What money streams do you rely on? Many of us are used to depending on a wage or salary from our jobs. But all good things must come to an end, and our paychecks are one of the money streams that will end in retirement. So what do we do to compensate? Let’s consider 7 streams of income we can draw upon in retirement.
Believe it or not, once upon a time this was the ONLY stream of income people relied upon when they retired. Thank goodness times have changed, because pension is not always available. I had to laugh because Miriam Webster’s online “simple” definition of pension is “an amount of money that a company or the government pays to a person who is old or sick and no longer works.” This is really a pretty accurate, yet blunt, definition. Unfortunately, not all employers offer pensions to their employees anymore.
We address Social Security to some degree in “How Secure Is Social Security?” As intended, Social Security is a helpful supplement to your retirement income. Don’t necessarily rely on this as your only money stream.
SAVINGS AND INVESTMENTS.
This stream of income includes your bank account savings, certificates of deposit, stocks and bonds, whether held individually with a transfer agent or broker, and mutual funds. These pay interest and/or dividends, and you can opt to have this reinvested or paid out to you directly. You can also draw down the principal as necessary to cover expenses. A lot of millionaires live solely on the dividends and capital gains their investment portfolios pay each month. Their investment portfolios were handled by wise strategists, and most of us haven’t been so fortunate. If you are still young, find an investment adviser who can help you be the next millionaire by wisely investing your current income streams.
What a great asset to have! There have been mixed reviews on owning real estate lately, but if you plan to hold real estate for the long term, the benefit you can derive from the income can be great; in fact, this can be one of your best money streams. While it is not guaranteed, as you may lose a tenant before another tenant is found, with good management, you can avoid those shortfalls. The important thing here is to buy at the right price at the right time. Keep your eyes open for those foreclosure sales. Pay off mortgages as soon as you can so that you can maximize the rental income and only need to fund taxes, insurance and maintenance costs.
Items 1-4 are the more traditional examples of money streams most of us think about. But let’s get creative, because in retirement these first four streams may not enough when you factor in the volatility of the market, the instability of Social Security into the future, etc. So what else can we do to have the financial means to support our retirement? Look at the following opportunities and find one or more that fit for you.
WRITE AND/OR SELL E-BOOKS.
Don’t overlook this as a viable money stream. It’s just one of the multiple revenue streams available to any of us. While not everyone is a writer, we all have something to say. E-books are taking over, and many people are opting for the convenience of reading on their tablet as opposed to having to hold, carry and store multiple books in volume form. I, personally, prefer to hold a book, physically turn a page, etc., but there is money to be had by selling an e-book. Many people find it easy to write a 60-80 page e-book, and with a little online networking, the money streams in.
SELL ADVERTISING ON YOUR WEBSITE BLOG.
Now this assumes you have a website blog. If you do, you can sell space on your site for ads (just like leasing space on your real estate for a billboard!). Being part of an advertising network can be lucrative. There are different types of networks available.
CPC networks (or pay per click, i.e. Adsense) – these are great if you have a niche website and search engine “organic” traffic. You make a little money for each person that clicks. The amount you make per click can range between 5 cents and $100! CPM networks (pay per impressions, e.g. Taboola) – great if you get lots of traffic to your website, particularly from social media. Performance Ad networks (pay per action) – great for affiliate marketers and SEO niches
Once you have a website and a direction, you can find affiliates. Affiliate marketing happens when you promote another company’s products and earn a commission by doing so. Find a product you like, then promote it to others, earning a little profit for each “referral” you make. There are a lot of companies out there that have affiliate programs. Who doesn’t want someone to help sell their products? And, the beauty for you is that you don’t have to invest your time and resources in developing or creating the product to sell. This is my own favorite, and I’ve found a great resource to help with building an affiliate marketing business!
CREATE A PRODUCT.
On the other hand, you might develop a product yourself and offer commissions to others to function as your sales force. Ask yourself, what do I have to offer? Everyone has a personality, and how you differentiate your value will help you resonate with others. Now you need to market yourself and your “product”. Share your knowledge. How can you benefit others with your knowledge? These are all questions you can wrestle with in determining what your “product” should be. Maybe you want to ask your network and get their feedback. Once you have a focus, find a mentor to help you create and launch your new product.
IMPORT AND SELL.
This may seem odd, but if you buy items in bulk from overseas, and then sell them on Ebay, for instance, there is money to be had. The downside is this is very hands on, that is, on the fulfillment side of things. You receive a box of goods, now you have to ship it out. Perhaps you can partner with someone to do that for you and pay them for their trouble. You can also investigate a drop ship option where the items can be shipped directly from overseas. This is not always the best plan, as you lose a little of the control, but it is certainly an option to investigate.
Okay, so I added a couple extra! There is nothing magical about the number seven; and this is certainly not an exhaustive list of the money streams available to help set you up for retirement. Start with this list and develop your own 7 Streams of Income. By looking at these suggestions, we are hopeful that you will be in a much better position to either retire when you are ready, or add some income to your current retirement money streams to help you afford the retirement you’ve always dreamed of. Step out of your comfort zone and try some of these options. You’ll be glad you did! Let me know how it goes for you! I’d love to hear from you in the comments below.