Why Having Multiple Streams of Income Is a Good Idea
July 23, 2014 | Money, Work & Business
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:
- writing coaching
- online programs (currently on hiatus)
- online programs
- 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.
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!
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