Having multiple income streams and having your money work for you instead of working for it ensures financial freedom, many money experts and finance books advise. And this has become more necessary in the reality of today when the pandemic is threatening to wipe out some jobs and businesses because of the economic downturn.
According to investment experts, it is safer to have several activities that bring in revenue in small doses than one big outfit. Should one revenue stream fall, there is always a fallback plan in place. This spreads your inherent risks and cushions you from losses during those slow seasons.
“Simply put, more income streams equals security. It’s hard to rely on a 9 to 5 job for your entire livelihood with layoffs and pay cuts always right around the corner,” says Jeff Rose, a financial planner and author.
According to Rose, having multiple revenue streams broadens your business horizons rather than passively sit in the comfort of the single hustle you have mastered.
What to consider when looking for a side gig.
Where then, can you start in creating multiple sources of income? Here are three ways to broaden your revenue streams.
·Interests and talents. Again, experts recommend that you start with your passions. Look at your key interests, talents or hobbies and see if there is a way to monetise some of them. If you are a web designer, could you learn to blog, create content on one of your key interests and look for ways to monetise it by attracting online ads?
· Create a new idea or service. Financial experts say one should not be afraid of venturing into new areas of business. The Web, they say, is full of business ideas that can be tailored to create another revenue stream. As an example, if you have been receiving some income from your shares and stocks in listed companies, that could lead to one setting up a brokerage account and up the game of trading in shares. A word of caution though: there is always the danger of price volatility in such a hustle. This can wipe out your investments. Always seek the help of a investment adviser.
·Diversify a current product. “Smart people have learned that the best way to build wealth is to turn your active income into multiple passive income machines,” says Peter Kim, President, Passive Income MD. One of the active income sources is your present hustle, or day job. Can it be diversified? For example, it could be that the current product or service you are offering could be diversified or used to create a secondary product. With the current pandemic battering the beauty and cosmetics industry, would it be possible to create a jewelry line to augment the flagging sales?
With any new business endeavour however, risks are never far away. Experts say careful thought should go into the initial evaluation of any added hustle. “Quitting jobs with little to no resources to fall back on and taking a blind step into the dark is a risk that you just can’t take,” says Brenton Hyden, founder, Renters Warehouse.
In addition, creating multiple income streams means investing more time and money to support them. In most cases, it requires taking cash off your thriving hustle to invest in the new ventures. Again, experts say that you should only invest what you can afford to lose in the worst-case scenario.