Every night Joey gets in his car, opens up the Uber app, and start his car to make extra cash by driving people to their destination.
Making money on the side from your regular job is known as side hustling and there are many things that you can do to make extra money.
What are some common side hustles?
- Doing surveys and research for companies
- Starting a blog
- Walking dogs for other people
- Become an Uber or Lyft driver
- Cut lawns or clean houses
- or even rent our part of your home on AirBnB
With many different side hustling opportunities and the amazing feeling of getting instant cash in your pocket, it creates instant gratification. This creates a never-ending cycle of positive emotions fuels you to continue doing the side hustle as you load your pockets with wads of cash!
Why do people side hustle? It’s obvious, isn’t it?
There so many different reasons why people do side hustles, but most of them fall into two categories.
- They need more money because they don’t make enough to cover their living situation
- They want more money because they want something they desire
Here are a few common reasons that most people will say why they side hustle:
- many people do it to get out of debt (not making enough)
- some people do it to save for a vacation (desire)
- save money for college (not making enough + desire to go to college)
- buy a new car (desire)
- pay your bills (not making enough)
Of course, anyone will tell you it feels great to get out of debt, go on a vacation, or by a brand-new car, but there are major trade-offs when it comes to side-hustling that can slow you down to becoming incredibly wealthy and rich!
How Side Hustling Slows You Down from Building Wealth
When you make a few extra bucks on the side driving people and collecting Uber fares there are many costs that are involved.
Most people don’t think of those costs.
The primary focus on their mind is the money – it is that instant gratification that they receive.
There are major costs to doing side hustles
- you will have expenses
- your time that you could be doing other things
- the initial startup costs (time, money, and energy)
- you’ll still owe taxes
- the growth potential to making more money is limited
Would you rather be wealthy or just scraping by?
I have a question for you…
Would you rather be thriving financially and be wealthy or would you rather be struggling to pay the bills?
I think the answer is obvious that most people would rather be financially free and the reality is that site hustling is not going to get you there in the long run.
Why side hustling won’t make you wealthy…
One of the major problems with side hustling is that you end up trading your time to making instant money.
This is great initially when you have major financial problems like debt, you’re struggling to pay your bills, or you’re in between jobs. However, the reality is when you’re trading your time for money.
Trading your time for money doesn’t allow you to grow and that is how most side hustles are setup.
The growth opportunity is limited!
Most site hustles are set up with the idea of making some quick cash and not the idea of building wealth.
When was the last time kid activities paid big bucks?
Look at any activities that kids do to raise money. They are just like side hustles as they are single transactions. They are often not recurring. They do it for some quick cash.
Ask yourself when was the last time they got a huge amount of money?
- Car washes don’t pay well…
- Door-to-door coupon selling – nope not that either
- Girl Scout cookies? – Got to sell a ton of those
It just doesn’t work! If you want to build wealth you cannot focus on low dollar transactions or a small number of transactions. So where do you put your energy instead?
Where to put your energy instead?
When you’re looking for income opportunities you want to focus on things that have a potential to grow. The way to grow and make a lot of money happens in two (2) ways.
- Solve a problem for a lot of people – think of this like Netflix which is cheap, but they have millions of customers
- Solve a problem for a small number of people, but it is expensive – Think of this as a chair lift for the elderly that takes them from downstairs to upstairs and costs $5,000 bucks each!
As you look at your side hustle start thinking of it like starting a business.
If you start thinking of your side hustle like a business, you will see growth opportunities and you won’t be like Joey scraping by. Let’s create an example.
Say you cleaned houses to make some extra money…
- You have 3 customers
- You made $15 per hour
- Each house took you 3 hours to clean
- You make $45 per house
- Total of $135 per week which takes you 9 hours to do
Having an extra $135 dollars in your pocket each week is great especially for making minimum wage, but now you’re maximized because you have another part-time job and you don’t have the time flexibility to clean more houses.
How do you make more money?
How you evolve your side hustle to make more money
You transform it into a business! You can do one of two things to scale:
- Get more clients (solve the problem of a dirty home for more people)
- Charge the hell out each customer ($1,000 per cleaning)
Chances are, most people won’t pay $1,000 per cleaning – so scaling this way will be limited. Your best way to scale will be to get more clients.
Now you get some hired some help at $10 per hour to clean your client’s homes. This would allow you to collectively clean a house in 1 hour instead of 3 hours individually.
You can clean more houses in less time. Yes, you do give up some profits in the short run, but you save 2 hours for each house you clean!
By hiring people it allows you to scale. Now you can clean more houses in less time even though you give up some profits along the way.
This is how you start thinking about growth when it comes to making money on the side.
Not all side hustles will have a growth opportunity. For example, if you rent out your room on AirBnB, there is only so much space in your home.
For this reason, many side hustles that have low growth potential should be temporary or you may even want to avoid side hustles altogether so that you could look for opportunities that actually have growth potential.
When is a side hustle a good idea?
There is nothing wrong with side hustles – at times it is a good idea to look for other income opportunities through side hustles, but when is it a good idea to side hustle?
When you have skills, talent, or are an expert…
People who have unique skills such as in web development, graphic design, proofreading, or even translating can make great money with gigs on the side because your hourly rate is going to be a premium.
Often times you’ve invested a great deal of time and energy to build up your skills and talents and even though you might be getting paid a premium – remember to think about the growth potential.
For example, even if you’re a translator and you are making $50/hr tutoring people to speak Russian, it might not be a bad idea to start looking for other teachers that can help you grow your business.
When you need to get out of debt or bad situation…
If you’re in a crummy situation whether you have major credit card debt or had a major medical expense that is chewing away at you financially, then side hustles may be necessary to help you get out of those nasty situations.
I would only look at these situations as temporary until you get yourself back on your feet, but at times you need to do things now that are uncomfortable so that you can do what you want to do later.
Are there other reasons to do side hustles?
Yes, if you need money because you don’t have enough to cover your living expenses or you need money because you want something (like a new smartphone).
However, many side hustles aren’t going to bring wealth into your life. Instead, they will take up a lot of your time and energy and give you only a small amount of cash in return.
The question is do you want to build wealth in your life or do you want to scrape by?
If you want to build wealth in your life…
If you are looking to build wealth in your life then you need to focus on growth.
How can I grow my side hustle? or how can I use this side hustle to get out of debt so that eventually I can create something that can grow?
Will you transform your side hustle into a business? or will you take your side hustle earnings and invest it into real estate properties so that you can collect rent from your tenants every single month?
It doesn’t matter what you do as long as you focus on growth with your money.
Otherwise, you might end up being like Joey who gets into his car every night to make a few extra bucks just to scrape by.