The Retirement Newsletter: Hobbies v. Side-hustles
Issue Number: -97 — When is a hobby a side-hustle?
Welcome
Welcome to issue -97: hobbies versus side-hustles.
Last week, in Issue -98: Balancing the books — other income streams, I wrote about balancing the books and other income streams. And, I mentioned side-hustles as a way of balancing the books. But, what is a side-hustle? Is it a hobby?
OK, look at the wonderful photo by Margarida Afonso at the top of this post. It makes you think of knitting. Is knitting a hobby or a side-hustle? Is taking that photo a side-hustle or a hobby? To me, the answer can be yes to all those questions.
For me, side-hustles and hobbies are what keep me sane — a little something on top of my day job that I do for enjoyment and pleasure. Whether it is a side-hustle depends on whether I am losing money or making money.
Side-hustles and hobbies
I read somewhere that the average retiree needs at least three hobbies to fill their time. I have no idea whether that is true or not. Let me know what you think below.
As I said above, side-hustles and hobbies are essential as they keep me sane. And when I retire, I am expecting my side-hustles and hobbies to become more prominent in my life for two reasons:
It is critical to maintain interests and keep your brain active when you retire, and this is supported by research. Plus, I want to avoid becoming a TV Zombie.
Side-hustles have the potential to make money, so I could enhance my level of retirement and get my hobby for free.
So, when is it a hobby, and when is it a side-hustle?
What is a hobby?
For me, a hobby is something you do that is not aimed at making money. A hobby has a negative impact on your bank balance. That is, you spend time or money to do your hobby.
However, you can flip your hobby, so it becomes a side-hustle, and you get to make money doing something you enjoy. Getting paid for something you would do free? Sounds ideal!
Side-hustles
A side-hustle can be pretty much anything that makes you money. And there are two types of side-hustles — passive, and I guess the other must be non-passive (would that make it active?).
Passive side-hustles
Passive side-hustles are what everyone seems to crave and write about — the magical, mystical money-making machine.
The idea with a passive side-hustle is you set something up (so there is some activity and initial work), and then magically, money keeps flowing into your bank account with no extra work or input from you.
Passive side-hustles sound ideal. Free money! But is that what you want from a side-hustle? Yes, the money would be nice, but you don't have the activity to keep your brain ticking over. And if your side-hustle was a hobby that you enjoyed, then why would you want to stop doing it?
You could have a passive side-hustle that does keep you active and on which prior activity still produces income. An example of this could be writing. You write something, for example, a blog post or an online course. You then leave the work to make money and move on to something new. A sort of write once, sell many. Writing and selling software would also be a good example.
With a passive side-hustle, there may still be a need to promote and advertise your product. The days of 'build it, and they will come' are long gone.
Active side-hustles
An active side-hustle is something you have to keep working at to produce an income.
An example of an active side-hustle could be something like painting. You paint a picture, sell it (once), and paint another. Or, you knit a jumper and sell it once, and then knit another.
You could make your 'active' side-hustle passive by creating a course about painting or knitting. You record the course once and then sell it many times. You sell your expertise and not the product.
You could argue that active side-hustles are better in retirement, as they keep you busy and keep your brain ticking over. Plus, if it is a hobby, it is fun!
Summary
So, what is it to be? Hobby or a side-hustle? Well, as I discussed last week — Balancing the books — other income streams — it all depends on the sort of retirement you want and currently have.
If you are on an 'Essentials' retirement, you may not be able to afford a hobby. You may need to convert your hobby to a side-hustle, so you can have your hobby and also boost your income into a 'Moderate' retirement.
If you are already in the 'Moderate' zone, then you can afford hobbies, but it might be fun to make a bit of extra cash on the side for little treats and luxuries.
The choice is yours. Whatever you decide, good luck with it.
Nostalgia corner
I'm still enjoying BritBox. I have just finished the now politically incorrect 'Allo 'Allo!, and I have started on the BBC TV 1981 version of the Hitchhiker's Guide to the Galaxy. Wow, the ‘special effects’ in Hitchhiker’s are bad.
Useful links
UK Government Website:
Next week
Next week it is issue number -97 — spring is here and my thoughts turn to my health.
Thanks
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Until next time,
Nick
PS, If you have something you would like to contribute to the newsletter — a story, advice, anything — please get in touch.
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