Diversifying your investments and income is one of the principles to achieving financial security. The nature of the economy and life in general is unpredictable. We are all subject to the risk of unforeseen events that can cripple our finances if our sources of income are suddenly cut off. In a world where we can never be sure what is just around the corner, any financial advisor worth their salt will tell their clients about the folly of putting all their eggs in one basket.
Whether it is the catastrophic financial crashes that seem to occur at least once a decade or the misfortune of falling ill and having to pay medical bills, we should all take measures to insulate ourselves from inevitable financial shocks that are part and parcel of economic life. Read on for some things you can do today to begin diversifying your income and investment portfolio.
- Get a Side Hustle
One of the most stressful things that can happen to a person is losing their job. This may happen through no fault of your own if you are laid off due to your company being forced to make redundancies in the event of an economic crisis. A good way to protect against suddenly finding yourself without your main source of income is to get a side hustle.
The digital age has brought with it a ton of opportunities when it comes to freelance work. Viable side hustles might include offering services like teaching English online or writing for blogs, both of which can turn over a decent income. Alternatively, you could concentrate on creating a product, such as your own line of printed t-shirts or an e-book, which will help to keep you afloat.
- Invest in Real Estate
A great way of protecting your wealth is by investing it in real estate. The price of your investment will rarely diminish and could well end up increase manifold if you research and buy wisely. Buying to rent is also a great way of ensuring a steady income that you can rely on in times of economic hardship.
- Buy Stocks and Shares
The sad fact is that wages have not markedly increased in proportion to capital gains for a good few years. It makes no sense to slave away in your job while your money could be doing a lot more for you when invested wisely in stocks and shares. Make sure you spread your investments across a few different asset categories to minimize your risk of loss.
The rise of cryptocurrencies like Bitcoin has been meteoric. With crypto looking like it could be set to lead us into a new type of digital economy, it may be wise to get your own piece of the pie before prices rise again.
Insulating yourself effectively against inevitable financial shocks depends on diversifying your income sources and investment portfolio. In the current economic climate, you cannot afford to wait any longer. Start by investigating some of the strategies listed in this article as you move toward financial security.