Sharing Daily Discoveries About Personal Finance And Business Topics

How Many Income Sources Is Ideal?

This was kind of an interesting comment that a person brought up to me as it’s no secret that a lot of people who are financially well off don’t just rely on one thing as their only way to generate money. He then told me how he had about ten different things going on which helps him to make money everyday and that it is silly not to do as many things as possible.

That got me thinking as to how many different sources of income do you really need so that you can say to yourself that you are effectively maximizing your efforts in making money based on your lifestyle? Just to clarify, I personally would consider getting interest from a savings account as an income source as well for this type of a situation. At the same time, it has to be something that you do actively or on a consistent basis.

With that in mind, I think most people would basically have two sources of income which is basically from their regular job and then by keeping some money at the bank to earn an extra small amount. Some people then try to get a little wiser by investing their money into something safe which would make it three ways. I’d say for most it stops about there.

Now some would say that it doesn’t really matter how many sources you have but rather how much you are making in total which is the real question as it’s better to make say $1000 one way than needing three different ways to do so. Speaking for myself, even if I had one source that was generating say a billion a year I would feel kind of silly if I did not have other income sources as to me it’s not so much about how much you make but rather how much did you lose by not doing different things as well?

In general, I would probably say four is an ideal number to tell yourself that you are on the right track in terms of exploring your options. Basically you have your main line of work that you do for the most part of your day, a method to generate income when your money is idle, finding a way to invest the money that you already have to make more and a small task/activity on the side which also generates money for you. Of course in the end it’s about living comfortably and I’d say this can help in doing so as it can make you more confident about generating an income should a situation arise where one source is no longer a viable option.

2 Comments to How Many Income Sources Is Ideal?

  • For my wife and I, we have the following:

    – Full-time day job
    – On-call evening/weekend job
    – 3-4 room renters in our home
    – Interest in our savings account
    – Mystery shopping (pays for oil changes, free food, etc)

    One’s we’re planning on getting:

    – Starting a medical billing business (I have 3 & 1/2 yrs experience in the field).
    – 401K (we’re getting rid of our debt right now)

    We survived through 6 months recently of limited income flow and had to become creative. One day though, I had 5 jobs (which I promptly let go of 2 of them). At this time, my day job is only to help us get out of debt.

    Sick of Debt 6/18/2007 2:02 pm
  • Wow, that seems like a lot and is almost confusing in some way as you are doing things such as having renters in your house which should provide a good chunk of income I’m guessing.

    You kind of brought up an interesting point about having 5 jobs at once before which I think is an important thing to keep in mind for many. Basically, it can be counter productive if what you are doing leaves you no room to breathe in terms of your time and you could be trapping yourself in a cycle.

    Speaking for myself here, I would think that it would be healthier and more productive in that situation to figure out a way to cut back spendings as oppose to finding more ways that take up a lot of your time to feed an old routine that is just draining you out. With that extra time, you can research or work on ways in exploring new things such as how you are interested in starting a medical business.

    Sounds like you have everything planned out though with a vision on how to get there which is the key.

    Alan Yu 6/19/2007 10:22 am

Leave a Comment

Your email address will not be published. Required fields are marked *

Menu Title