Multiple Streams of Extra Income

I’m always on the look out for ways to generate additional income. So I was especially interested in the extra income guide put out recently by Pinyo, owner of Moolanomy.com.

The guide is for those who are interested in earning more income so they can become less dependent on their job. Income diversification is as much about spreading risk as it is about doing something you love. We’re moving from the traditional, single employer for life to depending on ourselves—our skills—to create income now as well as in the future.

Moolanomy sums it up best:

In short, I believe that the concept of having a career is dead (with a few exceptions). It’s too risky to rely on one source of income, especially when most employers do not hesitate to cut jobs to make their numbers look good. I think it’s imperative for everyone to minimize their income risk by building multiple income streams.

One belief I’ve had to re-think the last few years is the idea of multiple streams of income. Whenever I heard the phrase, I immediately thought of someone working feverishly on multiple side projects, each bringing in thousands of dollars each month. But that’s not really the case in reality.

The true goal of creating multiple income streams is to create passive income. As stated in the Moolanomy guide,

Passive Income (or Residual Income) — [is when] money is working for you. This is the opposite of active income. Once you stop spending time on these income sources, the income flows don’t necessarily stop.

So, the idea isn’t to create a full-time income from any one source—at least not inherently. Rather, the idea is to create income that doesn’t stop flowing once you stop working.

The problem I always had was that I didn’t consider a $300 per month income stream substantial or at least not worth the effort. Putting in an extra 20-30 hours per week, in addition to a full-time job, just didn’t seem like a great return on sweat equity. But if that $300 income stream continued to flow for years, maybe decades, without much additional work, what does the return now look like? Much better I believe now.

But you have to get started before you can earn passive income, right? And if you’re going to be spending time doing income generating activities (giving up other things in the process) then maybe you should consider doing something that peaks your interest to a certain degree.

Start with ideas related to things that you enjoy doing. After all you want to get away from the stuff that you do not like. And you’ll be spending a lot of time getting your business going so you might as well do something you like.

Amazingly, this was also a stumbling block for me. To a certain degree, if you’re making money, you can put up with a lot of crappola. That’s why most of us stay in jobs we really don’t enjoy. The money at least somewhat takes the edge off.

But when you’re starting a side gig from scratch, doing something you don’t enjoy will be an exercise in frustration and futility. Odds are the payoff won’t come until months, maybe years, down the road.

If you’re doing something you don’t enjoy, in the hopes of a large return later, that’s like volunteering for a job you don’t enjoy. Hard to stomach.

Embracing the $300/mo income stream, along with the other hundred per month income streams, is the ideal way to place your career bets. Lose a few streams and you’re hardly bound for sunkville.

Check out more at Moolanomy’s extra income guide.

Trackbacks/Pingbacks:

  1. A Daily Plan to Improve Your Finances – and Life - October 19, 2010

    [...] next step is to jumpstart your cash inflow by creating passive income streams. Passive income may be derived from things like interest accumulation, royalties, [or other] [...]

  2. Lose the Cable TV, Gain Your Life? - October 20, 2010

    [...] Jerret Turner writes about personal finance issues from his own trials and errors. He also believes the best way to improve your personal budget is to earn more money. [...]

  3. Adventures of a First-Time Rule Questioner - October 20, 2010

    [...] Jerret Turner writes about personal finance issues from his own trials and errors. He also believes the best way to improve your personal budget is to earn more money. [...]

  4. Those Pesky Obstacles Are Your Life - October 25, 2010

    [...] written before about earning extra income so you can finally get a little financial breathing room. What’s the next step you need to [...]