Interested in starting a personal business in addition to your day job? It’s easier than ever before to work full time and get a 1099.
For many people, working a side hustle job is a way of life. According to the Bureau of Labor Statistics, as of November last year, 7.5 million people were multiple jobholders.
It used to be that side hustle jobs were commonly taken on by the cash-strapped. Nowadays, the reasons include everything from earning extra spending money or cash for investing to gathering more work experience or funds to pay off student loans.
Some side hustle jobholders have a passion for the work. Others want to eventually make the side job a full-time career.
Can you make good money with a side hustle job?
On paper, side hustle jobs often appear lucrative. But the reality isn’t always so golden. According to a study by Earnest, 85% of side hustle workers earn less than $500 per month. For instance, Uber drivers make an average of $364 per month. The average is a little higher with ridesharing company, Lyft, at $377 per month. [Source]
That’s not to say that you can’t make good money with a side hustle job. There are people doing just that. Like Sabrina Robinson, who runs Property Maven.
I generate at least $50,000 a year with my side hustle”
Says Robinson: “I generate at least $50,000 a year with my side hustle. I consult with people, in particular, Millennials, about real estate investing. I own four rentals, including one in a ski community in Northern California that is strictly Airbnb.”
According to the Earnest survey, the average amount earned renting out property to overnight guests through Airbnb is $924 per month, which is just over $11,000 per year.
Platforms like Airbnb are making side hustles increasingly more common. According to Pew Research, in 2016, 8% of American adults earned money from an online platform. Eighteen percent made a side income selling online.
What it takes to make good money with a side hustle
If you’re looking for ways to make money on the side with a full-time job, it’s ideal if you can use your time wisely and earn the most possible. Here are some tips for taking advantage of good side jobs to make extra money.
Leverage your skills
If you have a marketable skill, a side hustle that capitalizes on that talent makes perfect sense. Since you know the work well, you can jump in and begin earning immediately. That’s what happened with Teris Pantazes, who owned a construction company for 10 years before selling it to provide handyman services online. In 2015, he founded EFynch.com.
“EFynch is for the person who is handy or even has a daytime construction job and wants to find work in the evenings for extra cash, Pantazes says. “We’re an open platform with competitive bidding. Homeowners advertise jobs and get bids from pros, side hustlers, and regularly handymen. Skilled side hustlers can make up to $1,000 a month through my site.”
Alice Johnson is a content writer for an Australian backpacking website. Her side gig is writing travel ebooks. Says Johnson, “I earn $1,000 on Amazon KDP Select every month. It’s a great side gig for creative people who like writing.”
Extend your day job
Are you a massage therapist for your day job? You can easily use those skills to develop your own side hustle. Work for a platform like Zeel and give at-home massages. With Zeel, you earn 75% of the booking fee, plus an 18% gratuity.
Maybe you work at a veterinarian’s office. In that case, your services are likely to be in demand at Rover. Get paid for dog walking, sitting, daycare, and drop-in visits.
If you’re employed by a moving company, it makes sense to work for an online platform like Dolly where you can earn up to $30 per hour moving people’s stuff.
How to make the most out of a side gig
Since you’ll be putting a lot of time and energy into your side hustle job, it makes sense to get as much out of the experience as possible. Here are some tips.
Treat the side hustle as a separate business
Katie Perry, an editor at AND CO, suggests treating your side hustle as a standalone business. “Even if you have a full-time job, be diligent regarding every aspect of your side business,” Perry says. “In addition to offering quality service, stay on top of invoicing and payments.”
Consider tax implications
As a professional tax accountant, Sean McNamara sees an increasing number of people with side hustles. He’s a CPA with Welker Mojsej & DelVecchio CPAS, LLC. According to McNamara, many people don’t consider the tax implications of starting their own businesses, but they should.
Says McNamara, “Any profits you make from your side business are typically subject to payroll tax, which is 15.3% of earnings, plus income tax on top of that. If a person is already in the 25% marginal tax bracket due to earning a full salary at a day job, then he or she also gets slapped with 40% in taxes on any profits the side hustle makes.”
To avoid being taxed out of profits, McNamara suggests incorporating your business or forming an LLC. He also cautions about IRS hobby loss rules. He says, “If you continually lose money with your side hustle, the IRS will determine you’re not actually in it to make a profit and will disallow any business expenses.”
Avoid becoming dependent on side hustle earnings
To get ahead financially with a side hustle, the key is to keep it just that—a side hustle. Valerie Streif is a senior advisor at The Mentat. The position started as a side hustle for her.
“Initially, don’t integrate the side hustle money into your regular budget,” Streif recommends. “I started by funneling my side hustle money into my travel savings account. Becoming dependent on side hustle income is dangerous unless you have a clear look into the future and confidence that the income can support you.”
Sid Bharath is a marketing consultant, who’s had side jobs and also worked at Thinkific, a company where people make money with online courses. Says Bharath, “I’ve seen people earn from $1,000 to $2,000 per month from side hustles. It doesn’t happen overnight, though, which is why many people give up before they see any returns. Be patient and keep working, and you can be successful.”
It may take a while for you to build up enough business that you make a substantial amount of money with a side hustle job. For that reason, it’s good to find the work satisfying. Says Streif, “Look at which side hustles involve work that you enjoy doing in your spare time and require the least amount of investment.”
Side hustles that make the most money
If you have a solid work ethic, you can make good money at just about any side hustle. The following commonly found side gigs tend to earn some of the highest rates.
Interested in finding the perfect side hustle to rustle up some extra dough? Check out SuperMoney’s side job’s page and start making money today. Some of these gigs you can even do from home.