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Develop additional sources of income
Thursday, 8 March 2007
I was once doing a contract for one of the largest investment banks in the world, when something horrible happened. I'd been there a few months and had got to know a few of the other people. In general, they were nice, dedicated, hardworking people. Many of them had mortgages, families and other commitments.
One day, the head of the department called all of us into a big meeting room. He stood up in front of all thirty of us and said: "Unfortunately, head office has decided that we're not going to do IT in Sydney any more. Instead, it will be done from Singapore. That means each of you will be made redundant in the next couple of months. I'll speak to each of you individually to confirm the details."
And that was it.
I'm a contractor, and used to moving around, so for me it wasn't that big a deal. But many of the others had been working for that company for years. A large part of their lives revolved around their jobs. They were devastated and wondering what to do. Some of them confided in me they feared they were facing real financial hardship.
This isn't an unusual story by any means. Similar things have happened in organisations throughout the world. In fact, I'd be surprised if you haven't at least heard of something like it happening to somebody you know. It's the way the world is these days.
What it teaches you is to follow the old investment saying: "Don't put all your eggs in one basket".
Many people have only the income from their job, and they stretch that to the limit. Instead, from as soon as you start earning money, you should try to develop additional sources of income. Diversify where you make money from as much as possible. Ideally, you'd like to get into a situation where even losing your major source of income is not going to ruin you. Obviously, this isn't easy, but at the same time it's far from impossible.
Here are some suggestions of additional income streams you can tap into. Many of them I use myself. Indeed, this website is an example of an additional income source for me. Here we go:
- Interest-bearing savings accounts.
- Shares.
- Investment property.
- Small businesses.
- Consulting work.
- Moonlighting.
- Web-sites.
These are just some suggestions to whet your appetite. Obviously, with creativity and research you can probably come out with more of your own. Indeed, most people have some kind of hobby or interest that can easily be converted into additional income with a bit of effort.
In the beginning, any new income source you develop is likely to be small and weak. Like a young plant, you must nurture it and be patient. Often, with time and work, that seedling can grow into a giant oak.
Many people throughout the world have turned small income sources into vast riches, and there's no reason you shouldn't be able to do it also. Just remember that it's a long-term effort and not something you're going to be able to build overnight.
Don't allow yourself to become a victim of our turbulent economic times. Realise that losing your job at some stage is not just a possibility, it's distinctly likely. The sooner you start developing additional sources of income, the better a position you'll be in to weather such a storm.
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