Money Management

Worried about the risks of starting a business? See how starting small, working from home, and finding your niche can help. [[{“value”:”

Starting a business requires confidence, energy, and optimism. Entrepreneurship is about being creative and building something new in the world — even if other people don’t understand, think it’s too risky, or don’t see the same opportunities. Starting a business is an act of hope.

But there are real risks, costs, and downsides to starting a business. Good entrepreneurs know how to weigh the risks — but still move forward with cautious, fact-based, well-informed faith in the future.

Here are a few big misconceptions that can hold back would-be entrepreneurs from starting a business — and how you can market your business with a clearer view of the positive possibilities.

1. “It’s too expensive to start a business”

You might assume that you need a lot of start-up capital to start a business. It’s true that if you want to open a restaurant or brick-and-mortar retail space, you’re going to need some cash or a small business loan to get your business up and running. But many business ideas don’t require a lot of upfront investment.

The Motley Fool Ascent’s research has found that some home-based small businesses can be started with less than $1,000, while the average e-commerce small business might need $40,000 of start-up capital in the first year. Franchises can be another cost-effective option for starting a business — you buy into an established system and corporate brand.

2. “It takes too much time to start a business”

Many businesses can be started as flexible work-from-home side hustles that you do in your spare time. You don’t have to quit your day job. You don’t have to invest every last minute of your life in starting a business.

Perhaps the greatest thing about making money online and starting a business in 2024 is that you can test the waters and learn as you go. Starting a business is not “all or nothing.” You can dabble, experiment, and then ramp up your efforts once you see how the market responds to your products or services.

3. “You need advanced tech skills to start a business”

You don’t have to be an expert in every skill to be an entrepreneur. You just need an idea, and a sense of determination and hustle to keep making progress toward your business goals.

Technology skills, corporate experience, formal credentials, and years of business expertise can be useful. If you already know how to write code, develop apps, build websites, do digital marketing, or raise money from investors, that is fantastic. But many entrepreneurs don’t have formal training or a perfect pedigree. Not every entrepreneur excelled in formal education, or can get along well in traditional corporate environments.

Sometimes that “outsider” spirit is valuable for entrepreneurship, too. Many of the most important business management skills can be learned by doing — and wanting to keep money coming into your business bank account is the best motivation of all to stay curious, stay hungry, and keep learning new things.

4. “No one wants what I’m selling”

The most important business skill is sales. No sales, no business. If you want to start a business, you need to have confidence that there is demand for your product or service — that there is a market for what you offer.

Sometimes the market for a small business is obvious: if you want to start a pizza restaurant or a food truck that sells tacos, you can quickly do some market research and see how many other pizza joints and taco wagons are doing business in your area. If you want to start a hair salon, there is a reasonable level of ongoing demand for haircuts.

But sometimes you have to create demand, or create an entirely new niche market, for your product. What if you want to sell software that helps meteorologists make interactive videos for social media? What if you want to start a fitness-oriented food truck that serves fresh salads and smoothies? Some business ideas are unconventional — and they won’t all succeed. But you won’t know until you try to market your business and find customers who want what you’re selling.

5. “There’s too much competition in the marketplace — the good ideas are already taken”

It’s easy to get bogged down by thinking that “all the good business ideas are taken,” or all the good markets are already being discovered and served by other entrepreneurs and big corporations. But this is a mistake!

There are surprising opportunities for new businesses to break into established markets, even if they’re dominated by big corporations. For example, look at the recent craft beer boom in America; many big corporate beer brands have seen a decline in sales in the past few years, while small local breweries have thrived. Or look at how many quirky local coffee shops are still doing fine, right down the street from big corporate coffee chains.

The economy is vast and varied. Whatever business you want to start, if you find your niche and hustle hard, with a bit of luck you can carve out sustainable success.

Bottom line

Don’t let negative thinking or misconceptions hold you back from being an entrepreneur. In some ways, it’s easier than ever to start a business. Start it as a side hustle, working from home. Do research online to learn more about your target market and how your industry works. And test your idea with digital marketing tools to help you find customers and spread the word about your product.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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More money, more problems? Americans earning over $150,000 per year are still worried about money. See what causes the most money stress and how to cope. [[{“value”:”

Americans are feeling a lot of financial pressure in 2024. Recent surveys have shown that Americans are losing an average of five nights of sleep per month because of money stress. A new Federal Reserve survey found that people at all income levels are feeling the strain — even high earners who make over $150,000 per year.

You might think that higher-income Americans would worry less about money — and in some ways, they do. But people earning $150,000 a year are still struggling to save, and some have had to resort to heavier borrowing, side hustles, and other methods to cope with financial stress.

Let’s look at a few ways that high-income Americans are dealing with the higher cost of living — and how everyone can make some savvy moves to improve their personal finances.

Americans are more worried about money

The Federal Reserve conducts an ongoing, quarterly survey of Americans, called the Labor Income, Finances, and Expectations (LIFE) Survey. The survey asks people about their employment status, income, how they feel about their personal finances now, and their concerns for the future.

The latest LIFE Survey was published in June 2024, and it shows a higher level of financial stress for Americans of all incomes. Americans are more likely now than a year ago to say that they are concerned about making ends meet in the coming year. In fact, 34.9% of all Americans, and 32.5% of Americans earning over $150,000 per year, are worried about making ends meet in the next six months. Those percentages are up from 28.7% of all respondents, and 21.7% of high earners, in April 2023.

Biggest financial worries for $150K earners

Here are a few highlights of the Fed LIFE Survey that show some of the biggest areas of personal finances where high-income Americans (who are employed and earning over $150,000) are more likely to be worried:

My employer cutting my job or laying me off: 39.7% of high-income Americans were worried about job loss, compared to 31.6% of all respondents.My employer’s ability to stay in business: 39.1% of high-income Americans were worried about their employer going out of business, compared to 29.1% of all respondents.Finding or keeping eldercare: 38.7% of high-income Americans were worried about the cost and availability of eldercare for aging loved ones, compared to 29% of all respondents.Finding or keeping child care: 37.9% of high-income Americans were worried about child care, vs. 29% of all respondents.

The takeaway: Having a higher income doesn’t necessarily mean people feel more secure in their jobs, or more comfortably able to afford big expenses like child care. No matter how much money you make, it’s important to try to build up a decent emergency fund.

How high earners are coping with money worries

It’s not accurate to say that Americans are all in the same boat when facing money stress. Someone who earns $30,000 per year and can’t afford to make rent is in more financial peril than someone who makes $150,000 per year and can’t afford to pay the full balance on their premium rewards credit card.

But the Fed survey found that high-income Americans are using some of the same strategies as everyone else to deal with their financial problems. This table shows a ranking of financial coping strategies used in the past 12 months by high-income earners, compared to Americans overall.

Interestingly, higher-income Americans were more likely than overall respondents to say they had used unemployment benefits in the past 12 months. This could be a sign that the job market has been a bit stronger for lower-income people, while higher earners might have been more vulnerable to tech layoffs and a “white collar recession.”

High-income Americans were also more likely to take an additional job (15.3% of high earners vs. 13.1% of overall respondents), and take money out of retirement accounts early (14.3% of high earners vs. 10.2%) of overall respondents. Perhaps higher-income people are more likely to have enough retirement account assets to use as an emergency fund, and are more likely to have in-demand job skills that can be used to start a side hustle.

The takeaway: Using your 401(k) or IRA for emergency cash should only be done as a last resort — it can cause you to owe extra tax penalties and miss out on long-term investment growth.

Bottom line

Americans at all income levels are feeling the pinch of higher prices, depleted savings accounts, and general economic uncertainty. If your personal finances have gotten more stressful in the past year or so, it’s more important than ever to get a handle on your money. The best budgeting apps can help you see where your money is going and find ways to save.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Data shows that retirement savers are upping their game. Read on to see how you can do the same. [[{“value”:”

You probably know that it’s important to save for retirement to ensure you have enough money to cover your expenses later in life. And many experts, Fidelity included, recommend socking away at least 15% of your income in an individual retirement account (IRA) or 401(k).

Of course, if you can save more, great. But many agree that 15% is the minimum contribution target workers should aim for.

But is a 15% savings rate realistic? As it turns out, yes.

Workers are upping their retirement plan contributions

Recent data from Fidelity finds that the average 401(k) savings rate just reached a record high of 14.2%. This is largely in line with its 15% recommendation.

However, this doesn’t mean that everyone is able to save close to 15% of their income for retirement. And if you’re unable to right now, that’s okay. But there are a couple of steps you can take to increase your savings rate.

1. Snag your full 401(k) match

The average 14.2% contribution rate for 401(k)s is a combination of employee contributions (9.4%) and employer matches (4.8%). In other words, workers are contributing 9.4% of their earnings, while their employers are kicking in 4.8% to get them to the 14.2% mark.

If your workplace 401(k) plan offers a match, do your very best to contribute enough money from your paychecks to claim it in full. That’s free money that can go into your account, and you can invest it along with your own contributions for added growth. And if you’re not sure how much your employer will match, just ask your in-house benefits coordinator.

2. Pick up a side hustle

If you need the bulk of your paycheck to cover essential bills, working a side hustle is a great way to find more money for your 401(k). That way, you don’t have to start slashing expenses, which many people find difficult to do — perhaps more difficult than spending a few extra hours working each week.

A side job might also give you more spending flexibility and improve your quality of life. It pays to explore different options, whether it’s work you do from home or a gig you do outside the home but on your own schedule, like driving for a ride-hailing company.

What can saving 14.2% of your income do for you?

Median weekly earnings for full-time workers were $1,143 in the second quarter of 2024, says the Bureau of Labor Statistics. That’s $59,436 per year. Saving 14.2% of that, whether on your own or with the help of an employer, means contributing $8,440 a year to a 401(k).

Let’s assume that sum is contributed in 12 equal parts during the year over a 30-year period (even though typical wages are very likely to grow in three decades). At a 10% return, which is in line with the stock market’s average, you’re looking at a balance of almost $1.4 million.

So clearly, it pays to try to get as close to Fidelity’s 15% recommendation as you can. It could do a lot of good for your retirement.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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An emergency expense can cause stress, but having savings could help. Find out how many Americans can’t afford to pay for a $400 emergency with cash. [[{“value”:”

An emergency fund is a powerful financial tool. With extra cash in the bank, you can more easily navigate challenging life situations and unexpected costs. Unfortunately, many Americans have meager savings — some have none at all. That’s not ideal.

Without savings, many people pay for costly emergency bills using credit cards, which could lead to more financial struggles and debt. Let’s explore how many Americans can cover a $400 emergency and discuss how to prepare for future expected expenses.

37% of Americans can’t cover a $400 emergency with cash

According to research from The Ascent Motley Fool, a significant number of Americans are unprepared to cover a $400 emergency expense using cash from their checking or savings accounts. Data from the Federal Reserve shows that only 63% of Americans could cover a $400 emergency expense using cash. That means 37% can’t afford to do that.

Many people without enough savings would use a credit card to cover a $400 emergency expense. However, using a credit card for emergencies puts you at risk of accumulating debt. If you don’t pay your entire statement balance off, you’ll be charged interest.

Credit card interest is expensive, so it can be difficult to climb out of debt if you charge more to your card than you can afford to pay off. It’s a good idea to prioritize building an emergency fund to avoid using a credit card when in a tough spot.

Don’t feel discouraged if you can’t afford to cover a $400 expense with cash. It’s never too late to start saving. Now is a great time to begin building an emergency fund. And if you need to use a credit card during an emergency, consider opening a 0% APR credit card. The best way to avoid interest and debt is to pay your debt off before the 0% APR promotional period ends.

Start saving now to prepare for future unexpected costs

You’re not alone if saving feels impossible due to your current financial situation. But I have some good news: You don’t have to start with a massive savings goal. It’s OK to start small. Any money saved will put you in a better position than having zero savings.

Even saving $40 a month can make a difference. If you set aside $40 monthly for an entire year, you’ll have $480 saved. A few hundred dollars in savings could help you avoid using a credit card during an emergency. If you can only save $10 monthly, that’s OK, too.

If you struggle to remember to save, we recommend automating the savings process. You can set up automatic transfers from your checking account to your savings account through your bank’s website or mobile app. You can choose a schedule and amount that works best for you. This strategy can save you time and help you stay on track with your goals.

Earn interest while your money sits in the bank

Whether you have $20, $200, or $2,000 saved, avoid keeping too much in your checking account. Why? Most checking accounts don’t earn interest, so you’re missing out on free money.

By keeping your extra money in an interest-earning bank account, you can earn interest while your cash sits in the bank. Opening a high-yield savings account is a great way to get rewarded for saving.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Do you like sharing your opinions with others? You can get paid to do it by completing user tests. Find out which companies will pay you to give feedback. [[{“value”:”

Many people are struggling to afford their everyday expenses as living costs continue to climb. Even if you’re working full-time, your paycheck may no longer be enough to cover all your expenses. If that’s the case, you’re not alone.

Using budgeting apps can be helpful, but budgeting will only get you so far without increasing your income. You may want to consider getting a side hustle to increase your earnings.

It may be easier than you think to earn more money — especially if you have a laptop, desktop, or mobile device, and internet access. Did you know that it’s possible to get paid for sharing your opinions? You can get paid to perform user tests to share your thoughts about websites and mobile apps.

Businesses use this valuable feedback to make improvements, and your involvement could be a win for your wallet. Here are a few companies that will pay you to be a user tester.

1. UserTesting

UserTesting offers desktop and mobile user testing opportunities to qualified participants. When tests are available, users are asked to answer screener questions to determine if they’re a good candidate. Participants who are selected and complete user testing studies qualify for payment.

To become a tester, you’ll need to apply and be accepted. If you’re accepted, you can participate in tests that match your demographics. Filling out your profile will help you get matched with potential user study opportunities.

Rates vary by test. I’ve seen a lot of tests paying $10 for 10 to 15 minutes of work. In most cases, you’ll be paid 14 days after completing a test. Payments are made via PayPal.

2. Userbrain

Userbrain is another platform that will pay you to share your thoughts. You’ll follow prompts and give feedback about websites. To get started, you must sign up and submit an unpaid qualification test. If approved, you’ll have access to paid test opportunities.

You’ll be paid $5 per test. Most tests require 5 to 20 minutes of your time. Once you complete a test, it will show as pending for seven days. As long as the client approves your test, you’ll be eligible for payment after seven days. You’ll need an account balance of at least $10 to request a cash out. Payments are sent via PayPal.

3. Userlytics

Userlytics is another company that offers paid user testing opportunities. Participants can complete tests on a computer, mobile phone, or tablet. Some test opportunities will require users to answer screening questions to determine if they’re a good fit.

To become a tester, you must first apply to join Userlytics. If you’re approved, you’ll have access to tests. Companies want to test their target market, so you should fill out your profile so you can be matched with tests. Payments are made every 15 days by PayPal.

4. IntelliZoom

ItelliZoom is another user testing agency that will pay you to provide feedback to brands. You’ll be asked to answer questions about website and product prototypes. The IntelliZoom website suggests tests take 10 to 20 minutes to complete.

Payment varies, but the average payment is $2 for a standard survey. If you’re asked to think out loud or record video, you can expect to be paid an average of $10 per study. Payments are made via PayPal 14 days after completion of a study.

Not every test will be a match

Keep in mind that you won’t be a good fit for every test that you see. It may take time to land opportunities and some companies may have more testing opportunities than others. After signing up for a platform, make sure you understand the testing and payment process.

You’ll need to have an eligible device with a microphone. Some testing platforms offer video-based tests, so a webcam is required for those opportunities. For those looking to increase their checking account balances, taking user tests could be an option to consider.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: short September 2024 $62.50 calls on PayPal. The Motley Fool has a disclosure policy.

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The CrowdStrike outage caused massive problems for businesses of all sizes. See how small businesses can get liability insurance for tech outages. [[{“value”:”

One of the biggest fears of anyone who makes money online from a small business is: “What if all the computers crash at once?” On July 19, 2024, that kind of worst-case scenario actually happened: the CrowdStrike outage was (perhaps) the largest IT outage of all time.

Caused by a faulty update to security software, the CrowdStrike outage crashed millions of mission-critical systems, wreaking havoc for airlines, banks, and public sector organizations like hospitals and public transit. The CrowdStrike outage may cost Fortune 500 companies over $5.4 billion in damages.

Even if your small business was not directly impacted by it, the CrowdStrike outage is a powerful reminder of why you need small business insurance. We talked with small business insurance expert Wayne Bernstein from XPT Specialty, Inc., to see what business owners can learn from this incident.

Let’s look at a few top-of-mind lessons from the CrowdStrike outage for small business owners.

1. No one is safe from the worst IT outages

The CrowdStrike outage got the biggest headlines for the damage and service interruptions it caused for big corporations like airlines. But one ominous lesson from this episode is that even small businesses can be affected by tech outages — and might owe big financial liabilities.

“Due to the complexity of this incident, no company is safe from the fallout,” said Wayne Bernstein, Senior Vice President of Professional Lines at XPT Specialty, Inc. “Smaller companies may find themselves just as liable and responsible as the larger ones, but that largely depends on their contractual relationships with the parties that were actually or allegedly injured by this incident and many other factors.”

Don’t assume that crises like the CrowdStrike outage are only a problem for big businesses and their tech vendors. Wayne Bernstein warns that small businesses that provide tech support, tech consulting, web hosting, or other cloud-based services might be especially vulnerable to problems like the CrowdStrike outage. “Perhaps the reality is that the outage may be far more damaging to smaller businesses, due to the amount of smaller technology companies that exist,” Bernstein said.

2. Re-read your small business contract language

Understanding the small business insurance impacts of a global incident like the CrowdStrike outage can be complicated. Bernstein says it’s too early to tell how many small businesses might have to pay damages to their clients and customers due to service interruptions or other business disruptions.

But this could be a good occasion for small businesses to revisit the fine print of your service level agreements (SLAs) and contracts, to see where your liability is limited (or not) for third-party problems like the CrowdStrike outage.

“It’s unlikely that smaller businesses will have to pay the same volume of damages, as bigger players tend to have deeper pockets and more insurance coverage,” Bernstein said. “Nevertheless, contractual obligations may play an important role in determining liability. Some contracts include a waiver of subrogation provision, which the insurance company may or may not grant. If the carrier agrees to the waiver subrogation, then the insurer cannot subrogate against the responsible party. So, the payment of the claims may rest with multiple carriers arising from the same incident.”

The CrowdStrike outage is especially concerning for any small businesses in the information technology (IT) space. If you run a small business that sells web hosting or software as a service (SaaS) solutions, your customers might have been impacted by CrowdStrike — and your business might be on the hook for damages.

“Even the smallest of IT consultants, including SaaS and web host providers, may be at risk due to the implementation of the Falcon software update,” Bernstein said. “The update might have impacted their clients and other dependent client businesses. At the end of the day, there will likely be a large ripple effect throughout the IT and digital world.”

3. Get professional liability insurance for your small business

Whether or not your business was hurt by the CrowdStrike outage, high-profile incidents like this are a good reminder of the value of small business insurance. The best small business insurance policies can provide coverage for worst-case scenarios like CrowdStrike, even if the damages weren’t “your fault.”

“A Professional Liability policy will usually address the legal liability arising out of covered wrongful acts alleged by a third party, for which the insured may be liable,” according to Bernstein. “This can be the small business’s best defense in this type of situation. For first party claims, a Network Security or Cyber Liability policy with an insuring clause for Network or System Failure may help with first party financial losses.”

Bottom line

If you’re breathing a sigh of relief after the CrowdStrike outage, use this time to protect your small business from future problems. Getting the right small business insurance policy, with adequate coverage for professional liability, business income loss, and other risks, can keep your business running through even the biggest moments of crisis — and keep your business bank account from running out of money.

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Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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