A recent study indicated that almost half of employed Americans “hold a side job or have some other form of supplemental income.” These “side hustles” are on the rise not only with cash-strapped, low-income workers but also with higher earners. Several companies are fueling the trend...but should you invest in them? Berna Barshay, editor of HedgeFundGirl, weighs in.

Some of this may be the economy – when inflation is rising faster than salaries, consumers can either cut back on consumption or attempt to earn more. But a lot of the rise of the side hustle is due to structural factors and represents a generational sea change.

Internet 1.0 brought us eBay (EBAY), and with it the idea that selling used goods can be a source of extra cash. Selling used goods remains one of the most popular ways to earn money on the side, and now consumers can do it not only on eBay but also on Etsy’s (ETSY) Depop, The RealReal (REAL), Poshmark, StockX, and a long list of other sites.

In those early years, eBay was really the world’s biggest garage sale, and it wouldn’t have been possible without the internet. The internet has also made it possible for both skilled and unskilled workers to find extra hours on the side, with no shortage of apps and websites offering ways to work on demand.

The best known of these gig job providers are ride hailing apps like Uber (UBER) and Lyft (LYFT) as well as food delivery companies like DoorDash (DASH), again Uber, and Instacart.

Workers with specific expertise – like digital marketing, language translation, and graphic design – can turn to freelance project marketplaces like Fiverr or Upwork (UPWK), and those skilled with their hands might find work on TaskRabbit. If you like working with dogs, Wag! (PET) can help you find ways to earn cash walking pups in your free time, and if you prefer to babysit humans, Care.com can hook you up with that kind of gig.

The bottom line is finding this kind of side work was historically a matter of word of mouth, networking, and perhaps, classified ads. These days, work can be sourced much more efficiently using all these sites and apps I just listed, and a ton of ones I didn’t get around to mentioning. That’s the structural piece of this.

But before investing in these companies, keep something in mind: Some of them have been poster children for “Profitless prosperity,” never making any money. Ignoring that was super in vogue in late 2020 and 2021. People wanted to believe in the dream.

Somewhere in 2022, a preference for dreaming was replaced with a pragmatic eye on bottom-line profits. This shift in investor preference is why streaming companies are no longer judged primarily on subscriber growth but on progress towards profitability. Make sure you don’t fight the last market’s war.

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