In these days and age, having just one source of income just won’t cut it anymore. Not only is it sometimes not enough, it’s also not very safe. The unemployment rate is still sky high and people are still living from paycheck to paycheck with little or no savings. The average unemployment period is still about 8 months. Just like everything in life, diversifying your income is a strategy that everyone should seek out.
Currently, I have regular income coming in from 6 difference sources, online savings accounts, 401k, and my day job. My day job as an engineer, however brings in about 95% of my total income. Since I’m not married (yet), I only have my day job as my primary income. After I’m married, my wife will finish school and will start earning money as well. Eventually, we want to be able to depend less and less on our day job income. If your combined income makes up less than 50% of your total income, then you have nothing to worry about and need to change nothing. You’re all set in case something disastrous happens. So for me, although having six different sources of income seems nice, it’s basically having one source. I need to start thinking of ways to diversify my source of income as well so I’ll be less dependent on one source.
This is how I envision it for next year:
50% – my income
35% – my wife (future) income
10% – investment(s)
5% – blog
One thing that you have realize is that you can’t just make supplemental income with a snap of your fingers. It takes time and effort and hopefully, over the course of many years, you’ll be at a point where you ‘re not fully dependent on your day job as your primary income source. I hope in the next few years, I’ll be able to add a couple of additional reliable sources of income as well. That way, if I were to lose my job, we’ll still have a substantial amount of money flowing in on a regular basis, at least until I find another job.
There are other many ways to increase your supplemental income.
1. Increase your investment – online savings accounts are nice and so are CD accounts. However, these can’t really be categorized at investments because they’re just savings. Investments involve risks. Typically, the higher the risk, the higher returns you will see. Put aside a set amount and leave them in your online savings account and if you are willing, increase your stock or mutual fund portfolio.
2. Monetize your hobby – You can earn a decent supplemental income by starting your own blog. Is there a niche topic you’re interested in? Start writing about it and add a personal touch to it. I started Money Green Life just about a year ago and am now seeing recognizable amount of money flowing in on a regular basis. If you like to play poker as I do, you can increase your bankroll and start playing for more serious money. Again, it’s risky, but the returns can be very rewarding. I have a friend who plays online poker for a living and is doing quite well for himself at $35,000 every month. My roommate used to work for Geek Squad at Best Buy and is thinking about starting his own computer repair service business. The choices are unlimited.
3. Start An Online Business – Online businesses costs your very little start. You can start selling items on Ebay or become an affiliate for Amazon.com. Perhaps, you could write an ebook and start selling them. I have a friend of a friend who buys handbags cheap and sells them online for a profit. I also have a friend who buys baseball cards and sells them on ebay.
4. Private Lessons – I used to tutor when I was younger. It was a great way of making money on the side. I also took private guitar lessons a few years back. If you’re talented with a musical instrument, such as guitar or piano, you can earn good money giving private lessons to those who are interested. You can provide private lessons on practically anything. Some other ideas are cooking, foreign language, SAT prep, woodworking, computers, swimming, etc etc.
5. Cooking – Recently, I’ve been receiving flyers at my house about delivery of home cooked meals. It’s run by someone who lives in my neighborhood, looking for ways to make additional money. I think it’s a great idea and I’m sure there is a market for that sort of service in any neighborhood.
6. Lend Money – You can become your own bank! Lending Club offers regular people to lend money to one another. Lenders receive much higher rate of return on their money (as opposed to CDs and savings accounts) and borrowers receive much lower interest fees than bank loans. Sign up for Lending Club and you’ll be on your way to earning a guaranteed supplemental income. They boast an average return of over 9%.
If you have a creative mind with a willing heart, you can accomplish anything. Nowadays, it doesn’t take much initial investment to start your own side business. What are some of your ways in making additional supplemental income?