Understanding the Nature of Side Hustles

Side hustles can be compared to poker hands; knowing when to persist and when to let go is essential. Clinging to an unproductive side hustle can be as futile as holding onto a weak poker hand. While a quick evaluation can reveal the potential of a poker hand, assessing a side hustle requires a more thoughtful approach.

In my 14 years as a freelancer, I've navigated many side hustles and developed a four-question checklist to help determine if a side hustle is worth maintaining. Affirmative answers to all questions indicate a valuable opportunity, while more than two negative responses suggest that it may be time to move on. Here are the four critical questions to consider:

1. Does This Side Hustle Meet a Specific Financial Need?

Many of us can recall childhood days spent doing chores to save up for desired items, such as toys. Whether it was babysitting, dog walking, or other tasks, we exchanged our time for money to fulfill a need. In adulthood, side hustles serve a similar purpose.

Common examples include:

• Consulting
• Ridesharing (e.g., Uber)
• Dropshipping
• Freelance writing

Even if we don't particularly enjoy these activities, they may be necessary to address pressing financial obligations. I once stuck with a financially rewarding side hustle that I found unenjoyable, primarily to support my family during difficult times. It's crucial to allow yourself some grace when forced to engage in an undesirable side hustle due to urgent financial needs. However, once those pressures are alleviated, be ready to reassess your commitment.

The first video explores various side hustles, helping you identify opportunities to enhance your income while potentially quitting your day job.

2. Can I Find a Way to Scale Up This Side Hustle?

Scaling refers to increasing your income significantly—by two, three, or even ten times. While a modest increase of 20-50% might be achievable through improved efficiency, it's essential to envision a clear path to scaling.

For instance, as a new Uber driver, you might learn to optimize your earnings through surge pricing. However, once you've maximized your efficiency, further income growth may require additional hours, marking it as a non-scalable side hustle. In contrast, writing e-books can be highly scalable, allowing you to sell the same effort to a larger audience without additional time investment.

3. Am I Gaining Valuable Skills from This Side Hustle?

Not every side hustle needs to deliver immediate financial benefits. Some provide valuable learning experiences that can enhance your overall freelance capabilities. For instance, I once took on a lower-paying job involving SPSS data analysis to gain expertise in an industry-standard tool, ultimately leading to more lucrative opportunities.

4. Do I Enjoy Engaging in This Side Hustle?

The time spent on side hustles is time taken away from leisure activities, such as family, dating, or hobbies. If you lack urgent financial needs or find limited enjoyment in your side hustle, it might be worth reconsidering your involvement. Pursuing something you enjoy while potentially earning extra income is a worthwhile endeavor.

Assessing My Own Side Hustles

Now that we've covered the checklist, let's evaluate some of my past side hustles based on these criteria. One such endeavor was academic ghostwriting, which met a specific financial need but lacked scalability. While I initially learned a great deal, my interest waned over time, leading to my decision to stop once my financial pressures lifted.

For my other side hustles, I relied on personal and commercial due diligence. While personal due diligence was somewhat scalable, I found it less rewarding overall. Conversely, commercial due diligence offered transferable skills and enjoyable work, prompting me to seek more opportunities in that area.

The second video discusses the best side hustles that can help you transition away from your traditional job, providing insights into lucrative opportunities.

Delving Deeper: Why Some Side Hustles Are Misleading

The four-question checklist serves as a foundation for evaluating side hustles, but a deeper analysis is often necessary. For example, I once engaged in arbitrage betting, which initially seemed promising. However, as competition increased and the margins narrowed, it became evident that this side hustle was no longer viable.

Despite my initial enthusiasm and the potential for scaling, the evolving landscape and my unwillingness to invest further meant that I had to walk away.

Final Thoughts

Utilizing a straightforward four-point framework simplifies the process of determining whether a side hustle holds promise for growth or deserves to be abandoned. The essential questions to ponder are:

1. Does this side hustle meet a specific financial need?
2. Can I visualize a pathway to scaling this side hustle?
3. Am I acquiring valuable knowledge through this side hustle?
4. Do I genuinely enjoy this side hustle?

While the first question may hold the most weight, the remaining inquiries are vital for assessing future potential. Remember, some side hustles may seem appealing at first but become less desirable with deeper examination. Seek out the side hustles that resonate positively with you and align with your goals.