The increasing cost of living, paired with the stagnant state of wages, has driven many people into working two to three jobs just to make ends meet. These other jobs (that are usually taken in addition to one’s full-time job) can be referred to as a side hustle.
Usually, people who work from 9 to 5 take on side hustles related to one of their passions. But even those with a small- or medium-sized business (SMB) can give this form of money-making a try. Investing in stocks can provide the extra boost needed to thrive in our current economic environment.
After all, who wouldn’t want to learn about ‘Passive Income Ideas to Make Money in Your Sleep’?
Why Business Owners Are Great Investors
Requiring Due Diligence
One of the most common mistakes investors make is doing too little due diligence, according to The Balance. Yet, SMB owners need to be very thorough in how they run their business in order to survive.
SMB owners are already used to taking everything into consideration to come up with an effective business strategy. Because of that, investing in the stock market allows them to apply the same due diligence skills to create a successful side hustle.
Understanding Strengths and Weaknesses
Being aware of your strengths and weaknesses can help you get a better frame of mind and create a plan to make your goals easier to achieve. This is the reason why businesses often do the ‘SWOT’ Analysis that analyzes one’s strengths, weaknesses, opportunities and threats.
When it comes to earning passive income in stocks, the same analysis can be crucial in achieving success.
Coming up With a Strategy
A strategy sets the direction and establishes the priorities for any undertaking. This is why businesses and stock market investors must have a solid strategy in place. Forbes suggests a good strategy will help you pick the right stock to invest in and allocate resources in such a way that the profits generated are above-average returns.
Benefits of Investing in Stocks to SMB Owners
Stock investment offers a way for you to grow your money while your company flourishes. By investing a part of your business’ profits in stocks, you can create further income on the side. All Business recommends putting your money in a place where it can earn a high rate of returnas this will help you earn more profit.
Opportunity to Network
Investing in stocks allows a business to branch out beyond its usual contacts. In FXCM’s guide to investing in stocks, one of the strategies they recommend is joining an investment club. The advantage of this is that investors are able to share information and learn about different stocks from each other. If investing in the stock market is a side hustle, it pays to get expert advice that will allow you to direct most of your focus on the running of your company. These investment clubs also help you network and meet contacts that could be useful in the future.
A Way To Diversify
As highlighted by Todd Lincoln on Medium, investing in stocks is a great way for you to diversify. Instead of just relying on your business for your income, you can earn money by buying stocks.
The money you earn can be used not only for yourself, but also for the business as it continues to expand. When your income is diversified, the risk of getting into financial trouble is reduced. This is why investing in stocks as a side hustle will give SMB owners more flexibility in how to run their business.
Nowadays, unless you are really high up the corporate ladder, a day job may no longer support a decent standard of living. But with the right mindset and attitude, anyone can find a side hustle where they can earn enough money.