Side hustles are growing in popularity as many people look for new ways to earn extra money, but one expert has warned there are pitfalls to avoid.
According to Associate Professor Simone Scagnelli, from Edith Cowan University’s School of Business and Law, the most important thing is to choose a hobby you love.
“I would say probably people should start easy, meaning do something they like … or they might be good at, because if it doesn’t take off, you’re still OK because it’s about the value of your time,” he told NCA NewsWire.
“It’s not your primary thing, of course, it’s a side. So even if it goes wrong, you might look at it as a learning opportunity that can improve yourself.”
If your side hustle starts to pick up, he warned you might have some costs involved, such as advertising and tax implications.
“If this really takes off as a business, you will need to do some paperwork to deal with bureaucracy,” he said.
“You will have to register as a business, you will have to keep records – accounting records and bookkeeping.
“There will be some implications in terms of income taxes, as well as potentially capital gains tax.”
But for those willing to put in the effort, a side hustle can be lucrative and even become a new main source of income.
Sydney-based Melissa Howard has managed to pay for her wedding and honeymoon in the Maldives thanks to her wardrobe by renting out her designer dresses.
She has made more than $20,000 sharing her frocks on peer-to-peer dress sharing platform The Volte.
While some of the dresses were very expensive, such as a Rachel Gilbert design which cost $1250, Ms Howard said it had already paid for itself twice over because it was regularly rented.
She now has more than 15 dresses, including ones from Zimmerman and Aje, and sends them across Australia for up to $550.
Ms Howard has done so well, she has now left her job in retail.
The Volte co-founder Bernadette Olivier said the platform was seeing a massive growth as more people became used to sharing instead of owning dresses.
“This highlights how consumers now see fashion as an investment rather than as disposable,” she said.
“This has the potential to dramatically disrupt the $3 trillion fast fashion industry.
“There’s this realisation that you can buy that Zimmermann dress and it pays itself off, so that dress can easily become cost-neutral, or an investment making money.”
There are a raft of other ways people are looking to make extra cash.
Melbourne-based university student Issy and her mum Kristen have earned $5874 since listing Issy’s car on peer-to-peer car sharing platform Car Next Door in November 2021.
“When I moved out of home last year, I couldn’t afford to keep my car due to increased living expenses and planned on selling it until my mum recommended I try Car Next Door,” Issy said.
“She helped me set up my car on the app and now I’m still able to use my car whenever I need it, but also am able make extra income off it each month.”
The money earned is going straight towards Issy’s first home deposit.
There has been a 148 per cent increase in cars listed on the platform compared to the same time last year, and since its inception in 2012, Car Next Door has paid more than $60m to car owners in Australia.
“We are seeing a huge spike in car listings on Car Next Door, which is no surprise given the increasing cost of living and people’s desire to not have to sacrifice the things they want and love – like holidays and entertainment,” Founder Will Davies said.
“Savvy Aussies are effectively supplementing their income by renting their car out on the platform, which is great for their pocket, and great for borrowers who want to avoid the financial and environmental cost of car ownership.”
According to the Australian Bureau of Statistics, nearly 48 per cent of Australians either have or are planning to start a side hustle.