Hi, Everyone! Mr. Minion here.
Let’s consider this statement: Taking up side gigs will help you retire earlier. True or False?
Most people will choose “True”.
The logic behind the answer: You earn more, so you need a shorter period of time to amass the fortune you need to retire.
However, I beg to differ. I strongly feel that side gigs may not be good for your financial health.
Here is the reason why:
As I have explained in one of my previous posts, we have to manage our finances like how a listed company does.
So, taking up a second job (or having a side gig) as an individual when translated to the point of view of a listed company would be to start a second business line. At this point of time, all of you might think that starting a second business line can only be good for the company – more business line, more money.
However, you must remember that the number of employee that your company has remains the same. In this case, only one employee – you.
With two business lines, you will be overstretching the employee. The time that could have been focused on improving the main business line now have to be directed to the second business line.
Let’s say the employee (which is you) can take the extra workload and stress, then the question now is – How long can the employee maintain this workload without it having an effect on his health? Remember how I mentioned that being healthy is the foundation to early retirement?
That being said – I am not saying “no” to side gigs. What I am saying is, please think it through carefully before you take up a side gig. Consider how it will affect your life, your health, your current job and so on.
For example, instead of driving an Uber/Grab during lunch and before/after work where you will probably earn $10-$20 per hour, take up that tuition assignment that pays $30. Instead of starting a photography business that will take up a whole weekend, do an online business instead where you can mail out the items on your way to work.
Remember, having multiple gigs may benefit your short term financial health, it might not necessarily be beneficial to your long term financial health.
Till next time then.