Creating multiple streams of income has been the topic of, or at least the chapter of, many financial and wealth generating books. Creating multiple sources of income is the key to generating wealth.
The most common way of increasing one’s income, or a family’s income is the second job. Either both spouses work, or one spouse works two jobs, or some variation of this. The problem with this strategy is that it is not passive. You are physically working for every dollar you make, leaving little time to enjoy the life you are working so hard for!
Passive income allows you to create an infinite number of incomes, making your money work for you. There are many ways to create alternate streams of income; some require more up-front work or capital to get started and some require less.
Rental Property
If you have the capital to invest, a rental property is the most lucrative, passive, alternate stream of income you can create. You should invest in a property that is relatively near your present location to make property management easier. If you wish to invest in a property further away from you, consider a property management service.
Rental properties create passive income and wealth two different ways. The rent the tenants pay you monthly is what you use to pay the mortgage on the property. If your rent price is higher than your monthly mortgage payment, you have created an alternate stream of income.
Even if you charge rent equal to your mortgage payment, you are still creating wealth through the property’s appreciation. If you are considering investing in real estate, do plenty of homework and be prepared for the unexpected financial costs such as broken appliances, etc.
Lending
Web sites like Prosper.com allow the individual to “invest” or lend as little as $50 to others seeking investment capital, money to consolidate existing consumer credit, and many other reasons. You are able to see the individuals “credit score” as well as their “pitch” as to why they need the money. Be sure to diversify your money here to limit your risk exposure. By lending $50 to 10 different borrowers, you will limit your risk of the defaulted loans.
Blogging/Writing
Web sites such as Helium.com will publish well-written articles that you have written. As your article “base” grows so will your income. Helium pays pay you per page view, so the beginnings can be slow. There are other “content” web sites that will pay you up-front ($3-$15) for your articles as well as a page view performance payment.
Blogging can also be lucrative. Remember that promoting or marketing your blog will determine the success of the site. If you have an interesting or popular topic that people will visit and read (your blog generates a lot of internet traffic), you can earn money through Google AdSense.
Ebooks are another way of earning money through your freelance writing. There are several sites such as Lulu.com that will publish, market and sell your Ebook directly from their web site. You can also advertise your Ebook on auction sites or how about that blog?
Do What You Know!
You can begin creating your multiple sources of income with the least amount of resistance by first doing what you know. If you are an office manager or an executive assistant, consider starting your own virtual assistant business. Create a web site as part of your marketing with affiliate marketing on it. Now you have created two sources of income.
Lots of Little Adds Up
Changing your perspective of income in critical to creating multiple streams of income. If you are used to working a full-time job for $2300 per month, you cannot look for a multiple income source that is going to pay you $2300 per month right away.
In today’s economy, it is important that you change your thought process. There is to many unknown factors when it comes to your full time job. The saying, “Don’t put all your eggs in one basket” should definitely be part of your income philosophy as well as other areas of life. Losing your primary (especially if it is your only) income can be devastating to you and your family’s well being.
Let’s look at a very real and possible scenario. You are working full time as an executive assistant and would like to create additional income. You have office skills, document creation skills and writing skills.
For example, if you started a virtual assistant business and web site it may only generate $400 per month and your affiliate program associated with your web site may only generate $25 per month. Total income = $425 per month.
If you are writing articles and product reviews for web sites like Helium.com, you could generate another $150 per month. Total Income = $575.
Having an extra $575 a month, coming from three different sources is the direction you want to go! Now, scaling your full-time job to part-time or three-quarter time decreases your primary income to $1350 per month. Your total income at this point is $1875. You have nearly replaced your full-time income with four multiple streams of income.
Many of these streams, such as writing articles, will generate more and more each month as your article base grows because part of the payment is based on page view or impressions your articles receive. Continue this process and you will meet and then surpass your current income, creating a diverse income strategy.
Changing your mind-set about income and saving/investing for retirement is essential for today’s economy. No longer are the days of working for one company for 30 or 40 years and earning a pension, never saving a dime. With a little planning and a paradigm shift in your thinking regarding income can generate a secure financial future.