I’ve been a bit MIA from the blogosphere lately. The month’s worth of content I had written ahead of time has dwindled to about zero, my comments, guest posts, and what not have been on a very low level. Have I given up on the blog? Absolutely not!
Rather I’ve been working on my 2nd side hustle. One that is very different from the blog in pretty much every way. After being inspired by some other parts on the blogosphere, I launched my first Amazon FBA business. It was many many months in the making, with a lot of time, research, trial and error, but we are up and running. In the near future, I’m going to do my best to deep dive in to what I’ve learned and how we started, but today, I wanted to discuss a bit why I’ve chosen to work so hard on our side hustles.
Diversification & Safety
Got a paycheck each week? Good. It’s how most of us get by. But it has it’s weaknesses. Just as you shouldn’t put all your eggs in one basket in terms of your portfolio, same goes for your job. The more income streams you have, the better off you are. There’s no single problem that can destroy your cash flow stream.
So long as your company, industry, boss, or any other random problem can stop that paycheck in it’s tracks, you don’t have your freedom.
YOUR PAYCHECK IS NOT SAFE.
I live in Houston. In the past 6 months the oil industry has lost 200,000 jobs. Thousands of smart, hardworking, good people have lost their jobs, regardless of where they went to school, how many times they’ve been promoted, or how good their performance ratings have been.
This affects me as well. While I don’t expect to be laid off, it could happen any day. If it does, am I as diversified as I want to be? Absolutely not. I haven’t managed to recreate my paycheck from my side hustles. It’s certainly a top goal of mine, but we’re not there yet. However I would be a lot better off than average joe. I’ve got a decent chunk of savings, a small but growing amount of dividends coming in, a bit of blog income, and a growing source of cash flow from my Amazon FBA business. Between them all it’s not enough to live on yet, but it’s extremely diversified and growing. In addition, were I to be laid off, I think I would have the time to focus and a lot of these efforts would scale quickly because I’ve already built the foundation.
Let me repeat: YOUR PAYCHECK IS NOT SAFE
As I recently mentioned in my newsletter, the dentist who killed Cecil, regardless of your opinion of him, has had his life ruined. I’m sure someone who is used to success through all that school and has built a successful practice, never imagined their multi-hundred thousand dollar business being destroyed overnight.
If that dentist had 6 figures in diversified dividend income or apartment complex rents, then he could hunker down and wait out the storm. Same for rents from houses and apartments, or income from some other combination of side businesses (a blog perhaps?). Ideally the answer is all of the above. Own an apartment building. Keep a diversified portfolio of dividend paying stocks. Buy a laundromat or build a blog.
Nobody at Hershey or Exxon is going to cut off your dividends because they don’t like hunting. If you structure it correctly, those protesters outside your office will continue to use your laundromat or liquor store or buy products from your website without ever knowing these are your assets. You can remain anonymous, which can sometimes be worth it’s weight in gold. Stealth wealth is often the name of the game.
Each new layer you add is a redundancy in your life. A way to sleep easier and breathe deeper.
How scalable is paycheck? For most people, the answer is “not very”. Unless your on the executive track (in which case you probably don’t need this blog), your getting raises from 5 – 10% a year at the absolute best (maybe 20% upon the occasional promotion). This means that your path is going to be the slow path to financial freedom. There’s nothing wrong with this. It’s what the bulk of financial freedom community are doing. You’ll get there, it just may not be as quick as you would like.
A business is different. It allows you to take your human capital and leverage it. If you have a blog, you can reach millions. People like Pat Flynn, Ramit Sethi and others have shown that 1 person with a blog can build a scalable, meaningful business with a 7 figure income.
It doesn’t have to be a blog. We could name big names, like Bill Gates, Mark Cuban, or others on the Forbes 500. Those people are hard to relate to. It could also just be the local guy owns a few dozen laundromats in the area. He’s taking it easy, working 20-30 hours per week and managing his business. Same goes for the person who owns your local liquor stores or apartment buildings.
In addition, you can’t sell your paycheck at a multiple. A $1MM business is worth $5-10MM upon being sold. Can you do that with your job? Hell no. Once you’ve built an asset, it can be so much more. That’s how the rich get richer.
There is a percentage of the workforce that genuinely loves or at least enjoys what they do. I think that label may apply to a lot of people in the medical field, teachers (maybe), and a variety of people across cube nation and other areas of life. However, I think that’s the minority. Most people range somewhere between dislike to mild indifference in their work.
Your side hustle can be different. It can be whatever you want it to be. You can create your passion project, work on your dream, or just focus on building a sustainable business that you can be proud of. There’s something immensely satisfying about building something of your own. Creating a business. Building a brand. Nurturing a community. There’s very little in the business world more satisfying.
Go find a side hustle (or 2). Don’t wait. Get started. Protect your wealth, your family and your cash flow. Create something you can be proud and maybe get rich in the process.
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