Picking the perfect side hustle (is DoorDash right for you?)
NOTE: This article is to make you think about your chosen and/or future side-hustle & to make sure it aligns with your future goals. It is NOT a list of side-hustle ideas!
Oftentimes when we are budgeting and realize that we either need or want to earn extra cash to reach our goals, we end up skimming through articles and YouTube videos that rattle off a list of various side-hustles to earn an arbitrary amount of extra money per day.
Out of this list, we might be left with very few options that are actually in our skill-set or align with our interests and they might required significant time to get set-up before turning a profit. It might also be that you’re tired of your day-job and want your side-hustle to not have anything to do with your current skill-set.
At this point, we often turn to the easiest and quickest path to earn money - options that are widely available to almost everyone and that require little training or upfront investment. We think of things like Uber or food delivery like DoorDash and Instacart - no interviews to pass, online stores to set up, products to imagine, create, and ship - simply sign up and go!
While I’ve gone through this process myself, I’ve realized there’s something nobody seems to talk about - especially in the FIRE community when the goal is to eventually quit your day-job. These side-hustles, while giving instant gratification of cash in hand with their daily deposits, might be setting you up for failure on your financial independence dreams.
What no one is talking about
What no one is talking about when choosing a side-hustle is that you should carefully consider your long-term goals and know that time is precious - that is:
your time right now
and
the efforts of your time right now compounded over more time in the future.
The mantra of side-hustle articles seems to always be “anything that makes extra cash will do”, ignoring that anything you do now comes with a trade-off of missing out on something else that could potentially be more lucrative in the future. Saying yes to something always means saying no to something else - that’s just the nature of life and the limited time that we have.
A quick search of “types of side-hustles” will give you another laundry-list of options - but with little thought given towards the time investment of each side-hustle, whether that time-investment will eventually pay-off in the form of a passive income stream later, and how these differences might not align with your long-term goals.
Starting a time-consuming side-hustle like DoorDash right now that pays you $15/hour will put cash in hand, but will likely require you to continue working 3 years from now for that same $15/hour.
Alternatively, you could put those hours in now for $0/hour working for yourself, but become a millionaire 1-3 years from now with a successful YouTube channel, blog, digital product store, etc. and retire off the passive income. If your goal is to just get an extra $100 for vacation spending money, then this might not matter to you. If you’re trying to retire early, it will matter a great deal.
It all depends on your goals.
After DoorDashing frequently for lunch and dinner each day over the Fourth of July weekend, I made less than $15/hour net on average. If I were to go back out again on another holiday weekend, I might get lucky and make more, but it’s more likely that I would average the same amount of money each time I worked, regardless of my past experience or how hard I worked next time.
A small business owner, instead, may be losing money or breaking even today, but is getting their name out there into the public’s mind and could reap the benefits later. Their hard work now pays off later, unlike my hard work DoorDashing.
Compare these scenarios also to a YouTuber who spent all weekend making the perfect video and who has reached an impressive, but still achievable number, of 30,000 subscribers. While I’m not on YouTube and don’t know the amount they’d make - I’ve seen enough YouTubers quit their job at this amount of subscribers to pursue it full-time. These videos, once up, continue to bring in revenue for all time.
If you’re camera-shy, consider someone who spent the weekend instead writing for their blog. When I post an article, I don’t get paid right away or see the traffic benefits from posting. In fact, Google can take 8 months to fully categorize and promote an article at its most optimal level in its search engine, meaning instant gratification is not the name of the game in blogging. While DoorDash may have paid me more up front, someone who is blogging is setting up foundations to earn money well into the future.
My partner often jokes, “I’m the short-term, you’re the long-term” before going out to Dash while I’m writing. By this he means that he drives a lot of our short-term extra earnings, while I’ve been quietly setting up in the background ways to make money well into our future through real estate and blogging. His comments are really the inspiration for this post today - as some people may not have considered that the time they’re trading to make an extra $15-25 per hour could be costing them that freedom they’re after in just a few short years.
Some people may think “but I don’t want to wait 8 months to make money”. To that I say, the time will pass anyways - 8 months from now, do you want to be trading your time for money or do you want to have some sort of business, blog, YouTube channel, etc. passively earning you income so that you can take your foot off the pedal later?
If DoorDash is your only side-hustle - 8 months from now you’ll need to put in the same hours you are putting in today to make the same amount of money. If you stop working, you stop earning. With a blog or YouTube channel, that may not be true if your readership or viewership has grown. Depending on the business you set up, for example: self-print products on Etsy where you design once and sell forever, you could also be investing less time for the same amount of money later - perhaps even more.
How to choose a side hustle
Your side-hustles should consider your overall goals in life and intentions for the extra money. For this article, I’ll consider the following goals:
Holiday spending
Career switch
Financial Independence, Retire Early
Starting your own business
Emergency money or short-term spending goals
Financial need
For fun
Holiday spending
If your budget from your day-job is too tight around the holiday season but you don’t want to change your day-job to boost your income/save year-round in a sinking fund, then DoorDash and other time-trading side-hustles are fine to pick up a little extra cash.
Career switch
Maybe your part-time job/side-hustle is you trading your time for money, but it’s worth it to you because you’re picking up new skills to make a future career change. In this case, it’s totally fine to temporarily trade your time for money, because you’re also getting knowledge! For those who are unhappy with trading their time, consider self-teaching and offering your services/products at a discount if possible.
Financial Independence, Retire Early (FIRE)
This is a complicated goal and depends on how you see retirement going - are you hoping to just get to a certain overall investment portfolio number and then retire off that portfolio? Picking up extra cash to invest might be a good move. If you’re certain you’ll need to continue earning money in your retirement - it might be time to rethink a side-hustle like DoorDash or anything else that actively takes up your time. Consider a blog or shop where the product is digital and your customers can buy the item you have for sale and download it - without you needing to worry about inventory and shipping. You can invest your extra earnings now and live off them later in early retirement!
Starting your own business
If your goal in life is to start your own business, the only reason you should be working for someone else/trading time for money is to learn the industry or to save up financially to make the full-time plunge into your work. If you can skip on side-hustles like DoorDash and instead make the time investment now into your future business, it might just pay off in the future.
Emergency money or short-term spending goals
Recently, my car battery died and the oil pressure switch went out. It had to happen around the holidays, too, right? While you hopefully have an emergency fund to cover surprises like this, you might not. Or multiple surprises might happen around the same time that wipe out what you do have. In this case, I’m all about using quick cash-building methods like DoorDash and Instacart to bring in a little extra cash.
Another example of a time I’ve used DoorDash was when I booked a luxury three-day-weekend vacation with my partner - it was our only “just the two of us” vacation of the year and worth every penny… but we still felt that it was a lot of money to spend given our ambitious investment goals. We DoorDashed to make up a chunk of the cost and to ease our minds. I would say DoorDash is great for extra spending money on trips or perhaps when you need to shop for unplanned birthday presents and events.
Financial need
Similar to the emergency fund section above, you may be in a spot where your income just doesn’t cover your bills at the moment and you need to supplement with a bit of extra cash. In this situation, there’s no need to ever feel guilty about doing what you need to do now in order to put food on the table or to keep a roof over your head. Focus on the true necessities now and earn that quick/easy/short-term cash to provide for yourself and your family. You can still be thinking in the back of your mind what you might want to do in the future to build long-term wealth!
For fun
If you’re just earning extra cash because it’s more productive than laying on the couch watching Netflix, you do you! I totally get it and I know that driving around, getting to know different restaurants, can be a blast when you’ve been cooped up at home all day. Sometimes a side-hustle isn’t just about the money, it’s about using those off-work hours for something fun but still “productive” or “useful”.
So what side hustle is right for you?
I hope I have you thinking now about what your goals are for the future and if your chosen side-hustle is really helping you reach those goals… or if it’s simply taking up your time, allowing you to procrastinate and put off what really needs to get done.
Remember: your time right now is precious and your efforts and time invested now will compound long into the future if spent wisely.
Wishing you all the best & thanks for reading! Let me know… what goal do you have for your side-hustle? What side-hustle do you think is perfect for getting you to that goal?