With inflation being a yearly occurrence, it is important to have a stable income stream. More than that, you must make sure that your money is rolling and not left at the bank with annual fees much lower than yearly inflation rates. Let us take a look at how you can diversify your income.
In the past, having a 9 to 5 job means that you can more or less be financially stable if you know how to manage your time and finances well. However, with skyrocketing prices of grocery items and the cost of living being more expensive than previous years, finding ways to diversify your income becomes a financially-sound decision. Let us look at the different ways you can make your money grow and manage your money.
What Does Diversifying Your Income Mean?
Since many individuals have a 9 to 5 job, their income is solely based on their work performance, usually dictated by higher management. While this is a stable source of income, there are many other ways to make more money during your free time. Diversifying your income means having multiple sources of money so that when one source is cut-off, say during a pandemic or global recession, you can depend on your other sources of income.
Ways to Diversify your Income:
Have a Side Business
Since a 9 to 5 job entails that you have free time during your evenings and the weekend, you can look for a side hustle to have additional income streams, better yet, you can do more of what you love, such as your hobbies and take the entrepreneurial hat by making it as one of your side hustles. For example, if you love doing cute little crafts and your Pinterest page is full of them – why not sell your crafts online for a small fee? If you love baking during the weekends, why not sell it online as well?
Be Financially Responsible
Have a financial notebook (or excel file or app) to track your budget and determine where you can cut. If you drink Starbucks coffee every day, maybe you can invest in a good home espresso machine and make good coffee at home (and save a lot, too!). If you find yourself online shopping every day, you can delete these apps not to be tempted to buy unnecessary items.
Invest in Real Estate
The price of land or real estate will only appreciate over time. So if you have extra money apart from your emergency funds and insurance, one avenue to diversify your income is to invest in real estate, let it sit for a couple of years, and then sell it at a higher value.
Create Passive Income
Another popular way to invest your money is through passive income. Passive income means that your money does all the work even while you sleep! You can invest in stock options and trading services, though know that these types of activity are not without risk. Make sure you are equipped with the right knowledge and training before investing your money in stocks and trade.