3 ways I’m using my side hustles to build generational wealth and support my family – Business Insider

  • After getting out of debt, I focused on increasing my income. I started side hustling and earned over $100,000 in 2020.
  • Now, I’m using my side-hustle income to build generational wealth and support my family in three ways.
  • I’m accelerating my retirement savings so I have plenty of money to leave behind, I’m building a college fund for my niece, and I’m supporting my parents as they enter retirement.
  • This article is part of “Money That Lasts,” an ongoing series about generational wealth from Personal Finance Insider.
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When it comes to building wealth and passing it along to future generations, many people think of investing in things like real estate or the stock market. But did you know that side hustles can be a part of building generational wealth?

Financial experts tend to place a lot of emphasis on debt payoff and saving money as the way to get ahead financially, and that makes sense if you’re living in a paycheck-to-paycheck cycle. But there is also a lot of power in increasing your income. 

I believe that wealth is built by embracing an abundance mindset, not by focusing on scarcity and deprivation. So if you want to build wealth, you have to focus on increasing your income, not just paying off debt and saving money. 

I don’t think side hustles get enough credit for the power they can give you to build wealth. In 2020, I earned over $100,000 in extra income with side hustles, and all that extra income is helping me build generational wealth for my entire family. 

Side hustles have been an integral part of being able to pay off my student loans and fully fund my emergency fund. Now that I’m debt free, I’m using my side-hustle income in several ways to build generation wealth.

1. Accelerating my retirement savings

Before I started side hustling, I was only contributing 6% of my income towards retirement, not nearly enough to build a comfortable nest egg. I became debt free in 2020, and now I’m using my side-hustle income to help me maintain a comfortable standard of living while accelerating my investing and retirement goals. 

I was able to max out my workplace 401(k), IRA, Solo 401(k), and HSA for the first time ever last year. I plan to continue to do this each year in order to take advantage of the power of the stock market and compound interest. Investing consistently over time is how I plan to build a large nest egg and leave an inheritance to my children or nieces and nephews. 

I want to build wealth that can be passed onto to future generations. I make sure to designate beneficiaries on all of these accounts and review them periodically, so that there is a simple path for transferring wealth to my spouse, children, or next of kin. 

2. Helping my niece through college so she can graduate without debt

I’m also using my side-hustle income to set my niece up for success in the future. I opened a 529 account and UTMA account for her and am contributing money on a monthly basis to help her avoid debt that can delay major milestones in life. 

529 accounts allow you to save pre-tax income for eligible education expenses. A UTMA account allows you to invest on behalf of a minor, and they take ownership of the account at age 18 or 21, depending on your state guidelines. Giving her the ability to graduate college with little to no debt will give her a headstart on her own wealth-building journey as she goes out in the world.

3. Taking care of my parents as they near retirement

The biggest perk of my side-hustle income is that it’s allowing me to take care of my parents, who are nearing retirement. I am in the process of purchasing a retirement home for them, something that would be impossible without the extra income from my side hustles. The ability to do this gives me a lot of joy; it’s one way I can ensure my parents have a safe home to live in when they’re no longer in the workforce. In addition, I’ve opened a family emergency fund that is separate from mine, so that I can help my family financially with unexpected emergencies. 

Side hustles are the unsung heroes of creating generational wealth, and I would argue that they’ve had the biggest impact on my wealth-building journey. Debt payoff, saving, and budgeting all focus on cutting back, spending less, and embracing frugality. While useful, there is also a lot of financial power that comes with growing your income and diversifying your income streams. With a good side hustle, you can reach your financial goals faster, and who doesn’t want that?

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