The Importance of 2 or 3 Sources of Income
Having at least 2 or 3 sources of income is very important these days. Jobs can be lost. Social Security is under attack by some politicians. The numbers of those who have pensions is declining. We are left to help ourselves more and more. Because of these trends many more people are starting their own businesses.
According to National Institute on Retirement Security a “new analysis indicates that Americans in nearly every state will fall far short in meeting their economic needs in retirement.” California, Florida and South Carolina are among the LEAST PREPARED and Wyoming, Minnesota, Alaska and North Dakota are MOST PREPARED.
Pensions are Declining
Statistics show that the numbers who have pensions is declining. In 2006 almost half of households had access to pension income. I believe the numbers are decling now but I don’t have specific figures.
Social Security is Not 100% Secure
There has been a lot in the news about Social Security not being all that secure. “Social Security trust fund projected to tap out in 2034” was the headline I recently saw on line.
Social Security Was Never Intended To Be A Total Retirement Plan
Social Security only covers about 39% of retirement expenses for most people. Right now 37% of future retirees are almost totally dependent on Social Security. This group has $50,000 or less in savings.
Richer Americans Have Multiple Sources of Income
The rich are good examples for the rest of us when comes to money. They have at least 2 or 3 sources of income.
Some have many more than that. So lets follow their lead and have several incomes coming in. There is security in multiple incomes.
More Sources Equals More Security
I will say it again. There is security in several sources of income. If one fails the others can take up the slack.
There is no better feeling than knowing you are going to be ok no matter what happens. If you are like me financial security is very important. I estimate that only 25% or less have a really strong need for financial security. That may explain why so many are not prepared for retirement.
Add Sources of Income
So we need to add sources of income. Pensions, investments, real estate, side businesses are some of the potential sources. Every one’s circumstances are different. If you don’t have a pension then you need the other incomes even more.
Investments are One Source
Only a relatively small precentage (14%?) have $100,000 in a 401k. For those folks who have less I recommend putting in the maximum. Aim for 15% or more of your income.
One young man at the time I recommeded putting 10% into his 401k., Aim to make 10% on his money. Continue to contribute 10% for forty years and he would be a millionaire. He now has a lot more than $100,000. I urged him to more into his account in the early eighties I believe. He showed me his check stub to prove that he was really putting in 10% of his income.
Now I estimate he has accumulated close to $500,000 or more. That puts him in the top 15% or better. He is on his way to having one of the keys to a happy retirement.
Side Businesses are Another Source
Side businesses are another source. If you have never had a side business, now is a good time to start.
You need the money. It gives you a purpose to your retirement. It gives you a core pursuit. It can be FUN! And it is never too late to start a business. Fifty one percent of businesses are started by those over 50. and up to 80..
Turn a Hobby into a Business
If you wonder what to do in your side business, you can turn a hobby into a business. For example I had a blog as a hobby for the last two years . I did not make any money. Then I decided to start another one with the purpose to add income.
See my article on affiliate marketing. Then take a look at my Review of Wealthy Affiliate. This will show you exactly what I am doing now. I am learning a lot. It is fun, too.
Then I recommend you take a look at the Wealthy Affiliate website and sign up for free for 7 days. You have nothing to lose.