In most cities in the United States, one income just can’t cut it anymore. Between a high cost of living, and jobs that may not pay what you’re worth, you may be looking for ways to earn more money and build your wealth. Enter in multiple income sources. Not only can they keep you afloat financially if you lose one of them, but they can also help secure wealth, pay off debt, and more. Here’s how you can start to build multiple income streams.
Build Multiple Income Streams – Decide To Just Get Started
This post was written by our talented staff writer, Kimberly Studdard.
The first step you should take to build multiple income streams is to just get started. Some people never even take that first step to change their finances, but you’re different. If you want to build multiple income streams, your first true step is to decide to get started.
Deciding this means that you’re open and ready to build more and work smarter to earn more.
Decide The Type of Income Streams You Want To Earn
Now that you’ve decided to get started and build multiple income streams, now is the time to decide the type of income streams that you want to earn. Now, there are two types of income streams that you can build, active and passive.
Active income is earned by trading time for money. Your full-time job, for example, is a form of active income.
Other types of active income streams include:
- Task Rabbit
- Side hustles including blogging, virtual assisting, etc.
- A second job
Passive income is earned by investing money or time upfront and earning money afterward without actively working.
Passive income streams include:
- Real estate
- Dividend income
- Interest income
- E-commerce such as ebooks, digital courses, etc.
While it’s okay to have one or two forms of active income, eventually, you’ll cap your earning potential if you’re trying to spread yourself between multiple opportunities. Your best bet would be to have one to three (max) active incomes and the rest should be all passive. Again, this will take time, but building them up is worth it.
Take It Slow
You’re not going to build five to seven income sources overnight. As much as everyone would like to start earning thousands and millions of dollars overnight, it just doesn’t happen. So take things slow.
Start with one extra income source.
This could be a:
- part-time job,
- a blog, or
- driving for Uber or Lyft.
It doesn’t matter what you choose, as long as you know you can manage it. Once you nail that down and start earning some income, you can decide if you’re ready to add on other streams of income. Then, you can continue to build and add on new income as you see fit.
After you’ve started a new stream of income, it’s important to monitor progress. This can be done in a few ways.
- First, are you actually earning enough money from this income stream?
- What does your ROI (return on investment) look like?
For example, let’s say you’re driving for Uber. You do this 10 hours a week and earn about $200 a week. Minus gas, wear and tear on your car, and other miscellaneous items like keeping bottled water in the car, are you earning enough income for the time and effort you put in?
If your answer is yes, great! Keep it up.
If the answer is no, it’s time to start looking at a different way to earn money. And that’s not all you need to monitor. You also want to make sure that you enjoy doing what you’re doing and can sustain it long-term. And by long term, I mean at least a year or more. Other points to monitor are if you’re growing, or at the very least maintaining the income stream.
Okay, now that you’ve decided to build multiple income streams, and have actually started to do so, the next step is to automate or outsource what you can.
- For example, if you’re building a blog, you can start automating it’s social media so you aren’t wasting time on that.
- Or, you could outsource some content or tasks to a contractor or virtual assistant?
For passive income streams like real estate investing, you could automate or outsource your rental process by hiring a property manager or company to manage your properties on your behalf. This also works for investments, as long as you trust those who will help you manage your income.
Build Multiple Income Streams – Is It For You?
Trying to build multiple income streams isn’t going to be something that you can do in a day or a week. But if you just get started, and slowly build up over time, you’ll be earning more while spending less time on things you don’t really enjoy. And that is a terrific thing to do when you’re trying to build wealth and be financially independent.
So what do you think? Will you build multiple income streams?? Will they be active or passive?
AUTHOR Kimberly Studdard
Kim Studdard is a strategy consultant and course launching expert. When she isn't spending time with her daughter and husband, or crying over This Is Us, you'll find her teaching other mompreneurs how to scale their business without scaling their workload.