Do you rely on a single income stream for your livelihood? If so, you are like many individuals who are not diversifying their income streams to protect their personal finances. Living off of one income or revenue stream is opening up an unnecessary risk for you and your family.
If the poor economy has taught us anything, it should be that relying on a single job or your 401k to live off of, can be very risky. While the recession has magnified these risks, they have always existed. Companies go out of business. Stocks in bad companies (i.e. Enron) decline or loose all their value. That is why it is so important to take action and build multiple income streams.
To help explain these possible risks, here are 9 reasons why living off of a single income is a really bad idea!
- Lose Your Home – If you rely on a job as your only income stream, you are setting yourself up for potential disaster. If you own a home and lose your job, you run the risk of losing it to foreclosure.
- Added Stress – There is a lot more added stress to an individual or family when there is only one income stream to live off of. The constant worrying over losing your job, especially during rough economic times, can be reduced by diversifying your income portfolio.
- Loss of Retirement Savings – Say you have a nice nest egg created to use during your retirement years. What happens when your single income stream dries up? You access your retirement accounts to help pay for your bills, thus throwing away any plans for retirement!
- No Leverage in your Job – Living off of one income from your job? Chances are that if this is you – there is less leverage to use in your current position. You will be less likely to take calculated risks in your position that could improve your overall work environment.
- Reliance on Others – Having only one income stream means that you are relying on others to make key decisions that will impact your livelihood. In your job, for example, you rely on upper level management to ensure they are making the right decisions to keep your company running.
- Possible Relocation – Say your company merges or is taken over by another organization. Your only option, if any, is relocation. Having multiple income streams reduces your exposure to any forced relocation by your company.
- Separation from Loved Ones – What if you lose your job and can’t find work in the area that you live? You are probably going to start looking for work outside your immediate area. This means that you could be separated from your family members until they can relocate with you.
- Go Back to Work – Maybe you are retired and are living off of a pension or retirement account. If this is your single income stream, then you may be relying too much on the overall economy and stock market. If your retirement savings are drying up fast, you may be forced to go back to work.
- Wasting Your Time and Money – Say you lose your job or your single income stream dries up. Instead of looking for a job, maybe you decide to start your own business (as many people are doing right now as a result of the poor economy). That is great – but what if you don’t know anything about running a business? Too often, people panic when they lose a job and jump into something new (i.e. starting a business) with little or no experience. This can be a huge waste of time and money.
Worried about living on a single income stream? Now is the time to take action and start building your income stream portfolio. There are many options available out there today that can help diversify your income and lower your risks of a financial meltdown.
What other reasons can you think of to motivate yourself to build a multiple income stream portfolio?
Related posts:
- Personal Finance for the Single Parent
- 5 Reasons to Outsource Your Passive Income
- 3 Reasons not to Outsource Your Passive Income
- Green Jobs with Good Salaries
- 10 Simple Reasons Why I am Building Passive Income
Related posts brought to you by Yet Another Related Posts Plugin.
{ 7 trackbacks }
{ 9 comments… read them below or add one }
“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” John D. Rockefeller
If that’s not enough of a motivator for you, then nothing is
@BB – Great Quote!
For me, having to depend upon someone else (i.e. my employer) stresses me out to no end. I would, in fact, say that this is one of the main reasons I am working so hard trying to get as many passive income streams built as I can.
People like Ben K and Mike Iser are proving that the little man can go out there and make some really good money with HubPages and Infobarrel, while developing their own internet properties.
@Dusty – I started checking out HubPages this morning actually. Do you have any Hubs?
You are so right! Having a great job today doesn’t necessarily mean you are going to have one tomorrow. The only prudent thing to do is to insure that you have multiple streams of consistent passive income. Thanks for your great work on these posts. Keep ‘em coming.
@Kevin – Thanks for the kind words. I agree about the potential for job loss. I saw it happen in the company I work for a few weeks ago. Employees who had been there a really long time who thought their jobs were safe were let go!
Great, great reasons to work on those “multiple income streams”.
I have a day job, I’m programming HouseholdBudgetNerd.com, my wife sells her artwork at (MelodiousArt.com, she programming BohemianChristianArt.com, and she’s on the board with a non-profit called ArtLoveMagic.com . We hope all of these will bring in incomes!
Thanks for the article.
@Dusty: thanks for mentioning InfoBarrel. I hadn’t heard of that one.
I use HubPages – but only one Hub so far – and Triond, as well as Squidoo. Triond is a bit different as it pays per number of visits (I think!) rather than requiring you to sign up with AdSense to pay their publishers.
What I like about the concept of multiple streams of income is that you are diversified, not depending on one single income. Having said that, the danger is to get too distracted working on too many projects at the expense of your main income stream, which is your job (if you are working in corporate America). You need to make sure that you are working only at that job while at that job, and that your outside ‘streams’ don’t interfere with that job. Overall, though, I am dedicated to diversification over the next 10 years. Having that perspective keeps me from getting discouraged if I don’t see results after 1 or even 2 years.