But what happens when unexpected challenges threaten your organization’s ability to continue its work? A single lawsuit, property damage incident, or data breach could derail years of progress and put your mission at risk.
Many nonprofit leaders assume their good intentions provide enough protection, or that insurance is an unnecessary expense that diverts funds from their programs. This mindset can prove costly. Even the most well-intentioned organizations face real risks that insurance can help mitigate.
This guide explores why insurance isn’t just recommended for nonprofits—it’s essential. We’ll examine the specific risks your organization faces, the types of coverage available, and real examples of how insurance has protected nonprofits when they needed it most. To take the next step in safeguarding your mission, get a nonprofit insurance quote from Insure and ensure your organization has the protection it deserves.
The Hidden Risks Every Nonprofit Faces
Nonprofits operate in a complex environment filled with potential liabilities that many leaders don’t fully recognize. Understanding these risks is the first step toward protecting your organization.
Liability Risks Are Everywhere
Your nonprofit likely interacts with volunteers, clients, donors, and the general public regularly. Each interaction creates potential liability exposure. A volunteer could be injured while helping with your food drive. A client might slip and fall at your facility. A board member’s decision could lead to allegations of mismanagement.
These scenarios aren’t hypothetical—they happen to real organizations every day. Without proper insurance coverage, a single incident could result in legal costs that exhaust your reserves and force you to shut down operations.
Property and Equipment Vulnerabilities
Most nonprofits own or lease property, equipment, and supplies necessary for their operations. Natural disasters, fires, theft, and vandalism can damage or destroy these assets. Consider how a flood could ruin your computers, filing systems, and program materials, or how a break-in could result in stolen equipment and compromised donor information.
The financial impact extends beyond replacement costs. Interrupted operations mean you can’t serve your community, potentially losing grants or donations while still facing ongoing expenses like rent and payroll.
Digital and Data Security Threats
Nonprofits handle sensitive information about donors, clients, volunteers, and staff members. Cyber criminals increasingly target nonprofit organizations, knowing they often lack robust security measures. A data breach could expose personal information, leading to notification costs, credit monitoring expenses, legal fees, and potential lawsuits.
Additionally, ransomware attacks can lock you out of your own systems, disrupting operations and potentially requiring expensive recovery efforts.
Employment-Related Exposures
As an employer, your nonprofit faces various employment-related risks. Former employees might file wrongful termination claims, while current staff could allege discrimination or harassment. Even with strong HR policies, these situations can arise and result in significant legal costs and settlements.
Board members and senior staff also face personal liability for their decisions and actions on behalf of the organization. Poor financial management, conflicts of interest, or failure to comply with regulations could trigger lawsuits against individuals personally.
Essential Insurance Types for Nonprofit Organizations
Different types of insurance address specific risks nonprofits face. Understanding these options helps you build comprehensive protection for your organization.
General Liability Insurance
General liability insurance serves as your first line of defense against common risks. This coverage protects against bodily injury and property damage claims arising from your operations, premises, or products.
For example, if someone trips over a cord during your fundraising event and breaks their arm, general liability insurance would cover their medical expenses and any resulting lawsuit. The coverage also extends to advertising injury claims, such as allegations of copyright infringement in your marketing materials.
Most general liability policies also include personal and advertising injury protection, covering claims related to libel, slander, invasion of privacy, and copyright infringement.
Property Insurance
Property insurance protects your physical assets, including buildings, equipment, furniture, supplies, and inventory. This coverage typically includes protection against fire, theft, vandalism, and certain natural disasters.
Beyond basic property coverage, consider business interruption insurance. This protection helps cover ongoing expenses and lost donations when covered damage prevents normal operations. If a fire damages your facility and you need to temporarily relocate, business interruption coverage can help pay for alternative workspace and maintain essential programs.
Directors and Officers (D&O) Insurance
D&O insurance protects board members and officers from personal liability arising from their management decisions and actions. This coverage is crucial because board members could face personal lawsuits even when acting in good faith on behalf of the organization.
D&O insurance typically covers legal defense costs, settlements, and judgments related to claims such as mismanagement of funds, employment practices violations, or failure to comply with regulatory requirements. Many qualified individuals won’t serve on nonprofit boards without this protection.
Professional Liability Insurance
If your nonprofit provides professional services—such as counseling, education, or consulting—professional liability insurance protects against claims related to errors, omissions, or negligence in service delivery.
This coverage is particularly important for nonprofits in healthcare, social services, or educational fields where mistakes could harm clients or beneficiaries. The insurance covers legal defense costs and damages if someone claims your services caused them harm.
Cyber Liability Insurance
Cyber liability insurance addresses the growing threat of data breaches and cyber attacks. This coverage helps pay for breach response costs, including notification expenses, credit monitoring, legal fees, and regulatory fines.
The insurance also covers business interruption losses from cyber incidents and can help with the costs of restoring damaged data and systems. Some policies include cyber extortion coverage for ransomware situations.
Real-World Examples: When Insurance Made the Difference
Understanding how insurance protects nonprofits becomes clearer through real examples of organizations that faced unexpected challenges.
The Food Bank Fire
A regional food bank in the Midwest suffered a devastating fire that destroyed their warehouse and thousands of pounds of food inventory. The building was a total loss, and the organization faced the prospect of closing indefinitely while trying to rebuild.
Fortunately, the food bank had comprehensive property insurance and business interruption coverage. The property insurance covered the building reconstruction and replacement of equipment, while business interruption insurance helped maintain operations at a temporary location. The organization continued serving the community throughout the rebuilding process and reopened stronger than before.
Without insurance, this food bank would likely have ceased operations permanently, leaving thousands of families without access to emergency food assistance.
The Youth Program Lawsuit
A nonprofit youth organization faced a lawsuit when a participant was seriously injured during a supervised activity. The family claimed inadequate supervision and sued both the organization and individual staff members for negligence.
The organization’s general liability insurance covered legal defense costs that exceeded $100,000 over two years of litigation. The insurance company also paid a settlement that resolved the case without forcing the nonprofit into bankruptcy.
The lawsuit could have bankrupted this organization, which operated on a modest annual budget. Instead, they continued serving young people in their community while the insurance company handled the legal matter.
The Data Breach Crisis
A social services nonprofit discovered that hackers had accessed their database containing personal information for over 5,000 clients, including Social Security numbers, addresses, and case notes. State law required immediate notification of affected individuals and regulatory agencies.
The organization’s cyber liability insurance covered breach response costs, including forensic investigation, legal consultation, notification expenses, and credit monitoring for affected individuals. The total costs exceeded $150,000—far more than the nonprofit could have afforded without insurance.
The insurance also covered business interruption losses when the organization had to shut down their computer systems during the investigation and remediation process.
The Employment Lawsuit
A former program director sued a nonprofit organization and its executive director, claiming wrongful termination and age discrimination. The lawsuit sought damages exceeding the organization’s annual budget and named the executive director personally.
The nonprofit’s employment practices liability insurance and D&O insurance worked together to provide comprehensive protection. The policies covered legal defense costs for both the organization and the executive director, ultimately paying a settlement that resolved the case.
Without insurance, the organization would have faced a choice between bankruptcy and abandoning their mission to pay legal costs and potential damages.
Choosing the Right Insurance Coverage for Your Nonprofit
Selecting appropriate insurance requires careful assessment of your organization’s specific risks and needs. This process involves several key considerations.
Assess Your Risk Profile
Start by identifying the risks most relevant to your operations. Consider your activities, locations, staff size, volunteer involvement, and the populations you serve. Organizations working with children, elderly individuals, or vulnerable populations typically face higher liability risks.
Review your historical claims and incidents, even minor ones that didn’t result in lawsuits. These events indicate potential future risks that insurance should address.
Evaluate Your Assets
Catalog your property, equipment, and other assets that need protection. Don’t forget intangible assets like donor databases, program materials, and intellectual property. Determine replacement costs for these items to ensure adequate coverage limits.
Consider how long your organization could survive without its primary facility or equipment. This analysis helps determine appropriate business interruption coverage levels.
Understand Legal Requirements
Some insurance types may be legally required. Workers’ compensation insurance is mandatory in most states if you have employees. Grant agreements or contracts might require specific insurance coverage. Landlords typically require tenant liability insurance.
Review all legal obligations to ensure your insurance program meets minimum requirements.
Work with Knowledgeable Professionals
Partner with insurance professionals who understand nonprofit operations and risks. Generic business insurance agents might not fully appreciate the unique challenges nonprofits face or the specialized coverage options available.
Many insurance companies offer programs specifically designed for nonprofits, often at discounted rates. These programs typically include coverage combinations that address common nonprofit risks.
Budget Appropriately
Insurance is a necessary operating expense that protects your ability to continue serving your mission. While cost matters, focusing solely on price can leave dangerous gaps in coverage.
Consider insurance costs as an investment in your organization’s sustainability. The expense of adequate insurance coverage is minimal compared to the potential costs of uninsured losses.
Review and Update Regularly
Your insurance needs will evolve as your organization grows and changes. Annual reviews ensure your coverage keeps pace with new risks, expanded operations, or increased asset values.
Major organizational changes—such as new programs, additional locations, or significant staff increases—may require immediate coverage adjustments.
Building a Sustainable Future Through Risk Management
Insurance represents just one component of comprehensive risk management for nonprofits. Organizations that thrive long-term take proactive steps to protect their missions from unexpected challenges.
Strong risk management includes developing clear policies and procedures, training staff and volunteers on safety practices, maintaining accurate records, and creating emergency response plans. These efforts work together with insurance coverage to provide maximum protection.
Regular board oversight of risk management activities ensures organizational commitment to protecting assets and operations. Board members should understand major risks and the insurance coverage designed to address them.
Consider establishing a risk management committee or designating a staff member to coordinate these efforts. This focused approach helps identify emerging risks and ensures appropriate protective measures are in place.
Documentation plays a crucial role in risk management and insurance claims. Maintain thorough records of incidents, safety training, maintenance activities, and policy compliance. These records can prove invaluable if you ever need to file an insurance claim or defend against a lawsuit.
Your nonprofit’s mission matters too much to leave unprotected. Insurance provides the foundation for sustainable operations, ensuring that unexpected events don’t derail your important work. By understanding the risks you face and securing appropriate coverage, you protect not only your organization but also the communities and causes you serve.
Take action now to evaluate your current insurance coverage and identify any gaps that need attention. Your future beneficiaries depend on your organization’s continued ability to serve—and proper insurance coverage helps guarantee that ability remains intact.
]]>Consider the following tips when looking for the best travel insurance cover:
Price should not be your point of interest
The affordability of the cover is a very important factor to consider, but it should not be your deciding factor. Like any other insurance cover, the most affordable policy is not essentially the best.
As mentioned above, there are many cover under travel insurance. It is important to ensure that the cover you are buying is right for you, regardless of the cost. A cheaper option may not cover all your expenses when you need it the most.
Before you make the decision of buying any cover, go through all the benefits that come with that cover. You should be able to understand what to expect in case anything happens. In addition, ask your provider about the process involved when making a claim and what is the maximum amount that they can pay.
Even after buying the policy, you will be given a certain amount of time to confirm whether the information written therein is what you agreed. If you don’t like what you see, it is advisable that you seek clarification or cancel the cover.
What kind of cover are you looking for?
The second thing to think about when looking for the best travel insurance is the type of cover that you are interested in. Given that there are many policies to choose from, it can be very difficult to make a decision on the cover that is right for you. The following tips might help you to make your decision:
Who is traveling?
Are you traveling alone, or with your family? The following options are preferred for persons traveling with their friends or loved ones:
- Single parent family cover
- Couples travel insurance – This policy is recommended for couples that use one address
- Family holiday insurance – This policy is meant for two people who have at least one child. The maximum number of children accepted is four. It is important to note that the children must not be over 18 years of age, and should be living with you full time.
- Couple and child cover – If you only have one child, then you should think about buying this cover. It’s only meant for two adults and one child.
It is important to note that a family cover may be considered to be invalid when the family members choose to travel independently. It can also be regarded as void if you allow your children to travel with someone else who is not included in the cover. If you are not living in the same house with your children, there is high possibility that they will not be included in your family cover.
Do you travel regularly?
The number of times that you travel abroad is also an important factor to consider when looking for the best travel insurance or vehicle insurance deal. For example, if you travel frequently abroad, there are two major types of policies that you should consider – multi trip insurance cover and the annual holiday travel insurance cover. This covers allow you to travel without even notifying your provider. So, it is wise to consider how frequent you travel abroad before making the decision of buying a policy. Of course, there are better covers for persons who don’t travel frequently.
Shop around
It is actually important to try to find some time to shop around and compare the policies offered by different companies. Like many other insurance covers, the features and the prices of a given policy will not be the same in all the providers. This will give you a good chance of finding the best travel insurance deal with the features and the price that suits you.
However, it is important to remember point number one, price should not be your deciding factor. The most important things to consider are the features and the benefits that come with that cover. Price alone cannot guarantee you that the policy you are about to buy is right for you.
You will have to do your own research, because it is important that you compare as many policies as you can. The good news is, if you find the cover that you were looking for, you will most likely save a lot of money in the long run.
Consider hiring an insurance broker
Let’s be honest, there are people who too busy to a point whereby they can’t find time to shop around and compare quotes from different companies. This doesn’t mean that you can’t find the travel insurance cover that you are looking for. You have the option of hiring a broker who is well versed with different types of policies, including the features and benefits that comes with them.
Brokers actually don’t cost as much as some people are meant to believe. People suffering from various medical conditions are highly advised to work with brokers. This is because insurance brokers have been in the industry for long and knows what types of policies are best for you. An existing medical condition might be a major problem when looking for the best travel insurance deal.
]]>I found a really interesting and rather scary article the other day on Professional Wrestler Ric Flair. Anyone that remotely followed prowrestling will know the name and the legend that surrounds Ric Flair. Flair has been around since the 70s and he still wrestles to this date.
The character of “Ric Flair” is played by Richard Fliehr. The character is sort of difficult to define if you haven’t seen it. In a nutshell, Ric Flair is (in his own words) a:
Stylin’, profilin’, limousine riding, jet flying, kiss-stealing, wheelin’ n’ dealin’ son of a gun!
You can check out the article here: The Wrestler In Real Life. For now let’s get back to the whole point of the article. How did this man go from a highly lucrative career to being in debt and still working into his 60s?
How can you go broke when making millions? How can you be poor when you make more money than most people?
Horrible investment decisions.
This article goes over some of the horrible investment decisions that one can make. Everything is covered from life insurance to opening up a gym without knowing much about the industry. The truth is that often times the best investment is the investment that you don’t make. There’s nothing wrong with storing your fortunes in a high interest savings account.
Getting conned by close friends.
If you want to make a plethora of friends all you need to do is brag about how much money you have. At least that’s what it seems like.
The author of the article describes how Fliehr trusted individuals that he considered to be close friends with his savings. In the end he got screwed over a few times. It’s a shame to read about this because I still want to believe that you can trust your friends.
Unrealistic spending.
The simple formula for success in personal finance has been and always will be: spend less than you earn. There are many more principles that you can add to this. The point being is that if you spend more money than you have coming in, you’ll never be able to save anything.
Fliehr in this case decided that instead of trying to appreciate the money that he had coming in, he would spend way more money. He would buy things that he just couldn’t afford. An ex-wife of Fliehr mentions that on top of being in debt the couple would spend $5,500 per month on clothing and $2,000 on eating out. That’s a lot of cash to be blowing when you owe money.
Poor marriage choices.
Nobody gets married planning to get divorced. It just sort of happens. However, I’m assuming that most people that get into a marriage understanding that they can only be with one person. It seems to me from this article that Fliehr got into every marriage without any intention of being faithful.
I can’t judge his actions. I can comment on the fact that poor marriage choices or getting married when you’re not totally ready can lead to you going broke.
There you have it. A clear cut way to go broke after making millions of dollars in your life. I don’t mean to be completely facetious. I just wanted to share the interesting (and sad) points that I picked up from this piece.
On a more serious note, articles like this really make me sad. I don’t mean to pick on Fliehr because there are many horror stories about athletes that retire poor. This article just really hit home for me because I’ve always been a fan of his work.
Ask the readers: what do you think of these horror stories about celebrities that make a fortune and retire poor? What would you do in this situation?
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A lot has changed during the years. Millions of those who were earning passive income online through non-legit methods have gone out of business.
Here are some of the things that have changed when it comes to making
money online:
1. Search engine algorithms
Google released Panda and Penguin updates to find out low quality sites and penalize them. Low quality sites were those who were ranking based on unethical link-building practices, low-quality content in high volume and other similar techniques.
A lot of sites were penalized, and some were even removed completely from search engines. However, sites that were creating quality content and were authoritative based on mentions on the web and social media moved higher in the index.
What to do today: If you’re looking to make money online through a website. Make sure to create quality content and get links from reputable sources. For example, if you’re in the energy niche, you can create authoritative, informative and in-depth pieces on different topics.
You’ll find several different websites that offer quality information on topics like commerce energy. You can click here to access the information, and due to the availability of mobile browsers, you can also browse information for content ideas through your mobile.
2. Affiliate marketing
Affiliate marketing is another popular way of making online. What people used to do is create short 50-100 pieces of content and place 3-5 affiliate links in those pieces. This doesn’t work anymore, as search engines now have strict guidelines when it comes to affiliate links.
Several affiliate marketers were penalized for placing affiliate links while offering no value in terms of content. On the other hand, those who adapted managed to survive and they still continue to make good figures without making a lot of effort.
What to do today: If you’re planning to make money online through affiliate marketing, you’ll need to be careful. You also need to focus on the content you create. Search engines would be fine if you place 1 or 2 links in a 500 word article.
You also need to stay relevant to your niche. Don’t try to place links redirecting to an iPhone page if your website is about fashion. Staying relevant with affiliate links and creative quality, in-depth content is the way to go.
3. Social media
There were times when those trying to earn through social media would add millions of fans and followers through automated softwares and charge a good amount of money for their services. It’s still happening at the moment, but this form of earning has seen a decline.
Businesses and individuals demanding social media following are now more ‘aware’. They need real people on their accounts rather than thousands of inactive profiles.
What to do today: If you’re going to start social media marketing, make sure to only go for real, active social media followers on your client pages.
You can do this through networking on social media, leaving comments and following others. You can also invest some percentage of the client’s fee in official advertisement like Facebook ads or sponsored
Before you make any decisions. Before you jump into buying your first rental property. Before you invest your hard earned money and precious time, you need to be aware of all of the costs that are involved with being a landlord.
This post is broken down into 3 distinct sections: the money you need to spend before you get a tenant in your rental property, the costs of having a tenant in your unit, and the fees when your tenant leaves the unit.
You need to buy the property.
Before you can rent out your rental property, you need to find it first. This means that you’re going to have to put down tens of thousands of dollars for the down payment that you need to obtain this place. This also means that you’re going to have to tie up a significant piece of your capital into this venture. This in turn leads to an opportunity cost. The opportunity cost means that you might miss out on other investment opportunities with so much of your capital tied up in your rental place.
Looking for the property.
There will be a time and money investment when it comes to looking for the property. You might not find the right property for a while. This will take up time and energy. You’ll spend many hours on reviewing different locations and communications. The amount of cost involved here all depends on how you value your time.
Real estate agent fees.
If you’re working with a real estate agent you’re going to have to pay your fees. The fees here vary on the agent and the price that you guys agree on in advance.
Lawyer fees.
You need a lawyer to go through the real estate contract and for the closing. This will easily cost you about a thousand dollars. You usually don’t pay this money up until the closing date/when you get your keys.
Property closing.
You’re going to have to pay the typical property closing fees with your rental place. This is usually set at a percentage rate depending on the city that you live in and the typical closing costs. Lots of new home owners totally forget to factor this cost in.
Maintenance work.
Unfortunately, a home doesn’t always come ready to live in. The property might need to be upgraded right at the beginning or over time as tenants take their toll on the place. I bought a brand new condo and many changes had to be made. The reality is that there will always be maintenance work that you need to do on a property. If you want to rent out a basement apartment or several units, you’re going to have to make some modifications to the property to ensure that it’s up to code and has enough exits.
The home that my friend lives in his college town has a fire exit. Due to the amount of tenants living in the home, the landlord had to install and extra fire exit from the basement.
Searching for a tenant.
You need to find a tenant. Depending on the location of your property and the market, the time it takes to find a tenant will vary. I put up an ad for my condo the other day and I received three tenant inquires by the time I woke up. I was fortunate enough to come to terms with the first potential tenant that came by to check out my place. It doesn’t always work out like this. This leads into my next point…
Down time.
What will you do if you can’t find a tenant for your rental property right away? You’re going to obviously be on the hook for all of the costs. For how long can you afford to pay for all of the bills? How long of a down time before you start deeply cutting into your savings
Alright so now you have a tenant and you’re ready to start collecting your monthly passive income. What costs are involved when you’re actually renting the property out and have a steady tenant?
Mortgage payments.
Your mortgage payments will usually be your greatest expense for your rental property. This can easily cost you about $1000 per month, until you finally pay your mortgage off. The greatest chunk of rent usually covers the mortgage expenses.
Property taxes.
You need to factor in your annual property taxes into the monthly rent that you’ll be charging. Property taxes vary depending on which area of the world that you live in. Property taxes are usually 1% or so of the value of your property.
Maintenance fees.
These can completely destroy your profits. The maintenance fees at my condo are at $215 per month and this doesn’t come with any special amenities. It’s unbelievable how high these fees can be in some new condo developments. These will easily chew into your profits. The worst part is that the condo fees can increase every year.
Property damage.
If anything breaks around the house on its own, it’s usually on you to take care of the repairs. Most tenants won’t repair something that they didn’t break. The costs here can range from zero to thousands of dollars depending on what breaks.
Now you have your property and you’re making money. What if the tenant decides to not re-sign or to run out on their lease? What new costs will you be facing?
Finding a new tenant.
Now you’re going to have to go through the whole process again of finding a new tenant. If you’re working with a property management firm, you might not incur any further expenses because your monthly fees should cover you. If you’re doing everything on your own, then you’re going to have to invest your time once again by trying to find a new tenant.
Fixing up the unit.
Depending on the tenant, you might have to fix up the unit a little bit. This could be something as simple as a paint job or re-modeling the washroom. There will be costs involved in fixing the place up.
Down time.
Down time once again becomes a cost with your rental place. The truth is that down time can cost you much more than you could ever anticipate. This might also lead to desperation. When you get desperate you’re not thinking straight. You might take an unqualified tenant or try to sell your unit. Please always keep down time in mind.
We’ve gone over every single cost when it comes to managing a rental property. Now we can finally answer the fundamental question here– can you still make money with being a landlord at the end of the day?
Yes you can. If the price of monthly rent that the tenant pays you covers all of the costs involved. It’s really that simple.
If you’re any kind of entrepreneur in the slightest you’ll eventually reach the point where you realize that you need to invest some capital into your business in order for it to grow. This investment can be something as simple as hiring much needed consulting services or as complex as trying to find a new office in town. Regardless of the situation, it’s never an easy decision to use debt to grow your business.
With that being said, let’s start the discussion surrounding the fear of using debt to grow your new business…
What are the other options for growing your business?
Is there any other way you can acquire this capital? There are times where all you really need to bring your business to the next level is more time/organic growth. Then there will be situations where you need to invest more man hours. And yes there will also be points where you need to invest money. I like to consider the option of more time and effort before I put money into something.
What’s the worst case scenario?
I always like to think about the worst case scenario when I feel stressed out about something. When it comes to borrowing money to grow you business this can be a bit scarier. The fear of losing your business completely or putting yourself into massive debt for your business can keep you up at night stressing. The thing is that stressing out won’t get you any where. You need to make a decision with all of the facts in mind. Going into debt sucks and so does putting your business entity out of commission. You must consider these thoughts, but you can’t let them consume you.
What’s the best case scenario?
We know that using debt to grow your business can ultimately put you into debt. What about the reverse? What if your decision to grow your business turns out to be a positive one? Your business can hit an all time record in profit and you could eventually quit your full-time job. I personally like to compare the best case to the worst case when it comes to investment decisions. Does the best case scenario far outweigh your fears?
How badly do you want to grow your business?
At the end of the day you must think about how badly you want to grow your business. Is it a side-business? Is this something you want to turn into a career down the road? When I first started blogging I really started to become addicted to it. I wanted to grow my blog so badly that I would do anything. I paid for blog consulting services and I took advice from anyone that was willing to share any tips with me. It all really depends on how badly you want to grow your side business. Some people either hate their current job so much or are so passionate about their business that they will do anything to make it grow. How bad do you want it?
]]>Sadly there’s a dark side to winning the lottery. I wrote about lottery winners that went broke in the past. The problem is that you go from poor to rich in such a short period of time. You get rich without putting in the effort or determination. You essentially skip the fun part. You miss the chase of money. You just instantly come into millions of dollars.
Would I still work if I won the lottery? Absolutely. I can’t imagine not working.
I would work on meaningful projects. I would find clever ways to invest some of my new fortune. I would attempt to give back to the community. I would create jobs. I would obviously party in a more extravagant manner. I wouldn’t just sit around though. I would definitely continue working.
]]>One of my friends is a private guitar instructor. He has been playing the guitar for over a decade. He also studied classical guitar in college. Recently he has been on the pursuit for finding paying clients. The other day as we were talking I asked about how he finds paying clients. My friend shared three quick ways to find paying clients:
Online ads.
The power of the internet and social media is phenomenal. There are many ways you can advertise online. One of the newest methods is using Facebook to reach your target demographics. Another common strategy is Kijiji or any other online trading site like that. These simple online ads can go along way towards helping you find future clients. The most obvious benefit to using the internet to promote your services is that literally everyone is online these days. What are you waiting for?
Word of mouth.
If you do good things people will find out. This tiny blog received a mention from The Simple Dollar a few weeks ago. I find that we often underestimate the true worth of word of mouth. You never know who will be listening in and who’s paying attention to you. Word of mouth has done wonders for me with my blogging because usually all it takes is a little luck to get picked up by one of the big guys. The best way to take advantage of word of mouth is to always over-deliver on expectations. This way people can’t help but spread the word about you.
Community places.
Common community hang outs can really help you with reaching a more targeted audience. When I wanted to improve my golf game, I checked the board at the local golf club to see what the offers were like for private lessons. Advertising your services at the local community centre can help you land some local clients depending on your business offering
Whether you work full time, attend school full time, or run a family, you only have a minor fraction of your day to devote to your secondary income source. This time usually cuts into your sleep or time spent with loved ones. Therefore, a lot of though goes into which source of passive income we will decide to follow.
The Paradox of Choice- Why More is Less is an excellent book written by Barry Schwartz. I was going to do a full blown book review but I opted to try something else. I wanted to apply a few of the main concepts/theories to passive income and the decision making process involved.
New choices all of the time
Every time you go online you read about new ways of earning an income. You read about all of the different ways that internet entrepreneurs are making money (and lots of it!). You learn about emerging real estate markets. You learn about hot new stocks on the rise. There is a great wealth of information available on the internet that gives us about a million different passive income options.
Every day we are bombarded with more potential income earning sources. We have a difficult time establishing which income sources are truly important and which are merely interesting. Most of these new sources simply lead to information overload. Information overloads leads to us not making any decisions at all.
Missed opportunities for passive income
By running a blog you take time away from another passive income stream. Instead of writing for your blog you could be running an eBay store or managing real estate properties. Instead of investing massive amounts of money in real estate and closely watching the property, you could be focusing that energy towards writing an eBook on a profitable niche.
While trying to earn an income from blogging, I have seen many internet entrepreneurs start successful websites where they sell a service. Pat from Smart Passive Income wrote a few eBooks and did a few audio recordings that have been extremely profitable for him. These are all missed opportunities for the rest of us that are trying to earn an income through other sources.
Choice and Happiness
Do you want the stress that comes with investing a large amount of your savings into a passive income stream?
Are you willing to spend over 8 hours a day monitoring your blog?
Will you be happy with an income that fluctuates on a monthly or even weekly basis?
These are all choices and decisions that we make regarding our passive income that will ultimately affect our happiness.
]]>Before I go off on a tangent, I really wanted to look at the idea of why everyone wants to buy a home instead of renting for the first few years.
Buying a home feels like the next logical move.
Buying your first home is a big move financially and emotionally. Yet for some reason, buying property is a move that we do without much thought at all. We just assume that we need to buy a place. We finish college, find a job, and then want to buy a place. It just feels right to buy a home in your 20s.
Renting is viewed as a waste of money.
I’m not sure why so many of us consider renting to be a waste of money. You’re paying for a roof over your head. Yet whenever I speak to a friend, they claim that they don’t want to rent because they don’t want to waste money. Little do these people realize that home ownership can at times be the biggest waste of money. Think of property taxes, maintenance fees, sometime breaks around the house, or mowing the lawn. There are also those home repairs that need to be made by contractors such as Allstate Roofing, that people overlook before buying a home.With renting you do not need to worry about taking care of those fixes.
Buying a home is seen as passive income.
When it comes to passive income, many of us feel that buying a home is a great strategy for generating extra money without much effort. This couldn’t be further from the truth. Do you know how much work goes into buying a home? A ton.
The only time that buying a home can be passive income is when you become a landlord. Even at this point you’re still going to have plenty of work. You could hire a property management firm or you could do everything on your own. Either way, it’s not going to be easy.
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