Are You Getting Paid What You’re Worth?

side hustlesI’ve always been a firm believer in the make more money mantra as opposed to the cutting expenses to the bone when it comes to building wealth.  Within the make more money crowd I’ve seen numerous side hustles thst are done for the sake of making more money.  Excellent posts from Kim from Eyesonthedollar and Tonya’s guest post at Budgetsaresexy  about side hustles they’ve passed on due to the low pay which wasn’t worth their time.

In previous posts I discussed how the purpose of money is to buy you time. Time is your most valuable asset, its an asset that can never be replenished.  I’ve seen people who have a full time job spend numerous additional hours at their side hustles, time spend away fromfamily.  When you calculate out the amount of hours worked to earn that income it sometimes comes out to barely above minimum wage. If your hustles barely make above minimum wage you will never get ahead.There’s only 168 hours in a week, that is not an efficient usage of your time.

Before you start any side hustles you should ask yourself these three questions:
How long will this take?
Can a 15 year old do this task?
Am I getting paid enough?

Since I often put in between 50-60+ hours a week any side hustle should not occupy too much of my time, as my personal time is extremely precious.  There are so many side hustles (like dog walking ,babysitting, lawn care) that could be done much cheaper by a 15 year old, thus at this point isn’t worth my time.  I value my time at $25 an hour (although I would go as low as $20 if it’s a simple task)  Anything less than that rate and you’ll find me relaxing at the beach.

I’m devoting a side hustle to travel hacking because it is earning around $35 an hour after all my expenses. It only takes around 10-12 hours total a month, so it’s not a lot of my time.  When friends hear of what I’m doing they presume that it’s either risky or too complicated, thus a 15 year old can’t do it. I often float$10-15,000 a month to travel hacking if my rate dropped to $10-12 an hour it wouldn’t be worth it anymore.

Two years ago when my wife and I were house hunting all the open houses we went to were full. Multiple offers over asking price was the norm. I read a report from a Hawaii economist on real estate that stated 50,000 homes were needed in the six years of the down cycle just to meet population growth when demand comes back. In that time period less than 5000 homes were permitted, coupled with record low interest rates I knew that we were in the beginning of another real estate boom. My side hustle was acquiring another property to take advantage of the boom.  I had to partner up due to the lower capital requirements.

We spent two months going to numerous open houses and properties, bidding and losing out on several. That was my top priority, any free time I had was spent finding the right cash flowing property.  My portion of the downpayment and closing costs was $18,000, 11 months later my equity is around $35,000. A $17,000 gain, not bad for 60 hours of work.  I would’ve missed this opportunity if I was too busy working at side hustles that didn’t pay much. Side hustles aren’t worth it if it takes up too much of your time and barelypays. You’re better off efficiently using your time identifying money making opportunities as opposed to working all the time. 

Get certified or upgrade your skills.
What business need does your workplace have? Can you obtain the skills needed to fill that gap to earn more money. Learn a new trade or skill where there is a shortage.(Engineering, programming, acutaries, trades)

 Become a better investor.
Index funds should be used for 90% of your investments. For the other 10% create a watchlist of high growth great companies and place a buy price that’s at least 20%-30% lower than what the current price is. (Think Netflix when it was at $400). It has to be high quality companies with a great business model, because often Mr. Market will value that business incorrectly. This year I followed Linkedin at $200 a share, my watch price was at $150. I ended up buying at $146 and will hold this volatile stock for the long term. Another stock I have on my watch list is Whole Foods, I’m a buyer at $30-$32 a share. Find one or two great stocks and you’ll earn much more than any other hustle.

Your time is valuable, don’t just do side hustles just to earn money.  Your missed opportunities could be greater than the money that you earn. Empower your finances by valuing your time properly.  If you don’t correctly value your time, why should anyone else?

What side hustles are you working on?  Are you getting paid enough for your time?

Photo credit:paperblog.com

 

 

 

 

Comments

  1. I’m self-employed so I determine my own salary through the rates I set. I believe I am paid what I’m worth, but don’t know for sure. I have been able to stop taking low-paid work that is no longer worth it to me.
    Holly@ClubThrifty recently posted…Starwood Preferred 30K Bonus is Back, You In?My Profile

  2. Hey Charles, glad you’re back. I thought you had decided to give up on blogging or something. Not really doing any side hustles at the moment unless you count investing, but those index funds are more or less on auto-pilot. I’ll probably get back into travel hacking in the near future, but I don’t find it too time consuming. In the future, I might look into real estate so I look forward to learning from you and others with more experience.
    Andrew@LivingRichCheaply recently posted…Should Everyone Make Out a Will?My Profile

  3. MIA for awhile man. Hope all is well. Yeah, I agree – I used to think a lot about getting a 2nd job to help earn more money. But when my salary was $100k it was hard to find anything worth my time (at only $8-9/hour). One day someone is going to approach me with that $15+/hour cash under the table opportunity though. :-p

  4. Thanks for the shout :) Hustle on!
    J. Money recently posted…The Shockingly Simple Math Behind Early RetirementMy Profile

  5. I handle side hustles the same way, Charles. As much as I would like to be debt free, my children and family are of the utmost importance, and I will not sacrifice time with them for money that will not even make a dent in our debt. I won’t do $5 posts from Odesk or Elance, or $5 anything. Some think this is irresponsible, but I can’t get this time with my kids back, and soon enough they’ll be grown and on their own, so I have my set side hustle minimums, and I stick to them.
    Laurie @thefrugalfarmer recently posted…20 Random Things About MeMy Profile

  6. You make a great point here about side hustles. I think a lot can be attributed to short term vision. So many actors I know wait tables most of the year and leave whenever they get a gig. That’s not a long term strategy, because it makes them miserable. I’m so glad I launched my own business. It doesn’t mean I don’t still take on survival jobs, but it does mean I have a longer term plan that is fulfilling and has unlimited earning potential.
    Stefanie @ The Broke and Beautiful Life recently posted…Survival Job Series: Employer Abuses and Employee EmpowermentMy Profile

  7. Blogging is my only side hustle right now, including my once-a-week contributor post to the FeeX blog. I lost a big income source on my blog and I also am realizing just how difficult it can be to stand out in the PF area. I would like to somehow streamline my blog a bit more so that I can still make money on it but spend less time on it. I would also like to start a spreadsheet/DB blog because they can get insane traffic for posts that are years and years old. It also could lead to some lucrative side hustle work where I can charge quite a bit because it’s such a specialized skill. Anyway I really appreciated this post and I think it raises an important issue with side hustles.
    DC @ Young Adult Money recently posted…The Weekly Quick Hits RoundupMy Profile

  8. Thanks for mentioning my guest post! Yes I’m starting to be very picky about my time because even if I’m not earning money every hour of every day, some of those hours could be more beneficial for me to use otherwise. Time with family, friends, education, relaxation, etc. So I write some articles for $25-$30, but they only take 20 minutes to write, while I was hired for another writing job for the same amount, but where I had to do research and was kind of painful to write. Sometimes the fun factor comes into play to, like doing work as an extra doesn’t alway pay a lot per hour, but is kind fun to do!
    Tonya@Budget and the Beach recently posted…21 Day Challenge: Stretching/Link LoveMy Profile

  9. Financial independence buys perpetual freedom which is why I want to reach that goal as quickly as possible. The only side hustle I have right now is a part time teaching gig :) It pays well and I enjoy working with the students. I find that the value I put on an hour’s worth of work depends on how much I enjoy the work itself.
    Liquid recently posted…Invest in China – Chinese Foreign InvestmentMy Profile

  10. You’re right, many people spend so much time on their side hustle that they forget to ask themselves what they’re missing out on. Time with family is precious to me too so any activities that deprive me of that had better be very profitable. Of course, it can take time to build a revenue stream…in the beginning you may indeed make below minimum wage but with work the idea is to make much, much more.
    Mike recently posted…Is Walmart Family Mobile a Bargain or a Bust?My Profile

  11. Great Post as I never understood why anyone would do jobs for 5 dollars. I guess it depends how much time it takes to fulfill the work. Nice profit on the property. I’m focusing on cash flow first to help reach FI.
    Rich Uncle EL recently posted…When Is the Best Time for Sellers to List HomesMy Profile

  12. I thought that some of the projects I have are not paying enough but often, I end up accepting anyway just to make money. This post got me thinking. I believe I need to reassess some things so that I’d start seeing a more positive side where my income is concerned.
    Jen @Sprout Wealth recently posted…Don’t Make these Investing Mistakes Like I DidMy Profile

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