Why Having Multiple Streams of Income Is a Good Idea

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Why Having Multiple Streams of Income Is a Good Idea

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Don’t put all your eggs in one basket.

I’m guessing you’ve heard that phrase before, and I would guess the literal meaning is that if you put all your eggs in one basket, and then you drop the basket, all the eggs will break, and you’ll be left with no eggs.

Experts are using the same logic when they recommend diversifying your investment portfolio, and it’s why I (and many others) highly recommend having multiple sources of income. This way, if one of your investments or income streams goes dry, you can still stay afloat.

Having multiple streams of income is also one of the reasons I gave my uncle for why I have more “job security” now than I ever did when I had a job (and all my eggs in one basket).

While some think that having a job is safe and secure, all the layoffs in recent years have been a harsh reminder to many that at the end of the day, a job is just one stream of income, and if something happens to it, things can be tough.

If you have a full-time job, there are still ways to add other streams of income, such as investment property, side gigs, a part-time job, affiliate income online, and so on.

But it’s easy to fall into the eggs-in-one-basket trap even if you work for yourself.

If the majority of your income comes from just one or two big clients/sources, what would happen if one of them suddenly stopped needing what you have to offer?

Finding other ways to earn money, and building multiple income streams, can help protect you from a sudden loss of income or other emergency.

In my first years as a freelance editor, I often worried about this because I realized the majority of my income came from just one or two clients.

If one (or both!) of them decided to stop hiring me, I would have been scrambling to make up that income in other ways. (And the same was true with every job I’d ever had, I just didn’t realize it at the time.)

By continuing to grow my editing business, starting another business, and experimenting with different offerings, I’ve ended up with nine income streams in the past few years, and I am working on adding more.

I often get asked what my different income streams are, so here they are:

Nomad Editorial

  • editing/proofreading
  • writing coaching
  • ebook
  • online programs (currently on hiatus)

Nomadtopia

  • coaching/consulting
  • ebook
  • online programs

Other

  • affiliate marketing (recommending others’ programs/services)
  • apartment rental

 

Of all of these, editing and proofreading still provides the lion’s share of my income, so if that work suddenly dried up, things would be a little tight, but that’s unlikely to happen because I have a broad client network, lots of word-of-mouth referrals, and there’s not one client providing the majority of the work.

And, I’m continuing to build all of the other income streams on this list, so I know there’s increasingly greater earning potential in a lot of different areas. If one starts to falter (or if I’m not able to do the work anymore for some reason), I can focus on other ways to make money.

How about you? Do you think it’s important to have different streams of income? What income streams do you have or do you want to build? Let us know in the comments!

 

This post is linked to the My Global Life Link-Up at SmallPlanetStudio.com. Hop on over and check out other posts on global living!

2017-04-26T21:21:14+00:00July 23, 2014|Money, Work & Business|15 Comments

15 Comments

  1. Jay July 24, 2014 at 8:05 pm - Reply

    Even though I have a full time job, I use my spare time to get additional sources of Income. We bought a holiday home in Turkey, and I used our trips there to gather information to create a travel blog and write and publish two Travel Guides. This led to some additional freelance writing gigs.

    I had targeted travel writing assignments – but as they’re in hot demand, I had the sudden realization that I could leverage my corporate experience to write business-related content. Many companies struggle with content creation for their business blogs, and I’m able to use my blogging expertise with my corporate knowledge to help them out.

    One of the clients I write business content for has just asked me whether I’d be interested in proof reading their marketing content as well. So the moral of the story, and the the lesson for me is that you never know where things will lead!

    • Amy Scott July 25, 2014 at 11:13 am - Reply

      I’m glad to hear that you’re building other income streams in addition to your full-time job, Jay.

      It takes time, but it’s worth it, as your story shows. You’re right; you never know where it might lead if you put yourself out there. Nice work!

  2. Paul Strobl July 25, 2014 at 9:44 am - Reply

    This is great advice. The key here is that most people who build multiple income streams do so one or two income streams at a time. Too many at once can be less effective for some people (I have proven this myself many times).

    Questions to ask oneself when looking at an income streams:

    How is this scalable? (group programs, ebook)
    Will this earn income while I’m not actively involved? (ebook, affiliate marketing, rental)

    • Amy Scott July 25, 2014 at 11:16 am - Reply

      Thanks for bringing this up, Paul; I too am guilty of trying to build too many income streams at once! It dilutes your time and your effort, so often they all end up growing less slowly.

      These are great questions to ask; thanks for sharing them.

      In addition to considering whether something will earn income while you’re not involved, I think it’s important to look at how much of your time something might take, and do what you can to reduce your hands-on time.

      Rental income, for example, seems hands-off, but there is the time of managing bookings, dealing with property managers, and so on that can still take up time if you don’t have good systems (or good help!).

  3. Cate July 27, 2014 at 2:05 am - Reply

    Yes! I was SO happy that I had started creating multiple streams of income when I still had a day job because when I got laid off, it wasn’t that big of a deal. I’d been ready to turn in my notice anyway. Now, I’m working on creating more streams of income because I know I won’t work with my current primary clients forever (even though I’d be very happy to work with them for a long time!). Plus, it’s just really fun to think up various ways to make money!

    • Amy Scott July 28, 2014 at 5:20 pm - Reply

      You said it, Cate! Having a layoff not be that big of a deal is huge.

      I agree, it is fun to think up different ways to make money! It’s all part of the adventure.

  4. Cate July 27, 2014 at 2:07 am - Reply

    And thanks for joining this month’s #MyGlobalLife Link-Up! 🙂

    • Amy Scott July 28, 2014 at 5:21 pm - Reply

      My pleasure! 🙂

  5. Karen Bradley July 28, 2014 at 3:00 am - Reply

    Awesome advice!
    I’m just setting up a new website http://www.twoaussiechicks.com and taking my skills and loves on the road from Australia to America as the first stop. I’ve always known there are better ways of doing things with a much higher reach than while working for someone else 9-5. My plan is to launch courses online to support my ground work of healing, while traveling and having a great time. I can’t think of anything better.
    Thanks for all the tips Amy. You’re an inspiration!
    Karen 🙂

    • Amy Scott July 30, 2014 at 12:18 pm - Reply

      You’re welcome, Karen! Best of luck with the new site and enjoy your adventures!

  6. Geri July 30, 2014 at 11:29 am - Reply

    I think most of us want to be independent and to be able to earn their income in various ways. Your article gave me some interesting ideas. Thank so much!!!

    • Amy Scott July 30, 2014 at 12:19 pm - Reply

      You’re welcome, Geri, glad it was helpful!

  7. Mike Huiwitz August 18, 2014 at 1:23 am - Reply

    Yup. I’d take multiple income streams than a single one any day.

  8. Lynn Lovejoy November 28, 2014 at 12:46 am - Reply

    I’m an attorney by day and a food blogger by nights and weekends at Order in the Kitchen 🙂 Although my blog hasn\’t produced a huge income yet, I have really only started working with commitment on it in the last month and the results have been astonishing. I think having this little extra flex income makes me feel more stable in my primary job. It also helps that my boss is super tech savvy and supportive of my blog (he even features a link to it on my attorney bio on our website lol!) So hopefully I\’ll keep this up and eventually have two solid sources of income 🙂

    • Amy Scott November 29, 2014 at 2:13 pm - Reply

      Sounds like a great plan, Lynn! It makes such a huge difference to have a supportive boss; not everyone has that!

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