I’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?