If you have a side job, there’s probably been at least one day where you’ve made more than your regular job. If those days keep adding up, you may start to wonder if your day job is holding you back and if your side job can launch you to your dream life. Before you get lost in dreams of working from the beach of a remote island with no one to answer to but yourself, be sure to consider the cold realities of making the leap.
You may have a great gig that nets you far more per hour than you could ever make at your 9-5, but will it scale? How will you get enough work to match a full-time job? Can you make sure your total annual income will surpass your current job? Is the work cyclical by seasons and market trends, and how will you weather any down times? What happens if you don’t make it? Is your current job one you could go back to or will a resume gap force you into yet another career? Make sure you have a solid business plan that answers all of these questions before making any decisions.
Salary isn’t the only thing to consider. You may also be leaving a valuable benefits package on the table. When you work for yourself, you’re either working or you’re not. There are no paid sick days or holidays. Healthcare has always been a major concern, but the Affordable Healthcare Act has closed the gap, so you do at least have options to consider.
Another big benefit that you’ll lose is a retirement plan. However, pensions are mostly a thing of the past, so you’re probably only going to have to decide whether giving up a 401k match is worth it. 401ks frequently underperform private investment vehicles due to high fees, and there may be little to no difference if you hold your self-employed retirement savings in IRAs.
Do You Really Want to Work From Home?
Emotional factors should also come into play. When you work from home, you miss out on the small social interactions and the motivation to work harder that comes from being around other people. If you stay disciplined, you can get the work done — it’s just down to your personality as to what makes you happier. As to not being around other people, you’ll have more time to get involved in other community activities to meet new people that you aren’t forced to be around just because they’re your coworkers and who may turn into valuable leads to grow your business.
The bottom line? There’s no reason making your side job your main job can’t be the best decision of your life. You just need to make a plan.