Breaking free from real estate ball and chain

More owners trading down, cashing out to make ends meet

Supplemental income doesn’t always come in the form of a second job. These days it can mean living off your home equity — literally.

For example, one reader who recently lost his mid-management position quickly tired of the 45-minute commute to a construction job that is paying him an hourly wage. He decided to cut expenses and create more money to live on by selling his home, paying off some debts, sticking the proceeds in a certificate of deposit at the bank, and renting another place.

That’s supplemental income — the hard way.

By the time the man weighs the loss of his mortgage interest tax deduction with the tax he will have to pay on the interest from his certificate of deposit, the term "supplemental income" may be a misnomer.