The Value of a Side Gig

You’re already too busy. Either your primary career demands more than the old standard 40 hours (how long ago was that!) or your so-called freelance life leaves you free to work 24-7. Or you’re out of work and the ennui is killing you.

Get a side gig! A side gig is something you’ve always wanted to do, or a brilliant business idea you’ve had but never tried out, or something you think might make money and be fun, too. Maybe it’s producing a food product, or writing articles, or dog training, or some craft product, or consulting. Here are 10 reasons why:

  1. It stretches your brain. Even if you’re a busy, successful professional you can get stale by only concentrating on one thing. A side gig potentially introduces you to a whole different group of people, ideas, and ways of looking at the world, and gives you an opportunity for cross fertilization.
  2. It gives you new contacts. Instead of the same old colleagues doing the same old things, you can meet people from worlds you never encounter in your main job, and perhaps friends you never would have met in your primary circle. When people are unhappy in retirement, one of the reasons why is that they lose their “friends” along with their job. A side gig can widen your circle of friends, and they won’t all be based on shop talk.
  3. The extra money can be important. A good side gig makes at least $500-$1,000 per month. For some, that can be the difference between the basics and the luxuries; for others, it’s chump change or, better, fun money. But for most people, saving an extra $1,000 per month wouldn’t be a bad thing for either their emergency fund or their retirement. Even if you don’t need the money, setting a goal to actually make money forces you to test your great idea or refine it, all good. Or just give it away—I can think of one or two charities that would welcome a $12,000 yearly donation.
  4. You can laugh a little more at the boss. You know you have at least a little money coming in on the side.
  5. It gives you something else, hopefully fun, to think about. Even if you are the boss.
  6. You can employ your kids. This has the benefit of transferring cash for college to them in a potentially tax advantaged way, as well as teaching them a lot about entrepreneurship, another good thing.
  7. It can be very successful. More than one side gig has morphed into at least as good or better business than the main one. Think Paul Newman or Scott Turow.
  8. It can tide you over in an emergency. It’s a lot easier to cope with a job change or loss if you have a little coming in on the side, and something else to think about.
  9. You can test a new business on the side, with far less risk than quitting and starting from scratch. Similarly, you can dump a bum idea and try another one. You’re less likely to waste time and effort, and even if it’s a bust, you haven’t invested everything in it.
  10. It’s an excellent retirement plan. If you pick a side gig that doesn’t require a great deal of physical labor, it can go on as long as you wish, and promote your engagement with the world—you’ll have to keep your “edge”. Also, it can be financially significant in retirement. To generate a $12,000 per year withdrawal from investments, you need an extra $300,000 in principal.

Obviously, I’m not talking about bagging at the grocery store or delivering pizza, although I admire people who make those efforts, too. Go out and create something new and useful—we’ll all be better for it.

Retirement planning—unusual budget items to consider

We can worry and plan for so many possibilities, but the ones that get us are often the ones we never see coming. I’d like to submit a few items for your retirement planning consideration that are not part of traditional budgets.

We can all come up with guesstimates for food, housing, property taxes, utilities, and insurance. Car purchases can be scheduled periodically (although please make a plan to stop driving at the point where your kids tell you that you should). But while walking my elderly dog yesterday and looking at my weed filled yard, I realized there are two areas I’ve never really incorporated into my own retirement plans.

The first is routine household care. If you plan to stay in your own home as you age, you will almost certainly need more of this than when you’re younger and active. Even if you’re a do-it-yourself type, you probably won’t be forever. I’d happily quit wrestling with the snow blower and the lawnmower THIS MINUTE, but right now, hey, what are kids for? But a recent stint with a fractured foot and a child away at camp have given me many thoughts about how much lawn and snow removal assistance I might need at 75 or 90, and how house cleaning services might be essential.

I’m a pretty avid gardener, but I would have to face changing my “design” and get-to projects if I had a landscaping service—no one would fool with my yard the way I do. And those of us who have a cleaning person every other week, tidying up in the interim, would probably want to step up that schedule. Some people think that cutting back on these services might be a way to cut costs once they are no longer working and have “plenty of time”, but in fact, the reverse is true. You will probably need more services, not less. Based on the fractured foot incident, and the resulting immobility, I have a good window on how a garden can transform from nice and fairly under control to the front yard of Sleeping Beauty’s castle in less than six weeks. You don’t want the EMTs to have to hack their way in to get you.

But back to the aging dog. Vet care, while so worth it, can be astoundingly expensive. The dog and our beloved cat with cancer have rung up sums that, this year, are approaching 5 figures, and we’re only in July. And I’m here to say that this isn’t the first time it’s happened over the years. I could never willingly put down an animal that had a chance at a decent quality of life, so for me it’s essential to have a pretty large pet care budget. Then there are all the services for pet care that can come to your house if you’re not up to hauling the dog to the vet, but they’re going to cost you, too.

One of the most heart wrenching aspects of moving to assisted living or nursing care is the necessity of giving up pets, so before you acquire an animal at your retirement age, think about 15 years in the future (an animal’s life span, give or take a few years). That’s caused me to realize I need to choose a smaller breed dog in the future, I want my long-term care insurance to cover home care, and my daughter will need to bond with and be capable of caring for any animals that come to live with me.

Staying in your own home, surrounded by beloved pets, is a delightful prospect, but like nearly every other goal and dream, there are aspects of financial planning that need to be considered. Excuse me, but the cat is demanding petting…