In financial independence circles people talk a lot about side hustles, which I would define as paying gigs that are not your main source of income. The benefits are many: you can develop new skills, gain experience, network, and of course – bring in some extra dough to pay down debt, increase your savings, or perhaps treat yourself to something special like a big vacation.
I am a big fan of side hustles. And while I have mostly picked them up over the years for the learning opportunities and the mental stimulation, there are also some meaningful financial benefits as well.
While the list fluctuates every year or two, here is the current iteration:
- Consulting: depends on the contract, but in April I earned $1340. At this point I am not actively seeking out contracts, but will take on jobs when they seem interesting. I will likely average about one a year.
- Substitute teaching: $170 a day (for about 5 hours of work). The school I sub at is a 3 minute walk from my house, and I am mostly subbing P.E. class so I get paid to play sports.
- This blog: not paying much, but will bring in a hundred a year at the current rate
- Music royalties: this is actually a previous side hustle that I no longer pursue. But for the last 7 or 8 years I have been getting royalties each time my songs get played on the radio. It is not a ton of money, but I get typically bring in $250 a year.
- Woodlot: This is a side hustle in development, alongside some family. While it is not earning yet, down the road I expect to pull a bit of income.
All in all these side hustles are bringing in perhaps $5000 a year before tax. It’s not going to make me a millionaire, but that is not nothing either! And it could literally make me a quarter million dollars richer. If I were to invest that side hustle cash (say $3500 after tax) each year for 30 years at 5% interest I could end up with $244,162 more than I would have had otherwise. Add that to what my wife brings in from her side hustles and even seemingly small amounts of additional income each year can make a big difference for our long term financial health. Currently we are using most of the extra income to make a additional payments towards our mortgage debt, but there are a lot of options. And that to me is the point – options!
Beyond the benefits mentioned above, I would say one other thing I really like about side hustles is that, because they aren’t being relied on as a primary source of income, I can be selective in saying yes – or no – to any opportunities that come my way. For instance, a colleague and I recently turned down an offer to develop curriculum for a college course. While at first glance the task was quite compelling, in reviewing the contract we realized there were some expectations that would have been a burden to complete. So, we said no. It was that easy. Because neither of us needed the contract to put food on the table, we could say no to a side hustle that wasn’t a perfect fit. It is a very freeing position to be in when you can pick and choose how you spend your extra time.
What about you…any side hustles you have on the go? What do you do with the extra cash they bring in?