Importance of Income Streams
Income> Expense (!!!)
We just gave birth to our third child two weeks ago, and it’s been a fun roller coaster ride of emotions.
Things have settled a bit, and reality hits. We have another human being to feed, train, raise.
Three kids mean everything is multiplied by 3 – thrice the joy, but thrice the expense!
Income Streams = +++ Money
As the cost of living gets higher and the marketplace and economy shifts so easily, it’s good to have several sources of income you can lean on.
There’s a study that millionaires have at least seven sources of income. They are sometimes called serial entrepreneurs, who create business after business, while others have more passive sources of income. Either way, you won’t be caught with your pants down if one income stream runs dry because you have plenty sources of backup. This is especially vital in an economic downturn. You’re not depending on all your eggs to come from just one chicken.
Multiply The Main Money Maker
Once you have a stable source of income (your job or your business), you can use your savings as capital in creating new sources of income.
Here are some ways to build multiple income streams for you and your family:
1. Basic Income Stream – Start Investing.
When’s the right time to invest? Yesterday.
And it’s not enough just to invest. You have to be a wise investor and diversify your portfolio as much as you can – especially if you’re a first-time investor.
For my kids, I invest their money in these ways. As an adult, you have more income and more choices to decide on how to invest your money.
If can be on mutual funds that give dividends annually, or other investment instruments that yield more fixed (and lower) returns quarterly. It’s never too early to educate oneself and invest.
2. Rentals: A Reliable Income Stream
You can also invest in real property. This is one of the things I regret not doing as a single/unmarried person. I wasn’t interested enough to learn about the ins and outs of real estate to make an informed decision to buy.
It’s a good thing that my husband is the wiser investor between the two of us. He is in the construction supplies business, so he knows the value of real property keeps going higher and higher.
You can invest in a property and sell when the time is right (a one time big time deal), or just hold and lease the property for a regular monthly income.
Rental helps in producing positive cash flow to balance against your monthly expenses. You just have to be careful in screening potential tenants. The most common problems for rentals? Difficulty in collecting, properties getting damaged or trashed.
3. Start a Side Business for Another Income Stream
You can also begin working on a side business by offering a product or a service. In our case, we started a small business with some friends and has also provided an additional income stream for our household.
It’s a blessing to have business partners as well. I always recommend e-commerce as a first business for any aspiring entrepreneur because of the low start-up costs required.
4. Your Passion As An Income Stream
A lot of people relate passion=starving artists.
On the contrary, turn your passion into profit, as the cliche goes.
What’s great about passion projects are that they usually don’t require a lot of thinking. If you love to paint, you can teach offer painting classes, or offer digital works or commissions on Etsy.
Albert and I enjoy our core business of importation and trading, so we hosted a small class on sourcing and importing from China.
It took us a few weeks to get the curriculum together, and thought of all the questions a first-time importer would have. I was 16-weeks pregnant when we did this, and it was fun! We shared our successes and failures in importation, our common mistakes and the opportunities and risks involved.
It was also refreshing to do something non-parenting related with Albert!
Timing is Everything
It can sound exciting to explore so many possibilities for income streams. But also be sure that you are prepared for the highs and lows of embarking on a new venture..
We also pray for the right timing and God’s hand whenever we consider anything new. Sometimes we are tempted to join the “hot new thing in town” business bandwagon. We learned from our experience that hindsight is always 20-20, so be wise and trust your gut!
How about you? What additional income streams have you tried and recommend?