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Diversity In Income: The Key To Sleeping Better At Night

having multiple streams of incomeWe all know how important diversity is in investments, but I also believe having diversity in income is just as necessary. Anyone who has ever lost a job would probably agree. While having an emergency fund can save people from disaster, having two or more steams of income could mean the difference between insomnia, stress, and having to take the first thing that comes along vs being able to take your time and find a better or more rewarding job or career. For me, diversity in income is the key to sleeping better at night.

We Want You To Work, We Just Can’t Pay You

I recently had some time to ponder the concept of diversity in income after one of my employers didn’t pay me for four months! I have a contract position with the federal government at an Indian Health Service clinic. Federal employees tend to have very stable jobs and regular benefits, but as a contractor, all bets are off.

I submit a monthly invoice and generally get paid within two weeks, but it’s not uncommon for the payment to take a month. I’m used to that. However, some sort of glitch that no one can explain happened last fall, and I stopped getting paid.

The Difference Between Fear And Inconvenience

Since my government money never comes at the same time, we generally don’t use it for regular monthly expenses. It’s the money we invest and save for tax estimates. While it sucked not to have that money when I was used to having it, it really wasn’t a big deal as far as paying the mortgage or buying groceries. If we have to wait a few months to put money into our HSA, it isn’t a big problem.

Now, if this had been my only job, I would have been sweating bullets. Even with a six month emergency fund, going four months with no idea of when payment might come would create some stress about how to pay our bills. If I suddenly lost this job, not having other income to fall back on would make me downright frightened.

How To Get Multiple Streams Of Income

It would be nice to have a little genie who granted multiple income producing streams with the blink of an eye and some pixie dust, but realistically, most of us have to hustle to diversify our income. I was looking through our W2’s and 1099’s last week for tax organization and I was really proud that between Jim and I, we have 9 sources of income that make up our take home pay. How on earth did we get that many people to pay us?


We’ve both put in years of networking with and studying other professionals in our areas of expertise. No, I can’t say it was always fun to spend a weekend at a seminar or host an after hours networking event. We often spent money to do things we didn’t particularly enjoy, but it has paid off in spades.

If all my optometry jobs dried up tomorrow, I can’t guarantee I would be able to replace them right away, but I have several contacts who could probably give me a job or refer me to someone who needs help. Once you establish yourself as dependable and people are aware of your skills and talents, it is much easier to find work. If no one knows you or has any idea what you do, why would they hire you?

Expanding Your Skill Set

Jim has worked especially hard over the past few years to further his skill set. Even though his job position was eliminated last year, he had no trouble transitioning into a different and better paying job. Again, it was not fun for him to volunteer for tons of committees or work full time while getting a new degree, but that’s what you have to do to get noticed.

It doesn’t matter whether you further skills in a similar career path or do something totally different. If you can be good at something people will pay you to do, whether it’s corporate consulting or walking dogs, that’s huge!

Invest The Profits

An important goal of having multiple streams of income is to make more money than you need every month. Then, make sure to put that money to good use. This really clicked for us while we were paying off debt. If we could hustle that hard to pay off what we owed, there really was no limit on what we could do next.

Since then, we’ve used a chunk of our income to invest in real estate. While last year was not great for overall rental income, in the future, we expect our rental properties to pay our living expenses. We are also investing in low cost index funds at Betterment. It will be a while before this provides a significant stream of income through interest and dividends, but if you never start, you won’t get there.

Years ago, I was more than happy with a single job, but now I see how depending on one income for life doesn’t get me to the place I want to be. Is it possible that all of our income streams could turn into a trickle at the same time? Sure. Is it likely? No.

If all goes as planned, our diversity in income will allow us to retire early. If life doesn’t follow the path we hope, I will still probably sleep pretty well at night because our eggs are in multiple baskets. Even if building diversity in income takes a while, I encourage everyone looking for safety and prosperity to give it a try.

How many ways did you get paid this year? What skills are you working on to increase your income and security?

Image: Freedigitalphotos.net/chrisroll


About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. This is a great point, and I love that your husband was learning new skills, too. That is so important, and something we learned through experience as well. Because he learned new skills, my husband doubled his salary in 5 years, and had some lucrative side hustles that paid down our student loans. I need to find a way to diversify my income, too.

  2. Nice work on the diversity Kim! We started going through our taxes this past weekend and I seem to remember 8-10 W-2’s & 1099’s. I loved seeing that as it’s an end result of much of what you and Jim have been doing. We have a a specific client that can take 3-4 months at a time to pay us and that’s one of the main reasons why we have as much diversity as we can.

    • Nice work to you guys too. It sucks to wait so long to get paid, but it’s really more of an inconvenience than a fear if you have other ways to cover it.

  3. I actually had four streams of income this year, and I plan to continue to increase my income. Five years ago while I was working for the investment bank, I saw the financial drawbacks of having only one source of income (your employer). I didn’t want become like some of my co-workers, middle aged, out of work and with little job opportunities. It’s one of the many reasons why I decided to start my own company. I would rather have 50 bosses (i.e. my clients) than one, and thankfully since starting my company, I have been able to explore other income streams.

    • I guess the beauty of having multiple bosses is that you don’t have time to dwell on the negatives of any one person. I’ve seen too many middle aged people out of work with no ability to change job tracts. That’s not a road I’d like to take either.

  4. Oh so many! lol! That’s why organizing my taxes is such a joy. But if I did not have multiple streams of income I’d be in real trouble. This year I’m working on camera skills, more volleyball coaching, and some passive income streams…the last one of those being the toughest because of all the work up front. Also working on a crowdfunding campaign for videos and hope some of that can be used to pay myself…even if it’s just a little bit!

  5. Diversifying my income has reduced my stress and opened up my options like nothing else. I’m so grateful!

  6. This is awesome and I agree that having all those sources of income can help anyone feel secure. Investing in paper assets aka Stocks is a good starting point because it has a low cost of entry, and real estate is another as you mentioned.

    • Yes, real estate takes a while to work your way into unless you are just looking to buy into a REIT. It’s not for everyone, but we’ve been really pleased so far.

  7. 4 months?!? Unreal. I agree that multiple streams of income is important. The more diverse (and consistent) the streams of income, the better. I lost a freelance writing gig that was an awesome consistent, diversified income stream the past year. The website moved in a different marketing/pr direction and no longer was allocating $ to the blog. It stung but it was nice that the income stream was only one of a number of income streams for me. I by no way have a perfect diversification of income streams, but it’s something that I’m mindful of and work towards.

  8. I agree multiple streams of income are important, especially these days because being dependent on one stream can be really risky, unfortunately. Most of my streams of income, outside of our jobs or business, come from various investment earnings. It’s important that people consider the diversification of their investment vehicles too. Most know to not put all their eggs in one basket as far as choosing one investment but many put all their money in a 401k or an IRA, etc.

    • I guess one basket is better than no baskets, but I am no longer happy with one anything as far as income or investments.

  9. When Rick was laid off in 2010, his job was our only source d it was a scary time. Now that we’ve learned the value of having multiple sources of income, the prospect of a job lay off doesn’t scare us nearly as much. Great post, Kim.

    • We are very thankful to have never had a layoff ourselves, but watching other family members go through it made us really want to amp up our sources of income. I don’t ever want to be afraid of how we’re going to get by.

  10. Wow – 9 streams of income is pretty awesome! I can’t imagine waiting 4 months to get paid – that must be extremely frustrating. At least you are planning for that variability so it doesn’t impact your short-term planning.

  11. That’s one reason I love self-employment- I have multiple income streams! I may lose one here or there, but I can’t possible lose them all at once.

  12. Wow! I’m impressed by the nine different sources. We have recently been working on saving like crazy, but could certainly stand to diversify our income sources. For right now, we rely on our salary jobs. And are working to build the investment income – our primary source of income for retirement. Perhaps I’m being naïve, but I think we will have so much more time for additional sources of income once we reach retirement.

  13. This is an area that we definitely need to develop. At present, we have two income sources. We are set up to have multiple income sources in retirement though. I am also attempting to monetize our blog and hope that some day it will be an additional source of income!

  14. Very impressive Kim. 9 different sources of income? Why not. I am developing my website design skills and now having online seminar. Aside from it’s really in nowadays, I simply enjoy conceptualizing how website should look like.

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