What do the Numbers Look Like with a Side Hustle?
You may have read my previous article, My Top Ten Side Hustles. In that post I listed out my favorite side hustles and why I like them. Now, let’s take a look at what having a side hustle can mean for you as far as an investment.
Side Hustle Money
Let’s say you had four clients where you mow their lawn weekly. When I mowed lawns, I locked my clients into 25 mows per year so 22 is a conservative number.
That’s four clients, 22 mows each per year, at $35 per mow, for a total of 88 lawn mows per year.
At 88 total mows, that’s $3,080 a year income.
These numbers are easily doable on any side hustles on that list. Let’s run the numbers to see what it looks like when you invest this side income into a low-cost index fund.
Investing the Side Hustle Money
For kids out there where this is your only income, you won’t have to pay taxes because you’re below the income threshold. Let’s run the numbers assuming no taxes will be paid.
We’ll use the average of 10% return assuming you’re investing in something like VOO – Vanguard 500 Index ETF, which has a lifetime average return of 12.42% since its inception.
After:
5 years you’ll have $25,000
10 years you’ll have $61,000
15 years you’ll have $117,000
20 years you’ll have $209,000
30 years you’ll have $594,000
Just by adding $3,080 to your investment account every year from your side hustle! I love the power of compounding!
Now, at some point, you’ll be paying taxes but you’ll also be charging more for lawns as time goes on.
This is from a small side gig where you make $3,080 a year. This is barely any work at all.
Substitute Trash Time
The average person in the United States spends over 2 hours a day on social media. Let me tell you from experience that, depending on the location and size of the lawns, you can get four lawns mowed in 2 hours.
And you get a workout! Two birds, one stone.
But it’s not just the two hours that you’re wasting on social media each day. Most people spend even more time watching TV.
The average American spends over 3 hours a day watching TV. That’s five hours of trash that you could turn into income.
Just think about what those compounded numbers would look like if you replaced a quarter of that trash time with a side gig.
Stop watching TV and the numbers above double. DOUBLE!
I’m not even asking you to stop watching TV and messing around on social media. I’m only asking you to stay away from them for one to two days. Two days out of a seven-day week.
Look at the numbers above and tell me it’s not worth it. Do yourself a favor and replace that wasted time with a side hustle effort.
Invest the income earned and boom! You’re well on your way to financial freedom.
In Your 20's
For those that are in their 20’s or for those that have kids that can start working this, below is an additional chart:
After:
30 years you’ll have $594,000
35 years you’ll have $976,000
40 years you’ll have $1,600,000
45 years you’ll have $2,584,000
50 years you’ll have $4,182,000
Get out of here with these numbers! Yes, these numbers are over an extended period of time but this is from a side hustle. Also, wealth isn’t built over night.
I’m not talking about building a business. This is just replacing your social media and TV time with an activity that earns for you.
I’m talking one or two days a week for 2-3 hours. Don’t forget, this is also a great physical activity. Something else you’re not getting from TV and social media.
30 Year's Old
If you’re thirty years old, you have the time to make the numbers work. In fact, the oldest you’ll be is sixty at the end of that thirty-year compound number above.
The age for retirement in the United States is sixty-seven. You won’t even be at the retirement age yet!
Retirement Ages Around the World
Men Women
UK – 66 66
France – 62 62
Germany – 66 66
Greece – 67 67
Italy – 67 67
Brazil – 65 61
Mexico – 65 65
Argentina – 65 60
Australia – 67 67
China – 60 55/50
India – 58-65 58-65
South Africa – 60 60
No matter where you live, the retirement age is either well over 60 or close to it.
31 – 40 Years Old
If you fall into this group, you still have a lot of time for the compounding to work its magic. We’re talking a minimum of twenty-seven years until “retirement age” in the US.
That’s an incredible amount of time to build wealth. You can make a real difference in the type of retirement that you’ll have.
You can actually live out some golden years instead of settling for bronze years. Or even worse.
41 – 50 Years Old
If you fall into this category, I want you to remember one thing. We’re only replacing 2-3 hours a week of trash time. Trash time on your phone or TV.
Those on the lower end closer to forty-one have a lot of compounding years until sixty-seven. Even at the higher end of fifty, you still have seventeen years.
Let me address all of those excuses you’re kicking around:
- I’m too old to mow lawns – do one of the million other side hustles that there are out there. The list is endless.
- Based on my age, it doesn’t add up to much – it adds up to more than you were going to have for retirement. Also, you don’t have to invest this additional income. You can use it for vacations, gifts, charity or anything else you want to spend it on.
- I don’t have time – Ok, stop. You have the time. It’s just not a priority for you. If you really feel like you don’t have time, sell your tv and erase all social media apps off of your phone. Because if you don’t have time for this, you don’t have time for them either.
- There are too many people doing “X” out there already – We’re not talking about starting a legitimate business here. We’re talking about a few clients that will bring you extra income. It’s not difficult to find a few clients a year in anything.
- You’re scared – I get it. New things are scary. You’re scared of not knowing what you’re doing. You’re scared of failing. However, you’ll learn as you go. If you fail, so what! It’s a side hustle, it’s not something that defines you. Better yet, don’t let anyone in your circle know that you’re doing it. Side hustle in silence. If it doesn’t work out, no harm no foul.
- I don’t know what side hustle to start – Start with google and find lists upon lists of different side hustles. You can make money doing just about anything these days. What do you like to do? That’s always a good place to start.
- I’m not ready yet – You’re never going to be ready. It’s never going to be the right time. Never. You just have to do it.
Don’t make it harder than it needs to be. Just get started. Once you’re started, focus on being consistent. The compounding handles the rest.
Get out and do something. Get out and live. Get out there and be somebody.
