The rapid and continuous development of the internet and its associated technologies have opened up a wide range of additional revenue streams to everyone. These changes have also improved access to information and broken down the barriers to many forms of passive income generation.
For instance, anyone can now open an online account through the right channels and start investing in stocks or real estate. Beyond the traditional revenue streams, however, people can also become more actively involved in the gig economy. As of 2018, the number of people finding freelance work online had increased to 64% from 42% in 2014.
Finding a side hustle is a great way to increase your financial stability. It can also provide you with a creative outlet to pursue your passion, as opposed to the stress and monotony you can encounter as part of your day job. But can your gig eventually take over and become your full-time occupation?
Recognizing the signs
When you first start taking on freelance projects, the work can come in slowly or fitfully. After all, the information age has also made the industry far more competitive. But as you gain experience, you grow in skill and confidence. Clients who like your work might seek to involve you in further projects. Your name might be brought up in conversations with others; eventually, you land referrals.
If you notice these things happening, it’s a strong sign of demand for your particular skills and services. If you do the numbers, you might find that there are ways to push further. Instead of sending your designs to a third-party printer, you could invest in a heat transfer machine from Insta Graphic Systems and make your own T-shirts with bigger profit margins.
Before you commit to taking on more freelance projects or investing in more equipment or training, you might want to adjust your rates. After all, you’re improving your capabilities as a contractor. You also have to adjust for inflation, as the economy isn’t static. Ultimately, you’ll need to make sure that your upgraded side hustle is still bringing in sufficient ROI. And that could change the price point, which also affects your clientele and the projects you could land.
Finding a balance that works
However, a side hustle isn’t all about the effort you can throw into your work. You also have to manage the amount of time you can commit. And the fact that we all have only 24 hours in a day, some of which you’ll need for rest and recovery, will eventually put a cap on your efforts.
One way or another, you’ll realize that you can only fill in so many hours of each day with your best efforts. As you run a side hustle to go with your day job, they might come into increasing conflict with each other. But before deciding on how to balance the two, consider the advice of Black Swan author Nassim Nicholas Taleb: avoid the mediocre middle.
Taleb advocates a ‘barbell strategy’ in terms of risk. On the low-risk end, you’ll want a day job that offers a secure baseline income with a regular schedule, placing no further demands on your time. This lets you devote a predictable amount of time each day towards your high-risk, high-reward side hustle.
Thus framed, rather than choosing between your day job and your freelance work, the choice becomes about finding a pairing that works. If your day job is neither secure nor predictable, it can be time to look for one that fits the criteria and makes for a good match with your gig.
Avoiding lifestyle bias
One final consideration when you seek to level up your side hustle is that of lifestyle. Be honest with yourself: are you tempted to become a full-time freelancer because of lifestyle bias?
Freelancers generally enjoy better work-life balance. Because they’re flexible and often get to choose projects, they are perceived as having more control over their lives. You get to be your own boss and follow your passion.
But not everyone is ready for that sort of lifestyle. It’s a great power that comes with a corresponding responsibility. You have to be following a positive passion, and not be driven by external rewards. And one of the essential pillars of that lifestyle is competence. If you focus solely on the enviable lifestyle that comes with it, you’ll be putting the cart before the horse.
Before you commit to going all-in on your gig, make sure you have the necessary skillset and a mindset that embraces growing and learning. That way, you can have one eye on the potential upside, while ensuring that you don’t take it easy, lose your competitive edge, or stop growing your career capital.
