Want to know the secret to getting rich? Simple: side hustles and startups.
There are many reasons why side hustles and startups offer people the best chance at being rich. For one, most people are content being employees or working their way up the corporate ladder. That limits your competition.
Another reason side hustles and startups are the ideal path to wealth is that there is potential for them to turn into businesses that can be sold for millions of dollars. The likelihood of that happening at a corporate job is slim-to-none for a majority of workers.
We all know what pursuing a startup did for Mark Zuckerberg, but I think one of the most inspirational stories of success is that of Scott Adams, creator of Dilbert. He had a number of failed startups and side hustles throughout his more than a decade and a half in corporate America before one of his ideas worked. Dilbert is now a household name and Scott has made more money than he knows what to do with.
Scott’s story should provide motivation to anyone looking to get rich through startups and side hustles: you only need one to “take off.” You don’t need every website, business, or idea to pan out. In fact, most won’t. But the beauty of startups is you can always work on a new one and expose yourself to the possibility of that startup taking off.
Why startups and side hustles are ideal for getting rich
Many people are skeptical of spending their valuable free time working on a startup or side hustle. Skepticism is healthy, but if you look at the advantages of working on a startup or side hustle it can become a very appealing path to wealth.
- Potential Multi-Million Dollar Payday – The biggest advantage that startups and side hustles offer over climbing the corporate ladder is the potential for a big payday. This is the big motivation of most entrepreneurs: knowing that taking a risk and sacrificing time (and sometimes money) into their business ideas could potentially pay off exponentially.
This brings me to another point: while side hustles such as delivering pizza or working retail are good ways to increase your income on top of your full-time job, I think most people would be better off pursuing something that could potentially give them a multi-million dollar payday. This could mean a business that is scalable, work that can be outsourced, etc.
- Potential for self-employment – Side hustles in particular give people the opportunity to potentially be self-employed and have a number of clients. Ideally you’d make much more than your current job and be able to outsource the more manual tasks.
Think about Scott Adams with his Dilbert comic strip. He *technically* still has to produce comic strips each week, but in the process of creating Dilbert he also created a brand and in-turn, a business that can sell books and other products. He also doesn’t have to grind 40+ hour weeks at the office anymore and can decide how to best use his time. Which leads me to my next point…
- Potential to control your schedule – One of the drawbacks of being an employee is that no matter how much or how hard you work you will still get paid the same. Sure, working harder (or smarter) gives you a better chance of moving up at work, but that in almost all cases that is a relatively small incremental increase in pay.
If you make enough money on your startup or side hustle, you can potentially quit your job and run your business full-time. This means there is no more answering to anyone for your time – it’s up to you to make productive use of it. If you are exhausted one afternoon and think a quick 30-minute nap would be the best use of your time, you can do it. If you were still in the rat race you’d be forced to continue to sit at your desk regardless of how productive that time is spent
The bottom line is this: there is a lot of upside potential when it comes to startups and side hustles. This includes big multi-million dollar paydays, which should be one of the goals of every entrepreneur.
One criticism people have of those who push side hustles and entrepreneurship is that they fail to realize that there are millions of people who have become rich through their full-time job.
Don’t get me wrong, I know many people who have become wealthy through being a full-time employee. There are a number of drawbacks that come with trying to become rich through a day job, though. They include demanding hours and the fact that you are at the whim of office politics deciding your fate.
It’s important to realize that going “all in” at your day job poses some risk. You may never get the promotion you are gunning for. Industries might change and your skills and knowledge may become less relevant. It’s not as easy to move from one career trajectory to another as it is to move from one startup to another, especially if you work on these startups at night and on the weekends.
So my advice for people who want to get rich? Pursue startups and side hustles in your spare time. You just need it to pan out once.
What are your thoughts on startups and side hustles – opposed to climbing the corporate ladder – as a way to get rich?
____________
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I’m all for it, as long as people go into it knowing that it can be a ton of work. But, that’s not to say it’s not worth it because it obviously can be. I think one of the nice things is that you can do both, if you balance it right, and end up creating multiple income streams for yourself. That said, I’m more inclined to go the route of creating a business that’s scalable and allows you to outsource, which can really help with the controlling of the schedule aspect.
I think it’s important to strike a balanace. As much as I would like my freelance writing and blogging career to take off, right now it just doesn’t pay the bills. So I still need to focus on doing a good job at my day job for now : ) I think it’s important to always be thinking about how you can earn extra money and what kind of opportunities you can make for yourself!
I’m also an advocate for pursuing side hustles with growth opportunities. Sometimes that requires a little skills training or learning something new, but definitely worth it.
I always say the private route is the best way to go to make money. When people ask about my retirement plan, I say that I am invested in me because I like the long term outlooks on “Shannon” as an investment. It is not easy and it takes years to build up; however, if you do it right, the returns have a much bigger potential than the public markets.
I think knowing when to quick a startup and go in a different direction is the hardest part of creating a successful startup. Some things just aren’t going to do that great in the market and knowing (i.e., being smart and wise enough) when to call it quits is really hard.
I think working for yourself is definitely the best way to increase your income and get rich. It takes a lot of risk and for some it pays off well.
I believe the startup way is much harder than most people would ever realize. I really don’t feel most people have the attitude to stick with them. Consider that most startups fail in the first few years, I can’t say those are the best ways to get rich. Now, side hustling is another story.
Just as diversifying your investments is the best way to increase returns and limit risk so is doing a side hustle or two in your spare time. Having more income streams is a great idea because if you get a couple going consistently, you can decide if you want to pursue one over the other and you won’t be in too much trouble if one dries up completely.
I wouldn’t dream of millions just yet but when you start something on the side, you can save a bigger part of your day job’s income, until you reach 100% and can decide if you want to accelerate wealth or just leave your job. I’d rather do that than climb the corporate ladder.
My parents, my grandparents and even my great-grandparents were all self-employed: I haven’t found my niche yet, but I’m working on a few ideas and I can’t wait till the first one takes off.
I think most people don’t have the motivation to work a full time job and pursue a business in their free time. Otherwise, everyone would do it. Side hustles are, in my opinion, but best way to get started, but the sky is really the limit when it comes to working for yourself.
FrugalRules I think in general people should expect (potentially) making a lot of money will always be a ton of work. I realize some people think that there are shortcuts and easy ways to get rich, but I think for the most part people understand it will take a lot of money.
BudgetforMore I agree with you 100%, and also would advocate people put in the time and effort needed to excel at their day job. If you’re goal is to build wealth at a fast pace there really is no getting around the fact that side hustles and startups are the best way to do it.
brokeandbeau There is a ton of stuff to learn when it comes to side hustles. Even if you’re really good at a specific thing, like creating logos, you still have to learn the business side of actually getting clients.
blonde_finance Thanks for sharing your insights, Shannon. There are a lot of people who are stingy when it comes to investing in themselves, but it can pay off to a greater degree if you are willing to make the right investments.
theFinancegirl Really great point. I know i struggle with this and I think lots of other people do too. Simply put, it’s hard to quit things once you’ve started, especially if you’ve seen a little success.
SenseofCents I agree, Michelle. I think if you can contain the risk through various strategies, such as not quitting your day job before your business is established, you are much better off.
DebtRoundUp I actually would argue that side hustles are startups, unless it’s not a business but simply trading your time for income (i.e. freelancing). I think small businesses – which I would group into startups – are by far the best chance people have at getting rich. Every blog owner technically owns a “startup.”
thebrokeprof I have to agree, and I’m currently working on increasing the number of side incomes that I have. Worst case scenario a side hustle doesn’t pan out and you really didn’t lose anything except time. Best case it turns out to be a cash cow.
RFIndependence I think dreaming of millions can help people get motivated, but I agree that it’s important to just get started and see where it goes. You may never make a significant amount of money, but it can still provide some decent side cash that you can invest.
Myles Money Good for you. I think a lot of people pick up the entrepreneurial spirit from their parents. My friend who owns a successful small biz was influenced in large part by his parents.
DC @ Young Adult Money Good point, but most people who hustle don’t run those as a business. They just trade their time for money. On the blog front and small business front, few small businesses succeed. That number would be much smaller for bloggers. There are very few blogs which make actual money.
Eyesonthedollar You raise a good point, but I think it actually works in favor of those who are willing to sacrifice the time. If you can make a model that is sustainable and profitable, there’s really no reason you can’t succeed.
DebtRoundUp DC @ Young Adult Money That’s a fair point, but most bloggers I know make at least some money off their sites, others make quite a bit. I don’t think side hustles that are not businesses are a good way to get rich. You ultimately are limited by your time and have nothing that you can sell for a lump sum when you decide to exit.
I think the potential of self-employment that side hustles offer make them very enticing. Done well, a person can transition from full-time employment into a sustainable business. One that could, if done right, be sold later for a significant profit. Start-ups have a lot of appeal and the sale of successful one can net the owner millions (and a lucky few billions) but they also have the greater risk, which is probably why they have the higher award potential. I also think there is still a linger mentality that people who have a second job or side hustle must not be doing financially well. And in some instances, that individual is hustling to eliminate debt, which supports their limited view. In my mind, they taking smart action to eliminate debt as quickly as possible! So some people mistakenly pride themselves on only needing one job and don’t see the potential a side hustle offers in both wealth and job creation.
DC @ Young Adult Money Yes, but those are just bloggers you know. There are millions of WordPress blogs started every month. The last survey take in 2012 of people who called themselves bloggers, only 9% made money. All the others made $3.50 or less. You know as well as I that blogging is hard work. Most people don’t have the discipline.
I always run my side hustles as businesses, but that is just how I was brought up. If you don’t know how to run a business or even start one, then you will have to rely on just trading your skills for money, ie Uber or Lyft drivers.
DebtRoundUp DC @ Young Adult Money I wasn’t trying to argue for blogging in this post. I was arguing that business ownership is your best shot at becoming rich. I think you agree with me but can’t really tell from your comments.
DC @ Young Adult Money Haha, it is just one of those days for me DC! I actually think the best way to get rich is playing the lottery!! ;)
Side Hustles are a nice plan B, and allow you to pursue a passion or idea without sacrificing a steady income.
Despite the numerous advantages of being self-employed, one should not forget that being successful comes with taking great risk and sometimes making big sacrifices. It also requires a great deal of dedication. Remember, starting your own business means building a new brand from the bottom up. If you are not willing to work very hard – even harder than you did when working for a boss – chances of failure far exceeds the chances of getting that million dollar cheque. The size of your next ‘paycheck’ directly correlates with the work you put in (or at least when you are just starting out!). For some this may well be the motivation they need to be the next one to hit it big, while others may prefer the safety of permanent employment. Be sure to carefully decide in which category you fall before you leap into the unknown.
I think you can be well off if you have a steady job that pays well and you live somewhat frugally, but for the most part if you really want to go big, you pretty much have to do what you said, become an entrepreneur or have some kind of start up or big product.
I would first ask you to define rich? That makes a huge difference in my answer. I do think that most people who read these blogs work on the side hustles, owing their own business, or climbing the ladder. In many cases it’s not about being rich as much about having the financial freedom to choose the next step in their lives, that is more important than being rich to me.
In today’s society I believe that side businesses and start ups will get you rich quicker than the corporate ladder. These days companies are not paying people as much as they used to. Also a lot of jobs are being outsourced as well.
Great article DC, I feel somewhat inspired and hope that I’ve inspired you somewhat, along with all the other great people here to push you on to bigger and better things :)..
My thoughts are definitely in favour of the side hustle, I used to be all about climbing the corporate ladder but that is the old school model..
How is your new job going anyway?
DebtRoundUp DC @ Young Adult Money Definitely the easiest way haha! Might not be the most likely way tho ;)
ShannonRyan Excellent point, Shannon! I do think that there is a view – however misleading – that anyone who tries to make money beyond their full-time job has some sort of financial problem. You could argue that debt is a financial problem. In my case, I get motivated by my debt to make some additional money so that debt doesn’t drag down our goals.
DebtDiscipline Well-said. I think there is something to be said for steady income. It can really help people pursue their businesses and passions without taking on the huge risk that comes with launching a startup without any additional income.
Vivsenekal In this post I was more so focusing on people starting stuff in addition to their full-time job, so they would lose none of the advantages of full-time income. It’s interesting how many people in the comments are pointing out that “business ownership takes a lot of hard work.” I guess I have a different mindset because I thought that was a given!
Beachbudget It’s really either that or rise the ranks in a large corporation that offers the big paychecks to top executives. You CAN get rich as an employee, it’s just not very likely for most people.
EvenStevenMoney Rich was used for SEO purposes ;) But I correlate rich with financial freedom, because if you’re rich you shouldn’t have financial insecurity.
Jason @ The Butler Journal I think the biggest issue at corporations is that you need to reach a certain level that is VERY difficult to reach. Few make it there.
mycareercrusade Thanks for the kind words, as usual! The new job is going great and it’s been good to switch to a finance role as opposed to a corporate accounting role. I’m learning new skills but can still apply them to an accounting/controllership job if need be.
My passion is to pursue entrepreneurship, and this something that I’d like to do for the rest of my life. You’re right, many successful individuals don’t get there at their first try. It takes time and energy to achieve your goal, but it’s definitely worth trying for something that gives you satisfaction in life.
For me, I think the most appealing aspect is the ability to control my own schedule and work for myself. My biggest beef with my current “regular” job is that I’m stuck there 9-5 M-F. I’d rather make less money and not be trapped in an office for so many hours every week!
Mrs. Frugalwoods I hear you, and there definitely is potential for making that possibility with a side hustle or startup. The only issue is making it pay more than your regular job, which is seeming highly unlikely for me when you factor in the benefits that come with full-time employment.
PoorStudent I have to agree! A lot of people either don’t want to put in the time and effort it requires to start a successful business or have no desire to have all the responsibility and risk that comes with owning a business.
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