NerdWallet's Smart Money Podcast - What's a side hustle and should I start one?

Episode Date: August 9, 2017

There are a lot of side gigs out there. (Nerds took some for a test drive!) Here’s how to tell which ones are worth it and which are scams.

Hello, and welcome to NerdWallet's Smart Money Podcast, where we answer your real-world money questions in 15 minutes or less. I'm your host, Sean Piles, and joining me is my co-host, Dayana Yochum. So we recently got a question from Amber in Oakland, and Amber wonders, what is a side hustle and should I start one? Ah, the side hustle. That was a very heavy sigh. What a side hustle is depends on who's using the word so far as I've seen.

One is the quote unquote passion project side hustle where you work on a hobby like getting clothes for cats or eating jewelry or coding an app and hope to maybe make some dollars from it someday. On the cat sweaters. That's great. So that is the classic version of the side hustle. It's, as marketers say it, it's a way to free yourself from the shackles of a nine to five job. But the problem is for many people, the reality isn't that glamorous. Work isn't a passion project or a way to get ahead in your job. It happens to be the only way people can cover their basic living necessities and make ends meet.

So that's why I call it the survival hustle, not the side hustle. Yeah, that. It's so true. Because the grim reality is that these part-time jobs are basically 1099 contract gigs where some startup is making money off of your time and providing little in return so far as benefits like healthcare or a retirement account. Right. Well, on today's episode, we're going to dive into side and survival hustles, the good and the bad. We've cornered, telephonically, one of our in-house nerd wallet experts, Laura McMullen, to talk about how

to make the side hustle work for you and your financial life and how to figure out if it's even worth it. Hey, Laura. Hey, how are you guys? Hey, welcome. Thank you for joining us today. Sure thing. So let's dive into it. When most people think about side hustles, the first thing that comes to mind, at least for me, is things in the sharing economy like Airbnb and Uber, but that's just scratching the surface on what kinds of side hustles there are. Can you talk with us about other ones that you've seen?

Sure. So a lot of times it comes down to just selling something. It's either your stuff, like a good old fashioned garage sale or flea market, or the virtual version of that, which would be selling stuff on eBay, Amazon, or even a specialized, say, Instagram account with vintage clothing. You can also sell your talent. Like, you know, if you've got a knack for yoga and you've got the certification, you could do that on the side, teaching it rather. And you can also sell your time. And a lot of times that involves completing tedious tasks, tasks for a little bit of money, and hopefully it will add up a very little bit of money. Right. So one of those examples you might have heard of before is Mechanical Turk. That's a

service through Amazon where basically people, they call them requesters, can request other online folks to complete mundane tasks for them that can't be automated. So this might be like transcribing audio recordings or naming items in a picture. Pretty boring stuff for which you get like a couple cents or if you're lucky, a couple dollars. It's really hit or miss. Some people love it. But honestly, in the reporting that I've done on it it sounds kind of unbearable sounds really boring it's a miracle and it's hard to make much money off of it I think though you will occasionally have those success stories of people who bring in a lot of money from it right and those are the ones that get a lot of publicity this for yeah so I sold my soul for, uh, you know, pennies on the box, but, but, okay.

I heard that you, um, you have actually started taking surveys online just to like doing this kind of work just to see what it's like. Please tell me all about it. Um, I'm not, I'm not, I'm not quitting my day job yet. I'm, I'm a Sue, but Spoiler, it's terrible. My, yeah, a couple fellow nerds and I decided to get in there, get our hands dirty and actually jump right into these survey sites. There are so, so many survey sites out online where you can, it's exactly what you think it is. You just take surveys online and earn like a couple points or a couple dollars. So can you give us an example of things that you have been answering questions about? I have no idea what this whole survey world is like, but I can't imagine. Okay, so for example, pretty much every survey site is more like an aggregator for other survey sites.

So you have to take qualifying surveys where you repeatedly give your like basics, your age, income, gender, that kind of stuff. And then once, if you qualify for the bigger survey, which theoretically should make you some money is, uh, you answer all sorts of random stuff. So for example, I taught, I answered questions about how I feel about Starbucks. Um, another one where I watched commercials that were in play and how they made me feel and then I answered an entire survey about what meat I've purchased okay in the last year so like I was yeah so it's like how much pork did I buy in the month of May that kind of thing did you did you did you did you on behalf of the pork industry they don't really disclose like what exactly

you're using this survey for. Every once in a while, you'll see that something is brought to you by the Nielsen company or something like that. But other than that, it's really vague. Maybe when you answered the question, yes or no, do you like bacon, that put you in a whole other pool of potential surveys. Maybe. Well, it's funny. So I'm not the only one taking all these surveys at NerdWallet. A few other nerds and I are doing it and we are all, you know, pretty similar demographically and we have been getting rejected for so many surveys. I don't know if we're too

basic or what, but we enter information and are just like immediately disqualified from a lot of surveys, which is really frustrating. All right. So is really frustrating. Alright so okay how much do you make doing this? I mean is it worth it? Well so you know I was really wishing that I would jump into these survey websites and found one where I was like oh this is actually interesting and look at me how the time has passed and I've made a hundred dollars. That is not in the case a lot of these survey sites use like a point system so you you do a survey and you get like two thousand points which sounds like something and then you realize it's like you need like a hundred thousand

points to get like an amazon gift card for ten bucks you know and that's an extreme example but it is it is they make it pretty cloudy and hard to tell what you're actually making. And there are survey sites where it's not as ambiguous where you might earn like 50 cents for a survey. But that survey might take 20 minutes, you know, it's, I, from my experience in the last week of taking these survey sites pretty much all day, I cannot imagine it making people much money. I, I, maybe, maybe there are exceptions out there, but it seems like a pretty painful way to, to make money. I think I'd rather get a side hustle, like as a server or,

you know, somewhere not in front of my computer screen, to be honest. So, okay. Fun or not. Um, uh, some of these side hustles that are being advertised aren't always above board. What can go wrong? How do you spot if it's actually a scam or really just a time waster that you're going to earn five cents an hour doing? There are a lot of scams out there. And, you know, the best indicator of a scam is your gut. If it doesn't feel right, just just skip it it's not worth it

specifically if a company is asking for your bank account information upfront for example don't get that away just leave just don't check it out um another thing is if job listing for example is maybe offering you like exclusive access to government jobs no that doesn't exist you can access to government jobs. No, that doesn't exist. You can see all federal government jobs online in the government websites. So that's the kind of stuff that could lead to a straight-up scam and then someone probably taking your information or taking your money. But like, Diana, you said there are also jobs that aren't necessarily scams, but that are just not a good use of your time.

And I would say maybe the survey sites would be an example of that where you really maybe you try it out for a week like I did and just to see if it works for you maybe you come up with some system where you're like a survey answering machine and it works for you but I would say after that week or whatever whatever time you dedicate to it really look at like okay how much time did I spend on this? How much did I make? And what does that convert to in terms of an hourly wage? And a lot of, I suspect it would be like three bucks an hour. You know, it's, it's not much. So that's it. You don't want to

undersell yourself. Sorry. That's, that's a great, really concrete way to figure out what's worth it or not. I like that tip. Thanks. It's not hard to do. I mean, it's just math. And, you know, if it turns out you spend a week on this and you didn't make much money, you know, that's fine. Now you know. You've helped the pork industry.

That's what you've done. Yeah. But that also means one year, for example, if you try out Mechanical Turk, that's the Amazon website, remember, or a survey site, something like this. Or there are other websites that are similar where maybe you – usertesting.com where you test a website and you record how it's working or not working. Those kinds of websites really track your time while you're doing it. Track – you know, it might seem like you spent just an hour doing something and then I've been there. Then it's like 7 o'clock, dinner's ready, I'm still answering questions about pork. Like, okay, maybe the four hours I spent on the surveys today wasn't worth the $5 I got.

You know, stuff like that. I would track it and make sure you're getting what you're worth. And don't undersell yourself. Thanks, Laura. Let's get to those takeaway tips. First off, evaluate if a side hustle is really worth it. And you can do that in two questions. First, is it fun?

Do you enjoy the work? Is it fulfilling in some way? Or two, is it financially worth your time? Calculate your worth so you know you can skip side hustles that are a waste of your time and don't give you that much money. Right. Another takeaway tip is to do your research.

There are scams out there, so check out the company's reputation. Find out how it makes money and look for reviews that real people have posted who have done the same work. See if there have been any complaints. Another takeaway tip is beware of scams. Do your research. There are a lot of companies out there who are not really operating above board. So you want to check the company's reputation, find out how it makes money, and look for reviews or complaints from real people who have done the same work.

Yeah, and keep in mind those red flags that Laura mentioned earlier, things like unrealistic promises, requests for your bank account information, things that you wouldn't give to someone who might be a Nigerian prince emailing you. Just go with your gut instinct. But he was royalty, Sean. Yeah, I still didn't get that money. Lastly, if it is money that you're after, see if there's another way you can get that without taking on a new job.

Maybe try asking for a raise. It's worth a shot. Right. And that's it for today. You can get more on this at nerdwallet.com slash podcast. Do you have a money question of your own? You can text us or call us at 901-730-6373. That's 901-730-NERD.

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