Side Hustle vs Passive Income: Are Side Hustles Passive Income?

(Last Updated On: January 9, 2023)

Most people are in need of extra money to maintain their lifestyle or to get out of debt. Many are looking for a lot more income but are not sure where to start.

Many of us are already running a side hustle, thinking it’s the only way to gain passive income.

Side hustles provide a way for individuals to not only supplement their income but also be able to work when they want by using their time wisely.

Side hustles are great opportunities for individuals who are unable to find jobs and are looking for additional money outside of their normal 9-5. The problem is that most side hustles aren’t passive income and require constant work to make an impactful amount of money.

Let’s take a closer look at the differences: side hustle vs passive income.

What is a Side Hustle?

side hustle ideas

The term side hustle – or just “hustle” – refers to self-generated sources of income. It can be anything from freelancing, consulting, and babysitting, to renting out an extra room in your house.

With the rise of the gig economy, more people are looking for alternate sources of income. Side hustles are a perfect solution for anyone looking to make some additional cash.

Whether you’re a stay-at-home parent or someone who’s unemployed, having another stream of income can be life-changing.

Side hustles are about more than just making a little supplementary income – they also keep you engaged and occupied. It’s probably the closest thing we have to ‘active’ income.

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What Are Some Examples of Side Hustles?

A side hustle is a second job or business venture that generates extra income. Side hustles can be as simple as someone mowing lawns on the weekends, to starting their own business.

Here are some examples of a side hustle.

  • Babysit for family and neighbors
  • Freelancing on Upwork, Fiverr, or similar services.
  • Driving for Uber or Lyft
  • Delivering for UberEats, GrubHub, or similar services
  • Playing games to make money

What is a Passive Income?

what is passive income

Passive income is a term used to describe money made from an enterprise in which a person is not actively involved.

Passive income can be generated in a wide range of ways including things like royalties, stock dividends, rental income, and more.

It often takes a lot of upfront work and set-up time, but once you’re done, involvement is minimized, and the chances of success increase.

Passive income is the best way to build wealth. The reason is, you earn money with very few limits. It is earned income that you don’t have to work for time and again so this makes it easy to focus on other things.

What are some examples of passive income? 

There are multiple options for generating passive income. Here are a few samples:

  • Rent your car
  • Rent your home on Airbnb
  • Buy a rental property
  • Earn dividends from stocks
  • Have your own business

Side Hustle vs Passive Income: What Are the Main Differences

Earning money with a side hustle or with passive income can look like a similar way to create secondary income. In fact, there is one key difference. It is how you spend your time.

Side hustles take up all of your time and energy and require work to maintain, while passive income streams require no effort after the initial setup.

Side hustles are often simple tasks that you do in your spare time. Passive income, on the other hand, is something you can set up once and it keeps earning for you even when you aren’t working.

Which Income Method is Best For You?

Now that you know more about passive income and side hustles, there are a few questions you can ask yourself to determine if one or both of them is right for you.

Ask yourself how much time and money you can invest to create an additional source of income. You should also consider how much income you want to produce, the timeframe in which it should happen, and what kind of challenges are involved.

As these questions may look simple and straightforward, they’re important to answer before you make a decision about starting a side hustle or building a passive income.


Side hustles can evolve in passive income, but sometimes it is even hard to make enough money to replace traditional forms of income.

Most people who try them out eventually fail because they don’t produce enough cash flow for their lifestyles. A better idea is to grow your side hustle into a full-time venture while maintaining your main job.

Side hustles are an amazing way to explore new markets, expand your skill sets, and find a creative outlet. They are a fantastic way to earn extra income from your spare time and experience something new.

So, start with a side hustle and with the earned money, and then invest in assets that will generate you passive income.

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