How Many Income Streams Do You Have?
Monday, December 10th, 2007
As some of the readers on my website, Lazy Man and Money, know, I was asked to resign from my day job a couple of months ago.As one might expect, it was an emotionally straining day. For many people this would be a simply disastrous circumstance. Take a minute and think about what would happen if you lost your day job - I’ll wait.
It doesn’t seem too good does it?
I found there were two major emotions running through me. One is the blow to my ego - that since of failure. I found I was able to escape depression by realizing that I was talented and experienced at things other than my career. The second emotion, and the one I want to focus on, was one of financial despair. There’s a natural reaction to wonder how you will pay the bills.
For many people this loss of 99% of their income would be a major obstacle in their life.
It was more of a speed bump for me.
Eighteen months ago, I realized that losing a job is always a possibility and took strides to diversify my income. The result was that the loss of my day job only represented 75% of my income. The remaining 25% would be extremely difficult to live on indefinitely, but it certainly stretches my emergency fund quite a bit. I’d estimate that I can live a year on it - more if I start cutting out some luxuries like I plan to.
I recommend that everyone try to build income streams separate from his/her day job. I know that it’s not easy, but you never know when a recession may come and take your job with it. I found that blogging, investing, and dabbling a very little bit in real estate works for me.
There are other options if those aren’t your talents. I have a friend who is really good with computers. He does computer maintenance for the neighborhood part time. You may even find that balloon art turns into a full time career. Imagine that - twisting balloons for a living!
Doesn’t it make you smile?
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Lazy Man has been a lender at Prosper since February 2006. His lending has been written up in the Globe and Mail, Canada’s largest national newspaper. He is the author of the personal finance blog, Lazy Man and Money. He enjoys watching Boston sports while sipping diet cola.
