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BizReport : Internet : July 09, 2019

How Entrepreneurs Bring in Residual Income

When you're an entrepreneur, it's essential to understand the risks you face, and to do everything possible to ensure you'll be able to provide for your family on a monthly basis. Sometimes you require multiple streams of income to make it work.

by BizReport

The Challenge of Unpredictable Income

We could fill up an entire sheet of paper to list the pros and cons of being an entrepreneur. Most of us would agree that the former far outweigh the latter, of course, but it's wise not to discount or ignore the downsides.

In particular, we ought to acknowledge the challenges and anxieties that unpredictable income imposes on us. As opposed to a W-2 job in which your employer pays you a steady amount of money at least every other week, you often enjoy no income assurance when you're on your own.

You could make $10,000 one month and only $500 the next. This makes it incredibly difficult to set a budget, take on loans, or create a savings/investment strategy.

If you find yourself in this boat, facing substantial and unpredictable income fluctuations, there are solutions and various schools of thought on how to meet the challenge. And though you may consider sound strategies for managing expenses on an unpredictable income, there's more to the equation than just tactical budgeting.

In actuality, the best thing you can do is increase and diversify your earnings through a variety of residual income streams.

Four Ideas for Residual Income

The beauty of residual streams of income is that you don't have to be hands-on about them around the clock. Most of these endeavors or investments require a significant commitment of time and funds at the front end, they don't operate from there under the "time = money" equation.

In other words, you can work on other ventures and still have income trickle in. Generating residual income isn't as easy as certain online gurus would have you believe, but it's also not something that's reserved just for the wealthy.

Here are some options worth exploring:

Real Estate

If you have the available capital, investing in real estate is one of the best ways to produce steady cash flow on a month-to-month basis. Single-family real estate is one option, but don't overlook the potential of multifamily investing.

Here's a highly informative resource about owning an apartment complex and the benefits that come from spreading your investment across multiple units that can be managed simultaneously. Read through it and see if it's appealing to you and your situation.

If you have the capital to make it happen, commercial and industrial real estate - like storefronts, warehouses, and office space - can provide stable and predictable monthly cash flow, as well.

Dividend Stocks

Most people are familiar with the basics of investing in stocks and mutual funds, but are you familiar with dividend stocks?

Dividend income is basically money that's paid to shareholders of stocks in cash based on the earnings of the stocks over a period of time (usually quarterly or annually). Although there are no guarantees, dividend stocks typically produce an easy and predictable stream of cash that can either be reinvested or put directly into your cash savings.

Write a Book

If you're an entrepreneur with extensive skills or experience in a particular industry, you may be able to write a book about what you know. Obviously, it takes a lot of time on the front end to compose one, but a book can provide a steady stream of income once it's been published. Given the print-on-demand option -- available from such providers as Amazon -- you don't have to tie up cash by printing hundreds or thousands of copies that may or may not sell right away.

Rent a Spare Room

Do you travel a lot for business? Do you have a spare bedroom in your home? Would you be comfortable with renting out your basement? If so, you could list a room on a site like Airbnb and bring in a few hundred or even thousand dollars per month. With a little online advertising and attention to detail, this could be a surprisingly substantial money maker.

Establish Financial Security
Financial security is something nearly everyone seeks in this unpredictable world. If you're an entrepreneur, it can harder to find a suitable level of peace and stability.

But if you're willing to put in some of the legwork up front, you can design a couple of supplementary income streams that will help you achieve financial security and sleep easier at night. Use the ideas outlined in this article as inspiration, and don't be afraid to try something new!


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