With the unfortunate rising costs of groceries and general living expenses, many Canadians are seeking ways to earn extra cash, and they’re doing this by securing multiple sources of income. It’s not always easy, but it is possible.
Having multiple sources of income is sort of like having a backup plan that keeps you financially safe, no matter what life throws your way.
This blog will explore various strategies on how to create multiple streams of income.
The Benefits of Multiple Income Streams
If you want to know how to create multiple streams of income, begin by picturing in your head that multiple income streams are like having several different faucets from which money can flow into your life. Instead of relying on just one job, for example, you have various sources. This could be something like a part-time job, a rental property, or even making money online through a blog or YouTube channel (though the latter may be hard to accomplish as an income stream with the overwhelming amount of online content available today).
Having multiple streams gives you financial security. If one source of income dries up (if you lose your job, for example) you still have other money coming in to help cover your bills and expenses. This can reduce a lot of stress and give you time to figure things out.
Secondly, with extra money, you can save more, invest more, and even splurge a bit on things you enjoy. Over time, this can lead to a significant boost in your overall financial health.
Think of it like this: if you have different investments, when one isn't doing well, others might be thriving, balancing things out. Similarly, having money coming in from different sources means you're less likely to be hit hard by economic changes, job market issues, etc.
Types of Income Streams
Earned Income
Earned income is pretty straightforward - it’s the money you make by working. It's the paycheck you get from your job, whatever that job may be. It also includes what you earn on the side, like if you have a weekend gig or if you freelance.
Portfolio Income
Portfolio income comes from your investments such as stocks, bonds, or real estate. Over time, these investments grow and start to pay you money, like dividends from stocks, which are a share of a company’s profits given to you because you technically own a part of the company.
This type of income doesn’t require daily work; instead, it grows from the money you’ve already saved and invested.
Passive Income
Passive income is the money you earn in ways that don’t need much work from you day-to-day. This could be anything like renting out a room in your house, or earning from ads on a monetized YouTube video you uploaded.
Once set up, these passive income sources bring in cash, making them a fantastic way to build wealth over time without trading more of your time.
Business Income
This is fairly self-explanatory, but of course, business income is the money you earn from owning a business. For example, if you open a café, the profit from selling coffee is your business income. It’s also becoming increasingly popular to start an online business, such as a store selling handmade jewelry, for example.
This type of income gives you a chance to be your own boss and potentially earn more money as your business grows. But it’s incredibly important to know that it also means you take on the risks of business ownership, like covering costs even if sales are down.
Steps to Create Multiple Income Streams
Interested in creating various forms of income streams for yourself? Here are a few steps you can take to begin the process!
Assess Your Skills and Interests
First things first, take a moment to think about what you're good at and what you love doing. Are you a wizard at math? Or maybe you have a knack for painting or making crafts?
Knowing your strengths and passions will help you figure out the best paths to take. Make a list of your skills and interests. This will be your guide to finding the right income opportunities that you’ll not only excel at but enjoy too.
Set Clear Financial Goals
Next, what are you aiming for? Think about what you want to achieve with your money. Do you want to save up for college, buy a new bike, or simply just earn some extra cash to pay bills?
Write these goals down, and make sure they’re specific and measurable. For example, instead of saying "save more money," you could set a goal like "save $300 by the end of the year for a new laptop."
Research Potential Income Sources
Now that you know what you're good at and what you want to achieve, it's time to explore how you can turn your skills and interests into income. Start by looking into the different types of income streams we talked about earlier.
The internet is going to be your best research source. Chances are there’s already somebody online who’s created a source of income doing something you’re similarly passionate about. Look it up, read it, and see what they did to start earning income. If you can, reach out to them directly and ask questions.
It’s important to explore options that fit your skills and goals. For instance, if you love photography and want to earn some extra cash, consider selling your photos online or offering your services at family events or weddings.
Building Earned Income Streams
When you think about increasing your income, earned income is often the first place to start. This type involves actively working to make money, whether through your main job or other side hustles. Here are some examples of what these multiple streams might look like.
Side Jobs and Freelancing
If you have a skill or hobby that you’re passionate about, why not turn it into a source of income? For instance, if you’re great at graphic design, you could take on projects for local businesses or start an online freelance profile to attract clients from around the world.
Platforms like Upwork and Fiverr make it easy to connect with people who need your skills.
Consulting and Coaching
Consulting and coaching are fantastic ways to leverage your professional knowledge and help others while earning extra money. If you have extensive experience in a field, such as business management or health and wellness, you can offer your services as a consultant or coach.
In both freelancing and consulting, the key is to identify what you’re good at and find people who need those skills. Not only does this help you build a solid side income, but it also enhances your professional skills and network.
Building Portfolio Income Streams
Now let’s take a brief look at how investing in stocks and bonds, as well as focusing on dividend-paying stocks, can help grow your wealth.
Investing in Stocks and Bonds
Stocks are small pieces of a company that you can buy. When the company does well, the value of your stocks goes up, and you could make a profit if you decide to sell them. Bonds, on the other hand, are like loans you give to companies or the government.
In return, they pay you interest at regular intervals, and you get your initial loan amount back after a certain period. Both stocks and bonds can be bought through a stock market with the help of platforms (like Questrade or Robinhood) that allow you to invest even small amounts of money.
Dividend Investing
Some stocks pay dividends, which means the company shares a part of its profits with you just for holding their stocks. These payments usually happen every three months, and they can be a steady source of income if you invest in stable companies.
By understanding these basics and starting small, you can gradually build a portfolio that not only provides additional income but also helps secure your financial future.
Remember, it's important to do some research or talk to financial experts to make informed decisions that match your long-term financial goals.
Building Passive Income Streams
There are several different ways to earn passive income streams. For this blog, we’re going to focus on three of the more popular ways to generate passive income: real estate investment, creating digital products, and affiliate marketing.
Real Estate Investment
Naturally, this isn’t a feasible option for some, but if it is, renting out an apartment is a great way to earn some extra cash. Every month, you'll get rental income from your tenants. That’s money in your pocket without having to work daily for it! Getting started in real estate investment can begin with buying a small property, perhaps with the help of a loan.
But remember, renting out an apartment can be tricky because you might have to fix things that break or deal with tenants who don't pay on time or damage your property.
Also, if your apartment is empty for a while, you won't make any money from it, which can be tough.
Creating Digital Products
Do you have a skill or knowledge on something specific that others might find valuable? You can create digital products like e-books, online courses, or how-to guides. Once you create and set up these products for sale, for example, on platforms like Amazon or Udemy, they can be sold repeatedly without any extra effort from you.
Affiliate Marketing
Affiliate marketing involves promoting other people’s products online and earning a commission when someone buys them through your link. This could be anything from jewelry to health care products and so much more.
Naturally, to earn success from something like this, you need to have somewhat of a decent following on social media. If you do, you can promote these products on your blog, social media pages, or website.
Every time someone clicks on your link and makes a purchase, you get a piece of the profit. The more you promote, the more potential income you can make.
Challenges and How to Overcome Them
When creating multiple streams, you might face some challenges along the way. Here are some common hurdles you might deal with, and some quick ways to overcome them.
Initial Investment
Some ways of creating multiple streams, like starting a business or buying real estate, need a big chunk of money upfront. If you don’t have enough savings, this can seem tough.
One way to handle this is by saving a small amount regularly until you have enough to get started.
Another way is to look for smaller investments that don’t need as much money at first, like buying stocks little by little.
Time Constraints
Managing multiple income streams requires serious dedication and can feel like juggling too many balls at once. This is why it’s always a good idea to make a schedule and stick to it. Prioritize tasks based on deadlines and importance. Using tools like calendars or apps to remind you of tasks can help keep your multiple streams of cash under control without feeling overwhelmed.
Risk Management
Every way of making cash has some risks, like losing money or not making as much as you hoped. To protect yourself, don’t put all your money in one place. Try to have different kinds of income streams. If one doesn’t work out, you’ll have others to fall back on.
Also, we can’t stress enough the importance of research and planning carefully before jumping into new investments.
Ready to Build Your Financial Future?
So, are you thinking of “getting into the game” and trying your hand at earning multiple streams of income? Go for it! Remember, start small, perhaps with a side job or by investing a little in stocks or creating a digital product. Success doesn’t happen overnight, and the goal is to build these streams gradually.
As you take the steps to build multiple income streams, you'll grow more confident and financially secure. If you need a small financial boost to help with any of these steps, iCash can help you out with a payday loan of up to $1,500! So why wait? Pave your way toward a financially prosperous future.
