This guide outlines five great second income ideas for side businesses, plus strategic approaches to earning passive income on the side, including the advantages and disadvantages.
These days with inflation outstripping earnings for the last decade it’s become more and more common for people to hold down several jobs or have a side income to help make ends meet or to pay for some of life’s little luxuries.
We all depend on our income. Everyone needs money or other goods that they can exchange for goods and services. However, most people only have one job and often only one source of income. This means that their entire standard of living is hanging by a single thread. If the job is lost, 100% of the income is lost. Nobody can cope with that so easily.
5 second income ideas
Here are five ideas of excellent second income ideas for businesses you can easily set up to work around a normal full time job.
Teaching or tutoring
If you have a degree in a subject or a postgraduate qualification then it is possible you can offer some tutoring to students in your subject area, or you can do that online with the help of tutoring sites like Preply. If you are a qualified teacher then you can even offer qualified tuition to school children. This is a great way to make a decent hourly rate and can be done on a very limited basis if you don’t have too much time to give so it’s still worthwhile as one of the top second income ideas.
Dog walking or pet sitting
These days not every pet owner has the luxury of being able to get home in the middle of the day to walk the dog or even in the evening sometimes. If you have a large enough property then you can always consider one of the best second income ideas to be pet sitting as a way of making money, this way you can combine your love of animals with making money and you can even gain tax relief as claiming part of your residence as a business expense.
Buy to let property
If you have a good credit rating and enough money for a decent deposit, then it’s a good idea to consider making a second income as a landlord renting out property. It’s relatively simple to find out what kind of ‘buy to let’ mortgage you would be eligible for, using this easy online calculator giving you an idea of what you can get. Be sure to research how much the landlord’s insurance will cost you and when making your calculations consider that if your property lies empty for periods of time then you will still be liable for mortgage repayments.
Online retail
You could set up an online retail side-business and sell a whole range of things online, both products and services in this popular one of the top second income ideas. Many people have an art or crafts skills and can sell art-work, home-made toys or cards and stationary. This kind of business can run via your own website or a combination of this and eBay or Amazon Marketplace. You can scale this kind of income to be as much or as little as the customers demand is.
Design or writing services
If you know how, you can offer design skills or even content writing for other businesses as one of the most creative second income ideas. There are many ways to do this, freelance or through an agency. There are always businesses looking to out-source their content writing and if you can show examples of how you write, keep a portfolio then you can make a very lucrative side income in this line of work and fit it around your current schedule very easily.
Passive income
As a financially savvy reader, you know that diversification is extremely important when investing in order to protect yourself from total failure. And of course this also applies in other areas of life. However, when it comes to second income ideas, most people do not think about it.
How do you diversify sources of income?
Multiple sources of income sound all well and good in theory. But how am I supposed to receive additional income as an employee? I can’t work half time and for two employers. And working more than 40 hours a week is impractical and extremely unhealthy in the long run. It looks a little better as a self-employed person: You can work for several clients and thus have many different sources of income. So passive sources of income are also a solution. This is why passive income should also be considered among the second income ideas
Benefits of passive second income ideas
The thoughts in the previous section show that passive sources of income are in principle the only way to a good diversification / protection of income. This has a number of advantages:
Retirement provision
The word should have got around by now that after retirement without further provision there is a huge gap between the last salary and the expected pension. The more interest-based or system-based passive income you could generate up to retirement, or the more the sources still gush after retirement, the less you have to restrict your accustomed standard of living.
Flexibility and free time
Let’s talk about something nice: the more of your costs you can cover without having to work, the more flexible you are. You can work less, no longer work at all or simply use your manpower for other goals and projects.
Perhaps you are thinking about a career change or self-employment? This is of course much easier when the pressure of the monthly fixed costs is as low as possible.
Scalability
Last but not least: active income can only be scaled very poorly or not at all. As a software developer, I can develop the best software and work so hard and a lot. At some point my capacity will be exhausted and the maximum hourly rate will be exhausted. Of course, exactly the same applies to bricklayers, roofers and financial advisors.
Passive sources of income (especially system-based ones) can be a way to decouple working hours and income. These sources initially require hard work and a lot of time, but once they work, you can reduce your own working hours and tackle new projects (the next source).
This makes it possible, at least in theory, to earn a significantly higher income than with the practice of the profession.
Disadvantages of passive sources of income
To be honest, it wasn’t that easy for me to find any real disadvantages. For the sake of completeness, however, I am listing the aspects that could potentially be disadvantageous.
Social acceptance
At best, one is labeled as lazy or anti-social, as one strives to get money even without work . It takes a lot of time and patience to explain to some people why this plan is by no means immoral and that this is not just a pipe dream but a mathematically plausible and realistic way of life. Passive income is something completely different from what many people (including myself) know from their social circles.
Compatibility with the current job
Assuming you don’t want to quit your job right away but just build another pillar with passive second income ideas, this can lead to conflicts with your employer. This is especially true for system-based approaches that may even be based on your job-related know-how. Then your employer can fear a conflict of interest and force you to make a decision.
As long as your job doesn’t suffer as a result, you can sell your boss this income as positive for the company: You are less dependent on your salary and therefore don’t need a raise. In addition, you work there not (only) because of the money but out of conviction. A good boss should rate this as positive.
Hard work
Building with passive second income ideas takes a lot of time, labor, and sometimes money. Especially if you work on a passive source in addition to your normal job, it can happen that your private and social life suffers because you use your “free time” to generate additional income.
