One of the hottest concepts right now is the premise of creating multiple streams of income. While everyone wouldn’t mind making a little extra cash, there are even more benefits that can be reaped from having more than one source of income. Let’s go over just a few of them.
1. Help save for retirement.
The average person needs to have more than $500k put aside for their retirement in order to live in comfort and without worries. Unless you have a job that pays incredibly well, this is going to be a pretty daunting task. You cannot rely on social security payments to secure your future. Whether you’re 25 or 55, it is never too early or to late to put aside money for your retirement. Unless the thought of working until you drop dead appeals to you, you’re going to have to find ways to supplement your current income.
Multiple income streams can be incredibly beneficial not only for retirement planning, but later in life. Smart investments will continue to reap rewards for many years to come and you’ll have that nice supplemental income that will make your life easier far past the retirement age. A good concept to try to is put all of your multiple income streams into a high interest account to make even more money for your future.
2. Layoffs and downsizings happen every day.
No matter how secure you think your job is, there are still chances that you could get laid off. There are very few guaranteed jobs in this world that provide lifelong security. If you are relying solely on the income for your job to pay your bills and make ends meet, you are literally one paycheck away from financial ruin.
It’s a stark reality that all of us face. However, if you have multiple streams of income coming in, you won’t have to worry so much. You’ll have a cushion that will tide you over if you do get laid off or lose your job. In some cases, lucrative streams may even replace the need for your job entirely.
3. Accidents happen.
Even if you have insurance – what would happen if you were injured today and no longer able to work. Could you pay your bills? This happens to thousands of people every year and they risk losing their homes, bankruptcy proceedings and worse. By having that extra cushion with several different streams of income, you are reducing your reliance and making sure that no matter what happens, you’ll be ready to face it.
If you don’t have health insurance, it’s even more vital to have steady streams of income coming in each month. You may be the picture of health right now, but what if you get hit by a bus on the way to work tomorrow? Unless you have thousands of dollars in savings, the answer isn’t pretty. Even if you do have a savings account do you really want to use it for that? What will happen when it runs out? The best kind of insurance you can have is a steady stream of extra income.
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Originally posted 2008-12-08 00:54:04. Republished by Blog Post Promoter
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Diversification, Financial Security, Income Streams, Investing, Long Term, Money, passive income, Personal Finance, retirement, Standard of Living
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5 comments ↓
Hi
The other great thing about developing additional income is that it adds to the money that YOU can decide what to do with. If you take home $3,000/month and earn an extra $200/month from other income streams it looks pretty small. However if your essentials (mortgage, food, clothes etc etc.) come to $2,500 then you have increased your disposable income from $500 to $700 or by 40%
Neil
[...] dreaming big is an absolute necessity and more often than not, those that do dare to dream of big financial rewards are the ones that are able to achieve those [...]
I stress to people all the time…THERE IS NO JOB SECURITY!
Teachers who have tenure are a prime example of people who think they are safe. All they need is one disgruntled student to accuse them of something and they’ll have a problem
Get a second stream going…even if it’s selling stuff on ebay. Develop the skill of making your own money. It may come in handy some day.
Great post and ideas. Job security is a thing of the past. Employers are no longer looking out for or taking care of employees. in fact, they don’t care if you are happy or not working for them.
Definitely a good idea to have alternate sources of income. If you have two incomes, at least learn to live on one in case one of you gets laid off or injured and can’t work. If living off one income is not feasible, at least put away 6 months worth of expenses and eliminate debt. If you have no debt, it certainly makes life easier if you lose your job!
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