Financial Freedom Series: 3 Ways To Grow Your Income
Let me guess – you’re not inclined to take up another 8-hour job.
Well, you’re not alone. One job is enough to drain us of our time and energy. Just thinking about taking up another is already sending shivers down my spine.
If you have to take up two full-time jobs, I can only think that your financial situation must be dire. If so, it’s all the more reason for you to own this piece of knowledge.
Because this is NOT what this article is about.
Most of us think of active income as our job / bread and butter / nine to five.
That is rightfully so. But by generating more sources of active income, I don’t mean to go moonlighting.
Instead, it’s first about gaining the know-how. Such that the time and labour that you put in during the initial learning, testing and developing, will eventually develop into a smooth source of additional income. The best part is, you could even create multiple avenues while still having your full-time job.
So here we are, halfway through this series on the Road To Financial Freedom! There’s still more ground to cover, so be sure to stay tuned.
If you’d rather work on increasing passive income or reducing your expenses, be sure to check the earlier articles out. Whatever you do, don’t forget that the first step is to trust in the process and don’t give up.
1. Trade Actively
For obvious reasons, our first choice of increasing active income is via trading. Once you gain the know-how, it is possible to spend as little as 15 minutes a day (or possibly less) to grow your wealth. With the proper use of leverage instruments, you can quicken the process of wealth generation as well.
While trading can appear to be a similar strategy as compared to investing due to the instruments used, do not confuse the two. Investing involves buying, typically with some form of dollar-cost averaging, and holding the instrument for an extended period of time.
Trading, on the other hand, is done with the intention to sell within a short period of time. To trade is to risk your capital for profits. This is also why we often say, not to fall in love with the stock (or whatever instrument of choice). If it is time to cut your losses on a losing trade, do it. Then channel the funds towards another trade and repeat the process.
Rather than feeling attached to the money, treat trading like a sport. Focus on the process – by getting it right, the results will turn out just as you desire.
Of course, how much risk you are willing to undertake will influence your trading style. On that note, there are several factors to consider when it comes to trading:
- Timeframe – days, weeks, months.
- Risk appetite – conservative or aggressive.
- Instrument – stocks, options, futures, cryptocurrencies, etc.
- Portfolio-sizing – don’t put all the eggs in one basket, and don’t have too many that you can’t manage your trades.
Trading is a journey of self-discovery. The key is to find out what style of trading suits you best, and have a corresponding strategy to suit. Then, this source of active income will also be an enjoyable and stress-free process.
If you’ve always wanted to start but never knew where to begin, join us for the upcoming webclass where we answer the major questions of what to buy, when to buy, and how to buy.
2. Have A Side Hustle
Start small and do it freelance. Rather than thinking of it as a tiresome “hustle”, choose to go with something you enjoy, and that people are willing to pay for your product or service. You don’t need to be the best at it, but you do need to be good enough such that your prospective customers see value in what you provide.
By the way, nobody ever said that increasing active income isn’t an enjoyable process.
It always helps to work on your existing strengths. It could be a long-time hobby or a new-found interest. By aligning what you like to do with what you are good at, all you need afterwards would be some marketing to get the word out. A little research along the way helps as well, starting with the following considerations:
- Demand – is there a market for the product/service?
- Competitors – what are other people offering, and how is your offering different?
- Costs – materials/ingredients, labour, delivery/transport, marketing…
- Pricing – what would be a price that customers are willing to pay, that gives you a comfortable profit margin?
- Place – where can you attract potential customers, is it visible and easily accessible?
Leveraging on social media nowadays, it is not at all difficult to start a home-based business with minimal overhead costs. In fact, the number of businesses that came about as a result of the economic impact from the pandemic is rather heartening. Great products are sometimes birthed during times of crises. It helps that it doesn’t take the newspapers to know about them when they are already making their names on the internet.
Thinking locally (and also rather biasedly), tasty and pretty things could be an avenue for our foodie nation. Perhaps this story might serve as an inspiration and guide for those of you looking to work on a side hustle for more active income.
3. Be A Tenant Who Collects Rental
Last but not least is a strategy not commonly known, and much less utilized.
That is, you can still collect rental income, without the high costs involved with being a landlord.
In simple terms, it is a co-living business. How it works for you to first rent a property. Then, rather than you paying the rental, find other tenants for the property. The way to maximize this is to have multiple tenants – the tenants pay less than what they would for a property if they had been the sole tenant. At the same time, you would collect rental from multiple tenants, which help to finance the original rental cost. Then you earn the difference.
This is the beauty of the co-living business.
Of course, it is not as effortless as it may sound. You would need to add value to the property such as doing up decorations, adding amenities, having proper segregation of the rooms, etc. Also, the property owner needs to be fully aware that this co-living business is your intention when renting the property.
The key is to manage both the property and tenants well. Then, this method of increasing your active income will also become rather passive income over time.
These are just few of many ways to increase your active income. Oftentimes, our options are limited by our knowledge. We lament “if only I had known” or “if only I knew earlier (早知道)”, because we were simply unaware of what better things await us. On that note, while this article’s context is set in the West, you could check out what might work for you locally.
When your active income grows, you would be able to channel the funds into growing your passive income as well. Or perhaps, the motivation to exit the rat race would not be as strong, because working on it doesn’t have to equate to a laborious process.
Now that we’ve conquered both the Continents of Outflows and Inflows, we just need to go a little further to learn some wealth protection techniques. As the proverb goes, prevention is better than cure. Surely there is some wisdom which we can apply on this conquest of financial freedom.
After all, to fail to plan is to plan to fail. Better to protect your wealth than to be vulnerable to unexpected situations.
Stay tuned to the next parts of this series as we forge ahead into the terrains to be discovered and conquered, and focus on practical, actionable steps which you can take.
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