Updated – 16.04.2015

What is diversity of your income sources ?

A typical salaried employee’s graph would look like below

[visualizer id=”501″]

Highly concentrated with income from salary. If you are able to increase your salary 20% year after year, don’t read any further you have cracked the code, see you later. If not continue reading

Cicra 2010

Still in college, one of our most revered professor, seeded the idea of diversifying our income sources. He stated

Diversity will not only provide extra stability and improve your life style it will also enable keep the inquisitor in us alive beyond your college days.

I decided I would aspire to have at least 2% of my income incrementally from sources other than salary after first two years at job till my 7th year. Hence reaching a healthy ratio of 90-10

[visualizer id=”502″]

Circa 2012

I was amazed by the concept, however was not sure how can we add additional income, given that most of jobs demand at least 60 hours a week or more. Spending additional time looking for a weekend job was not a viable option. I had to rely on other means. My chosen areas of bring diversity to my income were

a. Stock investments

b. Online work

c. Royalty income

d. Micro business

Now this is how I went about each of the four starting one at a time

Having specialized in finance, stock investing came naturally as first option, I started watching CNBC and other popular business channels to look for tips so that I can put my monthly savings to good use. Occasionally I made money but most of the times I was just making my broker rich with excessive trading. Things were not working out I was losing both money and time, my idea of additional income went for a toss. Thanks to a close friend I got a copy of Peter Lynch’s best seller “One up on wall street” . This book literally changed my outlook towards stock investing. It was a big change from tip searching guy to deep researching guy. Over the years stock investing has helped the motto of bringing diversity into my income. Now big question is can anyone else replicate this ? – Give it 6 hours a week  in 6 months you will be an efficient stock picker (better than 80% in market). Read  this and then follow this . This is doable and every one can do it with some discipline.

It was my wife who introduced me to online work, now 60 hour work week will not leave much time for you to invest in online work, but if you have tenacity you can start and then make money in dollars.  A typical online job pays $10-12/ hour and a 6 hour weekend work can easily make you INR 30000 over weekend itself.  Again this is a rosy picture, getting a 6 hour online work week is extremely challenging you have to sharpen y0ur skills ,and have few glowing references. This is achievable start on platform like elance search jobs that come for freelancing based on your skilled set, if you are an accountant see if you can do book keeping for someone. If you are good at writing start looking for writing jobs. It is tough world with growing competition but once you build a reputation for producing quality content there is no looking back.

Royalty is a regular income comes from an one time effort, do once and get paid forever.  Write a book, sell your photography, design e book covers, design resume templates are some of the examples. I was personally inclined towards sharing my preparation methodology for exams to the wider student community.  Again 6 months 26 weekends of dedication and I was able to publish guide books for CFA Level 2 and CFA Level 3 on Amazon and today I am very happy to share that I have sold more than 50 copies in less than 2 months of publishing. Royalty income is very difficult to establish but once started there is very little maintenance work on a ongoing basis.

Micro business was a concept introduced by another life changing book in my life, I have written about it previously here This is my next area of exploration, I have tried a few ideas like automating stock reports and selling value investing themed stock reports from this site It has worked well till now. I am in pursuit and continuing this journey.  Read more about micro business here

Entrepreneurship has traditionally been viewed as risky because it involves investment and uncertainty. But these days, you can start a business in a short amount of time, using the skills you already have and without spending a lot of money

Finally where I am at bringing diversity to my income, I am at 3.5% below my target of 4% hoping to achieve 6% by next financial year. Till then

Stay wise, Be Tankrich