Wednesday, March 03, 2010

Unstable income stream from tutoring

I've got more things to share regarding my career. Frankly, it's personal ranting too for the pent up frustrations. This post is about the instability of the income stream. For those of you who is used to getting a fixed pay, well, this will be something you won't be used to. I'm going to show you something rather personal. I was debating with myself whether to put it, but heck lah. I'll just remove some numbers and some lines.

You can see my income from tuition, starting from 2003 to present. From a look, you can observe that the income per month varies widely - from a low in November-January to a peak in August-October.

November to January is a lull period. Exams are over and the students are overseas for holidays. Perhaps you're also going on a holiday yourself too. Usually I'll give myself a break and really shake leg for a few months to recuperate for the next year. January is also the Chinese new year period, so a lot of cancellations and delays will be met. In the past, I hate this period of time because parents will nag at me for staying at home for the entire day for some days of the month. It feels like I'm not working.

These days, I can't wait for my lull period. What a big change in attitude.

August-October is the peak month because this period is the crucial preparation period for several major exams. I'll have absolutely no life during this period. 'Tis the life of a tutor - you wait to rush and you rush to wait.

How to remedy this? Get a variety of students from different levels to even out your peak periods. Imagine if you take all 20 sec 4 students who are taking O'lvls. I can assure you that you'll eat grass from November to January.

Having an unstable income stream also means that when you are earning more, don't be trigger happy and spend your money all away. This is meant to even out your bad months, so keep saving up. The idea that, in this line of work, there are very good months and very bad months is extremely crucial, so I cannot stress enough of it. Do not eat all your fruits when there's a good harvest this year; next year there might be a drought.

Is a stable income so much to be desired? My standard reply for questions on the unstable income of a full time tutor is this - I'll rather have a unstable and high (average) income than a stable but low fixed income. I don't see how stable it is when your pay and your longevity in the job is determined by others.

(Grey commented that the life of a tutor and a professional trader is quite the same. I couldn't agree more, though I must add that the success rate of being a tutor is much higher than that of pro trader. There are no bad professional traders because they will be out of the game in no time. In contrast, there are plenty of bad tutors out there. I welcome them with open arms ('tis my honest opinion with no bad intent) - without bad ones to compare, the good ones cannot shine through. I'm sure Grey, you'll agree with me.)


Musicwhiz said...

Yep LP,

The income is unstable, that's a fact for tuition. I guess for myself, I prefer a much more stable income stream and I use tuition as part-time supplement for this income. Investments make up the rest of the passive income.

Cheers and Regards,

Anonymous said...

Hi LP,

When I was a trainer, my stable income comes from the academic evening classes. They are plentiful and all year round as I was teaching several subjects.

All training courses are by individual contract. The stability comes from big organisations, esp the stat boards which budget the entire year for that course.

During insurance days, the stability comes from general insurance contracts, PA, Fire, Motor,which are flat commissions year after year and renewal of commissions from life and endownment. They covered my car and entertainment expenses. :)

All these while holding a job, which provided CPF for my flat until training contracts were plentiful then i quitted.

Altogether 5 sources of income then: 4 active and 1 passive. My aim was to increase the passive and lower the active over the years. and that was what I did.

I am on the look out to rent the tuition center as soho -- that will generate positive cash flow with good yield. No hurry though..

As self employed, there are more planning to do :)


finanicalfreedom said...

Hi LP,

Really good piece of posting here. Good for you to share the pros and cons of being a full-time tutor.

I guess the difference is that you are relying solely on this source of income so the volatilty impacts you more.

How about setting up a tuition agency? Do a good website and just match students to tutors. The agency that I used to get my first student basically just called me twice and it is hard to imagine that just by making a few phone calls, they actually earn half of my first month's pay. Really good money for them!


la papillion said...

Hi mw,

Actually I'm fine with the unstable income. Just need a little planning that's all. It probably makes me a better manager of money than most pple, I'll say.

Not for everyone, I always say.

la papillion said...

Hi HH,

Thanks for sharing your experiences :)

I always tell jade that you should be her role model, as you all do quite the same stuff in general.

Actually I didn't mention it, my career wouldn't have become what it is now if not for your guidance. Take this opportunity to thank you :)

la papillion said...


Actually I don't mind the volatility. I'm just saying that a person jumping into this line have to be aware of it.

Agency is not really my cup of tea. I detest them in general, and have not been using their services since my first year. Bad experiences.

Anyway, I'll stick to my main weapon - tutoring. I think I can do that with more joy than calling someone up to connect them. It's not quite my personality.

Thanks for the suggestion though, you might want to look into it yourself :)

Anonymous said...

Hi LP,

I don't deserve. Still feel bad for not planning and executing the unit oppposite.

It was 140k, now renting at 3200, 27% yield. Could have been your passive income.

Need to spend more time reading, thinking, planning and executing.

Cheers to days ahead!