Today’s post comes from Matt over at Distilled Dollar. I recently wrote a guest post over there, discussing the importance of increasing your savings rate, and how the best way to do so is by starting a side hustle. This article follows up on that idea and highlights the 3 key areas which you must focus on in order to grow a successful side hustle.
Without further ado, below is the awesome article he has written, which I’m sure you’ll find as useful as I have.
The path to financial independence is paved with many lost income opportunities.
I’ll be the first to mention how hard we work on minimizing our budget, but the Distilled Dollar household is new to finding opportunities to make money outside of the 9-5. Me personally, I used to work closer to 9-9, if not more. After leaving public accounting late last year, I’ve discovered free time and have since been putting it to good use.
I spent the last 6 months launching my site. It is nice to see some money start to come in for my efforts. This reward is great to see, but it wasn’t one of the key ingredients when it came to making this side hustle a success.
3 Components to Creating a Successful Side Hustle
My journey into the side hustle world is only getting started; I’m still learning a tremendous amount each week.
I hope you take away some key principles that I’ve learned from having just gone through the initial stages. My goal here is to create content that I myself would have wanted to read on day 1.
The differentiating factor which I am able to share is that I’ve just been through this process. I find it to be more helpful to receive advice from the newly minted millionaire rather than the elderly billionaire who may be decades removed from their earlier success.
The first component is having Passion
What does passion mean? How does this translate to day-to-day operations?
Passion means you’re excited to wake up early on the weekends and resentful to go to sleep at night. It means you’re willing to forgo watching the big game on a Saturday because you know you have work to do. It means you’re thinking about your side hustle nearly every free moment of the day.
Once you reach that level of commitment, then it becomes much easier to get the job done.
Passion means you don’t need motivation to get the job done because you’re internally driven to accomplish what you’ve set out to do. You know that perseverance, hard work, and discipline are what it takes.
As Elon Musk once described starting a business, “If you need inspiring words, don’t do it.”
Remember, actions speak louder than words. Hone in on what your actions are telling you. We’re all human and we all have our mental dialogue that might be lying to us. It is all part of the cognitive dissonance we face as we build our side hustle.
You’ll know you found your passion when you can talk for days on end about the subject.
When I made the switch from posting once a week to three times a week, I had a few people ask me how I managed to keep up with producing new content. What people on the outside didn’t realize is that I hadn’t covered even 2% of the material I wanted to cover.
Any topic I discuss can be covered from a dozen different angles. If a few different facts change, then I’m presented with an opportunity to discuss the subject from a new approach or methodology.
That’s what having passion means — it’s finding something you’ll want to talk about regardless of the personal or social benefits associated with it.
The second component to a successful side hustle is the ROI must be high
A side hustle creates extra cash, we all know that. The key difference here is a successful side hustle has an overall high return on investment, or ROI.
I’m not talking about the money.
With a blog, you’re investing a lot of time and energy and should expect something in return. Pursuing a passion that leads to no gains, or even worse, leads to losses is like falling into a trap.
Identify and amplify the value you are receiving in return for your efforts.
For me, I’ve gained a better level of communication with my fiancée. This alone would be worth all the effort I’ve undertaken in creating a blog.
We’ve doubled our savings rate from ~20% to just over 40% thanks to declaring our goals to readers AND thus being held accountable. The result is a material amount of extra cash in our bank account. If we’re not putting time and energy into our goals, and we don’t consider them worthy, then we’re leaving money on the table.
The last component to having a high ROI is obviously to make some money directly from your side hustle. I made a handful of dollars in my first three months but then I made over $500 in my fourth month.
Side hustles have a nasty habit of taking a LONG time to generate cash flow, so make sure you’re receiving benefits before that day comes!
Most of the money I’m earning now is being reinvested back into the site via consulting or upgrading my site’s tech. I feel I owe it to my readers to make my site even better.
After all, the more I give to my site, the more I end up receiving in return.
The last and most critical component in creating a successful side hustle is finding mentors, role models, and heroes.
“Tell me who your heroes are and I’ll tell you how you’ll turn out.” – Warren Buffett
Without a role model, we often lose sight of what’s possible with our side hustle. It helps to have a person guiding us through those early days of starting from scratch.
I have relied heavily on other successful bloggers and internet entrepreneurs. It is reassuring to receive positive feedback and advice early on. The hard part is to trust the mentor and implement their suggestions. Once I do what a mentor asks me to do, they’re even more eager to help out next time.
Conclusion
I hope these 3 components to creating a successful side hustle were helpful to you. For me, they’ve made all the difference.
What is your side Hustle? Who are your role models within your niche?
-Matt
Matt is the founder of Distilled Dollar where he offers a path on how to go from earning a living to building wealth. Matt is a Chicago based CPA and alongside his fiancée, he is distilling down $$ topics in pursuit of financial independence by age 35.
I love, love, love the part about the mentoring! I think that is incredibly important. And you’re right that getting positive feedback early on feels good, but growth comes from implementing advice from the areas where you need work. I paid for some mentoring and because of that – I will pay off the mentoring session in no time.
Great point Vicki. I’m glad you mentioned your consulting call would pay for itself. I felt the same way when I paid for a call.
Thanks for the great guest post, Matt. I enjoyed it a lot. And definitely agree with you – if you don’t have passion (or need motivational words to keep you going) then it’s probably not going to be a lasting project. Thanks again for the tips and good luck in your next month of side-hustling!
Thanks Jay! I’m glad to hear you enjoyed the article!
I think motivation might have a time and place, but if we need to constantly be refueling to achieve our side hustle – then maybe we need to change around the side hustle.
I totally agree with having passion and finding good mentors! I was about to take exception to the high ROI step – not everyone is trying to have a side hustle replace their day job – but then I realized you were referring to ROI in terms of value you receive, not money you are getting . That’s definitely true. You want to find side hustles that are giving you a benefit beyond just money.
On the money side, the ability to save 100% of your side hustle money is one way to get a good ROI. Saving all of your side hustle money can really add up in the future .
Absolutely – ROI to me is more than just the $$. Time and energy are more important inputs than the cash it takes to set up a site. Similarly, the non-financial benefits are more important to me and frankly, they are more fun.
That’s an interesting point about saving 100% of the side hustle. That would be an easy way to rapidly boost your savings rate. I might have seen this discussed on your site or elsewhere – about how a side hustle could be a “10%er” by boosting your savings rate by 10% or more.
Good points!
Side hustles are had to find. I have been trying a few over the last year.
Tried buying LEGO in bulks and selling smaller batches. Gave 50-100 USD per month, but difficult to scale.
So searching new options;)
I’m imagining a garage full of LEGOs!
What else have you tried? I always thought garage sale hopping would be a fun/interesting one as you never know what you can find. Thanks to the internet, we can easily find the sales price before we buy the used good.
I’ve seen people practice a similar habit at a few local used book stores. They scan the ISBN code and see if it is worth selling online.
As always, you offer spot-on suggestions for anyone looking to create a profitable side hustle, Matt. I love that you have stuck to your guns and continue to consider other forms of “profit,” not just the financials.
Aside from mentorship, I also believe that participation in community is important for anyone looking to specifically take on blogging as a side hustle. You’ve exemplified that by developing a collaborative relationship with Ricard and countless others over the past several months.
Definitely agree – side hustles offer MUCH more than an immediate cash inflow.
Excellent point on community and I wish I could add that in as #4. I always remember a piece of advice I saw from Mad Fientist. He basically said to constantly connect with other bloggers as it increases the fun everyone has AND it increases your likelihood to stick to blogging for the long haul. Wise words from a great blogger.
Great advice Matt! I like how you emphasize the mentoring as well, so important, especially in the web space.
We purchased a small business several years ago which is my wife’s side hustle. For me, it’s the blog, although it’s definitely a long-term play. My wife’s business was making money from day 1!
Nice! Sounds like a great turn key solution for you two. I know a few folks who like to buy apartment buildings ready to rent and they really focus in on what it can make Day 1.
Thanks for the comment Jon!
Great post! As someone who has recently launched a blog about Side Hustles, this post speaks to me on a few different levels. I’m definitely working on the final step, and will continue to reach out to the blogging community in hopes of eventually finding mentors and heroes who can help me on my journey 🙂
Awesome! Connecting with other bloggers has made the experience much more enjoyable and of course, much easier.
Best of luck with your site!
Hmm, I haven’t gotten too far into the mentoring space yet. I know they are so important in jumpstarting blogging so I might make the extra investment and go into mentoring soon! I know MMM is offering blog coaching right now, might take advantage of it while I still can 🙂
I’m in the same boat as you, but this article that Matt has written has actually convinced me to see a blog coach – going to be using the same one Mat uses. I’m sure it’ll be worth every dollar. If MMM is doing blog coaching, it would be a crime not to take it (as long as he charges a reasonable price!) as he’s managed to build a HUGE following. I bet he has a thing or two to teach!
Fantastic post! I especially appreciated point number 2- it’s good to remember all the non financial benefits of side hustling when you’re getting started and making pennies on the hour!
Yeah, Matt really did a great job with this post 🙂 My favourite point was #3, which a lot of people take for granted.