Having a second income can mean a variety of different things to different people. It is hard to deny however, the financially freeing effects a second income can have upon an individual or family. Don’t get me wrong; there will likely be a quite a bit of effort involved in developing and maintaining a second income. However, from the freedom to explore different job and lifestyle opportunities to the effects of financial empowerment, a second income can affect people in numerous ways, many of them positive.
1. Increased Confidence: One of the great aspects of a second form of income is often the increased confidence that comes with it. A second form of income may not only give you a sense of financial well -being through the extra money it creates, but it can intensify your confidence with the knowledge that you are able to create income streams for yourself – something that isn’t always that easy to do.
2. The “Walk Away” Attitude: The part I love most about a second or third income is something I like to call the “Walk Away” attitude. This isn’t to say that you should blatantly threaten to walk off a job every time something doesn’t go you way. The “Walk Away” attitude that may come with a second income applies more to you having the knowledge that if worse comes to worse, and you find yourself put in a difficult or unreasonable position, you have the ability to walk away from a job and not put yourself in a bad position financially.
3. Diversification: As with investments, a second or third form of income can add diversity to your income streams. It is typically best not to put all your eggs in one basket when it comes to stocks and other investments, and the same holds true with incomes. Diversifying your sources of income can help protect you against unforeseen loss of income or a financial emergency.
4. Security: Security ties in with diversification when it comes to a second income. If you only have one income, and it disappears, you may be left scrambling to pay the bills. However, with multiples incomes, losing one might not affect you as adversely. While your second income might not be as much as the first, it can at least help in times of temporary cash flow problems.
5. Peace of Mind/Mental Health: With added security often comes peace of mind. When you have backup forms of income, you typically won’t be as worried about possible job loss or what would happen in a financial emergency. Peace of mind can reduce stress and relieve tension when it comes to money matters, which can often be a source of anxiety in our personal and/or family life.
6. Variety in Your Work: The nice thing about a second income is that it can often create variety in your work. While you might sit in a cubicle at your 9-5 job, when you come home, your second form of income might be a refreshing, even fun activity. Whether it is carpentry, writing, working at a resale shop, or doing home repairs, many people look at a second form of income almost as a hobby rather than as work.
7. Reaching Financial Goals: Having another income can help you reach your financial goals quicker. Whether your second income comes from a spouse, a second job, or a hobby, this extra money may be put toward saving for an education, paying off bills, preparing for retirement, or a planned investment strategy.
8. More Options: Some people will tend to look at a second form of income as a slush fund or as play money. While this isn’t always the case, it is hard to deny that a secondary form of income may create more financial options. Whether shopping, traveling, paying bills, or investing, a second income can open a wider variety of choices and alternatives when making decisions related to your living situation and lifestyle.
9. Reduced Debt: While some may view a second income as extra money to be put toward a vacation or travel account, others may use the money to pay off debt. An extra mortgage payment or two every year, or reducing your credit card debt can save you hundreds, even thousands of dollars over the course of a year or years.
10. Income Growth: The great thing about a second form of income is that it may lead to a third or four form of income through increased business partnerships or networking. Depending on what your source of income might be, you may find yourself branching into other lines of business, working with new partners, or growing your business to include new areas, markets or products.
Mark Brown is a writer for an Australian comparison website called Credit Card Compare that
offers easy comparison of a range of products including the best frequent flyer credit cards and platinum credit cards that offer amazing rewards.