Money Wise: Traipsing Through Moonlight Is Not Always A Bad Thing

Soham Parekh made headlines a short while back in various parts of the world for the number of gigs he had taken up simultaneously. He was moonlighting. The old definition of the word, and the reason moonlight is referenced, is the act of having a second job, typically done secretly at night. Parekh’s story is not unique, but the length he took things to was the spark for a raging debate on the legality and ethicality of moonlighting.

We threw out a few questions on social media to figure what people think about this and the results were… interesting. In the first place, we asked if moonlighting should be allowed. Nearly 27% of respondents said, yes, always. Another 27% said it depended on the contract. The rest were split between two responses – that it’s disloyal and the other that it was fine as long as it didn’t conflict with your regular work.

We then asked whether our respondents had ever had a secret side hustle. As many as 20% said “yep, thriving quietly” and an equal number said their boss knows. But most interestingly, 50% said that they’d thought about it.

And finally, we asked what they’d do if they found out a team member had a side hustle. Most – 38% – said that they would mind their own business. Another 28% said they’d support their colleague, while 15% would ask for a referral. The last response is probably why the debate has been raging – 18% said that they’d warn HR.

On the show Money Wise this week, I spoke with Ankita Ray, partner at Cyril Amarchand Mangaldas, about the legality of moonlighting. And what I learnt is that it’s not always something to do on the sly. The first distinction one has to make is whether one is employed or on a service contract. In the former scenario, the best thing to do is to speak to your employer to ensure that you’re not breaking any rules. Usually, employment contracts, where a company is contributing to retiral benefits, do not provide for other income-generating activity. Of course, exceptions can be made on a case-to-case basis.

In the case of service contracts, if the intention is to take up multiple contracts, one has to ensure that the contract doesn’t stipulate that one can’t take up additional work. Companies are increasingly working with individuals that have unique skillsets and so, are aware that they can’t demand exclusivity. However, it is best to discuss your intentions with potential clients, because in some cases they would prefer that one does not work for competition.

The best approach, in my opinion, is to have a contract that is a win-win for both the individual and the company. One of the biggest worries individuals have is that they’ll be taken advantage of once they sign a contract. Someone I know found an interesting workaround. They signed a contract with a defined set of deliverables and also provided the company with a number of “credits”. Each credit would be consumed to do a task that was outside the originally agreed upon work. And once these credits were all exhausted, the company would pay for additional credits.

From the company’s perspective, this is a lucrative deal too, because it defines the cost of work and ensures that the professional is motivated to continue to deliver on time.

I also spoke to Harshvardhan Roongta, the co-founder of Roongta Securities, about the other pain point for many professionals – the issue of cashflow management. Roongta believes that insurance – both health and life – is a must have for everyone, but even more so for professionals. Life insurance, of course, is only required if one has a financial dependent. But health insurance is essential, particularly because of the lack of a corporate cover.

Beyond this, Roongta feels that the goal should be to try and create a portfolio that pays you a monthly salary. Most professionals experience periods of feast and famine. The most important thing to do during the feast is to squirrel away as much as possible to tide over the famines.

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Here are a few more stories you should consider reading this weekend.

CAGR To XIRR: How To Read Your Mutual Fund Returns?

With Saving Rates Dipping As Low As 2.5%, Here Are Five Alternate Spots To Park Liquid Cash

JioBlackRock Launches Four New Mutual Funds — Three In Equity For First Time

Planning To Study Abroad? Savings Plan To Scholarships — Expert Strategy To Manage Your Expenses

EPFO Withdrawal For Home Buying: Factors To Consider Before Making The Move

Until next week, happy reading!

Alex