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?