What the Pandemic taught me about income streams

So you got yourself a job, working 9 to 5 and thought you’d be safe income wise. You make enough to pay your bills, fill the gas tank and maybe eat out a couple times per month without having to scrape the bottom. That was the reality for most before the COVID-19 Pandemic hit the global community hard. Borders closed up, factories closed down and all non vital services shut down to prevent a spread of the disease. From a disease control viewpoint this is all well, and the right strategy. Your wallet on the other hand might feel differently. Many people have for the first time in their life lost their income, as their employer has shut down during the pandemic. So your expenses are the same, but the income has dried up… now what?

If you ask people about their investments they can all tell you how important diversification is. How you should spread your bets, and not throw all the eggs in one basket. So the million dollar question… Most people would never risk all their money on a single investment, but most people DO risk their personal finances on a SINGLE income stream. See my point? This is where the power of diversification comes in. You should set up your finances, with the same strategy as your investments. I currently have three sources of income and aim to have five before we wrap up 2020. Now let me draw a little picture to show how my wallet is planned out.

As you can see in the figure above I have three sources of income, which all end up in my account. From there fixed expenses such as mortgage, car loan, power and phone moves on automatically to a separate account. I do this to make sure that fixed expenses always have coverage, and it shows a clear picture of how much is left after living expenses. If I was perfect, everything left after fixed expenses should go toward expanding the Dividend portfolio. No ones perfect. Instead I usually end up putting 100$ into the portfolio, and go on with my month. At the end of every cycle I push whatever is left in the account into the dividend portfolio, and start over again for next months cycle. I wrote an article about…

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