Alan R. Simon - Side Hustles For Dummies

Dhiraj creates a techie course that he uploads to Udemy. He spends three solid months on the course: recording and then editing the videos, creating assessments, producing the MP4 files, and then uploading everything to the account that he creates on the Udemy platform. As shown in Figure 2-3, Dhiraj spends 200 hours from the time he begins work on his course until the course is published. During that time, he makes absolutely no money at all from the course.

The course starts slowly, but over the next three months (until the six-month point) Dhiraj pulls in $2,500. Not bad, especially because during those first three months that the course is active, he does almost no additional work! Basically, he’s sitting back and letting the money roll in, which means that he has now crossed the threshold and is earning passive income.

FIGURE 2-3:A successful passive-income side hustle.

Over the next six months, Dhiraj pulls in another $23,000 ($8,000 in the second three months that the course is active, and then $15,000 during the following three months). During this entire time (refer to Figure 2-3), Dhiraj is still doing almost no work; in fact, he spends only about 25 additional hours after the course is published answering emails from people who purchased the course or maybe doing a small update here and there to include some new topic and keep his course fresh and up to date.

You have absolutely no ceiling on how much money you can make from passive-income side hustles, especially when you have more than one going — at least in theory. Max, Mark, and Miguel could conceivably bring in tens or hundreds of thousands of dollars each month if their respective videos catch on and the advertising and affiliate marketing money starts rolling in.

However, those three guys — Max, Mark, and Miguel — could also theoretically make little or no money from their videos. In fact, the same fate could befall Dhiraj and his adventures into online course development as a side hustle. Figure 2-4 shows a different outcome for Dhiraj’s course on Udemy.

Dhiraj still spends 200 hours of his time creating and publishing his course. Now, though, instead of $25,500 in income just in the first year (and with momentum on his side, probably indicating an even better second year!), he brings in only $325 for the entire year. At least as of the first year, Dhiraj earns less than $2 per hour for all the time that he put into his side hustle. Not good!

FIGURE 2-4:An unsuccessful passive-income side hustle.

Passive-income side hustles can be big winners or big losers (or somewhere in between). Sometimes, no matter how much planning you do or how good an idea seems, something just doesn’t “click” and you wind up spending a ton of time for very little money in return. Other times, though, you could hit the jackpot and that upfront effort will really pay off as the money rolls in for months or even years to come.

You also have financial considerations on the investment and expense side of your side hustle. Suppose you want to start an online boutique and sell leisurewear. You could line up suppliers — many of whom will have minimum order amounts — and set aside a bedroom in your home as a “warehouse” where you’ll stash all the inventory that you buy from your suppliers. Be prepared to spend a fair amount of money on inventory! And ask yourself what will happen if your sales estimates are incorrect and you’re stuck with all that inventory that you just paid a bundle for?

Alternatively, you could find suppliers who do drop shipping, where the suppliers themselves actually pack and ship the orders and you never have to stock — and more important, preemptively purchase — the products that you hope to sell. You’ll typically make less with drop shipping than you would by fulfilling your own orders, but you also have a lot less money at risk if your side hustle comes up short of what you thought it would, sales-wise.

As you refine your side-hustle selections, take both the income and the expense side of the financial picture into consideration.

Some side hustles have fairly rigid schedules. Jack can’t just decide on the fly what days of the week or time of the day he’ll teach his community college classes next semester. Cindy’s day job limits her to weekends for her bartending gigs.

Other side hustles give you far more flexibility, at least when it comes to when you’ll record videos, or pack and ship orders for your online boutique, or spend many hours handcrafting jewelry.

You need to match up any calendar and clock constraints from your day job, or your life in general, with whatever is required for a specific side hustle. Look at more than just specific time blocks that you are and aren’t available, though. Also look at the amount of time you need to spend on your side hustle, as well as the “cadence” of tasks that you may need to do on a regular basis.

Max, Mark, and Miguel all plan to create online videos that they’ll then monetize for their respective side hustles. Miguel decides to do a new bartending-related video every week. Mark, however, figures that a new small business accounting video every two weeks is enough for his intended audience and fits better with his available time to record, edit, and polish the videos before uploading and publishing them. Max, on the other hand, settles on a far more fluid schedule for his “monetizing himself” videos. Some weeks, he’ll do two or three videos, and then he may pause for a couple of weeks until he does another two or three.

If your side hustle will involve regularly creating content — videos, a podcast, blog posts, and so on — make sure that your overall schedule gives you enough time to create your content every week, or every two weeks, or whatever interval you’ve settled on. If your schedule isn’t that flexible, or if your day job is one of those where you may unexpectedly need to jump on a plane on short notice, you should probably steer clear of a side hustle where you can’t meet your commitments to produce content, or fill customers’ orders, or otherwise treat your side-hustle business like, well, like a real business.

You also need to be honest with yourself about how your energy level aligns with the time you’ve set aside for your side hustle. Back in the 1990s and early 2000s, I would typically have two or even three active book projects at various stages at any given point. Because I was spending most of my time traveling, I allocated every hotel night to writing — at least on paper. But you know what? Sometimes, after a really long and stressful day, I would go back to my hotel after dinner, sit down at the desk, open my laptop, and not be able to string together two coherent sentences.