How To Use Your Side Hustle To Build Wealth in 2024

You can use your side hustle to build wealth in 2024 by investing the money that you make into a high-interest fund and compounding the returns over time.

With this method, it is possible to turn your £500 per month side hustle into hundreds of thousands of pounds that could support you later on in life. In this article, we take a look at how to use your side hustle to build wealth and create financial security in 2024.

How To Use Your Side Hustle To Build Wealth - Complete Guide

If you want to turn your £500 per month side hustle into financial abundance, the following guide will show you the exact steps to follow.

It is important to understand that building wealth takes time. If you want to see results, you need to be prepared to invest your money for years.

If you’re looking to extra money now, take a look at our list of passive side hustles ideas that can become profitable in less than 1 month.

If you’re ready to turn your side income into true wealth, keep reading.

Step 1: Find a profitable side hustle that makes £500 (or more) each month

The first step is to find a profitable side hustle that can bring in around £500 per month. It is possible to follow this process whether you’re making less than this or more than less. However, £500 a month is a good number to aim for.

You can find some excellent side hustle ideas in the following articles:

1. Best side hustles for students

2. Best side hustles for teachers

3. Best side hustles for mums

4. Best side hustles for teens

5. Best side hustles that pay weekly

Or, here is an overview of some great side hustles that are easy for anyone to start.

Online tutoring

Online tutoring is one of the best side hustles to start in 2024. The rise of online learning means that there is a huge demand for virtual teachers that can help students to improve their performance in the classroom and in exams.

You don’t need any specific qualifications to become an online tutor. However, it helps to have some knowledge around the subjects that you plan to teach. Typically, online tutoring platforms will look for people who have degrees, but it is also possible to find jobs without one.

If you do not have a degree, you could consider teaching younger children who are in infant or junior school.

The best way to start online tutoring is to join an online tutoring platform. These platforms will partner you directly with students and make the entire process easy. Joining a platform also increases your chance of finding a student because you’ll be able to reach students from across the country.

In the UK online tutors get paid an average of £40 per hour. This means that to reach your goal of £500 per month, you will need to tutor for 13 hours. This is around 3.5 hours per week. Aim to find three students that need an hour of tutoring each week.

Renting out your car

Another easy side hustle to start in the UK is renting out your car. This works particularly well if you live in a big city with an airport.

Car rental companies rent out cars to tourists who have flown into the city and need a car to get around. These companies will pay car owners to provide them with cars. Most companies have criteria that your car must meet for it to be rented. Usually, the cars need to have driven less than 100,000 miles and be no older than 2008.

If you have a car that meets the criteria and that you do not use every day, you can make up to £600 a month by renting it out.

For more information on this excellent side hustle idea, read our full article on how to make money renting out your car.

Re-selling clothes

The reason that we have put reselling clothes on our list is because it is a side hustle that can be started by literally anyone. Furthermore, you do not need any funds to start. You can simply sell clothes that are already sitting in your wardrobe.

There is a huge demand for secondhand clothing as people try to stay away from fast fashion. This provides a great opportunity to make money from clothes that you no longer wear. As your side hustle grows, you could expand by thrifting clothes and selling them at a higher price.

To start reselling clothes on platforms such as Depop and Vinted you must be at least 13 years old. This makes it an ideal side hustle for teens looking to build wealth.

To hit the target of £500 per month. You will need to sell 100 items of clothing with a £5 profit or 50 items of clothing with a £10 profit. Of course, the number of items that you need to sell to reach this goal will vary depending on how much you can re-sell each item for. Vintage and designer clothing pieces can fetch high prices on second-hand clothing platforms.

Step 2: Find a high-interest investment opportunity

Once you have taken the first step and found a side hustle that pays around £500 per month, it is time to start looking for investment opportunities that can turn the money you make into long-term wealth.

Here are a few examples of investment accounts with high interest that would grow your money over time

Stocks and Shares ISAs

A Stocks and Shares ISA, often known as an Individual Savings Account, is a type of tax-efficient investment account that allows individuals to invest their money in various financial assets, such as stocks and shares while sheltering potential gains from taxes.

It serves as a "wrapper" for your investments, meaning that any income or capital gains generated within the ISA are not subject to income tax or capital gains tax, making it a great way to grow your money more efficiently.

Unlike a traditional savings account, which typically offers a fixed interest rate, a Stocks and Shares ISA provides the opportunity for higher returns over the long term, though it also comes with some level of risk as the value of your investments can fluctuate based on market conditions.

With a Stocks and Shares ISA, you have the flexibility to choose from a wide range of investment options, tailored to your risk appetite and financial goals, making it a popular choice for those looking to build wealth and potentially benefit from the growth of the financial markets.

In the UK, it is possible to invest up to £20,000 per year in a stocks and shares ISA. Here are some high options to consider that have previously generated good returns:

• eToro Stocks and Shares ISA

• Nutmeg Stocks and Shares ISA

• Halifax Portfolio Stocks and Shares ISA

• Vanguard Stocks and Shares ISA

Ideally, look for an ISA that has an average APY of between 5% ad 7%.

Index funds

An index fund is a type of investment fund that aims to replicate the performance of a specific financial market index, like the S&P 500 or the FTSE 100.

Instead of trying to outperform the market, an index fund seeks to match its performance by holding a diverse portfolio of assets similar to those in the chosen index. The fund's value rises and falls in line with the index it tracks.

This approach makes index funds a popular and straightforward investment option for both seasoned investors and beginners. Since they aim to mimic the overall market's performance, they tend to have lower fees compared to actively managed funds.

Additionally, they offer broad exposure to a wide range of companies, reducing the risk associated with investing in individual stocks.

Index funds provide an accessible and effective way to participate in the growth of the financial markets without the need for extensive financial expertise. In the past, some index funds have even managed to outperform inflation.

Here are some popular index funds to consider:

• Vanguard S&P 500 ETF (VOO)

• SPDR S&P 500 ETF Trust (SPY)

• iShares Core S&P 500 ETF (IVV)

Step 3: Automate your side hustle savings

The next step to building wealth with your side hustle is to automate the process of investing your income into your chosen investment account.

The best investing platforms will allow you to set up a direct debit each month. This makes the entire process easier and will prevent you from using your side hustle income for other expenses.

In this guide, we are using £500 per month as an example. However, it is important to note that you may need to pay tax on your side hustle earnings in the UK. Therefore, it may be wise to automatically invest 80% of what you earn and to save the remaining 20% for tax payments.

Step 4: Invest £400 for 20 years

The last step of the process is probably the most difficult! To turn your side hustle income into wealth, you will need to invest it for a long time.

For the purpose of this example, we will use 20 years. However, it is also possible to see good results by saving for 10 years.

We used a simple compound interest calculator to work out how much wealth you would have by saving £400 per month into an investment account with an APY of 7% for 20 years. The calculator showed that by following this strategy, you could potentially have built up £196,778.

When calculating this total, we assumed that you would have o initial investment. However, if you had an initial investment of £5000, the total would go up to £216, 126.

If you decided to invest for just 10 years with no initial investment, you would be sitting on a total of £66,318.

It is easy to see how following this strategy can help you to build wealth over time. Of course, it is possible to see even bigger results by investing more each month.

To begin growing your wealth, start a side hustle today and invest everything that you make.

Top Tips for Building Wealth with Your Side Hustle

When you break the process down into steps, building wealth with your side hustle is actually pretty straightforward. However, it is normal to run into obstacles along the way. Here are some top tips for building wealth with your side hustle so that you can be successful in 2024.

1. Lock your investment account. Locking your investment account is a great way to stop yourself from using the money that you have saved for small purchases. Many investment providers offer accounts that can be locked for a specific period of time.

2. Find an easy side hustle. If you follow the above strategy, you won’t be able to spend the money that you make from your side hustle for years. This can make it very difficult to continue working a side hustle that is difficult or boring. Therefore, it is important to choose an easy side hustle that you actually enjoy.

3. Ask your friends to hold you accountable. If you’re worried about slipping into your savings, ask your friends to hold you accountable for your monthly investments. Tell your friends about your plan and ask them to regularly check that you’re following it through. This is a great way to stick to the monthly investments.

4. Celebrate small wins. Another great way to motivate yourself through the wealth-building process is to celebrate small wins. This could be hitting financial targets or increasing the amount that you make with your side hustle. Celebrating these achievements will make everything more worthwhile.

How To Build Wealth with Your Side Hustle in 2024 - Conclusion

That concludes our guide on how to build wealth with your side hustle. The strategy that we have created works but only if you stick to it! Of course, it can take time to start earning £500 from a side hustle in the UK, however, this goal is totally possible with effort and persistence. Despite what some YouTube money gurus claim, there is no quick way to build wealth. For more money-making inspiration, check out our other articles on The Rich Girl Guide.

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