A side hustle, or a second job aside from your full-time employment, can be a great way to earn extra money. It could even be a stepping stone to starting a business of your own, if you're eventually able to net a generous income from it.
If you're one of the millions of Americans working a side gig, it's important that you're as strategic as possible about how you spend your time and what you do with the dollars you earn from it. Following these four tips can help you to supercharge your side-hustle earnings so you can earn more from your extra job than you may have imagined possible.
1. Understand the value of your time
The first key factor in making more money from your side hustle is to recognize you have only limited time. This means you may not want to accept every job you're offered, since doing so could take your efforts away from more lucrative prospects.
It's a good idea to set a minimum hourly rate for yourself. This may be low when you're first starting out and building your business but should increase over time. Once you have sufficient work, don't accept any jobs that are below your minimum hourly rate unless there's a specific reason, such as getting an important reference that could open up many other doors for you.
2. Research how to best organize your business
Many people default to working as a sole proprietor when earning income from a side gig. This means that you simply report the income you earn as 1099 income when you file your tax returns.
But as you grow your company, you may need to look into different business structures, such as an S-corporation. Running your company as a corporation could give you more flexibility in how your earnings are taxed and could help you open up the door to more deductions. If it helps you save on your IRS bill, you keep more money in your pocket.
3. Fine-tune your skills
Developing skills related to your side hustle can help you to earn better-paying jobs and find more clients. You may want to take courses, or you can simply spend a lot of time networking and talking to experts in your chosen industry about how they maximize their own earning potential.
4. Invest your earnings
Finally, one of the best, easiest ways to earn more from your side gig is to invest at least some of the money you make (especially if your side job is extra income that supplements your regular paycheck).
By investing the money you earn, you can put that money to work for you. It will earn returns, and you can reinvest those returns and benefit from compound growth. Not only will you be earning extra income from your side job, but that money will constantly be working as well to help your wealth grow.
By following these four steps, your side hustle can hopefully help you make more money than you imagined possible, so you should be well on your way to building real wealth.