No matter how hard our hustle there is always a gap between how we imagine life and reality. This persists to be a common feeling in all working individuals earning insufficient income. That one expensive trip you wanted to take, or a dream car you wanted to buy or a luxury house you wanted to live in, are just a few situations out of a million other, that would need to invest and earn Alternative Income.
Having an alternate source of income which was once just a smart move of rich people, now has become a necessity of every individual to sustain in this uncertain world. Depending on one job for making a living is considered a huge risk in these times of unemployment and overpopulation.
Having at least one additional source of income will impact your finances greatly and will be a great relief from the stress of paying bills from one paycheck. For a peaceful after retirement life or just to have a back up in this highly uncertain life, the second source of revenue will be a savior.
Reasons one should have an Alternate Income
Alternate income comes with a sense of financial freedom that everybody needs. Dependence on a single source is always at a risk of uncertainty, an alternate source is always beneficial in the long run and will lead to you working less eventually.
Here are just a few reasons discussing why everyone should have a backup.
Life is full of uncertainty. Pandemics like Coronavirus, recessions and many other situations can land us in critical situations. Having a steady passive income
source can help in mitigating risks like economic slowdowns or laying off’s. With the support of passive income, you can at least lead a less risky life among all the uncertainty.
With exploding population and recession
on its way employment is always at the edge of a knife. During the Great recession of 2008, the unemployment rate reached a peak of 10.2% leaving some millions jobless. No job is ever safe and this fact makes it inevitable that everybody needs an alternate source of income to tackle the difficult times.
Raising Cost of Living
If there’s one that shooting higher than rockets, it is cost of living every year. Even though the prices of daily necessities increase on a daily basis income of the people won’t. So, having a secondary source of income will help you sustain inflation.
Diversifying Income Sources
Never depend on one salary this will only cause mental burden and financial crisis. Paying all the bills from one single paycheck can be a little too risky for anyone. Maintain multiple types of revenue sources to help you to build a sound financial portfolio.
Fulfilling Personal Objectives
Alternate source income is a great way for meeting your objectives involving financial support. Having a backup source of revenue will help you in reaching your goals faster and efficiently.
The major concern of anyone retiring is financial security. When you have a second source of income
it will help you in building a solid corpus for a happy after retirement.
Ways To Earn Alternative Income
Real estate is an age-old investment vehicle that proved to be one of the best revenue sources. It is one of the most reliable sources that generate stable income and produces high returns in the long term.
Real estate offers diverse investment options, like Rental Properties, commercial properties, REITs, private equity funds.
Rental properties generate a regular passive income and barely involves any effort.
Commercial real estate
is slightly riskier, but in the long term provides high returns and high capital appreciation.
REITs are another source of secondary revenue, which allows one to buy shares. REITs lease out their spaces and collect rents on the properties, then distributes that income as dividends to their company shareholders.
Private equity funds are an online crowdfunding platform option where the investors directly invest in a private company. Investment in this company is backed up by physical real estate properties. Private equity funds are the new source of secondary income that is growing at a faster pace You can also invest in multiple real estate sources at the same time to diversify your portfolio.
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Bonds are debt instruments used for raising capital and are a source of alternate earnings. Based on the bond term and the interest rate per annum the investor generated fixed returns every year or twice a year. Just like other investment vehicles, investment in debenture bonds is also dependent on market interest rates. Bonds are of different types of Municipal bonds, Public bonds, Private bonds, Tax-free bonds, and zero bonds, based on the benefits they offer. Investment in bonds helps in generating a stable cash flow along with capital appreciation.
Dividend investment is one of the steadiest sources of passive returns, generating high returns. Dividend investment involves purchasing the stocks in a Well-established company that gives out dividends. These companies pay out dividends at regular intervals to their shareholders to show their loyalty to their shareholders. This returns generated in the form of dividends over a long period will help you build a sound financial portfolio. Dividend income follows the strategy of compound gains, where earnings during the long term grow enormously.
A mutual fund is a financial vehicle that pools money collected from numerous investors who have a common objective of earning good returns. This money pooled is invested in securities like stocks, bonds, money market instruments
, and other assets and are managed by professional money managers, to produce revenue for the investors. If the fund is invested in bonds, you earn proceeds in the interest, if the fund is invested in real estate, you’ll earn from rents or property appreciation. Mutual funds though are little risky serve as a good source of alternate income when considered for the long term. Mutual funds are organized for nearly every type of investing objective.
Earning extra revenue
from an alternate source will greatly change your life. Your extra proceeds can at least help lessen the risk of unexpected expenses and uncertainty. There are plenty of important reasons for creating an alternate livelihood stream like, to decrease the financial risk of having to depend only on one main source for salary. Even though not possible in a month or so, the little amount of alternate income you earn every month can really help in beefing up your savings in the long run.
Alternative Income FAQs:
How do you increase income streams?
Investing your money, starting a side hustle or letting out our residential for rent you can add extra streams of income to your portfolio. Investing in sources that generate stable passive income assures a steady stream of income.
How should you invest in Passive income?
Real Estate, Bonds, Dividend instruments and even the mutual fund investments generate passive income. Real Estate properties generate rental income.
Why is extra income important?
Having an extra source of income gives financial freedom. Depending on one income for making a living is always at risk. Extra income also helps in reaching your goals that involve finance, faster.
What is Alternative income?
Alternative income is the extra income that you make through investing, depositing etc.,. Any amount of money in addition to the income from the full time job you do, is called Alternative income.