Having One Side Hustle or Many — Which Approach is Better?
In this article, I’d like to take a closer look at a hotly debated question:
“How many side hustles should I run?”.
Very often there is talk about diversification. “Never put all eggs into one basket” is something you hear relatively often in the context of diversification. But to a large extent this approach comes primarily from the financial sector. The idea behind it is relatively simple: Instead of buying shares of only one company, for example, one prefers to buy shares of many different companies. This approach is intended to minimize the risk of a total loss. However, this article is not about investing in the capital market, but much more about the sense of many side hustle possibilities.
What can be understood by diversification in terms of side hustle opportunities?
In principle, it is similar to the previous example. We no longer focus on just one side hustle, but rather on several. In this way, we also minimize the risk of a total loss, should a Side Hustle, after a certain time, for certain reasons, no longer work as it once did. Let’s assume the following scenario:
- Article writing (Side Hustle number 1)
- Dropshipping (Side Hustle number 2)
- Create online courses (Side Hustle number 3)
Let’s assume that we manage to get all three Side Hustles up and running after a certain amount of time. This means that each of our Side Hustle will yield profits accordingly. Now, after a few months, what no one wants to believe happens:
Side Hustle number 2 (dropshipping) falls away. The reason is that our dropshipping supplier is no longer available. So from one day to the next, we can no longer distribute our dropshipping products. Furthermore, there is also no possibility anymore to find a suitable alternative supplier within the next weeks. I know that this scenario is a bit exaggerated now, however, this case can occur. In the end, my only point is that this case should definitely be taken into account.
Now we only have Side Hustle number 1 (writing articles) as well as Side Hustle number 2 (creating online courses) left. So we have to account for the loss of one side hustle and, if necessary, choose a new one that compensates for these losses. However, in my opinion, this example shows quite well that diversification is very important here. Because if we had exactly only the dropshipping side hustle, we would now be at 0.
So the biggest advantage of multiple side hustles is primarily diversification. A great thing, isn’t it?
Yes, in theory and also in practice it is of course nice to have multiple income streams at your disposal — who wouldn’t want that? But at the same time, this is where the biggest disadvantage hides:
We have to multi-task in order to set up multiple side hustles in parallel and successfully execute them in the long run.
At this point, let’s expand the previous example by a few numbers:
- Article writing (side hustle number 1): 4 hours of effort per week
- Dropshipping (side hustle number 2): effort 2 hours per week
- Create online courses (Side Hustle number 3): Effort 80 hours initial; then 1 hour per week
So we see that each Side Hustle takes a corresponding amount of time. Especially Side Hustle number 3 (create online courses) takes a lot of time initially. We have to put in a certain amount of work week after week for all of our Side Hustles. Even though some activities can be automated to a certain degree, in most cases we still have to invest our own time to make the Side Hustle successful in the long run.
Now, at this point, one might legitimately ask the following question:
“What if I only pursue one Side Hustle?”
The big disadvantage should already be clear: We have no diversification. Should something happen to just this one side hustle — like dropping out overnight — we are back to 0.
But this approach has a significant advantage. We don’t have to multi-task because we are only pursuing a single side hustle. This, in turn, means that we can put our full focus on just that. Something that can definitely pay off. Because instead of spending the 3 hours per week on side hustle number 2 (dropshipping) and number 3 (creating online courses), we prefer to invest them in writing articles. This means that we no longer have only 4 hours per week at our disposal, but 7. If we calculate this over a whole year, we would have invested around 156 extra hours (52 weeks X 3) in writing articles — as long as we only do this Side Hustle.
So what should you do now? A single Side Hustle or several?
I don’t think there is a universal answer to this question. It always depends on the initial situation you are in. For example, it is much easier to run several side hustles if you can outsource or automate a large number of tasks. However, if we have to invest a certain number of hours per side hustle over and over again each week, this can again be seen as quite negative.
At the end of the day, it also has a lot to do with one’s own risk aversion. Because someone who always wants to play it safe should definitely focus on several side hustles instead of just one. Someone who is generally a bit more risk-friendly and prefers to focus on a single thing, for them running a single side hustle might be the better option.
Personally, I think a rock-solid approach is to start with one side hustle first. This should also increase the likelihood of success, as you can put full focus on just that. In the course of time, however, there is nothing to be said against adding another side hustle. Freely after the motto: One after the other. During this time, you learn a lot about the Side Hustle you are doing. We know what works well and what works less well. Likewise, we know that perhaps certain things or tasks can be automated or outsourced. All of this can be seen as very beneficial from our point of view. So we are gradually building a single side hustle. Once we have it up and running, we can start thinking about another one. But really only then.
As already noted, there is no universal answer to this question. Thus, it is up to each person to determine his or her own course of action. Nevertheless, I hope that I could present the advantages and disadvantages of the two options in more detail and perhaps give one or the other a thought-provoking impulse in the right direction.
Disclaimer
This article/blog post and the information it contains are for informational purposes only. It should not be considered financial or legal advice or the like. Not all information is accurate/correct. Before making any major (financial/legal) decision, please consult a financial or legal professional.
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