Back in September of 2012, the Kaiser Foundation reported that the average employer sponsored health insurance premium was $15,475 for a family of four. That’s an average of nearly $1,300 per month, or roughly the size of a modest house payment. Private plans are at least that high.
Then Obamacare was rolled out back in October, promising to provide “affordable health insurance for all Americans” – but now we already know better. Specific numbers are hard to come by as the program is being rolled out, but anecdotal reports are indicating that premiums will only get higher with the new plan.
Everybody wants health insurance on the cheap, but let’s be honest – it’s not gonna happen, at least not in our lifetimes. That calls for action on our parts, as in creating a strategy which will enable us to afford health insurance premiums that will eventually be lower than our house payments, if they’re not already.
My proposal is simple: Create a second income or business to fund your health insurance premium. Not easy, I’ll concede, but tough times call for tough choices – and these are most definately tough times.
Let’s get into the specifics.
Second job or side business?
Should you decide to create an income specifically dedicated to pay your health insurance premium, you have to make a decision – second job or side business? Each has its own advantages and drawbacks.
A second job will provide the most immediate income. Unlike a side business, a second job does not require a ramp-up period in order to build an income. And if you can get a second job with steady hours, you will have a totally predictable revenue stream.
The downside of a second job is that most will require you to “keep hours”, which means that you will need to work away from home and carry a work schedule which, in combination with your first job, will leave little time for anything else.
A side business will provide a much more flexible schedule, as well as the potential to earn far more money. But that ramp-up period getting it up and running can be a real dogfight.
Which you choose will depend on your skills and abilities. If you have the ability to get a part-time job that will pay $20 or $30 per hour (yes, they’re out there), the choice will be easy. If you have skills that lend themselves to self-employment, and the willingness and ability to market yourself, a side business will be the logical choice.
If you’re not sure exactly which route to take, or if you even have the capability to do either, you’ll need to spend some time doing some self-analysis. Here are five steps you can take to help you do that…
1. Think about what you like to do
This is the logical first consideration. What you like to do often represents your greatest income earning potential. Because you like doing it, it comes easily to you, and offers the greatest potential to convert it into an income.
If you are already doing that kind of work on your primary job, you’re ahead of the game. Let’s say that you are an accountant by day; you might be able to convert that skill into a second job working for another company. Or you might be able to start your own accounting and bookkeeping company, selling your services directly to small businesses.
Once you define what it is you want to do, the rest is just a matter of working out the details.
2. Inventory your skills and experiences
If you want to do some kind of work that is completely different from what you’re doing on your primary job, you should inventory your skills and experiences. Is there a skill that you’re particularly good at, or a work experience you have had in the past that you really enjoyed? It can be the starting point for your second income.
Let’s say that you’re a teacher on your main job, but you really enjoy doing graphic arts and you’re pretty good at it. You might be able to drum up some business by placing a free ad on Craigslist, and cold calling small local businesses to market your services. If you find a few takers, you’ll be on your way.
3. Do some research
Whatever it is that you choose, even if it’s an extension of the work you are currently doing, be sure to do some research to establish the fact that there is a market for what you’re trying to offer. There are a lot of business ideas that sound good on paper, but don’t necessarily work in the real world.
You can of course search the web to determine the need for your skill, but it will be better if you can talk to people who are already doing what it is you plan to do. If you go this route, be sure that you talk with several people. Some may be having bad luck with it and will give negative reports. But you may find others who will tell you a much more optimistic story.
4. Test the waters
This step is mostly for a side business. Large companies will spend time and money test running a marketing plan before they roll it out in full. You should do the same with your side business. Test your product or service on a relatively small prospective client base.
The idea is to a) test the viability of the market for what it is you want to do, and b) to perfect your business model on a small market segment before ramping it up to a wider clientele.
5. Once you hatch a workable idea, run with it and don‘t look back
When you’re starting a business, whether it is a side business or a full-time venture, you have to walk before you can run, and that’s what this step is all about. Once you have confirmed that a solid market exists, and that your business model can fill that niche, you can grow your business as large as you need to. Your test run will give you the confidence, and once you have it, you need to run with it.
Synchronizing your second income with your health insurance
If you’re getting a sense that creating a second income or business to fund your health insurance premium isn’t easy, you’re absolutely right. But one thing that will be easy is defining your success. Since you are earmarking the second income to cover your health insurance premium, success will be achieved at the point where that income is sufficient to cover the entire cost of the premium. If your premium is $1,250 per month, or $15,000 per year, the goal will be reached once you reach that income level.
Once you reach that point, it will be absolutely critical that you use the money for the purpose intended. Health insurance premiums have become enormous, but if you can handle them through a dedicated second income source, that will free up the rest of the money in your budget for everything else you want to do.
There are no easy solutions when it comes to health insurance anymore, and not much help is coming from the top either. That means we have to take matters into your own hands, and find our own best solution.
What do you think about the possibility of creating a second income or business to fund your health insurance premium?
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