With growing economic uncertainty, one of the best ways you can protect yourself is to have multiple streams of income. That way, even if you lose your job or another source of income, you’ll still have money coming in.
What Having Multiple Streams of Income Does
There are several ways having multiple streams of income can help you.
Protect You From Job Loss
If you’re worried about losing your job, then having a second stream of income will give you some protection. If you do get fired, you won’t be left completely broke.
In some cases, you may be able to generate enough income to meet your basic expenses. If not, you’ll at least slow down the rate at which you burn through your savings until you can find a new job.
Cover Unexpected Expenses
Having multiple sources of income also allows you to cover unexpected expenses. If you’re like most people these days, your budget is probably stretched thin with your regular expenses.
Even if you know you should have a rainy day fund, wages just aren’t keeping up with inflation. If you have multiple income streams, you can use your main salary to cover your regular budget while leaving your extra income streams to cover the unexpected.
Build Up Your Emergency Fund
If you only use your extra money to cover unexpected expenses, there should be many months when you don’t have to spend your extra cash. That means you’ll have the funds to start building up a savings account.
Once you have enough saved, you won’t even have to worry about sudden big expenses like needing a new roof or having to unexpectedly replace your car.
Have Extra Fun Money
Now that your extra income sources allow you to have a dedicated savings plan, there’s a good chance that your savings plus interest will be far more than you need even for large emergencies. You could also set up an entirely separate income stream that goes towards things like funding your dream vacation.
Speed Up Your Retirement
Another good use of multiple income streams is to speed up your retirement. If you dump your additional income into an IRA or use it to let you increase your 401(k) contributions, you’ll achieve financial freedom even sooner.
Remember, compounding interest means that the earlier you start, the sooner you can achieve your financial goal.
Where can you get additional income streams?
There are many types of side hustles you can take on including doing freelance work related to your main job, working for a food delivery service or other gig economy app, or doing a fun activity that pays a little extra cash.
If you’re looking for a passive income source, you might turn towards rental properties, the stock market, or finding business income such as buying vending machines. Since passive income stream ideas often require a financial investment to get started, you might want to start off with a more active side gig to get the cash flow you need to move into passive activities.
Find Your Next Income Stream
Passive Income Sources
- Get Paid to Take Surveys Online
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- Invest in Real Estate with No Minimum Balance
- Earn More Interest on Your Bank Savings
- Become an Instacart Shopper Today
- Find Flexible Jobs Near You
- Find Full-Time and Part-Time Job Openings