Many people are totally dependent on their (or their spouse’s) “regular” job for all of their income. This is a risky proposition even in good times, but especially now that jobs are being cut left and right. When that one job goes, all of the necessary income goes with it, leaving the person with no way to pay the bills (unless there is a substantial savings account available). It used to be okay to rely on one job for all of your money. Companies encouraged long tenures and rewarded long time employees with regular raises. If you did your job well through the years, you could generally count on keeping that job and the associated security. Those days are gone and we’re in a world where it’s now every man for himself. Companies have no fear of cutting your job, your pay, or your hours. It’s far better now to be more in control of your own destiny.
This is where having multiple income streams becomes a real asset. With multiple income streams, if you lose your “main” job, you will likely still have some money rolling in. The more sources you have for money, the less risk any one income stream entails. It’s like investing in the stock market. You don’t put all of your assets into one stock because if it tanks, you lose everything. You diversify your portfolio into many sectors so that if one tanks, others will pick up the slack. Why should it be any different where your job is concerned? The more ways you have to make money, the more protected you are if one method is lost or weakens.
Even better is if these income streams are, at least somewhat, within your control. A full time job where you are paid by someone else is great, but you are totally at the company’s mercy. If they decide to cut your job or your pay, there isn’t anything you can do about it. However, if you make your main job a freelance, self-employment or independent contractor gig, your income and work is more within your control. If one client bails out on you, you can find others. If you want more money, you can work harder and take on more clients. Yes, you might succumb to weakness in your sector or a shift in the world that makes your job obsolete but generally being your own boss is the better way to remain in control of your own working life and income potential.
You can take this even further by having more than one area in which you are skilled enough to earn money. Maybe you are good at both writing and public speaking. You could write books and articles for a variety of publications and you could offer seminars on your area of expertise. Or maybe you’re good at making furniture and writing. There’s nothing wrong with making furniture three days a week and writing how-to books and articles three other days a week. If people stop buying furniture, maybe it’s because they are more interested in learning to make their own. You’re covering both bases. If you do landscaping, could you also offer some handyman services on the side? There are endless ways to combine your talents in order to make money in multiple ways.
Let me tell you a story to illustrate how this works and the benefit. Two years ago a friend and I were both employed at a large firm in the marketing department. She was a graphic designer and I was a copywriter. One day, the company eliminated half the department to save money. She and I were both out on the street faster than you could blink. I was mad, but resigned. The year before I had started doing some freelance work on the side and I knew I could pay my bills from that work. It would buy me time to decide what to do next.
My friend, on the other hand, was panicked. She was a single mother with no other source of income, very little in savings, and two kids. She blanketed the city with resumes and did everything she could to get another full time job. I suggested she go freelance and offered to let her piggy back on some of my jobs, but she felt that was too risky. She wanted the security of another full time job. Jobs in her area were hard to find and she eventually had to take part time work at a mass retailer to bring in some money. She ended up losing her house and moving into a tiny apartment. She finally found another full time job but she has a mess of debt to clean up and she is already worried that this new employer might soon be cutting staff. She is still at the mercy of one company.
I survived and even thrived. With my new free time I took on more clients and made even more money. I diversified the types of work I did, bringing in more clients. I looked for another full time job, but my heart wasn’t in it. I did get an offer, but I turned it down because I didn’t like the company. I didn’t “have” to take it, so I chose to go my own way. When I lost a big client in one line of work I didn’t panic. I just ramped up my work in other areas to cover the gap until I could attract a client to replace the lost one. Just for fun, I found some other ways to make “play” money.
It’s worked for me. In this economy clients have come and gone. Jobs have been contracted and then reneged upon. It doesn’t faze me because all of my eggs are not in that one basket. There are other baskets to pull from. I have one steady job as an independent contractor for a firm, but I know it can go at any time so I make certain to keep other jobs active. I combine several types of writing with some design work and public speaking. I sometimes work with a friend who does catering work and I help her set up and take down. I’ve been known to serve, too. Seasonally I even work a part time retail job at a friend’s store. I take other jobs from time to time, just to keep myself involved in life. For some “play” money I do online surveys, rewards sites, and focus groups. It’s not a lot of money, but it’s pocket change that I can blow without dinging my main income. I also receive some passive income from investments, royalties, and licenses to use my work that I’ve granted over the years. At times it’s difficult to keep several balls in the air, but with a lot of organization I manage. At one time I had about seven sources of income working for me at once. That was a little extreme, even for me, but it was the holidays and I was doing my main job plus some fill in work for friends. Usually I keep about three income streams going at one time, plus my passive income.
I never worry about a layoff or a slowdown in my sector. My work overlaps so many sectors that I’m protected if one or two slow down. If someone cuts me loose, I just pick up the pace somewhere else. If I need more money, I find more work. Some people used to think that I was living carelessly or that I was too scattered. They thought I should “settle down” and get a “real” job. But the thing is, many of those people have now lost their “real” jobs and have no where to turn to make money. I’ve always known that my life was different from most people’s but now I see that, consciously or not, I was working to protect myself from economies and employers that go “poof.” Having multiple income streams that you control is the best way to protect yourself.