Diversifying your income is paramount to achieving financial independence. If you are interested in diversifying your income and earning more, here are 5 super tips to help you get there:
The best way to diversify your income is to look for investments that promise a blend of high yield and low volatility. Examples include ETFs, (Exchange Traded Funds), fixed income funds, savings’ accounts and CDs.
A recent development on the investing landscape is what is called ‘multi-asset ETFs’. ETFs are usually a combination of stocks and bonds. Multi-asset ETFs are specially formulated to reduce risk and increase returns on your income. The combination of high yield potential and low volatility makes multi-asset ETFs particularly appealing to investors.
Intensify your Efforts to Save from your Salary
Curbing wasteful expenditure and saving more money is a sound way to diversify your income. Experts suggest that your savings should be about 20% of your salary each month. This savings amount can be successfully channelled into investments to make them grow.
Saving money out of your monthly income (although it may sound like a simple thing), is a very important part of income diversification. Paying yourself first is a vital component to making this successful; with the savings you generate providing you with a starting point for other investment avenues.
Invest Income into a Business
Do you have a friend or family member who is starting a business? If you think the business looks promising, you can opt to become what is known as a ‘sleeping partner’. This means that you can invest your money but you do not have to participate by actually working for the business.
Getting a Part-time Job or Second Job
If you have spare time during weekends or after work hours, you may want to generate a second source of income during those times. There are numerous ways to earn spare cash from the internet or even offline. You can use resources that you already have including spare rooms in your home (you can take in a lodger), a garage or car that you may rent out or skills that you already possess.
Sometimes, a non-working partner may opt to earn a second income to make it easier to pay bills and save some money.
Create Once, Sell Continuously
If you have a talent for writing, cooking or music, you can use your spare time to create a product that will sell. Once created, the bulk of the work has been done. A little marketing to your target market and you will find your creation earning you an income, even while you sleep! What could be better than that?
Financial independence will not be made by relying on any one form of income. Work your way to financial success by following tips to diversify your income, thus avoiding the ‘eggs in one basket’ scenario.