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?
Pinyo 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®.