The Economics of Side Hustles: Are They Actually Worth It?

DISCLAIMER: I just want to preface this article by saying that I am not an expert on this topic, nor do I have real experience with them. However, I put what I do know in this article, so this is just my grain of salt on the subject. Please don’t purely base any decisions off of what is said.

Everywhere you look, side hustles are always being advertised as a money-maker. Scroll TikTok or Instagram and you’ll see students delivering food, tutoring online, etc. These are framed as a way to financial freedom or an “easy money” scheme. However, while they may work for some, they are not a guaranteed solution for everyone. Not all side hustles are equal, and some cost more than they’re worth.

This article breaks down the economics behind popular side hustles, mainly using opportunity cost to answer a basic question: Is your side hustle actually worth your time?

Why Side Hustles Look Better Than They Are

Have you ever seen those “expectations vs reality” videos? Side hustles are kind of like that. You will mainly only see success stories, and believe that it will work for you too. You see the person making $1,000 in a weekend, but not the hundreds earning far less. This is called survivorship bias: we notice the winners and ignore everyone else.

Another issue is that most people focus on total money earned, not hourly wage. Making $300 sounds great, until you realize it took 25 hours.

That’s where economics comes in.

Comparing Popular Side Hustles (Hourly Breakdown)

I chose the three side hustles that I see on TikTok the most. 

1. Food Delivery (DoorDash, Uber Eats)

• Average earnings: ~$18/hour (before expenses)

• Costs: gas, car wear, unpaid wait time

• Real hourly wage: closer to $13–$15/hour

It sounds great because its flexible with no boss to worry about and "easy money", but once you subtract expenses and downtime, the pay drops fast. Also, there are so many frustrating aspects with customer service, cancelled orders, etc.

2. Tutoring (In-person or Online)

• Average earnings: $25–40/hour

• Costs: almost none

• Real hourly wage: very close to listed pay

Tutoring benefits from skill-based pricing. If you have the knowledge, and the customer base, you can do pretty well in this business.

3. Reselling (Sneakers, Clothes, Electronics)

• Earnings: highly variable

• Time costs: sourcing, negotiating, listing, shipping

• Risk: unsold inventory

Some resellers make great money, but many don’t account for the hours spent not selling. Without a good customer base, you could be stuck with unwanted inventory that loses value over time. It requires a risky investment to buy the stock first.

The Most Important Concept: Opportunity Cost

Opportunity cost is defined as what you give up by choosing one option over another.

For students, time is limited. Every hour spent on a side hustle is an hour not spent on other important things such as:

• Studying

• Building skills

• Playing a sport

• Being with friends and family

If your side hustle hurts your grades or prevents you from developing high-value skills, the long-term cost can be massive. Make sure to think about what you are prioritizing!

When a Side Hustle Does Make Sense

A side hustle is economically smart when:

• The hourly wage is high

• Costs are low

• It builds a useful skill (communication, coding, teaching)

• It doesn’t interfere with school or health

Examples:

• Tutoring

• Freelance design or editing

• Coaching younger students

These hustles compound over time because your value increases.

The Bottom Line

Make sure to take into account a bunch of different factors before spending hours on something. Do your own research, and definitely don’t believe everything you see on social media. 

Instead of asking:

“How much money can I make?”

Ask:

“How is this helping me grow, and what am I giving up?”

That’s the difference between hustling and thinking like an economist.