Career Advice Personal Finance

How to Diversify Your Income

You might think making money is hard, but you are likely overthinking it. If you want to make money, you need to think logically and plan out your personal finances accordingly.

If you think you can get rich by simply working part-time hours and spending your money freely, you are wrong. To get rich, you need to work hard and save your money so you can invest in new income streams.

Rather than thinking about how much money you want to make, it is smarter to prioritize thinking about how you will make money and where it will come from.

Defining your personal finance goals can help give you a basic guideline and structure on how to get started.

Different Types of Income

If you want to get rich, you need to know that income is the lifeblood of your journey. The more streams of income you can create, the better. According to CNBC, the average millionaire has seven income streams.

Types of Income:

  • Active or earned income
  • Passive income
  • Portfolio income

The most common form of income is active or earned income; otherwise known as income you receive for working a set amount of hours or tasks. This can range from a doctor down to a private car driver; earned income is typically a salary-based or hourly-paid job.

Dictionary defines earned income as income from wages, salaries, fees, or the like, accruing from labor or services performed by the earner.

The best way to make money is through passive income. Passive income is the best kind of income to acquire because you don’t have to actively work for the money. Instead, the money flows freely and you can collect the income passively. This can come in forms of royalty fees, ownership of businesses, payments from rental properties; there are many different ways to create passive income.

The last kind of income is portfolio income; otherwise known as capital gains. In short, portfolio income is the collective income from your investments in one portfolio that can include dividends, interest and capital gains. This can also include income that derives from real estate investment trusts.

Ways to Make Money

When you want to start making more money aside from your normal 9-5 job, there are a handful of opportunities available to almost anyone. You can find different ways to make money online and even find new professional relationships to kick start your income streams.

There are many different ways to make money whether you are searching for a new job in your area or starting your own business; there are thousands of different ways to make money.

Top Ways to Make Money:

  • Get paid to learn
  • Friendly referrals
  • Start a side hustle

The best thing you can do is think about what you are interested in and meaningful career paths you can follow towards a successful career.

Get Paid to Learn

If you can get paid to learn useful skills in growing industries at a young age, you will develop the experience and relationships for a thriving career.

Many companies will be willing to contribute towards furthering your education; sometimes they will even pay for your entire tuition depending on your field of study.

Friendly Referrals

You would be surprised at how many people or businesses might need your help or certain skillset. If they do not need an extra set of hands to help, they may need additional sales help. Friendly referrals are one of the easiest ways towards making money, and it is simply making friendly introductions.

Take advantage of the internet and plan networking events for yourself on a regular basis. This does not have to be a group gathering. Instead, schedule phone calls with new contacts outside of your network, setup virtual web conferences with old colleagues and actively pursue learning how you can help provide value to others.

Start a Side Hustle

Making money requires hard work and focus. If you are not focused on making money then you will never be able to start earning enough to become rich. To become rich, you need to want to make money at all times.

If you want to make money, starting a side hustle is one of the best things you can do for yourself. There is no ceiling with the amount of money you can earn from a side hustle and you can create new opportunities for yourself too.

If you are unsure where to start, you can find work-from-home opportunities, side gigs and part-time retainer based work online.

Sources: Dictionary, CNBC, The Street, AAMD

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