“A diversified income stream makes sense when the labor market is going though ups and downs, or long-term decline. Facing such a situation, investing all one’s time in a single skill set or occupation is riskier than cultivating a number of sources of earnings.” ~Plenitude: The New Economics of True Wealth
When I worked in the investment management industry we always talked about the importance of “diversifying investments.” The prevailing idea being: you’d retire by 60 or 65 and have a diverse income stream, from your investments, to support your lifestyle. After I left the industry, it struck me that we never talked about diversifying income streams in early to mid-life.
By diversifying your income stream, you don’t have to rely on one source of cash to pay off your debt or your monthly bills. I think this is beneficial regardless of your situation because it offers you resiliency and adaptability in the face of layoffs or swings in the market. Plus it’s a great way to build up a small business while you’re still at a day job.
For instance, a diverse income stream is crucial to my small business. If ebook sales fall off one month, I can always pick up more freelance writing or consulting work.
Here are a few ideas to get you thinking about how to generate multiple income streams:
1. Start a blog.
Creating a blog and connecting with a community is one of the most important things you can do. A blog gives you the platform to publish (writing, photography, podcasts, etc) and the ability to showcase your work. In addition, blogging can be a jumping off point for other income streams like affiliate sales, consulting, freelance writing and more.
2. Develop a continuity program (otherwise know as a membership site).
Continuity programs are an excellent way to make money online. For instance, you can charge members a monthly fee and offer a variety of services in return. The services could be a members only forum, online classes, or premium articles.
3. Do you have a crafty side?
Consider selling your crafts on etsy.com and building a digital storefront.
4. Become a Virtual Assistant (VA).
Virtual Assistant’s can make anywhere from $30 to $50 an hour and usually work from home.
5. Start freelance writing.
Love writing? Then get your freelance groove on. Think about topics you love to write about and start connecting to folks in your niche. Freelance Switch has a lot of amazing resources, including a directory, job links, podcasts, a blog and more. Elance.com is another helpful resource.
6. Design websites and blogs.
More blogs and websites are created everyday. I think this trend offers individuals an opportunity to design kick ass websites and teach folks how to use platforms like wordpress.
7. Sell a product.
There are a number of digital products you can sell including: ebooks, iPhone applications, photos, art, and more.
8. Offer coaching, consulting, or teach a class.
Do you have specific skills that you can teach others? For instance, you could offer consulting or coaching sessions to help folks become a better blogger. Or you could teach a class, at a local college, about building a small internet business.
9. Keep your day job.
If you dig your day job, keep it! For instance, I wanted to leave my day job and focus solely on my small business a few years ago. But at that time, I was still deep in debt and didn’t have a saving account. I was not comfortable leaving until my debt was paid off and I had a comfortable cushion in my savings account. So if you decide to stay at your day job, take classes, learn new skills, and work on developing your tiny business.
Remember: everyone’s situation is different. You have to evaluate the level of risk you’re willing to take.
10. Get a part-time job.
If you’re a struggling freelance writer or web designer, consider getting a part-time job while you build up your client base. This will help you pay the bills and give you the time to grow a business on the side.
What would you add to the list?
Note: Image from i can has cheezburger.
{ 26 comments… read them below or add one }
Ya, I like everything you said. Something else I would add when you mentioned diversifying is investing in an IRA. Future planning is always good, and mutual funds are the best way to diversify your investments. There’s charts out there that show if you invest $2000 from age 18-26 and stop, you will have $1.5mil at retirement.
This is a good list! I don’t have any items to add except a suggestion that diversification should include an income stream that involves you in your local (not just virtual) community. In-person networking (and developing face-to-face social skills) at business events can help you learn the needs you might fill in your community (such as teaching others). What do you think about volunteering and doing unpaid internships in order to develop skills where you live and learn about unfamiliar industries and careers?
@Reid: In-person networking is so important. Every Thursday morning, I volunteer at a local organization and it’s been a fantastic experience. I’ve learned new skills and made new friends.
Volunteering and doing unpaid internships is a perfect way to continue your education and meet really cool people. So yes, I think that’s a fantastic idea.
Great list! I was blessed to be raised by parents who had lived through the Great Depression so somehow instinctively knew that one should never keep all their cookies in one jar. My dad and mom dabbled in all sorts of things. He worked full time as a car salesman, but sidelined in a bunch of areas. They were co-owners of a rodeo arena, raised Tennessee Walker horses, registered beagle hunting dogs, farmed, Dad did farrier work (horse shoeing) for others, he mowed a local riverside park, he studied real estate and earned a license….you name it and they did it. So the only suggestion I might add to your list is to find a way to do the things that you love (and are good at) plus get paid for it.
Tammy, this is great! I especially like how practical you are in this post. People definitely need to keep in mind that blogging isn’t an automatic money-maker and they should be prepared to pursue other avenues of income as well.
Thanks for the wonderful post!
Michelle – so so true. Blogging isn’t an automatic money maker. But in the long run it can be. We all have skills that we can teach others and blogging is a great platform to do so. And once you build a little tribe, you’ll have a few folks who will purchase services, products, etc.
This is a really good, inspirational post, with some simple, effective suggestions.
Great post, and I really like the site, and the concept behind it.
Thanks
Thanks Colin! I’m happy you dig the site and found the post inspirational. Best of luck to you.
Your timing is perfect. Just last night I came up with an idea for a web design continuity program, a complete web design package that is paid on a monthly basis, instead of all up front. The amount I was thinking of was $19.95/month with a minimum contract of 12 months. This package would include:
- purchase domain name
- design website
- set up blog
- set up easy access to site administration
- create contact page
- set up emails
- web hosting
- tech support
- monthly backup of entire site
- upgrade software and plugins
- monitor and control spam
I came up with this because several clients wanted a website, but couldn’t afford the whole fee up front.
I love this stuff!
Chris, I think this is a great idea! I happen to be one of those people. When you’re ready to roll with it would you let me know?
Denise, I’m ready now. Just shoot me an email at peacefulbirder@gmail.com… or use Tammy’s services!
Chris – Nice idea! My brother in-law helped me migrate all my sites over to media temple and I was thinking of doing something similar. I have a lot of server space to share.
Who were you using before? I’ve been using DreamHost for over three years and am very happy with them. I currently have 525 GB of disk space ( it increases by 2 GB every week) and 10,500 GB of bandwidth (increases by 40 GB each week). I love this idea of a web design continuity package.
My best wishes to you, and hopes that you don’t get swamped by the picky and the emotionally needy. You strike me as having a good temperament for this kind of venture, though!
I just learned about your site today and am so glad I found it — and just in time! Your list seems excellent and so appropriate to both today’s economic situation and, really, to those of us looking to experience more balance and joy in life. Having been part of the rat race for awhile (and just recently getting off the wheel), the fun in exploring the various ways to diversify my life (and my income) is better and more fulfilling than I expected. Thanks so much!
@Sarah – Yay! Thanks for hanging out with all of us. And congratulations on leaving the rat race.
Best of luck to ya.
Brilliant! Much of this info can be found elsewhere, but I really like the way you’ve listed it, the attitude, and the practicality you’ve given it. It’s gonna be one of those must-print posts that go up on the wall by the computer, something to check and re-check every so often.
@Meg – True, true. I don’t know if “original ideas” exist anymore. However, we all have our own unique story and voice to share. Thanks for reading and printing this post out.
This kind of list is scary for me because I can see how multiple income streams make sense and how people with skills, talents or things to say can develop those aspects into money-making ventures that they love.
For me, the problem is that I seem to have no extra skills or talents! And my job only a one year contract, so my situation is very unstable. Do you have any advice for the average people?
Hi Samantha – actually I disagree with you. I think everyone has unique skills and talents. Have you thought about trying mind-mapping?
I use mind-mapping for projects but can’t seem to figure out how to do it for my self. I’ll have a go.
Great post, this is great information and a helpful guide for me as I am currently studying and without a full time job so I am looking for a few different income streams. Another tip is to sell old stuff that has no value to you on eBay. Works nicely with a minimalist philosophy too…..
Thanks for posting this and providing some much needed inspiration!
Sweet! Thanks Chris.
Selling stuff on eBay is a great idea.
This is a great list. I’m currently doing quite a few of these things you mentioned to diversify my income. I ran into a neighbor the other day, and he’s been picking things up in allys and side walks and reselling them on Craigslist. For instance, he found a slightly used surf board and resold it for $45. The entire amount was profit to him since he found the surf board in the trash! A perfect example of one man’s trash is another man’s treasure.
@Little House – that rocks! Love the story. Speaking of “trash” you should read this post, Dumpster Diving in Oakland: http://uprooted.jessicareeder.com/2010/01/one-year-ago-dumpster-diving-in-west-oakland/
Don’t have too much to add except for a great big thanks for all the useful information. THANKS!
{ 1 trackback }