Side Hustles for Debt: What to Know First

Hey, you’re back with Get Out of Debt Guy, the old original authentic Get Out of Debt Guy, and the new Get Out of Debt Guy, Damon Day. Say hello, Damon.

Hey, guys.

Today, we’re going to be talking about side hustles and about how it can restore your finances, bring you extra money, or will it dig you deeper in debt?

Damon, this is a topic that it’s a difficult topic because on one hand, if somehow you could just push people out of their comfort zone, they would find a lot of extra money right now with side hustles. But if you are someone who gets stuck in that paralysis of analysis, or I have known plenty of people in my life that love to plan, but never execute, a side hustle can just be a money trap. You agree?

Yeah, and that’s why we’re doing the topic today. We’re combining debt with side hustles, two things that we talk about quite often on this program, and I came across that idea the other day, and I went, huh, it’s actually a very big topic because I get a lot of clients that need help with getting rid of debt that got into debt because they try to get out of debt starting a side hustle and just ended up deeper in debt. So they go together sometimes in a good way, and sometimes they go together and they crash and burn.

Well, before I forget, let me tell people how they can reach you and communicate with you and get you through your website, DamonDay.com, and you could set up a free consult with Damon and, you know, ratchet jaw with him and get some ideas on all this stuff about how to get out of debt and maybe even how to get out of debt using a side hustle without falling into one of these traps.

Now, Damon, let’s talk why side hustles have become so popular. What do you think?

Because people need more money, everything costs more.

Well, that’s true. Life is getting more and more expensive. So side hustles are really going mainstream. I mean, that’s the people just can’t make ends meet. It used to be the spouse would go to work, right? We would have the one-income family and things were great and bought a house and bought a car and came back from the war and everything was good. And then, you know, prices started creeping up and things started getting more and more expensive. And it’s like, hey, we can’t survive on this one income. We need another income. And then that’s when a lot of the spouses that were traditionally not working went into the workforce and then everybody had this two incomes. And then the households that only had one income were really struggling because they only had one. So they got one, they only had one income and everybody else had two. So it was pushing the prices up. And then now we’re just at a point where two incomes are just not enough.

So, I mean, getting a side hustle is probably a smarter idea than trying to get into a thrupple, I would assume, for income.

Yeah, we’re not bringing you in for sex. We’re bringing you in for your paycheck.

Yeah, I’ve seen that on a couple of reality shows, which is the PG version?

Oh, okay. So is the paycheck version?

It was, yeah, it was the paycheck version.

Okay. Well, you know, there’s that’s that you think about all the people that decided they would bring in a roommate, you know, to help offset expenses. So I guess that’s just a version of that.

Yeah.

Now, the other reason that side hustles have become so popular, I think, is not only desperation to try to make ends meet, but also, you know, all the marketing and all the messages people are getting, especially Damon. If you’re on social media and you even had one neuron fire off, what about side hustles, you are just going to be inundated with marketing messages. Social media just blasts what you want, right? So they get figures out what you’re interested in in that moment and everybody knows this, right? If you do one search, or like you said, one silent, what you thought was a private thought about something, all of a sudden, you know, Facebook’s like, hey, here’s an idea. And you’re like, how the hell did Facebook know that I had a dream about that last night?

It’s like we used to have a dog that I always teased because she would start to bark before the kid down the street thought about riding his bike.

Well, so yeah, you get inundated with these messages and the marketing see, it’s the same old thing in life, man, if it seems too good to be true. On my true crime podcast, TrueCrimeUnheard.com. I just did a giant podcast about how people can be easily manipulated by marketers who have spent a lot of time thinking about how to manipulate them.

Yeah, and then they get sucked in because it sounds so good out of desperation.

So there are a bunch of different side hustles, you know, from I’m actually looking through Damon’s outline right here. So there are a bunch of different side hustles and a bunch of it actually there are two, the bunch of different side hustles that you can do and some of them involve having to buy something like use your car or maybe buy a car, but I would like to talk first about the courses that people, you know, I’m in a disadvantage here, I got to be honest because I don’t surf any social media. I’m not on Facebook, I don’t surf, I don’t spend one minute a day, surfing social media. So Damon stays on, stays on MySpace.

I know Tom.

He’s your friend, he’s my friend, he’s my first and only friend on MySpace.

So the years are going like, what’s MySpace and who’s Tom?

Even my millennials are confused at these old farts.

So Damon, you spend more time, let’s just use Facebook. So do you, what marketing messages do you see for side hustles? Do you see any for like Uber or?

I am hooked to the book.

I just came up with that.

I hadn’t heard it. That’s a good one.

That’s like tasting like some affordability.

I already forgot about that one. We have such good gems. You have to subscribe if you don’t subscribe.

I’m hooked to the book.

So yeah, I mean, I see when I’m looking through Facebook, I see everything that I want to see. It’s anything that I’m interested in, watch YouTube videos on or anything like that. So I see all kinds of side hustle stuff because I’m like, wait, weirdly way into that. I’ve always been into, even as a kid, it was selling gumball machines. You know, when I was in grade school and I’ve always been like, how do I make money? How do I make money?

So yeah, you see all of that stuff and there’s gurus everywhere. Everybody’s, everybody wants to sell you a course or teach you this or teach you that. And there’s really, I put the side hustles in two main categories. You’ve kind of alluded to this earlier.

But there’s the type of side hustles where you’re just like, I’m a little bit short every month. I need a little extra money. You’re not starting a business or anything like that. You just, hey, I need to trade some time for money so I can get some bills paid. And that’s like an Uber and Lyft and DoorDash Instacart. That’s where the thing where you’re—

If you got a car, you can do it.

Yeah, you’re not starting a business investing a whole bunch of money. Now, you can invest some money. We’ll talk about that in a second.

But then you’ve got the other camp and that’s where a lot of these gurus come in. You don’t have a whole bunch of these gurus pitching courses on Uber and Lyft. Although there are some, you know, it’s pretty basic. You know, you got your phone, you got your car, you just download the app. You go to work and you figure it out. You don’t need, you know, to be investing all this money trying to figure it out.

But then on the other side, that’s where all the gurus come in, the mentors, the courses, the do it for you guys. Those are my favorite ones to hate. The ones that, oh, if you just give us $10,000, we’re going to do it all for you. Build this website. You sit there and rake in the cash. That’s all bullshit. You’re not going to sit there and rake in the cash.

Let’s talk about the Amazon FBA and drop shipping side hustle. You hear so much about it.

I got to rein you back in a little bit.

Come on.

No, because I want to follow that up with this one where people are selling older people. You know, people are selling older people. We will build your Amazon store for you, you know.

So first, let’s talk about Amazon FBA and getting into it.

I want to say, Steve has got some legit Amazon FBA bona fides, as I like to say.

Steve made some decent cash in our side hustle penny stupid project in Amazon FBA. And I will tell you, I started doing it with him under his guidance. And I would have crashed and burned and wasted a lot of money. If it wasn’t for him, telling me step by step. And even with that, I was like, yeah, I don’t even like this. It sucks.

Yeah, it’s mind bending.

But I could see how people could easily get sucked into it on those big promises and not have the results that Steve had. So I just wanted to lay the foundation that Steve knows his crap when it comes to Amazon FBA. He’s made quite a bit of money selling stuff.

That’s true. But so let me tell you what my approach was. When I started testing the side hustle of Amazon FBA, I intentionally did not go out and buy any course. I didn’t watch any videos. I didn’t sign up for any mastermind or anything else. Because I thought, if I’m going to be able to do this, I’m just going to have to learn what the facts are and what the basics are.

And so I spent the first two or three months just researching, just reading all the Amazon documentation, just figuring each step out what I would need to do next. And it was a lot of four steps forward and five steps back until even the early days were rough. Man, I learned a whole bunch of lessons.

And now I’m actually sitting here recording this in my mail room. We converted one of our garages into a mail room to deal with it. And now, within a year, we outgrew that. I now have everything going to a warehouse and processed by somebody else.

But I strongly feel if I had purchased any of those courses and based on my experience, trying to teach you and other people, other friends that I know, none who have continued, by the way.

Exactly.

Unless you are motivated to learn whatever the opportunity is, I strongly think you’re going to fail.

Well, I remember when we first started that, remember I started driving Lyft. That was the experiment I was going to do, getting the car and drive people around and you started at the FBA.

Yeah, and you had the same drive to figure that out?

Yeah, because I was into that. It was fun for me. The FBA was watching paint dry for me. I hated it. It was so boring. But my point was, I remember when we first started, I went out my first month driving Lyft. I made over $5,000. And Steve made nothing because he was just in learn mode. And I was like, hey, I got the good side hustle to try out. You got the sucky one. You’re spending all this time staring at a computer. I’m out meeting people, driving around, making money, which I was actually blown away that first month. How much money I made driving Lyft. That was like some legitimate side hustle money. But then, and then like the second month, I’m still cranking it. Steve made like 300 bucks or something. You have to go back and watch our old videos. But for the first three months, I was like, dude, you got screwed in this deal. You’re doing this crappy side hustle. But then like month three or four, all of a sudden, it’s like, I made a thousand. And then it’s like, well, I had a $20,000 month. And I was like, you had a what?

You know, but Steve had that personality. So that’s another thing. If you’re looking at a side hustle, I don’t want to, I don’t want to discourage anybody. I’m not saying you should never buy a course or anything like that because sometimes it can shortcut your learning. But you have to be extremely careful on looking at how much it’s going to cost and what return you’re really going to get out of it.

And also, it’s very important. Make sure you have the aptitude, like you know, you have to do some inner soul searching here. Make sure you have the aptitude to likely be successful at whatever venture you’re going for before you start investing some money at it. Because Steve has the aptitude to be successful at something like an FBA. I do not. I’ll admit that. That’s not my bag. And that’s okay. You know, I have other things that I’m successful at.

Yeah, I would say that with FBA, this might be counterintuitive. Whether it’s FBA or selling on Walmart or eBay even, the secret is not the selling. The secret is how to interpret numbers. Right. Every sale has to do with math. And unless you’re comfortable really developing a process or digging into it, I mean, I’ve written so much code. And I’ve had code written for me to help find the winners. And in fact, right now, I’m writing a whole new set of software for the warehouse to use to process my stuff. So that might not be what everybody is comfortable with doing.

Now, once I got going with FBA, make no mistake that I have watched a lot of YouTube videos about FBA. And based on what I knew and what my experience was, in watching those videos, yeah, I would watch like a 30 minute video and get one idea out of it. But, you know, one idea that was based on reality, not a promise.

So that’s what made it different. I would not suggest anybody get into FBA.

Well, and I think like for someone like me, I was in the office staring at numbers, dealing with creditors, debts, that’s what I did all day. Right. And so for me, it’s like, do I want to do a side hustle that’s just more in the office, more staring at the computer, more looking at numbers? That’s why I think I really gravitated to, oh, this Lyft, an Uber thing. I can get out of the office. I could go, I mean, I work from home. I’m here all the time, right? It’s like, I got to get out of the office, go meet new people, you know, go try and strategize how I can figure out ways to make money. And to me, that was kind of, I looked forward to it, which is kind of oddly weird. I was like, oh, oh, five o’clock. I’m going to go drive, see, I’m out, you know, but I did not look forward to FBA looking at spreadsheets of products and, you know, trying to figure out all that stuff that Steve did. And if I would have said, you know, saw these ads and went, oh, I can make a whole bunch of money just by the course. Yeah, buy the, buy the course. And that’s the thing. You know, you could easily invest. And I have clients that invested thousands and thousands of dollars to try to learn all this stuff. And it never made any money not to say that you can’t, but it’s very easy to end up 10, 20, 30, 50 thousand dollars in debt trying to chase these side hustles. So you really have to focus too on what, what is my goal here? Is my goal to start a business that’s eventually going to get me out of my job? Or is my goal just, I got to pay the rent next month, right? And so you, you need to, if you need to pay the rent next month, you don’t want to get into a business where you have to invest money and, and this guy’s going to create this website for you and you’re going to get customers, that’s not going to pay the rent next month. You know.

But let’s talk about that because you’ve had so many clients who paid $5, 8, $10,000 to somebody that sold them, you can make money selling on Amazon. We’re going to build you your own store and you’re going to do great. I think I’m almost 100% confident that every one of those people failed.

I’d like to tell you I got a success story.

Do you?

I’d like to tell you that. I can’t think of one.

And, you know, I’m a pretty optimistic guy, but you know, after doing this over 20 years, when I’m talking to somebody and they’re struggling and they’re in debt and I hear, oh, but I’ve got, I’ve got a side hustle, I’ve got a business I’m starting. And I go, okay, yeah, what are you doing? Oh, well, I’ve got this guy and he’s building this website and I just go, and I don’t want to poo poo it, right? Right. But maybe this will be different. But I’m just like, yeah, all right, let’s, you know, let’s, let’s put pause on that. What exactly do they promise you? What exactly are they going to do? How much money are you having to pay? And I always come back to this, especially on these, we’re going to do it for you guys. Oh, yeah. If they’re going to do all the work, yeah, it’s going to make all this money and they’re building all this stuff. And you don’t have to do anything. Why do they need you? Why are they involving you in this? Yeah, they just ramp up their own business. I mean, for your $5,000, if they’re so good at creating these websites out of nothing, that’s going to make you $10,000 a month. Why don’t they just keep the website themselves?

Yeah, remember all the times that you told me, Steve, you need to start a course. You need to train.

And my answer was always the same.

Yeah, but my answer was always the same. No. Why am I going to take all my hard work and labor and pour it into selling something?

Well, and creating, and creating competitors for you, you’re making money at this thing. You’re like, what sense does it make to create a course and sell it for $1,000 or whatever to teach a whole bunch of people how to compete with you with what you do. That makes no sense from a business standpoint. So the people selling these courses, are they making more money selling the courses or doing the thing that they claim to be an expert at? Now, I’m not saying everybody selling a course is trying to scam you. There is legitimate things out there, but you have to be very careful and very selective. Right? And what am I paying for? Is that investment worth it? Do I have the aptitude for this thing? Am I going to learn like Steve said? You know, you might get one idea out of it. So maybe it’s worth it. You pay $200 for a course. You’re serious about this thing. That saves you a couple of months. And, you know, and you’ve got the capital to do it. You’ve got to be very careful going into debt for a lot of the stuff. If you have to go into debt to start a business, probably what you should be doing is things like Instacart and DoorDash and stuff and then using that money as seed money for the side hustle, if that’s what you want to do.

Yeah, you know, in fact, I think the best course out there, the best marketing out there for you to investigate any of these things, these hard surface things, anything that involves a product and has to be sold and shipped. The best thing you can do is go to ChatGPT and start asking questions because you can get all sorts of deep personal training or answers using one of the AI models that you can buy in a course.

And speaking of going into debt, you know, even like Lyft and Uber and those kind of things where I’m kind of saying, oh, you just go get started. I’ve seen a lot of crash and burn stories from that as well. People would go out and they’d buy especially, oh, I want to drive on the black tier of Uber or Lyft and I’m going to go out and I’m going to, I’m going to get a loan and buy a $60,000 black suburban.

Oh, yeah, remember that guy who went out and bought the big gas guzzler. Yeah, that was a big SUV. I can’t remember his name. Driver Eddie. His name was Eddie.

But he doesn’t even do YouTube anymore. I don’t even know if he’s driving because I was thinking about him a few months ago. I wish I could remember his screen name. His name was Eddie. Anybody that’s in the gig community would know who he was.

Yeah, but he made a classic mistake which was he made investments based upon what he thought Uber or Lyft would continue to do.

Yeah, I can’t remember what the car he had before, but he was he was one of those guys that was a hustler and he was out there a lot of hours and this was back a couple of years ago where you used to be able to make $3,000 a week if you really hustled and you would do it. And he had a, I thought it was a Tesla. He had a Tesla, I believe. And then he went and for some reason got this idea that he was going to get rid of the Tesla and he bought like a Cadillac SUV and I’m just like, oh my god, you know, just all the expenses shot up and then he just crashed and burned with it. He could not make any money.

But but that’s a good example of, you know, even if you are going to go drive Lyft, I’m going to go drive. You don’t necessarily need to go buy a new car.

No, start with what you got.

Yeah, Lyft and Uber can pull the rug out from under you. You go buy a $50,000 car so you can drive the black tier and then they disqualify your car or whatever it is.

But you know, don’t go into debt to do Lyft and Uber. Like Steve said, use what you got to start out with and try to make some money and figure out how to make that profitable first because there’s a lot of people that go out and drive Lyft and Uber. They don’t take any profitable rides. They’re losing money and then their car breaks down and then they’re crashed and burned and that didn’t help them either.

Well, that’s why I think you should start with what you got because that’s the same approach that I had when I started FBA, which was, you know, start with what you got now. You don’t have to invest anything and learn your lessons because within a month, if you work hard your first month and maybe you talk to Damon and get some ideas or something, but if you work hard and you decide, you know what, I really want to figure this out. There’s a way. You don’t need to buy anything. You don’t need to, you know, nothing else. There’s a way that you can make it.

So Damon, I would love for you to talk about your side hustle success driving and delivering versus other people that say that’s not possible. You’re a liar. You’re an idiot. Just because they can’t do it doesn’t mean that it’s not possible.

Yeah, I get the haters that come out. But yeah, I mean, you know, for those of you that aren’t familiar with our penny stupid channel, I do. I drive Lyft and Uber and DoorDash and Instacart and Walmart Spark and I try these different, I do catering deliveries too. I try these different side hustles, try to figure out ways to make money mostly in the evenings on some weekends when I don’t have softball or baseball. And I’ve got it down now. I’ve been doing it for a couple of years and I’ve got it down now to where I pretty consistently make 40 bucks an hour. Now I always clarify that because I’ll get some dumbass in the comments coming in. Is that your gross or is that your net? That’s gross revenue. Everybody has different expenses. It just makes it easy to talk about. Give me a break, man. So yeah, gross revenue is $40 an hour. Everybody has different expenses. I’ve got a Tesla so the cost is very minimal. But when I go out and drive, I have a strategy. A strategy that I’ve put together and I’ve learned based on my area. I keep my expenses low and I would say that not to toot my own horn but based on what I’m seeing in all these forums that I’m in all the time. I’m probably easily in the top 1% of earners in terms of per hour because I’m not out there full time or anything like that. But in terms of what I make per hour for the typical gig worker, I’m definitely way up at the top. Most people come in and they say that’s not possible. You can’t do that. You know, whatever. But the best advice I could give if you’re thinking about doing any of this gig stuff for extra money, you got to pay the rent, trying to pay off debt, whatever it is. I mean, I make $3 to $5,000 a month part time doing it. It’s not hard stuff. It’s pretty easy. There is a learning curve. So what I would suggest though is you have to test your market. You have to try it out. You have to constantly be evaluating what’s going on and whether or not it’s profitable. And there’s so many people that go out and they just get an app and they just drive for the app, whatever, you know, whatever that it is and they’re losing money and they’re bitching and moaning about it rather than pivoting and going, okay, this way is not working. I got to try this way. Now I got to try this. What if I add this app with this app? You know, that’s what I do that’s really interesting to me is I’m always out there trying to figure out how I can do all of this stuff to maximize what I earn while I’m out away from my house.

And that’s easy to make $40 an hour. You have to be introspective and I always think about the 200 drivers in the airport queue, you know, sitting and waiting for one ride. I think the secret to your success and you are exceptional at it. I could not do what you do. The secret is you have to do well, you know, we all have our niche, but you make $40 an hour. Not every hour, not 40 hours a week, right? You’re maximizing your income. You’re doing other things and fitting it in. And when you see an opportunity, you jump on it instead of sitting in the airport queue.

Yeah, I sat in the airport queue twice in the last three years, right? The first time was because everybody was sitting in the airport queue and I’m like, hey, well, let’s see what this is all about. And I sat there for two damn hours. Why are you people doing this? This is stupid. And I left. And the second time I did it was because, you know, everybody has to learn their own lessons is maybe it was a bad day. Let me try that again. This is like a year later, right? Parked in the airport queue.

Yeah, one of your observations was that nothing.

Yeah, one of your observations was that people in the airport queue, the drivers are getting out and chit-chatting and socializing and stuff.

I was just down in Miami and I went by the queue and there was a food truck there. And the drivers were out there, sitting at a table, having coffee, chit-chatting, everything else. You’re not making money if you’re sitting there spending money.

No, but those are the same guys that are going to get on the forums and Uber is a bad company. It doesn’t pay a living wage. It doesn’t pay enough. You know, it’s not Uber’s job to feed your family. It’s your job to figure out how to utilize the app to extract as much money out of it as you can. It’s not Uber’s fault that you don’t have a good strategy. Sorry, not.

Well, I mean, let’s talk about Uber and Lyft and those types of things because you cannot get into a side hustle opportunity and make money if you think that those companies are always going to pay what they’re paying right now. They always reduce it. They always change. You have to have the ability to embrace change. And as Damon said, pivot.

Pivot. Yeah, which is why you don’t invest in an expensive car. I think it all I’m going to go be an Uber driver or a Lyft driver because those apps don’t pay well enough to incentivize you to make a new car worth it. Somebody with a $10,000 Prius in most cases is going to make just as much money as somebody with a $50,000 BMW.

We’ve talked about that many times that the best thing you can do if you want to buy a car is get a used Prius.

Oh, yeah, 100%. That’s the cheapest thing you can do.

But there’s a lot of different side hustles out there. And in the focus of this podcast, we wanted to talk about just do not go into debt blindly thinking that all the sudden the side hustle is just going to pay out all this money and you’re going to hit that website and all the sudden the customers are just going to roll in automatically. Be very careful. Side hustles can really help you get out of debt, can help you make some extra money, but make sure you have the aptitude for what it is that you’re doing and be very careful with the money that you are or the debt or the credit that you’re investing to get the side hustle going. The less you can invest, the better and try it for a couple of months. And if it’s not working, if it’s not profitable, do like Ross Geller and pivot. Pivot.

Well, I think when I started FBA, probably the initial money over the beginning months, I probably started with 20, 25,000 dollars.

That’s the first thing we didn’t talk about. How much money you invested and you got it all back, but you invested a lot more money than I did. Now you make more money than I did.

That was the start of it. That was the start of it. At some point, maybe the end of the first year or whatever, I came to the conclusion that I don’t need to continue to keep growing this business. I would rather slow it down and pay off all my debt that I have from this and then find something that is manageable. That’s kind of the same thing that you’ve done with Uber and Lyft and Delivery. You’re not all in, but what you do is the best result that you can get.

Yeah, like yesterday was Wednesday night. This is giving you an example. I usually don’t drive much during the week. I’m too busy hanging out with the family, got softball practice, all that stuff. But once in a while, late at night, family goes to bed, I’ll go out and drive. And in my area, again, you got to learn your area. You got to test your market. There’s a bar up here that does live bull riding on Wednesday and Friday nights. And I usually get a couple of pretty good rides.

Lots of bull riding, real bulls.

Yeah, like you could go to the bar, sign a waiver, be like, I’d get on that bull.

So that’s you can.

Sounds brilliant.

Well, it’s a marketing, it’s a marketing juggernaut, bro. There’s people coming up from an hour and a half away to come watch some drunk guy think he could ride a bull.

So, hey, I don’t care what they’re doing. They need a ride home.

Yeah.

So, but oftentimes on a regular Wednesday, again, in my market, because I figured out my market, I could go out at 9:30, 10 o’clock at night after everybody went to bed. And I could go make a hundred bucks in two hours and then go home. Right. You know, that’s 50 bucks an hour. Now, you know, that’s how I use these apps is okay. It’s profitable right now. I don’t have much else going on. This will be fun. Let’s go try that and I go do it. I’m not going, all right, I’m up at 6 a.m. I’m going to go sit in the airport queue and I’m going to work for 15 hours a day and then I’m going to bitch at Uber because I’m only making 20 bucks an hour before all my expenses. That’s not a way, you know, to make money. So you have to figure out your market and figure out whether or not your market can afford to pay you what you need to make to make it even worth it for you to do it.

Now, I had two Lyft drivers in Miami and I asked them both the same question, which was how many other apps are you piling together so you can maximize your income and both of them said the same thing to me. None. I only do Lyft.

Yeah. Well, hopefully you said subscribe to our penny stupid channel and watch my friend Damon. He can show you how to make more money with more apps.

I did mention it to him. And I also mentioned to one of the drivers something that you have said a lot to other people, which is, you know, do you set aside 50 cents a mile to cover your expenses and taxes and, you know, and other things?

I think it’s funny when you say that to people and they come back with, but then that ride wouldn’t be profitable. Like, dude, that’s the point. You’re taking the ride that you shouldn’t be taking. And, you know, I mean, as long as you’re talking about, that’s a good point. We were talking about debt on the vehicle, but there’s also debt just by working for Lyft and Uber or Instacart or whatever and taking orders or rides or offers that are not profitable. You’re going into debt with every mile that you’re driving for them and you’re getting revenue back and you’re thinking you’re making money, but you’re making revenue. You aren’t necessarily making profit. So you need to make sure that you’re making more than enough to cover the current and future expenses of the tool, which is the vehicle that you’re using that will eventually break down and you’ll eventually have to replace. If you’re not taking rides that are profitable enough to allow you to repair that vehicle or replace it, then you are driving yourself into further debt. You’re not making any money. You’re just generating revenue. That’s it. If you’re doing a 30 mile drive for $15, you’re breaking even. That’s zero.

Yeah. If you’re lucky, if you’re unlucky, you’re out in the middle of nowhere after the 30 miles and you drop them off and you go, now what do I do? Oh, I got to drive back 30 miles to get my next ride. So now, and this is actually very common, unfortunately, not only did you just do that ride for free, now you’re paying money out of your own pocket to drive back to get the next ride. That is not a recipe for success. You’re not going to be in the game very long doing that.

Well, so this 50 cents a mile calculation or thing that you came up with, that covers fuel and maintenance and depreciation and vehicle replacement and that’s probably a conservative amount to set aside, right?

Yeah. Well, the IRS, they estimate and they get average of all different vehicles, but they say you can write off 70 cents a mile. So I came up with 50 as a way to say, well, most Uber Lyft drivers, most gig workers are using fairly efficient cars, you know, most of them are. And 50 cents a mile is quite frankly, it’s easy math in your head when you have like eight seconds and you’re in the middle of turning left and you’re getting an offer thrown at you and you’re trying to calculate whether or not you want to take it. 70 cents is a little bit harder to do in your head, but 50 cents is still a pretty conservative number. If drivers set aside 50 cents and they were taking rides that they could afford to make the profit they needed to make and still cover the 50 cents, they would be fine. But I had a guy come in my comments the other day and tell me he drives a Tesla. So his cost per mile is only five cents. And I said, I don’t think you know how this works. I drive a Tesla too, and I can tell you 100% that your cost per mile is more than five cents.

Yeah, but all he was factoring in was his charging.

Electricity, yeah. And it was one other thing, but he was not factoring in insurance, depreciation, future repairs that, you know, if you’re putting four, five thousand miles on your car, you got some repairs coming in your future. You know, I just, I got to tell you that. And if you’re factoring in and then he would argue with me, and I was just finally like, dude, if you want to take cheap rides because you think you’re making a profit, I don’t give a shit. Like I’m not here to convince you, I’m just telling you how it is. If you want to take 50 cents a mile rides and think your costs are only five cents, have at it. You do you, boo, right? You know, sorry.

You know, one thing that I, I don’t think a lot of people realize is that when you become an independent contractor, you are your own business. And one of the things that I don’t think people appreciate is there’s an extra 15% income tax that you have to pay because the employer is not paying that on your behalf. So your expenses are even higher.

Yeah, now you get some offsets and some write offs too, especially if, especially if you’re taking very unprofitable trips and rides. Yeah. You get a lot of write offs, but then I get in arguments in my comments too about people not understanding how a write off actually works.

Yeah, I had one guy that he came in and I was explaining the 70 cents a mile. And what, what was his explanation? He says, no, he goes, no, that’s not how write offs work. He said something like the 70 cents a mile is what the IRS is going to give you. I couldn’t even understand his logic. Yeah, it was just like, so it’s very apparent there’s a lot of gig workers out there that have never worked for themselves.

I had another guy last week come into the comments and say, you’re not a 1099 contractor. Which you are, by the way, if you sign up for any of these gigs, you’re not a W2 employee. You’re a 1099 contractor. So his explanation was you’re not a 1099 contractor because these apps can deactivate you at any time. And I said, okay, well, you are a 1099 contractor and you’re right. They can deactivate you at any time.

I think, unfortunately, his argument supports the fact that you are a 1099 contractor.

Yeah, they don’t have any obligation to keep you or do a performance review or anything. They could just say, hey, thank you for your services. They’re no longer needed. We’re going to go with a different independent contractor. Right. And there certainly, there are a lot of them out there.

Hey, as we head towards a conclusion on this, give us some advice on how to do side hustles safely.

Well, never go into debt to start. Well, yeah, don’t go into debt to start. If you’re out there interacting with the John and Jane Q public, safety can be a very real concern depending on the area that you’re in. And I tend, and I drive at night typically, which tends to be when the weirdos come out. So I mean, my best advice on that kind of stuff is don’t do anything you’re not comfortable with. Right. And everybody has a different level of comfort. Don’t go into areas that you’re not comfortable with. And if you’re not comfortable with having people in your car in general, there’s apps that you can do that don’t require really any interaction with people. So stay within your comfort zone. You should never feel uncomfortable or scared or afraid to make five bucks, you know, dropping somebody off. It’s not worth it.

Yeah. And it’s okay. If, you know, week one that you’re breaking even as long as you’re being introspective and you’re figuring out how can I do this better? Or what do I need to learn to do this better? And then you will very quickly start to grow and start to be profitable. But if you’re not profitable within 90 days, it’s time to think about pivoting. And profitable, profitable, even though Steve and I are having trouble saying it for some reason, maybe there’s too many syllables. Profit is the name of the game, not revenue, right? You can get by on just revenue for a short time to pay that bill real quick. But if you don’t eventually figure out how to make a profit, whether that’s in, you know, FBA or, you know, driving in the gig economy or whatever it is, there’s a million different side hustles out there. It’s not just limited to the stuff that we’re talking about. But whatever it is that you’re going to do, make sure you have the aptitude for it or can acquire the aptitude for it. Don’t go into debt to do it unless you thoroughly studied it. You’re confident in yourself. And even then a lot of businesses, you know, fail. And so there’s never a guarantee. But do everything you can to avoid going into debt to get a side hustle going if you can. Or if you are going to go into debt, do it in a smart way to where you can hit the eject button. You know, take a big swing and, you know, that’s how this country is. Sometimes we take a big swing. And if we miss, it’s like, well, that wasn’t my life savings. That was a bank loan. And now I have some options that I can like, sorry, my bad. It didn’t work out. Regroup, fresh start.

Yeah. I’m going to wipe that out and think of fresh start. So as much as I say, don’t go into debt, honestly, I would rather you do that than blow your life savings and then be really screwed. So when you think about it that way. But do it wisely.

I like the money that I invested with Amazon FBA. That was money that if it didn’t work out. Oh, speaking of that, there’s a delivery. If it didn’t work out that I was prepared to lose that money.

Yeah. Oh, and that’s something the gurus don’t really ever tell you. Every time a package comes in, Seville, dabble it out, but I can just hear it just drop through his mail slot and down the conveyor belt. But the gurus in the ad Steve never tell you about. So it’s really easy if you have $25,000 to get your first inventory, you know, packages or whatever. It’s always you don’t need any money. You can do this. You can do that. But when you start looking at how much money Steve invested to kind of get it going and get it off the ground, most people watching those ads and buying those courses are scraping together the money to buy the course. Right. They don’t have the money to invest in inventory, right? But they don’t ever tell you that. They can get started with almost nothing, right? Because that’s what they’re selling. They’re selling the dream.

Speaking of selling the dream, I think that’s it for today.

I’m not sure how that makes sense, but okay. There was there was no segue. Actually, in my head, I was going to say, speaking of selling the dream, you can get in touch with Damon at DamonDay.com. And then I just thought that sounded bad.

So I’ll buy that for a dollar.

Yeah. There’s a free course for you.

All right, Damon. So until next time, I will see you. Peace.