Generating Income During Retirement

Don't Be Left with No Income During Retirement!

It is a sad fact that many people will not have enough money for their retirement.  Many believe that social security will be able to provide for them.  Unfortunately, this is not the case.  With rampant inflation and living on a fixed income, the reality for many retirees is that they will run out of money.  This is a huge mistake that many people make even early on in their career.

Not Yet Retired?

Life has a way of creeping up on us, doesn't it? One moment you are starting career. Then, just like that, you are in your fifties. If you haven't taken retirement as seriously as you should have, it will be more difficult to play catch up. However, it's not impossible. And you can prime the pump, so to speak, by supplementing your income without having to work a part-time job.

Learn How to Generate Income

The internet has opened up the doors to help people generate income. But it's not as easy as it used to be. It's gotten quite competitive. Although, people who are smart about generating income will not have as much competition. The number of people is not a true indication of competition. It's how people implement their strategies that makes a bigger difference.

The first step is to find something that you can use to make money. This is perhaps the most difficult and the one that people get stuck. You'll come across a lot of junk that will make all kinds of claims that you can make millions. They won't work. The concept has to make sense.

A good way to start is to list out your interests and hobbies. Then, search online to see how many other websites exist for that concept. Again, the sheer number of websites itself should not be the true determining factor. Concentrate on the highest-ranking results of the search. These are your current true competitors.

You need to guage whether you can compete with those competitors. If they are relatively unknown entities, you're probably good to go. Trying to compete with the likes of Walmart and Amazon is going to be tough. It's not impossible. But it will take some serious effort to overcome their reach.

Supplemental Markets

If you are deadset on entering a market even with big players, consider tagging along with these players. In other words, instead of competing with them directly, find ways to coexist with them. For instance, the car market is pretty saturated, but maybe certain types of parts or accessories will sell well. Find ways to incorporate these supplemental products to carve out a piece of the overall pie.

Try for Passive Income

I mentioned above that you may not need to work a part-time job, and that still holds. But the more passively you can generate income, the more time you can spend on your leisure activities.

Some passive income takes preliminary work, though. For instance, if you want to earn money with dividend-paying stocks, you'll need to build up portfolio of these stocks over time. Not too many people have $100,000 or more lying around, and even that may not be enough. 

The average dividend yield for the S&P 500 in June 2021 is 1.35%. That means for every $1,000 you have invested, you'll earn $13.50. That's per year. 

[Source: https://ycharts.com/indicators/sp_500_dividend_yield]

If you had $100,000 earning 1.35% per year, you would earn $1,350. That's just a little over $100 per month.

Of course, you can find dividend-paying stocks with significantly higher yields. Some Real Estate Investment Trusts (REITs) pay a whopping 8% or more, which would earn you $8,000 per year (or more). But it does require you learning more about these types of investments because they aren't risk-free. The S&P 500 isn't risk-free either. But the risk is much lower.

You should know that the average REIT dividend yield is about 4.3%, which is a bit less than half of the rate I mentioned above.

Now, assuming that you can make about 4% dividend yields, to earn $1,000 per month, you'd need $12,000 per year. That would require a portfolio of dividend-paying stocks valued at $300,000. 

Obviously, this is an oversimplification, as you could reinvest your dividends. That would help you build up your earnings potential quicker. But you also have to keep in mind that the yields will be constant, which is not always the case. Some yields may stay the same. But others may go up or down. 

Recurring Income via Affiliate Sales

What happens if you are already retired and need to generate income? The dividend-paying scenario above assumes you have some time to build up a portfolio. While there are many methods of earning money online, one of the best is known as affiliate sales or marketing.

Affiliate marketing, also known as referral marketing, is a sales tool that allows companies to build up a sales force, without spending a lot of money. Traditionally, internal sales people has significant overhead. The company often picks up the costs for salespeople to do their jobs. 

With affiliate sales, companies pay a commission on sales generated by the affiliates. A typical way for affiliates to sell is via their websites. Suppose a vendor like Walmart offers and affiliate program (they do!) When you sign up and start including coded links on your website, you'll receive sales when visitors to your website purchase products using those coded links.

For the vendors, they don't pay any expenses to affiliates. You are responsible for driving traffic to the vendors' sales pages. You will have to factor in any costs that you incur for this.

You may be thinking that the costs are too great to drive traffic to your website (and by extension, the vendors' websites) But when you do it right, the costs are minimal. You also need to consider that you are piggybacking on the vendors' sales processes. You can sell products without carrying any inventory, there is no order processing or fulfilment. The vendor also handles the shopping carts and payment processors.

Affiliate marketing is not difficult to implement, but don't expect the sales to be fast or automatic. You should not depend on income from affiliate sales right away. To generate sales, you need to establish trust with your customer base. Think about why you buy online and uses that to help you with your campaigns. Also, speak with the vendors' affiliate managers as they can offer tips on how to sell their products better.

In the title of this section, I used the word 'recurring.' The best affiliate commissions are ones that pay you on a periodic basis (monthly, quarterly, yearly) for the same customers. This is common with subscription-based sales.

If you find affiliate programs that will pay you on a recurring basis, you are optimizing your sales because the customer pays the vendor each period, and you'll get a percentage. As long as the customer continues to pay the vendors, you'll continue to collect a commission.

Finding the right recurring affiliate program is a bit more challenging than one-off sales affiliates. You also want to be confident the products and services offered by the vendors are ones that you support. Don't sell a product unless you believe in it. Your reputation is at stake.

Have Your Own Products to Sell? Start an Affiliate Program

You can take the other side of the arrangement and create an affiliate program for your products. Suppose you have a subscription service for a software package that you sell. You can create an affiliate program (more on this below). When you do this, you suddenly have a low-cost sales force working on your behalf.

You'll have to choose how much of the profits you'll forfeit to your affiliates. Some vendors try to lowball affilaites. But remember, theses affilaites can find competitors that will offer higher commissions, so it is competitive. Often, though, if you are the vendor that offers a recurring commission, that can help you stand out. Affiliates LOVE recurring commissions.

To create an affiliate program for your products and services, you'll need a system to manage which affiliates make sales for you. That requires either creating a system yourself (not recommended!) or having a companies that handles that functionality already do it for you. The difference is usually waiting several months for you to complete your affiliate management software or use a preexisting system that is ready to go right now!

You may think the cost for a preexisting solution is expensive, but you'd be surprised. A great option for vendors (that's you) is Omnistar. They don't have all the bells and whistles that some of the higher-end competitors have. But most vendors don't need all those features. The biggest feature is to assign affiliates with tracking information and allow them to view reports of their sales and payouts. Omnistar handles this.

I am not traying