Focus on passive income, not on side hustles
Often, 'passive income' and 'side hustle' get mixed up, but there are some big differences between both.Both bring an additional source of income, but the way they create this extra income is completely different.
Check out the differences between side hustles and passive income below and why you should focus on passive income rather than a side hustle.
What is passive income
Passive income is money generated from a business or project in which you are not actively involved (anymore).
For most passive income streams, you must put in time or money in advance. But your involvement will gradually decrease until you can leave it 'free' or delegate it to others.
Common examples of passive income streams are:
dividends
rental properties
online courses
blogging
If you want to read more about passive streams, check the following article:
What is passive income
For most passive income streams, you must put in time or money in advance. But your involvement will gradually decrease until you can leave it 'free' or delegate it to others.
Common examples of passive income streams are:
What is a side hustle
A side hustle generally refers to a project (or job) you do outside your full-time employment.
With a side hustle, you earn money by performing a service (or selling products). As you can see, you need to be actively involved; you need to be physically present to make money.
But side hustles are not an additional (or part-time) job as you have much more freedom, you can choose if you want to do it or not, ...
Common examples of side hustles are:
dog walking
Uber driver
food delivery
door to door selling
virtual assistant
With a side hustle, you earn money by performing a service (or selling products). As you can see, you need to be actively involved; you need to be physically present to make money.
But side hustles are not an additional (or part-time) job as you have much more freedom, you can choose if you want to do it or not, ...
Common examples of side hustles are:
Differences and similarities
Both passive income and side hustles serve the same purpose: generating extra income. That's about the only similarity there is.
As you read above, a side hustle is an active way of making money, while a passive income stream is entirely passive. With a side hustle, you make money, while a passive income stream earns you money.
While a side hustle requires being active (exchanging your time for money), a passive income stream generates money even when you're asleep.
There is a difference in being 'active' or 'passive' not only in terms of time perspective. While a side hustle gives you money immediately, passive income is a long-term source of income.
As you read above, a side hustle is an active way of making money, while a passive income stream is entirely passive. With a side hustle, you make money, while a passive income stream earns you money.
While a side hustle requires being active (exchanging your time for money), a passive income stream generates money even when you're asleep.
There is a difference in being 'active' or 'passive' not only in terms of time perspective. While a side hustle gives you money immediately, passive income is a long-term source of income.
5 Reasons why you should focus on passive income
1. Scalability
Compared to side hustles, passive income is almost infinitely scalable. With a side hustle, you are bound to your physical limits and available time. Passive income only requires some upfront work (and time) and later on (maybe) a little time to maintain this stream of income.
If you are an Uber driver in your spare time, you are stuck to the price and fees given to you by Uber. Uber will not pay you more because you want or ask for it. If you sell a digital product or service, a slight increase in your price can make you 100's dollars more extra income.
Most of the time, side hustles are in your neighborhood, while passive income streams can easily be managed remotely (and there is the possibility of having the whole world as your client and or audience).
Setting up multiple passive income streams is also easier as they require your time and effort only once. With side hustles, you have the limitation of time.
Not only are passive income streams more scalable, but they also offer more security compared to a side hustle.
If you are sick or take a holiday, the side hustle source of income dries up. With passive income, money keeps coming in even when you're asleep on holidays.
Note from the author: one of my passive income streams is selling digital art on Etsy (a small business). I do this completely remotely; I have clients worldwide, and if I raise the price of an item by 10 cents, I get 10$ extra per month. And all of that for only 1 hour of work per week. If I want (and have time), I can create many more items to grow my profit. But when you're an Uber driver, you cannot drive two cars to double your income.
If you are an Uber driver in your spare time, you are stuck to the price and fees given to you by Uber. Uber will not pay you more because you want or ask for it. If you sell a digital product or service, a slight increase in your price can make you 100's dollars more extra income.
Most of the time, side hustles are in your neighborhood, while passive income streams can easily be managed remotely (and there is the possibility of having the whole world as your client and or audience).
Setting up multiple passive income streams is also easier as they require your time and effort only once. With side hustles, you have the limitation of time.
Not only are passive income streams more scalable, but they also offer more security compared to a side hustle.
If you are sick or take a holiday, the side hustle source of income dries up. With passive income, money keeps coming in even when you're asleep on holidays.
Note from the author: one of my passive income streams is selling digital art on Etsy (a small business). I do this completely remotely; I have clients worldwide, and if I raise the price of an item by 10 cents, I get 10$ extra per month. And all of that for only 1 hour of work per week. If I want (and have time), I can create many more items to grow my profit. But when you're an Uber driver, you cannot drive two cars to double your income.
2. Flexibility :
With side hustles, you often have to work during hours convenient to you or accept tasks you don't want. Passive income streams give you much more flexibility. You are your own boss, you are responsible for everything.
Setting up a passive income stream requires a lot of time and effort (and/or money), but once it is established, you have lots of free time (and more energy).
Setting up a passive income stream requires a lot of time and effort (and/or money), but once it is established, you have lots of free time (and more energy).
3. Time freedom :
As mentioned above, passive income gives you more time. Time that you can spend with your loved ones, creating other passive income streams, hobbies, ...
A day only exists of 24 hours, so you are limited in time with side hustles. Time that you can use for other things.
Note from the author: side hustles give you certainty; you know how much you will earn for work x hours. With passive income, you have no idea if your hard work will even pay off in the future. You can work 500 hours trying to set up a passive income stream, and it can be that you.
A day only exists of 24 hours, so you are limited in time with side hustles. Time that you can use for other things.
Note from the author: side hustles give you certainty; you know how much you will earn for work x hours. With passive income, you have no idea if your hard work will even pay off in the future. You can work 500 hours trying to set up a passive income stream, and it can be that you.
4. Reduced stress :
Having a successful passive income stream lowers the stress and pressure you have with hustling for extra money.
You can put 20 times 4 hours into a side hustle, but you can also put 80 hours into setting up a passive income stream. The result will be that you will have less pressure and a more consistent income stream. With a side hustle, you will have to keep on performing over and over again.
Another stress reliever is that you can spend much more time on stuff you love to do, giving you a peaceful state of mind.
You can put 20 times 4 hours into a side hustle, but you can also put 80 hours into setting up a passive income stream. The result will be that you will have less pressure and a more consistent income stream. With a side hustle, you will have to keep on performing over and over again.
Another stress reliever is that you can spend much more time on stuff you love to do, giving you a peaceful state of mind.
5. Long-term sustainability :
But we're in it for the long term, right? Passive income is more resilient to market and economic fluctuations (as it's easier to diversify your streams of income), so it's a more secure way of getting extra income.
You can keep on building income streams that can continue to grow and provide steady wealth over time.
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