The post about my first side hustle received some very positive feedback. I never thought people would be so eager to embrace this idea, which is encouraging as I genuinely believe this is the future of work and sustainable living.
The most common question I have been asked was “what side hustle should I do?”. Frankly I am not sure because individual circumstances, experience and skills differ hugely. What I can tell you is the side hustles I did after my first one, which hopefully will give you some inspiration on the path to pursue.
After my first side hustle as a glorified Chinese EA, I embarked onto 3 hustling avenues that now generate regularly income:
The likes of Property Partners and other crowdfunded property investment platforms such as Realty Shares weren’t around when I started off in this space so I had to actually get a deposit, a mortgage and buy a real house.
I was in my early 20 when I had this idea but unfortunately no banks would lend to a student who had no income or deposit. I then tried every other avenue to borrow money commercially, including dealing with a shady pawnshop owner in the back of a dark pub in Oxford. None of them worked out.
It was around 2010-11 when the U.K. property market suffered its worst slump of the decade due to the Great Recession and I sensed the opportunity was too good to be missed. Out of options, I turned to my parents.
Long story short, after a dozen “robust” conversations and several exchange with our family lawyer (who was put in a bizarrely conflicting situation of having to act for both my parents and myself as I was too poor to afford one), an agreement was drawn up between my parents and I where they would purchase a property on my behalf and in return I had pay them a regular mortgage repayment fixed at 7% for the next 5 years, which would then revert to the “base rate + 7%”.
It was an eye-watering rate given that Quantitative Easing (QE) was just starting and banks were on a race to offer 1.5% mortgage rates to their customers!
The first 6 months were really tough as I had to refurbish the house, find a tenant, learn about tenancy and tax laws, all by myself, whilst being a full-time student. I even had to look for consulting opportunities again in the first few months just to make the “mortgage” payment.
Thankfully a tenant moved in the week after I completed the refurbishment. Even more proudly I never missed a single payment. I refinanced and got a proper mortgage at a much more reasonable rate (sub 1.5%) as soon as I found a “real” job and then repaid my parents in full.
I still own that house, which is situated in a town that had since been transformed into a major transportation hub into London. I was able to achieve yearly rental increase whilst seeing handsome capital appreciation.
Take smart risks, be brave when the market is pessimistic
Beggars can’t be choosers
My parents should really open a payday lending business!
After the gig with Jonathan, I realised that there was a huge demand for Chinese speakers who were professional in business settings as the U.K.-China trade was booming, so I wanted a piece of the action. Furthermore I was constantly worried about the prospecting of defaulting on the “mortgage” I took from my parents to buy the house, so I wanted to build as much financial cushion as possible.
I contacted Jonathan to see if he had more work. The answer was a “No”. So I asked him to refer his friends to me should they wanted to do business in China and needed someone to help them to navigate the landscape. I also agreed to give him 10% of the profit as commission. Surprisingly I did get several client from him, which built up my confidence at the early stage of this hustle.
The problem was that the traction was too slow. The amount of leads coming from one person was extremely limited and yet I still had plenty of capacity. I needed more leads.
So I contacted the university career service to see if they needed someone with my service or knew anybody else who did, since they were supposed to be helping my “career”.
Obviously a department in an English university whose population was 95% British didn’t require my Chinese business expertise. However the unexpected twist was that the husband of one of the career advisors worked for Oxford City Council, which was establishing a partnership with the Chinese city of Wuhan and urgently needed a translator. The pay was decent (£12 per hour, almost twice the minimum wage of the time) and the hours were flexible. So I immediately jumped on the bandwagon.
Ever since then, I’ve had at least one consulting gig at any given time. The work gradually moved from grunt work such as data entry to more sophisticated projects like market research and now financial modelling and helping businesses to prepare plans to raise capital. My earning power of course skyrocketed.
This is really a fancy way of saying that I buy and hold shares in high quality companies that consistently pay out dividend (a part of its profit) to its shareholders. They are probably the most passive form of income as you literally don’t need to do anything apart from sitting still and waiting for the cheque to arrive each quarter.
However my story with dividend investing started with a much more roller coaster beginning.
In spring 2010, I was overspending, mainly as a result of alcohol and taking girls out to fancy dinner dates. For some unknown reasons my bank thought it would be an excellent idea to issue me with a credit card with a £3,000 limit when I had no job or income (literally a ninja). Before I knew it, I was over £2,000 in debt with interest accruing at 20% per year.
I woke up one morning and decided something had to stop.
In April 2010, the Deepwater Horizon oil rig exploded in the Gulf of Mexico, resulting in one of largest environmental disasters in the decade. The rig was operated on behalf of BP and thus incident sent BP’s share price tumbling by 50% overnight.
By then I had read enough investment books to deduce that the market was probably overreacting to the negativity and thus undervaluing BP. The business’ cash flow generation was remarkably healthy, oil price was strong at the time, such lawsuit would take years if not decades to settle. Devaluing the company by 50% just didn’t seem to justify it as it suggests the potential liability of this disaster would be in excess of $50 billion.
Sensing an opportunity here, I took out the last £1,000 from my credit card and then borrowed a further £9,000 from friends and families, under the pretence of an emergency. I then put all the fund into a brokerage account and bought as much BP shares as I could over the next few days.
Its share price recovered within 2 weeks of the disaster and was up by 45% before I sold the majority of position to repay the credit card debt in full as well as my friends.
I told my parents what I did and asked if they would like the money back but they were happy for it to remain invested. That was when I realised the concept of dividend as I received a deposit into my account out of nowhere 4 months afterwards. It wasn’t much (£101.01 to be exact) but it felt awesome to have money coming in for doing nothing, especially from a company in the middle of a major crisis, who still had the financial strength to reward its shareholders.
My parents did go ballistic after learning what I did though. However this incident sparked what turned out to be long term passion of dividend investing.
Never doing that again! Terrible for my blood pressure.
Most financial problems can be resolved, it’s just a matter of creativity and willingness / silliness to try.
Receiving a dividend felt great.
So these are my side hustles and how I got started. I still do all of them today and love every single one of them.
In my future post, I will analyse a list of common potential side hustles and see the merits of each one.
What was your first side hustle like? What prompted you to start? How did it pan out? Please comment away!