I have a friend with a CPA, that like me works for a major oil and gas firm. I always knew he was working his side hustle but I didn’t how well he was actually doing. In a few years of hard work, my friend has managed to amass almost $30,000 per year in side earnings! 2,500 per month! That’s massive. His side business is more than many people manage to make in a year.
How did he do this? One tax return at a time. Over the past 5 years he built up a reputation for doing quality work for people with taxes that are a bit too complicated for an inexperienced person to handle on turbotax. This has largely consisted of small business owners. Unfortunately, the vast bulk of this income all hits between February and April.
To mitigate the seasonality, he’s continued to work to build a second stream of income using the same skill set. Leveraging his small business network, he’s now landed the day to day accounting for several small businesses. Basically he takes what the bookkeeper does on a daily basis and consolidates and checks everything monthly, to provide the owners with usable information.
So now my friend has not 1, but 2 revenue streams, with different timing and a diverse customer base. He’s managed to do all of this while keeping his day job. That extra money allows him to fly back to Florida to see family more often, build up a nest egg that was used for a house down payment and the rest keeps hitting his savings, trading, and retirement accounts.
Building a real side business has immense benefits.
It adds real resiliency to one’s life. We work in energy. My friend’s side business is not connected to this at all. If we all start getting laid off, he has the comfort of knowing he can continue to pay his bills.
It’s scalable. Unlike a typical 40 hour week, my buddy can put in as much or as little time as he wants. He create something that fits his lifestyle and adjust as necessary. In the event of that layoff or he just hates his job, he has the option to turn try to build it up to a full time income without the risk of starting from scratch.
He will reach his goals that much faster. If he puts away this $2,500 per month (every month) for just 10 years, assuming 7% compounding, that’s an additional $437k toward retirement. If he continues to make these contributions for 20 years you end up with a whopping $1.3M! Yes I realize I’m ignoring expenses (they’re tiny) and yes I’m ignoring taxes. Those details would complicated things and miss the point of the post. Most of the taxes could be eliminated through some clever work around a SEP IRA, solo 401k, and creative expensing.
Conclusion
We should all be hustling on the side. Whether it’s income from blogging, doing taxes, selling things on etsy or ebay, or taking photos on the weekends. We should all be working to build resiliency in our lives.