Ready to pay off your debt? Want to stop living paycheck to paycheck? Need to save more and feel more financially stable?
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Earning more money can help you overcome most of these goals. When it comes to earning more and meeting your financial goals, creating multiple streams of income is the best route to take.
Why Should You Have Multiple Streams of Income?
These days, it’s harder to get by with a single source of income. Plus it can be unstable. If you lose your only job, it can be devastating to your finances.
If you have to wait every 12 months for a raise, your situation will probably progress at a slower rate. One job is not always enough, which is why income diversification has become so popular.
The average millionaire has around seven different sources of income. When you have income coming in from different sources, you’ll feel much more secure and equipped to meet your financial goals.
So, how should you go about diversifying your income?
Here are a few ideas you should consider.
Establish a Service-Based Side Hustle
Establishing a side hustle is one of the best ways to earn extra money and the options are seemingly endless. If you have certain skills or credentials, you can offer a valuable service and find people who are willing to pay you for it.
You can do things such as:
- Virtual assistant services
- Freelance writing
- Graphic design
- Social media management
- Pet sitting
The great thing about side hustles is that there are plenty of flexible work from home opportunities for people who are looking to earn money around their busy schedules.
I started freelance writing and blogging almost two years ago and used the extra money to pay off my car loan early.
Get a Second Job
If you aren’t earning as much as you’d like at your current job, you can always ask for a raise, find another job, or get a second job (or all three) to earn more.
Finding a second job and keeping it will depend on your interests, availability, and energy level.
I tried looking for a second job after I landed my first entry-level job out of college. I interviewed at a restaurant but soon realized I wouldn’t be able to meet their schedule requirements and work both jobs during the week.
However, I did not realize at the time there are work at home opportunities that could have worked with my schedule. Perhaps the same is true of you as well. If you find a job that is flexible and will allow you to work on your off days from your main job, you could make it work.
Sell a Product
This is a semi-passive way to earn extra money. If you like to make things, you can try selling your handmade items online on sites like Etsy.
You can also create a digital product like a course or a guide that will help people solve a common issue and sell it online.
If you don’t have any products of your own to sell, you might want to consider joining a direct sales company so you can sell helpful products that you believe in. Companies like Avon and Mary Kay are among some of the popular direct sales companies.
Invest in the Stock Market
This is a long-term way to diversify your income but once you start investing in the stock market, you’ll set yourself up to receive some passive income when you get older.
Investing is the key to building wealth, so you will need a little capital upfront, but compound interest will do its job and grow your initial investment over time.
Consider using a trusted online brokerage service like Ally Invest (formerly TradeKing) or Fidelity to manage your portfolio. Remember, you don’t have to have a ton of money to start investing in the stock market.
Invest in Real Estate
Another place you can invest any extra money is in real estate. If you save up enough money to purchase a property, you can flip it, rent it out, or join crowdfunded real estate projects.
Crowd-funded real estate involves teaming up with other investors to share the costs of investing in a commercial or residential rental property.
It may take a while to save up enough money to invest in real estate, but if you establish a side hustle or use any of the ideas for earning extra money on this site, you can start stashing money away from your side hustle or second job after you pay off your debt and boost your savings account.
Something I thought about to speed up the process would be choosing a duplex or triplex as your first investment property and living in one of the units. This is something my husband and I would like to do if we don’t choose to buy a single-family home when we get ready for homeownership.
Buying a multi-family property allows you to have a place to stay and you can rent out the other unit(s) to diversify your income.
Final Thoughts on Income Streams
When it comes to diversifying your income, don’t be afraid to think outside the box. Having just one source of income will make it more challenging for you to get ahead. Explore the variety of ways to earn extra money from starting a side hustle to investing in the stock market. You owe it to your future self to diversify your income with a mix of the above passive and active income streams.
How are you diversifying your income?
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