Financial independence is the ultimate goal for folks spending their lives at work, but there are many ways of making a living, from full-time employment to obtaining multiple streams of income. From recovering from the recession to layoffs and personal struggles with health and finances, many people prefer to have multiple streams of income. But is it really necessary?
Those who rely on many sources of income have their reasons, and sometimes it’s down to the preference of being your own boss. Having multiple streams of income affords unique benefits, but the need for it depends on each individual and their set of circumstances.
Contracting and Temporary Work on the Rise
In today’s workforce, more individuals are choosing alternative career paths and work arrangements. In fact, between 2005 and 2015, the United States saw at least 100 percent of job growth from temp or contract jobs, where there’s a clear economic trend across the board since emerging from the recession. As the trend shifts, this type of professional lifestyle and career choice may be here to stay, and the global workforce will have to adjust.
Many contract or temporary positions do not receive benefits from the employer, as the contractor pays and provides their own. Self-employed individuals bear the taxes, the costs of healthcare, IRA contributions and more, and it takes much focus, ability and confidence to be your own boss. There is risk with any job of income loss, but 1099 contractors are typically employed at will — so, they must think ahead, setting aside a larger emergency fund, with enough for living expenses.
With this trend on the rise, what is the inspiration behind the decision to take on a side gig? Each person must consider their unique professional and personal needs and commitments.
What Situations Inspire People to Contract?
Self-employed individuals are busy as those working a nine to five job, but they may have children or relatives to care for. They may prefer the freedom and challenge of working for oneself. You’re also able to scale the career ladder more at your own pace, rather than wait for your employer to promote you. Your circumstances greatly depend on the decision to become a self-employed worker. When one contract ends, you move on to the next.
While it seems like a precarious, financial juggling act, contracting also provides flexibility to pick up work elsewhere, letting you travel and enjoy unique global experiences. More people are choosing to become entrepreneurs or contract workers, because of the freedom, flexibility and personal satisfaction it provides, and 67 percent of millennials want to “opt out” of the corporate rat race for these reasons.
These situations inspire professionals to start their own businesses, to contract and seek temporary work, because they need multiple streams of income to support their unique set of needs and life goals.
Beyond Career Security, Full-Time Workers Use Side Gigs to Enrich Life
Many traditionally full-time employees also have alternative sources of income for their own reasons. They also have family that needs taking care of and want to take an extra part time job to pad personal retirement or health accounts. Keeping other professional or personal talents fresh by working a side gig is also a form of insurance, assuring you that you’ve a back up option for work should your job be terminated.
Yet with a steady income and set hours, sometimes comes feelings of burn out or being boxed in. Where’s the creativity and personal satisfaction of contributing to society beyond showing up for work? For the full-time employee, side gigs are also life enriching, opening up networking and volunteer opportunities, work on passion projects that pay a little and develop skill sets.
Many people work various side gigs to strategically save for a particular goal, whether that’s just in case you fall on hard times or want to live life to the fullest. Many use side gigs to shift into working for themselves, traveling, donating to an important cause, retiring early or simply being prepared.
Multiple streams of income may help you achieve financial independence, but rather than focus on monetary value, the need for this is also about life enrichment and achieving important goals. Whether caring for a sick relative, donating to a cause, padding retirement accounts or wanting to travel the world, only you can decide if you need multiple streams of income.
Can you afford to take on extra work, or can you not afford to take on extra work? If your life needs more enrichment and you’ve goals to achieve on a fast trajectory, taking in another source of income is probably right for you.