Is recession coming?

Is there are storm brewing? At the time of writing Germany is on the cusp of recession which would have obvious consequences for the rest of Europe; America and China are still tit-for-tatting their tariffs; Australia, largely unscathed during the GFC of 10 years ago is now showing signs of finally cracking; Japan is Japan, huge but going seemingly nowhere and with a rapidly ageing population and Argentina is flirting with re-electing economic disaster Cristina Kirchner.

All this and we haven’t even got to the matter at hand on these shores….I dare not speak its name. What will happen there is anyones guess: Yellowhammer, deal or no deal, absolute economic catastrophe or economic Utopia? Or will it be like the Millennium Bug and be nothing more than a damp squib with everyone waking up on 1st November, having their Corn Flakes (other infinitely nicer breakfast cereals are available) and carrying on.

We are after all the nation of the stiff upper lip, who rolls their sleeves up and gets on with it, despite the amateurish actions of our Parliamentary representatives.

There are talks of stockpiling, grab bags and all sorts on the www, but if the apocalypse comes you’ll need a few quid to get you through. My Grandfather, an entrepreneur in pre and post war Germany (who had his business closed down by the East German communist government) went to his grave with cash stashed around the house “just in case the Russian’s come again.” He was ready to bribe his way out of town.

Now, we’re assuming you read this blog if you are interested in making a few extra pounds on the side and want to see what we’ve done that works and what we’ve done which has been nothing short of disaster. With that in mind, we’ll also assume you are a person interested in maximising earnings as a means to ensure a comfortable life or perhaps secure an early retirement or some other financially-based goal.

The Money Mountain is just us three trying different things to make money with a view to getting out of the rat race earlier than the average Joe. We’re not doing it with recession or economic disaster in mind, it just so happens that we’re in that part of the economic cycle right now and what this may mean for the world.

We’ll keep doing what we do as it strengthens our position at the worst of times and helps us get ahead when everything is rosy.

What happened last time?

If we look at some data from the last recession (the Global Financial Crisis of 07/08/09/10….you decide when it started and finished…I have no idea any more), then we’ll see the first major trend:

Self Employment

Self Employment is one way to go should the worst happen. If we look at the graph below, we can see there is a fairly steady stream of searches on Google, until around 2010 when it suddenly spikes quite significantly; (The Money Mountain is also a fan of the spike every January as people go back to work after Christmas and think “F*** this!”

Infact, self employment was responsible for 83% of the net gains in employment in UK between 2007 and 2014 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/344439/The_Labour_Market_Story-_The_UK_Following_Recession.pdf p27). The same report does also advise that this is perhaps not the preferred option for a good % of those self employed, but that it is better than being unemployed.

It absolutely rocketed during and after the recession. 387,000 more people turned to self employment between 2008 and 2012 (https://www.bbc.co.uk/news/business-21348712), which is a huge number.

It sounds romantic doesn’t it? Turning down clients who are dicks, picking and choosing what you do and when you do it.

The reality is much more terrifying, I’m sure. Chasing clients for work, chasing clients for payment, paying bills, managing cashflow, being the sales person, accountant, accounts payable, personnel department, maintenance and IT all in one. Something explodes? It’s your problem. Client doesn’t pay on time? It’s your problem. Self employment is not for the faint-hearted.

Side Hustle

The term “Side Hustle” is relatively new in UK. If we look at the stats on Google Trends, in January 2007, the term wasn’t searched for at all (or at least the data was so tiny, it wasn’t measurable). In January 2019 the search term peaked and was searched for exclusively in London.

If we compare that with the global trends for the search term:

…and if we look at the regions searching for the term, it throws up some interesting data:

There is no doubt that the idea is catching on with a well established FIRE movement in USA and growing here in UK too.

What constitutes a Side Hustle?

The Gig Economy

Freelancers have grown to 2million between 2001 and 2018 (https://www.consultancy.uk/news/18474/uk-has-2-million-freelancers-and-the-number-will-continue-to-rise), this could be anyone from a JustEat delivery rider, an Uber driver, or other tasks which can be contracted out. This could be a main source of income or your Side Hustle.

Another study puts the number of people employed in the Gig Economy at 4.7m (https://www.theguardian.com/business/2019/jun/28/gig-economy-in-britain-doubles-accounting-for-47-million-workers)!

Ben has spoken with Grab drivers in Thailand who will drive for Grab (Grab bought out Uber in Asia a couple of years ago) on their way to and from work just to get paid for the privilege of their commute – a smart move in anyone’s book.

We like the idea of the Gig Economy as a Side Hustle. Uber driving at the weekend, teaching piano, tutoring, baby sitting…whatever…The Money Mountain is very much of the opinion that this beats spending it down the pub if it means at the end of it there is a bigger picture i.e. a fully paid off mortgage, an early retirement, a holiday of a lifetime…whatever your goal is.

The power of a Laptop

We can’t catagorise this as the Gig Economy, it is a simple way to make money without having to do very much at all. Be it user testing, online surveys, bemyeye, Matched Betting, ebay (this needs a little more than a laptop, but you get the idea), there are ways to boost your income without having to worry about keeping your piano tuned or your engine oil topped up.

You may have a creative skill; we’ve met people who make cuddly toys, clothes, greetings cards, cakes/cake decorating…something you enjoy.

Ben tried to rent out some items that were sitting idle around the house through Fat Llama and also rent out empty space in his loft through Stashbee. Both were a complete waste of time for him, but might be the golden goose for you.

Using these very simple ideas you can cover some costs like energy bills, a mortgage overpayment or just treat yourself to a takeaway to make life a bit more palatable, it’s your money, do what you want with it!*

*please pay bills first, then spend what’s left…not the other way around.

So what’s the point of this article?

The Money Mountain advocates financial freedom above all else. Whatever you are doing right now, be it Gig Economy, Self Employment or just a bit of Matched Betting, it will put you in a stronger position regardless of what is happening in the world and it may just help you out should the worst happen.

Dear old Grandpa Ben having fought the English and lost, went back to Germany and figured at least he’d have his business to fall back on…but external events put paid to that. You just never know what’s around the corner and just when you think it’s all over, something can come along and aim a hefty size 9 at your plums.

Read our articles, learn from the mistakes we’ve made, improve upon them and make your own fortune so that in the event that Donald and Xi can’t work it out, you’ll have a better chance of weathering the storm.

As always, we’re not offering advice or guidance, just giving food for thought. There are trillions of £/€/$ out there, begging to be earned, and they are better off in your pocket than someone else’s!

We’d like to promote discussion on this subject. What do you do to make money on the side? Tell us in the comments below. Anything you recommend we try?