Your primary source of income is what you earn on your day job. If you are permanently employed, you will have a 9-to-5 job that is the main source of cash-flow for your household. With rising costs of housing, healthcare, and increasing debt, a single source of income is no longer sufficient to live comfortably.
Most financial advisors emphasize the importance of having a secondary or even tertiary form of income. A second line of income not only supplements your existing income, but would also protect you against job loss and cash emergencies. If you don’t already have more than one stream of income, here are some suggestions:
Freelance at Home
This is possibly the most popular way to get a secondary source of income. In the gig economy, freelancing on a part-time basis can be quite lucrative. Don’t expect to make a ton of money, however. Individual freelancing jobs pay very little. You would have to take on several jobs for it to be considered supplemental income.
As you become more experienced in your freelancing job, you will be able to charge higher. You may even attract permanent clients willing to pay you on a reasonably regular basis. At this point, you would have a solid secondary line of income to fall back on quickly in case you lose your main job.
Become a Day Trader
Most of us don’t have time to take on a second job given the responsibilities at home and work. In that case, you should consider becoming a day trader. Stock brokering is a popular way of investing for both experienced and novice investors. While the stock market can be volatile and the investments risky, payoffs can be huge.
When you become an experienced day trader, you will know how to manage risk without losing out on profits. Stock trading is not gambling; you are not making blind bets. There are new and emerging sectors, such as marijuana stocks recently decriminalized in multiple regions, which can prove to be highly lucrative to newcomer brokers.
Rent Out a Part of Your Home
Renting is one of the best ways to earn passive income. You don’t have to do anything except vet the tenants and occasionally inspect the property. If you live in a house, consider renting out a room or the basement to reliably earn extra income each month. You can re-invest the money in property to become a proper real-estate investor.
If you have considerable amounts of savings in the bank, consider obtaining a certificate of deposit for the money. CDs are less risky than other forms of investments. You can earn more in interest monthly and annually with CDs. You will earn with a CD each month, though this money will not be readily available to you. When the CD expires, you would definitely be richer.
Supplementing your primary source of income is not just a way to have more cash to spend each month. Use this extra money to build true wealth by re-investing and saving.