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For most people, income is earned by giving a lot of time and effort in exchange for compensation. Incremental income is something else altogether: earning cash with little or no time and effort on your part. Finding ways to generate incremental income can help build wealth, giving you greater financial independence and flexibility to choose how and where you want to live.
People pursue incremental income for all sorts of reasons. Some 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 monetize a hobby or passion. Still others create incremental income streams as part of a long-term strategy to build wealth for themselves and their heirs.
Whatever the motivation, we live in times when generating incremental income makes sense for just about everyone. If the pandemic has taught us nothing else, it has shown us that life can change drastically in an instant. Today’s solid financial plan and secure job may look very uncertain tomorrow.
The accompanying resource makes an excellent starting point for anyone looking for ways to create, maintain or expand financial independence. These strategies are proven, and are likely to be sustainable over months, years or decades — whatever your financial strategy’s timeline happens to be.
In addition to the ideas themselves, the resource contains five important questions to consider as you decide which idea(s) 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 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 different levels of risk and require different amounts of capital to get started.
The bottom line is to be careful and thorough in your exploration of incremental income options. For instance, consider risk. It’s far riskier to invest $5,000 in a portfolio of growth stocks than to rent your lawnmower around the neighborhood. The payoff on the first investment could 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 (in terms of 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 by Renovo Financial. To learn more, please continue reading.
This infographic was created by Renovo Financial, a provider of single family investment loans
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