Greetings fellow financially frustrated friend and welcome back to Broke Today Rich Tomorrow!
As an avid reader of everything personal finance, you probably know by now just how much our community loves side hustles.
From selling your unwanted stuff to drop shipping on Amazon, side hustles seem to be all the rave lately.
And so they should be!
Side hustles are a great way to make some extra coin on the side and can be a powerful tool for reaching financial freedom.
If you have just started your own financial journey and a little confused about this whole “side hustling thing”, I urge you to read this post I wrote about the importance of side hustles here.
By far, the best thing about side hustles is their flexibility in nature. I kid you not, just about anything can be a side hustle!
Walking your neighbours dog for $10? Side hustle!
Selling handmade cupcakes at the Sunday markets? Yes, that’s a side hustle!
Tutoring someone in the art of the jet-sky? Totally awesome (go you) and totally a side hustle!
You get the point – if you have some special skill or knowledge that can profitable, just about anything can be turned into a lucrative side hustle.
Now, before we all get too excited and add “Professional Hustler” to our Insta bio, there is one important thing to note about side hustles:
They. Have. To. Be. Lucrative.
Yes, you read that right. Basically, if your side hustle isn’t turning a profit, or worse, the profit isn’t worth your time, then a side hustle really becomes a side drag.
A side drag is essentially the evil twin sister of a side hustle.
On the outside, she promises you extra cash, the opportunity to explore your passions and a bright financial future.
On the inside, she’s really part of a pyramid scheme and out to screw you.
A side drag is a financial nightmare because not only does it cost you money, but it also ends up costing you time.
As such, per the personal finance bible, anything that wastes both your time & money is to be avoided like the plague.
However, here is where things get complicated. The hardest part about side drags is that from the outside, they look like perfectly profitable side hustles.
It can be incredibly difficult to tell them apart, especially when some bloggers are like “1000+ side hustles you can start today”.
The truth is, some side hustle are just terrible. They end up costing you more, frustrating you and draining your wallet.
That is why, my dear FFFF, I have come up with a side hustle selection criteria. Before starting a side hustle, ask yourself this:
How much am I going to earn from this and how long will it take me to do?
You have to be able to know roughly how much the side hustle is going to earn you and long much time it will take. If you can’t come up with a reliable estimate of income and time, that’s the first red flag.
Is the payout worth my time?
This is probably the most important question. To calculate the payout, simply divide the expected earning amount by the time it takes to do the side hustle. I kid you not, so many people miss this step! They simply look at the income side but forget to actually account for the value of their time. This is how you end up leaving your friend’s party early and driving 3 hours across town to feed a dog for $20.
Look at the big picture and come up with an hourly rate. If this rate doesn’t get you excited, chances are you may have a possible side drag.
Is this too good to be true?
Think about it – what’s the catch? Would you actually pay someone cold, hard cash to do this? If the answer is that you wouldn’t, chances are someone else won’t pay you to do this either.
What are the costs?
When considering the potential side hustle’s cost, don’t just look at money. Instead, go beyond and look at everything costly to you. Examples can include anything from less sleep in the morning, to time away from home, to the toll on your body, to the cost of your happiness (if you don’t actually enjoy what you’re doing).
How long am I going to do this?
Finally, think about your goals in relation to this potential side hustle. Is it something you see doing long term or just for now? I embarked on my last pet sitting side hustle not because I loved getting up at 6am for dog walking, but because I wanted to raise enough money to fix my car.
Sometimes, thinking about the duration of a potential side hustle can put things into perspective.
Finally, if you have recognized that a potential side hustle is actually a potential side drag, the solution is simple: just don’t do it.
In the words of some of my blogger friends, there are plenty of other side hustles are there. Some of them just happen not to be worth it, while others can help you reach financial freedom faster. The important thing is to be able to tell them apart.
As usual, I want to know more about you. Have you ever had a side drag?
Let me know in the comments below!
Being broke is temporary. Being rich is a journey.