Money Management

Do You Really Need a Side Hustle? 5 Epic Advantages, 5 Simple Warnings

By  Opher Ganel

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You may think (as I did) that “side hustle” is a new term.

We’d both be wrong.

According to Merriam-Webster, the term is 70 years old! What’s new is how the gig economy took off and found the semi-dormant term a perfect linguistic fit.

According to a Zapier report, more than one in three Americans had a side hustle in December 2020, but by June 2022, that went up to two in five! Those who have a side hustle spend on average 13.4 hours a week on it, about 1/3 full time, with 44 percent spending less than 10 hours. In return, they make on average $12,689 a year, or about $19/hour.

Do You Really Need to Join the Side Hustlers?

Clearly, most Americans (three in five) haven’t joined the party.

But should you?

If you ask Gary Vaynerchuk, he’d say it’s a no-brainer. Some others, famous and not-so-famous, who built fortunes off side hustles and would likely agree. Yet other people argue against it. Sometimes in very definitive terms.

So, if you haven’t started a side hustle yet, or you have but are wondering if it was a mistake, let’s dive into the advantages and things to beware.

Why You Should Consider Starting a Side Hustle – 5 Great Reasons and 2 Bad Ones

Everyone’s different, and everyone’s situation is unique.

Here are some reasons you should consider a side hustle. You may find one or more that resonate for you, or perhaps you have a completely different reason (in which case, please share in a comment!).

Each of these offers a potentially huge advantage if you succeed (and more on that below).

  • You need more money than your “9 to 5” brings in: Your salary may be set, and you may not be able to bring in extra money, e.g., through overtime. Raises may also be few and anemic. A side hustle may let you earn more fairly quickly.
  • You want an alternative to selling your time: As an employee, you work certain hours and get paid for those hours. If you want to get paid more, you usually need to work more (if overtime is even allowed). A successful side hustle may let you scale your efforts so you make much more money working fewer hours.
  • You want more flexibility: Face it. Your work hours and where you spend them are dictated by your employer/supervisor. A successful side hustle will likely let you dictate your own schedule and work location.
  • You want to create something lasting, like a business you can leave your kids: With a job, once you retire or simply move on, nothing is left except possibly the money you set aside. If your side hustle is successful enough, you may be able to leave a lasting legacy to your kids in the form of a successful multi-generational business.
  • You want to diversify your income: Job security has long become a myth. With a recession looming, things may get worse than usual. Having an additional income from a side hustle can help you survive a temporary job loss.

And the bad reasons?

  • You hate your job and/or your boss: This one’s tough. Yes, a successful side hustle may ultimately bring in enough for you to replace your job. But do you really want to wait that long? Perhaps it’s better to just find another job, like now?
  • You feel like you have to prove something to yourself or (worse) to others: If you don’t truly enjoy your side hustle journey, you’re far more likely to fail. If you start it to prove something and then fail, think about what that would feel like…

5 Simple Warnings About Side Hustles

  • Are you allowed to do it? Some employees sign contracts with non-compete clauses, non-disclosure agreements, and/or conflict of interest provisions. If you’re planning to start a side hustle, make sure it doesn’t clash with your day job’s requirements, including such clauses.

Then there’s the potential “conflict of commitment” where your side hustle may interfere with your ability to respond to, e.g., being on-call for your job. Even if you’re allowed to do it, your employer/supervisor may not appreciate it, especially if your side hustle is at odds with your employer’s mission or image.

  • It’s a business – do you have what it takes? A side hustle, distinct from taking a second (or third) job, is about starting a business. However, not everyone has what it takes to succeed as an entrepreneur. Remember, just because you like to play basketball doesn’t mean you’re cut out to be the next Michael Jordan. Similarly, just because you know, e.g., how to balance your checkbook doesn’t mean your business will succeed.

If you’re not ready, willing, and able to do everything it takes to develop the business and market it, you’ll be better off thinking of something else.

  • Do you have the money needed to start? Although some side gigs require little or no initial investment, the average first-year spend is over $16,600! If you don’t have that kind of money, make sure you have a plan for doing without it. This is especially difficult if your new side hustle has lots of competition and you don’t have the resources to market yourself. However, if it’s something like driving for Uber or Lyft, this shouldn’t be an issue (though the upside is limited).
  • It takes time and effort. If you’re already working 40, 50, or 60 hours in your day job, plus any time spent getting ready, commuting, getting lunch, and unwinding, are you really up for spending another 13 weekly hours (or more) on a side hustle?

If you decide to do it, you’ll likely feel more stressed and may end up burning out in both your side hustle and your day job.

  • There may be an easier way. If you’re only doing it to bring in a bit more money, perhaps trimming your spending a bit can accomplish the same net effect at a fraction of the time and effort invested?

The Bottom Line

A side hustle isn’t an end in and of itself.

It’s a tool.

Ask yourself if a side hustle in general, and specifically the one you’re planning to start, is the right tool for the problem you’re trying to solve.

If your answer is “Yes,” you absolutely should consider it.

In some cases, things may be extreme enough that I’d say you absolutely need to start one. Still, even in those scenarios, weigh the above warnings against the benefits, and do your due diligence before you start and even after.

If your answer is “No,” simply don’t do it.

Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.

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About the Author

Opher Ganel

My career has had many unpredictable twists and turns. A MSc in theoretical physics, PhD in experimental high-energy physics, postdoc in particle detector R&D, research position in experimental cosmic-ray physics (including a couple of visits to Antarctica), a brief stint at a small engineering services company supporting NASA, followed by starting my own small consulting practice supporting NASA projects and programs. Along the way, I started other micro businesses and helped my wife start and grow her own Marriage and Family Therapy practice. Now, I use all these experiences to also offer financial strategy services to help independent professionals achieve their personal and business finance goals.

Connect with me on my own site: OpherGanel.com and/or follow my Medium publication: medium.com/financial-strategy/.

Disclaimer: To make Wealthtender free for our readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a natural conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers. Learn how we operate with integrity to earn your trust.