Mele Kalikimaka everybody, it's Sam from Financial Samurai. I'm recording from Honolulu, Hawaii, where it's actually kind of rainy and very, very windy. But I'm here at home with my parents, whom I haven't seen in two years. And I gotta say, it feels so good to see them because they're in their mid 70s.

And you know, you just never know how much time you have left seeing your parents if they're around, or your friends or family. So let's not take our time for granted. This pandemic has obviously been a real damper for most of our lives, including my own. And with the latest Omicron virus spreading throughout the world, this thing is just going to continue.

But as we look at 2022, I think we're all just gonna have to accept that the virus will be part of our lives, it's going to be endemic. And we're just going to have to move on and live our lives knowing that there's never going to be zero risk, just like with investing, except for if you invest in a CD or money market account up to 250,000 per person, there's always going to be risk, but it's hard to put our lives on hold forever.

In this episode, I want to talk about having a day job and being an entrepreneur, because I've done both for a while now 13 years each actually on the dot. And I see the positives of both sides. I highly encourage all of you who have day jobs, stable income, health care benefits, retirement savings benefits, to look on the side a side hustle to try to make more money to try to do things that you like that could make more money.

This is something that I did starting in 2009. And about 2.7 years later, I was able to break free from my corporate job forever. But of course, entrepreneurship is not that easy. It's a journey of discovery. The hardest things to just start. It is after you start when you start learning and evolving and pivoting and developing your message, your product, your brand, and so forth.

It really is under the comfort of a stable job, where you can really experiment, take risks, and explore new subject areas when you don't need the money. And so as you develop those ideas and that business, over time, you're going to get more and more confidence where you might think one day, hmm, maybe it's time to take that leap of faith and do something new.

And I think you can think that way, once you've been able to replicate about a quarter of your annual gross income, and after about a half a replication of half your annual gross income, I think it's clear that the momentum is there. And you can really take some risks if you want to.

The greatest thing about the internet technology and being able to work from home is that we can leverage these things to make more money on the side. And the more money you make, the more you can save and the more you can invest. Each new income source you develop is like adding another engine on your jet.

And it becomes kind of addicting actually, where you're earning extra income, and you're saving extra money and investing more and you're seeing your wealth compound. It's part of the reason why on the one hand, you see some employees only work, let's say two to four hours a day because they can get away with being more productive at home.

And on the other hand, you're seeing other people who really want to make more and achieve financial freedom quicker, take on two jobs. I don't know if you guys saw that expose on the Wall Street Journal. But that person is also a financial samurai reader. And I asked him to share a guest post about how he's able to get two jobs, make double the money, have extra benefits, and get away with it.

Now, obviously, there's moral dilemmas involved. But the reality is, employers are being much more flexible with what employees can do today, than back when I was working. From 1999 to 2012, when I was working in finance, we had to submit this thing called the outside interest system, where if we were making money outside of the firm, we had to disclose it.

And most of the time, the firm would say no. But nowadays, I just talked to a person who works at Google, he's got a podcast, he is doing consulting, he's writing a book, he's making a lot of outside income, six figures worth of outside income while he's also working at Google, making six figures.

And that is pretty attractive. It's a really good power boost to help you on your way to financial freedom. Now, obviously, you can only keep this up for too long, because eventually you might burn out or you might get sick of one thing, as you see something else grow tremendously.

I'm not sure most people have a spending problem. You know, the media talks a lot about how we don't save enough and we buy stupid things that we don't need on credit card debt with an 18% interest rate. I'm sure a lot of people do this. However, I think what's more important to focus on is generating more income.

You have a spending problem, which I think can be more easily fixed or an income problem, which is a bigger challenge, right? Because it takes a lot more work to generate more income, more creativity, more risk, more action. So before you take a leap of faith, I want to highlight how much you need to make as a freelancer or as an entrepreneur to replicate your day job income.

So let's say your day job income is $100,000. I believe you need to make at least 130% to 160% of your day job income to replicate that income. In other words, if you're an entrepreneur or freelancer, you've got to make $130,000 to $160,000 to replicate the day job income of $100,000.

And why is that? Well, as an employee with $100,000 income, here are some things you might get. Retirement benefits, subsidized healthcare, paid time off, subsidized life insurance, short term and long term disability, employee ongoing training, you know, benefits such as going back to school part time. And also, you'll probably get automatic minimum raises every single year, especially with inflation so high right now.

In addition, here are some things you don't have to pay as an employee. Social Security, you pay 7.65%. That's your employee portion, whereas the employer also pays 7.65%. So if you take 7.65% times $100,000, that's $7,650. You don't have to play as an employee. Then there's state franchise tax.

This is in California, you pay $800 a year for the privilege of having your own business. Then you might have to hire a business accountant, a bookkeeper, then you might have to have capital expenditure to grow your business, travel expenses, meals, office expenses, and marketing expenses. All this stuff adds up to the point where, yeah, you have to make about 30 to 60% more than your day job income to replicate your day job income.

And that just is the way it is. But in return, you've got a business that is generating cash flow. Further, you can always sell your business as a multiple of revenue, or operating profits or net profits. So you have that one two punch that can help you build wealth.

And then finally, you get to be your own boss. But the irony is, and the funny saying is, I quit my nine to five job to be free to work 24/7. And this thing is so true, as I see here at the end of 2021, looking ahead into the first quarter of 2022.

The first quarter of any calendar year is generally the biggest quarter of the year, especially in finance. What are the top two New Year's resolutions everybody has? Make more money, get in better shape. And it's going to be like that probably for the history of mankind. So as an entrepreneur, you really can't rest during the winter holidays.

Because first quarter is so important. You got to make it count when it counts the most. For me, I'm thinking, well, what will my predictions be for the stock market, the real estate market and alternative assets for 2022. I've also got to come up with new ideas and new topics that I'll talk about beyond just investing, right?

Because personal finance is so much more than just investing in stocks, real estate and alternative assets. There's what to do with your money, how to raise your family, education, health care, just like an endless stream of topics that I'm trying to think about and plan ahead. So all of us can benefit.

Then I've got to think about marketing copy and how to market my new book coming out on June 28 2022 as well. That's going to be a lot of work. So as an entrepreneur, it's kind of endless. I've already gotten several out of office responses that said, hey, we'll be gone for the next two weeks.

We'll be back in the new year. And that is something you really have to be able to appreciate as an employee. Don't take for granted the ability to make money while on vacation. But perhaps more powerful and more beneficial for employees is the ability to switch off. Just turn that switch off of always go, go, go.

So you can spend time with your friends and family and relax. This is frankly something I've had a lot of trouble doing since I started Financial Samurai so long ago, and especially during the pandemic where I've got a family to support. So bottom line is there are positives to both sides of being an employee and as an entrepreneur.

And let us not take what we have for granted. I hope all of you all have a wonderful, wonderful holiday. Hopefully you're spending time with friends and family and really reflect on this incredible year 2021. I'm gonna do a lot of reflecting over the next several weeks. And I just realized this is officially the 100th episode that I've published on this podcast channel.

So thanks for sticking with me all this time. Refuse to quit. That's been my motto in 2020 and in 2021. No matter how difficult things get, refuse to quit. Thanks so much everyone. Happy holidays. And if you enjoyed this episode, I always love a positive review.