Side Hustle Glossary
55 termsUnderstanding the terminology is the first step to understanding your numbers. Here are the key terms you'll encounter when calculating side income.
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Creator Economy
7 termsAffiliate Marketing
Earning commission by promoting others' products through special tracking links. Commissions typically range from 3-50% of sales. Popular programs include Amazon Associates (1-10%) and software affiliates (20-50%).
CPM (Cost Per Mille)
The amount advertisers pay per 1,000 ad impressions. On YouTube, this determines how much creators earn from ads. CPM varies by niche: finance ($12-30), gaming ($2-8), lifestyle ($3-15).
Creator Fund
TikTok's program that pays creators based on video views. Pays approximately $0.02-$0.08 per 1,000 views. Requires 10,000 followers and 100,000 views in the last 30 days to join.
Engagement Rate
The percentage of your audience that interacts with your content (likes, comments, shares, saves). Calculated as: (Total Engagements / Followers) × 100. Higher engagement often means more valuable sponsorships.
Monetization Threshold
The requirements to start earning money on a platform. YouTube requires 1,000 subscribers and 4,000 watch hours. TikTok Creator Fund requires 10,000 followers. Meeting these takes most creators 6-18 months.
RPM (Revenue Per Mille)
Your actual earnings per 1,000 views after YouTube takes their 45% cut. RPM is typically 55% of CPM. This is the number that matters for your income, not CPM.
Sponsored Content
Posts or videos where a brand pays you to feature their product. Rates vary from $50 for micro-influencers to $100,000+ for major celebrities. Always disclose sponsorships as required by FTC.
Driving
7 termsAcceptance Rate
The percentage of ride or delivery requests you accept. Some platforms penalize low acceptance rates, while others claim it doesn't affect you. Know your platform's policies.
Base Pay
The minimum amount a platform pays per delivery before tips. DoorDash base pay is typically $2-4. Tips often make up 50-70% of total delivery earnings.
Cost Per Mile
The total cost of operating your vehicle per mile driven, including gas, depreciation, maintenance, and insurance. For most vehicles, this is $0.30-0.60 per mile.
Dead Miles
Miles driven without a paying passenger or delivery. This includes driving to pickup locations and repositioning between zones. Dead miles cost money (gas, wear) but generate no income.
Depreciation
The decrease in your vehicle's value over time due to use and age. For gig drivers, this is often the largest hidden cost—a $20,000 car driven 20,000 miles/year might depreciate $3,000-4,000 annually.
Multi-Apping
Running multiple delivery or rideshare apps simultaneously to minimize downtime between orders. Common strategy for gig drivers to maximize hourly earnings. Requires careful management.
Surge Pricing
Increased pay rates during high-demand periods for rideshare. Can multiply base earnings 1.5-3x during busy times like rush hour, events, or bad weather. Also called "Peak Pay" or "Boost" on delivery apps.
Financial Basics
9 termsBreak-Even Point
The point at which your total revenue equals your total costs, meaning you've recovered your initial investment. For equipment, this is how many paid uses before the gear "pays for itself."
Cash Flow
The movement of money in and out of your side business. Positive cash flow means more money coming in than going out. Even profitable businesses can fail from poor cash flow if expenses come before revenue.
Effective Hourly Rate
Your true earnings per hour after accounting for all costs and time invested. This includes prep time, driving to locations, editing, etc.—not just "active" earning time. The most important metric for comparing side hustles.
Gross Income
Your total earnings before any deductions. This is often what platforms display, but it doesn't account for fees, costs, or taxes. Never mistake this for what you actually take home.
Net Income
Your take-home earnings after ALL expenses and fees are deducted. This is what actually goes into your pocket. For side hustles, this can be 40-70% of gross income after all costs.
Opportunity Cost
The value of what you give up when choosing one option over another. If you spend 10 hours on a side hustle that earns $100, your opportunity cost is whatever else you could have earned or done with those 10 hours.
Overhead
Ongoing business expenses not directly tied to individual sales: subscriptions, software, storage rent, insurance. These costs exist whether you make sales or not.
Profit Margin
The percentage of revenue that becomes profit. Calculated as: (Profit / Revenue) × 100. A healthy reselling margin is typically 30-50% after all fees. Below 20% means thin margins.
ROI (Return on Investment)
The percentage return you earn relative to your investment. Calculated as: (Profit / Investment) × 100. If you invest $100 and earn $150 back, your ROI is 50%. Higher is better, but watch the timeframe.
General
6 termsDiversification
Having multiple income streams to reduce risk. If one platform changes its algorithm or fees, diversified income protects you. The Income Stacker tool helps plan diversification.
Income Variance
The fluctuation in earnings from month to month. High-variance income (content, reselling) can swing 50%+ between months. Low-variance (driving) is more predictable. Plan for bad months, not averages.
Passive Income
Income that requires minimal ongoing effort after initial setup. Stock photos, digital products, and ad revenue are examples. Often overstated—most "passive" income requires significant upfront work and ongoing maintenance.
Ramp-Up Period
The time between starting a side hustle and earning meaningful income. YouTube might take 12-24 months. Reselling can start in weeks. Factor this into your planning.
Scalability
The ability to increase income without proportional increases in time. Content creation scales well (same video reaches millions). Service work scales poorly (trading hours for dollars).
Side Hustle Stacking
Combining multiple side hustles for higher total income. Effective stacking considers time allocation, schedule conflicts, and diminishing returns. More gigs doesn't always mean more money.
Photography
5 termsExclusive vs Non-Exclusive
Whether you sell images on one platform only (exclusive) or multiple (non-exclusive). Exclusive gets higher commissions (35-50%) but limits your market. Non-exclusive earns less per download (15-33%) but allows wider distribution.
Model Release
A legal document giving permission to use a person's likeness commercially. Required for stock photos featuring recognizable people. Without one, photos can only be used editorially.
Per-Image Rate
Pricing for product photography or similar work where you charge a set fee per final delivered image. Typical rates range from $25-$150 per image depending on complexity and market.
Property Release
Permission from a property owner to use images of their property commercially. Required for recognizable buildings, artwork, or branded products in commercial stock photography.
Stock Photography Royalty
The payment you receive each time someone downloads your stock photo. Typically $0.10-$0.50 on subscription platforms (Shutterstock), but can be $10-$50+ on premium platforms (Alamy).
Platform Fees
6 termsFinal Value Fee
eBay's main selling fee, calculated as a percentage of the total sale amount (currently 13.25% for most categories). This is charged when your item sells, not when you list it.
Listing Fee
A fee charged to post an item for sale. Etsy charges $0.20 per listing. eBay offers free listings for personal sellers, but charges for store sellers beyond their allocation.
Offsite Ads Fee
Etsy's fee (12-15%) charged when a sale comes from their advertising on Google, Facebook, etc. Shops under $10k/year can opt out; larger shops cannot.
Payment Processing Fee
Fees charged for handling the money transfer, typically 2.9-3% plus a flat fee ($0.25-$0.50). Every platform charges this, sometimes hidden within other fees.
Platform Fees
Charges taken by selling platforms from your sales. These include listing fees, transaction fees, and payment processing fees. Total fees often range from 10-25% of sale price depending on the platform.
Transaction Fee
A percentage-based fee charged by platforms on each sale. Etsy charges 6.5%, for example. This is separate from payment processing fees and listing fees.
Reselling
7 termsBOLO (Be On the Lookout)
Items known to be valuable that resellers actively seek. BOLO lists are shared in reselling communities. Examples: specific Nike shoes, vintage Pyrex patterns, certain LEGO sets.
Comps (Comparables)
Recently sold listings for the same or similar items, used to estimate selling price. Always check sold prices, not listing prices. Filter by "sold" on eBay or Poshmark to see real market value.
Death Pile
Inventory that sits unsold for extended periods, tying up capital and space. Common problem when sourcing outpaces listing. Regular inventory review prevents death piles from growing.
FBA (Fulfillment by Amazon)
Amazon's service where they store, pack, and ship your products. Fees are significant ($3-6+ per item) but gives Prime eligibility and removes shipping hassle. Best for higher-priced, fast-selling items.
Retail Arbitrage
Buying discounted items at retail stores to resell online for profit. Common at Target, Walmart, and grocery stores. Margins are often thin (10-30%) but turnover can be quick.
Sell-Through Rate
The percentage of listed items that actually sell within a given timeframe. A 20% monthly sell-through means 1 in 5 items sells each month. Higher is better but varies by category.
Sourcing
The process of finding items to resell. Common sources include thrift stores, garage sales, retail arbitrage, wholesale, and online arbitrage. Sourcing time is often underestimated in profit calculations.
Taxes
8 terms1099 Income
Non-employee compensation reported on Form 1099. Platforms like Uber, DoorDash, Etsy, and Upwork send 1099s if you earn over $600. This income is subject to self-employment tax.
Home Office Deduction
A tax deduction for the portion of your home used exclusively for business. Calculate as a percentage of home expenses (rent, utilities) based on square footage. Must be used "regularly and exclusively" for business.
Qualified Business Income (QBI) Deduction
A deduction allowing some self-employed individuals to deduct up to 20% of their qualified business income. Complex rules apply based on income level and business type. Consult a tax professional.
Quarterly Estimated Taxes
Tax payments made four times per year by self-employed individuals (due April 15, June 15, September 15, January 15). If you expect to owe $1,000+ in taxes, you should make these payments to avoid penalties.
Schedule C
The IRS form used to report self-employment income and expenses. This is where you deduct business expenses to reduce your taxable income. It's filed with your personal tax return.
Self-Employment Tax
The 15.3% tax that self-employed workers pay for Social Security and Medicare. This is the employer portion (7.65%) plus your employee portion (7.65%). This is in addition to income tax, not instead of it.
Standard Mileage Deduction
The IRS-approved per-mile deduction for business use of your vehicle. For 2024, this is $0.67/mile. You can either use this or deduct actual vehicle expenses, but not both. Most drivers benefit from the standard rate.
Tax Set-Aside
The practice of putting aside a percentage of each payment for taxes. For self-employment, 25-30% is commonly recommended to cover both self-employment tax and income tax.
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Definitions are simplified for educational purposes. Tax and financial terms may have specific legal definitions that differ. Consult a professional for advice specific to your situation. Tax rates and figures reflect federal U.S. guidelines and may change; always verify current rates with the IRS.