10 Easy Ways to Diversify Your Income

As this economy tightens our belts with inflation, you may wonder how you can make your money go farther, or be able to save up for retirement. The key to success is approaching these forms of passive income as a learning process and doing as many of them as you can. You may need to set up a goal and list steps or a project management system to manage them in your free time. 

1. Diversify Investments

Remember that having a lot of investments does not equal diverse investments. It means you need to have one of each: Stocks, Bonds, Real Estate, Investment Accounts, Cash on Hand, Social Security, Retirement Account, 401k and IRA, Pension, Health Insurance, Life Insurance, Savings and CD’s.

2. Create a Passive Income

While to some this suggestion means joining an MLM company and delving into network marketing, for others it means turning a hobby into an income stream. Consider keeping a monetized blog, writing an ebook, or contributing to a paying magazine, online periodical, niche blog, or niche website.

3. Find/Create a Part Time Job

Find simple local jobs you can easily fit around your schedule and use to fund those investments in section one. Consider turning a hobby into a part time job or using your knowledge to teach others. Other ideas may include being creative and figuring our what your town or neighborhood needs and filling it.

4. Go Freelance

Freelancing means you sell photography, articles, or other media. This could mean selling stock photos to reseller sites or posting articles to writing sites for sale.

5. Lending

Lending to friends and family is not always a wise idea. Consider setting your sites in signing contracts with companies who lend to small business owners, women business owners, and women in other countries. The payout in a month or a year can be double or more of the original investment.

6. Grow Food

While you may need to file for a business license or permits, you can consider putting in a patio garden or small backyard garden, or even fruit trees, and selling the produce at flea markets and farmers markets on the weekends. At the very lease, you can reduce and almost eliminate your grocery budget.

7. Reallocate Existing Income

While this may not seem like an income source, reallocating funds from one part of your budget and making serious budget cuts can create what feels like more income. Consider cutting back entertainment and eating out, and then, finding ways to lower your utility or housing costs.

8. Consider Taking on an At-Home-Job 

Work-at-home careers often let you set your own schedule and offer positions for as few as five hours per week. Types of positions include selling airline tickets and providing customer service for products already sold, brand name computers, for example.

9. Secret Shopping and Product Reviews

Secret shopping asks you to go and purchase certain items at stores or restaurants and then rating the product and the service experienced. Product reviews includes products shipping to your home, after you try them you fill out a survey.

10. Tutoring and Consultations

Consider signing up for tutoring sites or consultation sites and putting your skills to use teaching others. You get paid per meeting and are able to pass on valuable knowledge in your area of expertise, without much further effort on your behalf.

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10 thoughts on “10 Easy Ways to Diversify Your Income

  1. I would not consider the examples you list in #2 to be examples of passive income. Each example takes a lot of active work. True, if you are doing these things anyway, you might as well get some money out of them. But I consider passive income to be something like the dividends you get from various stock funds or interest from CDs.

  2. How you spend your spare time relaxing could turn into a business, writes Jenny McCune at Bankrate. She gives six steps to consider in arriving at a decision on whether to turn your means of relaxation into an income stream.

  3. Be aware, however, when your hobby produces income, you owe tax on it.You can reduce your taxable hobby income by deducting your hobby expenses, but this tax break is limited. You can only deduct expenses up to the amount of money you make on the hobby. Even then, hobby expenses, along with other miscellaneous expenses you itemize on Schedule A , must come to more than 2 percent of your adjusted gross income before you can deduct them.If you find you are regularly making money from your hobby, it might be to your tax advantage to turn the sideline into a business.It’s not as difficult as you might think. If you operate as a sole proprietor, you report the income on your 1040 tax return and you have more options when it comes to deducting your expenses. The Internal Revenue Service defines a hobby as an activity you pursue without expecting to make a taxable profit. Basically, you do it because you like it, regardless of the cost.But if you demonstrate that you are involved in an activity with the expectation of making money on it, the IRS will consider it a business . As such, you’ll be able to deduct expenses directly from your income. You even can deduct overall business losses in the years you don’t turn a profit.You must, however, make the right moves to convince the IRS that your sideline is a legitimate business. The IRS uses two tests in determining whether your activity is a business rather than a hobby.First, the profit test demands that you show you earned money on the activity in three out of five years.If you can’t meet the profit test, you get another chance to convince the IRS that you are running a business by passing the factors-and-circumstance test. Here, the tax agency takes a subjective, individualized look at your pursuit.

  4. Putting money in a bank is considered a loan to the bank, what we mean is becoming a lender. Lending to friends and family is not always a wise idea, if you have a business savvy colleague, consider setting your sites in signing contracts with companies who lend to small business owners, women business owners, and women in other countries. The payout in a month or a year can be double or more of the original investment.

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