Gone are the times when one source of income was enough to cater to the basic needs of an individual including food, shelter, healthcare, and of course, daily expenditures. These days, however, those with just one single income source struggle to get by. This is why having multiple income streams has become a necessity and is no longer a luxury. Here are just a few reasons you need to have multiple income streams:
Job Security is Never Guaranteed
Believe it or not, your job is never truly safe regardless of how confident you are about the guarantees it offers. Whether you work for a government organization, a successful corporation, or a promising startup, a lot of things can happen that may result in your loss of employment.
If you fail to take contingency steps to expand your income stream, you will be hit hard financially when the inevitable happens and you lose your job. With two or more other income sources though, you can continue in your primary job without allowing your fears about job security overwhelm you.
Reduces Your Dependence on Your Pension
There is nothing wrong with working for an establishment until you reach the age of retirement and being rewarded for your decades of contribution with a sustainable pension. It can, however, be very tough to maintain your acquired lifestyle with sole funding from your pension, especially since growing older often means greater medical expenses. Therefore, having multiple income streams ensures that you’re able to further increase your savings, which in the long run reduces your dependency on your pension.
Helps You to Build Wealth
Lots of middle-income earners are unable to climb up the status ladder and become wealthy solely because they are dependent on just one income source. It is nearly impossible to become wealthy if you are relying on a single source of income, and most people who figure this out are usually late to the party. When you earn from multiple sources, the speed at with your finances improve is very impressive, and even a temporary halt in one income source will have little to no impact on your financial situation.
Allows You Take More Financial Risks
It is well known that those who become wealthy often take smart financial risks that are deemed naïve by others. Such risks are impossible to take if you only have one income stream as your whole savings can be drained if things go badly. However, earning multiple income streams makes it easier for you to take these risks and potentially earn even more.
Regardless of the income streams you have at your disposal, you should plan your finances before taking any decision that will directly or indirectly affect them. Whether you choose to hire a financial planner or use online financial tools and apps, you must ensure that the worst case scenario of an investment opportunity doesn’t involve losing all that you have worked hard for. A financial planner or online financial tools can help you manage your money better, ensuring you have more to put in high risk investments.
People usually mistake job security for financial freedom, but you can only attain real financial freedom and security by building multiple streams of income.