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Start Here: “The Ultimate Guide to Making Money”

You don’t have to start Google to earn money on the side

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Yesterday, I was walking around in the afternoon doing some errands. I called my friend, who runs his own company in Chicago. As we were catching up, he suddenly goes, “Yeah, I’ll have ham — no, not ham — smoked turkey. And lots of mustard please.” It took me a second to realize he was ordering Subway, then I started making fun of him. Actually both of us. I said, “Do you realize what kind of degenerates we must sound like? We’re both walking around, you ordering Subway, me checking out lamp stores, at 1:30pm on a Monday.”

And yet, that is one of my favorite parts of being an entrepreneur. I value freedom and flexibility over almost everything else, so the simple act of being able to walk around in the middle of the day makes me LOVE what I’m doing.

Many other news sources are starting to write about the increasing move to entrepreneurial work (especially in this economy), pointing out the good and the bad. From a recent New York Times article:

“SITTING in their cubicles, rolling their eyes over the latest bureaucratic slowdown or marveling at the near-incompetence of higher-ups, some employees are thinking: If only I were my own boss, I wouldn’t have these problems.

No, they wouldn’t. They’d have a host of different problems. Still, some people make the leap to self-employment and find it was worth the risk.

How can a salaried employee with some savings tell if the idea of becoming self-employed is a viable option and not just an escape fantasy? And how can a recently laid-off employee with some severance pay determine whether this is the right time to pursue her dream of being an entrepreneur?

At one of her consulting clients, Ms. Pryce-Jones once talked to a high-level employee who was complaining bitterly about having to work 40 hours a week. “He thought that if he went freelance he would magically become happy,” she said.

She asked him, “How many hours a week do you think you’d have to work if you were freelance?” The man put the number at about 35. She told him he needed to double that number, at a minimum.”

I’m thrilled that the NYT and other media have started acknowledging that Americans can take their income into their own hands and start earning more.

In fact, my own proprietary data confirms what the NYT author notes: The #1 reason people decide to earn more is not because they want to fly to Vegas for the weekend, or because they want to pay off debt. It’s because they want have the option of eventually quitting their job and working on something they love.

BUT…there are a few things I want to note:

  • The NYT article confounds “being an entrepreneur” with “earning money on the side.” The term “entrepreneur” is loaded and often makes people feel uncomfortable, conjuring up images of having employees, massive payroll, and a complicated setup. Guess what? I know 1-man entrepreneurs who make more than 20-person companies. You don’t have to describe yourself as an entrepreneur, but you can think entrepreneurially.
  • It’s sexy to write about being an entrepreneur (i.e., dropping everything and going to work for yourself with no life vest). Yet this happens for perhaps less than 1% of the population — and rightfully so. For the vast majority of people, there are better ways to manage risk and earn more than jumping head-first into an unproven idea.
  • Again, there’s a more common, long-term, and sensible method of thinking entrepreneurially and earning money on the side. As I teach in my Earn1k course, you employ the Tuner Strategy to execute a series of small, increasing wins. For example, once you earn $500, then $1,000, then $5,000/month, you mitigate risk and you’re far more equipped to make decisions about what you really want to do.
  • The vast majority of my students who are earning more money on the side — whether $100/month or $10,000/month — will never quit their jobs. They’ll just earn more on the side, saving/investing/spending it and living a rich life. Nobody says you have to quit your full-time job if you enjoy it.

Bottom line: When you equate “earning money” with “I need to start a company like Google,” that’s ultimately paralyzing. You don’t have to put it all on the line or make a huge life change.

Instead, think of earning money as an opportunity to make a series of small bets in order to rapidly find one that’s profitable. If you want to scale up and go full-time, great! But most people don’t ever need to do that. It’s nice making extra money on the side and giving yourself more opportunities to do the things you love.

As always, you can get extremely comprehensive material (videos, case studies, worksheets, and more) from my free Earn1k preview course.

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22 Comments

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  1. Making money on the side is what working for yourself is all about. Although relying entirely on side money is not the same as working for yourself..

  2. You work full time for someone’s business and I agree what ramit wrote.. it’s same thing as tell us to “mind your own business” like the book said “rich dad and poor dads” by Robert Kiyosaki (great book)

  3. “The man put the number at about 35. She told him he needed to double that number, at a minimum.”

    Ms. Pryce-Jones forgot one thing: He could double his rates (or a bit more than double) and meet his criteria of only working 35 hours per week. Of course, that’s not the real barrier. The real barrier is selling yourself as worth that much to potential employers, and getting told “no” a lot. Get through those barriers, and your income potential is basically unlimited.

    -Erica

  4. One of my best buddies is an awesome chef and loves being creative with food. Naturally, his dream is to own his own restaurant. The problem is he sucks with money and his girlfriend forever is even worse. That’s cool though, because there are 10,000 ways he could make money using his talents and passions without opening his own restaurant. We will talk about them from time to time and he will get excited, only to never do anything because, as he says it, “I want to stop working for the man and start my own restaurant.” I’ve finally realized that owning the restaurant is his crutch so that he can talk big without ever having to do anything. The restaurant is his Google, in that he can cop out and say that it is all or nothing, and because he will never have the money for all, he will always have nothing.

  5. I agree with Erica above.

    First thing, the client should do is fire this consultant telling him that he needs to work 70 hrs per week. She just created a clutch for him. I can hear him saying now, “I don’t have that much time. Oh well, back to the cubicle for me.”

    He should double or triple his rate and shoot for 20 hrs per week of billable hours and spend the other 20 hrs on marketing and sales. The fact that he’s working less will make it easy to find customers willing to pay higher rates and provide service levels that will command a higher rate.

    Have you ever called 5 plumbers for a job and only one calls you back? I have and gave that plumber the work just because he called me back even though he was more expensive. Guess what? He did the job quickly and my wife was very pleased with his work. If we need a plumber again, we’ll call just him even knowing that he costs more. All the cheaper plumbers were too busy and missed the opportunity to get a higher end client.

    I could go on and on about this one. It’s like the difference between a Hyundai and a BMW. A Hyundai owner will say that people are crazy for buying a BMW. A BMW owner couldn’t imagine driving a Hyundai. They are both made from the same metal and rubber, but the BMW is worth more. We should all work toward making our business the BMW.

    Dan Kennedy puts it best by saying, “You don’t want to roll in the mud with Wal-Mart” trying to compete with them on price. Instead offer something they don’t.

  6. Great point – it’s so scary to think about every single aspect of owning your own business, scary enough that most people back off. On the other hand, it’s easy to say, “Hey, I like to knit. Let’s see if I can sell a couple of my hats while I keep working my daytime job.” Not nearly as much fuss as “omg I have to set up an entire online store and get tons of inventory and order business cards and wait for someone to find me.”

    [Full disclosure: I did the latter for awhile. It sucked.]

  7. I feel that apart from earning more, if you spend wisely as well, getting more mileage from every dollar, a dollar saved would equal a dollar earned!
    A combination of earning more and spending wisely, getting more value for money is, in my opinion, a killer combination.

  8. ‘The term “entrepreneur” is loaded and often makes people feel uncomfortable…’

    I agree it does. It seems to insinuate someone who takes risks and then achieves huge returns. Although this may be the case for some, earning money on the side before taking the leap is probably far more attractive to most people – and it doesn’t seem as daunting as thinking ‘I will wake up one day, quit my job and become an entrepreneur’.

  9. As a college student, sometimes it can be daunting to “start a company” because the very images you talk about come to mind. The reassurance of being able to make money on the side – without having employees – is helpful in creating wealth while in school.

  10. more great advice- thanks!!

    i do feel guilty about this recent rash against business cards- i just ordered a new set! but to be fair, the last set i ordered was just to have something to hand out with my name and number on it- i finally designed a nice card with some art and branding to match the style of art i’m working in presently. i don’t think it’ll magically bring in work, but it’s nice to have some matching stationary to look professional.

    but as penance, i emailed a client i’d love to have and asked to set up a meeting to review my portfolio, and made contact with some old clients- actual real steps to getting work.
    perhaps i shall hand out my new business card if i get the meeting :>

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