It’s never been more important to have multiple income streams. The current climate has shown us that no job is safe, so having more than one stream of income can help us spread our bets and ensure that we’re always covered financially.
This extra financial security is just one of the benefits of having multiple income streams. Here we’re going to look at more benefits of creating passive income streams, as well as some examples of different types of income streams.
- Top 10 Reasons to Have Multiple Income Streams
- How Many Streams of Income Does The Average Millionaire Have?
- Top 5 Benefits of Having Multiple Sources of Income
- Why we need Extra Income
- Multiple Sources of Income in Nigeria
- Multiple Streams of Income in The Bible
- Importance of Second Income
- What Does it Mean to Have Multiple Streams of Income?
Top 10 Reasons to Have Multiple Income Streams
So, here are 10 reasons why we believe everyone need to develop as many income streams as possible:
1. Job security
The norm, until recently, has been getting up early, driving to work, climbing the corporate ladder, and retiring there, while work from home jobs was seen as something relegated to those with less skills. This traditional mindset no longer applies. With emerging technology, companies are being forced to pivot and companies that used to be considered “safe” are being forced to downsize or close altogether.
Read Also: What Are The Multiple Streams of Income?
Just look at what Amazon is doing to the retail landscape. How many notable stores have you noticed announcing layoffs? These are places like Nordstrom, Best Buy, Macy’s… the list goes on and on.
On the flip side, technology has made it possible to build a viable and secure living from the comfort of your home. While working for a large corporation no longer equates to job security, there are essentially endless opportunities for those wanting to start an online business and work from home.
Because of the diversity of opportunities online, online business owners are able to benefit from low start-up costs to tap into a variety of markets, and all of this means you are able to create any number of work from home opportunities. Each potential job opportunity means a new income stream, and that’s where job security is these days, in diversification.
When you’ve managed to acquire multiple streams of income, your job security isn’t tied to a single source. If the economy changes the revenue of one stream, you can rely on your extra income for a while.
Diversification is key whether it’s real estate, rental income, the stock market, or a side business.
2. Unique opportunities
With all the new opportunities that are being formed around you daily, why not follow your passions and dreams? When thinking about what holds you back, your response is probably that you feel you are tied to a single job purely for financial reasons. Relying on one source of income to cover life’s necessities is becoming less and less of a viable option for many.
But if you have several sources of income covering the basic expenses, you’re free to pursue your passions– even if they’re not particularly lucrative. This is one of the greatest benefits of having multiple income streams.
The online world is full of possibilities, and you can create a viable online business and find work from home jobs that utilize your skills and interests. Whether that’s marketing, writing, finance, etc., there is a place for you in the online world.
The other thing about these opportunities is that you can learn how to start an online business while you are still employed at your traditional 9-5. It will probably take working late nights and long weekends, but diversifying your income with an online business means you can eventually leave your 9-5 to pursue your side hustle even more.
3. Ability to stick to your values
More than any other generation in history, millennials are known for sticking to their morals and values.
This generation doesn’t compromise their beliefs for anything.
So when you work for a company or group who might require a compromise, where does that leave you?
You either have to sacrifice your integrity or quit.
The ability to rely on yourself with online business opportunities means that you live life by your own set of morals and values. This means less stress and, ultimately, greater satisfaction.
I would say this is especially true for those choosing to pursue a path that lets them work from home. Work from home jobs allow parents to stay home with their kids, they allow you to travel, and they let you build a business whose integrity is supported by your own moral code.
4. You can take risks
The time to take some risks is when you’re younger, and if you’re older and reading this you probably realize how true that statement is. Investing, venturing into your own online business, or changing careers… all gets much harder once you build obligations like a home and family.
Failure always looms at the back of an entrepreneur’s mind, but when you’re younger, failure is less likely to have the same types of repercussions they have later in life.
Plus, the more mistakes you make, the more you’ll learn. Better to get that out of the way as soon as possible.
However, you may just have to be more careful with how you start. Fortunately, the internet, again, makes this even easier as you can research and find opportunity in any perspective market.
5. You have the energy
Building some additional income streams and starting an online business takes work and dedication– a lot of it. You must educate yourself and find the motivation to pursue some of those things. The younger you are, the easier it is to do this.
This is partly because you’re less likely to have obligations that take up most of your time, and partly because, let’s face it, you need the energy to build a business.
Starting an online business, take a blog for example, requires an extreme amount of dedication. While you can basically start a blog for free, there are long hours ahead of you. Success with an online business doesn’t come overnight, but the potential is 100% still there.
6. Tax benefits
The new Tax Cuts and Jobs Act of 2017 actually benefit those who receive income from self-employment through work from home jobs and online businesses. Business income that passes through to an individual as a sole proprietorship from a pass-through entity (like an LLC or S-Corp) receives a 20% deduction.
This is subject to a maximum cap and you should review those details for further info.
When you are ready to start your own online business, it’s important that you are aware and staying on top of changes in tax law– this is one area where hiring a professional can really benefit your online business.
7. Pensions are a thing of the past
Gone are the days where you could work 20-25 years at a company with the expectation that they would take care of you until you die. Now, you need a retirement plan.
I think this is difficult for many older people to understand in terms of how millennials are dealing with their long-term financial plans. We have student loan debt, the job market has changed, and we have to become more self-reliant when it comes to retirement. These are all reasons why creating multiple streams of income has become even more important.
If you are working for a traditional company, employer contributions to your retirement fund are great, but having multiple income streams will help immensely– especially if you have the desire to retire at your own pace, rather than when your 401(k) dictates. Taking control of your future is a much more effective use of your time.
8. Social Security
In days past, once you hit a certain age, you could rely on Social Security to help pay the bills. But soon, this may not be the case. In fact, it’s entirely possible that Social Security will be depleted as early as 2035. Despite this reality, I hear from a lot of millennials who are expecting that Social Security will still be there for them once they retire.
The financial safety net your grandparents or parents had will probably not be there when you hit retirement age. This is a sad but true reality.
This is all the more reason why having multiple streams of income is so important. Social Security may not last, but the work you put in now with your side hustle or online business has the potential to carry you all the way through retirement.
9. Build wealth long-term
It can be difficult to think long-term when you can barely plan for the next week. But the fact is, the work you put in now with your side hustle or online business can have enormous long-term effects and capital gains.
Many of the potential work-from-home jobs can be sustainable and scalable income generators. These are things you can start on the side of your current job, grow them to the point that you are able to leave your 9-5, grow them even more once you go full-time with your online business, and work on passive income streams.
Having multiple income streams can help you build long-term wealth without having to work harder. Does it take a considerable amount of effort to get you there? Yes, 100%. I don’t want anyone to quit their job thinking that their work from home side hustle is going to be an immediate success. But, diversification and passive income streams can eventually lead to less work in the future.
You can work smarter and leverage your time to achieve financial freedom earlier. Having freedom from the drudgery of trading your time for money means that you can focus on what’s really important to you– both now and in the future.
10. They will help pay down debt
Sadly, millennials are graduating with more debt than any other generation. Student loan debt is reaching new heights, with USA Today reporting that the average Bachelor’s degree is yielding $30,100 worth of debt. Adding graduate school on top of that? Don’t be surprised if your debt is in the six figures. This is leaving many asking the question, “Is a college degree worth it?”
Let’s put that argument aside, though, and talk about how multiple income streams will help you pay down debt. This really isn’t a hard thing to understand– the more money you have coming in means you can pay down your loans faster.
This is why many people are starting side hustles, online businesses, and finding work from home opportunities. That extra income will be your ticket out of debt. If you do have a lot of debt, paying it off is incredibly liberating. It’s also vital to your financial health.
The other thing, once you have that debt paid off, you can invest even more, meaning retirement doesn’t have to be something you work towards for the next 30-40 years.
How Many Streams of Income Does The Average Millionaire Have?
The commonly cited statistic is that the average millionaire has seven streams of income.
That said, as mentioned, finding the data that backs this up is next to impossible. At the same time, it’s safe to say that the vast majority – if not all – millionaires have more than one income stream.
Just imagine, If you earn money from your job, have a 401(k) and keep your savings in a high-interest savings account, you’re already at three income streams! So if that’s the case for you, imagine what the very wealthy are doing to earn – and maintain – this wealth.
And while it may be tough to find proof of millionaires having exactly 7 streams of income, there was some data that could indicate that this is true…
Based on data issued by the IRS, we can see the most popular income streams for a certain portion of millionaires. That is, the list of the most commonly held assets are:
- Publicly traded stock – includes individual shares and mutual funds
- Other real estate – includes commercial property, REITs and “residential property other than the personal residence”
- Cash assets – not only is this actual cash, but also bank accounts, certificates of deposit and money market accounts
- Bonds
- Closely held stock – this is stock in companies that isn’t publicly traded
- Retirement assets – IRAs and 401(k) accounts fall into this category
- Personal residence – where the person lives
- Real estate partnerships – these are partnerships where the main function is the ownership of real estate
- Other limited partnerships
- Other non-corporate business assets – this is where the person is either a sole proprietor or a partner in a business partnership
This data is taken from the IRS’ estate tax statistics, meaning it shows the assets held by people who died in 2018 whose estate when they died was worth at least $5.49 million.
Top 5 Benefits of Having Multiple Sources of Income
Here are the five benefits of creating multiple streams of income.
1. Get Rid Off All Financial Concerns
Personally, we define total wealth as the ability to survive in the future if your income comes to a halt unexpectedly. Possessing total wealth will get rid off all concerns like financial turmoil, political instability, sudden layoffs and retirement plans.
How to attain total wealth?
The best method is by having multiple sources of income credited to your account daily until your savings can support you for a lifetime.
2. Control of Your Financial Situation 100%
If you only depend on one source of income, which is your full-time job, then you are putting your financial control and your future fate in the hands of your employer.
Considering the changes that are happening, you want to be 100% ready for any possibilities just in case if anything happens, you still have other sources of income you can rely on to make a living.
3. Build A Money Making Machine
The money-making machine, also known as passive income is a concept we have talked about that functions to continuously provide an income forever.
Examples of money-making machines include properties that you collect rent from, shares that you get dividends from, the profit you earn from the goods you sell online or the fees paid from companies to advertise on your website.
However, how well your money-making machines operate to provide daily income depends on how much time, effort and resources you contribute to building it.
Moreover, if money-making machines could guarantee you total wealth, why are there people that never have bothered to build their own? The answer is simple; because they end up as someone else’s money-making machine.
However, building a money-making machine doesn’t mean that you have to quit your job. Instead of resigning, you should still look for multiple sources of income by making investments in properties, stocks, internet, anything that can earn you passive income.
4. Multiple Streams of Income Increase Your Financial Security
Nothing’s better than the peace of mind you feel when you aren’t occupied with concerns regarding your income and not making ends meet. If emergencies happen to like a wiring problem in your house or your car’s engine needs a replacement, you won’t have to panic and agonize on where to look for money.
Money, if it does not bring you happiness, will at least help you be miserable in comfort.
– Helen Gurley Brown
5. Freedom of Life Choices
Creating money-making machines allow you to have more choices in what you want to do in life. Working under an employer comes with several restrictions like going for holidays or easily taking a day off just because you are mentally drained.
Once you commit to a job, sometimes your hobbies and the things that make you happy needs to be put aside so that you can earn for a living which could have a negative toll on our mental and physical health.
Why we need Extra Income
Earning extra income will improve your life as you:
- Pay off your debt.
- Save for big purchases, such as a vacation.
- Stop living paycheck to paycheck.
- Help you reach retirement sooner.
- Figure out a business idea.
- Become more diversified with your income streams.
While cutting your budget is great and all, making more money is great too.
It allows you to save more money because you can only cut your budget by so much. Your income, on the other hand, can grow by an endless amount.
Whether you have just one free hour each day or if you are willing to work 40 to 50 hours a week on top of your full-time job, there are many options when it comes to learning how to earn extra income.
Maybe you are afraid that one day you will lose your job or that something will happen to your main source of income.
The beauty of finding ways to make extra money is that it allows you to diversify your income. This means you won’t have to worry as much about one of your income streams having a bad month or completely disappearing because you’ll be prepared for it.
By diversifying your income with multiple income streams, you will have a backup plan, you may be able to retire easier, and so on.
Multiple Sources of Income in Nigeria
1. Property Flipping
Believe me, nothing says easy money from a passive income source in Nigeria like property flipping. This is by far the best passive income idea to make money while you sleep. This passive income investment can work for virtually anyone, anywhere, and anytime.
Have you noticed that some of the prices of the cheap lands in Lagos, Abuja, Imo, Port Harcourt, Oyo, and Kaduna have been going up? Since the prices of properties are on a constant rise, it means that your income is constantly increasing.
The only downside about this passive income idea is that it will take a lot of time and money before you get decent ROIs. After you’ve built your house, you can go to sleep and let the housing agents do all the work. As new tenants move in, you are paid for doing something that you did a long time ago.
If you don’t want tenants, you can flip your house. That means you can sell it after building it. Yes, you can build a house for ₦20 million and sell it for ₦57 million, that ₦37 million in profit after the sale. This is how property flipping works.
You can also buy a piece of land, leave it for a few years for its value appreciates, and then resell for profit. This method is cost-efficient and you won’t spend as much as you would have to build a house.
When you rent out or sell lands, houses, buildings, sports centers, markets, hotels, parks, event centers, apartments, shops, or office spaces that you own, you have the chance to generate healthy monthly or annual revenue for an investment you made some time ago.
2. Build a Startup or Company
Building a company is another amazing passive income investment to make money easily in Nigeria. A company is an entity that manufactures products or provides services as a commercial venture.
Starting a company is not as hard as it seems, it just requires a certain amount of money to set up then you’re good to go. You can start a company in your living room and you can expand in time.
Do you have good taste in clothes? Then start up a boutique or a fashion company. Do you know how to gamble? Then start a bookie company that gives insights, tips, and risk-free predictions or your own casino.
Do you have a familiarity with a subject, discerning judgment, and good social skills? Then set up a consultancy firm on that tech or relationships, blogging, law, agriculture…
The more you love something, the less work it becomes when you do it. You just have to figure out what you do best, so you know what type of company to set up. If you feel starting a company is hard, you can also buy a successful business and profit from it with little or no effort at all.
3. Shareholding and Partnerships With Companies
This is one of the few reasons why the rich get richer. They put their money on the market to work for them while they stay at home eating and sleeping. Owning shares in a multinational company or partnering with other bigger companies are business ideas that can increase growth and generate passive income.
If starting a company seems like a big deal, some entrepreneurs partner with some companies or buy shares owned by the company to make money as the business grows.
By building a portfolio of high dividend stocks, you can create passive income to make money while you sleep at an alarming rate. The is money you can get by trading stocks is much higher than what you can get off any bank investments.
Even as a business partner, you simply supply a business with the needed capital with the request of taking an equity position in the business while the business owner does all the work. You just sit back and wait for the payday.
Dividend income gets paid to shareholders of stocks in the form of cash in your bank account and as a partner; you also get commissions or capital gains. A lot of financially independent people started by buying stocks from profitable businesses.
If you want to make a passive income for yourself through shareholding and partnership, make sure that you educate yourself, analyze the business, and pick solid stocks.
4. Modeling
This is one of the easiest passive income ideas in Nigeria on my list. You get paid to stand around or do certain things asked by your client.
Modeling should be regarded as a passive income idea because according to my definition, “where you make money from doing little or no work at all” and “get paid over and over and over again for work that you did once”. In modeling, there is little or no work involved.
Your pretty face or elegant body structure would do all the work for you and I’m telling you, there’s a lot of money in modeling. Plus, models are somewhat getting closer and closer to entertainment. A lot of models are now featured being featured in music videos, movies, video games…
If you decide to become a professional model, you can get a modeling agency to help you out on your journey and focus on the goal you’ve laid out for yourself.
5. Write A Book
Writing a book is one of the best passive income ideas to make money while you sleep. You make money just from expressing yourself or sharing an idea. A lot of books have 5th edition, revised edition, updated copy but still, sell in millions of copies and win awards.
Wring fictitious books, novels, biographies, autobiographies, novellas, fables, or plays can allow you to make serious residual income and profits while you sleep. This is one of my favorite passive income ideas.
You no longer have to wait for publishers to print and distribute your book, these days self-publishing a book is the best idea. Even with the help of globalization, you can write a book and sell it on sites like Amazon, Kindle, Lulu, or Audible.
Once your book is published, you can immediately watch the money roll in and get a check for writing a book that you wrote 3 months ago. If you want to succeed in this field, write a book that solves people’s problems.
Books like “How To Fix A Broken marriage”, “How To Rediscover Yourself”, “How To Walk With God”… have the potentials to make you a lot of money if your marketing strategy is alright.
If your books get to the right hand and he makes a quote from the book and it would sell like wildfire. A single reference or positive comment about the book from the right person can change your life.
Multiple Streams of Income in The Bible
James 1:5
If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him.
2 Corinthians 9:7
Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.
1 Corinthians 16:1-2
Now concerning the collection for the saints: as I directed the churches of Galatia, so you also are to do. On the first day of every week, each of you is to put something aside and store it up, as he may prosper, so that there will be no collecting when I come.
Leviticus 27:30
“Every tithe of the land, whether of the seed of the land or of the fruit of the trees, is the Lord’s; it is holy to the Lord.
1 Peter 3:1-5
Likewise, wives, be subject to your own husbands, so that even if some do not obey the word, they may be won without a word by the conduct of their wives, when they see your respectful and pure conduct. Do not let your adorning be external—the braiding of hair and the putting on of gold jewelry, or the clothing you wear— but let your adorning be the hidden person of the heart with the imperishable beauty of a gentle and quiet spirit, which in God’s sight is very precious. For this is how the holy women who hoped in God used to adorn themselves, by submitting to their own husbands,
1 Corinthians 16:2
On the first day of every week, each of you is to put something aside and store it up, as he may prosper, so that there will be no collecting when I come.
Proverbs 13:11
Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.
Proverbs 11:24-25
One gives freely, yet grows all the richer; another withholds what he should give, and only suffers want. Whoever brings blessing will be enriched, and one who waters will himself be watered.
2 Chronicles 31:5
As soon as the command was spread abroad, the people of Israel gave in abundance the firstfruits of grain, wine, oil, honey, and of all the produce of the field. And they brought in abundantly the tithe of everything.
Numbers 18:26
“Moreover, you shall speak and say to the Levites, ‘When you take from the people of Israel the tithe that I have given you from them for your inheritance, then you shall present a contribution from it to the Lord, a tithe of the tithe.
1 Peter 3:7
Likewise, husbands, live with your wives in an understanding way, showing honor to the woman as the weaker vessel, since they are heirs with you of the grace of life, so that your prayers may not be hindered.
2 Timothy 2:15
Do your best to present yourself to God as one approved, a worker who has no need to be ashamed, rightly handling the word of truth.
1 Timothy 5:18
For the Scripture says, “You shall not muzzle an ox when it treads out the grain,” and, “The laborer deserves his wages.”
1 Thessalonians 4:4
That each one of you know how to control his own body in holiness and honor,
2 Corinthians 9:6
The point is this: whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully.
John 14:6
Jesus said to him, “I am the way, and the truth, and the life. No one comes to the Father except through me.
John 3:16-17
“For God so loved the world, that he gave his only Son, that whoever believes in him should not perish but have eternal life. For God did not send his Son into the world to condemn the world, but in order that the world might be saved through him.
Luke 16:10
“One who is faithful in a very little is also faithful in much, and one who is dishonest in a very little is also dishonest in much.
Matthew 25:14-30
“For it will be like a man going on a journey, who called his servants and entrusted to them his property. To one he gave five talents, to another two, to another one, to each according to his ability. Then he went away. He who had received the five talents went at once and traded with them, and he made five talents more. So also he who had the two talents made two talents more. But he who had received the one talent went and dug in the ground and hid his master’s money. …
Matthew 23:23
“Woe to you, scribes and Pharisees, hypocrites! For you tithe mint and dill and cumin, and have neglected the weightier matters of the law: justice and mercy and faithfulness. These you ought to have done, without neglecting the others.
Ecclesiastes 11:2
Give a portion to seven, or even to eight, for you know not what disaster may happen on earth.
Deuteronomy 14:24
And if the way is too long for you, so that you are not able to carry the tithe, when the Lord your God blesses you, because the place is too far from you, which the Lord your God chooses, to set his name there,
Leviticus 27:32
And every tithe of herds and flocks, every tenth animal of all that pass under the herdsman’s staff, shall be holy to the Lord.
Importance of Second Income
1. You have financial stability.
One of the benefits that come with having second income is that you’ll have financial stability. You don’t have to rely on one job to pay your bills as you can split your money towards savings, holidays or anything in-between.
For instance, you could be working as a full-time copywriter at an organization but have a side hustle in social media marketing as extra income. By having skills in other areas that are similar to your line of work, it can help build your professional network as a freelancer. This could work to your benefit, especially if your intention at the end of the day is to be self-employed.
In the age of COVID-19, it’s important to have an emergency fund so you have buffer money to fall back on incase you’re made redundant or lose your job. By having one, you avoid the situation of taking out funds from your super or experiencing financial stress.
2. You get to use your other talents outside of work.
Have you ever wanted to explore your creative side? Are you keen to start your own side business? By earning income through a side hustle or second job, you get the opportunity to explore other talents outside of your usual day job. By making the most of your other skills, you venture out to career opportunities that you may not have considered before.
For example, you may be great at coding but work outside of the IT industry. You can take advantage of picking up a side hustle where your expertise is needed. By studying the ICT40120 – Certificate IV in Information Technology (Programming), you could add a competitive edge to your current skillset with a qualification, which can help increase your clientele if you do coding on the side.
3. It helps you get closer to your financial goals.
Find that your paycheck can only stretch so far? Having multiple sources of income can help you reach your financial goals much faster.
Read Also: How Many Streams of Income Should You Have?
The benefit of working a side hustle is that you have more disposable income to play with. You put yourself to an advantage because the money that comes from working outside of your day job gives you more wiggle room to do more financially. Depending on your situation, you may want to accomplish the following:
- Boosting super: while retirement seems to be a while away when you’re in 20s, it’s good to start early and top up when you can. By having access to multiple sources of income, you can easily boost your retirement savings. You can even take advantage of financial initiatives like the First home super saver scheme if you want to save for a house deposit and avoid paying for Lenders Mortgage Insurance (LMI).
- Moving out: this is an exciting milestone for all young adults but it surely can be expensive if you’re not prepared. Earning income on the side can be beneficial if you’re still living at home as you can bank what you’ve saved. So, when the time comes where you’re ready to flock the nest, you’ll have enough money to splurge on furniture and the associated costs that come with moving out.
- Emergency fund: it’s better to be safe than sorry, so having an emergency fund in place is a must. By having different income streams, you place yourself in a position where you can avoid financial stress since you don’t have to depend on your day job’s income entirely. You’ll have other income you can fall back on.
What Does it Mean to Have Multiple Streams of Income?
Multiple streams of income mean that you have income from several different sources. If one source stops or is eliminated you can rely on another source. Sometimes it takes a while to establish your individual streams of income. Here are some examples.
Employment
If you have income coming in from your full-time job that represents one source of income. As long as you are working, that source of income is available to you.
Rental Income
When you buy homes and rent them out that represents a source of income. As long as your income is greater than your expenses you will be able to rely on this as a source of income.
Financial Goals
Having more than one stream of income helps you to achieve your financial goals and objectives. Once your income streams are reliable you may be able to give up your regular 9-to-5 job.
Time Allocation
One or two streams of revenue will always be your largest money makers. Usually you don’t receive the same amount of money from all streams of income. You should devote more time to those sources that have the largest income potential.
Down-Line
Sometimes your income stream can be based off the work or efforts of other people such as a multilevel marketing company. You achieve income based on the activity of your down-line.
