Should I Have A Side Hustle?

Katie: Welcome back, Rich Girls and Boys, to the Rich Girl Roundup weekly discussion of The Money with Katie Show. I'm your host, Katie Gatti Tassin. And every Friday my executive producer, Henah, and I are going to discuss a listener question. But before we dive in, here's a quick message from our sponsors. 

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Katie: Henah, how we doing this week? 

Henah: I'm good. I'm getting lots of sunshine, which is different than the weeks before. How about you? 

Katie: It's that Bay Area gloom. I'm doing well. It's already, what day is it? Thursday, as we're recording this. This week has flown by. 

Henah: Yeah, it has. So I'm really excited about this topic, 'cause it's something that applies to both of us. So we've talked on the show about how earning more feels like the only solution to catch up when everything kind of feels stacked against you economically. And so this is a question we've gotten a lot, and one that this week came from Audrey. So the question is, “How do you pick a side hustle?” So Katie, I don't know if you wanna start. I know I think at one point you had four side hustles, so maybe you are the queen, to start with. 

Katie: Yeah, not intentionally. Okay. So I feel like I have a bit of a framework that I wanna walk you through with my approach to… 

Henah: Of course you do.

Katie: …side hustles. I'm like, here's the flow chart. *Unfurls scroll.* But the first question that I would be asking myself is, “Am I looking for a way to make a little bit of extra income on the side of a full-time job that I actually like? Or is this low-key a cry for help that I want out of my current career trajectory, and that I am hoping, there's some side of me that's hoping, that this side hustle will morph into something with full-time potential? I'm curious how that strikes you. 

Henah: Well, I mean, I think that that's funny, because you started Money with Katie as a side hustle and now it is your full-time job. I actually started side hustling, I think, seven years ago, and I did it because I was interested in a specific industry, but I was okay with my job; I really liked it. So for me it was like, oh, I have this interest in being involved and it'll be nice revenue, but it was not necessarily like a cry for help “Get me out of my situation.” But I'm very interested in this. 

Katie: I like that you called it “revenue.” 

Henah: Oh, I know—that's so Money with Katie of me. “Additional income.” I don't know if you were doing yours for a cry for help, but I know you probably have like a 12-step framework. So where would we start? 

Katie: Yeah, I mean mine was like maybe a teensy weensy bit of a cry for help, because I just really wanted something of my own really badly. But I do think that, to your point about it just being something that was generating extra income…extra “revenue”... 

Henah: Extra revenue. 

Katie: Fancy tuxedo Pooh Bear on the side of something that you already like, I think there are a few questions that I would be asking. Number one, “Am I being paid fairly in my full-time work?” If you're in a position where “I want to make extra money,” it's probably a lower lift to just go to bat for higher pay for the 40 hours a week you're already working. So I think that's something that I would be asking first. Number two, if I do feel that I am being paid fairly but I still want to add some extra income, is this something that I'd be comfortable—and honestly legally able—to take into a freelance capacity? Some employment contracts have non-competes that don't allow you to do the same type of work, or sometimes any work at all, outside of a full-time employment capacity. So I think it's worth checking. But beyond that, assuming those things are all okay, I actually think that the freelance path is a nice starting point/middle ground, because you already have the skill set that you're selling to others in your full-time labor. Your full-time job is gonna make you better at your side hustle, and vice versa. 

So one of my side hustles back in the day was just doing my full-time job for other companies, for other clients. So I liked to use LinkedIn and also word of mouth for freelance opportunities. But I would also post on social media that I was looking for part-time work, and then I would look at the LinkedIn job site for contract opportunities.

So I think that's kind of my…that would be my first step that feels the least extreme. You don't have to come up with this whole new thing; you can kind of just outsource your services. Here's a quick message from the sponsors of this segment. 

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Henah: Well, actually now that we're talking about it, I feel like I happened to work with someone who needed something that I was good at, and so I sort of pitched myself, and so it was a very organic opportunity that came out of it. And at this point, I guess word of mouth has been the way that I'll find new work. But I never even thought to look on LinkedIn for contract work, 'cause I've always just had the same people for the last couple years. But that's a great point. I mean, I do think that it was really interesting to bring my skill set to a different industry, because then eventually, I ended up taking that side hustle job and making it full-time for a little bit, and now it's actually back in a side hustle capacity. But the nice thing now is I'm doing it as extra money, as like supplemental, because my job does pay decently well and I do have like other things, but I'm able to fund things that matter to me that I feel like, oh, okay, like I can pay for this trip or I can pay for this experience that I wouldn't necessarily feel comfortable with in my day-to-day. So I'm curious, do you think that the side hustle is more lucrative for funding those extracurriculars, or do you feel like, oh, I would rather just take the side hustle money and throw it into a savings? 

Katie: I feel like it depends on what your goals are. I definitely used it as more of a “throw it into savings,” 'cause I was side hustling like a crazy person so that I could never work again. Which is also kind of an ironic admission to make, like “I'm gonna have four jobs now so I can have zero jobs later.” And I think it speaks almost to the…it might be a cry for help. Like if you want to get out of your current career and you're like,” I don't know what my side hustle should be.” I kind of feel like it's something where you can look at other people that you admire. 

So for example, I had a friend in Dallas who went from working as a graphic designer for this big company to being the co-owner of a fitness studio and doing all of their branding, their creative, their social media, whatever. And I always really used to admire her because I was like, “Damn, she basically created her dream job,” because she was just already going to fitness classes. She was interested in fitness despite not having a background in it formally or professionally. And then she became an instructor, and then she befriended another instructor who was about to open her own shop, and she was very open with this person about, “Hey this is my skill set.” She, I guess, you know, kind of made it clear that she's a go-getter and was always kind of sharing her designs and stuff with this woman. And so she was like, “All right, do you wanna go into this with me? And you know, I'll give you an equity stake if you're branding our business effectively.” 

So I think that always really inspired me and kind of opened my eyes to see that you can kind of pave your own path. It does not have to be something you went to school for, but you kind of just have to start. And I think by identifying people you know who seem to be living that dream, like people you're jealous of, I think you can use your envy as a guide about what it is you would rather be doing, and then just start putting yourself in those circles.

Henah: Yeah, I mean, I think your point about it doesn't have to be something that you already know is a great one, because when I first started working with one person I freelance with, I started with just writing 'cause that's what I knew. And then it moved to website design, and then it moved to…so it ended up being this thing where I could grow my own skill set, but it definitely started with what my skill set and my passion were. 

And I think the other part of the conversation is like, when you're picking a side hustle, it's gonna take up a certain amount of time, right? And if you already have your nine to five, the question is, do you need it in terms of your income, but also, do you have the time to do it? Because now, seven years in, I'm kind of like, okay, I kind of miss my nights and weekends, and it's not so much of an interest anymore as it is exhausting. So I'm curious because you were doing this for a very long time too. Where do you kind of say, you know, I wanna make this much money, but I only have this much time to dedicate to a side hustle? 

Katie: I mean, I always have maintained that I think the best side hustles are the ones that feel like hobbies. And sometimes that's not gonna be the thing that you do for work full-time. Like one of my side hustles was teaching fitness, and that kind of felt like a hobby more than a job. So I for the most part enjoyed doing that in the mornings or on the weekends. It didn't feel like going to work as much as it felt like, okay, this is something I'd be doing anyway. But I do think it will probably reach a point where if the thing that you're doing for money is taking up more time than you would want, getting really specific about what it is that you're actually trying to get out of it.

So in one aspect you may be like, “Oh, I'm just trying to make extra income 'cause I'm trying to hit this savings goal.” And then once you hit the savings goal, you may be comfortable kind of tapering back, because you've now made the progress you are wanting to make, and great, you're done. But if you're coming at it from the, “This is a cry for help and I wanna switch industries and I need this to pan out,” that's a little bit less clear, because now the end goal is not necessarily an immediate, financial, tangible takeaway as much as it is a lifestyle shift. And in that case in my life, it was Money with Katie, it got to the point where I was like, all right, I need to double down and do both and scale until it gets to the point where I can live on that alone, and then I can reclaim my time by ditching the other stuff. And that was ultimately what happened. But I do think that we just talk about side hustles so much as though they're so necessary. But I think people want them for different reasons. Like you may really just want money, and then it's kind of a different calculus than if you're like, “Oh, I'm trying to build my exit path out of my traditional career.” 

Henah: Yeah, that's a great nuance, 'cause I think for me, it started in one and it moved to the other, and I think a lot of people are dealing with that too. And I think for you too, like you started because you were like, “Oh, I want something that's mine,” and now it's like, “Oh, well, now it's this thing that I love and is bringing in…”

Katie: And now it's my full-time job. 

Henah: Yes. When she went from four side hustles to just the one full-time job. I do wanna ask though, like on a tactical level, I think you and I have done this for a long time, so I do wanna talk a little bit about what to keep in mind economically. So I know taxes is the big thing. I've sort of always allocated like 30% just for taxes, and then I'll be pleased if it's any less, I guess, taken out than that. What about you? 

Katie: Well, as someone who is now facing her second year of owing the IRS $40,000, I am probably not the person to offer advice on this, because psychologically and cognitively I am with you. 30% is the technically correct amount that you wanna be setting aside from your side hustle income every month. That's absolutely correct. Don't be like me and just be like, “Eh, I'll worry about this later.” 'Cause you know, the IRS is gonna come for their money eventually, and you know, it's an interesting position to be in when you're like, “Ooh, I didn't really take the time to set this aside as I was earning it.” So fortunately we have the savings to pay for it, but I could totally see getting into a position where you're like, “Ah, sweet, side hustle money. Like this is my bar money,” and then every single month you're just spending all of it and then the tax bill comes in April and you're like, “Ooh, I don't have any of that. All of that is gone now.” 

Henah: Well, Katie, you know, I'm looking everywhere in my home for the tiniest violin for you, but I cannot seem to find it. But yeah, I think that just keeping an eye on the, like knowing that you're gonna have to pay at least a substantial part of it towards taxes, and obviously you can write certain things off, thinking about like if you have a specific office space in your house, your computer, whatever. But I think it's something where when I first got my side hustle income I was like, “Oh my god, this is so much money.” And then after I thought about it I was like, “Oh, it's not as much as I thought it would be.” So something to keep in mind for sure. 

Katie: Totally. I also just kind of wanna close today by reminding whoever is listening that I think there's a misconception with side hustles, that it's something that you can just go out and start making money immediately. Some of the best side hustles, there's a ramp-up period where it's not gonna make any money at first, and that's okay. So I think there's a bit of a…depending on what you're trying to do and depending on the intent, I think it's worthwhile to kind of give yourself patience and time and to be like, “Yeah, I'm in that tinker, startup phase right now. This doesn't, I don't have to put pressure on myself for this to…” It might cost money at first. Like if you're starting a blog or if you're starting a business, you're gonna have a few hundred dollars just in startup costs. So yeah, I think that's something to be aware of. 

Henah: Yeah, that's a great point. But side hustles can also be amazing, 'cause look at Katie now. So I think that's a great note to close this out on. 

Katie: Yes, absolutely. All right, y'all, well, thank you for listening to this week's Rich Girl Roundup discussion. I hope you learned something. We'll be back next Friday, talking about the unfortunate reality of layoffs and what we can individually do. And hey, maybe your side hustle will become your safety net during a layoff in the future at some point. Who knows? But we will see you then.