The Differences Between Passive Income and Active Income
Income falls into one of two categories: passive and active income. While most people have heard about passive and active income, many are unsure of the difference between the two or how to earn passive income.
Many believe that understanding how to create passive income is the key to building wealth and financial freedom. As Robert Kiyosaki (author of the bestseller Rich Dad Poor Dad) once said, “The key to financial freedom and great wealth is a person’s ability or skill to convert earned income into passive income and/or portfolio income.”
In this article, we’ll discuss the pros and cons of passive and active income and the benefits of earning passive income from real estate.
Key Takeaways
The two main types of income are passive and active.
Passive income includes money earned from interest, dividends, and rental property.
Active income includes hourly wages, salaries, and commissions.
Real estate investors can generate both active and passive income, depending on the investment strategy used.
Passive income from real estate receives preferential tax treatment, with more opportunities for reducing the amount of income tax paid on passive income.
What is Active Income?
Active income is money received for performing a service, such as working a full or part-time job and receiving a salary, commissions, or tips. Earnings generated from self-employment or materially participating in a business and getting paid are two other forms of active income.
For most people, active income is earned before passive income can be generated.
Oftentimes real estate investors work a full-time job to earn active income, then reinvest as much as possible to begin building a passive income stream from things like rental properties.
Let’s review some examples of active income:
Hourly wages are a common way of receiving active income, whether from part-time or full-time employment. One of the potential advantages of being paid by the hour is that an employee may have the opportunity to earn extra income by working overtime, and on weekends and holidays.
Salary is a fixed amount of money received for working a regular schedule such as 8 to 5, Monday through Friday. Employees who receive a salary are effectively trading 40 hours of their time per week in exchange for a guaranteed amount of active income.
Commissions are another form of active income, although the amount of money received can dramatically vary based on the work. For example, real estate agents normally receive a commission ranging from 3% to 6% for selling a house and a leasing commission equal to one month of rent. However, people working a straight commission job often see their income streams rise and fall depending on the time of year and the deals that get done.
Tips are active income received based on the level of service provided. People working in the food service and hospitality industries often receive a fixed salary or hourly wage in addition to earning tips from satisfied customers.
Freelance fees and consulting income are two other types of active income. People with marketable skill sets that are in high demand, such as graphic designers or software developers, often start a freelance business and work for clients as independent contractors.
What is Passive Income?
Passive income is generally earned from an income-producing asset that the investor is not actively involved with. Often, that asset was purchased with savings from active income sources, like wages, salaries, or other compensation.
In addition to not having to spend hours a day generating passive income, investors do not pay Social Security or Medicare taxes on passive income and they can reduce their income tax liability with an array of potential tax deductions.
Now let’s review some examples of passive income:
Interest income can be earned in a number of ways, such as depositing savings in a certificate of deposit or owning a bond.
Unfortunately, the interest rate that many investments pay is less than the rate of inflation. That means an investor can actually lose principal by investing in an asset that pays passive interest income
Dividends from publicly traded stocks are another potential source of passive income. Some well-known blue chip companies paying dividends include Apple, Nike, and Mastercard.
However, as with interest income, dividends paid by companies can often be low. In fact, the S&P 500 Dividend Yield is currently 1.35% (as of June 2021), and has declined from 1.93% compared to the same time last year.
Limited partnership earnings from being a silent partner in a business or real estate investment can be a more profitable way to earn passive income with higher potential returns from recurring income plus a percentage of the profits if and when the business is sold.
Of course, higher returns often come with greater potential risks. Investors placing capital in a limited partnership as a silent, passive partner may run the risk of losing their entire investment.
Rental income from real estate can often offer attractive risk-adjusted returns by generating passive recurring net income along with potential profit from property value appreciation when the home is sold.
According to the Federal Reserve, the median sales price of houses sold in the U.S. has increased by nearly 67% since the last recession in 2007 – 2009. Single-family rents have also been growing as well.
As the most recent Single-Family Rental Investment Trends Report from Arbor Realty Trust reveals, rent growth in vacant-to-occupied single-family homes surged by 8.3% in January, the latest month of data availability.
However, real estate markets historically go through both up and down cycles. For example, home prices decreased between 2007 and 2009 from the market peak, prior to the beginning of the last recession. During that time, many people lost their homes to lender foreclosures and real estate investors buying short sales and REO property from the banks.
How to Generate Income from Real Estate
Real estate can generate active or passive income, and sometimes a combination of both. The type of income generated from real estate depends on an investor’s strategy and whether the investment objective is to generate potential income over the short term or long term:
Active Income from Real Estate
Investors involved in flipping and wholesaling real estate aim to generate income from real estate over a short period of time.
Home flippers purchase a property in need of repair for a below-market price, make any needed updates, then resell the home for a profit to a buy-and-hold rental property investor or a buyer looking for a primary residence. Flippers make repairs as quickly as possible, then resell before market conditions change.
Wholesalers are experts at identifying undervalued property, getting the home under contract, then assigning the purchase contract to an investor in exchange for a small wholesale fee. Networking with a real estate wholesaler can be a good way for finding off-market deals that may have instant equity once escrow closes and needed repairs are made.
Generating active income from real estate usually involves a high level of risk in exchange for the promise of a high reward, and can be similar to working a full time job. If property stops getting flipped or wholesale opportunities dry up, active income from real estate declines as well.
Passive Income from Real Estate
Passive income from real estate is generated by buy-and-hold investors in two different ways: Recurring net income after tenant rents have been collected and the bills have been paid, and from the potential profit from appreciation earned when a home is sold.
Many investors describe passive income from real estate as making money when you sleep. In fact, the political economist John Stuart Mill has been quoted as saying, “Landlords grow rich in their sleep without working, risking or economizing.”
To be fair, earning passive income from real estate does require some work, even when the day-to-day details of managing a rental property are delegated to a local property manager.
For example, a passive real estate investor regularly reviews financial reports such as an income statement and cash flow report, periodically visits remote investments owned out of state, and identifies new opportunities to scale up and grow a rental property portfolio.
One of the best things about owning passive real estate is that an investor can spend as little or as much time as they wish on their business. On the other hand, when active real estate investors stop working, they also stop getting paid.
That’s why many real estate investors seek to generate passive income through real estate.
Active income earned from working a job or fixing and flipping real estate is treated by the IRS as earned income. Earned income is subject to FICA taxes of Social Security and Medicare taxes totaling 15.3%, up to a certain level of income.
Short-term capital gains made from wholesaling real estate or flipping homes are also taxed at the investor’s normal income tax rate when property is held for one year or less. In general, people earning active income also have limited opportunities for using tax deductions to reduce the amount of income tax paid.
Passive income isn’t subject to FICA taxes, and there are a number of ways an investor can potentially shelter passive income from higher effective tax rates. For example, common rental property deductions a passive real estate investor can claim include depreciation, repairs and maintenance, property management fees, mortgage interest payments, and property taxes.
Long-term capital gains tax paid when an investment property is sold is either 0%, 15%, or 20% based on the investor’s taxable income level and filing status. So, even if an investor is in the 32% federal income tax bracket or higher, the maximum capital gains tax paid would be capped at 20%.
What do employers think of Employees with Side Hustles
By day I work in marketing. By night and on weekends I write for the internet. It's a side hustle that I've been doing for the past decade now, enabling me to put a little extra money in my pocket and pursue my passion.
A recent report by CareerBuilder found that 29 percent of more than 3,200 workers have a second job. The trend is more popular among Millennials, 44 percent of who hold down multiple gigs.
Most companies used to frown on moonlighting, but that shouldn't be the case. According to the study, 71 percent of the workers polled said they had no intentions of turning their side jobs into a full time career, Additionally, employees with side hustles are often more productive, have characteristics employers want, and think creatively.
Here are some other reasons why workers with side gigs excel at their jobs.
They Gain Skills Off the Clock
Building their own empire gives employees real-world, hands-on experience that they can use in their day jobs. The accountant that moonlights as a web designer can bring some of that creativity to the table of his 9 to 5er, offering creative solutions to otherwise stagnant problems.
Entrepreneurial Employees Make the Best Workers
Self-starting, innovative and proactive workers help a company to thrive. These traits are generally what employers are looking for in qualified applicants. Given that side hustlers often experience challenges of running their own business, they are problem-solvers and a real asset to any type of business in any industry.
They Won't Ask for Raises Constantly
Folks with side hustles aren't necessarily motivated by money; they're driven by passion. Despite this, their side job gives them the extra income that they need, so there is a high chance that they won't be asking for that biannual pay hike.
They Think Outside of the Box
Entrepreneurial employees are often creative thinkers and thrive on a challenge. At its core, entrepreneurship is about creating something brand new. So if your business needs a fresh take on a stale product or marketing plan, a side hustling employee may be able to enlighten you.
Though there is multiple perks of a side hustle worker, employers still must protect themselves from any risk that may pose a threat for their business.
Transparency
An employee with a side gig should feel comfortable enough at their workplace to declare that they have a side job. This omission is meant to provide transparency and that the employee has nothing to hide. Also, the worker should make it clear that they are not performing their side hustle during company hours.
Noncompetitive Side Hustles
The employer should make it crystal clear that the side gig shouldn't pose a competitive threat to their core business. This means that the employee should not be doing any work for direct or indirect competition.
Working in the evenings and on weekend mornings has definitely made me a better employee. I can better relate to my employer's struggles of running a thriving business and it makes me a more well rounded individual. The passion I pour into my writing gig energizes me, and energy in turn flows back into my day job.
The internet is filled with stories of successful side hustles. More people than ever before are starting up businesses on the side to make some much-needed extra cash.
A US-based survey recently revealed that 43% of permanently employed workers had a side hustle on the go and that 30% of the respondents needed that extra income to make ends meet.
Are you one of them?
If you said yes, you’ve probably wondered if your side hustle could become a full-time job, and if it was time to quit your 9-5 and enter the world of self-employment.
These are the 9 signs that will tell you if your side hustle has the potential to turn into a full-time gig.
1. Your Business is Getting Noticed
Small side hustles usually start with little to no interest from customers. You may do a commission for a family member or friend that generates a couple of referrals, or sell a few products on platforms like Amazon and Etsy. However, if your product proves successful, it could quickly gain attention from potential customers who approach you with projects and commission work.
One thing that customers will always notice in your work is your passion.
This is the key to a successful side hustle; you need to make money doing something you love.
A clear sign that your side hustle is becoming your main gig is that you start turning away more work than you are accepting. This boils down to your limited capacity, as you can only work on side hustle projects after hours.
If you start turning away customer after customer, it’s a good time to take the plunge and turn your passion project into a permanent career.
2. Your Hustle is Tipping Your Work-Home Balance
One of the trickiest parts to starting a side hustle is maintaining your work-home balance.
You may already hold down a full-time job, powering your side hustle on the weekends and late at night. As your side business grows, you’ll have even less time to spend on yourself and those you love. This can strain your personal life and your well-being as a whole.
This sign can be difficult to manage, but it’s also an indication that your side hustle has the potential to become your primary source of income. While it’s crucial to strike that balance and look after yourself and your responsibilities, take the incoming work as a sign that you can leave your job and still earn decent money doing what you enjoy.
3. You’re Looking for a Change
If you’re desperate for a change in your life, it’s time to stop playing it safe and start taking risks.
Reflect on the life you’re living now and the work you do. Answer honestly as to whether you prefer your side hustle work and if you’ll regret not taking the chance to grow it into a full-time business.
If you’d love to become your own boss, work from home and dictate your own working hours—and you’re willing to put in the work—it’s time to take your hustle to the next level.
4. Other Businesses Want to Buy Your Concepts
Yet another sign that you should consider upgrading your side hustle is when larger, more established businesses voice interest in buying out your concepts. This is flattering, and it helps you to see your business through other people’s eyes. It also means that your products and services have true potential and that your income is likely to continue to grow over time.
It’s tempting to sell your ideas to other companies for a lump sum. But you could stand to earn more in the long run if you’re willing to go the distance with your side hustle.
5. You Have Authority in Your Industry
Is your name often mentioned when people have specific problems that need solving with industry-specific solutions? Do people always approach you for support and advice instead of turning to other renowned people and brands in your industry?
These are clear signs that you have sway in your line of work, and that you would continue to do so if you quit your 9 to 5.
6. Your Situation Aligns with Your Hustle
These are challenging economic times. Not everyone is ready for a big career change.
Assess your finances carefully. If your side hustle is attracting plenty of attention, you’ve probably come to depend on that income to supplement your paycheck.
Quitting your 9 to 5 may cause your income to dip temporarily. You need to know exactly how long you have to turn your side hustle into a thriving business that brings in enough money to cover your expenses. You should also have a clear idea of how far you’re willing to dig into your savings.
If you already have the equipment you need and your side hustle doesn’t require capital, or expenses like stock or rent, this could be another sign that it’s ready to become your permanent gig. You won’t need to factor in huge expenses and can earn profits from the minute you scale up.
7. Your Side Hustle Brings in More Money Than Your Job
This is the most obvious sign that it’s time to quit your job.
However, you need to think about a few points before you do. Consider the other benefits your current job offers, such as health insurance and pension.
Compare the costs of taking these benefits out individually to the profit (not income!) your side hustle produces. If you can provide yourself with the same benefits and still make decent money at the end of the day, it’s time to make the move.
It’s easy to rely on referrals when you’re only working on the weekends or evenings. However, if you’re looking to build a long term business, you need to plan every aspect of your side hustle’s progress. You must ensure that it’s viable and the numbers add up.
Once you write up a business plan, you’ll see the growth potential of your hustle if you were to quit your job and focus on it full time. Additionally, you can work out just how long it will take for the business to grow into something truly impressive.
9. You’re Truly Passionate About Your Hustle
“Choose a job you love and you’ll never have to work a day in your life.”– Confucius
If you have a persistent passion and belief for your concept and you’re willing to sacrifice whatever it takes to turn your dream into a reality, follow that dream. Pursue the fulfilment you are searching for! If you don’t, you may regret it.
The Bottom Line—It’s Up To You
Turning your side hustle into a full-time job takes passion, commitment, long, hard work hours, and sacrifices along the way. However, your efforts are rewarded as you’re doing something that you truly love, working for yourself, and making a good income at the same time.
There’s no perfect time to make the change. Look for the signs that the time may be right, do your planning and research, and take the leap when you feel ready!
HOW TO MANAGE YOUR FULL-TIME JOB AND SIDE HUSTLE WITHOUT BURNING OUT
Is your side hustle draining you or becoming a chore? Use these tips to keep up your sanity and your energy while maintaining your second gig.
It’s pretty cool when you can make money on the side doing something you’re passionate about — and these days, many of us are doing just that. An incredible 45% of Americans have side hustles, according to a survey from Bankrate, which also showed that 30% of side-hustlers use the income from their side gig to pay for living expenses. But even if you’re just using your side-gig income for mad money (or better yet, savings!) keeping up with the demands of a second job can be demanding if you don’t know how to manage all of your responsibilities.
Thankfully, there are a few easy ways to juggle all your jobs without losing your cool or running on empty.
DON’T LET YOUR SIDE HUSTLE TAKE OVER YOUR LIFE
While it’s OK (and exciting!) to be “all in” when you’re first starting your side hustle, your enthusiasm in those first few months probably shouldn’t become your permanent pace. “It’s not healthy for any job to consume so much of your time, which is why scheduling and setting realistic expectations are key,” says Bankrate’s Amanda Dixon.
You should put pen to paper and decide exactly how much time you’re going to dedicate to your side gig, and prioritize what you want to tackle first. If you’re hustling in the hours after you leave your full-time job, keep in mind that it is possible to overdo it. If you find you’re struggling to squeeze in gym time, for example, you may be devoting too much time to your side gig.
“You should pick a very specific time or task and say, ‘This is my time block’,” says Maddy Osman, co-founder of Freelancers Union Spark. “Try to have a good understanding of how long certain tasks are going to take. It may help to overestimate so it doesn’t cause you to feel overwhelmed or rushed. Always plan ahead, and don’t go to sleep without knowing what you have to get done tomorrow.”
FIND A MENTOR OR A NICHE COMMUNITY
Having a side hustle is like working two jobs, and the time and effort it takes to succeed doing this is not something everyone understands. “It helps to have support and someone to talk to when you’re hitting a roadblock or a mastermind group whom you can commiserate with,” Osman says.
These days, there’s a Facebook group for just about everything, including hard-working entrepreneurs like yourself. So do a little recon and find a group that fits your niche or one that was designed for side hustlers in your same line of work. Joining a like-minded community to find your tribe will help you better manage your stress as well as lead you to helpful advice and tips.
DON’T MIX YOUR DAY JOB WITH YOUR SIDE HUSTLE
As tempting as it may be, try your best not to bring your work from your personal business to your full-time job. “It’s OK to do stuff for your side hustle on your lunch break if you need to, but you can’t be working on other projects during the hours you’re being paid to work your full-time job,” Osman says. “It’s unethical.”
If your side hustle requires you to maintain a public social media presence, it may be a good idea to be upfront about your gig with your employer. Doing so will keep things from getting awkward if your boss accidentally stumbles across details on your other company.
“Working secretly and not being open can easily blow up in your face and hurt your prospects at your full-time job,” Dixon says. Establishing boundaries and being clear with your full time employer that you won’t be conducting side hustle tasks during your day job is one way to make sure everyone is cool with your budding entrepreneurship.
CONSERVE YOUR ENERGY
When you are passionate about a side project, it can be hard to regulate just how much time you’re logging building your business. We all know that time passes differently when you’re on your laptop at home — but try to treat your side gig the same way you would your full-time job, and make points to take breaks for dinner, Netflix, and the like. When you step away from your work, you allow your mind and body to rest and rejuvenate.
BE SELECTIVE WITH YOUR SPENDING
We’ve all heard the age old phrase,“You have to spend money to make money,” but when it comes to your side hustle, this isn’t necessarily the case. Keep careful records of your side hustle expenses and make sure that what you are spending to build your business is a necessity. Taxing your personal finances to keep your side job afloat can set you back financially, so be mindful about how much you’re investing.
At the same time, “Don’t be afraid to outsource and hire help if you need it,” Osman says. “Investments like these can help your business avoid hiccups.” Sure, you know how to manage your social media channels, but do you really understand what goes into a full-scale marketing strategy? Sometimes you need to hire a specialist to ensure your side hustle business puts its best foot forward.
KNOW WHEN TO TO SAY WHEN
Sometimes your heart really does point you in the right direction. “If you feel like your passion project is becoming a problem and you’re no longer excited about it, it could be a sign you’re overwhelmed,” Osman says. When you lose your focus or your drive to maintain your side hustle, you may come to realize that the stress of juggling the extra hours just isn’t worth the rate of return — financially or emotionally.
If you’re feeling stressed, take a step back and reevaluate what you’re trying to accomplish. Take a look at how much time you’re dedicating to your side gig and be honest with yourself about how much value it’s adding to your life. Sometimes, it’s just not worth the extra cash, and this doesn’t mean you failed — on the contrary, it just means you’re in tune with your priorities, which is a wonderful thing.
11 BEST SIDE HUSTLE IDEAS TO MAKE AN EXTRA $1,000 A MONTH
What Is a Side Hustle and How Do You Make Money Through One?
A side hustle is a way to make money outside of your 9 to 5 job. It allows you to make more money that’ll give you the freedom to pursue your passions, buy things you need or want, and lower any financial worries.
Truth is, most 9 to 5 jobs don’t pay the bills. Especially if you’re just starting out in your career.
When you calculate the cost of rent, food, bills, and transportation, you might realize that you barely have anything leftover. What a bummer.
The worst part is that your financial growth is always capped. Maybe you get a bonus of a couple of hundred dollars a year with a 1 percent salary increase on your $30,000. But is that really enough to live the life you dreamed about? Maybe, but probably not.
So, you start a side hustle to make a couple extra hundred or thousand dollars a month. Something that can either help you make more money today, tomorrow or five years from now. Something that will act as your second income should you face an unexpected job loss.
Let’s dive into the best side jobs that’ll help you make more money while working from home.
How to Make Money On The Side: 10 Great Side Hustles to Pursue
#1. Start a Dropshipping Business
Dropshipping is one of the best side hustle job ideas. It allows you to sell a product directly to the customer without having to buy any inventory. Why’s that great? You don’t need to have a big startup costs budget, keeping your risk low. The manufacturer not only carries the inventory but also ships it directly to the customer for you. Your main focus should be marketing and customer service – the lifeline of the business. If you have a strong marketing background and want a side hustle that plays to your strength, this is it. It’s one of the rare side jobs that allows you to scratch a true entrepreneurial itch. You get to be the owner of your very own business.
With dropshipping, you can start a business within any of your favorite passions. Do you love stocking your kitchen? You can sell kitchen equipment on the internet. Maybe you’ve found this unique solar-powered, smartphone-cooling accessory. You can start your own one product store and implement these store ideas. If you love doing your makeup? You can sell beauty products and build an audience who follows along to your makeup tutorials. Almost any niche can be pursued with dropshipping. Plus, if you’re a creative type, you can run wild with unusual business ideas. After all, as the owner of your own business, you’ll always have final say, which makes this a great side hustle to start out.
How much money can a dropshipper make? That depends on how much effort you put into your business and marketing. You can make an extra couple thousand dollars or more.
Dropshipping Tip: Want to start your own dropshipping business? Sign up for Oberlo on Shopify. The Oberlo app allows you to choose from millions of products that you can start selling on your store today. Plus, it automates several parts of the business process. You can add products in a simple click and process orders with the same swift action. To learn more about how to build your first online store, check out our dropshipping 101 course.
#2. Start a Wholesale Business
If you like the idea of running an online business but would prefer to be a little more hands on, starting an online store using wholesale could be perfect for you. This business model means you buy products in bulk at a lower price and then sell at a higher retail price to your customers.
Because you’re hands on with your products and suppliers, you’re able to keep a close eye on the quality of your products. Unlike dropshipping, you handle the packing and shipping, which means you don’t have deal with one of the downsides of dropshipping – the long shipping times. Instead you can take advantage of getting those products into happy customer hands faster.
Much like dropshipping you’re still able to sell products related to any niche you can think of, whether it’s your passion for home decor, or your obsession with your pets. All you need to do is use a wholesale marketplace like Handshake, find the products you want to stock, and make your purchase.
Although running a business using wholesale requires having some money upfront, most wholesale marketplaces offer net terms, which provides a nice buffer. Buying products using net terms means you can purchase products and start selling them weeks or months before you need to pay for them.
Wholesale Tip: Want to start your own wholesale business? Sign up for Handshake on Shopify. The Handshake app allows you access to the wholesale marketplace where you can choose from thousands of products that you can purchase and sell in your store.
#3. Begin Freelancing
Does your 9 to 5 job pay fluctuate? If you don’t have a predictable income, you might need more money for some months and a little less others. If this sounds like you, you might choose to take up freelance gigs. These could be gigs that you create on Fiverr or the occasional freelance project on Upwork. You might create T-shirt mockups for a client one week and help someone build their social media following the next. The type of projects you work on could vary drastically. But if you love the variety and switching things up, this side hustle could be perfect for you.
How much money can you make with this side hustle job? You could make anywhere from $50 to $2,000 a month depending on the side gigs you take on and the platform you use. For example, if you’re looking to hit, say an extra $1,000 a month, freelance writing is a side hustle that can allow you to reach your second income goal.The secret to succeeding as a freelancer is to charge clients based on the value you’ll bring. Most freelance workers undercharge, which results in fast burnout with little payoff.
Freelancing Tip: The best freelance work opportunities are onWeWorkRemotely and Remote.co. Thousands of side job seekers visit these websites daily to find and apply to openings . However, if you’re just starting out, you might want to focus on building your portfolio and skillset on Fiverr, Craigslist, or Upwork first, as it’s easier to land your first few clients on those websites.
#4. Become an Affiliate Marketer
Affiliate marketing is one of those side jobs that pay well over the long-term. However, you’ll need to go through a learning curve before you can start making money with affiliate marketing. It’s not just about finding the right product to sell, but also finding the right brand to partner with. . If you chose to be an affiliate marketer for ecommerce stores, your commission will likely be a lot lower than if you were to just dropship them yourself. However, there are tech companies that will pay a hefty price tag to affiliates who bring them new customers.
How much money can this side hustle make? It depends on what product you’re selling and what affiliate network you use. For example, if you were an affiliate marketer for a tech company like Shopify, you could potentially make an extra $58 for every merchant you refer. That means you could make over $500 with just 10 referrals. Sweet!
Affiliate Marketing Tip: Ask the affiliate program or content creator for assets you can use to help you market their product. For example, there may be a lead magnet or free tool you can use to incentivize people to purchase the product. Oftentimes, a piece of content can help ease a potential customer from a cold lead into a warm one, giving you a better chance of succeeding with this side hustle.
#5. Launch a Print on Demand Store
If you like to make custom graphics and artwork in your free time, running a print on demand store could be a great side hustle for you.
Print on demand (or POD) allows you to sell your custom artwork on products like t-shirts, bags, phone cases, mugs, and more. The best part about it is that you can create and sell products under your own brand. Also, you can completely automate the logistics of the business by choosing to dropship your print on demand products. This is where you design products, add them to your store, promote them, and take orders from your customers. The orders are fulfilled by the print on demand company that prints your designs onto the products, then ships the items directly to the customer.
How much money can you make selling POD products? That depends on how much people like your designs and the effort you put into marketing your range. With a bit of work, it’s possible to make an extra couple thousand dollars each month. If you're ready to jump in, check out this guide on how to start an online t-shirt business.
Print on Demand tip: Try to sell a profitable print on demand item like retail-quality custom tees. People are often willing to pay higher for retail quality shirts featuring their favorite designs. Find out the subjects and themes that your audience is interested in and then make custom designs based on those trends. Then find a t-shirt printing company that will print the designs onto retail-quality shirts. You could charge between $40-$150 a piece for these shirts (standard graphic tees sell for $20-$25 a piece, so the margin is pretty good).
Want to start your own Print On Demand business? Sign up for a free trial of Shopify and build your dream store. Today’s the day.
Blogging is one of the best side hustle jobs to do from home, or anywhere else in the world. It allows you to build a personal brand while owning your own asset. You can even write about your passions. Starting a blog in aniche that you understand allows you to reach an audience who shares the exact same interest as you. Yoga, business, beauty, and cars are some popular niches for running a part-time blog. You can make money blogging in a few ways: adding affiliate links to your posts or linking to the online store where you sell dropshipping products.
How much money can you make trying a side hustle like this? In the beginning, you’ll make nothing. But some bloggers who stick it out past the first few years have made enough money to quit their job and do it full time.
Blogging Tip: If you’re passionate about blogging, create an online store that you can monetize and add a blog onto it. This allows you to start monetizing your asset before you’ve built your audience. Plus, the combination of content and commerce is a powerful one. As your blog grows, you can use retargeting ads to monetize your blog traffic to land even more sales. If you pump out regular, quality content, you’ll quite possibly have a few home-run posts that bring you a ton of traffic that’ll be easier to monetize than if you were hoping for a few direct sales.
#7. Sell Information Products
If you’re looking for good side jobs to make money, selling information products might be the perfect option for you. This side hustle requires some research, invested time, and marketing skills for you to flourish. Are there topics that are really popular right now that you know a lot about? Did you find a popular topic that there isn’t enough information about? Monetize these opportunities by creating content around it. You can publish books on Amazon or sell courses to start earning.
How much money can you make selling information products? It depends on the niche, your marketing execution, and a variety of other factors. But a side hustle like this can result in a few thousand dollars each month. The key is to create several different pieces of content (ebooks, courses, etc.) that keep generating recurring income for you
Selling Information Products Tip: With this side hustle, focus on niches where people have a huge problem they need to solve. If you’re in the fitness niche, you can create a fitness workout course or a diet plan with a recipes ebook. If people are desperately trying to solve a burning problem, there’s an opportunity to provide value by helping them solve that problem. The content you create can guide them towards a solution. Best part: You could make money while helping people.
#8. Become an Instagram Influencer
Growing up, most people dream of being famous. But the truth is, not everyone can sing or act. Fortunately, you can still build a personal brand around yourself based on what you can do. Maybe you have a really cool fashion sense or can bake an awesome cake. On Instagram, anyone can start a side hustle by becoming an influencer. If you don’t like the spotlight, that’s cool. You can build an Instagram following around your dog or your photography. You can monetize your Instagram account in a couple of ways: sponsored posts, Instagram takeovers, or selling a product on your website.
Is being an influencer a good side hustle? Well, the average influencer charges between $200 to $400 a post. This can vary based on your audience size, so feel free to check out influencer rates.
Instagram Influencer Tip: Be consistent in the type of content you post, how often you post, and when you post. You’ll gain new followers if people know what they can regularly expect from your page. You won’t be able to monetize right away, so invest your time into growing your followers by posting several times a day, every day.
#9. Become a Virtual Assistant
Top side hustles have one big thing in common: There’s a high demand for them. A virtual assistant is an assistant who works in a remote location, as opposed to a company’s office. They can help with tasks such as administration, social media, bookkeeping, and more. There’s been a growing demand for virtual assistants from business owners who need help on various projects. As a virtual assistant, you can specialize in countless areas. In the past, I’ve hired virtual assistants for social media and customer service. And there are countless other businesses around the world that rely on virtual assistants to grow and maintain their brands.
How much money can you make as a virtual assistant? Most virtual assistants trade their time for money, so you might get capped based on the number of hours of work you can do each week. You can choose to set a total monthly earning or get paid by the hour. Some make minimum wage while others might make $35 an hour depending on their skills and experience.
Becoming a Virtual Assistant Tip: When starting this side hustle job, you can find clients on popular websites like Upwork. However, you could start to see better results when you branch out on your own as an independent contractor. Starting up might be a bit harder, as you need to find clients, but you could earn more money this way. You can join popular Facebook groups for businesses or online retailers to offer your services.
#10. Sell Your Photography
If you have got a camera and some basic Photoshop skills, photography can become your side hustle. If you like taking pictures of your city, you can sell your photography to your local publications such as a city newspaper or blog. Sites like Foap allow you to sell your pictures on its platform, and you can earn money with every photo you sell. If you’d rather not make money with your pictures, you can add your photography to products like canvases, T-shirts, and phone cases to make even more money. And if that’s not enough, you can even seek clients to venture into wedding photography, pet photography, or product photography.
How much money can you make as a photographer? If you sell your pictures online, you might make an extra couple hundred or thousand dollars a month. If you venture into wedding photography, you could make a couple thousand dollars or more per event. Good second jobs in this niche include working as a weekend photographer or running workshops in your spare time.
Photography Tip: If you plan on selling your photography on a stock photo site, it’s a numbers game. The more pictures you take and upload, the better chance you are to be found. You’ll need to make sure you use the right tags so that people can easily find your photos. The more pictures you take, the faster you’ll develop your photography skills over time. So, it’s an all-around win.
#11. Get a Part-Time Job
If you’d rather trade time for money, you might choose to get a part-time job. Side job ideas to make money include dog walker, babysitter, restaurant server, receptionist, administrative assistant, or barista. You can also find part-time jobs online within your industry. Maybe you’re a full-time marketer who takes on a part-time social media gig. The only downside to a part-time job is that you need to invest your time for money..
How much money can you make with your part-time job? Most part-time jobs float around the minimum-wage mark. However, you can find a few higher-paying side hustles if you dig around a bit.
Part-Time Job Tip: You can browse job sites to find side jobs you can do on evenings and weekends. Remember: After you work a full day, you’ll likely feel tired and exhausted, so pick a part-time job with a flexible schedule. If you have to work a four-hour shift Monday through Friday after an eight hour day, you could eventually burn out.
How to Start a Side Hustle
So, you have decided that a side hustle from home is the best way for you to make money online, but you don’t know where to start. Look no further, we have a list of steps to follow for you to start a side hustle today!
1. Make a list of what you’re interested in.
You need to love what you are doing as a side hustle for it to be successful for you. This job will be done on your own time and outside office hours if you have a day job, so it will take a lot of energy and motivation to make it stick. Only something that you are passionate about will drive you this much. Brainstorm side hustle ideas around your interests and skills to discover the best ventures to start or see if you can turn a hobby into a business.
2. Decide early if you will invest money.
Side hustles shouldn’t cost too much money, but they may require some investment upfront for things like hosting, branding, and tools. You may decide that you want to do social media marketing to get your first sale. Whatever your growth and expansion plan is for your side hustle, you need to be aware of your spend before it happens. Plan your spending accordingly, and measure your success to know whether you should continue.
3. Make sure there are no conflicts of interest.
If you have a day job or have connections that could lead to a conflict of interest with your side hustle, then it is not a good idea to continue with it. Sometimes, the best advice is to try something else or to shelf your idea for another time so that you don’t end up doing something you regret. Starting a side hustle with a conflict of interest could lead to costly lessons learned.
4. Schedule time for your side hustle.
A side hustle takes time out of your schedule daily, so ensure everything is going right. It is not possible to set up your website, schedule your content, and forget about everything until next month. Set aside time in your calendar regularly for your side hustle, and outline actionable goals for this time to ensure what you are doing is valuable. If you have a day job, aim to give three to four evenings a week and perhaps some hours on the weekend to your side hustle, depending on what it is.
5. Don’t forget about your day job.
If you are setting up a side hustle while also having a day job, remember to put 100 percent of your energy into your day job when you are there. A side hustle will give you some money, but you rely on a check from your day job that you need to pay the bills. Don’t try to juggle your day job and side hustle within your 9 to 5 hours, as this is a recipe for disaster.
What Side Hustle Can I Start With Little Money?
Dropshipping, becoming a freelancer, affiliate marketing, selling photography, and print-on-demand are all side hustles you can start with little money.
Conclusion
Your side hustle can help you make money online and earn some extra cash each month. But it can also help you develop new skills, build your personal brand or portfolio, and achieve more freedom. So, have fun with it! Take a risk by starting a business or pursue a new hobby you’ve always been curious about. A side hustle is your best opportunity to live life on your own terms. And with some more money in your pocket, there’s nothing stopping you from making your dreams come true.
What Are Good Side Hustles?
Here are 11 good side hustles to make extra money each month:
Start a dropshipping business
Start a wholesale business
Work as a freelancer
Become an affiliate marketer
Launch a print on demand store
Start a blog
Sell information products
Become an Instagram influencer
Offer virtual assistant services
Sell your photography
Get a part-time job
Which side hustle appeals to you the most? Did we miss a great side job that pays well? Let us know in the comments below.
1 in 3 Americans Have a Side Hustle. Here Are the Benefits to Having One
Extra income is one benefit that can come with working a side hustle. Here are some other great benefits.
Side hustles are becoming more common. Many people are going to a regular job during the day and then working a part-time job, gig, or other opportunity that brings in additional income. Some people choose to do freelance work or start their own business, while others work a part-time job.
The nice thing about working a side hustle is it allows you to bring in more money. If your regular job doesn't offer the chance to work overtime hours or pick up extra projects, working a side hustle may make sense.
According to Zapier, one in three Americans works a side hustle. That number could rise significantly this year as more people explore new gigs and opportunities. The survey also found that 24% of Americans plan to start a side hustle this year. These stats show the popularity of working extra gigs and exploring new work opportunities while working a full-time job.
Why is this kind of lifestyle so popular? It's likely because of the benefits that side hustles offer.
Increase income
Unless you work a job in sales or have a position where you get regular yearly raises, it may be difficult or impossible to increase your income. Many employers pay a set salary and don't offer the opportunity for money growth.
If you're trying to save for a larger purchase or your living expenses have gone up, it can be hard to continue on the same salary that you've always had.
Luckily, a side hustle can give you the chance to bring in more money. If you were to work a side hustle that provided an additional $200 per week, that would result in $10,400 of extra income each year.
Pay down debt faster
Some people choose to work a side hustle to pay down debt quickly. Whether you're sick of staring at piles of bills or credit card debt, there may be a solution.
Working a side hustle can help you increase your income. This can, in turn, give you more of an opportunity to pay down your debt faster. Paying your debt off sooner can result in less interest paid over time and can help you improve your overall financial situation.
Save more
Having a side hustle also provides another benefit: You can put more money into a savings account. This can help you prepare for a significant future expense, like a down payment for a home or a new baby. Another option is to work on increasing your emergency fund so you're prepared for the unexpected.
If you worked a side hustle that brought in an extra $1,200 a month and you made a plan to put 100% of it toward a mortgage down payment, you'd have $14,400 after one year. Make sure to put that extra money in a savings account so it earns interest
A chance to explore other opportunities
Learning new skills is never a bad thing! Working a side hustle gives you the chance to explore other opportunities. When you explore new interests, you may even open up new doors in your career and personal life.
If you've been thinking of working a side hustle, you're not alone. It's a popular way to bring in more money, and it can have many advantages. You may find that a side hustle allows you to reach your personal finance goals sooner. Plus, having more financial freedom can reduce stress and improve satisfaction.
