From time to time and quite often, we find ourselves in need of extra money. Maybe we're paying down some credit card debt or maybe we need a few extra grand in order for us to take that vacation or maybe we need $10,000 more to be able to afford the down payment on the house we want.
Whatever it is that we need, we are lucky enough that living in a capitalist society allows for ample opportunities to earn side money. This isn't easy to do and your success will depend on many factors, including your skills, your grit level, your energy level, and the amount of time you have to devote your side hustle. But, if you're lucky enough to be able to take advantage of some opportunities that currently exist to earn side money, you could very quickly change your and your family's financial picture in as little as six months.
1. Drive for Uber/Lyft or another good ride-sharing service: Not a great job -- more of a gig in today's parlance -- but an excellent way to make extra cash for a short time if you've got the energy and the drive for it. You could put in a ton of hours and, over the course of six months, take major leaps forward in terms of your financial life. You'll need to have a reasonably new car and be able to pass a background/driving record check.
2. Charge scooters: Mobile electrics scooters like Bird, Jump, and Lime are taking over city centers and downtowns all over the US and the world. These scooters need to be charged and most companies have set up Uber-like/gig-like approaches where people can charge them overnight for a fee. The pay is not going to be great here - you'll earn a bit of money on each scooter. You'll also need cheap transportation, the ability to stay up for hours at night, and cheap electricity to make this worthwhile. But, if you fit the mold for this, you can earn some extra side cash. This is not a sustainable long-term solution to your money problems - the pay is too little, it requires a lot of energy, and the price of electricity makes it prohibitive for some people.
3. Start a blog, and do it well: You could always start a blog or a website on some niche topic, write amazing SEO-optimized content, and make money from ads. This is incredibly popular, especially in the US. There are a ton of resources available all over the internet on how to do this. This is a path that will take a while and where your patience will be tested - you'll be spending a lot of time, energy, and some money upfront to build out a good online presence. The key is not to get your hopes up too high about what's achievable.
4. Participate in focus groups or other research groups: A great way to make extra money is by participating in focus groups, research groups, or other such types of surveys. The best of these are in-person. You can search online to find some consumer research-type firms in your area and sign-up - most usually have an easy way to sign-up to receive updates. You'll periodically get updates with requirements (eg. age, type of car you drive, gender, preferences, consumer choices, etc.) and you can sign-up for them. The pay can be pretty solid - you can make a few hundred USD in just a couple of hours (sometimes more and sometimes less).
5. Tutor: If you're intelligent and have some solid knowledge about a particularly challenging topic (eg. organic chemistry, introductory Calculus, or Russian), you can tutor people and possibly build a sustainable side business that has the potential to generate extra money for you and your family. This is something that will take time to build and develop - starting a tutoring business is, in fact, starting a business, but it's not a business that requires much upfront cost. There are tons of websites online that facilitate student-tutor matching, but you can go the old fashioned route and post fliers up at local colleges, community colleges, high schools, churches, your local library, and other community centers
The above aren't the only ways to make extra money with a side gig. There are plenty of opportunities available to earn extra cash on the side for people who are smart, hard-working, and willing to put themselves out there a bit. Of course, the more skills and education you possess, the easier things will be (eg. charging scooters vs. tutoring differential Calculus), but there's no stopping you from taking a few steps forward in your financial life if you're gritty and willing to put in the work.
Too many people read lists like the one above, but never take a single step - a lot of us seem to just feel good enough searching on Google and reading the list; we too often get complacent and self-satisfied too quickly and don't actually pursue any of the above money-making opportunities. Others are eager to make extra money and change their financial picture, but are too timid to pursue anything out of their comfort zone. Avoid these pitfalls and mental traps - keep moving forward, both financially and non-financially, one step at a time.
When thinking about risk and probabilistic outcomes, potential gains and potential losses aren't the same things. Only hyper-academic people who aren't actually engaging with the real world or putting something at risk (eg. money, health, life, friends, family, reputation, dignity, etc.) would argue that downside potential should be regarded in the same way as upside potential.
Only entities that
Let's say you're a casino or a major corporation and have a ton of time and a ton of money – in that case, a binary 49% vs. 51% loss-gain distribution (49% chance of total loss; 51% of 2x gain) might make sense because you've got a 2% edge. In the long run, this edge will play itself out so that you come out ahead, assuming you stay around for the long run.
Most retail investors, small or medium-sized businesses, or other smaller orgs won't be around, however, especially if they keep sustaining losses. They should definitely consider the 49% vs. 51% probabilities, but they should also consider another key item: whether or not they think they'll survive for long if they keep engaging in these types of bets . Because, even if the odds are in their favor, a small entity has to be around in order to see those odds actually play out. If you're not around, it doesn't matter how good the odds are – to win the game, you've got to survive long enough first.
Thinking about risk, therefore, isn't a binary operation where you can simply compare probabilities – it's a far more complex exercise that has to take things such as the following into account:
One of the most significant risks related to house flipping is holding period market risk - it's the risk that during the time in which you're holding the property you intend to "flip," the property value will decline.
The decline in property value can be caused by a variety of reasons (macro recessions, localized events, etc.), but that's not the point of this short piece. The point being made here is that house flipping exposes the "flippers" to significant market risk.
Not taking this real estate market risk to which you're exposed to when pursuing a house flipping strategy into proper account and consideration may have some serious negative consequences. The negative consequences are rare - they only arise in market downturns, which happen once every number of years. But, although the chances of the risk coming to fruition are small, the severity of the negative consequences (should there be a real estate market decline) are severe. The consequences can be severe enough to wipe out investors that are not well-capitalized and in positions of strong liquidity.
This is pretty easy to see if we think about a hypothetical example. Let's say you're doing house flipping and you buy a $200,000 property. The timeline might look something like this:
The risk exposure continues until you sell the house. So, in the above example with the relatively rapid renovation and resale (likely in a good real estate market; very unlikely in a real estate downturn), the investor or flipper would be exposed to market risk arising from adverse moves in the real estate market for at least a few months. If the investor is new, inexperienced, or doesn't have a lot of capital/liquidity in reserve, things might be over in one serious real estate or economic downturn.
If you're holding a property that's worth less than you bought it for -- even with the improvements you made or might make -- you'll have to (1) either accept a loss on this investment or (2) you'll have to continue making mortgage payments on the note until the market recovers.
In the first case, you'd lose real money - you'd possibly lose your entire down payment and in the worst scenarios you might be so underwater that you'd have to add additional funds to be able to get rid of it. This isn't far-fetched. Many people all across the United States experienced this during the Great Recession that started in 2007/8.
In the second case, you'd avoid having a severe capital loss, but you'd have to outlay money every month to keep the mortgage note current. This can be costly, especially if this is done for many months or even many years.
Of course, you might have bought the house in cash - in that case, you still may experience a severe loss (you'll just never be underwater on the mortgage). Renting might also help mitigate the risk - if there's a downturn, you might abandon your initial house flipping strategy and put a tenant(s) in the property for several months or years to help with the mortgage payments.
A prudent house flipper or potential house flipper would take these risks into account. Everything is exposed to risk, so this article isn't attempting to say that real estate investing in general, or house flipping specifically, are imprudent investments or that there's undue risk in a house flipping strategy. The article simply attempts to highlight a particular type of risk that house flippers are and will be exposed to.
In a job you sell your time and your energy for money - you will never become rich this way because of the inherent restrictions the laws of nature and of physics place upon us all. Entrepreneurship (eg. business, ideation, innovation, etc.) has been one of the few consistent and reasonably moral paths to both moderate and extreme wealth since the industrial revolution.
Of course, other paths such as crime and political corruption have always existed as paths to wealth for those who were willing to walk on them, but we are only concerned with paths that really add value to humanity and can at least be somewhat considered morally permissible.
No matter how hard you work and no matter how many hours you work, you will be restricted to the number of hours in a day, in a week, in a month, and in a year. With a job, you are selling your time for money. Your time might be worth little or it might be extremely valuable given your human capital, but you still are selling this finite resource for money.
The richest people in your towns and cities are generally not people who have jobs. Yes, someone in your city might earn $100,000 per year or maybe $250,000 per year working as a highly-paid individuals in a big corporation, but there are also plumbers, electricians, small accountants, small lawyers, dentists, doctors, programmers/coders, restaurant owners, website owners, that earn $500,000 or $1 million (or much more) per year through their entrepreneurial ability to use their human capital in a way that is not restricted by time. In effect, these entrepreneurs are able to expand the audience for whom they create value both in time and in scope - they can reach people even when they are not working (eg. website) and they can reach many more people (possibly millions) all by themselves. In this process, the create value for a lot of people and they are themselves able to extract a portion of that value as remuneration from themselves without having to rely on an intermediary in the form of an employer.
An Absurd Example of a Great Job to Bring the Point Home
There are 8760 hours in one year. Let's say you work like a crazy person and are able to work for 1/2 of that time. This means you work for 4380 hours in a year.
That 4380, represents about 84 hours per week without taking a single week of vacation. Clearly, we have an unsustainable situation if the work you're doing is in any way physically or mentally rigorous.
So, you -- a total workaholic per the above -- are making how much money? Well, that depends on your hourly wage. According to the Bureau of Labor Statistics (BLS), the average private sector hourly wage in early 2017 is $26.19. But you're not an average person - you're making a lot more than average in our example.
According to the BLS, the highest mean hourly in the US is for anesthesiologists who make about $130 per hour - this is even higher than surgeons, lawyers, doctors, and chief executives. But even then, let's say you make even more than that.
Let's say you can make $500 per hour consistently for every one of your hours. This is a hard thing to do. Lots of people earn $500 per hour for ad-hoc work - think of a graphic designer who bills for two hours after spending two hours securing a client or a lawyer's billable hours that don't take into account time spent on client interaction or business management. Unlike most, you're able to get paid $500 per hour for your entire 84 working hours every single week of the year.
So, per the above example, you'll make $42,000 per week
This comes out to $2.18 million per year
Clearly $2 million is a very large amount of money to be earning per year, but think of the fact that even with our truly absurd example where you're working like a machine and earning an extremely high hourly wage, you will still only earn about $20 million in 10 years or $100 million in 50 years. Yes, those are a large amount of money, but they are literally nothing when compared to what some top people in business and entrepreneurship make more than $100 million in a single year. Facebook founder and CEO Mark Zuckerberg, for example, has a current net worth that would equate to earning $4 million EVERY DAY OF HIS LIFE!
Clearly, the gains Zuckerberg and other extremely rich individuals have earned are not based on income - it would be impossible to sell their time to earn such gains. Instead, they have earned money selling other things such-such as ideas that are not restricted the same way time is. The highest paid salaried people are always making less than the highest paid entrepreneurs because the world is created in such a way that time is restricted while ideas are not - with ideas you can be earning multiple streams of income every second of every day or you might have windfall gains by creating immense value for millions (or even billions of people). It's far more difficult to do this at a so-called job.
The key takeaway here isn't that it's bad to have a job. The key takeaway should be that you have to lift your head up from the current place you’re at and see things in a broader, holistic, and realistic way. By understanding the inherent restriction, a job places on your ability to earn you might be better able to spot opportunities or even better understand the world.
Entrepreneurship isn't for everyone - many people will do better at a good job in a good firm. Additionally, although the above discussion was about money, money is not the most important thing in work and shouldn't even be the reason anyone forgoes a job to start a business on their own. There must be something else besides money motivating you if you are to have a chance at being successful in any endeavor.
The only thing we're trying to portray here is that business and entrepreneurship allows you to escape from the paradigm of selling your time for money - you can escape this paradigm and go beyond the limitations of time and space on value creation that a job places on you.
Caveats and Exceptions - There are Some Jobs That Will Make You Rich
As with almost anything that's generally true, there are some caveats and exceptions. Here, the main caveat is that there are in fact a handful of people in the world who do become truly wealthy through their jobs. These people include the likes of:
Additionally, one might argue that in the above absurd example it was unfair to bring in the likes of Mark Zuckerberg - there are plenty of entrepreneurs who earn less and even more who fail and don't earn much at all. This is all true, but the point did do a comparison of high paid jobs vs highly paid entrepreneurs. In that comparison what we attempted to illustrate this that in entrepreneurship there is inherently little restrictions on earnings - earnings can be so great that they become absurd (eg. $4 million a day for every day of Zuckerberg's life) while job earnings are restricted simply by the laws of nature and the laws of physics.
I'm at the gym waiting for a buddy of mine to show up and workout with me. After a long day at work I didn't want to workout. I wanted to go home and rest or basically do anything but exercise. However, I made plans with my friend already and I didn't want to experience that feeling you get when you break a promise to yourself, so I somehow made it to the gym. Sitting here in the gym's lobby waiting for my friend to arrive I remembered a quote I heard before, although I am not sure who said it originally. I tried to search for the quote on Google but it seems that it is attributed to many individuals.
"The hardest part is showing up."
Now that I'm at the gym I don't feel this desire to leave. I've already broken the main part of my internal resistance to working out by just showing up to the gym. I know that I will have to have an intense workout session, but that's perfectly fine now that I'm already at the gym. It's hard to explain and it seems to not make a lot of sense because the difficult part is still ahead of me. I've only completed the easy preliminary task. However, that easy preliminary task seems to have been the most important part. If I just show up to the gym I'll likely work out. It's not likely that I'll show up and then just get up and leave. Maybe it's because getting up and leaving will mean a change of course and a change of plans. Maybe that's what the difficult part is: actually getting started. Once I'm already at the gym inertia is acting in my favor. To leave the gym now would require me to go against that inertia.
I'll keep this little insight in mind next time I have a difficult task to do that I don't want to do. Obviously the task has to be of a particular variety for the principle to be effective, but it is easier to think about just showing up than thinking about the entirety of the task in front of you.
Overpriced compared to what?
Usually, when people say that Macs are overpriced they mean that they are overpriced to comparable PCs running Microsoft's Windows operating system. Usually, people who make this comment point out that the same specs can be obtained on a Windows PC for less money. They also point out the fact that an entry-level Windows PC costs just a few hundred dollars (usually a laptop), but the cheapest Mac currently is the $500 Mac Mini, which doesn't come with a display, mouse, or keyboard. To get a Mac laptop (a MacBook Air or MacBook Pro) at least $900 has to be spent, the cost of a higher-end Windows laptop.
From an economist's perspective, the statement is correct in that more power can be had for less money in the Windows world. However, a wise economist would also point out that Macs are very different things than Windows PCs. They have a different operating system, build quality, customer support, and brand recognition. When someone purchases a Mac, they might be spending more money because they want one or all of these differentiators.
Potential Differentiator 1: Operating System (MacOS)
Although specs on a Mac cost more, many would argue that Mac OS X is a more efficient operating system that takes better advantage of Mac hardware because both the hardware and software are built by the same company.
Potential Differentiator 2: Build Quality
Macs are well-known to have a high build quality. It might just be that Apple customers like the look and feel of Macs and are willing to pay for it in the same way that the owner of a luxury vehicle is willing to pay extra for the look and feel of his or her car. The look and feel may not account for one hundred percent of the price difference, but it might account for some.
Potential Differentiator 3: Customer Support
Apple's customer support, specifically their Genius Bar, is well-known to provide excellent customer service and support that doesn't seem to have a rival on the Windows side. Attempts on the Windows side to provide something similar generally don't turn out very well (eg. Best Buy's Geek Squad). You can just bring in your Apple product to one of their many stores and you will be quickly helped by a knowledgeable associate. This may seem pointless to someone who is a computer expert. Why would someone pay more for a product so that if it breaks later you can have someone take a look at it in a convenient way? However, it isn't pointless to a less tech-savvy or a very busy person who commands higher wages and is willing to pay more to save time and mental stress. A person making $500 per hour (obviously an exaggerated example) should be more than willing to pay extra for things that will save him or her time and preserve his or her energy. It's just worth it for them.
Potential Differentiator 4: Brand Recognition
Finally, many people might purchase Apple products because of the Apple brand. In the same way that some people purchase a Mercedes Benz in part because of the brand and the prestige that is associated with it, a person might purchase a Mac because they want to be associated with the Apple brand. It might seem pointless to some, but in a wealthy society brand recognition, branding in general, and how you feel about what you purchase is very important. Everyone wants to feel good about what they buy and people are willing to pay for that feeling.
There might be more reasons as to why Apple products generally seem to cost more, but the above four generally explain why so many people are willing to pay more for products that are similar in many ways. The reason they are willing to pay more is because although they may be similar in terms of specs, they are different in other important and often intangible ways.
Apply this type of thinking to your own business or work
This same methodology can be applied to other products and even to other things in life. Things aren't always black and white and things that seem similar can be different in important ways. Even if those differences are small, they might mean a lot to some people and those people might be ready and willing to pay a premium for things that are important to them.
Finally, it's important to point out that any society in which people will pay more of their hard-earned money to buy a product because "they feel better about it" or because "it makes them feel better" or because "they like the brand" is a rich society compared with the rest of the world and humanity's history. Only in a very rich society can these types of products exist, can this type of intangible product differentiation exist, and can many people afford to pay premiums for very intangible things.
And now, given the rise of cyrptocurrencies and crypto assets to quasi-mainstream financial assets, we're dedicated to providing quality, relevant, and interesting material on cryptocurrencies and cryptoassets. Articles on Bitcoin, Ethereum, Ripple, Cardano, and many more cryptocurrencies and cryptoassets can be found on Pennies and Pounds - all that in addition to a plethora of information on what cryptoassets are, how the entire crypto industry came to be, blockchain/immutable ledger technology, mining, proof of work, proof of stake, and how to prudently invest in crypto if you are so inclined (based on your risk tolerance and ability to withstand the volatility that will come with a crypto portfolio).