You don’t need to create any goals when it comes to figuring out ways to earn more money. If you want to earn extra income and can do so in a way that you enjoy, then that’s great! Any amount – no matter how big or small – can help you with whatever financial goals you might have.
That being said, it can be helpful to create targets for yourself. For years, I’ve had sort of an unofficial goal of earning at least $1,000 per month from my various side hustles.
It’s an admittedly arbitrary number, but there’s some rationale to it too. Most obviously, it’s a nice round number that’s easy to wrap your head around. But I think it’s also a good target because it’s both a fairly audacious goal, yet also a completely realistic one that many people can achieve.
Here’s what I mean by it.
An Audacious Goal
Depending on your situation, making an extra $1,000 per month can seem like an audacious goal. After all, when you’re busy with other life obligations – work, family, etc – it can often be difficult to create time to earn extra income, let alone create what amounts to fairly significant extra income.
Indeed, $1,000 per month is a pretty big sum. That’s $12,000 per year of extra income – enough to fully fund two Roth IRAs. It’s even more when you think about what an extra $1,000 per month can mean to many people. The median household income in the US is currently around $68,000 per year. If you can add another $12,000 per year of extra income, you’ve now increased your annual income by over 17%. Most people aren’t getting 17% raises in a year, so it’s significant when you can add another $1,000 per month to your bottom line.
And an extra $1,000 per month has value even if you’re earning an above-average income. Take the example of someone earning $100,000 per year. A person earning that much that can figure out a way to earn an extra $1,000 per month can increase their yearly income by 12%. Even a person earning $200,000 per year can increase their income by 6% just by figuring out ways to reach this $1,000 per month goal.
The value of earning an extra $1,000 per month over the long term is significant as well. If you’re able to invest all of the extra income you make in low-cost, index funds, this is what you’ll have if you assume a reasonable 7% average annual rate of return:
- $177,000 after 10 years
- $526,000 after 20 years
- $1,212,000 after 30 years
That’s pretty extraordinary. If you start early enough, you can literally become a millionaire solely from the extra income you earn every month.
Of course, it’s a lot to ask someone to figure out a way to make an extra $1,000 per month out of thin air, let alone do it for years or decades. But here’s the interesting thing. It’s totally achievable for most people.
To many people, figuring out a way to earn an extra $1,000 per month might seem unrealistic. Whenever I think about bigger numbers, I always think it helps to break these numbers down into smaller chunks. So, instead of thinking in terms of making an extra $1,000 per month, you can instead think of it in terms of what you need to earn per day to hit this goal.
Here’s how it breaks down:
- $1,000 per month = $12,000 per year
- $12,000 per year = $32.87 per day
Making $32 or $33 per day seems much more realistic and achievable compared to a larger number like $1,000 per month or $12,000 per year. Imagine what it would take you to do that. If you can earn $32 or $33 per hour doing anything, then all you have to do is work 1 hour per day to hit that $1,000 per month goal. As busy as most of us are, I can almost guarantee that you have an hour that you can spare each day.
Spending an hour per day earning some sort of extra income is the way I tend to approach my day-to-day life. Most days, I can easily earn $30 or $40 in an hour by taking advantage of gig economy apps like DoorDash and Uber Eats. When you combine that with the more passive things I do to earn extra income, such as taking advantage of bank bonuses or using 5% interest savings accounts to get a better return on my cash, you can see just how easy it can be to earn an extra $1,000 in a month.
Maybe all of this gig economy stuff isn’t for you or the other schemes that I talk about don’t fit into the way you want to live. That’s totally fine too. What else can you do? It’s a huge world out there. With our phones and the internet, I can promise you that there are ways for you to make that extra $32 or $33 in a day. You just have to figure out what works best for you.
Making an extra $1,000 per month is a good goal for most people. It’s just out there enough to be slightly crazy – or audacious, as I’ve put it. But at the same time, it’s realistic enough that most people really can do this.
I’ve figured out my system to pull this off. For me, it comes down to integrating different gig economy apps into my day-to-day life to earn extra income. By doing this, I’m usually able to combine two things at once – getting paid while I’m off completing some other task too.
There are a million ways out there for you to make your extra $32 or $33 per day. Do what works for you. You may be surprised at how achievable an extra $1,000 per month can be. And it may surprise you just how valuable that extra money can be too.