One of the principles of financial preparation is income diversity. Income diversity requires that you cultivate different revenue streams in order to prevent you from becoming too reliant on one source of income.

Consider:  If you rely entirely on your employer for your income, if your hours are cut, or if you lose your job, you are in big trouble.

Income diversity allows you to have something of a safety net. In many cases, your alternate sources of income may not make up for a full time day job. However, other income sources can ease the burden, and help your emergency fund stretch a little bit more.

 

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