Lately, in online culture and the real-life work world, there’s been this idea of hustling touted by entrepreneurs and growth hackers.
A lot of people have woken up to the fact that depending financially on your day job is akin to committing harakiri. That’s why, everybody seems to have an increasing awareness to develop a second stream of income.
I understand the temptation of monthly salary is hard to resist. But the idea of your monthly salary being the only income route is a dangerous one.
The central idea behind this article is to figure out and build different ways of alternate income that when combined could replace your monthly salary, if such circustances ever arise.
While it sounds attractive to have an alternate income stream, developing it requires hard work. And, before you come down to developing it, you must know what kind of income options there are.
It’s an established fact that rich people don’t rely on a single revenue source. Take any business, any industry, any promoter – if you deep dive into their modus operandi, you’d find more than one source of income.
I am not saying you can be that rich person tomorrow. But you certainly can simulate what they have done, that is, curate and cultivate the alternate income streams.
Many people expand their hobbies or interests into their side hustles, many choose the more passive route and invest in fixed income instruments.
These are healthy options to consider to supplement your monthly income, but let there be no confusion, none of them is a risk-free option. Ideally, you should have at least three of the following in your portfolio.
So before I explain the six different ways of creating an alternate income stream, please assume hard work as an underlying factor in all of them:
1. Side Hustle Income
You may already be familiar with this type of income. For the uninitiated, it is the income you get when you engage in part-time jobs or take up freelancing gigs while keeping your day job.
A lot of people have started online businesses capitalizing on their experience of working in a domain for a long time. I know someone who was a copywriter for an ad agency for a long time.
A couple of years ago, he started a blogging website and slowly got into making short videos. Once he got the response, he expanded into teaching copywriting. He built digital products, got an initial set of subscribers, reinvested the money from those subscribers into improving the products and just kept the cycle going.
Don’t be dismayed if you don’t have a blog. Creating one is easy, you can find the details here. However, turning it into a money-making machine needs consistent efforts and perseverance.
If your blog can generate 25000+ pageviews every month, you can turn on the ad income faucet. The monies may not be huge, but the recurring consistency could alleviate your stress.
As your blog grows, you can add affiliate income and income from selling digital products to the list. Not just that, slowly, your currency amongst your community would also grow. You would attract right kind of people. This could be your ticket to speaking opportunities. More opportunities, more side income.
2. Fixed Interest Income
The fixed interest income is reliable and boring. Yes. It guarrantees peace of mind, but not the excitement that could make you jump in your bed.
If your risk appetite is thin, you are better off investing in the PPF (public providend fund). It can give you a passive income (interest rates change, as I write, it’s 7.1% per annum) without you taking a massive risk.
Keep adding small amounts to your PPF account and watch it grow into a reliable source of income. The bigger your corpus gets, the fatter your yearly interest gets.
Even if you are unable to add more money after a time, the annual compounding will keep working in the background, inflating your purse.
The best part is that both partial and complete withdrawls are tax-free. For more about PPF, read here.
3. Rental Income
4. Dividend Income
Another term that will be familiar to investors – dividend income. This is the entire reason you invest, right?
Dividend income comes from the distribution of company earnings to stock owners and shareholders.
When companies earn a profit, they have many options on what to do with it, including invest it back into the company, pay off debt, or buy back shares.
Sometimes, however, a company is legally required to pay out the income as dividends to the stockholders. Examples of these include real estate trusts and business development companies – they are legally required to pay out 90% of their net income to shareholders.
As long as you’ve owned the stock for at least 60 days (90 for preferred stock), you are qualified to get yourself some dividend income.
5. Capital gains
When you own an investment or a piece of real estate, you’ll come across the scenario that involves the value of either of these increasing – and many times, it will end up being worth more than what you purchased it for. This is where capital gains come into play.
While you can’t access the capital gain until you sell your investment or real estate, it’s a good idea to keep an eye on the prices as they fluctuate and see if there will be an increase in the future worthy enough of having that investment be sold.
Be cautious – capital gains have to be claimed on income taxes.
If you’re looking to literally make money in your sleep, this is definitely the best option for you – as long as you don’t mind putting in work at the forefront.
Royalties are earned when a person or company purchases something you helped create and sells it for profit. Examples of this are if you created a piece of artwork, wrote a book, produced a song, or have a copyright or patent for something.
Owning a franchise is another way to earn royalties – all businesses under your franchise will be giving you a cut of their profits.
Again – a lot of legwork has to be done in the beginning to make that art or build that business, but once you get to the point of success, just sit back and watch the money roll in.
Do you use any of these techniques to give yourself a little extra cash every month? Are there any techniques you use that we may have missed? Let us know in the comments!