Passive income is the name of the game when looking for ways to supplement your savings during retirement. One effective way you can do this is by starting a business. Keep in mind that you’re not looking to run a multi-million-dollar corporation or an international conglomerate. Instead, you can run a business from the comfort of your home to provide a simple product or service that people need.
That being said, you’re going to need some startup capital. As a recent retiree or a future retiree, you’re not going to want to dump a bunch of your savings into starting up a business. Instead, you can find other ways to either start-up on a budget or pull money from other places. Read this guide for a few tips that we have for you.
Take Out a Reverse Mortgage
If you have a business idea that you want to execute but requires some capital to get started, you can leave your retirement fund alone and get a reverse mortgage. This includes buying a startup inventory, buying proof or test products, or even paying the initial costs of hosting a website.
You can tap into the equity in your home and get a solid amount of startup money. Of course, you don’t have to use the entirety of the loan for your business. You can always tuck away what you don’t use so you have a little bit of extra padding in your retirement fund. If you’re not familiar with the requirements and process, you can learn how a reverse mortgage works by getting information directly from brokers and lenders.
Sell Drop Shipped Goods
A method of starting a business that’s growing in popularity is selling drop shipped goods. This is a low-cost method of running a business because you don’t have to have any on-hand inventory or pay for warehousing. Instead, products are shipped directly from the production source. This means that you can sell items like t-shirts, pillows, pens, and even cell phone cases without keeping any of them at your home, which will cut down on your startup and operating costs by a large margin.
One drawback of using drop-ship services is that you’ll likely have to pay a retainer fee or give a percentage of each sale to take advantage of these services, but it’s not typically enough to cut deep into your profits if you’re regularly making sales. You can markup the cost per item as you see fit to offset the necessary fees attached to using the drop-ship service.
Work as a Freelancer
If you work or used to work in an industry that hires freelancers, take advantage of the flexibility of freelance work during retirement. Those who work as freelancers can speak to the freedom that comes with the scheduling as you’re not often beholden to a strict schedule or deadlines with a quick turnaround. In fact, some companies will give you the freedom to accept or reject work at your leisure. This allows you to bring in some money when you would like, often at the pace that you prefer, without the commitment of a full-time job.
Something to keep in mind if you’re doing freelance work is that you shouldn’t rely on a single source of work as your primary income. If you’re looking to supplement your regular income, one source should be fine. However, if you’d like to have regular supplemental income, it’s recommended that you work with several companies so that if the well dries up with one, you have another source to work with later.
Be a Consultant
After a full and complete career, you’re going to have some expert advice that you can share with others in your same industry. Work as a consultant to help entrepreneurs, security companies, digital marketing and SEO, or those seeking financial advice. You likely have a wealth of knowledge that can go a long way to helping someone be successful in their business or life in general.
If you’ve built a reputation in your industry, you can use your name as a way to hire out work to subcontractors. Many subcontractors are starting up and haven’t built their reputation in the industry. You can get hired for construction, design, or other jobs using your industry expertise, then hire out a subcontractor to complete the heavy lifting and work for you. Yes, you’ll have to account for paying the subcontractor, but the person hiring you for the job is paying for your vision and not necessarily your work.
As you’re probably aware, it’s important to vet subcontractors before hiring them so you can be confident in their ability to carry out the work that you’ve presented to the client. This is a great way to stay busy but allow yourself plenty of time to pursue your passions during retirement.