This post is from our partners at LiquidTalent, a local talent marketplace for hiring vetted developers and designers through social connection.
The majority of Americans rely on a single source of income. The entire sum of their personal earnings tends to come from one organization. This is what we know; this is familiar, acceptable, and the norm. The truth of the matter: it’s risky.
When you invest would you put all your money into one stock? Of course not. If that investment goes belly up then you’re in trouble. Therefore, you diversify your portfolio and reduce risk. With a diversified investment strategy, if one stock performs poorly, it’s ok if you cleverly spread your eggs in a variety of baskets - you can still come out on top.
Single points of failure make life scary, so why do we casually accept a single source of income? You just never know when that source may dry up. Perhaps the company goes out of business, or you get fired, or the market nose dives…
With a single source of income you may one day find yourself, well, income-less.
The legendary financial genius, Warren Buffett, cautions us and says “never rely on a single source of income.” He urges us to find ways to bring in money from a variety of sources. Warren focuses his income streams through investments (earnings from a healthy, diversified portfolio in the form of a stock sale or recurring dividends).
At LiquidTalent, we also think a lot about income diversification. However, income diversification means something slightly different to us. At LiquidTalent, it means project-based work.
Very rarely does any professional commitment require your full-time focus, allowing you to earn money from a variety of sources. Put yourself out there and market yourself as the quality professional that you are. Freelance, moonlight, consult. You can monetize your expertise today in the 1099 economy. It’s time to manage your energy and maximize your earnings. It’s time to diversify your income.
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If you’re in a W2, full-time job, consider taking on project-based work - perhaps in the mornings, nights or weekends. Even better, turn it on during the day. Chances are you’re not being totally productive throughout the course of your 40-hour work week anyway. In a previous post, Oranges and Peas, I discussed Pareto’s 80/20 rule, and how this powerful economic principle applies to the modern day 40 hour work week. Push yourself and find pockets during the day where you can switch gears and put your unique set of skills to work and increase your earning potential.
When I was working full-time at Google, my Sales teammate picked up creative work on the side. He was hungry to make more money and took it upon himself to diversify his income. Today, it's become even more accessible to earn additional cash (I imagine some of you have earned money from Ebay, AirBnB, Uber or Etsy). My friend who founded a successful clothing company now DJs over the weekends. A software programmer can support an exciting startup project; a graphic artist can design marketing collateral; UX designers have never been more in-demand (see LiquidTalent for seamless access to technology + creative opportunities). The sky is the limit on making your skills and passions income drivers for you today.
We’re at a very integral moment in the evolution from the industrialized economy to a technological one. The 1099 economy is flourishing and will only gain steam over the coming years. All forms of work are becoming more project-based, freelance, autonomous and distributed.
The truth is it’s never been easier to source paid opportunities and market yourself as You, inc. It requires a small shift in thinking, and you can say goodbye to relying on a single source of income forever. Not only will you get the nod of approval from Mr. Buffett, but it may even turn out that your project-based work is more lucrative and satisfying than your full-time job.
The 1099 economy has arrived and is waiting for your participation. May 2016 be the year to diversify your income and fortify your financial stability.
Founded by Alex Abelin and Scott Annan, LiquidTalent is a web and mobile local talent marketplace for hiring vetted freelance professionals through social connection.
LiquidTalent, which celebrated its official launch Nov. 19, 2015, is also known for its Future of Work Summits where new age professionals come together to connect and be inspired from a panel of educators, entrepreneurs, policy makers and economic opportunities. Please join our growing community and sign up today!