Learn about a few different ways of diversifying income
Most of us rely on our job to provide us with a paycheck that gets us by each week. It puts food on the table, pays the rent, and, if we’re careful, leaves us enough left to save for retirement and have a little bit of fun on the weekends.
But what happens when you’re unexpectedly laid off? Or when your employer goes bankrupt? These are extreme circumstances, but certainly not unheard of. Unless you have an emergency fund to live off of while you get back on your feet, this type of situation can be devastating. That’s why more and more people are creating multiple income streams.
Diversifying your income creates some shelter from the financial storm. It gives you the opportunity to continue earning an income from another source even if one source dries up.
Many full-time employees use a side hustle to diversify their income streams, but they aren’t the only ones who should consider diversifying. Even if you’re already a self-employed individual who freelances or works gigs full time, it’s still important to diversify your income.
Why should people diversify their income?
If you thought that being a gig worker automatically means you’ve diversified your income, you’re wrong. If you’re working for only one platform, your financial success is tied to the success of that platform. Many situations could happen that may affect your ability to earn an income. Here are just a few examples:
- The platform closes your account for a violation of the terms of service.
- The platform shuts down altogether.
- The platform experiences fewer people willing to use its services.
- An influx of gig workers join the platform, reducing the overall work available.
- The type of work provided by the platform experiences a reduction in need across the industry.
If you’re working for only one platform, your income isn’t any more diversified than the income of a full-time, W-2 employee. And if you’re only offering one type of work, whether through a platform or some other method, your income streams are also not diversified.
The good news is, there are a lot of ways to diversify your income. And as a gig worker, you already know how to hustle and find opportunities, so you’re well-positioned to diversify!
Ways to diversify income streams
The best way to diversify income is to start by adding just one service or platform to your repertoire. Don’t take on too many new services at once because you may become overwhelmed and unorganized. Not sure where to start? Here are a few of our favorite ways to create more streams of income.
Rideshare apps like Uber and Lyft are some of the most popular side gigs people take to diversify their income. If you own a vehicle, there’s a good chance you can put your vehicle to work by picking up passengers on apps like these.
If you have a car but don’t like the idea of driving people around, you can drive their food around instead! Delivery apps like Uber Eats, DoorDash, or Grubhub let you work when it works for you, simply picking up and delivering restaurant orders.
Take on a part-time job
Part-time work can be an excellent way to diversify your income. Not only will it give you more cash in your pocket, but you can learn new skills while building your resume.
If you know how to do something well, there’s a good chance you can do it while freelancing. Freelance positions include graphic designers, personal assistants, writers, data entry clerks, and more. Even attorneys and other highly educated professionals can find freelance work to supplement their income and create a new income stream.
Generate income from a hobby
Hobbies can be much more than an enjoyable way to spend your free time. They can generate an income stream for you, too! If you’re artsy, consider selling your creations on Etsy. Into photography? Offer your services as a family or wedding photographer. If you enjoy organizing, offer to help others tame the chaos of their homes. The possibilities here are truly endless!
Rent out a property
If you own a home or a condo, consider listing it on a website like Airbnb or VRBO. You can rent out a single room or your entire place, with the benefit of only renting it out when it’s convenient for you.
You probably aren’t going to use all these streams of income at once, especially if you’re just getting started with gig work. But having even just two or three options under your belt can help provide you with financial stability and something to fall back on if one of your income streams becomes unavailable.
No matter what your income streams look like, you can use indi’s tools to help you save for taxes and manage your finances. Whether gig work is just your side hustle or your sole way to earn income, indi gives you everything you need to manage your income streams successfully.
Uber, Uber Eats, Lyft, DoorDash, and Grubhub and any related brands or trade names are the property of their respective holders. indi has no affiliation with these platforms. These articles are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice.