Do The Hustle

Do The Hustle

I spent some days in my youth bailing water out of flooded basements with my siblings. My parents got into real estate and property management and it became a family affair. We learned to bail water from tenant’s basements, and we mowed a lot of lawns. My dad’s main job was Colonel, US Army. But in early retirement, he side-hustled. My dad was born in a tent, but in the end, he collected houses.

In my last post, I discussed ways to free up money to pay down debt by learning to live on less. To get ahead, it’s also important to increase your earnings. A small increase in income can make a huge difference. For example, if you have a $3000 credit card balance at 10% interest, a monthly payment of $100 will take 35 months to pay off and cost $467 in interest. If you earn just $100 a week extra, and throw that at your balance, it will be paid off in 7 months, at only $91 in interest. Imagine what you can do if you add $500 a week to your income. (answer: you’ll pay it off in 2 months, at $33 in interest, AND you’ll have $667 in leftover cash!)  The truth is, you’re not going to get rich just by cutting back. You need to make money. There are countless ways to generate income.

If you have a career, learn how to make more money in your current job. Perhaps additional courses, certifications, or licensure would increase your chances for a raise, or a promotion. Maybe your job doesn’t offer decent pay or promotional opportunities and you need to consider a change. Learn about careers that pay well. This isn’t the time to hang on to a low-paying job and hope that the tide will change. You need to grab the bull by the horns and make money now. If you live with consumer debt; if you are not on a path toward financial independence; this is an emergency. Stop waiting for your ship to come in. You need to hustle. (And so does your spouse.)

The gig economy is hot today. Learn how to generate extra money on the side. Musicians can offer in-home music lessons, teachers can tutor, and artists can sell their creations online through Etsy or other buy and sell platforms. Online tutoring is popular for those who wish to work remotely. VIP Kid provides an international learning experience to Chinese children through virtual classrooms. You decide how often you want to work. You can find out the requirements, and sign up to become an online tutor here. Another popular site to look for freelance work is Upwork. Check out their website for short-term writing, editing, creative, IT, virtual assistant, and other remote opportunities: Upwork.

My side hustles have included selling newspaper ads, sewing/slipcover work, furniture buying and reselling, and extra work as a PRN nurse. I know people who cut and sell firewood, baby-sit, house-sit, and pet-sit for extra money. When my oldest daughter was in college, she made money house-sitting for long stretches. She was paid to live in beautiful homes but was free to come and go to her classes each day. Anyone can make extra money. Anyone. Advertising your gig has never been easier. Social media platforms are usually free and effective.

Air BnB'ing  has become a popular way to generate money, as well. If you have an additional room in your home, renting it out by the night or weekend can boost your income. I have friends who rent their entire home in the summer months while they travel. Check out Air BnB to learn how to earn money as a host. 

If you live in the country on some acreage, you may be able to rent space for campers on your land through Hipcamp. Hipcampers book and pay for their stay directly through a website, and hosts keep 90% of the payment. Check out Hipcamp.

Remember, use your extra income to focus on one debt at a time, working through the debt snowball.  To learn how quickly you can pay off your debt by increasing payments, check out Credit Karma’s calculator.

After The Snowball

After paying off all your consumer debts and celebrating this enormous accomplishment (and you MUST celebrate!!), you’re ready to build wealth. The following steps may be done simultaneously:

1-Increase your emergency fund to the equivalent of three months living expenses. Some people recommend six months; but this is up to you. You need wiggle-room in the event you lose a job, or have another major setback. And you will have a setback--you can count on it. The best way to build your EF is to automate your savings. Set up your online bill-pay to transfer a small amount of money from your primary checking to your savings once or twice each month. You won’t even feel this! Just a few dollars each payday will add up quickly. Use your EF only for unexpected car repairs, appliance replacements, or other unexpected bills when you are not able to cash-flow the cost.

2-Begin investment contributions to a retirement plan. If you are relying on Social Security to take care of you in your retirement years, think again. Social Security is either NOT going to be there, or it’s going to be a pittance. Investing is the secret sauce to becoming wealthy. Your money works for you through the magic of compounding interest. For an example of how just $1200 can turn into tens of thousands of dollars with no effort from you, read this article from the Motley Fool.

If you have a 401K or other plan through your employer, contribute enough for the company match, but try to increase your contribution over time to at least 15% of your pay, or up to the annual federal limit. Your contributions will be automatically deducted from your paycheck.

If your company doesn’t offer a retirement plan, start an investment account on your own through the brokerage of your choice. Vanguard is a favorite brokerage company among millennials because of their low fees and ease of online access.  You will find user-friendly help on their website.  Other popular online robo-brokerages include Wealthfront and Betterment.  If the world of investing makes your eyes glaze over, these companies provide portfolio advisory services for @ .3% fee. The important thing is to start ASAP. The best way to build your retirement investments is to automate it--just like you automate your EF savings. Set up your bill-pay to transfer a small amount of money from your primary checking to your investment account once or twice each month. Sock away as much as you can, and let this money grow.

3- Start additional investment savings! For an excellent, hands-on, easy-peasy beginner investment workshop, visit the Millennial Revolution blog.

Nothing is more important than being debt-free, having an emergency fund, and contributing to a retirement account. If you automate, your investments will continue to work for you in the background, slowly building wealth while you go about your life.

Carry On

At this stage, some people relax, concentrate on their careers, and let go of side hustles. Others (Millennials, primarily), blast ahead and dream of FIRE (Financial Independence, Retired Early).  Many of my influences come from the FIRE community. There are dozens of FIRE-related blogs filled with ideas on how to leave the rat race behind and live intentionally. Mr. Money Mustache (MMM to his followers) writes a blog and is a guru to the FIRE community.  He lives with his frugal family in Longmont, Colorado and retired in his 30’s. One of my favorite blogs is Frugalwoods, authored by Liz, who lives very frugally with her family in Vermont. Check in with them sometime. You’ll discover a whole new outlook on living-- I promise. Hopefully, you'll learn to break free of the consumer habits that enslave so many of us, and begin to question what you're doing with your life. Some of my future posts will include creative hacks aimed at FIRE, and I hope to feature real live folks whose adventures involved RV living,  basement bailouts, and making millions. (next)

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