6

YOUR HIDDEN MONEY

“Rich gets richer with the expenses of the poorest.” 

—attributed to Pradeepa Pandiyan

“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.”

—Dave Ramsey

It takes a ton of work to reach the point of having an empty calendar. Nothing goes on autopilot until you’ve obsessed over every detail of your project, built your systems, and tweaked the operation to make the cash flow.

But you can make things easier on yourself. The best way to start a new business—or any endeavor—is to keep your expenses really low. I know, common sense, but not common practice. Obviously spending less is smart, but most people completely miss the other side of this equation: turning your liabilities into assets.

Don’t tell me you don’t have assets. If you really believe that, you’ve either been drinking stale Kool-Aid or you’re just not seeing the earning potential in the things you do have. This especially goes for the items that classic business authors like Robert Kiyosaki (Rich Dad Poor Dad) will tell you are a liability because they suck cash from you every month: your home, car, boat, etc. Now, we have to forgive Robert for this. Today’s sharing economy just didn’t exist back when he was learning the “ways of the rich” in Hawaii.

That’s our silver bullet: the sharing economy. Because of it, we have the power to turn nearly everything we own or rent into a cash machine. Robert and his cohorts would have killed to do business in a time when they could make those old “liabilities” they warned us about print cash. If we really work the system, we can use the sharing economy to wipe out our expenses completely.

I know a lot of you reading this think what I’m saying doesn’t apply to you. All you see is your debt, your rent, your one car. Just stay with me. Don’t underestimate what can be turned into an asset and don’t skip this step. It plays a huge role in growing your endeavors as quickly as possible. Getting that extra cash keeps you from having to do things you hate, like taking on clients who you know will be a nightmare, or chasing money in ways you don’t want to, just to cover bills. That extra cash also gives you patience. You can spend more time building a great product because you’re not relying on it to cover your expenses. The very items that you owe money on are paying for themselves—and in some cases, bringing in extra cash on top of that.

My favorite part: this is so easy. You just need to know how to connect with people who want to use your stuff. You already know about the mainstream tools like Airbnb, but even then, I’ll show you some hacks to get the site working in your favor. I’ll also clue you in to lesser-known marketplaces for making passive income off everything from your car and office space to your online content. Believe me, you have way more hidden money than you think.

To be clear, this chapter is not meant to be an exhaustive resource on ways to bring in money or to be frugal. That’s a whole other book. Lots of other books. I’ve kept the focus on things that I do, and that I know work, with minimal effort.

AIRBNB TRICKS YOU HAVEN’T THOUGHT OF

If you’ve been conscious within the last ten years you’ve heard of Airbnb. You know it’s a site that lets you list your home for rent to people traveling in your area. I’m rarely home, so the majority of the month I rent my house out to Airbnb travelers. As I’m writing this I just bought a house in Austin, and I’m completely covering my mortgage plus making an extra $500 to $600 in rent. Here’s the math:

I get that this isn’t for everyone. Or at best, not everyone will earn enough on Airbnb to cover all their housing costs. It’s easiest to attract renters when you live in a city or any kind of destination area (beach, ski mountains, college town, etc.). But don’t be so quick to dismiss your home’s earning potential if you live somewhere remote. People visit family who want their own space. Businesspeople travel to see clients. Or never mind travelers: locals may need a place to crash while their house is being renovated, or their pipes burst, or their visiting mother-in-law is driving them insane.

If there is a functioning hotel within a twenty-mile radius of your house you have a chance at making money on Airbnb. And if not? Maybe your house is so remote that people will want to rent it as a retreat space. Think writers, artists, yogis. It’s worth trying as long as you’re willing to share your space.

If you go for it, here are some tricks I’ve learned to spike your listing’s earning potential:

Decrease your per-night fee, but increase your cleaning fee. Airbnb makes recommendations based on the best value. The listings with the lowest rates, the most rooms, and the best reviews will make the top search results. But cleaning fees don’t get factored into this. So you’ll rank higher if you bring your price down from, say, $200/night to $100/night and increase your cleaning fee from $25/night to $125/night. You’ll make the same amount, or more, but it appears cheaper on a per night basis to those looking at potentially renting. I made $15K in my first three months of renting the house out and it was occupied only 20 percent of the time. Of the $15K, $2K was from cleaning fees alone.

Save on cleaning. I bill my Airbnb renters $150/night for cleaning but my cleaner’s bill is only $50/visit—$100 more for me. If you become an Airbnb regular be sure to negotiate a group discount on cleaning. Tell your cleaner, “I can’t pay you $75 per cleaning but I can pay you $50 and guarantee you five cleans a month.” They’ll likely agree to the lower rate knowing they’ll have a consistent $250/month coming in from you. Sandy is great—I just Venmo her $50 after each clean.

Pictures are everything. Invest in great pictures. The cheapest way to hire a photographer if you don’t have talented friends who will cut you a deal is through Snappr.co, a network of freelance photographers around the world. You can also use Thumbtack.com to find local photographers. Whatever you do, use the best possible photos for your listing.

THREE WEBSITES THAT’LL PAY FOR YOUR CAR WHILE YOU’RE BUSY

If you drive to work your car usage probably looks something like this:

Get to work at 9-ish.

Park your car.

Car sits in parking spot until 5-ish.

Or some variation . . . if you take a train to work, maybe your car sits at the station lot all day. Bottom line, your car goes unused during your work hours. And when you’re on vacation it just sits there.

So why not rent it out during the hours you’re not using it? Turo.com is one of the best tools for doing this. HyreCar.com and GetAround.com are also reliable platforms for car sharing. You post a rental listing and people in your area pay an hourly or daily fee to use your car. The rental outlets usually cover insurance. If you’re willing to share your vehicle you can generate a few hundred bucks per month from what is otherwise seen as a liability.

Reliable online marketplaces also exist for boats (GetMyBoat.com, BoatSetter.com), motorcycles (Riders-Share.com, TwistedRoad.com, Bike Bandit.com), and bikes (Spinlister.com). You can even rent out your parking space (Parklee.com). Books publish too slowly for me to list all the latest sharing marketplaces out there. If you own or rent something that someone else might value, chances are you can hire it out. Google it.

HOW MY BLACK T-SHIRTS MAKE ME MONEY

My clothes aren’t exactly printing bills, but my minimalist approach to getting dressed does save me money. I wear the same thing every day: a black T-shirt and black traveler slim cut pants, both from Banana Republic; Patagonia black jacket if it’s cold. I just have many copies of these items.

Me at Facebook HQ in the “Small Room” wearing my go-to black wardrobe.

One reason I do this is that when you bring gently used clothes back to Banana Republic they give you a 30 percent discount off your next order. They donate the clothes for you. They often run 50 percent sales off the entire store and that’s when I stock up on my two favorite items. So I get my T-shirts, which retail at $35, for about $12 each.

It’s not the only way to get money back on clothes, for sure, but it’s what I do.

Another easy approach is to donate clothes to a nonprofit like the Salvation Army and then write off the donation on your taxes. It’s small, but it adds up. The trick is to do it in bulk. Set a bucket in the corner of your closet and put clothes that you no longer want in it. Then donate its contents once a year, or every six months, and keep your receipt for the tax refund.

If you’re willing to put in the time and want to sell your clothes you can set up an account with a local consignment shop and get a cut of the sales on your items. Just remember, again, that the goal here is minimal input. You can turn selling used clothes into a full-time job, and hey, maybe that will be your side hustle. But that’s a whole other thing. If you’re just looking for passive ways to make your clothes work for you, discounts and donations are the easiest ways to do it.

OFFICE SPACE

Those of you who rent or own an office can turn that into an asset, too. Lots of small businesses have spaces that they haven’t fully grown into, or that they just don’t use every day. Breather.com lets you list your space on a daily or hourly basis. You can list anything from a single desk to a full-fledged office with conference rooms. It’s a great option if you don’t want to rent out the space full time but hate to see it go unused most days. Make it work for you.

Breather is also great, of course, if you’re the renter. You can meet clients, host board meetings, or whatever you need to do, without the commitment of an office if you’re not ready for it.

And don’t be confused: This is not like a coworking space, which is a dedicated spot for people to rent desks and offices. It’s a similar concept, only Breather lets you crash at private offices. It’s like the difference between Airbnb and a hotel. You can rent offices in every corner of the world without having to worry about the communal aspect of a coworking space, or whether one even exists where you plan to travel.

HOTEL ROOMS

Most of you reading this book probably don’t own a hotel, but maybe some do. . . . If you do, you should know about Recharge.co. It’s a site that allows you to rent out hourly blocks of time when your hotel rooms aren’t being used. So let’s say a guest checks out of a room at the airport Hilton in San Francisco at 11 a.m. The next guest won’t arrive until 6 p.m. You have to allocate time for cleaning, but even then, there are five solid hours during which the room goes unused. Meanwhile, someone may be in town just for the day and want to take a quick nap and shower before a meeting. They go to Recharge.co and rent the room from 1 p.m. to 4 p.m. Still time to prep for the 6 p.m. guest. You’re getting as much cash as possible out of that room.

I use Recharge.co when I’m traveling and don’t need to stay a full night at a hotel. It’s so common to be in and out of a city in one day for a meeting. You can wash off the airplane crud and recharge for a few hours for much less money than an overnight would cost.

AUTOMATIC INCOME: PATREON AND OTHER WAYS TO SELL YOUR DIGITAL PRODUCT

I’ve mentioned Patreon.com in earlier chapters but it deserves another round of attention here. If you create any digital content on a blog, podcast, or other digital platform you should absolutely have a Patreon page that lets your fans make monthly contributions to your project. I recently launched a page for my podcast as a test (you can see it at NathanLatka.com/patreon). After two days we had thirteen patrons pledging to pay $593 a month. Two months in I was at twenty-nine patrons giving $2,300+ a month.

Patreon’s model incentivizes backers through a reward system. The more people pledge, the bigger rewards they receive. The key to attracting patrons is to create urgency with your rewards. My profile shows only ten or so rewards available for each tier. The message there is: “If you grab this reward before it runs out you get XYZ valuable thing.” Also offer exclusivity—access to content, people, or opportunities that are not available to the public. My top-tier reward is the chance to be interviewed on my podcast for a $500/month pledge. I made only two available and they sold out in the first two days.

Remember, this chapter’s goal is to help you monetize your current assets. So leveraging Patreon makes sense here only if you already invest your time in creating digital content. You can use it to build cash flow on a new project, but that’s a whole other thing. For now, I’m talking to anyone who is up and running already. Make sure you go get your money.