Peer-to-Peer Car Sharing...Money In The Bank Or An Accident Waiting To Happen?

I just learned of something new! A friend of mine who has been needing some extra income has joined the ranks of the sharing economy. No, she is not renting out her house on Airbnb. She is not driving for Uber. She has joined a peer-to-peer car rental company.

I wasn't sure what that was, so of course I did a little research. And what I discovered has me concerned that even though she seems to be making some pretty decent money, the risk don't outweigh the benefits.

What exactly is peer-to-peer car sharing? It's pretty simple. When she isn't using her card, she rents it out to strangers. There are several sites you can use for this. She has listed her car on Turo. But I found a few other sites as well such as Getaround and HyreCar, She lists her car on the site, much like you might list your house on Airbnb with pictures and all the details. She gets to set her own price. Once someone rents her car, she simply meets them, gives them her keys, and then picks up her car at the end of the rental period. Sounds like an easy way to make a few bucks, right?

Right now my friend says she is making around $500 a month renting out her car. I have not asked for proof of that claim. But Getaround says that owners can make as much as $10,000 a year by renting out their cars. Not bad for little to no work!

The companies say that they screen every renter and they can't sign up if they've had a major accident. And they do have insurance to cover their car owners. And this may be fine for someone who is renting out their Kia (nothing against Kia. Just a comment on their affordability). But I'd be a little hesitant to rent out my top-of-the line brand new Jeep Gladiator. If someone totaled my vehicle, I'm not sure some third-party insurance company would pay me it's true value. Unless my own insurance policy covers the driver in this case...which it doesn't. I asked. I could be stuck with some very expensive problems. 

So far, my friend has been lucky. No damage to her car. She says she talked to other renters who told her to make sure she got to know the people renting her car before she gave it to them. I'm not sure how that would be possible. But she is a pretty good judge of character, so maybe. And she says she always inspects the car with the renters before and after each trip, noting any damage. Much like a regular car rental company does. Plus she always asks the renters where they are going...just in case. 

So what do you think? Would you rent your car to a total stranger? It seems to be working well for my friend. But as much as I like easy ways to earn some extra income, I think I'll sit this one out.

Do you have any experience with peer-to-peer car sharing? Let us know in the comments. 

Passive Real Estate Investing...Is That A Thing?

If you're like me, you've had a rental property before...and quickly sold it, swearing "never again!"  

But what if you could invest in commercial and residential real estate without having to any of the actual work involved in managing your property? Sounds too good to be true, doesn't it?

Surprise! This is actually a viable way to earn some extra income. In fact, it can be one of the most powerful ways to put your money to work.

There are a TON of companies that give you the ability to invest in commercial and residential real estate projects without having actually to do any of the heavy lifting yourself. It's called passive real estate investing, and it's a real thing. And at the end of this post, I will give you the two companies I found that appear to be among the best. 

But first, what is passive real estate investing?

Put simply, passive real estate investing is investing in real estate without any real hands-on effort from you. No rent collecting. No property management. No maintenance. Nothing. You don't have to deal with tenants or 2:00 AM phone calls about noisy neighbors or leaky faucets. No active participation whatsoever.. And no, I'm not talking about buying the property and then hiring a property management firm to manage it for you.

I am talking about investing in a Real Estate Investment Trust (REIT). 

REITs are companies that invest in income-producing real estate. They give you the ability to invest in real estate without having to purchase and maintain the actual property. And you don't have to deal with tying to get financing through a bank. We all know how time-consuming and stressful that can be! Through an REIT, you can often get started investing in real estate for as little as $500. 

Real estate values tend to appreciate over time. Rents also tend to rise over time. And real estate tends to be less volatile than stocks or bonds. Then there are the tax benefits related to real estate investing. Investing in an REIT can be a good strategy to generate passive income. 

Of course, real estate investing does come with risks, as does any form of investing. If the value of your property portfolio goes down or the housing market in general declines, you can lose your investment. So always do your due diligence and research before making any investment. No investment can guarantee you either a return or even protection of all your principal. And if they say they can, you might want to walk away. But overall, real estate has proven to be a highly stable, lucrative investment. And an REIT allows many people who couldn't otherwise afford to purchase income-producing properties an opportunity to invest in real estate. 

I am not an expert on REITs or passive real estate investing. Before you decide to invest, I would find someone with real knowledge of real estate. I have done some research though and have found two REITs that have decent reviews. I am not an affiliate for either of these companies. Both have their pros and cons. 

Fundrise: Founded in 2012 and headquartered in Washington, DC, Fundrise is one of the leading real estate investment platforms.

DiversyFund: With a $500 minimum investment and no management fees, DiversyFund is a low-cost entree into the often high-roller world of real estate investing. 

If you have often dreamed of being a real estate mogul, or if you're just looking for a way to add some passive income to your financial strategy, investing in an REIT might just be for you. 

Multiple Streams of Income - MLM Marketing

When the pandemic hit, millions lost their jobs. When natural disasters strike, many lose income while business are closed. If you or a family member becomes ill, you may lose income while you miss work. 

All it takes is one hiccup, one unexpected event, and suddenly...you no longer have a paycheck coming in. And whether it's just for a few days, as in a bout with the flu or a sick child, or months as in the case of the pandemic, it can be devastating.

That's why it's so important to have multiple income streams. Ways to keep cash flowing even when your primary source of income has stopped or slowed.

One of the easiest to get started is MLM marketing or network marketing. 

MLM marketing, is a method for selling and distributing products or services. It works on the principle that the most successful way to build a business with new and returning customers is through word of mouth or through integrated online marketing that then promotes one person telling another about the business.

Before you turn away saying this can never work for me, let me assure you it can. It works for many people all over the world every day. It is one of the most successful marketing concepts ever created. You just have to understand what it is and how it works.

SO WHAT EXACTLY IS MLM MARKETING?

If you have ever purchased Avon, or Tupperware, or Amway, or Melaleuca, or Paparzzi Jewelry...

Or any of hundreds of thousands of products from hundreds of thousands of companies, you have purchased from a network/mlm marketing company.

Many of these companies refer to themselves as "direct sales". But if you can recruit people to be on your team and get paid for doing so, it's an MLM marketing company.

But what exactly is it? MLM marketing is a business model used by many companies to sell their products. Instead of doing the marketing themselves through online sites or brick-and-mortar stores, they use representatives to market and distribute their products.

Most MLM reps work from home. In the past, reps typically had to buy product upfront and then sell it. Remember Tupperware and Mary Kay parties? But with the advent of the internet, now reps focus on getting people to simply sign up as customers and order their products directly from the company. The company ships, invoices, and collects payment. Reps simply keep the company supplied with a stream of customers for their products.

In addition to earning commission from product sales, reps have the ability to recruit and train other people to be reps also. As these new recruits make sales and recruit their own reps, everyone above them on that team earns a commission. Hence the term MULTI-LEVEL or NETWORK Marketing

HOW IT WORKS

MLM marketing reps are typically recruited by other reps in the business. In the past, you probably attended an opportunity meeting where someone did a presentation about the company and then people were encouraged to sign up.

Once again, the internet has changed how we do things. There are still group presentations, but these are mostly done online. Most reps, myself included, prefer to get to know people first. Then if it seems like they might be a good prospect for the business, we might sit down for a face-to-face chat or invite them to watch a video presentation.

Once you have watched the presentation and decide to join, the signup process is easy. There are forms to fill out to become an independent representative for the company and for tax purposes. You typically will not have to purchase large quantities of merchandise. But you will be encouraged to buy some products for your own use or to sell to others. And you will be encouraged to put these on AUTOSHIP. Autoship means the company will ship your products to you every month without you having to re-order. Since these companies make their money and pay their reps from product sales, getting you to purchase is important. Companies will incentivize you to do this in many ways. The most popular are to either only pay commissions to reps who are on autoship, offer product discounts to reps on autoship, or both.

IS IT LEGAL? DOES IT WORK?

MLM Marketing is perfectly legal. Yes, there are pyramid schemes and scams out there. The best way to determine if it is a reputable company is to see where the focus is. If the company makes the bulk of their money from the sales of a quality product, and NOT the recruitment of other reps, it is most likely a legitimate MLM Marketing company.

And just because a company is legitimate does not mean all the reps operate with integrity. I have seen all kinds of claims made about products, particularly in the health and wellness/weight loss markets. And I have seen outrageous income claims made in an effort to recruit reps.

Does it work? That depends. This is a business, just like any other business. You won't make $10,000 overnight in your sleep with no work owning a McDonald's franchise. The same is true here. But if you are willing to learn the skills necessary and do the work, you can build a very successful business.

SHOULD I JOIN AN MLM MARKETING COMPANY

I can't answer that question for you. Only you know if this is the right business model for you. But I can tell you some of the advantages.

Anyone can make a decent living with an MLM business. It all depends on how hard you want to work. It's just like any other business. If I open a restaurant, or a childcare service, or a flower shop and then don't promote my business and don't try to sell my products or services, I am not going to make any money. I might sell a little bit to family and friends, but if I don't advertise and market and look for new customers every day, I won't be successful. And you have to be willing to learn how to do that effectively. There's good marketing and very bad marketing. Why do you think every franchise makes all of their new owners do things the way they want? Because they have found out what works. In network marketing, you won't be told what you have to do. It's your business. But you should be offered lots of opportunities to learn.

You will be expected to recruit others into the business. Yes, we get bonuses for recruiting other reps. But if you think we can live off that without product sales, you are sadly mistaken. And where do you think the money comes from to pay those bonuses anyway? Product sales!

Is it hard to recruit others? Not once you learn how to do it properly. Do you REALLY have to? No. You can be content with what you make on your own product sales. But this is where one of the big benefits of network marketing comes in. It's called LEVERAGE. Say I have to make 10 sales to make $1000. That means I have to find 10 new customers for every $1000 I make. If I'm making $10,000 a month, that's 1000 new customers I have to find EVERY MONTH!

Now suppose I have recruited 5 people on my team. I still get $1000 for every 10 sales I make. But I also get $200 for every 10 sales my team makes. So suppose we have a really good month and we all made 1000 sales. Instead of $10,000, I now have made $110,000. With no more work on my part than it took to make $10,000. And if something happens and I am sick or I have a family emergency and can't make my 10 sales, I will still earn some income from the sales my team made. Will I always make that kind of money? No. Just like any other business, there will be good months and bad ones. You will have go-getters on your team who will make lots of sales and you will have some that don't do anything. But the potential is there. And the bigger your team, the greater the opportunity for money!

By the way, the concept of leverage has made lots of companies very wealthy. Think about McDonald's. Do you think they would be the company they are today if they didn't get a piece of the pie from every McDonald's franchise out there? Same concept.

You will be expected to pay an enrollment fee. You are buying a business. Do you think that McDonald's gave away those franchises for free? This is a legitimate business model. Expect to treat it like one! How much? That depends on the company. I have seen as low as $30 to as high as several thousand. The wonderful thing is that there are companies with enrollment fees to fit almost any budget. Some companies even have a range of prices, depending on what you want and can afford.

This is your own business. You will be subject to taxes and laws just like any other business. Your company will provide you with materials and training but you will be expected to do your own marketing and recruiting. They will probably have some ground rules that tell you what you can and can't do when representing them. Things like no fraudulent claims, or charging more for enrollment fees than the company dictates. If you expect to grow very large, you will have to learn all the things it takes to manage a business.

You can work at your own pace. Many of us started part-time until we built a large enough business that we could just work it full-time. There are no quotas to meet. Only your paycheck which will directly reflect the amount of work you put in. There are no set hours. When I started, I worked rotating shifts so sometimes I worked my business during the day. And sometimes I worked while most others were sleeping. Not always easy back then. Today, with the internet, you can learn how to be promoting your products and business 24/7...even while you sleep.

You don't need a big office or special equipment or certain skills. Most of us started out of our homes. I worked mostly from my living room or bedroom. And all it takes is your kit from your company and effort. A computer or smart phone makes things easier, but I didn't have any of those when I started. Heck they didn't even exist! (Oops, did I just give away my age?!) Anyone can do this. I have an 18 year old college student on my team. And I have a 74 year old grandmother. And every age in between. I have stay at home moms, lawyers, teachers, a hairdresser, a fitness instructor, and even a used-car salesman on my team. Anyone can do this if they are willing to work and learn.

This is a real business. Which means you will qualify for all of those home business tax deductions!

The income potential is limitless. You can make as much or as little as you choose. It all depends on the amount of time and effort you put into building your team and your business. The network marketing industry has created more millionaires than any other industry. 

However, while making millions would be wonderful, the cold, hard, facts are that most MLM marketers won't ever hit that level. Not because it's not possible. Most of us just don't won't to devote the time and energy it takes to get there. 

What many of us will do, and what is most important, is this. We make enough to keep food on the table and bills paid, We can keep a roof over our heads. We can put money into investments and savings. We can afford some of the nicer things in life. 

If you are looking for a an additional income stream, I highly recommend you take a thorough look at MLM marketing. 

Ready to get started? Want more information? Contact me here!