YOU THE ECONOMY OF Discover Your Inner Entrepreneur and Recession-Proof Your Life KIMBERLY PALMER American Management Association New York • Atlanta • Brussels • Chicago • Mexico City • San Francisco Shanghai • Tokyo • Toronto • Washington, D. C. Bulk discounts available. For details visit: www.amacombooks.org/go/specialsales Or contact special sales: Phone: 800-250-5308 Email: [email protected] View all the AMACOM titles at: www.amacombooks.org American Management Association: www.amanet.org This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Palmer, Kimberly. The economy of you : discover your inner entrepreneur and recession-proof your life / Kimberly Palmer. pages cm Includes bibliographical references and index. ISBN-13: 978-0-8144-3273-0 ISBN-10: 0-8144-3273-5 1. Part time self-employment. 2. Entrepreneurship. 3. Small business. I. Title. HD5110.P35 2014 658.1'1—dc23 2013016370 © 2014 Kimberly Palmer. All rights reserved. Printed in the United States of America. This publication may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of AMACOM, a division of American Management Association, 1601 Broadway, New York, NY 10019 The scanning, uploading, or distribution of this book via the Internet or any other means without the express permission of the publisher is illegal and punishable by law. 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Printing number 10 9 8 7 6 5 4 3 2 1 Contents ACKNOWLEDGMENTS INTRODUCTION: Do the Hustle CHAPTER 1: Give Me a Reason CHAPTER 2: The Master Plan CHAPTER 3: Banking on It CHAPTER 4: Finding Friends CHAPTER 5: Putting It out There CHAPTER 6: Time Is Money CHAPTER 7: Dust Yourself Off CHAPTER 8: Karma CHAPTER 9: Endgame EPILOGUE: The Future of Side-Gigs THE ECONOMY OF YOU HANDBOOK: Exercises and Worksheets APPENDIX A: The Top Fifty Side-Gigs APPENDIX B: Star Side-Giggers APPENDIX C: Five Common Pitfalls to Avoid INDEX ABOUT THE AUTHOR FREE SAMPLE CHAPTER FROM THE ACCIDENTAL ENTREPRENEUR For Kareena and Neal Acknowledgments THIS BOOK WOULD NEVER HAVE GOTTEN OFF THE GROUND WITHout the generosity of the many side-giggers who shared their experiences with me. I'm so grateful to each of them, for talking with me, sharing their days with me, and allowing me to tell their stories. I'm deeply thankful to my colleagues at U.S. News & World Report, especially Kim Castro, for providing such freedom and support to write about the constantly changing world of personal finance. The idea for this book grew out of a series of stories on mastering the new economy that I wrote for U.S. News, which is also how I first met many of the side-giggers mentioned in these pages. Many researchers, librarians, and fellow reporters also helped me as I tracked down key data on moonlighting. I especially thank Steve Hipple at the Bureau of Labor Statistics and Jenny O'Shea at U.S. News, who knows her way around the Oxford English Dictionary better than anybody (and she has the magnifying glass to prove it!). Ever since first meeting my agent, Melissa Sarver, I've felt lucky to know such a ceaseless advocate for books and writers. Her ideas, energy, and help made this book possible. I also thank the wonderful team at AMACOM, including Irene Majuk, Debbie Posner, and Michael Sivilli, and especially my editor, William Helms, for believing in this book and providing constant feedback, suggestions, and encouraging Tweets. My family gives me the love and support that keeps me going—my parents, Chris Palmer and Gail Shearer, have done so since birth, along with my sisters, Jennifer and Christina Palmer. My grandmother, Janet Shearer Johnson, another source of unconditional love, also helped me with my research by sharing news stories on side-gigging with me. My husband, Sujay Davé, has been my best friend and biggest supporter ever since we met, and our children, Kareena and Neal, give me the motivation to keep going—and also excellent reasons to stop and play. Introduction: Do the Hustle I REALIZED SOMETHING HAD TO CHANGE AS I WAS DRIVING HOME from work on the way to pick up my daughter from preschool. I had spent much of the day missing her—her giggles, her made-up words, her new attempts at running—and even though I enjoyed my work projects, my mind had frequently wandered. If only I had more control, I thought, I could rearrange my schedule so I worked intensely in the mornings, when I was most creative and productive, and spend afternoons playing dress-up and pretending to be a monkey. Then, I could complete the day's work after her 7 p.m. bedtime. To make this happen, I needed two things: more power and more money. As flexible as my boss was, she couldn't grant me a half-day schedule without disturbing the well-oiled machine of office life. And I couldn't risk rocking the boat too much because I needed my salary—badly. The sorry state of the journalism industry (and the economy in general) was impossible to ignore; meanwhile, the demands of our mortgage, childcare costs, and college savings weighed on me. Because of those major (and relatively new) responsibilities, I worried constantly about getting laid off; it was one of my frequent nightmares. The only way to really get what I wanted was to go outside the traditional economy that runs on full-time jobs with set hours. I needed to become financially independent by earning extra money on top of my full-time job, so I was no longer vulnerable to a layoff and could, eventually, work for myself and set my own schedule. It was really about so much more than money. I wanted to be in control of my life. Soon, I started seeing people on a similar quest everywhere: When my favorite deli down the street from my office closed down, the owner's son ramped up his own custom cake business, which let him keep his customers and replace his income stream. In my own office, I discovered a coworker who was running a social media consultancy, another who ran a print shop, and a third who maintained a productive honeybee farm in his spare time. Through my work reporting on the economy, I met others who also maintained their side-gigs and full-time jobs alongside each other indefinitely, creating a stable, hybrid income for themselves. Many realized, as I did, that their full-time jobs could disappear at any moment, and they were keenly aware of how devastating that would be. They wanted to protect themselves and their families. A laid-off architect posted a few state-shaped cutting boards she had made for her wedding on the handmade marketplace website Etsy.com, and within months had sold thousands and turned her hobby into a full-time business, giving herself and her family more job security than she ever had as an architect. A bookstore manager, frustrated with her long hours and $28,000 salary, realized she was never going to afford the kind of life she wanted for her family without making a drastic change. So she launched her own entrepreneurial coaching business aimed at creative and crafty types. Within two years, her annual income shot to $150,000, and she gained complete control of her schedule. These aren't your typical entrepreneurial success stories. Most of us don't even think of ourselves as entrepreneurs, and we didn't start out with the goal of becoming self-employed. (Some of us never plan to leave our full-time gigs.) For the most part, we were forced to invent a new plan for ourselves after the original one began to wobble. These are our stories of survival. Taken together, they underscore a fact about our economy that few people can afford to ignore any longer: We all need more than one source of income today. Relying solely on a single employer is a surefire way to end up struggling, as so many Americans do. Even as the country crept out of its most recent recession, over 8 percent of Americans looking for work still find themselves unable to land jobs. For young people and seniors, the unemployment and underemployment rates are even higher. And those of us lucky enough to hold onto our jobs face pay cuts, benefit reductions, and longer hours, along with the unsettling feeling that those jobs could disappear at any moment. A 2012 Gallup survey found that close to three in ten workers worry they will get laid off, while four in ten fear a reduction in benefits. It's hard to go about our normal lives, picking up groceries and planning vacations, with that kind of anxiety hanging over us. At the same time, life keeps getting more and more expensive. The prices of