Having one or more side hustles can dramatically accelerate your path to financial independence. A side hustle is a job or business that you exploit besides your full time or main job.
Side Hustle Types
There are hundreds of potentials ways to make money in your spare time. Just search for side hustle ideas online and you’ll get blog after blog listing potential side hustles.
From my standpoint, I recognise three types of side hustles. The first is simply trading time for money. You will spend hours working for someone else, in exchange for pay. This is the easiest type to break into, but also the least scalable.
The second type is already more passive, but still requires your attention. An example would be buying and selling things online, a.k.a. flipping.
The third and most passive type of side hustle is something that takes time and dedication to setup, but will then spit out money without you having to trade hours of your life for that money. An example would be a web site that is generating revenue. This type of side hustle is the most scalable, but also the hardest to achieve.
Trading Hours for Money
There are many things you can do if you’re in need of cash. For example, when you’re fighting to get out of debt, you might want to take on some easy job that immediately generates income. Even though it doesn’t pay well, you can use the extra money to pay off debt faster.
These types of side hustles range from very low yields to potentially very high yields. A low yield job would be driving for Uber of Lyft. If you already own a car, this is a great way to start making some additional money. The problem is that literally anyone with a car can do this, which means that the hourly rate you’ll make is likely to be small.
A higher rate would be achieved if you have a more complex skill, like writing code, that you can sell to companies. If you could help small business owners with coding in the evenings, they are probably happy to pay for that.
Or maybe you’re a knowledgeable professional in a certain area of business. You might be able to sell yourself as a consultant, to assist organisations in anything you have expertise in. While these types of jobs still require you to sell your time for money, the rates you can bill are usually much, much higher than driving an Uber.
My personal side hustle is (technology) consulting. This is a skill I acquired in my previous job, and now I use it to make some additional money by helping friends and friends of friends in their businesses. The hourly rate is very nice, plus it’s a job I’m comfortable doing. Also, if I’d want to, my side hustle income gives me the possibility to add additional funds to my pre-tax retirement savings.
Buy Low, Sell High
If you know everything about a particular niche item, for example a certain type of car, you could make quite some money flipping things. You will simply go online, look for people selling this item, and check for deals.
If you know your way around, you will notice when a certain deal is a steal. Most likely you can use your knowledge to buy the item for less than it’s worth, potentially fix it up or clean it, and then sell it for a profit.
This is not easy to do, and also not very scalable. It is however more scalable than selling your time. This is because your time isn’t linked to your income. Potentially you could make a thousand euros on a deal, with only one hour spent.
Fully Scalable Income
The top tier side hustle is the one that is fully scalable, not depending on the time you spend on it. Examples are websites that generate advertisement revenue, an app that you’ve built and that now sells, or a book you wrote and you keep collecting royalties from.
This side hustle is very, very hard to setup. Or well, it’s easy to setup, but it’s very hard to make money doing this.
I created this site fairly easily. I already had a little bit of experience over at Ontsladebaas.nl (my previous FI blog, in Dutch). When setting up Fire The Boss, I definitely took the things I learned from ODB and applied them here. I see that my visitor count is growing faster in the first couple of months than ODB was when I just started it. However, it’s still way too small to make money from.
The advertisements I run are just enough to cover the costs for hosting, and that’s fine! I never intended my blog to make me rich (I wouldn’t mind though). With enough visitors running ads, sponsored posts, and affiliate marketing become more viable. For now, I will focus on growing, not spamming everyone with ads.
As for writing a book, or building an app, I think it’s clear how they can make you a lot of money, with only a one time investment of your time. This is next-level scalability, but only a handful of people actually make it this far.
What is your side hustle?