Multiple Streams of Income
Diversification is a must have in any portfolio. But when it comes to our regular, routine, put the food on the table income, so many of us forget what diversification is all about. Many times we see couples that work in the same industry, or even in the same business, or small business owners who have only a few customers or clients. While diversification in your investment portfolio is important, it is even more important in your income statement.
Managing Your Income
If you’re like most, you’ve become dependent on a consistent stream of income (obviously). So, what we’re going to do is lay out a basic step-by-step process as well as difference income investments for different budgets.
Safeguarding Yourself
Absolutely no investing should take place until you have established an emergency fund in case of a layoff or a reduction in monthly income. How can you plan for the long term if you haven’t even though about the short term. At the very minimum, figure on 6 months of living expenses. The 99 weeks of unemployment benefits should only help buoy you in a financial pinch, but it shouldn’t be your only plan.
Part Time Work
One of the best ways to keep your foot in the door when uncertainty occurs is to establish a part time position maybe on weekends or evenings as a way to keep secondary employment just in case. There are plenty of small, medium, and large businesses that have after hours help on staff that can get as little as 10 hours of work per week up to 40 or even more.
Keeping one of these jobs just in case is a great way to protect against job loss. I also recommend that you seek out a job in a place you frequently shop as a way to save money on the things you buy already. For instance, a job that offered 10 hours a week at WalMart will give you some spare cash, but you’ll also get a discount on everything you buy there. Pretty cool!
Covered Call Writing
Writing options on already owned stock is a great way to generate an extra income that so many investors so easily look over. By selling covered calls on your existing stock holdings, you’ll be able to generate a convenient and consistent income from shares that aren’t earning you any more just sitting there.
You’ll need to own at least 100 shares of stock to sell covered calls, and ideally even more than that. For this reason, covered calls generate the best returns with more shares of stock because you’ll be able to reduce the costs of trading. This is an excellent way to make extra cash, and addictive too!
Real Estate
You’ll never find a guide on multiple streams of income that does not include real estate investing. Whether you have $10 million or just $10,000, there are plenty of rental based schemes that will provide solid monthly income.
Many people choose to buy homes on credit, either on a 15 or 30 year term. The 15 year term allows for your tenant to practically make the monthly payment for you, and you own a house completely free after 15 years. Others choose a 30 year term that provides monthly income on top of a covered mortgage payment. The extra cashflow is great, but you can always borrow against your equity in the 15 year home too.
