Every day, more and more people join the growing ranks of the gig economy as self-employed contract workers. The attraction is flexibility and independence. You’re your own boss, and you can take on more and more jobs as needed to pay the bills. At least that’s the theory.
Continue Reading Below
Unfortunately, what starts out sounding like a pretty cool lifestyle can turn into a never-ending treadmill of long-hours and mounting debt. It’s no substitute for a career, but that doesn’t seem to deter millions – particularly Millennials – from going for it. And before they know it, they’re stuck.
On the heels of successful on-demand apps like Uber and Airbnb, what began innocently enough as the “sharing economy” has morphed into a massively hyped trend that appears to be consuming more and more of the labor force. Whether the gigs are online, offline, or both, the model is a boon for employers and a bust for workers.
For an eye-opening example of how this sort of thing can go south on you, check out Spike TV’s Life or Debt, where former sales executive Victor Antonio helps families restructure their finances, sort of like a turnaround specialist might restructure a failing company. The show’s sort of hokey but Antonio is the real deal.
ICYMI, last week’s episode featured a hard-working single mom who just kept adding more and more jobs – driving cars, renting rooms, cleaning homes, online marketing – until she was spread so thin that she actually had eight different gigs and still couldn’t make ends meet.
When Antonio finally got her to detail her income and expenses for each gig, it turned out that she made the most money doing the one thing where she really had talent – staging vacation rentals – while all the other gigs were burying her in hidden expenses with minimal return on investment.
So she quit all the gigs, got a job doing what she does best, and ended up doubling her income, working far fewer hours and getting out of credit card debt … all in just 90 days. Now she has an exciting career in a growing field instead of an endless treadmill of labor, debt and despair.
I wonder how many people would watch that show and think, wouldn’t it be great to have the opportunity to spend four days with a financial expert who knows just how to help me turn my life around? The thing is, nobody needs that.
Let me explain something. Companies may have several different product lines or service businesses, but they’re always searching for one thing: a competitive advantage in a big, high-growth market. That’s the Holy Grail of business. For Apple it’s the iPhone. For Intel it’s processors. For Wells Fargo it’s banking. For Toyota it’s cars. Believe it or not, none of those companies started out doing what they ultimately became known for. But they focused on the growth opportunity they were best suited for.
It’s exactly the same for individuals and their careers.
If you want to get ahead in this world, you have to find the one thing you love doing, become really good at it, and, if it’s in a growing field, you’ll no doubt be remarkably successful. Granted, it takes time to find that one opportunity, but if you keep searching and don’t settle, you’ll find it.
The other aspect of self-employment in general and working several different gigs in particular that most people don’t get is all the hidden expenses. That’s why companies love that business model so much: It allows them to offload capital and overhead expenses onto the worker.
People have a funny way of remembering how much they get paid while forgetting how much they had to spend to get it. Take ride sharing, for example. You have to pay for gas, maintenance and insurance. And each gig has its own unique set of expenses. Believe me, they add up fast. Simple math, folks.
When it comes to work, everyone should be doing the same thing that well-run companies do: find the intersection of what they do best and a growing market opportunity. Once you think you’ve found it, focus on doing just that.
The more time you spend doing multiple undifferentiated gigs, the lower your chances of ever finding that successful career and the higher your chances of falling into a financial hole you’ll never be able to climb out of.