A few years after the financial crisis in 2007/2008, an investment firm where I was employed, played an independent film for its staff, Inside Job, which I highly recommend you watch. The billionaire, George Soros, made a very compelling case in this film on why the Gramm-Leach-Bliley (GLB) Act of 1999, made the financial markets very unstable.
He compared the pre-GLB financial markets to an oil tanker which had safety measures in place to protect the ship and the fuel. Oil tankers realized the dangers of having one massive oil tank in its ship. When the oil sloshes around in the large tank, it causes the vessel to become unstable by the weight of the oil moving around increasing the risk of turning over the ship or steering it off course.
A resolution to mitigate this danger and make the ship safer was to implement critical safety measures. The safety measures implemented included dividing the large oil tank into smaller tanks to reduce the amount of movement of the oil by compartmentalizing it.
Before GLB, the financial markets worked similarly. The Glass-Steagall Act was passed in 1933 as emergency legislation "to restore confidence in the banking system" by separating how funds are commingled (adding oil chambers in the ship's tank, if you will). It ultimately separated commercial funding from investment funding, which oddly enough was deregulated in 1999 that eventually caused the 2007/08 financial crisis.
In the early 1980s, the United States began to see a period of deregulation. In 1982, the Reagan Administration deregulated savings-and-loan (S&L) companies as a result of "inflation rates and interest rates both rose dramatically in the late 1970s and early 1980s". This caused rapid growth in the industry but ultimately led banks to make risky investments with their depositors' money. "An incomplete and bungled deregulation of S&Ls in 1980 and 1982 lifted restrictions on the kinds of investments S&Ls could make."
The lifting of such restrictions now allowed these banks to make real estate loans without geographic limits.
As I am building a case here, imagine an oil tanker with compartments, and slowly each chamber is being removed allowing more oil to be combined into a larger tank. We get more movement (sloshing) which is increasing the risk of turning over the ship. Fast forward to the last decade, and we see with all the deregulation of the financial markets, financial institutions merged and took control making riskier bets. What we had in the last decade was one large oil tank.
We know, as a result, the worst economic collapse since the Great Depression. So what lessons can we learn from this when it comes to income?
Warren Buffett said it best, "Always have two sources of income" and "Never depend on a single income." These are words to live by.
I've been studying the financial habits of millionaires and billionaires for several years now, and there is a common trend. All earn multiple streams of income.
By comparing the oil tanker to our income, we can learn many valuable lessons.
Most of the world who work are solely reliant on one source of income. We work. We come home to eat dinner and have family time. The next day, we do it again. As life quickly passes us, we have become immune to the monotony of being reliant on a corporation or government entity for our income.
That's why the last few years I have taken the advice of the wealthy and started building compartments for my income. Should another crisis occur, and odds are, it will, you want to be sure you have walls made within your income tank so if one compartment gets hit and starts leaking, you have other secured compartments to keep the ship (your life) moving forward.
Here are several ways that I earn income, and I share this because if I can do it, so can you. My first several months, I made like $35. Nothing to brag about but I knew this road would be challenging, difficult, but not impossible. If you have the patience and take the time to construct your income compartments, over time, you will discover it is possible, and you are less reliant on one source of income.
Today, I am earning several hundred dollars each month from these sources, and it is growing each month slowly. Lewis Howes says "There's no way to become great overnight, but in the marathon of success, it takes a lot of intention to see you through each day of the journey."
In this article, you will 7 different ways to build your income compartments
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When I first purchased my Canon DSLR, I took a few online courses to help navigate the features and to explore the opportunities of taking amazing photos. As an avid hiker and kayaker, I wanted to record my events and share with those who lack the imagination of what the outdoors can deliver. Being outside with nature is one of my keys to relax and get away from the busy world.
While learning, I discovered several sites that informed me to sell photos. I first, there is no way anyone would buy my photos. I am new, and everyone else has so much more talent than me. But, because many photographers are using Photoshop and other photo tools, many photos lack realism and integrity.
I gave it a try, and many of my photos are selling each month. While I am not a millionaire by any means, it does earn me around $50-$80 per month. Not too bad for photos that I took months ago. If you have a similar passion, then I encourage you to sign up with Shutterstock Contributor.
#2 Amazon KDP
Having never considered myself an author, and still don't currently, writing ebooks and How To Guides on Amazon Kindle Direct Publishing (KDP) is a reliable way to reach a vast audience.
Writing ebooks are, and one of the reasons that you should consider this an option is because without being restricted to page numbers, you can write about anything and Amazon KDP helps you with the process of formatting and book cover.
While they do earn a commission, you can receive regular monthly commissions. With over six ebooks on Amazon KDP, my income is about $10 per month. Nothing to brag about and to be fair, I do absolutely no advertising on my books. But this is now passive income that I regularly earn helping me to add more money to my income compartments.
#3 Google Ads
Being a blogger, I hate the idea of posting ads everywhere on webpages. I found it annoying and refused to have ads on my website for the most extended period. However, with the rising costs of maintaining my website because of email services, social media platforms to streamline the content, etc., I've found it a necessary resource.
With Google Ads, this company does a decent job promoting services that can help my viewers. Because Dollar Otter is a personal financial website designed to help families achieve financial freedom, the items promoted are usually in this niche.
I've only been using Google Ads for a short period. So, I am currently earning pennies from it but, like any marathon, it takes time, and I've learned to have patience my content of delivery is what I am passionate about because delivering you impactful information that can change your life is what brings me joy and inspiration.
#4 Affiliate Marketing
You can technically call an affiliate marketer an online salesman or salesperson. While most of us hate to be labeled that, there are some benefits. With affiliate marketing, you control which items to promote. This is a fantastic opportunity because now you can promote products you believe in, not what the firm tells you to push. Also, you don't need a blog or a website to do it. Using the resources from your smartphone and social media, you have the necessary tools required.
For instance, a company I work alongside promotes products that help to change people's lives, Ultimate Bundles. While I don't promote every product from this company (because some of the resources don't match my niche), I know the people behind it and what they stand for, and that is key. Because I have fallen in love with photography and challenges of it, they offer a Photography Super Bundle course that is Amazing! That is why I promote it!
By promoting their products, I earn 40% of the sales price. Each product will have different commission rates. If you are interested in joining our community, I recommend you join us at Ultimate Bundles Affiliate.
Other ways that I earn commissions from affiliate marketing are with companies such as FlexOffers, Wix, Bluehost, and Tailwind. This is my second largest income producer.
FlexOffers is a marketing platform listing hundreds of companies seeking affiliates. After you register, you browse the listings and register which companies you desire to help promote. Each link reflects your earnings potential. It is a terrific way to filter through companies that only fit your niche.
If you decide to build a website, I recommend you chose one of the two. Having tried several sites, these two are my favorite: Wix & Bluehost. In the article, How to Start a Blog on Wix, I walk you through the process to get a Wix web site up and running.
It took me months of learning and trial-and-error to discover what worked and what didn't work. Because I want to help my viewers, I designed a course that gets straight to the point and I walk you through what has worked me to save you time in research and money.
My course sells on Teachable.com for $97 but for my audience only, use promo code FREECOURSE, and you can enroll and take the course for FREE!
After you complete the course and give me feedback, I will sign you up as an affiliate, if you desire, and you will earn 50% of the sale price (for example $97 price, so you could earn $48.50 for each course). Your 2019 is off to a great start! Just go to Affiliate Marketing Blueprint to view the curriculum.
Tailwind is a resource website to help bloggers, entrepreneurs, and others post content to social media channels. Its value lies in the ability to save time by scheduling posts, so you do not have to monitor your social media channels consistently.
#5 Sell Online Courses
You don't have to have a Ph.D. or Master's degree to teach online. Technology has made it easier than ever to teach courses online. If you have experience in a particular field, a life lesson that has turned your life around, trade or skill you can enhance, then I encourage you to teach the world about it.
Teaching online is my primary income driver ranging from a few hundred to low thousands per month--it fluctuates. I promote courses on two platforms: Udemy and Teachable. Both have its advantages and disadvantages, but I like both because of the ease to build and construct paths while simplifying the process for students to enroll and learn the content.
Below is a picture of one of my online courses, Mutual Funds: The Complete Guide to Better Understanding. You can see the format is clean and easy to navigate.
#6 Selling on Etsy
Yes, you can sell your crafts, items, and gifts on Etsy. For DollarOtter, I design and construct Budget Templates and sell on Etsy. If you are not familiar with Etsy, it is an online platform that sells and promotes many handcrafted, vintage, custom or unique items. Selling on the platform is so simple and easy, and my payments are made through Paypal.
#7 Dividend & Interest Income
Once your finances are in order, you should seek income that maintains or exceeds inflation. One of the worst enemies to your income is inflation. This risk erodes your purchasing power, and over time if you are keeping pace with inflation, your money starts to decay. It may not feel like it over time, but in the future, you will realize that your hard earned cash doesn't purchase as much as it uses to in the past.
While I am cautious in listing investments, I urge you to discuss with a financial planner to help navigate you through the vast array of investments that fit your financial profile and goals. Also, you should seek other ways by using resources such as Acorns which is a financial app to help encourage you to save money.
Much like the oil tanker, I have built six different income compartments to help secure each revenue source. I highly encourage you to take action to start making your income compartments to help minimize risk so in the event your primary income is lost, you have smartly executed alternate sources to keep your financial ship sailing in the right direction. It is a slow and enduring process but one that has so many rewards in the long run.
If you have any questions, feel free to reach out to me at email@example.com.