Four Ways to Diversify Your Income This Year

Frugal by nature, I’ve always believed in the power of saving money. I felt like I was very much in control of how much I spent. But for a long time, I didn’t feel the same about how much I earned.

It took me a few years — and launching my own business — to realize that I do have control over my income. I have the power to change it if I’m willing to try new things and, of course, work extremely hard.

If you’re looking for ways to better your financial situation and make progress on your money goals, I’ve got good news for you: you’re in the same boat with me. You do have the power to change the amount of money you earn. You can make more!

It starts with thinking about new and different income streams that you can develop. There are a lot of options out there. Some are easy to establish, and some take years of work and progress. (And don’t forget, when thinking about how to earn more you should always negotiate for more when starting a new job, and ask for raises when you’ve earned them at work.)

To inspire you and to get your wheels turning, let me walk you through the ways I’ve tried, succeeded, and failed to develop new income streams in addition to my full-time job as a marketing manager for XY Planning Network.

I’ll explain what worked for me and what didn’t so you can learn from my experiences and try some of these ideas for yourself.

Establishing a Side Hustle

My favorite way to increase the amount of money I make it through side hustles. A side hustle is any work you do on the side of your full-time, main job — and it can be anything. It’s an excellent way to monetize your free time (instead of watching hours of TV) and can easily help you earn thousands more this year.

Because I was passionate about writing and learning more about money, my first side hustle was as a freelance financial blogger and writer. I started by offering to write for free and by developing my own blog.

Once I gained experience (and name recognition), I started looking for paid work. I progressed from making $15 or $25 per article I wrote to $50 and $75 per piece.

I still maintain my writing side hustle — even though I run my own marketing business and hold down a full-time job. Why? Because it’s an additional income stream that I’ve been able to make really lucrative. Today, my most valuable client pays me $200 per article that I write.

Starting a Side Business

My initial side hustle eventually lead me to starting my own business as a content manager and marketer for financial businesses. When I realized I could do far more than just write, I went for it — and was helped along by the valuable network of connections and friends I had built as a blogger and a writer.

This is a great example of how you can develop multiple income streams from one original source. Keep your eyes and mind open to new ideas and opportunities, and capitalize when you can.

I saw an available niche in the financial industry that no one else had taken. I would have never learned about this market had I not started working on the side as a financial writer.

Last year, my marketing business brought in over $50,000 from May to December. This was on top of the money I made from my old day job and my writing work. That’s three different streams of income — and my total earnings kept going up as I kept hustling.

Because I once again have a “day job,” my marketing business is something I run on the side. Although I’m making less, it’s still a valuable income stream for me because it helps me diversify where my earnings come from.

Investing Wisely

The fourth income stream I’ve worked with: my investments. Together, my spouse and save and invest about 50% of our household income. We’re working hard to put away this large percentage because we want to make good use of our biggest advantage when it comes to investing, and that’s time.

We invest in passively-managed index funds. Most are pretty standard and boring, but we do have two dividend funds that we funnel some money into. Dividends are a form of income, and while they don’t produce much right now — we made about $1,000 worth of dividends in 2014 — we plan to allow all our investments, and their earnings, to compound for decades.

You can start you own income stream via investments right now, but plan to be patient. For this to pay off, you need to invest your money and don’t touch it until you reach financial independence or you retire.

Investments provide a future income stream that you can start and grow right now.

Trying to Make Money from Real Estate

To recap, my four big income streams are my writing side hustle, my marketing side business, my full-time marketing job, and my investments.

I really wanted to add a fifth income stream to this list: real estate. Real estate can provide an excellent and sustainable income stream for the right people, but honestly, I don’t think I fall into that category.

The plan was to rent out our first home, instead of selling it, when we were ready to move. But not everyone is cut out to be a landlord, and the thought of dealing with tenants — even good tenants! — stressed me out. While our home could have been a positive cash flow property, we decided to sell instead of rent.

Your situation — and personality — may be different. Many people succeed at using real estate as an additional income stream. It’s a great way to diversify your investments, but there are some pitfalls. Before you experiment with this, do your research and due diligence. Make sure it’s a smart choice, and the right one, for you.