The “You Economy” Explained

Visitors to my Facebook pages and website have begun to ask me about the “You Economy.” So here’s my take….

Success Magazine heralds the “You Economy” with headlines like, “Work, play, and live your life on your own terms,” and “The 9-to-5 Job is Over,” beckoning us to “take control of your time, happiness and money.” And consumer ride service Uber refers to their economic model as, “the side hustle,” meaning you can switch between “working, chilling and earning” by becoming a contract driver.

Despite this “new” excitement, the idea of a “You Economy” has been around forever. I used to know it as “moonlighting,” “freelancing,” “working a second job,” etc., and until about 2008 it basically meant adding to your full-time income by taking on additional part-time work. It happened a lot around holidays, or when you had a household emergency (needed a new water heater, washing machine) or vacation, or when an expecting father was preparing for the new baby.

But in 2008 the idea of a “You Economy” took on a bigger meaning. As the economy tanked and people lost their jobs, homes, retirement funds, etc., many were left on their own to find ways to replace full-time incomes. I didn’t have a full-time job for 19 months before I began teaching high school in 2010, and I survived by taking every freelance graphic design job and adjunct teaching position I could. For many, however, creating a full-time income based on their own skills and hustle has become a permanent change.

 

“For the first time since the days when most Americans were farmers,” says Josh Ellis, editor-in-chief of Success Magazine, “the vast majority of us will soon be self-reliant for income.”

And he’s not alone. J.R. Ridinger, founder, chairman and CEO of Market America | SHOP.com, has built his international business model so it’s owners (known as Unfranchise Owners) can actually earn money based on what they’re already spending.

“It’s plain to see in today’s economy you need more than a retirement plan,” says Ridinger, “you need a Spending Plan that will not only help you save money but also convert that money you spend into residual income!” Ridinger promotes his spending plan as “The Shopping Annuity,” saying it “turns your everyday spending into an investment – an investment in yourself, your team, and your UnFranchise Business!”

 

I’ve been in the “You Economy” for more than 30 years, supplementing and/or replacing my full-time income by teaching post-secondary night school, running a freelance graphic design business, and owning a string of internet franchises. Most of the time I traded time for money, working as many hours as I could to earn as much as I could on any given day. But like most people I ran out of hours before I earned enough.

When you explore joining the “You Economy” — and at some point, you will — there are several characteristics you need to consider:

  1. Find something you’re passionate about. If you like what you’re doing it’s easier to work through those “down” days (either you don’t feel like working, or you feel like you’re failing, etc.), and chances are you’ll be working longer hours for yourself then you ever did for a company so you should enjoy it.
  2. Find something that pays “residual income.” Like me, if you trade hours for dollars you’ll eventually run out of hours but never reach your financial goals. Industrialist J. Paul Getty said, “The key to wealth is to learn how to make money in your sleep.” For example, insurance agents sell you a policy and then make commissions every time you pay the bill. I’ve had the same car insurance agent for 39 years, and he’s made money on me that entire time on a policy he sold me once in 1977!
  3. Find something with “leverage.” You can only work so many hours a day, but what if there were several of “you”? Owning your own company and having others working for you increases how much you can make in an hour. For example, if you bill out employees at $100/hour and pay them $50/hour then you make $50/hour, too. And that’s per employee! Of course, owning a conventional business has several of its own undesirable traits (huge startup costs, managing employees, maintaining business hours. maintaining facilities and equipment, etc.). Find a way to leverage people without “hiring” them.
  4. Find something that’s sustainable! I see vape shops popping up all over the place. I consider that a fad. You can already buy electronic cigarettes in the gas mart; why would I invest in a brick-n-mortar location to compete in that market? Look for opportunities with everyday products that everybody needs and you’ll always have a market.

That’s enough for now. There’s more to the idea of the “You Economy,” and I’ll discuss them in future posts. If you have any ideas or comments, please let me know. I’m always looking for new information.

About Author: jspaone

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