The Benefits of Multiple Income Streams That You Control

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.

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11 Responses to The Benefits of Multiple Income Streams That You Control

  1. Dana says:

    I think more and more people are beginning to realize that relying on one employer to provide 100% of your income is not a smart strategy.

  2. Baker @ ManVsDebt says:

    I like the school of thought that has you look at your employer as your number 1 customer. If you treat your employer as your customer, then it’s not the end of the world if you lose a customer, you just have to go out and get another one (or two… or three). This has changed my perspective on how I market my skills and how I choose to work!

  3. JC says:

    relying one a single source of income is always risky

  4. Stacy Adcock says:

    I once considered working for my husband’s company. I didn’t and now I’m glad I kept my local government job. It’s secure because I’m a senior employee and although I would make better wages working for my husband on a regualar day, I’d now be working for free because he couldn’t afford to pay me. There’s something to be said for not putting your “eggs in one basket”.

  5. Jay Gatsby says:

    While entrepreneurship is commendable, most people aren’t cut out for it. They are either afraid or lack the discipline necessary to succeed.

    I would advise anyone who craves the safety of working for someone else to save your money in case you lose your job. With enough savings, you can ride out your unemployment with minimal impact to your lifestyle. If your savings reach a high enough level, you can even draw off some or all of the interest to cover your monthly bills.

    Jennifer – I get the impression that you are a single individual. Entrepreneurship is far easier when you don’t have a spouse or children dependent on your income. You can take risks that others cannot. If you fail, then you only have to worry about yourself.

  6. Monkey Mama says:

    I agree with Jay on many levels.

    But the rest of the article is right on. I think what most people don’t understand about those of us who live off one income for a period of time in our lives, is that we are practicing exactly what this post breaches (on some level). Or maybe I should simply say that marriage is a way to achieve that end. I don’t expect a lot of future earning potential in my career path. But I Am okay with that for many reasons. A main reason is because my spouse can always rejoin the workforce and increase our combined income considerably. If something were to happen to me I also have another wage earner, in addition to any insurance we have put in place, or any unemployment I may receive.

    Living well below your means kind of has the same benefits though. IT’s kind of the “lazy” way in some sense. It buys you time anyway, when other income streams decrease.

  7. Moneke says:

    sounds like you are a slave to money…

  8. China Brooks says:

    Amen sister! I also have to agree with Jay. Entrepreneurship takes a lot of discipline and is easier when you don’t have a family to feed. But for me, someone who just doesn’t do 9 to 5 well (nor do I have children), multiple income streams are where it’s at!

  9. Chris says:

    Use your investment to generate income. Either bonds or CDS can pay you monthly income and keep your principal safe!

  10. Doug says:

    Yes, I agree you can’t rely on an employer for your income. You should establish at least three income sources so that if one dries up you can fall back on the others.

  11. Gail says:

    I married a self employed man while working a full time punch the clock job. Three weeks later I was too sick to continue working and never went back to fulltime employment. When I’m not resting and taking care of my health we run an on line store which everyone in the family pitches in on since I can’t do it all, I also have a source of income from being an alffliate for several companies. They don’t make a lot of money, but when you get a $100 check in the mail, do you complain that you don’t get one every month or be happy that this month paid off. Hubby does his regular job, consults for pay with others who want to learn piano restoration and goes out to give tunings aand minor piano repairs. We also have a rental property that brings in some income and should bring in more once it is paid off in 6 years. Yes it can be trying to make ends meet especially since so much of our income is soaked up in medical expenses since we both have poor health, but since neither of us can work a regular job because of that poor health, it is our only way to earn an income. I am firmly convinces that if I was completely well tomorrow, all I would do is to ramp up my work and work harder and thus earn more I have plenty of ideas on how to earn more–just don’t feel well enough to carry them all out.

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