Nick Loper is an author, entrepreneur, and a lifelong student in the game of business. His latest role is as Chief Side Hustler at SideHustleNation.com, a growing community, and resource for aspiring and part-time entrepreneurs.
Nick’s been making his living online since before it was cool. Along the way he’s picked up a thing or two about small business, marketing, and outsourcing — and is happy to share the experience with fellow entrepreneurs and those working hard to make their side hustle dreams a reality. Nick does this through his blog, top rated podcast, books, and courses.
Nick lives in the Bay Area with his wife and son.
In this episode, Nick shares what finally gave him his “why” behind living well within his means, what he did when his home’s value fell below what he’d paid for it and how his credit score was affected, his three tiers of financial independence, how to get involved in the gig economy and start your side hustle today.
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Just Because You Can It Doesn’t Mean You Should
If you allow your spending to rise as your income rises, you may find yourself in trouble in the future. Nick believes in closely monitoring his spending and says that nobody should assume that a dollar today will be equal to the same dollar tomorrow.
Nick’s parents raised him to be a saver, teaching him that you don’t have to spend money just because you have it.
But it wasn’t until 2013, when he discovered the Mr. Money Mustache blog, that Nick began to develop some tangible goals for saving money. Gaining an understanding of how certain rules can be applied to retirement and saving goals has given Nick something to shoot for.
Learning Lessons Through Side Hustling
Around the time that Nick found Mr. Money Mustache, his wife was working as a mechanical engineer, (which she still does) and Nick had quit his day job and was running his first side hustle full-time.
That hustle, a niche specific (shoes) comparison shopping engine, had been NIck’s first introduction to the world of online marketing and making money on his own.
When the ups and downs of the business got too heavy on the downs, he started a few more side hustles. Most of those flopped as well but a couple did well and are still going.
Nick had an internship in 2004, while still in college, with an online shoe business which provided him with his first exposure to affiliate marketing, Google Adwords, SEO, etc. After graduation from college, he went to work for the Ford Motor Company, but with an eye toward starting his own gig as soon as possible.
Nick had managed to make it through school without incurring any debt so he was using his day job money to invest in the side hustle and build it up. He was pretty confident that his shoe business was going to work out but if not, he had the day job for security.
I was curious about why Nick got into the shoe business specifically as he didn’t really strike me as a shoe geek the times I have been with him in person.
And sure enough, he says he only bought 3 pairs of shoes from the company all the years he had the business.
He didn’t really choose shoes; they chose him in the sense that he had the internship and already had a foot into the business. He was making 10-20% commission on the shoes he was selling, which over the years decreased and was one of the main reasons the business eventually died.
3 Tiers of Financial Independence
We mentioned that discovering the blog Mr. Money Mustache was a turning point for Nick when it came to setting goals for the future and figuring out why he needed to save money and spend less than he was earning.
He began to see financial independence in 3 distinct tiers-
- You have a day job. You can pay your bills and you aren’t dependent on your parents or anyone else for financial assistance.
- You own a business. You are in control of your income and no longer dependent on a day job.
- You live off investments. You are living off of dividends and interest or you’ve outsourced your business and it is bringing you an income without you having to work at it.
Nick and his wife are currently firmly ensconced in Tier 2. Nick’s business is covering their expenses but he is still working the business.
Building a Business to Support Yourself
Before we jump into how Nick built his business to the level of Tier 2, he wants to be clear that it is possible to skip Tier 2 entirely. There are definitely people who make enough at their day job to invest money and are able to jump from Tier 1 straight to Tier 3.
Now that Nick’s shoe business has died, what is he doing to make money?
He finds himself in the position of having several different income streams that all fall under the side hustle umbrella. Even though the shoe site is dead, he still has other affiliate sites that bring in money. He’s done some self-publishing and freelancing, as well as teaching courses online.
In addition to those sources of income, he has dipped his toes in the Amazon FBA world. His largest source of income now is the Side Hustle Nation, with podcast sponsorships and affiliate income.
How to Cover the Basic Needs with Multiple Income Streams
One of the things that scare people about starting a business or pursuing multiple income streams is the stuff that most day jobs help to provide. Things like insurance, retirement savings, etc. This is definitely something you need to consider when choosing an out-of-the-box option for your income.
Nick hasn’t had to deal with the insurance issue since his wife still works at her day job so they have coverage through that job. He is aware that as he gets older, the $50 he used to pay per month as a young 20-year-old is no longer realistic. That is a challenge he hasn’t had to face yet though.
As far as retirement savings go, he has a self-employed 401K. The great thing is that you can do profit sharing out of your own company for a company match so if you don’t need the cash to live on, it’s a great plan to defer a portion of that while you can.
Sharing Finances in the Household
Nick mentioned that his wife still works as an engineer so she has a regular salary that she contributes to the household income. Nick has several income streams. How do they balance all of those and still work together?
They do have separate accounts, as well as a joint account for shared expenses such as rent, childcare, groceries, and other typical expenses. They’ve run it this way for the last 10 years that they’ve been married but Nick would like to move in the direction of combining things.
His wife is still firmly in the separate accounts category so Nick says they are working on slowly combining things while still having some independence in their spending and account management.
Traveling on a Budget
When it comes to spending money, neither Nick nor his wife are big spenders, although they aren’t extreme savers either. While friends may buy $8K televisions, Nick is thinking about how much travel they could do for that same $8K.
Nick is very much into the travel hacking game and says he actually feels guilty if he’s spending money that isn’t going toward some kind of sign-up bonus. With each of them having both personal and business cards, they manage to rack up airline miles fairly quickly.
To save money while traveling, they tend to stay in Air B&B’s wherever they are.
How to Start a Side Hustle
I couldn’t have Nick on the show without asking him about side hustles. I know that many of you are interested in ways to make extra money, whether that’s to pay down debt quicker or build up your savings faster.
Nick shared with us 3 “gateway drugs” to starting a side hustle.
1) Peer to peer economy.
We’re talking Uber, Airbnb, Dog Vacay, etc. Basically any opportunity to connect and do business with your neighbors empowered by apps.
20 years ago, if you wanted to rent out a room in your house, you had one option – the newspaper. Now, you can advertise to people all over the world through an app.
There are sharing economy apps for just about every niche you can imagine and there is a low barrier to entry for most of these.
2) Skill-based jobs.
This involves selling any skill you may have to others. If you want online work, check out places like Upwork, Fiverr, Wyzant, Voices, and so many more for every niche you can think of.
While the peer to peer economy is based on a downward pricing trend (meaning you don’t need specialized skills to do these jobs so the money may not be as great unless you live in an amazing place like the Swiss Alps and rent out your apartment or a room as an Airbnb), these skill-based offerings can be much more lucrative because you are more in control of what you charge.
3) Buy low, sell high.
This business model is as old as the hills and nearly everyone has heard of it. Walmart uses this model as does Amazon as does every store in the history of stores.
Whether you’re shopping flea markets on the weekend and reselling the stuff you got for cheap or buying things on sale and reselling them on Amazon, buy low and sell high is a game that virtually anyone can play.
If you remember, Nick actually has Amazon FBA as one of his own income streams.
This is as simple as opening a free Amazon seller account, downloading the free Amazon seller app, and scanning barcodes while you’re out shopping to see what the item is going for online. If the ranking is under 100,000 and you can double your money, grab that thing and send it into Amazon and sell it.
Now you may think that none of these things feels right for you but I would encourage you to spend some time really thinking through the concepts behind them and try to find a way that one or more of them could work for you.
Once you get your first experience in the entrepreneurial world and begin seeing things in the light of working for yourself, you will be hooked. Your first idea typically leads to more and bigger ideas.
“The best opportunities aren’t visible until you’re already in motion.” @nloper #sidehustleClick to tweet
1:50 “Just because you can doesn’t mean you should.”
6:30 Learning lessons through sided hustles that failed and those that didn’t
10:00 Out of all the things to sell, why shoes?
14:15 Buying the townhouse that would later sell in a short sale
16:15 The 3 tiers of financial independence and where Nick is now
18:00 The steps Nick took to build his business into one that could support his family 19:30 Insurance, retirement, and savings when you have multiple income streams 21:00 Budgeting and what to do if the income stops coming in
23:55 Sharing the personal finances in Nick’s household
26:10 Saving money on travel expenses
29:20 Preparing financially for a new addition to the family
31:40 How can you get started on your own side hustle?
40:00 Why Nick is slow to invest and how he makes money off his money
42:55 Reaching the third tier of financial independence
Links/Terms/Concepts from the Show
- Mr. Money Mustache
- 4% rule
- Go Curry Cracker
- Side Hustle Nation (Blog)
- Side Hustle Show (Podcast)
- Affiliate marketing (how I make money on this blog)
- Great by Choice
- “Fire bullets before cannonballs” (video explaination).
- Teaching on Udemy
- Selling on Fiverr
- Amazon FPA
- AWeber (email marketing service)
- i401K aka Solo 401k
- Podcast editing service (the one I use)
- Web hosting (Bluehost)
- Credit card award travel
- 529 college savings plan
- Airbnb (list your home or room for rent)
- Wyzant (tutoring)
- Carrie Olsen (Voiceover actor)
- The Flea Market Flipper
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This show is part of the FinCon Podcast Network and was produced by Steve Stewart.