ViDI Studio / Shutterstock.com Nearly half of all Americans depend on secondary work to get by. This is largely hidden from Bureau of Labor Statistics and U.S. Census Bureau data. According to census data , 7.8% of Americans work more than one job. Having multiple streams of income is rapidly becoming how people save for retirement, get out of debt or just build up some spending money. That Etsy store might not pay all the bills, but done right it could certainly help a six-month emergency fund stretch a lot longer.
The number of people with multiple streams of income has been growing over the past 20 years. However, it is a fraction of the real total, largely because both the Census Bureau and the Bureau of Labor Statistics use a relatively antiquated definition of formal employment to define someone’s second job. Half of all workers 40 and under do gig work in addition to their full-time jobs, and most of them report needing the money for either bills or to establish savings.
Between formal and self-employment or gig work, just about 4 in every 10 U.S. workers has a second job of some sort. Here are a few rules of thumb on creating multiple streams of income. Consider working with a financial adviser on how best to augment your income. Not All Income Means Employment
pathdoc / Shutterstock.com When we talk about multiple streams of income, a second job is the natural place to start. As we note above, for relatively few Americans this means taking a part-time job. This is particularly popular for younger people, who may pick up hours in the service or retail sectors on the side. For many, many more people, side work today means app-based gig employment. They drive for rideshare services, deliver meals and groceries, or pick up hours on odd job sites.
Don’t believe that this work is limited to side hustles. Millions of Americans who can’t find more stable employment rely on low-paying, unstable work for their primary income. However, if you are looking for a paycheck on the side, picking up work is never a bad idea.
On the other hand, it also isn’t strictly necessary. In fact, most wealthy households hold wide and diverse sources of income without filling out an application to work at Macy’s or a beach-themed mall kiosk.
Beyond work, the four major places to look for extra cash are: Passive Income – This means you are earning income from external sources without any further involvement on your part. For example, many writers rely on the royalties generated by their published books. They do nothing, but the money comes in.
Invested Income – This is money that you make from your investment portfolio. This can refer to dividends, capital gains, even the profits from a business you may have invested in. In general, you make money by managing your investments.
Owned Income – Not quite the same as passive income, owned income is the money you make off of your property or assets. Essentially, can you buy something that other people will want to use? Perhaps the most common example of this is rental property. A family cabin isn’t entirely passive, you still need to turn it over and prepare for your guests, but it isn’t employment either.
Business Income – Related to employment, but not quite. Related to contract work, but not quite. Business income is the money you make by running your own business, selling products and services to interested customers.
Beware of Upfront Costs
Yulia Grigoryeva / Shutterstock.com To a certain degree, you have to spend money to make money. You can’t build a strong portfolio without buying securities, after all, and if you want a good job you’ll probably have to invest in at least one suit or semiformal outfit. Be careful, though. Many side jobs can demand, or at least encourage, you to put up quite a bit of money upfront in order to get started. This is particularly popular with multilevel marketing firms. Generally, this is couched in encouraging terms. You want to make more money faster, right? Well having the best tools can only help in the long run, right?
Not always. Before you buy a new car, a fancy camera or a set of knives, think carefully about how long it will take to make that money back. Even a successful side hustle can take time to get going, and you don’t want to lock yourself into something only to find it isn’t […]
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