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According to a recent news MyPerfectResume Survey72% of American workers rely on a source of income other than their main job to make ends meet. The survey found that the two most popular sources of supplemental income were freelance/gig work and investments (crypto, stocks, etc.).
GOBankingRates consulted experts and did the calculations to determine whether working a side gig or investing would leave Americans with more money over 12 months.
Also check out four grandma-approved side gigs that will save boomer budgets in 2026.
side gig vs investment
The income from a side hustle depends on the venture you choose and the time you have. GOBankingRates used an hourly wage range of $15 to $30 based on average data. Jobs included food delivery driver, freelance writer, and dog walker. The assumption is that you can start at $15 but increase it to at least $30 per hour as you gain experience and clients.
If you work 10 hours per week at your side gig, you could bring in a monthly income of $600 to $1,200, which adds up to $7,200 to $14,400 after 12 months (not including taxes). If you work more hours, you’ll earn even more.
“However, investing in the stock market will yield returns of about 10% per year (the average return from the S&P 500 index),” said Cody Schuiteboer, financial expert and president of . best interest financial. He said a $50,000 investment would generate a profit of about $5,000 in 12 months.
Which one wins?
“Over a 12-month period, side jobs will outperform investing for most people due to the lower start-up capital required,” said Sen Rhodes, an experienced real estate consultant. clever proposal.
Rhodes said that a common stock portfolio with a 10% annual return requires at least $10,000 invested to produce $1,000 in a year.
Rhodes said, “An average person employed as a side gig rideshare driver can earn $1,000 in just 6-8 weeks. Within a year, an excellent rideshare driver can easily earn $15,000-$25,000 gross ($8,000-$15,000 after various expenses).”
If you’re starting out without much capital, you’ll have to rely on additional investments to grow your savings.
main idea
While a side gig seems like the better option, there are some factors that you cannot ignore when examining both options.
Schuetteboer emphasized that your side gig pay may be less than your regular hourly wage, and you can’t forget the stress of extra work and the lack of free time. On the other hand, investing in the stock market does not require much effort when you have the necessary capital to start.
Also, investing does not require much effort, you have to increase your savings so that you have money to invest. This means you may have to do extra work to start investing.
how to decide
“I suggest actively doing a side gig for 12-36 months and accumulating $15,000-$25,000. Then invest some of this money in stocks or buy real estate as a passive income source, rather than continuing to work at your side job constantly,” Rhodes said.
While a side gig will bring in more money over 12 months if you don’t have enough capital to invest, in the long run, you’ll be better off focusing on using your extra income to build an investment portfolio.
Editor’s Note: This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including possible loss of principal. Always consider your individual circumstances and consult a qualified financial advisor before making investment decisions.