Three Ways That You Can Diversify Your Income Stream
One of the most important pieces of financial advice that I ever received, was to diversify your income stream. You might have a comfortable, well-paying job right now, but everything is open to change. Even enormous businesses can go bust and if that ever happened, your salary would disappear along with it. Although I’m not suggesting for a second that everyone should go out and find two full-time jobs just in case of financial armageddon, it can pay to have a side hustle or two, just in case things do go a little pear-shaped. These are three ways that you can diversify your income stream and ensure that you’ll remain financially stable if the worst were to happen.
Build a Stock Portfolio
Whilst many people assume that a stock portfolio is something that only rich individuals can aspire to, that simply isn’t the case. The vast majority of people can afford to invest in stocks and shares, but there are some golden rules to remember. The first is never to risk what you can’t afford. It can be tempting to splash out a lot of money on what you think might be a promising prospect, but if you need that money to pay off your mortgage, then don’t spend it. Let stocks and shares be purchased entirely from your disposable income.
Secondly, not all stock portfolios look the same. If you’re a mid twenties recent graduate, then your portfolio will look wildly different to a wealthy retiree. Ascertain how long you have to wait for investments to come through and build a portfolio accordingly. If you have high disposable income, a good risk tolerance and a short amount of time, then high risk/high reward shares could be a good place to start. There are some sites that can offer you free Forex trading signals, alerting you to the right time to invest in certain stocks and shares.
Conversely, if you don’t deal with risks well and have plenty of time to wait for a modest return on your investment then develop a largely conservative portfolio. Of course, the key with both is to find diversity in your investments. Devote the largest portion of your portfolio to the investment type that suits you and have between 10 and 30% where you can either hedge your bets with a stable, slow investment, or dabble with high risk, high return trading.
Set Up a Side Hustle
This next tip is particularly helpful for the artists and makers out there. Developing a side hustle takes a great deal of determination, but it brings with it great rewards. If you have a passion for creating artworks, making jewelry, knitting baby clothes, or any number of ‘crafty’ hobbies, then why not turn your pastime into a money making opportunity. In the ‘real world’, things like local craft fairs, deals with stores and even car-boot sales can bring in enough extra income to make you notice the difference. Though the power of the internet will enable you to take your blossoming business even further.
Sites like Etsy, Not On The High Street and Folksy all offer makers and creatives the perfect platform to sell their wares. Their set up fees are nominal and they take a percentage on whatever they sell, much as a sale or return deal would work with a bricks and mortar shop. Getting to know the secrets behind making your listings stand out from the crowd is key. Great photography is essential to ensure customers can imagine themselves with your product. Concise item descriptions that are keyword focused, but not jargon-filled will help you rank higher up the listings too. Finally, advertising your Etsy site through social media platforms is a great way to garner interest in your product and hopefully turn page views into purchases.
Build a Business Blog
The third and final way to diversify your income streams is a topic that is close to the heart of this blog, blogging! If you have a knack for writing, can convey yourself in an engaging way, and have a story to tell that could benefit others, then blogging might be a way for you to bring in some extra bucks. In the case of this blog, writing about personal finance was the key to success. Decide on a niche topic that you’ll specialize in and get to work creating some original and interesting content.
There are lots of different ways to monetize your site, but one of the most popular is through simple ad revenue. In order to see a return on your time investment, you’ll need to familiarize yourself with the basics of Search Engine Optimization, or SEO. There are hundreds of guides online, but the golden rule is to naturally include keywords and phrases, without sounding like you’ve crammed them all in. This will help your blog find its way up the search rankings, pull in those organic visits and with a little luck, earn you some money in sweet ad revenue.