At any given time in life, I have always had several sources of income.
When I started working, as a teenager, I was teaching the piano to younger kids. I had five clients Monday to Friday. If I lost one, only 20 percent of my income was lost. Had I been a music teacher, laid off from my school, I would have lost all of my income.
Which is why you too need several income streams, especially in this tough job market. It will help you weather a storm much better.
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Even then, you aren't 100 percent safe. When I left my full-time job to become a freelance writer, I was very confident my handful of clients would provide enough for me to live on. I lost them all six months later. It was scary, but it pushed me to diversify even more.
Nowadays, I have three websites of my own. I earn money with them from advertising. I am also a freelance writer for a few more sites. On occasions, I do translation jobs as well.
My house is a guest house that I rent to tourists. Sometimes, I drive them to Mayan ruins, and I also earn an extra something by renting my motorbike to them. I own a rental property in the UK. In addition, I invest in gold and foreign currencies. I have stocks and shares that earn dividends. I make about $300 a month from peer to peer lending. Even the $5 or so monthly interest from my current account can be considered a small additional income stream.
And while most of them are pretty small, they do add up, and they make me stronger financially If one of my dozen streams dries up, it is no big deal. Furthermore, I am pretty diversified.
So the likelihood of a housing crash happening at the exact same time of the end of blogging, and tourism plummeting in Guatemala, is slim.
The ability to quickly adapt is a great quality to have. If you have two income streams, for example, a full-time job and a business you have on the side, and get fired from the former, you just need to work more on the latter to earn more. But you should also challenge the sustainability of it regularly, or you risk losing it all. I never take any of my income streams for granted. It’s not always a steady stream. Some years are better than others.
Here are a few ideas to add one income stream to your finances this month:
- Look for a high-interest savings account and transfer the money that is sitting unproductively in your current account.
- Become a driver for Uber
- Rent a room on Airbnb
- Become a teacher in a skill you have (knitting, languages, tennis…)
- Help your neighbors with moving, painting their house or mowing their lawn
- Walk the neighbor’s dog
- Create a website for a local business
- Become a social media manager if you are good with Twitter
- Invest $10 a month in an index fund or P2P lending
- Create a gig on Fiverr, such as proofreading, translating or formatting.
Generally, when I talk about diversifying to be financially stronger, people raise three objections: They don’t have the time, they don’t have the money, or they don’t know what to do.
I don’t have a lot of time either, so I try to find little things that I can do in my spare time. Writing is perfect for me. I can open my laptop while I am waiting for the bus, or jot down ideas on my smartphone while waiting in line at the bank. You have to start somewhere.
You can’t keep delaying taking action with “I don’t have money to make money.”
In today’s sharing economy, there are many ideas that will come to you. Depending on your own set of skills and circumstances, you can find more such gigs to add to your income streams, till it grows to a steady flow. Okay, not the Mississippi, but why not create your own Little River (named so in the state of Georgia)?