Here on Joyful Dividends, I write a lot of the ways you can create multiple income streams. I believe that earning an extra income can completely change your life. With multiple streams of income and cash cows, you can afford to quit the day job you hate. You can stop living from paycheck to paycheck. You can pay off all your debt, and finally be free to do what you always wanted to do.
When it comes to investing, people like to say don’t put all your eggs in one basket. Have you considered that solely relying on employment income is doing just that? What would you do if you got fired overnight? With no more monthly stable paychecks, how would you pay your bills, feed your loved ones, and put a roof over your head?
Create Multiple Income Streams is Possible
At this time, you probably think it’s almost impossible to work another job or find another income source. Maybe you work more than 12 hours a day. Maybe you have a ton of other personal commitments that take up all of your free time, say maybe church activities, community gatherings, taking care of your children etc.
All these are okay. It takes a lot of grit and perseverance to create multiple income streams, especially if you have a lot of other commitments. What you really need is to acknowledge your strengths, play to it, and keep working at earning your first $10 a month, $100, $500, $1,000, and you are on your way.
Some of these additional income sources can include:
- Increasing interest from your savings account by being aware of offers made by banks
- Dividends from fundamentally strong companies and stocks
- Income from Airbnb rentals
- Selling your unwanted personal belongings
- Freelance income from working on what you are good at e.g. photography, design, music performances
- Rental income from investment properties
- P2P lending
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While some of the above income streams are recurring (e.g. rentals, dividends, Airbnb), others are more spread out across the year. Sometimes, you may get a dozen clients from freelancing, in some months, you may get none.
However, you can probably be comforted that you probably won’t lose all your freelancing clients at the same time, fundamentally strong stocks can weather a bad stock market correction, and not all your tenants on Airbnb will default at the same time! What this means is while your monthly income may fluctuate, it will always bring in extra dough. You will not have to rely on a specific source of income like you are now doing with your day job.
Keep at it, it gets better
Financial freedom and creating more cash cows always seems too good to be true, until you implement it yourself. While it is difficult in the beginning, every income source is a small step towards building a substantial retirement nest egg.
What I can suggest doing is this:
- Ask yourself what you are very good at, which you are not doing now at your day job.
- Create another sustainable income source by doing what you are good at? e.g. maybe you can teach a course on Udemy for a start? Or maybe, you can take a value investing course to learn how to find fundamentally strong dividend paying companies to invest in.
- Be disciplined. Make sure you have a fixed daily schedule and set aside 1 hour regardless of how busy you are. Work at your idea consistently for a week, then a month, and you could see some results.
- Get help from family and friends! If you are married or have supportive siblings, make it a priority to work together to generate another income source. When money comes in, you will feel a sense of satisfaction.
Working Towards A $1 million Nest Egg
Imagine this, if you are able to create multiple income streams and work towards a goal of having $1 million in cash by age 40, it really means you might be able to retire comfortably. $1 million in cash invested at a 5% dividend return rate means you will have $50,000 annually just from dividend income alone! While that may not be substantial enough for you to lead a rich lifestyle, I’m pretty sure you can lead a comfortable life by being frugal.
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In short, keep working at your idea, save, invest and reinvest. You are well on your way to an early and comfortable retirement.