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Almost 40% of Americans and Brits now have a side-gig and so do up to 50% of millennials. The sad reality is that most of them are doing it to spend, to feel like they have enough money to spend, rather than to top up their saving.
That’s because making more money doesn’t necessarily make saving easier. Saving is hard, and it’s something you have to get used to. We either develop the habit to save some of our money, which is so difficult that most people don’t do it, or we accidentally develop the bad habit of spending all our money, and then wonder why we have none left. Earning more doesn’t make saving happen automatically.
If that’s your approach, a side-gig may not help you save. It might help, if you decide before you start the side-gig that at least some of the money will be saved as soon as it’s earned, but if you treat it the same way as the rest of your income, as extra spending, it won’t. You will have less time, more crap, and no extra savings.
Once you have started saving, though, then making more money definitely makes saving MORE money much easier. You know the process of getting money into the bank, into your savings account and into your investments.
If you are saving $7 a day and that’s 14% of your income, it means you are earning $50 a day, $1,500 a month or $18,000 a year. Well done for saving that much – it’s a really good start. You should be a millionaire in 50 years if you make sensible investments.
And if you follow the `’Freedom Formula”, where you need 25x your spending to be secure forever, rather than needing a million dollars, it should only take you 42 years to be free.
If you want to save double that, you don’t have to get a side-gig that pays double your total income, though. If you can focus all your side-gig earnings on saving, you would only need to earn an extra $7 a day to double your savings: that’s $49 a week or $2,555 a year. That’s not a huge side-gig, but it could make you a millionaire 10 years earlier, by 40 years old.
If you can make $14 a day in your side gig, $5,110 a year, you could save half and spend half and get the best of both worlds.
So what’s the best side-gig? It could be one that you enjoy, one that takes the least time, or one that makes the most money. It could be an idea you get from a website like Side Hustle School, or something else that inspires you.
It could be any of those, but really the absolute best hustle is one that you start now. Find something you can do right now.
Featured in the FINANCIAL TIMES, and the DAILY TELEGRAPH, our MISSION is to help create millions of millionaires. We want people all over the world to use our simple tools to save emergency funds, turn those into investment plans and create the habit that will help enrich their lives.
If you’re interested in financial literacy, please also look at our new project www.maiawards.org