Have you ever heard that you need to diversify your investments? I assume that you have. But, why not take that one step further and make it a point to diversify your income as well? After all, without a main source of income, investments aren’t even possible!
All too often, it seems that people run into some bad luck. Their car breaks down when they’ve got only a few digits in their savings account, which forces them to get cash loans till payday. Most of the time they get back on their feet and find a way to make ends meet again. But, it typically doesn’t come without some heartache and struggles along the way.
The prior scenario was a kind one – people typically get through the minor struggles like that, but what about job loss? Now that one’s a little tougher. Without a single source of income, things can really go south in a hurry. Think about it. How long would you last if you had absolutely no income? 1 month? 3 months? 6 months? Most of us wouldn’t make it beyond a year before all of our resources dried up.
Two is Better Than One
In the workforce, I often hear the phrase, “two heads are better than one”, and it’s completely true. With two minds hard at work, much more can be achieved. The same is true for two incomes. If one income is good, why not have two? After all, if one of them dries up on you (which you typically never see coming), then you still have the other income to get you through.
“But I don’t have time for two jobs!” you might be thinking. Well who said anything about working two jobs. The second income might be completely passive! For example, if you beefed up your savings enough, you could buy yourself a rental house and hire a property management company to take care of it for you. Not only will your house most likely increase in value, it will also provide you with some extra cash flow with very little work from you!
Yes, yes, I hear you again. You most likely don’t have an extra $100k lying around to invest in a rental property. Well, perhaps you’d have to get a little more creative. Did you know that almost anything can be turned into passive income? All you need is the proper system and the right employees. For example, this very website is fairly passive. Within the last 6 months, I have spent very little time upkeeping this page. There are 4 staff writers that handle most of the work for me. All I have to do is approve the articles that they’ve submitted and I’ve got another 2 days of free time on my hands (until the next staff writer submits their post).
If you can effectively diversify your income, you might not only avoid debt and poverty in the event of job loss, you might also get rich.
Do you have any plans to diversify your income?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.