What is the Sharing Economy?
The sharing economy refers to our ability to "rent out" our assets, which include our homes, cars, skills and time. The professional services firm PWC estimates that about one in five U.S. adults have been involved in the sharing economy as either a buyer or seller. Many of the participants are over the age of 55. PWC also calculates that the size of the sharing economy is approximately $15 billion currently and could grow to $335 billion by 2025. This means that a large number of retirees will be able to enhance their retirement income this way.
Popular Services in the Sharing Economy
There are a number of well-known companies that allow people to become engaged in the sharing economy. Here are a few examples:
Airbnb - They operate a website that allows you to host guests in your home. You can rent out a spare room or your entire home. About 25 percent of the hosts in the United States are over the age of 50. Many of them are empty-nesters with a spare bedroom and a need for extra income. Some have found that it has enabled them to stay in their homes. The typical host earns about $7,500 a year. You do have to be careful, however, when you open your home to strangers. Some people prefer to do it only when they are away. Occasionally, people have returned to large messes or even significant damage to their home ... although this is not the norm. The company says that this happens rarely and they provide liability insurance and damage coverage of up to $1 million.
Uber - This is a ride sharing service. About 25 percent of the drivers are over the age of 50. You must have a valid driver's license, car insurance, a clear driving record and be able to pass a background check. You work when you want. You can earn $18 to $24 an hour. Drivers do not carry cash, which reduces their risk.
DogVacay - If you do not want to open your home to people, you may be more willing to host dogs, instead. There are over 20,000 dog hosts in the U.S. and Canada and about one-third are over the age of 50. The typical host earns about $1,000 a month, although some in rural areas can earn much more. Hosts can choose the dogs they are willing to accept. The company provides professional and liability insurance. Payments are handled by the company, so hosts are not responsible for doing the collecting.
Fiverr - This company makes it easy for you to sell your professional or creative services, including graphic design and voice-overs. Clients are charged at least $5 per job and the company keeps $1. Obviously this means you only want to start out offering your services for tasks you can complete in 15 to 20 minutes. However, the prices go up for custom orders and other extra services. You need to be able to provide a service that is in demand and that can be performed over the internet. I have known people who turned to Fiverr to get help with a variety of projects, including designs for book covers, ghost written articles and editing.
TaskRabbit - Taskers, as they are called, sell their time to others who need little jobs performed for them. You earn $35 a hour, less 15 percent which the company keeps, to do anything from yard work, shopping, running errands, hanging pictures and assisting people in similar ways. The taskers must be able to pass an identity and background check, since they are going into the private homes of the clients.
RelayRides - Do you have a car that you do not drive very often? You can rent it out and earn extra cash. The vehicle must have less than 100,000 miles on it and be worth less than $75,000. The average active owner earns about $475 a month. The company provides $1 million in insurance to cover damage to the vehicle.
Vayable - Would you like to be a tour guide in your city? This company matches tourists and local guides. Retirees often have the time to give tours and frequently they are also the most knowledgeable about their community. The company screens all guides and the meetings take place in public settings, which reduces your risk. This can be a fun way to earn a little extra money, meet new people and have fun. Guides set their own fee and the company keeps 15 percent. Tourists also pay a 3 percent commission to the company.
Other Ways to Participate in the Sharing Economy
In addition to the above companies and similar ones, you may also participate in the sharing economy on your own. If you decide to do this, you may want to only offer your services to people you know or who are recommended to you by reliable associates. In addition, check with your city or county to see if you are required to have a license to provide any of these services. You may also want to talk to your insurance agent about your need for additional liability insurance.
Below is a list of services you could consider:
Home staging for Realtors and home sellers
Caring for exotic pets ... iguanas, parrots, snakes, etc.
Renting out your garage or basement for storage
Assisting the elderly in completing medical insurance claim forms
Running errands or driving for elderly or disabled neighbors
You may also have other talents or know of services that you could perform, such as taking family or wedding photographs, party planning, babysitting or assisting people in similar ways.
One woman I know rents out two bedrooms in her home to two women who have long commutes and just need an affordable place close to their job where they can sleep on Monday through Thursday nights. The women eat all their meals out; my friend simply provides them each with a bed and access to a bathroom. She earns a little extra money and her house guests have a place to stay that is convenient and less expensive than a hotel.
Whatever you decide to do to earn extra money in the sharing economy, it can make a significant difference in your financial situation after retirement.
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