Rules of the Game
The object of the economic game we play is to work 40 or 50 years, hopefully at something we enjoy and to amass enough savings and assets to be able to live comfortably after we retire. When our job doesn’t provide enough income to both fund our current lifestyle and to build our retirement portfolio, we might begin to think we need a side hustle.
Most of us would agree that living on Social Security is not a comfortable lifestyle. Provided that Social Security will even still be viable 20 or 30 years from now..
We can probably agree though, that with an average payment of $1317 per month, we won’t be able to depend on Social Security alone.
Lifestyle, not money, is the secret
Imagine this scenario, if you will: You live in the home of your choice. The mortgage is paid off. Additionally, you drive the car of your choice, with no payment. Furthermore, you carry no balances on your credit cards and carry zero personal debt.
With this debt-free, no-payment lifestyle, you also have a monthly income of $8000, whether you get out of bed or not. With no debt, no payments and a dependable income, you would have a lifestyle better than most millionaires.
It would take $1,900,000 in the bank, earning interest at 5% to generate $8000 a month in income.
If you’re going to achieve that lifestyle by investing, the trick is to save up the $2 million. To do that, you first have to earn an income. Then pay all your bills and have enough left over to invest and reach that $1.9 million goal. After your mortgage (or rent), your car payment, taxes, groceries and all your other bills, how much do you have left over?
This is why you need a side hustle.
How much money do you really need to retire?
Maybe $8000 isn’t the right number for you. Maybe it’s $4000, or $10,000. This chart shows how much money you’d need to have invested at what interest rate for a variety of monthly incomes. Pick an income amount that would be comfortable for you, pick an interest rate that you think is realistic and you will see the amount you need to have saved to hit that.
How close are you to where you need to be?
How much do you still need to save up?
Many people claim that mutual funds average 10% to 12% returns per year. In fact, the average investor achieved a 2.6% net annualized rate of return for a 10 year period, 2.5% for a 20 year period and 1.9% for 30 years. https://www.forbes.com/sites/advisor/2014/04/24/why-the-average-investors-investment-return-is-so-low Investing strictly in the S&P 500 for that 10 year period gave a better return, averaging 7.4%. This is a far cry from 12%.
We know it takes $1,000,000 to $1,500,000 to achieve a $5000 per month income and $2,000,000 to $3,000,000 to achieve a $10,000 per month income.
How many people do you know who are going to be able to accumulate that much by the time they retire?
Do you think that maybe you need a side hustle now?
A home business is a simpler solution
A person diligently working a simple, proven system can, in 2 to 5 years, build a part-time income of $5000 to $10,000 per month. This residual income will act as an asset equivalent to that $1,000,000 to $2,000,000. The money spends the same.
If it takes 5 years to build an income of $5000 per month, what does the first year look like?
It takes $60,000 in the bank to generate $300 per month income. How many people do you know that can save $60,000 over the next 6 months to a year? You could build a business that earns $300 per month in a few months.
We have a simple system where you can invest a few hours per week to get started. As you learn and progress you can build up a business to whatever level you are willing to work for. I don’t know of any job, except a home-based business that can give you this chance, this opportunity.
If you think that yes, maybe you do need a side hustle, I’ve put together a 2 minute video that outlines a simple and profitable business that I’m doing. You can watch it here.