[...] Reader Comments:  Multiple Streams of Income? (32 comments) [...]

That’s exactly what I’m talking about.

The health insurance is a big one that I don’t think we think of in the classical sense, but it is a valid stream for a specific purpose. I’m covered, as well, and I’m happy enough to pay for something that I may never use.

I’ve got a small stream now from investment income, and I’m soon going to pick up a few rentals (hoping for 3-5 over the next 4-6 years).

FB – I’d rather have a beer than a bag of potato chips…

Rod – I guess I mis-understood your comment.

In terms of what I’m doing financially:

I contribute quite a bit to my rrsp which I could live off of for quite a while if necessary. I’m working on paying down the mortgage would will result in a lower minimum payment (if necessary). I have disability insurance through work which pays 85% of my net pay tax free, so that should cover the heart attack situation. I have critical illness insurance which may or may not cover any actual illness I might get. I also have adequate life insurance which won’t do me much good but my family would benefit from it.

Losing my job would be a problem although I would get approx 9 months pay if that happened.

Mike

It can be investing (the more time you spend on the market, the better are your chances of making money), part time consulting in your field of study, starting a side company, buying a rental property… As you can see the list can become exhaustive.

It is safer to derive income from several sources. But it takes time and efforts. Unfortunately, time is something that nobody can’t buy :-(

Mike, it’s not that it’s dumb for having a single source of income, that’s what most people have. Just that having multiple sources provides a safety net. With your blog, if you wanted to monetize, you could pay for way more than your cable bill.

Savings.

Having a second stream of income to pay the cable bill is the exact opposite of where I’m going with this. Having a second stream of income growing over time so that it can replace your primary source of income is the goal.

There’s no need to get a second or third job (unless one wants to). However, you should be striving to increase your income from your job and sacking some of that away each paycheque.

About ten years ago, I read how one in 4 people will have a serious illness or injury that requires a lengthy time off work. Ever since, I’ve asked people what they plan to do if they had a heart attack tomorrow. The answers are positively frightening.

So, let me ask you. If you had a heart attack tomorrow, what have you done to ensure you won’t be financially ruined?

Rod – since I’m so dumb for only having one stream of income, can you please explain how I can obtain these additional streams without having to get a second or third full-time job? And I don’t want to hear about dividend income or blogging – that won’t pay my cable bill.

Mike

I’d change what I said, but I mean it even more now, most engineers really like their jobs, despite all of the annoying parts. I’m in computer consulting (we’re like engineers but with software and computer hardware :) and the people I deal with, generally, really like their job. Personally, I love this stuff, I’m at my “dream job” right now, but I spent two years working for a tyrant when I started. The only thing that could make me show up at work was the fact that I loved what I was doing, just not who I was doing it for. I just held out until I found something better.

The truth is, if you’re under 30, the time you apply to anything will be amplified over the coming years. Everything that you learn today simply has more years to mature and grow. So if you magically have extra time (who knows how between work, the blog, the wife and the properties/stocks?), then focus on the stuff that’s going to give you the most long-term benefit.

Personally, I think that’s you! You already know lots and lots about money and how it works. If you’re a consulting engineer, that puts you steps ahead of most, who simply don’t understand. But there’s always a ton more stuff that can be learned for work:
– Management (you’ll be one sooner or later)
– Sales (priceless, you’re always selling)
– Advanced computer usage (Excel programming, professional document creation, web work, 101 programming)
– Read a small business kit, know what’s involved.
– Professional Development training in your field

BTW FT, these are not specific to you, they’re just general advice. The truth is, the more you know about “all” of this stuff, the better you can become at any career or job.

Engineers have a pretty fixed corporate ladder, so if you show up every day and deliver, you’ll be managing people in 10 years. But if you can talk business with the bosses, they’re going to put you at the front of the line, b/c they know that you’re savvy and that you understand what it means to “make more money”. (either that or you’ll discover that they don’t have clue and you’ll start your own business, take half their staff and half their clients and triple your salary :)

All of the stuff I list above is about “talking money” or being better at delivering on-time and under budget. (man I feel another blog post coming on: Essential Life Talents) We talked about this in “When are you not frugal?”. But spending money on you is the number one way to increase your income streams. If you’re going to show up from 9-5 anyways, why not make the most of it? At some point you’ll do something different with your life (not engineering), but talking numbers and understanding sales is just going to make you a better blogger or being a better blogger will make you a better writer when get to publishing your book, of course, being a better sales person will help you turn over that book that much quicker… and so on :)

Nothing more valuable than being really smart, that will generate all of the income streams you really need :)

I agree with you wholeheartedly about the emergency fund and line of credit. My problem with the whole scenario is that relying on one stream of income leaves one too open to catastrophe. I also believe that relying on one stream of income makes it too easy to live on a cash in/cash out basis where people don’t put aside an EF. Encouraging people to have diversified income streams encourages them to build savings/investments/etc.

I’m not able to depend upon my secondary streams of income (yet), but my financial plan has me working toward a 50/50 split between work and non-work sources of income by the time I’m 45.

Whether one has multiple streams of income or just one, an emergency fund or line of credit is still a must. I don’t think receiving $20/mth in dividends is going to help people that unexpectantly lose their jobs.

I know if I were laid off tomorrow my rental property income wouldn’t cover my home mortgage but thankfully our plan has that covered.

Single stream income lives confine you to your job; multiple income streams allow you flexibility and provide a safety net. Just ask the call centre employees in New Brunswick who went to work Monday to find the doors locked – I’ll do what I can to avoid that stress.

Although I also agree with Mike, I used to have a dream job as well. It’s only 7 years but the novelty has worn off for me too. Thanks for the good laugh.

Guess I better go job hunting! ;)

FB

I used to have a dream job – only problem is that 10 years later I still have that same job…needless to say the novelty has worn off.

Mike

You definitely need to be able to have a good laugh where you work once in a while. If not, working to get more money in order to invest in dividend stock will become a sure way to (create wealth) dig a hole so you can jump in and pass away.

However, I’d to retire as a dividend investor, and my current job will help me achieve that dream in the next few years. I don’t want to risk it by jumping ship now. It’s not worth it. And besides, my current job isn’t so bad. As you said, if you’re happy with your work, then it’s the ultimate form of passive income. That’s what dividend investing means to me. The time spent is fun, not wasted energy.

I personally know someone who refuses to accept a job unless it’s his dream job. He’s not a young man anymore. For the past 7 years since he graduated, he drifted from one job to the next with not much to show for in his bank account. Luckily, he’s debt-free because he’s living with his parents.

I guess what I’m trying to say is not every is as lucky as you to find a high paying dream job.

That said, I completely understand that for some people, life balance will be found in seeking multiple income streams. I still blog once in a while but I do it only as a hobby and I find that has made it much more enjoyable. I also don’t expect everybody to agree with me and please bear in mind that I respect your point of view.

With regards to diversifying our incomes, we’re there already: banks, pipelines, insurance, royalties, fund co, media, and etc… Oh, and our salaries. Dividend stocks have the best of all worlds. You concentrate at becoming the best dividend investor you can be and still archieve diversified income sources. Once you’re familiar with your core holdings, it’s pretty much a passive approach.