Money-Making Hobbies

The following is an excerpt from Your Money: The Missing Manual, an excellent book written by JD Roth from Get Rich Slowly. Copyright 2010 O'Reilly Media, Inc. All rights reserved. Used with permission. (A sidebar appears at the end in red.)

Even if you're not interested in owning a business that you work at full time, a small-scale venture might be right for you. Why not build a business around one of your hobbies? You won't get rich by playing your violin at weddings or weaving baskets, but it never hurts to earn a little extra cash from things you'd do anyhow. This section suggests some key ways to make money from your hobbies.

Do what you love

Choose a hobby you enjoy, and then try to find a way to make money from it. Don't dive into a hobby simply because it might be profitable. You should do this thing because you love it; any income should be secondary. Keep it fun and it won't become a chore.

Example: I love to write. When I was struggling with debt, I read personal finance books, and then summarized what I'd learned on my website. Eventually, this grew into Get Rich Slowly. I've managed to make a career out of writing about personal finance, but I didn't start doing it for the money—I was passionate about the subject.

Be creative

If you don't know which hobby to pursue, think outside the box. What skills do you have that others don't? Define the term "hobby" broadly so you don't limit yourself. Find something that you can do that most others can't—and that people might be willing to pay for.

Example: One of my friends loves to travel, and he discovered that he can fund his adventures by writing about the places he visits. He makes money selling e-books, and gets paid to write for newspapers and magazines.

Don't expect too much

You probably won't get rich off your hobby. In fact, you likely won't even earn enough to quit your day job. But you might be able to earn enough to make the hobby self-sustaining, meaning you earn enough to cover the cost of new tools and equipment.

Example: My brother builds speakers and works with audio equipment for fun. He makes a little spending money doing speaker jobs for other people, but he's not interested in turning his hobby into a full-time business.

Don't underestimate yourself

When you truly love something, your experience can give you skills and knowledge that you may take for granted. But just because you know all about growing orchids doesn't mean everyone else does. If you're an expert on a subject, think of ways to share it with others—for a fee.

Example: If you're passionate about cycling and want to help others learn the sport, start a bike-fitting service or open a part-time bike repair shop. Doing these things may seem simple to you, but others will gladly pay for the help.

Market yourself

To earn an income, you need customers. Many people are uncomfortable promoting themselves, but you have to if you hope to earn money from your hobby: People need to know you're available before they can hire you.

Example: There's no shame in discussing your money-making hobby with friends, family, and neighbors. You don't need to be pushy; just bring it up naturally in conversation. Eventually word will get out about what you do, and people will call for your services.

Hone your skills

You know the old mantra: Practice, practice, practice. The more time and energy you devote to your hobby, the better you'll get at it, which will improve your chances of earning money.

Example: Love photography? If you take a hundred shots a day and read up on how to compose images, you can improve your skills quickly. You may never become a professional photographer, but you might be able to sell images to stock photo agencies (like iStockPhoto.com) or enter (and win) photography contests.

Choose carefully

Not every hobby is a good source of income. Some—like collecting—can actually be huge drains on your budget. And remember: You probably won't get rich off your side business, but you can improve your cash flow, which will help you get out of debt and build wealth that much quicker.

Your Money And Your Life: Cash for Cupcakes

Jessie Smith graduated from college with an art degree and no firm career plans. When the economy tanked in 2008, she began to wonder what she could do with her degree. "There were all these articles about women losing their jobs," she says. "I read an article about a grandma who started her own peanut brittle company, selling it at farmers markets." This gave Jessie an idea.

With encouragement from friends and family, she started Confectionery, her own cupcake business. Jessie bakes and decorates cupcakes and sells them at local stores and farmers markets. "They're pretty elaborate and creative," she says. "I get satisfaction out of that." This isn't how she planned to use her art degree, but she's having fun while learning new skills.

Starting a small business is a scary prospect, but Jessie figured that at age 24, she could afford to take a chance: "When you're young, that's the time to make mistakes."

Jessie doesn't have any employees, and it's her own money at risk. Despite some bumps along the way, she still came close to breaking even her first year. Now she's taking a business class to help her with the non-creative side of the cupcake trade, and she believes she'll do much better in the future. She's found an outlet for her creativity and enjoys what she does, which is just frosting on the cake.

Comments

[Financial Samurai]

All great tips from JD.

People just need to go out and do it and persevere.

Best,

Sam

[Bobbert]

When you get started, choose your customers wisely.

I thought I loved doing computer repair (and I do!) but some people are morons and dealing with them is not worth the money. Calls on the order of "Tell me again where the space bar is" get old VERY fast.

[Budgeting in the Fun Stuff]

I really need to read this book...

Great points!