Here's the latest post in the Rockstar Finance Money Match-Up series where two money bloggers argue opposite sides of an issue. Today's issue pits working to grow your career versus taking the time and developing a side hustle. Which is better? We'll begin the debate with The Flawed Consumer arguing...
Why Career Progression is the Best Way to Increase Your Income
Over the past year I’ve done a lot of toing and froing on the idea of what is the best way to secure additional income…career progression or a side hustle? At various times throughout the year, my views have changed from side-to-side depending on the context and circumstances. However, despite my indecisiveness throughout the year, I’ve finally come to realize that the best means of securing additional income is through career development. So, today I’m going to show you why career progression really is the better option.
The chances of progression are high throughout your career
The Oxford dictionary defines ‘career’ as “an occupation undertaken for a significant period of a person’s life and with opportunities for progress”. Part of this can be attributed to the experience that inevitably accompanies working within the same field for a substantial period of time, which makes you more lucrative to your employers. Consequently, just going about your day-to-day work over a number of years alone is likely to result in improved income through promotion.
Career progression requires minimal extra work
The joy of career progression is, if you have a good work ethic and ability to learn new skills, you generally don’t need to do much extra work to secure higher positions and additional income as a result. As Thomas Edison stated, “there is no substitute for hard work”; consequently, it’s just a matter of how much hard work you want to put in. Pursuing a self-employed side hustle or second job, requires investment of substantial additional time and energy simply to make a return on your investment. Alternatively, in your day job you’re already making a return on your investment, so all you need to do is make even more of a return.
Career progression doesn’t require extra time or money for commuting
Most people aren’t lucky enough to be able to work from home for their job. As a result, travel via car, public transport, cycling or walking is inevitable. If you’re like me and live in the suburbs and work in the City, public transport or car travel are the only realistic options. This is costly, with average commuting costs per week estimated to be $38 per person in Australia (CoreData, Commuting Survey, October 2016). Fortunately, using career progression as a means of securing additional income removes the need to add additional commuting costs to your list of expenses as you’re already at the place you need to be to earn extra $$$.
It’s easy to contribute more to your retirement fund
In Australia, it is compulsory for employers to pay at least 9.5% of an employee's wages into their superannuation retirement account in addition to wages. This is an excellent benefit of career progression, as you will get higher and higher employer contributions into your retirement account as you progress up the ladder, resulting in a more comfortable retirement.
Career progression doesn’t complicate your tax return
If you’re like me and do your tax return yourself, the idea of needing to spend even more time than you already do to figure out your income and claims is not appealing! It’s hard enough to figure out how to properly account for investments. Consequently, the last thing you need is to keep comprehensive records of two lots of income, expenses, superannuation contributions, etc. Fortunately, with career progression, you only need to keep on top of one lot of all of these things for tax time, whilst making more and more income.
You don’t need to establish networks twice
For introverts (approximately one third of the population according to introvert extraordinaire Susan Cain), the idea of meeting new people, establishing relationships and engaging in “unnecessary” social interactions can induce considerable anxiety. As a result, the idea of having to establish multiple professional networks can be terrifying. Fortunately, for us folk who don’t enjoy the networking component of our professional lives, career progression within our current workplaces saves us the hassle of having to establish multiple networks.
You can make extra money and still have time for a side hustle, hobby, or quality family time
Another joy of career progression is that you usually don’t need to put in much extra time at work in order to perform at the level you’ve been promoted to. This is because, generally, if you’re being promoted it’s because you’ve demonstrated that you already possess the skills to perform at a higher level. Consequently, you don’t need to invest much more time into higher roles to make much more money. Speaking from personal experience, I can hand on my heart say that I only put in an extra 1-2 hours per week than I did when I first started my career 6 years ago. However, I’m earning an extra $35,000 a year than when I first started because of career progression. This can be attributed to efficiency alone. In my experience, as you gain experience and progress through the ranks, you not only learn technical skills, but you learn critical leadership skills of time-management, prioritization and delegation which help you to perform more complex duties within similar timeframes.
Career progression results in a sense of achievement and keeps your day job interesting
One of the greatest benefits of career progression has to be the sense of achievement and renewed challenge and enjoyment of work it creates. Nothing quite beats a promotion for spurring motivation and keenness within your day job. ---------------------------------------------------------------------------------------------- Next we have Personal Finance for Beginners who lists...
Seven Reasons to Choose Side Hustles Over Career Development
Side hustling – earning income outside of your day job – can help you more quickly reach your personal and financial goals. Why choose to side hustle instead of doubling-down on your career? Instead of dealing with the bureaucratic aspects of a traditional job, you can focus on the work, skills, and relationships that appeal most to you. Here's a closer look at seven reasons why you should prioritize a side hustle over career development. You can be sure that at least a few of these reasons will resonate with you. 1. A side hustle falls within your control. You can spend hundreds of hours working on “career development,” but if your efforts don’t match the needs and circumstances of your employer, there’s no guarantee that your hard work will translate into a promotion or raise at all. A side hustle doesn’t depend on your relationship with your manager, your department’s budget, or the shareholders’ vote – your success is a byproduct of your work. 2. A side hustle diversifies your income. You understand the importance of diversifying your investment portfolio... Why not diversify your income as well? You can use this additional income to pay down your debt or increase your retirement contributions. It can take several weeks, even months, to get a raise approved at work. With a side hustle, you can start earning money immediately. 3. A side hustle provides a safety net. If you are considering a focus on career development, there’s a good chance that you are highly engaged and loyal employee. Unfortunately, your employer may not reciprocate this same level of commitment. If you lose your job, it doesn’t matter how far up the corporate ladder you advanced because of your commitment to career development. During times of financial uncertainty, you can create a safety net by focusing more time on your side hustle (or turning it into a full-time gig, if necessary). 4. A side hustle gives additional purpose and meaning. Side hustles offer all of the main factors that psychologists suggest you need to stay motivated and emotionally satisfied:
- Autonomy: Choose your “work” environment, your goals, and how you spend your time
- Competency: Side hustles frequently require developing and mastering new skills
- Connection: Expand your network as you find new mentors, peers, and customers
5. A side hustle offers a change of pace. After spending eight or nine hours working at the office, who wants to drive home just to spend the rest of the evening studying training materials, preparing for meetings, or responding to emails? A side hustle provides an opportunity for you to “escape your day job” by encouraging you to focus on new goals, ideas, and relationships that will help renew your mind and boost your finances. 6. A side hustle opens different doors. There’s only so much room for growth within your existing employer or career field. It’s possible you’ve already taken advantage of the majority of the opportunities available. Perhaps you’ll be waiting for your manager to move to a new role or leave the company before there’s room for you to receive a promotion. Your annual merit-based raise – should you be so fortunate – is non-negotiable and barely exceeds inflation, meaning the money just is just enough to help you get by. A side hustle isn’t limited by the frameworks of a company with its hierarchies, budgets, policies, and cultural “expectations.” A side hustle provides an open road to explore your potential. 7. A side hustle builds your network. Take a moment to review your LinkedIn connections. Most likely, your network largely consists of coworkers from your recent employers. A side hustle encourages you to develop relationships with “weak ties” – the individuals you may not interact with frequently but who can open the doors to better employment opportunities, a desired career change, or taking your side hustle to new heights.
Overcoming objections about side hustles
“I don’t have time for a second job! Isn’t a side hustle risky? But I’m not an entrepreneur!” These are a few of the main arguments against starting a side hustle. However, you shouldn’t let them discourage you: A side hustle demands too much personal time. This depends on your main objective for side hustling. If you’d like to replace your full-time income, then yes, it’s going to require a significant investment of your time! For someone just looking to earn some extra cash, though, side hustling offers incredible flexibility. Depending on your side hustle, your time investment can fluctuate with your life circumstances or how much money you’d like to earn. A side hustle is too risky. On the contrary…it’s too risky not to side hustle! A side hustle doesn’t have to be expensive. Many side hustles have minimal-to-zero startup costs. In exchange for your time, you’ll enjoy additional income while developing new skills and relationships that can help you stay afloat should you lose your job or seek a new role somewhere else. A side hustle is just for entrepreneurs. You don’t need to consider yourself an entrepreneur to enjoy side hustling. Some individuals decide to start their own business, but you may choose to earn money from other opportunities like a part-time job (bartending) or “gig economy” work (driving for Uber).
Forget forking out thousands of dollars to earn another degree or certification, attend industry conferences, or small-talk at networking events. Side hustling outperforms career development across the board – in earning potential, lifestyle flexibility, and opportunities for personal growth. No matter your skills or interests, you can find a side hustle that works for you. Side hustling does require hard work, patience, and discipline, but just wait until you earn that first dollar outside your day job… you’ll be hooked! So, those are the two sides of the equation. Which do you think is better for you?