Side Hustles For Dummies. Alan R. Simon

from what they do (bartending in Cindy’s case, and personal shopping for Tasha). Breanna and Sarah will make money from what they sell. Miguel and Mark will make money from what they know and communicate. Max’s side-hustle goal is to monetize himself. Hu and Min, however, plan to make side-hustle money from what they own.

      Hu and Min have been married for 20 years. Ten years ago, Min received a ginormous financial windfall when the software company where she worked at the time went public, and her stock options were suddenly worth a whole lot of money. Hu and Min talked it over, and decided to buy a vacation house in northern Arizona after she cashed out her stock windfall. Fortunately, both of their jobs allowed them to work remotely, so every summer they would pack up their house in Phoenix and escape the 110-degree temperatures for a few months.

      Five years ago, Hu received a job offer based out of New York City that he couldn’t turn down, so the family moved across the country. They kept the house in northern Arizona, however; they just don’t spend summers there anymore. Instead, they decided to turn that vacation house into rental property. Initially, they worked through a northern Arizona real-estate agent who would list their house for rent for the entire summer. Eventually, though, they decided to list the house on Airbnb for rentals lasting anywhere from one day to an entire month — and year-round now, because their vacation home was close to one of northern Arizona’s ski areas for winter rentals and near some spectacular hiking trails for spring and summer rentals.

      The part-time job side hustle

In Chapter 1, I introduce you to Jack, a software developer in Scottsdale, Arizona, who decides to do a little bit of side hustling alongside his full-time job. Unlike Brian and Keith, Jack doesn’t want to actually start a small side-hustle business. Jack’s side hustle is teaching programming classes two afternoons each week at the nearby community college campus.

      WHAT’S THE DIFFERENCE BETWEEN AN ASSET AND AN INVESTMENT?

      Is real estate an investment or a side hustle? Answer: Either or both!

      What about cryptocurrency: An investment or a side hustle? Another answer: Once again, either or both!

      Sometimes you’ll find a very fine line between investments and side hustles. Take real estate, for example. If you invest in a property that you plan to rent out, either for someone to live there or for a constantly revolving parade of guests courtesy of Airbnb or Vrbo, then:

       You are definitely investing in real estate.

       You are also doing a side hustle that will involve time and effort but will also earn you money.

      Suppose, though, that you plop some of your investment money into a real-estate investment trust (REIT; basically, using your money and other investors’ money to buy real-estate assets) that will become part of your portfolio. You certainly want to keep an eye on the value of that REIT investment, but — and here’s the important part — unlike a house or condo that you buy and then rent out, an investment in a REIT is mostly “passive.” Until you decide to cash in that REIT, it’s just another asset in your portfolio rather than an investment that you actively do something with.

      Or suppose that you buy a second vacation home up in the mountains or near a beach, but you have enough money that you don’t need to rent out that vacation home or otherwise try to monetize that real-estate asset while you own it. You may sell the vacation home at some point down the road, or maybe you’ll keep it in the family and pass it down to your children or grandchildren. But along the way, only you, your family, and your friends will visit and stay there. In this case, a vacation home is definitely a real-estate investment, but it doesn’t really fill the bill as a side hustle.

      What about cryptocurrency? Suppose you really like the investment potential of Bitcoin, Ethereum, and other cryptocurrencies, and you decide to allocate around 5 percent of your investment portfolio to crypto. Investment? Sure! Side hustle? Nope!

      Now suppose you also start recording and uploading videos in which you offer your thoughts about the cryptocurrency market, the underlying blockchain technology, the world of decentralized finance (DEFI) that includes blockchain technology and cryptocurrencies, and similar topics. Initially you intend to make money from ads placed with your videos; if your videos get popular enough, you may start a small cryptocurrency advisory service on the side.

      Now ask the questions again in light of your expanded approach to cryptocurrency.

      Investment? Still a resounding “yes.” Side hustle? Well, because of your videos and ideas for making money above and beyond trading Bitcoin and other cryptocurrencies, the answer is also “yes.”

Wait a minute: Doesn’t it sound more like Jack is taking on a part-time job than starting a side hustle? Well, just like real estate (see the nearby sidebar), there’s a big gray area when it comes to part-time jobs and side hustles.

      In Jack’s case, you could argue that his teaching gig fits the description of a side hustle:

       He’ll make some money from his efforts.

       He needs to balance the time he spends on his teaching gig with the time requirements for his full-time job, being careful to avoid any conflicts.

       He can adjust his teaching load to more or fewer classes as his time and energy level permit (with enough advance notice to the community college, of course).

      

The one main difference between the software development–oriented side hustles that Brian and Keith are doing and Jack’s teaching is that Jack probably doesn’t need to set up any sort of “side-hustle company” for his college teaching. Most likely, the college will pay him as a part-time employee on a W-2 basis; in the United States, that means Jack is a part-time employee rather than a 1099 independent contractor. (See Chapter 7 for all the details about how to form the legal structure for your side hustle.)

      But other than this W2-versus-1099 distinction, Jack’s teaching features all the characteristics of a side hustle.

      Drilling into your side-hustle topical area

Remember Sandy, who rediscovered his childhood sports memorabilia? He noticed that baseball cards, football, and basketball cards, along with all sorts of sports memorabilia, suddenly became wildly popular at the beginning of the COVID-19 pandemic. Many people were working from home, and many others unfortunately lost their jobs (but fortunately, millions of them started side hustles!). Overall, people were at home much more than before and had a lot of time on their hands, as well as surprisingly flexible work and personal schedules. For whatever reason, lots of people either discovered sports cards and collectibles for the first time or, as with Sandy, rediscovered their long-forgotten collections.

      So, it’s settled: Sandy has selected his topical area and is going to start a side hustle related to baseball cards primarily, but also including other cards from football and other sports along with other types of sports collectibles.

      But exactly what kind of side hustle is this?

      Sandy could, under the general umbrella of “sports cards and collectibles side hustle,” focus on any of the following:

       Just baseball cards

       Baseball, football, basketball, and soccer cards — but basically only sports cards

       “Game-used” memorabilia, such as uniforms and hats, or balls and baseball bats

       Autographs

       Old sports books, almanacs, yearbooks, scorecards, and similar items