Master Side Hustles to Efficiently Trade Time for Alternative Income
Time and tide wait for no man, just as GST hikes and inflation don’t wait for promotions. Prices increase regardless of how ready we are, and maintaining standards of living that we’ve grown accustomed to has become increasingly difficult in recent years. With another GST hike scheduled for 2024, things are almost certain to get even tougher.
It should therefore come as no surprise that more workers in Singapore are considering side hustles as an alternative source of income. Some seek to build stronger financial cushions to weather future uncertainties. Others wish to continue enjoying their desired lifestyle without compromising their savings. Additionally, those who have been preparing for big purchases may be motivated to act swiftly before prices increase even further. Whatever your motivations, side hustling or freelancing is definitely one of the faster and more assured ways of raking in those extra dollars.
Is side hustling common among full-time employees in Singapore?
The silver lining is that side hustles have become more accessible than ever before. These days, a functioning laptop combined with high speed internet are all you really need to get started. Furthermore, side hustles have largely shed pejorative connotations associated with the older term ‘moonlighting’. These days, freelancing is more commonly deemed to be respectable pursuits embraced by the financially prudent and career driven. In fact, as many as 54% of Singaporeans were already working on a side hustle way back in 2017. That’s before telecommuting freed up calendars and allowed employees to work on ad-hoc projects away from superior scrutiny.
But for all the extra earning potential that side hustles bring, it’s important to acknowledge that starting your own freelance practice while fully employed can be frowned upon by some employers. Depending on the terms in your employment contract, side hustling may even tread legal boundaries. Consequently, learning to balance both employer and freelance client expectations often determines whether a side hustle can survive.
Given the challenges, many full-time employees understandably hesitate to take on freelance assignments, even if they have the capacity to do so. If you’re one of those individuals struggling with this delicate balancing act, read on as we lay out the dos, don’ts, benefits, and pitfalls of freelancing.
Are some people more suited for side hustling than others?
As a creative agency that relies on freelancers to expand our business, we have every reason to encourage full-time employees to take on projects on the side. That said, we’ve also been in business long enough to recognise that not everyone is cut out for freelancing. Before you go out looking for additional responsibilities, we strongly encourage you to go through the following list of criteria and evaluate whether or not freelancing can feasibly be slotted into your current schedule.
Do you have a marketable skill?
Having a monetizable skill with sufficient demand will always be a prerequisite to starting a side hustle. We’re not just talking about activities that you can exchange for money, but ones that allow you to turn a profit even after material, equipment, and time investment eats into your profit margins.
To illustrate, let’s use a simplified example of a freelance photographer who charges $200 per session while snapping pictures on a $1000 camera. This photographer will already get a return on investment by his sixth project, and can sustainably earn income as long as additional investments are not required to secure future projects.
Painting, on the other hand, requires the constant purchase of materials such as brushes, paint, and canvas. Once any of these materials run out, a painter will be unable to fulfil further client requests until they restock their inventory. While certainly not impossible, this example shows that freelance practices with recurring costs will be harder to monetise, as practitioners will have to find clients who are willing to pay higher prices that have material cost built in.
Do you have enough disposable time on hand?
Freelance projects aren’t always as straightforward as receiving a brief and executing. (That said, we can help handle a large proportion of project management if you join our curated freelancer network). If you plan to build a sustainable side hustle, be prepared to handle tasks that fall outside your core service, including marketing yourself, proposing projects, invoicing, and maintaining client relations.
If that sounds like a lot of work, it’s because it is. Giving your 120% to secure those coveted projects while also maintaining your performance at work can be a tall order, especially when most people are already drained from a single job. If you don’t fancy the idea of working on weekends or burning late nights to meet deadlines, or if you’re already expected to put in extra hours at your day job on a regular basis, freelancing may not be right for you during this season of your career.
Are you willing to stop enjoying your hobby?
Let’s say that you have a marketable skill with sufficient profit margins and enough time on your hands to spare. But are you prepared to stop enjoying the activity that you used to look forward to doing the most after work? Once the initial high of earning a few extra paychecks wears off and you’re dealing with client request after client request, hobbies that once brought you joy and relaxation can quickly turn into a source of stress.
Turning a hobby into a job also means that you’ll have added pressure of keeping up with industry standards and constantly improving yourself, instead of doing things at your own pace and in ways that you enjoy the best. Self-expression is replaced with cost-optimisation. Worst of all, you might find that after completing all your side projects, you won’t have much time left to turn to another hobby for relaxation.
If you do work with physical crafts such as painting, crocheting, and pottery but don’t want the stress of monetizing a hobby you love, consider putting up your creations on platforms such as Carousell to earn a bit of extra change while keeping clutter at bay. While not exactly a freelance endeavour, many individuals may find this slower paced approach far more palatable.
Can your side hustle withstand external economic pressures?
The 2020 pandemic and more recent economic slowdown have shown how volatile freelance work can be. While you’ll most likely be relying on one or two core clients in the beginning, you’ll ideally want to diversify your client base so that you’re far less likely to wipe out your entire freelance stream during a downturn.
That said, nothing is ever 100% certain in life. If you work in an industry that is vulnerable by nature, you’ll be far more likely to experience fluctuations in your income. Whether it’s holding onto your full-time job or exploring more stable service offerings, you’ll want to plan your finances carefully so that you can continue paying the bills on a rainy day.
Risks of moonlighting in Singapore
Singapore’s employment laws do not restrict Singaporeans and Permanent Residents from working multiple jobs simultaneously. In fact, the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) has issued a statement encouraging employers to be supportive of their employees’ needs to take on additional jobs as long as no conflict of interest or contract prohibitions are involved.
In the absence of explicit clauses, freelancers should still exercise prudence and avoid activities that could be considered legal grey areas. Examples include taking on freelance assignments for clients who are in direct competition to their main employer, completing freelance work on company time, or using one company’s resources to service projects of another.
However, if you’re a Ministry of Manpower (MOM) work pass holder, engaging in activities apart from those delegated by your employer for additional income is strictly prohibited. This applies to training pass holders undergoing on-the-job training as well.
Is there a CPF cap for freelancers with multiple employers?
CPF contributions usually apply to full-time employees only, but we still thought that it’d be worth covering in case you land contracts where CPF contributions are offered. Employers are generally obligated to make CPF contributions for all their full-time employees regardless of the number of jobs a worker has.
This means that you can receive CPF for up to $6,000 for each of your salaries. For example, if you’re younger than 55 and earning $4,000 from two employers each, both your employers will contribute $680 each for a total of $1,360 even though your total earnings are above the $6,000 cap. Keep in mind that the CPF ceiling will be raised to $6,300 by 1 September 2023 and eventually $8,000 by 1 January 2026.
Supercharge your side hustle with the right tools and network
Starting a side hustle from scratch can be a challenge without the right people around to guide you. If you’d like to get your freelance career off on the right foot with curated training and mentorship, then Freelancer Nation might be the right place for you.
With over 10 years of experience with matching freelancers with clients, we’ll have you working on projects that are right up your alley in no time. Being a part of Freelancer Nation also means gaining access to exclusive professional circles, on-demand office spaces, and even having marketing done on your behalf. Click on the link below to find out more.
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