It’s been a truly challenging proposition this year for people – economies are shut down or slowed, jobs and layoffs are constantly impacting income, and children are forced to stay home for virtual schools.
In all the struggle, though, some useful ways to create income have been exposed by some truly smart people, and I wanted to share that here. This isn’t the same old, “take money out of your house” plan that so many people are forced to use.
It’s about properly using the assets and accounts you have – and might not have considered – to keep you and your business afloat.
First of all, if you’ve been following my suggestions, you know how “bullish” I am on Roth IRAs, and that’s one of the first places you should be looking. Because the monies in your Roth IRA have already been taxed, you don’t have the penalties that impact borrowing from a 401(k).The way Roth’s are designed, the contributions you’ve put in for this year can be withdrawn before incurring any penalty. Remember, that could be over $6,000 to tide you over for at least a few weeks. Once you’ve depleted those, of course, there are taxes and penalties, but there’s a strong argument for contributing to your Roth FIRST every year and then deciding on your other investments and contributions.
Again, critical thinking is imperative when it comes to generating or “finding” money in a pinch, and that extends to your other “dedicated” accounts, too. Your HSa, for example, has many “extra” uses – such as paying for COBRA if you’ve lost your job, nearly any medical or health-related challenge that you cannot pass along to your healthcare provider, and quite a few more. Yes, even something as seemingly insignificant as copays fall into acceptable expenditures.
The same can be said for college savings accounts like your 529. Yes, it’s a last resort, but desperate times call for desperate measures. In some states like California, they will impose extra taxes on withdrawals from 529s, but the “primary” penalties are still in line with similar accounts (401(k)s, for example).
Of course, the best way to generate income as a business owner is to simply sell more and serve more. We know of one savvy entrepreneur who – worried about their cash flow in the downturn – launched a new training product and generated over 3,000 new leads and an extra $12,000 in monthly recurring income.
That’s real – and that’s exactly the mindset you need in today’s market!