Everyone wants a little more money, whether it’s to pay the bills or take a trip overseas. Creating additional streams of income is supposed to make life easier, but many people who embark on a new moneymaking venture find that things are harder than expected.
Additional streams of income require work, but if you play your cards right, things won’t be any more difficult than they need to be. Be sure you aren’t making any mistakes that will hinder your progress and success.
1. Wasting time on ineffective streams
If it’s taking you a long time or a strenuous amount of tinkering to figure out how to make an additional income stream work for you, it’s probably the wrong method for you. If you’re making less than you would make at a low paying part time job, but putting in twice the amount of effort, it’s time to pass up that challenge for a real opportunity.
Before you pursue an additional income stream, do as much research as you possibly can. This will prevent you from trying to work additional ineffective streams in the future. If it feels similar to something that gave you trouble, don’t waste time giving it another go. Your struggles should be learning opportunities that prevent you from stepping into the same old traps.
2. Stretching themselves too thin
If you’re working too hard for too long, you’ll succumb to burnout. When you’re burned out, you can’t devote your attention to anything. This will lead to long bouts of falling behind and catching up, hindering your progress towards financial freedom. Balance is necessary to achieve success.
Some people love additional income streams so much that they dabble in everything. This is the point at which multiple additional income streams become a full time career in and of themselves. This is simply not feasible. If your additional income streams are nearly enough to live off of, it’s important to make a choice. Either quit your career and focus on your alternative streams of income, or cut back on your streams.
3. Starting with streams that are hard to manage
Some additional income streams will be difficult for beginners to manage, though their potential for a high yield makes them seem enticing. You can always move into more challenging ventures later on – don’t get in over your head before you know what you’re doing.
Make sure you have a good idea of your abilities and skills before you pursue an additional income stream. Some things, like renting out unused space, don’t require much effort or management. That’s what makes them perfect for beginners. Complicated methods like highly niche affiliate marketing blogs take a lot of time, knowledge of search engine optimisation, and a lot of marketing copy. Unless you already know how to do those things, you might not want to hit the ground running.
4. Trying to make money in a highly competitive way
Some people utilise multilevel marketing programs or independent sales representative positions to generate an additional stream of income. Many people swear that they’ve been wildly successful in those ventures, but those people are in the minority. These systems rarely work for the average person, mostly due to the level of competition.
Since you aren’t the only one selling what you’re selling, you’re competing with your friends and neighbours who are selling the same products. You’ll likely need to purchase a certain amount of your own inventory and figure out where to store it, costing you money.
Many multilevel marketing companies and independent sales rep positions encourage people to recruit others to sell for the brand, offering them a perk or a percentage of the income they fetch from their recruits. Since the recruits are often people they know, their recruits wind up cutting into their sales.
Making money this way has a tendency to be brutally competitive, with many people working overtime and spending more than they actually make. Exercise extreme caution around highly competitive income streams – especially if they cost money to join.
5. Not knowing how much income you need
If you have a special reason for pursuing an additional income stream, that reason needs to be well defined. How much are you looking to make? How much time do you have to make that money? Is the money necessary, or is it for a leisure fund? Once you’ve answered the questions, you can determine how much money you have to make for a stream to be worthwhile.
If you don’t know what you need, you won’t know if your moneymaking method is yielding too little cash. That’s a sign that you need to make some changes. If you’re exceeding your expectations, that’s wonderful news. You won’t know where you stand until you do the maths.
No matter how you decide to generate additional income, it’s important to research as much as you possibly can. You’ll gain knowledge through actual experience, but nothing will prevent mistakes more than preliminary investigation.
Alana Downer is a 30-something financial advisor from the sunny city of Sydney. She is also a blogger, who often focuses on topics related to growing a successful business, reaching financial independence and (occasionally) travelling.
Privately, a huge fan of coffee and swimming (not necessarily at the same time).