Like most people, you probably have only one main source of income. While having a single income source is fine, it can be risky.
What would you do if your main source of income dried up or if you suddenly found yourself unemployed? This has been the grim reality for many people post-pandemic, with job losses and forced leaves becoming all too common.
In March 2020, as businesses shut down and restrictions were imposed, the unemployment rate skyrocketed in April. By May, a staggering 23 million jobs had been cut. Not since the Great Depression has such a severe crisis unfolded. Needless to say, this has led to economic hardship for millions, resulting in decreased savings and record-high credit card debts.
This is why having multiple income sources is crucial. With multiple streams of income, you can rest assured that if one source falters, you won’t be left without any income.
Moreover, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals,” Richard Corley, analyzed IRS data and found that 75% of millionaires have multiple income sources.
It makes sense. When you have multiple sources of income, managing debt, saving for retirement, and building wealth become much easier.
Creating multiple income sources can be challenging, so let me share some common mistakes to avoid to successfully establish multiple income streams.
One of the biggest mistakes I’ve seen, including ones I’ve made myself, is not having at least one reliable income stream before venturing into creating multiple sources of income.
Perhaps it’s your 9 to 5 job. And that’s okay. Personally, I only truly grasped this concept when I became a financial planner. In the first five years of my career at the first investment company, where I was an employee earning W-2 income, I later became an independent advisor and eventually co-founded my own firm.
Subsequently, I became an independent contractor receiving 1099 forms. At that stage in my life, I remember being fixated on earning extra income through various ventures like real estate or multi-level marketing. However, this plan didn’t pan out entirely.
So, based on my experience as a financial advisor, I adjusted my income sources and created multiple streams, including:
– Websites: My financial business and GoodFinancialCents are two of the many income sources I’ve built over the years. Until recently, I also assisted people in determining their insurance needs through LifeInsurancebyJeff.com, earning some additional income.
– Investments: Investing has been a prominent way for me to earn additional income. While everyone’s investment approach varies, most individuals earn extra income through mutual funds, ETFs, or dividends.
– Media deals: Media deals have become another income source (an investor network dedicated to the media industry). A few years ago, I never imagined being in this position, but it has proven to be effective. Through producing YouTube videos and participating in interviews, I’ve found joy in showcasing myself. Through media deals, I’ve had the opportunity to represent and market products for major financial brands.
– Creating online courses: Additionally, I launched an online course tailored for financial advisors – “The Online Advisor Growth Formula.” The income from this single resource exceeded $100,000.
But I’m not the only one who knows this secret.
“When you decide to add another income source, I hope you consider one in the same industry or a parallel industry,” suggests Grant Cardone. “This approach allows those multiple income sources to complement and reinforce each other, ensuring their stability.”
He continues, as an expert in your field, you understand its intricacies better than others. Dealing with problems daily is part of your job. So, you may even come up with a business solution to earn additional income.
“The possibilities are endless, and this is a way of leveraging that knowledge without reinventing the wheel,” Cardone adds.
Don’t let others’ incomes influence you. Instead, focus on yourself. Do what you think is right, and don’t be swayed by external influences telling you that you’re not working hard enough. Not every income source is suitable for you.
For instance, I once had the opportunity to organize a marathon in a wine region with a former client. But there were two issues: I don’t drink, and I dislike running due to my bad knees.
While there was good money to be made, I neither understand nor have a passion for wine.
Relax and relish the feeling of contentment. You shouldn’t feel guilty for setting your own achievement and income goals. Wonderful things happen when you realize what is good enough. Eventually, you’ll excel.
Don’t just jump into something because someone else made $15,000 last month through blogging, a family business, becoming an influencer, or a profitable YouTube channel. Take a moment to think before diving in. Remember the potential costs you may pay in happiness, soundness of mind, energy, time, and self-respect. These are things that could be taken away from you.
In summary, there’s no reason not to take risks or strive for success. However, before taking a leap, determine what is best for you, not what others think is best.
Firstly, I want to share Nathan Barry’s story. It dates back to 2007 when Nathan was studying graphic design and marketing at Boise State University. He started building websites for companies but dropped out to start his own business. During the 2007/2008 global financial crisis, job opportunities dwindled, leading him to work as a contractor at a digital communication software company, later returning to freelancing.
His sales quickly surpassed $2,000 per month. Through his blog, ebooks, and software bundles containing useful code and resources, he self-published and earned a lot of money from book sales. Within 24 hours of releasing his first book, he made $12,000, and the following day, after releasing his second book, his income doubled from the previous day.
To build a subscriber list and promote his products, Nathan used Mailchimp to build his email list. Although he utilized email marketing services and automation platforms, he always felt their limitations constrained him. To address this, he founded ConvertKit and served as the CEO.
In a podcast interview, he mentioned thinking he could run both businesses simultaneously. However, as he couldn’t dedicate enough time, his book business saw a significant decline.
Nathan eventually reached a crossroads. Either shut down ConvertKit or invest more time to make it stand out.
“So I shut down my course business because I’m bad at doing two things at once,” he said on the Go-To Gal podcast. “I’m a focused person. Many people say, ‘I’m a serial entrepreneur; I run seven companies.’ I hope that works well for you – that’s great. But that’s not me. I run one company; I hope I do it well.”
When expanding into new income sources, people often let them overshadow existing projects. As long as you are willing to dedicate more time to the projects that require more attention, there shouldn’t be an issue. However, if you underestimate the new project, you might find it challenging.
For those unfamiliar with Shiny Object Syndrome (SOS), it’s a state of constant distraction driven by the belief that something new is worth pursuing. As a result, this can disrupt current plans or activities. It stems from childhood desires for new toys, wanting a new toy even when you don’t want to give up the current one.
Essentially, it involves chasing the next “big thing,” the current “trend of the month,” or quick money-making opportunities. While shiny objects may seem appealing, they don’t offer long-term benefits.
Determine your goals and see if this new opportunity aligns with them. Consider how this new income source will impact your life and career.
Understand the time required for the new opportunity and the goals you aim to achieve. Factor in the financial investment needed as well.
Only take action when there’s a clear benefit. Don’t overwhelm yourself by juggling too many tasks at once. Instead, focus on your current priorities.
Diversify your income, invest in passive income assets. Ideally, this shouldn’t require too much effort or mental strain.
To ensure smooth operation of passive income sources and prevent stagnation or even loss of more money, you still need to tend to them periodically.
One of the best examples is real estate investing. While you hope your investment portfolio generates rental income over time, you must also accept the responsibility of property maintenance and addressing tenant issues.
This management can be outsourced to a third party. However, you should also consider the associated costs.
Without proper reporting systems, tracking multiple income sources can be challenging. For instance, you might have four income sources to manage. To accurately assess income, expenses, and profits, external accounting help may be necessary.
People often won’t tell you that having multiple income sources also means taking on more responsibilities. However, this realization prompted me to identify which aspects of daily work I needed to avoid. You can achieve this by hiring virtual assistants, independent contractors, or even full-time employees. But the hiring process can still be time-consuming and may eat into your profits.
Q: What are multiple income sources?
A: It means having income from multiple sources if you’re hearing this concept for the first time.
For example, if you’re employed full-time and also drive for Uber or create YouTube videos, you have multiple income sources.
Q: What are the benefits of having multiple income sources?
A: Multiple income sources are essential because they allow you to continue earning when one income stream falters or disappears. There’s always a safety net to protect you when something goes wrong.
Earning extra income can boost your savings. Increasing funds in your savings account is crucial for handling unexpected expenses, rising living costs, and achieving goals like early retirement.
To accumulate wealth and achieve financial success, you need multiple income sources. Many millionaires have more than one income stream. Having multiple income sources can provide financial peace of mind because you’re not reliant on just one job or investment.
Q: What’s the best way to create multiple income sources?
A: Investing in rental properties, stock market investments, or selling products or services online are all methods of creating multiple income sources. To establish additional income sources, you should assess your skills and interests.
Q: Can full-time employees create multiple income sources?
A: Yes, they can. You can create multiple income sources while working full-time. Typically, people start with part-time freelancing or side hustles while engaging in full-time employment, gradually increasing their income and potentially transitioning to full-time self-employment.
Q: Which income sources are suitable for me?
A: When selecting income sources, it’s important to consider your skills, interests, and resources. Researching the market and identifying available and in-demand opportunities can also be helpful. Starting small and gradually developing multiple income sources is feasible.