CHAPTER

3

Banking on It

THE DAY AFTER EMILY BEACH, THE FIELD HOCKEY COACH FROM Chapter 2, stayed up late chiseling away at her rotating hockey stick concept, she refused to show it to anybody except her parents. In fact, she didn't let it leave her house. Instead of celebrating her invention, she focused on finding an intellectual property attorney who could make sure her work was protected.

The father of one of the girls on the team she coached at Georgetown arranged a call between Emily and a patent attorney, who first explained that filing for a patent would cost between $10,000 and $15,000. “At that point, I was like, ‘I can't do that,’” Emily says. Then the father, who was also on the call, stepped in, and asked if the attorney could cut her a deal. The lawyer agreed to help Emily for closer to $8,000. Within two years, Emily had her patent, and she started showing off her stick. Without that big expenditure, as painful as it was, that handcrafted prototype might still be sitting, unused, in her parents’ garage.

As Emily found, some costs are necessary, but there are often ways to creatively reduce them. Almost everyone I interviewed struggled with the tension between investing in their businesses and conserving cash. Fortunately, there are plenty of ways, from bartering to hiring young freelancers, to keep costs down—which helps keep profits up.

Maximizing those profits is essential, because even people lucky enough not to be immediately concerned about a layoff or how to afford the new baby that's on the way face some degree of financial uncertainty—that's just the nature of living in our current economy. Most Americans are still struggling to recover from the 2000s, which was so tough on middle-class Americans that the Pew Research Center labeled it “the lost decade.” For the first time since World War II, income and net worth fell for most Americans, and we're still looking for ways to build it back up again.

For those of us approaching mid-career, there's also the inevitable flattening of income to contend with. According to a Payscale.com analysis of over 1.5 million college graduates, most people stop getting raises in their early forties (for women, thirty-seven is the average age; for men, it's forty-five). PayScale.com lead economist Katie Bardaro explains that's because people generally start rapidly improving their skills and value in their twenties, when they have a lot to learn, and then they max out around age forty. At that point, more years of experience does little to increase one's value to an employer. (Exceptions include lawyers and highly technical jobs.) Jobs can also start to feel somewhat repetitive at that point, which also makes it an ideal time to start something new on the side.

As we get older, the situation only gets more severe. In fact, self-employment might be the only way people in their fifties and sixties can guarantee themselves jobs at all. The Government Accountability Office recently found that during the economic downturn, workers over the age of 55 were more likely to experience long periods of unemployment than their younger colleagues: The median length of unemployment for that age group was 35 weeks in 2011, compared to 26 weeks for younger workers. Those eligible for unemployment might receive up to half of their former salaries during that time, but otherwise, that's two-thirds of the year without regular earnings.

Those trends are depressing, especially when you consider that income will likely stagnate just as our lives get more expensive: People in their thirties, forties, and fifties are often squeezed by family costs, mortgages, helping aging parents, and paying for children's education. That means we need a second source of income more than ever as we head into middle age—and that's where a side income can save us. And after fifteen or twenty years on the job, many people have also accumulated the skills and contacts that can help launch one.

Successful side-giggers often anticipate the income drop-off early, and get started on their backup plans when they're still in the prime of their main careers. Isabella Rossellini's daughter Elettra Wiedemann, who works as a model and also holds a master's degree from the London School of Economics, told New York magazine, “Models are like athletes: You burn hard and fast.” Her master's degree, she explained, “was setting the groundwork for a Plan B if and when the day ever comes when the phone stops ringing with modeling jobs. You can't count on a career like my mom's. That's very rare.” That's the same reason Olympic gymnast Dominique Dawes launched a speaking career, General Hospital actress Laura Wright runs a winery, tennis star Venus Williams started an interior design firm, and her sister Serena created a jewelry and fashion line. And it's why a lot of the side-giggers in this book got started long before they really needed the money.

Jason Malinak got the idea for his successful Etsy shop, where he sells digital products that give tax and bookkeeping advice to other Etsy sellers, from his wife, Katie. In 2007, she started selling handmade baby clothes and blankets on Etsy. “She wanted to have a job where she could stay home and earn some money,” says Jason, thirty-two, who lives in Colorado Springs with Katie and their two young children. At the time, they were trying to save money to make a down payment for their first home. (I came across Jason's story as I was doing market research for my own shop; he was one of the popular Etsy sellers offering digital copies of their creations.)

As Katie's Etsy business grew, Jason, who works as an accountant, started helping her keep track of her orders, revenue, and costs so when it was time to file their taxes, they would have all the paperwork in order. He soon realized that other Etsy sellers had the same questions. So he took the bookkeeping system he created for his wife and made a more user-friendly version. His basic bookkeeping guide features a time tracker, inventory lists, monthly sales spreadsheets, and an annual summary report.

After opening his shop, he started answering questions on the Etsy community forums, which helped spread the word about his products to other sellers. He soon expanded his product line further, into tax guides and specific bookkeeping tools, such as mileage logs. He worked on creating his guides and emailing his PDFs to customers in the early morning or late at night, outside of his job managing the money of a large nonprofit organization. “I consider it all fun,” he says, which means it doesn't feel too much like work. He's also selling to a grateful audience: His customer feedback section on Etsy is filled with customers describing how his products help them manage their shops and insisting that the e-books are as useful as meeting with an accountant.

Because his products are digital, he pays virtually zero transaction costs. He learned basic design himself and then had a tech-savvy friend put his images and text into an e-book format. That means all the money he brings in from his now 1,100 sales and counting is pure profit. He and his wife put the money toward their children's college fund as well as remodeling their house. “It adds to our financial cushion,” Jason says. And it doesn't take thousands to create that cushion—during one recent month, his shop brought in around $200. The possibilities, though, go well beyond that. He recently wrote a book about Etsy bookkeeping and plans to launch a related website with even more bookkeeping products.

Febe Hernandez, a federal worker by day, launched a jewelry business to help carry her into retirement. Like Jason, she doesn't yet rely on the income. The twenty-year veteran of a three-letter agency in Washington, D.C. (her agency asked that she not identify it by name), got together with a group of girlfriends for a beading party in 2010, and she fell in love with the craft. “I was overwhelmed with a desire to create, then a few months later I had several dozen pieces, and I had a show,” she says. She registered her company as Designs by Febe, got clearance from her agency to proceed, and sold $2,000 worth of jewelry at her first event.

Febe, now sixty, quickly ramped up her business by working on the weekends and evenings. The next year, she held half a dozen shows in New York. She connected with the wedding industry in the city and showcased her wares to brides, who loved her sparkly pearl and gemstone designs. Her business recently started turning a profit, and she plans to continue growing even more once she retires from her agency in five to seven years. In fact, she dreams of opening storefronts in New York, Washington, D.C., and Los Angeles.

KEEPING START-UP COSTS LOW

Calee Lee, a videographer now in her early thirties, found that her side-business brainchild—a line of digital children's books—could be done with very low start-up costs if she used a royalty-only model to pay writers and illustrators and made use of the expensive software she already had for her videographer job to create the books.

She first got her idea after reading an article about Amanda Hocking, the author who sold over a million copies of her self-published vampire books. Around the same time, Calee had started reading children's books to her five- and two-year-olds on her Kindle, but she was disappointed with the quality. Classic books like The Velveteen Rabbit just didn't look good: The formatting didn't seem quite right, and the normally vibrant colors of the illustrations went black and white on the screen. “I said, ‘I can do better than this,’” recalls Calee. So one afternoon when her children were out and she finished up work early, she started writing a story that she'd been thinking about since a family vacation to Cyprus.

A few years earlier, the family had taken a trip to the Mediterranean island. As they visited monasteries, they noticed that cats were everywhere. After asking around, Calee learned that over a millennium ago, Queen Helena, mother of Constantine the Great, had stopped by Cyprus on her trip back from visiting the Holy Land, and noticed that people were unable to worship because of a rampant snake infestation. She was so disturbed by that state of affairs that she decided to remedy it by sending a shipload of cats to the island to control the snakes. Today, says Calee, those cats are still called “Queen Helena cats.” “I thought it was a great story for kids,” she says.

Calee also wanted to create more appealing role models than the Disney princesses so popular in children's culture today. “I wanted to give my daughter some princess alternatives and show her beautiful women that were strong in a different way,” she says. Queen Helena traveled halfway around the world to help a village in a tangible way. Another one of her protagonists, an English princess named Audrey, gave up her wealth to help feed a village.

Once Calee wrote her first book about Queen Helena, she found an illustrator and put together a contract that established payment to the illustrator through royalties, instead of upfront. That means the illustrator would earn a lot if the book sells well, but almost nothing if it doesn't. “If one of our illustrators works with a big publisher, like Scholastic, they get a very small percentage of proceeds. We offer a lot more.” As she invited other authors to write books for her newly minted publishing house, Xist Publishing, she applied the same royalty model to them. Thanks to the success of the books, Calee says many of the contributors are making more money than they would under the traditional model.

To keep other costs down, she asks lawyer friends to review contracts and works out of her home. She already had the software from her videography business that she uses to create the e-books, as well. To save on marketing costs, she launches blog tours for authors instead of paying for advertising.

Today, Xist has over eighty titles and is profitable. Her revenue comes from book sales, largely over Amazon, as well as book rental income. Since most of her titles are part of the Kindle Lending Library, anyone with an Amazon Prime membership can borrow one book for free each month, and Amazon pays Xist for those rentals.

That extra income makes Calee feel more financially secure. “I'm making more doing this than I did as a copywriter when I first got out of school,” she says, and in one or two years, she thinks it will exceed her income from her full-time job as a videographer. Says Calee, “It's really nice to go to Target and to come home and see I've made money without doing anything, and to see the people I'm working with have made money, too.”

The low start-up costs of Douglas Lee Miller's side-gig also means that he can keep almost all the revenue, instead of using it to pay off expenses. Doug is the kind of person that people often turn to for advice. They ask him, the new media manager at DePaul University in Chicago, how to set up a Twitter account, or how to promote their small businesses through Facebook, or how to train their employees to be social media–savvy. Doug, now in his late thirties, got so many requests for help that he realized that in order to protect his time, he needed to start charging people for it. That's when he launched his social media consulting business, The dbMill, which he now runs in addition to maintaining his full-time job.

His motivation was largely financial: After his daughter was born in 2009, his wife took a break from her work as a costume designer, and the family needed some extra income to compensate for that. “While she was out caring for our newborn daughter, I'd been getting a lot of requests and helping people out a lot, so then I set up a more formal way to do that.” Clients came easily since he already had a portfolio to show off and had established his reputation as a social media expert.

Doug found that as someone selling a service—social media consulting—he could get started for almost nothing. Instead of investing in fancy software, he used free Google tools, including Google Drive, which lets him save work and share it with clients, and Google Calendar to schedule meetings. He does much of his work on his iPad while commuting to his full-time job, as well as before bed or first thing in the morning. He puts between fifteen and thirty-five hours a week into his side-business that way. (DePaul, he says, embraces his extracurricular activities, as long as his work for them doesn't fall by the wayside. Sometimes he takes a vacation day or makes up hours outside the typical nine-to-five schedule.)

“I have my head in a device every hour of the day, but I don't mind because I'm doing stuff that's interesting to me and helping people,” says Doug. He does have to make sure he unplugs to spend time with his two children, though. “But at the same time, what I do is for them, so they can have stuff,” he adds.

Doug also invested $100 for an annual membership in Social Media Club Chicago, a networking group that connects him to potential clients. Those connections have led to presentations at businesses or for individuals on how to use social media to advance their brands or land a dream job.

Those minimal start-up costs mean that his earnings are almost all profit—money that supports his family's daily expenses. As his wife takes on more clients in her costume design work, then he might start funneling the money into college education savings or retirement accounts, says Doug. “For now, it's helping us have freedom to do the kinds of things we want to do. We're spending it on normal operating expenses rather than saving it,” he adds.

Calee and Doug used personal connections and relationships, free online tools, and their own digital and web skills to launch their side- businesses on shoestring budgets. And while it might seem like a challenge to keep costs so low, it's actually a good challenge to have, and increases the chances of success. That's because a strict budget—or no budget—at the beginning forces you to invest only in the things that are truly necessary, which not only eliminates distractions but also makes it easier to be profitable more quickly. It also makes it easier to shift gears and try something new if the first attempts to sell a product or service don't go anywhere.

Blake Mycoskie, the founder of TOMS shoes, attributes his shoe company's success to his early frugality. In his book, Start Something That Matters, he describes how he started out with 250 pairs of shoes in three duffel bags in his small apartment. His lack of resources, he says, inspired creativity that gave him a competitive edge. TOMS, in fact, started out as a side-project, while he was employed at a different company. “If you have little money and have to bootstrap and improvise to pull things together, that becomes embedded in your company's DNA forever—so as you scale up, you maintain the frugality and efficiency that helped you survive your earliest days,” he writes. He points out that Kenneth Cole started out by showing off his shoes from the trunk of his car and Ben and Jerry launched their eponymous ice cream company with just $8,000 in savings and a $4,000 loan.

Adam Baker, founder of the hugely popular Man Vs. Debt blog, which now supports his family, spent just $74 to buy the domain name for his site and a friend's graphic design services. He started blogging about how he was simplifying his life and paying off debt, and now he runs courses, sells digital guides, and speaks about living more frugally. That $74 investment, he says, changed his life. (And it was a good thing he didn't spend much on his domain name, because his original choice, SlowSimpleWealth.com, never took off.)

My own start-up costs were limited largely to the illustrator's services. I found her through one of my favorite “mommy bloggers,” who had a gorgeous blog banner that was similar in style to the way I wanted my planners to look: fun, whimsical, and modern. So I clicked through to the credit link at the bottom of her banner and discovered a link to the illustrator's site. As soon as I saw her portfolio of greeting cards, wall art, and website designs, I knew that I had to work with her. She used bright, clean colors and had dozens of clients all around the web. She charged $35 an hour, payable through PayPal, and my planner cover ran me about $100.

If you happen to have $10,000 or $20,000 that you're prepared to put into your business, then it would be easy to spend $5,000 on marketing, another $5,000 on a professional e-commerce website, and $5,000 on supplies before even getting your concept out into the world to see if there is a market for it. But as side-giggers showed me over and over again, there's no need to spend big before you start earning: The Internet makes it easy to quickly design something or describe a service that you offer, and to post it—on your own blog, a site like Etsy, or Craigslist. Getting it out there, for as little money as possible, as soon as possible, while continuing to tweak, update, and improve it, can help beginning side-giggers avoid costly losses early on.

GETTING IN GEAR

Many of the successful side-giggers I met also spent months or even years unloading debt, building up savings, and getting in better financial shape as they prepared to launch their side-businesses. Doing so meant they had more freedom to invest a couple hundred dollars (or more) into their idea, and it also meant that failure wouldn't bring financial catastrophe, because they had savings and other income (from full-time jobs) solidly in place. In fact, knowing that they wanted to make their side-businesses successful is often what motivated better financial habits in the rest of their lives.

Jenny Blake started her blog, Life After College, while she was working full time at Google providing career development and training for employees. As a certified life coach and twenty-something herself, she wanted to share what she'd learned about making mistakes, following big dreams, and celebrating success along the way. She soon realized that her own big dream was turning her blog into a book, which she did in 2011. To make the book launch a success, she decided to take a three-month sabbatical from her full-time job, which meant giving up three months’ worth of pay. That investment was worth it to her. “I felt like it wasn't fair to either project if I tried to do both at the same time,” she says.

To prepare for that financial hit, she took a close look at her expenses. She realized her restaurant habit was costing her $100 to $200 a week, so she started eating at home more. She created a separate savings account dedicated to funding her sabbatical, and kept to a stricter budget with the help of spreadsheets in Google Documents.

To supplement that savings account, Jenny started looking for other ways to bring in more income, too. She sublet her condo while traveling to promote her book and took on a handful of paid speaking gigs as well as some new life coaching clients. Once a month, she scheduled a check-in with herself to revaluate her budget and decide on any other changes. In the end, she decided the trade-offs were worth the inconvenience. She says, “I wanted to enjoy the time and make the most of it, so that meant enjoying some expensive meals, but I gave up my condo. So I didn't have the comfort of my own bed, but I could spend more on social events, outings with friends, and travel.” (Soon after taking her sabbatical, Jenny decided to embrace self-employment as a life coach, speaker, and writer. She left Google for good and moved to New York City.)

Other side-giggers told similar stories of start-up frugality: Chris Furin, the cake designer, started saving up money as soon as he knew Furin's would eventually close and he'd need to go out on his own. He lowered his bills where he could and paid cash for all of his purchases, including his big fridge. Todd Henry, founder of The Accidental Creative, made sure he had multiple clients and sources of income, as well as a hefty savings account that could support his family for at least two years, before going full time with his company. While he was still running accidentalcreative.com on the side, he put almost all of his earnings into savings and avoided treating it like personal income.

Even seemingly wealthy small business owners, like Katherine Kallinis and Sophie LaMontagne, founders of Georgetown Cupcakes and stars of the TLC show DC Cupcakes, tell stories of strict frugality in their early days. I first met Katherine and Sophie when we appeared on a local news program on the same day; they came to the set bearing dozens of perfectly glazed cupcakes in flavors like chocolate mint and lava fudge. Soon after, I interviewed them about how they left their high-paying corporate jobs to start their cupcake shop.

Katherine and Sophie originally started as side-giggers, too, tweaking their recipes and honing their products on weekends and evenings while maintaining their corporate gigs (in fashion and venture capital, respectively). They cut their living costs; Katherine gave up her own home and started sleeping on Sophie's couch. Even buying a $50 poster at Kinko's turned into a point of contention. “My husband was screaming at me, ‘We don't have $50 to spend on a poster!’” recalls Sophie. “We were painting the walls ourselves and doing a lot of work we should have hired professionals to do, but we couldn't afford it,” she says.

The recurring theme, of course, is a sense of modern frugality, which means ignoring all of the loud cultural messages about what we should be buying, whether it's a fancy wedding or big house or a new outfit for spring, and listening instead to our own personal preferences that will lead us to our bigger dreams. Katherine Kallinis was happier giving up her own bed if it meant she could open up a cupcake shop; Jenny Blake similarly traded her familiar pillow for a life of adventure. These successful side-giggers didn't just spend on autopilot—they reworked their lifestyles to reflect their true goals.

RAKING IN THE DOUGH

Deciding how to spend (or save) that new revenue can be as much of a challenge as generating it in the first place. The side-giggers I met often avoided depending on their new income, instead ignoring the money, or spending it only on growing their companies. Then, when their revenue turned into something they could count on, it felt like finding a chocolate coconut frosted cupcake on a cold, rainy afternoon.

Maia, the teacher-turned-organizational guru, says she “pretended the money didn't exist” for the first four years of her business. Only then, she says, as she prepared to scale back her full-time job in favor of more one-on-one coaching, did she invest in a professional photographer, intellectual property attorney, and website designer for her company. Jason, the tax expert on Etsy, uses his earnings to help save for big goals, like his children's future college tuitions. Amanda Williams, creator of the travel blog A Dangerous Business, uses earnings from the cruise and airline advertisements on her site to fund her travels. Kelsey Freeman, a freelance designer, photographer, and substitute teacher, sells her photos on SmugMug.com to pay for Christmas presents for family and friends.

Morgan Hoth, a retired special needs teacher now in her mid-sixties, spends her days creating one-of-a-kind silk scarves and neckties in her studio in her house in Richmond, Virginia. Her hobby-turned-business funds trips, new sofas, and financial assistance for friends in need. “In the summers when I was teaching, I was weaving rugs, dying them, and always playing around,” she says. Then, when she got close to retirement, she decided she wanted to get more serious about her art, so she put her creations online through Etsy. She quickly built a steady stream of sales. “I just need to sell one or two pieces a week to be happy,” she says. Her scarves, which are painted in bold chartreuse, greens, and purples and often incorporate elements of nature such as leaves or flowers, range from $45 to $200.

Thanks to those sales, says Morgan, “If I want a Temper-Pedic mattress I can have one; if I want to fly to Europe, I can do it; if I want to go on a road trip, I can afford it; if I have a friend hanging at the end of a cliff, I can help.” Otherwise, she probably would not do those things, given the “crappy little pensions,” as she puts it, that she and her husband live off of. “It gives me the freedom to do things I wouldn't normally do—things that make me happy. I thought going to Europe was for rich people, but I went, and I used my money. I wouldn't have done that otherwise,” she says.

Sydney Owen, a former corporate public relations guru-turned-skydiving marketer now in her late twenties, also opts to direct her side-gig earnings as a career coach into her “fun money” fund. For years, Sydney worked her way up the ladder of a corporate public relations agency in Chicago, and she pursued her real passion on her days off: jumping out of airplanes. But she soon wanted it to be a bigger part of her life than just a weekend hobby. She decided to quit her job and become a skydiving instructor, despite the fact that she was on the “fast track to corporate success,” as she puts it.

Sydney didn't want to leave the world of public relations completely; she formed her own limited liability company, which she calls 3Ring Media, and started taking on clients. The Chicagoland Skydiving Center, where she also jumped out of planes, was her first one. Soon, she moved to southern California, where the skydiving season continues year-round, and landed a job as a full-time events coordinator at the Drop Zone, a skydiving center in Lake Elsinore. “I'm putting together awesome events, making sure everyone has a great time,” she explains.

While she earns a base salary, it's relatively low, because her compensation package includes free jumps, which she needs because she's training to compete in four-way formation diving, which involves performing a series of formations with teammates while falling toward the Earth. To supplement that income, she took on more clients, including small businesses who want to ramp up their social media presence. She also started coaching people on improving their resumes and fine-tuning their career goals, skills she picked up in college. She mentors college-age students and twenty-somethings in their first and second jobs, to help them “get ready for their next big gig,” she says. Sydney schedules client calls on her days off, Tuesdays and Wednesdays, or after work and during her lunch break.

Because her start-up costs were so low (she formed her limited liability company using Legal Zoom, where packages start at $99) and she just needs her phone and an Internet connection to do her job, she can pour her earnings back into her passion. She often funds her additional skydiving training costs that aren't covered by sponsorships. (While her employer covers her jumps, she still has to pay for coaching, supplies, and time in a training wind tunnel that simulates free-fall conditions and allows skydivers to practice their moves.)

Her side-business also buys her peace of mind: “If it came down to it, I could support myself with 3Ring Media, I know 100 percent. It just depends how much time I want to put into it,” she says. In a photo snapped of Sydney skydiving, she's so high that the photo captures the Earth's curvature along the Pacific Coast. She looks self-assured, relaxed, focused—and completely confident that her parachute will open and glide her to a safe landing.

Many side-giggers put their earnings into retirement itself, through long-term investment accounts. Since most of us are saving far too little for retirement, and find little room in our budgets to put 10 to 20 percent of our regular salary into retirement accounts as we should be doing, side-gig income can be the factor that allows us to save something for those later years. In Free Agent Nation, Dan Pink argues that we'll all be working in some form during retirement, given that we can expect to live longer and be healthier than many in our parents’ and grandparents’ generations. Getting started long before retirement, both leveraging the resources from our full-time jobs and giving our side-gigs a chance to grow before we really need them, can also lead to a steady stream of income after we leave the traditional working world.

Martie Maguire and Emily Robison, the two Dixie Chicks who launched a separate group, The Court Yard Hounds, on the side, told Entertainment Weekly that part of their goal was to build a backup plan for when “the Chicks aren't happening.” Martie Maguire explained that she wanted “the security of knowing there's something we can always do. Almost like a retirement plan.” Her sister Emily Robison added, “This is our 401(k).”

Along with all of those important financial goals, there was often something even bigger than money driving many of the side-entrepreneurs that I came across, and it got at the core of how they defined themselves. Perhaps because we've seen so many of our parents crushed when a layoff ended a long career and resulted in soul-searching about identities that had been so wrapped up in work, or because we know that we're about as likely to hold onto our jobs until retirement as we are to win the lottery, we resist defining ourselves solely through our primary employer. We want our identities and sense of self-worth to go beyond our job titles. That's why we maintain personal email addresses and social media accounts, personal websites, and personal side-gigs. We are not our jobs, because we know our jobs could disappear in an instant.

And while the amount side-giggers earn often grows and builds over time, it can seem so small at first that many people I interviewed were somewhat embarrassed to tell me how much they earned, even dismissing their efforts as a “hobby,” something I found myself doing when describing Palmer's Planners to friends. If I called it a small business, then it sounded like I should be pulling in a couple thousand dollars a month, or at least a few hundred on a regular basis. But what I quickly learned as I spoke to more people undertaking similar quests was that it wasn't the size of the side income that mattered—it was that it existed at all.

Plus, over time, those earnings don't stay small. That's because of a reverse take on the famous Latte Factor, coined by money guru David Bach. He argues that by spending money on a latte and other incidental expenses every day, you're costing yourself millions in the long run in lost compound savings. Using similar logic, earning a small amount every week or every month allows side-giggers to build financial security over time. Consider earning $200 a month through your side-gig. That's $2,400 a year. If you invest that $2,400 in an index fund that pays out 6 percent over the long haul, you have almost $40,000 after ten years. After thirty, you have over $200,000. Not a bad way to supplement a retirement fund.

To make sure we get the most out of those side-gig dollars earned, it can't just languish in a PayPal account—the mistake I made after running my Etsy account for a year. I had over $1,000 in the account, where it earned zero interest. Instead of splurging on new clothes or all the lattes I could possibly consume, I moved it to my savings account, where it at least earned a positive return while I pondered just what to do with the cash.

If these financial management details start to give you a headache, remember the bigger picture: If your full-time job is a bond, steadily paying a relatively modest rate, then your side-gig is your stock: It could take off at any moment, and make you rich, or at least financially secure, in the process.