Why you need to have multiple income streams?
3 December 2022
"You can hardly find a millionaire with just one source of income. With one source of income....."
You can hardly find a millionaire with just one source of income. With one source of income, you cannot reach the kind of financial stability and independence one desires. Here are some benefits that you get from multiple sources of income.
Recent trends and economic surveys point towards an imminent recession, which will come with a wave of mass layoffs. IT giants like Google and Meta have already frozen hiring for 2022. Startups like ByJu’s, Unacademy, and OLA are also laying off employees in search of profitability.
In all such scenarios whether recession or not, there is no job security in today’s market. An alternate source of income will help you maintain financial stability in a situation of unexpected layoff. You won’t need to borrow just to survive.
Early Financial Independence
The end of earning a good amount of money is financial independence. If you are not chasing financial independence, you are doing it wrong! If you can answer this simple question, “Whether my business/job would make money if I were not present?” as YES, you are financially independent.
Having multiple sources of income will help you reach there. Once your first business is established well, you can move on to create more. An average millionaire has about 7 different income streams. This gives them free time to think about more opportunities and explore more ideas.
Save and Invest More
Earning extra doesn’t mean spending extra. You will not benefit if the earning vs. spending curve goes in a straight line. You need to save and invest more with your extra income. Keeping your lifestyle as minimalistic as you can, will help build your portfolio which can later become your retirement fund. Starting to build the retirement fund early will mean having a big corpus. Extra income can go straight toward buying mutual funds, bonds, and equity investments.
Working with different businesses or freelance jobs will expand your network quickly and it will also mean a diverse network. If you are in one job or business, you have connections in that niche. If you work in an IT company, you know other IT professionals. But if you start writing articles or blogs, you will end up expanding your network in ghost-writing, copywriting, and other niches.
This network can help you start a digital marketing company that helps businesses create their digital campaigns. Your experience in creating websites, applications, and content writing will grab more business from them and it will be a better experience for your clients too.
Plan to get Out of the Job Loop
Working a 9-5 job will never get you the financial independence you always wanted. A job would not earn you money in your absence. The aim is that a business/job should make you money even in your absence. Once you secure certain financial stability by adding more sources of income to your hat, you can think of quitting that 9-5 job and getting yourself a lot more free time to contemplate on ideas and to increase the number of sources you can earn from.
Scale Your Business Quicker
Starting your first business would not be easy. You need an investor and you have to do small tasks all by yourself. Since you don't have access to capital, the business growth remains organic to a great extent and organic growth is slow.
Now, when you already have multiple sources of income, you have access to your own capital. You need not follow the wishes of the investor. Business decisions become independent. Creator freedom is not hurt. Moreover, you can spend wherever you feel the need. This reduces friction and clears the way for faster growth. The experience that you gained earlier while building other businesses would also help you.
Live your Dream Life
Every one of us has an idea of the ideal life. Although only a few of us are able to reach even closer to that. Why is that?
Most of us are engaged in 9-5 jobs for the whole of our lives. We trade time for money. And time is limited. We only have 24 hours in a day and can't spend all of them working. If a person keeps trading time for money her whole life, she's not going to become wealthy, let alone live the dream life.
The definition of a dream life is different for each one of us. Though one thing we all care for is, free time. What if I don't have time to spend all that money I made, right? A person dependent on an income stream would not have money and time and thus not the dream life. Having multiple sources of income would get you both, time and money.
You can live your dream life if you start working towards it right this moment.