Or…The Rise of the Dual Income Individual
Let me be more specific.
Obviously, I have nothing against a person taking on a second job or starting a small business to help supplement their income. In fact, these seem to be more often the norm than the exception.
Increasingly in the United States, you need to have a separate part-time job or small business in order to afford basic living expenses or achieve that next financial level up, like buying a home.
This is my problem with the side hustle culture: when we ignore the new necessity of the dual income individual and instead wrap it up like a new generation savvy American entrepreneurs. Dressing up our affordability crisis as a new wave of entrepreneurship kindly sounds like “the man” keeping us distracted, tired, and quite likely poor.
Especially if you were junior enlisted, a side gig was probably essential to affording anything beyond your basic necessities. As you’re separating from the military, consider your side hustle commitments carefully. While your were in, you could rely on the military for your essentials—housing, medical, education—with some much appreciated tax advantages and tax exemptions. Once you separate, though, you may feel the squeeze the of the cost of living.
As you decide how to supplement your income, choose deliberately. A side hustle could be starting a small business, a true entrepreneurial pursuit worthy of the distinction as a “small business owner” where there are public resources to support your business.
Be wary, however, about the overly glorified side hustle that’s really just a second job. If you’re solution to the squeeze is simply working longer hours away from your family, then that’s entrepreneurship, and it may be taking away critical time and energy you need to build lasting financial security and, ideally, independence.
The American Dream is Quite Expensive
Once upon a time, circa 1960s, a family could afford a home, a car, their childrens’ higher education, and a comfortable middle class life on a single, middle class income. Obviously, this is not a post glorifying the “good ole days.” My only point is to highlight just how desperate affording to live in the United States has become.
According to the Federal Reserve Bank of St. Louis, the median sales price for homes sold in the United States at the end of 1975 was $41,200. Obviously, average wages were much lower then, too, at $13,720 according to the United States Census Bureau. So, average home prices were about 3x average incomes.
Now compared to the end of 2023, the average home price is $431,000 and the average wage is $74,580. Home prices are down since the COVID home buying rush peak in 2022. This means in 2023, homes are about 6x the average income.
Don’t even get me started on the cost of higher education. But we’re getting away from the central theme of this article: the side hustle.
The Dual Income Individual
With these realities in mind, it’s no surprise that not only are dual income households the new necessary, but dual income individuals are following closely after. It’s the new American anthem, having multiple streams of income—the glory of the American entrepreneurship spirit. Except it’s not.
What side hustle culture really looks like to me is the new American “can do” attitude covering up “middle class” Americans having to take on multiple jobs to afford basic living expenses.
Breaking Down the Phrase “Side Hustle”
I know this literal take on the word probably comes across as culturally-deaf—everyone knows “side hustle” means a legitimate paid job nowadays—but hear me out.
Hustle means “to sell aggressively,” “obtain by illicit action; swindle; cheat” (Oxford Languages). That sounds like a far cry from entrepreneurship, which means “the activity of setting up a business or businesses, taking on financial risks in the hope of profit” (Oxford Languages).
So the real question is: Is your “side hustle” a real business, or simply a second job?
When Your Side Hustle is a Second Job
Now time for the difficult conversation for my friends with the second job like rideshare driving, delivering, or any other job that compensates directly based on hours worked, miles driven, trips taken, etc.
This is hard work, but this is not entrepreneurship. This is a second job.
As our Rich Dad, Poor Dad taught us, any job where your compensation is directly tied to how many hours—or how many trips—you put in that day, is a job. Even if you worked 24 hours a day, 7 days a week, there is a cap on how many hours you can work a month—720 hours to be exact. There may certainly be ways to increase efficiencies, but eventually, you’re going to hit an upward limit where you simply run out of hours in the day.
For every hour you give to someone else’s business, there is an opportunity cost. Usually, it’s worth it! That’s why the vast majority of Americans have a job where they go to work for someone else instead of a starting business working for themselves. Business ownership is also hard work, and the reward can be far less predictable.
Once we start taking on second and third jobs, though, the question we should be asking ourselves is not, “How can I work more hours around my first job?” but rather, “How can I make more money for the hours I work?”
While the number of hours in the day is capped, your potential earning per hour is not technically capped. Of course, there are market constraints for what someone else is willing to pay for your service, skill, or product, but with a job, those can be fairly predictable. Of course, growing your compensation per hour is easier said than done. The point here is to reframe your thinking from, “I need to sell more hours,” to “I need to sell my hours for more.”
When Your Side Hustle is a Business
A business on the other hand, is one where your labor hours are not directly tied to potential profit—for better or worse, but hopefully better. A scalable business is one where profits can grow almost independently of anyone’s inputted hours. Unlike wages from a job, business profit is not necessarily capped by the number of hours in the day.
If your side job is truly a side business, call it what it is, a business! You’re a small business owner! Celebrate it! Own it! Why diminish that work by calling it a “hustle”?
Obviously, there are several risks to starting a business—I’m not suggesting that everyone should immediately quit their first, second, and/or third jobs to start a business. The point of this post is a call to action to have the conversation with yourself.
Make a deliberate decision, not a decision by default. Do you really need to work more hours? Or do you need to earn more for the hours you work? Or even better, “How can I make money independent of how many hours I work?” If your goal is entrepreneurship, financial freedom, financial independence, I challenge you to start asking yourself that last question. You aren’t going to get rich by working more. You must work wiser, focusing your effort toward building passive income—income that arise every month regardless of whether you work or not.
Conclusion
By all means, work more if you have the energy and desire. If, however, side hustle culture has just left you disillusioned and exhausted, ask yourself if your side hustle is actually providing for you?
If you’re merely compensated by the number of hours worked and miles driven, is that enough? Is what you really need a way to earn more for each hour you’re already working? Better yet, to begin building passive income where money comes in even if you didn’t work at all?
Have you actually started a small business? If so, frickin’ celebrate that, and call yourself the small business owner you are! Get connected with your local Small Business Development Center through the U.S. Small Business Association to learn how to manage and grow that business.
Don’t confuse the side hustle movement for entrepreneurship or leveling up. The side hustle culture is more like a screen, confusing having a second job with true entrepreneurship. Or worse, the side hustle culture is actually glossing over the grim reality that the dual income individual has become the new norm—replacing the dual income household.
If your real goal is financial freedom, the real question you should start asking yourself is, “How can I make money independent of the number of hours I work?”
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