Unfuck Your Finances...By Earning More Money
Or, "what is a side hustle?"
I’ve written a lot about personal finance and so far it’s mostly focused on basics within our control - budget, spend less, save some money, invest some money. All of that is important. All of that is necessary. But it’s also all somewhat constrained.
Unless you happen to find the next Apple, your investment returns are probably going to be pretty close to what the overall market does. And that’s fine - it’s probably the simplest path to significant wealth available to us - but it also doesn’t happen overnight. It’s getting rich slowly.
Paying attention to your spending is critical. Duh. You don’t want to spend more than you earn. But there’s also a cap in how much you can really benefit from this. You still need a place to live, food to eat, clothes to wear, etc. You can’t reduce spending indefinitely. Even if you’re willing to do some crazy stuff like live in a van and shower at the gym in order to save money, there’s still a point at which you can’t really make any more meaningful financial progress via reducing spending.
But what you can always do is make more money. There’s no such thing in our society as a maximum amount you can earn. The reality is that once you’ve done the basics of budgeting, saving, etc., the best bang for your buck, financially speaking, is figuring out how to earn more money.
You can do that by being successful in your primary career, of course. I’ve written some about that and will continue to explore that topic. But, in a world in which job security continues to decrease, focusing 100% of your efforts on your main job is an extremely high-risk strategy - you’re putting a whole lot of financial eggs in one basket. Even if you’re an entrepreneur and don’t have to worry about job security, you still have to worry about business security - things can change and your business might not grow and endure like you’d hope.
It’s becoming more and more common to hear people talk about “multiple streams of income” and “side hustles” when talking about finances. So what does this mean, exactly? People have had “multiple streams of income” for ages, it’s just been called “getting a second job.” What’s different now?
What’s different is the technological environment we’re in. It has never been easier to find creative ways to start small (even micro) businesses and find creative ways to make money. Sure, you can just get a second job, maybe work a weekend shift at Starbucks or whatever, but at the end of the day that’s tying you to linear equation: you’re trading your time for money. We’re always doing this to some extent when we work, but most part-time jobs you can get are likely to be low-paying…is it really worth it to work for near-minimum wage? Maybe it is - everyone’s individual circumstances vary - but my strong recommendation is to try and find something that either A) is not a linear function of hours worked X rate of pay = $$ or B) if it is a straight time-for-money exchange, it’s at a rate that’s favorable enough to make sense to you. You also want to make that C) it’s flexible and you can control your time (you probably have a pretty fixed schedule at your main job, and locking up too much of your time to things outside of your control is a recipe for unhappiness).
So what does that look like? What kind of things can you do that don’t have a linear relationship of time to money? You’re looking for something where, over a long period of time, the same investment of hours worked will gradually result in more money (i.e. the income scales exponentially rather than linearly). There are a near-infinite number of ideas out there - and spending a bit of time on Google will introduce you to a ton of them which are written up with more skill and detail than I’m likely to be able to provide (try “top side hustles 2024” as a Google search term), but here are a few that I’ve either done myself or personally know someone who has done:
Playing fantasy sports for cash
Betting on sports
Creating content around both of the above items
Writing this newsletter
Churning credit card rewards
Starting a small solo business (you want one that requires a low investment of time and money - trade-based business are good - think things like pressure washing, landscaping, mobile car detailing, that sort of thing - you’re trading time for money but at a good rate, and if successful, you can eventually hire others to scale it)
Freelance writing (or any other freelance work - sites like UpWork and Fiverr are great for this)
Creating Amazon review videos
Selling items on Amazon (that are drop-shipped directly from the manufacturer to the customer)
Being a notary public to do loan-signing work
I could go on. It’s easy to find literally thousands of ideas out there that can be started with little to no financial investment. The only risk is a bit of your time. I also want to note what is NOT on here, which is contract gig-based work for companies like Uber or Doordash. Look, if you want to do that, it’s fine - go for it - you can earn some extra money that way. And it’s probably better than a part-time job at WalMart because you’ll have control over your schedule. But you won’t make very much money, and there’s no real way for your income to ever scale without putting in more and more hours.
Look, it’s easy to say “if you work more, you’ll earn more money.” No shit. Thanks for the advice. The point is figuring out WHAT to work at - ideally you want to work in a way that’s building to something, something that scales and at least has the potential to grow into meeting all (or at least a significant chunk) of your expenses if things break right. Some of those things up there - such as writing this newsletter and churning credit card rewards - will never realistically be able to match the income of a full-time job. But that’s ok. I enjoy writing the newsletter, and the credit card stuff is super easy (as in, my $/hour is extremely good for the time I spend). And that fits with the A/B choice above - either something that scales, or something for which the $/hour is good enough to make it worth your while.
The biggest blocker for most of us is just getting started. It’s hard to pick something and then find the time to really give it a go and see if it can work. We lead busy lives. We’re tired. But, try to recognize that you aren’t just adding another job - you’re building something for yourself where there’s a bit more work up front, but the long-term rewards are much greater than “another job.” Make an action plan, and make it realistic. Take it slow. Give yourself a modest goal each week (week 1 research 10 different options, week 2 decide on one to try, week 3 write a plan for how to start it, week 4 try to make your first dollar, that sort of thing). Don’t try to do it all at once, or you’ll likely run yourself into a wall. Slow and steady is easier way to get started here.
And, the difference even a small amount of extra income can make is pretty damn material. Let’s say you make $100 extra per week somehow (after tax to make the math easy). Call it $5k/year. Most of us work about 40 years or so over the course of our lives, so that would be an extra $200,000 total lifetime income. Not bad! But wait…if we invest that money and earn a reasonable 7% rate of return (which is what the stock market has averaged out to over the last 100-odd years of data after taking inflation into account), we now have an extra $836,000. That’s almost a million extra dollars for your retirement, just from a measly $100/week of extra side income that you save and invest. Or, if you prefer to use it to up your spending and enjoy it now, it’s roughly the difference between driving a Toyota Camry and a BMW 5 Series. It really does add up.
In addition to just "having more money, diversifying away from being solely reliant on your job is incredibly empowering. It means you don’t have to feel “stuck” in a job you no longer enjoy because you need the paycheck. It means that when the economy takes a turn and layoffs start coming, you’re no longer kept up at night worrying about what happens if your name gets called, how you’ll keep your home and put food on the table.
It’s not just about the money. It’s about the power, and it’s about the freedom. It’s about the happiness that removing one of life’s major sources of stress can bring you.
What are you waiting for? Get hustling!