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Recently, I was counseling a young man on budgeting and finance as part of a financial workshop I run online. He had all the right things: the 401K, the savings plan, goals, and a budget. What he didn’t have, however, was a plan to diversify himself. He focused only on his portfolio. Unfortunately, this is a common thread running between my clients, young and old. They neglect to recognize the importance of having multiple streams of income, until I lay out the financial benefits.
You save more
By having more than one income producing venture, you are able to save more money, because you are earning more money.
You are protected in the event of a layoff or job loss
If you ever lose your job, are laid off, or lose a resource, you have back ups to make up that deficit over the long haul and for shorter durations, meaning you don’t have depend on your savings to live.
You withstand even the worst economic conditions
Even if you lose a job, get laid off, or have one income producing enterprise “go under” you are still able to withstand any economic climate and be better off than someone relying on only one type of income.
You are always able to jump on new investments
Think about if you had the resources to jump in on Google or Facebook on release and buy up shares. When you have more than one source of income, you can.
You stay sharp
Wherever you spend your money, you will have a natural assertion to become more educated about that area of business, and other areas of business as well. This keeps you sharp and always on the look out for new deals and better ways to do business in your current ventures.
You stay well rounded
You don’t need to be an “armchair” expert, but your knowledge about many different things makes you more well rounded, based on business prowess.
You can “play” more
It stands to reason that when you have more money and save more money you are able to do more for yourself; take vacations, enjoy a spa day, or do something fun more often than someone scrimping and saving who didn’t diversify.
You build long-term wealth in the short-term
Saving more and investing more money because you have the up front money to do so means that you are able to create long term assets in your early years, giving you the opportunity to retire much earlier than someone with a single income.
You put your money on autopilot
By creating enough “hands off” ventures that you simply administer, you put your income on autopilot and can focus your energy and attention on new areas.
You naturally become more fiscally conscious
Part of becoming more well rounded means that you stay on top of the latest news in business and finance. Doing this, automatically makes you more fiscally conscious.
More from this contributor:
7 Reasons I Am Smarter with Money Than You
Money Doesn’t Manifest: Don’t Dream It, Do It
5 Ways to Get More Out of Your Money for Retirement