Going out to restaurants is one of those things that we all do from time to time.  Some of us more than others though. And a lot of personal finance blogs and gurus say that this is one of those things that we all need to cut back on.  But is it really?

Sure the cost of a meal at a rrestaurant is a lot higher than if you made it yourself.  But whar about the time value of money?

For instance, it takes me a really good long time to make a meal at home as I’m not so great in the kitchen. And when you consider the time value of money, it looks like dining out is a good thing for me since it frees up time for me to work on income producing projects.

But there is a catch.  My income potential is only so high.  That means that meals out for me are only worth it up to a certain degree. And I believe this is true for a lot of people out there.

Granted, if you just lay around watching the television all night then it is not a good return on the time saved for you to dine out at a restaurant.

Another thing to consider – what if you would not be spending the time saved on something that produces an income but on something else beneficial, such as your health. Say you do a little working out in your home gym like this site recommends with the time saved by grabbing restaurant food. Or, maybe you can spend the time working on some personal development or something like crafty items that you post up for sale on Etsy or a similar site.

So, no, dining out is not always a bad idea. And for some people and some situations, it is even a good idea when you consider the time value of money that comes into play.

As I mentioned in my last post, I was recently laid off. I have found some more work, but the experience has made me think a lot about financial diversity and the idea of not putting all your eggs in one basket.

One of the things that has suddenly clicked in my head, is the idea that if you are dependent on one source for the majority of your income then you are pretty much owned by that person or that company. If you rely on an employer for most of your income then you are a slave to them and their ideas.

Having a diversified portfolio of income gives you independence and gives you the power to choose how and where you get your money from.

It also cushions you from the ups and downs in one line of business or in one company.

  • If you rely on your savings account for the majority of your income, what happens when interest rates fall?
  • If you rely on your property, what happens when you can’t rent it out?

I think it is a simple philosophy, but the benefits of diversifying your income are easy to see and is something everyone should start thinking about doing today.

My mission from now on is take make sure that I am never again reliant on one source of income for more than 33% of my income (we shall make that living income). That could be anything, whether a job, a bank account or my own company. I don’t want my fate tied so closely into one thing.

I want the power to choose and I think diversification gives you that.

What do you choose?