My Quest to Build a Million Dollar a Year Income Stream with Options Trading

Why most side hustles won’t make you Financially Independent

It’s a common dream for those who feel stuck in the rat race. If they can just generate enough side income, they can hang up their job and be financially independent.  They’ll find a side hustle or two and ramp them up until they’re big enough to live off of.

Most people want financial independence. But missteps along the way prevent them from ever getting there. Let’s look at what some of those missteps are.

Misstep 1- choosing the wrong side hustle

This is probably the most common one I see.  There are a lot of side hustles out there, but many of them just don’t scale well. Let’s look at a couple examples.


Real Turo car crash

Got a car you don’t drive much? Put it on Turo and earn money from other people driving it.  Sounds great, right?  Why not have other people make your car payment, and maybe even more beyond that. 

If you happen to have a car sitting around, not being used much, this isn’t a bad thing to do. You have to keep your car in good mechanical condition and maintain its appearance. But if it’s a late model vehicle, this shouldn’t be too hard early on.  Turo handles all the payment stuff for you, and you’re covered for any renter damage to your vehicle.

But there are downsides to this. One is the wear and tear put on your vehicle as a rental. Some people will be harder on your car and not take care of it as well as you might.  

You also have to coordinate with renters, including sometimes meeting them at an airport or other location to deliver the keys. This can take a big chunk of your time if you have to drive across town.

People also aren’t going to want to rent a vehicle with high mileage or lots of wear and tear. So you’re probably not going to get more than 2-3 years of use out of it as a rental.

Let’s just assume that you’ve got a nice late model vehicle that is popular on the site.  You’re renting it often, and generating hundreds of dollars in net profit. For some people, that’s all they want, just a little bit of side income.  

But what if you want to scale it into a side business?  This is where it gets tricky in a hurry.  First, you have to acquire more vehicles.  Do you have the cash to do this, or do you need to finance the purchase?  If you’re financing, you’re probably going to run into credit challenges before you even get to your third vehicle.  

Even if you’re able to build a fleet of four or five cars, who’s managing delivery to the renters?  If you’re working full time, it’s going to be hard to manage two or three new rental deliveries a day.  

Not only do you have to handle the key turnover, but you’ll also have to prep the vehicle between renters as well. You could hire someone to do this stuff for you, but there goes a big chunk of your profit.  And what happens if a car breaks down?

There’s one other scaling challenge with this. If you get a big fleet of cars, you’re probably just not going to get enough traffic from Turo to support it.  

Dividend Income

How about growing a Dividend income as a side hustle?  This one is certainly scalable.  It’s about as passive as it gets, and you have no overhead.  You just keep buying high quality dividend paying stocks until you’re generating enough income to live off of.

So how much stock do you need to own to generate a six figure annual income?  This is usually the wake up call for people.  The average dividend yield for stocks is right around 3%. This means you’d need to own $3.3 million dollars in stock in order to generate $100,000 in annual dividends.  

If you can save enough, you can get there.  But let’s say you’re making a salary of $100,000 today.  If you’re able to save $20,000 a year to buy stock with, you would only need 167 years to meet your objective. You can greatly reduce that by reinvesting the dividends, but it would still take decades. So much for an early retirement.


This one may surprise you, but another side hustle that I recommend steering clear of is AirBnB. I’m not against real estate as a long term investment. And I also think that it is something you can scale up. But when it comes to short-term rentals, it’s a whole different animal.

If you already have an investment property, AirBnB can be a pretty attractive option.  If you are able to get bookings for 75% or more of the month, the gross income is typically going to be much higher than a long-term rental. Sometimes double or triple what you could get in normal rent.

So far you’re probably thinking I’m crazy for recommending against this. But let’s look at some of the costs you have as a short-term rental.  

The first is supplies.  Towels disappear, toilet paper and other toiletries get used up, and dishes get broken.  This is just a subset of the items you have to buy regularly to keep your property stocked.

Just like with Turo, wear and tear is a big problem for short-term rentals too. It’s not like you don’t have wear and tear with long term rentals, but with short term you’re dealing with it much more frequently.  Things like scuff marks on walls, light bulbs, and carpet/tile cleaning are all things you’re going to have to take care of, whether by yourself or by hiring someone to do it for you, regularly.

Real AirBnB hosting nightmare

Furnishings and depreciation. Before you can even put your property out there for rent, you have to furnish it fully.  Bedroom sets, bedding, living room sets, dishware and towel sets are just some of the things you will have to buy, and this will easily run you $10k-20k.  The problem is this stuff depreciates quickly.  More than the wear and tear we discussed above, furniture will break, bedding will get soiled, appliances will require service. You may have little in the way of expenses like this your first year, but it will accelerate quickly in the second year. By year three, you’re already replacing a lot of what you bought when you originally furnished it.  This will really start to eat into your profits.

Another problem with short-term rentals is the amount of competition out there.  The number of listings keeps going up, and usually faster than demand.  It’s not unusual to see a slow decline in your property’s occupancy as guests have more and more properties to choose from. 

When you turn your property into an AirBnB rental, you have a hotel with one unit. You get all of the challenges of running a hotel, but without the opportunities of scale that a hotel has.  You can add more short-term rental properties, but you’d just be adding more one-unit hotels.  

AirBnB is similar to Turo in that it can be a good way to earn extra money if you have a second home you don’t use often.  But it’s very challenging to scale as a business.  Long term rentals aren’t as sexy, but are more stable for scaling. 

The good news with AirBnB is that you still own the property.  So once it becomes obvious that a short-term rental isn’t sustainable, you can remove your listing and put it out there as a long-term rental.

Misstep 2- retiring from job too early

So let’s say you’ve found a good side hustle, and you’ve been scaling it up.  You’re making as much in your side hustle as you do in the job you hate, so you put in your notice.

Here’s the problem- your job probably covered a lot of expenses that you’re now responsible for on your own.

The biggest of these is taxes.  As an employee, your employer pays taxes on your wages, including half of the taxes for social security and medicare. Once you’re self employed, you pay the full amount yourself.  This is hundreds of dollars in additional expenses a month.

Health insurance is another big one. Large employers often cover a substantial portion of the expense for employee health insurance. Once you’re self-employed, you’re on your own for this.  And the older you get, the more expensive it becomes.

One of the other things that changes is that you lose the stability of a weekly paycheck.  Most people who are self-employed find their income fluctuates a lot throughout the year, and it can be a struggle to manage expenses because of this.

The single biggest challenge when leaving a job to become fully self-empoyed is you lose that income.  If you’ve been spending any of the money you made in your side-hustle, you don’t have that luxury anymore.  If you were reinvesting that money to grow your side hustle, because you’re now using that money to pay the regular bills you can no longer reinvest as much of it in your growth, if any.

If you haven’t accounted for all of these things in your budget, you could quickly find yourself struggling financially in your new independence. It’s possible you might have to start cutting back on your lifestyle, and end up very unhappy with your new situation.   You might even find yourself looking for a job again in 6-12 months, completely negating your financial independence.

This is what happens when you jump ship too early. And it happens often.

Misstep 3- lack of commitment  

Compared to the first two missteps, this one is by far the hardest to deal with.  Choosing the right side hustle just takes time and analysis, and not quitting your job too soon just takes patience. But battling the challenges of day to day responsibilities so that you don’t lose your commitment can be a very difficult thing to deal with.

While you build your side business, you have all of the responsibilities of your day job.  And if you grow in your job, such as getting a promotion, those responsibilities might increase.  Over time, you might also start and grow a family. So those responsibilities get harder and harder to deal with.

By themselves, these aren’t necessarily bad.  But they take time and focus, and this might interfere with growing your side hustle.  After a while, you may find you just don’t have the energy to work on your side hustle anymore.

Life is all about priorities.  However you prioritize your responsibilities, that’s what’s going to get the focus.  And if you prioritize five things above growing your side income, when push comes to shove, those five things will win.

As hard as this is to deal with, if you want to succeed in gaining financial independence through growing a side hustle, you have to power through it. You have to prioritize it.  Not above everything else, but high enough you can stay committed to it.

Turn a side hustle into financial independence

It’s possible to grow and scale a side hustle into a primary income. But you have to choose a side hustle that is scalable. Doing something that puts a little extra money in your pocket every month isn’t going to do it.  Doing multiple side hustles that put a little extra money in your pocket becomes a distraction. It has to be something that you can sustainably grow.

You also have to have the patience to grow it to a substantial size, big enough to fully support you as a primary income source.  Jump from your job too soon, and you could doom your chances of success.  

And you have to stay committed to it for the long haul.  Don’t let life’s challenges get in your way.  As new challenges arise, find ways to continue to focus on growing your side income. 

You can become financially independent, but you have to make sure you avoid these missteps to do it.

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