What is a Side Hustle?
A side hustle is something you do on the side to earn extra money. Side hustlers come in all shapes and sizes. Some have full-time jobs, and others are stay-at-home moms or dads looking to bring in a little extra cash. Many see their side hustles eventually grow to replace their jobs, while others are content to keep their 9-to-5. Whatever your long term goals are, here are seven reasons why you should start a side hustle today.
1. You’ll be more autonomous, and thus happier at your day job
Imagine going to your day job because you want to be there, not because you need the paycheck. That sort of freedom can drastically reduce the stress you experience at work. If the work becomes too monotonous or you lose patience working for your boss, you can choose to leave. That’s a luxury not afforded to those who haven’t taken the time to build an income from a side hustle. They either have to suck it up or risk walking into a potentially worse situation at a new job.
In his book Drive: The Surprising Truth About What Motivates Us, Daniel H. Pink cites research showing autonomy is one of the three pillars of intrinsic motivation (the other two pillars are mastery and purpose). In other words, the more you’re able to feel self-directed, the happier and more motivated you will be. Just knowing that you are at your day job by choice will make your work life less stressful. It can paradoxically make you a better performer at work. One of the best reasons of why you should start a side hustle is to reduce stress and increase happiness.
Drive: The Surprising Truth About What Motivates Us
2. You can demolish your student loans (or credit card debt)
“Whenever you find yourself on the side of the majority, it is time to pause and reflect.” – Mark Twain
According to a study, it takes the average student 21.1 years to repay their student loans. As Mark Twain once said, “Whenever you find yourself on the side of the majority, it is time to pause and reflect.” Carrying thousands of dollars in debt for decades at 3-6% interest isn’t just a recipe for financial disaster, it’s absurd. And that’s not being hyperbolic; look at these scary retirement statistics that show how ill-prepared people are regarding personal finances. The point is that most people aren’t intentional with their money. This is your opportunity to be in the minority and plan well.
To begin, let’s just take a cursory look at the math. Say you have $30,000 in student debt and an interest rate of 6%. If you start a side hustle earning $1,500 a month and throw it all at your student loans, you will pay it all off in roughly 2 years after factoring for income tax and interest on the loans. Your total interest on the loans will be about $2,000. Now let’s pretend you pay off that $30,000 student debt on a 10-year payment plan. You’ll be paying over $300 a month for an additional 8 years and will pay roughly an extra $8,000 more in interest.
Paying off your student loans early by starting a side hustle is hard work. But it’s certainly doable and one of the best reasons why you should start a side hustle today.
Student Loan Calculator
3. You will have more to be generous with
This is an obvious one that could go without saying. If you make more money, you can give more money. But it’s not just others you’ll be helping. As Psychology Today writer Paul Zak notes, being generous and helping others is a great way to engage with others and increase the feel-good chemical oxytocin in your body. Having a side hustle is a great way to be able to help your friends and family in need or donate to your favorite cause.
4. You can network and meet amazing people
On the Rideshare Guy podcast, guest Mitchell Meyers shares about how driving for Uber is a fantastic networking opportunity for him as he searches for his next career position. Mitchell is in his mid-twenties. He isn’t sure what he should do next since he’s left his position at a wealth management company in Dallas, TX. He chooses to drive early in the morning and often finds himself in conversation with local business leaders and executives as he drives them to the airport. Mitchell is confident that he is building relationships that will help him for several years to come.
A side hustle, whether it’s driving for Lyft and Uber, or running your own business, can be a great way to meet people that you would otherwise never come in contact with.
5. It puts a house closer in reach
According to Zillow, the median home value in Portland is $410,400. If you save up a 10%-20% down payment on your house, you’re looking at $40,000 – $80,000. If you have a side hustle going that brings in an extra $2,000 a month, you could have your down payment saved up in 2-4 years after accounting for taxes.
Note: Median home value last checked March 2017
6. You can travel more
If your side hustle is flexible, you can work hard for several months and then take a few well-deserved months off to go travel around the world. After all, what Portlander doesn’t want to escape for a week to Hawaii at the end of a rainy February?
Vagabonding: An Uncommon Guide to the Art of Long-Term World Travel
The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich
How to Travel the World on $50 a Day: Revised: Travel Cheaper, Longer, Smarter
7. It can give you guilt-free spending money
It’s no secret that living in Portland isn’t cheap, which is all the more reason why you should start a side hustle. Between paying for your monthly Trimet pass and the ever-increasing rent in Portland, it gets harder and harder to buy the higher-end Stumptown coffee. Instead of downgrading to Folgers, you can boost your monthly income and have some extra guilt-free spending money.
Bonus Reason: You can super-charge your retirement in just one year
If you save $1,000 a month for just one year and invest that $12,000 in an investment earning an average of 7% interest per year, in 40 years that $12,000 investment will be worth $179,693.49. If you managed to save $2,000 per month for 2 years and invested that $48,000 at the same average interest rate, in 40 years that investment would be worth $718,773.98. It goes without saying that’s not enough to retire on, and it doesn’t account for inflation or other factors, but it certainly shows the power of compound interest. If you needed one more reason of why you should start a side hustle, this is it. The earlier you can prepare for your future, the better off you will be.