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In Part 1 I briefly touched on the importance of having more than one source of income to increase security, this not necessarily being a passive income. Below are a few options you might want to look at.
Having more than one different job at a time.
In the present days of flexible employment and fluid careers (rather than the strict career ladder of the time of our parents) it is much easier to pursue multiple interests and passions.
You might love your job as a marketing executive but are also very fond of animals and love being outside. Could you work as a marketeer for 4 days a week and a dog walker for one?
What passions / hobbies do you have that could give you some income? You can start small and build up as you go. Starting in your spare time is a good way to 'test the waters', before you decide to ask for a 4-day week.
Pursuing more than one career over a course of a lifetime
Re-training and acquiring new skills is usually involved, which in turn makes a person more resilient to a downturn in a specific industry. An engineer becoming a teacher perhaps? I know of an IT consultant who decided a few years ago to pursue his passion for plants and opened a garden design business.
There are plenty of jobs that are obviously highly seasonal and some that are seasonal but it’s not obvious at first sight.
Traditionally when people are talking about seasonal work they have in mind agriculture in the summer, retail and hospitality in the run up to Christmas or holiday reps on the beach in the summer and on the slopes in the winter.
What are the not-so-obvious options? Is your job affected by seasonality? Is there a chance to negotiate with your employer to work let’s say 9 months a year in your ‘main’ job and then do something else for the other 3 months? Or if your finances are structured that way, take a time off for the 3 months?
Pension (or other passive income) topped up with part time work.
More and more people these days do not want to retire fully when the time comes but equally they don’t want to work full time either – for many this will be around the age 67. Is there a half-way house?
Can we access our pensions before the state retiring age, at a reduced rate and top it up with part time work? We’ll have time to enjoy ourselves while still healthy and keep contributing by working. This arrangement is good for our mental health too, especially if we enjoy what we do – it gives us a sense of usefulness, helps keep up our social connections and gives a structure to our week
Why do this?
The advantages are numerous:
What about the drawbacks?
A portfolio career is not for everyone. There are many points that need to be considered before you make big leaps:
Now that you’ve spent more time at home, away from a normal routine, are you thinking of modifying the way you earn money? There are as many possible combinations as there are people. The earlier you start thinking about this the more options you will have. I’m here to help you do just that. Contact me on email@example.com to book a free 30 min exploratory call.
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Personal finances – are you better or worse off right now?
It is safe to say that there are very few people whose finances have not been affected by COVID-19.
People that carried on working from home or where the employer topped up government payments may find themselves financially better off - by not going out, not commuting, not buying lunches...
On the other hand those that lost their jobs or who’s businesses were forced to shut are encountering losses and are likely to be worried about the future.
What about you? Where do you fall? Is this the first time in your life when you are saving money? Paying off the credit card bill? Or have your finances been squeezed to the point when you can’t sleep at night?... Do you even know?
Then there is another angle to explore. Some people (re)discovered that they like spending more time with their families, don’t miss the commute and are wondering if there is something they could do to bring more balance to their lives. Does this ring true with you too? How can you restructure your finances (income) so that you don’t have to go back to the office full time? And how to make your income more safe?
Regardless of which camp you’re in, the dependency on the one source of income may have taken you by surprise. What can be done now to improve the situation and make you more resilient in future?
More than one source.
When it comes to income protection, the established wisdom is diversification. This may sound complicated but it simply means ‘not all eggs in one basket’. Normally this term is used when talking about passive, investment income - the type that most of us aim for as we get older and move towards retirement. It will include income from pensions, royalties, rental property, stocks & shares. The term ‘passive’ describes how it works – you do nothing and still get paid.
However….. as a society we can’t live solely off passive income all at the same time. If we tried, nothing would be produced and nothing would be done. We’ll have money but nothing to buy and no-one to sell it to us. There has to be another way.
How about having a variety of ‘active’ income – income from more than one employment, from a hobby that you have turned into a small earner, from regular de-cluttering? With bits of passive income thrown in. What would your life look like?
As with many walks of life, the answer to the best combination will vary from one person to another. Someone’s ideal situation is another person’s hell. I will explore the various mixes of incomes in Part 2 of the series. In the meantime, if you have any questions or comments, drop me a line on firstname.lastname@example.org