3 Reasons You NEED A Side Hustle | How A Side Hustle Can Change Your Life

Diversifying your revenue streams is one of
the most important things that you can do to improve your Financial Health. And as it turns out there are far more benefits
to creating a side hustle than just the monetary factors and in this video, I’m going to show
you the math behind why that is as well as discuss some of my own experiences with my
side hustle and how it changed my life. Today I’m going to be going over the top
3 reasons why I think you need to have a side-hustle. Hey everyone Daniel here and welcome to Next
Level Life a channel where you can learn about Investing, debt, retirement, and many other
general financial education videos because the school’s aren’t going to do it for us. So if any of those topics sound interesting
to you or if you want to learn how to better handle your money and have more financial
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video with a friend, and leave a comment below letting me know what topics you’d like me
to cover in future videos. The first reason that I think everyone should
have some sort of side-hustle is the added security that it provides. Most of us only have one source of income
and that would be the salary from our jobs and that’s all fine and good you can create
a financially successful life based off of just that however there are so many unknowns
when it comes to the job market and the larger economy as a whole. What happens to you when the economy tanks
if your company decides that it needs to lay people off in order to stay afloat? Unless you’ve had enough time to set your
financial affairs in order already you’re likely to experience a sudden and drastic
change in your standard of living until you either find another job or your company is
able to bring you back and having a side-hustle can help to limit that drop off in lifestyle
or even prevent the drop off from happening in the first place depending on how well it
is doing for you. Even something as small as $500 or $1,000
a month can help delay the need to dip into your emergency fund, or heaven help us, credit
cards while you try to regain your previous income. The second reason that I think everyone should
have a side-hustle is that it can help speed up your path to financial independence. Now you’ll see a lot of stuff online about
creating passive sources of income and there’s nothing wrong with that method, I’m a fan
myself, but that’s not the only way to create more sources of income. Some people get a second job, some people
deliver pizzas on the weekend, some people go onto Craigslist and look at the free section
and then go grab some of that stuff and sell it on Craigslist or eBay or Amazon for a profit,
some people do a similar Thing by going to Dollar stores and buying something for less
than it’s worth and then turning around and selling it at market value, others hire property
managers and get housing or apartments that they can then rent out at a profit without
having the inconvenience of having to fix toilets. And it may not be as much as you’re making
at your job but it’s a nice secondary source of income which can help you pay down your
debts faster or invest more early on when you still have a lot of time for that money
to compound on itself as well as mathematically make it easier for you to retire early if
you wish to. So there are tons of ways that you can create
multiple streams of Revenue it really just comes down to what one works best with your
skill set and your goals as well as the lifestyle you want to lead. And I’m not going to go over all the various
ways that you can go about making this side income in this video that’s not what I want
to focus on here maybe in the future video but not today, today I just want to focus
on the math behind why finding something that will allow you to get another Revenue stream
is important. Now I’m not going to focus too much on the
debt payoff end of things in this video because I think it’s obvious to all of us that if
you’re throwing more money at your debts you’re going to pay them off faster. The thing that I’m more interested in is what
this does mathematically for those who wish to retire early. Because one of the biggest roadblocks to early
retirement for a lot of people is that they feel they need to have a million dollars or
$3 million dollars or some huge chunk of money set aside in order to retire early, you see
this brought up a lot with people like Suze Orman. And while it’s certainly going to help if
you have a lot of extra money because it gives you more wiggle room in retirement it’s not
necessarily required. Now don’t get me wrong I’m not saying don’t
invest, I’m not saying don’t try to get a large sum of money before retiring because
you definitely should still do that, but I am saying that there are other things you
can do to supplement those Investments and maybe speed up your time to be able to retire
early if you wish to. For those who have been watching my videos
for a long time, you’ll probably remember me talking about the 4% rule or the safe withdrawal
rate which is a rule of thumb that many early retiree hopefuls use to get a good guesstimate
of how much they would need to invest in order to retire early. The too long didn’t watch version is, in general,
you need roughly 25 times your annual expenses in order to be able to retire and have a reasonable
chance of not running out of money. Now some people say 25 times is not enough
so some people use a 3% safe withdrawal rate and say you have to have 33 times your annual
expenses but again it’s a rule of thumb to give us a ballpark estimate, to give us something
to shoot for but everyone’s situation is going to be a little different. However, in general, it’s a good ballpark
estimate and it’s the one I’m going to be using for the math in this video because I
have to use something otherwise the equations never get started. So say if you wanted to live on $3,000 a month
in retirement or $36,000 a year which if you are debt-free is definitely doable especially
considering that you’re going to have to get pretty good at controlling your expenses if
you ever hope to retire early. $36,000 a year times 25 is $900,000, so that’s
our starting goal but what happens if we had income coming in during retirement? Let’s say you started a blog on building your
own business where you show people how you built your business what tools you used how
to get through the ups and downs particularly in the early stages and all that sort of stuff
and you started using ads, affiliate marketing as well as selling an ebook on your blog to
generate some sort of income. Over the course of your first year, you begin
to build a following and find that by the end of the year you’re generating $1,000 a
month on average from your blog through the sale of your books ads and affiliate marketing. You enjoy writing on the blog and figure you
could continue doing this fairly easily when you retire which means that in addition to
your Investments you’re actually bringing in $1,000 a month on average in retirement
if not more because the business might continue to grow. If we’re being honest, $1,000 a month is
not that much money to make on a business, assuming you are consistently providing good
value to your customers, especially if you keep your costs low and have been working
on it for years which at that point they would have been. But $1,000 a month is $12,000 a year. $12,000 a year in income during retirement
means that that’s $12,000 a year you don’t have to take out of your Investments. Meaning that your Investments don’t actually
need to cover those particular expenses. They only need to cover the extra $2,000 a
month or $24,000 a year that are not covered by your business. $24,000 a year x 25 is $600,000. So generating this side income has saved you
from the need to invest an extra $300,000 for retirement. And if you do the math on the difference it
can really be an eye-opening experience. Say if someone had already managed to invest
$600,000 in retirement, but didn’t have any side income. They have done it over the long-haul investing
roughly $1,000 a month every month for a little over 20 years at an average rate of return
of 8%. At this rate, they would have to continue
working for nearly another 4.5 years to reach the $900,000 mark. However, if they started working on a side
hustle from the beginning, generating roughly $1,000 per month and threw that into their
investments then instead of retiring in 24.5 years with roughly $900,000 they would be
financially independent in about 13 years and 9 months with $600,000 which means they
are capable of leaving their jobs almost 11 years earlier than they would’ve without
the side-income. Now, of course, they could continue working
until they reach $900,000 shortly after the 17-year mark, but even then it still a savings
of 7 to 7.5 years. Either way, it’s quite a lot of time that
you’re saving. The third reason that I think everyone should
have a side-hustle is that it has the potential to radically change your life. For the record, this is what happened to me. As many of my long-time viewers will know
my dad used to talk to me about finance quite a bit. He was always interested in the subject matter
and realized how important it was to properly educate his kids about finances. I also realized that schools didn’t really
teach us about money, heck even the financial classes I took while in college didn’t teach
me much of anything about handling my own personal finances. And even though my dad died while I was young
and before he really had enough time to implement many of the ideas he taught me about I could
see even then how impactful it could be on someone’s life to be properly educated about
finances just by where I was in my life at the time. Even something as seemingly small in the grand
scheme of things like finding out a way to graduate from college debt-free so that you
aren’t putting yourself in such a large hole so early in life can make a huge difference. So I looked at where my life was then and
the trajectory I was on and a desire began growing within me to pass on what my dad taught
me to as many other people as I possibly could because if I could just get 1 person, just
one to really get it, to get something to click inside them with money then that is
an entire life that gets changed for the better and that would make it all worthwhile. It shifted my entire life plan, it helped
me to decide to try out semi-retirement at 24 so that I could have more time to make
these videos and work with people individually to achieve the same level of freedom and choice
that I’ve been lucky enough to experience. So I hope that between me and others like
me you are able to take the first, second, or last steps on your journey to reaching
your dream life. So those are the top 3 reasons, at least according
to me, why I think everyone should look into getting a side-hustle. But that’ll do it for me today once again
if you enjoyed this video be sure to subscribe and hit that Bell next to my name so that
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with them and let’s really get this information out there and start our own Financial revolution.

21 thoughts on “3 Reasons You NEED A Side Hustle | How A Side Hustle Can Change Your Life

  • Awesome video, as usual. 👍 I'm already somewhat retired and will be fully retired in March of next year. I'm considering a "side hustle" (in quotes because it's the lingo of young folks :)) to keep my brain active and challenged.

  • Coming from the middle class. It’s very hard to transition from one income to trying to build passive income like investing, clearing, debt and money online. School system is so terrible. We got to turn the tables man!! Good video

  • At the moment, my side hustle is overtime at work! Next year, it will be selling flowers I have grown – to florists and at farmers markets..Very good video.

  • Well, you have made a lot click for me. You were the first person I found teaching about personal finance. Thank you for all your videos!

  • Can you talk about how to become your own personal banker? I saw a video a while back talking about it and they mentioned an infinite something content. Can’t remember what it was.

  • Why not include social security income as part of the equation? So lets say, in your example, you need $900k by the time you retire. Lets also say that you will receive 2k a month from social security, 24k annually. That leaves you only needing 12k a year for retirement, or 12k x 25k= $300k. That's a lot less than you made it out to be, no?

  • I feel your advice is good, but apparently rather geographically bound. Over where I live (i.e. Western Europe), a $1000/month extra net income would be adding about 1/3 to 1/2 of what most people make from their main jobs. That is in no way a ‘small’ amount.

    I have that feeling with a lot of your videos, you casually throw around enormous amounts of money to be invested per month. I guess my question would be: what about people like me who can invest a lot less (say $1000-$2500 per year on the top end). What should they expect and what would be the best strategy for them?

    As is, I often feel somewhat dejected watching your videos – rather than showing smaller amounts of money can help, your videos seemingly prove you really do need an awful lot of disposable income to get anywhere (for example, you have one video about reaching financial independence that assumes a $3000-$4000 investment per month – which is more than the combined net household income of plenty of families over where I live).

  • great video. Having a side hustle help me through college. Also learned the value of managing money early on life.

  • Im thumbing this down for taking 11 mins to say get a side job to supplement your income well into retirement. Holy crap man get to the point

  • i been side hustling for a while now already. gonna stop on it soon (because its a waiter job and i dont get too much benefit from it) it will free up some time for my real plan in life for my side hustle that will be supported by the education that im taking.

    when i started to side hustle i didnt earn money that i could say this helps me i started my education that takes about 4½ years to complete but most of this time i will spend (in best cases) at a company with about half as much income as a full position which is a big thing for me. i will stop my waiter side hustle for making programs or games. my dream have always been to make games, ill likely be working on it as a side hustle unless i will get the income that will make it possible to work less hours for more. i should make programs to help me be more productive

    i wont go into debt by doing my education but it might be possible to even pay debts off(i have one but no interest on it because its debt to a family member) but i'll do what makes sense in the long run for me.

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