I work as a registered nurse in the hospital which means I could work 24/7 if I really wanted to. So why would I do a side hustle? I would be trading my time for money doing a side hustle and likely I would be unable to match my overtime hourly wage at the hospital. In other words it would be a waste of my time to start a side hustle.
However, starting an entrepreneurial side hustle is a different story. The income would not be dependant on the time you work but rather the income potential of the business model you have chosen. For example you could start a lawn care business. Initially you would be focused on customer acquisition and day to day managing of the business. The actual work of lawn care could be hired out. If you could charge $25 per hour net per employee hour and pay $15 hour net to your employees then for ever employee you have, you would make $10hr. As the business grows you could hire a manager to mange the day to day. You could grow your business to 10+ employees after a few years then you would make upwards of $100 an hour net for every hour your employees are working. Sounds like hard work initially.
Another entrepreneurial side hustle example would be acquiring rental properties. You could make this entrepreneurial side hustle almost passive by hiring a property manger. However, not all markets support this type of activity or severely restrict the potential income. Think Toronto, Vancouver or Victoria where I live.
Now I should say its not easy to run a business and most entrepreneurial side hustles become unprofitable. On the positive side there is no upper income limit. In contrast a side hustle you directly trade your time for money is far more likely to succeed. Staying on the same lawncare example you could trade your time for lawncare services. Your overhead is low and there are no employees to manage, but again you are limited by the maximum hourly wage the market will allow you to charge and the number of hours you can personally work.
Working as a nurse my overtime hourly wage is higher then what I could get doing lawn care, managing rental properties where I live or really any other side hustle. So for me a side hustle is out. There are other side hustles of course then the examples provided. Perhaps you are working on a side hustle goal that takes time to achieve. For example maybe you want to be an electrician that works with house flippers for the percentage of profits. So you might work evenings and weekends with an electrical company to acquire the hours needed for apprenticeship so in 4 years you would have your ticket as a red seal electrician.
If you already have a relatively high paying job it might be better to job hack and make the most you can from your job while putting the savings into a broad market exchange fund. This way you would be able to be financially independent in a relatively short time (5 years early retirement extreme-10years shockingly simple math behind early retiremnt) . On the flip side if you make say around $15hr with limited opportunities to job hack then a side hustle may make financial sense. The FIRE community likes to promote side hustles, however a side hustle does not always work for everyone. If you want to achieve a goal that takes time (electrician) or are in a low paying job with limited opportunities then a side hustle is generally a smart idea.
Personally, I cannot resist doing a side hustle (even though it doesn’t make the most sense for me financially) . Its in my nature to want to create. Recently I have been helping a friend with the lawn care of her rental property. This brings in about $75 a month and I spend about 3 hours a month on upkeep. Earlier this year I also bought some land then put in a driveway and a small off grid cabin. A few months later I sold this property for a good profit. Mostly to satisfy my curiosity I will explore doing side hustles. While I was building the cabin (which was on an island) I put up a Facebook post about taking away peoples garbage on my way back on the ferry. I was coming back on the ferry with an empty trailer so it made sense. I took away items like drywall, metal as well as some regular house hold garbage. There is limited garbage service on the island and they don’t take drywall, metal as well as host of other items. Well needless to say I had a lot of interest and got paid pretty well for doing this.
Also I have been buying and selling items found on our local classifieds. Recently I sold a couch I picked up for free for $80. I also bought a generator for $200 and sold it for $380. The examples can go on. Buying and selling can be a great side hustle as it’s low risk with low start up costs. It can be done covertly meaning no business license and liability insurance. I have a 4′ by 8′ trailer that can be towed behind my 1500lbs towing capacity Corolla making the buying and selling side hustle more profitable. People like to purchase used furniture, appliances etc so by offering to deliver you can charge more on the furniture you likely picked up for free. Anyway, It has all been fun and I enjoy doing these side hustles. But, purely from a financial perspective I make more job hacking.
So you have to decide do you want to trade your time for money side hustle, or have an entrepreneurial side hustle? Or can you job hack your existing job and retire early?
Some pictures of the off grid cabin build side hustle earlier this year.
Putting the lawn mower on my car to help a friend with her rental property lawn care.