“A part-time job is any activity aimed at generating additional income in addition to a full-time job.”
However, it is wrong to characterize a side job as a side job. Essentially, the main difference between a part-time job and a part-time job is who makes the decisions and is responsible. The following table presents a few key differences between part-time and part-time work.
Having a side hustle provide you the freedom to determine how much time and energy you want to devote to your extra work. In a part-time job, all these decisions are made by your employer.
Another characteristic of a side hustle is the delay in your cash flow.
Cash flow delay
Hourly pay: Some side of the fuss is trading time for money. After a certain period – usually a week or a month – you send the client an invoice indicating the number of hours worked. The customer puts your invoice in their Accounts Payable queue, and after 30 days or more, you will receive a check. Of course, freelance sites like Upwork, Total, and Freelancer can cut the time it takes to get paid to as less as one week by doing bank-to-bank transfers.
Fixed Price: Some third parties are committed to providing a series of milestones. As with hourly billing, your invoice is placed in the customer’s A/P queue, and you’ll have to wait to get paid.
Delayed Compensation: Compensation for some side efforts may not be based on upfront effort but results. For illustrate, if you invest time and resources into developing a product, such as a software application, intending to sell it to customers, you expect your efforts to be rewarded once you sell it. You are investing to earn an indefinite income in the future. With deferred compensation, you’re taking on the added risk that you won’t be able to sell your product or that you could sell thousands for essentially the same effort.
Deferred compensation has the extra benefit of creating passive income long after the work is completed.
Cash flow quadrants
An author of Rich Dad Poor Dad, Robert Kiyosaki, defines the “Cash Flow Quadrant,” which I believe helps provide a framework for understanding the four types of side hustle.
Freelancer Side Hustle (Self-employed)
Working as a freelancer allows you to monetize your knowledge and get into the self-employed (S) cash flow quadrant. As a freelancer, you use your professional skills and trade time for money. Freelancers are usually paid by the hour or by a fixed price per result. If you keep working, you get paid.
Freelance side work doesn’t inherently scale. However, it doesn’t carry many risks of not getting paid for your efforts. As a rule, your actions and the time you get paid are closely related, although delayed. Because it’s only you, you don’t have the opportunity to use your efforts. In addition, a freelance side job does not require a lot of startup capital to get started.
Side Hustle Solopreneur (business owner)
The self-employed third-party Hustle differs from a freelancer in that some or all your income appear from the right side of the cash flow quadrant and is considered passive income because you don’t have to do actual work to get paid. Sole Proprietorship illustrates the Business Owner (B) in Robert Kiyosaki’s Cash Flow Quadrant.
The Solopreneur side hustle is more likely to require a little more capital to launch and scale than the freelance side hustle to have enough money to pay employees and subcontractors, maintain inventory and supplies, or invest in R&D while building products.
Side Hustle Angel (Investor)
If you want to build a more diversified portfolio of passive income sources, you will need to analyze trading your time, skills, and money for shares in someone else’s startup. The essence of the angelic Hustle is to invest time and money in building a portfolio of diversified income streams. For Hustle Angels, income comes from the right side of the cash flow quadrant and is considered passive income. Angelic Hustle represents the Investor (I) in Robert Kiyosaki’s cash flow quadrant. There are two types of angelic fuss – advisors and investors.
As an angel consultant, you are performing due diligence on a particular business and, based on their ability to succeed; you may apply your knowledge, skills, and contacts in exchange for a share in the industry or future royalty payments. Angel consultants invest their time, not money, to build equity in a business they don’t personally manage.
Angel consultants are more likely to invest in service businesses with only a limited chance of a successful exit. Angel consultants are betting on building a portfolio of the companies that will pay those dividends, payouts, or royalties long after their efforts have been completed.
Therefore, to be a successful angel consultant, you must potentially fund your efforts for several years before you begin to see any results.
Like an angel advisor, angel investors perform due diligence on a specific business. Based on their ability to succeed, business angels agree to invest capital in the company and apply some of their knowledge, skills, and contacts to guide the business owner to increase their chances of success. Since capital investments are made in the early stages of business development, business owners are forced to cede significant shares in the capital to business angels due to the high level of risk. Getting money and support from a business angel is often called smart money.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.