👛 Why One Income Is Not Enough Anymore

Here's something nobody tells you when you get your first job: a salary is not financial stability enough.

I have three sources of income right now — my main job, a small business, and investment returns. But for the first few years of working, I had one. And the truth is, one income means one point of failure. This week let's talk about why that's a problem and what to actually do about it.

In today’s edition, we’ll go over:

• Why you need more than 1 income

• The types of income you can build

• How to find right one/s for you

TLDR;

The Bottom Line

A salary feels stable until it isn't. The fix is diversifying your income the same way you'd diversify investments. That means building a mix of active income like freelance work, passive income like investments and cooperatives, and eventually something you own like a small business. You don't need all of them at once. You just need to stop depending on one.

The content

One Income Is Just One Decision Away From Zero

We talk a lot about diversification in investing. Don't put all your eggs in one basket. Spread your money across different assets so that when one drops, the others hold you up.

Your income works exactly the same way. 

Regardless of how big your salary is, relying on your full-time job means one company or one manager, stands between you and everything you've built. And if you get fired, your bills and your savings get shaky at the same time. It happens to people who are good at their jobs, who've been loyal for years, who never saw it coming.

The scary part is how normal it feels to live this way, because everyone around you is doing it too.

The Types of Income You Can Build

Not all side income looks the same and not all of it requires the same time or energy. Here's how to think about it:

• Main job is your salary. It's your foundation and there's nothing wrong with that. The problem is when it's the only thing keeping your finances together.

• Part-time job or freelance work is extra money you earn outside your main job. You're still trading time for money, but it's coming from a different source. If your main job disappears tomorrow, this one keeps going.

• Commission-based work means you earn a cut every time you sell something. It could be an insurance plan, a property, a product. No sales, no income; but no ceiling either. This works best as a complement to your main job (not a replacement).

• Investments is your money making more money while you're not doing anything. Stocks, UITFs, MP2, REITs. It feels small at the start but this is the one that slowly becomes your biggest earner over time if you start early enough.

• Small business is something you own and run. A pop-up stall, an online shop, a service you offer under your own name. More work upfront, but you keep everything it earns.

• Cooperatives and sinking funds are the most slept-on option. You pool money with a group, it earns interest, and you get your share of the returns. Some cooperatives pay 8 to 12% annually. 

Actionable Tips for You

How to Find the Right One/s for You

You don't need all of these. You need the right combination for where you are right now.

Start by asking three questions:

• How much time do I actually have outside my main job? 

• What skills do I have that someone would pay for? 

• How much capital, if any, can I put to work?

If you have time but no capital, freelance or part-time work is your starting point. If you have capital but limited time, investments and cooperatives make more sense. If you have both, a small business or commission-based hustle starts to open up.

The goal isn't to do everything. It's to not depend on one thing.

Stuff Worth Sharing

The Link Lowdown

• Need side hustle ideas? Check our past 2 articles

  • Side Hustles Part 1

  • Side Hustles Part 2