The 7 BEST Side Hustles To Start ASAP

What's up, Graham? It's guys here! So, you know what's cooler than having one source of income? Seven different sources of income! And the average millionaire tends to agree with this too, at least according to their tax returns.

Now seriously, the IRS actually published their research on high-income tax returns to study the distribution of economic well-being, or in other words, why some people are richer than others. What they found was that the more sources of income you have, generally, the more money you make. In fact, a separate study found that 65% of millionaires have at least three sources of income, 45% of millionaires have at least four sources of income, and 29% of all millionaires have five or more sources of income.

And listen, I know there's going to be some math geniuses in the comments trying to call me out here, being like, "Wait a second, Graham! 65 plus 45 plus 29 is 139% of millionaires! This has got to be fake because you can only have 100% of something!" This is false, but remember, statistics like this are not supposed to be added up. It's kind of like saying 100% of you watching are human beings, but 50% of you smash the like button, and 25% of you get your two free stocks down below in the description because Weeble is giving you two free stocks, with one of them potentially worth all the way up to $1,400!

So get those two free stocks down below. When it comes to something like that, those are not meant to be added up to 175%. So there you go, there is your math lesson for today, and I digress. Here's the point that I was getting at: when the IRS publishes information that says that two out of every three millionaires has at least three sources of income and then breaks down exactly what those income sources are, it's worth listening to and diving in deeper to understand exactly what those are and how you could replicate those for yourself. Then one day, the IRS can use your tax return to explain why you became so rich, which obviously is because you subscribed and hit the like button, because both of those are free to do!

So with that said, here are the seven different sources of income that the IRS has analyzed and exactly how you can set these up for yourself. Enjoy!

Now, the first and probably the most common source of income for most people is their main job, or as the IRS calls it, their earned income. This is pretty much where everyone starts off. It's the equivalent of you working a normal 9-to-5 job, or being on a salary, or working a commission as your main source of income. Think of this one as no different from you going to a job during the day and then coming home to watch endless hours of YouTube until you fall asleep at night. For most people, this just becomes the cash cow that brings in the most income and that funds all the other income sources I'm about to mention in this video.

For me, initially, this was working as a real estate agent. That was my main job for almost a decade, and that made up the majority of my income until really just recently. But if it wasn't for that, there would have been no way I could set everything else up like I'm about to mention. My recommendation is to think of this income source just as a launching pad to set up everything else. As long as you have this one taken care of, everything else can fall into place. This income source is going to be your biggest priority until your other income sources start bringing in more money.

And that brings us to this: enter now the second source of income—dividend income! Say that five times! Dividend income! Income, never mind! Anyway, this one is probably the easiest second income source for nearly everybody watching this to literally start right now. It's really as simple as this: go to any free stock trading brokerage like Weeble, where you can get two free stocks down below in the description. Then go and invest in any sort of dividend-paying stock out there, and bam, you're done! Now you officially have a second source of income!

Now here's how that works: when you go and invest in a stock like this, what you're really investing in and really buying into is a small ownership share of that company. So, yeah, if you want to be that guy, you could go and buy a one-dollar fractional share of Apple and then claim that technically you own a small portion of the company. And by small, I mean one two trillionth of it! But I digress.

Now that you own a small piece of that company, some of those companies will pay you out a dividend, which is a really fancy word for just saying they're going to pay you out a small portion of their profit because you now own a small portion of the company by buying their stock. Now, with their Apple example, they're going to be paying you a 0.65% dividend annually, which means for every $100 you invest, they're going to be paying you back 65 cents in passive income. That also means you'll report that to the IRS so they can make a survey about YouTube!

Okay, but jokes aside, plenty of stocks pay a dividend. They could range anywhere from next to nothing to way over 10%. Like, here's just a few random examples: we have Simon Property Group, which is a company that owns and manages retail space and malls; pays you a 7.87% dividend on your money. Exxon pays you 8.67%, and 3M pays you 3.57%, and so on! The possibilities here are endless, but this is something that you could set up literally in just a few minutes. Even something like an S&P 500 index fund, which is something I mentioned here all the time on the channel, is something good to invest in. That I invest in pays a 1.74% return on your money as it stands right now, so for every $100 you decide to invest here, you're going to be making $1.74 every single year in passive income as a dividend, and you get to report that to the IRS as, of course, your second source of income.

The third source of income is tied pretty closely to the second, and that would be capital gains. This is what happens when you sell your investment for a profit, and the amount you're taxed on is called your capital gains. It's pretty much the difference in price from what you paid for it versus where it was at by the time you sold. For example, if you buy a stock for $10 and then you sell it for $25, that $15 difference in profit is what's called your capital gains, and the IRS calls that another source of income. That's also another way you can make money investing in the stock market because, unlike the second source of income, not all stocks pay dividends. Instead, many stocks are what's known as growth stocks, in the sense that what they don't pay you as a dividend just gets reinvested back into the company, causing the stock price to go up.

It's kind of like buying a $100 stock, and instead of you getting paid a 5% dividend, the stock price just goes up 5% a year. At the end of the day, it's pretty much the same thing, except you're not going to be taxed on the value of that stock until you actually go and sell it. Unlike dividends, where you're going to be taxed at the end of the year depending on how much money you've made, not only that, but the capital gains tax rate is generally significantly lower than you pay on dividends when you've held that investment for longer than a year.

Just take a look at this: if you're single earning less than $40,000 a year, you're going to pay nothing in federal income taxes for long-term capital gains. After that, there's just a flat 15% federal tax for capital gains when you make above $40,000 and then just 20% from making above that amount. On the other hand, when you hold an investment for less than a year, or you have an unqualified dividend payment, you're going to be paying taxes at your ordinary tax rate, which is significantly higher. That's the reason why most wealthy investors prefer growth stocks, because not only are they not taxed on dividends every single year, but they can also have total control about how much they sell and when they sell, so they can lock in some of those sweet, sweet long-term capital gains tax rates.

After that, we have another very common one that almost all of us have if we have a bank account, and that would be interest income. This happens when you keep your money in a high-yield savings account or basically any bank that pays you even a slightly remote amount of interest. Chances are, at the end of the year, they give you a 1099 interest form with how much money you earned so you could report that money to the IRS. This one is not just limited to savings accounts either; this could also be from buying into a CD, a bond, or just lending someone money and getting paid back with interest.

Now, this one is different from dividend or capital gains income because interest income is generally taxed at your ordinary tax rate, so you don't get any special tax treatment for holding onto your investment for longer than a year. We're putting more money in the bank account and getting paid more interest. When it comes to this tax, it's tax! But technically, this one is another source of income, and most of you watching probably have it. If not, and you don't have this source of income, then I would highly recommend you open up a high-interest savings account with anything like Ally Bank, Discover Bank, Redneck Bank, Amex Savings, or CIT Bank, or anything basically that pays you more than a 0.7% interest rate on your money. At least then you would be making something, whereas otherwise, you might be making nothing.

That also means that—very good news—if you have a job, if you have a savings account that pays you interest, and you invest in stocks, then technically that means that potentially you might have four different sources of income already! The fifth source of income is something very close to my heart, and that would be rental income. Personally, this one is my favorite one on the entire list, and I've spent the last eight years using pretty much all of my income to buy properties and then rent them out for long-term cash flow. For most people who want to invest in building wealth, real estate has some really unique tax advantages and it's very profitable for people who don't mind putting in the work.

Just buying one property could have so many multiple sources of income within it. For example, if you buy a property and it goes up in value and you sell it, that could be long-term capital gains. Then, if you rent the property out for profit, that would be rental income. Of course, you could just reinvest the rental income back into the stock market to make even more money. You also have the power to leverage your money here, which is where you borrow most of the money from the bank to buy the deal. For example, if you want to go and buy a million dollars worth of Tesla stock, unless you're buying with margin, you're gonna need all one million dollars available.

But if you want to buy a million dollars worth of real estate, you'll only need about $200,000 as your down payment, and then a bank is going to lend you the rest using a mortgage. You're also able to depreciate the value of the property against your rental income to reduce your taxes. I won't make it too complicated, but here's just a quick example: the IRS says you could depreciate the value of the house over 27.5 years. So if the value of the house is $275,000, the first $10,000 you make every single year in rental income is pretty much tax-free. Of course, it's going to be taxed when you sell the property in the future.

But then you have what's called the 1031 exchange, which allows you to indefinitely defer paying taxes by exchanging one like property for another. I've also seen articles that claim 90% of millionaires are invested in real estate, and even though I can't find any actual studies to back this up, it does seem pretty believable to me that so many millionaires would have their money tied up in real estate just to protect their wealth from inflation.

So for anyone looking to get started, I would highly recommend you begin with house hacking, which is where you buy a multi-family property where you can move into one of the units, rent out the others for cash flow, and that pretty much allows you, when done right, to live for free. That gets you into the game; it gets you a free place to live, and potentially you could even make a profit on top of that. Then you just repeat that process over and over and over again, getting some of that sweet, sweet rental income.

Now these last two are a little bit more specific, but number six is profits from a business they own. This might also include having a side hustle or a second job because you don't need to own another business to make more money. I seriously think this is probably one of the most under-utilized income sources that people just don't take advantage of, and that stops today! Working any type of side business that has the potential to grow completely independently from your main source of income is not only a good way to make more money, but also diversify yourself in case something happens to your main job, and you need something to fall back on.

I just want you to think of this and ask yourself the question: what do you do every single night between 6 PM and 12 midnight? That's six hours a day, or pretty much an extra full workday every single night that most people don't take advantage of. If you want to get ahead or you want to make more money, make that time count and put it towards another project, or a side hobby, or that business you've always wanted to start! Like on my second channel, The Graham Stephan Show, I probably interviewed hundreds of people at this point and anytime someone tells me they don't have the time to do something, we get down to what they do between 6 PM and 12 midnight. Most of the time, it's hanging around doing nothing productive, and all of a sudden, it's like, "There you go! There's your time!"

Or, as another example, this channel that you're watching right now was my side hustle between the hours of like 7 PM and 1 AM almost every single night. I did that for two years, even though on YouTube, I was only making a fraction of what I was earning as a real estate agent. That was until YouTube took off, and then I flipped those around, and then worked YouTube during the day and then would do my extra real estate work at night. But that would not have happened at all if I didn't end up using my nights productively or work towards something that I was really passionate about. So I encourage you to do the same thing as well—start a side business, do a side hobby, or anything separate from your main job to make money. Like it's never a good idea to place all of your eggs in one basket, just like it's never a good idea to place 100% of your income on one income source.

And finally, the last source of income according to the IRS is royalty income. And no, not that type of royalty! The royalty is in you get paid a licensing fee for a product or service that you've created once, and then you get paid on it ongoing in the future. Fun fact: when I was 17 years old, I was a drummer in a band, and we got some of our music played in a few TV shows like The Mentalist, House, and a few other shows that were back in 2007. For a while, I was receiving royalty checks every time our music was played in these TV shows. First, they were coming in at like $10 to $20 every few months, and then they dwindled down to like $10 to $20 cents and now they're like a few cents, maybe every year or so!

Anyway, the takeaway from this is that you could absolutely create something once upfront that will continue to make you money as long as people will buy it and as long as it sells. I know this is way easier said than done, but things like YouTube videos, eBooks, blogs, websites, merch—things like this will continue to sell themselves as long as they exist. Like, most of my YouTube videos are situated in such a way where I can make a video once, like how to invest in a Roth IRA, and as long as people type in and search for how to invest in a Roth IRA, my video should come up on the first page. Every time someone clicks on that video, I will make anywhere from about one to two cents depending on how much of that video they watch.

So that's a good reminder for everyone who has not started up a Roth IRA yet—make sure you watch that video and start up a Roth IRA! All of this is really just about starting with one main income source, like your day job, and then using that to funnel towards building everything else, and parlaying that into something bigger and bigger. For example, right now, I probably have like 12 sources of income that all started with me working as a real estate agent, using that money to buy rental properties and index funds, then working as a side hustle making YouTube videos, talking about working as a real estate agent and investing in rental properties and index funds—which eventually led to creating multiple channels, two programs, affiliates, a mentorship group, probably too much to count at this point. Links down below in the description if you're interested!

But all of that just began with one income source, and over time, it just expanded. Now my income is fairly well-diversified; that way, if something happens to one, I would have a multitude of other things to fall back on. I highly recommend you do the same. The whole point of this video is to get you thinking about the next step, and once you understand how the process works, you could begin working towards it—and of course smashing the like button for the YouTube algorithm!

So, with that said, you guys, thank you so much for watching! I really appreciate it! Make sure to destroy the subscribe button and the notification bell. Also, feel free to add me on Instagram; I post it pretty much daily. So if you want to be a part of it there, feel free to add me there. As in the second channel, The Graham Stephan Show, I post there every single day! I'm not posting here, so if you want to see a brand-new video from me every single day, make sure to add yourself to that.

And lastly, if you guys want two free stocks, use the link down below in the description, and Weeble is going to be giving you two free stocks when you deposit $100 on the platform, with one of the stocks potentially worth all the way up to $1,400! So if you want those two free stocks, use the links down below! Let me know which two free stocks you get. Thank you so much for watching, and until next time!