Tuesday, January 11, 2011

Diversified income

Diversifying our investments is VERY important to keeping our money safe. We know to keep all of our eggs out of the same basket. By having All our money in the same place we can quickly lose it. Having it spread around in different types of investments we may still lose some, but not all.
If this is a simple, but important concept to understand why do we completely disregard it when it comes to our working income? We earn ALL of our money from one place. We go to work, get a paycheck, get the weekend off, then go back to the same place. Over and Over- Week after Week- Year after Year we Gamble that our Income will not be lost. We place all of our earning eggs in the same basket, but even worse, we let someone ELSE carry it! Our employers have no obligation to us. We are at their mercy. One move and it's game over.
I have had the unfortunate privilege of not having work for over a month. This is potentially devastating to a family. With out income one cannot pay the mortgage, utility bills, or buy groceries. Very quickly we can find ourselves hungry and in a cold house without heat. (of course most of us will have found a way to keep the netfilx coming). For a person who has spent most of their career working for the same company it may takes months or even years to find a replacement job, and with today's unemployment rate who knows if one will be found at all!
But what if we had diversified our income? What if per chance I had a second, or third source of income I could use to pay my bills? What if the income we were using to "win in the margins" could cover our basic needs? Life would be much better. We would be much safer.
It only makes sense that if we want to have a safer income, just as a safer investment, that we diversify it. We must not gather all our eggs from the same Hen.
As we begin to diversify our income it may start rather slow. We may not earn much at all. but with some time our little side incomes may begin to pay for small things like a tank of gas (not in my truck of course), then maybe the phone bill, then the utilities, then the mortgage, THEN maybe even fill my truck! The potential is endless. But most important we have created a security net to catch us when we fall.
What are some ways to diversify our income? Some sources that have helped me are:
-Auto Repair from my home
-Snow Removal
-Handyman Work
-finding free junk to sell on KSL
-I even skinned mink for a season

What are some ways that you have diversified, or will now begin to diversify, your income?

1 comment:

  1. I loved the getting all your eggs from one hen analogy. I have agreed with this concept of having multiple sources of income for a long time. Most self employed people already have this safety feature built into their businesses because they typically have multiple clients writing their paychecks. Yet they still have to be careful because illness, accident or law suit could still wipe out their ability to bring in that income.

    My Hens are: Property Maintenance, Rental Real Estate, Snow plowing, Tax return preparation, DJing, KSL selling, a little Auto repair and I will live at a homeless shelter before I skin mink!

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