Side hustle vs my current job:
There is an abundance of opportunity in side hustles. However, you shouldn’t overlook the potential in generating more income from your current job. Surveys show that 70% of workers who ask for a raise actually receive some sort of increase.
Generating more income is rarely a bad thing.
Finding ways to do it, however, can be a bit challenging.
If you’re the type of person that spends some of their extra time trying to learn more about optimizing finances, paying off debt, or generating income, there’s a good chance looking into a side hustle is a worthwhile endeavor for you.
After all, you are currently on a website built for exactly those reasons.
We understand the motivation. The expanse between many of our goals and our present circumstances can be quite vast.
It’s hard to see a clear path to abundant wealth, but you’re at least confident that having more money won’t hurt your progress.
Let me go ahead and provide you with a bit of reassurance. The level of technology available coupled with the gradual shift toward flexible work schedules has increased the opportunity for producing secondary income in addition to a traditional full-time job.
But that doesn’t necessarily mean you should do it. Let’s walk through evaluating this decision and generating more from your current job in the meantime.
Can You Earn More at Your Current Job?
I really enjoy learning about businesses. Ever since I took a business strategy class in college, I’ve not been able to consider a business without thinking about its market opportunities and risks, how well its core competencies are protected from new entries, evaluating changes in technology or preferences that might impact its bottom line, and so on.
So, when I hear about individuals creating businesses of their own, I’m drawn to hear about what they’re up to. Sometimes I see ideas that I really want to pursue.
I’m definitely the financial schemer in our family. While I’m intrigued by many different income-producing ideas, Lisa has a refreshing ability to highlight the most important factors and present them for consideration.
Historically, this has almost always led us back to investing more into our present line of work instead of trying to get a side gig off the ground.
For us, focusing on our primary career has produced greater benefits than the potential offered by other ideas.
So, let me ask you, have you considered how investing in your current career might be superior to pursuing a side hustle?
And even if you really have a great side hustle idea, what harm is there in trying to earn more in your day job? After all, it’s hard to beat more dollars for the same number of hours, isn’t it?
Let’s talk about how you might make that happen.
Obtain an Advanced Degree
Regardless of how educated you are, you can always learn a little more. Depending on your line of work, getting an advanced degree or even obtaining an education in a related field may lead to more income.
I don’t know from experience, but I’ve heard folks in education who have received a master’s degree boast significantly higher incomes than their counterparts who don’t have one.
You can also obtain advanced degrees by going to night classes at nearby colleges. In many cases, your employer may even reimburse you for your tuition and other related expenses!
Lisa and I were the fortunate recipients of just such a program. Before we had kids our companies had tuition reimbursement programs for those seeking degrees related to their job.
It took two years, but we both obtained our MBAs by going to school in the evenings and did it with very little out-of-pocket expense.
According to the US Bureau of Labor Statistics, the average weekly compensation for those with a master’s degree is 18.4% higher than for workers with a bachelor’s degree.
The gap between a high school diploma and a bachelor’s degree? A considerable 67.1%.
See the chart and data below. Clearly, the more you can manage to educate yourself, the more likely you are to receive a higher income.
As a bonus, people with higher levels of educational attainment tend to enjoy more stability in their employment. A master’s degree makes you more than twice as likely to remain employed as someone with only a high school diploma.
Educational Attainment Level | Unemployment rate |
Doctoral degree | 2.5% |
Professional degree | 3.1% |
Master’s degree | 4.1% |
Bachelor’s degree | 5.5% |
Associate degree | 7.1% |
Some college, no degree | 8.3% |
High school diploma, no college | 9.0% |
Less than a high school diploma | 11.7% |
Seek Out Professional Designations
An alternative to a return to academia is to obtain professional designations or credentials relevant to your professional field.
CPA, PE, PMP, PHR, CFA, CFP, CCIE; there’s no end to the professional designation alphabet soup. The key difference between these designations and academic degrees is these are typically issued by a professional organization of some sort.
In many cases, the certifying organization will require extensive education, experience, exam, and ethical standards in order to confer the professional designation.
Some employers will compensate employees to pursue these and keep them current, so look into that as well.
Actual increases in compensation will depend on the industry, but one can expect to make around $5,000 to $20,000 or more compared to those who lack professional credentials.
Make a case for a raise
Step 1: Know Thyself
According to payscale.com, despite the fact that 70% of workers who asked for raises reported getting some sort of increase, only 37% have actually approached their employer for a raise.
Frankly, those odds surprised me, but you should probably do a little more planning than simply walking into a conversation cold, without any basis for your request.
There are many resources available that can help you figure out approximately how much peers in your industry are compensated. Payscale.com and Salary.com are both good resources for this.
Payscale.com provides a free report, but it takes several minutes of entering your own information first. I grew somewhat impatient with all the questions, but the end result was helpful and probably pretty accurate due to the survey they ask their visitors to complete.
Salary.com has a similar process, but they kept asking me to pay for a personal report so I gave up on them.
Some of the organizations that provide the professional credentials we discussed earlier may also provide regular survey data to their members which, among other things, typically contains salary data.
Step 2: Consider the Timing
Once you have some idea of how your salary compares in your industry you should evaluate the strength of your negotiating position relative to that of your employer.
Is your industry in a bit of a downturn? Is your company growing or shrinking? Is your company hiring new people regularly?
Having been laid off by one employer due to a lack of business and given generous raises by another eager to keep experienced hands on deck, when it comes to labor markets, I’ve seen both extremes of the spectrum.
If your company is in a financial ditch, it’s not the time to ask for a raise. You might consider looking for another similar job elsewhere, but you’re not likely to receive a warm welcome if you’re asking for money while the company has little to spare.
On the other hand, if unemployment is low and your company is doing well, you may not find a better time to seek a higher salary. Strike while the proverbial iron is hot.
Step 3: Put Your Case Together
The first question you should expect to receive from your manager once you’ve asked for a raise is, “why?”. And it’s a perfectly fair question for which you need to be prepared.
What value have you brought to your company that deserves higher compensation? If you can answer that key question effectively, your manager will probably have a difficult time ignoring you.
Be prepared to share actual data regarding some sort of work product like sales, reports, cost savings, leads, customers processed, satisfaction ratings; whatever quantifiable output you create in the course of your work.
Then, show how you are delivering it better or more efficiently than ever, and if possible, how you’re doing it better than your colleagues.
If your company has systems that keep and record work output from you and your coworkers, that’s a great place to mine information for your case.
If, however, it shows that you’re not producing at a high level, maybe you should step back to step 2 and focus on getting that up into the top half of performance among your peers.
Step 4: Prepare for Your Presentation
I see a lot of salespeople in my day-to-day job. There aren’t many things less inspiring than someone who doesn’t understand their product and how it can create value for my company. You need to make the same case to your boss.
Once you have your data, know it backward and forward, left and right, top to bottom. When you go in, you need to be confident you know what you’re talking about and project that in the way you speak.
If you have time, I recommend reading or listening to Never Split the Difference by Chris Voss. It’s an incredible book about negotiating and collective bargaining and happens to be one of my all-time favorites. You should read it even if you’re not looking for a raise.
For me, the book provided some great tips and context on how I presented my request which gave me a lot of confidence going into my meeting with my manager.
You also need to know what you’re asking for. Being able to explain why you want a raise is great, but be specific about what you’re expecting. Present an actual salary amount you believe you deserve to receive. Ambiguity may result in disappointment.
Step 5: Be Prepared for The Response
You might get exactly what you ask for, you might not. You should be ready for the best case, worst case, and anything in between to maximize your outcome.
If you receive a quick “no”, then ask why. Perhaps you can ask for other benefits like more vacation or a more flexible schedule. You may also gain some insight into the health of your company or your employer’s plans for you.
If you receive some portion of what you ask for, again ask why. If you’ve given a basis for your request, it’s perfectly natural for you to expect the same from them.
Again, this is an opportunity to learn more about their expectations from you, but it also keeps the negotiation going which might lead to more income for you.
If you receive exactly what you ask for, don’t look a gift horse in the mouth. Respectfully accept your new wage and continue to provide at least the same level of work output and quality, if not at a higher level than before.
In most cases, you probably will receive a “let me discuss it with management or HR or someone else” sort of response. In this case, ask when it would be appropriate to follow up for an update.
No matter what response you get when you talk this over with your manager, be sure to also present it in writing. The last time I negotiated a raise, I had a face-to-face appointment with my manager which I followed up with an email communicating the same information.
This way there was a written record of our conversation and he could easily forward the case along to whoever needed to approve it, without having to redraft my presentation based on his memory or notes alone.
In effect, by putting things in writing, I was able to preserve the data points I thought were valuable to my position and the thoughts I wanted to communicate about my salary request.
What’s Your Time Worth?
If you’ve evaluated the options at your current job or exhausted them all and still want to proceed with a side hustle, you should have an idea of what level of monetary benefit is worth your while.
After all, it seems a bit silly to jump into a new job or start a new side business if it only produces a pittance for your time. To know what is and isn’t worthwhile, you need some idea of what an hour of your time is worth.
Calculate your hourly wage
In all likelihood, your day job is your highest paying and primary source of income. If you can’t come up with a side hustle that has the potential to either equal or outpace the hourly wage you make working a full 40-hour week, then it may not be worth pursuing further.
The reason is basically listed in the section above. If a side gig won’t make more for you per hour than your current job, there are plenty of ways to focus on one of the methods for improving your current income source.
In other words, we need to quantify what a unit of our time, like an hour, day, or week, is able to earn for us, so we can compare it to the earning potential of our potential side gig.
What we ultimately want to know is whether or not the earning potential of the side gig is worth our time.
For example, let’s assume Johnny Forde makes $50,000/year at his 40-hour-per-week job. This pans out to $4,166.67/month, $961.54/week, $192.31/day and $24.04/hour.
Johnny’s pal Freddie Flex has a bike shop and offers Johnny a weekend job repairing bikes at $15/hour.
Johnny is single with no kids and likes bikes a lot. He’s also trying to pay off some lingering debt, so he decides to take the job which pays 62.4% of his normal job’s income.
A year later, Johnny is debt free and his full-time employer has given him a 25% raise. He now makes $30.05/hour there, which is more than double the bike shop’s wage. Furthermore, this raise translates to $240.40 more income each week which is actually more than he makes each weekend at the bike shop.
Does Johnny continue to work for Freddie Flex? Maybe. Maybe not. But, by knowing his maximum hourly income, Johnny can make an educated decision. (And maybe even get his weekends back.)
The truth is, the decision will be different for everyone, but knowing what an hour is worth to you can be a very helpful indicator of what makes sense as you trade more of your time for money.
As you evaluate the potential of extra income opportunities, do an hourly wage calculation to help you determine its worthiness.
Consider other obligations and how to value them.
Finally, you need to take your personal obligations into account. The more demands you have on your time, the more difficult it will be to find a side hustle that fits into your life.
The older I get, the more I appreciate the flexibility I enjoy with my work and the time I have with family.
Sure, they need me to have an income as much as I do, but once your primary needs are met it can be difficult to justify time away from loved ones unless that extra income is going to have a meaningful impact on their quality of life.
Again, this isn’t a philosophical blog, but we would be remiss if we didn’t at least challenge you to consider the personal costs of giving more of your time away in exchange for another dollar.
After all, money is a tool for enriching your life, not taking it away.
