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I talk a lot about creating financial security through minimizing debt, creating significant savings as a financial buffer, etc. Another layer to the idea of financial security is creating multiple income streams.
ONE OF THE WORST BLOWS TO YOUR FINANCIAL STATUS COULD COME IN THE FORM OF JOB LOSS.
One way to minimize the magnitude of this type of event is to develop multiple streams of income. This is something that may take several years to put into place. Creating a plan to develop this type of financial picture may be something that you start now, with the realization that it may not come to fruition immediately.
The higher percentage of your overall income that comes from additional sources, aside from your primary job, the less likely any single event can substantially reduce your income.
HERE ARE A FEW SUGGESTIONS:
1. DIVIDEND INCOME FROM INVESTMENTS
- This requires you to have invested a substantial sum of money, which will take some time. Be patient and keep investing. The higher your overall savings rate, the faster this process will go.
2. RENTAL PROPERTY INCOME
- I personally am not a fan of financial rental properties, but if you do make sure you don't "over leverage" the property. Check out the book Retire Early with Real Estate for some strategies.
3. START A SIDE BUSINESS
- A side hustle can be a great way to pursue a passion and diversify your income. The process is a lot easier than you may think. I used InkFile to form my LLC, used Weebly to make a website, created a social account.... the rest is history!
4. GET A PART TIME JOB
- This may or may not be in the same field as your primary job. Especially if this is in a separate industry, it's a great way to protect your job from specific industry declines. You can even consider things like Ebates (Rakuten) or online surveys to make extra money.
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