Financial freedom is the goal of many people, myself included. Nobody wants to slave away the best years of their lives at some boring cubicle or desk job just to make ends meet.
Even though you just started your entrepreneurial journey and focusing on just your first business, which is absolutely correct.
However, as you build this business, you wouldn’t want to put all eggs in that one basket. To keep most if not all of your eggs safe, you would need some extra baskets, if you know what I mean.
In this post I will explain 3 reasons why you should have multiple streams of income (passive income, of course; it’s better to have 4 businesses than work 4 jobs) and how can it help you reach and maintain financial freedom.
1. You’ll Have Back-Up Income Streams
As I mentioned earlier, it’s good to have some sort of plan B, in case something goes down south with one of your passive income streams.
As you probably already know, businesses, be it online or brick-and-mortar, are roller coasters; you will see ups and downs. Hence, having more than one stream of passive income can make your profit more stable.
Also, in case you’ll have to sort things out with one of your flawed income streams or replace it with a new one, you will still have other streams of passive income having your back. The same applies in case you would want to sell one of your businesses.
2. Even More Earning Potential
Hence, you have higher chances of hitting financial freedom while you’re still young and energetic. The more income streams you build, the sooner you can call it a retirement.
Also, because multiplicity of income streams can bring you more profit, you can expand your means a lot faster. You can literally start chasing your wildest dreams, one at the time. Multiple streams of income can cover your expenses and liabilities a lot faster and easier.
If you want to buy a nice mansion (remember, houses are liabilities, not assets) or a nice car, your income streams will be able to cover your bills.
But remember here: grow your income streams first, before buying any luxuries. Otherwise, you’re killing your financial freedom.
3. More Opportunities to Learn Something New
Not only you will expand your means from financial point of view, by having several passive income streams you open doors to something new.
It can be a different niche, different business model, different type of income stream, or anything else. You name it.
For example, you can start your entrepreneurial venture (if you haven’t yet) with affiliate marketing and try drop shipping as another stream of income. Next you can try opening a digital marketing agency and so on.
Be open to other opportunities, especially when it involves business. This way, you will have a great entrepreneurial experience around your belt and this can also play it’s role in your pursuit for financial freedom.
Also, don’t be afraid of the unknown. Treat unknown as opportunity, because learning should be fun and it should fire you up.
Note: Some Warnings
Although I do encourage you to create additional passive income stream and it can be exciting, I still want to give you some warnings.
First, you must not overestimate yourself and your energy; burnout is one of the last things you would want to have. In fact, this is one of the reasons why many businesses fail. So here are some recommendations I can give you:
- Build your income streams one at the time, two businesses maximum. What I’m trying to say is that you can try to build your first two streams of passive income just to make sure at least one of your streams will start bringing you revenue. However, you will need some serious planning, which brings to the next point.
- To work on two businesses at the same time, you must master time management, something I’ve talked about in my previous post. You must be able to plan your days, weeks, and even months.
These were the key reasons why you should have multiple streams of income. It is important, it is exciting, but don’t push yourself too hard. First, start small and then build upon it.
Have you considered building another income stream? Are you in process of building it? Maybe you just have some questions or feedback? Please feel free to leave those in the comment section below. I will be there to help you out and will be happy to hear your stories. 🙂