Multiple streams of income

I see a lot of YouTube videos pop up these days about the importance of having multiple streams of income. I have even heard it mentioned in a few podcasts I listen to.

I suppose it is nice if you have the opportunity, but isn’t it more rational for most people to have one good source of income? I got an education in order to get a job, and if I were to do some kind of side hustle, my hourly rate would for sure be lower than my main job.

Of course there are exceptions. Maybe a teacher could write a textbook for example.

Is there something I am missing here? Should I try to diversify my income, or is this just a YouTube fad?

You should obviously make a YouTube video questioning whether an additional stream of income from making YouTube videos is really necessary.

If your main source of income is making YouTube videos, then yes, multiple streams of income are a necessity. YouTube’s algorithm regularly screws over creators in new and interesting ways, so you never know if you are going to make money that month or not.

For people who have regular jobs, you typically need a full time job so that you can get decent health insurance. A second job will take up all of your free time and will often run you ragged. Sure, you will have more money, and if one job goes belly up you’ll still have income from the other. But is that really the life that you want to live? You won’t have time to do anything fun.

If your primary job pays well enough, then you have some choices. You can choose to live in a fancy house and drive a fancy car, or you can choose to live in a more modest house and drive a much less expensive car, freeing up a bunch of money that you can do something with. You can invest in the stock market, bonds, commodities, etc. You can take a chance and invest in some startup company. Some of these investments (especially a startup company) are rather high in risk, and in general, the higher the risk, the higher the reward if you succeed. And of course the higher the probability of complete failure, which could lose your entire investment.

Another option is to figure out how to monetize something that you enjoy doing. Your example of a teacher writing a textbook is a good example, assuming that the teacher actually enjoys writing textbooks. If the teacher doesn’t enjoy writing textbooks, then they are just setting themselves up for hours of misery that will probably not give them a lot of income. I know someone who enjoys drawing and painting. She has a regular job, and also has a side business drawing and painting people’s pets. She makes a decent amount of money doing it. I have a cousin who used to like tinkering on cars. He’d buy an old crappy car, spend several months fixing it up and making it nice, then he’d sell it. He made a profit on every car, but he wasn’t doing it for the money. He just enjoyed working on cars.

I personally chose to invest in a couple of rental properties. I’m happy with it, but I don’t recommend it for most people. If you think you just buy the property and then just sit back and enjoy the money coming in, that’s not the way it works. Not even close. It also requires a lot of money to get into it. You need a much higher down payment for a rental property than you do for your personal home that you are going to be living in. Around here, you typically need 1/3rd of the price of the home as a down payment for a rental property, plus closing costs, etc. You also need to have enough money set aside that you can handle any major repairs that might come up, or let’s say something really weird happens like a global pandemic, and all of a sudden your tenants are having trouble paying their rent. If you can’t go at least six months without receiving any rent at all, then buying a rental property probably isn’t for you.

Not everybody works 9 to 5 at the same factory for decades and then retires. I know people, not that young, who work multiple jobs, e.g. work at a liquor store part of the day and tend bar at night. Which one is the “side hustle”? I’m not going to ask. As for textbooks, people write them but it’s not really for the money; a good side hustle, though, is to do some consulting on weekends/over the summer/on sabbatical; if you are well enough known you can certainly rake in some decent money. In any case, as @engineer_comp_geek says, if you have too much cash, you can invest it and under some circumstances that can generate an income stream too.

On the flip side, some young people, or quite old people for that matter, choose to, when the cost of living conditions make it possible, work only part time or not at all, the better to study full time or whatever they feel like doing. I think not worrying about income streams is easier in countries and/or cities where rent is not that outrageous, there is a good social welfare state (so going to the doctor will not bankrupt you, etc.) and you can’t just get fired out of the blue.

Its interesting to me to see how “content creator” is evolving as a job. Asimov once predicted that eventually a third of the population wpuld be employed entertaining the other 2/3 of the population, and that seems increasingly possible–or even too low. I do love the idea of a world where rather than having a tiny number of people making millions and hundreds of millions to entertain everyone, we could have a much larger number of people making good money entertaining tens or hundreds of thousands.

With no limit to the distribution of content, there really only is room for one content creator per niche. Like with music, books etc. there is no reason for us to consume anything other than the best that is available. And this in turn leads to a few people entertaining all of the rest and making a lot of money in the process.

Even thought there is a lot of niche content (I sometimes watch speed runs of obscure game), it seems unlikely that 2/3 of the population will entertain the rest.

The “multiple streams of income” people often seem to pair it with the idea that “being your own boss” is the only acceptable lifestyle; that being an employee of somebody else is somehow demeaning or otherwise unacceptable.

There is something to be said, in theory, for not having all your “income-producing eggs” in one basket; but for a large number of people, setting up a 2nd, independent source of income just isn’t very practical.

I too thought this when I read the OP, and I think a lot of the reason for the pairing is that both ideas are associated with successful people who are in control of their lives.

The thing is, in order for either idea to work, you have to investigate. I.e., is there sufficient demand for the services I’d be offering as my own boss? Or for the products I’d be creating to generate additional income?

It’s sort of like people who decide to take out loans to go to college (because they’ve heard of successful people doing so) without doing any career planning.

If you work at a liquir store during the day and a bar during the night, I suppose it would be either because you don’t get enough hours at one of the jobs or that you want to work more than full time for some period of time. It might also be because you enjoy the variety, but I doubt people do it to minimize risk.

Investing your money is an interesting one. You could do some kind of passive investment, but I would rather count that as just saving, and not another stream of income in the sense that people usually talk about it. Buying rental properties is of course more involved, and it could probably minimize risk a bit. If you have enough properties you could do all the landlord work yourself and get by even if you lost your job. Still, I think it would make sense to compare it to your main job. One of them is bound to make you more money per hour than the other.

If you are a content creator, I absolutely get that you want multiple legs to stand on, but I think that applies to many freelance occupations. It just seems to me like if you have a good primary job, doing something on the side would just be inefficient. Unless it is something more of a hobby that you enjoy doing. Or if you get the occational consulting gig that pays more than your primary job.

My dad put in fifty years at the same job. I had three different careers. My son is doing the “gig economy” thing (so multiple streams, some in the arts, some blue collar). His son might be working remotely at a half dozen different jobs simultaneously… and only half of them on Earth.

I told my college students “I predict none of you will have just one job. So keep working on those skills in varied fields.”

But “best” is subjective. Different people like different things. Furthermore, one person can consume a lot of content. I don’t just read my favorite book over and over. The current landscape is not one creator per niche.

Also, not all entertainers are the face you see. People do editing, write copy, do graphics, do research.

I honestly think a big problem with the small creator model is that they basically rely on parasocial relationships, and I think those will always be problematic. Part of what is compelling about small creators is it feels “real”. I mean, isn’t that what people pay for in Only Fans? I think the same is true for lots of non-sexual creator communities. To make a living, you have to connect. But next thing you know, as a guy I watch says, someone delivers a pizza to your house at midnight and then suddenly you feel very unsafe.

At my local pub, most of the bar staff actually work at several different places. They’ll work Monday and Wednesday at the local pub, then Friday or Saturday somewhere else. I’m not sure what their total hours are, but this seems to work for them. Different places have different nights when they’re busiest, and this seems to give them the flexibility to staff each night properly. For example, Wednesday night at the local pub is their darts league night, so it’s always packed, with a crowd that drinks a lot. A dance club downtown will likely be much quieter that night.

I also allows everyone to avoid offering them benefits, because they are always part time.

That’s the big problem. I occasionally do things with wood. I was making backyard benches and tables for a while pre-pandemic. I mostly wanted some for myself, but a few friends asked if I could make some for them. I charged enough to cover my costs, as it was mostly for fun and exercise. Someone suggested I could make this an actual business, but when I did the math on how many benches I’d have to sell to equal my current salary, it just wasn’t feasible.

I suppose if I lose my job, I could fall back on this, but it would almost certainly be an overall pay cut. And it would stop being fun, because then I’d have to build things every day, or I’d go bankrupt.

Both are good points, but I still don’t think the number of entertainers scales with the population. In the old days you would have different entertainers in every village, or they would travel around, but each entertainer could only reach so many people. Today there is no limit. Even though tastes vary and there are many people involved in making each product, it’s still do some degree a “winner takes it all” game.

Or neither pays well enough to be one’s sole income. I have known many parents to work two jobs, one for income and one for income to pay child care.

I think a lot of it is bullshit that came out of the “hustle culture” fad. Concepts which include “multiple streams of income” (many of which should be “passive”) and having an entrepreneurial “side hustle” which you will presumably eventually turn into your million (or billion) dollar business.

Sure, it’s a nice idea to have multiple streams of income in the event you lose your job or just to make extra money. But the reality is that most people only really have time to work their primary job and maybe a side hobby or two. And rarely do those side hobbies generate enough income to supplant their primary source of income.

If you find yourself working two or more jobs to make ends meet, you would probably be better off looking for ways to position yourself for a single full-time job that covers your expenses.

Real estate income is nice (and IME doesn’t really require a lot of effort for 1 or 2 properties), but requires a sizeable investment as well as significant cash flow to pay off the mortgages.

People make money on YouTube, TikTok and other social media platforms, but that also requires significant time and effort and talent.

Maybe you can write and publish a successful book and collect royalties.

You could try some of the various (and somewhat suspect) side-hustles people describe on social media. Acting as a sort of arbitrage between the price of crap sold on Amazon vs the price at the local big box store seems to be a popular one.

I’m sure there are others.

I think that model really peaked in the 70s: TV, cinema, and radio made it easy to distribute to the masses, but there were only 4 networks, a handful of radio stations per town, a limited number of movie screens. So there really was a common entertainment culture that almost everyone participated in to some degree. But cable, then the internet, changed that. Suddenly there were all kinds of niches. And because the cost of producing content dropped so low, people could get started for much much less. So now we all find our niche.

TV shows used to be able to seriously talk about capturing 60% of the households in the country. With the exception of the Superbowl, that doesn’t happen anymore and hasn’t happened in 30 years. The trend is absolutely currently toward decentralization.

Yeah, this. You can see the numbers trend here:

The top rated shows of the last decade wouldn’t even break the top 30 before about 1980 or so, and the top ratings have steadily declined since the 90s.

The phrase “Multiple streams of income” is almost always associated with multi-level marketing (or, as it tends to be called nowadays, network marketing) schemes. Some of the newer ones involve cryptocurrency, which is like Mary Kay for young men.

Which are all basically cons. I hesitate to use the term pyramid scheme because you are actually much more likely to turn a profit on an illegal no-product pyramid scheme than you are on a multi-level marketing scheme - 10% of the people that are in a no product pyramid scheme turn a profit, less than 1% of the people that join most MLM schemes make money.
The issue is not the pyramid structure, legitimate companies also pay some employees much more than others, is that it’s a closed or almost closed system, where virtually all of the income generated comes from other people participating in the scam, instead of outside customers - and “consultants” almost exclusively focus on recruiting other consultants instead of selling products to retail customers.

In addition to pushing the idea of “multiple income streams”, they will also talk about how frequently they get paid. You will seldom hear them talk about how much money they make, because most of them are making almost nothing.
The industry has made some very cursory attempts at self-regulation, and almost every MLM has a publicly available income disclosure statement that will confirm that less than 1% of consultants make anything more than token amounts of money - and the statements don’t even take into account the considerable sums spent on buying inventory, not to mention expenses like seminar costs, gas, and motivational materials.

In my opinion, these organizations shouldn’t even be legal, but conservative politicians have been successful on keeping them largely unregulated.

The largest and most noxious MLM, Amway, is owned by Betsy Devos’s husband. That one is a full blown cult, BTW.

If you hear the phrase “multiple streams of income”, you are listening to an MLM pitch. Run away.