What I'm Doing Now for Income

By Steve Gillman - January 25, 2013

This is Part Two of My Paychecks, Businesses and Investments

Searching for a Business to Buy

I've been looking into businesses that are for sale around here. At the moment I like the idea of buying a vending route. Typically they sell for less than two times the annual net profit and include all the machines, so if I find one that produces $30,000 per year I should be able to buy it for less than $60,000 and work two or three days weekly to keep it going. I recently looked into one that was being sold for $49,000. It netted only about $22,000 annually, but the sale included a van and machines worth $50,000, and all the product and cash in the machines at the time of sale, which probably was another $3,000. The owner said he worked two days per week, but unfortunately it was just too far from where we live to justify the commute.

I have also been talking to the woman who cuts my hair, and after hearing how the salon she works at operates I might be interested in a business like that. I would never want to cut hair, but many of the owners around here don't do that. They just rent out the stations to the stylists for a weekly fee, and the stylists keep all of their income. I like the consistency of that kind of income. Where I have my hair cut every station is always rented out. Salons that net around $50,000 annually have been for sale for $50,000 to $100,000 recently, but you have to be careful about the lease terms where they are located, and note whether the income has been rising or falling.

Possible Stock Trades

I occasionally consider investing in the stock market again. I don't care to start buying in when it is at record levels, but there are some strategies that don't rely on the market as a whole going up. For example, I have been paper trading to try a new strategy that involves buying and selling closed-end funds. These are funds that trade like stocks, and sometimes sell for more or less than the NAV or "net asset value" of the stocks or bonds that are in them. My thought was to find similar funds and buy one that was selling at a discount and sell short another that was selling for a premium (to sell short you borrow the shares and sell them now, hoping to buy them back at a lower price -- it's a bet on the price dropping).

I found two high-yield bond funds a couple months ago that met my criteria. I used this fund screener to identify them:

http://www.cefconnect.com/Screener/FundScreener.aspx

HYB was selling at 11% discount, so I bought (on paper) 400 shares at $9.66 per share. With a $5 commission that was an outlay of $3,869. PHK was selling (amazingly) for a 46% premium, so I sold short 300 shares at $12.35, which means, after the $5 commission, I had $3,700 deposited into my account. In other words, my net cash outlay was just $169. Now, my thought is that good management cannot justify a 46% premium, and since these funds probably buy a lot of the same stuff, the 11% discount on the other didn't make much sense either. But for however long the discount and premium persist, it seems that they are extreme enough that the gap between them will narrow. That's what I'm betting on. Even if the stock market crashes I have little risk, because the loss on the HYB shares should be mostly made up for by the short-selling gain made on PHK shares.

So far I haven't had more than $100 swing one way or the other, and as of late January if I closed both positions I would be ahead just $57 after commissions. Nothing to get excited about, but if my strategy continues to work it could be scaled up. If I stop playing on paper and try this for real I'll detail my experience in the Unusual Ways Newsletter.

Writing Gigs

I like learning new skills, and I may become a house painter if I have to, but I would prefer to write for a living. Since I can no longer just put together pages for our websites and expect to make money from them, I've been investigating writing for others. With nine years online and several books published I have a decent resume now. I submitted two articles to an online magazine in the last month and sold both. They each took me about two hours to write, and I was paid $40 for one and $60 for the other. That was a good start, so I submitted a couple other articles to a paper magzine and one that is online last week, and I'm awaiting their replies.

My hope is that, with some experience, I can eventually get regular jobs that pay $100 or more for short articles (the kind I can write in a few hours or less). Some lager-circulation magazines get half of their content from freelancers like me, and they pay up to a $1,000 for long articles. That would be nice. But for now, if, within a few months, I start getting a couple gigs a week that pay $60 or $100 I would feel good about my long term prospects.

With that in mind I have a request for readers: If you need any writing done for your blog or website, I can help you. Tell me what you need and I'll give you a quote. If it's a topic that I'm familiar with, meaning there will be minimal research involved, I can go as low as $25 per page (500 to 800 words). Once I start getting regular projects that pay more I'll be deleting that last sentence, so take advantage of my offer soon.

Surrogate Jurist Job

I recently made $150 for serving on a mock jury for a day. If you're a subscriber you probably read about that already, but, just in case, here's the page describing that experience:

http://www.everywaytomakemoney.com/surrogate-juror.html

Last year I had a couple jobs which I left on good terms, so if need be I could get them back. Of course, I wouldn't want to work again doing construction cleanup or holding up a sign for minimum wage. I wrote about the latter experience here:

http://www.everywaytomakemoney.com/sign-holder.html

Back in May I wrote about my job as an electric tram driver on my Huffington Post blog:

http://www.huffingtonpost.com/steve-gillman

I moved from that to working as a security officer for the same foundation. The pay was better, but I found that as much as I enjoyed the surroundings (I regularly saw alligators, birds, a bobcat, turtles, raccoons, and lots of rich people), and the opportunity to read for hours while at work, I didn't like standing and sitting outside in Florida in summer. My manager did tell me I was welcome to come work just the winter season if I wish (December through March is when it gets busy here in Naples, Florida). So I have a backup plan for next year if we happen to need the regular paycheck.

I'm always looking at other income sources to add to our collection. I recently sold something for $35 on Craigslist that we got for free. That was fun. I get to take home things I find when cleaning out houses for a local investor, so I might sell some of those freebies as well. I got $100 for my points on one credit card last month. Every little bit helps. Now if I can just convince these retirees that I play chess with to bet on our games...

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