Our friend “5am Joel” once made an extra $10,000 in just 6 months by working the graveyard shift at the post office. He was 20 years old, and sure, he sometimes wished he was out partying with his friends. But instead, he was able to take that money and invest it in a rental property. Today, Joel owns several real estate investments, lives a pretty sweet life, traveling with his family often, working on projects he’s passionate about, and genuinely making the best out of every day.
Looking back, those six months were a small sacrifice to make in the grand scheme of things. In fact, six months is less than 1% of your life! Sometimes doubling down on work in the short term can set you up for incredible opportunities in the future.
Anyone can pick up a side hustle or temporary gig work these days. But choosing the right side hustle for the right stage of your life is important. It can have a massive impact on your lifestyle, work ethic, and the ability to achieve your financial goals.
In this post we’re going to cover some of the main things to consider when choosing the best side hustle for you. We’ll also include some questions to ask yourself and more examples of real life people and their hustle stories!
Choosing the Best Side Hustle for YOU
Starting a side hustle can be a great move for many folks. It can help you gain the financial margin you need to get ahead and accomplish your biggest financial goals. In fact, it’s estimated that approximately half of the U.S. workforce has participated in some form of side gig. These side hustles provide American workers with an extra $50 billion each month. That’s not chump change!
However you don’t want to jump right into the first idea that comes into your mind. Picking the wrong side hustle could be more headache than it’s worth. That’s why it’s important to spend some time thinking about what kind of side hustle is best for you before you embark on your side hustle journey.
Side Hustles vs. Gig Work
First, let’s define a few terms that are often used interchangeably but actually lead to very different outcomes.
If you want to build a sustainable side hustle that you can grow over time, it’s important to stay away from gig work.
Gig work is all about trading time for money – think working on apps like Uber or Lyft. While you can typically get started immediately, the pay isn’t spectacular. Plus, you won’t have opportunities to grow your income over the long-term. You don’t get a pay raise from Uber for being the best driver that your city’s ever seen.
Plus, gig work can have an insidious dark side. For example, as an Uber driver you could be putting wear and tear on your car. This makes drivers considerably less than they think after factoring in things like gas and maintenance.
However, side gigs can be really powerful! They can provide much-needed supplemental income during tough times, or even boost your nest egg for investing purposes (like 5am Joel’s story at the beginning). So if you’re just looking for a quick infusion of cash, say you need to make a quick $100 to repair your phone, consider picking up some gig work as a means to an end.
Side hustles are superior to gig work in most cases. They take longer to set up, but come with better benefits and more potential upside. While it could take you many months of hard work to see significant income, you’re not limited by the rates set for you by others.
These types of businesses have potential to grow into something more, earning you even more money in the future. You could even be able to ditch your day job should your side hustle take off.
Benefits of Having a Side Hustle
Creating a side hustle can come with a multitude of lifestyle and financial benefits. Here are a few reasons why creating a side hustle can improve your life!
Earning more money…
I don’t know about you, but in my personal experience “mo money” seldom leads to “mo problems.” A higher income is usually the main reason people start hustling – so they can accomplish important financial goals more quickly. Whether it’s creating an emergency fund, maxing out your retirement accounts, or being able to put a down payment on your first home, side hustles can get you that extra cash.
Diversify Your Income
Even if you’re great at your job, there’s always a chance you could be laid off should your company fall on hard times. But what if you had a plan in place for that? So that even if you lost your job you’d be able to continue working and earning money?
A side hustle is a great way to enjoy more financial stability. When you just work one job, you’re putting all of your eggs in one basket. A side gig where you can continue to work should you lose your 9-5 job can soften the blow. You could even take your side hustle full-time in the event you lose your job.
Bonus- Make sure to create a bare bones budget so that your finances are prepared for any potentially adverse event!
Pursue Your Passions
If you decide to go the more secure route for your day job, starting a side hustle can be a great way to continue exploring your passions while enjoying the steady income that a 9-5 brings.
For example, if you work in data science but have a passion for making marble sculptures, you get to live the artist life when you leave the office. By choosing a side hustle you’re interested in, you can turn the things you’re passionate about into extra cash!
Side Hustles Can Turn Full Time
If you’ve always dreamed of being your own boss but didn’t want to take the risk of leaving your job, a side hustle could be perfect for you. Once you build it up alongside your 9-5, you could eventually put yourself in the position to leave your job and transition into your side hustle full time without taking a pay cut.
And even if you don’t end up taking your side hustle full time, you could use the extra cash to pad your emergency fund or to invest more in your tax-advantaged retirement accounts. This will make you less dependent on your job overall, because you’ll be flushed with that peace out money!
Helping Other People
Perhaps one of the best parts of starting a side hustle is that you get to use your unique skills to bring value to other people’s lives.
Doing work that aligns with our values can make us feel more fulfilled. Whether you give your clients hours back into their day by cleaning their home, hand craft the perfect gift for their grandma, or teach someone how to do something they’ve always wanted to learn, you typically get to feel more connected to the work you are doing.
It Can Help You Transition to Another Field
Have you ever gone to apply for entry level jobs in a field you wanted to transition to, only to find that even the entry level positions are asking for 2-3 years of experience? I’ve been there, and it can be infuriating. 🤬
Say you work in HR, but you want to transition into marketing. It will be difficult to get a marketing job without at least a few months of experience. But if you start doing social media marketing for small businesses on the side, you’ll likely have more success in the future when you apply for jobs!
Creating a side hustle is one way that you can gain that experience in a new field. Freelancing can help you to get those necessary hours of experience under your belt. Then, you can leverage that experience into a full time position in your desired field!
Increase Your Skills
Side hustles are a great way to learn new skills. When you start up your own business, you usually need to take on more than one role. This gives you a tremendous opportunity to pick up new competencies.
Something you might not know about Joel is that a long time ago, before How To Money, he started a blog on the side while working a 9-5 job in radio. Over the course of running that blog he learned valuable skills like search engine optimization and he also increased his writing abilities. While the blog didn’t necessarily bring in a ton of money, he was able to use these new skills to secure a better, higher paying position with his former employer.
Even if your side hustle goes nowhere monetarily, it is almost always guaranteed to be a great learning experience. Be sure to take those newly acquired skills and toss them on your resume!
Makes you more well rounded
Starting a side hustle can also make you into a more well rounded and interesting person! The more you experience, the more people you’ll be able to connect with. Exploring more interests can be an enriching pursuit that brings more meaning and purpose to your everyday life.
In our interview with Wes Moss, author of “What the Happiest Retirees Know,” he discussed how the happiest retirees have specific activities that they are retiring to. Exploring our hobbies before retirement can give us something to fill our time when we leave work.
Downsides of Side Hustles
Starting a side hustle can be awesome and exciting, but there are a few downsides to consider before you throw all your energy into it. Be sure to watch out for these potential pitfalls when creating your side hustle!
It Requires Actual Effort
While there is tons of potential for your side hustle to be a lot of fun, don’t forget that it will take real work and actual effort to get it off the ground.
Like anything good in life, the more time and effort you put into it, the more quickly you’ll start to see the fruits of your labor. However, if you feel like working more throughout the week will burn you out, it may make sense for you to hold off on starting a side hustle until you have more free time.
You Could Be Trading Time for Money
Just like with any other job, if you set hourly rates, you’re trading more of your time for money. And the main downside here is that your time is limited in life. Which means at some point you’ll max out your capability to work and earn more.
It’s important that you take proper precautions to not overwork yourself, and strive to maintain a healthy work-life balance.
A potential solution to this could be to charge per project. That way if you increase your skills and are able to work more quickly, you can increase your ability to make more money without having to just work more hours.
Keep in mind, trading time for money isn’t always bad! Picking up side gigs can be a great temporary way to bring in needed cash.
It Can Be Unpredictable
The nice thing about 9-5 jobs is that they typically come with a salary and consistent paychecks throughout the year. When you step out into the entrepreneurship realm, the pay can vary greatly from month to month.
If you have a super great month where you make $10,000 from your side hustle, don’t blow it all! If you depend on income from your side hustle, make sure to create a cash cushion during those flush months to help you weather drier months.
It Might Go Nowhere
When starting your side hustle, it’s important to come to terms with the fact that you might not be able to get it off the ground. You might spend a little money to get your business started only to discover that the market for your goods and services isn’t as hot as you once thought!
However, it’s still better to have tried and failed than to never have tried at all! In fact, we often learn the most from the times we fall flat on our faces. If your side hustle doesn’t go anywhere, take the time to analyze why things didn’t work out. Then get working on your plan for the attempt!
“If you fail, congratulations. Most people don’t even try.”
Could affect your primary 9-5
Overworking yourself can be a serious issue if you take on a side hustle. If you bite off more than you can chew, it could even start affecting your 9-5. This could be detrimental to your career success and future earnings. Not to mention, it could also affect your family life and social life too.
If you feel like you’re getting burned out, or like your performance is slipping, make sure to scale back your commitments at your side hustle unless you plan to transition into it full time.
How to choose the best side hustle for you:
So we’ve totally sold you on side hustles and now you want to start one! But how do you decide what kind of side hustle to start?
We’ve got you covered! Here are a few tips for choosing the best side hustle for YOU.
1. Start with the WHY
Before you pick your side hustle, it’s important to think about why you want to start one in the first place.
- Is it because you want to make a few extra bucks each month, or do you have a specific savings goal in mind?
- Do you always want to pursue this on the side, or are you hoping to turn it into a full time gig in the future?
- Is this a passion project that you would pursue, even if you knew it could end up making $0?
Understanding your goals can help you to pick a side hustle that’s better suited to help you achieve them.
For example, if you broke your phone and needed $600 to replace it ASAP, you’ll likely want to start something that earns money immediately. Think dog walking, babysitting, powerwashing, etc. You’ll need something with low startup costs and high demand so you can start earning right now.
On the other hand, if you want to turn this into your full time job eventually, you’ll need to focus on choosing a side hustle that you can scale and grow over time. In turn, this may take you longer to set up.
2. Consider your skills and interests
When choosing a side hustle, it’s important to consider what you’re good at and what you enjoy doing! If you’re going to be spending more time working outside of your day job, you’ll want to ensure it’s at least mildly enjoyable. Otherwise you might as well just work extra hours at your 9-5, right!?
Plus, choosing something that aligns with your unique talents will help you to cut through competition. You’ll ultimately be more successful. For example, if you’re super tech savvy and good at social media, don’t start a landscaping business. Instead, use those natural talents to your advantage and start a social media management company.
Even though you should pick a side hustle you’re interested in, it doesn’t need to be your life’s greatest passion. For example, our friend Steve Chou wasn’t necessarily passionate about starting a wedding handkerchief business. But he spotted a need in the market and realized he was the man to fill it. His foray into selling linens ended up being a great business for him that has made him great money and allows him to spend more time with his family.
Try to ask yourself these questions:
- What are you passionate about?
- What are you good at?
- What problems can I solve for my community?
If you can pick a side hustle that aligns with these few questions, you’ll be in a great position to start earning more money.
3. How much time can you dedicate to it?
Another thing to consider is how much time (and which time slots) you can dedicate to your side hustle. For example, if you have young kids and need to be around in the evenings, you might not want to start doing live sound for bands each night until ungodly hours.
If you’re super busy, it can be a good idea to get a side hustle than you can do on your own time, like freelance writing or web design. However, if you have more time, you can likely tackle something a little more complex. You could even work towards starting your own business from the ground up.
Look at your schedule and assess how many hours you think you could realistically dedicate to your side hustle. Then, pick a gig you think you could ramp up within that allotted time.
4. Think about your financial goals
It’s also important to consider how much money you want to make from your side hustle.
Luckily, we can often see the average salaries and rates for certain jobs and services with a quick Google search. If you’re just looking to make a little extra spending money, or cover your cable bill for the month, you can go ahead and pursue a lower paying side hustle. However, if you’re looking for the most bang for your buck, why not try learning one of these freelancing skills that are in high demand?
Having clear financial goals will also come in handy if your side hustle struggles to make money and you’re at a crossroad about calling it quits. It can be really difficult to make business decisions when you’re emotionally attached and have sunk countless hours of effort into your business. But if you can refer back to those initial goals you set, it can make those decisions much clearer.
5. Consider your start date
Lastly, you’ll want to consider when you need to start! Some side hustles require a ton of research and foresight to launch properly. Simpler side hustles might take just a few hours of effort to get off the ground.
If you need money ASAP, again, pick something where you’ll be able to reach profitability more quickly. If you’re planning ahead (like, anticipating maternity leave or preparing for potential layoffs) you’ll have a little more time to create a business plan and slowly ramp things up.
Side Hustle Ideas:
So you’ve taken the time to think through what kind of side hustle you’d like to pursue, and what you’d like to get out of it. Now, it’s time to brainstorm a few side hustle ideas that you’re interested in. Here are a few ideas to get the creative juices flowing!
Should you start your own business?
You don’t necessarily have to start a business as a side hustle. However, it’s a good idea to always look at it from a business perspective. Thinking like a business owner will help make sure it’s profitable, scalable, and professional.
We’ve written some great articles if you’re interested in launching a business:
- 12 Tips to start your own business
- How to start a business without any money
- HTM Episode 247: Interview with Alan Donegan from Rebel Business School
OK, Now Get Started!!!!
Now it’s time for the rubber to meet the road. Once you’ve got some good side hustle ideas that fit your situation, skills and lifestyle, it’s time to launch!
Begin by making a list of tasks you need to accomplish and start ticking them off each day after work. You’ll be earning extra income in no time, and well on your way to financial independence.
Tips for Side Hustle Success
Starting a side hustle takes hard work and dedication, but these tips can make life a little easier, and certainly more enjoyable!
Get a friend involved
Have you ever noticed that when you make plans to go to the gym on your own, you’re more likely to snooze your alarm and skip it. Whereas if you make plans to go with your friend you’re more likely to actually drag yourself over there?
Getting a friend or family member involved in your side hustle can make it all the more enjoyable! Whether or not you actually work together, planning out your side hustles together and holding each other accountable can help you to make more progress and ensure that you have more fun along the way.
Set time aside to work on your side hustle
One of the best pieces of work advice I have ever received came from a professor during my time writing my senior thesis in college. She told me that when she worked on her dissertation she picked up some dinner after class and went to the same place at the same time every day. Sticking to that schedule she made for herself allowed her to excel and become a highly esteemed academic.
Well, it turns out my professor was on to something. If you make a specific plan for when and where you’re going to attack your goals, you’re much more likely to actually incorporate it into your routine. To ensure you’ll actually make headway on building your side hustle, carve out time into your weekly routine to tackle it.
It can also be helpful to think about when you prefer to get the work done for your side hustle. If you are exhausted after your 9-5 everyday, it’s probably not the best idea to plan on working at your side hustle after you get home. Instead, maybe you would be better suited to wake up an hour earlier each day, and get in an hour of focused work before breakfast!
Schedule Leisure Into Your Week
We all know that overworking is bad for us, but I don’t think a lot of people realize just how harmful it really is. In addition to hurting our relationships with those closest to us, working over 55 hours each week is associated with higher risk of coronary artery disease. It can lead us to forgo exercise, eat an unhealthy diet, and suffer from a lack of sleep!
Even if we are taking care of our physical health, you can still fall victim to burnout. That’s why it’s important to make sure that you are still dedicating time to relaxing, spending time with your friends and family, and having fun!
If you are a go-getter and lean on the side of overworking, get ahead of it by scheduling in leisure time when you plan out your weeks.
Keep records of your earnings and spending for tax season
Lastly, we’re treating our side hustle like a business, which means it’s important to keep good records of your earnings and expenses for when tax season comes around. Whatever money you make, Uncle Sam is going to want a cut, so it’s important that you stay on top of it year round to avoid scrambling during tax season.
The plus side of side hustling is that you can write off certain expenses that went to getting your business off the ground. For example, if you purchase office supplies, a computer, or work subscriptions, you may be able to deduct those in order to reduce your taxable income.
Pro tip: Here are 11 other money tips for freelancers and gig workers!
Are side hustles worth it?
So are side hustles worth it? That’s a question you’ll need to answer yourself based on your personal situation and lifestyle. However, a side hustle can certainly increase your ability to attack your biggest personal finance goals. Even a few extra hundred dollars each month can make a huge difference in your bottom line.
The rule of 173 allows us to estimate how much our money can grow in ten years if invested in the stock market each month. If you invest an extra $300 every month from a side hustle, you could be looking at a total of $51,900 in your investment accounts. Invest an extra $500, and you could be sitting pretty with $86,000. And these numbers will grow exponentially if you keep it up over 20 to 30 years and let compound interest do its thing.
Don’t forget, there’s more to side hustles than just the monetary benefits. Money might be the primary reason for starting a side hustle, but even if you try and fail to make a single cent your efforts are rarely in vain.
The Bottom Line:
If you have some extra time on your hands, starting a side hustle can be a great way to turn it into a steady stream of income. With a little elbow grease, you can build a sustainable side hustle and use it to help you achieve your biggest money goals.
That being said, choosing the right side hustle is important. It could be the difference between building a sustainable business that you really enjoy vs. making no money and enduring extra frustrations in life.
I trust you will choose wisely. Good luck and go get your hustle on!
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