4 Reasons Why Everyone Needs Side Income
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stopnlook I have spoken to many friends and colleagues who have expressed that they would like to earn some side income outside of their primary jobs, but most of them do not consider extra income to be a necessity. In my opinion, side income is something everyone needs. Here are a few reasons why you should start building an income stream outside of your main job. (See also: 5 Money Making Activities You Can Do Today)
1. It's a Personal Safety Net
Your side income can be your personal safety net against unemployment. Job security is really a thing of the past, and you should be prepared to lose that income at any time. In many ways, having a good side income is better than having an emergency fund, because an emergency fund will run out, but you can build your side income further if you lose your job. If you do have an emergency fund, your side income will also make that fund last a lot longer.
2. Control Your Income
Last year I did not get a salary raise at my job due to the economy. However, I did give myself a "raise" by increasing my side income. I have practically no control over the performance of the greater economy and my employer, but I do have control over my side income. Some of my colleagues and family members actually suffered salary cuts last year, and if they created some side income then they could have made up the difference and perhaps given themselves raises, too. Adding a side income gives you greater control on your finances and helps fight against the recession's toll on your household.
3. Have More Savings
This one is a no brainer. If you can earn more income and spend the same amount, then you will be able to save more and invest more. Every little bit of extra money will bring you closer to financial independence, and everyone could use more savings and less debt.
4. Use Your Time More Productively
In the past few years, I have learned quite a bit in the process of building up my online income. At first I did not even make minimum wage for the effort I put in, but I felt productive and learned a lot. I did work that was worthwhile and interesting to me.
Most people want to have some side income but never seriously pursue it because they are too comfortable with a steady paycheck and don't have the motivation to do something extra outside of their regular jobs. Then there are others who simply do not know where to start. Here on Wise Bread there are many articles about making extra cash. For example, I have written about selling used books and writing online. The most important thing is to just start something, and maybe one day that side income will replace your full-time job entirely.
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I love this idea, and it sounds great. Before I was married, this was totally possible. I am a graphic designer, so I can put in hours at my job then come home and put in more hours.
Now I have a 5 month old baby. I can't fathom robbing my wife and child the hours that it takes to make side income. If I may add my two cents, I suggest ranking your priorities, then deciding where side work falls.
"Most people want to have some side income but never seriously pursue it because they are too comfortable with a steady paycheck and don't have the motivation to do something extra outside of their regular jobs."
I think that statement is narrow minded. To me, it sounds almost judgemental. I don't have a side job because I already work one job from 8 AM to 5:30 PM each day, then I have a wife and kids at home with whom I would like to spend time. A side job would reduce that time spent with them in exchange for money. I value the time with them more.
Hi Khurt,
I actually didn't write it to sound judgmental. Actually I completely understand how you feel. I also have a baby and it's tough enough to juggle a full time job and my family. However, I used my very limited "me" time to pursue a little bit of side income that I can earn at home, and it is actually sort of therapeutic for me. If you have a hobby that you love to do that can generate some income, then it is worth pursuing.
Maybe your article title should have been "How to leverage your hobby to generate side income".
Multiple Streams of Income - It's a concept I've known about for years, but one that didn't hit home until my last lay-off. With an entire generation of boomers fretting about social security and retirement and the generation after in debt to their eyeballs, we can't hear this message often enough. It's NEVER a good idea to be entirely dependent on one source of income. I think our b-schools and education system should focus more on entrepreneurship and less on "getting a job" upon graduation. All of this requires a major shift in the way we view success, living and wealth.
Grace,
I agree with you about that the schools should teach more entrepreneurship. The focus seems to one sided toward developing skills that an employer may want.
I live in a community where it is very commonplace to have a side job. Not only is it practical to have additional income if the cost of living is high, but many people pursue the job they are "passionate" about, while maintaining their "everyday" job. Families don't seem to be negatively impacted. They are often part of the side job (i.e., farming, beekeeping, small businesses, etc.). Great post!
I also have a family. I consider my husband's job my "side job," and my job as his "side job." I have to pick up extra household duties when he's out, and vice verse. Two jobs give us multiple income streams, and provide added security in the event of a job loss.
I don't understand why I would *need* more than that. Like Tyler and Khurt, I am loathe to give up any more family time (or me time) to work, even work I enjoy.
I've had more than one income source for as long as I can remember. There was always a second job back in my single days. Then I bought a duplex instead of a single house. Now I am married with kids. We still have the duplex to rent out and live in another house. I clean linens for a local wedding rental company and I take care of two kids before and after school. I am able to make some good pocket money while staying at home taking care of my kids.
Totally agree with you. The challenge for me is to balance my side job with my real job, because to be frank I feel much more motivated doing my side (blogging) business than my full-time job. Unfortunately the pay does not enable me to switch full time to blogging. But being your own boss is a great feeling and knowing that the more you put in, the more you get.
#2 is the best in my case. You no longer have to depend on one company to determine your lifestyle
You are spot on, with all of your points. There is no loyalty from employers and wages are stagnating. Yet our bills are increasing, gas, food, retirement saving etc. It seems the only solution is to have multiple streams of income. Also, for me, it reduces stress to know that I am not relying on one person/company for my income. Also, when you are laid off, you may have to pay COBRA which is a major added expense. My side income would pay for that stretching our EF.
I am in complete agreement with you. There are no guarantees in anymore. Not in job security, goverment funded programs nor in investments...which we have all felt in the last two years. Taking control of your revenue streams is the only way you are going to have any hope of security. All of my "eggs" are definitely not in one basket.
I think side income will boost your confidence at your main job and widen your career development.
On the other hand it depends, whether it allows you to concentrate on your main income job and pursue career development. Side income could be very exciting but counterproductive.
What if you would invest all your time in the career development? So it is really tricky question.
I do it because I really enjoy myself, rather than counting on the extra cash.
But everybody has its own way towards financial independence.
In an unstable economy, there is no greater security than having multiple sources of income.
In fact, I can live off my part-time job. That's security.
I think this was a great post! I also have a side job in addition to a 40 hour work week. My side job is already in addition to two days during the week that I already work so it really does not consume alot of my time and while I don't plan on working it for say, 40 years, I will work the side job until I have more of a comfortable savings and my student loans are paid off.
One other reason why I like doing this: it gives you a sense of satisfaction and success outside of work. You get to accomplish goals, work hard, and get a sense of worth without tying it to your work, which I think is important.
You are not where you work.
What you didn't mention is that another benefit of a side job, or part time job, is that it means you won't be "unemployed" if you are laid off. A significant number of hiring managers are unwilling to hire unemployed people to fill open positions, so when you're looking for a new job, you can truthfully say that you ARE employed.
It also makes you look like you're not lazy; you won't fit the stereotype of someone who's happy just to sit back and take unemployment (even though we know that's not an accurate stereotype).