Competitor: This article comes from Miranda Marquit of www.PlantingMoneySeeds.com.
Entry Category: PF Olympics Finals
It used to be all about having a “good job.”
Prior to the financial crisis, even if you switched careers, you still wanted a good job. Something with decent pay, and good benefits. Get a good job – or a series of good jobs over 30 or 40 years – use your 401(k) match, and enjoy employer-sponsored health benefits, and you are set for life.
The mindset was that all you had to do was find someone (an employer) to take care of you for as long as you stuck around. The aftermath of the financial crisis presents a new reality: Only you can take care of you, and you can’t rely on a traditional job, no matter how good it is, for your financial success.
Financial success requires income diversity. If your employer laid you off tomorrow, what would you do? Do you have other sources of income beyond your day job? While an emergency fund helps, an alternative source of income can really take some of the pressure off, and help you stretch your emergency fund. You don’t (at least you shouldn’t) rely on one asset class in your investment portfolio, and you shouldn’t rely on one income source for your financial well being.
Interestingly, the latest recession has come at a time when it is very possible for almost anyone to start a side gig, or build an income portfolio through investing. Technology provides a means to create profitable side hustles online, and it’s easier than ever to buy investments on your own and build a passive income stream.
You don’t need to quit your day job and become an online solopreneur to succeed. However, it does make sense to look at your income sources. Do you rely almost exclusively on your traditional job? If so, you have put your financial success in someone else’s hands. A lay off can put your financial future and freedom at risk. And in some cases, there’s nothing you can do to stop it. It’s always dicey to give someone else that much power over your life.
Instead, work to build up other sources of income, whether you invest in rental properties, create something that brings in royalties, do a little consulting or freelance work on the side, or build up a dividend portfolio. You can even do a little bit of everything.
Break Out of Traditional Ideas of Earning Money
Now is a time of upheaval and change. It’s a great time to break out of the traditional way of thinking about work and how to earn money. The financial crisis really woke many people up to some of the problems with relying too heavily on a job that may not be there next week.
Work doesn’t mean going in five days a week for eight or 10 hours anymore. I’m proof that “work” can mean getting up and sitting at your computer in your pajamas. My “job” is location independent. Once you realize that several opportunities exist to boost your monthly revenue, it’s possible to create an increasingly stable financial foundation
Not everyone wants to quit a traditional day job, and I get that. But, even so, it’s important to cultivate income diversity. In the current environment, you don’t have to get a “regular” part-time job to make a little extra money. There are endlessly creative ways to cultivate alternative sources of income. Set that money aside, or invest it, and you’ll boost your wealth at the same time ensuring that you have cash flow in the event of a job emergency.
I know plenty of people who were scared by the financial crisis and what followed. A new clarity about how fragile a financial position can be when everything hinges on an employer’s decision has prompted the rise of side hustles.
In the past, I thought that maybe it would be nice to have the cushy job with good benefits. But after the financial crisis, I know that even the cushiest job isn’t enough. You need to have alternative income sources to help keep you afloat.