CNBC make it 2024-07-11 04:25:28


Our side hustles bring in $125,000 a year or more: ‘Nearly everybody’ can make money this way

Sarah and Jamie McCauley are landlords, YouTubers, Walmart pallet flippers, eBay resellers and Amazon product reviewers — and those are just their active streams of income.

The McCauleys make their money by researching what makes side hustles profitable, testing them and teaching others how to do the same on YouTube. The Grand Rapids, Michigan-based couple earned nearly $140,000 from eight streams of income last year, according to documents reviewed by CNBC Make It.

They’re particularly good at two types of gigs, they say: anything involving real estate and their YouTube channel itself, where they share their side hustle exploits with at least 146,000 subscribers.

“If you’re looking to just make some extra money on the side, maybe pay off a credit card debt or pay for a vacation, I think that is doable for nearly everybody,” says Jamie.

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

The McCauleys are part of a side hustle revolution, a growing number of Americans who supplement income with multiple jobs. More U.S adults — about 39%, according to Bankrate — have side hustles today than ever before, whether out of necessity, precaution or a desire to increase their earning power.

Ease of starting is at an all-time high: Platforms like Amazon, Airbnb and Fiverr offer instant access to paying customers. But with competition also rising, it’s hard to build a side hustle that regularly brings in revenue.

Make It spoke with a selection of Americans with successful side hustles to learn how they built their businesses, and used them to fund a wide variety of financial goals. Every respondent highlighted four common traits that helped drive their success:

They tailor their product to their audience

No matter what you sell, you need people willing to buy it. Jenny Woo says her side hustle is successful for a simple reason: She researches her audiences intensely, and tailors her products specifically to them.

Woo is an adjunct lecturer at the University of California, Irvine, a freelance business consultant and the teacher of an online course about emotional intelligence. Her one-woman side hustle, called Mind Brain Emotion, sells 12 different emotional intelligence-themed card games.

It brought in $1.71 million on Amazon last year, according to documents reviewed by Make It.

Woo’s first deck of cards, “52 Essential Conversations,” was tailored toward parents who — like her — wanted to connect with their kids and build their emotional intelligence skills. She joined parenting Facebook groups and observed users’ posting, commenting and liking habits, she says.

After selling $10,000 worth of the game in a 2018 Kickstarter campaign, Woo kept researching. She conducted a survey of her consumers, and learned that “overwhelmed” teachers looking to support children’s social and emotional development made up a significant portion of her audience, she says.

Her second deck, “52 Essential Relationship Skills,” was built for those teachers. It didn’t sell as well as her first deck, but it taught Woo that she could broaden, and combine, her audiences.

Woo applied that lesson to her third game, “52 Coping Skills.” She started with her own experiences working with college students during the Covid-19 pandemic and combined it with her continued research on teachers and parents, she says.

It’s now Mind Brain Emotion’s top-selling game, says Woo.

They find a platform suited for their product

Woo sells on Amazon, which has a broad reach, to collectively rope in Mind Brain Emotion’s hyper-specific audiences. Tim Riegel’s products have a more singular customer base, so he sells on Etsy, a marketplace known largely for homemade and handmade goods.

Riegel, a full-time general manager at a sheltered workshop, makes firepits from recycled tank ends in Lamar, Missouri, and sells them under the name Mozark Fire Pits. His average product weighs 225 pounds, and sells for $950.

Mozark Fire Pits brought in approximately $202,000 on Etsy last year, according to documents reviewed by Make It. Riegel maintains a 40% profit margin, he says.

Riegel chose Etsy over platforms like Amazon, Wayfair and Overstock because it felt more user-friendly, and a better fit for his personalized products, he says. He also sells on Facebook Marketplace, which costs him more in advertising — but less in shipping costs for customers within a 200-mile radius, he adds.

That kind of platform analysis is valuable, no matter what kind of side hustle you run.

If you sell a service, instead of a good, you might consider platforms like Fiverr and Upwork — popular among photo editors, marketing writers and voiceover artists — or Taskrabbit, known for labor-intensive side hustles like cleaning or repair work.

Or, opt out of those platforms entirely. If your gig is something that many other people also do, try finding marketplaces with more narrow niches like Contently, Skyword or ServiceScape, recommends side hustle expert Kathy Kristof.

“One of the problems I see with a lot of freelancers is that they go to the best-known online platforms … and those platforms are so saturated with people who have been there for, often, decades,” says Kristof, whose blog SideHusl has reviewed more than 500 different side gigs.

They stand out on saturated platforms

No matter your platform, you’ll need to stand out. A good listing can help: clear and concise, written for your intended audience, free of typos, with high-quality graphics and some search engine optimization (SEO).

Becky Powell, a kindergarten teacher based in Beaverton, Oregon, has a side hustle selling worksheets for other educators on an online platform called Teachers Pay Teachers. Many of her worksheets focus on her personal specialty, teaching children sight-reading skills.

Her side hustle didn’t take off until she embraced SEO. When she uploaded her first worksheets, she titled them, “Creating sight words with pattern blocks.” Sales slowly trickled in.

Her husband Jerome, who has a business background, suggested a simpler title, like “Hands-on sight words.” The sight-reading worksheets quickly became her bestselling products, Powell says.

Powell’s store brought in $125,500 in 2022 revenue, according to documents reviewed by Make It. Her husband also sells worksheets on the platform, and they’ve used their combined earnings to fund vacations and pay down their mortgage and student loans, Powell says.

“You have to have passion and knowledge,” she says. “You also have to have a business sense [and understand] SEO.”

Once you gain enough customers, work to turn your sales into positive reviews, so you appear higher in platforms’ search results, Kristof advises. Customer service, prompt shipping and quality control can usually earn you a good online reputation.

They know when to change direction or walk away

The McCauleys have a rule for their ever-changing collection of side hustles: “You either have to be one of the first to get there, or your approach has to be very unique and different to be successful,” Sarah says.

But being first or unique doesn’t guarantee long-term success. In 2020, the couple was early to a side hustle trend: pallet flipping. At local warehouses, they’d buy pallets of returned goods from Amazon, Walmart or Target. They’d unbox the pallets, discover their contents and resell the items for a hopeful profit.

From December 2020 to December 2022, the McCauleys made about $19,500 in pallet-flipping profits, they estimate. Their most popular unboxing YouTube video got 5.4 million viewers, translating to an additional $30,000 in advertising revenue, says Jamie.

Last year, more Americans hopped on the pallet-flipping trend. Pallet prices rose, resale values dropped and a slew of unboxing videos diluted the McCauleys’ viewership. “The pallets became not really worth our time … from the standpoint of time over money,” says Sarah.

Four years ago, the McCauleys would’ve simply moved onto their next side hustle. Now, they’re feeling the strain of constantly building new gigs from scratch, and starting to reorganize their income streams into a smaller number of longer-term projects.

Instead of flipping their current home renovation project in Northern Michigan for a profit, for example — something they’ve done multiple times — they’ll keep it as their own vacation house and part-time Airbnb rental, they say.

“We always knew [side hustling] was going to have an expiration date,” says Jamie. “It’s a young person’s game, to always be looking for what’s next.”

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15 U.S. states with the lowest cost of living—a single person can live there on $20 an hour

As a single person, you’ll need an annual income of $40,000 to cover basic expenses in the cheapest U.S. states, according to a recent SmartAsset analysis.

The state with the lowest costs of living is West Virginia, closely followed by Arkansas and Oklahoma, the analysis says. In West Virginia, a one-person household needs a pre-tax income of $39,386 to pay for necessities like housing, transportation, health care, taxes and other common expenses — as tracked by the MIT Living Wage calculator.

The good news: The median American yearly wage for full-time workers is nearly $60,000, according to the Bureau of Labor Statistics. But minimum wage workers in many of the least-expensive U.S. states lag significantly behind that figure. With a 40-hour workweek, West Virginia’s $8.75 hourly minimum wage translates to just $18,200 per year, for example.

Here’s a look at the 15 U.S. states with the lowest cost of living, based on how much a single person needs to cover basic costs:

  1. West Virginia: $39,386
  2. Arkansas: $39,724
  3. Oklahoma: $40,211
  4. North Dakota: $40,262
  5. Kentucky: $40,355
  6. Ohio: $40,359
  7. South Dakota: $40,718
  8. Louisiana: $41,233
  9. Mississippi: $41,361
  10. Iowa: $41,678
  11. New Mexico: $41,807
  12. Nebraska: $41,849
  13. Alabama: $41,911
  14. Missouri: $42,024
  15. Wisconsin: $42,062

Based on a 40-hour workweek, these totals work out to an hourly wage that ranges from about $19 to $20. In contrast, the most expensive state for a single person is Massachusetts, where a single person needs $58,009 per year to cover basic costs. That works out to roughly $28 per hour.

While rural states have lower costs, they tend to have lower wages, too. The median household income in West Virginia is $52,460, compared with $75,910 in New York, according to the Bureau of Labor Statistics’ most recent data from 2022.

The difference in basic costs between states is largely due to housing, which tends to be most affordable in rural states. Urban areas typically offer a higher concentration of jobs, attracting more residents — and increased housing demand drives up home prices.

Annual housing costs in heavily urban states like California and New York are close to $20,000, compared to roughly half that figure in the 15 least expensive states.

Rural states also tend to have lower taxes than states with large cities, because their public services and infrastructure are less expensive. Taxes vary by about $5,000 to $10,000 per year between states, according to SmartAsset’s analysis.

MIT’s Living Wage calculator is based on data from various federal agencies, adjusted for inflation as of December 2023.

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No. 1 ultra-processed food this dietitian stays away from: It ‘doesn’t have any nutritional value’

Almost 60% of the caloric intake of the average American diet is coming from ultra-processed foods, according to a 2017 paper published in the journal Population Health Metrics — and that’s concerning to health experts.

“Ultra-processed foods contain ingredients that we generally wouldn’t find in our kitchen, and they often contain high amounts of sugar and salt,” says Jinan Banna, registered dietitian and professor of nutrition at the University of Hawaii.

“They may also contain additives, and they often are stripped of their nutritional values. So they may have very little vitamins and minerals [and] fiber.”

Eating ultra-processed foods often can lead to a higher risk of developing health conditions like dementia, type 2 diabetes and heart disease, according to doctors in the American Medical Association.

That’s why Banna limits her consumption of ultra-processed foods and encourages you to do the same. Here’s the highly processed food that she never consumes.

‘I would never consume soda,’ dietitian says

“Some [ultra-processed foods] I would never consume, such as soda,” Banna tells CNBC Make It.

“Soda doesn’t have any nutritional value other than just calories in the form of sugar. So they’re empty calories, which don’t give us any of the nutrients that we need.”

When you drink soda, it is digested very quickly and can cause you to feel hungry, she adds, which can lead you to eat more food than you planned to.

Instead of soda, Banna opts for different types of tea and water, still or sparkling.

“Sometimes I drink a cold hibiscus tea. Plain water, of course, is a great alternative,” she says. “Even coffee can be an option, of course, consumed in moderation.”

Diet soda and other ultra-processed drinks are the processed foods Americans consume the most, recent study shows

A recent preliminary study that was presented last week at a meeting held annually for the American Society for Nutrition took a close look at dietary data collected in 1995 from more than 500,000 Americans between the ages of 50 and 71. The data was used to determine if there were connections between dietary choices and mortality rates over the span of almost 30 years.

Out of 124 foods, ultra-processed drinks was the No. 1 food that people who had the highest intake of ultra-processed foods consumed.

Diet soft drinks were the key contributor to ultra-processed food consumption. The second one was sugary soft drinks,” the study’s lead author Erikka Loftfield told CNN.

Beverages make up a significant portion of dietary intake. So, these types of drinks — like diet sodas and energy drinks — are the processed food that people seem to consume more than others, Loftfield said.

The study also found that the lifespans of those who eat a diet high in ultra-processed foods may be shortened by over 10%, according to CNN.

Use the 5/20 rule when reading nutrition labels

As a rule of thumb, Banna recommends using the 5/20 method when checking the nutrition labels on the foods you eat.

“You can use the daily value,” she says. “That’s an easy way to know whether the food is generally high or low in a particular nutrient.”

Check the daily value percentages of specific nutrients like sodium, sugars or saturated fat, Banna suggests.

“The idea is, if [it’s] 5% or less, then the food is generally low in that particular nutrient. If 20% or more, you can consider the food high [in the nutrient],” she says.

“So that’s just a quick way to glance at the label and know if a food contains a little bit or a lot.”

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The No. 1 country where expats are happy with their careers

Expats in Denmark are among the happiest with their work lives, according to the latest Expat Insider survey from InterNations, the online global community for people who’ve moved abroad.

The Nordic country ranks No. 1 for where people are most satisfied with their jobs, career opportunities and work-life balance, among other aspects.

That’s based on survey responses from more than 12,500 people living in foreign countries and reflects their feelings on four broad categories covering work topics, including their career prospects, salary and job security, work culture and satisfaction, and work and leisure.

Denmark ranks highest for two groupings: work culture and satisfaction, as well as work and leisure.

Some 84% of expats in Denmark are satisfied with their work-life balance, compared to a global average of 60%; a similar share are happy with their work hours and, on average, work 39.2 hours per week, compared with 42.5 hours for the global average.

Here are the top 10 countries where expats are happiest with their work lives abroad:

  1. Denmark
  2. Saudi Arabia
  3. Belgium
  4. Netherlands
  5. Luxembourg
  6. United Arab Emirates
  7. Australia
  8. Mexico
  9. Indonesia
  10. Austria

Ilana Buhl, a CNBC Make It contributor and American teacher who moved to Denmark, says moving from Texas to Copenhagen brought about lots of positive changes to her work life: shorter workweeks, stronger boundaries around off-hours, five weeks of paid vacation, and a better salary to cover a lower cost of living.

Outside of work, she also enjoys robust public transit, public health care, affordable day care, and ample maternity leave paid for by her employer and the government.

Many of these factors contribute to the fact that Denmark consistently ranks as one of the happiest countries in the world, according to the annual World Happiness Report.

Coming in at No. 2 is Saudi Arabia, where a majority, 75%, say moving there has improved their career prospects, versus 56% globally. The majority, 63%, of newcomers relocate to Saudi Arabia for work, where they say they’re satisfied with the state of the local economy.

Meanwhile, just 35% of expats around the world say they moved to a foreign country for job-related reasons.

The biggest downside to working in Saudi Arabia may be the long hours — expats working there report logging 47.8 hours a week for a full-time job.

Rounding out the top three is Belgium, where expats are highly satisfied with their job security, the local job market and their own career opportunities.

Expats in Belgium say they enjoy flexibility in the workplace, especially among the 68% who say they can work remotely, and their shorter-than-average full-time workweek of 40.8 hours.

Panama was recognized as the No. 1 best country for expats overall, according to the InterNations survey. The overall ranking accounts for broader life and financial factors, where foreigners say they’re satisfied with the quality of life, ease of settling in, working abroad, personal finance and an “expat essentials” index, which covers housing, administration, language and digital life.

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‘Taxes are on sale’: Why now is a great time to save in a Roth account, says CPA

When you were a kid, and your mom asked you clean your room or pause your video game or come in for dinner, you likely told her some variation of, “in a minute” or “I’ll do it later.”

That same attitude would make you a very conventional accountant, says Ed Slott, a certified public accountant and founder of IRAHelp.com. “From day one training as an accountant, they tell you to never pay tax before you have to. Defer, defer, defer,” he says.

These days, Slott jokingly calls himself a reformed accountant, because he’s completely changed his approach to his clients’ tax burden. “I call it my key ‘always’ rule: Always pay taxes at the lowest rates,” he says. “Always keep more money.”

Because tax rates are currently so low relative to their history, “taxes are on sale now,” Slott says. People can take advantage of this moment, he added, by exploring moving their money from traditional accounts into tax-free vehicles, such as Roth IRAs. “That’s where everything should be headed.”

This may seem like it involves some complex planning, but Slott says the thinking behind it is simpler than you might think.

How Roth accounts work

With a traditional account, like a 401(k) or IRA, contributions you make in a given year can be subtracted from your taxable income.

In other words, you’re deferring paying tax on the portion of your income you’re stashing away. When you eventually withdraw that money in retirement (and after a certain age you must began taking withdrawals), you’ll owe income tax on it.

Roth accounts work the opposite way.

You fund a Roth IRA or Roth 401(k) with money you’ve already paid taxes on. Money in your account grows tax-free. Then, providing you’re age 59 ½ and have held the account for five years, you can take your contributions and earnings out in retirement without owing the government another dime.

If you have most of your retirement assets tied up in traditional accounts, you can move money over to a corresponding Roth account in a move known as a Roth conversion. Since you didn’t pay tax on the money upfront, however, you’ll owe a tax bill when you convert.

Why now is a good time to save in a Roth account

The question of whether to use a traditional or Roth account generally comes down to whether you prefer to pay taxes now or later.

Under one popular line of thinking, early-career workers should opt for the Roth since they tend to earn less money and owe less in taxes. Higher earners, meanwhile, should take the upfront tax break.

Slott believes that just about everyone could benefit from saving in a Roth account. That’s because regardless of personal tax rates, two key factors are likely to drive up the amount of tax you will owe in retirement:

1. The growth of the value of your portfolio. “The market has gone up like crazy. That’s not guaranteed, but historically, the market has moved up and down in a jagged way, but generally upward,” Slott says.

If you’re saving in a Roth account, all of the gains in your account can eventually be withdrawn tax-free.

For savers with traditional accounts, they are growing the tax burden they’ll owe in retirement, the more their portfolio returns.

“That tax is constantly building,” says Slott. “The values are up, but that means the eventual share that will be going to Uncle Sam will be higher, too. He’s a special beneficiary on your retirement account.”

2. Historically low tax rates. The other major reason to pay tax on Roth savings right now, rather than paying later, is that tax rates are historically low.

From from 1951 to 1963, for example, the top rate hovered above 90%, dropping to 77% in 1964. Today, the top marginal tax rate is 37%. Slott noted that it seems unlikely that the tax rates will go even lower across the board between now and the time you retire.

The tax rates fell to their current level with the passage of the 2017 Tax Cuts and Jobs Act — but that set of cuts that are set to expire in 2025. Even if the next administration maintains tax brackets at current levels next year, there’s still a growing federal debt that Congress will eventually have to deal with – possibly by hiking tax rates, Slott says.

That means, even if you currently fall into a high tax bracket, having at least some of your money in a Roth account acts as a hedge against rates climbing even higher.

For Slott, having a source of tax-free income in retirement provides the ultimate peace of mind. “I have everything placed in tax-free vehicles,” he says. “You don’t have to worry about the uncertainty of what higher tax rates could do to your standard of living in retirement.”

Want to be a successful, confident communicator? Take CNBC’s new online course Become an Effective Communicator: Master Public Speaking. We’ll teach you how to speak clearly and confidently, calm your nerves, what to say and not say, and body language techniques to make a great first impression. Sign up today and use code EARLYBIRD for an introductory discount of 30% off through July 10, 2024.

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