I was on top of the world by cherishing this moment of glory and this is when the dampening effect came. I was told by one of my elders that “always strive hard to develop multiple sources of income”. At that point in time I did not value this statement thinking that how can a person work at two places in order to generate income from dual sources.
Probably this was acceptable at that point in time due to my inexperience, however with passage of time I clearly understood the importance of having multiple sources of income. When I say “multiple sources”, for sure it does not mean that you invariably have to work with multiple employers (at the same time)in order to get income from different sources.
There are many ways through which one can derive income from multiple sources at a defined point in time. One of the most credible and workable ways is by creating a multiplier effect on your money - which has been saved by you over a period of time. The multiplier effect is simple to explain and easy to adopt.
Assume in the beginning of the year 2012, you had a saving of Tzs. 10 million which was invested into a “Systematic Investment Plan (SIP)” generating returns @ 10% p.a. In normal course you will be entitled to get a net earning of Tzs. 1 million p.a. or Tzs. 83,333/- per month from this investment.
This is nothing but an additional source of income for you. Now let us add the multiplier effect on it. Assume you make additional investment by putting Tzs. 100,000/- into it as a top-up on monthly basis. Under this scenario your 2nd month returns (or
say interest) will be higher than the 1st month and similarly the 3rd month interest will be higher than the 2nd month. By doing so you not only have created additional source of income but even ensuring continuous growth in your income.
Like the one I explained above, there could be many ways through which one can develop multiple sources of income. Each one of us has different skills which can be put in use on commercial terms. Often you must have noticed that some of our colleagues in office are very good at singing or cooking.
While they enjoy singing or cooking as a part of their hobby or interest, they can consider commercialising it and by doing so they will succeed in creating an additional source of income for them. You have a house of your own but nobody stops you from building another house which upon completion can be let out to a prospective tenant and will derive monthly rental income.
When you have multiple sources of income, it will provide you a greater sense of security because today’s world is full of uncertainty. Any time you may lose your job or may incur a sudden loss in business or occurrence of any other unforeseen event which may have an adverse bearing on one’s stream of income.
This is when your multiple sources of income will come very handy, if at all you have it. Generating multiple streams of income can have a major impact on your finances. Even an extra income of $100 each month could go a long way to paying down debt or increasing your investments. We often hear about the importance of diversifying our investments, but diversifying our income streams is just as important, particularly in difficult economic times.
Generating additional income (along with minimizing expenses) is the foundation of smarter money management. Having multiple sources of income is a secret weapon used by nearly everyone who’s really wealthy. The wealth they have amassed comes from different sources, even if it started with just one source.
Whether it’s an entrepreneurial venture, network marketing opportunity, stocks and bonds, real estate investments, building projects, you name it and they have it. But to start, you’ve got to choose something that’s not going to take every moment of your free time to get up and running.
Take your family into consideration, too, because if you neglect them, it’s not good for anyone. How complicated is it? Since you’ve got your bread-and-butter job to consider, remember that your new income stream needs to be simple enough so that you can manage it yourself at first. If there’s a huge learning curve, this is not the stream you should start with. Finally a word of caution- “in your pursuit of developing multiple sources of income never forget that what you do must be a permissible activity else you would land up in trouble.”
You also have to study your current employment terms and evaluate what you can safely do and what you can’t. It should not happen that due to some wrong choice on your part you may end up losing your primary source of income (say your current salary’) for the sake of generating a temporary source of income.
But all said and done the importance of having multiple sources of income in one’s day-to-day life stands. I had ignored this important fact way back in 1984 and learned it later the harder way. Hope you will avoid taking the same route which I have travelled and rather will adopt this philosophy on the very first day.