If you missed them, read the first four parts of this series here.
We’ve talked about many things in this series, but if there was one thing that has changed our income status, it would be what I’m going to talk about today. Not only has this principle transformed our mindset, it has also multiplied our income substantially.
What’s the principle?
4) Diversify your income
I first heard of the concept of income diversification when I was also learning about residual income. Since that time, we’ve experimented with numerous income stream ideas. Most of them have flopped royally on their face. However, some have been moderately successful and a few have been wildly successful.
The concept of diversifying your income is basically to set up various income-producing sources, instead of putting all your eggs into one basket and expecting that basket to be your sole source of sustenance.
We realized the beauty of income diversification when Jesse was unemployed back when we lived in Kansas City. Since I had spent the last two years experimenting with ways to earn money from home, we had a cushion to fall back on. It wasn’t a very soft cushion, but at least it kept us from crashing and burning.
If you lost your job tomorrow, would you have something to immediately fall back on?
Even if your employment is very secure, it’s always a good thing to prepare for the unexpected. Plus, even if you never lose your job, having secondary sources of income in place will allow you to save more aggressively toward your financial goals, give more generously, and/or just have more wiggle room in your budget.
When people ask me how I make money blogging, most of the time they are quite taken aback when I say, “It’s the power of multiple streams of income.” My blog earns a significant amount of money every month, but it comes in through dozens of different checks and electronic transfers from dozens of companies. Some of the checks (such as those from my sidebar advertising) are routinely much higher than what I’d make off of promoting something like CashCrate, but each check brings in a trickle that turns into a strong stream of steady income to pay my team, my blog expenses, and to have leftover as personal income.
In blogging–and in most businesses–things ebb and flow. Certain things will do really well at certain times of the year. At other times, that income stream doesn’t do so well. If I were to just rely on sidebar advertising or one affiliate program for all of my blogging income, it would be a lot lower than it is. But because I have multiple streams of income in place, the ebbs and flows help balance each other out so that the income is fairly consistent.
When you understand and implement income diversification in your lives, not only does it allow you to often significantly increase your income, in experimenting, you’ll probably discover a number of different income-earning ideas that will give you a very good return on your investment of time.
How do you set up multiple streams of income? We’ll talk about that next Wednesday. Stay tuned!
Do you have multiple streams of income in place? If so, I’d love to hear what has and hasn’t worked for you.