Today’s guest post from Rob is on the all too important topic of side hustles. The advice and tips have a lot of great value in them. Take what works for you and keep at it!
Rob @MoneyNomadRob writes on the, “digital nomad lifestyle,” on MoneyNomad.com and discusses personal finance for InvestmentZen.com. Without further introduction, here’s Rob:
How to Develop a Side Hustle Income
“You can’t have a million-dollar dream with a minimum-wage work ethic.”
– Stephen C. Hogan
What would happen if you lost your job today?
How would you fare if your boss called and said, “Don’t worry about coming to work today. We’re giving you two weeks’ severance pay, but are no longer able to employ you.”?
For many Americans, just the thought of this causes their heart to skip a beat. We depend almost entirely on our employer for financial security and wellbeing. With 63% of Americans unable to cover the cost of a $500 emergency, going several months without a paycheck is unimaginable.
But the reality is, most of us could lose our job within the next couple of years. Between outsourcing and automation, nearly every job is at risk. Manufacturing has already been hit, but self-driving cars and IBM’s computer analyst (Watson) could consume millions of other jobs (even with tighter foreign policies).
Not only do we need to be planning and saving for retirement – we also need to be planning and saving for any career changes that may appear on the horizon.
Now, don’t let the last few paragraphs discourage you. The main point here is that life happens – and having a Plan B is always a good idea. As Alan Lakein so clearly put it, “Failing to plan is planning to fail”.
By investing time and energy into a side hustle, you receive two clear benefits. First, you establish a skillset that can be used to earn an income if you ever do lose your job. Second, you make more money today! This extra money can go to anything from paying for your next vacation, to covering education costs, to saving for retirement.
Now that we’ve determined the value of making extra money on the side, let’s discuss the real purpose of this article: How can I develop a side hustle income?
Understanding the “Side Hustle Equation”
For someone who’s never earned money outside of their day job, the idea of launching a side hustle can seem like climbing Everest. But the reality is, the basic equation is pretty simple.
The Side Hustle Equation is:
Time x Creativity x Financial Investment = Income
In short, if you aren’t creative and don’t have any money to invest, then you’re limited to your time. Although time is certainly valuable, when you pair it with creativity and a few dollars, you can turn a $25 websites into a million-dollar business.
Therefore, as you begin brainstorming your side hustle, ask yourself – what resources do I have available? What can I invest in regards to time, creativity, and money? Generally speaking, the best combination is a lot of creativity a moderate amount of time, and a few dollars.
5 Methods for Launching Your Side Hustle
Once you have an understanding of what attributes you can invest into your side hustle, it’s time to get started! The following five strategies can help you earn anywhere from a few dollars right now, to millions over the next couple of years.
1. Sell your time (no skills required)
If you don’t have a solid skillset and need money now, selling your time is likely the best place to start. There are a plethora of opportunities for someone looking to sell their time for money.
From tried-and-true classics, to activities brought about by the age of technology, here are a few examples of time-heavy side hustles with minimum need for creativity or money:
- Seek out manual labor jobs on Craigslist (lawn care, moving assistance, etc.)
- Take care of the elderly, the young, and pets via Care.com.
- Sell your time online with Mturk.com, Fiverr.com, SEOClerk.com, and similar sites.
2. Build off of your day job by freelancing
If you have a bit of free time and experience with a specific skillset, then freelancing is an exceptional way to make extra money. If your employer pays you $25/hr you could very easily charge $50/hr to do the exact same task for other businesses that don’t have a need for a full-time employee.
From accounting, to writing, to marketing, to analytics, to data entry – if you do your job on a computer, you can do it as a freelancer.
But how? I’m glad you asked! Although starting your own websites can definitely help in the long-term, the fastest way to start is by setting up a freelancer profile on one (or several) platforms that can connect you with potential clients. Some of the most popular include:
3. Make and sell a product
If you’re a bit more creative and love the idea of making money from your creation – then that’s a perfect place to start your side hustle. If you find a creative niche, you can make a significant amount by selling unique products that you’ve made yourself.
Now, don’t think this idea is only useful for stay-at-home moms who want to make soap. One buddy of mine who’s a structural engineer figured that he could make a part that his company used for far less than they currently purchased it for. So, he spent some time and designed/manufactured this item – selling it directly to his boss. He made an extra $20k in one year from a single client!
If you’re looking for a place to sell your own products (and perhaps, seeking inspiration as well), consider the following platforms:
- Your current workplace
- Your local community (town, church, etc)
4. Sell your current network (or grow a new one)
Are you an avid networker with 1500 Facebook friends, a Twitter following of 10k, or a blog with decent traffic? Then you could very easily start making money by connecting your current network with relevant brands and products.
Of course, you don’t want to spam your friends or followers, but a bit of strategically placed content can actually benefit your network while making money for you.
There are three ways that you can monetize your network:
- Introduce them to new brands through online affiliate programs: Become an Amazon affiliate and you can make 4-8% on every sale that your friends make through your link – and there are hundreds of other programs.
- Sell sponsored posts, tweets, etc directly to brands: If your following is large enough (or niche enough) it can be relatively easy to find brands that will pay you anywhere from a few dollars for a tweet to several hundred for a sponsored blog post.
- Sell products directly to your network: From the many MLM such as Mary Kay and essential oils (which I try to avoid), to your own products or services, many people within your network will be happy to buy and/or share your product.
5. Use arbitrage to buy-and-sell other people’s products
Arbitrage is an economic term discussing the process of buying a product in one place and selling it in another for more. For example, if coffee costs twice as much in the US as it does in Costa Rica, then I may be motivated to buy coffee in Costa Rica and ship it to the US in order to take advantage of that change in price.
This is how most retail stores make money – and it’s a common practice among online entrepreneurs as well.
There are many ways to take advantage of arbitrage in the markets, but a few examples include:
- Buying items at yard sales and selling them on eBay.
- Buying products from AliExpress or Alibaba and selling them on Amazon or your own Shopify store.
- Taking electronics with you when you travel and selling them at a premium in higher-taxed countries (check the legality of this first).
- Compiling useful information and selling it in an ebook or report online.
Now, the most important step – do something!
After reviewing the lists above, everyone should be able to find a side hustle that works for them. Regardless of your education level, age, or time availability, you should be able to increase your income using at least one of the methods above.
So what’s next?
Do Something! Anything.
Sit down and write out a plan to earn that first dollar, then get started. If not today, then this weekend.
Go to a yard sale, explore a freelancer platform, or consider making your own jewelry. Even if your first idea fails, that’s complete okay. Each failure gives you more experience and knowledge that can be used for the next venture.
Success isn’t about avoiding failure; it’s about doing, failing, and doing again.
So, what will your next step be?
Author Bio: Rob Erich writes about the digital nomad lifestyle on MoneyNomad.com and discusses personal finance for InvestmentZen.com. You can find him, stalk him, and interact with him on Twitter: @MoneyNomadRob.