Advertisements

How to Start a Profitable Side Hustle

How to Start a Profitable Side Hustle


The following is an excerpt from Grant Sabatier’s new book Financial Freedom: A Proven Path to All the Money You Will Ever Need. Pick up a copy here, and follow Grant’s blog Millennial Money for advice on personal finance, investing, and entrepreneurship.

Matt is a 25-year-old graphic designer living in Chicago who makes $55,000 per year at his full-time job. He loves his coworkers and the vibe at his company and has no plans to leave. But one thing most of his coworkers don’t know is that Matt makes an additional $200,000 a year from his side hustle—a dog-walking company that he launched three years ago while still a student.

Matt started walking dogs for $5 a walk as a way to make some extra money in between classes after seeing a posting on a school message board. He was walking up to 10 different dogs each week, but as more people moved into his neighborhood, he started to attract more business than he could handle. To satisfy demand, Matt set up a limited liability company (LLC) and hired a few other students to walk dogs as well. Now he’s making four times what he earns at his office job just from this simple business idea.

real-estate-investing-easy

Matt is also saving a ton of money because he pretty much lives like a student. He still lives in the apartment he had in college and invests almost 100 percent of the profit he makes side hustling. Making $55,000 and saving 20 percent of his salary per year ($11,000) at a 7 percent annual growth rate, Matt would have needed about 33 years to hit his $1.5 million number. And as you know, after 33 years, he’d actually need a lot more than that to retire. But because of his side hustle, Matt’s currently on pace to have $1.5 million saved by the age of 30 (in just five more years).

If you want to make a lot of money quickly, you need to diversify your income streams by developing one or more side hustles—moneymaking ventures outside of your full-time job. In this chapter, you’ll learn how to pick, start, and grow profitable side hustles that can help expedite your journey to financial independence.

It’s one thing to make a few extra bucks on the side so you can go out to a nice dinner or buy a nice pair of shoes, but if you want to reach financial independence as quickly as possible, you’re going to need to up your side-hustle game. You need to move beyond simply trading your hours for a limited amount of money and transition to thinking about side hustling using the enterprise mindset.

Related: 16 Side Hustles to Help Save Money for Your First Deal

Feed Your Investments with Side Hustle Money

The enterprise mindset requires looking for as many opportunities to make money as possible, which means investing all the money you make. You need to put your side-hustle money in investments so it can work for you. Every side-hustle dollar you invest reduces the amount of time it will take to hit your number. It would have taken me at least two to three times longer to reach financial independence if I hadn’t invested almost 100 percent of my side-hustle income.

Side hustling is great because you can make money—sometimes a lot of money—doing pretty much anything. You can mow lawns, walk dogs, shovel snow, babysit, make deliveries, or chauffeur people. You also no longer need to be present to start a side hustle, since making money online has never been easier. You can code online, tutor, launch a blog, flip products on eBay or Amazon, participate in focus groups, or do an infinite number of other things. But few people use side hustling to its greatest potential, which is all about making a lot of money and then investing it to make it grow. If you are making money on the side, but not investing it, then you are wasting time by not making nearly as much money as you could.

5 Side Hustles I’ve Used to Make Extra Money

While I had always had side jobs growing up, it wasn’t until 2010 that I really started side hustling seriously solely so I could have more money to invest. Before that point I would have just spent the extra money (which is why I was broke at 24!), but once I learned about the future value of money, I was hooked. At the time, I was working at the small digital marketing agency making $50,000 per year. On the side I was spending most of my free time (about 40 additional hours a week) making as much money as I could doing (mostly) things that I really enjoyed, like:

Building websites for law

My first project was a $500 gig I found through Craigslist, and three months later I sold a $50,000 project using the same template! One lawyer introduced me to another, and I never had to do much selling, since my business came mostly through referrals.

Related: BiggerPockets Money Podcast 28: How Anyone Can Easily Make Extra Money Using Side Hustles with Nick Loper

Flipping domain

This was definitely my most profitable side hustle. Domains are the real estate of the internet and are still significantly undervalued in my opinion. I was able to buy a lot of social media, legal, money, and education-themed domains early in domain auctions. I routinely was able to buy a domain for less than $50 and resell it within a year for $2,500 plus. That’s at least a 4,900 percent return on my investment. Of course, not all domains sell for that much or at all, but overall, it’s been the perfect side hustle, and I’m still doing it! I own over 800 domains as of this writing, and they are just getting more valuable. The average price for a mid-tier domain has jumped from $400 to $2,500 in the past three years alone.

Running digital marketing campaigns for law firms and real estate

In addition to building websites for law firms and real estate agents, I was also able to command up to $500 for any qualified lead I was able to capture for them through my ad campaigns. At one point I thought hard about scaling this business, but I didn’t enjoy it enough to do so.

Doing search engine optimization projects.

I really love SEO because optimizing websites to rank on Google is both an art and a science. SEO is the compounding interest of digital marketing because the small adjustments and optimizations you make grow exponentially over time. It’s challenging, competitive, fun, and profitable. While SEO is more of a commodity now than when I started doing it, it’s more in demand than ever, and if you are good at it, you can make a lot of I’ve designed SEO strategies for hundreds of websites through the years and learned a ton that has also helped me grow MillennialMoney.com.

Flipping vintage mopeds and Volkswagen

I have been buying and selling both VW campers and mopeds since I was in college. I’ve sold more 1970s vintage mopeds than VW campers, but when I find a good deal on a camper, I don’t hesitate. I love VW Westfalia Campers from the 1970s and 1980s and have owned two over the past 10 years. They have gone up quite a bit in value over that time and keep going up!

I also did a bunch of miscellaneous things like selling concert tickets, watching my neighbor’s cat, reselling high-end office chairs, writing white papers (detailed or authoritative reports), doing research, and even babysitting occasionally. No job was too small.

I was always looking for ways to make more money, and most of my investment gains have been made on money I made side hustling. It’s also worth noting that all of my side hustles were things I didn’t learn in school, need a college degree for, or have to work through another company to do. There are two ways you can make money side hustling: you can work for someone else or work for yourself. If you are side hustling for someone else, the money you can make will always be limited by the number of hours you have in the day. It’s really tough to get off your nine-to-five job and hop in a Lyft to drive all night. Sure, it gives you flexibility and freedom, but no matter how much you drive for Lyft or deliver for Postmates, you’ll always be limited to your own hours and will make only as much money as those companies are willing to pay you. In other words, these gigs are not scalable.

Working for yourself allows you to make a lot of money doing something that you love and gives you more control. Matt could have easily worked for someone else’s dog-walking company and made $10 per hour, but by launching his own company, he gets to make money, not only on the time he spends walking dogs, but also on the time his employees spend walking dogs. Then he invests it so the money grows even more. I’m not saying it’s not worth walking dogs for another company so you can invest a few hundred extra bucks a month; any additional money you invest will help you reach financial independence sooner. It’s simply not as lucrative as working for yourself.

When you work for someone else, you don’t set your rates, but if you start your own business, you can (at least to a point that the market will bear). For example, even if you’re a babysitter, you’ll earn more money working for yourself and establishing your own stable of clients than you will signing up with a day care or babysitting service. And over time you may be able to charge more because your clients will come to trust you and perhaps you can offer an additional service—like tutoring or prepping dinner for the family. Plus you will get 100 percent of the profit (minus any overhead) instead of sharing a portion with your employer. If you really want to make a lot more money, you can start hiring other babysitters to do the work for you and take a share of whatever they make. The point is, working for yourself gives you more control over your money and your time and the opportunity to grow your business if you want to.

What side hustles have you tried? Would you consider any of the above?

Leave a comment—and don’t forget to check out Financial Freedom: A Proven Path to All the Money You Will Ever Need!





Source link

Advertisements

Leave a Comment

Your email address will not be published. Required fields are marked *

*
*