Maximizing Financial Security: The Power of Multiple Income Streams
How many times in life you heard these people say “Don’t put all your eggs in one basket” or “diversify!”?
It’s funny how these phrases often are used to talk about how we manage risk for money we already have. More often than not, it’s actually with how we spend our money on different investments. Diversification is a GOOD thing. It’s a way to hedge against risk so you protect yourself.
But not enough people talk about how we really need to diversify on the income side!
If you only have one income stream, you may be putting yourself at risk. Having multiple income streams is essential to achieving financial stability and security.
Companies love when they are your only source of income, because it’s a form of POWER over you. Keep squeezing you and you work until retirement, or until they feel it’s time to let you go.
Imagine if you could do something to shift some of that POWER and FREEDOM back in to your own control. Sounds good right?
What’s the real issue?
problem with relying on a single source of income is that it leaves you vulnerable to market fluctuations, economic downturns, and unexpected life events. If your sole source of income is suddenly taken away, you'll be left scrambling to make ends meet.
This should resonate with anyone who has live through the COVID-19 pandemic. Overnight people lost their jobs and livelihoods. Granted this is what most would consider a “Black Swan” event, but if we can learn to protect against something like that, then we can survive anything
What is considered “Another Stream of Income”?
A "stream of income" refers to a regular and recurring source of money that you receive on a regular basis, usually through work or investment.
For many, a primary source of income comes from a typical 40-hour a week job.
Have 2x 40-hour a week jobs may not be practical or realistic, so most people look for something that can be done as a side business. This often includes freelance work, rental income, or some other sort of investment.
What’s a good number of income streams to have?
A general rule of thumb is to have 3-5 different income streams to diversify your risk, but it’s very dependent on your personal goals.
The number of income streams provides risk protection. The type of income streams will determine how much additional money you’ll bring in.
When you’re determining your own plan, consider, are you looking to:
Protect against unexpected expenses
Have enough to bridge a gap as you look for a new job
Completely replace your primary income stream with a new business venture
How do I find Additional Streams of Income?
Let's talk about what to avoid when finding new income streams.
First and foremost, you should steer clear of any opportunity that seems too good to be true or requires you to pay money upfront. (This is very similar to how you would avoid the self-help hoax)
Legitimate income streams require hard work and dedication, not quick and easy money. Additionally, you should avoid following the crowd and not doing your research. Starting a new income stream takes work, and it's important to have a plan in place for how you will generate income, market your product or service, and grow your business over time.
What are some additional income streams I can start tomorrow?
Below are both some traditional & non-traditional jobs you can do to pick up extra cash. Many of these could even be turned in to extremely lucrative businesses if you can really run with them. You’re only limited by your own drive & imagination!
Real estate investing: You can invest in real estate by buying properties, renting them out and earning passive income. (AJ Note: This is an area for me I have a burning desire to get in to. I plan on covering my journey once I get started)
Social media management: You can manage social media accounts for businesses or individuals and earn money through sponsored posts or affiliate marketing. (AJ Note: I am a HUGE fan of affiliate marketing. It’s the absolute future that I think everyone will someday be involved in)
Art and craft selling: You can create and sell your own art and craft items such as jewelry, pottery, clothing, and other decorative items. Seriously, go open an Etsy shop or find a local craft fair. We have a friend who pulled in over a grand at a recent event she did.
Consulting: If you have specialized knowledge or skills, you can offer consulting services to businesses or individuals. I’ll preach day and night about the importance of having a coach for certain things. If you have a skill go share it and help others!
Podcasting: You can create and host a podcast and monetize it through sponsorships, affiliate marketing, or selling merchandise. This took off a ton during the pandemic and continues to grow. Even though it feels like a crowded space, not many stick with it and I think we’ll continue to see growth here in the future
The Wrap Up
I want everyone to succeed in life and would love to see people with financial freedom. At a minimum, though, you should strive to live a comfortable and stress free (or at least stress reduced) life. Protect yourself against the “What Ifs” and go live an awesome life!
Until Next Time!
-A.J. Zampella