Financial Independence and Creating Multiple Streams of Income
By creating multiple streams of income, you can become financially independent. Becoming financially independent has become a movement and simply put it means that without working you have enough money to pay for all of your expenses. Creating multiple streams of income is paramount to obtaining Financial Independence.
We talked about getting extra cash to put towards paying off debt and purchasing assets potentially by having a side hustle.
Now let’s talk about creating multiple streams of income and why it is important. Multiple streams of income is just what it sounds like: money coming in from several different sources. Examples of multiple streams of income for one person are:
- Job or pension income
- Proceeds from rental property
- Dividend payments from stocks
- Income from Day Trading stocks
- Income from Book Royalties
- Side Hustle Income
Ultimately, you want the stream of income to be passive but this could take time. Passive simply means that once you put certain mechanisms in place, the income comes in without any (or very little) activity on your part.
Find Your Area of Interest
Now it’s time to determine what your multiple streams of income will be and what you need to do to become proficient in your selected area(s). Select three areas of interest. Methodically tackle obtaining the necessary education to become knowledgeable in your chosen area. Then begin.
For example, you might decide to trade options in the stock market. Read a book or take a course to assist you in becoming proficient in this area. Decide how much money you can afford to use for this purpose. Set up an account on any of the many commission free brokerages like Robinhood, MI, Ameritrade, E-Trade, or Fidelity. Some people prefer to dummy trade before actually using their own money.
You could become a real estate investor. Again, you can take a course, read a book or both. Determine the geographical location that best suits your needs. Put together a team including a contractor, real estate agent, property management, and a real estate attorney.
You could also decide to become an Uber or Lyft driver. This could assist you in obtaining the money necessary to trade options or invest in real estate.
As a member of the sandwiched generation, we have many obligations, many of which are financial in nature. The most important step with anything but in this case with creating multiple streams of income is that you begin. After you start, you might decide to alter your choices however, if you never begin, there is nothing to alter.