(DailyDig.com) – Building wealth requires a significant and carefully chosen strategy. Part of that strategy should be ensuring that you have multiple streams of income. Knowing why you should have multiple streams and how to build them can help you with your long-term wealth strategy.
What are Income Streams?
An income stream is a way for you to earn income. This could be an hourly job, a salaried job, a side hustle, or something else.
Many have multiple streams of income without even realizing it – and it’s designed to ensure you have reliable income at all times.
Some of the most common income streams include:
- Primary salary
- Investment
- Rental property
- Online business
- Hobby business
The Benefits of Multiple Streams of Income
Having multiple streams of income is highly beneficial because it allows you to focus on long-term wealth. At any time, a stream can dry up – and if that happens, you don’t want to find yourself in the middle of a financial crisis.
One of the top benefits of having multiple streams is that you’ll achieve financial stability. You never know when something can come to an end. A company can go out of business, an industry can shift, or something else can happen. And, in the event of being laid off, you can lean more heavily on another stream.
Another benefit is that you can tap into some of your other talents. Your primary job may only allow you to utilize some of your talents. If you’re not able to be creative or follow your passion, one of the other streams will likely allow you to do so. It can help you to enjoy yourself on a day-to-day basis while earning more money.
Additionally, more income streams will allow you to reach your goals faster. The more money you earn, the more you can contribute toward your retirement savings, pay off debt, and more. You can establish a nest egg so that you’re prepared against anything that may happen.
How to Build Multiple Streams
Obviously, the goal is to work smarter, not harder. You may already work 40 hours a week at your primary job. Adding multiple streams of income should not double the number of hours you work. Instead, you have to get creative about those streams.
Passive Forms of Income: Any income that allows you to earn income without actively contributing to it on a daily basis is passive. Once you build an audience and optimize a few ads, the income can roll in. Shopify offers a few passive income ideas for you to explore.
Real estate: You can have multiple rental properties, renting out the entire property or individual rooms based on the market.
Dividends: invest in stocks, mutual funds, and more within a brokerage account. On a monthly, quarterly, or annual basis, you can receive dividend income.
Side hustles: While you’ll have to put in the hours, side hustles can help you earn more money. It can be anything from writing articles to delivering takeout orders from restaurants.
Royalties: if you’re creative, focus on producing intellectual property in the form of inventions, books, and more.
Invest in a business: Find a startup business to invest in. As the business starts to produce profits, you can earn passive income as an investor (and even a silent partner).
Streams of income are everywhere as long as you know where to look. Establish a budget so you can determine how many streams you have and how much you need to be earning to obtain more financial stability. Whether you author a book, start an investment portfolio, or grab a side hustle, you can be on your way to more income streams in no time at all.
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