The MapleMoney Show » How to Make Money » Income

Surprising Insights On Side Hustles In 2020, with Jeff Proctor

Presented by EQ Bank

Welcome to The MapleMoney Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. I’m your host, Tom Drake, the founder of MapleMoney, where I’ve been writing about all things related to personal finance since 2009.

If you’ve ever considered starting a side hustle as a way to make some extra money, you’re not alone. Thousands of people in Canada are finding ways to increase their income outside of their regular job. My guest this week is Jeff Proctor. He’s a founder at DollarSprout.com, a website dedicated to helping readers reach their maximum earning potential. DollarSprout covers side hustles, entrepreneurship, freelancing, and many money-making topics.

Dollar Sprout recently conducted a survey on side hustles for 2020, so I thought it would be interesting to have Jeff on the show to provide insight on some of the results. I was surprised to learn that 1/3rd of people who say they have a side hustle are over 54 years old. That goes to show that you’re never too old to start something new.

One of the reasons that side hustles are so popular, is that people are finding it harder every year to rely on their 9-5 job to make ends meet. But if you can spend a few hours each week doing something that brings in an extra four or five hundred dollars a month, it can make a big difference in your finances.

And while some people will dream of turning their side hustle into their full-time gig, you certainly don’t have to. It’s ok for your side hustle to remain just that – something you do on the side.

This week’s episode was brought to you by EQ Bank. Did you know? You can now transfer money overseas with TransferWise directly from your EQ Bank Savings Plus account. Not only will you benefit from earning 2.00% interest on your savings, but you’ll pay far less for international money transfers. While other banks have a habit of sneaking in markups and extra charges, that’s not something you’ll have to worry about with EQ Bank. Visit EQ Bank to start saving money today.

Episode Summary

  • Insights from the Dollar Sprout 2020 Side Hustle Report
  • How side hustles can provide a creative outlet
  • The benefits of having multiple income streams
  • ? of side hustlers are over 54 years old
  • 50% of people who side hustle have a college degree
  • The uncomfortable truth of traditional employment
  • Side hustling in the age of COVID-19
  • Protecting against a downturn in your side hustle
Read transcript

If you’ve ever considered starting a side hustle as a way to make some extra money, you’re not alone. Thousands of people in Canada are finding ways to increase their income outside of their regular job. My guest this week is Jeff Proctor. He’s a co-founder of dollarsprout.com, a website dedicated to helping readers reach their maximum earning potential. Dollar Sprout covers side hustles, entrepreneurship, freelancing and many moneymaking topics.

Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. This week’s episode was brought to you by EQ Bank. Did you know you can now transfer money overseas with TransferWise directly from your EQ Bank Savings Plus account? Not only will you benefit from earning two percent interest on your savings, you will pay far less on international money transfers. While other banks have a habit sneaking in markups and extra charges, that’s not something you have to worry about with the EQ Bank. Visit maplemoney.com/eqbank to start saving money today. Now, let’s chat with Jeff…

Tom: Hi, Jeff, welcome to the Maple Money Show.

Jeff: Hey, thanks for having me, Tom. Glad to be here.

Tom: Recently, Dollar Sprout sent out results of a survey you had done called the 20/20 Side Hustle report. There were some very interesting results, but if you could set it up yourself first, what did you think about the results of the side hustle report?

Jeff: We recently did this study looking at how many people have side hustles and making income outside of their job. And more importantly, what we’re most interested in finding out about was how many of these people really depended on that income, whether it was for paying for their monthly bills, saving for major goals, or just did it as a hobby. I think one of the most interesting things we found from this was, of people who have a side hustle, over 25 percent of them are using that money to cover their normal, everyday expenses like rent, groceries, insurance, that sort of thing, which I thought was really interesting in that the way our economy and society is kind of transforming these days to where a lot of people have to do extra work outside of their job just to get by. I think there are both good and bad things that come from that. I think it allows for a lot more creativity and freedom for side hustlers and people who want to do things outside of their normal work. I think it’s also, in a way, a commentary of the sad state of affairs if people are in a nine-to-five job that isn’t enough to fully meet all their financial goals. That was one of the most notable findings for us.

Tom: Many times on this podcast I’ve said that everyone should have a side hustle. And it’s not just that you can cover bills. I always found it was something mental as well where you felt just relying on just your job wasn’t enough—that there must be something else… That’s why it’s a side hustle. It’s something where you don’t feel like you would go from something to nothing if something were to happen to your job.

Jeff: Exactly. Even right now, as I run Dollar Sprout, that’s my job and my business. Recently it was a side hustle of sorts. Even though I haven’t started making money from it yet, I started studying for my real estate license. I’ve always been interested in that area. It’s a license that requires 60 hours of studying coursework. Then you take a test and eventually you’re qualified to buy and sell houses. It is something I’ve always been interested in. About a month or two ago, I signed up for one of the classes and I’m doing it. For me, that’s some form of a side hustle or something that might turn into a side hustle a few months or so down the road. I just like having that creative outlet to do something else outside of normal work. And, if I can get paid for it, even better.

Tom: Yes, it’s better than an expensive hobby. It is something that makes money. It’s interesting that you said you went from a job into full-time with Dollar Sprout. It started off as a side hustle as well. Once you went full-time with Dollar Sprout, you started another side hustle so there is a bit of mentality there where you are always kind of looking for the next thing, I assume?

Jeff: Yeah, definitely. It’s not necessarily looking for the next thing because, personally, I tend to get burned out on things pretty easily. By pretty easily I mean over the span of a few years. Dollar Sprout turns five years old next month. We’ve been doing it for five years and it’s been awesome. But I also don’t know if I want to be doing it 30 years from now. I want to have other opportunities available, other options—to develop other interests and see what comes of them. And if nothing comes of them, I’m okay with that. Like with the real estate thing, if I never actually do it, I’m okay with it. The worst thing that can happen is that I’m out 60 hours on a course and a test. That’s no big deal in the grand scheme. I’m always a big fan of exposing yourself to as many new things as you can and just find something that sticks.

Tom: In personal finance we talk a lot about this idea of having a diversified portfolio when it comes to investing. What you’re really talking about is kind of diversifying in income streams. You can’t just have that one career or even one successful site. It’s good to have these other things so you’re not just putting all your eggs in one basket. One of the stats you had that I liked was that 65 percent of people in your survey made less than $500. That kind of speaks to the fact that, yes, this is not a full-time job necessarily—you can do a few things. I’ve heard of people that are doing Uber and renting that same car out on tour at other times. It just depends. You can dip your toe into different things, see what works and just spread it out a bit.

Jeff: Definitely. A lot of times we underestimate how much of a difference $300 or $400 a month can make. I could name several bills I have like my cable bill, phone bill or a week of groceries that could be paid for every month. If that just requires a few hours a week of working on something I enjoy, that’s a no brainer. The way I try to look at it is, your side hustle has multiple benefits and the money (if it happens) is only one of them. The bigger benefit in my mind is learning new skills or meeting new people that may eventually blossom into something else down the road that you just can’t foresee right now. I look at the income as just one portion of it. So, you should try to find something you enjoy because if you’re spending all this time to make a little bit of money, it might not be worth it if you’re not getting those other benefits as well.

Tom: Speaking of Uber, the happiest Uber drivers are the ones who do it because they want to meet people. They just want to get out and talk. I have talks with Uber drivers all the time who say they’re probably making less than minimum wage when you factor in all the car costs. They kind of get a bit bitter about how much they’re making. But then there are people who are just totally happy (even being a Walmart greeter) because it’s something they enjoy. It’s not just about the money.

Jeff: Exactly. Hypothetically speaking, let’s say I were to finish out this real estate license and get everything I need to start but I don’t know how to find the clients, why not just start driving for Uber for a couple months and start a conversation with every single passenger? Most people aren’t going to be interested (in real estate) but through that repetition of meeting new people, talking to new people, and telling them what you do outside of Uber, you never know… That’s something everybody asks; do you do Uber full-time? What else do you do? Are you retired? And that always leads to new conversation of, “No, I actually just got my real estate license and I’m trying to get established in that business.” If you leave a good enough impression doing that over a few thousand rides or iterations of talking to people, it’s one way you can take one side hustle to compliment another. They might not seem like they’re related on the surface.

Tom: Yes, for sure. I’ve seen too, where people in Uber cars have handed me their card and it might list more than one thing. There could be three different things they do all on their business card. Speaking of things like Walmart greeters, one of the other stats that kind of blew me away was that one third of all side hustlers are over 54 years old. That kind of surprised me because I had this assumption about side hustles; that it was probably younger people who were more familiar with apps and everything. Any insight on this? Why do you think people in an older demographic are side hustling?

Jeff: I think there’s a few things that are probably contributing to that. The model of the pension fueled retirement is kind of working its way out now. There are only a few government-run entities that basically provide lifetime pensions. You’re not going to get a lifetime pension working for General Motors anymore. It just doesn’t exist. So basically, there’s a real need for people in the retirement age, if they haven’t been saving, they should. We see headlines of that all the time. People are not saving enough money to fuel their retirement. And you mix that with retirement plans of a lot of that older generation, they need the income. My dad is 51 years old. He’s a retired police officer and he drives for Uber and makes a few hundred dollars a week doing that. He really doesn’t need the money because his pension from his police retirement package is good. But, if you tack on an extra $500 or $1,000 a month, it gets to be a nice monthly salary. I think he’s a just one example of that. But I definitely don’t see this trend slowing down anytime soon, especially as people who are going to be moving into this age bracket in the next 10, 20 years are going to have a current technology background. Basically, people in that age group (in the future) will be more technologically literate so this will just become more accessible to everyone.

Tom: For sure. Even though Uber is pretty well known at this point there are lesser known apps like Rover, if you’re going to walk dogs. Maybe those side gigs aren’t in the increased age range just because they don’t see it coming. The other interesting stat too, speaking about what you were just saying, was that 50 percent have a college degree so these aren’t always just people that are low-income necessarily. It’s just people that can benefit from the extra money, I assume. Another stat related to this is a third of them make over $75,000. It’s not always people who desperate for money. Is it just getting that step up? I talk to people sometimes with traditional jobs who feel like they can’t get ahead. They’re working, paying their bills but not really saving any money. Is this just a case where it gives them that extra little bit of cushion?

Jeff: Yeah, and I might be totally wrong in this but when I saw the stat of people making above $75,000 and still have side hustles, I thought to myself, imagine making $75,000 at a company. You’re right in that middle area where you’re more aware of the upside of this where some people at this same company are making $150,000 or $200,000. There are people out there running their own businesses making so much more. But these people that are making it at that $75,000 range have the awareness to know that there’s more out there for them. And I think that kind of makes them more excited to pursue those opportunities. Whereas, perhaps some people in the lower income ranges who do still have side hustles, it’s almost as if you become more exposed to that concept. The more money you make at a company, the more you see that there are other opportunities out there. And again, I might be way wrong on that. But when I first saw that stat, that’s what I was thinking. There definitely are probably multiple factors that go into it.

Tom: That makes sense. I could picture that. A lot of people who have office jobs and a little time to sneak in there and read blogs to get this extra information. But if you’re physically working, you don’t really have time to read a blog or get some e-mails. You don’t have time in your day to find out about some of these things that might exist. And again, if you’re an office worker, you probably have a little more energy left over by the end of the day where you can go do something else.

Jeff: You’re paid just enough to be satisfied but just little enough to know that there’s other things out there. I think that’s what really interests a lot of people in that group.

Tom: And another thing, too, like you said, if you’re in that $75,000 range, a lot of your raises are going to be one percent, two percent. You’re not going to get ahead too much year-to-year. But with a side hustle, you’re in control of your own destiny. At your job you might get $1,000 a year raise but at a side hustle you can decide to make more than $1,000 extra in a year, easily. Take $500 a month example. You’d be making an extra $6,000 a year with that. You’re not going to get a $6,000 raise in a year.

Jeff: Exactly. I think the idea of having a ceiling for your earnings is… Well, for me, that was one of the primary motivators—to find ways to make income outside of a job. I just hate the idea of being limited. Even if I do my job like the best of the best of the best at this company, I’m never getting paid more than X amount. To me, that’s just like the most suffocating feeling ever. Even if X amount is a great amount and plenty to live off of. I think that’s where understanding yourself and how you think, plays a big role in this. Some people are not necessarily motivated by money, but by making progress. And they would know that even if they’re making a great salary for 10 straight years, it doesn’t change. Some people are fine with that. But for others, it would drive them crazy. I’m one of those people where it would just drive me crazy to stay at the same point even if it’s a great point.

Tom: Yes, you want to keep seeing improvement every year, no matter where you’re at. And too, a lot of people in a corporate lifestyle only without a side hustle or anything, find security in that job. I’ve seen so many people (during my office time) that get laid off. Hundreds of people get laid off so it’s not as secure as people think. Sure, you can have your own side hustle, your own business and those can fail but it doesn’t make it necessarily less secure than a regular career job.

Jeff: Yeah, I think that is an uncomfortable truth a lot of people like to just ignore when they’re employed somewhere. Like you said, I’ve seen it myself. People just get laid off and often have nothing so it’s on to the job hunt. It can happen anyone. It doesn’t matter how much you’re getting paid or if a company has to cut costs. If they have to cut costs, they’re to cut you. That’s just how it is. All the more reason to diversify.

Tom: Well, exactly. That’s what I mean about feeling more secure. You shouldn’t put all your feelings of security into a career. You’ve got to have something even if it’s just a few hundred dollars a month. It will get you ahead in the meantime. You’re still paying off your debts or saving money for some kind of goal. But if the job ends, at least you’ve got this minimum amount of money you can kind of keep going on. Maybe you have an emergency fund as well, hopefully. This would just keep things flowing a little better because it may take you three months or more to find a job.

Jeff: Yeah, definitely. One thing I’ve always found is things sometimes take a lot longer than we think. Whether it is starting a business from scratch, which is a little bit more involved than just a side hustle. Or, like you said, finding a new job. It can take three, six months to find a new job that pays what you were making before. So it’s good to plan for those things. Right now, especially, with how uncertain everything is in the economy and the world, I think we’re going to be seeing a lot more layoffs and uncertainty everywhere. And I think a lot more people are going to see value in having a side hustle.

Tom: You set me up for a great Segway because speaking of what we’re dealing with right now, another thing was that people who replied to your survey had seen a decrease in income. This doesn’t surprise me, because if you’re an Uber driver who is used to driving people to the airport or work—that kind of stopped all at once. Do you have any thoughts on that? What is the negative side of side hustles? They are still kind of susceptible to the same issues that we’re dealing with right now.

Jeff: I actually see this as almost a positive because stats shows 23 percent of participants reported a decrease in side hustle income due to COVID-19. How many businesses do you think saw a decrease in income? Probably a lot more than 23 percent. I would argue 70 to 90 percent of businesses in some form or another, whether directly or indirectly, have seen loss of future income because their clients and prospects are not going to be in business because they’re not going to survive COVID in a year or so. So I actually look at this stat as only 23 percent of lost income. That’s just the reality of it. It just goes to show that no one is immune to a global pandemic wrecking the world economy. But that means if you have a side hustle, you’re so much more insulated. If your employer loses income, they may lose enough to fire you or lay you off, if you have that side hustle income, you’re still better off than having nothing. I choose to look at it through the positive lens of side hustles since it’s more directly in your control. To some extent, you can control the income that comes from it.

Tom: My problem with it is that I always default to Uber as one of my examples. But, if it’s a side hustle that’s completely online, you might have done better. My wife goes to some kind of exercise thing and without them being available in person for a few months, they took it online. People are finding that they can do things online that they couldn’t do before. If any of the side hustles we are talking about are online, they probably actually did better.

Jeff: Exactly. Even for something like Uber where your income would drop… Not that you would want to spread yourself thin with a dozen different side hustles. It’s almost like you don’t need a side hustle to your side hustle. That’s probably a little extreme but you need to be constantly looking at the break points in either your full-time income or your side hustle. You need to look at what could go wrong and how to protect against that. I’m sure that a year ago, Uber drivers probably didn’t anticipate losing the ability to drive for Uber for a couple of months, but it happened. You’ve always got to have a backup plan—something else you can do even if it’s just developing an interest in something on the side. For me, doing the real estate thing is not something I’m going to be doing anytime soon. But, if I can knock out five or 10 hours a month on my course, get the 60 hours done and take the test, I have something to fall back on and pursue if my business goes completely under—which I don’t think it will, but you never know what can happen.

Tom: Yeah. Yeah. You’re just protecting yourself. Just like we talked about diversifying. Even if you never use it, you have another potential income stream you can benefit from. And the idea of spreading too thin with different side hustles, I get that. But a lot of them are so easy to start. Obviously, there’s more “real world” side hustles like what you are doing. You’re actually taking a course. But a lot of these side hustles are simply an app you can turn on anytime. There’s not a huge barrier to get started. With some of these things, if it’s not working, you can go try something else.

Jeff: Exactly. That makes it so easy for you to find something you’re really interested in. I guess no one thinks they’re going to be interested in being an Uber driver, but if you start doing it and love talking to people in your car all day, that’s great. A lot of people do like that. There is nothing wrong with these apps having a low barrier to entry. Try them all at least for a little bit to see what you like. Uber is not going to care if you only drive with them for a week and then quit.

Tom: Yeah, and the idea of trying things is huge. At some point I need to do a blog post and actually detail all this, but I realized I was basically trying things online for about 10 years before the Maple Money Show (which was originally The Canadian Finance Blog). I had 10 years of online failures before 10 years of online success. If I actually listed all of those out, it would be pretty interesting. And that was when things were harder. Nowadays, there are so many options out there that it doesn’t have to be something you really have to start from scratch. You can just hop into all these different systems, platforms and apps to get something going.

Jeff: Yeah, it’s awesome. I think the side-gig economy is heading towards a really good place. It is going to give a lot of people a lot of opportunities if they choose to go after it.

Tom: Yes, more so now than ever. With all the issues we’ve had this year, I think people are seeing the benefits of things being online and not only trusting your full-time job. The last stat I wanted to cover was the one saying 18 percent of side hustlers want to go full-time. That seems a little low to me, but maybe it’s just the fact that they’re making less than $500 a month? Maybe those two go hand-in-hand?

Jeff: I think there are probably a few different ways to interpret that stat. If you’re driving for Uber, I don’t think many people probably want to do that full-time. But, let’s say you’re starting a blog and one day you want to put ads on it and make a few hundred dollars a month. It would be great if one day you could go full-time with that. I think a lot of people that currently work a full-time job might be turned off to the idea of side hustling because they think there is no way they can do something else on top of a full-time job. This stat of 18 percent goes to show that four out of five people don’t have any intention of going full-time with their side hustle. They just want to make that extra $500 a month to have extra spending money. And it’s okay to not want to build a business from scratch. It’s okay to just have one or two freelance writing clients a month to make a few bucks. If you’re happy doing that, have a great work-life balance and you’re doing something you love—there’s nothing wrong with keeping it as a side hustle. I think that’s an important thing for people understand.

Tom: And all these side hustlers are so much more under your control now. Before all of this existed, if you wanted a little bit of extra income you would do something like deliver pizzas. People with legit jobs were delivering pizzas on the side. But with that you’re likely to have a set schedule. It’s not as simple as freelance writing when you want or turning on the Uber app. You used to have to schedule your life around a second job. I could see it being a lot harder back then.

Jeff: In a lot of ways, I think we have it so much easier than any other generation. It’s not even close. I just hope that more people can see that and take advantage of it because there’s a lot of opportunity out there.

Tom: Exactly. Can you let people know where they can find you online?

Jeff: Yes. I am at dollarsprout.com on Facebook, Twitter, Instagram. Follow us there. Shoot me an email at [email protected] if you have any questions or thoughts on the podcast.

Tom: Great, thanks for being on the show.

Jeff: Thanks, Tom. I appreciate it.

Thanks, Jeff, for showing us these interesting findings on side hustles. As you mentioned on the show, never before has there been so much opportunity for people to take control of their finances. A side hustle is one of the best ways to do that. You’ll find the show notes for this episode at maplemoney.com/108. Lately, I’ve been adding videos from past episodes on our YouTube channel. If you’re interested, you can check them out at maplemoney.com/youtube. Thanks for listening and we’ll see you back here next week.

We underestimate how much of a difference three or four hundred dollars a month can make for budgeting…that would be like my cable bill, my phone bill, and a week of groceries paid for every month. If that just requires a few hours a week working on something I enjoy, that’s like a no brainer - Jeff ProctorClick to Tweet

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