Many hands make work light.
When all you have is a hammer, everything looks like a nail.
The world we live in today is full of all manner of
uncertainties. In the past, you would confidently choose a career path and
stick to it until you retire. It was not uncommon to find someone who worked
for a singular company or organization for their entire professional life.
Nowadays it is the exception rather than the norm.
What this means is that you can never be too certain that
where you earn your revenue from right now is going to remain the same forever.
Retrenchments happen, companies close down or downsize, acquisitions and
mergers happen all the time some of which have an impact on employee numbers.
Because of these dynamics, you are better placed when you have a diversity of
skills and diverse revenue streams.
Have you ever met a person and you are not sure what to talk
to them about from a professional sense? Have you ever found yourself in a
situation where you are in the presence of someone who clearly has no need for
what you deal in? What did you end up talking about? For many people, that
becomes the end of the conversation. However that is not the way it should be.
I have been there as an individual selling insurance where I have met people
who have no time of day to listen to what anyone has to say when it comes to
insurance. At such times, you feel frustrated because the only tool in your
tool box is a hammer. Despite seeing that you needed something else to talk
about, you remain stuck because you hadn’t prepared yourself for anything
different. From these experiences I learnt that it is important to have more
than one revenue stream you are working on. With that, you will be able to
switch your conversations around and remain relevant to the discussion at hand.
How many revenue streams do you have? How many are you aware
of? Sometimes we don’t diversify because we simply don’t have the insight into
the different revenue streams. I will highlight a few of them here just to give
you an idea. A majority of us are familiar with employment income because we
work at a job of some kind. Salaries and wages are a revenue stream many of us
can relate with. Apart from that, we also have income generated from business
in the form of profits. Those who invest in stocks and bonds and other
financial instruments also earn in the form of interests, dividends and capital
gains. When you produce works whether in form of books, music, inventions,
patents and the like, you are entitled to royalties which make up another
source of income. With real estate, you benefit from rental income. This also
applies to any other assets that you can let or lease. I believe this opens
your eyes to the many ways you can earn or diversify your income. Sometimes you
don’t even need to do something different from your current occupation. People
in the medical field do a lot of locum work which enables them to earn more
than they would if they focused only on their main job.
Why diversify?
Putting all your eggs in one basket is a risky strategy. If
something happens to that basket, you will regret your choices. There is nothing
as sad as investing all your energy in a venture then it goes belly up
overnight. This can have an adverse effect on your life for a long time to
come. We live in a day and age of constant disruption. The local taxi business
was rudely disrupted by the entry of Uber and other ride-sharing platforms. The
rise of artificial intelligence and machine learning means that the assurances
people used to have about their jobs are no longer there. Your job can easily
be taken over by machines which rarely need time off or fall sick. Think about
what you do. Is it possible that your company can find a way of automating it?
If your answer is yes, then you should know that you run the risk of being
replaced anytime. Now is the time for you to do something about it. Think about
where else you could earn your living from if the worst hits you. Is it your
skills and expertise you need to upgrade or do you need to think about getting
started on another side hustle that will get you to where you need to be?
Another reason to diversify is that you need to make your
financial backbone as dynamic as possible. When you have income coming from
multiple sources, it is easier to keep living your life even if one goes
sideways. When everything is from one source, your financial health is hanging
in the balance. One wrong move and you are thrown into disarray.
You do not have to be involved directly in each of your
income generating activities. You should focus on what you are good at (I am
not an advocate of multitasking), while you engage others in you other income
generating activities. The super-wealthy have normalized the idea of buying
other people’s time and expertise to help them carry out their projects. If you
want to make big bucks, you must become comfortable with entrusting others to
help you do your thing. You must learn the art of building systems and
populating them with the right people to get the job done. Another approach is
to be able to automate what you do so that it does not need you. This will free
up your time so that you can go on to the next thing. A good example would be
me hosting my courses on a platform like Teachable. This would free me from the
need to sit down every single time and teach someone. It would be easier to
send them on to the platform where they can learn at their own time and pace.
Whatever you choose to do, ensure that you are making
progress in increasing and diversifying your income. It will serve you well in
the long run to know that when one stream dries up, there are still 5 or 6 more
bringing in revenue. Nothing is as liberating financially as to know that you
have a strong, diverse backbone.
Image Credits: valueresearchonline.com
This is very true.
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