Build multiple streams of income

Not long ago, there was a LinkedIn article written by a CEO which went viral, as he called job candidates who requested to work from home “entitled” and “lazy”. That article received a ton of backlash. Here’s the good news: The trend of remote work during the pandemic has killed the idea that “hard work” must be performed inside a corporate office. Altogether, the idea of “hard work” has been challenged, as many millennials are leading the Great Resignation by quitting their jobs. In fact, the younger generation may be the ones to finally end the 40 hour work week. Yet, is there still value to hard work? The answer is an obvious “yes”, since it is illogical to want financial independence without putting in enough hours to accelerate the path. There is legitimate value in working beyond 40 hours per week, provided that you do not work hard for the wrong reasons, and instead focus on the right things. Avoid working overtime for the wrong reasons Should you work beyond 40 hours a week? The answer is no, if you plan to work beyond the hours demarcated by your full-time job. Working overtime without extra pay is an idea that solely benefits companies, driven by management in a bid to improve the company’s bottom line by having workers go the extra mile. Working overtime at your job is a silly idea. In the post-pandemic world, employees have come to realise that their jobs can be performed from home, often without working the full 40 hours. In fact, when workers are stuck in an office job, they only spend 16 hours of their week productively on the job tasks that they were hired to perform. The rest of the time was spent on fiddling with email, meetings, trawling news sites and social media, and talking with colleagues. Essentially, we need to recognise what a job is – a time for money exchange. When you work overtime without getting extra pay, you are devaluing yourself by driving down your own hourly rate. That is unwise, inefficient, and comes at a huge opportunity cost – you could have put the extra hours into a second form of income, such as a side business. What’s worse is that most of us working 40 hours at a job are not just working 40 hours, but much more. If you work in an office, take into account the hours lost to daily commute. Secondly, if you are a knowledge worker, how often do you catch yourself spending time after work engaged in problem solving and thinking about work tasks? Thirdly, consider the impact of technology which has extended our workdays, since collaboration apps like Google Drive, Microsoft Teams, and Slack make us stay plugged in even after work. Add these before or after work hours to your supposedly “40 hour” work week. If you are not careful, you may already be working 50+ hours a week, and that is neither healthy nor helpful to your personal pursuit of financial freedom – you are not getting paid for the extra hours! Instead, you should focus on wean yourself off having to work that many hours, so you can gain financial freedom instead of being a slave. That is the mindset to employ –- free up time so that you can channel it into an alternative income source, such as a tiny scalable business. Towards this goal, it is way easier to free up time if you are working remotely. An exception to working less hours as an employee can be made if you work a performance-based career, which directly ties extra hours to actual income (made through sales and commission). Legitimate Reasons to Work Beyond 40 Hours a Week Without further ado, let’s dive into some legitimate reasons for working beyond 40+ hours per week. 1. Work on side gigs Working side gigs enables you to earn fast money that you can use for investments. You can also reinvest the money you make into a business that you are planning to start. Performing a side gig for someone else offers less ownership than a tiny business, but it offers immediate and guaranteed pay. By doing side gigs, you can monetise your time in a semi-fun and less risky way. Side gigs are especially useful for learning transferable skills that are integral to making money online, such as copywriting, social media marketing, WordPress, and SEO. These skills are almost essential, and come into play if you someday decide to start a simple business on a website. Even side gigs or part-time employment netting $200 per week can give you an extra $10,400 per year - Look up side hustles such as online tutoring, translation services, web design, etc. This sum, when invested annually at a 8% annual returns rate (S&P 500 index funds), can leave you financially well-off in the mid to long term. After 7 years, you would yield $100,220 - just from a $200/ week side hustle. S&P 500: 7-year yield based on annual investment from a $200/week side hustle (Source: Compound Interest Calculator) 2. Build a tiny business Many people fear that building a business, when employed, is equivalent to driving themselves to the ground. This belief is untrue, and perhaps keeps 90% of people from ever starting a business. The good news is that you do not need to work 60, 70, 80+ hour weeks, unless you are building something large that requires funding, complex logistics, or an insane amount of technical knowledge. Instead, build a tiny business. A tiny business is neither the next Amazon nor a startup that requires huge amounts of investors’ money. A tiny business is something small but scalable that can generate income in ways that are not tied to your time. Yes, as an employee building a side business, you must be prepared to work beyond 40+ or 50+ hours a week for a while until your business is profitable, especially at the very beginning. But eventually, the idea is to reduce your hours. Here are some examples of business ideas that do not chain your income to time: Provide a service to a client but charge a flat fee instead of pricing yourself by the hourSell an information productEarn ad revenue on websitesEarn money through affiliate marketingSell hard products A tiny business is one of the most effective ways you can move towards FU money, since it requires low capital and only 10-15 hours a week to start. 3. Work in a performance-based career If you work in a performance-based career, you are paid by your performance. That usually means that a good proportion of your salary comes from performance fees on a quarterly, semi-annual or annual basis. There is no salary “cap” – you earn more commissions if you close more clients. It does not matter if you work 5 hours or 60 hours that week. If you are at an entry-level position in a performance-based career, it is likely that you will put in some extra hours to get good at your role. In these scenarios, working extra hours can benefit you. If you were to spend extra time at work on closing more clients, you will increase your income for every sale you generate – unlike a job with a fixed monthly salary. 4. Hit it harder when you are younger While a good percentage of millennials and Gen Zs strive to put in the hours to get ahead, there are many others who should put in way more hours. If you are younger, here are the reasons why you should hit it harder at work: You are not skilled enough yetYou have limited family responsibilitiesYou have greater potential and a longer timeline to succeedYou have more energy and can put in 50-60 hours worth of work per week. Your time is limited. You might as well utilise all the energy and zest you have before it goes away. If you find that age is catching up on you, switch to a work from home position and make it a top priority to improve on your health and energy levels. This will afford you more time that you can put to better use. Summary While hard work is not sexy (especially in a post-pandemic world), working beyond 40 or 50 hours a week is wise provided that you are focusing on the right thing. Invest those extra hours into yourself and your projects, rather than blindly give it away at a corporation or waste it away online. Work a performance-based career, turn to side gigs, or build a tiny business with the extra hours. If you are younger, put in more hours, or else, put your time to good use anyway (since the majority of people do not bother).

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Category: Build multiple streams of income