There is absolutely no job security in Corporate America. Each of us needs to take our career and personal finance in our own hands. That means you should work hard to create multiple source of income, preferably including some sources of passive income.

If you’re expert at something and you like to write, writing and selling a book could be a very lucrative business. Actually, you don’t even need to be a good writer. You can always hire a free lancer writer to write for you.

Some of you might say: “I have never bought an eBook! It’s not going to sell!”

Let me tell you: A LOT OF MONEY can be made from selling eBook.

Mike Geary wrote the Truth About Six Pack Abs eBook. 

The selling price for Truth About Six Pack Abs is $39.95. Mike Geary had sold close to 500,000 copies. He paid 70% commission to affiliates who promotes his eBook.

He has generated substantial 7-figure income for himself. Even some of the Click Bank Affiliates who promote his book made more than one million dollars in commission.

If you’re interested in creating multiple income streams instead of being chained to your corporate job, I encourage you to look into eBook publishing to share your expertise while generating additional income. And everyone is expert at something.

To get started, do an in-depth study of Truth About Six Pack Abs. Why is it successful? How did the author promote the book? What is special about the ad copy? How did the author distinguish his product from competitors’ etc. Then get started immediately. You won’t reach your goal unless you start working hard toward your goal now.

One friend hasn’t gotten any pay raise for three years. He works for a Fortune 500 company and he had no performance issues.

Most people I knew got 2-5%  annual pay increase in the past couple of years.

Even if you switch jobs, the pay raise is no longer the 10-25% you can normally expect.

My suggestion to you: do NOT bet on salary increase by your employer. It really does not matter. Let’s say you get a 5% increase. How much more money will you get per year? Per month? It’s a pretty small amount.

You need to figure out a way to generate side income — you can give yourselves a much bigger raise, and you’ll diversify your income, which will make you more layoff proof.

I believe everyone should be working on side projects.

Let me tell you: the income I generated from this blog in the past year is more than the raise I got from my previous employer. Plus, this blog itself worth something — if I sell this blog, I can also make some money back. This is the difference between creating asset vs. working for someone.

There are many ways for you to take on side projects to generate second, third, or even fourth stream of income:

• Take on consulting projects in your area of expertise. Nowadays a lot of startups are taking a "lean and mean" approach in building their business. If you have the right skills and experience, they’re willing to pay you for part-time consulting work.
• Teach one or several classes online. There are people who teach several classes online, and make 6-figure annual income. The trick is to teach the same class at several online universities so that you can reuse your course materials, and make yourself more scalable.  If you’re interested in teaching online, you should read Make Money Teaching Online: How to Land Your First Academic Job, Build Credibility, and Earn a Six-Figure Salary
• Start an affiliate marketing business. I worked for one of the largest Affiliate programs in the world, and got to know a few super affiliates. Let me tell you: there are serious money to be made in the affiliate space.  To get started, you might want to check out Super Affiliate Handbook.
• Purchase a franchise. This will cost some money, and you need help from family and friends to help since you still have a full-time job. But, I’ve known people who successfully did this — they held their full time job, and own retail stores through franchise. This could be a cash cow if you pick the right franchise. 
• Become a tutor to help people prepare for SAT/GRE/GMAT/LSAT/other exams. 
• Become a part time MBA admission consultant. A well-known business school admission consultant charges as high as $3,000+ for one school’s application. 
• Start an online retail business on eBay and/or amazon.com Marketplace.
• Write and sell eBooks. If you can pick the right niche and you can provide content that readers cannot find else where, you can make serious money from selling eBooks.
• …
  Take actions now and give yourself a big raise this year.

Uncle John is a long-time family friend. On New Year eve, Uncle John’s family came to our folks’ house for dinner.

As we were finishing eating our dinner, Uncle John started chatting to me. He hadn’t seen me for a while since I’ve been living in Seattle. We had a lot to catch up.

Uncle John retired a year ago at the age of 62. He had worked for the United States Postal Service for almost two decades. He told me that although he was eligible for receiving social security checks, he decided not to take it now because there was a penalty for people to take out social security before reaching age of 65.

He has a very active life style after he retired. He takes two international trips a year. He has taken several cruise vacations. He also does a lot of traveling locally. He is taking classes at the local community college. Let’s put this way: he has a great retirement life. He looks great.

His wife is still working because she loves her work, but her job is not very well paid, neither. So, I raised the question to Uncle John: "Now, you retired, but you told me that you’re not taking any social security benefit. How do you support yourself with your reduced household income?"

Uncle smiled. And he told me his story. I’ve known him for many years. But, this was the first time I got a chance to hear his wisdom with respect to personal finance. I felt that I was getting my "rich dad, poor dad" moment.

Uncle John immigrated to the United States when he was in his late 30s. Coming from a very humble background, he had only three years of formal education. A voracious reader, he learned pretty much everything on his own.

When he moved the United States, he had a wife and an infant to support. He spoke no English. It was incredibly difficult. The only job he could get was in the construction industry, working for a subcontractor to build houses. The work was low-pay, physically demanding, and dangerous.

He persevered. He took night classes to learn English while he worked full-time. He started to pick up new skills at work. Once his English got better, he quitted his job and joined another subcontractor with better pay.

He told me that he was paying rent at the time, and he hated to pay rent. He felt that the rent money he paid was gone forever. He couldn’t get a penny back. He was determined to buy a house.

He was very frugal. Three years after he came to the United States, he bought his first house. It was a very small house in a good neighborhood. It was the mid 1980′s. The housing price in the bay area was still relatively reasonable. But, still, the mortgage payment was a stretch for Uncle John. He told me that he felt he was still fairly young at the time, so he was willing to take the risk. He made sure that he would have enough saving for 3-month of mortgage payment in case he lost his job.

Uncle was also worried that as he grew older, he wouldn’t be able to continue to do the physical work. He wanted to make every single dollar he had to work for him.

Two years after he bought his first house, he bought his second house. He used his first house as collateral, borrowed money to make down payment on his second house. Again, it’s a small, two-bed room house in a good neighborhood. Before he bought his second house, he researched the local rental market. He figured that if he rented the house out, the rental would cover most of the monthly mortgage payment.

Soon after he bought his second house, Uncle John had a freaky accident. He fell while he was working on the roof at a construction site, and broke several bones. He eventually recovered, but he couldn’t continue to work in construction.

He was in his 40′s. He enrolled in a community college course, he studied books, and he passed the postal worker exam. An entry-level postal worker job wasn’t paid well, but it provided stability to Uncle John.

The accident didn’t slow Uncle John down. Once he got the postal worker job, he started to scouting for houses again. With the same strategy, he bought 3 more houses over the next 8 years. Initially, rental payments covered most of the mortgage payments. After a few years, as the rent went up, he started to make a small profit from rentals.

As he approached his retirement age, he lived in one house, and received positive cash flow from four rental properties.

Uncle John told me that assuming he can live another 20 to 30 years, he plans to sell one house every few years, which would net him a good chunk of money to support his retirement. He would be able to live comfortably with or without social security.

Finally, he said to me: let me give you some advice, young man.

• You’re young. You must plan ahead for retirement.
• If you know how to play the stock market, go for it. But, in my case, I feel real estate is more real. It’s hard asset. Over a long time, it’ll appreciate.
• You need to make money work for you. If I have your salary, I’ll definitely own more than one house. 
• You need to have regular, passive income to have a good retirement. Social security only pays you $2000. It probably will not even be there when you retire. 

I want to share with you a few of my own thoughts after I talked to Uncle John.

I totally agree with Uncle John’s point of making money work for you. It’s important to generate passive income.

However, I do think there is a luck factor in Uncle John’s success. When he purchased his first two houses, the gap between monthly mortgage payment and monthly rent in the bay area housing market was small. Therefore, he was able to cover his mortgage by collecting rent payments.

It is much harder to do that today in the bay area. Houses are  so expensive that there is no way to cover the mortgage by collecting rents.

I raised the question to Uncle John. He said that it’s true that the housing price is getting too high in the bay area. But, he would buy houses in cheaper areas in California such as Tracy, Sacramento, etc. Disclaimer: I don’t have specific knowledge about the real estate markets in areas such as Tracy, Sacramento, etc. So, please don’t take this example literally.

But, I believe the lessons still hold: make money work for you, generate passive income stream, invest wisely.

Related Posts:

• Who are making a lot of money from the economic downturn and where do they get their financial news and analysis?
• How much should I deduct for 401K, HSA, and FSA during recession?
• A great investment book that teaches you how to think
• Should parents pay for the full amount of their kids’ college education expenses?

Excellent Resources:

• Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom
• Secrets To Creating Passive Income and becoming financially free – even in a slow economy
• Make a Fortune Promoting Other People’s Stuff Online: How Affiliate Marketing Can Make You Rich
• How I Made My First Million on the Internet and How You Can Too!: The Complete Insider’s Guide to Making Millions with Your Internet Business

I was wrong.

Ramit wrote in such an engaging style that I kept reading his blog although I was skeptical. Interesting enough, Ramit didn’t have any ads on his blog for the first few years. No Google Ad Sense, no display ads. Post after post, he kept publishing insightful and engaging articles on personal finance. He focused on contributing, instead of getting things back.

Within a very short period of time, Ramit’s blog has grown into one of the most popular personal blogs on the internet. Ramit has also co-founded a venture-back start-up while continuing building his personal finance brand.

This past Monday, Ramit’s new book I Will Teach You To Be Richwas released. It was the #1 selling book on Amazon.com on Monday! It ranked #20 now (5:45PM, Wed, March 25, 2009).

Wow! That’s impressive!

Ramit made a few chapters available for bloggers to review. I finished reading the sample chapters in one setting. It’s excellent. There are a lot of personal finance books out there and it’s very difficult for a new author to break out. But, Ramit’s book is different.

It kicks you, motivates you, and inspires you to take actions NOW to get your finance in order. Ramit writes in such an engaging and convincing style that you’ll be inspired to take actions immediately.

Its content is highly relevant that reflects the challenges we’re all facing in the current financial crisis.

It focuses on sound, essential personal finance principles. No gimmick. Just solid, insightful, and battle tested advice.

I highly recommend I Will Teach You To Be Rich to anyone who wants to be rich.

"I’ve had about 150k visitors per month for several years now. My audience is stable but flat. I get about 100k visitors per month on my website and another 50k via my feed. At best, this blog brings in about $30k per year, all of which I give to charity.

And I use two of the better monetization services out there for bloggers, Federated Media and FeedBurner.

I don’t doubt that there are bloggers with similar sized audiences who do make $75k per year because they work it a lot harder than I do, but I also think that Technorati’s survey results are wrong."

I don’t think Fred is doing anything wrong, but he is not doing enough to monetize his blog traffic. Without working a lot harder, Fred should still be able to generate much more than the $30K he is making now.

Let’s use www.JohnChow.com as an example for comparison. According to Johnchow.com income report for March 2008 , it had 183,633 unique visitors, 26,000 RSS Subscriptions, and 323,435 page views in March, 2008. Its revenue was $32,529.40 for March 2008. The following table compares Johnchow.com and Fred’s blog based on limited data available from the two blogs.

Johnchow.com’s number of monthly unique users is 1.8 times of Fred’s. But, Johnchow.com’s monthly ad revenue/unique user is 7 times of Fred’s!

I think that several factors contribute to the difference:

1. Mind set of the bloggers: Fred writes a blog to share his thoughts, promote his portfolio companies, and look for deal opportunities. His mind set is the more "classic blogger" mind set — I.e. write and share. However, John Chow has openly commented on this blog that he is an Internet Marketers, and blog just happens to be one of his monetization mediums. I’d call John Chow has a "Internet Marketer Mind Set". I think the mind set of the Blogger makes a huge difference on how the blog is designed, promoted, and monetized. "Classic Blogger" is like movie producer, while Internet Marketer is like infomercial producer.

2. Diversification of blog income streams: Fred mostly uses Federated Media and Feedburner to monetize his content. Johnchow.com’s income consists of private ad sales, affiliate commission, ReviewMe, Text Link Ads, Kontera, TTZ Media, Feedburner, and Subscription. Johnchow mentioned in his blog that if he only used Ad Sense, his revenue would be about $1,000 per month. I think if Fred adds a few other income streams, his blog’s annual stream could easily go pass $75,000.

3. Is Federated Media really one of the "better monetization" services in the market? I’m not so sure. From what I have heard, Federated Media probably offers 60% rev share deals to authors (I.e. for every ad dollar Federated Media receives, author gets 60 cents.) I don’t know what rev share % Fred gets. But, I do know that a good number of ad networks offers rev share at 60-80%. I think there is an opportunity for Fred to get higher rev share arrangement from ad networks.

4. The importance of private ad sales: Private ad sales accounts for almost 50% of Johnchow.com’s revenue. Several top-earning bloggers have talked about the importance of private ad sales, including flat-rate deals as opposed to CPM deals. Given Fred’s reputation and blog traffic, I think he can easily sell out his private ad placements.

In summary, I think Fred could increase his blog income stream significantly. How much effort will it take? I think it’ll take reasonable amount of effort, but I wouldn’t call it "lots of hard work". Will it worth it? I’m not sure since Fred is not using his blog to make a living. He is foremost a venture capitalist, not an Internet Marketer per se.