Diversification. I’ve been teaching personal finance to teens, college-aged, and older adults for over a decade, and as a certified personal finance coach, the concept of diversification is one that comes up every time.
What do I mean by diversification? Well, for the focus of this article, I’ll be sharing the importance of having multiple income streams. I envision each income stream as a different color - providing opportunities to make your life fuller, richer, and more colorful.
Why is diversification important? Well, we all saw what happened during Covid regarding many people losing their primary and only source of income. And while the loss of income due to Covid policies was something unprecedented and far-reaching, losing your primary source of income happens to individuals all the time.
How will multiple income streams benefit you?
Consider that multiple income streams can do the following:
Of course, tightening your budget, reducing unnecessary expenses, and seeking a pay raise can help bring in more income, but the focus is not just to increase income but to add a variety of income streams to protect yourself.
Start with your interests
So here are a few high-level suggestions for additional income streams:
I am personally familiar with all but the last two and know them to be viable sources of income. My husband and I have been investing since our late 20s. My parents had multiple rental properties. In addition to having my own business empowering companies with specific tech solutions, another area of deep interest for me is in natural health and wellness, which I started exploring and then diving into almost 30 years ago. That led me to start a network marketing business in the health & wellness area.
Be discerning and evaluate opportunities
When evaluating any opportunity, it’s wise to be discerning. As an example, when considering a network marketing business, the following are critical for success 1) a company of integrity, 2) quality products, 3) a strong compensation plan for everyone, and 4) a mission of empowerment. While some may not agree, if these attributes are present, I truly see network marketing as a viable business model for generating income.
After evaluating with discernment, I started with a network marketing company in the area of health & wellness in 1997 and another on the ground-floor in 2021. Although initially you won’t know positively if it will be a great opportunity, just do your due diligence and if it seems a good fit, dive in and see where it takes you. You’re in control to pivot as needed.
So, consider a few ideas that are a good fit for additional income streams for you, and get started. Diversification can color your life and income richly. And while you’re not going to get rich overnight, it does tend to add up with hard work. And then with wise investing and compound interest, you can create another income stream --> investment income, where your money will go to work for YOU.
As a certified Personal Finance coach (and homeschooler of 15 years), Kathleen has worked with people of all ages, but her passion is to help kids/teens/young adults take control of their finances early, learn entrepreneurial skills, generate multiple income streams, and get on a path to Financial Hope & Freedom so they can live into their passions and purpose. (Free Webinar on how to Empower Money Smart Kids with Financial Literacy & Entrepreneurial Skills)