There are two main ways to improve your finances. You can either reduce the money flowing out of your bank accounts, or you can increase the money coming into your bank account. In this article, we’ll tackle the latter option.
In some ways, it’s beneficial to think of money and your finances as though it’s a river or, ideally, a reservoir. Like flowing water, money moves. You have an income and expenses and, in a perfect world, your income outweighs your expenses and allows you to build up savings and grow your wealth.
The Benefits of Additional Income Streams
If we look back at our reservoir analogy, additional income streams are a bit like joining other streams to your river. This is how large rivers are formed in the first place, multiple smaller streams and rivers join up to make one big body of flowing water. Even a trickle can make a difference.
When increasing your income, the obvious option is to get a better job and improve your main source of income, but that isn’t always viable. If you have a fixed income, perhaps due to retiring, you can’t just get a raise. But with the rising cost of living, fixed incomes are much harder to manage.
In this case, those additional income streams work brilliantly to supplement your income and help you continue to build your wealth and live more comfortably.
This is even the case if you do work, but still want to earn more money. Extra income streams are never unappreciated. Of course, you do have to keep track of your income and declare it on your taxes, even if you don’t earn enough to pay tax. It doesn’t hurt to be careful.
Create a Side Hustle
One of the most common ways to create an additional income stream is to create a side hustle. Side hustles can work around your life and schedule, all while adding a little extra cash to your savings.
The great thing about side hustles is that you can scale them to fit your needs perfectly. Some people only work a couple of hours a week at their side hustle, while others eventually grow their startups into larger businesses that eventually serve as their primary source of income.
You can also be incredibly flexible with what you do, not just when you do it. Side hustles can range from skilled jobs to unskilled labor. If you have a van, you can deliver things and earn some extra money. If you have a laptop and a talent for writing or graphic design, you can work as a freelancer. Even if all you have is time, you can use it to pet or house-sit for people.
These are just a few of the great side hustle ideas out there. The trick is to find your niche, find your customers, and build up a good reputation.
Investing Your Money
Another way to earn more money is to invest the money you have now and use it to grow and appreciate in value. The world of investing is a massive one, with so many different opportunities and potential to get lost.
First, investing isn’t something you should jump into without thinking. If you treat it like gambling, you will lose your money just the same as if you were to gamble it away. But there are strategies that allow you to make money without relying on random chance. Of course, you should only invest money you can afford to lose. Even relatively steady investments can fail, but you can mitigate this.
Another good way to invest is to create a varied portfolio. This way, if some of your investments fail, you still have a steady stream of income. Some investments involve collecting dividends over time, while others involve buying and selling the right thing at the right time for a one-time profit.
People think of investing as something you can only do if you have a lot of money to start with. But there are humbler ways to invest.
Buying physical goods and selling them is often a good option. For example, one common question potential investors ask is “should I buy junk silver?” Junk silver refers to silver items that can be bought and sold for the value of the metal, not the object itself.
Other options that allow you to invest without a massive injection of funds include partial investing on real estate, where you combine your efforts with others to make things more affordable. Or you can buy shares in companies that don’t cost a huge amount of money, but can still earn you some trickle income.