Why You Should Have Multiple Streams of Income

If you were to lose your job today would it cause a huge financial disruption? Would it change your lifestyle?

For an overwhelming number of people, the answer to that is “yes.” However, with a little bit of creative thinking you can change that. You may already know people who, in addition to their regular job, have added a side gig like selling cosmetics or jewelry. They start building up a supplemental income that could become greater than their main income or replace it in the event of a job loss. The goal is having several different sources of income so that if one fails it causes little or no disruption to your finances and lifestyle.

Many financial “experts” will tell you it is a good idea to save up 3-6 months’ worth of money in case you lose your job. Now, think of all the people you have known to lose their job in the past couple years. I can guarantee you know a few. How long were they out of work? 3 months? 6 months? a year? What happens when you run out of that money?

If, instead of saving the cash, you were to develop more than 1 income, the job loss wouldn’t be such a blow, and you wouldn’t have a clock ticking away a countdown until you go broke. The idea is that you are not using both or all of your streams of income to survive so that if one goes away, the others are available to sustain the loss. Let’s say I work my 9-5 job in the office but spend a few hours a week developing my side business selling jewelry, and I end up after time making about the same amount of money from each. Then I can live on one income and save up (or invest!) the other. If one were to suddenly go away, I could still live on the other one as I developed another different source of income.

So how do you do it? It depends on the time, resources, and risk that you have. But if you look around there are opportunities everywhere. My husband’s grandfather recently developed a new tool for pulling old fence posts out of the cement so I new post could be put in without having to dig up the cement and pour a new post holder. This tool is fantastic! If he were to patent it and spend a little time going to various local shops and repair businesses he could make a fortune. And it all came from thinking creatively to solve a problem that saves a lot of time. It takes a fraction of the time to fix a whole fence.

So start there. What needs do you or your family and friends have that you might be able to fix? Maybe you are not an inventor, but could you research some kind of invention or product that is not locally available and make it so? If there is something that could solve a problem or make life easier for people, why not get out there and see if you can order some of the product and ask local stores to carry it, giving you some of the profit?

Whatever your income streams are, we are not saying that you have to go out and get another 40-hour a week job. If you are already working 40-60 hours and trying to raise your family or keep up with life in general, then the last thing you want to do is go get another full-time job. You may have to invest some time in a second stream of income for a while, but once you get it going you should be able to spend less time on it or even hire other people to manage it for you.

Take a few minutes today to jot down some ideas of needs you have or that you know of others having. Make a list of your talents and skills. What areas overlap? Are there some places that you could start generating some more income? Talk with your spouse to brainstorm some ideas. Maybe there is something the 2 of you could do together to make more money and get to spend time together at the same time. The possibilities are endless. We just have to start looking around and making a conscious effort to notice them.

Tags: alternate income, streams of income