“Don’t start a side hustle”, is not something I ever thought I’d find myself saying as a personal finance blogger. But here we are!
Over the last few weeks, I’ve been writing about how you can start freelancing on Upwork – and this got me thinking. There is so much more to freelancing than creating a side income! I wanted to share this (obvious) mini-revelation with the world.
By now, we’ve all caught on to how toxic the “side hustle” mentality can be. In this post, I will share why you shouldn’t start a side hustle and should focus on starting an income stream instead.
Why shouldn’t you start a side hustle?
There are so many reasons why “side hustling” is less lucrative than you originally thought. Sometimes hustle culture is downright counterproductive!
So let’s get right into it! Here are some of the reasons why you don’t want to start a “side hustle” and instead should focus on building an income stream:
- You create the expectation of more money
- You treat it more seriously
- You can grow it into a full-time income
- It prepares you to run a business
1. You create the expectation of more money
In the world of personal finance, there is a catchphrase, “Create the life you wish to live and then save for it.” This is action-oriented and pushes you to start thinking of ways to live the life you want.
To actualize this saying, you should pursue side hustles with the desire to build something more for yourself. Don’t wait for an opportunity, create it!
A side hustle might start out as “only” a few extra hundred a month. This is less than what most people would consider a “real” income stream. That being said, by treating it like an income stream for day one you will look for ways to make it into something more substantial.
For example, many side hustles are one-off gigs. How can you turn this into something monthly? Or maybe you have a side hustle that only gives you a few hours a month. How can you turn this into a weekly income? There is no reason you should settle for a side hustle when you can grow an income stream!
2. You treat it more seriously
Most people are bad at adhering to deadlines. We’ve all stayed up late finishing a project or working on something last minute. This kind of behavior makes it hard to make a lot of money.
For example, as a freelance writer, you might wait until the last minute to submit an article by a deadline. While this may not impact your ability to write a few articles a month, you likely will not be able to write 10 or more with this approach!
If you treat your project as a side hustle… then don’t be surprised when you find yourself pushing things to the side! Growing an income stream, on the other hand, requires a particular mindset.
You need to take earning money seriously to be able to grow your monthly earnings. So instead of considering it to be yet another “side project”, consider your income stream to be just as important as your main income.
3. You can grow it into a full-time income
Having a full-time income vision is one of the most incredible things that sets apart an income stream from a side hustle.
For instance, once you build a small income stream, the natural next step is to figure out how to open the floodgates! This of course means figuring out to expand into a fully fledged business. There’s plenty to this, so don’t be afraid to ask for help if needed. For example, you can consult with Golly Digital to help determine exactly what your company’s brand and visual aesthetic should be – a vital factor to consider when getting started. Not only that, but you might also start thinking about multiple streams of income.
In my case, I wanted to transition from freelancing to entrepreneurship. I knew that the habits I had as a freelancer would not be enough to become an entrepreneur. So not only did I start treading my “side hustles” more seriously, but I also had to take myself more seriously as a personal brand!
I even reinvested my earnings into courses and books for myself. The return on this investment is unquantifiable and impacts various areas of my life to this day!
4. It prepares you to run a business
You will learn to focus more on building repeatable systems. That is because an income stream is naturally a bit larger than a side hustle and you will need to treat it accordingly.
An income stream is a much more sustainable income model that requires you to work more strategically. For example, as my first client’s contract expanded, I knew that it wouldn’t make sense for me to fulfill every project. I would run out of time! Instead, I decided to take on some work in an advisory capacity.
This ended up being a massive win-win situation! I was able to devote more of my energy and time to scale my own business by only taking projects at a higher hourly rate. My clients still had access to my expertise but were able to cut their costs by having the day-to-day work completed by someone more affordable. Basically, I gave myself a promotion!
I learned that it is one thing to start a business at 24 years but another thing to continue running and building it at 25.
Don’t start a side hustle; start an income stream…s!
Hopefully, I’ve managed to convince you that it is better to consider your side hustle to be an income stream. Now I want to share some ways that you can make multiple income streams.
They say that the average millionaire has 7 different income streams. Not all income streams are created equal. Some take more work than others to get started, but can pay long term dividends. Others are more transactional in nature. You get paid and you are done!
Here are 6 different types of income streams you might consider:
- Earned Income
- Interest Income
- Dividend Income
- Rental Income
- Capital Gains Income
- Royalty Income
1. Earned income
This is the most popular type of income stream. For instance, it is the income you get in exchange for your effort and time, like the salary from your job.
A good example is freelancing – jobs that you can do remotely. Nowadays, there are thousands of freelance jobs available on the web that you can start doing as income streams.
2. Interest income
This is the money you get from lending money and receiving a return on your investment (ie. bonds). It can also be the interest you earn from money in a savings account or a certificate of deposit (CD).
All of these can be a great income stream that comes with relatively minimal risk. Be sure to do your own research and invest within your risk tolerance!
3. Dividend income
Dividends are income you earn by buying shares from a publicly listed company. For instance, you become a part-owner or shareholder entitled to dividend payments.
Dividends are typically paid out quarterly, though this varies from company to company. I love dividend income. Don’t start a side hustle, start earning dividends!
4. Rental income
As the name suggests, it is a form of an income stream in that you get money by renting your property or assets. It is one of the most dependable income streams!
That being said, you must have a property to have a rental income stream. This requires a substantial initial investment. You can even create an LLC with friends and family to purchase properties together!
Lately, people have been also finding ways to leverage AirBnB’s as a rental income without owning property. This can be quite risky, so I wouldn’t necessarily recommend this particular type of income!
5. Capital gains income
This is money you get from buying and selling appreciating but valuable assets or properties. It can be anything from antiques, stamps, stocks, vehicles, properties, etc., as long as they generate more cash from buying and selling.
However, since each country has different rules, you need to consult an experienced accountant beforehand about capital gains. Buying and selling some assets can qualify for capital gains taxes, which might wipe out all of the profit.
6. Royalty income
Royalties are the income you earn from allowing the use of your idea, concept, or product.
Musicians are the best example. Usually, musicians are signed to a particular record company or label. The label pays to record the music, markets them, produces the records, and sells them.
The musicians get royalty payments every time their music is played to the public, and their album is sold.
Royalty income examples:
- Music
- Books
- Patents
- Franchise fees
Final thoughts on starting an income stream instead of a side hustle
Starting an income stream that best works for you instead of a side hustle will put you in a much better position to fulfill all your financial endeavors.
I hope you now have reasons to start an income stream instead of a side hustle. So, pick one of the income streams discussed in this article, be good at them, and see how you will easily achieve financial freedom.
If you have any comments, suggestions, or unanswered questions about starting an income stream over a side hustle, let me know via the comments section below!
What income stream are you looking to start? How many income streams do you already have? I’d love to hear from you in the comments section!
Kathryn Rucker is a sales consultant and content writer. With 7+ years of sales experience, she is passionate about helping businesses and individuals grow their sales pipelines by improving their online presence.
She has been traveling full-time since 2018 thanks to the location and financial independence she has gained from her business, Kat Rucker Consulting Group. You can connect with her on LinkedIn.
