AKA: How to Make it RAIN
If you had no idea how much debt I have, but knew my annual income, you could be forgiven for wondering why I take on the amount of freelance work that I do.
If you’re reading my blog, you’re probably a hustler too, so pretend for just one second to be an average Joe-Jane-Doe. Average JJD works hard at their job, but doesn’t actively pursue opportunities to knock it out of the park. They don’t engage in side hustles. Average JJD wonders why the hell you’d hustle away your weekends instead of spending them at the lake.
I’ve noticed something about other people who are in my line of work. Software marketing, particularly B2B software marketing, is a lucrative field, especially as you progress up the career path. Yet many of the senior managers and VPs also have a side hustle.
Side hustles aren’t just about money, although that’s a nice perk. They can be part of a bigger system to help you build skills, network in your industry, pump up your hustle pipeline, and achieve all of your financial goals.
What’s a Prosperity System?
The bulk of millionaires have a multitude of income streams. Most of them aren’t reliant upon earned income. That’s what financial independence means.
That’s great and all, but when you’re just starting out, it can seem a little overwhelming. Great – now I don’t have to just work on my career, I also have to figure out how to generate three or more new income streams?
It’s not as daunting as it sounds. I’ve coined the term “prosperity system” to encompass more than just your day job or your side hustle.
Here’s what my current system looks like:
- Kill it at my day job. This includes everything from negotiating my salary to taking on opportunities for new and expanded responsibilities.
- Slay on the freelance front. Take challenging assignments that will further grow and strengthen my skillset, build solid relationships with my clients.
- Look for opportunities to further invest in my skillset. There are lucrative skills that are somewhat related to my day job and freelance gigs. A good example of this would be SEO. As a content writer, I’m familiar with SEO, and one of my freelance clients has taught me a lot about it, but there’s so much more to learn! Learning more about SEO could make me a better content manager at my job and for my freelance clients.
- Invest in my 401k. I’m not going to talk about this in this post – my system doesn’t put much focus here (yet). My current system is focused on increasing my skills and shorter-term income, so that I can increase my momentum towards longer-term goals.
These four components contribute to my current and future income streams. They’re building the foundation for the future. They also contribute to…
Financial Security: Having a Back-up Plan
When you’re a millionaire, your multiple streams of income protect you in case a single stream tanks, much in the way a diversified investment portfolio protects you in case a single investment goes under. (See here, here, and here for reference.)
When you’re not a millionaire, ideally you have a significant emergency fund.
However, when you’re just starting out, you likely have a smaller “Oh Shit” fund, and the number of “oh shits” you’re likely to encounter feels somewhat larger. Consider how having a prosperity system in place could cover your tush in case of the following events.
We have a job loss plan. Because Hubs works in an unreliable industry, we’ve outlined what our spending would look like in case he (or I) lost a job. That plan made it clear that money would be tight. Very tight. The extra income from a side hustle could help make ends meet, obviously, but I think there’s a more important value.
Let’s pretend (and pray this doesn’t happen) I lose my job. I now have a substantial freelance portfolio that I can bring to an interview. I can showcase not just one or two different tones or types of companies I’ve worked for, but five or six. That makes me a more attractive, experienced candidate (which will in turn help me negotiate a better salary package at a new job).
I can also showcase how various projects contributed to individual skills. For example, the client that’s taught me more about SEO, or another client who taught me more about WordPress. While it’s fun for me to learn those things, there’s also a potential dollar value associated with them. In an interview, I can demonstrate curiosity and willingness to learn (two traits that are attractive to employers), and show that I actively pursue opportunities to add more value to my day job.
Also, if something happened, I now have a larger network of people I could reach out to for referrals and job leads.
Cash Flow Unexpected Expenses
On a smaller scale, a pipeline of secondary income makes unexpected expenses – the small “oh shits” – less dramatic. For example, Hubs had a tire blow out on the highway the other day. Instead of taking a hundred bucks out of our regular budget, putting it on a credit card, or withdrawing money from our emergency fund, it was easy to just divert that money from my side hustle paycheck. No big deal.
That peace of mind is huge. One of the hardest things about just starting out is that every little speed bump can feel like it detracts from your emergency fund. That makes it even harder to build the 3-6 month expenses cushion, which is frustrating. Having just a little extra cash here and there makes life a little smoother.
Savings and Debt
And just to hit on the obvious, for the sake of thoroughness: when you make more, it’s easier to save more. Again, I’m assuming if you’re reading this blog, you have some idea of what your expenses are, where you’re choosing to decrease your spending, and where you’re choosing not to.
Extra money helps knock down debt and fatten up your savings account.
Create Your Prosperity System
Ready to build your own system (and maybe make your own PowerPoint art)?
Here are the steps I recommend:
Step 1: Look at Your Goals
Your goals define the direction your system takes. Look at goals on a few different levels: long-term life goals, short-term career goals, financial goals.
For example, I love my chosen career path, so my goals focus on maximizing the income I can generate within this path. Your path may be similar, or you may set goals around changing careers. Look at the lifestyle you want and make sure the two align. For example, you can absolutely make financial progress on a teacher’s salary – but if your goal is a billionaire’s lifestyle, you may need to reevaluate your career goals.
Look at your financial goals: will your short-term and long-term career, side hustle, and investment plans support your financial goals?
For example, I want to invest in real estate after we’ve paid off our debt. My system supports the funding for down payments without jeopardizing my other retirement investments.
Step 2: Look at Your Skills
Take stock of the goals you’ve just set. Write down all of the skills it would take to progress in your chosen path.
- How many of these skills do I have already?
- How many of them can I learn on my own or within my day job?
- Which can I learn through targeted side-hustling?
- Could I find a mentor in the space to help guide me?
Beyond the immediate future, look at skills you’re likely to need in future iterations of your plan. For example, I mentioned about that I eventually want to invest in real estate. While it’s not a large focus of my current plan, and I therefore don’t dedicate a ton of time to it, I find it motivating to read articles on real estate. Is there a portion of your future plan that motivates you to keep moving forward? Find out what it is, then invest a little time each week reading or learning about it to keep you motivated.
Step 3: Make a Plan
You know where you want to go and the skills you’ll need to get there. Now it’s time to make the plan.
How and when will you acquire these skills?
How and when will you meet with your manager or mentor to learn about moving forward in your career?
Set a timeline.
Step 4: Set a Regular Check-In
Now that you’ve got a timeline, set up recurring check-ins on your calendar.
I have a short goal review session every Friday. I look at my goals, make sure I’m looking for new opportunities in my job, that I’m learning the skills I’ve set out to learn, that my current freelance projects are progressing as expected, and that my future hustle pipeline is solid.
I also set a longer quarterly review to look at the bigger picture plan: are my career plans still contributing towards my financial goals, such as debt payoff, as expected? Am I in a place where I need to evaluate a different career to reach my goals? Am I learning enough? Is my skillset expanding/strengthening as I’d planned? Are my financial goals still the same? Are there other financial priorities that need to take the front seat for a bit?