Young and Profiting with Hala Taha - Diane Mulcahy: Go Gig or Go Home | Career | E37

Episode Date: September 5, 2019

The explosion of the gig economy is real. Are you ready? In #37, Hala speaks with Diane Mulcahy, one of the first experts on the Gig Economy, which is a term that describes a labor market with the prevalence of short-term contracts or freelance work as opposed to permanent full-time jobs. Diane taught a class on the subject which was listed in Forbes’ "Top Ten Most Innovative Business School Courses in the Country." She also wrote a book called “The Gig Economy,” and is a leading authority on the topic who has been featured in publications like Forbes, CNN, Cosmopolitan, Oprah.com and more. Last year, the Bureau of Labor Statistics reported that 55 million people in the U.S. are “gig workers,” which is more than 35% of the U.S. workforce. And that number is projected to jump to 43% by 2020! In this episode, you’ll learn all about the gig economy and how it came about, why people choose gig work, and how to be successful in the gig economy and thrive financially when generating variable income. Fivver: Get services like logo creation, whiteboard videos, animation and web development on Fivver: https://track.fiverr.com/visit/?bta=51570&brand=fiverrcpa  Fivver Learn: Gain new skills like graphic design and video editing with Fivver Learn: https://track.fiverr.com/visit/?bta=51570&brand=fiverrlearn If you liked this episode, please write us a review! Want to connect with other YAP listeners? Join the YAP Society on Slack: bit.ly/yapsociety Earn rewards for inviting your friends to YAP Society: bit.ly/sharethewealthyap Follow YAP on IG: www.instagram.com/youngandprofiting Reach out to Hala directly at [e-mail] Follow Hala on Linkedin: www.linkedin.com/in/htaha/ Follow Hala on Instagram: www.instagram.com/yapwithhala Check out our website to meet the team, view show notes and transcripts: www.youngandprofiting.com

Hey guys, if you're an avid listener of Young and Profiting Podcast, I'd like to personally invite you to YAP Society on Slack. It's a community where listeners network and give us feedback on the show, vote on episode titles, chat live with guests, and share your projects with the group. We'd love to have you. Go to Bitley slash Yap Society. That's BIT.L.Y slash Yap Society. You can find the link in our show notes. This episode of YAP is sponsored by Fiverr, a marketplace that over five million entrepreneurs used to grow their business. I've been using Fiverr for years. In fact, I got the Yap logo made on there, and if you've seen my cool audiograms with animated cartoons, I get those images from Fiverr too. They have affordable services like graphic design, web design, digital

marketing, whiteboard explainer videos, programming, video editing, audio editing, and much more. They have over 100,000 talented freelancers to choose from, and it's super affordable. Prices just start at $5.00. If you're interested to give Fiverr a shot, hit the link in our show notes. And if you'd rather learn how to do these types of services on your own, check out Fiverr Learn, a new platform that provides on-demand professional courses from leading experts. They start at just $20, but what you could learn is priceless. Check out the links in our show notes to learn more. You're listening to Yap, young and profiting podcast, a place where you can listen, learn, and profit. I'm your host, Talataha, and today we're speaking with Diane Mulcahy, one of the first experts on the gig economy,

which is a term that describes a labor market with the prevalence of short-term contracts or freelance work as opposed to permanent full-time jobs. Diane taught a course on the subject, which is listed in Forbes' top 10 most innovative business school courses in the country. She's also wrote a book called The Gig Economy and is a leading authority on the topic who has been featured in publications like CNN, Cosmopolitan, Oprah.com, and more. The explosion of the gig economy is real, and so we better learn how to thrive in this new type of labor market. Last year, the Bureau of Labor Statistics reported that 55 million people in the U.S. are gig workers, which is more than 35% of the U.S. workforce.

That number is projected to jump to 43% by 2020. In this episode, you'll learn all about the gig economy and how it came about, why people choose gig work, and how to be successful in the gig economy and thrive financially when generating variable income. Hi, Diane. It's great to have you on Young Improfting Podcast. Thanks for joining us. It's great to be here. Thanks for having me. So to briefly introduce yourself to our listeners, you are one of the first experts on the gig economy. In fact, you've written a book about it and you actually pioneered an MBA course

on the subject. So tell us, how did you first become interested in the gig economy? I first became interested in the gig economy before it was even a thing, which means that as soon as I got my first job out of college, I went into a traditional consulting job like many college graduates do, and I started working and I realized, I don't love this. I mean, I really looked back on my college experience and thought it was much more interesting. You know, I took a range, a variety of classes. I had a very diverse kind of daily life doing different things. And then suddenly I started working this corporate job.

And I was like trekking to an office every day, sitting there all day for 10 hours a day, and working for the same people doing the same kind of work all day. And I thought, this isn't for me. I need something that looks different. So that was before the gig economy was a thing. But I always had in mind this vision of a portfolio of work that was interesting. and diverse and challenging. So that's really what was my original interest in the gig economy.

One of my research assistants actually said that he thinks you may have come up with the phrase gig economy. I couldn't validate that. So I wanted to know, is it true that you might have coined that phrase or were you an early adopter of it? I would call myself an early adopter of it. I wish that I could claim credit, but I don't think I can. Okay, cool. So your gig economy course at Babson College was listed in Forbes top 10

most innovative business school courses in the country. What do you think made it so popular and have other business schools followed suit to teach similar courses since then? I think what made it popular, and by the way, it became popular over time. This was not a first time out of the gate success. The first time that I offered the course, which was about six years ago, it was canceled because of low enrollment. Nobody really had heard about the gig economy. It wasn't a common term. And people were like, gig economy, do you mean like gigabytes? Like, is this a computer course? People didn't really understand what it was. So the course really grew in popularity as the students figured out, wait a second, the workforce is changing. Working full time

for my entire career, particularly for just a few companies, is not really. really an option anymore and I need to figure out how to work differently. And when students sign up for my class, that's really what they're interested. I mean, they show up and they're like, I'm going to graduate in six months or in a year and you've got to help me figure out how to actually go out there and succeed in this new way of working. That's why they take it. And so when you were first teaching about the gig economy, was it an accepted concept or were you fighting any like skepticism at the time of this being like a real trend? What I would say is when I first started teaching the gay economy,

I was fighting the perception that it was even a trend at all. You know, students came to class and they were like, well, we're not sure that this is a real thing. And certainly they had like an academic interest in it. They were like, oh, isn't this possibly an interesting phenomenon in the economy? They did not at all take it on board as something that would personally affect their lives. And I think that's been the most substantive change is now students come and they are completely convinced and engaged and it's personal right from day one. That's the biggest difference.

Yeah. So what year was it when you first put out that course? It was about maybe six years ago. So 2013. Yeah. Yeah. because so much has changed since then. Now, almost every big company you can think of is gig economy from like TaskRabbit to DoorDash to Uber Eats. It's just everywhere. A new one pops up every day.

Well, and that's what I think is so powerful about this trend is that it has grown and grown so quickly and had such a systemic impact on our economy, on the way we live and the way we work. It's incredibly powerful. Yeah. So how did the class end up becoming a book? Well, the book really grew out of the class. I mean, people would say to me, you know, I've written other books on other topics. So I think it was natural for people to say, oh, are you going to write a book on this? And I was like, oh, I don't know, you know, maybe, maybe not. And finally, enough people had asked me that I thought to myself, well, I'm just going to put together a proposal and float it out there. And if it gets picked up, great, you know, I'll know there's interest and I'll kind of go with it. And if not, that's fine too.

I really wasn't wed to a particular outcome. And I put it out and it was pretty immediately picked up by an agent. And so, you know, that was the beginning. As soon as it was picked up, I finessed the proposal. We sold it to a publisher and I was off in writing. So let's get to it. Let's talk about your expertise. How do you define the gig economy? That's such a good thing. That's such a place to start because I feel like a lot of people hear gig economy and they still think, this is going to be all about Uber drivers, you know, click, I'm not interested. And I just want to dispel that myth right up front. The way that I talk about and define and write about the gig economy is much broader than that. It's really, if you're not a full-time employee and a

full-time job, then you're in the gig economy. So it includes consultants, independent contractors, freelancers, and on-demand workers, and also people who are working side gigs. So it's a very broad definition that cuts across all education levels, income levels, and across all industries and sectors. The gig economy is huge and it's broad. Yeah, I love an example that you gave in your book where you talk about it as a spectrum where, like, you have the traditional corporate job on one side, and unemployment on the other and basically everything in between is gig work.

Is that correct? Yeah. Yeah, it's a very broad definition. So in your book, you say that the gig economy will not only change the way we work, but the way we live. So what do you exactly mean by that? The way that I would answer that is I would start with going back to the American dream. If we think about our traditional kind of default American dream,

which is, you know, you go to college, you graduate, you get a job, you build a career with a company or maybe a couple of companies, you get married, you buy a house, you know, you have kids, you work for 40 years and then you retire. That whole life and that arc is really built around the foundation of a job and a career. And I think what's different in the gig economy is that foundation shifts and it doesn't exist. You can really create. create and build and envision whatever kind of professional life that you look like, and there's so many more opportunities available. So you can decide, you know what, I really love doing this kind of work.

I'm going to build a portfolio that's based on that. Or I want to have this kind of lifestyle. That's what's really important to me. And here's how much money I need to earn in order to build that kind of lifestyle. So I'm going to work, you know, 30 hours a week instead of 40 or I'm going to work 60 hours a week instead of 40. There's so much more flexibility and control over your professional life in the gay economy that you, I think, have much broader capability to decide what kind of life you want to lead because you have so much control over what kind of work you want to do. Got it. So let's spend a little time talking about how we got here. You say that there are two trends that drive the growth of the gig economy. The first is full-time jobs disappearing and the second is full-time employees becoming the last choice for many companies. In fact, one of the first issues that I read in your book is that it's 30 or 40% more expensive for companies to hire employees than it is to hire contractors. So can you shed some color on this? How is capitalism,

evolved to bring us here? Well, I don't know that it's capitalism that has evolved. I think that it's business that has evolved. If you look at Silicon Valley where businesses are born and where the most highly valued in high growth companies in our economy are, what you see is a business model that creates very few jobs and hires very few full-time employees. So just think about all the tech companies that we're all familiar with, right? Facebook, Twitter, Dropbox, Twilio, whatever comes to mind.

What you realize is those companies, they have huge global impact, right? They are global companies that impact the daily lives of millions of people. And they're doing that with workforces that number in general, fewer than 10,000 and often fewer than 5,000 employees. is an incredible change in the way businesses operate and run. What we're not seeing come out of Silicon Valley is the next GE. We're not seeing companies that are born and emerge and get financed and are incredibly highly valued that have 300,000 employees. We're seeing a lot more companies that have far, far fewer. So what's happening is companies are relying much more on technology.

They're relying much more on distributed workforces, on offshoring, outsourcing, automating, contracting. They don't need to have a workforce of full-time employees to be successful, to be high growth, and to be highly valued. It's really business that's driving the change. Got it. And what would you say is the state of job security right now then? Well, there is no job security at all. There really isn't. And, you know, I hate to be a Debbie Downer. And I know from speaking to audiences that people have trouble hearing this for real and taking it on board. But if you spend any time

reading the business press, you quickly realize that companies are so dynamic. I mean, we're in such a competitive global economy that companies are constantly, you know, launching new products, entering new markets, pivoting, getting rid of old products, exiting markets. They're getting acquired, they're merging, they're going out of business because they can't raise financing. They're raising tons of financing and scaling their businesses. There's just so much dynamism that companies are really, you know, looking at their workforce as something that is a work in progress constantly. They need to bring on new and different skills at different periods of time. They need to staff up and staff down. They need to be in certain markets. They need to be

leaving others. So it's not that work has become more precarious because people aren't working as well or doing as good of a job. It's really because the nature of our economy dictates how dynamic companies have to be. So companies don't offer the security and the longevity and the career path that they used to. It's not possible. It's not viable. Yeah, that's so interesting that technology is sort of just driving. all of these trends, whether it's companies having to pivot all the time so they're not disrupted, which then kind of screws up everybody's job security. And then also on the flip side, the gig economy, it's like technology is fueling that as well with all these platforms

and apps that enable you to do things that you have never done before, or businesses have never done before. So let's talk about how the gig economy is new. Part time work, freelance jobs, these things have totally been around forever. So can you explain why the concept of the gig economy in the past 10 years has emerged and what makes it different from the freelance work of the past? It really isn't different. In many ways, the gig economy is nothing new under the sun at all. It really isn't.

I mean, people have been working this way forever. And I think the difference is it used to be limited to the trades, the crafts, the creative professions. There were certain industries and sectors. in which people worked this way fairly consistently, and it was the norm, and that was it. It was kind of a niche way of working. What's different is how widespread it's become.

The fact that working in the gig economy, that working independently and not being a full-time employee and a full-time job has now entered into traditional middle class and executive class roles, that's what's different. And what's also different, is that there is, as you mentioned earlier, the technology to remove the friction from those marketplaces. I mean, one of the reasons that it used to be so difficult to be a contractor or even a part-time worker, you know, looking for a part-time job, is that it was just too hard.

I mean, it was hard for companies to kind of excavate where are the part-time workers, where are the independent workers, are they any good? And it was very difficult for independent workers or part-time workers to find those positions. Technology has removed all of that friction. It's made those opportunities much more visible, much easier to access, more transparent, and much more fluid. What we're seeing is, you know, it's kind of a virtuous cycle. They're easier to access. They're easier to obtain. So there's more efficiency. There's lower cost. So then more people are doing it. And that's the way it's going. It's only going to be growing because it's it's only easier and easier to do,

the more people participate in that system. Yeah, and with technology, I think it's also help build the trust and the transparency, because a lot of these apps and platforms, they have reviews. So basically, you're able to see even like what this person you might hire looks like and what their rating was for their work,

whether they're driving you around or whether they're gonna be designing some graphic design asset for you. So I think that that's another fact is that it's bringing trust into this type of work. I mean, I might disagree with you on that. I think there's a significant amount of grade inflation on a lot of these platforms and a lot of the ratings.

I mean, I think they can be useful, and there is some variability in ratings that can be informative. But at the end of the day, I think, just like hiring employees, you know, it's really what are you looking for and what are your particular needs? I mean, if I hire some people, somebody who's a five-star editor to edit an article that I've written, that person may or may not work for me. They might be a five-star writer, but maybe they always write about fashion and style and an area that I never write about,

and they really aren't very good at editing more of a business piece. So I still think there's an element of personalization and customization that determines whether these matches work, despite the rating system. Fair enough. How big would you say the gig economy is? Is there a way that we can measure this? Or do you have any stats that showcase how big it is? Yeah, I mean, I think it's most helpful to think about it as 30 to 40% of the workforce participates in the gig economy in some form. So they're either putting together a portfolio of gigs or they're working, you know, some side gigs in addition to a full-time job. I don't really get too hung up on the numbers because this is such an emerging trend.

the numbers aren't that good. People define gig economy differently. They measure it differently. They come up with different numbers. For me, you know, when you kind of pull it all the studies and surveys together in one place, there is a critical mass that forms around 30 to 40 percent. So I feel like that's a safe range to kind of identify as true. And can you compare and contrast a gig economy worker with a traditional worker? What are the main differences in their lifestyle and things like that. To me, the biggest difference between a gig economy worker and a traditional worker is their mindset. So a traditional employee has a mindset that is relatively more passive. They sort of

outsource their professional development, their sense of security and their financial stability to an employer. And they, you know, kind of settle into a job. and don't really worry too much about anything outside of that. There's a level of kind of passivity and complacency that goes along with that. That isn't possible in the gig economy. So when you look at people who work independently, it's a completely different mindset. They really have internalized and taken control of their own career and their own trajectory and their own sense of financial well-being.

They decide how much work they want to do. They figure out who their ideal client is. They assess what their value is in the market. They test that in the market. They set their own rates. They decide how much they want to work and where and when they want to work to earn the money that they need, to buy the lifestyle that they want. It's all completely personal, customized, proactive, strategic, and active. So very different mindset.

And do you know why gig work is appealing for some people? where it's not very appealing to others? Yeah, I mean, if you look at surveys of independent workers and even just the interviews that I've done for articles and books that I've written on this topic, really the reason that people want to work independently is they want control over their life. I think that's a very appealing concept to most of us

when we hear it. I mean, who doesn't want to control their life? When you work independently, you can decide what hours you work, which means you can accommodate your personal priorities and you can balance your professional life with whatever else is going on in your life, your athletic endeavors, your creative pursuits, your family, other personal obligations or goals that you might have. So that control, that ability to set your own schedule, to set your own weekly, monthly,

yearly schedule is so important to people. It's also really important to be able to have control over your income. I mean, when you work a full-time job, you take your salary. And you might negotiate it, but it's within a range and you're kind of a price taker. When you're in the gig economy, you're still somewhat of a price taker. I mean, you have to set a price that the market will bear, but you can decide to work more or less. You can decide to branch out and do different things. So, you know, I might start as a coached individuals, but I just, I might decide, hey,

I'm not making enough money. I'm spending too much time on this and I'm not making sufficient revenue. I want to move up and start coaching and make corporations my clients. You know, they pay more, they're more reliable, they have longer contracts. And so I can pivot my business model to either earn more money or work less or whatever my goals are. And I think that that freedom and control and autonomy is really important to people. That's what drives people to independent work. And I think what is not appealing to people is that they are fearful. You know, they are afraid that if they leave their job, they won't be able to support themselves, that they won't be able to make enough money, and that they won't be successful. So it's the fear of going

out and doing something new, as well as the misperception that they have security. When you talk to full-time employees, many, I would say the majority, feel like because I have a paycheck that goes into my account every two weeks, I am secure. I have security. And it's simply not true. I mean, they could be laid off Monday, right? I mean, nobody has job security. But in their minds, they perceive that they do. And it's very difficult to let go of that perception. Yeah. So you say for workers who are skilled, the gig economy provides opportunities to turn good jobs into great work. And for less skilled workers in traditionally bad jobs, it offers the potential to turn those bad jobs into better work. So it's not a perfect solution, but it puts people in a better situation. So for example, a quote unquote bad job is like working at McDonald's, whereas now those same people can work at Uber or task. grab it and improve their quality of life by choosing when and how much they work. What are your thoughts on that? Yeah, I think that's an important distinction because I feel like when people talk

about the gig economy, people who are negative on the growth of the gig economy often point to lower skilled workers as being exploited or, you know, ending up in really bad circumstances because of the gig economy. And I'm not going to say that the gig economy is perfect or, you know, that solves the problem that is systemic in our economy and our society, that people are poorly paid and lack access to benefits and safety nets and things like that because it doesn't. What I like to point out, though, is that these problems are systemic and they do exist in our traditional jobs economy. So right now, lower skilled workers end up working for, you know, fast food chains, for retail establishment. You know, there are stockers at Walmart or they're

cashiers at McDonald's. And those positions are what we would classify as bad jobs. They're not well paid. You know, the people who are working them don't have access to employer provided benefits. And they don't have any control. They don't have control over how many hours they work, when they work, and therefore they don't have any control over how much they make. I think what's appealing to low-skilled workers about the gay economy is although their economic situation stays basically the same in the sense that they're still not well paid and they still don't have access to employer provided benefits what changes is they do have that control so they can decide when they work which allows them to maybe

manage their financial lives differently so you know they can be home after school and not have to pay for after school care for example because they get to decide when they work they can also decide how much they work which is something that somebody who's waiting to get assigned shifts can't do. So they do have some control over how much they make. You know, if it's on the run up to Christmas, they can say, hey, I'm gonna drive on the weekends because I wanna earn that extra money

to have a fabulous holiday, right? Whereas before, that wasn't within their control. So it's not a solution that's ideal. It's not a solution that's perfect, but it's a step in the right direction of improving the quality, quality of life and the financial lives of lower skilled workers who don't have very many options to begin with.

Gig economy sounds great. It's obviously a step up in the right direction for some people, especially if they're in bad jobs. It gives them more flexibility and control if they're able to get gig work on some of these new platforms. But it's definitely not all roses and sunshine. So what are some of the threats for workers in this space? At Yap, we have a super unique company culture.

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The people that are struggling the most with working independently are the ones for whom it came out of the blue. It wasn't their choice. survey independent workers, the vast majority are working this way by choice, more than 75%. But there is a minority group, about 25%, that are working this way because they're forced to. So they would prefer to be in a full-time job, but they can't get one. And a person in that situation might look like, you know, a middle manager at a large company that was laid off during a downsizing and they're not able to find another job. Or it might be somebody like an

executive assistant, you know, who worked at a company for 20 years was let go and now maybe can find work, but not anywhere near the salary and benefit levels that they were earning, you know, after 20 years at one company. So those people are dissatisfied. They feel very insecure in their work. They are often forced into situations where they are making less than they were before. and they are stripped of the benefits and the protections that they enjoyed as a full-time employee. So that's a picture of the type of person that is struggling in this new way of working. How about regulations when it comes to this type of work? Does the gig economy make us rethink the role of government in any way?

Is there anything about regulations that you want to mention in regards to this space? You know, I'm a policy wonk, so I feel like that could be your last question, and I could just keep talking, but I won't. Because at the high level, what I would say to that is we have a labor market in the U.S. that essentially penalizes you if you don't have a full-time job. So what that means is we have a labor market that is very supportive of full-time employees. If you're a full-time employee, you have access to benefits and protections and rights

solely because you're a full-time employee and a full-time job. As soon as you decide or are forced to work differently, if you say, hey, I'm entrepreneurial, I want to go hang up my own shingle, or you're laid off or downsized or whatever, and you can't get a full-time job. As soon as you're out in that independent world, our labor market does a disservice to you. It essentially penalizes you. You are taxed additionally for working independently. and you are stripped of the benefits and protections and rights that are only awarded to full-time employees.

So it's a very asymmetrical labor market that doesn't really work for the way that we work today. And I think there's this huge debate about how do we classify people and are you an employee or a contractor? And again, that system is an artifact of a completely different way of working. You know, it just doesn't capture the range and variety and choice about the way that people can work today. Our labor laws, our labor market, our regulations, our tax system all need to be updated to reflect this new way of working. And to me, what's surprising about the gig economy is that despite the fact that you're

so penalized for leaving a full-time job, the gig economy has grown so tremendously. you would almost think that it would limit the growth of the gig economy. And maybe it is on the margin. Like maybe if our labor market was much more supportive of independent workers, the gig economy would grow even faster than it is today. But I do think we have a lot of work to do on the regulatory and policy side. Got it. And let's focus on how we can thrive in the gig economy and what skill sets or even personality traits

that we should start to build in order to succeed in this new way of work. So can you just talk about how we need to kind of change our definition of success in order to do well in the gig economy? Yeah, you know, that's a really important question. It's actually the first chapter of my book because what we had talked about earlier, this idea that, you know, for traditional full-time employees and for our traditional jobs economy, success was pretty easily defined and it centered around, you know, titles and climbing a corporate ladder and salaries and kind of traditional measures of success that everybody was pursuing. I think what's different and important about the gig economy is there's so much more space to define your own success. And that's a really important place to start if you're thinking about transitioning to independent work.

because it's not going to work for you to go out and work independently unless you have a clear idea of what the goal post is, right? Are you going independent to try to maximize your lifestyle, to try to work flexibly, or have summers off with your kids, or take every afternoon to train for the marathon? Like, is that what's important? Or are you transitioning to independent work

to maximize your income? Because that looks like a very different plan. So I think for my reader, and for my students and for my coaching clients, the place I always start is please reflect on what success looks like to you. What is your definition? What are the values and priorities that are important for you to live in your life and how do you build a lifestyle that reflects those and that allows you to live them? That has to be the first place to start in order to set up the path for you to truly be successful and feel like you're successful in what you do.

That was very powerful and very good advice. So thank you for sharing. For my understanding, diversification is the new normal in the gig economy. So how is building a portfolio of gigs something that would benefit us in today's age? Yeah, I mean, in investing, they say diversification is the last free lunch, right? You know, this, idea that by diversifying, you can actually reduce risk in a way that's essentially free. And it's the same in our professional lives. I do think it's interesting that if you go talk to any investment professional, they will tell you, don't put all your retirement money into one stock. You know, you can't control what happens with that company. Any number of things

could happen to that company that could really destroy the value of your retirement account. You don't want to do that. Make sure you invest in a broad portfolio of stocks. That's the way to protect your assets and grow them. It's the same idea for our professional lives. You know, if we put all of our employee eggs into one employer basket, we're incredibly concentrated. That's incredibly risky. Anything could happen to that company, and we could be out of a job. And when we're out of a job, our income goes from 100 to zero. That's risky. When you talk to independent professionals, people who work independently, what they will say is they feel much more secure in their financial lives working independently. Why? Because they have a diverse portfolio of

clients. They know that if one client goes out of business or their budget is cut or the person they're working with ends up getting laid off, they still have their other clients. Their income might go from 100 to 80, but it doesn't go 100 to zero. And that makes people feel much more secure. They feel like they can count on their income over time. It's also true that they feel more in control of their financial lives, which we've already talked about in this conversation, the idea that, look, if I want to make more money, I can choose to work more, or I can choose to spend more time on business development, or I

can put out a marketing campaign or I can go take a class and increase my skills and become more valuable in the marketplace. All these things are in my control. I can decide whether to do them or not. And that makes a huge difference in terms of feeling secure for people. Yeah, totally. So in terms of this diversification, one might wonder, is there a benefit to being an expert or a specialist anymore or should we just kind of dabble in a lot of different things?

things and be pretty good at a lot of different things instead of just focusing on being an expert. What are your thoughts on that? Expertise is still valuable. There's no question. If you look around at some of the most highly paid positions in our economy, they are for people with deep knowledge or deep understanding or deep experience, doing specific things or understanding specific topics. So that is in no way meant to discount the value of expertise.

What I think, though, is expertise is no longer something you can rely on for a few decades of your career. The world is changing too quickly. I think what's more important in our economy today is the idea of continuous learning, continuous skill development. That's the difference. You can have expertise, but it's more about how can you build on that expertise or extend that expertise. The example I use in my book is, I'm a writer. have expertise in writing. I've written books, I write articles, but I can extend that in order to become more valuable or to branch into other industries and sectors. I could take up writing

essays or I could start writing corporate content or I could start writing marketing copy or I could move into mystery novels or romance novels, right, that sell more copies than your average business book. So I can take my expertise and develop it and different ways and extend it and expand it and amplify it. So that's not to say expertise is definitely not a static thing. But I do think there is still value for expertise, but you have to couple it with lifelong learning and skill development to be successful. Another fascinating concept you talk about in the book that I wanted to just touch on is called the deferred life plan. And basically it's our tendency to focus on things we should do or

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Yeah, fam, hear your first. This new year with Shopify by your side. What the gig economy does is it allows us a structure that doesn't require that. So instead of saying, you know, someday, you know, when I retire, I'm going to go live on the beach. You can say, you know what? I expect to, you know, work in this job. I'm just out of college or out of graduate school. I'm going to work a job for two or three years, gain a lot of experience. And then I'm either going to, you know, take a summer off and then move into a different job or I'm going to, you know,

take a summer off and then take that side gig I've been working on and turn it into a real business, you know, give it a go, be an entrepreneur. But the point is you can decide ahead of time, I want to take that summer off or I want to take a year off and I'll go live on the beach then. I'm not going to wait until I'm 60. I'm going to do it when I'm 32. That's what the gig economy allows. There are so many more natural breaks and lulls in which you have the opportunity to say, hey, this gives me the time and the space to do this other thing that I'm interested in doing.

And I think it's incredibly more interesting and fulfilling to be able to do that. Now, in my class, where the students have problems, and certainly with my clients that I coach, is, you know, what does that mean for me? Like, what are my personal goals? What would I do with that kind of time? I don't even know. Like, it sounds good, but I don't really know what I would do with it, right? So what I have them do is an exercise.

Well, I have them do a series of exercises around building. this concrete list of things that they've always had in their mind. So I start with, you know, imagine that you had a year off and a year's salary to go with it. What would you do? And the reason that I structure the exercise that way is to remove the normal constraints that limit our imagination, right? So I give them time and money. Those are normally the constraints. Then their imaginations run wild.

And that's okay because guess what? at the end, they have the list. They have the list of things that they really want to do. And they can work from that list going forward. You know, they can take a huge plan and bring it down to size and make it something they could do in two weeks or a month and start ticking off the list, right? So it's an incredibly valuable exercise and it's so amazing to see like the joy and the fulfillment that people have by feeling like they can execute these personal goals all along.

Yeah. It's like an incredible thing to watch when people actually start doing that. Yeah. This is one of the most interesting parts of this to me is the fact that it's no longer about like working 40 years of your life, like a mad horse, and then retiring and then relaxing when you're 65, 70 years old and saving money for that. I'm interested to hear like your perspective on retirement in the gig economy with variable income streams, it's probably very hard to save for old age if you're a gig worker. So how should people plan for retirement or do you think retirement will happen at all for people who are gig workers? Well, we're already seeing that retirement as we traditionally think about it. You know, I love the analogy of the horse crossing

the finish line and then collapsing because that's kind of the traditional model. And what we're seeing in the current baby boomers, you know, they're reaching retirement age and they aren't in a position to retire. They don't have the money saved. And by the way, they don't want to just stop working. You know, they've seen their parents stop working and become sedentary and become isolated and disengaged. And that's not the life that they want.

So when I talk to people who are in the baby boomer generation, they want to continue to earn money and they want to continue to remain active and engaged. They don't want a full-time job. They don't want that level of constraints, but they do want to remain professionally active. And I think that's a more realistic model for what the later part of our careers is going to look like, which is we might kind of slow down a bit, but we're in general going to remain active and engaged doing something. Maybe it's something that looks like what our main job has been, but maybe it's something completely different. For people who are in the throes of their working lives now,

you know, the best advice is still to save. I mean, there's really no way to get around that. Nobody's going to do it for you, right? Companies aren't going to do it for you. The government's not going to do it for you. It's all on you. So the best advice is still to save. And that's partly because even if you plan to work into your 70s or 80s or,

you know, never stop working, we don't always control that decision. People have health problems later in life, and that's the most common reason that people stop working is because they're not able to continue working because of various health problems. So, you know, for people who are still working, you know, saving is still a really important priority and goal. The good news is when you're an independent worker, you can save more and faster for retirement if you're a high earner than if you're an employee. But of course, I think it's worth emphasizing that there's a big difference between having the ability to save

and then actually saving, because what we see across the board in the U.S. is that nobody saves well for retirement, even high earners. So it's a problem. I mean, the gig economy does not fix our retirement problems for sure. But I do think the old model of just kind of sitting in a lounge share is over. Yeah, definitely. And so let's stay on this topic of financial flexibility in the gig economy, if you're working in the gig economy, can you talk about the rise of the subscription economy in parallel with this gig economy and why access is the new ownership nowadays? Yes, I'm glad you brought this topic up. I think it's so important. So I call this the access economy and to me, this is the personal finance revolution of our generation. I think

it's so impactful on people's financial lives. And by the way, it's still a tiny emerging trend. So I think there's only good things to come from this. So what I mean by the access economy is instead of owning things, so instead of taking a whole bunch of time to save up a big pile of capital or more commonly, instead of going out and buying something really big and going into debt, to pay for it. The access economy changes that game. What it does is it allows you to access the lifestyle or the things that you want without having to buy them, which means you don't have to go into debt to own them. So it becomes a variable cost in your financial life, not a fixed cost. Because of course, if you have a car payment or a mortgage payment or a credit card payment,

those are fixed costs. You have to generate the same amount of revenue every single month in order to pay for that thing. In the access economy, everything is variable. I'll use the example of transportation. I haven't owned a car in 10 years. So I access my transportation. It's a variable cost. When I'm at home living in the city, I'm using zip car and Uber and the subway and hubway bikes and I'm walking. And my transportation costs vary depending on how much I'm out and about. When I'm away on a business trip, my transportation costs go to zero. I don't need to earn revenue to cover my transportation that month because I don't have a fixed cost that I'm trying to cover. That's what the access economy does. You can replace a mortgage with rent.

You can replace a car payment with access transportation. You know, I rent a lot of my clothes. I use rent the runway and a lot of the large retailers are starting. to have a rental option. You know, if I have a wedding or a graduation or a big party or a New Year's black tie event, I don't have to go buy something and then pay off the credit card for that. I can just access it, rent it, boom, it's done. I don't own it. It's not my closet. I don't have to store it. I don't have to pay for it. There's an enormous amount of flexibility and freedom and choice and variation in being able to access our lifestyles. And by the way,

for a lot of people you can access a much higher lifestyle than you can own so it's more rewarding people enjoy it more so a lot of my listeners are at the stage where they might be considering buying a home for the first time and i noticed that you had three myths of home ownership in your book that i thought was really interesting advice that i'd like to share with my listeners so if you don't mind i'll trigger each myth and you can explain it a little bit more so myth one is my home will appreciate and value. Yes, I mean, a lot of people have this idea that they will buy a house and that it's like an automatic investment or savings plan, right? Like there's no better place to put their money. But in fact, if you look around the U.S. as a whole, of course there are

some real estate markets like Boston and New York and San Francisco that have done phenomenally well over the past decade or decade and a half. And homes have appreciated enormously in value. But there are many more markets in the U.S. in which that is not the case, where home prices have stagnated or even declined. And so if you're making a home ownership decision, like an investment decision, with the assumption that homes only appreciate over time, that's a myth. That's a problem. And you should rework your model to assume that your home stagnates and values, stays flat, and see if it's still an attractive proposition. Myth number two, owning builds equity. Well, that's related to myth number one, which is when you buy a house, the first, let's say,

decade of payments are primarily interest payments. So you're building very little equity when you're paying your mortgage. What most people are assuming is that they're building equity because their home is appreciating, which as we discussed certainly doesn't always happen. So when you build a model that assumes that your home does not appreciate, you know, the idea that you're building equity falls apart in many cases. Myth number three, I can deduct mortgage interest payments on my taxes. Yeah, mortgage interest payments are only for people who itemize their deductions.

So if you are not a person who itemizes your deductions on your tax returns, you don't get a mortgage interest deduction. And now under the new tax regulations, because the standard deduction is so much higher, even fewer people will be itemizers. And so the mortgage interest deduction applies to even fewer people. It's unlikely for the average person that they will benefit from that deduction. Got it. And so my last question before we go is basically your perspective on the future of the gig economy

and how it's going to evolve. My view is that the gig economy is here. It's here to stay. It's growing and it will increasingly represent what work looks like in the future. I mean, the way that I end my book is that I talk about this idea of asking kids what they want to be when they grow up. And traditionally, kids have had an answer to that. You know, I want to be a doctor.

I want to be a lawyer. And what I say is, you know, the kids of the future are going to have a list because careers are going to be made up of portfolios of work and they're going to change several times over a lifetime because the economy is so dynamic. People are going to be lifelong learners. They're going to have to change their skill sets over time. And we're going to do a variety of professional things over our working lives. The idea of doing one thing for 40 years for one employer, that's gone. That's the old model. That's not the future. Awesome. And where can our listeners go to find out more about you and everything that you do?

The best place is to go to my website, which is dian Mulcahy.com. And if you're interested in keeping up with my work on the gig economy, go to my contact page and sign up for my monthly newsletter, where I curate the articles that I've written, news that's going on in the gig economy, and have a question of the month to help you think about making the transition to independent work successfully. Great. Well, thank you so much for your time. I enjoyed this conversation. Thank you for having me. This has been great. I appreciate the thoughtful questions. Of course. Thanks for listening to Young and Profiting Podcast. If you enjoyed this episode, don't forget to write us a review on Apple Podcasts or wherever you listen to the show.

Follow Yap on Instagram at Young and Profiting.com and check us out at young and profiting.com. And now you can chat live with us every single day on YAP Society on Slack. Check out our show notes or young and profiting.com for the registration link. You can find me on Instagram at Yap with Hala or LinkedIn. Just search for my name, Hala Taha. Big thanks to the Yap team for another successful episode. This episode, I'd like to give a special shout out to Tim and Parsh. The duo is helping me launch a new Yap course that will provide best in class training for up-and-coming podcasters around the world.

Right now, we're heads down creating the content for this program, and we can't wait to share more details in the coming weeks. This is Hala, signing off.