AI transcript
0:00:03 Here are three ways to get out of the rat race.
0:00:05 Now getting out of the rat race is simple,
0:00:07 but not necessarily easy to escape.
0:00:10 All you need is monthly income from a source
0:00:13 other than your job that exceeds your monthly expenses, right?
0:00:15 Simple, but not always easy.
0:00:16 I’m Nick Loper.
0:00:17 You’re listening to The Side Hustle Show
0:00:19 where we’ve been making day jobs optional.
0:00:21 Since 2013 in this episode,
0:00:22 I’m breaking down those three most common
0:00:24 rat race escape routes,
0:00:26 including the one at the end that got me out,
0:00:27 the pros and cons of each
0:00:30 and how to choose the right path for you.
0:00:33 So remember that freedom equation is non-job income
0:00:36 that is exceeding your monthly expenses.
0:00:38 The three most common ways to generate that income
0:00:40 are traditional investments,
0:00:41 real estate and entrepreneurship.
0:00:45 These are in contrast to and probably more realistic
0:00:48 than the other paths that some people bank on
0:00:50 like an unexpected inheritance,
0:00:53 a lonely Nigerian prince or winning the lottery.
0:00:56 But what’s maybe even more surprising is most people
0:00:59 don’t really seem to have much of a plan at all.
0:01:01 They’re just going through life day to day
0:01:05 with the assumption and hope that someday they’ll retire,
0:01:07 but it doesn’t really work that way.
0:01:09 And if you’re not steering your own ship,
0:01:12 I’m not sure you’re gonna ever get to where you wanna go.
0:01:14 The first step in escaping the rat race
0:01:17 is to figure out your actual monthly expenses.
0:01:19 What is your lifestyle cost?
0:01:22 This isn’t gonna be a lecture on extreme frugality,
0:01:24 but at the very least spending with intention
0:01:27 has gotta be a part of your rat race escape math.
0:01:30 I mean, why set the bar unnecessarily high?
0:01:33 And if you’ve never calculated how much you actually spend
0:01:35 on a monthly basis, it’s worth taking a minute
0:01:37 to figure that out.
0:01:40 This was an exercise that my wife and I did last year.
0:01:42 We kind of had this offsite retreat.
0:01:45 We went through Monarch money and we were like,
0:01:48 well, in our mind, we had a typical monthly budget,
0:01:49 kind of like bare bones.
0:01:51 Well, we know how much the mortgage is,
0:01:53 we know how much we roughly spend on utilities
0:01:55 and groceries, but why is the credit card bill
0:01:56 always so much higher?
0:01:58 And it’s like, well, we bought plane tickets
0:02:01 or we had this repair charge.
0:02:03 It was always higher than what it was.
0:02:06 So we looked at, well, how much do we actually spend
0:02:07 on a monthly basis?
0:02:09 And the number is gonna be different for everybody.
0:02:12 It might be $3,000, it might be $10,000.
0:02:15 But how much does your lifestyle cost?
0:02:17 That’s the income that you need to generate.
0:02:20 That’s your rat race freedom number.
0:02:21 So how do real people achieve it?
0:02:24 The first way is to save your way out
0:02:26 with traditional investments.
0:02:29 This is probably the most commonly prescribed path
0:02:32 to retirement, whether early or not.
0:02:36 And this is stocks, bonds, mutual funds, ETFs,
0:02:38 stuff like that, paper assets.
0:02:42 And this is how retirement has worked for generations, right?
0:02:45 Amass a big enough nest egg during your working years
0:02:49 and then slowly draw down those savings
0:02:50 after you stop working.
0:02:52 And the problem is, if you’re listening to this,
0:02:53 you probably don’t wanna wait decades
0:02:55 until you’ve saved enough.
0:02:56 Now, the fire movement,
0:02:59 the financial independence, retire early movement
0:03:00 has an alternative for you
0:03:03 and argues that retirement isn’t an age.
0:03:05 You don’t have to wait till you’re 65.
0:03:06 It’s a number.
0:03:10 It is 25 times your annual expenses in savings.
0:03:12 This is from the Trinity study.
0:03:13 I think it was like late ’90s.
0:03:16 They did back testing on a bunch of 30-year scenarios
0:03:19 in the market and said 95 times out of 100.
0:03:22 If you’re starting nest egg is 25 times your expenses,
0:03:23 you’re unlikely to run out of money,
0:03:24 at least 95% of the time.
0:03:26 And this is not set in stone.
0:03:28 Like if the market has a series of bad years,
0:03:30 you could adjust your expenses downwards
0:03:32 to hopefully make it last a little bit longer.
0:03:34 So what does that look like in real numbers?
0:03:37 If you’re spending $40,000 a year,
0:03:40 you could theoretically leave the rat race behind
0:03:43 once you got a million dollars in traditional investments.
0:03:46 You live off dividends and share price appreciation
0:03:47 for decades under that scenario.
0:03:49 If you spend $100,000 a year,
0:03:50 you need two and a half million.
0:03:52 Now, there are a few advantages
0:03:54 to this kind of traditional investment,
0:03:56 this traditional path to retirement.
0:03:58 One is that these so-called paper assets
0:04:00 are accessible to just about everyone.
0:04:02 You can even invest right from your phone
0:04:04 with any number of different brokerage apps,
0:04:07 stocks, bonds, mutual funds, ETFs.
0:04:08 They’re highly liquid,
0:04:11 meaning you can buy and sell them quickly if you need to.
0:04:15 And over the long run, they’ve performed historically well.
0:04:19 Like projecting seven to 9% annualized returns
0:04:21 would be realistic there.
0:04:24 Their biggest drawback is trying to get out of the rat race
0:04:27 with traditional investing either takes a lot of time
0:04:31 to let compounding do its thing or a lot of money.
0:04:33 Now, despite enthusiasm from the fire community,
0:04:35 which I would consider myself a part of,
0:04:39 I like that they put a milestone, an end game,
0:04:41 a goalpost, something to reach,
0:04:42 something that’s hopefully attainable
0:04:46 and doesn’t have to be related to your age more or less.
0:04:49 But the truth is, unless you have a really wide margin,
0:04:52 a lot of profitability in your personal finances,
0:04:54 that’s the gap between what you earn and what you spend.
0:04:58 There’s really no shortcut to building up that nest egg.
0:05:00 Plus, if you have unexpected expenses
0:05:02 that pop up during retirement,
0:05:05 your assumptions around withdrawal rates
0:05:06 can probably go out the window.
0:05:08 For the traditional investing path,
0:05:10 if you go way back in the archives,
0:05:12 you’ll find episode 105.
0:05:15 This is probably from like year two or three of the show.
0:05:18 This is with Jeremy Jacobsen from Go Curry Cracker,
0:05:20 who retired in his late 30s,
0:05:24 thanks to this high level of personal profitability
0:05:25 that we’re talking about.
0:05:29 – We were roughly saving 70-ish percent of income
0:05:30 for quite a while.
0:05:33 And then I probably worked three years too long
0:05:36 and was saving nearly 100% of income at that point.
0:05:39 If you’re just living off the dividends and interest,
0:05:41 if you’re saving that percentage of income,
0:05:43 it really only takes about 10-ish years
0:05:46 in order to build up enough net worth
0:05:47 to fund your lifestyle forever.
0:05:50 – What kept you working those extra three years?
0:05:53 Was it just the, like, can we really do this?
0:05:55 – There’s a little bit of that.
0:05:56 You know, maybe I’d call it fear.
0:05:58 Nobody does this.
0:06:00 Can we, yeah.
0:06:02 Like, I’ve read stuff, but thinking you can do it
0:06:05 and actually doing it are two very different things.
0:06:09 – That mindset shift from saving and investing
0:06:12 and accumulation to all of a sudden drawing down,
0:06:14 intentionally bringing your earned income to zero,
0:06:16 that’s a complete 180.
0:06:19 And even if the math and the models
0:06:21 and the projections say you’re gonna be fine,
0:06:24 I think it’s a lot harder to pull the trigger in reality
0:06:26 and just toss your career aside.
0:06:27 So one thing that we’re trying to do
0:06:28 that we’ve seen some other friends do
0:06:33 is as that nest egg grows, scale back some working hours.
0:06:35 Maybe you don’t jump off the cliff.
0:06:37 Maybe you kind of start repelling down, you know,
0:06:39 one level at a time.
0:06:41 Maybe that means negotiating a working part time
0:06:45 or only four days a week or transitioning to a role
0:06:48 that is less demanding and requires much overtime.
0:06:52 It’s reducing your income by baby steps
0:06:54 rather than going cold turkey all at once.
0:06:59 So who is this traditional investing route best for?
0:07:02 I think this is the best way to escape the rat race
0:07:07 for high earners who live a relatively inexpensive lifestyle.
0:07:10 If you or you and your significant other
0:07:13 bring in say $300,000 a year,
0:07:16 but you only spend 50, this is a great option.
0:07:18 Now, if you ignore taxes for a second,
0:07:20 because that always throws a wrench in any time
0:07:23 on the air math, but you can see how it would only take
0:07:27 five years if I’m saving, if I’m profiting $250,000 a year
0:07:29 as a household, it would only take five years
0:07:32 to accumulate that one and a quarter million
0:07:35 that I would need to support that $50,000 a year
0:07:37 lifestyle in retirement.
0:07:40 So that means if your work is tolerable,
0:07:41 I think those five years are gonna fly by
0:07:45 and that assumes you’re starting at $0 in savings today.
0:07:48 Now, on the other hand, if you make $50,000 a year
0:07:50 and you spend 49 of it,
0:07:52 traditional investing is never gonna get you
0:07:53 out of the rat race.
0:07:56 There’s simply not enough savings margin there,
0:07:57 which brings us to option number two,
0:08:00 which is to beat the rat race with real estate
0:08:02 and that’s coming up right after this.
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0:10:28 The second common rat race escape path is real estate.
0:10:29 And for the sake of this episode,
0:10:32 I’m gonna focus on rental property investing.
0:10:34 Real estate comes in so many different flavors
0:10:36 and strategies, many of which we’ve covered
0:10:38 on the SideHustle show before,
0:10:41 but we’re focusing on rental property investing in this one.
0:10:44 So how real estate works to escape the rat race,
0:10:46 it’s pretty easy to understand business model, right?
0:10:48 You buy a house, you rent it out,
0:10:50 and you pocket the difference between that rent
0:10:51 and your monthly expenses.
0:10:55 Your mortgage, your insurance, your maintenance costs, right?
0:10:56 And lather, rinse and repeat
0:10:59 until you got enough monthly cash flow to quit your job.
0:11:00 This is what Dustin Heiner did,
0:11:04 who for him, it was around 26 different properties
0:11:07 and around $15,000 a month in reliable cash flow.
0:11:11 He retired at age 37 and supports his family
0:11:14 off the income from that rental property empire.
0:11:17 So his big thing is invest with that monthly cash flow
0:11:21 in mind and then use it to start slowly chipping away
0:11:23 at your own living expenses.
0:11:26 Again, another argument for keeping those expenses low
0:11:27 ’cause the lower they are,
0:11:30 the less properties, the less cash flow
0:11:31 that you’re gonna need.
0:11:33 Now rental property investing can accelerate your climb
0:11:36 to financial independence in several important ways.
0:11:39 First, you can take advantage of leverage.
0:11:41 That’s borrowing money in contrast
0:11:44 to traditional stock market investing
0:11:45 that we talked about a minute ago
0:11:49 where $20,000 buys you $20,000 worth of index funds.
0:11:52 That same $20,000 could be used as a down payment
0:11:55 to buy $100,000 or more worth of real estate.
0:11:57 Then you can pay down that loan balance
0:11:59 with the rental income that you receive
0:12:01 over the next 30 years.
0:12:03 The next big advantage of real estate
0:12:04 is appreciation.
0:12:06 As you know, houses tend to cost more today
0:12:08 than they did a generation ago.
0:12:10 By buying those properties,
0:12:12 you can capture this appreciation when you sell
0:12:15 or you can borrow against that equity
0:12:18 in your houses to fund future acquisitions.
0:12:19 This is another thing that Dustin talks about,
0:12:22 kind of like recycling that initial down payment money
0:12:25 as equity as future down payments.
0:12:27 And third, being a landlord comes
0:12:30 with a bunch of different tax advantages, tax benefits
0:12:33 including the ability to write off your mortgage interest
0:12:36 and even take depreciation on the buildings that you own.
0:12:40 Finally, real estate can be a pretty passive income stream
0:12:42 once you have your tenants and other relative
0:12:44 or other relevant team members in place.
0:12:46 Yes, there’s an up front time investment
0:12:49 but no trading hours for dollars down the road.
0:12:51 So what disadvantages should you be aware of?
0:12:54 Well, home prices don’t fluctuate as wildly
0:12:58 as the stock market but investing in physical assets,
0:13:00 it does take more legwork and it also means
0:13:02 that your cash isn’t as liquid.
0:13:04 And by that I mean you can’t just push a button
0:13:07 on your phone and sell a house when you need cash
0:13:09 like you could do with an index fund.
0:13:11 And although there are some creative ways
0:13:14 to buy houses with no money down,
0:13:16 like we talked about in our creative financing episode
0:13:18 with Austin Miller, really fun episode,
0:13:23 real estate is usually a takes money to make money option.
0:13:25 And as a landlord, you’re also gonna face vacancies
0:13:27 if the house sits empty,
0:13:28 that erases any positive cash flow
0:13:31 you were banking on that month, repairs and maintenance,
0:13:34 roofs, windows, toilets, water heaters,
0:13:35 nothing lasts forever, it all costs money.
0:13:38 And if you’re the owner, it comes on you.
0:13:41 There are unexpected expenses like our friends in California
0:13:45 had to redo their foundation to the tune of like $90,000.
0:13:47 There might be tenant issues that come up
0:13:50 and why some humans think it’s acceptable
0:13:51 to trash other humans property,
0:13:53 other people’s houses is beyond me.
0:13:56 But you might be lying if I said it didn’t happen.
0:13:59 On top of that, your local real estate market
0:14:00 might not be a great place to invest.
0:14:03 So you might be dealing with all of this remotely
0:14:05 or through a third party management service.
0:14:07 So who’s real estate investing best for?
0:14:10 The people I see having the best success with real estate
0:14:12 are those who take a long-term view
0:14:15 and are committed to operating multiple properties.
0:14:17 I don’t think one house is gonna get you there.
0:14:19 Now, especially if you can buy multiple properties
0:14:22 in one location, there are some economies of scale
0:14:25 that might make life easier than having only one house
0:14:28 or having houses in different cities across the country.
0:14:29 The reason for that is that way
0:14:32 you can have one property management company
0:14:34 or one general contractor person
0:14:36 that you have as your go-to in that space
0:14:39 versus having spread out in different cities
0:14:40 all over the place.
0:14:41 Now, as your empire grows,
0:14:44 you’re also better able to absorb a vacancy here or there
0:14:47 or an unexpected expense for a property or two
0:14:48 in any given month.
0:14:50 But just like traditional investing,
0:14:53 real estate can and does work to escape the rat race
0:14:56 if you have the capital, the patience and the fortitude
0:14:57 to stay the course.
0:15:00 If the idea of accumulating a portfolio
0:15:02 of cash flowing real estate appeals to you,
0:15:05 check out episode 387 with Dustin Heiner.
0:15:07 It’s a super inspiring episode.
0:15:09 And one of my favorite clips is where Dustin talks
0:15:11 about getting laid off from his government job,
0:15:13 his supposedly safe government job
0:15:16 and the identity shift that happened after that.
0:15:18 – I bought maybe two or three properties
0:15:19 and I was really enjoying it.
0:15:21 But at the same time, I was working a great job.
0:15:24 I was working for the county government.
0:15:25 And then I’m working from Monday to Friday,
0:15:28 just one week back after my fourth child was born
0:15:32 on Friday at 3.30 in the afternoon,
0:15:35 I get a call from my boss’s boss’s secretary,
0:15:37 like the top dog, his secretary gave me a call and said,
0:15:41 “Hey, Dustin, the boss needs to see you come to the office.”
0:15:42 I said, “Okay.”
0:15:44 And hung up the phone and I sat there for a second like,
0:15:46 “What is, why are they calling me?”
0:15:48 And then as I’m sitting there,
0:15:51 I start to think what could be calling about
0:15:54 and oh my goodness, back before I left,
0:15:56 I heard some rumors or some rumbling
0:15:59 throughout the entire office about possible layoffs
0:16:01 ’cause there wasn’t much money.
0:16:03 And this was like 2009,
0:16:04 you know, right after the crash,
0:16:05 it eventually trickled down to the government.
0:16:06 I’m me working for the government.
0:16:07 I’m like, I should be fine.
0:16:08 I have plenty of seniority.
0:16:09 I’m doing really well.
0:16:11 They’ve always gotten raises.
0:16:14 And so I get up and I start walking down the hallway
0:16:15 to the boss’s office.
0:16:17 It feels like it’s a mile long
0:16:18 because I’m just thinking,
0:16:21 “What am I gonna do if I get laid off?”
0:16:24 And as I’m walking, my feet feel like lead bricks.
0:16:27 Like I just, it’s hard to take that next step.
0:16:29 And each time my heart started pumping a little more
0:16:31 because I started realizing,
0:16:33 “My goodness, I have four kids.
0:16:34 How am I gonna feed them?
0:16:36 How am I gonna put a roof over my head?”
0:16:40 And I get to where my boss’s office is, his door is closed.
0:16:42 I turn the corner and I see the secretary.
0:16:45 Sheepishly, she looks at me and kind of grins
0:16:47 and says, “Dustin, would you please have a seat?”
0:16:51 She knows exactly what’s gonna happen, what is happening.
0:16:51 I don’t.
0:16:53 And she’s trying to console me
0:16:54 just by her eyes and her smile.
0:16:55 She can’t tell me.
0:16:56 So I sit down.
0:16:57 And as I’m sitting there,
0:17:00 I’m feeling like a pit in my stomach thinking,
0:17:01 “Oh my goodness, this is probably it.”
0:17:03 And I started realizing or thinking,
0:17:06 “Am I a failure as a husband?
0:17:08 Am I a failure as a father?
0:17:10 Even as a man, am I a failure?”
0:17:11 And as I think more and more,
0:17:13 it’s literally like 30 seconds or a minute.
0:17:14 It’s just sitting there.
0:17:16 I start to sweat on my forehead.
0:17:18 My hands get all clammy
0:17:20 and then opens the door to my boss’s office.
0:17:23 And now walks a lady with a piece of paper.
0:17:25 She’s noticeably distraught, almost crying,
0:17:27 but she’s not really not saying anything,
0:17:28 holding this piece of paper and walking out
0:17:29 and then my boss says, “Dustin,
0:17:31 would you please come into my office?”
0:17:34 And so I get up and go in and lo and behold,
0:17:36 I get laid off.
0:17:37 And who gets laid off from the government?
0:17:38 Well, I did.
0:17:40 I absolutely get laid off from the government.
0:17:41 And so I take that piece of paper,
0:17:44 I go back to my office and I realize two things.
0:17:47 Well, number one, I realize that I need to provide
0:17:48 for my family.
0:17:51 And everything that I need to do from this point forward
0:17:53 is to be able to provide for my family,
0:17:54 my four kids, my wife.
0:17:58 And so I was blessed within maybe like a week later,
0:18:00 I was able to find another job in the county
0:18:01 because I had a good reputations.
0:18:03 So I got that, that was the number,
0:18:05 that my job was to find a job and I did that,
0:18:07 which is the first goal.
0:18:11 The second thing was I needed to never, ever
0:18:15 let this happen to me again outside forces,
0:18:18 causing me to not be able to provide for my family.
0:18:20 So what I decided to do was that point,
0:18:21 as I’m literally sitting in my desk
0:18:22 right after I got laid off,
0:18:26 the second thing I realized, I am now an investor.
0:18:27 Even though I had two or three properties,
0:18:29 I was just a side hustle.
0:18:31 I realized I am now an investor,
0:18:35 even though like 98% of my income comes from my side job,
0:18:37 it’s now my side job.
0:18:39 Even though when 98% of the money comes from it,
0:18:41 my value is in what I give myself.
0:18:43 And so what we usually say and what I would always say
0:18:45 if somebody says, “Hey, Dustin, what do you do?”
0:18:47 Basically, what do you put value in?
0:18:49 I would always say, I work for the county government,
0:18:51 doing IT work of the county government.
0:18:53 No longer did I ever say that after that.
0:18:56 I said, “I am an investor in real estate rental properties.”
0:19:00 So from there, I worked every single penny
0:19:01 into another property.
0:19:03 I was frugal.
0:19:04 We only took one vacation a year,
0:19:06 which was driving from California to Arizona
0:19:07 to see the in-laws for Christmas.
0:19:09 That was the only vacation we didn’t eat out.
0:19:14 And so in making that transition, this was my goal.
0:19:17 I said, “No longer am I ever gonna let this happen to me.”
0:19:19 And so I strove every single day,
0:19:21 every single week to get that next property
0:19:23 and that next property and the next property.
0:19:26 So to actually taking that leap, honestly,
0:19:27 it was a little hard to leave that W2,
0:19:31 a lot of hard to leave that stable W2 job once I had it.
0:19:34 But once I realized I am losing money here,
0:19:36 my value is so much more than this.
0:19:38 And I’ll be honest, now that I quit my job,
0:19:42 it was so amazing to see how much more money
0:19:43 I can make when I work for myself.
0:19:46 So for everybody listening, that’s my processes.
0:19:49 I had to change my value in myself.
0:19:51 No longer am I working for the government.
0:19:54 No, I’m an investor with a side job.
0:19:56 Same thing with you, you’re a side hustle.
0:19:57 Whatever your side hustle is,
0:19:58 if you wanna turn that into your job
0:20:00 and you wanna take that leap,
0:20:03 literally change your vision and your value of yourself.
0:20:05 And that’s what got me to where I am today.
0:20:07 – Yeah, this is like the identity habit.
0:20:09 This is a really powerful thing.
0:20:12 That subtle shift from I’m a worker first
0:20:13 to I’m an investor first.
0:20:15 So I appreciate you sharing that.
0:20:18 Again, that’s from episode 387.
0:20:20 Now, to be fair, for every Dustin,
0:20:22 for every evangelist for real estate,
0:20:25 there’s at least an equal number of burnt out landlords
0:20:28 who buy into the leverage and tax advantages
0:20:29 and cash flow of real estate
0:20:32 only to get chewed up and spit out along the way.
0:20:35 No businesses without risk and headaches in real estate
0:20:39 is one that often gets oversimplified and oversold.
0:20:40 It can definitely work.
0:20:42 It can be a great inflation hedge, great tax shelter,
0:20:45 but it is real world inventory
0:20:46 with humans involved.
0:20:49 It’s a model that I got really excited about in college,
0:20:51 even bought my first rental property,
0:20:54 but perhaps didn’t have the intestinal fortitude
0:20:56 to stick it out over the long run.
0:20:58 And that’s one reason that I have shied away
0:21:01 from direct investment in recent years,
0:21:04 instead relying on alternatives like Fundrise
0:21:06 where you can begin adding some real estate
0:21:08 to your portfolio for as little as $10.
0:21:13 I’m an affiliate of an investor in Fundrise since 2015.
0:21:15 Their model appealed to me as a way to benefit
0:21:18 from real estate in a way that’s diversified,
0:21:19 that’s totally hands-off.
0:21:22 It does not come with the leverage benefits,
0:21:23 at least directly, right?
0:21:25 You know, $10 in is $10 in,
0:21:28 but this is one that has appealed to me.
0:21:29 Again, real estate, it’s a long-term game.
0:21:31 So it might take eight to 10 years,
0:21:32 like in Dustin’s case,
0:21:34 to build up that portfolio to the point
0:21:36 where it is exceeding your expenses
0:21:37 and helping you escape the rat race.
0:21:39 A friend of mine put it this way,
0:21:42 like with traditional savings and investments
0:21:43 done right and done well
0:21:47 with a reasonably high personal profitability margin,
0:21:50 it might take 15, 20 years to reach your fire number,
0:21:52 which would still mean retiring
0:21:55 or achieving financial independence way earlier than most,
0:21:58 like in your early to mid ’40s, which is fantastic,
0:21:59 but with real estate,
0:22:02 it might take eight to 10 years of concerted effort
0:22:04 buying a house every year or two,
0:22:06 stacking leverage, stacking cash flow.
0:22:10 And with our third and final rat race escape option,
0:22:11 it might take three to five years.
0:22:13 And that’s entrepreneurship.
0:22:15 The third way to get out of the rat race
0:22:17 is to build your own business.
0:22:19 If you look at the Forbes 400 list
0:22:21 of the richest people in the country,
0:22:23 one thing should stand out to you.
0:22:26 Most of them built their wealth through entrepreneurship.
0:22:29 And even if you have no aspirations to build
0:22:32 the next Amazon or Apple or Tesla or Facebook,
0:22:35 like I don’t have those aspirations either,
0:22:38 but building a business is a realistic way
0:22:40 to break out of the nine to five grind.
0:22:43 That’s how I was able to walk away from corporate America
0:22:45 years before starting Side Hustle Nation.
0:22:48 Entrepreneurship has helped probably thousands of friends,
0:22:50 Side Hustle Show listeners,
0:22:54 Side Hustle Nation readers do the same at this point.
0:22:58 So how entrepreneurship works to escape the rat race
0:23:00 is pretty simple.
0:23:01 We tend to overcomplicate it,
0:23:02 but I’m gonna try and break it down here.
0:23:05 So a business is simply a system
0:23:07 that solves a problem in exchange for money.
0:23:10 It’s a problem solving machine.
0:23:13 And the good news is we’re all natural born problem solvers.
0:23:15 It’s what we do all day every day.
0:23:18 That means to come up with a business idea,
0:23:20 what you really need to come up with is a problem.
0:23:22 So you can think of what frustrates you,
0:23:25 what headaches or challenges that you’ve overcome,
0:23:27 what other people complain to you about,
0:23:29 because on the other side of those problems,
0:23:31 there might be a business idea.
0:23:34 Now the solution is usually gonna take one of three forms.
0:23:37 First, a service that makes that problem go away
0:23:39 in the example of a dirty house.
0:23:41 You can hire a cleaning service.
0:23:44 Number two, a product that makes that problem go away
0:23:45 if you got a dirty house.
0:23:48 So you can go buy cleaning supplies and cleaning products.
0:23:50 And number three is content
0:23:51 that makes that problem go away.
0:23:53 Got a dirty house so you can watch YouTube videos
0:23:56 on how to organize and optimize your space, right?
0:23:58 And when the money from your solution
0:23:59 starts to exceed your living expenses,
0:24:02 that’s when you say goodbye to the rat race.
0:24:05 I break down each of these three business models in detail
0:24:06 with lots of examples in my book,
0:24:08 The Side Hustle, how to turn your spare time
0:24:10 into $1,000 a month or more.
0:24:11 It’s free on Kindle.
0:24:12 I’ll link it up in the show notes.
0:24:14 It is due for a refresh or an update,
0:24:16 which is on my to-do list for the year.
0:24:18 And you’ll also find lots of side hustle ideas
0:24:20 throughout the archives for this show.
0:24:23 I did an episode earlier this month
0:24:26 on seven different idea generating frameworks.
0:24:27 If you might find that helpful
0:24:29 if you’re in the idea seeking phase,
0:24:32 that is episode 650 in your archives.
0:24:34 So what’s so great about entrepreneurship?
0:24:37 Building a business is unique of these three paths
0:24:40 in that your primary investment
0:24:41 is probably gonna be sweat equity.
0:24:43 These days, you can get an enterprise off the ground
0:24:45 for a very low startup cost.
0:24:49 And thinking back to my own 15, 20 years here,
0:24:52 just about everything I’ve started costs less than 500 bucks,
0:24:56 at least for that initial validation and testing phase.
0:24:59 On top of that, starting a business is a way to work
0:25:00 on something that you care about.
0:25:03 It’s bringing an idea into the world
0:25:05 that’s exciting and rewarding
0:25:10 in a way that collecting stock dividend payments just isn’t.
0:25:13 And in contrast to the stock market or real estate market,
0:25:15 you’ve got considerably more control
0:25:18 over the succession failure of a business that you own
0:25:20 and the speed at which that can happen.
0:25:23 Plus, if you intentionally build something with scale,
0:25:26 you’ll find entrepreneurship to be pretty time leveraged.
0:25:28 By that, I mean your earning power
0:25:31 or your effective hourly rate improves
0:25:32 as the business grows.
0:25:35 For example, Becky Beach put a lot of time,
0:25:37 six years into her online business
0:25:39 before getting up the nerve to quit her day job,
0:25:42 but she built it intentionally with that leverage in mind.
0:25:45 – I started getting 250,000 pages a month
0:25:47 and lots of traffic to my printables
0:25:49 and my sales phones were doing so well
0:25:52 I was getting like up like 20,000 at the time.
0:25:55 So I decided to quit my job and that was two years ago.
0:25:57 Like it was hard at first because like I was living in fear,
0:25:59 I didn’t think I could do it.
0:26:01 You know, I thought my business would just end the next day
0:26:03 or something if I quit.
0:26:05 But I just went all in and told my boss,
0:26:06 hey, I’m gonna be doing my own thing right now
0:26:07 and I need to like be quit.
0:26:09 And at first he was like, oh, don’t quit.
0:26:09 You know, it’s not a good idea.
0:26:11 I don’t think that’s smart.
0:26:13 So then I just went ahead and did it anyway.
0:26:16 – And I haven’t looked back since.
0:26:18 So that’s very exciting and it really cool
0:26:20 to build something up to that point.
0:26:23 We’re able to have that opportunity,
0:26:24 to have that flexibility and say,
0:26:27 look, I’ve got this other thing that’s working.
0:26:28 I don’t need this job.
0:26:30 My role was five bad meetings or something,
0:26:32 five bad days at work until I’m out of here,
0:26:33 something like that.
0:26:35 So I think that makes a ton of sense.
0:26:39 So mombeach.com kind of plays in the mom blog space,
0:26:40 the personal finance space,
0:26:43 and talk to me about what’s ringing the cash register
0:26:46 in terms of the digital products you mentioned,
0:26:48 the printables, what’s going on over there
0:26:50 in terms of how the site is earning revenue.
0:26:53 – The first I was relying on ad income and affiliates alone.
0:26:56 But when I started also making digital products,
0:26:59 it just exploded and since making them with AI,
0:27:00 it’s even went further
0:27:02 ’cause I’m able to crank out even more.
0:27:04 The digital products are just doing so well.
0:27:06 Like people will just visit my blog out of the blue,
0:27:07 like I don’t even know them really.
0:27:08 They just come in, they’re just like,
0:27:10 they’re just internet randos.
0:27:12 They come and purchase and I have all these sales funnels
0:27:14 set up like freebie opt-ins
0:27:15 where they sign up with their email.
0:27:17 They’re redirected to a sales page
0:27:19 that leads to my Shopify store.
0:27:20 – Okay, that’s interesting.
0:27:22 I have always thought of Shopify
0:27:24 as a physical product, e-commerce platform,
0:27:27 but you can use it for digital products as well.
0:27:30 So that’s the visitor flow through SEO,
0:27:32 through Pinterest, they come to your site,
0:27:34 download some freebie and then the digital products
0:27:38 are largely like an email-based upsell after the fact.
0:27:40 – They are ’cause I get quite a lot of traffic
0:27:42 and they come in, they sign up to my freebies
0:27:44 and the freebies are like free printables.
0:27:45 Like I have a budgeting planner
0:27:47 and I got a home planner for people
0:27:50 to organize their homes like specifically moms.
0:27:52 And I just get like so many leads
0:27:54 like every single day from these freebies.
0:27:56 And then they’re directed to a sales page
0:27:59 ’cause in ConvertKit you can actually make them
0:28:01 go to a sales page after they sign up to the email.
0:28:03 And I just put the sales page there
0:28:05 and then they buy a product off my Shopify store
0:28:07 ’cause you can actually put your cart
0:28:09 in your Shopify store right on the sales page
0:28:11 so they can click a link and get to the cart.
0:28:12 – Okay, okay.
0:28:14 So give me an example of like,
0:28:17 let’s talk about this budgeting planner, for example.
0:28:18 Talk to me about top of the funnels.
0:28:20 How does somebody discover that?
0:28:23 Is this like ranking in Google for those types of terms?
0:28:25 – Yes, I make user-specific content
0:28:27 people are searching for that solves problems.
0:28:31 Say like a saving money post or a money-making post
0:28:33 and people are searching for these problems on Google
0:28:36 and I use long-tail keywords.
0:28:38 And then I create the piece of content.
0:28:40 I’ve also been utilizing chat GPT lately
0:28:41 to help me create content.
0:28:44 Like I’ll use it to make like a blog outline.
0:28:47 It makes it so much faster to create content now.
0:28:49 – So I’m trying to find an example of one of those posts
0:28:50 but how to save money.
0:28:53 And here’s a list of ideas on how to solve this problem.
0:28:55 And by the way, if you’re trying to save money
0:28:57 you probably need this budgeting planner.
0:28:58 Here’s my free template.
0:29:01 And then after somebody puts in their email for that,
0:29:04 boom, sales page for something more advanced
0:29:06 or what’s on the sales page or what’s the digital product?
0:29:08 – Well, for instance, one of my posts that are new
0:29:11 are 30-day money-saving challenge.
0:29:13 And then that post have the budgeting planner
0:29:15 and then when they subscribe to the planner
0:29:16 they get it sent to their email
0:29:20 and they’re also directed to a budgeting spreadsheet.
0:29:21 – The spreadsheet is for purchase.
0:29:23 – Yes, like I’ll have the spreadsheet for purchase.
0:29:26 I also sell spreadsheets in my Shopify store as well.
0:29:28 – You can learn more about Becky and her business
0:29:30 in episode 582.
0:29:33 But the idea is creating something once
0:29:34 that you can sell over and over again.
0:29:36 That’s the leverage that’s built
0:29:39 into a digital product business, a content business.
0:29:41 And of course there are other business models too
0:29:43 but with each of them I think it’s important
0:29:46 to think about how it might go one to many.
0:29:50 How you might be able to leverage your specific skills
0:29:51 and expertise to build systems
0:29:53 and serve lots of different customers.
0:29:55 One book I might recommend on this topic
0:29:58 is MJ DeMarco’s Millionaire Fastlane.
0:30:01 If you can get past all this talk about fancy cars
0:30:03 which didn’t really appeal to me at all,
0:30:05 the underlying foundations and ideas in the book
0:30:07 I think are really strong.
0:30:09 That’s Millionaire Fastlane.
0:30:10 With job security in question
0:30:15 and this shift towards a more on-demand freelance workforce
0:30:17 it’s hard for me to see the downsides
0:30:19 in learning an entrepreneurial skill set
0:30:22 but still the fact remains that half of small businesses
0:30:24 fail in the first five years.
0:30:26 For that reason, it’s important to start small,
0:30:28 to minimize your expenses
0:30:31 and to grow at a pace you’re comfortable with.
0:30:34 And if that failure happens to you, if you’re in that 50%
0:30:37 you can dust yourself off and start again.
0:30:40 Building a business can be labor intensive
0:30:42 and that’s why many entrepreneurs find themselves
0:30:44 in the trap of working in the business
0:30:45 rather than on it.
0:30:48 They feel like, well, I just built myself a job
0:30:51 and only this one has an even more demanding boss
0:30:53 that’s even harder to walk away from.
0:30:55 So that’s the question that you have to ask,
0:30:56 what if this works?
0:30:58 If the business I’m starting works,
0:31:00 well, what does success look like?
0:31:03 And maybe you can find somebody who’s walked that path
0:31:05 there three to five years ahead of you.
0:31:07 Well, what does their day-to-day look like?
0:31:08 Do they have the income that they desire?
0:31:11 Do they have some freedom and flexibility in their life?
0:31:14 Or are they still stuck working 60 hour weeks
0:31:16 or they’re super stressed all the time?
0:31:17 What’s the end game?
0:31:18 And is that gonna be a win from you?
0:31:20 If you build with intention from the start,
0:31:22 I think it’s easier over the long run.
0:31:25 Certain models are faster and easier
0:31:26 to see initial results with,
0:31:29 but can be harder to scale and remove yourself
0:31:31 from delivery over time.
0:31:34 I think freelancing is probably the prime example of this,
0:31:35 freelancing your skills.
0:31:37 Totally viable, side hustle,
0:31:40 one that I recommend all the time, but it can be tough.
0:31:43 Not impossible, but hard to get out of trading time for money
0:31:47 if clients are used to hiring your special skills
0:31:48 and expertise.
0:31:50 Again, hard to get out of, but not impossible
0:31:52 if that’s an ultimate goal of yours.
0:31:54 Some people just love doing the work and that’s totally fine.
0:31:56 So who is this third path best for?
0:31:59 Who is the entrepreneurship path best for?
0:32:02 I believe it is the most realistic rat race escape path
0:32:05 for most people, but especially for those
0:32:08 who don’t have the quote unquote golden handcuffs
0:32:11 of a great paying job that’s harder to walk away from
0:32:14 and might be more apt to take path number one,
0:32:17 the traditional saving and investment path.
0:32:18 People who aren’t afraid of failure,
0:32:19 you’re probably gonna get punched in the face
0:32:21 along the way in this entrepreneurship path
0:32:26 and or a little impatient, definitely the fastest path
0:32:28 if it works.
0:32:30 And so it’s like, well, that’s where it combines this.
0:32:33 Well, I’m not afraid of failure and I’m impatient.
0:32:34 I don’t wanna wait 20 years
0:32:37 to do this traditional savings path.
0:32:38 So entrepreneurship appealed to me
0:32:40 ’cause I couldn’t fathom the reality
0:32:43 of working a corporate job for the next 30 years.
0:32:45 There had to be a better way.
0:32:48 And there was and I think there is for you too.
0:32:51 And of course, if the entrepreneurship path is for you,
0:32:53 there are hundreds of side hustle show episodes
0:32:54 to choose from.
0:32:55 You can pretty much scroll through
0:32:58 and pick the ones that sound most interesting to you.
0:33:00 They’re all great.
0:33:02 I learned so much from each and every guest.
0:33:03 If there’s a specific topic
0:33:05 that you’d like me to cover in the future,
0:33:07 be sure to reach out and let me know.
0:33:10 Nick at sidehustlenation.com is my direct email.
0:33:12 And if you’re not sure where to start,
0:33:14 I encourage you to hit up hustle.show.
0:33:16 This is where you can answer a few short,
0:33:17 multiple choice questions.
0:33:18 You can do it on your phone
0:33:21 and the system will build you a personalized playlist
0:33:23 based on where you’re at, what you’re interested in,
0:33:24 where you wanna go.
0:33:25 Again, hustle.show
0:33:29 for your custom curated side hustle show playlist.
0:33:30 Big thanks to our sponsors
0:33:32 for helping make this content free for everyone.
0:33:35 As always, you can hit up sidehustlenation.com/deals
0:33:38 for all the latest offers from our sponsors in one place.
0:33:40 Thank you for supporting the advertisers
0:33:41 that support the show.
0:33:43 That is it for me.
0:33:45 Thank you so much for tuning in.
0:33:46 If you’re finding value in the show,
0:33:48 the greatest compliment is to share with a friend,
0:33:51 to fire off that text message with your fellow friend
0:33:52 who wants to get out of the rat race
0:33:53 and help spread the word.
0:33:55 Until next time, let’s go out there
0:33:56 and make something happen
0:33:58 and I’ll catch you in the next edition
0:33:59 of the Side Hustle Show.
0:00:05 Now getting out of the rat race is simple,
0:00:07 but not necessarily easy to escape.
0:00:10 All you need is monthly income from a source
0:00:13 other than your job that exceeds your monthly expenses, right?
0:00:15 Simple, but not always easy.
0:00:16 I’m Nick Loper.
0:00:17 You’re listening to The Side Hustle Show
0:00:19 where we’ve been making day jobs optional.
0:00:21 Since 2013 in this episode,
0:00:22 I’m breaking down those three most common
0:00:24 rat race escape routes,
0:00:26 including the one at the end that got me out,
0:00:27 the pros and cons of each
0:00:30 and how to choose the right path for you.
0:00:33 So remember that freedom equation is non-job income
0:00:36 that is exceeding your monthly expenses.
0:00:38 The three most common ways to generate that income
0:00:40 are traditional investments,
0:00:41 real estate and entrepreneurship.
0:00:45 These are in contrast to and probably more realistic
0:00:48 than the other paths that some people bank on
0:00:50 like an unexpected inheritance,
0:00:53 a lonely Nigerian prince or winning the lottery.
0:00:56 But what’s maybe even more surprising is most people
0:00:59 don’t really seem to have much of a plan at all.
0:01:01 They’re just going through life day to day
0:01:05 with the assumption and hope that someday they’ll retire,
0:01:07 but it doesn’t really work that way.
0:01:09 And if you’re not steering your own ship,
0:01:12 I’m not sure you’re gonna ever get to where you wanna go.
0:01:14 The first step in escaping the rat race
0:01:17 is to figure out your actual monthly expenses.
0:01:19 What is your lifestyle cost?
0:01:22 This isn’t gonna be a lecture on extreme frugality,
0:01:24 but at the very least spending with intention
0:01:27 has gotta be a part of your rat race escape math.
0:01:30 I mean, why set the bar unnecessarily high?
0:01:33 And if you’ve never calculated how much you actually spend
0:01:35 on a monthly basis, it’s worth taking a minute
0:01:37 to figure that out.
0:01:40 This was an exercise that my wife and I did last year.
0:01:42 We kind of had this offsite retreat.
0:01:45 We went through Monarch money and we were like,
0:01:48 well, in our mind, we had a typical monthly budget,
0:01:49 kind of like bare bones.
0:01:51 Well, we know how much the mortgage is,
0:01:53 we know how much we roughly spend on utilities
0:01:55 and groceries, but why is the credit card bill
0:01:56 always so much higher?
0:01:58 And it’s like, well, we bought plane tickets
0:02:01 or we had this repair charge.
0:02:03 It was always higher than what it was.
0:02:06 So we looked at, well, how much do we actually spend
0:02:07 on a monthly basis?
0:02:09 And the number is gonna be different for everybody.
0:02:12 It might be $3,000, it might be $10,000.
0:02:15 But how much does your lifestyle cost?
0:02:17 That’s the income that you need to generate.
0:02:20 That’s your rat race freedom number.
0:02:21 So how do real people achieve it?
0:02:24 The first way is to save your way out
0:02:26 with traditional investments.
0:02:29 This is probably the most commonly prescribed path
0:02:32 to retirement, whether early or not.
0:02:36 And this is stocks, bonds, mutual funds, ETFs,
0:02:38 stuff like that, paper assets.
0:02:42 And this is how retirement has worked for generations, right?
0:02:45 Amass a big enough nest egg during your working years
0:02:49 and then slowly draw down those savings
0:02:50 after you stop working.
0:02:52 And the problem is, if you’re listening to this,
0:02:53 you probably don’t wanna wait decades
0:02:55 until you’ve saved enough.
0:02:56 Now, the fire movement,
0:02:59 the financial independence, retire early movement
0:03:00 has an alternative for you
0:03:03 and argues that retirement isn’t an age.
0:03:05 You don’t have to wait till you’re 65.
0:03:06 It’s a number.
0:03:10 It is 25 times your annual expenses in savings.
0:03:12 This is from the Trinity study.
0:03:13 I think it was like late ’90s.
0:03:16 They did back testing on a bunch of 30-year scenarios
0:03:19 in the market and said 95 times out of 100.
0:03:22 If you’re starting nest egg is 25 times your expenses,
0:03:23 you’re unlikely to run out of money,
0:03:24 at least 95% of the time.
0:03:26 And this is not set in stone.
0:03:28 Like if the market has a series of bad years,
0:03:30 you could adjust your expenses downwards
0:03:32 to hopefully make it last a little bit longer.
0:03:34 So what does that look like in real numbers?
0:03:37 If you’re spending $40,000 a year,
0:03:40 you could theoretically leave the rat race behind
0:03:43 once you got a million dollars in traditional investments.
0:03:46 You live off dividends and share price appreciation
0:03:47 for decades under that scenario.
0:03:49 If you spend $100,000 a year,
0:03:50 you need two and a half million.
0:03:52 Now, there are a few advantages
0:03:54 to this kind of traditional investment,
0:03:56 this traditional path to retirement.
0:03:58 One is that these so-called paper assets
0:04:00 are accessible to just about everyone.
0:04:02 You can even invest right from your phone
0:04:04 with any number of different brokerage apps,
0:04:07 stocks, bonds, mutual funds, ETFs.
0:04:08 They’re highly liquid,
0:04:11 meaning you can buy and sell them quickly if you need to.
0:04:15 And over the long run, they’ve performed historically well.
0:04:19 Like projecting seven to 9% annualized returns
0:04:21 would be realistic there.
0:04:24 Their biggest drawback is trying to get out of the rat race
0:04:27 with traditional investing either takes a lot of time
0:04:31 to let compounding do its thing or a lot of money.
0:04:33 Now, despite enthusiasm from the fire community,
0:04:35 which I would consider myself a part of,
0:04:39 I like that they put a milestone, an end game,
0:04:41 a goalpost, something to reach,
0:04:42 something that’s hopefully attainable
0:04:46 and doesn’t have to be related to your age more or less.
0:04:49 But the truth is, unless you have a really wide margin,
0:04:52 a lot of profitability in your personal finances,
0:04:54 that’s the gap between what you earn and what you spend.
0:04:58 There’s really no shortcut to building up that nest egg.
0:05:00 Plus, if you have unexpected expenses
0:05:02 that pop up during retirement,
0:05:05 your assumptions around withdrawal rates
0:05:06 can probably go out the window.
0:05:08 For the traditional investing path,
0:05:10 if you go way back in the archives,
0:05:12 you’ll find episode 105.
0:05:15 This is probably from like year two or three of the show.
0:05:18 This is with Jeremy Jacobsen from Go Curry Cracker,
0:05:20 who retired in his late 30s,
0:05:24 thanks to this high level of personal profitability
0:05:25 that we’re talking about.
0:05:29 – We were roughly saving 70-ish percent of income
0:05:30 for quite a while.
0:05:33 And then I probably worked three years too long
0:05:36 and was saving nearly 100% of income at that point.
0:05:39 If you’re just living off the dividends and interest,
0:05:41 if you’re saving that percentage of income,
0:05:43 it really only takes about 10-ish years
0:05:46 in order to build up enough net worth
0:05:47 to fund your lifestyle forever.
0:05:50 – What kept you working those extra three years?
0:05:53 Was it just the, like, can we really do this?
0:05:55 – There’s a little bit of that.
0:05:56 You know, maybe I’d call it fear.
0:05:58 Nobody does this.
0:06:00 Can we, yeah.
0:06:02 Like, I’ve read stuff, but thinking you can do it
0:06:05 and actually doing it are two very different things.
0:06:09 – That mindset shift from saving and investing
0:06:12 and accumulation to all of a sudden drawing down,
0:06:14 intentionally bringing your earned income to zero,
0:06:16 that’s a complete 180.
0:06:19 And even if the math and the models
0:06:21 and the projections say you’re gonna be fine,
0:06:24 I think it’s a lot harder to pull the trigger in reality
0:06:26 and just toss your career aside.
0:06:27 So one thing that we’re trying to do
0:06:28 that we’ve seen some other friends do
0:06:33 is as that nest egg grows, scale back some working hours.
0:06:35 Maybe you don’t jump off the cliff.
0:06:37 Maybe you kind of start repelling down, you know,
0:06:39 one level at a time.
0:06:41 Maybe that means negotiating a working part time
0:06:45 or only four days a week or transitioning to a role
0:06:48 that is less demanding and requires much overtime.
0:06:52 It’s reducing your income by baby steps
0:06:54 rather than going cold turkey all at once.
0:06:59 So who is this traditional investing route best for?
0:07:02 I think this is the best way to escape the rat race
0:07:07 for high earners who live a relatively inexpensive lifestyle.
0:07:10 If you or you and your significant other
0:07:13 bring in say $300,000 a year,
0:07:16 but you only spend 50, this is a great option.
0:07:18 Now, if you ignore taxes for a second,
0:07:20 because that always throws a wrench in any time
0:07:23 on the air math, but you can see how it would only take
0:07:27 five years if I’m saving, if I’m profiting $250,000 a year
0:07:29 as a household, it would only take five years
0:07:32 to accumulate that one and a quarter million
0:07:35 that I would need to support that $50,000 a year
0:07:37 lifestyle in retirement.
0:07:40 So that means if your work is tolerable,
0:07:41 I think those five years are gonna fly by
0:07:45 and that assumes you’re starting at $0 in savings today.
0:07:48 Now, on the other hand, if you make $50,000 a year
0:07:50 and you spend 49 of it,
0:07:52 traditional investing is never gonna get you
0:07:53 out of the rat race.
0:07:56 There’s simply not enough savings margin there,
0:07:57 which brings us to option number two,
0:08:00 which is to beat the rat race with real estate
0:08:02 and that’s coming up right after this.
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0:10:28 The second common rat race escape path is real estate.
0:10:29 And for the sake of this episode,
0:10:32 I’m gonna focus on rental property investing.
0:10:34 Real estate comes in so many different flavors
0:10:36 and strategies, many of which we’ve covered
0:10:38 on the SideHustle show before,
0:10:41 but we’re focusing on rental property investing in this one.
0:10:44 So how real estate works to escape the rat race,
0:10:46 it’s pretty easy to understand business model, right?
0:10:48 You buy a house, you rent it out,
0:10:50 and you pocket the difference between that rent
0:10:51 and your monthly expenses.
0:10:55 Your mortgage, your insurance, your maintenance costs, right?
0:10:56 And lather, rinse and repeat
0:10:59 until you got enough monthly cash flow to quit your job.
0:11:00 This is what Dustin Heiner did,
0:11:04 who for him, it was around 26 different properties
0:11:07 and around $15,000 a month in reliable cash flow.
0:11:11 He retired at age 37 and supports his family
0:11:14 off the income from that rental property empire.
0:11:17 So his big thing is invest with that monthly cash flow
0:11:21 in mind and then use it to start slowly chipping away
0:11:23 at your own living expenses.
0:11:26 Again, another argument for keeping those expenses low
0:11:27 ’cause the lower they are,
0:11:30 the less properties, the less cash flow
0:11:31 that you’re gonna need.
0:11:33 Now rental property investing can accelerate your climb
0:11:36 to financial independence in several important ways.
0:11:39 First, you can take advantage of leverage.
0:11:41 That’s borrowing money in contrast
0:11:44 to traditional stock market investing
0:11:45 that we talked about a minute ago
0:11:49 where $20,000 buys you $20,000 worth of index funds.
0:11:52 That same $20,000 could be used as a down payment
0:11:55 to buy $100,000 or more worth of real estate.
0:11:57 Then you can pay down that loan balance
0:11:59 with the rental income that you receive
0:12:01 over the next 30 years.
0:12:03 The next big advantage of real estate
0:12:04 is appreciation.
0:12:06 As you know, houses tend to cost more today
0:12:08 than they did a generation ago.
0:12:10 By buying those properties,
0:12:12 you can capture this appreciation when you sell
0:12:15 or you can borrow against that equity
0:12:18 in your houses to fund future acquisitions.
0:12:19 This is another thing that Dustin talks about,
0:12:22 kind of like recycling that initial down payment money
0:12:25 as equity as future down payments.
0:12:27 And third, being a landlord comes
0:12:30 with a bunch of different tax advantages, tax benefits
0:12:33 including the ability to write off your mortgage interest
0:12:36 and even take depreciation on the buildings that you own.
0:12:40 Finally, real estate can be a pretty passive income stream
0:12:42 once you have your tenants and other relative
0:12:44 or other relevant team members in place.
0:12:46 Yes, there’s an up front time investment
0:12:49 but no trading hours for dollars down the road.
0:12:51 So what disadvantages should you be aware of?
0:12:54 Well, home prices don’t fluctuate as wildly
0:12:58 as the stock market but investing in physical assets,
0:13:00 it does take more legwork and it also means
0:13:02 that your cash isn’t as liquid.
0:13:04 And by that I mean you can’t just push a button
0:13:07 on your phone and sell a house when you need cash
0:13:09 like you could do with an index fund.
0:13:11 And although there are some creative ways
0:13:14 to buy houses with no money down,
0:13:16 like we talked about in our creative financing episode
0:13:18 with Austin Miller, really fun episode,
0:13:23 real estate is usually a takes money to make money option.
0:13:25 And as a landlord, you’re also gonna face vacancies
0:13:27 if the house sits empty,
0:13:28 that erases any positive cash flow
0:13:31 you were banking on that month, repairs and maintenance,
0:13:34 roofs, windows, toilets, water heaters,
0:13:35 nothing lasts forever, it all costs money.
0:13:38 And if you’re the owner, it comes on you.
0:13:41 There are unexpected expenses like our friends in California
0:13:45 had to redo their foundation to the tune of like $90,000.
0:13:47 There might be tenant issues that come up
0:13:50 and why some humans think it’s acceptable
0:13:51 to trash other humans property,
0:13:53 other people’s houses is beyond me.
0:13:56 But you might be lying if I said it didn’t happen.
0:13:59 On top of that, your local real estate market
0:14:00 might not be a great place to invest.
0:14:03 So you might be dealing with all of this remotely
0:14:05 or through a third party management service.
0:14:07 So who’s real estate investing best for?
0:14:10 The people I see having the best success with real estate
0:14:12 are those who take a long-term view
0:14:15 and are committed to operating multiple properties.
0:14:17 I don’t think one house is gonna get you there.
0:14:19 Now, especially if you can buy multiple properties
0:14:22 in one location, there are some economies of scale
0:14:25 that might make life easier than having only one house
0:14:28 or having houses in different cities across the country.
0:14:29 The reason for that is that way
0:14:32 you can have one property management company
0:14:34 or one general contractor person
0:14:36 that you have as your go-to in that space
0:14:39 versus having spread out in different cities
0:14:40 all over the place.
0:14:41 Now, as your empire grows,
0:14:44 you’re also better able to absorb a vacancy here or there
0:14:47 or an unexpected expense for a property or two
0:14:48 in any given month.
0:14:50 But just like traditional investing,
0:14:53 real estate can and does work to escape the rat race
0:14:56 if you have the capital, the patience and the fortitude
0:14:57 to stay the course.
0:15:00 If the idea of accumulating a portfolio
0:15:02 of cash flowing real estate appeals to you,
0:15:05 check out episode 387 with Dustin Heiner.
0:15:07 It’s a super inspiring episode.
0:15:09 And one of my favorite clips is where Dustin talks
0:15:11 about getting laid off from his government job,
0:15:13 his supposedly safe government job
0:15:16 and the identity shift that happened after that.
0:15:18 – I bought maybe two or three properties
0:15:19 and I was really enjoying it.
0:15:21 But at the same time, I was working a great job.
0:15:24 I was working for the county government.
0:15:25 And then I’m working from Monday to Friday,
0:15:28 just one week back after my fourth child was born
0:15:32 on Friday at 3.30 in the afternoon,
0:15:35 I get a call from my boss’s boss’s secretary,
0:15:37 like the top dog, his secretary gave me a call and said,
0:15:41 “Hey, Dustin, the boss needs to see you come to the office.”
0:15:42 I said, “Okay.”
0:15:44 And hung up the phone and I sat there for a second like,
0:15:46 “What is, why are they calling me?”
0:15:48 And then as I’m sitting there,
0:15:51 I start to think what could be calling about
0:15:54 and oh my goodness, back before I left,
0:15:56 I heard some rumors or some rumbling
0:15:59 throughout the entire office about possible layoffs
0:16:01 ’cause there wasn’t much money.
0:16:03 And this was like 2009,
0:16:04 you know, right after the crash,
0:16:05 it eventually trickled down to the government.
0:16:06 I’m me working for the government.
0:16:07 I’m like, I should be fine.
0:16:08 I have plenty of seniority.
0:16:09 I’m doing really well.
0:16:11 They’ve always gotten raises.
0:16:14 And so I get up and I start walking down the hallway
0:16:15 to the boss’s office.
0:16:17 It feels like it’s a mile long
0:16:18 because I’m just thinking,
0:16:21 “What am I gonna do if I get laid off?”
0:16:24 And as I’m walking, my feet feel like lead bricks.
0:16:27 Like I just, it’s hard to take that next step.
0:16:29 And each time my heart started pumping a little more
0:16:31 because I started realizing,
0:16:33 “My goodness, I have four kids.
0:16:34 How am I gonna feed them?
0:16:36 How am I gonna put a roof over my head?”
0:16:40 And I get to where my boss’s office is, his door is closed.
0:16:42 I turn the corner and I see the secretary.
0:16:45 Sheepishly, she looks at me and kind of grins
0:16:47 and says, “Dustin, would you please have a seat?”
0:16:51 She knows exactly what’s gonna happen, what is happening.
0:16:51 I don’t.
0:16:53 And she’s trying to console me
0:16:54 just by her eyes and her smile.
0:16:55 She can’t tell me.
0:16:56 So I sit down.
0:16:57 And as I’m sitting there,
0:17:00 I’m feeling like a pit in my stomach thinking,
0:17:01 “Oh my goodness, this is probably it.”
0:17:03 And I started realizing or thinking,
0:17:06 “Am I a failure as a husband?
0:17:08 Am I a failure as a father?
0:17:10 Even as a man, am I a failure?”
0:17:11 And as I think more and more,
0:17:13 it’s literally like 30 seconds or a minute.
0:17:14 It’s just sitting there.
0:17:16 I start to sweat on my forehead.
0:17:18 My hands get all clammy
0:17:20 and then opens the door to my boss’s office.
0:17:23 And now walks a lady with a piece of paper.
0:17:25 She’s noticeably distraught, almost crying,
0:17:27 but she’s not really not saying anything,
0:17:28 holding this piece of paper and walking out
0:17:29 and then my boss says, “Dustin,
0:17:31 would you please come into my office?”
0:17:34 And so I get up and go in and lo and behold,
0:17:36 I get laid off.
0:17:37 And who gets laid off from the government?
0:17:38 Well, I did.
0:17:40 I absolutely get laid off from the government.
0:17:41 And so I take that piece of paper,
0:17:44 I go back to my office and I realize two things.
0:17:47 Well, number one, I realize that I need to provide
0:17:48 for my family.
0:17:51 And everything that I need to do from this point forward
0:17:53 is to be able to provide for my family,
0:17:54 my four kids, my wife.
0:17:58 And so I was blessed within maybe like a week later,
0:18:00 I was able to find another job in the county
0:18:01 because I had a good reputations.
0:18:03 So I got that, that was the number,
0:18:05 that my job was to find a job and I did that,
0:18:07 which is the first goal.
0:18:11 The second thing was I needed to never, ever
0:18:15 let this happen to me again outside forces,
0:18:18 causing me to not be able to provide for my family.
0:18:20 So what I decided to do was that point,
0:18:21 as I’m literally sitting in my desk
0:18:22 right after I got laid off,
0:18:26 the second thing I realized, I am now an investor.
0:18:27 Even though I had two or three properties,
0:18:29 I was just a side hustle.
0:18:31 I realized I am now an investor,
0:18:35 even though like 98% of my income comes from my side job,
0:18:37 it’s now my side job.
0:18:39 Even though when 98% of the money comes from it,
0:18:41 my value is in what I give myself.
0:18:43 And so what we usually say and what I would always say
0:18:45 if somebody says, “Hey, Dustin, what do you do?”
0:18:47 Basically, what do you put value in?
0:18:49 I would always say, I work for the county government,
0:18:51 doing IT work of the county government.
0:18:53 No longer did I ever say that after that.
0:18:56 I said, “I am an investor in real estate rental properties.”
0:19:00 So from there, I worked every single penny
0:19:01 into another property.
0:19:03 I was frugal.
0:19:04 We only took one vacation a year,
0:19:06 which was driving from California to Arizona
0:19:07 to see the in-laws for Christmas.
0:19:09 That was the only vacation we didn’t eat out.
0:19:14 And so in making that transition, this was my goal.
0:19:17 I said, “No longer am I ever gonna let this happen to me.”
0:19:19 And so I strove every single day,
0:19:21 every single week to get that next property
0:19:23 and that next property and the next property.
0:19:26 So to actually taking that leap, honestly,
0:19:27 it was a little hard to leave that W2,
0:19:31 a lot of hard to leave that stable W2 job once I had it.
0:19:34 But once I realized I am losing money here,
0:19:36 my value is so much more than this.
0:19:38 And I’ll be honest, now that I quit my job,
0:19:42 it was so amazing to see how much more money
0:19:43 I can make when I work for myself.
0:19:46 So for everybody listening, that’s my processes.
0:19:49 I had to change my value in myself.
0:19:51 No longer am I working for the government.
0:19:54 No, I’m an investor with a side job.
0:19:56 Same thing with you, you’re a side hustle.
0:19:57 Whatever your side hustle is,
0:19:58 if you wanna turn that into your job
0:20:00 and you wanna take that leap,
0:20:03 literally change your vision and your value of yourself.
0:20:05 And that’s what got me to where I am today.
0:20:07 – Yeah, this is like the identity habit.
0:20:09 This is a really powerful thing.
0:20:12 That subtle shift from I’m a worker first
0:20:13 to I’m an investor first.
0:20:15 So I appreciate you sharing that.
0:20:18 Again, that’s from episode 387.
0:20:20 Now, to be fair, for every Dustin,
0:20:22 for every evangelist for real estate,
0:20:25 there’s at least an equal number of burnt out landlords
0:20:28 who buy into the leverage and tax advantages
0:20:29 and cash flow of real estate
0:20:32 only to get chewed up and spit out along the way.
0:20:35 No businesses without risk and headaches in real estate
0:20:39 is one that often gets oversimplified and oversold.
0:20:40 It can definitely work.
0:20:42 It can be a great inflation hedge, great tax shelter,
0:20:45 but it is real world inventory
0:20:46 with humans involved.
0:20:49 It’s a model that I got really excited about in college,
0:20:51 even bought my first rental property,
0:20:54 but perhaps didn’t have the intestinal fortitude
0:20:56 to stick it out over the long run.
0:20:58 And that’s one reason that I have shied away
0:21:01 from direct investment in recent years,
0:21:04 instead relying on alternatives like Fundrise
0:21:06 where you can begin adding some real estate
0:21:08 to your portfolio for as little as $10.
0:21:13 I’m an affiliate of an investor in Fundrise since 2015.
0:21:15 Their model appealed to me as a way to benefit
0:21:18 from real estate in a way that’s diversified,
0:21:19 that’s totally hands-off.
0:21:22 It does not come with the leverage benefits,
0:21:23 at least directly, right?
0:21:25 You know, $10 in is $10 in,
0:21:28 but this is one that has appealed to me.
0:21:29 Again, real estate, it’s a long-term game.
0:21:31 So it might take eight to 10 years,
0:21:32 like in Dustin’s case,
0:21:34 to build up that portfolio to the point
0:21:36 where it is exceeding your expenses
0:21:37 and helping you escape the rat race.
0:21:39 A friend of mine put it this way,
0:21:42 like with traditional savings and investments
0:21:43 done right and done well
0:21:47 with a reasonably high personal profitability margin,
0:21:50 it might take 15, 20 years to reach your fire number,
0:21:52 which would still mean retiring
0:21:55 or achieving financial independence way earlier than most,
0:21:58 like in your early to mid ’40s, which is fantastic,
0:21:59 but with real estate,
0:22:02 it might take eight to 10 years of concerted effort
0:22:04 buying a house every year or two,
0:22:06 stacking leverage, stacking cash flow.
0:22:10 And with our third and final rat race escape option,
0:22:11 it might take three to five years.
0:22:13 And that’s entrepreneurship.
0:22:15 The third way to get out of the rat race
0:22:17 is to build your own business.
0:22:19 If you look at the Forbes 400 list
0:22:21 of the richest people in the country,
0:22:23 one thing should stand out to you.
0:22:26 Most of them built their wealth through entrepreneurship.
0:22:29 And even if you have no aspirations to build
0:22:32 the next Amazon or Apple or Tesla or Facebook,
0:22:35 like I don’t have those aspirations either,
0:22:38 but building a business is a realistic way
0:22:40 to break out of the nine to five grind.
0:22:43 That’s how I was able to walk away from corporate America
0:22:45 years before starting Side Hustle Nation.
0:22:48 Entrepreneurship has helped probably thousands of friends,
0:22:50 Side Hustle Show listeners,
0:22:54 Side Hustle Nation readers do the same at this point.
0:22:58 So how entrepreneurship works to escape the rat race
0:23:00 is pretty simple.
0:23:01 We tend to overcomplicate it,
0:23:02 but I’m gonna try and break it down here.
0:23:05 So a business is simply a system
0:23:07 that solves a problem in exchange for money.
0:23:10 It’s a problem solving machine.
0:23:13 And the good news is we’re all natural born problem solvers.
0:23:15 It’s what we do all day every day.
0:23:18 That means to come up with a business idea,
0:23:20 what you really need to come up with is a problem.
0:23:22 So you can think of what frustrates you,
0:23:25 what headaches or challenges that you’ve overcome,
0:23:27 what other people complain to you about,
0:23:29 because on the other side of those problems,
0:23:31 there might be a business idea.
0:23:34 Now the solution is usually gonna take one of three forms.
0:23:37 First, a service that makes that problem go away
0:23:39 in the example of a dirty house.
0:23:41 You can hire a cleaning service.
0:23:44 Number two, a product that makes that problem go away
0:23:45 if you got a dirty house.
0:23:48 So you can go buy cleaning supplies and cleaning products.
0:23:50 And number three is content
0:23:51 that makes that problem go away.
0:23:53 Got a dirty house so you can watch YouTube videos
0:23:56 on how to organize and optimize your space, right?
0:23:58 And when the money from your solution
0:23:59 starts to exceed your living expenses,
0:24:02 that’s when you say goodbye to the rat race.
0:24:05 I break down each of these three business models in detail
0:24:06 with lots of examples in my book,
0:24:08 The Side Hustle, how to turn your spare time
0:24:10 into $1,000 a month or more.
0:24:11 It’s free on Kindle.
0:24:12 I’ll link it up in the show notes.
0:24:14 It is due for a refresh or an update,
0:24:16 which is on my to-do list for the year.
0:24:18 And you’ll also find lots of side hustle ideas
0:24:20 throughout the archives for this show.
0:24:23 I did an episode earlier this month
0:24:26 on seven different idea generating frameworks.
0:24:27 If you might find that helpful
0:24:29 if you’re in the idea seeking phase,
0:24:32 that is episode 650 in your archives.
0:24:34 So what’s so great about entrepreneurship?
0:24:37 Building a business is unique of these three paths
0:24:40 in that your primary investment
0:24:41 is probably gonna be sweat equity.
0:24:43 These days, you can get an enterprise off the ground
0:24:45 for a very low startup cost.
0:24:49 And thinking back to my own 15, 20 years here,
0:24:52 just about everything I’ve started costs less than 500 bucks,
0:24:56 at least for that initial validation and testing phase.
0:24:59 On top of that, starting a business is a way to work
0:25:00 on something that you care about.
0:25:03 It’s bringing an idea into the world
0:25:05 that’s exciting and rewarding
0:25:10 in a way that collecting stock dividend payments just isn’t.
0:25:13 And in contrast to the stock market or real estate market,
0:25:15 you’ve got considerably more control
0:25:18 over the succession failure of a business that you own
0:25:20 and the speed at which that can happen.
0:25:23 Plus, if you intentionally build something with scale,
0:25:26 you’ll find entrepreneurship to be pretty time leveraged.
0:25:28 By that, I mean your earning power
0:25:31 or your effective hourly rate improves
0:25:32 as the business grows.
0:25:35 For example, Becky Beach put a lot of time,
0:25:37 six years into her online business
0:25:39 before getting up the nerve to quit her day job,
0:25:42 but she built it intentionally with that leverage in mind.
0:25:45 – I started getting 250,000 pages a month
0:25:47 and lots of traffic to my printables
0:25:49 and my sales phones were doing so well
0:25:52 I was getting like up like 20,000 at the time.
0:25:55 So I decided to quit my job and that was two years ago.
0:25:57 Like it was hard at first because like I was living in fear,
0:25:59 I didn’t think I could do it.
0:26:01 You know, I thought my business would just end the next day
0:26:03 or something if I quit.
0:26:05 But I just went all in and told my boss,
0:26:06 hey, I’m gonna be doing my own thing right now
0:26:07 and I need to like be quit.
0:26:09 And at first he was like, oh, don’t quit.
0:26:09 You know, it’s not a good idea.
0:26:11 I don’t think that’s smart.
0:26:13 So then I just went ahead and did it anyway.
0:26:16 – And I haven’t looked back since.
0:26:18 So that’s very exciting and it really cool
0:26:20 to build something up to that point.
0:26:23 We’re able to have that opportunity,
0:26:24 to have that flexibility and say,
0:26:27 look, I’ve got this other thing that’s working.
0:26:28 I don’t need this job.
0:26:30 My role was five bad meetings or something,
0:26:32 five bad days at work until I’m out of here,
0:26:33 something like that.
0:26:35 So I think that makes a ton of sense.
0:26:39 So mombeach.com kind of plays in the mom blog space,
0:26:40 the personal finance space,
0:26:43 and talk to me about what’s ringing the cash register
0:26:46 in terms of the digital products you mentioned,
0:26:48 the printables, what’s going on over there
0:26:50 in terms of how the site is earning revenue.
0:26:53 – The first I was relying on ad income and affiliates alone.
0:26:56 But when I started also making digital products,
0:26:59 it just exploded and since making them with AI,
0:27:00 it’s even went further
0:27:02 ’cause I’m able to crank out even more.
0:27:04 The digital products are just doing so well.
0:27:06 Like people will just visit my blog out of the blue,
0:27:07 like I don’t even know them really.
0:27:08 They just come in, they’re just like,
0:27:10 they’re just internet randos.
0:27:12 They come and purchase and I have all these sales funnels
0:27:14 set up like freebie opt-ins
0:27:15 where they sign up with their email.
0:27:17 They’re redirected to a sales page
0:27:19 that leads to my Shopify store.
0:27:20 – Okay, that’s interesting.
0:27:22 I have always thought of Shopify
0:27:24 as a physical product, e-commerce platform,
0:27:27 but you can use it for digital products as well.
0:27:30 So that’s the visitor flow through SEO,
0:27:32 through Pinterest, they come to your site,
0:27:34 download some freebie and then the digital products
0:27:38 are largely like an email-based upsell after the fact.
0:27:40 – They are ’cause I get quite a lot of traffic
0:27:42 and they come in, they sign up to my freebies
0:27:44 and the freebies are like free printables.
0:27:45 Like I have a budgeting planner
0:27:47 and I got a home planner for people
0:27:50 to organize their homes like specifically moms.
0:27:52 And I just get like so many leads
0:27:54 like every single day from these freebies.
0:27:56 And then they’re directed to a sales page
0:27:59 ’cause in ConvertKit you can actually make them
0:28:01 go to a sales page after they sign up to the email.
0:28:03 And I just put the sales page there
0:28:05 and then they buy a product off my Shopify store
0:28:07 ’cause you can actually put your cart
0:28:09 in your Shopify store right on the sales page
0:28:11 so they can click a link and get to the cart.
0:28:12 – Okay, okay.
0:28:14 So give me an example of like,
0:28:17 let’s talk about this budgeting planner, for example.
0:28:18 Talk to me about top of the funnels.
0:28:20 How does somebody discover that?
0:28:23 Is this like ranking in Google for those types of terms?
0:28:25 – Yes, I make user-specific content
0:28:27 people are searching for that solves problems.
0:28:31 Say like a saving money post or a money-making post
0:28:33 and people are searching for these problems on Google
0:28:36 and I use long-tail keywords.
0:28:38 And then I create the piece of content.
0:28:40 I’ve also been utilizing chat GPT lately
0:28:41 to help me create content.
0:28:44 Like I’ll use it to make like a blog outline.
0:28:47 It makes it so much faster to create content now.
0:28:49 – So I’m trying to find an example of one of those posts
0:28:50 but how to save money.
0:28:53 And here’s a list of ideas on how to solve this problem.
0:28:55 And by the way, if you’re trying to save money
0:28:57 you probably need this budgeting planner.
0:28:58 Here’s my free template.
0:29:01 And then after somebody puts in their email for that,
0:29:04 boom, sales page for something more advanced
0:29:06 or what’s on the sales page or what’s the digital product?
0:29:08 – Well, for instance, one of my posts that are new
0:29:11 are 30-day money-saving challenge.
0:29:13 And then that post have the budgeting planner
0:29:15 and then when they subscribe to the planner
0:29:16 they get it sent to their email
0:29:20 and they’re also directed to a budgeting spreadsheet.
0:29:21 – The spreadsheet is for purchase.
0:29:23 – Yes, like I’ll have the spreadsheet for purchase.
0:29:26 I also sell spreadsheets in my Shopify store as well.
0:29:28 – You can learn more about Becky and her business
0:29:30 in episode 582.
0:29:33 But the idea is creating something once
0:29:34 that you can sell over and over again.
0:29:36 That’s the leverage that’s built
0:29:39 into a digital product business, a content business.
0:29:41 And of course there are other business models too
0:29:43 but with each of them I think it’s important
0:29:46 to think about how it might go one to many.
0:29:50 How you might be able to leverage your specific skills
0:29:51 and expertise to build systems
0:29:53 and serve lots of different customers.
0:29:55 One book I might recommend on this topic
0:29:58 is MJ DeMarco’s Millionaire Fastlane.
0:30:01 If you can get past all this talk about fancy cars
0:30:03 which didn’t really appeal to me at all,
0:30:05 the underlying foundations and ideas in the book
0:30:07 I think are really strong.
0:30:09 That’s Millionaire Fastlane.
0:30:10 With job security in question
0:30:15 and this shift towards a more on-demand freelance workforce
0:30:17 it’s hard for me to see the downsides
0:30:19 in learning an entrepreneurial skill set
0:30:22 but still the fact remains that half of small businesses
0:30:24 fail in the first five years.
0:30:26 For that reason, it’s important to start small,
0:30:28 to minimize your expenses
0:30:31 and to grow at a pace you’re comfortable with.
0:30:34 And if that failure happens to you, if you’re in that 50%
0:30:37 you can dust yourself off and start again.
0:30:40 Building a business can be labor intensive
0:30:42 and that’s why many entrepreneurs find themselves
0:30:44 in the trap of working in the business
0:30:45 rather than on it.
0:30:48 They feel like, well, I just built myself a job
0:30:51 and only this one has an even more demanding boss
0:30:53 that’s even harder to walk away from.
0:30:55 So that’s the question that you have to ask,
0:30:56 what if this works?
0:30:58 If the business I’m starting works,
0:31:00 well, what does success look like?
0:31:03 And maybe you can find somebody who’s walked that path
0:31:05 there three to five years ahead of you.
0:31:07 Well, what does their day-to-day look like?
0:31:08 Do they have the income that they desire?
0:31:11 Do they have some freedom and flexibility in their life?
0:31:14 Or are they still stuck working 60 hour weeks
0:31:16 or they’re super stressed all the time?
0:31:17 What’s the end game?
0:31:18 And is that gonna be a win from you?
0:31:20 If you build with intention from the start,
0:31:22 I think it’s easier over the long run.
0:31:25 Certain models are faster and easier
0:31:26 to see initial results with,
0:31:29 but can be harder to scale and remove yourself
0:31:31 from delivery over time.
0:31:34 I think freelancing is probably the prime example of this,
0:31:35 freelancing your skills.
0:31:37 Totally viable, side hustle,
0:31:40 one that I recommend all the time, but it can be tough.
0:31:43 Not impossible, but hard to get out of trading time for money
0:31:47 if clients are used to hiring your special skills
0:31:48 and expertise.
0:31:50 Again, hard to get out of, but not impossible
0:31:52 if that’s an ultimate goal of yours.
0:31:54 Some people just love doing the work and that’s totally fine.
0:31:56 So who is this third path best for?
0:31:59 Who is the entrepreneurship path best for?
0:32:02 I believe it is the most realistic rat race escape path
0:32:05 for most people, but especially for those
0:32:08 who don’t have the quote unquote golden handcuffs
0:32:11 of a great paying job that’s harder to walk away from
0:32:14 and might be more apt to take path number one,
0:32:17 the traditional saving and investment path.
0:32:18 People who aren’t afraid of failure,
0:32:19 you’re probably gonna get punched in the face
0:32:21 along the way in this entrepreneurship path
0:32:26 and or a little impatient, definitely the fastest path
0:32:28 if it works.
0:32:30 And so it’s like, well, that’s where it combines this.
0:32:33 Well, I’m not afraid of failure and I’m impatient.
0:32:34 I don’t wanna wait 20 years
0:32:37 to do this traditional savings path.
0:32:38 So entrepreneurship appealed to me
0:32:40 ’cause I couldn’t fathom the reality
0:32:43 of working a corporate job for the next 30 years.
0:32:45 There had to be a better way.
0:32:48 And there was and I think there is for you too.
0:32:51 And of course, if the entrepreneurship path is for you,
0:32:53 there are hundreds of side hustle show episodes
0:32:54 to choose from.
0:32:55 You can pretty much scroll through
0:32:58 and pick the ones that sound most interesting to you.
0:33:00 They’re all great.
0:33:02 I learned so much from each and every guest.
0:33:03 If there’s a specific topic
0:33:05 that you’d like me to cover in the future,
0:33:07 be sure to reach out and let me know.
0:33:10 Nick at sidehustlenation.com is my direct email.
0:33:12 And if you’re not sure where to start,
0:33:14 I encourage you to hit up hustle.show.
0:33:16 This is where you can answer a few short,
0:33:17 multiple choice questions.
0:33:18 You can do it on your phone
0:33:21 and the system will build you a personalized playlist
0:33:23 based on where you’re at, what you’re interested in,
0:33:24 where you wanna go.
0:33:25 Again, hustle.show
0:33:29 for your custom curated side hustle show playlist.
0:33:30 Big thanks to our sponsors
0:33:32 for helping make this content free for everyone.
0:33:35 As always, you can hit up sidehustlenation.com/deals
0:33:38 for all the latest offers from our sponsors in one place.
0:33:40 Thank you for supporting the advertisers
0:33:41 that support the show.
0:33:43 That is it for me.
0:33:45 Thank you so much for tuning in.
0:33:46 If you’re finding value in the show,
0:33:48 the greatest compliment is to share with a friend,
0:33:51 to fire off that text message with your fellow friend
0:33:52 who wants to get out of the rat race
0:33:53 and help spread the word.
0:33:55 Until next time, let’s go out there
0:33:56 and make something happen
0:33:58 and I’ll catch you in the next edition
0:33:59 of the Side Hustle Show.
Getting out of the rat race is simple, but not necessarily easy.
To escape, all you need is monthly income — from non-job sources — that exceeds your monthly expenses.
For example, if you spend $3000 a month, you’ll need to bring in at least $3000 (after taxes) outside of your day job.
Simple, but not always easy.
In this episode, I’ll break down:
- the most common rat race “escape routes”
- the pros and cons of each
- how to choose the right path for you
Ready? Let’s do it!
Full Show Notes: 3 Ways to Get Out of the Rat Race
New to the Show? Get your personalized money-making playlist here!
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