What is the biggest financial mistake a person in their twenties can make? Many people will have their opinions, but for me it’s putting all your financial eggs in one basket. Becoming complacent with your income can be a dangerous mistake. Too often people in their twenties still have that immature feeling of invincibility, as if somehow we are unaffected by external forces like unemployment and the economy. We think that our bachelors degree is somehow insurance against such tragedies. Well I’m here to save you from making such a terrible mistake. The fact is, no job is 100% reliable, and since not many of us are sitting on huge trust funds, we need to find other ways to ensure our own prosperity.
The solution to this problem is to begin developing multiple streams of income. I’m sure you’ve all heard those words before. You’re probably thinking, “But Ibrahim, I make X amount of dollars per month and I only spend Y amount of dollars per month (y<x) so I should be fine.” Well answer me this: How long could you live the lifestyle you are living now if you were fired from your job? 2 Weeks? 1 month? 2 months? I’m certain that most of you could not rely on your savings for more than 2 months.
So multiple streams of income… what does that even mean? It means you have systems in play that allow you to make a little money on the side. What type of systems are totally up to you. Some people buy and manage vending machines, others have online businesses. Some people mow lawns, and yet others are masters of selling their old stuff on eBay. What your side job is doesn’t matter, what matters is that it is capable of producing a steady amount of income and that if need be it could be expanded to make more. In other words, a small business that you could work full time if you lost your job and needed to make money fast.
Just so that you understand what I mean, I’ll share a few details of my multiple streams of income. I have a full time job as an E-Communications Recruiter at the university I graduated from. It pays a decent salary for a fresh graduate. I also have TwentiesLife.com and a couple of other blogs, which currently bring a very modest amount of income (though they could probably do better if I really tried). I’m in the process of starting a web design business with my brother, and I already have 4 web development projects lined up. I also write ebooks and build seller websites. I’m even learning to outsource web work such as SEO optimization and web research, to speed up these processes. Now I’ll tell you that even with all of these streams, none is bringing in significant dough (though the web design business will soon), but the goal isn’t to get rich off of your streams. The goal is to have ready-made systems that can become full time jobs if necessary.
I can tell you this much: If I got fired today, I’d still be able to pay my bills this month, and I honestly believe that by next month I could have my multiple streams of income making just as much as my salary does today. Not only is that job security, but it’s also job satisfaction. It means that if I decide tomorrow that I don’t enjoy working where I am, I can quit, and still manage just fine. Can you say the same? If not, I urge you to think about the skills you possess and find a way to make them profitable. Your financial security blanket will thank you.
