Trading vs freelancing: Which is better for a side hustle?

Published: July 24, 2021 at 7:03 am

I recently had an interesting discussion with a 22-year-old. The person who prefers anonymity wanted an opinion on what he should focus on for a side hustle (source of extra income): trading – which he is interested in; has started learning a course or freelancing – he has done a course on digital marketing; is interesting in web design and content writing. He does not have experience in both.

There are two ways to seek additional income: exchange time and skill for immediate payout or gradually work on our skills, gain experience and build a regular income stream. When someone says “side hustle”, they most often seek immediate payout, but is trading suitable for this purpose?

There is nothing wrong with trading, but the possibility of a slip up is huge. Young investors are lured by tweets of huge returns made from trading calls. It takes time to understand that a high return with low capital does not mean much and most youngsters are high on enthusiasm and short on capital.

Amit Arora, a full-time trader, explains this quite well: I want to use stock trading for extra income: how to get started?

Paise se Paisa Banta Hai

That is, you need money to make money. I ask this question in my talks: Two brothers started investing at the same time and compare their returns after 20 years. One brother made an 8% return and the other 15% return. Who has more money?


Younger members in the audience assume the 15% guy has made money, but we do not know how much each invested. The 8% guy could have invested a lot more and made more wealth. Young investors typically fail to appreciate this aspect of trading or investing (see: How ten years of tracking investments changed my life).

Yes, it is possible to get regular income from different forms of trading, but to convert that possibility into a probability would take time and evolution that necessarily must involve gain and loss.

One cannot hope to become a boxer without getting bruised and blackeyed again and again. Very few traders talk about their blackeyes and knockouts. So trading is an evolution, a process where money can certainly be made, but one will have to go through the wringer.

So if you are really interested in trading, there is only one option: be ready for the long haul and view it as an “investment” that will take time to pay. If the need to increase income is immediate, it would be better to not rely on trading due to the risks involved.

This does not mean freelancing or digital marketing will pay well immediately. Yes, there are many content writing and web design opportunities available, and the quickest way is to contact digital market agencies and seek gigs. You may get paid immediately, but not well! So you must be ready to work for peanuts to learn the drill.

Freelancing is as much an evolution as trading is. While you lose money in trading (hopefully not all the time), you lose time freelancing waiting for the next assignment.

It might be safer to spend most of our free time trying to participate in the gig economy rather than put pressure on ourselves to profit immediately from trading, as it might prove counterproductive.

So I would recommend youngsters focus on side hustle opportunities that enhance their skillset with low overheads or without losing existing capital even if there is no immediate payout. If you like to trade, learn it without pressure and view it as a long term source of income.

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