Unlocking Financial Freedom: The Power of a Side Hustle
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Chapter 1: The Importance of a Side Hustle
In today's world, financial freedom is essential for happiness. The more financial options we have, the greater our sense of well-being. Money plays a crucial role in achieving that freedom.
Have you ever experienced a long daily commute? I once traveled 65 miles from central New Jersey to New York City, but that wasn't part of my daily routine. My longest regular commute was 45 miles each way. It was far from enjoyable, but it felt necessary.
"Necessary" is a term often tied to work and income, which contradicts the idea of freedom. True freedom involves having multiple choices, while necessity suggests that decisions are made for you. Those facing financial hardships often find their daily lives filled with obligatory tasks—like mandatory overtime or jobs that don't meet basic income needs. If illness strikes, the choice to delay a doctor's visit may stem from financial constraints.
While it's often said that money can't buy happiness directly, it does play a significant role in providing comfort, security, and leisure. Ultimately, wealth can greatly influence how much freedom one experiences.
There are, of course, exceptions. Some people may find personal freedom regardless of their financial situation, such as individuals who live with their parents well into adulthood. However, for many, financial independence is paramount. Pursuing a side hustle can be transformative, providing a level of freedom that transcends just monetary gain.
The Spectrum of Freedom
It's important to note that personal freedom isn't a simple binary. It's a sliding scale. Even small increases in financial options can alleviate stress.
Personally, I maintain a 9-to-5 job, which I don't mind, though I have had my share of discontent with it. Despite this, I aim to write regularly to supplement my income. Why? Because I find joy in it. The goal of a secondary income stream should be to monetize a passion or enjoyable hobby. Earning even a small amount from something you love is a win. I have about 80,000 words of unfinished novels—purely for fun. If I can earn from that creative outlet, it’s a bonus.
Additionally, the income from writing indirectly enhances my job security. While it doesn't provide direct security for my 9-to-5, it offers reassurance. On average, my writing income helps cover my share of housing costs, and in great months, it can even cover more than that. This way, I have options; if my main job falters, I won’t be forced into a long commute or panic mode.
With a stable job, my side income goes toward investments or savings. Although it represents only 15–25% of my total earnings, this side hustle significantly contributes to my wealth accumulation.
The Impact of a Side Hustle on Savings
Imagine living comfortably on a $75,000 salary and saving 10%, or $7,500 annually. Now, consider adding a side hustle that generates an extra $1,200 monthly (netting around $800). Adding that $800 to your savings boosts your wealth-building capability by 128%, compared to a 19% increase from your salary alone. In terms of securing your financial future, that side income is invaluable.
Other Considerations
For some, a second income might be a necessity if their primary job doesn't pay enough to make ends meet. This is a widespread issue, but one that is not the focus here.
Conversely, a smaller group may earn enough that a few hundred extra dollars each month is inconsequential. However, seeing reports of individuals earning $275,000 yet struggling financially raises questions about their spending habits. Even those at higher income levels could potentially benefit from a side hustle.
Additionally, some individuals intentionally limit their financial freedom by overspending. I know couples who earn similar salaries yet live extravagantly. They own large homes and luxury cars, while my partner and I choose a modest lifestyle. I prefer to minimize financial obligations, and I prioritize security and freedom over excess.
For those with unique needs, there isn't a universal solution. The key is to be pragmatic. If you can earn a second income without significant stress, consider doing so. Differentiate between needs and wants and avoid unnecessary purchases. Many people could sidestep financial difficulties while still enjoying a comfortable lifestyle by making smarter choices.
Ultimately, if you’re in a situation that restricts your freedom, a side hustle could be a gateway to greater options. If you find fulfillment in your primary career, that’s fantastic! However, for those who feel confined in their jobs, exploring hobbies that could develop into side hustles may lead to newfound independence.
Explore your side hustle and inspire others by completing the MOAM side hustle case study questionnaire.
This content is for informational purposes only and should not be construed as financial or legal advice. Always consult a financial professional before making significant financial decisions.
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