Diversified Income: Why It’s Smart
Diversifying your income is important because it gives you more security and freedom in your life.
With multiple streams of income you don’t have to worry about one main source of income disappearing. If you lose a job you won’t be completely devastated like someone who relies fully on their salary.
If you have income coming in from multiple sources like a job, side business, dividends, royalties, and other sources you are able to feel more secure in your financial position. You can rest a bit easier knowing that if one of those streams of income dries up you will still have all those other income sources coming in to make your overall situation steady.
Many people accomplish these by diversifying their income with have a job, having a side business, and having investment income. These are typical routes to diversifying income and they are common ones many people undertake. That’s not to say that they are the only ways to diversify your income, but they are most definitely the most common and perhaps the easiest ways to diversify your income.
Most personal finance bloggers, myself included, recommend diversifying your income because it will make you more stable in the long run.
Diversified Income: My Plans
Diversifying my income is a huge priority for me.
Though my job currently feels stable I know it’s not been in the past. (Update: I actually lost my job one year after this post even though I had great reviews and raises and coworkers who liked me. A job is never, ever secure unless you have tenure or some other secured position that you legally cannot be let go from.) This worries me and makes me think that having just a job with a salary is not a great plan for securing my future.
Additionally, I feel a strong pull to go into business on my own eventually. This feeling has always been strong even with a great job that I loved. Since this desire lingers despite having a great job at a great company it means I eventually want to take the plunge and have my own successful business.
I’d also like to increase my blogging income in time when I finally have time to focus on this area. It’s not something I’ve really focused on since starting my blog and it has just developed naturally. I want to change that in the future and make it more of a business as well.
Having multiple sources of income will help me feel much more secure.
Current Income Sources
Here are my current different income sources:
- Blogging Income
While I do have an additional income besides my salaried job, it is not much and it’s not very diversified. I’m really only in the beginning stages of diversifying my own income.
Future Planned Income Sources
In the future I’d like to have even more sources:
- Main/Side Business
- Personal Finance Blogging Income
- Blogging Products
- Rental Income
- Investment Income/Dividends
Yes, having all of these income sources firing at the same time is the ultimate goal! Well, maybe all of these without the salary since the rest should one day make it so that I don’t have to work for the man. You know, the diversified income dream!
Having something like that where we have income coming from 4 or 5 different sources would be amazing and feel way more secure than just the income from our salaries. I do always want at least a part time job that’s why salary is still on the list, but in the future I don’t expect it to be the majority of my income like it is now.
It’s almost frightening to just rely on a salary when that can be eliminated so quickly. One day you are working and then the next day you are not. Even if it’s something you see coming with a layoff then you are still without an income rather quickly (months instead of days). Diversification definitely sounds much safer!
Since I like to work and I’m not scared of things like being a landlord, I really think I can one day have all these different income sources. Though right now they seem very far off it’s definitely something I see being achievable as long as I keep my expenses low and savings high right now in the beginning.
Where does your income come from? Do you have income diversification plans?