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Why I Love Having Diverse Streams of Income

by retirebyforty on August 25, 2014 · 30 comments

in income

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The following article is from Melanie, our staff writer. Melanie is in the beginning phase of her journey to Financial Freedom and she’ll offer a refreshing point of view for us. She recently quit her day job to freelance full-time. Melanie is a great writer so I think it will work out just fine for her. 

Why I Love Having Diverse Streams of Income

diverse streams of incomeFor many people, the idea of working in the same place for 30 or 40 years is no longer relevant. Long gone are the days of sticking with one company from graduation to retirement.

People, especially Millennials, are job-hopping more than ever. In some ways, I think it’s because we’re always looking for something better and we have a hard time staying still. But I also think that we have become savvy with different ways to make money, outside of our day job. If the recession taught us anything, it’s how to be creative and make money in different ways.

Instead of working one and one job only as your sole source of income, I’m talking about making money in a lot of different ways.

Enter the side hustle.

One thing that I firmly believe in is that you should diversify your streams of income.

I’ve been an avid side hustler for years and recently decided to take my side hustles full-time as a fledgling entrepreneur pursuing freelance writing and virtual assisting. In addition to my online work, I still work events as a brand ambassador and as an event assistant for a local organization, which helps me get away from the glare of the computer. I love it all!

In the past, I’ve done a variety of things to make extra money including: cleaning houses, pet sitting, selling water at a rave, babysitting, working as a mother’s helper, writing copy for newsletters, editing webinar scripts and writing seo (search engine optimization) descriptions. I’ll try just about anything if it involves making money in a new way. More often than not, it’s proven to be a great, unique experience and has led to more work.

But why am I so passionate about this seemingly fragmented type of work?

Because career monogamy can be so stale and also so risky. Imagine if you got let go from  your job today. What would you do? How would you survive? Sure, you might get a severance package and be able to apply for unemployment. But what would you do in the interim?

I love side hustling because it forces me to be creative. It allows me to feel confident that should one stream of income go away, I have another one to keep me afloat.

I believe that everyone should have multiple streams of income as part of their financial picture. It strengthens your financial security and provides a type of insurance to job insecurity.

Here are some additional benefits of having diverse streams of income through side hustling:

  • Learn new skills
  • Expand your network
  • Try new things in a low-risk environment (win!)
  • Make extra money to _____________ (pay off debt, save for a down payment, travel?)
  • Start a side business
  • Make new friends
  • Explore your passion
  • Use your time productively instead of on “bad” habits (watching TV, excessive social media, eating mindlessly, indolence)

For me, side hustling has changed my life and has become a way of life, in addition to changing my outlook on making money.

I enjoy the challenge and hunt for new opportunities. It feels incredibly empowering to make money on the side and diversify your income.  For me, side hustling has become one of my greatest assets in helping me strengthen my financial situation.

If you are interested in diversifying your streams of income, start with your skill set. Can you work as a contractor or consultant? In addition, start discussing your prospective work within your network. Just telling people you are looking for extra work can make a world of difference.

The key is to find where your passion and skill set meet and overlap with what people are willing to pay for. From there, you can start a side hustle doing just about anything and diversify your income streams for a balanced financial picture.

Do you have multiple streams of income? If so, how many? If not, what is holding you back? 

Photo credit: flickr kosmolaut

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{ 30 comments… read them below or add one }

Stefanie @ The Broke and Beautiful Life August 25, 2014 at 5:19 am

Side hustling is definitely a good habit to get into. When you find out you can get paid for your “free time”, it’s pretty life changing.

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Melanie @ Dear Debt August 25, 2014 at 9:40 am

Right? I’m always thinking of how I can use my “free time” to make easy money.

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Financial Forager August 25, 2014 at 6:45 am

I became a freelancer in my field about 10 years ago. It opened my mind to new ideas and ways to make money. It is a great way to explore where your passions are and if you can make money doing it, that’s a plus. Side hustling has allowed me to make some money working from home. I am always on the lookout for new money making ideas and new income streams. It changes the way you think about life. Thanks for the great post!

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Melanie @ Dear Debt August 25, 2014 at 9:51 am

Thank you, glad you enjoyed! I also like figuring out new ways to make money, too. It’s so empowering and fun!

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SavvyFinancialLatina August 25, 2014 at 7:15 am

I don’t make a lot of money from side hustles right now, but I’m always happy to get any money! Any money is awesome on top of the regular old paycheck. I’m always on the lookout for new opportunities.

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Melanie @ Dear Debt August 25, 2014 at 9:53 am

That’s awesome! My personal network, Twitter, Craigslist, FB groups, and TaskRabbit have been my go-to resources for finding side hustles.

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Will August 25, 2014 at 8:24 am

I’m like you. I’d have a heck of a hard time sleeping at night without multiple streams of income.

Who needs Lunesta when you have a side hustle!

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Melanie @ Dear Debt August 25, 2014 at 9:54 am

Haha, I love it! You should trademark that ;)

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Tommy August 25, 2014 at 10:28 am

I really love the way you think and this article is right-on. As someone who slogged through many years of a 31 year career and preaches now that there has to be a better way to live I think you nailed it here. I am currently in retirement number 2 but always keeping my eyes open to opportunities that I would LOVE to do. While I was in my initial career I had 2 “side hustles” for the very reasons you outlined. I first started a sporting goods dealership based on my passion for sports but later found out I preferred the tax and accounting side of the business over the retail side so I sold that. I needed some education so I decided the best way to learn and earn was doing taxes so I went the H&R Block route for 4 years were I found out I was really good at it and enjoyed it. I then went out on my own with a very profitable tax practice for many years until I had to relocate for career #1 and had to sell that practice. Since my first retirement I have pursued 2 awesome side hustles to my retirement that were amazing both personally and financially. When my passions change I move on now. Not slogging it out anywhere for anyone again. Great article.

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Melanie @ Dear Debt August 25, 2014 at 8:38 pm

Glad you enjoyed it! Wow, sounds like you have had a fun, lively career pursuing various interests and passions. That is what I love about side hustling. You can learn new things and try something new.

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Tawcan August 25, 2014 at 10:41 am

We’re working on diversifying our income streams as well. I certainly sleep better at night knowing that we have other ways to earn income.

Having different income streams also means that you’re not tied to 1 specific location. If you want to travel around the world and work at different locations, you can do that. :)

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Melanie @ Dear Debt August 25, 2014 at 8:40 pm

Exactly! I love the possibility of living in different places.

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Nadia August 25, 2014 at 12:11 pm

I couldn’t agree more, I work full-time in the banking industry but as my side hustle I teach spinning classes. Brings in an additional 300$ per month. Essentially, I get to workout and motivate people (my passion). The additional income goes into my portfolio to further help me in my retire early plan.
These days, I am also trying to think of another way I can expand the “motivate people” as another side hustle. Perhaps posting a classified add saying: who need’s a kick in the bu**? ;)

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Michelle August 25, 2014 at 12:12 pm

Great post! I’m all about being more diversified. I am trying to add more services to my business, but I am mainly wanting to work harder on adding passive streams to my life.

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Melanie @ Dear Debt August 25, 2014 at 8:42 pm

Me too! I want at least one good passive income stream. :)

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SNengr` August 25, 2014 at 12:12 pm

For once….. I can’t disagree with you more! Young people should choose a stable industry and focus like a laser on becoming the best “fill-in-the-blank” they can be. If they chose a good field and have become an expert in their field they will be invaluable. Side hustles take away time, focus, and effort from budding careers.
My wife and I are both Engineers and I can guarantee the extra non-paid hours we spent in the office when we were younger have paid huge dividends. Much more than any side hustles.
I grew up and paid for my college on side hustles, including owning livestock from the age of 9 to 18 and starting a metal fabrication shop. But don’t let side hustles interfere with the best money making opportunity you will have, your career. I am an avid woodworker and have been offered thousands for consignment work and have refused. Maybe I will do that sort of work when I retire after 40, but right now I will continue to focus on my career and am compensated well for it.

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papadad August 26, 2014 at 12:46 am

Excellent point — while side hustles can be fun, they can also be distracting and can detract from reaching full potential in a traditional career. Balance is key. Some folks that i know love the side hustle because it’s a means of survival, but ask them honestly and they all say they would prefer to be in meaningful, steady “regular” career with growth and upside potential and development opportunities over the “hopping from side hustle to side hustle”… it’s definitely OK, and fun, and can grow your broad capabiliies, but tend to be far lower paying (in most cases) versus a traditional career. Of course, some are not able to or willing to take the traditional route, in which case “by any means” to make a living comes to mind…

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retirebyforty August 26, 2014 at 9:24 am

I think focusing on a good career is probably better than sidehustling as well. Especially when you’re starting out, it’s better to work hard in your career and climb the ladder. Side hustles are good too because if your career doesn’t work out, you’ll have options.
Career longevity is getting shorter and everyone needs to be aware of that.

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Merlion August 25, 2014 at 1:41 pm

I am exploring ways to add more streams of passive income in addition to rental and dividend income. I also have a consulting gig that also helps to pay for our yearly expenses but I think passive income is so much better!

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Melanie @ Dear Debt August 25, 2014 at 8:44 pm

Wow, that’s a nice consulting gig you got there! Nice work! Passive income seems great — I need to get on that train!

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Alexis August 25, 2014 at 3:38 pm

I have side hustles as well and always try to find extra ways to bring in some income. I’m a college student so I’m always trying to find money in all different ways.

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Melanie @ Dear Debt August 25, 2014 at 8:47 pm

Look into being a brand ambassador! I do that now and it’s easy money. I REALLY wish I knew about it in college.

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One Cent at a Time August 25, 2014 at 5:17 pm

I have a side hustle and you know what. It was a passion first and now turned in to my second job. But I love blogging job. Not taking the leap of faith though :)

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Melanie @ Dear Debt August 25, 2014 at 8:49 pm

That’s awesome it turned into your second job. Honestly, I hardly make any money blogging myself. My blog has been a portfolio to get other work, though. That’s how I have used it mostly. I am looking into more passive streams of income though.

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Roy August 25, 2014 at 5:49 pm

This is definitely a good advise. I am currently exploring alternative income stream just for the sake of making more money to achieve my financial goal. I am a programmer, so a programming gig is less desirable, because it takes a lot of effort to finish a project. I tried one time, and pulled numerous all nighter. I said to myself its the first and last time for me.

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Melanie @ Dear Debt August 25, 2014 at 8:51 pm

Yeah, you definitely need to consider the pros and cons before taking on a side hustle. Some are definitely not worth it! I have a whole post on my side hustle fails, lol!

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EL August 26, 2014 at 8:33 am

I believe we all should have income streams like Joe does; currently I have my blog and dividend income. One is currently being reinvested into more shares, so it doesn’t feel like cash in my hand. I want to have at least 5 income streams. So still working on it.

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Shane August 29, 2014 at 5:04 am

I have always had a “side hustle” going on. It is a always a joy to get paid for your hobbies and thing that you like to do in your spare time.
Enjoyed the post.

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retirebyforty August 29, 2014 at 9:34 am

Side hustle is going to be a way of life in the future. :)

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Marvin September 2, 2014 at 4:11 pm

Very great points. I love multiple streams of income! While most won’t admit it, most great things don’t last forever and diversifying your income streams allows you to build a solid financial foundation especially if hard times hit.

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