Everyone is Talking About Side Hustles, But No One Is Telling You This
Do you feel like everyone around you has a side hustle? When you scroll through your social media feeds, you probably see ads about side hustles and tips about how you can start earning extra income. According to a recent study by Bankrate, 36% of Americans have a side hustle, a number that represents more than 100 million people.
On the surface, side hustles look like a great way to earn some extra cash, and if we’re being honest, virtually everyone wishes they had some extra money right now. Whether you’re thinking of driving for Uber after your day job wraps up, or you’ve found something in the gig economy that allows you to work from home, you need to know the truth about side hustles before you commit.
We’re definitely not here to rain on your side hustle parade. However, recognizing some of the problems with side hustles ensures that you’re making the choice that’s best for you. On the surface, every side hustle looks like the perfect way to make some extra money. However, there are some details that you need to consider.
The Hustle Looks Glamorous, But That’s Not the Whole Story
Isn’t it amazing how all of the people on your social media channels who post about their side hustles seem to think that these extra gigs are the best things ever? You may even find yourself seeing side hustle videos from people whom you don’t know personally. There are multiple reasons for this that you’ll need to consider.
First of all, some of the people who are so pro-side gig can earn extra money if they get other people to sign up. Multilevel marketing (MLM) companies offer financial incentives for people who get others to join the company based on their recommendation. One of the most effective ways to do this is to talk positively about the company and how much extra money they’re making on social media. By making things look glamorous (perhaps more glamorous than they are), they can bring more people into the company and improve their own financial situation.
It’s also possible that you’re seeing paid ads from the companies that are behind the side hustle. While most platforms require those ads to have some kind of disclaimer, it’s very easy to miss them. By putting those ads on your feed, these companies can make themselves seem like the perfect situation for you.
Building a side hustle that actually makes money takes time and commitment. They’re not a path to quick wealth, and you need to know that before you jump in headfirst.
Time is Your Greatest Asset
Many side hustles are forthcoming about the amount of money that you’re going to invest up front. Whether it’s buying the equipment that you need to work from home, or the extra amount that you’re going to spend on vehicle maintenance by delivering food or other products, there is a financial investment to consider. However, it’s not your most important investment.
Everyone is given 24 hours each day, and there’s nothing that you can do to create more time. Since you’re pursuing a side gig, it’s safe to assume that you have a job that already takes up a lot of your time. You also have to leave yourself time to sleep. Finally, you may have other responsibilities that you can’t neglect in the name of making extra money.
Before you commit to a side hustle, consider how much time you can afford to spend on it. If you’re looking into a side hustle that requires a lot of time, you may not be able to get the most out of it, which can lead to you losing your financial investment. Make sure that you consider your most valuable resource, which is your time.
Not Every Passion Should Become a Paycheck
One of the biggest myths in the world of moneymaking is that if you find something you’re passionate about, you’ll never have to work a day in your life. While that sentiment is certainly catchy, and there is something to be said for making money doing something you enjoy, not every passion needs to become a paycheck. One of the easiest ways to turn something you love into something you dread is to try to convert every hobby into a hustle.
Hypothetically, let’s say that you love painting. Over the years, you’ve built up quite an inventory of original pieces, and you decide to post them online for sale. Because of the skills that you’ve spent years honing, the pieces are good, and people buy them from you. Initially, you think that turning your passion into a paycheck is a great idea. However, when put into practice, it’s more work than you originally considered.
It takes time for you to produce each piece while still protecting the quality. When 10 or more people all request custom paintings at once, your passion is suddenly turned into a stressful proposition that requires a ton of time, materials, and effort. Not only do you have to spend more time painting, but you also have to invest more in canvases, brushes, paint, and shipping materials.
Don’t be afraid to let your hobbies remain hobbies. Everything that you do doesn’t have to be about earning extra income. This doesn’t mean that it’s wrong to monetize your hobby, but you do need to consider how doing so might change your relationship with the thing that you love.
The Problem With Taxes
Your primary employer probably already handles most of your regular income tax requirements. When you look at your paystub, you should see information about how much they withhold to cover the taxes that every employed person in the United States is responsible for paying. When it comes to side hustles, you generally have to start handling those taxes on your own.
The moment you start earning money, even if it’s just a few hundred dollars each month, Uncle Sam is going to want his share. For instance, if you’re selling a product, you not only have to account for the taxes that you owe on the money you make, but you’ll also need to consider sales tax. If you’re providing a service, you need to account for the annual taxes that you’ll owe based on how much you make.
If you decide to proceed, make sure that you’re researching how taxes work when it comes to your side hustle. If you need to fill out paperwork, be sure that you do that before you start making money. Finally, be sure that you’re setting enough money aside to cover any taxes that you may owe at the end of the year.
You Might Fail, and That’s Okay
When you get down to the heart of things, most side hustles are ultimately small businesses in which you’re the owner and the only employee. Whether you’re selling your artwork online, providing content for websites and blogs, or driving for a rideshare company, you’re ultimately responsible for selling yourself as the best option on the market.
There are plenty of opportunities for things not to work out like you thought they would. Maybe the demand for your art isn’t high enough to turn your hobby into a sustainable business. Perhaps you can’t make the right connections to start providing content for enough apps and websites. You may live in an area that’s so saturated with rideshare drivers that there isn’t enough space for you to make enough money.
Your desire to start making extra money isn’t a guarantee that it’s going to work. You need to accept the fact that your side hustle may fail, and that its failure doesn’t make you a failure. Every year, millions of small businesses fail before reaching 12 months of operation. If your side hustle doesn’t turn out the way that you thought it would, don’t let it leave you feeling like you’re not capable of earning the money that you need. Decide if you want to pivot to something different or move on from the world of side hustles altogether.
Is a Side Gig Right for You?
Ultimately, the decision you make about earning extra money is yours and yours alone. By going into the process with as much information as possible, you can choose a path that allows you to earn extra income while still protecting your mental health. No matter what you decide, be sure that you’re still leaving yourself enough time to enjoy life and the people you share it with.