In the fast-paced world we live in, things are changing quickly – and not always predictably. Change can often be incalculable and may come with great cost if you’re not prepared.
“Don’t put all your eggs in one basket.”
Diversification is a common strategy used to protect your overall financial position from unpredictable market cycles and investments that don’t go as planned. The conventional wisdom is that diversification should be practiced with investments to reduce your risk of loss. We agree… AND we believe diversification should also be applied to your income stream. Income diversification helps mitigate unforeseen changes to the recurring cashflow that supports your lifestyle.
It is normal for the majority of your income to depend on your ability to go to work each day. We all pride ourselves on working hard to provide for the lifestyle we enjoy with our loved ones. But, have you considered what would happen if you were unable to work tomorrow?
If you are working each day to actively produce all your income, you have put all your (income) eggs in one basket. Effectively, you have a single source of income — it all depends on you — you are the golden goose. This is risky!
Obtaining multiple income streams through diversification can protect you from complete loss of cashflow should you become unable to work for any reason. And it isn’t hard to get started!
We believe that one of the best ways to diversify your income is by passively investing in cash flowing assets. As a busy professional, we know that you cannot afford to invest more time. Investing in passive cashflow means that money comes in without depending on your ability to actively generate it. Once you begin to create multiple revenue streams, you will be less concerned about unforeseen changes impacting your livelihood. When you build passive income big enough to replace your annual earnings, it will offer you the freedom to worry less and do more things you love.
Resources that helped us develop the skills and mindset required for passive income investing:
Are you ready to diversify your income and become a passive investor? We can help.