Welcome to The Money Coach, a Times of Malta column where readers can ask questions about life's money issues. Send your questions about personal finances, inheritance, gifting or other personal finance topics to moneycoach@timesofmalta.com
Dear Luca,
I recently attended a seminar hosted by a local investment firm in which the speaker emphasised the importance of investing and earning compound interest.
It all made sense: invest regularly, a consistent sum of money monthly, and in return, your money will compound over the years. By year 25 or so, you’ll have a decent sum of money thanks to these regular investments.
I am sceptical of this strategy. I don’t doubt that investing regularly and earning that 8-10% annual interest (the average rate of the S&P 500) has its benefits and will yield rewards after several decades. But that’s it, you know – decades – 20 to 30 years.
I don’t want to wait 25 to 30 years to enjoy my hard-earned income.
I know this goes against the principles of retirement schemes and what many are trying to instil – but for me, it just doesn’t make sense. Are there ways I can grow my money faster without taking unnecessary risks? I am a full-time worker with a family to care for, so I am also cautious about get-rich-quick schemes.
I might be asking the impossible here, but well... it's worth a try.
Best regards,
Impatient Investor
Luca Responds:
Dear Impatient Investor,
I am a huge advocate of dollar-cost averaging – that is, investing a consistent amount per month and letting it compound. However, I understand your frustration, and it is something many of my clients have expressed as well.
You might be surprised to learn that there are ways to increase your income without gambling it away or investing in risky ventures that could lead to losses.
One of the most proven sources of extra income is monetising your passions, perhaps even creating a side hustle from them. Ask yourself, what do you enjoy doing? Do you like reading, perhaps? If so, have you ever considered doing book reviews and getting paid for it?
You might think this is far-fetched but a man from Britain recently wrote a few Amazon reviews on fish tanks, then forgot about them. A few months later, he received a check in the mail for $350! He continued writing reviews and eventually earned around $700 for his small efforts.
A side hustle is the perfect way to make extra money without giving up the security of your full-time job. It will give you:
- More options
- Confidence
- More financial freedom
And it can be anything. One of my earliest clients worked as a teacher. She was sceptical about this side hustle idea, saying, "My only talent is writing novels. Can you tell me how I am expected to earn money from that? Because unless you’re JK Rowling, you have very little chance of earning anything".
Being an aspiring writer myself, I know how hard it is to get your novel published and sold successfully. But then I asked her: "Have you ever considered writing for brands?"
Her creativity, I was sure, would be optimal for creating brand stories for businesses. She was hesitant at first, but then she created Fiverr and Upwork accounts. A few weeks later, she was consistently earning €400 to €500 a month. Nothing extraordinary, but enough to fund the vacations she enjoyed without touching her full-time income, or perhaps to save more.
And guess what? It didn’t feel like work because she was doing something she liked.
We live in the Knowledge Era, where people are making money from anything.
That is my message to you: focus on what your talents are. Ask: what skills do I currently have that could earn me money?
Can you afford half an hour every day for the next month to build your idea into a successful side hustle?
It can be a game-changer.
Best regards,
Luca
Luca is the founder of the Money Coaching Hub. Email him your financial questions at moneycoach@timesofmalta.com
Disclaimer: This column is intended to provide general information on various topics related to personal finance. The information provided is for educational purposes only and should not be construed as personalised financial advice for your specific situation. Financial decisions are highly individual and can vary greatly based on your unique circumstances, goals, and risk tolerance. The author of this column is not authorised to provide financial advice. Before making any financial decisions, it is recommended to seek professional financial advice from an authorised financial advisor.