You may have noticed if you read many stories about entrepreneurs that many of them have multiple sources of income. Doesn’t it sound nice to be making money as you sleep? Or not have to rely on just a single source of income? If you want to learn how to create multiple streams of income, we’ll show you how to get started and give you some income stream ideas to consider.
How to Create Multiple Streams of Income
It doesn’t always make sense to generate more income to rely on a second job that you work around at your other job. For example, if you have a Monday through Friday regular work schedule, you’d have to make extra money on weekends if you have a second job. It will take away your time that you have to spend with your friends and family.
The best ways to make extra money start by identifying a few different sources of income. When creating multiple streams of income, you should have a few passive income streams too. Passive income allows you to generate more income without the need to put much effort into it daily. Some passive income streams do take some legwork to establish and build. But once that effort has been made, there’s little maintenance that is put forth afterward.
7 Streams of Income
It’s likely that you have heard about the 7 streams of income in topics about entrepreneurship. The idea has become popular because the IRS reports that most millionaires have 7 income streams. Whether your goal is to become a millionaire or just have a stronger financial standing, following these ideas to create these different income streams is a recipe for success.
These sources are a combination of passive and active streams. Here is more about these income stream ideas:
Your earned income is the money you receive from your regular job. For most people, this is their main source of income. It’s the basis of how you can start building wealth since you can use your salary to invest in different types of passive income sources later.
The important part is to be mindful of how much time you spend at your job and how much you’re earning to do it. Figure out ways that you can be more valuable at your job to increase your income from it. The thing is, you should do this without having to increase how much you work.
Money that’s earned in exchange for a product or service is called business income. Mixing business income when creating multiple streams of income will help build your wealth faster. To be successful, you’ll need to identify a particular market that requires or is missing something.
Figure how to address this problem through your innovative product or service. When you solve a problem for others and offer a quality solution, it won’t be difficult to generate sales.
As far as types of passive income, you probably won’t generate that much initially with interest income. It is the income that you earn to lend your money. A savings account and certificate of deposit are common ways to earn interest income. You collect interest in a specified period (monthly, yearly, etc.), and you can quickly get started with this income source by putting away a portion of your money into an interest-bearing account.
By owning shares in a company, you can start earning dividend income. A popular method of making this form of income is by investing in stocks. You’ll have to research to find out what companies you can earn dividends from and have a track record of giving back a solid percentage to their investors.
When you purchase real estate and rent it to someone, you are earning rental income. The type of property that you buy can range from a condo, house, or apartment complex that you rent to people to commercial buildings that business owners use for their business.
Rental income is probably the strongest source of income out of the 7 income streams. It’s one of the best ways to earn extra money because after you find renters, there’s not much else you need to do other than collect rent. As a bonus, there are many tax deductions and exemptions in real estate investments that you can take advantage of.
When you sell investments, you earn income in the form of capital gains. Real estate, luxury goods, and stocks are all investments that can provide capital gains when sold. Tax rules for capital gains have different rules applied to them. So before you go out and purchase a bunch of investments, consult an accountant to understand what happens when an asset sells. Sometimes when an asset is sold, your profits are wiped out by capital gains tax.
Multiple Sources of Income Ideas
Now that you know the different types of income sources that people have found success in building wealth, it’s time to decide what methods to use. Here are just a few ideas of the best ways to make extra money that can multiply your paychecks each month.
Invest in Index Funds
A completely passive way to invest in the stock market is to get on index funds. Basically, an index fund is a portfolio of stocks or bonds that perform similarly to a financial market index. For example, if you invested in an S&P 500 Index, you wouldn’t have to choose your investments, know when to buy or sell a company, or rebalance your portfolio.
Since you’re invested in the general market of S&P 500s, the fund would do all of this for you. All you need to do is choose the fund in the index you want it to be based on. Index funds are available in virtually every market, from health care, banking, emerging markets, etc. Your stock portfolio is on auto-pilot after that.
Create an Online Course
Do you have a skill set that you could teach others to develop or improve? Create an online course that you can sell to others. The great thing about selling online courses is that you do most of the work in the beginning with putting together the course. Use a platform like Teachable.com that allows you to create and market your course. You’ll make passive income every time someone purchases your course from these platforms.
Don’t limit yourself on what type of course to teach. There are courses on virtually every topic, even ones that you wouldn’t imagine. People have created courses on subjects from technical skills like “How to program in C++” to “How to take care of houseplants”.
Buy and Sell on eBay
If you are into antiques, sports memorabilia, or something else, you can turn your hobby into an income-generating machine. To turn this into profits, you’ll need to find these items at bargain prices and resell them to customers willing to pay that price.
To find things to buy, depending on what types of items you are looking for, you can go to garage sales and thrift stores to find very cheap prices. It’s also possible to find hidden gems on eBay, Facebook Marketplace, Craigslist, and other online market platforms. Set up your own eBay store to make the most out of the platform and start making money while you’re sitting at home.
Make Sales with Affiliate Marketing
If you’re looking for a way to make passive income and have a blog or active website, you can try affiliate marketing. There are certain products or services that you can promote on your site by signing with an affiliate. You can get paid typically by earning a percentage of the sales or a flat fee. Many companies want to get their products and services in front of potential customers.
To find affiliates, you can contact the vendor or use ClickBank, a global retailer and affiliate marketplace. Be strategic about the affiliates that you partner with. For example, if you have a blog that discusses hunting and fishing in Colorado, you should look for vendors relevant to your website.
Invest in Real Estate Investment Trusts
Not everyone has the capital to purchase real estate property to earn rental income or flip homes. Others prefer investing passively. These are situations where getting into real estate investment trusts can make a lot of sense. Real Estate Investment Trusts or REITs are funds that professionals manage. It works similar to a mutual fund in that a REIT holds many different real estate projects.
Owning REITs is much more liquid than owning a piece of real estate. If you want to get out of a REIT, you can sell it whenever you want. Adding REITs to your investments is also a great choice because the dividends paid in these funds are generally higher than those in stocks and other investments.
Rent out Your Space
If you have a place that you don’t use during certain times, like the summer or weekends, consider renting it out. Instead of just collecting dust while you’re away, your home can turn into extra dollars that you can use to grow your investments or pay down debt. List your space on websites like Airbnb and HomeToGo to find travelers looking for a place to stay.
Another option is to rent out a spare bedroom that you have for a roommate. It can help cover your mortgage cost, so you have more money to use in other areas of your life. Of course, there are some risks when renting out your space in either of these cases. You could have a bad tenant that causes damage or even steals from you, for example.
Create a YouTube Channel
Video has become arguably the most popular form of entertainment out there. If you would love to showcase your imaginative French-Chinese fusion dishes to the world, why not start up your own YouTube Channel? You can earn income from ads and sponsors once you’ve developed a strong viewership.
The platform has minimal to no cost to invest in, and you can find an audience in even the most niche areas. Building a following does take time and effort. There is also no guarantee that you’ll generate any money, even if you have great content, since you need people interested in your craft.
Sell Your Skills
Do you have a day job where you use your graphic design skills to create marketing content like digital ads, infographics, etc.? Perhaps your passion is taking your professional camera out on weekends and taking pictures as you do on long hikes. Whatever skills you have, there’s probably someone out there who is willing to pay you to help them out.
The great part of getting into freelancing is that you can work as little or as much as you want. Technology has made it possible to find clients worldwide so you can leverage online skills like designing web pages, writing copy, and virtual assistants. Use platforms like Fiverr and Upwork to showcase your work, find clients, and get paid. If you prefer working with clients locally, many local Facebook groups cater to bringing together businesses that need help and freelancers.
Another way to add another stream of income is to sell a product. One way to get into this is to start a home-based business that offers certain products and sells them to friends, family, and other customers. Another option is developing the product on your own. It isn’t as challenging as you might think.
For example, you can decide to sell a line of aromatherapy candles and oils. You can identify a manufacturer that already creates this product that you want to package as your own product by doing research. Then you can use a platform like Shopify to sell your products.