The importance of income diversity

By glblguy

moonlight

In the financial world, we often talk about investment diversity and how important it is when investing to not place all of our eggs in one basket. Why? Risk mitigation. If one area “flops”, chances are other investments won’t.

People with even the smallest amount of investing experience recognize this strategy and practice it. What amazes me though, especially in today’s economy, is that these same people work one job, for one company. If by chance something happens to that job, their income stops.

Income Diversity

One of the many valuable lessons I learned back in 2006 during our “major life crisis” was the importance of not only having diversity in your investments, but in your income as well.  With layoffs increasing by the day and companies looking for every opportunity they can to cut expenses and stay afloat, the concept of income diversity has never been more important.

Income diversity is all about having income coming in from multiple and independent sources rather than just one source like so many people do. Income diversity can involve:

  • Income from interest on savings and investments
  • Multiple jobs
  • Passive income from websites or businesses
  • Hobby income
  • Moonlighting (working multiple jobs at the same time)

One of the best ways to begin diversifying your income is to look at the things that you do (or can do) and think through how you can turn those activities into income. Here are just a few examples:

  • Do you like taking pictures? Start a small photography business taking pictures for friends and businesses
  • Do you enjoy marketing and selling? Start an eBay business or start an online store.
  • Are you good at making crafts? Sell your crafts on Etsy.
  • Know a great deal about computers or skilled at creating graphics? Consider doing some freelance work.
  • Have a little extra time in the evenings or weekends? Work a part-time job.

These are of course just a small handful of the options you have for earning extra income. Options are limited only by your imagination, skill set, and public demand for your services or product.

How I diversify my income

I often get asked about how I diversify my income and the types of things I do to keep multiple revenue streams coming in. While I am constantly trying out new ideas, here are the items I currently have in my “income portfolio”:

  • Full-time employment – I work full-time as an IT manager in the financial industry. This of course is my primary income stream.
  • Blogging – I currently run and write on three different blogs: Gather Little by Little, a new restaurant review blog I started called: Waynesville Restaurant Reviews and on blogging (especially about Thesis) over at my Empty Cabin Media blog.
  • Online Stores – I also run a few different online stores that are really affiliate marketing sites, promoting products for other companies. Due to protecting my niches I don’t want to share these, but the income from these sites has slowly grown over the past year. If you’re interested in this option, read my article Starting an online store.
  • Adsense Sites – Recently I’ve also built a few sites for niche markets where I’ve been paying to have search engine optimized content written and these articles get published onto my niche sites. These sites have various affiliate offers, but primarily are monetized using Google Adsense. They are more or less blogs, but since I am not doing the writing, I’m a little hesitant to call them that.
  • Blog consulting – Next to Gather Little by Little, my biggest alternative source of income is blog consulting through my company Empty Cabin Media. For regular readers, this is something you’ll recall I started doing a few months back and to my sheer delight I’ve had an unexpected amount of success with. I fully expect Empty Cabin Media to become second only to my full-time employment as far as income diversity within the next month or two.

Time for some changes

At this point some of your are looking at this list and thinking: The guy has 6-kids and does all of this, how in the world does he have the time? I’ll be honest, it’s a struggle. I stay up late, get up early, work on weekends more than I would like, and honestly have been sacrificing family time (which I don’t like to do). All of these are things I was fine with doing in the short term to begin building up my income diversity, but now it’s time for a few changes.

Being successful is business is frequently the result of recognizing new market opportunities and taking advantage of them while you can. One of the important decisions I made recently was to not only begin moving my websites to the new Thesis WordPress theme, but to focus on becoming a Thesis expert. As a result, I consistently have 3 or more paid Thesis consulting jobs a week and the demand continues to increase. I’ve even started outsourcing some of the work. There is a tremendous opportunity here for me to quickly grow Empty Cabin Media and I need to take advantage of it.

In order to do that and not overextend myself or hurt my family, I’ve made the very tough decision to cut back my posting here on Gather Little by Little. Instead of writing 4 articles a week and then a Friday Gathering I’ll begin today with publishing 3 articles a week, most likely on Monday, Wednesday and Friday. My Friday Gathering posts will move to the weekend, on either Saturday or Sunday.

This will be the schedule I’m shooting for, but it may vary some based on my work load. I just wanted to make you aware that I won’t be posting everyday, so expect that a day or two may go by without an article being published.

Not only will this decision give me more time to spend on my Empty Cabin Media work, but it will also allow me to focus more on my articles in order to give you more high quality content, which frankly I think has been declining over the past few weeks as my schedule has become more and more overloaded.

Another writer

One other option I am also considering at this point, is to hire another writer for Gather Little by Little to write with me. This isn’t a decision I am 100% comfortable with yet, but the more I consider it, the more I like it. The big benefit to you would be very high quality articles from someone with similar views and beliefs as me, but of course a different writing style and perspective. In other words, you wouldn’t have to read just my stuff all the time here on GLBL, you could read another Christian authors articles as well. I am still thinking and praying on this one, so I’ll keep you posted.

I would love to hear your feedback on all of thees decisions. You guys are very very important to me and I hope you understand my dilemma and the potential benefits going to 3 days a week will have for you as well. Let me know your thoughts by leaving a comment. Oh, I’d love to hear your thoughts on possibly having another writer here on GLBL as well. Now go diversify your income!

Photo by: willia4


22 Responses (including trackbacks) to “The importance of income diversity”

  1. Pinyo Says:

    I think you’re doing the right thing. Congratulation on your success with ECM.

  2. Nicki at Domestic Cents Says:

    Isn’t it funny when something turns out to be more successful than you anticipated? Sounds like you’re doing well. I’m a daily reader and would still be a daily reader if you added another writer to your blog.

    As far as diversifying income … this has been a tough one for us. My hubby works full-time while I stay home – making us a single-income family -scary. So here’s what we did:

    I started watching my 2 nieces in my home (instead of them going to day care)

    I started a homemade bread business

    I started blogging (not so much on the making money … yet!)

    At least this way we have income coming in from 4 places instead of just one. So if my hubby was to lose his job we wouldn’t be in trouble immediately.

    Great post!

  3. DDFD at DivorcedDadFrugalDad.com Says:

    Great post! I can’t advocate this concept more . . .

    I think the importance of income diversification is grossly overlooked. I have posted about Multipreneuring and Defensive Entrepreneurship– people need to help themselves.

    Job security is non-existent and if you think it isn’t you may be in for an unpleasant surprise. I have always had sideline businesses and they have supplemented my income and saved my butt.

    What is Multipreneuring? http://divorceddadfrugaldad.com/2009/01/21/what-is-multipreneuring.aspx
    What is Defensive Entrepreneurship? http://divorceddadfrugaldad.com/2009/01/19/what-is-defensive-entrepreneurship.aspx

  4. Ben C Says:

    Great post! Also, I pass by Waynesville all the time when my family visits my mother-in-law up in Franklin. Nice to see a fellow north cakalakyian blogging.

  5. Laura @ move to portugal Says:

    I think you’re on the right track too, it will definitely pay in the long run to diversify you income. I think three posts a week is absolutely fine, you have to strike a balnace between family and work, although I know it’s not always easy.
    Great post!

  6. Matt Jabs Says:

    No one should underestimate the importance of the information in this article. If you do not diversify your income, you are errantly leaving the financial security of you & your family in the hands of others.

    Now is the time to take back your security and to regain piece of mind! How can you do this? What job should you choose? What path should you take?

    My advice is to follow your passions. What are you passionate about? If you do not know…figure it out. If you could spend your day doing anything you wish, what would it be? Ask those close to you what they believe your passions are, you may be surprised at their answers, or they may strongly back up what you had already suspected.

    Once you discover your passion, work to make it an income generator in some capacity. Chances are you will enjoy it thoroughly and will have no trouble spending the time to get your ideas off the ground!

    Also, pray the Lord to show you what He would have you to do with your life. Try to combine your passions, gifts, experience, & relationships into something that can grow into your life ministry. In His Word, the Lord promises to bless your efforts on this wise. Something that can further the gospel of Jesus Christ will allow you to have peace & fellowship with the Lord.

    Matthew 6:20-21 reads, “But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: For where your treasure is, there will your heart be also.”

    Good luck & Godspeed!

    DebtFREEk!

  7. Miranda Says:

    Congrats on your success! I find with my writing that I try to take different types of projects so that I’m not reliant on just one type of writing, or overly reliant on one client.

  8. Do You Dave Ramsey? Says:

    Thanks for sharing this great information! I’ve long entertained the idea of passive or multiple income streams and lately I’ve starting putting actions to these thoughts – I launched my blog in Feb for example.

    I am quite curious about your adsense sites. Would you mind providing additional information?

    Thanks!
    Dave

  9. Bible Money Matters Says:

    The affects of having multiple streams of income can’t be understated. Since I’ve started creating multiple streams it has made our lives a LOT easier because we have extra money every month to be able to save, give and live like no else! Our extra and diversified income has now grown to the point where we could comfortably have my wife stay at home if/when she gets pregnant, and not miss her income a bit! That’s very comforting to know we have that opotion

  10. AJ Says:

    Just curious…since you do the Waynesville Restaurant Reviews blog, are your meals you eat at the various restaurants then a business expense?

    Also curious as to what type/category of business (as in when applying for a business license, etc.) is blogging or online sales considered? I am really hoping to get started soon on my blogging ideas.

    Thanks from a devoted reader!

  11. Gina Says:

    Congrats on the success! I am confortable w/the new plan. I don’t feel like it would diminish my experience reading your blog if I only “see” you in my Inbox 3-4 times a week.

    I welcome the other writer or even the use “guest writers”.

    Great post! We need to be reminded that each of us has gifts/talents/skills that can be used to help us be more self-reliant.

  12. Craig Says:

    It’s great you have taken blogging from a hobby to a excellent source of side income on multiple blogs, and now have moved onto consulting for even more money. Great job and congrats.

  13. Henry Says:

    Thanks for your honesty about how much you’re working. A totally authoritative post. Most people who tout their success don’t pinpoint the exhaustion and that you have to be sort of obsessively devoted to your myriad responsibilities. All around good tips.

  14. Bobbi Says:

    Family time IS important and you have made the right decision. :) I hope you have lots of luck finding someone to write with you too. I love your blog! Good luck and glad everything is going so well for you. :)

  15. Ken Says:

    I totally agree with having someone write for you if you find someone with a similar voice and perspective. Good luck with your endeavors….great stuff!

  16. glblguy Says:

    Wow! Thank you so much for all of the encouragement and support. I’m really excited about where things are heading. Thanks again, you guys rock!

  17. ChristianPF Says:

    GLBL,
    things are looking bright – aren’t they! I like the idea of having another writer – I have been trying it out – it is nice because it brings another voice to the table and provides a way to offer something that I can’t… Oh and thanks for the plug!

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