If you want to build wealth and become financially independent, you need to expand your income streams, even if you’re already working full time. Actually, reports show that the average millionaire has 7 different income streams.
The good thing is that today, there are endless ways to expand your income streams. You could start a digital marketing business, invest in the stock market, trade forex, start a blog, become a freelancer, create a YouTube channel and monetize it, the list is endless.
What’s more, even if you don’t know how to get started with these different ways of expanding your income streams, there are dozens of sites where you can find awesome online courses to teach you whatever you want to learn.
If you already have a fulltime job and are wondering if it is really important for you to have multiple income streams, here are 6 reasons why you need to expand your income streams today.
- Job Security Is No Longer Guaranteed
In the past, job security was pretty much guaranteed. It was normal for someone to work for the same company from the time they graduated from college to the time they retired. Today, things have changed. Job security is no longer a guarantee.
Over the last couple of years, companies have been automating many of the tasks that were previously performed by humans, putting droves of people out of work in the process.
Today, AI systems, rather than humans, are responding to our online and social media inquiries. Drones are making deliveries. You can get free legal advice from AI systems. In a few years, we will have driverless cars on our roads. Will machines and AI come for your job next?
A report by McKinsey Global Institute predicts that by 2030 (less than 10 years from today), robotics, automation and AI could take over between 39 and 73 million jobs that are currently held by humans.
What’s more, another report by McKinsey Global Institute claims that using technologies that have already been developed today, it is possible to automate more than half of the jobs in the world today.
Basically, this means that, even if you have a fulltime job, you can never be too sure that you’ll still have the same job in three or five years. To make matters worse, the Covid 19 pandemic has accelerated the rate at which businesses are adopting automation.
So, what happens if you wake up one day to an email from HR notifying you that your services are no longer required?
If your salary was your sole source of income, surviving after losing your job will be a huge challenge, especially in a world where jobs are becoming much harder to come by.
If you have multiple sources of income, on the other hand, you don’t have to worry about losing your job. Even if you get laid off, you’ll still have an income to keep you going while you search for another job.
- It Allows You To Follow Your Passion And Chase Other Opportunities
A survey carried out by Gallup found that 85% of workers around the world are not happy with their jobs.
If all these people are not happy with their jobs, why not quit these jobs and go do something that they actually love? The answer to this is amazingly simple – they need the money.
Most people are chained to jobs they hate for financial reasons. If you were to quit your job today to follow your passions or chase better opportunities, I’d definitely understand you.
Unfortunately, your landlord won’t understand. The bank with which you have a mortgage won’t understand. Your children, who need food and clothes and school fees won’t understand. They will all expect you to take care of these obligations, whether you’re working or not.
Owing to the need to take care of their financial obligations, most people are unable to follow their passions or chase after better opportunities. They remain stuck with jobs they hate all their life, sometimes with disastrous results, such as stress and depression.
When you have multiple sources of income, on the other hand, you’re not chained to your full time job. You’re free to follow your passions.
If other opportunities arise that require you to quit your full time job, you don’t have to think too hard about it. After all, your other sources of income still allow you to meet your financial obligations, even as you chase other opportunities.
- You’ll Hit Your Retirement Goals Earlier
Most people work into their 60s in order to save enough money to allow them to retire comfortably. Well, what if you could retire earlier?
Imagine retiring at 35, and spending the rest of your life doing things you love – travelling, being with your family, following your hobbies and passions, and so on. All this without having to worry about money, because you have enough of it.
For most people, this will remain to be a dream. This is because your salary won’t allow you to hit your retirement goals anytime soon. Like most people, you’ll need to work into your 60s before you can retire.
When you have multiple sources of income, however, it is possible for you to retire much earlier. Depending on how much money your other sources of income bring in, you can even save 100% of your salary, or even more. This will allow you to hit your retirement goals earlier and start living the life of your dreams, even in your 30s.
- You’ll Clear Your Debt Quickly
With the high cost of education and home ownership, most people are in debt, with the average American carrying over $90,000 in personal debt. If you want to achieve financial freedom, one of the things you must do is to clear your debt.
Here’s the thing about debt, however. The longer you take to pay off debt, the more expensive it becomes. Therefore, it is important to clear off your debt as quickly as possible.
For most people, this is not something they have much control over. With a fixed income, there’s only so much that they can put towards repaying debt.
When you have multiple income streams, however, you have more money to put towards clearing your debt. It becomes possible for you to clear your debt much faster, which also means that you get to pay less than you would have had you taken longer time to clear the debt.
- It Gives You Control Over Your Income
When was the last time you got a pay raise? A year ago? Two years? Three? One of the things I dislike about employment is that it doesn’t give you much control over your income.
If you want to increase your salary, you have two options – either negotiate for a pay raise, or find another job that pays a higher salary.
None of these two options is guaranteed to work. Your boss might brush off your request for a pay raise, and you’re not assured that you’ll get a better paying opportunity elsewhere.
If you depend solely on your salary, you are basically stuck with what your employer decides to pay you. Fortunately, expanding your income streams allows you to regain control over your income.
For instance, let’s say your full time job pays you a $5,000 salary every month. You decide that you want more monthly income, so you start an online store. Within a few months, the online shop is bringing in an extra $1,000 every month, so you now have $6,000 in monthly income.
You decide that you want even more money every month, so you invest some of your savings in a rental property that brings you another $1,000 every month.
You now have three income streams that bring you a total of $7,000 in monthly income, instead of the $5,000 you’d have if you were only relying on your salary. Next, you start selling on Etsy, and your monthly income now grows to $7,500.
This illustration shows how having multiple income streams gives you greater control over your income. If you want more money at the end of each month, simply add another income stream.
- It Allows You To Achieve Financial Independence
Financial independence refers to a situation where you are generating enough income each month to comfortably cover all your expenses, without having to work.
You cannot be financially independent when your only source of income is your salary, since financial independence requires you to meet your living expenses without having to work. This means that to be financially independent, you need to invest in passive sources of income.
The more income streams you have, the more likely you are to generate enough monthly income to cover your living expenses. Once your passive income streams are generating more money than you need to take care of your expenses, you can then quit your job and start living the life of your dreams.
Today, with the rising cost of living, stagnant wages, and decreasing job security, having multiple income streams is no longer a nice-to-have. It is a necessity for anyone who cares about their financial wellbeing.
Having multiple sources of income takes away the risks of decreasing job security, gives you the freedom to follow your passions, allows you to hit your retirement goals earlier, allows you to clear debt much faster, gives you control over your income, and allows you to attain financial independence.If you want to expand your income streams, all you need to do is to find part-time or freelance work opportunities, online business ideas that you can work on without quitting your full time job, and other passive sources of income, such as investing in the stock market.