The following is a guest post by Forrest McCall of Don't Work Another Day. Enjoy!
Coronavirus was an unprecedented event that no one saw coming. More than anything else in recent memory, the COVID-19 pandemic has affected the global economy and the income of most businesses globally. Small businesses and freelancers worldwide are seeking new ways of keeping their income stream flowing. By diversifying your income stream in 2021, you stand a better chance of making a steady income and worrying less about the impact of the coronavirus.
In this article, we explore 6 income streams to diversify your income in 2021.
The best way to diversify your income is by seeking out passive income sources that allow you to make money while pursuing other income sources. Below are 6 passive income ideas to help diversify your income in 2021:
Selling Information as a Product
The world now is full of so much information that the problem experienced by most consumers now is how to get the right information without wasting so much time on the internet. If you are a very knowledgeable person in your field or have an idea that you are sure most people are not aware of, you can sell your information. Selling information as a product in the form of an e-book, audio courses, video courses, and more is a popular strategy for diversifying one’s income in 2021. Thanks to sites like Udemy, Skillshare, Coursera, ArtStation, and more. To earn passive income this way, all you have to do is take the time to create the course or share your idea on these websites and earn money when people subscribe or buy the course.
The major barrier to making this kind of income is the resource and time required to create the information as a product in the first place. However, after the initial investment, you can sit back and earn money. For this form of passive income, the best way to keep making money is to make several other related informational products that offer value to your potential customers.
Rental Properties
Almost every article, book, or video made about passive income or diversifying your stream of income would at one point or the other mention rental income, this is because it is a steady source of income that can be profitable if managed properly. One major caveat is that it requires more work to set up and operate than most people think.
One very important strategy to making the purchase and operation of rental properties a profitable venture is by taking the time out to learn how to make it a profitable venture first.
Here are three things to determine before you take a plunge into buying rental properties:
- How much return on your initial investment do you expect?
- What is the total cost of the property and the anticipated expenses?
- The financial risk involved in owning a property.
Owning a rental property can be a profitable venture or result in a loss. Take your time to study the market, the area, and understand how you intend to reach your financial goal before owning a rental property.
If real estate is not your cup of tea, you might consider digital real estate.
Affiliate Marketing
If you own a thriving website, YouTube channel, social media channel, or any other online platform with a huge and dedicated audience, affiliate marketing is the way to go. Affiliate marketing involves promoting a third party’s product by linking their product on your website or social media account, mentioning them on your platform, or directing your audience to purchase their products. You can easily develop a passive income from affiliate marketing because you get a certain percentage when anyone buys a particular product linked by you. Amazon is the most popular affiliate partner but other big companies like eBay, Awin, and ShareASale are good for affiliate marketing as well. Major platforms for carrying out affiliate marketing include Instagram, YouTube, TikTok, and personal websites.
If you have a huge audience, then every visitor that clicks on your affiliate link is a potential buyer and that is a potential income for you. Commissions usually range from 3 to 7% depending on varying factors.
It is important to note that this option is better for someone that already has a following. If you are just starting out, it is better to focus on building your audience first before trying out affiliate marketing. Affiliate marketing is one of the best ways to flip money and grow your income.
Passive Income as a Silent Business Partner
By becoming a silent partner in a thriving business or a startup, you can earn passive income without needing to worry much about the day-to-day operation of the business. This way instead of providing funding for a business in form of lending, you can buy a stake in the business. You get paid from the profits of the business depending on the terms and conditions of your partnership. In this form of partnership, your money is backed by a percentage of the business’s assets. Several sites like funded.com, Angel Capital Association, and Angel Investment Network are good places to find businesses to invest in.
This type of passive income is suitable for people who have money and would like to own a business but do not want to do the work required to set up a new business.
Before investing in any business, it is important to vet the business and crunch the numbers to make sure it is the right one for you and it is not a dying business.
REITs
A REIT is short for Real Estate Investment Trust, which is essentially another way of saying a company that owns and manages real estate. The advantage of owning a REIT is that it has a legal structure that allows you to pay little to no corporate income tax if you pass along most of your income to the shareholders.
REITs can be bought on the stock market just like any other dividend stock. You earn the amount that the REIT pays out as dividends which have a record of increasing on an annual basis. REITs can serve as a growing stream of income for anyone looking to diversify their income stream.
Just like any other dividend stocks, you need to pick the right REIT to earn a profit, therefore, you need to analyze the business you intend to buy and seek advice from people that already invest in this type of business.
Side Hustles
Outside of passive income sources, using a side hustle to grow your income can be an excellent option. For example, learning how to make candles to sell can be a great way to make money and diversify your income.
Best of all, there is a side hustle for just about anyone, no matter your skills or background. With today’s technology, it has never been easier to pick up a side hustle to earn some extra cash.
Tips for Successfully Managing Multiple Streams of Income
Use Your Existing Customer Base
If you already have a customer base that brings revenue to your business, leverage on that when finding new ways to diversify your income stream. In 2021, everyone is looking for new ways to get better deals or find better value, if you can offer your current client base better value with your new source of income, then do it.
For instance, perhaps the new information that you intend to sell on the platforms discussed above would benefit your customers in one way or another. A good strategy would be to focus on turning your current clientele into a potential buyer of your new product.
Try New Things
I am assuming that you already have a steady source of income and are just seeking out new ways of making more money. It is, therefore, necessary to try out new methods that perhaps your current business restricted you from trying out before. Do not limit yourself to your primary skills, it is okay to develop a secondary skill that can be combined with your old skills or pick up a new skill completely to start your other business. When seeking to diversify your income, go as wild as you possibly can until your find the option that works for you. Perhaps, you are a writer now but have always had a knack for design, you could pick up graphics design and expand your client base.
Give Yourself Room to Make Mistakes
It is okay to make mistakes especially when you are just starting a new business. The most important thing is to learn fast from those mistakes and make sure you don’t make the same mistakes again. Perhaps, the new business you picked up is not as profitable as you thought it would be, don’t waste your time regretting your actions. Instead, find new ways to make it work or pick a new source of income.
Organize Your Income Stream
When diversifying your income, it is easy to mistake a little profit for a lot perhaps, because you have money coming in from various sources now and you think you are making so much money you start buying things you don’t need. It is important to keep your income stream organized and recorded to ensure that you can easily see if you are making any profit or not.
Conclusions
There is a myriad of ways with which you can diversify your income in 2021. Try using some of the strategies described in this article to find the best alternative sources of income for you.
