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Can The Gig Economy Help You Reach Financial Independence?


Can the Gig Economy help you reach financial independence?Last month, we moved and I spent a lot of time fixing up our old condo. It was in good shape overall, but it needed some cosmetic fixes like painting, caulking, and patching. At first, I was going to hire a painter to paint the interior, but the estimate gave me sticker shock. They wanted $1,800 to paint a small 2 bedroom condo. I couldn’t bring myself to pay that much so I decided to paint the place myself. My wife suggested that we hire someone from TaskRabbit to help out. That sounded good to me so we reserved a 4-hour appointment to see if it’d work out. Unfortunately, it snowed that day and the city shut down. Our gig worker couldn’t come because his van can’t handle the snow. Luckily, I already made good progress in the previous days. I was able to finish off the interior painting without help in a couple more sessions. It took about 25 hours total, but that was way better than spending $1,800. That’s more than I make in 2 weeks. I feel bad for the gig worker, but that’s how the ball bounces in the Gig Economy.

The growing Gig Economy

While I was painting, I listened to NPR on the radio and heard several stories about the Gig Economy. Apparently, it’s huge now. A 2018 report from Gallup Poll found that 36% of all U.S. workers participated in the Gig Economy in some capacity. That’s about 57 million people! Their definition of gig worker is very broad, though. Basically, a gig includes anything that’s not a traditional job. Here is the categorical breakdown.

  • Online platform workers – Uber, TaskRabbit, Fiverr, and other online platforms. This is what I think of when I hear “Gig Economy.” However, this is just a small portion of it.
  • Contract firm workers – Employees who work for a firm that provide services to another company. Janitorial service, sales, writing code, and such. Contract workers outnumber regular employees at Google now.
  • On-call workers – People who work on an as-needed basis. A substitute teacher, for example.
  • Temporary workers – Workers from a temp agency.
  • Independent contractors – People who provide goods and services to another person. Many small businesses fall under this category. I needed some help sprucing up the bathrooms at the old condo and I called my handyman. He’s an independent contractor.

The 36% includes people with a traditional job who are hustling on the side to make extra income.

Ok, let’s take a little poll.

Do you participate in the Gig Economy?

View Results

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The Gig Economy and retirement

One interesting finding in the report is that baby boomers participate in the Gig Economy at higher rates that GenXers and Millennials.

  • Baby boomers – about one in three have a gig.
  • Gen Xers – 27%
  • Millennials – 26%

It looks like the boomers are turning to the Gig Economy to help facilitate a smoother retirement. I think that is a great idea. A gig can bring in some income and you get a chance to socialize. Why not?

My handyman, Ted, is a young baby boomer. He has rentals, a much nicer house than ours, and he works 4 hours per day max. I doubt Ted really needs the money, but even a little active income goes a long way in retirement. Going out to work a bit keeps him busy and he can socialize with other people. I’m sure his wife is happy to have him out of the house once in a while. It was fun talking to him about all sorts of stuff. I enjoyed spending time with him. Ted is doing it right.

The Gig Economy and financial independence

I’m a part of the Gig Economy too. Retire by 40 generates income from advertising through various online platforms like Amazon and AdThrive. I also occasionally participate in consumer surveys and market researches. After 9 years in the Gig Economy, I’m very happy with it. It helped me reach financial independence and gave me the peace of mind to retire early.

How I pulled this off?

Back in 2010, I was very dissatisfied with my engineering career. My physical and mental health were deteriorating rapidly. I couldn’t handle being a corporate drone anymore. I knew I had to get out. Luckily, I discovered blogging and dove right into it.

After some research, I found the key to early retirement is financial independence. One way to define that is having 25x our annual expense. We achieved it relatively quickly by cutting expenses and raising our income. I have been saving and investing since 1996 and we were already pretty frugal. By 2012, we had over 30x our annual expense. However, this wasn’t enough. Most of our investments are in the tax deferred accounts. I could access my IRA via the Roth IRA ladder, but we weren’t quite ready to do that. Mrs. RB40 enjoyed her job and she didn’t want to retire at that time.

Instead, I came up with our unusual early retirement withdrawal strategy. Instead of drawing down from our retirement fund right away, we will fund our lifestyle with a combination of passive and active income. From what I recall, I only needed to make $500 per month from blogging to cover the rest of our monthly expense. We left our investment alone so it had time to grow. And grew it did. Our net worth doubled since I retired in 2012 thanks to the strong stock market. I’m quite happy I joined the gig economy.

The Gig Economy can be tough

The Gig Economy isn’t all roses, though. I heard some horror stories on NPR. One gig worker was propositioned to join a threesome by the couple she was cooking for. Yuk! Nobody wants to deal with that.

Also, it sounds really difficult to support yourself solely with gigs. If I don’t have passive income, I’d be hard press to live on my online income alone. Most gigs don’t come with health care, paid time off, worker comp, unemployment benefit, life insurance, or retirement benefits. It’s tough to support yourself with just gigs.

It seems the Gig Economy is great for only a few cases.


  • Supplemental income – You join the Gig Economy to supplement your income. You can survive without it. This gives you a lot of choices. The worker can pick a job they excel at and become better at it.
  • Specialization – A skilled gig worker can make six figures if they specialize in something that’s in demand. For example, a steady cam operator can make good money in the right city.
  • Independent contractors – The Gallup poll found that independent contractors are quite happy with their work. Temp workers, on-call workers, and contract workers aren’t as engaged. This makes sense. Independent contractors have more choices. They can do something they like and work at their own pace.


  • Survival – Depending on the Gig Economy to survive probably isn’t good. Many gigs don’t pay very much and have no benefits.
  • Distraction – A gig could distract you from your career. Usually, the best way to increase income is to get a raise at your main job. Working a traditional job and gigs on the side will wear you out in the long run. It’s probably better to focus on your career and acquire more skills to improve your income there.
  • Unskilled gigs – IMO, working in unskilled gigs is a bad idea. You’re competing with so many people. If anyone can do this job, you won’t make much.

The Gig Economy helped me retire earlier

In conclusion, the Gig Economy helped me to retire earlier. If I depended on passive income alone to retire early, I’d probably had to keep working for 3-5 more years. Now, I work a few hours per day on something I enjoy and I don’t have to deal with any corporate BS. This is what FIRE is all about. If I can keep this up for 5 more years, we’d be set for a very comfortable retirement. Our investment should grow enough to accommodate a very comfortable retirement. FatFIRE, here we come!

Are you a part of the Gig Economy? What do you think about it? Is it helping you reach financial independence and early retirement?

Starting a blog is a great way to save money on your therapy bill, build your brand, and generate some extra income. Check out my tutorial if you’re thinking about blogging – How to Start A Blog and Why You Should 

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he couldn't stomach the corporate BS.

Joe left his engineering career behind to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle. See how he generates Passive Income here.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.
{ 34 comments… add one }
  • Life Outside The Maze March 14, 2019, 12:48 am

    It seems to me that the most common side hustle of the FI folk that I have met (as well as myself) has been real estate. It may not be the gig economy but it seems to make some cash when done right. I do some occasional consulting (which I guess is the gig economy right) for startups, medical device / healthcare related companies, and small businesses mostly run by friends and past professional peers. I also blog, but I do that to be part of this community and for fun (no-profit). I guess we kind of follow your approach in that we are not currently drawing down from the portfolio. Thanks for the post Joe

    • retirebyforty March 14, 2019, 9:43 am

      Real estate is a proven way to build wealth. It adds some stress to your life, though. If you can handle it, then that’s a great way to go.
      Keep at it!

  • Dave @ Accidental FIRE March 14, 2019, 1:49 am

    My graphic arts business can be classified as gig economy I guess. No it doesn’t pay nearly as much as much W2 but it’s 1000 times more flexible and fun, and it’s hard to put a price tag on the latter two things.

    • retirebyforty March 14, 2019, 9:44 am

      It’s great to have a gig on the side. I think it’s much more difficult to survive just on gigs. Thanks for your comment.

  • Xrayvsn March 14, 2019, 3:32 am

    A potential great gig job for me later down the road would be Teleradiology. I’ve had some colleagues go right from residency into Teleradiology rather than a traditional job and make decent money ($150-200k or more).

    As tech advances it will only make Teleradiology that much easier to do (would be great to read scans anywhere in the world).

    • retirebyforty March 14, 2019, 9:45 am

      Wow, that’s a great gig. It sounds like a very flexible gig.

  • Tim March 14, 2019, 6:24 am

    I have a job, a gig on the weekends and I like to get my side hustle on too

    • retirebyforty March 14, 2019, 9:56 am

      What kind of gigs? I’ll probably find something to do when our son is older. Not much time right now.

  • Adam March 14, 2019, 6:58 am

    I have a music performance degree. In a really good year I’ll crack four figures hiring out to churches and private institutions who need music or want to put on a concert. It’s tricky in the DC area; some of the world’s top concert bands (and their constituent world-class members) are here, so the bar is set pretty high and good-paying gigs go first to those folks. But once your foot is in the door, if you’re competent and reliable, you will get calls.

    On the other hand, if you tally up all the money I’ve made in the last quarter century, it would amount to maybe two thirds the value of my horn. So if you’re in it to make money, this is a bad idea.

    • retirebyforty March 14, 2019, 9:58 am

      Great! 4 figures aren’t bad. It sounds like a nice opportunity to go out and practice your craft.
      Maybe you need to hit the farmer markets. 🙂

  • freddy smidlap March 14, 2019, 7:07 am

    mrs. smidlap has been what you would call a gig employee for a couple of years now. my 40 hours gets us plenty that we could live on and benefits, but she likes to stay somewhat busy. she also likes the extra spending money for fun enjoyable activities. it took some time to fine tune it all, though. she took one job teaching one college course that screwed up a vacation plan because of the schedule required so we’re more careful about that now. the rule of thumb now is to only accept a less flexible job if it pays a lot. otherwise just decline and wait for the right thing.

    • retirebyforty March 14, 2019, 9:59 am

      I’d encourage Mrs. RB40 to find a gig or two after she retires too. She can use that money on clothes and eating out.

  • Helen March 14, 2019, 7:18 am

    Hi Joe, I never heard about gig economy, but know what you are talking about. Having a regular job has a lot of financial benefits, but the long hours and work loads could take a toll to our health and personal life.

    I guess, if people could afford to leave the regular workforce, it’s not a bad idea to do so. Hustling helps, and it doesn’t hurt to make extra dollars. I’m not sure if hustling could lead to FI.

    • retirebyforty March 14, 2019, 10:00 am

      Oh yeah. You went from a career to working at a bank. Those are traditional jobs.
      Do you want to try some gigs?

  • Clarence @ Oracle of FI March 14, 2019, 8:17 am

    I teach English online and I draw fantasy maps on Patreon. I think you could call those gigs, although I tend to think of them more as side hustles.

    The gig economy represents freedom for those who can’t or don’t want to follow a traditional career path. Indeed, there’s something liberating about being able to decide how much and when you will work in a given month (with the constraint of making enough to support yourself). It’s not all roses however. It requires a certain autonomy of character and a sense of personal responsibility.

    Personally, English teaching is helping me reach financial independence in the sense that any contributions helps. As for drawing maps, I see it more of a hobby and try not to think of it as a money maker. As the American poet Maya Angelou said: ““You can only become truly accomplished at something you love. Don’t make money your goal”.

    • retirebyforty March 14, 2019, 10:02 am

      Those gigs are really neat. Side hustles and gigs are the same, apparently.
      Do you have a traditional job too? It sounds difficult to survive on just gigs. The health benefit is a big issue.

  • Mr. Tako March 14, 2019, 9:00 am

    Yup, lots of people doing ‘gig’ jobs these days. Most don’t pay that well, but I agree that it’s a good fit for someone that’s already financially independent.

    I’m probably one of the few FI bloggers that doesn’t actually have some kind of ‘gig’. Other than my blog (which doesn’t really make any money) I live entirely off investments.

    I’ve certainly *thought* about starting some kind of gig to bring in a little extra cash, but for now I just don’t have the time.

    • retirebyforty March 14, 2019, 10:04 am

      Once your kids are older, you’ll probably have more time. That’s what I keep thinking. Although, the blog is keeping me very busy. In 10 years, I’m sure I’ll spend less time blogging and work on something else. Woodworking sounds like a good gig if you’re good. Nice furniture is very expensive. I’m trying to find a nice used dining table…

  • Doc G March 14, 2019, 9:42 am

    I consider myself an independent contractor. I get paid, as a hospice physician, a monthly stipend based on how much I work. I have no responsibilities. Go to no company meetings. Do no company wide training. It has worked well for me, but only after financial independence.

    • retirebyforty March 14, 2019, 8:23 pm

      Independent contractor is the way to go. The poll found they are doing much better than the other gig workers.
      I think being your own boss makes a big difference.

  • jim March 14, 2019, 10:26 am

    I bet that 36% figure from the Gallop poll is really just anyone with some form of side income. That includes lots of stuff even selling on ebay or a yard sale.

    DQYDJ did a series last summer about side jobs :
    Rideshare drivers are just 1.6% and other online task jobs like Task rabbit or Fiverr are ~4%

    Also BLS stats on contingent or alternative employment :

  • Angela @ Tread Lightly Retire Early March 14, 2019, 12:00 pm

    Option three: my main job isn’t even full time (80%) and I quit my side hustle (park ranger) a few years back ? At this point, time and space in much life and with my kiddo and husband are more important than reaching FI as fast as I can.

    • retirebyforty March 14, 2019, 8:24 pm

      Of course, you have to do what works for you. I think you’re doing very well with your family. They’re a higher priority than FI.

  • Dr. McFrugal March 14, 2019, 2:04 pm

    I’m a little surprised to learn that the baby boomers are the most active participants of the gig economy. But I guess that makes sense because GenY and X are spending most of their time in their main gig / traditional jobs. When I took my wife and baby to Orlando last year for FinCon, the Lyft driver who drove us from the airport to the hotel was a 60 year old baby boomer retired NYPD cop who had a $120,000 a year pension, or something like that. And he now runs a security alarm business with multiple employees working for him doing the work. He said this pulls in another $100k. He clearly did not need the side gig income through Lyft. I guess he was doing it for fun or to socialize. Not sure.

    Anyway, is playing video games and filming myself on YouTube screaming and yelling count as Gig economy?

    • retirebyforty March 14, 2019, 8:26 pm

      That’s an interesting Lyft driver. I wonder why he is driving. It doesn’t sound like much fun to me.
      YouTubers are probably classified as online platform workers. The screaming and yelling are driving me crazy.
      I don’t know why anyone would want to watch that.

  • GYM March 14, 2019, 8:03 pm

    Interesting to see the stats that boomers and Gen X both participate in the gig economy. I was always under the conception that it is mainly millennials dissatisfied with their jobs. Rover is a great gig, I would totally do this when I am FI and have the time (dog sitting or dog walking).

    • retirebyforty March 14, 2019, 8:28 pm

      The boomers probably joined the gig economy to work less. Some probably got pushed into it as the job market changed. The younger generations have more choices, I think.
      I should check out Rover too. Although, I prefer cats. 🙂

  • Little Seeds of Wealth March 14, 2019, 8:24 pm

    Gig economy jobs won’t make you rich. That’s why I think finding gigs that integrate well into your daily routine and are not overly intrusive is quite important. I do surveys while waiting in line and do Job Spotter whenever I’m at a mall. I do find them pretty enjoyable and better than doing nothing. It’s not like I can make my hourly rate at my full-time job while shopping anyway.

  • Sport of Money March 15, 2019, 3:58 am

    I believe the Gig Economy will be more and more prevalent for the US workers. The Gig Economy can help with FIRE and supplemental income in a normal retirement. It can also provide job opportunities for people who want location and time freedom while enjoying what they do (I termed this work LITE: Location Independence, Time Enjoyment).

    Also, with advancing technology such as AI, there might be less of a need for companies to hire full time employees. The companies might be more interested on hiring for project base work which should fuel more opportunities for gig work.

    There are negatives with gig work and you have listed some. Another one is periodic and unstable income as well. But there are companies out which recognize the growth in gig workers and they are trying to solve those problems because they believe a different service model is needed for gig workers.

  • Pennypincher March 15, 2019, 5:32 am

    Loved being an independent contractor. Was done and finished in a day or week and could walk away from all the politics, etc. Very freeing. Besides the people who hired you were so happy to see you, as you were there to help and bail them out.
    Didn’t like feeling like an actor and thinking when is the next role coming. Or paying out just about 50% in taxes, SS, etc. Always a trade off somewhere.

  • [email protected] March 15, 2019, 8:15 am

    In the UK at least there is huge tax benefits to becoming a contractor. There is also so much work the downside of risk isn’t even a consideration. The only drawback is sick days really but the average person only takes off a week a year. In reality that is miniscule in pay so as long as you don’t break a leg or something like that it is always better to be a contractor.

  • Abigail @ipickuppennies March 15, 2019, 9:28 am

    I’m not part of the gig economy. Heck, I only just started using Uber/Lyft this past year.

    I kind of disagree with the definition of gig economy. Like you, I think of it more as things like Uber, DoorDash, etc. I guess I can kind of see lumping temp workers in with that. But independent contractors? Nah, I don’t buy it.

    I think it’s an interesting mechanism/workaround that’s been developed to let people earn money on the side. I don’t know that it’s sustainable at current levels, but I guess only time will tell.

  • German March 15, 2019, 9:56 am

    Nice article, Joe. When I will be $500 short per month to cover my expenses, I would drive for Uber part-time because I love driving and I love socializing. It’s not hard to make an extra $500 per month if you’re not working. Helping somebody move on the weekend can earn you $200+ day cash. You don’t even need the app for that. Because the app company generally wants 25%. You can find lots of gig directly on kijiji. The story about the threesome is hilarious. That’s twisted lol!

  • Stepstoearlyretirement March 17, 2019, 2:54 pm

    Great article Joe!!

    I retired at the end of September and although my wife and I are traveling I do feel a little restless. Thoughts about returning to work have entered my mind. I’m feeling the need to be more productive. Perhaps a gig is just what I need.


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