If you are a regular reader of my posts then you will know what the £1 to £1 million experiment is all about. If you don’t then essentially I am trying to see if it is possible to reach £1 million by saving just £1 per day. If you haven’t read the original article that set me on this path then you can read it here - Can you become a millionaire by saving just £1 per day?
As part of the £1 to £1 million experiment I have defined the aim as well as the rules that I will be working to. One of the rules that I have set is that I am allowed to re-invest any income from businesses or side hustles, that I create as part of this journey, back into the project.
Now for me there are going to be two routes to success with this experiment which are:
Making some smart investment decisions.
Earning additional income that I can push back into point 1.
I therefore need to earn some additional income that I can quickly filter back into my investments. That way I can hopefully improve my chances of success.
This means that I need a good side hustle or two that I can get started pretty quickly and can do in my spare time.
The question is…
What is a side hustle?
If you have a job, but you also earn extra cash on the side in addition to your main job, then you have a side hustle. A side hustle or side job can be defined as an additional job that a person takes in addition to their primary job in order to supplement their income.
The interesting thing for me is that in the course of doing some research for this post I have discovered that more and more of us are starting up a side hustle.
However, it is difficult to accurately quantify how many of us actually have a side hustle. Let’s face it a side hustle is cash that we earn on the side that we don’t declare to the tax authorities. In that respect it sits very much under the radar. But there are some figures that I have found which make for interesting reading.
In the UK there are 1.1 million people with a second job or who declare themselves as self-employed in addition to a primary job.
That works out to just 3% of the UKs working population.
But a 2018 study by the Henley Business School indicated that 25% of the UK population say they have a side hustle. This supports the idea that the side hustle is an under the radar income source for most people.
But more interestingly, where some people may scoff at those who have side hustles, they might be interested to know that it is a sector that generates a lot of money. The Henley Business School study showed that side hustles generated £72 billion in income and represented a not insignificant 3.6% of UK GDP (The side Hustle Economy - Henley Business School 2018). Now there are approximately 32.81 million people of working age in the UK. If 25% of people admit to having a side hustle that represents 8.2 million people. Therefore if side hustles generated £72 billion in income then that means each person earned £8,780 in additional income through side hustles! That is quite a significant addition to a persons income.
Perhaps more interestingly the study also highlighted that of those who had started a side hustle 55% had done so in the last couple of years.
What is driving this growth?
Undoubtedly it is the internet and the rise of social media that has driven the growth in people taking on side hustles. How many times have you seen stories about YouTubers and social media influencers on Instagram taking home 6 and 7 figure incomes. They make it look so easy, so it is perhaps no surprise that the number of people seeking to earn a fortune on-line is growing.
But, going back to my previous numbers, most people may not be earning 6 or 7 figures however, 4 figures certainly looks possible.
Why has there been such an explosive growth in people taking on side hustles.
Covid-19 has been a big factor. Many people have been either furloughed or made redundant due to the pandemic and its associated lockdowns. Boredom combined with no job or the uncertainty as to whether you will have a job are going to be massive drivers for people to find an alternative source of income.
However, one of the main reasons is probably that workers are finding that their wages are either not keeping up with the cost of living or not allowing workers to fund the life that they want. This is perhaps indicated in the chart below -
This shows that those who have admitted to a side hustle are predominantly in the 16 - 44 age group. The highest percentage with a side hustle are those in the 25 - 34 age group. They are therefore predominantly millennials who are in the early stages of their working careers so will be earning lower salaries. But they are also looking to possibly invest in their first property and so need to find a large deposit to be in with a chance of getting an affordable mortgage. But if their salary only just covers the living expenses how can they afford to save for a deposit. Is it little wonder that with the growth of the internet offering a wide range of possible earning opportunities there are a high percentage of millennials with side hustles?
Can a side hustle really earn a decent amount of money?
My calculations would suggest that they can. But what is the reality? Well that is what I want to find out. I want to test some of these claims that are made online. The claims that you can make $600 per hour with Google or $121 from just watching videos. I am going to test as many as I can out to see how they work. Do they make money and if so is the effort required worth it.
Of course I will report back on what I find and of course anything that I earn from these side hustles will be invested back into the £1 to £1 million experiment.
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