The Side Hustle Grid


A few months ago I presented the Early Retirement Grid. Today I have a new grid I’d like to present: The Side Hustle Grid.

This grid shows how many years sooner you can reach retirement if you start a monthly side hustle. A “side hustle” is any activity you earn money from outside of your primary day job. This could be selling items on Ebay, tutoring students in person or online, using your house as an Airbnb rental, becoming a weekend Uber driver, or whatever else suits your fancy.

Let’s walk through an example of how to interpret this grid:

John makes $2,000 per month from his day job. He saves $500 each month. Therefore, John saves 25% of his monthly income.

With a 25% savings rate, John can retire in 31.9 years. (refer here for this calculation)

But then he decides to start tutoring students in math at his local library on the weekends. He earns $500 from this side hustle each month. Therefore, John’s monthly side hustle income is equal to 25% of his monthly income from his day job.

Now John’s new savings rate is ($1,000 / $2,500) = 40%. With a 40% savings rate, John can retire in 21.6 years. 

By picking up this monthly side hustle, John reduced the number of years he needs to work to reach retirement by 10.3 years.


Start Hustling

There’s a reason so many people who achieve early retirement emphasize the importance of starting a side hustle: they understand the power of multiple income streams.

The larger your monthly income-to-spending gap, the faster you reach retirement. Starting a side hustle allows you to increase your monthly income and accelerate your path to retirement. Whether you’re trying to pay off debt, build up an emergency fund, or simply increase your net worth, a side hustle will help you reach these financial goals sooner. So start hustling!

The following assumptions were made to create this grid:

  • This grid assumes you invest all side hustle income in a lump-sum manner once per year and that your investments earn a 5% return annually.
  • The number of years to reach retirement is based off the 4% rule, and assumes you are starting at a net worth of $0.

I strongly suggest using free financial tools like Personal Capital to track your net worth, spending habits, and cash flow to help keep an eye on your money. The more you track your finances, the better you get at growing your wealth!

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13 Replies to “The Side Hustle Grid”

  1. Excellent point. Income increases of any variety can substantially improve your early retirement date. Expense-cutting is important, but income increases can be just as important from a retirement standpoint.

  2. Dude, very cool! My side hustles have mainly gone toward saving for big goals (travel, down payment) but I have now started to invest regularly (outside of retirement savings).

  3. I suppose many people are interested in side hustle that brings more income. On the other hand, side hustle often occupies a lot of time that should belong to family. I need to find the balance between income and time.

    1. I too think family should always come before side hustles. In particular, I think side hustles are generally a good idea for anyone with a decent amount of free time outside of work who can make more than their hourly wage through their side hustle for a few hours per week. For these people, side hustles can actually make a massive difference in how much they’re able to save and invest.

  4. Hello Zach, just chanced upon your blog. What will you recommend as fuss-free investment (put in and don’t need to observe / watch markets kind) to get 5% annually?

    1. Typically any stock index fund will provide a return of at least 5% over the long run(10 or more years). Just to give you an idea, the Vanguard total stock market etf VTI has provided a 7.8% annual return over the last 10 years, so 5% could be seen as a conservative estimate.

  5. I like the grid. It’s a neat, simple way to think about the power of adding additional income streams.

    I am guessing that you based the years to retirement off of something similar to ?

    One more assumption that you may want to add (though for simplicity I understand why you left it out) This assumes that monthly / annual spending never changes.

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