Diversify Your Income in the New Year
It is common to hear of diversifying your investments, as this helps take out some of the risk involved. Why not apply the same strategy to your income stream? How many income streams do you have? A common answer to this question is: one. Having one income can be very stressful, especially with all the layoffs we have seen in recent years due to the economic meltdown.
WHY YOU SHOULD DIVERSIFY YOUR INCOME
Less Stress
First and foremost, diversifying your income helps take a lot of stress out of the equation. You don’t have to worry, “What if I lose my job tomorrow, how will I pay my bills?” Even if you get laid off from your day job, you can spend more time on your other means of income and grow it exponentially while looking for another day job if you so choose. Having options and multiple means of income really helps decrease the stress factor.
More Opportunities
The more people you know and the more projects you are involved with, the more doors that could open. An opportunity for a promotion could arise at your day job or a contact that you have in the industry could inform you of a job opening and recommend you for it. Or you could even get referred by a client of your side gig to other clients as word of mouth marketing can be very strong and lucrative. No matter what you do, always remember to do it with a smile and you are sure to see positive results as people will take notice.
Less Fiscal Policy Risk
We know elections are right around the corner. This also means we know we can expect new changes with government and this can have a direct impact on specific businesses. Being involved with multiple professions can help decrease your exposure to fiscal policy, especially with all the politics politicians have been playing in recent months.
HOW TO DIVERSIFY YOUR INCOME
Keep your day job and turn your passion into money. Ask yourself, what do you enjoy doing? Make a list of your hobbies and identify which ones you can turn into an income stream. The following are only a few examples of ways to make a side income:
Sell Things on Craigslist/Ebay
Do you have things lying around the house that you don’t use anymore? Instead of letting them sit and collect dust, why not put them for sale? Craigslist and Ebay are both excellent websites to post your items for sale. In fact, I recently sold an old computer that I haven’t touched in far too long. It felt like a nice added bonus that I was able to put in the bank.
Start Tutoring
Do you enjoy teaching others? Tutoring can be a great way to make extra money. No matter what your favorite subject was in school, whether it was math or English, there are always students that could use a private teacher or even mentor. It’s also a great way to get involved in your community.
Give Music Lessons
Do you enjoy playing a musical instrument such as the piano or even the guitar? Why not give music lessons. You can even offer this out of your own home. This can be a great start-up business with very little upfront capital and very low risk. It’s almost like getting paid for working on your hobby. How fun is that? Why not share the gift of music and get paid for it?
Freelance Work
Do you enjoy writing or working virtually? Why not become a freelance writer or a virtual assistant. Elance and Odesk are excellent websites that you can check out to find this type of work. This is a great way to advance a current skill and also get paid for it.
Cut Grass/Shovel Driveways
If you enjoy physical activity or being outside, a great way to make extra money is by cutting grass or shoveling driveways for other people. Many people don’t enjoy these activities and are glad to pay someone else to do it for them. No matter what the season, there is always outside work to be done. This is not only good for your wallet but also great for your health.
GET STARTED IN 2012
Keep these pointers and examples in mind as you set your plans for the New Year. Not only does a diversified income stream contribute to your overall net worth, but it can also help provide an entirely new source of income simply meant to invest for your future. Automate investing and saving your new income sources in 2012, and 10, 20, 30 years from now you will be very happy you did. So what are you waiting for? It’s time to get paid for doing something you enjoy doing – here’s to 2012!
Image: scottchan / FreeDigitalPhotos.net
Completely agree with the less stress part. It’s really comforting to know that I am not counting on any one source of income to pay the bills. My goal is to continue diversifying and creating passive income streams.
LaTisha @YoungAdultFinances recently posted..How to Write a Job Getting Resume
@ FYSA – Great goal. I’m working toward the same thing
Agree extra income should make you less stressed thinking about your saving. But that extra work can also lead you to work related stress.
all good tips here.
SB @ One Cent At A Time recently posted..Top 10 Personal Budgeting Tips for New Year
@ SB – Great point. The key is trying to maintain a balance
Some great ideas there Mary… and don’t forget using your blog to help others while making a little too! It sure is great to have some other streams than just the one!
Doctor Stock recently posted..Oil and Gas Stocks at Discount Prices
@ Doc – Very true, creating a blog is another great option.
Excellent suggestion WoF! I still get royalties from photos I put up for sale 6 or 7 years ago!
The internet opens up a vast universe to diversify our income.
Moneycone recently posted..10 ETFs Cheaper Than Their Vanguard Peers
@ MC – Awesome MC! Royalties is a great income stream to have
Having other modes of income definitely relieves the pressures of knowing where to look for funds to pay the bills. Use your human capital to make some extra money! It’s also a great way to network and meet new people. Great ideas
@ Sandy – Thanks Sandy. Great point – use your human capital to make capital
Networking is a great way to open new doors of opportunity. You never know what could be waiting behind the next door. 
Diversification is an important concept when investing, most people don’t think of diversifying their income though. Great tips!
Paul @ The Frugal Toad recently posted..How Frugal Living Can Build Wealth for the New Year and Beyond
@ Paul – Thanks! Diversification is a powerful tool that can be applied to many aspects of life
Multiple income streams is a great idea, it mans never relying on your job alone. With time it may even mean not having to rely on your ‘normal’ job at all!
Shaun @ Money Cactus recently posted..6 Reasons Why Ramit Sethi Should Play Cricket For India
@ Shaun – Excellent point! This is the whole idea.
I totally agree with your assessment! Having multiple income streams is very important to me. I think of life as a business and I am my CEO (This is certainly not a new idea, I am quite sure I stole it) and one of the first things a financial analyst does when it looks at a company is assess the diversification of its revenue streams.
The bottom-line is that working at a company is a false sense of security. The reality is that you can be fired at any time, unless you are in a special situation or certain types of union jobs. But private sector jobs are part of the “illusion of safety”, therefore I work on building passive investments such as stocks/bonds/investment funds and more recently I am looking into real estate investments. In addition, there is blogging income and affiliate marketing and other forms of web-based income, which for me at this point is certainly not passive income. In short: Diversification of revenue is a beautiful thing, thanks for the tips!
Neo recently posted..Things to Keep In Mind When Appealing a Home Insurance Claim Denial
@ Neo – All great points. You listed a variety of income streams that are a great way to achieve a diversified income. Good luck with your new ventures.
Love less stress. Should really work on diversifying income streams. Pushing myself to finally get more into dividend stock investing. No time like the present right?
Buck Inspire recently posted..BI 008: LA Travel Best In Show – Jamaica
@ Buck – Great attitude. No time like the present
It’s never too late to start something new.
Good tips. Unfortunately, your job income only gets you so far. So if you want more money, you’ll simply have to use one of these or other methods to make more income. I really rocked out Craigs List last year. I know a lot of people stick their nose up at this one. But it’s a great way to get rid of stuff in your basement and I’m always surprised at how much people are willing to pay! The idea about giving music lessons is an interesting one. You’re absolutely right about that being a great way to practice your hobby while getting paid. I’d love to teach guitar lessons. This year, I’m going to be experimenting with dividend stocks this year to add another income stream to my portfolio. I’m also getting really curious about getting a rental property and becoming a landlord.
MyMoneyDesign recently posted..Is Your Job Awesome?
Yeah – we need to diversify and are working hard on becoming reasonably independent of paid employment this year.
John@MoneyPrinciple recently posted..Instead of a round up
Great post WOF! Cut Grass, love it. I cut grass for neighbors when I was in high school. The money was pretty good the workout was free.
Hunter – Financially Consumed recently posted..Save Money In The Zero Waste Home
In the fall I gave some thought to earning additional income and decided to give blogging a try. As a result I started three blogs in 2012. It’s been a slow process getting subscribers and traffic, but I’m going to give it a chance.
TheDailyThinker recently posted..Saving Money by Identifying Wants and Needs
eBay is a great place to make some extra money particularly if you have a unique talent such as art. Before we had kids, I used to some of my artwork at really decent prices. I may have to reconsider that revenue stream again!
Financial Knowledge recently posted..The Basics of Personal Finance