Income Stream #8483: Consulting people on stuff you know

I’ve got to be honest with you Reader.

I talk a lot about taking breaks from work. I’ve gone years without a W-2-kind-of- job and it’s given me all kinds of opportunities in my life. Time with my wife and kids, the chance to live in Spain, and it’s a lot easier to stay in the club until 5am (they closed at 8am in Spain … but f* that) when you don’t have “work” in the morning.

But I’ve got to tell you something. I’m kind of a fraud.

Truth is … I’m always working.

I was born in America, but my blood is Antiguan. Antigua is a small Caribbean island, like Jamaica or Trinidad, just better.

If you are an 80’s baby like me (and Black) you remember “In Living Color”, a sketch comedy show that dominated prime television. There was a recurring skit called “Hey Mon”, which chronicled a hard-working Jamaican family where everyone had no less than 5 jobs. While the sketch may have been problematic in its depiction of Jamaicans, I’d be lying if I said I couldn’t relate.

I’ve had a side hustle for decades.

In high school I sold candy, burned CDs, and worked weekends.

In college, even though I was on a full ride, I worked during the summer, school, and on breaks. I had Internships, provided computer support, and called donors.

After college, I got a “real job” and then started a blog for extra income.

After all that, I bought a house, rented out a room, made it a rental property, then another, and another … You get the point.

Presently, I run my rentals, write this newsletter, coach people interviewing for product management positions, and I secured a small software development contract. In January, I’ll be starting my professorship at the University of Colorado.

Why Side Hustles?

Side hustles are one of the best ways to build wealth, gain new skills, and unlock a break from “work”.

When you earn side hustle money, it’s all extra. If you pretend it doesn’t exist and save it all, you’ll suddenly double or triple your savings rate, increasing compound interest, and increasing your wealth. And for me, I love the work I do in my side hustles. I find a sense of personal fulfillment from them and a level of flexibility I’ve never gotten from my 9-5.

The ultimate benefit is when I reach a point where I’m fed up with my 9-5 and need a break, I take one. My side hustles (minus saving) allow me to have enough income to keep the lights on no matter what. And I can turn up the side hustles to earn more. It’s not enough to replace my “well compensated” product manager salary in tech, but 2 years off to be with a new child is priceless.

Keys to Finding a Successful Side Hustle

Now, let’s discuss the pragmatic approach to obtaining and maintaining your side hustle(s) and adding a new stream of income.

Define your financial goals

Side hustles can pay really well (e.g. side work as an attorney; contract software development work; brand consulting), be easy and require no skills (e.g. Uber eats), or scratch a personal passion while bringing in money (e.g. podcast producer, photographer).

Understanding how important this extra income is to your goals will help guide your decision. If you want to build wealth faster, focus on something you love that works with your schedule and interests. But if you’re trying to save for a Porsche, pimp your time out to the highest bidder.

Start with what you know, then what you love

Typically, the easiest and most profitable side hustle is to do what you do professionally, just for someone else. This makes sense because you probably work in the field of work you find the most profitable, and you have a lot of skill and experience in that space. If you make $X at work, making half of that on the side means you gave yourself a 50% raise.

It’s tempting to immediately start with your passion but oftentimes it doesn't pay well or at all. This comes up all the time with people starting blogs, newsletters, social media accounts, etc. It’s work with a long payoff (spoken from experience). Focusing on a contract or temporary roles for things you already know is the pragmatic way to get paid. Also, consider teaching. Next year will be my first year as an adjunct professor, but I know others who’ve done it for years while working full-time.

There’s always Uber

Us professionals are quick to dismiss UberEats, DoorDash, or other services where you can make money quickly and don’t need people in your car. I’ve met people earning $90K+ who drive for Uber. Some people I know use the extra cash to save and move abroad. Don’t sleep on this quick and easy money. Ditto for cutting hair … cause we all know someone hustling this way.

Start an LLC … for the taxes, and the education

One hidden benefit of a side hustle is that it makes you an entrepreneur. And whether you register a company with your state, or just pick a name and open a business bank account, you have now entered the world of legitimate business expenses.

A huge benefit of my side hustles are the tax benefits. Owning rental property near my parents allowed me to write off flights home. Running a blog allowed me to deduct my computer, home internet, and related gadgets.

More importantly, setting up an LLC, bookkeeping, taxes, and hiring has taught me a lot. I’ve been in countless situations where some lessons learned in running my own company helped me crush a job interview, negotiate startup equity, or helped me run my life.

Save and Invest Your Gains, don’t just ball with the profits

You can use your new income stream to ball a little harder but that’s a waste. The real benefit of the additional income is to save, invest, and buy more income-generating assets. Real estate will always be the ultimate side hustle to me, but my other side hustles made it a reality.

Mentally it’s easier to think of this money as separate since you didn’t have it before. Use that to your advantage and invest and grow your wealth with it. An extra $100 to $1,000 a month is a game changer, yet reachable by us all.

Side hustles are an amazing way to design your lifestyle. They give you additional income, the ability to augment the job you hate with something you love, and can help you unlock financial freedom faster and pragmatically.

- Damien Peters

P.S. As part of one of my side hustles, I was asked to record a Facebook product management mock interview. Not only will it help other up and coming product people, but I was paid to record it and legitimately felt good sharing something I’m passionate about. Check it out and give it all the likes on youtube.