8 MIN READ
Here’s How I Make a Good Living Without Working Full Time
Maybe you hate full-time employment.
Or, like me, maybe you find jobs interesting for a few months at most, and then you're ready to do something else.
But hey, you still have to pay the bills, right?
So can you survive without a full-time job, or even with no job at all? You can if you develop enough other sources of income.
But it's not that simple. You also have to know how to handle the ups and downs of life without a weekly or monthly paycheck.
I've worked full time for only a few months in my life (I'm 52), so naturally I've had to learn a few strategies for getting by without a regular paycheck.
Here's how I manage to avoid jobs most of the time and still pay the bills. Of course, your results may vary, but here is a basic outline for how to live without a job:
1. Control Your Expenses
If you want to avoid jobs, it helps to be a bit frugal.
But looking for ways to spend less doesn't have to mean sacrificing anything important. It can be a way to have more of what really matters.
So if you want a richer lifestyle through frugality, watch how you spend your money.
And when it comes to living without a regular job, you don't always have to think in terms of pinching pennies.
You just have to control your expenses so you spend less than you make. If your income doubles and you spend 50% more, you're fine, right?
When my wife and I had a higher income, we had a house cleaner, but when our income dropped, we eliminated that luxury.
On the other hand, even when we made six figures, we had a small house that was cheap to heat and maintain, because some expenses are more difficult to eliminate quickly. Here's the important rule:
Keep your fixed expenses (those you can't reduce or eliminate quickly) low, and you'll be able to weather the ups and downs of irregular income.
2. Diversify Your Income
It helps to have many sources of income, so the loss of any one of them won't send you scurrying for a job. You might write for content websites, sell used books, rent out rooms in your house and make money collecting returnable cans and bottles.
Last year, like the year before, my wife and I had more than 20 sources of income, and not one of them accounted for more than 25% of our total income. Since we controlled expenses and lived on about 75% of our income, we could have lost any one income source and we would still have been OK.
As I explained in my post on income diversification, you should also aim to diversify the types of income you have coming in.
Here's an example of some of the things we've done in recent years in each of the following four types or categories:
1. Business (including freelancing): I make a little money from my websites, I write for blogs, and we both have some royalty income from books.
2. Investments: We lend money to house-flippers, invest in Lending Club loans, have rental income, and we accidentally flipped a condo for a profit. We also made money twice in three years recently by selling our home and buying a cheaper one.
4. Temporary Employment (more on this in a moment): My wife occasionally finds work teaching adult education classes, and I briefly had a few jobs four years ago.
You can find many more ways to make money here on The Penny Hoarder, including 103 ways to make money at home (yes, I'm writing this at home in pajamas).
Of course, unless you have a “regular” and successful business (which sounds like a job to me), all of the examples given so far provide somewhat unpredictable income.
That's why you should…
3. Always Have Money in the Bank
If you have enough money saved, ups and downs in income are not as big a deal.
A few years back, Google search algorithm changes caused our the income from our websites to drop in half in one day, and it continued to slide from more than $10,000 per month to about $200 per month now.
Honestly, I was stressed about that “little” change in our lives. But at least we had saved money during the good times.
You have to decide how much is enough for you, but I wouldn't feel comfortable if we didn't have enough savings to pay the bills for a year or two.
And even with money in the bank, my wife and I don't wait for this or that income stream to dry up before acting. Instead we…
4. Keep Looking for New Sources of Income
I renovated and rented out the other half of a duplex we bought (we lived in the other half). It generated cash flow of about $400 per month.
Now, I'm considering discounted closed-end municipal bond funds as a way to make 6% or better on some other investment money.
You don't need to get too stressed out about it, but you should keep your eyes open for ways to add to your income sources.
In fact, while this article is about how to live without a job, there are times when you might want to consider getting a paycheck for a while. That's why I will sometimes…
5. Consider “Employment Projects”
I like to consider jobs as temporary projects. Apart from when you just have no other way to pay the bills, you can use them in two ways:
1. To generate low-stress income while you figure things out.
2. To prepare for future income possibilities.
When our business income was falling like a rock, I freaked out a bit, so I worked as an electric tram driver and later as a security guard. I even worked full time for two weeks at one point.
I discovered that working and having even a small paycheck helped me relax while I figured out what to do next.
It was even fun… but then it got old after a couple months. I quit those jobs and began freelance writing and making money in other ways.
Use jobs to settle your mind and to provide temporary income while you figure out how to make money without a job.
That and the other skills I learned later helped me flip a condo, fix our next home (which we sold for a profit) and renovate our duplex rental unit. We also make 10% annual interest lending money to the investor.
Use jobs as a way to learn valuable skills and to make contacts. You can also use a job as training to start your own business.
However you use your jobs, if you do it right, they will be temporary.
6. Have Only Good Debt
“Bad debt” is money you owe for consumer items or anything that doesn't improve your financial situation.
“Good debt” is income-producing or money-saving debt, such as borrowing for education that improves your ability to make money, borrowing for rental real estate, and even borrowing for your own home — assuming doing so actually cuts your costs versus renting.
The only debt I have at the moment is about $10,000 on a couple of credit cards, but that's actually good debt. I'm in the zero-interest teaser period, and the money is parked in bank accounts that pay 5% annual interest. Hey, it will only add about $500 to our income this year, but every little bit helps.
Aim to have only good debt if you want to live without a regular job.
7. Plan for Changes
Sometimes you know you'll be losing income, like when you plan to tell the boss goodbye. See my guide to how to quit your job to prepare for that.
But also prepare for unexpected losses of income. For example, if we move and sell our duplex, I have a list of potential ways to replace the income.
If I can't keep up with my freelance writing (I’m tired of staring at the computer — and that income is down 50% already), I'll dig out my plans for making money in other ways.
Just about any income stream can slow or dry up unexpectedly, so make contingency plans.
What will you do if you get injured and can't work for a while? What will you do if this or that source of income disappears? What if you sell an investment — where will you put the money to generate income?
If you ask yourself the right questions and make a few contingency plans, you'll have less stress when life happens.
Do that and use the rest of the strategies here, and you can ride the ups and downs of income without ever resorting to a 9-to-5 position.
Steve Gillman is the author of “101 Weird Ways to Make Money” and creator of EveryWayToMakeMoney.com. He's been a repo-man, walking stick carver, search engine evaluator, house flipper, tram driver, process server, mock juror, and roulette croupier, but of more than 100 ways he has made money, writing is his favorite (so far).