Diversifying Your Income Stream as a Safety Net

Financial safety nets are even more important for self-employed professionals like freelance writers than for others. Having a few months worth of income in a savings account or other liquid asset, as well as disability insurance, is a good goal. But I think diversifying your income streams is even more critical. A few years ago, I realized that fully 70% of my income was coming from a single client. While it was nice to have a big contract with a client I really enjoyed working with, that percentage left me very vulnerable.

Since then, I have worked to diversify my income streams so that no single source is more than 50% of my income. Here are all of the places that I am currently earning income:

• Steady Clients — I have two clients that I work for nearly every month.
• Intermittent Clients — I have several clients who give me a few projects per year.
• Magazine Articles – I write articles for trade magazines.
• Online Courses – I teach several online courses through my websites (www.writing911.com, www.nonprofitannualreports.net) that produce registration fees.
• Tip Sheets — I sell tip sheets on various writing topics through my websites (www.writing911.com, www.nonprofitannualreports.net, www.nonprofitnewsletters.net)
• Workshops – I teach workshops through the Duke University Certificate Program in Nonprofit Management.
• Advertising Revenue — I run Google AdSense ads on most of my websites.
• Affiliate/Reseller Revenue — I run ads for affiliate program products on most of my websites.

This is the money I live off of. This list does not include investments that also produce retirement and “rainy day” savings.

Think about ways that you can diversify your income stream to make sure your safety net is securely in place. It’s the best way to ensure that you can fully enjoy the self-employment lifestyle without worrying about paying your bills.