The home-based side hustle benefits are amazing.
Read this post to discover why you should.
It is truly amazing that side hustle is now a thing. After all, a few decades ago, no writer would’ve considered using “hustle” in a ad copy or an article.
Why? Well, somehow, the word hustle became an abbreviation for something that is nasty, and was described as; “being hustled!”
Back then, for many, this word dredged-up thoughts of “being ripped off!”
I mean, with such a negative connotation, can you blame copy writers from avoiding its’ use?
Even though “hustling down to first base,” and other slang uses, meant generating lots of sales or putting in great effort, both of which are admirable, that perception made the word nearly useless.
That is, until recently.
Today, all major online media websites have posts containing side hustle in the blog title. And, for this content creator, the juxtaposition is both weird and welcomed.
Why? Because I’ve always had the Pete Rose vision of hustle. To me the word means max effort or “Charlie Hustle” and in no way should it be connected to “being ripped off.”
In case you didn’t know, maybe because you grew up after side hustle was a thing or came to the U.S. or Canada from another continent, I suggest you do a Google search on the meaning of hustle. There are respectable definitions, like being busy and active, which is inspiring, but that is not all there is.
In the same listing as the meaning above, was an optional or informal meaning—more commonly known to North Americans; “to swindle!”
Aside from my view of “hustle” being a “max effort” thing, the “weird” part is the undeserved, North American connotation, albeit of the past. After all, blogging, vlogging, e-commerce or other home businesses are common and legit.
So, can you do your side hustle from home? Yes.
Not only can you operate a part time business at home, there’s also an amazing and profound reason why you should.
In the U.S. and Canada (and, likely, many more countries), the Government will ‘pay’ anyone to start a part time business — the very definition of a side hustle — that is home based.
The catch? They have to already have income when they start their side hustle.
Now, I know the Government paying you might sound odd but it is absolutely true, though I am not using the word “pay” literally. It is not like the U.S. or Canadian Governments would advertise; “We will pay you to start a part time home based business,” or something similar to that. Not at all.
However, if you start a home business, like other businesses, you are entitled to various deductions. Unlike other businesses, some of the “write offs” applicable to side hustles, especially those that are home based, can be applied to any exiting income.
These home office write offs or home office tax deductions, and other deductions, end up being truly brilliant, as you will see.
As long as you have income from another source that you pay taxes on (under the table doesn’t apply) or have taxes deducted from (like W2 employees in the U.S. and T4 in Canada), you can claim your home office tax deductions and other side hustle expenses from that job income.
That didn’t sound exciting, did it? Wait for it!
It’s highly likely, for any side hustle based, that at the largest expense anyone will deduct from existing job income would be fall into the home office tax deductions category. Because rent or mortgage payments are significant.
Again, these expenses are applied against job income to reduce than employees taxable income, for expenses we all have anyway!
I mean, you are going to pay your rent or mortgage regardless of whether you have a side hustle, right?
Imagine you had rent or mortgage payments of $24,000 per year and you could say you use one-sixth of your residence for business. That would mean a $4000 tax deduction. Meaning you would not pay tax on $4000 of your day-job income.
Why? Because you paid the rent at home and opened a part time business. And, that business does not need to have made you one dime (yet)!
Of course, literally, you would pay those taxes, usually “at source” (deducted from each check) and then get them back later on. But stay with me.
Now, imagine there’s no start-up cost for your home business. That would mean that, that tax paid for whatever deductions you can apply to your taxable day-job income, would be returned to you, in the form of a tax rebate. One that goes straight back in your pocket.
So, home office write offs means that, for a change, the Government owes you money. LOL.
Yes, you should do your side hustle from home. Because it makes dollars and sense, even before you make a cent of part time income!
Now imagine someone in the 30% tax bracket with that $4000 deduction. Though this explanation is a tad oversimplified, they would receive a $1200 tax rebate.
In the same scenario, if we replace 30% with 42% — obviously this is an individual with a higher income — the rebate becomes $1680. And, in the 25% tax bracket, it would be $1000.
I like to think of the home office write off as the Government renting your extra bedroom, or some other part of your house, for $1000 to $1680 a year, just because you started a side hustle.
Better still, not only is the Government sort of paying you rent, in the form of a tax rebate, you also get to use that space yourself too!
Now that you’ve getting it, but there’s more.
You also get write offs including but not limited to part of your mobile phone, Internet connection, heat, electricity, and even home repairs!
When you add up all your write-offs, it is reasonable for that total to even be as much as $10,000. And any tax you paid on that full-time job income is now owed back to you, even before your side hustle makes you even a dime.
This is the point where I say, if that was only $5000, would you really be mad at me? I mean, 30% of this amount is $1500. A nice sum to get for simply deciding to open a part time business.
Okay, I like saving money but not as much as making it, so would it be okay to get on with what you can do to make money. What side hustle will you chose?
Remember, the home business start-up cost can be little or nothing, if chose your side hustle idea carefully. In fact, I propose you do decide to do something that comes with a start up cost of $100 or less, with less being better.
Personally, I introduce people to a free start-up option. Because the lower the entry cost the more of the tax rebate you pocket. And better that than giving it to someone else in a round about way!
If you are reading between the lines, what I am saying is; you are guaranteed to be ahead financially in the first year . . . IF you don’t lose your mind and buy into a relatively expensive business!
If you must chose a business with a buy-in cost, chose one that costs no more than $100. Why this limit? Because, as an expert in part time businesses or side hustles, I know that consumer protection laws are written a certain way, as they should be.
Someone trying to sell you on the idea that IF you invest more you can make more, as it is not true and quite likely illegal too. That IS a swindler in action!
As a matter of fact, the Business Opportunity Rule that the Federal Trade Commission (FTC) put into place in 2013 forces any business opportunity of $500 or more to send prospective buyers a bunch of disclosures at least 30 days before you spend your money. And, in some U.S. States, that amount is only $200!
Put another way, my experience has taught me that most direct selling businesses do not require an investment to be viable or for participants to earn a solid side hustle income. So, please, don’t get sucked in.
You might think of something like driving part time for Uber or Lyft as a side hustle and it is, but . . . and this is a big but . . . you lose the home office deduction. And, though you gain a car deduction, you also get a gift with that, which is in the form of expensive car repairs and the need to replace your car sooner!
Home office deductions are different. You do not incur additional costs, instead you can deduct expenses you already have.
“You do not incur additional costs, instead you can deduct expenses you already have!”
Like I already said, you are going to pay rent or a mortgage anyway and though you can say that about car payments, you cannot say that about mileage, which is also described as wear and tear.
Just to touch on the home office deductions, I have seen this deduction be enough to qualify someone for a mortgage all by itself, which is interesting.
The point is, while you look for what entices you in terms of side hustle ideas, stay away from traps that cause problems, like wearing out a car or getting caught up in a fear-of-loss pitch that is designed to pry a larger investment out of you. Just keep your eye on the prize.
What is the prize? More money, what else?
My favorite side hustles include any business that benefits from building a list. From bricks and mortar options, like cutting hair, to Blogging or Vlogging, and Social Media businesses. Any way to get a following and/or customer list.
I caution you, though, as there is another trap here.
It is tough enough to get a business off the ground. Don’t make it tougher by not having a repeat income, like customers who come back regularly or a consumable product that you earn monthly income from.
Yes, eyeballs on a YouTube channel or ears on a podcast, also pay regularly.
My suggestion does not mean you need to make and ship something every month, because that does require a sizable investment and, with that outlay, more risk. What I mean is; get the “profit” from repeat orders, without the risk.
Now, said that way, you can see that social media followers qualify. Don’t they?
However, the trap of any social media type business, from Blogging to YouTube channels, is thinking that “monetization” is the main income source. It’s not.
So, that is a regular income source but, there’s a lot more still on the table.
Since another easy source of income exists, that is available to anyone who develops any type of customer influence, either online or off-line, AND since I teach real world marketing, that source is in my sweet spot or wheelhouse.
What is the one thing that way over 90% of people need? And, this question does not just apply to social media followers, it is just as relevant to customers of hair cutting services or a list of wanna-be real estate investors as it does blog followers.
In one word, they need to survive.
If you start thinking they need to be happy, you are right, but you can’t go there before you have survival taken care of, can you?
As I write this I can’t help but think about the story of the guy in a remote village that survives by fishing every morning. By the afternoon, he’s done for the day. And his family eats very well, so is this success?
This parable for providing well and having less stress in one’s life, is success, for sure. But, what if you could do the same in any business?
We can’t be like the 3rd world fisherman because of reality, like the need to pay taxes and rent or mortgage expenses, meaning our overhead is exponentially higher than the aforementioned fisherman. But, that aside, we can have a better life!
Look at me. Toronto is one of the more expensive cities to live in. Even a one-story house, with barely any yard, in the area we live in, is worth over a “mil” and comes with a hefty property tax bill.
Back to another way you can profit. Look at Justin Rhodes, who’s YouTube channel racked up 190 million video views at the time of this writing. He is starting to really get it.
Customers, fans and followers buy what you don’t sell. And, if you serve them well, you have influence over them, which means you can refer them to buy other stuff.
No, I do not mean a link to farm equipment in a video, like Justin does. The online gurus know about affiliate marketing profits, but what don’t they know about?
Justin Rhodes just sold thousands of copies of a book by his mentor, Joel Salatin. Not only that, he sold them before they were even printed!
You can sell your own stuff, like a how-to manual. My version of this is a marketing manual, called The Free Cheese Secret™. Justin has created a few of them and has many multiple streams of income, known to mast marketers as the back-end.
Most YouTube creators at best have their income from YouTube and Patreon. Some have merch. A few create their own knowledge based products. Fewer still sell the products of others.
Almost all, including Justin, are missing what I call The Extra Income Sale™. And, as long as the offer and follow up are classy, so the influencer or bricks and mortar business owner are not embarrassed by what happens, this is an outstanding source of income.
It’s a back end marketing profit center. And it takes no time to fulfill, no time at all.
So, as you build customers, fans or followers, think outside the box or deny people what they need most; more money (this is another post I made recently).
For influencers, Income and donations are two sources of income. If you have time, creating and selling your own product is another. Selling a product, by created another influencer in your industry (aka Rhodes selling Salatin’s book), is yet another. And offering them the more money option.
You do not need to become an authority in side hustles to sell how to products on that topic.
If you look at Justin again, he could create a course on side hustles, outside of homesteading products he already offers but does he have the time? I doubt it.
Please read The Free Cheese Secret™ before you start a side hustle or, if you have already, right now. It will bring into focus where the real money is made.