It is important to generate multiple sources of income. Different sources of income are a better idea than depending on a single source of income.
Why do you need multiple sources of income?
You’re surely aware of the phrase ‘putting all your eggs in one basket’. God forbid, if the basket takes a hit, all your eggs are gone. Wouldn’t it have been wiser to have eggs, read money, in different baskets, read sources?
A survey released recently showed that stress related to financial problems has impacted the health of Americans all over the country, with both lower income and wealthy households being affected.
Undeniable Logic of Multiple Streams of Income
The logic is undeniable. Just as it is recommended to have a diversified financial portfolio, it is also advisable to get income from different sources. If one of the streams gets dry, there’s always the other one to keep you afloat. It’s a classic risk diversification.
You can have a full time job and then add to the income with other sources. There is a limit to decreasing expenditure, but no limits to increasing income. How to create a second source of income?
- Get passive income.
- Passive income is a great means of generating recurring income that keeps building up by itself. If you want income for retirement, this is a great way without being forced to spend much time or effort to receive it.
- It includes renting out properties, returns from investments, or a royalty from a book that you have written and can keep selling for the next few years.
- Rent out a room or an apartment; invest some money in dividend stocks, create e-books and so on for how to get passive income.
- Investment in properties and real estate are other sources of income. Buy a condo or some property in vacation getaways, so that you can generate rental income.
- Affiliate incomes.
- Use your expertise to generate additional income. If you are wondering what the largest source of income is, start an online service business, such as dinner caterings, freelance writing, editing and proofing, online marketing. If you are good at writing books, launch a video course.
- Among the different sources of income, host events and charge for them. You can rent a conference room, bring in a famous guest speaker and host an event on topics that you are good at.
Top Benefits of Resorting to Multiple Sources of Income
Peace of Mind / Security
- Let’s begin with the obvious one. What would you do if you got fired overnight? No more paychecks, so how do you pay bills? I surely know what I would do! That’s because I have many bosses, which includes myself.
- The number of layoffs in recent times is enough to drive this point home. How safe do you think your job is? No job is 100% safe, especially not in times of recession. You could be caught off guard with a sudden job loss. In such times, your other sources of income could give you some breathing space to figure out your next plan and offer a temporary respite.
- One job offers only one stream of income, so when you have several sources of income, it increases your sense of security.
Eliminates Financial Stress /Achieving Goals Faster
- No more worries about paying the next bill if you have multiple forms of income.
- There’s no limit to your income. It’s all in your hands to increase avenues of earning.
- You will never be broke, so you can breathe easier with other streams of income.
- Health care costs are increasing. Creating a second income can go a long way while paying for expensive prescriptions or an unexpected medical emergency.
- An extra $100 a month could go a long way towards retirement savings, a vacation, paying up your student loans, turning your financial independence dream into a reality.
- When you generate many sources of income, it results in smarter way of money management. It does involve more work, but the payoff is totally worth it.
Strengthening Your Monetary Position
- Multiple sources of income come in handy in case you want to apply for a credit card. Many lenders are very cautious and will be ready to loan amounts to you, with proof that you have several sources of income.
- It will be easier to pay up on mortgages on your house, vehicle or credit cards.
- You can create holiday funds. You don’t have to stress about how you’re going to pay up for the expensive holiday. You can use your alternative source of income and breathe easy.
- Higher savings rate. You can invest these savings again, which will bring in additional income.
- Protection from unavoidable seesaw of economic cycles and market downturns.
Rational Not Magical
So now you know that relying on a single source of income could be a rocky road. If you want a steady or guaranteed income to retire peacefully, set up several ways of generating multiple sources of income, whenever and wherever you find the opportunity.
It’s not magic; it’s pure and simple rational thinking and step-by-step implementation.
It goes without saying that you need to get organized when you want to create a second source of income. Have a solid work plan to deal with the variety of activities. Plan out how much time you can actually devote to these activities, apart from your regular job or business.
It’s perfectly plausible that you’ll suffer some sleepless nights in the initial stages. Your body and mind will need some time adjusting to the additional workload.
Let’s be realistic here and take on only what you can stomach. Don’t bite more than what you can chew. You could even consider hiring help. It might be additional expense, but it could pay off in the long run.
Live it Up!
Just imagine all the different streams of different sources of income all pouring into your lake of prosperity. Even if one of the streams dries up, there’s water pouring in from the other streams. You can continue to live the high life!!!