Investments - The Utimate Side Hustle

The media likes to encourage us to take on side hustles.  But they neglect to mention the most lucrative side hustle of all.

I tend to read a lot less of the news these days - or at least, I try to.  All of the articles to designed to get you all riled up over nothing.  Headlines are designed to get you to click, often by asking questions (which can usually be answered "No") or leaving out facts in the headline to get you to click to find out what the answer is.

They put up an article like "billionaire so-and- so thinks this about the proposed tax increases!"    So you click on the link and it turns out that he's in favor of them.  You could have just put that in the headline, but of course we wouldn't have clicked on the article.  I don't feel like I'm being informed by the sort of thing - I feel more like a rat in a Skinner box being prompted to push a lever in exchange for a food pellet.

And I am getting sick and tired of the Skinner box.

The financial news is the worst of all.  They seem to promote the worst sort of investments, and the shouting guy makes a regular appearance every week touting this or that "must buy" investment.  But lately, it seems, that these financial news sites are prompting me more and more to take on "side hustles" so I can earn more money to make up for the shortfall after I invested in the shouting guy's lousy stock pick.

It's funny, but I actually thought about taking out some sort of side job at one point, recently.  I ran into a friend of mine at the Board of Elections, and I was surprised to find that even though he's "retired" he is working part-time for the Board of Elections transporting documents.  He told me he's doing a number of things, working part-time jobs and even driving as an Uber and Lyft driver.

You can never be too young, too thin, or too rich, or so they say.  Although being really young has its disadvantages, as you tend to be very ignorant and impulse-driven at that age.  And yes, you can be too thin, just ask Karen Carpenter.

But in retirement, you always worry about running out of money, and sometimes the idea of having some sort of side job does seem attractive.  I looked into driving for Uber or Lyft, going so far as you can just sign up for the Lyft program, mostly as an experiment for this blog.

The process is pretty straightforward.  You enter all of your personal information and upload a copy of your driver's license.  Once they approve your car and approve you, they do a background check which takes a few days . Then you're approved to drive and all you need to do is load the app on your phone and activate it and look for people to drive around.

The problem with this model is that you basically have to turn it into a serious part-time job, and maybe even a full-time job.  People need rides at all times of the day or night, so you can't just turn on the app when you want to and pick up the occasional rider.

Maybe that might work in a more crowded urban area, but where we live there are few fares near my home, and thus I could turn on the app for hours on end and not get any potential rides.  And since my personal life schedule is irregular, I can't just leave the app on for hours on end as I have obligations and things to do, which interfere with my ability to drive people to their destinations.

It's a great deal for someone who has a lot of time on their hands, like a student who doesn't mind sitting in their car for hours on end, studying or working on a term paper, while waiting for a fare.   But for most folks, it would seriously disrupt their lives, unless they wanted to make a career of it.

For example, Mark was at the dentist, and I was waiting for him.  So I turned on the Lyft app, just out of curiosity.  Usually, nothing ever happens, as no one in our small town wants a ride.  But this time, a ride popped up.  Someone wanted a ride from the Dunkin' Donuts, and I had fifteen seconds to respond to this.  This took me by surprise, and I had no idea where they were going.  Since I was waiting for Mark to get out of the dentist, I really couldn't give them a ride.

Another time, I turned the app on in Jacksonville, which is a pretty large urban area.  No rides popped up, but it noted that there was a 30 minute wait at the airport with five people in queue.   They have a waiting parking lot at Jacksonville Airport which is a wonderful invention if you ever have to pick somebody up there.  And I suspect some of the people waiting in that parking lot are Uber or Lyft drivers waiting for fares.  So there is competition in this business just as there is in the taxi business - whose taxis line up at the airport as well.

If you wanted to take this on as a so-called side gig, you have to spend hours every day waiting around to drive somebody somewhere.  You can't just sit on the sofa in your house and watch TV and play video games, and hope that somebody nearby where you live needs a ride.

Then there was the problem of insurance.  If your insurance company finds out you're driving for Uber or Lyft, they're likely will cancel your insurance.  Yes, Uber and Lyft provide their own million-dollar liability coverage and even collision coverage for your car while you're driving with a passenger inside.  However, this doesn't cover you when you were driving to pick up at the fare, which arguably is commercial use of your vehicle and that's not covered under your ordinary consumer policy.  You wreck your car on the way to get a fare, and it's not going to be paid for.  And you still have to make all those loan payments.

It is like my friend who wrecked his new Jetta delivering pizzas.  The cop noted on the accident report that he was delivering pizzas, and the insurance company declined to pay for the totaled car.   48 more payments to go, on a car that no longer exists.

Now some insurance companies, including GEICO have offered "hybrid" policies that cover your personal use of the vehicle and allow you to "ride-share" as well.   But they don't offer this policy in my State at the present time, and you can bet it would be a much more expensive policy to buy if they did.   If I ended up getting such a policy, it would force me to drive for X hours a month just to pay for the policy.  You end up in the trap of many a high-school student - getting an after-school job to pay for a car, so you can have a car to get to your after-school job.   You really aren't getting ahead.

So there's a definite risk in taking on a side gig like that.  You're risking having your car wrecked and not paid for.  Not only that, like with pizza delivery, as I discussed before, you're basically selling your car little bits at a time to Uber or Lyft.  Most people don't realize how much it cost to run a car - the AAA estimates it runs almost a dollar a mile - sometimes more.

That's why I had to laugh when I turned on the app the other day and it said there was a ride available 17 miles away.  I would have to drive 17 miles to pick up this person, which would take the very least 17 minutes, but more like a half hour to 45 minutes, as we have a lot of low-speed traffic zones here.

But the real joke is that I would have to spend $17 of my own money using up my car just to pick up the fare, which could only come out to maybe $20 or so.  Not only would I not be making any money from this side hustle, I would be losing money.  Lyft just doesn't work in areas with low population density.

I can afford to walk away from that side hustle because I have some money in the bank - which is the best side hustle of all.  Once you have money, it earns interest or pays dividends, that generates income for you every year without you having to lift a finger.   Having investments that pay off is the ultimate side-hustle.

Unfortunately, it seems like a lot of the young people today who are getting into the side-hustles are also investing in things that never pay off.  I read online about things like Bitcoin and these sketchy stock IPOs and other pie-in-the-sky ideas, and it seems that most of the people who are "investing" and these things are very young people that are usually in their 20s - who hope to strike it rich by putting a few dollars down on a very long-shot bet.

Not only are they almost guaranteed to lose all of their money, they're passing up a sure thing in the process.  Maybe putting money into a mutual fund in your 401k isn't sexy or trendy - and it won't generate a lot of positive feedback from your peers as buying Bitcoin would - but over time it does accumulate into a nest egg that will pay you back, year after year, decade after decade, more than any side-hustle possibly could.

This is not to say you shouldn't take on a side-hustle, particularly when you're young and have the energy.  At one point in my life when I was in my mid-twenties, I was working full-time at the Carrier Corporation, going to night school, delivering pizzas, working is assistant sex educator at Planned Parenthood, and tutoring calculus - all at the same time.

Needless to say, that was pretty exhausting, eventually I had to give up a couple of the gigs. But even then I was still working two sometimes three jobs at a time.  I eventually gave up the pizza delivery driver thing, but then I ended up working at United Parcel.

You can do that when you're young - but it gets a lot harder as you get older.  That's another good reason to take that money that you make from those side hustles and invest some of it in something solid that will pay you back over time.  Because when you get older, it will become harder and harder - if not downright impossible - to do "side hustles" as your body ages.

But back then, those "side-hustles" allowed me to finish my Engineering degree, which turned out to be a good investment for me.  And maybe that is the point - if you are going to go down the side-hustle route, there had better be some payoff for you, other than more income to blow on drugs, beer, stupid investments, or car modifications.

Of course, a lot has changed since those days when I was working those side jobs.  Today, it seems like everyone is working a plethora of part-time jobs as we've made it very difficult to hire people full-time.  If you hire someone full-time, you have to pay for their health insurance (by law) which could easily cost $1,000 a month - or more.   On the other hand, if you hire them part-time, they will be poor enough to qualify for a full subsidy on Obamacare which will cost the employee $0 a month and also cost the employer $0 a month.

This isn't some sort of abstract higher mathematics, it's basic two plus two equals four.  One of the failures of Obamacare is that it jacked insurance rates through the roof.  Obamacare pays for just about everything, including mental health treatment and trans-gender reassignment surgery.  It's also fueled the opiate epidemic as people can easily get prescriptions for opiates, paid for mostly by Obamacare, and then turn around and sell the pills on the street for ten times their face value.  Sadly, this form of drug-dealing has become the ultimate side-hustle for many young people today.

Part of me thinks there's something disturbing about these articles in the financial pages that encourage young people to take on side-hustles.  It seems that the powers-that-be are encouraging us all to work at these crappy minimum wage jobs in order to get ahead.  And that works out very well for the internet billionaire who is building a business model out of taking low-wage jobs and then putting them on the Internet and skimming a piece of each transaction.

That's all these "disruptor" business models are.  They are not "tech" companies, but tech-that-is-not-tech whose "disruption" of the market is mostly to corner the market with monopoly practice (by achieving critical mass, and thus excluding most competition) and by taking what once were career jobs and turning them into part-time McJobs.

Silicon Valley - taking shitty jobs and making them shittier, since 1989!

I mentioned before that if I was the ruler of a foreign country, I would throw Uber and Lyft out entirely.  What they have done is not to revolutionize the taxi industry, but rather deregulate it, without the permission of the host country.  These new freelance taxi drivers are each giving a portion of each fare to a company located in Silicon Valley, America - siphoning off cash from their home country in the process.

You may think that government officials in places like Pakistan or India are being unreasonable by restricting or not allowing ride-sharing companies to do business there.  But when you think about it there really is no upside for those host countries, and the net result is a transfer of a share of the taxi business to a company located thousands of miles away in a foreign country.  That foreign country being, of course, the United States of America.  What's not to like for the locals?  Their existing taxi system kept 100% of the profits in their home country.

But even in this country, it seems like a lot of these new business models are little more than new ways to create minimum wage jobs.  For example, we are told that delivering food is some new high-tech thing.  New companies are entering the market all the time to deliver fast food or groceries or whatever.  In the cities, we see people on bicycles with these giant boxes on the back, delivering food to people.  These are not high paying "tech" jobs are being created here.  And the risk of getting hit by a car while you're riding your bicycle through the city is quite high.

In California, we stayed overnight in an RV park across the street from an Amazon warehouse.  Most of our fellow "campers" were living in dilapidated motorhomes or trailers and crossing the street every day (or night - all three shifts) to hump boxes for Amazon - no doubt making little more than I was making at UPS back in 1986.

The Jeff Bezos of the world are encouraging us all to take on these crappy jobs.  Indeed, he has a new delivery system that uses people and their cars, Uber-style, to deliver packages to customer's homes on the same day.  It's a low-wage job, and it wears on your car as well.  And to get these delivery gigs, you have to load an app on your phone and then spend all day hanging out in the parking lot of the Amazon warehouse, hoping Mr. Bezos throws you a crumb.

It's yet another low-wage job that makes a lot of money for Amazon.  And since Amazon owns a major media outlet - the Washington Post - they can write articles encouraging people to take on these sort of low-wage "side hustles" to make ends meet.   It is a perfect feedback loop.

I am not picking on Bezos - well, I am - but it is worthwhile to point out that Amazon isn't some special "high tech" company that invented internet retailing.   Before, during, and after Amazon, there were other online retailers.   But Amazon managed to achieve that "critical mass" much as Facebook did, which in turn has forced a lot of competitors out of the marketplace.   They have created a virtual barrier to entry for newcomers, as they have sewn up the audience.   Search online for any product, and odds are, you end up with the first five hits being plugs for Amazon.

My recent search for container seals for Oggi jars was nearly derailed this way - every hit was for Amazon, and Amazon didn't have what I wanted.   Too bad there is no way to Boolean search Google for "Jar Seals NOT Amazon, please!" and find out what actually exists out there.  I suspect money is changing hands here somewhere, as the Internet knows what I am searching for and people pay to direct results to them (whenever I click on something to buy from Google, I see a URL for "Google Lead Services" first - the advantage of having a slow internet connection).  Unless you type in the URL for the company you are looking for, Google gets a penny or two of your transaction.

It was only after wading through pages of Amazon shit hits that I was able to find the website for the company that actually made the containers.    And yes, over a year later, I still get hits on Google and YouTube (the same thing) for knitting supplies and knitting videos.  We are all being shilled, big-time, on the Internet these days.

What perhaps is really outrageous about all of this - and I'm starting to sound like one of those Democratic Socialists - is that many on the Left embrace these Silicon Valley gurus, because they donate money to liberal causes.  People like Jeff Bezos and Elon Musk are lauded by many as being hip and with-it, developing green products for us all and paving the way to a better future.

Meanwhile, the large corporations that have been in existence for decades are castigated for being big mean old businesses.  Mary Barra, a former classmate of mine and President of General Motors is vilified for closing down money-losing factories.  What people on the Left fail to realize is that these old-line companies have always provided excellent benefits for their employees and pay far above minimum wage or even the $15 minimum wage proposed by Bernie Sanders and Alexandria Ocasio-Cortez.  These mainline companies were engaged in a form of corporate socialism long before even I was born.  Of course, today, many of these companies can no longer afford it, but nevertheless treat their employees far better than these so-called "tech"companies.

But to hear some on the Left tell it, GM is a big, bad company for paying its workers $30 an hour and offering to relocate them to a new factory when they close an old one.   Bezos, on the other hand, is a hero for union-busting and paying low wages for part-timers.   Does anyone see why Trump got the votes in the rust-belt and Hillary did not?   The Democrats have abandoned Johnny Lunchbucket and his pals, in favor of these coastal "tech entrepreneurs" whose "tech" is little more than delivering pizzas.

Something is amiss here. The real people exploiting the working class are not the traditional Fortune 500 companies.  Indeed, most of them pay well above minimum wage - even McDonalds.   One of our new Democratic Socialist Representatives recently bashed McDonald's for paying employees only $7,000 a year.  However, she failed to realize that this $7000 number was for someone working part time in Poland of all places.  McDonald's was quick to point out that their average worker makes over $11 an hour, which is well above the minimum wage.  They beat up McDonalds, but give "tech" companies a free pass, because the tech companies donated to their campaigns.

It's fashionable to bash McDonald's but not fashionable to bash Amazon, even though Amazon probably pays about the same amount to its employees and works them twice as hard.  Or fill-in-the-blank with whatever darling of Silicon Valley this week is hiring people to do something that used to be a career but now is a minimum wage part-time job on the internet.

You know I don't believe in conspiracy theories, but I think we're being snookered here.  We're being told to hate the old-line companies which actually treated their employees fairly well - that is until venture capitalists take over these companies and gut their pension plans - another part of our "new economy" and disruption.  A lot of these old-line companies still exist, and they still pay their employees reasonable salaries and benefits.  Yet they are held out by the Democratic Socialists as being boogeyman of the far-Right.

Meanwhile, these so-called "new economy" companies with their billionaire owners are lauded by the left because of their donations to Democratic party and other leftist causes, along with their tax-avoidance "charitable foundations."   But the people on the Left fail to realize the same Benevolent Billionaires are also exploiting their own employees.

It would seem that the people on the left are love with their abusers.  Stockholm syndrome strikes again!

UPDATE:  I started writing this a few days ago, before Ms. Ocasio-Cortez supposedly chased Amazon out of Queens.   Of course, the jobs she chased away were not the low-wage warehouse jobs, but cushy white-collar corporate jobs that would have added to the economy of what was historically, one of the more depressed boroughs of New York City.

(Perhaps also, Amazon realized there are a lot of empty office buildings in Crystal City (Arlington Virginia - former home of the Patent Office) and also a lot of tech workers in the DC area, where the cost of living is far less than that of New York City.   To do business in New York City and build an office complex there, you would have to deal with the Unions and the Mafia - but I am being redundant.  No wonder Cuomo wanted it - he no doubt got a "taste" of the action!)

But more than protesting low-wages and union-busting by Amazon, I think there was pushback about granting huge tax relief to one of the world's richest corporations.   The people running a small business down the block don't get tax relief - they get taxed to death.   And because of this, they cannot ever compete with Amazon, and the "moat" around Amazon gets wider and deeper, thanks to the government.   Not only does Amazon now have critical mass, in terms of a customer base and installed infrastructure, they have an artificially lowered tax base that would prevent any newcomer in the business from competing, as their overhead - including taxes - would be much higher than Amazon's.

Sadly, politicians have been doing this since the 1970's, when unemployment topped 10% and politicians got elected by promising "jobs".   Republicans resisted this at first, arguing (correctly) that creating jobs and managing the economy was not the business of government - at least not directly.  But then they abandoned all pretense of that when they realized that promises of employment got people elected, and those promises didn't necessarily have to  be fulfilled.

But there has been pushback.  Many cities are getting tired of competing for sports franchises by offering to build domed stadiums or offering tax relief (or granting the team owner exclusive parking franchises and concessions).  Some cities are realizing that these giveaways could actually bankrupt them.   In Louisiana, they changed the law regarding granting tax amnesty to companies willing to relocate there - and in an historic move, a local school board said "no" to such a scheme.

Republicans criticized the Obama administration for "picking winners" in the marketplace, by offering incentives to certain companies, such as Solyndra (note: Oil companies, are, of course, exempt!).   And of course, they hate Jeff Bezos for being "liberal" and owning the Washington Post.   It seems Republicans have an odd new bedfellow in Ms. Ocasio-Cortez, who seems to be advocating for the same thing.

If you go far enough to the Left, you end up Right - and vice-versa!