We mentioned some of the things you will need to consider BEFORE you make the decision about whether you want to pursue this path. Once you decide you DO want to go forward, you must decide how much time and effort you will have to invest to make that second income.
All of these things will influence what kind of opportunity you choose, so before you buy that clown costume and rush off to your first children’s birthday party, stop and consider the following issues.
As you read through these issues, write down your thoughts and comments.
How much time do you spend at work every
Do you work a lot of overtime?
Can you make more money by working more
hours at work or taking on extra projects
instead of having to find another ‘side job’ to
help you pay the bills or get the extra cash?
If your second income job requires a
scheduled commitment, are you CERTAIN
you can make that commitment or will you find
yourself in conflict with existing work or other
Interest in Second Income vs. Other Interests
Would you rather do THIS than to pursue
other interests (seeing your friends, going to
the movies, shopping, playing sports, etc.)
Can you find something to do that will teach
you something new you have always wanted
Can you find something to do that will give
you the chance to use a skill you don’t
otherwise get to use (one that you don’t want
Will you lose interest in this activity after a
short while and, if so, have you considered the
investment you might have to make to start
this second income job? Will you be stuck
with expenses to pay off after you decide you
don’t like the job any more?
Net Income (after you pay for things like transportation, supplies, etc.)
Estimate what you will have to spend for gas,
train fare, parking and other transportation
What will you need to spend for supplies,
costumes, parts, tools, etc.?
How much will you have to charge per hour,
per project or per event or activity to offset
your expenses (one time expenses AND
Will you be losing income or money from any
other source because you are spending time
on this second income activity?
Can you get overtime or extra income by
doing additional projects at work and make
MORE net income than by doing this second
Other Responsibilities and Obligations
Consider the other obligations you may have
at home (children, spouse, elder care,
cleaning, cooking, dog walking, laundry, etc.)
Can you handle all of these and still take on a
second income job?
Will you need to ask someone in your family
to “pick up the slack” while you are away
doing that second income job? If so, can you
count on that person to fulfill those
obligations? If the obligations are not
optional, and are very important, you will need
to know that you have support to fall back on if
you are going to take on this task.
Will you have to pay someone else to take on
your responsibilities in your absence? If so,
are you making ANY money on that second
income job or are you simply giving it to the
person or people who are now covering your
Will your second income opportunity require
someone to issue a 1099 at the end of the
year that will reflect taxable income? Be sure
you know the answer to that question.
How will you accept payment for your work?
Cash only? Check? Credit card?
Will you deposit this money in the bank or use
it to pay miscellaneous expenses?
If reported as part of your taxable income will
this second income take you into another tax
Resources (can you do this alone, or will you require help?)
If you choose a second income opportunity
that requires help (someone to make your
appointments, someone to help you load the
car, a second person with whom to work,
etc.), can you find someone to help you?
Would they be interested or even have the
time to help?
What skills do you HAVE vs. the skills you
NEED to do this job? If for example you are a
great painter and you want to paint murals in
bedrooms and on restaurant walls in your
spare time, is there some part of that work
(finding the jobs, scheduling appointments,
etc.) that you feel you can’t do because of
your skills or your own schedule at work?
Will you have to pay your helper something or
will each of you charge fees to the customer
or client? If so, is there a difference in the fee
scale? Is your job going to end up overpriced
for a potential client or customer because of
these additional fees?