Even though IT pays quite well compared to other fields, real wages in the United States have scarcely risen over the last 30 years. As life gets more expensive, your high-paying IT job becomes less and less effective. If you can’t depend on your 9-to-5 to achieve financial freedom, you’re going to need multiple streams of income.
Today we’ll look at how you can start putting your earnings into multiple streams of income in order to accelerate your financial growth. Best of all, you won’t need to work extra hours. Instead, you might even find yourself taking extra days off down the road.
Defining Multiple Streams of Income
Let’s start by clarifying what we mean by multiple streams of income. Think of your financial future like an empty swimming pool. To fill that pool, we need money.
Your day job is going to be a steady stream of income that fills your pool consistently. But by adding in a few more hoses, we can get the pool filled faster. They don’t all need to be high-volume fire hoses. Even a trickle helps.
So, what are some of the hoses you can use to fill up your pool? Today we’ll cover three of the best alternative sources of income.
Real Estate Investing
Just pause and consider the term “landlord.” Being a “lord” sure would be nice, right? If you are currently renting your residence, you should seriously consider making a shift towards ownership.
Now, owning a property doesn’t necessarily mean you have to ditch your studio apartment and move into a big house. In fact, you might still want to continue renting if your rent is below market rates.
Nevertheless, renting is essentially giving someone else another stream of income instead of giving it to yourself. If you can buy a home without sacrificing your investment potential (more on that in a minute), you should do so.
If you do continue to rent, look into the possibility of buying a fixer-upper or even a vacant lot in a potentially up-and-coming area. Hundreds of smart millennials profited massively off the 2008 financial crisis by buying discarded and abandoned properties. Homes that once sold for a grand now go for 50 times that value.
If you have some home renovating experience, you can invest in a slightly damaged property that other people are too lazy to improve. You put in some work and reap a great return on your investment.
Pro-tip for the IT crowd: Put your IT experience to use by adding tech to the home. Simple things like USB chargers in power outlets cost very little, but impress future buyers. Hundred-dollar investments can turn thousand-dollar profits.
We wouldn’t tell you to try to become the next Linus Tech Tips. Youtube and other sites are fairly saturated as it is. However, that doesn’t mean that you can’t create some content and generate some extra income.
You could develop a series of how-to videos or written guides and publish them on your own website. While there is a small investment in terms of startup costs, the long-term payoff can be significant. The biggest investment is your own time, but when you write or vlog about what you love, the labor is less.
The most important factor in successful content creation is your consistency. People return when there is something to return to. If you can’t commit to a schedule, you may want to avoid this route.
It takes at least a couple of years for content creation to reap dividends, but once it does, they tend to keep coming. Ad revenue can become a healthy stream of income that can fuel future investments. Speaking of investments, let’s look at how you can make your money work for you.
Without a doubt, one of the best ways to stimulate your personal economy is through financial instruments. Once you’ve saved up enough to cover emergencies, you should be investing. So, where should your money go?
Investing in Stocks and Bonds
The younger you are, the more risk you should be taking on. The reason for this is simple: The stock market averages a positive annual return.
Yes, you may get pummeled one year during a recession. However, your youth means that the scales will balance over time. If you’re middle-aged, look for a more balanced portfolio.
Look for stocks that give out dividends and show regular growth. Dividends can be reinvested back into the stock for a compound interest effect. Or you can reallocate that money as you see fit.
Don’t be shy about investing abroad either. Developing countries in Southeast Asia and Latin America often offer much higher payouts on their bonds and dividends. This is because they historically haven’t been as stable, but recent years are showing that many of these countries have turned the corner.
Getting the Most Interest
Whatever you do, avoid savings accounts with the exception of your emergency cash. Banks pay awful interest rates, and your money will scarcely grow.
If you do smell a recession on the horizon, look for high-yield CDs. It may be prudent to temporarily transfer your assets out of the stock market and into a CD for a few years. You get guaranteed returns and security.
Commodities and Cryptocurrencies
Exercise caution in these two arenas. By the time you’ve heard about the amazing opportunity, it’s probably too late to capitalize.
Commodities are notoriously fickle, although gold can be a smart investment if the market looks shaky. Cryptocurrencies are completely unpredictable and should only represent a small portion of your portfolio unless you’re a gambler.
Starting Your Quest for Multiple Streams of Income
Don’t let the abundance of options paralyze you into inaction. Figure out which path you think you can reach in the shortest time. Once that income starts coming in, it will be that much easier to pick up another income stream.
Finally, never forget the value of community. Reach out to other IT professionals and find out what they have done to diversify their sources of income. If you start a project, spread the word. Filling your financial swimming pool is easier with a helping hand.