My wife and I are entering into the great unknown – we will soon be first time parents. We are as excited as any other first time parents, but along with that excitement comes a little bit of worry. This is a huge lifestyle change for us and there are many unknown factors – one of which is financial.
My wife and I decided she should be a stay at home mom. We are blessed to have this opportunity, but that also means our income will decrease after she resigns from her job. Going down to a one income family increases our risks – if I get laid off or something else happens, we could be in trouble. That is why life insurance and long term disability insurance are so important. But that is also why I have worked so hard to improve my small business over the last 2 years. With my business, all my eggs are no longer in one basket.
Alternative income is a form of insurance
I’ve written about alternative income before, and why it is a large part of my long term financial plans. There are many benefits to having alternative income streams: income diversification, more financial options, accelerate debt repayment, save more money for retirement, work toward financial goals more quickly, and many more.
Alternative income can work for everyone. My friend Steve wrote about how to make money without a job and why you should. This is an excellent article that explores the merits of creating alternative income streams and why they are important. By the way, Steve was already earning six figures from his day job when he wrote this. Steve worked as a consultant, and recently, the company he was working for opted not to renew his contract. He is earning much less than he was as a consultant, but his alternative income streams helped bridge that gap.
How do you create alternative income streams? Steve lists several ideas one could use to create a source of alternative income, such as starting a blog, creating an online store, consulting, and more. But don’t limit yourself to his list, my list, or this list of more than 40 alternative income options. Use your skills and talents – whatever they may be.
It doesn’t take a lot to make a difference. Even a little extra cash flow can help you with bills, living expenses, retirement savings, or give you date money. Any extra income that helps you meet your financial goals is a good thing. And once you get the ball rolling, you may find ways to increase your alternative income streams beyond your original goal.
Hedge your bets with alternative income. I think it is important to have more than one income source. There are very few guaranteed jobs out there. I think of alternative income as another form of insurance.