Recently, I found myself at a crossroads when a startup founder approached me with a tempting part-time consulting role. As a tech worker in my mid-thirties based in San Francisco, I was very tempted by the opportunity at first glance. However, after careful consideration, I made the tough decision to turn it down. This incident sparked a profound reflection on the concept of side hustles and how they can impact our financial goals.
Photo by Ralfs Blumbergs on Unsplash
When Side Hustles Don’t Make Sense
Below are a few reasons why side hustles might not make sense. They do not all have to be true for us to turn down a side hustle.
Endangering Job Security
One of the primary reasons that led me to decline the part-time consulting role was the concern surrounding my job security. As a tech professional, I’m well aware of the competitiveness and volatility in the industry. Working multiple jobs within the same or similar field can raise significant conflicts of interest, making me uncomfortable with the potential risks it posed to my current job.
On one hand, I grappled with the idea of discussing this side gig with my manager. Would they understand and support my decision to take on additional work outside of my regular employment? On the other hand, keeping it a secret felt equally unsettling, as I feared the consequences if they were to discover it independently.
In a world where loyalty to employers is often valued, engaging in side hustles within the same industry can create a perception of divided commitment. It’s generally frowned upon, and rightly so, as it could lead to questions about our dedication to our primary role. This realization made me cautious about putting my job security at risk and made me prioritize the stability of my current position.
You’ve Reached A Target Savings Percentage
This was not the reason for me turning down the offer, as I’ve had a pretty significant year when it comes to expenses. In the midst of moving into a new house, renovations, and planning a wedding.
One helpful exercise is to check on your current savings rate. The 50/30/20 rule says that 20% of income should go towards savings and investments. For FIRE aspirants, many target 50%+. Taking on an additional side hustle would have only marginally increased my savings rate, making it less of a priority in my current circumstances.
Balancing Work and Life Goals
Life is not solely about chasing financial numbers on a spreadsheet. While side hustles can offer additional income, it’s essential to strike a balance between work and personal life. In Surviving the Boring Middle, I believe maintaining a healthy work-life balance is paramount. This year, I’ve dedicated much of my non-work time to develop my creative side, work on projects around the house including a bathroom remodel. Instead of optimizing for a number, it is important to dedicate time to activities that bring joy, relaxation, and personal growth.
Evaluating Hourly Rate
While the part time job offered me additional income, the hourly rate was lower than what I earn in my main job. As a tech worker with considerable expertise and a stable income, I found that the part-time offer was not comparable to my regular compensation. Considering the effort and risk required to juggle both roles, the math simply didn’t add up.
Achieving Net Worth Goals
Everyone’s journey to financial success is unique, and net worth goals differ from person to person. Once specific net worth goals have been achieved, start reevaluating the need for side hustles.
For instance, a recent graduate might take up side hustles while starting his career in a new city and paying off his student debt. After being promoted a few times and paying off his student debt, his time might be best spent on other things.
Seeking Personal Equity Building
Taking on a side hustle can divert valuable time and energy away from personal equity-building endeavors. Personal equity encompasses not only financial investments but also investments in one’s knowledge, skills, and projects. In my case, the decision to decline the part-time consulting role stemmed from my desire to dedicate more time to my own business ideas and creative pursuits.
What To Do Instead of a Side Hustle
Rather than seeking external part-time jobs or gigs, I am investing time into my own hustle.
Building an online presence has become increasingly essential in today’s interconnected world. These can come in a form of building a social media following, starting a newsletter or a Youtube channel.
Through platforms, anyone can share their expertise and experiences. This often starts off as a hobby, but eventually can grow into a community of like minded individuals, collaboration and opportunities in the long run.
For me, I’m channeling my energy into building up this blog. While this blog won’t be paying me a monthly part time rate in the near future, I am laying the foundation for a potentially more sustainable income stream.
Building Equity is the Key to Wealth
True wealth comes from striking a balance between immediate financial gains and delayed gratification for a greater good. Instead of pursuing side hustles solely for quick money, consider investing in our own personal equity, diversifying our skills, and exploring opportunities in different fields.
Building a brand, an online presence, or a portfolio of personal projects can lead to more substantial and sustainable rewards in the long term.
In this phase of my wealth building journey, I am learning to juggle between my primary career and personal ventures that align with my long-term objectives. Building equity for ourselves requires delayed gratification which pays off after years of foundation.