From everyday blue collar workers to risky entrepreneurs, achieving financial security is a top priority for many people. This safety blanket allows you to endure unexpected hardships, pursue your goals, and live life on your own terms. Relying solely on a single paycheck can be risky and prove difficult for achieving this goal. What happens if your company downsizes, or you’re faced with an extended illness or injury that prevents you from earning? This is where building multiple income streams comes in. Diversifying your income sources helps create a layer of protection, and fortify your overall financial resilience. Let’s explore the benefits of having multiple income streams, different options to consider, and useful tips for getting started toward this goal.
Why Build Multiple Income Streams?
There are various reasons why building multiple income streams is a great financial move:
Increased Financial Security
Relying on a single income source leaves you vulnerable to unexpected events. The age old saying “don’t put all your eggs in one basket” applies to income streams as well. Having multiple sources of income provides a buffer if you lose your job, suffer a personal injury, or need to take time off for family reasons.
Many professions, from construction workers to athletes, carry a risk of personal injury. Even a minor injury can lead to lost wages and stacking medical bills. Without the help of a personal injury lawyer, you’d be footing the bill yourself. If your income depends solely on your ability to to work physically, building a secondary income stream can support you through recovery.
Greater Financial Freedom
Having multiple income streams can help you achieve your financial goals more rapidly, giving you more flexibility to pay off debt, plan for retirement, or invest in business ventures.
Peace of Mind
With backup sources of income, you can spend less time worrying about how you might handle an emergency and focus on what matters most.
Getting Multiple Income Streams Started
Building multiple income streams takes the right combination of talent, hard work, and effort, but the results are worth it. Here are some tips to get started.
Identify Your Skills and Interests
It’s always a great idea to build off what is already existing. Consider some things you’re good at and what you enjoy doing. Instead of putting in extensive effort in learning something new and running the risk of disliking it, you can develop an income stream that is lucrative and sustainable.
Start Small
Don’t bite off more than you can chew. Start with one or two income streams and add more along as your time and resources permit. Even having one additional source of income can provide greater long-term flexibility.
Be Patient and Be Persistent
Not all income streams are bound to make you rich. It takes time and dedication to turn it into a viable income supplement. Don’t get discouraged if you don’t see immediate results.
Exploring Your Income Stream Options
There are several ways where you can supplement your income beyond your traditional job. Here are a couple ways to get started.
Passive Income Streams
- Investing: Stocks, bonds, real estate, and even peer-to-peer lending can generate passive income. Make sure to invest within your risk tolerance level. Bonds are a great start for low risk investors with modest gains, while individual stocks carry lots of risk but the potential for high reward.
- Rental income: Affording a spare property can be a huge hurdle for many Americans. Starting small by renting out a spare room or even storage space in your garage can provide steady income.
- Digital products: This may depend on the individual’s skillset, but selling products online can be a great passive income source since it requires such little overhead. Things like online courses, e-books, or stock images and videos are a great option for passive sales.
Active Income Streams
- Freelancing: Offer your skills for independent contracting work. This can take shape in many different forms depending on your skills and experience, but common gigs include writing, editing, graphic design, photography, programming, etc.
- Side hustle: Sometimes you can turn your hobby into a money maker. Pet sitting, social media management, photography, or sports instructing are great contenders for side hustles.
- Content creation: Take a cue from the millennial and Gen Z playbook. Monetizing your blog or social media presence through affiliate marketing, sponsorships, and advertising can be a great source for supplemental income.
Your Path to Greater Financial Flexibility
Whether it’s creating multiple income streams to supplement your main source or creating a network of income sources to gain independence, this path is for those looking to achieve more financial security and freedom. Creating a diverse earnings strategy will allow you to take control of your financial future. Start exploring your options and build a path to a more secure financial situation.
