For many people, income is earned by trading lot of time and effort in exchange for monetary compensation. Incremental income is something else entirely: earning money with little or no time and effort on your part. Finding ways to generate incremental income can help build real wealth, giving you more financial independence and flexibility to choose how you spend your time and where you want to live.
People go after incremental income for a variety of reasons. Some people must do it out of necessity, as a way to make ends meet. Others get involved with projects — such as selling e-books or creating educational materials — as a way to make money from a hobby or passion. Still others create incremental income streams as part of a long-term strategy to build an abundance of wealth for themselves and their heirs.
Whatever the driving forces, we live in times when creating incremental income makes sense for just about everyone. If a worldwide pandemic has taught us nothing else, it has shown us that life can change drastically in the blink of an eye. Today’s solid financial plan and secure job may be up in the air tomorrow.
The following resource, by Renovo Financial, makes an excellent starting point for anyone looking for ways to create, maintain or expand financial independence. These strategies have been proven successful, and can be sustained over months, years or decades — whatever your financial strategy’s timeline happens to be.
In addition to these wealth building ideas, the resource contains five important questions to consider as you decide which idea, or ideas, to put into action. Some people jump to the conclusion that incremental income is easy money. True, incremental income streams are “easy” in the sense that they do not involve extensive hours of labor to earn. Nevertheless, successful incremental income strategies involve varying levels of experience, expertise, preparation and oversight. In addition, different incremental income strategies carry various levels of risk and require varying amounts of capital to get started.
The bottom line is to tread cautiously and be thorough in your exploration of incremental income options. For instance, when it comes to risk. It’s far riskier to invest $5,000 in a portfolio of growth stocks than to rent your lawnmower to your neighbors. The payoff on the first investment have the potential to be much bigger, of course — but you’ll have to wait longer to get it, and there is always the possibility that you could lose money. Between these extremes (when considering risk) are such things as, say, a $2,500 investment in dividend stocks or becoming a tutor or coach.
Which is the right option for you? We can’t give you the answer, but we think you are almost sure to find it in the resource. To learn more, please continue reading.
This infographic was created by Renovo Financial, a property investment firm