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Inflation is forcing young people to side-hustle

Peter Switzer
10 August 2022

The world’s financial markets are on US inflation watch, which will be released overnight, and our stock market will go up or down on Thursday because of this number. Unbeknown to many, inflation is an incredible life changer.

While parents and employers can sometimes complain about younger generations, history has shown that except for babies (who are the world’s most effective life-changers of a young couple ever!), there’s no better reality biter than inflation.

But I digress.

The ABC has looked at the impact of the rising cost of living and how it has intermixed with the impact of the post-pandemic-lockdown world and created a virtual army of Aussies with a side-hustle. We used to call these extra income activities on top of your full-time work, a part-time job or part-time business, but those were the days before creative US journalists came up with this new term.

Frankly, I like the side-hustle because it actually acknowledges the small-time entrepreneur who actually has gone into a small business, which could easily become the direct or even the indirect pathway to these side-hustlers actually creating great businesses.

Out of adversity can come opportunity, and inflation with its more expensive interest rates, rent, food and fuel whacks everyone’s hip pocket, forcing everyone ‘feeling the pinch’ to either cut back on spending or look for other ways to earn income.

According to the ABS, young people are the biggest side-hustlers out there because they are usually renters, have lower-paid jobs, have fewer savings and their inflation is generally bigger because of their lifestyle of going out, eating out and enjoying life as young people should.

“According to the ABS, just under 900,000 Australians were working more than one job in the December quarter — more than at any other time since the bureau started keeping such records in 1994,” the ABC’s James Purtill and Ellie Grounds revealed. “But not all age groups were affected equally — this rush to pick up extra work was by far the greatest among young people.”

The big spike in December 2021 was young people embracing the side-hustle after lockdown, as prices were increasing and the country’s employers were crying out for staff with about 500,000 foreign workers back home because of the pandemic’s lockdowns.

The ABS put the inflation hit into simple perspective, revealing that wages grew by 2.4% in the March quarter but we’ve seen rents rise by 10% over the past year and fruit and veggies prices rise by 6% in the June quarter alone.

It's good to see young people take on the challenges of inflation and the new world we all live in. Out of all this will come some great business owners and entrepreneurs, just like what happened after the inflation of the 1980s and the recession of 1990-91.

It was no fluke or coincidence that the legends of local business (i.e., John Symond of Aussie Home Loans and Mark Bouris of then Wizard Home Loans and now YBR) arrived offering homeowners an escape hatch from their relationships with the big banks.

That period of inflation and recession also spurred the growth of mortgage brokers, who also increased the pressure on banks to give their customers a fairer go.

And the take-up of the internet and computers became a huge opportunity that then encouraged many employees to become contractors, which also has become the first step in many individuals becoming business owners, employers and significant taxpayers!

There’s an old saying that “when the going gets tough, the tough get going” and the people getting off their butts and having a go at beating the threats of inflation will be the winners.

They’ll learn ‘stuff’ that will make them better at competing with others, and they’ll be forced to confront their weaknesses. Many smart ones will learn from this tough experience.

I know the inflation/recession experience in large part explains how we’ve grown our business. One of the great observations I’ve learnt over my years in business, is, as Jim Rohn put it: “Just about everything you want in life, is just outside your comfort zone.”

This inflation challenge is putting about 900,000 Aussies in such a position that they have to give up watching Netflix or footie on free-to-air channels, to do extra work. And a hell of a lot of them will be better for the experience.

Like babies, inflation is a life-changer. I’d recommend you be in the group who we call ‘tough’ and who 'get going' when life throws a few curve balls at you. Why? Because life will always toss curve balls and bouncers at you. It’s how you respond that will have a big impact on your success and happiness.

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