Personal Finance Success: How to Diversify Your Income
Looking for new ways to diversify your income in 2020? We've compiled tons of ideas to help you earn and save more.
So you want to put a little more money in your pocket every month?
The name of the game is diversifying your income. After all, that stimulus check can only last you so long.
In this article, I’ll cover tons of practical ways to diversify your income, organized into 14 simple categories. These ideas include ways to make money online, offer specialized services like consulting and freelancing, and even invest your money so it grows passively over time.
The best part is: You can start implementing many of these ideas as soon as you’re done reading this article.
Why You Should Diversify Your Income Streams
As the old saying goes, don’t put all your eggs in one basket. As many people have seen with COVID-19, when your main source of income—like a W2 job—suddenly disappears, it’s helpful to have other income streams to fall back on.
Source: New York Times
Diversifying your income provides you with a stronger personal safety net in case you’re fired or hit with another unexpected emergency. Plus, with diversification comes business experimentation. And you never know where that could lead you.
At the risk of sounding too obvious, having multiple income streams also improves your earning potential. Maybe your employer won’t give you a raise for another year—but a side hustle can give you another way to earn more money before your boss is feeling generous.
While I don’t believe in get-rich-quick schemes, I do believe that most people have more money-making opportunities around them than they realize. And no, I’m not going to give you the generic advice you see everywhere, like donating plasma, attending focus groups, or doing online surveys for fifty cents an hour.
Let’s jump in.
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Ideas for How to Build Side Income Streams
Choosing more than one way to build wealth isn’t just about safety or grabbing a little extra cash. It can improve your life in other ways as well.
- Gives you a paid creative outlet
- Equips you with new life and professional skills
- Introduces you to new people and learning opportunities
- Gives you professional challenges outside of your full-time job
Here are some of the best ideas and ways to build an extra income stream:
- Sell Your Skills
- Upsell Your Services
- Create and Sell Your Own Product
- Sell Someone Else’s Products
- Try Gig Work
- Lease Your Space and Belongings
- Invest in the Market
- Invest in Real Estate
- Use High-Interest Savings Accounts
- Try Expense-Cutting Tools
- Pay Off Credit Cards
- Negotiate Regular Expenses
- Get Lifetime Deals Instead of Monthly Subscriptions
1. Sell Your Skills (Start Freelancing)
You don’t have to be in the top 10% of performers within your craft to start helping people. You just have to be a little better than the person you’re helping.
The internet, for one thing, has opened a door for people to earn money online. Freelancers are effectively just small businesses that let owners work from home (or at least manage their own schedule).
Beginner freelancers can connect with their first projects through their network, freelancing sites like Upwork, or by cold-pitching their services to relevant businesses. (Here are a few more tactics for finding freelance gigs.)
Here are a handful of common skills that people regularly freelance:
- Graphic design
- Virtual assistant
- Physical training
- Data entry
If you’re still in that ‘idea generation’ phase, we’d recommend checking out a couple of AppSumo’s courses on how to start and launch a successful business, like Monthly1k and Sumosize Your Success.
2. Upsell Your Services
If you’re already freelancing, then you can diversify your freelance income through upselling.
As long as you do good work, it’s almost always easier to retain an existing client than to win a new one. When you complete a project for a customer, make it easy for them to step into a larger project with you by upselling them on another service, course, or program.
On the other hand, if you’ve been asked to provide a proposal, don’t just give them one option. Provide tiered offerings in the pitch. The lowest tier should be exactly what they asked for. The two higher tiers should be premium versions—services that cost 2 or 3 times the cost of the lowest tier.
Worst case scenario, you provide exactly what the client wanted. Best case scenario, they hire you for an even larger project.
3. Create and Sell Your Own Product
Next up, create a digital or physical product to sell. I know friends who build custom furniture, for example, and sell it locally using Craigslist or Facebook Marketplace. You can also build an online ecommerce store on a site like Etsy or Shopify
Alternatively, you can build a digital product such as an online course and list it on AppSumo. In this case, you’re using intellectual property to diversify your income.
I think we’re going to see even more growth and innovation in this space in the coming years—because as public school closures have shown, education isn’t going anywhere but online. There are a ton of tools in the AppSumo store for people building and selling digital products.
For example, check out TeachableU, a 4-course freebie showing you step-by-step how to build and sell online courses. Grab it for free for a limited time.
If you’re not so creatively inclined, fear not. Today, there’s a huge industry of Craigslist, Facebook Marketplace, and Ebay resellers who find items at garage sales, auctions, and thrift stores to resell online at a significant markup.
These are often vintage, luxury, or name-brand items with cult followings, but the range of items you can resell online is quite surprising. If you’re curious, check out Austin local The Bonafide Hustler for more details. (I’m a huge fan of his YouTube channel.)
5. Sell Someone Else’s Products
Maybe you’re not into creating your own products and finding products to resell. That’s okay. Here are some other ideas where you can implement your marketing skills to sell someone else’s products:
📦 Dropshipping: Do you see a need in a community that’s not being filled? If you know the product already exists, all you have to do is become the middle-person between the supplier and buyer. Someone else creates, stores, and ships the product. All you have to do is take orders and make sure they get fulfilled.
👩💻 Affiliate marketing: Many companies have affiliate programs that pay generous kickbacks when you help them make a sale. For instance, if you bring a new customer to AppSumo, we’ll pay you up to $50. You’d be surprised just how many companies have these types of programs. Affiliate marketing is a key income driver for bloggers.
📣 Sell advertising space: This one comes in many forms. People can be paid to host billboards in their yard, paste ads on their vehicle, or get sponsors/advertisers for their blog, YouTube channel, or podcast.
6. Try Gig Work
You can also do gig work. This includes running errands, helping people move, delivering food, and other simple services. Here’s where to start:
- Uber or Lyft: Use your car to taxi strangers to their destinations
- Ubereats, Favor, GrubHub, DoorDash, Instacart, Postmates: Deliver food directly to people’s houses or work
- Fiverr, TaskRabbit, Handy, Care.com, or Thumbtack: Provide local on-demand, contract-based services (depending on your interest and skill set) like general contracting, housecleaning, yard work, babysitting, assisting the elderly, etc.
- Usertesting.com, UsabilityHub.com, Userlytics.com, UserBrain.com: Test digital products and get paid to provide feedback online
To expand your knowledge, we’ve got this excellent guide to the gig economy in our store–free for a limited time.
Plus, here are a few more less-conventional ideas:
- Check Craigslist or local forums for informal gig work like being a brand ambassador, cooking, cleaning, organizing, nannying… you name it. I know someone who got paid $100 per week to meal prep for someone they found on Craigslist.
- Look on conventional job sites like Indeed for part-time job listings
- Join Surkus to get paid to party (or do other random brand-related work. You’re not going to make much here… but it can be a bit fun.)
- Become a part-time assistant to an Instagram influencer, blogger, or entrepreneur (Bonus: This is a great way to learn new digital skills!)
- For students: Become a digital apprentice and/or join an accelerator to move into digital marketing through Acadium. Check out other sites like HireOwl or look into local university career resources to connect with local businesses.
7. Lease Your Space and Belongings
You can rent things you own to others. Consider putting your spare bedroom on Airbnb. Rent or sell your stuff on FatLlama. Lease your bike on Spinlister.
Rent out your car on Turo or rent out your stuff on Buro. (Rhyme fully intended.)
Start Investing for Long-Term Wealth
These examples won’t put immediate money in your pocket—they’ll actually take it out of your pocket. And sometimes you have to wait a while to make any returns.
But in my opinion, playing the long game is the best way to invest anyway. Here are some ways to get your money to earn money for you:
8. Invest in the Market
Standard disclaimer: I’m not a financial advisor by any means. Make investing and personal finance decisions with the help of your certified financial expert.
I grew up thinking that investing meant buying one-off stocks. And it’s true that some people choose to invest their money that way. But for me, I recommend investing in broad index funds for the long term.
I won’t go into the details here, but I recommend listening to one of these great conversations:
- Personal Finance Basics During COVID-19 with Taylor Schulte
- Noah Kagan Presents: Money Strategies with Ramit Sethi
- From $0 To Millionaire | Investing For Beginners by Graham Stephan
9. Invest in Real Estate
If you have the capital, real estate is a popular way to invest. I tried to describe the following investing strategies in simple terms, but I know all these strategies are more complicated (and the math is even more complicated) than I’ve described here.
With that out of the way, here are just a handful of ways to make money through real estate:
- Long-term hold: Purchase a home in an appreciating real estate market. Live in that home for 7+ years. Eventually sell the home, pay off the remaining mortgage, and enjoy the appreciated earnings (or invest in another house).
- House flipping: Buy a house that’s below market value. Fix any damages that may keep you from selling the house. Sell the property for more than you paid for it.
- Become a landlord: Buy a house. Lease out a portion or the entirety of the home to a tenant. Rake in the monthly cash. If you do the upfront work to find reliable tenants who respect your property and pay rent on time, then being a landlord can be a great way to earn passive income. If you’re curious to learn more about this, google “house hacking” and have fun.
10. Use High-Interest Savings Accounts
It’s wise to have a 3-6 month rainy-day fund. But that liquid account can still earn you a little money every month if you put it in the right savings account. Here are some high-interest savings accounts to consider:
- Marcus by Goldman Sachs: 1.55%
- Capital One: 1.5%
- Gateway First Bank: 1.75%
- Comenity Direct: 1.70%
- VIO Bank: 1.70%
These rates were borrowed from BankRate.com. If you want to know how much your savings can earn over a year, BankRate includes a free interest calculator to see how much you could earn at each bank over the course of a year.
You can also look into high-interest checking accounts like Redneck.bank as well. (I am not even joking.)
Pay Yourself by Cutting Expenses and Paying Down Debt
It sounds a lot more interesting to earn more money than to cut expenses. But at the end of the day, most of us pay for things regularly that we don’t care about.
There may even be hidden recurring expenses we completely forget about that quietly deplete our accounts every month.
11. Expense-Cutting Tools
Here are a handful of tools you can use to start cutting regular expenses:
- Apps like Truebill help you cut expenses by finding those hidden subscriptions I just talked about. Truebill pulls all those recurring expenses into one place so you can manage—and possibly cut—them.
- Tools like YNAB (You Need a Budget), EveryDollar, and Mint connect with your bank accounts and investments to make it easy to know where your money goes every month.
The amount you can save might be insignificant, but even just gaining awareness of where you’re overspending can be a big first step toward living more frugally.
12. Pay Off Credit Cards
For many, the best investment you can make is paying off your debt—especially credit card debt. The sooner you can pay off your cards, the better.
There are two primary ways to approach paying off debt:
- Highest interest first: Credit cards charge different interest rates. By paying off the highest-interest card first, you’ll pay the least amount in interest in the long run.
- Momentum: In this case, you tackle your lowest-balance cards first. The reasoning here is pretty simple: When you see how great it feels to pay off that first credit card, you’ll be more inspired to pay off the next one. This will keep you tackling the goal of paying off all your debt, no matter how hard it seems from the outset.
13. Negotiate Regular Expenses
There are many everyday expenses that we don’t realize are negotiable. You can save hundreds or even thousands of dollars per year by simply asking for discounts on your cell phone bill, internet bill, rent, and much, much more.
If you’re anything like me, the idea of getting on the phone and awkwardly trying to negotiate down your rates doesn’t sound all that appealing. It helps to not start cold. There are dozens of powerful negotiation techniques you can use to make the task easier.
In fact, we interviewed former FBI hostage negotiator, Chris Voss, about this very subject just a couple weeks ago. Learn his negotiation tactics in that interview.
14. Get Lifetime Deals Instead of Monthly Subscriptions
You know we had to throw this one in here.
AppSumo is on a mission to make sure the software you need to run your business never puts you out of business. Instead of charging lofty monthly subscriptions, we bring you lifetime deals on SaaS products at massively discounted rates. We’re the #1 deal site for entrepreneurs. Go see what’s in the store today.
Today, entrepreneurs of all types are building businesses on the back of AppSumo tools. For inspiration, check out How to Start Your Remote Business Now with Doc Williams.
Share Your Best Story on Diversifying Your Income
Creating multiple income streams is one of the best ways to gain more cash flow, reduce financial risk, and add some more flavor to your week.
Whether you’re finally getting your consulting business off the ground, researching index funds, or just cutting back on the Postmates orders, the best time to start is now. In these unstable months, variety is the spice of life savings.
Now we want to hear from you!
Tell us your best side hustle story in the comments below.