More Income Streams
Most people can make over $100,000 a year if they’re committed to improving their formal education, be dedicated to their careers, and be willing to work 60+ hours a week. But unlike most people, I’m lazy and don’t like to work hard. 😛 So I prefer to use multiple income streams to eventually earn a $100,000 annual income instead. I first discovered the power of combining multiple income sources in 2012. Why remain a one-income household when you can become a two, five, or even ten-income household? 😉 Instead of focusing all our energy on growing one income, I feel the priority should be to promote synergy between multiple income sources to make them all work and grow together.
For example, my full-time job provides me with important skills, which I can utilize in my part-time job to increase my value there and get paid more. My increased part-time pay is saved up and used to buy dividend growth stocks which typically yield 3% to 4% to enhance my dividend accumulation rate. Then I reinvest a portion of my dividends in interest generating investments that yield 5% returns or higher. I can then use the interest income to invest in even more assets to grow my passive income. The more individual income streams I create, the easier it becomes to grow the entire income pot. 😀
In my last update I had 5 streams of incomes. In today’s post I’d like to welcome a new passive income stream. It’s interest-ing! 😀
Interest
Introducing my new income stream, Interest. I started earning interest on my investments in 2014. Back then I was only making a few hundred dollars a year. But by the end of 2015 it had grown to ~$2,000 per year so I feel obligated to officially include it on my income graph below, (light blue bar).
It’s always fun to discover new income sources. 🙂 Each one will have its own unique characteristics and advantages. Everyone knows we shouldn’t put all our investments into one basket. I feel it’s prudent to do the same with our incomes and not rely entirely on one job or income source. If I ever lose my primary job, it’s nice to know I have 5 other incomes to fall back on. Phew.
Income Breakdown
Here’s a description of each of my current income sources.
Interest Income: A new addition to my list of income streams. I’m currently earning $2,000 a year. Roughly half of this amount comes from mortgage investment corporations, and the other half is from high-yield bonds. I started investing in interest producing assets a couple years ago to diversify away from dividends.
Freelance and Other Income: This is miscellaneous income I make throughout the year that comes from freelance contracts, selling things on craigslist, and online income. For example last year I helped a local store owner design some posters and labels and got paid $500. 🙂
Farm Rent: In 2012 I bought a farm and since then I collect rent from a farmer who uses my property to grow and sell crops. Being a farm landlord is less stressful than owning a house because I don’t have to worry about the tenant damaging anything since the property is just 300+ acres of dirt, lol.
Dividends: Stock dividends from my investment portfolio.
Part Time Job: I teach graphic design at a local college.
Full time Job: Graphic design related work that requires the typical 2000 work hours a year. This job paid about $25/hour gross a few years ago. Here’s one of my semi-monthly pay stubs from 2012. I’ve blurred out personal details that could be used to identify me. Today, I am making between $25/hour to $30/hour.
Obviously graphic design isn’t a high paying field, but it’s also better than most jobs you can get with an arts education. The important thing is I enjoy it and I’m happy to continue working even if my compensation was cut by 50%, lol. But don’t tell my boss that. 😛
I’m sure there are still tons of other income generating ideas that would suit my financial taste. I can’t wait to find my next opportunity and grow my collection of income streams even more. 😀
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Random Useless Fact:
Two years ago Romania decided to install fiber optic cables nationwide to stimulate its economy. Today they have the fastest internet in Europe and a growing start up community with programming, web design, and other IT services.
That was great breakdown and looks like you are well on the way to reach your financial independence with diversified income sources. I really like your farm rental which I have studied through your articles although I chickened out. How is farm market in Saskatchewan doing lately?
Cheers!
BeSmartRich
It’s not doing that well anymore because Saskatchewan’s economy is struggling due to low potash and oil prices. The data for farmland values in 2015 will come out in a couple of months. I’m not expecting any movement at all. At least my rental income is holding steady. I should be getting about $9K from the tenant this year.
I have a 3 part time jobs in 3 different dental offices. recently started investing in dividend stocks. Brainstorming more for ideas.
If you’re doing the same job then you really have only one job, just at different locations. I think the point of this article is to demonstrate different sources of income — employment, rent, dividends, etc.
Then I have one job and dividend only.
Good luck finding other income streams, BRS. Dentistry is a great career to get into. I just got a cleaning not long ago. They say the best time of the day to vist the dentist is tooth hurty! 😀
“I’ve blurred out personal details that could be used to identify me.”
But we already know who you are, thanks to your bouts in the media.
(How long ago was this article written?)
Lol, that\’s true. I wrote this post about 3 days ago.
Love it!! I am a huge fan of diversification – not only for investments, but also for income. Great work in diversifying your income sources….the more the better. Even if one dries up, you can keep things going as normal.
R2R
I also like to diversify my expenses. I don’t buy all my stuff in one place, so I don’t have to rely on it if the store closes or something.
This is a great article, I sent a link to my son since we were just discussing this a couple days ago. I have also started multiple income streams and I truly believe that this is the way to go in my situation. I would love to add more, but I only started last year so for now I only have the following 3:
Full-time Job (40 hours per week)
Part-time Job (week-ends – apx 4-6 hours)
Dividends (apx. $80 per month)
My part-time job is also about 4 to 6 hours a week. I’m sure we’ll both find more to add over time. One possible opportunity I’m looking at right now is investing in a rental property in the suburbs.
Great breakdown, income diversification is always good. Definitely something I need to do better. 🙂
Time to move to Romania for cheap living cost and fast internet?
Good idea. But I’ll need to brush up on my Romanian before I go. 🙂
Romania is not cheap, unless you wanna live in a small village. I can assure you living in Bucharest is more expensive than living in Toronto.
Always smart to have multiple sources of income. You never know which one will crap out or be severely diminished. Too often people rely just on wage income and fall into trouble when let go from their job or get sick. The farm income is interesting. I think you are the only blogger I know that owns farmland.
I own farmland but I’m not a blogger.
You should create a blog, Anon. 🙂 You’ll probably get lots of readers given your analytical thinking style.
Too much work, too little pay.
There seems to be a trend in the U.S. where people are losing their full time jobs and getting 2 or 3 part time jobs instead, which helps increase the total number of jobs created, but isn\’t necessarily helpful for most families. ?
I’m loving the breakdown of the streams. I have a full time and a couple of freelance streams, but I’m thinking about adding a part-time job to the list.
Go for it, Jason. 🙂 A part-time job will not only earn you some extra income, but also improve your practical labor skills and improve your resume and expand your contact base for potential future career or business opportunities. Also, you can quit the part-time job anytime if you don’t think it’s a good fit for you anymore.
Don’t forget the tax implications of the second job. If it’s not taxed at the source it will be on your annual return. In the end, you might be working just to pay taxes.
Quote: “But unlike most people, I’m lazy and don’t like to work hard.”
But you have two jobs. So you’re working to be lazy, but not lazy now.
Some sort of mental accounting to me. You have only two income streams:
– employment income
– investment income (the breakdown is more of where your investments are).
I like the simplicity of the way you put it. We can probably also categorize my income streams into Active Income, and Passive Income.
Bill Gates once said, “I choose a lazy person to do a hard job. Because a lazy person will find an easy way to do it.” I wouldn’t consider my current lifestyle “easy” since I do work about 50 hours a week. But relative to what other people my age have to do to obtain the same level of financial security, I think I’ve been pretty fortunate to not feel a lot of stress or burn myself out.
Multiple income sources is crucial, especially for anyone that works in a field that is quite variable in activity. Why rely on just your day job income to support your lifestyle? Aside from the fact that having multiple income sources gives your diversity in case something happens to one of them, primarily your day job, but the income/savings from all of your sources can be invested to further generate higher income in the future.
Yeah, the more doors we open the more opportunities we will have. Everyone eventually reaches a day when they can’t work anymore, and creating multiple income streams can play a crucial role in planning for retirement.
There’s a lot of analysis on your income but I see a trend of increasing expenses every year as well. Do you find that to be concerning or track it as closely as well?
I have yet to see a number showing YOY returns, and cash flow it generates. A couple of money losing farms, plus a condo he lives in with unrealized capital gains. Okay, their values may have been appreciated, but then again, they are unrealized gains. How creditable are the fair evaluations anyway, but they are all added to the net worth. In reality, gains are made only after selling, minus fees, minus taxes. Net worth doesn’t make much sense. If you have 10 million dollars, but you live in a 10 million house, you get zero cash flow.
“Net worth doesn’t make much sense. If you have 10 million dollars, but you live in a 10 million house, you get zero cash flow.”
That’s why any worthy wealth analysis discounts primary residence and focuses on investable assets only.
Lots of real estate millionaires in Vancouver…with no money.
That’s a keen observation, Dave. I don’t find that concerning, and I do track it closely using a budget. 🙂 Most of the increase to my spending over the past 5 years has been in the form of interest payments. In 2011 I was paying about $1100 a month on loans. But now I pay about $2200 a month on minimum debt payments, which goes to pay the interest plus a bit of principal on all my loans.
I can easily drop my expenses back down to 2011 levels when I didn’t have my farmland loan. But that would mean selling my farmland which I don’t plan to do at the moment. I’ll probably write a post about my growing expenses in the future. The important thing for me is that the increased spending is mostly from the cost of investment debt rather than increasing consumption.
Liquid,
More income streams make it easier to deal with a major problem such as a job loss or illness. Also, more streams of income make it easier to sleep at night.
Yup. Earning more income makes taking out cheap debt worth it in the end. 🙂
Thanks for the article Liquid. No doubt we gotta work on all income streams. It’s nice making money from all angles. Why not? I say just keep at it and push ourselves to better and better. Good to great. Stay consistent and we’ll be okay. Cheers bud.
Just like anything else in life, approaching money making from different angles allows us to see the financial world from different perspectives.
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