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1 In 4 Pandemic Retail Investors Seek Side Hustles During Market Downturn

By: Syndication Cloud

For many retail investors, early 2021 indicated that the most lucrative side hustle to be found was only a few thumb flips and a blast of confetti away. All one seemingly had to do was head to the r/wallstreetbets Subreddit, take a look at what the masses of fellow retailer investors were high on that day, and hit buy on their Robinhood App.

The fervor for stock buying dwindled by summer, and attention had shifted to surging cryptos. When Bitcoin rose above $65,000 in November, social media was flooded with screenshots of investment portfolios showing massive gains.

Cut to the bear market of Fall, 2022 and Bitcoin has been asleep, hovering around $20k. Without the hype of Robinhood Subreddits and a Bitcoin bull run, retail investors are turning to side hustles to earn extra cash.

To better understand how they’re coping with 2022’s economic downturn, Snackable Solutions surveyed 1,000 American retail investors in October 2022. The survey found that 34% of retail investors started side-hustling during the pandemic. Additionally, 24% more started side hustling in the last year.

At a Glance…

  • 77% Pandemic Retail Investors Seek Traditional Side Hustles For Additional Income
  • 2 In 5 Retail Investors Started Trading During the Pandemic Lockdowns
  • Flexibility at Home During COVID-19 Lockdowns Empowered Women To Invest 
  • 39% Of Retail Investors Reselling Goods Online for Additional Income
  • 53% Of Liberals See Partial Economic Recovery; Conservatives Disagree

77% Pandemic Retail Investors Seek Traditional Side Hustles For Additional Income

The Snackable Solutions survey showed that many Americans who joined the investing frenzy during the pandemic are now pursuing side hustles for an additional source of income. Seventy percent of retail investors who started investing during the pandemic say they have an additional source of income. Of these retail investors, 1 in 3 say they are working a second full-time job for more income. Others said they are working a part-time job/side hustle at 23%, or multiple side hustles at 21%.

“Side hustles have always been around as a way to earn extra income. There’s always a consideration when starting a side hustle, as sometimes the old adage of ‘Jack of all trades, master of none’ starts to play true when someone stops innovating in their primary career. However, there have been many side hustles that were started in the pandemic that resulted in thriving entrepreneurial businesses.”

Financial Benefits, Flexibility are Top Motivators for Side Hustle

At 61%, financial benefits is the top motivator for side hustle(s) among pandemic retail investors. The potential for more flexibility is the second biggest motivator at 45%. Among genders, the top motivator is financial benefits for both men (63%) and women (58%). The runner-up is the potential for more flexibility (men 44% and women 45%).

Financial benefits are a top motivator within all age groups. Of 18-24-year-olds and 35-44 year-olds are motivated this most by money, with 69% of both age groups selecting it. Pandemic retail investors that are between the 25-34 (58%), 54% of 45-54 year-olds and 53% of those 55 and up said financial benefits are their top motivator for taking on a side hustle.

The older generation (54+) said their second motivator is to turn their passion to profit at 47%. The youngest (18-25) said learning new skills and more flexibility are among their top motivators (45%).

Michael Mulder, a retail investor makes his living as an account analyst for an insurance company. In the past, he served as the president of his university’s Investment club, which had about $250,000 in assets. According to Mulder, his investment strategy changed because of the pandemic lockdowns.

“Prior to COVID, I made investments regularly, and put my money into the stock market quickly. Since COVID, I held off, expecting innovation in the pharmaceutical industry. I don’t think that materialized, and we’re going to hit a recession. I haven’t made any new investments recently because I’m hoping there will be opportunities at the end of all of this.”

39% Of Retail Investors Reselling Products for Additional Income

Among all retail investors, reselling products online is the most popular side hustle with 39% selecting this option. The runner-up is creative freelance work at 29%.

Although side hustles are popular, many people have other things occupying their free time. Mulder coaches a school sports team and engages in volunteer work.

Mulder supports the sales team at his company, and said that his perceptions about working on a team changed also, as a direct result of the changes in the way he and his team worked, due to the COVID lockdowns.

“Prior to the pandemic, I saw myself as part of the team. Now that I’m working from home, I question how valuable being on a team really is. I feel like I’m on an island, away from my colleagues.”

41% Of Pandemic Retail Investors Reselling for Additional Income

Among retail investors who started investing during the pandemic (1-3 years), 41% have chosen to resell as their main side hustle. Creating and selling goods online as well as freelance creative work are retail investors’ second choices.

The majority of pandemic retail investors are choosing to resell as a second source of income except those who earn $150,000 or more per year. They turn to renting out their living space and/or freelancing technical work as their side hustle.

“It used to be that eBay was the dominant platform for reselling. Now people perform arbitrage between eBay, Facebook Marketplace, Craigslist and wherever they can find used goods. Reselling on social media has become a cultural norm. It’s ironic that Web2 platforms are driving users back to traditional side hustles like selling used merch. I expect we’ll see this trend continue as Web3 becomes a more dominant force in the way we communicate and connect with others.”

Liberals Fear Layoff, Conservatives Fear Bear Market

Conservatives, liberals, libertarians, and other independents finally agreed on one thing when the pandemic hit—it was time to start a side hustle. The ideological camps also agree on the best way to do so, with the plurality of all three selecting reselling the most.

“A side hustle is a good idea for two separate reasons. A more progressive person will think they’re sticking it to big business, where a more conservative person will think they’re picking themselves up by their bootstraps. Even though the reasons differ, both sides value independence.”

Of retail investors who started investing during the pandemic, liberals fear layoffs the most with 37% selecting this. Comparatively, conservatives fear a bear market more at 33%.

54% of Liberals See Partial Economic Recovery; Conservatives Disagree

Over half of liberal retail investors, who’ve been investing for 1-3 years, believe by 2024 the economy will be partially recovered. Comparatively, 42% of pandemic investing conservatives disagree. Rather, conservatives believe by 2024 there will be a recession/depression at 42%. Of libertarians, 41% believe there will be a recession/depression and 44% believe the economy will be partially recovered.

29% of Retail Investors Manage Less Than $5k

The Snackable Solutions survey found that 29% of retail investors manage a portfolio of $5,000 or less. And despite all the six-digit portfolio screenshots in 2021, the survey revealed that only 11% had $100,000 in their portfolio.

Allan Rosenthal, PhD is the Principal Partner at Micaddan Marketing Consultants, a full service Investors Relations firm currently working in coordination with Quantum Media of New York City. He saw the use of stimulus money in the market as a wasted opportunity, where short-term gains got in the way of long-term thinking and a potential rise in new businesses.

“During the pandemic, many potential investors found themselves home because offices across the country were closed.  In addition, the Federal Government provided unprecedented monetary stimulus in the form of at least three sets of checks sent to families across the country. Lastly, the Federal Reserve lowered interest rates to effectively zero providing unprecedented access to ‘free’ capital and liquidity.

“While most people who received stimulus checks used the proceeds to pay down debt, and make investments into the stock market, very few people thought it was a good time to start their own business.  Obviously, it takes long term thinking to start and grow a business and given the returns investors were seeing, it’s not surprising to see most of that money finding its way into the stock market or the cryptocurrency market.

“Imagine the surge in new ideas and small businesses that would have started had the stimulus money been used by investing long term in a personal business. I think this is one of the most understated things that occurred during the pandemic and many people who could have started their own business are probably upset with themselves for not doing so.”

2 In 5 Retail Investors Started Trading During Pandemic

Many retail investors took advantage of the market crash during the pandemic with the majority of retail investors (40%) saying they’ve been investing for 1-3 years. One in four retail investors said they’ve been trading for 4-5 years and 16% for 10 or more years. Those who’ve invested for less than a year and between 6-9 years are the lowest at 10% and 9%, respectively.

“The pandemic put a sunset on business in March 2020 coinciding with the falling stock market. After the initial shock of life turning on its head, people slowly became productive in a remote environment. With some extra time on their hands people that never played the stock market started buying some stocks that they ‘felt’ made sense. The good news was that coming out of the pandemic almost everything went up.”

Nearly 1 in 3 (30%) of retail investors who started during the pandemic are between the ages of 25-34. Close behind are those ages 35-44 at 26% and 18-24-year-olds at 25%.

“The performance of the stock market during the pandemic bought many novice investors/traders to the stock market.  In an age of ‘make money quick,’ such investors found that the most volatile and risky parts of the market gained MUCH more attention typically found in times of record investment into the stock market.  Even financial TV such as CNBC were routinely bringing guests on that were recommending extremely risky stocks.  History has suggested that when this happens, stock market bubbles occur, and  the people hurt the worst are the ones looking for a very fast return on their money. Most if not all of the money such investors used in the stock market has probably been lost and then some.”

Pandemic Empowered Women To Invest

The pandemic may have brought bouts of fear but it also encouraged women to look at other avenues for earning a little more cash.

Forty-six percent of retail investors who started investing during the pandemic are women and 31% of these women age 25-34. Gen X women aren’t far behind with 26% of them starting to invest in the last 1-3 years.

In addition to the 46% of women who started investing during the pandemic, 11% of women say they’ve been investing for less than a year. This is a large increase in women investing within 1-3 years compared to men. Of men, 35% say they started investing during the pandemic and only 10% say they have been investing for less than a year.

“We have been hearing how the pandemic brought women into the investment community. This seems pretty natural to me that when 100% of the world is in their home and communicating through digital means, you lose all stereotyping for gender, race etc. You’ve likely read many times that Wall Street has long been dominated by Men. The level playing field created in the pandemic naturally brought many women into the investing community.”

Methodology

All data in this report was collected using the online survey platform, Pollfish, and commissioned by Snackable Solutions. A total of 1,000 American retail investors who manage their own portfolios were included according to Pollfish’s algorithm and screening methodology, with a 95% confidence level and a margin of error of 3% on the total US population. Results for individual states will vary. The survey was conducted on October 16, 2022. All respondents were asked to answer all questions truthfully and to the best of their abilities. This survey, and data story were developed by Brand Boba.

For full survey data or to interview one of our experts, please email snackablesolutions@brandboba.com.

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