Do you want to be financially secure and ultimately wealthy? You need to increase your streams of revenue and one of the easiest (and quickest!) ways to do that is to start a side-hustle. According to a study by Tom Corley, most self-made millionaires have generated their income from multiple sources. Think about any wealthy person and you will likely see that they have money coming in a multitude of ways (e.g. business income, dividends, rental income, investments, side-hustles).
Why is having multiple-streams of income important? Most importantly, it protects you in the event of a job loss. If you lose your job for whatever reason (downsizing, illness, injury), having a side-hustle or supplemental source of income will allow you to ride out the waves and stay afloat. Most financial setbacks occur because of a loss of income. Having a side hustle provides you with some insurance against loss of income.
Secondly, having a side hustle allows you to earn extra cash that you can use to save and invest. The law of compound interest tells us that the earlier that we can save, the more we will earn. Therefore, having a side hustle (ahem, now) allows you to take advantage of time. For example, starting at age 23, you need to put away just $14 per day to reach $1 million by age 67. Wait just seven years, age 30, and you have to increase that amount by 50%. Hold off until age 35 and you’ll have to save more than twice as much as at 23. Investing a little bit as early as you adds up quickly!
Another way that having a side hustle can get you a ticket to millionaire status is that earnings from your side hustle can be used to create yet another source of income, such as rental property or other businesses. For example, through your side-hustle as an online instructor you are able to save enough money to purchase a rental property. Now you have income from your day job, income from your side hustle, and a monthly income coming in from your rental property. You can then take the money from the rental property and invest in dividend paying stocks, thus creating a FOURTH stream of revenue. You can go on and on reinvesting and creating additional stream of revenue which increases your wealth and creates additional financial security.
With technology and the gig economy, the barrier to entry is the lowest it has ever been. Anyone can create a side hustle to bring more money in. It’s as easy as posting on your town’s Facebook page that you can rake leaves or shovel snow. You can also take advantage of services like Shipt and Doordash. Even a few hours a week can add up over time and create financial security for you and your family.
Do you have a side hustle? How has having a side hustle improved your finances? Leave a comment below.
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