Hustling Your Way Into the New Year

A side hustle, bonus money, or selling unused items are all ways to benefit from additional income outside of your nine-to-five job. Each offers an opportunity to grow your wealth faster than the average person. However, are you really benefiting from it, or do you find yourself spending more and barely keeping your head above water? Let’s plan for the year by setting your income up for success.

Additional income can be broken into two categories: recurring or one-off. If your income is recurring, such as running a side business or selling items regularly, it becomes easier to manage and amplify. For example, if you accept payments through a bank or app, you can automatically route a percentage of each payment into another account. If you know your expenses average __% per purchase, set up a dedicated spending account. Many people do this using a credit card to maximize points or cash back. You can purchase gift cards with your credit card and use those for expenses to keep spending consistent while earning rewards.

Why use gift cards? One major flaw in many side hustles is the belief that you need to stock up and create surplus inventory for potential demand. Scaling should be relative to how your business is currently operating and measured quarterly or biannually. Using gift cards helps you stay within a budget, and in the early stages of a business, that structure can help you reach the next level. Once you have established a proven track record, you can use leverage to grow further.

Next, let’s plan how to allocate the remaining proceeds. If your profit margins are low, you need to protect more of that income for a rainy day. I suggest allocating 60% to a liquid account that will not fluctuate as much, such as a high-yield savings account, and placing the remaining 40% into an investment account. These percentages can be adjusted depending on your margins.

Invest this money with a one- to four-year plan. That may sound like a long time, but if it only took one year to change your life, most people would commit to it, especially if the process was handled passively on their behalf. You can create this strategy with an advisor or on your own.

When it comes to non-recurring income, it should never be relied upon as a primary source. The goal is to build a system that makes it recurring. Avoid using this income for six to twelve months. When you can grow it into more than its original value, that is an investment. Your priorities should focus on building an audience and creating content so you can begin forecasting trends. Once you can maintain and predict those trends, you have created a sustainable model and can transition it into a recurring income stream.

The difference between you and others is your ability to commit to a process and seek out resources to grow what you already have. This year can be a turning point where you are empowered by your money instead of living paycheck to paycheck. I am happy to be your coach for the year and share tips and strategies to help you succeed. Feel free to reach out via text with any questions at (425) 610-9226.

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