Side Hustles Usually Won’t Bring a Pink Caddy

Hey Paul: I am working out from under a fair amount of debt. My job covers current living expenses but not much to put towards paying down debt. I am looking into taking on a second part-time job and will devote the money to debt reduction. I am a single mother with two school age children. What suggestions do you have for side hustles?

I applaud your efforts to work your way out of debt. Usually people start by focusing on their spending habits and try to cut out the luxuries we too easily see as necessities. In some cases there are some obvious culprits – fast-food restaurants, the $5 latte habit, home-shopping-network “deals”, etc. But at some point we hit a hard limit on what we can or at least are willing to cut from our spending.

Assuming you’ve cut your spending to the core then boosting the income sources is the next option. The hope is that you can find a job that is fun, has flexible hours and you can make some good money. And, just for clarity sake, let’s assume legal. This job description matches various “direct sales opportunities” that may fit your needs.

Let me give you our brief experience with direct sales. My wife (with my somewhat hesitant blessing) has tried a couple of ventures – as a Mary Kay and “31” consultant. Startup costs are modest but not trivial and the potential sales commissions are huge. But you’ve got to find customers which is nontrivial.

My wife was always able to make some early sales and she always had one major buyer. Unfortunately from a business perspective that was also my wife. In the end she might have broke even with her commissions covering the “internal sales.” Probably the biggest lesson we took from these experiences is that despite the corporate promises, nothing sells itself. Be prepared to hustle and put in some serious hours to be the break-out sales woman in your niche. Who knows – maybe you’ll have a pink Cadillac in a few years!

I will add that I don’t like the idea of selling to “friends and family” things that are going to burst their budget. Part of the direct sales pitch is the social aspect of getting together with your girlfriends enjoying free samples and snacks. Ultimately you are providing an experience that brings people the opportunity to buy a good product from a friend. My dismissing of this advantage falls into the critique of economists knowing the price of everything and the value of nothing.

If direct sales is not looking like a good fit for you then taking a position “beneath you” may be a humbling but necessary step. You are a professional but you may have to deliver pizzas or clean homes to make that extra $10 to $15 an hour.   That’s not an easy path but it is a temporary arrangement that many people will respect you for including your kids.


Seven Quick Money Fixes

Hey Paul: What are some of the easiest (and free) ways to improve our financial picture?

 I like your approach to tackling what may be big financial challenges by starting with the quick, simple and free actions. These small steps can in some cases solve or ward off much bigger problems. So without further ado here are some quick fixes.

Start by Filtering out the Noise. Do you get inundated each and every day with junkmail, spam emails, robo sales calls, and credit card applications? To reduce junkmail go to I also suggest setting up a token email account like to use for those one time signups requiring an email address. To opt out of credit card and debt relief solicitations go to To sign up for Do Not Call register at These won’t cut off all unwelcome marketing but it will dampen the noise allowing you to better hear the signals.

Money can only go one of three places – spent, saved or taxed. There are several popular, free apps such as Mint and Personal Capital that can track your spending and net worth. There is about 1 in a 1000 people that can manually keep a budget. Today’s technology takes over most of the legwork – if you are willing to trust access to your finances to the cloud.

A Big tax refund could have helped earlier. Suppose that just this week you got a check from the U.S. Treasury for $1000 – Myrtle Beach vacation or new couch? But suppose you’ve got some really nasty credit card debt sitting at 29.99% for over a year. If you had an extra $85 a month in your paycheck rather than giving the IRS an interest-free loan, you are paying down debt in this case saving roughly $300 in interest. You can adjust your withholdings at any time by filing an updated W4. Unfortunately the W4 doesn’t let you directly select the dollar amount of tax withholdings. The IRS and tax preparers have online calculators that can do this calculation for you. See

Doubling your money happens much more often through your employer’s retirement matching plan than at Keeneland. Not everyone works for an employer who will match their retirement contributions. Typically the employer matches your contribution up to say 3% of your earnings. There are variations in the plans such as vesting over a few years and the level of matching. I realize that some budgets are so tight that devoting even $100 a month to retirement may seem impossible. But if you can find that money by taking on that side hustle job or trimming back the entertainment or restaurant tabs, you will have effectively doubled your money with each retirement contribution.

Cash transactions remind us how long it took to earn that money. The convenience of credit cards or even debit cards or writing a check blur our wants and our ability to afford those toys. You don’t need to use cash for fixed transactions like your mortgage or utilities. Start by paying cash for the budget busters – restaurants and clothes.

Credit, Loans, Mortgages, or Capital are just nice names for Debt. I suggest cutting (literally) back to at most three credit cards. Preferably you primarily use a debit card that draws on your bank checking account. To see all your debt related accounts request your free credit report at It’s also good to know your credit score that can be purchased for less than $10 or is offered free with many credit cards.

Do you have an exit strategy in place?   Every adult needs a will. I have used the online software to create my will and a living trust. A living trust typically keeps your estate out of probate saving your heirs about 5% of the assets – maybe ask them to spring for the money to put a trust in place. There are a few different health related documents that are simple to complete (other than the contemplation of the scenarios when these would become effective) such as a living will and health and financial power of attorney.

Challenge yourself by completing one of these tasks today!

Dr. Paul Hamilton is an Associate Professor of Economics at Asbury University and a CFP providing financial coaching to middle-class Americans. He is available to provide free workshops to churches, local businesses and other groups.

Contact him at or


How Can I Get Rich?

Hey Paul: I am 15 years old and I have one question for you – How can I get rich?

Your question is probably the first one on many people’s minds. I have two teenagers and a tweener who have not exactly gobbled up my previous columns’ advice on taxes, social security and Obamacare. But your question is one that perhaps everyone short of the Pope have pondered – Wouldn’t it be nice to have enough money to never have to wonder if you have enough money?

I came across a blog by J.D. Roth that reviewed three national best-sellers on the topic of what makes the rich different from the rest of us – other than they have more money. Roth gives summary lists of Rich Habits: The Daily Success Habits of Wealthy Individuals by Tom Corley, The Secrets of the Millionaire Mind (Think Rich to Get Rich) by T. Harv Eker and The Top Ten Distinctions between Millionaires and the Middle Class by Keith Smith.

Let me share a few of their “get rich” insights. Corley’s survey found that the rich live within their means, don’t gamble, read daily, limit screen time, network, volunteer, work hard, set goals, don’t procrastinate, listen, avoid toxic relationships, have a mentor, and make their own luck. As a young person you likely have heard many of these principles from your parents, teachers, or preacher. What I like about Corley’s findings is that they apply broadly regardless of your wealth status or goals.

Eker believes in financial blueprints that largely dictate our approach to life, which in turn drives our financial success or lack thereof. His rich versus poor contrasts sound like Donald Trump lines – Rich people think big, poor people think small; Rich people are bigger than their problems, poor people are smaller than their problems; Rich people admire other rich and successful people, poor people resent rich and successful people. I have to stop here as my blood pressure is rising. Eker evidently equates a person’s worth directly proportional to their net worth – the millionaire is a hundred times more worthy than the poor person. Young man, let me advise you to never fall into the mindset that your money measures your worth in absolute or relative terms.

Smith continues with a similar list of ten distinctions between Millionaires and the middle-class (I guess the poor have taken enough of a beating). In order of importance he states that millionaires think long-term, talk about ideas, embrace change, take calculated risks, continually learn and grow, work for profits, believe they must be generous, have multiple sources of income, focus on increasing their wealth, and ask themselves empowering questions. These ideas sound reasonable until you read the flip side – for example, the middle class thinks learning ended with school.

I don’t think these authors have it all wrong. People do sometimes get rich because they work diligently towards lofty goals and took risks that paid off financially. In his blog Roth also counters some of the authors’ suggestions mentioning that he has friends who embrace change and love learning but are not millionaires. He notes that it’s possible to be successful and poor and it’s possible to be rich and a fool.

On that note, I will play psychologist and ask what do you really want? Gobs of money and the power and toys that go with it? Financial peace? To find the balance between working to make money and the time to enjoy spending it (or giving it away)? Okay, you are 15, you want to be a multi-millionaire, live in a big house, drive a fancy car and have a beautiful wife. You want me to take a break from giving out “life-lessons” and just tell you how to become rich.

Fine. You will need to work very hard at one thing (everything else becomes a distant second). You need to dream big and wake up and work towards those dreams every day. You need to prepare to make deep sacrifices of time with family and friends.   If you are “book smart” there are well-established paths to becoming a physician or big-shot lawyer. If you are an “idea guy” then you can do everything in your power to succeed financially and you have a really low chance you’ll hit the big time. If you go into business you’ll need to be tough on suppliers and employees and ruthless with the competition.

Alright that was my over-the-top war speech of what it takes to be the best. I have been fortunate to know many wealthy people who did it “the right way”. One thing that I’ve discovered is that to a person their high net worth was not the source of their happiness. Numerous surveys have found that beyond a relatively modest level – what I would consider the low-end of middle-class – that more money had NO impact on a person’s well-being! Things like quality relationships, positive self-esteem, and spirituality factor much more powerfully into quality of life then money.

Confession time – I was probably a lot like you at your age. I too dreamed of being a self-made millionaire (I still think I have million dollar ideas). But I like many others have grown up and found terrific blessings in doing what I love doing, being around people that I love, and living for a higher purpose. Of course if you can do all that and make big money too, go for it!

Dr. Paul Hamilton is an Associate Professor of Economics at Asbury University and a CFP providing financial coaching to middle-class Americans. He is available to provide free workshops to churches, local businesses and other groups.

 Contact him at or





Who Needs a Financial Advisor?

Hey Paul: We are a middle-class family with three children the oldest headed off to college next fall. We are halfway through a 30-year mortgage but otherwise do not have any debt. All our retirement savings of about $300K is in our employers’ 401(k). Do we need a financial advisor? What would be the benefits as we plan towards retirement and other life goals?

It’s a great blessing to have people in your life that you can rely on for trusted advice and accountability. The trick is, of course, how to identify those people with the skill set and character to deliver advice at a reasonable price.

The truth is that almost anyone can call himself or herself a “financial advisor”. If they provide “investment advice” then generally they need to register with the state and undergo background checks and have achieved a certification such as being a Certified Financial Planner (CFP). But that fact that a person is not a criminal and has some book knowledge of money doesn’t necessarily make them a good financial advisor.

A recent commercial ( features a Chase Financial Advisor visiting various retirement parties where his clients profusely thank him for making this all possible. While I am all for being grateful for those who have helped us along life’s journey, it is preposterous to claim that it was the advisor rather than the client who put in 40 years of work that is owed the lion’s share of the credit.

Perhaps the small print of the commercial should include Vanguard founder, John Bogle’s take on financial advisors:

“Our hypothetical fund investor has earned $1,170,000, donated $700,000 to the mutual fund industry, and kept the remainder of $470,000. The financial system has consumed 60% of the return, the fund investor has achieved but 40% of his earnings potential. Yet it was the investor who provided 100% of the initial capital; the industry provided none. Confronted by the issue in this way, would an intelligent investor consider this split to represent a fair shake? “ In other words your advisor brought you a bottle of wine to celebrate your retirement and drove up in the Porsche that you bought him.

Now that I have thoroughly bad-mouthed my own (side) occupation, let me provide some brighter views and various alternatives to getting good financial advice. There are several opportunities to obtain solid financial advice. For those who work in a company with a Human Resources office, some basic but very important guidance can usually be gathered on selecting a health insurance plan, flexible spending accounts, and opportunities to contribute (often with a company match) to the employer retirement account.

A second resource is your tax preparer particularly if they are a CPA. A CPA’s forte is tax planning but some have developed expertise in financial planning. Since they would be familiar with much of your finances from your tax return, turning to financial advice is a natural compliment to their services. My mother-in-law has been relying on David Hudson, CPA for many years for both tax and financial advice.

To truly receive comprehensive financial planning one must typically turn to a “financial planner” which as I mentioned earlier can mean many different things. The Hatfield and McCoy feud in financial advising is between those who are fee-based versus those who are commission based. I won’t drag you into all the gory details but much of the challenge is that people are reluctant to pay for advice but will accept a “free” financial review that almost always concludes with a sales pitch for an annuity, permanent life insurance &/or long-term care insurance. These aren’t necessarily bad financial products but often are riddled with exorbitant fees.

The fee-based financial planner is not necessarily a viable option for middle-class households. A typical comprehensive plan will run you around $2000 and for those assets they manage for you there is around a 1% annual fee. [Shameless self-promotion warning] In my own practice I charge $1000 for the plan and show the client how to manage their assets using Betterment.

Let me ask you something. When you’ve been at a restaurant and got a so-so meal did you complain to the manager? No, probably not. Your ‘problem’ is that you are too nice. And when your supposedly trusted advisor puts the hard sell on you won’t be able to say no or ask the tough questions and expect full answers.

What would be some tough questions to ask your advisor? If I invested the funds in an index fund instead of buying this financial product, what is the probability that I’d come out ahead? [No advisor will answer this. Watch out for a mildly related fact such as ‘70% of seniors rely at some point on long-term care.’] How much is your compensation for selling this product? [Could easily be more in an afternoon than you make in a month.]

Fortunately an imminent ruling by the Department of Labor is going to impose a ‘fiduciary standard’ on all financial advisors. A fiduciary is required to put the client’s interest above their own – a modern version of Love Thy Neighbor as Thyself.   The DOL fiduciary ruling will dramatically change how financial planners provide advice and sell products.

Do you need a financial advisor? You know it sounds like you’ve got some enduring financial principals figured out on your own – living within your means, avoiding debt, and working hard. My first advice would be to self-educate by reading a general book on finances as well as religiously turning to my More-Than-Money column each week. A second piece of advice is to seek out a fee-based planner and pay an hourly fee to get specific advice such as financing your child’s college education.

Dr. Paul Hamilton is an Associate Professor of Economics at Asbury University and a CFP providing financial coaching to middle-class Americans. He is available to provide free workshops to churches, local businesses and other groups.

 Contact him at or









Handling financial riddles and resolutions

Paul Hamilton | More Than Money | Posted: Wednesday, January 20, 2016 5:30 pm

More Than Money is a new weekly financial-advice column published by The Jessamine Journal. It will generally follow a question-and-answer format concerning personal finance issues such as college costs, social security, managing debt and starting a business. The column will also take a look at local economic issues such as the bypass extension, education policy and Kentucky’s health-insurance market.

Three guys go to a hotel to rent a room that costs $30. They each pay $10. They head to their room when the manager realizes the weekday rate is only $25. He sends the $5 overcharge with a bellboy up to the room. The three men each accept a dollar refund and tip the bellboy $2. So each man paid $9 and the bellboy received $2 for a total of $29. What happened to the missing dollar to bring the total up to $30?

I first heard this riddle three decades ago in Jessamine Junior High from my good friend, Kent Slusher. This story may very well have launched my career as an economist.

It illustrates a few important facets of financial planning.

One: It is easy to get turned around when contemplating even a relatively simple situation.

Two: The value of a dollar changes dramatically over decades. In today’s dollars, the room may cost $90, but the riddle can still be asked the same way.

Three: The story appears to be about money, but other life realities matter. The logistics of three guys and two beds may be the trickier question.

So what happened to the dollar? The travelers’ expenses of $27 match the sum of revenues of $25 for the hotel and $2 for the bellboy. That means the tip should be counted as part of the $27 sum, not in addition to the $27. Suppose there was no tip; should $27 in expenses equal the original cost of $30? No way.

Question: What is the best way to follow through on a New Year’s resolution?

Answer: Setting goals to better our lives each January — no matter how many times we’ve fallen off the wagon — is better than accepting the status quo.

We typically know what we need to do: eat less and exercise more; or, for financial resolutions, spend less and save more. Following these resolutions will undoubtedly drop both pounds and debt.

Those who are successful in these goals usually share three traits: they set attainable goals, hold themselves accountable and have a plan.

Suppose your goal is to become debt-free. That may be too ambitious to accomplish in a year. Instead, you could set a series of monthly goals, such as not eating at restaurants or setting up a budgeting app such as Mint.

You can be accountable to yourself or a friend. You could throw down a challenge to a friend to see who can hold out the longest without dining out. Keep score and text your progress each day.

Putting a plan in place lets you set attainable monthly goals and track your progress. It’s important to have a written plan; I suggest tracking your goals on your email calendar. If you are unsure of how to set up a plan, I am more than willing to help you establish one.

I would add to these ideas doing something in the next two minutes to set up early success.

If you have high-interest debt, take all your credit cards out of your wallet and cut them up. Text your friend and ask him or her to be an accountability partner. And here’s my challenge to you: Do this before you turn to the next article in the newspaper.

Dr. Paul Hamilton is an Economics Professor at Asbury University and a Certified Financial Planner. Questions you’d like to see answered in the column can be sent to All reader-submitted questions answered in the column will be published anonymously and questions may be edited for clarity or generality.

Dr. Hamilton can provide free workshops for local churches, businesses or other groups. His website is