Happy New Year!!!
I know many of you have made New Year’s resolutions! Many common ones include going to the gym and eating properly but have you made a resolution regarding your finances? If not, today may be the time.
One resolution to consider, especially if you have financial goals you want to achieve, or you desire to either increase income or reduce expenses – is to find other sources of income!
In today’s economy, one cannot rely on just one source of income. Long gone are the days where an individual can count on a single income to carry them through to retirement. Additionally, many companies no longer provide a pension upon retirement and every day we hear in the news that social security will run out. So, what to do??
Multiple streams of income…you should have more than one!
What do multiple streams of income mean? It means that you’re receiving income from various sources.
Why should or would you want multiple streams of income?
You should seriously consider several streams because for one you do not want to have all of your income “eggs” in one basket for a number of reasons. Our economy is cyclical, and our current employment environment is unlike our parents who worked 20, 30 years at the same company. It’s a good and smart way to buffer and protect yourself should you lose your main source of income. It is also great way to build your finances or to reach your financial goals more quickly such as paying off debt, saving for a home or college or for investing.
What are some examples?
- Monetizing a hobby – if you love clothes begin selling clothes and accessories via popular online sources such as Etsy, Poshmark or other e-commerce websites. Or if you like walking dogs you can start a dog walking business.
- Starting a business – Not only could you bring in extra earnings, you can also save money due to the various tax advantages.
- Renting out a home to collect rental income or collect income by listing available property via AirBnB and Vrbo.
- Possibly renting out your car via Turo or peer-to-peer carsharing.
- Increasing passive income – According to Bankrate.com, passive income includes regular earnings from a source other than an employer or contractor. The IRS says passive income can come from two sources: rental property or a business in which one does not actively participate, such as being paid book royalties or stock dividends. My goal is to earn money while I sleep. Some examples of passive income are selling a product such as a book or course, rental income or dividend stocks.
If you don’t have more than one source of income, I highly recommend that you seek additional ways to increase it. In today’s environment, no one (even physicians) are immune or protected from job loss, so increasing your sources of income especially passive income will definitely accelerate your journey to financial freedom.