Side hustles have become an increasingly popular way to increase income.
But are they necessary to achieve financial freedom?
“The answer is no,” said Gorick Ng, author of “The Unspoken Rules,” adding that there are plenty of people who don’t have hustles and have been successful.
Still, Ng supports those pursuing a second gig. While not necessary for financial success, they are often desirable, he said.
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“There’s more to life than just a W-2,” he said, adding that he’s seen people use side hustles to achieve many goals, from financial freedom to learning to new skills or a creative outlet.
Before deciding to pursue a side job, people need to establish their goal, whether it’s making more money, exploring a creative outlet, or developing skills they don’t use in their job. full-time, recommends Ng.
If your goal is to make more money, a side hustle might not always make the most sense, said Paula Pant, host of the “Afford Anything” podcast at the Own Your Money (…Before) event. it Owns You) from CNBC on Thursday.
If your main job is in a high-paying profession, it may be better to use your time to get promoted or consult in your area of expertise instead of starting an entirely different side job.
“Choose the most efficient way in terms of time, energy and mind to earn more,” she said.
According to Anh Tran, Certified Financial Planner and Managing Partner at SageMint Wealth in Orange, Calif., where you are in life should also factor into your decision to start a side business. For example, if you’re a college student, you might have more time to devote to a potential gig than if you’re trying to start a family.
It’s important to consider the time and effort it takes to start a business versus the potential gain, Tran said.
“What are you going to have to put into it to get a return and does it make sense for you from a financial standpoint?” Tran said.
When to go
On the other hand, if you’re in an industry or profession where there aren’t many financial rewards, a side hustle could be an effective way to earn more.
“At the end of the day, what ultimately matters is the size of the gap between how much you earn and how much you spend,” Pant said. One way to increase this is to bring in some extra income, especially if you don’t want to reduce shipments.