Having diverse income streams is vital for achieving financial independence. And if you have diverse interests, you will likely also have diverse income streams.
The more interests you have, the happier you will be. Imagine if one of your hobbies is analyzing clouds, or cumulonimbuses for the scientifically savvy. You could step outside any time during the day and entertain yourself for hours.
There are so many things around us that our minds tend to filter things out so we can focus on more important tasks. If we stopped to admire everything, we’d probably never get anything done!
Diverse Income Streams Are Beneficial
Income diversification is important during weak economic times since you never know when one stream might dry up. Having more than one source of incoming cashflow is beneficial for reducing stress and staying out of debt.
The funny thing is that I never purposely thought about creating new income streams for the purpose of diversification until a few months before I wrote this post.
Instead, my diverse interests have lead me to have a diverse amount of income! It never occurred to me to count up my non-job income and figure out what percent it is of total income.
But, as I started adding things up, I was amazed to realize some months would regularly achieve 25% and up to 50% of my gross base salary! Check out my diverse income streams.
Various Diverse Income Streams
Watches & Collecting
Ever since I was 8, I’ve been enamored with watches. I remember my first watch being a black Casio sports watch for $10 bucks and I was hooked! During the past five years, I’ve been able to collect and sell some of the more coveted watches on the market which can’t just be purchased at any store i.e. Stainless Steel Rolex Daytona, Panerai Ceramic, Patek Philippe Rose Gold Perpetual Calendar, IWC Big Pilot, and several vintage Omega Seamasters for example.
These are the types of watches where you need to get on a waiting list, or get hooked up by your jeweler since you’ve bought so much already. For a couple years, I made about $10-$15,000 a year buying and selling watches. When I was a kid, I used to collect sports cards, comics, and ancient (1,000+ year old) coins as well. I wonder what those are worth now 25 years later. As a watch collector now, it’s one of my favorite diverse income streams.
Teaching Tennis
I used to give private lessons for $40-50/hour for about 5-10 hours a month. Teaching is a great way to meet new people, keep in shape, and earn some spending money on the side. In fact, one of my dream jobs is to be a tennis instructor in Bora Bora a couple months a year. Who knows, one day I might meet a sugar mama! I no longer teach tennis, but find comfort knowing that if I needed some money, I could.
Update 2017/2018: I finally landed my dream job coaching Varsity Tennis at a high school here in San Francisco! It only pays $5,000 over a three month season, but it’s incredibly rewarding to help be mentors to kids.
We ended up winning back-to-back championships for Northern California Sectionals. In 2021, I plan to defend our title and three-peat!
Blogging
I love blogging, almost to the point of recognizing that I may have an addiction. I’ve never focused on blogging as a way to make income, but as the advertising inquiries started flowing in, I realize that one could make thousands of dollars a month from their site so why not.
A lot of the money after the operating costs are donated away, however if I were to one day retire, blogging is definitely a great source of side income. People will be surprised by how much you can actually make blogging.
Learn how to start a blog with my step-by-step tutorial.
Real Estate
Real estate is one of my favorite diverse income streams. I’m cashing out of stocks to buy more real estate for income and stability in 2022+.
I’ve been buying property for the past 10 years and I don’t think I’ll stop. I equate real wealth to real assets such as property. I like the idea of owning land, shelter, and structure instead of just having dollars and cents stashed away in a bank somewhere.
Ever since the beginning of time, having property meant having wealth. It’s amazing to watch your returns tick up as rent increases, while your payments stay the same. Inflation works great that way for asset owners.
For the next 10 years I think the biggest investment opportunity is buying real estate in the heartland of America through real estate crowdfunding site Fundrise. They’ve allowed easy access to much cheaper properties with higher yields compared to the coastal cities.
Stocks and Bonds
The stock market is a fascinating animal. I’ve been trading stocks and bonds for about 15 years now and hit the big one in 2000 when some now defunct internet stock returned 52X on my investment in three months. I’ve never been that lucky again, and have also lost plenty of money too, but that was enough to whet my appetite forever.
As a result, I’ve got a couple stock portfolios along with my 401K which I play around with. What you come to realize over a long enough period of time is that once you build a large enough portfolio, small returns still mean relatively large absolute dollar amounts.
Related: The Proper Asset Allocation Of Stocks And Bonds By Age
Freedom As An Income Stream
The only way to save is to save a lot. For the past 20 years I’ve been saving at least 50% of my after tax pay. It’s quite straight forward actually. All one has to do is save one bi-weekly paycheck a month and you’ve got saving 50% down. Once your savings is robust, you can buy CDs, bonds, rental properties, and dividend stocks. Eventually, you might have enough interest income where it’ll cover all your expenses.
Diversify And Be Interesting!
Each of the six items above is like a hobby or a game to me. Play the game long enough and one day, you’ll wake up as I’m waking up now to discover the income potential of them all.
Keep on focusing on building diverse income streams for financial independence. Once you do, you will realize how awesome life truly is.
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