One of the ‘secrets’ of millionaires (and something that most of your parents probably never told you about) is the value of multiple streams of income. Did you know that one of the richest men in the world, Warren Buffett, has over 80 sources of income? If you take a look at most of those who are really doing well for themselves, you’ll probably find that very few of them rely on a single source of income.
I know, I know. As a young adult, you’re just getting started and most of your energy is probably going toward managing your finances and trying to get a handle on this thing they call ‘adulting’. More than likely, you’re just getting out of college and trying to find or starting your first ‘real’ career and the last thing you want to do is juggle more than one job. I’m not suggesting you go get a bunch of part-time jobs, though. With some planning and flexibility, multiple streams of income are possible even when you are working a full-time job.
Examples of Multiple Income Streams
Not sure what I mean by multiple income streams that don’t involve part-time jobs bartending on the weekends? Here are some examples.
Real Estate: We talked in our last blog about avoiding the peer pressure of buying a home right out of college so you don’t get trapped in a huge debt straight out the gates. Instead, you can buy a duplex and rent out half of it to cover your mortgage payment and bring in a little extra every month. You could also buy a fixer-upper and work on it during the weekends with the intention to flip it in six months or a year. Real estate can be a great investment if you make it work for you instead of against you.
Investing: It doesn’t take a lot of cash to invest if you know where to put the money. It could mean buying a few stocks, getting involved in options, or putting money into a friend’s landscaping business. Investments, when done correctly, provide another stream of income without a whole lot of additional effort.
Side Business: What are your skills? Could you use those skills to launch a little side hustle? I know many young adults who use their videography skills to shoot weddings on the weekends or their artistic skills to create items they can sell and drop ship. With just a few hours of work during the evenings or weekends, you could build a thriving side hustle that will pay big dividends.
Why Are Multiple Income Streams So Important?
So why am I so adamant about the importance of developing multiple income streams? It’s pretty simple: having a multitude of ways to make money keeps you flexible and gives you freedom. When you work one job and one job only, you have a singular point of failure. This means that whatever your boss tells you to do (work extra hours, relocate across the country), you have to do. It also means you could be fired at a moment’s notice and be left without a paycheck. When you have multiple streams of income, you build up an F.U. fund. Yes, that stands for exactly what you think it does! It’s a back-up plan that means you’re never trapped and that you have the freedom to make decisions based on your values rather than your need for security.
If you sit down for a few hours and really think about it, I bet you’ll come up with at least a few good ideas for multiple streams of income that are feasible in your life. Want to chat about them or do you have questions about why this is so vital to start building your adult life?
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