I’ve been talking about diversifying income on this blog, but of all the things that can be done to diversify income, all fall into essentially three basic categories. I’ve organized them in order from my least favorite to the most favorable. I’ve always had some ideas to create side money, but before the internet, nothing ever worked out long-term as planned. I have made some side money without using the internet, but nothing ever clicked where my endeavors for side money lasted more than two to three months. I’d get aggravated by certain aspects of it. But, instead of working through the small hiccups, I’d give up and move on to my next adventure. So, I have had a diversified income for several years, but nothing has ever been very consistent.
Diversified Income Area #1; Having a job working for someone else
Having a job is the most common source of income. I’m not fond of it anymore. I am at a stage in life where I value my time and my life experience as much or even more than the money I can earn from a traditional job. The critical part of this article is to create multiple sources of income.
There are some significant aspects of having a reasonable job. I don’t want to paint a picture that working a traditional job is all bad. I mean, I’ve had a regular job my whole working life, and it has done me well. Now, I’m looking for something more. The good about a traditional job is it’s consistent. You get steady pay, and insurance, and most businesses have some retirement plan for their employees.
And you trade all those things for your consistency. You need to be working at particular times, and you need to be doing consistent work. Reliable income is the whole point of getting a job. I’ve seen some jobs that don’t always offer reliability but still want loyalty in return. These are usually seasonal jobs that want you when they need you, but will not provide stable employment in return.
I don’t understand why people would be loyal to unstable jobs. Stability is the only reason to have a job.
Diversified Income Area #2; Having a side hustle to make you money
I put these in order of my enthusiasm for each one. I consider this the second step in someone’s financial career. Most people start off getting a job and then move into starting their own side hustle business to add a second form of income or replace their job income. There are a ton of ways to earn extra money, and the internet makes it even easier than ever to start a side hustle business.
The most fun you will have with creating a side hustle, except for getting the money, is putting together the system. What I mean by that is every business will have a system of selling a product and then getting paid. This is what entrepreneurialism is all about. The fun is patching together all the different parts of the process to create a business system.
This is what I consider art in business. This is also why I love internet ventures. The possibilities for creativity are endless.
Diversified Income Area #3; Having investments that make you money without working
This is the ultimate of all income sources. This is when you have an investment making you money, and you don’t need to trade time and money. Well, almost no work. You need to monitor your investments to make sure they are still paying off. I don’t recommend leaving someone managing anything for you.
I don’t think any investment is genuinely the set it and forget it. Investment types are an area I don’t give too much advice on because, frankly, I don’t feel I have enough knowledge to give. The only thing I feel confident in saying is to steer away from managed 401k plans set up by workplaces. I’ve lost money on managed 401k’s. They are usually fee-heavy. I don’t like them. I don’t like them.
I have a simple Roth IRA. I am mainly working on my independent business side hustle money at the moment. This is the ultimate way to make money and should be your end-game goal. The key to financial independence is diversifying your income streams, and there are only three ways. I’m not fond of working the nine-to-five, but it has done me well for years. The most fun for me is putting together different business ideas to create multiple streams of income. I love the creativity of patching together various business ventures.
Some work for me, some don’t. I will keep working toward the investment phase. I am adding to my Roth IRA, but as of right now, it’s just not as much fun for me as the business ideas.
Be safe,
Kevin