(ed. Backdated post to January 31st. Written February 2nd.)
Have you read yesterday’s post?
At that time, though, I developed a plan to create a number of streams of income from a number of sources iotending that it become a regular and sizeable amount of income which would allow me to spend time on much profitable and rewarding work rather than just working the typical salt-mine routine that most people follow. Perhaps it was the vulnerability of some kinds of income that made me think that spreading the risk would make it worthwhile to pursue each one.
I decided that if I could, I’d try to create ten sources of income that would leave me less vulnerable to any problems. Of course, it would be great if I could generate income in equal portions and that it would be a steady income. In reality, that turned out to be impossible. Life just doesn’t work that way. The other problem is that it would require a lot of time to complete the plan, but without making a start, I wouldn’t be any closer to the end.
So I set my goal: To generate one month’s salary (in NT$) at about US$1500 from about ten different sources of income as a minimum. I’m going to list the ten different sources (some passive/some active) and identify some of them and how they are doing in relation to my original goal. Currently, I’m approaching a longer term average of about 30% of the total. You’ll see why.
The Ten Sources of Income
The following list of ten sources includes estimates and amounts all in US$ and they are MONTHLY amounts, as well as our own personal feelings about them.
1. Bank Interest: I had a lot of cash saved for my emergency fund stashed away in demand accounts (with interest rates of about 0.4%). So I decided to maximize that return to create the first of ten sources. It still isn’t the biggest, but it is the steadiest. On average it now adds about $25 to my monthly income.
2. Dividend Income: I had read a lot about dividend investing but had up until 2005 looked only at growth stocks and tech stocks (neither of which did well for me). So I switched to dividend paying stocks and have benefited much more than ever. Typically these are generating about $90.
3. Rental Income: My wife and I have talked about renting out our current apartment to generate additional income. But we encountered three problems that have so far prevented us from making any success on this: 1. we like it here and we don’t want to move yet; 2. we still wouldn’t make any residual profit from renting our house out without paying off part of the mortgage principal (something we don’t have enough cash yet to do); and 3. we can’t decide where we’d like to live other than here. Contribution $0. Potential contribution estimated at $100.
4. Private or Part-Time Work: We’ve both thought of switching our current full-time jobs to part-time jobs, working only a few hours a week as tutors. Naturally, we wouldn’t make much gross income but we might enjoy working MUCH more. I had to take an estimate and say both of us would work only 4 hours a week, and we’d earn about $125 per week or about $500 per month from two jobs. Current $0.
5. Online Income: Since I’m a blogger, and I enjoy the experience very much, (as you can hopefull tell) I’d be happy to continue earning money online in a number of ways. My primary blog (this one) earns money from advertising, hosting, and support. While each of these doesn’t add up to much, together and over a year, they do account for about $250 per month. NOW. I’m planning to extend the amount of blogs, services, and options I have so this amount could rise. Potential Income: $300~$30,000.
6. Personal Business: We’ve been business owners for quite a while, and right now we’re also 100% full-time workers in our business (in essence, we’ve bought ourselves a job for the time being). Of course, as owners we occasionally reward ourselves for our hard work and commitment to the business (way and above the regular employees’ schedule!) with owners type benefits. Last year that was a minimal amount: $60 each. This has HUGE potential as passive income source, and we could easily double that amount should we choose. But this remains a potential increase. Right now, it’s pitiful.
7. Consulting: Steve, my good friend from AgentsChat dot com, suggested recently that since my wife and I have been in business nearly 8 years (with varying degrees of success) we might find a ready market for our ‘advice’ or consulting experience: How to Set Up or Manage a Language School. We’d never thought of that as a potential source, but here in Taiwan where people are always looking for an edge, we’d have a market of some unknown potential. Current: $0. This could be a separate business for us, if we had the time.
8. Affiliate Marketing: I’ve not really had much success yet, despite having joined Commission Junction several times. This is unknown potential and depends on my own personal skills. Current $0. Potential $???. We’ve also considered commission sales, but we felt that we didn’t have the skills or motivation to sell Amway products yet. Worse, to do it successfully would need quite a commitment. It might be worth it to see how the entire system works. Current $0. Potential: $0 (until we decide to do it).
9. Lending Money: This is a new option and one for those looking to really diversify their income portfolio. There are many ways to lend: privately (to friends and people you know – loans are made on a personal basis), through agents, and now through organisations like Zopa.com. I’ve currently got a loan extended to a private client that produces about $25.60 per month in residual income. For those of you who can, lending through Zopa or one of the online lending companies (there are several now) could be a good way to add to your portfolio. Unfortunately, due to my residence, this is not something I can do right now.
10. Develop a niche business: GeniusTypes website describes how the author took a lowly business (candy machines) and was able to produce a regular income from the machines he bought with very little additional work. He only had to tend to the machines a few times a month, stock them, repair them when necessary and purchase supplies. It’s well worth reading his post on this. We’ve been looking at ways to make such niche income ourselves, but so far we’ve not really had the time to experiment with this. Contribution $0. Potential $???.
Build your BS detector: Beware the fraud, cons and sinks
There are a huge number of fakers out there: ways that entice people to ‘make money and get rich in three easy steps’. Beware, beware, beware: That’s my advice. You’ll know a deal from a steal (steal your money, that is) easily once you develop your BS detector. I didn’t have one before, but it’s getting more effective now. Here’s what happened to me when I didn’t have one:
At that time, I was just experimenting with income, and I had come across StudioTraffic of which I was a member for a few months before the whole thing came crashing down. For those of you who don’t know, StudioTraffic was a get-paid autosurf type scheme where members would earn money by buying a membership and earning cash by surfing a number of websites on their surf-TV type system daily. It turned out to be a huge waste of time and money for most people, much like Agloco was just recently, because it was a HUGE ponzi scheme.
And the results…
I’ve managed to create a total of about 36% of my initial target. We’ve held back in some areas, not had time to push in other areas, and are unfamiliar with yet others, but with a little more effort, I could start to see results pushing much closer to my own personal target of $1500 from ten diversified sources. In fact, $1500 may be too unambitious. What do you say?