Introduction: From the Weekend Gig to Financial Growth
It is very disturbing when you are low on cash and yet there is a
lot of pressure on you. You know, that alone can make a person sick, like it
did to me. That is where you have to wise up and wake up to do something to
help yourself, like I did. A few years ago, I started freelancing on weekends to
cover my student loan payments. It took me about 18 months before that extra
income became more than just spare cash. Simply put, I had used that income to
settle my debts, and right after that, eighteen months later, that extra income
became the seed for my investment. Today, part of my emergency funds, index funds,
and even a small rental property all trace back to those early side-hustle dollars.
If you are earning money beyond your main job, then let me tell
you, you have a powerful tool to start a business. The key thing to do is to
channel that cash wisely so it grows rather than it disappears into spending.
The desire that you cannot kill. It is better to use your extra income to establish
something lasting than to stick to spending it. Let us get into it, as I share
with you today my experience.
Why it Works: Why Turning Extra Income Into Investments Works
There are many reasons why turning extra income into an investment
works, but I want to share my experience with you. Why it worked for me.
- Investing earlier in a business allows profits to be earned. You may not understand this, but it is not all profits that are meant to be spent. Some profits are meant to be reinvested, and as the reinvestment happens, so does the profit keep increasing. Even the smallest amounts add up to a snowball over time.
- Imagine having a business and a job at the same time. It just feels like holding two offices at the same time, losing one, and relying on the other. It is the same for investment and a job, too. Investing your extra income will save you from joblessness when the need arises.
- Working as a teacher and receiving a salaried amount of 800-1000 cedis in my country wouldn’t get you a land or build you a house or even save into a pension fund. That is why it is good to invest so that the time period to attain these dreams or goals of yours is shortened. You don’t believe my reasons, then know this, that
According to Fidelity’s 2024 Side Hustle Investor Report, people who invest at least 30% of their side-hustle earnings into businesses earn 40% larger portfolios over 10 years than those who don’t.
You may not have the knowledge or technical know-how to go
about this side-hustle earnings investment. Let me help you with some.
Steps-By-Step Guide to Investment to Invest Your Side Hustle Income
- Open a dedicated account for that side hustle income. Since you may not always be regular or remember to make savings or investments, create an automated transfer of maybe 30 to 50% into an investment account right after each payout. In this scenario, the bank will automatically transfer the percentage you agree with immediately you receive money into that very account.
- Before you go all out to invest heavily, it is important to save for at least three to six months of your expenses in an account with high yields.
- There is no need to be hasty when diversifying; diversify gradually. Mix assets so that no single loss wipes out the gains.
- Set a reminder to track your progress. This can be done every four months. I call it the review and reinvest. Reinvest the dividends and adjust contributions are your hustle income grows.
I did not start in a 100-meter race when I came out as the first or just out of the blue like a hero from under the sea; NO, I had to learn and visit experts in my vicinity. They were in this already, and it is best to listen to their part of the story. Since I was the only one to get that opportunity, let me just share with you..
The Real World Success Stories
Starting with the freelance designer who bought a home.
Sofia Dogbe Edinam freelanced as a graphic designer. She was a
seamstress at the same time, so the freelancing was just a side hustle. From the
money she earned as a result of freelancing, she saved 40% of her income. The
$15,00 seed grew to $23,000, which today is the down payment for her
first home.
Look also at James Kutsiame, the Blogger Who Became a Landlord.
James earned from his blogging as an affiliate marketer. The
income he earned, he invested in properties. Today, he buys and sells land. All was through his side hustle, so what shows you cannot do this.
We all make mistakes, but below are some common mistakes you must avoid
- Do away with unnecessary spending; it does not help. Buying the same shoes that you already have, or buying the most expensive perfumes, doesn’t pay off. Reduce spending and invest to build an empire.
- Going after quick wins. Crypto and bets or penny stocks, look here, my friend, avoid that mistake. They do away with your earnings. Rather look for firms that will boost your profits as you save them, than waste them
Do you want to explore more on this topic? I have got you some extra
articles.
Conclusion: Make Your Extra Income Work Harder Than You Do
Have you also engaged in any side hustle before? Tell us your experience in he comment section and what you did with the extra income. We want to learn from you. Thank you.
