Diversifying Your Income
Most well-off individuals would advise you that it's not a wise idea to rely on one source of income for your livelihood. Ever heard the saying, don't put all your eggs in one basket? Well, think about that while you think about your money. Now do you understand what I'm talking about? What would happen if your income source suddenly went dry (i.e. you lost your job)? Unfortunately today that tragic event will at some point become reality for a great majority of people. You can't just get a job, work hard, work up the ladder and expect your company to take care of you until the day you die any longer. For smart, established people, that's no biggie. Just dip into the dividend checks you're getting from your stock portfolio or borrow a little from your rental income account. For those of us who are smart but just haven't gotten ourselves established yet, that's a bit of a whoops. Now what?
One good protection strategy that I've recently adopted myself is to acquire a skill that is a little different or completely unrelated to your current occupation. A backup strategy, if you will, so that in the event that you do lose your job unexpectedly, you have another means of supporting yourself and your family. Your backup strategy should be something that you can do on a freelance, contract, or consulting basis. Sometimes you can just aquire a little more business skill and you can even use your current expertise by being prepared to offer your consulting services. Be careful about working as a consultant in your industry while holding a full-time job, however. Some employers have policies against moonlighting. This usually doesn't apply, however, if your side gig is unrelated to your full-time employment, unless your "second job" interferes with your ability to perform your regular job duties.
The most common diversification strategy is investing. Long term investing (real estate, stock market, etc.) is incredibly smart these days, because, let's face it, if you don't have diversified income coming in when you retire, most of us probably aren't going to live extremely well off of our retirment funds and social security alone. (Social security? We might not even have such a luxury when we retire!)
There are other shorter-term investment strategies that can provide you with some diverse income now, however. The primary one is if you can somehow acquire a property, a home, a duplex, or an apartment building that you can create rental income from that is more than your monthly mortgage payment and expenses, you're in the green. My suggestion would be to not utilize that income as income unless you absolutely have to, but to put it in an investment or savings account that you could have easy access to in the event that tragedy does strike, and then not only will you have at least some steady income to rely on, you've got a cushion to rest on as well.
Angela Stringfellow is a professional copywriter, designer and marketing communications consultant. Visit her website at www.stringfellowcreative.com for fresh marketing information and ideas, free articles, resources for aspiring writers, or to inquire about services. Initial consultations are always free.
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