By Chee Jo-Ey
DURING an economic downturn when layoffs and pay cuts are always lurking around the corner, you may want to think about diversifying your income streams to ensure greater financial security.
Sunway University economics professor Dr Yeah Kim Leng advises people to create multiple income streams circumferencing their core competencies.
Should your primary salary become compromised during a crisis, having alternative sources of livelihood can soften the blow.
People can look into entrepreneurial income by running a business in the e-commerce space that is very much in trend nowadays or if there’s a viable and reliable business plan, they can take on a sleeping partnership.
Even though there are fewer opportunities in challenging times, people can find something that they are passionate about and explore ways to make money out of it.
“The changing landscape can provide for opportunities to innovate something to cater to the current situation. Salaried workers should also strive to upgrade their skills and strengthen their network to move up the career ladder.
“You can leverage your skills to find a side income. In the present environment, there is an explosion of opportunities to help companies re-engineer their business systems,” says Yeah.
Also, companies are constantly thinking of saving costs and outsourcing a range of the tasks from sales and marketing to bookkeeping to smaller players like freelancers or self-employed workers.
Self-employed PY Lum, who owns neon signage production company Ohneos, recalls her experience juggling her full-time job as a visual merchandiser and passion project creating signage for advertising companies.
She advised people to leverage on the skills and network they build when working on a side business provided that it does not compromise their primary jobs. Having multiple streams of income has allowed her to earn more as well as gain exposure to different experiences and opportunities.
“I started the project as a supplementary income at first via online platforms to keep my costs small and the reach high. I needed income outside of work to support myself. I grew it for a year or so before it began to generate income that surpasses that of my main work, which is when I decided to focus solely on Ohneos. I’m still expanding my income streams now, especially during the Covid-19 crisis,” says Lum.
If you have assets such as land and properties, rental income is another option you can think of. The main appeal of owning a real estate is the steady cash flow but there are hassles involved in being a landlord including managing your tenants.
There is also passive income that can be generated from investing to maximise returns in savings. Start early when you have a long investment horizon and are able to take up higher risks and invest in equities while balancing your portfolio with fixed income assets.
As an investor, never put all your eggs into one basket and always look to diversify your portfolio as much as you can so that if the value of one asset falls, the others might not fall as much and could mitigate risks. – April 29, 2020
