Jan 10, 2023
How to have multiple streams of income
-Knowing how to have multiple streams of income can set you up for future financial success.
-Multiple sources of income get you through personal financial rough patches, such as job loss.
-Income diversification helps protect you from greater economic volatility.
One key to building solid personal finances is to maximize your money-making abilities. If you max out your income potential at your full-time job, your only option to continue moving upward is to add income streams.
But how do you create multiple income streams, and what are all their benefits? We cover this and some ideas for other income sources below.
What does it mean to have multiple streams of income?
Having multiple income streams means you earn money from more than one source. These can be active or passive revenue streams, ranging from a full-time job (for adults) to an on-demand side hustle.
Regardless of how you arrange your multiple income streams, create a schedule that allows you to dedicate the appropriate amount of time to each one. With that setup, you can reap the benefits of diversifying your income and earning money from different sources.
What are the benefits of having multiple income streams?
While balancing multiple income streams can be a lot to manage, plenty of benefits make it worthwhile. Let’s look at why you should consider multiple income streams.
Of course, the biggest reason to have multiple income streams is to earn more money. The more jobs you have, the more income you have, and the less likely it is you have to work paycheck to paycheck and just scrape by.
Once you’re an adult, this can also help you avoid debt or pay it down more quickly because you can funnel the extra income to your credit cards and other debts. And if you’re debt-free, you can use the extra income from these multiple streams to invest and build wealth.
Ongoing income with minimal extra work
If you choose to use a passive income stream as a source, this not only has the benefit of giving you more money in your bank account monthly, but it also requires minimal ongoing work. With a passive income source, you do a fair amount of work upfront, but the cash flow continues with minimal ongoing work from you.
This can also stretch into your retirement and pad your income from Social Security benefits and retirement accounts.
Stagger your pay
Living paycheck to paycheck can be tricky. When you have multiple streams of income, though, you likely have paychecks coming at different times of the month. So, you may only get paid every two weeks from your full-time job, but you may find a side hustle that pays weekly, so you have income rolling in between your full-time paychecks.
Just like investing, you never want to put all your eggs in one basket regarding income. If you lose that one job, then you have no income other than unemployment — if you qualify — until you find a new gig.
With multiple income streams, you shift focus to the side gigs and make up for some or all of your lost full-time income. Plus, the joy of side gigs is that you get to explore different interests and hobbies you have outside of your full-time job. Bonus!
What are some ways to earn multiple income streams?
There are many ways to earn income, giving you plenty of options for picking up multiple income streams. Let’s review some of the best ways to get this side income.
Investing in real estate is one way to build passive income. There are varying degrees of work upfront, though you probably need more cash on hand. You can do this in a few ways. You can team up with other entrepreneurs and physically buy real estate, rent it out, and share in the profits or invest in real estate investment trusts (REITs).
REITs are companies that buy, rent, and sell large-scale real estate and rely on investors to buy into individual real estate projects. The REIT then splits the profits among all the investors. It’s similar to investing in stock, but you’re investing in individual buildings and projects instead of a company.
As the project or building reaches certain milestones and revenue levels, the REIT company will pay dividends to its investors.
On-demand side gig
On-demand side gigs are very popular in the U.S. These include food delivery, grocery delivery, task completion, ride-sharing, and more. These gigs have the ultimate freedom, as you do them whenever you like, allowing you to easily fit them around a part- or full-time gig. They also fit nicely around your school and sports schedules too.
Also, if you lose your part- or full-time job, you can quickly ramp this up to replace some or all of your lost income.
Becoming a freelancer is another income source with a lot of flexibility. You can do just about anything as a freelancer, such as writing, blogging, editing, computer programming, search engine optimization, and much more.
Freelancing has its independence, but it’s often not as free as an on-demand side gig because you’re often required to adhere to a deadline structure, despite being self-employed. You also need to hustle to find the work and market your skills. It can take time to build your reputation.
Another way to get extra money without a lot of ongoing work is to invest in the stock market. Investing in the stock market requires upfront research to find the best stocks and exchange-traded funds (ETFs) that pay out dividends. Dividends are payments to a company's shareholders based on the company’s profits, usually in the form of cash and on a regular schedule over time.
Choosing those dividend stocks doesn’t need to be difficult with the right tools. Greenlight can match you to an ETF that's right for your investment goals and risk level. After the initial investment, you can mostly watch as dividends roll in, making it a passive income.
You may need to do some maintenance occasionally by buying and selling stocks, but this requires minimal effort. Or, you can hire an investment professional or work with a robo-advisor to do all the ongoing buying and selling for you.
With the stock market, there’s always the risk of losing your investment, so consult a financial advisor or investment professional before starting a brokerage account.
While the stock market is typically reserved for adults, the Greenlight® app has an investment feature that allows kids to learn to invest in the stock market. Greenlight families can buy fractional shares of stocks, too, so you don’t need a lot of cash to start building wealth.
Rental properties can be excellent sources of income, especially for someone without much time to invest in ongoing work. You purchase the property, make necessary repairs and upgrades to get it ready, then rent it out.
If there is a mortgage on the property, your income is the difference between the mortgage payment and the monthly rental income. If you want to remain hands-off, you can hire a management company to manage the rental property’s maintenance and payments for a percentage of the monthly rent.
Another way to do this is to purchase condominiums or houses in tourist-heavy areas and then rent them out short-term on Airbnb. If you do not live in the area, you can hire a cleaning team to clean and prepare the rental after each renter.
Affiliate marketing is a good way to build a passive income that requires minimal work after the initial setup. You can write a blog post, a social media post, create a YouTube channel, podcast, or any other content that links to an affiliate program, such as Amazon.
Then, when someone watches your content and clicks on the link on your post or video to buy the product, you get a commission. You may occasionally update the post or swap out a link, but the ongoing work will be minimal to get this extra money.
If you are exceptionally skilled at one thing, another passive income idea is to create an online course teaching this skill. Then place it on learning sites like Udemy or Coursera. You will need to do a lot of upfront work to create and place the course online, but this passive income stream earns you extra cash without putting a lot of time into ongoing work.
If you're artistic or creative, you can turn that talent into products to sell online on sites like Etsy, eBay, or Amazon. Your products could be paintings, knitting, clothing, and more. If marketed correctly and with high-quality work, this could become a rather successful online business that can bring in lots of additional income for some.
As a teen or child, you'll need your parents' help setting up the online store and shipping items, but you could do all the work and earn a nice income.
How to have multiple streams of income that set you up for stable personal finances
Now that you know how to have multiple streams of income and why they are so important, you’re ready to go out and pick up those side gigs and start investing in passive income streams. Whether you plan to become a freelancer, deliver food, or invest in the stock market with help from Greenlight, having multiple income streams can help stabilize your finances and help you reach your financial goals.
You’ll need somewhere to put all that extra cash from your multiple income streams. That’s where the Greenlight app can help again. Our app gives you access to accounts with a personalized debit card, cash back, Savings Reward, and even the ability to invest and learn more about financial literacy. Try it today — one month, on us!
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