Multiple Streams of Income, the word itself is self-explanatory. It’s the idea of earning from several types of income and different sources. You can say it’s more of diversification to gain more returns from other projects apart from the one you’re currently holding onto.
What Does It Mean And Examples
The Importance of Multiple Streams of Income
Why is it important to have multiple streams of income? If one type of income fails and you can’t get enough resources to sustain you, then you still use the other types of income to keep you going. You will have more control as well as less risk in your financial survival.
Also, with multiple streams of income, you’re at a safer place by creating exponentially more income to cater for extra or sudden costs such as accidents or fires if they occur.
Don’t put your eggs in one basket, but spread them in other baskets, to prevent complete breakage when the basket, if it’s only one, falls. And if you want to be more profitable in the coming times, then you should invest in many different sources of income.
Examples of Multiple Streams of Income
Here, I’ll take you through the general four types of income. And they include:
- Employee income
- Self-employed income
- Investor income
- Business owner income
It’s the type of income you get if you’re employed by a person or a company, and its mostly paid on a monthly basis. You can refer to it as that monthly salary you get as a result of working for someone or having a job in a particular organization. It’s the most common type of income and very risky because anytime that job position can belong to someone else. You don’t have the full control of that income, and it depends on who or the company that has employed you. And if you’re fired, you’ll be requiring a new job since you don’t have other survival means.
Self-employment income is the income you get from the profits of your own work. You’re the boss of that business, and you decide on all management decisions. In other words, you’re the one calling the shots. Your success and that of the company solely depends on your ability to meet all your targets and goals while still satisfying all your clients. This type of income comes with lots of responsibilities, and you can get overworked or overstressed and less time to relax.
It’s a type of income that you don’t require to get your hands dirty to make money. Investment income is a passive income that you generate after investing in specific profitable projects and later on you’ll reap huge returns from that investment. You’ll be investing your money in other people’s business to get massive income through returns.
Business Owner Income
If you own the business, then you can generate a significant income, and you’ll not be doing any work. You’ll just hire people (employees) to work for you and do all the workaround. Your only job will be to run the business itself. It is less risky than self-employed or being an employee since you’re the one calling the shots and you have other people working under your management.
If you want to be safe from unexpected economic crises, then try as much as possible to diversify your income means. Have yourself some multiple streams of income to live a comfortable and less risky life.