn’t want to be defined by his money.

Specifically, he finds it “quite insulting” when he is introduced as “the billionaire Richard Branson,” rather than as the co-founder of Virgin Group, he tells CNBC Make It. The reason: Nobody should view their net worth as an ultimate measure of success, and it’s “very sad” when making money is the sole focus of a person’s life, he says.

“Maybe in America, ‘billionaire’ is a sign of success, but that rankles me,” says Branson. “I think that your reputation is what you create.”

In Branson’s case, his reputation is often defined by Virgin Group, a venture capital and holding company that owns businesses in a wide variety of industries, from airlines and telecommunications to spaceflight.

The company is largely responsible for his estimated net worth of $2.5 billion, according to Forbes — but he chafes at the idea he created it to make money.

“Your reputation is [whether] your team of people who work with you are proud of what they’ve created,” Branson says. “Paying the bills at the end of the year is important, but what entrepreneurs are doing all over the world today — and the only reason they’re succeeding — is that they’re making a difference in other people’s lives. And that’s all that really matters.”

Whenever Branson launches a new venture — citing Virgin Atlantic in 1984 and Virgin Mobile in 1999 — he asks himself two questions, he says:

  • If I create this, can it be better than what everybody else is doing?
  • Can it make a real difference in the world?

Financial success has often followed, but Branson is adamant that money has never been his chief motivating force.

His first successful business venture, a youth culture magazine called “Student,” was primarily meant to challenge “stale” traditional publications, Branson has noted. It tackled cultural issues like popular music and campaigning against the Vietnam War.

“I wanted it to survive. And yes, I wanted to have enough advertising to pay the printers and the paper manufacturers,” he says. “But money was certainly not the motivation for running a magazine.”

Branson’s top advice for becoming successful

Branson’s advice: Seek out opportunities you find interesting and exciting. It’s a recipe for greater happiness, and you’re more likely to end up successful than if you’re only thinking about the bottom line, he says.

“We only have one life,” says Branson. “We spend a lot of time at work and it’d be sad if we’re only doing it for our paychecks.”

Of course, success is never guaranteed. If you do follow your passions, you’ll still need factors like talent and perseverance on your side to avoid falling flat, experts say.

But Branson isn’t the only billionaire who advises that personal fulfillment doesn’t always have to come from amassing great wealth.

“Success isn’t necessarily how much money you have,” serial entrepreneur and investor Mark Cuban told LinkedIn’s “The Path” podcast last year. “Success is just setting a goal and being able to wake up every morning feeling really good about what you’ve accomplished.”

Cuban, who grew up in a blue-collar family near Pittsburgh, has long held that his career path was dictated more by a desire to control his own time than any financial aspirations.

“Time is the one asset you can never get back. You can never truly own [it],” he said at SXSW in March. “I wanted to be … in a position where I get to call my own shots [and] spend time the way I wanted to spend time. That was always my motivating factor.”

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35-year-old making $11,400 a week in passive income: No. 1 tip for building lucrative side hustles

Ryan Hogue loathed how much time he spent in northern Virginia traffic. He calculated he spent nearly eight days’ worth of time sitting motionless in his car each year.

Life was otherwise good: It was 2016, and Hogue sat next to his best friend every day at his senior web development job. He had a side gig as an adjunct web development professor at his alma mater, George Mason University in Fairfax, Virginia. He was making $117,300 per year, but driving back and forth felt like a waste of time and money, he says.

He started thinking about ways to earn passive income and better optimize this time. That October, he started a dropshipping business, which quickly turned into a print-on-demand company. He later added online courses, one-on-one coaching services and a YouTube channel to his collection of income streams.

Three years in, those streams outpaced his two salaries, so he quit both day jobs in 2020. Last year, Hogue made over $1,600 a day, or roughly $11,400 per week, according to documents reviewed by CNBC Make It.

DON’T MISS: The ultimate guide to earning passive income online

Hogue, 35, credits his success, largely, to a simple strategy: turning his business into a game for himself. Each day, he’d simply try to earn more money than he did the previous day, he says. At first, he only made a handful of sales per month, equating to roughly $4 in profit per day, so he worked on figuring out how to double that.

″[My friends] would just laugh at me — ‘Dude, cool. $8?’ — but in my head I knew that I could double that, and double it again,” he said during a recent Make It panel at SXSW.

Incremental goals made Hogue feel like he was improving, even if he could only buy an extra McDonald’s Big Mac per day. Winning that game each day helped keep him from quitting before his business turned profitable, he says.

He recommends the strategy for anyone else who’s trying to get a side hustle off the ground. “The dollars-per-day [mindset] helps you understand what your time is worth,” Hogue now tells Make It.

Measuring your net worth with Big Macs

Today, Hogue still gamifies his side hustles. Despite the passive nature of most of his businesses, once they’re automated, he gets bored and starts looking for new challenges — often working 60 hours per week, he says.

His mindset has shifted: Now, he tries to incrementally increase what he makes per year, trying out new side hustles that could support that goal, he says. Once a venture brings in sustainable income, he scales down his involvement and turns his working hours into developing his next income stream.

Hogue quantifies success in a couple of ways. He tracks his net worth in an Excel spreadsheet, and regularly calculates how many Big Macs he’s earning every 24 hours. In his home state Virginia, at $4.67 per burger, that shakes out to roughly 343 Big Macs per day.

Not every financial expert will tell you to measure your worth in fast food menu items, but Hogue’s strategy isn’t far off from conventional advice. The best way to achieve financial goals is to set small targets, commit to checking your accounts weekly and understand it can take years to see results, experts say.

“It takes a long time for a lot of human beings, sometimes 5, 10, even 20 years to accomplish that goal,” Wells Fargo head of advice and planning Michael Liersch told CNBC in January. “You just got to stick with it and inspire yourself to make sure you can achieve it.”

As for Hogue, his current experiment involves starting print-on-demand businesses and handing them off to high-paying clients. For $10,000 to $15,000, he’ll start building a business for someone else to run in six months, largely using artificial intelligence and automation, he says.

So far, 11 clients have paid for the service, says Hogue. He plans to eventually raise its price, depending on how these initial attempts turn out, he adds.

Correction: This story has been updated to reflect that Hogue worked as an adjunct professor at George Mason University.

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39-year-old who makes $9,300/mo in passive income: My best side hustle money advice

Back in 2013, I was earning $80,000 a year as an engineer. After a layoff, I decided to devote more time to my recent side hustle, a food blog called Delish D’Lites, inspired by my Puerto Rican heritage. 

Over time, as I learned more about personal finance, one side hustle grew into more. Five years ago, I launched a money podcast called Yo Quiero Dinero to share my experience and help other people build wealth.

Today, at 39, I have seven income streams, including affiliate marketing, blog and podcast ads, speaking engagements, digital courses, AirBnB rental income and brand partnerships. Combined, they bring in an average of $37,394 a month in revenue. Of that, $9,300 is in passive income.

Building a sustainable business takes time. I didn’t officially leave my 9-to-5 until 2021. So don’t put unnecessary pressure on yourself to create a six-figure business in two weeks. That’s not realistic, despite what social media may tell you. 

Make a plan to grow and scale your business by identifying what improvements you need to make to take things to the next level. Here is what I always tell people before they take the plunge to run their side hustle full-time. 

DON’T MISS: The ultimate guide to earning passive income online

My No. 1 piece of side hustle money advice 

As you grow your business, it’s so important to know your numbers.

I used to use basic spreadsheets to reconcile my side hustle income and expenses, and I usually only did this at year’s end, so I had little idea what was happening throughout the year. 

When I made the decision to grow my side hustle into a full-time business in 2020, I invested in accounting software that allowed me to track my income on a daily basis. Having this information at my fingertips helped me stay in touch with my progress. I’m a big fan of using tracking software like QuickBooks, Wave, or Xero to record your expenses. 

Once you start doing it regularly, you can cut out unnecessary expenses in real time.

Setting up your business finances involves several important steps to ensure that you can effectively manage your income, expenses and overall financial health. Here’s a guide to help you get started: 

1. Separate personal and business finances

Establish separate bank accounts for your business to keep your money separate. This distinction is crucial for accurate bookkeeping and tax purposes. 

2. Choose an accounting method

Decide whether you’ll use cash or accrual accounting. Cash accounting records transactions when money actually changes hands, while accrual accounting records them when they occur, regardless of when payment is received. Consult with an accountant to determine which method is suitable for your business.

3. Create a bookkeeping system

Establish a system to record and track your business transactions. This can be done using accounting software like QuickBooks or a spreadsheet program of your choice. Set up categories for income and expenses to make it easier to analyze your financial data. 

Track income and expenses. Record all sources of income and track your expenses diligently. Keep receipts, invoices, and any other relevant financial documents organized. Regularly review and reconcile your financial statements to ensure accuracy.

4. Develop a budget

Create a budget that outlines your projected income and expenses. This will help you plan and make informed financial decisions. Review your budget periodically and adjust it as necessary to reflect changes in your business. 

5. Manage cash flow

Cash flow management is vital for the financial health of your business. Monitor what comes in and goes out to ensure you have enough liquidity to cover expenses and maintain operations.

Consider implementing strategies such as managing receivables and payables and negotiating favorable payment terms with suppliers. And try to keep a cash reserve for emergencies. 

6. Plan for taxes

Understand your tax obligations and deadlines. Consult with a professional to determine the appropriate tax structure for your business and ensure you comply with all IRS laws. Set aside funds regularly to cover your tax liabilities. 

A good benchmark is to put aside 25 percent of your business revenue for tax purposes, but this figure will vary widely based on what state your business is registered in, whether you need to collect sales taxes, and whether there are state or local income taxes in your operating location. 

You will thank me during tax time!

7. Monitor financial performance

Regularly review financial reports such as profit and loss statements, balance sheets, and cash flow statements. These reports will provide insights into your business’s financial performance, identify areas for improvement, and help you make informed decisions. 

As you go through this process, it will be crucial to consult with accounting and legal professionals who are familiar with your specific business needs and local regulations. They can provide personalized advice tailored to your circumstances and ensure compliance with all financial and legal requirements.

Setting up a robust financial management system can save your sanity and your business. 

Jannese Torres is an award-winning Latina money expert. Her mission is to educate marginalized communities on topics like entrepreneurship, investing and financial independence. She is the founder and host of the podcast “Yo Quiero Dinero” and the author of ”Financially Lit!″ Follow her on Instagram @yoquierodineropodcast.

Want to make extra money outside of your day job? Sign up for CNBC’s new online course How to Earn Passive Income Online to learn about common passive income streams, tips to get started and real-life success stories.

Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.

This is an adapted excerpt from ”Financially Lit!″ by Jannese Torres, published by Balance. Copyright © 2024 by Jannese Torres.

There’s a new No. 1 U.S. airline—it’s not Delta

There are plenty of factors to consider when booking long-range travel plans. One of the biggest: which airline will fly you to your destination.

While many airlines will take you where you want to go, the travel experience can vary widely when it comes to factors such as boarding processes, amenities and baggage allowances.

WalletHub recently released a ranking of the best airlines in the U.S. The site compared the nine biggest domestic airlines, plus one regional carrier, across 13 metrics in three major categories:

  1. Baggage and departures
  2. In-flight comfort and cost
  3. Safety

The airlines were scored on metrics including how many mishandled baggage reports they had, how often they canceled flights, the availability of complimentary refreshments and how often they had delays. Each airline then received a score out of a maximum 100 points.

After two years in the top spot, Delta Air Lines slipped to fourth place, behind new No. 1 Alaska Airlines, as well as SkyWest and Spirit.

Despite losing its crown, Delta was still found to be the most reliable airline because of its low rate of cancellations, delays, mishandled luggage and denied boardings. The legacy carrier also ranked as one of the most comfortable airlines in terms of in-flight experience.

Alaska Airlines is WalletHub’s No. 1 U.S. airline

Alaska Airlines received the most points in WalletHub’s analysis, with a score of 68.07 out of a possible 100 points.

Although Delta held the top spot in 2022 and 2023, Alaska previously ranked at No. 1 from 2017 to 2019 and again in 2021.

In WalletHub’s ranking, Alaska was also the third-most reliable and comfortable airline and the fourth-most affordable airline.

Alaska Airlines offers customers complimentary in-flight Starbucks, has hubs across the Northwest Coast, and is a member of the Oneworld alliance, a global airline alliance of 13 members, including American Airlines, Qatar Airlines and British Airways. This allows Alaska to offer its passengers special perks, such as rebooking a flight on another airline that’s part of the alliance when possible.

The airline was also ranked the best airline and best airline rewards program by NerdWallet earlier this year.

The top U.S. airlines ranked, according to WalletHub

  1. Alaska Airlines (68.07 points)
  2. SkyWest Airlines (65.96 points)
  3. Spirit Airlines (65.69 points)
  4. Delta Air Lines (61.56 points)
  5. United Airlines (51.96 points)
  6. JetBlue Airways(51.6 points)
  7. Hawaiian Airlines (48.3 points)
  8. American Airlines (46.52 points)
  9. Frontier Airlines (43.57 points)
  10. Southwest Airlines (36.03 points)

The second-best airline, according to WalletHub, is SkyWest Airlines, with a score of 65.96.

SkyWest is a regional airline that partners with major airlines such as Alaska Airlines, Delta Air Lines, United Airlines and American Airlines.

In 2023, it carried 38.6 million passengers to its 237 destinations throughout North America.

SkyWest ranked in the top three domestic airlines for on-time performance from February 2023 to January 2024, with 84% of its flights departing as scheduled, according to data from the Department of Transportation.

Ultra-low-cost Spirit Airlines ranked No. 3 in WalletHub’s report, with a score of 65.69.

Spirit also ranked as the best airline for budget flyers, beating out Frontier, a fellow low-cost airline. The Florida-based carrier’s flights cost about 5.23 cents per mile in 2024, while Frontier’s cost 6.03 cents per mile, according to WalletHub.

A major reason Spirit Airlines is able to keep its costs lower than other airlines is that it has an a la carte pricing model. This means your fare covers only your seat, and anything extra, such as bags and in-flight snacks, comes at a cost.

Spirit Airlines might not offer the most comfortable experience — its seats are known for their limited legroom and lack of in-flight entertainment — compared with some of the other airlines listed. However, if a traveler is looking to spend less money in the U.S., the Caribbean or Latin America, it might be a fit.

On the other end of the list, Southwest Airlines ranked last for the third year in a row with just 36.03 points. The Texas-based carrier fared poorly when scored on metrics including price, safety measures, mishandled baggage reports and denied boarding.

Despite ranking last, Southwest Airlines had the lowest percentage of canceled flights, WalletHub found, based on 2023 flight data from the Department of Transportation.

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10 most ‘unaffordable’ U.S. cities—4 of them are in California

It’s an expensive time to buy a home in the U.S., with half of potential homebuyers saying they can’t afford a down payment and closing costs on a new property.

But when it comes to affordability, or lack thereof, not all cities are created equal. In a recent study, Creditnews Research ranked the most populous U.S. cities by the percentage of neighborhoods financially within reach for the average married couple.

To create its ranking, Creditnews used median income for married households in order to determine the percentage of unaffordable neighborhoods. This figure was compared against the typical value of a home in each neighborhood, with areas deemed unaffordable if the monthly mortgage payment was higher than 25% of a couple’s household income.

Of the 10 cities with the most unaffordable neighborhoods, four are in California. Two cities in the Golden State, Los Angeles and San Jose, were found to be 100% unaffordable for the average married couple household.

The city of angels, in fact, topped the ranking with the highest share of unaffordable neighborhoods in the U.S.

“L.A. has always been very expensive, but what we’re seeing now is that average house prices and overall housing costs are far exceeding average income growth,” Sam Bourgi, Senior Analyst at Creditnews Research, tells CNBC Make It.

He added that the pandemic “basically made a bad situation even worse in terms of affordability” for the capital of the entertainment industry.

“We’re seeing a lot more residents of L.A. and the surrounding area spending much more of their income on housing every month,” he added.

According to a 2022 U.S. Census Bureau report, the median household income in Los Angeles was $83,411. That’s more than $150,000 less than the $237,281 household income needed to afford an average monthly mortgage of $5,932 in the California city, according to a 2023 Redfin report.

But it’s not all bad news. The study found that cities in the Midwest, Rust Belt, and parts of the South still have plenty of affordability. Cleveland, Ohio, and Memphis, Tennessee, had 0% of unaffordable neighborhoods for the average married couple.

“There are affordable markets out there,” Bourgi said. “You have to ask yourself if you’re willing to move because they are going to be areas that people typically don’t find as attractive.”

These U.S. cities have the highest share of unaffordable neighborhoods

  1. Los Angeles
  2. St. Louis
  3. Boston
  4. San Jose
  5. San Diego
  6. San Francisco
  7. New York City
  8. Miami
  9. Nashville
  10. Richmond

St. Louis, Missouri ranked as the second most unaffordable housing market for the average married couple household, according to Creditnews Research.

The report found that 100% of the Mound City was unaffordable for the average family in 2024.

“What we’re seeing is people holding on to their homes, making the supply of available homes very low, and that affects affordability,” Bourgi says.

The average Saint Louis home value is $174,341, up 6.1% over the past year, according to Zillow.

St. Louis has a diverse economy and is home to seven Fortune 500 companies and over a dozen Fortune 1000 companies.

The Greater St. Louis area is also home to major research universities and offers residents family-friendly attractions like the Saint Louis Zoo and 1,300 acres of the picturesque Forest Park.

Boston, Massachusetts came in at no. 3 on the list with 100% of the city’s neighborhoods out of reach for the average married couple.

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