This is the last post in a four part series on what you can do to cultivate stability and peace of mind in your financial life.
Cultivate additional income streams. I used to think that people who are concerned about having multiple income sources are obsessed with money. Don’t they have anything better to do? But as time went on, I experienced unemployment myself and saw older people cobbling money together for retirement, I began to see the wisdom of having various sources of income.
Whether it’s a job, a business, or an investment, putting all your eggs in one basket is risky. Almost all of us have experienced job loss, an investment that went under, or a business that failed. To help increase your peace of mind, consider cultivating multiple income streams.
Here are a few ideas:
- Get a second job if you have the time and energy. However, don’t work yourself into exhaustion or you won’t be able to work at all.
- Start a consulting business. If you have expertise to share, this may be a good choice. See this article if you’re considering consulting.
- Earn money with your hobbies. If you enjoy photography, you could free lance as a special occasion photographer. If you like making stuff, sell your handicraft online at Etsy or Ebay.
- Earn money from activities you’re already doing. For instance, if you walk your dog, you could offer a dog walking service to your neighbors. If you look after your own child, you could add another kid to make money and give your child a playmate.
- Sell stuff. What do you no longer need or want that you can sell? Regular purging is good for you and your wallet. You can also buy things for a bargain then turn around and sell them for a better price. Scour garage sales and Craigslist for arbitrage opportunities.
- Take part in clinical trials or research conducted by companies or schools. Just be sure you read the fine print and know what you’re getting into.
It’s an investment of your time and energy to create additional income streams so think carefully about where you want to put that effort and what demand you can meet.
All the options suggested above involves working for money, essentially trading hours for dollars. Your earning power is perhaps your biggest financial asset. However, the day will probably come when you cannot or do not want to work for a living anymore. Yes, government or employer pensions may be available but those are often not enough. That’s when having other passive income is helpful.
What is passive income? It’s money that comes in without you having to do much work because you’ve already done the work upfront. Be aware that it usually takes a lot of time or money or both to create and set up a passive income stream and it will still require at least a little maintenance work on an ongoing basis. It probably also involves taking some risks and a willingness to learn and change on your part. It is not easy or quick – if it were, everyone would be doing it. But it can be definitely be done.
There are many ways to generate passive income. Here are some examples:
- owning stocks that pay dividends
- having bonds that pay interest
- owning real estate that generates a positive cash flow
- writing a song or book that generates royalties with every play or sale.
- creating content online such as videos, photos, articles, and getting paid by page views, use, or ad clicks on the site.
If you want to pursue passive income, pick strategies that are suitable for your personality and situation. For instance, if you’re a very outgoing and socialable person, reputable network marketing strategies could be a good fit. If you have a chunk of money laying around and a stomach for vacancies, investing in real estate might work for you. If you’re very creative, inventing things to sell online or off could be the ticket.
To start educating yourself, Google “passive income ideas” or “passive income strategies.” Responsible articles and sites will tell you the downsides and risks involved with any income generation technique. Do plenty of research before you commit to anything. Be sure not to fall for get rich quick schemes. If it sounds too good to be true, it is.
The four main elements in this series of posts work together to build a financial safety net for you. By living within your means, saving money for an emergency fund, getting adequate insurance, and cultivating multiple income streams, you’ll be in good shape to weather any financial storm.
Of course creating stability doesn’t happen overnight. It’s a process that requires time and energy. Where do you stand right now? What do you have in place already? What else needs to be done? It can be overwhelming to tackle all these pieces at once so don’t. Pick one small task that you know needs to be done and do it this week. Pick another next week and so on. You’ll have a strong safety net before you know it!