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.
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 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.