Financial Friday #71 : Hustling on the Side? Do it with Purpose
Enriched Academy Co-founder Kevin Cochran learned a lifelong lesson in his early twenties. He bought a car on a credit card because he reasoned, "I can just work more and pay it off". He soon realized that buying an expensive, depreciable asset at 20% interest with a lot of operating costs when you really couldn’t afford it to begin with was not sound financial decision making!
Kevin started Enriched Academy because he learned that mastering your finances requires knowledge, a system for managing and investing your money, and goals. Working longer to get more money to throw into a broken system with poor financial decision making will not solve your problems. It will also rob you of your time. Billionaire investor Warren Buffet said it best when he stated, "If you don’t learn to make money while you sleep, you will work until you die."
However, we will admit that if you are disciplined and have the time, working a little extra (even temporarily) might be an option. We’ve listed a few side hustles below to give you some ideas, but please, make sure to have a purpose before you commit – pay off a credit card and eliminate that 20% interest you now pay every month, or put the money in your TFSA or RRSP and start building some passive income.
Short-term rentals. While sharing your home with strangers is not for everybody, platforms Like Airbnb make it easy and can bring in some serious cash. You can rent a room, a basement suite, or even a treehouse on some sites. Figure out what kind of "rentable space" you can create and make sure to check out local demand, rental rates and your municipal bylaws before you commit.
Leverage your car. If you have a car, why not try to claw back some of the insurance, depreciation and repair costs you are already paying by signing up for a food delivery or ride share service. We haven't tried any of the following and availability depends on where you live, but you could check out DoorDash, Uber, Uber Eats, Skip The Dishes, Lyft or Foodora.
Clean out your closet. Kill the clutter, save the planet by recycling, and cash in! It has never been so easy to flog unwanted items and what people will buy may surprise you. Old toys, dishes, clothing, sports gear, furniture…clean it up, snap a nice photo, and then dump it on Facebook Marketplace, Craigslist, Kijiji, or the local buy and sell - and wait for the notifications to roll in.
Start an online shop. Do you have a particular passion or some sort of artistic or creative talent? If you have already invested a lot of time and effort into a hobby, your knowledge might give you a leg-up on the competition in an eBay, Amazon or Shopify store. If you have artistic or creative skills, check out Etsy and see if your talents could compete with the current offerings.
Do what you usually do. What do you do 9 to 5 and is there any opportunity for overtime, or are you able to take what you know and offer your services privately? If you work in the trades or marketing for example, chances are you can find some work on the side with a little digging.
Get a part-time job. If none of the above fit your lifestyle or skills, you could always get a part-time job. Even at the minimum wage of $12-$15 hour, you could take home $400 to $500 month for a couple of shifts each week. Added perks are you can look for something enjoyable that interests you, something close to home for convenience, or something simple to avoid stress.
"Making more money" is the most common solution we hear for how to solve financial problems. In our experience it isn’t the first step, it steals valuable time, and it usually doesn’t work if you don’t solve the root cause. Make sure to give it some thought before you start racking up the hours.
If you would like to hear how Enriched Academy Co-founder Kevin Cochran went from buying a car on a credit card to personal finance mastery by the time he hit 40, tune into his webinar next week. Kevin will be sharing some great tips on how to increase your income with his entertaining style and straight-up advice.
Resources
How does credit card debt affect a mortgage application?
Another great read from MoneySense - concise, easy to understand, and loaded with facts. If you are in this situation, or simply want to know more about how Canadian financial institutions assess mortgage affordability, this article would be a well-spent 5 minutes. PS... If you like MoneySense articles, check out their YouTube channel.
2021 Mid-year market outlook: 3 experts weigh in on the next 6 months
No one has a crystal ball and we recommend investing with a long-term horizon, but if you like to follow the markets, this quick read has some great insights based on the markets post-pandemic situation and how rising inflation may factor in.
This Canadian city has the 3rd least affordable housing in North America
It's no surprise that Vancouver and Toronto top the list, but a newcomer on the scene has just passed Los Angeles and San Jose, CA to make it an infamous podium sweep for the home team.
12 tips on finding your way to financial Nirvana
We couldn't agree more with this one - some great tips on how to pile up enough savings, investments, and cash on hand to retire or pursue the career and lifestyle you want without being driven by financial need.