How to Avoid Side Hustle Scams

Written By Melanie Green
Last updated September 23, 2021

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Making Money
September 23, 2021

Simple. Thrifty. Living.

Side hustles are all the rage. Whether you want to make money doing something you love or just need to put some extra cash in your pocket, they’re a great way to do it. When we’re looking for new ways to earn money, we often turn to side hustles. But how can you know if a side hustle is worth your time and effort? There are many ways to make money on the side, but some of them might be a side hustle scam. Here are some common pitfalls and how you can avoid them.

To identify a side hustle scam, it’s important to know what types of legitimate financial opportunities exist. It can be as simple as tutoring or babysitting. Or, you could make money by taking surveys online.

Most Common Side Hustles

  • TutoringTutors make an average of $20 per hour helping students of all ages learn common subjects like math and chemistry.
  • Dance Classes—If you enjoy dancing, you can earn extra cash by giving private lessons at a studio.
  • Babysitting—As a babysitter, you can market your expertise and sell your services online in a community that has a large child population.
  • Affiliate Marketing—If you have an area of expertise, you can earn money by blogging about it. You can also promote others’ products or services.
  • Consulting—You can make money by giving advice on a variety of topics including finance, marketing and business operations.
  • Surveys—Fill out surveys to make a little money on the side. They’re often filled out online or through an app on your smartphone.
  • Freelance Writing—Make extra money by writing articles or providing copy for others’ websites.
  • Transcription Services—If you can type, you can earn money by transcribing audio or video.
  • Selling Your Goods Online—Whether you love to craft or buy vintage clothing, you can sell your stuff online using sites like Etsy, Craigslist, Poshmark or Mercari. You can use social media to market your work and attract customers.

While there are legitimate side hustles out there, you have to be careful about being scammed. You only want to work for reputable companies and customers that will pay you fairly for your efforts. If it sounds too good to be true, it probably is. Here are some tips to keep in mind when it comes to finding the right side hustle.

They Ask for a Large Amount of Money Upfront

There are some types of side hustles that you will need to invest money into, including reselling vintage clothes or crafts online. However, reputable companies that hire you as a contract writer or to teach a dance class should not ask for any significant sums of money to get started. In many cases, you won’t have to pay anything at all. If a company you don’t know asks for a sizeable amount of money to get started working from home, be very wary.

Bad Reviews on Social Media and Glassdoor

If you’re considering working for a company that has received mostly negative reviews, it probably isn’t the best company to work for. If you do decide to work with someone with bad reviews, be very cautious. However, if the feedback is based on only one person’s negative experience, there’s no way to know what will happen if you work with them. However, if dozens of negative reviews exist, this is a red flag. There is a good chance that you will have a similar experience if you engage with this company.

It’s Not Sustainable

There are a lot of legitimate side hustles out there, but you have to be very cautious about companies that do not have a sustainable model. Make sure that the company has a clear plan to keep the business going. In many cases, this means you will have to buy into the business in some way. If it’s not easy for you to afford buying into the company or you have to recruit tons of people into a downline, this is potentially a scam.

It’s an MLM Company

Reps for MLM companies make money by selling products to consumers and by recruiting new reps into upline and downline schemes. Reps then make money on their sales, but also on the sales of their downline. If the focus of the MLM is too heavily on recruiting, it can be called a pyramid scheme. Generally, you’d be required to purchase a new consultant kit and continue to recruit, sell to customers and stock your inventory. MLMs are known to be predatory and almost no one makes money in an MLM. Those that do are often early adopters nearer to the top of the pyramid. Since there are many other legitimate side hustles to choose from, it is generally a better idea to invest your time elsewhere.

Pay Is Unreasonably Low

In many cases, you can make a very comfortable amount of money working from home. However, you shouldn’t sign up for a position that pays you a lot less than minimum wage. If a company is paying significantly less than the going rate in your area, it’s definitely not worth it. Writing an eBook for $100 or creating content for one penny for 100 clicks is unreasonable. These are signs of a side hustle scam.

Jobs That Promise to Pay a Lot of Money Are Almost Always a Scam

If you’re working from home, you can generally make a fair amount of money if you’re doing it right. However, there are very few legitimate jobs that pay $2,000 for each article or $300 to send an email. If it seems too good to be true, then it doesn’t have a strong chance of being real.

Businesses That Require You to Pay for Leads

If you’re working as a sales rep, you should generally be given leads. These leads should come from real customers. Having to pay for your leads is not something you should ever have to do, and it’s a sign of a scam.

There are tons of legitimate side hustle options if you know where to look. You can find something that fits your skills and interests and can help you make money on the side. However, it’s important to be very cautious about which opportunities you choose. Make sure you know what to look for in a side hustle before accepting an offer otherwise you could end up involved in a side hustle scam.

About the Author

Melanie Green

I'm a professional freelance writer living in Tampa, FL. I've been freelancing full-time since 2012, maintaining key relationships with my clients through always aiming to exceed their expectations. I have an MFA in Creative Writing with a concentration in screenplay writing from National University, as well as a Bachelor of Arts in Writing. I love writing about a wide range of topics including movies, technology, food and business marketing.

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