Life is expensive. In fact, nearly half of Americans have a side gig outside their primary job to realize their income goals. Do you seek more financial security or merely to increase your disposable income? Read on to learn 3 things to consider before embarking on a side hustle.
Do You Really Need A Side Hustle?
According to a June 2019 report by Bankrate, the average side hustle boosts monthly income by about $1,100 while adding an additional 12 hours of work per week. It is important to recognize the advantages and tradeoffs associated with the effort to create this extra income.
The responsibility of another job will diminish your personal leisure time which can create stress. If you feel financially secure and are happy with your current career path, a side hustle may be more trouble than it’s worth.
You will have more money, but less time to spend it.
However, if you want to save more, pay down debt or explore being an entrepreneur with the safety net of another job in place, a side hustle may be an ideal solution.
What Are Your Options?
How do you determine what side job will be the best fit for you? Research repeatedly indicates the most successful side jobs have 3 key components: flexibility, enjoyment and low personal cost.
Flexibility is key, especially when you are first starting. The last thing you can afford is for the side job to compromise your primary income source. Only take on what you can handle. The beauty of a side gig is the power you have being your own boss and the freedom to decide when you are at capacity.
Your side gig should fit into your life, you should not be trying to fit your life around it.
If you are picking up extra work, make it something you enjoy. A day job plus a side job equals a lot of work. Play to your interests and strengths. Pet-walking, crafting, tutoring and freelance work are all potential sources of income with the upside of being enjoyable.
The personal cost of side hustles can erode your profits. You could be on the hook for products, transportation costs, additional maintenance fees and insurance (i.e. rideshares). Some side gig platforms charge service fees, application fees and commission. It’s common to underestimate the amount of money a side job can require to be successful. If you are upside-down because your side job costs more than it produces, it’s not the gig for you.
What Skills Do You Need To Be Successful?
Most side gigs are entrepreneurial and to achieve success requires intangible qualities. You’ll need to be able to manage your expectations, time and motivation.
It can take time before your side job really launches. Be patient and get the ball rolling. As time goes on, you can build. In the meantime, take time to learn about ways to improve your business and manage your time. Podcasts can provide a free, easy way to pick up new information.
To be successful with a side job, you need to make it a priority. Schedule time daily to make progress. If you focus 10–15 minutes daily, your time can be impactful. Committing to focused work time will get you much farther than promising yourself you’ll get to it when you can.
Finally, you have to be self-motivated. As the boss and the employee, it’s all on you. Find something you are excited about doing. That excitement will motivate you to create your workflow and meet deadlines.
A side hustle can open a whole new world. It can provide the opportunity to explore other careers with limited risk and increase your income so you can reach your financial goals. Stay positive and be kind to yourself as you embark upon your new venture. There will be lots of trial and error and maybe a few setbacks. In the end, hopefully you’ll learn a lot about yourself, find a new career and make some money in the process!
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Elle Kaplan is the founder and CEO of LexION Capital, a fiduciary wealth management firm in New York City, serving high-net-worth individuals. She is also the chief investment officer and founder of LexION Alpha.