Over the past few weeks, I have been thinking about my career quite a bit. Perhaps with a few exceptions, I felt that career is a dead concept for many of us. What would prompt me to say such a negative thing? Basically, I dodged a downsizing bullet not too long ago. It’s sad to see 10, 20, or even 30 years relationships be destroyed by these downsizing initiatives. But the reality is, there’s no such thing as growing up with a company anymore.
Building multiple streams of income is the career of the 21st century
Traditionally, it was possible to achieve a comfortable retirement with a good career and some retirement investments to supplement your pension and social security. In this era, it’s no longer practical for us to count on our job, as such, we should do what we can to become less dependent on it. I strongly believe that it’s more logical to focus on creating multiple sources of income — call it the career of choice for the new millennium if you wish.
This is basic risk management and it’s no different than diversifying your investments. In investing, we know that a small minority could do very well by picking a handful of investments — i.e., Warren Buffet. However, for the majority of us it’s better to buy and hold a globally diversified portfolio of low-cost investments. The same concept applies to income generation. It is wise to not relying on your job as the only source of income.
Some advantages of having multiple income streams:
- If you lose your job, your income is lowered as opposed to disappeared.
- It will help you reach your financial goals faster.
- It gives you a taste of financial freedom — after all, financial freedom is basically when you no longer need your job to cover your living expenses.
- It gives you greater flexibility and leverage. You’re in a much more powerful position when you know that you are not 100% dependent on your job to make do.
Have you ever had a close call with downsizing? Have you thought about building an alternative income stream?
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Pinyo Bhulipongsanon is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.
Pinyo, Great post! I like your comment that traditional career paths and job security are dead. I also like how you recommend multiple streams of income. I’m a firm believer in starting side businesses. It’s the foundation for my blog as we believe the best way to wealth and life balance is through entrepreneurship. The benefits of starting a side business – It is a low risk way to get a business off the ground. – It provides additional income. – It is diversification for your income. That way if one source drops or goes away it doesn’t hit so… Read more »
Totally true. I work for a small software company in a new industry, so I know my job is constantly on the line. Losing even one or two major customers could be fatal for a small technology company. As of right now, my alternative income wouldn’t pay the bills, but I’m working on it.
When the layoffs at my job occured I was glad it wasn’t me. Now nearly 10 years later I wished it would have been me since it would have been the career jumpstart I needed. At least when I left it was because I had another job lined up (Though it took 4 more years and that was too many) By the way, since April, thanks to you, I’ve begun expanding my income sources and keeping track of it too. Using records I filled in my alternate income since Febuary and have watched it grow from $19 a month to… Read more »
Creating alternative income streams is a great idea, but the reality is that they are hard to come by and are very time consuming if you do find one. If your current job and commute is already consumes 10-12 hours of your day, it’s just not realistic to invest in another income stream. With that is mind, you are right. The layoffs are just a matter of time and job security no longer exists. Therefore, finding alternative income streams is becoming more and more of a necessity. The solution is to position yourself to manage the job transitions that are… Read more »
I had a very close call with downsizing, and saw several close friends and colleagues be led from our building with only a small box of their desk belongings (the rest were gathered up by security personnel). The experience definitely made me realize that there is no such thing as job security. Building mutiple income streams (the more passive the better) is a good way to hedge against the risk of another round of layoffs.
I almost got laid off in 2001 – I have to admit I was just concerned with getting another job.
While I agree with your logic, it’s difficult to make significant returns on your time with alternative methods (ie a blog). I could spend 100 hours a week on various business ventures but it’s unlikely that I could make as much as my regular job.
Mike
Great post, mate. I wonder if the day when everyone will realize that having a job is insecure is coming soon. Just 20-30 years back no one ever thought that so many people would rely on alternative income today. Maybe after 20-30 years the people who go to offices every day will be exceptions. Especially with the fast development of the broadband communications.
Good post and something I have been thinking about as well. However you have to be careful not to become a jack of all trades, and a master of none. What I mean by this is at, you need to ensure you excel and focus on your primary source of income (job) to ensure you are an asset to the company so less likely to be part of a lay-off. If you have a talent or high interest in something, then pursue it as building up another source of income takes time and the returns can be a long time… Read more »
As I am a freelance artiste, I have had multiple income streams of one sort or another for YEARS. I joke that my husband brings home the bacon & I bring home the bacon bits! Also keeps all your skills fresh –
I couldn’t agree more. I honestly feel it is the only way to get ahead when you are starting out way behind with student loan debt.
@B Smith — Great point about side business, and I agree that surviving a downsizing may not be the best thing. Also, I love your story on GRS. @Ben — I am glad to be part of your pursuit of alternative income sources. It was a slow start for me (in the negative), but I am doing much better now. Having set goals and keeping on top of them will definitely help. By the way, I started Moolanomy in anticipation of losing my wife’s salary due to her pregnancy. @Curt — I think the difficulties you mentioned is true for… Read more »
I’ve been downsized. While I wouldn’t call it a gift, it was a healthy wakeup call. Realizing that nothing is guaranteed is the first step to taking active control of your career. I do think there’s room in life for salaried work, but my future (and my retirement) is definitely in my hands and no one else’s.
I work for a software development company and I’m actually in the verge of leaving it as soon as my blogging incomes equals my net pay. Everyday, I travel 50km to go to my office and another 50km to go back. I probably spend more than 4 hours on the road alone. With the ever increasing cost of gas plus the amount of time being waste on the road, I figured out that building other sources of income other than my salary makes sense. This way I got to spend more time with my wife and 1 yr old baby,… Read more »
This is a great post with some great points. I am trying to build multiple streams of income firstly by running my entrepreneur blog and then I will begin to write books, ebooks, training programs and run seminars etc. It is my goal to be able to retire before I am 30 and I believe I will need multiple streams of income to allow me to achieve that
@AndyS “However you have to be careful not to become a jack of all trades, and a master of none”
I would strongly recommend reading the following article:
https://www.stevepavlina.com/blog/2008/07/what-if-you-have-many-different-interests-and-cannot-commit-to-any-of-them/
I am so much with Steve on that and I agree focusing on one thing is one of the biggest mistake modern people do.
Pinyo – good point. I guess I tend to think that alternative income sources should be “easy”. 🙂
Again, I agree with all of your points here. While I’m pursuing a “career” in academia, which has its own sets of rules and regulations, the same trend is happening: more part-time teachers and less tenured profs. But I think I wouldn’t mind teaching part-time anyway. I’ve never grown up expecting handouts, and I kind of like the idea of knowing I’m in control of more than two sources of income. I feel more flexible, like I have more options. More open doors.
This is a great article!
I just love the statement that “a career is a dead concept”. Independence and freedom is what we need and the career is a prison. Just a question of better furnished or lesser furnished prison.
I wouldn’t say a career is entirely dead. But the traditional career like many people in our parents’ generation enjoyed is a dead concept in the US (outside of government or military service). Pensions are also on the same path… disappearing.
It is becoming more and more important for each of us to search out ways to be financially secure on our own. Be it a side job, investment income, rental income, or something else. Alternative income is becoming an important part of financial planning. That’s why I’m working on it… 🙂
This is one of the most important lessons we, as financial bloggers, should be expressing to our readers.
Building alternative income streams is the truest secret to financial success. In simple terms: Take the money you have earned at your job and make that money work for you by making more money.
Investing, generating royalties, and patents as listed above are the best forms of alternative forms of building income streams.
There are many other ways to build income streams like taking a second job or a work from home hobby.
@Curt, I agree, I have the same feeling, creating multiple sources of income, you need also time and if you have a busy job, do some sport or other leisure, little time is remaining. Unless you try to create passive income streams, like a friend of mine, invest in solar energy, after 10 years, when he paid his debt, he has a passive income (government is paying an amount for produced energy). @Sam, how small seems the world, I have the same issue, a software firm, but loosing a lot of time and fuel to get there 100 KM (50… Read more »
I like what you are saying, and that has been my key focus over the last two years. It’s a great mindset to have, and I totally believe you are spot on when it comes to the way we need to be in the 21st century. Any articles on managing time wisely without becoming too scattered?
This is even more true today with the latest stats that supposedly almost 500,000 Americans are now making some income from blogging (with only 2% of those being able to live off it full time) – as many almost as there are lawyers in America. So the trend would seem to see those numbers growing. I also like Pat’s idea above that growing some of your own food is a type of income since you don’t have to spend for it.
Great ideas! I’m working on this right now, and having a ball discovering all the possibilities. Building a residual income is time consuming, but it’s well worth it in the long run.
Great post, and something I totally agree with. Having been made redundant twice in the last 10 years (the last time being 3 years ago) its something I have learnt the hard way. After my last redundancy (which was particularly brutal) I decided that I had to begin earning additional income for myself. Three years later and I’m regularly generating between 40% and 60% of my monthly salary as passive income. Its been hard work and I’ve had to overcome my own fear of trying new things – but it’s the best thing I’ve ever done. To anyone out there… Read more »