Multiple Sources of Income: 5 Reasons To Get Immediate Financial Security

Written By Alla Levin
August 02, 2021
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Multiple Sources of Income: 5 Reasons To Get Immediate Financial Security

In today’s volatile economy, it is essential to find ways to feel confident and know what will happen if you lose your job or if something changes like rising health costs or increased debt payments. There are many benefits when it comes time for finances, including feeling safe from all uncertainties, living life without worries, and enjoying experiences even if you have a tight budget.

If you’re not financially secure with a stable amount of money coming in then, it’s time to explore what else is out there. Having more than one source of income will be beneficial if ever anything were to happen.  Just know these five reasons why this is worth exploring now.

Rising Health Costs

In today’s world, from small business owners to self-employed individuals, healthcare is becoming more and more expensive for everyone. Therefore, to reduce your vulnerability, you should invest some time into exploring other sources of income that can provide you with financial security—for example, traditional insurance options such as COBRA or medical coverage through employers who offer benefits packages.

Reduce DependencyReduce Dependency

Most people are heavily dependent on their jobs to pay for the majority of their living expenses. For example, most employees have rent or mortgage payments paid every month and can’t afford a 30-day grace period before penalties kick in.

Others may have inheritance estates but not enough liquidity to make ends meet. In such a case, a probate loan would support you financially without having to sell your inheritance. Having multiple sources of income provides security against this type of financial instability, so you don’t feel like your world is falling apart just because one thing happened unexpectedly.

Live the Life of Your Dreams

Living the life you’ve always imagined is not as easy as it sounds. For some, this might mean buying the house of your dreams and starting to build equity instead of renting one out on Airbnb or other home-sharing sites. Others may want to start their own business to work for themselves from anywhere they desire in the world.

Figuring out how many sources of income people need to get financial stability will depend on what type of lifestyle they are trying to create and maintain while still fulfilling obligations like paying bills, living expenses, medical costs, etcetera.

Counter Uncertainties Like Unemployment

With the rapid changes in technology and globalization, there are few guarantees of job security in today’s economy. The average length of unemployment is currently more than 40 weeks. The best way to protect yourself from fluctuations in the economic environment is by having an income from multiple sources.

This will provide stability when one source starts shrinking or becomes unstable. For instance, if you have a large portion of your total income coming as dividends on stocks (as opposed to salary), then your portfolio can act as a buffer against volatility. If stock prices rise because of company success but not enough for you to be wealthy right away, at least it’s something steady that doesn’t ebb and flow based on external factors.

Reduce Your DebtReduce Your Debt

The way to reduce your debt is by making more money. If you have a side hustle, it will help pay off that student loan or credit card balance faster and save you from those high interest rates. The trick here is the old saying of “the penny saved.”

You need to be saving at least what you’re earning, so if you only make $100 extra each month, maybe set aside an additional $50-60 for savings as well. This isn’t just about getting out of debt; this has everything to do with financial security because if something happens in life where one income stream dries up, then having multiple sources ensures a backup source.

Sources of Income: Conclusion

The future is unpredictable, so make sure you don’t put all your eggs in one basket. Financial independence will give you peace of mind when unexpected events happen.

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