The Benefits of Multiple Income Streams
Supplemental income not only makes it much easier to achieve your financial freedom goals by boosting your earnings, but it also provides a safety net should you ever lose your job or suffer a financial misfortune. What I am referring to, is any income other than earnings from your regular job.
It is essential to have multiple income streams, especially considering the troubled financial environment that exists today. It is important to chart out your financial life as much as possible by personal budget planning, developing a financial freedom plan, and doing some financial planning for retirement. However, no amount of planning can prepare you for all of the possible financial setbacks that could happen.
Supplement Income to Reduce Risk
As an investor, you would be unwise to invest all of your money in the stock of one company; it would be better to spread your risk around. If you were a business owner, you would want multiple clients so that if one major client decided not to use your services, there would be enough others to keep your business going. In the same way it is better if you develop multiple streams of income to cushion the blow of losing your job or some other significant source of income.
Besides losing a source of income, other unexpected events can occur, such as unplanned expenses or a loss in investments. By having multiple income streams, you will be better prepared to meet unplanned needs.
Meet Your Financial Freedom Goals with Supplemental Income
Having more than one source of income is also beneficial in meeting your financial goals, whether they are knowing how to eliminate debt, increasing your standard of living, saving for a large purchase, or even retiring early or more securely. By experimenting with the retirement saving calculator, you will find that even a slight increase in the amount you are saving each month can have a significant effect on your retirement plan.
There are many extra ways to make money. Some sources of income are considered active income. Active income is where you are actively doing something to earn money, like working a second job or running a small business.
With passive income, on the other hand, you initially work to set up something and it continues to generate income without much ongoing effort. Renting out property or receiving royalties on a book you wrote are both examples of passive income.
A third kind of income, portfolio income, comes from learning how to invest money in stocks, bonds, and mutual funds that generate dividends and capital gains.
It is good to have a combination of active, passive, and portfolio income. With multiple sources of supplemental income, you can meet your financial freedom goals more quickly and be prepared for unplanned financial challenges.
Passive Income Ideas
Developing multiple streams of income is a strategy that will help you achieve your financial freedom goals more quickly. Here are some creative, passive income ideas to get you started.
Yard Sale Tips
A garage or yard sale is one way to make a little extra cash quickly. This article gives some great yard sale tips that will help make your sale a success.
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