If you’re running a business or trying to build a career, you should know the importance of diversifying your income streams. Having only one income stream makes you vulnerable; it limits the total amount of money you can bring in, and if your primary source of income is hindered or eliminated, you’ll bear 100 percent of the consequences.

The problem is, for new entrepreneurs or those new to the professional world, it’s intimidating to find a new avenue for revenue; your range of skills and experience is limited, and you may not have much free time to dedicate to a secondary pursuit if you’re working on your main goal.

So how can you diversify your income when you have limited experience?

Options for Diversification

Let’s start by looking at some income diversification options that are available to you, no matter your level of experience:

  • Rental properties. There’s a reason so many self-made millionaires started out with property investing. Buying a rental property requires some knowledge on basic best practices in real estate investing, but it’s not rocket science, even to the uninitiated. As long as you charge more money in rent (and other fees) than you pay in monthly expenses and long-term expenses, you’ll strike a regular profit every month, with minimal ongoing time investments. The real downside here is that you’ll need some capital to get started.

 

  • Dividends. You’ll also need some capital if you want to invest in assets that yield dividends, or regular payouts, but it’s definitely worth the price. Many big-name companies give out dividends on a fixed schedule, and if you’re interested in a more stable, long-term approach, you can always invest in an index fund of multiple dividend-paying stocks. You’ll earn somewhere between 2 and 4 percent a year on your initial investment, plus the capital gains from any price increases you see.

 

  • Creative side gigs. You could also try your hand at selling things you’ve created—and what you create depends on what you’re interested in or what you’re good at. For example, if you’re a talented artist or a skilled woodworker, you could sell your paintings or your furniture for a profit. In a business environment, you could write an eBook, selling it for a few dollars per download as a recurring revenue source.

 

  • Business partnerships. You can also diversify your income by working with other businesses, especially if you have something good to offer them. For example, many companies offer a kind of B2B referral program; if you send new business their way, they’ll give you a percentage of the eventual sales. Think of it as being a salesperson for an external company as a side gig.

 

  • Alternative offerings. In a business environment, you could always establish a secondary line of income by offering something new to your customers. For example, you could launch a new product line in a field you haven’t dabbled in, or you could offer consulting services or other services in addition to the products you sell. You could even place and sell advertising space on your website, assuming it generates enough traffic to make it profitable.

 

Key Tips for Success

 

No matter what type of income you pursue, there are a few tips you’ll need to follow to be successful:

 

  • Start slow. Don’t try to run three businesses at once, or invest too heavily in a single side gig. Instead, you need to start slow, investing gradually until you develop enough experience or familiarity to make a better decision.

 

  • Experiment. It’s also a good idea to experiment with different side gigs. The more you see and do, the more diverse your skillset will be, and you’ll get a better idea of which income streams are best for your personality and career.

 

  • Keep your focus. Make sure you keep your focus on whatever your main career path is. Side streams of income are important, but not so important that they’re worth sacrificing your main line of income over.

 

  • Plan for growth. Finally, establish your side streams of revenue with an intention to grow them, and expand your domain over time. You’ll want to add more sources of income, and increase the income you get from each source as you develop.

 

You don’t need to have pre-existing expertise to start diversifying your income. As long as you have the motivation and enough time to dedicate, you can start exploring new options and begin securing your financial future.