I am currently working my way through Cal Newport's book So Good They Can't Ignore You. One of the key concepts in his book is the necessity that you must develop your skills. Regardless of the industry or focus of your career, it is imperative that you build your skills. He calls this the craftsman mindset.
This is the way I approach every project I work on. I think like a craftsman. How can I do my best? How can I do better than my best? How can I improve my skills so the project will ultimately succeed?
Personal projects are a perfect way to practice. They are a perfect place to try new things and develop skills. They provide an outlet for building up those areas we lack, or to push ourselves to do greater work. "Real" work doesn't always allow us the opportunity to explore. Whether budget, requirements or other restraint, the real world isn't typically setup to allow true exploration. This is why I love spending time on personal projects. Your personal projects can operate within the confines that you define. You can even define your failure as a success!
Why would you want to fail? Well, it all comes back to the craftsman mindset. It revolves around skills. You can fail miserably and still be developing your skills. You see, failure now can lead to future successes. Failure now can provide invaluable information and an environment where we level up.
In the end, personal projects are like a factory where we can build new skills without fear. They provide an outlet to incorporate our interests and hobbies. This is why I constantly seek them out. For me, personal projects are the factories that help me up my game and build my passion.