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How I Made Money Online In September 2017


Some (but not even the majority at this point) of my income is affiliate income that I earn when people sign up for programs that I promote on this site. I appreciate any help that my readers choose to give me. We’re now well into October. The leaves are starting to fall from the trees in my part of the country. This is pretty depressing, but Christmas is coming pretty quickly. One of the greatest gifts I could give myself for Christmas is less debt.

I’ve been working online to earn more money. This money that I’m earning has a goal. I’m attempting to accelerate debt payments while also investing a few bucks toward passive income that can grow over time.

I put in some effort during September toward these goals, much as I have in just about every month since I started learning about earning money online back in 2010. I again worked on some GPT websites while also doing some freelance writing.

How I Made Money Online In September 2017

Here are some of the ways that I earned money in September:

Freelance Writing: $236.69
Swagbucks: $100.00
GiftHulk: $5.00
Earnably: $2.00
Ibotta: $20.00

Total Online Earnings for September 2017: $363.69

This was a bit less than the $401.66 that I earned online in August, but it is still a nice chunk of change. You could start earning more money as well. I made money online by taking some of the time that I’d otherwise have been wasting while watching TV.

I keep up with my online earnings for a couple of reasons. First and foremost, it allows me to maintain a nice level of motivation. If I see that I’ve made money online, it encourages me to make more money online.

Online income can help you fill up a suitcase full of money
I’m trying to build up to where I have a suitcase of money each month–preferably in hundreds.

 

The second reason that I’m sharing some of the ways that I’ve earned money online is to encourage others to start taking more control of their finances by picking up some low-hanging fruit that can allow them the earn some money while watching TV (or even sleeping in the case of Earnably).  The way I learned how to make money online was from reading blogs such as this one.

Can You Make Money Online?

Absolutely. Your ability to earn money online is limited by the time that you have available each week and the imagination that you might have to market some opportunities to others. Setting up your own blog can be a great way to share these opportunities that can help people out.

WordPress recommends BlueHost, which is one of the top options for self-hosted bloggers. You can sign up for BlueHost by clicking the banner below if you’re interested in getting a self-hosted blog:

Remember, I started out making absolutely nothing online. I’ve now built up to where I’m making nearly $5,000 a year in my spare time. This can grow over time.

Reviews Of Money-Making Sites

Here are a couple of reviews that might help you decide which sites might work for you:

Earn Cash and Rewards with Swagbucks
Swagbucks is my favorite site to use to earn money. If nothing else, you can make money from searching the web.

Earning Money In Pajamas With GiftHulk

My Ibotta App Review
I use this when I go shopping. You can earn $10 for signing up with my link and getting your first rebate within a week. With cashouts starting at $20, you’d be more than halfway to redeeming for some PayPal cash!

How did you earn extra money online during September? Do you have any other options that worked? Let me know in the comments. I’d love to check them out!

Keep Up With My Progress

If you’d like to follow my progress each month, be sure to go to the top of the page and sign up for updates. You can also follow me on Twitter.  

Also, if you could share this latest update below via Twitter, Facebook, or any other social media platform, it would be much appreciated. I want to inspire others to improve their finances and show them some easy ways that they can do so. Just click on the “Share This” link at the bottom of this post!

Disclaimer: This site has affiliate links. If you decide to sign up with one of these affiliate links, I may be compensated. I appreciate any support you might provide.

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Passive Dividend Income–September 2017

Earnably
This site includes affiliate links. Please note that I may be compensated should you sign up for these programs. Here I sit on the evening of October 1. Yet another month has come and gone. September is now in the books. As the Steve Miller Band once sang, “Time keeps on slippin’, slippin’, slippin’ into the future.” This means that it’s time to add up my passive dividend income for the month.

September was the third month of the quarter, and that’s usually a good thing for dividend income investors. More companies pay out the final month of the quarter than they do in other quarters.

I’m building up a stable of quality companies and funds that pay out dividends to their shareholders. It’s like I get paid for doing no work. Of course, I had to work to earn to capital to invest, but after I use that capital to buy shares, I have to do nothing else. This is a cool concept, to say the least.

Building passive dividend income, slowly, but surely!

I look to buy companies that have the ability to grow dividends over time, and this should provide me with a growing stream of passive income. As I note pretty much every month, passive income is the best income! The only bad thing about passive income is when you don’t have enough of it to pay your bills each month.

I own companies that make money every single day. They bring in big profits, and they pass on some of those profits to me. What’s not to love about this setup? Hopefully, I’ll have enough passive income to take care of my standard of living at some point in the future. Right now, the buildup is slow and sure. Without further ado:

Passive Dividend Income For September 2017

Here are the companies and funds that paid me in September:

The Kroger Co. (KR)                                                                                        $6.25
Southern Co. (SO)                                                                                          $17.40
Johnson & Johnson (JNJ)                                                                              $8.40
Realty Income Corp. (O)                                                                                $5.29
Vanguard Total Stock Market Index ETF (VTI)                                   $2.77

Total Dividend Income from IRA                                                             $40.11

JP Morgan Equity Income R5 (OIERX)                                                   $1.88
Cohen and Steers Realty Shares (CSRSX)                                            $7.58

Total Dividend Income from 401k                                                            $9.46

Total Passive Dividend Income for September 2017            $49.57

This was nowhere near a record, and it did not even meet last month’s total dividend income. Still yet, it was nearly $50 that I did not have to work for. I just learned that Realty Income announced a raise. This raise will only add $0.15 to my passive dividend income over the next year. However, this company tends to increase the dividend about every quarter, which will allow my earnings to compound more quickly.

Passive Dividend Income Comparison

If I look at my passive dividend income from the same month last quarter, it becomes apparent that my September income was lower than June’s. While this is not a great development, it’s largely tied to the REIT fund that I own. This fund pays more in dividends in June and December than in March and September.

Now for the better news. By comparing my year-over-year results, I had a pretty large gain this year. Last September, my dividend income was only $18.87. This number grew to the $49.57 listed above, which was an increase of a little more than $30 in a year.

The passive dividend income that my companies paid me in September now brings my dividend income for 2017 up to $336.74, which is already nearly $100 more than I earned in all of 2016. And I still have three months to build on this total. This is where dividend growth gets even more exciting.

The dividends that my holdings send my way, at least in my IRA, get reinvested in stocks that will also pay dividends. This compounding action should lead to a virtuous cycle of growing dividend income over time. Hopefully, within just a few short years, I’ll be able to talk about passive income in the thousands, rather than the hundreds.

How was your dividend income during September? Did it grow year over year? Let me know in the comments.

If you’d like to keep up with my progress, be sure to sign up for updates in the email signup box near the top of the page or via the popup that asks you to sign up. You can also follow me on Twitter.

Disclaimer: I am not a professional financial advisor. I intend this information for informational and educational purposes only. Perform due diligence before investing in any equities. See my disclosures page for more information. I’m long O, SO, KR, JNJ, VTI,  CSRSX, and OIERX.

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When Side Hustling, Persistence Pays Off

Few people need a reminder that the corporate world is fairly unstable. 50 years ago, people could get a good job with a good company and retire with a pension. Today, this loyalty is a thing of the past. Pensions are going the way of the mastadon and the woolly mammoth. This is why many workers today have started side hustling.

What Is Side Hustling?

Side hustling is a marathon, not a sprint.

 

Simply put, side hustling is the act of trying to make money outside of a “normal” 9-to-5 job. Not only is the job market unstable with people averaging about 12 jobs over their lives, wages have stagnated when figuring inflation into the equation.

Only recently did the per capita household income exceed the purchasing power that families had in 1999. Between 1999 and 2012, households lost about $5,000 in purchasing power.

 

With jobs paying less and layoffs and downsizing distinct possibilities, it’s a good idea to have a side hustle to bring in extra money. This extra money could help a family pay bills, pay down debt, or save for the future. A side hustle might not need to bring in thousands each month to make a sizable difference in your family’s budget.

Even an extra $50 or $100 can start to make a difference. If you’re able to pay all of your bills and make minimum payments on your debt, that $100 could help you build up an emergency fund of $500 or $1,000 that could help you avoid going into debt to pay for an emergency.

When my first kid came along, I was bringing in less than $30,000 a year. I needed a side hustle, and I’ve been trying to make money online ever since. I’m working on paying down the last few thousand from my graduate school and trying to invest at the same time. I’d be unable to do so without bringing in some side hustle income.

What Types of Side Hustling Are Feasible?

There are lots of ways that you can make money from side hustling. I noted several of these on this list post about ways teens can make money in the summer.

Getting a second job is possible for many people. This might involve flipping a few burgers, stocking a few shelves, or delivering a few pizzas. You might feel like this work is beneath you. It’s not. If you’re in debt or you have no retirement savings, just a few thousand extra bucks each year can be a big help.

It’s also possible to create a second (or third, or fourth) job. For example, I’ve noted on here that my blog is a sort of a side hustle. It makes me a few bucks each month. I don’t get rich from it (at least not yet), but it brings in a few bucks each month.

I also do some freelance writing that brings in a few more dollars a month. Watching videos and searching the web also bring in a few bucks a month. Put all of these side hustles together, and I brought in a bit more than $400 in side hustle income in August 2017. I’ve made even more in the past when I wasn’t publishing it on this blog.

Persistence Pays Off

Personal finance is not a sprint. It’s a marathon if you have the good fortune of living a life that reaches a relatively normal length. It might be tempting to quite side hustling if you’re only making $50 a month. It’s important to remember the power of a dollar so that you can stay motivated.

A dollar a day in extra income that you can invest will add up to $365 at the end of a year. If you then invested that and got an 8% return, after a year, you’d have $394.20. But, it get’s even better. If you keep up with saving another dollar each and every day, you’d save another $365, which would make nearly $760.

If you can keep this up for 50 years, saving just a dollar a day and earning an 8% return, you’d be pushing a nest egg of $300,000. A dividend yield of 4% on that $300,000 would throw of $12,000 in passive income at this point.

Double the investment to $2 a day for the same period of time, and you could get $24,000 in passive income. And remember, passive income is the best income. Of course, getting a later start will mean that you’d have to make and save more than $1 a day more than your bills to get this far ahead.

Regardless, a side hustle could definitely bring in more than $2 a day if you play it right. Even answering a survey or two could lead to that much. Figuring out a side business where you could write on the side or walk dogs or mow lawns might mean that your side hustling could bring in several hundred a month. Even starting a blog (affiliate link) could wind up being a profitable side hustle.

Side hustling is not likely to make much in the first few weeks. However, each and every dollar is an important building block in your road to financial stability and eventual financial freedom. Don’t get discouraged if you only made $5 this week. Try to make $6 next week. The future you will be glad that the present you did, especially if you don’t spend all of that money.

Keep Up With My Progress

If you’d like to follow my progress each month, be sure to go to the top of the page and sign up for updates. You can also follow me on Twitter.  

Also, if you could share this latest update below via Twitter, Facebook, or any other social media platform, it would be much appreciated. I want to inspire others to improve their finances. I also want to show them some easy ways that they can do so.  Just click on the “Share This” link at the bottom of this post!

Disclaimer: This site has affiliate links. If you decide to sign up with one of these affiliate links, I may be compensated. I appreciate any support you might provide.

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Use Swagbucks For Disneyland Tickets


Swagbucks, the online rewards site where you earn cash and free gift cards for the everyday things you do online, has added Disneyland eTickets to their lineup of rewards!

If you haven’t used Swagbucks before, here’s how it works: You get points (called SB) for things like online shopping, discovering new products and services, answering surveys, watching videos, and even searching the web. Then you redeem those points for gift cards from places like Amazon, PayPal, Walmart, Target, Starbucks, and now you can redeem them for tickets to Disneyland!

For you Disney fanatics out there who are planning a trip to The Happiest Place on Earth, Swagbucks is a great way to stretch that travel budget further. You can earn while booking your hotel, get gift cards for travel and restaurants while you’re away, or just offset the cost of the tickets using your SB points!

Here’s some information from their FAQs about it:

How will I receive my eTickets?
These are electronic tickets that will be delivered to you via email.

Where can these eTicket be used?
These eTickets are specifically for use at Disneyland Resort in Anaheim, CA, and cannot be used at Disney World in Florida, or at any Disney Stores or other Disney resorts. Tickets cannot be used for admission to special events (ie. Mickey’s Halloween Party).

What type of eTickets does Swagbucks offer?
2 Day, 1 Park, Child (ages 3-9)
2 Day, 1 Park, Adult (ages 10+)
2 Day, Park Hopper, Child (ages 3-9)
2 Day, Park Hopper, Adult (ages 10+)
3 Day, 1 Park, Child (ages 3-9)
3 Day, 1 Park, Adult (ages 10+)
3 Day, Park Hopper, Child (ages 3-9)
3 Day, Park Hopper Adult (ages 10+)

What happens if I redeem for the wrong ticket?
These eTickets are non-refundable. Please make sure you are redeeming for the correct ticket and pay close attention to the type of ticket you are selecting, as there are different tickets depending on the amount of days you wish to attend the park, the type of ticket (one park per day vs. Park Hopper), and the age range the ticket is for (adult vs. child). Adult tickets are for ages 10 and up.

Also, please keep in mind it may take a few business days for you to receive your eTicket, so be sure to give yourself enough time when redeeming before you plan to visit the park.

The previous was a sponsored post.

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How I Made Money Online In August 2017


In addition to the monthly post where I review my passive dividend income, my favorite post is the one where I look back and total up the money I made through online activities for the previous month. I love both of these posts. They might look back, but they are important building blocks for the future. I love that I made money online, because I can do so in my pajamas. Some (but not even the majority at this point) of my income is affiliate income that I earn when people sign up for programs that I promote on this site. I appreciate any help that my readers choose to give me. 

I have a day job, but my budget would be pretty tight without some extra money coming my way. This is where my online earnings come into play.

How I made money online in August 2017
How I made money online in August 2017

I first started looking into making money online after my kids started coming and my wife quit full-time work to stay home with them. My day job brought in less than $25,000 at the time, and I was working on a master’s degree. I then started a doctoral program and gave up the day job. It was a big, no a HUGE, risk, but the fact that I made money online helped me avoid some of the debt that I would have otherwise accumulated.

My first money-making site was CashCrate, then I moved to HubPages and Swagbucks, and the money-making opportunities just increased from there. From HubPages, I learned about Textbroker through a review, and this helped me earn even more.

Before I started this process, I’d never really made money online. I’d heard of people doing so, but I had no clue. Therefore, I started these reviews up again so that I can help any readers achieve some financial goals.

I can’t believe how many ways that I’ve made money online over the past few years. This process has added thousands of dollars to my income that I would not have otherwise made.

How I Made Money Online In August 2017

I found out a new option for making money online in August thanks to a like on a Twitter post I made. I also got some passive income from some writing I did several years ago. My nice earnings from Swagbucks continued. Here are the ways that I made money online in August 2017:

Swagbucks: $100.00
Earnably: $1.00 This was a new option for earning money online that I found in August. You can cash out on Earnably for BitCoin.
GiftHulk: $10.00 This gets more lucrative with bonuses the more you make.
CashCrate: $26.86
HubPages:$50.71 This is residual income I made from writing a few years ago. I get paid about once a year–passive income
EarnHoney.com: $5.00
Ibotta: $20.00 (Sign up with the link to the left and get your first $10 after making a qualifying purchase within a week.
Freelance Writing: $188.09

TOTAL ONLINE EARNINGS FOR AUGUST 2017: $401.66

I made money online from eight different streams. None of these were massive rivers of money, but they added up to more than $400! That’s pretty awesome. If I could put all of this into my IRA each month, I would be able to save nearly $5,000 over the course of a year, which would probably increase the passive dividend income that I can bring in by somewhere between $100 and $300.

This $400+ was better than the $327.19 that I earned in July. I’m not sure what I’ll make in September, but I know that I’ve already cashed out a bit with Swagbucks.

Set Up A Blog To Earn Some Income Online

One of the ways that I’m able to make a little bit of money each month is through this blog. While the money is not huge, it’s grown over the past year. It’s much easier to make money through a self-hosted blog than it is through a free platform. I had a couple of blogs before this one that did not make much money at all (it can take a while to build up $100 in Adsense income).

I recommend using WordPress, and WordPress recommends BlueHost for new bloggers. You can start to set up a blog with BlueHost via this link. While you’ll probably not make a huge amount at first , you can start to build up an income over time.

Reviews Of Money-Making Sites

Here are a couple of reviews that might help you decide which sites might work for you:

Earn Cash and Rewards with Swagbucks
Swagbucks is my favorite site to use to earn money. If nothing else, you can make money from searching the web.

Earning Money In Pajamas With GiftHulk

My Ibotta App Review
I use this when I go shopping. You can earn $10 for signing up with my link and getting your first rebate within a week. With cashouts starting at $20, you’d be more than halfway to redeeming for some PayPal cash!

How did you earn extra money online during August? Do you have any other options that worked? Let me know in the comments. I’d love to check them out!

Keep Up With My Progress

If you’d like to follow my progress each month, be sure to go to the top of the page and sign up for updates. You can also follow me on Twitter.  

Also, if you could share this latest update below via Twitter, Facebook, or any other social media platform, it would be much appreciated. I want to inspire others to improve their finances and show them some easy ways that they can do so. Just click on the “Share This” link at the bottom of this post!

Disclaimer: This site has affiliate links. If you decide to sign up with one of these affiliate links, I may be compensated. I appreciate any support you might provide.

 

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Passive Dividend Income–August 2017

Earnably
This site includes affiliate links. Please note that I may be compensated should you sign up for these programs. The month of August is not quite over, but the number of companies paying me passive dividend income is. One of my favorite options for earning passive income is dividends.

Of course, I have to work for the capital to invest, but the dividends come without any additional work on my part. They also provide more capital. I can then invest that additional capital to get even more passive dividend income. It’s a great cycle to say the least.

Passive Dividend Income Builds Up Slowly But Surely
My dividends continue to build slowly, but surely.

I started this blog with the title “Earn Money In Pajamas” because I wanted to earn money from home in my recliner. Dividends are the ultimate option for earning money in pajamas. The companies I own make money 24/7/365. Most of them pay me on a quarterly basis from the profits that they make. That’s an awesome concept that I really dig.

July was a low month when it came to dividend income, but August was much better. Two of my biggest payers provide me with income in the second month of each quarter. Without making you wait any longer, here it is:

My Passive Dividend Income For August 2017

Traditional IRA

AT & T (T)                                                                                  $24.50
Realty Income Corp. (O)                                                       $5.29
Omega Healthcare Investors (OHI)                              $32.00

401k

JP Morgan Equity Income R5 (OIERX)                           $3.41

TOTAL DIVIDENDS FOR August 2017:                          $65.20

This was just short of my record divided income in one month, which was set last December. This $65.20 was an increase of more than $21 in just three short months. This effectively is a whole hour of freedom when compared with my income from May. As I’ve noted before, I figure that I need $20 an hour to replace the benefit of an hour of my working income.

My first dividend report came exactly two years ago. In August 2015, I earned a whopping $0.64. I just made more than 100 times that two years later. While $65 and some change is not a huge sum, it’s way bigger than literally just some change. In 2015, my passive dividend income couldn’t have even paid for a pack of gum. Now I could eat out two or three times, depending on where I decide to eat.

My dividend income for August now brings my annual total up to $287.17, which is more than I earned all of last year. And I still have four months to go. I’ve updated my monthly passive dividend income page to reflect this new income.

Passive Dividend Income And Freedom

One of the things that I like the best about dividend income is the freedom that it could eventually provide. Should I ever get to the point that I could live off of dividend income, I’d officially have financial independence. I’m a long way away from that, but it’s a goal that I can shoot for.

With all of my purchases from August added in, my passive dividend income for the next 12 months should come in at $461.82. This would provide me with slightly more than 23 hours of freedom on an annual basis, which is slightly less than 2 hours a month.

This $461.82 should come in without any additional purchases and without any dividend raises. This is a very unlikely scenario. A dividend cut would actually be more likely even though I have companies that I believe will be around and making money for the long haul.

My dividend income for the month of August 2016 was only $13.29; therefore, I increased that total by more than $50 in just a year. While is not likely to continue over the long haul, it’s setting the foundation for where 10 percent increases will be more than the $50 year-over-year increase I just experienced. That’s pretty exciting to think about.

How did you passive dividend income measure up in August? Let me know in the comments.

If you’d like to keep up with my progress, be sure to sign up for updates in the email signup box near the top of the page or via the popup that asks you to sign up. You can also follow me on Twitter.

Disclaimer: I am not a professional financial advisor. I intend this information for informational and educational purposes only. Perform due diligence before investing in any equities. See my disclosures page for more information. I’m long O, T, OHI and OIERX.

 

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August Swago From Swagbucks


Swagbucks is holding their Swago promotion starting Monday, August 28th at 9am PDT! It’s just like bingo, but in this case you’re filling out squares as you earn points on their site for doing things you already do online. If you’re thinking of trying Swagbucks, this is a great chance to learn all about how the site works and earn bonus points while doing it.

The best part is that the points you get can be used to get free gift cards to places like Amazon, or PayPal cash!

Fill up your board and then submit your pattern to get even more points – if you can fill in the whole board, you get a 500 SB bonus! That’s enough for a $5 gift card in their Rewards Store.

Click here to sign up and get started! If you sign up through my link and earn 300 SB before the first of next month, you’ll get a bonus 300 SB!

The previous was a sponsored post.

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Earn Free Money: Ibotta App Review

Just today, I redeemed another $20 through Ibotta (This is a referral link. I may be compensated). This is the third time that I’ve been able to redeem through the Ibotta app, and I’ve earned more than $65 overall in about three months. While I’ve not gotten rich by any means, getting $65 for doing pretty much what I’d do anyway is pretty cool. This review of Ibotta will hopefully show you how you can make money with the app.

If you sign up for Ibotta through my referral link, you can get a free $10 after making your first purchase (excluding “Any Item” rebates). You can literally buy a pack of gum, get a $0.25 rebate on it, and earn $10 for the trouble as long as the first purchase takes place within 7 days of your signing up. You’ll then be a little more than halfway to redeeming your rebates for some money.

The Ibotta app pays off.
Here’s the basic concept for Ibotta.

What Is The Ibotta App?

Simply put, the Ibotta app is a shopping app that offers users rebates for making purchases. I signed up via another blogger’s referral link, and started by buying strawberry milk mix for my kids. This purchase gave me a $1 rebate and then triggered the $10 sing-up bonus. Here are the steps you’ll need to take to start redeeming on the app:

  1. Sign up for the Ibotta program and set up your account
  2. Download the Ibotta app from the Google or Apple app store
  3. Sign in with the account information (email and password) that you gave for Step 1
  4. Look for rebates at your favorite brick-and-mortar or online retailers (you might have to watch a short video or answer a survey question to do so). Once the rebate shows a green check mark, you’re good to go.
  5. Make the purchase on your next trip to Wal-Mart or another retailer
  6. Scan your receipt. The Ibotta app itself will take a picture of your entire receipt or a QR code that’s found at the bottom of the receipt in the case of Wal-Mart. You can also link your loyalty cards for some retailers and skip this process.
  7. Scan the UPC code for most of the items you’ll want to redeem. You don’t have to do this step for the any item rebates.
  8. Wait for the app to verify the purchase. The rebate will  show up in your account within a day or so (usually quicker).
  9. Cash out with PayPal or Venmo when you reach $20 (or redeem for a gift card to leading retailers or restaurants).


That’s it. It’s a pretty simple process that probably takes less than an hour overall to cash out for $20 or more.

Why Should You Get The Ibotta App?

Well, in one word, the answer would be…money! Everybody has to eat, and unless you starred on Duck Dynasty, you’re probably going to go to Wal-Mart or some local grocery store. Dollar General, Love’s Travel Center, and Casey’s are also retailers that you can use to redeem rebates. Since you have to eat or get gas, you might as well get some money back for the trouble.

Additionally, you can actually stack your Ibotta rebates with manufacturer’s or store coupons. This allows you to basically double dip and stack rebates when using the Ibotta app. You can effectively multiply your savings this way.

Additionally, there are some rebates that come just from buying literally anything. I’ve redeemed several $0.25 rebates for “Any Item.” Additionally, there will sometimes be rebates for any brand of white milk, bananas, and other staples. Keep in mind that these rebates will not qualify you for the $10 signup bonus that I noted above. You have to buy an item from a specified manufacturer for this bonus.

The Final Verdict

While you’re probably not going to get rich with it, the Ibotta app is definitely worth it! You can earn money in pajamas (because I’ve seen people shopping in their pajamas in public–although I don’t do it, nor do I really recommend it).

Again, you can sign up for Ibotta here. I’ve already earned $65 by shopping and watching out for bonuses that you can earn through Ibotta. I even have friends who have redeemed more than $200. They are on my “team”, and there are some team bonuses that can kick in and supercharge your earnings.

If you’d like to find some other ways to make money online, you can check some out on my page that gives several ways to make money online without spending a penny.

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Do Small Investments Add Up? A Johnson & Johnson Case Study

One of the concerns that many people have when it comes to investing is the concern that they don’t have enough to build up any amount that’s worth the hassle. Why would anyone want to invest $50 or $100 a year? Is that even worth it? Do small investments add up?

The answer to this question would be, yes! It is worth it. While you’re probably not going to get wealthy by investing $100 a year, you can start to build up a nice holding if you choose a solid company. You could even do better if you pick out the next Amazon (AMZN) or Apple (AAPL).

To show some steady growth that’s around 11 percent per year when accounting for dividend reinvestment, this case study will look at how a small investment in Johnson & Johnson (JNJ) would have paid off over a 20-year period.

Methodology

This case study, as noted, will focus on a small investment in Johnson & Johnson. Our hypothetical investor, let’s call him Bob, purchased one share of JNJ stock on the first trading day of the year starting back in 1997. He then proceeded to purchase exactly one share of JNJ on the first trading day of the year in every year since.

To get the purchase price of each share, I went to the Johnson & Johnson investor relations page. I then looked for the highest price on the first trading day of the year. Therefore, Bob was pretty unlucky in the regard that he invested at the worst time of the day. I did not account for any transaction charges in this analysis. That would undoubtedly add some cost unless Bob chose to work with a direct purchase agency like Computershare, but even direct purchases would have some minimal expenses.

This means that Bob made 21 separate transactions over a 20-year period, counting 2017. Johnson & Johnson stock split back in June 2001, so he, in effect, bought two shares for the first five years.

I then looked at the dividends that JNJ paid out over the past 20 years. Counting the dividend that’s anticipated in September 2017, Bob would have received a cumulative $34.36 in dividend income on the first share of stock that he bought. This would obviously go down on each subsequent share, as the length of time that he was invested in the later shares was less.

Finally, I looked at the value of each share if Bob decided to reinvest his dividends into more shares. The DRIP value came from the calculator that’s available at Don’t Quit Your Day Job. Here are the totals that my calculations came up with.

Case Study Results: Small Investments Add Up

If Bob had bought only one share a year between January 1997 and January 2017, he would now have 26 shares because of the split in 2001. The annualized dividends per share on his original purchase would have grown from $0.425 per share to the current level of $3.36 per share.

The 26 shares that he would now hold without dividend reinvestment would throw off $87.36 in income each year without accounting for any additional dividend growth going forward. This is more income than the share price he would have paid in all but seven of the years in which he bought shares, and it would be more than his average annual investment of $74.56.

Bob’s investment of $1,565.76 in Johnson & Johnson would now be worth $3,466.40, which is a nice return in and of itself. If he had decided to roll over all of his dividends into more shares, he would now hold 36.3255 shares. This means that he would have added more than 10 shares of a great company by doing nothing more than choosing not to spend his dividend income.

Dividend Reinvestment Ramps Up Returns on Small Investments

The value of his holdings in JNJ would be up to $4,842.55. This would effectively mean that his investments would have cumulatively tripled over time. Additionally, his holdings under the DRIP scenario would now throw off $122.05 in annual income.

The total return with dividend reinvestment included shows an 11.01 percent CAGR based upon the calculations from the Don’t Quit Your Day Job calculator. This is important to realize in light of the fact that the cost of a share of JNJ went up by just above 10 percent between January 2002 and January 2012.

In spite of this nearly sideways trading range for a decade, the long-term return on JNJ is still quite good over a 20-year period.

What About A Big Initial Investment?

This case study focused upon how much a single share a year would have added up to. What if Bob had instead had $1565.76 to invest back in 1997 and reinvested dividends? He would now have an investment that would be worth $13,479.25. This would equal to 100.9833 shares of stock which would now be providing $339.30 in dividend income each year based upon the current payout of $3.36 a share.

This is without any additional investments throughout the 20-year period, which shows that buying early and then reinvesting allows for a much greater level of compounding

Conclusion

You might think that an investment in one share each year is pretty pointless. These are small investments, but hopefully, this case study shows that this is not the case. A little more than $3,400 is not a huge sum of money, but it’s more than double what Bob actually invested. It’s definitely more than he would have had had he not decided to invest at all.

Also, it’s important to note that you could multiply this by any number you want to include. You could multiply the total by 5 if you to look at 5 shares a year, or 10 if you wanted to look at 10 shares a year. The numbers show that a small investment in a boring large-cap company can build up over time (when I was growing up, JNJ was known for Band-Aids and baby powder–pretty boring stuff).

The study also shows the importance of starting early, as a bigger investment early on allowed for much higher returns, even if no additional investments were made in subsequent years. Also, it’s important to note that there are no “typical” investments. If Bob had invested all of his money in Enron, he’d have nothing to show for his efforts. Therefore, it’s important to diversify and choose companies with solid long-term growth in revenue and income.  Then, even small investments will add up over time.

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If you’d like to follow my progress each month, be sure to go to the top of the page and sign up for updates. You can also follow me on Twitter.  I’m now above 300 followers, and I’d like to get more than 400 by the end of summer. You can help!

Also, if you could share this latest update below via Twitter, Facebook, or any other social media platform, it would be much appreciated. I want to inspire others to improve their finances and show them some easy ways that they can do so. Just click on the “Share This” link at the bottom of this post!

Disclaimer: This site has affiliate links. If you decide to sign up with one of these affiliate links, I may be compensated. I appreciate any support you might provide.