Top Side Hustle Tip from a 39-Year-Old Earning $9,300/Month in Passive Income

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From laid-off engineer to entrepreneur, Andrei Rizea shares his journey to $9,300/month passive income through diverse side hustles.

I lost my job right when I was making $80,000 per year as an engineer, which prompted me to focus on my side project—a food blog named Delish D’Lites, inspired by my Puerto Rican heritage.

As I gained knowledge in personal finance, I expanded my side hustles. Five years ago, I launched a money podcast called Yo Quiero Dinero to share my experiences and help others build wealth.

Now, at 39, I have developed seven income streams: affiliate marketing, blog and podcast ads, speaking engagements, digital courses, Airbnb rental income, and brand partnerships. These ventures bring in an average of $37,394 per month, with $9,300 being passive income.

Creating a sustainable business requires time and patience. I didn’t leave my day job until 2021. It’s essential not to pressure yourself into achieving a six-figure income quickly, regardless of what social media portrays.

To grow and scale your business, focus on identifying necessary improvements. Here’s my advice for anyone looking to transition their side hustle into a full-time career.

My No. 1 Piece of Side Hustle Money Advice

Know Your Numbers

As your business grows, understanding your financials becomes crucial. I initially used basic spreadsheets to reconcile my side hustle income and expenses, but I only did this at the end of the year. This left me with little insight into my financial status throughout the year.

When I decided to expand my side hustle into a full-time business in 2020, I invested in accounting software that allowed me to track my income daily. This real-time information kept me informed about my progress. I highly recommend using tracking software like QuickBooks, Wave, or Xero to monitor your expenses and income.

Regular tracking enables you to cut unnecessary expenses in real-time.

Setting Up Your Business Finances

Effective financial management is vital for any business. Here’s a guide to help you get started:

Separate Personal and Business Finances

Open separate bank accounts for your business to keep your personal and business finances distinct. This separation is essential for accurate bookkeeping and tax purposes.

Choose an Accounting Method

Decide between cash and accrual accounting. Cash accounting records transactions when money changes hands, while accrual accounting records them when they occur, regardless of payment. Consult an accountant to determine the best method for your business.

Create a Bookkeeping System

Set up a system to record and track your business transactions. Use accounting software like QuickBooks or a spreadsheet program. Categorize your income and expenses to facilitate financial analysis.

Track Income and Expenses

Diligently record all sources of income and track expenses. Organize receipts, invoices, and other financial documents. Regularly review and reconcile your financial statements to ensure accuracy.

Develop a Budget

Outline your projected income and expenses in a budget. This will help you make informed financial decisions. Periodically review and adjust your budget to reflect changes in your business.

Manage Cash Flow

Monitor your cash flow to ensure you have enough liquidity to cover expenses and maintain operations. Implement strategies like managing receivables and payables, negotiating favorable payment terms, and maintaining a cash reserve for emergencies.

Plan for Taxes

Understand your tax obligations and deadlines. Consult a professional to determine the appropriate tax structure for your business and comply with IRS laws. Regularly set aside funds to cover tax liabilities. A good benchmark is to allocate 25% of your business revenue for taxes, though this may vary based on your location and specific tax requirements.

Monitor Financial Performance

Regularly review financial reports such as profit and loss statements, balance sheets, and cash flow statements. These reports provide insights into your business’s financial health, highlight areas for improvement, and help you make informed decisions.

Consult with Professionals

Throughout this process, it’s crucial to consult accounting and legal professionals familiar with your business needs and local regulations. They can offer personalized advice and ensure compliance with all financial and legal requirements.

Setting up a robust financial management system will save both your sanity and your business.

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