Connecting Human Capital, Wealth, and Happiness

Research consistently shows that higher income correlates with increased happiness—surpassing even the famed $75,000 income threshold. This relationship is straightforward: greater earnings provide more control over your life and enable further investments, which ultimately lead to even more control in the future.

While money itself doesn't directly buy happiness, it does afford freedom, and that freedom contributes to overall happiness. However, the manner in which you earn your money can significantly influence your daily satisfaction.

Consider a high-earning law firm partner who works over 70 hours a week for years. Are they happier than someone with a more moderate income working a standard 40-hour week?

There are two primary approaches to enhancing your human capital:

1. Fully commit to developing skills pertinent to your primary job and maximizing your salary.
2. Diversify your income by pursuing interests outside of your main job.

To me, the optimal investment in human capital should fulfill three objectives:

• Increase your income to ensure you have disposable income for investments.
• Enable you to engage in work you are passionate about.
• Gradually lead to a situation where you have more control over your work schedule.

Many individuals invest significant time and money—like $100,000 and six years—into law school, often to secure a lucrative career. If their motivation is a passion for law, that investment may be worthwhile. However, if they chase the paycheck alone, they might gain wealth but sacrifice their freedom.

Side Hustles: A Path to Diversifying Human Capital

For many, the driving force behind investing is the desire for early retirement. Yet, achieving this often involves a high income combined with stringent cost-cutting—essentially working long hours to save aggressively while feeling deprived of enjoyable experiences.

Why pursue such a path? Often, it's because individuals despise their jobs and wish to accumulate as much savings as possible in a short time to escape their unsatisfactory employment while ensuring financial security.

However, as I have noted previously, early retirement can take years, if not decades, even for those who save exceptionally well. A side hustle that excites you can meet all three investment goals: increasing your income, allowing you to pursue meaningful work, and potentially becoming a full-time endeavor down the line.

I began my journey as a personal finance writer on Medium in 2018. Since then, I've amassed a following of over 80,000 and nearly 9,000 subscribers on Substack, leading to a publishing deal.

The beauty of a side hustle like writing is the minimal barrier to entry; both Medium and Substack are free platforms. While it demands significant time investment, skill development, and a measure of luck, the rewards can be substantial.

I authored over 100 articles before building a substantial audience, spending a year essentially writing without pay. However, that time investment paid off, enhancing my writing abilities and creating a secondary income that rivals my primary job.

This additional income has bolstered my financial stability, allowing me to cover my living expenses without panic in case of job loss. It also empowers me to invest all my profits into the stock market, increasing my financial leverage.

With this newfound financial strength comes opportunity. When you're not desperately reliant on a paycheck, you can negotiate better terms with your employer, such as higher pay or more flexible working arrangements.

If you find it challenging to make ends meet, increasing your income becomes paramount—even if it requires taking on less appealing jobs. There's nothing wrong with "working for the money," especially if others depend on you.

However, if you can manage your monthly expenses and save a bit, a side hustle may be the ideal way to acquire new skills, enhance your income, and possibly pave the way for your dream job.

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Disclaimer: This article serves informational purposes only and should not be construed as financial or legal advice. Not all information is guaranteed to be accurate. Please consult a financial professional before making significant financial decisions.