The most potent diversification is into a completely new business sector. A flower shop can develop a separate wedding flower business, for example, or offer mail orders. They expand their business operations into different sectors to generate new streams of income. It’s passive, as people can even buy products when you are asleep! Diversificationīig business has been diversifying its income streams for centuries. The passive income comes later as people begin to buy products from your store. The work at the beginning is to build the website, upload your products, and then promote them. In general, the work needed for a passive income stream takes place early on, and the income comes later.Īn excellent example of this is an online store. Although it says passive income, there is still work required to generate the revenue. Passive income is where the income is not directly tied to the work you do. Very simple and a direct connection between the work and payment. This is where you do some work or provide a service, and someone pays you for it. Your business is most likely using an active income stream. There are two types of income streams, active and passive. To manage this effectively, open a Penta Business Account today and benefit from automated accounting. Monitoring your income and expenses is essential. Hopefully, reading this short article will give you some ideas on different income streams. If you are a tradesperson, such as an electrician, it may be challenging to figure out how you can generate multiple streams of income. It can give your business stability and the opportunity to grow. Having multiple streams of income is a good way of safeguarding your business against a downturn in one particular stream. Many small businesses have a single income stream, such as an electrician or plumber.
The article "How I've Been Making Thousands of Dollars in Passive Income for the Past 5 Years" originally published on Grow+Acorns.Without an income stream, your business will fail. Jen Glantz is the founder and CEO of the business Bridesmaid for Hire, the voice of the podcast " You're Not Getting Any Younger, ″ and the author of the Amazon-bestselling books " All My Friends Are Engaged ″ and " Always a Bridesmaid for Hire. This year in particular, when some of my longstanding clients and jobs were paused because of the pandemic, these passive income strategies have continued to bring in income month after month. Over time, passive income streams have helped me feel more secure as my own boss, and have helped me during this uncertain moment. Plus, it requires no additional maintenance or attention and is an easy way to pull in monthly passive income. While I'm only pulling in less than $150 a month in interest, it's still far more than my old bank account. Having your money in a high-yield savings account, that compounds monthly, allows you to make hundreds, or even thousands, a year just by keeping your money in a savings account.
A big change I made to my finances, three years ago, that I'm proud of is moving all of my money out of a savings account that only offered 0.01% interest to a savings account that offered over 1.8% interest.