How to create multiple income streams with financial planning?

Many individuals look for various ways to make money – by way of freelancing, securing a part time job, and what not so that they have additional income to go with their regular salary. But, what about those who do not have the bandwidth to trade their pre- or post- office hours for more part-time work? This where creating passive income sources comes into play. After all, who wouldn’t like to earn money while they sleep?

Intrigued by the idea of passive income? Here are some tips on how to have multiple income streams while working an ordinary job.

  1. Be accountable for your time

The key to passive income generation is time. Your regular job should only take 8 hours for you to complete so that you can get back home as soon as possible. With the time you have after work, you are the ruler of your schedule. Take advantage of your free time to improve your skills.

  1. Drive your passion towards passive income

Passive income requires passion. Your passion can be anything such as blog writing, article writing, researching, painting, or any art. Creating this source of income won’t feel like work if you are passionate about what you do.

  1. Rent out unoccupied real estate property

Let your assets work for you when they are lying idle. Renting your home is a viable option if you need to relocate out of town for a few months temporarily. If you already own extra space in your house, you could rent that space.

  1. Mutual funds

Mutual funds can help you instill the habit of disciplined savings. Invest a part of your income into mutual funds as per your risk appetite. If you can hold on to higher risk, you can consider investing in aggressive funds. Depending on your risk tolerance and investment horizon, you could invest in equity, debt or hybrid mutual funds.

  1. Invest in the stock market

Let your money work while you sleep. Avoid luxury spending and invest in stocks instead. Many stocks provide dividends, which could be an extra income for you. Do your analysis and consider taking some risks. The more you can educate yourself about the market, the more you can earn. Although stock market returns are passive income, the research required to select stocks is an active job.

Pros and cons of passive income

Pros of passive income

  • Multiple streams of income could lead to a stress-free life
  • You can work at your convenience
  • You are your boss, and you decide your way of doing things
  • It decreases your dependency on a regular job
  • It enhances your skillset

 Cons of passive income

  • Passive income is inconsistent; hence, you cannot be entirely dependent on only one passive source of income
  • You cannot dilute your regular working hours for passive income. If you do so, you will be compromising the quality of your job profile
  • Personal time reduces since you are occupied for extended hours

Create a passive income source under expert guidance

While there are endless ways to create multiple income streams that could work for you, investing in stocks and mutual funds could be one of the better ways to create wealth. If your regular job doesn’t leave you with much time to study the market in detail or analyse investment options that are better suited for your needs, it is prudent to reach out to an expert.

A financial expert not only curates investment plans for you, but also makes them unique to your investment goals, horizon and risk appetite.

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