2008 August | Till Debt Do Us Part

The habit of staying debt free

Aug 282008

Getting out of debt is a massive achievement in itself. Staying out of debt for good is a whole different matter.

It’s happened to me and I’ve seen it happen to other people. The situation I’m talking about is where people struggle for a couple of years and eventually manage to pay off their debts. The sense of freedom is overwhelming. Then after a while – it could be a couple of months or a couple of years the sense of release isn’t as strong. The positive afterglow of achieving debt freedom has faded significantly. Not only has the afterglow faded but the fear of debt has diminished. People forget how painful the debt was.

It’s at this point that the person is most vulnerable. It’s at this point that they are likely to be seduced back into the old habits of taking the monthly payment option. Hey its okay they think – just this one time. I can manage this small monthly payment.

From this small opening the floodgates of debt usually bust wide open.

This has happened to me and you keeping kidding yourself that things aren’t that bad and that you can manage. You had a debt problem before but you are different now you are more mature now and you can handle your finances better. Yeah right!

Reality hits home

This fantasy continues on for a while until one day you realize you’ve dug yourself another debt hole – bigger and more impressive than the last one. Does this spur people into a tornado of action to try to solve the problem? Nope – it’s at this point the “why me?” self abuse starts.

Emotions run high and the pressure to do something about this new debt is huge. However this time round it seems to take longer for any action to happen. It’s a case of “How could I have been so stupid?” The fear of judgement by friends and family about getting into debt again means that the debt problem goes hidden for longer.

Since the problem stays hidden for longer the problem gets harder to solve second time round. Added to this is the very human response of “You did it again?” which to me always meant that friends and family are a little bit less enthusiastic about helping you out the second time round.

Staying debt free

Becoming debt free is a massive task in itself. The journey to becoming debt free requires you to look at every aspect of your life. You begin to see how you exist in this world and you begin to better understand your motivations for doing certain things. It can be a real eye opener. At the same time it can be a huge internal struggle. The physical element of becoming debt free is relative easy and straightforward. The emotional element of becoming debt free is huge.

In order to stay out of debt once initial debt freedom has been achieved then the focus must be on the emotional side of the debt free equation.

The habit of staying debt free is not one single habit. The title of this post is a bit misleading but I did that on purpose. It is necessary to understand that the habit of staying debt free is made up of a multitude of individual thoughts, actions and habits.

That said there is one simple rule of thumb that will allow you to maintain the habit of being debt free and that is ‘spend less than you earn’. Dull boring advice – YAWN. Yet had I listen to it second time round my life would have been a whole lot easier.

By spending less that you earn I mean on a cash for cash basis. What this means is that if you earn $2500 net per month then you should be spending less than $2500 per month on all your expenses and outgoings. This includes paying off your credit card completely each month. Ideally when you are coming out of a debt situation using cash only is the best way forward.

A new financial goal is crucial

It’s easy to stay motivated when you have a goal to work towards. A lot of the time when people achieve their goal of debt freedom they rest on their laurels. They relish their new found freedom and rightly so. But some rest for too long and fail to set a new bigger financial goal.

Once debt free another financial goal is required if focus is to be maintained on their financial situation. This is where a bigger more challenging financial goal will make the difference between staying debt free and slipping back into debt. A big financial goal could be something like building up savings of $10,000 in a one year period. Again it will depend on your own personal situation.

Two simple but very effective ideas

In order to stay out of debt once you are debt free spend less than you earn and set yourself a big juicy financial goal. Simple as that…okay okay it’s not as simple as that. If it were then I wouldn’t have so much material to write about on debt. Deep down most of us know that in order to change our situation be it financial or otherwise we need to change our behavior. It is changing our behavior that is ultimately the hardest part of getting and staying out of debt.

The dark depressing days of debt

Aug 272008

Always look on the bright side of life? Sometimes it’s not the easiest thing to do especially if you have the debt monkey on your back. Some days you feel like the whole world is against you and that everything is happening in slow motion. This isn’t a debt specific problem – I’m sure wealthy people have their bad days too.

When you are having a bad day and you have a debt problem then it seems like the world is about to end. Nothing you can do is right and you find it incredibly hard to get motivated. I liken it to walking with a lot of mud on your boots. The heavy legs feeling, the lack of mental clarity and focus, the dread of going out and meeting people.

Yeah we’ve all had them.

Why now and why today?

A couple of years ago when these bad days appeared I used to wonder why the heck it was happening and what caused them? At the time I simply thought they were just random occurrences. You were due a bad day every once in awhile. After some time I began to realize that there is nothing random about these bad days. I now put these down days to cause and effect.

So what are the causes of these bad days?

For me food plays a huge part in my mood. I’m not diabetic but I certainly think I am sugar sensitive. Stimulant drinks like coffee or sugary foods like chocolate or white bread send my mood soaring but the come down can be hard. If I eat a lot sugary foods then I know for sure that I am heading for a sugar crash. This sugar crash in turn will lead me to see the world in slightly less than rose colored glasses.

Do you think that you may have the same problem? You might have but you might not yet realize it. The following article “Does Food affect Mood” goes into the explanation as to how food affects mood in more detail. It is well worth a read.

Directly related to food is something that also has a huge impact on my mood and that is sleep.

For me sleep is sacred. I know that may seem like an over the top statement but if I’m honest I’m like a bear with a toothache if I don’t get enough sleep. If I’m working hard and have had a few late nights in a row then my mood drops off a cliff.

When I’m tired from lack of sleep I tend to drink more coffee and eat more sugary food. These give me a short term boost but then they only add to my woes as their effects begin to wear off and I feel even more tired in the long run.

The link between food and sleep works both ways. Drink too much coffee before you go to bed and you will have a restless sleep at best or stare at the ceiling all night long at worst.

The food sleep relationship can be a vicious circle for me. This process repeats itself until eventually I have a bad day. To me having a bad day is my body’s way of warning me that I am pushing it and that I am not looking after myself. Once I sit out the bad day its like my body resets itself and says “okay we cleared the junk out for now but you really do need to get it together boy”.

I usually heed this warning and try to watch what I’m eating and try to get to bed at a reasonable time. This seems to work and once I take care of myself my mood returns to normal.

The debt effect

In the previous section I outlined how my food and sleep has a big impact on my mood. Feeling bad from poor food choices and lack of sleep is one thing. When you couple them with a debt problem that only seems to rear its ugly head when you having a bad day then that is a completely different thing.

When you are having a bad day every single negative thing in your life seems magnified ten fold. The debt burden that seemed controllable yesterday is overwhelming today. These negative feelings towards your debt can cause even more negative thoughts. It is these negative thoughts that feed on your bad mood and make you feel even worse. That debt problem seems to be growing and growing as the day goes on.

If you don’t stop your thoughts in their tracks then it will make for a very bad day.

I’m sure wealthy people have these negative days. Everyone does. But if you are in debt then these bad days have that extra element of stress associated with them.

Solutions?

I’m all about keeping it simple. Here are a couple of ideas to help you reduce the effects of a bad day.

Watch what you eat.

Simple, clichéd and boring advice but what you eat and dink is incredibly important in regulating your mood. You’ve probably heard this a thousand times “you are what you eat” – that phrase is so over used but it’s so true. I’m not talking about weight gain or loss I’m simply talking about mood regulation. Food is the key.

Get more quality sleep.

No I didn’t say sleep more! I said get more quality sleep. To me quality sleep means uninterrupted stress free sleep. So that means giving yourself time to wind down and de-stress before you go to bed. Make your bedroom an oasis of calm. Like the porridge in the Goldilocks and the three bears story, your bedroom should be not too hot and not too cool – just right.

The “I will deal with it tomorrow” card

I have a personal rule that I never make big decisions on an empty stomach, when I’m tired or when I’m in a bad mood. The reason why is that my decision making skills are seriously impaired if I am not feeling 100%. When I am having a bad day I put off making decisions – especially financial decisions – until the next day. If I’m still feeling less than 100% the following day then I simply put off the decision until I am feeling better even if it is a week later.

I go as far as saying to myself that there is no point even thinking about financial problems until I am in a better mood. I call this my “I’ll deal with it tomorrow” card. This is where I feel I can legitimately say to myself that I am excused from taking any action or even thinking about stuff.

For the rest of the day my focus is then on simply getting through the day and doing what I need to do just to function. In work I’m operating on automatic. I’m not doing my most creative work but then again I know the reason why so I don’t beat myself up about it.

Simple fact – bad days happen

The best and quickest way I find to deal with a bad day is to acknowledge that I am having one. Face up to the fact that it’s going to be raining all day and try to salvage what I can from the day. Focus on the simple easy to do tasks and put my head down get stuck in and tune out all my other thoughts as best as possible.

One point I will make is that while everyone has bad days if they persist and everyday seems to be a bad day even after you have changed what you eat and fixed your sleeping habits then it might be time to consider getting professional help.

Free Debt management ebook – Understanding and getting out of debt

Aug 252008

I’m always looking for ways to add value to the user experience on this site. That may sound very grand but to me it simply means making this site better in any way possible.

A while back I decided I should create a free debt management ebook so that readers of this site could download and keep it. I know sometimes when you are browsing the posts you may be short of time and would like to read more. This ebook will allow you to do this at your own leisure.

Another goal of mine was to create a debt management plan and to outline it in the ebook. I know that some of my posts tend to be more theory than practical – I write about what I think is important. However I was conscious of this when I started to write the ebook. In the ebook I focus a lot more on the practical element of debt management while still covering some theory.

Here is the table of contents of my ebook – “Understanding and getting out of debt”.

Introduction

Global Debt epidemic

The debt spiral

Debt management – it’s all about responsibilities

Financial education should be your priority

Defining your debt problem exactly - to the cent

Money management – it’s all in you head

How to pay back your debts and still have a life

Budgets – the basics

Pay down your little debts first

Getting money quickly

The price of all that ‘Stuff’

Second income – is it realistic

Savings

Automate everything

Media Diet

Debt and relationships

101 ways to save money

Conclusion

Resources

Did I mention that this ebook is FREE? Yep that is correct you can enjoy the fruits of my labor without having to part with a single penny.

To get my free debt management ebook simply sign up for my email newsletter.

When you do you will receive a confirmation email that will contain a link to your free copy of my debt management ebook. You can use the newsletter sign up box in the top left hand corner of this page to sign up.

I hope you enjoy this free ebook and that you get some ideas out of it. Feel free to leave a comment and let me know what you think.

Debt and health

Aug 182008

‘Your health is your wealth’

In my experience health is never really given much consideration until something goes wrong. People tend to take their health for granted. However as soon as they get sick or need to visit the doctor their attention focuses firmly on their medical insurance.

If you are in debt then your focus should be on where you can cut your expenses. However cutting things that have an impact on your health can be disastrous in the long term. Health insurance, diet and leisure pursuits usually take a direct hit when someone is designing their budgets and debt management plans.

Getting out of debt requires cutbacks and savings. These cutbacks and savings should not be at the cost of your own or your family’s health. You can’t put a value on health and by trying to cut your health expenditure that is what you are doing – trying to put a value on your health.

The three main areas that come under scrutiny in any household budget but also have a direct impact on health are 1. Health Insurance 2. Diet and 3. Leisure pursuits.

Health insurance.

With money problems one of the first things to go is health insurance. Many people look on health insurance as a nice to have rather than a need to have. If their employer does not provide health insurance then for many it is the obvious choice to start budgeting with. However I cannot stress strongly enough how important health insurance is. By all means shop around for the best provider or see if you can bundle your home and car insurance to get a better deal but do not get rid of your health insurance.

The thing about adequate health insurance is that you hope that you will never have to use it. If you have health insurance then you can be confident that there is health insurance there if you need it but ultimately you never want to use it. Some may argue that you are in good shape and don’t get sick often so why bother? I say great! But you don’t want to be caught short if you have the misfortune of getting sick or need to visit the hospital.

Diet.

As it stands the average diet in the western world is pretty bad. Millions of us exist (or should that be subsist) on a diet of processed refined nutrient deficient foods. Sure they might taste good but they don’t contribute much to our health and in some cases they take away from it and in turn take away from our pockets.

The question you have to ask is whether or not it is more or less expensive to eat well. I have made the argument before about buying generic food products as opposed to the more expensive branded products. This makes sense as they are generally cheaper versions of the same thing. My argument here is that we should consider whether or not in the long run it costs more to eat well.

Eating well is a whole other topic – the field is enormous and the opinions vastly different. Everyone has their own opinion as to what exactly eating well means. The point I am trying to make is that eating something that is obviously bad for you just because it is cheaper than the more healthy alternative does not make sense and in the long run it will cost you even more in terms of doctors and dentist visits. Just because your local fast food joint is doing a two for one special doesn’t mean you have to eat there. To me that is a false economy.

Leisure pursuits.

What I originally called the title of this section was Gym membership but I realize that not everyone holds a gym membership. The nice thing about talking about gym membership is that it allows me to perfectly illustrate the impact that debt can have on a person’s health.

In my post about passive expenses I made the point that things like gym membership can be an unnecessary drain on your finances especially if you are paying a monthly subscription. However I want to point out that I was referring to unused gym memberships. If you are not using your gym membership then by all means try to cut that expense out. If you are using your gym membership then look on it as a legitimate budget expense and don’t beat yourself up over it – even if it is expensive. The long term benefits of going to the gym on a regular basis will serve you well in the years to come.

The same logic should apply to any of the other leisure pursuits that people enjoy. If it is done on a regular basis and is seen as being a positive then work it into your budget if at all possible.

Becoming fit and healthy is more important than getting out of debt. In reality if you are not fit and healthy you will find getting out of debt a lot more difficult. The reason why is because getting out of debt requires a lot of energy and focus. Debt is stressful and no matter what way you cut it getting out of debt takes time and energy.

Debt Management software

Aug 132008

There is only so much reading about debt management and Personal Finance that a person can do. While there is huge benefit to be had from learning as much as you can about debt management and personal finance there comes a time when you must go about implementing what you have learnt.

To this end I have come up with a way for you to do just that. I have recently bought the commercial licences for a number of financial calculators and budget templates. I bought these calculators so that I could add value to this site and improve the user experience.

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Javascript is disabled, Please enable it.

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I have decided to allow readers to use these calculators for free as I don’t believe in charging people for something that is supposed to get them out of debt. I don’t want to push people further into debt when the goal of this site is to help people out of debt.

These calculators are located here – debt management software.

This debt management software is completely FREE for you to use. You can use it as often as you like. You do NOT have to sign up for anything. You can simply visit the debt management software page and start using them. So please just work away and get started on getting your finances in shape.

The calculators are easy to use and there are instructions as to what to enter into each field.

Media Diet – follow up

Aug 122008

A couple of months ago I wrote a post about the impact that media has on our spending. The constant bombardment of seductive adverts for the latest gadget would drive anyone to use their plastic. I know I’m not alone when I say that more than once I have been duped into buying something I didn’t need by slick advertising. This in turn has often blown a large hole in my budget.

Anyway in that post – which you can read here – I explained that I was toying with the idea of going on a media diet. The thought of reduced stress and anxiety coupled with more time and mental capacity seriously appealed to me.

If I’m honest the results of my media diet were very mixed.

I think its best if I break down each media channel so I can explain what happened.

Internet.

I use the internet a lot for my job and for this Blog. I find that a lot of the time when I am on browsing the web that I have lots of websites opened. The thing is none of these websites relate to each other. I could have a finance website open while at the same time I could have a sports website. My brain has problems processing the unrelated pieces of information at the same time.

The net effect of having all these websites open was that during the day my thoughts became scattered. To combat this and help me reduce the amount of time I spend on the internet I downloaded a free trial version of a website blocker software. I then loaded the details of my favorite websites into it.

Every time I tried to log on to my favorite websites I got a “page cannot be displayed” message. Initially this was very frustrating but eventually I did lose a lot of interest in those websites and my productivity did improve…for a while at least.

TV.

I mentioned in my last post about a Media Diet that I recorded all my favorite TV shows and watched them all in one go at the weekend. When I was watching them I would simply skip the ad breaks.

This had a big impact. It freed up a lot of time in the evenings as my evening was no longer centred on a TV show.

I did find that when people that I work with were talking about the previous evenings TV shows that I felt a little left out. Small price to pay I reckon.

Newspapers.

I stopped reading the daily newspapers – most of them I read online anyway so I simply blocked their websites. At the weekend I would buy one of the Sunday broadsheets. These usually give a good overview of the weeks events.

All this was shaping up nicely and for a couple of weeks I was seriously reducing my exposure to the media. The thing was that after the initial period my enthusiasm began to wane. By having my favorite websites blocked I felt that I was missing out. Missing out on what I’m not sure but I just felt that I was isolating myself in some way.

One by one I removed the block on the websites so that I could access them ‘just this one time’. I don’t feel isolated anymore and I am up to date with all the current affairs and sports results but at the same time my media exposure is right back where it was when I started this exercise. I have even fallen back into the habit of watching my favorite TV shows in the evenings instead of at the weekends. Not good.

When I am trying to be productive – either at work or trying to write this Blog – I’m back in the habit of jumping from website to website and back to writing. This leads to incredible frustration as I know what I am doing wrong but I am finding it hard to break this habit.

But Mike – what were you trying to achieve anyway?

It was easy to lose sight of the original reason for going on a media diet. My prime motivation was to reduce the negative influence of the media on my bank balance. Simple as that. As a side benefit I was hoping that my productivity would increase as a direct result of my free time.

While now it looks like my media diet was unsuccessful in a way I have achieved what I originally intended to do. Now I find that whenever I am confronted with a purchase I ask myself how much of my purchasing decision was influenced by the media. I probably won’t ever be able to give an accurate answer but at least it gets me thinking about my buying behavior.

No longer do I go blindly about my shopping. Often I find myself asking the question “Is this generic product as good as a branded one?” To me this is what going on a media diet is all about.

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Internet Job versus Internet Business

Aug 112008

This is a continuation of the series of articles about trying to generate a second income part time on the internet and then using this second income to repay your debts.

I have already investigated the possibility of generating a second income through Second Life. In the end I decided that it was not for me. You can read my reasons why here.

In this article I want to investigate the income generating potential of getting a part time Internet job as opposed to starting an internet business.

Internet job versus Internet Business – what’s the difference?

When I first started to investigate the possibility of generating a second income online it didn’t occur to me that I could get a job (i.e. work for someone else) that would allow me to operate from my home and in my spare time.

To me the Internet was all about trying to start your own website and generating an income by selling a product or by selling advertising.

Recently I came across a couple articles about Internet Jobs. These jobs ranged from data entry to completing surveys. To be honest when I started to read about the online jobs on offer my eyes glazed over. There was nothing much that appealed to me in terms of the work that was on offer. Boring and tedious are the two words that I’d used to describe the jobs I came across.

Part of me wanted to stop exploring the idea of getting a second job online and move on to something else. However I realized that if you are in debt and looking to earn extra income the focus should not be on finding ‘interesting’ work or work that you love rather the focus should be on finding a second job online that pays and is not a scam (more on this later).

With this in mind I began researching internet based jobs versus internet businesses. My criteria were that the hours had to be flexible, I could work from my home, the pay was reasonable and I was confident that it was not a scam i.e. the company that I would be working for was legitimate.

So far my results have been mixed with more negative results than positive.

It appears that there are a lot of scams out there – so be careful. Make sure to do your homework and to research fully any offer of an online job. When researching simply type the name of the website that is offering the job along with the word ‘review’ into Google and check the results. I found that a couple of websites that had caught my attention had been scamming people so it was a lucky escape.

I found this on Yahoo! answers. It is short but well worth reading the comments.

Is there a legal legitimate way to work at home and make good money that is not a scam?

On a more positive note I have come across some websites that seem to be genuine. I have not used these websites myself so I cannot confirm whether or not they are genuine but so far from what I’ve read they look good.

This article from msnbc.com provides some useful ideas about websites that you could potentially work for. Again do your research before you commit to anything.

Delete your commute with new internet jobs.

Searching for a legitimate online part time job is proving to be a little more difficult than I thought. In my naivety I simply thought that it would be a case of doing a Google search and I would be spoilt for choice. I thought that I could then simply do hours and hours of tedious form filling and I would be on my way to paying down my debts and financial freedom.

Unfortunately this is not the case and I have received something of a wake up call.

Getting a decent online part time job seems to be a lot more difficult than I first imagined.

Making money in Second life? Not for me.

Aug 082008

My initial enthusiasm for making money through Second Life is starting to wane. The more research I do into making money in Second Life the more I realize that to make serious money there are a whole range of new technical and software skills that I would have to learn before I could add any real value. In turn if I don’t add any real value I can’t realistically expect to earn any serious income.

Each time I think about it I keep coming back to the comments that Second Life entrepreneur Anshe Chung made in relation to people who come to Second Life solely to make money.

“Most people who just come here (Second Life) for money fail miserably”.

This point bears repeating. I think one of the key drivers behind the success of Second Life has been the community spirit that has developed. People are there because they really want to be there. They don’t go there specifically because there is money to be made – those who do “Fail miserably”.

The question you have to ask yourself as someone who is looking to generate income online is whether or not you are prepared to get involved in the community that is Second Life? Is it for you? Can you put community first and profit second? Are you prepared to learn all the necessary technical skills required for you to add value to the Second life community? In the end it is this added value that will allow you to monetize your efforts. If you don’t add value it will be hard to make any significant income.

If I’m 100% honest I can’t see myself doing it. I think too linearly. I just don’t feel I have the creative skills or the desire to learn them that is necessary to make money on Second Life. So for me I think I’ll give trying to make money on Second Life a miss.

In the end it wasn’t a hard decision for me. The combination of the small amount of people earning over $500 per month in Second Life (see statistics here) and the fact that to even get close to that amount of income each month there is a lot of effort and start up costs involved.

That said I will let you decide for yourself. Just because I don’t think its for me doesn’t mean that you won’t enjoy and succeed at it.

I was recommended to get a book called “The Entrepreneur’s Guide to Second Life: Making Money in the Metaverse” if I wanted to make a serious go at it. I recommend that you do the same if you are interested in making money in Second Life.

You can read an extract from the book here. ‘The Entrepreneur’s Guide to Second Life’

So where does that leave us?

Making money in Second Life – some facts and figures

Aug 062008

My quest for further information about how to make money on Second Life continues.

This is a whole new area to me so I am threading very carefully as I don’t want to get my facts and figures wrong or indeed make some Second Life newbie mistake.

So here’s what I’ve learnt so far.

You can make a million real US dollars on Second life.

One user who goes by the avatar name of Anshe Chung has made a million real USD from her activities on Second Life. I found an interview with her from a few years back when her Second Life activities were worth a real 250,000 USD. This interview is very interesting as it comes from a person who is actually making serious money on Second Life. You can read the full interview here – Virtual Land, Real money.

There are two things I want to point out that I noticed in the interview.

The first is that back in 2006 when this interview happened, Anshe Chung had a whole team of people working for her. So my advice is not to think that she is making serious money on her own. In the interview she says that at that time she had a team of about seven freelancers working for her but that she had also just created a team of ten full time people in China to manage billing, accounting and development. This is a serious operation and not a one person show.

So straightaway it gives some idea of the effort involved in generating serious income in Second life. That said our aim is create a decent second income in Second Life and not to build an empire.

The second thing that struck me was that she gave an incredibly valuable piece of advice to anyone thinking of joining Second Life to generate an income. Here is the quote directly from the Business week piece.

“To what do you attribute your success?

One reason for my success here, I strongly believe, is that I am not only here for business. I am very deeply rooted in this world, like a real native person. Most people who just come here for money fail miserably. They are foreigners, act like foreigners, and lack deep understanding of this virtual country. Many of them are also lazybones who think you just need money to make more money. The truly successful people I know here all are deeply involved in life and society here too.”

The key thing to take away from her answer is “Most people who just come here for money fail miserably”.

To me this simple sentence speaks volumes. Unless you are prepared to make the effort to fully integrate and become part of the Second Life community and experience, it appears that your chances of successfully generating an income are limited.

The figures speak for themselves.

You can check the earnings statistics on the Second Life website here.

The statistic that we are interested in is about half way down the page with the header ‘Linden™ Dollars’ and the sub header ‘Unique Users with Positive Monthly Linden™ Dollars Flow’.

From what I can gather this statistic basically shows us the number of people who are making positive income in the Second Life and how much they are making.

I’m going to use a well worn cliché – but the figures really do speak for themselves. Of the 57,821 people that generated a positive income on Second Life in June of 2008 – the vast majority earned less than $500 – 55,732 users to be exact. Most of these people earned less than $50 – 47,546 users. That’s $50 for the whole month. Not exactly a decent second income.

This makes for slightly discouraging reading. If you thought that Second Life was a quick route to riches or even a quick route to a decent second income then you need to think again.

If you examine the figures closely they seem to be representative of nearly all businesses and markets – where the top five percent make the most money. This to me illustrates nicely that Second Life is acting just like any other competitive market where there is real money involved. The winners win big while everyone else struggles on.

But Second Life is different.

Er no not really. When it comes down to it the people who succeed are those who put in the effort or as Anshe Chung puts it ‘are deeply involved in life and society’. The same with any other business venture really.

So I’m still not convinced about generating a second income from Second Life. I’m sure it can be done – Anshe Chung as well as the other 2089 users who made over $500 in June have proved that its possible.

The question is what will it cost to get to the level of income that you are happy with? How long and how deeply integrate in Second Life do you have to become in order to start generating a second income?

That’s my next bit of research…

Can you generate a Second Income in Second Life?

Aug 052008

I’m currently investigating a very interesting way of making money online.

Second Life

Second Life according to PCmag.com is defined as

“A virtual world on the Internet from Linden Research, Inc., San Francisco, CA (www.lindenlab.com), in which “residents” create an identity, meet people, buy land and build their own environment or purchase an existing one. It is a “massively multiplayer online role playing game” (MMORPG), but one that offers users total freedom to create and interact as if they were living another life. Playing the game requires a client download for Windows, Mac or Linux.”

The definition goes further and you can read the rest of it here. But I thought the first paragraph was enough to give you a feel for what Second life is about. Second life is effectively a massive virtual world where users interact much in the same way they would interact in the real world.

Don’t ask me I’m a newbie.

If I’m honest I am completely new to Second life. I had read a few articles about it a few months back but didn’t look into it any further. However as I was researching ways to generate a second income online Second Life kept coming up so I decided that it warranted further investigation.

I’m still in the process of investigating Second Life and from what I’ve gathered so far there is a lot to learn and understand. That said I have also read that there is potential to make some real money by having a presence and interacting on Second Life.

I’m now focusing on learning more about Second Life. The key thing I am concerned about is whether or not it is feasible and realistic to generate a second income via Second Life.

As with any other method of generating a second income before I commit any serious time and resources to it I want to understand more.

For those of you who are interested in doing the same here are some very useful links to articles about Second Life.

A Second Income on Second Life

The truth about earning money in Second Life

How to earn Linden Dollars in Second Life

Economy of Second Life

From my reading and understanding of these articles my initial reaction is that it is possible to generate income in Second Life but not necessarily a huge amount of it. However I would imagine that you could have a great deal fun doing it and this could compensate for the low income. I will continue my research and keep you posted.

I now have an interesting way of possibly generating a second income to focus on. After yesterday’s trawl through the internet looking at dodgy “earn thousands using our plug in profits system” websites I was becoming a bit disillusioned. I was beginning to think that the web contained nothing but scams…anyway enough of my babbling. I’ve got a Second Life to consider.

Online Second Income success stories – not many

Aug 042008

I’m scratching my head as I search on the internet for success stories of people who have made a good second income online. Most of the stories I have come across are very fake and unbelievable. Most of these ‘success stories’ are on websites that are trying to sell something. Usually it is a miraculous new income generating profit system. Geez thanks for getting my hopes up. Again it’s that cheezy sales pitch that keeps putting me off.

So far I have had no success in locating a good and believable story about generating a second income online.

The reason I’m focusing on generating a second online is because it ticks all the boxes in terms of flexibility and start up costs for someone who is currently in a job. In previous articles I’ve discussed the factors that need to be considered before trying a method of generating a second income. You can read that post here: Debt elimination –the next leg. Generating a second income.

In that post I focused on getting a second job as a way of generating a second income. The reason for this was because it was determined that getting a second job was the quickest and most effective way of generating a second income. I wrote about the need for the logistics to make sense. Can you realistically do a second job all the while maintaining your current job?

Now for many people getting a second job simply isn’t an option. People with children may not be able to afford the additional childcare costs. Or there simply may not be any second jobs available in the surrounding area. As a viable alternative to this, generating a second income online offers the flexibility to allow someone to work from home in their spare time all the while meeting their current job and family commitments.

So far so good, working online from home in your spare time seems the ideal solution. Unfortunately the reality of trying to generate a second income is not so easy and straightforward. Given the low barriers to entry the competition on the internet can be intense. That said there are ways of generating a second income if you have the time and patience to do it.

Here is a very useful article from the The Times newspaper. This article is simply called ‘10 ways to make money online’ and offers valuable ideas and information on how to generate a second income online. I recommend that you take the time to have a read through this article as it will serve as food for thought.

In the meantime I will continue to look for believable online success stories. I know they are out there it’s just a case of finding them!

Second Income? Of course I’m bitter it didn’t work out.

Aug 012008

You know what really annoys me? Those cheezy websites that offer you a once in a lifetime opportunity to earn hundreds of thousands of dollars. Supposedly you can do this in your spare time at home. You will earn fantastic sums of money if only you would just buy their automated system and follow their instructions. It’s really simple just plug and play their system and you will be on the road to riches.

What makes me even madder is the images these so called second income ‘Gurus’ use on their websites. Images of bundles of cash, fast cars and beaches make me want to vomit. How naïve do these ‘Gurus’ think we are? Do they think that those pictures and some slick sales letter will dupe us into buying their automated system?

There’s one born every day.

You can probably guess by my tone that I have been seduced by these websites more than once. I’ll admit the reason those cheezy websites annoy me so much is because I was foolish enough to part with my money in the past. It embarrasses me now when I think about it but I have spent a lot of money pursuing these so called ‘Internet businesses’. What sickens me even more is that I’m sure these internet businesses did make a lot of money…for the person selling them!

If you’re in debt then spending your money on business concepts that do not work or depend on unsustainable methods can knock the wind out of you. The last thing you need is to incur more debt in the pursuit of opportunities that simply don’t exist.

The question I should have asked was ‘If the system was so good then why were they selling it and creating potential competitors instead of just keeping all the money for themselves?’

Learn from experience.

To truly learn it is said that we need to experience things first hand and make mistakes. You don’t learn how to drive or swim by reading a book about it. You get stuck in and start making mistakes – the more the better. This is how we learn.

The same can be said for generating a second income.

I have to admit that I am far from an expert but I am willing to learn. Up to this point I have spent a lot of money learning about what does not work. Often I have wondered if the problem lies more with me and not these so called ‘automated cash machines’. I don’t think so. I could be wrong but in the past I have invested a lot of time, money and energy into these business ventures with very little to show for them.

Could I be getting it wrong every time?

Maybe but I would like to further explore the idea that a sustainable second income can be generated online. Is it really possible to take advantage of all the internet has to offer in terms of leverage and access to a 24 hour a day market?

Over the next articles posts I am going to research and write about online business opportunities to see if it can be done.

I’m toying with the idea of subscribing to one of the more respectable internet business opportunities and really making a go of it to see if it can be done and if it is possible to generate a reasonable second income.

Till Debt Do Us Part – Pay off debt fast