Increase Your Earnings by Diversifying Your Income.
It's time to bring back that entrepreneurial spirit you had when you were a kid selling lemonade on the street corner. By finding a side gig, you can increase your monthly earnings and provide you and your family with income diversification. The purpose of income diversification is to create additional sources of income so that if you were to lose your day job, the impact on your budget would be lessened.
Brainstorm Alternatives
The first step in creating an alternative income stream or a business is to brainstorm the different ways you could earn additional money. The rest of this article will provide you with ideas to help start your brainstorm. After you have read this article, start by creating a mind map of potential ways to earn money. Mind maps are brainstorming tools that allow you to quickly think of and organize ideas and thoughts.
Income Diversity Mind Map
The above example is a mind map I created to organize the different categories of side-gig inspiration created for this article. You can use it as your model for filling in your own mind map. As you create your mind map, don't eliminate ideas because you think they won't work or that no one would pay you to do them. Start by getting as many ideas down as possible, then you can evaluate them.
Inspiration for Side Income Opportunities.
The following are suggestions designed to jump start your creativity and provide you with some inspiration. Don't limit yourself to these categories, but they are a great place to start your brainstorming session. Try to fill in as many ideas as you can, but shoot for at least two in each category.
Get a Second Job.
This is probably the easiest additional source of income to think of, and probably the one you are least likely to enjoy. Although I don't recommend this because you will just be adding to your required workload, it still should be a consideration. Identifying ways to work on the weekends or in the evening is a quick way to create income diversity and earn extra money.
Freelance Work is a similar idea, but it doesn't require you to commit to another company. Whatever your profession, there are now dozens of websites available which connect professionals with your skills with people and companies needing your help. Many pair you with work that takes only a few hours per week or is project-based.
Monetize Your Expertise
You have developed a lot of expertise over the years, find a way to monetize it. This could come through your career or through your hobbies. If you have a particularly difficult career to break into, consider writing a guide or coaching people interested in entering your career. People often pay lots of money for help getting into a new line of work.
Similarly, your career expertise can help others directly. Human Resources professionals can often find side work helping people revise their resume or practice interviewing. Or a home inspector could make money writing and selling a guide on the most common problems to look for when buying a house, which would be invaluable to first-time home buyers.
You can also look at the expertise you've built through your hobbies. People pay big money to learn how to do things, even if they are just for fun. If you grow orchids as your hobby, you can probably make money helping others grow orchids. Although you may find it easy to keep orchids alive, talking to friends and family should very quickly tell you there is a felt pain for people who seem to kill every orchid given to them for Mother's Day or as a house warming gift.
Monetize a Hobby
Another option is to monetize your hobbies as opposed to helping other people do them better. If you travel a lot and take lots of pictures, you might be able to earn extra money by printing your best pictures on art canvases and selling them around your community. It is pretty easy to find farmers' markets and community art walks that would allow you to sell your crafts. Making jewelry, woodworking, or any other hobby that produces a physical good potentially can be monetized.
Provide Services to Others
Another option is to provide services to people based on your interests and skills. Uber and Lyft have made it very easy for people who own a car and don't mind driving to make extra money. If you enjoy fishing every weekend and own a boat, extra money can be made by charging people to go out on the boat with you on fishing excursions. You're going to be out fishing anyway, why not earn extra money with your hobby? Whether you would enjoy fixing electronics, decorating houses, or spending time walking and boarding dogs, there are ways to monetize your spare time with things you would enjoy.
Freelance Writing/Editing/Transcription
If you have more of the scribe in you, you can earn extra income by doing freelance writing on subject you are interested in. Local community newspapers, websites, and other smaller publications are always looking for content. By writing on the subjects of your personal expertise or interest, you can earn extra money with minimal extra effort. (Assuming you like writing of course)
Become a Landlord
If you live in a desirable area, and if you have a spare bedroom, you can relatively easily create an income stream for yourself by renting out the spare bedroom on Air BnB or other websites. The ideal situation is if the bedroom has a separate entrance and bathroom. That way, you can lock the interior door and earn additional income without having guests invade your private life. If that spare bedroom also has a kitchen you can rent to a long-term tenant as well.
Start a Business
If you think any of these are strong enough ideas to start a full-fledged business, this is definitely something to explore. One of the best ways to explore what it would be like to own and operate a business is to take an entrepreneurship or small business class at a local community college. You can also look at franchise opportunities so you can start a business with the support of a large corporation. Most of the businesses you see are actually local franchises owned by families. Opening a franchise can offer you an additional income stream; the benefits of entrepreneurship; and business, operational, & marketing support from a nationally recognized company.
Evaluate Alternatives
Once you've created a list of ideas, start evaluating the alternatives. For each idea, assign three numbers based on the opportunity the idea presents. Use a scale of 1 to 5 with One being least desirable and Five being most desirable. So ideas that have high potential might have a number ranking of 4/5/4 and ideas with low potential might have a number ranking of 2/1/3.
Your Happiness First
The first number in the series is how much you would enjoy earning extra income through the method. If you feel it would be a chore and an additional job, then rank it low on the 1-5 scale. On the other hand, things you would find fun to do or things that you already do for fun would earn a higher number on the scale.
Easiness is a Close Second
The second number represents how easy it is to figure out how to earn income. If you are struggling to figure out how to get paid with the idea, place a low number in the second slot. If ideas for how to earn income and get paid flow easily into your head, enter a higher number in the second slot.
Bring Customers in Third
The final number is how many customers there are and how much demand there is for the idea. Don't worry about knowing it for certain, at this stage a gut instinct will suffice. If you believe few people would be willing to pay you or it would be hard to find customers, then assign a low number in the third slot. The easier you think it will be to find paying customers, the higher the third slot number should be.
Add The Numbers and Pursue Your Side Gig
For each idea, add the three numbers together to get a total score. This should give you a ranking of which ideas to pursue further and which ideas to let go. Start with the ideas with the highest numbers and find one to pursue. Develop a plan of action to begin pursuing your additional side income.
You should consider consulting a professional financial adviser to identify any potential tax consequences or legal liabilities. These will likely be manageable, but your accountant or financial planner can help you identify them up front.
Take the Purposeful Finance Challenge
In just a few minutes a week, you can achieve your financial goals. Each week you will receive a simple action item to take to improve your financial situation. Visit our challenge page and commit to getting in the best financial shape of your life.