Side hustles for the 'broke and lazy' are trending on TikTok. Are they really that simple? – ABC News
By Kellie Scott
TikTok usually gives me the distraction I'm looking for with funny dog videos and relatable parenting content.
But now the algorithm has decided I'm "lazy and broke" (OK, partly true), and the antidote is a side hustle generating passive income.
Every day there is a creator in my feed spruiking the potential to make $3,000 a month from doing almost nothing.
Forever a boring realist, I'm not sure these #easysidehustles are everything Dan is promising me from his mum's basement.
So I went to the experts for advice.
We speak to two young investors about their biggest mistakes, and what they'd do differently if they had their time again.
The mix of side hustles I'm seeing promoted on TikTok include dropshipping, affiliate marketing and subscribing to focus groups — just to name a few.
Creators say I can make money "passively for life" and "without having to do a tonne of work".
Frederik Von Briel, a senior lecturer in strategy and entrepreneurship from University of Queensland's Business School, says he would approach those claims with caution.
"Get-rich-easy schemes basically never work, but passive income does exist and is a great way to become financially independent," he says.
The key, he explains, is that you always need to invest first — with either money or time.
"You need to invest either money, to obtain something that appreciates in value, or creates returns, such as stocks or rental property, or you need to invest time to create something that others are willing to use or pay for, such as an online course or a book," he says.
"It usually takes time and effort to create the foundation for a decent passive income stream."
Laura de Zwaan, a lecturer and researcher in Finance and Financial Planning at Griffith University, says it's "virtually unheard of" to make money without having to invest a lot of money, time or effort.
"I would be wary of anything that promotes itself as passive income or an easy way to make money," she says.
"It's highly unlikely to be true."
Dr de Zwaan says there are similarities between the side-hustles being promoted on TikTok and multi-level marketing schemes.
"They over-promise on the amount of money you will make, and downplay the effort it takes."
Have you had a crack at one of the side-hustles mentioned here? We'd love to hear about how it went. Email us at firstname.lastname@example.org
Dropshipping is one of the most common side-hustles I'm presented with on TikTok, and it does sounds simple at first.
Creators might suggest selling journals, for example. Using sites like Canva, Etsy and Shopify, you can "outsource large parts of your business operations," explains Dr Von Briel.
While it is "certainly easier" than building an entire business from scratch, he says to be successful you will still need to add value to the products you sell, and invest time and money to promote them.
If you don't stand out from the many sellers offering the same product, Dr Von Briel says you're not going to make money, aside from the occasional lucky sale.
"You still need to develop a brand that people recognise and value, or create a thematic web shop that makes it easier for people find what they are looking for, or do something else that adds value to the products you sell," he says.
And you need to make sure your target customers can find you.
MLMs are divisive because its recruiters often target vulnerable people and lure them in with promises including getting rick quick.
Dr de Zwaan says "get rich quick" schemes rely on people who are vulnerable.
"If they have low financial literacy, they won't even know the questions they should be asking," she says.
So what questions can you ask yourself before diving into one of these schemes?
Dr de Zwaan suggests:
Dr Von Briel says if something sounds too good to be true in business, then you should be very careful.
"Don't get me wrong, there are plenty of amazing business opportunities out there," he says.
"But you should ask yourself why somebody who claims that they know how to get rich easily wants to share with you how to do it?"
For example, what's in it for them?
He says the most profitable business opportunities are usually either hard to spot, not easy to execute, "or both".
"And they also often have an expiration date, meaning that the first person doing it might be able to make money easily, but once various people do the same thing, competition sets in and returns usually decrease," Dr Von Briel says.
So I suppose I'll just keep swiping by these opportunities, until TikTok remembers I came for the cute pets and meme-worthy TV moments.
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