You’ve probably heard that the average millionaire has seven different streams of income. I’m not sure where that saying originated, but it makes sense.
Having multiple income streams is one of the best ways to protect yourself financially and grow your income over time. It also gives you greater peace of mind and financial security.
Let’s say that your only source of income is your full-time job. If you unexpectedly get fired, things are going to be financially tight for a while.
So if you want to set yourself up for success, start thinking about how you can create multiple income streams. However, you may not be sure how to make this happen or where to start.
That’s exactly what this article is going to teach you.
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What are the Most Common Types of Income Streams?
Most people diversify their income with a variety of active and passive income streams. Active income is the money you receive for performing a service.
For instance, your job would be considered an active income because if you don’t do any work, you won’t get paid. One the other hand, passive income doesn’t involve exchanging time for money.
There will still be quite a bit of work involved, but it’s usually put in on the front end. Once you start earning passive income, it generally allows you to be more hands-off.
Most people start with active income streams and slowly begin branching out into passive income over time. The important thing is just to get started. So if you’re looking for ways to begin creating multiple income streams, here are the ten best ways to do it.
The idea of building multiple income streams can seem overwhelming at first. But if you and your spouse both work full-time, you already have multiple income streams.
Most people work at a full-time job that provides the primary source of their income. And there are a lot of advantages to keeping this position as long as possible.
A full-time job provides things like medical insurance, dental insurance and disability insurance. Depending on the company you work for, you may even have access to a 401(k). When you’re self-employed, you have to provide those things for yourself.
Plus, working at your full-time job gives you a steady income while you pursue other ventures. You can build your side hustle before and after work, all while maximizing your income at your full-time job. And your job will give you the cash flow to invest and save more money in the long run.
So if you’re still working your full-time job, don’t quit just yet. Keep doing it while you pursue other ways to earn extra money.
Start a side gig
Most people start with a full-time job and then consider a side hustle they could add to earn extra money. A side gig is typically something you don’t plan on doing long-term, but it can be a good way to make extra money in the meantime.
One of the most popular side gigs that have popped up in recent years is becoming a delivery driver. Customers place an order at their favorite restaurant through an app like DoorDash or UberEats, and a delivery driver will pick up and then drop off the food with the customer.
There are a lot of advantages to becoming a delivery driver. You can work when it suits your schedule, which makes this easier to manage alongside a full-time job. Being a delivery driver won’t pay a lot of money, but it is a good way to earn an additional $500 to $1,000 per month.
If delivering food isn’t the right fit for you, you can also pick up and deliver groceries for Instacart. Or you could become a pet sitter, be an Uber driver or even wait tables in your spare time.
The options are endless, so spend some time thinking about what the right side gig might be for you.
Offer a service
If you’re looking for a side hustle that you could scale and possibly turn into your full-time job, why not offer some kind of service? For instance, if you work full-time as a teacher, then starting your own tutoring business could be the perfect additional source of income for you.
Or, if you have any writing skills, you could become a freelance writer. There are plenty of businesses and websites that need a lot of content and are on the lookout for quality writers.
As a freelance writer, you could write blog posts, website content, magazine articles or press releases. And websites like Upwork, ProBlogger and Freelancer.com make it easy to pitch clients and find your first few jobs.
If you don’t enjoy writing, you could also look into becoming a virtual assistant. A virtual assistant helps businesses schedule appointments, plan and manage their content and more. Basically, they take on the tasks that business owners may not want to do themselves.
As a virtual assistant, you can take on as many clients as you have the bandwidth to serve. This could be a great way to earn a little extra income, or it could end up replacing your salary at your full-time job.
Sell items online
If you’ve ever hosted a neighborhood garage sale, the idea of selling items for extra cash may have lost some of its appeal. But selling items online is one of the easiest and most overlooked side hustles out there.
You can use sites like eBay, Amazon or Craigslist to sell items you don’t want anymore for some extra cash. Doing this is a great way to clear the clutter out of your home and earn some extra money.
Or if you have a knack for finding great deals, you could buy items at a discount and resell them for a profit. Many people do this by browsing garage sales, thrift stores, or antique stores.
However, you may need to spend some time learning what items are best for resale. Or if you consider yourself crafty at all, you could open your own Etsy store.
Create a course
Increasingly, many people are turning to the internet as a source of education and learning. According to one market research company, online learning will grow from a $107 billion industry to $325 billion by 2025.
So if you have any kind of specialized knowledge, you could capitalize on this by creating and selling an online course. Depending on the type of course you sell, you could charge anywhere from a hundred dollars to several thousand.
And sites like Teachable will host the course for you, so all you have to do is create the content. Creating a course can take a lot of work on the frontend, but once it’s created, you can continue to sell it over and over again.
You may need to update it periodically to ensure the material stays relevant, but it’s a more passive form of income.
Sell a digital product
If you want to create something that’s a little less time-intensive than a course, you could write and sell a digital product like an e-book. You’ve probably never heard of many authors who make a good living by writing and selling e-books online.
The traditional route of publishing a book is notoriously difficult and tedious. Whereas you could write and self-publish an e-book in a matter of weeks. And sites like Amazon and Barnes and Noble will let you publish your book for free.
However, e-books are not the only digital products you can sell online. You can also create videos, audio, graphic art, stock photos and more. Your options are endless.
Purchasing a rental property can be a great way to add a stream of income. However, it will require a large upfront investment and ongoing expenses, like a mortgage, utilities, property taxes and more.
Plus, you have to put in the work to find new tenants and turn it over in between tenants. And when you become a landlord, you’re responsible for maintaining the property and responding to your tenant’s needs.
But if you’re up to the challenge, real estate is a good way to diversify your income and develop a steady stream of cash flow. The return on investment is relatively high, especially when you buy property below-market value and put in the work to fix it up.
Plus, you’ll receive numerous tax advantages that you don’t get with other types of investments.
Crowdfunded Real Estate
One of the things that hold many people back from investing in real estate is the 20% upfront down payment required to purchase the property. That’s why many people turn to a real estate investment trust (REIT) instead.
A REIT is a company that owns and operates income-producing real estate. Most REITs are registered with the SEC and publicly traded on a major stock exchange. This gives you a way to invest in real estate without purchasing it yourself.
You have a wide variety of options to choose from, and you can get started with as little as $500. If you’re interested in going this route, you might want to consider platforms like Fundrise or RealtyMogul to get started.
Invest in bonds
Bonds are a form of debt in which investors lend money to a company or the government. They are a common strategy businesses use to raise money.
Bonds are also a good way to diversify your investment portfolio because they typically move differently than stocks. This means in an economic downturn, bonds may increase in value as stocks decline.
You can buy bonds directly through your brokerage account, but most people opt to purchase bonds through a fund. You should consider working with a financial planner to see what’s the best option for your situation.
And finally, the most common strategy for income diversification is through investing. Most people begin saving for retirement through vehicles like a Roth IRA or a 401(k).
And there are a lot of advantages to investing in a Roth IRA or 401(k), especially if your employer is willing to match your contributions.
But just like you want to diversify your income, it’s important to diversify your investment strategy. That way, your retirement plan doesn’t hinge on any one single investment.
One of the best ways to diversify your investments is by investing in a mix of mutual funds or ETFs. A mutual fund is made up of a pool of money and invested in bonds, stocks or other securities.
Many people like investing in mutual funds because you gain access to a professionally managed portfolio at a low price point.
On the other hand, an ETF is an investment fund traded on a major stock exchange, just like stocks. It typically will hold stocks, bonds and other commodities.
Keep in mind; it’s not enough to diversify your portfolio once and then forget about it. You should re-evaluate your investment portfolio on at least a quarterly basis. This will allow you to examine any underperforming funds and re-allocate when necessary.
Multiple income streams help diversify your income and maximize your future earning potential. And hopefully, this article has shown you that there are a variety of ways you can start doing this immediately.
You don’t need to have tons of money to get started; you could start a side business today with $100. Anything you do will require work, but the financial rewards will be worth it.
Are you working on building multiple income streams? Have you tried any of the strategies outlined in this article?