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Building an Income Hydra: A Guide to Income Diversification

Often times I find myself in a brainstorming session with my older brother. We typically discuss whatever happens to be on our mind at the time, such as politics, the ramifications of the oil rig explosion near Louisiana, and of course our future plans for entrepreneurship. Business ideas are tossed around, examined, and discarded. Some time back I proposed a bit of a hybrid employment lifestyle,  culminating together a number of different microbusiness or at the very least sources of income. The idea here is that diversification works and in tough economic times can help to shield you from the uncertainty and fluctuations that typically accompany self employment.

The hydra serves as an accommodating metaphor because it’s a mythical beast made up by a number of heads. When one head is removed, the creature lives to fight on another day and in fact new heads grow to take the others place.  When diversifying your income across a number of different sources, you are building your own hydra.  For each income source that fails there are others out there ready to take it’s place, and in fact you should be on a constant search for potential new sources. Some businesses have a longstanding value and may produce income across years or even decades, but others may have a limited lifespan and it’s important to recognize the writing on the wall if you’re involved in such a business (looking at you newspapers).

As an example let’s take a look at my current employment situation. The Mutual Fund that I worked at recently shut down it’s satellite office in favor of outsourcing the Shareholder Services Operation to a larger transfer agent. As a result I have about 3 months to put together a portfolio of income to support me in it’s stead. Here’s what I have so far:

Income Sources

Currently Producing Income:

  • Contractor for a Startup based out of San Francisco (Part Time): 64%
  • Freelance Writing for various clients: 23%
  • Niche Site Portfolio:  8%
  • Woot Arbitrage: 5%

In Development

  • Beekeeping
  • Bee Presentations

As you can see I’ve made some progress along those fronts and closing in on the salary I earned at my previous job, but there is still a lot of work to do. Ideally I’d like to expand out my writing projects (as it’s something I enjoy) and slim down the percentage provided from my part time work (although I expect it will provide an important foundation for some time to come).

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