Last week I was fortunate enough to have a guest post included over on Amateur Asset Allocator. Writing guest posts is an excellent way to build new readership to your site as well as helping out a fellow blogger when they are away. Go over and check out my post titled – Passive Income – It can change your life.
Welcome to PFI and the weekly updates – Diversify Your Income Edition. I am a strong supporter of diversifying your income, just as you would do with your investment portfolio. Diversification is the key to most things you do in life. While diversification may not prevent you from hitting pitfalls, it will always lesson the blow in tough situations. For example, diversification in the stock market in the past year probably did not prevent you from taking a loss in your overall portfolio. However, diversification probably decreased the percentage loss you took in the market compared to others who are over weighted in a particular sector or stock. I have covered the topic of diversifying your income streams several times before – but wanted to bring it up yet again because I feel so strongly about it. If you rely on your income or your spouses income for the majority of your cash flow – you may be putting yourself in serious financial risk. Proper diversification will allow you to be flexible and adapt to harsh economic times.
Overtime, I hope to create more income streams that are passive in nature and slowly fade out my current job that I receive the majority of my pay from right now. This is a long-term process and is something that just can’t happen overnight. Here is a list of my active income streams.
- My Job
- CD Interest
- Stock Dividend Income
- Covered Call Option Trading
- In the money Call & Put Option Trading
- Peer to Peer Lending Interest
- Gift Card Rewards
- AdSense
- eHow
- Misc. Blog Advertisements
What type of diversified income streams do you currently have?
Personal Finance Blog of the Week
As part of my effort to meet my personal finance goals for 2009, I plan to visit other personal finance blogs and help promote the good ones anyway I can. Each week I will write a short review of a site that I believe is worthwhile checking out.
- Amateur Asset Allocator – This personal finance site is also a fellow member of the The Finance Blog Network that I belong to. Kyle, the author of the site has a goal to reach financial independence by age 40! This site is perfect for anyone interested in all things personal finance. Go and check it out today and see for yourself!
Carnivals
I participated in the following carnivals over the past week. Please check out some of the great reads from these carnivals!
- Carnival of Personal Finance 190: Buddy, Can You Spare a Dime? – (Feb. 2, 2009) Recession in America: What about Our Pets? – hosted by Funny About Money.
- MoneyHacks Carnival–Frugalista Style! – (Jan. 28, 2009) Passive Income – How to recycle your cash flow – hosted by Little Miss Know it All.
- Festival of Frugality – 162nd Edition – (Jan. 27, 2009) Read Your Credit Card Statement – Detail is Important – hosted by Gather Little by Little.
Articles I liked this week
Sticking with the theme, I am listing my favorite articles I read over the past couple of weeks (not necessarily new articles) on the topic Diversify Your Income. Here are some of my favorites -
1 – My Work at Home Mom Blog highlights her current diversified income streams that will help during the recession.
2 – Pinyo over on Moolanomy gives an introduction to peer to peer lending. This is an excellent place to start if you are interested in diversifying your income through peer to peer lending.
3 – The Passive Dad has started a new income stream writing articles for eHow! Writing niche articles is a great way to diversify your income by writing outside your blog or website.
4 – Pat from Smart Passive Income breaks down his January earnings and details his earnings from multiple income sources. All I will say is if you want some inspiration – go read this post!
5 – Dusty from Chasing the Bull shows us the pros and cons for starting a new passive stream of income through dividend reinvestment plans. This is yet another way to diversify your income streams.
Have an wonderful week!
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I would be interested in learning what sources you researched in order to learn about placing option calls. What has been your track record? That would be a great post!
Steve’s last blog post..Links for 2009-01-11 [del.icio.us]
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@Steve – I stick with In the Money Calls and a few In the Money Puts mostly. I use to follow Lenny Dykstra’s posts on TheStreet.com but got a little annoyed at some things that went on (long story). I also read several books, researched Yahoo! finance, etc. The power of options is incredible. It can actually be way too much power. Let’s just say that in 2007 I started with about $2,000 and within 6 months had made just over $20,000 trading in the money calls and a few puts. Then I was stupid, got greedy, and made some uneducated decisions that wiped out my gains and actually put me a few thousand into the loss column. If I had developed a plan and stuck to it, I would have made a lot of money.
I actually am thinking of writing my first eBook around trading options for beginners. I am by no means an expert but can offer some insight and lessons learned around the topic.
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I agree that a blog about trading options would be very interesting and informative.
As far as my income diversification, I have a few different sources of interest income, my standard 9 to 5 job, online surveys, academic tutoring and hopefully some blog income soon.
Steve’s last blog post..Comment on End of January 2009 Financial Status by pfincome
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@Steve from personal finance startup – How do you like online surveys? I tried them for a while but got tired of spending the time on them.
passivefamilyincome’s last blog post..PFI Weekly Updates – February 3 (2009)
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I tried a few different online survey companies and found it to be tedious and inconsistent. There is one company, Pinecone Research, that consistently provides $3 for every survey you complete. Sometimes you get free trials of products to answer a second survey on and earn another $3. The only problem is they don’t admit new people all the time. You have to get lucky.
Steve’s last blog post..Comment on Goals Update for End of January 2009 by Studenomics
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I love the concept of building a diverse array of income sources that eventually liberates you from the one traditional income. I too would definitely love to read about your endeavors in the options world.
Blake’s last blog post..The Power of Measurement
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Thanks for including my post! Your list reminded me that I was thinking just of online earnings and forgot to include our rental property, which pays for itself via the renter. We haven’t done anything since he moved in in September — guess it helps that he’s a handyman by trade.
We plan to rent out the house we’re living in once we get a larger emergency fund established and possibly buy another house every few years while prices are low. Real estate can still be a good investment if you can cash-flow-positive the properties and let someone else pay down the principal.
Maria — WAHM’s last blog post..Thanks to Bloggers, Affiliates for eBook Sales
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I just posted a link to the PineCone Research signup page as they are now accepting new members. Not trying to pimp my blog too much, just trying to share the sign up with your readers as you seemed interested in my survey site earlier.
Steve’s last blog post..Comment on My Favorite Blog Articles of the Week by Studenomics
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