Diversifying Your Income for Financial Stability

I am very pleased to share this excellent article by Everett Sizemore, who among other things, is the owner of "my" farm! If you would like to submit a guest post for SimplyForties check the guidelines here.

My wife lost her job several months ago. We’ll be okay. I could lose my job tomorrow. We’d still be okay. It feels good to say that, and I hope this post motivates you to begin down a path that will allow you to say the same.

Climbing the ladder to success – a well-worn cliché – can become more dangerous with every step you climb. Just as mountain climbers put safety measures in place at regular intervals to keep themselves from falling “all the way” down, diversifying your income stream can keep you from “losing everything” during tough economic times.

Most people spend more as they make more. They get used to a certain lifestyle that must be maintained, which makes them vulnerable – hence the dangers of climbing too high. A diverse revenue stream will do little to protect you if you’re spending all of your money every month. This is why the first rule is to either reinvest the money made from alternate revenue sources, or put it into savings. If you have a full time job and still have to dip into your alternative revenue funds to pay the bills you are living above your means.

I’ll go over some of the ways in which we have diversified our income toward the end of the post. However, everyone has different skills and needs so let’s start out with some broad, general advice…

Start Now
Do not wait for retirement or a lay-off to start on a project. If you have an idea in mind, take the initial steps now. Some things you can do right now include: researching the market; obtaining insurance quotes; filing the paperwork to start a business; opening the business bank account; reading up on tax issues; finding suppliers, distributors, vendors; identifying strategic partners; buying the domain name and getting a website started; writing a business plan… The great thing about this approach is that it becomes ok to fail. So what if your idea bombs – at least you still have a full-time job. Imagine what a mess you’d be in if you waited until you got laid off to try that “great idea” of yours!

Leverage Your Strengths
Unless prohibited by your employer, consider consulting for smaller businesses that require your services. A sales manager at a major corporation could hire his/herself out as a sales training consultant to mid-sized businesses in non-competitive industries. An internet marketing coordinator for a mid-sized business could consult on weekends and evenings for small businesses and start-ups. Having these references and relationships built-up over time will provide a safety net in case you ever lose your “real” job. I know an electrician who works full-time for a shopping mall. He puts ads out on Craigslist and does small projects on weekends. Eventually he hopes to have enough of a client-base to quit his full-time job. In the meantime, he’s spreading out his financial risks.

Don’t Get Burnt Out
Do not be afraid to turn down a freelance job or put down a pet project if you feel overworked. Do not work so much that it begins to affect your day-job performance. Remember, this is a slow build-up of income, experience, connections and infrastructure over time. We’re talking years, not months. There is no need to race to the finish line.

Keep It Scalable and Be Picky
Making money on the side can get very difficult very fast if you have to do everything manually and don’t choose your battles. I have learned several ways to avoid this. First, I outsource everything I can, and stick with contractors with whom I’ve developed trust. Second, I don’t take jobs or clients that seem needy or time consuming. That’s the great thing about having a full-time job. You don’t need to take every side-job that comes along. You are the one who is in demand; not the other way around.

I have a full time job doing internet marketing. My wife worked full time doing graphic design until getting laid off several months ago. Below are some of the ways in which we have diversified our incomes:

#1 I occasionally take on clients as an SEO Consultant, but am very picky about which jobs I take and prefer to work on my own websites. It brings in the occasional check, but more importantly, keeps me in the game should I ever have to move in that direction full time.

#2 My wife makes handbags, pillows and clothing from re-purposed fabrics and sells them on Etsy.

#3 I have over a dozen websites monetized in various ways, including Google Adsense, affiliate ads, Amazon.com associate links, banner ads and lead generation. These websites, when combined, bring in enough profit to pay our bills and feed us (but not much more), and only require about 5-10 hours per week of maintenance work. It takes about 20-hours to get them up and running, but 9 out of 10 fail and are cut loose after one year when hosting and domain fees are due again. I’ve found the ones that work best for me are those that keep my interest (see simple living link below).

#4 My wife knits hats, sweaters, and scarves to sell at local markets and on Etsy. She is currently working on her website from which to sell these goods: SalvagedThreads. (coming soon).

#5 We make soap and lip balm, which we plan to sell on Etsy and on one of our websites about simple living skills: Living A Simple Life soon.

#6 My wife takes on freelance graphic design clients. She started doing this before being laid off so that she would have clients right away to bring in some extra income. Most of her business comes from word of mouth, but she also has a website to bring in referrals: Illustrative Solutions.

#7 As a work in progress, we have already started developing a website for our rental cabins, which we hope will be a major contributor to our diverse revenue-stream in the coming years. We aren’t open for business yet, but that hasn’t stopped me from “getting started now” with a website: Blue Ridge Farm Stay . In fact, knowing that we would be involved in the industry, I even started another website for the sole purpose of getting to know others in the industry and developing those relationships: Back to The Earth. When the time comes to take in our first guest, we’ll already have a website ranking well on Google and strategic relationships with dozens of other cabin rental businesses around the world. That sure beats starting from scratch!

As you can see, our house is built on many supports, some thicker than others, but each contributing to an overall greater degree of stability. Combine this with a penchant for living below your means, and you’ll have a recipe for peace of mind in troubled times.

Everett Sizemore is the SEO Manager for Gaiam , a lifestyle company promoting healthy, green living with media and eco-conscious products. He speaks at regional and national marketing conferences and writes about search marketing on his blog, www.esizemore.com. Everett's other interests include balancing technology with voluntary simplicity, sustainable
agriculture and travel. You can follow him on Twitter @balibones.

I've got a giveaway going on this week! Read about it here!

In order to get an entry in the giveaway, comment on this and any post running on SimplyForties this week. One comment per person per post will count. So if you comment on every post this week you would get six entries in the giveaway. If you Tweet about the giveaway (being sure to include @SimplyForties in your Tweet so I will be sure and get it) I’ll give you another entry, for a possible seven entries. I’ll use a random number drawing on Saturday, January 16th and your prize will be shipped directly from Striking. Be sure to use a valid email address when you comment so I will be able to get in touch with you.