It is never a good idea to just have one source of income. Businesses close, companies downsize, even government jobs aren't always secure as RIFs and layoffs take place all of the time. Here are the six sources of income that you should have filling up your coffers each month:
- Interest income. A large portion of your emergency fund should be kept in an interest-bearing account. Passive income is good income since it doesn't require you to work for it.
- Income from your main job. Your main, full time job should provide the bulk of your income each month.
- Income from a side job. It's a good idea to put your skills to work creating an additional source of income. I know guys who were roofers in college who, even though they spend the majority of their time in suits, will take occasional side jobs roofing houses. Another lady I know picked up a paper route which she does in lieu of working out at the gym. Still another guy did a great job installing wood floors in his home and know has flooring jobs lined up for weeks just from word of mouth.
- Income from investments. Income producing investments are another good source of funds. Investments can range from stocks, bonds, and CDs to rental properties and businesses. While these investments can be great sources of income, note that they do require quite a bit of attention, education, and market savvy.
- Income from hobbies. You enjoy partaking in your hobbies anyway so why not include paying customers and make a bit of money while you are at it? Going fishing? Take paying customers with you. Love to knit? Look for venues to sell the items you make. Like scrap booking? Order supplies in bulk and sell the excess to other scrap bookers.
- Income from the internet. It has never been easier to set up an online stream of income. Everything from free blogs to which you can add advertising to your own website that can provide information or a product can provide income straight from the customer to your bank account.
I chose these six forms of income because, while it is quite possible to have dozens of streams of income, it can scatter your attention too much to suddenly launch into a dozen different ways of earning money. Start small with these ideas then branch out from there.