Thinking of setting up a side hustle? You’re not alone. Surveys conducted by Zapier in 2022 and Bankrate in 2023, tell us that 2 in 5 (40%) of Americans have side hustles.
As a firm believer in using multiple income streams to help achieve financial empowerment, I want to share my perspective based on personal experience, as well as offer my observations and some helpful information about 6 types of side hustle strategies you might consider.
In this article:
My perspective
My perspective on all this is multi-generational. My paternal grandmother was a nurses’ aide at a hospital in New Orleans. Her second job was with Borden’s Dairy in their ice cream shop in Metairie (a suburb of New Orleans). I remember when she would sometimes stop by after her work shift ended to bring our family the bananas that had become too ripe for banana splits. When I was in 6th grade, my mother resumed her profession as a full-time licensed cosmetologist. While establishing her new salon in a new city where we’d moved, she set up a side business selling Tupperware.
My first foray into setting up multiple streams of income was when I started freelancing as a resume writer on the side when I was still employed as a full-time recruiter in 2006. And like my mother and grandmother influenced me, I suppose I’ve influenced my daughter too. Soon after she became a working professional, she started picking up occasional marketing-related side projects through her professional and social network.
I find it fascinating how in recent years, we’ve expanded our vocabulary on the subject. Terms we’ve been using for as long as I can remember, such as moonlighting, side job, freelancing, and consulting on the side, have been joined by terms like gig economy, side gig, and side hustle.
And our vocabulary isn’t the only thing that has expanded. Thanks to technology, the number of ways we can earn side income has also expanded.
Why pursue side income
Before we look at common types of side hustles, I want to address why we might pursue side income, as well as the 500-pound gorilla in the virtual room – the illusion of security.
When we have a job – a single income from a single entity – it’s easy to get comfortable and think it’s going to last. But what’s really happening in most cases is a false sense of security. And why do I say that? Because during the last few decades, which included two major recessions and a worldwide pandemic, I’ve personally worked with so many people who have lost their jobs. I’ve seen too many people living in an illusion of security that has been shattered. What I’ve learned is that shifting from a paycheck mindset to an income mindset is the first step in taking ownership of your financial wellbeing. Setting up a source, or several sources, of side income can be a second step, and it’s one of the main reasons why so many of us want to set ourselves up with more than one stream of income.
Here are three other main reasons why many of us consider pursuing side income:
Earn extra cash – Related to the desire for security, this is the main reason why most of us pursue side income. It’s definitely why my grandmother did it. She became a widow when my father was a young teenager, so working two jobs as a single mother of four kids was a necessity. She never remarried and after her kids left home, she continued to work two jobs, which helped her ageing father take care of her brother with special needs.
New business experiment – Some people start a side gig solely to test the waters for a new business idea. This was my reason for starting to write resumes on the side while I was still working full time for an employer. Taking that first small step toward self-employment helped me to see what it might be like to move from working in a business to business (B2B) capacity to working directly with consumers, which is very different.
Career change experiment – Similar to the new business experiment mentioned above, which may or may not involve a career change, some people do something on the side to gain experience and skills in anticipation of a career change. Or they might do something part time on the side to explore and research before making the final decision to commit full time to a new career path.
6 types of side hustle strategies
Besides getting a second job with a part time employer like my grandmother did, below are some of the most common types of side hustle strategies that you might consider.
Leveraging expertise to offer services – Often referred to as freelancing or consulting, this is certainly what I did when I leveraged my expertise as a recruiter and my skills as a writer to write resumes on the side. My tax accountant is a CPA with a full time job but uses her expertise to provide tax services on the side for the owners of small and medium sized businesses. When you become a subject matter expert in something that has value to others, you can offer consultative advice and/or use your skills to provide actual deliverables.
Monetizing a hobby – Along with freelancing or consulting, this is probably the most common type of side hustle. I’ve met many people who do this. For example, one client, a customer success professional in the tech sector, also worked as a freelance photographer on the side. Another client I worked with was a full time engineer who taught woodworking classes on the side. According to Shopify, here’s a list of 12 profitable hobbies that make money:
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- Writing
- Illustration and design
- Music
- Cooking
- Gardening
- Photography
- DIY crafts
- Comedy
- Coffee
- Pets
- Brewing beer
- Gaming
Learning a trade and offering it part time – This strategy often involves taking specific skills training and obtaining a license or certification that you then use to establish an extra income stream. Getting a real estate license is probably the most common example of this strategy. And sometimes it can come in handy when you need to or want to make your side gig your main gig. I once worked with a client who had worked his way through the ranks to earn the position of engineer without having a degree in engineering. After being laid off, rather than try to compete against his colleagues with engineering degrees, he decided to turn his side gig in real estate in which he was already earning an extra $70K annually into a full time business. Instead of asking me to proofread his resume, he asked me to proofread his new website.
Sharing economy – Investopedia offers great insights if you’re curious and want to read more about the sharing economy, which expanded from $14 billion in 2014 to $387.1 billion in 2022 and has been projected to reach $827.1 billion by 2032. The sharing model is the peer-to-peer based activity of acquiring, providing, or sharing access to goods and services and is often facilitated by an online platform. You may be familiar with ride sharing and short term/vacation rentals, but the sharing economy covers a broad spectrum of transactions. There are co-working platforms that enable workspace sharing, peer-to-peer lending platforms that allow individuals to lend money to other individuals at cheaper rates than traditional lending sources, fashion platforms through which individuals can sell or rent their clothes, and freelancing platforms for matching a wide variety of skilled professionals to projects posted by individuals or businesses.
Multi-Level Marketing (MLM) – We return to Investopedia again, which describes MLM as a strategy used by some direct sales companies to sell their offerings by encouraging existing distributors to recruit new distributors. So, the idea is that you earn money from your own sales, as well as from the sales of those you recruit to become distributors. Unfortunately, there have been some irreputable MLM schemes over the years, and Investopedia points out that you can often spot pyramid schemes by their far greater focus on recruitment than on your own sales. However, there are also many well-respected, legitimate versions of this business model, including worldwide companies and brands like Amway, Avon, Herbalife, Vorwerk, and Mary Kay. This is what my mother did for side income when she sold Tupperware, a MLM company that was established in 1946 and is still a billion dollar company today. It’s also worth noting that although many MLM companies sell products, some do not. For example, Ambit Energy, which is based in Dallas, Texas, provides electricity and natural gas services in energy markets in the U.S. that have been deregulated.
Selling third-party products online – This is a business model in which you partner with wholesale product suppliers and shipping companies that enable you to sell products at retail prices through online shopping platforms such as Amazon, eBay, and Shopify. The rise in ecommerce and business models like this has spurred a rise in online tools to make it easier, as well as programs to teach you how to do it and guidance from the platforms themselves.
Of course, this list is not exhaustive as it only touches on six types of side hustle strategies that I commonly encounter or have had personal experience with myself. And, of course, there are other ways to have multiple streams of income besides setting up a side hustle, such as playing the money investment game. Nevertheless, this list should serve as a good starting place for your research.
Additional resource worth checking out
Speaking of lists, there are loads of articles out there with lists of ideas for what you could do for a side hustle. The most extensive list that I’ve found is on Nick Loper’s very useful Side Hustle Nation website, where you’ll see 70 ways to earn side income, as well as podcasts and articles with even more money making ideas, courses, and reviews of relevant apps, services, and products.