With this post, we’d like to start a new series: “Business Ideas”. We’re going to write about or collect side hustle/business ideas that hopefully inspire and help our readers to get out of the rat race and reach financial independence sooner.
So here is the first one, based on our own experience:
In a previous post, Mrs W mentioned that she earns €154 an hour cleaning the stairwell in our building and promised to spill the beans in an upcoming post. Well, that post has come up. Enjoy!
Basically, one day we were looking at our expenses and realised that we were paying the caretaker (Hausmeister) of our building quite a lot of money to do not a lot of work. Mr W immediately became obsessed with finding a way to optimise the situation and didn’t stop until he’d optimised the f**k out of it.
He came up with a crazy idea: maybe we could become the caretakers of our building and earn back the money we pay as well as the money all our neighbours pay? He made a few guestimates to see whether it would be worth it, how much work would be involved, how much we could earn with it, and so on. To put it briefly, after a bit of cleaning and running the numbers he came to the conclusion that our average hourly rate would be €64 if we set it up as a Minijob (a special kind of job that everyone in Germany is entitled to have in addition to their main job, where you can earn up to €450 a month and pay no income tax). At the time, he couldn’t have known exactly how much work would be involved. As I said, he was working with guestimates. And yes, he was wrong. Wildly wrong.
But let’s start at the beginning. Our original idea was to set it up as a Minijob for Mrs W because that would mean that we wouldn’t have to tax the income. We had to give up on that idea pretty quickly because when Mr W talked to the factor (the guy who manages the building – Hausverwaltung in German) it turned out that we’d have to drop our price or else it wouldn’t make financial sense for him to pay the insurance and other costs associated with a Minijob in addition to paying us. We’re not talking about a lot of money here, but still. Then we decided it’d be easier if Mrs W became self-employed as a small trader (Kleinunternehmer). Registration took 10 minutes at the Amt für öffentliche Ordnung and cost €47, in case you’re interested. She can write invoices for the exact cost of the work she does. Since she’s not allowed to earn more than €17,500 a year, she doesn’t have to add VAT (Mehrwertsteuer) to her invoices. That’s a really great thing, since it essentially lowers her asking price by 19% compared to companies who have to add VAT to their invoices! Mrs W does have to pay income tax on the money she earns, but it still seems like the easiest solution. We don’t need any special permits, we just need to have a registered company so that everything is legal and we had to apply for a tax number. So we signed the caretaker contract.
The original plan was that we would earn €300 a month including clearing away snow (Winterdienst). We decided not to do the Winterdienst for insurance reasons (we would need better personal liability insurance (Haftpflichtversicherung) to protect our asses from being sued by anyone who fell over on our bit of path because we hadn’t cleared it properly – too complicated, too expensive, too much hassle). So in the end, we agreed on €250 a month. As a compromise, Mr W found a company that specialises in Winterdienst and arranged for them to come and clear any snow or ice for €35 a time. Since there’s been practically no snow over the last two or three years, it was easy to persuade the factor and the other people who own flats in our building that this was a fantastic idea. They went for it!
So they pay us €250 a month for to clean the stairwell, and in winter we don’t have to pay attention to whether or not it snows. Ok, that’s not a lot of money, but let’s take a look at how much work is actually involved. This article would be pretty boring if we didn’t get down and dirty with the numbers.
- Hoover and wash the floor in the stairwell every 1-2 weeks (our building has four floors plus the cellar)
- Take out the bins (plastic, paper, organic waste, general rubbish)
- Wash out the bins a couple of times a year or whenever they get really stinky
- Clean up and sweep up in front of the building
- Trim the hedge (it’s pretty small)
- Clean the door handles, lift and widows whenever they need it
- Hoover the floor in the cellar and washing machine room from time to time
- Change the light bulbs in the stairwell, cellar and washing machine room if they burn out
We have to say that our stairwell doesn’t get very dirty and despite the fact that some of our neighbours are pretty weird, they’re generally civilised and clean. That helps a lot…
Like the rest of our expenses, we keep an exact record of the time we spend on this. Every single minute! Because we don’t like to be ripped off. According to Mr W’s smartphone (and Mrs W’s Excel sheet), over the first year we’ve spent exactly 1089 minutes on this job. For that time we got paid € 2800 (€3000 minus the €200 we had to pay somebody else to clean the stairwell while we were on holiday). That’s €2,57 a minute. €154,27 an hour. Yup, compared to Mr W’s original guestimate of €64 an hour, he really got it wrong. And unfortunately, that’s taxable income. That’s how the system works.
Ok, we admit that Mr W cheated a bit.
Before Mrs W opened her company to take on the work, to get an idea of how long it would take to do the cleaning, Mr W grabbed our vacuum cleaner and timed himself cleaning the stairwell. From the outset he realised that he was losing a lot of time plugging and unplugging the extension cable and dragging it about with him. After we signed the contract, he thought a bit about how to optimize things. He opened ebay. He opened Amazon. And hey presto: he found the answer in a battery operated, cordless vacuum cleaner! A proper quality machine, not one of those jokes amateurs use. It turns out God loves caretakers! Oh, and the best part of it – the other owners of the building helped pay for it! Not just us. Mr W checked to make sure before he bought it.
Since we have the new monster vacuum cleaner, it takes literally a few minutes to clean the stairwell. Seeing Mrs W cleaning with such a big smile on her face is priceless. It’s a joy to see.
But what if we go on holiday?
We thought of that too. Mr W found a guy to sub for us while we’re away. (He literally saw a guy in the street who looked like a caretaker, heard him speaking Hungarian, and ran after him. He likes to give work to other Hungarians where he can.) Above board, with a contract, and for less money than we’re getting. Case closed.
But you can’t live on 250€/month…
No, in Germany it would be difficult. But, if I wanted to and if I needed to, I could just go and ask around in the neighbouring buildings. Maybe they’re willing to pay less for somebody who is actually near, rather then pay huge companies. Since you don’t spend time on travel, you can most probably underbid the current caretaker (especially if it’s a company).
Quick and dirty calculation: Let’s say you want to do this. Let’s say you find 10 such buildings in your area, including yours. You earn 2500€/month for 15 hours of work.
But then you could say…eeeh…. 15h of cleaning work/month is just too much for your fingernails and you rather watch TV in that time. Well then….
Outsource that work for 15€/h (225€/month) and you make a profit of (2500€-225€) 2275€ per month for doing virtually nothing. Bang! This is you being (sort of) financially independent!
In conclusion, €3000 a year isn’t much, but it ain’t pennies either. It more than pays for our holidays. It also doesn’t hurt Mrs W to do something active. Question: why bother with university when you can become a caretaker and earn ten times the hourly rate of the average office worker?*
This hourly rate is only possible because we don’t have to commute/travel anywhere. That is key!
Have you ever calculated your hourly rate after you also included your travel time to/from work? Don’t do it … it’ll be depressing!
Makes you think, doesn’t it? What’s your hourly rate? Can you think of any crazy ways to optimise it? Have you already found crazy ways to optimise it? We’d love to hear your stories.
*Ok, ok, so there are some exceptions – if you want to be a doctor or a lawyer or something like that, please go to university!