TSI #33: Why you need a side hustle

Hello Stoic Investors,

Today I want to focus on the income side of personal finance. If you’re reading this, you’re probably familiar with how building wealth works. Earn more, spend less, and invest the difference. 

That being said, here is a piece of truth you should never forget.

There is a limit on how much you can reduce your spending.

Income, on the other hand, has no ceiling. 

If I were to take a guess, I’d say you’ve already got a day job. 

So, your time is pretty limited.

But that doesn’t mean you should rely on that stream of income alone. 

Start a side hustle

A side hustle is a great way to build wealth. 

Let me tell you why this is an immensely powerful thing.

Let’s assume you need about $30,000 per year to live happily. Therefore, you set a goal to build a one-million-dollar portfolio. 

If you invest $300 per month, you’ll retire with $1,138,991 in 35 years. That’s enough for you to live off of your investments. I’m assuming a 10% annual return here.

However, if you cherish your time, you’ll probably want to get there sooner.

How? Earn more & invest more. 

The numbers

I want you to fully understand the power of additional income.

So, let’s run some numbers.

If you manage to make $100 extra per month and devote that to your future self, you would reach your goal 3 years faster! Your portfolio would be worth $1,114,050.

If you invest an extra $200, you’ll retire 5 years sooner. 

Have you found a way to invest $1000 per month? Congratulations, you can retire after 24 years.

Just to give you some perspective, that’s 20 years earlier than most people.

I know what you’re thinking.

This is impossible!

“It always seems impossible until it's done.” - Nelson Mandela

How do I start a good side hustle?

Starting a side hustle can be daunting, but it's important to find something that aligns with your skills and interests.

That way it won’t even feel like work!

Here are a few tips on how to find the perfect side hustle:

Identify your skills and interests: Consider what you're good at and what you enjoy doing, and think about how you can monetize those skills and interests.

Research potential options: Look at different types of side hustles and see which ones align with your skills and interests. You can research online, ask friends and family, or seek advice from a mentor or advisor.

Assess the demand: Consider whether there is a market for the product or service you want to offer. Look at the competition and see if there is a gap in the market that you could fill.

Consider your time and resources: Think about how much time and resources you are willing to invest in your side hustle. Some side hustles require more time and resources than others.

Test the waters: Start small and test the waters before committing too much time and resources. This will help you to validate your idea and refine it before scaling up.

Be open to learning: Starting a side hustle may require learning new skills or gaining new knowledge. Be open to learning and be prepared to adapt as you go along.

So, note down these points and start building a side hustle today: 

- Investing the money earned from a side hustle can help you reach financial freedom faster

- Find a side hustle that aligns with your interests