Have Multiple Streams of Income
Let’s face it – based on what we’ve seen during the 2000s, the economy is unstable, and even in 2015, we’re still trying to recover. With the Dot-com bubble of early 2000s and the great recession of 2008, people in all career paths lost jobs, and it took between 6 months to 2 years to find another job. Even if they found another job, a good bit of them took a pay cut that they’re still trying to recover from even now. For those that were lucky enough to still had jobs during those economic crises, wages remained stagnant, and for many people, it ended up like a pay cut because the rising cost of living impacted the value of their dollar.
Sitting on your tucus and saying “woe is me” is not the answer. You need to financially protect yourself by having multiple streams of income, especially if you’re single. Why do I say “especially if you’re single”? As a single person, you don’t have the luxury of a partner to help share the financial burden if something goes wrong. Even if you have a partner to help share the financial burden, losing an income can have a devastating effect on your household, so having the multiple income streams will help soften the blow.
I can anticipate the next statement. “But I have children! I can’t work 100 hours a week, or I won’t have time for my children!” If you have children, it’s true that it may be difficult to find multiple streams of income, but there are ways to generate passive income, which requires some upfront work to start, but it requires little to no work to maintain.
Let me explain the difference between active and passive income.
Active income is income for which services have been performed. Think of it this way – “if you don’t work, you don’t get paid”. This is the income that you earn from your job, your consulting work, your business where you play an active role, or from your 2nd job teaching at a university.
Passive income is income that you earn from something already in place. If you’ve ever acted in a commercial or a TV show, or you released a hit song, you’re probably familiar with the term residuals, which is money earned every time the song or show is played, sold, or used in other media (like commercials). Passive income requires some upfront work, but after that’s done, you earn money even though you are not actively involved in it. I mentioned residuals as an example of passive income. Another example of passive income is rental property, investments in a business for which you don’t play an active role, and network marketing with downlines (you make commission from people who sell for you).
What are some ways that you can make extra cash?
The obvious one is to take a second job or freelance. I know that working part-time at the local McDonalds isn’t going to make much of an impact, but teaching at the local community college may. If you’re able to teach on-line, even better! You can also utilize and build your current skill set by doing freelance work for companies who are looking for short-term projects but they don’t have enough staff to do the projects, and they don’t want to hire new staff to do 3-6 months of work. While companies may want someone there on site, some companies are okay with doing the work off-site, especially for software and web development projects.
Another way is to invest money in real estate or stocks and bonds. This is a way where you can earn passive income on the interest and returns on the stock, or you can earn money from the rent collected from the real estate. The only caution is you can lose money. In the case of real estate, you may end up doing more work than you bargained for. As a landlord, you will be expected to solve tenant issues such as a broken air conditioner or broken heater, so if you’re not handy, or you don’t have time to fix problems, you’ll need to outsource the property management, or you may need to look at another option for an income stream.
Are you great in front of a camera? Can you write well? Can you play music? Are you crafty? If you answered yes to any of these questions, you can sell these products and services as a way to add funds. What’s nice about many of these options is they can become a stream of passive income for you. I know of a few people that do this, including yours truly! I want to give an example of someone that was able to do this successfully. You may have heard of Adam the Woo. He started making videos of his urban exploring excursions. He published them on YouTube, and he became famous. He does the initial work of planning, making and editing the video, but once it’s published, he collects money for the advertising, and he still collects money from videos that are over 2 years old. He was able to expand his opportunity by offering other gimmicks such as t-shirts and magnets. Someone else designed the logos, and he outsourced the production and shipping of the products to another company. He made enough money to quit his 9-5 job and do this full-time, so that’s not too shabby.
A great hybrid active/passive income stream is developing an app for the smartphone. You spend initial up-front time with designing, developing, testing and launching the app. After the work is done, and you have it up for sale, the profit becomes passive income. It doesn’t become active again until you have to write updates for the app.
I would love to hear your thoughts, opinions and experiences. Please post a constructive comment.
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