Alternative Income Source

Let’s consider how a business make money. Have a look the segment information in a listed company’s annual report. You will notice that the company’s operations are split into various segments. This could be geographical, brands, products groups, or customer groups. But the common feature is revenue can be generated from more than one source.

There's a motivation speakers which once said that you should aim to have an alternative income source. This allows you to diversify your risk and increase your earnings.

Your alternative income source can be odd jobs and may not always be recurring. In my view, one of the exciting outcome is it creates new opportunity. You never know where that opportunity will bring you in the future.

If you are thinking of what this alternate income source can be, it should ideally have one of the two elements: (1) It involves something you are passionate about; and/or (2) you can do it more efficiently than others. This allows you to be persistent to endure through the dry patches until opportunities arrives. After all, Rome is not build in a day.

Most people considers investment as an alternative revenue. I recall the countless times someone wanting to sell me an investment product says “let your money work for you”.

When it comes to investments, my view is that we often underestimate the effort required and simply choose to ‘follow’ others advice without doing your homework. To be good at something, one needs to spend time and effort; learning and practising it. Although gut feeling is important, I suggest that you have a systematic principle based approach when it comes to investing (which I will share in my coming post).