One thing that money savvy people have learned from the recession is that income diversity is important. Getting all of your income from one place can be devastating if you lose your job. You don’t have to quit your day job if you don’t want to, but you can begin cultivating a little alternative income so that if you do lose your job, you have something that can help you get through the tough times. Here are 4 ways you can cultivate alternative income streams:
Bonds are basically loans you offer to organizations. You provide capital for a corporation or government (local, federal, foreign), and that organization promises to return the principal after a certain amount of time. In the meantime, you receive regular interest payments. The returns may not be huge, but a habit of investing in bonds can help you eventually create a solid revenue stream.
2. Dividend Paying Stocks
Dividends are coming back in vogue now that the recession is officially over. A dividend is a payment that some companies make out of their earnings. Some dividends are larger than others, and companies can change the dividend if they like, but careful investing can lead to a regular check four times a year, independent of your day job.
3. Build a Web Site
If you have a little more time, you can build a web site or blog and post useful and interesting content. Promote your site to draw traffic. You can use affiliate programs to earn money from click-throughs on advertisements on your web site or blog. This takes a little more time to cultivate, but once you get it going, you can maintain the site or blog, and get a tidy little revenue stream flowing.
Write a book. If you can get it published, the royalties can provide a revenue stream — although you need to be aware that royalties can dwindle. You can also develop a revenue stream by writing your ebooks and selling them on your own, to provide another source of direct income.
For maximum financial security, it is best to cultivate a few different alternative income streams if you can, avoiding the financial mistake of relying too much on one source of income. That way, you are prepared with a diversity of income for tough economic times.
What other ideas do you have for cultivating alternative income streams?