A basic rule of investing is that you should build a diversified portfolio that includes different asset classes – stocks, bonds, cash – and different holdings within each class – stock in different companies, a bond ladder, CDs – to give you exposure to gains in different sectors and some downside protection when times get tough. That’s a great strategy for the money you already have, but what about the money you still hope to earn? Does your money come from different sources, or is your entire livelihood dependent on one stream of cash? What happens when the drought comes and the stream stops flowing?
Here are a couple of thoughts to consider on how you can start building some stability into your income portfolio (all of it in your household) and reduce the risk of dependency on your employer.
First, if you are married, look at ways to diversify careers and industries within your family. My wife just finished nursing school and is launching a new career as a Registered Nurse. I don’t work in healthcare, so we have some new found diversification (and an extra paycheck).
Second, brainstorm on ways to create alternative income streams. Unless you are in an employment situation that forbids outside business activities, chances are good that you have skills that you can turn into a side business. I have a close friend who turned a talent for woodworking into a small business making custom pet feeders. Another leveraged public relations skills into a side consulting practice.
Third, network like crazy and give freely of yourself and your knowledge. The more you do to help people with no expectation of return, the more likely you are to get help when you need it. You may also be presented with opportunities that would never have come your way otherwise.
Think about your income the same way you think about your investments. Remember those colorful pie charts that came in your 401(k) package? More color means more diversification. Is your income portfolio one color, or a safer and more satisfying rainbow?
Next up: Thoughts on brainstorming and turning the exercise into a business.
Have you seen this turtle? How about the pirate? Maybe you saw them while growing up in your favorite comic book. Draw the turtle, send in your work and find out if you are good enough to attend the correspondence art school. Do you think the admissions standards were tough? I remember seeing these guys on matchbooks. It’s fun to think about some guy sitting in his F150 with his new pack of Marlboro Reds thinking, “Maybe I am good enough to get into art school!” OK. It’s a Saturday and we are getting ready for a big party with coolers filled with frosty drinks, so forgive me for the silliness, but consider this: Has anyone ever made you believe you aren’t creative.
Conformity and uniformity are valued by some, and we are all taught it from the very beginning. Boys and girls, line up against the wall, and no talking! Order and discipline have their places, for sure, but have you ingested this sleeping serum at the expense of your creativity and quest to do something great.
We aren’t talking about writing the next great novel, though that would be fine. What do you want to do? What do you think about when you sit around on January 1st considering the next 365 ¼ days? What is keeping you from using your gifts, interests and talents?
Think about the technology and tools that you have at your disposal right now to do something creative and special. Do you want to write? Start a blog. Take pictures? Start shooting. Start a new business? Get to work and write a description of your idea on an index card. Do you want to help others or get deeper into your faith? Do it, whatever it is. Do something
and don’t worry about what other people think. You will make mistakes and you will have failures, but you will learn. And don’t worry about asking for permission.
Everyone makes mistakes. That is no revelation, for sure. Not everyone learns from those mistakes, though. If you don’t take risks and push the envelope of your own performance, you may never make mistakes, at least not serious ones. But if you are constantly challenging yourself to reach for higher performance and exploring new opportunities, you will fall. Sometimes you will fall hard. The outcome of these experiences is the measure of their worth.
When you make a mistake, or suffer a total failure, what do you take from the experience? Is your reaction one of withdrawal and muttering under your breath? “I am never going to take a risk like that again.” Or do you reflect on what went wrong, what went right and how you could do better in the future? Growth and development do not come from taking the easy road.
What risk can you take today that could lead to the next breakthrough or the next big flop? No matter the outcome, you will learn something if you take the time to reflect and look for the learning opportunities. Don’t be afraid to take a chance and scrape your knees. That’s why they make Band-Aids. Just remember to learn from and repeat the successes while avoiding making the same mistakes in the future.
As we flip burgers, watch fireworks and maybe, just maybe, consider the history behind the holiday we celebrate on July 4th, consider your own independence. What are the actions you are taking and the plans you are developing to express yourself and show your independent thinking, motivation and decisiveness? Are you growing, learning and making yourself more valuable, or maintaining the status quo, hoping that the pink slip never comes your way?
If you work for someone else, what are you doing to deliver more value than your pay? In the last 30 days, have you done something creative, original or innovative to show your organization that you are engaged and committed to the mission? Maybe your independence is freedom from the stress that underperformers feel, knowing inside that they are not giving their best.
If you work for yourself, what have you done to bring a new service or product to market, improve service to your customers, or learn new things to give yourself a competitive edge? Have you kept your client relationships alive with relevant marketing and superior service? Are you the first service provider your clients consider when they need whatever it is that
If you are the boss, what are you doing to encourage independent thinking and innovation among your people? You can’t possibly have all the good ideas. Encourage innovation and celebrate risk taking.
Independence Day was not the end, but the beginning of an experiment by independent and free people. It’s an experiment that continues to evolve 235 years later. Take a few minutes over this weekend to consider how you can advance your own experiment and solidify your independence. Happy Independence Day!