Trying to make a living as a self-employed person is tough. Sure, you might have the occasional project that pays well, but most freelancers need to grind it out on smaller jobs that barely cover their expenses. So, it's time to get your financial ducks in a row.
With the economy being the way it is, it's essential to diversify your income stream so you don't struggle when one falls off the map.
We'll give you tips on building a sustainable freelance career and creating a financial safety net. Follow them, and you will hopefully never struggle again to make ends meet.
Perks of diversifying your income as a freelancer
You must be smart with your finances when you don't have a full-time job and the safety net of a fixed salary each month. Even regular job holders need to think about other income streams. The COVID-19 pandemic has already shown us what a rainy day could be like. And the threat of a looming economic recession does not promise a bright future either.
Events like these have a significant impact on businesses. So, diversifying your income streams can help you weather any storm. Also, freelancers must be flexible and adaptive if they want to stay afloat.
Let's discuss the benefits of having multiple revenue streams besides your day job:
You won't be affected too badly if and when one income stream dries up. You'll still have other sources of income to fall back on, which will help cushion you from tough times.
When you create multiple income streams, you will get more freedom regarding working hours. You will have money to survive even if the market takes a downturn.
Creates growth opportunities
Creating multiple income sources means you have access to different opportunities and markets. As long as you're willing to expend effort and learn new things, this can lead to bigger paychecks in the future.
Can expand your skill set
You will learn new things and improve your skills by working in various markets. And that's valuable in any industry. This way, you can overcome challenges and stay ahead of the curve.
Even in difficult times—like the current economic recession—opportunities will still be available for talented individuals like yourself.
Prepares you for changes
Relying on a single income stream can cripple you financially if the economy takes a nosedive or your business model becomes obsolete because of new technology.
Consider the latest digital image generation tools like DALL-E and similar AI models that could be an alternative to illustrators and animators.
But you can protect your livelihood by income diversification and learning to generate passive income from various markets. If one sector of the economy takes a dip, you can rely on another.
11 Tactics to diversify income as a freelancer
As a freelancer, you know the drill—either too little or too much work, no fixed income, and non-existent work-life balance. It sounds rough, but it's a reality for many of us.
But if you can create multiple income-generating sources, you can safeguard yourself against unpredictable changes in the market. Also, different earning sources give you financial relief and the freedom to do the work that you love.
Follow these ideas below to generate multiple income streams and earn more money without taking much financial risk.
Tactic 1: Sell physical or digital products
Luckily, there are several ways to turn your hobbies into an income stream. You can sell everything online, be it physical or digital products.
Do you like crafting, knitting, or painting? Are you a good photographer, writer, or calligrapher? You can start an online venture by selling products, from jewelry, knitwear, and photographs to eBooks, apps, and SAAS software.
It takes some effort and planning to get started in the digital space, and following these steps will help:
Step 1: Research the market
Figure out what products people are buying and then find similar products you can sell. It will help you decide on the best product category and accurately target your audience.
Step 2: Find a good e-commerce platform
You'll need a platform that's reliable, easy to use, and has plenty of features for sellers. Finding one with a good reputation is essential, so your customers feel safe buying from you. Consider using something like Etsy, Ruby Lane, Storenvy, and others.
For digital products, there are a bunch of platforms, including Payhip, Sendowl, and Squarespace.
There are also dedicated marketplaces for products like eBooks, stock photos, video footage, etc.
Step 3: Set up a website
Set up your digital storefront if you don't want to share revenue with a third-party platform. However, this may require more work because you need marketing skills to attract customers.
Once you have a solid foundation, focus on the marketing strategy. If you do this correctly, your hobby will eventually become an income stream you can rely on.
Tactic 2: Start a POD business
If you are good at painting, graphic design, and illustrations, the POD (print on demand) business could be your ideal cash cow. It's a great way to get your creative juices flowing and make money simultaneously.
POD businesses let you create physical products using print-on-demand technology. It means you don't have to invest in expensive equipment or inventory and don't need to worry about shipping and returns.
Many platforms, including Printful, T-Pop, and Lulu Xpress, allow uploading your designs and choosing the products you want to sell featuring those designs. When a customer orders, that company handles production, shipping, and payment collection. You will get your commission for each qualified sale.
Running a POD business can be rewarding if done correctly, as it can offer you both financial security and creative freedom. So if this is something that interests you, start investigating the options available today.
Tactic 3: Create and sell online courses
If you are good at something, create an online course about that topic and sell or monetize it. For example, there could be a course for "How to write a killer resume," "Create a logo with Adobe Illustrator," or "The ins and outs of TikTok marketing."
Many creative industries would benefit from having more content created by professionals (like writers, digital marketers, or visual artists), so there's no doubt that courses in these fields will be popular in 2022.
There are several options for monetizing your courses. Upload them on platforms like Coursera and Udemy, where learners can enroll for a fee. You can also sell them through your personal website.
One of the best ways to sell your courses is through a freemium model. It involves offering access to the course for free but charging for additional premium features or material (for example, access to more lessons or PDFs).
Creating a course can be easy if you have the right tools. There are many free online resources and plenty of affordable paid tools. You could structure your course in many different ways, from offering a full-blown system with materials, exercises, and extra resources to providing just the lessons or activities.
You can write your course from scratch or purchase an existing one and modify it to suit your needs. Plus, there's always the option of creating a hybrid course incorporating both writing and video content.
Tactic 4: Earn through coaching and consultation
Suppose you are an expert in a niche like social media marketing, affiliate business, or earning online. In that case, you can offer coaching and consultation services to others, including solopreneurs and small agencies.
Selling the service will be easier if you already have an established blog or a huge social media following. Also, you can collaborate with other marketers and advertise your services through their blogs or podcasts.
To get started, you'll need to identify your clients' problems and develop a tailored solution for them. You should also remember marketing principles – target your audience, create unique content, and promote it effectively. Once you have these down, the rest will be easier.
You can offer your services as a one-time occurrence or break them down into several sessions. In either case, the key is to provide value and make sure that your clients are happy with the service they receive.
In many cases, people are willing to pay for advice because it's challenging to find expert insights.
Tactic 5: Earn from the real estate business
Real estate investment has financial risks and requires an upfront investment. But if you're cautious and plan well, you can get a good return without risking too much.
However, no real estate investment is entirely risk-free, and all methods are highly susceptible to economic downturns. Also, your money can be locked up for a long time.
You can generate additional income streams from the real estate field by following these strategies:
Crowdfunded real estate
Invest in residential and commercial rental properties with others. There are various platforms to get started; some don't even charge investor fees. Knowledgeable investors vet the properties on these platforms, and you can even get an estimation of your return before investing.
Streitwise—a real estate crowdfunding site—does not even put accredited investor restrictions. So you can participate in this market without worrying about getting your finances approved by an institution like the SEC.
Rent out your property
One of the most important things to remember is that it takes a lot of hard work and dedication to be successful in this industry. However, if you're prepared to put in the effort, there is no reason why you can't earn a good rental income.
Your first step is to find tenants for your properties and do this by researching demographics like age, income, and location. Once you understand your target market, it's time to start pricing your properties correctly. Prices that are too high or too low will likely not attract the right kind of tenants and may cost you more in the long run.
Also, having a property management service in place is crucial, so everything runs smoothly. It includes creating contracts and setting up deposits, ensuring all repairs are done correctly, and a handful of other related tasks. You'll avoid any potential headaches down the road by having a system in place from the beginning.
Stay up-to-date with current laws and regulations regarding rental properties to keep your property safe and compliant. It's essential to stay informed about changes as they happen. Plus, do your research on tenant screening to avoid any legal issues down the road.
Do house hacking
Even if you don't have a spare property to rent, you can still keep the cash flow running through house hacking. It involves renting out your spare bedrooms instead of the entire house or apartment. For example, if you live in a 3-bedroom house, you can easily rent two extra rooms.
Register the rooms on a platform like Airbnb, or you can get tenants by advertising in local newspapers. If you are lucky, the rent money from your roommates might be enough to cover the cost of your primary residence. Also, house hacking doesn't come with all rental property hassles and maintenance needs.
Tactic 6: Get into stock market investment
Investing your money in the stock market can yield a greater return on investment (ROI). But you will need some upfront capital, the ability to take some calculated risks, and have the patience to reap the rewards.
There are a few things you need to keep in mind when starting with investing in the financial markets:
- Take advice from an experienced financial advisor if possible. An expert can help you navigate these uncharted waters safely.
- Do your research. Make sure you understand the risks involved before investing in anything.
- Always stay up-to-date on developments in the stock market. You will know which stocks to buy and sell by keeping up with industry news and developments.
- Stick to conservative investments. Don't go all-in on a single stock or sector of the market. Instead, spread your money across various stocks and sectors so that you have a better chance of making a profit.
- Use a broker or exchange-traded fund (ETF) to make your investment choices more transparent and easier to understand.
- Stay disciplined. Don't overinvest in any one stock, and don't panic if the market takes a downturn from time to time. Also, never invest money that you cannot afford to lose.
- It can take time for stocks to rise or fall in value, so be patient and let the process unfold over time.
Tactic 7: Start blogging
Blogging is one of the most effective ways freelancers can build their reputation and connect with other professionals in the same field and potential clients. It can give you the required exposure to build your authority in a niche and establish yourself as an expert.
Write in your free time and earn extra money through these monetizing strategies:
- Sell advertising space on your website or blog. Google Adsense and various other Ad Management services allow you to make money from display ads.
- If your blog has enough visitors, sell sponsorships or subscriptions to your content to secure an ongoing income.
- When you are an authority in a particular niche, others will pay you money for publishing guest posts and sponsored content on your website.
- You can charge for eBooks, templates, or other downloadable resources that you create.
- Do affiliate marketing. Promote products from various companies and earn commissions for qualified sales.
Tactic 8: Earn from the social media following
If you're like most freelancers, you probably rely heavily on social media to stay in touch with clients and colleagues. But what if you could earn income from your followers in a different way?
You can earn a considerable amount from sponsored posts if you have a large following on social media platforms like Instagram, Facebook, or TikTok. Companies will pay you to make sponsored posts promoting their products.
Kylie Jenner earns a whopping $1.2million per sponsored post, and her other sisters are not lagging too much behind. Think about making only a fraction of the money. Feels good, right?
You can also use your social media presence to market other products or services you know about or use personally. It is an effective way to generate leads and increase sales for other businesses you work with.
Facebook and YouTube pay their video content creators well. Whether your content is funny, silly, or educational doesn't matter. You can earn a good amount of money if you have a decent number of subscribers who actively watch your videos on your Facebook or YouTube channel.
Tactic 9: Start a podcast
Start a podcast if you like to talk about a topic instead of writing content. You can get a large audience from the get-go if you are already a familiar name in your industry. If that's not the case, don't worry. A good podcast will gain traction eventually.
There are tons of ways to monetize your podcasts. Here are some of the most popular ones:
Podcast sponsorships: When a company or individual sponsors your podcast, they become the show's official sponsor. You can choose to sell sponsorship for a segment, episode, or the entire season. This means that they will get advertising space on your show and occasional guest appearances by you and other cast members.
Paid inclusion on shows: Some podcasters are offered paid inclusion on their shows, which means you will be paid a fixed amount per episode in return for featuring someone or some products. It could be anything from interviews to entire episodes devoted to promoting a single product or service.
Collaboration with other podcasters: If you have some exciting ideas for podcasts that you think would be good candidates for mainstream exposure, partnering up with other podcasters who can help market and distribute those shows can be an excellent solution.
Offer premium content: If you run a popular podcast, the audience will be interested in spending more money for exclusive content, including exclusive interviews, behind-the-scenes footage, etc. Put them up for paid access through a website or the podcasting platform. You can also charge for access to transcripts or recordings of your show.
Offer consulting services: You could also offer consulting services related to creating and marketing a podcasting show. It could involve helping others create and launch their podcasts or advising them on how to market and monetize them.
Subscriptions: Many people listen to podcasts for pleasure, but others use them to supplement their work or education. If you host an insightful or helpful podcast, you can generate income by charging subscribers for access.
Donations: Some podcasters offer the show free but ask the listeners to donate if they like the content. If your podcast is educational or entertaining, people will happily donate to keep it running.
Merchandise: Earn more money by designing and selling t-shirts, mugs, hats, and other items related to your show. This can be a nice supplemental income stream if your content is popular enough.
Tactic 10: Do affiliate marketing
As a freelancer, generating a steady income stream is crucial for your survival. And affiliate marketing can open multiple streams of revenue.
You can earn passive income by working with publishers or enterprises and promoting their products or services. If people purchase products through your affiliate links, you receive a commission.
Marketing becomes more manageable if you already have a website with enough visitors. For example, if you run a health and fitness blog that gets 300k visitors per month, you can easily promote products related to that niche.
There are a few things you need to do to get started with this kind of business:
- Find a partner you trust and feel comfortable promoting their products or services.
- Choose promotional materials that will resonate with your audience and match the tone of your site.
- Don't promote low-quality products. People will buy through your links because they trust your judgment. So, don't do anything to breach that trust.
- Get creative with your affiliate marketing campaigns. Traditional advertising is still an important part of the equation, but you can also market the products through social media platforms.
- Be sure to track your results carefully so that you can fine-tune your strategies as needed.
Tactic 11: Start a dropshipping business
Dropshipping is a business model where you sell products without managing an inventory. You will work as the middle person between the supplier and the customers.
To start a dropshipping business, find a supplier of products that have high demand in the market or to a specific group of people. Having access to a larger pool of buyers means the possibility of more sales. The key here is to source the products from a supplier at a low price and sell them to your target customers at a profit.
You will then need to set up a storefront on an e-commerce platform like Shopify or Volusion. It's crucial to fix accurate product pricing to earn a healthy revenue.
How to manage and organize multiple streams of revenue
Generating several revenue streams means you need to work with multiple clients on various platforms. And multiple running projects make it challenging to keep track of what's going on and where your next paycheck is coming from.
It can be tricky to juggle different deadlines and manage multiple conversations, but you can make it work with some effort. With a tool like Indy's Tasks, it'll be a breeze to work with several clients at the same time.
The task management software keeps track of your projects and tasks so you can access them with a few clicks. It lets you see the progress of each assignment, the due date, and payment information.
You can also use Indy’s Invoices to streamline the billing process. No more waiting for payments to come in or chasing down payments that haven't been made yet. Just send your client an invoice and get paid.
Indy's minimal and neatly-organized UI and integration of efficient productivity features offer an excellent user experience, giving you nine different productivity tools to help you manage your freelance business from beginning to end.
Send better invoices with Indy
Indy Invoices makes it easier than ever to send invoices that look great and help you get paid fast. Accept major payment methods like PayPal and Stripe.
The final word
Now that we've listed several ways to generate extra income as a freelancer, it should be clear that this career is not limited to just writing articles or designing websites.
This article merely scratches the surface of what you can do with your extra time and energy. How far you can go in the money-making game is up to you.
Remember that financial freedom needs proper planning and strategizing. If you have already started experimenting with different ways, keep tracking your earnings and budgeting carefully. Happy earning!