Lizzy and Lissa break down the hidden costs – financial and otherwise – of side hustles. While side gigs can be a great way to earn extra income, they come with unexpected trade-offs, like taxes, burnout, and the struggle of time management. This episode covers the ups and downs of side hustles, but also how to make them work without sacrificing your financial well-being or mental health.
Lizzy and Lissa break down the hidden costs – financial and otherwise – of side hustles. While side gigs can be a great way to earn extra income, they come with unexpected trade-offs, like taxes, burnout, and the struggle of time management. This episode covers the ups and downs of side hustles, but also how to make them work without sacrificing your financial well-being or mental health.
Main Topics
00:00 Introduction
01:19 Running The Numbers Segment
02:26 What Exactly Is a Side Hustle?
07:30 Motivations Outside of Money
12:51 The Costs of Side Hustles
20:41 Legal and Tax Implications
24:24 Navigating Financial Planning and Tax Strategies
25:40 Leveraging Your Skills
28:06 Balancing Time, Energy, and Resources
29:20 Side Hustles vs. Side Projects
35:26 When To Stop Hustling
39:53 20 Cents Segment
References for Statistics
https://www.marketwatch.com/guides/banking/side-hustles/
Lizzy: Hey, Lissa.
Lissa: Yep?
Lizzy: How many businesses do you have right now?
Lissa: One, I think? Wealth for Women of Color.
Lizzy: Really?
Lissa: Oh, okay. I guess I have a couple of other things. Net Net Podcast. I also have another business, DVLPstudio, it's a web agency. But I guess I consider those side things.
Lizzy: All right, we're going to talk about that. Are side hustles worth it? Let's talk about it.
Lissa: Welcome to Net Net with Lizzy & Lissa, where we analyze hidden costs and empower you to make your own damn decisions in life. Each episode covers a different facet of life, and at the end of each episode, we each give our takes on whether we think something is net positive or net negative.
Lizzy: I'm Lizzy, a strategist and consultant with almost 20 years of experience in finance and investing.
Lissa: And I'm Lissa, a personal finance expert and an accredited financial counselor. We're best friends who talk about money.
Lizzy: And everything else.
Lissa: Are side hustles worth it?
Lizzy: First up, running the numbers on side hustles.
Lissa: More than half of Americans, so 54% of Americans, say that they have adopted a side hustle to supplement their primary source of income in the last 12 months.
Lizzy: That's a lot. 54%?
Lissa: That's a lot. Half of people.
Lizzy: Damn, okay. And Gen Zers are most likely to take on a side gig at 71%, but millennials like us are close behind at 68%.
Lissa: Wow, these are high numbers.
Lizzy: Damn! Two thirds?
Lissa: That's a lot of people. Not my friends. I'm just kidding. Men were more likely than women to have taken on a side gig in the past 12 months, at 59% compared to 49%.
Lizzy: Yeah, because women got whole full-time jobs at home.
Lissa: Yeah.
Lizzy: The high cost of living is the number one obstacle and likely motivation for side hustlers.
Lissa: But we all know there's more to life than numbers and statistics. So, let's talk about it. Are side hustles worth it?
Lizzy: All right, first of all, before we turned the cameras on, we were just sitting here debating how do we even define side hustle? And I think that's a critical topic here. According to these stats, it sounds like they're defining it as some other supplemental source of income. But it's a little complicated when you're an entrepreneur. What's the difference between a side hustle and multiple revenue streams?
Lissa: Yeah, or if you're a freelancer, a gig worker, and you have multiple sources of income, but there's not one primary one, then are the other things... How do you know what is something you're doing on the side?
Lizzy: I think of it as something that's not your number one focus in terms of energy, time and energy. Not to say that it's passive, but unless you're dividing your time equally across five different things, if you have the one thing that gets the majority of your time and attention, or even that you're expecting or hoping will eventually provide the majority of your income, I would say the other things are more of a side hustle.
Lissa: Okay, that makes sense. So, you had asked me at the beginning of the episode how many businesses I have, and so I guess the first thing that comes to mind for me is my main business, Wealth for Women of Color, but no one really knows that I have a second business.
Lizzy: Exactly.
Lissa: Because I don't talk about it, I don't spend a lot of time on it. It's just there, it makes a little bit of money, and that's it.
Lizzy: Which, to me, is, by definition, a side hustle.
Lissa: So, I guess that's a side hustle. And the crazy part is I just never thought of it like that, because even though it is now, by your definition, it is something I do on the side, and I would consider it a side hustle, because it's a business that I own and that I operate, that I created, I feel like I just see it as a business.
Lizzy: Yeah, so I was thinking about that as well, because I think there's some connotation to side hustle as hustling, like selling CDs out the back of your car, like some bootleg shit or whatever. And that's a little different than building and operating something as a business. But maybe not. And how do you perceive the word "side hustle", or what comes to mind when you think about it?
Lissa: I guess growing up, if I heard "side hustle", that is kind of what I would think. Not the CDs out of the back of your car, but that you're putting effort and energy into something else. You're using some of your time, because you want to make more money. So, the more effort and time and energy you put into it, the more you get in return, in terms of a little bit more money, like extra cash, money that you wouldn't have if you were just focused on whatever, your main job or main source of income. Now I'm kind of like, I don't know fully how to define it, now that I'm in the personal finance world, because I do think multiple sources of income are great, but that second business that I mentioned, it's not fully active, it's part passive. I'm not spending a ton of time on it. It can still kind of run without me there. So, I think I used to associate side hustle with your energy and output.
Lizzy: Oh, interesting.
Lissa: Right?
Lizzy: Got it.
Lissa: But that could be a false, bad definition.
Lizzy: Oh, that's so funny, because that would've never occurred to me. Oh, I thought you were referring to the fact that one is more structured, it's organized as a business, it's a partnership with someone, and it's then more official than a side hustle. It didn't occur to me you were referring to the energy going into it.
Lissa: Yeah.
Lizzy: So interesting.
Lissa: So, I don't know how I define it. So, the easiest way that I could define it is if you have a main source of income, primary source of income, a job, whether that's 40 hours a week, whether it's part-time, whatever that main source is that you rely on for your everyday expenses, for your rent, for your bills, that is your main source of income. And then if you elect to do additional things because you want extra cash, maybe you're saving up for a trip, maybe you just want to boost up your emergency fund, and you want to create extra income, but you don't necessarily, I guess, rely on it? Now, that's another thing, relying or depending on it.
Lizzy: Yeah, it's supplemental.
Lissa: So, it's supplemental. That's kind of how I see side hustle income, or what side hustles are. But now that I think about it, I think people also define it as they have to have a side hustle, because otherwise they can't pay their expenses.
Lizzy: Sure, right. And that is definitely a factor for a lot of people, that they said the high cost of living is why people have side hustles, trying to survive.
Lissa: So, what's your experience with side hustles?
Lizzy: I guess for me it came out of I have a full-time job at an agency, and I'm going to take a job on the side as a freelancer, more because the project came my way, and as an opportunity to build up my own portfolio and stuff, this was in my early twenties, than about money. Which is an interesting thing for me, because you hear so many stories of like, "Oh, this entrepreneur that's like, everybody knows, when they were a kid, it was in their blood, because they turned water into wine for 50 cents, or they had a lemonade stand, or whatever." And hearing those stories, I always felt like, "Oh, I don't do that, so I could never be an entrepreneur."
That is not in me naturally, because I am not motivated by money. I have always had side projects. Was the purpose of them to make money? Almost never. And so that's been an interesting thing for me, of there's probably never been a time in my life where I didn't have a second thing I was putting time and energy into because I thought it was valuable or interesting, but a lot of the time they have not been for the purpose of making additional money.
Lissa: Okay, so you've never had a job or a certain amount of income and felt like, "I need more, because right now, this job is not enough."
Lizzy: I guess I have, but I don't think that was the main driver of pursuing... When I first started, I started an agency, it was just me. The name was Rousenster, and that was my first freelancing, all my first clients. This was, I think, 2011, 2010.
Lissa: But it was something you were passionate about or wanted to do?
Lizzy: I wanted more experience in design. The income was great, but it wasn't the reason behind it. And then I just had clients coming to me, because when people know you're a designer, people come to you. And it was also I wanted to get better, build my portfolio, get more experience, that kind of thing. I charge money for it, for sure, but that wasn't the primary motivation.
Lissa: So, it's sounding to me like side hustle, it's a different definition, depending on who you ask. Because if you were to Google it, or go on YouTube and look up side hustles, ways to make money, you're going to see a lot of similarities with do dog sitting, do house sitting, babysitting, I don't know, sell things. So, this is some pottery. We've both taken pottery classes in the past separately, you did it a long time ago. But when I started doing pottery I was like, "Can I be good enough where I could sell some of these pieces and let that be a side hustle, and make extra income?" So, I think there's a limited view in some areas, if you go on the internet, where side hustles are this thing where you have to create something and sell it, or you have to provide a service, like gig work, almost.
Lizzy: Right. It's funny, because my first connotation of it is flipping something, right? Like the kid who goes to Costco in high school and buys the candy bars that are super cheap, and then they sell them for four bucks each at the football game or whatever. That's how I think of it. It's kind of making money out of nothing. But then I also think there's a lot of people who have a hobby, and something that they're interested in and passionate about. Peep our episode on collecting, our friend Alex. That while they're at it, why not try to make some money at it? And so I think that that's another example.
I have a friend, we have a friend, you know him as well, who to me is the master of the side hustle. He's a friend of the pod, and so he won't trip if I share this. This epitomizes it. So, he is an engineer by day, very, very successful person, and at any given moment will be slinging shoes, really high-end Ciroc bottles, and weird, hard to find liquor. He has a credit repair business and a trucking business. And probably not all doing them at the literal same time, but anytime I talk to him, it's like, "Oh yeah, I'm doing this, and then this popped up. I saw this opportunity here, because these were hard to find, and so I just bought a few to sell them for a little come up." That kind of mindset, that's so intuitive to him, and I don't have that, but that's kind of what I have always associated with side hustles.
Lissa: Yeah, so a hustle mentality. But again, it's like you have to put some effort and energy-
Lizzy: For sure, yeah.
Lissa: ... and time into it, yeah.
Lizzy: For sure. Yeah. All right. So, let's talk about the costs of side hustles.
Lissa: The cost of side hustles. Time.
Lizzy: Time, for sure.
Lissa: A lot of people want, in my experience, want more income, and want passive income if possible, and sometimes don't have money to start making passive income through investing, right? Because you can make passive income if you make investments that can pay out, interest dividends or other types of investments that have an income payout. So, the way I see it is you have to, in order to set up a passive stream, you kind of do first have to give some time and energy, and sometimes a money investment, too. Maybe learn a new skill, or buy some supplies, or-
Lizzy: Yeah, for sure. Startup costs.
Lissa: ... a startup cost. So, I guess, yeah, the cost to me is all the costs: time, energy, money.
Lizzy: Yeah, I completely agree. I also think you're dealing with probably approaching people in your network, selling, social costs. And that could be good or bad, right?
Lissa: Are pyramid schemes usually side hustles for people?
Lizzy: A lot of people, yeah, like Mary Kay or whatever, selling stuff on the side. And that can put you in a weird situation. It can put you in a weird situation with your job if they find out what you're doing and, "Oh, you're not committed to this."
Lissa: Sorry, multi-level marketing, they're not all pyramid schemes.
Lizzy: Multi-level marketing scheme. That's very PC of you.
Lissa: Sorry.
Lizzy: Yeah, I think there's definitely some other kind of social cost. And then just like anything involving business, or like we've talked about on our entrepreneurship episode, there's a lot of mental costs associated with putting yourself under that pressure, the stress of it, and all of that as well.
Lissa: Yeah. I guess when I was working a full-time job, that is actually when I started my first business. So, I guess you're right, that web agency is a side hustle. But beyond that, for the most of my career, working full-time, I couldn't fathom, nights and weekends, giving them up because I'm trying to hustle more and more and more. I kind of just put a lot of my energy towards that job to get a raise there, because it felt like it'd be more efficient. It actually wasn't for me. But in a way, side hustles can hedge your bets-
Lizzy: For sure.
Lissa: ... against relying on one source of income or one company.
Lizzy: Yeah, or it can be a starting point, right? So, before I went full-time in entrepreneurship, I started my brand strategy consultancy, and did it on the side for a whole year while I was working full time, tried to establish my business. I think I brought in 40 grand that year on the side. That's a solid little side hustle.
Lissa: Yeah, that's a full income for some people.
Lizzy: It's a full income, yeah. It was a lot of work, it was really tiring. And then I went full-time into it, and I've talked about a lot of the lessons I learned on that. But yeah, I've had a few. So, I had, mostly in design and branding and that kind of thing, like taking clients on the side or consulting. I started a brand that felt like a side hustle, although it was for free, which was called Morning Sunshine, and it was kind of like a community event series around goal setting and positive thinking. And I approached it like a business, but all the events were held for free. And so that was another example that laid the groundwork for me quitting my job.
Lissa: This is also a side project.
Lizzy: Side project, right.
Lissa: Yeah.
Lizzy: And then my Airbnb, that business is a side business, for sure, or investment property. I approach it like a business. I have to do all the books and build the brand and stuff.
Lissa: Do you consider that a side hustle?
Lizzy: I do, because to me, it's more about where I'm putting my energy, and last night I was up putting a lot of energy into it, because I had to do a bunch of permits and stuff. But for the most part, it's an extra thing over here that's not my number one focus. My number one focus is the other business I'm growing. And so by that definition, even for me, Net Net would be a side hustle, because it's not my number one, I'm not spending 10 hours a day on it. So, that's kind of how I think about it. And then I have toyed with, and have the beginnings of, a few other ones. One in interior design, I actually sold some pottery and I was starting to build out a brand around design and art, and it's just on hold, that eventually I'll pick that back up. And I still get interior design clients here and there.
Lissa: Yeah. So, that's interesting. So, a lot of your interests and energy goes towards projects first and foremost, for some other reason: a passion of yours, an interest, and then the money that follows can follow.
Lizzy: Because money, for me, is not enough of a motivation to spend time on something. That's just not how my brain works. I have to be interested in it.
Lissa: So, that's interesting, because then, in that sense, I don't know that I would define those as side hustles. They're just things you do, right? Yeah. I guess when I think side hustles, now that I'm thinking about it, I think of when someone has a certain level of income and they're just like, "Man, if I could just have $100 more a week, that'd be so helpful. What can I do to get that extra $100?"
Lizzy: Interesting.
Lissa: Then I'll come up with ideas, like, I don't know, create some PDF document or worksheet and try to sell it online, or pick up... I actually tell people if you want to make 200 bucks, 300 bucks a month extra, then make friends, find someone you can dog sit for one day out of the month, maybe for a weekend, like they go on vacation on a weekend trip, and you can dog sit and house sit for someone. That's a couple hundred bucks.
Lizzy: What about Ubering for a couple hours a week?
Lissa: Yeah.
Lizzy: That will-
Lissa: At least there's startup stuff with that, because you got to-
Lizzy: Yeah, for sure, for sure. That's so interesting, where we both-
Lissa: Yeah, so it's like gig work-
Lizzy: ... draw the lines and how we perceive it.
Lissa: ... freelance work, side projects, side hustles.
Lizzy: To me, those are pretty much all synonymous, if they're not where you're putting the majority of your energy.
Lissa: Okay, so here's our new definition. These are things that you're not putting the majority of your energy, but that the primary motivator is for supplemental income to whatever your main source or sources of income are. Is that a good definition?
Lizzy: Yeah, I think that's cool, yeah. Yeah, yeah.
Lissa: All right. So, in that sense, besides the cost of the obvious time and energy, and sometimes money for startup costs... Oh, you mentioned a cost if you have to sell to people.
Lizzy: Yeah, for sure. Yeah, absolutely. That can make it really awkward for people around you, or you're really uncomfortable with it. I think a lot of people, if they felt comfortable selling, they might do more of that, and not everyone has that skill set. So, I think that can be really challenging.
Lissa: Yeah.
Lizzy: Yeah. And then another thing that comes up often with side hustles is the legal costs. Because I would say for a lot of people, they're not approaching this like a legitimate business, where they're filing tax returns, or really doing their bookkeeping, structuring their accounting and stuff. And technically, by the letter of the law, they should. And so there's the $600 limit: if it's under $600, you don't have to issue a tax return for someone as if they were your employee or whatever, contractor. So, a little bit of money can be exchanged, but what's the line, right?
Lissa: Yeah. So interesting. That's why some people who take on side hustles will do cash only side hustles.
Lizzy: For sure.
Lissa: Because technically, income that comes your way, whether it's cash or not, needs to be reported, and you have to pay taxes on.
Lizzy: Needs to be reported.
Lissa: But if it's a cash business-
Lizzy: Technically, it needs to be reported!
Lissa: Technically, it does! Technically, it needs to be reported. But you're right: if-
Lizzy: Yeah, it's under the table.
Lissa: ... it's under the table, and if you get away with it, all right, cool. If you don't, you can get in trouble via the law.
Lizzy: Sure, absolutely.
Lissa: You can go to jail for tax evasion.
Lizzy: Yeah, for sure. And I think most people don't consider that, especially if it's something small like a lemonade stand, right? No one's really going to arrest some kids-
Lissa: And interesting-
Lizzy: ... but you know what I mean? Something like that.
Lissa: Because that's the thing; if you make more than $600 from a source of income, then technically, you have to report it.
Lizzy: You have to report that, yeah.
Lissa: And most people won't, because an extra $1,000 a year, as nice as that sounds, is not that much money, so it doesn't feel like enough, like, "Oh, I barely made an extra $1,000, and now you're going to tax me on that, too?"
Lizzy: And a lot of people don't even know that, that you have to do that, right?
Lissa: Yeah.
Lizzy: So you can accidentally get caught out.
Lissa: I was studying for my exam the other day, and there was some definition of what income is, because you start out... To figure out your tax return, you have to figure out all income sources, and the definition of income was something like everything is income if it increases your wealth, so the amount of money you have. Everything is, unless it's excluded from the definition of income, and there's one or two things, but no, everything is basically considered income.
Lizzy: Yeah, for sure. Yeah. I think of it like Nipsey Hussle, all money in, like an income statement. All money in is income.
Lissa: Yeah. So, interesting, so having a side hustle could have certain legal-
Lizzy: For sure, yeah!
Lissa: ... tax-related ramifications if you don't handle it properly. And I do think that's why some people have a fear of trying to make more income, because of getting taxed on more income.
Lizzy: Yeah, for sure. And it could be complicated, not knowing how to handle it, and I don't want to deal with that.
Lissa: Yeah.
Lizzy: Yeah, definitely.
Lissa: I think I hear that a lot, people, they don't want to make that next dollar, because they'll get pushed to the next tax bracket or whatever, and it's kind of silly, because for the most part, for most people, unless you're making millions and millions and millions, for the most part, more money is good.
Lizzy: Yeah, there's really weird, specific ranges in which that next dollar isn't going to be a net positive. Not really, it always will be.
Lissa: It'll always be net positive from a financial perspective, but there could be some things legally that you can't qualify for. You can't qualify for-
Lizzy: Got it, yeah.
Lissa: ... financial aid or things like that, you know? Like-
Lizzy: Yeah.
Lissa: So, it's very interesting. Let's be clear: more money is good.
Lizzy: More money is good.
Lissa: Those are good problems to have, if you're trying to figure out how to get taxed less.
Lizzy: First class problems, for sure.
Lissa: Yeah, because there are financial planners out there who can help you with tax strategy.
Lizzy: For sure, yeah. That reminds me of people who are like, "I don't want to lift weights, because I don't want to get big." Bro, you don't get big on accident. People spend years, so much time and energy, trying to get big. It's just not going to happen overnight by accident.
Lissa: Yeah. Dang, that's so interesting.
Lizzy: Yeah.
Lissa: All right. What other costs with side hustles?
Lizzy: This isn't a cost, but it was something that crossed my mind. It's almost the opposite. So, I was thinking of couponing. Is that a side hustle? You're not making money, but you're saving money.
Lissa: You're spending less.
Lizzy: You're spending less.
Lissa: I guess why not?
Lizzy: Right? I think I've known a couple people who go ham on couponing, and I'm like, "Oh, that's kind of interesting."
Lissa: I think anything that contributes to growing your net worth... Actually, that's not a full definition. Some people will make more money through side hustles and then spend more money. So, it's not actually improving your wealth.
Lizzy: Yeah, the net worth, but their top line.
Lissa: Yeah.
Lizzy: Yeah. Yeah, yeah, yeah.
Lissa: Okay. That makes sense.
Lizzy: We're getting technical now. We're getting technical.
Lissa: We're getting really technical. Okay, so if someone came up to you today and they're like, "Liz, you're very successful. You make a lot of money, you've done so many different endeavors. Look, I have a job. I have a little bit of extra time every week. What can I do to make a little bit more money?" How would you guide them?
Lizzy: Oh gosh, that's hard. You gave a bunch of good examples that I think the average person can take on. My instinct is always what are you good at? What skills do you have? And how to leverage that. But I think that just shows from my experience and background in design, media, marketing, where it's more of a freelancer mentality. Or I'm also just prone to make things, so what can you make? And that can actually be a limitation. I'm not sitting there thinking about how you buy and resell, or have some other kind of business. That just doesn't necessarily cross my mind. Som that would be my gut, is what do you make? What do you do? What skills do you have that you can share with other people?
Lissa: Something that I get asked, because I used to work at YouTube, a lot of people are always like, "I want to make a YouTube channel. I want to monetize, I want to make extra income from it." And we have an episode on content creation.
Lizzy: Yeah we do, check it out.
Lissa: And I love the idea of creating content if it's something you want to do, you enjoy, and you have something to share with the world. And the added bonus that if you do it on certain platforms like YouTube, you have the potential to make money. The thing with that, though, is there's a different equation. There are side hustles you can take on where you don't need money to get started, but you need the time to get started: dog walking, house sitting. There are others that you might not have a lot of upfront costs. You can create a YouTube channel with your phone and a Google account. You don't have to pay for anything. Eventually, you probably want to get better lighting and all that stuff.
Lizzy: Sure. Sure, sure, sure, sure, yeah.
Lissa: But you could technically start with no money, just your time and energy. But things like that will have a longer period of... Could be a much longer period without any income. So then now you're balancing, okay, what do you like doing? You enjoy doing? That you're good at? But also that it meets what resources you have to start with. How much time do you have to start with? How much energy do you have to start with? How much money do you have to start with, at this moment in time? Because if you have no money for upfront costs for anything, you can't really buy and sell things, right?
Lizzy: Yeah, for sure. It's limiting. That's kind of interesting as you're saying that, I'm thinking of another element of our definition, is the upfront investment of time and resources, like the time to get paid. And I think a lot of the connotation with side hustle is it's a quick process, versus building a long-term business that's maybe more sustainable, or a larger overall investment of time and resources.
Lissa: So, in our definition for side hustles, it's like you don't got time to wait for the income to come in. It's something you want to start and do so that you can get paid in the next week or two or three.
Lizzy: I think that's a factor in it. I don't think it's definitionally, but yeah, I think you're more inclined to see that with people, not spending a year of building something before they're going to make money.
Lissa: Yeah. Okay, interesting question. So, besides, obviously, the obvious benefit of a side hustle, which is more money, what are other benefits?
Lizzy: You can enjoy it. You can practice and develop skills, like selling, like making things. You can learn things in the process. Like I was saying, I did this to help build my portfolio, and get more experience. Selling anything, you're developing and practicing those kinds of skills. So, I think that's another thing you... Depending on what you're doing, you're meeting people, you're networking, you may be making friends. So I think, like any other business endeavor, there are a lot of other benefits way beyond just the financial component.
Lissa: Yeah.
Lizzy: What do you think? You got anything else?
Lissa: I guess now I'm conflating side hustles with side projects, because I've had a lot of things, similar to you, that I didn't go in it for the money, that were just kind of like an interest or a hobby that I thought I'd try out. And it's those things that even though I made very little or no money on them, I gained so much more, in terms of skills and experiences, that have helped me build the businesses I have now.
Lizzy: For sure. Yeah, I have several examples, and I know several of yours. And I think that's interesting too, and this is kind of a topic for another conversation that we have on our list, but thinking of you're about to take your CFP exam, I'm starting the CAIA certification. Yours is more directly tied to your primary business. Mine is very related to my primary business, but I don't need to do it, right? It's something I want to do, because I find it interesting and I'll learn a lot. That, in an indirect way, might help me make more money in the future, I'll leverage it in my job, but it's more educational. And how does that tie into this side hustle concept?
Lissa: No, that's for sure a future episode of continuing education.
Lizzy: We're going to dive into that, for sure.
Lissa: Yeah, because-
Lizzy: We got a lot to say.
Lissa: ... underrated, how much more money you can make with a little bit of extra education.
Lizzy: But also don't sleep on how much time: this girl took a six-hour practice exam today.
Lissa: Man.
Lizzy: Time, y'all!
Lissa: Time!
Lizzy: All right, not to jump ahead to that, but I think that is an interesting thing. Where's the line between project and hustle? Is it in the intention to make money, or in the outcome of making money? Or is it even about money? Because you can win and earn in other ways that aren't just financial.
Lissa: Or is it just a silly term that who cares what we call-
Lizzy: I know, we're spending an hour defining something that don't really matter. Is this whole episode a waste?
Lissa: Yeah, this whole episode, just throw out this episode.
Lizzy: Just throw it out.
Lissa: No, I think it's important though, because what's the statistic of how many people feel they need a side hustle?
Lizzy: Yeah.
Lissa: And that's interesting though, because I wonder how they define it? What are they talking about? Are they talking about all of the dog... I keep saying dog sitters.
Lizzy: That's heavy on your mind right now.
Lissa: Because we just did the episode on pets, and that's a big industry, man.
Lizzy: For sure, yeah.
Lissa: Yeah, so I just keep thinking about... And you were saying most people can do that, you don't have to learn much. Obviously you have to be able to take care of... Have some common sense to take care of an animal, but-
Lizzy: For sure. Okay, I thought of two other costs just now. One of them is focus, right? I think some people will have their hands in a lot of different pots, and they're actually just distracting from the one thing that they could be growing. I've experienced that in an actual business environment, where you're trying to sell too many different things, and not focusing on really what the core of your business should be. But I think that's something that people don't take into account, especially when you're an entrepreneur and you're like, "I'm building this thing, but oh, there's this opportunity here, and it seems interesting and I want to do it, and I could make it happen." And it's like, yeah, but if you put that same energy into that one thing you're already doing, would the end return be better?
Lissa: Right. Yeah, that's a good one, because let's say you have a main job, and you have two side hustles, and each side hustle makes you an extra $100 a week each. But you're so spread thin between these various things that it's capped at that, $100 per side hustle a week, so that's $200 a week. But if you just dedicated all your extra time towards one side hustle, and that could actually get you $300 a week-
Lizzy: Look at you, putting numbers to it.
Lissa: I know!
Lizzy: That's exactly what I mean. Exactly.
Lissa: I'm over here praying that my numbers add up.
Lizzy: No, no, you're good, you're good, you're good. You nailed it.
Lissa: You get what I mean, right?
Lizzy: Yeah.
Lissa: Okay.
Lizzy: But I think that's exactly right, and I think almost all the time, you're better off having fewer things and focusing. And that seems counterintuitive, and I think there's a lot of weird social pressure for people in general to have a side hustle, this is my other cost. But for people who are already entrepreneurial and have already developed some of those skills, to have more, right? I fell into this at one point. I was like, "Oh, okay, I could advise on this business over here, and maybe get some equity, and then I could do this thing over here, and I could do that and that, and I could have 10 income streams." It's like, A, but can you really? Or B, is that the best optimal use of your time, versus investing singularly in the most lucrative one?
Lissa: Okay, I love that you brought this up, because it made me think about something I always talk about with clients. I don't know how I forgot about this. And it also made me think of the homie who is slanging Ciroc or sneakers or whatever. But there comes a point in your journey when you're building wealth, or getting your finances in order, where you want to really think about how much is enough? What does "enough" look like for me? And that doesn't mean you're limited to enough. You might be able to live off of six figures a year, but that doesn't mean you're going to be closed off to the millions that are going to come your way later.
Lizzy: Sure, opportunity comes, yeah.
Lissa: Right. But at what point are you sacrificing living life? And we all have different definitions of what living life means, but if you're trying to run a full-time job, and 10 side hustles, and your income is not growing, or you're just spending more energy to play catch up with what, and then when do you actually get to enjoy the fruits of your labor?
Lizzy: Right. And I think that's critically important, just in terms of what are your objectives for this? And obviously this is different than, "I need money to survive." This is more if, let's say you're surviving, but you want to get to that next level, there's a line of what's healthy and what's actually beneficial, what's going to burn you out. And there's also what is the value of your time?
And so I think about this, there are times when I'm like, I have control over my schedule. I could go pick up a part-time job and just get some easy cash that doesn't require thought, like... I don't know, I don't want to shit on any job. But something that's easier, feels easier or less stressful, relative to owning your own business. Or go Uber, I could go drive, or whatever, for a little bit. But to me, the value of my time is disproportionate to some of those activities. So, an hour of time in my business, or if I'm being really straight up, an hour of my time if I'm charging for consulting, might be $150 an hour, $300 an hour, several hundred dollars an hour. And that doesn't mean I'm always earning that, but that's how I'm pricing it. So, I absolutely could do a side hustle over here, but the time is worth more than the money for me.
Lissa: Yeah, it comes to that point. And that makes me think, I've done videos on this on TikTok and Instagram before, where one of my biggest side hustle rules is that side hustles are temporary. I don't have a timeline for that. I can't tell you to do a side hustle for three months or 12 months. But like you said, you have to have an objective. So, let's say you don't have an emergency fund right now and your job barely pays you, you barely get by, you're paycheck to paycheck. Maybe you do a side hustle for six months, make a couple hundred extra bucks a month, and stash that directly towards your savings account, so that that's your emergency fund. Then when you get rid of the side hustle, even though you're still paycheck to paycheck, you at least have this additional cushion now.
Lizzy: I like that.
Lissa: Because you went through a sprint. You did a sprint. And that way, yeah, you might be working longer hours and be more tired, but only for six months.
Lizzy: For a specific purpose.
Lissa: For a purpose. There has to be an end in sight, in my opinion. Otherwise, you're going to be working, what, four jobs for your entire life, till you retire at age 67, you know?
Lizzy: Yeah, interesting. I never really thought about it that way, but that makes a lot of sense. And we talked about this a bit on our quiet vacationing episode, but we both know someone who has worked two full-time jobs, and that started as that, a very specific goal of a savings goal for a reinvestment kind of purpose. And, "All right, I'm going to do this temporarily." And now it became the norm, which, for sure, more power to you, but I think that's a healthy way to approach it, unless it's something that just genuinely fills you up energetically, because it's something you would be doing anyway, you just happen to profit from it.
And that has its own pitfalls as well. For example, making pottery. If you love doing this and you're like, "Let me just go make some money at it." That changes your relationship with the activity, by trying to force commerce on something you genuinely enjoy.
Lissa: On a hobby.
Lizzy: On a hobby, right? Not every hobby has to make money, and not everyone has to have a side hustle, y'all.
Lissa: 100%. 20 cents?
Lizzy: 20 cents.
Lissa: 20 cents. 20 cents is the segment of the show where both Lizzy and myself, Lissa, each get 60 seconds to give our two cents on today's topic, which is side hustles. I totally blanked, I was like, "What am I supposed to say next?" Each one of us, we're each going to give you our take, which is a net positive or a net negative. But 20 cents, where does 20 cents come from, Liz?
Lizzy: Because you get the opinion of two dimes.
Lissa: Two dimes, 20 cents. Dime. Dime. Get it? All right.
Lizzy: You got me good.
Lissa: All right, Liz, you're up first. You have 60 seconds on the clock. Are side hustles worth it?
Lizzy: Okay. This one's a really weird one for me, because I think it depends on how you define it. I think I am going to say net negative, which is... Hear me out. Okay.
Lissa: I'm hearing you. I'm not hearing anything.
Lizzy: I need to start this shit over.
Lissa: No, you got to run it. Run with it.
Lizzy: I'll run out of time!
Lissa: Hear you out.
Lizzy: Hear me out!
Lissa: What is it?
Lizzy: Okay.
Lissa: Let's start the clock over, all right?
Lizzy: Start the clock over.
Lissa: Let's start it over.
Lizzy: Start the clock over.
Lissa: Liz, you got 60 seconds on the clock. Are side hustles worth it?
Lizzy: All right. Where I'm at in my life right now, I'm more interested in focusing my time and my energy on building one big thing. That said, I do have this podcast, which I guess, depending on how you define it, could be a side hustle. I don't think of it as a source of income, it's more of a project that I enjoy, so I'm not going to categorize it that way. And technically, I have my rental property. I'm selling it, so that one don't count either. And it's an investment, it's a little bit different. But I think where I'm at, I am more interested in focusing and building one really big thing, because I'm in the process of building a company, and the cost of not focusing feels too great. So for me personally, right now, side hustle's not worth it.
Lissa: Net negative.
Lizzy: Net negative. I surprised myself with that answer. Clearly.
Lissa: I wasn't sure.
Lizzy: Hear me out.
Lissa: Hear me out.
Lizzy: All right, what about you, Lis?
Lissa: All right, hear me out.
Lizzy: Hear me out.
Lissa: For me, right now, side hustle's net negative. I guess I've had a lot of side hustles in my life and career. I've always had intentions to make multiple sources of income. While I was in college, I had three jobs, but I don't know that they were side hustles. But all that said, similar to you, I don't have the capacity right now, at this moment in time, to have side hustles. I'm trying to build Wealth for Women of Color, we have this podcast, and I'm also studying for this big exam. I think if I needed more side hustles later, I might revisit it. But right now, net negative.
Lizzy: I feel you, girl. I feel you.
Lissa: Yeah.
Lizzy: Look at us.
Lissa: Interesting. You don't get a lot of negatives from both of us.
Lizzy: I know. I'm a little surprised.
Lissa: Yeah. But remember, this is what we think, right now, at this moment in time. No one can make that decision but you, and the way costs are rising, you might need a side hustle right now.
Lizzy: You might need one.
Lissa: You might need one.
Lizzy: Might need it.
Lissa: So, what do you think? Are side hustles worth it?
Lizzy: Hit us up, let us know what you think. DM us on Instagram, @netnetpodcast, or email us at hi@netnetpodcast.com. And if you want to follow us individually, here's where you can find us.
Lissa: I'm @wealthforwomenofcolor on TikTok, YouTube, and Instagram.
Lizzy: And you can follow me @live_well_lizzy.
Lissa: All references, statistics, and resources mentioned can be found in our show notes. This podcast is for educational, informational, and entertainment purposes only, and should not be constituted as financial advice. Remember to always do your own research, consult a professional as needed, and feel empowered to make your own damn decisions.