Reading Time: 1 Minute
Hello everyone, a very quick video on the different income streams anyone can start today.
Many of us only have the one income source – our jobs, but as we have seen in the last few months, it’s never more paramount to diversify our income streams so you have others to fall back on.
Today’s video is on a very important topic in personal finance, and that is about building different streams of income.
Most people only have one source, that is their job. But as events this year have shown, it’s never more important to diversify your income streams so if one fails, you have others to fall back on, such as:
This is the most basic. It’s where you go to a job and earn a paycheck. Like I said, most people only have this one form of income, yours truly included.
This is income from lending money. For example if you let someone borrow $500 from you and you charge interest for it, you’re earning income from that interest.
You can earn some decent returns on your cash, I think Ratesetter is offering around 6% p.a. but of course, beware of the risks – main one being if the borrower doesn’t pay you back!
This is profit from the sale of a product, for example let’s say you buy a nice pair of brand name shoes from a garage sale for $50 and you flip it online on Gumtree or Ebay for $100. The $50 you make is profit income.
I’ve been doing this for a few years now with all sorts of random items, from old video games, to scented candles
When a company makes a profit, they can either re-invest that money back in or pay it out to its shareholders, this payout is known as dividends.
The big 4 banks in Aus, Telstra, BHP and RIO have traditionally been the cornerstone of many retiree portfolios because they payout decent dividend income to live off. Whether they continue to do so, given COVID-19, is another story.
I actually don’t earn any cash from my dividend income, all my dividends from my stocks are reinvested to buy more stocks under a dividend reinvestment plan or DRP. Using dividends to buy more stocks hopefully means I’ll earn more dividends and hence more to reinvest and so on and so forth.
This income is from renting out an investment property. They say 30% of all housing in Australia is for investment purposes and there are over 2m landlords. I am one of them.
This is when assets increase in value over time and you sell to realize a profit. For example you buy 1,000 shares of ABC for $10 and the share price rises to $20 and you sell. You have made capital gains of $10,000.
This is income where you continue to be paid after the work is done. For example if you refer someone to a program and the program continues to pay you for that referral every month.
A way you could do this is via affiliate marketing through a blog, for every visitor you refer to an “affiliate”, that affiliate pays you accordingly.
Or think about becoming an Amazon affiliate, where you create a list of Amazon products you believe in, link that list on your socials, and if someone buys using your link – Amazon pays you a commission.
This is income from others using your idea or work. For example if you write a book on Amazon and it becomes a success, you will receive royalties each time that book gets sold. Or you could be a talented musician and list your songs on itunes, every download can earn you royalties.
In summary, I just wanted to open our eyes to the fact there are many ways to make money apart from our jobs, don’t just rely on the one source of income. Because it can very easily disappear.
How many streams do you have? Let me know in the comments below!
Did you enjoy this post? If yes, put your email in and click on the little “subscribe” button at the top right. So come on, be a subscriber and get it straight to your inbox fresh out of the oven!
Or you can follow me here: