So, you want to build multiple income streams. Great! If you’re like most people, though, you’ve heard the following as the recipe to success:
“Go to college.”
“Get a stable job.”
“Work hard.”
Yawn.
Many of us have heard various versions of well-meaning advice like this for how to make money and create a stable financial future.
We’re groomed to focus on one main source of income. And while that main income stream is producing and paying well, focusing on it seems like a great thing.
But… if it goes away (which we all know can happen – look at 2008), we can suddenly be left with bills to pay and groceries to buy and no money to do either — especially if we haven’t saved enough money to maintain our lifestyle.
Basically? The one-income-flow advice sucks. It keeps you in a position in which any one event can devastate your financial future. Ain’t nobody got time for that.
That’s why it’s important to shift the way you think about earning to the “trifecta income rule.”
The rule is that at all times, you should have three flows of income.
Simply put, multiple income streams mean increased financial security. You aren’t putting all of your eggs in one basket. Most millionaires already have this down. In fact, on average, they have a minimum of seven income streams!
So, if you’re still relying on one source of income, it’s time to upgrade to the trifecta model. Let’s talk about a few income streams you might pursue to diversify your income.
Freelancing
The most common initial streams of income are obviously a primary salary and maybe the secondary salary of a spouse. And while many see that as just fine and wonder how they would even have time to add anything else to their plate, they’re overlooking the quickest way to earn extra income: freelance work.
Is there a demand for what you do in the freelance world?
Graphic designers, training designers, computer engineers, and coding specialists are always in demand for side jobs – and those are just a few examples.
Plus, there are many websites now, like Fiverr and Upwork, that allow you to look for freelance jobs and send out proposals, or display samples of your work and let the jobs come to you.
Either way, if you put in a little effort and some of your extra time, you can easily create multiple income streams by doing freelance work. And one of the benefits is that since you’re selling your skills rather than a physical product, overhead costs are minimal.
Course Creation
Is there something you know a lot about?
Building birdhouses? DIY furniture? Dog training? SEO?
Any of these things can be turned into a course to be sold online. If you have the knowledge or can acquire it on a subject that people are interested in learning about, you can create an online course to sell to your audience.
For example, as a female entrepreneur, you’ll find that there are many other women who are looking for insight into building a business, so there’s a huge market to sell courses and programs to help those interested along the path of entrepreneurship.
Hobby Businesses
Etsy is the hub of hobby businesses right now. Do you like to draw or sew? Is there something you enjoy making? Take some time to think about what you enjoy doing and how you might be able to turn it into a profitable income stream.
If you enjoy baking, grab a booth at a local farmers market or set up a pop-up shop to sell your baked goods. If you’re the queen of witty phrases, figure out how to add your wit to T-shirts and sell them on Etsy.
Or, if you’re a graphic artist, sell your prints online or take custom orders. Hobby businesses can turn into multiple income streams for many people; don’t underestimate the potential!
Real Estate
Along with diversified investing, real estate investing is something that a lot of people use as a secondary income stream. And while the starting costs for this kind of income stream can be steep — think down payment and closing costs — the returns can be tremendous.
A rental property will give you a monthly return, but you have to balance that with the mortgage you take on it plus any maintenance costs, taxes, and property management costs.
If you have a finished basement or attic or the ability to build an apartment on your current property, you could create an Airbnb rental or another kind of housing rental to earn extra income without the steep investment of buying a rental property.
The same applies if you happen to own a vacation property; you can rent it out when you aren’t using it to have a viable source of potentially stable income. If you aren’t interested in the property upkeep or initial investment, you could also look into real estate crowdfunding, in which you can invest as little as $500 in a piece of real estate.
Bottom line
These are just a few ideas for how to generate additional income. Think about the things you enjoy doing or are good at. Then, find a way to make them profitable.
As you build multiple income streams, you’ll have more cash to invest. And that’s when you can really start to see these income streams increase – if you play your cards right.
Ultimately, building three flows of income isn’t a get-rich-quick scheme. It takes time and hard work, but the best thing to do is to create a plan and get started. So, challenge yourself to add a new income stream to your portfolio every single year. Your financial-future self will thank you.
