A naukri.com initiative
Killerstartups
1M
361
Image Credit: Killerstartups
Side hustles are quietly making millennials poorer—here’s the hidden math nobody talks about
- Side hustles can be found everywhere, promising easy money through various activities like driving rides, flipping furniture, or drop-shipping products.
- However, research shows that the median side hustler only earns about $250 a month before taxes and deductions, which is often barely enough to cover basic expenses.
- The hidden costs of side hustles become apparent during tax time, with self-employment tax, state income tax, and platform fees reducing the actual earnings significantly.
- Despite working extra hours, many millennials find that their side hustle income only covers routine bills and debt, not contributing significantly to building wealth.
- Irregular earnings from side gigs can lead to irregular spending patterns, where the money that comes in quickly goes out just as fast due to 'money illusion'.
- Hidden costs like platform fees, fuel, insurance, and unpaid wait time can significantly reduce the net wages of workers in gig economy jobs like ride-sharing and delivery.
- The overemployment and irregular income from side gigs can lead to burnout, impacting not only finances but also physical and mental health.
- Studies show that many gig workers struggle with financial insecurity and stress, despite putting in record hours, as the income often gets absorbed by everyday costs and fee.
- When calculating the true costs of side gigs, including taxes, fees, and opportunity costs, many hustles may fall below minimum wage, raising questions about their long-term financial viability.
- To improve financial outcomes, individuals are advised to separate business expenses, price their time wisely, advocate for fair platform policies, and prioritize benefits over just dollars.
- Ultimately, the allure of side hustles often overshadows the harsh reality of their financial impact, prompting a need for more transparent evaluation and smarter financial decisions.
Read Full Article
21 Likes
For uninterrupted reading, download the app