Gone are the days when you can just rely on the stability of a 9-5 job to secure your financial future. Even with a permanent job, there’s always a risk of being laid off, keeping up with rising inflation, or catastrophic world events (like wars or a global pandemic). But humans are resilient — we always find a way out. For many, the path to financial security comes with generating multiple income streams. This is becoming increasingly popular, since you essentially get to put your eggs in different baskets. Let’s take a closer look at how to generate multiple streams of income that maximise your financial security.
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Why should you have multiple streams of income?
There are several advantages to having multiple sources of income, the obvious one being more money, of course. Multiple income streams give you options to fall back on — if you lose your primary source of income, for instance, you have side gigs to keep money flowing in, at least temporarily.
From a career perspective, it’s also an excellent way to diversify your skillset and grow professionally. You don’t necessarily have to do what you’ve been doing so far: you can explore a new career path, and learn related skills you’ve always wanted to. If you’re a freelancer, you’ll also be exposed to the business side of things. You’ll learn a lot about the administration and logistics of maintaining a side gig, as well as sales skills like landing clients.
Simply put, the advantages of having multiple income sources are two fold — they help you grow in your career and allow you to explore more options to build wealth. It’s hard work, but also a long-term approach to safeguarding your finances.
What you can do to create multiple streams of income
There are many ways to build alternate sources of income. You can work with skills you already have or branch out to explore something new. Let’s explore some options for how to create multiple streams of income.
- Leverage your expertise
- Build a side hustle
- Create content about your niche
- Start investing!
- Explore passive income options
Leverage your expertise
The first thing you should identify, if you haven’t already, is your expertise. Identify your core skillet and how you can market it as your expertise or niche. This is what will drive your service offerings: it’s something you can package as comprehensive and unique. What you will have to showcase is a skill set that may be common, but has your unique point of view.
Leverage your expertise in one (or more) of these three ways: try your hand at freelancing, build a consultancy, or start teaching your expertise.
Let’s say you’re an operations expert looking for an additional source of income. First, identify your speciality: is there a particular domain you tend to work in? Or do you specialise in a particular kind of operations — say, digital methods of operations? Based on the niche you’ve carved for yourself, perhaps you can start a consultancy for smaller businesses within that domain and help those folks to set up smooth operational processes.
If you’re in a creative field, like graphic design or content writing, you can even try your hand at freelancing or even start a business. If you don’t have the resources to start cold-calling potential clients at this point, start applying to freelance job portals or look for gigs within your network.
If teaching is something you’ve ever considered, this is a good time to start. You don’t necessarily need to be from academia to excel at teaching (that’s all a myth) and, in fact, that can be a good thing! As a professional coming into the teaching space, you hold a unique advantage, which is that you have first-hand experience using your expertise in real-time industry settings. This is an excellent perspective for young professionals to have.
Start by looking for local/online colleges and programmes where knowledge of your field is taught.
Build a side hustle
Of all the options we’ve listed here, this one’s probably going to take the most work, more than often, will end up being akin to building your own business! To keep a side gig afloat, it’s going to take time, effort, and perhaps even a bit of investing. But reaching out to your contacts and network in these initial stages is totally worth it in the long run. Plus starting a business is always a good starting point for learning how to be your own boss. It helps you build leadership skills like nothing else!
If you manage to build a successful side hustle, the prospects of it yielding better financial results than your current job are pretty high — meaning you can make your side gig the main gig. The worst case scenario is it tanks; you still have your main source of income, but now you know how to start a business. So you can always try again. (Talk about character development!)
If you’re interested in exploring options for side hustles in 2022, check out our article on it.
Create content about your niche
Creating online content in a niche has never been more lucrative than it is now. It’s easy to think that the digital space is oversaturated with content now, but the question is this: is the content you’re consuming valuable and informative? If your answer to that question is no, then you’ve already identified a content gap you may want to fill.
Remember the niche you identified earlier? One option to explore is to start creating useful content about your field: blogs, little clips and infographics for social media, YouTube videos, and more. Depending on what content type suits you and your current resources, the options for monetising are numerous. If blog articles are your mode of expression, try experimenting with Medium (the free online platform has options to monetise your content) or pitch pieces to publications that will pay you for your work.
Once you build enough of a following, you could even consider creating paid resources, which people can access with a regular subscription or a one-time payment. These could be carefully curated toolkits, detailed how-to guides, self-paced online modules, etc. Another alternative to explore at this point would be affiliate marketing.
Looking for advice on how to manage money? Head over to our podcast MoneyTok, where host (and Founder of CrazyTok) Amit Ray talks to experts to bring you the best tips right to your doorstep!
Start investing!
Whether you agree about its benefits or not, for many decades now, investments have been considered a pretty attractive way to increase long-term income. From mutual funds to real estate, there are numerous ways to build wealth through investments. If you’re a young professional who’s just been in the workforce for a year or two, now’s a good time to start setting aside some savings to put into an investment plan. You may not have the funds to invest in property or gold just yet, but you can definitely start with something simple like a fixed deposit. If nothing else, it’ll teach you the basics of setting some finances aside for a rainy day.
Start by looking up investing plans that your bank has. It’s also a good idea to find out what your seniors, peers, or people in your family did when they first started investing. If you’re short on funds or are wary about the concept altogether, you could start small.
Explore passive income options
As the name suggests, passive income doesn’t require you to work actively (not from an employer or contractor) and is derived from minimal labour. It’s classified as a form of unearned income, usually comprising earnings which come from property rent, investments in your side hustle, businesses where you’re not actively involved (for example, if you’re a silent investor), and interest.
As you progress more and more in your professional career, passive income can greatly help you increase your financial wealth. It can also impact your professional portfolio, especially if you’re an entrepreneur in these ventures. Where your passive income comes from can even be a statement of what kind of ventures you tend to support, eventually increasing opportunities to be a part of (in terms of work or monetarily) similar entities.
Why multiple streams of income mean financial security
We’ve already said that having multiple streams of income increases the potential options of earning. But the best thing about diversifying your income options is that you don’t just rely on multiple streams, but you get to explore multiple kinds of income.
Income can be broadly divided into three types: active (what you earn through employment or contract gigs), passive income, and portfolio income (investments). Dipping your toes into all three, rather than simply active income, will help you achieve financial security in a potentially faster way. Knowing that you have multiple reliable options (that you’ve worked towards, of course) will help you plan other aspects of your life as well: hopefully, an additional source of income will finally urge you to take that much-needed vacation!
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