In 1959, a Volvo engineer named Nils Bohlin saved a million lives with a single idea. Back then, cars used a two-point seat belt, which only crossed over the lap. This was better than nothing, but many passengers were still injured or killed during car accidents. Nils realized that by adding a third point to the belt which crossed the shoulder, he could dramatically improve passenger safety. This new idea became standard in the automobile industry, and in the 60 years since his invention saved well over a million lives and prevented countless injuries. All it took was moving from one strap to two. This same idea – the power of one to two – can be applied to your financial life as an early career professional.
The Power of Multiple Revenue Streams
Understandably, during your training you were probably more focused on moving from zero to one. Getting your first job as a professional and finally earning a paycheck is a huge moment, and worth celebrating.
But just as a single strap leaves you vulnerable in a collision, a single paycheck may not be enough to provide financial security. Unemployment or unexpected expenses can happen even to the most qualified professional, and multiple income streams provide strong protection against dire financial straits.
Plus, you have bigger financial goals than just “Don’t go bankrupt.” Take a moment and let yourself dream for a minute (seriously, go ahead.) Think about the financial goals that really matter to you, and write down a few. You might come up with things like:
- I want to feel secure when I look at my bank account, not fearful
- I want to donate to causes that I care about
- I want to be able to leave a job I hate without worrying about paying rent
- I want to give gifts to loved ones that will really make them smile
- I want to finally take that trip I’ve always dreamed about (once travel is safe again!)
Whatever goals you came up with for yourself – they matter. And you can reach them faster with multiple income streams.
The Path to New Income
When building new income, there are two main approaches you can take.
The first approach is to develop an active income stream. Active income is the kind of income you’re used to. You perform a service, and you get paid for your time or for the finished product. For instance, when a conference hires me as a keynote speaker, I get paid to deliver my talk (thanks, conferences!)
The major benefit of active income is that the payoff is immediate. As soon as you do the work, you get paid. And if you can fill a real niche, you can earn a much higher wage per hour than you can at your salaried position. For instance, I provide online marketing help for therapists, and I earn more per hour than I do when I meet with my therapy clients.
However, active income has some drawbacks too. For one thing, you don’t get paid for the time you spend marketing yourself or looking for your next client. For another thing, if you don’t work, you don’t get paid – if you go on vacation or can’t find another client, your active income will evaporate.
There are a lot of examples of active income, but some of the approaches that work the best for the graduate students and early career professionals are:
- Tutoring and teaching
- Consulting on an area of expertise
- Personal assistant work
- Freelance writing
- Public speaking
The Potential of Passive Income
The second approach is to develop passive income. Passive income is where you create something, and it generates money for you over time. For instance, I wrote a website with social skills advice. Even during periods when I don’t work on the site at all, it still earns me money any time a website visitor clicks on an ad or buys one of the books I wrote.
The major benefit of passive income – well, it’s passive! You can take a break and still get paid. And if you can set up multiple sources of passive income, you can ultimately reach a point where you get a lot of money coming in every month without having to do any work at all.
Of course, passive income has downsides. You have to put in a lot of up-front work before you see a single dime, and there’s no guarantee you’ll ever get paid at all.
As with active income, you can approach passive income in many ways. Some of the approaches that work best for a typical Time2Track reader would be:
- Self-publishing a book on Amazon or Audible
- Making an online course on Udemy
- Starting a YouTube channel
- Building a website and using affiliate links/ads to generate money from readers
What Approach is Best for You?
Well, who said you had to choose? The best approach is usually to try a little of both. Perhaps you provide a tutoring service, but you also write a study guide. Your tutoring clients might buy your study guide, and your study guide might encourage people to sign up for your tutoring service. Over time, you can choose to focus more on one or the other based on the results you get.
Of course, it’s also okay to start small and just focus on one. Building active income makes sense if you want results quickly, but you’re also willing to invest a lot of time in the short term. Building a passive income stream makes sense if you don’t mind waiting for results, and you’d rather build your business at your own pace.
How to Get Started
At this point, you might be thinking “I get it – multiple income streams are good. How do I make that happen?”
Here’s what I suggest as a basic strategy.
Step one: Identify your strengths and the problems you can solve
As an early career professional, you have a deep wealth of expertise. Even at your early stage in your career, you have more training and knowledge than most people on planet earth. But it can be hard to realize that, because you are comparing yourself to other professionals, not to lay people.
So it’s helpful to do a strength inventory. For instance, if I imagine a hypothetical early professional just out of graduate school, they might have specific expertise in:
- Managing academic stress (they just went through grad school!)
- Time management and organization
Take a few moments and come up with a similar list for yourself. If you get stuck, ask a friend or mentor. It can be easier for someone else to see your strengths that you take for granted.
Step 2: Identify the problems your strengths equip you to solve:
Next, take your list of strengths and start to think of what kind of problems those strengths could equip you to solve for other people.
For instance, looking at this list, our hypothetical early professional might be able to:
- Help other students succeed academically (through tutoring, recording YouTube videos explaining psychology concepts, etc.)
- Help busy and stressed professionals organize their life (through personal assistant services, writing a book with tips, etc)
- Help overwhelmed parents feel less stressed about their kids (through babysitting services, personal space organization services, designing charts that can be used for to-do lists and tracking behavior, etc.)
Again, try to come up with your own list, based on your unique strengths.
Once you have your list, check in with yourself. See if any options feel exciting for you. Setting up a second source of income should feel at least a little fun, so feel free to keep brainstorming or discuss with others if you can’t find anything that resonates with you.
Step Three: Give something away
Once you decide on a plan, there’s one more step to complete before you can start earning.
If you want people to pay you, they need to trust that you can help them. To build that credibility, your best tool is giving something away.
Write some blog posts or a free ebook so people can see your insight. Make a YouTube video demonstrating a concept or skill. Give away some of your services for free (or charge a super low rate) in exchange for a testimonial or an addition to your portfolio.
Step 4: Charge what you’re worth
After you build a little credibility, the final step is to start to charge for your expertise.
Figuring out how much to charge is a tough challenge. But there are a few universal principles that will be helpful no matter what:
- Charge based on your output, not your input. Instead of choosing a price based on how hard you worked, charge based on the value you’re giving. This also means you can earn more without working harder if you can figure out how to make your services more valuable to your client.
- Charge more than you think you should. Almost everyone undercharges early on (I certainly did!) You can always lower your prices down the road if they are too high, but it’s harder to raise your rates once clients get used to them.
- If possible, give people two or three options to choose from – with some cheaper and more basic, and others more expensive but with some extra bells and whistles. That way people will pay you more if they’re interested in a more premium option, and if they can’t afford the bigger option, they’ll still pay you something instead of not being able to afford you at all.
Step Five: Start small, but get started
When my therapy clients feel overwhelmed by the thought of making a big change in their life, I ask them “How do you eat an elephant?”
The answer is, “One bite at a time.”
Setting up multiple income streams is a big task. It takes a lot of time, a lot of effort and (probably) a lot of internal work to push past doubts and insecurities.
But the potential reward is big too. Those financial goals you thought of earlier? It matters if you reach them.
So take your first bite of the elephant. Open up your calendar and set aside a little time sometime this week to research options for building multiple income streams, or to ask advice from a friend, or whatever else would be a good first step for you.
You can start any way you want – but start.
Interested in reading more from Daniel Wendler, PsyD? Check out his articles here, covering topics like writing for the web and optimizing your LinkedIn profile and website.
- Why Every Therapist Needs a Website (and How to Get One) - July 29, 2021
- Creating Multiple Income Streams as an Early Career Professional - January 6, 2021
- How Therapists Can Write For The Web…Without Boring Their Readers - May 3, 2016