Diversifying your income, or adding multiple income streams, is a great way to protect yourself in a down economy. If you lose one source of income, you can simply turn to another to get you through hard times.
My quest to diversify my income has gone beyond the financial protection aspect — I actually enjoy it. I’ve experimented with several income producing methods: everything from working two day jobs to freelancing to building my own products.
But I’ve never found that one thing that just hooks me. So, I continue to experiment. And because of this, I’ve now built up multiple (albeit small) income streams from activities I enjoy.
If you’re looking to build multiple streams of income, but don’t know where to start, let me break it down for you. Here are three sources of income anyone can obtain:
3 Must-Have Income Streams
1. Your Day Job
Source number one is your day job. This is something you picked by 1) getting a degree or 2) applying for, so I’m hoping you’re happy with it. Your day job is going to be your most stable form of income (at least in the beginning), so you should definitely keep it.
Try paying all of your expenses with your day job income, so you can put sources number two and three to work for you.
2. Your Side Hustle
My favorite source of income is the side hustle. You control what you do, how much work you put in, and to some degree, your level of success.
Here are the requisites for picking a side hustle:
- You enjoy it (a must!)
- You’re good at it
- You can make money with it
Remember: This is a mini business you’re creating in your free time. You absolutely must enjoy doing this — or it won’t work out.
Unfortunately, it would take several posts for me to cover the ins and outs of getting your side hustle up and running. But take it from me: The hardest part is getting started. Once you start, everything else will come naturally.
And just in case you’re stumped for ideas, here are a few:
- Walking dogs
- Reselling items on Amazon, eBay, etc.
- Painting houses
- Freelance writing
- Teaching or tutoring
Keep in mind that what you enjoy doing and what I enjoy doing are different. Research and experiment until you find a profitable side hustle.
3. Your Passive Income Pursuits
The almighty passive income is what most people strive for. According to Wikipedia, passive income is an income received on a regular basis, with little effort required to maintain it. It is closely related to the concept of “unearned income.”
Your passive income could come from investing in the stock market, owning rental properties, or selling digital products.
Not all of these income streams are as passive as they seem, however. Let’s look at real estate. If you find a positive cash flow rental property, you’re still going to have to find tenants, deal with them, and handle maintenance and repair issues. Or, you could hire a property management company to do this for you, thereby making this a bit more passive.
How diversified are you? These three sources of income can be achieved by anybody. Hard work and determination will be required — but the earlier you get started, the sooner you’ll be able to enjoy the rewards.
How many sources of income do you have?