Dreading your day job? Here’s how you can build multiple income streams so you can ditch your 9-to-5

Retirement Planning, Investment Strategy, Investment2022-07-28

If you are dreading your day job, you are not the only one.

Since the pandemic, there’s a phenomenon of the Great Resignation where more and more people decide to leave their current jobs.

Some are pursuing different roles that are more aligned with their values and interests, giving more freedom with better pay, while some are simply just taking a break from the workforce.

It is so tempting to go to where the grass is greener.

You probably had this itch to quit and go after your best life, but you have not scratched it because of this one biggest hurdle... money.

Usually, it can require a lot of money especially when you want to switch to a different industry altogether.

You will need to upskill yourself by enrolling in courses and self-study. And if you are currently supporting your family at the same time, it can be an expensive endeavour.

This process will consume a lot of money, time and energy from you.

But it can also be the most meaningful and fulfilling one for you.

We are here to tell you that it is very much possible to pursue your desired life, and you can do it without having to worry about your finances.

And you don’t have to make it your part-time side hustle.

How is this possible?

Read on to find out!

At The Money Folks, we help our clients invest and build multiple income streams that potentially enable them to retire with more than $1 million. Reach out to us for a financial assessment call (by application approval only).

Disclaimer: This post represents our personal views and opinions and is neither associated with any organisation nor reflect the position of any organisation. This content is also only for informative purposes and should not be construed as financial advice. Past performance does not necessarily equate to future performance. Please seek advice from a Financial Adviser Representative before making any investment decisions.

Why a single income stream from your full-time job is not enough today

You graduate, pick a job, climb the corporate ladder and eventually retire. This is quite the conventional path among some of you who have a 9-5 job.

And typically, many people who take this path rely on a single source of income.

You might have bought some endowment or savings plans along the way, but that is pretty much it.

If you follow this route, this might mean working really hard until you retire. And no matter how hard you save, you might still not be able to reach your retirement goals. With rising inflation, our cost of living is just going to increase.

How much can you save to beat inflation?

Not to mention, in employment, your earning potential is limited to your time and ability to provide or produce your product or services.

Hence a single source of income might not be enough for you to lead the life you want.

Some of you might even have to work past your retirement years (and yes, there is a huge difference between choosing to work during retirement because you want to and having to work because you need the income).

When the Covid-19 pandemic hit, so many industries were disrupted in a blink of an eye. Many people had lost their primary source of income without much savings to buffer.

So, it is important for you to reduce your dependency on your full-time job salary by establishing multiple income streams on top of your main income.

Having multiple streams of income will work to your advantage to:

1. Give you the freedom to take career breaks without worrying about loss of income

Since you don’t depend on just one source of income, you can afford to take a break for a few months (or even up to a year) to figure out your next career move. You can utilise the time to upskill yourself so that you have more relevant skillsets to offer if you switch your career path.

You can also take the time to just take a break and have a ‘soul-searching’ period as you have more time to focus on yourself.

Either way, you don’t have to overwork yourself to juggle upskilling yourself on top of managing an intensive full-time job.

Besides that, the flexibility creates opportunities for you to jump on thriving industries or areas that you like, should they arise.

This flexibility creates a form of protection as well. You are able to protect from fluctuations that occur specifically in your company, industry or country.

For example, if you work in a company with a sharp fall in demand for your company’s products or services due to changes in the market, you might get a pay cut or even be retrenched.

But if you have another source of income to float your boat, you will be able to have a buffer until you secure another job.

With multiple income streams, you will have the flexibility as well as protection to pursue something more meaningful and advantageous for yourself.

2. Be on a faster path to financial independence

Besides creating a safety net for your income, generating money from several sources can potentially help you grow your wealth.

And if you grow your wealth strategically, you can do more than just take a gap period in your career. It can be potentially a faster path to financial independence.

And with secure finances, you can have the flexibility and freedom to live life without being tied down to your 9-5 job.

To illustrate, here is what we mean by a quicker path when you grow your wealth strategically.

For example:

You are 35 years old and you have $450 in extra cash after all of your monthly expenditures. You choose to invest that amount monthly. As a result, by 65 years old, you could potentially have about $1 Mil!

This would the case if you grow the money strategically and assume you get 10% p.a. returns throughout your investment period.

For illustration purposes only.

You will be able to have the chance to hit your financial goals earlier and even potentially retire earlier.

This is the magic of compounding. The earlier you start, the faster you can reach these goals.

So, how do you build regular multiple income streams?

1. Don’t fail from the start by NOT having a goal

“If you fail to plan, you are planning to fail” — Benjamin Franklin

So that’s why you need to be very clear on why you are building multiple income streams.

What are your goals?

This journey can be challenging, but it is a worthwhile journey to take with the right guidance and knowledge.

We have been helping our clients potentially reach their goals through our proprietary investment strategy to build multiple income streams.

Your Big Why is also your motivation to work towards your financial goals.

As all investments carry a certain level of risk, in undertaking this journey, you should be aware of your risk tolerance. You must understand how much you are ready to lose.

So ask yourself – why do you invest?

Below are some common reasons why some people invest:

Understanding your Big Why is the most important step in creating multiple passive income streams, as it will set the tone of your investing style and strategy.

It will also allow you to be more focused on working towards your goals and not be easily swayed by market speculations and fears that could potentially distract you from achieving your end goal.

2. Know which money-making baskets to put your eggs in

After understanding your goals, next you need to ask, what kind of investment approach is suitable for you? What kind of assets should you invest in to get there?

Income-generating assets can be financial products such as stocks, bonds, Exchange-Traded Funds (ETFs), unit trusts, Real Estate Investment Trusts (REITs) and many more.

It is important to diversify the assets you invest in so that if one investment does not perform well, you have other income streams to count on.

Diversification does not refer to just types of asset classes but also the exposure of your investment to various industries as well as geographical areas.

As an example, if you are invested in unit trusts and bonds only, you concentrate your dependence of income on these two asset classes. And if the unit trust is geographically concentrated such as in China, in the event of any market downturn in this market, you risk losing all of your income from this asset.

The point of diversifying is so that you realistically have the potential to achieve your financial goals while taking on an amount of risk you can tolerate.

From here, you then can start to allocate suitable percentages of your money to different assets. This is so that each component of your whole portfolio serves its purpose.

Check out an example of a client’s portfolio below. She is a working professional in her late 40s, with a child who just entered university.

For illustration purposes only.

Above is briefly how her assets were allocated to her needs and goals.

Her main concern was to generate regular multiple income streams as well as to capture the general market’s returns. Even so, she still includes growth assets to potentially capture better capital gains in the mid to long-term.

We recommended asset classes and relevant industries and countries that could potentially help her achieve her financial goals.

This requires a good investment strategy and knowing the right mix of asset classes that fits your investment profile. Doing so requires a comprehensive and thorough financial assessment.

If you are unsure of how to do so on your own, it is better to tap on expert advice, especially from professionals with in-depth knowledge and experience in investments.

The Money Folks is a team of MAS-licensed Financial Adviser Representatives (FARs) who can help you strategise your investment portfolio and create multiple income streams.

Some of us are also Certified Financial Planners (CFP®️).

3) Don’t fall into the ‘Buy and Forget’ trap

Holistic financial planning does not stop at the strategising stage. You can’t simply ‘buy and forget’, and be hopeful that the general market will always be ‘okay’.

It requires constant monitoring and management from you or a professional.

This is to ensure that your money is growing and on track to your goals. Because every investment comes with risks of losing money. Hence, we have to periodically monitor the performance of our investments.

As you might already know, the market is volatile. And assets do not grow at the same rate. It is part and parcel of investing, so this is why you must always monitor and rebalance your portfolio.

For illustration purposes only.

This is so that you are able to steer your investments in the right direction and keep your losses at an acceptable level.

Not rebalancing your portfolio exposes you to unnecessary risks that are beyond your tolerance. As seen in the above illustration, if left unbalanced, you are exposed to the stock market by 20% more than you initially planned.

That is taking on 20% more of the stock market’s volatility risks. And if the market took a downturn, that’s 20% more than you are prepared to lose.

At the same time, you may want to grab opportunities in the market as and when they present themselves.

Such practices require you to always be on the ball on the latest development and news about the market you are investing in.

Of course, we understand that your goals may also evolve over time. This is why it is important to update your asset allocation and rebalance it regularly and accordingly as your goals change.

FARs like us have access to wider information on the market and the ever-changing economy as these are our bread and butter.

If you are unable to always keep up to date with the current developments, we can recommend timely opportunities and strategise your portfolio for you so you can achieve your goals earlier!

Many investors lose money trying to build multiple income streams. Here’s how you can avoid it!

Before growing our money, do you know that not everyone has what it takes to keep themselves invested over a long period of time?

To invest and be able to stay invested in order to achieve your financial goals, you must have an emergency fund before undertaking this journey.

The amount of money required can vary amongst individuals. Usually, 6-12 months’ worth of expenses is an ideal amount to put aside before you start investing.

This is to prepare you for sudden emergency costs so that you don’t have to take up loans and enter into debt in times of need. Often, we might not encounter huge emergencies, but small emergencies that can potentially add up, such as medical costs for a family member, pets or even home repairs.

Such emergency funds should be somewhere accessible. You should not lock it into illiquid assets such as property where it can take a significant amount of time to liquidate it to cash.

With surprise expenses out of the way, you would be in a more comfortable position to invest and start building multiple passive income streams.

Even when you face a market downturn, you are able to support yourself in the early stages of investing. The emergency fund is for you to have a firm footing financially in the short to mid-term so that you can ride out the volatility in your investment and reap the results in the long run.

For illustration purposes only. Source of S&P 500 graph:

As illustrated in the S&P 500 Index above, staying invested over the long term increases your potential of earning more from investing.

Keep in mind that a sustainable and healthy investment does not grow overnight or in a month. It will take time to grow.

If you are in a position to invest with the right mindset, we are more than happy to assist you in your investment journey so that you have more than one income stream to give you the financial support you need to achieve your goals, be it in career changes or life goals.

At the Money Folks, we are able to manage and grow your wealth for you, so you don’t have to dread your day job anymore.

Be financially ready so you can fire your boss and lead the life you want.

Most of our team is recognised as the top 5% of financial advisor representatives worldwide, and our clients are on track to potentially achieve their retirement goals 10-15 years earlier than planned.

Preserve wealth in volatile market fr. $20/day

At The Money Folks, we help our clients invest and build multiple income streams - potentially enabling them to achieve early financial independence. This is done using our recession-resilient investment framework.

The information in this article is meant for general information purposes only and does not constitute financial advice. Please consult your Financial Adviser Representative before making any investment decisions. Investments have risks. Past performance is not necessarily indicative of the future or likely performance of an investment.

Further Reading

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The dangers of doing dollar-cost averaging blindly

Dollar-cost averaging is a popular investment strategy, but do you know it can be costly if you are just doing so blindly without paying attention to investment fundamentals or market movements?

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Dangers of investing in REITs for passive retirement income in a volatile market

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