Bartering as a Second Income

Bartering as a Second Income

Topics Espoused in Bartering as a 2nd Income:

Bartering as a Second Income
  1. Bartering – as Defined by the IRS
  2. More On Exchanging Money
  3. A Second Income Is Possible
  4. Bartering Creates The Income
  5. The Internet and Barter Clubs
  6. Barter Could Enhance Your Life

Bartering as a 2nd Income

Bartering as a second income is a neat concept as far as I’m concerned. You and I can both agree once upon a time people bartered way more than they made purchases.

Bartering is defined in the dictionary as, “trading goods or services without the exchange of money”.

The important part of the definition is, “without the exchange of money”.

Just so you are aware there are some hucksters in the world who claim bartering is income tax free. They propound information making you think the IRS doesn’t recognize bartering as a taxable event. Not true. Not true.

You can believe if an event like your death is taxable to the IRS, there ain’t much that’s tax free.

In fact, the IRS has an opinion on every act of commerce. You can read their opinion in the Publications they publish. I will get into that in a moment. You can earn a second income from bartering just please don’t fall for the totally incorrect and misleading narrative saying barter is a tax free event.

Note: Before we go any further please be advised everything in this article is for information only. Nothing is intended to be tax or legal advice. Always, and I mean always, consult with knowledgeable, competent professionals.

Bartering – At least as the IRS Defines It

This definition was copied from IRS Publication 525 (2019) page 20. You can download your very own personal copy simply by going to irs.gov. It’s that easy. By the way, this publication is 37 pages long and covers everything from barter to life insurance.

Here’s their definition:

“Bartering is an exchange of property or serv-ices.”

What They Say About Barter Income:

“You must include in your income, at the time received, the FMV of property or services you receive in bartering. If you exchange serv-ices with another person and you both have agreed ahead of time on the value of the serv-ices, that value will be accepted as FMV unless the value can be shown to be otherwise.”

FMV stands for Fair Market Value. I did not copy any of the examples they listed. My thought theology was anyone interested enough in bartering would download a copy of this publication and read the pertinent section. It happens to be the first topic covered under the Section Heading: Miscellaneous Income.

Enough of the IRS. I thought it was important enough to tell you what they say. So you don’t get caught up in one of the many “barter” scams floating around the web. Now onto the meat of the topic.  

We’re Not Done With Exchanging Money

Without exchanging money means you did not receive nor did you pay money. This kind of exchange can be very profitable if you work it right. One more time. Working it right DOES NOT mean tax avoidance. Enough said.

Bartering is what the old horse trading was about. One guy trades another guy his horse for something he wants. It is an even exchange meaning both recognize they receive value for their traded item(s).

It could work out just fine in other scenarios too. For example, party 1 trades a horse and party 2 trades mechanical work on the first party’s tractor. As long as the parties involved feel like they got something of equal or better value.

On the other hand, there may be trouble if one of the parties involved thinks he received an item of lesser value. But that’s not what this article was intended to examine. So we’re going to move on and forget about the guy who might think he got “barter burned”.

Moving along, bartering is as old as man. Or at least some men, namely, the guy writing this article. Hehehehehe, I do enjoy poking fun at myself.

I can’t fathom what Neanderthals traded but you know it was something. Maybe a dinosaur leg for an elephant tusk. Or maybe it was clubs, and not of the golf kind. Who knows, right?

A Second Income Is Always Possible

Given this is true, it is possible to create a second income from bartering. The reason is simple. Not everybody wants, or knows how, to barter. They would rather pay cash for the desired item.

You can see proof of that every day. Simply walk into any retail outlet and what do you see but shelves stocked with goods. People put those goods into carts and go to something called a cash register. The clerk scans the items and the person pays. Unless there’s more items behind the milk. Then obviously the clerk finishes scanning the rest of the items first. And then the person pays with either cash or card, or possibly writes a check.

That’s not very likely this day and age but I’m getting sidetracked again. My point is no one stands there and tries to barter a figurine they created for that gallon of milk. Because that won’t work and we know it.

I’m sure you’ll recognize another scenario I call “Unintended Bartering”. Unintended bartering occurs when party a has to give items to party b to pay off a debt. And that’s kind of like creating a second income. Okay, no it’s not. But we had fun, right?

I’ll bet you are wondering, “Where does the second income enter the picture?”. After all, you too take your cart to the checkout line and pay.

So before you have to say, “Show me the money!”, I’ll just go ahead and do that very thing.

The Art of Bartering Creates The Income

You can massage your bartering skills in any number of ways but this article will consider only two of them. First, you barter for an item and a customer or friend wants the item but doesn’t want to barter.

You now are faced with a choice. Keep it or sell it. Being the astute business person you are, you sell it for its fair market value. Its fair market value, as you know, is above its barter value.

You have just created a win-win situation for you and your customer. The customer received the product and you received cash. And cash is still a good commodity to have in your possession no matter what the circumstances.

If you are a business owner, bartering lets you stretch your cash. Instead of paying for advertising, for example, you barter one or more of your products in return for the advertising.

These may seem like simple everyday activities that anyone can do. Not true. We’ve been groomed since we were children to put the items in the cart and queue at the checkout stand.

You have to be willing to step out of the mold and experiment. If you don’t try you won’t know if you can, or even want, to do it. What can it hurt? How much can it cost? The answer is nothing if you find it unpleasant or not worth your time.

Subsequently, you just move on and forget about it if you didn’t like it.

Barter Clubs are Even on The Internet

In this day and age, the Internet seems to be a great source for barter activity. There are online barter clubs just as there are offline barter clubs. While the nitty gritty details may be different, the principle is the same.

Bartering, by definition, does not change because the medium changes. It remains the trading of goods and/or services without the exchange of money. More often than not that is a good point for all barterers.

In my humble opinion, the without the exchange of money part deserves a bit more clarification.

Allow me to elucidate, it means money isn’t the main item exchanged in the transaction. Money could still very well be a part, albeit a small part, of the transaction.

On the other side of the coin money can also be a bigger part of the transaction too. As long as it isn’t the only item, offered up by one of the parties involved. Or even the majority of the value on one of the barterer’s part.

Because then it becomes a purchase. And that is something I am sure everyone who reads this article is quite familiar with.

Bartering Could Enhance Your or Someone Else’s Life

The beauty of being known as a person who will barter is it opens doors that otherwise may have remained closed. You see, a person who might prefer barter but is too timid to say so, will now open up to you.

This increases your opportunities to further develop your bartering skills into a healthy second income. Above all that is a good thing. No one I know would walk away from making extra money.

Moreover making money is certainly important as it buys us food, shelter and goodies. Barter may be the key that takes the shy person out of their shell and lets them blossom.

And I don’t actually know that for sure. But I’d bet my wife’s vacuum cleaner that it has the possibility to be the fuel they need to be more socially adept.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

**DISCLAIMER**

Senior Outreach Ministries makes no warranty, representation, or guarantee regarding the information contained herein or the suitability of any products and/or services for any particular purpose. Any performance specifications are believed to be reliable but are not verified. Buyer must conduct and complete all performance and other testing of the products and/or services, alone and together with, or installed in, any end-products and/or services. Buyer shall not rely on any data and performance specifications or parameters provided by Senior Outreach Ministries. It is the Buyer’s responsibility to independently determine suitability of any products and/or services and to test and verify the same. Senior Outreach Ministries does not assume any liability whatsoever arising out of the application or use of any product or service. And in the name of full disclosure one should assume any ad they click on or purchase they make will provide us with a small fee. This is not added to the purchase price of any item or service you purchase. It is however one of the ways we fund the help we provide to seniors and their caregivers. Any recipients of our help as well as our staff thank you and appreciate you greatly.

Senior Outreach Ministries makes no warranty, representation, or guarantee regarding the information contained herein or the suitability of any products and/or services for any particular purpose. Any performance specifications are believed to be reliable but are not verified. Buyer must conduct and complete all performance and other testing of the products and/or services, alone and together with, or installed in, any end-products and/or services. Buyer shall not rely on any data and performance specifications or parameters provided by Senior Outreach Ministries. It is the Buyer’s responsibility to independently determine suitability of any products and/or services and to test and verify the same. Senior Outreach Ministries does not assume any liability whatsoever arising out of the application or use of any product or service. And in the name of full disclosure one should assume any ad they click on or purchase they make will provide us with a small fee. This is not added to the purchase price of any item or service you purchase. It is however one of the ways we fund the help we provide to seniors and their caregivers. Any recipients of our help as well as our staff thank you and appreciate you greatly.

The Rainy Day Dime

The Rainy Day Dime

The rainy day dime isn’t a fancy theory that just got invented by a financial guru. It has been with us ever since humans figured out they must save for their retirement.

While that may be the case, I bet you never heard of the rainy day dime. That’s because it is a twist on one of my mother’s oft repeated pieces of advice. She would always tell me to save something for a rainy day.

The Rainy Day Dime, Saving Money for Retirement, Saving for retirement

She was telling me that some day I would be old. And trying to help me understand that if I didn’t have any money saved I’d regret it.The saving part in this process is painful for far too many of us.

And it turns out she was right. I needed to put money away for my stretch in the old age cycle of life or I’ll be SOL.

She was also big on acronyms.

Therefore, a catchy term first of all gets attention. Attention usually results in reading about it. Reading about it usually results in action taken.

Unfortunately for me I didn’t heed her advice until I turned 40. So apparently I was a slow learner. Boiled down to its most basic property the rainy day dime is me and you saving ten percent of every dollar we make.

That’s it. End of story. Unless of course you want to learn what is the secret sauce underpinning your dime.

Like all good programs secret sauce must be an ingredient, or why do it? And, it is the secret sauce that turns the rainy day dime into a huge rain barrel of dollars. And above all else, that’s a really good thing.

A Rainy Dime is How Secret Sauce is Made?

The financial experts tell us to start at an as early as possible age. And not to wait until we are 40 or 50 or later. So, this article is an attempt to spur you into saving something at an early as possible age. If you are 20, start now. For example, if you are 30 you should have a ten year savings track record by now. And if you are 40 you should have a 20 year track record.

And no, I won’t keep going up by ten year increments. I’m sure you get the picture. Besides you can do that in your own mind without any help from me.
The title of this article is, “The Rainy Day Dime”.

All you’ve heard about so far is the rainy day. Where’s the dime, right?

The dime actually refers to the number 10 as expressed as a percentage as in 10%. That may be cute but at the same time it is also dead serious. Take a minute to think about it.

For example, say you put away a dime from every dollar you earned each and every month. To make the math easy let’s say you earned $2000 a month. If you multiply $2000 by 10% it means you put away $200 every month.

Let’s say that $200 never earned a penny in interest and you started when you were 20. Quick math tells me you’d have $108000 in your savings account at the age of 65. Now imagine that number. Moreover, can you visualize that number?

You didn’t do a darned thing except save and it grew like the weeds in your garden. Because most of us want to have a bigger nest egg we do not place our money in non-interest bearing accounts. Why would we do something as dumb as putting money in non-interest bearing accounts, correct?
Therefore, we make an attempt to find the best interest bearing account for our money.

This article isn’t meant to zero in on any particular account. It is meant to add the magic sauce to the already magic rainy day dime.

So, Compound Interest Makes Secret Sauce?

That sauce is called compound interest. If you do not know what compound interest is go to your favorite search engine and perform a bit of research. It is truly The 8th Wonder of The World.

Compounding happens on an annual basis with most savings accounts. Mathematically speaking if you place $1000 into your account and it is paying 8% at the end of the year your account balance will be $1080 ($1000 X 8% = $80. $1000+ $80 = $1080).

In the second year and beyond the compounding factor, in this case the interest rate, is applied against the balance. It looks like this: $1080 X 8% = $86.40. The $86.40 is added to the $1080 giving you a new balance of$1166.40. This happens year after year after year.

I’ll let you do the math for the next 43 years in this scenario. Or, use one of the compounding formulas on the Internet. Either way you will experience what is commonly called the WOW factor.

Some Final Thoughts

You know, when you see the balance at the end of the 45 year time period you say, or shout, WOW! Of course not all of us have a time line of 45 years. If you start when you are 40, you only have 25 years.

This means you have to increase your deposit amount from a dime to thirty or forty cents in order to enjoy the WOW factor. Regardless, you can still call that amount your rainy day dime.

So, get out there and start saving for retirement. Or at least a rainy day.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

**DISCLAIMER**

Senior Outreach Ministries makes no warranty, representation, or guarantee regarding the information contained herein or the suitability of any products and/or services for any particular purpose. Any performance specifications are believed to be reliable but are not verified. Buyer must conduct and complete all performance and other testing of the products and/or services, alone and together with, or installed in, any end-products and/or services. Buyer shall not rely on any data and performance specifications or parameters provided by Senior Outreach Ministries. It is the Buyer’s responsibility to independently determine suitability of any products and/or services and to test and verify the same. Senior Outreach Ministries does not assume any liability whatsoever arising out of the application or use of any product or service. And in the name of full disclosure one should assume any ad they click on or purchase they make will provide us with a small fee. This is not added to the purchase price of any item or service you purchase. It is however one of the ways we fund the help we provide to seniors and their caregivers. Any recipients of our help as well as our staff thank you and appreciate you greatly.

Senior Outreach Ministries makes no warranty, representation, or guarantee regarding the information contained herein or the suitability of any products and/or services for any particular purpose. Any performance specifications are believed to be reliable but are not verified. Buyer must conduct and complete all performance and other testing of the products and/or services, alone and together with, or installed in, any end-products and/or services. Buyer shall not rely on any data and performance specifications or parameters provided by Senior Outreach Ministries. It is the Buyer’s responsibility to independently determine suitability of any products and/or services and to test and verify the same. Senior Outreach Ministries does not assume any liability whatsoever arising out of the application or use of any product or service. And in the name of full disclosure one should assume any ad they click on or purchase they make will provide us with a small fee. This is not added to the purchase price of any item or service you purchase. It is however one of the ways we fund the help we provide to seniors and their caregivers. Any recipients of our help as well as our staff thank you and appreciate you greatly.

A Dominated Fund and Pre-senes

A Dominated Fund and Pre-Senes

A Dominated Fund is something you might not be very familiar with. Chances are neither is the term “Pre-Sene”. The aim of this article is to take care of both of those.

You may know from reading our definition for Pre-Sene you can tell people in this age group are most likely still working. Very few are a member of the FIRE – financial independence retire early – brigade. Therefore the Pre-Sene probably has a 401(k), IRA or some other retirement program.

Since very few defined benefit programs remain in the work place that means the Pre-sene is contributing to a defined contribution program like the aforementioned. Besides knowing how a dominated fund is defined it is also imperative to know the percent of your retirement account in dominated funds. The easiest way to learn is to look at your retirement plan’s schedule.

The second easiest way is to get your plan’s investment schedule from your HR department. Before you launch into research here is the definition of a dominated fund: A dominated fund is a fund that no reasonable investor would invest in given that plan’s other investment offerings. This is according to one financial author.

Another financial author and professor defines a dominated fund as: An asset A is dominated if there is another asset B such that under “any” realization of the financial future asset B will provide a “larger total return” than asset A.

Let’s Try a Different Dominated Fund Explanation

In other words if the fund containing the bulk of your dollar bills is dominated by another fund (having a higher return and lower fees) in the same family your contributed dollars should be in that fund. Now you can start doing your research.

It is no secret fund managers put those dollars in dominated funds because these funds have higher fees. Subsequently, higher fees means higher commission dollars for the fund manager. And, to add insult to injury, the dominated fund may not receive any, or very little, personal attention. Personal attention is called management in the investing world.

And Now For a Example

An excellent example, as reported on some of the largest financial websites, is indexed mutual funds that have expense ratios (or other charges) that are not at the market minimum. As one of the reporting authors said —

“You might not think that there would be many such funds, but they are common as weeds.”

A quick summary. You absolutely must know how your dollars are being invested.

Because the how is the key to how much in fees and expenses you are paying. One source made the bold statement that an investor’s fee structure in one of these funds could cost the investor a minimum of $200,000.

That 200K is your money being dribbled out of your pocket and into the pocket of the fund manager. I don’t know if you want to pay that much and lose that amount’s ability to pay you in your retirement. If you do, keep doing what you are doing. After all, it is your money.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

Consumer Price Index and Inflation

Consumer Price Index and Inflation

The Consumer Price Index (CPI) and inflation are directly related. Although, the formula for calculating the inflation rate is relatively simple the truth is nobody gives a good gosh darn.

And maybe we shouldn’t given it is a government calculated number and the government actually tells us what it is for the year every year. In fact, watch any business show on television and you will hear the talking heads spew forth about inflation and the CPI.

Consumer Price Index and Inflation

It is helpful to know the agency responsible for computing the CPI and informing the general population of that number is the Bureau of Labor Statistics or BLS for short. They actually survey thousands of prices all over the country and formulaically compute the Consumer Price Index and the inflation rate.

For any index to be worth its salt it has to have a base rate to be used for comparison purposes. This means somebody or some agency sets that base. With the CPI it is the BLS and currently the base year for comparison purposes is 1984.

The truth is it wasn’t exactly 1984. What the government math wizards did was use the numbers from 1982 -1984 took an average and called 1984 the year the CPI was 100. Just like magic they had a year and a number.

What Does This Mean to Me?

What does all this have to do with me you might be asking. Well, maybe a lot and maybe nothing. I will say if you are a senior about to retire or are already retired this number is important.

You see, inflation eats away at your buying power. If something cost one dollar in the base year, 1984, but costs 1.98 today, inflation has eaten ninety eight cents more out of your nest egg.

It could get more complicated but why complicate a simple formula I’ll show you in a minute so you can break even with inflation. As seniors we face medical bills, taxeshospital bills. All the same bills pre-senes and younger people face too.

But what we don’t face is longevity to combat this bully called inflation. It simply eats away our money and we seemingly can’t shoo away the monster.
Year after year it nips at our heels.

Breaking Even With Inflation

Fortunately there is an easy to use formula to help us calculate the investment rate of return we need to “break even” with inflation. Expressed as a fraction it looks like:

Inflation Rate / 1 – Tax Rate

Obviously we need to know the inflation rate and our tax rate. I will assume the inflation rate is 5% and the tax rate (bracket) is 30%. Our equation looks like:

.05 / 1 – .3

Or

.05 / .70

Dividing we get this number: 7.14

7.14 expressed as a percent is 7.14 percent or .0714. This is the return we would need to receive to stay even with a 5% inflation rate in a 30% tax bracket.

We could have more fun with the Consumer Price Index and inflation but this appears to be enough fun for this article. Keep this formula in mind as you plan your retirement.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

An Important Social Security Factoid

An Important Social Security Factoid

The important social security factoid is: Actuarially Neutral (AN).

I can hear you asking, “What in the world is actuarially neutral ?” Good question. Let me answer it.

All AN boils down to is the simple fact the program is indifferent to whether people tend to claim benefits before full retirement age or after full retirement age. So, you see, on average the increase people receive from claiming later should be roughly offset by the fact they’ll receive fewer monthly payments.

An Important Social Security Factoid, Claiming Social Security

Stated another way, if a senior citizen starts his SS monthly check when he is 62 he is 8 years ahead of the person who starts at age 70. He will get less in his monthly check than if he waits until he turns 70. Because, actuarially speaking, he starts drawing his checks earlier. I bet you can guess what that means. You guessed right, it means a lower amount.

No One Alive Knows That

Obviously the kicker in this scheme is nobody knows when they will die. The person taking his monthly check could outlive the person waiting till 70. So, the larger check at 70 won’t mean a thing in the overall picture.

The government bean counters wanted to be certain everyone would receive as close to the same amount as possible over their lifetime. Hence they created a sliding scale with the first eligible age to collect being 62.

If both parties live to be 80 years old, AN tells us both would have received the same amount over the number of years they collected their Social Security. Of course the numbers will be slightly different based on income factors. But, in theory they will be close.

This isn’t a tome on factors to consider in enrolling into the social security program. It’s merely a brief explanation on the underlying thought/principle that went into constructing the payout schedule. For more factors you may also want to read: Factors to Consider When Claiming Social Security.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

703 Retirement Plan

703 Retirement Plan

You may have received emails or seen ads talking about the 703 retirement plan. If you are like me, when you saw that weird looking retirement plan you wondered what the heck is it all about.

703 Retirement Plan, Saving for Retirement, Retirement Topics

As it turns out the author of the email or ad is using a clever twist of words to entice you to subscribe to a particular email newsletter. They can’t just say, hey, subscribe to my newsletter for $XXX a year because nobody would sign up. So, they use a bit of intrigue/curiosity.

The 703 plan is what the real investment world calls a Dividend Re-Investment Plan or DRIP. It has several moving parts.

The first is you must own a stock that allows you to reinvest the dividend into buying more shares instead of taking the dividend in cash. For example fictitious company JXN allows you to DRIP.

They pay a quarterly dividend of $1 per share. And you own 200 shares. Rather than taking the $200 in cash you use those dollars to buy more shares of JXN. As you might guess more shares means you have increased your holding. Plus your dividend will be larger next quarter because you have more shares.

And now for the second moving part. Most brokerage companies charge a fee to reinvest your dividend. Oops, you’ve just decreased the number of shares your $200 will buy. No worries. The 703 plan shows you how to bypass your broker and save the fee and/or commission charge.

Semi-Related Investment Info

All you have to do is subscribe to the newsletter being offered and you’ll learn the secret bypass method. Well, I say, simply click on this link or the title and download the information without subscribing to anything. I titled it, “The D.R.I.P.”.

And to bolster your investment library click this link, or the title, to get a second primer, “And Capital Appreciation Too”. Both are 100% free!

You are welcome to subscribe to our newsletter by >>CLICKING HERE<< but you don’t have to. Simply click the links in the above paragraphs and you’ll get the reports. It’s that easy. We think you should put that information to use whether you’re a member we email our newsletter twice a month or not.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.