Flowchart: HOW To Diversify Your Income!
"How do I diversify my income? I'm a:
- lawyer, I don't have time!"
- mom, I can't expend that kind of energy!"
- student, I don't have any money to spare for startup costs!"
In this post, I talk about why diversifying your income has more benefits than just making more money. But of course, personal finance is personal, and usually when people think of "multiple income streams" their brain is bombarded with what society tells them the "hustle" is: cold showers at 5am for no apparent reason, creating an elevator pitch, working for crumbs in the gig economy, etc.
After, many hours of my own confusion over this topic, I decided to make a flowchart!
This flowchart will show you how to best diversify your income. Scroll further down to see what it all means!
Okay, so you know what you are now. But what do those little words mean?
You feel comfortable in your job and there’s room for you to make more money in it if you so choose- in terms of jobs, you’ve hit the jackpot! If you’d like to make more, then now is the time to go HAM: apply for that promotion, negotiate a raise, work extra hours (only for more pay!), or even switch jobs altogether. If you’re not interested in stepping it up any further then that’s okay, you’re already on the right path.
Your income diversification will come from passive investment opportunities. That is: capital gains, dividend payouts, and perhaps rental properties.
You’re in it for the long haul. You’ve had your sights set on something for a while now, and it feels just out of reach. You’re in a place financially and emotionally where you can devote a little extra time to something that you find worthwhile, but aren’t yet sure how or when it will pay off yet. And that’s okay! Get started on the thing (this is your new “side hustle,” congrats!) and see where it takes you. This could be selling handmade rugs on an Etsy shop, starting your own dog walking business, or working on old cars. The possibilities are truly endless. Your income diversification will most likely come primarily from your “real job,” as you’ll come to call your side hustle. This will become such a big thing in your life that if you were to lose your primary source of income, you would take is as an opportunity to go all-in on your side hustle instead prior to frantically looking for a new job. Income diversity opportunities include a completely new revenue stream.
In other words, you'll make profit income from your own creations, instead of relying solely on earned income from your main job.
Your main goal right now is to make more money or streams of money. You don’t have the opportunity or desire to get more out of your main source of income, you don’t have time to reinvent the wheel, or you’re not particularly keen on DIY’ing your career. You might be working hard to pay off debt or save for an immediate goal- like an emergency fund or down payment on a house. You would probably do best by jumping into the gig-economy that’s already been created for you, ready for you to start making money in. You could drive for a ride sharing company such as Lyft or Uber, start tutoring, start babysitting, or pick up a reliable second job such as waitressing.
In other words, your income diversification will come from another source of earned income.
----> This was me in college! I worked as a barista in the morning, tutored English in the afternoon, and babysat at night. I also tried out driving for Postmates for a while!
Have you successfully diversified your income? Let me know in the comments!
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